Originally from Investment Treaty Arbitration and International Law - Volume 13

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I. INTRODUCTION 

The Court of Justice of the European Union (CJEU) ruled in the landmark case Slovak Republic v. Achmea  on March 6, 2018, that the investor-state dispute resolution clause contained in Article 8 of the Netherlands-Slovakia bilateral investment treaty (BIT), and by extension in any intra-EU BIT, was incompatible with the law of the European Union (EU law).  The decision, in relevant part, reads that “Articles 267 and 344 of the Treaty on the Functioning of the European Union (TFEU) must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the [Netherlands-Slovakia] BIT, 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 decision, however, did not address whether dispute resolution mechanisms found in multilateral investment treaties, such as the Energy Charter Treaty (ECT), would meet the same fate.  To the extent that a dispute resolution mechanism under the ECT is isolated from the EU judicial system (meaning that tribunals cannot refer preliminary questions on the validity and interpretation of EU law to the CJEU), and the review of ECT awards by national courts is limited, the same line of reasoning would seem to apply to an intra-EU ECT investment arbitration.