International Arbitration and Investor-State Disputes

This assignment delves into the complexities of international arbitration through a case study analysis of a Supreme Court decision regarding an investment dispute. Students are tasked with examining the legal arguments presented, the application of relevant principles, and the overall implications of the ruling for international trade and investor-state relations.

Investment Arbitration and the Energy
Charter Treaty

TABLE OF CONTENTS
1. Introduction..................................................................................................................................4
2 OVERVIEW OF THE ENERGY CHARTER TREATY.............................................................5
4 SETTLEMENT OF DISPUTES BETWEEN CONTRACTING PARTY AND INVESTOR...13
5 PROVISIONAL APPLICATION OF ECT................................................................................16
6 AWARD RENDERED...............................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

ABSTRACT
The formation of investment arbitration and Energy Charter Treaty is the effective for
state as well as investors due to benefit for the both parties. It promotes the investment in the
sector of energy and ensure development of the same in an effectual manner. The current
investigation is based on assessing the benefit from the investment arbitration and its direct
impact on states attracting the foreign investors towards the specific sector. For this purpose,
secondary data are collected on the treaty in context of energy sector which in turn its
effectiveness can be determined that how investors get their dispute resolved on right time. In
addition to this, investment arbitration is helpful for the investors to protect their right and
provide them equal opportunities to determine the activities related investment and associated
risk with the same. It has been found that, investment arbitration is contributing towards the
benefits of the investors through appropriate return for investors and catering their requirement
in an effectual manner.

1. INTRODUCTION
An investment is considered as the most effective aspect for the purpose of growth and
development of a particular sector. However, issues in the procedures of investment affect the
performance of the sector to a great extent. Present report is based on Energy Charter Treaty
(ECT) and investment arbitration which promote the secured investment between foreign
investors and host state. In this context in-depth analysis has been done by covering the all
related aspects of ECT and assessing its link between investment arbitration. Moreover, the study
is completed with the help of inclusion of suitable articles related to ECT1.
Importance of the topic
The energy sector is considered as the most prominent aspect for the world due to its
significant contribution in ensuring the development and growth of the businesses. Investment is
considered as the most significant aspect to operate organization running in the energy sector in
order to increase the flow of money and contribute towards economic growth. However,
investors face several kind of issue in context of investment protection regime of the ECT and
arbitration mechanisms of the same2. However, several cases of investment arbitration are to be
settled effectively as many of the cases are still pending and affecting the procedure of
investment to a great extent. Owing to this, it is important to shed light on investment related
cases and resolve the dispute related to the same on right time3. However, ICSID arbitration
tribunals introduced the final aware on the merits so as to resolve the dispute. At this juncture,
investment protection provision related to decision was passed in context of ICT but still limited
number of cases are resolved and issues are being with regard to issues of generate interest for
the application of the ECT.
Definition of key terms
1 Caron, D.D., Schill, S.W., Smutny, A.C. and Triantafilou, E.E., Practising virtue: inside
international arbitration. Oxford University Press (2015)
2 (The EU and investment arbitration under the Energy Charter Treaty, 2017)
<http://www.law.qmul.ac.uk/events/items/168149.html> Accessed on 7th April 2017
3 Matsushita, M. and Schoenbaum, T.J., Emerging Issues in Sustainable Development:
International Trade Law and Policy Relating to Natural Resources, (2016) Energy, and the
Environment. Springer

The definition of the most important terms in included in the essay are presented as
follows-
Energy Charter Treaty
The Energy Charter Treaty (ECT) is the multilateral instrument used for the international
communication in order to promote the and cooperate the energy sector. It is helpful for the
operation of the business without any kind of non-discriminatory energy market. The North
American Free Trade Agreement (NAFTA) is also connected with its for the promotion and
protection of investment.
2 OVERVIEW OF THE ENERGY CHARTER TREATY
Background
The development of energy corporation between Western Europe and Eastern during the
1990s was the significant task. This is because some of the countries like Russia and its
neighboring countries were quite well in the same sector. However, the potential issues was
related to need of investment so as to reconstruct their economies under West European countries
so as ensure that sources of energy are diversified through which dependence on another
countries will be reduced4. Owing to this, requirement of well settled foundation was felt for the
specific energy corporation and accordingly phase of initiation of Energy Charter began. In this
context, first of all European Energy Charter (EEC) was signed and adopted for the Energy
Charter. This step or phase converted into the ECT along with setting of the protocols5.
Further, in December of 1994 Energy Efficiency and connected environmental aspects
context were signed. This would be effective for the purpose of integrating the 51 states and
European union whereby it becomes easy to integrate all related activities. At the same time, 45
states and European union too signed the treaty. This in turn energy sector is being promoted
with the joint cooperation of varied countries. The biding force is associated with the ECT so as
to limit its scope towards the mentioned sector. The main reason behind promoting this particular
treaty is to provide the mutual benefits for the parties or countries ans support them to make huge
4 Dolzer, R. and Schreuer, C., Principles of international investment law (Oxford
University Press, 2012).
5 Dolzer, R. and Schreuer, C., Principles of international investment law (Oxford
University Press, 2012).

