German Federal Supreme Court: Procedural Order in Slovakia v. Eureko

Investment arbitration under investment treaties between EU member states is a hot topic, in particular given the EU Commission’s strong views on the subject: The Commission has intervened in arbitrations in support of the position that the arbitral tribunal lacked jurisdiction to hear the dispute. One such matter was Eureko v. Slovakia, apparently the first case where this issue was brought before a state court, when Slovakia challenged an interim award confirming the jurisdiction of the tribunal in the Frankfurt Court of Appeals (Oberlandesgericht). The Frankfurt court in May 2012 upheld the award (see here and here for comments). The matter proceeded to the German Federal Supreme Court (Bundesgerichtshof) for judicial review (Rechtsbeschwerde). The Federal Supreme court published its order (Beschluss) dated September 19, 2013 on its website earlier this week.

For the time being, the Federal Supreme Court does not take a substantive position, but has issued a procedural order according to which the proceedings currently before it have become redundant: Slovakia’s application has become inadmissible (unzulässig), as it no longer can demonstrate a need for legal relief (Rechtsschutzbedürfnis), given that the arbitral tribunal proceeded in the interim with the arbitral proceedings and on December 7, 2012 issued an award in favour of Eureko, granting, inter alia, damages in the amount of EUR 22,100,000. It is because of this final award that the Federal Supreme Court now feels unable to decide on the challenge of the interim award. For a detailed discussion, please see my post on the Kluwer Arbitration Blog.

Thus, a substantive decision on the underlying question whether intra-EU BIT Arbitration clauses are still operative must wait for Slovakia’s challenge of the final award to reach the Federal Supreme Court. The Federal Supreme Court, in turn, arguably is obliged to refer the matter to the ECJ, so expect to hear more in the years to come.

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Update: A German version of the post is now available at Legal Tribune Online.