The CJEU’s Advocate General released conclusions stating that the former Czechoslovakia – Netherlands BIT is compatible with the EU legal system

September 2017

Following Slovakia’s opening of its health insurance market to private investors in 2004, the Dutch firm Achmea established a local subsidiary in this country. After a partial limitation of said liberalization in 2006, Achmea launched an UNCITRAL / PCA arbitration against Slovakia on the basis of the applicable BIT in 2008, leading to a favorable award of approximately EUR 22.1 million in 2012.
As the German courts were seized by Slovakia to have said award annulled, the German Federal Court of Justice requested a preliminary ruling from the CJEU. The question submitted to the CJEU was the following: does article 344 of the Treaty on the functioning of the European Union (TFEU) preclude the application of a provision in an 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 BIT was concluded before one of the Contracting States acceded to the EU but the arbitral proceedings are not to be brought until after that date?
The CJEU has yet to rule on said question, but Advocate General Wathelet, in its non-binding opinion dated 19 September 2017, invited the court to answer no to the question. According to him, said intra-EU arbitration does not constitute discrimination on grounds of nationality, is compatible with the preliminary ruling mechanism and does not undermine either the allocation of powers fixed by the Treaties or the autonomy of the EU legal system.
Although this has yet to be finally confirmed by the CJEU in a proper and binding ruling, it seems that the position according to which the new EU competence as regards international investment regulations does not per se rule out the already existing intra-EU BITs and the corresponding guarantees and dispute resolution mechanisms is gaining momentum.