IIAs are known to pose various challenges to states, ranging from costly arbitration to delays or abandoning of regulatory action in the shadow of possible litigation. These important costs of IIAs raise the question of whether the treaties offer commensurate advantages to states that enter into them. Central among these claimed positive effects of IIAs is that they improve governance conditions (the rule of law) in host countries. It is on this point that Singapore’s experience with IIAs is particularly instructive. Singapore’s experience, as presented in this essay, highlights the challenges that IIAs can pose in even the best of governance environments and, in turn, raises questions as to the extent to which the treaties are calibrated to the goals that policy-makers and advocates set for them.
This article explores the meaning of the term “frivolous” as understood by the governments participating in the UNCITRAL WGIII ISDS reform process. It argues that participating states have focused on the procedural aspects of the problem by identifying ways to limit frivolous claims without undertaking the important substantive task of defining such claims.
The conflict between traditional miners in Marmato and Canadian transnational mining companies: Another ISDS dispute over natural resources in Colombia
This article provides historical context for the shift in the transnational legal order that governs mining in Colombia and has provoked an increasing number of socio-political conflicts, leading to ISDS claims.
In accordance with the third phase of its mandate, as well as the work planning and resourcing plan adopted at its 40th session, UNCITRAL Working Group III (WGIII) has continued its work on ISDS reform in 2022, with a focus on the draft code of conduct for international investment adjudicators, which was already the sole topic on the agenda of the 41st session and the subject of an informal meeting in December 2021.
This article provides an initial assessment of the ECT-based arbitration risk flowing from the COP 26 pledges due to their impact on fossil fuel investments in ECT contracting parties. It further estimates how these impacts could translate into investor–state arbitration claims based on past and ongoing cases in the energy sector.
ICSID tribunals fail to address the imbalance between sustainable development principles and investment protections
The importance of linking sustainable development and FDI has garnered increasing attention in recent years, and IIAs increasingly include sustainable development provisions. However, the architecture and functioning of the investment regime make application of these standards difficult.
The recently rendered decision in Eco Oro v. Colombia highlights many of the problems with policy exceptionalism. Most importantly, it suggests that states cannot, by larding their investment treaties with exceptions and carve-outs, simply avoid reckoning with the fundamental challenges facing the investment treaty system.
A comparative approach to compensation in international property law claims: what lessons for international investment law? An interview with lead author, Esmé Shirlow.
The increasing size of awards of compensation made under IIAs is drawing greater scrutiny over the approaches that investment tribunals use to arrive at these—at times staggering—amounts. One question being asked is: How are things being done elsewhere? By contrasting these approaches with approaches used by international investment tribunals, this article seeks to draw out some key policy considerations for the reform of compensation principles.
They concern you more than you know: On the perils and potential of international investment agreements for the Agreement on TRIPS and COVID-19 discussions at the WTO
Talks on a possible COVID-19-related Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) decision aimed at scaling up vaccine and therapeutics production and equitable distribution continue, despite the postponement of the 12th WTO Ministerial Conference. Without coordination between a TRIPS decision and WTO members’ IIA obligations, these obligations could significantly reduce any decision’s effectiveness.
Of all fossil fuels, coal has the greatest climate impact. However, sovereign decisions to phase out coal inevitably affect the investment of coal power plant operators, frequently leading to disputes concerning compensation for lost profits.
An Interview With Esmé Shirlow on Judging at the Interface: Deference to state decision-making authority in international adjudication
An interview with Esmé Shirlow about her new book, Judging at the Interface: Deference to State Decision-Making Authority in International Adjudication.
(Français) Frazer Solar GMBH c. le Royaume du Lesotho
The ICSID tribunal in Infinito Gold v Costa Rica upholds several claims but declines to award damages. The majority of the tribunal found breaches of the FET standard but damages too speculative
Infinito Gold Ltd. v. Costa Rica, ICSID Case No. ARB/14/5
This article takes stock of UNCITRAL WGIII on ISDS reform discussions on the regulation of third-party funding.
