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Furthermore, since investor
state tribunals interpret and apply investment treaty obligations in a highly self
refering manner, it is difficult to know when an arbitral tribunal interprets
domestic law and when it merely applies it as facts to the case1.
The Iron Rhine case between the Netherlands and Belgium provides a good example2.


In this case Belgium
sought to reopen a railway line, which passed through a protected area in the Netherlands,
based on a treaty it signed with the Netherlands in the 19th century3.
An arbitral tribunal was established under the auspices of the Permanent Court
of Arbitration. The parties sent a letter to the Commission, informing it that
they shall comply with their Article 344 TFEU obligations, if the question of
interpretation of EU law would arise4.
According to the parties agreement, the arbitral tribunal would refer a preliminary
question to the ECJ, if during the proceedings it engaged in the interpretation
of EU law5. Despite
this, the arbitral tribunal ended up interpreting and applying EU law without
the Commission ever launching infringement proceedings against the two countries
for clearly breaching Article 344 TFEU6.  Other case Commission v Slovak Republic7, concerning
the Swiss Czech and Slovak BITs, is another example of how in practice even the
ECJ blurs the distinction between application and interpretation. Even though
the ECJ acknowledged that it was not for it to interpret the Investment Protection
Agreement, the ECJ in fact ended up interpreting the Agreement when it determined
that an investment was made8.

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While Iron Rhine and
Commission v Slovakia concerned agreements to which the EU was not a party,
TTIP would be a mixed agreement, concluded by the EU and its Members States on
the one side, and the USA on the other. Under the ECJ’s longstanding Haegeman
jurisprudence, international agreements which are binding on the EU become an
integral part of the EU legal order9.
This means that the ECJ would consider a bilateral or multilateral agreement as
part of the EU’s domestic law, the same domestic law which the ICS is prohibited
from interpreting in a binding manner. Coupled with the ECJ’s exclusive
jurisdiction over EU law provisions, this could lead to the presumption that the
the EU’s autonomy is “threatened every time that another body can render binding
interpretations over EU law10”.

1 Stephan W Schill, Deference in Investment Treaty Arbitration: Re-Conceptualizing
the Standard of Review (2012) 3(3) JIDS 577, 591.

2 Arbitration regarding the Iron
Rhine (Ijzeren Rijn) Railway (The Kingdom of Belgium and The Kingdom of the
Netherlands ), Award of the Arbitral Tribunal (24 May 2005) XXVII RIAA 35.

3 Ibid paras 16-25.

4 Nikos Lavranos, Which Court Is
the Supreme Arbiter? (2006) 19 Leiden Univercity p. 223, 228.

5 Iron Rhine para 103.

6 Supra note 219.

7 Case C -264/09, Commission v
Slovak Republic 2011 ECR I -8065.

8 Konstanze von Papp, Clash of “Autonomous Legal Orders”: Can EU
Member State Courts Bridge the Jurisdictional Divide Between Investment
Tribunals and the ECJ? A Plea for Direct Referral from Investment Tribunals to
the ECJ (2013) 50 CMLR p. 1039.

9 Case C -240/09, Lesoochranárske zoskupenie v Slovak
Ministry 2011 ECR I -1255, para 30.

Stephan Schill, The Proposed TTIP
Tribunal and the Court of Justice: What Limits to Investor-State Dispute
Settlement under EU Constitutional Law? (Verfassungsblog, 2015)
investor-state-dispute-settlement-under-eu-constitu tional-law/#.VhPdKPkYMmA.

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