Bilateral Agreements Between Nations: Enforcement, Breach, Arbitration and Sanctions under International Law

Illustration depicting treaty signing and dispute resolution under international law

Bilateral agreements constitute one of the oldest and most resilient instruments of international relations. Long before the codification of treaty law and the establishment of global institutions, sovereign entities relied on negotiated agreements with one another to regulate war, peace, trade, diplomacy, and territorial arrangements. Even in the contemporary international legal order—characterised by multilateral treaties, international organisations, and complex regulatory regimes—bilateral agreements continue to occupy a central place. Their relevance is not diminished by globalisation; rather, it is reinforced by the need for precision, reciprocity, and strategic control in interstate relations.

Unlike multilateral treaties, which often require compromise among numerous participants and result in broadly framed obligations, bilateral agreements are tailored instruments. They allow two states to calibrate their legal commitments in line with specific political, economic, security, or geographical realities. Consequently, when disputes arise from such agreements, they often involve issues of profound national interest. Questions surrounding their legal sanctity, enforceability, remedies for breach, and the permissibility of countermeasures are therefore not merely academic concerns but matters that directly affect state sovereignty and international stability.

International law recognises bilateral agreements as binding legal instruments governed by established principles of treaty law. The foundational definition of a treaty is provided by the Vienna Convention on the Law of Treaties, 1969, which defines a treaty as an international agreement concluded between states in written form and governed by international law. This definition applies irrespective of the terminology used by the parties. Whether styled as a treaty, agreement, convention, protocol, memorandum of understanding, or exchange of notes, the determining factor is the intention of the parties to create legally binding obligations under international law. Where such intent exists, the instrument attracts the full protection of the international legal system.

The legal force of bilateral agreements rests upon the universally accepted principle of pacta sunt servanda, which mandates that agreements in force are binding upon the parties and must be performed in good faith. This principle, codified in Article 26 of the Vienna Convention, is not merely treaty law but forms part of customary international law. Its status as a customary norm means that it binds all states, regardless of whether they are parties to the Vienna Convention. The obligation to honour treaties in good faith is therefore foundational to the international legal order, without which stable and predictable relations between states would be impossible.

Good faith performance requires more than mere formal compliance. It obliges states to implement treaty obligations honestly, to refrain from acts that would defeat the object and purpose of the agreement, and to avoid deliberate evasion through legal or administrative manoeuvres. International law does not permit a state to invoke its domestic law as a justification for failing to perform its treaty obligations. Article 27 of the Vienna Convention explicitly affirms that internal law cannot be relied upon to excuse non-compliance. This rule reflects the international legal personality of the state, which is regarded as a unitary actor irrespective of its internal constitutional arrangements.

The protection of bilateral agreements under international law is reinforced by multiple layers of normative authority. Customary international law, the jurisprudence of international courts and tribunals, and the practice of states collectively affirm that treaties cannot be unilaterally disregarded without legal consequence. The United Nations Charter further strengthens this framework by obligating member states to fulfil their international obligations in good faith. The Charter also encourages the peaceful settlement of disputes arising from treaty interpretation or application, underscoring the legal expectation that disagreements over bilateral agreements should be resolved through lawful means rather than coercion or force.

When a bilateral agreement is breached, international law provides a structured framework for identifying and characterising that breach. A breach occurs when a state fails to perform an obligation imposed by the treaty or acts in a manner incompatible with its provisions. Under the Vienna Convention, a material breach is defined as a violation of a provision essential to the accomplishment of the object and purpose of the treaty. Material breaches carry particularly serious consequences, including the possibility of treaty termination or suspension, subject to procedural requirements.

The conduct constituting a breach must be attributable to the state. The law of state responsibility, as articulated in the Articles on Responsibility of States for Internationally Wrongful Acts adopted by the International Law Commission, establishes that the acts of all state organs—executive, legislative, judicial, or military—are attributable to the state. Even actions taken by officials acting beyond their authority may engage state responsibility if they purport to act in an official capacity. This principle ensures that states cannot evade responsibility by attributing wrongful conduct to subordinate authorities or internal divisions.

Breaches of bilateral agreements may be instantaneous or continuing in nature. An instantaneous breach occurs at a specific moment, such as the unlawful termination of a treaty or the enactment of legislation in direct violation of treaty obligations. A continuing breach persists over time, such as ongoing denial of treaty-guaranteed access, continued occupation of territory contrary to a boundary agreement, or sustained non-performance of agreed obligations. Continuing breaches are particularly significant because they prolong the legal consequences and expand the scope of remedies available to the injured state.

