The Energy Charter Treaty at a critical juncture: of knowns, unknowns, and lasting significance

Abstract

Abstract This article envisions the future of international investment law and arbitration amidst the need to accelerate the shift towards renewable energy. Recognizing the risks of predicting the unknown, the article charts the delicate balance between forecasting a future legal framework and respecting past complexities. Focusing on the Energy Charter Treaty (ECT), the article analyses ‘known-knowns’ rooted in positive law and ‘known-unknowns’ in the ECT’s future. The article examines the ECT’s design and scope in the first part, showing its pivotal role in organizing the renewable energy market through fair and equitable treatment and expropriation provisions. Against this backdrop, the article explores potential continuation, modernization, or abandonment scenarios and argues for a nuanced and anticipatory approach to the Treaty’s evolving dynamics. It underscores the variety of pending cases, the potential resurgence of State contracts, and the shift to contract-based arbitration influenced by ECT decisions. Given the impasse over the ECT’s modernization and the paradoxical nature of the ongoing energy transition, the ECT will continue to shape international investment law and international energy governance for the foreseeable future.