Energy charter treaty arbitration (investor-state) in the Asia-Pacific context: an overview

The international arbitration provision (Art.26) of the Energy Charter Treaty (ECT) is considered to be one of the ‘‘four pillars’’ of the Treaty. The ECT provides for three different principal regimes of dispute settlement: * investor-to-state arbitration (Art.26); * state-to-state arbitration (Art.27); * a GATT-like dispute settlement mechanism for trade disputes. The reason why we are concerned here only with the first type is that its adoption in a prospective regional energy charter in the Asia-Pacific will be problematic given the distinct cultural background, particularly in many Asian countries. Article 26 ECT, entitled ‘‘Settlement of Disputes between an Investor and a Contracting Party’’ , provides for compulsory arbitration at the option of foreign investors against governments for an alleged breach of an obligation of the latter under Pt III ECT which concerns the promotion and protection of investment.