Tracking the Environment in Investment Arbitration: The World and India

The ongoing global energy crisis and wave of climate-related disasters have prompted renewed attention to States’ powers of enacting regulations for environmental protection and sustainable development. The language used in international investment agreements and treaties informs and determines the extent to which States can introduce progressive environmental policies, while simultaneously ensuring the protection of investors’ rights and interests. The following article critically analyzes such treaty language by discussing the various approaches to and developments in incorporating environmental concerns, and studies how tribunals have interpreted such clauses. In so doing, the article traces a gradual but distinct shift in the approach of investment arbitration tribunals to environmental protection over the past few decades. The article also explores the recent global trend of States unilaterally terminating investment treaties, with a particular focus on India. India's response to its contentious relationship with investor-State disputes may prove instructive for States looking to attract investment while also balancing the protection of the environment.