Navigating Investment Law in the Blue Economy

Navigating Investment Law in the Blue Economy

by | 15 Mar 2022

As the blue economy continues to expand, businesses operating in this sector face a range of legal and regulatory challenges, particularly when it comes to international investment. In this blog post, we will provide an overview of the key international investment laws that apply to blue economy businesses.

The International Investment Framework

The international investment framework is made up of a complex network of legal instruments, including international treaties, investment agreements, and national investment laws. At the core of this framework is the principle of investor protection, which aims to provide foreign investors with a stable and predictable legal environment in which to operate.

One of the key international instruments in this framework is the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). This convention provides a mechanism for the settlement of investment disputes between foreign investors and host states, through an arbitration process that is independent of the host state’s court system.

Another important international instrument is the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration. This model law provides a framework for the conduct of international arbitration, which is a common means of resolving investment disputes.

Investment Agreements

Another important aspect of the international investment framework is investment agreements, which are negotiated between states and provide foreign investors with certain protections and guarantees. The most common form of investment agreement is the bilateral investment treaty (BIT), which is a treaty between two countries that provides foreign investors with protections such as fair and equitable treatment, protection against expropriation, and the free transfer of funds.

Another type of investment agreement is the free trade agreement (FTA), which includes investment provisions as well as provisions on trade in goods and services. FTAs are negotiated between countries or regions, and can provide investors with a wider range of protections than BITs.
Investment agreements can be a useful tool for blue economy businesses looking to invest in a foreign country, as they provide a level of legal certainty and protection against political risk. However, it’s important to note that the specific protections and guarantees provided by investment agreements can vary widely depending on the country and the agreement in question.

National Investment Laws

In addition to international investment agreements, blue economy businesses must also navigate the national investment laws of the countries in which they operate. National investment laws vary widely from country to country, but they typically regulate issues such as foreign investment, expropriation, and dispute settlement.

For example, some countries require foreign investors to obtain government approval before investing in certain sectors, while others have restrictions on the ownership of land by foreign investors. Additionally, many countries have laws that allow the government to expropriate foreign-owned assets in certain circumstances, such as for public purposes or in the event of a national emergency.

Dispute Settlement

One of the most important aspects of international investment law for blue economy businesses is dispute settlement. Investment disputes can arise in a variety of contexts, such as disputes over regulatory measures, breaches of investment agreements, or expropriation.
When a dispute arises, foreign investors have a number of options for resolving the dispute. One option is to pursue litigation in the host state’s courts, although this can be risky in countries with weak rule of law or biased court systems. Another option is to pursue international arbitration, which is a common means of resolving investment disputes.

International arbitration provides investors with a neutral forum for resolving disputes, and is governed by a set of rules and procedures that are designed to ensure fairness and impartiality. The UNCITRAL Arbitration Rules are a commonly used set of rules for international investment disputes, and provide a flexible and efficient framework for resolving disputes.

Navigating the international investment framework can be a complex and challenging task for blue economy businesses, particularly when it comes to protecting their commercial investment across borders.

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