Tribunal makes no decision on costs allocation, but places costs for intra-EU objection on the record for future costs decision

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MS Declaration did not have the effect of withdrawing Croatia’s consent to arbitrate investor-state disputes under the BIT

MS Declaration cannot be used under Article 31(3) VCLT to thwart the arbitration claim

Tribunal rejects the idea that the MS Declaration suspended the BIT’s investor-state arbitration clause, albeit with some hesitation

MS Declaration is a political statement, setting out the states’ future intentions

Argument that Termination Treaty confirmed prior developments is rejected as being circular

Interpretation under Article 31(3) VCLT cannot entail the excision of an entire clause from a treaty, thus the Termination Treaty cannot be used as subsequent practice or agreement

Termination Treaty did not terminate the BIT with retroactive effect, as consent to ICSID arbitration cannot be withdrawn unilaterally

Tribunal reckons that EU treaties and the BIT are “not remotely similar”, meaning that Article 30 VCLT does not apply

Neither the BIT, nor its arbitration clause were terminated or suspended pursuant to Article 59 VCLT before the entry into force of the Termination Treaty for the BIT parties in March 2021

EC’s position on intra-EU investor-state arbitration has evolved over time

Tribunal identifies relevant rules of international law, and opts to treat the issue before it as a case of first impression

Conflicts of laws must be resolved by applying general international law, rather than the principle of primacy of EU law

EU law possesses dual character

Article 42(1) ICSID Convention only applies to the merits; jurisdiction is exclusively governed by public international law

Tribunal rejects claimants’ allegation that Croatia acted in bad faith when raising the intra-EU objection

EC and the Netherlands file amicus briefs; parties agree to discuss intra-EU objection in bifurcated proceeding

Background: Dutch companies allege that Croatia orchestrated takeover of billion-euro retail conglomerate, turning to ICSID arbitration

Mere error in applying domestic law by competition authority does not amount to FET breach

EU law is not applicable, not even to the merits

Local regulator “utterly failed” to fulfil regulatory function

Decisions adverse to the investor are not arbitrary, if sufficiently reasoned

Background: Postal services investor complains of alleged predatory pricing practices by state-owned competitor

No causal link between discrete FET breaches and overall damages claimed

Normal operation of market forces cannot be blamed on respondent

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