The Precautionary Paradox in Environmental Disputes: Navigating Uncertainty and Legal Authority in International Investment Law

Abstract

This article examines how investor–state dispute settlement (ISDS) tribunals engage with the precautionary principle (PP) when environmental measures are challenged in the face of scientific uncertainty over ecological harm. An analysis of awards identifies three recurrent treatments: (i) strong risk prevention, (ii) flexible risk management, and (iii) nominal acknowledgement. Across these approaches, the PP fails to supply reviewable criteria for adjudication, resulting in inconsistent outcomes and limited doctrinal coherence. The article argues that the difficulty lies in the absence of a coherent account of the adjudicative function of the PP. Informed by systems theory and Karl-Heinz Ladeur’s concept of stop rules, the article develops a procedural account of the PP, under which the principle operates as a trigger for calibrated proportionality review and the reallocation of the burden of proof. On this view, the PP does not dissolve the precautionary paradox, but renders it adjudicatively workable, enabling tribunals to reach reasoned legal closure under epistemic uncertainty while preserving legal authority.