Telecommunications Disputes and ADR: An EU Perspective

This is an Insight article, written by a selected partner as part of GAR's co-published content. Read more on Insight

Introduction

In a certain sense, this chapter deals with a contradiction in terms – it attempts to provide a European Union perspective on a market that does not exist per se at an EU level. There is no such thing as a common EU market for telecommunications,[2] nor is there a single EU telecommunications licence.[3] Telecoms markets in the European Union are defined by national borders, and mobile communications in each of the EU Member States are regulated by national regulatory authorities, which also perform adjudicatory functions.

That said, these independent markets are far from divorced from the European Union. During the past few decades, the European Union has strived to achieve an increasing amount of harmonisation in the telecommunications markets of Member States, through various regulatory reforms in the sector. One of the recurring objectives of these reforms, as analysed in the present chapter, is the resolution of disputes through alternative dispute resolution (ADR).

Telecoms disputes in the European Union must thus be discussed in the complex context of this common but differentiated approach, which is apparent from the manner in which the telecoms sector developed in the European Union. An interesting feature of this duality is the adjudication of telecoms disputes through both regulatory adjudication and private arbitration. However, the future of private arbitration of telecoms disputes is uncertain, given recent judicial developments in the European Union.

Complexities of the telecoms sector in the EU

An appreciation of the rapid technological evolution that underpins the telecoms sector is key to an understanding of the various types of disputes that may arise in the sector.

Understanding five generations

Mobile telecommunication technology has developed as a sequence of generations, each of which is characterised by new frequency bands, higher data speeds and more complex transmission technology.[4] The first generation (1G) that appeared for the first time in the United States around the early 1980s was analogue and supported only voice transmission.[5] A crucial limitation of this technology was that it did not support cross-border roaming.[6] The subsequent generations of mobile technology developed as a result of the need to ensure interoperability, or cross-border roaming.[7]

An interesting comparison has been made between the manner in which these subsequent generations developed in the United States as compared with Europe. Although the US authorities let the market determine various digital standards, in Europe, the regulators chose to impose a common standard, referred to as the GSM.[8] Although the imposition of this common standard in Europe was criticised at first, it facilitated the spread of the mobile industry throughout the continent over a short span of time.[9]

Though there was commonality in the GSM standard across Europe, the manner in which new licences were awarded was ad hoc. Some European countries chose auction systems, whereas others opted for ‘beauty contests’, imposing different criteria (geographical coverage, pricing, etc.) and selected the ‘best’ firms. In contrast, the United States has consistently used spectrum auctions.[10]

While 1G and 2G were designed mainly for voice services, 3G led to the era of smartphones,[11] which supported enhanced services such as wireless telephony, mobile internet access, fixed wireless internet access, video calls and mobile television.[12] 4G, in addition to the usual features of 3G, enabled faster browsing,[13] and allowed mobile ultra-broadband internet access to laptops, smartphones and other mobile devices, gaming services, high-definition mobile television, videoconferencing, 3D television as well as cloud computing.[14]

5G, the latest generation of wireless technology, was introduced in Europe towards the end of 2020.[15] In addition to being much faster than previous generations, and enhancing the manner in which we use existing technology, such as smartphones and gaming devices, the connectivity and capacity offered by 5G is expected to give rise to new innovative services. It has the potential to bring major changes to healthcare. For instance, according to Ofcom, the national regulatory authority in the United Kingdom, a local council in the United Kingdom has installed 5G nodes on lamp posts to create a network used to help social care patients. In addition to keeping the patients connected with their families, it also helps bio monitors detect whether patients are dehydrated, and through video systems, allows pharmacists to remotely check whether patients are taking medication. Similarly, one mobile telecommunications company is trialling ‘smart ambulances’ equipped with 5G technology, which will explore the possibility of treating patients in an emergency by connecting paramedics with hospital staff.[16]

5G is similarly being used in autonomous farming machinery, and could also be used by transport networks and local authorities to improve public services such as parking, traffic management and street lighting.[17]

As compared with the change from 3G to 4G, 5G is therefore widely recognised as having a cross-cutting effect on economies and societies as a whole.[18] Consequently, the debate on 5G extends beyond the technological sphere and now takes in issues of national security and global stability, as is apparent from the Huawei case discussed below.[19]

Examining the various types of disputes that may arise in this sector

In the ever-changing landscape of the telecoms sector, predicting the types of disputes that may arise in a comprehensive manner is not an easy task. Nevertheless, and despite a certain degree of overlap in the nature of these disputes, four main categories may be identified:[20]

  • Disputes relating to liberalisation: These arise through the process of opening telecommunications markets to competition, which inescapably entails interfering with monopoly rights of incumbent operators.[21] As explained below, the European Union pushed to liberalise national telecommunications markets towards the end of the 1980s and in the early 1990s. Certain Member States, such as Hungary and the Czech Republic, faced claims from operators as a result of decisions taken in the context of liberalisation of their markets. Given that liberalisation is a state measure, disputes relating to such state measures are often investment disputes.
  • Investment disputes: These arise as a result of regulatory reforms taken by governments that interfere with operators’ legitimate expectations. They could relate to measures taken in the context of licensing mechanisms, pricing of spectrum or allowing the entry of new competitors in the market, etc. The premise of such disputes is that the operator or its parent company (the ‘investor’) has made an ‘investment’ in the telecommunications sector of the host state that is protected by a bilateral or multilateral investment treaty entered into between the host state and the investor’s state; a measure taken by the host state has breached the protections offered by the investment treaty.[22]
  • Interconnection disputes: Interconnection disputes arise between service providers or telecoms operators. They are often observed in markets with a dominant incumbent operator, whereby new entrants require interconnection to the incumbent’s network to provide affordable services.[23] A number of technical, legal, operational issues may arise in connection with interconnection agreements, such as disagreement on interconnection charges, disputes about the quality of interconnection services, failure to comply with the terms of an interconnection agreement and issues relating to competition, etc.[24]
  • Radio frequency disputes: These relate to assignment or interference with radio frequencies and spectrum, licensing conditions and pricing.[25]

The aforementioned types of disputes may arise against national regulators or state governments or between service providers, and may be adjudicated through courts or through ADR systems, as explored in the following sections.

