The ECJ is Undermining the International Rule of Law in Dispute Resolution

This post was contributed by Felix Dasser, who is a partner at Homburger in Zürich.

The Issue

What began, innocently enough, with the Eco Swiss decision in 1999 has by now developed into a major and systematic attack on the rule of law, if correctly understood as the rule of law in general, not just the rule of select EU laws. This post provides an overview over the European Court of Justice’s various steps on the slippery slope from Eco Swiss via Achmea and ISU up to pending cases that may well lead the ECJ to broaden its increasing disdain for arbitration agreements to choice-of-forum agreements. What is widely recognized as a political rather than legal approach by the ECJ jeopardizes not just the rule of law but the EU’s own political interests. It ought to stop.

The Past Cases

Eco Swiss (C-126/97, 1 June 1999): EU competition law is EU public policy for setting-aside proceedings concerning commercial arbitration. The decision is often cited in the subsequent case law as the seminal decision.

Achmea (C-284/16, 6 March 2018): Intra-EU BIT arbitration is incompatible with Arts. 267, 344 TFEU because arbitral tribunals cannot refer to the ECJ.

Komstroy (C-741/19, 2 September 2021): The same applies to intra-EU Energy Charter Treaty disputes.

PL Holdings (C-109/20, 26 October 2021): Ad hoc replication of the invalidated treaty clause is equally precluded.

Commission v United Kingdom (C-516/22, 14 March 2024): The UK is found guilty of “seriously compromising the EU legal order” by allowing the enforcement of an intra-EU ICSID award in the UK. Unlike the UK Supreme Court, which – after a thorough analysis of the ICSID Convention – concluded that the award was enforceable, the ECJ only cursorily addressed the ICSID Convention, thereby exposing its disdain for public international law.

ISU (C-124/21, 21 December 2023): CAS clauses routing review to the Swiss Federal Tribunal — which cannot refer to the ECJ — are incompatible with effective judicial protection where EU competition law is at stake.

Seraing (C-600/23, 1 August 2025): National courts reviewing awards engaging EU public policy, including the basic rights and freedoms guaranteed by EU law, must conduct targeted, effective review and draw all consequences, including non-recognition of non-EU arbitration agreements.

Member State Court Decisions Adopting/Expanding the ECJ’s Approach

Member state courts did not fail to notice the new approach of the ECJ and started to expand it in various scenarios:

The German Bundesgerichtshof (BGH, KZB 75/21, 27 September 2022) set aside a domestic award and required unrestricted factual and legal review of German competition law claims, thereby reintroducing a révision au fond.

The Gerechtshof Amsterdam (22 April 2025, Poland v. LC Corp N.V., appeal pending) confirmed an anti-suit injunction against an ad hoc BIT arbitration in London after the EU Commission acting as amicus curiae supported the injunction.

The OLG Frankfurt (32 Sch 3/25, 6 March 2026, final), referring to BGH KZB 75/21, set aside a DIS award based on unrestricted control of the tribunal’s application of EU competition law.

The LG Frankfurt (2-06 O 405/25, 25 March 2026, final), referring to ISU, held a Texas arbitration clause invalid as to competition law issues because neither the arbitral tribunal nor the Texan courts in set-aside proceedings could refer to the ECJ, thus holding that the arguments against arbitration (no right of referral to the ECJ) likewise applies to non-EU state courts.

The Current Cases

Several national courts have recently turned to the ECJ to test how far they may – or have to – go in the implementation of the ECJ’s redefinition of international dispute resolution.

Reibel (C-802/24): In the inquiry of the Svea Hovrätt, the AG opined that the EU sanctions against Russia are public policy; they may remain arbitrable, but awards are subject to possible de novo review by the EU courts at the seat on set-aside.

RWE Renewables (C-264/26): The OLG Hamm asked the ECJ whether EU courts can enjoin third-country ICSID enforcement because the third-country court, in Washington, D.C., cannot refer to the ECJ.

Cabify (C-244/25): The Tribunal Superior de Justicia de Madrid inquired whether it should be authorized to fully review the correct application of EU competition law by an arbitral tribunal even though Spanish arbitration law provides for narrower grounds of review, i.e. to reintroduce a révision au fond of arbitral awards.

VISA (C-980/26): The BGH asked the ECJ whether an exclusive jurisdiction clause in favour of the English courts is valid if the case could involve EU competition law. The BGH mused that Seraign required full review of facts and law, which would not be guaranteed by a third-country court, thus assuming that the restrictions on sports arbitration agreements also apply to commercial choice-of-forum agreements.

The Central Conflict

It is one thing to reintroduce a révision au fond in challenges of arbitral awards. This is a question of national arbitration laws and thus within the competence of the various EU member states. Whether it is wise to do so and whether it can be done by the courts instead of the legislators is another matter.

