1. Introduction

Police Power Doctrine (‘PPD’) or the ‘right to regulate’ broadly refers to internal regulations of a State to preserve and protect the public interest, such as protection of public health, safety, environment, morals and taxation, in exercise of that state’s sovereign powers.[1] Under international investment law, PPD is a tool of defence available to the host state for claims relating to regulatory expropriations, irrespective of whether such regulations would substantially or entirely impair the value of the investment.[2] Multiple Investor-State Dispute Settlement (‘ISDS’) tribunals have acknowledged the existence of a state’s right to regulate for public interests and that, as a consequence, the same may lead to the possibility of non-compensation.[3] At times, regulatory measures implemented by the host state have also been characterised as an indirect expropriation, for which compensation will have to be paid to the investor.

Before tracing the evolution of the PPD, it is essential to understand that the concept’s scope is yet to be clearly defined.[4] There is a clear divide in the international investment law jurisprudence wherein the doctrine has been upheld by several awards, treaties and scholars and on the contrary, some jurists and awards have relied upon the sole effects doctrine to determine the effect of the measure on the property/investor in ignorance of the motives behind the implementation of such measure.[5] While ISDS tribunals in Saluka,[6] Feldman,[7] and Tecmed,[8] have observed that PPD is part of today’s customary international law, and the exercise of the PPD was found to be legitimate in all of the above cases despite the absence of an explicit clause in the BITs, tribunals such as Metalclad,[9] and Vivendi[10] have gone on to reject the application of PPD and instead applied the sole effects doctrine. Thus, tension persists concerning adopting an ideal framework to balance public and private interests. Judge Rosalyn Higgins has suggested that a balancing test should not justify placing the burden on a private property owner rather than the society at large and that the point of contention was about who should carry the burden of the public benefit, i.e. whether it should be the society as a whole as represented by the state, or the private individuals/investors in question.[11] However, ISDS tribunals have also adopted the proportionality test to balance.

Accordingly, the article will primarily trace and analyse the evolution of the PPD as a defence under international investment law. The discussion will include an analysis of investment agreements and other instruments of the 20^th century recognising the PPD and the interpretation of the PPD by various ISDS tribunals, with a special focus on the divergence in jurisprudence owing to the application of sole effects doctrine. Then, the article will also throw light on the resurgence of the PPD or the state’s right to regulate in international investment coupled with the impact of the same on negotiations of international investment agreements. In the final chapter, the article deals with the upsurge of the proportionality test as a requirement by ISDS tribunals to test the legitimacy of the exercise of PPD.  

2. Tracing the evolution of the PPD as a defence under international investment law

The term ‘police powers’ emanates from the United States of America (‘US’) law and was recognised and used as early as 1915 by the US Supreme Court, wherein it was found that ‘[t]he police power of the state cannot be abdicated nor bargained away, is inalienable even by express grant, and all contract and property rights are held subject to its fair exercise’.[12] Subsequently, in the latter half of the 20^th century, PPD gained prominence under international law and was specifically being used in the context of international investment law owing to the emergence of the ISDS.[13]

2.1.  The emergence of PPD or the ‘right to regulate in the 20^th-century instruments and international investment agreements (‘IIA’)

It is imperative to note that the clash between a state’s right to regulate or to exercise its police powers and the concept of protection of foreign investors, particularly with respect to indirect expropriation, has been persistent for over a century and, in fact, 1941, John Herz, with respect to indirect expropriation clauses mentioned that, ‘it may often be very difficult to decide whether or not the limits of usual interference have been reached or transgressed’.[14]

In the context of ISDS, one of the first sources that recognised the PPD was the 1961 Harvard Draft Convention on the International Responsibility of States for Injury to Aliens (‘Harvard Draft Convention’), where, Article 10(5) of the convention provided an exception for the (non)compensation of the deprivation of alien property when it resulted ‘from the execution of tax laws; from a general change in the value of the currency; from the action of the competent authorities of the State in the maintenance of public order, health or morality; or from the valid exercise of belligerent rights or otherwise incidental to the normal operation of the laws of the State’ and as long as the measure is not discriminatory, amounting to a denial of justice or abuse of the power (good faith requirement)’.[15] The same was reiterated in the American Law Institute’s Restatement of the Law (Second) in 1965[16] and then its Restatement of the Law (Third), cited at the opening of this chapter, which also went on to give a sectoral difference in differentiating a non-compensable taking from a regulatory expropriation.[17]

