Abstract
The potential conflict between the protection of the host state’s rights and the protection of the foreign investor’s rights exists in international investment treaties in nature. Traditionally, investment treaties were regarded as instruments to protect the foreign investors as well as instrument to limit the host state’s regulatory space. This view had directly leaded to the result that some investment tribunals made their decisions unjustly and unfairly, simply in favour of the investor without considering the protection of the core public interests of the host country. The possibility of be bitten by the investment treaty had already attracted the interest of many scholars and researchers. Nowadays, it is a common understanding that the promotion and protection of investment should not be reached at the cost of the damage of the host state’s public interests.This thesis studies a powerful instrument to protect the host state’s right to regulate which has become more and more popular in recent investment treaties—the Non-Precluded Measures clause (NPM clause). The research focuses on the following: (i) why should the host states include a NPM clause in its investment treaties; and (ii) how could the host state invoke the NPM clause to protect its right to regulate in an investor-state dispute.
In practice, host states have various options to safeguard their regulatory rights in investor-state disputes. Among these choices, the NPM clause has its own significance. Firstly, as a treaty provision, the NPM clause is explicitly provided in the investment treaty, and is more enforceable and predicable than the state of necessity in international customary law. Secondly, comparing with other instruments to protect public interests in international investment treaties, as an exception, the NPM clause offers a stronger protection by explicitly allowing the host state to adopt measures that are otherwise inconsistent with other treaty provisions. In other words, a qualified non-precluded measure is a lawful measure under the investment treaty, and the host state needs not to pay any compensation for the adoption of such a measure.
Nevertheless, the adoption of a non-precluded measure is not without any restriction. NPM clauses usually set out various conditions which must be met by the host country. These conditions including but not limited to: the ‘objective’ requirement, the ‘nexus’ requirement, the ‘manner’ requirement, and the ‘notification’ requirement. The conditions effectively prevent the host country from abusing this particular kind of provision to avoid its obligations under the investment treaty. To make a successful NPM defence, the host country must be able to prove that the application of the measure had met all the requirements set out in the particular NPM clause in issue.
The thesis applies the methodology of treaty study and case study. Considering the lack of jurisprudence at presence, a large part of the research is occupied by the treaty study based on 524 recent Bilateral Investment Treaties (BITs) available in the United Nations Conference on Trade and Development (UNCTAD) database. The thesis studied the NPM clauses in these treaties, examines their texts, structures and contents. Meanwhile, this thesis also studies the existing NPM case as well as the related World Trade Organization (WTO) case on the parallel general and security exceptions to clarify the scope and interpretation of the particular kind of provision.
This thesis endeavours to analyse the framework the NPM clause operates and to provide a clear guideline for the host state on why and how to invoke the particular kind of treaty provision to protect its right to regulate in an investor-state dispute. Considering the widespread the NPM clause in the new generation of investment treaties, it is foreseeable that the NPM clause will play an important role the future development of international investment law.
| Date of Award | 29 Aug 2017 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Wenwei GUAN (Supervisor) |