Abstract
The regulatory measures that States takes in areas of public interest may have an impact on the rights of foreign investors, which are protected by international investment agreements (‘IIAs’) from expropriation and unfair and inequitable treatment. Provisions establishing the State right to regulate without compensation vis-a-vis foreign investors have been inserted into IIAs, particularly post-2010. They aim to recalibrate the conflicting interests of the State with investors’ rights. Often drafted generally (with general and security exceptions), such provisions are becoming more and more specific to certain areas, including corporate social responsibility, the environment, and most recently even climate change. In the light of sustainability, the conditions of the implementation of the right to regulate and the limits encountered in its interpretation by arbitrators reveal the importance of a better drafting of relevant provisions, reflecting the scope that the parties wish to give to such clauses.
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Notes
- 1.
See the chapter by Ottavio Quirico on the EU and investment in this volume.
- 2.
‘Reafirmando el derecho de cada Parte Contratante a regular las Inversiones hechas en su Territorio para cumplir objetivos legítimos de bienestar público, que se pueden lograr sin disminuir sus estándares de salud, orden público y seguridad, derechos laborales y de medio ambiente de aplicación general.’ Free translation by the author.
- 3.
‘(b) Il est entendu que, sauf dans de rares circonstances où l’impact d’une mesure ou d’une série de mesures est si grave au regard de leur but qu’elles semblent manifestement excessives, les mesures réglementaires non discriminatoires d’une Partie qui sont conçues et appliquées afin de protéger des objectifs légitimes de bien-être public, tels que la santé publique, la sécurité et l’environnement, ne constituent pas une expropriation indirecte.’
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Accaoui Lorfing, P. (2023). Unsustainable Investment: Sco** Expropriation without Compensation. In: Quirico, O., Kwapisz Williams, K. (eds) The European Union and the Evolving Architectures of International Economic Agreements. Springer, Singapore. https://doi.org/10.1007/978-981-99-2329-8_6
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