Denunciation, termination and survival: the interplay of treaty law and international investment law

Recent developments in relation to the termination of international investment agreements (IIAs) raise a number of issues at the intersection of treaty law and investment law. This article examines some of the key aspects of treaty law as they relate to the termination of IIAs. The article addresses recent state practice in relation to the denunciation of or withdrawal from multi-party treaties related to investment including the ICSID Convention and the Energy Charter Treaty, leading to complicated questions about the effective date of termination and the implications for new or ongoing investment claims. The article also examines the unilateral termination of bilateral treaties, for example by South Africa and Indonesia, and the mutual termination of such treaties, for example within the European Union and as a result of conclusion of newer treaties such as the Trans-Pacific Partnership. In this regard, the article considers the consequences of sunset clauses, introduced because of the longterm nature of foreign investments, which can make it harder for States to extract themselves from investment obligations. These developments highlight the importance of clarity in drafting termination clauses and agreeing to terminate an IIA, so as to avoid disputes about the impact of a survival clause or its interaction with general treaty law.