On October 26, 2021, in Republic of Poland v PL Holdings Sarl, the Court of Justice of the European Union (CJEU) issued a decision that, on its face, appeared to be quite narrow. Previously, in its 2018 decision in Achmea BV v Slovak Republic, the CJEU had ruled that an EU member state cannot agree in a treaty to arbitrate its investment disputes with an investor from another EU country. Now, the CJEU has ruled that an EU member state cannot seek to side-step the Achmea judgment by agreeing to the same arbitration after the event through a contract or other conduct.
The risk for companies engaged in business in the EU is if this reasoning becomes applied more broadly. Indeed, the judgment’s reasoning should cause companies to carefully consider the viability of agreeing to arbitrate any dispute within the EU.
