On The Possibility Of Recourse To Human Rights In International Arbitration

Ноябрь 3, 2022

Dmitry Artyukhov, LL.M.,
Arbitration.ru Journal Editor-in-Chief,
Counsel, Klochenko and Partners Law Firm

In the present geopolitical situation, many countries politically and legally drift away from international bodies created in the aftermath of World War II. However, such countries will still willingly or unwillingly be involved in international disputes, and it is the arbitration tribunals that will take on the function of applying international law by the means of awards rendered. Shortly, one can expect a significant rise in the number of cases where not only individuals but also legal entities will invoke human rights, e.g., the right to property (Article 1 of Protocol 1 to the ECHR), due to temporal or permanent expropriation of their assets. The tribunals must be cautious in addressing such claims as there is a possibility to go ultra vires (beyond a tribunal’s jurisdiction) to the detriment of the arbitral award.


Governments of countries that have never been members to the Council of Europe or have recently left it[1],[2] may eventually wish to resort to human rights provisions enshrined in the ECHR when:

– their athletes get involved in sports arbitration at CAS and etc. (e.g. resort to WADA Code provisions for the protection of underage athletes which derive from international human rights tools for the protection of children.[3]

– their corporations face international commercial arbitration. Both in international and domestic litigation and arbitration proceedings legal entities have invoked the right to a fair trial under Article 6 § 1 of the ECHR like in cases such as Sovtransavto Holding v. Ukraine 2002,[4] VGT Verein Gegen Tierfabriken v. Switzerland 2009, OAO Neftyanaya Companya YUKOS v. Russia 2011; the right to property under Article 1 of Protocol No. 1, see Eugenia Michaelidou Developments Ltd and Michael Tymvios V. Turkey, 2008, Tilts Communications A/S, Sonera OYJ, Cable & Wireless plc v. the Republic of Latvia and Lattelekom SIA (settlement achieved prior to ECtHR ruling), the right to freedom of expression (Article 10 of the ECHR) in Sunday Times v. United Kingdom 1979 (all cases before the ECtHR), and other human rights.

While the availability of human rights to individuals generally presents no theoretical difficulty, the general question of whether human rights can be invoked by legal entities, which are fictitious constructs of law, poses a difficulty in legal theory per se.[5] There are studies that deny such a possibility.[6] There are also works that a) confirm theoretical applicability of human rights to corporations and b) address the topic of the ESG, meaning the environmental, social and governance responsibility of corporations in the light of human rights provisions[7], but not the corporate entities as subjects (bearers) of human rights themselves. The practice of the ECtHR which has developed and stored relevant case law on the issue confirms such a possibility in general (Autronic AG v Switzerland, 1990, and subsequent case law).

Two cases below show how a resort to human rights provisions may help a company in a dispute. They have been selected for this article as their historic background has telling connections with the present day.


In the Sovtransavto Holding v. Ukraine, the ECHR recognized the Ukrainian executive’s interventions in the proceedings in a commercial dispute and ruled in favour of the applicant – a Russian legal entity.

Sovtransavto was the international freight forwarder operating for the Soviet Union operating a fleet of trucks within it and internationally, especially in the Eastern European countries. Between 1993 and 1997 the Russian-based entity owned 49% shares in its Ukrainian daughter company in the Lugansk Region (Sovtransavto-Lugansk). In 1996-1997, the director of the daughter company Sovtransavto-Lugansk has three times increased its share capital, which enabled the management to assume sole control of the company’s management and assets, and thus become independent of the parent Russian company. The parent company lodged complaints against the actions of the Sovtransavto-Lugansk with the commercial courts of Ukraine, which have repeatedly dismissed them. In the course of national litigation, the Kiev Region Commercial Court issued a favourable decision for the Russian Sovtransavto Holding, but this decision was partially reversed in the appeals court, after an objection (protest) had been lodged by the State Counsel’s Office.

The ECHR recognized the then President of Ukraine Leonid Kuchma sent a letter to the judiciary, the President of the Supreme Arbitration Tribunal, expressly urging him to “defend the interests of Ukrainian nationals” in a particular commercial dispute.

