The Higher Regional Court of Frankfurt am Main Is the First European Court to Declare the Achmea Case a Landmark Decision with Significance for All Intra-EU BITS

Abstract

In February 2021, the Higher Regional Court of Frankfurt am Main (Oberlandesgericht – “olg”), rendered a decision in the case between the Republic of Croatia (“Croatia”) as the applicant, and an Austrian bank incorporated as a joint stock company under Austrian law and a Croatian bank incorporated as a joint stock company under the laws of Croatia having the Austrian bank as its sole shareholder as the Respondents (“Respondents”). This decision concerns the incompatibility of an arbitration clause contained in the Agreement between the Republic of Austria and Croatia on the Promotion and Protection of Investments (“Austria-Croatia bit”)2 with EU law. Croatia successfully challenged the admissibility of an uncitral arbitration based on Article 9(2)(b) of the Austria- Croatia bit, initiated by the Respondents, by virtue of an application under Section 1032(2) of the German Code of Civil Procedure (Zivilprozessordnung – “zpo”). Croatia argued that Article 9(2)(b) of the Austria- Croatia bit was incompatible with EU law.