Causation and The Draft Articles On State Responsibility

ICSID Review, Vol. 37, No. 1-2 (2022), pp.
192–209
doi: https://doi.org/10.1093/icsidreview/siab027
Published Advance Access 12 February 2022 WINTER/SPRING 2022
SPECIAL ISSUE ON
Downloaded from https://academic.oup.com/icsidreview/article/37/1-2/192/6527525 by Gujarat National Law University user on 16 April 2024
20TH ANNIVERSARY OF ARSIWA
Causation and the Draft Articles on
State Responsibility
Patrick W Pearsall1
Few issues have proven to be as vexing to courts and tribunals as the matter of
causation. The causation inquiry calls for nuanced exploration of sometimes meta-
physical concepts—overdetermination, novus actus interveniens, probability—while
serving the practical function of balancing over-deterrence against the enforcement
of legal rights. Indeed, as Aristotle famously instructs: we do not know something
until we know its cause.2 The legal and philosophical literature on the topic fills
volumes, with sharp disagreement on the nature of the concept even among judges
and arbitrators who agree on the result of a given dispute.
In this context, the drafters of the International Law Commission’s (ILC’s) Draft
Articles on the Responsibility of States for Internationally Wrongful Acts3 deftly
chose to address causation tersely but directly, largely by inserting two words—
‘caused by’—into article 31. This choice has helped to define the causation inquiry
vis-à-vis matters of liability, while allowing tribunals and courts flexibility, free from
prescriptive formulas, to discern and develop international law on the more nuanced
and difficult questions of causation as they arise in a given instance. Article 31 per-
mits the freedom and flexibility for us ‘to know its cause’, but nonetheless signals a
clear instruction: we must inquire.
Twenty years on, all would agree that the Draft Articles have substantially
enhanced the clarity and definiteness of international law on State responsibility.
Nevertheless, and by design, the decision to leave open the finer points of the caus-
ation inquiry—how it is structured, and how it must be applied—has led to divergent
approaches. While this indeterminacy is a great strength of the inquiry as imagined
by the Draft Articles, lawyers are not always philosophers, and they tend to investi-
gate uncertainty in an attempt to reconcile different approaches to the same
question.
1
Partner, Allen & Overy LLP; former Chief of Investment Arbitration for the United States of America. The views
expressed in this note are the author’s own and do not reflect those of Allen & Overy LLP or the United States
Government.
2
Aristotle, Physics 194 b17–20.
3
International Law Commission, ‘Draft Articles on the Responsibility of States for Internationally Wrongful Acts
with Commentaries’, UN GAOR 56th Session Supp 10, ch 4, UN Doc A/56/10 (2001) (ARSIWA).
C The Author(s) 2022. Published by Oxford University Press on behalf of ICSID. All rights reserved.
V
For permissions, please email: journals.permissions@oup.com
Causation and the Draft Articles on State Responsibility 193
Section I of this note situates the Draft Articles, and in particular the causation
inquiry, within the broader development of international law. Section II reviews the
Draft Articles’ design and impact on the causation inquiry under international law.
Section III looks at how tribunals have addressed issues that the Draft Articles, by de-
sign, left open. Sections IV and V conclude by looking ahead to forces that are likely
to shape the causation inquiry on matters of State responsibility in the coming years.
Mindful of the significant milestone achieved this year, nonetheless I think it ap-
propriate to note that the next 20 years will continue to test the relevance of the Draft
Articles. Increased transnational interdependence will add a new dimension to the
problem of overdetermination in international disputes.4 Causation will only become
a more important and elusive concept in the years ahead. Thankfully, however, the
Draft Articles have given us a remarkably simple and effective—perhaps timeless—
mooring post from which to launch the necessary inquiry.
I. THE CAUSATION INQUIRY

The causation inquiry in any legal system serves the essential purpose of limiting the
scope of responsibility for reparation beyond what is reasonable for the party at fault
to bear, while simultaneously encouraging only those claimants who have suffered a
cognizable injury to seek judicial redress. The international legal order is no different.
Causation has been a feature of the law of State responsibility for centuries, and tri-
bunals have consistently refrained from awarding damages to claimants whose injury
the State did not cause.5
But what it means for a State to ‘cause’ an injury, and the inquiry required to iden-
tify that cause, have proven to be more elusive. Three preliminary points are helpful
in setting out the indeterminacy of the causation inquiry.
First, there is divergence over whether causation is an independent element that
links liability to injury or is instead an element of liability itself. The former view can
be seen in investment arbitration decisions such as Pey Casado v Republic of Chile,6 in
which the Tribunal treated ‘causation as a distinct “step,” which is separate from
both “liability” and “quantum”’.7 The latter, described by Professor Brigitte Stern as
the ‘traditional conception of responsibility’, can tend to collapse the inquiries into
one, holding that ‘[t]he obligation to make reparation . . . is not the “consequence” of
international responsibility’ because ‘[i]nternational responsibility is the obligation to
make reparation’.8 While perhaps inconsequential as a practical matter in many
cases, this distinction can be crucial in others in which, despite a finding of no com-
pensable harm, an unequivocal finding of liability validates the claimant’s legal inter-
ests and reinforces the integrity of the legal order as a whole. Sometimes finding a
4
Ilias Plakokefalos, ‘Causation in the Law of State Responsibility and the Problem of Overdetermination: In Search
of Clarity’ (2015) 26 Eur J Intl Law 471, 472.
5
See eg, Administrative Decision No II, United States v Germany (1923) 7 RIAA 23, 29; see generally Plakokefalos,
(n 4) 484; ILC, ‘Report of the International Law Commission on the Work of Its Fifty-Third Session’ (2001) reprinted
in II(2) Yearbook of the International Law Commission 1, 92–94 (ILC Report and Commentary).
6
Victor Pey Casado and President Allende Foundation v Republic of Chile, ICSID Case No ARB/98/2, Award (13
September 2016).
7
Patrick W Pearsall and J Benton Heath, ‘Causation and Injury in Investor-State Arbitration’ in Christina L
Beharry (ed), Contemporary and Emerging Issues on the Law of Damages an Valuation in International Investment Arbitration
(Brill 2017) 83, 85 [quoting Pey Casado (n 6) para 217].
8
Brigitte Stern, ‘The Elements of an Internationally Wrongful Act’ in James Crawford and others (eds), The Law of
International Responsibility (OUP 2010) 193, 194 (emphasis added).
194 ICSID Review VOL. 37 1-2
State responsible is just as important as, if not more important than, the restitution
owed to the claimant by such a finding.
Second is the struggle of how to define the bounds of what is often described as
‘legal’ causation. ‘Factual causation’, or ‘but for’ causation, is a necessary element in
any inquiry into State responsibility that involves a claim of injury. Nevertheless, the
mere fact that an injury flows from a wrong is not sufficient to establish an injury that
is recognized by law: all legal systems ‘distinguish [] between consequences which
flow [] directly from a wrongful act and the long-term by-product, the inadvertent
consequences, that follow[] from human conduct in general’.9 But how to delimit the
boundary between compensable injury and non-compensable injury is more difficult.
As Professor Stephan Wittich explains, ‘[t]here is a plethora of terms describing the
necessary causal link’, including ‘directness, remoteness, foreseeability, predictability,
proximity; reasonable, normal or necessary consequences; equivalent or adequate
causation’.10 The ‘plethora of terms’ is a manifestation of the elusive and indetermin-
ate character of the inquiry. The formulation can differ even within a single domestic
system where different terms are used to capture the same legal meaning.
Third is the tricky set of problems associated with a traditional cause-in-fact ana-
lysis. Most notable is the problem of overdetermination, which, in its most examined
formulation, holds that two or more sufficient causes for an injury exist, but neither
is necessary. Put differently, a State’s internationally wrongful act can be sufficient
but not necessary for an injury due to the actions of an independent wrongdoer and
thus may fail the traditional ‘but for’ causation inquiry. The principle is nicely illus-
trated by the Oil Platforms Case.11 There, the United States brought a counterclaim
against Iran in the International Court of Justice (ICJ) for mine attacks on shipping
in the Persian Gulf.12 However, Iraq had also laid mines in the Gulf and, in the end,
the ICJ, which denied the counterclaim, commented that the damage to shipping in
the Persian Gulf ‘was to a great extent due to the presence of mines and minefields
laid by both sides’ during the Iran–Iraq War.13 In a separate opinion, Judge Simma,
analogizing to the seminal Summers v Tice14 decision, wrote that both Iran and Iraq
could be held responsible for damages under the circumstances, as both, though act-
ing independently, had jointly created the injury, which Judge Simma conceived as
the ‘creation of dangerous conditions for shipping and doing commerce in the
Gulf’.15 At first glance, these questions may seem like a problem mostly of how to ap-
portion liability for harm, if at all, but as one starts to pick apart the matter the caus-
ation inquiry is necessarily posed.
All of these difficult questions of causation in the law of State responsibility have
arisen and been tested in a variety of contexts, including State-to-State disputes, in-
vestor–State disputes under international investment agreements, and human rights
disputes.
9
ILC, ‘Summary Records of the First Part of the Fifty-Second Session’ (2000) reprinted in I Yearbook of the
International Law Commission (2001) 1, 4.
10
Stephan Wittich, ‘Direct Injury and the Incidence of the Local Remedies Rule’ (2000) 5 Austrian Rev Intl and Eur
L 121, 123 n 5.
11
Case Concerning Oil Platforms (Islamic Republic of Iran v United States of America) Judgment [2003] ICJ Rep para
161; see generally André Nollkaemper and Dov Jacobs, ‘Shared Responsibility in International Law: A Conceptual
Framework’ (2013) 34 Mich J Intl L 359, 399 and n 200.
12
Oil Platforms (n 11) 167, 173, 193–4.
13
ibid 183.
14
Summers v Tice, 199 P2d 1 (Cal 1948).
15
Oil Platforms (n 11) 358–9 (separate opinion of Simma J); Nollkaemper and Jacobs (n 11) 399 n 200.
A. Disputes Among States

