Ercüment Erdem Att. Tilbe Birengel

Impact of the Achmea Judgment on Investment Arbitration

October 2018


The Court of Justice of the European Union (“CJEU”) rendered a highly disputed judgment in the Achmea case on March 6, 2018[1]. The decision ruling on the incompatibility of the arbitration clause in the 1991 the Netherlands-Slovakia bilateral investment treaty[2] (“BIT”) with EU law is likely to create long-lasting discussions in the field of investment arbitration.

The previous phase of the Achmea judgment, the foreseen impact of the judgment in arbitration community and post-Achmea awards including the tribunals’ assessments with regards to this matter in several investment disputes will be dealt below.

The Background of Achmea Judgment

A Dutch insurer, Achmea B.V. (formerly Eureko B.V.), initiated arbitration proceedings before an ad-hoc arbitral tribunal seated in Frankfurt against Slovakia in 2008, by claiming that the reversed liberalizations in the market of health insurance prohibited distribution of profits for the investors in Slovakia, which eventually infringed the BIT.

Upon the award of the tribunal[3], concluding that Slovakia had violated the BIT, the setting aside proceedings began before the German courts, where Slovakia challenged the jurisdiction of the tribunal by alleging the incompatibility of Article 8 of the BIT with articles 18, 267, 344 of the Treaty on the Functioning of the European Union (“TFEU”). While the Higher Regional Court of Frankfurt rejected the incompatibly claim[4], the German Federal Court of Justice referred some questions to the CJEU for a preliminary ruling[5], who issued the highly criticized Achmea judgment[6].

The Achmea Judgment of the CJEU

Through this judgment, the CJEU underlined the primacy of EU law, which must be applied uniformly by the member states and the tribunal. It ruled that the BIT is contrary to the TFEU provisions since it is incompatible with the preliminary ruling procedure, CJEU’s exclusivity in interpretation and application of EU treaties and anti-discrimination. Hence, it concluded that articles 267 and 344 TFEU must be interpreted as precluding provisions of the BIT clauses giving the arbitral tribunals the jurisdiction to solve the intra-EU BIT disputes.

The Impact of the Achmea Judgment

The judgment was surprising with its contrast to the recommendation of the Advocate General of the CJEU[7] and has been criticized by being result-oriented given under the political influence of the European Commission, encouraging the member states to terminate the intra-EU BITs[8].

Although the CJEU judgment has caused a long-lasting debate in the arbitration community, its’ impact is likely to be limited since it applies to neither the commercial[9] nor the disputes governed by International Centre for Settlement of the Investment Disputes (“ICSID”) rules.

Post-Achmea Awards

While scholars and practitioners continue assessing the possible outcomes of the Achmea judgment, the number of arbitral awards declining its applicability has been rising. In Vattenfall AB and others v. Federal Republic of Germany, governed by the Energy Charter Treaty (“ECT”), the tribunal rejected the jurisdiction objection based upon the Achmea judgment. The tribunal reasoned in its “Decision on the Achmea Issue”[10] dated 31 August 2018 that the Achmea judgment covers intra-EU BITs; whereas, ECT is a multilateral investment treaty to which the EU is a member. Most notably, the Tribunal emphasized that EU law has no superiority over international law. It also emphasized that the Achmea judgment endangers the uniform interpretation of the ECT and as per Article 16 precluding conflicts of the treaties, more favourable rights granted under the ECT to investors cannot be undermined[11].

In another arbitration governed by ICSID rules, UP (formerly Le Chèque Déjeuner) and C.D Holding Internationale v. Hungary, the tribunal has recently ruled that the Achmea judgment does not apply to the dispute stemming from the intra-EU BIT[12]. The tribunal concluded that its jurisdiction arose from the ICSID treaty which has public international law context, therefore departs from the national context. Similarly, in another arbitration governed by ICSID rules, filed against Spain by Masdar Solar & Wind Cooperatief[13], the tribunal explicitly underlined the non-applicability of the Achmea judgment to multilateral treaties such as ECT and ICSID[14].

The Achmea judgment is likely to influence the parties who seek ways to avoid the arbitral award ruled against them.


The CJEU has caused the very earth to be shaken in the arbitration community with the highly disputed Achmea judgment, where it ruled that the arbitration clause in the 1991 Netherlands-Slovakia BIT has had an adverse effect on the primacy of EU law and is incompatible. The judgment has been criticized for being rendered under the political influence of the European Commission; whereas, it is likely to influence many while claiming intra-EU jurisdictional objection during the course of the forthcoming proceedings. Meanwhile, the number of arbitral tribunals rejecting the applicability of the Achmea reasoning in arbitrations that are governed by multilateral investment treaties, such as ICSID and ECT, are on the upswing.

[1] The Judgment of the Grand Chamber of the CJEU: Slovak Republic v. Achmea B.V., Case C-284/16,

[2] The Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic, signed on 29 April 1991, entered into force on 1 October 1992,

[3] The award of the arbitral tribunal: Achmea B.V. v. the Slovak Republic, UNCITRAL, PCA Case No. 2008-13 (formerly Eureko B.V. v. the Slovak Republic),

[4] The decision of the High Regional Court of Frankfurt: Oberlandesgericht Frankfurt am Main Beschl. v. 18.12.2014, Az.: 26 Sch 3/13, for access:

[5] The Federal Supreme Court Decision on the referral of some questions to the CJEU for preliminary ruling, Bundesgerichtshof, I ZB 2/15, 3 March 2016,,  the English translation of the decision:

[6] For comments on the judgment: Clément Fouchard /Marc Krestin, “The Judgment of the CJEU in Slovak Republic v. Achmea – A Loud Clap of Thunder on the Intra-EU BIT Sky!”; Joerg Risse / Max Oehm, “European Court of Justice Stops Investment Arbitration in Intra-EU Disputes”,

[7] The opinion of the Advocate General of the CJEU,

[8] Philippe Pinsolle /Isabelle Michou, “Arbitration: The Achmea v Slovakia Judgment of the CJEU, is it really the end of Intra-EU Investment Treaties?”

[9] Under §§54-55 of its judgment, the CJEU explicitly differentiates the commercial arbitration proceedings from disputes arising out of the intra-EU BITs.

[10] Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12, the Decision on the Achmea issue:

[11] Joerg Risse / Nicolas Gremminger, “Vattenfall-Decision Mitigates Achmea-Effect,

[12] UP (formerly Le Chèque Déjeuner) and C.D Holding Internationale v. Hungary, ICSID Case No. ARB/13/35, For further details on the dispute:

[13] Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain, ICSID Case No. ARB/14/1,

[14] Tom Jones, “Post-Achmea Spanish solar award submitted for enforcement in US,