Originally from Dispute Resolution Journal

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Recent Decisions by National Courts

ENGLAND

In a groundbreaking decision dated March 6, 2018, the European Court of Justice (“ECJ”) ruled in Slovak Republic v. Achmea BV (Case C-284/16) that the arbitration clause contained in the 1991 Netherlands-Slovakia bilateral investment treaty (“BIT”) has an adverse effect on the autonomy of EU law and is therefore incompatible with EU law. The German Federal Court of Justice had referred the issue as concerning interpretation of EU treaties to the ECJ for a preliminary ruling. This (surprise) ruling will have a significant effect on investor-state arbitration, and is one more chapter in a saga we have reported on here over the years.

Background

We had previously reported about this case numerous times, as it concerns a dispute at the intersection of EU law and arbitration (see Dispute Resolution Journal, August/October 2012, p. 13, Dispute Resolution Journal, Vol. 68 No. 3, p. 93, Dispute Resolution Journal, Vol. 70 No. 1, p. 116). 

The case started in October 2008, when the Dutch insurance group Achmea (formally Eureko BV) commenced arbitration against Slovakia based on the BIT. Achmea claimed damages for wrongful expropriation by Slovakia’s partial reversal of the liberalization of its health insurance market previously opened to private investors. An arbitral tribunal (composed of Vaughan Lowe QC, Albert Jan van den Berg and VV Veeder QC) was constituted according to the provisions of the BIT and pursuant to the UNCITRAL Arbitration Rules with the seat of arbitration in Frankfurt am Main.