Many of the seminal cases on causation under international law have arisen in the
context of disputes between States. In the infancy of State-to-State dispute reso-
lution, in the Alabama Claims Case,16 the United States sought damages to compen-
sate for British war support for the Confederacy during the United States Civil War.
The Tribunal explored the concept of proximate causation when it ruled that the
United Kingdom (UK) was under no obligation to make reparations for the ‘general
expenses of the war carried on by the United States’.17 In the Corfu Channel Case,18
the ICJ confronted shared liability when it ordered Albania to pay reparations for its
failure to warn the UK of mines that a different party had laid in the Straits of
Corfu.19 Adjudicators in a number of other State-to-State disputes—the Bosnian
Genocide Case20 between Bosnia & Herzegovina and Serbia and Montenegro about
responsibility for the Srebrenica genocide; the Trail Smelter Case21 between Canada
and the United States about transboundary pollution—have explored these princi-
ples further and applied them to diverse factual situations.22 In short, these difficult
questions have been with us since the earliest cases and are not going away anytime
soon in the State-to-State context.
B. Investment Arbitration
The Draft Articles are not by their terms limited to questions of State responsibility as
regards other States, and the causation inquiry has developed significantly in no small
part due to the work of diligent arbitrators and litigants in investment disputes. Given
the relevance of money damages in such cases, causation is a frequently litigated mat-
ter, with States increasingly raising defenses based on the alleged lack of a causal con-
nection between the State’s actions and the investor’s claimed injury or damage. In
Biwater Gauff (Tanzania) Ltd v United Republic of Tanzania,23 for instance, Tanzania
argued, and the Tribunal agreed, that the State had no obligation to make reparations
whatsoever to an investor whose failing business Tanzania had expropriated.24 Several
other tribunals have come to similar conclusions, holding States ‘liable’ or ‘responsible’
for a breach of international law obligations without awarding damages.25
Engaging with these issues, tribunals in investor–State cases have grappled with
difficult questions inherent in causation that are often persistent in investor–State
claims. In Micula v Romania,26 the Tribunal addressed how to allocate uncertainty
inherent in constructing counterfactuals. In Olguı́n v Republic of Paraguay,27 the
16
United States v Great Britain (1872) 29 RIAA 125.
17
Alabama Claims, 29 RIAA 133; see Stainimir A Alexandrov and Joshua M Robbins, ‘Proximate Causation in
International Investment Law’ in Karl P Sauvant (ed), Yearbook of International Investment Law and Policy: 2008–2009
(OUP 2009) 317, 325.
18
Corfu Channel Case (UK v Albania) Judgment, [1949] ICJ Rep 4.
19
ibid 22–23, 244, 250.
20
Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v
Serbia and Montenegro) Judgment [2007] ICJ Rep 43.
21
United States v Canada (1941) 3 RIAA 1905.
22
See generally Alexandrov and Robbins (n 17) 320–1, 324–6, 331–3.
23
Biwater Gauff (Tanzania) Ltd v United Republic of Tanzania, ICSID Case No ARB/05/22, Award (24 July 2008).
The law firm of Allen & Overy participated as counsel in this matter.
24
ibid paras 758–62, 786–7, 798, 807.
25
See Pearsall and Heath (n 7) 83 n 3 (collecting cases).
26
Ioan Micula, Viorel Micula, SC European Food SA, S Starmill Srl and SC Multipack Srl v Romania, ICSID Case No
ARB/05/20, Award (11 December 2013).
27
Eduoro Armando Olguı́n v Republic of Paraguay, ICSID Case No ARB/98/5, Award (26 July 2001).
Tribunal considered causation-related defenses premised on investor assumption

of risk.
Litigants, too, have become increasingly sophisticated in bringing these questions
before tribunals. In Bear Creek Mining Corp v Republic of Peru,28 Peru granted a
Canadian mining firm rights to acquire and operate a mining project.29 The project,
along with other mining operations in the area, sparked local opposition, ultimately
prompting the government to issue a decree that revoked the investor’s approvals,
thus—as the Tribunal concluded—violating the investor’s rights under international
law.30 In its defense, Peru argued that the Claimant itself was responsible for the
decree by failing to engage sufficiently with the local community, but the Tribunal
disagreed, citing a failure of causation: ‘Respondent has not been able to prove . . . a
causal link between Claimant’s activity in relation to [the project] and [the
decree].’31
Similarly, in Urbaser SA v Argentine Republic,32 investors in an Argentine municipal
water utility brought treaty claims against Argentina under a bilateral investment
treaty (BIT) between Spain and Argentina.33 The State responded by counterclaim-
ing that the investors were under a duty to make reparation to Argentina under inter-
national human rights law for their failure to make adequate infrastructure
investments.34 The Tribunal’s decision, which is perhaps best known for its conclu-
sions on jurisdiction,35 touched on interesting questions of causation: In an echo of
Biwater Gauff, the arbitrators ultimately concluded that Argentina was responsible
but declined to award damages,36 and the Tribunal rejected Argentina’s counter-
claim in part based on a lack of causation.37
C. Human Rights Law

