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LAW OFFICES

WILLIAMS & CONNOLLY LLP®

July 9, 2024

Via Electronic Case Filing

Mark J. Langer
Clerk, U.S. Court of Appeals for the District of Columbia Circuit
E. Barrett Prettyman U.S. Courthouse
333 Constitution Avenue NW, Room 5205
Washington, DC 20001

Dear Mr. Langer:

Under Rule 28(j), I advise the Court of a formal agreement reached by 26 EU member
states, the EU, and the European Atomic Energy Community (EURATOM) on June 26, 2024,
along with an accompanying declaration. I also attach a European Commission press release sum-
marizing these developments and the EU’s withdrawal from the Energy Charter Treaty. Claim-
ants’ home countries—the Netherlands and Luxembourg—are among the parties who have ini-
tialed the agreement and signed the accompanying declaration. The agreement and declaration
“reaffirm, for greater certainty,” the parties’ “common understanding on the interpretation and
application of the Energy Charter Treaty”: “[T]hat Treaty cannot and never could serve as a legal
basis for intra-EU arbitration proceedings.” Agreement 13; Decl. 7. The declaration has immedi-
ate legal effect; the agreement will now be submitted for formal ratification or approval. Press
Release 1.

These binding agreements make unmistakable that the arbitration proceedings here are
“manifestly inadmissible due to lack of consent to submit to arbitration.” Agreement 10; Decl. 5.
Contrary to claimants’ assertion that Spain’s interpretation is novel or “evolving,” Next-Era/9REN
Br. 52; Blasket Br. 37-38, it is “the consistent position of the European Union, EURATOM, and
their Member States” that “Article 26 of the Energy Charter Treaty could not in the past, and
cannot now or in the future serve as a legal basis” for intra-EU arbitration. Agreement 8, 10;
accord Decl. 4-5. These agreements “reiterate, expressly and unambiguously,” that long-standing
view. Agreement 10; Decl. 5. The Energy Charter Treaty is “an instrument of the European
Union’s external energy policy” that was never intended to unsettle the foundational primacy of
the EU legal order. Agreement 7; Decl. 3 (emphasis added).

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WILLIAMS & CONNOLLY LLP

July 9, 2024
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Under Supreme Court precedent, those views are entitled to “considerable weight” in in-
terpreting the Energy Charter Treaty. NextEra/9REN Spain Br. 45; Blasket Spain Br. 49. Treaties
must be read “in a manner consistent with the shared expectations of the contracting parties.”
Lozano v. Montoya Alvarez, 572 U.S. 1, 12 (2014) (citation and emphasis omitted).

Sincerely,

/s/ Sarah M. Harris

Sarah M. Harris

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CERTIFICATE OF SERVICE

I, Sarah M. Harris, counsel for the Kingdom of Spain and a member of the Bar of this
Court, certify that, on July 9, 2024, a copy of the foregoing letter was filed with the Clerk and
served on the parties through the Court’s electronic filing system. I further certify that all parties
required to be served have been served.

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AGREEMENT

ON THE INTERPRETATION AND APPLICATION OF THE
ENERGY CHARTER TREATY

BETWEEN THE EUROPEAN UNION, THE EUROPEAN ATOMIC
ENERGY COMMUNITY AND THEIR MEMBER STATES

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THE PARTIES WHO ARE SIGNATORIES TO THIS AGREEMENT,

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE REPUBLIC OF CROATIA,

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THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

THE REPUBLIC OF MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

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THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

THE EUROPEAN UNION and

THE EUROPEAN ATOMIC ENERGY COMMUNITY

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HAVING in mind the Energy Charter Treaty, signed at Lisbon on 17 December 1994 (OJ 1994 L
380, p. 24) and approved on behalf of the European Communities by Council and Commission
Decision 98/181/EC, ECSC, Euratom of 23 September 1997 (OJ 1998 L 69, p. 1), as it may be
amended from time to time ('Energy Charter Treaty'),

HAVING in mind the rules of customary international law as codified in the Vienna Convention on
the Law of Treaties (VCLT),

CONSIDERING that the members of a Regional Economic Integration Organisation within the
meaning of Article 1(3) of the Energy Charter Treaty hereby express a common understanding on
the interpretation and application of a treaty in their inter se relations,

RECALLING that withdrawal from the Energy Charter Treaty does not affect the status as a
member of the Regional Economic Integration Organisation of the Party who is signatory to this
Agreement (Contracting Party) that withdrew, nor does it preclude an interest in expressing a
common understanding on the interpretation and application of that Treaty for as long as it may be
held to produce legal effects in relation to that member and in particular in respect of Article 47(3)
of the Energy Charter Treaty,

HAVING in mind the Treaty on European Union (TEU), the Treaty on the Functioning of the
European Union (TFEU), the Treaty establishing the European Atomic Energy Community
(EURATOM) and general principles of European Union and EURATOM law,

CONSIDERING that the references to the European Union in this Agreement are to be understood
also as references to its predecessor, the European Economic Community and, subsequently, the
European Community, until the latter was superseded by the European Union,

