The Non-Precluded Measure Clause in Foreign Investment Treaties: Concept, Bases and Challenges

Governments have recently incorporated foreign investment treaties into a so-called “Non-Precluded Measure Clause ", which permits action contrary to the provisions of the treaty in cases where the protection of essential interests is necessary. In this descriptive-analytical method, this article outlines the most important challenges and explains the ways to eliminate or reduce them. The most important findings of the study indicate that the government's authority in practice was not absolute, but observable. The host government must impartially resort to this clause and is always obliged to respect the good faith towards another party. Despite the disagreement expressed in the liability of the host States, the dominant approach of dispute settlement tribunals is to compensate the investor in proportion to the loss incurred by him. Governments have recently incorporated foreign investment treaties into a so-called “Non-Precluded Measure Clause ", which permits action contrary to the provisions of the treaty in cases where the protection of essential interests is necessary.