Energy Charter Treaty

What is the Energy Charter Treaty?

The Energy Charter Treaty (ECT) is an international agreement from the mid-1990s. It currently applies to 48 countries stretching from Western Europe through Central Asia to Japan, plus the EU and the European Atomic Energy Community. It grants corporations in the energy sector enormous power to sue states at international investment tribunals for billions of dollars, for example, if a government decides to stop new oil or gas pipelines or to phase out coal.

Negotiations for this treaty mostly took place away from the public eye. This means the ECT has so far largely escaped the global storm of opposition which has otherwise hit investor-state dispute settlement in the past decade. Now many more countries in Africa and the Middle East, Asia, and Latin America are in the process of joining the treaty, often without any public debate.

Full ReportAll information on this website has been extracted from the report “One treaty to rule them all”. All references are available in the full report.

“The Energy Charter Treaty offers unparalleled opportunities for investors in the energy sector to protect their foreign investments and enforce those protections through international arbitration.”

Lawyers at investment arbitration law firm Skadden Arps Slate Meagher & Flom

The chronology of an ECT investment arbitration


How has the ECT been used
in the first 20 years?

An explosion of cases

No other international trade or investment agreement in the world has triggered more investor-state lawsuits than the Energy Charter Treaty. And the number of claims has exploded in recent years. While just 19 cases were registered during the first 10 years of the agreement (1998-2008), 75 investor lawsuits were filed in the last five years alone (2013-2017). This trend is likely to continue.


States under attack - A legal nightmare for East and West

While in the first 15 years of the agreement 89% of ECT-lawsuits hit states in Central and Eastern Europe, and Central Asia, between 2013 and 2017, 64% of the investor claims filed were against countries in Western Europe.

“Investment treaties were designed to protect European investments abroad. But now they’ve come back to bite Europe.”

Investment arbitration lawyer Mahnaz Malik

The investors suing – Western European companies cashing in

Companies and individuals registered in the Netherlands, Germany, Luxembourg, and the UK, and in the tax haven Cyprus, make up 60% of the 150 investors involved in known claims by the end of 2017.


The ECT - a powerful weapon for mailbox companies

Thanks to the ECT’s overly broad definition of “investor” and “investment”, many of the companies suing under the ECT are mere mailbox companies (firms with hardly any employees in those countries but used by large corporations to shift profits and avoid paying taxes).

An extraordinary 23 out of the 24 supposedly ‘Dutch’ investors who led ECT-lawsuits by the end of 2017 are such mailbox companies. They include Khan Netherlands (used by Canadian mining company Khan Resources to sue Mongolia even though Canada is not even a party to the ECT), and Isolux Infrastructure Netherlands and Charanne (both used by Spanish businessmen Luis Delso and José Gomis, two of the richest Spaniards, to sue Spain).

ECT-abuse by mailbox companies


23 out of 24 ECT cases filed by alleged “Dutch” investors are from mere mailbox companies.

“The ECT has been on the radar screen of “treaty shoppers” for some time.”

Arbitration lawyer Paul M. Blyschak

The ECT is increasingly being used by speculative financial investors such as portfolio investors and holding companies. In 88 per cent of lawsuits over cuts to support schemes for renewable energy in Spain, the claimant is not a renewable energy firm, but an equity fund or other type of financial investor, often with links to the coal, oil, gas, and nuclear industries. Several of the funds only invested when Spain was already in full-blown economic crisis mode and some changes to the support schemes had already been made (which the funds later argued undermined their profit expectations). Some investors view the ECT not only as an insurance policy, but as an additional source of profit.

ECT claims are dominated by financial investors


… of all know ECT lawsuits were filed by private equity funds or other types of financial investors.


… of the 40 lawsuits over cuts to support schemes for renewables in Spain were filed by financial investors, not renewable energy firms.

Investors win in the majority of cases

By the end of 2017 a large chunk of known ECT cases – 59% remained undecided. But the majority (61%) of resolved lawsuits have favoured the investor.


More and more money is at stake for states and taxpayers

There are 16 ECT suits in which investors – mostly large corporations or very wealthy individuals – sued for US$1 billion or more in damages.

