The Achmea Judgment and the Applicability of the Energy Charter Treaty in Intra-EU Investment Arbitration

The Energy Charter Treaty is the most frequently used investment treaty worldwide to launch investment arbitration against host states. The vast majority of disputes is of intra-European Union nature in that they involve an EU investor as claimant and an European Union member state as respondent. The recent Achmea judgment of the Court of Justice of the European Union may thus have ramifications for the Energy Charter Treaty. The judgment has triggered a heated legal and political debate within the European Union over the future of intra-European Union investment arbitration. In the context of this debate, the European Commission claimed that the application of the Energy Charter Treaty in intra-European Union investment disputes is based on an incorrect interpretation of this treaty. This article critically assesses the Commission’s statement by evaluating the travaux préparatoires of the Energy Charter Treaty as a supplementary means of interpretation. It finds that the European Union member states and the European Commission in all likelihood opted for a mixed ratification for legal reasons rather than to ensure its intra-European Union applicability. Indeed, the EU initially pushed for a disconnection clause to prevent the application of the Energy Charter Treaty in intra-European Union relations but dropped this request during the negotiations. At least from a historical perspective then, the Commission’s claim that the Energy Charter Treaty is not meant to apply in intra-European Union relations is inaccurate in that the European Union consciously accepted this possibility.