Procedural Posture

This document is a Decision on Preliminary Objections issued by an ICSID Tribunal in an arbitration between JCDecaux SA (Claimant) and the Czech Republic (Respondent). The dispute was brought under the 1990 France-Czech Republic Bilateral Investment Treaty (BIT) and the ICSID Convention. The Respondent bifurcated the proceedings to raise preliminary objections to the Tribunal's jurisdiction, primarily relying on the intra-EU nature of the dispute following the Court of Justice of the European Union (CJEU) decision in Achmea.

Principal Legal Issues and Parties' Positions

The core issue was whether the arbitration agreement in Article 10(2) of the BIT was rendered invalid by EU law and the subsequent Agreement for the Termination of Bilateral Investment Treaties between the Member States of the European Union (Termination Agreement). The Respondent argued that the Termination Agreement applied retroactively, invalidating the BIT's arbitration clause ex tunc. Furthermore, the Respondent contended that under Article 30 of the Vienna Convention on the Law of Treaties (VCLT), the EU Treaties superseded the BIT due to incompatibility. The Respondent also invoked principles of comity and the Tribunal's duty to render an enforceable award.

The Claimant maintained that it had perfected the arbitration agreement in August 2020, prior to the Termination Agreement entering into force. The Claimant argued that its rights under the BIT were direct, not derivative of its home State, and that EU law does not automatically vitiate consent to ICSID arbitration under international law.

Tribunal's Analysis and Findings

The Tribunal dismissed the Respondent's jurisdictional objections. It held that while the Achmea principle is binding within the EU's constitutional regime, it does not prevail over general international law, which the Tribunal is mandated to apply under the BIT and the ICSID Convention. The Tribunal determined that the BIT conferred direct rights upon the investor, which crystallized when the Claimant perfected its consent to arbitrate.

Relying on Article 25(1) of the ICSID Convention, the Tribunal emphasized that once consent is perfected, it cannot be unilaterally withdrawn. Consequently, the Termination Agreement, which entered into force after the arbitration commenced, could not retroactively invalidate the established arbitration agreement. The Tribunal also rejected the application of Article 30 of the VCLT, concluding that the BIT and the EU Treaties do not share the "same subject matter" and operate within distinct legal regimes.

Finally, the Tribunal dismissed the Respondent's arguments regarding bad faith, finding that the Claimant legitimately exercised its rights under the BIT. The Tribunal also declined to abdicate jurisdiction based on comity to the CJEU or speculative concerns regarding the future enforceability of the award within the European Union.

Operative Directions

The Tribunal formally dismissed the Respondent's preliminary objections and affirmed its jurisdiction to determine the Claimant's substantive claims for breach of the BIT. The decision on costs regarding the jurisdictional phase was reserved for a further order.