CJEU Achmea Judgment and What Comes Next. Some Reflections on the Potential Implications of the CJEU Judgment (C-284/16)

In the judgment of 6.03.2018 (Achmea case, C-284/16), CJEU ruled that treaty clauses that allow investor from one of the Member States to bring proceedings against another Member State before an arbitraltribunal outside the EU judicial system are irreconcilable with Articles 267 and 344 TFEU when such tribunal may be called on to interpret or apply EU law. This principle is applicable to EU trade or investment agreements (FTAs and IIAs), since they are part of EU law, and to BITs, FTAs and IIAs, since they contain explicit or implicit referrals to municipal (EU) law. In intra-EU relations, such a conflict of norms must be solved according to customary international law codified in the VCLT. According to this law, TFEU would prevail as lex superior and, in the case of Poland and many other Member States, as lex posterior. In intra-EU relations, TFEU prevails ex proprio vigore, i.e. without the need to terminate intra-EU BITs. However, such termination is highly desirable, not only for reasons of clarity, but also because arbitral tribunals and extra-EU courts are not bounded by the ECJ’s ruling. In the case of agreements with non-Member States, the incompatibilities referred to in the Achmea judgment must be eliminated by renegotiation or formal termination (Article 307 (2) TFEU). In the case of the BITs, the latter seems to be the only practical solution.