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International Investment Law


Customary Law

International Customary Law refers to obligations that arise from established state practice and opinio juris rather than from formal agreements such as treaties. 

Scholars disagree about whether a customary investment protection regime ever really emerged, despite the efforts of investment lawyers to devise it. Those who argue that such a regime did emerge claim that the first rules in establishing such protection were:

  1. rules protecting aliens abroad - the application of international protection of aliens abroad gave rise to international litigation which proved instrumental in the development of a mechanism of State responsibility. Customary law on State responsibility for wrongful acts has been codified and adopted by the UN International Law Commission in 2001 as the Articles on Responsibility of States for Internationally Wrongful Acts. 
  2. rules prescribing standards of compensation.

International customary law was superseded to a large extent by the proliferation of investment treaties in the late 1980s and early 1990s. However, many experts claim that customary law is still a significant source of international investment law and has had a resurgence with the basic rules of the investment protection regime achieving customary status. These basic rules include International Minimum Standard, Fair and Equitable Treatment, Protection against Expropriation,  Standards of Compensation, Denial of Justice, and Due Process.

Source: Jean d’Aspremont, 'International Customary Investment Law: Story of a Paradox' in Tarcisio Gazzini, Eric De Brabandere (eds) International Investment Law: the Sources of Rights and Obligations (Martinus Nijhoff, 2012)


For a general historical overview of the development of investment protection see pp 1-73 of the following book: