2.1. Fundamental change of circumstances and supervening impossibility of performance (Articles 62 and 61 VCLT)

The major antagonist to the pacta sunt servanda rule (Article 26 VCLT) is Article 62 VCLT (fundamental change of circumstances). In view of its apparent danger to stable treaty relations, the ILC attempted to frame the rebus sic stantibus doctrine as restrictively as possible.Footnote ⁹ Article 62 VCLT is termed as double negative – ‘may not be invoked . . . unless’ – and thus allows for denunciation only in the most exceptional situations.Footnote ¹⁰ It requires that the change of circumstances was not foreseen by the parties; that the circumstances constituted an essential basis for the parties’ consent to be bound by the treaty; and that the obligations still to be performed have been radically transformed by the change. In addition, states may not rely on Article 62 VCLT in cases of boundary treaties or when the fundamental change results from the invoking party's breach of the treaty or of an international obligation.

Article 61 VCLT is termed most restrictively as well. A state may denunciate a treaty in accordance with Article 61 VCLTFootnote ¹¹ when compliance with treaty obligations is rendered impossible because of the destruction or permanent disappearance of an object which is indispensable for the execution of the treaty.Footnote ¹² In addition, a breach of international law (of the treaty or any other international obligation) excludes the invocation of supervening impossibility of performance in accordance with Article 61(2) VCLT by the state which has committed the breach.

2.2. State practice and jurisprudence

The provisions’ focus on treaty stability is reflected in the scant state practice and jurisprudence.Footnote ¹³ At first, states have rarely relied on the rebus sic stantibus doctrine as enshrined in Article 62 VCLT; and if they have, reliance has mostly been rejected. In the Fisheries Jurisdiction case, Iceland submitted that ‘because of vital interests of the nation and owing to changed circumstances the Notes concerning fishery limits exchanged in 1961 [were] no longer applicable’.Footnote ¹⁴ The ICJ, however, saw no radical transformation of the extent of the obligations still to be performed. Moreover, the dispute was of exactly the character anticipated in the compromissary clause in the exchange of notes.Footnote ¹⁵ Likewise, the ICJ rejected Hungary's attempt to rely on Article 62 VCLT to derogate from its treaty obligations with Slovakia concerning the Gabčíkovo-Nagymaros dam project.Footnote ¹⁶ The ICJ based its rejection on the fact that the political and economic changes after the end of the Soviet Union and the progress in environmental knowledge brought forward by HungaryFootnote ¹⁷ were not sufficiently linked to the object and purpose of the 1977 treaty, and that the treaty provided for mechanisms to take account of subsequent developments in environmental law.Footnote ¹⁸

In fact, the invocation of a fundamental change of circumstances only seems to have been accepted once by an international tribunal. In the Racke case, the European Community relied on a fundamental change of circumstances to justify suspending the co-operation agreement with the former Yugoslavia because of the war there, a decision subsequently upheld by the ECJ. The ECJ, however, adopted a low level of scrutiny and merely stated that the Council had not made a ‘manifest error of assessment’ when suspending the agreement.Footnote ¹⁹ In state practice, The Netherlands relied on a fundamental change of circumstances in 1982 to suspend a treaty on development co-operation with Suriname because of human rights violations following a coup d'état. Footnote ²⁰

Given its demanding conditions, not astonishingly, reliance on Article 61 VCLT also has been limited. As of January 2012, supervening impossibility of performance as enshrined in Article 61 VCLT had only twice been dealt with by an international tribunal and had never been accepted. In LAFICO v. Burundi, Burundi argued – after the severance of diplomatic relations and its expulsion of a holding company's senior managers – that implementation of the 1975 Agreement between Libya and Burundi (which inter alia provided for the establishment and functioning of the holding company) had become impossible.Footnote ²¹ In the Gabčíkovo-Nagymaros case, Hungary held that the essential object of the 1977 treaty with Slovakia, an economic joint venture consistent with environmental considerations, had permanently disappeared, and that it was therefore impossible to perform the 1977 treaty. Both the arbitral tribunal and the ICJ rejected the claims because Article 61(2) VCLT prohibited reliance on an impossibility of performance that resulted from the respective states' breach of treaty obligations.Footnote ²²

2.3. Procedures (Articles 65 et seq. VCLT) and legal consequences of reliance (Articles 70 and 72 VCLT)

The procedures governing reliance on Articles 61 and 62 VCLT are complex and long. They are laid down in Articles 65–8 VCLT as well as in an Annex to the VCLT.Footnote ²³ Any invocation has to be notified to the other treaty parties in written form.Footnote ²⁴ Objections can be filed, except in cases of special urgency, within three months of the denunciation notification.Footnote ²⁵ In such cases, a solution must be sought through the means of peaceful dispute settlement (e.g., negotiations, third-party mediation).Footnote ²⁶ If no solution is found within a year of notification of the objection, treaty parties may set in motion the procedure of the AnnexFootnote ²⁷ and request the establishment of a Conciliation Commission, which then has another 12 months to submit its (non-binding) recommendations.

