Investment Treaty Arbitration

While the public debate on access to investment arbitration has continued from a policy perspective, the jurisdictional limits of tribunals, the standards of protection that an investor can expect and the conduct of the proceedings has not changed in quite as substantial a fashion. At the same time, there have been changes in the region as some states have denounced the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), and many investors have sought to restructure their investments or claim other nationalities in order to access the investment treaty framework. It can no longer be said that investment arbitration is necessarily ICSID arbitration, even though many of the core protections have remained the same. This chapter starts with an analysis of the jurisdictional requirements that investors must meet and the changes that have occurred in recent years. We then move to an overview of the common standards of protection, reviewing each to see if it tips more heavily in favour of foreign investors of host states. We conclude with a brief commentary on the applicable arbitration rules and what parties can expect, whether it is institutional or ad hoc arbitration.

Gaining access to the investment arbitration regime

As a starting point, we must note that the jurisdictional requirements governing the practice of investment treaty arbitration are different from the usual requirements discussed in the context of commercial arbitration for a number of reasons. Chief among them is the fact that most often the terms of the arbitration agreement are contained in international public law instruments – such as the ICSID Convention or the relevant investment treaty or investment protection law invoked as the basis for the tribunal’s jurisdiction – which include an offer to nationals of the relevant nationalities to arbitrate certain types of disputes.[2]

To constitute an enforceable agreement to arbitrate, this offer still has to be validly accepted in accordance with its own terms and the applicable rules of domestic and international law through a separate instrument, which is filed with – or is part of – the request for arbitration itself. By contrast, in the commercial arbitration sphere, the arbitration agreement is most often executed in a single instrument and a single moment, with the result that, unlike in the practice of investment arbitration, the parties negotiating the terms of the arbitration agreement and the arbitrating parties are normally the same.

In the particular context of ICSID arbitration, another striking feature is that the jurisdictional requirements set in the ICSID Convention – which are summarised in Article 25 of that Convention – are to be combined with (i.e., added to, as if in concentric circles) those set in the investment treaty, law or contract that contains the actual arbitration clause, in practice submitting the arbitrability of the dispute to a ‘double-barreled test’[3] whereby even if a particular dispute falls within the criteria for arbitrability set forth in the ICSID Convention, if it does not satisfy the requirements of the relevant investment instrument – or vice versa – it will still not be arbitrable under the ICSID Convention. That said, many investment instruments contain a menu or arbitration alternatives – typically including ICSID, the ICSID Additional Facility rules, UNCITRAL arbitration and sometimes other institutional rules, like those of the Stockholm Chamber of Commerce or the ICC – which, at the option of the claimant party or following a pre-established prevalence, can be used even if ICSID arbitration is not available.

One of the most remarkable practical differences between investment and commercial arbitration is that, while commercial arbitration is usually private, even if not altogether confidential, almost all investment arbitration decisions and awards are publicly available in free repositories, including through the websites of ICSID and the Permanent Court of Arbitration, the institutions most commonly administering investment disputes. This causes the arguments regularly held before investment tribunals to involve large and nuanced discussions of specific prior arbitration decisions, even in the absence of formal precedential value in the decision system.

The ample publicity given to its decisions permits a rather detailed practical analysis of the areas of tension driving the jurisdictional discussions in investment arbitration, which are very commonly classified as objections ratione materiae, ratione personae, ratione temporis and ratione voluntatis. We will address each of these separately.

Objections ratione materiae deal with the issue of whether the dispute falls within the subject matter jurisdiction of the tribunal. Under Article 25 of the ICSID Convention, for instance, subject matter jurisdiction requires that there be a legal dispute directly arising out of an investment, which has spurred a wealth of discussions regarding what constitutes a legal dispute[4] and what constitutes an investment.[5] In the aftermath of that heated debate, it has become common ground that only certain forms of differences regarding certain qualifying assets can validly give rise to an investment dispute. Certain additional – though also substantial – discussions involved whether indirect claims (i.e., claims for damage suffered by entities in which the claimant party has an interest,[6] or claims relating to illegal investments)[7] constituted valid investment claims.

