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A couple of months ago a decision by the European Court of Justice (“ECJ”) shocked the arbitration community: The ECJ decided in its (in)famous Achmea-decision that EU member states must not settle their disputes in arbitration proceedings agreed upon in bilateral intra-EU investment treaties (see The reasoning of Achmea was that EU member states are bound to use the judicial system established by the European Union. Settling disputes in private arbitration proceedings would, according to the ECJ, circumvent or even torpedo the jurisdiction of the highest European court and thus endanger the uniform application of European laws. Based on this reasoning, the ECJ decided in Achmea that the enforcement of respective awards must be denied. Following Achmea, there was a widespread fear that the ECJ’s decision would put an end to investment arbitrations to which EU member states are party.

An Arbitral Tribunal chaired by Prof. van den Berg has now decided in the Vattenfall-case that the Achmea-reasoning does not apply to arbitrations governed by the Energy Charter Treaty (“ECT”) and the arbitration clause contained therein (Art. 26 ECT). In the Vattenfall-case, the Swedish Vattenfall-group has sued the Federal Republic of Germany for damages caused by the so-called German “Energiewende” (“energy turnaround”). In the energy turnaround, the German government had basically decided to shutdown nuclear power plants within a short timespan and to replace them by green energy. Vattenfall considers this to be an expropriation with regard to their nuclear power plants in Germany and initiated arbitration proceedings under the ECT.

After taking note of the Achmea decision, the Federal Republic of Germany raised the anticipated complaint: Achmea must also put an end to the Vattenfall arbitration. The Vattenfall Tribunal has now decided on this complaint in an award dated 31 August 2018 which is available in the internet ( In this award, the Arbitral Tribunal rejects the application of the Achmea-ruling to the Vattenfall-arbitration. The award reasons that the Achmea decision was made with regard to a bilateral investment treaty between EU member states and does not address disputes under the ECT as a multilateral investment treaty to which the European Union itself is a member. The Tribunal bases its ruling on two main arguments:

First, when interpreting the terms of the ECT, there is no indication that the signatories to the ECT intended to carve out intra-EU disputes from the dispute resolution clause in Art. 26 ECT. This would have been “a simple matter” considering that Art. 28 ECT contains several of such exclusions (at para. 187 et seq.). The Arbitral Tribunal further analyzes that EU law cannot take superiority over other international law and that interpreting the ECT in light of EU law (including judge made EU law such as Achmea) is impermissible since it would endanger the uniform interpretation of the ECT for all ECT-member states, including those not being a member state of the EU.

Second, the Tribunal identifies an “unsurmountable obstacle” to Germany’s Achmea-objection in the ECT’s conflict rule contained in Art. 16 ECT. According to this conflict rule, prior or subsequent investment treaties cannot undermine the rights guaranteed to investors by the ECT if they are more favorable to the investor. Therefore, according to the Tribunal, even if EU law did prohibit intra-EU investment arbitrations, this would not affect arbitration proceedings initiated under the ECT (at para. 192 et seq.)

Based on this reasoning, the Arbitral Tribunal upheld the jurisdiction of the Tribunal. It is noteworthy, however, that the Arbitral Tribunal did not touch the Achmea decision itself and did not criticize its substance. Reading the award, one gets the impression that such open opposition was carefully avoided. Those who had hoped for flamboyant advocacy in favor of international arbitration arguing against the arbitration-paranoia widespread within official EU-circles will be disappointed.

The Vattenfall decision demonstrates that there is hope for investment arbitrations even if EU member states are a party to the arbitration. If the underlying arbitration clause is not contained in a bilateral investment treaty of an EU member state, but one in a multilateral international treaty (like the ECT), the Achmea reasoning might not apply. An interesting twist in the Vattenfall arbitration is that it is governed by the ICSID rules. These rules have the special feature that the final award is enforceable by itself, i.e. without further help of state courts. Consequently, state courts will not be involved in the further proceeding and thus will not have a say whether the reasoning in Vattenfall is indeed accepted under the laws of the European Union. Hence, the discussion about Achmea will continue.


Prof. Dr. Joerg Risse LL.M. (Berkeley) is a member of the Dispute Resolution Group at Baker McKenzie in Frankfurt. Being double-qualified as an attorney-at-law in Germany and in New York (USA), he represents his clients in international arbitrations before all major arbitral institutions. Since Prof. Risse is frequently appointed to act as an arbitrator or mediator, his clients also benefit from his "judiciary" outlook on a case. Prof. Risse teaches advocacy skills and dispute resolution at the University of Mannheim. Prof. Risse is ranked by Chambers Global 2015 as one of the top two arbitration counsels in Germany and among the most in-demand arbitrators. Handelsblatt/Best Lawyers 2015/2016 honors him as "Lawyer of the Year" in international arbitration. According to Juve (2010 - 2015), he is a "leading name" in arbitration, and Who is Who Legal 2015 declared him one of the top seven commercial mediators in Germany. Prof. Risse advises in post merger and acquisition disputes, in particular in price adjustment disputes, reps and warranty claims and claims raised against transaction advisers. His second main area of practice are disputes related to large infrastructure projects such as power plants, offshore wind farms, electricity networks, public transport projects or airports. Most of his clients are from the “old economy”, including turn-key contractors for large projects and companies from the chemical, automotive, medical and mass transport industry. Prof. Risse has particular experience in ADR-proceedings where he advises his clients in settlement negotiations, mediation and adjudication proceedings. Prof. Risse can be reached at and +49 69 299080.


Dr. Nicolas Gremminger is a member of the Dispute Resolution team at Baker McKenzie in Frankfurt. Nicolas advises on international arbitration and commercial litigation matters. He represents clients in cases focusing on large industrial projects, advisor liability and IT litigation. Nicolas teaches at the University of Mannheim, Germany Nicolas Gremminger can be reached at and +49 69 299080.