The Russian invasion of Ukraine has not only altered the geopolitical landscape but also brought plenty of legal disputes in the energy sector. From broken supply chains and force majeure battles to expropriation claims and sanctions-related conflicts, the legal consequences are essential and still evolving. As energy security becomes increasingly tied to legal certainty, the dispute resolution mechanisms will occupy a pivotal role of managing the consequences of geopolitical shifts. Thus, global energy markets will be reshaped in a new construction according to the current geopolitical challenges.
Undoubtedly, the intensified arising of legal disputes will lead to the amendment measures in the local and international energy legislations. These disputes are derived from contractual disagreements and arbitration proceedings related to terminated energy supplies, as well as broader issues concerning energy security, sovereignty over infrastructure, and the reconfiguration of international energy law. Additionally, the disputes brought out several important matters such as force majeure, sanctions as ground for non-performance, sovereignty, ownership and compensation.
However, it is worth mentioning the Energy Charter Treaty which was adopted after the collapse of the Soviet Union as an effective legal instrument to resolve the disputes in the energy field. The main goal of this multilaterial treaty is ensuring the protection of investors operating in other contracting states. Broadly speaking the ECT stimulates investment, supply security, and supports the liberalization of global trade.
It is possible to assert that BITs offer Ukraine and investors reliable provisions to obtain compensation for losses resulting from different complex actions such as breach long-term contracts, expropriation and transit disputes. On the other hand, the concept of war clause in the ECT could have served as a viable mechanism to make Russia responsible for the various damages it has caused to Ukraine's energy sector during the war. Although article 12 (2) of the treaty does not literally use the war clause as a term, nevertheless it provides the accurate definition to understand it.
At the same time there is another point which necessarily attracts attention: is still Russia obliged to comply with the provisions of the ECT? Interestingly, Russia signed the ECT, but hasn’t ratified it since 1994.[1]
It should be noted that according to article 45 (1), the provisional application of the ECT becomes effective regarding the countries which didn’t ratify the treaty.[2] However, the Russian side always argues that the ECT cannot be applied provisionally to Russia because it contradicts local legislation. To draw a parallel, it is important to remark that although Russia signed the Convention on the Settlement of Investment Disputes (ICSID) on 16 June 1992, it has not yet come into force.[3]
For instance, concerning the claim of Yukos arbitration, being heard by a tribunal under the Permanent Court of Arbitration (PCA) in the Hague, it was argued that Russia’s withdrawal from the Energy Charter Treaty (ECT) should not impact the case. There also was reference to article 45(3) of the ECT, which outlines the rules for ending the provisional application of the treaty.[4] According to this article, even if the provisional application ends, the investment protections envisaged in Article III will continue to apply for 20 more years for investments made by nationals of ECT signatory countries during the time the treaty was provisionally applied.[5]
One of the most significant obstacles in bringing claims against Russia is the enforcement of any rendered arbitral award including intellectual property rights.[6] As a result, investors may be forced to seek enforcement in a third country where Russian assets are located.[7] Nonetheless, the enforcement of awards against the States may be faced with complications as the doctrine of sovereign immunity generally protects most State assets from being seized.[8]
The imposed sanctions pushed the companies to explore alternative destinations for arbitration seating. Due to the increasing presence of Russian businesses in Asia, the arbitral institutions in the region could have proposed suitable venues for arising disputes.
Despite certain barriers in financial operations and the selection of applicable laws for dispute resolution, the Singapore International Arbitration Centre (SIAC) and the Hong Kong International Arbitration Centre (HKIAC) are the vibrant examples of such venues.[9]
Therefore, the foreign investors systematically encounter the challenging circumstances which made them put in consideration the ongoing political and financial risks associated with the dispute settlement issues.
Generally, it is obvious that the Russian side will continue to conduct an aggressive policy toward Europe. While Western countries imposed substantial sanctions on Russia which hampered energy trade, affecting payment mechanisms, transportation, and insurance for energy shipments, Gazprom, in turn, decided to suspend supplies to several European countries which refused to pay in rubles. Though it could be considered a countermeasure, the “weaponization of energy” strategy implemented by Russia will nonetheless occupy a pivotal place on the EU's foreign policy agenda.
Taking into account the previous energy disruptive measures carried out by Russia, the EU launched comprehensive energy diversification strategies, investing in renewables, LNG imports and new infrastructure. Hence, the EU went further by adopting the REPowerEU plan which is supposed to facilitate its green transition goals.[10] In addition to encouraging industrial decarbonization and creating green jobs, the plan also covers a strategy for diversifying energy supplies.[11]
Apparently nowadays, regarding the EU, energy security and independence are linked to reducing imports of Russian fossil fuels. In general, the war has accelerated the development of the renewable energy industry and the import of liquefied natural gas (LNG) from the United States, Qatar, and Norway.
It cannot be ruled out that, in order to achieve the EU's long-term energy efficiency and sustainability goals, it may even be necessary to determine alternative energy suppliers. In this context there is vast energy collaboration with Azerbaijan, through the Southern Gas Corridor project encompassing South Caucasus Pipeline, Trans-Anatolian Pipeline and the Trans-Adriatic Pipeline.[12] The EU-Azerbaijan partnership also includes renewable energy cooperation. Additionally the continuous increasing volume of Kazakh oil transported through the Baku-Tbilisi-Ceyhan (BTC) pipeline illustrates the emerging role of the Caspian region.[13] Finally, Türkiye has an important role in the energy security of Europe, recommending itself as a trustable energy transit hub between energy rich regions (the Middle East, the Caspian Sea, and Central Asia) and energy markets in Europe.
Another key energy player is Algeria, which, due to its strategic geographical location, plays a valuable role in supplying natural gas to Europe through a network of major pipelines such as Trans-Mediterranean Pipeline (TransMed), Medgaz Pipeline.[14] Before to its closure, Maghreb-Europe Gas Pipeline was designated to transport Algerian gas to Spain and Portugal.[15] As a result it led to increased reliance on the Medgaz pipeline and liquefied natural gas (LNG) delivering to meet Iberian energy demands. These pipelines are vital to ensuring energy security for European countries.
Thus, under the auspices of shifting geopolitical dynamics and strong collaborative efforts, the EU should follow a foreign policy based on constructive relationships founded on mutual and equal terms.
To summarize, Russia is a large producer and exporter of fossil fuels in the global energy market and often prefers to use them as diplomatic leverage. It’s easy to assume that countries that are strongly focused on energy exports, may not escape from economic, social and political collapse. Undoubtedly, the national economies of these countries will be negatively affected by the absence of a well-structured economic model oriented on the growth of non-fossil fuel industries. As a result it will lead to a considerable reduction of geopolitical influence in the different parts of the world.
The energy disputes arising from the Russian invasion of Ukraine will continue to reshape global energy governance, involving also international investment law, public international law, and energy transition regimes.
[2] Ibid.
[3]https://icsid.worldbank.org/about/member-states/database-of-member-states
[5] Ibid.
[6] https://www.acerislaw.com/arbitration-against-russia/
[7] Ibid.
[8] Ibid.
[10] https://commission.europa.eu/topics/energy/repowereu_en
[11] Ibid.
[12] https://www.tap-ag.com/about-tap/the-big-picture/the-southern-gas-corridor
[13]https://thediplomat.com/2025/03/kazakhstan-aims-to-increase-oil-exports-via-btc-pipeline/
[14]https://www.realinstitutoelcano.org/en/analyses/another-round-of-algerian-gas-for-europe/
[15]https://www.newarab.com/analysis/how-algeria-emerging-europes-energy-partner-choice