Action brought on 29 July 2022 — European Commission v United Kingdom of Great Britain and Northern Ireland

(Case C-516/22)

(2022/C 398/18)

Language of the case: English

Parties

Applicant: European Commission (represented by: L. Armati, P.-J. Loewenthal, T. Maxian Rusche, Agents)

Defendant: United Kingdom of Great Britain and Northern Ireland

The applicant claims that the Court should:

— declare that the United Kingdom, in authorising the enforcement of the arbitral award rendered in ICSID Case No. ARB/05/20, failed to fulfil its obligations: — under Article 4(3) TEU, read in conjunction with Article 127(1) of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (1) (‘the Withdrawal Agreement’), by deciding on the interpretation of Article 351(1) TFEU and its application to the implementation of the arbitral award while the same matter had been decided by extant Commission decisions and was awaiting adjudication before the Union courts; — under Article 351(1) TFEU, read in conjunction with Article 127(1) of the Withdrawal Agreement, by misinterpreting and misapplying the notions of ‘rights […] of one or more third countries’ and ‘affected by the Treaties’; — under points a and b of the first paragraph as well as the third paragraph of Article 267 TFEU, read in conjunction with Article 127(1) of the Withdrawal Agreement, by failing to refer a question on validity of the Commission’s decision of 26 May 2014 enjoining Romania from implementing the arbitral award (‘the 2014 suspension injunction’) and the Commission’s decision of 1 October 2014 opening the formal investigation procedure into Romania’s implementation of the arbitral award (2) (‘the 2014 opening decision’) and by failing, as a court of last instance, to refer a question on the interpretation of Union law that was neither acte clair nor acte éclairé; — under Article 108(3) TFEU, read in conjunction with Article 127(1) of the Withdrawal Agreement, by ordering Romania to violate its Union law obligations flowing from the 2014 suspension injunction and the 2014 opening decision; — order the United Kingdom of Great Britain and Northern Ireland to pay the costs.

Pleas in law and main arguments

By judgment of 19 February 2020 in Micula v Romania, the Supreme Court of the United Kingdom ordered the enforcement of a 2013 arbitral award rendered against Romania in favour of certain Swedish investors for the infringement by Romania of a bilateral investment treaty concluded in 2003 between Sweden and Romania.

The Commission had previously found that the implementation of the arbitral award constitutes the grant of unlawful and incompatible State aid by Romania in favour of those investors. The Court has since found that that award violates fundamental rules and principles of Union law, in particular Articles 267 and 344 of the TFEU, the general principles of autonomy and mutual trust, and the operation of the institutions of the Union in accordance with the Union constitutional framework.

Relying on Article 351(1) TFEU, the Supreme Court concluded that the arbitral award should be enforced in the United Kingdom, notwithstanding the fact that its enforcement was contrary to Union law. In so doing, the United Kingdom infringed Article 4(3) of TEU and Articles 108(3), 267(1)(a) and (b) and (3), and 351(1) TFEU, read in conjunction with Article 127(1) of the Withdrawal Agreement.

(1) OJ 2020, L 29, p. 7.

(2) State aid — Romania — State aid SA.38517 (2014/C) (ex 2014/NN) — Implementation of Arbitral award Micula v Romania of 11 December 2013 — Invitation to submit comments pursuant to Article 108(2) of the Treaty on the Functioning of the European Union (OJ 2014, C 393, p. 27).