Historically, the energy sector, with the exception of the transmission and distribution fields, was unregulated and covered with high levels of uncertainty about various legal aspects. However, that started to change gradually after the Cold War since the cooperation between Eastern and Western Europe and the inurement of stable energy flows around countries was more imperative than ever. In order to encourage and secure investments in the energy sector, the contracting parties agreed upon the possibility for compensation claims in order to secure a playing field for all energy companies, without relying on national jurisdictions, which were not always trustworthy in many participating states. In order to ensure this stability and transparency in energy flows globally, a multilateral energy-related treaty was established in 1994, the Energy Charter Treaty (ECT), that came into force in 1998. However, in the late 2010s, as a result of the evolving global energy landscape, the shifting geopolitical realities, and increasing concerns about climate change, the modernization of the ECT came as a matter of discussion in the global energy landscape. The aim of that modernization was to adapt the Treaty to modern energy market trends and new environmental objectives and to address concerns related to sustainable energy transitions and the environmental impact of the ongoing or future energy investments. Many geopolitical and economic factors contributed to the modernization of ECT and make it more imperative than ever. However, the internal factors influencing the effective functioning of the Treaty and its impact on global energy trade have proven to be equally catalytic. The Investor-State Dispute Settlement (ISDS) mechanism is highly used under the ECT and plays an important role in shaping international investment law and energy governance. However, with the constantly evolving energy landscape and especially with the shift towards energy transition, ECT and its arbitration mechanisms, particularly ICSID, are under severe scrutiny. More specifically, the ECT, aiming mainly at investment protection by providing broader investment protection and, at the same time, hindering climate action through Investor-State Dispute Settlement (ISDS) provisions, tended to create an imbalance between the interests of investors and host states. This thesis is organized into four distinct sections, with the structure outlined as follows: Firstly, I provide a brief analysis of the background and origin of the ECT, as well as I refer to some of the fundamental elements and principles that the Treaty addresses. Secondly, I expose the problematic areas of the Treaty that need to be modernized and amended in order to align with the contemporary environmental goals and shifting geopolitical dynamics. In the third part of my thesis, I expose the substantive and technical characteristics of international investment arbitration, which 11 serves as the primary mechanism for legal recourse under the ECT, and at the same time I present the relation between the ECT and EU law as it is reflected by ISDS case law. Last but not least, my thesis concludes with the criticism of the Agreement in Principle concerning the proposed amendments of the Treaty and also with some recommendations related to the reformation of the main problematic areas of the Treaty in order to strengthen its presence in the future.