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id: 10219

id:10219

AGREEMENT
for the termination of Bilateral Investment Treaties between the Member States of the European Union

Official Journal of the European Union UE L. 2020 No. 169, p. 1

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Section 1. Definitions

Article 1. Definitions

For the purposes of this Agreement, the following definitions shall apply:

(1) "Bilateral Investment Treaty" means any investment treaty listed in Annex A or B;

(2) "Arbitration Proceedings" means any proceedings before an arbitral tribunal established to resolve a dispute between an investor from one Member State of the European Union and another Member State of the European Union in accordance with a Bilateral Investment Treaty;

(3) "Arbitration Clause" means an investor-State arbitration clause laid down in a Bilateral Investment Treaty providing for Arbitration Proceedings;

(4) "Concluded Arbitration Proceedings" means any Arbitration Proceedings which ended with a settlement agreement or with a final award issued prior to 6 March 2018 where:

(a) the award was duly executed prior to 6 March 2018, even where a related claim for legal costs has not been executed or enforced, and no challenge, review, set‐aside, annulment, enforcement, revision or other similar proceedings in relation to such final award was pending on 6 March 2018, or

(b) the award was set aside or annulled before the date of entry into force of this Agreement;

(5) "Pending Arbitration Proceedings" means any Arbitration Proceedings initiated prior to 6 March 2018 and not qualifying as Concluded Arbitration Proceedings, regardless of their stage on the date of the entry into force of this Agreement;

(6) "New Arbitration Proceedings" means any Arbitration Proceedings initiated on or after 6 March 2018;

(7) "Sunset Clause" means any provision in a Bilateral Investment Treaty which extends the protection of investments made prior to the date of termination of that Treaty for a further period of time.

Section 2. Provisions regarding the termination of bilateral investment treaties

Article 2. Termination of Bilateral Investment Treaties

1. Bilateral Investment Treaties listed in Annex A are terminated according to the terms set out in this Agreement.

2. For greater certainty, Sunset Clauses of Bilateral Investment Treaties listed in Annex A are terminated in accordance with paragraph 1 of this Article and shall not produce legal effects.

Article 3. Termination of possible effects of Sunset Clauses

Sunset Clauses of Bilateral Investment Treaties listed in Annex B are terminated by this Agreement and shall not produce legal effects, in accordance with the terms set out in this Agreement.

Article 4. Common provisions

1. The Contracting Parties hereby confirm that Arbitration Clauses are contrary to the EU Treaties and thus inapplicable. As a result of this incompatibility between Arbitration Clauses and the EU Treaties, as of the date on which the last of the parties to a Bilateral Investment Treaty became a Member State of the European Union, the Arbitration Clause in such a Bilateral Investment Treaty cannot serve as legal basis for Arbitration Proceedings.

2. The termination in accordance with Article 2 of Bilateral Investment Treaties listed in Annex A and the termination in accordance with Article 3 of Sunset Clauses of Bilateral Investment Treaties listed in Annex B shall take effect, for each such Treaty, as soon as this Agreement enters into force for the relevant Contracting Parties, in accordance with Article 16.

Section 3. Provisions regarding claims made under bilateral investment treaties

Article 5. New Arbitration Proceedings

Arbitration Clauses shall not serve as legal basis for New Arbitration Proceedings.

Article 6. Concluded Arbitration Proceedings

1. Notwithstanding Article 4, this Agreement shall not affect Concluded Arbitration Proceedings. Those proceedings shall not be reopened.

2. In addition, this Agreement shall not affect any agreement to settle amicably a dispute being the subject of Arbitration Proceedings initiated prior to 6 March 2018.

Article 7. Duties of the Contracting Parties concerning Pending Arbitration Proceedings and New Arbitration Proceedings

Where the Contracting Parties are parties to Bilateral Investment Treaties on the basis of which Pending Arbitration Proceedings or New Arbitration Proceedings were initiated, they shall:

(a) inform, in cooperation with each other and on the basis of the statement in Annex C, arbitral tribunals about the legal consequences of the Achmea judgment as described in Article 4; and

(b) where they are party to judicial proceedings concerning an arbitral award issued on the basis of a Bilateral Investment Treaty, ask the competent national court, including in any third country, as the case may be, to set the arbitral award aside, annul it or to refrain from recognising and enforcing it.

