German Judges Rule Against Key TTIP Provision

There’s been a big development in the battle against the Transatlantic Trade and Investment Partnership (TTIP). German judges have ruled against its key Investor State Dispute Settlement (ISDS) provisions, saying that there was no need for such a court and that regular courts were sufficient.

One of the hugely controversial elements of a number of these “trade” deals is the ISDS provisions. Such provisions have been found in both TTIP and the Trans-Pacific Partnership agreement (TPP). The way these provisions work is that an international tribunal is set up independent of a particular countries legal system. In it, major corporations can sue a country if their laws interfere with either the corporations profits or future profits. So, for example, if major record labels demand that a particular country adopt a three strikes law for copyright infringement, and that country’s government says “no”, that corporation can simply go to the international tribunal and sue that country for impeding their future profits for not implementing that law.

German judges may have struck a blow to such laws. According to DW, judges have ruled that such courts are unnecessary and have no legal basis. From the report:

The German Magistrates Association (DRB) has delivered a slap in the face to the European Union, by coming out against one of the key planks of the Transatlantic Trade and Investment Partnership (TTIP) – the special courts allowing investors and corporations to sue national governments if their policies happen to threaten their profits.

“The DRB sees neither a legal basis nor a need for such a court,” the association said in a statement issued on Wednesday. The judges added that the assumption that foreign investors currently don’t already enjoy “effective judicial protection” has no “factual basis.”


The judges said the ICS represents a threat to the sovereignty of legal systems already in place in Europe, and they put little faith in the EU’s ability to manage it: “The German Magistrates Association has serious doubts whether the European Union has the competence to institute an investment court,” the statement read. “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.”

While the significance in the TTIP debate is quite big, this could also be seen as a shot across the bow for other trade deals – even those that may not involve Germany specifically. Now, opponents to such provisions of other trade deals can point to the German ruling and say that if it is illegal to have corporate controlled courts that exists outside the countries legal system, why should this country allow such a thing here?

What’s more is that the removal of ISDS provisions of these trade agreements can make it more difficult to enforce other provisions in these trade agreements. Implementing and enforcing such laws would fall more into the countries governments hands because if litigation were to happen, it’s more likely to be carried through the countries court system instead.

What would be interesting to see is if other courts from other countries make similar findings later on. Will such a ruling be contained to Germany, or would other countries make preemptive protections such as this against these agreements?

Drew Wilson on Twitter: @icecube85 and Google+.

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