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RECALLING that, in line with the case-law of the Permanent Court of International Justice
(Question of Jaworzina (Polish- Czechoslovakian Frontier), Advisory Opinion, [1923] PCIJ Series
B No. 8, 37) and the International Court of Justice (Reservations on the Convention on the
Prevention and Punishment of the Crime of Genocide, Advisory Opinion, [1951] I.C.J. Reports, 15,
20), the right of giving an authoritative interpretation of a legal rule belongs to the parties to an
international agreement in relation to that agreement,

RECALLING that the Member States of the European Union have assigned that right of giving
authoritative interpretation of Union and EURATOM law to the Court of Justice of the European
Union (CJEU), as explained by the CJEU in its judgment of 30 May 2006, in Commission v Ireland
(Mox Plant), C-459/03 (EU:C:2006:345, paragraphs 129 to 137), where it held that the exclusive
competence to interpret and apply Union and EURATOM law extends to the interpretation and
application of international agreements to which the European Union, EURATOM and the Member
States are parties, in the relationship between two Member States or the European Union or
EURATOM and a Member State,

RECALLING that according to Article 344 TFEU and Article 193 EURATOM, Member States of
the European Union are not entitled to submit a dispute concerning the interpretation or application
of the TEU, the TFEU and EURATOM to any method of settlement other than those provided for
therein,

RECALLING that in its judgment of 6 March 2018, in Achmea, C-284/16 (EU:C:2018:158), the
CJEU held that Articles 267 and 344 TFEU must be interpreted as precluding a provision in an
international agreement concluded between Member States under which an investor from one of
those Member States may, in the event of a dispute concerning investments in the other Member

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State, bring proceedings against the latter Member State before an arbitral tribunal whose
jurisdiction that Member State has undertaken to accept,

RECALLING the consistently reiterated position of the European Union that the Energy Charter
Treaty was not meant to apply in intra-EU relations and that it was not, and could not have been,
the intention of the European Union, EURATOM and their Member States, that the Energy Charter
Treaty would create any obligations among them since it was negotiated as an instrument of the
European Union's external energy policy with the view to establish a framework for energy
cooperation with third countries whereas, by contrast, the Union's internal energy policy consists of
an elaborate system of rules designed to create an internal market in the field of energy which
exclusively regulate the relations between the Member States,

RECALLING that in its judgment of 2 September 2021, in Komstroy, C-741/19 (EU:C:2021:655,
paragraph 66) (the Komstroy judgment) confirmed in its Opinion 1/20 (EU:C:2022:485, paragraph
47), the CJEU held that Article 26(2)(c) of the Energy Charter Treaty must be interpreted as not
being applicable to disputes between a Member State and an investor of another Member State
concerning an investment made by the latter in the former Member State,

RECALLING that, as an interpretation by the competent court and reflecting a general principle of
public international law, the interpretation of the Energy Charter Treaty in the Komstroy judgment
applies as of the approval of the Energy Charter Treaty by the European Union, EURATOM and
their Member States,

CONSIDERING that Articles 267 and 344 TFEU must be interpreted as precluding an
interpretation of Article 26 of the Energy Charter Treaty that allows for disputes between, on the
one hand, an investor of one Member State of the European Union and, on the other hand, another

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Member State of the European Union, the European Union or EURATOM to be resolved before an
arbitral tribunal (intra-EU arbitration proceedings), and

CONSIDERING, in any event, that, where disputes cannot be settled amicably, a party may as
always choose to submit in accordance with national law disputes between a Contracting Party and
an investor of another Contracting Party for resolution to the competent courts or administrative
tribunals, as guaranteed by general principles of law and respect for fundamental rights, enshrined
inter alia in the Charter of Fundamental Rights of the European Union,

SHARING the common understanding expressed in this Agreement between the European Union,
EURATOM and their Member States that, as a result, a clause such as Article 26 of the Energy
Charter Treaty could not in the past, and cannot now or in the future serve as legal basis for
arbitration proceedings initiated by an investor from one Member State concerning investments in
another Member State,

REITERATING Declaration No 17, annexed to the Final Act of the Intergovernmental Conference
which adopted the Treaty of Lisbon, which recalls that the Treaties and the law adopted by the
Union on the basis of the Treaties have primacy over the law of the Member States, and that the
principle of primacy constitutes a conflict rule in their mutual relations,

RECALLING, consequently, that, in order to resolve any conflict of norms, an international
agreement concluded by the Member States of the European Union under international law may
apply in intra-EU relations only to the extent that its provisions are compatible with the EU
Treaties,

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CONSIDERING that, as a result of the non-applicability of Article 26 of the Energy Charter Treaty
as a legal basis for intra-EU arbitration proceedings, also Article 47(3) of the Energy Charter Treaty
cannot extend, and was not intended to extend, to such proceedings,

CONSIDERING that, as a result of the non-applicability of Article 26 of the Energy Charter Treaty
as a legal basis for intra-EU arbitration proceedings, where intra-EU arbitration proceedings are
pending, the parties to this Agreement that are concerned by those proceedings, whether as
respondent or as home State of an investor, should cooperate with one another in order to ensure
that the existence of this Agreement is brought to the attention of the arbitral tribunal in question,
allowing the appropriate conclusion as to absence of jurisdiction of the tribunal to be drawn,

CONSIDERING, in addition, that no new intra-EU arbitration proceedings should be registered,
and

AGREEING that where Notice of Arbitration is nevertheless delivered the Contracting Parties that
are concerned by those proceedings, whether as respondent or as home State of an investor, should
cooperate with one another in order to ensure that the existence of this Agreement is brought to the
attention of the arbitral tribunal in question, allowing the appropriate conclusion to be drawn that
Article 26 of the Energy Charter Treaty cannot serve as a legal basis for such proceedings,

CONSIDERING, nevertheless, that settlements and arbitral awards in intra-EU investment
arbitration cases that can no longer be annulled or set aside and were voluntarily complied with or
definitively enforced should not be challenged,

REGRETTING that arbitral awards have already been rendered, continue to be rendered and could
still be rendered in a manner contrary to the rules of the European Union and EURATOM,

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including as expressed in the interpretations of the CJEU, by arbitral tribunals in intra-EU
arbitration proceedings initiated with reference to Article 26 of the Energy Charter Treaty,

also REGRETTING that such arbitral awards are the subject of enforcement proceedings, including
in third countries, that in pending intra-EU arbitration proceedings purportedly based on Article 26
of the Energy Charter Treaty arbitral tribunals do not decline competence and jurisdiction, and that
arbitration institutions continue to register new arbitration proceedings and do not reject them as
manifestly inadmissible due to lack of consent to submit to arbitration,

CONSIDERING, therefore, that it is necessary to reiterate, expressly and unambiguously, the
consistent position of the European Union, EURATOM and their Member States by means of an
agreement reaffirming their common understanding on the interpretation and application of the
Energy Charter Treaty, as interpreted by the CJEU, to the extent that it concerns intra-EU
arbitration proceedings,

CONSIDERING that, in accordance with the judgment of the International Court of Justice of 5
February 1970, Barcelona Traction, Light and Power Company Limited (Belgium v. Spain) (ICJ
Reports 1970, p. 3, paragraphs 33 and 35) and as explained by the CJEU in the Komstroy judgment,
certain provisions of the Energy Charter Treaty are intended to govern bilateral relations,

CONSIDERING therefore that this agreement only concerns the bilateral relationships between the
European Union, EURATOM and their Member States, respectively, and, by extension, the
investors from those Contracting Parties to the Energy Charter Treaty, and that as a result, this
agreement affects only parties that are governed by the rules of the European Union and
EURATOM as a Regional Economic Integration Organisation within the meaning of Article 1(3) of
the Energy Charter Treaty and does not affect the enjoyment by the other parties to the Energy
Charter Treaty of their rights under that Treaty or the performance of their obligations,

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RECALLING that the European Union and EURATOM and their Member States have informed
the other contracting parties to the Energy Charter Treaty of their intention to conclude this
agreement on the interpretation and application of the Energy Charter Treaty,

CONSIDERING that, in that manner and in line with their legal obligations under EU and
EURATOM law, but without prejudice to their right to make such claims as they consider
appropriate in relation to costs incurred by them as respondents in relation to intra-EU arbitration
proceedings, the European Union, EURATOM and their Member States thereby ensure full and
effective compliance with the Komstroy judgment, the unenforceability of existing awards, the
obligation of arbitration tribunals to immediately terminate any pending intra-EU arbitration
proceedings, and the obligation for arbitration institutions not to register any future intra EU
arbitration proceedings, in line with their respective powers under Article 36(3) ICSID Convention
and Article 12 SCC Arbitration rules, and for arbitration tribunals to declare that any intra-EU
arbitration proceedings lack a legal basis,

UNDERSTANDING that this Agreement covers investor-State arbitration proceedings involving
the European Union, EURATOM or their Member States as parties in intra-EU disputes based on
Article 26 of the Energy Charter Treaty under any arbitration convention or set of rules, including
the Convention on the Settlement of Investment Disputes between States and Nationals of Other
States (ICSID Convention) and the ICSID arbitration rules, the Arbitration Institute of the
Stockholm Chamber of Commerce (SCC) arbitration rules, the United Nations Commission on
International Trade Law (UNCITRAL) arbitration rules and ad hoc arbitration,

BEARING in mind that the provisions of this Agreement are without prejudice to the possibility for
the European Commission or any Member State to bring an action before the CJEU based on
Articles 258, 259 and 260 TFEU,

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HAVE AGREED AS FOLLOWS:

SECTION 1

COMMON UNDERSTANDING ON THE NON-APPLICABILITY OF ARTICLE 26 OF
THE ENERGY CHARTER TREATY AS A BASIS FOR INTRA-EU ARBITRATION
PROCEEDINGS

