An arbitral tribunal’s finding that it has jurisdiction under Article 26 of the Energy Charter Treaty in a dispute between EU investors and an EU Member State does not manifestly exceed its powers pursuant to Article 52(1)(b) of the ICSID Convention.
On 2 March 2023, an ad hoc committee rendered a decision on a request for an ICSID arbitration to be set aside. The request was initiated by a Maltese investor (Opera Fund) and a Swiss investor (Schwab) against Spain, on the basis of Article 26 of the Energy Charter Treaty. The award in question was issued on 6 September 2019 – six months after the Achmea judgment.
The Arbitral Tribunal had decided it had jurisdiction, except with regard to a tax issue, and ordered Spain to pay the sum of EUR 29,300,000 to the Maltese and Swiss investors for breach of its obligation of fair and equitable treatment under Article 10(1) of the Energy Charter Treaty.
Spain filed an action to set aside the award on the basis of Article 52(1)(b), (d) and (e) of the ICSID Convention. Spain alleged that the Arbitral Tribunal had manifestly exceeded its powers by upholding its jurisdiction in the dispute between two EU investors and an EU Member State. Spain requested that the CJE’s Achmea judgment be applied.
In decision dated 2 March 2023, the ad hoc committee strongly rejected this argument.
According to the ad hoc committee, the CJE’s Achmea decision is not be applicable to ICSID arbitrations.
The question of whether this position will be upheld in light of the Komstroy remains to be seen.