Objections ratione personae deal with the issue of whether the dispute falls within the personal jurisdiction of the tribunal, which may be put into question because of issues of nationality of the investor[8] or ‘stateness’ of the state party to the dispute,[9] and also in connection with discussions regarding whether the claimant party actually controls the investment claimed (which may involve discussions regarding whether to pierce the corporate veil surrounding a corporate structure),[10] the distinction between ‘holding’ and ‘making’ an investment for purposes of qualifying as an ‘investor,’[11] and issues related to the assignment of claims[12] or the restructuring of investments to make them qualify for investment protection.[13]

Objections ratione temporis deal with the issue of whether the jurisdiction invoked was available to the claimant party or against the respondent party at the date as of which jurisdiction shall be ascertained. These objections usually relate to whether the investor party had the relevant nationality at the appropriate time or times,[14] whether the state party was bound to the international instruments invoked at the time of the registration of the request for arbitration,[15] and also whether the investment protections invoked can apply to investments made – or disputes originated – before or after their period of effectiveness.[16]

Finally, objections ratione voluntatis deal with the issue of whether an agreement exists to arbitrate the dispute, and of whether any preconditions to jurisdiction set in the arbitration agreement have been fulfilled. Objections falling under this category include discussions regarding claims or counterclaims brought by state parties against private investors,[17] and regarding the jurisdictional or admissibility effects of not pursuing negotiations or litigation proceedings as prescribed under many investment treaties prior to bringing a claim in arbitration.[18] A side discussion derives from this last thread of cases, which looks at whether the jurisdictional requirements set in a given treaty can be overcome by invoking the most-favoured-nation treatment provisions contained in that same treaty, where another treaty executed by that same state does not contain the same requirements for jurisdiction.[19]

Standards of protection and the relative advantages given to the host state or the foreign investor

The core concepts of investment treaties strive to reach a balance where states can benefit from the transfer of technology and positive economic effects of foreign investments, while foreigners can invest pursuant to certain expectations. However, the relative advantage of each side in relation to the other has much more to do with the standard of protection invoked and its treatment by the relevant treaty. There is no general rule that some sort of equilibrium exists between foreign investors and states that stretches throughout the world. Rather, there are core standards that are constantly evolving through treaty practice, the decisions of tribunals, and the contributions of international scholars to the field. To show how states and foreign investors interact with each other, we will briefly address the principal standards of protection with a brief description of how each is being used and its effects on the development of the law.

In an attempt to make this practical, we begin with the most commonly invoked standard of treatment[20] – one that does not enjoy consistent treatment or definition.[21] The vast majority of investment treaties guarantee that investments receive ‘fair and equitable treatment.’ Fair and equitable treatment (commonly known as ‘FET’) does not embrace two separate standards, one ‘fair’ and the other ‘equitable,’ but rather one phrase that serves to fill any gaps left in the specific protections contained in a treaty but included in the protections granted under international customary law, similar to the way a civil law code may have a general duty of good faith that forms a part of any obligation not specifically enumerated. Unlike other standards, FET does not require the investor to show any particular discrimination against it by the host state, and the host state’s laws cannot determine the meaning of FET. The standard is determined as a part of international law. FET includes normative standards that fall generally within four categories: (1) vigilance and protection; (2) due process and denial of justice; (3) lack of arbitrariness and non-discrimination; and (4) transparency, stability, and respect for the investor’s reasonable expectations.[22] The level of protection offered by FET is the subject of extensive debate. FET is at least the international minimum standard of treatment,[23] it may be a more rigorous standard,[24] or it may be a distinction without a difference.[25] FET may also be analysed as an autonomous standard subject to each tribunal’s interpretation based on the facts at hand.[26] In this vein, some tribunals have considered the investor’s legitimate expectations based on existing laws at the time of investment, and other tribunals have gone as far as looking only at the conduct of the state that fostered the expectation, not the underlying authority to engage in such conduct.

