In the ongoing dispute over investment protection proceedings based on the Energy Charter (ECT), the European Court of Justice (ECJ) created facts on Thursday.

In a legal dispute between the Republic of Moldova and a Ukrainian energy company, the judges declared that the international agreement between EU member states is said to be ineffective (Case C-741/19).

Marcus Jung

Editor in business.

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In doing so, the Court of Justice is removing the basis for their high-volume disputes from many of the 55 ECT proceedings which, according to the Brussels-based Secretariat of the Energy Charter, are pending.

The ECJ is thus following its line of the “Achmea” ruling of 2018. The ruling resulted in the termination of many bilateral investment agreements between EU member states, which until then had often been the basis for arbitration proceedings.

The ECT offered companies a way out: In the past few months, other investors from an EU member state have initiated arbitration proceedings against an EU state, with the claims of the energy companies RWE and Uniper against the Netherlands' withdrawal from coal-fired power generation being prominent.

The decision on Thursday described Anna Cavazzini, spokeswoman for the Greens for investment policy, as "trend-setting" to limit the impact of the climate-damaging Energy Charter Treaty. “Unfortunately, however, arbitrators tend to simply ignore the European Court of Justice. We therefore need a rock-solid decision by the Council to implement this judgment and thus avoid further cases between the member states. "