Hungarian Arbitration Association’s Post

Read the first reactions to the declaration of Hungary on the intra-EU application of the Energy Charter Treaty to gain a better understanding why it is often worthwhile to persist even against the strongest tide and choose to respect international and EU law. #ruleoflaw #Komstroy #Hungary #ECT

My take on the EU Member States' inter-se declaration withdrawing from the ECT and Hungary's more balanced approached in GAR: Nikos Lavranos, founder of Dutch consultancy NL-Investmentconsulting, says Hungary’s declaration is a “laudable attempt to do justice to the obligations stemming from public international as well as EU law”.  He tells GAR the EU inter se declaration appears to be “fairly beyond reality” since it asserts that the ECT has never applied as a basis for intra-EU disputes, while there are “dozens” of such disputes that have concluded or are pending. He says the public international law perspective is “completely lacking” in that declaration.  Lavranos says Hungary’s declaration “provides a more balanced and reasonable approach by limiting the non-application of the ECT for intra-EU disputes for the future and by requiring a proper amendment of the ECT on the basis of an international law instrument”. “In this way, arguably, the existing interests of investors and the effect of the Komstroy judgment are both duly respected – at least in a more balanced fashion compared to the 26 member states’ declaration.” https://lnkd.in/euPD3c_a

Controversies surrounding the ECT are still ongoing Recently, the EU Council adopted a controversial position that the Treaty does not apply to intra-EU disputes. Prof Lavanos gives an in-depth legal analysis arguing that only Hungary (paradoxically though) provides a balanced position on the topic. A visible trend where interpretation of laws and Treaties is refined to a political purpose isn't a sign of progress. First, is a reminder about non-liberal practice applied mainly by communist regimes (where all freedoms for example were conditioned to a purpose, 'building communism'). Second, it will give ways to current illiberal forces to criticise the EU stance.

In their piece, Gerard J. Meijer, Piotr Wilinski, and Thomas de Boer have provided an overview of the ongoing legal battle involving Spain and intra-EU investment awards enforcement. The authors delve into a case before the District Court of Amsterdam where Spain, in its strategic legal maneuvers, argued that its obligations under an investment treaty award constitute unlawful state aid under EU law. This argument is pivotal as it challenges the #enforcement of the award within the EU, pushing the boundaries of the New York Convention and the Brussels I bis Regulation. The Amsterdam Court's interim judgment sided with Spain, granting itself jurisdiction and setting the stage for a complex interaction between EU state aid rules and international arbitration norms. This case exemplifies the intricate dance between national courts and international obligations, particularly in the realm of intra-EU investment disputes post-#Achmea. The outcome could significantly influence the enforcement landscape of #internationalarbitration awards within the EU, highlighting the tension between EU law and international treaty obligations. #investmentlaw #investmentarbitration #disputeresolution

#OnThisDay, 60 years ago today, the landmark Costa/ENEL ruling established the supremacy of EU law over national laws.    The case arose when Flaminio Costa, an Italian lawyer, challenged the nationalisation of the electricity sector by the Italian government, arguing that it violated the EEC Treaty. The ensuing legal battle reached the Court of Justice of the European Union, which ruled that the Treaty of Rome, and thus EU law, took precedence over national laws. This decision taken by the Court of Justice ensured that European Union law would take precedence over conflicting national legislation, reinforcing the legal unity and coherence across member states. The ruling has had far-reaching implications and contributed to the stability and predictability of #EULaw. Learn more about this historic ruling: ▶️ https://europa.eu/!dTTK4x   .......................................... Hilde Hardeman * Paloma Aba Garrote * Valentina Fratto * Luca Panni * Andrew Paton * Joze Strus * Ines Sieder-Bertilsson * Valérie M. Saintot * Anna Samsel van Haasteren * Pablo Pérez Armenteros * Alessio Aresu * Margarida Ortigão Delgado * Peter Csonka * Eirini Galatsanou * pérignon isabelle * Denis BATTA * Vladimira Durisova * Miguel Gil Tertre * Federico Marco * Jeanette Jansen * Amélie Redortier * Enel Group * Razvan Lupulescu * Michele Bologna * Olimpia Vaccarino Aureli * Rachele De Angelis * Flavia Gamberale * College of Europe * TEPSA - Trans European Policy Studies Association

