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University of Miami Business Law Review

Document Type

Article

Abstract

As oil and gas continue to be hot commodities for national economies, the number of international arbitrations in the energy sector has continued to rise in recent years. As the utilization of International Arbitration continues to rise in Energy disputes, so does the invocation of The Energy Charter Treaty (“ECT”). The ECT promotes inter-governmental cooperation with contracting parties in the energy sector through its provisions on investment protection, provisions on trade, transit of energy, energy efficiency, environmental protection and dispute resolution. These provisions are considered to be the cornerstone of the treaty, fostering a ‘level playing field’ for foreign investments in the energy sector and minimizing the noncommercial risks associated with such investments, all pursuant to the Minimum Standards for Investment Protection described in Section 10(1) of the ETC, such as Fair and Equitable Treatment (FET). However, such standards are overbroad and leave room for numerous interpretations. Though likely intended to strengthen the application of FET, overbreadth dampens the effect of the ETC’s FET provision, as it fails to uniformly instruct both parties and tribunals on the parameters of FET under the Treaty and could ultimately hinder the FET provided to foreign investors. This paper seeks to address ways in which Article 10(1) of the ECT, on Fair and Equitable Treatment, can be modified to better protect foreign investments. The first part of this paper will discuss a brief history of this ETC. The second part of this paper will discuss Article 10(1) of the ETC as it pertains to FET and its applicability in practice, by focusing on three recent Spanish cases: (1) Masdar Solar & Wind Cooperatief U.A. v. The Kingdom of Spain, ICSID Case No. ARB/14/1; (2) Charanne B.V., Construction Investments S.A.R.L. v Spain, SCC Arbitration No.: 062/2012; and (3) Eisner Infrastructure Limited and Energia Solar Luxembourg S.a.r.l. v Spain, ICSID Case No. ARB/13/36. The paper concludes by offering suggestions for modernizing Article 10(1), using the recent Spanish cases as a model.

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