2025 in Review: What Future for Intra-EU Investment Arbitration?

2025 witnessed mixed developments for the future of intra-European Union (“EU”) investment arbitration, that is, proceedings brought by an investor from one EU Member State against another EU Member State. From non-EU jurisdictions, particularly the United States of America (“USA”), developments have been investor-friendly, particularly as regards the enforcement of intra-EU investment arbitration awards (see e.g., here and here). Within the EU, by contrast, recent judicial and institutional decisions paint a far less encouraging picture from an investor perspective, both for pending proceedings and for the enforcement of existing and future awards.

This post reviews the key developments of 2025 for intra-EU investment arbitration and highlights relevant contributions published on the Kluwer Arbitration Blog.

The Future of Investors’ Protection and Intra-EU Arbitral Proceedings in the EU

Among the most notable recent developments, two domestic court decisions have shed light on the future of investors’ protection and intra-EU investment arbitral proceedings in the EU, suggesting that EU investors should no longer rely on investment arbitration to pursue their claims against EU Member States, and should rather seek other forms of legal redress.

The German Constitutional Court Decision on the Protection of Investors’ Fundamental Rights

In 2024, the German Constitutional Court rejected as inadmissible a constitutional complaint brought by an EU investor in the aftermath of the Court of Justice of the European Union (“CJEU”)’s judgment in Achmea. In this judgment, the CJEU held that arbitration clauses in intra-EU bilateral investment treaties (“BITs”) are incompatible with EU law, because they undermine the autonomy of the EU legal order by removing disputes involving EU law from the jurisdiction of EU courts and the CJEU’s preliminary ruling system. This judgment led to an order by the German Federal Court of Justice setting aside the award in Achmea v. Slovakia, an intra-EU arbitration brought under the Netherlands-Slovakia BIT. Achmea challenged this order before the German Constitutional Court, complaining that it violated its fundamental rights, including property, freedom to practise an occupation, and effective legal protection, as well as its legitimate expectations.

In their post, Laura Rees-Evans and Miglena Angelova analysed the judgment of the German Constitutional Court. As the authors explained, while the Court acknowledged that Achmea precludes investors from resolving intra-EU investment disputes through arbitration, it emphasised that investors continue to have access to a legal framework offering adequate protection of their fundamental rights. In particular, according to the Court, investors remain protected under the Treaty on the Functioning of the European Union, the EU Charter of Fundamental Rights, and the European Convention on Human Rights for violation of their property rights. However, the Court saw no violation of Achmea’s right to property arising from the setting aside of its award. The Court also held that, by agreeing on a dispute settlement mechanism outside of the state justice system, the parties waived their right of access to justice.

The Amsterdam Court of Appeal Decision on the Termination of Intra-EU Arbitral Proceedings

Marc Krestin and Beatrice Van Tornout analysed a 2025 ruling of the Amsterdam Court of Appeal ordering the claimant in an UNCITRAL arbitration brought against Poland under the Poland-Netherlands BIT to cooperate in terminating such arbitration, subject to a hefty daily penalty. The Court considered that both the standing offer to arbitrate made by the host state in the BIT as well as the BIT’s sunset clause had lapsed as a result of the declarationadopted by EU Member States in 2019, according to which, following the CJEU’s ruling in Achmea, the arbitration clauses in intra-EU BITs had to be considered invalid and inapplicable due to their incompatibility with EU law.

According to the authors, this is the first known case where a court actively injuncted a claimant from pursuing an award. The authors noted that, while Dutch courts have historically been reluctant to issue anti-arbitration injunctions, this ruling might pave the slippery slope to politically motivated anti-arbitration injunctions.

The Annulment of “Mixed” Intra-EU Investment Arbitration Awards

2025 witnessed a ruling from the Swedish Supreme Court clarifying the Swedish position on the annulment of awards rendered in so-called “mixed” investment arbitrations (i.e., arbitrations involving both EU and non-EU claimants). Bruno Gustafsson provided an analysis of this ruling.

The ruling is part of several annulment actions against intra-EU awards brought, among others, in Sweden, following the CJEU’s judgment in Komstroy, which held (consistently with Achmea) that the arbitration clause in the Energy Charter Treaty (“ECT”) does not apply to intra-EU investment arbitrations, with the consequence that awards rendered in such arbitrations are highly likely to be invalid.

