Pierre-Emmanuel Dupont has published a chapter on ‘The Arbitration of Disputes Related to Foreign Investments Affected by Unilateral Sanctions‘ in A.Z. Marossi and M. Bassett (eds), Economic Sanctions under International Law (The Hague: T.M.C. Asser Press, 2015) 197-217.
In this chapter, Pierre-Emmanuel argues that in some cases, there may be a reasonable chance of success for those companies targeted by unilateral sanctions to prevail in an investor-State arbitration against a targeting State where the companies are in a position to rely on a BIT in force between their home country and this State. The chapter begins with a consideration of the jurisdictional basis of claims for damages suffered by investments. It emphasizes that affected companies considering such an option shall first assess the likelihood of an arbitral tribunal’s determination that such company has actually made an investment in the targeting State. The chapter then turns to the standards of investment protection found in BITs that could be invoked in cases of application of unilateral sanctions. It is submitted that the prohibition of expropriation is prima facie the most relevant but that other standards of investment protection such as fair and equitable treatment, full protection and security, and the prohibition of unreasonable and discriminatory measures, may at times come into play. It finally examines the probable defenses that a respondent State faced with such a claim would likely raise. These arguments could be based either on the law of countermeasures or on specific provisions in BITs such as clauses on ‘essential security interests’ and ‘non-precluded measures’ or, in the case of EU measures, on the principle of primacy of EU law. The author argues that none of these lines of argument could operate as to exclude ipso facto the international responsibility of the targeting State.