This case-note
analyses two recent decisions rendered by ICSID tribunals under the Energy
Charter Treaty (ECT), whereby the majorities upheld Spain’s intra-EU law
objection by adopting a novel approach and reasoning to reading into the ECT,
an implicit disconnection clause, such that investor-state disputes between EU
nationals and EU Member States cannot be arbitrated under the ECT. Moreover,
the same chair was selected for both tribunals, although he previously had
never acted as arbitrator in any intra-EU ECT-based arbitrations prior to these
cases. In short, the tribunals’ majorities concluded that the definition of a
Regional Economic Integration organization (‘REIO’), such as the European Union
under Article 1(3) of the ECT, was a key contextual element for the
interpretation of the dispute resolution provision under Article 26 of the ECT.
Under Article 1(3), a REIO may take binding decisions on matters over which it
has been transferred competence. The tribunals found this provision to be of
significance and held that they lacked jurisdiction as the EU had been
transferred competence by the EU Member States over the matters in issue, i.e.,
energy, the internal market and state aid. The claimants’ appointees disagreed
on major points with the respective majorities. This case-note critically
explores the possible implications of these decisions under public
international law and intra-EU investor-state arbitration.