Despite their complexity, the VCLT's procedures only marginally protect the interests of the other treaty parties and their trust in due performance of treaty obligations. Dispute settlement and the reconciliation of opposing views are in the forefrontFootnote ²⁸ and time periods are short, especially when the treaty parties do not intend to object to the denunciation or suspension. This leaves them little time to prepare for the lapse of the treaty. What is more, it is doubtful whether even these limited procedural obligations constitute customary international law.Footnote ²⁹

Also, the legal consequences in case of a successful reliance on Articles 61 or 62 VCLT appear rudimentary and deficient. Article 70 VCLT deals with the consequences of a treaty's termination; Article 72 VCLT with the consequences of its suspension.Footnote ³⁰ The VCLT thus only establishes a binary system – termination/suspension or continuance in force. Renegotiation or the treaty's adaptation to the changes by an independent third body are not foreseen. Even though non-inclusion of these options was done for good reasons,Footnote ³¹ this merely leaves little room for mitigation. Moreover, the effects of termination (or suspension) look forward and end/suspend the treaty relationship ex nunc, i.e., pro futuro. Article 70 VCLT,Footnote ³² for instance, merely states that termination releases the parties from their obligation to further perform the treaty.Footnote ³³ It does not deal with compensation or other forms of adjustment of the treaty parties’ positions in case of denunciation,Footnote ³⁴ and thus fails to address possible inequalities caused by a partial performance of one party prior to termination.Footnote ³⁵

2.4. Résumé

The general law of treaties – the VCLT's termination/suspension regime – offers only limited and very general solutions for the accommodation of change. Most importantly, Articles’ 61 and 62 VCLT substantive criteria of application are most restrictive. While this acknowledges the crucial importance of treaty stability for the functioning of international relations, termination/suspension and according reactions to change are only most rarely possible. What is more, the broad and subjective elements of Article 62 VCLT give rise to legal insecurity, though this is mitigated through the provision's negative wording. Its vague and ambiguous terms, ‘fundamental change of circumstances’ whose existence constituted an ‘essential basis of the consent of the parties to be bound by the treaty’ and whose effect is to ‘radically transform the extent of obligations still to be performed under the treaty’ – were criticized accordingly.Footnote ³⁶ Problems of interpretation likewise arise from subjective elements such as the requirement that the change ‘was not foreseen by the parties’. Lissitzyn, for instance, states that Article 62 VCLT ‘results in a piling up of subjectivities rather than their diminution’ and criticizes that ‘an allegedly “objective” rule of law may be cast in such general and vague terms that it leaves room for wide difference in subjective appreciation of their meaning. . . .’Footnote ³⁷ The margin of appreciation left for interpretation seems especially problematic given the lacking institutionalized mechanism or compulsory body with the competence to decide upon the application of Article 62 VCLT with binding force.Footnote ³⁸ It is further aggravated through the broadly termed legal consequences of termination (suspension) under general international law. While this generality is understandable in view of the provisions’ necessary applicability to a variety of situations, it seems at odds with legal certainty and predictability which, being essential for stable treaty relations, should govern any derogation from treaty obligations.

3.1. State of necessity and force majeure (Articles 25 and 23 of the ILC Articles)

The most often employed possibility to derogate from treaty obligations under the law of state responsibility is the necessity defence. The availability of the necessity defence to temporarily derogate from treaty obligations without it posing a danger to treaty stability is rather recent. In traditional international law, the dictum ‘necessity knows no law’ seemed of some truth. Necessity was viewed as inherent in the ‘right to self-preservation of a state’, especially in older state practice. Its conditions for application – given the fundamental nature of state interests at stake – were considered to be necessarily broad.Footnote ³⁹ Obviously, such a liberally understood necessity concept presented a danger to the pacta sunt servanda rule. Only the 2001 ILC Articles on State ResponsibilityFootnote ⁴⁰ achieved a welcome legalization and ‘domestication’ of the necessity defence. The ILC incorporated ‘necessity’ as Article 25 (former Article 33)Footnote ⁴¹ in Chapter V (Circumstances Precluding Wrongfulness) and subjected it to such stringent conditions that the defence would be only exceptionally available. Necessity, as codified in Article 25 of the ILC Articles, is generally considered to be a rule of customary international law.Footnote ⁴²

Article 25 of the ILC Articles imposes stringent requirements.Footnote ⁴³ A state may preclude the wrongfulness of non-performance of its treaty obligations only under condition that reliance on necessity is necessary to safeguard an essential interest against a grave and imminent peril. The ILC Commentary explains that the likelihood of danger must be objectively established and more certain than merely possible.Footnote ⁴⁴ Reliance on necessity will be precluded if other (lawful) means are available, even if more costly or less convenient.Footnote ⁴⁵ Any measures beyond strict necessity are not covered.Footnote ⁴⁶ Furthermore, in accordance with Article 25(1)(b) of the ILC Articles, the conduct in question must not seriously impair the interest of the state(s) to which the obligation is owed or of the international community as a whole. The ILC Commentary states that ‘the interest relied on must outweigh all other considerations, not only from the point of view of the acting state but on a reasonable assessment of the competing interests.’Footnote ⁴⁷ Article 25(2) further limits reliance on necessity when the international obligation in question excludes (explicitly or implicitly) the invocation of necessity, or when the state has (substantially) contributed to the situation of necessity.Footnote ⁴⁸ Finally, necessity can never justify derogation from peremptory norms.Footnote ⁴⁹

