IPOL | Policy Department for Citizens’ Rights and Constitutional Affairs
52
PE 703.592
‘Where two or more Contracting Parties have entered into a prior international agreement, or enter
into a subsequent international agreement, whose terms in either case concern the
subject matter of
Part III or V of this Treaty, (1) nothing in Part III or V of this Treaty shall be construed to derogate from
any provision of such terms of the other agreement or from any right to dispute resolution with respect
thereto under that agreement; and (2) nothing in such terms of the other agreement shall be construed
to derogate from any provision of Part III or V of this Treaty or from any right to
dispute resolution with
respect thereto under this Treaty, where any such provision is more favorable to the Investor or
Investment.’
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The dispute here is over whether Article 16 is a conflict rule or an interpretation rule. If considered a
conflict rule, such provision is relevant to Article 30 of the VCLT. If considered an interpretation rule,
such provision is relevant to Article 31 of the VCLT. In
Eskosol v Italy
for instance, divergent views on the
nature of Article 16 were expressed among the parties.
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Regardless of such dispute, Article 16 of the ECT resolves the conflict or the overlap between two
treaties with the “same subject matter”. This reference refers to the narrow scope of Article 16 of the
ECT. For example, such provision is activated in the instance of two contracting parties to the ECT that
signed for a BIT with dispute resolution provisions. Then according to Article 16, the treaty with the
most favorable regime for the investor shall apply.
Further, it can be argued that Article 16 of the ECT provides a presumption that
there is no conflict
between the ECT and other international agreements. It stipulates that the ECT and another agreement
shall not be ‘construed’. i.e. interpreted, as derogating from each other. The condition ‘where any such
provision is more favorable to the Investor or Investment’ limits the presumption. Therefore, where the
other agreement is more favorable, the presumption would lean the other wayi.e. that an
incompatibility is at hand.
This interpretation of the ECT is confirmed by Decision 1 to the ECT on the application of the Svalbard
Treaty, which stipulates that ‘in the event of a conflict between the treaty concerning Spitsbergen of 9
February 1920 (the Svalbard Treaty) and the
Energy Charter Treaty, the treaty concerning Spitsbergen
shall prevail to the extent of the conflict’. When the drafters of the ECT wanted to achieve a rule on
conflict of laws, they used the words ‘shall prevail’.
The question can of course be raised whether the drafters of the ECT intended to invoke the application
of Article 30(2) of the VCLT and whether the phrase ‘construed to derogate’ could be
considered to be
equivalent to ‘considered as incompatible’ although they do not carry the same meaning. However,
even if that would be the case.
As Article 16 of the ECT does not provide a rule for when a mutually supportive construction is not
possible or the obligations under the ECT and another treaty are incompatible, such situation would
be solved by the default rule in Article 30 of the VCLT. To the extent that a mutually supportive
construction of the Paris Agreement and the ECT is not possible, as the Paris Agreement is the later
agreement and all Parties to the ECT have signed the Paris Agreement (and all but Yemen and Turkey
has ratified it), the ECT can only be applied to the extent in which it is compatible with the Paris
Agreement.
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