Furthermore, the 1967 OECD Draft Convention on the Protection of Foreign Property (‘OECD Draft Convention’) was not eventually ratified but served as a model BIT in many agreements[18], acknowledged the ‘sovereign right of the State, under international law, to deprive owners, including aliens, of property which is within its territory in the pursuit of its political, social or economic ends and that to deny such a right would be an attempt to interfere with its powers to regulate – by virtue of its independence and autonomy, equally recognised by international law – its political and social existence’.[19] It is pertinent to note that while the abovementioned instruments established a state’s right to regulate or to exercise the PPD, in practice, the successive IIAs did not stipulate the exception for the clauses pertaining to expropriation based on a state’s right to regulate.[20]

2.2.   The overshadowing effect of the Sole Effect Doctrine

Owing to the above lack of clarity, ISDS tribunals preferred relying upon the sole effect doctrine in relation to indirect expropriation. Many scholars have considered the sole effect doctrine to be the direct antithesis of the PPD.[21] By applying the sole effect doctrine, an ISDS tribunal will only consider the effect of the state’s measure to determine whether a case for indirect expropriation has been made out and whether the intention or the motive of the state is irrelevant in this exercise.[22] The key reason why the sole effect doctrine overshadowed the PPD or the state’s right to regulate was owing to a couple of cases decided by the Iran-US Claims Tribunal.[23]

In the 1980s, the Iran-US Claims Tribunal in Starett Housing and Tippets held in categorical terms that reference should be made only to the impact of the measure and that the intent of the government is less important than the effects of the measures, and that the form of the measures of control or interferences is less important than the reality of their impact.[24] Even though no rule of precedent exists under international investment law, ISDS tribunals have used previously decided cases as persuasive sources to arrive at the same conclusion.[25] In 1989, just like the tribunals did in Biloune (1989), Metalclad (2000), and Vivendi (2000), wherein the tribunals completely ignored the state’s right to regulate or exercise the PPD and applied the sole effect doctrine by referring to the earlier decisions of the Iran-US Claims Tribunal.[26]

Particularly, Biloune and Metalclad were clear cases of indirect expropriation by the host states. Yet, both the awards failed to deal with the host state’s right to regulate or the exercise of PPD and merely relied upon the sole effect doctrine to conclude that the host state had to pay compensation for the indirect expropriation. Furthermore, the ISDS tribunal in Pope Talbot (2000), while erroneously interpreting the Third Restatement of the US Foreign Relations Law mentioned hereinabove, went on to dismiss PPD as a defence for the host state and expressly stated that it could not constitute a defence against expropriation.[27] The ISDS tribunal in Santa Elena (2000) went one step ahead. It held that even if the expropriation was in furtherance of environmental measures of the state, irrespective of whether the same is beneficial to the society as a whole, the state’s obligation to pay compensation remains.[28]

2.3.  The Resurgence of the PPD or the state’s ‘right to regulate.’

While Starett Housing and Tippets were the first ISDS tribunals to apply the sole effect doctrine in ignorance of the PPD and paved way for other tribunals to follow the sole effect doctrine, another Iran-US Claims Tribunal case i.e. Sedco (1985), recognised the PPD and identified it to be ‘an accepted principle of international law that a State is not liable for economic injury which is a consequence of bona fide “regulation” within the accepted police power of states’.[29] Even though the Sedco decision was rendered in 1985, i.e. around the same time the decisions in Starett Housing and Tippets were rendered, other ISDS tribunals till 2000 chose to follow and apply the sole effect doctrine.

