## [International Arbitration Newsletter - June 2020 | Regional Overview: Europe](/en_GB/new/international-arbitration-newsletter-june-2020-regional-overview-europe) # International Arbitration Newsletter - June 2020 | Regional Overview: Europe 06 / 24 / 2020 [VIEW INTERNATIONAL ARBITRATION NEWSLETTER - JUNE 2020](https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-june-2020) - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-june-2020-regional-overview-europe) - []() - []() Previous Next **The most relevant European updates from the global International Arbitration and ADR practice group at Garrigues.** ### **EUROPEAN UNION** **First investment treaty claim against the European Union** **Nord Stream 2 AG**, a subsidiary of Russia’s gas giant **Gazprom**, has brought an Energy Charter Treaty (**ECT**) claim against the **European Union** (**EU**) before the Permanent Court of Arbitration. This is the first investment treaty arbitration faced by the EU as the respondent rather than an intervening party. Swiss-registered Nord Stream 2 AG is constructing two 1,200-kilometre controversial gas pipelines from Russia to Germany via the Baltic Sea. The claim filed by Gazprom's subsidiary stems from the amendments to Directive 2009/73/EC concerning common rules for the internal market in natural gas. These amendments will make the project subject to EU rules on unbundling, tariff regulation and third party access, as they have extended the EU’s internal market liberalization rules to cover gas pipelines importing from third countries (non-EU countries). Nord Stream 2 AG claims that these amendments, which it says will seriously affect its investments, violate the ECT, of which the EU is itself a signatory together with several EU and non-EU member states, including the obligation to give fair and equitable treatment. Consequently, it requests that the EU be declared in breach of the ECT and that an injunction be issued to prevent further breaches. It also requests an order for the EU to pay compensation which will be quantified at a later date. ### **Spain** **Swedish court refuses to consult the European Court of Justice over ECT compatibility with the EU law** The Swedish Svea Court of Appeal has refused **Spain**’**s** request to consult the European Court of Justice (**ECJ**) on certain questions concerning the validity of a € 53.3 million ECT arbitral award against the country. Spain is seeking to set aside the arbitral award issued in favour of Luxembourg-based renewable energy company **NovEnergia II – Energy & Environment (SCA)**, which found the country liable over reforms to Spain’s renewable energy subsidy, as they violate the ECT’s fair and equitable treatment standard. The arbitral tribunal rejected Spain’s jurisdictional objection that EU law precluded arbitration of intra-EU investment disputes under the ECT. This award was issued a month before the ECJ issued its ruling in the Achmea v. Slovakia case, which found that the investor-state arbitration provisions of a bilateral investment treaty between two EU member states were incompatible with EU law. As a result of this ruling, Spain requested the Svea Court of Appeal to set aside the award, asking it to refer some questions to the ECJ for a preliminary ruling, specifically on the applicability of the Achmea decision to intra-EU arbitration under the ECT and the compatibility of the treaty with the EU law. However, the Swedish court denied the request as it did not find a need to seek such preliminary ruling. ### **ITALY** **Milan-seated arbitral tribunal to hear claim against Blackstone** A tribunal at the Milan Chamber of Arbitration has issued a partial award declaring itself competent to hear the claim brought by **RCS Media Group** (**RCS**)–the media group that publishes the Italian newspapers Corriera della Sera and La Gazzetta dello Sport or Il Mondo magazine– against **Blackstone** over the purchase of its headquarters. The case centers on the ownership of RCS’s historic headquarters in central Milan, which the US private equity group bought for € 120 million during a financial restructuring, as well as 14 of RCS’ magazines. Specifically, the claim for compensatory damages filed in 2018 by the media group seeks to nullify the sale and reverse the purchase on the grounds that it is "null and void" according to Italian law as Blackstone had paid too low a price because RCS was facing financial difficulties. Blackstone, in turn, accuses RSC of falsely claiming to own the building, thereby blocking the sale of the property –after renovating and releasing the buildings– to Allianz Real State for € 250 million. ### **UKRAINE** **Ukraine braces itself for renewables reforms arbitration** The renewable energy reforms proposed last year by the Ukrainian energy ministry, consisting of cutting the tariff for renewable energy plants, threatens **Ukraine** with a flood of demands from investors. In 2009, Ukraine introduced generous tariffs in this sector, which led to many international investors deciding to enter the sector. However, the possibility of changes to the state’s renewables regime has meant that several investors are considering bringing international arbitration against Ukraine. Recently both the Ukrainian energy producer **DTEK** and the 31-member board of the **European Energy Agency** (**EUEA**) announced that their companies were "seriously considering" filing a claim against the state over the reforms. UK-registered company **Elementum Energy**, a subsidiary of the hedge fund **VR Capital** which is part of EUEA, has already notified the state of a potential claim under the UK-Ukraine Bilateral Investment Treaty. 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