Similar to FET, nearly all treaties provide some guarantee of ‘protection’ and ‘security,’ routinely expressed as full protection and security (FPS). Even though it started as a protection from physical violence, some tribunals and commentators have argued that FPS has evolved to further include protection from adverse effects stemming from a host state’s actions or those of its agencies or organs.[27] FPS is not an absolute protection for the investment from all physical violence or adverse effects, but the host state must exercise sufficient due diligence and take the necessary actions to protect a foreign investment with measures that are reasonable under the circumstances. Similar to FET, there is no agreement on the relationship between FPS and customary international law.[28] Some commentators argue that FPS does nothing more than codify existing law, which reflects the understanding of the United States, Mexico and Canada in the context of the North American Free Trade Agreement (NAFTA).[29] The tribunal in Azurix v. Argentina went expressly in the opposite direction, reading the terms in their ordinary understanding to extend beyond international customary law and physical protection to a guarantee of ‘the stability offered by a secure investment environment’.[30] Like FET, FPS may not actually preserve any relative advantage between the foreign investor and the host state. Rather, FPS grants at least a protection from physical harm[31] and perhaps even a stable investment environment.[32] It does not ensure a level playing field, just a more predictable one.

Another hotly contested standard of protection derives from most-favoured nation (MFN) clauses. The goal of MFN clauses is to assure the signatories to a treaty that they will receive treatment at least as favourable as that given to other nations.[33] While all treaties are subject to their specific terms, this is especially true in the context of MFN clauses. Treaties are subject to specially negotiated arrangements, and unless the MFN clause states otherwise, the specific regime crafted by particular parties in a given subject matter should be respected.[34] The treaty practice of the United Kingdom has illustrated this concern, limiting MFN clauses to specific subject areas like ‘management, maintenance, use, or disposal’,[35] also a feature of Article 1103 of NAFTA. In general terms, tribunals and commentators have come to agree that MFN clauses extend to substantive protections, such as the invocation of clearer forms of FET in another treaty.[36] But the application of MFN clauses to dispute resolution mechanisms is deeply divided.[37] There is no guarantee that a foreign investor will be able to access international arbitration through an MFN clause,[38] but there are decisions that have found as much.[39]

The repatriation of profits is a key concern of foreign investors, but unlike FET or FPS, guarantees of free transfer of profits (FTP) can be highly specific and subject to the laws of the host state. There is no absolute right to transfer profits at will. Because the transfer of profits can become particularly difficult in times of financial crises, treaty practice has shown three approaches: (1) provide no guarantee to transfer profits within a year of the investment, due to the unique dangers of short-term withdrawals; (2) allow limited restrictions during certain financial difficulties or crises; or (3) give host states the right to completely restrict remittances in the event of an emergency or exigent circumstances.[40] Perhaps in this area, the relative positions of the host state and the foreign investor tip most heavily in favour of the host state – the need to protect a country’s financial system is a strong policy that can outweigh the needs of any one foreign investor.

Moving away from an area that leans toward the host state, the ‘umbrella’ clause contained in many treaties can give the foreign investor greater advantages than it might have first realised. Many treaties contain a clause mandating that the host state will respect any obligation it has entered into with a foreign investor. This umbrella clause can allow a foreign investor to then seek dispute resolution pursuant to the investment treaty for a breach of contract, even if the contract has a dispute resolution clause. Tribunals have reached a variety of conclusions, with the first ad hoc committee in Vivendi v. Argentina embracing a distinction between claims arising from sovereign acts (and subject to the investment treaty) versus those arising from commercial acts, which would otherwise be beyond the reach of the investment treaty. The matter is by no means settled, but it does open the door for a foreign investor to negotiate a forum selection clause in a contract and then walk away from that clause through the investment treaty – undoubtedly a benefit for the foreign investor.

