RESOLUTION OF INTERNATIONAL ENERGY DISPUTES:
PEACE, STABILITY AND SECURITY
Opening Remarks of the Secretary-General of the ECS
Dear Secretary General Siblesz, thank you for your warm welcoming and for coorganizing this first global dialogue between governments and companies on the
resolution of international energy disputes.
Your Excellencies, Ladies and Gentlemen, Thank you for joining us today.
As mentioned in the flyer of this event, there is a lack of substantive cooperation
frameworks across regions to enable the early and effective resolution of energy
disputes. Well… hopefully that is not completely true anymore.
The International Energy Charter was adopted 2 days ago in The Hague and signed
by countries in the five continents in addition to the European Union and
ECOWAS. Although it contains no legal obligation, the IEC is expected to facilitate
global dialogue on energy issues and to serve as the common basic framework
for cooperation to solve energy disputes.
In fact, may I mention just two examples: Over the last two days we had sitting at
the same table:
- Israel, Palestine, Lebanon, Cyprus, Turkey and Iran discussing energy
cooperation;
- the European Union, Iran and all the P5+1 members except Russia
discussing nuclear cooperation.
What do we mean by energy disputes? According to UNCTAD and ICSID, around
50% of the new investment arbitration cases are related to energy.
But energy disputes are not only investment disputes. They are also related to
transit, competition or trade. Last year you surely followed the events in Ukraine.
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Contrary to what happened in 2006 and 2009, this time there was no disruption of
gas flows. Among the several international efforts involved, the Energy Security
Contact Group which I set up allowed the parties concerned to exchange
information and to work together with the aim of preventing a major interruption
of energy flows.
As a result of the experience, a Model Energy Charter Early Warning Mechanism
was welcomed by the Energy Charter Conference in 2014 as a complementary
instrument of preventive energy diplomacy, confidence building and emergency
measures that can be used by signatories of the IEC.
In addition… the Energy Charter Treaty contains several dispute resolution
mechanisms, each one of which was designed to specifically address a particular
subject matter or aspect of the Treaty. It is therefore an important global
instrument for peace, stability and security.
These dispute resolution mechanisms may be divided into two main groups:
(i) Dispute resolution between Contracting Parties. If not settled through
diplomatic channels within a reasonable time and unless otherwise agreed in
writing, can be submitted to an ad hoc arbitral tribunal. Unless otherwise
agreed, it shall sit in The Hague and use the premises of the Permanent Court
of Arbitration, where we seat today.
The only exceptions concern:
• Competition disputes: The treaty contains a cooperation mechanism that
facilitates consultation regarding allegations of anti-competitive conduct.
• Environmental disputes: the Charter Conference shall review and discuss
environmental disputes, aiming at reaching an agreement if there are no
other appropriate international forums.
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• Trade and trade-related investment (TRIM) disputes: The WTO-based
panel applies only in cases where at least one of the disputing Contracting
Parties is not a member of the WTO.
• There is an additional conciliation mechanism in relation to disputes over
any matter arising from Transit.
(ii) Dispute resolution between an investor and a Contracting Party, including
the European Union. I will not spend too much time on this point, since you
are well aware of it. However, let me stress that the Energy Charter is
currently discussing, with the support of an external body of experts:
a) how to facilitate the already existing possibility of referring the dispute to
conciliation, as well as
b) whether the establishment of a network of national investment
ombudsmen could help both Contracting Parties and investors to solve
problems in a more effective and cheaper way.
Finally, I would like to emphasise an additional Alternative Mechanism already
provided by the Energy Charter Secretariat: its facilitating role and good offices.
As a recognition of such useful practice, the Conclusions of the 2014 Review of the
Energy Charter Conference mandated the Secretariat to (i) provide assistance with
good offices, mediation and conciliation; as well as to (ii) provide neutral legal
advice and assistance in dispute resolution and participate in pre-trial proceedings
between Contracting Parties.
Dialogue is the first step towards solving problems and the Energy Charter is the
global forum for such dialogue in the energy sector. I wish that today’s event will
contribute towards a useful dialogue between companies and governments.
Thank you for your attention.
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