EU Member States Issue Declarations to Terminate Intra-EU Bilateral Investment Treaties
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- On 15 and 16 January 2019, the 28 Member States of the European Union issued declarations undertaking to terminate bilateral investment treaties concluded between them (so-called “intra-EU BITs”) by 6 December this year. The Member States issued these declarations in response to the March 2018 judgment of the Court of Justice of the European Union in Slowakische Republik v Achmea BV, Case C-284/16 .
- Three separate declarations were issued. The declarations were in agreement on all major points but for one: 22 Member States indicated that the reasoning of the Achmea Judgment also applied to investor-State arbitration under the Energy Charter Treaty (“ECT”), while 6 Member States noted that it was “inappropriate” for Member States to draw this conclusion when the Achmea Judgment is silent on this question. 5 of those 6 Member States also noted that this issue is currently contested before a Member State national court (the Svea Court of Appeal in Sweden).
- The declarations have intensified the uncertainty for all investors that are considering or are pursuing proceedings under intra-EU BITs or the ECT, as well as investors with awards subject to set aside or enforcement proceedings. The Achmea Judgment had already created an uncertain climate for many investors, and the declarations heighten the lack of clarity in the legal infrastructure for investors relying upon intra-EU BITs or the ECT.