Questions and Observations: Interactive Session - Chapter 3 - Investment Protection and The Energy Charter Treaty
Thomas W. Wälde, Professor & Jean-Monnet Chair for EU Energy & Economic Law, Centre for Energy, Petroleum & Mineral Law and Policy, University of Dundee, Scotland
Walid Ben Hamida, Dr. Iur. (Frankfurt); LL.M. (Harvard); Essex Court Chambers (London)
Emmanuel Gaillard, Partner, Head of the International Arbitration Group, Shearman & Sterling LLP, Paris; Professor of Law, University of Paris XII
Originally from Investment Protection and The Energy Charter Treaty
The arbitrability of ECT pre-investment (access) rights, investment character of tender offers and parallel application of Energy Charter Treaty and European Community law
Context and relevance
The current climate (high energy prices, legal and slowly increasing practical integration of the EU energy markets and buoyant liquidity) is leading to a wave of intra-EU, cross-border corporate consolidation through mergers and acquisitions. Existing "national champions" seek to reinforce their position and aim at becoming European energy champions. Opinions are divided as to the concept of a politically supported "champion" but one of the political drivers of the current wave of industry consolidation is the perception that larger EU companies are necessary as a countervailing weight to the energy monopolies on which EU energy supply depends, in particular Gazprom and Rosneft in Russia and Sonatrach in Algeria.
In all countries where pre-existing national champions are affected by corporate take-over activities, political pressure and governmental instinct, apart, to some extent, from the UK, has led to attempts to protect national champions and create consolidation on the national rather than EU level. Such pressures are, in most cases, contrary to the freedom of movement disciplines of the EC Treaty. In spite of such legal obligations, the political pressure in most member states may escalate sufficiently in order to compel governments to devise strategies that appear to be in compliance with EU-law whilst simultaneously erecting visible or preferably invisible barriers to obstruct corporate takeovers from abroad and favour internal, politically favoured corporate consolidation. In areas with new regulatory regimes such as energy, competition law and stock markets, it is in particular the politically and legally independent regulatory agencies, and also the remaining regulatory powers of the energy ministries that are used. They can be deployed, directly and indirectly, for making life more difficult for foreign energy companies and easier for a preferred national company. The national company is usually more deeply rooted in and connected with the political, regulatory, labour union, administrative and judicial networks and institutions.
Chapter 3 -- Questions and observations: interactive session
Part I -- The Energy Charter Treaty and corporate acquisition
Thomas W. Wälde and Walid Ben Hamida
I The arbitrability of "pre-investment" (investment-admission) disputes under the ECT
II Can a public tender offer qualify as an existing “Investment” rather than a pre-investment activity?
III The applicability of the ECT to the relations between EC member states
Part II -- How does the so-called "fork-in-the-road" provision in Article 26(3)(b)(i) of the Energy Charter Treaty work? Why did the United States decline to sign the Energy Charter Treaty?