Originally from Investment Protection and The Energy Charter Treaty

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Although the Energy Charter Treaty (“ECT”) was signed in December 1994 and entered into full legal force in April 1998, it was not until April 2001 that an investor first sought to access the dispute resolution mechanisms under the Treaty in order to protect its rights.2 However, since that date, there has been a gradual increase in the number of investor-state claims brought under the Treaty, reaching a high point in 2005 when six claims were registered.3 It would appear that investors are becoming more and more aware of their rights under the Treaty and more and more willing to enforce those rights under the mechanisms provided in the Treaty. This part first provides a simple introduction to the mechanisms for the resolution of investor-state disputes under the Treaty and then briefly sets out a comparison of those mechanisms.

The starting point is Article 26 in Part V of the Treaty. Article 26 provides the dispute resolution mechanisms in relation to investor-state investment disputes. It is an extremely important provision of the Treaty as the rights and obligations set out in Part III of the Treaty are guaranteed by the dispute resolution mechanisms provided in Article 26 ECT. It gives Investors (as defined in the ECT) a directly enforceable right to bring claims against host states in relation to alleged breaches of Part III ECT.4 It is worth noting that the dispute resolution mechanisms under Article 26 ECT are not available where the dispute in question relates to an obligation outside of Part III ECT. For example, disputes between Contracting Parties are to be resolved by the procedures set out in Article 27 ECT.