SINGAPORE: ECT AWARD SURVIVES AN 'INTRA-EU' CHALLENGE

On 9 January 2026, in DNZ v DOA and another [2026] SGHC(I) 1 the Singapore International Commercial Court (SICC) rejected Poland's application to set aside an Energy Charter Treaty (ECT) award in favour of two UK investors.

The judgement reaffirms Singapore's reputation as a pro-arbitration jurisdiction and is instructive to investors enforcing investment awards against the EU respondents in the city-state.

FACTS

Two UK companies (UK Investors) were majority (72%) shareholders in a project company in Poland; the remaining shares were held through the non-EU parent company of the UK Investors.

Considering Poland breached its obligations under international investment law vis-a-vis their investment, the non-EU parent company commenced arbitration against the Republic under the relevant BIT and the UK Investors did the same under the ECT. Both arbitrations were heard before the same tribunal, who found the State liable under both treaties. In the ECT proceedings, the tribunal awarded damages equal to 72% of the amount awarded in arbitration under the BIT because the parent company ultimately held 100% of the project company directly and indirectly.

POLAND'S CHALLENGE

The Republic challenged the ECT award on five distinct grounds:

• The Intra-EU Objection: relying on Court of Justice of the European Union (CJEU) decisions in Slovak Republic v Achmea, CJEU Case C-284/16 and Republic of Moldova v Komstroy, CJEU Case C-741/19, the State argued that an investor-State arbitration provisions in ECT, Art. 26 were incompatible with the EU law, as the law applicable to the arbitration agreement between the parties. To support the second limb of this argument, the Republic relied on a 'three-stage test' formulated by the Singapore Court of Appeal in Annupam Mittal v Westbridge II Investment Holdings [2023] 1 SLR 349;

• The Subject-Matter Objection: the State argued that the tribunal lacked jurisdiction ratione materiae because the UK investors did not have an 'investment' within the meaning of ECT, Art. 1(6) and, therefore, did not enjoy the investment treaty protection. According to the State, the UK investors' direct and indirect shareholding did not satisfy the so-called 'Salini criteria' in Salini Costruttori S.p.A and Italstrade S.p.A. v Kingdom of Morocco [I], ICSID Case No. ARB/00/4;

• The Fork-in-the Road Objection: Poland contended that the tribunal did not have jurisdiction ratione voluntatis since the State witheld its consent to arbitrate investment disputes that had already been submitted to resolution. Given that the ECT proceedings were commenced after the BIT proceedings, the Republic alleged their commencement was in breach of the 'for-in-the-road' provisions in the ECT. Art. 26(2)-(3) and Annex ID;

• Breach of Public Policy: the ECT award violates Singapore's public policy, as it 'governs the subjects of a foreign legal community [i.e. EU] but violates the fundamental norms of that legal community';

• Breach of Natural Justice: the Republic argued that the ECT award must be set aside, 'because the Tribunal made certain errors when calculating the damages due to the UK Investors and did so without seeking the parties' input on the appropriate calculation methodology or inviting the parties to submit updated valuation models'.

SICC'S DECISION AND REASONING

The SICC dismissed the Republic's challenge entirely, finding, inter alia:

• On the Intra-EU Objection: that on application of the conflict-of-laws rules the arbitration agreement the UK Investors invoked in the ECT proceedings was governed by international law, not the EU law. Under international law the arbitration agreement in questions remains valid; the SICC as a court of a non-EU jurisdiction is not bound by Achmea and Komstroy decisions;

• On the Subject-Matter Objection: that the tribunal was correct to assume jurisdiction because the UK Investors' shareholding in the project company was covered by the ECT's definition of 'investment' and to enjoy the ECT's protection need not satisfy the 'Sailini criteria' originating from interpretation of the ICSID Convention, a treaty that does not define the term 'investment', unlike the ECT;

• On the Fork-in-the-Road Objection: that the tribunal was right to dismiss the State's jurisdictional objection on that ground, not least because the UK Investors and their non-EU parent company are three dinstinct 'investors' for the purposes of the ECT's relevant provisions;

• On the Breach of Public Policy: that the high threshold for challenging award on that ground is not met in the present case; a mere fact the ECT award allegedly violate the EU law, i.e. law foreign to SG as the forum, is not sufficient to invoke public policy;

• On the Breach of Natural Justice: that there was no breach of the audi alteram partem principle; the tribunal approached the issue of quantum in a transparent and predictable manner, and it was the State's own decision not to supply the arbitrators with an updated calculation.

CONCLUSION

The judgement is a remarkable example of Singapore's neutrality as the seat and the competence of the city-state's judiciary to deal with complex and novel issues of international law. To wit, rather than giving effect to the Achmea and Komstroy decisions (which arguendo would have been a much 'safer' and 'simpler' option), the SICC undertook a proper VCLT-based analysis of the relevant treaties. The SICC's analysis and findings are consistent with those of the Swiss Federal Supreme Court that also rejected the principle of the 'EU law primacy' and its application in the context of the ISDS proceedings under the ECT (see EDF v Spain, Swiss Federal Supreme Court, Case No. 4A_244/2023).