THE IMPACT OF ACHMEA ON INTRA-EU INVESTMENT ARBITRATION: THE STATUS QUO
The original case concerns Achmea BV, a company belonging to a Netherlands insurance group. After the Slovak Republic liberalised its health insurance market, Achmea established a Slovak subsidiary to offer private health insurance. In 2006, the Slovak Republic partly revoked the reforms and Achmea was prohibited from distributing profits obtained from its insurance activities. Achmea viewed this legislative change as a breach of the bilateral investment treaty (BIT) between the Netherlands and the Slovak Republic. For this reason, in 2008, Achmea initiated arbitral proceedings against the Slovak Republic on the basis of the arbitration clause incorporated in Article 8 of the BIT. Frankfurt in Germany was selected as the arbitral seat and the proceedings were conducted under the UNCITRAL Arbitration Rules. In 2012, the arbitral tribunal found the Slovak Republic to be in breach of its obligations under the BIT and awarded Achmea damages in the amount of €22.1m.
The Slovak Republic commenced annulment proceedings before the German courts, asserting that the offer to arbitrate set out in Article 8 of the BIT was contrary to European Union (EU) law and was therefore invalid. Against this background, the Slovak Republic argued that the arbitral tribunal lacked jurisdiction and that the award should be set aside. The Higher Regional Court of Frankfurt rejected the arguments of the Slovak Republic.
Oct-Dec 2019 issue
Freshfields Bruckhaus Deringer LLP