HOME THE FIRM EXPERTISE OUR PEOPLE NEWS & INSIGHTS E-NEWSLETTER ARTICLES CLIENT ALERTS AWARDS EVENTS CAREERS CONTACT US ARTICLES Nauru triggers two-year countdown for deep seabed mining On 25 June 2021, the Republic of Nauru (“Nauru”) triggered a two-year countdown for the International Seabed Authority (the “ISA”) to finalise the regulations for the exploitation of minerals in the international seabed. If ISA does not complete those regulations within two years, deep seabed mining contractors could commence exploitation based on provisionally adopted regulations. ISA regulates all mining activities in the international seabed beyond the limits of national jurisdiction (the “Area”). ISA is an autonomous international organisation established under the 1982 United Nations Convention on the Law of the Sea (“UNCLOS”). No mining activities, whether exploration or exploitation, can take place in the Area without an appropriate licence from ISA. ISA has developed a detailed licensing system for prospecting and the exploration of the Area, but it is yet to adopt such a system for the exploitation of mineral resources in the Area. ISA has adopted three-sets of exploration regulations and it has granted 31 exploration licences to a total of 22 national agencies and private companies. In the absence of exploitation regulations, those contractors, in principle, cannot move to the exploitation phase yet. Since 2014, ISA has been developing exploitation regulations. Although, those regulations remain in draft form, significant progress has been made. They comprise more than 117 pages of complex technical and legal considerations and are accompanied by several detailed draft standards and guidelines. Nauru has now invoked the 1994 Agreement relating to the Implementation of Part XI of UNCLOS, Annex 1, Section 1(15) to request that ISA adopt the exploitation regulations necessary to facilitate the approval of plans of work for exploitation in the Area. Nauru made this request on the basis that Nauru Ocean Resources Inc (“NORI”), a State-sponsored Nauruan contractor and a wholly-owned subsidiary of The Metals Company, intends to apply for approval of a plan of work for exploitation in two years. If in two years’ time ISA has not completed the exploitation regulations, ISA shall consider plans of work from NORI and other contractors, based on provisionally adopted regulations. The current draft exploitation regulations (which would likely be adopted provisionally) foresee a one-year process to review a plan of work for exploitation. As such, commercial mining could potentially commence in three years time. Notably, however, ISA can refuse to approve a plan of work and thereby prevent exploitation in the Area. Nauru explained that it triggered the two-year count down because of “the urgency of concluding [the exploitation regulations] […] to provide the legal certainty required for this industry to move forward.” Others that support Nauru’s initiative point towards the need to unlock mineral resources in the Area to accelerate the green energy transition. Opponents like Deep Ocean Stewardship Initiative, however, warn that two years is not sufficient to allow for scientifically informed decision-making and that rushing the regulations would run counter to the precautionary approach. A collective of African States has criticised Nauru’s action noting that key sections of the exploitation regulations have yet to be agreed, in particular a financial regime that compensates land-based miners for their losses. For further information, please contact Robert Volterra (Robert.Volterra@volterrafietta.com), Angela Ha (Angela.Ha@volterrafietta.com) or Florentine Vos (Florentine.Vos@volterrafietta.com). See here for the Volterra Fietta virtual seminar on the subject of deep seabed mining. Latin America and the Caribbean join the space race with the creation of a regional space agency (ALCE) Somewhat abruptly, the planet entered into a new and rapidly accelerating space race. Latin America and the Caribbean have decided to join that race. On 24 July 2021, the Ministers of Foreign Affairs of Argentina, Bolivia, Costa Rica, Ecuador, Paraguay and Mexico signed a joint declaration containing a draft constitutive convention establishing the Latin American and Caribbean Space Agency (“ALCE”). On 18 September 2021, at the VI Summit of Heads of State and Government of the Community of Latin American and Caribbean States (CELAC), the final version of the Constitutive Convention was approved by 18 Caribbean and Latin American States (Antigua and Barbuda, Argentina, Bolivia, Costa Rica, Cuba, Dominica, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Vincent and the Grenadines, Saint Lucia and Venezuela). The Constitutive Convention provides that ALCE is an international organisation and will be headquartered in Mexico. The signatories share the view that space exploration will be critical for the development of their States and the region as a whole. They recognise that failing to join the space race and partake in space exploration activities will highlight the technological and scientific disadvantages that the region currently faces. At the same time, they are conscious that no Latin American or Caribbean State has, on its own, the financial, technological or scientific capacity to engage meaningfully in any space exploration activities. ALCE seeks to address those issues. In the style of the European Space Agency, ALCE will coordinate space-related activities among its Member States. It promises to direct the application of space science, technology and resources towards the region’s shared goals and challenges. Mexico’s Minister of Foreign Affairs, who spearheaded the project along with his Argentinian counterpart, explained that joining financial and human resources will enable Latin American and Caribbean States to become relevant players in the space race. Among others, ALCE promises to improve the region’s capabilities in Earth observation systems for use in agriculture, natural disasters (droughts, floods, fires, hurricanes), security and surveillance, oceanography, meteorology, exploration of natural resources and cartography. ALCE’s Constitutive Convention will remain open for signature by the other Latin American and Caribbean States. It also contemplates the possibility for other States and international organisations to participate, provided that their participation is previously approved by ALCE’s Assembly. For further information, please contact Robert Volterra (Robert.Volterra@volterrafietta.com) or Ricardo Gerhard (Ricardo.Gerhard@volterrafietta.com). The Escazú Agreement enters into force The Regional Agreement on Access to Information, Public Participation and Justice in Environmental Matters in Latin America and the Caribbean, adopted in Escazú, Costa Rica, on 4 March 2018 (the “Escazú Agreement”, the “Agreement”), entered into force on 22 April 2021. The Escazú Agreement is the first treaty focusing on the environment in Latin America and the Caribbean and seeks to address key issues that the region faces on this matter. It is the result of negotiations following the 2012 United Nations Conference on Sustainable Development (Rio+20) and seeks to support the attainment of Principle 10 of the 1992 Rio Declaration on Environment and Development, regarding the right to access information, public participation and justice in environmental issues. Although lacking participation of key players in the region, such as Brazil, Colombia and Chile, the Agreement is a positive development for environmental protection in Latin America and the Caribbean. Key provisions and takeaways from the Escazú Agreement a) Access to environmental information One of the guiding principles of the Agreement is the principle of maximum disclosure, which informs the Agreement’s provisions in relation to disclosure of environmental information under control of State Parties, as well as private entities. As such, the Agreement introduces obligations to guarantee access to environmental information held by State Parties, albeit limited “to the extent possible within available resources” (Article 6(1)). Further, it addresses the role of private companies in relation to environmental matters, obliging State Parties to “promote access to environmental information in the possession of private entities” (Article 6(12)) and “encourage public and private companies […] to prepare sustainability reports that reflect their social and environmental performance” (Article 6(13)). b) Protection of environmental activists Of particular interest is Article 9 of the Agreement, in relation to human rights defenders in environmental matters. It includes a binding obligation on State Parties to guarantee “a safe and enabling environment” to human rights defenders. This provision recognises and seeks to address the region’s issues with violence towards environmental activists, binding parties to “take appropriate, effective and timely measures to prevent, investigate and punish attacks, threats or intimidations that human rights defenders in environmental matters may suffer while exercising the rights set out in the present Agreement” (Article 9(3)). c) Environmental protection and human rights The Agreement follows