Other standards can provide protection for investors, but the necessary requirements of proof and the rise of the application of FET have led to fewer favourable awards for investors and consequently less recourse to the standards at issue. Specifically, most treaties contain ‘national treatment’ clauses that require the host state to treat foreign investors or investments as well as similarly situated domestic investors.[41] Tribunals normally require the foreign investor to identify domestic investors with whom they are in ‘like circumstances’.[42] If there is disparate treatment, then there must be a showing of the lack of a legitimate basis for the different treatment.[43] This multi-step process can prove difficult because of the variety of factors that make up both the ‘like circumstances’ analysis and ‘legitimate basis’ defence. Coupled with the more flexible FET standard for similar notions, investors can often get a similar result more simply and stay away from invoking national treatment clauses.[44] Most treaties also guarantee freedom from arbitrary, discriminatory or unreasonable measures, which arise in various formulations of these three terms, summarised frequently as the ‘non-impairment standard’.[45] Agreement on a consistent systematic analysis of the non-impairment standard has not crystallised in the decisions of tribunals and writings of commentators, with a number of different approaches.[46] Moreover (or perhaps as a result), a breach of the non-impairment standard rarely forms the basis for a tribunal’s decision.[47] With the availability of an expansive application of FET, the protections from arbitrary and discriminatory conduct are not as sought after.

Other doctrines do not constitute standards of protection as such, but they can form a key component of the analysis that tribunals undertake. The doctrines of ‘necessity’ and the ‘margin of appreciation’ function like defences that a state can invoke and swing the balance in their favour. Necessity holds that a state can suspend performance of its treaty obligations in limited, exigent circumstances, similar to commercial notions of force majeure. The margin of appreciation is the greater deference that tribunals will give states in the areas of regulation of public health, security and similar concepts. The doctrine holds that states should receive greater deference due to the sensitive nature of the interest protected, even if the measures at issue might otherwise violate the relevant treaty. Together, these three doctrines give states greater latitude in the decisions reached by their local courts and agencies.

Investment disputes and the available fora: ICSID or the New York Convention

The investor makes a fundamental choice when it decides which avenue to pursue in bringing an action against the state. As mentioned below, almost every arbitration with a state will be conducted under the Arbitration Rules of ICSID, ICSID Additional Facility rules, UNCITRAL Arbitration Rules or sometimes other institutional rules, like those of the Stockholm Chamber of Commerce (SCC) or the International Chamber of Commerce (ICC). However, in essence, only two kinds of awards will result: those enforced through the ICSID Convention and those enforced through the New York Convention. In spite of the fact that arbitrations under both kinds of regimes share some similarities, they also have striking differences, especially when the relationship with national courts is considered. The enforcement of arbitral awards and even the conduct of the arbitration proceedings themselves might depend on whether the dispute is an ICSID dispute or a dispute whose enforcement is sought under the New York Convention. The latter will often be applicable to arbitrations conducted under the UNCITRAL arbitration rules, ICSID Additional Facility Rules or in some cases, under the rules of the ICC or SCC.

On the other hand, ICSID arbitration was created to be a self-contained dispute settlement mechanism, independent from local courts.[48] Every challenge to the ICSID system will be solved internally either by the arbitral tribunal, an Annulment Committee or the World Bank’s President, with the assistance of the ICSID Secretariat. The enforcement mechanism will also be independent from local courts, since an ICSID award will be considered a ‘final judgment of the courts of a constituent state’.[49] Unlike ICSID, when applying the New York Convention, recourse must be had to local courts, either to the courts of the seat of the arbitration or those where enforcement is sought.

In investment arbitration, the rate of success of both Conventions is similar. There are very few cases in the history of the investment dispute settlement mechanism, from its inception to current times, that have not been complied with by the states. As shown by the recent saga of cases against Argentina, a delay in complying with the awards rendered against the state, regardless of how unfair they could be seen as in the eyes of that state, will preclude that country from access to the international financial markets, which in turn will force the negotiation and settlement of any unpaid awards that may exist.

Even though studies have demonstrated that there is no link between bilateral investment treaties (BITs) and the attraction of foreign direct investment, the fact remains that after 15 years of continued application of the BIT regime, evidence clearly shows that when a business fails as a result of the improper political interference from the state, the investments benefit from a strong protection through the BITs in place and the enforcement mechanisms provided for in both the ICSID Convention and New York Convention. Further, the BIT regime has been properly used to improve the state’s conduct towards investment (foreign and local) and also, unfortunately, to discourage the state from exercising its legitimate regulatory powers.[50]

Despite the foregoing, reference should be made to the fact that the ICSID Convention and the New York Convention offer a very similar approach on grounds for challenging awards, although they also provide for substantially different mechanisms to set aside awards. In both cases, the award handed down by a Tribunal shall be deemed final and binding on the parties to the proceedings. However, as previously indicated, challenges to the award are dealt with differently under the ICSID Convention and under the New York Convention, as discussed below.

