Schreuer's Commentary on the ICSID Convention: A Commentary on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States [3 ed.] 1108494285, 9781108494281

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Schreuer’s Commentary on the ICSID Convention This unique compendium offers an article-by-article commentary on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. Providing a comprehensive explanation of the functioning of this important mechanism for the settlement of investor– State disputes, it incorporates the preparatory work, the Convention’s text, various rules and regulations adopted under the Convention, the practice of arbitral tribunals, and academic writings on the subject. The first and second editions of this Commentary have been relied upon by numerous arbitral tribunals. This third edition follows the same system and approach, but extensive updates and revisions reflect the vast increase in arbitral practice since the publication of the second edition. A number of novel issues that have emerged through this practice are now addressed, making this practice-oriented guide an indispensable tool for anyone dealing with the ICSID Convention. Likewise, the number of contributors to and editors of the third edition has increased.

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SCHREUER’S COMMENTARY ON THE ICSID CONVENTION A Commentary on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States

Volume I

third edition general editor STEPHAN W. SCHILL editors LORETTA MALINTOPPI AUGUST REINISCH CHRISTOPH H. SCHREUER ANTHONY SINCLAIR

contributors STANIMIR ALEXANDROV CHRISTINA BINDER CHESTER BROWN URSULA KRIEBAUM LORETTA MALINTOPPI IRMGARD MARBOE ANTONIO R. PARRA AUGUST REINISCH STEPHAN W. SCHILL CHRISTOPH H. SCHREUER ANTHONY SINCLAIR MICHAEL WAIBEL

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University Printing House, Cambridge CB2 8BS, United Kingdom One Liberty Plaza, 20th Floor, New York, NY 10006, USA 477 Williamstown Road, Port Melbourne, VIC 3207, Australia 314–321, 3rd Floor, Plot 3, Splendor Forum, Jasola District Centre, New Delhi – 110025, India 103 Penang Road, #05–06/07, Visioncrest Commercial, Singapore 238467 Cambridge University Press is part of the University of Cambridge. It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence. www.cambridge.org Information on this title: www.cambridge.org/9781108494281 DOI: 10.1017/9781316516584 © Christoph H. Schreuer 2001 © Christoph H. Schreuer, Loretta Malintoppi, August Reinisch, and Anthony Sinclair 2009 © Christoph H. Schreuer, Stephan W. Schill, Loretta Malintoppi, August Reinisch, Anthony Sinclair, and Cambridge University Press 2022 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2001 Reprinted 2005 Second edition 2009 9th printing 2019 Third edition 2022 Printed in the United Kingdom by TJ Books Limited, Padstow Cornwall A catalogue record for this publication is available from the British Library. ISBN – 2 Volume Set 978-1-108-49428-1 Hardback ISBN – Volume I 978-1-316-51658-4 Hardback ISBN – Volume II 978-1-316-51661-4 Hardback

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CONTENTS

Foreword to the Third Edition by Meg Kinnear Foreword to the Second Edition by Professor Sir Elihu Lauterpacht, CBE, QC Editors’ Preface to the Third Edition List of Contributors Table of Cases Table of Instruments List of Abbreviations Text of the ICSID Convention

page ix xi xiii xvi xix cxi clxvii clxxiii

Commentary on the ICSID Convention PREAMBLE

1

CHAPTER I International Centre for Settlement of Investment Disputes section 1 Establishment and Organization Article 1 – Establishment of the Centre Article 2 – Seat of the Centre Article 3 – Organization of the Centre

10 13 15

section 2 The Administrative Council Article Article Article Article Article

4 5 6 7 8

– Composition of the Administrative Council – Chairman of the Administrative Council – Functions of the Administrative Council – Decisions of the Administrative Council – No Remuneration for Members

16 17 19 25 28

section 3 The Secretariat Article 9 – Composition of the Secretariat Article 10 – Secretary-General and Deputy Secretary-General Article 11 – Functions of the Secretary-General

29 31 34

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section 4 The Panels Article Article Article Article Article

12 13 14 15 16

– – – – –

Panels of Conciliators and Arbitrators Designation to the Panels Qualities of Panel Members Periods of Office of Panel Members Multiple Designations

39 42 45 55 57

section 5 Financing the Centre Article 17 – Financing

59

section 6 Status, Immunities and Privileges Article Article Article Article Article Article Article

18 19 20 21 22 23 24

– – – – – – –

Legal Personality of the Centre Immunities and Privileges of the Centre Immunity from Legal Process Personal Immunities Immunities of Parties and Witnesses Archives and Communications Tax Exemptions

61 64 65 67 71 75 77

CHAPTER II Jurisdiction of the Centre Article 25 – Jurisdiction Article 26 – Exclusive Remedy Article 27 – Diplomatic Protection

80 539 633

CHAPTER III Conciliation section 1 Request for Conciliation Article 28 – Request for Conciliation

655

section 2 Constitution of the Conciliation Commission Article 29 – Composition of the Commission Article 30 – Appointment by the Chairman Article 31 – Qualities of Conciliators

663 666 668

section 3 Conciliation Proceedings Article 32 – Decision on Jurisdiction Article 33 – Rules on Procedure

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669 671

Contents Article 34 – Conciliation Proceedings and Report Article 35 – Non-Invocation in Subsequent Proceedings

vii 673 681

CHAPTER IV Arbitration section 1 Request for Arbitration Article 36 – Request for Arbitration

683

section 2 Constitution of the Tribunal Article 37 – Composition of the Tribunal Article 38 – Appointment by the Chairman Article 39 – Nationality of Arbitrators Article 40 – Qualities of Arbitrators

703 720 730 740

section 3 Powers and Functions of the Tribunal Article 41 – Decision on Jurisdiction Article 42 – Applicable Law Article 43 – Evidence Article 44 – Rules on Procedure Article 45 – Default of a Party Article 46 – Ancillary Claims Article 47 – Provisional Measures

750 797 907 949 1000 1025 1053

section 4 The Award Article 48 – Award Article 49 – Dispatch, Supplementation and Rectification

1113 1156

section 5 Interpretation, Revision and Annulment of the Award Article 50 – Interpretation Article 51 – Revision Article 52 – Annulment

1185 1200 1217

section 6 Recognition and Enforcement of the Award Article 53 – Binding Force Article 54 – Enforcement Article 55 – State Immunity

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1443 1470 1516

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CHAPTER V Replacement and Disqualification of Conciliators and Arbitrators Article 56 – Replacement Article 57 – Proposal of Disqualification Article 58 – Decision of Disqualification

1554 1566 1603

CHAPTER VI Cost of Proceedings Article 59 – Charges of the Centre Article 60 – Fees and Expenses Article 61 – Apportionment of Expenses

1612 1618 1625

CHAPTER VII Place of Proceedings Article 62 – Proceedings at the Seat of the Centre Article 63 – Proceedings at Another Place

1663 1669

CHAPTE R VIII Disputes between Contracting States Article 64 – International Court of Justice

1676

CHAPTER IX Amendment Article 65 – Proposal to Amend Convention Article 66 – Decision on Amendment

1682 1685

CHAPTER X Final Provisions Article 67 – Signature Article 68 – Ratification and Entry into Force Article 69 – Implementing Legislation Article 70 – Territorial Application Article 71 – Denunciation Article 72 – Continuing Effect of Consent Article 73 – Depositary Article 74 – Registration Article 75 – Notifications by the Depositary Final Clause

1690 1693 1701 1706 1709 1711 1722 1724 1726 1728

General Bibliography Index

1731 1751

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FOREWORD TO THE THIRD EDITION by Meg Kinnear

It is a distinct honor to write the foreword to the third edition of this Commentary on the ICSID Convention. Since its first edition, published in 2001 under the sole authorship of Professor Christoph Schreuer, this text has educated generations of advocates, arbitrators, government officials, and academics, and it is by far the world’s most widely quoted source on the Convention. Indeed, most debates on the Convention are concluded by a determination to ‘check what Schreuer says’ – the text is that iconic. The genesis of the ICSID Convention is well summarized by Sir Elihu Lauterpacht in his 2008 foreword to the second edition of this Commentary, reproduced hereafter. As Elihu Lauterpacht remarks, the Convention was an innovative mechanism designed to bridge differences of opinion in the post-World War II environment concerning how best to provide a legal infrastructure to promote international private investment. The features of the Convention were equally innovative, using techniques that have become so successful that they are now considered ‘commonplace,’ in the words of Elihu Lauterpacht. However, they were anything but commonplace in their conception: the Convention established a self-contained system where non-State entities could sue States directly based on written consent in an investment instrument. The resulting Award was binding and enforceable in all Member States through a simplified mechanism for enforcement. While the services of the Centre were not called upon in the very early years, this began to change in 1972 with the filing of the first case in Holiday Inns SA and others v Morocco (ICSID Case No ARB/72/1). The Holiday Inns case was based on a contract to develop luxury hotels in Morocco, but settled before a final award. Even more monumental was the filing of Asian Agricultural Products Ltd (AAPL) v Republic of Sri Lanka (ICSID Case No ARB/87/ 3) in 1987, the first case based on consent given in an international investment treaty. The AAPL case touched on themes that would subsequently be elaborated on in ICSID jurisprudence, including applicable law under Article 42 of the Convention, the role of customary international law, State responsibility for the conduct of its officials, the proper approach to treaty interpretation, evidentiary rules in investment arbitration, and assessment of the quantum of damages. From 1987 onward, case numbers slowly increased in parallel with the increased number of investment instruments concluded by States, in particular bilateral investment treaties. The trends identified by Elihu Lauterpacht in 2008 have continued to the current day, many on a steadily rising trajectory. As of 31 December 2020, 732 ICSID Convention cases and 71 ICSID Additional Facility cases have been filed. The Centre handles approximately 300 cases at any given time, with proceedings at various stages from the ix

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assessment of a request to initiate an arbitration to the issuance of a decision on annulment. The trend toward cases based on consent in investment treaties has continued, with 60 percent based on bilateral investment treaties, and 16 percent based on sectoral and multilateral investment treaties by the end of 2020. As the number of cases has increased, so has ICSID jurisprudence, with parties bringing ever-more sophisticated arguments that raise the complexities of the interpretation and application of the Convention and its associated rules and regulations. ICSID’s membership also continues to expand. From the first country to sign the ICSID Convention (Tunisia in 1965) to the most recent to ratify it (Djibouti in 2020), a growing number of States have recognized ICSID’s vital role in providing an effective means for States to resolve differences with foreign investors. Today, 155 States are members of ICSID, with a further eight States having signed, but not yet ratified the Convention. The third edition of this Commentary, curated now under the general editorship of Professor Stephan Schill with an expanded set of contributors, has substantially revised the second edition, reflecting important developments in case law and practice since 2008. The text also benefits from the greater availability of ICSID awards and decisions, due in large part to the expanded transparency provisions introduced by the 2006 amendments to the ICSID rules. Topics such as challenges to arbitrators, the use of increasingly complex corporate and ownership structures for making investments, the practice on the concept of investment itself, as well as other jurisdictional arguments about the availability of the Convention, questions relating to arbitral procedure and costs, invocation of post-award remedies, and practice about the unique enforcement provisions of the Convention are among the expanded sections of the book. The text does not address the current rules amendment process, commenced in earnest in 2017 and ongoing at this time. This is a good thing, as the Convention itself is not proposed for amendment at this time and will remain the stable framework supporting the updated rules and regulations. It also gives the authors another project which we trust will come to fruition after the new amended rules are adopted by Member States! We owe Christoph Schreuer and his colleagues our thanks for the instrumental role they have played, and will continue to play, in building an understanding of the ICSID Convention. While the text of the Convention itself has not changed since 1965, it lives and breathes in the hundreds of active cases that come under its rubric. Each edition of this Commentary puts this dynamism on full display and serves as a reminder of the enduring nature of the framework created in 1965. Meg Kinnear Secretary-General of ICSID January 2021

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E D I T O R S ’ P R EF A C E T O T H E TH I R D E D I T I O N

The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) is one of the most remarkable and successful mechanisms for the settlement of international disputes in modern international law. It was adopted by the Executive Directors of the World Bank on 18 March 1965 and entered into force on 14 October 1966. The Convention creates a procedural framework for resolving disputes between host States and foreign investors through arbitration or conciliation. These procedures are administered by a specific international organization, the International Centre for Settlement of Investment Disputes (ICSID, or the Centre). Investment disputes are notoriously difficult to settle and the substantive rules governing international investment relations traditionally controversial. It was the idea of Aron Broches, then the World Bank’s General Counsel, to put ‘procedure before substance.’ This idea led to the conclusion of a multilateral treaty establishing a mechanism to settle such disputes peacefully and effectively, even though consensus on the substantive law was elusive. As conceived by the Directors of the World Bank, the resultant improvement of the investment climate was to benefit both investors and host States and make an important contribution to international economic development. In addition, arbitration and conciliation of investment disputes were thought to help to depoliticize controversies, which otherwise could lead, and in the past have led, to confrontation and sometimes even armed conflict between States. Most remarkably, arbitration under the Convention allows direct judicial proceedings between host States and foreign investors under international law, removing such disputes from domestic courts. The host State’s consent to dispute settlement before the Centre can be contained in direct agreements between States and foreign investors, in bilateral and multilateral investment treaties, and in domestic investment legislation. By consenting to ICSID arbitration, the host State protects itself against other forms of foreign or international litigation and the exercise of diplomatic protection by the investor’s home State. These features have allowed the Convention to contribute to subjecting international investment relations to the international rule of law, rather than power politics, and to enhance the legal security necessary for long-term investments. The Convention is also part of a broader paradigm change in international law: individuals – natural persons and corporations – are no longer mere objects, but are recognized as subjects of international law. During its first decades, the use of the dispute settlement procedures created by the ICSID Convention remained scant. This has changed dramatically over the past twenty years, mainly due to the proliferation of treaty-based investment disputes. Until 2000,

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just over seventy disputes under the Convention had been registered; by 2010, this number had surpassed 300. By the end of 2020, 732 arbitrations and conciliations under the Convention were registered with the Centre. Although it is not the only mechanism to settle such disputes, ICSID has become the core of the modern system of investment dispute settlement. Many of its decisions and awards are public, and serve as precedent in resolving investment disputes, both within and beyond the ICSID framework. Increasingly, ICSID decisions also contribute to the development of other areas of international law, notably the field of State responsibility. The growing number of available cases, together with an increase in scholarly attention, call for systematic treatment of the complex legal questions raised by the ICSID system. The present Commentary covers the Convention’s text in the form of an article-by-article commentary, the Convention’s travaux préparatoires, the Rules and Regulations adopted by the Centre’s Administrative Council, Model Clauses published by the Centre, the ICSID Additional Facility, treaty practice and national legislation relevant to the Convention, agreements between host States and investors, case law, and a wealth of scholarly writings relating to the Convention. The idea for this Commentary was first conceived by Sir Elihu Lauterpacht, the former director of the Research Centre for International Law at the University of Cambridge (now the Lauterpacht Centre for International Law) who extended an invitation to Christoph Schreuer to write such a commentary under the auspices of the Research Centre. This resulted in the first edition of this Commentary, which was published in 2001, building on earlier versions of large portions of the Commentary that appeared in eight instalments in the ICSID Review between 1996 and 2000. A second edition followed in 2009, which was authored by Christoph Schreuer with Loretta Malintoppi, August Reinisch, and Anthony Sinclair. Since 2009, the growth of material on the ICSID Convention, in particular decisions and awards rendered by ICSID tribunals in treaty-based arbitrations, as well as scholarly debates, proliferated. The present edition brings the Commentary up to date and includes material available as of 31 December 2020. It proceeds on the basis of the Rules and Regulations in place as of that date, without reflecting the process to revise these instruments, which was initiated by the ICSID Secretariat in 2018. On the date of completion of this edition, there was no final decision on whether and how the Rules and Regulations would be changed. Moreover, even after their amendment, the Rules and Regulations currently in place will remain relevant in ongoing proceedings for many years to come. The third edition does not simply update the second edition by adding discussion of newer cases and developments, but reflects more fundamental developments and partly required extensive rewriting. This is particularly apparent in respect of the jurisdictional requirements of the ICSID Convention, such as the notion of investment, proposals for disqualification of ICSID arbitrators, the procedural powers of ICSID tribunals, including provisional measures and counterclaims, decisions on costs, and proceedings in national courts concerning the enforcement of ICSID awards. The growth of material made it necessary to tackle this new edition with a larger team of Contributors, aided by a team of Editors, and under the oversight of a General Editor. It was also decided to attribute the work on specific parts of the Commentary to individual authors, as set out in the List of Contributors. All of this notwithstanding, the general approach of the

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Editors’ Preface to the Third Edition

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Commentary remains unchanged: to provide a systematic, comprehensive, objective, and authoritative assessment of the legal issues raised by the Convention. In preparing the third edition, we received assistance from many people. Above all, Nadine Berger at the Max Planck Institute for Comparative Public Law and International Law in Heidelberg was instrumental in adapting the references to a new citation system, ensuring consistency across the different parts of the Commentary, preparing the table of cases, and providing research assistance to the General Editor. Without her, this endeavor would hardly have been possible. Individual contributors received help from Alexander Senegacnik (of Sciences Po Law School, Paris); Haris Huremagić (at the Bundeswehr University Munich); Martin Andrew Jarrett and Violetta SefkowWerner (at the Max Planck Institute for Comparative Public Law and International Law); Andrea Bjorklund (of McGill University); David Pusztai, Kálmán Varga, Odysseas Repousis, Marina Boterashvili, Jagdish Menezes, Hannah Dixie, Karolina Latasz, Neerja Gurnani, Ion Tzifras, Kristina Buckberry, and Athina Manoli (all at Quinn Emanuel Urquhart & Sullivan LLP, London); Vid Prislan and Zoë Heij (at the University of Amsterdam); Diego Javier Perez Farias (at New York University School of Law); Rhys Carvosso (at the University of Sydney Law School); as well as Céline Braumann, Julia Hildebrandt, Michael Moffatt, Sara Mansour-Fallah, Nadine Rose, Tensin Amrei Studer, Johannes Tropper, Kilian Wagner, and Maximilian Weninger (at the University of Vienna). The General Editor would also like to thank the Max Planck Institute for Comparative Public Law and International Law in Heidelberg for housing him as a Senior Research Affiliate. Maureen MacGlashan contributed her valuable expertise in preparing the index and tables. Sophie Rosinke did an excellent job at copy-editing. The Editors February 2021

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LIST OF CONTRIBUTORS

Stanimir Alexandrov (Art. 26) has served as an arbitrator in numerous investor–State and commercial arbitrations. He has been appointed to the Chairman’s list of ICSID’s Panel of Arbitrators and the rosters of various arbitral institutions. Until August 2017, he was co-leader of the international arbitration practice at Sidley Austin LLP. Before entering private practice, Mr. Alexandrov was Vice-Minister of Foreign Affairs of Bulgaria. He has taught courses in international law and arbitration for over twenty years and is a professor at the George Washington University Law School. Christina Binder (Arts. 65–75, Final Clause) has been Professor of International Law and International Human Rights Law at the Bundeswehr University Munich since 2017. Previously, she was Professor of International Law at the University of Vienna. She is a member of the Executive Board and former Vice-President of the European Society of International Law. Christina Binder has provided expert opinions in investment arbitrations. Chester Brown (Arts. 43–47) is Professor of International Law and International Arbitration at the University of Sydney Law School, a Barrister at 7 Wentworth Selborne Chambers, Sydney, and an Overseas Member of Essex Court Chambers, London. He teaches and researches in the fields of public international law, international dispute settlement, international arbitration, and international investment law. He also maintains a practice in these fields, and has been involved as counsel in proceedings before the International Court of Justice, the Iran–United States Claims Tribunal, interState and investor–State arbitral tribunals, as well as in inter-State conciliation proceedings and international commercial arbitrations. Ursula Kriebaum (Arts. 41 and 42) is Professor for Public International Law at the University of Vienna. She is a member of the Permanent Court of Arbitration, an Alternate Member of the Court of Conciliation and Arbitration within the Organization for Security and Co-operation in Europe (OSCE), and a member of the Arbitration Panel for the Protocol on Cultural Cooperation to the Free Trade Agreement between the European Union and its Member States and the Republic of Korea. She acts as legal expert in international investment cases. Loretta Malintoppi (Arts. 12–16, 27, 37–40, 56–58, 64) is an independent arbitrator with 39 Essex Chambers, based in Singapore. She is dually qualified (Paris and Rome Bars) and has extensive experience in international commercial arbitration, investment arbitration, and public international law. She is a past member and a vice-president of