Disputes like Urbaser highlight that causation in the context of State responsibility is
increasingly relevant to disputes, whether in national courts or international fora,
arising under international human rights law.
Take, for example, Loizidou v Turkey,38 a case that in Judge Crawford’s words ‘lies
in the shadowland between issues of attribution and causation’.39 In Loizidou, a
Cypriot national filed a claim against Turkey in the European Court of Human
Rights, seeking redress for the Turkish Republic of Northern Cyprus’s (TRNC)
28
Bear Creek Mining Corp. v Republic of Peru, ICSID Case No ARB/14/21, Award (30 November 2017).
29
ibid paras 123–51.
30
31
ibid para 411.
32
Urbaser SA v Argentine Republic, ICSID Case No ARB/07/26, Award (8 December 2016).
33
ibid para 34.
34
ibid para 36.
35
See eg, Edward Guntrip, ‘International Investment Law, Hybrid Authority and Jurisdiction’ in Stephen Allen and
others (eds), The Oxford Handbook of Jurisdiction in International Law (OUP 2019) 431, 444; Jarrod Hepburn, ‘In a
First, BIT Tribunal Finds That It Has Jurisdiction to Hear a Host State’s Counterclaim Related to Investor’s Alleged
Violation of International Human Rights Obligations’ Investment Arbitration Reporter (23 January 2017).
36
Urbaser (n 32) paras 845–7 (‘The protection afforded by the standard of fair and equitable treatment cannot pro-
vide redress where the failure of the Concession is predominantly attributable to the failure on part of Claimants to
make the required investment, resulting in a situation where no expansion work or other development could be envis-
aged any longer on the basis of the undertakings initially agreed upon. Consequently, the Tribunal dismisses Claimants’
requests for payment of damages in this respect.’).
37
38
Loizidou v Turkey App no 15318/89 (ECtHR, 18 December 1996).
39
James Crawford, Special Rapporteur, ‘First Report on State Responsibility’ (1998) reprinted in II(1) Yearbook of
the International Law Commission 1 42.
refusal to permit the Claimant to return to her property in Northern Cyprus, whence
she had fled during Turkey’s occupation in 1974.40 The dispute required the court to
determine whether Turkey was responsible for the acts of officials of the TRNC—a
question that the court’s majority answered in the affirmative on account of Turkey’s
‘overall control over that part of the island’.41 In dissent, Judge Bernhardt, joined by
Judge Lopes Rocha, interpreted the issue as one of causation, reasoning that the
‘presence of Turkish troops in northern Cyprus is [but] one element in an extremely
complex development and situation’.42 The issue is not uncommon in disputes aris-
ing out of conflicts involving militias or similar actors; the ICJ grappled with similar
legal issues in the Bosnian Genocide Case,43 and echoes can be found in the jurispru-
dence of the International Criminal Tribunal for the Former Yugoslavia and the
Special Court for Sierra Leone.44
In another case, MSS v Belgium,45 the European Court of Human Rights consid-
ered whether Belgium could be held responsible for damages to an asylum seeker,
whom Greece had mistreated and whom Belgium had returned to Greece.46
Belgium argued that ‘the applicant . . . failed to . . . establish any causal link between
the alleged fault’ on its part and the ‘damage allegedly sustained’.47 The court dis-
agreed, concluding that ‘the transfer . . . exposed the [claimant] to the risks inherent
in the deficiencies in the asylum procedure in Greece’.48
Issues of causation also inhere in more basic questions of human rights law,
such as the definition of a refugee,49 or the matter of compensation in a failure to
fulfill positive State human rights duties, such as the duty to protect.50 Causation
is also commonly featured in disputes about responsibility for reparation in
relation to environmental harms, including an increasing number of disputes
related to climate change.51 Diverging approaches to causation are of particular
importance in this realm given the potential role that causation may play in
the fragmentation of international human rights law (and, indeed, in public inter-
national law generally).
This whirlwind tour is simply to illustrate that causation under international law
raises difficult and complex questions, is a matter of particular importance in that it
may be outcome determinative, and is highly relevant to a wide range of disputes that
arise under international law. This was just as true 20 years ago when the Draft
Articles were published, except that the drafters of the Articles then wrote without
the benefit of the measure of clarity that their work would bring to the law, and to
which this note now turns.
40
Loizidou (n 38) 11–15; Crawford (n 39) 42.
41
Loizidou (n 38) 6; Crawford, (n 39) 42.
42
Loizidou (n 38) 3 (Bernhardt J dissenting); Crawford (n 39) 42.
43
See Bosnian Genocide Case (n 20) 225–6, 233–4.
44
See Marina Aksenova, Complicity in International Criminal Law (Bloomsbury 2016) 109–10.
45
MSS v Belgium, App no 30696/09 (ECtHR, 21 January 2011).
46
47
ibid para 408.
48
ibid para 410.
49
See James C Hathaway, ‘The Causal Nexus in International Refugee Law’ (2002) 23 Mich J Intl L 207, 209.
50
See Gemma Turton, ‘Causation and Risk in Negligence and Human Rights Law’ (2020) 79 Cambridge LJ 148,
152–4.
51
See generally, eg, Eric A Posner, ‘Climate Change and International Human Rights Litigation: A Critical
Appraisal’ (2007) 155 U Pa L Rev 1925, 1933–4.
II. THE DRAFT ARTICLES AND CAUSATION

The Draft Articles have done much to clarify that causation is an independent
element that links responsibility to injury. It accomplished this goal with remarkable
concision, largely through the careful drafting of two articles, the first of which is
article 1.
Article 1, which announces the first ‘General Principle’ of the Draft Articles,
provides as follows:
Article 1. Responsibility of a State for its internationally wrongful acts
Every internationally wrongful act of a State entails the international responsibility of

