On 2 September 2021, the Grand Chamber of the Court of Justice of the European Union handed down its ruling on a request for a preliminary ruling from the Court of Appeal, Paris, in the matter of Republic of Moldova v. Komstroy LLC concerning the interpretation of Articles 1(6) and 26(1) of the Energy Charter Party.

The alleged investment consisted of a claim for payment for a supply of electricity, which the original creditor had assigned to Komstroy.

An ad hoc tribunal had found in its award, delivered in Paris, that the Republic of Moldova had to pay the amount claimed by it to Komstroy.

The Court of Appeal, Paris, had set aside the award, on the ground of lack of jurisdiction, since the sale of electricity was not to be considered as an economic contribution to the Host State.

The Court of Cassation had set aside the appellate judgment on the ground that the Court of Appeal had added to the concept of investment a condition, the economic contribution to the Host State, which had not been provided for by the ECT and referred back the parties to the appellate court which referred to the European Union’s Court of Justice the question whether a claim from a sale of electricity is to be considered an investment in the absence of any economic contribution to the Host State.

In its ruling, the Court of Justice has held that a contract for the sale of electricity does not contribute economically to the Host State and is consequently not an investment.

A sale of electricity amounts in fact just to an exchange between a delivery of electricity and its consideration.

Such a “do ut des” exhausts that contractual relationship. It cannot consequently be confused with a transaction which provides an economic contribution to the Host State, what – it is submitted to – requires an activity which provides, in addition to that further economic benefits to the Host State.

Surprisingly not only an arbitral tribunal, but even the Court of Cassation took the opposite view