If You Are Not Part of the Solution, You Are the Problem: Article 37 of the EU Charter as a Defence for Climate Change and Environmental Measures in Investor-State Arbitrations – Joint 2nd Prize Winner Essay competition 2020

Climate change is severely impacting the survival of humankind on earth. In the European Union (EU), the Charter of Fundamental Rights (EU Charter) codifies environmental protection as part of the EU’s corpus of fundamental rights protection and states that “a high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the EU and ensured in accordance with the principle of sustainable development”. By virtue of this article, the EU has elevated environmental protection to the level of constitutionality. Environmental concerns have played a critical role in investor-state arbitration. This article submits that Article 37 of the EU Charter might be a viable defence for Member States of the EU (Member States) that adopt climate change and environmental measures. Such defence would not consist of a jurisdictional challenge based on the Achmea decision but of a defence based on the applicable law which protects the notion of sustainable investment enshrined in the applicable international investment agreement. Article 37 of the EU Charter could, therefore, operate a powerful tool to foster environmental protection in investor-state disputes and, therefore, address one of the most widespread complaints in the backlash against investor-state arbitration.

Environmental Claims by States in Investment Treaty Arbitration

Recent years have witnessed a number of counterclaims by State parties in investment treaty arbitrations based on environmental concerns and the need to protect local resources and safeguard the associated human rights of local communities. This article charts the development of the case law in this context, starting with the Urbaser v. Argentina award of December 2016, before examining its impact on the cases that followed in its wake, notably including the respective 2017 and 2018 awards in Burlington v. Ecuador and Aven v. Costa Rica. It concludes by considering whether these recent cases mark the beginning of a new era of international law claims which finds a parallel in the broader paradigm shift in public discourse on the critical role of all stakeholders in the conservation of the environment, and which may one day result in investors facing standalone claims as the respondent in future investment treaty claims brought by States.

Investment Arbitration and Police Powers: Emerging Issues

The doctrine of police powers is increasingly raised as a defence by host States in investment arbitration proceedings, in particular in the context of claims with an environmental component. The succinct analysis below highlights that while the doctrine can effectively be enforced by arbitral tribunals in determining that a measure taken by a host State and resulting in loss of property of an investor does not constitute expropriation, certain concerns with the application of this doctrine must still be addressed. The limitations to the police powers, as well as the issue of burden of proof, as recently discussed in Les Laboratoires Servier v. Poland, are few of the matters of concern. Further, the discussion is even more timely in the context of the investor-State dispute settlement reform and the discussions in the UNCITRAL Working Group III.

Theodoros Adamakopoulos and Others v. Republic of Cyprus, ICSID Case No ARB/15/49, Decision on Jurisdiction, 7 February 2020

This case note examines the findings of the Tribunal in the Decision on Jurisdiction in Adamakopoulos v. Cyprus, focusing on Respondent’s objections based on the alleged incompatibility of the BIT S and the EU Treaties, and the mass claim nature of the proceeding. The decision of the majority of the Tribunal in dismissing the EU law objection adds to a body of investment arbitration jurisprudence in which similar reasoning has been used to dismiss comparable objections. However, the dissenting opinion of Marcelo Kohen is the first time that an arbitrator, presented with an intra- EU investment arbitration claim, has considered that the tribunal lacks jurisdiction on the basis of the incompatibility between the relevant BIT S and EU law. Furthermore, Adamakopoulos is one of the few ‘mass claim’ arbitrations brought under the ICSID Rules. If it proceeds to the merits stage as planned, it will provide an opportunity for the Tribunal to resolve questions regarding the management of the procedure under the ICSID framework with such a large group of claimants, whilst maintaining the right to be heard, procedural equality and fairness.

Legal Stability and Legitimate Expectations: Does International Investment Law Need a Sense of Proportion? – Joint 2nd Prize Winner of the Essay Competition 2020

In the aftermath of the Achmea judgment and with the European Commission’s continued efforts to curtail investor- State arbitration, EU law and international investment law may seem antithetical. However, this article considers how EU law may contribute to the development of investment law through the concept of proportionality, a general principle of EU law and various national legal systems. Tribunals have increasingly applied a proportionality analysis in their reasoning, most recently in several cases brought by renewable energy investors against Spain and Italy under the Energy Charter Treaty. These cases concern the controversial issue of when a change in the regulatory framework violates investors’ legitimate expectations and their right to fair and equitable treatment. This article argues that the proportionality standard has the potential to clarify this area of law and to promote “defragmentation” between international investment law and other legal systems.

Achmea and the Implications for Challenge Proceedings before National Courts

Almost two years have passed since the CJEU delivered its ruling in the Achmea case. Since then, the topic of intra- EU investment arbitration has been frequently debated by academics and practitioners. However, only two national courts in EU Member States have rendered judgments in which the CJEU’S findings in Achmea have been subject to interpretation; the German Bundesgerichtsh of (BGH) which set aside the arbitral award between Slovakia and Achmea B.V., and the Swedish Svea Court of Appeal which dismissed the challenge of the arbitral awards between Poland and pl Holdings. This article examines the interpretation of the CJEU’S judgment in Achmea by the BGH and the Svea Court of Appeal, focusing on the reasoning of the latter. The article seeks to explain the different outcomes in light of, in particular, differences in Slovakia’s and Poland’s respective conduct during the arbitral proceeding, and differences between German and Swedish law. This article argues that the Svea Court of Appeal’s approach was fully reconcilable with the BGH’S judgment as well as EU law as interpreted by the cjeu in Achmea.

No Green without More Green: The Importance of Protecting FDI through International Investment Law to Meet the Climate Change Challenge

The growing climate change crisis requires significant development in and implementation of sustainable and renewable energies. To bring about that development, greater foreign direct investment is needed. Investment treaty arbitration contributes to encouraging greater levels of foreign direct investment, including in the context of investment in climate-friendly energies, by giving foreign private investors that knowledge that they can have recourse to a neutral dispute forum, which can, in turn, help shape regulatory frameworks, resulting in attractive investment conditions for foreign private investors. In this article, the authors argue that the European Union’s forward thinking regulatory approach has been pivotal to the progression of a legal framework encouraging cleaner energy and more environmentally-friendly technology. Whilst enormous benefits have been derived from this approach, the authors argue that the European Union is at risk of overstepping the mark and of deterring, as opposed to encouraging, the necessary foreign direct investment, through, in part, its much publicised aversion to investment treaty arbitration.