investment on different activities. This would be effective for the cooperation and development
of the nation. For this purpose, Article 2 consists of clear benefits in term of long term
cooperation of the energy sector in accordance with profit for the associated parties. However,
objectives and principles are focused effectively so as to ensure the ethical conduct of the
business activities and accordingly ensure the successful transaction regarding the investment
between different parties. In this manner, inter-governmental cooperation in the sector of energy
is dealt through the formation of multilateral instrument. This proves to be effective for
contracting parties to promote the investigation and determine the long term growth of the sector
in an effectual manner. Apart from this, several provisions are included in the Energy Charter
Treaty such as protection of investment and other related provision on trade. Along with that,
energy efficiency and transit on the same as well as dispute resolution. In addition to this,
environmental protection is also included under the treaty whereby it becomes easy to handle the
all related task support or issues which are being faced by the investors. Therefore, all related
aspects are considered under the Energy Charter Treaty whereby objectives regarding the higher
rate of return and protection of the investment. Though, it increases several issues in order to
manage the work and completing the requirement of the all related parties so as to cater the
requirement of the business effectively. Not only this but the growth of energy sector is also
determined with the effective implementation of the treaty.
Investment arbitration
Investment arbitration is the procedure applied to resolve the conflicts or dispute among
host states and foreign investors. It is helpful for foreign investors to bypass national
jurisdictions so as to resolve the dispute as per the different protections afforded under
international treaties. It is important for foreign investors to take the consent of host state for the
initiation of investment arbitration6. However, three different aspects such as International
investment agreements including multilateral agreements, Free Trade Agreement and Bilateral
Investment Treaties are involved to give the consent by host states. There are several contracting
parties who do not allow investors to resubmit the same dispute to international arbitration at a
later stage under article 26 such as Australia, Croatia, Cyprus and Japan as well as Poland and
6 De Luca, A., Non-Pecuniary Remedies Under the Energy Charter Treaty. (2015)
Transnational Dispute Management (TDM). 12(3).

Portugal. Along with that, other countries such as Spain, Sweden, Italy and Greece etc are also
included7.
Objectives of the current study
 To understand the link between investment arbitration and ECT To analyze the role of ECT
Main body
Being multilateral treaty with biding force and extent of its scope to the energy sector
investment are promoted to a great extent. It helps to attract number of investors and offer them
appropriate kind of services so as to get the higher rate of return. However, it is effective in
promoting the long-term support in the field of energy in accordance with mutual benefits and
compplementarities. However, principles and objectives of the charter are focused to a great
extent in order to accomplish all related activities effectively. The major role of ECT covers the
transit of energy, provision on trade and investment protection as well as energy efficiency.
Along with that dispute resolution and environmental protection is supported with the help of
ECT only8.
3 INVESTMENT PROTECTION
It is the third part of the ECT under which investment protection are made so as to
accomplish the related activities ans support other parties effectively. The investment promotion
and protection is considered as the cornerstone of the treaty as it related to foreign investments
only. It would be effective to reduce the risk related to non-commercial sector and create a level
play field with regard to investment9. The basis purpose behind the same is to reduce the risk
related to non-commercial aspects which is associated with the investments. Furthermore,
equality condition for the foreign investors are established in the sector of energy. The formation
of this treaty proposed two two aspects such as pre-investment and post investment are
7 odogawa, N., Energy Charter Treaty: Standing Out Beside the WTO. In Emerging Issues
in Sustainable Development. Springer Japan (2016)
8 Dugan, C., Wallace, D., Rubins, N. and Sabahi, B., Investor-state arbitration. (Oxford
University Press 2011)
9 Spears, S.A., The quest for policy space in a new generation of international investment
agreements (2010) Journal of International Economic Law, 13(4), pp.1037-1075.

