Dispute Resolution and Negotiation Centre

^{Aechmea fasciata, the name comes from the Greek aichme (a spear).}

The first issue features our analysis of investor-state dispute settlement post Achmea and the Singapore Convention on Mediation.

• 01/2020 Review

The compatibility of intra-EU BITs with European law has been debated at large by academia, international arbitral tribunals and national courts. Dirk Buschle and Smaranda Miron analyse the opinion of the Advocate General in the case Slovak Republic v Achmea BV, in which it was found that found that an intra-EU BIT does not constitute discrimination on the basis of nationality and does not undermine the allocation of powers provided for under the EU Treaties and the autonomy of the EU legal system. 

Their article was published in December 2017 in the Croatian Arbitration Yearbook. 

• Download the article

On 25 February 2017, the Chair of the Dispute Resolution Centre of the Energy Community, Dr Dirk Buschle, attended the World Abritration Café, an event organised under the auspices of the Vienna Arbitration Days 2017.  Dr Buschle moderated discussions on the topic of “Investor-State Disputes and ADR”. The debate was focused on the advantages of mediation over arbitration, especially in relation to energy disputes.

A report of the discussions can be found below.

• Download the discussion report

During the First Dispute Resolution Forum, Nikos Lavranos delivered a keynote speech on the impact of the Achmea decision.

• Key note speech by Prof. Dr. Nikos Lavranos

The decision comes as a result of a request for a preliminary ruling from the German Federal Supreme Court (the BGH). The BGH inquired whether Article 344 TFEU precludes application of provisions in BITs which allow investors from European Member States to bring other Member States before arbitration tribunals, if the BIT had been signed before the accession of one of the Member States to the European Union, and arbitration proceedings were instituted only after both countries were part of the European Union; if the answer to the previous question is negative, whether Article 267 TFEU precludes the existence of such arbitration proceedings; and if the answers to both previous questions are negative, whether Article 18(1) TFEU precludes the existence of such arbitration proceedings.

The decision did not follow the  opinion of the Advocate General  issued on 19 September 2017, the conclusion of which was that EU law did not preclude the application of an investor-state dispute settlement mechanism established under an intra-EU BIT.

The Court of Justice first stated that an arbitral tribunal constituted under the BIT must rule on the basis of the law in force of the contracting state involved in the dispute as well as other (international) agreements between the contracting parties, which includes EU law. Next, the Court of Justice, unlike the Advocate General, finds that such an arbitral tribunal does not constitute a court or tribunal of a Member State within the meaning of Article 267 TFEU and, as a result, an arbitral tribunal cannot make a reference to the Court of Justice of the EU for a preliminary ruling. Lastly, the Court of Justice finds that, by concluding the BIT, the EU Member States parties to it established a mechanism for settling disputes between an investor and a Member State which could prevent those disputes from being solved in a manner that ensures the full effectiveness of EU law, even though they might concern the interpretation or application of that law. The Court of Justice concludes that the arbitration clause in the BIT is incompatible with EU law and that it has an adverse effect on the autonomy of EU law. The Court of Justice does not look into the issue of discrimination on the basis of nationality.

It remains to be seen what steps will the BGH take now and whether or not it will annul the Achmea award.

• Decision of the Court of Justice
• Buschle / Miron article on opinion of the Advocate General

• Download case summary