By Veronika Yefremova [1]
On 11 June 2025, the 2nd edition of the book ‘International Arbitration and EU law,’ edited by Prof. Nikos Lavranos (Secretary General of EFILA; Founder NL-Investmentconsulting) and Dr. Stefano Castagna (Researcher at Wirtschaftsuniversität Wien (WU Vienna)) was presented during a book launch at the Academy building of Leiden University.
This blog post aims to provide a brief book synopsis and an overview of the discussion that took place during the book launch.
International Arbitration and EU law: what is the book about
As its first edition, this second edition of ‘International Arbitration and EU law’ focuses on the interaction between international commercial arbitration and investment treaty arbitration through the lenses of EU law. Although traditionally seen as two separate fields, which are usually covered in different courses at university level, in practice, there is an emerging trend of interaction between the two. There are several reasons for such convergence. This is precisely the premise of the book.
Firstly, the foundational principles which international commercial and investor-state arbitration base themselves on are shared. For example, principles of consent to arbitration, the selection of arbitrators, the setting aside of awards (non-ICSID awards), as well as recognition and enforcement share the same principles and are oftentimes even regulated by the same instruments. This is why most arbitration lawyers deal with both commercial and investor-state arbitration. Secondly, EU law has become increasingly relevant in both fields. Both through growing legislation and case law of the Court of Justice of the European Union (CJEU), EU law principles have started to apply and shape the way we see international arbitration.
These issues are dealt with distinctly in the book, allowing various chapters to deal with specific issues, and tensions that exist. For example, in Part I, which deals with international commercial arbitration, collective redress and anti-suit injunction reliefs are addressed from the perspective of EU law. This was also further elaborated on during the book launch. As for Part II on investor-state arbitration, the book zooms in on the difficult situation in intra-EU BITs and the imprint that EU law has left on Energy Charter Treaty (ECT) arbitration. Since the book brings together practitioners and academics of the field alike, it gives a thorough overview of the current situation and the emerging case law on the abovementioned topics.
Lastly, Part III addresses cross-cutting issues. This was added in the second edition of the book, as a way of integrating the two previous sections. It enabled the introduction of certain fields that have gained traction in recent years, such as human rights, taxation, and environmental protection. This section focuses on how international arbitration can be more climate responsive and how the incorporation of new climate related clauses are setting the scene for the next generation of international trade and investment agreements. Another thought provoking chapter focuses on the future of the Investor-State Dispute Settlement (ISDS) system and what it could entail. The author proposes various ways in which reform of the current system could take place in order to make the system fit for the future of investment arbitration.
The book launch event
The afternoon of the book launch was filled with interesting discussions and presentations by several authors of the various chapters featured in the book. As Prof. Christa Tobler (Professor of European Law, University of Basel; University of Leiden) mentioned in her opening speech, the special aspect of the book lies in the fact that it combines commercial and investment treaty arbitration. This was followed by a keynote by Prof. Freya Baetens (Professor of European Law, Leiden University; Professor of Public International Law, University of Oxford), who focused on three problems the EU has with international arbitration — and how both legal systems would benefit from studying the other respective discipline.
Prof. Baetens raised fundamental questions of domestic courts lacking resources and expertise to deal with highly technical and sector specific arbitration disputes. She proposed three solutions for this conundrum. First, parties should look for a forum that best fits their dispute. Second, treating EU law as ‘fact’ or as ‘law’ does not help to resolve the dispute, and using the primacy of EU law as a defence in international arbitration also muddles the waters. Lastly, she teased the audience with the proposition of allowing ISDS tribunals to refer questions to the CJEU. She motivated this by arguing that arbitral tribunals derive their jurisdiction from international investment treaties; they are permanent, and of compulsory jurisdiction (since arbitral awards have the same status as domestic court judgments).
Against this backdrop, the book launch moved to three thematic panels, each exploring a distinct aspect of the book’s subject matter. The first panel discussed issues of commercial arbitration and EU law. It was kicked off by Dr. Piotr Wilinski (Assistant Professor, Erasmus University Rotterdam), who discussed the interaction between international arbitration and EU law in the pre-award phase. Historically, the EU has largely followed a hands-off approach mainly due to the highly successful United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). This is, however, increasingly changing. Competition law, agency directive and EU sanctions are examples of fields that have invalidated arbitral proceedings under Art. V of the New York Convention. Dr. Wilinski also observed that looking forward, the Brussels I bis Regulation reform is ongoing with rules on lis pendens being (re)negotiated again, and the approach to the intensity of review of awards will most likely change, considering the current cases dealing with some intrusive review.
