How Pandemics (May) Affect State Defences: Invoking Necessity in COVID-19-Related International Investment Arbitration Cases
The COVID-19 pandemic is affecting every aspect of our daily life, as well as the global economy. In her book chapter, Federica Cristani investigates how the exceptional circumstances of the COVID-19 pandemic may justify state measures affecting foreign investors’ rights under the customary international rule of the necessity defence.
The chapter enquires whether states can rely on the customary rule of the necessity defence. First, the chapter analyses the requirements of the states of necessity, as codified in Article 25 of the International Law Commission (ILC) Draft Article and as interpreted and applied so far by international investment arbitral tribunals. Second, the chapter shows how the requirements of the customary law rule of necessity can be applied to the exceptional circumstances of the COVID-19 pandemic. In particular, it will be shown how the stringent requirements of the customary rule of the necessity defence make it quite challenging to be (successfully) invoked, also in the context of (future) investment disputes arising out of the COVID-19 pandemic.