London, 16 April 2018


The Achmea case dealt with the interpretation of a bilateral investment treaty, concluded in 1991, between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic (the ‘BIT’) together with certain provisions of the Treaty on the Functioning of the European Union (‘TFEU’).1 Achmea B.V., a Dutch insurer, set up a subsidiary in Slovakia through which it offered private sickness insurance services on the Slovak market. In 2006, Slovakia partly reversed the previous liberalisation of its health insurance market and, in 2008, Achmea brought UNCITRAL arbitration proceedings before the Permanent Court of Arbitration against Slovakia under Article 8 of the BIT, authorising investor-state arbitration, on the grounds of violation of substantive treaty standards. On 7 December 2012, the tribunal found, in its final award, that Slovakia had violated the BIT and ordered it to pay approximately EUR 22.1 million of damages to Achmea.

Slovakia brought an action to set aside the arbitral award on jurisdictional grounds before the German courts, i.e. the seat of the proceedings. The case eventually went to the German Federal Court of Justice, which referred certain questions on the compatibility of EU law with the BIT's arbitration clause to the CJEU for a preliminary ruling. The CJEU concluded that the jurisdiction of the arbitral tribunal under Article 8 of the BIT may cover the interpretation of EU law and therefore have an adverse effect on the autonomy of EU law.

The operative part of the judgement reads:

Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.

The CJEU’s decision has unsurprisingly sparked discontent within some quarters, with the decision being lamented as politically motivated and lacking in reasoning. Conversely, others have leapt to the defence of the CJEU and suggested that the principle of the autonomy of EU law should not be surprising.

In order to discuss the implications of the CJEU’s ruling, several leading practitioners accepted to form two opposing teams which would either challenge or defend the Achmea decision. Naturally, these groupings were arbitrary in nature and intended simply to stimulate the debate; they did not necessarily reflect a particular panellist's personal views on the topic. With that in mind, the designated ‘Pro-EU’ team consisted of Matthieu Gregoire (Barrister, 4 New Square Chambers, London) and Veronika Korom (Senior Associate, Bredin Prat, Paris; Assistant Professor at ESSEC Business School), and the designated ‘Pro-BIT’ team consisted of Jeff Sullivan (Partner, Gibson Dunn & Crutcher, London), Ralf Willer (Counsel, Hengeler Mueller, Frankfurt), and Stephanie Hawes (Associate, Allen & Overy, London).

With the stage set for a lively discussion, Florian Quintard (Senior Associate at Pinsent Masons in Paris, co-moderator of the event) and myself posed several questions to the panel, outlined below, together with a brief summary of some of the key points raised during the ensuing debate.

1 - Will the Achmea decision affect EU investment treaty practice as we know it?

Stephanie Hawes began by submitting that the scope of Achmea may be limited, as it only established that EU law precluded a dispute resolution mechanism of the type worded in Article 8 of the BIT, as well as similarly worded provisions in other bilateral investment treaties. By way of context, Article 8 allowed for UNCITRAL arbitration only and made no reference to ICSID proceedings. Stephanie also argued that this judgment was limited to intra-EU BITs and therefore disputes arising out of the Energy Charter Treaty ('ECT') would fall outside the analysis in Achmea. Accordingly, she suggested that for the time being at least it is business as usual.

Veronika Korom disagreed and suggested that the Achmea decision should mean the end of intra-EU investment treaty arbitration, as it is not the specific wording which is crucial, but rather the underlying principle of the decision that matters. She observed that the German courts posed a general question to the CJEU on the compatibility of intra-EU dispute settlement provisions and thus the CJEU approached their analysis in an equally broad fashion. Consequently, the Achmea decision is applicable to all intra-EU disputes.

Ralph Willer supported Stephanie’s submissions and reasoned that EU law cannot automatically invalidate international law and that the Achmea decision consequently creates an uncomfortable clash between two legal orders, as intra-EU investment treaties remain in force under public international law. Ralph suggested that it may be the case that the impact of Achmea is limited to an obligation on Member States to terminate their intra-EU BITs. This obligation would be welcome by the European Commission, who since at least 2015, have called on Member States to terminate their intra-EU BITs.2

Jeff Sullivan questioned the decision’s ratio decidendi, suggesting that the CJEU’s relatively short judgment had inadvertently caused confusion amongst practitioners as to the future impact of the decision. Jeff also questioned how the reasoning in Achmea would differ if applied to a case between an EU Member State and an investor from an external (non-EU) country. He concluded that Achmea would clearly have a significant impact on EU investment treaty practice, but at the moment the extent of that impact remained unclear.