Enforcement of bilateral agreements in international law differs fundamentally from enforcement in domestic legal systems. There is no global executive authority capable of compelling compliance through direct coercion. Instead, enforcement operates through a combination of legal mechanisms, institutional processes, and strategic pressure. Diplomatic engagement is often the first avenue pursued by states alleging breach. Formal protests, negotiations, and invocation of dispute resolution clauses within the agreement itself serve both legal and political functions. They place the alleged breach on record, demonstrate good faith, and may satisfy procedural prerequisites for further legal action.

Judicial enforcement through the International Court of Justice represents one of the most authoritative legal avenues for resolving disputes arising from bilateral agreements. The Court’s jurisdiction is based on consent, which may be expressed through compromissory clauses within treaties, special agreements concluded after a dispute arises, or declarations accepting the Court’s compulsory jurisdiction. Where jurisdiction exists, the Court’s judgments are binding upon the parties. Although the Court lacks direct enforcement powers, its decisions carry significant legal weight and may be reinforced through diplomatic and institutional mechanisms under the United Nations Charter.

International arbitration has emerged as a particularly prominent method for enforcing bilateral agreements, especially in the economic and investment domains. Arbitration offers states greater flexibility in selecting arbitrators, determining procedural rules, and tailoring the process to the technical or legal complexity of the dispute. Bilateral investment treaties frequently provide for arbitration before the International Centre for Settlement of Investment Disputes or ad hoc tribunals constituted under established rules. Arbitration awards, while dependent on voluntary compliance, often exert strong normative and reputational pressure on states.

When a breach of a bilateral agreement is established, international law recognises several forms of reparation. The primary remedy is cessation of the wrongful act, accompanied by assurances and guarantees of non-repetition. Cessation is particularly relevant in cases of continuing breach, where the injured state seeks restoration of compliance rather than compensation alone. Assurances of non-repetition serve a preventive function by reducing the likelihood of future violations.

Restitution occupies a central place in the law of remedies, requiring the responsible state to restore the situation that existed prior to the breach, to the extent possible. Restitution is especially significant in disputes involving territorial arrangements, resource access, or property rights established by bilateral agreements. Where restitution is materially impossible or disproportionate, compensation becomes the primary remedy. Compensation is intended to cover the financially assessable damage resulting from the breach, including loss of profits and consequential harm.

In certain cases, satisfaction may be an appropriate form of reparation. Satisfaction addresses non-material injury, such as harm to a state’s dignity, sovereignty, or reputation. It may take the form of a formal acknowledgment of wrongdoing, an apology, or a declaratory judgment. While satisfaction does not provide tangible restitution, it can carry substantial symbolic and political significance, particularly in disputes involving sensitive sovereign interests.

Beyond judicial and arbitral remedies, international law permits injured states to adopt countermeasures in response to breaches of bilateral agreements. Countermeasures are actions that would otherwise be unlawful but are rendered permissible when taken in response to a prior internationally wrongful act. The law governing countermeasures imposes strict conditions to prevent abuse and escalation. Countermeasures must be proportionate to the injury suffered, temporary in nature, and directed at inducing compliance rather than punishment.

Before resorting to countermeasures, the injured state is generally required to call upon the responsible state to cease the wrongful conduct and to offer negotiations. Countermeasures must be reversible, allowing for the restoration of normal relations once compliance is achieved. Importantly, countermeasures may not involve the use of force, violate peremptory norms of international law, or impair fundamental humanitarian obligations. These limitations reflect the balance international law seeks to maintain between enforcement and restraint.

Economic sanctions, suspension of treaty obligations, and restriction of certain cooperative arrangements may fall within the category of lawful countermeasures when implemented in accordance with legal requirements. In practice, states often combine legal proceedings with economic or diplomatic pressure, using arbitration awards or judicial findings to legitimise and reinforce countermeasures. This convergence of law and strategy underscores the reality that international enforcement operates within a political environment, even as it remains grounded in legal norms.

Despite the existence of these mechanisms, enforcement of bilateral agreements remains challenging. Power asymmetries between states can influence compliance, particularly where the responsible state possesses significant economic or military leverage. Political considerations may impede institutional enforcement, as seen in the limited role of collective mechanisms in compelling compliance with international judgments. Fragmentation of dispute resolution forums can also complicate enforcement, leading to parallel proceedings or inconsistent outcomes.

