|Achmea||Court of Justice of the European Union Case C-284/16, Slowakische Republik v. Achmea B.V., Judgment (6 March 2018), RLM-12|
|Achmea Wathelet Opinion||Case C-284/16 Slowakische Republik v. Achmea BV, Opinion of Advocate General Wathelet, CLM–145|
|Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings 2006|
|Article 11(2)-(3) Meeting Minutes||Minutes of the meeting with the Austrian representatives regarding the interpretation of Article 11 paragraph 2 and 3 of the Agreement on the promotion and protection of investment concluded with Austria, p. 1, 14 February 2018, C-225|
|BIT or Treaty||Agreement between the Republic of Austria and the Republic of Croatia for the Promotion and Protection of Investments, which entered into force on 1 November 1999|
|CETA||Comprehensive Economic and Trade Agreement between Canada and the EU and its Member States|
|CJEU||Court of Justice of the European Union|
|CETA Opinion||CJEU Opinion 1/17, EU:C:2019:341, FJ-41|
|Cl. Mem.||Claimants' Memorial on Croatia's Preliminary Objections to Jurisdiction dated 29 March 2019|
|Cl. PHB1||Claimants' Post Hearing Brief dated 18 October 2019|
|Cl. PHB2||Claimants' Post-Hearing Reply Brief dated 22 November 2019|
|Cl. Rej.||Claimants' Rejoinder on Jurisdiction dated 28 April 2020|
|Cl. Reply||Claimants' Reply Submission on Croatia's Preliminary Objections to Jurisdiction dated 7 June 2019|
|CLM-[#]||Claimants' Legal Authority|
|Declarations||(i) the declaration by 22 Member States of the European Union on the legal consequences of the Judgment of the Court of Justice of the European Union in the Achmea case; (ii) the declaration by five EU Member States on the legal consequences of Achmea ; and (iii) the declaration by Hungary on the legal consequences of Achmea|
|GATS||World Trade Organization General Agreement on Trade in Services|
|Hearing||Hearing on Jurisdiction held from 20 August 2019 through 21 August 2019|
|ICSID Convention||Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965|
|ICSID or the Centre||International Centre for Settlement of Investment Disputes|
|Resp. Mem.||Respondent's Preliminary Objections to Jurisdiction dated 29 March 2019|
|Resp. PHB1||Respondent's Post Hearing Brief dated 18 October 2019|
|Resp. PHB2||Respondent's Reply Post-Hearing Brief dated 22 November 2019|
|Resp. Reply||Respondent's Reply to the Claimants' Submission on its Preliminary Objections to Jurisdiction dated 7 June 2019|
|Resp. Request||Respondent's Preliminary Objections to Jurisdiction and Request to Suspend the Proceedings on the Merits dated 21 December 2018|
|RLM-[#]||Respondent(s)'s Legal Authority|
|TEU||Treaty on European Union|
|TFEU||Treaty on the Functioning of the European Union|
|Tr. Day [#], [page:line]||Transcript of the Hearing|
|Tribunal||Arbitral tribunal constituted on [date]|
|UniCredit 2018 Decision||UniCredit Bank Austria AG and Zagrebačka banka d.d. v. Republic of Croatia, ICSID Case No. ARB/16/31, Decision on the Respondent's Article 9 Objection to Jurisdiction, 12 October 2018, CLM-136|
|UniCredit 2020 Decision||UniCredit Bank Austria AG and Zagrebačka banka d.d. v. Republic of Croatia, ICSID Case No. ARB/16/31, Decision on the Respondent's Application for Reversal of the Article 9 Decision and Decision on Jurisdiction and Admissibility, 24 March 2020, RLM-271|
|VCLT||United Nations, Vienna Convention on the Law of Treaties, 23 May 1969, United Nations Treaty Series, vol. 1155, p. 331|
|WTO||World Trade Organization|
• Consolidated Index of Supporting Documentation filed with Croatia's pleadings as at 21 December 2018;
• Exhibits R-0001 through R-0005; and
• Legal Authorities RLM-0001 through RLM-0032.
• Legal Opinion of Professor Paul Craig (Hon QC), dated 29 March 2019 ("Craig Opinion");
• Index of the Legal Authorities to Professor Paul Craig's Expert Opinion, with Legal Authorities PC-0001 through PC-0060;
• Consolidated Index of Supporting Documentation Filed with Croatia's pleadings (as of 29 March 2019);
• Exhibits R-0032 through R-0038; and
• Legal Authorities RLM-0001 through RLM-0165.
