Public Health and Investment Protection in the Context of the COVID-19 Pandemic—From the Sustainable Perspective of Exception Clauses

Abstract

In response to the COVID-19 pandemic, various preventive and controlling measures have been taken by host states but may damage the interests of foreign investors and consequently result in international investment disputes. Confronted with potential international investment ar-bitration, the exceptions clause in international investment law is one of the host state’s defences. However, the public health exception clause is a general exception clause with uncertainty when investment arbitration takes place and investment arbitral tribunals interpret it. In the international society, sustainable development has gradually been recognized as a key principle in contemporary international law. Against this background, in the context of international investment, it is appro-priate for host states to optimize the exception clauses in BITs or FTAs, thereby reducing the risk of arbitration concerning the host state’s regulatory measures to protect the public from the pandemic.