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

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Daszko, A. Exploring Investment Arbitration Issues in Front of German Courts: How Far Does the Komstroy Shadow Reach?. German Yearbook of International Law, 67(1), 387-404. https://doi.org/10.3790/gyil.2025.409904
Daszko, Agata "Exploring Investment Arbitration Issues in Front of German Courts: How Far Does the Komstroy Shadow Reach?" German Yearbook of International Law 67.1, 2025, 387-404. https://doi.org/10.3790/gyil.2025.409904
Daszko, Agata (2025): Exploring Investment Arbitration Issues in Front of German Courts: How Far Does the Komstroy Shadow Reach?, in: German Yearbook of International Law, vol. 67, iss. 1, 387-404, [online] https://doi.org/10.3790/gyil.2025.409904

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

Daszko, Agata

German Yearbook of International Law, Vol. 67(2024), Iss. 1 : pp. 387–404 | First published online: June 24, 2025

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NA Agata Daszko, Edinburgh Law School, University of Edinburgh, South Bridge EH8 9YL Edinburgh, United Kingdom

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.

Table of Contents

Section Title Page Action Price
Agata Daszko\nExploring Investment Arbitration Issues in Front of German Courts: How Far Does the Komstroy Shadow Reach? 387
I. Introduction 387
II. The Casting of the Komstroy Shadow: How German Courts Set the Stage 389
A. The EU Aftermath: Achmea and Komstroy 390
B. The International Echo: A Consistency Problem 390
C. The Domestic Reverberation: From Referral to Constitutional Complaint 392
III. Legal Framework: Anti-Enforcement, Anti-Arbitration, and Anti-Suit Mechanisms in German Jurisdiction 393
A. German Courts’ International Jurisdiction 394
B. Anti-Enforcement Procedures in German Law 394
C. Anti-Arbitration Mechanisms in German Law 396
D. Anti-Suit Injunctions in German Law 396
IV. German Courts’ Jurisprudence: Under the Influence of EU Law, Abstemious of Public International Law? 397
A. In Komstroy’s Shadow: To Halt Intra-EU ECT Arbitration 398
B. Adopting Komstroy Shadow and Upholding the Constitution 400
C. Outside of Komstroy’s Shadow: Allowing Extra-EU Arbitration 402
D. Overshadowing Komstroy? Enforcement Proceedings Beyond Germany and the EU 403
V. Outlook and Conclusions: What Lurks in the Shadows? 403