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Laurent Gouiffès

Laurent Gouiffès . Article 27 of the Energy Charter Treaty: the role of State–to–State dispute resolution Ad hoc arbitration under ECT Article 27 and potential relevance to investment disputes. Introduction .

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Laurent Gouiffès

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  1. Laurent Gouiffès Article 27 of the Energy Charter Treaty: the role of State–to–State dispute resolution Ad hoc arbitration under ECT Article 27 and potential relevance to investment disputes

  2. Introduction • Article 27 of the Energy Charter Treaty provides for a State-to-State dispute resolution mechanism • It is the standard dispute resolution clause for the whole ECT • The surge in Investor-to-State arbitrations • The role of article 27 • The role of State-to-State dispute resolution

  3. Outline • State-to-State dispute resolution mechanism under article 27 of the ECT • The use of State-to-State dispute resolution mechanisms: past experience and parallels with other treaties • Relevance of article 27 of the ECT in investment disputes

  4. 1. State-to-State dispute resolution mechanism under article 27 of the ECT 1.1 Definition and Scope of article 27 of the ECT 1.2 The mechanism for settling State-to-State disputes under article 27 of the ECT 1.3 Application of article 27 and potential issues within the European Union: a parallel with the Mox Plant Case

  5. 1.1 Definition and Scope of article 27 of the ECT • Applicable to all breaches of the ECT • Contrast with article 26: breaches under part III only • Exceptions • Competition issues (art. 27(2) and art. 6) • Environmental issues (art. 27(2) and art. 19) • Some investment disputes (last sentence of article 10(1)) for states listed in Annex IA • Matters under article 29 and article 5, subject to express consent of the parties (art. 28)

  6. 1.2 The mechanism for settling State-to-State disputes under article 27 of the ECT • Diplomatic channels • Ad hoc tribunal • Applicable law • Availability of awards to the public

  7. 1.3 Application of article 27 and potential issue within the European Union: a parallel with the Mox Plant Case • Only one known dispute under article 27 which remained at diplomatic stage • Potential ECT/ECJ jurisdiction conflict: a parallel with the Mox Plantcase

  8. 2. The use of State-to-State dispute resolution mechanisms: past experience and parallel with other treaties 2.1 Past experience 2.2 Parallel with other MITs 2.3. Parallel with some BITs

  9. 2.1 Past experience • Before the 1960’s • “Diplomatic protection” granted by states to their investors • Great Britain v. Costa Rica (Tinoco Case, ICJ, 18 October 1923) • Italy v.Venezuela (Martini Case, ICJ, 3 May 1930) • After the 1960’s • Development of BITs with Investor-to-State dispute resolution mechanisms • Decrease of use of State-to-State dispute resolution mechanisms in investment disputes

  10. 2.2 Parallel with other MITs • NAFTA • Two dispute resolution mechanisms: Investor-to-State mechanism (chapter 11), State-to-State mechanism (chapter 20) • Use of those mechanisms • ASEAN • Two dispute resolution mechanisms: an Investor-to-State mechanism (article 10 of the 1987 agreement) and a belatedly introduced State-to-State dispute resolution mechanism (article IX of the 1987 agreement as modified in 1996) • Project for a multilateral agreement on investment • Dispute settlement mechanism project very similar to article 27 mechanism

  11. 2.3. Parallel with some BITs • The U.S. model BIT • Article 37 on State-to-State dispute resolution • Originality: State-to-State intervention within Investor-to-State arbitration (article 28.2) • The UK-France BIT on the Channel Tunnel • Same dispute resolution mechanism for all type of conflicts (article 19 of the Treaty of Canterbury) • Supremacy of the States over the Investors • The AUFSTA • All dispute settlements at a State-to-State level (article 21) • No Investor-to-State provision

  12. 3. Relevance of article 27 of the ECT in investment disputes? 3.1 Articles 27 and 26 mutually exclusive regarding investment disputes ? 3.2 From the investor’s point of view 3.3 From the state’s point of view

  13. 3.1 Articles 27 and 26 mutually exclusive regarding investment disputes? • Article 26 especially tailored for investments (part III) • Article 27 is essentially meant to be used in all other disputes regarding ECT

  14. 3.2 From the investor’s point of view • When political pressure is more efficient • Enforcement of the award • State-to-State dispute resolution mechanisms as safeguard of the awards rendered in Investor-to-State Disputes

  15. 3.3 From the state’s point of view • The Saluka investments B.V. v. the Czech Republic case • A state can start an arbitration against an Investor only on a contractual basis • Relevance of State-to-State arbitration

  16. These are presentation slides only. The information within these slides does not constitute definitive advice and should not be used as the basis for giving definitive advice without checking the primary sources. Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is used to refer to a member of Allen & Overy LLP or an employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLP's affiliated undertakings.

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