Attempts by the Transatlantic Trade and Partnership (TTIP) to set up its own investment tribunal court have been dealt a blow by the German Magistrates Association (DRB), which said it saw 'neither a legal basis nor a need for such a court.'
The idea of the Investment Court System (ICS) proposed by the European Commission, was that companies operating under the TTIP could appeal cases where they found national legislation too restrictive. In effect, they could use their own court to sue countries that were not cooperating as they might have wished. The judges warned that such a court might give companies too much power to override existing legal frameworks, which they said already provide adequate protection.
The statement was strongly worded and pulled no punches. It cast doubt on the trustworthiness of such a corporate judiciary:
“The German Magistrates Association has serious doubts whether the European Union has the competence to institute an investment court. […] An ICS would not only limit the legislative powers of the Union and the Member States; it would also alter the established court system within the Member States and the European Union."
The ICS had been envisaged as a compromise to assuage critics of TTIP. It was proposed by EU trade Commissioner Cecilia Malmström as a replacement for the Investor-State Dispute Settlement (ISDS), a flexible system currently used for arbitration of trade disputes. Not everybody in the German legal system rejects the idea however, as the German Justice Ministry defended it: “An investment court may well be necessary, because the UDS investor protection allowed by TTIP may not be enforceable in national courts.”
In theory, the ICS could affect farmers if, for example, US beef companies requested access to Irish markets. They would be denied on the basis that hormone-enhanced beef does not meet Irish food safety requirements. They might then gain a judgement in the ICS to overturn Irish food standard legislation or win a compensation package, payable by the Irish government.
Civil liberties groups have welcomed the German magistrates' announcement but are braced for a fight, as the issue has not gone away. Asked for comment, Commissioner Malmström referenced a statement released in September outlining European Commission approval for the ICS.