Singapore Addresses Intra‑EU Objection For The First Time: DNZ V DOA And NextEra V Spain

Singapore courts addressed the intra‑EU objection to investor‑State arbitration for the first time, rejecting Achmea and Komstroy challenges and aligning with English, Swiss and Australian courts

In two decisions handed down in early 2026, the Singapore courts addressed – for the first time – the intra‑EU objection to investor‑State arbitration. In rejecting the Achmea- and Komstroy-based challenges, the Singapore courts adopted an approach that aligns closely with the prevailing practice of English, Swiss and Australian courts.

In DNZ v DOA and another [2026] SGHC(I) 1, the Singapore International Commercial Court (SICC) rejected an EU Member State’s attempt to set aside an Energy Charter Treaty (ECT) award on the basis that Article 26 of the ECT was inapplicable to intra‑EU disputes. Shortly thereafter, in NextEra Energy Global Holdings BV and another v Kingdom of Spain [2026] SGHC 43, the General Division of the High Court also rejected EU‑law‑based objections raised in resistance to the registration and enforcement of an ICSID award.

Taken together, the decisions show how the Singapore courts addressed Achmea‑ and Komstroy‑based objections in the specific procedural and treaty contexts before them, finding that intra‑EU objections rooted in EU constitutional law do not undermine the validity or enforceability of investor‑State arbitration agreements as a matter of international law before the Singapore courts.

The intra‑EU objection: Achmea and Komstroy in context

The intra‑EU objection originates in the Court of Justice of the European Union’s (CJEU) decision in Achmea, which held that investor‑State arbitration clauses in intra‑EU bilateral investment treaties (BITs) were incompatible with EU law. That reasoning was subsequently extended in Komstroy, where the CJEU held that the dispute resolution clause found in Article 26 of the ECT was inapplicable to disputes between an EU investor and an EU Member State.

The CJEU’s reasoning was that the submission of disputes involving EU Member States to arbitration under intra-EU BITs or Article 26 of the ECT undermines the autonomy and uniform application of the EU legal order. It was noted that such arbitration removes disputes that may require the interpretation or application of EU law from the EU judicial system, without any mechanism for arbitral tribunals to make preliminary references to the CJEU under Article 267 of the Treaty on the Functioning of the European Union (TFEU). This, in the Court’s view, compromises the CJEU’s exclusive role as the final arbiter of EU law and infringes Member States’ obligation under Article 344 TFEU not to submit disputes concerning EU law to any forum other than those provided for in the EU Treaties. 

Following Komstroy, EU Member States have frequently argued that they lack capacity under EU law to consent to investor‑State arbitration in intra‑EU disputes, and that any such arbitration agreement is invalid. A number of courts within the EU have accepted aspects of this position, and in some cases have annulled ECT awards on intra‑EU grounds.

The question addressed by the Singapore courts was whether those EU‑law principles have the same effect when raised before a non‑EU court, either at the seat or at the enforcement stage.

DNZ v DOA: the intra‑EU objection at the seat

In DNZ v DOA, the respondent State applied to set aside a Singapore‑seated UNCITRAL award rendered under Article 26 of the ECT, arguing, amongst other grounds, that the tribunal lacked jurisdiction under Achmea and Komstroy because the dispute was intra‑EU. In particular, it argued that EU law was international law when applied to relations between EU Member States, and that the principle of primacy of EU law overrides the conflict rules contained in the Vienna Convention on the Law of Treaties (VCLT).

The SICC rejected that objection. The court held that the existence and validity of the arbitration agreement fell to be determined under international law and that “the rules protecting the integrity of the EU legal system are not relevant rules of international law within the meaning of the rule of interpretation of Art 31(3)(c) of the VCLT” (at [37]). In other words, whilst EU law has primacy within the EU legal order, it does not determine the applicable law in proceedings before non‑EU courts and does not bind courts of third States.

The SICC characterised Achmea and Komstroy as decisions concerned with the autonomy of the EU legal order, rather than expressions of general international law. As such, they did not affect the validity or application of Article 26 of the ECT when examined by a non‑EU seat court.

