Environmental Law in Investment Arbitration: Procedural Means of Incorporation

Abstract

The present article explores the relationship between investment and environmental law by examining the use of counterclaims and jurisdictional and applicable law clauses in IIAs. Environmental issues arising contextually to investment disputes have given rise to sustained debates on the legitimacy deficit of the system; one possible way forward for the debates is through the incorporation of environmental law in the investment regime, and many substantive avenues have been explored, including the reconceptualisation of certain provisions, the adoption of proportionality and balancing by tribunals, and the adjustment of the quantum of compensation. This article focuses on the procedural means of incorporation as the first, inevitable step towards any of the above solutions. Additionally, the article deals in detail with the possibility of asserting counterclaims as a little explored avenue potentially allowing for international and domestic environmental obligations to enter the investment dispute.