Sustainability in Investment Arbitration: An Empty Promise?

This contribution discusses whether and how the concept of sustainability has been applied in the settlement of investment disputes: Do arbitrators consider sustainability when interpreting investment agreements? What degree of deference do arbitrators accord to a state measure adopted in order to foster sustainable development? Although this concept has gradually made its way into the normative landscape of international investment law, the contribution argues that sustainability remains, in many respects, insufficiently taken into consideration and applied in the settlement of investment disputes. The validity of this argument will be assessed through a discussion of investment cases in which the new generation of investment agreements, with their sustainable development provisions, were applied. The contribution demonstrates that, in these cases, the reasoning of the arbitral tribunals has led to a very limited role being granted to sustainable development, notably through a restrictive interpretation of the regulatory powers of the host State and an extensive interpretation of the fair and equitable treatment afforded to investors. The contribution goes further to reflect on certain reforms that could lead to a better justiciability of sustainability within investment regimes.