Author: Eyvana Maria Bengochea
On March 6, 2018, the Court of Justice of the European Union (“CJEU”) issued the first precedent in regards to arbitration clauses within intra-EU Bilateral Investment Treaties (“BITs”) and EU law. In the highly anticipated judgment of Slovak Republic v. Achmea B.V. the CJEU ruled that the Article 8 arbitration clause of the 1991 Netherlands-Slovakia Bilateral Investment Treaty is incompatible with EU law due to the adverse effect it poses on the autonomy of EU law. Given that there are currently 196 intra-EU BITs in force, this judgement will likely impact future investor-state disputes, although the judgment is not binding upon investment treaty tribunals.
Prior to this Judgement, the legality of intra-EU BITs had been highly contested among academics and professionals for over ten years. In 2007, the tribunal in Eastern Sugar v. Czech Republic rejected the Respondent’s argument that the BIT application was limited, as it had been superseded by EU law since the Czech Republic’s accession to the European Union. In recent years, the status of intra-EU BITs re-emerged to the center of debates in context of the Comprehensive Economic and Trade Agreement between the EU and Canada, and the possible establishment of a European multilateral investment Court.
Throughout years of debate, all previous arbitrations dealing with the validity of intra-EU BIT’s had been brought against new Members of the EU. These countries were targets of the 1990s “BITs Baby Boom” after the fall of communism, characterized by BITS with extensive, and sometimes burdensome, obligations. The arguments raised by Slovakia, primarily that the Slovakia-Netherlands BIT was incompatible with several provisions of the Treaty on the Functioning of the European Union (TFEU), provided an opportunity for the CJEU to develop the European investment regime.
The CJEU judgement has several important statements, including that an arbitral tribunal could not be considered a “tribunal” or “court” of a Member State within the meaning of Article 267 TFEU. The CJEU concluded that the BIT’s dispute settling mechanism did not ensure that disputes would be decided via a court within the EU judicial system, thereby removing disputes involving the interpretation or application of EU law from the framework provided by EU law. The arbitration clause in the BIT had an adverse effect on the autonomy of EU law and the two were therefore incompatible.
By issuing the judgement, the CJEU has reaffirmed the primacy and autonomy of EU law and the EU legal system. Practitioners have commented that the judgment will likely send “shockwaves” through the ranks of proponents of investment treaty arbitration. The judgement also provides a step in the evolution of a trend marked by years of opposition by the European Commission against intra-EU BITS in investor-state arbitration, and a general effort for Member States to terminate their intra-EU BITs. 
Although there may be an increase in the number of challenges of non ICSID awards under intra-EU BITs by arbitral tribunals in the EU, the judgement’s implications are still not clear. This is especially true in regards to ICSID disputes before tribunals outside the EU or intra-EU disputes under the Energy Charter Treaty (ECT).  Regardless, the judgement will definitely contribute to the ongoing policy debates surrounding intra-EU investment protection and numerous other issues, such as the future of ISDS in Europe.
 Kluwer Arbitration Blog, The Judgement of the CJEU in Slovak Republic v. Achmea- A Loud Clap of Thunder on the Intra-EU BIT Sky! (March 7, 2018), http://arbitrationblog.kluwerarbitration.com/2018/03/07/the-judgment-of-the-cjeu-in-slovak-republic-v-achmea/.
 Slowakische Republik (Slovak Republic) v. Achmea BV, CJEU Case No. C-284/16, Judgment (March 6 2018).
 Id. at ¶ 59.
 See supra note 1.
 Eastern Sugar B.V. (Netherlands) v. Czech Republic, SCC. Case No. 088/2004, Partial Award (March 27 2007).
Kluwer Arbitration Blog, The CJEU in Slovakia v Achmea or Is Justice Best Served Cold? (March 11, 2018), http://arbitrationblog.kluwerarbitration.com/2018/03/11/cjeu-slovakia-v-achmea-justice-best-served-cold/.
 Id.; European Commission, EU-Canada trade agreement enters into force (September 20, 2017), http://ec.europa.eu/trade/policy/in-focus/ceta/index_en.htm.
 See supra note 6.
 See supra note 1.
 Id; Kluwer Arbitration Blog, The Intra EU-BITs in the Opinion of AG Wathelet between Light and Shadow (February 4, 2018), http://arbitrationblog.kluwerarbitration.com/2018/02/04/intra-eu-bits-opinion-ag-wathelet-light-shadow/.
 See supra note 1.