Article 8. Transitional measures related to Pending Arbitration Proceedings

1. Where an investor is party to Pending Arbitration Proceedings and has not challenged before the competent national court the measure that is subject to the dispute, the transitional measures of Articles 9 and 10 apply.

2. When a final award finding that the measure in dispute does not fall under the Bilateral Investment Treaty concerned, or does not violate that Bilateral Investment Treaty, is issued before the date of entry into force of this Agreement, the transitional measures referred to in this Article shall not apply.

3. Where Pending Arbitration Proceedings include counter-claims by the Contracting Party concerned, this Article and Articles 9 and 10 shall apply mutatis mutandis to those claims.

4. The Contracting Party concerned and the investor may also agree on any other appropriate resolution of the dispute, including an amicable resolution, provided the solution complies with Union law.

Article 9. Structured dialogue for Pending Arbitration Proceedings

1. An investor party to Pending Arbitration Proceedings may ask the Contracting Party involved in those proceedings to enter into a settlement procedure pursuant to this Article, on condition that:

(a) the Pending Arbitration Proceedings have been suspended pursuant to a request to that effect by the investor, and

(b) if an award has already been issued in the Pending Arbitration Proceedings, but not yet definitively enforced or executed, the investor undertakes not to start proceedings for its recognition, execution, enforcement or payment in a Member State or in a third country or, if such proceedings have already started, to request that they are suspended.

The Contracting Party concerned shall reply in writing within two months in accordance with paragraphs 2 to 4.

A Contracting Party may also ask an investor involved in Pending Arbitration Proceedings to enter into a settlement procedure pursuant to this Article. The investor may accept in writing within two months provided that the conditions set out in points (a) and (b) of the first subparagraph are fulfilled.

The reply by the Contracting Party concerned or the acceptance by the investor must state, where relevant, that the settlement procedure is thereby initiated.

2. A settlement procedure may only be initiated within six months from the termination, pursuant to Article 2 or 3 of this Agreement, of the Bilateral Investment Treaty on the basis of which the Pending Arbitration Proceedings were initiated, by making a request pursuant to paragraph 1 of this Article.

3. A settlement procedure shall be entered into if the CJEU or a national court has found, in a judgment that has become final, that the State measure being contested in the proceedings referred to in paragraph 1 violates Union law.

4. A settlement procedure shall not be entered into if the CJEU or a national court has found, in a judgment that has become final, that the State measure being contested in the proceedings referred to in paragraph 1 does not violate Union law. The same applies if the European Commission has adopted a decision which has become definitive finding that the measure does not violate Union law.

5. If court proceedings, the object of which is to obtain a judgment as referred to in paragraph 3 or 4, are pending, the Contracting Party concerned shall in its reply pursuant to paragraph 1 inform the investor of that fact. The initiation of the settlement procedure shall be suspended until the court proceedings have resulted in a judgment that has become final. The Contracting Party concerned shall inform the investor within two weeks of such judgment. The same applies if the European Commission has adopted a decision which has not yet become definitive.

6. A settlement procedure may be entered into if a potential violation of Union law caused by the State measure being contested in the proceedings referred to in paragraph 1 can be identified and neither paragraph 3 nor 4 applies.

7. The settlement procedure shall be overseen by an impartial facilitator with a view to finding between the parties an amicable, lawful and fair out-of-court and out-of-arbitration settlement of the dispute which is the subject of the Arbitration Proceedings. The settlement procedure shall be impartial and confidential. Each party to the settlement procedure shall have the right to make its views known.

