Micula & Ors v Romania (Rev 1) [2018] EWCA Civ 1801 (27 July 2018)

Micula & Ors v Romania (Rev 1) [2018] EWCA Civ 1801 (27 July 2018)

The Court held that the Kapferer principle does not require enforcement of the ICSID award where this would circumvent or frustrate the effective application of EU State aid law, as determined by the Commission. The duty of sincere cooperation under Article 4(3) TEU obliges national courts to refrain from decisions conflicting with Commission State aid decisions. The 1966 Act does not override this duty. Therefore, enforcement of the award must be stayed pending the outcome of the EU court proceedings challenging the Commission's decision.

Citation
[2018] EWCA Civ 1801
Parties
Claimant / Appellant: Viorel Micula; Claimant / Appellant: Ioan Micula; Claimant / Appellant: S. C. European Food S. A.; Claimant / Appellant: S. C. Starmill S. R. L.; Claimant / Appellant: S. C. Multipack S. R. L.; Defendant / Respondent: Romania; Intervener: European Commission
Jurisdiction
England and Wales
Judgment Date
27 July 2018
Procedural Posture
Appeal / Court of Appeal Judgment on Appeal From Commercial Court Orders Staying Enforcement and Refusing Security
Outcome
Appeal dismissed; stay of enforcement of the ICSID award upheld; refusal to order security upheld.
Legal Topics
Enforcement of ICSID Awards, Res Judicata, State Aid Prohibition, Conflict Between International and EU Law, Duty of Sincere Cooperation, Kapferer Principle
International Arbitration European Union Law State Aid Law Public International Law Enforcement of ICSID Awards Res Judicata State Aid Prohibition Conflict Between International and EU Law +2 more

Case Brief

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Parties

Viorel Micula

Claimant / Appellant

Ioan Micula

Claimant / Appellant

S. C. European Food S. A.

Claimant / Appellant

S. C. Starmill S. R. L.

Claimant / Appellant

S. C. Multipack S. R. L.

Claimant / Appellant

Romania

Defendant / Respondent

European Commission

Intervener

Procedural Posture

Appeal / Court of Appeal Judgment on Appeal From Commercial Court Orders Staying Enforcement and Refusing Security

Legal Issues

  1. 1 Whether the Kapferer res judicata principle requires enforcement of the ICSID award despite an EU Commission State aid decision
  2. 2 Whether the 1966 Act implementing the ICSID Convention obliges the English court to enforce the award regardless of EU law
  3. 3 Whether the court's duties under EU law or under the ICSID Convention prevail in case of conflict

Ratio Decidendi

The Court held that the Kapferer principle does not require enforcement of the ICSID award where this would circumvent or frustrate the effective application of EU State aid law, as determined by the Commission. The duty of sincere cooperation under Article 4(3) TEU obliges national courts to refrain from decisions conflicting with Commission State aid decisions. The 1966 Act does not override this duty. Therefore, enforcement of the award must be stayed pending the outcome of the EU court proceedings challenging the Commission's decision.

Court Disposition

Appeal dismissed; stay of enforcement of the ICSID award upheld; refusal to order security upheld.

Orders

  • Enforcement of the ICSID award is stayed pending determination of the proceedings before the General Court of the EU or further order.
  • No order for security as a condition of the stay.