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the International Chamber of Commerce (ICC) International Court of Arbitration. She is currently a member of the Governing Board of the International Council for Commercial Arbitration (ICCA) and was appointed to the ICSID Panel of Arbitrators by the Chairman of the World Bank in 2017. Irmgard Marboe (Arts. 59–61) is Professor of International Law at the Department of European, International and Comparative Law at the University of Vienna. She has widely published on the issue of compensation and damages in international investment law. Her book Calculation of Compensation and Damages in International Investment Law, published by Oxford University Press (1st edn 2009, 2nd edn 2017), is frequently quoted in investor–State arbitration cases. She is Co-Editor-in-Chief of the Journal of Damages in International Arbitration and a member of the Panel of Arbitrators for Space-Related Disputes at the Permanent Court of Arbitration. Antonio R. Parra (comment and insight on all Articles) was Legal Adviser and the first Deputy Secretary-General of ICSID. He is an Honorary Secretary-General of the International Council for Commercial Arbitration (ICCA), a Fellow of the Chartered Institute of Arbitrators and an Ethics Adviser under the Code of Conduct for Board Officials of the World Bank Group. His new book, ICSID: An Introduction to the Convention and Centre, was published by Oxford University Press in May 2020. August Reinisch (Arts. 18–24, 53–55) is Professor of International and European Law at the University of Vienna. He is a member of the International Law Commission and of the Permanent Court of Arbitration, membre associé of the Institut de droit international, President of the Austrian Branch of the International Law Association, and former President of the German Society of International Law. August Reinisch has served as arbitrator in investment cases mostly under ICSID and UNCITRAL Rules, and provided expert opinions in the field. Stephan W. Schill (Art. 25(1) – except ‘consent,’ ‘withdrawal of consent,’ and ‘national of another Contracting State’ – 25(3) and 25(4), that is, Art. 25 A–F, H, O and P) is Professor of International and Economic Law and Governance at the University of Amsterdam. He is a member of the List of Arbitrators of ICSID and regularly serves as arbitrator in investor–State cases. He is also General Editor of ICCA Publications and Co-Editor-in-Chief of the Journal of World Investment & Trade. Christoph Schreuer (Preamble, Arts. 1–11, 17, 25(1) – ‘consent,’ ‘withdrawal of consent’ and ‘national of another Contracting State,’ that is, Art. 25 G, I and J – 36, 62, 63) is a former Professor of International Law at Johns Hopkins University, University of Salzburg, and University of Vienna. He is Of Counsel with Zeiler Floyd Zadkovich in Vienna and works as legal expert and arbitrator in investment cases. He was the sole author of the first edition of this Commentary and co-author and general editor of the second edition. Anthony Sinclair (Arts. 25(2), 48–52) is Partner in the international arbitration group of Quinn Emanuel Urquhart & Sullivan LLP. He has more than twenty years of experience specializing in international commercial and investment treaty arbitration, representing both private investors and governments. He is widely published in the field of investment treaty arbitration. He holds LLM and PhD degrees in public international

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law and international arbitration from the University of Cambridge, England and BA and LLB Hons degrees from the University of Canterbury, New Zealand. Michael Waibel (Arts. 28–35) is Professor of International Law at the University of Vienna. Previously, he taught for a decade at the University of Cambridge, and was CoDeputy Director of the Lauterpacht Centre. He co-edits the ICSID Reports. He has been a Visiting Professor at Harvard, St Gallen, and Vanderbilt.

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TABLE OF CASES

NOTE: Bold numbers in the Table refer to the Articles of the ICSID Convention. Lean numbers refer to paragraphs in the Commentary. Unless indicated otherwise, investor–State proceedings under the ICSID Convention, the Additional Facility, and other investor–State arbitrations can be found on the following websites: s International Centre for Settlement of Investment Disputes Investment Treaty Arbitration Investment Claims Investor–State Law Guide Jus Mundi

The names of decisions used in the list of cases do not necessarily reflect the official names given by the commission, tribunal, or ad hoc committee, but may be generic titles reflecting the type of decision.

ICSID CONVENTION AND ADDITIONAL FACILITY PROCEEDINGS Arbitration Proceedings (ICSID Convention) 9REN Holding v Spain 9REN Holding Sarl v Kingdom of Spain (Case No ARB/15/15) Instrument invoked: ECT (1994) Award (31 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.32, 44 Decision on Rectification (6 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.33 AAPL v Sri Lanka Asian Agricultural Products Ltd v Democratic Socialist Republic of Sri Lanka (Case No ARB/87/3) Instrument invoked: Sri Lanka–United Kingdom BIT (1980) Award (w/ Diss Op Asante) (27 June 1990) . . . . . . . . . . . . . . . . . . . . . 25.33, 72, 98, 286, 830, 851, 41.72, 42.95–6, 106–12, 144, 151, 153, 235, 236, 245, 248, 269, 360, 43.48, 60, 94, 147, 156, 44.35, 58, 48.116, 120, 62.16 Dissenting Opinion Asante (15 June 1990) . . . . . . . . . . . . . . . 42.109–10, 269, 360, 48.116 Abaclat and others v Argentina Abaclat and others v Argentine Republic (formerly Giovanna a Baccara and others v Argentine Republic) (Case No ARB/07/5)

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Instrument invoked: Argentina–Italy BIT (1990) Procedural Order No 3 (27 January 2010) . . . . . . . . . . . . . . . . . . . . . . . . 43.66, 44.170–1, 48.43 Decision on Jurisdiction (w/ Diss Op Abi-Saab) (4 August 2011) . . . . . . 25.2, 24, 221, 260, 272–3, 301, 318, 424–6, 592–3, 854, 857, 987, 994, 1042, 1060, 1118, 1176–8, 1490, 26.129, 139, 217–21, 236, 325, 41.104, 123, 42.24, 44.71–2, 45.26, 101, 59.3, 5, 61.19 Recommendation on Disqualification (19 December 2011) . . . . . . . . . . . . . . . . . . . . . . . . . 57.87 Decision on Disqualification (21 December 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.7 Procedural Order No 11 (27 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.21, 23 Procedural Order No 13 (w/ Diss Op Torres Bernárdez) (27 September 2012) . . . . . 47.176, 48.124 Procedural Order No 15 (w/ Diss Op Torres Bernárdez) (20 November 2012) . . . . . . 43.60, 137, 48.124 Procedural Order No 17 (w/ Diss Op Torres Bernárdez) (8 February 2013) . . . . . . . . 48.124 Procedural Order No 21 (w/ Ind Op Torres Bernárdez) (2 May 2013) . . . . . . . . . . . . . 48.124 Procedural Order No 22 (w/ Ind Op Torres Bernárdez) (31 July 2013) . . . . . . . . . . . . 48.124 Decision on Disqualification (4 February 2014) . . . . . . . . . . . . . . . 14.9, 13, 40.24, 57.41, 47, 51, 179, 58.15 Procedural Order No 23 (w/ Diss Op Torres Bernárdez) (7 February 2014) . . . . . . . . 48.124 Procedural Order No 27 (w/ Diss Op Torres Bernárdez) (30 May 2014) . . . . . . . . . . . 48.124 Procedural Order No 28 (w/ Diss Op Torres Bernárdez) (9 June 2014) . . . . . . . . . . . . 48.124 Procedural Order No 30 (w/ Diss Op Torres Bernárdez) (11 June 2014) . . . . . . . . . . . 48.124 Procedural Order No 32 (w/ Diss Op Torres Bernárdez) (1 August 2014) . . . . . . . . . 48.124 Procedural Order No 34 (w/ Diss Op Torres Bernárdez) (9 December 2014) . . . . . . 48.124 Consent Award (w/ Decl Torres Bernárdez, Add Decl Tercier and van den Berg and Add Decl Torres Bernárdez) (29 December 2016) . . . . . 25.1116, 43.75, 139, 48.124, 56.48 ABCI Investments v Tunisia ABCI Investments Ltd v Republic of Tunisia (Case No ARB/04/12) Instruments invoked: Investment Law (Tunisia 1969); Netherlands–Tunisia BIT (1998) Decision on Jurisdiction (w/ Diss Op Stern) (18 February 2011) . . . . . . . . . . . . . . 25.79, 211, 248, 250, 254, 285, 823, 900, 931, 1914 Accession Mezzanine v Hungary Accession Mezzanine Capital LP and Danubius Kereskedöház Vagyonkezelö Zrt v Republic of Hungary (Case No ARB/12/3) Instrument invoked: Hungary–United Kingdom BIT (1987) Decision under Rule 41(5) (16 January 2013) . . . . . . . . . . . . . . 25.1032, 26.211, 41.147, 150 Decision on Jurisdiction (8 August 2013) . . . . . . . . . . . . . . . . . . . . . . . . 36.59, 41.157, 160, 167 Award (17 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.451 ACP Axos Capital v Kosovo ACP Axos Capital GmbH v Republic of Kosovo (Case No ARB/15/22) Instruments invoked: Germany–Yugoslavia BIT (1989); Investment Law (Kosovo 2014) Procedural Order No 4 (6 October 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.140 Award (3 May 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.391, 61.15 Adamakopoulos and others v Cyprus Theodoros Adamakopoulos and others v Republic of Cyprus (Case No ARB/15/49) Instruments invoked: BLEU–Cyprus BIT (1991); Cyprus–Greece BIT (1992) Decision on Jurisdiction (7 February 2020) . . . . . . . . . . . 25.289, 300, 320, 337, 428, 596–7, 1116, 26.229, 41.123, 42.14, 44.74, 53.16, 54.122, 61.108 ADC v Hungary ADC Affiliate Ltd and ADC & ADMC Management Ltd v Republic of Hungary (Case No ARB/03/16)

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Instrument invoked: Cyprus–Hungary BIT (1989) Award (2 October 2006) . . . . . . . . . . . . . . . . 25.24, 98, 122, 141, 405, 851, 857, 1187, 1190, 1223, 37.33, 41.124, 42.131, 134, 243, 245, 248, 254, 43.60, 155, 44.161–2, 53.21, 56.28, 61.45–7, 49–50, 57, 65, 62.20 Addiko v Croatia Addiko Bank AG and Addiko Bank dd v Republic of Croatia (Case No ARB/17/37) Instrument invoked: Austria–Croatia BIT (1997) Decision on Jurisdiction (12 June 2020) . . . . . . . . . . . . . 25.1089, 42.134, 240, 52.275, 53.16 AES v Argentina AES Corporation v Argentine Republic (Case No ARB/02/17) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (26 April 2005) . . . . . . . . . . . . . . . . . 25.68, 70, 72, 74, 89, 127, 159, 239, 985, 1117, 26.129, 130, 336, 27.3, 42.13, 17, 252, 43.137, 53.21 AES v Hungary AES Summit Generation Ltd and AES-Tisza Erömü Kft v Republic of Hungary (Case No ARB/ 07/22) Instrument invoked: ECT (1994) Award (23 September 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.68, 42.239, 43.131, 61.29, 30 Decision on Annulment (29 June 2012) . . . . . 52.48, 260, 443, 468, 521, 536, 57.97, 61.40 AES v Kazakhstan AES Corporation and Tau Power BV v Republic of Kazakhstan (Case No ARB/10/16) Instruments invoked: Kazakhstan–United States BIT (1992); ECT (1994); Investment Law (Kazakhstan 1994) Award (1 November 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.209–10, 42.184, 190 African Holding v DR Congo African Holding Company of America, Inc and Société Africaine de Construction au Congo SARL v Democratic Republic of the Congo (Case No ARB/05/21) Instrument invoked: DR Congo–United States BIT (1984) Award (w/ Diss Op de Witt Wijnen) (29 July 2008) . . . . . . . . . . 25.299, 337, 340, 726, 41.123, 48.116 Agility v Pakistan Agility for Public Warehousing Company KSC v Islamic Republic of Pakistan (Case No ARB/11/8) Instrument invoked: Kuwait–Pakistan BIT (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.25 Decision on Jurisdiction (27 February 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.851, 26.264 AGIP v Congo AGIP SpA v People’s Republic of the Congo (Case No ARB/77/1) Instrument invoked: Contract Award (30 November 1979) (1993) 1 ICSID Reports 309 . . . . . . . . . 25.30, 77, 103, 660–1, 954, 38.25, 42.64, 149–50, 176, 245, 291, 337, 43.47, 82, 88, 44.35, 45.56, 47.47, 54, 113, 122, 61.55, 63.13 Agroinsumos Ibero-Americanos v Venezuela Agroinsumos Ibero-Americanos, SL and others v Bolivarian Republic of Venezuela (Case No ARB/16/23) Instrument invoked: Spain–Venezuela BIT (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.16 Aguas del Tunari v Bolivia Aguas del Tunari SA v Republic of Bolivia (Case No ARB/02/3) Instrument invoked: Bolivia–Netherlands BIT (1992)

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schreuer’s commentary on the icsid convention Decision on Jurisdiction (w/ Decl Alberro-Semerena) (21 October 2005) . . . . . 25.185, 186, 707, 715, 1229, 1267, 1276, 1325, 1330, 2104, 1360–1, 1377, 1394–9, 1405, 26.129, 141–4, 27.59–60, 42.236, 43.24–5, 60, 107, 127, 137, 144, 148, 44.148, 178–9 Declaration Alberro-Semerena (11 October 2005) . . . . . . . . . . . . . . . . . . . . . . . 25.1397, 1399

Aguaytia v Peru Aguaytia Energy, LLC v Republic of Peru (Case No ARB/06/13) Instrument invoked: Contract Award (11 December 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.199, 770, 954 Ahmonseto v Egypt Ahmonseto, Inc and others v Arab Republic of Egypt (Case No ARB/02/15) Instrument invoked: Egypt–United States BIT (1982) Award (18 June 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1116, 61.89 162 Order on Discontinuance (13 October 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 AHS Niger and Menzies v Niger AHS Niger and Menzies Middle East and Africa SA v Republic of Niger (Case No ARB/11/11) Instruments invoked: Contract; Investment Law (Niger 1989) Decision on Jurisdiction (13 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1282, 1294, 1301 AIG v Kazakhstan AIG Capital Partners, Inc and CJSC Tema Real Estate Company v Republic of Kazakhstan (Case No ARB/01/6) Instrument invoked: Kazakhstan–United States BIT (1992) Award (7 October 2003) . . . . . . . . . 25.1392, 38.25, 41.59, 124, 42.248, 54.73–4, 55.39–40, 78, 128 Aktau Petrol v Kazakhstan Aktau Petrol Ticaret AŞ v Republic of Kazakhstan (Case No ARB/15/8) Instruments invoked: Kazakhstan–Turkey BIT (1992); ECT (1994) Decision on Annulment (21 June 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 704 Al Tamimi v Oman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.63 Adel A Hamadi Al Tamimi v Sultanate of Oman (Case No ARB/11/33) Instrument invoked: Oman–United States FTA (2006) Procedural Order No 2 (28 September 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.170 Procedural Order No 6 (18 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.160 Rulings on Production of Documents (21 August 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.64 Award (3 November 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.180, 1116, 41.160, 43.170, 44.63 Alapli v Turkey Alapli Elektrik BV v Republic of Turkey (Case No ARB/08/13) Instruments invoked: Netherlands–Turkey BIT (1986); ECT (1994) Award (16 July 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.157, 43.60, 48.132 Decision on Annulment (10 July 2014) . . . . . . . 44.27, 48.7, 19, 61, 52.14, 48, 496, 501–3, 61.40, 62.20, Final Clause.6 Alcoa Minerals v Jamaica Alcoa Minerals of Jamaica, Inc v Jamaica (Case No ARB/74/2) Instrument invoked: Contract Decision on Jurisdiction (6 July 1975) (1979) 4 YB Comm Arb 206 (excerpts) . . . . . 24.79, 25.89, 183, 1069, 1496, 26.206, 38.26, 41.233, 45.15, 54.99 Alemanni and others v Argentina Giovanni Alemanni and others v Argentine Republic (Case No ARB/07/8)

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Instrument invoked: Argentina–Italy BIT (1990) Decision on Jurisdiction (17 November 2014) . . . . . . . . . . . 25.26, 301, 426, 595, 987, 994, 1116, 1487, 26.226–7, 325, 27.38, 41.88, 96, 61.101 Order on Discontinuance (14 December 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . .26.228, 61.113 Alghanim v Jordan Fouad Alghanim & Sons Co for General Trading & Contracting, W.L.L. and Fouad Mohammed Thunyan Alghanim v Hashemite Kingdom of Jordan (Case No ARB/13/38) Instrument invoked: Jordan–Kuwait BIT (2001) Procedural Order No 2 (24 November 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . 47.16, 56, 89, 174 Award (14 December 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.76, 399, 678, 47.174 Almasryia v Kuwait Almasryia for Operating & Maintaining Touristic Construction Co LLC v State of Kuwait (Case No ARB/18/2) Instrument invoked: Egypt–Kuwait BIT (2001) Award (w/ Diss Op Dévaud) (1 November 2019) . . . . . . . . . 41.104, 135, 148, 153–4, 44.33 Alpha Projektholding v Ukraine Alpha Projektholding GmbH v Ukraine (Case No ARB/07/16) Instrument invoked: Austria–Ukraine BIT (1996) Decision on Disqualification (19 March 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.67 Award (8 November 2010) . . . . . . . . 25.69, 89, 139, 213, 239, 254, 260 406, 269, 277, 300, 421, 458, 460, 968, 42.11, 31, 133, 135, 47.67, 61.29, 57, 74 Alpiq v Romania Alpiq AG v Romania (Case No ARB/14/28) Instruments invoked: Romania–Switzerland BIT (1993); ECT (1994) Decision on Rectification (21 March 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.33 Álvarez y Marín v Panama Álvarez y Marín Corporación SA and others v Republic of Panama (Case No ARB/15/14) Instruments invoked: Netherlands–Panama BIT (2000); Central America–Panama FTA (2002) Reasoning of Decision under Rule 41(5) (4 April 2016) . . . . . . . . . . . . . . . . . . . . . .41.142, 144 Award (12 October 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.459, 466–8 Alyafei v Jordan Ali Alyafei v Hashemite Kingdom of Jordan (Case No ARB/15/24) Instruments invoked: The Unified Agreement for the Investment of Arab Capital in the Arab States (1980); Italy–Jordan BIT (1996) Order on Discontinuance (11 July 2016) (not public) . . . . . . . . . . . . . . . . . . 39.12, 61.113 Ambiente Ufficio and others v Argentina Ambiente Ufficio SpA and others v Argentine Republic (Case No ARB/08/9) Instrument invoked: Argentina–Italy BIT (1990) Decision on Jurisdiction (8 February 2013) . . . . . . .25.8, 26, 141, 146, 186, 239, 240, 245, 249, 260, 296, 301, 319, 426, 594, 851, 987, 994, 1473, 1487, 1490, 1493, 1504, 26.222–8, 325, 36.44, 41.96, 123, 42.14, 43.147, 44.74, 45.18, 48.104, 53.21, 61.101, Final Clause.6 Order on Discontinuance (w/ Ind Statement Torres Bernárdez) (28 May 2015) . . . . 61.113 Individual Statement Torres Bernárdez (4 May 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . 61.113 Amco v Indonesia Amco Asia Corporation and others v Republic of Indonesia (Case No ARB/81/1) Instrument invoked: Contract Decision on Disqualification (24 June 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.37

