European Court of Justice to Decide Legality of CETA Multilateral Investment Court

Belgium seeks legal review in the context of existing European laws and treaties

September 6, 2017

Brussels, Belgium — On Wednesday, September 6, the Belgian government requested that the European Court of Justice (ECJ) rule on whether the investor-state dispute court established in the EU-Canada trade deal (CETA) is compatible with EU law. In an attempt to legitimize the investor-state dispute settlement (ISDS) provisions in the treaty, the EU and Canada agreed to establish a Multilateral Investment Court (MIC), which addresses a narrow set of problems with ISDS but exacerbates other essential flaws.

On February 15, the European Parliament approved CETA. The EU and Canada will begin provisionally applying the treaty on September 21, but the individual countries of the EU must ratify the free trade agreement in their own parliaments before the treaty is fully implemented. Belgium’s legal challenge before the ECJ could delay its ratification.

“The MIC would further empower corporations, while threatening the rights and protections of people and the environment,” said Layla Hughes, Senior Attorney at CIEL. “Investor protections must not undermine the power of our domestic courts and laws. The ECJ should find that MIC is incompatible with EU law, in order to protect the sovereignty of EU governments and their power to enact laws to protect their citizens over the narrow interests of foreign companies.”

Investor-state dispute protections allow foreign investors to sue governments for financial damage they theoretically suffer, including potential profits, as a result of laws that protect the public interest. These tribunals are only available to international investors, while governments, domestic investors, civil society, and citizens are not able to bring a suit against the corporation. The dispute settlement process is also conducted outside public participation and oversight.

The government of Wallonia, a region of Belgium, blocked ratification of the treaty due to concerns over these investor provisions. As part of a deal struck with Wallonia, the Belgian federal government has submitted its request to the ECJ to review the legality of the deal in the context of existing European laws and treaties.