Arbitration agreement Archives - international litigation blog
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Arbitration agreement

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 June 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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U.S. Supreme Court Rules on Enforceability of Individual Arbitration Agreements in Employment Contracts

On 21 May 2018, the U.S. Supreme Court (the Supreme Court) handed down its decision in Epic Systems Corp. v. Lewis finding that arbitration agreements in which an employee agrees to arbitrate any claims against an employer on an individual rather than on a class or collective basis are enforceable and are not in violation of the National Labor Relations Act (the NLRA).

The judgment concerned three consolidated cases: Epic Systems Corp. v. Lewis; Ernst & Young LLP v. Morris and NLRB v. Murphy Oil USA, Inc. As the Court noted, the three cases differed in detail but not in substance.

In previous decisions (see: AT&T Mobility v. Concepcion; American Express Co. v. Italian Colors Restaurant; DIRECTV, Inc. v. Imburgia), the Supreme Court had already ruled that companies were entitled to include individual arbitration clauses in their consumer contracts which explicitly precluded those consumers from resorting to class arbitration. In the present case, the Supreme Court had to rule on whether companies could also include individual arbitration clauses in their contract with their employees which required those employees to waive their rights to participate in class and collective actions.READ MORE

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U.S. Supreme Court in May… Arbitration and International Litigation Not Far Away

Spring and the month of May seem to have inspired the U.S. Supreme Court (the Supreme Court) justices. In less than three weeks, the Supreme Court rendered three interesting opinions with respect to arbitration and international litigation:

  • Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co. (on FSIA pleading standards);
  • Kindred Nursing Centers Partnership v. Clark (on whether state-law could require that a PoA expressly refer to arbitration agreements before an attorney-in-fact can bind his or her principal to an arbitration agreement);
  • Water Splash, Inc. v. Menon (on whether the Hague Service Convention allows service of process by postal channels).

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