Integrating, Reconciling, and Prioritising Climate Aspirations in Investor-State Arbitration for a Sustainable Future: The Role of Different Players

There is a pervasive sense of tension between investor-State arbitration (ISA) and international climate change law. Both fields use different rationalities and evolved through completely different treaty systems. The tensions between the regimes are evident in the practice of ISA tribunals that hardly engage in analyses of States' climate obligations. To mitigate this, this article proposes that climate aspirations must be integrated at various levels of the ISA regime by different players and at various stages. While States can contribute to this by drafting investment treaties better; arbitrators can reconcile the tensions by using pro-climate interpretative mechanisms; arbitration institutes can formulate procedural rules embedding third party participation and allowing counterclaims in ISA. Counsels and disputing parties can adopt best practices in managing arbitrations in a sustainable way, use climate and net zero aligned clauses and empower the arbitration tribunal to interpret and modify applicable law to align it to climate objectives.