8. The facilitator shall be designated by common agreement of the investor and the Contracting Party concerned acting as respondent in the relevant Pending Arbitration Proceedings. He/she shall be chosen from persons whose independence and impartiality are beyond doubt and who possess the necessary qualifications including in-depth knowledge of Union law. He/she shall not be a national of either the Member State in which the investment took place or the home Member State of the investor and shall not be in a position of conflict of interests. If a common agreement on the choice of the impartial facilitator is not reached within one month of the settlement procedure being initiated, the investor or the Contracting Party concerned acting as respondent in the relevant Pending Arbitration Proceedings shall ask the Director General of the Legal Service of the European Commission to designate a former Member of the Court of Justice of the European Union who shall appoint, after having consulted each party to the dispute, a person fulfilling the criteria set out in this paragraph. An indicative fee schedule for the facilitator is laid down in Annex D.

9. The facilitator shall ask the investor and the Member State in which the investment took place to provide written submissions within two months of his/her appointment. When the settlement procedure was initiated on the basis of paragraph 6, the facilitator may ask the European Commission to provide, within two months, advice on the relevant issues related to Union law.

10. The facilitator shall in an impartial manner organise the settlement negotiations and support the parties with a view to reaching an amicable settlement within six months of his/her appointment, or such longer period as the parties may agree. The parties shall participate in good faith in that process. In doing so, he/she shall take due account of rulings by the CJEU or a national court as well as of decisions by the European Commission which have become definitive, and the advice referred to in the last sentence of paragraph 9. The facilitator shall also take into consideration the actions taken in order to comply with the relevant rulings of the CJEU by the Contracting Party concerned and the case-law of the CJEU on the extent of reparations of damages under Union law.

11. If an amicable settlement is not reached within the timeframe referred to in paragraph 10, the parties to the procedure shall propose within one month a settlement acceptable to them. Each proposal shall be communicated in writing without undue delay to the other party to the procedure for observations. The facilitator shall organise further negotiation on that basis, with the aim of finding a mutually acceptable solution to the dispute.

12. Within one month from the communication of the proposals and taking into account the further exchange of views referred to in paragraph 11, the facilitator shall make a final written proposal for an amended amicable settlement. Within one month from receipt of that proposal, each party to the procedure shall decide whether to accept the final proposal and communicate that decision in writing to the other party.

13. If a party to the procedure does not accept the final proposal, it shall provide a written explanation of the reasons for doing so to the other party to the procedure without undue delay, where necessary removing any confidential information. Each party to the procedure shall bear its own costs and half of the fees for the facilitator and related to logistics of the settlement procedure.

14. If an agreement on the terms of the settlement is reached, the parties to the procedure shall accept those terms in a legally binding manner without undue delay. The terms of the settlement:

(a) must include:

     (i) an obligation for the investor to withdraw the arbitration claim or renounce execution of an award already issued, but not yet definitively enforced or executed, or, where relevant, to take into account any compensation previously paid in the Pending Arbitration Proceedings with a view to avoiding double‐compensation, and

     (ii) a commitment to refrain from initiating New Arbitration Proceedings, and

(b) may include a waiver of all other rights and claims related to the measure that is the subject of the proceedings referred to in paragrapp 1.

Article 10. Access to national courts

1. An investor shall be entitled to access the judicial remedies under national law against a measure contested in Pending Arbitration Proceedings even if national time limits for bringing actions have expired, within the time limits referred to in paragraph 2, on condition that:

(a) the investor withdraws the Pending Arbitration Proceedings and waives all rights and claims pursuant to the relevant Bilateral Investment Treaty or renounces execution of an award already issued, but not yet definitively enforced or executed, and commits to refrain from instituting New Arbitration Proceedings:

     (i) within six months from the termination of the Bilateral Investment Treaty on the basis of which the Pending Arbitration Proceedings were initiated, where the structured dialogue pursuant to Article 9 was not used;

     (ii) within six months from the date on which the Contracting Party concerned rejects the investor's request to enter into a structured dialogue pursuant to Article 9(1) and (6); or

     (iii) within six months from the date on which the last of the parties communicates its decision pursuant to Article 9(12), where the structured dialogue pursuant to Article 9 was used;

(b) access to the national court will be used to make a claim based on national or Union law; and

(c) where relevant, no settlement agreement was reached as a result of the structured dialogue pursuant to Article 9.

