Ask a question from expert
Provisional Application of ECT in Yukos Case
24 Pages9766 Words431 Views
Added on 2020-01-07
About This Document
A critical analysis of the provisional application of the ECT in the YUKOS case TABLE OF CONTENTS ABSTRACT 1 CHAPTER 1: INTRODUCTION1 Concept of Provisional Application of Treaty 3 Overview of Yukos Case 4 CHAPTER 2: PROVISIONAL APPLICATION5 Jurisdictional Ascertainment by Tribunal 5 Provisional Application of ECT by Russia 9 Influence of ascertainment of provisional application on results of case 10 CHAPTER 3: IMPACT OF THE FINDINGS OF YUKOS CASE 13 Rationale of the
Provisional Application of ECT in Yukos Case
Added on 2020-01-07
BookmarkShareRelated Documents
A critical analysis of theprovisional application of theECT in the YUKOS case
TABLE OF CONTENTSABSTRACT.....................................................................................................................................1CHAPTER 1: INTRODUCTION....................................................................................................1Concept of Provisional Application of Treaty........................................................................3Overview of Yukos Case........................................................................................................4CHAPTER 2: PROVISIONAL APPLICATION............................................................................5Jurisdictional Ascertainment by Tribunal..............................................................................5Provisional Application of ECT by Russia............................................................................9Influence of ascertainment of provisional application on results of case.............................10CHAPTER 3: IMPACT OF THE FINDINGS OF YUKOS CASE..............................................13Rationale of the topic............................................................................................................13Consequences of Yukos case in terms of decision by Dutch court......................................15CHAPTER 4: CONCLUSION......................................................................................................17REFERENCES..............................................................................................................................19
ABSTRACTThe Energy Charter Treaty (ECT) is a multilateral instrument is helpful to promote theinvestment in the sector of energy so as to promote the products and services of the related field.The Russia is considered as very rich in term of oil and gas and providing easy access for itsmembers countries effective for operating their business in the right manner. However, the treatycontain specific aspects related to operation of investment arbitration and their successfulimplementation in order to accomplish the specific objectives. It aids to secure the right ofinvestors and determine the well being of all associated patties in the right manner. Furthermore,ECT was signed by the Russia Federation but not ratified which does not give rise for investorsto ask for international arbitration. For this purpose, national law must be considered throughwhich it becomes easy to take the valid and consistent decision as per the Russian Law.Furthermore, ECT was not considered by the Russia due to its negative impact on progress of theoil and gas sector of the nation. Owing to this, merely signatory aspects was not considered asper the Dutch law in providing the protection was major shareholders invested money in theYukos.CHAPTER 1: INTRODUCTIONThe Energy Charter Treaty (ECT) is a multilateral instrument which has been draftedwith the intention to promote international cooperation within the energy sector. The Treaty wasverified in December 1994 and finally came into force in the year 1998. On 16th April, 1998 theTreat came into legal force and constituted to be the legal basis of formulation of an openinternational market, with a primary focus on the energy market. It is important to note that theTreaty along with the attached documents formulates to be the legal basis of operating an energymarket. The Charter process is inclusive of the jurisdictions of enlarged European Union,Russian Federation, the Caucasus and Central Asia, in addition to Mongolia, Australia andJapan.1 Till date it has been acceded by about 52 states. Apart from these jurisdictions the Treatyis open for accession by other nations as well, which are willing to observe all the attachedprinciples. In respect to the same it can be stated that some other countries such as China, South1Secretariat, Energy Charter. 'Energy Charter: About the Charter.'accessed May7 (2014).1