considered in order to provide the protection for the investors and support them to make the
investment in other related sector.
For this purpose, pre-investmenrt phase deals with the soft regime in context of best endeavor
obligations whereas the poster investment phase reflects that hard regime of the ECT to bind
with obligation contracting10. For this purpose, parties such as North American Free Trade
Agreement and bilateral investment treaties are considered. It is showing that investment related
procedures are mad possible with the help of ECT's provision only. It proves to be effective for
supporting the related parties and resolving several issues which are being faced during the
investment11.
Furthermore, frequently found investments in BITs are treated on the basis of certain
principles. The first one is related to fair and equitable treatment under which contracting parties
need to ensure that favorable investment climate is maintained. It consists of certain arbitral
practices such as due process, good faith and protection of legitimate expectations as well as
proportionality etc. However, good government conduct is needed for the purpose of factual
assessment that standard applied effectively12.
On the other hand, most constant security and protection are also considered under the
head of investment protection, In this context investors should be protected in term of normal
ability to function in the level of playing field. This duty is performed by the state for protecting
the right of investors and offering the security so as to promote them for investment. Here,
discrimination is also considered on the priority which is explained in the Article 10(1) that
unreasonable discrimination will not take place in term of maintenance, use and management or
disposal of investment13. This would be effective to ensure betterment of investors and they will
10 Hober, K., Investment Arbitration and the Energy Charter Treaty (2010) Journal of
International Dispute Settlement, 1(1) pp.153–190
11 Dolzer, R. and Schreuer, C., Principles of international investment law. (Oxford
University Press 2012)
12 Rovine, A.W., Contemporary issues in international arbitration and mediation. Brill
(2013)
13 Kleinheisterkamp, J., Investment protection and EU law: the intra-and extra-EU
dimension of the Energy Charter Treaty (2012) Journal of International Economic Law,

be provided equal right and opportunities for the investment14. Here, the economic activities
related to energy sector was kept on the center under which varied aspects regarding the
transport, transmission and refining. Along with that, storage, land transport as well as
transmission related activities are also covered under which investment decision can be taken
effectively. However, products or material included in the Annex NI is not included in the
economic activities with regard to energy sector15. The right of arbitration in the article 26 is
depicted through which scope of protection under the PART 3 of mentioned treaty.
The investment protection is done with the help of setting minimum standards under
article 10 (1). This shows that parties associated with the contract are provided the equitable and
stable as well as transparent conditions for the investors through which better investment
decision can be made. At this juncture, condition can be related to fair and equitable treatment,
proper security along with maintenance etc16. All these specified condition must be considered or
followed by the contracting parties through which they can effectively accomplish the purpose of
contract. Not only this but the healthy investment decision are also made among the people or
individual17. The first standard is of treatment towards the investors which actually must be
equitable and fair. At this juncture, contracting parties are required to ensure that favorable
investment climate is maintain so as to promote the investment which is protected through ECT.
For this purpose, international law is considered which is effectively applied in case of NAFTA,
BIT arbitration. This contribute towards protecting the investment in a most suitable manner. Not
p.jgs004.
14 Wilske, S. and Edworthy, C., The Future of Intra-European Union BITs: A Recent
Development in International Investment Treaty Arbitration against Romania and Its Potential
Collateral Damage. (2016) Journal of International Arbitration 33(4), pp.331-351.
15 Alvarez, J.E., The evolving BIT (2010) Transnational Dispute Management (TDM). 7(1).
16 Simmons, B.A., Bargaining over BITs, arbitrating awards: The regime for protection and
promotion of international investment (2014) World Politics, 66(01), pp.12-46.
17 Alvarez, J.E. and Brink, T., Revisiting the Necessity Defense: Continental Casualty v.
Argentina (2012) Transnational Dispute Management (TDM), 9(3).

only but the specific principles are developed for the purpose of arbitrage practice such as due
process, proportionality as well as protection of legitimate expectations18.
Although, description of the same is not mentioned under the general terms. Owing to
this, description is fact specific so that accordingly it can be applied effectively in order to
conduct the in-depth factual assessment This proves to be effective to maintain the appropriate
standard related to government conduct19. For this purpose, factual assessment contributes
towards implementation of good governance and complete the related work accordingly.
Though, flexible standard are applied in order to handle the individual case. In case of not
establishing the flexible standard, it might be possible that decision is taken in accordance with
arbitration individual perception. Similarly, host states is responsible for protecting the legitimate
expectations of capitalist in term of practicable business along with focus on legal environment.
This proves to be effective to carry out the operational activities effectively cater the requirement
of foreign as well as local investors in an effectual manner. Moreover, principles related to due
process, prohibition related transparency requirement etc are considered. This aids to ensure well
being of contracting parties and make them able to form the appropriate agreement with
investors from member countries20.
For this purpose, host country is responsible to treat the investors in a right manner and
secure their invested amount so as to generate adequate rate of return without any kind of risk.
Moreover, varied kind of obligations are considered by the business so as to treat the investors in
a right manner and supporting them to accomplish long as well as short term objectives
regarding the investment of money21. In addition to this, obligation regarding refraining on
discriminatory measures is also fulfilled by the host states. This is helpful for country as well as
18 Kapeliuk, D., The repeat appointment factor: exploring decision patterns of elite
investment arbitrators (2010) Cornell L. Rev., 96, p.47.
19 Shan, W. and Zhang, S., The Treaty of Lisbon: half way toward a common investment
policy ( 2010) European Journal of International Law, 21(4), pp.1049-1073.
20 Spears, S.A., The quest for policy space in a new generation of international investment
agreements (2010) Journal of International Economic Law, 13(4), pp.1037-1075.
21 Yackee, J.W., Do Bilateral Investment Treaties Promote Foreign Direct Investment-
Some Hints from Alternative Evidence. (2010) Va. J. Int'l L., 51, p.397.

