The Impact of Multilateral Investment Treaties in Resolving Investment Disputes in the Energy and Mining Sectors: Lessons from the European Experience

With energy investment disputes increasingly on the rise, is the modern regime of foreign investment protection capable of producing effective outcomes for the disputing parties? Or might the regime’s gradual shift toward one comprising an expanded number of multilateral investment treaties and fewer bilateral international investment treaties have a more positive impact on how such disputes are resolved? To that end, this chapter uses one multilateral investment treaty as the focal point of analysis, the Energy Charter Treaty. Drawing upon the (mainly) European experience with that treaty, including ongoing attempts to modernize it, we will see that multilateral investment treaty-making and -modernizing projects provide unique opportunities to impact the resolution of energy investment disputes in a positive way. Seizing that opportunity, however, will depend on how multilateral investment treaties are normatively designed in the jurisdictional, substantive, and procedural sense. Jurisdictionally, are they aligned with the contracting state parties’ climate change–related obligations? Substantively, do they balance the rights and obligations of foreign investors and host states? Procedurally, do they ensure that any disputes arising under their legal framework are capable of resolution pursuant to an appropriate dispute resolution mechanism? While it may be difficult to design such a multilateral investment treaty in reality, as evidenced by the fraught experience of modernizing the Energy Charter Treaty, the lessons learned from that experience should provide a suitable benchmark to ensure the success of other ongoing and future multilateral investment treaty projects.