Peter Gussone (Becker Büttner Held) presents at the Vienna Forum on European Energy Law, 2014

1. Recent Developments in Energy Arbitration
2nd Vienna Forum on European Energy Law
Lawyer Dr Peter Gussone
Vienna, 14/03/2014

2. 01502-14/2345413
About us
§ BBH has been operating as a law firm since 1991.
§ We are a partnership of lawyers, auditors and tax consultants – with
engineers and further experts in our Becker Büttner Held Consulting AG.
§ A staff of over 500 employees, including more than 250 professionals, are
at your service.
§ We provide advice to more than 3,000 clients.
§ We are the leading law firm for the energy and infrastructure industry.
§ BBH is known as “the” law firm of public utilities, which we really are. But
we are far more than that, in Germany and in Europe.
§ The decentralised utilities, the industry, investors, intermediaries and
political bodies, like the European Commission, the Federal Government,
the Federal States and public corporations and many more appreciate BBH’s
work.

3. 3
Dr Peter Gussone, Rechtsanwalt / Lawyer
§ Born in Cologne in 1976
§ Studies of law, history and politics in Bonn, Lausanne and Cologne
§ Research associate at the Institute for Insurance Law, University of
Cologne
§ Doctoral degree in European Law, University of Cologne
§ Research associate at the Institute for State and Administrative law,
Environmental and European Law, Humboldt University
§ Legal traineeship at the Kammergericht (Higher Regional Court) in Berlin
with stages, i. a., at the Federal Ministry of Justice and the United
Nations High Commissioner for Refugees (UNHCR) in Vienna
§ 2006 to 2008 lawyer at BBH Berlin
§ 2008 to June 2011 specialist advisor at the Federal Cartel Office in Bonn
§ Since July 2011 lawyer at BBH Berlin
§ Wide-ranging publishing and lecturing activities
§ Deputy editor-in-chief of the journal Zeitschrift für das gesamte Recht
der Energiewirtschaft (EnWZ)
Areas of Practice: Cartel and competition law,
water law, energy industry law, public commercial law,
European law, Alternative Dispute Resolution
Dr Peter Gussone
Lawyer
Partner Counsel
Contact:
peter.gussone@bbh-online.de
Tel.: 030/611 28 40-675
14.03.2014 ViennaForum

4. 4
Table of contents
I. Investment protection in the Energy Sector
1. Energy Charter Treaty
2. Institutions (ICSID, EACS)
II. Case-Studies
1. Vattenfall vs. Federal Republic of Germany
2. CEZ vs. Albania
3. Albania vs. CEZ
III. Conclusions
ViennaForum14.03.2014

5. 5
Investment protection under the ECT (I)
§ Energy Charter Treaty signed in 1994
§ Entry into force 16 April 1998, currently 53 signatory
parties
§ Purpose of the ECT
§ Article 2: “to establish a legal framework in order to promote long-
term cooperation in the energy field”
§ Preamble: encourage economic growth through the adoption of
“measures to liberalise investment and trade in energy”
§ Investment Promotion and Protection (Part III, Art. 5
& Arts. 10-17)
§ Art. 10: “… encourage and create stable, equitable, favourable and
transparent conditions (…) to accord at all times (…) fair and equitable
treatment”
ViennaForum14.03.2014

6. 6
Investment protection under the ECT (II)
§ Dispute Settlement, (Part V, Arts. 26, 27 & 29)
§ Cooling-off period: 3 months after the requested
amicable settlement
§ Claimant’s Options:
§ national courts
§ previously agreed dispute settlement procedure
§ treaty arbitration:
§ ICSID
§ ad hoc arbitration under UNCITRAL Rules
§ Stockholm Chamber of Commerce
§ ECT also binding for almost all Member of the Energy
Community (EC); EC-Treaty does not provide for
state-investor dispute resolution clauses
ViennaForum14.03.2014

7. 7
ICSID (International Centre for Settlement of
Investment Disputes)
§ ICSID is an international arbitration institution
which facilitates arbitration and conciliation of legal
disputes between international investors
§ The ICSID is a member of the World Bank Group and
is headquartered in Washington, D.C., United States
§ Recently: 185 cases pending
§ Legal effects of the decision:
§ binding
§ irreversible
§ enforceable
ViennaForum14.03.2014

