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Charanne case: investors defeated in first ECT solar claim arbitral awardThere are over thirty arbitrations based on the provisions of the Energy Charter Treaty (‘ECT’) registered against Spain and arising out of the photovoltaic solar electricity incentives granted by Spain to its investors in this renewable energy field. Promoted under the slogan ‘The sun can be yours’, the incentives granted by Spain attracted a record number of investments. The first arbitral award issued in this series of cases concerned the dispute between Charanne B.V. and Construction Investments S.à.r.l, as Claimants, and Spain, as Respondent. While the arbitral tribunal upheld jurisdiction, it rejected Claimants’ claim and dismissed the allegations of breaches of fair and equitable treatment and expropriation standards under the ECT. Although this arbitral award is not binding on subsequent arbitral tribunals, the reasoning of the tribunal in the Charanne case is of utmost importance as it confirms that the ECT is available for intra-European Union disputes. On the other hand, it is interesting to see how the other cases based on the same regulatory scheme will develop, as the tribunal in the Charanne case dismissed Claimants’ claims in full.
The Energy Charter Treaty and the intra-EU treaty objection post Charanne and REEF cases: the latest developments in Blusun v. ItalyUntil 2010, the Energy Charter Treaty (ECT) was relied on in less than thirty investment arbitration cases. Fast-forward seven years and there are more than one hundred cases. Most of these cases arise out of the repeal of the incentives granted to photovoltaic solar electricity investments under the EU regulations and majority of such disputes necessarily involve an investor of an European Union (EU) Member State, as Claimant, and an EU Member State, as Respondent. As a rule, the European Commission requested participation as amicus curiae in these cases and argued that the ECT is not meant to be applied between the EU Member States, as Contracting Parties to the ECT. Such claim is necessarily based on the fact that the ECT was signed by both the EU (the European Communities at that time) and the EU Member States because of the shared competences under the EU Law in matters addressed by the ECT. Blusun S.A., Jean-Pierre Lecorcier and Michael Stein v. Italy is yet another case in which the Tribunal rejects this argument and concludes that the ECT was entered into by the EU Member States in their own capacity and no ‘disconnection clause’ was included in the ECT to prevent the intra-EU application of the ECT.
Not hot enough: cooling-off periods and the recent developments under the Energy Charter TreatyCooling-off provisions in international investment agreements guarantee that investors and host States resolve their disputes in the most efficient manner. Aimed at offering the parties the opportunity to amicably settle their differences, cooling-off provisions remain a controversial issue in the jurisprudence on international arbitral tribunals. Arbitral tribunals are still split between considering the cooling-off provision as a procedural requirement or as an admissibility or jurisdictional requirement. Each of these positions triggers different practical consequences, with serious outcomes for the arbitral process.This note addresses the latest developments concerning the cooling-off provision under one international investment agreement–the Energy Charter Treaty.