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