Document Type : Article

Authors

1 Ph.D. Candidate in International Commercial & Investment Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran

2 Associate Professor, Department of Private Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran

3 Visiting Professor of Private Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran

Abstract

Given the role of causation in international investment law, which acts as an intermediary between the liability of host states and the quantum of damages, the causal link is of great importance in international investment disputes. Therefore this article focuses on factual causation to firstly identify factors that, despite the responsibility of a state for committing a wrongful act can be considered as the sole cause of an investor's injury and secondly, to seek an accurate test for establishing the causal link in case of concurrent causation. Concerning factors affecting causation, this article concludes that the investor's bad business judgment, the general economic situation of the host state, and bona fide third parties can be regarded as factors that can break the causal link between the wrongful act and injury. Regarding the criteria for establishing factual causation, this article, considering the possibility of human intervention factor between the breach of treaty and investor's loss, recommends that in case of concurrent causation, arbitral tribunals employ the "NESS" test instead of the "but-for" test, because the former can better help the tribunals in determining the factual causes of harm.

Keywords

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