The last three months of 2024 saw significant developments in the fields of international arbitration and investment treaty disputes. Key decisions and legislative reforms took place, once again shaping the arbitration landscape and reinforcing legal certainty in several jurisdictions, with repercussions in the following months.

ECT Modernisation and Termination of Intra-EU BITs.

EU stakeholders body advocates for Member States’ ECT withdrawal

On 12 November 2024, the European Economic and Social Committee (EESC) issued a formal plea urging EU Member States to withdraw from the ECT. The Committee cited the treaty’s incompatibility with the EU’s climate objectives and highlighted risks associated with investor-state dispute settlements (ISDS). The EESC emphasized the need for a coordinated exit strategy to prevent fragmented withdrawals and potential legal uncertainties. These developments mark a significant step in the ongoing discourse surrounding the Energy Charter Treaty and its alignment with global energy transition policies.

Energy Charter Treaty Modernisation

On December 3, 2024, the Energy Charter Conference at the Statutory Session of its 35th Meeting adopted four decisions on modernising the Energy Charter Treaty (ECT). The decisions addresses amendments and changes to the ECT, its Annexes, and other understandings, declarations and decisions with respect to the ECT; and provisions on the entry into force and provisional application of the adopted amendments to the ECT and its Annexes. This long-awaited step in the modernisation of the ECT followed the withdrawal of the EU and several of its Member States from the ECT. The modernised ECT and its annexes are set to provisionally apply from September 3, 2025. The reform aims to address contemporary challenges in energy investment and dispute resolution while ensuring a more sustainable and legally sound framework for investors and states alike.

EU Commission Referral of the UK to the CJUE for failing to adopt the Termination Agreement

On December 15, 2024, the European Commission referred the United Kingdom to the Court of Justice of the European Union (CJUE) over its failure to terminate former intra-EU Bilateral Investment Treaties (BITs). This step underscores the EU’s strong commitment to ensuring compliance with its legal framework and removing outdated treaties that are no longer compatible with EU law. According to the European Commission, the UK had an obligation to terminate all former intra-EU BITs following the judgment in Achmea and the adoption of the 2019 Declaration but failed on its obligation by abstaining from signing the Agreement for the termination of Bilateral Investment Treaties between the Member States of the European Union in May 2020. The UK instead unilaterally terminated the last BITs with some EU Member States, namely Bulgaria, Czechia, Croatia, Lithuania, Poland and Slovenia, triggering the commencement of the Commission infringement procedure. Most recently, the Commission continued pursuing the infringement procedure, escalating it from the administrative phase to the judicial phase, under Article 87 of the Withdrawal Agreement due to the UK Government failure to coordinate the termination of the former intra-EU BITs (currently extra-EU BITs) with the Commission.

Enforcement of Intra-EU Awards

US Court of Appeals refuses rehearing of Spain’s ECT enforcement request

On 2 December 2024, the US Court of Appeals for the District of Columbia rejected Spain’s request for an en banc rehearing of its arguments against the enforcement of the three intra-EU ECT awards in the US. The Court of Appeals did not reason its decision. In August 2024, the three appellate judges held that the issue was whether a valid arbitration agreement existed not whether a particular dispute falls within the scope of the ECT.

Spain applies for stay of enforcement to seek Supreme Court review

Following the US Court of Appeals decision from 2 December in the joint cases NextEra v. Spain, 9REN v. Spain and Blasket v. Spain, the Kingdom of Spain filed a joint status report in four cases pending before the District Court for the District of Columbia. In the respective report, the Kingdom of Spain asked the Court to continue staying the pending enforcements because it will file a writ of certiorari before the US Supreme Court. Spain mentioned it will ask the Supreme Court to review the US Court of Appeals judgement holding that the FSIA’s arbitration exception provides jurisdiction to confirm arbitral awards rendered against Spain and in favour of EU nationals, pursuant to the Energy Charter Treaty (“ECT”).

EU General Court Rules Against Micula Award Enforcement, Citing Illegal State Aid

On 2 October 2024, the EU General Court rendered one of the most awaited judgements in one of the longest investment disputes in Europe, Micula v. Romania. The General Court sided with the EU Commission and found that Romania would breach EU state aid rules if it enforced the arbitral award favouring the Micula brothers.

Back in 2017 the EU Commission found that the enforcement of an ICSID award in an investment dispute based on an intra-EU BIT violates the EU state rules if the award originated from a claim violating the EU state aid provisions. In 2019, the same EU General Court annulled the Commission decision stating the award concerned matters which happened before Romania acceded to the EU. In 2022, the CJUE annulled the General Court’s judgement and sent it back for reassessment. The General Court held in its October 2024 judgement that upon Romania’s accession to the EU, EU judicial remedies replaced the BIT arbitration processes for member states. It said the CJEU had held that the ICSID Convention was designed to govern bilateral relations similarly to a BIT and did not create third-country rights. The Court concluded the Micula brothers and their companies received economic incentives which were illegal state aid when Romania acceded the EU. Since the award would compensate for illegal state aid the enforcement of the award would be also an illegal state aid incompatible with the TFEU. It should be noted that earlier in 2024, the US Court of Appeals for the District of Columbia upheld the enforcement of the same ICSID award.

SCC’s New Policy on Intra-EU Investment Disputes

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) introduced a new policy regarding intra-EU investment treaty disputes. Under this policy, unless the disputing parties agree otherwise, the SCC Board will no longer select a tribunal seat within the EU, including Stockholm, for intra-EU proceedings. This move seeks to restore the enforceability of intra-EU awards under SCC Arbitration Rules, responding to concerns raised in cases such as Green Power in which the choice of the SCC’s Rules, and thus Stockholm as the arbitral seat, lead arbitral tribunals to reject their own jurisdiction on the grounds that Achmea has declared ISDS clauses in intra-EU Bits to be invalid and unenforceable.

