Investment protection: determination of legal aspects with reflecting to the innovations to ensure sustainable growth of the Slovak Republic

This chapter explores Part III of the Energy Charter Treaty, which sets forth the provisions on substantive protection of investments. Promotion and protection of investments are different things. Promotion of investment is concerned with attracting and permitting foreign investments. Protection of investment deals with the way in which investments must be treated, once they have been made. As a matter of policy, however, promotion and protection of investments are closely linked. That explains why the two concepts are addressed in one and the same article of the ECT: Article 10, which is entitled ‘Promotion, Protection and Treatment of Investments’. The chapter then describes the concept of fair and equitable treatment (FET). Article 11 of the ECT obliges Contracting Parties to treat key personnel of Investors in a fair way. Article 12 deals with loss of and damage to the property of Investors in situations where Article 13, concerning expropriation, is not applicable. Article 14 in essence creates a right for Investors to repatriate capital and earnings in a prompt and effective way. Article 15, a so-called subrogation clause, provides for the transfer of rights that a foreign investor may have in relation to the host State, if it has received compensation from its home state under an investment insurance or guarantee. Meanwhile, Article 16 addresses the situation when the ECT overlaps with other treaties. Lastly, Article 17 restricts the benefits of Part III of the ECT to certain categories of legal entities or Investments of Investors.

Where the rights of foreign investors are harmed in disputed maritime areas, the question arises whether these investors can invoke international investment agreements (IIAs) to seek redress. IIAs cover both bilateral investment treaties (BITs) and multilateral investment agreements (MIAs). BITs can be described as ‘reciprocal legal agreement[s] concluded between two sovereign States for the promotion and protection of investments by investors of the one State (“home State”) in the territory of the other State (“host State”)’. Reciprocal rules and protections of investments may also increasingly be found in multilateral agreements, which can be seen – at least from this perspective – as MIAs. IIAs are the primary instruments for the protection of foreign investments in international investment law. Typical provisions contained in IIAs include definitions of the notions of investment and investor, substantive protections of foreign investors (eg, concerning expropriation, fair and equitable treatment, full protection and security), and dispute settlement clauses (usually providing for both investor-state and state-to-state arbitration). But do they apply to investments in disputed maritime areas? And if this is the case, can an arbitral tribunal established under an IIA’s dispute settlement clause make all findings of fact and law required to apply the IIA without exceeding the scope of its jurisdictional mandate? This chapter seeks to answer these questions. In so doing, it will define the concept of ‘disputed maritime areas’ for present purposes (section 2). Next, it will address the spatial scope of IIAs as a matter of substantive law in relation to maritime areas generally and disputed maritime areas specifically (section 3). Thereafter, this chapter will turn to specific challenges of procedural law raised by investor-state dispute settlement in relation to investments in disputed maritime areas (section 4). An ensuing section will assess the different approaches investment tribunals could follow in dealing with the aforementioned challenges (section 5), followed by concluding remarks (section 6).

The article is dedicated to analyzing the issue of determining the boundary of the legitimacy of state measures in regulating and controlling foreign investments within national jurisdiction, in accordance with national laws and regulations, and in line with national objectives and priorities. Additionally, this article reviews key regulatory trends in the international legal sphere concerning the protection of foreign investments. Through the analysis, the content of the main issues in international investment law has been clarified, including the protection of foreign investments and the differentiation (legal classification) of state actions that constitute indirect expropriation, discrimination, unfair treatment, or other violations of international obligations under international investment agreements. Such actions create the right to challenge them through international arbitrations, potentially leading to compensation obligations. On the other hand, state measures taken within their right to regulate in the public interest are not subject to compensation. Moreover, previously published theoretical insights regarding the interaction between the legal regime of foreign investment (international investment treatment) and the state guarantees for the protection of foreign investments have been importantly refined. Relevant examples are provided concerning both these guarantees and the key approaches to forming a regulatory framework for the domestic regulation of foreign investments, including their admission and restrictions. The first approach assumes that special regulations apply to foreign investors, partially overlapping with those established for national investors. In developing countries in Africa, Latin America, and Asia, special foreign investment laws typically exist, which may include separate laws or investment codes. The second approach is more characteristic of countries with developed economies. Under this approach, legislators do not establish special laws governing foreign investments but introduce significant restrictions. Such restrictions usually apply to specific industries or sectors in which foreign participation may be entirely prohibited or limited. Additionally, investment activities may require obtaining special permits, and states may implement special screening mechanisms. But the key research finding is that national law establishes the legal framework for creating the general legal regime of foreign investment, which is realized, among other things, through the sub-institution of state guarantees for the protection of foreign investments. This sub-institution may and may not be even directly linked to the actual implementation of foreign investments, but always exists in national legislations. It is also worth noting that the prevailing trend is the continuous development of national foreign investment legislation to implement policies that contribute to global economic growth and the overall welfare of the population. An empirical legal indicator of this trend is the gradual disappearance of differences between legal regimes for national and foreign investors, facilitated by the introduction of legal mechanisms for foreign investor access. Key words: international investment law, international investments, investment treatment, bilateral/multilateral investment treaties, international investment arbitration, state guarantees for the protection of foreign investments.

