In 2019, the European Court of Justice shocked the arbitration community with the release of Opinion 1/17. The opinion turned once again to the compatibility of Investor-State Dispute Settlement mechanisms under EU law, finding the provision in Canada’s Comprehensive Economic and Trade Agreement compatible. Yet the ruling appeared at odds with the court’s own case law. Only a year earlier, in Slovak Republic v. Achmea, the court had found the Investor-State Dispute Settlement (ISDS) provision in a Netherlands-Slovakia treaty incompatible.
This article examines the two cases to consider the jurisdictional compatibility of investorstate arbitration bodies under EU law. Through a close reading of the judgments, it traces a common thread in the court’s reasoning – the principle of mutual trust. It argues that mutual trust can be seen both as the Court’s metric for limiting the scope of arbitration practice, as well as the source of the court’s autonomy within the EU legal order. In so doing, the paper seeks to resolve the apparent conflicts between these two contrasting cases, while also commenting on the Court’s approach to decision-making more broadly.
Arbitration: The International Journal of Arbitration, Mediation and Dispute Management