Under the New York Convention, Article 5 is the relevant applicable rule, which provides the rules for when recognition or enforcement of an award may be refused. As a corollary of this rule, applications for the setting aside of an award could be filed both before the courts of the country where recognition and enforcement is sought or the courts of the country in which, or under the laws of which, the award was made. The grounds upon which a request for the setting aside of an award can be based are as follows:

  • invalid arbitration agreement or party incapacity, Article 5(a);
  • lack of or insufficient notice, Article 5(b);
  • excess of powers, Article 5(c);
  • breach of a rule of procedure, Article 5(d);
  • invalid or set aside of the award at the seat, Article 5(e);
  • non-arbitrability of the subject matter, Article 5.2 (a); and
  • public policy, Article 5.2 (b).

As regards ICSID, it is a self-contained dispute settlement mechanism that is autonomously applied, independent from local courts. According to Article 53 of the ICSID Convention ‘the award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except for those provided for in this Convention’. Consequently, the remedies provided for in the ICSID Convention are:

  • rectification (Article 49.2);
  • interpretation (Article 50);
  • revision (Article 51); and
  • annulment (Article 52).

The Annulment Mechanism is a fundamental device to understand the ICSID Convention because it allows the Convention to be fully effective, in that it precludes local courts from reviewing the awards. Moreover, the review carried out by any ICSID ad hoc annulment committee shall be limited to a narrow and exhaustive list of grounds for annulment. Even though the grounds for annulment do not differ much from those in the New York Convention, with the striking difference of the public order exception contemplated in the latter, and possibly absent in ICSID Article 52. According to this article the only grounds for annulment are that:

  • the Tribunal was not properly constituted;
  • the Tribunal has manifestly exceeded its powers;
  • there was corruption on the part of a member of the Tribunal;
  • there has been a serious departure from a fundamental rule of procedure; and
  • the award has failed to state the reasons on which it is based.

As indicated above, both Conventions have similar grounds for setting aside an award. Nonetheless, the public policy ground seems to be missing in the ICSID Convention. Even though the public policy ground has never been invoked in ICSID arbitration, it can be assumed that the public policy ground could fall within the ‘manifest excess of powers’ or ‘the serious departure from a fundamental rule of procedure’ grounds provided for in the Convention depending on the facts in the case. It can also be argued, based upon an analysis of the preparatory works of the ICSID Convention, that the negotiating states have never relinquished the public policy argument and that it could be raised at the stage of enforcement.[51] This latter possibility will probably not be readily accepted by the majority of ICSID practitioners that argue that ICSID awards are final and do not admit any kind of recourse before local courts. In any case, so far no one has ever availed themselves of this assumption for annulment.

Taking into account the differences and similarities between the types of awards that result, investors can still expect roughly similar remedies, regardless of the application of the ICSID Convention. The grounds for challenging an award are similar, and the obligation to comply arises in both contexts.

Even though 30 per cent of ICSID registered cases involve states in Latin America (exclusive of Mexico), states and investors alike are still looking to a limited number of applicable rules.

Most BITs already contain a limited variety of applicable rules, and normally the choice is between ICSID and UNCITRAL arbitration rules, presenting the parties with a fundamental decision. While ICSID arbitration will also be institutional arbitration, UNCITRAL arbitration is in essence ad hoc arbitration. In this regard, the UNCITRAL arbitration rules are a set of rules created to facilitate arbitration in cases where the parties have precisely failed to establish an institution to administer the dispute.