This introductory chapter provides a background of the Energy Charter Treaty, which entered into force on April 16, 1998. The ECT is a unique international instrument which covers the promotion and protection of investments, trade in energy, transit in the energy sector, environmental aspects, as well as the settlement of disputes under the Treaty. It was negotiated and drafted under considerable time pressure by a large number of States and what is now the European Union. Nevertheless, the ECT was not negotiated and drafted in a legal vacuum. Other relevant international instruments were there for the negotiators to take account of and to be guided by as they deemed appropriate. As far as investment protection is concerned, there were in place several thousands of bilateral investment protection treaties (BITs) providing for the protection of foreign investment in a manner very similar to the corresponding provisions which eventually found their way into the ECT. With respect to international trade, the General Agreement on Tariffs and Trade (GATT) was in force when the ECT negotiations commenced. It was eventually replaced by the World Trade Organization (WTO) in 1995. The present legal commentary on the ECT will not discuss general aspects of these two fields—international investment law and international trade law—in detail. Rather, an attempt has been made to limit the discussion of such general aspects—and of arbitral awards relating thereto—which are relevant for the ECT-provisions in question.

It is widely recognized that states receiving foreign direct investment (FDI) may greatly benefit from it, as it is one of the driving forces of economic development. Nevertheless, if FDI is not regulated properly, it may lead to environmental harm, social unrest, ‘race-to-the-bottom’ in regulatory standards as well as other negative consequences. As the world is approaching the end of the second decade of the twenty-first century, there is an increasing recognition of the need for a modern legal framework of FDI that provides not only for the protection of investors’ rights, but also properly addresses investments’ wider social, economic, and environmental effects. Although historically the emphasis of the investment law has been placed primarily on investment protection, such an asymmetrical treatment of FDI is slowly, but steadily giving way to the new generation legal framework of FDI, the objective of which is not only to protect investment, but also advance host states’ sustainable development. One way to promote such a legal framework is by reforming ‘old generation’ international investment agreements. This paper is focused on the analysis of the following major standards provided in most international investment agreements: (1) fair and equitable treatment, (2) national treatment, (3) most-favored-nation treatment, (4) full protection and security, and (5) observance of obligations or so-called “umbrella clause”. While in general these standards are important for the protection of investors’ rights, the broadly formulated and unbalanced versions of these standards are now being increasingly challenged for limiting host states’ legislative and regulatory powers and for being unclear which has thus far resulted in a number of inconsistent arbitral awards. The paper analyzes these investment protection standards via an examination of relevant arbitral awards and investment agreements and proposes ways how they can be better balanced so that both the interests of investors and states can be fully accommodated.

With the 2018 Achmea ruling, the European Court of Justice declared investment arbitration in the intra-EU setting to be inadmissible. As a result, the Member States have cancelled more than 190 bilateral investment protection treaties between themselves. Critics fear a high level of legal uncertainty for intra-EU investments. The EU Commission, on the other hand, believes that the existing law of the internal market provides ‘adequate and effective protection’ for such investments without further ado. Both sides invoke the rule of law. After an overview of the developments, individual elements of the protection of investments within the EU, namely the rights of investors, the balance between them and public interests, the legal means available and the question of compensation, are analysed comparatively. In the end, it emerges that both positions can lay claim to different elements of the rule of law. The rule of law does not require maintaining investment protection with bilateral treaties and investor- state arbitration. However, it is questionable whether the existing law in the internal market does adequately protect investments in the European Union. With the abolition of traditional international investment protection, the European Union faces major challenges with regard to the further improvement of the rule of law, the importance of which goes far beyond the issue of investment protection.

Analysis of energy consumption structure on CO[formula omitted] emission and economic sustainable growth

Sustainable economic growth is the prime concern of today’s globalized world. Money markets around the world are functioning as key players to realize that goal and often looking for new avenues to increase the capital that may embolden overall growth of the economy of a country. This paper, adopting a doctrinal method, has tried to explore the legal barriers responsible for non-practicing the Islamic capital market in Bangladesh. The study has mainly focused on certain laws of Bangladeshi legal system that function as key legislative directives in governing Islamic financial services, with special reference to the capital market through legal infrastructure in Bangladesh. It has examined the relevant laws and regulations of the existing legal system prevalent in the capital market of Bangladesh influencing the promotion and proliferation of capital through strict compliance by companies and the protection of investors in terms of realizing profit without any hindrance. The study has further investigated the modus operandi of Islamic banks as found in the Capital Market of Bangladesh and scrutinized the major challenges and potentials thereto. Given the legal and regulatory practices prevalent in the Islamic capital market of Bangladesh, the present work concludes that the capital market of Bangladesh suffers from the lack of integrated Shariah-compliant legislations, which would govern and regulate the Islamic capital market more effectively. Accordingly, the paper proposes recommendations to help the Islamic capital market grow and foster the national economy.

