B3 Croatian Courier Coöperatief U.A. v. Republic of Croatia (
ICSID · Investment (ICSID and treaty) · Croatia · 5 Apr 2019
Why it matters
This case is notable for its detailed analysis of the relationship between EU law and intra-EU BITs, particularly the applicability of the BIT's arbitration clause post-EU accession. The tribunal upheld jurisdiction despite Croatia's objections based on EU law, reinforcing the principle that BIT protections survive EU membership unless expressly terminated. It also addressed the standard of fair and equitable treatment in the context of regulatory conduct by a state's competition authority and postal regulator.
Summary
The dispute arose from B3 Croatian Courier Coöperatief U.A., a Dutch cooperative, which invested in a Croatian postal services company. The claimant alleged that Croatia, through its Ministry of Transport, Competition Authority (CCA), and postal regulator (HAKOM), violated the BIT by failing to apply the regulatory framework fairly, discriminating against the claimant, and indirectly expropriating its investment. Croatia raised four jurisdictional objections: that the BIT's dispute resolution clause was inapplicable due to EU law, lack of consent, lack of jurisdiction ratione materiae, and lack of jurisdiction ratione temporis over pre-1 April 2011 claims. The tribunal rejected the first three objections but partially upheld the fourth, limiting jurisdiction to events after 1 April 2011. On the merits, the tribunal found that Croatia breached Article 3(1) (fair and equitable treatment) due to HAKOM's complete abdication of its regulatory duties in supervising the incumbent's prices and discounts, and a bad-faith attempt to re-monopolize the market in early 2013. However, the tribunal dismissed the expropriation claim and all claims for damages because the claimant failed to prove a causal link between the breach and its losses, and did not provide a separate damages calculation for the specific breach. The tribunal ordered Croatia to pay the claimant's costs (USD 554,616.31 and EUR 3,659,607.49).
The detail
Parties: B3 Croatian Courier Coöperatief U.A. v. Republic of Croatia (
Case number: ICSID Case No. ARB/15/5
Outcome: Tribunal found Croatia breached Article 3(1) of the BIT but dismissed all claims for damages; ordered Croatia to pay Claimant's costs.
Applicable law: Agreement on Encouragement and Reciprocal Protection of Investments between the Republic of Croatia and the Kingdom of the Netherlands (BIT); ICSID Convention; ICSID Arbitration Rules
Issues in play: The case involved the interaction between EU law and the BIT, specifically whether EU accession affected the BIT's dispute resolution clause, and the standard of fair and equitable treatment under the BIT.
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