that State.52
Slightly reformulated, the Article provides that a State is responsible for all of its
internationally wrongful acts. Conspicuously absent is any requirement that States
are responsible for only those acts that cause injury, or any disclaimer that States are
responsible only to the extent that they must compensate injury. As Professor Stern
explains, the omission reflects ‘a desire’ among the Articles’ framers ‘that responsibil-
ity should arise as soon as an international obligation was breached, or in other
words, to introduce a certain objective review of legality into the institution of inter-
national responsibility’.53
The commentary to the Draft Articles reinforces this view, noting that actual harm
is not an element of all internationally wrongful acts except, of course, insofar as may
be required by the primary rule in question:
It is sometimes said that international responsibility is not engaged by conduct of a
State in disregard of its obligations unless some further element exists, in particular,
‘damage’ to another State. But whether such elements are required depends on the con-
tent of the primary obligation, and there is no general rule in this respect.54
What article 1 suggests through omission, article 31 makes explicit. Article 31 both
distinguishes between liability and compensable injury, and expressly uses causation
to tie them together. It provides:
Article 31. Reparation
1. The responsible State is under an obligation to make full reparation for the injury
caused by the internationally wrongful act.
2. Injury includes any damage, whether material or moral, caused by the internationally
wrongful act of a State.55
The fact that article 31 distinguishes between a State’s responsibility, on the one hand,
and its obligation to make reparations for injury, on the other, clearly illustrates that li-
ability is distinct from injury. This reinforces article 1’s possible supposition that a
State’s ‘responsibility’ does not necessarily turn on the injury that it has caused. More
specifically, article 31(1) ‘presupposes a “responsible State”—that is, a State whose
52
ARSIWA (n 3) art 1.
53
Stern (n 8) 194.
54
ILC Report and Commentary (n 5) 36.
55
ARSIWA (n 3) art 31 (emphasis added).
conduct has breached an international obligation’.56 In doing so, article 31(1) foresees
that a State may be ‘responsible’ even if its actions have not caused any injury
whatsoever.
No less important is that article 31 expressly uses causation to bind liability and injury
together. Both subsections of the article make clear that only damage that is ‘caused by’
the wrongful act of a State is compensable; the State is under no duty to redress injury
that it has not ‘caused’. This formulation shows that causation itself is an independent
inquiry that functions as the tie that binds the State responsibility inquiry together.57
Twenty years of experience with the Draft Articles have brought into greater focus
that the decision on the part of the drafters to separate the elements of liability, injury
and causation into distinct but related inquiries has been successful in a crucial, if
modest, way. In particular, it refocused the spotlight on what, following Judge
Crawford, one can call the ‘shadowland’ within the causation inquiry, and has guided
litigants and adjudicators to address causation separately, without mere reference to
liability or injury. This, in turn, has encouraged advancement in the necessary work
of delimitating the scope and meaning of primary obligations, without the obscuring
effect of causation or injury.
The Bosnian Genocide Case vividly illustrates how important this can be in practice.58
In that case, Bosnia brought a claim against Serbia before the ICJ, on the ground that
Serbia had violated the Convention on the Prevention and Punishment of the Crime of
Genocide (Genocide Convention)59 because, inter alia, Serbia failed to act to prevent
the massacre of Bosniak civilians. In a pathmarking case on the scope of State liability
for genocidal acts,60 the ICJ concluded that Serbia had violated the Convention and
thereby committed a breach of international law.61 However, in turning to the question
whether Bosnia was entitled to compensation for this breach, the court declined to
award damages on the ground that it could not be proven that Serbia’s failure to act
was the ‘but for’ cause of the genocide.62 One can imagine how combining the ques-
tions of causation and liability in the case could have obscured the court’s inquiry into
the latter and ultimately deprived the international legal order of the clarity on the
Genocide Convention’s primary rules that the ICJ’s decision provided.
However, 20 years of experience have also highlighted what the Draft Articles have
not accomplished—and did not aspire to accomplish. Though they were clear about
where causation sits in the legal framework of State responsibility writ large, the
Draft Articles said little about what exactly causation is or how the causation inquiry
itself should be structured.63 This was intentional. Succinctly formulating an
56
Pearsall and Heath (n 7) 88.
57
ibid 88–9.
58
See generally Plakokefalos (n 4) 482.
59
78 UNTS 278, 9 Dec 1948.
60
See eg, Larissa van den Herik and Emma Irving, ‘Due Diligence and the Obligation to Prevent Genocide and
Crimes Against Humanity’ in Heike Krieger and others (eds) Due Diligence in the International Legal Order (OUP 2020)
200, 200–1.
61
Bosnian Genocide Case (n 20) 225–6, 233.
62
ibid 234. The court concluded that it was not clear whether, had Serbia complied with its obligations under the
Genocide Convention and acted to stop the genocide perpetrated by Bosnian Serb militia members, the genocide would
have been averted. In the court’s words, ‘the Respondent did have significant means of influencing the Bosnian Serb
military and political authorities which it could, and therefore should, have employed in an attempt to prevent the atroc-
ities, but it has not been shown that, in the specific context of these events, those means would have sufficed to achieve
the result for which the Respondent should have sought. Since the Court cannot therefore regard as proven a causal
nexus between the Respondent’s violation of its obligation of prevention and the damage resulting from the genocide at
Srebrenica, financial compensation is not the appropriate form of reparation for the breach of the obligation to prevent
genocide’.
63
Stern (n 8) 563, 569.
approach to causation that is both all encompassing and useful is a necessarily impos-
sible task, and would include choosing among often competing approaches to diffi-
cult questions such as ‘legal’ causation or the problem of overdetermination. Such
Sisyphean folly is not the project of the Draft Articles.
Even the ILC Commentary addresses these issues only in general terms. The com-
mentary emphasizes the need for a ‘legal’ causation inquiry by explaining that the
‘subject matter reparation is, globally, the injury resulting from and ascribable to the
wrongful act, rather than any and all consequences flowing from an internationally
wrongful act’.64 As the Commentary elaborates, ‘causality in fact is a necessary but
not a sufficient condition for reparation’.65 However, the Commentary concludes that
‘legal’ causation, however clear its necessity, is simply incapable of precise definition:
There is a further element, associated with the exclusion of injury that is too ‘remote’ or
‘consequential’ to be the subject of reparation. In some cases, the criterion of ‘direct-
ness’ may be used, in others ‘foreseeability,’ or ‘proximity.’ But other factors may also be
relevant. . . . In international law as in national law, the question of remoteness of dam-
age ‘is not a part of the law which can be satisfactory solved by search for a single verbal
formula.’66
The ILC treated the problem of overdetermination with less hesitancy, albeit with
some equivocation. The Commentary noted that ‘[o]ften two separate factors com-
bine to cause damage,’ and concluded that ‘international practice and the decisions
of international tribunals do not support the reduction or attenuation of reparation
for concurrent causes, except in cases of contributory fault,’67 which, as discussed
below, the Draft Articles address separately.68 But as has been pointed out,69 the
ILC then qualified that statement, including by suggesting that a State should not be
held to reparation for that ‘part of the injury [that] can be shown to be severable in
causal terms from that attributed to the responsible State.’70
Thus, while articulating valuable guidance on where to locate causation in the
overall framework of State responsibility, which has helped to define States’ primary
obligations, in answering the question of what causation actually is, the ILC declined
to provide detailed guidance, concluding that article 31’s principle that that the ‘in-
jury should be in consequence of the wrongful act’ embodies ‘[t]he notion of a suffi-
cient causal link which is not too remote’.71 As Professor Plakokefalos notes, ‘This is
indeed not very illuminating’,72 though the absence of guidance reflects a conscious
decision to leave the task of further delineation to adjudicators, or—as we shall see—
drafters of treaties and other international instruments.73 The shadowland was never
meant to be vanquished, but rather it was left for litigants, lawmakers, judges and
arbitrators, to find a contingent and workable path to illumination.
64
65
ibid 92–3.
66
ibid 93 (footnotes omitted) [quoting Patrick S Atiyah, An Introduction to the Law of Contract (Clarendon Press
1995) 466].
67
ibid.
68
See Subsection III.C.
69
See Plakokefalos (n 4) 480.
70
71
ibid.
72
Plakokefalos (n 4) 480.
73
James Crawford, State Responsibility: The General Part (CUP 2013) 493.
III. TWENTY YEARS AND COUNTING

The ILC Draft Articles helped to reduce ambiguity surrounding the crucial question
whether the causation inquiry sits within liability, or whether it exists as a link be-
tween liability and injury. The difficult task of answering the more intractable ques-
tions of causation has been taken up by litigants and adjudicators on a case-by-case
basis. While by no means comprehensive, this section briefly reviews how tribunals
have approached some of the most common issues associated with proximate caus-
ation and causation in fact, with an eye to investment disputes. There is no consensus
on the operative questions, but it remains beyond dispute that these questions are im-
portant when assessing State responsibility.
A. Formulating Proximate Cause

