Revue - Les Cahiers de l'Arbitrage N°1-2023 - 80

ARTICLES - DEBATES
(b) Conflict before National Courts: the Micula Award
Should a tribunal impose liability on a respondent State in an intra-EU dispute,
and should the State fail to pay the award, the decision on the validity of the
arbitration agreement and the arbitral award will lie in the hands of the national
court before which the enforcement action is brought. Like the tribunal, the court
will be called upon to weigh the substantive principles of EU law (as articulated
in Achmea) and the demands of international arbitration law. The dilemma is best
illustrated by the saga surrounding the ICSID award rendered in the case of Micula
v. Romania, 86
referred to earlier. 87
That award was brought for enforcement both
in courts of the EU Member States and in the U.S. and, as will be seen, their
approaches to the matter have sharply diverged.
In the Micula case, the Swedish claimants had invested considerable amounts in
economically disadvantaged areas of Romania within the framework of a program
whereby Romania, by way of incentive, granted substantial tax advantages to
companies willing to invest in those areas. The Miculas applied for and received
from Romania what is known in EU law parlance as a state aid. However, under
established EU law, state aids are illegal unless reported to the Commission in
advance and approved by it. Romania failed to report the state aid before conferring
it, as a consequence of which the Commission issued an order requiring Romania
to withdraw the state aid going forward and, in keeping with settled EU law, 88
to
recover the benefits, if any, that the investor had already received under the aid.
Romania complied, withdrawing the aid, thereby precipitating an ICSID arbitration
in which the Miculas charged Romania with violating its obligations under the
Sweden-Romania BIT.
Up to this point, the award in Micula v. Romania 89
resembled the then existing
numerous intra-EU arbitrations. The tribunal hearing that case, like all others up
to that time, rejected the respondent State's intra-EU objection and entertained the
claim before it, ultimately awarding the claimants the sum of USD 116,317,868,
plus interest. However, in the wake of that award, the Commission took an unusual
step, issuing a suspension injunction to Romania barring it from paying any portion
of the award due to its offense to the EU's state aid policies. 90
The Commission
informed Romania that it had not only initially conferred an illegal state aid on
the Miculas, but that if it paid the award, it would be deemed to have conferred a
further illegal state aid on them. The case thus presented a direct conflict between
the mandates of EU law (more specifically, EU state aid law), on the one hand,
and the ICSID Convention, on the other. Following the Commission's injunction,
Romania declined to pay the award.
A series of enforcement actions ensued, initially in various EU Member States
and subsequently in the U.S.
Kingdom of Spain, ICSID Case No. Arb/15/23, Decision on Jurisdiction, Liability and Principles
of Quantum (Sept. 14, 2022).
86. Micula, supra note 42.
87. Supra part II(c).
88. TFEU, supra note 8, art. 108.
89. Micula, supra note 42.
90. Commission Decision (EU) 2015/1470 of 30 March 2015, 2015 O.J. (L 232) 43, ¶ 6.
78
The Paris Journal of International Arbitration 2023‑1

Revue - Les Cahiers de l'Arbitrage N°1-2023

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