Energy Investment Disputes in Latin America: The Pursuit of Stability

Abstract

Sovereign ownership of subsoil resources in Latin America raises important tensions. The State, as owner, may grant property or participation rights to private investors in the energy sector, but it may also revoke them. As contracting party, it may enter into investment contracts (directly or through a State-owned entity), but it may also breach them. And as sovereign, it may offer legal and fiscal stability, but it may also use its regulatory power to alter the economic balance of the contract or even destroy its value. In light of these tensions, the pursuit of stability in energy investments in Latin America presents important challenges. This Article provides an overview of the rise and resolution of energy disputes in Latin America. Following an Introduction, Part I sets out a brief historical overview of energy investment disputes in the region. Next, Part II addresses key substantive issues that have been the subject of litigation in connection with energy investments. Part III discusses whether there is a backlash against international arbitration by host States in the region, followed by an overview in Part IV of some techniques to infuse stability into the energy investment contract.