The second quarter of 2025 was another active and transformative period for international investment law and arbitration, particularly in the European context. Several significant developments occurred in the context of the ongoing modernization (and fragmentation) of the Energy Charter Treaty (ECT); the enforcement of intra-EU arbitral awards in United States and Europe; and the European Union’s negotiations of free trade agreements with the United Kingdom and the United Arab Emirates.
The Modernization of the Energy Charter Treaty
The Energy Charter Treaty (ECT) contracting states had until 3 March 2025 to opt out of the provisional application of the ECT which will take place from 3 September 2025. In April and May, the Republic of Latvia, the Czech Republic, and the Kingdom of Netherlands followed Estonia, Finland, Lichtenstein, Belgium, and Lithuania in their intention not to be bound by the provisional application of the amendments to the ECT adopted in late December 2024.
The UK withdrawal from the ECT took effect on 27 April 2025. This marks the final step in a process that began last year when the UK Government gave written notification of its withdrawal from the ECT arguing the “failure of efforts to align [the ECT] with net zero” as its primary reason. Under the sunset provision (Article 47(3) ECT), however, the UK would remain bound by the obligations under the ECT for another 20 years following the withdrawal, potentially exposing the UK to potential lawsuits from fossil fuel investments until 2045.
Nonetheless, on 28 April 2025, the UK in a legal opinion commissioned by the Trade Justice Movement and Global Justice Now has examined the feasibility and effectiveness of the UK entering into “inter se” agreements with other previous contracting states to disapply the treaty’s sunset clause. Notably, Part II of the opinion finds that such agreements are feasible under UK law, do not require new legislation, and are unlikely to face successful challenges from other ECT parties or investors..However, the drafters recognise that objections might arise when the UK notifies the parties of the intention to delete inter se the sunset clause, most likely from a party that resisted the ECT’s modernisation. While the agreement would likely be valid under international treaty law, there remains a medium risk that arbitral tribunals could still assert jurisdiction and a high risk that any resulting awards, particularly under the ICSID Convention,would be enforceable in UK and foreign courts. It thus remains uncertain how future ECT tribunals would assess the legality and impact of such agreements under international law. Overall, the opinion assesses the risk of diplomatic or arbitral challenges as low, in the absence of any known opposition.
Enforcement of Intra-EU Awards in the United States District Courts
On 4 June 2025, Blasket Renewable Investments, a Delaware entity which had acquired the rights to at least three ECT awards rendered in favour of EU and non-EU investors, confirmed that Spain has complied with the United States District Court for the District of Columbia (DDC)’s order for the enforcement of a €23.5 million ICSID award in JGC Holdings Corporation (formerly JGC Corporation) v. Kingdom of Spain (ICSID Case No. ARB/15/27). This marks a historic development in the enforcement of investor-state awards against Spain, as it represents Spain’s first payment of an award rendered under the ECT in connection with the so-called Spanish Renewable Energy Saga.
On 5 June 2025, the US Supreme Court decided the case in CC/Devas (Mauritius) LTD. et al. v. Antrix Corp. LTD et al. holding that the personal jurisdiction under the Foreign Sovereign Immunities Act (1976) exists when subject matter jurisdiction exists (existing whenever an immunity exception in 28 U.S.C. § 1605(a) applies) and service is proper. No. 23-1201 (U.S. 2025). In other words, the the US Supreme Court clarified that the “text and structure of the FSIA demonstrate” that “no ‘minimum contacts’ over and above the contacts already required by the [FSIA]’s enumerated exceptions” (which are instead generally required in all civil suits in front of US federal or state’s courts). No. 23-1201, slip op. at 7 (U.S. 2025). The judgment in Antrix has an impact also in the enforcement of intra-EU awards in front of the DDC because it simplifies the EU investors’ burden of proving that jurisdiction under the FSIA so-called arbitration exception 28 U.S.C. § 1605(a)(6).
