Arbitration agreement Archives - international litigation blog
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Arbitration agreement

U.S. Supreme Court Rules on Threshold Issues of Arbitrability

Earlier this year, the U.S. Supreme Court (the Supreme Court or the Court) handed down two interesting decisions on the question of who, between a judge and an arbitrator, was properly positioned to answer the threshold question of whether a specific dispute is subject to arbitration and whether the parties are entitled to delegate that issue to arbitrators.READ MORE

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

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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Belgian Supreme Court Rules on Validity of NATO’s Arbitration Clause in Light of Article 6 ECHR

On 27 September 2018, the Belgian Supreme Court handed down a judgment regarding the validity, in light of Article 6, paragraph 1 (right to a fair trial) of the European Convention on Human Rights (the ECHR), of an arbitration clause contained in a service agreement concluded between the North-Atlantic Treaty Organization (NATO) and one of its gardeners (Mr. P) in 2007.READ MORE

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Vattenfall v. Germany: Tribunal Subtly Avoids Applying Achmea Judgment and Finds that Article 26(6) ECT Does Not Apply to Jurisdiction Issues

On 31 August 2018, the ICSID tribunal in Vattenfall v. Germany issued a decision addressing the consequences, for this case, of the Achmea judgment handed down by the Court of Justice of the European Union (the CJEU) on 6 March 2018 (see previous analysis of the Achmea judgment here and here).

The case at hand is a well-known investment dispute whereby a Swedish investor (Vattenfall) initiated arbitral proceedings against Germany seeking compensation for damages incurred following Germany’s decision to shut down all the nuclear power plants on its territory and to replace them with green energy alternatives. Vattenfall, which owned such nuclear power plants, argued that such decision amounted to an expropriation which violated the Energy Charter Treaty (the ECT – a multilateral agreement to which both Germany and Sweden were parties to, together with all other EU Member States, the European Union and several third countries (including Japan, and Central Asian countries)).

In the Achmea judgment, the CJEU ruled that an intra-EU investment arbitration case between two EU parties, a Dutch investor and Slovakia, violated EU law. However, in stark difference with the Vattenfall case (where the underlying basis for arbitration was the ECT’s investor-State dispute resolution clause provided for in Article 26), the basis for the jurisdiction of the arbitral tribunal in Achmea was the Czechoslovakia-Netherlands bilateral investment treaty (BIT).

Based on that judgment, and since the Vattenfall case also involved EU parties (i.e., a Swedish investor against an EU Member State), Germany argued that the arbitral tribunal in Vattenfall lacked jurisdiction since the findings of the CJEU in Achmea were “not limited to BITs between EU Member States, but must also be applied to multilateral agreement to which EU Member States are party, such as the ECT“.READ MORE

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Brussels Court of Appeal Rules FIFA and UEFA Arbitration Clauses Inapplicable

On 29 August 2018, in a case involving FIFA (the International Football Association) and UEFA (the European Football Association), the Brussels Court of Appeal (the Court of Appeal), issued an important decision refusing to refer the dispute to arbitration despite the existence of arbitration clauses providing for the jurisdiction of the Court of Arbitration for Sport (CAS).READ MORE

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English High Court Rules on Anti-Suit Injunctions and Disregards AG Wathelet’s Opinion in Gazprom

On 6 June 2018, the English High Court (the Court) ruled in Nori Holding Limited et al. that a European court was not entitled to grant anti-suit injunctions in order to prevent parallel judicial proceedings taking place in another EU Member State. The Court’s judgment is in line with the West Tankers ruling handed down by the Court of Justice of the European Union (the CJEU) in 2009.READ MORE

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Does Achmea Invalidates All Intra-EU BITs? Not necessarily!

On 19 July 2018, the European Commission published a communication on the protection of intra-EU investments (the Communication).

One important take-away from this Communication is the implication that the European Commission draws from the judgment handed down by the Court of the Justice of the European Union (the CJEU) in Achmea.

According to the Commission:

In the Achmea judgment the Court of Justice ruled that the investor-to-State arbitration clauses laid down in intra-EU BITs undermine the system of legal remedies provided for in the EU Treaties and thus jeopardise the autonomy, effectiveness, primacy and direct effect of Union law and the principle of mutual trust between the Member States. Recourse to such clauses undermines the preliminary ruling procedure provided for in Article 267 TFEU, and is not compatible with the principle of sincere cooperation. This implies that all investor-State arbitration clauses in intra-EU BITS are inapplicable and that any arbitration tribunal established on the basis of such clauses lacks jurisdiction due to the absence of a valid arbitration agreement. As a consequence, national courts are under the obligation to annul any arbitral award rendered on that basis and to refuse to enforce it. Member States that are parties to pending cases, in whatever capacity, must also draw all necessary consequences from the Achmea judgment. Moreover, pursuant to the principle of legal certainty, they are bound to formally terminate their intra-EU BITs.

The Achmea judgment is also relevant for the investor-State arbitration mechanism established in Article 26 of the Energy Charter Treaty as regards intra-EU relations. This provision, if interpreted correctly, does not provide for an investor-State arbitration clause applicable between investors from a Member States of the EU and another Member States of the EU. Given the primacy of Union law, that clause, if interpreted as applying intra-EU, is incompatible with EU primary law and thus inapplicable. Indeed, the reasoning of the Court in Achmea applies equally to the intra-EU application of such a clause which, just like the clauses of intra-EU BITs, opens the possibility of submitting those disputes to a body which is not part of the judicial system of the EU. The fact that the EU is also a party to the Energy Charter Treaty does not affect this conclusion: the participation of the EU in that Treaty has only created rights and obligations between the EU and third countries and has not affected the relations between the EU Member States.” (emphasis added)

In the Q&A that accompanied the Communication, the European Commission also emphasised that the Achmea judgment does not have consequences for agreements with third countries. According to the Commission, Achmeaonly concerns intra-EU disputes” and “different legal considerations apply to external EU investment policies“.

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Shortly after the publication of the judgment in Achmea, my colleague Isabelle Van Damme and I published a first article in which we analysed the potential consequences of this judgment for CETA, for the proposed Multilateral Investment Court and for future EU trade and investment agreements (including the future agreement between the European Union and the United Kingdom).

Today, I (provocatively) develop that analysis further by arguing that, contrary to the position expressed by the European Commission in its Communication and in the Q&A, the findings of the CJEU in Achmea might not necessarily mark the end of (arbitration clauses in) all intra-EU bilateral investment treaties (intra-EU BITs)*. In addition, I also argue that, in some aspects, Achmea might also affect other types of international agreements concluded by the EU or other BITs concluded by EU Member States with one or more non-EU countries (extra-EU BITs).READ MORE

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