INVESTOR - STATE ARBITRATION UNDER ENERGY CHARTER TREATY

KIM DAEJUNG

The Energy Charter Treaty (ECT) was initiated by European countries including Russia, the EU and it was opened for signature in Lisbon on December 17, 1995. The ECT is by far the most widely ratified investment protection agreement as to an important economic sector, energy. The ECT differs from other multilateral investment treaties, which are regional in nature, in that the Treaty has a potentially global reach. The ECT provides substantive protections to foreign investors when they invest in the ECT, thereby stimulating foreign investment by protecting investors from abroad. Article 26 of the ECT provides the procedures for an investor of a investor-state arbitration and it states host state’s unique unconditional consent to an arbitration with only a few exceptions. Investors choose to submit the dispute for resolution among ICSID, UNCITRAL Arbitration Rules and the Arbitration Institute of the Stockholm Chamber of Commerce. A landmark ECT arbitration Yukos Universal Ltd. v. Russian Federation was ruled in November 2009 pursuant to the Energy Charter Treaty on the allegations including expropriation, and decision to reject Russia's objections to the arbitral Tribunal's jurisdiction and the admissibility of the claims. Nykomb's claim was based on a disagreement as to the appropriate tariff applicable under a contract for the production of energy. Nykomb asserted that non-payment of the double tariff amounts constituted indirect or creeping expropriation under the ECT Article 13(1). Petrobart claimed that the Kyrgyz government intervened in the judicial proceedings and executive decrees that ordered KGM's reorganization failed to provide a Fair and Equitable Treatment(FET) under Article 10(1) of the ECT. Although the ECT may be considered to be one of the most successful international investment treaties, many of the prominent energy consuming and exporting states such as the US and Canada are still not parties to it. Unconditional consent to an arbitratiotn under Article 26 should be more closely analyzed for the benefit of both investor and host state. In this perspective, NAFTA jurisprudence will serve best given the aggregate number of arbitral decisions. The ECT is sill in its initial phase to progress, and the number of investor-state arbitration is still growing. Our concern now could be as to when and how Korea will join the ECT and how Korea will use the dispute settlement mechanism wisely. This could further help Korea initiate a Northeast Asian energy cooperation regime in the near future.

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REFERENCES (30)
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* 2021년 이후 발행 논문의 참고문헌은 현재 구축 중입니다.

[report] 석우남 / 2013 / 한국의 ECT 가입 필요성 및 대응전략 연구 / 에너지경제 연구원

[report] 이성규 / 2015 / 국제에너지헌장(IEC)의 설립재경과 시사점

[journal] 이유진 / 2013 / Russia and Energy Charter Treaty / 슬라브학보 / 한국슬라브․유라시아학회 28(4) : 355~384

[journal] 이재승 / 2011 / The Evolution of EU’s Common Energy Policy / 국제관계연구 / 일민국제관계연구원 16(1) : 31~68

[journal] Blyschak, Paul M / 2011 / Yukos Universal V. Russia: Shell Companies and Treaty Shopping in International Energy Disputes / Rich. J. Global L. & Bus 10 : 179~

[other] Eliasson, Nils / 2011 / 10 Years of Energy Charter Treaty Arbitration / Manheimer Swartling

[other] Energy Charter Secretariat / 2004 / The Energy Charter Treaty and Related Documents: A Legal Framework for International Energy Cooperation / Energy Charter Secretariat

[journal] Hober, Kaj / 2010 / Investment Arbitration and the Energy Charter Treaty / Journal of International Dispute Settlement 1(1)

[journal] Kim, Joongi / 2014 / The Formulation of Korea's Resource Policy: Resource Diplomacy, Public-Private Consortium and International Agreements / Asian J. WTO & Int'l Health L. & Poli'y 9 : 287~

[journal] Konoplyanik, A. / 2005 / The Energy Charter Treaty: Dispute Resolution Mechanisms-and the Yukos Case / Russian/CIS Energy &Mining Law Journal 3

[other] Luten, Lennart / 2006 / Dispute Resolution Mechanism of the Energy Charter Treaty in Investor-State disputes / State Disputes

[journal] Nathanson, Rachel A. / 2013 / The Revocation of Clean-Energy Investment Economic-Support Systems as Indirect Expropriation Post-Nykomb: A Spanish Case Analysis / Iowa L. Re 98 : 863~

[other] / 2015 / Ramaswamy, Murugua Perumal, Trade development through harmonization of commercial law / The New Zealand Association for Comparative Law

[book] Roe, Thomas / 2011 / Settlement of Investment Dispute under the Energy Charter Treaty / Cambridge University Press

[journal] Reed, Luch / 2008 / The Energy Charter Treaty: An Overview / ILSA J. Int'l & Comp. L 14 : 405~

[journal] Sussman, Edna / 2008 / The Energy Charter Treaty's Investor Protection Provisions: Potential to Foster Solutions to Global Warming and Promote Sustainable Development / ILSA J. Int'l&Comp. L 14 : 391~

[book] Tannaca-Small, Katia / 2010 / Arbitration under International Investment Agreement: A Guide to the Key Issues / Oxford University Press

[other] / 2014 / United Nations Conference on Trade and Development, IIA Issue Note

[journal] Yodogawa, Noriko / 2012 / An Opportunity for Progress: China, Central Asia, and the Energy Charter Treaty / Tex J. Oil, Gas & Energy L 8 : 111~

[journal] Winkler, Matteo M / 2006 / Arbitration without Privity and Russian Oil: The Yukos Case before the Houston Court / U. Pa. J. Int’l Econ.L 27 : 115~

[web] / 외교부 홈페이지 / http://www.mofa.go.kr/main/index.jsp

[web] / Energy Charter Treaty home page / Members and Observers / http://www.encharter.org/index.php?id=61

[web] / 2013 / Seoul Economy News Paper / http://economy.hankooki.com/lpage/politics/20131er0/e2013101617014696380.htm

[web] / Sherman & Sterling, Client Publication / http://www.shearman.com/~/media/Files/NewsInsights/Publications/2010/01/Yukos--Landmark-Decision-on-the-Energy-Charter-T__/Files/Click-here-to-view-full-memo-Yukos--Landmark-Dec__/FileAttachment/IA010

[other] / 1994 / Energy Charter Treaty, Dec. 17, 1994, 34 I.L.M. 360

[other] / 1958 / Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958

[web] / Cases Nykomb Synergetics Technology Holding AB v. Republic of Latvia, Arbitration Institute of the Stockholm Chamber of Commerce (ECT) / http://ita.law.uvic.ca/alphabeticallistrespondant.htm

[other] / Petrobart Ltd. v. The Kyrgyz Republic, Arbitration Institute of the Stockholm Chamber of the Commerce Arbitration, Case No. 126/20003, Final Award

[other] / Plama Consortium Limited v. Republic of Bulgaria (ICSID Case No. ARB/03/24)

[web] / 2009 / Yukos Universal Ltd. v. Russian Federation (Perm. Ct. Arb. 2009) / http://www.encharter.org/fileadmin/user_upload/document/Yukos_interim_award.pdf

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