Resolving telecoms disputes in the EU through ADR

Although courts remain an integral avenue for the resolution of telecoms disputes, the European Union has repeatedly emphasised the need to develop out-of-court dispute resolution procedures.[26] At present, this objective is also achieved through regulatory adjudication by the national regulatory authorities, and through private arbitration.[27]

Regulatory adjudication by national regulatory authorities

There is no single body of European law or single European regulator that regulates telecommunications in the European Union. Both rule-making and enforcement of telecommunications regulations in the European Union are split between the Member States and the EU institutions.[28]

The early European telecommunications market was characterised by state-owned postal, telephone and telegraph service providers.[29] However, a requirement for large investments in information and communications technology led to the liberalisation of the telecommunications sector in Europe.[30] The publication of a Green Paper on telecommunications by the European Commission in 1987 was a harbinger of this liberalisation.[31] A key component of this sectoral reform was the establishment of independent national regulatory authorities (NRAs) in the 28 Member States. The transition to a competitive regime for telecommunications was achieved through the adoption of the ‘1998 Telecom Package’, which focused on the creation of a competitive market and on regulating the rights of new entrants to the market.[32]

During the following years, the telecommunications market subsequently witnessed a trend of convergence of services, whereby mobile, fixed and satellite communications increasingly formed part of the same service,[33] leading the European Union to abandon a differentiated approach (whereby these services were subject to a separate regulatory framework) for a harmonised regulatory framework covering all electronic communication services.[34] Following extensive review of the regulatory framework, the EU Parliament and Council approved the ‘2002 Telecom Package’,[35] which comprised one Framework Directive[36] and four specific directives: the Access Directive,[37] the Authorisation Directive,[38] the Universal Service Directive[39] and the Directive on Privacy and Electronic Communications.[40]

Although the NRAs continued to remain primarily responsible for the implementation of the EU regulations, through the 2002 Telecoms Package, they were afforded greater discretion when assessing specific conditions in the national markets and choosing appropriate measures to deal with regulatory issues.[41] In particular, NRAs were tasked with assessing whether operators had significant market power (SMP), and ensuring that operators with SMP were prevented from using their market power to either restrict or distort competition, through ex ante regulation.[42] In this new context, NRAs also played a key adjudicatory role.

For disputes between operators providing electronic communications networks or services in a state, the NRAs’ powers of adjudication, which under the previous regime were limited to interconnection and access, now extended to disputes ‘in connection with the [Framework] Directive or the Specific Directives’.[43] In an attempt at speedy resolution to a dispute, the relevant NRA was required to issue a binding decision ‘in the shortest possible time-frame’ or within a maximum of four months, except in exceptional circumstances.[44] Member States could make provisions for an NRA to decline to decide a dispute ‘where other mechanisms, including mediation, exist and would better contribute to resolution of the dispute in a timely manner in accordance with the provisions of Article 8’, or the parties decided to approach national courts.[45] Regulatory adjudication thus remained complementary to judicial proceedings.[46] The decision of an NRA had to be a reasoned decision and made available to the public, having regard to business confidentiality requirements.[47]

Where a cross-border dispute arose between parties of different Member States, or where a dispute lay within the competence of more than one Member State, a party could refer the dispute to the NRAs concerned, and the 2002 Framework Directive provided that Member States would coordinate their efforts to resolve the dispute.[48] In all other respects, the cross-border dispute resolution process was the same as that for parties located in the same country.[49]

The 2002 Telecom Package was further revised in 2009 (the 2009 Telecom Package).[50] In an effort to make the dispute resolution process more efficient, the 2009 Telecom Package directed Member States to provide for an appeal mechanism, either before national courts or another independent non-judicial appellate body that would issue a reasoned decision.[51] However, a milestone development in this reform was the creation of the Body of European Regulators for Electronic Communications (BEREC),[52] to promote greater regulatory coordination and coherence between the NRAs.[53] In keeping with this function, a key responsibility of BEREC is the coordination and harmonisation of cross-border dispute resolution processes among Member States.[54] An NRA may request BEREC to issue an opinion as regards the action to be taken in accordance with the 2009 Telecoms Package, and shall not issue a decision before the receipt of BEREC’s opinion, unless urgent measures are necessary.[55]

The 2009 Telecoms Package has now been repealed and replaced by the European Electronic Communications Code (EECC) established by Directive 2018/1972 adopted on 11 December 2018.[56] This reform followed a communication of the European Commission setting out a Digital Single Market Strategy for Europe.[57]

In essence, the main objectives of the EECC do not differ from those of the 2009 Telecoms Package, in that it aims to bring about greater consistency and harmonisation in the regulation of telecommunications across the European Union. It recognises that markets for electronic communications have shown strong competitive dynamics in recent years, and aims to reduce the ex ante regulation of markets so that electronic communications are governed only by competition. Perhaps the most significant objective of the EECC is the implementation of very high-capacity networks and the roll-out of 5G networks.[58]

The EECC mandates that Member States list an NRA or one independent body with proven expertise as an ADR entity with a view to resolving disputes between providers and consumers. ADR services may be extended to end users other than customers, such as microenterprises and small enterprises.[59]

NRAs continue to be in charge of dispute resolution between operators under the EECC.[60] In this respect, the dispute resolution provisions largely mirror those of the 2009 Telecoms Package.[61]

As regards cross-border disputes not concerned with radio spectrum, the EECC now makes it mandatory for the NRA concerned to notify BEREC where the dispute concerns trade between Member States, so as to ensure a consistent resolution of the dispute.[62] When it receives such a notification, BEREC shall issue an opinion to the NRA to take or refrain from taking action.[63] In exceptional circumstances, where there is an urgent need to act, the EECC grants the NRAs the right to adopt interim measures either at the request of the parties or on its own initiative.[64]

