An Analysis On the Subject of Bilateral Investment Treaties Termination

Abstract

Bilateral investment treaties (BITs) are a major subset of international investment agreements, in which two States agree to promote and protect investments made by investors from respective countries. Many States have been willing to give up certain immunities and privileges for perceived economic benefits associated with BITs. In recent years, however, a slew of countries have voiced their dissatisfaction with the current international BIT regime and indicated intentions to terminate their BITs. Most, but not all, are developing countries, Indonesia included. This wave of terminations raises concerns about the stability of BITs and their future, and also questions on whether or not a rule of customary international law in regards to the termination of BITs is currently developing. This article analyses the State practices on BIT terminations in an attempt to further understand their legal effects and underlying causes, and also to discern whether these State practices form a pattern that can lead to the development of a new customary international law.