On 6 June 2025, two EU investors petitioned the United States District Court for the District of Columbia to enforce a €18,222,565.35 arbitral award (the “Award”), plus interest, issued on September 14, 2020, in the ICSID case Beteiligungs GmbH, ESPF Nr. 2 Austria Beteiligungs GmbH, and InfraClass Energie 5 GmbH & Co. KG v Italian Republic (ICSID Case No. ARB/16/5). Similarly, on 11 June 2025, Japan’s Eurus Energy Holdings Corporation petitioned the US District Court for the District of Columbia to enforce the awards rendered in the ICSID case Eurus Energy Holdings Corporation v Spain (ICSID Case No. ARB/16/4) (ICSID annulment proceeding pending).
In this sense, the United States of America has proved to be an investor-friendly venue for the enforcement of (intra-EU) awards against foreign sovereigns with sizable assets located within its territory. Yet, foreign sovereigns have not easily conceded defeat to investors. Notably, in the context of intra-EU award, EU member states, in light of the CJEU’s judgment in Achmea and Komstroy, have tried to impose the principle of invalidity of state consent in ISDS clauses in the DDC. In that spirit, Spain has petitioned the U.S. Supreme Court for a writ of certiorari, asking it to consider a critical question: “[w]hether the arbitration exception under the Foreign Sovereign Immunities Act (FSIA) permits U.S. courts to exercise jurisdiction over a foreign state without first determining that the state actually consented to arbitrate disputes with the specific plaintiff.” The request of certiorari stems from the decision of the U.S. Court of Appeals for the D.C. Circuit in NextEra Energy v. Spain that, in August of last year, held that the DDC has jurisdiction to enforce arbitral awards issued in intra-EU disputes under ECT. No. 23-7031, 2024 WL 3837484 (D.C. Cir. Aug. 16, 2024).
Intra-EU Disputes Case Law Update
Recent European court rulings continue to reinforce the legal boundaries surrounding intra-EU investment arbitration in light of the CJEU judgments in Achmea and Komstroy. Notably, both Dutch and Swedish courts have issued judgments emphasizing the incompatibility of investor-state arbitration clauses with EU law, resulting in significant implications for investors and arbitral enforcement.
On 22 April 2025 the Gerechtshof Amsterdam (Amsterdam Court of Appeal) ordered Dutch investor LC Corp to withdraw from its intra-EU arbitration proceeding against Poland, initiated in December 2020 under the (now terminated) Netherlands-Poland BIT. Interestingly, the Gerechtshof found that it had jurisdiction under the Recast Brussels Regulation since LCC is Dutch-incorporated, and the arbitration exception did not apply in this context. Relying on Achmea and the subsequent 2019 EU Declarations on the Legal Consequences of the Achmea Judgment and on Investment Protection in the European Union, the court held that arbitration clauses in intra-EU BITs are invalid, and LCC knowingly acted contrary to EU law by initiating arbitration after the BIT was denounced. By continuing arbitration, LCC violated EU law, burdened Poland with unnecessary legal costs, and risked unlawful state aid through a possible arbitral award, at the moment of enforcement. In this vein, the Gerechtshof emphasized that LCC was not left without recourse, as it could pursue claims in Polish courts, with EU and ECHR mechanisms available to address the issues raised.
On 26 May 2025, the Högsta Domstolen (Swedish Supreme Court) partially upheld the SCC arbitral award in Festorino Invest Limited and others v Poland. The case centered on a dispute under the ECT. The claimants, investors from Cyprus, Austria, Switzerland, and the Czech Republic, owned Blue Gas N’R’G Holding, a Polish company that managed several subsidiaries developing small-scale natural gas combined heat and power (CHP) projects across Poland. They alleged that Polish authorities, particularly the Ministry of the Environment and regional mining offices, engaged in arbitrary and discriminatory administrative conduct, causing prolonged delays in licensing processes. These delays purportedly led to the bankruptcy of one subsidiary and the shutdown of others, effectively dismantling their investment. The claimants sought approximately PLN 373 million in damages, citing breaches of the ECT, including violations of fair and equitable treatment, national treatment, and the umbrella clause. The Tribunal dismissed all claims, finding no evidence of undue delay, ill intent, or discriminatory actions by Polish authorities and ordered co-claimants, the Swiss national and four EU-nationals, to pay costs to Poland. The Högsta Domstolen confirmed that the invalidity of the ISDS clause in Article 26 of the ECT, established in the Komstroy, does not apply to the Swiss national as he is not a national of one of the Member States. However, the Court found that the award was not enforceable against the four EU co-claimants because under Achmea and Komstroy, intra-EU arbitration agreements are invalid, and tribunals lack jurisdiction over such disputes, including the authority to issue costs orders.