Also the plea of force majeure, the law of state responsibility's second option to react to subsequent changes, is only available most exceptionally.Footnote ⁵⁰ In accordance with Article 23 of the ILC Articles, the wrongfulness of a non-performance of treaty obligations is precluded where an irresistible force or an unforeseen event beyond the control of the state makes the performance materially impossible.Footnote ⁵¹ The conduct of the state must be involuntary or at least not involve an element of free choice.Footnote ⁵² Likewise, Article 23 does not cover situations where the performance of the obligation has merely become more burdensome.Footnote ⁵³ In addition, the state invoking force majeure may not rely on the doctrine when it has created the instigating situationFootnote ⁵⁴ or when it has assumed the situation's occurrence.Footnote ⁵⁵ Situations brought about by the neglect or default of the implicated state are thus not covered by Article 23, even if the resulting breach (of treaty) was accidental or unintended.Footnote ⁵⁶

3.2. State practice and jurisprudence

Given the provisions’ restrictive criteria of application, it comes as no surprise that reliance on the state of necessity as well as on force majeure has been scarce. In the Gabčíkovo-Nagymaros case, Hungary invoked the necessity defence, arguing mainly ecological imperatives and the threat that the dam project posed to the health of the population as it endangered Budapest's supply of drinking water.Footnote ⁵⁷ The ICJ rejected Hungary's reliance on the defence, however, largely on the basis that there was no grave and imminent peril as the consequences were long-term and insecure,Footnote ⁵⁸ and that Hungary had other means to supply Budapest's population with drinking water, even though possibly more expensive.Footnote ⁵⁹ The necessity defence was also rejected by arbitral tribunals in the Rainbow Warrior Footnote ⁶⁰ and LAFICO cases,Footnote ⁶¹ by the International Tribunal for the Law of the Sea in the M/V Saiga case,Footnote ⁶² and by the ICJ in its Advisory Opinion on the Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory.Footnote ⁶³

The most comprehensive application of the necessity defence so far was in the context of Argentina's financial and economic crisis in the late 1990s and early 2000s in which the Argentine government, in order to address the crisis, derogated from certain obligations it had undertaken vis-à-vis foreign investors. Following the crisis, approximately 40 cases have been brought against Argentina.Footnote ⁶⁴ Out of these, 12 cases – 10 ICSID (CMS,Footnote ⁶⁵LG&E,Footnote ⁶⁶Enron,Footnote ⁶⁷Sempra,Footnote ⁶⁸Continental Casualty Company,Footnote ⁶⁹Metalpar SA and Buen Aire SA,Footnote ⁷⁰Suez,Footnote ⁷¹Total, Footnote ⁷²Impregilo Footnote ⁷³ and El Paso Footnote ⁷⁴) and two UNCITRAL (BG Footnote ⁷⁵ and National Grid Footnote ⁷⁶) – had been decided as of January 2012.Footnote ⁷⁷ All tribunals addressed the impact of an economic emergency on host-state obligations at length.Footnote ⁷⁸ Still, only the LG&E and the Continental Casualty tribunals accepted Argentina's reliance on the necessity defence,Footnote ⁷⁹ whereas the other tribunals rejected Argentina's claim.

Situations allowing for the force majeure defence (Article 23 of the ILC Articles) have hardly ever been recognized by international tribunals. The Rainbow Warrior tribunal rejected France's reliance to justify the removal of its officers from Hao for health purposesFootnote ⁸⁰ with the argument that situations which make performance merely more burdensome were not covered by force majeure.Footnote ⁸¹ In LAFICO v. Burundi, the Arbitral Tribunal declined the plea of force majeure because Burundi had induced the situation in question.Footnote ⁸² So did the ICSID tribunal in Aucoven v. Venezuela. Footnote ⁸³ Venezuela had argued force majeure to justify non-compliance with its obligations under a concession agreement – they had increased the toll rates for the operation of a motorway – on the ground of public opposition to the increase in the tolls and related civil unrest.Footnote ⁸⁴ This was denied on the basis that the civil unrest had not been completely unforeseeable due to similar occurrences in 1989 after a rise in the petrol price.Footnote ⁸⁵ Opposite decisions in comparison with the overwhelming rejection of the defence can only be found in the jurisprudence of the Iran–US Claims Tribunal, which regularly accepted force majeure conditions with respect to the revolutionary situation in Iran between December 1978 and February 1979.Footnote ⁸⁶

3.3. ‘Procedure’ and legal consequences of reliance (Article 27 of the ILC Articles)

The ILC Articles do not establish any explicit procedures governing reliance on necessity or force majeure. The circumstances precluding wrongfulness function, with Crawford, ‘as a shield rather than as a sword’Footnote ⁸⁷ and may be relied upon by a state to protect itself against allegations of otherwise unlawful conduct.Footnote ⁸⁸ Reliance is thus more flexible than under the law of treaties, with the circumstances precluding wrongfulness enabling faster and more expedient reactions to subsequent change. At the same time, their procedural informality leaves the other treaty parties little to no time to prepare for a party's derogation in reliance on necessity or force majeure. The ensuing legal insecurity may prove detrimental to the stability of treaty relations.

