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12 July 2024 / James Rogers , Jonathan P Cowe
Issue: 8079 / Categories: Features , International , Environment
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Leaving the ECT: bad for investors, wrong for the climate?

James Rogers & Jonathan P Cowe warn of the unintended consequences of leaving the Energy Charter Treaty
  • Explores the ramifications of the UK and EU’s decision to withdraw from the Energy Charter Treaty.
  • Argues withdrawal removes important legal protections for investments in the energy sector, deterring investment in renewables.

The Energy Charter Treaty (ECT) is an international multilateral agreement established in the 1990s to protect foreign investments in the energy sector. The treaty’s primary purpose is to ensure a stable and transparent investment environment by requiring member states to uphold principles of fair and equitable treatment of investments. It also prohibits the expropriation of investments without prompt compensation and includes a mechanism for investors to seek legal redress for breaches of these obligations via international arbitration. These protections cover all energy-related investments, from fossil fuels to renewable energy projects.

The treaty was a product of the 1990s wave of globalisation and efforts to facilitate East-West trade in energy, particularly oil and gas. Signatories to the ECT included the EU, its member states, the UK, Japan and

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MOVERS & SHAKERS

Hogan Lovells—Lisa Quelch

Hogan Lovells—Lisa Quelch

Partner hire strengthens global infrastructure and energy financing practice

Sherrards—Jan Kunstyr

Sherrards—Jan Kunstyr

Legal director bolsters international expertise in dispute resolution team

Muckle LLP—Stacey Brown

Muckle LLP—Stacey Brown

Corporate governance and company law specialist joins the team

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HERBERT SMITH STAFF PENSION SCHEME (THE “SCHEME”)

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