On 21^st May 2024 Multinational law firm Pinsent Masons together with the Bulgarian law firm Djingov, Gouginski, Kyutchukov and Velichkov officially filed a Request for Arbitration against the Government of Romania with the International Centre for Settlement of Investment Disputes (ICSID) in Washington on behalf of one of the largest Bulgarian publicly traded companies, Eurohold, and its insurance business Euroins Insurance Group (EIG) - a leading insurance group with solid market presence in Central and Southeastern Europe. The claim amounts to appr. EUR 500 million.

On 17 March 2023, ASF, the Romanian financial regulator, withdrew the license of Euroins Romania. Eurohold and EIG challenged this move arguing that the revocation of the license was arbitrary, discriminatory, and constituted an unlawful expropriation in breach of international law.

On October 25 2023, Eurohold Bulgaria and Euroins Insurance Group (EIG) sent a Notice of Dispute to the Romanian government, which is the first formal step toward initiating an international investment arbitration under the investment treaty for protection of investments, signed between the governments of Bulgaria and Romania.

The arbitration signals a step change in European investment treaty law as the insurer prepares to challenge the European Union’s clamp down on investment agreements made between member states. It concerns multiple breaches on behalf of a Romanian regulator in respect of the Solvency II regime, the EU’s ‘Gold Standard’ Insurance and Reinsurance Regulation that should ensure a sound regulatory framework and consistent supervisory practices in the sector across the EU.

Such arbitration will set a precedent for other EU businesses operating across the EU and could ultimately prompt a wave of disputes as they grapple with the impact of the EU’s clamp down on investment agreements between EU states. The case will raise novel and cutting-edge issues of public international law such as the ability of investors to bring claims under a sunset clause of a terminated bilateral investment agreement between two EU countries.

The team at Pinsent Masons and DGKV is being led by Pinsent Masons’ co-head of International Arbitration, Sylvia Tonova and the head of Dispute Resolution and Arbitration Angel Ganev at DGKV, and partner Gergana Monovska.