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Decision on Jurisdiction (25 September 1983) (1993) 1 ICSID Reports 389 . . . . Preamble.13, 25.134, 235–6, 505, 648–9, 683–5, 765, 770, 776, 800, 881, 954, 1037, 1047–8, 1186, 1189, 1267, 1284–6, 1308–11, 1331, 1363, 1372, 1373, 1383, 1414, 26.235–6, 40.24, 41.21, 46, 52, 88, 106, 248, 52.21, 74 Decision on Provisional Measures (9 December 1983) (1993) 1 ICSID Reports 410 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.293–4, 44.155, 47.192–4, 206, 227 Award (20 November 1984) (1993) 1 ICSID Reports 413 . . . . . . . . . . Preamble.13, 25.404, 41.122, 123, 42.113, 202, 226, 245, 248, 258, 279–81, 340, 43.150, 46.32, 49, 78, 49.21, 52.74, 267, 284–7, 300, 364, 491, 630, 61.30 Decision on Stay of Enforcement (17 May 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.738 Decision on Annulment (16 May 1986) (1993) 1 ICSID Reports 509 . . . . 25.98, 686, 913, 26.330–1, 42.38, 40–1, 42, 170, 213, 248, 252, 263, 281, 286–7, 340, 351, 43.79, 81, 95, 44.10, 46.33, 78, 48.56, 75, 80, 110, 49.88, 52.14, 19, 27, 29, 32, 50, 53, 58.101, 74, 95– 8, 105, 188, 226, 244, 246, 264–7, 284–9, 295, 304–8, 401–2, 439, 463, 474, 491, 515, 526, 537, 559–60, 576, 589, 602, 609, 619, 630, 642, 647–9, 654, 691–3, 698, 722, 730, 732, 793, 61.37 Resubmitted Case: Decision on Jurisdiction (10 May 1988) . . . . . . . . . . . 25.30, 153–4, 686, 41.5, 42.21, 248, 46.33–5, 51, 98, 50.21, 52.11, 29, 267, 619, 621–2, 800, 806, 814, 816–17, 824–5, 834, 841–2, 846, 54.36 Resubmitted Case: Award (5 June 1990) . . . . . 25.237, 26.238, 42.248, 288–9, 308, 46.32, 78, 49.51, 100, 51.85, 52.29, 30, 364, 826, 837, 844, 845, 846, 61.29, 96, 120 Resubmitted Case: Decision on Supplementation and Rectification (17 October 1990) (1993) 1 ICSID Reports 638 . . . . . . . . . . . . . . . . . . . . . . . 49.27, 51, 52, 100, 52.85, 364, 365, 615 Resubmitted Case: Decision on Stay of Enforcement (2 March 1991) . . . . . . 52.738, 745, 765 Resubmitted Case: Decision on Annulment (17 December 1992) . . . . . . . . . . . 49.51, 52, 88, 52.10, 13, 14, 17, 19, 20, 27, 28, 44, 48, 85, 111, 194–5, 229–30, 364, 366, 443, 464–5, 472, 474, 578, 590, 600, 612, 623, 698, 722, 730, 763, 793, 820–1, 61.41 Ampal-American v Egypt Ampal-American Israel Corporation and others v Arab Republic of Egypt (Case No ARB/12/11) Instruments invoked: Egypt–United States BIT (1986); Egypt–Germany BIT (2005) Decision on Jurisdiction (1 February 2016) . . . . . . . . . 25.48, 466, 897, 1108, 1110, 26.146, 181–4, 41.58, 124, 156 Decision on Liability and Heads of Loss (21 February 2017) . . . . . . . . . . . . . . . . . . . . . 26.184 AMT v Zaire American Manufacturing & Trading, Inc v Republic of Zaire (Case No ARB/93/1) Instrument invoked: DR Congo–United States BIT (1984) Procedural Order No 2 (5 December 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.99 Award (w/ Ind Op Golsong and Decl Mbaye) (21 February 1997) . . . . . . . 25.33, 88, 98, 678, 852, 859, 985, 37.58, 38.25, 41.21, 52, 68, 43.81, 137, 139, 44.64, 45.43, 59, 74, 85, 99, 48.19, 50, 116 Anglo-Adriatic v Albania Anglo-Adriatic Group Ltd v Republic of Albania (Case No ARB/17/6) Instrument invoked: Investment Law (Albania 1993) Award (7 February 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.450, 452, 459, 962 Ansung Housing v China Ansung Housing Company, Ltd v People’s Republic of China (Case No ARB/14/25) Instrument invoked: China–Korea BIT (2007) Award (9 March 2017) . . . . . . . . . . 25.946, 1032, 37.19, 41.127, 138, 144, 148, 150, 61.49

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Antin v Spain Infrastructure Services Luxembourg Sàrl and Energia Termosolar BV (formerly Antin Infrastructure Services Luxembourg Sàrl and Antin Energia Termosolar BV) v Kingdom of Spain (Case No ARB/13/31) Instrument invoked: ECT (1994) Award (15 June 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.987, 41.63, 157 Decision on Rectification (29 January 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.34, 36, 83 Decision on Stay of Enforcement (21 October 2019) . . . . . . . . . . 52.742, 758, 53.62, 54.44, 56.32 Arif v Moldova Franck Charles Arif v Republic of Moldova (Case No ARB/11/23) Instrument invoked: France–Moldova BIT (1997) Award (8 April 2013) . . . . . . . . 25.70, 79, 142, 334, 347, 405, 464, 985, 1118, 1122, 1137, 26.340, 341, 343–4, 54.95–7, 61.33 Astaldi v Honduras I Astaldi SpA & Columbus Latinoamericana de Construcciones SA v Republic of Honduras (Case No ARB/99/8) Instrument invoked: Contract Award (19 October 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.12, 35, 61.46 Astaldi v Honduras II Astaldi SpA v Republic of Honduras (Case No ARB/07/32) Instrument invoked: Contract Award (17 September 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 ATA Construction v Jordan ATA Construction, Industrial and Trading Company v Hashemite Kingdom of Jordan (Case No ARB/08/2) Instrument invoked: Jordan–Turkey (1993) Award (18 May 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.70, 180, 303, 26.340, 42.236, 61.29 Decision on Interpretation and Provisional Measures (7 March 2011) . . . . . 50.4, 5, 12–17, 29, 33, 55, 61.110, 112, 113 Order on Discontinuance (11 July 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57.101, 61.102 Atlantic Triton v Guinea Atlantic Triton Company Ltd v People’s Revolutionary Republic of Guinea (Case No ARB/84/1) Instrument invoked: Contract Award (21 April 1986) (1988) 115 JDI 181 (excerpts); (1995) 3 ICSID Reports 13 . . . . 25.954, 26.276–9, 37.58, 41.47, 55, 124, 42.53, 334, 350, 361, 46.23, 49, 54, 100, 47.125–7, 129, 146, 49.21, 30, 61.33 Autopista v Venezuela Autopista Concesionada de Venezuela, CA v Bolivarian Republic of Venezuela (Case No ARB/ 00/5) Instrument invoked: Contract Decision on Jurisdiction (27 September 2001) . . . . . . . . . . . . . 25.199, 510, 889, 1184, 1186, 1198, 1236, 1262, 1267, 1271, 1274, 1311, 1316, 1330, 1343, 1375–6, 1378, 1381, 1395, 1411–12, 1421, 27.10–11, 16, 57, 41.123 Award (23 September 2003) . . . . . . . . . 26.241–2, 41.58, 122, 42.71, 103–5, 165, 192, 221, 248, 295–6, 52.205, 61.33

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Awdi v Romania Hassan Awdi, Enterprise Business Consultants, Inc and Alfa El Corporation v Romania (Case No ARB/10/13) Instrument invoked: Romania–United States BIT (1992) Award (2 March 2015) . . . . . . . . . . . . . . . . . . . . . . . . . 25.180, 277, 284, 328, 335, 336, 42.245 Azpetrol v Azerbaijan Azpetrol International Holdings BV, Azpetrol Group BV and Azpetrol Oil Services Group BV v Republic of Azerbaijan (Case No ARB/06/15) Instrument invoked: ECT (1994) Award (8 September 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.54, 78, 743, 42.61, 48.23, 62.16 Azurix v Argentina Azurix Corporation v Argentine Republic (Case No ARB/01/12) Instrument invoked: Argentina–United States BIT (1991) Decision on Provisional Measures (6 August 2003) . . . . . . 47.15, 16, 17, 69, 96, 108, 115, 198, 231, 247 Decision on Jurisdiction (8 December 2003) . . . . . . . . .25.84, 180, 291, 334, 336, 344, 851, 985, 26.67, 79, 118–19, 145, 41.60, 68, 123, 42.12 Decision on Disqualification (25 February 2005) (not public) . . . . . . . . . . . . . . . . 40.24, 57.60 Award (2006) . . . . . . . . . . . . . . 41.122, 42.155, 245, 252, 265, 316, 43.60, 70, 47.56, 53.22, 56.27, 57.60, 61.60, 70, 62.20, 63.25 Decision on Stay of Enforcement (28 December 2007) . . . . . . . . 52.12, 717, 722, 730, 738, 753, 779, 790 Decision on Annulment (1 September 2009) . . . . . . . . . . . . . . . 14.14, 15, 25.348, 37.8, 41.2, 42.132, 135, 43.34, 44.27, 51.23, 52.24, 111, 131, 145, 155, 205, 275, 359, 388, 483, 550, 53.82, 58.11, 61.38 Banro v DR Congo Banro American Resources, Inc and Société Aurifère du Kivu et du Maniema SARL v Democratic Republic of the Congo (Case No ARB/98/7) Instrument invoked: Contract Award (w/ Diss Op Geach) (1 September 2000) . . . . . . . . . 25.692, 726, 1237, 27.9, 12, 16, 41.127, 48.116, 120, 140 Bayindir v Pakistan Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Islamic Republic of Pakistan (Case No ARB/ 03/29) Instrument invoked: Pakistan–Turkey BIT (1995) Decision on Jurisdiction (14 November 2005) . . . . . . 25.26, 49, 68, 84, 89, 239, 244, 250, 254, 266, 276, 291, 454, 897, 987, 26.134–6, 175–6, 36.21, 41.52, 85, 86, 96, 108, 123, 42.236, 245, 43.159, 47.15, 17, 57, 70, 131, 53.21 Award (27 August 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.921, 943 Baymina v Boru Baymina Enerji Anonim Şirketi v Boru Hatları ile Petrol Ta¸sıma Anonim Şirketi (Case No ARB/14/35) Instrument invoked: Contract Decision on Jurisdiction (19 August 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.546, 52.48 Award (28 July 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.546 BayWa v Spain BayWa re renewable energy GmbH and BayWa re Asset Holding GmbH v Kingdom of Spain (Case No ARB/15/16)

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Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Directions on Quantum (2 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1020, 53.21 Bear Creek Mining v Peru Bear Creek Mining Corporation v Republic of Peru (Case No ARB/14/21) Instrument invoked: Canada–Peru FTA (2009) Procedural Order No 2 (19 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.90 Procedural Order No 5 (21 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.185 Award (w/ Diss Op Sands) (30 November 2017) . . . . . . . . . . . . . . 25.141, 142, 459, 468, 477 Beijing Urban Construction v Yemen Beijing Urban Construction Group Company. Ltd v Republic of Yemen (Case No ARB/14/30) Instrument invoked: China–Yemen BIT (1998) Decision on Jurisdiction (31 May 2017) . . . . . . . . . . . . . . . . . . . . . . 25.585, 979, 1025, 26.146 Belenergia v Italy Belenergia SA v Italian Republic (Case No ARB/15/40) Instrument invoked: ECT (1994) Award (6 August 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1020 Benvenuti & Bonfant v Congo SARL Benvenuti & Bonfant v People’s Republic of the Congo (Case No ARB/77/2) Instrument invoked: Contract Award (15 August 1980) (1993) 1 ICSID Reports 335 . . . . . . . . 25.24, 30, 98, 954, 26.232, 329, 41.52, 122, 42.73, 94, 191, 201, 210, 245, 248, 277, 338, 349, 360, 362, 43.79, 81, 95, 139, 44.36, 96, 45.30–6, 57, 67, 83, 46.30, 53, 77, 96, 48.23, 54.59–62, 55.45, 127, 56.29, 61.16, 57, 96, 62.20, 63.13 Big Sky Energy v Kazakhstan Big Sky Energy Corporation v Republic of Kazakhstan (Case No ARB/17/22) Instrument invoked: Kazakhstan–United States BIT (1992) Decision on Disqualification (3 May 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.20 BIVAC v Paraguay Bureau Veritas, Inspection, Valuation, Assessment and Control, BIVAC BV v Republic of Paraguay (Case No ARB/07/9) Instrument invoked: Netherlands–Paraguay BIT (1992) Decision on Jurisdiction (29 May 2009) . . . . . . . . 25.146, 213, 431, 851, 1187, 1228, 1229, 26.145, 155–7, 41.123 Further Decision on Jurisdiction (9 October 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.28 Biwater Gauff v Tanzania Biwater Gauff (Tanzania) Ltd v United Republic of Tanzania (Case No ARB/05/22) Instruments invoked: Tanzania–United Kingdom BIT (1994); Investment Law (Tanzania 1997) Procedural Order No 1 (31 March 2006) . . . . . . 43.60, 79, 83, 108, 44.63, 47.2, 15, 16, 17, 25, 57, 71, 95, 97–8, 109, 117–22 Procedural Order No 2 (24 May 2006) . . . . . . . . . . . . . . . . . . . . . . . . . 43.60, 79, 99–100, 44.63 Procedural Order No 3 (29 September 2006) . . . . . . . . . . . . . . . 44.63, 162–8, 47.202, 207–11 Procedural Order No 5 (2 February 2007) . . . . . . . . . . . . . . . . . . . . . . . 44.63, 168, 181–2, 250 Procedural Order No 6 (25 April 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Award (w/ Conc & Diss Op Born) (24 July 2008) . . . . . . . . . . . 25.271, 806, 987, 26.165–6, 41.86, 44.59, 150, 182, 48.116, 61.33 Concurring and Dissenting Opinion Born (18 July 2008) . . . . . . . . . . . . . . . . . . . . . . . 48.116

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Blue Bank v Venezuela Blue Bank International & Trust (Barbados) Ltd v Bolivarian Republic of Venezuela (Case No ARB/12/20) Instrument invoked: Barbados–Venezuela BIT (1994) Decision on Disqualification (12 November 2013) . . . . . . . . 14.9, 10, 13, 52.137, 57.39–41, 47, 48, 51, 55, 56, 58.7, 20, Final Clause.7 Award (w/ Sep Op Söderlund) (26 April 2017) 25.313–14, 317, 362, 882, 52.69, 72.12, 14, 15, 20 Decision on Disqualification (2 March 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.683, 58.3 Decision on Annulment (22 June 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 704 Blusun v Italy Blusun SA, Jean-Pierre Lecorcier and Michael Stein v Italian Republic (Case No ARB/14/3) Instrument invoked: ECT (1994) Award (27 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.180, 465, 468, 476, 42.83 Decision on Annulment (13 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.52 Booker v Guyana Booker Plc v Co-operative Republic of Guyana (Case No ARB/01/9) Instrument invoked: Guyana–United Kingdom BIT (1989) Order on Discontinuance (11 October 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 Border Timbers v Zimbabwe Border Timbers Ltd, Timber Products International (Private) Ltd, and Hangani Development Co (Private) Ltd v Republic of Zimbabwe (Case No ARB/10/25) Instrument invoked: Switzerland–Zimbabwe BIT (1996) Procedural Order No 2 (26 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.183–4 Procedural Order No 5 (3 April 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.84 Award (28 July 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.209 Decision on Provisional Measures (17 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5 Decision on Stay of Enforcement (24 April 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.720, 740 Decision on Annulment (21 November 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 704 1124 Bosh v Ukraine Bosh International, Inc and B&P, LTD Foreign Investments Enterprise v Ukraine (Case No ARB/08/11) Instrument invoked: Ukraine–United States BIT (1994) Award (25 October 2012) . . . . . . . . . . . . . . . . . . . . . . . . . 42.107, 208, 248, 264, 316, 61.57, 73 BP America v Argentina (! Pan American v Argentina) Brandes v Venezuela Brandes Investment Partners, LP v Bolivarian Republic of Venezuela (Case No ARB/08/3) Instrument invoked: Investment Law (Venezuela 1999) Decision under Rule 41(5) (2 February 2009) . . . . . . . . . . . . . . 41.135–6, 138, 142, 144, 148 Award (2 August 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.812, 1041, 42.6 Bridgestone v Panama Bridgestone Licensing Services, Inc and Bridgestone Americas, Inc v Republic of Panama (Case No ARB/16/34) Instrument invoked: Panama–United States Trade Promotion Agreement (2007) Procedural Order No 1 (11 July 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.23 Decision on Expedited Objections (13 December 2017) . . . . . . . . . . . . . . . . . 25.127, 131, 283

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Ruling on Application to Remove an Expert (13 December 2018) . . . . . . . . . . . . . . . . . . 44.79 Procedural Order No 7 (15 January 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.19 Award (14 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.131, 347, 26.340 BSG Resources v Guinea I BSG Resources Ltd (in administration), BSG Resources (Guinea) Ltd and BSG Resources (Guinea) SÀRL v Republic of Guinea (Case No ARB/14/22) Instruments invoked: Contract; Investment Laws (Guinea 1987 and 1995) Procedural Order No 1 (13 May 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.60 Procedural Order No 2 (17 September 2015) . . . . . . . . . . . . . . . . . . 44.19, 22, 23, 141, 48.152 Procedural Order No 3 (25 November 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.90 Procedural Order No 5 (14 February 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.47 Decision on Disqualification (28 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . 52.143, 58.23 BSG Resources v Guinea II BSG Resources (Guinea) Limited and BSG Resources (Guinea) SÀRL v Republic of Guinea (Case No ARB/15/46) Instruments invoked: Contract; Investment Laws (Guinea 1987 and 1995) Procedural Order No 1 (14 February 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.47 Burimi v Albania Burimi SRL and Eagle Games SHA v Republic of Albania (Case No ARB/11/18) Instruments invoked: Albania–Italy BIT (1991); Investment Law (Albania 1993) Procedural Order No 2 (3 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.89, 139, 61.106 Award (29 May 2013) . . . . . . . . . . . . . . 25.130, 300, 1321, 1329, 1346, 1347, 1356–7, 1379, 41.153, 157, 165, 43.124, 61.46, 57 Burlington v Ecuador Burlington Resources, Inc v Republic of Ecuador (Case No ARB/08/5) Instruments invoked: Contract; Ecuador–United States BIT (1993) Procedural Order No 1 (29 June 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.89, 110, 179, 203 Decision on Jurisdiction (2 June 2010) . . . . . . . . . . . . . . . . . . . . . . 25.70, 73, 548, 988, 41.104 Decision on Liability (w/ Diss Op Orrego Vicuña) (14 December 2012) . . . . . . . . . . 42.142, 247, 318 Decision on Disqualification (13 December 2013) . . . . . . . . . 14.9, 13, 57.26, 38, 41, 47, 48, 50, 51, 93, 58.13, 20 Decision on Counterclaims (7 February 2017) . . . . . . . . 42.209, 248, 318, 43.169, 46.7, 91 Decision on Reconsideration and Award (7 February 2017) . . . . . . . . 41.43, 42.245, 44.88, 48.28, 86, 51.2, 6, 53.24, 82, 54.31 Decision on Stay of Enforcement (31 August 2017) . . . . . . . . . . . . . . . . . . . 52.731, 732, 54.44 Cable TV v St Kitts and Nevis Cable Television of Nevis, Ltd and Cable Television of Nevis Holdings, Ltd v Federation of St Kitts and Nevis (Case No ARB/95/2) Instrument invoked: Contract Award (13 January 1997) . . . . . . . 25.89, 507, 524, 531, 532, 542, 543, 545, 547, 548, 552, 624, 637, 653, 766, 886, 895, 1047, 1267, 1277, 1282, 1292, 1341, 1391, 1448, 1454, 1464, 26.280, 36.40, 37.58, 41.68, 127, 42.191, 201, 44.55, 48.24, 49.22, 52.69, 61.15, 29, 96 Cambodia Power v Cambodia Cambodia Power Company v Kingdom of Cambodia (Case No ARB/09/18) Instrument invoked: Contract

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schreuer’s commentary on the icsid convention Decision on Jurisdiction (22 March 2011) . . . . . . . . . 25.137, 509, 523, 524, 541, 546, 547, 550, 551, 552, 555, 558, 559, 560, 562, 770, 954, 1010, 1453, 26.212, 36.23, 38, 44, 74, 41.23, 58, 42.167, 44.20, 77–8, 46.44 Ruling (19 April 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.44 Decision on Application to Exclude Witness Statement and Derivative Evidence (14 February 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.13

