In the judgment in Achmea, (2) the Court ruled that arbitration clauses in favour of investors in investment treaties between Member States are incompatible with Articles 267 and 344 TFEU and must therefore be disapplied. What are the consequences, however, if a Member State does not invoke the invalidity of the arbitration clause before the award is made? A Swedish court concluded from this, in the context of examining the validity of an arbitration award, that the Member State concerned had entered into an arbitration agreement for the dispute in question on an ad hoc basis by entering an appearance in the arbitration proceedings without raising an objection. However, the Högsta domstol (Supreme Court, Sweden) has doubts as to whether this approach is compatible with the abovementioned judgment and has therefore referred the matter to the Court.
'Do Articles 267 and 344 TFEU, as interpreted in [the judgment in] Achmea, (9) mean that – where an investment agreement contains an arbitration clause that is invalid as a result of the fact that the contract was concluded between two Member States – an arbitration agreement is invalid if it has been concluded between a Member State and an investor by virtue of the fact that the Member State, after arbitration proceedings were commenced by the investor, refrains, by the free will of the State, from raising objections as to jurisdiction?'
The judgment in Achmea concerned a general provision that permitted recourse to an arbitration tribunal in certain cases. In contrast, the question to be decided in the present case is whether Articles 267 and 344 TFEU preclude an individual arbitration agreement between a Member State and an investor.
Individual arbitration agreements between Member States and investors from other Member States concerning the sovereign application of EU law are compatible with the duty of sincere cooperation under Article 4(3) TFEU and the autonomy of EU law under Articles 267 and 344 TFEU only if courts of the Member States can comprehensively review the arbitration award for its compatibility with EU law, if necessary after requesting a preliminary ruling under Article 267 TFEU. Such arbitration agreements must furthermore be compatible with the principle of equal treatment under Article 20 of the Charter of Fundamental Rights of the European Union.
Already registered ?