2 - ICSID tribunals have invariably upheld their jurisdiction in intra-EU BIT disputes. Will this change after Achmea?

Matthieu Gregoire observed that Article 42(1) of the ICSID Convention provides that a tribunal should decide a dispute in accordance with such rules of law as may be agreed by the parties. This provides a reference to the relevant investment treaty and many treaties have similar wording to that of the BIT, which include a reference to the laws of the Contracting/Member State. Therefore, by way of reference to the laws of the Member State, Matthieu was not sure how ICSID tribunals would apply the reasoning in Achmea any differently to an UNCITRAL tribunal.

Jeff Sullivan offered a different view, by suggesting that ICSID tribunals have a slightly different mandate to that of UNCITRAL tribunals and suggested that any EU law issues would be borne out more in enforcement, as opposed to jurisdiction. This is because, unlike UNCITRAL arbitration, ICSID proceedings are not seated in any particular jurisdiction, and therefore operate within their own detached framework rather than being ultimately tied to the domestic laws of a particular jurisdiction.

3 - If an investor came to you seeking your advice today, with regard to enforcing its rights under an intra-EU investment treaty, what would you advise them in relation to past, current and future disputes?

Ralph Willer suggested that you would have to advise the client as to the risks of prosecuting any future dispute, particularly in terms of enforcement. Ralph was less concerned with past disputes, as they were more difficult to bring back to life. He suggested that the main impact of Achmea would be an increase in the length of proceedings and costs incurred, as an investor would have to be prepared to endure lengthy jurisdictional challenges and enforcement issues. Together with Stephanie Hawes, Ralph also suggested that it may be prudent to advise clients to structure their investments so that the seat of the dispute fell outside the EU.

Matthieu Gregoire agreed with Ralph in part and suggested that the simple answer was to advise clients not to pursue intra-EU investment treaty arbitration and to seek alternative dispute resolution methods.

Veronika Korom noted that the advice given for future disputes may change, as the EU was currently discussing the possibility of an intra-EU mediation system.

4 - How will Achmea affect the status of the ECT in the EU?

Stephanie suggested that Achmea should have no effect on the status of the ECT within the EU. First, the decision arguably carves out international treaties to which the EU itself is a signatory, because the judgment relates to intra-EU disputes between two Member States. Second, ECT tribunals have previously noted that the EU, by way of signing the ECT, has accepted the possibility of intra-EU arbitrations in this context. Third, Stephanie noted that even where incompatibility between the ECT and EU law had been found, ECT tribunals have reasoned that EU law cannot trump international law. Interestingly, Stephanie also added that Achmea may have resulted in the curious situation where the EU itself may be internationally liable under the ECT as a contracting party.

Veronika and Matthieu disagreed, suggesting that there was no reason why an ECT case should be treated any differently. Matthieu pointed to Belgium’s recent referral to the CJEU for an opinion on the compatibility of dispute settlement provisions within the Comprehensive Economic and Trade Agreement between the EU and Canada. Therefore, it remains possible that even where the EU is a member to a treaty, the dispute resolution mechanism in such a treaty may nevertheless be deemed to be incompatible with EU law by the European Courts.

Concluding note

After an extended and considered debate between experienced practitioners, the ramifications of the Achmea decision remained as open to debate as they were at the outset of the discussion. This clearly demonstrates that further clarification is required from the CJEU to help outline the future landscape for intra-EU investment practice. The event for instance ended on one of the many crucial questions raised by Achmea: How will the remaining protections in intra-EU treaties, presumably still valid, be enforced, if arbitration is no longer an option? In this sense, the Achmea judgment prompts more questions than it provides answers.

Slowakische Republik v. Achmea BV, C-284-16, judgment dated 6 March 2018. A copy of which is available here:

See John I. Blanck, ‘Slovak Republic v. Achmea BV: The Death Knell for Intra-EU BITs?’, available at See European Commission’s press release at