THE AUTHOR:
Núria Casas, LL.M. Candidate at Columbia Law School
The relationship between arbitration and European Union law has historically been described by Professor Bermann as “two ships passing in the night”. As he has since acknowledged, however, this characterization no longer holds. Instead of remaining at distance, these two fields now appear to be in the course of colliding. In some measure, the notion of “EU public policy”, which has progressively been expanded with the European Court of Justice’s (ECJ) case law, is often regarded as contributing to the increasingly hostile relationship between both disciplines.
This framework served as the basis for a panel discussion held during Columbia Arbitration Day 2026, bringing together Isabelle Michou, Yasmine Lahlou, Roland Ziadé and Doak Bishop, under the moderation of Professor George A. Bermann. The author aims to synthesize their contributions while furthering their analysis.
The notion of public policy is known across jurisdictions as a ground invoked by parties to defeat enforcement or seek annulment of an award. As Doak Bishop explained, drawing upon the decision Parsons & Whittemore Overseas Co. v. Societe Generale de L’Industrie du Papier, 508 F.2d 969, 974 (2d Cir. 1974), public policy is generally limited to “the most basic notions of morality and justice”, encompassing flagrant violations of due process, illegality and corruption. In this regard, Bishop observed, the European Union (EU) has deviated from this pattern by extending the definition of public policy to include a category of norms described by Roland Ziadé as rules of essential importance to the functioning of the European Union, and which courts must regard as forming part of public policy when reviewing or enforcing arbitral awards. These substantive norms may be understood as falling within two broad categories: ordre public de direction which refers to competition law, State aid and sanctions; and ordre public de protection which aims to protect of vulnerable parties, including, in particular, consumers.
To assess the evolution of the concept of EU public policy, our speakers Isabelle Michou and Roland Ziadé analyzed the following decisions rendered by the European Court of Justice.
The notion of EU public policy in relation with international arbitration emerged in the Eco Swiss China Time Ltd v Benetton International NV (Case C- 126/97) [1999] E.C.R. 1-3079. In this decision, the ECJ ruled that national courts must annul arbitral awards violating EU competition law (now Article 101 of the Treaty on the Functioning of the European Union (TFEU)), in order to guarantee compliance with EU public policy if domestic procedural law allows for setting aside awards for public policy violations. Furthermore, it invited Member State courts to do so even if the parties failed to raise the anticompetitive claim or defense, leaving courts the possibility to consider them sua sponte. But the ECJ did not stop there. In two subsequent decisions, Mostaza Claro v Centro Móvil Milenium SL (Case C-168/05) [2006] E.C.R. 1-10421 and Asturcom Telecomunicaciones SL v Cristina Rodríguez Nogueira (Case C-40/08) [2009] E.C.R. I-9579), the ECJ widened the scope of the concept to include EU consumer protection laws. National courts were thenceforth required to examine parties’ claims and defenses related to consumer protection, or to do so on their own motion. They may accordingly annul an arbitral award where such issues were not addressed, or were incorrectly resolved.
In the last few years, the concept of EU public policy has resurfaced in various ECJ rulings concerning arbitration cases. Among them, one can find the Royal Football Club Seraing SA v. FIFA, UEFA and URBSFA (Case C-600/23, ECLI:EU:C:2025:617), decision and most recently, the Reibel case (Case C‑802/24, ECLI:EU:C:2026:110).
In Seraing, the ECJ considered that in the context of mandatory CAS arbitrations, parties must be afforded the opportunity to subject arbitral awards to review by Member State courts on public policy grounds before such awards acquire res judicata effect. Furthermore, the Court made clear that “[t]he freedom of movement for workers, the freedom to provide services and the free movement of capital guaranteed by Articles 45, 56 and 63 TFEU” form part of EU public policy.
