Case C-109/20: an ad hoc arbitration agreement cannot be used to circumvent an invalid arbitration clause in an intra-EU BIT

• 04/11/2021
• Articles

On 26 October 2021, the Court of Justice of the European Union (“CJEU”) decided, in its judgment in Case C-109/20 Republic of Poland v PL Holdings, that where an investor-State arbitration clause in an intra-EU bilateral investment treaty (“BIT”) is invalid under European Union (“EU”) law, investors cannot rely on a tacit ad hoc arbitration agreement with identical content to the arbitration clause. Importantly, the CJEU clarified that EU Member States must contest the jurisdiction of an arbitral tribunal in such a situation and national courts of the Member States must uphold an action to set aside an arbitration award made on the basis of an arbitration agreement that is contrary to EU law.

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