Camuzzi v Argentina I Camuzzi International SA v Argentine Republic (Case No ARB/03/2) Instrument invoked: Argentina–BLEU BIT (1990) Decision on Jurisdiction (11 May 2005) . . . . . . . . . . 25.72, 89, 98, 161, 285, 289, 334, 344, 347, 610, 851, 1193, 1262, 1365, 1366–7, 1403, 26.80, 129, 205, 321, 27.13, 37.46, 38.5, 26, 41.123, 42.14, 236, 245 Camuzzi v Argentina II Camuzzi International SA v Argentine Republic (Case No ARB/03/7) Instruments invoked: Argentina–BLEU BIT (1990); Argentina–United States BIT (1991) Decision on Jurisdiction (10 June 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.336, 344, 355 Canepa Green Energy v Spain Canepa Green Energy Opportunities I, Sárl and Canepa Green Energy Opportunities II, Sárl v Kingdom of Spain (Case No ARB/19/4) Instrument invoked: ECT (1994) Decision on Disqualification (10 February 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10 Decision on Bifurcation (28 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.161, 164, 165 Capital Financial Holdings v Cameroon Capital Financial Holdings Luxembourg SA v Republic of Cameroon (Case No ARB/15/18) Instrument invoked: BLEU–Cameroon BIT (1980) Award (w/ Diss Op Mourre) (22 June 2017) . . . . . . . 25.186, 239, 244, 245, 254, 269, 277, 308, 362, 375, 405, 414, 468 Decision on Annulment (25 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.66, 52.48, 176 Caratube and Hourani v Kazakhstan Caratube International Oil Company LLP and Devincci Salah Hourani v Republic of Kazakhstan (Case No ARB/13/13) Instruments invoked: Contract; Kazakhstan–United States BIT (1992); Investment Law (Kazakhstan 1994) Decision on Disqualification (20 March 2014) . . . . . . . . . . . . 14.13, 57.41n63, 51, 52, 70–1, 58.20, Final Clause.7 Decision on Provisional Measures (4 December 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.75 Award (w/ Diss Op Salès) (27 September 2017) . . . . . . 25.192, 193, 221, 296, 372–3, 405, 688–90, 692, 700, 947, 954, 1084, 1267, 1317, 1401, 1409, 41.155, 42.171, 245, 301 Concurring and Dissenting Opinion Salès (15 September 2017) . . . . . . . . . . . . . . . . . 48.116 Decision on Stay of Enforcement (12 December 2019) . . . . . . . . . . . . . . . . . . 52.738, 739, 757 Caratube v Kazakhstan Caratube International Oil Company LLP v Republic of Kazakhstan (Case No ARB/08/12) Instrument invoked: Kazakhstan–United States BIT (1992) Decision on Provisional Measures (31 July 2009) . . . . . . . 32.27, 88, 43.88, 47.17, 27, 177, 178, 261 Award (5 June 2012) . . . . . . . 22.12, 25.276, 362, 375, 405, 1330, 1345, 1347, 1381, 1400, 42.63, 67, 43.60, 47.178, 52.69, 53.21, 61.48, 57, 62

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Decision on Annulment (21 February 2014) . . . . . . . . . 25.1345, 1400, 48.86, 52.28, 37, 48, 139, 143, 238, 262, 275, 361, 369, 370, 372–3, 443, 471, 61.40 Caravelí v Peru Caravelí Cotaruse Transmisora de Energía SAC v Republic of Peru (Case No ARB/11/9) Instrument invoked: Contract Award (15 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.9, 61.14 Carlyle v Morocco The Carlyle Group LP and others v Kingdom of Morocco (Case No ARB/18/29) Instrument invoked: Morocco–United States FTA (2004) Decision on Bifurcation (20 January 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.162 Carnegie Minerals v The Gambia Carnegie Minerals (Gambia) Ltd v Republic of the Gambia (Case No ARB/09/19) Instrument invoked: Contract Decision on Representation (7 October 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1433 Decision on Stay of Enforcement (18 October 2018) . . . . . . . . . . 52.730, 732, 738, 787, 789 Decision on Annulment (7 July 2020) . . . . . . . . . . . . . . . . . . . . . . 14.14, 37.8, 52.126–7, 57.27 Casinos Austria v Argentina Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft v Argentine Republic (Case No ARB/14/32) Instrument invoked: Argentina–Austria BIT (1992) Decision on Jurisdiction (w/ Diss Op Torres Bernárdez) (29 June 2018) . . . . . . . . 25.56, 59, 63, 122, 233, 239, 245, 248, 260, 289, 335, 336, 359–60, 987, 993, 995, 998, 26.24–6, 100, 129, 265–6, 326, 41.106, 114–15, 123, 157, 161, 167, 43.160, 48.86, 115, 52.373 Cavalum v Spain Cavalum SGPS, SA v Kingdom of Spain (Case No ARB/15/34) Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Directions on Quantum (31 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.2 CDC v Seychelles CDC Group Plc v Republic of Seychelles (Case No ARB/02/14) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 Award (17 December 2003) . . . . . . . . . . . . . . . . . . . . . . 25.300, 580, 954, 1203, 41.68, 72, 124 Decision on Stay of Enforcement (14 July 2004) (2007) 11 ICSID Reports 225 52.722, 730 1133, 732 1139, 737, 738, 740, 741, 748, 755, 772 Decision on Annulment (29 June 2005) 42.42, 43.31, 44.27, 48.59, 49.14, 19, 22, 52.12, 14, 20, 32, 44, 45, 66, 111, 122, 152, 157–8, 183, 251, 252, 334, 338–9, 346, 347, 357, 399, 407, 419, 466, 473–4, 496, 527, 539, 574, 595, 605, 642, 650, 698, 57.22, 61.37, 41, 46 CEAC v Montenegro CEAC Holdings Ltd v Montenegro (Case No ARB/14/8) Instrument invoked: Cyprus–Montenegro BIT (2005) Award (26 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1128, 1208, 41.138, 160 Decision on Annulment (1 May 2018) . . . . . . . . . . . . . . . 52.19, 48, 122, 359, Final Clause.3 Cemex v Indonesia Cemex Asia Holdings Ltd v Republic of Indonesia (Case No ARB/04/3) Instruments invoked: Contract; ASEAN Investment Agreement (1987) Award (23 February 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107

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CEMEX v Venezuela CEMEX Caracas Investments BV and CEMEX Caracas II Investments BV v Bolivarian Republic of Venezuela (Case No ARB/08/15) Instruments invoked: Netherlands–Venezuela BIT (1991); Investment Law (Venezuela 1999) Decision on Disqualification (6 November 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.24 Decision on Provisional Measures (3 March 2010) . . . . . . . . . . . . . . . . . . . . . 47.89, 110, 48.43 Decision on Jurisdiction (30 December 2010) . . . . . . . . . . 25.334, 335, 337, 810, 812, 1041, 1051, 1053, 41.11, 42.6, 7 Cervin v Costa Rica Cervin Investissements SA and Rhone Investissements SA v Republic of Costa Rica (Case No ARB/13/2) Instrument invoked: Costa Rica–Switzerland BIT (2000) Decision on Jurisdiction (w/ Part Diss Op Ramírez Hernández) (15 December 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.12, 16, 72.8 Award (w/ Part Diss Op Ramírez Hernández) (7 March 2017) . . . . . . . . . . . . . . 41.122, 46.76 Champion Trading v Egypt Champion Trading Company, Ameritrade International, Inc, James T Wahba, John B Wahba, Timothy T Wahba v Arab Republic of Egypt (Case No ARB/02/9) Instrument invoked: Egypt–United States BIT (1982) Decision on Jurisdiction (21 October 2003) . . . . . . . . . . . 25.389, 1116, 1118, 1122, 1151–3, 1155, 1158, 1229, 26.67, 78, 38.5, 42.16 Award (27 October 2006) . . . . . . . . . . . . . . . . . . . 41.122, 43.60, 109, 44.100, 61.55, 63.11, 26 Chevron v Bangladesh Chevron Bangladesh Block Twelve, Ltd and Chevron Bangladesh Blocks Thirteen and Fourteen, Ltd v People’s Republic of Bangladesh (Case No ARB/06/10) Instrument invoked: Contract Award (17 May 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.239, 254, 260, 38.25 Churchill and Planet Mining v Indonesia Churchill Mining Plc and Planet Mining Pty Ltd v Republic of Indonesia (Case Nos ARB/12/40 and ARB/12/14) Instruments invoked: Indonesia–United Kingdom BIT (1976); Australia–Indonesia BIT (1992) Procedural Order No 5 (19 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.10, 14, 19, 105 Procedural Order No 8 (22 April 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.76 Procedural Order No 12 (27 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.154 Procedural Order No 13 (18 November 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.76 Procedural Order No 14 (22 December 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47.178, 183 Procedural Order No 15 (12 January 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.76 Award (6 December 2016) . . . . . . 25.476, 826, 26.208, 41.122, 42.83, 85, 249, 318, 43.87, 111, 121 Decision on Stay of Enforcement (27 June 2017) . . . . . . . . . . 52.726, 730, 738, 788, 53.24, 54.145 Decision on Annulment (18 March 2019) . . . . . . . 42.248, 46.38, 52.48, 359, 521, 522, 574 Churchill Mining v Indonesia (see also ! Churchill and Planet Mining v Indonesia) Churchill Mining Plc v Republic of Indonesia (Case No ARB/12/14) Instrument invoked: Indonesia–United Kingdom BIT (1976) Procedural Order No 1 (6 December 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.35 Procedural Order No 2 (Request for Joinder) (5 February 2013) . . . . . 25.533, 567, 1448, 46.66

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Procedural Order No 3 (Provisional Measures) (4 March 2013) . . . . . . . . . . . . 47.90, 237 Decision on Jurisdiction (24 February 2014) . . . . . . . . . . . . . . 25.463, 831, 836, 1054, 43.158 CIT Group v Argentina CIT Group Inc v Argentine Republic (Case No ARB/04/9) Instrument invoked: Argentina–United States BIT (1991) Order on Discontinuance (12 May 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.25 City Oriente v Ecuador City Oriente Ltd v Republic of Ecuador and Empresa Estatal Petrόleos del Ecuador (Petroecuador) (Case No ARB/06/21) Instrument invoked: Contract Decision on Provisional Measures (19 November 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.548 Decision on Revocation of Provisional Measures (13 May 2008) . . . . . . . . . . . . . . . 47.80, 90 City-State v Ukraine City-State NV, Praktyka Asset Management Company LLC, Crystal-Invest LLC and Prodiz LLC v Ukraine (Case No ARB/14/9) Instrument invoked: Netherlands–Ukraine BIT (1994) Award (w/ Diss Op Stern) (26 July 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.153, 49.33 CMC v Mozambique CMC Muratori Cementisti CMC Di Ravenna SOC Coop, CMC MuratoriCementisti CMC Di Ravenna SOC Coop ARL Maputo Branch and CMC Africa, and CMC Africa Austral, LDA v Republic of Mozambique (Case No ARB/17/23) Instrument invoked: Italy–Mozambique BIT (1998) Award (24 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . 25.187, 239, 947, 1019, 42.236, 53.16 CMS v Argentina CMS Gas Transmission Company v Argentine Republic (Case No ARB/01/8) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (17 July 2003) . . . . . . . . . . . 25.24, 26, 81, 91, 98, 122, 124, 157–8, 347, 678, 857, 985, 987, 1118, 1190, 1193, 1300, 26.67, 76, 79, 114, 27.6, 36.77, 37.32, 41.96, 123, 42.4, 13, 19, 245, 266, 44.35, 46.81–2 Award (12 May 2005) . . . . . . . . 36.28, 41.122, 42.155, 182, 190, 245, 266, 314–15, 43.60, 75, 137, 139, 48.106, 49.22, 52.451–2, 53.22, 54.105, 140, 55.83, 129 Decision on Stay of Enforcement (1 September 2006) . . . . . . . . 52.721, 722, 726, 731, 732, 738, 741, 742, 750–3, 778, 796, 54.105 Decision on Annulment (25 September 2007) . . . . . . . . . 25.24, 180, 287–9, 347, 42.13, 19, 245, 48.82, 52.14, 17, 35, 40, 50, 111, 122, 213–17, 259, 268, 451–3, 480–2, 574, 611–12, 628, 657, 698, 792, 796, 833, 61.37 Colt Industries v Korea Colt Industries Operating Corporation v Republic of Korea (Case No ARB/84/2) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.60 Commerce Group v El Salvador Commerce Group Corporation and San Sebastian Gold Mines, Inc v Republic of El Salvador (Case No ARB/09/17) Instruments invoked: Investment Law (El Salvador 1999); DR–CAFTA (2004) Award (14 March 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.998, 26.96 Decision on Security for Costs (20 September 2012) . . . . . . . . . . . . . . . . 47.5, 52.686, 61.106 Order on Discontinuance (28 August 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . 45.66, 52.48, 61.89

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Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabonese Republic (Case No ARB/04/5) Instrument invoked: Contract Decision on Jurisdiction (19 December 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.84, 239, 324 Award (7 March 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.12 Decision on Annulment (11 May 2010) . . . . . . . . . . . . . . . . . . . . . 14.14, 15, 25.1330, 37.8, 28 Compagnie Française v Côte d’Ivoire Compagnie Française pour le Développement des Fibres Textiles v Côte d’Ivoire (Case No ARB/97/8) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.14 Compañía de Aguas del Aconquija (! Vivendi v Argentina) ConocoPhillips v Venezuela ConocoPhillips Petrozuata BV, ConocoPhillips Hamaca BV and ConocoPhillips Gulf of Paria BV v Bolivarian Republic of Venezuela (Case No ARB/07/30) Instruments invoked: Netherlands–Venezuela BIT (1991); Investment Law (Venezuela 1999) Decision on Disqualification (27 February 2012) . . . . . . . . . . . . . . . . 57.61–2, Final Clause.7 Decision on Jurisdiction and Merits (w/ Diss Op Abi-Saab) (3 September 2013) . . . . . 25.812, 851, 1041, 1055, 1229, 1255, 27.3, 42.6, 48.23 Decision on Reconsideration (w/ Diss Op Abi-Saab) (10 March 2014) . . . . . . . 41.42, 44.81–6, 53.40 Decision Disqualification (5 May 2014) . . . . . . . . 14.13, 40.24, 57.41, 51, 61, 89, 58.7, 14–15 Decision Disqualification (1 July 2015) . . . . . . . . . . . . . . . . . . . 14.13, 56.48, 57.26, 41, 47, 61 Decision on Disqualification (15 December 2015) . . . . . . . . . . . . . . . . . . . . . . . . 14.9, 10, 57.61 Decision on Reconsideration (w/ Diss Op Bucher) (9 February 2016) . . . . . . . 41.42, 44.85, 49.23, 28, 30 Decision on Disqualification (15 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.61 Decision on Disqualification (26 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . 14.13, 57.38, 61, 63 Interim Decision (17 January 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.42, 56.19, 29 Award (8 March 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42.320, 43.156 Decision on Rectification (29 August 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.48 Order on Representation (3 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.110 Recommendation on Disqualification (10 July 2020) . . . . . . . . . . . . . . . . . . . 44.110–11, 57.89 Decision on Disqualification (23 July 2020) . . . . . . . . . . . . . . . . . . . . . . . 44.111, 52.683, 58.18 Decision on Stay of Enforcement (2 November 2020) . . . . . . . . . . . . . 52.741, 54.29, 46, 153 Continental Casualty v Argentina Continental Casualty Company v Argentine Republic (Case No ARB/03/9) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (22 February 2006) . . . . . . . . . . 25.72, 76, 123, 127, 152, 160, 284, 347, 972, 985, 26.80, 37.58, 41.106, 56.27, 62.16 Award (5 September 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.98, 299, 46.42, 62–3 Decision on Rectification (23 February 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.51 Decision on Preliminary Objection to Application for Annulment (23 October 2009) . . . 49.99 Decision on Stay of Enforcement (23 October 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.727 Decision on Annulment (16 September 2011) . . 48.49, 69–70, 52.48, 111, 483, 521, 61.41 Convial Callao v Peru Convial Callao SA and CCI – Compañía de Concesiones de Infraestructura SA v Republic of Peru (Case No ARB/10/2)

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Instrument invoked: Argentina–Peru BIT (1994) Award (21 May 2013) . . . . . . . . . . . . . . . . . . . . . . . . 25.239, 260, 291, 454, 457, 458, 463, 474 Cortec Mining v Kenya Cortec Mining Kenya Ltd, Cortec (Pty) Ltd and Stirling Capital Ltd v Republic of Kenya (Case No ARB/15/29) Instrument invoked: Kenya–United Kingdom BIT (1999) Award (22 October 2018) . . . . . . . 25.79, 143, 185, 239, 254, 260, 413, 451, 458, 459, 474, 985, 52.69 CSOB v Slovakia Ceskoslovenska obchodni banka, as v Slovak Republic (Case No ARB/97/4) Instrument invoked: Czech Republic–Slovak Republic BIT (1992) Procedural Order No 2 (9 September 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.56, 151–2 Procedural Order No 3 (5 November 1998) . . . . . . . . . . . . . . . 25.56, 152, 195, 47.195, 48.43 Procedural Order No 4 (11 January 1999) . . . . . . . . . . . . . . . . . . . . . . . . 26.240, 47.40, 56, 152 Decision on Jurisdiction (24 May 1999) . . . . . . Preamble.14, 25.51, 100, 122, 138–9, 181, 191–2, 200, 258, 300, 309, 420, 433, 579, 676, 735–7, 754, 771, 777, 827, 851, 897, 1005, 1038–9, 1047, 1087, 1250, 1489, 26.28, 231, 37.7, 41.53, 123, 42.11, 74, 114, 245, 47.66, 152, 62.16 Procedural Order No 5 (1 March 2000) . . . . . . . . . . . . . . . . . . . . 47.40, 56, 66, 154, 222, 48.43 Decision on Further and Partial Objection to Jurisdiction (1 December 2000) . . . . . . 25.139, 1006, 41.41, 53, 58, 47.66 Award (29 December 2004) . . . . . . . . . . . . . 36.57, 41.53, 122, 42.66, 147, 43.156, 61.19, 52 Cube Infrastructure v Spain Cube Infrastructure Fund SICAV and others v Kingdom of Spain (Case No ARB/15/20) Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Partial Decision on Quantum (w/ Sep & Part Diss Op Tomuschat) (19 February 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.140 Award (15 July 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.32, 43, 46, 96 Daimler v Argentina Daimler Financial Services AG v Argentine Republic (Case No ARB/05/1) Instrument invoked: Argentina–Germany BIT (1991) Award (w/ Diss Op Brower and Sep Op Bello Janeiro) (22 August 2012) . . . . . . . . 25.60, 89, 152, 161, 300, 344, 347, 678, 679, 718, 743, 989, 993, 1031, 1056, 26.146, 325, 41.102, 42.14, 256, 61.32 Decision on Annulment (7 January 2015) . . . . . . . 42.318, 48.7, 19, 61, 52.14, 48, 158, 183, 371, 397, 415, 488–9, 500, 530, 542, Final Clause.6 Dan Cake v Hungary Dan Cake (Portugal) SA v Republic of Hungary (Case No ARB/12/9) Instrument invoked: Hungary–Portugal BIT (1992) Decision on Jurisdiction and Liability (24 August 2015) . . . . . . 25.348, 41.68, 73, 48.29 24 Decision on Stay of Enforcement (Revision Proceeding) (25 December 2018) . . . . . . 41.52, 51.41, 47, 49, 52.64, 732, 733, 56.27 Decision on Revision (w/ Sep Op Mayer) (25 February 2020) . . . . . . . . . . . . . . . . 41.34, 51.8 Procedural Order No 2 (Annulment Proceeding) (12 May 2020) . . . . . . . . . . . . . . . . 51.16, 38 Dede v Romania Ömer Dede and Serdar Elhüseyni v Romania (Case No ARB/10/22) Instrument invoked: Romania–Turkey BIT (1991) Award (5 September 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.995, 1015, 61.29, 30