Also the legal consequences of a successful reliance on Articles 23 or 25 of the ILC Articles differ as compared with those of the law of treaties. A successful invocation of force majeure or necessity does not permanently affect the treaty relationship but only temporarily excuses non-performance while the circumstance in question subsists.Footnote ⁸⁹ The issue of compensation is left open: Article 27 of the ILC Articles, which generally deals with the legal consequences of invoking circumstances precluding wrongfulness, is formulated as a ‘no prejudice clause’, inter alia as regards compensation.Footnote ⁹⁰ However, international practice points toward a duty to compensateFootnote ⁹¹ and the overwhelming majority of doctrine argues in favour of compensation in case of a successful reliance on the necessity defence.Footnote ⁹² The extent of compensation depends on the circumstances of the case but is still narrower than the concept of ‘damage’ in instances of breaches of an international obligation.Footnote ⁹³ In cases of a successful reliance on force majeure, at times, ex gratia compensations are awarded.Footnote ⁹⁴ Especially this possible adjustment of the treaty parties’ positions by means of compensation goes further than the law of treaties. In the long term, it may give raise to a – cautious – flexibilization in the application of the necessity defence.

3.4. Résumé

Doubtless, the different functioning of the circumstances precluding wrongfulness as regards procedures and legal consequences of reliance increases the range of options at the disposal of states to react to subsequent changes.Footnote ⁹⁵ This notwithstanding, necessity and force majeure only most exceptionally allow for the accommodation of change. The defences’ restrictive wording makes them limited means of last resort. While this – positively – serves treaty stability, it leaves states little room for reactions to change. What is more, in particular the investment tribunals’ contradictory decisions in the context of the Argentine crisis highlight the problematic elements of the necessity defence, the primary ‘flexibility device’ of the law of state responsibility in extreme situations. At first, the ‘contribution’ element – requiring that a state must not have (substantially) contributed to a crisis for reliance to be permissible – poses difficulties, especially when applied to internal situations, such as economic emergencies or civil unrest. Since a state frequently contributes to such crisis situations (e.g., through its economic policy), the ‘contribution’ element regularly prevents derogation from treaty obligations and hinders the adoption of measures against the crisis.Footnote ⁹⁶ Likewise, the ‘only-means’ criterion is problematic, since its traditionally strict understanding implies that the mere existence of several ways out of a crisis prevents reliance on Article 25 of the ILC Articles.Footnote ⁹⁷ As, especially in more complex situations, such as financial/economic emergencies or civil unrest, different remedies may usually be taken against a crisis, an according derogation from treaty obligations seems de facto excluded.Footnote ⁹⁸ Thus, reliance on the mechanisms of general international law may be problematic for a variety of reasons. It is only exceptionally possible, even in extreme situations of change. Which warrants a turn to specific treaty regimes.

4.1. Termination/withdrawal clauses in selected treaty regimes

The most important treaties in the GATT/WTO regime allow for denunciation. Article XV of the Agreement establishing the WTO (WTO Agreement) provides for withdrawal which is to take effect six months after the notice of withdrawal is submitted. Though the General Agreement on Tariffs and Trade (GATT) as part of the WTO Agreement cannot be separately denounced any more and its withdrawal provisions have therefore become redundant, Article XXXI GATT contains a similar exit clause with the denunciation becoming effective after six months.Footnote ¹⁰⁰ Neither the GATT nor the WTO Agreement establish substantive criteria as preconditions for withdrawal.

In the international law of investment, given the absence of a multilateral investment agreement, the termination provisions of more than 2,800 bilateral investment treaties (BITs) are at stake.Footnote ¹⁰¹ Various model BITs facilitate the complex task of comparing these provisions. BITs are generally concluded for a certain time – mostly 10 to 20 years – with a prolongation for indeterminate duration afterwards (see, e.g., the model BITs of France (2006), Germany (2008), Colombia (2007), India (2003), Norway (2007), and the United States (2012).Footnote ¹⁰² After the end of the minimum duration, termination is usually possible and frequently takes effect after one year. The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), whose effective dispute settlement mechanism ‘complements’ the BITs, allows for withdrawal to take effect after six months.Footnote ¹⁰³ No further substantive criteria are provided for, neither in the model BITs nor in the ICSID Convention.

Withdrawal from international human rights treaties is resolved differently depending on the treaty. While some human rights treaties allow for denunciation, such as the 1965 Convention on the Elimination of All Forms of Racial Discrimination (CERD), the 1984 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT), the 1990 Convention on the Rights of the Child (CRC), the 1950 European Convention on Human Rights (ECHR), or the 1969 American Convention on Human Rights (ACHR),Footnote ¹⁰⁴ others, such as the 1966 International Covenant on Civil and Political Rights (CCPR), do not.Footnote ¹⁰⁵ If permissible, withdrawal is subject to minimum time periods to take effect. The most recurrent period is one year (see, e.g., Articles 21 CERD, 31 CAT and 52 CRC). All the optional protocols (OPs) which establish the admissibility of individual communications with respect to some of the conventions (e.g., CCPR, CESCR, CEDAW or CRPD) permit denunciation as well, this generally with shorter time periods or no time period.Footnote ¹⁰⁶

In the international law of the sea, two different groups of treaties may be distinguished. While the four 1958 Geneva Conventions on the Law of the SeaFootnote ¹⁰⁷ do not contain withdrawal provisions, the 1982 UN Convention on the Law of the Sea (LOSC) and its related agreementsFootnote ¹⁰⁸ generally allow for denunciation. Article 317 LOSC establishes that withdrawal is to take effect within one year of receipt of the notification. Reasons may, but do not have to, be given.