ECT case Energy sector Type of investor Money claimed (US$)
Hulley Enterprises v. Russia Oil Six Russian oligarchs 93 billion
Veteran Petroleum v. Russia Oil Six Russian oligarchs 16 billion
Yukos Capital v. Russia Oil Six Russian oligarchs 13 billion
Libananco v. Turkey Hydropower Affiliate of one of Turkey’s once richest families (Uzan) 10 billion
Vattenfall v. Germany (II) Nuclear One of Europe’s largest utility companies 5.1 billion
Littop v. Ukraine Oil & gas Affiliated with Ukrainian billionaire Igor Kolomoisky 5 billion
Yukos Universal v. Russia Oil Six Russian oligarchs 4.6 billion
Cementownia v. Turkey (I) Hydropower Affiliate of one of Turkey’s once richest families (Uzan) 4.6 billion
Europe Cement v. Turkey Hydropower Affiliate of one of Turkey’s once richest families (Uzan) 3.8 billion
Cem Uzan v. Turkey Hydropower Turkish millionaire and member of one of Turkey’s once richest families (Uzan) 3.5 billion
Ascom and Stati v. Kazakhstan Oil (& gas) Anatole Stati (who sued with his son and some of their firms) was Moldova’s richest man when he filed the case 2.7 billion
PV Investors v. Spain Solar Together, the investors (which include Dutch mailbox firm of US-based Fortune 200 company AES) manage over US$30 billion on behalf of other funds and investors 2.6 billion
Vattenfall v. Germany (I) Coal One of Europe’s largest utility companies 1.4 billion
AES v. Kazakhstan Hydropower & coal US-based Fortune 200 company 1.3 billion
CSP Equity Investment v. Spain Solar Luxemburg-registered subsidiary of Abengoa, one of Spain’s richest companies when the case was filed 1.1 billion
EGS v. Bosnia and Herzegovina Coal & thermal power Unclear. Slovenian state owned firm without employees. 1 billion

“This is the public’s money at stake.... The person paying for it isn’t big business... or anyone who could afford it, no it’s the poor man in the streets.”

Arbitration lawyer

ECT cases pending at the end of 2017

i.e. claims which could still be won – have a collective monetary value of US$35 billion. The staggering price tags of ECT lawsuits show the potentially disastrous impacts they can have on public budgets.

Combined value of ongoing ECT cases (which could be won or lost) at the end of 2017Estimated annual amount of money needed for Africa to adapt to climate change

Governments have been ordered or agreed to pay more than US$51.2 billion in damages from the public purse

Country Known financial liability in ECT cases (US$) Unhealthy financial implications at the time of the award
Russia 50 billion 20 per cent of Russia’s total annual state budget or the equivalent of the public health spending for 67,358,211 people, nearly half of Russia’s population.
Kazakhstan 520 million Public health spending for 1,057,125 people
Spain 205 million Public health spending for 87,090 people
Albania 136 million Public health spending for 431,883 people
Hungary 133 million Public health spending for 132,075 people
Mongolia 80 million Public health spending for 524,590 people
Moldova 45 million Public education spending for 291,667
Slovenia 22 million Public health spending for 12,418 people
Ukraine 16 million Public health spending for 71,652 people
Georgia 15 million Public health spending for 57,143 people
Latvia 3 million Public health spending for 7,450 people
Kyrgyztan 1 million Public health spending for 27,701 people
Total amount of money governments have been ordered or agreed to pay in damagesAnnual investment needed to provide access to energy for everyone who lacks it globally

Some of the most expensive claims in the history of ISDS include ECT cases such as Vattenfall’s challenge to Germany for over US$5.1 billion as a result of its exit from nuclear power.

The majority of ECT claims are intra-EU disputes, yet sideline EU courts

67 per cent of ECT investor lawsuits were brought by an investor from one EU member state against the government of another member state, claiming large sums of public money arguably not available to them under the EU legal system. In March 2018 the European Court of Justice ruled that intra-EU investor-state proceedings under bilateral investment treaties violate EU law as they sideline EU courts – an argument which could also apply to the ECT.

