INVESTMENT TREATY ARBITRATION
CD: Could you provide an overview of recent trends in the investment treaty arbitration arena? What notable developments would you highlight?
MacKinnon: Disputes related to energy transition are at the centre of the investment treaty arbitration arena, and we expect that trend to intensify in the near future. Over the past decade, climate and sustainable development have been at the top of the agenda of governments, companies and civil society. In this context, many countries have implemented ambitious regulatory regimes to attract foreign investment in the renewable energy sector, while disincentivising the use of conventional fuels. However, governments have not always been fully satisfied with the returns on their investments in renewables. Moreover, recent events such as the coronavirus (COVID-19) pandemic and the Russian invasion of Ukraine have disrupted international energy markets, causing fossil fuel prices to rise, at least for a time. As a result, several countries have enacted regulations seeking to revive their oil and gas industries. In the wake of these regulatory changes, some investors have elected to initiate investment treaty claims.
Triantafilou: The termination of intra-European Union (EU) bilateral investment treaties (BITs) and the ongoing reform of the Energy Charter Treaty (ECT) have limited the number of new treaty cases in Europe, notwithstanding exceptional scenarios such as the recent UBS and Credit Suisse merger. Other geographic areas, however, including Latin America and Central Asia, continue to generate substantial disputes under investment treaties. The illegal war in Ukraine has generated increasing interest in the operation of investment treaties in occupied territories, as well as the cross-section of investment treaty rights with rights under international humanitarian law.
Jul-Sep 2023 issue
Cleary Gottlieb Steen & Hamilton LLP
Kirkland & Ellis
Quinn Emanuel Urquhart & Sullivan, LLP
Reed Smith LLP
Wilmer Cutler Pickering Hale and Dorr LLP