the line seen in recent years of increased recognition of the link between human rights and the environment in international law. In this regard, the Agreement expressly recognises the link between environmental and human rights and acknowledges the protection of the environment as a human rights issue. As such, it establishes that the Agreement is a “legal instrument for environmental protection, but it is also a human rights treaty” (Article 4(1)). Next steps Critical issues as to the implementation of the Escazú Agreement will be decided at the first Conference of the Parties to the Agreement, which will convene a year after its entry into force. The meeting will determine key outstanding points such as the adoption of rules of procedure, including modalities for “significant participation by the public” (Article 15(4)(a)), as well as the establishment of subsidiary bodies essential to the effective implementation of the Agreement (Article 15(5)(b)). Commentary Environmental, social and governance (“ESG”) matters are gradually gaining priority in regulators’ agendas, both at an international and national level. As such, disclosure requirements continue to increase, driven by a general call for greater transparency in relation to these issues. The Escazú Agreement is a landmark treaty for Latin America and the Caribbean, enshrining the right of access to information and the principles of transparency and “maximum” disclosure in environmental issues. The general non-binding character of the obligations set forth in the Agreement should not be a measure of its capacity to effect change. The Agreement will facilitate public scrutiny of the environmental record of private entities and promote corporations’ transparency in relation to their operations. This is likely to have a knock-on effect on companies’ policies regarding ESG matters. Space arbitration: Mexico reportedly avoids liability in satellite dispute with Eutelsat On 15 September 2021, the Mexican Ministry of Economy reported that it had successfully defended a claim brought by satellite giant Eutelsat in an arbitration before the International Centre for Settlement of Investment Disputes (“ICSID”). According to media reports, Eutelsat’s claim related to the obligation Mexico had imposed on SatMex – which Eutelsat purchased in 2014 – to reserve portions of its satellite spectrum for guard bands and for Government use. The arbitration was reportedly commenced by Eutelsat in August 2017 under the France-Mexico bilateral investment treaty. Relying on the broad protections available in that treaty, Eutelsat had argued that the Government’s spectrum allocation obligations discriminated against its investment as compared to competitors. According to the Mexican Government, the tribunal recently dismissed those claims, with costs awarded to Mexico. Satellites and space operations are projected to increase in a manifold way in the coming years. The industry is also subject to a significant amount of Government regulation, only beginning with the terms by which satellite spectrum is awarded to private operators. Undoubtedly, this will continue to give rise to significant disputes between Governments and private satellite operators (and other space companies), including under the terms of so-called investment protection treaties or bilateral investment treaties. These treaties may provide some space companies with the right to initiate investor-State arbitration against Governments for redress of their alleged rights. To date, for instance, as is available in the public sphere, satellite-based claims have led to three sets of investor-State arbitration disputes: (a) Eutelsat’s claim against Mexico; (b) a series of claims by Mauritian and Singaporean companies against India arising out of the annulment of a satellite lease contract between Devas Multimedia and the Indian-government-owned Antrix Corporation; and (c) claims for satellite interference brought against Egypt by Al Jazeera. Volterra Fietta lawyers have been senior counsel to at least some of the parties in two of those three instances. For further information, please contact Robert Volterra (Robert.Volterra@volterrafietta.com) or Gunjan Sharma (gunjan.sharma@volterrafietta.com). UK in the market for new trade deals: potential new benefits for States and investors The United Kingdom (“UK”) is in the market for trade deals, with potential new benefits for a number of States and both inbound and outbound investors. As of 1 January 2021, following its exit from the European Union (“EU”), EU trade agreements no longer apply to the UK. It is now in the process of finalising a UK-Australia trade deal and a UK-New Zealand trade deal, having recently published an Agreement in Principle for each of them. In the same vein, the UK is negotiating trade deals with the 11 Pacific Rim States forming the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”). It has also expressed an interest in joining the US-Mexico-Canada trade pact and in trade deals with other States, such as India. This follows recent new trade deals signed with Japan in late 2020 and with Norway, Iceland and Liechtenstein in July 2021. UK-Australia trade deal On 17 June 2021, the UK and Australia published an Agreement in Principle, setting out broad terms of their deal. It followed the launch of negotiations between the UK and Australia from June 2020. The UK government expects to publish the legal text of the deal by the end of 2021, although Australia has not yet shared any timing expectations. The deal will include the following: significant liberalisation of tariffs on trade in goods; “Most Favoured Nation” provisions (covering services and investment). These require that if the UK or Australia provide more generous access for investment from other States, this will also be extended to Australian and UK investors; protection for UK and Australian investors, including from unfair or discriminatory treatment and expropriation of assets without due compensation, reflecting the customary international standard of protection; a provision confirming that economic sanctions are not impacted by the commitment to allow free transfers of funds by investors; and certain provisions from the CPTPP, such as Prohibition of Performance Requirements included in the CPTPP. Notably, the UK is the third largest source of foreign direct investment in Australia, with foreign direct investment valued at $123 billion in 2020. The UK is likewise the second largest recipient of Australian foreign direct investment. Despite the agreement’s wide-ranging investment provisions, the UK-Australia trade deal will not include any investor-State arbitration provisions. As such, the UK-Australia trade deal will not allow Australian or British investors directly to commence investor-State arbitrations against the UK or Australia respectively. UK-New Zealand trade deal On 20 October 2021, the UK and New Zealand also published an Agreement in Principle, setting out broad terms of their deal. It followed the launch of negotiations in June 2020 and, as expected, closely resembles the UK-Australia trade deal in multiple key respects. The deal will include, for instance: significant tariff liberalisation; Most Favoured Nation provisions and protection for UK and New Zealander investors, including from unfair and discriminatory treatment and expropriation of assets without due compensation. As with the UK-Australia trade deal, the UK and New Zealand have agreed not to include any investor-State arbitration provisions. Indeed, they have gone even further to agree prospectively that, if and when the UK accedes to the CPTPP, the investor-State arbitration provisions in the CPTPP also will not apply between the UK and New Zealand. The New Zealand government aims to conclude the UK-New Zealand free trade agreement by the end of 2021, although the UK has not yet shared any timing expectations. UK membership in the CPTPP On 28 September 2021, the UK attended its first meeting with the 11 members of the CPTPP to negotiate the UK’s potential accession. This followed the UK’s formal application to join the CPTPP on 1 February 2021. The CPTPP is a £9 trillion free trade area of 11 States: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. In broad terms, it removes 95% of tariffs between its members. The UK has expressed its hope that CPTPP membership will help secure exports to CPTPP members’ growing markets, which are home to some 500 million people and include some of the world’s biggest current and future economies. Even if approved, the UK is unlikely to achieve accession to the CPTPP before 2022 at the earliest. In addition to the UK, n 16 September 2021, China also officially applied to join the CPTPP. Under the CPTPP’s investment terms, States that are party to the CPTPP undertake to treat each other’s investors and their investments in accordance with a number of substantive treatment standards. These include the fair and equitable treatment standard and the prohibition on expropriation without compensation. The CPTPP also contains provisions on investor-State arbitration. In the event of an investment dispute, those provisions allow qualifying investors from one CPTPP State party to commence an investor-State