4.2. Regime-specificity in times of fragmentation?

Most of the treaties of the GATT/WTO regime, the international law of investment, international human rights law, and the law of the sea subject termination/withdrawal merely to procedural obligations and periods of notice. While there are thus no specific characteristics as regards denunciation conditions and procedures, the legal consequences of termination are framed in a more ‘regime-specific’ way.

Withdrawal provisions in human rights treaties – if included – usually reiterate and detail Article 70 VCLT for the human rights context. They establish that denunciation does not release a treaty party from its obligations incurred before the withdrawal takes effect.Footnote ¹⁰⁹ Likewise, denunciation does not affect communications which are pending at the moment of withdrawal, thus avoiding event-driven denunciations.Footnote ¹¹⁰ Also in the law of the sea, the LOSC reiterates that withdrawal does not affect the financial and contractual obligations incurred.Footnote ¹¹¹ Even more regime-specific are the legal consequences of denunciation as established in international investment law. BITs generally provide for a prolonged protection of investors, usually 10 to 20 years after termination (so called ‘sunset-clauses’).Footnote ¹¹² This differs from the ex nunc release from treaty obligations established in general international law (Article 70 VCLT). Such extended protection of investors may be explained by the cost intensity of investments and the need for a stable legal framework to ensure a favourable investment climate. Another ‘regime-specificity’ is foreseen in the GATT/WTO regime: Article XV of the WTO Agreement states that withdrawal from the WTO Agreement automatically implies withdrawal from the Multilateral Trade Agreements included in Annexes 1, 2 and 3 of the Agreement.Footnote ¹¹³ Thus preventing the denunciation of merely one of the agreements, Article XV of the WTO Agreement reflects – in accordance with the single-undertaking approach – the interdependency and close interrelation of the agreements concluded in the WTO context. More generally, it is expression of the closely interwoven state obligations in international economic law which is one of the examples of the international law of co-operation.Footnote ¹¹⁴

4.3. States' denunciation practice in times of fragmentation

An analysis of state practice in the different treaty regimes shows that states have only very rarely relied on denunciation provisions. Even less frequently has termination or withdrawal served as means for the accommodation of change.

At first, states have only most exceptionally permanently left human rights treaties. The only withdrawal from the ECHR has so far been Greece after denunciation in 1969 in relation to human rights violations of its military junta.Footnote ¹¹⁵ Trinidad and Tobago are the sole state to denounce the ACHR (in 1998) against the background of the incompatibility of its procedures concerning the death penalty with the Convention.Footnote ¹¹⁶ The only cases of withdrawal from universal human rights treaties are Jamaica, Trinidad and Tobago, and Guyana, which denounced the Optional Protocol to the CCPR in 1997, 1998, and 1999 respectively. While the latter two acceded again with a reservation immediately afterwards,Footnote ¹¹⁷ Trinidad and Tobago withdrew for a second time in 2000. Likewise, North Korea in 1997 attempted to denounce the CCPR in reaction to criticism of its human rights violations, notwithstanding the fact that the CCPR does not provide for exit.Footnote ¹¹⁸ No other withdrawals from major international human rights treaties are recorded.Footnote ¹¹⁹ The exceptional nature of denunciations becomes particularly evident when contrasted to most human rights treaties’ high ratification figures.Footnote ¹²⁰ Furthermore, rather than as means for the accommodation of change, states seem to leave human rights treaties especially in connection with criticism of their human rights practice.

Likewise in the law of the sea denunciations are the rarest exception. So far, only Senegal in the 1970s seems to have withdrawn from three of the four 1958 Geneva Conventions although they do not provide for withdrawal.Footnote ¹²¹ No withdrawal appears to have taken place under the LOSC and related agreements, notwithstanding the generally high ratification numbers.Footnote ¹²² Accordingly, in the law of the sea as well it seems safe to conclude that while the LOSC and related agreements generally contain withdrawal clauses, states have not used this possibility.

