1 Introduction

Abstract

This introductory chapter provides a background of the Energy Charter Treaty, which entered into force on April 16, 1998. The ECT is a unique international instrument which covers the promotion and protection of investments, trade in energy, transit in the energy sector, environmental aspects, as well as the settlement of disputes under the Treaty. It was negotiated and drafted under considerable time pressure by a large number of States and what is now the European Union. Nevertheless, the ECT was not negotiated and drafted in a legal vacuum. Other relevant international instruments were there for the negotiators to take account of and to be guided by as they deemed appropriate. As far as investment protection is concerned, there were in place several thousands of bilateral investment protection treaties (BITs) providing for the protection of foreign investment in a manner very similar to the corresponding provisions which eventually found their way into the ECT. With respect to international trade, the General Agreement on Tariffs and Trade (GATT) was in force when the ECT negotiations commenced. It was eventually replaced by the World Trade Organization (WTO) in 1995. The present legal commentary on the ECT will not discuss general aspects of these two fields—international investment law and international trade law—in detail. Rather, an attempt has been made to limit the discussion of such general aspects—and of arbitral awards relating thereto—which are relevant for the ECT-provisions in question.