8. 8
EACS (Energy Arbitration Center Switzerland)
§ The EACS concentrates on alternative dispute
resolution (arbitration, mediation, adjudication) in
the field of energy and resources disputes
§ The primary aim is to provide disputing parties with
an alternative dispute resolution “one-stop shop”
§ Model clauses in accordance with UNCITRAL Rules,
but open for all arbitration rules
§ A highly specialised institution with an open list of
specialised arbitrators in the field of energy law
§ Awards are enforceable internationally, e.g. the New
York Convention 1958
ViennaForum14.03.2014

9. 9
Vattenfall vs. Federal Republic of Germany (I)
§ First legal dispute in 2006 over power plant
Moorburg due to strict environmental specifications
àSettlement
§ Second legal dispute in 2012 over German nuclear
phase-out and German “Kernbrennstoffsteuer”
(nuclear fuel tax): ICSID-Case ARB/12/12
§ Other major German reactor operators had to call on
the national courts (regarding the tax, BBH
represents the Ministry of Finance): both
proceedings are still pending
à ICSID and a national German court decide about the same
subject-matter at the same time
ViennaForum14.03.2014

10. 10
Vattenfall vs. Federal Republic of Germany (II)
§ For Vattenfall as a foreign (Swedish) investor the
international protection of investment rules of the
ECT apply
§ Accusation: due to the nuclear phase-out and the
“Kernbrennstoffsteuer”, Art. 10 ECT has been
violated (expropriation and/or no fair and equitable
treatment)
§ Value of the claim: € 3.7 billion
§ Status of the proceeding: “pending” after new
composition of the tribunal in Feb. 2013
àArbitrator withdrew because of a conflict of interest
ViennaForum14.03.2014

11. 11
CEZ vs. Albania
§ CEZ as a foreign investor acquired a major stake in
Albania’s sole electricity distributor, therefore the
international investment protection rules of the ECT
and a bilateral investment treaty apply
§ Accusation: violation of the ECT and the bilateral
investment treaty by revoking a business licence
§ Value of the claim: € 190 million
§ Status: pending
ViennaForum14.03.2014

12. 12
Albania vs. CEZ
§ Albania is about to file a claim based on an ICC-
clause in the bilateral investment treaty
§ Violation of treaty provisions, in particular of the
maintenance and investment obligations regarding
the power distribution grids
§ Status: filing of compliant most likely in Vienna
ViennaForum14.03.2014

13. 13
Conclusions
§ Arbitration is a leading method for resolving disputes
arising from private commercial agreements
§ With arbitration being the means to solve conflicts
arising from investments in the energy sector based
on investment treaties, states are increasingly
getting involved in such proceedings
§ Does the sole focus on investors’ interests neglect
legitimate public interests?
§ Is there a need for a specialised arbitration institution
in the energy sector?
§ Is there a need for a dispute resolution mechanism in
the Energy Community?
ViennaForum14.03.2014

14. Thank you for your attention!
www.bbh-online.de
www.DerEnergieblog.de
BBH Berlin
Magazinstraße 15-16
10179 Berlin
Tel.: 030 611 28 40 675
Fax: 030 611 28 40 99
bbh@bbh-online.de
BBH Köln
KAP am Südkai
Agrippinawerft 26-30
50678 Köln
Tel.: 0221 6 50 25 0
Fax: 0221 6 50 25 299
bbh@bbh-online.de
BBH Stuttgart
Industriestraße 3
70565 Stuttgart
Tel.: 0711 722 47 0
Fax: 0711 722 47 499
bbh@bbh-online.de
BBH München
Pfeuferstraße 7
81373 München
Tel.: 089 23 11 64 0
Fax: 089 23 11 64 570
bbh@bbh-online.de
BBH Brüssel
Avenue Marnix 28
1000 Brüssel/Belgien
Tel.: +32 2 204 44 00
Fax.: +32 2 204 44 99
bbh@bbh-online.de
BBH Hamburg
Kaiser-Wilhelm-Str. 93
20355 Hamburg
Tel.: 040 341 069 0
Fax: 040 341 069 22
bbh@bbh-online.de
Contact : Lawyer Dr Peter Gussone