ISDS, the energy transition, and the rule of law: the first arbitration claim against the United Kingdom under the UK–Singapore BIT

Introduction

The intersection of international investment law and climate regulation has emerged as one of the most consequential legal battlegrounds of the twenty-first century. As states intensify their regulatory responses to the climate emergency, a structural tension has become increasingly apparent: the very mechanisms created to protect foreign investors from arbitrary government conduct may now be deployed to resist the lawful, and indeed legally required, withdrawal of permissions for environmentally harmful projects. This tension is brought into sharp relief in the reported commencement of investor-state dispute settlement (ISDS) proceedings against the United Kingdom under the UK–Singapore Bilateral Investment Treaty (1975) (BIT), following the English courts' quashing of planning permission for the proposed coal mine at Whitehaven, Cumbria (the Woodhouse Colliery).^[1] The claim, registered on 8 August 2025 as ICSID Case No ARB/25/37, was brought by Woodhouse Investment Pte Ltd, a Singaporean company, and West Cumbria Mining (Holdings) Ltd.

The Whitehaven Coal Mine: Planning History and the Quashing of Permission

Planning permission for the Whitehaven coal mine was granted by the Secretary of State for Levelling Up, Housing and Communities by decision letter dated 7 December 2022, following an application originally made on 31 May 2017 and called in on 11 March 2021.^[2]

Friends of the Earth Limited and South Lakeland Action on Climate Change – Towards Transition (SLACC) brought claims for statutory review under section 288 of the Town and Country Planning Act 1990, seeking to quash the Secretary of State's decision.^[3] The Secretary of State conceded that the decision should be quashed.^[4]

The claims turned on the UK Supreme Court's decision in R (Finch) v Surrey County Council [2024] UKSC 20^[5], which held that where combustion of extracted fossil fuel is an inevitable consequence of extraction, the resulting greenhouse gas (GHG) emissions are a significant likely indirect effect requiring assessment in the EIA. In the Whitehaven context, Holgate J held that the Inspector (the Planning Inspector appointed by the Planning Inspectorate to conduct the public inquiry and report to the Secretary of State) and the Secretary of State had erred in law by applying the “sufficient causal connection" test and by treating as relevant matters that the UK Supreme Court in Finch had declared legally irrelevant – including the existence of downstream intervening processes, the location of combustion outside the site, and the absence of the developer's control over end-users.^[6] The court upheld the challenges and ordered the planning permission to be quashed.^[7]

The Legal Foundation

Finch concerned the expansion of oil production at Horse Hill near Horley, Surrey (England), with projected production of approximately 3.3 million tonnes of oil over an estimated 20-year production phase.^[8] Although the Council's scoping opinion recommended assessing the scheme's effect on climate, the developer's environmental statement confined its GHG assessment to direct releases within the site boundary and did not assess downstream combustion emissions.^[9] The Supreme Court gave judgment on 20 June 2024, on appeal from the Court of Appeal's decision [2022] EWCA Civ 187.^[10] Lord Leggatt reasoned that extraction would initiate an inevitable causal chain ending in combustion, thereby rendering the causal connection exceptionally strong.^[11] Applying the relevant conversion factor of 3.22 tonnes of CO2 per tonne of oil yields an estimate of approximately 10.6 million tonnes of CO2 over the project lifetime, compared with the environmental statement's estimate of 140,958 tonnes of CO2 for direct on-site emissions. On that basis, the inclusion of combustion emissions would have rendered the project's attributable climate footprint nearly two orders of magnitude greater.^[12]

Investment Law Dimensions: FET, Expropriation, and the Police Powers Doctrine

The FET standard protects investors' legitimate expectations arising from specific assurances or stable regulatory frameworks, and requires procedural transparency, consistency, and the absence of arbitrary action. Planning permissions granted subject to judicial oversight are, by their nature, conditionally stable instruments: they reflect the decision-maker's best application of the law at the time, but they do not and cannot guarantee immunity from subsequent judicial review. The police powers doctrine, well established in customary international law, provides that bona fide, non-discriminatory regulatory measures taken in the public interest do not give rise to a duty to compensate, even where they cause economic loss to a foreign investor. On that basis, the quashing of the Whitehaven permission constituted an exercise of independent judicial review applying settled domestic environmental law, and thus the kind of sovereign regulatory act that the police powers doctrine is designed to shield from liability under investment treaties.