arbitration directly against the other CPTPP State party, in which their investment is located. Comment The negotiation and signing of new trade agreements by the UK was an anticipated consequence of Brexit. Their impact on foreign investment will depend on the final terms of the deals, but is likely to include a number of significant benefits to the relevant States and their investors. Under both the UK-Australian trade deal and the UK-New Zealand trade deal, based on the Agreements in Principle, provisions on the protection of investments will be included, even though access to investor-State arbitration will not be part of the treaties. Pending the UK’s possible entry into the CPTPP (and beyond, in the case of New Zealand), certain investors in the UK and other CPTPP member States may wish to consider, on a proactive basis, the optimal structuring of their investments to protect against possible adverse measures. States are also well-advised to consider the protection of investors under international law regardless of whether investor-State arbitration appears immediately available. World leaders call for an international treaty to respond to future pandemics On 30 March 2021, the leaders of 25 States, the European Union and the World Health Organization published an article endorsing the idea of a treaty to coordinate international responses to pandemics. This proposal will be considered at a special session of the World Health Assembly in November. Since the early days of the COVID-19 pandemic, Volterra Fietta has been proud to provide thought leadership in support of the creation of an effective multilateral treaty to facilitate effective global responses to future pandemics (see here, here and here). The World Health Organization’s International Health Regulations (the “IHRs”) are not designed to ensure the kind of legally binding global cooperation and coordination required to control and confront global pandemics. The IHRs have failed to prevent States from: (i) withholding vital information; (ii) sealing off their borders; and (iii) engaging in uncooperative actions in relation to vaccines and other medical supply. Whilst the IHRs discourage that type of behaviour, its provisions are not actually enforceable. For example, a number of its provisions are not mandatory, and others are so broadly phrased that they effectively allow States to interpret them at will. What is more, the IHRs lack mechanisms to ensure compliance. In April 2020, Volterra Fietta proposed the creation of an effective treaty on pandemic suppression so as to redress those deficiencies. The Convention on Pandemic Suppression first envisaged by the firm would contain clear, mandatory and enforceable standards for global cooperation in pandemic suppression. It would reference science-based standards and interpretations. Its implementation would involve binding third-party monitoring. And it would provide for binding mechanisms to settle disputes and ensure enforcement of its provisions. Public international law has the tools required to fashion such an instrument, as long as there is sufficient political will on the part of governments. Perhaps the time has come. In a closely watched decision, the CJEU rules that cutting-edge hybrid satellite and terrestrial systems can be authorised under EU regulations pursuant to an overarching requirement not to hold back technological progress On 15 April 2021, the Court of Justice of the European Union (“CJEU”) handed down its highly anticipated decision in Eutelsat SA v. Autorité de régulation des communications électroniques et des postes (“ARCEP”) and Inmarsat Ventures SE (“Inmarsat”). In what was the main thrust of the decision, the CJEU ruled that telecommunication regulations should not be read in a way that “hold[s] back innovation and technological progress”. The CJEU therefore found that, under relevant European Union (“EU”) regulations, a hybrid terrestrial-satellite system does not have to be principally based on the satellite component of that system, as long as it does not distort competition. In particular, the CJEU clarified how and when complementary ground components (“CGCs”) can be used for the operation of a hybrid terrestrial-satellite system. CGCs are terrestrial components of an overall hybrid satellite-terrestrial communications system that are designed, primarily, to overcome the interference that can occur with signals from a satellite by blocking objects like mountains and buildings. The use of CGCs to buttress satellite-based communications is of particular importance. CGCs represent technology that can make satellite-based data transmission more viable, especially in profitable urban areas. At the same time, CGCs can be controversial because they can cause competition with incumbent terrestrial operators and others. The decision is instructive for States and regulators around the world considering similar applications for hybrid terrestrial-satellite communication systems. It is also relevant for those litigations and other disputes where issues of hybrid satellite communications systems can arise. Background Inmarsat, a UK domiciled company, developed a system called the European Aviation Network to provide in-flight connection services to planes flying over the EU. On 22 February 2018, ARCEP authorised Inmarsat to operate CGCs within the framework of the European Aviation Network. The decision of the French Regulatory Authority (ARCEP) followed a European Commission (“EC”) decision (Decision 2009/449/EC) selecting Inmarsat as one of the operators of mobile satellite systems authorised to use 2 GHz frequency band (the so-called S-band). Eutelsat, a European satellite operator based in France and a competitor of Inmarsat, brought an action before the Conseil d’État (French Council of State) seeking annulment of the ARCEP decision. Eutelsat claimed that the system put in place by Inmarsat, particularly its ground component, was not consistent with the 30 June 2008 decision of the European Parliament (Decision 626/2008/EC) setting out the criteria for the selection and authorisation of systems providing mobile satellite services (“MSS decision”). The Conseil d’État asked the CJEU to determine, by way of preliminary ruling: (a) whether a mobile satellite system needs to be principally based on a satellite component and whether CGCs may be installed to cover the entire EU territory; (b) the legal criteria that are to be used in identifying a mobile earth station; and (c) whether the competent authorities of the Member State are entitled to refuse authorisation to operate CGCs if the selected operator has not complied with the commitments as to geographical coverage of mobile satellite systems within the time limit provided in the MSS decision. The CJEU’s ruling The CJEU significantly ruled that “that the principle of technological neutrality. . . requires that the interpretation of the provisions at issue does not hold back innovation and technological progress.” The CJEU also made the following significant rulings: First, that, under relevant EU regulations, a mobile satellite system does not have to be principally based on the satellite component of the system, at least in terms of the capacity to transmit data. Second, that, nonetheless, the satellite component needs to have a “real and specific usefulness” for the functioning of the system as a whole. Third, that there is no upper limit on the number of CGCs that can be used in a hybrid system, at least under relevant EU regulations. Fourth, that a “mobile earth station”, as defined in the EU regulations, does not have to be able to communicate with the satellite without the use of separate equipment. Finally, the Court determined that, in the event an operator has failed to provide mobile satellite services by the deadline set in the MSS decision, the competent authorities of Member States are not entitled to refuse to grant the authorisations necessary for the provision of CGCs of mobile satellite systems to that operator on the ground that that operator has failed to honour the commitment given in its application. As such, the CJEU rejected Eutelsat’s challenge against ARCEP’s authorisation. Effect of the CJEU’s ruling Applications to develop CGC-based hybrid systems are now a common element of many private space operator’s business plans. They have also been at issue in various litigations and arbitrations (for instance, in paragraph 386 of the decision of quantum of the tribunal in CC/Devas v. India, which discusses potential hybrid uses for S-band spectrum in India in the context of that dispute). The CJEU’s decision confirms that an imperative of EU law in this space is to permit technological progress, albeit without affecting competition and in line with EU regulations. For more information on this client alert, please contact Gunjan Sharma (gunjan.sharma@volterrafietta.com) or Robert G. Volterra (robert.volterra@volterrafietta.com). International Energy Agency calls for a ban on all new oil and gas projects and sets other radical new targets in its “Net Zero by 2050” report On 18 May 2021, the International Energy Agency (“IEA”) set out far-reaching proposals as part of “Net Zero by 2050”, its roadmap for decarbonising the energy sector. The most