Addressing Environmental Concerns Arising in Investor-State Dispute Settlement with Special Emphasis on the Indian Approach – Vol. 31, No. 4

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Author: Chitransh Vijayvergia* and G. Nikhita Hari**

Published: August 2021

Investment Disputes
Investor-State Dispute Settlement (ISDS)
Third Parties
India Model BIT


An overwhelming number of investment disputes in the last two decades have involved environmental considerations, but has Investor-State Dispute Settlement since evolved to address them? In light of the contemporary development of both environmental and investment law, this paper explores their interaction and their conflict in order to answer this question. The paper first identifies the ways in which environmental considerations enter investment disputes and classifies them into three categories based on the nature of the obligations and the party aiming to enforce them. A deconstruction of the legal intricacies of these categories is followed by an exploration of the methods used to resolve these conflicts viz. the efficacy of tribunals using the doctrines of police powers and margin of appreciation to balance conflicting obligations. The paper also examines the potential use of counterclaims as a tool for host-States to hold an investor responsible for the environmental damage caused, as well as the role played by the third parties who are affected by the negative environmental effects of an investment in imposing liability on the parties. The paper then gives a brief analysis of the Indian approach to sustainable investment, scrutinizing the India Model BIT currently in use. In conclusion, a range of suggestions and solutions addressing the abovementioned aspects as well as other issues on the matter are put forth with the bright hope of a more sustainable future for investment law.

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* Chitransh Vijayvergia is an Associate (Litigation and Dispute Resolution) at Panicker & Panicker Advocates, Kochi. He is a Batch of 2020 Graduate, B.A. LLB (Hons.) from the National University of Advanced Legal Studies, Kochi.

** G. Nikhita Hari is a Graduate, B.A. LLB (Hons.), Batch of 2020 rom the National University of Advanced Legal Studies, Kochi. She is an Advocate, enrolled with the Bar Council of Telangana, India and is an Associate at The Law Chambers, Hyderabad.