Also in the GATT/WTO regime, permanent withdrawal does not seem to be an option. No state ever appears to have withdrawn from the WTO Agreement; nor does such denunciation seem likely, given its important repercussions: as stated, withdrawal from the WTO Agreement automatically implies the denunciation of the other multilateral trade agreements.Footnote ¹²³ Only four states (China, Lebanon, Syria, and Liberia) have left the GATT, all in the early 1950s.Footnote ¹²⁴

In the international law of investment, termination (or non-prolongation) of BITs seems to be the exception, too;Footnote ¹²⁵ especially if one considers the more than 2,800 BITs which have been concluded and the 157 states parties to the ICSID Convention.Footnote ¹²⁶ So far, denunciation appears limited to two sets of constellations. On the one hand, there is a growing opposition of certain Latin American states (Ecuador, Bolivia, Venezuela, Nicaragua, and Cuba) to investment protection. A specific change of circumstances, i.e., the changing political position of states, seems to have motivated Venezuela in 2008 not to renew its BIT with The Netherlands,Footnote ¹²⁷ and to have motivated Bolivia, Ecuador, and Venezuela to withdraw from the ICSID Convention in May 2007, July 2009, and January 2012 respectively.Footnote ¹²⁸ The second set of terminations concerns intra-EU BITs where the European Commission takes the position that these BITs contravene EU law.Footnote ¹²⁹ Against that background, some EU states have (consensually) terminated BITs (see, e.g., the Czech–Italian BIT).Footnote ¹³⁰

4.4. Résumé

Most of the above-mentioned treaty regimes allow for comparatively simple denunciation – merely linked to periods of notice – and therewith avoid the legal insecurity inherent in substantive denunciation conditions.Footnote ¹³¹ Still, the rare instances of termination/withdrawal evidence the states' general reluctance to permanently leave treaty regimes. In times of international co-operation definite denunciation does not seem to be an option. But what about temporary derogation?

5.1. Treaty-based emergency exceptions in selected treaty regimes

In international human rights law, especially treaties on civil and political rights incorporate exceptions which allow for derogation from (certain) human rights obligations in emergency situations:Footnote ¹³² this is the case for the CCPR, the ECHR, and the ACHR. Measures taken in accordance with these exceptions are lawful within the treaty regime.Footnote ¹³³ In the following, Article 4 CCPR will be dealt with by way of example. Still, it is illustrative of the human rights regime more generally, as the emergency exceptions of Articles 15 ECHR and 27 ACHR are formulated in a rather similar way.Footnote ¹³⁴ Article 4 CCPR evidences the high threshold to legitimately derogate from human rights obligations: a state of emergency has to threaten the life of the nation and must be officially proclaimed.Footnote ¹³⁵ In addition, derogation from treaty obligations is only allowed to ‘the extent strictly required by the exigencies of the situation’.Footnote ¹³⁶ Derogation may thus be admissible only in regions which are directly struck by the calamity. Furthermore, a list of non-derogable rights, such as the prohibition of torture, is included in Article 4(2) CCPR: non-compliance with these rights is entirely prohibited. The duty to inform the assembly of states parties of any derogation as provided for in Article 4(3) CCPR facilitates international supervision and control of the emergency measures adopted by a state.Footnote ¹³⁷ On the other hand, international human rights treaties do not contain the ‘contribution’ element of Article 25(2)(b) of the ILC Articles. Put differently, a contribution by the state to the emergency situation – conceivable, for instance, in cases of civil unrest – does not automatically prevent reliance on necessity and impede a corresponding derogation from its obligations. This is confirmed in the jurisprudence of the human rights supervisory organs. Cyprus, for example, had argued in a state complaint against Turkey that Turkey could not rely on Article 15 ECHR as it had contributed to the emergency. The then European Commission of Human Rights, however, disregarded Cyprus's argument.Footnote ¹³⁸

In the law of the sea, in particular the 1969 International Convention relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (1969 Intervention Convention)Footnote ¹³⁹ and Article 221 of the LOSC,Footnote ¹⁴⁰ establish the conditions and modalities for possible reliance on necessity in the law of the sea. They not only concretize the elements of the necessity defence based on customary law, but in addition provide for a right to intervene, as opposed to Article 25 of the ILC Articles, which is framed as a circumstance precluding wrongfulness.Footnote ¹⁴¹ The 1969 Intervention Convention thus stipulates the right of the coastal state to act when its coast or related interests are threatened because of oil pollution casualties.Footnote ¹⁴² At the same time, this right of intervention is subject to detailed procedural rules which provide for obligatory consultations with the concerned states (in particular the flag state) and – if feasible – the involvement of independent experts; a dispute settlement mechanism is also established.Footnote ¹⁴³ These rules seek to limit damages, especially for the flag state, whereas the question of compensation is clarified in favour of the intervening state. As long as a state intervenes in accordance with the Convention, no duty of compensation arises.Footnote ¹⁴⁴ Article 221 LOSC refers to the conventional and customary right of a state to avert danger from its coast or related interests (and therefore implicitly to the 1969 Intervention Convention). It is worded more broadly and in more positive terms than Article 25 of the ILC Articles. In addition to referring to a right to intervention, Article 221 LOSC omits the criteria of ‘grave and imminent peril’, the ‘contribution’ element and the requirement that the measures taken have to be the ‘only way’ to safeguard the respective interest. At the same time, the interests for the protection of which states are allowed to take measures (coastline and related interests, including fishing) are exhaustively enumerated.Footnote ¹⁴⁵

