Opinion of the Advocate General — ECLI:EU:C:2021:321
Date: 2021-04-22
Language of the case: Swedish
Subject matter: General provisions
Procedure: Reference for a preliminary ruling
Origin: Sweden

summary, 
given the following grounds for its position, so far as material here. 
32. The hovrätten (Court of Appeal) has noted that the principles identified by the 
Court of Justice in Achmea (C-284/16, EU:C:2018:158) were applicable to the 
dispute between PL Holdings and Poland. That flows from the fact that the 
arbitration tribunal cannot be regarded as a court or tribunal of a Member State 
and that the dispute might concern the interpretation or application of EU law. 
33. The hovrätten (Court of Appeal) held that the judgment in Achmea has the effect 
of rendering Article 9 of the investment contract invalid in respect of relations 
between Member States. According to that court, the invalidity also means that the 
standing proposal made by Poland to investors that disputes arising from the 
investment contract are to be decided by an arbitration tribunal is void. 
34. However, according to the hovrätten (Court of Appeal), the invalidity did not 
prevent a Member State and an investor from concluding an arbitration agreement 
in respect of the same dispute at a later stage. In such a case, that arbitration 
agreement is one which is based on the common intention of the parties and 
concluded in accordance with the same principles as commercial arbitration 
proceedings. 
35. The hovrätten (Court of Appeal) held that the arbitration awards included an 
examination of issues which may be decided by an arbitration tribunal. Nor is the 
content of the arbitration awards contrary to the legal order. There was therefore 
no ground on which to annul those awards on the basis of points 1 or 2 of the first 
subparagraph of Paragraph 33 of the SFL. 
36. Lastly, the hovrätten (Court of Appeal) took the view that Poland’s challenge to 
the validity of Article 9 of the investment contract was made out of time. The 
objection raised by Poland to the validity of the arbitration agreement is therefore 
time-barred under the second subparagraph of Paragraph 34 of the SFL. There 
was therefore no ground on which to annul the arbitration awards on the basis of 
Paragraph 34 of the SFL. [OR. 11] 
REQUEST FOR A PRELIMINARY RULING OF 4. 2. 2020 – CASE C-109/20 
 
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The case before the Högsta domstolen (Supreme Court) 
37. The parties maintained their respective claims and defences before the Högsta 
domstolen (Supreme Court) and developed the arguments on appeal, in essence, in 
the same way as before the Court of Appeal. 
The legal regime 
The SFL 
38. Under Paragraph 1 of the SFL, disputes which the parties may be able to settle 
may be submitted by agreement to the decision of one or more arbitrators. 
39. Arbitration proceedings are to be based on the arbitration agreement. The 
agreement is based on the parties’ entitlement to reach a settlement concerning the 
subject-matter of the dispute. Paragraph 1 [of the SFL] provides that disputes in 
which public interest is more marked are to be excluded from arbitration. It may 
also follow from specific legislative provisions that a dispute on a particular issue 
may not be submitted to arbitration. [...] 
40. Under Swedish law, the conclusion of an arbitration agreement is not subject to 
any condition as to form. The question of whether or not a valid arbitration 
agreement has been concluded must be assessed in the light of the general rules of 
contract law. A valid arbitration agreement may result, for example, from the 
collusive conduct of the parties or the inertia of one of the parties. [...] 
41. Under point 1 of the first subparagraph of Paragraph 34 of the SFL, an arbitration 
award on appeal by a party is to be annulled, in whole or in part, if it is not 
covered by a valid arbitration agreement between the parties. 
42. In accordance with the second subparagraph of Paragraph 34 of the SFL, however, 
it follows that a party is not entitled to rely on a fact which he or she, by 
participating in [OR. 12] the proceedings without objection, or by any other 
conduct, may be regarded as having refrained from raising. However, merely by 
the fact that the parties appointed the arbitrator, he or she is not to be regarded as 
having accepted the arbitrators’ jurisdiction to rule upon the question referred. 
43. It is apparent from the travaux préparatoires for Paragraph 34 of the SFL that it 
may be presumed, in general, that a party which participates in the proceedings, 
without raising any objection to the jurisdiction of the arbitration tribunal at the 
outset, has accepted its jurisdiction to settle the dispute. The absence of any 
challenge to the validity of an arbitration agreement is also regarded as being 
capable of having the effect of binding the parties to arbitration on contractual 
grounds. [...] 
44. In accordance with point 1 of the first subparagraph of Paragraph 33 of the SFL, 
an arbitration award is to be void if it involves the examination of a question 
REPUBLIC OF POLAND 
 