controversial proposal will likely be a complete halt by 2021 to all new oil and gas projects and coal mines beyond those already committed. The IEA also called for an end to the opening of new coal-fired power stations after 2021, no new sales of fossil fuel boilers after 2025, an end to the sale of internal combustion engine cars after 2035 and massive investment in renewable energy. The report marks a radical change in approach for the IEA, which has historically been aligned with hydrocarbon-consuming economies and has advocated new fossil fuel projects to support the development of emerging economies. The IEA’s new report embraces the aim of achieving carbon neutrality by 2050. The IEA calls for a virtually immediate halt to all new coal mines, coal mine extensions, new oil and gas field exploration and new unabated coal plants The IEA’s most far-reaching proposal is to end, after 2021, all new coal mines, coal mine extensions, new oil and gas field exploration and new unabated coal plants beyond those already committed. The IEA has also called for no new sales of fossil fuel boilers after 2025. Assuming its proposals are adopted, the IEA estimates that by 2050 oil consumption could fall by 75% and coal consumption by 90% compared to current levels. Wind and solar power could provide 70% of the world’s electricity, compared to just 10% today. According to the IEA, solar energy could become the world’s leading source of energy production by 2050. Speaking on 18 May 2021, Fatih Birol, the IEA’s Executive Director, noted that the road to carbon neutrality in 2050 is “narrow” but still “achievable”. The IEA anticipates that, although the adoption of its recommendations would result in a decline in oil production, the share of oil production controlled by OPEC would increase, from 37% today to 52% in 2050. The IEA also calls for investment in renewable energy and innovation and an end to new internal combustion engine car sales The IEA notes that massive investments are needed for existing solutions such as the electrification of the automobile sector and the deployment of renewable energies, as well as to accelerate innovations in technologies that are in the prototype phase today. This is the case, for example, with CO2 capture systems or green hydrogen electrolysers. The IEA’s “Net Zero by 2050” report proposes 400 milestones, which it sees as crucial if the goal of net zero emissions by 2050 is to be met. Among them, by 2040, 60% of the stock of cars on the road worldwide will have to be electric, compared to 1% today. As to renewable energy, by 2030, the report recommends the deployment of four times more solar and wind capacity than in 2020. By 2030, all new buildings are to be zero-carbon ready and by 2050, 50% of existing buildings are to be retrofitted to zero-carbon ready levels. In the IEA’s ideal scenario, in 2050, renewables would produce 90% of the world’s electricity, as compared to 29% in 2020. According to the agency’s projections, the current rate of investment in the energy sector of $2 trillion per year will have to be increased to nearly $5 trillion per year by 2030. This would add 0.4 percentage points of growth per year to global GDP, says the IEA in an analysis conducted with the IMF. In addition, it would create tens of millions of jobs. The IEA’s recommendations, if implemented, may give rise to calls for compensation by existing energy industry participants The IEA’s report is not formally binding even on its 30 member States, which include Australia, Canada, France, Germany, the United Kingdom and the United States. It a fortiori does not bind non-member States. If implemented by its member States or others, the IEA’s roadmap would promote investment opportunities in the renewable energy sector. At the same time, the IEA’s call to suspend new oil and gas projects, new coal mines and coal mine extensions could, if implemented, have severe ramifications for investors already engaged in exploration and pre-approval activities. To the extent that such policy changes renege on existing commitments to investors or on their legitimate expectations, they might constitute violations by States of their public international law obligations under international investment treaties. Foreign investors that consider that such violations have occurred will in certain circumstances be entitled to seek compensation from the responsible State through international investment arbitration. Given the fast-moving and highly politicised nature of energy regulation, investors in both traditional and renewable energies should ensure that they are familiar with the public international law protections available to them. Government policymakers should equally pay close attention to the past, present and future commitments that they make, expressly or by implication, to energy investors. For further information about these developments, please contact Graham Coop (Graham.Coop@volterrafietta.com) or Gunjan Sharma (Gunjan.Sharma@volterrafietta.com). Netherlands launches litigation in German Court to preclude investor-State arbitrations On 17 May 2021, the Dutch Government announced that it has initiated proceedings before a German Court to determine whether the ICSID claims bought by RWE and Uniper are inadmissible in light of the judgment in Slovak Republic v Achmea BV (“Achmea”). The outcome of the court proceedings initiated by the Dutch Government could be of significance to other investors in the energy sector who are or will be facing similar threats to their investments in light of States’ renewed and vigorous pro-environmental policies. Background In December 2019, the Netherlands adopted legislation seeking to phase out the use of coal in the production of electricity by 2030. This was in line with the Dutch Government’s commitment to reduce greenhouse gas emissions by 49%, compared to 1990 levels, by 2030. The relevance of such measures was further emphasised in a decision of the Dutch Supreme Court in 2019 which recognised climate change as a human rights issue. RWE and Uniper, two German energy companies operating coal-fired power plants in the Netherlands, lodged ICSID arbitration claims challenging the coal ban and invoking their rights under the ECT. According to RWE and Uniper, the impugned law failed to provide adequate compensation for their stranded investments in coal-fired production facilities. In response, the Netherlands initiated anti-arbitration proceedings in a German court against RWE and Uniper (“German proceedings”) claiming that the investor-State dispute settlement (“ISDS”) provisions in the Energy Charter Treaty (“ECT”), with respect to intra-EU investment disputes, are not compatible with EU law. The Achmea decision On 6 March 2018, the Court of Justice of the European Union (“CJEU”) ruled in the Achmea case that the ISDS provisions in treaties between EU member States are incompatible with EU law and hence precluded by Articles 267 and 344 of the Treaty on the Functioning of the European Union. The applicability of this ruling to the provisions of the ECT has been a bone of contention ever since. In December 2020, Belgium sought legal clarification from the CJEU on whether the ISDS mechanism of the draft modernised ECT is compliant with the Achmea judgment. Legal basis for the German proceedings The Dutch Government appears to have taken advantage of a unique provision under German law, which empowers domestic courts to determine whether or not arbitral proceedings are admissible, prior to the constitution of an arbitral tribunal. The Dutch Government is also relying on a recent judgment by the Higher Regional Court of Frankfurt which held that the Achmea decision is transferable to other intra-EU-BITs (“Croatia case”). In that case, a UNCITRAL arbitration commenced against Croatia under the Croatia-Austria BIT was declared to be inadmissible on the ground that the arbitration clause in the relevant BIT violates EU law. Procedural and legal issues The question whether the German Court has jurisdiction to hear the Netherlands’ challenge is yet to be determined. Unlike the UNCITRAL regime, the ICSID system is insulated from the law of the place of arbitration, which has no relevance in determining the substantial and procedural law applicable to ICSID proceedings. Moreover, several investment tribunals have already ruled that the Achmea decision does not deprive them of their jurisdiction under intra-EU BITs. Although the Dutch Government is expecting a relatively quick ruling from the Court, the German proceedings could be delayed if an appeal is lodged or the question is referred to the CJEU for a preliminary ruling. Meanwhile, the ICSID arbitration could continue in parallel, requiring parties to participate in both proceedings simultaneously. Even if the German Court rules that it is competent to determine this issue, the possibility of parallel proceedings raises challenging questions regarding the impact of the Court’s decision on the ICSID arbitration proceedings and on any award that may be issued. Potential implications for intra-EU investor-State arbitration The outcome of the German proceedings, whatever it may be, is of significance to EU Member States and investors alike. Recently, States have come under