On 11 December 2013, an ICSID tribunal issued the Award in favour of the claimants, holding that Romania had failed to ensure fair and equitable treatment under the Sweden-Romania BIT. It ordered Romania to pay approximately USD 90 million (RON 376,433,229) plus interest. The Award was upheld by an ICSID ad hoc Committee on 26 February 2016.
On 26 May 2014, the European Commission issued a suspension injunction to restrain Romania from taking any action to execute the Award until it had taken a final decision on the compatibility of the Award with the European Union law. The Commission issued its Final Decision on 30 March 2015, finding, inter alia, that the execution of the award by Romania would constitute new, unlawful State aid. It prohibited Romania from making any payment under the Award. The claimants subsequently initiated proceedings before the GCEU seeking annulment of the Final Decision.
On 17 October 2014, the English High Court ordered registration of the Award (Order).
On 28 July 2015, Romania applied to set aside the Order, or alternatively to vary it so as to stay the enforcement proceedings, or alternatively to refer the question to the Court of Justice of the European Union for a preliminary ruling. Romania argued, inter alia, that the Order should be set aside because the court was obliged to refuse recognition of the Award given the terms of the Final Decision. The European Commission supported Romania’s application and participated in the proceedings as an intervening party.
The English High Court rejected the request to set aside the Order holding, inter alia, that: (1) the Award became res judicata on the date it was issued; (2) registration of the Award was not in itself an enforcement measure that would contradict the Commission’s Final Decision; and (3) under the Arbitration (International Investment Disputes) Act 1966, the claimants were entitled to registration. However, it suspended enforcement of the Award pending the GCEU’s ruling because the Final Decision prohibits Romania from paying the Award and the “principle of sincere cooperation” contained in Article 4(3) of the Treaty on European Union precludes national courts from taking decisions which conflict with a decision of the Commission. The court also held that the enforcement could create a “real risk of inconsistent decisions” since several issues raised in the application “substantially overlap with the arguments raised in the annulment proceedings in respect of the Commission’s Final Decision.”
For the English High Court decision, click here.