Abstract
The global push for climate change mitigation, particularly through renewable energy promotion and fossil fuel phase-out, has sparked a surge in investor-state arbitrations. At the heart of these arbitrations lies the concept of “legitimate expectations,” which is considered by arbitral tribunals as a cornerstone of the fair and equitable treatment (FET) standard. This Article conducts a comprehensive analysis of diverse approaches adopted by arbitral tribunals in interpreting legitimate expectations in the context of climate action. It then delves into specific interpretations of this concept within two categories: disputes related to states’ renewable energy promotion policies and those that stem from fossil fuel phase-out measures. This Article also highlights the complexities and inconsistencies in the application of legitimate expectations in each context. Through this comprehensive analysis and examination, this Article offers a nuanced understanding of the interplay between investors’ legitimate expectations and state led climate regulations. In doing so, it aims to provide valuable insights for policymakers, legal practitioners, the international arbitration community and scholars in navigating these complex issues.
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