2025 in Review: What Future for Intra-EU Investment Arbitration?

Key Takeaways

• German court invalidates intra‑EU arbitration awards
• Amsterdam court orders claimant to terminate arbitration, imposes penalties
• Swedish Supreme Court mandates full annulment of mixed awards
• US courts willing to enforce intra‑EU awards under FSIA
• EU Commission treats award payments as illegal state aid

Summary

2025 saw a stark divergence between EU and non‑EU jurisdictions on intra‑EU investment arbitration. The German Constitutional Court and the Amsterdam Court of Appeal effectively nullified arbitration clauses and ordered termination of pending arbitrations, while the Swedish Supreme Court required full annulment of mixed awards. In contrast, U.S. courts have affirmed jurisdiction to enforce such awards, even as the European Commission labeled award payments as illegal state aid. These developments collectively erode the viability of intra‑EU arbitration for investors.

Pulse Analysis

The 2025 rulings of the German Constitutional Court and the Amsterdam Court of Appeal signal a decisive turn away from intra‑EU investment arbitration. By reaffirming the CJEU’s Achmea doctrine, the German court dismissed a constitutional complaint and emphasized that investors must rely on EU law, the Charter, and the ECHR for protection, effectively nullifying arbitration clauses in bilateral treaties. Meanwhile, the Amsterdam court’s injunction—ordering a claimant to halt an UNCITRAL arbitration against Poland and imposing daily fines—demonstrates that national courts are prepared to enforce treaty sunset provisions and curb arbitration proceedings outright.

Across the Atlantic, U.S. tribunals have taken a contrasting stance. Recent decisions by the D.C. Circuit, notably NextEra v. Spain, confirm that the Foreign Sovereign Immunities Act permits enforcement of intra‑EU awards, even when EU jurisprudence questions their validity. However, U.S. courts draw a line at awards already annulled on Achmea or Komstroy grounds, as seen in Mercuria. In Europe, the European Commission’s 2025 finding that award‑related payments constitute illegal state aid adds another layer of risk, potentially blocking compliance with foreign enforcement orders and deepening the divide between EU and non‑EU jurisdictions.

Investors now face a fragmented enforcement landscape that demands strategic recalibration. The Swedish Supreme Court’s clarification on mixed‑investor awards—requiring total annulment when partial relief would preclude re‑litigation—limits the utility of hybrid arbitrations. Practitioners are likely to steer clients toward forums such as the International Centre for Settlement of Investment Disputes, where annulment mechanisms differ from domestic courts. Ultimately, the convergence of national court injunctions, state‑aid restrictions, and divergent transatlantic enforcement trends suggests that intra‑EU arbitration may become a marginal recourse, prompting a shift toward alternative dispute‑resolution structures and heightened reliance on EU judicial mechanisms.