Singapore firm using secretive international legal system to seek compensation for climate concerns blocking plans
The UK government is being sued in a secretive “corporate court” after a proposal for a new coalmine in Cumbria was quashed by the high court. If successful, UK taxpayers would have to fund a substantial compensation payment to the mine’s investors.
It is the first such case to be filed against the UK government by a fossil fuel company as a result of climate policy. The case uses investor-state dispute settlement (ISDS) rules agreed in a 1975 trade agreement between the UK and Singapore, where the major investor in the coalmine is incorporated.
The details of the claim have not been made public, but ISDS courts allow foreign investors to sue states when their activities are affected by government policies, such as green regulations.
ISDS courts were described as “unjust, undemocratic and dysfunctional” in a recent UN report. Experts have repeatedly warned that their use threatens efforts by countries to cut carbon emissions and fight the climate crisis. More than $100bn in public money has been awarded to corporations through ISDS courts. Fossil fuel companies have benefited most, receiving $80bn since 1998.
The controversial proposed coalmine in Cumbria was blocked by the high court in September. The judge ruled it had been unlawful for the then Conservative government to accept a claim that the mine would be “net zero” when granting planning permission. Labour ministers have since withdrawn government support for the mine.
Cleodie Rickard, the trade campaign manager at the NGO Global Justice Now, said: “We’ve been calling on the government to scrap ISDS in its trade deals for years, to stop exactly this eventuality: fossil fuel companies suing us over necessary climate action.”
She added: “These corporate courts mean that when governments or courts make the right decision, like halting the Cumbria coalmine, foreign corporations have the power to threaten the government in highly secretive processes. If they win, they get to pass their losses from obsolete projects on to the taxpayer.”
The case has been filed by Woodhouse Investment Pte Ltd, a Singaporean company, and West Cumbria Mining (Holdings) Limited. Woodhouse Investment holds 80% of West Cumbria Mining and is itself owned by a firm in the Cayman Islands. The companies are being represented by the barrister and Conservative MP Geoffrey Cox and the law firm Withers.
The most used ISDS agreement is the Energy Charter Treaty, which was initially intended to protect foreign investment in the former countries of the Soviet Union. The UK withdrew from the ECT in February 2024, saying it “could penalise us for our world-leading efforts to deliver net zero”. A “sunset clause” means investors may still use the ECT for up to 20 years. The government is also reported to want ISDS terms in a trade deal being negotiated with India.
The oil company Exxon Mobil is using the ECT to sue the Dutch government for its decision to phase out gas exploration in Groningen, while the UK oil business Rockhopper was awarded $190m in a case it brought against the Italian government, though that has since been annulled.
Chris Rowley, of the Cumbria-based charity South Lakes Action on Climate Change, said: “We are very disappointed to see this attempt by West Cumbria Mining to sue the UK taxpayer after their proposed coalmine was refused an extraction licence and its planning application was quashed. We hope that the UK government will oppose this claim as strongly as they can.”
West Cumbria Mining, Cox, Withers and the Department for Business and Trade have been contacted for comment.
