The Meaning and Scope of the Commercial Arbitration Exception in Achmea

Abstract

Since the delivery of the Achmea ruling by the Court of Justice of the European Union (the CJEU) six years ago, a revolution has occurred in the European Union (EU) with respect to international investment law. All intra-EU bilateral investment protection treaties have been terminated because their Investor-State Dispute Settlement (ISDS) clauses were deemed incompatible with EU law. The CJEU extended the Achmea ruling to intra-EU investor-State arbitration pursuant to Article 26 ECT. It also found ad hoc arbitration agreements concluded between States and investors in respect of disputes under intra-EU bilateral investment treaties (BITs) to violate EU primary law. At the same time, the CJEU approved investor-State arbitration clauses in extra-EU investment protection agreements as being compatible with EU primary law but only subject to very stringent conditions.