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Taking Stock Of The ECT Modernization Process: Fit For The 21st Century?


September 29, 2022
6:00 am to 7:30 am EDT


Moderator: TBC
Presenter: Daniela Ghicajanu – Georgetown University
Panelist: Guy Lentz (ECT Secretary-General)
Panelist: Nikos Lavranos (International Dispute Resolution Arbitrator & Mediator)
Panelist: Marinn Carlson (Sidley Austin, Partner)

The Energy Charter Treaty (ECT) is a multilateral trade and investment treaty in force since 1998 providing for an international binding legal framework for energy cooperation between 53 Contracting Parties, among which the European Union and EURATOM are also tincluded in their own capacity. Today, it is the most used investment agreement globally. It is the only intergovernmental agreement applicable to all energy sources (fossil fuels, renewables, nuclear and others) at every stage of the supply chain (production, distribution, transit). It provides for a dispute resolution mechanism based on arbitration, with the fossil fuels and renewable energy disputes dominating the arena, both in numbers and total damages awarded, i.e., approx. EUR 500 mil. + Yukos cases (EUR 41bn) for fossil fuels and approx. EUR 1.2bn for renewables. On June 1, 2022 there were 54 pending cases.

The ECT reform emerged as a necessity due to (i) the inconsistent interpretation and application of the ECT provisions by tribunals, national courts and recently by the Court of Justice of the European Union (CJUE), (ii) the EU’s concerns regarding the investment protection provisions in the ECT and (iii) the necessity to align the ECT with the Paris Agreement, and with EU’s goals on sustainable investment, climate change and net zero goals. The modernization discussions started in 2017, but the first negotiation round took place only in July 2020. After five years, the ECT Reform was concluded in 2022.

A closer look at the practice of tribunals in cases under the auspices of the ECT reflect the point on consistency. The notion of “investment” has been interpreted broadly sometimes (Energoalliance v Moldova, Petrobart v Kyrgyz Republic) and narrower other times (Energorynok v Moldova). But this is not only an investment arbitration tribunal’s issue. This lack of consistency is also observed in practice by regional and national courts: The CJUE in its preliminary ruling addressing the questions from Paris Court of Appeal, in Republic of Moldova v. Komstroy (Energolliance) had also a narrower interpretation of the notion of “investment”, while the Court of Cassation in Paris had a broader reading of “investment”.

Different tribunals have also interpreted the standards of protection divergently creating uncertainty about the obligations of fair and equitable treatment, full protection and security, and minimum standard of treatment contained in Article 10(1) ECT. An added ingredient has been the tension between EU law and the ECT. After Achmea, the EU Commission in its amicus briefs, and the EU Member States as respondents argued in favour of the incompatibility between the ECT dispute resolution mechanism in intra-EU ECT disputes.

Tribunals were divided on the matter. While the Electrabel v. Hungary tribunal held that EU law prevailed over the ECT ‘in case of any material inconsistency’, the opposite conclusion was reached in RREEF v Spain. But in AES v. Hungary, a case comparable to Electrabel, the tribunal—in line with basic principles of public international law— considered EU law as a ‘fact’. The Vattenfall tribunal held that the ECT prevailed over EU law. However, in September 2021, the CJUE saw an opportunity to bring its own regional “clarity” by opining in its preliminary ruling that the ECT will be outranked in an intra-EU ECT-related dispute.

Thus, for the CJUE—which is not the authoritative interpreter of the ECT—an ECT investment tribunal would not have jurisdiction in such disputes. Yet, Komstroy was never an intra-EU ECT dispute, but a dispute involving a non-EU State and a third country investor. Moreover, CJUE did not rely on the Vienna Convention on the Law of Treaties, but on the EU law supremacy over an apparent conflicting international norm.

Now that the ECT reform has been concluded, its outcome features various aspects: The facilitation of sustainable investments with the creation of a modern framework, the increase in the level of investment protection, the creation of mechanisms that allow States to pursue their individual energy security and climate goals, the apparent end of intra-EU applications under the ECT, the strengthening of environmental and social provisions, and the inclusion of new definitions for relevant terms such as “investor” and “investment”.

From a public international law perspective, certain questions had been raised before the reform to the ECT: Does the CJUE have jurisdiction to interpret ECT as EU law since Komstroy was an extra-EU dispute having the arbitration seat in an EU Member State? Can one signatory, i.e., the EU, impose its multilateral investment court system in the ECT? Is the CJUE competent to provide an interpretation of the rights and obligations on non-EU ECT Contracting Parties? How to reconcile the principles of supremacy and autonomy of EU law, as a sui generis and regional legal order, with the public international law order governing ECT as a multilateral treaty?

Now that the modernization process has concluded, what are the answers which are provided by reform of the ECT? This panel will discuss the ongoing tensions between EU law and International Investment Law, as well as the new status created by the deal achieved after the negotiations of modernization of the ECT.