In both disputes within a Member State and cross-border disputes, regulatory adjudication remains optional and an aggrieved party may have immediate recourse to courts.[65]

The EECC makes a special provision for ‘problems’ or cross-border disputes concerning coordination or harmful interference with radio spectrum. A Member State may request the Radio Spectrum Policy Group (RSPG) to use its ‘good offices’ to address such a problem or dispute. The RSPG may issue a report proposing coordinated action where appropriate.[66] If the dispute remains unresolved, the Commission may adopt decisions addressed to Member States, taking into account any opinion provided by the RSPG.[67] Any Member State may request the Commission to provide legal, political and technical support to resolve radio spectrum coordination issues with countries neighbouring the EU Member States, so as to ensure compliance with EU law.[68]

Although the EECC provides for an increasingly sophisticated regulatory dispute resolution mechanism, the line between regulatory adjudication and private dispute resolution remains blurred, notably in the presence of an arbitration agreement. The subsequent section examines the resolution of telecommunications disputes through arbitration.

Private adjudication through arbitration

A by-product of the privatisation and liberalisation of the telecoms sector was the emergence of arbitration as a means to settle telecoms disputes relating to the performance of private contracts.[69] Telecoms disputes have been a subject of both investor-state and commercial arbitration.

Investor-state arbitration

The telecoms sector has witnessed only a handful of investment arbitration proceedings against EU Member States.[70] The authors are aware of seven cases to date: four against Poland,[71] one against Hungary,[72] one against the Czech Republic[73] and, most recently, one against Sweden.[74]

Some of these cases arose as a result of measures taken by the Member State in the context of developments at an EU level.

In Telenor v. Hungary, the investor brought claims against Hungary for a series of measures that it took in an effort to transpose EU law. In 1993, in the context of the privatisation of its telecommunications sector, Hungary concluded a concession agreement for the provision of mobile telecommunications services with Panon Communications, a subsidiary of Telenor.[75] In 2001, in response to the Universal Service Directive (which imposed on Hungary a duty to provide a ‘universal telephone service’ or a minimum set of telecommunication services to be available to the public at reasonable cost), Hungary set up a public fund, levying a fee on all telecommunications services providers, including Panon. Hungary also introduced a regulated price regime for mobile service providers with SMP. It designated Panon as having SMP but not its competitor, Matev. In 2003, Telenor initiated arbitration proceedings under the Norway–Hungary bilateral investment treaty (BIT) at the International Centre for Settlement of Investment Disputes (ICSID), alleging that these measures amounted to an expropriation of its investment and a breach of the fair and equitable standard of the BIT. The tribunal found in favour of Hungary, holding, inter alia, that Telenor had failed to establish a prima facie case of expropriation. In doing so, the tribunal recalled that any investment involves a certain degree of risks and that ‘the mere exercise by government of regulatory powers that create impediments to business or entail the payment of taxes or other levies does not of itself constitute expropriation’.[76]

Similarly, in Nagel v. Czech Republic, the tribunal acknowledged that the privatisation of the telecoms sector and the transition to a free market economy was a lengthy process for countries like the Czech Republic.[77] In this case, the claimant alleged that the Czech Republic had violated its obligations under the United Kingdom–Czech Republic BIT, including the fair and equitable treatment and non-expropriation provisions, on account of allegedly reneging on prior commitments relating to the granting of a GSM licence to a consortium, which included the claimant. The tribunal dismissed the claims, finding, inter alia, that no specific promises were made to the claimant, and that the consortium agreement in question did not amount to an investment.[78]

In Juvel Ltd and Bithell Holdings Ltd v. Poland, the claimants initiated proceedings at the International Chamber of Commerce (ICC) pursuant to the Cyprus–Poland BIT, alleging expropriation of their investment on account of Poland’s interference with their parent company’s plans to roll out an 850MHz long-term evolution (LTE) mobile phone network in the country. The parties subsequently entered into a settlement agreement during the pendency of the proceedings. However, the dispute revived as Poland allegedly did not comply with the settlement agreement. The tribunal rendered an award on 26 February 2019. Although the award itself is confidential, publicly available reports indicate that the tribunal found that Poland did not expropriate the claimants.[79]

Poland also faced claims for allegedly reneging on its commitments to telecoms companies. In the mid 1990s, France Telecom and Ameritech initiated proceedings pursuant to the France–Poland and United States–Poland BITs, respectively, in relation to statutory enactments that reversed Poland’s prior commitments to award these companies GSM cellular licences.[80]

It is difficult to discern sector-specific trends from these limited examples.

Indeed, three cases against Poland were settled pursuant to confidential settlement agreements during the pendency of the proceedings, and as such there is very limited information available with respect to these cases.[81]

Moreover, not all these cases concerned sector-specific issues. For instance, limited publicly available information indicates that Vivendi v. Poland concerned the alleged mishandling by Polish courts of lawsuits arising out of a commercial dispute relating to the ownership of a cellular telecoms company.[82]

Although investment arbitration claims against Member States have been minimal to date, the introduction of 5G may reverse this trend.

On 7 January 2022, Huawei initiated ICSID arbitration proceedings against Sweden, following a decision of the Swedish government to ban Huawei from rolling out its 5G network products and services in the country, on the basis of national security concerns.[83] Huawei alleged that Sweden had breached the national treatment standard of the Sweden–China BIT, had violated the fair and equitable treatment provision of the BIT, and had taken measures amounting to expropriation of Huawei’s investment.[84]

Huawei has similarly threatened arbitration against EU Member States Romania, the Czech Republic[85] and Germany,[86] all of which have expressed a security concern in relation to Huawei’s equipment in the rolling out of the 5G network.

From a policy perspective, the EECC leaves it to Member States to ensure the protection of their essential security interests.[87] As with the privatisation of the telecoms industry in the early 1999s, the introduction of 5G represents a new era in the telecoms sector. It remains to be seen whether Member States will be able to keep disputes at bay as they adapt to this era.

