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Commentary on the Energy Charter Treaty

Edited by Rafael Leal-Arcas

The Commentary on the Energy Charter Treaty (ECT) provides a unique, article-by-article, textual analysis of this important international agreement. The ECT outlines a multilateral framework for cross-border cooperation in the energy sector based on the principles of open competitive markets and sustainable development.
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EXTENDED CONTENTS

Extended contents

List of contributors

Acknowledgements

Table of cases

Table of legislation

Introduction

Rafael Leal-Arcas

Preamble

COMMENTARY   P.01

Antonio Morelli

PART I    DEFINITION AND PURPOSE

Article 1   Definitions

Dylan Geraets and Leonie Reins

COMMENTARY   1.01

Introduction   1.01

A. Part I: Definitions and Purpose  1.03

Article 2 Purpose of the Treaty

Leonie Reins

COMMENTARY 2.01

A. ‘In accordance with the objectives and principles of the Charter’  2.03

B. ‘Complementarities and mutual benefits’  2.16

C. ‘Long-term cooperation in the energy field’  2.17

D. ‘A legal framework’  2.22

PART II    COMMERCE

Article 3 International markets

Pierre Serra

COMMENTRY   3.01

A. Introduction  3.01

B. ‘An open and competitive market’  3.02

C. ‘Energy Materials and Products and Energy-Related Equipment’  3.05

Article 4 Non-derogation from WTO Agreement

Pierre Serra

COMMENTARY   4.01

A. Introduction  4.01

B. The non-derogatory provision  4.04

C. The non-derogatory provision and secondary rules  4.11

Article 5 Trade-related investment measures

Pierre Serra

COMMENTARY   5.01

A. Introduction  5.01

B. Trade-related investment measures: basic elements and the WTO approach  5.02

C. Article 5 on TRIMs, a provision-by-provision analysis  5.10

D. The Australian Declaration: exceptions and jurisdictional issues  5.23

Article 6 Competition

Pierre Serra

COMMENTARY   6.01

A. Introduction  6.01

B. The obligation of alleviation – Article 6(1)  6.04

C. Enforcement of competition provisions by the Contracting Parties – Article 6(2)  6.11

D. Obligation of cooperation between Contracting Parties and between national competition authorities – Article 6(3), (4) and (6)  6.14

