The Uneasy Relationship between Intra-Eu Investment Tribunals and the Court of Justice's Achmea Judgment

Abstract

This paper focuses on the ways in which investment tribunals constituted under intra-EU BITs and the Energy Charter Treaty (in an intra-EU dispute) have reacted to the Court of Justice’s Achmea judgment of 6 March 2018. The first part of the paper maps out the existing intra-EU arbitrations in which the issues arising from Achmea appear in one form or another. We then take a critical look at how the disputing parties have used Achmea in their argumentation and how the investment tribunals have dismissed these arguments and upheld their jurisdiction. The second part of the paper is analytical. When the tribunals uphold their jurisdiction and decide on the merits, they knowingly deliver an award, which is unenforceable in the Respondent State and the entirety of the EU. By drawing parallels with decisions rendered by other international tribunals, we argue that the rendering of potentially unenforceable awards is not specific to intra-EU investment disputes. We then look at why international tribunals render potentially unenforceable awards. The third part of the paper presents several suggestions of how intra-EU investment tribunals should tackle the Achmea conundrum, either by declining their jurisdiction pursuant to judicial comity or upholding their jurisdiction but dismissing the cases as inadmissible.

Keywords: foreign direct investment, Achmea, European Court of Justice, intra-EU investment treaty arbitration, enforcement of arbitral awards, admissibility, compliance, judicial comity

JEL Classification: K33