All legal systems have some mechanism to filter remote effects of a wrongful act from
the more proximate ones, such that the reparation obligation does not extend indefinite-
ly. International law is no different, and the concept of proximate cause is firmly estab-
lished as an element of international law.74 As the commentary to the Draft Articles
recognizes, ‘causality in fact is a necessary but not a sufficient condition for reparation.
There is a further element, associated with the exclusion of injury that is too “remote”
or “consequential” to be the subject of reparation’.75 This “notion of a sufficient causal
link which is not too remote is embodied in the general requirement in article 31 that
the injury should be in consequence of the wrongful act.”76 However, 20 years of ex-
perience with the Draft Articles has not yielded much consensus as to how to describe
the concept, and various approaches and terms have been used.77
Traditionally, tribunals often framed the inquiry in terms of the ‘directness’ of the
cause and effect, under which an injury is compensable if it follows as an immediate
consequence of the wrongful State act.78 This framing, perhaps most famously
deployed in the aforementioned Alabama Claims Case between the United States and
the UK, has been criticized as being ambiguous and of ‘scant utility’,79 with no ‘clear
notion’ of what is direct and what is indirect.80 As one early commentator noted, ‘the
same injury is dismissed as being indirect in one case, yet admitted in another case’.81
More recently, several tribunals have framed the inquiry as one of foreseeability,82
under which ‘legal’ causation exists ‘if the damage . . . deriving from the deprivation of the
legal safety of the investment is foreseeable and occurs in a normal sequence of events’.83
74
ILC Report and Commentary (n 5) 92–3; see also, eg, Dix Case, United States v Venezuela, 9 RIAA 119, 121
(‘International as well as municipal law denies compensation for remote consequences.’).
75
76
ibid.
77
See generally Alexandrov and Robbins (n 17) 318–45.
78
See eg, Gaetano Arangio-Ruiz, Special Rapporteur, ‘Second Report on State Responsibility’ (1989) reprinted in
II(1) Yearbook of the International Law Commission 1, 12, 18; Plakokefalos (n 4) 484; Clyde Eagleton, ‘Measure of
Damages in International Law’ (1929) 39 Yale LJ 52, 67.
79
Arangio-Ruiz (n 78) 12.
80
ibid [quoting Ladislas Reitzer, La reparation comme conséquence de l’acte illicite en droit international (1938) 180].
81
ibid [quoting Reitzer (n 80) 180].
82
See Alexandrov and Robbins (n 17) 331–2.
83
CME Czech Republic BV v Czech Republic, UNCITRAL, Partial Award (13 September 2001) para 527; see, eg,
Olin Holdings Limited v State of Libya, Case No 20355/MCP, Final Award para 453 (ICC, 25 May 2018) [‘The Tribunal
considers that in order to prove that Libya’s measures caused an underperformance on the part of Olin, the Claimant
had to establish (1) the causality between Libya’s breaches of the BIT and Olin’s underperformance and (2) that Libya’s
breaches are the proximate cause of Olin’s underperformance, or in other words, that the underperformance was a fore-
seeable consequence of Libya’s breaches.’].
In CME Czech Republic BV v Czech Republic,84 for instance, the Tribunal rejected the
State’s contention that the passage of time by itself could destroy causation and restated
the inquiry in terms of whether the injury was the foreseeable consequence of the wrong-
ful act.85 The Eritrea–Ethiopia Claims Commission adopted the same approach, opining
that a focus on the ‘element of foreseeability, though not without its own difficulties, pro-
vides some discipline and predictability in assessing’ causation.86
More tribunals have been willing to use the general concepts of ‘proximity’ or ‘re-
moteness’ as ways to filter compensable injuries from non-compensable injuries.87
An example of this, well summarized by Professor Stanimir Alexandrov and Joshua
Robbins,88 is the Tribunal’s decision in SD Myers, Inc v Government of Canada,89
which expressly rejected inquiries based on foreseeability and emphasized instead the
need for a ‘sufficient link’ that ensures that the harm must not be too remote’.90 In
the Tribunal’s eyes, ‘[r]emoteness is the key’.91
Without empirical data, it is not clear whether these different formulations have
had meaningfully different results in practice, and [t]here is limited commentary on
what . . . these notions mean’.92 However, given that, at least in theory, the different
formulations could lend themselves to subtly different emphases and therefore po-
tentially different results, the question merits further discussion.
B. Novus Acts Interveniens