increased pressure to accelerate their efforts to combat climate change and meet their targets under the Paris Agreement. On 18 May 2021, the International Energy Agency unveiled a roadmap for decarbonising the energy sector. This included a number of proposals, some of which have been described as radical. Similarly, in response to a decision of the Constitutional Court, the German Government has indicated a potential plan to achieve net zero emissions by 2045, five years earlier than initially planned. Such measures by States to implement climate change policies could adversely impact investments in the fossil fuel sector, triggering investor-State arbitration claims such as those by RWE and Uniper. For further information about these developments and other issues related to climate change litigation, please contact Graham Coop (Graham.Coop@volterrafietta.com) or Florentine Vos (Florentine.Vos@volterrafietta.com). Recent developments on climate change litigation Recent decisions issued by German, Dutch, Australian and Belgian courts regarding climate change have placed energy transition in the spotlight. The decisions demonstrate future developments in the area of climate change litigation, and in particular, an increase in the frequency of this type of case. Decision of the German Federal Constitutional Court In a decision dated 24 March 2021, the German Federal Constitutional Court held that the provisions of the Federal Climate Change Act of 12 December 2019 (the “Act”), which regulates Germany’s national climate targets and annual emissions up to 2030, do not provide for adequate specifications for emission reductions beyond 2031 and are therefore incompatible with fundamental rights. Decision of the Hague District Court Secondly, on 26 May 2021, the Hague District Court ruled, in a claim brought against Royal Dutch Shell PLC (“RDS”), that RDS is obliged to reduce its CO2 emissions by 45%, compared to 2019 levels, by end of 2030. This obligation extends to the whole energy portfolio of the Shell group and its combined volume of emissions. The claimants argued that RDS has the obligation, arising from the unwritten standard of care under Section 162 of the Dutch Civil Code (the “standard of care”), to participate in the prevention of climate change and reduce emissions attributable to the Shell group. In interpreting the standard of care, the court assessed and considered factors and principles such as RDS’s position in the determination of the Shell group’s general policy, the right to private and family life, as well as international soft law principles such as the United Nations Guiding Principles. Decision of the Federal Court of Australia Thirdly, in a decision issued on 27 May 2021, the Federal Court of Australia found that Australia’s Minister for the Environment owes a duty of care to Australian children to protect them from the effects of climate change. As with the German Federal Constitutional Court decision, this decision emphasised the consequences for future generations of failure to take action against climate change. Decision of the Brussels Court of First Instance More recently, the Brussels Court of First Instance found that the failure of the federal and regional governments to implement adequate climate change policies constituted a breach of their duties of care and human rights obligations under the European Convention on Human Rights. Commentary Campaigners in England have followed a similar course of action to those in Germany, Netherlands, Australia and Belgium, and recently submitted an application to the High Court for a judicial review of the government’s support of the Oil and Gas Authority’s strategy with respect to the North Sea. The launching of these proceedings demonstrates that the above decisions are not isolated cases. They illustrate the rise in legal activism related to climate change and energy transition. They also put stakeholders on notice that similar actions may be taken in other jurisdictions. Human rights law and principles of soft law embodied in environmental, social and corporate government guidelines, such as the UN Guiding Principles, have been a common thread in these decisions. Investors in the energy industry should ensure that they are familiar with this body of law and the role it plays in their activities. Equally, Governments will have to pay heed, in exercising their regulatory powers, to ensure that this is done consistently with both their international climate change commitments and their obligations to investors. For further information about these developments, please contact Graham Coop (Graham.Coop@volterrafietta.com). New investment law in Ukraine Background On 17 December 2020 the Ukrainian Parliament adopted the draft law No. 3760 On State Support for Investment Projects with Significant Investments in Ukraine (the “Law”), which entered into force on 13 February 2021.[1] The Law is part of a package of draft laws seeking to incentivise high-value foreign investment.[2] This investment promotion strategy is looking to secure around USD 7.7 billion in foreign investment starting this year.[3] The Law Investments qualifying for state support under the Law will be able to obtain benefits of up to 30% of the expected investment amount in relation to: (i) tax benefits and exemptions; (ii) land benefits in relation to state/public owned land; and (iii) from January 2022, construction expenses in relation to infrastructure necessary for implementation of an investment project.[4] In order to qualify for state support under the Law, investments are required to: (i) generate at least 80 new workplaces annually (with remuneration in excess of at least 15% of the average salary in the specific area); (ii) entail an investment of at least EUR 20 million; (iii) be implemented within a period of 5 years; and (iv) be established through a Ukrainian special purpose vehicle.[5] Among the industry sectors that will benefit from the Law are the processing industry (with exception of tobacco and alcohol product manufacturing), extraction of mineral resources for processing and refining (excluding hard coal and brown coal, crude oil and natural gas) waste management and transportation.[6] Public-private partnerships, concessions, investment projects under product-sharing agreements and privatisations will not be covered by the Law.[7] Application for state support requires potential investors to enter into special investment contracts with the Cabinet of Ministers and the relevant municipal authorities by way of the respective Ukrainian special purpose vehicle (the “Special Investment Contract”). The Law determines that investors are entitled to a dedicated state authority to provide assistance throughout the project. This figure, dubbed the ‘investment nanny’, will assist potential investors in matters including the application for state support under the Law as well as investment project approval and the implementation pursuant to the agreed terms.[8] The Special Investment Contract, the term of which may not exceed 15 years, will set the form of state support and the terms for the project’s implementation.[9] Of special relevance to investors is the inclusion within Special Investment Contracts of dispute resolution and governing law provisions that will allow the contract to be governed by foreign law and be subject to international arbitration. Further guarantees being provided to investors include stabilisation clauses, that will allow the Special Investment Contract to be governed by Ukrainian laws in effect at the date the of execution (with exception of the application of latter laws that improve the investor’s position)[10], and reimbursement of investors’ losses (save for loss of profits) arising from the state’s failure to procure a stable business environment.[11] [1] See Ukraine Invest, The President of Ukraine signed the Law on State Support of Investment Projects with Significant Investments, 10 February 2021 [Last accessed 11 March 2021], available here. See Ukraine Inform, Zelensky signs law on state support for Ukrainian and foreign investors, 11 February 2021 [Last accessed 11 March 2021], available here. [2] See Ukraine Invest, Package of draft laws on promoting the attraction of invesments via privatization is registered in the Verkhovna Rada [Last accessed 10 March 2021], available here. [3] See Bloomberg, Ukraine Eyes Investments as Virus Shakes Up Supply Chains, 5 February 2021 [Last accessed 10 March 2021], available here. [4] See Verkhovna Rada of Ukraine, Adopted the Law of Ukraine “On State Support for Investment Projects with Significant Investments”, 17 December 2020 [Last accessed 11 March 2021], available here (Google translation). See Lexology, Ukraine to support significant investment projects, 1 March 2021 [Last accessed 11 March 2021], available here. [5] See Lexology, Ukraine to support significant investment projects, 1 March 2021 [Last accessed 11 March 2021], available here. [6] See Verkhovna Rada of Ukraine, Adopted the Law of Ukraine “On State Support for Investment Projects with Significant Investments”, 17 December 2020 [Last accessed 11 March 2021], available here (Google translation). See Lexology, Ukraine to support significant investment