With a deft stroke of the pen, I am happy to present my latest column, “𝗗𝗲𝗰𝗼𝗱𝗶𝗻𝗴 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝗹 𝗗𝗶𝘀𝗽𝘂𝘁𝗲𝘀: 𝗜𝗻𝘁𝗿𝗮-𝗘𝗨 𝗘𝗻𝗳𝗼𝗿𝗰𝗲𝗺𝗲𝗻𝘁 𝗧𝗿𝗲𝗻𝗱𝘀,” featured in Law360. This piece spotlights the notable fissure within the European Union's united front on arbitral awards, as exemplified by Hungary's recent stance. Whilst the EU’s member states have largely harmonised their positions in alignment with the European Court of Justice's rulings, Hungary has boldly charted its own course. This divergence is not merely a footnote but a clarion call underscoring the tensions between the EU's apparent uniformity and the broader spectrum of international legal obligations. Hungary’s declaration, insisting on amendments to the Energy Charter Treaty rather than its outright non-applicability, underscores a commitment to maintaining a predictable legal environment for investors, distinctly at odds with the EU's current trajectory forged by Achmea and Komstroy, among other judgements. This independent stance by Hungary introduces a critical counterpoint in the discourse on investment arbitration, particularly as it pertains to the renewable energy sector—a realm rife with regulatory unpredictability, as the Spanish saga shows. The implications are profound, suggesting a potential pivot in how intra-EU disputes might be navigated in the future. In this turbulent legal landscape, the United Kingdom’s role post-Brexit as an enforcement haven for arbitral awards against EU member states becomes ever more salient. The UK's judicial independence offers a beacon of stability amidst the continental complexities. My heartfelt thanks go to Rui Johnson Petri, Nataleeya Boss, and B. Lana Guggenheim at Law360 UK for their steadfast support in publishing this new article. Their insights and expertise have been indeed indispensable. For those with a keen interest in the erratic dynamics of intra-EU investment arbitration and the reverberations of Hungary's defiance, I invite you to read the full article. The intricate interplay of law, policy, and international arbitration awaits your discerning scrutiny! #Arbitration #EUlaw #Hungary #InvestmentDisputes #RenewableEnergy #Law360

The European Commission recently approved the first acquisition under the EU Foreign Subsidies Regulation. The decision addresses market distortions caused by foreign subsidies and commitments to ensure fair competition within the EU. In our recent Antitrust & Competition blog post, we cover the Commission’s concerns, the investigation and findings, the significance of the decision, and similar cases in the pipeline. Visit our website to read “European Commission Clears First Acquisition Under EU Foreign Subsidies Regulation,” authored by partner Robert Klotz and legal assistant Lucia Rama.

Read our article “EU Member States’ Diverging Declarations on the Intra-EU Applicability of the ECT” which reveals the reality behind the curtains on the modernization of the Energy Charter Treaty, and deep dive into the mysteries of the ECT regulating relations between EU Member States. This case is particularly important to me, always interested in the relationship between international law and EU law. The “strict observance and the development of international law” is a foundation laid down in the EU Treaties. If we accept that international law is binding on the Union, we also have to acknowledge that it cannot endanger the legal system formed by the treaties and the constitutional principles of EU law. Therefore to the extent that these international agreements are incompatible with the Treaties, the Member States concerned shall take the appropriate steps to eliminate the established incompatibility. However, these steps must also be in line with the basic principles of international and EU law, such as pacta sunt servanda or the rule of law. The purpose of the unilateral declaration of Hungary is to preserve legal certainty and the rule of law, even if it is against serious headwinds. I am grateful to Veronika Korom for her support and counsel during the whole process. #ruleoflaw #pactasuntservanda #Komstroy #Hungary #ECT https://lnkd.in/dkcUYji8

International arbitration Partner Neil Newing and Senior Associate Pietro Grassi examine the Court of Appeal’s recent ruling rejecting claims for immunity from the English courts’ jurisdiction by Spain and Zimbabwe in relation to two separate investment treaty (ICSID) arbitrations, in New Law Journal. In the combined cases of Infrastructure Services Luxembourg Sarl v Spain/ Border Timbers Limited v Zimbabwe [2024] EWCA Civ 1527, the Court of Appeal heard two cases involving challenges by the defendant States to the registration in the English Courts of awards rendered against them in ICSID arbitrations. The challenges were brought on the basis of state immunity, but the Court held that, pursuant to the 1965 Convention on the Settlement of Investment Disputes between States and National of Other States, they had waived their immunity. Read Neil and Pietro's article here: https://lnkd.in/eSiP4yXE

The English Court of Appeal has clarified the position regarding the interaction between the UK’s State Immunity Act 1978 and the Arbitration (International Investment Disputes) Act 1966. The judgment provides clarity to investors with ICSID awards that they can safely seek registration (and enforcement) of their awards in the UK. Critically, this decision also brings the UK back into line with international practice on this issue. Read more. https://gag.gl/y1nQQF