Non-precluded measures (NPM)‎ in Bilateral investment treaty (BIT)‎ : an appraisal study

Abstract EN

Non-precluded measures (hereinafter NPM) clauses have become a problematic in the modern international investment regime.

As an integral aspect of attempts to recalibrate the publicprivate balance in investment treaties, these clauses are intended as a corrective to the proinvestor interpretations of early arbitral tribunals.

They provide for the primacy of public policy over investment protection standards under certain conditions.

This paper attempts to identify the proper way in the drafting of NPM clauses and identify their common elements.

It will examine the terms that must be met in order that host states can have resort to them, as well as the role that is provided or denied to arbitrators in circumscribing the suitability of an impugned measure in relation to the objective being pursued.

Furthermore, recent investment arbitrations have pointed out the latent interpretive ambiguities that can be in NPM clauses.

In fact, it will be argued that while NPM clauses do raise some difficulties with respect to extending the policy space of contracting parties, they are slightly effective in ensuring that public policy is a permanent feature of arbitrators' matrix of decisionmaking.