Redefining the Relationship Between the Energy Charter Treaty and the Treaty of Functioning of the European Union: From a Normative Conflict to Policy Tension

Investment arbitration in the European Union (EU) is currently experiencing one of its most crucial challenges. At the EU level, there are different voices claiming that the applicability of jurisdictional and substantive investment protections in international agreements to resolve intra-EU disputes is no longer valid. This includes the intra-EU application of one of the most important sectorial international agreements: the Energy Charter Treaty (ECT). The main argument flagged by these voices is the existence of a conflict between the normative content of these international agreements and EU law. Parallel to these criticisms, there has been an unprecedented increase in the EU of intra-EU disputes in the energy sector, most of these brought under the ECT and yet to be decided under international arbitration. However, despite a general perception of an asymbiotic relationship between investment arbitration and the EU legal order, there has been limited evidence of a real normative conflict. In response, taking as an example the intra-EU–ECT cases, this article undertakes a cross-treaty study of the most frequently invoked treaty provisions and principles in the intra-EU–ECT practice. The article aims to provide clearer evidence about the type of relationship that characterizes the ECT and the Treaty on the Functioning of the European Union (TFEU). Contrary to the general perception, the article finds no evidence of a normative conflict between the ECT and the TFEU. The article concludes by redefining the relationship between the ECT and the TFEU as a relationship of policy tension.