Enforcement of Arbitral Awards and EU Law: Further Down the Rabbit Hole? - European International Arbitration Review (EIAR) - Volume 4 - Issue 1
Author(s):
Gillian Cahill
Page Count:
42 pages
Media Description:
1 PDF Download
Published:
September, 2015
Jurisdictions:
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Description:
Originally from European International Arbitration Review
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I. Introduction
Lewis Carroll wrote in Alice in Wonderland that “if everybody minded their own business, the world would go around a great deal faster than it does”. For many involved in international arbitration, this might appear to be good advice for the Court of Justice of the European Union (hereafter the “CJEU” or “the Court”) when it comes to consider issues that have recently arisen as regards the enforcement of arbitral awards and EU law In order to guarantee that the European Union (hereafter the “EU”) remains an attractive place in which to conduct international arbitrations, efficient and effective enforcement of arbitral awards is paramount. Member State national court intervention should therefore be limited as much as possible within the obvious confines of national and international law. However, two recent decisions, one by the CJEU and the other by the Commission, have raised new issues for the enforcement of arbitral awards within the EU.
The Micula case, currently pending before the General Court of the CJEU (hereafter the “General Court”), concerns the attempted enforcement of an ICSID award in Romania. The award was rendered consequent upon protracted arbitral proceedings commenced under an intra-EU BIT and found in favour of the Claimants, the Miculas. In light of the fact that investor state awards are, in the vast majority of cases, self-executing, EU law issues, at Member state national court level, ordinarily have little or no impact on the enforcement of such awards. However, the Micula case shows that this assumption may no longer be considered valid. In Micula, enforcement of the Award was effectively blocked by the European Commission (hereafter the “Commission”) on grounds that payment by Romania of the compensation awarded to the Miculas would amount to a breach of the EU state aid rules. The suspension injunction issued by the Commission which prevented Romania complying with the award is now the subject of annulment proceedings before the General Court. Regardless of the outcome of that action, the mere fact that a successful party to an investment arbitration is forced to take such steps significantly undermines the self-executing nature of investment awards arising out of intra-EU BITs within the EU. It will be seen that whilst this issue might appear, at first sight, to have arisen for the first time in the Micula case, the battle between EU law and intra-EU BITs has been a long time brewing. The Micula award appears to have been the unfortunate award caught in the cross-fire of the Commission’s most proactive steps to date as regards its intra-EU BIT arbitrations. The question then arises as to how much of an impact this cross fire will have on the enforcement regime for such awards in general and how will the CJUE deal with these issues when it has the opportunity?
It will be seen that the treatment of the enforcement of investment arbitration awards under EU law is in sharp contrast to the CJEU’s treatment of the enforcement of New York Convention (hereafter “the New York Convention”) awards in the EU, as highlighted by the recent decision in Gazprom. In that case, the CJEU had been asked, in a preliminary reference procedure, to rule on whether or not it would be contrary to the Brussels I Regulation (Regulation n° 44/2001, (hereafter “Brussels I”) to enforce an arbitral award under the New York Convention, which contained an order of an arbitral tribunal to discontinue and not to bring certain claims before national courts of an EU Member State, namely Lithuania.