The doctrine of police powers is increasingly raised as a defence by
host States in investment arbitration proceedings, in particular in the context
of claims with an environmental component. The succinct analysis below
highlights that while the doctrine can effectively be enforced by arbitral
tribunals in determining that a measure taken by a host State and resulting in
loss of property of an investor does not constitute expropriation, certain
concerns with the application of this doctrine must still be addressed. The
limitations to the police powers, as well as the issue of burden of proof, as
recently discussed in Les Laboratoires Servier v. Poland, are few
of the matters of concern. Further, the discussion is even more timely in the
context of the investor-State dispute settlement reform and the discussions in
the UNCITRAL Working Group III.