other related investors who are investing their huge amount of money to get the appropriate
return and determine the growth of the energy sector22.
It can be understood with the help of example of case related to ECT “Plama Consortium
Ltd v Republic of Bulgaria”. Under this, issue was faced due to change in the environmental law
of Bulgaria wherein principle related to fair and equitable treatment. It is because changes were
not favourable and impact of the same was seen on the parties related to associated with the
contract. However, it was stated by the tribunal that equitable and fair treatment standard can be
complied to certain extent23. This would be effective to consider the legitimate expectations
wherein investment backed expectation related to certain conditions are shown effectively. At
this juncture tribunal stated that amendments in the environmental law was not unfair and did not
breach the fair and equipment treatment standard. However, claimant was exempted firm the
liability caused in the past environmental damages24.
Another aspect associated with investment protection is of contract protection and
security. This show that investment must be backed with proper security and constant protection.
It would be effectively to follow the standard mentioned in the ECT25. However, it is the
responsibility of the state the provide protection for the business of investors in context of
normal ability so as to effectively operate the business in the field of oil and gas. It shows that
investment arbitration and ECT has strong connection through which proper protection is
provided for the investors by securing their money on the basis of standard regulations. Apart
from this, Article 10 (1) discrimination's third sentence of the second part is showing that
unreasonable measures related to use, maintenance and management as well as disposal of
22 García-Bolívar, O.E., Permanent Investment Tribunals: The Momentum is Building Up
(2014) Transnational Dispute Management (TDM), 11(1).
23 Van Harten, G., Arbitrator behaviour in asymmetrical adjudication: an empirical study of
investment treaty arbitration (2012) Osgoode Hall LJ, 50, p.211.
24 Schill, S.W., W (h) ither fragmentation? On the Literature and Sociology of International
Investment Law (2011) European Journal of International Law, 22(3), pp.875-908.
25 Allee, T. and Peinhardt, C., Delegating differences: Bilateral investment treaties and
bargaining over dispute resolution provisions (2010) International Studies Quarterly 54(1), pp.1-
26.

investment are not affected through. Owing to this, framed standards are taken into account
through which all parties get appropriate services effectively. Owing to this, ECT do not
discriminate and not entitled to breach the standard set for the protection of investors. For this
purpose, foreign investors can be discriminated in term of offering greater tariffs and
inappropriateness to show the the evidence. This in turn all related activities of investment can be
resolved effectively for meeting the expectations of the contracting parties and support them to
seek for the new investment plan etc26.
In addition to this, umbrella clause reflects that Pacta sunt servanda in which each party
make an obligation to inspect that any obligation with which they are entered must not be
violated. As parties will fulfill the same to accomplish the long as well as short term objectives.
Such terms tend to affect the rights of contracting parties so as to protect their right effectively
and reduce the chances of conflicts among them. The umbrella clause covers that whether the
organization covers under the sector follow the commercial conduct or they are state owned
only27. For this purpose, it is important to shed light on their conduct and relevance to the
government authority. In this manner, investors can take decision in their respective areas.
However, some of the clauses are following the clauses in accordance with the BITs in order to
work upon the commercial dispute and ensure the well being of all related parties28.
However, the major task is about the decide that which is the commercial and which one
is the governmental aspects. It proves to be effective to take the decision effectively and
determine the higher level of satisfaction among the related contracting parties. On a critical
note, disputes covered under the Articles 27(2), 26(3)(c) of the ECT is considered the be
excluded in term of dispute of the umbrella, clause. This might make it critical to resolve the
26 Allee, T. and Peinhardt, C., Delegating differences: Bilateral investment treaties and
bargaining over dispute resolution provisions (2010) International Studies Quarterly 54(1), pp.1-
26.
27 Bernasconi-Osterwalder, N. and Hoffmann, R.T., The German nuclear phase-out put to
the test in international investment arbitration? Background to the new dispute Vattenfall v.
Germany (II). (2012) International Institute for Sustainable Development, pp.2-4.
28 Schill, S.W., Enhancing International Investment Law's Legitimacy: Conceptual and
Methodological Foundations of a New Public Law Approach (2011) Va. J. Int'l L., 52, p.57.