This was followed by Bryce Williams (Legal Counsel, Permanent Court of Arbitration), who discussed the ever-green issue of anti-suit injunctions. He highlighted that anti-suit injunctions serve as a tool in situations of complex enforcement. This, however, conflicts with mutual trust, which is a principle EU national courts are bound by. Courts of EU Member States are obligated to uphold earlier judgments rendered by other EU courts, since the system operates on the presumption that EU law was interpreted correctly by any national court within the EU. Therefore, these injunctions are seen as controversial given they are seen as interference of courts making a judgment. If all courts had the power to grant anti-suit injunctions chaos would emerge, since there would be a real risk of ‘tit for tat’ injunctions. This would run the risk of causing tensions between injunctions and lis pendens rules even further.
The second panel looked at the flip side of the coin, zooming into issues of extra-EU and intra-EU investment arbitration. Dorieke Overduin (Counsel, Sovereign Arbitration Advisors) raised important issues on the Comprehensive Economic and Trade Agreement (CETA), and the evolution of investment agreements. Ms. Overduin noted that CETA was already under negotiation in 2009, but its framework changed with the entry into force of the Lisbon Treaty revision in December 2009, which transferred exclusive competence for Foreign Direct Investment (FDI) to the EU. As regards investment arbitration, the CJEU accepted in a Solange-type approach the investment court system (ICS) contained in CETA, which reflects more a court system than arbitration.
Unlike in the case of extra-EU BITs where there has been no dismantling of arbitration, the situation for intra-EU arbitration is opposite, as pointed out by Prof. Nikos Lavranos. Here, Prof. Lavranos painted quite a grim picture of the current situation, where we have a termination agreement for intra-EU BITs, which terminated them together with the sunset clause. At the national level, domestic courts rely on the primacy of EU law to prohibit investors from continuing intra-EU cases. This inevitably leads to a ‘Greek salad’ where there is intermingling of EU and domestic courts in arbitration in this field.
A discussion subsequently broke out whether the new ICS proposed by the EU Commission is beneficial and whether the difference in approach of intra and extra-EU arbitration was a good thing. Different opinions were raised on the EU’s approach to FDI. The question remains whether EU law rules are sufficient to deal with investment These issues will need to be addressed in the years to come.
The third panel looked at cross-cutting areas and issues. Fahira Brodlija (Adjunct Lecturer, International University of Sarajevo) kick-started the discussion on the situation in the Western Balkans and their aspirations for EU accession. This became the backdrop to the proposal of mediation provisions, which the EU is in favour of. However, in the negotiation phase of investment agreements, many states lack robust communication channels and coordination agencies to deal with foreign investors and their investments. This is where opportunities are missed to engage with investors and find a common solution. Mrs. Brodlija highlighted that overly defensive treaty reforms and the loss of trust in the ISDS reform’ discussions have led to a difficult situation.
Dianne Lake (Associate, Arnold & Porter) addressed the need for international arbitration to become more climate responsive. While the chapter Mrs. Lake wrote in the book deals with incompatibilities between EU law and the ISDS system, in her intervention, she noted the criticism faced by ISDS for neglecting public interest. States need to reform laws to incorporate ESG, corporate responsibility, which are all being negotiated now. However, arbitration is seen negatively since States who rely on arbitration have not yet implemented climate related clauses in most instances. This is why at the moment arbitration is seen as an avenue that avoids public interest considerations. According to Mrs. Lake, the ISDS reform needs to integrate climate conscious language and the right for states to regulate on environmental issues, She also pondered on the suitability of commercial arbitration in resolving disputes in the climate context. Here, the effectiveness of the system and speedy resolution could be of help.
Lastly, Dr. Stefano Castagna raised the complex topic of international taxation and arbitration. He did this elegantly in three points. Firstly, he stated that some experts believe that there is no such thing as international tax. Secondly, investors are tax payers and lastly, that the Working Group III is becoming a tax expert when looking into reform. Looking forward into how tax and arbitration will interact, during the drafting of investment agreements, tax laws are always considered, especially when one thinks of implementation. Additionally, investment treaties have carve outs which apply to tax, so one’s understanding of tax and the definition is crucial. Looking into the future, Dr. Castagna underlined that the tax community wants exclusion of tax matters from arbitration procedures contained in BITs, which is difficult for States to accept.
This ended the fruitful discussions and interventions by the speakers and audience. With more food for thought, individual discussions continued over drinks. With so many different important topics raised, and plenty of developments in both commercial and investor-state arbitration, this book is paramount to understanding the relationship between EU law and international arbitration.
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[1] PhD Fellow at Europa Institute, Leiden University