Reform of the Brussels Regulation will continue proceeding through 2012. On 14 December 2010, the European Commission proposed to extend the arbitration exception contained in Article 1(2)(d) (see Legal update, Brussels Regulation reforms: European Commission proposes to retain arbitration exception). The Commission's proposal is proceeding under the ordinary legislative procedure and is awaiting a first reading in the European Parliament (EP). The rapporteur of the EP's Legal Affairs Committee (LAC) published a draft report on the proposal in June 2011, recommending that the arbitration exception be retained (see Legal update, European Parliament committee report on proposed amendment of Brussels Regulation). The next stage will be for the LAC rapporteur's draft report to be adopted by the whole of the LAC. The EP will then vote on the LAC's report at its plenary session. According to the EP's legislative observatory file (where progress of the legislative proposal can be tracked), the plenary session is due to take place on 2 July 2012. Once the EP has adopted a position at first reading, the Council of the EU will adopt its position at first reading.

For more information about the Brussels Regulation reform, see Practice note, Reform of the Brussels Regulation: tracker.

In July 2012, the European Commission published a draft regulation to establish transitional arrangements for bilateral investment agreements between member states and third countries (see Legal update, Commission publishes EU investment policy and sets its approach to bilateral investment agreements between member states and third countries). The draft regulation establishes the terms, conditions and procedure under which member states are authorised to maintain in force, amend or conclude bilateral investment treaties with third countries. In accordance with the ordinary legislative procedure, the European Parliament (EP) adopted a position on the draft regulation at first reading on 10 May 2011, in which it proposed amendments to the draft regulation (see Legal update, European Parliament votes on transitional arrangements for BITs between member states and third countries). The next stage in the process will be for the Council of the EU to consider the EP's proposed amendments. We understand that an informal dialogue is now underway between the Council and the EP, presumably with a view to reaching agreement at first reading. We will continue to monitor developments.