The legitimate expectation of regulatory stability under the Energy Charter Treaty

2020 ◽  
Vol 33 (2) ◽  
pp. 451-466
Author(s):  
Diego Zannoni
Keyword(s):  
Legal Framework ◽  
Eu Member States ◽  
Legitimate Expectation ◽  
Investment Treaty ◽  
Long Run ◽  
Fair And Equitable Treatment ◽  
Energy Charter Treaty ◽  
Legitimate Expectations ◽  
The Stability ◽  
Equitable Treatment

AbstractOne of the main catalysts for the shift towards renewable energies has been the practice of support schemes in a key number of EU member states. Some of these states have since withdrawn or revoked much of their original support, which has resulted in investment treaty arbitrations being filed against them under the Energy Charter Treaty. Arguably, a balance should be found between investors’ legitimate expectations concerning the stability of the legal framework and the host states’ right to adapt regulations to new needs. This can be achieved by clarifying and delimiting the principle of fair and equitable treatment, and by encapsulating it in a more precise set of rules. Due to its open character, this principle could otherwise become too intrusive a standard of judicial review for the exercise of sovereign power by host states. It could be diluted into a rhetorical framework inviting uncertainty and subjective judgment. While the focus of this article is on energy, the concern for legal stability equally applies to all those sectors where large upfront investments are required, which can only be recouped in the long run.

Legitimate Expectations and Fair-and-Equitable-Treatment under the Energy Charter Treaty

2022 ◽  
Author(s):  
Niclas Landmann
Keyword(s):  
Renewable Energy ◽  
Energy Sector ◽  
Comprehensive Analysis ◽  
Due Diligence ◽  
The Past ◽  
Treatment Standard ◽  
Fair And Equitable Treatment ◽  
Energy Charter Treaty ◽  
Legitimate Expectations ◽  
Equitable Treatment

A recent tide of ISDS cases in the renewable energy sector has generated a large number of arbitral awards that turn of the notion of legitimate expectations. The Fair and Equitable Treatment Standard (FET) and the notion of legitimate expectations has been highly undetermined in the past. This work contains a comprehensive analysis of the renewable energy awards and the interpretation of the notion of legitimate expectations therein. In particular, it is examined whether arbitral jurisprudence formed a cohesive body of caw-law. The author analyses which aspects with regard to commitment by the states, due diligence of the investors, and level of impact were considered a violation of the FET Standard by recent arbitral tribunals.

scholarly journals Fair and Equitable Treatment and Investor’s Due Diligence Under International Investment Law

2020 ◽  
Vol 67 (2) ◽  
pp. 233-255
Author(s):  
Yulia Levashova
Keyword(s):  
International Investment ◽  
Due Diligence ◽  
International Investment Law ◽  
Host State ◽  
Fair And Equitable Treatment ◽  
Political Background ◽  
Legitimate Expectations ◽  
Investment Law ◽  
The Stability ◽  
Equitable Treatment

Abstract The investor’s due diligence has become a significant factor in determining whether the legitimate expectations of an investor give rise to protection under the FET standard. This is especially relevant when an investor’s claim for the protection of its legitimate expectations is based on the stability of a regulatory framework. The investor’s due diligence in the context of the FET standard goes beyond the risk-based business due diligence performed by a foreign investor for its own benefit. It has implications for a state’s right to regulate in the public interest and a broader notion of business responsibilities. Investors are expected to conduct proper due diligence before investing in a host state by demonstrating their reasonable efforts to collect information about the rules and regulations that are pertinent to the proposed investment. In some cases, due diligence extends to an investor’s duty to assess the possible risks related to the broader economic situation and socio-political background of a host state. Focusing on the recent renewable energy awards, this article analyses and clarifies the role of due diligence in the context of the FET standard, as well as its potential application for asserting responsible business conduct in the broader framework of international investment law.

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

2020 ◽  
Vol 5 (1) ◽  
pp. 240-264
Author(s):  
Robert Bradshaw
Keyword(s):  
Renewable Energy ◽  
International Investment ◽  
Eu Law ◽  
Legal Systems ◽  
International Investment Law ◽  
Fair And Equitable Treatment ◽  
Energy Charter Treaty ◽  
Legitimate Expectations ◽  
Investment Law ◽  
Equitable Treatment

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.

AES Corporation and Tau Power BV v. Republic of Kazakhstan

ICSID Reports ◽  
2021 ◽  
Vol 19 ◽  
pp. 610-629
Keyword(s):  
Public Interest ◽  
Competition Law ◽  
The State ◽  
Content Type ◽  
Legislative Reform ◽  
Legitimate Expectation ◽  
Investment Treaty ◽  
Fair And Equitable Treatment ◽  
Municipal Law ◽  
Equitable Treatment

