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Environmental and Health Regulation: Assessing Liabilities Under Investment Treaties

65 Pages Posted: 22 Aug 2010 Last revised: 14 Jun 2014

Rahim Moloo

Gibson, Dunn & Crutcher LLP

Justin M. Jacinto

White & Case LLP

Date Written: August 20, 2010


Numerous investors have filed arbitration claims alleging that a state’s enactment of a regulatory measure purportedly aimed at protecting human health or the environment constituted a violation of the state’s investment treaty obligations. The question of when a regulatory measure should be treated as a compensable indirect expropriation has received the most attention from commentators. However, in advancing such claims, investors typically also rely on the fair and equitable treatment and non-discrimination standards. For all three, a threshold question is whether the state measure was legitimate. In answering that question, tribunals focus on the procedural soundness of the measure and whether it was motivated by proper regulatory objectives. The overall legal framework thus deviates significantly from the approach taken in the international trade law context, and appears to provide limited space for a claimant to prevail on a claim relating to a bona fide environmental or health regulation.

Suggested Citation

Moloo, Rahim and Jacinto, Justin M., Environmental and Health Regulation: Assessing Liabilities Under Investment Treaties (August 20, 2010). Berkeley Journal of International Law, Vol. 29, p. 1, 2011. Available at SSRN:

Rahim Moloo (Contact Author)

Gibson, Dunn & Crutcher LLP ( email )

200 Park Avenue, 47th Floor
New York, NY 10166-0193
United States

Justin M. Jacinto

White & Case LLP ( email )

United States

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