Investor’s rights in the context of economic sanctions

Available in Russian

Author: Molohoeva Tuyana

DOI: 10.21128/2226-2059-2016-2-95-107

Keywords: investment arbitration; investment treaties


The present article considers possibility of resort to international investment arbitration under bilateral and multilateral investment treaties in order to protect the rights of private parties against economic sanctions in the form of freezing of assets, with the focus on those imposed as a part of other economic and political measures against Russia. It reviews jurisdictional conditions of resort to investment arbitration, including definitions of investor (jurisdiction rationae personae) and investment (jurisdiction rationae materiae), as well as relevant standards of protection that can be invoked by a person under the sanctions. Particularly, it is argued that freezing of assets may be contrary to fair and equitable treatment standard and under certain circumstances may constitute expropriation. It is noted that a main counterargument that can be used by a State is reference to countermeasures taken in response to violation of international law as a circumstance precluding wrongfulness, while the possibility of countermeasures erga omnes is still arguable. In an attempt to resolve the issue of correlation between State’s right to take countermeasures and investors’ rights under investment treaties, the article considers the nature of investor’s rights with the reference to relevant arbitral practice. The author argues that investors have direct material rights under investment treaties (while existence of State’s rights under those treaties is also not excluded) and reference to countermeasures may not justify violations of obligations to investors resulted from sanctions. At the end the author comes to the conclusion that under certain conditions, a resort to international investment arbitration may potentially be an effective remedy to protect the rights private parties, which have been violated by imposed economic sanctions.

About the author: Tuyana Molokhoeva – Ph.D. student, International Law, Lomonosov Moscow State University.

Citation: Molokhoeva T. (2016) Prava investora v kontekste ekonomicheskikh sanktsiy [Investor's rights in the context of economic sanctions]. Mezhdunarodnoe pravosudie, no.2, pp.95–107. (In Russian).


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