The Sanctions Wave Hitting ISDS: Why Necessity and Force Majeure Are Having a Moment
Sanctions-related investor-state claims are no longer a marginal footnote in investment arbitration. According to recent tracking by the International Institute for Sustainable Development, at least 28 cases have now been filed or publicly threatened by sanctioned Russian individuals or companies, with claimed damages totalling roughly USD 62 billion — more than half of them initiated since 2025. Ukraine alone faces seven claims under EU member-state bilateral investment treaties and two more under its treaty with the United Kingdom, all from Russia-linked claimants challenging sanctions and related State measures.
These cases, together with the pandemic-era and climate-driven emergency claims that preceded them, are converging on the same two legal doctrines: necessity and force majeure. Yet until now there has been no single volume examining how arbitral tribunals have actually applied these defences across economic crises, armed conflict, pandemics, and sanctions regimes — as opposed to how treaty text and customary international law describe them in the abstract.
States of Emergency: The Role of Necessity and Force Majeure in Investor-State Dispute Settlement (Elif Kapisiz, Kluwer Law International, 2026) fills that gap. It compares treaty exceptions, customary international law, and contractual force majeure clauses side by side, and sets out the burden of proof and evidentiary standards tribunals have actually applied when States invoke these defences.
For practitioners, the book supports three immediate tasks: assessing whether a pending sanctions-related claim is likely to succeed on a necessity or force majeure defence, drafting force majeure and hardship clauses for State and State-owned entity contracts that anticipate sanctions and geopolitical disruption, and briefing clients on the Global North–South divide in how these defences are received by different tribunals.
For academic and institutional law libraries, this is a timely acquisition: with sanctions-related ISDS claims accelerating and climate-emergency claims expected to follow a similar path, collections on investor-State dispute settlement and public international law will be asked for this material with increasing frequency.
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Q&A
Q: How many sanctions-related investor-state claims have been filed against Ukraine and its allies?
A: At least 28 cases have been filed or threatened by sanctioned Russian individuals or companies, with claimed damages of roughly USD 62 billion; Ukraine alone faces nine of these claims under its bilateral investment treaties.
Q: What is the difference between the necessity defence and force majeure in investor-state arbitration?
A: Necessity allows a State to justify measures taken to protect an essential interest against grave and imminent peril, while force majeure concerns events beyond the State's control that make performance of an obligation impossible; both interact differently with treaty text than they do with ordinary contract law.
Q: Can sanctions regimes be challenged through investor-state arbitration?
A: Yes — sanctioned investors have increasingly turned to investment treaties to challenge State measures, and tribunals are now developing a body of practice on how necessity and force majeure apply to sanctions-driven disputes.
Q: Who bears the burden of proof when a State invokes an emergency defence in ISDS?
A: Arbitral practice generally places the burden on the State to establish each element of the defence it invokes, and the evidentiary standards tribunals apply are a central focus of this book.
Q: Where can I buy States of Emergency: The Role of Necessity and Force Majeure in Investor-State Dispute Settlement?
A: It is available now from CLNZ Books, with worldwide shipping and institutional ordering via our Request a Quote page.