Gustafsson noted that the Swedish Supreme Court clarified the position of Sweden on the annulment of awards rendered in mixed arbitrations, where the key issue is whether the award should be annulled in its entirety or only to the extent relating to EU investors. The author explained that, according to the Court, the key determining factor as to whether the award is invalid in respect of the part affecting the non-EU investor is the EU investor’s possibility to bring its claim against the host state again, which, in turn, depends on the res judicata effects of the award. The Court held that where a partial annulment would result in the remaining binding portion of the award precluding the re-litigation of the annulled part in another forum, then partial annulment is not possible, and the award must be annulled in its entirety.

The Enforcement of Intra-EU Investment Arbitration Awards

Over the past year, investors have received positive signals from the USA regarding the enforcement of intra-EU investment arbitration awards, while opposite signals have come from the EU.

Enforcement in the USA

Recent court case law from the USA shows that US courts are willing to enforce intra-EU investment awards. In their post, William Kirtley and Sidney Larsen examined the US Court of Appeals for the DC Circuit decision in NextEra v. Spain, in which the Court ruled that US courts have jurisdiction to enforce intra-EU awards under the Foreign Sovereign Immunities Act, despite the Achmea and Komstroy judgments. The authors also discussed later judgments where the Court applied NextEra to reject the respondent states’ intra-EU jurisdictional objections and decide the investors’ petitions for enforcement (Cube Infrastructure v. Spain, Mercuria Energy v. Poland (II), and ACF v. Bulgaria). According to Kirtley and Larsen, these decisions reveal that NextEra eased the jurisdictional path for enforcing intra-EU awards in US courts. Mercuria, however, shows that US courts are unlikely to enforce an award previously annulled on Achmea or Komstroy grounds (in Mercuria, the Swedish Svea Court of Appeal had annulled the award).

The authors concluded that investors seeking to arbitrate intra-EU disputes may be nudged towards arbitration at the International Centre for Settlement of Investment Disputes (“ICSID”), where they can ensure that annulment requests are handled by an ICSID committee, rather than by domestic courts, as it happened in Mercuria.

As reported by Fahira Brodlija, speakers at the 10^th Annual European Federation for Investment Law and Arbitration Conference also highlighted that non-EU courts remain largely unpersuaded by Achmea-based jurisdictional objections, thereby confining the decision’s impact to within the EU. Panellists pointed especially to the USA, where courts have affirmed their jurisdiction to enforce intra-EU awards, suggesting a positive outlook for the future enforcement of intra-EU awards in the country.

Enforcement in the EU

Developments within the EU increasingly point to a negative outlook for investors with regard to the enforcement of intra-EU investment arbitration awards.

In their post, Jeroen de Boer and Busra Ataman discussed a 2025 decision by the European Commission finding that (i) payments made by a Member State pursuant to an intra-EU award would constitute illegal state aid under EU law and (ii) all legal means should be used to prevent such payments from being executed. The decision was issued in relation to the award rendered by an ICSID tribunal in Antin v. Spain, an intra-EU investment arbitration brought under the ECT. The authors explained that the decision could lead to situations where investors seeking to enforce an award outside the EU may be prevented from doing so even where non-EU courts have ordered enforcement, because Member States may refrain from complying with such orders to avoid granting unlawful state aid. According to the authors, the decision further enables the EU to extend the implications of Achmea and Komstroy beyond its borders. However, in doing so, it creates tension between the obligation of the respondent states to comply with enforcement decisions of non-EU national courts of the parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards on the one hand, and the obligation to comply with EU law on the other hand.

Conclusion

2025 witnessed mixed developments for the future of intra-EU investment arbitration. Overall, however, the landscape remains unfavourable for intra-EU investors.

While courts in the USA have shown a willingness to enforce intra-EU arbitration awards, the same cannot be said of courts within the EU. In addition, the European Commission’s decision to characterise payments made by a Member State pursuant to an intra-EU arbitration award as unlawful state aid may further undermine compliance with enforcement orders, including those issued by non-EU courts, as Member States would likely not comply to avoid breaching EU law. A degree of hope nonetheless remains for non-EU investors involved in “mixed” arbitrations, who may benefit from the partial annulment of awards where certain conditions are met, as clarified by the Swedish Supreme Court.

At an earlier stage, namely at the stage of the proceedings themselves, the outlook is equally unfavourable to investors. Should more EU national courts follow the approach adopted by the Amsterdam Court of Appeal, an increasing number of pending intra-EU arbitrations could be terminated as a result of court orders directing claimants to discontinue the proceedings.
Lastly, from a rights-based perspective, the decision of the German Constitutional Court reinforces the view that intra-EU investment arbitration has reached the end of the road, as it recognises that investors continue to enjoy access to a legal framework affording adequate protection of their fundamental rights even if they cannot resort to intra-EU arbitration.