In the era of emerging political conflicts, it has become clear that international law, as it currently stands, does not always provide a neat setting for resolving the variety of disputes which clients may face. This is mainly because there is limited scope for compulsory jurisdiction in international law; or to put it simply, there is no international court of general jurisdiction which can solve all international controversies unless such controversies are covered by the dispute resolution clause contained in an international treaty or the parties’ agreement.
The situation is further complicated by the fact that international disputes do not come in neat packages, they are usually complex with several matters intertwined, which raises further complications.
Economic sanctions imposed by states (UK, US) and international organisations (EU), being instruments of political pressure, have very tangible real-life consequences when private businesses and individuals oftentimes suffer dramatic economic losses due to the measures imposed. Can these measures be challenged in the international arena?
The current trend is that international courts and tribunals generally do not abstain from resolving disputes involving political controversies, be it economic sanctions or even territorial disputes. In a seminal case of Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), and even before that in the Corfu Channel case, the International Court of Justice stipulated that it “has never shied away from a case brought before it merely because it had political implications”.
This is an important finding as otherwise it would be harder to challenge the legality of economic sanctions in legal proceedings, since sanctions are inherently political in nature and are often adopted as a reaction to highly sensitive international conflicts.
Similarly, in the context of investment treaty arbitration, in the recently published award in DTEK Krymenergo v. Russia, the tribunal found jurisdiction to rule on an investor’s claims even though important matters of international law such as sovereign borders of disputing states were involved.
In conclusion, it would seem that international litigation is quickly becoming an arena for resolving political controversies between states and aggrieved parties. Investment arbitration remains a viable option for private individuals to challenge politically motivated measures and it remains open for the parties to explore the limits of the powers of investment tribunals in their pursuit of justice.
How Gherson can assist
Gherson’s Litigation and Arbitration Team are highly experienced in advising on international litigation and arbitration matters. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.