Commercial arbitration

Unlike with investor-state arbitrations, it is significantly more challenging to access data for commercial arbitrations in the telecoms sector, notably as commercial awards are often confidential.[88] Moreover, as regards commercial arbitration proceedings that would be relevant for the present analysis, the criteria to determine a link with the European Union is not apparent: an arbitration may be seated in the European Union but have no other link to the continent,[89] or the telecommunications companies involved may be of a European nationality, but the dispute may relate to a non-sector specific issue, such as a dispute about a shareholders agreement.[90]

Nevertheless, the point to be made is a simple one, for which an EU context need not be defined – commercial arbitration has been used by telecoms companies to settle a variety of contractual disputes, such as:

  • breach of a contract to provide telecommunications services, on account of a failure to make timely payment of invoices;[91]
  • unjustified termination of a contract to sell and provide equipment and services for a 50-site 4G LTE data network;[92]
  • infringement of intellectual property rights;[93]
  • disagreement regarding terms, conditions and prices for interconnection and related agreements;[94]
  • breach of an agreement for the lease of space segment and spectrum capacity on two satellites;[95] and
  • failure to pay invoices relating to an agreement to provide the conveyance and the termination of international telephone traffic.[96]

The next section explores the possibility of an increased use of commercial arbitrations to resolve disputes in the telecoms sector, in light of recent judicial trends in the European Union.

Future of telecoms and ADR in the EU

On 6 March 2018, the Court of Justice of the European Union (CJEU) rendered its judgment in the Achmea case, which altered the course of intra-EU investor-state arbitrations.[97] The judgment was issued in response to a preliminary ruling requested by the German Federal Court of Justice to the CJEU, in connection with proceedings initiated by the Slovak Republic, to set aside an award rendered by a tribunal seated in Frankfurt.[98] The tribunal had found the Slovak Republic in breach of the Netherlands–Slovakia BIT for measures taken in connection with the partial reversal of the liberalisation of its health insurance market, and awarded Dutch investor Achmea damages of €22.1 million.[99] The Slovak Republic subsequently applied to the German courts (Frankfurt being the seat of the arbitration) to set aside the award on the grounds that the arbitration mechanism of the Netherlands–Slovakia BIT was incompatible with EU law, specifically with Articles 8, 267 and 344 of the Treaty on the Functioning of the European Union (TFEU).[100] The CJEU held that the dispute resolution provision of the Netherlands–Slovakia BIT had an adverse effect on the autonomy of EU law, and as such Articles 267 and 344 of the TFEU must be interpreted as precluding Member States from initiating arbitration proceedings pursuant to intra-EU BITs.[101]

Thus, despite considering the Netherlands–Slovakia BIT in particular, the CJEU’s broadly worded judgment encompassed all BITs between Member States.[102] As a result, on 5 May 2020, 23 of the Member States signed an ‘Agreement for the termination of Bilateral Investment Treaties between the Member States of the European Union’ (the Agreement),[103] which entered into force on 29 August 2020.[104] Pursuant to the Agreement, the signatory Member States agreed to terminate all intra-EU BITs concluded between themselves, including any applicable sunset clauses, as a necessary consequence of the Achmea judgment.[105] Austria, Sweden, Finland, Ireland and the United Kingdom (following its exit from the European Union on 1 January 2020) are not parties to the Agreement.

The Agreement will not affect or reopen an arbitration proceeding that was concluded[106] before 6 March 2018 (the date of the Achmea judgment).[107] With respect to pending arbitration proceedings[108] or new arbitration proceedings,[109] the Agreement requires Member States to inform the arbitral tribunal that there is no valid agreement to arbitrate as a consequence of the Achmea judgment; where the proceedings concern enforcement of an award before a national court, the signatory Member State must ask the national court to set aside, annul or refuse to recognise and enforce the award.[110] The Agreement further encourages parties to pending proceedings to enter into a ‘structured dialogue’ to settle their dispute pursuant to a settlement process overseen by an impartial facilitator as stipulated in the Agreement,[111] or have recourse to national courts, even if national time limits for bringing an action have expired.[112]

The CJEU has subsequently expanded the prohibition on intra-EU arbitrations to investor-state arbitrations under the Energy Charter Treaty (ECT) in a widely debated decision in the Komstroy case[113] and ad hoc arbitration agreements that are similar to investor-state arbitration agreements of intra-EU BITs.[114]

Certain ICSID tribunals have refused to decline jurisdiction over claims brought by investors in investor-state proceedings in the energy sector, despite the CJEU’s decisions in Achmea and Komstroy,[115] holding, inter alia, that the CJEU’s finding on intra-EU ECT arbitrations in Komstroy did not form an operative part of the decision but were obiter dictum.[116]

The tribunal in Green Power Partners K/S and SCE Solar Don Benito AS v. Kingdom of Spain is reported to be the first non-ICSID investor-state tribunal to decline jurisdiction over an intra-EU ECT claim, brought by Danish claimants against Spain.[117] The tribunal found, inter alia, that all the states relevant to the proceedings – Denmark, Spain and Sweden (the seat of the proceedings being Stockholm)[118] – had recognised the primacy of EU law, which consequently excluded the states’ unilateral offer to arbitrate under Article 26 of the ECT (following the Achmea and Komstroy judgments).[119]

Thus, the precise extent to which investors will be precluded from bringing new claims against Member States remains to be seen. As regards disputes in the telecommunications sector, the authors are not aware of any pending intra-EU BIT claim to date that would be affected by the Achmea judgment. However, the authors believe that it will be increasingly difficult (if not impossible) for EU telecom investors to bring investment arbitration proceedings against most of the other EU Member States.[120]

Conclusion

In 2016, Queen Mary University conducted an International Dispute Resolution Survey on ‘Pre-empting and Resolving Technology, Media and Telecoms Disputes’.[121] The survey indicated that technology, media and telecommunications (TMT) disputes were especially high-risk and high-value in Europe.[122] Although 92 per cent of the respondents of the survey worldwide believed that international arbitration was well-suited for TMT disputes, the dispute resolution policy of 75 per cent of organisations surveyed indicated that mediation was the most preferred mechanism, followed by arbitration.[123] Although information technology and telecoms suppliers favoured court litigation and expert determination over arbitration, dispute resolution practitioners indicated that arbitration was the most preferred and court litigation was the least desirable mechanism.[124]

In the years following the survey, the telecommunications market has become even more dynamic. During the covid-19 pandemic, telecommunications companies in Europe had a key role, not only as regards allowing enhanced connectivity between individuals and businesses but also in the management of the pandemic through the development of covid-19 warning and tracing applications.[125] This chapter has discussed how the advent of 5G will exponentially increase the reach of telecommunications on every aspect of society. Given these developments, it is likely that the coming years will see a diverse range of disputes in this sector.

