Former CJI DY Chandrachud named appointing authority in arbitration between German company and Russia

Former Chief Justice of India DY Chandrachud has been made the appointing authority in the arbitration proceedings initiated by German energy company Wintershall Dea against the Russia under the Energy Charter Treaty (ECT)..His appointment follows the resignation of Mexican lawyer Eduardo Siqueiros, who previously held the position.As the appointing authority, Justice Chandrachud would be responsible for addressing procedural matters related to the composition of the arbitral tribunal. This includes deciding on a pending challenge to the appointment of two of the arbitrators already appointed in the case and appointing a third arbitrator if necessary. The appointing authority does not hear the case or decide on the merits of the dispute..The arbitration arises from Russia’s alleged expropriation of Wintershall Dea’s investments in joint energy projects. These include the company’s stakes in the Yuzhno-Russkoye gas field and the Achimov development project in Western Siberia. In December 2023, Russian presidential decrees transferred these stakes to newly created Russian entities, which were later offered for sale to Gazovyye Tekhnologii, a subsidiary of Gazprom. Wintershall Dea has contended that these actions violated protections guaranteed under the ECT and a bilateral investment treaty between Germany and Russia.In response to the arbitration, Russia’s General Prosecutor’s Office filed a claim before the Moscow Arbitrazh Court against Wintershall Dea, its legal counsel Aurelius Cotta and all three tribunal members. The Russian court then issued an injunction ordering the parties to halt the arbitral proceedings and threatened a €7.5 billion fine if the hearing continued..Following the resignation of one arbitrator and the challenge to the appointment of the remaining two, the proceedings were temporarily suspended. However, on May 24 this year, the two remaining arbitrators issued a procedural order resuming the case and directed Russia to withdraw its domestic legal actions..Justice Chandrachud will now decide whether the remaining arbitrators can continue and if needed, nominate a third member to reconstitute the tribunal in accordance with the rules applicable to the ECT arbitration..The ECT is a multilateral agreement aimed at promoting international cooperation in the energy sector. It includes provisions for the protection of foreign investments, non-discriminatory transit of energy and dispute resolution through international arbitration. The ECT allows foreign investors in the energy sector to bring claims directly against host states for alleged treaty breaches, including unlawful expropriation and denial of fair and equitable treatment..Justice Chandrachud served as the 50th Chief Justice of India from November 9, 2022 to November 10, 2024. During his tenure, he led the Supreme Court through several institutional reforms and heard many Constitutionally-important cases.