Police Powers in the Sanctions-related Investment Disputes: a Ticket which Costs Good Faith Behavior?

Московский журнал международного права. 2025. No. 1. P. 69–82.

Завершинская Д. А., Боклан Д. С.

This article discusses growing popularity of investment arbitration as a forum for resolving sanctions-related disputes. The crunch point, however, is that so far none of such disputes brought before investment tribunals has resulted in the arbitral award. Thus, investment arbitration, despite its mentioned attractiveness and growing popularity, largely
remains terra incognita for persons wishing to pursue sanctions-related disputes. The authors contribute to this emerging discussion providing analysis of relevant recent case law. The purpose of this Article is to examine how investment tribunals have interpreted good faith as a requirement for a lawful exercise of police powers and to explore how these findings can be used in the sanctions-related disputes from an investor’s perspective. The choice of this topic is based on the hypothesis that governmental officials of the sanctioning state typically accompany the adoption of sanctions
with public statements that can be used by the sanctioned investors to expose the lack of good faith on the part of the sanctioning state and crush the state’s invocation of the police powers. It is these statements that may reveal that a sanctioning state, in the words of the Eskosol tribunal, acts for ulterior purposes.

Ключевые слова: burden of proof, proportionality, good faith, investment disputes