Edited by Panagiotis Delimatsis
Chapter 18: Climate change and investor-state dispute settlement: identifying the linkages
This chapter examines how investor-State dispute settlement (ISDS) influences the balance between investment protection and climate change¬. It looks first at the jurisdiction of investment tribunals and remedies available under ISDS, in order to explain when and what kind of claims investors can raise, and who can participate in arbitral proceedings. Second, this chapter critically reviews applicable law in investment arbitration, and the role of environmental law rules and principles therein. It is argued that ISDS limited jurisdiction to determine only whether there has been a violation of investment law provisions does not pose a systemic “threat” to climate change protection, since tribunals cannot make authoritative findings on the existence of environmental harm. On the contrary, investment tribunals tend increasingly to pay due consideration to national or international law rules on climate change and show deference to host states when the latter provide evidence supporting the legality of climate change-related measures. Besides, investment tribunals can indirectly address potential environmental harm caused by investors by excluding them from the scope of investment protection, or take their conduct into account in the merits or in the calculation of damages. Finally, although ISDS has been heavily criticized for not allowing third parties to participate in proceedings, a growing number of arbitration rules and investment treaties enable the submission of amici curiae, that presents a first positive step towards strengthening inclusiveness and legitimacy of ISDS.
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