Implications of Achmea

The Achmea ruling establishes that ISDS provisions are incompatible with EU law when they sideline domestic courts and undermine the EU's judicial system. While the ruling explicitly applies to bilateral investment treaties (BITs) between EU Member States, the briefing argues that the same reasoning likely renders agreements with third countries impermissible if the tribunals are not part of the EU judiciary, may interpret EU law, and lack full judicial review by Member State courts. This creates significant legal uncertainty, potentially making awards unenforceable and hindering the negotiation of new treaties containing investment arbitration.

• The European Court of Justice (ECJ) ruled in the Achmea case that arbitration clauses in bilateral investment treaties (BITs) between EU Member States are incompatible with EU law because they remove disputes from the jurisdiction of domestic courts and the EU's system of judicial remedies.
• The briefing argues that the Achmea reasoning likely extends to agreements with non-EU countries based on three factors: ISDS tribunals are not part of the EU judicial system, they may resolve disputes involving the interpretation of EU law, and their awards are not subject to full review by Member State courts.
• Most international investment agreements are silent on applicable law, and rules from bodies like ICSID and UNCITRAL allow tribunals to apply the law of the contracting state or other appropriate laws, which may include EU law, thus conflicting with the ECJ's exclusive jurisdiction.
• If the Achmea ruling is applied to third-country agreements, it could lead to the inability to enforce tribunal awards in EU courts, a legal obligation for Member States to contest the jurisdiction of such tribunals, and a ban on the European Commission authorizing new BITs containing investment arbitration.
• The briefing suggests that the proposed Investment Court System (ICS) in the Canada-EU Comprehensive Economic and Trade Agreement (CETA) may still be found incompatible with EU law because it does not explicitly exclude disputes in fields covered by EU law from the jurisdiction of ICS tribunals.
• The ruling may disproportionately affect investors from non-EU countries, particularly those from lower middle-income countries, by making their awards unenforceable while EU investors continue to benefit from protections in non-EU countries.

APA

Ankersmit, L., & Hughes, L. (2018). Implications of Achmea. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2018/04/Implications-of-Achmea.pdf

Chicago

Ankersmit, Laurens, and Layla Hughes. Implications of Achmea. Center for International Environmental Law, 2018. https://www.ciel.org/wp-content/uploads/2018/04/Implications-of-Achmea.pdf.

Wikipedia

{{cite report |last1=Ankersmit |first1=Laurens |last2=Hughes |first2=Layla |title=Implications of Achmea |publisher=Center for International Environmental Law |date=April 2018 |url=https://www.ciel.org/wp-content/uploads/2018/04/Implications-of-Achmea.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ankersmit2018implications, author = {Ankersmit, Laurens and Hughes, Layla}, title = {{Implications of Achmea}}, institution = {Center for International Environmental Law}, year = {2018}, month = apr, url = {https://www.ciel.org/wp-content/uploads/2018/04/Implications-of-Achmea.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }