DENIAL OF BENEFITS CLAUSE IN INVESTMENT TREATIES

Document Type : Research Paper

Authors

1 Associate Professor of Private Law at University of Tehran,Faculty of Law and Political Science

2 Ph.D. student of international trade law at Shahid Beheshti University

Abstract

International investment law now recognizes the right of foreign investors to bring a claim directly against host states. This right is often provided in multilateral or bilateral investment treaties. However, this principle is now under threat by measures known under the term of "Treaty Shopping" taken by investors to take advantage of investment treaties between host states and countries other than national states of investors.in order to benefit from these treaties, investors have devised means to acquire the nationality of states that have signed the target treaty with host states. These conducts are sometimes taken by ingenious investors as well.Host states have designed various means to confront treaty shopping. One of these solutions is drafting treaties in a manner that prevents wrongful benefit of investors without the nationality of states that have signed favourable treaties with host states, before any dispute arises and be taken to arbitration. The insertion of "Denial of Benefits Clause" in investment treaties is one of these methods. This paper seeks to evaluate the efficiency of Denial f Benefits Clause in dealing with treaty shopping and to elaborate the considerations that must be taken into account by host states when including this clause in Investment treaties.

Keywords

References

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Law Quarterly
Volume 48, Issue 1
April 2018
Pages 115-131

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