Ioan Micula, Viorel Micula and others v. Romania [II]
ICSID · Investment (ICSID and treaty) · Romania · 5 Mar 2020
Why it matters
This award is the second ICSID case brought by the Micula brothers against Romania. It addresses the Achmea objection to intra-EU BIT arbitration, upholding jurisdiction despite EU law challenges. The tribunal also clarified that claims arising before the BIT's entry into force are outside its temporal scope. The case is significant for its detailed analysis of fair and equitable treatment and full protection and security in the context of Romania's regulatory changes in the alcohol sector.
Summary
The case involves Swedish investors (the Micula brothers and their Romanian companies) who invested in Romania's alcohol production and distribution sector. They claimed that Romania breached the Sweden-Romania BIT by revoking tax incentives and other measures, harming their investments. Romania raised several objections, including that the BIT was incompatible with EU law following the CJEU's Achmea decision, and that some claims (the Mineral Water Contract) arose before the BIT entered into force. The tribunal rejected the Achmea objection, finding that the parties' consent to ICSID arbitration was valid and not affected by EU law. However, it upheld the temporal objection, ruling that the Mineral Water Contract claim was outside its jurisdiction because the dispute arose before the BIT's effective date. On the merits, the tribunal found that Romania's actions did not violate fair and equitable treatment, full protection and security, or the prohibition on unreasonable/discriminatory measures. The claimants failed to prove legitimate expectations or a stable legal framework. Consequently, all liability claims were dismissed, and the claimants were ordered to bear 75% of the arbitration costs and 75% of Romania's legal fees.
The detail
Parties: Ioan Micula, Viorel Micula and others v. Romania [II]
Case number: ICSID Case No. ARB/14/29
Outcome: Romania prevailed; all claims dismissed. Claimants ordered to pay 75% of arbitration costs and 75% of Romania's legal fees.
Applicable law: Sweden-Romania BIT (2002); ICSID Convention; EU law (Achmea objection)
Issues in play: Intra-EU BIT compatibility with EU law (Achmea) vs. consent under ICSID Convention; also temporal jurisdiction for pre-BIT claims.
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