Herbert Smith Freehills has helped secure an important victory for the Kingdom of Spain in a long-running investor-state arbitration concerning regulatory changes made by Spain in 2010 to the Feed-in Tariff regulation governing the photovoltaic (“PV”) sector in Spain.
Tag: Legitimate expectations
The Netherlands has released a new draft investment treaty for public comment (“Draft BIT“). If adopted, the Draft BIT may raise questions about the Kingdom’s attractiveness for foreign investors who have long taken advantage of Dutch treaty protections by structuring their investment via companies in the Netherlands. The Netherlands proposes to use the new model as a basis for renegotiating its existing BITs with non-EU states, and, as such, the new draft’s more restrictive provisions may be significant for existing investors with protection under existing BITs, as well as those considering future investments. Key features of the Draft BIT are considered below.
In the wake of the recent agreement of the EU-Canada Comprehensive Economic and Trade Agreement (EU-Canada CETA) and after just over a year of negotiations, the EU and Singapore have released their free trade Agreement (EUSFTA) to the public. (See our recent blog post on CETA here). According to a statement released by the European Commission, the EUSFTA aims to ensure a high level of investment protection, whilst preserving the EU and Singapore’s right to regulate. It will replace the 12 existing Bilateral Investment Agreements (BITs) between Singapore and European Member States. The text of the EUSFTA can be found here.
Whilst the conclusion of this agreement is highly significant, the reference to the European Court of Justice to which it has given rise could perhaps be even more so. Please see our recent blog post here, explaining the European Commission’s request for an ECJ Opinion on the EU’s competence to enter into EUSFTA.
On Friday 26 September, after five years of negotiations, the EU and Canada agreed in principle to a text for the Comprehensive Economic Trade Agreement (CETA). It is certainly comprehensive, running to 1,500 pages. It is the first such agreement signed by the EU as part of its policy (since the Lisbon Treaty) of assuming competence for trade and investment from the individual Member States. Its contents have therefore been keenly anticipated as an indication of the tone of future agreements, particularly as regards investment protection and investor-state dispute resolution (ISDS) contained in Chapter X.
CETA’s provisions are comprehensive as regards both of these areas, but with significant caveats, largely mirroring the drafts that have so far been made public in the EU-US forthcoming agreement in the Transatlantic Trade and Investment Partnership (TTIP) (see our earlier post on the TTIP consultation here).
As its Preamble sets out, the agreement expressly recognizes “that the protection of investments… stimulates mutually beneficial business activity“. At the same time, it stresses principles of governmental autonomy (including enforcement of labour and environmental laws) which can in some circumstances limit the rights of the investor. It also points out the responsibility of businesses to respect “internationally recognized standards of corporate social responsibility“, bringing these soft law norms into the ambit of the agreement.