Prof. Dr. Nikos Lavranos’ Post

Read the first reactions to the declaration of Hungary on the intra-EU application of the Energy Charter Treaty to gain a better understanding why it is often worthwhile to persist even against the strongest tide and choose to respect international and EU law. #ruleoflaw #Komstroy #Hungary #ECT

Controversies surrounding the ECT are still ongoing Recently, the EU Council adopted a controversial position that the Treaty does not apply to intra-EU disputes. Prof Lavanos gives an in-depth legal analysis arguing that only Hungary (paradoxically though) provides a balanced position on the topic. A visible trend where interpretation of laws and Treaties is refined to a political purpose isn't a sign of progress. First, is a reminder about non-liberal practice applied mainly by communist regimes (where all freedoms for example were conditioned to a purpose, 'building communism'). Second, it will give ways to current illiberal forces to criticise the EU stance.

🇭🇺 #Hungary is making headlines! ✨ In response to the Declaration by 26 EU Member States and the EU aiming to render the #ECT inapplicable in intra-EU disputes retroactively, Hungary has issued a separate Declaration. Hungary emphasizes that EU Member States must respect public international law, and asserts that the disapplication of the ECT in intra-EU disputes can only be achieved in line with the #VCLT. Kudos to Szabolcs Nagy, Trade and Investment diplomat at the Permanent Representation of Hungary to the EU, for this achievement. Read the analysis of this development on #GlobalArbitrationReview and #KluwerArbitrationBlog. A big thank you to GAR and KAB for shedding light on this important development, which holds significant implications for Hungary, the ECT, and the intricate interplay between EU law and public international law. #InternationalLaw #EULaw #ECT #Hungary #PublicInternationalLaw https://lnkd.in/em-YkuVV

Read our article “EU Member States’ Diverging Declarations on the Intra-EU Applicability of the ECT” which reveals the reality behind the curtains on the modernization of the Energy Charter Treaty, and deep dive into the mysteries of the ECT regulating relations between EU Member States. This case is particularly important to me, always interested in the relationship between international law and EU law. The “strict observance and the development of international law” is a foundation laid down in the EU Treaties. If we accept that international law is binding on the Union, we also have to acknowledge that it cannot endanger the legal system formed by the treaties and the constitutional principles of EU law. Therefore to the extent that these international agreements are incompatible with the Treaties, the Member States concerned shall take the appropriate steps to eliminate the established incompatibility. However, these steps must also be in line with the basic principles of international and EU law, such as pacta sunt servanda or the rule of law. The purpose of the unilateral declaration of Hungary is to preserve legal certainty and the rule of law, even if it is against serious headwinds. I am grateful to Veronika Korom for her support and counsel during the whole process. #ruleoflaw #pactasuntservanda #Komstroy #Hungary #ECT https://lnkd.in/dkcUYji8

🇪🇺 The #European Commission has launched #infringement proceedings against #Hungary after the latter refused to endorse the EU's #Declaration on #Komstroy judgment and the Energy Charter Treaty (#ECT). The Declaration seeks to invalidate the ECT’s #arbitration and sunset clauses retroactively. The infringement proceedings mark a critical juncture in the debate over the EU's stance on intra-EU investment arbitrations under the Energy Charter Treaty (ECT). While the Commission’s position may align with EU law, it contradicts principles of international law, risking the EU's credibility as a global legal actor. In our latest article penned by Maria Paschou, Dániel Dózsa, and Dalibor Valincic, we explore the implications of the EU's efforts to invalidate the ECT's arbitration and sunset clauses, the legal tensions with Hungary, and the broader ramifications for international law. 👇 Dive into our analysis to see how the EU's legal strategies could undermine the very principles it aims to uphold. #InternationalLaw #EUlaw #InvestmentArbitration

Please see our analysis co-authored with Szabolcs Nagy on the EU Member States' diverging declarations regarding the intra-EU applicability of the Energy Charter Treaty. While the #Komstroy decision is effective within the framework of EU law, its implementation in the realm of public international law—under which intra-EU ECT tribunals operate pursuant to the ICSID Rules—is only feasible if it complies with the #VCLT. We believe that the Majority ECT Declaration does not comply with the VCLT and is therefore unsuitable for achieving the intra-EU disapplication of the ECT for both pending and future intra-EU ECT arbitrations, and will likely remain without legal effect. In contrast, #Hungary’s separate declaration provides a potential pathway for reconciling EU law with international law, effectively disconnecting the ECT for future disputes. The adoption of the #modernizedECT would represent the most legally robust solution to this issue. With the Energy Charter Conference scheduled for the end of 2024, the adoption of the modernized ECT may become a reality, not least because it offers a solution to the disapplication problem. We are grateful to Maria Fanou and Giovanni Dall'Agnola for the opportunity to publish our analysis on the #KluwerArbitrationBlog and for their valuable advice and support throughout the process. https://lnkd.in/evSxugpb