These considerations take on a different dimension in the Reibel case—on which a final ruling by the ECJ remains pending— which concerns the restitution of an advance payment made to a Russian entity following the termination of a contract due to the imposition of European sanctions. In this case, an arbitral tribunal ordered the Belgian party to reimburse the advance sum. At the set-aside stage, the Svea Court of Appeal referred several questions to the Court of Justice for a preliminary ruling, including whether the Sanctions Regulation falls within the scope of EU public policy, given that it was adopted on the basis of Article 215 TFEU and forms part of the Union’s external action. Should this be confirmed, it would follow that, in reviewing arbitral awards for compliance with national public policy, Member State courts would also be required to consider EU public policy. They would therefore be empowered to annul awards where arbitral tribunals have misinterpreted sanctions regulations, and to do so of their own motion.
This last case is, however, somewhat distinctive. In its observations, the European Commission argued that a dispute should cease to be arbitrable where it arises out of a contract affected by EU sanctions. While the implications of following the Commission’s position would be far-reaching for arbitration, this remains the only instance in the field of commercial arbitration in which the issue of arbitrability has been expressly raised. It thus prompted our panelists to draw a conceptual distinction between the non-arbitrability of a claim, which operates ex ante to preclude recourse to arbitration altogether, and the ex post review of arbitral awards by Member State courts on public policy grounds at the enforcement stage.
These cases suggest that the concept of EU public policy is and will remain uncertain. As Yasmine Lahlou observed, there is only limited guidance in the case law that would allow for a clear delineation of its scope, and this difficulty is compounded both by the generally broad formulation of EU norms and the additional challenge that EU law does not distinguish between their object and their effects. It would thus be useful to move beyond case-specific developments and articulate a more general framework for determining the contours of EU public policy.
Embracing this challenge, our speaker Roland Ziadé suggested a useful three-step framework for determining whether a norm falls within the scope. First, does the EU rule pursue an objective conferred upon the Union by the Treaties? Second, is the rule sufficiently fundamental to the attainment of a broader protective aim associated with that objective, such as the protection of consumers, or preserving the EU’s external security? And third, is the public interest at stake of such significance as to justify elevating the rule to the status of EU public policy, thereby requiring courts to ensure compliance of their own motion? This test should serve arbitrators for conducting their proceedings and drafting awards in line with the new conception of EU public policy to avoid, or at least limit, EU public policy review by national courts.
As regards the future development of this concept in the case law, we can find some comfort in two considerations. First, as Prof. Bermann pointed out, the expansion of the concept of public policy might entail higher scrutiny at the enforcement stage, including a review de novo, but this does not imply the non-arbitrability of matters falling within its scope. This distinction was clearly affirmed in Eco Swiss, in relation to competition law, and has not been departed from to date. It has only been suggested, in the European Commission’s observations in the Reibel case concerning sanctions, that a different approach might be warranted; however, it remains uncertain whether the European Court of Justice will adopt such reasoning.
Second, as we impatiently wait for the Reibel judgement, guidance may be drawn from the words of Advocate General Biondi, as recalled by Isabelle Michou, who described the Court’s forthcoming preliminary ruling as “an opportunity to write a new chapter in the relationship, sometimes perceived as tortuous, between EU law and out-of-court dispute resolution mechanisms.” The Advocate General further emphasized that “commercial arbitration today represents one of the few effective forms of international cooperation,”, suggesting the possibility of a mutually reinforcing relationship between arbitration and EU law.
It is probably now the task of the arbitration community, as Yasmine Lahlou concluded, to show that arbitrators can be trusted to understand the weight of EU public policy in a critical legal system like that of the European Union.
ABOUT THE AUTHOR
Núria Casas Cano is an LL.M. candidate at Columbia Law School and a Fulbright Scholar from Spain. She passed the French bar exam (CRFPA) after graduating from Sciences Po Law School. She gained professional experience at Latham & Watkins, Hogan Lovells, and A&O Shearman. She serves as Columbia Arbitration Co-Chair of the Columbia International Arbitration Association and is currently a legal intern at the Permanent Mission of Ecuador to the United Nations.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