Unrelated developments in the international dispute resolution landscape may also possibly have a ripple effect on the management of telecommunications disputes. One wonders whether the difficulty in accessing investor-state arbitrations will encourage intra-EU parties to include provisions allowing for commercial arbitration proceedings in their contracts. Indeed, the CJEU has clarified that the Achmea decision does not apply to commercial arbitration proceedings.[126] In the authors’ view, pending clarity as to the way forward for intra-EU investment proceedings, recourse to national courts or NRAs seems to be the most predictable forum for settlement of disputes between an investor and a state.

Finally, although the independent avenues for settlement of telecommunications disputes are numerous in the European Union, it remains to be seen whether the coming years will see a convergence, or divergence, of these systems, and whether the creation of an EU-wide forum for dispute resolution will lend a true ‘EU perspective’ to telecoms disputes and ADR on the continent.


Footnotes

[1] Wesley Pydiamah and Julien Fouret are partners and Tejas Shiroor is a senior associate at Eversheds Sutherland. The authors are grateful to Sandra Geahchan, Charlotte Harel and Jeanne Tarragano for their assistance with this chapter.

[2] Martin Cave, Christos Genakos and Tommaso Valletti, The European Framework for Regulating Telecommunications: A 25-year Appraisal, Review of Industrial Organization (2019) 55, 47–62, p. 57 (published online 26 February 2019 at https://doi.org/10.1007/s11151-019-09686-6 (accessed 19 September 2023)).

[3] T Dunnewijk and S Hultén, ‘A brief history of mobile communication in Europe’, Telematics and Informatics, Volume 24, Issue 3, August 2007, pp. 57164–179, at p. 577 of manuscript (https://www.researchgate.net/publication/4778453_A_Brief_History_of_Mobile_Telecommunication_in_Europe (accessed 19 September 2023)).

[4] Okeke Stephen, ‘The Study of the Evolution of 3g/4g Network and Their Limitations’, International Journal of Engineering and Technical Research (IJETR) ISSN: 2321-0869, Volume 2, Issue 9, September 2014, at p. 57292; Cave, Genakos and Valletti, op. cit. note 2, at p. 5756; Dunnewijk and Hultén, op. cit. note 3, at p. 572.

[5] Okeke, op. cit. note 4, at p. 57292; Cave, Genakos and Valletti, op. cit. note 2, at p. 5756.

[6] Cave, Genakos and Valletti, op. cit. note 2, at p. 5756; Dunnewijk and Hultén, op. cit. note 3, at p. 574.

[7] Cave, Genakos and Valletti, op. cit. note 2, at p. 5756; Dunnewijk and Hultén, op. cit. note 3, at p. 574.

[8] The Groupe Spéciale Mobile (GSM), subsequently renamed as Global System for Mobile Telecommunications, was developed at the Conference on European Posts and Telecommunications (CEPT) in 1982, with a view to developing a common mobile telephone standard; see Dunnewijk and Hultén, op. cit. note 3, at p. 574; Cave, Genakos and Valletti, op. cit. note 2, at p. 5756.

[9] Cave, Genakos and Valletti, op. cit. note 2, at p. 5756.

[10] ibid.

[11] ‘What is 5G?’, as explained on the website of Ofcom, the telecommunications regulator in the United Kingdom (https://www.ofcom.org.uk/phones-telecoms-and-internet/advice-for-consumers/advice/what-is-5g (accessed 19 September 2023)).

[12] Okeke, op. cit. note 4, at p. 57292.

[13] ‘What is 5G?’, op. cit. note 11.

[14] Okeke, op. cit. note 4, at p. 57292.

[15] See the European Commission’s 5G communication under ‘Shaping Europe’s Digital Future’ (https://digital-strategy.ec.europa.eu/en/policies/5g (accessed 19 September 2023)).

[16] ‘What is 5G?’, op. cit. note 11.

[17] ibid.

[18] Margarita Robles-Carrillo, ‘European Union policy on 5G: Context, scope and limits’, Telecommunications Policy 45 (2021) 102216, pp. 574–75.

[19] The Chairman Statement on Cyber Security of Emerging and Disruptive Technologies, which forms part of The Prague Proposals, issued at the Prague 5G Security Conference 2021 (https://www.vlada.cz/assets/media-centrum/aktualne/Prague_Proposals_on_Cyber_Security_of_EDTs.pdf (accessed 19 September 2023)), describes the impact of 5G as follows:

Fifth Generation (5G) wireless network infrastructure will form the backbone of the digital economy as it enables higher speed and lower latency connectivity. It also has the ability to further support the potential of Emerging and Disruptive Technologies (EDTs) such as Artificial Intelligence, Quantum Communication Infrastructure, Big Data Advanced Analytics, Massive Internet of Things and Autonomous Systems. These technologies are expected to significantly impact all sectors and in particular those critical to national security, such as healthcare, transport, and energy, including governments and their citizens. EDTs have significant potential to provide countless benefits to society as they are critical to the digital transformation of society, can save costs, and improve access to services. However, the increasing reliance of societies on these technologies could have serious national security and societal implications if EDTs and the data they rely on were to be disrupted or compromised. The ubiquitous and interconnected nature of digital systems across multiple sectors and states will also expand risks to the attack surface to possible disruption by cyber means, including the vulnerabilities of critical systems to disruption and hostile interference. This reinforces the importance of secure and resilient infrastructure, integrity of data development of technologies with regard to national and individual security.

