The Calvo clause, named after its creator Calvo, is a contractual provision in agreements between governments and foreigners. It stipulates that the foreign party waives their right to invoke diplomatic immunity in case of any issues or disputes.
A Calvo clause is a legal provision found in contracts between a national government and a foreign individual. This clause specifically relinquishes the right of the foreign individual to assert diplomatic immunity, meaning they cannot claim immunity from the laws of the host country, even if they are a diplomat or government official. For instance, if a foreign company enters into a contract with a government that includes a Calvo clause, the company cannot use diplomatic immunity as a defence if they violate any laws of that country. This clause is commonly utilised to ensure that foreign entities and individuals are held responsible for their actions in the host country. Another example is when a foreign diplomat signs a lease agreement for a property in a host country that contains a Calvo clause. If the diplomat breaches any laws or regulations related to the property, they cannot claim diplomatic immunity and must face the consequences of their actions. In essence, a Calvo clause is a contractual provision that waives the right of a foreign individual to assert diplomatic immunity in a host country, often employed to promote accountability and adherence to local laws and regulations.
A Calvo Clause is a legal provision that allows a foreign investor to submit any disputes arising from their investment to the local courts of the host country, rather than international arbitration.
Calvo Clauses are used to protect the sovereignty of the host country and ensure that any disputes related to foreign investments are resolved within the local legal system.
The enforceability of Calvo Clauses depends on the specific laws and regulations of the host country. Some countries may recognize and enforce these clauses, while others may not.
Foreign investors can challenge the validity or enforceability of a Calvo Clause if they believe it violates their rights under international law or if it is inconsistent with any applicable investment treaties.
If a Calvo Clause is breached, the foreign investor may seek remedies within the local courts of the host country. This could include compensation for damages or other appropriate relief.
In some cases, parties may agree to modify or waive a Calvo Clause through mutual consent. However, it is important to consult with legal counsel to ensure that any modifications or waivers are valid and legally binding.
Calvo Clauses are not as common in modern international investment agreements. Many countries now prefer to include provisions for international arbitration to provide a neutral and impartial forum for resolving investment disputes.
Calvo Clauses can apply to various types of investments, including both direct and indirect investments. However, their applicability may vary depending on the specific laws and regulations of the host country.
A Calvo Clause can be challenged under international law if it is found to violate the investor’s rights under applicable investment treaties or if it is inconsistent with customary international law principles.
Yes, there are alternatives to Calvo Clauses, such as including provisions for international arbitration in investment agreements. These alternatives provide a more neutral and internationally recognized mechanism for resolving investment disputes.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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