The Future of Arbitration under the Energy Charter Treaty

The briefing argues that the Komstroy ruling effectively bars investor-State dispute settlement (ISDS) between EU investors and Member States under the ECT, creating significant legal obstacles to the enforcement of awards and potentially allowing EU State aid law to block compensation payments.

• The CJEU's Komstroy ruling establishes that the ISDS provisions of the Energy Charter Treaty (ECT) are not applicable to disputes between an EU Member State and an investor from another Member State, as such mechanisms undermine the autonomy of EU law.
• Following the Komstroy and PL Holdings decisions, EU Member States are legally obligated to systematically challenge the validity of intra-EU arbitration awards and must refuse to enforce them in national courts.
• Intra-EU investment awards face severe enforcement barriers within the EU, likely forcing investors to seek assets in non-EU jurisdictions, where the European Commission may still intervene as amicus curiae to oppose enforcement.
• EU State aid rules may be used to prevent the payment of arbitration awards, as the European Commission considers such payments to be economic advantages that could distort competition in the internal market.
• The briefing identifies specific risks for RWE and Uniper in their arbitration cases against the Netherlands regarding coal phase-outs, noting that their claims may be declared inadmissible by German courts and any awarded compensation could be deemed incompatible State aid.

APA

Center for International Environmental Law (2021). The Future of Arbitration under the Energy Charter Treaty. https://www.ciel.org/wp-content/uploads/2021/12/ciel-ce-legal-briefing-future-of-intra-eu-ect-arbitration-131221.pdf

Chicago

Center for International Environmental Law. The Future of Arbitration under the Energy Charter Treaty. 2021. https://www.ciel.org/wp-content/uploads/2021/12/ciel-ce-legal-briefing-future-of-intra-eu-ect-arbitration-131221.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=The Future of Arbitration under the Energy Charter Treaty |date=December 2021 |url=https://www.ciel.org/wp-content/uploads/2021/12/ciel-ce-legal-briefing-future-of-intra-eu-ect-arbitration-131221.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw2021future, author = {{Center for International Environmental Law}}, title = {{The Future of Arbitration under the Energy Charter Treaty}}, institution = {Center for International Environmental Law}, year = {2021}, month = dec, url = {https://www.ciel.org/wp-content/uploads/2021/12/ciel-ce-legal-briefing-future-of-intra-eu-ect-arbitration-131221.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }