Strabag et al. v. Germany: The First Ever Adverse ISDS Award against Germany

On 18 December 2024, an ICSID arbitral tribunal rendered an intra-EU Energy Charter Treaty (ECT) investor-state award ordering Germany to pay damages to Austrian claimants Strabag SE’s subsidiaries Erste Nordsee-Offshore Holding (NOH) GmbH and Zweite NOH GmbH. The dispute arose from losses incurred by the Austrian investors following unexpected, retrospective multiple amendments governing the development of offshore windfarms in the Northern and Baltic Sea, in particular of the German Renewable Energy Sources Act. These amendments abolished not only the existing feed-in-tariff regime for renewable energy projects but replaced existing rights to obtain permits for the offshore projects with a centralized public tender procedure. The ICSID tribunal unanimously upheld its jurisdiction despite the intra-EU law objections submitted by Germany as preliminary objection under Article 41 (5) ICSID Arbitration Rules (2006) and later during the ongoing proceedings relying on additional arguments based on the Komstroy and PL Holdings judgments. This is the first ever investor-state adverse arbitration award against Germany. On 31 January 2025, Germany filed a request for rectification of the award, which led to a decision concerning the stay of enforcement on 10 March 2025. On 4 April 2025, the subsidiaries of Strabag SE have filed their petition to recognize and enforce the ICSID arbitral award against Germany with the US District Court for the District of Columbia. In parallel, Germany has formally withdrawn from the ECT effective as of 20 December 2023.