Originally from The American Review of International Arbitration (ARIA)

ABSTRACT

The Court of Justice of the European Union landmark ruling in Achmea has profoundly influenced discussions on investor-State dispute settlement within the EU, extending its impact to the broader realm of international investment law. This article offers a jurisprudential analysis of Achmea’s continuing influence, focusing on its role as a defense in the enforcement of arbitral awards, as evidenced in recent cases in front of national courts of the United Kingdom and the United States. The advent of the “Achmea defense” echoes the “Achmea objections” encountered during arbitration, prompting a reassessment of jurisdictional and consent-related issues.

The contribution underscores a trend of national courts showing increasing deference to domestic legal tenets over international law, with a particular inclination towards accepting the Achmea defense. It posits that should this shift in judicial reasoning gain traction in higher courts, it may lead to domestic legal frameworks superseding international obligations delineated by the ICSID Convention and the New York Convention.

Focusing on the UK and US jurisdictions, the paper reveals complex issues relating to enforcement, execution, and consent, highlighting the imperative for ongoing scrutiny and engagement with the judicial evolution in response to Achmea across various legal systems. The article advocates for a dynamic interaction with post-Achmea judicial narratives and calls upon the legal and scholarly communities to delve into the intricate challenges facing the finality and binding authority of international arbitration.

I.  INTRODUCTION

The immediate repercussions of Achmea on ongoing and future claims have been extensively scrutinized by legal scholars.  Case law has followed to test many of the theoretical arguments. In the ISDS setting, jurisdictional objections based on Achmea (so-called Achmea objections) continue to be, almost universally, rejected.  In contrast, national judges in the EU defer to the CJEU, siding with States who seek stays of arbitrations in front of national courts.

Albeit to a more modest extent, owing to initially a smaller volume of respective claims, the discourse has also encapsulated the implications of Achmea in the enforcement of arbitral awards—both within and outside the EU borders.  Today, a corpus of case law—traversing various jurisdictions—has emerged further explaining how a single ruling is being applied and interpreted in enforcement proceedings in extra-EU contexts. This body of law is rooted solely in EU law concepts (mutual trust, sincere cooperation, and the autonomy of the EU legal order), and indeed, these developments are often more nuanced than initially expected.

To highlight these nuances, this contribution undertakes a jurisprudential examination of the continuing legacy of Achmea. It scrutinizes how this purely EU-centric decision has recently been utilized as a defense against enforcement. The article proposes that similar to an Achmea objection, various national judgments point to the emergence of an Achmea defense rooted in the arguments pertaining to consent and sovereign immunity. Both stand at the gateway of a proceeding, the arbitral proceeding the former, and the national court proceeding in the context of enforcement the latter. Moreover, both go to the core of jurisdiction, the jurisdiction of the arbitral tribunal, the former, and the jurisdiction of the national court in the context of enforcement, the latter. To elucidate this evolution, the article first addresses the normative framework governing the enforcement of arbitral awards (II). Against this backdrop, we explore how EU Member States, invoking Achmea, contest enforcement in front of national courts outside the EU, namely in the United Kingdom and the United States (III). The substantive discussion concludes by underscoring the continuing global relevance of the CJEU’s ruling and its potential impact on the future of ISDS (IV).