The BGH’s Achmea Decision: Arbitration Clauses in “Intra-EU BITs” Are Invalid

On October 31, 2018, the German Federal Court of Justice rendered an eagerly awaited decision, finding in accordance with the Achmea judgment of the Court of Justice of the European Union that arbitration clauses in bilateral investment treaties between EU Member States are incompatible with EU law and arbitral awards issued under intra-EU BITs must be set aside.

The BGH set aside the arbitral award against the Slovak Republic in favor of the Dutch insurance company Achmea based on the lack of a valid arbitration agreement, and reversed the lower court’s decision upholding the award. The BGH’s decision reignites the momentum of the debate triggered by the CJEU’s Achmea judgment.