to derogate from any provision of Part submission would not assist the tribunal V (including Article 26) where any such and would disrupt the proceedings. agreement is more favourable to the The tribunal held that the parties had investor. Additionally, it observed that long ago decided upon the issue and depriving EU investors of their right to furthermore that the tribunal itself Home invoke arbitration against a Member had taken the Achmea decision into State would go against the ECT’s consideration when drafting the award. Editorial purpose of encouraging the flow of investments. The award was issued shortly thereafter, on 9 October, granting the Insight Lastly, concerning the respondent’s French claimants EUR 23 million in When arbitration is not voluntary: the case of Mutu allegation that any compensation compensation for the expropriation of and Pechstein v. Switzerland in favour of the claimant would their investment in the meal voucher infringe EU-law and render the award market through changes to legislation on Global Briefing unenforceable, the tribunal considered fringe benefits provided to employees. The impact of The Belt and that the enforceability of the award was The award lacks a thorough discussion Road Initiative on investment a separate issue from its jurisdiction. of the Achmea judgment, finding that arbitration The tribunal concluded that possible that case differed substantively from the “What’s in a name?”: NAFTA EU-law breaches as a result of any post- circumstances surrounding Achmea. to USMCA and what this arbitration actions by the claimant were Instead, the tribunal highlighted that, change means for investment that may lead to the interpretation that particularly on the basis of the special protection not before it. as opposed to the Achmea case, its obligations under the ICSID Convention characteristics of ICSID arbitration, jurisdiction was based on the ICSID are incompatible with EU law. Moreover, new questions arise as to its effects on In Focus Is ICSID really a different story? Convention, which placed it in the the tribunal considered that Hungary ICSID arbitration clauses contained in Cultural Heritage international law plane independent from failed to demonstrate that it had intra-EU BITs. There may also be legal Considerations in The second of the abovementioned any regional context. denounced the ICSID Convention in any and factual implications for the potential International Investment decisions, Up and C.DHolding Arbitration way. The tribunal highlighted that even termination by Member States of intra- Internationale v. Hungary (ICSID Case No. ICSID awards are exclusively subject to assuming that such denunciation had EU BITs, which typically contain a Smart Contracts and ARB/13/35), represents a hybrid case the annulment proceedings established taken place, Hungary’s consent to ICSID so-called survival clause. Theoretically, International Arbitration: between Achmea and Vatenfall; it is an in Article 52 of the ICSID Convention. Friends or Foes? arbitration as contained in the BIT could such a clause would keep the treaty ICSID arbitration based on an intra-EU BIT. Moreover, no further review by any not be retroactively withdrawn in light obligations in force for many years after The Achmea decision: domestic court is allowed. Further, of Article 72 of the ICSID Convention. its termination. significant uncertainties linger In August 2018, the Up case tribunal under Articles 53 and 54 of the ICSID Although the tribunal’s arguments on this rejected the EC’s request to intervene in Convention Hungary cannot appeal the point were scant, it is worth mentioning Be that as it may, as observed by the Investment Arbitration: this ICSID arbitration on the basis that award and must recognise it as a final that the tribunal’s view here manifestly Vatenfall tribunal, it seems logical that Contact Lawyers according to ICSID Rule 37(3) the EC’s judgment of a Hungarian court. departs from most interpretations that if the EU or its Member States find that ICSID tribunals and legal scholars have there is any incompatibility between the The tribunal found no reason to conclude adopted of Article 72. ECT, ICSID clauses, and EU-law, it is that Hungary’s accession to the EU they who should tackle this problem and would terminate its obligations under While these recent ICSID awards provide remedy the situation. Looking at how the ICSID Convention, particularly since proof that arbitral tribunals do not things are unfolding, further action by there is no rule or provision in EU law feel bound by the Achmea judgment, these parties is to be expected. www.uria.com 21