However, the watershed moment for the PPD came vide the decision in S.D.Myers (2000), wherein the ISDS tribunal held that the ‘regulatory conduct by public authorities of the host state would not constitute expropriation’.[30] While the tribunal did not rule out the possibility that regulatory conduct could be the subject of a legitimate expropriation claim, it still went on to make a crucial distinction between expropriation and regulation wherein they observed that ‘regulation screens out most potential cases of complaints concerning economic intervention by a state and reduces the risk that governments will be subject to claims as they go about their business of managing public affairs’.[31]

This baton was picked by the tribunal in Tecmed (2003), wherein the investor, i.e. Tecmed, could not renew its permit to operate the landfill in Mexico, and the tribunal held that it amounted to indirect expropriation.[32] However, the tribunal in Tecmed, unlike the tribunals that only adopted the sole effect doctrine, took a balanced approach, i.e. apart from considering the effect of the measure on the economic rights of the investors, the tribunal also took into consideration the goals cum reasonableness of the measure and the legitimate expectations of the foreign investors, while also stating that the PPD is indisputable.[33] Thus, Tecmed is an important decision for four reasons. Firstly, even though it was a mere lip service for PPD, it was one of the earliest decisions that invoked the PPD and discussed the applicability of the same. Secondly, the decision was rendered in the absence of an express exception under the relevant BIT. Thirdly, the tribunal held that the PPD is part of today’s customary international law. Fourthly, it used the proportionality test to test if the expropriation was legitimate.

Subsequently, the ISDS tribunal in Methanex (2003), wherein a Canadian investor (producer of MTBE) was aggrieved by an executive order by the state of California to ban the use of MTBE due to environmental and public health reasons.[34] The investor brought a claim under the North American Free Trade Agreement (‘NAFTA’) alleging expropriation.[35] Interestingly, the tribunal, without expressly referring to PPD, went on to dismiss all the claims by stating that ‘as a matter of general international law, a non-discriminatory regulation for a public purpose, which is enacted in accordance with due process and, which affects, inter alios, a foreign investor or investment is not deemed to be expropriation and compensable unless specific commitments had been given by the regulating government’.[36]

Furthermore, the key takeaway from the above excerpt of the Methanex award is the conditions that are laid by the tribunal, which will have to be met by a host state while exercising its police powers or its right to regulate, and the same are as follows:

1. That the regulatory measure should not be discriminatory in nature;
2. That the regulatory measure should be enacted in the public interest; and
3. That the regulatory measure should not be contradictory to the legitimate expectations of the foreign investors.

This part of the Methanex has been particularly impactful to date as the exercise of the PPD has become a norm across ISDS arbitrations, and this has also led to the adoption of clear-cut exception clauses across various IIAs, pertinently the exception based on general and non-discriminatory regulations.[37]

In Saluka (2005), where the privatisation of the host state’s third largest bank failed, the investor instituted a claim against the host state for the measures that had deprived the investor of its enjoyment of the investment.[38] However, the tribunal held that the measures implemented by the host state were lawful and permissible, aimed at general welfare and that they did not amount to expropriation and backed this finding with the rationale that ”it is now established in international law that States are not liable to pay compensation to a foreign investor when, in the normal exercise of their regulatory powers, they adopt in a non-discriminatory manner bona fide regulations that are aimed to the general welfare’.[39] Saluka was yet another tribunal that went on to apply the PPD or the host state’s right to regulate to deny compensation to the investor for the regulatory taking, even though there existed no explicit clause under the BIT and hence like Tecmed¸ stated that the PPD is part of customary international law.    

2.4.  Impact of the Resurgence of the PPD or the State’s ‘right to regulate the negotiation of IIAs

As captured hereinabove, from 2000- 2005, a string of important arbitral awards was rendered, which captures the resurgence of the PPD or the state’s ‘right to regulate’ and not having to pay compensation for it if it meets certain conditions. This trend of indirect expropriation has nudged the state to negotiate and incorporate clauses in their IIAs that recognise the state’s right to regulate or, in other words, a bona fide regulation will enjoy a special status, i.e. it shall not be considered as an act of expropriation if it were for those specific reasons. One of the first states to initiate this trend was the US, from where the PPD originated from. The US Model BIT 2004 expressly recognised the PPD and provided that ‘except in rare circumstances, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations’.[40] This was adopted again in the US Model BIT 2012.[41]