The court further emphasised the multilateral nature of the ECT, rejecting the line of argument often advanced by EU Member States that although the ECT is formally multilateral, Article 26 operates in substance as a set of bilateral arbitration offers between pairs of States. On that view, EU Member States have argued that they could treat the arbitration offer as implicitly withdrawn or disapplied in their mutual (intra‑EU) relations, while leaving it intact vis‑à‑vis non‑EU Contracting Parties.

The Singapore court disagreed with that characterisation. It emphasised that the ECT is a single multilateral treaty, concluded and binding on all Contracting Parties on the same terms. Article 26 is therefore an obligation each Contracting Party owes to all other Contracting Parties collectively, not a bundle of severable bilateral arrangements that can be selectively switched off between particular States. If EU Member States had intended to preserve the application of EU law between themselves while maintaining the ECT regime externally, this would ordinarily have been achieved through an express disconnection clause—a well‑known drafting device in EU treaty practice. The absence of such a clause was significant, because it indicated that the ECT, as concluded, did not contemplate any carve‑out for intra‑EU disputes, and left no basis for courts to imply one by reference to EU law.

In DNZ v DOA, the SICC also rejected objections based on subject‑matter jurisdiction, fork‑in‑the‑road, public policy and natural justice, thus refusing the set aside application in its entirety.

NextEra v Spain: the intra‑EU objection at the enforcement stage

In NextEra v Spain, Spain sought to resist the registration and enforcement in Singapore of an ICSID award, relying in part on EU‑law‑based arguments following Achmea and Komstroy. Although the case arose in the context of state immunity and the ICSID Convention, Spain’s position also rested on the proposition that EU law negated its consent to investor‑State arbitration.

The High Court rejected that argument. It held that Spain’s accession to the ICSID Convention constituted a clear submission to arbitration and to the Convention’s enforcement regime, and that EU‑law considerations did not revive state immunity or undermine that consent under Singapore law.

While the court did not undertake the same detailed analysis of Article 26 ECT as in DNZ v DOA, its reasoning reflected the same underlying premise: EU constitutional principles do not control the outcome of proceedings before the Singapore courts or displace Singapore’s obligations under international treaties.

Spain’s additional arguments based on state immunity and the interests of justice were likewise dismissed, hence the application to set aside the registration order was dismissed.

Comparative observations

The reasoning adopted by the Singapore courts resembles reasoning found in certain decisions from Switzerland, England and Australia, decided in their own statutory and treaty contexts, which have generally declined to give effect to intra‑EU objections at the post‑award or enforcement stage, on the basis that:

• EU law primacy is an internal feature of the EU legal order;
• It does not operate as a rule of international law applicable before third‑State courts; and
• Multilateral treaties such as the ECT and the ICSID Convention continue to apply according to their terms outside the EU.

In that respect, the Singapore courts’ reasoning overlaps with reasoning found in certain decisions from those jurisdictions. The Singapore courts similarly approached EU law as relevant only insofar as it formed part of applicable international law, rejecting the notion that EU constitutional doctrines of autonomy or primacy could, of themselves, operate as conflict rules or invalidate arbitration agreements before a third‑State court.

Comment

Since the Achmea and Komstroy decisions, the EU has dismantled the intra-EU bilateral investment treaty regime through the Agreement for the Termination of Bilateral Investment Treaties between the Member States of the European Union in 2020. 

Additionally, the EU has withdrawn from the ECT with effect from mid-2025. Existing investments remain covered by the ECT’s substantive protections for the next 20 years due to the operation of the ECT’s Article 47(3) sunset clause, providing investors with certainty insofar as the treaty protections remain in force.

These decisions mark an important development in Singapore arbitration jurisprudence, in that the Singapore courts have, for the first time, addressed intra‑EU objections directly. They illustrate how such objections are analysed in the specific procedural and treaty contexts before the courts, and the limits the Singapore courts placed, in these cases, on the relevance of Achmea and Komstroy when applied outside the EU legal order. 

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