Veolia v Republic of Lithuania: A Case on the Legality of the Suspended Intra-EU Investment Arbitration and the Question of Lis Pendens

This article addresses the issue of parallel proceedings in suspended arbitration cases based on intra-EU bilateral investment treaties. The furthering of such disputes was declared illegal by the recent CJEU decision in PL Holdings case. However, not all of them were terminated by the agreement of the parties. The said illegality of such proceedings might prevent Governments of the EU Member States to attend the hearing or implement the award, but this alone cannot force the investor to scrap the claim. The pertinent example of the investment dispute in Veolia Environnement S.A. and Others v. the Republic of Lithuania provides additional argument for the investor to hold onto the arbitral tribunal. Lithuanian courts refused so far to accept the Government’s counterclaim avoiding the duplication of the proceedings in the same case. Moreover, Supreme Court’s decision provides a far-reaching interpretation on the nullity of all inter EU arbitration agreements ever concluded. The following analysis provides some certainly interesting details.