A similar provision to that of the US Model BIT 2004 and 2012 can be found in a number of other IIAs, such as the India-China BIT[42], EU-Singapore FTA[43], Kore-Vietnam FTA EU–Canada Comprehensive and Economic Trade Agreement (CETA)[44] China-Australia FTA[45] and the ASEAN Comprehensive Investment Agreement (‘ACIA’).[46] Pertinently, Article 8.9.1 of the CETA makes it explicitly clear that the act of implementing a regulation shall not be construed as a breach under the IIA even if it ‘negatively affects an investment or interferes with investors, including its expectations for profits’.[47] The ACIA, in clear and categorical terms, stated that the ‘[n]on-discriminatory measures of a Member State that are designed and applied to protect legitimate public welfare objectives, such as public health, safety and the environment, do not constitute an expropriation….’.[48]

The India-Korea Comprehensive Economic Partnership Agreement (‘CEPA’), which is akin to Article XX of the General Agreement on Tariffs and Trade (‘GATT’), states that ‘subject to the measure not being applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between States, nothing in this Chapter shall be construed to prevent the adoption or enforcement by any Party of measures:(a) Necessary to protect public morals or to maintain public order; (b) Necessary to protect human, animal or plant life or health, or the environment; (c) Necessary to secure compliance with laws and regulations which are not inconsistent with the provisions of this Chapter; (d) Necessary to protect national treasures of artistic, historic or archaeological value; or (e) Necessary to conserve exhaustible, natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption’.[49] Article 10 of the Canada Model BIT (2004) also adopted a similar text to that of CEPA and explicitly stated that the measures concerned must not be applied ‘in a manner that would constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment’.[50]

Therefore, from the above examples of various IIAs, in order to legitimately invoke the PPD, the following standards have been enumerated:

1. That the exercise of the PPD or the ‘right to regulate’ is not absolute;
2. That the measures implemented by the host state should be general, non-discriminatory and has to be in good faith;
3. That the measures should be designed and applied to protect legitimate public welfare objectives/essential public interests;
4. There cannot be one exhaustive list of essential public interests, and the IIAs provide sectoral differences, i.e. holding certain sectors of the public regulations in higher regard, such as environment, public health, taxation and security interests of the host state[51]; and
5. In rare circumstances, these non-discriminatory regulatory actions can amount to expropriation and, as a consequence, will be compensable.

Apart from the above standards, it is apposite to state that the examples of the various IIAs provided hereinabove are among the major trade and investment across the globe, and they have acknowledged and adopted the PPD as a core principle. The combined FDI outflows of the EU, the US, Canada and ASEAN countries alone make more than half of the world’s GDP and FDI inflows.[52] While this is not a definitive establishment of consistent state practice, it certainly showcases the direction in which the states negotiate their IIAs and how PPD is gaining importance under international investment law. In fact, the Investment Agreement for the Common Investment Area of the Common Market for Eastern and Southern Africa (COMESA) happens to be one of the few IIAs that contain an explicit reference to the term ‘police powers’ and further goes onto state that it is a customary international law principle.[53]

2.5.  The Upsurge of the Proportionality Test Requirement

An additional factor that is being taken into consideration while dealing with the PPD is the proportionality test. Both Tecmed as well as the Azurix Tribunals used the proportionality principle with respect to adopting the PPD.[54] The tribunals borrowed the concept of proportionality from the European Court of Human Rights jurisprudence in Article 1 of Protocol No 1 of ECHR (protection of property). It is called the four-pillar proportionality test, which is a normative test of the ECtHR, and they are as follows:

1. Whether the objective of the measure is sufficiently important to justify the limitation of a protected right;
2. Whether the measure is rationally connected to the objective;
3. Whether there is a less intrusive measure for the investor when seeking to uphold the public interest and establish that the interference in that particular level was justified and necessary; and
4. If it would put an excessive burden solely on the party whose right would be infringed by the measure.[55]

 Both the Tecmed and the Azurix tribunals applied the four-pillar proportionality test to arrive at the conclusion that if an investor is faced with a specific individual and excessive burden, then such regulatory measures of the host state will fail the proportionality test.[56] It is pertinent to note that both Tecmed and Azurix ruled in favour of the investor while rejecting the state’s right to exercise PPD.

