Judgment in the Svea Court of Appeal, 20 December 2023. Case No. T 12646-21

Summary: The Svea Court of Appeal ruled on the invalidity of an arbitral award in the case between the Republic of Poland and Festorino Invest Limited, Fosontal Limited, Peter Derendinger, Petra Salesny, and Petr Rojicek. The case concerned whether the arbitral award, rendered under the Energy Charter Treaty, was compatible with EU law.

The Court of Appeal noted that the arbitral award was made in an investment dispute between a Member State (Poland) and investors from other Member States (Festorino Invest Limited, Fosontal Limited, Petra Salesny, and Petr Rojicek) pursuant to Article 26 of the Energy Charter Treaty. The Court referred to the decisions of the Court of Justice of the European Union (CJEU) in Achmea, Komstroy, and PL Holdings, which established that arbitration clauses in international investment protection agreements between EU Member States are incompatible with EU law.

The Court of Appeal concluded that upholding the arbitral award would be manifestly incompatible with the public policy of the Swedish legal system. Therefore, the award was declared invalid under section 33(1)(2) of the Swedish Arbitration Act. The Court also addressed the investors' argument that annulment of the award would violate the European Convention on Human Rights (ECHR), but found no grounds to deviate from the CJEU's interpretation.

As a result, the Court of Appeal declared the arbitral award invalid and ordered Poland to compensate the investors for their legal costs.