The Energy Charter Treaty and ‘Compulsory’ International State/Investor Arbitration

Abstract

The Energy Charter Treaty came into force on 16 April 1998. The Treaty contains far-reaching provisions on trade and investment liberalisation within the energy sectors of 49 signatory states. The Treaty arguably offers a basis for multilateral agreement on micro-economic reform of the energy sectors. Some of the most significant initiatives contained in the treaty are the provisions for resolution of disputes. This article examines in detail the provisions dealing with arbitration of disputes between investors and states. These mechanisms build on models developed in other recent multilateral investment treaties. The limitations and potential offered by these provisions are discussed and some conclusions drawn.