Th e future of BITs between EU Member States : are intra-EU BITs compatible with the internal market?

Following the accession to the European Union of new Member States in 2004 and 2007, former third country BITs became BITs between EU Member States ("Intra-EU BITs"). Member States have been requested to terminate Intra-EU BITs, but, except few cases, they seem reluctant to follow the Commission’s advice. According to the Commission, the Intra-EU BITs still in force amount to an “anomaly within the EU internal market”. In particular, they would entail discrimination among EU investors either as to substantive matters or as to procedural protection (namely investor--State arbitration). Moreover, disputes concerning issues relevant to EU Law submitted to treaty-based arbitration cannot be heard by the EU Court of Justice. The chapter investigates the compatibility between Intra-EU BITs and the EU legal system taking into account the different positions taken by the Commission and by some Member States. A final critical examination of the case-law of arbitral tribunals and of the EU Court of Justice aims at assessing the best solution to safeguard investments in the EU respecting the specificity of the EU legal order.