Intra-EU jurisdictional challenges have become a common feature of ISDS proceedings between EU Member States. To date, none of the over 90 known objections raised on this basis was successful. However, there are inevitable costs associated with such challenges, regardless of whether the Respondent State ultimately prevails in the case.
Arbitrator Intelligence has analyzed 40 awards in which the intra-EU challenge was raised, that were concluded on the merits. Our data shows that, even when the Respondent State prevails on the merits after the intra-EU challenge is rejected, the State is still frequently ordered to pay a share of the costs and lawyer’s fees of the investor.
This can be explained with the additional costs and time spent on the exchange of party submissions on the intra-EU objections, the documentary evidence presented and amicus curiae interventions by the EU Commission. On balance, once the challenge is rejected, the State can be ordered to compensate for such costs, regardless of the final outcome of the case.