Provisional Application of the Energy Charter Treaty(ECT) and Consent to Investment Treaty Arbitration: The Hague Court's Set-Aside Judgment of the Yukos Arbitral Award

Abstract By rendering its preliminary ruling in Achmea v Slovakia, the European Court of Justice (ECJ) declared intra-EU investment treaty arbitration to be incompatible with fundamental principles of the European legal order. This decision does not only illustrate the challenge of regime interaction in international economic law but is also of highest practical relevance. Diverse and critical reactions from arbitral practice and legal scholarship suggest that it will ultimately be up to the courts within and outside of the EU to clarify how the ECJ’s findings in Achmea relate to the legal fate of arbitral awards. Against this background, the aim of the present contribution is to shed light on the judgment’s legal consequences on the post-award phase. As a starting point, an analysis of the judgment finds that the ECJ’s reasoning in Achmea is applicable to investor–State dispute resolution (ISDS) clauses contained in all intra-EU investment treaties, including the Energy Charter Treaty (ECT) when applied in an intra-EU context (Section 2). Based on these findings, we evaluate how the incompatibility of intra-EU investment treaty arbitration with the law of the European Union (EU law) affects setting aside proceedings (Section 3) and applications for recognition and enforcement of awards (Section 4) within and outside of the EU. We show that possible solutions may range from fully enforcing intra-EU investment awards to completely disregarding any legal effect. Evaluating the complex legal landscape applicable to both types of proceedings clearly illustrates that there is no simple ‘yes-or-no’ rule. Instead, factors such as the applicability of the ICSID Convention, the seat of the arbitral tribunal or the jurisdiction in which enforcement is sought are relevant but should not be considered in isolation. Instead, it is concluded that these factors must be considered as inter-related aspects of an analytical framework which may lead to a coherent understanding of the relationship between the European legal order and the settlement of intra-EU investment disputes (Section 5).

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From Lena Goldfields to Crystallex: A Proposal For Collective Financing Of Sovereign Award Debt

Arbitration International ◽

10.1093/arbint/aiab022 ◽

2021 ◽

Vol 37 (2) ◽

pp. 549-576

Author(s):

Ruth Teitelbaum

Keyword(s):

Foreign Investors ◽

Arbitral Award ◽

Investment Treaty ◽

The Future ◽

Investment Treaty Arbitration

Abstract The Lena Goldfields payment story must be recognized for upholding a critical principle: the notion that an arbitral award debt is a collective problem between sovereigns. The stories of payment in Lena Goldfields and Crystallex lead to the following inquiry: why should today’s system of investment treaty arbitration, based upon treaties providing for reciprocal obligations between sovereigns, treat the payment of arbitral awards as a one-sided obligation of only one sovereign, to be borne alone? If sovereigns are able to enter into treaties providing for mutual protections and benefits, including the mutual consent to arbitrate future investment disputes with foreign investors, why should they not also be able to collectively insure the future payment of awards owed to foreign investors in the future?

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The Incompatibility of Intra-EU Investment Treaty Arbitration With European Union Law – Assessing the Scope of the ECJ's Achmea Judgment

Volume 61 · 2018 - German Yearbook of International Law ◽

10.3790/gyil.62.1.475 ◽

2021 ◽

Vol 62 (1) ◽

pp. 475-504

Author(s):

Julian Scheu ◽

Petyo Nikolov

Keyword(s):

Dispute Settlement ◽

Legal Reasoning ◽

Eu Law ◽

European Union Law ◽

Present Contribution ◽

Investment Treaty ◽

European Court ◽

Energy Charter Treaty ◽

The One ◽

Investment Treaty Arbitration

Abstract: In March 2018, the European Court of Justice rendered its Achmea judgment, by which the Court considered the investor-State dispute settlement (ISDS) clause contained in the Dutch-Slovakian investment treaty to be incompatible with EU law. Even though the judgment is considered to be a landmark decision, its potentially far-reaching consequences remain, due to a rather obscure legal reasoning, difficult to assess. The aim of the present contribution is to assess the scope of the Achmea judgment in order to shed light on its relevance for pending and future intra-EU investment arbitrations. In view of the ECJ's Opinion 1/17 rendered in April 2019 and in consideration of recent arbitral practice it is concluded that the scope of the Achmea judgment concerns the incompatibility of intra-EU investment treaty arbitration with EU law. This means on the one hand that the reasoning in Achmea is transferrable not only to ISDS clauses in other intra-EU BITs, but also to Article 26 of the Energy Charter Treaty. On the other hand, the analysis shows that contract-based investment arbitrations are not concerned by the ECJ's findings. Finally, and in view of its clarified scope of application, the relevant factors for analysing the consequences of the Achmea judgement are identified.

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