projects, 1 March 2021 [Last accessed 11 March 2021], available here. [7] See Mondaq, “Investment Nanny” Law Adopted By Ukraine’s Parliament, 5 January 2021 [Last accessed 11 March 2021], available here. [8] See Forbes, Ukraine Announced It Will Have ‘Nannies’ For Foreign Investors. How Will They Work, 28 January 2020 [ Last accessed 10 March], available here. See Verkhovna Rada of Ukraine, Adopted the Law of Ukraine “On State Support for Investment Projects with Significant Investments”, 17 December 2020 [Last accessed 11 March 2021], available here. [9] See Verkhovna Rada of Ukraine, Adopted the Law of Ukraine “On State Support for Investment Projects with Significant Investments”, 17 December 2020 [Last accessed 11 March 2021], available here (Google translation). See Lexology, Ukraine to support significant investment projects, 1 March 2021 [Last accessed 11 March 2021], available here. [10] See BlackIron, Black Iron Welcomes Ukraine’s New Investment Law, 11 February 2021 [Last accessed 10 March 2021], available here. [11] See Mondaq, “Investment Nanny” Law Adopted By Ukraine’s Parliament, 5 January 2021 [Last accessed 11 March 2021], available here. See Verkhovna Rada of Ukraine, Adopted the Law of Ukraine “On State Support for Investment Projects with Significant Investments”, 17 December 2020 [Last accessed 11 March 2021], available here (Google translation). African Continental Free Trade Area: A new hope for continental integration On 21 March 2018, the Agreement Establishing the African Continental Free Trade Area (the “Agreement”) was signed by 44 of the 55 member States of the African Union (the “AU”) at its 10th Extraordinary Summit, thereby creating a pan-African trade bloc. After ratification by 22 countries, the Agreement entered into force on 30 May 2019. As of the time of publication of this newsletter, 54 States had signed the Agreement and 36 of them had deposited their instruments of ratification. In line with a Decision and Declaration adopted by the AU on 5 December 2020, the trade in goods under the Agreement commenced on 1 January 2021. The formation of the African Continental Free Trade Area (the “AfCFTA”) is a monumental step in the economic integration of Africa as it aims to unite 1.3 billion people across 55 countries with a combined GDP valued at US$3.4 trillion. According to the World Bank, the Agreement has the potential to lift 30 million people out of extreme poverty by 2035. Background The idea of continental integration to improve Africa’s economic performance began soon after the independence of African States in the late 1950s and was evidenced by the formation of the Organisation of African Unity (the “OAU”) in 1963. The main objectives of the OAU were to promote unity and solidarity amongst African States and to intensify their cooperation to achieve a better life for the people of Africa. The journey towards integration thereafter included the Monrovia Declaration of 1979, followed by the Lagos Plan of Action in 1980, and the Abuja Treaty in 1991 which set out a roadmap to create an African Economic Community (the “ACM”) by 2028 using the Regional Economic Communities (the “RECs”) as building blocks. In 2002, the OAU was replaced by the AU with a vision to “accelerate the political and socio‑economic integration of the continent”. However, even after two decades of the creation of RECs, intra-Africa trade remained markedly low. Statistics by International Monetary Fund show that in 2017, intraregional trade in Africa was only around 17% of its total trade compared to the intraregional trade levels of over 50% in Asia and Europe. It was against this backdrop that the AU at its 2012 summit decided to fast track the formation of an intra-continental free trade area by 2017. The negotiations for AfCFTA began in 2015 and in the same year, the AU adopted Agenda 2063, a continental 50-year agenda for Africa’s long term socio-economic and integrative transformation. AfCFTA has since been transformed from a mere vision to an executed agreement amongst 54 African States in less than 6 years, thus consolidating the dream of an integrated Africa “driven by its own citizens and representing a dynamic force in the international arena”. Overview of the Agreement The Agreement establishes a framework for implementation and administration of the AfCFTA and the related protocols. The protocols are negotiated in phases. Phase I of the negotiations resulted in the protocols relating to trade in goods, trade in services, and dispute settlement. Phase II negotiations will cover investment, competition, and intellectual property rights, whereas Phase III will focus on e-commerce. The negotiations are set to conclude by 31 December 2021 and the outcome thereof will be constituted as protocols on the relevant topics. The institutional framework for AfCFTA comprises of: (i) the Assembly of Heads of State and Government of AU for providing oversight and strategic guidance, (ii) a Council of Ministers for ensuring implementation of the Agreement, (iii) a Committee of Senior Trade Officials to implement the decisions of the Council of Ministers, and (iv) the Secretariat. Such a comprehensive institutional framework aims to serve as the foundation for the proper administration and facilitation of AfCFTA. The Agreement reinforces that State Parties that are members of other RECs and have attained higher levels of regional integration shall be entitled to maintain such relationships. Thus, AfCFTA is intended to function along with the RECs by treating them as building blocks for economic integration. By reinforcing the principles of non-discrimination and market access, AfCFTA aims to extend similar protection to those States which are not members of the World Trade Organisation (“WTO”). The Agreement also prioritises sustainable and inclusive socio-economic development, gender equality, food security and structural transformation of the State Parties. This is line with Agenda 2063 and provides the connecting link for economic growth with sustainable development. Another significant feature of the Agreement is the provision for review every 5 years to ensure effectiveness and achieve deeper integration. This would provide AfCFTA with the flexibility to adapt to evolving regional and international developments and respond to new challenges. Dispute resolution mechanism The Agreement establishes a Dispute Settlement Mechanism (“DSM”) to be administered in accordance with the Protocol on Rules and Procedures on the Settlement of Disputes (the “Protocol”) and which is largely modelled on the Dispute Settlement Understanding of the WTO. Provisions of the Protocol apply only to disputes arising between States in relation to their rights and obligations under the Agreement and to that end, the Protocol creates a Dispute Settlement Body (the “DSB”). The DSB in turn has the authority to establish Dispute Settlement Panels (a “Panel”) and an Appellate Body, to adopt their reports, survey the implementation of their rulings, and to authorise the suspension of concessions and other obligations under the Agreement. The Protocol provides for consultations as the first step towards dispute resolution. State Parties to a dispute also have the flexibility to voluntarily undertake good offices, conciliation or mediation at any time, in a confidential manner and without prejudice to their rights in other proceedings. This encourages States to explore ways to amicably resolve their disputes before invoking the formal DSM procedure. In the alternative, States may also invoke arbitration as the first avenue for dispute settlement, in which case they are not permitted to simultaneously refer the dispute to the DSB. Where consultations are unsuccessful, the matter may be referred to the DSB seeking establishment of a Panel to set in motion the process for formal resolution of the dispute. A third-party State with substantial interest in the dispute can also participate in the proceedings. The report containing the majority view of the Panel is brought for consideration before the DSB. DSB then considers the report and decides whether to adopt it or not. A party to the dispute may also notify the DSB of its intention to appeal the report to the Appellate Body. However, appeals are only limited to issues of law and legal interpretations of the Panel. As a remedial measure, a State that is found to have violated the Agreement is required to bring its measures in conformity with the AfCFTA. The aggrieved party is entitled to compensation and suspension of concessions and other obligations as temporary measures if the ruling of DSB is not implemented within a reasonable period of time. The future of Investor-State Dispute Settlement (“ISDS”) under the Agreement is presently unclear. Only when the Phase II negotiations are complete will we know whether the investment Protocol provides for an ISDS mechanism. However, it is worth noting that the recent trend of African States has been to exclude investor-State arbitrations or impose restrictions on them in the regional agreements and Bilateral Investment Treaties (“BITs”). This could potentially be reflected in the approach adopted by AU towards settling investment claims. Potential impact of AfCFTA AfCFTA indicates a