Exiting the Energy Charter Treaty under the Law of Treaties

(2023) 34 King's Law Journal (forthcoming)

25 Pages Posted: 18 Apr 2023 Last revised: 23 Apr 2023

See all articles by Tibisay Morgandi

Tibisay Morgandi

Queen Mary University of London - School of Law

Lorand Bartels

University of Cambridge - Faculty of Law

Date Written: March 30, 2023

Abstract

The Energy Charter Treaty was concluded in 1994 on the assumption that fossil fuels could continue to be used for the foreseeable future. This article examines how ECT contracting parties can now withdraw from this treaty for climate change reasons without being subject to its 'sunset' clause, which protects existing investments for 20 years. It evaluates several strategies, including amendment and inter se agreements, and withdrawal on the basis of a fundamental change of circumstances (rebus sic stantibus). That fundamental change is not climate change itself, which was foreseen in 1994. It is the fact that, as recently stated by the IPCC, fossil fuels now need urgently to be abandoned, resulting in significant stranded assets. This was then unforeseen and radically transforms the extent of the ECT’s obligation to continue to protect existing fossil fuel investments for another 20 years. The article finally considers the implications of such a withdrawal for remaining contracting parties under Article 70 VCLT.

Keywords: Energy Charter Treaty, sunset clause, law of treaties, fundamental change of circumstances, rebus sic stantibus, climate change, stranded assets, fossil fuels, inter se agreements

JEL Classification: K33

Suggested Citation

Morgandi, Tibisay and Bartels, Lorand, Exiting the Energy Charter Treaty under the Law of Treaties (March 30, 2023). (2023) 34 King's Law Journal (forthcoming), Available at SSRN: https://ssrn.com/abstract=4411103 or http://dx.doi.org/10.2139/ssrn.4411103

Tibisay Morgandi (Contact Author)

Queen Mary University of London - School of Law ( email )

67-69 Lincoln's Inn Fields
London, London WC2A 3JB
United Kingdom

Lorand Bartels

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

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