ARTICLE 1

Definitions

For the purposes of this Agreement, the following definitions shall apply:

(1) "Energy Charter Treaty" means the Energy Charter Treaty, signed at Lisbon on 17 December
1994 (OJ 1994 L 380, p. 24;) and approved on behalf of the European Communities by
Council and Commission Decision 98/181/EC, ECSC, Euratom of 23 September 1997 (OJ
1998 L 69, p. 1), as it may be amended from time to time;

(2) "intra-EU relations" means relations between Member States of the European Union and
EURATOM or between a Member State, on the one hand, and the European Union or
EURATOM, on the other hand;

(3) "intra-EU arbitration proceedings" means any proceedings before an arbitral tribunal initiated
with reference to Article 26 of the Energy Charter Treaty to resolve a dispute between, on the

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one hand, an investor of one Member State of the European Union and, on the other hand,
another Member State of the European Union, the European Union, or EURATOM;

ARTICLE 2

Common understanding of the European Union, EURATOM and their Member States on the
interpretation and continued non-applicability of Article 26 of the Energy Charter Treaty
and the lack of legal basis for intra-EU arbitration proceedings

1. The Contracting Parties hereby reaffirm, for greater certainty, that they share a common
understanding on the interpretation and application of the Energy Charter Treaty, according to
which Article 26 of that Treaty cannot and never could serve as a legal basis for intra-EU
arbitration proceedings.

The common understanding expressed in the first subparagraph is based on the following
elements of Union law:

(a) the interpretation of the Court of Justice of the European Union pursuant to which
Article 26 of the Energy Charter Treaty does not apply, and should never have been
applied, as a basis for intra-EU arbitration proceedings; and

(b) the primacy of European Union law, recalled in Declaration No 17, annexed to the Final
Act of the Intergovernmental Conference which adopted the Treaty of Lisbon, as a rule
of international law governing conflict of norms in their mutual relations with the result
that in any event Article 26 of the Energy Charter Treaty does not and could not apply
as a basis for intra-EU arbitration proceedings.

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2. The Contracting Parties reaffirm, for greater certainty, that they share the common
understanding that, as a result of the absence of legal basis for intra-EU arbitration
proceedings pursuant to Article 26 of the Energy Charter Treaty, Article 47, paragraph 3, of
the Energy Charter Treaty cannot extend, and could not have been extended, to such
proceedings. Accordingly, in that respect, Article 47, paragraph 3, of the Energy Charter
Treaty cannot have produced any legal effects in intra-EU relations when a Member State
withdrew from the Energy Charter Treaty prior to this agreement, nor will it produce any
legal effects in intra-EU relations if a Contracting Party withdraws from the Energy Charter
Treaty subsequently.

3. For greater certainty, the Contracting Parties are in agreement that in accordance with the
common understanding expressed in paragraphs 1 and 2, and without prejudice thereto,
Article 26 of the Energy Charter Treaty does not apply as a basis for intra-EU arbitration
proceedings and that, in that respect, Article 47, paragraph 3, of the Energy Charter Treaty
will not produce legal effects in intra-EU relations.

4. Paragraphs 1 to 3 are without prejudice to the interpretation and application of other
provisions of the Energy Charter Treaty to the extent they concern intra-EU relations.

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SECTION 2

FINAL PROVISIONS

ARTICLE 3

Depositary

1. The Secretary-General of the Council of the European Union shall act as Depositary of this
Agreement.

2. The Secretary-General of the Council of the European Union shall notify the Contracting
Parties of:

(a) the deposit of any instrument of ratification, acceptance or approval in accordance with
Article 5;

(b) the date of entry into force of this Agreement in accordance with Article 6, paragraph 1;

(c) the date of entry into force of this Agreement for each Contracting Party in accordance
with Article 6, paragraph 2.

3. The Secretary General of the Council of the European Union shall publish the Agreement in
the Official Journal of the European Union and notify the Depository of the Energy Charter
Treaty, as well as the Energy Charter Secretariat, of its adoption and entry into force. The

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Depository of this Agreement shall be invited to notify the Agreement to the other
contracting parties to the Energy Charter Treaty.

4. This Agreement shall be registered by the Depositary with the United Nations Secretariat, in
accordance with Article 102 of the Charter of the United Nations, following its entry into
force.

ARTICLE 4

Reservations

No reservations shall be made to this Agreement.

ARTICLE 5

Ratification, approval or acceptance

This Agreement shall be subject to ratification, approval or acceptance.

The Contracting Parties shall deposit their instruments of ratification, approval or acceptance with
the Depositary.

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ARTICLE 6

Entry into force

1. This Agreement shall enter into force 30 calendar days after the date on which the Depositary
receives the second instrument of ratification, approval or acceptance.

2. For each Contracting Party which ratifies, accepts or approves it after its entry into force in
accordance with paragraph 1, this Agreement shall enter into force 30 calendar days after the
date of deposit by such Contracting Party of its instrument of ratification, approval or
acceptance.