See also Robles-Carrillo, op. cit. note 18, pp. 574–5; see also report by the European Union Agency for Cybersecurity (ENISA), ‘ENISA threat landscape for 5G Networks’, November 2019 (https://www.enisa.europa.eu/publications/enisa-threat-landscape-for-5g-networks (accessed 19 September 2023)).

[20] Barbara Alicja Warwas, ‘ADR in B2B Disputes in the EU Telecommunications Sector: Where Does the EU Stand and What Does the EU Stand for?, European University Institute, EUI Working Paper LAW 2014/12, p. 576; Discussion Paper by Debevoise & Plimpton and McCarthy Tétrault LLP, ‘Dispute Resolution in the Telecommunications Sector: Current Practices and Future Directions’, October 2004, prepared for the International Telecommunications Union and The World Bank, p. 5723 et seq.

[21] Discussion Paper by Debevoise & Plimpton and McCarthy Tétrault LLP, op. cit. note 20, p. 5723.

[22] Warwas, op. cit. note 20, pp. 576–77; Discussion Paper by Debevoise & Plimpton and McCarthy Tétrault LLP, op. cit. note 20, pp. 5727–28.

[23] Debevoise & Plimpton and McCarthy Tétrault LLP, op. cit. note 20, p. 5729.

[24] id., pp. 5729–30; Warwas, op. cit. note 20, p. 577.

[25] Warwas, op. cit. note 20, p. 577.

[26] European Electronic Communications Code (EECC), Recital 68.

[27] A 2016 International Dispute Resolution Survey, ‘Pre-empting and Resolving Technology, Media and Telecoms Disputes’, carried out by Queen Mary University of London (and sponsored by Pinsent Masons), indicates that mediation and expert determination are also forms of alternative dispute resolution (ADR) used in the telecommunications sector. However, owing to the lack of publicly available data for these processes, this chapter focuses on international arbitration (Queen Mary Survey, 2016) (https://arbitration.qmul.ac.uk/media/arbitration/docs/Fixing_Tech_report_online_singles.pdf (accessed 19 September 2023)).

[28] Andrej Savin, EU Telecommunications Law, Edward Elgar Publishing Limited, Chapter 1: ‘Regulating telecommunications in the EU’, pp. 574–75.

[29] Cave, Genakos and Valletti, op. cit. note 2, at p. 5749.

[30] ibid.

[31] Commission of the European Communities, ‘Towards a Dynamic European Economy – Green Paper on the Development of the Common Market for Telecommunications Services and Equipment’, 30 June 1987, Com(87) 290 (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:51987DC0290&from=en (accessed 19 September 2023)); Cave, Genakos and Valletti, op. cit. note 2, at p. 5749.

[32] EC Directive 90/387 of 28 June 1990 and EC Directive 96/19 of 13 March 1996 opened the telecoms market to competition. See Alexis Mourre, ‘Private Arbitration and Regulatory Adjudication in the Telecommunications Industry’, Journal of International Arbitration, (Kluwer Law International, 2005), Volume 22, Issue 3, pp. 57207–223, at pp. 57201–211.

[33] For instance, fixed telephone networks increasingly relied on optical fibre cable that could transmit voice messages along with internet and video or television signals. See Mourre, op. cit. note 32, at pp. 57208–209.

[34] Savin, op. cit. note 28, p. 576.

[35] Mourre, op. cit. note 32, at at pp. 57211–212.

[36] Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (OJ L 108, 24.4.2002, p. 5733).

[37] Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities.

[38] Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services.

[39] Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services.

[40] idbi.

[41] Mourre, op. cit. note 32, at at p. 57212.

[42] ibid.

[43] Framework Directive, op. cit. note 36, Article 20(1).

[44] ibid., Article 20(2).

[45] ibid., Article 20(2); Mourre, op. cit. note 32, at p. 57216.

[46] Warwas, op. cit. note 20, p. 573.

[47] Framework Directive, op. cit. note 36, Article 20(4).

[48] id., Article 21, Paragraphs (2) and (3).

[49] id., Article 21, Paragraphs (1), (3) and (4).

[50] Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009, amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, Directive 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and Directive 2002/20/EC on the authorisation of electronic communications networks and services (2009 Framework Directive).

[51] 2009 Framework Directive, Article 4.

[52] Regulation (EC) No. 1211/2009 of the European Parliament and of the Council of 25 November 2009 establishing the Body of European Regulators for Electronic Communications (BEREC) and the Office, referred to in the amended Framework Directive.

[53] 2009 Framework Directive, Amended Article 3, .

[54] id., Amended Article 21(2).

[55] id., Amended Article 2.

[56] Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018L1972 (accessed 19 September 2023)).

[57] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, ‘A Digital Single Market Strategy for Europe’, COM(2015) 192 (6 May 2015) (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015DC0192&from=EN (accessed 19 September 2023)).

[58] See for example, EECC, Recital 24:

Progress towards the achievement of the general objectives of this Directive should be supported by a robust system of continuous assessment and benchmarking by the Commission of Member States with respect to the availability of very high capacity networks in all major socio-economic drivers such as schools, transport hubs and major providers of public services, and highly digitised businesses, the availability of uninterrupted 5G coverage for urban areas and major terrestrial transport paths, and the availability to all households in each Member State of electronic communications networks which are capable of providing at least 100 Mbps, and which are promptly upgradeable to gigabit speeds.’

[59] id., Article 25.

[60] id., Article 5(1)(b) read with Article 26.

[61] id., Article 26 and 2009 Framework Directive, Article 20.

[62] id., Article 27(2).

[63] id., Article 27(3).

[64] id., Article 27(4).

[65] id., Articles 26(6) and 27(6).

[66] id., Article 28(3).

[67] id., Article 28(4).

[68] id., Article 28(5).

[69] Mourre, op. cit. note 32, at pp. 57213–214.