E. Infringement, cooperation and dispute resolution – Article 6(5) and (7)  6.15

Article 7 Transit

Cătălin Gabriel Stănescu

COMMENTARY   7.01

Article 8 Transfer of technology

Beatriz Huarte Melgar

COMMENTARY   8.01

A. Introduction  8.01

B. Transfer of technology  8.08

C. Context of Article 8  8.12

D. Article 8, Paragraph 1  8.23

E. Article 8, Paragraph 2  8.47

F. Conclusions  8.56

Article 9 Access to capital

Beatriz Huarte Melgar

COMMENTARY   9.01

A. Introduction  9.01

B. Context of ECT Article 9  9.04

C. ECT Article 9, Paragraph 1  9.20

D. ECT Article 9, Paragraph 2: Facilities to have access to funds for facilitating trade or investment abroad  9.31

E. ECT Article 9, Paragraph 3: Implementation of programmes in Economic Activity in the Energy Sector  9.35

F. ECT Article 9, Paragraph 4: ‘Nothing in this Article shall prevent […]’  9.38

G. Conclusions  9.41

PART III    INVESTMENT PROMOTION AND PROTECTION

Article 10 Promotion, protection and treatment of investments

Diego Mejía-Lemos

COMMENTARY   10.01

A. Part III  10.04

B. Article 10  10.22

Article 11 Key personnel

Diego Mejía-Lemos

COMMENTARY  11.01

Article 12 Compensation for losses

Diego Mejía-Lemos

COMMENTARY  12.01

Article 13 Expropriation

Diego Mejía-Lemos

COMMENTARY  13.01

Article 14 Transfers related to investments

Francesco Montanaro

COMMENTARY  14.01

A. Introduction  14.01

B. The monetary transfer clause in the Energy Charter Treaty in light of the investment treaty practice  14.04

Article 15 Subrogation

Apurva Mudliar

COMMENTARY  15.01

Article 16 Relation to other agreements

Francesco Montanaro

COMMENTARY  16.01

A. Introduction  16.01

B. Clauses governing conflicts with other treaties in the IIAs and in the ECT  16.03

Article 17 Non-application of Part III in certain circumstances

Apurva Mudliar

COMMENTARY  17.01

A. Introduction  17.01

B. Title: Non-application of Part III in certain circumstances  17.04

C. Application of Article 17(1) of the ECT  17.08

D. Denial of benefits to an investment under Article 17(2)  17.22

E. Conclusion  17.24

PART IV    MISCELLANEOUS PROVISIONS

Article 18 Sovereignty over energy resources

Peter Vajda and Varvara Aleksić

Tina Hunter

COMMENTARY  18.01

COMMENTARY  18.08

Article 19 Environmental aspects

Peter Vajda and Varvara Aleksić

Tina Hunter

COMMENTARY  19.01

COMMENTARY  19.22

Article 20 Transparency

Gloria Alvarez

COMMENTARY  20.01

A. Structure and scope  20.01

B. Notion of transparency in the ECT  20.02

C. Transparency in ECT Secretariat Model Agreements  20.09

Article 21 Taxation

Gloria Alvarez

COMMENTARY   21.01

A. Introduction, structure and scope  21.01

B. Bona fide taxation measures according to the ECT  21.02

C. Structure and the general rule on Article 21  21.05

D. Exceptions to the general rule on Article 21  21.07

E. Article 21 in practice and jurisdictional issues  21.14

Article 22 State and privileged enterprises

Costantino Grasso

Tina Hunter

COMMENTARY   22.01

COMMENTARY   22.25

Article 23 Observance by sub-national authorities

Costantino Grasso

COMMENTARY   23.01

Article 24 Exceptions

Costantino Grasso

Gloria Alvarez

COMMENTARY   24.01

COMMENTARY   24.14

Article 25 Economic Integration Agreements

Costantino Grasso

Gloria Alvarez

COMMENTARY   25.01

COMMENTARY   25.13

PART V    DISPUTE SETTLEMENT

Article 26 Settlement of disputes between an investor and a contracting party

Fernando Dias Simões

COMMENTARY   26.01

A. Article 26(1)  26.01

B. Article 26(2)  26.10

C. Article 26(3)  26.14

D. Article 26(4)  26.23

E. Article 26(5)  26.31

F. Article 26(6)  26.34

G. Article 26(7)  26.37

H. Article 26(8)  26.38

Article 27 Settlement of disputes between contracting parties

Crina Baltag

COMMENTARY   27.01

Article 28 Exclusion of certain provisions of the ECT from the settlement of disputes between contracting parties

Crina Baltag

COMMENTARY   28.01

PART VI    TRANSITIONAL PROVISIONS

Article 29 Interim provisions on trade-related matters

Max Baumgart

COMMENTARY   29.01

A. Introduction  29.01

B. Temporal scope of application (para 1)  29.03

C. Incorporation of the WTO Agreement’s rights and obligations (para 2)  29.05

D. Full transparency obligation (para 3)  29.09

E. Best-endeavour commitment (paras 4 and 5)  29.11

F. Stand still clause (paras 6, 7 and 8)  29.12

G. Dispute settlement (para 9)  29.17

Article 30 Developments in international trading arrangements

Silke Goldberg, Naomi Lisney and Anne Eckenroth

COMMENTARY   30.01

Article 31 Energy-related equipment

Silke Goldberg, Naomi Lisney and Anne Eckenroth

COMMENTARY   31.01

Article 32 Transitional arrangements

Silke Goldberg, Naomi Lisney and Anne Eckenroth

COMMENTARY   32.01

A. Review of the transitional arrangements  32.04

B. The AES Corporation and Tau Power B.V. v. Republic of Kazakhstan (ICSID Case No. ARB/10/16)  32.09

PART VII    STRUCTURE AND INSTITUTIONS

Article 33 Energy Charter Protocols and Declarations

Silke Goldberg, Naomi Lisney and Anne Eckenroth

COMMENTARY   33.01

A. The PEEREA  33.05

B. The Transit Protocol  33.12

Article 34 Energy Charter Conference

Cătălin Gabriel Stănescu

COMMENTARY   34.01

A. Members and observers  34.02

B. Meetings of the Charter Conference  34.04

C. The powers and functions of the Charter Conference  34.05

D. Subsidiary bodies  34.38

E. Conclusions  34.42

Article 35 Secretariat

Cătălin Gabriel Stănescu

COMMENTARY   35.01

A. The staff of the Secretariat  35.02

B. The role and functions of the Secretariat  35.05

C. The appointment of the Secretary General  35.17

D. The Secretary General's role in ECT's Dispute Resolution Mechanisms  35.22

E. Conclusions  35.29

Article 36 Voting

Cătălin Gabriel Stănescu

COMMENTARY   36.01

A. Who can vote  36.02

B. Exercising the right to vote – voting by correspondence  36.03

C. Voting rules  36.06

D. Conclusions  36.10

Article 37 Funding principles

Cătălin Gabriel Stănescu

COMMENTARY   37.01

A. Types of costs  37.02

B. Determination of financial contributions  37.04

C. Voluntary contributions  37.06

D. Conclusions  37.07

PART VIII    FINAL PROVISIONS

Article 38 Signature

Odysseas G. Repousis

COMMENTARY   38.01

A. Introduction  38.01

B. Scope  38.02

C. Eligibility and temporal issues  38.03

D. State practice  38.05

E. Succession cases  38.07

Article 39 Ratification, acceptance or approval

Odysseas G. Repousis

COMMENTARY   39.01

A. Introduction  39.01

B. State practice  39.03

Article 40 Application to territories

Odysseas G. Repousis

COMMENTARY   40.01

A. Introduction  40.01

B. Territories for the international relations of which a contracting party is responsible  40.03

C. Territorial declarations and the ECT ‘Area’  40.06

D. Temporal issues  40.09

E. State practice  40.14

F. Territorial declarations and provisional application  40.17

Article 41 Accession

Odysseas G. Repousis

COMMENTARY   41.01

A. Introduction  41.01

B. Scope  41.03

C. State practice  41.04

Article 42 Amendments

Antonio Morelli

COMMENTARY   42.01

Article 43 Association agreements

Antonio Morelli

COMMENTARY   43.01

Article 44 Entry into force

Antonio Morelli

COMMENTARY   44.01

Article 45 Provisional application

Antonio Morelli

COMMENTARY   45.01

Article 46 Reservations

Antonio Morelli

COMMENTARY   46.01

Article 47 Withdrawal

Antonio Morelli

COMMENTARY   47.01

Article 48 Status of Annexes and Decisions

Leonardo Borlini and Marina Petri

COMMENTARY   48.01

A. Purpose and function  48.01

B. Relevance of the article  48.03

Article 49 Depositary

Leonardo Borlini and Marina Petri

COMMENTARY   49.01

A. Purpose and function  49.01

B. Content of the article  49.04

Article 50 Authentic texts

Leonardo Borlini and Marina Petri

COMMENTARY   50.01

A. Purpose and function  50.01

B. Content and interpretative implications of the article  50.03

Appendix: Gas transit in Eurasia: transit issues between Russia and the European Union and the role of the Energy Charter

Andrey A. Konoplyanik

Index