The Chorzow Factory case (1927) established that unlawful expropriation by a state requires full reparation, restoring the injured party to its original position or providing compensation, setting a precedent in international law on state responsibility.

An umbrella clause in investment treaties mandates host states to honor commitments related to investments, elevating breaches of local obligations to international disputes. It enhances investor protection, though its scope and applicability remain debated in arbitration.