Implications of Achmea

The Achmea judgment 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. This is because such tribunals are not part of the EU judicial system, may resolve disputes relating to EU law, and their awards lack sufficient review by Member State courts. Consequently, this creates significant legal uncertainty, potentially making awards won by non-EU investors unenforceable and hindering the negotiation of new agreements 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 reasoning of the Achmea ruling likely extends to investment agreements with non-EU countries based on three factors: the tribunals are not part of the EU judicial system, they may resolve disputes involving the interpretation or application 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 laws that may include EU law, which the ECJ considers a violation of its exclusive jurisdiction.
• If the Achmea reasoning is applied to third-country agreements, EU Member States may be legally required to contest the jurisdiction of arbitration tribunals and challenge awards if they lose a dispute, provided national law allows such challenges.
• The ruling creates a 'one-way street' where EU investors can still use ISDS in non-EU countries, but investors from third countries may find their awards unenforceable in the EU, disproportionately affecting investors from lower middle-income countries.

APA

Ankersmit, L., & Hughes, L. (2018). Implications of Achmea. ClientEarth. https://www.clientearth.org/media/f4mfgfef/implications-of-achmea-judgment-coll-en.pdf

Chicago

Ankersmit, Laurens, and Layla Hughes. Implications of Achmea. ClientEarth, 2018. https://www.clientearth.org/media/f4mfgfef/implications-of-achmea-judgment-coll-en.pdf.

Wikipedia

{{cite report |last1=Ankersmit |first1=Laurens |last2=Hughes |first2=Layla |title=Implications of Achmea |publisher=ClientEarth |date=April 2018 |url=https://www.clientearth.org/media/f4mfgfef/implications-of-achmea-judgment-coll-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ankersmit2018implications, author = {Ankersmit, Laurens and Hughes, Layla}, title = {{Implications of Achmea}}, institution = {ClientEarth}, year = {2018}, month = apr, url = {https://www.clientearth.org/media/f4mfgfef/implications-of-achmea-judgment-coll-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }