ITALY Trends and Developments Contributed by: Maria Chiara Malaguti, Filippo Rossi and Roberto Longhi, PedersoliGattai
ported by the parties to the agreement. Special refer- ence is made, inter alia, to sustainable development (Article 20) and climate change policies (Article 21). Despite the imposition of such duties on investors, violations are not justiciable, as Article 24 on ISDS only applies to breaches of provisions on protection of investors. The Italy-Uzbekistan BIT was signed in May 2025. Others are currently being negotiated, but none has yet been made public at the time of writing, and it is thus impossible to verify how the Model BIT is being As briefly mentioned, it is maintained that legislation on screening of incoming investments has no inter- action with direct investment law as the latter covers only investments once these are made in the terri- tory of a country. Access to market is not covered by investment law. This is clearly established in the 2025 Italian Model BIT (Article 3): “For greater certainty, this Agreement provides only post-establishment protec- tion and does not cover the pre-establishment phase or matters of market access.” Furthermore, it contains a provision stating that nothing in the BIT can prevent a party from taking an action that it considers neces- sary for the protection of its essential security interests (Article 16.1 (b)). Despite this clear language, some uncertainties per- sist. Firstly, many investments are still based on old BITs, where such clear statements are not found. Sec- ondly, the boundaries between pre- and post-invest- ment are often blurred if one looks at existing awards (here the comment is general and not referring to Ital- ian instruments or cases involving Italy specifically). Finally, although the market-access potential restric- tion produced by investment screening is outside the scope of investment law, the screening procedure itself might still pose a risk with respect to substan- tive protection standards, such as FET. Arbitral case law at this stage is still very limited. However, at least one situation has been deemed to imply screening measures: when an existing investment “expands” by entering a different market, in light of the theory of “unity of investment” (if there is a business link reflected in these concrete agreements. Screening of Incoming Investments
between different transactions, these are regarded as being part of the same investment), this expan- sion would be subject to investment law. Should an investor already active in a country enter a market considered of national interest and thus subject to a screening tool, its expansion would also be subject to investment law. In that case, it is not the very essence of a screening tool that is put into question, but rather the screening procedure, which could in fact limit the rights of the foreign investor (see Global Telecom v Canada , Award of the Tribunal, 27 March 2020). In Global Telecom v Canada , Canada was accused of not respecting general principles of due process, and the arbitral tribunal, although recognising that in the specific circumstances the state had a wider margin of appreciation, established the following standard (see Section 608): “The Tribunal considers that [the] due process stand- ard [in a national security review] should be deemed satisfied where the subject of the investigation is afforded a fair opportunity to make its case in relation to readily identifiable issues, and that opportunity is afforded reasonably ahead of an administrative deci- sion being made based on objectively verifiable fac- tors and after an appropriate time period which is not unnecessarily rushed.” On the other hand, as for the issue of pre- versus post-investment phases, in Lemire v Ukraine (Deci- sion on Jurisdiction and Liability, 14 January 2010), the claimant had stated that the refusal of a licence in the broadcasting sector to a foreign company that was already active in the sector, and that planned to expand its original investment, was a violation of investment law. Ukraine countered that any licensing mechanism was part of the pre-investment phase. The arbitral tribunal agreed with the claimant that invest- ment law applied and affirmed its jurisdiction. Each case should be assessed by evaluating the over- all economic activities and the circumstances of the case. Moreover, any future BIT mirroring the language of the Model BIT would possibly leave little room for claims against the Italian screening procedures based on investment law. However, a brief description of the
138 CHAMBERS.COM
Powered by FlippingBook