The end of intra-EU investment arbitration?


Joana Holzmeister e Castro

The 2018 decision in Achmea[1] took the arbitration world by storm, spurring a debate across all European countries regarding investment treaty arbitration. In its judgment, the Court of Justice of the European Union (“CJEU”) ruled that the investment arbitration mechanism in the Netherlands-Slovakia bilateral investment treaty precludes disputes over either the application or the interpretation of EU law decided by courts of the EU judicial system. Strictly speaking, it understood that intra-EU BITs are incompatible with EU law.

More recently, in January 2019, the aftermath of the decision culminated in a declaration made by the EU to cancel intra-EU BITs. The investment treaty arbitration (“ITA”) always suffered some sort of resistance by the EU, so it made sense that in the Achmea judgment the CJEU ruled on a number of issues that reasoned the incompatibility of intra-EU BITS, namely the supremacy of EU and the role of EU institutions.[2]

Following Achmea, arbitral tribunals seemed to restrict its significance by looking for ways to maintain their jurisdiction. This is what happened for instance, in Masdar Solar v. Spain (ICSID Case No. ARB/14/1),[3] a case where the Energy Charter Treaty (“ECT”) was materially applicable. Here, the arbitral tribunal considered that the decision in Achmea did not make specific mention to the ECT and thus, it would fall outside the scope of Achmea. Similarly, in Vattenfall v. Germany (ICSID Case No. ARB/12/12),[4] the arbitral tribunal ruled that the Achmea decision was not relevant to ECT-based claims.

While arbitral tribunals were looking for a way to circumvent the possible negative reverberation that Achmea represented the beginning of the end of investment arbitration within the European Union, the EU Commission was steadily working to make that become a fact. On 18 July 2018, a Communication was released in which the Commission cited Achmea and stated that the decision should also be extended to multilateral agreements, including the ECT (“The Achmea judgment is also relevant for the investor-State arbitration mechanism established in Article 26 of the Energy Charter Treaty as regards intra-EU relations”).[5]

The result was a series of declarations published on the European Commission website, where all current EU members agreed to terminate intra-EU BITs by 6 December 2019.[6] This outcome would  be aligned with the ruling in Achmea, in other words, that intra-EU BITs are incompatible with EU law.

However, not all member states considered the ECT to be covered by Achmea. In a separate declaration, Sweden, Finland, Slovenia, Malta and Luxemboug, considered the judgment to be silent in regards to the investor-state dispute clause in the ECT[7]. Still, Hungary decided to publish its own declaration suggesting that as the ruling in Achmea does not contemplate intra-EU arbitration under the ECT, it does not affect any pending or prospective arbitration proceedings, which have been or may be initiated under it.[8]

In any event, all member states declared themselves to be committed to discussing with the EU Commission on the next steps of investment treaty arbitration within the EU. It also remains to be seen how arbitral tribunals with pending investment cases that deal with intra-EU BITs will respond to said declarations. For now, the arbitration world anxiously awaits further developments.




[1] Judgment of the Court (Grand Chamber) of 6 March 2018 (request for a preliminary ruling from the Bundesgerichtshof — Germany) — Slowakische Republik v Achmea BV (Case C-284/16), available at:

[2] Jones T., EU countries to cancel BITs post-Achmea, GAR, 17 January 2019, available on:

[3] Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain (ICSID Case No. ARB/14/1), available at:

[4] Vattenfall AB and others v. Federal Republic of Germany (ICSID Case No. ARB/12/12), available at:

[5] Dragiev D., 2018 in Review: The Achmea Decision and its Reverberations in the World of Arbitration, Kluwer Blog, 16 January 2019, available on:

[6] Declaration of  the representatives of the governments of the member states, 15 January 2019, available on:

[7] Declaration of Sweden, Finland, Slovenia, Malta and Luxemboug, 16 January 2019, available on:

[8] Declaration of Hungary 16 January 2019, available on:[:]

Sou assinante
Sou assinante