CYIL 2014

ZUZANA JAHODNÍKOVÁ – CYIL 5 ȍ2014Ȏ Secondly, the State, knowing that any result of arbitration proceedings detrimental to the State would markedly affect the State budget, would welcome the possibility to also take part in, for instance, national court proceedings, which tend to be more favourable towards States. Additionally, national court proceedings tend to open new aspects of litigation and could be used in a remedial sense. As an example, the possibility of EU Member States raising an intra-EU BIT objection before national courts could be named. Given the reluctant position of arbitral tribunals towards this highly topical issue, 20 national courts, as parts of the EU judiciary, are more or less obliged to assess the (non-)applicability of BITs, due to EU law discrepancy, more thoroughly. 21 This gives to the Member States an outlook on a new decision which could be deemed to be more in favour of the preceding character of EU law and bring a “remedy” to the allegedly committed breach of EU law supremacy committed by arbitral tribunals. On the other hand, if an arbitral tribunal would decline its jurisdiction on all or on a part of the claims presented by the investor since they would not fall within the categories of disputes covered by a BIT, some investors may tend to initiate proceedings in the host State in order to avoid the lapse of the period for the assertion of claims. This would be the case, for instance when the investor seeks to litigate in front of an arbitral tribunal and relies on the MFN clause to gain access to this forum. In the Austrian Airlines v. the Slovak Republic case the Tribunal declined its jurisdiction since the general scope of the limitations imposed on the MFN clause could not be overcome by the interpretation of the BIT or the possibility to import 20 Arbitral tribunals in general reject the so-called intra-EU BIT objection which aims to challenge the jurisdiction of the tribunals in cases where BITs concluded between Member States are at stake. Most of the tribunals reached the conclusion that BIT arbitration clauses providing for an investor-State dispute resolution mechanism are not at variance with EU law. The reluctance to endorse the argument of the non-applicability of BITs as a result of the existence of EU law has become evident for instance in the Eastern Sugar B.V. v. The Czech Republic (SCC No. 088/2004, Partial Award, 27 March 2007) and the Eureko B.V. v. The Slovak Republic (PCA Case No. 2008-13, Award on Jurisdiction, Arbitrability and Suspension, 26 October 2010) arbitrations. As some authors suggest, until the creation of a suitable platform for the resolution of disputes relating to the protection of investment within the EU, other than that of the Member States’ national court systems; the issue is generally capable of being resolved also by enabling the arbitration tribunals hearing such disputes to submit their preliminary questions to the Court of Justice of the EU. M. Olík, D. Fyrbach, “The Competence of Investment Arbitration Tribunals to Seek Preliminary Rulings from European Courts”, Czech Yearbook of International Law (2011), p. 195. 21 The approach to the subject of intra-EU BITs, as stated in the previous passage, has been maintained also by a national court of a Member State. The Court of Appeal in Frankfurt upheld the Eureko Award on Jurisdiction ( ibid ) by stating that the challenge commenced by the Slovak Republic was unfounded since EU law does not prohibit dispute resolution via investment arbitration between investors and EU Member States. See: Judgement of OLG Frankfurt, 25. Civil Senate, Case No. 26 SchH 11/10, 10. 05. 2012, German language version of the judgement available at: http://www.lareda.hessenrecht.hessen.de/jportal/portal/t/rr/page/bslaredaprod.psml?doc.hl=1&doc. id=JURE120010262%3Ajuris-r00&documentnumber=1&numberofresults=1&showdoccase=1&d oc.part=K¶mfromHL=true#focuspoint ; accessed : 4 April 2012. MILOŠ OLÍK

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