State Liability for Politically Motivated Conducts in International Investment Law

Authors: Kumari Nisha and Ankush Kejriwal, Students, Alliance University, Bangalore, India



In international law, the countries are required to provide protection to their foreign investors as the nationals are protected in their own countries. In furtherance of this norm, various doctrines and principles were formulated and are implemented. These norms lay down that the country that violates any obligation on its part with respect to foreign investors are liable and are required to make right the violation. The circumstance wherein the states could be held liable is a debatable topic. International investment tribunals have been reported of dealing with cases where the issue at hand is whether the state could be made liable for the acts of its public officials. This includes investors alleging malafide conduct by public officials of the Host State as the basis for a claim, and host States alleging corruption between an investor and host State public officials as a defence. In these contexts, a question arises as to the responsibility of the host State for the conduct of its public officials. Tribunals have so far shown a general reluctance to hold a host State responsible in these circumstances. This article argues that such an approach is not consistent with principles of State responsibility. Instead, the article proposes an approach based on the International Law Commission Articles on State Responsibility that considers, inter alia, the investor's conduct, the host State's conduct and the ostensible capacity in which the corrupt public official has acted. This paper also considers the consequences of the acts of state’s officials, including the host State's ability to invoke the same act as a defence to protect itself.

Keywords: Public Officials, State Responsibility, Host State, Ostensible Capacity.


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