Abstract

This article explores the challenges that investment arbitral tribunals face when investors initiate claims against the imposition of sanctions affecting them. Given the (often) highly politicised context in which such measures are imposed, questions can arise when it comes to the tribunal’s approach to the merits of such disputes. While the depoliticisation of investor-state disputes hypothesis contributes to identifying the aforementioned problem, it does not offer a practical solution. Thus, the article explores the degree of deference that arbitral tribunals are expected to show when reviewing the imposition of restrictive measures on foreign investors. Nonetheless, sanctions regimes pursue varied goals and they do not always seek to safeguard the state’s fundamental interests. Thus, the main argument made here is that arbitral tribunals will likely need to assess at least the aim of the impugned restrictive measures and, in certain situations, the context in which they were adopted - irrespective of the degree of deference that the arbitrators show for the host state’s decisions.

This paper will be part of the second TDM Special Issue on "Sanctions and International Arbitration: Impact on Substantive and Procedural Issues". More information here www.transnational-dispute-management.com/news.asp?key=1960