respective dispute and accordingly rate of return of the investors might get affected. Moreover,
most favoured nation treatment tends to focus on inclusion of standards and rights related to
treaties. It shed light on understanding contracting parties related to the domestic law and its
direct impact on the investment agreement and authorities of the same29.
4 SETTLEMENT OF DISPUTES BETWEEN CONTRACTING PARTY
AND INVESTOR
Dispute settlement is another potential aspect covers in the ECT so as to promotion of
more arrival of money in the sector of energy. The dispute with take place between private
investors and contracting states is governed by the ECT mentioned under article 26. On the other
hand, article 27 deals with the regulation related to resolution of dispute take place between state
to state. For this purpose, special provision is introduced by ECT so that trade dispute can be
resolved by following the conciliation procedure. Basically such kind of situation occur due to
breach of obligations stated under part III30. This shows that investors has right to find the scope
for the resolution of their dispute and ensure the appropriate completion of the investment related
activities. In this manner, investment is protected by providing appropriate right to investors an
handling all their related task as well as affairs effectively. For this purpose, investor's option is
considered in order to get the submission of the dispute. It consists of administrative tribunal
which handle the task related to dispute from the end of host state party and international
arbitration is involved. Along with that, previously agreed settlement procedure of dispute is also
covered under which parties get the proper solution for the issues which are being faced by them
in context of investment31. On a critical note, any kind of dispute resolution and other methods
affecting the right to arbitration are not connected to the exhaustion of local remedies. IN this
29 Schreuer, C., May. Diversity and harmonization of treaty interpretation in investment
arbitration (2010) In Treaty Interpretation and the Vienna Convention on the Law of Treaties: 30
Years on (pp. 129-152). Brill.
30 Alvarez, J.E. and Brink, T., Revisiting the Necessity Defense: Continental Casualty v.
Argentina (2012) Transnational Dispute Management (TDM), 9(3).
31 Dugan, C., Wallace, D., Rubins, N. and Sabahi, B., Investor-state arbitration. (Oxford
University Press 2011)

manner, it can be said that contractual dispute resolution mechanisms are not covered in the
same. Similarly, the provision of amicable settlement is also covered under the Article 26 all the
disputes must be resolved amicably, if possible. It might be possible that investors do not file the
copy of the dispute for the its resolution as per the specific act till three months completion from
the date of amicable settlement32.
Not only this but dispute related to environmental and competition are resolved with the
inclusion of consultation procedure. This is the most effective approach to provide the security of
the investors in context of money they investing the energy sector33. However, it is the basis for
profit of both related parties in order to generate more money and promote the sector of energy
in an appropriate manner. The investors are also provided the choice related to forum for dispute
resolution34. Here, investors are provided right to submit the unresolved dispute which is covered
under the article 26. It reflects that international arbitration, national court etc are considered for
the purpose of offering chance to resolve the dispute in an effectual manner. For this purpose,
there are several kind of forms of international arbitration which can be selected by the investors
in accordance with the Article 26(4)35. For this purpose, ICSID offered a chance for both host
state and investor state to ratify the convention. Not only this but additional Facility Rules are
also introduced in order to resolve the arbitration or dispute. UNCITRAL Arbitration rules are
also applied for the purpose of sole arbitrator. In addition to this, arbitral proceedings in case of
Arbitration institute. This would be more effective in order to resolve the dispute and provide the
32 Allee, T. and Peinhardt, C., Delegating differences: Bilateral investment treaties and
bargaining over dispute resolution provisions (2010) International Studies Quarterly 54(1), pp.1-
26.
33 Glinavos, I., Solar eclipse: investment treaty arbitration and Spain’s photovoltaic
troubles. In Lessons from the great recession: At the crossroads of sustainability and recovery
(pp. 251-271). (2016) Emerald Group Publishing Limited
34 Marhold, A.A., Fragmentation and the Nexus between the WTO and the ECT in global
energy governance–a legal-institutional analysis twenty years later (2015) The Journal of World
Investment & Trade 16(3), pp.389-435.
35 Roberts, A., Power and persuasion in investment treaty interpretation: the dual role of
states (2010) American Journal of International Law, 104(2), pp.179-225.

