UniCredit Bank Austria AG and Zagrebačka Banka d.d. v. Republic of Croatia

At a glance

Parties

UniCredit Bank Austria AG (Austria) and Zagrebačka banka d.d. (Croatia) v. Republic of Croatia

Case no.

ICSID Case No. ARB/16/31

Forum and rules

ICSID Convention; ICSID Arbitration Rules 2006; place of proceeding London

Treaty

Austria–Croatia BIT (in force 1 November 1999)

Tribunal

Lucinda A. Low (President), Klaus Reichert, Miloš Olík

Sector

Banking; consumer credit (Swiss franc loans)

Outcome

The parties settled. On 16 July 2021 the Tribunal took note of the discontinuance under ICSID Arbitration Rule 43(1). No award on the merits was rendered.

The dispute

UniCredit Bank Austria AG, an Austrian bank, and its Croatian subsidiary bank Zagrebačka banka d.d. (ZABA) brought claims against Croatia under the Austria–Croatia BIT and the ICSID Convention. Croatia's press release says the claims arose from the 2013 and 2015 amendments to the Consumer Credit Act and the Credit Institutions Act. These amendments led to the conversion of loans denominated in Swiss francs. Croatia objected to jurisdiction, mainly on the ground that the CJEU's Achmea judgment had "vitiated" its consent under Article 9 of the BIT. The case was fully pleaded and heard. The parties then settled before any award.

Key holdings

1. The Tribunal dismissed Croatia's Article 9 (Achmea) objection. It found no incompatibility between Article 9 of the BIT and the EU acquis as of the date the case was registered. Order ¶ 27 (citing Article 9 Decision ¶ 137)
2. The Tribunal refused Croatia's request to order the Claimants not to share the Article 9 Decision with a claimant in a similar case. Order ¶ 33
3. The Tribunal denied the European Commission's first application to file a written submission (PO6). It granted the second application, on conditions (PO10). Order ¶¶ 25, 54
4. On 24 March 2020 the Tribunal ruled on Croatia's Application for Reversal of the Article 9 Decision and on jurisdiction and admissibility. The published order does not state the content of that decision. Order ¶ 87
5. After the parties reported a settlement, the Tribunal took note of the discontinuance of the proceeding under ICSID Arbitration Rule 43(1). Order ¶¶ 94–96

Procedural history

1. 6 September 2016ICSID receives the Request for Arbitration. It registers the Request on 16 September 2016.
2. 13 June 2017The Tribunal is constituted.
3. 25 April 2018Procedural Order No. 4 bifurcates the Achmea/Article 9 objection for decision as a preliminary question.
4. 12 October 2018Decision on the Respondent's Article 9 Objection: the objection is dismissed.
5. 24 April – 3 May 2019Hearing on Jurisdiction and the Merits at the International Dispute Resolution Centre in London. The European Commission files an amicus curiae brief on 27 April 2019.
6. 24 March 2020Decision on the Application for Reversal of the Article 9 Decision and on Jurisdiction and Admissibility.
7. 18 June 2020The proceeding is suspended at the parties' joint request. The suspension is later extended to 30 June 2021.
8. 5 July 2021Croatia's Ministry of Finance announces that the bank arbitrations over the Swiss franc loan conversion were discontinued as of 30 June 2021.
9. 16 July 2021Order taking note of the discontinuance of the proceeding.

Tribunal, counsel and experts

Decided by

• Lucinda A. Low President — appointed by the parties jointly
• Klaus Reichert Co-arbitrator — appointed by the claimant
• Miloš Olík Co-arbitrator — appointed by the respondent

For the claimant

Allen & Overy LLP

For the respondent

Državno odvjetništvo Republike Hrvatske (Office of the Attorney General of the Republic of Croatia) · Volterra Fietta

Experts

James Dow (claimant) · Richard Caldwell (claimant) · Elaine Buckberg (claimant) · Phillip Swagel (claimant) · Marko Baretić (claimant) · Igor Gliha (claimant) · Alan Dashwood (claimant) · Silvija Petrić (respondent) · Emilia Mišćenić (respondent) · Philip Haberman (respondent) · Vikki Wall (respondent) · Patrice Muller (respondent) · Chudozie Okongwu (respondent) · Paul Craig (respondent)

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Keywords

• UniCredit
• Zagrebačka banka
• ZABA
• Swiss franc loans
• CHF loan conversion
• Consumer Credit Act
• banking
• Achmea
• intra-EU BIT
• Austria–Croatia BIT
• European Commission amicus curiae
• Termination Treaty
• jurisdiction
• settlement
• discontinuance
• ICSID Arbitration Rule 43(1)
• bifurcation

Summary generated with AI from the published documents — refer to the award for the authoritative text.