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September 26 - September 30

September 26 - September 30

International Dispute Resolution and the Ukraine-Russia Crisis

World Arbitration Update (“WAU”) invites you to attend a 75-minute webinar discussion by leading practitioners in the international dispute resolution field on the recent developments concerning the intersection of dispute resolution and the Ukraine-Russia crisis. According to the Kyiv School of Economics, Ukraine has so far experienced economic damage amounting up to $600 billion. Over $10 billion in airplane assets have been reportedly stranded in Russia setting off potentially large insurance claims and related disputes. Yale School of Management has collected data showing that almost 1,000 companies have publicly announced they are voluntarily curtailing operations in Russia to some degree beyond the bare minimum legally required by international sanctions. The Russian parliament continues to consider the expropriation of foreign assets. International disputes involving Russia and Ukraine are arising from the crisis and more likely to follow. Our speakers will discuss related topics, including: the impact of sanctions, the proposed formation of an international claims commission for Ukraine, the impact of the crisis on the legal profession, the potential and current international forums in which Ukrainian businesses and investors could submit legal recourse to address the consequences of the war in Ukraine, as well as an update on the ICJ case, Ukraine v. Russian Federation.

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September 26 - September 30

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The Actions of Russia, Countermeasures and Resulting International Disputes, Including Investor-State and Commercial Arbitration

September 26 at 6:00 pm to 7:30 pm GMT



JULY 12, 2022


6:00 pm to 7:30 pm GMT


Moderators: Gene Burd (FisherBroyles) (TBC)

Presenter: Rob Houston (K&L Gates Straits Law LLC)

Panelist: Tatyana Slipachuk (Of Counsel at Chief Legal Department of the Ukrainian Parliament, Special Advisor at Sayenko Kharenko Law Firm) (TBC)

Panelist: Raja Bose (K&L Gates Straits Law LLC) (TBC)

Panelist: Derek Loh (Deputy Director-General (Economic & Social), Attorney-General’s Chambers, Singapore) (TBC)

Panelist: Simon Chesterman (Dean, National University of Singapore School of Law) 

In response to the imposition of international sanctions on Russia for its invasion of Ukraine, Russia has imposed sweeping economic measures on foreign investors from States it considers “unfriendly”, including Singapore, the UK, the US, and EU Member States.  Both international sanctions on Russia and Russia’s own economic measures on foreign investors have had wide-ranging impacts across global market sectors, affecting foreign investors from around the world both directly through compliance mechanisms and indirectly through international commercial contracts.   

However, a number of venues exist for the resolution of the wide range of disputes anticipated to result from the current crisis.  In particular, foreign investors may still seek protection under investment treaties.  Currently, there are 62 BITs in force between Russia and other States, including 27 States that Russia has determined to be “unfriendly” as a result of international sanctions imposed on Russia.  Such treaties generally include substantive obligations to promote and protect foreign investment (e.g., to provide fair and equitable treatment, not to undertake unlawful expropriation of foreign investments, etc.) as well as for access to investment treaty arbitration against the Host State in certain circumstances.  Such public international law obligations under international investment treaties now appear at odds, for example, with recent economic measures imposed by Russia against foreign investors including: 

  • Currency Transfer Restrictions 

  • Transaction Approval Requirements 

  • Prohibition of Foreign Currency Export 

  • Restrictions on Debt Repayment 

  • Prohibition of Certain Exports and Imports 

  • Non-Enforcement of Intellectual Property Rights 

Also, the Russian Duma has considered additional measures (which many anticipate to be expropriatory) to effect the transfer of ownership or operation of certain foreign investments where foreign investors have ceased operating in Russia in the current climate of international sanctions. The resulting international legal climate arising from Russia’s actions in Ukraine breaks new ground in public and private international law. Practitioners are therefore broadly anticipating a wave of disputes both in international commercial arbitration and in investor-State arbitration, including with respect to claims advanced by covered investors in investment treaty arbitration against Russia for economic measures like the above.   

This panel will explore the implications of these developments both from a global perspective and a regional perspective in Southeast Asia, highlighting the following key points of interest: 

  • The Current International Sanctions Climate 

  • Regional Focus on International Sanctions in Southeast Asia 

  • Consideration of Current Venues for Disputes Arising from the Invasion of Ukraine 

  • Potential Mechanisms for Foreign Investors to Pursue Claims Arising from the Conflict in Ukraine in Investment Treaty Arbitration 

  • Anticipated Disputes and Issues in International Commercial Arbitration Prompted by the Conflict in Ukraine 

  • The Current Landscape for Sovereign Immunity and the Potential for Enforcement of Arbitral Awards Against State Assets 

This program will provide a brief summary of recent developments in relation to Russia’s invasion of Ukraine and identify key legal issues, including the interplay between international sanctions and customary international law (e.g., the characterization of countermeasures and the application of the law of State Responsibility (including State Defences) in Public International Law as well as issues arising in Private International Law and International Commercial Arbitration (such as Force Majeure).  The panel discussion will be followed by a Q&A period as well as a networking session.