appropriate right for investors to secure their money in an effectual manner. However, Article 26
(3) represents that unconditional consent must be give by each contracting parties to be
submission of a dispute to international arbitration. It shows that unconditional consent cannot be
withdrawal from the ECT on the request which is made by investor for the purpose of
commencing the procedure related to arbitration36.
It is very important to shed light on the choice of the investors that which specific one
they want to select for the resolution of the their dispute. This in turn they are encouraged for the
investment in the energy sector and their rate of return is increased effectively. However, there
are some specific condition in case of withdrawal from the ECT which is generally done on the
request of the investor37. This facilitates to start the procedure related to arbitral proceedings. It
can be critically evaluated that consent of state is considered as the irrevocable which cannot be
withdrawal as it seems effective legally ineffective. However, period of 20 years is provided for
the contracting parties which withdraw from the ECT and accordingly they get protection
obligation for the mentioned time span only38. At this juncture, all of the above mentioned parties
are considered for the successful operation or investment promotion under the energy sector.
This is showing that investors are provided choice for the selection of method for the resolution
of the dispute and accordingly ECT and investment arbitration has the positive impact on the
specific sector. The applicable law is taken into account for the purpose of arbitral tribunal
resolution of the dispute. It aids to protect the righto f investing parties and ensure to do the
settlement of all related procedures in an effectual manner. Moreover, rules and principles of
international law are focused so as to determine that all investors are given proper right for
monitoring of their investment and getting the appropriate rate of return for the same.
The local companies of the nation are easily controlled through foreign investors due to
their major contribution in the investing the money and raising the profitability of the same in an
effectual manner. This is helpful for the completion of the dispute resolution aspect with the help
36 Simma, B., Foreign Investment arbitration: a place for human rights? (2011)
International and Comparative Law Quarterly, 60(03), pp.573-596.
37 Franck, S.D., Rationalizing costs in investment treaty arbitration (2011).
38 Levine, E., Amicus curiae in international investment arbitration: the implications of an
increase in third-party participation. Berkeley J. Int'l L. (2011) 29, p.200.

of international law. Owing to this, all mentioned elements are considered by the citizen or the
domestic entities through which respective parties or stakeholders can effectively meet their
objectives in a right manner. Moreover, fork in the road clause is another aspect under which
claimant submit international arbitration dispute in context of ECT. Though, all the contracting
stated covers under the Annex ID of the ECT is liable for the application of fork in the road
clause. Apart from this, most of the cases related to dispute are recorded in context of European
Union and ECT39.
5 PROVISIONAL APPLICATION OF ECT
Provisional application of the ECT covers the treaty obligation, connection between
municipal and international law and terminating the the provision application of the ECT. The
first aspect reflects that provision application of the treaty is introduced in order to reflect the
obligation of treaty which are given before the formation ratification of state. However, an
urgency leads to introduce a treaty before its ratification covers the negotiators related to
domestic approval for ratification40. Furthermore, relationship between international and
municipal law shed light on the less inconsistency of provisional application with its constitution.
For this purpose, national law priority was considered under the treated as long as it is
provisionally applied. At this juncture, inconsistency with municipal law must not be there in
provisional application whereas substantive provision of the municipal law must not be
inconsistent.41 As per the Article 45(1) ECT helps in agreeing to the fact that application of such
treaty results in provisionally pending its entry and thus it is not inconsistent with its constitution,
laws and regulations. Energy Charter Treaty makes declares that it is not able to accept
provisional application and thus apply to the signatory so that issues could be avoided. However,
investors with different nationality of states could be accept provisional application of ECT
against the states that is making ECT. Further, ECT also terminates its provisional application
39 Schneiderman, D., Legitimacy and Reflexivity in International Investment Arbitration: A
New Self-Restraint? (2011) Journal of International Dispute Settlement, p.idr010.
40 Newman, L.W. and Hill, R.D., Leading Arbitrators' Guide to International Arbitration.
Juris Publishing, Inc. (2014)
41 Hashim, A., Aspects of content and language in the Malaysian Arbitration Act. (2017)
HERMES-Journal of Language and Communication in Business, 17(32). pp.77-98.

and carry out written notification within contracting party. However, it assesses that any of the
signatory terminates the provisional application of the investment protection and dispute
resolution provisions that the investment made during that period would remain in consideration.
Main effect of provisional application regimes that at the time when contracting states
argued that they are not bound by ECT because they have signed it and thus oblige to perform
the actions. As per the case,42 Kardassopoulos, tribunal considered that Georgian government
that provisional application is considered as crucial character which results in developing
signatory state and thus obliged that ECT enters into such treaty to make regulations.
Through carrying out provisional application of treaty it results in identifying treaty
obligations and thus it effects prior to the state's formal ratification to the treaty. However, main
concept before introducing such concept of provisional application it involves inter alia which
means that there is certain urgency in regard to implement a treaty before the treaty is ratified.
Also, it assesses that the negotiation are certain that the treaty need to obtain required domestic
approval so that it results in overcoming obstacles through entering in the circumvent political or
other obstacles to the entry into force of a treaty43.
Developing Vienna Convention on the Law of Treaties 1969 develops the provisional
application of treaties in relation to impose the obligation upon the state so that they can refrain
and overcome the object and purpose of a treaty at the time when it is being signed so that they
could enter into force. As per the Article 25 of the Vienna Convention provides that treaty is
considered as the part of treaty that is being applied provisionally so that pending entries could
be made in force. Further, treaty itself also develops various negotiating states and thus agree to
have focus upon the same so that desired results could be attained.
Following are the different provisional application which are discussed underneath-
 Here, it assesses that each of the signatory agrees to implement such treaty provisionally
pending its entry into force and thus as per the Article 44 it assesses that to the extent of
42 Lam, E.T., The Roles of Governance in Sport Organizations. (2014) Journal of Power,
2(2), pp.19-31.
43 Salam, S., AXIOLOGY ARBITRATION VALUE RULING IN THE CASE
SETTLEMENT TRADE (Case Study Decision Of Supreme Court Number: 199 K/Pdt.
Sus/2012). (2016) Tadulako Law Review. 1(2). pp.228-246.

