Modernising the Energy Charter Treaty: An Opportunity to Enhance Legal Certainty in Investor-State Dispute Settlement

Abstract

The Energy Charter Treaty is a multilateral trade and investment agreement that is currently the most often-invoked investment agreement worldwide. A review of the case law under the treaty shows that its provisions have been interpreted and applied inconsistently by arbitral tribunals and domestic courts. Considering the financial and reputational consequences of investment arbitration for both the investor and the State, a lack of 'legal certainty' adversely affects all parties involved. This article identifies various inconsistencies, some of the causes, and proposes solutions that could enhance legal certainty in investor-State dispute settlement under the treaty. This is a timely contribution as the Energy Charter Conference has recently taken the first steps to modernise the treaty by approving a list of topics for reform, and is now considering tools to implement future reform measures.