610Jurisdiction — Consent — Revocation — Municipal law — ICSID Convention, Article 25 — Whether a State may revoke consent to arbitration by repealing municipal lawJurisdiction — Investment — ICSID Convention, Article 25 — Municipal law — Whether investments were excluded from jurisdiction by express exceptions under municipal lawJurisdiction — Consent — Temporality — Municipal law — Whether the revocation of consent to arbitration through the repeal of municipal law affected investments made prior to repealAdmissibility — Fork-in-the-road clause — Judicial act — Competition law — Whether claims for breach of competition law before municipal courts were the same as the investment treaty claimsAdmissibility — Domestic litigation requirement — Whether the exhaustion of local remedies was required — Whether the question was best left to the merits stageContract — Legitimate expectation — Legal stability — Competition law — Whether an agreement between the claimants and the State gave rise to a legitimate expectation that the State would not amend competition lawMunicipal law — Stabilisation clause — Legitimate expectation — Legal stability — Adverse effect — Whether the claimants had a legitimate expectation to be protected by a stabilisation clause that had been repealed — Whether the claimants had a legitimate expectation to be protected against legislative reform — Whether the claimants demonstrated any adverse effect from legislative reform — Whether it was predictable that the State would undertake reform of its competition lawFair and equitable treatment — Legitimate expectation — Arbitrariness — Denial of justice — Legal stability — Whether changes to competition law were in breach of the investment treaties — Whether alleged harassment and coercion were in breach of the standard of fair and equitable treatment — Whether the claimants were denied justice in the application of competition law by municipal courtsUmbrella clause — Municipal law — Contract — Legal stability — Whether a breach of municipal law could give rise to an investment treaty breach — Whether there was a breach of municipal law — Whether the State agreed not to reform competition lawFair and equitable treatment — Legitimate expectation — Free transfer — Proportionality — Public interest — Whether the claimants had an expectation to make and have the right to dispose of a reasonable return on their 611investment — Whether the requirement to reinvest all profits was in breach of legitimate expectations — Whether the measure was a proportionate response in the public interestRemedies — Restitution — Whether restitution was a feasible remedy in the circumstancesRemedies — Damages — Burden of proof — Quantum — Whether the claimants had established the scope of damage they suffered as a result of treaty breachRemedies — Damages — Future damages — Whether the claim for future loss was premature

The Limits of the Comparative Public Law Methodology in International Investment Law: An Australian Case Study

2018 ◽  
Vol 41 (2) ◽  
Author(s):  
Alexander Ferguson
Keyword(s):  
International Investment ◽  
Public Law ◽  
International Investment Law ◽  
Investment Treaty ◽  
Fair And Equitable Treatment ◽  
Australian Case ◽  
Legitimate Expectations ◽  
Investment Law ◽  
Equitable Treatment

Government conduct is increasingly reviewable by investment treaty tribunals. These tribunals often consider whether a host state has failed to afford fair and equitable treatment by defeating a foreign investor’s legitimate expectations. To discern what a foreign investor can legitimately expect, some tribunals use a comparative public law methodology that draws on domestic public law. Using Australian law as a case study, I suggest that the comparative public law methodology may not be able to achieve all of its aims.

Dan Cake (Portugal) S.A. v. Hungary (ICSID)

2016 ◽  
Vol 55 (3) ◽  
pp. 496-524
Author(s):  
Catherina Valenzuela-Bock
Keyword(s):  
Arbitral Tribunal ◽  
Rare Finding ◽  
Bilateral Investment Treaty ◽  
Investment Treaty ◽  
Treatment Provision ◽  
Fair And Equitable Treatment ◽  
Equitable Treatment

In Dan Cake v. Hungary, an arbitral tribunal constituted under the auspices of the International Centre for Settlement of Investment Disputes (ICSID) issued a rare finding of denial of justice in its adjudication of the claims by Portuguese investor Dan Cake, alleging that the Hungarian court’s actions during the liquidation proceedings of its subsidiary were a violation of the fair and equitable treatment provision of the Hungary-Portugal Bilateral Investment Treaty (BIT). The decision adds an example of the factual circumstances that lead to a finding of denial of justice and reaffirms the stringent requirements that need to be satisfied in order to succeed on such a claim.

scholarly journals Klausula Counter-claim dalam Bilateral Investment Treaty Indonesia

2019 ◽  
Vol 2 (6) ◽  
pp. 2219
Author(s):  
Nabilla Zelda Nasution
Keyword(s):  
Dispute Settlement ◽  
National Treatment ◽  
Bilateral Investment Treaty ◽  
Host State ◽  
Investment Treaty ◽  
Fair And Equitable Treatment ◽  
Equitable Treatment

Investor-State Dispute Settlement (ISDS) merupakan suatu mekanisme penyelesaian sengketa antara investor dan negara penerima investasi (host state) karena suatu pelanggaran terhadap Hukum Investasi Internasional. Berdasarkan data UNCTAD, alasan yang sering diajukan dalam gugatan ISDS umumnya meliputi empat hal permasalahan yakni Most Favoured Nations, National Treatment, Non Exproriation, dan Fair and Equitable Treatment. Namun pengaturan penyelesaian sengketa investasi dengan mekanisme ISDS dianggap lebih berpihak kepada pihak investor dibandingkan kepada host state karena sebagian besar IIA mengijinkan ISDS diajukan oleh investor, dan dalam prakteknya investor merupakan satu-satunya penggugat yang diizinkan. Ketidakseimbangan kedudukan para pihak dalam mekanisme ISDS memberikan pemikiran counter-claim sebagai upaya menyeimbangkan kedudukan investor dan host state dalam mekanisme ISDS. Selain itu pentingnya counter-claiim dalam mekanisme ISDS antara lain karena belum ada aturan yang seragam mengenai counter-claim, counter-claim memungkinkan responden untuk mencari keadilan di forum yang sama sehingga lebih efisien. Serta bagi host state, counter-claim dapat digunakan untuk membersihkan reputasi host state atas gugatan yang diajukan oleh investor. Penelitian ini mengkaji klausula counterclaim yang dapat diadopsi dalam BIT Indonesia sehingga dapat menyeimbangkan kedudukan para pihak dalam mekanisme ISDS, khususnya Indonesia sebagai host state. Penelitian hukum yang digunakan adalah pendekatan konseptual (conseptual approach), pendekatan perundang-udangan (statute approach), dan pendekatan kasus (case approach) dalam membahas counterclaim dalam mekanisme ISDS serta dalam menganalisa rumusan klausula counterclaim yang dapat di adopsi dalam Bilateral Investment Treaty (BIT) Indonesia.

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