such provisional application it is considered as inconsistent with its constitution, laws or
regulations.
 However, any signatory might not signing the treaty and deliver to depository a
declaration that they are not able to accept provisional application. However, such
obligation contains paragraph and thus not applying the same to signatory making such a
declaration in relation to withdraw that declaration by written notification to the
depositary44.
 It assesses that neither a signatory that makes a declaration in relation to influence
investors of that signatory may claim the benefits of provisional application within the
formed treaty.
 Also in the paragraph (a), if any signatory makes a declaration refer to in subparagraph
(a) aims to apply provisionally pending the entry into force. Here, treaty for signatory in
relation to Article 44 and thus they are significantly inconsistent with its laws and
regulations.
 However, it also assesses that any signatory would terminate its provisional application
of this Treaty by written notification to the Depository of its intention so that developing
a contracting party to the Treaty. Also, carrying out termination of provisional application
for any signatory shall take effect upon the expiration of 60 days from the date upon
which signatory written notification is received by the depositary.
 Through carrying out the event it helps in terminating the signatory provisional
application under subparaph so that obligation of signatory carries out in respect to any
investments made within area and thus carry out effective provisional application through
investors of other signatories shall nevertheless remain in effect and thus identify the date
of termination so that treaty could be carried out in an effective way45.
44 Serhan, L.U., Arbitration Unbound: How the Yukos Oil Decision Yields Uncertainty for
International-Investment Arbitration. (2016) Tex. L. Rev., 95. pp.101-123.
45 Bars, B.L., Recent Developments in International Energy Dispute Arbitration. (2015)
Journal of International Arbitration, 32(5), pp.543-549.

 Further, provisional application could also formulate sub paragraph and does not apply
any signatory listed within the Annexure. Thus, it needs to be removed from the list and
thus carry out effective depositary system so that best results could be carried out46.
 Moreover, through carrying out pending the entry into force of this treaty the signatories
shall meet periodically in the provisional so that they contribute to the costs of the
provisional so that they could terminate upon the entry into force of this Treaty47.
 Signatories shall with and subject to the provisions of paragraph so that they could
contribute to the costs of provisional application so that contracting parties under any
modifications so that it could terminate upon the entry into force of this treaty.
 Moreover, regional economic integration organization assesses that prior to this Treaty it
carries out entry into force and thus in accordance to this they possess right and assume
that obligations of signatory within the article48.
6 AWARD RENDERED
As per the discussion it could be assessed that investment protection regime within ECT
has been force and thus render number of awards to that cases could be easily solved. However,
it has been assessed that out of 20 cases 14 has been solved to international arbitration. Further,
one award on jurisdiction is being provided so that they could issue ECT. Also, due to limited
number of awards it is not possible to assess any clear trends within ECT cases. Also, it is
essential for them to carry out effective awards and thus solve their jurisdictional issues so that
best interest could be attained. As per the section 6 B it assesses that assessing any clear ternds in
ECT cases. Through carrying out particular awards in and thus identify the issues so that
violation could be done in relation to contain any provision on the standard of compensation and
thus overcome the issue so that best awards could be done49. In the case of Ioannis
46 Lurie, P.M. and Lack, J., Guided choice dispute resolution processes: reducing the time
and expense to settlement. (2014) Disp. Resol. Int'l. 8. pp.167.
47 Ramzan, M. and Mahmood, K., Rationalizing Alternate Dispute Resolution in Pakistan.
(2016) International Journal of Research in Social Sciences. 6(1). pp.88-95.
48 Kao, C.C., Alternative Access to Investor-State Arbitration for Taiwanese Corporate
Investors against China via Treaty Shopping. (2015) Asia Pacific Law Review. 23(2). pp.121-
152.
49 Aden, M., ARBITRATION AND STATE LAW. (2016) Ученые записки Казанского
университета. Серия Гуманитарные науки. (2). pp.322-330.

