Dead End for Energy Concessions? The Legal Consequences of the Overlap between the Concessions Directive and the Energy Charter Treaty

CEVIA Working Paper Series, Issue 1/2017, No. 3

University of Copenhagen Faculty of Law Research Paper No. 2017-42

23 Pages Posted: 11 Jul 2017 Last revised: 3 Oct 2017

See all articles by Catalin Gabriel Stanescu

Catalin Gabriel Stanescu

University of Copenhagen, Center for Enterprise Liability (CEVIA)

Date Written: July 5, 2017

Abstract

The 2014/23/EU Directive on concessions introduces a new definition for concession contracts and a new set of rules concerning contract design and contract modification. The paper seeks to determine the effects of the Directive on concessions concerning oil and gas or energy production, mainly the clauses providing for fiscal and political investor protection mechanisms. By analyzing the black letter provisions of the Directive, the existent CJEU case law and relevant arbitral awards, it concludes that the new EU regime of concessions is incompatible with stabilization clauses and other mechanisms of investor protection that, on the one hand, limit the state’s regulatory powers and, on the other hand, guarantee investor’s profit arising from a concession, on the state’s expense. However, such change of regime is likely to stir a new wave of arbitration cases with unforeseeable results regarding the application of EU law and to drive away foreign investment altogether.

Suggested Citation

Stanescu, Catalin Gabriel, Dead End for Energy Concessions? The Legal Consequences of the Overlap between the Concessions Directive and the Energy Charter Treaty (July 5, 2017). CEVIA Working Paper Series, Issue 1/2017, No. 3 ; University of Copenhagen Faculty of Law Research Paper No. 2017-42. Available at SSRN: https://ssrn.com/abstract=2997451 or http://dx.doi.org/10.2139/ssrn.2997451

Catalin Gabriel Stanescu (Contact Author)

University of Copenhagen, Center for Enterprise Liability (CEVIA) ( email )

Karen Blixens Vej 16
Copenhagen, 2300
Denmark

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