Investment court has 'No Legal Basis' in TTIP - German Magistrates Union

Feb 03, 2016 12:00 AM

Highly controversial plans to allow multinational corporations to sue governments in the proposed TTIP trade deal have been dealt a huge blow, with Germany's largest association of judges and public prosecutors saying there was "neither a legal basis nor a need" for such measures to be introduced.

The German Magistrates Association (DRB) rejected the European Commission's 'Investment Court System' proposal, which would grant multinational corporations the right to sue national governments if they were deemed to have inhibited the investment opportunities of private companies.

The European Commission tabled the investment court system (ICS) plans as a compromise, following widespread opposition to the previously proposed Investor State Dispute Settlement (ISDS) mechanism.

ICS: 'Lacks Factual Basis'

Chief among the DRB's concerns is the legal basis for such an investor court and whether it is actually needed in the TTIP, which is being negotiated by the EU and the US.

"The clearly implied assumption in the proposal for an International Investment Court, that the courts of the EU Member States fail to grant foreign investors effective judicial protection, lacks factual basis," the DRB said.

The magistrates association argued that any concerns or perceived weaknesses over the legal protection offered in the legal systems of member states should have been previously raised during TTIP negotiations, so the issues could have been look at internally.

"Only in this way can the full legal rights to which any law-seeking party in Germany and the European Union is entitled, be guaranteed. The creation of special courts for certain groups of litigants is the wrong way forward."

The judges also raised concerns over the court's impact on the sovereignty of TTIP signature states, questioning 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. In the opinion of the German Magistrates Association, there is no legal basis for such a change by the Union."

Concerns Over Independence of Courts

The DRB also echoed the sentiment of campaigners who have raised concerns over the objectivity of the proposed investment court and whether they would meet international legal standards.

"Neither the proposed procedure for the appointment of judges of the ICS nor their position meet the international requirements for the independence of courts. As such, the ICS emerges not as an international court, but rather as a permanent court of arbitration," the association said.

In a statement sent to Sputnik, Nick Dearden, director of UK-based anti-TTIP campaigners Global Justice Now, said the DRB's criticism justifies his group's ongoing campaigning against investment court procedures being included in trade deals like TTIP.

"This statement by German judges completely supports what campaigners have been saying: the Commission's 'compromise' proposal is actually about trying to legitimize the handing of special legal privilege to big business. It's not about making things fairer, but trying to buy off opposition. It's an assault on the sovereignty of Britain and the EU.

"But the statement proves the Commission has failed — in fact they have simply garnered new opposition. After this disastrous attempt to get themselves out of a deeper hole, we urge the Commission once again to drop their plans for this toxic trade agreement and drop TTIP altogether."

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