Investment and EU Law: Reconceptualizing Reverse Discrimination

The RULIERD project aims to reconceptualise the hierarchy of norms of the European legal order to lessen the clash between European Union (EU) law and international investment law. To achieve this aim, the project examines reverse discrimination (RD) as an understudied, and yet representative issue of this larger phenomenon. Following the Achmea case of 2018, the Court of Justice of the EU has progressively developed a far-reaching interpretation of the principle of autonomy of the European legal order that renders difficult the coordination of EU law with international investment law. At a theoretical level, RULIERD will be the first research project to explain the connection between the dualistic attitude of the Court of Justice of the EU and RD. At a practical level, it is unclear whether RD is admissible under article 18 of the Treaty on the Functioning of the EU or under general international law. RD may in fact endanger the principles of equality and fair competition: if foreign firms are treated more favourably than domestic firms, this disadvantages small domestic companies, thus adversely affecting economic development. RULIERD examines the practical and theoretical aspects of RD using an innovative combined methodology that involves the use of law and economics. Market power theory allows defining RD and testing whether RD jeopardises the fair functioning of the common market. The hypothesis is that a neo-monist approach could avoid RD. RULIERD makes both a theoretical and practical contribution: it mitigates the clash between EU law and international investment law and, identifies a fairer legal framework for companies operating in the EU market.