ARTICLE 7

Authentic texts

This Agreement, drawn up in a single original in the Bulgarian, Croatian, Czech, Danish, Dutch,
English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian,
Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish languages, the
text in each of these languages being equally authentic, shall be deposited in the archives of the
Depositary.

Done at Brussels on ..........................

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DECLARATION ON THE LEGAL CONSEQUENCES OF THE JUDGMENT OF THE
COURT OF JUSTICE IN KOMSTROY AND COMMON UNDERSTANDING ON THE
NON-APPLICABILITY OF ARTICLE 26 OF THE ENERGY CHARTER TREATY AS A
BASIS FOR INTRA-EU ARBITRATION PROCEEDINGS

MADE BY THE REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES
AND OF THE EUROPEAN UNION ON 26 JUNE 2024

HAVING in mind the Energy Charter Treaty, signed at Lisbon on 17 December 1994 (OJ 1994 L
380, p. 24) and approved on behalf of the European Communities by Council and Commission
Decision 98/181/EC, ECSC, Euratom of 23 September 1997 (OJ 1998 L 69, p. 1), as it may be
amended from time to time (‘Energy Charter Treaty’),

HAVING in mind the rules of customary international law as codified in the Vienna Convention on
the Law of Treaties (VCLT),

CONSIDERING that the members of a Regional Economic Integration Organisation within the
meaning of Article 1(3) of the Energy Charter Treaty hereby express a common understanding on the
interpretation and application of a treaty in their inter se relations,

RECALLING that withdrawal from the Energy Charter Treaty does not affect the status as a member
of the Regional Economic Integration Organisation of the Party who is signatory to this Declaration
that withdrew, nor does it preclude an interest in expressing a common understanding on the
interpretation and application of that Treaty for as long as it may be held to produce legal effects in
relation to that member and in particular in respect of Article 47(3) of the Energy Charter Treaty,

HAVING in mind the Treaty on European Union (TEU), the Treaty on the Functioning of the
European Union (TFEU), the Treaty establishing the European Atomic Energy Community
(EURATOM) and general principles of European Union and EURATOM law,

CONSIDERING that the references to the European Union in this Declaration are to be understood
also as references to its predecessor, the European Economic Community and, subsequently, the
European Community, until the latter was superseded by the European Union,

RECALLING that, in line with the case-law of the Permanent Court of International Justice (Question
of Jaworzina (Polish- Czechoslovakian Frontier), Advisory Opinion, [1923] PCIJ Series B No. 8,

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37) and the International Court of Justice (Reservations on the Convention on the Prevention and
Punishment of the Crime of Genocide, Advisory Opinion, [1951] I.C.J. Reports, 15, 20), the right of
giving an authoritative interpretation of a legal rule belongs to the parties to an international
agreement in relation to that agreement,

RECALLING that the Member States of the European Union have assigned that right of giving
authoritative interpretation of Union and EURATOM law to the Court of Justice of the European
Union (CJEU), as explained by the CJEU in its judgment of 30 May 2006, in Commission v Ireland
(Mox Plant), C-459/03 (EU:C:2006:345, paragraphs 129 to 137), where it held that the exclusive
competence to interpret and apply Union and EURATOM law extends to the interpretation and
application of international agreements to which the European Union, EURATOM and the Member
States are parties, in the relationship between two Member States or the European Union or
EURATOM and a Member State,

RECALLING that according to Article 344 TFEU and Article 193 EURATOM, Member States of
the European Union are not entitled to submit a dispute concerning the interpretation or application
of the TEU, the TFEU and EURATOM to any method of settlement other than those provided for
therein,

RECALLING that in its judgment of 6 March 2018, in Achmea, C-284/16 (EU:C:2018:158), the
CJEU held that Articles 267 and 344 TFEU must be interpreted as precluding a provision in an
international agreement concluded between Member States under which an investor from one of those
Member States may, in the event of a dispute concerning investments in the other Member State,
bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that
Member State has undertaken to accept,

RECALLING the consistently reiterated position of the European Union that the Energy Charter
Treaty was not meant to apply in intra-EU relations and that it was not, and could not have been, the
intention of the European Union, EURATOM and their Member States, that the Energy Charter
Treaty would create any obligations among them since it was negotiated as an instrument of the
European Union's external energy policy with the view to establish a framework for energy
cooperation with third countries whereas, by contrast, the Union's internal energy policy consists of
an elaborate system of rules designed to create an internal market in the field of energy which
exclusively regulate the relations between the Member States,

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RECALLING that in its judgment of 2 September 2021, in Komstroy, C-741/19 (EU:C:2021:655,
paragraph 66) (the Komstroy judgment) confirmed in its Opinion 1/20 (EU:C:2022:485, paragraph
47), the CJEU held that Article 26(2)(c) of the Energy Charter Treaty must be interpreted as not being
applicable to disputes between a Member State and an investor of another Member State concerning
an investment made by the latter in the former Member State,

RECALLING that, as an interpretation by the competent court and reflecting a general principle of
public international law, the interpretation of the Energy Charter Treaty in the Komstroy judgment
applies as of the approval of the Energy Charter Treaty by the European Union, EURATOM and their
Member States,

