GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
regarding its wind energy regime, which alleg- edly affected the claimants’ wind energy pro- jects, resulting in a loss to their investments. • 2022–2023 – Klesch and Raffinerie Heide v Germa - ny (ICSID Case No ARB/23/49) and AET v Germany (ICSID Case No ARB/23/47): (a) shortly before Germany formally withdrew from the ECT (see also 1.1 National Position ), two ECT claims were lodged: Azienda Elettrica Ticinese (AET) v Germany (a Swiss investor in a coal plant) and Klesch v Germany (a UK investor in an oil refinery). In AET v Germany , the claims arise out of the government’s 2020 decision to prohibit the production of energy through coal-fired power plants, mandating the shutdown (by 2031) of a coal-fired power plant in Lünen in which the claimant has invested. Shortly after, several entities belonging to Klesch Group have simultaneously lodged a trio of arbitration proceedings against Den- mark, Germany and the European Union. The claims stem from the EU Council Regulation 2022/1854 on an emergency intervention to address higher energy prices which Germany implemented in late 2022. This Regulation adopted measures aimed at (i) reducing elec- tricity consumption; (ii) introducing price caps on certain energy producers; and (iii) it also introduced a windfall profit tax (also “solidarity contribution” of 33% on excess revenue gener- ated from oil, gas, coal and refinery activities). German investors on the other hand have been involved in over 85 investor-state proceedings. The latest cases which commenced in 2024 are Hüseyin Avni Kiper and Yusuf Aydemir v Federal Democratic Republic of Ethiopia (PCA Case No 2024-44) in the education sector and Wintershall Dea GmbH v Rus- sian Federation (I) and Wintershall Dea GmbH v Rus- sian Federation (II) concerning the extraction of crude petroleum and natural gas. 1.6 Reaction to Awards Made Against the State Since the first adverse award against Germany was issued in December 2024 in Strabag SE, et al v Ger- many (ICSID Case No ARB/19/29) (see also 1.5 Major Arbitrations ), the state has adopted an offensive
approach against awards rendered under the ECT. Germany filed a request for rectification under Article 49 of the ICSID Convention, arguing the award con- tained factual or clerical errors warranting correction. Simultaneously, Germany requested a stay of enforce- ment of the award until the decision on the rectifica- tion is rendered. The tribunal rejected the latter due to a lack of authority to order the stay. Meanwhile, Strabag has filed a petition in a US court to recognise and enforce the award. In August 2025, Germany initiated ICSID annulment proceedings (under Article 52 of the ICSID Convention). The situa- tion is in legal limbo, pending a decision on the annul- ment. 2. Investment Treaties, Free Trade Agreements and Investment Laws 2.1 Bilateral and Multilateral Investment Treaties Germany has ratified 134 BITs. 113 are still in force. The German Ministry for Economics and Energy (BMWE) provides an exhaustive list on its homepage. The list includes the agreements that have entered into force, as well as expired agreements and those that have been signed but have not yet entered into force. For ongoing negotiations, see also 2.3 Free Trade Agreements . 2.2 Model Bilateral Investment Treaty The treaties outlined in 2.1 Bilateral and Multilateral Investment Treaties are based on the 2008 Model BIT, which replaced the 1998 Model BIT and contains the following basic protections: • fair and equitable treatment (Article 2); • full protection and security (Article 2); • protection against arbitrary or discriminatory meas- ures (Article 2); • national treatment (NT) and most-favoured-nation (MFN) treatment (Article 3 – with the caveat that measures to be taken for reasons of public secu- rity and order shall not be deemed less favourable treatment);
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