By Deborah Kirk, Charles Courtenay, Christian Engelhardt, Yasmina Borhani and Andrea Stout

Germany’s constitutional court, the Bundesverfassungsgericht, has requested that the German President hold off on signing the legislation ratifying the Unified Patent Court (UPC) and the Unitary Patent (UP) following a constitutional complaint from an unnamed individual. The court did not disclose the nature of the complaint and only stated that it will investigate it as soon as possible in order to avoid delays. Delays in Germany will considerably affect the implementation of the UPC across Europe as Germany is one of three counties (including the United Kingdom and France) required to ratify the Unified Patent Court Agreement (UPC Agreement), the international agreement which brings these measures into effect. Ten other member states must also ratify the agreement.

The legislation, which will implement the European legislation at the national level in Germany, has already been approved by the other legislative bodies, the Bundestag and the Bundesrat, and is now only awaiting the signature of the German President, Frank-Walter Steinmeier. A court spokesperson said that Steinmeier has agreed to delay signing the legislation until the investigative ruling has been completed, which has been described as the “typical” approach.

By Michael Green, Elisabetta Righini, Joern Kassow, Rosa Espin, Eun-Kyung Lee, and Cesare Milani.

On 15 February 2017, the European Commission (the Commission) sent final warnings (a Reasoned Opinion) to France, Germany, Italy, Spain and the United Kingdom for failing to comply with the air pollution limits for nitrogen dioxide (NO2). Under EU law, Directive 2008/50/EC on air quality and cleaner air for Europe (the Directive) sets air quality limits that cannot be exceeded anywhere in the EU and obliges Member States to limit the exposure of citizens to harmful air pollutants.

The Commission stated in its report, “… while it is up to the Member State authorities to choose the appropriate measures to address exceeding NO2 limits, much more effort is necessary at local, regional and national levels to meet the obligations of EU rules and safeguard public health”.  The Commission has therefore urged the five Member States to take action to ensure good air quality and safeguard public health. These “final warnings” may have serious consequences.  If the said Member States fail to comply with the Directive within two months, the Commission may decide to take the matter to the Court of Justice of the EU (the CJEU).

While the Commission’s Reasoned Opinion is focused on levels of NO2, it is widely acknowledged that air quality standards (which generally concern NO2 and particulate matter – especially PM10 – levels) in many parts of Europe are poor.  As air quality gains increasing media attention and demands for improvement, we have briefly summarised the position on air quality standards (whether NO2, particulate matter or more generally) in each of the countries that are the subject of the most recent Reasoned Opinion.

By Catriona E. Paterson

On 20 January 2017, the English Commercial Court handed down an important judgment addressing the intersection of a State’s public international law obligations in investment treaty arbitration and its obligations under European Union law. In Micula & Ors v. Romania,[i] Mr Justice Blair stayed enforcement of an ICSID arbitration award on the basis that the court could not, under its EU law obligations, enforce an award in circumstances where the European Commission had prohibited Romania from making any payment under that award to the claimants, and a challenge to that decision was pending before the EU courts.

Background

The underlying dispute concerned the premature withdrawal by Romania of tax incentives introduced to attract investment into certain disadvantaged regions. The withdrawal of the incentives was done as part of Romania’s preparations for accession to the EU, on the basis that the incentives were deemed incompatible with EU rules on State aid. The Micula brothers and their associated companies (the Claimants) – who had invested heavily in Romania in reliance on the tax incentives – alleged that the scheme’s premature termination and other conduct of the State amounted to a breach of Romania’s obligation to treat investors fairly and equitably as required by the Sweden-Romania bilateral investment treaty. On 11 December 2013, an arbitral tribunal established in accordance with the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) agreed and awarded the Claimants in excess of Romanian Leu 750 million in damages and pre-award interest.[ii]

The EC has, from the outset, taken the view that the payment of damages to the Claimants would constitute new, unlawful State aid as a matter of EU law.[iii] Following the 2013 ICSID award in the Claimants’ favour, the EC issued an injunction obliging Romania to suspend any enforcement action. This was followed in March 2015 by a Final Decision of the EC which concluded that execution of the ICSID award, including payment of damages, would constitute new (unlawful) State aid.[iv] The Claimants have challenged that Decision in annulment proceedings before the General Court of the European Union (the GCEU). As at the date of this article, that challenge is pending.