BayWa r.e. Renewable Energy GmbH and BayWa r.e. Asset Holding GmbH v. Spain, ICSID Case No. ARB/15/16 In a final award, dated January 25, 2021, an ICSID tribunal ordered Spain to pay damages to German investors in compensation for the clawback of a subsidy regime. Although the bulk of investor’s primary claims under the ECT […]
Since our last report, two more negotiation rounds have taken place on ECT modernization. The seventh round took place from October 28–November 1, 2021, while the eighth round was held from November 9–11, 2021. During both rounds, the modernization group discussed issues related to investor–state dispute settlement, including frivolous claims, security for costs, third-party funding, […]
With negotiators preparing for the seventh round of ECT modernization talks, and no signs of tangible progress, the continued emergence of new investor-state disputes under the controversial agreement has highlighted the risks the treaty poses for states as they phase out fossil fuels. Of all fossil fuels, coal has the greatest climate impact, and UN […]
There is scientific consensus that in order to limit global warming as defined in the Paris Agreement states must swiftly phase out fossil fuels and transition to low-carbon energy systems.[1] However, given the continued dependency of economies on fossil fuels, such phase-outs and the pursuit of a clean energy transition at a global scale are […]
Since we last reported on the process, there have been two virtual negotiation rounds on ECT modernization, taking place in the midst of increased civil society opposition to the agreement, particularly within the EU.
Introduction[1] The Energy Charter Treaty (ECT) faces criticism for its outdated investment provisions and the threats it poses to the energy transition. ISDS claims brought pursuant to the ECT by fossil fuel investors demonstrate that these threats are imminent and real. Moreover, they are likely to increase as governments take more ambitious climate action. Most […]
As we reported, German-owned energy company Uniper put the Netherlands on notice of an investment dispute last year, following the announcement of the country’s plan to phase out coal-burning power plants by 2030. Alongside RWE, another German energy company, Uniper made good on that threat earlier this year; both companies initiated ICSID claims lodged under the ECT this spring.
The relationship between the ECT and EU law is characterized by complexity and legal uncertainty, especially as far Article 26, the ECT’s dispute settlement mechanism and its application in an intra-EU setting is concerned. This article examines the question of whether the Achmea judgment’s finding on the incompatibility of intra-EU investment arbitration under BITs also affects the dispute settlement mechanism under the ECT
Following three negotiation rounds on ECT modernization last year, the most recent of which concluded on November 6, 2020, a leaked progress report from December 2020 suggests that state parties are still divided on key issues. This makes progress in negotiations, which require consensus from the national delegations, difficult to come by.
On December 2, 2020, in an answer to questions submitted by MEPs, the EC suggested that the EU could exit the ECT.
The European Council has approved negotiating directives for the EU’s participation in talks to modernize the ECT, confirming its decision during a meeting on July 2, 2019.
9REN Holding S.À.R.L. v. The Kingdom of Spain, ICSID Case No. ARB/15/15
NextEra Energy Global Holdings B.V and NextEra Energy Spain Holdings B.V v. Kingdom of Spain, ICSID Case No. ARB/14/11
CEF Energia B.V. v. The Italian Republic, SCC Arbitration V (2015/158)