A tale of policy carve-outs and general exceptions: Eco Oro v Colombia as a case study

The Eco Oro v. Colombia Decision has garnered immediate public and academic attention and generated immense controversy. One of the reasons for its notoriety was the arbitral tribunal's unconventional take on the general exceptions clause of the Canada-Colombia Free Trade Agreement and its contention that, even when a challenged measure fulfils the requirements of this exception, a host state's duty to compensate remained. This conclusion has since been interpreted as an indication that, in spite of states' attempts to carve certain regulatory and/or administrative measures motivated by public interest out of the protective scope of some recent international investment agreements (IIAs), such as environmental protection, arbitral tribunals continue to disregard these sensitivities. In light of this background, this article will focus on the parties' arguments, the Tribunal's analysis, as well as the interpretative implications of the Decision, focusing on indirect expropriation, the fair and equitable treatment, and the application of the general exception clause.