EU court adviser says arbitration clause in investment treaty is legal

BRUSSELS (Reuters) - An arbitration clause in an investment treaty between the Netherlands and Slovakia does not violate EU law, an adviser to the EU’s top court said on Tuesday, in a legal case on an issue that has sparked fierce public debate.

The Advocate General gave his opinion on an arbitration clause contained in an investment treaty stemming from 1991 between the Netherlands and Czechoslovakia, before the latter split into two countries and became a member of the European Union.

In 2008 a Dutch insurer launched arbitration proceedings against Slovakia and was awarded 22.1 million euros ($26.51 million) in damages. Slovakia sought to annul the decision, arguing arbitration treaties violated EU law.

“The arbitration clause in the investment protection agreement concluded between the Netherlands and Slovakia is compatible with EU law,” the Advocate General said.

Arbitration clauses have been sharply debated in the wake of the EU’s efforts to conclude trade deals with other nations and regions, seen by critics as undermining national judiciary processes.

The European Court of Justice usually follows the advice given by the Advocate General.

Reporting by Robert-Jan Bartunek; Editing by Matthew Mpoke Bigg