Published 7 December 2018
The Energy Charter Treaty is the only legally-binding multilateral instrument in the energy sector. Apart from regulating energy trade (Part II) and providing protection of foreign investments (Part III), it also covers the alternative resolution of investor-state disputes (Part V, Article 26).
The current text of Article 26 does not provide for sufficiently efficient alternative dispute resolution framework. It also does not follow the most recent practice in arguably the most significant alternative dispute resolution mechanism - international investment arbitration.
In order to attract more signatories, foster an open and competitive energy market and stimulate foreign direct investments, the Energy Charter Treaty needs to maintain a stable framework for energy trade, protection of investments and alternative investor-state dispute resolution. Concurrently, it needs to stay in line with the major global developments in these areas.
The author proposes two amendments to the text of Article 26. The first proposed amendment is the inclusion of a provision which will provide a basis for the early dismissal of frivolous claims and defences on both procedural and substantive bases. The second proposed amendment is the inclusion of two more available institutional arbitration frameworks that foreign private investors can choose from.