CYIL 2015

POSTǧLISBON EXERCISE OF EU COMPETENCE IN THE FIELD OF FOREIGN INVESTMENT… development due to lack of practice, 102 and although the main rules articulated therein do not show much support for EU executive federalism, one of the final “General Provisions” preserves the applicability of lex specialis 103 and foresees therefore a carve out that can accommodate a specific model applicable to the European Union and its Member States provided, we can add, that such a model can be identified, 104 which the ILC eventually declined to do. So far, the competence-based model of executive federalism seems to be one of them and quite noticeably, neither the Financial Responsibility Regulation nor the EUSFTA and CETA have been designed to embrace it. 105 B. Extra-Intra-EU Testing of the “Right Respondent” Rule The “right respondent” rule in the EUSFTA and CETA arguably aims to avoid the above described uncertainties by putting into place a mechanism that would do away right at the beginning of any arbitral proceedings with hesitations as to who should appear before the investment tribunal to respond to a given claim. As noted above, if the Union manages to answer the “right respondent” interrogation within the defined timeframe, its response can ensure projection of the rules defined in the Financial Responsibility Regulation. However, these legal mechanisms still raise some questions as to their interplay with the rules of international responsibility that the investment arbitral tribunal will apply. To begin with, it is unclear whether they are supposed to operate if both the Union and the Member States participate in the trade agreement concerned or also if the latter is concluded as Union-only. While under a mixed participation, this mechanism can certainly be used, it is uncertain how it will be triggered if only the Union is party to the EUSFTA/CETA. As noted above, it will not be possible for the Member States to acquire an autonomous respondent status in an arbitration proceeding if they are not themselves parties to the underlying agreement unless they give consent to arbitration ad hoc (with further interrogations that this would entail 106 ) or unless they can be considered as legal representatives of the Union, in which case it would still be the Union and not the Member States 102 DARIO, quoted above, fn. No. 87, pp. 2-3, pt. 5. 103 Art. 64 DARIO quoted above, fn. No. 87: “These articles do not apply where and to the extent that the conditions for the existence of an internationally wrongful act or the content or implementation of the international responsibility of an international organization, or a State in connection with the conduct of an international organization, are governed by special rules of international law. Such special rules of international law may be contained in the rules of the organization applicable to the relations between an international organization and its members”. 104 ŠTURMA, P., “The Responsibility of International Organizations and Their Member States” in RAGAZZI, M., (ed.) Responsibility of International Organizations: Essays in Memory of Sir Ian Brownlie , Leiden, Boston: Martinus Nijhoff Publishers, 2013, xlvi, 469 p., pp. 313-324, p. 319. 105 As the Commission notes in its proposal of the Financial Responsibility Regulation, the attribution –related provisions are rather commanded by the call of pragmatism. See the proposal quoted above fn. No. 73, p. 5. 106 See above.

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