• Legal Opinion of Sir Francis Jacobs KCMG, QC ("Jacobs Opinion"), with Exhibits FJ-0001 through FJ-0033;
• Consolidated Index of Supporting Documentation Filed with Addiko's Pleadings (as at 29 March 2019);
• Exhibits C-0222 through C-0226; and
• Legal Authorities CLM-0145 through CLM-0184.
• Supplemental Legal Opinion by Sir Francis Jacobs KCMG, QC ("Jacobs Supp. Opinion"), with Exhibits FJ-0034 through FJ-0045; and
• Legal Authorities CLM-0185 through CLM-0197.
• Second Expert Opinion of Professor Paul Craig (Hon QC) ("Craig Supp. Opinion"), with an Index of Legal Authorities to Professor Paul Craig's Second Expert Opinion and Legal Authorities PC-0061 through PC-0066;
• Exhibits R-0039 through R-0041; and
• Legal Authorities RLM-0166 through RLM-0176.
Ms. Jean E. Kalicki President
Prof. Guido Santiago Tawil Arbitrator
Mr. Miloš Olík Arbitrator
ICSID Secretariat :
Mr. Alex Kaplan Secretary of the Tribunal
For the Claimants :
Mr. Franz Schwarz WilmerHale
Mr. Gary Born WilmerHale
Mr. Naboth van den Broek WilmerHale
Ms. Danielle Morris WilmerHale
Mr. Daniel Costelloe WilmerHale
Mr. Justine Nguyen WilmerHale
Mr. Jose Romero WilmerHale
Mr. Amy Titus WilmerHale
Mr. Stefan Choi Addiko Bank AG
For the Respondent :
Mr. Robert G. Volterra Volterra Fietta
Mr. Graham Coop Volterra Fietta
Ms. Angela Ha Volterra Fietta
Mr. Govert Coppens Volterra Fietta
Ms. Eva Paloma Treves Volterra Fietta
Court Reporter :
Ms. Dawn K. Larson B&B Reporters
The critical date doctrine … acts as a time constraint in the context of determining the relevance or weight of evidence in cases concerning issues of public international law. In short, the doctrine or principle renders evidence, which comes into being after the critical date and is self-serving and intended by the party putting it forward to improve its position in the arbitration, as being of little, if any weight … This suggests that if post-critical date evidence is sought to be adduced, it should be consistent with and a continuation of what the pre-existing position establishes. Its function is to corroborate and explain. To the extent that it contradicts what has been established by the pre-existing position to give the party seeking to rely on it an evidential advantage in its case, it should not be admitted.145
Applying the reasoning of the Singaporean Court, Addiko argues that since the critical date for determining this Tribunal's jurisdiction is 27 September 2017, the Declarations are not irrelevant to prove a joint understanding between Croatia and Austria as to the alleged incompatibility of the BIT with the EU acquis.146
• Addiko concludes on the basis of this evidence that at no time relevant for this Tribunal's determination of its jurisdiction was there an agreement between Austria and Croatia that the BIT was incompatible with the EU acquis. Accordingly, Addiko says that even if the Declarations arguendo were capable in principle of having significance under VCLT Article 31(3)(a), they are irrelevant to this Tribunal's determination of its jurisdiction under Article 9 of the BIT.149
Does Article 344 TFEU preclude the application of a provision in a bilateral investment protection agreement between Member States of the European Union (a so-called intra-EU BIT) under which an investor of a Contracting State, in the event of a dispute concerning investments in the other Contracting State, may bring proceedings against the latter State before an arbitral tribunal where the investment protection agreement was concluded before one of the Contracting States acceded to the European Union but the arbitral proceedings are not to be brought until after that date?150
Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.151
The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning:
(a) the interpretation of the Treaties;
(b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union;
Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.
Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.
If such a question is raised in a case pending before a court or tribunal of a Member State with regard to a person in custody, the Court of Justice of the European Union shall act with the minimum of delay.
(1) Does Article 344 TFEU preclude the application of a provision in a bilateral investment protection agreement between Member States of the European Union (a so-called intra-EU BIT) under which an investor of a Contracting State, in the event of a dispute concerning investments in the other Contracting State, may bring proceedings against the latter State before an arbitral tribunal where the investment protection agreement was concluded before one of the Contracting States acceded to the European Union but the arbitral proceedings are not to be brought until after that date?
If Question 1 is to be answered in the negative:
(2) Does Article 267 TFEU preclude the application of such a provision?
