Case Research On Fair And Equitable Treatment Under Energy Charter Treaty

Since the final award was given by Yukos Tribunal, which held that Russian has breached the Energy Charter Treaty because of malicious expropriation, and ordered Russian to pay no less than USD 50 billion in damages. This award is the highest known award by far in the history of international investment arbitration, dramatically influenced international investment law and energy area. Also, over time, the Energy Charter Treaty surpassed the North America Free Trade Agreement as the most frequently invoked International Investment Arbitrations in 2014. Though our country is not signature of Energy Charter Treaty, we always pays close attention to it and being as one of the Observers to the Charter. Because of the big global impact of Yukos case and the increasing concerns to the Energy Charter Treaty itself, the Energy Charter is going to open the negotiation in 2015, for drawing up a new “Energy Charter Treaty” to include more countries as signature states and to meet theinvestment interests of more countries in energy area. In order to gain the initiative in this new negotiation, we need to enhance the understanding of Energy Charter Treaty at this point. Especially when the research of Energy Charter Treaty is mainly on procedural issues, to fill the blank of substantive issues of Energy Charter Treaty have more realistic meaning in drawing up energy investment treaties and self-improvement. Thus this essay chooses to analyze fair and equitable treatment, one of the most debatable substantive issues of Energy Charter Treaty as well as international investment law. The essay will be based on case analysis, to deepen the research of fair and equitable treatment under Energy Charter treaty.Except the preamble and conclusion, this essay is divided into three parts. The first part is to analyze 5 typical international arbitration awards concerning fair and equitable treatment under Energy Charter Treaty, including Yukos case. In every case review, the main disputing issues will be gone through, and the pros and cons of every arbitration awards will be discovered and discussed. Then the shortcomings of these arbitration practices concern Energy Charter Treaty are concluded, as well as the dilemmas of applying fair and equitable treatment. The dilemmas are the conflicting ‘equating approach’ and ‘plain meaning approach’ on the meaning of fair and equitable treatment, and which elements established the fair and equitable treatment.Based on the above dilemmas, the second part will discuss those issues thoroughly in academic view and will find out the merits and demerits of fair and equitabletreatment under Energy Charter Treaty. Generally, because of inner disadvantage of ‘equating approach’ and ‘plain meaning approach’, these two ideas are not suitable for fair and equitable treatment under Energy Charter Treaty. Another more systematic and more fundamental approach needs to be addressed. As to the other dilemma, the conflicting ideas about which elements to choose in proving fair and equitable treatment under Energy Charter Treaty, depends more on the will of signature states themselves, the balancing of all interests involved, and the real situations. The most important is the tribunals should not interpret broadly without concerning the actual texts in the treaties.The last part is about enlightenment. Basing on the circumstances of fair and equitable treatment clauses in our treaties, some demerits are easily found. Comparing those with the pros and cons of fair and equitable treatment under Energy Charter Treaty, also taking special situations of our country into consideration, then comes with four suggestions to perfect fair and equitable treatment clause.