Geopolitics, the UK and investor-state arbitration: a ‘new normal’ in an uncertain world?

June 2026  |  SPECIAL REPORT: INTERNATIONAL DISPUTE RESOLUTION

Financier Worldwide Magazine

June 2026 Issue

Policy debates about energy transition from fossil fuels to renewables are no longer dominated by climate change. In the UK, the need to ensure energy security in an uncertain world – brought home by the conflicts in Ukraine and Iran – has led to calls for both halting and accelerating the transition.

Recently, the issues have surfaced together in a different policy setting: protection of investments in the UK by overseas investors.

Responding to a parliamentary question in November 2025, the secretary of state for business and trade stated that the UK government was a respondent to two active investor-state arbitrations: one brought by Woodhouse Investment Pte Limited and West Cumbria Mining (Holdings) Limited, the other brought by Mr Mikhail Fridman. This represents a new frontier for the UK government.

With over 80 bilateral investment treaties (BITs), the UK network of BITs is one of the largest in the world, providing UK investors with a means of redress through international arbitration against third-party states. Overseas investors are accorded the same level of protection with respect to the UK, albeit no investor claims against the UK have been reported hereto.

In a complex geopolitical and regulatory environment with increasing calls for enhanced environmental, social and governance and security due diligence and screening of investments, are these new claims against the UK government a sign of an emerging trend of its policies being challenged by investors in international arbitration?

A new front in investor-state claims

In what appears to be the first International Centre for Settlement of Investment Disputes (ICSID) arbitration filed against the UK, Woodhouse Investment Pte Ltd, a Singaporean company, and its subsidiary West Cumbria Mining (Holdings) Limited, a UK company, have brought a claim under the 1975 UK-Singapore BIT claiming redress arising from the revocation of planning approval for a new underground coal mine in Whitehaven, Cumbria.

The public record shows that there is a long and hard-fought background to these proceedings.

The application for planning permission was originally made in May 2017 and granted in December 2022. Following a public inquiry, an intense campaign by environmental campaigners and legal proceedings brought by the pressure group Friends Of The Earth Limited, in September 2024 the High Court quashed the planning approval. In April 2025, West Cumbria then withdrew its planning application. However, it seems that was not the end of the story.

Though the pleadings have not been made public, it seems likely that Woodhouse and West Cumbria’s claim will include allegations that the UK government has acted in a way that breached their right to fair and equitable treatment and protection against indirect expropriation of their investment.

From a recent procedural order, it appears that there is an expectation that some aspects of the arbitration, such as the award, orders and declarations, will be made public. The claim is a significant step taken against the UK government, not least given the history of its involvement with BITs. Given also the public interest in matters of national energy infrastructure, it is hoped that more information about the claim will be made available as the arbitration progresses.

Lessons from Bilcon

While the Woodhouse claim represents a new front for the UK government, claims against developed states arising from environmental decisions are not new.

Perhaps the most famous example is the case of Clayton and Bilcon v Canada – an investor-state claim brought by American investors against the Canadian government under the North American Free Trade Agreement (NAFTA). Their claims arose from the Canadian authorities’ failure to approve a proposal to operate a quarry and marine terminal in Nova Scotia.

The applicant investors argued that the treatment they had faced at every stage of a lengthy environmental assessment process was unfair, politically biased and discriminatory. The award on jurisdiction and liability was handed down on 17 March 2015.

The investors alleged, and a majority of the tribunal found, breaches of Canada’s obligations under NAFTA to provide investors with a minimum standard of treatment in accordance with international law, including fair and equitable treatment and full protection and security of investments.

These are typical protections to be found in BITs, including the UK-Singapore BIT which is at issue in the Woodhouse claim. Article 2(2) of that treaty sets out the requirement to afford investments fair and equitable treatment and full protection and security.

Both sides launched unsuccessful appeals against, variously, the decision on jurisdiction and liability and the decision on damages. The latest decision was handed down in July 2024, over 15 years after the executive decision at issue was made, upholding the award on damages in the sum of $7m (in contrast to the $440m claimed by the investors).

A changing landscape for the global north

The Woodhouse claim shows that developed states cannot be blasé about their prospects of being made subject to claims under BITs they have signed up to. Nor should they think that only the most egregious examples of executive overreach (such as direct expropriation of investments) will be the subject of investor-state claims.

Investors are sophisticated and the sums involved in energy projects are huge. There is ample motivation for investors to seek redress via investor-state arbitration where their operations have been affected by the decisions of governments trying to regulate in hotly politicised fields.

A similar trend is emerging in relation to sanctions. The second claim brought against the UK by Mikhael Fridman is not publicly available but appears to relate to the UK government’s decision to impose sanctions against him.

Mr Fridman is reported to have initiated parallel claims against at least one other state in Europe. Further BIT claims have also recently been reported in relation to Belgium’s plans to support a €140bn loan being made to Ukraine using frozen Russian Central Bank assets held in Belgium.

What next?

Developed states are facing a dilemma. On the one hand, governments have long recognised that the BIT network is a key means through which to encourage foreign investment and reciprocity with developing nations. Moreover, investors in the developed world have greatly benefitted from the protections in these treaties when investing overseas.

On the other hand, the current geopolitical landscape and pressures are complex for governments to navigate, not least given the risk of liability for state acts. In a conflict-prone world, national security is increasingly important as domestic policy, and the sanctions regime is a well-used tool in the armoury of states seeking to influence the actions of other states and related companies and individuals.

Governments are also under sustained pressure from citizens and public interest groups to take action against climate change and make serious commitments to goals such as net zero.

Governments need to be able to regulate to meet their domestic policy goals or internationally recognised sustainable development goals. That necessarily means that sometimes hard decisions will need to be taken which will affect foreign investments on their soil.

Sometimes these policy considerations will also overlap. For example, recent media reports that the UK government has blocked plans for a Chinese wind turbine-maker to create a factory (and 1500 jobs) in Inverness shows how even renewables are not immune from national security concerns.

It is worth noting that the UK-China BIT does not confer protections to investments at a pre-establishment stage. Bold defensive action brings with it the risk of future legal proceedings. Recent steps taken by the Dutch government to take effective control of a Chinese-owned chip company was positioned as a response to serious governance shortcomings (and not as a takeover) but immediately resulted in accusations of political interference from China.

Conclusion

It remains to be seen where the balance lies between the competing interests of investors and states in the global north. It may be several years before emerging trends will assume a sharp focus. Pressure to regulate is unlikely to abate in the foreseeable future and time will also tell how far potential investor claims will bring a regulatory chill in the global north.

Ultimately, investor-state claims that clear jurisdictional hurdles are won or lost on the merits. The prospect of future claims should also drive up the quality of executive decision making and record keeping on difficult topics.

These matters are of national importance, and it is hoped that the public interest will provide sufficient impetus for increased transparency in investor-state arbitrations involving the UK government.

 

Dr Vlad Meerovich is a partner and Alice McDonald is a senior associate at Peters & Peters Solicitors LLP. Dr Meerovich can be contacted on +44 (0)20 7822 7762 or by email: vmeerovich@petersandpeters.com. Ms McDonald can be contacted on +44 (0)20 7822 7758 or by email: amcdonald@petersandpeters.com.

© Financier Worldwide

BY

Vlad Meerovich and Alice McDonald

Peters & Peters Solicitors LLP

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