On 19 September 2017, Advocate General of the of the Court of Justice of the European Union (CJEU) delivered his opinion in response for a preliminary ruling from the German Federal Court of Justice (BGH).
In an advisory opinion to the CJEU, Advocate General Wathelet found that
arbitration clause under intra-EU bilateral investment treaty (BIT) is compatible with EU law, clause does not constitute discrimination on grounds of nationality, does not undermine the autonomy of the EU legal system and is compatible with the preliminary ruling mechanism according to Article 344 of the Treaty on the Functioning of the EU (TFEU).
However, it is worth noting that the Advocate General’s Opinion is not binding on the Court of Justice.
The proceedings follow on from a dispute between the Dutch investor Achmea B.V. and the Slovak Republic under the 1991 Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic (BIT). That agreement provides that disputes between one contracting state and an investor of the other contracting state are to be settled before an arbitral tribunal. In 2004 Achmea established a subsidiary in Slovakia in order to offer private sickness insurance. However, in 2006, Slovakia partly revoked the liberalisation of the sickness insurance market. In 2008, Achmea initiated an arbitral procedure against Slovakia on the basis of the BIT. In 2012, the arbitral tribunal found that Slovakia had indeed infringed the BIT and ordered it to pay Achmea damages of approximately €22.1 million. Subsequently, Slovakia brought an action before the German court contending that the arbitration clause in the BIT was contrary EU law. In 2016, the BGH referred three questions to the CJEU, on the compatibility of investor-state arbitration with EU law, specifically in relation to Articles 18, 267 and 344 TFEU.
Wathelet’s opinion undermines position of the European Commission expressed via amicus curiae in numerous arbitration proceedings. Furthermore, alleged incompatibility is claimed by the European Commission in the infringement proceedings against Austria, the Netherlands, Romania, Slovakia and Sweden requesting them to terminate their intra-EU BITs, initiated in 2015.
The gLAWcal Team