Washington, D.C., 18 May 2007
"The Energy Charter Treaty is a cornerstone of the international legal framework for the energy sector, and I welcome its contribution to achieving key objectives shared by the World Bank - strengthening the rule of law, securing reliable energy supply and encouraging the flows of trade and investment that can promote sustainable economic growth", said Ana Palacio, Secretary General of the International Centre for Settlement of Investment Disputes and Senior Vice President of the World Bank Group, at the opening of a Conference on Investment Protection and the Energy Charter Treaty on 18 May in Washington, D.C.
The Conference brought together leading international experts to discuss the role of the Energy Charter Treaty (ECT) to the resolution of disputes between individual investors and host governments. As noted by André Mernier, Secretary General of the Energy Charter Secretariat (click for opening remarks), the number of cases brought by investors under the ECT has risen in recent years. While the number of disputes should not be a measure of the Treaty's effectiveness, Mr Mernier underlined their importance in demonstrating that the Treaty is a functioning instrument of international law.
The first arbitral award under the Treaty was made in 2003 in a dispute heard at the Institute of Arbitration of the Stockholm Chamber of Commerce, and Ulf Franke, Secretary General of the SCC Institute, welcomed the opportunity to discuss the growing body of jurisprudence related to the ECT. The arbitration proceedings instituted under the Treaty* have revealed a range of challenging legal issues, some common to investor-State arbitration but some also specific to the ECT.
As well as an insight into the negotiating history of the ECT, participants had the chance to examine with leading practitioners key substantive and procedural issues related to ECT investment arbitration, including the question of provisional application of the Treaty, the circumstances under which participating states can deny ECT advantages to certain legal entities or investments, the standard of treatment available under the Treaty, and the interplay of the ECT with other international treaties.
The 1994 Energy Charter Treaty is a legally binding multilateral instrument, the only one of its kind dealing specifically with inter-governmental cooperation in the energy sector. Fifty-one countries across Europe and Asia (and the European Union as a whole) have signed the Treaty, and forty-six have completed the ratification process. The fundamental aim of the Treaty is to create a level playing field of rules to be observed by all participating governments, thus minimising the risks associated with energy-related investments and trade, and promoting efficient energy use.
The Conference in Washington was organised jointly by the International Centre for Settlement of Investment Disputes, the Energy Charter Secretariat, and the Arbitration Institute of the Stockholm Chamber of Commerce. It follows a first event of its kind that was hosted by the Stockholm Institute in Sweden in June 2005.
For more information, please see the programme of the Conference.
* If an investor chooses to bring a dispute to international arbitration under the ECT, there are three possible avenues: the International Centre for Settlement of Investment Disputes; a sole arbitrator or an ad hoc arbitration tribunal established under the rules of the United Nations Commission on International Trade Law (UNCITRAL); or an application to the Arbitration Institute of the Stockholm Chamber of Commerce.