“Investment” and “Investor” in Energy Charter Treaty Arbitration: Uncertain Jurisdiction

Abstract

Establishing investor status is a precondition for substantive protections, and a key jurisdictional issue in arbitration, of investor–state disputes under the Energy Charter Treaty (ECT). This article argues that the differences in the ways the term “investment” is interpreted in arbitration under the ICSID Convention and in international commercial arbitration are to a large extent preserved in arbitration under the Energy Charter Treaty. In ICSID arbitration, which preserves many elements of state sovereignty, tribunals have set a higher threshold for “investment.” In international commercial arbitration, on the other hand, the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has interpreted the term more broadly, thus capturing more investor activities in the energy sector of the host states. Moreover, both types of arbitral procedure available under the Energy Charter Treaty continue to have their respective advantages and disadvantages. However, given the changing role of states in the global energy sector, this traditional divide may become less clear.