Police Powers Doctrine: a reliable State Defense in times of Covid-19?

Abstract

As measures taken against the threats of Coronavirus to the public health affect investments in South America and internationally, states are looking for defenses under international law to counter potential Investor-State claims. This article explores whether the Police Powers Doctrine could justify the policy measures taken to protect the public health during the Covid-19 sanitary crisis and avoid the payment of compensation for alleged indirect expropriations. The analysis will first lay out the general application of Police Powers Doctrine under international investment law. To do so, it will mainly investigate the interpretation of the Doctrine in cases relating to the protection of public health. Finally, it will assess the strength of the Doctrine in defending general policy measures taken during the Covid-19 sanitary crisis. The paper argues that, while most measures should qualify under the Police Powers Doctrine, arbitral tribunals might examine additional conditions to accord their legal qualification of an exercise of police powers with the specific facts of a case.