The Relationship Between Contractual Claims and Claims under the ECT and other Investment Protection Treaties - Chapter 4 - Investment Arbitration and the Energy Charter Treaty

Gabrielle Kaufmann-Kohler is a professor of private international law at Geneva University Law School (since 1997), and a practising attorney and partner with Schellenberg Wittmer, Geneva (since 1996). Previously, she was an adjunct professor at Geneva University Law School (1993 to 1997) and a partner (1985 to 1995) and associate (1981 to 1985) with Baker & McKenzie, Geneva and New York. She was admitted to the New York Bar in 1981 and to the Geneva Bar in 1976.

Professor Kaufmann-Kohler focuses primarily on international commercial and investment arbitration and has extensive arbitration experience, having handled over one hundred and twenty international arbitrations, as presiding, sole or party-appointed arbitrator, or as counsel. She appears on numerous arbitration panels, including ICC, ICSID, and AAA. She chaired the Swiss Arbitration Association from 2001 to 2005, and is a member of the International Council for Commercial Arbitration (ICCA), the ICC Court of Arbitration, and the Board of The Swiss International Law Society. Her teaching and research activities focus on dispute resolution, including commercial, investment, and sports arbitration, international litigation, international contracts, electronic commerce and online dispute resolution.

The Late Thomas W. Wälde, Professor & Jean Monnet Chair, CEPMLP, University of Dundee

Thomas Wälde is Professor of International Economic, Natural Resources and Energy Law and former (until 2002) Executive Director at the Centre for Energy, Petroleum and Mineral Law & Policy (CEPMLP), University of Dundee (Scotland, UK). In 1995, he was awarded the first "Jean-Monnet Chair on European Economic and Energy Law." Earlier, Professor Wälde served as the Principal UN Interregional Adviser on Natural Resources, Energy and Investment Law. In 1996, he published the authoritative book on the Energy Charter Treaty, and has widely published and edited books on international economic, investment, energy, natural resources, mining and environmental law. He advises multinational companies, governments and international organizations throughout the world in his field of expertise.

Christer Söderlund, Partner, Advokatfirman Vinge KB., Stockholm

Christer Söderlund has been a partner with Vinge KB since 1977 and a member of the Swedish Bar Association since 1976. He has extensive experience in international arbitration as Chairman and Sole Arbitrator in institutional arbitration under the auspices of the Arbitration Institute of the Stockholm Chamber of Commerce and the International Chamber of Commerce and ad hoc arbitration, primarily in Stockholm, Sweden. Mr. Söderlund also acts as legal counsel in international arbitration cases and domestic litigation in Sweden.

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Investment Arbitration and the Energy Charter Treaty

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CHAPTER 4

THE RELATIONSHIP BETWEEN
CONTRACTUAL CLAIMS AND CLAIMS
UNDER THE ECT AND OTHER INVESTMENT
PROTECTION TREATIES

Introduction - Treaty versus Contract Claims
Gabrielle Kaufmann-Kohler*

This chapter deals with the difficult distinction between treaty
and contract claims. Most treaty arbitrations involve an
investment which gave rise to a contract. Treaty arbitrations are
particularly complex precisely because of the co-existence of
treaty and contract dispute resolution methods at the
jurisdictional level, and of treaty and contract claims at the merits
stage.

Although its implementation and effects are still controversial,
the distinction as such is well accepted nowadays. In lieu of many
others, one may quote from the Vivendi annulment decision.

"A state may breach a treaty without breaching a contract, and vice
versa, and this is certainly true of these provisions of the BIT. […]
[W]hether there has been a breach of the BIT and whether there has
been a breach of contract are different questions. Each of these claims
will be determined by reference to its own proper or applicable law – in
the case of the BIT, by international law; in the case of the Concession
Contract, by the proper law of the contract […]"1

The distinction has many facets and raises many questions. The
first question is obviously whether one should make such a
distinction at all. At first sight, at least, it is contrary to judicial
economy or efficient administration of justice: causes a
duplication of proceedings, i.e. a waste of resources, and a risk of
contrary decisions and double recovery.

Depending on the meaning which is assigned to it, an umbrella
clause in the treaty may provide a tool to wipe out the unwanted
effects of the distinction. But is this really the intent underlying an
umbrella clause? Cases dealing with this issue have reached
divergent conclusions. Professor Wälde’s contribution will
address this highly debated topic very extensively.

Table of Contents:

Full Table of Contents from "Investment Arbitration and the Energy Charter Treaty" Foreword

Remarks by Judge Stephen Schwebel

Editor's Preface

List of Contributors

Chapter 1 -- Introduction to the Energy Charter Treaty (ECT)

Introduction
Dr. Hans Corell

Part 1 -- The Energy Charter Treaty: More Than a MIT
Graham Coop

Part 2 -- The Dispute Settlement Mechanisms of the Energy Charter Treaty
Laurent Gouiffès

Chapter 2 -- Investments and Investors Covered by the ECT and other Investment Protection Treaties

Introduction
Antonio R. Parra

Part 1 -- Investments and Investors Covered by the Energy Charter Treaty
Emmanuel Gaillard

Part 2 -- The Limits of Protection for Investments and Investors under the Energy Charter Treaty
Stephen Jagusch & Anthony Sinclair

Chapter 3 -- The Concept of Expropriation under the ECT and other Investment Protection Treaties

Introduction:
Sergei N. Lebedev

Part 1 -- Rapport: The Concept of Expropriation under the ECT and other Investment Protection Treaties
Christoph H. Schreuer

Part 2 -- Comments on the Rapport

I -- Indirect Expropriation and the Right of the Governments to Regulate Criteria to Articulate the Difference
Katia Yannaca-Small

II -- The Distinction Between Lawful and Unlawful Expropriation
Audley Sheppard

Chapter 4 -- The Relationship Between Contractual Claims and Claims under the ECT and other Investment Protection Treaties

Introduction: Treaty versus Contract Claims
Gabrielle Kaufmann-Kohler

Part 1 -- Contract Claims under the Energy Charter Treaty's Umbrella Clause: Original
Intentions versus Emerging Jurisprudence
Thomas W. Wälde

Part 2 -- Multiple Judicial Proceedings and the Energy Charter Treaty
Christer Söderlund

Chapter 5 -- State Responsibility under the ECT and other Investment Protection Treaties

Introduction: Applicable Law to State Responsibility under the Energy Charter Treaty and other Investment Protection Treaties
Karl-Heinz Böckstiegel

Part 1 -- State Responsibility and Investment Arbitration
Kaj Hobér

Part 2 -- State Responsibility under the Energy Charter Treaty and other Investment Protection Treaties
Anatoly S. Martynov

Chapter 6 -- Arbitration under the ECT and other Investment Protection Treaties

Introduction: Parallel Proceedings: The Issues and (Where Are?) the Solutions
Michael Polkinghorne

Part 1 -- Parallel Arbitration Tribunals and Awards
Bernardo M. Cremades

Part 2 -- The Nykomb Case in the Light of Recent ICSID Jurisprudence
Richard Happ

Appendix -- Awards Rendered under ECT

Appendix 1 -- Nykomb v. Latvia

1. Introduction

2. Jurisdiction

3. General background

4. The legal basis for the claims against
the Republic

5. Assessment of losses or damages

6. Allocation and allowability of costs

7. Arbitral award

Appendix 2 -- Petrobart v. Kyrgyzstan

I. The contract

II. Relevant facts

III. The Foreign Investment Law and proceedings regarding that law

IV. The Energy Charter Treaty

V. Proceedings

VI. Claims

VII. Grounds and arguments

VIII. Reasons

Appendix 3 -- Plama v. Bulgaria
(Decision on Jurisdiction)

I. Procedure

II. Background facts

III. The submissions of the parties on jurisdiction

IV. Examination of the parties’ submissions

V. The decision

Index

Appendix Topics on CD-ROM Include:

ECT and Related Instruments

SCC Rules

ICSID Rules

UNCITRAL Arbitration Rules