If Questions 1 and 2 are to be answered in the negative:
(3) Does the first paragraph of Article 18 TFEU preclude the application of such a provision under the circumstances described in Question 1?295
Articles 18, 267 and 344 TFEU must be interpreted as not precluding the application of an investor/State dispute settlement mechanism established by means of a bilateral investment agreement concluded before the accession of one of the Contracting States to the European Union and providing that an investor from one Contracting State may, in the case of a dispute relating to investments in the other Contracting State, bring proceedings against the latter State before an arbitral tribunal.296
By its first and second questions, which should be taken together, the referring court essentially asks whether Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.297
The arbitral tribunal shall decide on the basis of the law, taking into account in particular though not exclusively:
- the law in force of the Contracting Party concerned;
- the provisions of this Agreement, and other relevant agreements between the Contracting Parties;
- the provisions of special agreements relating to the investment;
- the general principles of international law.298
32. In order to answer those questions, it should be recalled that, according to settled case-law of the Court, an international agreement cannot affect the allocation of powers fixed by the Treaties or, consequently, the autonomy of the EU legal system, observance of which is ensured by the Court. That principle is enshrined in particular in Article 344 TFEU, under which the Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for in the Treaties ….
33. Also according to settled case-law of the Court, the autonomy of EU law with respect both to the law of the Member States and to international law is justified by the essential characteristics of the EU and its law, relating in particular to the constitutional structure of the EU and the very nature of that law. EU law is characterised by the fact that it stems from an independent source of law, the Treaties, by its primacy over the laws of the Member States, and by the direct effect of a whole series of provisions which are applicable to their nationals and to the Member States themselves. Those characteristics have given rise to a structured network of principles, rules and mutually interdependent legal relations binding the EU and its Member States reciprocally and binding its Member States to each other ….
34. EU law is thus based on the fundamental premiss [sic] that each Member State shares with all the other Member States, and recognises that they share with it, a set of common values on which the EU is founded, as stated in Article 2 TEU. That premiss [sic] implies and justifies the existence of mutual trust between the Member States that those values will be recognised, and therefore that the law of the EU that implements them will be respected. It is precisely in that context that the Member States are obliged, by reason inter alia of the principle of sincere cooperation set out in the first subparagraph of Article 4(3) TEU, to ensure in their respective territories the application of and respect for EU law, and to take for those purposes any appropriate measure, whether general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the EU ….
35. In order to ensure that the specific characteristics and the autonomy of the EU legal order are preserved, the Treaties have established a judicial system intended to ensure consistency and uniformity in the interpretation of EU law ….
36. In that context, in accordance with Article 19 TEU, it is for the national courts and tribunals and the Court of Justice to ensure the full application of EU law in all Member States and to ensure judicial protection of the rights of individuals under that law ….
37. In particular, the judicial system as thus conceived has as its keystone the preliminary ruling procedure provided for in Article 267 TFEU, which, by setting up a dialogue between one court and another, specifically between the Court of Justice and the courts and tribunals of the Member States, has the object of securing uniform interpretation of EU law, thereby serving to ensure its consistency, its full effect and its autonomy as well as, ultimately, the particular nature of the law established by the Treaties ….
38. The first and second questions referred for a preliminary ruling must be answered in the light of those considerations.299
40. Even if, as Achmea in particular contends, that tribunal, despite the very broad wording of Article 8(1) of the BIT, is called on to rule only on possible infringements of the BIT, the fact remains that in order to do so it must, in accordance with Article 8(6) of the BIT, take account in particular of the law in force of the contracting party concerned and other relevant agreements between the contracting parties.
41. Given the nature and characteristics of EU law mentioned in paragraph 33 above, that law must be regarded both as forming part of the law in force in every Member State and as deriving from an international agreement between the Member States.
42. It follows that on that twofold basis the arbitral tribunal referred to in Article 8 of the BIT may be called on to interpret or indeed to apply EU law, particularly the provisions concerning the fundamental freedoms, including freedom of establishment and free movement of capital.301
While the latter originate in the freely expressed wishes of the parties, the former derive from a treaty by which Member States agree to remove from the jurisdiction of their own courts, and hence from the system of judicial remedies which the second subparagraph of Article 19(1) TEU requires them to establish in the fields covered by EU law …, disputes which may concern the application or interpretation of EU law. In those circumstances, the considerations set out in the preceding paragraph relating to commercial arbitration cannot be applied to arbitration proceedings such as those referred to in Article 8 of the BIT.308
56. Consequently, having regard to all the characteristics of the arbitral tribunal mentioned in Article 8 of the BIT …, it must be considered that, by concluding the BIT, the Member States parties to it established a mechanism for settling disputes between an investor and a Member State which could prevent those disputes from being resolved in a manner that ensures the full effectiveness of EU law, even though they might concern the interpretation or application of that law.
