Official Journal of the European Union

EN

C series

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C/2025/1222

3.3.2025

(Case C-894/24)

(C/2025/1222)

Language of the case: English

Parties

Applicant: European Commission (represented by: T. Maxian Rusche, L. Armati, Agents)

Defendant: United Kingdom of Great Britain and Northern Ireland

The Applicant claims that the Court should:

—declare that the United Kingdom failed to fulfil its obligations under Articles 49, 52, 56, and 63 TFEU, as well as Article 19(1) TEU, Articles 64(2), 65(1), 66, 75, 107, 108, 215, 267 and 344 TFEU, Article 17 of the Charter and the general principles of autonomy, primacy, unity and effectiveness of Union law, mutual trust and legal certainty, read in conjunction with Article 127 of the EU-UK Withdrawal Agreement (1):

(1)by failing to effectively remove from the legal order the intra-EU bilateral investment treaties (hereafter: intra-EU BITs), including their sunset clauses, so that they cease to produce any legal effects, and, where they have been created, to seek to prevent those effects from crystallising through enforcement of the award, and

(2)in particular, by failing to take the appropriate steps to perfect the offer of bilateral termination contained in the draft plurilateral treaty; and

—order the United Kingdom of Great Britain and Northern Ireland to pay the costs.

Pleas in law and main arguments

By judgment of 6 March 2018 in Achmea (2), the Court of Justice ruled that investor-State arbitration clauses in intra-EU BITs are incompatible with Union law, in particular with Articles 267 and 344 TFEU. The Court has since consistently found such incompatibility with Union law concerning mechanisms for the settlement of investment disputes provided for in intra-EU BITs which include investor-State arbitration clauses.

The intra-EU BITs concluded by the United Kingdom with other Member States as a whole overlap and are incompatible with Union law. As a result, when the counterparts of the United Kingdom acceded to the EU, those intra-EU BITs were, as of the date of accession of those Member States, implicitly terminated in accordance with Article 59 Vienna Convention on the Law of Treaties. Those intra-EU BITs had therefore been terminated before the withdrawal of the United Kingdom from the EU and did not transform into extra-EU BITs at the moment of that withdrawal.

The United Kingdom agreed that in order to implement the judgment in Achmea, it is necessary to effectively remove from the legal order the intra-EU BITs, including their sunset clauses, so that they cease to produce any legal effects. However, when the Member States agreed on the plurilateral treaty for the termination of intra-EU BIT, the United Kingdom decided not to sign and approve that treaty. Therefore, the United Kingdom has to effectively remove from the legal order its intra-EU BIT, including their sunset clauses, bilaterally with the other Member States. Although it has started this process, it has failed to complete it in relation to all Member States concerned. Maintaining on the statute books provisions that are contrary to Union law itself constitutes a failing to fulfil the obligations that flow therefrom.

In addition, there are at least five investor-State arbitration cases initiated on the basis of the intra-EU BIT concluded by the United Kingdom, where either an adverse award has been rendered or where the procedure is on-going. The United Kingdom has to ensure that in such proceedings, arbitral tribunals declare their lack of competence, and that in any event, any award resulting from those proceedings cannot be enforced.

For those reasons, the Commission considers that the United Kingdom has failed to fulfil its obligations under Articles 49, 52, 56, and 63 TFEU, as well as Article 19(1) TEU, Articles 64(2), 65(1), 66, 75, 107, 108, 215, 267 and 344 TFEU, Article 17 of the Charter and the general principles of autonomy, primacy, unity and effectiveness of Union law, mutual trust and legal certainty, read in conjunction with Article 127(1) of the Withdrawal Agreement.

(1) Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (JO 2020, L 29, p. 7).

(2) Judgment of 6 March 2018 in Slovak Republic v Achmea, C-284/16, EU:C:2018:158.

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ELI: http://data.europa.eu/eli/C/2025/1222/oj

ISSN 1977-091X (electronic edition)

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