News & Views

The European Court of Justice Extends Its Achmea Findings to Cover the ECT

6 September 2021

Authors: Anna-Maria Tamminen, Pontus Ewerlöf and Aapo Heinäsmäki


As we wrote in March, the status of intra-EU investment disputes has been in a state of flux. The European Court of Justice (ECJ) rendered, on 2 September 2021, a landmark ruling in the case Republic de Moldavie v. Komstroy (C-741/19), in which it extended the findings it had made in the 2018 Achmea judgment (C-284/18) to also cover the investor-state dispute settlement (ISDS) provisions of the Energy Charter Treaty (ECT) thereby considerably clarifying the field.

Achmea and Komstroy Rulings and the Energy Charter Treaty

By way of a reminder, the ECJ in its Achmea ruling found that Articles 267 and 344 TFEU preclude an arbitration agreement in an intra-EU bilateral investment agreement. Although the Achmea ruling has had great influence on the field of intra-EU ISDS, its effect on ECT disputes has been more subdued — states responding to intra-EU investment claims have rather consistently invoked the findings made in Achmea as a jurisdictional challenge to the ECT claims, but the various arbitration tribunals applying the ECT have just as consistently rejected such arguments, partially due to the fact that the Achmea ruling explicitly concerned bilateral investment treaties, whereas the ECT is a multilateral treaty.

Although the ECT is only a single treaty, its significance cannot be overstated. The Energy Charter Treaty concerns solely the energy sector, a field of crucial importance in combatting climate change. Furthermore, it is by far the most litigated investment treaty — over 10% of all known ISDS cases concern the ECT – and some of the largest arbitral awards have been rendered by tribunals applying its provisions. Over time, the number of intra-EU ECT disputes has increased considerably, with some of the most notable cases such as Vattenfall v. Germany I & II, RWE v. Kingdom of the Netherlands and Uniper v. Kingdom of the Netherlands being intra-EU disputes. The number of such high-profile cases paired with the ECJ’s findings in Achmea understandably resulted in much ambiguity.

In the Komstroy case, which curiously itself is not an intra-EU dispute, the ECJ has, however, tackled these ambiguities forcefully. In the judgment, the ECJ stated the following (underlining added):

“[64] It should be noted in that regard that, despite the multilateral nature of the international agreement of which it forms part, a provision such as Article 26 ECT is intended, in reality, to govern bilateral relations between two of the Contracting Parties, in an analogous way to the provision of the bilateral investment treaty at issue in the case giving rise to the judgment of 6 March 2018, Achmea (C‑284/16, EU:C:2018:158, paragraph 58).

[65] It follows that, although the ECT may require Member States to comply with the arbitral mechanisms for which it provides in their relations with investors from third States who are also Contracting Parties to that treaty as regards investments made by the latter in those Member States, preservation of the autonomy and of the particular nature of EU law precludes the same obligations under the ECT from being imposed on Member States as between themselves.

[66] In the light of the foregoing, it must be concluded that Article 26(2)(c) ECT must be interpreted as not being applicable to disputes between a Member State and an investor of another Member State concerning an investment made by the latter in the first Member State.

As can be read from the judgment, the ECJ has in no uncertain terms extended the findings in Achmea to intra-EU ECT disputes.

What Comes Next?

As always, it is notoriously difficult to predict the future. However, certain predictions can be made. As mentioned above, there are several intra-EU ECT disputes which are either ongoing or where an award has been rendered relatively recently. It is likely that the responding states will rely on the findings made in Komstroy to challenge the jurisdiction of current tribunals or that of past tribunals in an attempt to annul an already rendered award particularly if the state in question has previously relied on the findings made in Achmea and especially if the tribunal is seated within the EU. On the other hand, it will be interesting to see how ICSID tribunals, which, in the past, have been somewhat reluctant to follow the ECJ findings, will react to the new ruling.

As the ECT is of such importance in combatting climate change, any changes to how the treaty is applied are potentially of great significance and of interest from that perspective. For example, it is now perfectly plausible that the tribunals that would hear RWE’s and Uniper’s claims against the Netherlands find themselves lacking jurisdiction in the matters — an outcome that would have been less likely prior to the Komstroy judgment.


Hannes Snellman has experience in handling jurisdictional matters in post-Achmea intra-EU investment disputes. Our experts will be happy to discuss such matters with you.