Nearly half of all known intra-EU investment disputes were launched under the ECT (the others being based on bilateral treaties).


… of all all ECT claims are intra-EU


… of all all known intra-EU investor disputes were filed under the ECT

“The Energy Charter Treaty (ECT) is by far the most often invoked investment treaty in intra-EU relations.”

Lawyer from law firm Stibbe


How corporations can use the Energy Charter Treaty to kill the energy transition

The fossil industry's friend

The ECT is a powerful tool in the hands of big oil, gas, and coal companies to discourage governments from transitioning to clean energy. They have used the ECT and other investment deals to challenge oil drilling bans, the rejection of pipelines, taxes on fossil fuels, and moratoria on and phase-outs of controversial types of energy. Corporations have also used the ECT to bully decision-makers into submission. Vattenfall’s €1.4 billion legal attack on environmental standards for a coal-fired power plant in Germany forced the local government to relax the regulations to settle the case.


… of all ECT cases, which were known at the end of 2012, pertained to oil, gas, or coal


… share of investors who sued via the ECT by the end of 2012 were fossil fuel companies or otherwise involved in dirty energy projects

The ECT can be used to attack governments that aim to reduce energy poverty and make electricity affordable.

Under the ECT Bulgaria and Hungary have already been sued for compensation in the hundreds of millions, in part for curbing big energy’s profits and pushing for lower electricity prices. Investment lawyers are considering similar action against the UK, where the government has announced a cap on energy prices to end rip-off bills.

“Public funds should be used to support the shift to clean energy not to compensate polluters for their lost future revenues when they have not adapted their business model in a timely and responsible way,”

Professor Gus van Harten, Osgoode Hall Law School

The ECT is currently being framed as a solution to global warming. But the treaty is hardly acting as a champion of small-scale and renewable enterprises.

A prime example are the many cases that have challenged cuts to support for renewable energy in Spain. More than half of the known ECT-claims against the country (21 out of 40) involve investors with links to the gas, coal, oil, and nuclear industries.

The dirty secrets of the ‘renewable claims’ against Spain


More than half of the 40 claims have been filed by investors with links to the coal, oil, gas, and nuclear industries.

“Energy transition from fossil fuels to renewables will require states and state entities to reconsider and possibly recalibrate existing license, concession and production sharing agreements, leading to claims by investors.”

Global Arbitration Review magazine

ECT power #1: Dissuading governments from effective climate action


ECT power #2: Protecting existing and pushing new fossil fuel projects


ECT power #3: Locking in polluter subsidies


ECT power #4: Diverting public money needed to fund the energy transition


ECT power #5: Undermining affordable electricity prices


ECT power #6: Locking in the failures of energy privatisations


ECT power #7: Undermining public participation and democratic decision-making


ECT power #8: Endangering a regulatory mega-task



Which countries are about to sign on to the ECT and who is pushing for the treaty’s expansion?

Many countries across the world are about to join the ECT,

threatening to bind them into corporate-friendly energy policies. Jordan, Yemen, Burundi, and Mauritania are most advanced in the accession process (ratifying the ECT internally). Next in line is Pakistan (where investment arbitration is controversial, but which has already been invited to accede to the ECT), followed by a number of countries in different stages of preparing their accession reports (Serbia, Morocco, Swaziland – renamed eSwatini in April 2018 –, Chad, Bangladesh, Cambodia, Colombia, Niger, Gambia, Uganda, Nigeria, and Guatemala). Many more countries have signed the non-binding International Energy Charter political declaration, which is considered the first step towards accession to the legally binding Energy Charter Treaty.


There is an alarming lack of awareness about the ECT’s political and financial risks in the ECT’s potential new signatory states.

Officials from ministries with experience in negotiating investment treaties and defending investor-state arbitrations are largely absent from the process, which is being led by energy ministries. This is worrying as many of these countries already have disastrous experience with investor lawsuits under other investment agreements, which could multiply if they sign on to the ECT. This is reminiscent of the 1990s when developing countries signed heaps of bilateral investment treaties hoping they would bring investment whilst remaining largely unaware of the risks.