[70] Vivendi v. Republic of Poland, UNCITRAL, 2006 (proceedings initiated pursuant to the France–Poland bilateral investment treaty (BIT), Settlement Agreement dated April 2011); Telenor Mobile Communications AS v. Republic of Hungary, ICSID Case No. ARB/04/15 (initiated pursuant to the Hungary–Norway BIT, Award dated 13 September 2006); Ameritech v. Republic of Poland, UNCITRAL (proceedings initiated pursuant to the United States–Poland BIT, settled); France Telecom v. Poland, UNCITRAL (proceedings initiated pursuant to the France–Poland BIT, settled); William Nagel v. Czech Republic, SCC Case No. 49/2002 (initiated pursuant to the Czech/Slovak–United States BIT, Award dated 9 September 2003); Juvel Ltd and Bithell Holdings Ltd. v. Poland, ICC Case No. 19459/MHM (initiated pursuant to the Cyprus–Poland BIT, Award dated 26 February 2019); Huawei Technologies Co., Ltd. v. Kingdom of Sweden, ICSID Case No. ARB/22/2 (registered by ICSID on 21 January 2022).

[71] Vivendi v. Republic of Poland, UNCITRAL, 2006 (proceedings initiated pursuant to the France–Poland BIT, Settlement Agreement dated April 2011); Ameritech v. Republic of Poland, UNCITRAL (proceedings initiated pursuant to the United States–Poland BIT, settled); France Telecom v. Poland, UNCITRAL (proceedings initiated pursuant to the France–Poland BIT, settled); Juvel Ltd and Bithell Holdings Ltd. v. Poland, ICC Case No. 19459/MHM (initiated pursuant to the Cyprus–Poland BIT, Award dated 26 February 2019).

[72] Telenor Mobile Communications AS v. Republic of Hungary, ICSID Case No. ARB/04/15 (initiated pursuant to the Hungary–Norway BIT, Award dated 13 September 2006).

[73] William Nagel v. Czech Republic, SCC Case No. 49/2002 (initiated pursuant to the Czech/Slovak–United States BIT, Award dated 9 September 2003).

[74] Huawei Technologies Co., Ltd. v. Kingdom of Sweden, ICSID Case No. ARB/22/2 (registered by ICSID on 21 January 2022).

[75] Telenor Mobile Communications AS v. Republic of Hungary, ICSID Case No. ARB/04/15, para. 22.

[76] id., para. 64.

[77] William Nagel v. The Czech Republic, SCC Case No. 049/2002, Final Award, 9 September 2003, para. 293.

[78] id., paras. 325–29.

[79] See Telecompaper, ‘Poland wins long-running dispute with Sferia over 850 MHz licence’, 4 March 2019 (https://www.telecompaper.com/news/poland-wins-long-running-dispute-with-sferia-over-850-mhz-licence--1283155 (requires registration); IA Reporter, ‘Poland Reportedly Prevails in Cypriot Investment Treaty Claim Chaired by Bernard Hanotiau at ICC’, 5 March 2019.

[80] The claims were settled on the undisclosed terms early on in the proceedings. However, limited information is available on the United Nations Conference on Trade and Development (UNCTAD) website (see https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/8/ameritech-v-poland and https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/7/france-telecom-v-poland (accessed 19 September 2023)).

[81] Vivendi v. Republic of Poland, UNCITRAL, 2006 (proceedings initiated pursuant to the France–Poland BIT, Settlement Agreement dated April 2011); Ameritech v. Republic of Poland, UNCITRAL (proceedings initiated pursuant to the United States–Poland BIT, settled); France Telecom v. Poland, UNCITRAL (proceedings initiated pursuant to the France–Poland BIT, settled).

[82] See case information on Vivendi v. Poland, published by UNCTAD (https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/224/vivendi-v-poland (accessed 19 September 2023)).

[83] Huawei Technologies Co., Ltd. v. Kingdom of Sweden, ICSID Case No. ARB/22/2 (https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/22/2 (accessed 19 September 2023)).

[84] Huawei v Sweden, ICSID Case No. ARB/22/2, Request for Arbitration, 7 January 2022, paras. 94–97.

[85] IA Reporter, ‘China’s Huawei lodges ICSID Arbitration against Sweden over 5G ban’, 24 January 2022 (https://www.iareporter.com/articles/chinas-huawei-lodges-icsid-arbitration-against-sweden-over-5g-ban/ (accessed 19 September 2023)).

[86] Kluwer Arbitration Blog, ‘Huawei and ISDS: 5 G Infrastructure and Investment Claims’, 11 June 2020.

[87] EECC, Recital 6:

This Directive is without prejudice to the possibility for each Member State to take the necessary measures to ensure the protection of its essential security interests, to safeguard public policy and public security, and to permit the investigation, detection and prosecution of criminal offences, taking into account that any limitation to the exercise of the rights and freedoms recognised by the Charter, in particular in Articles 7, 8 and 11 thereof, such as limitations regarding the processing of data, are to be provided for by law, respect the essence of those rights and freedoms and be subject to the principle of proportionality, in accordance with Article 52(1) of the Charter.’

[88] Out of a data set of 50 commercial arbitrations that the authors identified, there was no publicly available award in 30 proceedings. For 11 of these 30 proceedings, some information on the arbitration proceeding could be inferred from publicly available court decisions issued in connection with the proceedings; however, for the remaining 19 proceedings, no award or court decision was published.

[89] For instance, AT&T Corporation v. Saudi Cable Company, for which the dispute was seated in London and administered by the International Chamber of Commerce (ICC) in Paris, but was between the claimant, an American company, and the Saudi Arabian respondent concerning the breach of a pre-bid agreement in connection with bids for Saudi Arabia’s telecommunications expansion project. AT&T Corporation v. Saudi Cable Company, Judgment of the United Kingdom Court of Appeal QBCMF 1999/1200/A3, 15 May 2000 (three partial awards issued in the proceedings are not public).

[90] T-Mobile v. Elektrim S.A., VIAC Case No. SCH-4939, Award, 6 June 2006.

