"European Court of Justice drastically limits Energy Charter Treaty within EU", 2 Sep 2021

As part of a ruling on the legality of a dispute between Moldova and Komstroy Investment, the European Court of Justice declared that Investor-State Dispute Settlement (ISDS) cases using the Energy Charter Treaty are “not applicable” within the EU – i.e. between an investor in the EU and an EU member state. Specifically, article 26 of the Energy Charter Treaty (ECT), which allows for so-called corporate court arbitrations, is not valid intra-EU.

Friends of the Earth Europe calls on the European Commission and EU member states to withdraw from the ECT...

The ECT is a treaty from the 1990s that protects the interests of energy investors – mainly fossil fuel companies. It is increasingly being used by investors to challenge governments that introduce ambitious climate policies, and campaigners accuse it of undermining the Paris Agreement and the European Green Deal.

The European Court of Justice decided in 2018, in the Achmea ruling, that ISDS in intra-EU Bilateral Investment Treaties is not compatible with EU law. Now the ECJ extends that to intra-EU ISDS cases based on the ECT.

In recent years, the Energy Charter Treaty has become the source of the majority of ISDS cases in Europe – such as billion euro claims of RWE and Uniper against the Dutch government...