The UNCITRAL Working Group III
On 7–11 April 2025, during its 51st session (second part) held in New York, UNCITRAL Working Group III continued its discussions on the establishment of a Multilateral Investment Court (MIC) and addressed various procedural and cross-cutting issues.
Other Significant Developments
On April 9, 2025, the EU and UAE agreed to launch negotiations on a free trade agreement and agreed “on a roadmap, with substantive work set to begin as early as in June 2025.” The first meeting is expected to set the stage for future cooperation by focusing on “reducing tariffs on goods and facilitating services, digital trade and investment flows. Talks will also explore ways to boost trade in strategic sectors, such as renewable energy, green hydrogen and critical raw materials.”
On 19 May 2025, in London, leaders of the United Kingdom and of the European Union held the first UK-EU Summit agreeing in a new strategic partnership among them. The agreement aims to a reset in the relationship between the UK and EU, after Brexit, and create a renewed agenda for European Union-United Kingdom cooperation both in the field of security and trade.
What’s New @ EFILA
This quarter was very productive for EFILA. On 29 April 2025, Herbert Smith Freehills hosted EFILA’s 10th annual conference in London, centering on the next decade of investment treaty arbitration. The agenda featured in-depth panels examining recent EU and global arbitration developments, the shifting centre of gravity in arbitration away from Europe, and the impact of U.S. trade and investment policies. The attendees’ profiles were just as interesting as the topics, including leading practitioners, policymakers, and experts who engaged in strategic discussions on emerging arbitration trends and geopolitical influences shaping investment dispute resolution.
As to our editorial work, the EFILA Blog had the pleasure to publish blog posts in a variety of fields in the past quarter.
Horatiu Dumitru authored the “Report from the Young EFILA Panel: ‘The Next 10 Years of Investor‑State Dispute Settlement’”. The article reports on a forward‑looking panel held on April 30, 2025, at Gibson Dunn in London, where emerging practitioners analyzed how Investor‑State Dispute Settlement (ISDS) is likely to evolve over the next decade. Discussions centered on identifying challenges and opportunities, such as procedural reforms, technological innovation, and shifting geopolitical dynamics, that will shape the future of investor‑state arbitration.
“VARbitration: Advocate General Ćapeta Sees the European Court of Justice as the Ultimate Referee,” by Édouard Bruc and Ben Williams, examines Advocate General Tamara Ćapeta’s Opinion in Case C‑600/23 concerning CAS (Court of Arbitration for Sport) awards. The post highlights the reasoning according to which, because CAS arbitration is mandatory and self-enforcing, full judicial review, including access to EU courts and the ECJ, is required to uphold the EU principle of effective judicial protection. The post comments on the expansive interpretation of the New York Convention’s public policy exception, arguing it could undermine both the finality of CAS awards and established international arbitration norms.
In “Hot Topics in EU Economic Security: Challenges & Opportunities,” Kubra Bayramova and Ana Cheminot cover insights from the 9 April 2025 EFILA panel held during Paris Arbitration Week. The post explains how “economic security” has become a key, albeit politically contested, pillar of EU strategy, with member states diverging on definitions and approaches. It also explores the legal implications of the EU’s push for strategic autonomy, including investment screening, trade fragmentation, and arbitration trends driven by geopolitical risks.
In our interview series, we had the pleasure of welcoming Mihaela Apostol, an independent counsel and arbitrator based in London who is dual-qualified as an Avocat in Romania and Solicitor in England & Wales, co-founder and moderator of ArbTech. She shared her belief that true value in arbitration comes from deep specialisation, ideally no more than three fields, which enhances both strategic legal advice and tribunal efficiency. Mihaela also offered practical tips on legal drafting, emphasising audience‑focused clarity, concise structure, and narrative framing, and reminded us that “everything is advocacy,” from emails to panel introductions.
And remember that you are always welcome to contribute to the Blog yourself.
*** This quarterly review was prepared by Cristian Gallorini, Guofang Xue, and Ioana Bratu ***