The GATT/WTO, regime establishes a sophisticated system of possible derogations from treaty obligations in ‘necessity-like’ situations. Article XIX GATTFootnote ¹⁴⁶ provides for situations of ‘economic necessity’ which are caused by an increased and unforeseen influx of certain products to a point of seriously threatening branches of national industry. Likewise, balance-of-payment difficulties may be a reason for exceptions to liberalization requirements (Articles XII, XVIII GATT). Article XX GATT establishes ‘general exceptions’ for the protection of recognized public interests such as public morals; human, animal, or plant life or health; and the conservation of exhaustible natural resources.Footnote ¹⁴⁷ Derogations for political crisis situations, such as war, serious international tensions, or severe political unrest, are possible in accordance with Article XXI GATT (‘security exceptions’).Footnote ¹⁴⁸ With Articles XX and XXI GATT comparable provisions are likewise inserted in the GATSFootnote ¹⁴⁹ and also numerous other agreements contain similar ‘emergency exceptions’.Footnote ¹⁵⁰ Moreover, some of these exceptions are further detailed in specific agreements. The conditions and procedural modalities for the application of Article XIX GATT are specified and supplemented in the Safeguards Agreement;Footnote ¹⁵¹ and health and sanitary standards are provided for in the SPS Agreement.Footnote ¹⁵² Measures taken in accordance with these norms do not constitute violations of treaty obligations.

In international investment law, from the more than 2,500 BITs in existence in 2006, at least 200 provided for emergency exceptions (‘non-precluded measures provisions’).Footnote ¹⁵³ Similarly structured, emergency exceptions in BITs are mostly framed in less restrictive terms than the necessity defence under customary international law. They usually establish a list of permissible measures in pursuing certain objectives (essential security interests, public morals, public health); the list varies in detail in the different BITs.Footnote ¹⁵⁴ Measures to attain these objectives are ‘non-precluded’ and thus not considered violations of the respective BIT obligations. The required link between the measure and the objective to be achieved – the so-called ‘nexus element’ – may range from a relatively narrow nexus (e.g., ‘necessary for’) to broader formulations such as ‘in the interest of’ or ‘aiming at’. Several of the more recent BITs contain emergency exceptions which are modelled after Articles XX and XXI GATT.Footnote ¹⁵⁵

5.2. Regime-specificity in times of fragmentation?

The different treaty-based emergency exceptions vary considerably, adapting derogation in cases of change to the requirements of the respective treaty regime. Derogation clauses in international human rights treaties mirror the vertical structure of these treaties, which aim at the protection of individuals. They subject a state's derogation from its human rights obligations to strict rules and also establish a monitoring system with a regular international control of derogations through human rights treaty bodies.Footnote ¹⁵⁶ The features of emergency exceptions in human rights treaties thus reflect the importance of interests involved (human rights) which require a detailed and sophisticated derogation regime. With respect to particularly essential/core rights, such as the prohibitions of slavery or torture, derogation is entirely prohibited (so-called ‘non-derogable rights’). The monitoring system provides for international control in an area where states do not necessarily have a reciprocal interest in mutual compliance with treaty obligations.

The GATT/WTO regime establishes an elaborate system of exceptions for states to counter threats which arise primarily out of trade liberalization itself.Footnote ¹⁵⁷ Reliance on the central provisions, Articles XX and XXI GATT, is generally subject to less stringent requirements than is reliance on the necessity defence under general international law. Both provisions are framed more broadly. The positive wording of Article XX GATT – ‘nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures’ – contrasts with the negative formulation of Article 25 of the ILC Articles. Article XXI GATT leaves, as a ‘self-judging clause’, a very large margin to member states concerning possible derogations from treaty obligations in international crisis situations. While until recently it was disputed whether judicial review of measures taken under Article XXI was at all possible, the prevailing view today accepts good-faith review.Footnote ¹⁵⁸ The distinct functioning of the trade regime, where certain dangers are caused by the very deregulation of the market (see, e.g., Articles XIX, XX GATT), is one of the explanations for the open formulation of the provisions. Likewise, the large margin of appreciation left to states – in particular as regards the ‘self-judging clause’, Article XXI GATT – reflects the comparatively low value of interests (trade liberalization) at stake.Footnote ¹⁵⁹

In international investment law, the emergency exceptions included in BITs reflect the tension between the necessary protection of investor interests and legitimate state measures in emergency or crisis situations. They are formulated more openly and are not as narrow as the necessity defence under customary law. The ‘only-means’ criterion and the ‘contribution’ element of Article 25 of the ILC Articles are generally omitted. In principle, this enables states to adopt measures also when they contributed to an emergency or when several means exist to deal with a crisis. In particular, recent US BIT practice tends to broaden the margin of appreciation of states concerning the adoption of emergency measures: the exception in the 2012 US Model BIT is formulated as a self-judging clause and limits the possibility of judicial review.Footnote ¹⁶⁰ These self-judging emergency exceptions are expression of states' attempts to safeguard national sovereignty and to maintain regulatory power in emergency situations to the greatest possible extent vis-à-vis foreign investors.

