News & Views

ISDS Trends in the Nordic Countries

22 March 2021

Authors: Anna-Maria Tamminen, Pontus Ewerlöf and Aapo Heinäsmäki


Investor-state dispute settlement (“ISDS”) has traditionally touched the Nordic countries when Nordic investors have sought to enforce their rights elsewhere in the world, or for procedural reasons when Stockholm has been the seat of arbitration for ISDS disputes often arbitrated under the Arbitration Rules of the Stockholm Chamber of Commerce (“SCC”).  

In the last decade, Nordic investors have also initiated proceedings against Western European states under the Energy Charter Treaty (“ECT”). The latest development in this type of a case came on 5 March 2021 when Germany communicated its decision to settle the disputes stemming from Germany’s phase-out of nuclear energy. Among the settled disputes is the closely monitored Vattenfall v. Germany (II) case initiated by Vattenfall, a Swedish state-owned energy company, which reportedly will receive over EUR1.4 billion in compensations.

Last year, certain Nordic countries also became subject to investor-state disputes as respondents, as investment treaty claims were launched against Sweden, Norway, and Denmark, a first for each respectively.

Additionally, there are topical ISDS developments taking place at the EU level, namely the status of the Multilateral Investment Court and the status of intra-EU investment disputes following the ruling of the European Court of Justice (“ECJ”) in Achmea (C-284/16). These changes naturally also influence ISDS in the Nordic countries.

Cases Involving Nordic Investors

Currently, Nordic investors are involved in several cases that are either pending or subject to set aside proceedings before national courts or ICSID annulment proceedings. Danish investors are, for example, pursuing four separate cases under the ECT concerning legal reforms affecting the renewable energy sector. The sectoral representation is unsurprising, considering that a number of Nordic companies are advanced in the development of clean energy. Swedish investors also have several pending cases against various states. However, these cases are not focused on a particular economic sector, unlike those initiated by Danish investors.

Norwegian investors are currently not involved in any publicly known ISDS proceedings. There are currently no reported ISDS cases involving Finnish nationals as claimants either. Despite Finland not currently being involved in any ISDS cases, the subject has received more attention in Finland recently, as Uniper, a German energy company whose majority owner is Fortum (a Finnish state-owned energy company), has threatened to launch an ISDS claim under the ECT against the Netherlands for its plan to phase out coal power.

Investment Treaty Claims Against Nordic Countries

In 2020, separate ISDS cases were launched against Sweden, Norway, and Denmark, and in 2021, also Huawei initiated an ISDS case against Sweden. No continental Nordic country had been the target of such investment claims before that. Iceland, however, was a respondent in an investor dispute that was settled in 1985. The following disputes initiated in 2020 and 2021 are still in their early stages:

  • Aura Energy v. Sweden
    • Aura Energy, an Australian mining firm, has initiated proceedings against Sweden. The dispute relates to Sweden’s ban on uranium mining. The investor has alleged that Sweden has breached its ECT obligations, basing its claims on the expropriation clause and the FET standard contained in the ECT. The dispute is at the prenotification stage.
  • Huawei v. Sweden
    • Huawei, a Chinese telecom firm, has initiated proceedings against Sweden. The dispute relates to Sweden banning Huawei from taking part in its 5G network operations. The investor has alleged that Sweden has breached its obligations under the China-Sweden BIT.
  • Peteris Pildegovis and SIA North Star v. Kingdom of Norway (ICSID Case No. ARB/20/11)
    • The dispute relates to fishing rights. The investor has alleged that Norway has breached its obligations under the Norway-Latvia BIT, namely the expropriation clause, the FET standard, and the MFN standard.
  • Donatas Aleksandravicius v. Kingdom of Denmark (ICSID Case No. ARB/20/30)
    • The dispute relates to a construction project. The investor has alleged that Denmark has breached its obligations under the Lithuania-Denmark BIT.

Although there are currently no reported cases against Finland, considering the trends in the Nordic countries, it is likely only a matter of time before Finland becomes involved in such a case as well.


In 2018, the ECJ issued its ruling in Achmea, holding that Articles 267 and 344 TFEU must be interpreted as precluding an arbitration agreement in an intra-EU bilateral investment agreement.  While many EU member states went on to terminate their intra-EU BITs as a result of the judgment, Finland and Sweden did not. There are also a number of set aside cases pending before Swedish courts as a result of the Achmea judgment, and two of these disputes have been referred to the ECJ for a preliminary ruling, namely the case between the Republic of Poland and PL Holdings (C-109/20) and the case between Italy and Athena Investments et al.

Since Achmea, ECT tribunals have consistently found that they have jurisdiction in intra-EU investment disputes, as they have found that the findings made in Achmea do not apply to disputes based on a multilateral treaty such as the ECT. However, in February 2021, the Svea Court of Appeal agreed to ask the European Court of Justice whether the Achmea ruling also applies to ECT disputes. Furthermore, in March 2021, Advocate General Szpunar gave a non-binding opinion in case Republique de Moldavie v. Komstroy (C-741/19) dealing with the question of whether or not ad hoc tribunals have jurisdiction under the ECT, stating that the findings made in Achmea should indeed be applicable to ECT disputes as well.

In case C-109/20, the court has been asked to determine whether the Achmea ruling also prevents intra-EU investment arbitrations that are allegedly not based on a bilateral investment treaty, but rather on an alleged, separate arbitration agreement.

These ongoing cases before the ECJ will likely clarify the status of arbitration in relation to intra-EU investment treaty claims.

The EU is also working on changing the settlement of investment disputes through political means, and not just through ECJ rulings. In the working group of the United Nations Commission on International Trade Law (UNCITRAL WG III), the EU has actively advocated for a permanent Multilateral Investment Court, which would have permanent judges — a system that would differ greatly from the current system, in which the parties to a dispute may select the arbitrators to hear the case.  In essence, the system proposed by the EU would have a court of first instance and an appeal mechanism. The Investment Court would have a pool of permanent judges, and judges hearing a given case would be selected randomly from this pool.

The EU has already included provisions on this type of an ISDS system on its more recent investment treaties. However, no such court has yet been founded. Although the ECJ confirmed in 2019 that such a system would be compatible with EU law, it may well prove to be difficult to attract other countries to become members of the court. It is also uncertain whether the EU’s solution would fix certain issues linked to ISDS proceedings.