CUSTOMARY LAW IN INVESTMENT REGULATION

Abstract

This article explores the expression of State sovereignty through customary norms in a regulatory space dominated by investment treaties. It argues that, because most of the actionable concepts expressing sovereignty in international law are general (not specific to a “branch”) andcustomary, misunderstanding the role of customary law in investment regulation amounts to confining sovereignty to a few narrow carve-outs and exceptions in investment treaties. However, customary concepts operate autonomously and in parallel to treaties, unless specifically excluded by the latter. The lex specialis principle does not necessarily command the exclusion in toto of relevant customary rules. The article discusses the work of the Institut de Droit International in this regard and then analyses the investment case law relating to the application of the police powers doctrine, necessity, countermeasures and transnational public policy. It shows that failure to address specifically the articulation of treaty and customary norms even in the event the former apply as lex specialis is subtly eroding, without clear legal grounds,the customary expression of sovereignty in foreign investment disputes.