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Court of Justice of the European Union delivers judgment in Achmea: investor-State dispute settlement clauses in intra-EU BITs are contrary to EU law

  • 13/03/2018
  • News

On 6 March 2018, the Court of Justice of the European Union (ECJ) delivered its long-awaited judgment in Case C-284/16 Achmea on whether an arbitration clause in a bilateral investment treaty concluded between two EU Member States (intra-EU BIT) is compatible with European Union (EU) law and, in particular, the autonomy of the EU legal order. Unlike the Opinion of Advocate General Wathelet delivered on 19 September 2017, the ECJ’s response to that question was negative.

Achmea specifically concerned a clause providing for investor-State arbitration in an intra-EU BIT. The judgment did not deal with the question of whether similar forms of dispute settlement in international agreements between the European Union or a Member State, on the one hand, and one or more third countries, on the other hand, are also incompatible with EU law. That question is currently pending as a result of Belgium’s request for an Opinion of the ECJ (Opinion 2/17) on the compatibility with the EU Treaties, including fundamental rights, of the chapter on investor-State dispute settlement (Chapter 8) in the Comprehensive Economic and Trade Agreement between Canada, of the one part, and the European Union and its Member States, of the other part (CETA).

The judgment in Achmea nonetheless offers clarity on the test that will be applied by the ECJ in Opinion 2/17 in scrutinising whether the relevant CETA chapter is compatible with the principle of the autonomy of the EU legal order.

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