An issue that often arises in the context of proximate causation, however formulated,
is the principle of intervening causation, which addresses whether a supervening act
or event has broken the chain of causation.
The issue has been with us for generations. In the John Case,93 the UK sought to
disclaim an obligation to pay damages for seizing a US vessel, where the vessel was
ultimately destroyed by what it called an ‘act of God’.94 The UK’s actions were the
‘but for’ cause of the destruction—as Professor Plakokefalos notes, the ‘vessel was . . .
navigated by the respondent through a course that it would not have followed other-
wise’.95 Thus, inherent in the case was the question whether the UK could escape
compensation due to the intervening act of God, which the Tribunal in that case
answered in the negative.96
The Draft Articles seem to foresee a broad concept of causation that might at first
seem to tilt the scales in favor of finding compensable harm in cases involving
84
CME Czech Republic (n 83).
85
ibid para 527; Alexandrov and Robbins (n 17) 331–2.
86
Guidance Regarding Jus ad Bellum Liability (Eritrea v Ethiopia), Decision No 7 p 4 para 13 (Eritrea–Ethiopia
Claims Commission, 27 July 2007).
87
See Alexandrov and Robbins (n 17) 324; see also, eg, Karkey Karadeniz Elektrik Uretim AS v Islamic Republic of
Pakistan, ICSID Case No ARB/13/1, Award (22 August 2017) para 448 (‘The correct test is not in dispute: Karkey has
to show that but for Pakistan’s alleged breaches of the Treaty it would not have suffered these losses. Karkey has to show
the fact of its loss or damage, and the necessary causal link. It has also to show that any damage is not too remote and
speculative.’).
88
ibid paras 327–8.
89
SD Myers, Inc v Government of Canada, UNCITRAL, Second Partial Award (21 October 2002).
90
ibid para 159.
91
ibid; see also Joachim Knoll and Tania Singla, ‘Causation in International Investment Law: Putting Article 23.2 of
the India Model BIT into Context’ (2020) 8 India J Arb Law 83, 90; Alexandrov and Robbins (n 17) 327–8.
92
Martin Jarrett, Contributory Fault & Investor Misconduct in Investment Arbitration (CUP 2019) 45.
93
United States v Great Britain (4 November 1864) I Recueil des arbitrages internationaux (1905) 748.
94
ibid paras 748, 750.
95
96
John Case, I Recueil des arbitrages internationaux 750–1.
intervening causes.97 Citing United States Diplomatic & Consular Staff in Tehran98 and
the Corfu Channel Case, the Commentary suggests that when ‘two separate factors
combine to cause damage, . . . international practice and the decisions of internation-
al tribunals do not support the reduction or attenuation of reparation’ except in cases
of contributory fault.99
But the Draft Articles’ guidance is more nuanced. The cases cited arguably have
little to do with intervening causation. In United States Diplomatic & Consular Staff in
Tehran, the ICJ concluded that Iran was under an obligation to make reparation to
the United States for Iran’s failure to protect US diplomatic offices from seizure in
1979—a breach of a duty that by its nature necessarily envisioned third-party wrong-
doing.100 In the Corfu Channel Case, no cause intervened after Albania’s breach of
duty. More importantly, the Commentary itself carefully acknowledges that, in some
cases, some part of the injury can be shown to be several in causal terms from that
attributed to the responsible State’.101
Perhaps understandably, then, the issue of intervening causation has played out in
several disputes with differing treatment, including in the investor–State realm.
In the much-discussed Lauder . Czech Republic,102 for example, a US investor
brought a claim against the Czech Republic under the United States–Czech
Republic BIT.103 The Tribunal ultimately found liability but denied the Claimant’s
request for compensation on the ground that the subsequent acts of the Claimant’s
Czech co-investor’s acts were the real and proximate cause of the Claimant’s injury,
framing the inquiry as follows:
Even if the breach . . . constitutes one of several ‘sine qua non’ acts, this alone is not sufficient.
. . . [T]he Claimant has to show that the [intervening] acts of [the Czech party] were not so
unexpected and so substantial as to have to be held to have superseded the initial cause and
therefore become the main cause of the ultimate harm. This the Claimant has not shown.104
As Professor Alexandrov and Joshua Robbins explain, the Tribunals in Saluka
Investments BV v Czech Republic105 and Tradex Hellas SA v Republic of Albania106 have
explored the same issue with divergent results.107 Perhaps most famously, the CME
Tribunal assessed damages in a claim brought by a Dutch entity that the Lauder
Claimant controlled.108 Addressing the same basic factual scenario, the CME
Tribunal treated both the State’s and the Czech investor’s acts as concurrent wrongs,
and—in reference to the Commentary to the Draft Articles—concluded that the
State could not escape its reparation obligation merely because another party had
contributed to the injury through its own wrongdoing.109
97
CME Czech Republic (n 83) para 580.
98
United States Diplomatic and Consular Staff in Tehran (United States of America v. Iran) [1980] ICJ Rep 1.
99
ILC Report and Commentary (n 5) 93. Contributory fault is addressed in Subsection III.C.
100
United States Diplomatic and Consular Staff in Tehran (n 98) 32–4.
101
102
Ronald S Lauder v Czech Republic, UNCITRAL, Final Award (3 September 2001).
103
ibid para 11.
104
ibid para 234; see generally Alexandrov and Robbins (n 17) 335–6.
105
Saluka Investments BV v Czech Republic, PCA, Partial Award (17 March 2006).
106
Tradex Hellas SA v Republic of Albania, ICSID Case No ARB/94/2, Final Award (9 April 1999).
107
Alexandrov and Robbins (n 167) 336–7.
108
See CME Czech Republic BV v Czech Republic, UNCITRAL, Final Award (24 March 2003) paras 6, 25, 423; 161.
109
See CME Czech Republic (n 83) para 580 (‘[A] State may be held responsible for injury to an alien investor where it
is not the sole cause of the injury; the State is not absolved because of the participation of other tortfeasors in the inflic-
tion of the injury.’).
C. Investor Risk
Another problem that has featured in several investor–State cases, such as Bear Creek
Mining, is whether the State’s breach is really the proximate cause of the investor’s
loss where the investor itself might be held to blame.
This question is complex and often overlaps with the Draft Articles’ separate treat-
ment of contributory fault in article 39, which provides that ‘[i]n the determination
of reparation, account shall be taken of the contribution to the injury by wilful or neg-
ligent action or omission of the injured State or any person or entity in relation to
whom reparation is sought’.110 As drafted, the article ‘allows to be taken into account
only those actions or omissions which can be considered as wilful or negligent, i.e.
which manifest a lack of due care on the part of the victim of the breach for his or her
own property or rights’.111
Some tribunals have broadly interpreted this principle and denied compensation
in cases where the investor was deemed to have contributed to the injury by making
investments despite the existence of adverse market conditions.112 For instance, in
Olguı́n, the Claimant purchased securities from a financial institution, which the
State allegedly failed to regulate properly, ultimately leading to losses.113 The
Tribunal agreed that ‘Paraguay’s general conduct’ as to the matter at hand ‘was not
overly sound’, but opined that the Claimant bore responsibility by virtue of having
made ‘a speculative, or at best, a not very prudent, investment’.114 Other tribunals
have rejected what Professor Alexandrov and Joshua Robbins have dubbed the
‘blame the victim’ approach advanced by States in particular cases.115
D. Cause-in-Fact
Whether a State’s wrongful act was a cause-in-fact of the investor’s injury is a more
straightforward inquiry in the typical case than the issue of proximate cause. But not
all cases are typical, and several issues have emerged.
One of the most vexing problems is the problem of overdetermination.116 Here,
the Draft Articles’ Commentary’s discussion of United States Diplomatic & Consular
Staff in Tehran is arguably more instructive.117 However, substantial confusion
remains. Various sufficiency-weighted tests have been proposed for overdetermined
cases. Some have endorsed reviewing the State’s breach to see whether it was a ‘sub-
stantial factor’ in contributing to the claimant’s injury.118 Others have suggested
adoption of the so-called ‘NESS’ test, under which ‘a particular condition was a
cause of (contributed to) a specific result if and only if it was a necessary element of a
set of antecedent actual conditions that was sufficient for the occurrence of the
110
ARSIWA (n 3) art 39.
111
112
See generally Alexandrov and Robbins (n 17) 338–42; see also, eg, Cargill, Incorporate v Republic of Poland, ICSID
Case No ARB(AF)/04/2, Final Award (29 February 2008) paras 669–70.
113
Eudoro Armando Olguı́n v Republic of Paraguay, ICSID Case No ARB/98/5, Award (26 July 2001) paras 45, 48–9,
55, 64(b).
114
ibid para 65(b); see also Alexandrov and Robbins (n 17) 340–1.
115
Alexandrov and Robbins (n 17) 341; see also, eg, ADC Affiliate Ltd v Republic of Hungary, ICSID No ARB/03/16,
Award (2 October 2006) para 424.
116
See generally Plakokefalos (n 4) 483–91.
117
See Hulley Enterprises Limited v Russian Federation, PCA Final Award (18 July 2014) paras 1773–5.
118
Michael S Moore, Causation and Responsibility (OUP 2009) 88 (describing the inquiry and shortcomings).
result’.119 No particular test has prevailed, and tribunals often fail to address the
question with clarity.
Other problems of factual causation may exist even in the absence of third-party
action. Tribunals disagree, for example, whether factual causation exists where the
State’s breach deprives the investor of a mere possibility of success. In Lemire v
Ukraine,120 the Tribunal concluded that Ukraine had violated its obligations under
the United States–Ukraine BIT by denying the claimant a fair process in the alloca-
tion of radio broadcasting frequencies.121 As Professor Heath has written, the prob-
lem was that ‘it was not immediately obvious that, had the irregularities in the tender
process been eliminated, the claimant would have obtained the necessary licenses
and fulfilled its business plans’.122 The Tribunal ultimately required the Claimant to
demonstrate that, if the tenders had been conducted in a fair and equitable matter,
the Claimant would have won the frequencies in question, and that the Claimant
would have been able to fulfill his business plan.123 After suggesting that ‘[i]f it can
be proven that in the normal cause of events a certain cause will produce a certain ef-
fect, it can be safely assumed that a (rebuttable) presumption of causality between
both events exists’,124 the Tribunal concluded that the Claimant had met its burden,
though only over a dissent that faulted the Tribunal for failing to approach the caus-
ation inquiry with sufficient attention.125
In Bilcon of Delaware v Government of Canada,126 by contrast, the Tribunal took a
more restrictive approach. The Tribunal concluded that Canada had denied the
Claimant a lawful environmental review in regard to a proposed quarry and marine
terminal.127 However, the Tribunal found that the Claimant was not entitled to its full
claimed damages because it had failed to prove that, but for the flaws in the review
process, it would have obtained the requisite environmental permission.128 Citing the
Bosnian Genocide Case, the Tribunal concluded that the Claimant had to meet a ‘high
standard of factual certainty to prove a causal link between breach and injury’, which
it described as a showing with ‘sufficient degree of certainty’ that ‘absent a breach, the
injury would have been avoided’.129 Because ‘various outcomes of a NAFTA-
compliant [review process] are reasonably conceivable’,130 and because the project
could have been approved ‘with conditions that would render it economically un-
viable’,131 and the possibility that other regulators would have rendered the project
unviable,132 the Tribunal concluded that the Claimant had not met this burden.133
119
Richard W Wright, ‘Causation, Responsibility, Risk, Probability, Naked Statistics, and Proof: Pruning the
Bramble Bush by Clarifying the Concepts’ (1988) 73 Iowa L Rev 1001, 1019; Plakokefalos (n 4) 477–8.
120
Joseph Charles Lemire v Ukraine, ICSID Case No ARB/06/18, Award (28 March 2011).
121
Joseph Charles Lemire v Ukraine, ICSID Case No ARB/06/18, Decision on Jurisdiction and Liability (14 January
2010) paras 210–19, 421.
122
Pearsall and Heath (n 7) 102.
123
ibid 102–3.
124
Lemire, Award (n 120) para 168.
125
Pearsall and Heath (n 7) 103–4; Lemire, Award (n 120) paras 171–208; Lemire v Ukraine, ICSID Case No ARB/
06/18, Dissenting Opinion of Dr.Jürgen Voss (1 March 2011) xi–xiii paras 78–106.
126
Bilcon of Delaware v Government of Canada, PCA Case No 2009-04, Award on Damages (10 January 2019). The
United States made a submission in this proceeding while the author served as counsel within the United States
Department of State.
127
ibid para 19.
128
129
ibid para 110.
130
ibid para 169.
131
ibid para 171.
132
ibid para 172.
133
ibid para 175.
However, the Tribunal did award the Claimant the ‘equivalent to the value of the op-
portunity to have the environmental impact of the [project] assessed in a fair and non-
arbitrary manner’.134
The quantification of damages, for which expert evidence proving a ‘but for’ scen-
ario is common, has also proven to be rife with dispute about factual causation.
Overlooked in the noise surrounding the Micula saga is that the Tribunal determined
that Romania, in order to accede to the European Union, breached its obligations to a
Swedish investor by rescinding certain incentives.135 Romania sought to expand the
causation inquiry by arguing that the quantification of any injury should be deter-
mined by reference to what would have happened had Romania delayed accession to
the European Union.136 After considering the difficult question of ‘whether acts “of
general application,” such as accession to the European Union’ should have ‘specific
effect with respect to specific persons, such as the mitigation of damage’, the Tribunal
ultimately left the State to ‘bear the consequences’ of the uncertainty on the matter.137
In the end, ‘international adjudicatory bodies follow different approaches in deal-
ing with similar [causation] issues’, and reach inconsistent outcomes.138 This is un-
surprising, given that the causation inquiry, while firmly established as an element of
the law on State responsibility, was and remains largely undefined. The question,
then, is what this means for the future. How should we go about the inquiry into
knowing something by knowing its cause? What thorny issues await us on our path
through the shadowland?
IV. LOOKING AHEAD

