The Compliance with the Law Requirement in International Investment Law

Abstract:     
Investment treaties often require that an investment be made in accordance with the law of the host-State in order to receive protection under the treaty. As such, a tribunal hearing claims under such an investment treaty does not have jurisdiction over claims relating to illegally made investments. Even where no such requirement is present, there is an emerging trend, though inconsistently applied, that requires investments to comply with both host-State and international law in order for claims based on those investments to be admissible. Drawing on international case law and general principles of law this article discusses when an investment’s non-compliance with the law should act as a barrier to the investor’s ability to pursue its claims under an investment treaty.

Number of Pages in PDF File: 29

Keywords: investment treaties, bilateral investment treaty, international dispute resolution, international arbitration, international economic law, BIT, international law, NAFTA, accordance with the law, clean hands

JEL Classification: K33

Accepted Paper Series