(CN) – The European Court of Justice dealt a blow Tuesday to a $27 million judgment that a Dutch insurer won against Slovakia in arbitration.
Netherlands-based Achmea brought the arbitration proceedings in 2008, persuading a panel that Slovakia had infringed the bilateral investment treaty by making it illegal for businesses to distribute profits generated by health insurance activities.
Facing a $27 million verdict, however, Slovakia challenged the action on the grounds that the arbitration clause in the bilateral investment treaty contravened provisions of the the TFEU, short for Treaty of the Functioning European Union.
Invited to weigh in, the Luxembourg-based Court of Justice sided Tuesday with Slovakia.
“Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between member states, such as Article 8 of the BIT, under which an investor from one of those member states may, in the event of a dispute concerning investments in the other member state, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that member state has undertaken to accept,” the ruling states.