Dutch groups join Europe-wide push to end treaties that let companies sue governments

Handel Anders(opens in new window) , SOMO(opens in new window) and Both ENDS(opens in new window) have filed a complaint with the European Commission calling for an infringement procedure against the Netherlands. They argue that the Netherlands’ bilateral investment treaties (BITs) are incompatible with EU law. The complaint is part of a broader European initiative. Civil society organisations in France, Germany, Austria and Sweden filed similar complaints against their respective governments in December 2025, and today, TROCA(opens in new window) , an organisation in Portugal did the same.

At the heart of the problem is a mechanism called investor-state dispute settlement (ISDS). This mechanism allows foreign investors to challenge government measures before international tribunals, outside domestic courts. ISDS has been criticised for creating significant legal and financial risks for governments and limiting their room to act on climate, environmental protection and human rights. ISDS is one of the legal structures that tilt power towards corporations. Companies get a direct route to challenge states, while governments risk costly legal battles and potentially billions in compensation for measures taken in the public interest.

The Netherlands has a large network of BITs with countries outside the EU. Seventy of these treaties contain ISDS provisions. Many were negotiated decades ago, before the development of the EU’s current legal and policy framework. Dutch treaties have been used in at least 140 known ISDS cases worldwide, accounting for nearly 10 per cent of all cases and making the Netherlands the second-most-used home state for ISDS cases after the United States. Meanwhile, foreign investors are increasingly using these treaties to bring claims against the Netherlands itself.

The complaint contends that these treaties are incompatible with EU law for two main reasons:

1. The treaties allow foreign investors to bring disputes against the Netherlands before international investment tribunals outside the EU legal system. This is problematic when investors challenge measures taken to implement EU law.
2. The treaties contain broad provisions guaranteeing the free transfer of capital related to investments. These provisions can conflict with the EU’s ability to impose sanctions and restrict the movement of assets.

Why now?

Two recent cases against the Netherlands demonstrate that these issues are pressing.

Windfall tax challenged: In 2025, Omani oil and gas company Petrogas initiated(opens in new window)  arbitration against the Netherlands under the 1987 Netherlands-Oman treaty. The case concerns, among other measures, the temporary solidarity contribution on excess profits in the oil and gas sector. The Netherlands introduced this measure to implement the EU’s emergency intervention under Regulation 2022/1854(opens in new window)  in response to the energy crisis after Russia’s invasion of Ukraine. The case therefore involves an international investment tribunal assessing measures taken to implement EU legislation.

Sanctions challenged: Also in 2025, Russian-Israeli businessman Mikhail Fridman initiated(opens in new window)  arbitration against the Netherlands under the 1989 Netherlands-Soviet Union treaty, challenging the impact of EU sanctions on his investments in the Netherlands. Fridman has also brought a €15 billion ISDS claim against Luxembourg over sanctions as well as against other countries. The risk of billion-euro claims(opens in new window)  is so significant that, in September, Luxembourg pushed for the removal(opens in new window)  of Fridman from the EU sanctions list. 

The European Commission has itself recognised these risks. As part of the EU’s 18^th sanctions package, adopted in July 2025, the EU introduced measures(opens in new window)  to protect Member States from arbitration brought by sanctioned companies and individuals. The Commission has also stated that BITs between EU Member States and Russia are not consistent with EU investment policy and that the Member States concerned should terminate(opens in new window)  them. The Dutch Parliament subsequently called on(opens in new window)  the government to terminate the Netherlands-Soviet Union treaty and encourage other EU Member States to do the same. So far, however, no steps have been taken.

What is the legal basis for the complaint?

In its Opinion 1/17(opens in new window) , the Court of Justice of the European Union (CJEU) held that an international agreement allowing investors to sue through ISDS can be compatible with EU law only if it does not adversely affect the autonomy of the EU legal order. In particular, ISDS tribunals must not be able to interpret or apply EU law themselves, or call into question the level of protection of public interests established by the EU. The complaint argues that the Netherlands’ treaties lack adequate safeguards comparable to those the CJEU considered in Opinion 1/17 to prevent investment tribunals from interfering with this autonomy when disputes concern measures implementing EU law.

The CJEU has also addressed the incompatibility of EU member states’ BITs with EU sanctions policy. In cases against Sweden(opens in new window) , Austria(opens in new window)  and Finland(opens in new window) , the Court found that provisions guaranteeing the free transfer of capital could interfere with the EU’s ability to impose restrictions on capital movements as part of its sanctions policy. The complaint argues that similar provisions remain in the Netherlands’ BITs without adequate safeguards.

Handel Anders, SOMO and Both ENDS argue that the Netherlands is failing to fulfil its obligations by not taking the necessary steps to eliminate incompatibilities between its BITs with non-EU countries and EU law. They argue that this failure is inconsistent with the EU principle of sincere cooperation (Article 4(3) of the Treaty on European Union) and the requirements of Regulation 1219/2012 (Recital 11 and Article 3). The organisations are therefore asking the Commission to open an infringement procedure against the Netherlands under Article 258 of the Treaty on the Functioning of the European Union (TFEU).

What happens next?

Only the European Commission can formally initiate an infringement procedure against an EU Member State. EU citizens and organisations can ask the Commission to investigate an alleged breach of EU law, but the Commission is not obliged to open proceedings. The Commission will have to assess the complaint and decide whether and how to pursue the matter. An infringement procedure could ultimately lead to proceedings before the Court of Justice if the Commission considers that a Member State has failed to comply with EU law.

What should the Netherlands do according to the complainants?

Handel Anders, SOMO and Both ENDS are calling on the Netherlands to terminate or amend existing investment treaties to fulfil its obligations under EU law. In practice, this means addressing the provisions that create the problems identified in the complaint, including ISDS mechanisms that allow disputes involving EU law to be taken outside the EU legal system and broad capital-transfer provisions that can conflict with EU sanctions powers.

The Netherlands has already terminated its treaties(opens in new window)  with other EU Member States, together with those Member States. In 2025, the Netherlands also formally withdrew(opens in new window)  from the Energy Charter Treaty.

The organisations argue that the Netherlands should now address its remaining network of older treaties with countries outside the EU. These treaties are not only incompatible with EU law; they can also place significant legal and financial burdens on countries, particularly in the Global South. As a key hub for ISDS, the Netherlands plays an outsized role in maintaining and facilitating this system. The organisations argue that it is time for the Netherlands to move away from this outdated model and phase out ISDS as quickly as possible.