Investor-state arbitration clauses in investment treaties between EU Member States are incompatible with EU law, the European Court of Justice has ruled in a landmark judgment.
The decision, in Achmea v Slovak Republic (Case C-284/16), means international organisations must use tribunals in the relevant local country for arbitration rather than choosing one in a preferred location. The case arose from arbitral proceedings that were held in Frankfurt but concerned the 2004 liberalisation of the Slovak health insurance market.
Hogan Lovells partner Markus Burgstaller, who acted for the Slovak Republic, said: ‘As many arbitrations under such treaties are currently pending, the Court's judgment is likely to have far-reaching consequences. Arbitral tribunals will have to analyse very carefully the impact of this landmark decision on cases before them.’
