Between Succession And Sovereignty: The Fate Of Bilateral Investment Treaties When States Break Apart
- IJLLR Journal
- 4 hours ago
- 2 min read
Srishti Pandey, B.A. LL.B. (Hons.), National Law University, Jodhpur
Vedika Diwan, B.A. LL.B. (Hons.), National Law University, Jodhpur
ABSTRACT
The proliferation of state fragmentation, through secession, dissolution and separation, has generated a persistently unresolved question in public international law. What happens to bilateral investment treaties [“BITs”] when the state that concluded them ceases to exist in its original form? Despite a rich body of treaty practice and investment arbitration awards, the law governing succession to BITs remains deeply contested. Neither the 1978 Vienna Convention on Succession of States in Respect of Treaties [“VCSST”] nor customary international law provides a definitive and universally accepted answer. The result is a legal landscape in which successor states, foreign investors and arbitral tribunals must navigate competing doctrines such as that of automatic succession, the clean slate rule and various intermediate frameworks of tacit consent. The problem still remains as there is no settled answer to which doctrine applies conclusively.
This paper investigates this central legal question that under what conditions, and through what mechanisms, does a bilateral investment treaty concluded by a predecessor state bind a successor state arising from secession? The analysis here is twofold. First, that there is no settled customary rule of automatic succession to bilateral treaties and that the tabula rasa principle, despite being politically disfavoured in investment treaty practice, retains greater doctrinal coherence for bilateral instruments than is commonly acknowledged. Second, and more constructively, that the absence of an automatic rule does not produce a legal vacuum, rather, a sufficiently developed framework of tacit consent, the critical date doctrine and the protection of vested investor rights collectively provides tribunals with adequate tools to resolve succession disputes.
The paper proceeds in four parts. Part I surveys the foundational doctrinal framework, examining the VCSST, the Vienna Convention on the Law of Treaties [“VCLT”], and the competing schools of thought that have emerged. Part II analyses the arbitral jurisprudence on BIT succession arising from the dissolution of Czechoslovakia, the break-up of the former Soviet Union, and the fragmentation of the former Yugoslavia, drawing out the doctrinal patterns that emerge from these episodes. Part III addresses the role of tacit consent and state conduct such as diplomatic notes, the treatment of sister treaties, state silence, and official communications as mechanisms through which succession may be established without express agreement. Part IV examines the intersection of succession law with the protection of vested investor rights, the critical date doctrine and the argument that commercial stability in international investment relations provides an independent basis for treaty continuity. The paper concludes that the most defensible approach is neither automaticity nor clean slate, but a contextualised presumption of continuity that should be rebuttable by clear, pre-dispute evidence of a successor state’s contrary intent.
Keywords: VCSST, succession, critical date doctrine, acquired rights.
