Ending International Investment Agreements: Russia's Withdrawal from Participation in the Energy Charter Treaty

Abstract

When states withdraw from bilateral investment treaties or denounce multilateral treaties related to foreign investment, a range of intersecting questions arise in domestic and international law. Recent developments have demonstrated potential incongruities between domestic and international approaches to investment protection, including as regards the effectiveness of withdrawal and the implications for existing investments. This essay reflects on international and domestic disputes involving the withdrawal of the Russian Federation from participation in the Energy Charter Treaty (ECT) to highlight these interactions. These issues have become particularly pertinent today because more than 1,500 international investment agreements (IIAs) are nearing expiry of their initial term, providing an opportunity for termination. Moreover, some states have begun to terminate or denounce investment treaties, while many more are engaging in a process of renegotiation and reform. The Russian case study also highlights the potentially far-reaching effects of a state simply signing a treaty, even many years after the state has expressed its decision to withdraw from it, and notwithstanding tensions with the domestic legal framework.