Korea, Iran and certain states of ASEAN have reflected a close interest in this process, therebyfurther opening up the prospects of extending the geographical scope.2However, it has been ascertained that one of the issues which is being faced is in respectto assurance of full implementation of the commitments required to be followed by theconstituent members. Thus, the extent of implementation of the commitments is one of theprimary challenges which is being faced within this regime. The Treaty's focus entails therequirement of multilateral cooperation in connection to transit, investments, environmentalprotection concerns, trade and energy efficiency. In addition to promote these concerns of theenergy market, the Charter process intends to translate the manner in which energy marketoperates to evolve it into a non-discriminatory and open market. In pursuance to the same,Charter has been designed for promotion of energy security with the assistance of developmentof more open as well as competitive energy markets. In addition, it is also required by theCharter that this process of promotion and development shall be undertaken on the basis of theconcept of sustainable development as well as sovereignty over all the energy resources3. The wide focus of ECT is restricted within four areas and the provisions entailed withinthe treaty purports to protect the foreign investments which are received in this market. Theprotection measures which are stated within this Treaty for securing the interests of foreigninvestors are through extending National Treatment, developing a shield against non-commercialrisks and lastly, most favoured treatment (MFN).4 Further, it intends to establish non-discriminatory conditions for ensuring free trade of energy materials, related equipments andproducts, in accordance to the applicable WTO rules. Moreover, it also provides assurance inrespect to reliability of the energy transportations means such as pipelines or grids, whenundertaking cross border transmission.5 Moreover, it also provides for an effective dispute2Laidlaw, Peter C. 'Provisional Application of the Energy Charter as Seen in the Yukos Dispute.' SantaClara L. Rev.52 (2012): 655.3Provisional Application of the Energy Charter As Seen in the Yukos Dispute (2012)<http://digitalcommons.law.scu.edu/cgi/viewcontent.cgi article=1237&context=lawreview> accessed on 22ndApril 20174Charter, Energy. "About the Charter."Energy Charter website, http://www. encharter. org/index.php(2011).5Konoplyanik, Andrei, and Thomas Walde. 'Energy Charter Treaty and its role in international energy.'J.Energy Nat. Resources L.24 (2006): 523.2
resolution mechanism for participating states or investors and host states. Lastly, it requires themembers states to promote energy efficiency and undertake every possible attempt for reducingthe environmental impact of the processes of energy production as well as usage. However, Russia withdrawals from the ECT in order to protect its own right anddetermining the growth in term of oil and gas sector. This aids to meet the expectations of allrelated stakeholders or protecting them effectively for the investment purpose in the country.Also, country just develop own regulation for securing the right of involved parties. However,the country found that ECT is biased towards the consumers and members stated6. However, it isalready rich in context of oil and gas through which it becomes easy to protect the right ofinvestors and stop the free transit of oil and gas from central Asia to Europe. Currently thecountry is getting the gas from Uzbekistan, Turkmenistan and Kazakhstan before making thedecision related to sale to Europe as Russian gas. Thus, it does not consider highly beneficial toratify the ECT7.Concept of Provisional Application of TreatyArticle 45 of ECT specifically provides for provisional application of the Treaty within ajurisdiction. In accordance to Article 45 (1) the signatories were empowered to provisionallyapply the Treaty till the time it comes into force within their respective jurisdiction.8 Moreover, ithas been subjected to a proviso, in accordance to which the provisional application shall becompletely in compliance with its constitution, laws and regulations. It is important to note thatprovisional application under Article 45 of ECT was possible only during the initial years whenit was open for signature i.e. during the time period of 17th December 1994 to 16th June 1995.During those years when the treaty was open for signing, each of the signatories were required tofile a declaration to the effect of in ability to accept provisional application under Article 45 ofECT.9 The Russian Federation and Belarus were the only two nations, who did not file such a6Kryvoi, Y.,The Yukos Arbitration Decision in a Nutshell (2015) <http://www.cisarbitration.com/2015/06/19/the-yukos-arbitration-decision-in-a-nutshell/> accessed on 22nd April 20177Russia's withdrawal from the Energy Charter Treaty(2017)<http://www.nortonrosefulbright.com/knowledge/publications/22691/russias-withdrawal-from-the-energy-charter-treaty> accessed on 22nd April 2017.8The Energy Charter Treaty (September 2004) <http://www.ena.lt/pdfai/Treaty.pdf> accessed on 11th April20179Gardiner, Richard K.Treaty interpretation. (Oxford University Press, USA, 2015).3
End of preview
Want to access all the pages? Upload your documents or become a member.