[#PUBLICATION] Yesterday, the EU Council gave its final green light to the EU’s withdrawal from the #ECT, ending the bloc’s participation in a highly controversial treaty.    This follows the UK’s formal withdrawal, confirmed earlier this week, which will take effect next year in April.   However, as things stand, the ECT will continue to apply between the EU and the UK with respect to pre-existing investments due to a 20-year sunset clause. But neither the EU nor the UK has taken any steps yet to de-activate this clause in their relations (and with any other willing ECT parties), which undermines the effectiveness of a climate-driven withdrawal.   In an article recently published in the ICSID Review, our lawyers Clémentine Baldon, Rosanne Craveia and Nikos Braoudakis argue that there are no obstacles under international treaty law to the neutralisation of the ECT’s sunset clause as between a restricted set of parties. #exitECT

The #EuropeanCommission decided to open an #infringement procedure by sending a letter of formal notice to #Hungary (INFR(2024)2206) for undermining the Union's position on the international stage with regard to the prohibition of intra-EU investor-State arbitrations related to the Energy Charter Treaty (#ECT), and for contradicting the case law of the Court of Justice of the European Union. #CJEU On 26 June 2024, the Union and 26 Member States signed a Declaration on the legal consequences of the #Komstroy #judgment, in which the Court of Justice held that the arbitration clause of the ECT is not applicable to #disputes between a Member State and an investor from another Member State concerning an #investment made by the latter in the first Member State. Hungary adopted a unilateral declaration claiming that the Komstroy judgment only applies for future intra-EU investor-State arbitration proceedings. Its unilateral declaration further claims that this effect for the future will only start once the Energy Charter Treaty has been amended. The Commission finds that Hungary's unilateral declaration contradicts the decision of the Court of Justice, as well as the Union's position vis-à-vis #arbitration tribunals and courts of third countries. In addition, the Commission finds that by openly expressing a unilateral, different position, Hungary is in breach of the duty of sincere cooperation enshrined in Article 4(3) of the Treaty of the European Union, which requires Member States to abstain from undermining the Union position on the international stage. Furthermore, by contradicting an interpretation given by the Court, Hungary seems to disrespect the final, authoritative and binding nature of judgments of the Court of Justice. These principles are enshrined in Article 19 of the Treaty of the European Union and Article 267 and 344 of the Treaty on the Functioning of the European Union, as well as the general principles of autonomy, primacy, effectiveness, and uniform application of Union law. #TFEU #ISDS

#OnThisDay, 60 years ago today, the landmark Costa/ENEL ruling established the supremacy of EU law over national laws.    The case arose when Flaminio Costa, an Italian lawyer, challenged the nationalisation of the electricity sector by the Italian government, arguing that it violated the EEC Treaty. The ensuing legal battle reached the Court of Justice of the European Union, which ruled that the Treaty of Rome, and thus EU law, took precedence over national laws. This decision taken by the Court of Justice ensured that European Union law would take precedence over conflicting national legislation, reinforcing the legal unity and coherence across member states. The ruling has had far-reaching implications and contributed to the stability and predictability of #EULaw. Learn more about this historic ruling: ▶️ https://europa.eu/!dTTK4x   .......................................... Hilde Hardeman * Paloma Aba Garrote * Valentina Fratto * Luca Panni * Andrew Paton * Joze Strus * Ines Sieder-Bertilsson * Valérie M. Saintot * Anna Samsel van Haasteren * Pablo Pérez Armenteros * Alessio Aresu * Margarida Ortigão Delgado * Peter Csonka * Eirini Galatsanou * pérignon isabelle * Denis BATTA * Vladimira Durisova * Miguel Gil Tertre * Federico Marco * Jeanette Jansen * Amélie Redortier * Enel Group * Razvan Lupulescu * Michele Bologna * Olimpia Vaccarino Aureli * Rachele De Angelis * Flavia Gamberale * College of Europe * TEPSA - Trans European Policy Studies Association

The recent decision of the Swiss Federal Supreme Court has sparked considerable discussion concerning CJEU's earlier approach on handling intra-EU investor state disputes. Karol Macias from our commercial & corporate disputes team takes a closer look at the most important points which the Swiss court noted. 🔍📝 #ISDS #internationalarbitration #intraEUBITs #arbitration #CJEU