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“Investment law and arbitration need orderly adaptation to the changing environment.”

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The world has witnessed complex, transformative changes in recent years that significantly impact international investment law and arbitration. “This dynamic era calls for legal practitioners with a thorough understanding of various fields of international law,” Nicolas Angelet, investment arbitrator and counsel in public international law, states, “to navigate the intricacies and intertwines, and to ultimately provide long-term stability to investors and states alike.”

This interview has been published on Who is Who Legal (WWL) in September 2023

What is the role of investment law and arbitration in the current volatile context?  

“The essential function is to provide reasonable stability to investors and states alike. In this dynamic, unpredictable era, long-term stability might seem impossible. To be sure, it cannot be achieved by maintaining the legal rules entirely unchanged. Orderly adaptation is required to guarantee renewed and long-term stability and legitimacy.” 

What challenges the current legal framework? 

“On the one hand, there are increasing geopolitical tensions and ensuing economic conflicts among states and alliances. On the other hand, there is the protection of the environment and measures against climate change, particularly, that impose great challenges for the foreseeable future.”

How to address these challenges adequately as counsel and adjudicators? 

“In public international law, and therefore investment law and arbitration, this requires in-depth knowledge in two areas. First, a proper understanding of the legal regimes that interact and, at times, compete with investment law, such as environmental and climate change law, human rights, etc. Second, strong expertise in the rules and principles of general international law, which govern the interactions between the different substantive regimes. This in-depth knowledge is essential for all stakeholders – investors, states, counsel, and arbitrators – to navigate the increasingly complex legal landscape.”

You have a broad range of expertise, encompassing investment law and arbitration, and human rights and environmental law, among others. What is the common thread? 

“I have the privilege of serving as an arbitrator in investment law while acting as counsel in other fields of public international law, including international law on climate change and international human rights. My work as an arbitrator greatly benefits from my experience as counsel before various courts and tribunals, ranging from domestic courts in multiple countries over the European Court of Justice to the International Court of Justice. All these different views are equally enriching, and we can all benefit from a better understanding of other players in different areas.”

How is arbitration adapting to the current Zeitgeist? 

“Where the public interest is involved, we must balance the quest for efficiency, which remains of great importance, with effectiveness and sustainability in dispute resolution.”

In what ways are ICSID’s new regulations affecting investor-state arbitration proceedings? 

 “The amended ICSID rules and regulations are excellent overall. In particular, much is to be expected from the new Mediation Rules and Regulations. They can significantly contribute to the efficiency, effectiveness, and legitimacy of investor-state dispute settlement. Mediation allows for transforming disputes. It causes the parties to consider the fundamental interests that underlie their stated positions. The parties’ real interests may prove compatible even where the stated positions are not. Mediation also causes the parties to broaden the debate beyond the scope of the legal dispute as it would be argued before an arbitral tribunal. It may, for instance, lead to including third parties, such as local authorities or communities, in the overall settlement of the conflict. The transformative potential of mediation is most promising for investor-state disputes. It allows for restoring the investor-state relationship, which is an essential aspect of sustainable development.”

 Is mediation compatible with the exercise of host State regulatory powers?

“Unlike what is sometimes suggested, mediation can greatly assist in rights-based disputes, as opposed to merely interest-based ones. If well performed, mediation is not just about making concessions or splitting the baby. It should not necessarily cause the host State to renounce its public policy objectives underlying a disputed regulatory measure. Quite the opposite, transforming the dispute by broadening the terms of the debate will often lead the way to innovative solutions satisfying both the State’s and the investor’s interests.”