Nevertheless, the persistent invocation of legal remedies contributes to the gradual strengthening of treaty compliance norms. States that repeatedly disregard bilateral agreements risk reputational damage, reciprocal non-compliance, and diminished credibility in future negotiations. Over time, these consequences reinforce the practical value of adherence to treaty obligations, even in the absence of centralised enforcement.

In conclusion, bilateral agreements remain a cornerstone of international legal relations, embodying both legal obligation and strategic calculation. International law provides robust principles for their protection, clear standards for identifying breach, and a comprehensive framework of remedies and enforcement mechanisms. While compliance ultimately depends on political will, the legal architecture surrounding bilateral agreements equips states with powerful tools to defend their rights, seek redress, and uphold the rule of law in international affairs. In an era marked by geopolitical uncertainty and strategic competition, the enduring relevance of bilateral agreements lies not only in their flexibility but in their capacity to translate negotiated commitments into binding legal order.

Footnotes and Source References

1. Vienna Convention on the Law of Treaties, 1969, United Nations Treaty Series, Vol. 1155.This is the foundational treaty governing the formation, interpretation, performance, breach, suspension, and termination of treaties, including bilateral agreements. Articles 2, 26, 27, and 60 are particularly relevant to pacta sunt servanda, good faith performance, and material breach.

2. International Law Commission, Articles on Responsibility of States for Internationally Wrongful Acts (2001), UN General Assembly Resolution 56/83.This codification reflects customary international law on attribution, breach, remedies, countermeasures, and reparation. Frequently cited by the International Court of Justice and arbitral tribunals.

3. United Nations Charter (1945), especially Articles 2(2), 33, and 94.These provisions establish the obligation of good faith compliance with international obligations, peaceful settlement of disputes, and binding nature of ICJ judgments.

4. Case Concerning the Gabčíkovo–Nagymaros Project (Hungary/Slovakia), ICJ Reports 1997.A leading case on treaty performance, material breach, necessity, good faith, and remedies in bilateral treaty disputes.

5. Nuclear Tests Case (Australia v. France; New Zealand v. France), ICJ Reports 1974.Authoritative on unilateral declarations, good faith, estoppel, and binding international commitments.

6. Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States), ICJ Reports 1986.Key authority on state responsibility, countermeasures, proportionality, and limits on the use of force.

7. Aust, Anthony, Modern Treaty Law and Practice, 3rd Edition, Cambridge University Press (2013).A leading practical and doctrinal text on treaty formation, interpretation, breach, and enforcement, frequently cited by courts and practitioners.

8. Shaw, Malcolm N., International Law, 9th Edition, Cambridge University Press (2021).Comprehensive doctrinal authority covering bilateral treaties, enforcement mechanisms, remedies, arbitration, and countermeasures.

9. Brownlie, Ian, Principles of Public International Law, 8th Edition, Oxford University Press (2012).Classic authoritative work on treaty law, state responsibility, and remedies for breach.

10. Permanent Court of Arbitration, Optional Rules for Arbitrating Disputes Between Two States (1992, revised).Primary reference for inter-state arbitration procedures outside the ICJ framework.

11. ICSID Convention (Convention on the Settlement of Investment Disputes between States and Nationals of Other States), 1965.Relevant for bilateral investment treaties and arbitration-based enforcement mechanisms.

12. UNCTAD, Investor–State Dispute Settlement: A Review of Developments (latest edition).Provides empirical and legal analysis of treaty enforcement and arbitration trends under bilateral investment treaties.

13. Crawford, James, State Responsibility: The General Part, Cambridge University Press (2013).Definitive scholarly exposition of state responsibility, remedies, and countermeasures, authored by the former ICJ judge and ILC Special Rapporteur.

14. Air Services Agreement Arbitration (United States v. France), 1978, Reports of International Arbitral Awards (RIAA), Vol. XVIII.Seminal arbitral decision on lawful countermeasures and proportionality in response to treaty breach.

15. Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, ICJ Reports 2004.Important for understanding continuing breaches, obligations erga omnes, and remedies.

16. Simma, Bruno et al. (eds.), The Charter of the United Nations: A Commentary, Oxford University Press.Authoritative article-by-article commentary on UN Charter obligations relevant to treaty enforcement.

17. McNair, Lord, The Law of Treaties, Oxford University Press (1961).Classic foundational work frequently cited in treaty interpretation and breach discussions.

18. International Court of Justice, Jurisdiction and Admissibility case law database.Useful for precedents on treaty-based jurisdiction and enforcement challenges.