Tackling the Conundrum: Climate Change and Stabilization under Fair and Equitable Treatment

From the Journal:
Ian Mwiti Mathenge

Abstract: Climate change is a lethal, global, and imminent problem with a capacity to disrupt the orthodox areas of international law including international investment law. This project examines the conflict between the standard of a stable legal environment under fair and equitable treatment (FET) in international investment law and climate change action. It argues that FET is a broad standard, asymmetrically applied to provide stability to foreign investments, which will clash with climate change policies. The paper calls for viewing climate change as an emergency which has the implication of elevating its international law obligations above the ordinary ones. It explores FET’s standard of legitimate expectation and argues for its reorientation to context-sensitivity. The piece proposes “the malleable thesis” as an alternative project on how tribunals should approach legitimate expectations. To solve the conflict, the project makes a normative case for erga omnes climate change obligations based on treaties language and nature of climate change. Through a novel argument on the effect of erga omnes, the piece argues that international investment law should “cede way” to climate change in case of a conflict. The paper asks a bonus question of who should decide investment disputes related to climate change, and it concludes that there are severe concerns about tribunals deciding these cases. However, tribunals may decide climate change cases if they have a “Damascus moment” characterized by a radical shift from investor exclusive adjudication to deference to public interest.

Cite As: Ian Mwiti Mathenge, "Tackling the Conundrum: Climate Change and Stabilization under Fair and Equitable Treatment", Volume 3, AfJIEL (2022), 69-133.