Micula v Romania – A Saga of Lasting Significance

The dispute between the Micula parties and Romania has continued for over 16 years raising issues in investment arbitration and European Union (EU) law and particularly the enforceability of arbitral awards in varying jurisdictions. The proceedings, first brought before an ICSID Tribunal in 2005 (followed by annulment proceedings) have since led to enforcement proceedings across multiple fora including the EU Commission (involving State aid rules) as well as EU, English and US domestic courts. Whilst the Micula saga may be inching near to a conclusion, it threatens to cause lasting damage to what was intended to be a closed ecosystem of the ICSID Convention. A precedent has been set whereby instead of enforcing awards in accordance with the provisions of the ICSID Convention, Courts of ICSID Member States may proceed to enforce awards as though the ICSID Convention did not apply. As such, a discussion may need to take place in relation to the possible amendment of certain provisions of the ICSID Convention; however, in the short term it is important that supranational bodies unrelated to the ICSID Convention do not interfere with the obligations of ICSID Member States or purport to prohibit ICSID Member States from complying with ICSID awards.