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Since the ECT does not include any provision regulating the termination of the treaty, then the consent
of the Parties is necessary.
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As it was mentioned above in Part 4.1.1 the mutual termination of a treaty
has an immediate effect, and unless otherwise agreed by all of the Parties, such mutual termination
does not activate the sunset clause. The activation of a
sunset clause, as is the case of the ECT, takes
place only in the case of unilateral withdrawal.
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For more clarity, and to avoid interpretation conflicts, the Parties may consent to terminate the ECT and
explicitly remove the protective effect of the sunset clause in their termination agreement.
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Hence,
the termination of the ECT will be immediate and complete.
6.3.2.
Termination of the ECT with the adoption of a new Energy Treaty
Another way to achieve the goal of termination of the ECT is through the conclusion of a later treaty.
According to Article 59 of the VCLT, all Parties can terminate a treaty, if a later treaty with the same
subject matter is concluded by them.
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In doing so, either the intention
of all Parties to terminate
the old treaty must be clear, for example by stating in the later treaty that the previous treaty has
been terminated, or that the provisions of the later treaty are so far incompatible with those of the
earlier one.
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To exemplify this, when Australia and Hong Kong replaced their BIT of 1993 with a new Investment
Agreement in 2019 they made the following configuration: In Article 40 paragraph 2 of the later treaty,
they regulated the relationship between the old BIT and the new Agreement and explicitly referred to
the 15-year sunset clause in the terminated BIT. In particular, the new provision prescribed that ‘The
Agreement between the Government of Australia and the Government of Hong Kong for the
Promotion and Protection of Investments, done at Hong Kong on September 15, 1993 (IPPA) shall
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Had the ECT been subject to an unconditional sunset clause like the 50-year sunset clause of the ECSC,
the termination
would have been a more straightforward process.
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However, Voon, Mitchell, and Munro suggest that ‘in terminating the treaty by consent, the Parties would need to
expressly indicate that the [sunset] clause and any rights and obligations conferred by it are extinguishedTania Voon,
Andrew Mitchell, James Munro, Parting Ways: The Impact of Mutual Termination of Investment Treaties on Investor
Rights’ (2014) 29 ICSID Review 451, 454. Thus there is a need for an express reference to the extinction of the sunset
clause. Their argument is based on Article 70 of the VCLT, which provides that the termination ‘does not affect any right .
. . created through the execution of the treaty prior to its termination’See United Nations, Vienna Convention on the Law
of Treaties, 23 May 1969, United Nations, Treaty Series, vol. 1155, Article 70. However, the ICJ
in the case Northern
Cameroons set out the consequences of termination of the Trusteeship Agreement stating that: ‘Looking at the situation
brought about by the termination of the Trusteeship Agreement from the point of view of a Member of the United
Nations, other than the Administering Authority itself, it is clear that any rights which may have been granted by the
Articles of the Trusteeship Agreement to other Members of the United Nations or their nationals came to an end. This is
not to say that, for example, property rights that might have been obtained in accordance with certain Articles of the
Trusteeship Agreement and which might have vested before the termination of
the Agreement, would have been
divested by the termination.’ See ICJ Northern Cameroons (Cameroon v United Kingdom) (Preliminary Objections)
[1963] ICJ Rep 15, 34. Accordingly, awards delivered, or jurisdiction already established cannot be affected by the
termination. But the termination does not allow prospective disputes, as the treaty altogether is terminated including
the provision of the sunset clause.
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See James Harrison, ‘The Life and Death of BITs: Legal Issues Concerning Survival Clauses and
the Termination of
Investment Treaties’ (2012) 13 Journal World Investment and Trade 928, 942–7;Tania Voon, Andrew Mitchell and James
Munro, ‘Parting Ways: The Impact of Mutual Termination of Investment Treaties on Investor Rights’ (2014) 29(2) ICSID
Review 451.
248
United Nations, Vienna Convention on the Law of Treaties, 23 May 1969, United Nations, Treaty Series, vol. 1155, Article
59. See also Anthony Aust, Modern Treaty Law and Practice (CUP, 2007, 2
nd
ed.) 292.
249
United Nations, Vienna Convention on the Law of Treaties, 23 May 1969, United Nations, Treaty Series, vol. 1155, Article
59.1(a) and 1(b). See also Anthony Aust, Modern Treaty Law and Practice (CUP, 2007, 2
nd
ed.) 292.
IPOL | Policy Department for Citizens’ Rights and Constitutional Affairs
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terminate on the date of entry into force of this Agreement. From that date, all provisions of the IPPA,
including the provisions for termination contained in Article 14 (Entry into Force and Duration and
Termination), and any rights or obligations arising from those provisions, shall cease to have effect.’
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In like manner, when Australia and Uruguay replaced their BIT of 2001 with a new one in 2019, they
referred to the legal effect of the termination of the BIT of 2001 for greater certainty. In particular, Article
17 of the BIT of 2019 provides that ‘The Parties agree that the "Agreement between Australia and
Uruguay on the Promotion and Protection of Investments", signed at Punta del Este on 3 September
2001 (hereafter the "IPPA"), will terminate on the date of entry into force of this Agreement. For greater
certainty, the agreement of the Parties to terminate the IPPA in paragraph 5 shall, on the date of entry
into force of this Agreement, supersede the provisions for termination contained in Article 15 (Entry
into force, duration and termination) of the IPPA.’
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