In recent years, suggestions have been made to create a specialized court for the capital market, which would have jurisdiction over disputes that have arisen between participants in the market, as well as to introduce new special judicial procedures to, among other things, protect investors and streamline the settlement of stock market disputes. These suggestions are primarily due to the recognition of the peculiarities that characterize trade in the capital market (with particular emphasis on the stock market). Economic transactions in the broadest sense of this term are a dynamic phenomenon and, because contractual relationships constantly change and repeatedly form the basis for further transactions, disputes arising under commercial law require the quickest possible resolution.Therefore, it can be said that trade at stock exchanges is the quintessence of these dynamics and complexities of the legal relationships such trade involves, and this requires even greater efficiency and diligence in protecting the interests of its participants, including the ensuring of the right of recourse to a court. In addition, the settlement of disputes arising in the capital market requires not only knowledge of procedural law, but, most importantly, expertise in the trade in financial instruments. These issues and the resulting needs were recognized long ago, soon after Poland regained its independence in 1918, when the first exchanges were established on Polish soil to operate under national legislation. The commodity and stock exchange law enacted at the time provided for the need to ensure adequate protection of the interests of exchange members by, among other things, allowing them to assert their rights in courts.Although the status of the arbitration courts established pursuant to the provisions of the law was unclear, as they were a sort of intermediate solution between a court exercising coercive powers and an arbitral court, they certainly contributed to the implementation of exchange trade participants’ right to recourse to a court and to ensure high ethical standards in the conclusion of transactions. One such court operated between 1921 and 1939 at the most important Polish exchange of the interwar period in terms of trading volume – the Warsaw Money Exchange. The purpose of this article is to introduce this institution, also by discussing how the court was appointed against the background of the organization of the exchange and by presenting the scope of competence and the proceedings before the court. The authors also focused on presenting and analyzing data on the activities of the said institution.

Inclusive and sustainable economic growth is a priority for countries around the world, including Indonesia. Geopolitics plays an important role in creating a legal framework that supports investment, innovation, and environmental protection - key components of sustainable economic growth. This research aims to explore how geopolitics contributes to Indonesia's economic growth, focusing on the development of technologies, regulations, and procedures that support economic sustainability. The research method used is a qualitative approach, with data collection through literature review and policy analysis. This research was conducted by exploring the influence of geopolitics in the context of economic policy, investment, and natural resource management. The results show that Indonesia's strategic location as an archipelago provides advantages in international trade and regional economic relations. In addition, political stability and economic policies influenced by geopolitics play an important role in creating an enabling environment for economic growth. The implication of this research is the importance of strengthening international and bilateral cooperation to capitalize on Indonesia's geographical and political potential to increase economic competitiveness globally and promote sustainable economic growth.

1Arbitration — North American Free Trade Agreement, Chapter 11 — Procedure — ICSID arbitration — Additional Facility RulesEconomics, trade and finance — Investment protection — Fair and equitable treatment of investment — North American Free Trade Agreement, Article 1105 — Expropriation — Article 1110 — Relationship between the two provisionsExpropriation — Definition — North American Free Trade Agreement, Article 1110 — Whether denial of justice by courts capable of constituting expropriation — Contract governed by Mexican law — Decision of Mexican courts that contract invalid — Whether capable of amounting to expropriation in the absence of a denial of justiceState responsibility — Courts — Denial of justice — Circumstances in which State responsible for decisions of courts — Conduct constituting a denial of justice

Introductory Observations I. Investment Protection and Sustainable Development: Key Issues II. Negotiating New Generation International Investment Agreements: New Sustainable Development Oriented Initiatives III. Revising Treatment Standards: Fair and Equitable Treatment in Light of Sustainable Development IV. Expropriation in the Light of the UNCTAD Investment Policy Framework for Sustainable Development V. Investor-State Dispute Settlement and Sustainable Development: Modest Reform VI. The EC and UNCTAD Reform Agendas: Do They Ensure Independence, Openness, and Fairness in Investor-State Arbitration VII. Sustainable Development Provisions in International Trade Treaties: What Lessons for International Investment Agreements? VIII. Reconciling Investment Protection and Sustainable Development: A Plea for an Interpretative U-Turn IX. Investment Protection and Sustainable Development: What Role for the Law of State Responsibility X. Termination and Renegotiation of International Investment Agreements XI. The Emergence of a New Approach to Investment Protection in South Africa XII. Reliance on Alternative Methods for Investment Protection through National Laws, Investment Contracts, and Regional Institutions in Latin America XIII. Jumping Back and Forth between Domestic Courts and ISDS: Mixed Signals from the Asia-Pacific Region XIV. The 'Generalization' of International Investment Law in Constitutional Perspective XV. The Contribution of EU Trade Agreements to the Development of International Investment Law Concluding Remarks