Ad hoc arbitration poses challenges and hurdles to the parties. The claimant will be particularly affected because it will lack the assistance that a specialised arbitral institution provides to the users by facilitating the conduct of the arbitration proceedings from the outset. However, most of the time this choice between the two methods is only superficial. The truth remains that the parties may quickly agree on an institution to assist them in the conduct of the arbitration proceedings, unless one of the parties is a recalcitrant one and decides to avail itself of the lack of appointment of an administering institution to render the proceedings more difficult for the opposing party.

Most of the bilateral investment treaties in force will provide the investor with an unlimited choice among the different methods of dispute resolution, permitting free choice among them. However, there are other treaties that set an order of priority according to which the different alternative dispute resolution mechanisms can be resorted to, with every single mechanism becoming available only when the previous one has failed. This is the case for some Venezuelan treaties – that their disputes resolution clauses set forth an order of prevalence in which different arbitration mechanisms could be invoked.

Other treaties also limit the parties’ choice by introducing a fork-in-the-road clause. This clause entails an early choice that the claimant needs to make. In this respect, if the claimant decides to bring the dispute to the local courts of the investment-recipient state, it will later be precluded from bringing the same claim before an international arbitral tribunal. The dispute resolution clauses provided for in most US BITs, such as the one discussed above, will preclude the claimant from bringing the same claim twice.

Other options may exist. The ICSID Convention was negotiated in the early 1960s and adopted in 1965. Even though the first BIT entered into force in 1959, the BIT dispute resolution system was far from achieving its current success. The first generation of BITs was negotiated and adopted in the 1990s when ICSID was still a dormant institution. However, during these early times, ICSID heard some investment arbitration cases not based on BITs but on investment contracts. A very limited number of contract cases have been registered with the Centre throughout the almost 60 years that have elapsed since the adoption of the Convention, but they are a reminder that ICSID was created as a contractual-based arbitration system that only later developed into one of the busiest international institutions when its jurisdiction was claimed under the BITs regime.

The foregoing serves also as a reminder of the fact that sometimes one dispute could be ruled upon by different dispute settlement mechanisms and, in some cases, there may exist competing arbitration clauses. Sometimes there is a dispute settlement mechanism that has been provided for in the contract (either arbitration or litigation), and the investor can still invoke a BIT.

Interestingly, claimants can invoke both dispute mechanisms without being required to decline either of them. This has been a hotly debated issue and different tribunals have provided different solution. Despite this, it could be argued that invoking a BIT dispute resolution clause requires more than a mere breach of a contract. A breach of a BIT requires the breach of one of the specific obligations provided for in the applicable BIT.

Some final considerations need be presented on the taking of evidence in international arbitration. A civil law attorney or a practitioner from a civil law country that is not familiar with the common law system will find that the taking of evidence in the framework of international arbitration is strikingly different from what he or she may be used to dealing with in his or her local context. In this regard, international arbitration, which includes international investment arbitration, has been strongly influenced by the common law procedural rules, especially in respect of the taking of evidence.

Those unfamiliar with a common law procedural system or unfamiliar with international arbitration rules may view with some suspicion the possibility that those with an interest in the outcome of a case serve as witnesses in the proceedings concerned. In international arbitration the parties themselves can be witnesses in their own cases insofar as they can be cross-examined by their counterparts. Document production, or discovery proceedings, is another device that is alien to the civil law practitioners who would astonishingly contemplate that the parties to the proceedings disclose documents that could be detrimental to their cases. In civil law systems, even though the principle of collaboration in document production is gaining standing, things are not as extreme as to require a mandatory disclosure of information.


[1] Ignacio Torterola, Diego Gosis and Quinn Smith are partners at the law firm of GST LLP. The information in this chapter is correct as of October 2016.

[2] While it is also possible to agree to arbitrate investment disputes under certain forms of contract between states and foreign investors (typically called ‘investment contracts’), this form of investment dispute is increasingly rare, and most disputes initiated in the last 15 years were based on investment treaties (bilateral or multilateral) or investment laws. Source: ICSID website.

[3] This expression has been used in a host of decisions over the past decade, possibly starting with the 2007 Award in Malaysian Historical Salvors v. Malaysia.

