The impact of the moderization of the energy charter treaty on investment dispute settlement

Energy is vital for society and economy both at the level of national states and at the level of a union of states such as the European Union. The need for legal protection of energy investments, which are an important building block for the development of states, has become inevitable for both the investor and the State. As a solution to this need, international investment law has been developed for the protection of energy investments. Within this field, energy investments, which constitute the majority of investment arbitration cases, are regulated by a separate treaty, the Energy Charter Treaty. This Treaty, as a multilateral investment treaty, is interpreted and applied through its provisions regulating energy policy and the investment dispute settlement mechanisms it contains. Over time, many provisions of the Treaty in terms of investment arbitration, including cases arising from energy investment disputes, have been criticized for not meeting the requirements of the era and not adapting to climate policy measures. In this context, European Union countries terminated bilateral investment treaties among themselves and subsequently decided to withdraw from the Energy Charter Treaty. At this point, there was a need to develop new approaches, including the modernization of the Treaty. Thus, the modernization process necessitated the readjustment of the Treaty. Within the scope of the thesis, the events that necessitated the modernization of the Treaty and in particular the criticisms of the investment arbitration system will be focused on, and then, after the European Union's decision to withdraw from the Treaty due to the system's shortcomings, the current situation and possible future scenarios will be evaluated and the impact of all these developments on the investment dispute resolution process will be analyzed.