Article 22 of the Energy Charter Treaty: Its Background, Scope, and Potential for Application As a Distinct Cause of Action in International Investment Arbitration Cases

Abstract

Typically, the Parties' Counsel and Arbitrators alike regard issues of piercing the corporate veil of State controlled entities under the realm of general customary rules of attributability. In international investment arbitration, this can tremendously burden the Claimants due to obligation to, additionally, argue for breach of any of the substantive provisions in the relevant investment protection treaty (such as fair and equitable treatment; prohibition of arbitrary treatment; full protection and security; prohibition of discrimination).

Article 22 of the Energy Charter Treaty is a unique conception that has been undeservedly overlooked by even experienced Practitioners and Arbitrators. The Paper argues that intention of the provision is to alleviate the intellectual burden of Parties and Tribunals in giving opportunity to focus on Article 22 as the sole distinct cause of action, when issues of manipulating, by the State, of its controlled entities are at hand (such as favoritism in access to certain goods, services, or infrastructure; or when such entities are used as channels for implementing a measure strongly coinciding with intention and preferences of State on a larger scale).

Keywords: Energy Charter Treaty, International Investment Arbitration, Foreign Investment Protection, Article 22 of the Energy Charter Treaty, Piercing the Corporate Veil, State Controlled Entities, Draft Articles on Responsibility of States for Internationally Wrongful Acts