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Part II Investor-State Arbitration in the Energy Sector, 10 ECT and States’ Right to Regulate

Graham Coop, Isabella Seif

From: International Arbitration in the Energy Sector

Edited By: Maxi Scherer

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 27 January 2022

Subject(s):
Host state law — Treaty provisions — Arbitral tribunals

This chapter explores the Energy Charter Treaty (ECT) and states' right to regulate. The stability of a host state's regulatory framework is of prime importance for foreign investors, particularly in the energy sector. Changes in the host state's regulatory framework (for example, the reduction or removal of subsidies, or imposition or increase of taxes) can cause harm to the investment. Looking at concluded ECT cases, this chapter analyzes how tribunals have balanced states' substantive obligations to foreign investors under the ECT against their sovereign right to regulate within their own territory. In this context, the chapter touches upon recent cases in the renewable energy sector and discusses the extent to which investment protection under the ECT may lead to a so-called ‘regulatory chill’.

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