After a lengthy negotiation process, Contracting Parties at the June 24 meeting of the Energy Charter Conference reached an agreement in principle to modernize the Energy Charter Treaty (ECT)—an outdated investment treaty that protects fossil fuel investors at the expense of critical climate action.
Eskosol S.p.A. in liquidazione v. Italian Republic, ICSID Case No. ARB/15/50
Two rounds of the negotiations for the modernization of the ECT have been held over the past two months, from July 6 to 9 and September 8 to 11, 2020.
Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36
The EU released a proposal for the modernization of the ECT on May 27, 2020. This latest draft of the EU’s proposal includes changes to the treaty’s definition of investment, an affirmation of parties’ right to regulate, a narrower definition of FET, and reference to a multilateral investment court. The proposal also suggests several additional articles on sustainable development, frivolous claims, security for costs, interventions by third parties, third-party funding, and valuation of damages.
The negotiations for ECT modernization are now underway, with the first such meetings held in December 2019 and at least four other sessions planned over 2020.
Stadtwerke München GmbH, RWE Innogy GmbH, and others v. Kingdom of Spain, ICSID Case No. ARB/15/1
There are several efforts underway at multiple levels—national, bilateral, regional and multilateral—aimed at reforming the IIA regime. These reform efforts are operating in parallel to developments in other areas of international investment governance, some of which have advanced quickly over the past year, including the structured discussions on investment facilitation at the WTO, as well as efforts in the UN context to craft a binding treaty on business and human rights. This year’s UNCTAD High-Level IIA Conference assessed the progress made to date since launching UNCTAD’s 10 Options for Phase 2 of IIA Reform, looking at trends across multiple areas of international investment governance, as well as across world regions. This ITN Insight summarizes the key takeaways from the 2019 event and considerations for Phase 2 going forward.
On November 6, 2019, the Energy Charter Conference confirmed that it would hold the first session of its “Modernization Group” on December 12, 2019, kicking off the process to revise the decades-old ECT.
A long-simmering row over plans for two new pipelines that would carry natural gas from Russia into Germany has advanced quickly in recent months, after gas company Nord Stream 2 submitted a notice of arbitration against the EU under the ECT on September 26, 2019.
Belenergia S.A. v. Italian Republic, ICSID Case No. ARB/15/40
Cube Infrastructure Fund SICAV and Others v. The Kingdom of Spain, ICSID Case No. ARB/15/20
Negotiations for modernizing the Energy Charter Treaty, a 1994 agreement covering trade, investment and other aspects of the energy sector among its contracting parties, are expected to begin before 2019 draws to a close. Yet given the need identified in myriad other forums to reform ISDS and to ensure trade and investment agreements can support ambitious climate action, why aren’t more officials and commentators discussing the possibility of terminating the ECT entirely, or of reconsidering its survival clause for those parties which choose to withdraw? Tania Voon explores the issue and outlines options going forward.
Spain has faced approximately 40 arbitrations since it made the decision in 2010 to rescind or revise various regulatory measures aimed at drawing in greater investments into renewable energy projects. This article examines the awards issued in four of those cases, looking in particular at how the tribunals interpreted and applied the FET standard. The author looks at the potential problems that can emerge when states are unsure of how any given tribunal may interpret FET or other key standards and presents some potential solutions.
The Energy Charter Treaty modernization negotiations are due to begin later this year and a set of topics for parties to consider has already been announced. This piece examines the prospects for updating the ECT’s existing formulation of FET and analyzes how this standard has been interpreted in past arbitrations involving renewable energy disputes. The author argues in favour of including a requirement of investor due diligence as an attempt to help ensure that investors anticipate possible risks that may emerge from changes to a state’s regulatory framework.
The EC released on May 14 a set of draft negotiating directives setting out its proposed approach in “modernizing” the Energy Charter Treaty (ECT).
