Abstract

Climate change, potentially the greatest threat of the 21st century to human societies, transcends political and legal boundaries. However, the operation of investor-state dispute resolution (ISDS) and its governing instruments has been intrinsically linked to those boundaries, boundaries that are a decisive factor in conferring consent to dispute resolution. In particular, the jurisdictional inquiry of territoriality, essentially a ratione loci, limits the application of treaty obligations to investments in the defined territory of a host state. Seemingly straightforward, a mixture of state succession issues and mixed treaty language practice in international investment agreements (IIAs) are responsible for a discourse unprepared for the negative externalities of climate change. This paper will analyze the ways in which climate change will challenge this current state of affairs, especially the ‘benefit test’ of IIA territoriality and the limits discussed in Bayview, and the potential need for new textual clauses and new tests to adapt to the trans-border nature of our changing environment.

This paper will be part of the TDM Special Issue on "International Investment Arbitration - Environmental Protection and Climate Change Issues". More information here www.transnational-dispute-management.com/news.asp?key=1893