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Desert Line v Yemen Desert Line Projects LLC v Republic of Yemen (Case No ARB/05/17) Instrument invoked: Oman–Yemen BIT (1998) Award (6 February 2008) 25.457, 458, 459, 464, 489, 548, 549, 674, 26.85, 41.49, 56, 58, 43.158, 46.49, 53, 61.52, 60, 127 Deutsche Bank v Sri Lanka Deutsche Bank AG v Democratic Socialist Republic of Sri Lanka (Case No ARB/09/2) Instrument invoked: Germany–Sri Lanka BIT (2000) Award (w/ Diss Op Khan) (31 October 2012) . . . . . . 25.239, 240, 244, 249, 250, 254, 269, 298, 300, 427, 36.51, 41.157, 43.79, 61.56 Dissenting Opinion Khan (23 October 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.427 Dogan v Turkmenistan Adem Dogan v Turkmenistan (Case No ARB/09/9) Instrument invoked: Germany–Turkmenistan BIT (1997) Decision on Annulment (15 January 2016) . . . . 25.1116, 52.14, 160, 189, 409, 536, 61.40 DSG v Saudi Arabia DSG Yapi Sanayi Ticaret Anonim Sirketi v Kingdom of Saudi Arabia (Case No ARB/19/32) Instrument invoked: Saudi Arabia–Turkey 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.28 Duke Energy v Ecuador Duke Energy Electroquil Partners & Electroquil SA v Republic of Ecuador (Case No ARB/ 04/19) Instruments invoked: Contract; Ecuador–United States BIT (1993) . . . . . . . . . . . . . . . . . 25.1047 Award (18 August 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.285, 770, 53.24, 61.29 Duke Energy v Peru Duke Energy International Peru Investments No 1 Ltd v Republic of Peru (Case No ARB/ 03/28) Instrument invoked: Contract Decision on Jurisdiction (1 February 2006) . . . . . . . . 25.141, 611, 770, 955, 1004, 1007–9, 26.20–2, 41.52, 106, 42.166, 183, 43.110, 46.38, 47.15, 16, 173, 62.16 Award (w/ Part Diss Op Tawil and Part Diss Op Nikken) (18 August 2008) . . . . . . . 61.15, 33 Decision on Annulment (1 March 2011) . . . . . . . . . 42.11, 48.49, 52.12, 238, 484, 500, 521, 528, 783, 62.16 East Kalimantan v PT Kaltim Prima Coal Government of the Province of East Kalimantan v PT Kaltim Prima Coal and others (Case No ARB/07/3) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.9 Award (28 December 2009) . . . . . . . . . 25.497, 523, 531, 544, 552, 553, 554, 555, 556, 561, 566, 616, 639, 1461, 44.68, 46.64–5 Eco Oro Minerals v Colombia Eco Oro Minerals Corporation v Republic of Colombia (Case No ARB/16/41) Instrument invoked: Canada–Colombia FTA (2008) Decision on Bifurcation (28 June 2018) . . . . . . . . . . . . . . . . . . . . . . . . . 41.154, 161, 163, 46.29 Edenred v Hungary Edenred SA v Republic of Hungary (Case No ARB/13/21) Instrument invoked: France–Hungary BIT (1986) Award (13 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.23, 51.8, 38

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Decision on Revision (7 February 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.34 Decision on Annulment (9 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 704 EDF v Argentina EDF International SA, SAUR International SA and León Participaciones Argentinas SA v Argentine Republic (Case No ARB/03/23) Instruments invoked: Argentina–BLEU BIT (1990); Argentina–France BIT (1991) Decision on Disqualification (25 June 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.9, 38 Award (11 June 2012) . . . . . . . . . . . . . 25.721–2, 26.247, 337, 42.123, 248, 46.28, 61.33, 43 Decision on Annulment (5 February 2016) . . . . . . . 12.5, 14.10, 14, 25.721–2, 37.8, 48.45, 49, 55, 83, 49.86, 52.12n17, 46, 129, 133–7, 139, 189, 361, 362, 57.8, 9, 27–8, Final Clause.3 EDF v Romania EDF (Services) Ltd v Romania (Case No ARB/05/13) Instrument invoked: Romania–United Kingdom BIT (1995) Procedural Order No 3 (29 August 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.23 Award (w/ Part Diss Op Rovine) (8 October 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.56 Eiser v Spain Eiser Infrastructure Ltd and Energía Solar Luxembourg Sàrl v Kingdom of Spain (Case No ARB/13/36) Instrument invoked: ECT (1994) Award (4 May 2017) . . . . . . . . 25.405, 987, 41.124, 157, 161, 42.190, 44.35, 96, 61.32, 96 Decision on Annulment (11 June 2020) . . . . . . . . . 14.14, 16, 37.8, 48.50, 51.17, 23, 52.19, 45, 66, 111, 130, 132, 137–40, 146–7, 346, 361–2, 422, 574, 662, 57.12, 44, 75 El Jaouni v Lebanon Abed El Jaouni and Imperial Holding SAL v Lebanese Republic (Case No ARB/15/3) Instrument invoked: Germany–Lebanon BIT Decision on Jurisdiction, Liability and Certain Aspects of Quantum (25 June 2018) . . . . 37.38 El Paso v Argentina El Paso Energy International Company v Argentine Republic (Case No ARB/03/15) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (27 April 2006) . . . . . . . . . . 25.53, 70, 89, 127, 161, 289, 401, 718, 733, 851, 857, 897, 985, 1250, 26.146, 41.106, 42.245, 252, 43.158, 53.21, 62.20, 18 Award (31 October 2011) . . . . . . . . . . 25.185, 289, 344, 353–5, 1335, 1347, 1393, 41.58, 42.316, 43.79, 61.33 Decision on Annulment (22 September 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.155, 261, 484 Electrabel v Hungary Electrabel SA v Republic of Hungary (Case No ARB/07/19) Instrument invoked: ECT (1994) Decision on Disqualification (25 February 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.49, 78 Procedural Order No 4 (28 April 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.185 Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) . . . . . . 25.141, 239, 240, 269, 477, 1020, 41.42, 42.238, 241, 43.14, 53.16, 54.152 Award (25 November 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.733 Elektrogospodarstvo Slovenije v Bosnia and Herzegovina Elektrogospodarstvo Slovenije – razvoj in inzeniring d.o.o. v Bosnia and Herzegovina (Case No ARB/14/13)

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Instruments invoked: ECT (1994); Bosnia and Herzegovina–Slovenia BIT (2001) . . . . . . . 41.138 Elitech and Razvoj v Croatia Elitech BV and Razvoj Golf DOO v Republic of Croatia (Case No ARB/17/32) Instrument invoked: Croatia–Netherlands (1998) Decision on Disqualification (23 March 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.78 Elsamex v Honduras Elsamex, SA v Republic of Honduras (Case No ARB/09/4) Instrument invoked: Contract Award (16 November 2012) . . . . . . . . 25.139, 192, 200, 239, 277, 297, 298, 37.26, 42.248 Decision on Preliminary Objections on Annulment (7 January 2014) . . . . . . . . . .41.135, 138 Decision on Stay of Enforcement (11 March 2014) . . . . . . . . . . . . . . . . . . . . . . . . . .54.151, 152 Emmis v Hungary Emmis International Holding, BV, Emmis Radio Operating, BV, and MEM Magyar Electronic Media Kereskedelmi és Szolgáltató Kft v Republic of Hungary (Case No ARB/12/2) Instruments invoked: Hungary–Netherlands BIT (1987); Hungary–Switzerland BIT (1988) Decision under Rule 41(5) (11 March 2013) . . . . . . . . . . . . . . 26.211, 41.136, 147, 149, 150, 156, 42.152, 52.143 Decision on Bifurcation (13 June 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.157, 161, 162, 167 Award (16 April 2014) . . . . . . . . . . . . . . . 25.851, 979, 41.111, 42.30, 245, 43.130, 61.29, 30 Enron v Argentina Enron Corporation and Ponderosa Assets, LP v Argentine Republic (Case No ARB/01/3) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (14 January 2004) . . . . . . . . 25.26, 68, 75, 98, 123, 289, 291, 334, 347, 988, 26.67, 80, 120, 41.96, 106, 123, 42.14, 46.36, 53.21, 54.94 Decision on Jurisdiction (Ancillary Claim) (2 August 2004) . . . . . . . . . . . . 25.123, 289, 336, 347, 1193, 26.129, 41.170, 42.236, 252, 46.36 Award (22 May 2007) . . . . . . . . . . 25.53, 734, 897, 1250, 41.52, 85, 122, 42.115, 155, 190, 245, 248, 266, 316, 43.119, 137, 46.36, 47.15, 17, 48.104, 56.47, 61.33 Decision on Rectification (25 October 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.75 Decision on Stay of Enforcement (7 October 2008) . . . . . . . . 27.48, 52.574, 717, 722, 730, 732, 751, 763, 789, 53.40, 44, 738, 54.30, 98 Decision on Annulment (30 July 2010) . . . . . . . . 25.334, 52.14, 15, 36, 50, 72–3, 111, 122, 155, 233, 359, 412–13, 448, 455, 550, 574, 634, 61.41 Resubmitted Case: Order on Discontinuance (19 July 2018) . . . . . . . . . . . . . . . . . . . . . . 52.803 Eskosol v Italy Eskosol SpA in liquidazione v Italian Republic (Case No ARB/15/50) Instrument invoked: ECT (1994) Decision under Rule 41(5) (20 March 2017) . . . . . . . . . . . . . . 25.747, 1431–4, 41.138, 42.27 Procedural Order No 3 (12 April 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.15 Decision on Termination Request and Intra-EU Objection (7 May 2019) . . . . . . . . . 25.1020, 42.238, 53.16, 54.121, 122 Award (4 September 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1432–4 ESPF v Italy ESPF Nr 2 Austria Beteiligungs GmbH, InfraClass Energie 5 GmbH, ESPF Beteiligungs GmbH v Italian Republic (Case No ARB/16/5) Instrument invoked: ECT (1994) Award (14 September 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1089, 42.126

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EuroGas and Belmont v Slovakia EuroGas Inc and Belmont Resources Inc v Slovak Republic (Case No ARB/14/14) Instruments invoked: Slovak Republic–United States BIT (1991); Canada–Slovak Republic BIT (2010) Decision on Provisional Measures (23 June 2015) . . . . . . . . . . . . . . . . . . . . 47.139, 141, 61.108 Procedural Order No 5 (11 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.71 Award (w/ Diss Op Gaillard) (18 August 2017) . . . . . . . . . . . . . . 25.70, 450, 720, 932, 57.101, 61.103 Order on Discontinuance (31 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48, 699 ETI v Bolivia ETI Euro Telecom International NV v Plurinational State of Bolivia (Case No ARB/07/28) Instrument invoked: Bolivia–Netherlands BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.17 EVN v North Macedonia EVN AG v Macedonia, former Yugoslav Republic of (Case No ARB/09/10) Instruments invoked: ECT (1994); Austria–Macedonia BIT (2001) Award (2 September 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107 Eyre and Montrose v Sri Lanka Raymond Charles Eyre and Montrose Developments (Private) Ltd v Democratic Socialist Republic of Sri Lanka (Case No ARB/16/25) Instrument invoked: Sri Lanka–United Kingdom BIT (1980) Procedural Order No 1 (1 June 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.14 Award (5 March 2020) . . . . . . . . . . . . . 25.151, 239, 255, 285, 393, 1267, 1271, 1276, 1301, 1321, 1325, 1330, 1335, 1344, 1347, 1380, 39325.1267 Decision on Annulment (2 December 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 704 Fábrica de Vidrios v Venezuela Fábrica de Vidrios Los Andes, CA and Owens-Illinois de Venezuela, CA v Bolivarian Republic of Venezuela (Case No ARB/12/21) Instrument invoked: Netherlands–Venezuela BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.210 Decision on Disqualification (16 June 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.20 Decision on Disqualification (28 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.38, 66 Award (13 November 2017) . . . . . . . . . . 13.3, 25.1074, 26.196–8, 41.58, 71.8, 72.21–4, 28 Decision on Annulment (22 November 2019) . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 48, 181, 704 Fedax v Venezuela Fedax NV v Republic of Venezuela (Case No ARB/96/3) Instrument invoked: Netherlands–Venezuela BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . 25.121–2 Decision on Jurisdiction (11 July 1997) . . . . . . . . . 25.89, 116, 181, 182, 234, 235, 240, 248, 249, 254, 260, 292, 299, 419, 424, 433, 704, 851, 1042, 1488, 36.38, 37.7, 58, 41.52, 68, 123 Award (9 March 1998) . . . . . . . . . . . . . . 41.122, 42.118, 248, 44.98, 48.95, 61.30, 96, 62.16 Flughafen Zürich v Venezuela Flughafen Zürich AG and Gestión e Ingeniería IDC SA v Bolivarian Republic of Venezuela (Case No ARB/10/19) Instruments invoked: Chile–Venezuela BIT (1993); Switzerland–Venezuela BIT (1993) Award (18 November 2014) . . . . . . . . . . . . . . 25.239, 244, 291, 405, 459, 465, 583–4, 1446, 1447, 26.340, 61.20, 55 Decision on Stay of Enforcement (11 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.783 Decision on Annulment (15 April 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.50

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Fraport v Philippines I Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines (Case No ARB/03/25) Instrument invoked: Germany–Philippines BIT (1997) Award (16 August 2007) . . . . . . . . . . . . . . . . . . . . . . . 25.456, 463, 464, 26.129, 178–9, 37.32, 41.127, 42.236, 248, 43.52, 65, 79, 91–2, 95, 127, 151, 44.35, 47.15, 48.24, 61.34, 67, 62.15 Decision on Disqualification of Counsel (18 September 2008) . . . . . . . . . . . . . . . . . . . . 44.123 Decision on Annulment (23 December 2010) . . . . . . . . 25.140, 44.27, 48.52, 52.14, 48, 66, 69, 111, 122, 143, 182, 381, 421, 576, 661, 698, 61.96 Fraport v Philippines II Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines (Case No ARB/11/12) Instrument invoked: Germany–Philippines BIT (1997) Procedural Order No 1 (17 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.822 Award (10 December 2014) . . . . . . . . . . . . . . . 25.456, 459, 462, 465, 46.75, 93, 52.803, 806 Fuchs v Georgia (! Kardassopoulos and Fuchs v Georgia) Funnekotter and others v Zimbabwe Bernardus Henricus Funnekotter and others v Republic of Zimbabwe (Case No ARB/05/6) Instrument invoked: Netherlands–Zimbabwe BIT (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.7 Award (22 April 2009) . . . . . . . . . . . . . . . . . . . . . . . 25.591, 1116, 26.214, 27.64, 44.74, 61.56 F-W Oil v Trinidad & Tobago F-W Oil Interests, Inc v Republic of Trinidad & Tobago (Case No ARB/01/14) Instrument invoked: Trinidad and Tobago–United States BIT (1994) Award (3 March 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.213, 283, 389 Gabon v Société Serete Republic of Gabon v Société Serete SA (Case No ARB/76/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.9 Order on Discontinuance (27 February 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.497 Gabriel Resources v Romania Gabriel Resources Ltd and Gabriel Resources (Jersey) v Romania (Case No ARB/15/31) Instruments invoked: Romania–United Kingdom BIT (1996); Canada–Romania BIT (2011) Decision on Second Request for Provisional Measures (22 November 2016) . . . . . . 47.204 Procedural Order No 13 (20 July 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.68 Gambrinus v Venezuela Gambrinus, Corporation v Bolivarian Republic of Venezuela (Case No ARB/11/31) Instrument invoked: Barbados–Venezuela BIT (1994) Award (15 June 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.70 Decision on Annulment (3 October 2017) . . . . . . . . . . . . . . . . . . . . . . . . 48.52, 52.48, 391, 574 Garanti Koza v Turkmenistan Garanti Koza LLP v Turkmenistan (Case No ARB/11/20) Instruments invoked: Turkey–Turkmenistan BIT (1992); United Turkmenistan–Kingdom BIT (1995) Decision on Jurisdiction (w/ Diss Op Boisson de Chazournes) (3 July 2013) . . . . . . 25.851, 1023–4, 1056, 1084, 41.2 Award (19 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.180, 366

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Gardella v Côte d’Ivoire Adriano Gardella SpA v Côte d’Ivoire (Case No ARB/74/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.12 Award (29 August 1977) (1993) 1 ICSID Reports 287 (excerpts) 25.109, 41.124, 42.92, 153, 248, 276, 46.23, 53, 48.23, 140, 56.32, 61.29 Gas Natural v Argentina Gas Natural SDG, SA v Argentine Republic (Case No ARB/03/10) Instruments invoked: Argentina–Spain BIT (1991); Argentina–United States BIT (1991) Decision on Jurisdiction (17 June 2005) . . . . . . . . . . 25.68, 84, 89, 161, 334, 454, 990, 996, 1030, 26.315, 321, 41.68, 123, 42.252, 253, 53.21 Gavazzi v Romania Marco Gavazzi and Stefano Gavazzi v Romania (Case No ARB/12/25) Instrument invoked: Italy–Romania BIT (1990) Procedural Order No 1 (11 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.156 Decision on Jurisdiction, Admissibility and Liability (w/ Diss Op Rubino-Sammartano) (21 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.140, 149, 304, 1088, 48.29 Award (18 April 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.86, 61.43, 53 Decision on Rectification (w/ Diss Op Rubino-Sammartano) (13 July 2017) . . . . . . . . 49.34, 42, 44 Gavrilović v Croatia Georg Gavrilović and Gavrilović doo v Republic of Croatia (Case No ARB/12/39) Instrument invoked: Austria–Croatia BIT (1997) Decision on Bifurcation (21 January 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41.161, 165 Decision on Respondent’s Request of 4 April 2018 (30 April 2018) . . . . . . . . 41.51, 62, 66 Award (26 July 2018) . . . . . . . 25.213, 277, 411, 412, 451, 463, 464, 41.94, 42.33, 318, 61.52 GEA Group v Ukraine GEA Group Aktiengesellschaft v Ukraine (Case No ARB/08/16) Instrument invoked: Germany–Ukraine BIT (1993) Award (31 March 2011) . . . . . . . . . . . . . . . . . . 25.148–9, 255, 297, 305, 400, 708, 718, 61.46 Generation Ukraine v Ukraine Generation Ukraine, Inc v Ukraine (Case No ARB/00/9) Instrument invoked: Ukraine–United States BIT (1994) Award (16 September 2003) . . . . . . . . . . 25.180, 389, 396, 508, 525, 853, 887–8, 941, 985, 1215, 1448, 26.333–4, 350–1, 37.26, 41.52, 58, 104, 124, 42.245, 248, 43.78, 149, 150, 151, 156, 44.114, 56.19, 28, 58.4, 21, 61.57, 60 Genin v Estonia Genin, Eastern Credit Ltd, Inc and AS Baltoil v Republic of Estonia (Case No ARB/99/2) Instrument invoked: Estonia–United States BIT (2003) Award (25 June 2001) . . . . . . . . . . . 25.180, 921, 1116, 1276, 26.68–9, 124, 42.205, 44.20, 46.55, 61.31, 96 Decision on Supplementation and Rectification (4 April 2002) . . . . . 49.48, 60, 61.46, 72, 110 Gerald International v Sierra Leone Gerald International Ltd v Republic of Sierra Leone (Case No ARB/19/31) Instrument invoked: Sierra Leone–United Kingdom BIT (2000) Procedural Order No 2 (28 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.75, 123, 178 Getma and others v Guinea Getma International and others v Republic of Guinea (Case No ARB/11/29)

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Instrument invoked: Investment Law (Guinea 1987) Decision on Disqualification (28 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.38, 68 Decision on Jurisdiction (29 December 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.212 Award (w/ Diss Op Cremades) (16 August 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.474 Decision on Supplementation (13 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.79 Glencore v Colombia Glencore International AG and CI Prodeco SA v Republic of Colombia (Case No ARB/16/6) Instrument invoked: Colombia–Switzerland BIT (2006) Award (27 August 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.459, 54.94 Global Telecom v Canada Global Telecom Holding SAE v Canada (Case No ARB/16/16) Instrument invoked: Canada–Egypt BIT (1996) Decision on Bifurcation (14 December 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.157, 161, 164 Procedural Order No 4 (3 November 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Global Trading v Ukraine Global Trading Resource Corporation and Globex International, Inc v Ukraine (Case No ARB/09/11) Instrument invoked: Ukraine–United States BIT (1994) Award (1 December 2010) . . . . 25.185, 295, 41.127, 135, 136, 138, 144, 148, 149, 150, 61.32 Goetz v Burundi Antoine Goetz and others v Republic of Burundi (Case No ARB/95/3) Instrument invoked: BLEU–Burundi BIT (1989) Award (10 February 1999) . . . . . . . . . . . . . . 25.48, 98, 291, 591, 851, 897, 988, 1116, 37.58, 41.81–2, 85, 42.120, 245, 299, 43.41, 44.22, 35, 45.4, 10, 17, 18, 23, 37, 60, 67, 85, 91, 100, 48.96, 107, 54.87, 93–4 Görkem v Turkmenistan Görkem In¸saat Sanayi ve Ticaret Limited Şirketi v Turkmenistan (Case No ARB/16/30) Instrument invoked: Turkey–Turkmenistan BIT (1992) Order on Discontinuance (12 December 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.58 Gosling and others v Mauritius Thomas Gosling and others v Republic of Mauritius (Case No ARB/16/32) Instrument invoked: Mauritius–United Kingdom BIT (1986) Award (w/ Diss Op Alexandrov) (18 February 2020) . . . . . 25.344, 394, 26.89, 42.141, 216 Gran Colombia Gold v Colombia Gran Colombia Gold Corporation v Republic of Colombia (Case No ARB/18/23) Instrument invoked: Canada–Colombia FTA (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.20 Decision on Bifurcation (17 January 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.161 Decision on Jurisdiction (23 November 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1108 Grassetto v Slovenia Impresa Grassetto SpA, in liquidation v Republic of Slovenia (Case No ARB/13/10) Instrument invoked: Italy–Slovenia BIT (2000) Order on Discontinuance (29 January 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.27 Grenada Private Power v Grenada Grenada Private Power Ltd and WRB Enterprises, Inc v Grenada (Case No ARB/17/13) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.5 Award (19 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.199, 42.56, 71

