The Dispute Resolution Procedures of the Energy Charter Treaty: Made to Measure – Vol. 6 No. 4

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AuthorOlivia Q. Swaak-Goldman*

Published: December 1995

Categories of Disputes
Dispute Resolution and Litigation

Description: During the European Council meeting in June 1990, the Prime Minister of the Netherlands suggested that economic recovery in Eastern Europe and the then Soviet Union could be stimulated on a sectoral basis by means of cooperation in the energy sector. This idea was the basis for a European Commission proposal in February 1991 for a European Energy Charter (the Charter). The European Communities (EC) then invited the other European countries, both East and West, the Soviet Union, and the non-European members of the Organization for Economic Co-operation and Development (OECD) to commence negotiations which resulted in the adoption of the Charter on December 17, 1991. The Charter included an obligation to continue negotiations with the goal of arriving at a binding treaty. The result of these negotiations was the Energy Charter Treaty (ECT).

The ECT, signed oil December 17, 1994 by 41 states and the EC, is a multilateral agreement limited in scope to the energy sector. Within that sector the ECT addresses a variety of topics, such as investment, transit, competition, the environment, trade, etc., and creates legal rights and obligations within these different areas. It also establishes mandatory dispute resolution mechanisms to address conflicts between ECT parties in these areas. As no reservations to the ECT are permissible, all ECT parties are required to accept binding third-party settlement procedures. The detailed rules about the settlement of disputes reinforce the credibility of the legal framework established by the ECT and represent “an unprecedented set of sanctions applicable to a sectoral agreement.”

The general dispute resolution procedures are contained in Part V ECT (Articles 26 and 27 in particular), although their application to specific sectors is often nuanced. The purpose of this article is to examine the various dispute resolution procedures utilized by the ECT.

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*Europa Institute, Faculty of Law, University of Leiden, The Netherlands.