PCA CASE NO. 2010-17: IN THE MATTER OF AN ARBITRATION UNDER THE AGREEMENT BETWEEN THE REPUBLIC OF AUSTRIA AND THE CZECH AND SLOVAK FEDERAL REPUBLIC CONCERNING THE PROMOTION AND PROTECTION OF INVESTMENTS, DATED 15 OCTOBER 1990 -and- THE ARBITRATION RULES OF THE UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW, 15 DECEMBER 1976 -between- EUROPEAN AMERICAN INVESTMENT BANK AG (AUSTRIA) (“Claimant”) -and- THE SLOVAK REPUBLIC (“Respondent,” and together with the Claimant, the “Parties”) __________________________________________________________ AWARD ON JURISDICTION __________________________________________________________ Arbitral Tribunal Sir Christopher Greenwood Professor Brigitte Stern Dr Dr Alexander Petsche Secretary to the Tribunal Mr Martin Doe Registry Permanent Court of Arbitration 22 October 2012 PCA Case No. 2010-17 Award on Jurisdiction 22 October 2012 Page 2 of 160 TABLE OF CONTENTS LIST OF DEFINED TERMS.......................................................................................................... 4 I. INTRODUCTION....................................................................................................................... 7 A. THE PARTIES ......................................................................................................................................7 B. PROCEDURAL HISTORY .......................................................................................................................7 C. THE PROVISIONS OF THE BIT ...........................................................................................................15 D. STATEMENT OF FACTS ......................................................................................................................17 E. THE RESPONDENT ’S JURISDICTIONAL OBJECTIONS ..........................................................................18 F. RELIEF REQUESTED ..........................................................................................................................21 G. THE STRUCTURE OF THE AWARD ......................................................................................................21 II. FIRST OBJECTION: THE INTRA-EU BIT ISSUE ............................................................. 23 A. INTRODUCTION .................................................................................................................................23 B. WHETHER THE VCLT IS APPLICABLE ..............................................................................................25 1. The Positions of the Parties.......................................................................................................... 25 2. The Tribunal’s Analysis ............................................................................................................... 27 (1) Application of the VCLT to the relations between the EU treaties and intra-EU BITs..............28 (2) Whether the BIT was concluded before or after Slovakia became party to the VCLT...............29 C. THE APPLICATION OF ARTICLE 59 OF THE VCLT ............................................................................31 1. The Positions of the Parties and the Amici Curiae ........................................................................ 31 (1) The Respondent .....................................................................................................................31 (2) The Claimant .........................................................................................................................38 (3) The Amici Curiae...................................................................................................................41 (4) The Parties’ Responses to the Amici Curiae............................................................................46 2. The Tribunal’s Analysis ............................................................................................................... 53 (1) Do the ECT and the BIT relate to “the same subject matter”?..................................................54 (2) Did the Parties to the BIT manifest an intention to terminate that Treaty or are the BIT and the ECT incapable of being applied at the same time?........................................................................60 (3) Is termination under Article 59 of the VCLT subject to the notification requirement of Article 65 of the VCLT? ..............................................................................................................................73 (4) Conclusion.............................................................................................................................73 D. THE ISSUE OF THE APPLICABILITY OF ARTICLE 30(3) OF THE VCLT IMPLYING THE INAPPLICABILITY OF ARTICLE 8 OF THE BIT .....................................................................................................................74 1. The Positions of the Parties.......................................................................................................... 75 2. The Tribunal’s Analysis ............................................................................................................... 76 (1) Does Article 8 of the BIT violate Article 292 of the ECT (Article 344 TFEU)? .......................77 (2) Does Article 8 of the BIT violate Article 12 of the ECT (Article 18 TFEU)? ...........................84 (3) Conclusion.............................................................................................................................87 E. THE ISSUE OF THE APPLICATION OF EU LAW AS LEX ARBITRI ...........................................................88 F. CONCLUSION ON THE INTRA -EU BIT OBJECTION ............................................................................89 III. THE DIFFERENT TRANSLATIONS OF THE TREATY.................................................. 90 IV. SECOND OBJECTION: WHETHER EURAM’S CLAIMS ARISE OUT OF A QUALIFYING INVESTMENT WITHIN THE MEANING OF THE TREATY....................... 96 PCA Case No. 2010-17 Award on Jurisdiction 22 October 2012 Page 3 of 160 A. THE POSITIONS OF THE PARTIES ......................................................................................................96 1. The Respondent............................................................................................................................ 96 2. The Claimant ............................................................................................................................. 100 B. THE TRIBUNAL ’S ANALYSIS ............................................................................................................103 V. THIRD OBJECTION: THE SCOPE OF ARTICLE 8 ........................................................ 114 A. THE INTERPRETATION OF ARTICLE 8 .............................................................................................115 1. The Positions of the Parties........................................................................................................ 115 (1) The Respondent ...................................................................................................................115 (2) The Claimant .......................................................................................................................117 2. The Tribunal’s Analysis ............................................................................................................. 120 B. THE JUDGMENT OF THE CONSTITUTIONAL COURT .........................................................................133 1. The Positions of the Parties........................................................................................................ 133 (1) The Claimant .......................................................................................................................134 (2) The Respondent ...................................................................................................................135 2. The Tribunal’s Analysis ............................................................................................................. 135 C. THE EFFECT OF THE MFN CLAUSE .................................................................................................140 1. The Positions of the Parties........................................................................................................ 141 (1) The Claimant .......................................................................................................................141 (2) The Respondent ...................................................................................................................145 2. The Tribunal’s Analysis ............................................................................................................. 148 VI. FOURTH OBJECTION: COMPLIANCE WITH NOTICE AND AMICABLE SETTLEMENT REQUIREMENTS FOR THE ARTICLE 2 CLAIMS ................................... 158 VII. COSTS ................................................................................................................................ 159 VIII. THE TRIBUNAL’S DECISION....................................................................................... 160 PCA Case No. 2010-17 Award on Jurisdiction 22 October 2012 Page 4 of 160 LIST OF DEFINED TERMS Amendment I Act No. 530/2007 Coll., Amending and Supplementing Act No. 581/2004 Coll. on Health Insurance Companies and Healthcare Supervision, and Amending and Supplementing Certain Acts as Amended, published on 24 November 2007