On Wednesday 29 January, members of the European Parliament’s Committees on International Trade (INTA) and Industry (ITRE) approved by simplified procedure the European Commission’s proposal on the interpretation of the ‘inter se’ agreement under the Energy Charter Treaty (ECT).
This proposal, led by rapporteurs Anna Cavazzini (Greens/EFA, German) and Borys Budka (EPP, Polish), states that awards made in intra-EU arbitration proceedings (disputes between a Member State and an investor from another Member State concerning an investment made on its territory) undermine the effective implementation of EU law.
In the Komstroy judgment (see EUROPE 12782/13), the Court of Justice of the EU ruled that Article 26 of the ECT - concerning the settlement of disputes between an investor and a contracting party to the Treaty - should be interpreted as not being applicable to such intra-EU disputes.
“Arbitration awards on intra-EU investments are not compatible with the internal market, because they are based on arbitration clauses that violate European Union law”, insisted Anna Cavazzini, who more generally called for the rapid closure of “the ECT chapter”, the withdrawal of which was notified by the EU and Euratom on 27 June 2024 because of its controversial protection of investments in fossil fuels (see EUROPE 13441/36).
During the debate in the parliamentary committee, the European Commission also called for action to be taken “as quickly as possible” to put an end to this “recalcitrant behaviour” on the part of certain arbitration tribunals. It also took due note of Ms Cavazzini’s request to enter into negotiations with the UK to reach a similar “inter se” agreement.
A technical report approving the Commission’s proposal will now be put to the vote at Parliament’s plenary session.
To see the Commission’s proposal: https://aeur.eu/f/fa8 (Original version in French by Pauline Denys)