A Case Note on the ICSID Tribunal’s Decision in Hydro and Others v. Albania: Indirect Expropriation and Proportionality

Quintero Godinez, Rafael (2024) A Case Note on the ICSID Tribunal’s Decision in Hydro and Others v. Albania: Indirect Expropriation and Proportionality. Journal of International Arbitration, 41. pp. 225-250. ISSN 0255-8106

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Abstract

This case note delves into the complexities of balancing state regulatory authority and investor protections in the context of indirect expropriation, as exemplified in Hydro and Others v. Albania. The commentary scrutinizes the inherent structural bias of the Tribunal, which favoured the sole effects doctrine over the police powers doctrine, thereby slanting the scale towards investor interests. This focus often leaves states defending not just the merits of their regulations but also the extent to which these regulations impact the investor, shifting the tribunal’s attention from regulatory intent to merely quantifying investor detriment. Building on the notion of managerialism, the note argues that this bias makes it challenging for the Tribunal to shift away from its initial pro-investor stance. To restore balance, the commentary advocates for a framework guided by the police powers doctrine, enriched by the principle of proportionality. The note concludes by discussing the ramifications of continued bias, including the erosion of the regime’s legitimacy, evidenced by several countries, including Albania, reconsidering or severing their affiliations with the International Centre for Settlement of Investment Dispute (ICSID), thus signaling an urgent need for recalibration to preserve the legitimacy of the international arbitration regime.

Item Type:	Article
Identification Number:	10.54648/joia2024011
Dates:	Date Event 1 April 2024 Accepted 1 April 2024 Published Online
Uncontrolled Keywords:	Indirect Expropriation, Legitimacy Crisis in Investment Arbitration, Sole Effects Doctrine, Police Powers Doctrine, Structural Bias, Principle of Proportionality, Host State Sovereignty, Investor Protection, Balkans in International Investment Arbitration, Managerialism
Subjects:	CAH16 - law > CAH16-01 - law > CAH16-01-01 - law
Divisions:	Faculty of Business, Law and Social Sciences > College of Law, Social and Criminal Justice
Depositing User:	Gemma Tonks
Date Deposited:	05 Sep 2024 12:39
Last Modified:	05 Sep 2024 12:41
URI:	https://www.open-access.bcu.ac.uk/id/eprint/15795

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