CONSIDERING that Articles 267 and 344 TFEU must be interpreted as precluding an interpretation
of Article 26 of the Energy Charter Treaty that allows for disputes between, on the one hand, an
investor of one Member State of the European Union and, on the other hand, another Member State
of the European Union, the European Union or EURATOM to be resolved before an arbitral tribunal
(‘intra-EU arbitration proceedings’), and

CONSIDERING, in any event, that, where disputes cannot be settled amicably, a party may as always
choose to submit in accordance with national law disputes between a Member State (or, as the case
may be, the European Union or the EURATOM) and an investor of another Member State for
resolution to the competent courts or administrative tribunals, as guaranteed by general principles of
law and respect for fundamental rights, enshrined inter alia in the Charter of Fundamental Rights of
the European Union,

SHARING the common understanding expressed in this Declaration that, as a result, a clause such
as Article 26 of the Energy Charter Treaty could not in the past, and cannot now or in the future serve
as legal basis for arbitration proceedings initiated by an investor from one Member State concerning
investments in another Member State,

REITERATING Declaration No 17, annexed to the Final Act of the Intergovernmental Conference
which adopted the Treaty of Lisbon, which recalls that the Treaties and the law adopted by the Union
on the basis of the Treaties have primacy over the law of the Member States, and that the principle of
primacy constitutes a conflict rule in their mutual relations,

RECALLING, consequently, that, in order to resolve any conflict of norms, an international
agreement concluded by the Member States of the European Union under international law may apply
in intra-EU relations only to the extent that its provisions are compatible with the EU Treaties,

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CONSIDERING that, as a result of the non-applicability of Article 26 of the Energy Charter Treaty
as a legal basis for intra-EU arbitration proceedings, also Article 47(3) of the Energy Charter Treaty
cannot extend, and was not intended to extend, to such proceedings,

CONSIDERING that, as a result of the non-applicability of Article 26 of the Energy Charter Treaty
as a legal basis for intra-EU arbitration proceedings, where intra-EU arbitration proceedings are
pending, the signatories to this Declaration that are concerned by those proceedings, whether as
respondent or as home State of an investor, should cooperate with one another in order to ensure that
the existence of this Declaration is brought to the attention of the arbitral tribunal in question,
allowing the appropriate conclusion as to absence of jurisdiction of the tribunal to be drawn,

CONSIDERING, in addition, that no new intra-EU arbitration proceedings should be registered, and

AGREEING that where a notice of arbitration is nevertheless delivered the signatories that are
concerned by those proceedings, whether as respondent or as home State of an investor, should
cooperate with one another in order to ensure that the existence of this Declaration is brought to the
attention of the arbitral tribunal in question, allowing the appropriate conclusion to be drawn that
Article 26 of the Energy Charter Treaty cannot serve as a legal basis for such proceedings,

CONSIDERING, nevertheless, that settlements and arbitral awards in intra-EU investment arbitration
cases that can no longer be annulled or set aside and were voluntarily complied with or definitively
enforced should not be challenged,

REGRETTING that arbitral awards have already been rendered, continue to be rendered and could
still be rendered in a manner contrary to the rules of the European Union and EURATOM, including
as expressed in the interpretations of the CJEU, by arbitral tribunals in intra-EU arbitration
proceedings initiated with reference to Article 26 of the Energy Charter Treaty,

also REGRETTING that such arbitral awards are the subject of enforcement proceedings, including
in third countries, that in pending intra-EU arbitration proceedings purportedly based on Article 26
of the Energy Charter Treaty arbitral tribunals do not decline competence and jurisdiction, and that
arbitration institutions continue to register new arbitration proceedings and do not reject them as
manifestly inadmissible due to lack of consent to submit to arbitration,

CONSIDERING, therefore, that it is necessary to reiterate, expressly and unambiguously, the
consistent position of the European Union and its Member States by means of an instrument

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reaffirming their common understanding on the interpretation and application of the Energy Charter
Treaty, as interpreted by the CJEU, to the extent that it concerns intra-EU arbitration proceedings,

CONSIDERING that, in accordance with the judgment of the International Court of Justice of 5
February 1970, Barcelona Traction, Light and Power Company Limited (Belgium v. Spain) (ICJ
Reports 1970, p. 3, paragraphs 33 and 35) and as explained by the CJEU in the Komstroy judgment,
certain provisions of the Energy Charter Treaty are intended to govern bilateral relations,

CONSIDERING therefore that any such instrument only concerns the bilateral relationships between
the European Union, EURATOM and their Member States, respectively, and, by extension, the
investors from those Contracting Parties to the Energy Charter Treaty, and that as a result, this
Declaration affects only parties that are governed by the rules of the European Union as a Regional
Economic Integration Organisation within the meaning of Article 1(3) of the Energy Charter Treaty
and does not affect the enjoyment by the other parties to the Energy Charter Treaty of their rights
under that Treaty or the performance of their obligations,

