Energy Community dispute settlement procedure

The dispute settlement rules introduce a preliminary procedure preceding the submission of a case of non-compliance to the Ministerial Council under Article 91 of the Treaty. A preliminary procedure may be initiated by the Secretariat by way of an Opening Letter to be followed, as the case may be, by a Reasoned Opinion and Reasoned Request to the Ministerial Council.

In the course of this three-step procedure, the Party concerned will have extensive opportunity for making its arguments heard, to comply of its own accord with the requirements of the Treaty or, if appropriate, to justify its position. Interested third parties may access the case file and/or submit written observations to the Secretariat provided they substantiate their legitimate interest.

In case breach identified by the Ministerial Council has not been rectified by the party to the case, or in other cases of a serious and persistent breach of Energy Community law, a Party, the Secretariat or the Regulatory Board may request a decision of the Ministerial Council under Article 92 of the Treaty without a preliminary procedure.

With the Opening Letter, the Secretariat initiates a preliminary procedure, the purpose of which is giving the Party concerned the possibility to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full factual and legal background of the case. The Party is given two months to comply of its own accord with the requirements of the Treaty, to justify its position.

A Reasoned Opinion is the second step in a dispute settlement procedure initiated by the Secretariat under Article 90 of the Energy Community Treaty. With the Reasoned Opinion, the party is requested to rectify the identified issues of non-compliance within a time-limit of two months. In the light of the reply by the Government, the Secretariat may submit the case to the Ministerial Council for a decision on the Party’s compliance with Energy Community law. 

In the Reasoned Request, the Secretariat seeks a decision from the Ministerial Council on the Party's failure to comply with its obligation from the Energy Community Treaty.  Before taking a decision, the Advisory Committee is asked for its opinion on the Secretariat's Reasoned Request. Before giving its opinion, the Advisory Committee conducts a public hearing and at the meeting following the adoption of the Advisory Committee’s opinion, the Permanent High Level Group shall hear both parties to the case as well as the President of the Advisory Committee before including the case on the agenda of the next meeting of the Ministerial Council.

A Party, the Secretariat or the Regulatory Board may request a decision of the Ministerial Council under Article 92 of the Treaty without a preliminary procedure. Such request can either follow up on a prior decision by the Ministerial Council under Article 91 of the Treaty or could be initiated without a procedure under Article 91. The request for decision under Article 92 of the Treaty shall also contain a proposal as to concrete measures to be taken in accordance with Article 92(1) of the Treaty. Such measures relate to suspension of certain rights deriving from application of the Treaty to the Party concerned, including but not limited to, suspension of voting rights and exclusion from the meetings or mechanisms provided for in the Treaty.

The amended Rules include a new article governing the cooperation between the Secretariat and the national authorities and courts of the Contracting Parties. Such cooperation would ensure uniform implementation, application and interpretation of the Energy Community rules, as well as the need to strengthen reliability, transparency and legality in national proceedings, which investors urgently demand. It also provides concrete assistance to national authorities and courts concerning the interpretation of Energy Community law.

The revised Rules also enhances the role of the Permanent High Level Group (PHLG). They give the PHLG the power to take interim measures necessary to effectively deal with matters of urgency and in line with Article 47(c) of the Treaty. Another novelty is the fact that if the Secretariat decides not to pursue a case, right is given to the complainant to approach directly the PHLG, which can either hear the complaint directly or initiate a preliminary procedure. Whenever the Advisory Committee – whose role and structure was also strengthened with the amended Rules - issues an Opinion, the PHLG is to hear both dispute parties as well as the Advisory Committee. If it agrees with the tabled Reasoned Request, it may include it as an "A" item on the agenda of the next Ministerial Council.