EC files amicus curiae brief in Micula enforcement proceedings in Second Circuit

On 4 February 2016, the European Commission filed an amicus curiae brief in support of Romania's appeal in enforcement proceedings pending before the US Court of Appeals for the Second Circuit.

In December 2013, an ICSID tribunal made an award in favour of Swedish investors, the Micula brothers, finding that Romania had breached the fair and equitable treatment standard in the Sweden/Romania bilateral investment treaty (see Legal update, Breach of fair and equitable treatment standard (ICSID). In 2015, the Commission ordered Romania to recover compensation paid to the Micula brothers pursuant to that award, on the basis that the compensation was incompatible with EU state aid rules (see Legal update, Commission orders Romania to recover incompatible state aid granted in compensation for abolished investment aid scheme). The Miculas' challenge to the Commission's order is pending before the Court of Justice of the European Union (CJEU).

The Miculas are also seeking enforcement of the award in the US. In New York, the District Court of the Southern District of New York (SDNY) recognised the award and subsequently refused to vacate its judgment. Romania has appealed against that decision.

In its amicus curiae brief in support of the appeal, the Commission argues that in refusing to vacate its judgment, the district court failed to give due weight to the Commission's order and to the existence of parallel EU judicial proceedings. According to the Commission, Romania is prohibited from complying with the award as a matter of EU law: if Romania complies with the District Court's judgment, this will undermine the Commission's order because the judgment orders Romania to pay the Miculas the same compensation that the Commission's order prohibits. Furthermore, the District Court's judgment interferes with the proceedings before the CJEU regarding the validity of the Commission's order, by requiring Romania to pay the award before the CJEU has decided that same issue.

Case: Micula v Government of Romania, No. 15-3109-cv (2d Cir.) (US Court of Appeals for the Second Circuit).