“The Energy Charter Secretariat is in expansion mode, wanting to gain access to energy resources in Africa and Asia for its current – mostly developed – country members.”

Nathalie Bernasconi-Osterwalder, International Institute for Sustainable Development (IISD)

The expansion process is aggressively promoted by the ECT Secretariat, the EU, and the arbitration industry,

who are eager to gain access to the rich energy resources in the global South and to expand their own power and profit opportunities. While they downplay or dismiss the risks to states of acceding to the ECT, they promote the agreement as a necessary condition for the attraction of foreign investment, and in particular clean energy investment for all. But there is currently no evidence that the agreement helps to reduce energy poverty and facilitate investment, let alone investment into renewable energy.

“Energy investment would of course take place if there was no Treaty.”

Howard Chase, chairman of the Energy Charter’s Industry Advisory Panel


Who are the ECT profiteers?

A small number of arbitrators dominate ECT decision-making

25 arbitrators have captured the decision-making in 44 per cent of the ECT cases while two-thirds have also acted as legal counsel in other investment treaty disputes. Acting as arbitrator and lawyer in different cases has led to growing concerns over conflicts of interest, particularly because this small group of lawyers have secured extremely corporate-friendly interpretations of the ECT, paving the way for even more expensive claims against states in the future.

Some of the busiest ECT arbitrators with a track record of siding with corporations

Total number of ECT claims Role in ECT claims Law firm What you should know about the arbitrator
Gary Born (US)
9 Exclusively nominated by investors. Wilmer Hale ECT cases against Spain and the Czech Republic boosted his rather recent career as super-arbitrator. A real go-to arbitrator for investors who appointed him in 18 of his total 20 ISDS cases. In the infamous Philip Morris suit over anti-smoking laws in Uruguay, Born was the only arbitrator who sided with the tobacco giant.
Yves Fortier (Canada)
7 Nominated by investors in 3 cases; sat 4 times as President. 20 Essex Street Chambers (2011-) Norton Rose (1992-2011) All concluded ECT cases, which involved Fortier, were investor-wins, including Yukos where he billed a staggering €1.7 million for his services as tribunal chair. For many years Fortier sat on company boards, including those of mining giants Alcan Inc. and Rio Tinto, where he developed a corporate world view.
Charles Poncet (Switzerland)
6 Exclusively nominated by investors Poncet Law(2017-) CMS (2014-2017) ZPG Avocats (1986-2014) A prime example of a corporate lawyer turned arbitrator. ECT cases make up 60 per cent of his arbitrator caseload, but he has also acted as counsel for energy giants like Repsol. He was the investor-appointed arbitrator in the Yukos cases where he billed €1.5 million. This seems to have earned him a pro-investor reputation: when Rockhopper choose Poncet as arbitrator in its ECT challenge against Italy, investors celebrated, saying the claim would now be “a walk in the park” Poncet is also on the board of financial services company London Capital Group.
Stanimir Alexandrov (Bulgaria)
5 Nominated by investors in 4 cases, as President in another. Sidley Austin (2002-17); continues to co-counsel with the firm A prominent “double hatter” and revolving door case. After being Vice Minister for Foreign Affairs and investment treaty negotiator with the Bulgarian Government in the 1990s, he moved to law firm Sidley Austin where he sued countries in ISDS proceedings, acting as lawyer for major corporations like Vivendi, Bechtel, Veolia, Philip Morris, and TransCanada, the pipeline developer that sued the US after the government halted the dirty Keystone XL pipeline. He continues on-the-side-lawyering with Sidley. Many states have questioned his arbitrator independence over different conflicts of interest, including in ECT cases.
Charles Brower (US)
5 Exclusively nominated by investors 20 Essex St Chambers (2005-) White & Case (1961-2005) The “reigning king of international arbitrators” and the ultimate pro-corporate arbitrator who sat in 45 known ISDS tribunals, but was never nominated by a state. He is well-known for his investor-friendly interpretation of vaguely worded treaty clauses and as being an ardent defender of the status quo in investment arbitration. He opposes reforms to ISDS, for example, to improve the independence of the system, and has attacked reform-oriented colleagues for “bringing termites into our wooden house of investor state dispute settlement”.