57. It is true that, according to settled case-law of the Court, an international agreement providing for the establishment of a court responsible for the interpretation of its provisions and whose decisions are binding on the institutions, including the Court of Justice, is not in principle incompatible with EU law. The competence of the EU in the field of international relations and its capacity to conclude international agreements necessarily entail the power to submit to the decisions of a court which is created or designated by such agreements as regards the interpretation and application of their provisions, provided that the autonomy of the EU and its legal order is respected ….
58. In the present case, however, apart from the fact that the disputes falling within the jurisdiction of the arbitral tribunal referred to in Article 8 of the BIT may relate to the interpretation both of that agreement and of EU law, the possibility of submitting those disputes to a body which is not part of the judicial system of the EU is provided for by an agreement which was concluded not by the EU but by Member States. Article 8 of the BIT is such as to call into question not only the principle of mutual trust between the Member States but also the preservation of the particular nature of the law established by the Treaties, ensured by the preliminary ruling procedure provided for in Article 267 TFEU, and is not therefore compatible with the principle of sincere cooperation referred to in paragraph 34 above.
59. In those circumstances, Article 8 of the BIT has an adverse effect on the autonomy of EU law.309
60. Consequently, the answer to Questions 1 and 2 is that Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.
62. On those grounds, the Court (Grand Chamber) hereby rules: Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.310
The Achmea Judgment was not predicated on the exclusive competence of the EU to enter into such treaties on its Member States' behalf. Rather, the Tribunal understands the Achmea Judgment more narrowly, as objecting only to treaty provisions that by their terms give tribunals the authority (or indeed the mandate) to decide a dispute among other things by reference to EU law, in either or both of the "twofold" aspects the CJEU identified. Put otherwise, it appears that EU Member States may bring arbitral tribunals into being for the purposes of deciding treaty disputes under general principles of international law, but are no longer allowed to authorize such disputes to apply EU law in addition.324
Those provisions serve no other purpose than to reflect the fact that the CETA Tribunal, when it is called upon to examine the compliance with the CETA of the measure that is challenged by an investor and that has been adopted by the investment host State or by the Union, will inevitably have to undertake, on the basis of the information and arguments presented to it by that investor and by that State or by the Union, an examination of the effect of that measure. That examination may, on occasion, require that the domestic law of the respondent Party be taken into account. However, … that examination cannot be classified as equivalent to an interpretation, by the CETA Tribunal of that domestic law, but consists, on the contrary, of that domestic law being taken into account as a matter of fact ….334
Union law takes precedence over bilateral investment treaties concluded between Member States.1 As a consequence, all investor-State arbitration clauses contained in bilateral investment treaties concluded between Member States are contrary to Union law and thus inapplicable. They do not produce effects including as regards provisions that provide for extended protection of investments made prior to termination for a further period of time (so-called sunset or grandfathering clauses). 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 bilateral investment Treaty.400
The statement that "Union law takes precedence over bilateral investment treaties concluded between Member States" contains a footnote which cites certain CJEU judgments and then asserts, without any analysis or citations, that "[t]he same result follows also under general public international law, in particular from the relevant provisions of the Vienna Convention on the Law of the Treaties and customary international law (lex posterior)."401
1. By the present declaration, Member States inform investment arbitration tribunals about the legal consequences of the Achmea judgment, as set out in this declaration, in all pending intra-EU investment arbitration proceedings brought either under bilateral investment treaties concluded between Member States or under the Energy Charter Treaty.
2. In cooperation with a defending Member State, the Member State, in which an investor that has brought such an action is established, will take the necessary measures to inform the investment arbitration tribunals concerned of those consequences. Similarly, defending Member States will request the courts, including in any third country, which are to decide in proceedings relating to an intra-EU investment arbitration award, to set these awards aside or not to enforce them due to a lack of valid consent.
3. By the present declaration, Member States inform the investor community that no new intra-EU investment arbitration should be initiated.
5. In light of the Achmea judgment, Member States will terminate all bilateral investment treaties concluded between them by means of a plurilateral treaty or, where that is mutually recognised as more expedient, bilaterally.
8. Member States will make best efforts to deposit their instruments of ratification, approval or acceptance of that plurilateral treaty or of any bilateral treaty terminating bilateral investment treaties between Member States no later than 6 December 2019.402
Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.
Article 49 of the TFEU prohibits Member States from imposing any "restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State," and Article 63 of the TFEU prohibits "all restrictions on the movement of capital between Member States and between Member States and third countries."
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