Strabag complains of over 350 million euros against Germany - the dispute escalated!

Strabag complains of over 350 million euros against Germany - the dispute escalated!

Washington, D.C., USA - The construction group Strabag plans to issue an arbitration over 241 million euros against Germany in front of a US district court in Washington, D.C. enforce. This is the result of a procedure in which Strabag demands compensation for her investments in wind turbines in the North Sea. Max Hollweg from Attac Austria criticizes that the lawsuit violates applicable EU law. The issue was obtained on the basis of the Energy Charter Treaty (ECT) which regulates controversial investment issues.

In addition to the 241 million euro compensation, the arbitration court also granted 92.5 million euros in interest and attorney costs, which raises the total amount to almost 350 million euros - almost three times the original investment of 122 million euros. Strabag had also successfully won a compensation of three million euros before the German Federal Constitutional Court.

legal situation and EU guidelines

In a significant judgment in 2021, the European Court of Justice found that arbitration lawsuits from EU companies against EU member states are inadmissible. The EU countries also do not consider the ect within the Union to be applicable. Despite these legal framework, private arbitration courts put on their own judgments and continue to demand compensation payments from states.

Germany has not yet responded to Strabag's current arbitration saying and there is a risk of the collection of German assets in the United States. It is noteworthy that Germany has already decided to leave the ect. In contrast, Austria has not yet taken this step. In May 2024, the EU decided to also step out of the ect to no longer give fossil corporations the opportunity to sue states for climate protection measures.

global developments in investment protection

The problem of parallel justice is not only shown in Europe. The United States has decided not to negotiate parallel justice in future trade contracts, which also includes the ECT. This is part of a larger trend that countries such as South Africa and Brazil have also followed that have withdrawn from investment agreements with ISDS clauses. India also plans to take similar steps while Indonesia wants to let contracts with ISDS clauses expire.

The merchant block Mercosur was completely excluded, which underlines the growing skepticism of such regulations. However, these changes are in contrast to the EU trade agreements, in which the parallel justice and arbitration proceedings continue to be used. Despite the critical developments, the Federal Ministry of Economic Affairs and Climate Protection, more modern and more transparent rules in investment protection tries to create more fairer conditions.

Overall, the Strabag case reflects the complex challenges and difficulties in the area of ​​investment protection. The legal structures are changing, and both companies and states have to adapt to new realities. The course of this lawsuit will not only be important for Strabag, but also for the future regulation and the legal framework for international investments.

For further information on the legal aspects of investment protection contracts, readers can visit the articles on Oekonews and the Federal Ministry of Economics and Climate Protection. Further information can be found at Oekonews and bmwk .