            However, the four-pillar proportionality test has also been used in aid of evaluating whether the exercise of PPD was legitimate. The tribunal in Continental held that while the host state can implement measures to protect the rights of the general public, they cannot affect the investor’s property in a manner that is ‘intolerable, discriminatory, or disproportionate’.[57] Similarly, the LG & E Tribunal held that the measures implemented by a state in furtherance of social and general welfare must be accepted without any liability, except in cases where the state’s action is ‘obviously disproportionate to the need being addressed.’[58] Subsequently, in the Philip Morris case, where the states’ sovereign right to regulate/Uruguay’s valid exercise of police powers was upheld with regard to an act obliging tobacco-producing companies to have a single package presentation and as a consequence, no compensation was awarded to the investor, also used the proportionality principle in arriving at the conclusion that compulsory packaging requirements of Uruguay were both ‘reasonable’ and ‘proportionate’ measures.[59]

            Even until recently, the proportionality test has been used to test the legitimacy of the exercise of PPD by the host state in Casinos Austria[60] and Eco Oro Minerals.[61] However, it is pertinent to state that various jurists and scholars, including Judge Gary Born, who was part of the panel in Philip Morris vide his dissenting opinion, argued that the proportionality test contemplated under the ECHR cannot be applied to IIAs as both belong to different regimes.[62] It is apposite to state that proportionality as a requirement while testing the legitimacy of the PPD is not something contemplated under any of the IIAs discussed hereinabove. As alluded to above, the IIAs lay down different standards to ensure that the exercise of the PPD is balanced. Some scholars also find the proportionality test to be overly intrusive for the exercise of a state’s police powers.[63]

 However, based on the above discussion, it is clear that it is, in fact, the proportionality test that has brought about a balance to the exercise of PPD. A plain evaluation of the language contained in IIAs would go on to show that the States, in fact, possess wide powers to impose a regulatory framework that can affect investments. While there are clear standards that have been set out under the IIAs itself, the proportionality test has been applied by tribunals from 2003 onwards, and the same has wide acceptance across ISDS tribunals. It is, in fact, argued that the proportionality test as borrowed from the ECtHR jurisprudence is very much in furtherance of the language contained in the IIAs, i.e. the usage of the words ‘non-discriminatory’ and ‘legitimate public welfare’ encompasses the elements of the four pillar test. Moreover, it has also been of constructive use to the tribunals, i.e. it allowed the tribunals to adopt a method to maintain checks and balances in the process of testing the legitimacy of exercising the PPD. It is pertinent to note that the proportionality rest has been accepted, recognised and applied in the US, the UK, India, South Africa, Israel, and ‘all the way to South America.’[64] Therefore, there is a wide acceptance of this principle.

3. Conclusion

In conclusion, it is evident from the above discussion that the PPD is starting to be widely accepted by arbitral tribunals, and the doctrine has also been incorporated in multiple IIAs in practice. While there persists a debate as to whether the PPD has attained customary value under international law, it can be safely concluded from the above discussion that PPD is, in fact, a principle of customary international as held by multiple tribunals, accepted by most States as PPD or the ‘right to regulate’ has been incorporated in their respective IIAs and by virtue of this states have treated the PPD to be an obligation which is binding on them. While the exact meaning of PPD cannot be ascertained, and the same will depend upon the clause contained under the relevant IIA or the facts of a particular case, it is nevertheless recognised and accepted by states that such a right exists in principle.

This has, in turn, led to the neglecting of the sole effects doctrine with respect to regulatory takings, which was widely used in the 1990s. While the sole effects doctrine still plays a key role while dealing with indirect expropriation, it does not have a role to play until a particular tribunal has carried out a test to find out of the exercise of the PPD was legitimate coupled with the proportionality test. While the proportionality test has played a vital role in the act of balancing the test to determine whether the exercise of PPD is legitimate in a certain case, it is only supplementary in nature and cannot in any way supersede or be intrusive to the PPD. Thus, a combination of the PPD and the proportionality test, as already seen in practice, will ensure that adequate checks and balances are in place.

[1] A. Newcombe, The Boundaries of Regulatory Expropriation in International Law, 20(1), ICSID Review Foreign Investment Law Journal 26 (2005).