[91] KDDI Global, LLC v. Pllatel Communications, LLC, ICDR Case No. 01-17-0006-6772, Final Award, 18 April 2018.

[92] Avion Systems, Inc. v. Agri-Valley Broadband, Inc., AAA Case No. 54-117-01027-11, Opinion and Award, 16 October 2013.

[93] Luminati Networks Ltd. v. B.I. Science (2009) Ltd., Award, 29 April 2020.

[94] Sprintcom Inc., Wirelessco L.P., NPCR Inc. d/b/a Nextel Partners and Nextels West Corp. 57 v. Illinois Bell Telephone Company d/b/a AT&T Illinois, Arbitration Decision, 26 June 2013.

[95] Devas Multimedia Private Limited v. Antrix Corporation Limited, ICC Case No. 18051/CYK, Final Award, 14 September 2015.

[96] Deutsche Telekom AG v. Network Enhanced Technologies Inc., ICC Case No. 20179/GFG, Final Award, 2 June 2015.

[97] Slowakische Republik (Slovak Republic) v. Achmea BV, Case C-284/16, Judgment of the CJEU (Grand Chamber), 6 March 2018 (Slovak Republic v. Achmea) (https://curia.europa.eu/juris/document/document.jsf?text=&docid=199968&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=404057 (accessed 19 September 2023)).

[98] Request for a preliminary ruling under Article 267 of the Treaty on the Functioning of the European Union from the Bundesgerichtshof (Federal Court of Justice, Germany), made by a decision of 3 March 2016 (http://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&Datum=2016&Sort=3&nr=74612&linked=bes&Blank=1&file=dokument.pdf (in German) (accessed 19 September 2023)). See also Slovak Republic v. Achmea, op. cit. note 97, para. 2.

[99] Achmea B.V. v. The Slovak Republic, UNCITRAL, PCA Case No. 2008-13 (formerly Eureko B.V. v. The Slovak Republic), Award, 7 December 2012 (italaw.com) [https://www.italaw.com/cases/417 (accessed 19 September 2023)).

[100] Slovak Republic v. Achmea, op. cit. note 97, para. 14.

[101] id., para. 56 et seq.

[102] The judgment of the Court of Justice of the European Union (CJEU) is worded as follows:

Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.’

Slovak Republic v. Achmea, op. cit. note 97, p. 5710.

[103] ‘Agreement for the termination of Bilateral Investment Treaties between the Member States of the European Union’ (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22020A0529(01)&from=EN (accessed 19 September 2023)).

[104] Details of ratification and entry into force of the Agreement have been reported by the European Council (see https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2019049&DocLanguage=en (accessed 20 September 2023)).

[105] ‘Agreement for the termination of Bilateral Investment Treaties between the Member States of the European Union’, op. cit. note 103, Articles 2 and 3.

[106] id., Article 1(4) defines ‘concluded arbitration proceedings’ as follows:

any Arbitration Proceedings which ended with a settlement agreement or with a final award issued prior to 6 March 2018 where: (a) the award was duly executed prior to 6 March 2018, even where a related claim for legal costs has not been executed or enforced, and no challenge, review, set-aside, annulment, enforcement, revision or other similar proceedings in relation to such final award was pending on 6 March 2018; or (b) the award was set aside or annulled before the date of entry into force of this Agreement.

[107] id., Article 6.

[108] id., Article 1(5) defines ‘pending arbitration proceedings’ to mean ‘any Arbitration Proceedings initiated prior to 6 March 2018 and not qualifying as Concluded Arbitration Proceedings, regardless of their stage on the date of the entry into force of this Agreement’.

[109] id., Article 1(6) defines ‘new arbitration proceedings’ to mean ‘any Arbitration Proceedings initiated on or after 6 March 2018’.

[110] id., Article 7.

[111] id., Article 9.

[112] id., Article 10.

[113] Moldovia v. Komstroy LLC, Case C-741/19, Judgment of the CJEU (Grand Chamber), 2 September 2021 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=245528&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=3170137 (accessed 19 September 2023)).

[114] Poland v. PL Holdings, Case-109/20, Judgment of the CJEU (Grand Chamber), 26 October 2021 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=248141&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=26155384 (accessed 19 September 2023)).

[115] Sevilla Beheer B.V. and others v. The Kingdom of Spain, ICSID Case No. ARB/16/27, Decision on Jurisdiction, Liability and Quantum, 11 February 2022, paras. 655–76; see also Mainstream Renewable Power Ltd and ors. v. Federal Republic of Germany, ICSID Case No. ARB/21/26, Decision on Respondent’s Application under ICSID Arbitration Rule 41(5), 18 January 2022.

[116] id., paras. 666–67.

[117] Green Power Partners K/S and SCE Solar Don Benito AS v. Kingdom of Spain, SCC Arbitration V (2016/135), Award, 16 June 2022. See also Lisa Bohmer, ‘Analysis: First Investor-State Tribunal to Dismiss Case Based on Intra-Eu Objection Finds That EU Law Applies to Its Jurisdiction (In A Non-ICSID Case Seated in the EU) and Prevails Over the ECT’, IA Reporter, 22 June 2022.

[118] id., para. 162.

[119] id., para. 468, et seq.

[120] It must be noted that in light of Article 7 of the ‘Agreement for the termination of Bilateral Investment Treaties between the Member States of the European Union’, it will be for a claimant initiating investor-state proceedings against a Member State to convince an arbitral tribunal of its jurisdiction over the dispute.

[121] Queen Mary Survey, 2016, op. cit. note 27.

[122] id., at pp. 577, 9 and 15.

[123] id., at p. 577.

[124] id., at p. 577.

[125] See report by the European Telecommunications Network Operators’ Association, ‘State of Digital Communications 2022’, at p. 5724 (https://etno.eu/library/reports/104-state-of-digi-2022.html (accessed 19 September 2023)).

[126] Slovak Republic v. Achmea, op. cit. note 97, para. 55.

Unlock unlimited access to all Global Arbitration Review content