ExxonMobil Initiates ICSID Arbitration Proceedings against the Netherlands Over the Closure of the Groningen Gas Field

Executive summary: 

On 30 September 2024, ExxonMobil filed an arbitration claim against the Netherlands at the International Centre for the Settlement of Investment Disputes (ICSID), challenging the government’s decision to cease gas extraction in the Groningen field. ExxonMobil argues that the decision, made to prevent earthquake risks, violates its contractual rights and disproportionately impacts its investments under the Energy Charter Treaty (ECT). This case highlights the tension between state measures for environmental protection and energy companies' rights, which have led the European Union to decide to withdraw from the ECT. The EU withdrawal is set for next year. Meanwhile, ExxonMobil is reportedly suing through a Belgian entity, bringing the case into the realm of intra-EU disputes, which EU courts have previously ruled as incompatible with European law.

On 30 September 2024, ExxonMobil initiated arbitration proceedings against the government of the Netherlands before the International Centre for the Settlement of Investment Disputes (ICSID) in Washington in relation to the Dutch government's decision to halt gas extraction in...