What is not a question but a fact is that the ECJ’s expanding autonomy doctrine conflicts with public international law. The ICSID Convention (Arts. 53–54) creates a self-contained enforcement regime impervious to national court intervention; the New York Convention obliges all EU Member States to recognise awards subject only to limited public-policy grounds; and the Brussels/Lugano/Hague regimes protect the parties’ freedom to choose a competent foreign court. As the EU’s conception of public policy expands — to competition law, restrictive measures, the basic freedoms, and the structural requirements of Art. 267 TFEU — it risks overriding each framework in turn.

The OLG Hamm referral places the arbitration-enforcement conflict in its starkest form: It asks whether Arts. 267, 344 TFEU give Spain a direct right to demand that the investor cease enforcement in the US, because the US courts cannot refer questions to the ECJ. The VISA referral by the Bundesgerichtshof now raises the parallel question for ordinary jurisdiction clauses: can a third country’s lack of access to the referral right under Art. 267 TFEU, by itself, invalidate the parties’ choice of that country’s courts?

The EU Commission’s expansive use of state-aid rules compounds this undermining of the international rule of law: since late July 2026 it has opened in-depth investigations into ICSID/ECT awards for Romanian solar investors and now even for a non-EU (Japanese) investor against Spain, alongside pre-existing proceedings on Spain, Bulgaria, Hungary and Belgium.

Why This Is Also Detrimental for the EU Itself

The ECJ’s new doctrine has moved from investor-state arbitration (Achmea) to sports arbitration (ISU, Seraing), on to commercial arbitration (OLG Frankfurt; LG Frankfurt), and may now reach ordinary commercial jurisdiction clauses for non-EU courts. The reasoning is always the same: supremacy of primary EU law requires access to the ECJ; a forum that does not enjoy such access is structurally inadequate wherever EU public policy may be engaged. The case law does not, on its own terms, draw a principled line between investor-state arbitration, sports arbitration, commercial arbitration and ordinary choice-of-court clauses.

This threatens the rule of law understood to encompass public international law and contractual freedom of forum, and, thereby, the crucial predictability provided by choice-of-forum agreements. If VISA is answered as the BGH’s reasoning suggests, the EU would dictate an alignment of ius and forum in favour of EU law, contrary to established principles of international jurisdiction, including the Lugano Convention and the Hague Choice-of-Court-Agreements Convention.

Systematically disregarding international law undermines Europe’s traditional role as guardian of the rule of law and invites retaliatory or copy-cat action; Russia already cites the EU’s approach in resisting enforcement of the Yukos awards.

The EU faces severe budget constraints requiring major investment, yet private investors will be wary if recourse is effectively limited to the courts and laws of the host state itself (see LC Corp) and state-aid challenges add uncertainty even to final awards on clean energy projects and other major investments without which the EU’s current policies cannot realistically be implemented. The annual EU Justice Scoreboard shows that in several EU member states the large majority of companies does not even trust their own courts – how then should foreign investors suing the state be expected to trust those courts.

Furthermore, by invalidating the choice-of-court for a non-EU state court or an arbitration clause with a seat outside of the EU, EU investors would be deprived of effective recourse against non-EU counterparties (e.g. Russian counterparties), forcing them into the counterparty’s own jurisdiction.

It is High Time to Speak Up

With the ECJ straying into the political arena, it is our mission as lawyers and jurists in general to stand up for the rule of law. Some are doing it from the outside: The Swiss Federal Supreme Court deplored the ECJ’s “crusade” (sic!) against arbitration and explained how to interpret EU law in good faith and not “pro domo” (BGE 150 III 280, 4A_244/2023, 3 April 2024, c. 7.6.5). Courts all over the world unanimously give short shrift to arguments that an EU country is not allowed to make payments under an ICSID award due to allegedly overriding EU law.

Let’s face it: The EU institutions, and in particular the ECJ, are losing credibility as guardians of the rule of law. The implications are serious. In today’s power politics it falls to Europe to stand up for the rule of law and remind the superpowers and others of their obligations under international treaties and international law in general. We all know that the EU is not strong enough to win a pure power play. The EU ignores international law at its peril. We cannot deplore the actions of various autocrats and wanna-be autocrats if we turn a blind eye to the EU institutions’ flagrant violations of international obligations.

Some damage has already occurred. Further damage needs to be avoided. The ECJ

• (i) should not authorize the use of anti-suit injunctions against proceedings in third countries that are perfectly legal under public international law and general principles of private international law, and
• (ii) should not extend its refusal to recognize arbitration agreements to agreements on the choice of a forum in a third country.

More broadly, the ECJ should ideally also get off the slippery slope and focus on the application of the law instead of on the furtherance of shortsighted EU politics.