Empirical research into the various approaches used by tribunals may be a helpful
tool in illuminating the path forward for the next 20 years. Though decisional law in
the international realm often lacks binding effect, its persuasive value is considerable.
Against this backdrop, comprehensive categorization of the analytical methods
deployed by tribunals, along with study of their respective popularity and whether
they tend to produce different outcomes, would do much to advance the debate.
Further delineation of some of the questions identified by the ILC but left unad-
dressed in the Draft Articles can meaningfully progress only with more structured in-
sight into how the law has developed.
That progress will be particularly important given that issues of causation in the
law of State responsibility will only become more frequent and difficult,139 as we shall
explore below. Given that indeterminacy in the causation inquiry can potentially
leave tribunals with wide discretion on an outcome-determinative question, more
specific insight into existing practices in investor–State cases will also play an import-
ant role in informing the ongoing reform-minded debate about predictability and
consistency in investor–State dispute resolution more generally.140
134
ibid para 176.
135
Micula (n 26) 872.
136
137
ibid para 1173; Pearsall and Heath (n 7) 98.
138
139
ibid 472.
140
See eg, United Nations Commission on International Trade Law, Working Group III (Investor–State Dispute
Settlement Reform) 36th Sess., UN Doc No A/CN.9/WG.III/WP.150, Possible Reform of Investor–State Dispute
Settlement (ISDS): Consistency and Related Matters 2–14 (28 August 2018).
But until such clarity is obtained, the law of causation is likely to swing from the
general, without sufficient attention to the topic, to the specific, with precise standards
for litigants to meet. Indeed this is particularly true of the law of causation in investor–
State disputes. As a preliminary matter, some caution is warranted when evaluating
causation within this context. As Professor Heath has made clear, the Draft Articles
by their own terms do not apply where ‘special rules of international law’ provide a
different rule.141 This means that where States have expressly addressed causation in
a relevant instrument, such as an international investment agreement, the way in
which they do so is likely to be far more relevant than general principles.
Most investment treaties are silent as to causation, without providing any defin-
ition of how the inquiry should proceed or what its boundaries are. In the absence of
any guiding language, adjudicators have simply turned to the Draft Articles, the deci-
sions of other tribunals, and sometimes national law.
This is changing. States have learned through practice the potential utility of speci-
fying the causation standards used in assessing State responsibility, and the problems
that may arise from indeterminacy about how to approach causation.
An increasing number of recent international investment agreements, for example,
expressly refer to causation. An early such reference, in the North American Free Trade
Agreement (NAFTA), provides that claimants may recover for losses incurred ‘by rea-
son of, or arising out of’ a breach of a State.142 This language, while still affording sub-
stantial flexibility to tribunals, makes clear that causation is relevant to the question of
injury and damage, and helps to ensure that tribunals will focus on the inquiry as a dis-
tinct analytical element. This language is now a feature in dozens of other international
investment treaties,143 including the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP).144 Other treaties include similar language.145
In what may be an emerging trend, India has recently pressed for more even specif-
ic language.146 Article 23 of the India–Belarus BIT provides that the investor bears
the burden of proving that its losses ‘were directly caused by the [State’s] breach’.147
Similarly, several commentators have pointed to the specificity of the Indian Model
BIT, which sets forth an apparently rigorous causation inquiry.148 In the relevant
part, the Model BIT requires the investor to prove that:
141
Pearsall and Heath (n 7) 89 and n 23; ARISWA (n 3) art 55.
142
North American Free Trade Agreement (signed 17 December 1992, entered into force 1 January 1994) (NAFTA)
art 1116(1).
143
See eg, Agreement Between the Government of the Republic of Turkey and the Government of the Republic of
Ghana for the Reciprocal Promotion and Protection of Investments (signed 1 March 2016) art 14(3)(a); Agreement
Between the Government of the United Mexican States and the Government of the People’s Republic of China on the
Promotion and Reciprocal Protection of Investments (signed 11 July 2008, entered into force 6 June 2009) art 13(1);
Agreement Between the Government of the Republic of Korea and the Government of the State of Kuwait for the
Promotion and Protection of Investments (signed 15 July 2004, entered into force 31 August 2007) art 8(1).
144
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into
force 30 December 2018 for Canada, Australia, Japan, Mexico, New Zealand, and 14 January 2019 for Vietnam); see
art 9.19(1)(a)(ii).
145
See eg, Agreement Between the United Mexican States and the Federal Republic of Germany on the Promotion
and Reciprocal Protection of Investments (signed 25 August 1998, entered into force 23 February 2001) Protocol para
6, (providing that ‘an alleged breach . . . must be causally linked to loss or damage’); Treaty Between the United States
of America and the Oriental Republic of Uruguay Concerning the Encouragement and Reciprocal Protection of
Investment (signed 4 November 2005, entered into force 31 October 2006) Protocol para 2 (noting that the claimant
must prove ‘that the breach was the proximate cause of [its] damages’).
146
Knoll and Singla (n 91) 83–4.
147
Treaty Between the Republic of Belarus and the Republic of India on Investments (signed 24 September 2018) art
23(2); Knoll and Singla (n 91) 95.
148
Knoll and Singla (n 91) 95; Aditya Singh, ‘Investor–State Dispute Settlement and India’ in Dushyant Dave and
others (eds) Arbitration in India (Kluwer Law 2020) ch 13 section 13.2.1.3.
the investment, or the investor with respect to its investment, has suffered actual and
non-speculative losses as a result of the breach; and that those losses were foreseeable and
directly caused by that breach.149
This formulation, which was adopted into the India–Kyrgyzstan BIT,150 provides far
more specificity, and alludes to a compound inquiry that combines elements of the
foreseeability and directness approaches.
As the experience with NAFTA, the CPTPP and other leading multilateral
arrangements shows, investment agreement provisions are often influential, and time
will reveal the durability and popularity of India’s particular effort to provide further
guidance on the question of causation. What is clear is that States are alert to the
problem of causation and are likely to use treaties to continue to guide the develop-
ment of the law in this area.
V. CONCLUSION: THE NEXT 20 YEARS AND THE

