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international litigation blog

EU General Court Annuls Micula State Aid Decision

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On 18 June 2019, the General Court of the European Union (the General Court) handed down its long-awaited judgment in the Micula case.

As we discussed before, this case finds its origins in the investment made by the Miculas, two investors of Swedish nationality, in the food production sector in Romania in the 1990s. At the time of investment they relied on numerous tax incentives regimes that Romania had put in place in order to attract foreign investment.

In 2005, as Romania prepared to accede to the European Union, the tax incentives were revoked in an effort to conform to EU law on State aid.

The Miculas then instituted ICSID proceedings against Romania based on the Romania-Sweden Bilateral Investment Treaty, arguing that the revocation of the tax incentives constituted a breach of their rights under that treaty. The arbitral tribunal issued its award in 2013, holding that by revoking the incentives, Romania had indeed failed to award the claimants fair and equitable treatment. The arbitral tribunal awarded the Miculas EUR 180 million.

In 2015, the European Commission handed down a decision (the 2015 EU decision) declaring that the ICSID award in favour of the Miculas amounted to State aid. The 2015 EU decision required Romania to refrain from paying the amount due under the award. The Commission also ordered Romania to recover any compensation already awarded to the Miculas.

The Miculas sought to challenge this 2015 EU decision before the General Court.READ MORE

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U.S. Courts Cannot Infer Class Arbitration from Ambiguous Arbitration Clause

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The U.S. Supreme Court (the Supreme Court) has been historically wary of permitting class arbitration (see previous blog post), especially in the absence of clearly defined limits or of express language permitting it in an arbitration agreement. The Supreme Court affirmed this restraint in a recent 5–4 decision, Lamps Plus, Inc., v. Varela, in which it held that courts cannot infer parties’ consent to class arbitration from an ambiguous arbitration clause in an employment contract.READ MORE

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CETA ISDS Mechanism Compatible with EU Law: What Implications?

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This article has jointly been co-authored by Isabelle Van Damme and Quentin Declève

On 30 April 2019, the Court of Justice of the European Union (CJEU) decided in Opinion 1/17 that the chapter on investor-State dispute settlement (ISDS) in the Comprehensive Economic and Trade Agreement between Canada, of one part, and the European Union and its Member States, of the other part (CETA) is compatible with EU primary law. On 29 January 2019, Advocate General Bot had already reached the same conclusion (for an analysis, see here).

Opinion 1/17 removes a significant obstacle to the ratification of CETA by the EU Member States and the ratification of investment protection agreements with, for example, Singapore and Vietnam, which contain similar chapters on ISDS. The Opinion also significantly boosts the European Union negotiating position in the ongoing United Nations Commission on International Trade Law (UNCITRAL) negotiations on ISDS reform. At the same time, the Opinion might, to some extent, tie the hands of the European Union in negotiating in that forum.READ MORE

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The Netherlands Amends and Broadens its Legal Framework on Collective Claims

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On 19 March 2019, the Dutch Parliament adopted the act aimed at facilitating the litigation of collective damages claims (the Act).

Under the previous regime (see previous post), Dutch courts could only render a declaratory judgment establishing that the defendant acted unlawfully. As a claim for damages could not be brought in collective actions, claimants had to resort to the Dutch Collective Settlement of Mass Claims Act (WCAM) in order to settle the case with the defendant, after which the Amsterdam Court of Appeal declared that settlement generally binding.

This situation has now changed with the adoption of the Act as it introduces the possibility to claim damages in a collective action before Dutch courts.

In addition, the Act also adds stricter requirements regarding the standing of representative organisations. While individual plaintiffs taking a role in class actions are inadmissible under Dutch law, the Act contains some key provisions regarding the qualification and characteristics of “representative organisations” (i.e., claim vehicles that take a role in the litigation and settlement negotiations with the defendant). The Act also contains specific provisions on the conduct of the proceedings.READ MORE

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SAVE THE DATE: CEPANI40 Event on Investment Arbitration and EU Law

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On 8 May 2019, Van Bael & Bellis (my firm) will host a CEPANI40 event on the relationship between investment arbitration and EU law. The timing of the event could not have been better since the Court of Justice of the European Union will have delivered its long-awaited Opinion 1/17 (on CETA) just a couple of days before (on 30 April 2019).

You will find the full programme of the event below. For registration, please send an email (with your affiliation) to events@vbb.com.

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The United States Requests KORUS Consultations with South Korea over Competition Policy

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I reported a couple of weeks ago that the European Union (the EU) requested, in December 2018, formal consultations with South Korea following Korea’s failure to implement certain sustainable development commitments made under the EU-Korea Trade Agreement.

It now appears that it is the United States’ turn to initiate formal consultations with South Korea pursuant to Chapter 16 of the US-Korea Free Trade Agreement (KORUS).READ MORE

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