ISDS Reform and Legislative Reform

UNCITRAL WGIII on the ISDS Reform 49th session

Between 23-27 September 2024 took place the 49th session of the UNCITRAL Working Group III (WGIII) on the Reform of the ISDS system. During this session, the WGIII discussed several issues, among which the adoption of the ‘Draft statute of a standing mechanism for the resolution of international investment disputes’ and some procedural and cross-cutting issues. Regarding the draft statute, the WGIII focused on the draft statute’s provisions on the appellate mechanism referred to as the ‘Appellate Tribunal’. The principal topics selected were the selection and appointment of the members of the Tribunals (qualifications and requirements; composition of the tribunals; candidates’ nominations and the establishment of a Selection Committee to screen the candidates). Regarding the procedural and cross-cutting issues, the WGIII discussed the possibility of including draft provisions on counterclaims to enhance procedural efficiency and avoid multiple proceedings; on third-party funding regulation; on amicable settlement; on damage assessment and compensation. The last discussed topic was the Multilateral Instrument on the ISDS Reform (MIIR).

Other relevant arbitration proceedings and awards

ICSID Tribunal Rules Against Germany in Landmark Intra-EU ECT Dispute

On 18 December 2024, an ICSID tribunal issued the first investment award finding Germany liable for breaching its obligations under the ECT in an intra-EU dispute. The Austrian investors claimed Germany breached its obligations under the ECT when it adopted regulatory changes in 2012 impacting their investments in the wind energy projects in the German North Sea. In July 2020 the tribunal unanimously rejected Germany’s intra-EU objection. The award remains unpublished, but it is known that the arbitrator appointed by the respondent issued a dissent.

Tribunal Constituted in Eurohold v. Romania

On 4 November 2024, the tribunal in Eurohold v. Romania was finally constituted with the appointment of Mr. Daniel Bethlehem as chair. This is the first case based on a terminated intra-EU BIT (Romania-Bulgaria BIT) following the signature of the Termination Agreement of the intra-EU BITs and their sunset clauses in 2020. The claimants argued Romania breached its obligations under the Romania-Bulgaria BIT when the Romanian Financial Services Agency withdrew the insurance operating license of their Romanian subsidiary, Eurocoins Romania and started bankruptcy proceedings against Eurocoins.

Intra-EU objection upheld by ICSID tribunals

On 11 October 2024, two ICSID tribunals in SAPEC v. Spain and ASF v. Spain rendered their awards upholding the intra-EU jurisdictional objection. These are the first two ICSID tribunals dismissing the investors’ claims due to their intra-EU character. The Spanish Ministry of Environment mentioned that both tribunals relied in their interpretation on the ECT’s REIO clause and interpreted the ECT pursuant to Articles 31 and 32 VCLT. Although the Spanish State Defense Agency relied on the Komstroy precedent, the tribunals did not consider the case as the primary argument for the dismissal. It should be noted that both cases were chaired by the same president.

EU Initiates Arbitration Over UK’s Sandeel Fishing Ban

On 25 October 2024, the European Union requested the establishment of an arbitration tribunal under the dispute settlement mechanism of the EU–UK Trade and Cooperation Agreement (TCA). This action challenges the United Kingdom’s decision to prohibit sandeel fishing in English and Scottish waters, a measure effective since March 26, 2024. The EU contends that the UK’s ban prevents EU vessels from operating in this fishery and questions its compatibility with the TCA. Initial consultations in April 2024 failed to yield a mutually agreeable solution, prompting the EU to advance to arbitration proceedings. The tribunal will assess whether the UK’s measures align with TCA obligations, considering factors such as non-discrimination, proportionality, and reliance on the best available scientific evidence. This case marks a significant test of the post-Brexit dispute resolution framework between the EU and the UK.

Events & Others

ICSID’s Annual Report: Record Case Administration

The International Centre for Settlement of Investment Disputes (ICSID) released its annual report for FY2024 (from July 1, 2023 to June 30, 2024), highlighting a record number of cases administered.

• A total of 341 cases were administered, marking the second-highest case volume in ICSID’s history.
• ICSID oversaw 17 cases under UNCITRAL and other non-ICSID rules.
• 58 new cases were registered under ICSID’s procedural rules.
• 88 cases were concluded, reflecting a strong commitment to time and cost efficiency.
• A record 49 nationalities were represented among tribunal appointments.

These figures underscore ICSID’s continued prominence in the resolution of investor-state disputes and its efforts to streamline case management and decision-making processes.

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The last quarter of 2024 was marked by critical reforms, significant arbitral decisions, and regulatory advancements in the field of investment arbitration. From modernizing the ECT to strengthening procedural clarity in arbitration through national reforms, the developments signalled a dynamic and evolving dispute resolution landscape as we moved into 2025.

We are closely monitoring these changes to assess their long-term impact on global investment and arbitration frameworks. Over the past year, our readership has continued to expand, and we are grateful for the insightful contributions from our authors, as well as the engagement of scholars and practitioners who have shared their expertise.

Looking ahead to 2025, we remain committed to delivering timely and thought-provoking content on investment law and arbitration. We welcome submissions from all those interested in sharing their perspectives—be sure to check our submission guidelines if you’d like to see your work featured on the EFILA Blog!

***This quarterly review was prepared by Ioana Bratu and Daniela-Olivia Ghicajanu***