Latest News

Integrating International Investment Arbitration With Sustainable Development


One of the main discussion points about the evolving situation is the coexistence or convergence of international arbitration and sustainable development.  Maintaining the justice system and conflict resolution mechanisms is one of the most important parts of the Integrating International Arbitration with Sustainable Development agenda. This section aligns with the 2030 Agenda for Sustainable Development's main theme, which is achieving the goals outlined under Goal 16: "Promoting just, peaceful, and inclusive societies."[1] Arbitration is the most widely used and inclusive institution in the world, and as such, it is one of the most effective and accepted mechanisms for settling disputes in a similar way to litigation. International investment arbitration serves to safeguard international investors' rights against local policies; sustainable development, on the other hand, aims to alleviate poverty and advance gender equality, among other things. Therefore, it's important to keep the two in balance to support social, economic, and environmental progress.[2]

Role of Corporate Social Responsibilities in Sustainable Development and Investor-State Disputes:

CSR is determined as the contributions done by the business towards sustainable development that are working with employees and the local communities, it is how the company beneficially does their business for society. CSR is one of the most pivotal elements for sustainable development, these social responsibilities are also regulated by laws such as laws under section 135 of the Companies Act 2013 through international laws such as OECD Guidelines for Multinational Enterprises, and UN Guiding Principles on Business and Human Rights.[3] The CRS provides various upliftments in terms of social and economic, but its main focus is on Economic Benefits, Society, and Earth. These days the CRS is taken up carefully by the investment law in terms of implicitly and explicitly, The former is used when there is no socially responsible adherence of the invertor, adopted mostly under the investment arbitration and the latter is for the CRS applications in the investment treaties. Thus, we can see that Corporate Social Responsibility is also aligning with the legal specifications and their non-adherence could create legal implications.[4]

Environmental Impact Assessment in Investment Arbitration

The EIA is done to know what will be the effect of the particular activity proposed and it further makes a comparison between the other alternative projects and to choose one with the best possible outcome concerning the benefit of environment and economy. The process of EIA starts with Screening followed by Scoping, Impact analysis, mitigation, Review of EIA, decision-making, and Post monitoring.[5] It looks at both the merits and demerits of the proposed project therefore the properly monitored EIA also reduces the conflicts. When these conflicts arise then one of the most accepting tools of mechanism is Investment Arbitration, it will aid in proactive mitigation leading to less harm to the ecosystem and society, Sustainable investment decisions, and compliance with internationally accepted standards such as transparency and fairness. There are various cases wherein the EIA has been the main central to arbitration proceedings such as the NAFTA case against Canada the EIA’s relevance was opposed by the Clayton family, the case of Methanex of USA, etc.,[6] With these applications there are sustainable development outcomes which promote the shared responsibility and further provides the compensation for the Environmental Harm.

Reforming Investor-State Dispute Settlement (ISDS) for Sustainability

The most commonly used dispute-resolving mechanism Arbitration can help settle disputes related to sustainable development in terms of economics, society, and finance as per the 2015 Paris Agreement. Therefore, the Arbitration system is highly aligned with sustainable investment by incorporating environmental, Social, and Governance (ESG). It has also been seen that there is a relevant conflicting part between the invertor's rights provided under the International Investment agreements and the sustainable development programs. Most of the time there the states are at a confusing point about whether to grant a security to the investor or keep a degree of policy autonomy for themselves.[7] This has resulted in various ISDS cases wherein tribunals have frequently found the host state accountable for such violations. However, they have contented a lot of time that to reap legitimate benefits for society at large, the address to this problem is necessary. Recently in the ISDS reform, this topic related to the regulatory space for the States was of intense discussion and focused upon, Nevertheless, the UNCITRAL Working Group is further focusing on reformating the Dispute Prevention and Mitigation sector.


[1] “Sustainable Development Goals.” UNDP, Accessed 5 Jan. 2024.

[2] Brodlija, Fahira, et al. “The Intersection of International Arbitration and Sustainable Development: Perspectives from Sarajevo.” Kluwer Arbitration Blog, 7 June 2022,

[3] “Corporate Social Responsibility Clauses in Investment Treaties.” Visit Www.Iisd.Org, Accessed 5 Jan. 2024.

[4] Libraries, Columbia University. “Materializing Corporate Social Responsibility in Investor-State Dispute Settlement.” Academic Commons, 1 Jan. 1970,

[5] bymanishsiq, Posted. “Environmental Impact Assessment History, Meaning and Process.” StudyIQ, 30 June 2023,

[6] Vadi, Valentina. "Environmental impact assessment in investment disputes: Method, governance and jurisprudence." Polish Yearbook of International Law 30 (2010): 169-204.

[7] Baltag, Crina, Riddhi Joshi, and Kabir Duggal. "Recent trends in investment arbitration on the right to regulate, environment, health, and corporate social responsibility: too much or too little?." ICSID Review-Foreign Investment Law Journal 38.2 (2023): 381-421.


  • This article focuses on achieving the Goals of 2030 Agenda for sustainable Development with integration of international arbitration and sustainable development.
  • It examines the alignment of CRS with legal implications.
  • Illustrates the role of EIA in dispute resolution and Sustainable Development.

BY : Vaishnavi Rastogi

All Latest News