The more traditional structure of the law of the sea, conversely, likewise shows in the regime's derogation provisions. The structural differences between the 1969 Intervention Convention/Article 221 LOSC and Article 25 of the ILC Articles are minor. The law of the sea's provisions concerning necessity detail the necessity defence of general international law, adapting it to ‘typical’ emergency situations on the high seas. They do not substantially alter its criteria. This is understandable as the law of the sea may be considered as part of the corpus of ‘classic international law’ which is based on inter-state relations where states have a reciprocal interest in compliance. In fact, emergency situations on the high seas have significantly contributed to the formation of the necessity defence under customary international law.Footnote ¹⁶¹

Consequently, the wording and structure of some of the treaty-based emergency exceptions differ substantially from the necessity defence under general international law.Footnote ¹⁶² Simplified, the extent of this difference depends on the degree of ‘regime-specificity’. The derogation provisions of the more specific human rights regime vary to a larger extent than those of the rather traditionally conceived law of the sea.

5.3. States' temporary derogation practice in times of fragmentation

The ‘regime-specificity’ of treaty-based emergency exceptions seems important since state practice in international human rights law, the GATT/WTO regime, and the international law of investment reflects an increased need to temporarily derogate from treaty obligations.

In the international human rights regime, especially states' reliance on Article 4 CCPR shows the considerable importance of the provision.Footnote ¹⁶³ Until January 2012, 32 states had at least once derogated from certain obligations under the CCPR in accordance with Article 4(3) CCPR: Algeria, Argentina, Armenia, Azerbaijan, Bahrain, Bolivia, Chile, Colombia, Ecuador, El Salvador, France, Georgia, Great Britain, Guatemala, Jamaica, Israel, Namibia, Nepal, Nicaragua, Panama, Paraguay, Peru, Poland, Russia, Sri Lanka, Sudan, Suriname, Trinidad and Tobago, Tunisia, Uruguay, Venezuela, and Yugoslavia.Footnote ¹⁶⁴ The main reasons for such derogations were (civil) war or serious civil unrest.Footnote ¹⁶⁵ Accordingly, derogations concerned primarily the rights to personal liberty and security, the right to privacy, and due-process rights, as well as the rights to political participation, freedom of expression, assembly, and association. In the context of the Council of Europe, Greece, Ireland, Turkey, Great Britain, Albania, and France have so far derogated from some of their obligations under the ECHR in accordance with Article 15 ECHR, with most of the cases concerning detentions and restrictions of due-process rights in criminal proceedings in connection with internal disturbances (Articles 5 and 6 ECHR).Footnote ¹⁶⁶ The most recent derogation was that of Great Britain which relied on Article 15 ECHR in the aftermath of the terrorist attacks on the World Trade Center of 9/11.Footnote ¹⁶⁷

Likewise state practice in international economic law evidences the considerable importance of especially Articles XIX and XX GATT, which enable states to temporarily derogate from their treaty obligations when essential state interests are at stake. After the Uruguay round, Article XIX GATT became a comparatively important exception, relied upon by states in cases of economic emergency.Footnote ¹⁶⁸ The same holds true for Article XX GATT, which allows states to derogate from treaty obligations for the protection of recognized values in their domestic legal order. While the US – Shrimp caseFootnote ¹⁶⁹ is probably best known, Article XX GATT was also of relevance in the Brazil – Measures Affecting Imports of Retreaded Tyres,Footnote ¹⁷⁰China – Audiovisual Services,Footnote ¹⁷¹ and EC – Asbestos Footnote ¹⁷² cases.Footnote ¹⁷³ Conversely, states have only infrequently invoked Article XXI GATT. Having so far never been subject to adjudication, Article XXI GATT seems to be of mainly theoretical importance.Footnote ¹⁷⁴

In international investment law, in particular the Argentine economic crisis of 2001–2 revealed the relevance of treaty-based emergency exceptions. Where available, Argentina invoked the respective BIT's emergency exception, most importantly Article XI of the US–Argentina BIT, in addition to its reliance on the customary-law-based necessity defence. Especially the cases brought under the US–Argentina BIT – CMS, LG&E, Enron, Sempra, Continental Casualty, and El Paso – thus highlight the importance of emergency exceptions in international investment law for states to keep some room for action in economic crisis situations.Footnote ¹⁷⁵ At the same time, the contradictory decisions of the investment tribunals evidence the dangerous legal insecurity brought about by inconsistent jurisprudence. Calls for a more systematic interpretation were voiced accordingly.Footnote ¹⁷⁶

In the international law of the sea, conversely, temporary derogation from treaty obligations has been less frequent and seems to have taken place mainly in the context of ecological disasters following ship accidents. Examples include the Torrey Canyon accident where Great Britain sank a Liberian oil tanker in the high seas in order to prevent the oil pollution of its coast,Footnote ¹⁷⁷ or the Nachfolger incident where France destroyed a wreck in front of its coastline (but also on the high seas).Footnote ¹⁷⁸ Scarce state practice may be explained by, inter alia, the traditional conception of the law of the sea, which largely mirrors the classic international law of co-ordination: given the reduced density of state obligations, non-performance may be limited to exceptions and punctual situations such as oil-spilling accidents.

5.4. Résumé

Especially treaty-based emergency exceptions are framed in a regime-specific way. They allow for ‘system-adequate’ non-performance and further the legal certainty and predictability of derogations. This appears especially important given states' repeated reliance on treaty-based emergency exceptions and the undeniable need for temporary rather than permanent derogation, which seems to be the preferred option to accommodate change in times of international co-operation.