International projects present many challenges for project participants – not least when a foreign state or state party is involved. Apart from the risk of breaches of the contracts underlying the project – a risk in any project – a state might have a range of other powers that could affect those undertaking the project, even where they have not contracted directly with the state itself. It might, for example, place onerous restrictions upon a party’s workforce or on the transfer of capital, or might pass discriminatory laws that drastically reduce the value of a party’s investment in the project, or even expropriate his or her property.
Safeguards provided to international investors by international investment-protection treaties might be available to assist a party based in one state (his or her ‘home’ state) who becomes involved in a project in the territory of another state (the ‘host’ state). Although such treaties have been fairly commonplace now for many years, and more are coming into existence, awareness of these safeguards, and the rights and remedies they provide to investors, remains surprisingly patchy.
