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The Greek crisis might prevent foreign investors in Greece from transferring their funds to their home country. If that turns out to be a lasting problem, foreign investors in Greece are not defenseless.

Current developments in the modern Greek drama could not be more suspenseful: The Greek Prime Minister, Alexis Tsipras, caught everyone in Europe by surprise announcing a Greek referendum about the latest bailout terms for 5 July 2015. The Finance Ministers of the Eurozone refused to prolong the financial assistance to Greece and the European Central Bank did not extend its emergency liquidity assistance. The ultimate result is that Greek banks needed close this Monday for a week, and the Greek government introduced capital controls. Companies and individuals have to apply to a commission at the Ministry of Finance if they want to make a bank transfer to a foreign bank account. Only in exceptional cases, a bank transfer will be approved. Depending on the outcome of the Greek referendum, the capital controls might stay in place.

Not only Greeks but also foreign investors in Greece might be affected by the current developments. Foreign investors might be unable to freely dispose over their funds in Greece. The capital controls, thus, conflict with international investment agreements which Greece has signed and which guarantee the free transfer of capital. Therefore, the capital controls imposed by the Greek government might give rise to claims of foreign investors under international investment agreements.

In today’s globalized world, over 2.500 international agreements guarantee the protection of foreign investments. In particular, Bilateral Investment Treaties (BITs) protect foreign investors against measures of the host state which affect their investment. Greece has concluded 39 BITs with countries from all over the world (see table below) and is also a member to different multilateral treaties such as the Energy Charter Treaty.

BITs, by standard, include material guarantees on which foreign investors can rely upon. One example is the guarantee to accord foreign investors “at all times […] fair and equitable treatment”. The ambit of this so called FET-clause is extremely wide. Another guarantee, and the one which is of particular interest now, is the guarantee of free transfer of capital and returns. Such guarantee is contained in almost every BIT. To give an example: Article 4 of the Greece-Germany BIT from 1963 reads:

“Jeder Vertragsstaat gewährleistet den Staatsangehörigen und Gesellschaftern des anderen Vertragsstaates den Transfer des Kapitals und der Erträgnisse sowie im Falle der Liquidation den Transfer des Erlöses.“

In English:

Each Contracting State shall guarantee the investors and shareholders of the other Contracting State the transfer of capital and returns and in case of liquidation the transfer of proceeds”

Investors might be able to argue that the capital controls imposed by the Greek government restrict their ability to “transfer … capital and returns” and therefore violate the BIT guarantees. On the other hand, Greece might argue that it is exempt from liability. Greece might rely on the internationally recognized state of necessity defence which played a controversial role in earlier state financial crises (cf. the ICSID cases: CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8; LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc. v. The Republic of Argentina, ICSID Case No. ARB/02/1).

How can an investor invoke a violation of the BIT guarantees? Most BITs provide that investors can initiate international arbitration proceedings. As can be seen in the table below, the investor usually has the choice to bring an arbitration under the UNCITRAL Rules or under the auspices of ICSID. Only the Greek BIT with Germany does not contain an arbitration clause. However, that does not mean that German investors necessarily have to initiate state court proceedings in Greece. German investors might be able to initiate investment arbitration proceedings relying upon the most favored nation provision in Article 3.5 of the Greece-Germany BIT and an arbitration clause in a BIT between Greece and a third country.

The Greek capital controls were only put in place on Monday and still apply. It is too early to predict when capital controls will be lifted and what will happen thereafter. Therefore, it remains to be seen whether investors will raise claims against Greece. However, as this article shows, if the capital controls were to prevent a foreign investor from freely using its funds, this investor might be able to initiate arbitral proceedings against Greece and claim damages.


BIT: Greece – … In force since Dispute Resolution Clause
Albania 4 Jan 1995 UNCITRAL, ICSID
Algeria 21 Sept 2007 UNCITRAL, ICSID
Armenia 28 Apr 1995 UNCITRAL, ICSID
Azerbaijan 3 Sept 2006 UNCITRAL, ICSID
Bosnia and Herzegovina 15 June 2007 UNCITRAL, ICSID
Bulgaria 29 Apr 1995 UNCITRAL
Chile 27 Oct 2002 UNCITRAL, ICSID
China 21 Dec 1993 UNCITRAL, ICSID
Croatia 21 Oct 1998 UNCITRAL, ICSID
Cuba 18 Oct 1997 ICC, UNCITRAL
Cyprus 26 Feb 1993 UNCITRAL, ICSID
Czech Republic 30 Dec 1992 UNCITRAL, ICSID
Egypt 6 Apr 1995 UNCITRAL, ICSID
Estonia 7 July 1998 UNCITRAL, ICSID
Georgia 3 Aug 1996 UNCITRAL, ICSID
Hungary 1 Feb 1992 SCC, ICC, ICSID
India 10 Apr 2008 UNCITRAL, ICSID
Islamic Republic of Iran 9 Jan 2009 UNCITRAL, ICSID
Jordan 8 Feb 2007 UNCITRAL, ICSID
Republic of Korea 4 Nov 1995 ICSID
Latvia 9 Feb 1998 UNCITRAL, ICSID
Lebanon 17 July 1999 UNCITRAL, ICSID
Lithuania 10 July 1997 UNCITRAL, ICSID
Mexico 26 Sep 2002 UNCITRAL, ICSID
Republic of Moldova 27 Feb 2000 UNCITRAL, ICSID
Morocco 28 June 2000 ICSID
Poland 20 Feb 1995 UNCITRAL, ICSID
Romania 11 June 1998 ICSID
Russian Federation 23 Feb 1997 UNCITRAL
Serbia 13 March 1998 UNCITRAL, ICSID
Slovakia 31 Dec 1992 UNCITRAL, ICSID
Slovenia 11 Feb 2000 UNCITRAL, ICSID
South Africa 5 Sep 2001 UNCITRAL, ICSID
Syrian Arab Republic 27 Feb 2004 UNCITRAL, ICSID
Tunisia 21 Apr 1995 ICSID
Turkey 24 Nov 2001 UNCITRAL, ICSID, ICC
Ukraine 4 Jan 1997 UNCITRAL
Uzbekistan 8 May 1998 UNCITRAL, ICSID




Dr. Markus Altenkirch LL.M. is a member of Baker McKenzie's Dispute Resolution teams in Düsseldorf and London . Markus focuses on international arbitration and currently represents clients in ICC, DIS, LCIA, and HKIAC arbitrations. Markus primarily advises on Post-M&A as well as construction disputes. Moreover, Markus regularly advises on disputes in the Pharmaceutical industry. In 2021, Markus has started his own podcast series: #zukunft. Markus, and his colleague Lisa Reiser, interview leading arbitration practitioners and in-house lawyers on the future of international arbitration. Markus teaches at the University of Mainz and regularly publishes in the field of international arbitration. He is a contributor and editor for Global Arbitration News. Markus Altenkirch can be reached at [email protected] and +49 211 311160 and +44 20 7919 1000.


Dr. Max Oehm, LL.M. is an Associate in the Dispute Resolution team at Baker McKenzie in Frankfurt. Max advises on international arbitration and commercial litigation matters. He represents clients in cases focusing on large industrial projects such as power plant construction and gas storage facilities. Max teaches at the University of Mannheim, Germany. Max can be reached at [email protected] and +49 69 29908334.