Arbitration and dispute resolution mechanisms in Scottish free zones information: FOI release

Information requested

You asked for a range of information “regarding arbitration and dispute resolution mechanisms in Scotland’s freezones, including Green Freeports and Special Economic Zones”, and you provided context for the request, i.e.: “whether Scotland's devolved approach to free zones differs from England's model, where LCIA mechanisms are reportedly embedded in all free zone licenses.”

The specific information you requested is set out below, along with our response.

Response

Part 1

You asked for the following information – “Legal Framework Documents: Please provide copies of all licensing agreements, governance frameworks, and legal documents that establish the operational parameters for Scotland's free zones, including:

• Inverness and Cromarty Firth Green Freeport
• Forth Green Freeport
• All 18 Special Economic Zones in Scotland”

We have interpreted “18 Special Economic Zones” as relating to the Investment Zones and Enterprise Areas programmes.

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have some of the information you have requested. There are no general licensing agreements associated with Green Freeport, Investment Zones, nor Enterprise Areas. Please note that there may be licenses associated with specific activities on sites, e.g. marine licences, however these are business-as-usual activities and not directly linked to a site’s status as, for example, a Green Freeport. This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information you have requested.

The information that you have requested about operational parameters is available online. Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. We are therefore providing web links to the relevant information, however, if you do not have internet access to obtain this information from the websites listed, then please contact me again and I will send you a paper copy. This exemption is not subject to the 'public interest test', so we are not required to consider if the public interest in disclosing the information outweighs the public interest in applying the exemption.

Information on the operational parameters of Green Freeports can be accessed via the following links:

• Scottish Government website information on Green Freeports: https://www.gov.scot/policies/cities-regions/greenports/. In particular, please note the links to the Bidding Prospectus and the Set-Up Phase Guidance, which set out programme parameters in detail. In addition, it may be helpful to note that the individual Green Freeports are required to set out their bespoke governance and operational plans in their business cases. When those business cases are agreed with governments, each Green Freeport will be party to a memorandum of understanding (MoU) between the Green Freeport governing body, the relevant local authority/authorities, the Scottish Government and the UK Governments. As part of that process, each of the Green Freeports will be required to publish their business cases.
• Information about Green Freeport incentives:
  • Land and Buildings Transaction Tax relief: https://revenue.scot/taxes/land-buildings-transaction-tax/lbttlegislation-guidance/lbtt3001-exemptions-reliefs/lbtt3010-tax-reliefs/lbtt3049-green-freeports
  • Non-Domestic Rates relief and retention finance circular: https://www.gov.scot/publications/local-governmentfinance-circular-4-2024/
  • Zero rate of secondary National Insurance contributions for Freeport employees: https://www.gov.uk/guidance/check-if-you-can-claim-national-insurance-relief-in-freeport-tax-sites
  • Enhanced Structures and Buildings Allowances: https://www.gov.uk/guidance/check-if-you-can-claim-enhancedstructures-and-buildings-allowance-relief-in-freeport-tax-sites
  • Enhanced Capital allowances: https://www.gov.uk/guidance/check-if-you-can-claim-the-enhanced-capitalallowance-relief-in-freeport-tax-sites.
  • Subsidy scheme: https://searchforuksubsidies.beis.gov.uk/scheme/?scheme=SC11099
  • Customs easements: https://assets.publishing.service.gov.uk/media/6763f8854e2d5e9c0bde9b99/UK_Freeports_induction_pack.pdf

Information on the operational parameters of Investment Zones can be accessed via the following link:

• Programme overview, which includes links to further information on place selection, as well as a technical document that describes process, objectives and incentives in more detail: https://www.gov.scot/policies/citiesregions/investment-zones/

Information on the operational parameters of Enterprise Areas can be accessed via the following links:

• Incentives: https://www.gov.scot/policies/supporting-business/enterprise-areas/
• Locations: https://www.gov.scot/publications/enterprise-areas-maps/
• Information on activities eligible for incentives: https://www.gov.scot/publications/local-government-finance-circular-4-2025-non-domestic-rates-relief-guidance/pages/annex-c---activities-eligible-for-enterprise-areas-relief/
• Scottish Enterprise and Highlands and Islands Enterprise are involved in delivering the Enterprise Areas – you may wish to contact those agencies directly for more information.

