Part I of this Article considers the effects of a treaty expressly covering only those investments that are made in accordance with host state law. In such cases, the legality of the investment, with respect to the host state law, is shown to be a jurisdictional prerequisite. Part II discusses the presence of an implicit obligation that an investment must accord with host state and international legal principles in order for the claims related to that investment to be admissible. Part II also attempts to clarify some confusion among recent cases as to the nature of this obligation. Part III examines certain exceptions to the preclusion of a claimant's claims based on its illegal investment. The exceptions discussed in Part IV include where the claimant's illegality is the result of a good faith mistake and where the host state, knowing of the illegality, condoned the claimant's investment.
Rahim Moloo and Alex Khachaturian,
The Compliance with the Law Requirement in International Investment Law,
34 Fordham Int'l L.J. 1473
Available at: http://ir.lawnet.fordham.edu/ilj/vol34/iss6/1