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Gruslin v Malaysia I Philippe Gruslin v Malaysia (Case No ARB/94/1) Instrument invoked: BLEU–Malaysia BIT (1979) Order on Discontinuance (24 April 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1116, 37.26 Gruslin v Malaysia II Philippe Gruslin v Malaysia (Case No ARB/99/3) Instrument invoked: BLEU–Malaysia BIT (1979) Award (27 November 2000) . . . . . . . 20.2, 25.180, 415, 417, 851, 909, 1116, 37.26, 41.52, 60, 68, 42.248, 44.22, 52.69, 61.31, 89 Order on Discontinuance (2 April 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Guadalupe Gas v Nigeria Guadalupe Gas Products Corporation v Nigeria (Case No ARB/78/1) Instrument invoked: Contract Award (22 July 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107, 52.82 Guardian Fiduciary v North Macedonia Guardian Fiduciary Trust, Ltd, Capital Conservator Savings & Loan, Ltd v Macedonia, former Yugoslav Republic of (Case No ARB/12/31) Instrument invoked: Netherlands–North Macedonia BIT (1998) Award (22 September 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.168 H&H v Egypt H&H Enterprises Investments, Inc v Arab Republic of Egypt (Case No ARB/09/15) Instrument invoked: Egypt–United States BIT (1986) Decision on Jurisdiction (5 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.139, 298, 921, 947 Award (6 May 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1031, 26.89, 41.160, 48.132 Order on Discontinuance (Annulment) (25 April 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Hamester v Ghana Gustav F W Hamester GmbH & Co KG v Republic of Ghana (Case No ARB/07/24) Instrument invoked: Germany–Ghana BIT (1995) Award (18 June 2010) . . . . . . . . . 25.457, 459, 463, 465, 474, 733, 1447, 1464 2299, 61.33 Hela Schwarz v China Hela Schwarz GmbH v People’s Republic of China (Case No ARB/17/19) Instrument invoked: China–Germany BIT (2003) Decision on Provisional Measures (10 August 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.16, 61 Procedural Order No 4 (Reasoned Decision on Request to Amend the Request for Arbitration) (15 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.48 Helnan v Egypt Helnan International Hotels A/S v Arab Republic of Egypt (Case No ARB/05/19) Instrument invoked: Denmark–Egypt BIT (1999) Decision on Jurisdiction (17 October 2006) . . . . . . . . 25.185, 239, 240, 245, 254, 260, 929, 41.106, 43.14, 60, 79, 95, 105, 158, 47.15, 17, 63.26 Award (3 July 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.399, 26.252–3, 356–9, 41.37, 58, 47.70 Decision on Annulment (14 June 2010) . . . . . . . . 26.356–9, 362, 541, 48.49, 85, 52.14, 48, 186, 383, 698 HEP v Slovenia Hrvatska Elektroprivreda dd v Republic of Slovenia (Case No ARB/05/24) Instruments invoked: Contract; ECT (1994)

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schreuer’s commentary on the icsid convention Decision on Participation of Counsel (6 May 2008) . . . . . . . . . . . . . . . . . . . . . 44.116–20, 56.7 Decision on Treaty Interpretation Issue (w/ Ind Op Paulsson) (12 June 2009) . . . . . . . . . 25.826 Award (17 December 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.248, 61.46, 71

Herzig v Turkmenistan Dirk Herzig as Insolvency Administrator over the Assets of Unionmatex Industrieanlagen GmbH v Turkmenistan (Case No ARB/18/35) Instrument invoked: Germany–Turkmenistan BIT (1997) Decision on Security for Costs (27 January 2020) . . . . . . . . . . . . 25.746, 1179, 42.26, 47.57, 139, 140–4, 61.108 Highbury v Venezuela I Highbury International AVV and Ramstein Trading Inc v Bolivarian Republic of Venezuela (Case No ARB/11/1) Instruments invoked: Netherlands–Venezuela BIT (1991); Investment Law (Venezuela 1999) Award (26 September 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.812 Decision on Annulment (9 September 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Highbury v Venezuela II Highbury International AVV, Compañía Minera de Bajo Caroní AVV, and Ramstein Trading Inc v Bolivarian Republic of Venezuela (Case No ARB/14/10) Instruments invoked: Netherlands–Venezuela BIT (1991); Investment Law (Venezuela 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.16 Decision on Disqualification (9 June 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.78 Hochtief v Argentina Hochtief Aktiengesellschaft v Argentine Republic (Case No ARB/07/31) Instrument invoked: Argentina–Germany BIT (1991) Decision on Jurisdiction (w/ Sep & Diss Op Thomas) (24 October 2011) . . . . . . . . 25.25, 289, 1030, 26.322, 41.13, 67, 104 Decision on Liability (29 December 2014) . . . . . . . . . . . . . . 25.289, 347, 458, 459, 753, 755, 26.129, 145, 36.77 Holiday Inns v Morocco Holiday Inns SA and others v Kingdom of Morocco (Case No ARB/72/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . 48.23, 52.71, 56.31, 46, 57.45, 63.28 Decision on Provisional Measures (2 July 1972) (not public) . . . . . . 26.273, 47.46, 56, 65, 225–6 Decision on Jurisdiction (1 July 1973) (not public) . . . . . . 25.504, 612, 644–7, 681–2, 765, 1281–3, 1307, 41.21 Further Decision on Jurisdiction (12 May 1974) (not public) . . . . . . . 25.48, 136, 300, 770, 886, 1000, 1064, 26.58–61, 234, 41.58, 44.96, 46.72, 47.146 Hope Services v Cameroon Hope Services LLC v Republic of Cameroon (Case No ARB/20/2) Instrument invoked: Cameroon–United States BIT (1986) Decision on Disqualification (21 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.66 Houben v Burundi Joseph Houben v Republic of Burundi (Case No ARB/13/7) Instrument invoked: BLEU–Burundi BIT (1989) Award (12 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.185, 266, 388, 395, 41.104

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Houston Industries v Argentina Houston Industries Energy, Inc and others v Argentine Republic (Case No ARB/98/1) Instrument invoked: Argentina–United States BIT (1991) Award (w/ Decl Torres Bernárdez) (24 August 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.116 Hydro and others v Albania Hydro Srl and others v Republic of Albania (Case No ARB/15/28) Instrument invoked: Albania–Italy BIT (1991) Decision on Provisional Measures (3 March 2016) . . . . . . . . . . . . . . . . . . . 47.15, 89, 101, 186 Hydro Energy v Spain Hydro Energy 1 Sàrl and Hydroxana Sweden AB v Kingdom of Spain (Case No ARB/15/42) Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Directions on Quantum (9 March 2020) . . . . . . 42.4, 5, 238, 245 Iberdrola v Guatemala Iberdrola Energía, SA v Republic of Guatemala (Case No ARB/09/5) Instrument invoked: Guatemala–Spain BIT (2002) Award (17 August 2012) . . . . . . . . . . . . . . . . . . . . . . . 25.975, 1056, 26.42, 41.157, 165, 61.46 Decision on Annulment (w/ Diss Op Shaw) (13 January 2015) . . . . . . . . 48.116, 52.20, 48, 701, 704, 61.96 IBM v Ecuador IBM World Trade Corporation v Republic of Ecuador (Case No ARB/02/10) Instrument invoked: Ecuador–United States BIT (1993) Decision on Jurisdiction (w/ Diss Op Roldós Aguilera) (22 December 2003) . . . . . . 25.284, 291, 851, 1100, 26.84, 129, 335, 39.12, 35, 41.123 Award (22 July 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107 İçkale v Turkmenistan İçkale İn¸saat Ltd Şirketi v Turkmenistan (Case No ARB/10/24) Instrument invoked: Turkey–Turkmenistan BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.81 Decision on Disqualification (11 July 2014) . . . . . . . . . . . . . . . . . . . . . 14.9, 13, 57.41, 47, 51, 81, Final Clause.7 Award (w/ Diss Op Sands and Diss Op Lamm) (8 March 2016) . . . . . . . . 25.141, 246, 269, 276, 753, 754, 804, 861–2, 993, 995, 26.146, 41.2, 65, 104, 154, 160, 161, 45.101, 56.19, 48 Decision on Supplementation and Rectification (4 October 2016) . . . . . . . . . . . . .49.48, 77–8 IGB v Spain Inversión y Gestión de Bienes, IGB, SL and IGB18 Las Rozas, SL v Kingdom of Spain (Case No ARB/12/17) Instrument invoked: Spain–Venezuela BIT (1995) Decision on Jurisdiction (21 June 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.18 Award (14 August 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 Impregilo v Argentina Impregilo SpA v Argentine Republic (Case No ARB/07/17) Instrument invoked: Argentina–Italy BIT (1990) Award (w/ Conc & Diss Op Stern and Conc & Diss Op Brower) (21 June 2011) . . . . . 25.98, 284, 289, 678, 993, 1030, 26.322, 61.33 Concurring and Dissenting Opinion Brower (21 June 2011) . . . . . . . . . . . . . . . . . . . . 48.116

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schreuer’s commentary on the icsid convention Concurring and Dissenting Opinion Stern (21 June 2011) . . . . . . . . . . . . . . . . . . . . . . 48.116 Decision on Annulment (24 January 2014) . . . . . . 49.86, 52.12, 39, 181, 442, 53.21, 61.40

Impregilo v Pakistan Impregilo SpA v Islamic Republic of Pakistan (Case No ARB/03/3) Instrument invoked: Italy–Pakistan BIT (1997) Decision on Jurisdiction (22 April 2005) . . . . . . . . . . . . . 25.70, 312, 526, 625–8, 656–8, 663, 669–70, 851, 851 1394, 931, 936, 939, 968, 1173, 1174, 1175, 26.129, 131–3, 36.28, 41–2, 38.5, 41.52, 108, 123, 43.64 Inceysa v El Salvador Inceysa Vallisoletana SL v Republic of El Salvador (Case No ARB/03/26) Instrument invoked: El Salvador–Spain (1995) Award (2 August 2006) . . . . . . . . . . 25.456, 459, 463, 471, 473, 778, 785–6, 795, 797, 801, 957–8, 1047, 1056, 26.129, 37.58, 41.2, 8, 127, 42.83, 247, 248, 48.24, 52.69, 61.54, 62.16 Industria Nacional de Alimentos v Peru (! Lucchetti v Peru) Infinito Gold v Costa Rica Infinito Gold Ltd v Republic of Costa Rica (Case No ARB/14/5) Instrument invoked: Canada–Costa Rica BIT (1998) Procedural Order No 2 (1 June 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.185 InfraRed v Spain InfraRed Environmental Infrastructure GP Ltd and others v Kingdom of Spain (Case No ARB/14/12) Instrument invoked: ECT (1994) Award (w/ Part Diss Op Dupuy) (2 August 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1089 Decision on Stay of Enforcement (26 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.738 Infrastructure Services v Spain (! Antin v Spain) Inmaris Perestroika v Ukraine Inmaris Perestroika Sailing Maritime Services GmbH and others v Ukraine (Case No ARB/08/8) Instrument invoked: Germany–Ukraine BIT (1993) Decision on Jurisdiction (8 March 2010) . . . . . . . . 25.68, 128, 144, 145, 146, 213, 260, 277, 291, 334, 416, 421, 433–4, 458, 460, 746, 1179, 41.123, 42.14, 26 Award (1 March 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.122, 61.31 Interocean Oil v Nigeria Interocean Oil Development Company and Interocean Oil Exploration Company v Federal Republic of Nigeria (Case No ARB/13/20) Instrument invoked: Investment Law (Nigeria 1995) Decision on Preliminary Objections (29 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.123 Procedural Order No 6 (1 February 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.89, 139 Decision on Disqualification (3 October 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.41, 89 Award (6 October 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.795, 959, 985, 987, 42.153 Ipek v Turkey Ipek Investment Ltd v Republic of Turkey (Case No ARB/18/18) Instrument invoked: Turkey–United Kingdom BIT (1991) Procedural Order No 5 (19 September 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.15 Procedural Order No 11 (21 February 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44.172, 47.217 Procedural Order No 13 (13 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.173

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Isolux v Peru Isolux Corsán Concesiones SA v Republic of Peru (Case No ARB/12/5) Instrument invoked: Peru–Spain BIT (1994) Award (25 March 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107 Italba v Uruguay Italba Corporation v Oriental Republic of Uruguay (Case No ARB/16/9) Instrument invoked: United States–Uruguay BIT (2005) Decision on Provisional Measures (15 February 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.17 Award (22 March 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.329, 450, 42.34, 52.69, 61.46 Decision on Disqualification (29 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.683 Order on Discontinuance (16 June 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.66 Itera v Georgia Itera International Energy LLC and Itera Group NV v Georgia (Case No ARB/08/7) Instruments invoked: Georgia–United States BIT (1994); Georgia–Netherlands BIT (1998) Decision on the Admissibility of Ancillary Claims (w/ Diss Op Orrego Vicuña) (4 December 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.85–7 Itisaluna v Iraq Itisaluna Iraq LLC and others v Republic of Iraq (Case No ARB/17/10) Instruments invoked: Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organisation of the Islamic Conference (1981); Iraq–Japan BIT (2012) Award (3 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1032, 26.318, 41.127 Jan de Nul v Egypt Jan de Nul NV and Dredging International NV v Arab Republic of Egypt (Case No ARB/04/13) Instruments invoked: BLEU–Egypt BIT (1977 and 1999) Decision on Jurisdiction (16 June 2006) . . . . . . . . . . 25.68, 84, 89, 185, 239, 245, 249, 250, 254, 276, 352, 399, 927–8, 1012, 26.102, 146, 353, 37.33, 41.106, 123, 42.14, 245, 252, 264, 43.94, 144, 158, 44.99, 53.21, 63.26 Award (6 November 2008) . . . . . . . 25.939, 939, 1489, 1013, 1912–13, 26.340, 345, 41.102 Joy Mining v Egypt Joy Mining Machinery Ltd v Arab Republic of Egypt (Case No ARB/03/11) Instrument invoked: Egypt–United Kingdom BIT (1975) Award (6 August 2004) . . . . . . . . 25.7, 147, 178, 184, 239, 240, 245, 256, 260, 293–4, 298, 26.52–3, 37.33, 36, 41.106, 127, 48.24, 52.69, 61.29 Order on Discontinuance (16 December 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Kaiser Bauxite v Jamaica Kaiser Bauxite Company v Jamaica (Case No ARB/74/3) Instrument invoked: Contract Decision on Jurisdiction (6 July 1975) (1993) 1 ICSID Reports 296 . . . . . . . . 25.24, 30, 89, 154, 184, 197, 765, 769, 770, 954, 1069–71, 1185, 1496, 1505, 26.204, 38.26, 41.78–9, 88, 123, 42.65, 73, 78, 175, 45.10, 15, 29, 55, 90, 48.23, 56.27, 62.16, 68.12 Kappes v Guatemala Daniel W Kappes and Kappes, Cassiday & Associates v Republic of Guatemala (Case No ARB/18/43) Instrument invoked: DR–CAFTA (2004) Decision on Preliminary Objections (w/ Part Diss Op Douglas) (13 March 2020) . . . . 26.96

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Kardassopoulos v Georgia Ioannis Kardassopoulos v Republic of Georgia (Case No ARB/05/18) and Ron Fuchs v Georgia (Case No ARB/07/15) Instruments invoked: Georgia–Greece BIT (1994); ECT (1994); Georgia–Israel BIT (1995) Decision on Jurisdiction (6 July 2007) . . . . . . . . 25.185, 239, 254, 260, 276, 334, 337, 460, 464, 851, 921, 976, 1116, 37.32, 41.68, 106, 42.126, 245, 264, 43.158 Award (3 March 2010) . . . 25.826, 947, 1116, 26.208, 43.68, 48.23, 57.101, 61.46, 101–2 Decision on Stay of Enforcement (12 November 2010) . . . . . . . 52.574, 730, 731, 738, 740, 741, 786, 54.23, 145, 69.13 Decision to Suspend Annulment Proceeding (21 March 2011) . . . . . . . . . . . . . . . . . . . . 51.1, 5 Order on Discontinuance (21 December 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.8 Karkey v Pakistan Karkey Karadeniz Elektrik Uretim AS v Islamic Republic of Pakistan (Case No ARB/13/1) Instrument invoked: Pakistan–Turkey BIT (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.16 Award (22 August 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.239, 260, 43.156 Decision on Stay of Enforcement (22 February 2018) . . . . 52.730, 731, 732, 738, 740, 759 Decision to Suspend Annulment Proceedings (20 February 2019) . . . . . . . . . . . . . . . . . . . 51.16 Order on Discontinuance (9 January 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.8 Kazmin v Latvia Eugene Kazmin v Republic of Latvia (Case No ARB/17/5) Instrument invoked: Latvia–Ukraine BIT (1997) Procedural Order No 6 (13 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47.109, 140 Decision on Disqualification (14 October 2020) . . . . . . . . . . . . . . . . . . . . . . . 14.9, 13, 57.23, 84 Khudyan v Armenia Edmond Khudyan and Arin Capital & Investment Corporation v Republic of Armenia (Case No ARB/17/36) Instrument invoked: Armenia–United States BIT (1992) Procedural Order No 2 (5 December 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.122–3 Kiliç v Turkmenistan Kılıç İn¸saat İthalat İhracat Sanayi ve Ticaret Anonim Şirketi v Turkmenistan (Case No ARB/10/1) Instrument invoked: Turkey–Turkmenistan BIT (1992) Decision on Art. VII.2 of the Turkey–Turkmenistan BIT (7 May 2012) . . . . . . .Final Clause.3 Award (w/ Sep Op Park) (2 July 2013) . . . . . . . . . . . . . . . . . 25.66, 993, 1031, 26.325, 41.104 Separate Opinion Park (20 May 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.66 Decision on Annulment (14 July 2015) . . . . . . . . . . . . 52.14, 39, 41, 48, 163, 393, 400, 447, 453, 454 775 Kim and others v Uzbekistan Vladislav Kim and others v Republic of Uzbekistan (Case No ARB/13/6) Instrument invoked: Kazakhstan–Uzbekistan BIT (1997) Decision on Jurisdiction (8 March 2017) . . . . . . . . . . . 25.162, 186, 241, 248, 252, 285, 320, 337, 341, 367, 411, 450, 451, 457, 458, 459, 463, 971, 1128, 42.83, 52.252–3 Klöckner v Cameroon Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais (Case No ARB/81/2) Instrument invoked: Contract Award (w/ Diss Op Schmidt) (21 October 1983) (1994) 2 ICSID Reports 9 (excerpts) 25.542, 546, 548, 567–8, 591, 642, 650–2, 770, 915–18, 954, 998, 1001, 1267, 1288,

