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Energy Charter Treaty cannot be used in intra-EU disputes, rules top court
(EurActiv, 3 Sep 2021) An international treaty used by polluting energy companies to claim compensation from governments who thwart their investments was ruled incompatible with EU law by the Court of Justice of the European Union on Thursday (2 September).
The Energy Charter Treaty allows companies to sue foreign countries over decisions that affect their energy investments. Recently, it has been leveraged against countries like the Netherlands over its coal phase out.
But on Thursday Europe’s top court ruled that the treaty cannot be used in lawsuits between EU countries because the process undermines the role of EU courts.
The ruling puts into question the legality of ongoing claims, like those against the Netherlands.
“Legally it’s the end of the Energy Charter Treaty,” ClientEarth lawyer Amandine Van Den Berghe told EURACTIV.
According to the Court, “the preservation of the autonomy and specific character of EU law precludes the Energy Charter Treaty from being able to impose the same obligations on the Member States among themselves.”
Under the treaty, companies can attempt to claim millions of euros in compensation at the expense of taxpayers through a private arbitration mechanism called an investor-state dispute settlement (ISDS).
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EurActiv, 3 Sep 2021: Energy Charter Treaty cannot be used in intra-EU disputes, rules top court
