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Slovakia won a dispute with Achmea

12. 03. 2018

The Court of Justice of the EU on 6 March 2018 ruled in favor of the Slovak Republic in a long-standing dispute with the Dutch company Achmea B.V., which is a shareholder of the health insurance company UNION, a.s. Following this verdict, the arbitration award in the proceedings before the German Supreme Court should be set aside. The Slovak Republic should be fully exempt, which means that it will not have to pay to Achmea more than 22 mil. EUR. This is an unprecedented decision with an impact on all bilateral investment treaties concluded between the EU Member States (“intra EU BITs”).

The Court of Justice of the EU stated that "The arbitration clause contained in the agreement on promotion and protection of investment concluded between the Kingdom of Netherlands and Slovakia is not compatible with EU law. This clause excludes disputes that may arise from the application or interpretation of EU law from the judicial review mechanism of the EU law." The Ministry of Finance of the Slovak Republic welcomes this judgment of the Court of Justice of the EU, in which it recognized the legal arguments of Slovakia. These arguments were also supported by the European Commission alongside with some other EU Member States.

In the opinion of the Ministry of Finance of the Slovak Republic , the Court of Justice of the EU confirmed in its decision that the arbitration clause contained in the bilateral investment agreement between Slovakia and the Netherlands was incompatible with EU law to such an extent that an international arbitration tribunal did not have  jurisdiction to rule on the dispute  Achmea vs. the SR. For this reason, the arbitration award should be set aside, according to the Ministry of Finance of the Slovak Republic.

"I believe that this judgment is the final point of this dispute with Achmea. I am glad that the courts have upheld our position and accepted our arguments," Minister of Finance Mr. Peter Kažimír said.

The Court of Justice of the EU further states that, under the respective agreement, the arbitral tribunal concerned should interpret, or even apply  EU law, in particular the provisions on freedom of establishment and the free movement of capital. However, since the jurisdiction of an arbitral tribunal concerned diverges from  jurisdiction of the Slovak and the Dutch courts, that an arbitral tribunal is not a part of the relevant judicial system in Slovakia and the Netherlands, an arbitral tribunal established under the agreement in question cannot be considered as a judicial body of one of the Member States within the meaning of Article 267 TFEU in respect of the preliminary ruling procedure and therefore has no power to turn to the Court of Justice for a preliminary ruling.

The Ministry of Finance of the Slovak Republic welcomes the judgment of the Court of Justice of the EU on the preliminary question. This judgment, in view of the Ministry of Finance, goes beyond the limits of the dispute Achmea vs. the SR and the Court of Justice of the EU has de facto established a precedent for the legal status of all intra EU BITs. This precedent has a significant impact on all EU Member States that will have to deal with this situation in close cooperation with the European Commission. The Ministry of Finance of the Slovak Republic continues to analyze the above-mentioned judgment of the Court of Justice of the EU and its wider impact.

Press Department
Ministry of Finance of the Slovak Republic