Public International Law Key Insights: European Governance

March 5, 2024

In September 1993, an arbitral tribunal issued an award in favour of Iliria S.R.L., an Italian company in liquidation, against the Albanian government, triggering a protracted legal battle to enforce the award within the Albanian legal system. After over 17 years of litigation before the local courts, Iliria brought the case to the European Court of Human Rights ("ECHR"), alleging a violation of Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms ("Convention"), which guarantees the right to a fair trial within a reasonable time.

The ECHR assessed the reasonableness of the length of the proceedings by considering various factors, including the complexity of the case, the conduct of the parties and the stakes involved for the applicants. It found that the period for a fair trial began on March 31, 1998 and ended on December 22, 2015, a period of 17 years and nine months.

The ECHR rejected the Albanian government's arguments that the delays were due to the conduct of Iliria or the complexity of the case and pointed to significant initial delays and subsequent procedural setbacks within the Albanian legal system.

The ECHR found a violation of Article 6(1) of the Convention due to the excessive length of the proceedings. Iliria claimed €100,000 in non-pecuniary damages for the delays and €21,000 for expenses incurred. While the Albanian government contested the claim, the ECHR awarded €4,800 in non-pecuniary damages and €6,000 in expenses, based on an equitable assessment of the evidence submitted.

This judgment underlines the importance of timely justice and fair trial guarantees under the Convention, provides clarity on the rights of parties involved in protracted legal proceedings and reaffirms the role of the ECHR in upholding fundamental human rights standards in all Member States.

April 9, 2024

In a landmark decision, the Grand Chamber of the European Court of Human Rights ("ECHR") has ruled that Switzerland violated the European Convention on Human Rights ("Convention") by failing to enforce adequate climate change mitigation measures.

This unprecedented ruling follows a lawsuit filed by the association of Senior Women for Climate Protection Switzerland ("Senior Women Association"), asserting that insufficient climate policies and inadequate government action on climate change endangered their health and violated their right to life.

The Senior Women Association case was initially rejected by the Swiss Federal Supreme Court. Despite exhausting national remedies, the Senior Women Association pursued a new path through the European Court system, seeking compensation for the escalating threat posed by climate change-induced heatwaves.

The application filed by the Senior Women Association outlined three main complaints:

(i) Switzerland's inadequate climate policies failed to protect their health and violated their right to life under Articles 2 and 8 of the Convention;
(ii) the Swiss Federal Supreme Court dismissed the Senior Women Association's case on arbitrary grounds, in violation of their right to a fair trial, under Article 6 of the Convention; and
(iii) the Swiss authorities did not adequately address the substance of their complaints, in violation of the right to an effective remedy under Article 13 of the Convention.

Upon preliminary acceptance by the ECHR, the case was elevated to the Grand Chamber, indicating its significant implications for interpreting the Convention.

The Grand Chamber of the ECHR found that Switzerland violated the rights to private and family life (Article 8) and access to court (Article 6, §1). The ECHR emphasized that Article 8 extends to the State's duty to protect individuals from severe effects of climate change, highlighting the need for a robust domestic regulatory framework to curb greenhouse gas emissions effectively. This framework should ideally include national limits on emissions and a concrete carbon budget, which Switzerland lacked.

This case opens the door for similar climate change related arguments to be raised in future cases before the ECHR.

December 21, 2023

The International Skating Union ("ISU") was embroiled in a legal dispute brought by aggrieved skaters challenging the rules prohibiting their participation in unauthorized events. These rules required that disputes be resolved exclusively by the Court of Arbitration for Sport ("CAS") in Lausanne, Switzerland. Following an investigation, the European Commission concluded that the ISU rules were in breach of EU competition law. However, the General Court of the EU only partially upheld the European Commission's findings, recognizing the anti-competitive nature of the ISU's eligibility criteria but upholding the validity of the arbitration clause.

Subsequent appeals led to the Court of Justice of the European Union ("CJEU") decisively siding with the European Commission. The CJEU ruled that the ISU's wide discretion in approving events and its disproportionate penalty system were in breach of competition rules.

This ruling, reminiscent of the Super League case, limits the dual role of sports federations in rule-making and event management, thereby fostering a climate conducive to innovative formats. Furthermore, it casts doubt on the legitimacy of CAS's jurisdiction and argues in favour of EU judicial oversight of arbitration awards. As a result, the sports arbitration framework faces an imminent reassessment, particularly following a 2022 ruling by the German Federal Constitutional Court that questions the adequacy of CAS's judicial standards. As a result, arbitration clauses between sports federations and athletes may be invalidated, heralding a potential reshaping of the sports arbitration landscape.

March 14, 2024

In the case of European Commission v. United Kingdom of Great Britain and Northern Ireland, on March 14, 2024, the Court of Justice of the European Union ("CJEU") found that the UK breached its obligations under the Treaty on the Functioning of the European Union ("TFEU") by enforcing an "intra-EU" ICSID arbitral award, known as the Micula award, arising from a dispute between Romania and Swedish investors. The European Commission ordered Romania not to pay the award on the grounds that it constituted illegal state aid. However, the UK Supreme Court ("UKSC") proceeded with enforcement, citing pre-existing obligations under the ICSID Convention, which it argued were unaffected by EU accession.

The CJEU criticised the UK Supreme Court's reliance on Article 351 TFEU and its failure to await the CJEU's ruling and found the enforcement to be in breach of Romania's TFEU obligations. This decision underlines the CJEU's commitment to upholding the EU legal order and has implications for the enforcement of intra-EU arbitral awards. European investors should consider its impact on investments and legal strategies, including compliance with non-EU bilateral and multilateral investment treaties. Parties negotiating contracts should carefully assess the jurisdiction for intra-EU arbitration to avoid conflicts with EU law, as seen in the ICSID case.

This ruling signals the CJEU's stance on EU Member States' compliance with pre-existing treaty obligations in relation to arbitration and highlights the importance of the CJEU's supervision of EU law and the need for consistency in the enforcement of EU law.