Brexit, the City and Options for ISDS

Abstract

This paper explores how the Fair and Equitable Treatment (FET) standard and the idea of protecting investor’s legitimate expectations could form the basis of an ISDS claim against the UK government for the consequences of Brexit. The discussion operationalises this through the presentation of a case study. We consider the position of foreign financial firms that established themselves in the City of London to take advantage of the UK’s much lauded position as the centre of European finance and investigate their options in pursuing a claim through investment treaty arbitration. The paper concludes that it is possible for an investor to win such a case in the event of a no-deal Brexit (or one that does not contain provision for financial services).

Keywords: ISDS, Brexit, Arbitration, ICSID, Tribunals, Britain, EU, Passporting, Financial Services

JEL Classification: A12, P26, P48