Introduction

The relationship between intra-EU investment agreements and EU law is notoriously difficult, and much has been written on the subject (most recently: August Reinisch, "The EU on the Investment Path - Quo vadis Europe? The Future of EU BITs and other Investment Agreements", 12 Santa Clara Journal of International Law (2014), 111 - 157, with further references). So far, the debate evolved mainly around the question whether and how EU law ought to influence an investment tribunal's determination of its own jurisdiction. Since tribunals have generally upheld their jurisdiction, there is hardly any doubt that, notwithstanding academic discussion, intra-EU investment awards do indeed exist. As such, however, they are but a piece of paper. Only their recognition and enforcement by domestic courts in countries where the respondent state has seizable assets can make a wronged investor whole. Therefore, it does not come as a surprise that EU Member States in their role as respondents in investment arbitrations start opening up the enforcement stage of investment awards as an added line of defense against intra-EU investment arbitration.

In Micula, Romania, aided by the European Commission which intervened as amicus curiae, argued that "any payment of compensation arising out of this Award would constitute illegal state aid under EU law and render the Award unenforceable within the EU." (Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Final Award of December 11, 2013, para. 330 et seq.). The Tribunal, however, did not find it "desirable to embark on predictions as to the possible conduct of various persons and authorities after the Award has been rendered, especially but not exclusively when it comes to enforcement matters" (Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Final Award of December 11, 2013, para. 340 et seq.). Instead, the tribunal summarily referred to Articles 53 and 54 of the ICSID Convention, according to which any award rendered in ICSID proceedings shall be binding, recognized and enforced without review by domestic courts.

Disregarding whether the approach adopted by the Micula tribunal is persuasive or not, it is likely that Romania and the European Commission's argumentation regarding state aid will be picked up in future intra-EU investment arbitrations. Because awards must ultimately be enforced within an EU Member State, it is of utmost importance both for investors and responding states to understand what role EU state aid law plays in this respect.

Our answer to this question is the proverbial lawyerly "it depends" - and here it depends on two notable factors. The kind of measure found by the investment tribunal to violate the relevant investment agreement plays a role, as does the kind of arbitration proceeding initiated by the investor.

We will argue that enforcement of an intra-EU investment award does not, as a general rule, constitute illegal state aid under Article 107 of the Treaty on the Functioning of the European Union (TFEU), (I.). However, depending on the concrete circumstances of the case, enforcement can constitute illegal state aid if the measure found to violate the investment agreement consisted of repealing a legal regime that itself constituted illegal state aid, (II). Domestic courts may embark on scrutinizing an award with regard to these questions only if the award has not been rendered by an ICSID tribunal, (III.).