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1332, 1384, 1409, 1424–7, 1464, 26.33–40, 41.47, 54, 88, 124, 170, 42.37, 211–12, 228–9, 248, 249, 278, 279, 341–3, 43.54, 79, 44.35, 96, 46.49, 53, 73, 84, 97, 48.116, 119, 52.206, 277–8, 300, 317, 461, 490, 722, 61.29, 62.20 Dissenting Opinion Schmidt (21 October 1983) . . . . . . . . . . . . . . . . . 25.918, 26.37, 48.116 Decision on Annulment (3 May 1985) . . . . . . . . . . 25.918, 26.38, 41.54, 42.37–8, 228, 231, 248, 249, 283, 341–3, 351, 434, 437–8, 43.48, 81, 95, 48.45, 50, 53–4, 56, 67–8, 71–4, 85, 119, 123, 49.14, 21, 87, 52.14, 15, 19, 20, 24, 25, 48, 115, 167–8, 191, 206–9, 225, 243, 246, 279–83, 294, 298–303, 309, 317–19, 340–2, 350–4, 367–8, 374, 395–6, 417, 437–8, 458–62, 465, 466, 474, 486, 490, 513–14, 524–5, 532–5, 544–7, 576, 587–8, 599, 614, 617–18, 640–1, 643–6, 652–3, 693, 698, 833, 53.193, 61.37 Resubmitted Case: Award (26 January 1988) (not public) . . . . . . . . . . . . . . . 52.469, 801, 806 Resubmitted Case: Decision on Annulment (17 May 1990) (not public) . . . . . . . . 52.28, 32, 99, 153, 398, 403–4, 418, 470, 590, 698, 722, 801 Koch Minerals v Venezuela Koch Minerals Sàrl and Koch Nitrogen International Sàrl v Bolivarian Republic of Venezuela (Case No ARB/11/19) Instrument invoked: Switzerland–Venezuela BIT (1993) Award (w/ Diss Op Douglas) (30 October 2017) . . . . . . . . . . . . . . . . 25.139, 239, 56.32, 58.5 Krederi v Ukraine Krederi Ltd v Ukraine (Case No ARB/14/17) Instrument invoked: Ukraine–United Kingdom BIT (1993) Award (2 July 2018) . . . . . . . . . . . . . . . . . . . . . . . . 25.254, 1024, 42.83, 248, 48.86, 153, 53.21 Kruck and others v Spain Mathias Kruck and others v Kingdom of Spain (Case No ARB/15/23) Instrument invoked: ECT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.27 Decision on Disqualification (16 March 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.41 KS and TLS Invest v Spain KS Invest GmbH and TLS Invest GmbH v Kingdom of Spain (Case No ARB/15/25) Instrument invoked: ECT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.27 Decision on Disqualification (30 April 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.41, 42 KT Asia v Kazakhstan KT Asia Investment Group BV v Republic of Kazakhstan (Case No ARB/09/8) Instrument invoked: Kazakhstan–Netherlands BIT (2002) Award (17 October 2013) . . . . . . . . . . . 25.239, 248, 251, 254, 269, 285, 308, 365, 375, 414, 1187, 42.14, 53.24, 61.32 Order on Discontinuance (Annulment) (20 November 2014) . . . . . . . . . . . . . . . . . 52.48, 61.89 Lahoud v DR Congo Antoine Abou Lahoud and Leila Bounafeh-Abou Lahoud v Democratic Republic of the Congo (Case No ARB/10/4) Instrument invoked: Investment Law (DR Congo 2002) Award (7 February 2014) . . . . . . . . . . . . . 25.207–8, 211, 239, 254, 260, 26.340, 506, 44.96, 54.82, 55.7, 61.52 Lanco v Argentina Lanco International Inc v Argentine Republic (Case No ARB/97/6) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (8 December 1998) . . . . . . . . .25.84, 89, 180, 286, 851, 857, 1188, 26.103, 302, 332

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Landesbank Baden-Württemberg and others v Spain Landesbank Baden-Württemberg and others v Kingdom of Spain (Case No ARB/15/45) Instrument invoked: ECT (1994) Decision on Intra-EU Objection (25 February 2019) . . . . . . . . . . . 42.4, 5, 15, 238, 53.16, 21 Decision on Disqualification (15 December 2020) . . . . . . . . . . 14.6, 10, 57.35, 67, 89, 58.15 Lemire v Ukraine Joseph C Lemire v Ukraine (Case No ARB/06/18) Instrument invoked: Ukraine–United States BIT (1994) Decision on Jurisdiction and Liability (14 January 2010) . . . . . . 25.142–3, 391, 405, 42.74 Award (w/ Diss Op Voss) (28 March 2011) . . . . . . . . . . . . . . . 25.284, 1116, 61.23, 43–4, 74 Decision on Annulment (8 July 2013) . . . . . . . 48.29, 52.12, 66, 238, 334, 345, 393, 420–1, 468, 472, 805, 61.40 LESI & Astaldi v Algeria LESI, SpA and Astaldi, SpA v People’s Democratic Republic of Algeria (Case No ARB/05/3) Instrument invoked: Algeria–Italy BIT (1991) Decision on Jurisdiction (12 July 2006) . . . . . . . 25.239, 244, 250, 254, 266, 388, 432, 702, 26.146, 40.27, 41.106, 42.20, 43.158 LESI-DIPENTA v Algeria Consortium Groupement LESI-DIPENTA v People’s Democratic Republic of Algeria (Case No ARB/03/8) Instrument invoked: Algeria–Italy BIT (1991) Award (10 January 2005) . . . . . . . . 25.26, 45, 239, 244, 250, 254, 266, 432, 454, 670, 970, 985, 987, 1174, 41.96, 51.95, 61.33, 96 LETCO v Liberia Liberian Eastern Timber Corporation v Republic of Liberia (Case No ARB/83/2) Instrument invoked: Contract Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 349 . . . . . . . . . . . 25.30, 198, 506, 530, 662, 665, 765, 954, 1186, 1267, 1289–90, 1293, 1294, 1334, 1386, 1409, 1415, 1454, 41.80, 88 Award (31 March 1986) (1994) 2 ICSID Reports 346 . . . . . . . . . 25.328, 662, 1282, 26.233, 41.80, 122, 123, 42.4, 99, 111–12, 153, 160, 178–9, 192, 245, 252, 258, 284–5, 43.39–40, 43, 81, 139, 44.20, 61, 45.10, 20–2, 29, 50, 58, 67, 84, 98, 46.99, 48.23, 141, 53.21, 54.66–7, 55.36, 72, 56.27, 61.57, 96, 62.20 Decision on Rectification (10 June 1986)* (1994) 2 ICSID Reports 380 . . . . 49.53–4, 61.117 Levy and Gremcitel v Peru Renée Rose Levy and Gremcitel SA v Republic of Peru (Case No ARB/11/17) Instrument invoked: France–Peru BIT (1993) Award (9 January 2015) . . . . . . . . . . . . . 25.26, 72, 708, 714, 922, 1116, 1259, 1260, 41.96, 48.61, 61.66 LG&E v Argentina LG&E Energy Corporation, LG&E Capital Corporation and LG&E International Inc v Argentine Republic (Case No ARB/02/1) * The decision’s precise date is somewhat unclear. Several publications list it as 14 May 1986. See (1987) 26 ILM 647; (1992) 89 ILR 352 and (1994) 2 ICSID Reports 343, 346 and 380. This date is an obvious error since the request was only registered on that date. ICSID’s website gives the date of 10 June 1986 as the date of the Decision on Rectification.

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Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (30 April 2004) . . . . . . 25.98, 161, 289, 344, 846, 851, 985, 26.67, 80, 129, 41.123, 44.20, 46.83, 48.29 Decision on Liability (3 October 2006) . . . . . . . . . . 42.135–6, 155, 190, 191, 214, 226, 244, 245, 266, 269, 272, 297, 312, 43.60, 75, 137, 139, 48.29, 53.22, Final Clause.6 Award (25 July 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.122, 44.140, 49.73, 52.378, 61.33 Decision on Supplementation (8 July 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.73 Order on Discontinuance (20 February 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Libananco v Turkey Libananco Holdings Co Ltd v Republic of Turkey (Case No ARB/06/8) Instrument invoked: ECT (1994) Decision on Preliminary Issues (23 June 2008) . . . . . . . . 22.11, 14, 43.22, 50, 67, 47.132–3, 61.106 Award (2 September 2011) . . . . . . . . . . . . 25.450, 1056, 26.84, 41.127, 161, 42.33, 59.3, 5, 61.18, 49 Decision on Provisional Measures (7 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . 47.5, 17, 52.687 Decision on Stay of Enforcement (7 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.732, 54.32 Decision on Annulment (22 May 2013) (excerpts) . . . . . . . 48.60, 76, 52.48, 334, 344, 359, 547, 698 Lidercón v Peru Lidercón, SL v Republic of Peru (Case No ARB/17/9) Instrument invoked: Peru–Spain BIT (1994) Award (6 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.129, 41.21 Lighthouse Corp v Timor-Leste Lighthouse Corporation Pty Ltd and Lighthouse Corporation Ltd, IBC v Democratic Republic of Timor-Leste (Case No ARB/15/2) Instruments invoked: Contract; Investment Law (Timor-Leste 2005) Procedural Order No 1 (13 October 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.14, 44.35 Procedural Order No 2 (13 February 2016) . . . . . . . . . . . . . . . . . . . . . . 47.15, 17, 56, 139, 240 Decision on Bifurcation (8 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.158–9 Award (22 December 2017) . . . . . . . . . 25.212, 779, 795–6, 963, 1039, 1047, 1053, 44.140, 48.24, 52.69, 53.24, 61.50, 63 Liman Caspian Oil v Kazakhstan Liman Caspian Oil BV and NCL Dutch Investment BV v Republic of Kazakhstan (Case No ARB/07/14) Instrument invoked: ECT (1994) Award (22 June 2010) . . . . . . . . . . . . . . . . 25.474, 770, 954, 1108, 42.86, 43.14, 53.23, 61.33 Longreef v Venezuela Longreef Investments AVV v Bolivarian Republic of Venezuela (Case No ARB/11/5) Instrument invoked: Netherlands–Venezuela BIT (1991) Award (6 November 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.27 Lotus v Turkmenistan Lotus Holding Anonim Şirketi v Turkmenistan (Case No ARB/17/30) Instruments invoked: Turkey–Turkmenistan BIT (1992); ECT (1994) Award (6 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.127 LSG Building Solutions and others v Romania LSG Building Solutions GmbH and others v Romania (Case No ARB/18/19)

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Instrument invoked: ECT (1994) Decision on Bifurcation (9 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.161 Lucchetti v Peru Industria Nacional de Alimentos, SA and Indalsa Perú, SA (formerly Empresas Lucchetti, SA and Lucchetti Perú, SA) v Republic of Peru (Case No ARB/03/4) Instrument invoked: Chile–Peru BIT (2000) Award (7 February 2005) . . . . . . 25.70, 72, 926, 1276, 1301, 26.174, 27.28, 41.127, 48.24, 52.69, 61.29 Decision on Annulment (w/ Diss Op Berman) (5 September 2007) . . . . . . . . . . 25.679, 926, 42.42, 43.33, 48.116, 120, 126, 52.12, 17, 48, 111, 120, 173, 178, 189, 200–1, 231, 380, 411, 424, 479, 574, 698, 701, 704, 722, 794, 61.37 Dissenting Opinion Berman (13 August 2007) . . . . . . 48.120, 126, 52.173, 231, 479, 701 Decision on Rectification (30 November 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.72 Lundin v Tunisia Lundin Tunisia BV v Republic of Tunisia (Case No ARB/12/30) Instrument invoked: Contract Award (22 December 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.69, 84, 98, 1491, 41.138 Mabco v Kosovo Mabco Constructions SA v Republic of Kosovo (Case No ARB/17/25) Instruments invoked: Kosovo–Switzerland BIT (2011); Investment Law (Kosovo 2014) Decision on Jurisdiction (w/ Diss Op Reinisch) (30 October 2020) . . . . . . . . . . . 25.239, 269, 308, 393, 414, 1188, 1190 Maffezini v Spain Emilio Augustín Maffezini v Kingdom of Spain (Case No ARB/97/7) Instrument invoked: Argentina–Spain BIT (1991) Decision on Provisional Measures (28 October 1999) . . . . . . . . . . . 43.88, 47.15, 21, 58, 85, 128, 228, 61.106 Decision on Jurisdiction (25 January 2000) . . . . . . . . . 25.24, 70, 72, 73, 74, 180, 526, 851, 923–4, 990, 993, 996, 1027, 1447, 26.315, 316–18, 321, 37.58, 41.123, 42.245 Award (13 November 2000) . . . . . . . 25.947, 1116, 41.122, 42.294, 43.60, 109, 111, 44.22, 35, 96, 138, 52.143, 61.33 Decision on Rectification (31 January 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.58, 96, 61.110 Magyar Farming v Hungary Magyar Farming Company Ltd, Kintyre Kft and Inicia Zrt v Republic of Hungary (Case No ARB/17/27) Instrument invoked: Hungary–United Kingdom BIT (1987) Award (13 November 2019) . . . . . 25.1089, 42.142, 207, 245, 249, 319, 44.7, 48.86, 53.16 Malaysian Historical Salvors v Malaysia Malaysian Historical Salvors, SDN, BHD v Malaysia (Case No ARB/05/10) Instrument invoked: Malaysia–United Kingdom BIT (1981) Award (17 May 2007) . . . . . . . . . . . . Preamble.14, 25.239, 240, 244, 245, 249, 256, 263–5, 276, 37.26, 44.169, 48.24, 133, 52.69, 61.29, 62.20, 63.21 Decision on Annulment (w/ Diss Op Shahabuddeen) (16 April 2009) . . . . . . . Preamble.14, 25.7, 186, 265, 271, 292, 479, 52.48, 185, 201, 239, 576, 701, 704, 61.37 Dissenting Opinion Shahabuddeen (19 February 2009) . . . . . . . . . . . . . . . 25.8, 265, 48.116 Malicorp v Egypt Malicorp Ltd v Arab Republic of Egypt (Case No ARB/08/18)

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Instrument invoked: Egypt–United Kingdom BIT (1975) Award (7 February 2011) . . . . . . . . . . . . . . . . 25.186, 239, 260, 277, 291, 365, 390, 465, 478 Decision on Annulment (3 July 2013) . . . . . . . . . . . . . . . . . . . . . . . . . 52.48, 346, 386, 486, 698 Mamidoil v Albania Mamidoil Jetoil Greek Petroleum Products Societe Anonyme SA v Republic of Albania (Case No ARB/11/24) Instrument invoked: Albania–Greece BIT (1991) Award (w/ Diss Op Hammond) (30 March 2015) . . . . . . . 25.139, 239, 458, 459, 464, 465, 468, 919, 36.76, 42.327, 53.21 Order on Discontinuance (Annulment) (3 August 2016) . . . . . . . . . . . . . . . . . 52.48, 699, 1107 Manufacturers Hanover Trust v Egypt Manufacturers Hanover Trust Company v Arab Republic of Egypt and General Authority for Investment and Free Zones (Case No ARB/89/1) Instrument invoked: Investment Law (Egypt 1974) Order on Discontinuance (24 June 1993) . . . . . . . . . . . . . . . . 25.548, 555, 558, 559, 566, 792 Marfin and others v Cyprus Marfin Investment Group Holdings SA, Alexandros Bakatselos and others v Republic of Cyprus (Case No ARB/13/27) Instrument invoked: Cyprus–Greece BIT (1992) Award (26 July 2018) . . . . . . . . . . . . . 25.54, 592, 732, 743, 985, 1020, 1089, 48.140, 53.17 Masdar v Spain Masdar Solar & Wind Cooperatief UA v Kingdom of Spain (Case No ARB/14/1) Instrument invoked: ECT (1994) Award (16 May 2018) . . . . . . . . . 25.221, 405, 586, 1108, 41.124, 44.96, 185, 53.16, 61.32 Decision on Stay of Enforcement (24 August 2018) . . . . . . . . . . 44.90, 91, 46.46, 49.40, 99, 53.66 Decision on the Continuation of the Stay of Enforcement (20 May 2020) . . . . . . . . 52.19, 790, 53.63, 54.44, 123 Procedural Order No 3 (30 May 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.16, 21 MCI v Ecuador MCI Power Group LC and New Turbine, Inc v Republic of Ecuador (Case No ARB/03/6) Instrument invoked: Ecuador–United States BIT (1993) Award (31 July 2007) . . . . . . . . . . 25.70, 180, 277, 939, 26.84, 37.58, 41.106, 124, 42.137, 206, 298, 43.19, 158, 44.140, 61.29, 62.16 Decision on Annulment (19 October 2009) . . . . . . . . . . . . . 48.45, 55, 61, 49.45, 52.48, 155, 179–81, 576, 698, 61.40 Meerapfel v Central African Republic M Meerapfel Söhne AG v Central African Republic (Case No ARB/07/10) Instrument invoked: Contract Award (12 May 2011) . . . . . . . . . . . 25.84, 239, 254, 260, 276, 284, 38.25, 42.11, 64, 61.29 Menzies v Senegal Menzies Middle East and Africa SA and Aviation Handling Services International Ltd v Republic of Senegal (Case No ARB/15/21) Instruments invoked: Netherlands–Senegal BIT (1979); Senegal–United Kingdom BIT (1980); GATS (1994); Investment Law (Senegal 2004) Procedural Order No 2 (2 December 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.21, 47.82, 89 Award (5 August 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1032, 44.96, 47.82

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Mera Investment v Serbia Mera Investment Fund Ltd v Republic of Serbia (Case No ARB/17/2) Instrument invoked: Cyprus–Serbia BIT (2005) Decision on Jurisdiction (30 November 2018) . . . . . . . . . . 25.180, 284, 310, 351, 366, 405, 627, 679, 1262, 48.43 Metalpar v Argentina Metalpar SA and Buen Aire SA v Argentine Republic (Case No ARB/03/5) Instrument invoked: Argentina–Chile BIT (1991) Decision on Jurisdiction (27 April 2006) . . . . . . . . . . . . . . . 25.122, 129, 161, 289, 458, 62.16 Metal-Tech v Uzbekistan Metal-Tech Ltd v Republic of Uzbekistan (Case No ARB/10/3) Instrument invoked: Israel–Uzbekistan BIT (1994) Award (4 October 2013) . . . . . . . 25.456, 459, 463, 477, 802, 803, 968, 41.68, 154, 42.138, 157, 248, 318, 43.14, 60, 61, 111, 127, 217, 46.90, 52.143, 53.24, 61.34, 67 Micula v Romania I Ioan Micula, Viorel Micula, SC European Food SA, SC Starmill SRL and SC Multipack SRL v Romania (Case No ARB/05/20) Instrument invoked: Romania–Sweden BIT (2002) Decision on Jurisdiction (24 September 2008) . . . . . . . . . . . . . . 25.25, 68, 76, 162, 939, 940, 1118, 1122, 1123, 1135, 1137, 1321, 1325, 1335, 1344, 1347, 1409, 1411, 41.13, 68, 106, 123, 42.16 Procedural Order (20 January 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.168 Award (w/ Sep Op Abi-Saab) (11 December 2013) . . . . . . . . 25.1116, 42.239, 240, 43.168, 44.35, 46.37, 41, 54.109, 113, 55.11, 61.33 Decision on Annulment (26 February 2016) . . . . . . . . . . 42.42, 44.27, 46.38, 48.83, 52.189, 300, 318, 468, 504, 574, 69.16 Micula v Romania II Ioan Micula, Viorel Micula and others v Romania (Case No ARB/14/29) Instrument invoked: Romania–Sweden BIT (2002) Award (5 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.933, 1020, 41.50, 57, 42.217 Middle East Cement v Egypt Middle East Cement Shipping and Handling Co SA v Arab Republic of Egypt (Case No ARB/ 99/6) Instrument invoked: Egypt–Greece BIT (1993) Award (12 April 2002) . . . . . . . . . . . . 25.98, 283, 678, 26.67, 70, 42.121, 145, 248, 43.142, 148, 156, 44.145, 46.26, 43, 61.33, 96 Mihaly v Sri Lanka Mihaly International Corporation v Democratic Republic of Sri Lanka (Case No ARB/00/2) Instrument invoked: Sri Lanka–United States BIT (1991) Award (w/ Conc Op Suratgar) (15 March 2002) . . . . . . . . . . . 25.185, 246, 312, 383–5, 669, 670, 717, 723–5, 1238, 41.22, 127, 42.248, 48.24, 116, 52.69 Concurring Opinion Suratgar (7 March 2002) . . . . . . . . . . . . . . . . . . . . . . . . .25.385, 48.116 Millicom v Senegal Millicom International Operations BV and Sentel GSM SA v Republic of Senegal (Case No ARB/08/20) Instruments invoked: Contract; Netherlands–Senegal BIT (1979)