This article explores the intricate interplay between the right of states to regulate in the context of environmental regulations aimed at decarbonization and an investor's right to investment protection, particularly focusing on the Fair and Equitable Treatment (FET) standard in international investment law. With the increasing importance of environmental regulations such as the US Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants, in the transition to cleaner energy sources, the potential economic impacts on investments and resulting investment disputes could be huge, making the balancing of these competing interests a topical issue. The article delves into the prominence of the FET standard in investment protection and its evolution in international investment law. It argues that the limitation on the legitimate expectation element of the FET standard in modern times poses challenges in balancing states' rights to regulate with the protection of foreign investments in decarbonization disputes. The author asserts that recent developments in international investment law, exemplified by treaties like the EU-Canada Comprehensive Economic and Trade Agreement (CETA) and the United States-Mexico-Canada Agreement (USMCA), signal a shift towards prioritizing states' right to regulate over investment protection. By analyzing the limitations on legitimate expectation and investment protection in modern times and the implications for energy investments in the era of decarbonization, the article aims to shed light on the complexities of reconciling the competing interests of states and investors in the evolving landscape of international investment law. Ultimately, this author contends that achieving a balance between these interests is increasingly challenging and may require a reevaluation of the prevailing norms in investment protection.

Building a common EU framework for sustainable finance undoubtedly implies the integration of sound and sustainable processes and skills across the whole structure and governance of financial institutions. Consequently, a new financial paradigm is going to be needed, which will require the strengthening of investor care and protection, so contributing to the restoration of trust in the financial sector. In particular, on 18 December 2018, the European Securities and Markets Authority (ESMA) launched two public consultations on draft technical advice for the integration of sustainability risks and factors into the Directive on Markets in Financial Instruments (MiFID), the Alternative Investment Fund Managers Directive (AIFMD), and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS) regimes, with the aim to clarify the so-called fiduciary duties and to increase transparency in the financial services industry. However, the success of the EU initiatives on investor protection regulation may be seriously endangered by the existence of many challenges, weaknesses, and contradictions raised by economists and stakeholders in relation to the definition of sustainability, ESG data availability and reliability, the development of an EU taxonomy, conflicts of interest, product governance, and suitability assessment. This paper starts by briefly analyzing the recent developments of the regulation of sustainable finance at the global level, then offers a more detailed view on the establishment of a common regime on sustainable finance in the EU, with particular reference to the action plan ‘Financing Sustainable Growth’. Then, it examines the recent proposals for regulation on sustainable finance, specifically considering the barriers to the integration of sustainability risks and factors in the EU investor protection regulation—with particular reference to investment services—with respect to its four main dimensions: (1) disclosure of product information, (2) conduct of business (COB) rules, (3) product governance and intervention, and (4) financial education. The paper concludes that the EU reforming proposals, though admirable, risk oversimplifying a complex issue that cannot be easily solved without considering its practical implications on each category of financial operators in the performance of different financial services.

To assert the dynamic nature of international investment law may have become almost a commonplace. Case law is the obvious motor of development: during the last two decades in particular, awards by arbitral tribunals have redrawn the map of investment law and at times pushed its boundaries, at times prompting criticism of ‘arbitral activism’. However, arbitral practice interpreting and applying the existing law is not the only source of dynamism. Equally dynamic are processes of law-making, and notably the complex manner in which States define and redefine the law governing investments abroad. One notable development in this context is the increasingly frequent conclusion of Preferential Trade and Investment Agreements (PTIAs) that complement traditional bilateral investment treaties (BITs) and combine investment and trade rules. It is this source of dynamism that the contributions to the present book evaluate. For a long time, investment and trade were addressed in separate legal regimes. While the regulation of international trade was organized multilaterally (first in the General Agreement on Tariffs and Trade, then in the World Trade Organization (WTO)), substantive rules on investment protection were typically enshrined in bilateral treaties. For a considerable period of time, investment treaties followed the model of the ‘mother of all BITs’, the Draft Convention on Investments Abroad presented by Herman Joseph Abs, then Chairman of Deutsche Bank, and Lord Hartley Shawcross, a former British Attorney-General and then Director of Shell Petroleum Company. From the first-ever BIT concluded between Germany and Pakistan in 1959, fairly succinct provisions would limit the right of States to take foreign property and enshrine a number of general standards of protection. From the late 1960s onwards, these substantive provisions would be complemented by procedures for direct recourse to international arbi-