RECALLING that the European Union and EURATOM and their Member States have informed the
other contracting parties to the Energy Charter Treaty of their intention to conclude an agreement on
the interpretation and application of the Energy Charter Treaty,

CONSIDERING that, in that manner and in line with their legal obligations under EU and
EURATOM law, but without prejudice to their right to make such claims as they consider appropriate
in relation to costs incurred by them as respondents in relation to intra-EU arbitration proceedings,
the European Union, EURATOM and their Member States thereby ensure full and effective
compliance with the Komstroy judgment, the unenforceability of existing awards, the obligation of
arbitration tribunals to immediately terminate any pending intra-EU arbitration proceedings, and the
obligation for arbitration institutions not to register any future intra EU arbitration proceedings, in
line with their respective powers under Article 36(3) ICSID Convention and Article 12 SCC
Arbitration rules, and for arbitration tribunals to declare that any intra-EU arbitration proceedings
lack a legal basis,

UNDERSTANDING that this Declaration covers investor-State arbitration proceedings involving the
European Union or its Member States as parties in intra-EU disputes based on Article 26 of the
Energy Charter Treaty under any arbitration convention or set of rules, including the Convention on
the Settlement of Investment Disputes between States and Nationals of Other States (ICSID
Convention) and the ICSID arbitration rules, the Arbitration Institute of the Stockholm Chamber of

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[Page 26]

Commerce (SCC) arbitration rules, the United Nations Commission on International Trade Law
(UNCITRAL) arbitration rules and ad hoc arbitration,

CONSIDERING that, further to this Declaration, its signatories intend to formalise their common
understanding by means of a plurilateral treaty among themselves, the text of which has been
negotiated and initialled by the signatories to this Declaration as an indication that the text is stable,
and to make best efforts to deposit in due course their instruments of ratification, approval or
acceptance of that treaty,

BEARING in mind that the provisions of this Declaration are without prejudice to the possibility for
the European Commission or any Member State to bring an action before the CJEU based on Articles
258, 259 and 260 TFEU,

TAKING INTO ACCOUNT THE FOREGOING, THE EUROPEAN UNION AND ITS
MEMBER STATES (‘THE SIGNATORIES’)

DECLARE THAT THEY SHARE THE FOLLOWING COMMON UNDERSTANDING ON
THE NON-APPLICABILITY OF ARTICLE 26 OF THE ENERGY CHARTER TREATY
AS A BASIS FOR INTRA-EU ARBITRATION PROCEEDINGS:

1. The signatories hereby reaffirm, for greater certainty, that they share a common
understanding on the interpretation and application of the Energy Charter Treaty,
according to which Article 26 of that Treaty cannot and never could serve as a legal
basis for intra-EU arbitration proceedings.

That common understanding is based on the following elements of Union law:

i. the interpretation of the Court of Justice of the European Union pursuant to
which Article 26 of the Energy Charter Treaty does not apply, and should never
have been applied, as a basis for intra-EU arbitration proceedings; and

ii. the primacy of European Union law, recalled in Declaration No 17, annexed to
the Final Act of the Intergovernmental Conference which adopted the Treaty of

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[Page 27]

Lisbon, as a rule of international law governing conflict of norms in their mutual
relations with the result that in any event Article 26 of the Energy Charter Treaty
does not and could not apply as a basis for intra-EU arbitration proceedings.

2. The signatories reaffirm, for greater certainty, that they share the common
understanding that, as a result of the absence of legal basis for intra-EU arbitration
proceedings pursuant to Article 26 of the Energy Charter Treaty, Article 47(3) of the
Energy Charter Treaty cannot extend, and could not have been extended, to such
proceedings. Accordingly, in that respect, Article 47(3) of the Energy Charter Treaty
cannot have produced any legal effects in intra-EU relations when a signatory withdrew
from the Energy Charter Treaty prior to this Declaration, nor will it produce any legal
effects in intra-EU relations if a signatory withdraws from the Energy Charter Treaty
subsequently.

3. For greater certainty, the signatories declaree that in accordance with the common
understanding expressed in paragraphs 1 and 2, and without prejudice thereto, Article
26 of the Energy Charter Treaty does not apply as a basis for intra-EU arbitration
proceedings and that, in that respect, Article 47(3) of the Energy Charter Treaty will
not produce legal effects in intra-EU relations.

4. Paragraphs 1 to 3 are without prejudice to the interpretation and application of other
provisions of the Energy Charter Treaty to the extent they concern intra-EU relations.

Done at Brussels in a single original in the Bulgarian, Croatian, Czech, Danish, Dutch, English,
Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese,
Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish languages

on 26 June 2024.