[4] This was the subject of extensive discussion in, inter alia, Azpetrol v. Azerbaijan, Aguaytia v. Peru, CMS v. Argentina, Luccheti v. Peru, Rosinvest v. Russia, Saipem v. Bangladesh and Tza Yap Shum v. Peru, and, under a different light, that of state-to-state disputes under investment treaties, in the Ecuador v. US arbitration stemming from the Chevron v. Ecuador case.

[5] In recent years, this has become one of the hottest debates in investment arbitration within and without the ICSID Convention, and has been discussed with varying outcomes in, inter alia, Abaclat/Beccara v. Argentina, AFT (Alps, Finance and Trade) v. Slovakia, Alpi/Ambiente Ufficio v. Argentina, Desert Lines v. Yemen, Fedax v. Venezuela, Flughafen Zurich v. Venezuela, Joy Mining v. Egypt, MHS (Malaysian Historical Salvors) v. Malaysia, Mitchell v. Congo, Quiborax v. Bolivia, Romak v. Uzbekistan, Salini v. Morocco and White Industries v. India, to name only a few.

[6] See, for example, the decisions issued in Noble Ventures v. Ecuador, Sempra v. Argentina and Suez v. Argentina.

[7] See, for example, the decisions issued in Anderson v. Costa Rica, Inceysa v. El Salvador, Phoenix Action v. Czech Republic and WDF (World Duty Free) v. Kenya.

[8] See, for example, the decisions issued in AFT (Alps, Finance and Trade) v. Slovakia, Champion Trading v. Egypt, Serafin García Armas v. Venezuela, Soufraki v. UAE and TSA Spectrum v. Argentina.

[9] See, for example, the decisions issued in CSOB v. Slovakia, Province of East Kalimantan v. PT Prima Coal and Flughafen Zurich v. Venezuela.

[10] See, for example, the decisions issued in Champion Trading v. Egypt, Sempra v. Argentina and TSA Spectrum v. Argentina, and also, more generally on the requirements for piercing the corporate veil of an entity in the context of international public law, the ICJ decision in the Barcelona Traction case. Also, for an interesting discussion of the disregard of corporate structures controlled by state entities, see the enforcement decision issued by the US Federal courts in the 5th Circuit in Bridas v. Turkmenistan.

[11] See, for example, the decisions issued in Quiborax v. Bolivia and Standard Chartered v. Tanzania.

[12] See, for example, the decisions issued in Commerce Group v. El Salvador, Pac Rim Cayman v. El Salvador and Phoenix Action v. Czech Republic.

[13] As a general rule, it is undisputed that corporate or asset reorganisations designed with the principal purpose of enabling a party to gain access to investment arbitration over an existing – non-arbitrable – dispute are not effective for those purposes.

[14] Under the ICSID Convention, physical persons have to satisfy the nationality requirements at both the time of consenting to arbitration and the time of registration of the dispute, while legal persons only need satisfy them at the time of consenting to arbitration.

[15] Interest in this issue has been spurred by the denounciation of the ICSID Convention by Bolivia, Ecuador and Venezuela, which has made access to ICSID arbitration unavailable to foreign investors in those jurisdictions if consent to arbitration had not been granted by both parties before the denounciation.

[16] See, for example, the decisions issued in Kardassopoulos and Fuchs v. Georgia, Luchetti v. Peru, Rusoro Mining v. Venezuela and Yukos v Russia.

[17] See, for example, the decisions issued in Atlantic Triton v. Guinea, Perenco v. Ecuador, Saur v. Argentina and Spiridon Roussalis v. Romania.

[18] See, for example, the decisions issued in Abaclat/Beccara v. Argentina, Alemanni v. Argentina, Alpi/Ambiente Ufficio v. Argentina, Austrian Airlines v. Slovakia, BIVAC v. Paraguay, Daimler v. Argentina, ICS v. Argentina, Kilic v. Turkmenistan and Wintershall v. Argentina.

[19] See C Söderlund, ‘Most Favoured Nation (MFN) Clauses in Bilateral Investment Treaties.’ 1122 Liber Amicorum a Bernardo Cremades (Madrid, 2010).

