Reed Smith Client Alerts

On March 6, 2018, the Court of Justice of the European Union (CJEU) published its preliminary ruling in Slovak Republic v. Achmea BV (the Achmea Ruling), which held that the application of the investor-state dispute settlement provisions under article 8 of the Netherlands-Slovakia bilateral investment treaty (BIT) was incompatible with EU law.

This alert is the fourth in our series of updates on the Achmea Ruling. Our previous three alerts can be found here:

EU member states agree to terminate intra-EU BITs

On January 17, 2019 the European Commission website published declarations from all 28 EU member states in which each committed to terminating its intra-EU BITs in order to comply with the Achmea Ruling.

The days preceding this saw three separate declarations from member states on the legal consequences arising out of the Achmea Ruling (together, the January Declarations).

The first declaration, signed by 22 member states (the 22 Member State Declaration), confirmed the signatories’ position in respect of the Achmea Ruling, including as follows:

(a) All investor-state arbitration clauses contained in BITs concluded between members states are contrary to EU law and thus inapplicable and without effect. This extends to the sunset provisions included within intra-EU BITs.

(b) An arbitral tribunal established on the basis of investor-state arbitration clauses lacks jurisdiction due to a lack of a valid offer to arbitrate by the member state party to the underlying BIT.

(c) Investor-state arbitration clauses between members states under the Energy Charter Treaty (ECT) are also invalid.