“The Era of COVID-19: Restrictive measures of states and the claims of foreign investors”

Moscow Journal of International Law (Issue 1, 2022) has published an article by Senior partner Ilya Lifshits and lawyer Anastasia Shatalova “The Era of COVID-19: Restrictive measures of states and the claims of foreign investors”.

The authors analyze the possibility of treatment of restrictive measures taken by States as self-judging clauses, as well as the possibility of applying Article 25 (necessity) of the Articles on Responsibility of States for Internationally Wrongful Acts as the circumstances precluding the wrongfulness. It is stated that it is undesirable to treat states’ measures as self-judging clauses, since such a treatment will provide States with too wide opportunities for exemptions from the international investment protection regime. At the same time the treatment of public health protection and prevention of economic (financial) crisis as an essential interest that the state safeguards against a grave and imminent peril is controversial for the purposes of applying art. 25 of the Articles on Responsibility.

The authors propose to establish certain standards or principles that may be used by investment tribunals in the course of proceedings in order to assess measures taken by States. These principles are legality and proportionality, consistency with the purpose and non-discrimination. The principles can be interpreted with respect to the case law of investment tribunals for disputes on the limitation of fundamental human rights and freedoms (the right to health protection and the right to a favorable environment). The principles can be consolidated in the model protocol to investment treaties (Memorandum of Understanding), developed under the auspices of UNCITRAL.

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