Investor–State Disputes Against the EU: Who Is the Respondent, and What Changed in June 2025

Investment protection | JVS Law

On 28 June 2025 the European Union ceased to be a party to the Energy Charter Treaty. For a Ukrainian company holding an energy asset in an EU Member State, that date is worth marking in the file — it is the line that decides, twenty years from now, whether an arbitration claim is still available at all.

The question this article answers is narrower and more practical than “can I sue the EU”: who exactly sits opposite you, and who pays if you win.

Regulation (EU) No 912/2014 of 23 July 2014 (OJ L 257, 28.8.2014, p. 121) does two things, and only two.

It decides who acts as respondent. Where the dispute concerns treatment afforded by the institutions or bodies of the Union, the Union answers. Where the treatment came from a Member State, that Member State normally answers — and only in exceptional circumstances does the Union step in instead.

It decides who bears the cost. The party whose treatment gave rise to international responsibility carries the award and the costs of the proceedings. The respondent’s chair and the invoice are, in the ordinary case, in the same hands.

What the Regulation deliberately does not do is give an investor any right. It creates no cause of action, no forum, no standard of protection. It is an internal allocation rule of the Union — a piece of housekeeping between Brussels and the capitals. Read as anything more, it will mislead you.

It applies to claims submitted to arbitration after 17 September 2014 concerning treatment afforded after that date.

Here is the trap, and it catches people who read only the title.

The Regulation governs disputes brought under an international agreement to which the Union itself is a party. That single condition removes most of what a Ukrainian investor actually holds.

Ukraine’s bilateral investment treaties with individual Member States — the instruments behind the majority of Ukrainian claims in Europe — are agreements between Ukraine and that State. The Union is not a party to them. The Regulation has nothing to say about such a case: the respondent is the State named in the treaty, and the allocation question never arises.

The practical corollary: before asking who the respondent is, establish which instrument you are actually invoking. The answer to the first question is determined entirely by the second.

The Energy Charter Treaty was the multilateral instrument where the two conditions met: Ukraine is a Contracting Party, the Union was one too, and Article 26 gives an investor a direct route to arbitration. That is the setting the Regulation was built for.

The Union notified its withdrawal on 27 June 2024, following the Council’s final decisions of 30 May 2024, and the withdrawal took effect on 28 June 2025. Seventeen Member States remain parties to the Treaty in their own right.

Two consequences follow, and they pull in opposite directions.

The sunset clause keeps the door open — for a while. Article 47(3) of the Treaty continues its protection, for investments existing on the date the withdrawal takes effect, for twenty years from that date. Investments in place on 28 June 2025 therefore remain within the Treaty’s reach until 2045.

New investments do not get in. An asset acquired after that date cannot rely on the Treaty against the Union. Whether it can rely on it against a Member State that stayed in is a separate question, answered by that State’s own status — and, where the investor and the State are both inside the EU, by the Court of Justice’s case law on intra-EU arbitration, which is a different discussion entirely.

So the date is not an ending. It is a cut-off that sorts your portfolio into two piles, and the pile an asset falls into is fixed by when it was made.

• The instrument. A bilateral treaty with one State, or the Energy Charter Treaty? Everything downstream — respondent, forum, applicable protections — turns on this and nothing else.
• The date the investment was made, measured against 28 June 2025 if the Energy Charter Treaty is your route. This is a documentary question, and it is worth settling with documents now rather than in a memorial later.
• Whose act you are complaining about — a Union body, or a national authority. Under an agreement where the Union is a party, this is what determines who you name.
• The enforcement end. An award is a piece of paper until a court gives effect to it; we look at interim measures and the limits of enforcement separately.

None of these are questions for the day the dispute starts. They are questions for the day the investment is structured.

First published on 22 September 2014 as a note on the adoption of Regulation (EU) No 912/2014. Rewritten in August 2026 around the question the Regulation actually answers, and updated for the EU’s withdrawal from the Energy Charter Treaty; the law is stated as at that date.

The author’s work on the enforcement side of these disputes includes the textbook International Civil Procedure and research on the recognition of foreign awards and judgments — the stage at which an investment claim either turns into money or does not.