On 23 December 2024, the Svea Court of Appeal (“<span class="news-text_medium">COA</span>”) annulled an arbitral award in <span class="news-text_italic-underline">Poland v Mercuria Energy Group Ltd (Case No T 2613-23)</span>, citing its incompatibility with Swedish public policy. The award, issued in a Swedish-seated arbitration under the Energy Charter Treaty (“<span class="news-text_medium">ECT</span>”), was deemed unenforceable based on the court’s consistent approach to intra-EU investment disputes.
The COA referenced significant rulings from the European Court of Justice (“<span class="news-text_medium">ECJ</span>”), including <span class="news-text_italic-underline">Achmea</span>, <span class="news-text_italic-underline">Komstroy</span>, and <span class="news-text_italic-underline">PL Holdings</span>, as well as the Swedish Supreme Court’s decision in <span class="news-text_italic-underline">Poland v PL Holdings (Case No NJA 2022 p. 965)</span>. The court reaffirmed that intra-EU investment arbitration awards breach fundamental principles of EU law, making their enforcement in Sweden contrary to public policy.
Mercuria challenged the annulment, arguing it violated Article 1, Protocol 1 of the European Convention on Human Rights (“<span class="news-text_medium">ECHR</span>”), which protects property rights, and Article 13 ECHR, which guarantees the right to an effective remedy. However, the COA applied the <span class="news-text_italic-underline">Bosphorus</span> presumption, holding that EU legal principles, when endorsed by the ECJ, are presumed compliant with ECHR protections. The court found no grounds to depart from previous ECJ rulings, maintaining that annulment did not infringe fundamental rights.
This decision aligns with Sweden’s broader judicial approach to intra-EU investment disputes, reinforcing the supremacy of EU legal principles over arbitration awards. The ruling also highlights the challenges in contesting the <span class="news-text_italic-underline">Bosphorus</span> presumption, particularly when national courts defer to the ECJ in determining the compatibility of EU investment frameworks with the ECHR.
