Energy investments are often made for decades, while energy policy can change quickly. That tension explains why Article 26 of the Energy Charter Treaty (ECT) was, for many investors, an important route to arbitration. Within the European Union, however, that route is now highly constrained.
The change began with Achmea. In that case, the Court of Justice of the European Union (CJEU) held that investor-state arbitration under an intra-EU bilateral investment treaty was incompatible with the autonomy of EU law. In Komstroy, the Court extended that reasoning to Article 26 of the ECT. It held that Article 26 could not apply to disputes between one member state and an investor from another member state, because such disputes may involve the interpretation or application of EU law by a tribunal outside the judicial system established by the EU treaties.
