GREECE Trends and Developments Contributed by: Dimitris Babiniotis, Zepos & Yannopoulos
The case involved a concession agreement that had been ratified by law and the issue was whether dis - putes arising from the agreement could be submitted to arbitration. The court had to consider the interplay between legislative acts and arbitration agreements. Alignment with Achmea The court’s decision in this case can be seen in the broader context of the CJEU’s decision in Achmea . In Achmea , the CJEU held that arbitration clauses in bilateral investment treaties (BITs) between EU mem - ber states are incompatible with EU law because they undermine the autonomy of the EU legal order. Key points from the judgment The key takeaways from the Conseil d’État judgment No 251/2022 are as follows. • Misapplication of Achmea – the Conseil d’État erroneously extended the Achmea ruling to a com - mercial arbitration clause in a concession agree - ment ratified by law, treating it as though it were a BIT. This application was based on a superficial comparison rather than a substantive analysis of the legal and factual distinctions between BITs and commercial contracts. • Commercial vs investment arbitration – the court failed to adequately distinguish between commer - cial arbitration (which is based on the autonomy of the parties’ will) and investment arbitration (which involves state-to-state treaties and is inherently dif- ferent). This misinterpretation ignored the CJEU’s clear distinction in Achmea between these two types of arbitration. • Implications of PL Holdings – the Conseil d’État referred to the PL Holdings decision, which reaf - firmed Achmea , but the application was again misplaced. PL Holdings dealt with ad hoc arbitra - tion agreements that attempted to circumvent the invalidation of a BIT arbitration clause, which was not analogous to the situation in the concession agreement.
Critical perspective The court’s reasoning has been criticised for the fol - lowing reasons. • Over-extension of Achmea – by applying Ach- mea to a commercial arbitration clause, the court expanded the scope of the CJEU’s ruling beyond its intended limits, potentially undermining the effi - cacy of commercial arbitration in the EU. • Lack of detailed analysis – the judgment lacked a detailed analysis of why the concession agreement should be treated similarly to a BIT. The simplistic approach undermined the nuanced legal princi - ples that differentiate commercial arbitration from investment arbitration. • Potential negative impact – this decision could have far-reaching negative consequences for the use of arbitration in commercial contracts involv - ing state entities, deterring foreign investment, and complicating dispute resolution mechanisms. Implications for arbitration practice In light of this decision, it might be difficult to negoti - ate arbitration clauses with the Legal Council of the State (ie, the lawyers for the Greek State) who are tasked with negotiating public concession contracts. They might refuse to agree on arbitration clauses that extend to EU law matters for fear of future non- enforcement of any ensuing arbitral award. This reluc - tance stems from the potential for such clauses to be rendered unenforceable, as demonstrated by the Conseil d’État ‘s unfortunate alignment with the Ach- mea decision. Law 5016/2023 – strengthening arbitration framework Article 45 of Law 5016/2023 explicitly mandates the application of the New York Convention in Greece. This provision underscores Greece’s commitment to the international arbitration framework established by the New York Convention, ensuring the enforcement of foreign arbitral awards irrespective of whether the traditional preconditions (eg, mutuality) are met. Article 45 of Law 5016/2023’s key provisions are as follows.
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