The Life and Death of BITs: Legal Issues concerning Survival Clauses and the Termination of Investment Treaties

This article considers a number of legal issues that arise when states decide to terminate treaties providing protection to foreign investors. This is an area that is governed both by specific provisions in investment treaties, as well as by principles of general international law. The article considers two particular mechanisms that seek to promote legal certainty for investors by limiting the ability of states to peremptorily revoke the protection offered by investment treaties. Firstly, it considers minimum periods of application. Secondly, it analyzes so-called survival clauses, which serve to extend the application of a treaty to established investors for a particular period of time after its unilateral termination. The article compares the scope of these provisions under a variety of investment treaties in order to identify differences in state practice. It also discusses the limits of these mechanisms against the backdrop of general international law. Finally, the article considers whether protection is also available for established investors when both parties to an investment treaty mutually agree to terminate the treaty. In this context, the article looks at the theory of third party rights and its application in the context of investment treaties.