CYIL Vol. 7, 2016

KATARÍNA CHOVANCOVÁ CYIL 7 ȍ2016Ȏ important in maintaining a balance between investment protection and the regulatory power of the host states, much like Article XX of the General Agreement on Tariffs and Trade /GATT/ /the general exceptions clause/…” Within a broader context, NPM clauses may be also extremely practical in new investment treaties in the form of “exceptions”, which secure the right of the host state to promote sustainable development. 12 However, the dictum of the NPM clause must always be treated with caution, at least when it comes to compensation, which has become one of the main concerns of negatively afflicted foreign investors. Equally, dispensing with the duty to compensate proved to be a highly debatable topic for those authors who are less enraptured by the proclaimed effect of the NPM provision, being an exclusion of the duty to provide the foreign investor with appropriate compensation. 13 Furthermore, despite being conceived initially only as an interpretive attempt of rambling investment tribunals, a more onerous conflation of the nature of NPM clauses in BITs with the state of necessity doctrine under the customary international law (“the CIL necessity”) in five ICSID arbitration cases followed. Unfortunately, this paved the way for disparaging of the NPM clauses’ status of lex specialis and that of the primary source of law 14 as plastic enough to be changeable and replaceable by the customary international law, depending on the precarious mood of the deciding arbitral tribunal. To avoid any argument, it is necessary to stress the most recent theoretical accounts disclosing the nature of NPM clauses. It is apparent that NPM clauses are inseparable parts of BITs, while BITs themselves are by nature lex specialis , into which the customary international law should not be freely transplanted a la carte by arbitrators, unless they are obliged to do so specifically by the BIT’s provisions. As Lowenfeld confirms, 15 “The fact that ‘a codification’ of the customary law on this issue is easy to find, and that that codification has been endorsed by the ICJ in an unrelated case, does not….give customary law status superior to the treaty on which the claim is based.” 16 12 MAYEDA, G.: Chapter 22: Sustainable International Investment Agreements: Challenges and Solutions for Developing Countries in CORDONIER SEGGER, M.C., GEHRING M., NEWCOMBE, A. : Sustainable Development inWorld Investment Law, Global Trade Law Series 30, Kluwer Law International, The Hague, 2011. 13 DESIERTO, D.A.: Necessity and Supplementary Means of Interpretation for Non-Precluded Measures in Bilateral Investment Treaties, U. Pa. J. Int’l L. , 2009–2010, Vol. 31, pp. 827-934. 14 See the correct observation of judge Tomka, properly distinguishing between NPM clauses in BITs as substantially different from, though related to the CIL necessity in TOMKA, P.: Defences Based on Necessity, op. cit. , p. 478. 15 LOEWENFELD, A.: International Economic Law , Oxford University Press, Oxford, 2008, p. 583. 16 See in detail Gabcikovo-Nagymaros Project (Hungary/Slovakia) , Judgment of 25. September 1997, I . C. J. Reports 1997, p. 7, para 51.

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