Procedural Posture

This document is a Decision on Annulment issued by an ICSID ad hoc Committee regarding an application filed by Romania to annul the Award dated 20 February 2025. The underlying arbitration involved claims brought by LSG Building Solutions GmbH and other renewable energy investors under the Energy Charter Treaty (ECT) and the ICSID Convention. Romania sought annulment pursuant to Article 52(1)(b) (manifest excess of powers) and Article 52(1)(e) (failure to state reasons) of the ICSID Convention.

Principal Legal Issues and Parties' Positions

Romania advanced several jurisdictional and merits-based arguments for annulment. Jurisdictional objections centered on the Tribunal's affirmation of competence over an intra-EU dispute. Romania argued that the Tribunal manifestly exceeded its powers by failing to apply EU law primacy, specifically relying on the CJEU's Komstroy judgment to assert that the ECT's arbitration clause is incompatible with the Treaty on the Functioning of the European Union (TFEU). Furthermore, Romania challenged the Tribunal's jurisdiction over multiple claimants in a single proceeding and its jurisdiction over specific corporate entities (Anina and Guist), which Romania characterized as domestic shell companies.

On the merits, Romania contended that the Tribunal failed to apply the proper law and failed to state reasons when finding Romania liable for breaching the ECT's Fair and Equitable Treatment (FET) standard. Romania argued the Tribunal improperly relied on the concept of "legitimate expectations" derived from non-binding arbitral awards rather than public international law, and failed to adequately weigh Romania's sovereign right to regulate its Green Certificates (GC) renewable energy scheme.

Committee's Analysis and Findings

The ad hoc Committee systematically dismissed all grounds for annulment, emphasizing the high threshold required to establish a manifest excess of powers or a failure to state reasons. Regarding the intra-EU objection, the Committee found the Tribunal's interpretation of the ECT and the Vienna Convention on the Law of Treaties (VCLT) to be reasonable and tenable. The Committee noted that the Tribunal was not bound by the CJEU's Komstroy decision, which was issued after the parties' consent to arbitration had crystallized, and correctly concluded that no treaty conflict existed that would deprive the Tribunal of jurisdiction.

The Committee also upheld the Tribunal's jurisdictional findings regarding multi-party claims and corporate nationality, observing that the Tribunal properly applied standard ICSID objective indicators and nationality tests based on the place of incorporation. On the merits, the Committee determined that the Tribunal correctly identified and applied the applicable law (ECT Article 10(1)) and provided clear, non-contradictory reasoning for its conclusion that Romania's drastic alterations to the GC scheme constituted an unreasonable impairment of the Claimants' investments.

Decision and Operative Directions

The Committee dismissed Romania's application for annulment in its entirety and terminated the provisional stay of enforcement of the Award. Applying the principle that costs follow the event, the Committee ordered Romania to bear all costs of the annulment proceeding, including the ICSID administrative fees, the Committee members' fees, and the Claimants' legal costs and expenses quantified at USD 855,274.69.