The Use of Force Majeure in International Investment Law in the Aftermath of the COVID 19 Pandemic

ABSTRACT

Force majeure is today accepted as a fairly classical topic and the circumstance, excluding wrongfulness of the state doing in majority of the world legal systems and the level of its use increased considerably in the last decade. The coronavirus pandemic has enlivened the concept of force majeure in many areas of law, including international investment law. It also proved to be a good source of an ongoing debate on importance of force majeure for international investment and commercial community. This article is an attempt to inform this debate. Except for a general introduction to the use of force majeure exception in relation to the COVID 19 pandemic, this study presents an expansion of its applicability in international investments area within the frame of the CIL, as well as an increase of use of the contractual force majeure clause in the energy sector. Equally, it is going to indicate the reasons of its practicability together with three inferences with regard to the application of force majeure under Article 23 of the ILC Articles, as well as the application of the contractual force majeure clause both in common law and civil law. First, it is no hearing on the grapevine, but the use of contractual force majeure has been heavily recommended in order to secure foreseeability, prudence and a legal certainty. Second, while the force majeure exception is being applied under the CIL mainly in IIAs, wise foreign investors may apply also the contractual force majeure clause in their investment contracts, concluded directly with their host states, while being propped up conveniently also with the supporting governing law of the contract. Besides, there is no reason to induce the civil law contractual parties to apply the common law force majeure clause with always available common law exceptions of impossibility, frustration and impracticability, as they are unknown to the civil law system. © 2022, Institute of State and Law of the Slovak Academy of Sciences. All rights reserved.