188 NEWSLETTER 2021 Komstroy Decision: End of an Era for Intra-EU ECT Arbitration or Not?* Tilbe Birengel Introduction The Court of Justice of the European Union (“CJEU”) in the Republic of Moldova v. Komstroy LLC (“Komstroy”) rendered a contentious decision which is likely to create controversies on intra-EU arbitrations governed under the Energy Charter Treaty (“ECT”).1 According to the CJEU, arbitrating in investment disputes between EU Member States is contrary to EU Law in cases where the dispute is governed by the ECT. The CJEU also ruled that acquisition of a debt claim arising from an electricity supply contract does not constitute an “investment” as per the ECT. The background of the decision will be given below, which will be followed by an assessment on the reasoning of the CJEU in its decision. The Background By concluding a series of contracts in 1999, Ukrenergo -- a Ukrainian electricity producer, sold electricity to Energoalians -- a Ukranian distributor. The latter sold electricity to Derimen, a company registered in the British Virgin Islands, which supplied electricity to the Moldovan state-owned enterprise Moldtranselectro. Derimen paid Energoalians the full amounts due for the electricity purchased, whereas Moldtranselectro failed to pay the amounts due to Derimen. By May 2000, Derimen transferred its right to claim for * Article of September, 2021 1 Judgment of the Court (Grand Chamber) of 2 September 2021, Republic of Moldova v Komstroy LLC , a company the successor in law to the company Energoalians, C-741/19, ECLI:EU:C:2021:655.
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