Slovak Republic v Achmea BV
An arbitration clause in an investment treaty between two Member States is incompatible with EU law, because it removes disputes involving EU law from the EU judicial system.
Facts
A bilateral investment treaty between the Netherlands and Slovakia allowed investors from one state to bring claims against the other before an arbitral tribunal. Achmea, a Dutch insurance company, brought a claim against Slovakia after Slovakia reversed the liberalisation of its health insurance market, and the tribunal awarded Achmea about €22 million in damages. Slovakia applied to the German courts to set aside the award, arguing that the arbitration clause was incompatible with EU law.
Legal principle
The Court of Justice held that the arbitration clause was incompatible with articles 267 and 344 of the Treaty on the Functioning of the European Union. It said that the autonomy of EU law, and the system of preliminary references that ensures its uniform interpretation, would be undermined if disputes that might involve the interpretation or application of EU law could be decided by an arbitral tribunal outside the EU judicial system, which could not refer questions to the Court of Justice. The principle of mutual trust between Member States did not allow them to remove such disputes from their courts.
Related cases on Supremacy and the EU legal order
- Amministrazione delle Finanze dello Stato v Simmenthal SpA Case 106/77, [1978] ECR 629
- Brunner v European Union Treaty [1994] 1 CMLR 57
- Commission v Luxembourg and Belgium (Dairy products) Joined Cases 90/63 and 91/63, [1964] ECR 625
- Commission v Poland (Independence of the Supreme Court) Case C-619/18, EU:C:2019:531
- Costa v ENEL Case 6/64, [1964] ECR 585
- Internationale Handelsgesellschaft mbH v Einfuhr und Vorratsstelle für Getreide und Futtermittel Case 11/70, [1970] ECR 1125
- Melloni v Ministerio Fiscal Case C-399/11, EU:C:2013:107
- R (HS2 Action Alliance Ltd) v Secretary of State for Transport [2014] UKSC 3, [2014] 1 WLR 324
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