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which, under Swedish law, may not be decided by arbitrators. Under point 2 of the 
first subparagraph of Paragraph 33, an arbitration award is also to be invalid if the 
manner or manners in which it was arrived at are manifestly incompatible with the 
Swedish legal order. The court must raise the grounds of invalidity of its own 
motion. 
The SCC 2010 rules 
45. Under Article 4 of the SCC 2010, arbitration proceedings are deemed to 
commence on the day on which the SCC receives the request for arbitration. 
Under Article 5 of the SCC 2010, the respondent must submit an answer to the 
request for arbitration within the time-limit set by the secretariat of the SCC. The 
answer must state, inter alia, whether the respondent has any objections 
concerning the existence, validity or applicability of the arbitration agreement. 
However, failure to raise such objections does not preclude the respondent from 
raising such objections subsequently, at any time up to and including the 
submission of the statement of defence. 
46. The parties shall then submit, within the period prescribed by the arbitration 
tribunal, written details of the claim or defence respectively. If not previously 
stated, the defence is to contain any objections to the existence, validity or 
applicability of the arbitration agreement. (see Article 24 of the SCC 2010) [OR. 
13] 
The judgment of the Court of Justice in Achmea 
47. The judgment of the Court of Justice in Achmea was the result of a request for a 
preliminary ruling from the Bundesgerichtshof (Federal Court of Justice) in 
Germany in proceedings between Slovakia and the Dutch company, Achmea. The 
dispute arose from an investment contract concluded between Slovakia and the 
Netherlands. 
48. The Bundesgerichtshof (Federal Court of Justice) referred a number of questions 
to the Court of Justice in order to clarify whether a provision of the contract 
concluded between Slovakia and the Netherlands was compatible with Articles 
267 and 344 TFEU. The clause, which largely corresponds to the clause at issue in 
the proceedings before the Högsta domstolen (Supreme Court), stated that 
disputes arising from the contract, between a Member State and an investor, 
would be brought before an arbitration tribunal for a ruling. 
49. The Court of Justice held, in paragraph 60 of that judgment, that Articles 267 and 
344 TFEU must be interpreted as precluding a provision in an international 
agreement concluded between Member States under which an investor from one 
of those Member States may, in the event of a dispute concerning investments in 
the other Member State, bring proceedings against the latter Member State before 
an arbitration tribunal whose jurisdiction that Member State has undertaken to 
accept. 
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50. It may be inferred from the reasoning of the judgment that a number of 
fundamental principles of EU law were relevant to the position adopted by the 
Court, including the autonomy and characteristics of EU law; the importance of a 
uniform and consistent interpretation of EU law; the protection of the rights of 
individuals, including the right of access to the courts; mutual trust between the 
Member States and the principle of cooperation in good faith. The Court stated 
that it is for both the national courts and the Court of Justice to ensure that those 
principles are observed within the European Union. 
51. The Court of Justice stated that the arbitration proceedings envisaged in Article 8 
of the investment contract between Slovakia and the Netherlands differed from 
[OR. 14] commercial arbitration proceedings which are based on the common 
intention of the parties (see Achmea, paragraph 55). 
52. In that reasoning, it was also stated that the requirements of efficient arbitration 
proceedings justify the review of commercial arbitration proceedings by the courts 
of the Member States being limited in scope, provided that the fundamental 
provisions of EU law can be examined in the context of a reference by the 
national court to the Court of Justice for a preliminary ruling (see Achmea, 
paragraph 54). 
The need for a preliminary ruling 
53. The question that arises is one of the relevance of the principles developed by the 
Court in Achmea, to the outcome of the proceedings before the Högsta domstolen 
(Supreme Court). 
54. It is established that the provision relating to the settlement of disputes contained 
in the investment contract at issue in the proceedings before the Högsta domstolen 
(Supreme Court) is invalid. A possible conclusion is therefore that the standing 
proposal to commence arbitration proceedings which the State may be deemed to 
have made to an investor by the dispute settlement provision is also invalid, since 
the proposal is closely linked to the investment contract. 
55. It was also argued in the proceedings before the Högsta domstolen (Supreme 
Court) that the situation here is different in that the proposal is constituted by the 
commencement of the procedure. The State could then accept, of its free will, 
expressly or tacitly, the jurisdiction in accordance with the principles identified by 
the Court of Justice which apply to commercial arbitration. 
56. The Högsta domstolen (Supreme Court) considers that the manner in which EU 
law is to be interpreted as regards the questions arising in the case is not clear and 
has not been clarified. There are therefore grounds for requesting a preliminary 
ruling from the Court of Justice in order to avoid the risk of a misinterpretation of 
EU law. [OR. 15] 
REPUBLIC OF POLAND 
 
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Request for a preliminary ruling 
57. The Högsta domstolen (Supreme Court) requests the Court of Justice, by a 
preliminary ruling, to answer the following question. 
Do Articles 267 and 344 TFEU, as interpreted in Achmea, mean that an 
arbitration agreement is invalid if it has been concluded between a Member 
State and an investor – where an investment agreement contains an 
arbitration clause that is invalid as a result of the fact that the contract was 
concluded between two Member States – by virtue of the fact that the 
Member State, after arbitration proceedings were commenced by the 
investor, refrains, by the free will of the State, from raising objections as to 
jurisdiction?