Burden of Proof Under the ‘Denial-of-Benefits’ Clause of the Energy Charter Treaty: Actori Incumbit Onus Probandi?

Abstract

No less than thirty investor-state disputes have been brought to arbitration under the auspices of the Energy Charter Treaty (ECT) since its entry into force back in 1998. Over the years, ECT tribunals have confronted the host states' attempts to invoke the 'denial-of-benefits' clause of the Treaty on multiple occasions. Yet the issue of the burden of proof under Article 17(1) remains largely unsettled. In general, only two solutions to the burden of proof dilemma are conceivable: it is either the respondent state that is under an obligation to persuade a tribunal that the criteria for an exercise of the 'right to deny' are met in a given dispute, or it is the claimant who has a duty to prove the opposite. ECT case law is split along the same lines. In some cases, the tribunals seemed to have endorsed the host states' 'free rider' attitude by tolerating the invocation of the denial clause, without requiring the respondents to establish the assertions proposed. In other arbitrations, the tribunals adhered to the classic canons of the legal burden. This article seeks to explore the two approaches to the burden of proof under Article 17(1) ECT from the perspectives of international law and jurisprudence on the legal burden, taking account of the wording and spirit of the ECT.