Exploring Investment Arbitration Issues in Front of German Courts: How Far Does the Komstroy Shadow Reach?

Abstract

This article examines the evolving engagement of German courts with investment arbitration, particularly in light of the Court of Justice of the European Union's judgments in Achmea and Komstroy. While Germany has played only a limited role as a respondent in investor–State dispute settlement, its domestic courts have been unusually active in scrutinising arbitration agreements, annulling awards, and granting pre-emptive remedies such as anti-arbitration injunctions. The analysis situates recent German case law within the broader context of European Union law, the ICSID Convention, and the Energy Charter Treaty, highlighting how the Komstroy judgment has reshaped the judicial approach to intra EU arbitration. Decisions of the Federal Court of Justice, Federal Constitutional Court, and Regional Courts are examined to illustrate three trends: the proactive reliance on EU law to deny jurisdiction in intra EU arbitrations; the rejection of attempts to extend Komstroy reasoning to extra EU treaties; and the nuanced approach to enforcement actions initiated outside the Union. The article argues that German courts have positioned themselves as key actors in asserting the primacy of EU law over conflicting public international law obligations, with significant implications for the coherence and future of investment arbitration both within and beyond the EU.