Latest Twist in the Komstroy Saga The Definition of “Investment” under the ECT as Interpreted by the Paris Court of Appeal in Its Second Annulment Decision

Abstract

This case note provides an analysis of the Paris Court of Appeal’s (the Court of Appeal) second annulment (the Second Annulment), dated 10 January 2023, of an arbitration award rendered in favour of Energoalliance ltd (Energoalliance) under the Energy Charter Treaty (ect) in 2013. The case note focuses on the interpretation of the term “Investment”. The Second Annulment follows a first Court of Appeal annulment that was set aside by the French Supreme Court (Supreme Court) due to its incorrect interpretation of the term “Investment”. The Second Annulment, which applied a preliminary ruling of the Court of Justice of the European Union (cjeu), is instructive with regard to the factual circumstances which courts in EU Member States (Member States) will consider in determining whether a debt can qualify as an “Investment”. More specifically, the Second Annulment addresses the qualities which define an asset as “commercial” and, therefore, preclude it from being an “Investment”. Some ambiguity, however, remains in the Second Annulment with regard to the term “commercial” due, in the opinion of the authors, to the inconsistency between certain findings in the Supreme Court’s annulment of the first Court of Appeal annulment, and the cjeu’s preliminary ruling.