Investment Agreements and Financial Crises

The chapter deals with international investment agreements and financial crises. Arbitral proceedings have highlighted the complex and sometimes problematic tension between necessary state measures to address crisis situations and obligations entered into vis-à-vis foreign investors mainly in bilateral investment agreements. After an introduction into the types of pertinent state measures typically taken during financial crises, this chapter describes possible impacts on the rights of investors, the applicable regulatory framework and available legal defences on the part of the state. The contribution focuses on those State measures in financial crises that have led (and might still lead) to some arbitral case law: Argentina, Greece and Cyprus. As a final part, this contribution briefly discusses recommendations aimed at addressing the shortcomings within the current legal framework and practice.