Part 2

You asked for the following information – “Arbitration Mechanisms: Please provide details of any international arbitration mechanisms embedded within these zones, including but not limited to:

• London Court of International Arbitration (LCIA) provisions
• International Chamber of Commerce (ICC) arbitration clauses
• UNCITRAL arbitration rules
• Any other international dispute resolution mechanisms”

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have the information you have requested.

There are no international arbitration nor dispute resolution provisions that apply specifically to Scottish Green Freeports, Investment Zones or Enterprise Areas. Documentation relating to the Green Freeports, Investment Zones and Enterprise Areas programmes cover only the particular requirements of those programmes. As there are no specific provisions in respect of international arbitration and dispute resolution that relate specifically to Green Freeports, Investment Zones and Enterprise Areas programmes, we do not have any information to provide. This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information you have requested.

We also understand that the wider UK Freeports programme does not contain any such provisions. Some of the UK’s Bilateral Investment Treaties contain related provisions that would allow a foreign investor to pursue a case, but these treaties apply everywhere in the UK. Bilateral Investment Treaties are reserved to the UK Government, so you may wish to contact the UK Government directly for information at enquiries@businessandtrade.gov.uk.

Part 3

You asked for the following information – “Dispute Resolution Procedures: Please provide information on:

• How disputes between zone operators/businesses and the Scottish Government are resolved
• Whether businesses in these zones can challenge Scottish Government policies through international arbitration
• Any mechanisms that allow zone stakeholders to bypass normal Scottish legal/parliamentary processes”

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have some of the information you have requested. As described at part 2 of this response, there are no international arbitration nor dispute resolution provisions that apply specifically to Scottish Green Freeports, Investment Zones or Enterprise Areas. Furthermore, there are no provisions within these programmes that permit the organisations involved to bypass normal Scottish legal or parliamentary processes. This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information you have requested. Please note that all laws and enforcement measures that apply elsewhere in Scotland continue to apply in Green Freeports, Investment Zones and Enterprise Areas. The programmes are subject to the usual oversight of the Scottish Government by the Scottish Parliament.

On the specific query about potential “disputes between zone operators/businesses and the Scottish Government”, we can confirm that the Green Freeports MoU that is described at part 1 of this response will require that, in the event of any dispute that arises in the context of the interpretation or application of the MoU, each Green Freeport governing body, the relevant local authority/authorities and both governments commit to discussions aimed at resolution.

Part 4

You asked for the following information – “Policy Documents: Please provide any policy papers, briefing notes, or internal
communications regarding the decision-making process for including or excluding international arbitration mechanisms
in Scottish free zones.”

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have the information you have requested. As confirmed at part 2 of this response, there are no international arbitration nor dispute resolution provisions that apply specifically to Scottish Green Freeports, Investment Zones or Enterprise Areas. UK Bilateral Investment Treaties contain related provisions that would allow a foreign investor to pursue a case, but these treaties apply everywhere in the UK. Therefore, we do not have any information to provide. This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information you have requested.

Part 5

You asked for the following information – “Comparative Analysis: If available, please provide any documents comparing
Scotland's approach to free zone governance with that of England, Wales, or other jurisdictions.”

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have the information you have requested. This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information you have requested.

Information about Freeports and Investment Zones in England and Wales can be found on the respective government websites, or by contacting those organisations directly.

• https://www.gov.uk/guidance/freeports
• https://www.gov.uk/guidance/investment-zones-in-england
• https://www.gov.wales/freeport-programme-wales
• https://www.gov.wales/investment-zone-programme.

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