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Document Type

Essay

Abstract

In light of the increase in investor-state disputes brought by foreign investors under the arbitration clauses contained in international investment agreements (“IIAs”), treaty negotiators have started to develop safeguards in recent IIAs in an attempt to mitigate the impact of these agreements on their regulatory powers. General exception clauses modeled on Article XX of the General Agreement on Tariffs and Trade are part of these new treaty provisions. General exceptions clauses are, in their current form, a source of uncertainty rather than coherence. Recent arbitration cases have shed light on the unworkable enforceability requirements contained in general exceptions clauses, preventing, in most cases, these clauses from being successfully implemented. While narrowing the scope of the standards of protection contained in IIAs may be a more effective path to improve the balance between protection of foreign investors’ rights and outcomes that promote good governance and sustainable development, general exception clauses may nonetheless justify in very specific circumstances conduct that would otherwise represent a violation of the applicable IIA, in spite of the many interpretive issues contained therein.

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