2. National time limits to access national courts pursuant to paragraph 1 shall be deemed to run from the date on which the investor, as applicable, withdraws from the relevant Pending Arbitration Proceedings or renounces execution of an award already issued, but not yet definitively enforced or executed, and commits to refrain from instituting New Arbitration Proceedings in accordance with point (a) of paragraph 1 and shall have the duration prescribed by the applicable national law.

3. For greater certainty, the provisions of Bilateral Investment Treaties terminated pursuant to this Agreement shall not be considered as part of the applicable law in proceedings brought before a national court pursuant to this Agreement.

4. For greater certainty, the provisions of this Article shall not be construed as creating any new judicial remedies which would not be available to the investor under the applicable national law.

5. The national courts shall take into account any compensation previously paid in the Pending Arbitration Proceedings with a view to avoiding double compensation.

Section 4. Final provisions

Article 11. Depositary

1. The Secretary-General of the Council of the European Union shall act as Depositary of this Agreement.

2. The Secretary-General of the Council of the European Union shall notify the Contracting Parties of:

(a) any decision on provisional application in accordance with Article 17;

(b) the deposit of any instrument of ratification, acceptance or approval in accordance with Article 15;

(c) the date of entry into force of this Agreement in accordance with Article 16 (1);

(d) the date of entry into force of this Agreement for each Contracting Party in accordance with Article 16 (2)

3. The Secretary General of the Council of the European Union shall publish the Agreement in the Official Journal of the European Union.

Article 12. Annexes

1. The annexes to this Agreement constitute an integral part thereof.

2. If a Bilateral Investment Treaty listed in Annex A is not in force on the date on which this Agreement enters into force for the relevant Contracting Parties, but investments made prior to such termination may still fall within the scope of its application by virtue of its Sunset Clause, it shall be considered as a Bilateral Investment Treaty listed in Annex B.

Article 13. Reservations

No reservations shall be made to this Agreement.

Article 14. Dispute settlement

1. Disputes between the Contracting Parties concerning the interpretation or application of this Agreement shall, if possible, be settled amicably.

2. If a dispute between the Contracting Parties cannot be settled amicably within 90 days, the dispute shall, on the request of one of the Contracting Parties to the dispute, be submitted to the CJEU in accordance with Article 273 TFEU.

3. For greater certainty, this Article constitutes a special agreement between the Contracting Parties within the meaning of Article 273 TFEU.

Article 15. Ratification, approval or acceptance

This Agreement shall be subject to ratification, approval or acceptance.

The Contracting Parties shall deposit their instruments of ratification, approval or acceptance with the Depositary.

Article 16. Entry into force

1. This Agreement shall enter into force 30 calendar days after the date on which the Depositary receives the second instrument of ratification, approval or acceptance.

2. For each Contracting Party which ratifies, accepts or approves it after its entry into force in accordance with paragraph 1, this Agreement shall enter into force 30 calendar days after the date of deposit by such Contracting Party of its instrument of ratification, approval or acceptance.

3. When a Contracting Party that is a party to Pending Arbitration Proceedings ratifies, approves or accepts this Agreement, it shall, before the entry into force of this Agreement for that Contracting Party, inform the other party to the proceedings of that fact. That communication shall include a reference to whether, by that ratification, approval or acceptance, the relevant Bilateral Investment Treaty is terminated or whether ratification, approval or acceptance by the other Contracting Party to that Treaty is still outstanding.

Article 17. Provisional application

1. The Contracting Parties, in accordance with their own constitutional requirements, may decide to apply this Agreement provisionally. The Contracting Parties shall notify the Depositary of any such decision.

2. When both parties to a Bilateral Investment Treaty have decided to apply this Agreement provisionally, the provisions of this Agreement shall apply in respect of that Treaty 30 calendar days from the date of the later decision on provisional application.

Article 18. Authentic texts

This Agreement, drawn up in a single original in the Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian and Spanish languages, the text in each of these languages being equally authentic, shall be deposited in the archives of the Depositary.

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