‘UNILATERAL CAUSATION QUANDARY’
Relationships among States are becoming more complex and, as Professor
Plakokefalos notes, it is likely that there will be a ‘corresponding increase in the com-
plexity of the potentially harmful outcomes of these relationships’.151 At the same
time, States have expressed willingness to act unilaterally on issues of serious global im-
portance. In this context, as unilateral or even loosely co-ordinated multilateral action
on matters becomes more prevalent in areas that have serious implications for inter-
dependent systems (eg action on matters such as geoengineering, pandemic response,
sanctions, use of kinetic force, cybersecurity, cyberwarfare and climate change), who
or what is truly responsible for an injury that would ordinarily be attributable to a single
State will become more obscure. For some future harms, we may never ‘know’ who or
what caused the breach of international law. We can call this, for ease, the ‘unilateral
causation quandary’, and it will only become more acute in the years ahead.
An increase in independent State action, whether truly unilateral or loosely co-
ordinated, in an increasingly interconnected world will force more tribunals to ad-
dress issues of how decisions of a State figure into questions of responsibility, and
who will bear the burden of indeterminacy. Though the basic causation questions
have been with us for centuries, the unilateral causation quandary threatens to make
these questions even more difficult to solve because it necessarily involves multiple
States’ independent action—and often that action is on global crises of the utmost
importance.
We can already begin to see the unilateral causation quandary in some of the more
pressing issues of our time. Scholars are examining how causation could pose hurdles
in claims against States arising out of the COVID-19 pandemic.152 Think, too, about
the implications of the unilateral causation quandary as States seek to take bolder in-
dependent action to combat the negative effects of climate change. If State A and
State B both engage in geoengineering that State C alleges contributed to a disastrous
149
India Model Bilateral Investment Treaty art 23.2 (emphasis added).
150
Bilateral Investment Treaty Between the Government of the Kyrgyz Republic and the Government of the Republic
of India (signed 14 June 2019) art 23.2.
151
152
See eg, Martins Paparinskis, ‘Covid-19 Claims and the Law of International Responsibility’ (2020) 11 J Intl Hum
Legal Studies 311.
crop harvest, who, if anyone, must pay reparation? In the investor context, the same
problem could inhere in claims against States that react forcefully to combat climate
change itself (to the extent that liability can be found in the first instance). Or the flip
side—there could be difficult causation questions with claims against States that do
not take action on this front. As the ICJ recently explained in Costa Rica v
Nicaragua,153 causation is particularly difficult in cases concerning environmental
damage because such damage often has multiple causes that make it difficult or even
impossible to ascertain a causal link in the traditional sense.154
These questions will also play out in new realms, such as space law, as tribunals
begin to sort out causation and responsibility in the 21st-century analogues of Corfu
Channel and Oil Platforms.155 If several States have negligently, but in markedly vary-
ing degrees, contributed to the hazard of space junk, how will tribunals approach
claims arising out of collisions that create financial losses and other injuries, poten-
tially including significant communications and economic disruption?156
As we push forward on the unilluminated, unbeaten path of 21st-century unilat-
eralism, and possible responsibility therefrom, we can take some comfort from the
light provided by the Draft Articles. Nevertheless, the light from that lantern is dim
and only effective in the hands of skilled practitioners who are willing to meet the dif-
ficult questions of causation without hesitation.
153
Maritime Delimitation in the Caribbean Sea and the Pacific Ocean (Costa Rica v Nicaragua) and Land Boundary in the
Northern Part of Isla Portillos (Costa Rica v Nicaragua) Judgment [2018] ICJ Rep 15.
154
ibid 26 (‘In cases of alleged environmental damage, particular issues may arise with respect to the existence of
damage and causation. The damage may be due to several concurrent causes, or the state of science regarding the causal
link between the wrongful act and the damage may be uncertain.’).
155
See eg, Joel A Dennerley, ‘State Liability for Space Object Collisions: The Proper Interpretation of “Fault” for the
Purposes of International Space Law’ (2018) 29 Eur J Intl Law 281, 282–3 (observing that the Convention on
International Liability for Damage Caused by Space Objects ‘does not define the key terms of causation’).
156
Chloee Weiner, ‘New Effort to Clean Up Space Junk Reaches Orbit,’ (21 March 2012), NPR (describing the
growing problem of space junk and discussing implications of an Indian anti-satellite test that in 2019 created ‘hundreds
of pieces of debris’).

Causation and The Draft Articles On State Responsibility

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Causation and The Draft Articles On State Responsibility

Uploaded by

Copyright:

Available Formats

ICSID Review, Vol. 37, No. 1-2 (2022), pp.

I. THE CAUSATION INQUIRY

A. Disputes Among States

Tribunal considered causation-related defenses premised on investor assumption

C. Human Rights Law

II. THE DRAFT ARTICLES AND CAUSATION

Every internationally wrongful act of a State entails the international responsibility of

III. TWENTY YEARS AND COUNTING

A. Formulating Proximate Cause

B. Novus Acts Interveniens

IV. LOOKING AHEAD

V. CONCLUSION: THE NEXT 20 YEARS AND THE

You might also like