Regulatory Chill In Energy Sector: Balancing Investor Protection And State Sovereignty
- IJLLR Journal
- 32 minutes ago
- 1 min read
Pranav Teja Ravula, OP Jindal Global University
ABSTRACT
The accelerating global energy transition has increased tension between investor protection and State sovereignty within international investment law. As governments implement climate and decarbonization policies, the prospect of investor-State arbitration under investment treaties increasingly impacts regulatory behavior-a phenomenon termed regulatory chill. This paper examines how the doctrinal expansion of fair and equitable treatment and indirect expropriation standards, combined with the institutional fragmentation of investor-State dispute settlement, generates uncertainty that deters robust environmental regulation. Drawing upon leading cases such as Vattenfall v Germany, Charanne v Spain, and Rockhopper v Italy, the analysis shows that arbitral interpretations of stability and legitimate expectations can transform lawful climate regulation into compensable breaches, thus constraining States' ability to pursue energy transition policies.