[20] R Dolzer and C Shreuer, Principles of International Investment Law 119 (2008).

[21] See, idem, at p.121, ‘[a] s with other standard clauses in investment treaties, no single frozen version exists. Indeed, the variations in this area are quite significant.’

[22] K Yannaca-Small, ‘Fair and Equitable Treatment Standard: Recent Developments.’ 118 Standards of Investment Protection (editor: A Reinisch, 2008).

[23] See, for example, MCI Power Group LC v. Ecuador.

[24] See, for example, Sempra v. Argentina.

[25] See, for example, Saluka v. Czech Republic.

[26] See, for example, Tecmed v. Mexico, (‘the scope of the undertaking of fair and equitable treatment under Article 4(1) of the Agreement ... is that resulting from an autonomous interpretation[.]’.

[27] See, for example, footnote 19 at p.149.

[28] G Moss, ‘Full Protection and Security.’ 136 Standards of Investment Protection (editor: A Reinisch) 2008.

[29] See, idem.

[30] See, for example, footnote 19 at p.152.

[31] See, for example, PSEG v. Turkey and Saluka v. Czech Republic.

[32] See, for example, CME v. Czech Republic.

[33] A Ziegler, ‘Most-Favoured-Nation (MFN) Treatment.’ 60 Standards of Investment Protection (editor: A Reinisch) 2008.

[34] See, for example, Tecmed v. Mexico and Maffezini v. Spain.

[35] See, for example, footnote 19 at p.187.

[36] See, for example, MTD v. Chile, Bayindir v. Pakistan and Continental Casualty v. Argentina.

[37] See, for example, footnote 19 at pp.190–191.

[38] See, for example, Yaung Chi Oo (YCO) Trading Pte Ltd v. Myanmar, Salini v. Jordan, Plama v. Bulgaria, Gas Natural v. Argentina.

[39] See, for example, Maffezini v. Spain and Siemens v. Argentina.

[40] See, for example, footnote 19 at pp.193–194.

[41] A Bjorklund, ‘National Treatment.’ 29 Standards of Investment Protection (editor: A Reinisch) 2008.

[42] Making a showing of being in like circumstances is fact-specific and can depend on the existence and impact on competitors, the historical background at issue, the nature of the challenged measure, and other issues. See, for example, SD Meyers v. Canada, Pope & Talbot v. Canada and Feldman v. Mexico.

[43] A Newcombe, L Paradell and D Krishnan, ‘National Treatment.’ 36 The Law and Practice of Investment Treaties 2008.

[44] A Bjorklund at p.58.

[45] V Heiskanen, ‘Arbitrary and Unreasonable Measures.’ 89 Standards of Investment Protection (editor: A Reinisch) 2008.

[46] Idem, at pp.89–90.

[47] Only Lauder v. Czech Republic found a breach of the non-impairment standard as the only ground on which the claimant had succeeded. Even then, the tribunal did not award damages because the claimant had not shown that the damages claimed were proximately caused by the breach of the treaty.

[48] According to the World Bank’s Report of the Executive Directors on the Convention, ‘15. The Convention establishes the International Centre for Settlement of Investment Disputes as an autonomous international institution ...’

[49] ‘Each contracting state shall recognise an award rendered pursuant to this convention as binding and enforce the pecuniary obligations imposed by that award within its territory as if it were a final judgment of a court in that state.’

[50] The existence of BITs in place, coupled with the application of either the New York Convention or ICSID Convention, impose additional precautionary measures to public officers dealing with investments, alien or local (sometimes it is difficult to know beforehand whether a partner corperation with a foreign nationality exists). On the other hand, in a few other cases, the threat of an investment dispute has created a chilling effect in local governments that have been afraid to pass legislation that was necessary to protect human health. Even though tribunals have largely recognised the state’s right to regulate, the decision came after almost a decade of costly arbitrations, sending a strong message to those countries that had not implemented such kind of legislation yet.

[51] G Bottini, Conference ‘III Seminario de Derecho Público y Derecho Internacional.’ Quito, Ecuador, 1 October 2015.

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