[2] OECD, ‘Indirect Expropriation’ and the ‘Right to Regulate in International Investment Law’ (2004) OECD Working Papers on International Investment, 2004/04 (OECD Publishing) 3.

[3] Martin Roy Feldman Karpa v United Mexican States, ICSID Case No ARB(AF)/99/1, Award (16 December 2002); Tecnicas Medioambientales Tecmed, SA v The United Mexican States, ICSID Case No ARB (AF)/00/2, Award (29 May 2003); Methanex Corporation v United States of America, UNCITRAL, Final Award of the Tribunal on Jurisdiction and Merits (3 August 2005); Saluka Investments BV v The Czech Republic, UNCITRAL, Partial Award (17 March 2006); LG&E Energy Corp, LG&E Capital Corp, and LG&E International, Inc v Argentine Republic, ICSID Case No ARB/02/1, Decision on Liability (3 October 2006); Glamis Gold Ltd v The United States of America, UNCITRAL, Award (8 June 2009); Philip Morris Brands Sarl, Philip Morris Products SA.

[4] C.Titi, Police Powers and International Investment Law, 14, Brill 324 (2018).

[5] B. Mostafa, The Sole Effects Doctrine, Police Powers and Indirect Expropriation under International Law, 15 AIJL 272 (2008).

[6] Saluka Investments BV v The Czech Republic, UNCITRAL, Partial Award (17 March 2006), para 262.

[7] Marvin Feldman v. Mexico, ICSID Case No.ARB(AF)/99/1, Award, 16 December 2002, para. 103.

[8] Tecnicas Medioambientales Tecmed, SA v The United Mexican States, ICSID Case No ARB (AF)/00/2, Award 29 May 2003, Para 119.

[9] Metalclad Corporation v. Mexico, ICSID Case No.ARB(AF)/97/1, Award, 30 August 2000, para. 103.

[10] Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentina, ICSID Case No. ARB/97/3, Award, 20 August 2007, para. 7.5.20.

[11] R.Higgins, The Taking of Property by the State: Recent Developments in International Law, 176, Recueil des Cours—Academie de Droit International 277 (1982).

[12] Chicago & Alton R. Co. v. Tranbarger, 238 U.S. 67 (1915) 238.

[13] See Titi, supra note 4, at 325.

[14] J.Herz, Expropriation of Foreign Property, 35, AJIL 251 (1941).

[15] Article 10(5), Draft Convention on the International Responsibility of States for Injuries to Aliens, prepared by the Harvard Law School, 1961.

[16] A.Pellet, Police Powers or the State’s Right to Regulate, Kluwer Law International 451 (2016).

[17]  Restatement of the Law Third, the Foreign Relations of the United States, American Law Institute (American Law Institute Publishers (1987) 712.

[18] T. St.John, The Rise of Investor-State Arbitration 93 (2018).

[19] OECD Draft Convention, Art 3(iii).

[20] O.E.Bulut, Drawing boundaries of police powers doctrine: a balanced framework for investors and states, 13 Journal of International Dispute Settlement 586 (2022).

[21] V.Heiskanen, ‘The Doctrine of Indirect Expropriation in Light of the Practice of the Iran-United States Claims Tribunal’ (2007) 8 JWIT, 215, 218.

[22] See, Titi, supra note 4, at 329.

[23] See, Heiskane, supra note 21, at pg.218.

[24] Starett Housing v Islamic Republic of Iran, 4 IRAN-US CTR 122 (1983), Interlocutory Award (Award No. ITL 32-24-1) 19 December 1983, para 66; Tippets McCarthy, Stratton v TAMS-AFFA, 6 IRAN-US CTR219, Award (Award No. 141-7-2) 29 June 1984 para 225.

[25] Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Islamic Republic of Pakistan, ICSID Case No ARB/03/29, Award (27 August 2009) para 145. 35.

[26] Biloune and Marine Drive Complex Ltd v Ghana Investments Centre and the Government of Ghana, ad hoc award of 27 October 1989, ILR, vol. 95, 1990, 209, para 57; Compania´ de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Award (21 November 2000) para 7.5.17. Metalclad Corporation v The United Mexican States, ICSID Case No ARB.(AF)/97/1, Award (30 August 2000), para 120.