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[Page 28]

[Page 29]

[Page 30]

Европейски съюз
Unión Europea
Evropská unie
Den Europæiske Union
Europäische Union
Euroopa Liit
Ευρωπαϊκή Ένωση
European Union
Union européenne
An tAontas Eorpach
Europska unija
Unione europea
Eiropas Savienība
Europos Sąjunga
Európai Unió
I-Unjoni Ewropea
Europese Unie
Unia Europejska
União Europeia
Uniunea Europeană
Európska únia
Evropska unija
Euroopan unioni
Europeiska unionen

Signature

[Page 31]

European Commission - Press release

EU notifies exit from Energy Charter Treaty and puts an end to intra-EU
arbitration proceedings

Brussels, 28 June 2024

The EU has taken the final step to exit the Energy Charter Treaty (ECT), a multilateral trade
and investment agreement applicable to the energy sector, which is not compatible with the EU's
climate and energy goals under the European Green Deal and the Paris Agreement.

Two written notifications have been sent by the Council and Commission to the Government of
Portugal, which is the official depositary of the Treaty, notifying respectively the withdrawal of the
European Union and Euratom. The withdrawals will take effect in one year. These notifications
follow the agreement between EU Energy Ministers last month on the Commission's proposals to
pursue the withdrawal and Treaty modernisation in parallel.

This week, the Union and its Member States have also reached a formal agreement to put an
end to the continuation of intra-EU arbitration proceedings under the ECT that are contrary to
Union law. More specifically, the agreement is aimed at clarifying, for the benefit of courts and
arbitral tribunals, that the arbitration clause provided in the ECT does not apply - and never has - in
the relations between an EU investor and an EU country.

The agreement follows the Komstroy judgment, in which the Court of Justice held that the arbitration
clause of the ECT must be interpreted as not applicable to disputes between a Member State and an
investor from another Member State concerning an investment made by the latter in the first
Member State. In other words, under Union law, within that framework, arbitration awards are invalid
and as such unenforceable anywhere in the Union.

This judgment binds all Member States and their domestic courts. However, the clear case law of the
Union courts has not always been respected by arbitral tribunals, which have continued to accept
jurisdiction and hand down awards in intra-EU proceedings. The Member States, the EU and Euratom
therefore decided to negotiate an agreement under public international law to settle this matter. The
agreement clarifies, for the benefit of courts and arbitral tribunals, that the arbitration clause
provided in the ECT does not apply in the relations between an EU investor and an EU Member State.

The Member States and the Union further agreed to accompany the closing of negotiations on the
agreement with a Declaration on the legal consequences of the Komstroy judgment. That Declaration
was signed on 26 June. The Declaration is effective as of its signature and will be later published in
the Official Journal of the European Union. The inter se agreement is now subject to internal
procedures leading to its signature and entry into force. For the Union and Euratom, the Commission
is preparing the necessary proposals to authorise signature and adoption of the agreement.

Both texts reflect the case law of the Court of Justice of the European Union and are entirely in line
with the established position of the Union as expressed on numerous occasions including in open
court in third country jurisdictions. The Energy Charter Treaty Secretariat has been informed of this
agreement.

Background

The Energy Charter Treaty is a multilateral trade and investment agreement applicable to the energy
sector that was signed in 1994 and entered into force in 1998. The European Union is a Contracting
Party to that Treaty, together with Euratom, 22 EU Member States (as of 26 June 2024), as well as
Japan, Switzerland, Turkey and most countries from the Western Balkans and the former Union of
Soviet Socialist Republics, with the exception of Russia and Belarus. In terms of the EU Member
States, Italy unilaterally withdrew in 2015. France, Germany, Poland and Luxembourg have already
exited the ECT. Slovenia, Portugal and Spain have also initiated a procedure of withdrawal.

The Commission has negotiated a modernisation of the ECT on behalf of the EU to bring it in line
with the Union's climate and energy goals, and its investment protection framework. However, due to
a lack of majority support from the Member States, the EU has not yet voted for the modernisation of
the ECT. The Commission has subsequently proposed for the EU, Euratom and the Member States to

[Page 32]

withdraw from the unmodernised Treaty in exchange for the protection of fossil fuel
investments. Under the Belgian Presidency of the EU, last month an agreement was found with
Member States to proceed with the withdrawal and the modernisation process in parallel.

At the same time, the Commission has been engaged with the Member States for years to clarify the
legal context for disputes under the ECT. In October 2022, the Commission sent a Communication to
the Council, the European Parliament and the Member States setting out its intention to open
negotiations on an agreement between the Union, Euratom and the Member States in relation to the
interpretation of the Energy Charter Treaty that would include, in particular, a confirmation that the
Energy Charter Treaty does not apply intra-EU and therefore, it cannot serve as a basis for arbitration
proceedings.

The Union joined the Energy Charter Treaty with partner countries around the world as part of its
external energy policy. The offer to arbitrate disputes contained in that Treaty was never intended to
supplant the system of judicial protection set up under the EU Treaties. In its Komstroy judgment,
the CJEU recognised that this was the only proper way to interpret the Energy Charter Treaty.

For More Information

Energy Charter Treaty

IP/24/3513

Press contacts:

Tim McPHIE (+ 32 2 295 86 02)
Giulia BEDINI (+32 2 295 86 61)
Ana CRESPO PARRONDO (+32 2 298 13 25)

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email