RREEF INFRASTRUCTURE (G.P.) LIMITED AND RREEF PAN-EUROPEAN INFRASTRUCTURE TWO LUX S.A R.L. V. KINGDOM OF SPAIN, ICSID CASE NO. ARB/13/30
BLUSUN S.A., JEAN-PIERRE LECORCIER AND MICHAEL STEIN V. ITALIAN REPUBLIC, ICSID CASE NO. ARB/14/3
GREENTECH ENERGY SYSTEMS A/S & ORS. V. THE ITALIAN REPUBLIC, SCC ARBITRATION V (2015/095)
ANTIN INFRASTRUCTURE SERVICES LUXEMBOURG S.À.R.L. AND ANTIN ENERGIA TERMOSOLAR B.V. V. THE KINGDOM OF SPAIN, ICSID CASE NO. ARB/13/31
ANTARIS SOLAR GMBH AND DR. MICHAEL GÖDE V. CZECH REPUBLIC, PCA CASE NO. 2014-01
MASDAR SOLAR & WIND COOPERATIEF U.A. V. THE KINGDOM OF SPAIN, ICSID CASE NO. ARB/14/1
Isolux Infrastructure Netherlands B.V. v. the Kingdom of Spain, SCC Case No. V2013/153
Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36
The Energy Charter Secretariat is in expansion mode, wanting to gain access to energy resources in Africa and Asia for its members—and extending a far-reaching and outdated investment protection system to investments in resource-rich countries.
Those that propose that the environment needs “more investment protection” are recommending a very long-term solution (of questionable efficacy) to what is essentially a short-term problem.
State Enterprise “Energorynok” (Ukraine) v. The Republic of Moldova, SCC Arbitration V (2012/175)
Canada receives investor complaints over provincial energy and environment policies In recent months the government of Canada has received two complaints related to energy and environmental policies adopted by its […]
Vattenfall launches new claim against Germany The Swedish state-run energy firm Vattenfall has launched a second claim against Germany. The claim stems from Germany’s May 2011 decision to phase-out its […]
As governments increasingly turn to renewable energy to mitigate climate change, domestic climate-related policies in the form of price support measures such as feed-in tariffs (FiTs) have played an important […]
Arbitrator sharply critical of majority decision in Italian bondholder claim against Argentina Abaclat and Others (Case formerly known as Giovanna a Beccara and Others) v. Argentine Republic, ICSID Case No. […]
Philip Morris files for arbitration over intellectual property dispute with Australia The tobacco company Philip Morris filed for arbitration on 21 November 2011, claiming the government of Australia’s regulations on […]
UK firm victorious in dispute with Russia, but damages much less than claimed RosInvestCo UK Ltd. v. The Russian Federation, SCC Case No. Arb. V079/2005 Lise Johnson In an award […]
By Elizabeth Whitsitt March 11, 2010 Despite snow storm interruptions a tribunal, composed of Mr. V.V. Vedeer, Ms. Gabrielle Kaufmann-Kohler, and Ms. Brigitte Stern, heard the merits of the dispute […]
By Elizabeth Whitsitt February 14, 2010 Three highly anticipated decisions permitting three claimants – all former shareholders of Yukos Oil Corporation OJSC (Yukos) – to proceed to the merits phase […]
By Elizabeth Whitsitt November 3, 2009 On September 17, 2009 an ICSID tribunal dismissed yet another claim initiated against the Republic of Turkey by an entity, Cementownia “Nowa Huta” S.A. […]
By Elizabeth Whitsitt November 3, 2009 After a disagreement regarding the existence of a settlement agreement, an ICSID tribunal has determined that it has no jurisdiction to hear a dispute […]
By Damon Vis-Dunbar 15 July 2009 Arbitration proceedings between the Government of Germany and the Swedish energy utility Vattenfall should be conducted transparently, argue a coalition of non-governmental organizations. Greenpeace […]
By Damon Vis-Dunbar 11 July 2009 Investment Treaty News (ITN) has posted the request for arbitration by the Swedish energy utility Vattenfall against the Government of Germany. In April Vattenfall […]
By Damon Vis-Dunbar 2 May 2009 The German government has declined to provide information on an investment dispute with the European utility Vattenfall on the grounds that it is against government […]
By Damon Vis-Dunbar13 October 2008 Details of an arbitration involving a Latvian investor and the government of the Ukraine have emerged following the public release of the tribunal’s final award, […]
By Elizabeth Whitsitt 30 September 2008 In a 27 August 2008 decision, a tribunal has concluded that Plama Consortium Limited (PCL), a Cyprus firm, was not entitled to protections afforded […]
By Damon Vis-Dunbar 26 September 2008 A US citizen, Devincci Salah Hourani, has launched a lawsuit against the government of Kazakhstan over a failed contract to explore and exploit oil […]
The International Institute for Sustainable Development has published a report on clean-energy investment, with a focus on encouraging policies that would attract environmentally sustainable investment into developing countries. The report describes obstacles […]
Transnational Dispute Management (TDM) is announcing a special issue dedicated to the notion of investment. The theme of the issue is: “The notion of investment: in search of an acceptable […]