Five elite law firms have been involved in nearly half of all known ECT investor lawsuits

Law firms have been key drivers of the surge in ECT cases, relentlessly advertising the treaty’s vast litigation options to their corporate clients, encouraging them to sue countries.

The 10 busiest law firms in known ECT claims

Law firm Total number of ECT cases Role in ECT claims What you should know about the firm
Allen & Overy (UK) 16 Works for investors (with very few exceptions). Brought the first-ever ECT-based arbitration in 2001 (of US energy giant AES vs. Hungary). Today suing Spain is their main asset: 10 out of the firm’s 16 total known ECT engagements are against Spain. The firm also represented AES when it challenged Hungarys attempt to curb excessive profits of energy generators in 2007.
King & Spalding (US) 15 Has only represented investors. If there is one Big Oil law firm, this is it. But in the ECT world they are mainly engaged in the renewable claims against Spain and Italy. Also representing UK oil company Rockhopper in a claim that hit Italy after its exit from the ECT, challenging a ban on offshore oil drilling.
Arnold Porter Kaye Scholer (US) 10 Has only represented states, but acts on both sides in ISDS more generally. No firm has been appointed more often by states in ECT disputes. Several of its lawyers are on the ICSID list of arbitrators (and can be picked as tribunal presidents when parties can’t agree).
Freshfields Bruckhaus Deringer (UK) 10 Represented mostly investors. The world’s busiest ISDS firm with involvement in 45 investment treaty cases in April 2018. Represents EVN challenging Bulgaria’s decision to lower escalating energy prices.
Weil Gotshal & Manges (US) 9 Represented mostly states, but acts on both sides in ISDS disputes more generally. Represents the Czech Republic in its six ECT cases (together with Arnold Porter). Also acted as counsel for Czech energy behemoth ČEZ, which won a €100 million settlement after a failed energy privatisation in Albania.
Cuatrecasas, Gonçalves Pereira (ES) 8 Has only represented investors. All its arbitrations are against Spain, including the first known claims by Japanese investors. The top lawyer at the ECT Secretariat joined the institution after nearly 13 years with Cuatrecasas – a notable revolving door case.
White & Case (US) 7 Represented mostly states, but acts on both sides in ISDS disputes more generally. Another veteran ISDS law firm with over 100 cases which it handled at ICSID in total and 35 ongoing investor-state lawsuits in April 2018.
Latham & Watkins (US) 7 Has represented both states & investors. The world’s second richest law firm by revenue has a knack for Spanish elites: amongst others, it represented Spanish businessmen Luis Delso and José Gomis in their suits against Spain while hiring Spain’s former Prime Minister José María Aznar as political advisor in early 2018.
ArBLit – Radicati di Brozolo Sabatini (IT) 6 Has only represented investors. A small boutique with a near exclusive focus on international arbitration. Nearly all cases relate to changes in the Czech renewables sector.
Shearman & Sterling (US) 6 Has only represented investors. The US$1,065 per hour lawyers from the Yukos mega arbitrations. Elite arbitrator Emmanuel Gaillard is the firm’s figurehead, attracting vast amounts of work as counsel in ISDS cases.

Third party funders are becoming more and more established in ECT arbitrations.

These investment funds finance the legal costs in investor-state disputes in exchange for a share in any granted award or settlement. This is likely to further fuel the boom in arbitrations, increase costs for cash-strapped governments, and make them more likely to cave in to corporate demands.

“Third party funding is poorly regulated internationally. The identity of third party funders 
is rarely public information and is sometimes even withheld from countries being sued.”

Trade Justice Movement UK

Polluting companies and for-profit investment lawyers enjoy privileged access to the ECT Secretariat,

which puts into question the latter’s neutrality and ability to act in the interest of the ECT’s signatory states as well as a transition off fossil fuels.

More than 80 per cent of the companies on the ECT’s Industry Advisory Panel make money with oil, gas, and coal.

Members of the ECT Industry Advisory Panel

Members of the ECT Industry Advisory Panel

(Click on image to view)

Two thirds of the lawyers on the ECT’s Legal Advisory Task Force have a financial stake in investor lawsuits against states.

