From Safeguards to Scope: Evaluating Public Health Exclusions from ISDS

This article examines emerging treaty practices to safeguard public health measures from liability under investor–State dispute settlement (ISDS). Although States have traditionally relied on ‘right to regulate’ clauses, general exceptions and clarifications to substantive obligations, recent disputes show that such provisions often fail to block investor claims. As COVID-19-era measures and evolving public health regulations fuel further litigation, States have increasingly considered a more direct approach: excluding health-related measures entirely from the scope of ISDS. While this exclusionary method holds promise for minimising arbitral exposure, it raises new interpretive uncertainties. Tribunals may adopt restrictive readings of a ‘public health’ measure or invoke proportionality analyses undermining the exclusion’s intended effect. The article explores how these textual ambiguities may hinder the policy space that States seek to preserve. It concludes by offering practical drafting recommendations—such as clearer definitions and explicit guidance on evidentiary thresholds—to ensure that ISDS exclusions operate predictably and effectively. By refining how exclusions are framed, States can better protect their authority to enact public health measures without incurring unintended liability in investment arbitration.