Investment Arbitration and the Law of Countermeasures

  • Paparinskis M
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The right of the State to breach its international obligations to induce another State to implement its obligations under law of State responsibility seems to be the antithesis of the ultimately depoliticised investor's right to take the host State to treaty arbitration. This contribution argues that even though in factual terms the exercise of the State's rights to protect investors has somewhat faded in contemporary international law due to investment arbitration, in legal terms these rights are still very much existent. The interplay of the law of countermeasures and investment arbitration will be considered in four steps, sketching the broader context (II), analysing the home State's rights to take countermeasures to induce the host State to comply with its obligations under investment protection law in non-ICSID arbitrations (III) and ICSID arbitrations (IV), and considering the host State's rights to take countermeasures to preclude the wrongfulness of breach of its obligations under investment protection law (V). The presentation will concentrate on the last issue, considering whether in light of the 2001 ILC Articles on State Responsibility the right to take countermeasures could be considered to be excluded by investment protection law or simply could not be exercised in a manner so as to affect investment protection law. Taking into account the substantively and procedurally decentralised investment protection law, it seems more likely that countermeasures are not generally excluded. An argument in favour of treating investment protection rules as not affected by countermeasures could be presented in a number of ways, inter alia relying on parallel developments in humanitarian law, the substantive perspective of human rights and the nature of human rights obligations, but the most plausible explanation would rely on the nature of the investor's rights as being akin to third party rights and thus remaining unaffected by countermeasures against its home State.

Author-supplied keywords

  • Articles on state responsibility
  • F02
  • F10
  • F13
  • F14
  • F15
  • ICSID arbitration
  • Investment arbitration
  • Investment protection law
  • K33
  • Law of countermeasures
  • State responsibility

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  • Martins Paparinskis

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