new era in the vision for integration of the African markets. The Agreement is expected to create a single liberalised market for trade in both goods and services. This would result in enhanced economic cooperation and intra-regional trade amongst African countries, thereby creating more jobs, stimulating investment, and improving competitiveness in the continent. Starting from 1 January 2021, tariffs on 90% of the goods traded between AfCFTA State Parties are to be reduced in annual instalments until they are eliminated within 5 years (10 years for least developed countries). Similarly, the Agreement also provides for elimination of non-tariff barriers and cooperation on implementation of trade facilitation measures. As per the World Bank, proper execution of the Agreement could boost Africa’s income by US$450 billion, lower gender wage gap, raise the income of 68 million people wo live in moderate poverty and increase Africa’s export by $560 billion by 2035. The AfCFTA could also prove to be crucial in a world plagued by the COVID-19 pandemic. Like most regions around the world, the pandemic has taken a heavy toll on African economies by pushing the region to its first recession in 25 years. Trade in critical supplies such as food and medical supplies has also been affected. With its plans of regional integration and streamlining of border procedures, AfCFTA could be Africa’s economic recovery plan to achieve accelerated economic progress and boost mutual self-sufficiency through long-term reforms. As trading under AfCFTA commences in January 2021, the President of South Africa and Chairperson of the AU, Cyril Ramaphosa, is hopeful that “it will unleash regional value chains that will facilitate Africa’s meaningful integration into the global economy and improve the prospects of Africa as an attractive investment destination.” Conclusion The AfCFTA is the dawn of a new era of intra-regional trade that aims to benefit all member States through expansion of the market and by overturning outdated trade models. However, implementation of the Agreement could prove to be an uphill task and will require the determined effort of all participating States. This in turn calls for appropriate legislations and policies that provide reliable and transparent rules for proper functioning of the market. But, if successfully implemented, the AfCFTA could be instrumental in propelling Africa forward as a leader on international trade platforms. Biden administration puts global warming at center of agenda as nations prepare for COP26 On February 19, 2021 the Munich Security Conference (“MSC”), world’s leading forum for debating international security policy, organized a special edition event assembling world decision-makers such as Joe Biden, Angela Merkel, Emmanuel Macron and Boris Johnson to discuss transatlantic cooperation. Traditionally held in February, the MSC had to postpone its yearly held conference due to the ongoing pandemic. The special edition aimed at providing senior leaders with a globally visible platform to discuss how to “rebuild and renew the transatlantic and international cooperation” and “continue vital debates” at the very time and place the MSC 2021 would have normally kicked-off. Divided in four sections, the event dedicated a spotlight to tackling the Climate crisis in which John Kerry, climate envoy to the United States, warned that the world’s “best” and “last” hope to get back on track to limit global warming to 1.5C is the upcoming November United Nations climate summit to take place in Glasgow (“COP26”). The climate envoy asked leaders to put in place policies aimed at “averting the worst consequences of global warming” asserting that “there is no faking it in this moment” and affirming that none of the world’s major signatories to the Paris climate agreement had been doing enough. In its December 2020 Emissions Gap Report, the United Nations Environment Program concluded that Since December 12, 2015, global greenhouse gas emissions had continued to climb by 1.3% per year on average. 2019 breaking records with 52.4 billion tons of CO2 emitted by human activity, almost 60 billion tons if the emissions due to the cultivation of land formerly in natural areas are included. President Biden’s Administration on Climate Change John Kerry’s announcement tallies with the United States’ formal re-entry to the Paris Accord on February 20, 2020 and follow through on President Biden’s promise to take “aggressive action to tackle climate change”. United states had officially withdrawn from the accord in 2019 after former President Donald Trump had begun the process in 2017. This withdrawal from the agreement by the United states, world’s second-largest emitter of CO2 according to the World Bank, had been received negatively by Governments around the world. Hours after being sworn in, President Biden moved to reinstate the United States to the Paris agreement, signing two executive orders and a Memorandum addressing climate change policy and scientific integrity on January 27, 2021 (“Climate Day”). The two Executive Orders and Memorandum included a moratorium on new oil and gas lease permits on federal lands and waters and announced an intent to join domestic action with international action so as to increase global action on climate change. The Orders reaffirm the United States’ attentiveness to address climate change “both bilaterally and unilaterally” and addresses climate change measures at the domestic level. The Government expects to but in place both a “government-wide approach” and a strategy centralized with the White House Office of Domestic Climate Policy, tasked with overseeing all “domestic climate-policy decisions and programs”. The future? With the United states return to the Paris accord, Washington will release a new emissions cut pledge ahead of the November COP26 convened by Biden with other major emitting countries. This new goal should be “at least” a 50% reduction in greenhouse gases by 2030, from 2005 levels according to Laurence Tubiana, France’s climate change ambassador and key architect of the Paris agreement. In comparison, the Obama administration had aimed at cutting emissions by at least 26% by 2023 relative to the 2005 levels. UK Supreme Court issues new decision on parent company liability in Okpabi and others v. Royal Dutch Shell Plc and another Significant developments continue in the field of human rights and environmental litigation in the UK. On 12 February 2021, the Supreme Court issued its unanimous judgment in Okpabi and others v. Royal Dutch Shell Plc and another [2021] UKSC 3, declaring that a claim brought by over 40,000 residents of two communities in the Niger Delta against two Shell group companies over alleged oil spills could proceed to the merits stage. The case concerns claims against the UK parent of the Shell group, Royal Dutch Shell Plc (“RDS”) and its Nigerian subsidiary, the Shell Petroleum Development Company of Nigeria Ltd (“SPDC”). The claimants sought compensation for oil spills that allegedly occurred from oil pipelines and associated infrastructure operated by SPDC in the vicinity of their communities. In a high-profile decision, the Supreme Court reversed the Court of Appeal’s judgment and accepted that English courts had jurisdiction over the case, as the claim was arguable enough to proceed to a full trial. The Supreme Court held that the majority of the Court of Appeal had erred in conducting a “mini-trial”, as this was inappropriate at the interlocutory stage. Instead, the Court of Appeal should have accepted assertions made by the claimants as arguable, unless they were demonstrably untrue or unsupportable. The Supreme Court also examined and applied principles concerning parent liability as set out by its previous judgment in Lungowe v. Vedanta Resources Plc [2019] UKSC 20. It found that the Court of Appeal had been wrong to state that the promulgation of group-wide policies could never give rise to a duty of care. In addition, the Court of Appeal had focused inappropriately on the issue of control to determine liability of the parent company. Instead, the relevant question was the extent to which a parent company was involved in the de facto management of the material activity. Finally, following its reasoning in Vedanta, the Supreme Court found that liability of a parent company in relation to the activities of its subsidiaries was not a distinct category of common law negligence and that the Court of Appeal had been wrong to consider the parent company’s duty of care by reference to the threefold test in Caparo Industries plc v. Dickman [1990] 2 AC 605. The Okpabi decision, together with the judgment in Vedanta, provides guidance on the circumstances in which a parent company may be held liable for acts or omissions of its foreign subsidiary. The judgment highlights again that multinational companies need to assess the human rights and environmental risks associated with their subsidiaries’ overseas operations carefully. It is probably no longer premature to say that, given the Business and Human Rights issues being decided in the English and a number of other courts, it will be increasingly considered reckless and not diligent behaviour for enterprises with overseas operations