The European Idea for a Reform of the Investor-State Dispute Settlement System in The Light of Opinion of Advocate General Wathelet in Achmea, C-284/16


Ekaterina Dimitrusheva[1], Ivaylo Dimitrov[2]



On 19 September 2017 the Advocate General (AG) to the Court of Justice to the European Union (CJEU) Melchior Wathelet delivered his long-awaited Opinion in Case C-284/16 Slowakische Republik v Achmea BV. The Bundesgerichtshof (“German Federal Court of Justice”) requested a preliminary ruling from the CJEU on the compatibility of certain provisions of the 1991 bilateral investment treaty between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic (“BIT”) with EU law. The case before the German Federal Court of Justice arose out of the efforts of Slovak Republic to set aside the Frankfurt-seated UNCITRAL Award in Achmea B.V. v. The Slovak Republic, UNCITRAL, PCA Case No. 2008-13 (formerly Eureko B.V. v. The Slovak Republic). In his shockingly firm Opinion, the AG concluded that the BIT, and specifically its dispute resolution mechanism, are not incompatible with the EU law and do not run afoul of Articles 344, 267, and 18 Treaty of Functioning of the European Union (“TFEU”). The present article offers a critical commentary of the Opinion of the AG arguing that, in spite of fact that the Opinion certainly possesses considerable strengths, the position held by the AG has some deficiencies and inconsistencies which, if adopted by the CJEU, will be dangerous to a subject-matter of imminent importance.

The article is structured as follows. The first part is introductory and briefly describes the factual background of the case, the Opinion, as well as the bigger picture of the intra-EU BITs saga. The second part offers much more details regarding the issues of intra-EU BITs and their inconformity with the EU law according to EU Commission. The next two parts of the article offer a mirror commentary of the substantive parts of the Opinion in turn, namely the consistency of the BIT in question with Article 18 of the TFEU (Part 3), and Article 267 and 344 TFEU (Part 4).

Firstly, the AG supported his conclusion that the dispute resolution provision of the BIT (Art. 8) is sound with the prohibition on the discrimination on the grounds of nationality under Art. 18(1) TFEU by way of comparison with bilateral double taxation treaties (DTT). According to the CJEU case law (C-376/03), the latter are not discriminatory whereas the benefits which they grant are “an integral part thereof and contribute to the overall balance”. The authors argue that such analogy is not entirely convincing due to the unique characteristics of the DTT, the differences in the subject-matter of regulation of BITs, on the one hand, and DTT, on the other hand. Different result is reached, moreover, upon an interpretation of the norms pertaining to DTTs and the rules enshrined in BITs in their context.

Secondly, with regard the issue of conformity of Art. 8 of the Netherlands-Czechoslovak BIT with Art. 267 TFEU, the GA concluded that there is no inconformity since, according to his belief, arbitral tribunals can qualify as a court or tribunal common to the Member States parties to the BIT and, accordingly, can request a preliminary reference from the Court. Therefore, the tribunals participate in the dialogue between courts envisioned in Art. 267 TFEU. The authors assert that this approach is legally incoherent and also might be induced by a delicately hidden political goals. The legal incoherency stems from the fact that the powers conferred to the arbitral tribunals is exclusively derived from the treaty regime established by the parties to the relevant BIT. Such tribunal constitutes an international and independent tribunal established to apply and interpret international legal obligations and resolve disputes which are international in nature. One cannot easily place investment arbitral tribunal under the chapeau of Art. 267 TFEU so as to oblige them to the compulsory jurisdiction of CJEU which would be the practical effect if the Court adopts the GA view expressed in the Opinion. This practical effect alludes to the possible political goals that the GA might had in mind in presenting his carefully crafted position, namely superiority of the EU law and institutions over the investment disputes between Member States and European investors – a goal which comes dramatically close towards achieving the Commission’s dream.

Apart from the foregoing, the AG Opinion demonstrates some inherent inconsistencies. Giving a negative answer to the second question, the AG determined that the arbitral tribunals participate in the dialogue between courts and, where necessary, are required to request preliminary ruling which is presupposed by a dispute concerning the interpretation or application of the EU Treaties. However, in his analysis of the third question, the AG argues that disputes resolved by the arbitral tribunals constituted under the BIT do not concern questions of interpretation or application of EU Treaties and are thus not incompatible with Art. 344 TFEU. The AG puts those arguments in further alternative by clarifying that “if the Court decides, as I propose, that the arbitral tribunals constituted in accordance with Article 8 of the BIT are courts or tribunals of the Member States within the meaning of Article 267 TFEU, …[the] recourse to international arbitration in the conditions prescribed in Article 8 of the Netherlands- Czechoslovakia BIT cannot undermine either Article 344 TFEU.” Nevertheless, whether an Investor-State dispute concerns interpretation or application of EU law is a matter of fact and its answer cannot be automatically changed dependent on the alternatives the AG construes.



За достъп до пълната версия на статията, следвайте този линк: Европейската идея за реформа на системата за разрешаване на инвестиционни спорове в светлината на становището на Генералния адвокат M. Wathelet по дело c-284/16 Slowakische Republik v Achmea Bv



[1] Legal Advisor at Todorov & Partners Law Firm, LL.M. College of Europe, Bruges. The opinions expressed in this article belong entirely to the authors in their personal capacity and do not in any way bind the professional and educational institutions of which the authors are part.

[2] Regular PhD student at the University of National and World Economy, LL.M. (with Highest Honors) George Washington University, Research Assistant at the London Court of International Arbitration. The opinions expressed in this article belong entirely to the authors in their personal capacity and do not in any way bind the professional and educational institutions of which the authors are part.