The quashing may also be characterised as an indirect expropriation – a measure that, while not amounting to a formal taking, substantially deprives the investor of the economic benefit of its investment. The distinction between compensable expropriation and non-compensable regulation is usefully illustrated by Infinito Gold Ltd v Costa Rica (ICSID Case No ARB/14/5).^[13]

Infinito Gold was brought under the Canada–Costa Rica BIT and concerned the Las Crucitas gold mining project in Costa Rica. The claimant relied on Santa Elena for the proposition that “[e]xpropriatory environmental measures – no matter how laudable or beneficial to society as a whole – are in this respect, similar to any other expropriatory measures that a state may implement in order to implement its policies: where property is expropriated, even for environmental purposes, whether domestic or international, the state's obligation to pay compensation remains.^"[14]

The Azienda Elettrica Ticinese v Germany Parallel

In Azienda Elettrica Ticinese (AET) v Federal Republic of Germany (ICSID Case No ARB/23/47), Germany filed its Counter-Memorial on the Merits and Memorial on Jurisdiction, defending the Act to Reduce and End Coal-Fired Power Generation (the “2020 Act"). The 2020 Act was adopted by the Bundestag and Bundesrat on 8 August 2020 and entered into force on 14 August 2020.^[15]

Germany's defence combined a right-to-regulate argument with evidence that the 2020 Act had conferred net economic benefits on AET's wider portfolio – including through higher wholesale electricity prices that increased revenues from its hydro and nuclear assets – and that any claim should be reduced accordingly.^[16]

Comparative Perspective: GreenX Metals v Republic of Poland

GreenX brought its claims against Poland under both the Australia–Poland BIT and the Energy Charter Treaty in connection with its Jan Karski coal project. The tribunal unanimously found that Poland had breached its treaty obligations in its treatment of that project. On 7 October 2024, the tribunal awarded approximately £252 million under the BIT, including interest compounded annually at SONIA plus one percentage point from 31 December 2019 to the date of the award, with interest continuing to accrue at that rate until full payment. The tribunal separately awarded approximately £183 million under the ECT, on equivalent interest terms. The awards are structured so that any sums paid under one are offset against the other, thereby avoiding double recovery.^[17] The GreenX tribunal's finding is, however, factually distinct from the Whitehaven situation: it rested on a breach of the national treatment standard, Poland having awarded the mining concession to a state-owned competitor, whereas the quashing at Whitehaven arose from independent judicial review on environmental law grounds rather than discriminatory state conduct.

On 9 January 2026, GreenX reported that the Singapore International Commercial Court had rejected Poland's application to set aside the ECT award in its entirety, thereby upholding GreenX's entitlement to compensation under the ECT. The application had been lodged by Poland in January 2025 and heard in July 2025. Approximately £17 million in additional interest had accrued between the date of the award in October 2024 and the end of December 2025.^[18]

The Systemic Challenge: ISDS and Climate Governance

The principle established in Finch – now settled UK law – is that a planning authority commits a legal error when it assesses only direct emissions and excludes indirect effects, contrary to the EIA Directive's requirement to assess both direct and indirect significant effects.^[19] The scale of that omission is stark: the inclusion of combustion emissions increases the assessable climate footprint by nearly two orders of magnitude compared with on-site direct emissions alone.^[20] ISDS claims that seek to convert the correct application of this framework – including through independent judicial review – into a compensable wrong create the prospect of states being required to compensate investors for correctly applying their own environmental laws.

The AET v Germany proceedings, the GreenX v Poland awards, and the reported UK–Singapore BIT claim collectively illustrate a broader pattern: as the energy transition accelerates, ISDS mechanisms are increasingly being deployed to resist or price the regulatory consequences of climate-driven legislative and judicial action. The GreenX v Poland outcome demonstrates that tribunals operating under the UNCITRAL framework can and do award very substantial sums, and that the rejection of set-aside applications leaves states with extremely limited scope for post-award review.^[21] The Whitehaven claim, brought under the ICSID Convention rather than the UNCITRAL Rules, adds a further dimension: awards rendered under the ICSID Convention benefit from the enforcement mechanism of Article 54, under which over 150 Contracting States are obliged to recognise and enforce them as if they were final judgments of their own courts.