An Interview with Nicolás Perrone on Investment Treaties and the Legal Imagination: How Foreign Investors Play By Their Own Rules
This article is an interview with Nicolás Perrone on his new book, Investment Treaties and the Legal Imagination: How Foreign Investors Play by Their Own Rules.
As we reported, German-owned energy company Uniper put the Netherlands on notice of an investment dispute last year, following the announcement of the country’s plan to phase out coal-burning power plants by 2030. Alongside RWE, another German energy company, Uniper made good on that threat earlier this year; both companies initiated ICSID claims lodged under the ECT this spring.
The ways in which the investment protection regime frames disputes between states and investors misses that these disputes, particularly when they relate to the extractive industry, are embedded in complex social relations. This article calls for a reimagining of these disputes and efforts to resolve them.
This article examines a contract-based dispute, P&ID v. Nigeria, which highlights issues of corruption and lack of transparency in this type of dispute settlement. It concludes that, given the significant public interests at stake in investor–state arbitration, including the possibility that arbitration may facilitate the corrupt transfer of public funds to private actors, they should not be conducted in private.
This article focuses on debunking assumptions surrounding the use of balancing and proportionality in international investment arbitration as a way of successfully reconciling competing interests and conflicting protection obligations vested upon host states.
French consortium kicks off an ICSID claim against Chile after USD 37 million loss due to COVID-19 Pandemic
On January 19, 2021, the main shareholders of a consortium controlling the billion-dollar concession for Santiago’s Arturo Merino Benítez international airport informed Chilean President Sebastián Piñera of their intention to initiate an ICSID claim. The investors claimed they had suffered losses as a consequence of measures taken in response to the COVID-19 pandemic.
Reconciling the rights of multinational companies under IIAs with the tort liability caused by their subsidiaries
Because of their structure, multinational corporations (MNCs) can resort to IIAs to protect their subsidiaries. At the same time, by virtue of the principles of corporate separation and limited liability, MNCs can take advantage of their structure to avoid liability for the damages caused by their subsidiaries. This paper highlights the need for a more balanced approach with regards to the rights and obligations of MNCs under IIAs.
Does the investment treaty regime promote good governance? The case of mining in Santurbán, Colombia
Investment treaties and arbitration are argued, by proponents of the regime, to contribute to “good governance” in host states. This article, based on an empirical study of mining investments in the Colombian páramo, argues that the conception of good governance promoted by investment arbitration is incomplete and does not adequately consider the role of courts in providing checks and balances.
On November 9, 2020, the Asian Academy of International Law hosted a virtual event on the use of mediation in investor–state dispute settlement. This event is one of several being organized by UNCITRAL in parallel to the formal meetings of the Working Group III on investor–state dispute settlement reform.
Judgment C-252 of 2019 of the Constitutional Court of Colombia: Change of precedent on the control of BITs
Judgment C-252 of the Constitutional Court of Colombia, on the constitutionality of the Colombia–France BIT, has aroused interest for being the response of the constitutional judge to the way in which foreign investment protection clauses are incorporated into domestic law.
Ivory Coast’s New Investment Code: Focus on issues related to sustainable development and dispute settlement
Ivory Coast adopted a new investment code on August 1, 2018. This new law features a variety of innovations ranging from the revitalization of the institutional framework to the reconfiguration of tax rules to new obligations on investors.
The idea of entrusting party-appointed arbitrators with powers to decide investor–state disputes through final and binding awards, inherited from commercial arbitration and traditionally accepted as appropriate, now causes discomfort among critics.
UNCITRAL secretariat publishes documents to be considered at October 2019 session of Working Group III on ISDS reform
Delegates to the UNCITRAL Working Group III process on multilateral ISDS reform will meet again in Vienna during the week of October 14–18, 2019.
ICSID rule amendment process: Third working paper released in August 2019, consultation with states scheduled for November 2019, approval expected for October 2020
On August 16, 2019, the ICSID secretariat released the third working paper featuring proposed rule amendments, based on inputs from member states and the public.
The European Council has approved negotiating directives for the EU’s participation in talks to modernize the ECT, confirming its decision during a meeting on July 2, 2019.