Investment Arbitration of Ahold Delhaize against Serbia – Implementation of the Regulation on Special Conditions for Conducting Trade
The company Ahold Delhaize has initiated proceedings before the International Centre for Settlement of Investment Disputes (ICSID) in Washington against the Republic of Serbia regarding the implementation of the Regulation on Special Conditions for Conducting Trade for certain types of goods from September 2025 (the “Regulation”).
Ahold Delhaize has announced that, as a result of the Regulation’s implementation, more than 75% of the revenue of “Delhaize Serbia” has been affected, 25 stores have been closed, hundreds of jobs have been lost, and investments planned for 2026 have been suspended. The company further stated that “Delhaize Serbia” will continue to operate at a loss.
Although this constitutes a typical investor–state dispute, the arbitration proceedings raise several important questions:
- Has there been a breach of the fair and equitable treatment (FET) standard under the Agreement on Promotion and Reciprocal Protection of Investments between the Federal Republic of Yugoslavia and the Kingdom of the Netherlands?
- Have the investor’s legitimate expectations been frustrated?
- To what extent does the police powers doctrine apply—i.e., the State’s right to regulate in the public interest without an obligation to compensate?
The central issue will be establishing a balance between the protection of investors under the bilateral investment treaty and the State’s right to pursue economic and social policies in extraordinary or market-disrupted circumstances.
Arbitral practice shows that tribunals are increasingly willing to recognize a broader margin of appreciation for regulatory measures, provided that such measures are proportionate, non-discriminatory, transparent, and not arbitrary.
If the tribunal finds a breach, the consequences for the budget of the Republic of Serbia could be significant. Perhaps even more importantly, such a decision could influence future regulatory interventions by the State in market sectors.
If Serbia prevails in the dispute, this would represent an affirmation of regulatory sovereignty in the context of price control and consumer protection. However, it could also mean that investors may exercise greater caution when selecting national markets and investing in sectors that could be subject to regulatory measures.
Regardless of the outcome, this dispute is significant as it may become a reference point for future investment arbitration cases in Serbia and the region, and because it touches upon complex issues of public finances, investment protection, regulatory policy, and consumer protection.
For additional information or consultations, the Tasić & Partners team is at your disposal.