Conclusion

The reported ISDS claim against the United Kingdom under the UK–Singapore BIT, arising from the quashing of the Whitehaven coal mine planning permission, is a landmark development at the intersection of international investment law and climate governance. The regulatory landscape has since shifted further: on 14 November 2024, the UK Government confirmed by Written Ministerial Statement its intention to legislate a prohibition on the grant of new coal extraction licences, and in April 2025 West Cumbria Mining withdrew its planning application – developments that may broaden the factual basis of the ISDS claim beyond the judicial quashing itself. The quashing was the outcome of judicial review proceedings in which the court upheld challenges on multiple grounds and ordered the 7 December 2022 planning permission to be set aside.^[22] The underlying legal principle is that where combustion of extracted fossil fuel is an inevitable consequence of extraction, the resulting GHG emissions are a significant likely indirect effect requiring assessment in the EIA – a principle confirmed by the Supreme Court in Finch and applied by Holgate J to the Whitehaven facts.^[23]

International tribunals have not consistently excluded judicial acts from FET scrutiny – as Infinito Gold demonstrates – and the financial stakes, as illustrated by the GreenX v Poland awards and the subsequent rejection of Poland's set-aside application, are very substantial.^[24] The outcome of the UK–Singapore BIT claim will therefore have consequences well beyond the specific dispute, shaping the extent to which investment treaty protections can be invoked to resist the application of domestic environmental law by independent courts, and thereby defining the practical capacity of states to implement the regulatory frameworks that an effective response to the climate emergency demands.

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^[1].  Susannah Moody, 'UK hit with first ICSID claim', Global Arbitration Review, 11 August 2025, https://globalarbitrationreview.com/article/uk-hit-first-icsid-claim, accessed 22 March 2026 (requires subscription).

^[2].  Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] EWHC 2349 (Admin) [1]–[5].

^[3].  Town and Country Planning Act 1990, s 288; Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] EWHC 2349 (Admin) [11].

^[4].  Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] EWHC 2349 (Admin) [12]–[14].

^[5].  UK Supreme Court, R (Finch) v Surrey County Council [2024] UKSC 20, UK Supreme Court, 20 June 2024, https://www.supremecourt.uk/cases/uksc-2022-0064.html, accessed 18 May 2026.

^[6].  Ibid [15]–[30]; R (Finch) v Surrey County Council [2024] UKSC 20 [1]–[10].

^[7].  Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] EWHC 2349 (Admin), Order.

^[8].  R (Finch) v Surrey County Council [2024] UKSC 20 [3]–[5].

^[9].  R (Finch) v Surrey County Council [2024] UKSC 20 [6]–[12].

^[10].  Ibid [1]; R (Finch) v Surrey County Council [2022] EWCA Civ 187.

^[11].  R (Finch) v Surrey County Council [2024] UKSC 20 [50]–[60].

^[12].  Ibid [61]–[65].

^[13].  Infinito Gold Ltd v Republic of Costa Rica, ICSID Case No ARB/14/5, Award, 3 June 2021.

^[14].  Ibid [658], citing Compañía del Desarrollo de Santa Elena, SA v Republic of Costa Rica, ICSID Case No ARB/96/1, Final Award, 17 February 2000 [71].

^[15].  Azienda Elettrica Ticinese v Federal Republic of Germany, ICSID Case No ARB/23/47, Respondent's Counter-Memorial on the Merits and Memorial on Jurisdiction (26 March 2025); Act to Reduce and End Coal-Fired Power Generation of 8 August 2020, Federal Law Gazette I p. 2479.

^[16].  Azienda Elettrica Ticinese v Federal Republic of Germany, ICSID Case No ARB/23/47, Respondent's Counter-Memorial [667]–[673].

^[17].  GreenX Metals Limited (formerly Prairie Mining Limited) v Republic of Poland (I), UNCITRAL, Press Release on Final Award, 8 October 2024.

^[18].  GreenX Metals Limited (formerly Prairie Mining Limited) v Republic of Poland (I), Claimant Stock Exchange Filing Re Singapore Court Dismissing Poland's Set-Aside Application, 9 January 2026.

^[19].  R (Finch) v Surrey County Council [2024] UKSC 20 [66]–[80]; Directive 2011/92/EU as amended by Directive 2014/52/EU, art 3.

^[20].  R (Finch) v Surrey County Council [2024] UKSC 20 [61]–[65].

^[21].  GreenX Metals Limited (formerly Prairie Mining Limited) v Republic of Poland (I), Claimant Stock Exchange Filing Re Singapore Court Dismissing Poland's Set-Aside Application, 9 January 2026.

^[22].  Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] EWHC 2349 (Admin), Order.

^[23].  R (Finch) v Surrey County Council [2024] UKSC 20; Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] EWHC 2349 (Admin) [15]–[30].

^[24].  Infinito Gold Ltd v Republic of Costa Rica, ICSID Case No ARB/14/5, Award, 3 June 2021; GreenX Metals Limited (formerly Prairie Mining Limited) v Republic of Poland (I), Claimant Stock Exchange Filing Re Singapore Court Dismissing Poland's Set-Aside Application, 9 January 2026. ?