[27] Pope & Talbot Inc v The Government of Canada, UNCITRAL, Interim Award (26 June 2000) para 96.

[28] Compaiiia Del Desarrollo De Santa Elena, S.A. v. The Republic of Costa Rica (Final Award) (ICISD Arbitral Tribunal, Case No. ARB/96/1, 17 February 2000), paras 71-72.

[29] Sedco Inc Oil Company v. TAMS-AFFA, 129 IRAN-US CTR, Interlocutory Award (Award No ITL 55-129-3)—17 September 1985.

[30] S.D. Myers, Inc. v. Government of Canada (Award) (UN CITRAL Arbitral Tribunal, 13 November 2000), para 281.

[31] id, para 282.

[32] See, Tecmed, supra note 8, at paras 41 and 151.

[33] id, para 119; See, Newcombe, supra note 1, at para 18.

[34] See, Methanex, supra note 2, at part IV, chapter D, paras 2–4.

[35] id.

[36] id, para 7.

[37] See, Bulut, supra note 20, at pg.593.

[38] See, Saluka, supra note 6, at pg.253.

[39] See, Saluka, supra note 6, at pg.253.

[40] US Model BITs 2004, Annex B(4)(b).

[41] US Model BITs 2012, Annex B(4)(b).

[42] Protocol to the Agreement between the Republic of India and the People s Republic of China on Promotion and Protection of Investments, of 21/11/2006.

[43] EU-Singapore FTA (Version October 2014 (before legal revision)), Annex 9-A.

[44] EU-Canada Comprehensive Economic and Trade Agreement (CETA), Article 8.9.

[45] China Australia FTA, 2015.

[46] ACIA, 2012, Article 17.

[47] See 44, supra.

[48] See 46, supra.

[49] Article 10.18(1) of the India-Korea Comprehensive Economic Partnership Agreement (CEPA) 2009.

[50] Article 10 Canada Model BIT, 2004.

[51]See, Bulut, supra note 20, pg.588.

[52] (https://data.worldbank.org/indicator/BM.KLT.DINV.CD.WD?end=2020&hx0026;start=2015), last visited (03.04.2023).

[53] COMESA, Article 20, paragraph 8.

[54] Azurix Corp. v. Argentina, ICSID Case No. ARB/01/12, Award, 14 July 2006, para. 31.

[55] Bank Mellat (Appellant) v Her Majesty’s Treasury [2013] UKSC 38, [2013] UKSC 39, Lord Reed, para 72

[56]See, Tecmed, supra note 8, at para 122.

[57] Continental Casualty Company v The Argentine Republic, ICSID Case No ARB/03/9, Award (5 September 2008) para 276.

[58] LG&E Energy Corp, LG&E Capital Corp, and LG&E International, Inc v Argentine Republic, ICSID Case No ARB/02/1, Decision on Liability (3 October 2006), para 195.

[59] Philip Morris Brands Sarl, Philip Morris Products SA and Abal Hermanos SA v Oriental Republic of Uruguay, ICSID Case No ARB/10/, Award (8 July 2016).

[60] Casinos Austria Aktiengesellschaft v Argentine Republic, ICSID Case No ARB/14/32, Award (5 November 2021).

[61] Eco Oro Minerals Corp v Republic of Colombia, ICSID Case No ARB/16/41, Decision on Jurisdiction, Liability and Directions on Quantum (9 September 2021) paras 629–699.

[62] Philip Morris Brands Sarl, Philip Morris Products SA and Abal Hermanos SA v Oriental Republic of Uruguay, ICSID Case No ARB/10, Concurring and Dissenting Opinion Co-Arbitrator Gary Born (8 July 2016) para 87.; Supra Mostafa, pg.284; Jansen Calamita, ‘The Principle of Proportionality and the Problem of Indeterminacy in International Investment Treaties’ (2015) Yearbook of International Investment Law and Policy 2013-2014 157, 178.

[63]See, Bulut, supra note 20, at pg.604.

[64] V.C.Jackson and M.Tushnet, Proportionality 75 (2017).