Members of the ECT Legal Advisory Task Force


Both advisory groups are given ample opportunities to influence the Secretariat, ECT member states, and the wider Charter process in their own interest. Several high-ranking officials at the ECT Secretariat were with arbitration law firms before and/or after they worked at the Secretariat.


ECT emblematic cases

Vattenfall v. Germany II

Pitting parliament against nuclear profits


Rockhopper v. Italy

How an oil company could make millions with wells it never built


Yukos v. Russia cases

Bonanza for lawyers and investors!


EVN, Energo-Pro and ČEZ v. Bulgaria

Corporations versus affordable electricity


Investors v. Spain

How Spain might have to pay billions for imaginary corporate profits



Reasons to leave or never join ECT

After 20 years of the ECT in action, it is clear that the dangers of its foreign investor rights outweigh any potential gains that states might have expected from signing the agreement. In summary, here are eight key reasons for leaving – or never joining – the ECT.

Reason #1: The ECT is a tool for big business to make governments pay when they regulate to fight climate change, make energy affordable, and protect other public interests. It has been used to attack environmental restrictions on dirty power plants, bans on climate-wrecking new fossil fuel projects, cuts to soaring electricity prices, rectifications to failed energy privatisations – and the list goes on.

Reason #2: Under the ECT governments can be forced to pay out billions in taxpayers’ money to compensate corporations, including for missed future profits that they could have earned in theory. The value of the ECT lawsuits pending at the end of 2017 – US$35 billion – exceeds the GDP of many countries and the estimated annual amount needed for Africa to adapt to climate change. Due to the opacity of ECT arbitrations, the actual figure is likely to be much higher.

Reason #3: The ECT is an instrument to undermine democracy and bully decision-makers, acting as a brake to desirable policy-making. This is particularly worrying for the rapidly-needed transition off fossil fuels and to wind, wave, and solar energy, which requires bold regulations by governments and will curtail the profits of some of the world’s largest oil, gas, and coal corporations.

Reason #4: Investor-state arbitration under the ECT is highly flawed. It is not fair and independent, but dominated by a self-serving, multi-million dollar industry of elite law firms, arbitrators, and speculative funds. At the expense of states and taxpayers, they have used their power to secure extremely corporate-friendly interpretations of the ECT and a steady flow of costly lawsuits.

Reason #5: The ECT’s investor privileges do not bring the economic benefits claimed for them. There is currently no evidence that the agreement helps to reduce energy poverty and facilitate investment, let alone investment into renewable energy. The ECT can even be used to undermine the clean energy transition and measures to guarantee affordable access to electricity for all.

Reason #6: The rules for settling investor disputes under the ECT undermine domestic legal systems and are at odds with the rule of law as they discriminate, being an exclusive legal channel for foreign investors alone. Following a recent ruling by the EU’s highest court, it is questionable whether the ECT’s investor privileges are even compatible with EU law.

Reason #7: It is highly unlikely that the ECT modernisation process, which started in 2017 will change the fundamental flaws of the agreement’s parallel justice system for corporations. Even minor reforms such as making investor lawsuits less secretive seem to be controversial within the ECT membership.

Reason #8: Due to its wide geographical reach and the near limitless rights it grants to investors in the energy sector, the ECT is arguably more dangerous for the public purse, public interest policies and democracy than other international investment treaties. Globally, no other agreement has triggered more investor attacks against states than the ECT.

All information on this website has been extracted from the report “One Treaty to rule them all: The ever-expanding Energy Charter Treaty and the power it gives corporations to halt the energy transition,” written by Pia Eberhardt, Cecilia Olivet and Lavinia Steinfort.

For more details and sources, read the full report

Contact the authors:

Pia Eberhardt: Pia[at]

Cecilia Olivet: ceciliaolivet[at]

The website was produced by

Corporate Europe Observatory

Corporate Europe Observatory (CEO), a research and campaign group working to expose and challenge the disproportionate influence that corporations and their lobbyists exert over EU policy-making.

Transnational Institute (TNI)

The Transnational Institute (TNI), an international research and advocacy institute committed to building a just, democratic and sustainable planet.