Awards and settlements of the international arbitrations put forward by breaking the law of the Energy Charter Treaty are sometimes in the hundreds of millions of dollars.

In 2014, the Yukos cases were decided in favour of the claimants on the basis of the treaty with a record-breaking US$50 billion award, although appeals continue in courts in the Netherlands.

The Energy Charter Treaty has been criticized for being a significant obstacle to enacting national policies to combat climate change, and for actively disincentivizing national governments from compliance with recent international climate treaties such as the Paris Agreement due to the threat of significant financial loss.

The European Union and Euratom took the final and formal step of exiting the Energy Charter Treaty, which will take effect one year after the depository has received the notification.

The end of the Cold War offered an unprecedented opportunity to overcome previous economic divisions between the nations on both sides of the Iron Curtain.

Negotiators also succeeded in assuring Austria and Switzerland that they would not bear an undue transit burden for energy resources.

[7] The treaty is a legally binding multilateral agreement covering investment promotion and protection, trade, transit, energy efficiency and dispute resolution.

The treaty was signed in Lisbon in December 1994, together with a "protocol on energy efficiency and related environmental aspects" (PEEREA[8]).

The International Energy Charter was signed on 20 May 2015, by 72 countries plus the EU, Euratom and ECOWAS at a Ministerial conference hosted by the government of The Netherlands.

[11] Members consist of Countries and Regional Economic Integration Organisations that have signed or acceded to the treaty and are represented in the Conference and its subsidiary bodies.

Additionally, the treaty covers the trade of all energy materials (e.g. crude oil, natural gas, wood fuel, etc.

The choices of arbitration rules are: The most significant claims against Russia, pertaining to the Yukos decision, arose under the provisions of Article 26.

This is promoted through policy discussions based on analysis and exchange of experience between the member countries, invited independent experts and other international organisations.

The implementation of PEEREA provides its member countries with a range of best practices and a forum in which to share experiences and policy advice on energy efficiency issues.

It became clear during the meeting that a unanimous decision could not be reached on the basis of the compromise text; a complicating factor was that energy issues, including transit, were a subject on the bilateral agenda for the European Union and Russia in the context of Russian negotiations for accession to the World Trade Organization.

[28] This work proceeded until October 2011, when the European Union argued that, given current developments in the international energy situation and the lack of progress in negotiations and consultations, it appeared no longer opportune to continue talks.

In October 2006, German chancellor Angela Merkel and French president Jacques Chirac proposed the creation of a balanced energy partnership between France and Germany, representing the European Union, and Russia.

[49] Notwithstanding the termination of provisional application of the treaty by Russia, the provisions regarding dispute settlements and investment protection are still in force for additional twenty years.

[49] GML, previously known as Menatep, the principal shareholder in Yukos, is suing Russia for more than $100 billion in an international arbitration case under the treaty.

[50] In July 2014, the international arbitration panel in The Hague unanimously ruled in favour of the shareholders, awarding $50 billion damages for the seizure of assets and dismantling of Yukos.

Article 19 of the treaty, requires that each Contracting Party minimise, in an economically efficient manner, harmful environmental impacts arising from energy use.

There are special provisions, based on the WTO model, for the resolution of inter-state trade issues and the treaty also offers a conciliation procedure for transit disputes.

[65] For example, the German energy company RWE has sued the Dutch government for €1.4 billion in compensation for the phasing out of coal power plants.

However, the Treaty has a "sunset clause" that allows lawsuits to be filed for 20 years after the departure of a member; Italy left the ECT in 2015, but was successfully sued in 2022.

[70] In 2020, Julia Steinberger and Yamina Saheb (both co-authors of the IPCC Sixth Assessment Report)[71] initiated an open letter that calls for the withdrawal from the ECT.

The letter has been signed, for example, by Sandrine Dixson-Declève, Connie Hedegaard, James K. Galbraith, Helga Kromp-Kolb, Rachel Kyte, Thomas Piketty, Olivier de Schutter and Jean-Pascal van Ypersele.

[75] As of October 2022, Spain, the Netherlands and Poland intended to withdraw from the ECT, and Germany, France and Belgium were "examining their options".

[76] On 21 October 2022, France announced that it would leave the treaty, citing a desire to accelerate nuclear and renewable energy use before fossil fuels.

[80] In July 2023 the European Commission formally proposed legislation for both the union and its member states to make a "coordinated and orderly" simultaneous withdrawal from the ECT.