Kardossopoulos v Georgia an award has been rendered on the issue of juridiction and dismissed
the case on the issue that tribunal was not entitled to decide the case for not haveing jurisdiction
over the issue. There have been certain other awards as well which have determined the
jurosdictional issues in relation to disputes arising out of ECT. However, it is important to note
that the not many cases have been decided by the Tribunal to detrmine a certain course of
approach which shall be adopted for interpretation of the Treaty. Some of decisions in Petrobat,
Plama and Kardossopoulos have though determined the general issues in relation to jurisdiction,
a much scope is left for judiciary to explore different facets of this treaty. Apart from the
jurisdictional awards there have been certain cases which have determined the quantum or
standard of compensation which shall be awarded in some specific cases of violation of the
treaty. However, the approach in relation to awarding compensation for expropriation is yet not
clear. One of the fundamental objectives which has been enshrined within ECT is to ensure a
reasonable level of fairness in the investments being made in energy sector. In pursuance to the
same the treaty also provides for fundamental rights which have been made available to the
foreign investors in the particular sector. Moreover, specific protection has been given to them
against expropriation, in addition to discrimination or nationalization. Article 12 and 13 of the
treat clearly provides for the award which shall be rendered in the event of expropriation. From
the case of Lauder and CME it can be ascertained that the investors can be hopeful for positive
decisions in the case of expropriation. However, there are not many awards which have been
granted by the Tribunal to clarify all the aspects in relation to expropriation such as the standard
of compensation which shall be awarded in these cases. One of the reasons of ambiguity in this
area it that unlike BIT, it does not provide for any form of standards in relation to awards to be
granted in expropriation.
Further, identifying the awards that needs to be rendered so that appropriate policies need
to be carried out so that best results could be attained. There are different Russian Federation so
that they have filed annulled upon different grounds50-
50 Kulick, A., About the Order of Cart and Horse, Among Other Things: Estoppel in the
Jurisprudence of International Investment Arbitration Tribunals. (2016) European Journal of
International Law, 27(1), pp.107-128.

 It has been identified that the tribunal do not possess any jurisdiction in order to hear to
the cases or claim of shareholder51.
 It also identifies that the tribunal violates its own mandate.
 Also, tribunal erither fails to provide reasons or provide inconsistent reasons so that best
ruling could be carried out52.
 Award violates the rights of public policy and thus involve the Russian Federation so that
proper process is being carried out that depends upon the economic disputes.
Through carrying out proper forum for investor and provide them awards so taht they
could determine that investors and investments enjoy the protection of businesses and thus
results in improving the business functions. Therefore, it is essential for businesses to develop
provisions relating to investment protection and thus resolve the disputes so that it carries out
focus upon arbitration option53.
Carrying out effective awards it results improving the provisions and thus carry out
effective disputes so that ECT develops international arbitration and thus provides investment so
that best results could be attained. Within ECT it identifies that investment protection regime has
been enforced so that appropriate number of awards could be rendered so that cases could be
solved in an effective way54. Through such way it provides awards in terms of providing
responsibility so that desired results could be attained, and thus enhances the operations so that
best results could be attained. However, providing limited number of awards it is not possible for
business to identify any clear trends within ECT cases.
51 Meijer, G.J. and Hansen, R.H., Arbitration and financial services. (2016) Controlling
Capital: Public and Private Regulation of Financial Markets. pp.193.
52 Fagbemi, S.A., The doctrine of party autonomy in international commercial arbitration:
myth or reality?. (2015) Journal of Sustainable Development Law and Policy (The), 6(1),
pp.202-246.
53 Xing'er, L., Analysis of the Third Party Involvement as a New Development in Chinese
International Arbitration Rules. (2016) Peking U. Transnat'l L. Rev.. 4. pp.245.
54 Norton, P.M., The Use of Precedents in Investment Treaty Arbitration Awards. (2014)
Am. Rev. Int'l Arb. 25. pp.167-289.

CONCLUSION
The aforementioned essay concludes that investment arbitration is very helpful for the
state and investors both. It enables investors to freely invest their money in the energy sector so
as to ensure promotion of the same. This would have significant impact on the corporation
performance and long run growth of the same in the marketplace. It can also be concluded that
parties get proper right to get their dispute resolved on right time through which all expectations
of all related stakeholders can be met effectively. Furthermore, investors are provided varied
choice for the dispute resolution and effectively propose alternative solution of the same. In
addition to this, with the formation of investment arbitration and ECT foreign investors get fair
and equitable treatment along with proper return over their investment. Thus, overall risk
associated with investment is reduced to a great extent with the formation of treaty and
supporting members countries to effectively show their contribution for accomplishment of
specific aim and objectives. Therefore, investment opportunities is creating in the market by
encouraging the local and national entities to invest in the field of energy.

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<http://www.law.qmul.ac.uk/events/items/168149.html> Accessed on 7th April 2017