International Energy Charter draft model investment dispute prevention and management protocol
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IISD | August 2018

International Energy Charter draft model investment dispute prevention and management protocol

Background

The International Energy Charter Secretariat (International Energy Charter) organized a workshop for government officials on the “Prevention and Management of Investment Disputes” at the International Energy Charter’s premises in Brussels on July 6, 2018. The Secretariat explains that it has been working on a “Model Protocol that could provide a framework for preventing and managing investment disputes.” The invitation to the workshop has been extended not only to member states but also to others, including countries of the Africa, Caribbean and Pacific group through the ACP Secretariat.

The International Energy Charter is mostly known for the large number of investor–state arbitrations brought under its Energy Charter Treaty (ECT). The International Energy Charter’s website currently lists 115 known arbitration cases initiated under the agreement, with 75 filed in the last five years alone. With the original aim of integrating the energy sectors of the former Soviet Union and Eastern Europe into Western European markets at the end of the Cold War, the stated purpose of the ECT was to establish “a legal framework in order to promote long-term cooperation in the energy field.” Although the framework covers multilateral cooperation over energy transit, trade and efficiency, its primary focus has been on investment protection and international arbitration.

It also includes the largest investment treaty award in history, in three cases brought by Yukos shareholders against Russia. In that instance, an arbitral tribunal found Russia liable for over 50 billion Euros. This arbitral award was eventually set aside by a Dutch court in April 2016, but the investors are still trying to overturn the decision and are pursuing enforcement proceedings of the set-aside award against Russia across the globe. Another case is pending against Germany for the government’s decision to phase out nuclear energy.

As of June 2018, the 1994 ECT has been signed or acceded to by 51 states plus the European Union and Euratom, bringing the total number of its signatories to 53. But the International Energy Charter is currently looking to gain new resource-rich member countries in Africa and Asia (see our article from June 2017). The July 6 workshop, which is extended to non-members, attests to this intention.

Read more (pdf)

Click here for the draft Model Dispute Management Protocol

source: IISD