Arbitration in Europe – from Dusk till Dawn

Presentation

European arbitration is increasingly facing an existential challenge as a result of evolving EU policies and a series of recent court decisions that have expanded judicial control over arbitral proceedings. A jurisdiction once regarded as firmly supportive of arbitration now appears to be moving toward its dusk.
The turning point came with Achmea, in which the Court of Justice of the European Union (CJEU) held that investor–state arbitration clauses in intra-EU bilateral investment treaties were incompatible with EU law. The legal community is now awaiting the CJEU’s opinion in Rebel v Stankoimport, particularly with regard to the effect of “no-claims” provisions. At the same time, several domestic courts have refused to recognise or enforce foreign arbitral awards on the basis of EU sanctions regimes. European arbitral institutions are encountering increasing difficulties in administering sanctions-related cases, while Western arbitrators and law firms have, in some instances, declined to accept mandates involving sanctioned parties.
Taken together, these developments generate significant legal uncertainty for users who have chosen Europe as a seat of arbitration. They undermine the predictability, neutrality, and enforceability that have traditionally made the region attractive for international dispute resolution. Whether European arbitration can adapt to this changing landscape and experience a new arbitral dawn remains to be seen.