The ECHR stipulated that the haphazard litigation coupled with interventions from the executive “had a direct impact on the applicant company’s right to the peaceful enjoyment of its possessions.” The European court recognized the violation of human rights the Russian company had appealed to – both the right to a fair trial under Art. 6 and the right to peaceful enjoyment of possessions Article 1 of Protocol No. 1 to the European Convention. It awarded the Russian holding 625 thousand Euros of compensation.

In Eugenia Michaelidou Developments Ltd and Michael Tymvios V. Turkey, 2008, the ECHR recognized violations of a right to property of a legal entity when it was barred from using plots of land in its possession.

The origins of the case were deeply rooted in the history of ethnic rivalry between the Greek and the Turkish communities on Cyprus, which burst into open conflict after the island ceased to be a British colony in 1960. The armed movement for accession to Greece, headed by EOKA-B fighters, on one hand, and the counterpressure of the taxima policy supported by the British government lead to a military coup in 1974, to which Turkey responded with an invasion to the island, justifying this action based on the provisions of the 1960 Treaty on the independence of Cyprus. Following the descent of the Turkish forces and the ethnic cleansing on the island, and the consequent introduction of the UN peacekeeper force, the island was divided into the Southern and Northern parts by a buffer zone in 1975. In 1983 the Northern part declared itself as the Turkish Republic of Northern Cyprus (this was condemned by the UN Security Council, the Republic was officially recognized as a sovereign state by Turkey only). The Cyprus issue is one of the painful points repeatedly raised in the talks over Turkey’s much-sought accession to the EU.

The conflict gave rise to two landmark cases where an individual (Loizidou case v Turkey) and a state (Cyprus v Turkey) have protested land expropriations by the Turkish Republic of Northern Cyprus. The court based its ruling on these previous decisions, this time extending the right to property to a company. Thus, the court did not deliberate much on the claim that the Eugenia Michaelidou Developments Ltd was prevented by the Turkish armed forces from having access to their property and using and enjoying possession of it. Inter alia, in its reasoning it quoted the Loizidou decision: “...as a consequence of the fact that the applicant has been refused access to the land since 1974, she has effectively lost all control over, as well as all possibilities to use and enjoy, her property. The continuous denial of access must therefore be regarded as an interference with her rights under Article 1 of Protocol No. 1. <…> It has not, however, been explained how the need to rehouse displaced Turkish Cypriot refugees in the years following the Turkish intervention in the island in 1974 could justify the complete negation of the applicant's property rights in the form of a total and continuous denial of access and a purported expropriation without compensation.”. The ECHR said it saw no reason in the instant case to depart from the conclusions that it reached in the Loizidou case. It confirmed the violation of Article 1 and awarded the applicant with nearly 280 thousand Cypriot pounds of compensation. (I would also add that those interested to sift inspiration for pro-sovereign argumentation in a case on disputed territories should read the dissenting opinion of the Judge F. Gölcüklü).

These cases also demonstrate how the right to property as a human right differentiates from the line of protection rendered by BITs. One may argue that the protection of property rendered by bilateral investment treaties works directly for legal entities and individual investors. That said, the threshold to prove an investment is high, as a prerequisite to qualify something as an investment is action rather than the passive «enjoyment of possessions».

These two cases are also selective. While, for example, the right to a fair trial is unproblematic, and in this or that from is incorporated in the procedural rules of nearly every arbitration institution, availability of other human rights remains questionable.

The prerequisites for the resort of legal entities to the catalogue of human rights and the scope of legal protection rendered by the arbitral tribunals under such circumstances are yet defined very vaguely.


