Frankfurt Court of Appeals Upholds Arbitration Clause Again – Eureko v. Slovak Republic, 2nd Round

von Peter Bert

We have covered these proceedings between the Slovak Republic and Eureko, a Dutch health insurance provider before. At the heart of the matter is the issue whether European law rendered arbitration clauses in intra-EU bilateral investment treaties (BITs), that is, in BITs between EU member states, inapplicable. For the first time back in 2012, the Frankfurt Court of Appeals upheld an arbitral award that held the Slovak Republic liable for damages to a Dutch insurance company under the bilateral Netherlands/Czechoslovakia Bilateral Investment Treaty (BIT) of 1991.

This first proceeding then went up to the Federal Supreme Court (Bundesgerichtshof). In September 2013, the Federal Supreme Court, however, was not able to rule on the merits of the Slovak Republic’s application to set the arbitral award aside. It only issued a procedural order because in the meantime, the arbitral proceedings had progressed. Slovakia’s application to set aside dealt with an interim award, but by the time its application reached the Federal Supreme Court, a final award had already been issued. Hence, Slovakia’s application had become inadmissible (unzulässig), as it no longer could demonstrate a need for legal relief (Rechtsschutzbedürfnis). It was because of this final award that the Federal Supreme Court now feels unable to decide on the challenge of the interim award. The decision issued by the Frankfurt Court of Appeals last week now dealt with Slovakia’s challenge to the final award. However, unsurprisingly, the Court of Appeals did stick to its previous assessment and held, again, that the 1991 BIT remained applicable and, in particular, that the arbitration provision contained in the BIT was compatible with European law ...

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