When An Arbitral Award Becomes State Aid

An arbitral award is usually expected to bring a dispute to an end. Within the European Union, however, an award against a Member State or a public entity may open an entirely new front: whether its payment or enforcement would amount to unlawful State aid under Articles 107 and 108 of the Treaty on the Functioning of the European Union (“TFEU”). This question has become particularly prominent in intra-EU investment arbitration, most notably through the Micula litigation and, more recently, the European Commission’s decision in Antin.¹

The issue is not limited to investment arbitration. It may also arise in commercial disputes whenever the performance of a contract, a settlement or the satisfaction of an award involves State resources and confers an advantage that would not have been available under ordinary market conditions. In such cases, the fact that a claimant has established a contractual or treaty entitlement does not necessarily mean that the resulting payment can lawfully