Further, the ultimate goal of most arbitral proceedings is the enforcement of an arbitral award. For a certain category of cases, which number we will see grow exponentially now, namely the expropriation of physical and intellectual property by a sovereign, enforcement has already presented a challenge (see Texaco v. Libya 1978, Tehran, Inc. et al. v. the Government of the Islamic Republic of Iran. et al. 1987, Sporrong and Lönnroth v. Sweden, 1980, the ECtHR, 1989, Tre Traktörer Aktiebolag v. Sweden, the ECtHR, 1989), and will be of acute importance now. Today, legal practitioners refer to the enforcement on quid pro quo basis, e.g. arrest of outstanding debt payments to the sovereign itself or its affiliated companies as compensation for the amount of arbitral award (see Bravin et al. 2022, Artyukhov 2021).[8] However, while thee quid pro quo may feel fine for natural justice, countries that claim to have developed jurisprudence and legal tradition must put the legal reasoning for compensatory enforcement under scrutiny.


It also has to be said that while obviously far not every country in the world is a signatory to the European human rights tools, speaking about such regions as Asia, the Pacific, Africa, and Latin America, it does not mean that the issue of human rights in arbitration is not recognized there.[9]

However, no comprehensive list of such rights exists, and the approach of the ECHR varies case by case. The possible high influence of the recourse to human rights on the arbitration proceedings was noted, the main risk of an award contrary to human rights provisions being challenged on the grounds of public policy and incompatibility with international law.[10]

Ultimately, the arbitration society will need to resolve the following questions: What human rights can be efficiently invoked by legal entities as parties to arbitration and how this would influence the course of arbitration proceedings? Can they be invoked if a state is not a Signatory to the European Convention on Human Rights? These questions should be answered addressed jointly in their interconnection.

[1] Deutsche Welle. 2022. "Russia Formally Departs Council Of Europe | DW | 15.03.2022". DW.COM. https://www.dw.com/en/russia-formally-departs-council-of-europe/a-61136962.

[2] Reuters.com. 2022. “Russia quits Council of Europe rights watchdog”.https://www.reuters.com/world/europe/russia-formally-quits-council-europe-rights-watchdog-2022-03-15/.

[3] "Kamila Valieva Case: CAS Clears 15-Year-Old Russian To Compete At Olympics, To Avoid ‘Irreparable Harm’". 2022. Eurosport. www.eurosport.com/figure-skating/beijing-2022/2022/kamila-valieva-case-cas-clears-15-year-old-russian-to-compete-at-olympics-to-avoid-irreparable-harm_sto8788636/story.shtml.

[4] https://hudoc.echr.coe.int/fre#{%22itemid%22:[%22002-5236%22]}.

[5] Novicka, Sandija. 2004. Use of the European Convention of Human Rights argumentation in arbitration proceedings: When, how. Riga Graduate School of Law Working Papers, (17).

[6] Wood, Stephen, Brett Scharffs. 2002. "Applicability Of Human Rights Standards To Private Corporations: An American Perspective". The American Journal Of Comparative Law 50 (suppl_1): 531-566. doi:10.1093/ajcl/50.suppl1.531.

[7] Yeum, June, Triinu Hiob, Sima Ghaffari, and Reza Beheshti. 2022. "Aligning Human Rights In Business With International Commercial Arbitral Rules - Kluwer Arbitration Blog". Kluwer Arbitration Blog. http://arbitrationblog.kluwerarbitration.com/2021/10/09/aligning-human-rights-in-business-with-international-commercial-arbitral-rules/.

[8] Bravin Mark, Bey Tiana, Bowman Theresa, and Gasanbekova Albina. 2022. «Enforcement and Recovery: Practical Steps». GAR Guide to Investment Treaty Protection and Enforcement. 1st ed.
Artyukhov, Dmitry. 2021. "Per Aspera And Yukos - Has The Biggest Arbitration Claim In History Affected Russian-Western Space Programmes?". Lexology. https://www.lexology.com/library/detail.aspx?g=958db9b5-ebff-4164-be5c-336f6eab5d49.

[9] Castillo, Leyda Sughei. 2012. "The Appeal To Human Rights In Arbitration And International Investment Agreements". Anuario Mexicano De Derecho Internacional 1 (12). doi:10.22201/iij.24487872e.2012.12.394.

[10] Benedettelli, Massimo. 2015. Human rights as a litigation tool in international arbitration: reflecting on the ECHR experience, Arbitration International, Volume 31, Issue 4: 631–659. https://doi.org/10.1093/arbint/aiv036.