German Constitutional Court’s Interim Decision on the Intra-EU BIT Termination Agreement

The Federal Constitutional Court of Germany has rejected a request for interim relief filed by the Dutch company Achmea in a proceeding brought after the well-known ECJ’s decision on intra-EU arbitration and the subsequent set aside of the award in Achmea v. Slovak Republic .

The company sought an order from the Court directing Germany to halt the ratification process of the Intra-EU BIT Termination Agreement concluded on 5 May 2020 between 23 EU Member States. In a decision of 3 February 2021 (available only in German) the Court stated that the ratification of the Agreement was not linked to the constitutional complaint, that has still to be decided.

The EU and Canada adopt rules putting in place the CETA investment court

The European Commission and Canada have adopted four decisions in relation to the Investment Court Sistem of the EU-Canada Comprehensive Economic and Trade Agreement. The decisions concern: i) The Appellate Tribunal; ii) the Code of Conduct of Arbitrators; iii) the Rules for Mediation; and iv) the Rules for binding interpretation of the Agreement.

While most provisions of the Agreement have become provisionally applicable on 21 September 2017, the investment chapter will be applied only once all the 27 EU Member States will have ratified it.

The EU Council issued a set of decisions with respect to the dispute-settlement mechanism of the Comprehensive Economic and Trade Agreement (CETA)

In a recent set of decisions issued on 25 May 2020 , the EU Council endorsed the draft decisions of the CETA Joint Committee and the treaty’s Committee on Services and Investment.
The draft decisions concerned: i) the appelate tribunal, ii) the procedure to be adopted for joint interpretation, iii) the code of conduct for adjudicators, and iv) the mediation rules.

The European Commission initates infringement proceedings against UK and Finland

On 14 May 2020, the European Commission released the May infringement package urging Finland and the United Kingdom to terminate their Bilateral Investment Treaties with other EU Member States. The European Commission noted that “all Member States committed to terminate their intra-EU BITs in a coordinated manner by means of a plurilateral treaty” and that “the United Kingdom and Finland did not sign the plurilateral treaty alongside other Member States”. Therefore, the Commission invited “the United Kingdom and Finland to take all necessary actions to urgently remove the intra-EU BITs from their legal order, bearing in mind their incompatibility with Union law”.
If the two States fail to give a satisfactory response within four months, the Commission may decide to address reasoned opinions.

ICSID and UNCITRAL Secretariats release draft Code of Conduct for Adjudicators

On 30 April 2020, the two Secretariats released a draft code (“Draft”) jointly developed in the context of the UNCITRAL ISDS reform (UNCITRAL Working Group III).
The Draft tackles different questions of international investment arbitration proceedings, including the issue of changing hats.

The Swedish Supreme Court requests a preliminary ruling from the European Court of Justice in an annulment and indictment against an arbitration intra-EU

On 27 February 2020, the Swedish Supreme Court (Högsta domstolen), in the matter between Republic of Poland v PL Holdings Sàrl, referred to the European Court of Justice for a preliminary ruling on the following question:

Do Articles 267 and 344 TFEU, as interpreted in Achmea, (1) mean that an arbitration agreement is invalid if it has been concluded between a Member State and an investor — where an investment agreement contains an arbitration clause that is invalid as a result of the fact that the contract was concluded between two Member States — [despite the fact that] the Member State, after arbitration proceedings were commenced by the investor, refrains, by the free will of the State, from raising objections as to jurisdiction?