Partner Emmanuel Gaillard (Paris-International Arbitration) authored an article titled “L’affaire Achmea ou les conflits de logiques (CJUE 6 mars 2018, aff. C-284/16),” that was published in the Revue critique de droit international privé in September 2018 (article in French).
The principle of mutual trust between EU member states versus the need for a neutral judge: the head-on collision between the law of the EU and the law of international investment arbitration was the issue at stake in the case of Slovak Republic v. Achmea BV. The Court of Justice of the European Union’s much-anticipated preliminary ruling of March 6, 2018 – which found the arbitration provision in a bilateral investment treaty between two EU member States to adversely affect the autonomy of, and thus to be incompatible with, EU law – sent shockwaves through the international investment arbitration community. Indeed the ruling, which invalidated the arbitration provision in some 200 intra-EU investment treaties in effect at the time, generated far more questions than it answered.
This article analyzes the origins, logic and potential reach of the Court’s ruling in Achmea. It first identifies the factors that set the legal regimes of the EU and of international investment arbitration on their collision course and, perhaps, tilted the scales in the latter regime’s disfavor. It then analyzes the reasoning followed by the Court, which suggests that the Court’s decision was the product of an outcome-oriented approach. Finally, the article examines the repercussions – in areas ranging from the Energy Charter Treaty to the field of international commercial arbitration – that may be expected as the dust from the Achmea ruling continues to settle.