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The Interplay Between EU Policy and International Arbitration Laws

The Interplay Between EU Policy and International Arbitration Laws


There are a serious variety of ramifications to the Regulation's exclusion of arbitration, such as the potential for parties behaving dishonestly to start arbitration procedures in ordinary courts. The absence of a process prevents such actions, and awards rendered contravening arbitration agreements may be accepted throughout the European Union. Additionally, the jurisdiction over supplemental or supporting proceedings is not uniformly assigned. Changes to this exception have been advocated recently, most notably in the "Heidelberg Report" on the application of the Regulation that the EU commissioned. The study examines solutions to these problems as well as analyses the challenges they provide. The European Court of Justice's (ECJ) recent approach to EU public policy, challenges a fundamental tenet of international arbitration law, and the possibility of Member States breaching their obligations under international investment treaties, which could expose them to liability at the hands of investor-state arbitral tribunals, are the two main forms in which European Union law and international arbitration law clash. These changes have increased the stakes that EU law has in international arbitration as well as the stakes that arbitration has in EU law.[1]

The increasing conflict between international arbitration law and EU law has hampered the amicable coexistence of the two legal systems for more than 50 years. The essay distinguishes between two categories of legal disputes between EU law and international arbitration law, the latter of which arose as a result of changes in EU public policy and actions adopted by Member States in response to legal pressure from the EU. The essay finds that by concentrating on the extent and gravity of violations rather than the public policy designation, courts have successfully employed accommodation tactics to reduce conflicts between the two legal regimes. The report does, however, also point out that there have been more direct conflicts as a result of the conflicts between EU law and investment arbitration law, raising the possibility that the EU may have to compromise with conflicting legal systems.[2]

EU Policy and International Arbitration

The European Union (EU) has a well-documented policy of excluding arbitration, and reports and official remarks have suggested that the 1958 New York Convention may be preferable for arbitration. Although it was never to be, the Brussels Convention was originally intended to serve as a tool to facilitate the free circulation of civil and commercial judgments between Member States. Although international arbitration agreements are acknowledged in the first official report, The Jenard Report of 1968, the Convention prohibits both the acceptance and execution of arbitral verdicts and further arbitration-related litigation. According to the 1978 Schlosser Report, parties are free to submit their issues to arbitration even in situations where the Convention establishes exclusive jurisdiction. This distinction is made between procedures involving arbitration itself and all other disputes. Since they developed independently of one another, the EU and international arbitration legal regimes have each had their own "first principles" for a considerable amount of time.[3]

Institutional and substantive issues, among other considerations, judged critical in that specific context, serve as the foundation for the international arbitral procedure. The European Court of Justice (ECJ) regards it as equally crucial as guaranteeing the efficacy of EU legislation inside national legal regimes, and it uses the concept of EU public policy as a useful tool to achieve this goal. Important fault lines are beginning to show as the similarities between the two regimes become more apparent. One such example is when an expansively interpreted EU public policy makes international arbitral awards far more vulnerable to annulment, non-recognition, and non-enforcement than the first principles of international arbitration law would typically permit. Although accommodation strategies are essential for resolving the ensuing normative friction, disputes are occasionally presented as a struggle between competing legal systems.[4]


[1] Fentiman, Richard. "Arbitration agreements in Europe." The Cambridge Law Journal 69.2 (2010): 242-245.

[2] Bermann, George A. "Navigating EU law and the law of international arbitration." Arbitration International 28.3 (2012): 397-446.

[3] Savin, Andrej. "The arbitration exception and protection of arbitration agreements in the EU." Union UL Sch. Rev. 1 (2010): 74.

[4] Kirry, Antoine. "Arbitrability: Current Trends in Europe." Arbitration International 12.4 (1996): 373-390.

  • EU's exclusion of arbitration allows dishonest parties to exploit regular courts, affecting award enforceability.
  • Uneven jurisdiction assignment sparks reform discussions.
  • Conflict arises between EU law and international arbitration, driven by challenges to EU public policy and potential breaches of Member States' obligations in investment treaties.

BY : Vaishnavi Rastogi

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