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Chicago Journal of International Law

Abstract

The concept of "necessity" is used in many legal systems to delimit permissible from prohibited measures where such measures negatively affect the regime's primary values, such as human rights, liberalized trade, and protection of foreign investment. International investment tribunals have adopted a variety of approaches to the question of whether a measure is "necessary" to achieve its objective in relation to a number of provisions of investment treaties, including non-precluded measures clauses and fair and equitable treatment. Yet their approaches to this form of analysis are inconsistent and generally not analytically robust. By comparison, WTO tribunals have developed relatively sophisticated methods for analyzing a measure's necessity to achieve its objective in the context of general exceptions, sanitary and phytosanitary measures and technical regulations. The WTO approach generally takes into account a number of factors, including the importance of a measure's objective, a measure's effectiveness at achieving that objective, and the availability of alternative measures. Importantly, WTO tribunals generally undertake this analysis with a degree of deference, in recognition of the right of governments to set their own policy priorities. Investment tribunals could usefully employ aspects of the WITO approach to necessity' in the context of non-precluded measures, fair and equitable treatment, non-discrimination, and non-expropriation. Such an approach would go some way toward the development of a consistent, coherent bod of cases in relation to the concept of necessity in international investment law, providing greater certainty for both host states and investors.

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