Page 0009

9

The shift in political and economic power from Western states to emerging

economies is giving rise to new types of arbitration claims.

Investor-state dispute settlement (ISDS) is often

depicted as being a battle between investors from

Western capital-exporting states against developing

capital-importing states. While bilateral investment

treaty (BIT) claims against Eastern European states

from the 1990s onwards mean that the distinction

was never quite so binary, recent years have been

characterised by unquestionable changes to this

traditional narrative, with claims against capitalexporting

states (so-called 'North-North' disputes)

as well as by investors from developing states, and

claims where both parties are from developing

states (so-called 'South-South' disputes).

Termination and re-negotiation of

investment treaties

Following a series of negative decisions against

them, Venezuela and Bolivia have rejected ISDS

by withdrawing from a series of BITs. Indonesia

has also indicated its intention to allow existing

BITs to expire without renewal. While some states

may well adopt a similar approach, others have

opted for a different route.

For example, several African states have engaged

in a form of 'resource nationalism' so as to strike

a different balance of rights and obligations of

investors and states. South Africa has sought to

replace BITs with a domestic framework for investor

protection under the Protection of Investment Act

2015, which permits state-to-state dispute resolution,

but only allows an investor to engage in domestic

mediation. These regional developments are further

exemplified through the African Union's Pan-African

Investment Code of 2016, the Southern African

Development Community's revised model

investment code, and the Common Market for

Eastern and Southern Africa's expected investment

revisions, which exclude certain substantive

protections typically seen in BITs, reducing potential

avenues of redress for investors.

Claims in the renewable energy sector

Government policies to incentivise investment in

renewable energy, followed by the withdrawal or

modification of such incentives, have led to a boom

in investment claims against developed states, such

as in Masdar v Spain, brought by a UAE governmentowned

entity. We represent investors in several

claims against Spain, including a claim by various

claimants ultimately owned by an Israeli fund,

Sunflower SIT, and another by a Japanese company,

Bilateral investment treaties: rebalancing

between 'the West' and 'the rest'

Peter Turner QC

Partner

T +33 1 44 56 54 38

E peter.turner@freshfields.com

Sami Tannous

Partner

T +971 4 509 9254

E sami.tannous@freshfields.com

3

Index

  1. Page 0001
  2. Page 0002
  3. Page 0003
  4. Page 0004
  5. Page 0005
  6. Page 0006
  7. Page 0007
  8. Page 0008
  9. Page 0009
  10. Page 0010
  11. Page 0011
  12. Page 0012
  13. Page 0013
  14. Page 0014
  15. Page 0015
  16. Page 0016
  17. Page 0017
  18. Page 0018
  19. Page 0019
  20. Page 0020
  21. Page 0021
  22. Page 0022
  23. Page 0023
  24. Page 0024
  25. Page 0025

Related Issues