Content area
Full Text
On March 6, 2018, the Grand Chamber of the Court of Justice of the European Union (CJEU or Court) rendered its judgment in Slowakische Republic (Slovak Republic) v. Achmea B.V. (Achmea decision) in response to the German Federal Court of Justice's (Bundesgerichtshof) request for a preliminary ruling. 1 Deciding for the first time on the compatibility of the arbitration provision in bilateral investment treaties (BITs) with European Union (EU) law, the Court concluded that the investor-state arbitration clause in the Dutch-Slovak BIT was incompatible with EU law because it violated the principle of autonomy. The Court will soon respond to Belgium's request for an Opinion on the Canada-EU free trade agreement (FTA), where it will rule on the compatibility of extra-EU investment agreements with EU law. 2
The Bundesgerichtshof’s request for a preliminary ruling posed three questions to the CJEU: (1) Does Article 344 of the Treaty on the Functioning of the European Union (TFEU) 3 (demarcating exclusive jurisdiction over Treaty disputes) preclude investment arbitration pursuant to intra-EU BITs, i.e. BITs in force between two EU member states before EU accession, but where the arbitration claim is filed after EU accession? If not, (2) does TFEU Article 267 (establishing the CJEU's jurisdiction to render preliminary rulings) preclude that application? And if neither of those does, (3) does TFEU Article 18(1) (prohibiting discrimination based on nationality) preclude that application?
The Bundesgerichtshof asked these questions while hearing a case initially filed before the courts of Frankfurt to vacate a 2012 UNCITRAL award in Achmea, B.V. v. Slovak Republic, which ordered the Slovak Republic to pay to the privately owned, Dutch health provider Achmea B.V. 22.1 million euros in compensatory damages. That dispute arose because between 2007 and 2011, the Slovak Republic restricted distribution of profits from private sickness insurance companies in which the Dutch insurer had invested (para. 8).
The investment arbitration took place pursuant to Article 8 of the BIT between the Netherlands and the Czech and Slovak Federative Republic, adopted in 1991, to which the Slovak Republic succeeded on January 1, 1993 (paras. 3, 6).
The Slovak Republic argued that the arbitral tribunal should reject jurisdiction because the country's accession to the EU on May 1, 2004 voided the consent...