to ignore these developments and not seek advice from suitably experienced lawyers as to how to manage their operations so as to limit their exposure to such claims. This includes active engagement with local laws and international guidelines, adequate due diligence and other procedures and mechanisms throughout their corporate structure to monitor compliance, establish Business and Human Rights audits, conduct investigations and address grievances. Jus Mundi – Arbitration Team of the Month Volterra Fietta was recognised by Jus Mundi as the Arbitration Team of the Month for its track record of victories in public international law disputes. Jus Mundi’s recognition includes an overview of Volterra Fietta and an interview with partner Robert Volterra and counsel Álvaro Nistal on the firm’s recent victory in Interocean Oil Development Company and Interocean Oil Exploration Company v. Federal Republic of Nigeria (ICSID Case No. ARB/13/20), as well as on other topical issues concerning investor-State arbitration. Brill Publishers Robert Volterra published an article with Brill, in which he reviews “The Syrian Conflict’s Impact on International Law” by Michael P. Scharf, Milena Sterio and Paul R. Williams. Robert’s article is titled “Book Review” and can be found here. The House Robert Volterra contributed an article to The House, the in-house publication of the House of Commons, on the practicalities of signing a trade deal. The article, titled “Negotiating trade deals doesn’t have to take this long”, can be found here. Global Arbitration Review Volterra Fietta Partner Robert Volterra and Counsel Álvaro Nistal have published an article on GAR concerning the ground-breaking ICSID award recently issued in Interocean v. Nigeria, which addresses legal issues that are highly relevant to numerous other investor-State disputes. The article, which can be found here, provides useful guidance on the public international law norms applicable to State liability arising from actions of State entities and domestic courts. Petroleum Review This article first appeared in Petroleum Review, September 2020, published by the Energy Institute. Read the article here. Informa Connect Law – CompLaw Blog Robert Volterra and Graham Coop have contributed an article titled “Increased control of foreign investment in response to COVID-19” which can be found here. The Financial Times The Financial Times has published a podcast interview in which Robert Volterra, Partner at Volterra Fietta, discusses how governments and investors should be careful to manage disputes arising from COVID-19 regulation, so as to avoid a wave of investment treaty arbitrations. You can listen to the podcast here. Law360 Partner Graham Coop and Counsel Álvaro Nistal were recently cited in an article titled “COVID-19 Claims May Test Tribunals With Thorny Questions”. The article, published on 30 April 2020 by Law360, can be found here. Commercial Dispute Resolution Partner Graham Coop and Associate Maria Fogdestam-Agius published an article with Commercial Dispute Resolution, titled “Who’s at fault with the cobalt?”. To read about the repercussions of class actions against corporate end users for supply chain working conditions in the mining industry click here. Investor-State Arbitration – Protecting Investments Before It Is Too Late Read article here Volterra Fietta Partner Graham Coop cited in InterFax article Graham Coop was recently cited in an article published on 26 April 2019 by the on-line publication InterFax. The article, titled “All eyes on the ECT as Nord Stream 2 lawsuit looms” is available to read here. Austrian Yearbook on International Arbitration Graham Coop and Gunjan Sharma co-authored an article in the Austrian Yearbook on International Arbitration. The article, titled “Procedural Innovations to ISDS in Recent Trade and Investment Treaties: A Comparison of the USMCA and CETA” is available to read here Egypt Oil & Gas Newspaper Graham Coop was quoted in an article in the Egypt Oil & Gas Newspaper titled “Politics, economics, and energy security: How pipeline negotiations play a key role”. Graham’s comments focused on the political connotations of pipeline negotiations, the shifting power dynamics between pipeline planning and construction and the challenges of taking all parties’ economic interests into account over a long period. The article can be viewed here. Oxford University Press Graham Coop co-authored a chapter on “ECT and States’ Right to Regulate” in “International Arbitration in the Energy Sector” edited by Maxi Scherer and recently published by Oxford University Press. For further details on this text, click here. Indian Journal of Arbitration Law Robert Volterra co-authored an article in the Indian Journal of Arbitration Law. The article, titled “India and Brazil: Recent Steps Towards Host State Control in the Investment Treaty Dispute Resolution Paradigm”, is available here. Hart Publishing Robert Volterra authored a chapter on “The Effect of Brexit on the UK’s Trade with Non-EU Member States Under the EU’s Mixed Free Trade Agreements” in “Negotiating Brexit” by John Armour and Horst Eidenmüller and recently published by Hart Publishing. Robert’s chapter explores the status of the parties of mixed EU FTAs, and the scope of application of mixed EU FTAs after Brexit. More information about the book is available here. The Financial Times Robert Volterra was quoted in an article in The Financial Times titled “US oil groups feel Russia sanctions freeze more than Europeans”. Robert’s comments focused on sanctions against Russia, and the divergence in approach between EU and US companies. The article can be accessed here. Oxford Business Law Blog Following Robert’s participation in the “Negotiating Brexit” conference at St Hugh’s College, University of Oxford on 17 March 2017, a summary of his comments has been published on the Oxford Business Law Blog. Robert’s contribution, available here, focuses on “The Impact of Brexit on the UK’s Trade with Non-EU Member States Under the EU’s Mixed Free Trade Agreements”. Oxford University Press Partner Graham Coop co-authored a chapter on “External Relations of EU Energy Regulation” in the Second edition of “Legal Aspects of EU Regulation” edited by Peter Cameron and recently published by Oxford University Press. For further details on this text, click here. Global Arbitration Review – Yukos Volterra Fietta partner Graham Coop was featured in the 2 November 2016 issue of GAR providing insights on the Dutch court judgment that set aside the US$50 billion awards in the Yukos case and its implication for investors in Russia and other states that have signed – but not ratified – the Energy Charter Treaty. The full article can be viewed here. Intercontinental Finance & Law Graham Coop wrote an article entitled “From Russia With Love?” covering recent developments in the long-running Yukos litigation and their potential impact on energy investments in Russia and elsewhere. To read the full article as published in Intercontinental Finance & Law, click here and scroll to page 16. VICE NEWS 23 May 2016. Robert Volterra was quoted on the international implications potentially faced by Kenya as it prepares to close the world’s largest refugee camp. Click here to view the full article. The Journal of World Investment & Trade – “The Investment Arbitration Practitioner” Robert Volterra, Giorgio Francesco Mandelli and Maria Fogdestam-Agius have co-authored a Review Article entitled “The Investment Arbitration Practitioner”, published in The Journal of World Investment & Trade (Volume 17, Issue 2). Additional information can be found here. The Leading Practitioners’ Guide to International Oil & Gas Arbitration August 2015. Graham Coop’s and Bernhard Maier’s co-authored chapter entitled “A Comparative Analysis of the ECT and BITs in Light of Evolving EU Policy” has been published in The Leading Practitioners’ Guide to International Oil & Gas Arbitration. The Guardian 7 July 2015. Robert Volterra was quoted in an article in The Guardian on the importance of foreign languages for legal professionals. Click here to view the article. The Law Society Gazette 11 May 2015. The article, in the official magazine of the English Law Society, is based on a recent interview with Robert. It discusses his role at Volterra Fietta — the world’s only dedicated public international law firm — in reducing global conflict through representing both States and private clients in major cross-border disputes around the globe. The article can be found here. Enforcement of Investment Treaty Arbitration Awards February 2015. Robert Volterra, Graham Coop and Álvaro Nistal published a chapter titled “Sovereign immunities and investor-state awards: specificities of enforcing awards based on investment treaties” in the global guide, Enforcement of Investment Treaty Arbitration Awards. Click here to view the article. ICSID Review 10 September 2014. Graham Coop’s Keynote Speech at the Conference on 20 Years of the Energy Charter Treaty was published as an article in the ICSID Review (Fall 2014). Click here for a link to the article. © Copyright Volterra Fietta info@volterrafietta.com Volterra Fietta is authorised and regulated by the Solicitors Regulation Authority (SRA Number 559849).