From permits to performance: What 2026 holds for mining investment arbitration

Explore other chapters in the Mining Disputes Insights Series 2026.

Key takeaways

• Social licence remains important and should be addressed dynamically throughout a project’s lifecycle.
• International climate law is poised to increasingly shape treaty interpretation.
• ESG-sensitive disputes may favour negotiated, performance-based resolution over litigation.

Why this matters

Where permitting, performance, and climate risk are more tightly linked than ever, there are important lessons for mining companies involved in investment-related disputes.

Overview

Developments in mining-related investment arbitration in 2025 reflected the ongoing evolution in environmental, social, and governance considerations affecting sovereign risk, project viability, and dispute outcomes. Issues of social licence to operate and host State regulatory responses to environmental and social concerns continued to feature prominently. 

The issuance of the International Court of Justice’s (“ICJ”) Advisory Opinion on Climate Change raised additional considerations and corresponding uncertainty regarding the line between lawful and unlawful State conduct in the regulation of mining-related activities. These developments have material implications for investors, lenders, States, and other stakeholders navigating new and existing projects.

In this update, we discuss three interrelated trends from 2025 drawn from recent cases.

For 2026, these same trends highlight opportunities: companies that proactively manage social licence, environmental compliance, and climate-related risk are better positioned to reduce disruption, preserve project value, and achieve favourable outcomes if disputes arise.

Challenge: Social licence failures can disrupt projects even after approvals

Opportunity: Build and document durable engagement throughout the project lifecycle

Developments in 2025 confirmed that social licence has moved from a reputational consideration to a core legal issue in investment disputes. This is evidenced by the final award in Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala (Kappes), rendered in December 2025 under the Central America–Dominican Republic–United States Free Trade Agreement (“CAFTA-DR”). The dispute arose after Guatemalan courts suspended licences for the claimants’ projects in the Tambor region due to failures to conduct adequate consultation with affected Indigenous and local communities.

The case stands out for several reasons:

• It highlights the debate over what constitutes adequate consultation with affected Indigenous and local communities, including questions about the source of consultation obligations, which public or private actors bear responsibility for fulfilling them, and how responsibility is allocated when shortcomings arise.
• It addressed the increasingly prominent issue of counterclaims by a State in an investment treaty dispute. Guatemala counterclaimed for US$2 million in environmental remediation costs, alleging failures to meet environmental obligations. The tribunal declined jurisdiction, finding insufficient nexus between the counterclaim and the CAFTA-DR framework. It emphasized that this conclusion was treaty-specific.

Although the tribunal ultimately did not award damages to either party, the case is significant for what it signals to investors: domestic enforcement of consultation and participation requirements can evolve during a project’s lifecycle, fundamentally reshaping investment risk. The record in Kappes featured extensive evidence on community engagement, due diligence, and the consequences of operating amid sustained social opposition.

Practical implication: Social licence risk is not static. Investors should plan for consultation standards and enforcement to evolve during a project’s lifecycle and manage engagement efforts accordingly.

A complementary lesson emerges from Gran Colombia Gold Corp. v. Republic of Colombia (now Aris Mining v. Colombia). There, the claimant alleged indirect expropriation arising from Colombia’s failure to protect certain mining sites from rogue or illegal miners. After a merits hearing and a subsequent corporate merger involving the claimant, the case was resolved in 2025 through a landmark settlement terminating the arbitration without monetary compensation.

Instead, the parties entered into a long-term, performance-based agreement focused on security, environmental compliance, and sustainable development in mining communities. The Gran Colombia case illustrates how engagement around social licence and operational realities may help de-escalate disputes and yield commercially sustainable outcomes.

Challenge: Environmental and climate-driven regulation is less predictable

Opportunity: Anticipate climate and environmental scrutiny early to reduce disruption

Alongside social considerations, 2025 also heightened scrutiny of host State regulatory conduct responding to environmental and climate concerns. States defending measures affecting investments, such as licence suspensions or withdrawal of approvals, based on environmental protection, sustainability, and public participation obligations, are not insulated from claims by investors.

Woodhouse Investment Pte Ltd & West Cumbria Mining (Holdings) Ltd v. United Kingdom, the first ICSID arbitration commenced against the UK, is one example. Registered in August 2025, the case arises from the revocation of planning permission for the proposed Whitehaven coking coal mine following domestic litigation emphasizing climate impacts, including downstream emissions. 

Permission had been granted in 2022, but was revoked in 2024 following a successful judicial review before the High Court of England and Wales. The investors later withdrew their planning application and brought a claim under the 1975 Singapore-United Kingdom Bilateral Investment Treaty. 

Although the case is in its early stages, it may address a key question: how State obligations at the crossroads of investor protections and international climate and environmental law are to be reconciled.

Practical implication: Even in historically stable jurisdictions, environmental and climate considerations can trigger renewed scrutiny and reversals after approvals are granted, making long‑term permitting certainty harder to assume. Investors should proactively address these risks regardless of jurisdiction.

Challenge: International climate law is increasingly part of the dispute backdrop

Opportunity: Proactive planning can reduce legal and commercial uncertainty

Woodhouse v United Kingdom may prove to be the so-called “canary in the coal mine” in light of the ICJ’s Advisory Opinion on Climate Change. While not binding, the opinion confirmed that States have obligations to prevent significant climate harm, exercise due diligence, and cooperate to mitigate and adapt to climate change. 

Given its potentially far-reaching implications for energy, infrastructure, and transportation, stakeholders should carefully assess how climate-related obligations may influence future regulatory action and investment disputes as projects advance.

Conclusion

Mining companies, investors, and their advisors should treat social licence, environmental regulation, and climate law as integrated and evolving project risks — best addressed continuously and purposefully.
If you would like to discuss how these developments may affect a current or proposed project, or how they are being treated in recent investment arbitrations, our Global Metals & Mining team would be pleased to continue the conversation.

Our Mining Disputes Insights Series highlights recent court decisions, legal developments and policy shifts that are influencing how capital is deployed, how transactions are structured, and how projects are advanced and defended when challenged. Each article offers focused insight on a specific pressure point or recent development, with an emphasis on practical consequences for mining companies, investors, and other market participants. Across the series, we explore questions that matter to both operational and deal teams.

For a closer look at developments affecting the mining sector and guidance on addressing challenges and opportunities, check out our Mining Prospects blog.