Reconciling the Irreconcilable: Applying the Proportionality Principle to Balance a State’s Human Rights Obligations with Investor-Specific Protections Arising from Oil & Gas Concession Agreements
Posted: 2 Jul 2012
Date Written: July 2, 2012
Abstract
Arbitral tribunals have recently relied on the principle of proportionality to assess whether a state’s conduct is reasonable as balanced between the interests of its citizens and those of an investor. The principle constitutes an ascertainable benchmark to assess intervening international obligations that a state faces — particularly in relation to contractual obligations arising from concession contracts related to oil and gas. Concession agreements are generally rigid and of long duration where both parties confront evolving needs and subjective expectations. To this degree, the principle of proportionality assists with the balancing of these interests, and in itself is not a radical idea. It finds support in the early initiatives for contractual flexibility and good faith and, as a result, is best served by taking at its core the conduct of the parties in the negotiation process.
Keywords: proportionality, oil-and-gas, human rights
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