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Max Planck Encyclopedia of International Procedural Law [MPEiPro]

Plea of Illegality: Investment Arbitration

Julien Chaisse

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 19 April 2021

Subject(s):
Principle of legality — Admissibility — Arbitration, procedure — Arbitration

Published under the direction of Hélène Ruiz Fabri, with the support of the Department of International Law and Dispute Resolution, under the auspices of the Max Planck Institute Luxembourg for Procedural Law.

1 Myriads of investment treaties require foreign investments to be made in accordance with or in conformity with the laws and regulations of the host State; this is known as a legality clause (Petersmann, 2019). The purpose of a legality clause is to limit the scope of an international investment agreement’s protection to only those investments that have been made in accordance with the laws of the host State (Protected Investment). A treaty’s inclusion of a legality clause or lack thereof may impact a tribunal’s assessment of whether or not to treat legality of...
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