Legitimate Expectations and Fair-and-Equitable-Treatment under the Energy Charter Treaty

A recent tide of ISDS cases in the renewable energy sector has generated a large number of arbitral awards that turn of the notion of legitimate expectations. The Fair and Equitable Treatment Standard (FET) and the notion of legitimate expectations has been highly undetermined in the past. This work contains a comprehensive analysis of the renewable energy awards and the interpretation of the notion of legitimate expectations therein. In particular, it is examined whether arbitral jurisprudence formed a cohesive body of caw-law. The author analyses which aspects with regard to commitment by the states, due diligence of the investors, and level of impact were considered a violation of the FET Standard by recent arbitral tribunals.

In Search of Limits of Regulatory Powers. Antin v. Spain (ICSID Case No. ARB/13/31)

This submission analyses the award rendered in one of the ‘Spanish saga’ cases by a tribunal constituted under the Energy Charter Treaty. This group of cases concern renewable energy disputes and relates to the limits of states’ sovereign powers to amend their regulatory frameworks. The analysis commences by a short presentation of the relevant factual background of the dispute. It then proceeds to each stage of the arbitral proceedings: jurisdiction, merits and remedies. The submission finishes with a number of conclusions drawn from the award, referring to legal issues that can potentially serve as lessons learned for the future.

THE INVESTMENT PROTECTION AT SEA UNDER THE INVESTMENT TREATIES: TACKLING THE PROBLEM OF TRANSNATIONAL INVESTMENTS

According to the provisions of investment agreements, one of the terms of investment at sea is the nexus between the investment and the maritime zones of the host state. Therefore, an investment is under treaty protection when it is under the geographical realm of states. Hence, the protection status beyond the state maritime boundaries is facing problems. Today, lack of clear rules in this filed can create challenges for the future investments as well. Purpose: to show how investment protection of international investment agreements beyond the states jurisdiction at sea can be created. Methods: general scientific methods of theoretical knowledge, as well as general logical methods and research techniques are used in analyzing existing investment agreements and ICSID awards. Results: the paper proposes a solution for extending the investment protection of treaties to the high sea that it is the cross-border nature of some investments that can find in the Energy Charter Treaty (1994) and the ICSID decision on Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka. Ultimately, the article shows what is the cross- border nature and how it resolves the problem of investment at high sea.

Recent Trends in Investment Arbitration Concerning Legitimate Expectations

The article addresses how the obligation not to frustrate legitimate expectations has been interpreted and applied in recent investment disputes arising out of amendments in domestic regimes in the renewable energies sector. The analysis will address cases against Czechia, Italy and Spain, the Countries currently facing the majority of disputes for alleged breaches of the Energy Charter Treaty. Jurisdictional issues related to the case law at hand, such as those stemming from intra-EU arbitration, will not be addressed. The contribution is divided in three parts, next to the introduction. First, the notion of legitimate expectations will be analysed. Second, the Czech, Italian and Spanish cases will be addressed, briefly sketching the respective domestic legal frameworks. As a conclusion, it will be suggested that tribunals have considered the fact that a State is exercising its regulatory power, and a potential lack of investors’ due diligence, in diminishing the quantum of compensation, and that such case law adds to the establishment of general “interpretative elements” of FET.

Damages and Reparation in Energy Related Investment Treaty Arbitrations

International investment tribunals are frequently required to interpret and apply rules of Customary International Law (CIL) in investor-State disputes. This article examines how investor-State tribunals, in particular those constituted on the basis of the Energy Charter Treaty (ECT), have interpreted the CIL ‘full reparation’ standard regarding damages and reparation. By reference to ECT jurisprudence it is established that tribunals often utilize teleological interpretive tools to give content to this norm. Furthermore, some critical comments are made concerning the manner in which ECT tribunals subsequently apply the ‘full reparation’ standard. It is argued that the combination of the commonly adopted approaches to interpretation and application may explain why investors are occasionally capable of obtaining significant amounts of compensation in these public law disputes.