The Energy Charter Treaty and Related Jurisprudence - Chapter 07 - Leading Practitioners’ Guide to International Oil & Gas Arbitration

Author(s):

Arif H. Ali

Alexandre de Gramont

Page Count:

82 pages

Media Description:

1 Hardcover Volume. Index.

Published:

August, 2015

PDF826.2 KB

$40.00

Description:

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I. INTRODUCTION

The Energy Charter Treaty (the “ECT” or the “Treaty”) has

spawned some of the largest, most controversial, and highly

publicized international arbitrations in history—including the USD

50 billion award rendered against Russia in the Yukos arbitration cases

in July 2014, reportedly the largest publicly known international

arbitration award.1

The ECT is unique in many respects. It is one of the relatively

few multilateral investment treaties in the world, and the only one

devoted to a specific economic sector. The fact that the sector is

energy—and that the signatories include most of the states in

Western Europe and all of the states of the former Soviet Republic

(including the Russian Federation)—gives the ECT enormous

geopolitical as well as economic importance.2 The ECT provides

broad investment protections for investors of “Contracting Parties”

(i.e., states or regional organizations that have signed and ratified the

ECT) who invest in the energy sector of other Contracting Parties—

and affords such investors several options for commencing

international arbitration against the Contracting Party hosting the

investment if any investment protections are alleged to have been

breached. Given these circumstances, it is not surprising that the

number of international energy disputes brought under the ECT has

grown rapidly, with almost half of the more than 60 publicly known

cases brought in only the last two years.3 Given the nature of the

projects that are typically at issue in these arbitrations, ECT cases

often allege damages in the hundreds of millions and even (as in
Yukos) billions of dollars.