The Right to Regulate

Abstract

Discussions in the context of UNCITRAL WGIII reform efforts have revealed that different states may have different understandings about the contours and definition of the right to regulate in international investment law. Such different understandings reflect the legal literature on the topic and impact expectations concerning how the right should operate and the extent to which it is sufficiently incorporated in investment treaties. In this context, the Academic Forum undertook the commitment to provide a short concept paper outlining the core issues arising in relation to the right to regulate and explaining the principal policy options states have in this context when drafting their investment treaties. This concept paper addresses the definition or definitions of the right to regulate in the context of international investment law, recent IIA practice concerning the right to regulate, and investment tribunal interpretations of the right to regulate.

Keywords: right to regulate, international investment law, investor-State dispute settlement (ISDS), UNCITRAL, UNCITRAL Working Group III, ISDS reform, treaty interpretation, international investment agreements (IIAs), international investment treaties, arbitration, investment arbitration, treaty exceptions

JEL Classification: F02, F13, F21, F53, K41, K39, K40, K10, K33, K49, K12, K19, K20, K29, H70, E22, H87, F50, F52