Dr. Michael de Boeck:

That was also the final part of my opening statement. It is common sense that the ISDS will probably raise the cost of the enormous transition we have ahead of us. If one was in the political opportunity where one considers there is no headway being made on the Energy Charter Treaty, and if one was building coalitions, then, yes, that is certainly an option. In English, we would say “bite the bullet”.

I would like to offer one additional rationale, one that we have not touched on yet and one that is also complicating the discussion a little bit, and that is the Komstroy case, which we have referenced several times. That is the case of the European Court of Justice where it held that the application of the Energy Charter Treaty as between two EU member states, and so between a member state and an investor in another member state, is not compatible with EU law. We have already said that one of the problems there is that it is not clear whether that conclusion also applies on the international plane and, therefore, it undermines the international tribunal.

Another problem that arises from this, and that will probably continue to exist even in the modernised treaty with an exclusion for the intra-EU and extra-EU dimension, is that one can go to pretty much every big law firm to see what techniques they offer for restructuring investments that are currently within the EU to outside of the EU and, therefore, pick and choose which investment protection treaties they would like to use to protect their investments. This is something that is not very often researched but it is a tremendous problem, and the distinction between the intra-EU and extra-EU scope of investment protection is very unclear.