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Achmea: The Fate and Future of Intra-EU Investment Treaty Awards under the New York Convention

Published on May 8, 2018        Author: 
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On March 6, 2018, the CJEU rendered its judgment in the long-awaited Slovak Republic v. Achmea case (Case C-284/16). This case involved a preliminary reference from the German Bundesgerichtshof in the context of setting aside proceedings initiated by Slovakia against a 2012 award, which was rendered by an investment tribunal in accordance with the UNCITRAL Rules under the BIT between the Kingdom of Netherlands and Czech and Slovak Federative Republic, in force since 1992. Based on its analysis of certain provisions of the EU Treaties (TEU and TFEU), the CJEU ruled that an Investor-State Dispute Settlement (“ISDS”) provision in an intra-EU is not valid under EU law.

Thus far, the academic discussion surrounding the case has focused on the fate and future of Intra-EU BITs (see here and here) but has not ventured into the consequences of the decision for the arbitral awards rendered under these BITs. Since the Achmea decision forms part of EU law and is binding on the national courts of all EU Member States, it reasonably follows that national courts within the EU must now refuse to recognize and enforce non-ICSID awards based on ISDS provisions in intra-EU BITs. However, under Article III of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (“New York Convention”), national courts within the EU also have an obligation to recognize and enforce arbitral awards except where one or more of the seven grounds under Article V apply. This piece utilizes this legal conflict that courts within the EU now face as its starting point and explores the practical implications of the Achmea decision through the lens of Article V of the Convention, focusing on two grounds in particular: violation of public policy and invalidity of the arbitration agreement. Read the rest of this entry…

 
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