Variations on a Theme: Comparing the Concept of 'Necessity' in International Investment Law and WTO Law

72 Pages Posted: 4 Oct 2012 Last revised: 21 Apr 2015

See all articles by Andrew D. Mitchell

Andrew D. Mitchell

Faculty of Law, Monash University

Caroline Henckels

Monash University - Faculty of Law

Date Written: October 1, 2012


The concept of ‘necessity’ is used in many legal systems to delimit permissible measures from prohibited measures where such measures negatively affect the regime’s primary values, such as human rights, liberalized trade, and unimpeded use of an investment. International investment tribunals have adopted a variety of approaches to the question of whether a host state measure is ‘necessary’ to achieve its objective in relation to a number of provisions of investment treaties, including non-precluded measures clauses and fair and equitable treatment. Yet their approaches to this form of analysis are inconsistent and generally not analytically robust. By comparison, WTO tribunals have developed relatively sophisticated methods for analyzing a measure’s necessity to achieve its objective in the context of general exceptions, sanitary and phytosanitary measures and technical regulations. The WTO approach generally takes into account a number of factors including the importance of a measure’s objective, a measure’s effectiveness at achieving that objective, and the availability of alternative measures. Importantly, WTO tribunals generally undertake this analysis with a degree of deference, in recognition of states’ right to set their own policy priorities. Investment tribunals could usefully employ aspects of the WTO approach to necessity in the context of both non-precluded measures and the positive obligations of fair and equitable treatment, non-discrimination and non-expropriation. Such an approach would go some way toward the development of a consistent, coherent body of cases in relation to the concept of necessity in international investment law, providing greater certainty for both host states and investors.

Keywords: necessity, international law, international investment law, WTO law, non-precluded measures

JEL Classification: K33

Suggested Citation

Mitchell, Andrew D. and Henckels, Caroline, Variations on a Theme: Comparing the Concept of 'Necessity' in International Investment Law and WTO Law (October 1, 2012). (2013) 14 Chicago Journal of International Law 93-164, Available at SSRN:

Andrew D. Mitchell (Contact Author)

Faculty of Law, Monash University ( email )

Wellington Road
Clayton, Victoria 3800

Caroline Henckels

Monash University - Faculty of Law ( email )

15 Ancora Imparo Way
Clayton, Victoria 3800

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