Project R-12786

Damages Assessment and Evaluation Methods of Energy Infrastructures in International Investment Law: Dissecting the Interplay with Climate Change and Trade Law and Policy. (Research)

The project aims to provide a comprehensive assessment of the legal regime for damages evaluation in International Investment Law with a focus on disputes concerning foreign investors in energy sector. On the one hand, International Investment Agreements (IIAs) as secured by Investor-State Dispute Settlement (ISDS) tribunals, provide protection for foreign investors against unlawful acts of host States. On the other, the same host States will have to adopt ambitious and, in some instances, radical measures to achieve international climate change objectives and targets, thus exposing themselves to compensation in favour of investors in energy infrastructures. Against this backdrop, the project will first conduct an empirical analysis of both existing provisions on compensation and damages in IIAs and damages evaluation methods relied upon by ISDS arbitral tribunals with regard to investments in the energy sector. Second, it will critically appraise such provisions and methods to identify patterns of over-compensation of energy assets and investments and analyse potential impacts on national and international climate change and environmental protection policies, as well as on international trade rules in Preferential Trade Agreements. Last, it will deliver concrete policy recommendations to promote consistency with the legal regime on compensation in international investment law and other fields of public policy to inform the IIAs and ISDS ongoing reform process.

01 October 2022 - 30 September 2026