The Clean Hands Doctrine and the Status of an Investment: Grounds for Non-Recognition and Access to Arbitral Protection

The article examines the legal relevance of investor misconduct for determining the status of an investment and the admissibility of claims seeking international arbitral protection under investment treaties. It outlines the principal legal models for addressing violations of the host State’s domestic law, including the non-recognition of an asset as a protected investment and the declaration of claims inadmissible at preliminary stages of proceedings. The article analyses the relationship between jurisdiction and admissibility and explores the limits of applying the clean hands doctrine as a procedural filter designed to prevent the pursuit of treaty protection derived from serious illegality. It further argues for a good-faith and proportionate approach capable of maintaining an appropriate balance between the host State’s public interests and the investor’s legally protected interests, while ensuring legal certainty and preventing abuse of rights.