Issues Relevant to the Termination of Bilateral Investment Treaties

Unlike the umbrella clauses contained in bilateral investment treaties (BITs), the termination clauses and issues relevant to the termination of BITs have not sparked the same level of legal interest. BITs occupy an area in the legal system at the intersection of sensitive political and legal issues and, as such, the process of termination of BITs is not void of its complexities. This article discusses some of the issues of termination of BITs by first setting up a brief background on the termination of treaties. It then focuses on BITs and their termination effectuated pursuant to the provisions of the treaty, before turning to supposed premature termination of BITS. The discussion on damages resulting from improper termination is integrated into the debate on the benefits of renegotiation over termination. New econometric studies are more conclusive on the impact of BITs on economic growth in the host states. In this politically sensitive area, when combined with the complex political and legal considerations, the ideal of the survival of the relationship after a termination seems to be the preferred choice.