The Incompatibility of Intra-EU Investment Treaty Arbitration With European Union Law – Assessing the Scope of the ECJ’S Achmea Judgment

El pasado día 19 de enero de 2019, los representantes de todos los Estados miembros de la Unión Europea firmaron una carta declarando nulos los Acuerdos Intercomunitarios de Protección Recíproca de Inversiones: Con este documento, los gobiernos muestran su respaldo a la Sentencia del Tribunal de Justicia de la Unión Europea de 26 de marzo de 2018 en el asunto Achmea, que había declarado la incompatibilidad de la cláusula de arbitraje incluida en el Tratado Bilateral de Inversiones celebrado en 1991 entre el Reino de los Países Bajos y la República Federal Checa y Eslovaca con el Derecho de la Unión Europea. Los 28 Estados siguen, así, las directrices de la Comisión Europea en su Comunicación de julio de 2018, que declaró la incompatibilidad de estos Tratados Bilaterales de Inversión intra-UE con el Derecho de la Unión. El presente trabajo tiene como objeto realizar un análisis del contenido de la mencionada sentencia, así como de sus consecuencias tras aquella declaración de los Estados miembros y de la Comunicación de la Comisión, con especial hincapié en su incidencia en el arbitraje de inversión en nuestro país. On January 19th, 2019, the representatives of all the Member States of the European Union signed a letter declaring invalid the Inter Communitary Agreements on Reciprocal Investment Protection, supporting the Judgment of the Court of Justice of the European Union of 26 of March 2018 in the Achmea case, which had announced the incompatibility of the arbitration clause included in the Bilateral Investment Treaty concluded in 1991 between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic with the European Union Law. The 28 States follow the guidelines of the European Commission in its Communication of July 2018, which declared the incompatibility of intra-EU BITs with the European Union law. This paper aims to analyze the content of the aforementioned judgment, as well as its consequence and those of the declaration of the Member States and the Communication of the Commission, with special emphasis on its impact on our country´s investment arbitration.

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The Incompatibility of Intra-EU Investment Treaty Arbitration With European Union Law – Assessing the Scope of the ECJ's Achmea Judgment

Volume 61 · 2018 - German Yearbook of International Law ◽

10.3790/gyil.62.1.475 ◽

2021 ◽

Vol 62 (1) ◽

pp. 475-504

Author(s):

Julian Scheu ◽

Petyo Nikolov

Keyword(s):

Dispute Settlement ◽

Legal Reasoning ◽

Eu Law ◽

European Union Law ◽

Present Contribution ◽

Investment Treaty ◽

European Court ◽

Energy Charter Treaty ◽

The One ◽

Investment Treaty Arbitration

Abstract: In March 2018, the European Court of Justice rendered its Achmea judgment, by which the Court considered the investor-State dispute settlement (ISDS) clause contained in the Dutch-Slovakian investment treaty to be incompatible with EU law. Even though the judgment is considered to be a landmark decision, its potentially far-reaching consequences remain, due to a rather obscure legal reasoning, difficult to assess. The aim of the present contribution is to assess the scope of the Achmea judgment in order to shed light on its relevance for pending and future intra-EU investment arbitrations. In view of the ECJ's Opinion 1/17 rendered in April 2019 and in consideration of recent arbitral practice it is concluded that the scope of the Achmea judgment concerns the incompatibility of intra-EU investment treaty arbitration with EU law. This means on the one hand that the reasoning in Achmea is transferrable not only to ISDS clauses in other intra-EU BITs, but also to Article 26 of the Energy Charter Treaty. On the other hand, the analysis shows that contract-based investment arbitrations are not concerned by the ECJ's findings. Finally, and in view of its clarified scope of application, the relevant factors for analysing the consequences of the Achmea judgement are identified.

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