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DISPUTE SETTLEMENT

The Energy Charter Treaty contains a comprehensive and tailor-made system for settling disputes on matters covered by the Treaty. The two basic forms of binding dispute settlement are ad hoc arbitration for disputes between Contracting Parties on the interpretation or application of almost all aspects of the Treaty (except for competition and environmental issues), and investment arbitration for disputes between an investor and a Contracting Party. Nevertheless, the starting point for all these mechanisms is the desirability of an amicable agreement between the parties to any dispute.

Dispute settlement mechanisms available under the Energy Charter Treaty

Good Offices of the Energy Charter Secretariat: The Secretariat, as a trusted third party, can facilitate parties in a conflict to establish contact and to begin to explore ways to reach an amicable settlement. The Secretariat can also offer negotiation support. The good offices can be provided at any point in time and in relation to disputes between Contracting Parties, as well as between investors and Contracting Parties.

Disputes between investors and Contracting Parties: In the event of an alleged breach of the Treaty's investment provisions and if the dispute cannot be settled amicably within a period of three months, Article 26 allows investors to submit the dispute for its resolution to the courts or administrative tribunals of the Contracting Party to the dispute; in accordance with any applicable, previously agreed dispute settlement procedure; or to international arbitration or conciliation.

Disputes between parties to the Treaty:

  • General: Article 27 provides for an arbitration procedure for disputes regarding the interpretation or application of the Treaty (except for competition and environmental issues).
  • Transit disputes: Article 7.7 provides a specialised conciliation mechanism for transit disputes, allowing for a faster and less formal procedure. The conciliation rules were last amended in 2015 and a commentary was endorsed by the Conference in 2016.
  • Trade disputes: Article 29 and Annex D include a mechanism (following closely the WTO model) for settling trade disputes between Energy Charter member countries, provided that at least one of them is not a WTO member. In 1999 the conference adopted the Rules of Procedure for Panel Proceedings.
  • Competition disputes: Article 6 provides for bilateral non-binding consultation mechanism.
  • Environmental disputes: Article 19 provides for disputes to be reviewed by the Charter Conference if no other appropriate international for a exists for the consideration of such disputes.

Latest Dispute Settlement News

On 21 October 2016, the Energy Charter Secretariat’s Knowledge Centre concluded a three-day marathon of legal discussions, interventions and...

On 19 July 2016 the Energy Charter Conference, under the Japanese Chairmanship, endorsed the Guide on Investment Mediation as a helpful, voluntary...

The United Nations Conference on Trade and Development (UNCTAD) has published its latest IIA Issue Note with its annual review of developments in 2015...

On 19 May 2016, at the invitation of Inter-RAO, the Legal Counsel of the Energy Charter Secretariat Alejandro Carballo Leyda participated at a...

The Hague District Court has quashed the $50 Billion arbitration awards against the Russian Federation.

In 2014, the Russian Federation was ordered...

Latest Dispute Settlement Publications

On 8 February 2016, the Stockholm Chamber of Commerce hosted the Energy Charter Forum in Stockholm. The event was jointly organised by the Stockholm...

The furore over the use of ISDS (Investor/State Dispute Settlement) in the United States/European Union Transatlantic Trade and Investment Partnership...

The consolidated version of the Energy Charter Treaty and related documents is not a legal document. It is a comprehensive reader-friendly edition is...

Investment Protection and the Energy Charter Treaty, edited by Graham Coop and Clarisse Ribeiro, General Counsel and Legal Counsel, respectively, of...