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Decision on Provisional Measures (9 December 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.110 Decision on Jurisdiction (16 July 2010) . . . . . . . . . 25.239, 260, 770, 834–5, 851, 954, 1047, 1094, 1101, 1282, 1293, 1294, 1301 MINE v Guinea Maritime International Nominees Establishment v Republic of Guinea (Case No ARB/84/4) Instrument invoked: Contract Decision on Provisional Measures (4 December 1985) (not public) . . . . . . . . . 26.17, 274–5, 47.38, 48, 60, 78, 147 Award (6 January 1988) (1997) 4 ICSID Reports 61 . . . . . . . 25.30, 770, 1184, 1201, 26.9, 17, 19, 171, 231, 274, 41.70, 42.39, 47.38, 48, 60, 147, 149, 49.14, 52.290, 492, 61.52, 57, 76, 62.16 Procedural Order No 1 (17 May 1988) (1997) 4 ICSID Reports 110 . . . . . . . . . . . . . . . . 44.63 Decision on Stay of Enforcement (12 August 1988) (1997) 4 ICSID Reports 111 . . . . 44.63, 52.716, 722, 730, 732, 1139, 738, 741, 744, 754, 766, 53.48, 60, 54.39 Decision on Annulment (22 December 1989) 25.30, 1201, 27.50, 41.170, 42.39, 55, 69, 180, 344, 44.25, 35, 48.45, 50, 56, 76, 85, 49.89, 52.3, 14, 24, 27, 28, 31, 44, 62, 78, 115, 205, 228, 245, 290, 334–5, 374, 426, 440, 466–8, 492–4, 516–17, 522, 528, 538, 548, 550, 576, 591–2, 610, 624–5, 631–2, 642, 655, 665, 698, 795, 802, 61.37, 76, 96, 118, 62.20, 63.21 Order on Discontinuance (20 November 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.106 Misima Mines v Papua New Guinea Misima Mines Pty Ltd v Independent State of Papua New Guinea (Case No ARB/96/2) Instrument invoked: Contract Order on Discontinuance (14 May 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 Mitchell v DR Congo Patrick Mitchell v Democratic Republic of the Congo (Case No ARB/99/7) Instrument invoked: DR Congo–United States BIT (1984) Award (w/ Diss Op Agboyibo) (9 February 2004) . . . . . . . . . . . 25.246, 261, 1116, 1490, 44.96, 48.116 Decision on Stay of Enforcement (30 November 2004) . . . . . . . 52.732, 738, 741, 747, 756, 776, 53.49, 64.5 Decision on Annulment (1 November 2006) . . . . . . . . Preamble.14, 25.8, 140, 185, 261–2, 1495, 44.102, 48.85, 52.13, 14, 15, 20, 34, 121, 122 202, 155, 165, 185, 189, 192, 227, 232, 448, 475–6, 531, 574, 596–7, 650, 658, 698, 722, 730, 61.37, 89, 96 Mobil Oil v New Zealand Mobil Oil Corporation and others v New Zealand (Case No ARB/87/2) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.23 Findings on Liability, Interpretation and Allied Issues (4 May 1989) (1997) 4 ICSID Reports 140 . . . . . . . . . . . . . . . . . . . . . . . . . . 26.258, 41.71, 42.55, 281, 44.22, 35, 48.29, 63.12, 28 Mobil v Argentina Mobil Exploration and Development Argentina Inc Suc Argentina and Mobil Argentina SA v Argentine Republic (Case No ARB/04/16) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction and Liability (10 April 2013) . . . . . . . . . . . . . . . . . . . . . 26.81, 42.155 Decision on Annulment (8 May 2019) . . . . . . . . . . . . . 14.14, 37.8, 52.135, 362, 53.21, 61.96 Mobil v Canada Mobil Investments Canada Inc v Canada (Case No ARB/15/6) Instrument invoked: NAFTA (1992)

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schreuer’s commentary on the icsid convention Decision on Jurisdiction (13 July 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.942 Procedural Order No 9 (Decision on Scope of Damages Phase) (11 December 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.47

Mobil v Venezuela (see also ! Venezuela Holdings v Venezuela) Mobil Corporation and others v Bolivarian Republic of Venezuela (Case No ARB/07/27) Instrument invoked: Investment Law (Venezuela 1999) Decision on Jurisdiction (10 June 2010) . . . . . . . . 25.73, 334, 377, 404, 710–12, 811, 1041, 1051, 1054, 1227, 1229, 1254, 1255, 41.11, 42.6, 8, 248, 54.77 MOL v Croatia MOL Hungarian Oil and Gas Company Plc v Republic of Croatia (Case No ARB/13/32) Instrument invoked: ECT (1994) Decision under Rule 41(5) (2 December 2014) . . . . . . . . . . . . . . . . 41.136, 138, 142, 146, 149 MTD v Chile MTD Equity Sdn Bhd and MTD Chile SA v Republic of Chile (Case No ARB/01/7) Instrument invoked: Chile–Malaysia BIT (1992) Award (25 May 2004) . . . . . . . . . 25.985, 1276, 1301, 36.38, 41.68, 124, 42.130, 146, 236, 316, 44.96, 56.14, 28, 60.15, 61.33 Decision on Stay of Enforcement (1 June 2005) . . . . . . . . . 52.721, 726, 730, 731, 732, 738, 741, 742, 749, 777, 790 Decision on Annulment (21 March 2007) . . . . . . . . . . 42.42, 152, 353, 43.32, 52.13, 14, 32, 111, 115, 122, 173, 189, 219, 252–3, 297, 383, 384, 450, 474, 477, 497, 574, 612, 698, 749, 763, 61.37, 41 Muhammet Ҫap v Turkmenistan Muhammet Ҫap & Bankrupt Sehil In¸saat Endustri ve Ticaret Ltd Sti. v Turkmenistan (Case No ARB/12/6) Instrument invoked: Turkey–Turkmenistan BIT (1992) Decision on Jurisdiction (13 February 2015) . . . . . . . . . . . . . . . . . . . . . . . 53.21, Final Clause.3 Procedural Order No 3 (12 June 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57.101, 61.103 Murphy v Ecuador Murphy Exploration and Production Company International v Republic of Ecuador (Case No ARB/08/4) Instrument invoked: Ecuador–United States BIT (1993) Award (w/ Diss Op Grigera Naón) (15 December 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.29 National Gas v Egypt National Gas SAE v Arab Republic of Egypt (Case No ARB/11/7) Instrument invoked: Egypt–UAE BIT (1997) Award (3 April 2014) . . . . . . 25.1056, 1267, 1271, 1276, 1321, 1330, 1347, 1356, 1358–9, 1379, 48.24, 52.69, 143, Final Clause.5 Nations Energy v Panama Nations Energy, Inc and others v Republic of Panama (Case No ARB/06/19) Instrument invoked: Panama–United States BIT (1982) Award (w/ Diss Op Chillón Medina) (24 November 2010) . . . . . . . . . . . . . . . . . . . . . . . 25.239 Decision on Disqualification (7 September 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.587, 58.3 Order on Costs (17 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5, 58.3, 61.89 Order on Discontinuance (15 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48

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NEPC v Bangladesh Power Development Board NEPC Consortium Power Ltd v Bangladesh Power Development Board (Case No ARB/18/15) Instrument invoked: Contract Decision on Jurisdiction (10 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 NextEra v Spain NextEra Energy Global Holdings BV and NextEra Energy Spain Holdings BV v Kingdom of Spain (Case No ARB/14/11) Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Quantum Principles (12 March 2019) . . . . . . . . 25.1020, 1108 Decision on Stay of Enforcement (6 April 2020) . . . . . . . . 52.19, 730, 731, 732, 738, 53.17, 63 Niko Resources v Bangladesh Niko Resources (Bangladesh) Ltd v Bangladesh Petroleum Exploration and Production Company Ltd (‘Bapex’) and Bangladesh Oil Gas and Mineral Corporation (‘Petrobangla’) (Case Nos ARB/10/11 and ARB/10/18) Instrument invoked: Contract Decision on Jurisdiction (19 August 2013) . . . . . . . . . 25.137, 139, 192, 199, 200, 239, 296, 444–6, 475, 523, 524, 526, 532, 536, 545, 546, 547, 548, 549, 550, 551, 552, 553, 554, 555, 556–7, 561, 562, 564, 566, 616, 637, 663–5, 770, 954, 1448, 1451, 1453, 1456, 1472, 26.207, 42.83, 84 Decision on Payment Claim (11 September 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.665 Decision on Implementation of Payment Claim (14 September 2015) . . . . . . . . . . . . . 47.239 Procedural Order No 18 (23 March 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43.71–3, 75 Decision on the Corruption Claim (25 February 2019) . . . . . . . . . . . . . . . 25.444–5, 43.89–90 Noble Energy v Ecuador Noble Energy Inc and Machala Power Cía Ltd v Republic of Ecuador and Consejo Nacional de Electricidad (Case No ARB/05/12) Instruments invoked: Contract; Ecuador–United States BIT (1993) Decision on Jurisdiction (5 March 2008) . . . . . . . . . 25.68, 84, 89, 239, 260, 276, 334, 338, 340, 541, 548, 570, 691, 771, 985, 1047, 1056, 1118, 1454, 1460, 1463, 26.199, 201, 41.106, 123, 42.14, 20, 222, 255, 43.52, 44.3, 20, 61, 53.24, 29, 55.109, 62.3, 63.11, 24, 28 Noble Ventures v Romania Noble Ventures, Inc v Romania (Case No ARB/01/11) Instrument invoked: Romania–United States BIT (1992) Award (12 October 2005) . . . . . . . . . . . 41.72, 42.236, 248, 43.13, 49, 60, 96, 106, 154, 156, 44.35, 64, 138, 49.72, 61.33 Decision on Rectification (19 May 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.72 Nova Group v Romania Nova Group Investments, BV v Romania (Case No ARB/16/19) Instrument invoked: Netherlands–Romania BIT (1994) Procedural Order No 7 (29 March 2017) . . . . . . 47.15, 42–3, 81, 101, 178, 187–90, 241, 63.6 Procedural Order No 8 (18 April 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.81 Occidental v Ecuador Occidental Petroleum Corporation and Occidental Exploration and Production Company v Republic of Ecuador (Case No ARB/06/11) Instruments invoked: Contract; Ecuador–United States BIT (1993)

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schreuer’s commentary on the icsid convention Decision on Provisional Measures (17 August 2007) . . . . . . . . 47.15, 16, 17, 24, 60, 72, 88, 93, 99, 201, 234–5, 61.106 Decision on Jurisdiction (9 September 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.129, 143–4 Award (w/ Diss Op Stern) (5 October 2012) . . . . . . . . . . . . . . . . . . . . . . . 25.311, 38.25, 42.248 Dissenting Opinion Stern (20 September 2012) . . . . . . . . . . . . 25.311, 675, 42.248, 48.119 Decision on Stay of Enforcement (30 September 2013) . . . . . . . . . . . . . . . . . . . . . 52.732, 54.30 Decision on Request to Modify the Decision on Stay (23 September 2014) . . . . . . . 52.738 Decision on Annulment (2 November 2015) . . . . . . . . . . . . 25.311–12, 316, 676, 754, 43.35, 48.50, 83, 119, 49.86, 52.13, 37, 155, 187, 189, 218, 429, 456, 468, 489, 613, 796

Occidental v Pakistan Occidental of Pakistan, Inc v Islamic Republic of Pakistan (Case No ARB/87/4) Instrument invoked: Contract Order on Discontinuance (27 January 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.12 OIEG v Venezuela OI European Group BV v Bolivarian Republic of Venezuela (Case No ARB/11/25) Instrument invoked: Netherlands–Venezuela BIT (1991) Award (10 March 2015) . . . . . . . . . 25.232, 239, 244, 245, 362, 405, 1490, 1499, 26.196–8, 340, 61.43, 48 Decision on Stay of Enforcement (4 April 2016) . . . . . . . . 52.731, 732, 742, 757, 760, 72.8 Decision on Disqualification (9 March 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.3 Decision on Annulment (6 December 2018) . . . . . .14.14, 37.8, 48.83, 51.17 32, 23, 52.14, 19, 39, 50, 130, 131, 132, 140, 201, 362, 56.14 OKO v Estonia OKO Pankki Oyj and others v Republic of Estonia (Case No ARB/04/6) Instruments invoked: Estonia–Germany BIT (1992); Estonia–Finland BIT (1992) Award (19 November 2007) . . . . . . . . 25.141, 239, 240, 260, 300, 463, 628, 827, 921, 942 Olguín v Paraguay Eudoro A Olguín v Republic of Paraguay (Case No ARB/98/5) Instrument invoked: Paraguay–Peru BIT (1994) Decision on Jurisdiction (8 August 2000) . . . . . . . . . . . . . . . . . . 25.1122, 56.27, 57.105, 58.20 Award (26 July 2001) . . . . . . . . . . . . . 25.180, 407, 851, 1116, 1121, 1122, 1142, 36.21, 38, 39.22–3, 41.122, 44.35, 56.27, 58.20, 61.31, 57 OperaFund v Spain OperaFund Eco-Invest SICAV Plc and Schwab Holding AG v Kingdom of Spain (Case No ARB/15/36) Instrument invoked: ECT (1994) Award (w/ Diss Op Sands) (6 September 2019) . . . . . . . . . 25.1020, 1089, 53.17, 30, 54.120 OPIC Karimum v Venezuela OPIC Karimum Corporation v Bolivarian Republic of Venezuela (Case No ARB/10/14) Instrument invoked: Investment Law (Venezuela 1999) Decision on Disqualification (5 May 2011) . . . . . . . . . . . . . . . . . . . . 57.38, 80, Final Clause.7 Award (w/ Diss Op Tawil) (28 May 2013) . . . . . . . . . . . . . . . . . . . . 25.812, 1041, 1053, 61.29 Orascom v Algeria Orascom TMT Investments Sàrl v People’s Democratic Republic of Algeria (Case No ARB/12/35) Instrument invoked: Algeria–BLEU BIT (1991) Award (31 May 2017) . . . . . . . 25.239, 240, 289, 337, 366, 374, 412, 417, 421, 679, 1229, 26.167, 185, 190–1, 61.33

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Decision on Annulment (17 September 2020) . . . . . . . . . . . . . 26.167, 48.83, 52.48, 372, 484, 598, 612 Ortiz v Algeria Ortiz Construcciones y Proyectos SA v People’s Democratic Republic of Algeria (Case No ARB/17/1) Instrument invoked: Algeria–Spain BIT (1994) Award (29 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.72 Pac Rim v El Salvador Pac Rim Cayman LLC v Republic of El Salvador (Case No ARB/09/12) Instruments invoked: Investment Law (El Salvador 1999); DR–CAFTA (2004) Decision on Preliminary Objections (2 August 2010) . . . . . . . . . . . . . . . 25.998, 41.130, 43.94 Decision on Jurisdiction (1 June 2012) . . . . . . . . . 25.26, 35, 713–15, 785, 942, 1039, 1051, 1053, 1108, 1109, 1255, 1257–9, 1260, 27.62–3, 41.11, 96, 111, 42.6 Award (14 October 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1039, 41.43, 65, 51.9, 53.41, 82 Decision on Supplementation and Rectification (28 March 2017) . . . . . . . . . . . . . . . 49.48, 80 Pan American v Argentina Pan American Energy LLC and BP Argentina Exploration Company v Argentine Republic (Case No ARB/03/13) and BP America Production Co and others v Argentine Republic (Case No ARB/04/8) Instrument invoked: Argentina–United States BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.20 Decision on Preliminary Objections (27 July 2006) . . . . . . . .25.24, 26, 68, 70, 76, 89, 127, 161, 284, 851, 857, 921, 985, 1262, 1322, 1325, 1335, 1347, 26.67, 80, 83, 202, 37.46, 41.96, 108, 42.18, 248, 252, 43.19, 158, 53.21 Pan American v Bolivia Pan American Energy LLC v Plurinational State of Bolivia (Case No ARB/10/8) Instrument invoked: Bolivia–United States BIT (1998) Order on Discontinuance (24 February 2015) 38.25, 41.138 Pantechniki v Albania Pantechniki SA Contractors & Engineers v Republic of Albania (Case No ARB/07/21) Instruments invoked: Albania–Greece BIT (1991); Investment Law (Albania 1993) Award (30 July 2009) . . . . . . . . . . . . . . . . . 25.232, 246, 271, 296, 703, 26.87, 88, 340, 37.26 Parkerings v Lithuania Parkerings-Compagniet AS v Republic of Lithuania (Case No ARB/05/8) Instrument invoked: Lithuania–Norway BIT (1992) Award (11 September 2007) . . . . . . . . 25.180, 284, 968, 26.146, 355, 36.38, 37.32, 41.124, 43.78, 44.140, 61.30, 31, 62.20, 63.11 Perenco v Ecuador Perenco Ecuador Ltd v Republic of Ecuador (Case No ARB/08/6) Instruments invoked: Contract; Ecuador–France BIT (1994) Decision on Provisional Measures (8 May 2009) . . . . . . . . . . . . . . . . . . . . 43.88, 47.26, 74, 90 Decision on Disqualification (8 December 2009) . . . . . . . . . . . . . . . . . . . . . 57.52, 92, 58.16–17 Decision on Jurisdiction (30 June 2011) . . . . . . . . . . 25.84, 93, 770, 955, 43.62, 57.2, 58.17 Decision on Remaining Issues of Jurisdiction and on Liability (12 September 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.316, 42.50–1, 72, 139, 142, 207, 44.83–4 Decision on Reconsideration (10 April 2015) . . . . . . . . . . . 41.42, 44.83–4, 48.66, 49.23, 28, 49, 53.40

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schreuer’s commentary on the icsid convention Interim Decision on Environmental Counterclaim (11 August 2015) . . . . . . . 43.60, 75, 138–9, 169, 46.8, 91 Decision on Counterclaims (18 August 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.169, 46.91 Award (27 September 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.24 Decision on Stay of Enforcement (21 February 2020) . . . . . . . . 52.730, 731, 738, 783, 784, 789, 53.63

Peru v Caravelí Republic of Peru v Caravelí Cotaruse Transmisora de Energía SAC (Case No ARB/13/24) Instrument invoked: Contract Order on Discontinuance (26 December 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.497 Petroceltic v Egypt Petroceltic Holdings Ltd and Petroceltic Resources Ltd v Arab Republic of Egypt (Case No ARB/19/7) Instrument invoked: Egypt–United Kingdom BIT (1975) Decision on Disqualification (4 June 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.78, 79 Pey Casado v Chile Victor Pey Casado and President Allende Foundation v Republic of Chile (Case No ARB/98/2) Instrument invoked: Chile–Spain BIT (1991) Decision on Provisional Measures (25 September 2001) . . . . . . . . 47.15, 16, 17, 22, 59, 67, 76, 129–30, 155, 196, 229, 246, 61.106 Decision on Jurisdiction (8 May 2002) Recommendation on Disqualification (17 February 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . 58.24 Decision on Disqualification (21 February 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.20 Procedural Order No 13 (24 October 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Procedural Order No 14 (22 November 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Award (8 May 2008) . . . . . . . . . . 25.178, 185, 239, 254, 269, 377, 450, 705–6, 1117, 1118, 1122, 1135, 1152, 1159, 1160, 26.84, 56.46, 57.46, 61.61 Decision on Stay of Enforcement (5 August 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.48 Decision on Revision (18 November 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.6, 8, 22, 23 Decision on Stay of Enforcement (7 May 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.732 Decision on Annulment (18 December 2012) . . . . . 25.377, 399, 706, 42.347, 48.70, 52.14, 41, 45, 111, 334, 346, 376, 382, 387, 400, 423, 576, 600, 698 Decision on Stay of Enforcement (16 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.62 Decision on Request for Supplementation of the Annulment Decision (11 September 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48.110, 61.110 Resubmitted Case: Award (13 September 2016) . . . . . . . . . . . . 25.740–1, 52.823, 61.61, 120 Resubmitted Case: Decision on Disqualification (21 February 2017) . . . . . . . . . 57.26, 58.24 Resubmitted Case: Decision on Disqualification (13 April 2017) . . . . . . . . . . . . . . 14.10, 58.5 Resubmitted Case: Decision on Rectification (6 October 2017) . . . . . . . . . . 49.45, 81–2, 110 Resubmitted Case: Decision on Stay of Enforcement (15 March 2018) Resubmitted Case: Decision on Annulment (w/ Conc Op Angelet) (8 January 2020) . . . . 14.14, 25.1116, 37.2, 8, 46.38, 51.38, 52.11, 14, 43, 72, 86, 101, 111, 135–6, 144, 359, 362, 558, 567, 660, 803, 805, 806, 811, 831, 61.41, 118 Pharaon v Tunisia Ghaith R Pharaon v Republic of Tunisia (Case No ARB/86/1) Instruments invoked: Contract; Investment Law (Tunisia 1969) Order on Discontinuance (21 November 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1116

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Philip Morris v Uruguay Philip Morris Brand Sàrl (Switzerland), Philip Morris Products SA (Switzerland) and Abal Hermanos SA (Uruguay) v Oriental Republic of Uruguay (Case No ARB/10/7) Instrument invoked: Switzerland–Uruguay BIT (1988) Decision on Jurisdiction (2 July 2013) . . . . . . . . . . . . 25.8, 62, 269, 277, 285, 296, 967, 987, 993, 995, 1473, 1492, 26.154, 325, 326, 41.86, 97, 103, 104, 111, 46.6, 45 Procedural Order No 3 (17 February 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.185 Procedural Order No 4 (24 March 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.185 Award (w/ Conc & Diss Op Born) (8 July 2016) . . . . . . . . . . 25.283, 451, 26.340, 42.14, 33, 236, 61.99 Decision on Rectification (26 September 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.38, 42, 72 Phoenix Action v Czech Republic Phoenix Action Ltd v Czech Republic (Case No ARB/06/5) Instrument invoked: Czech Republic–Israel BIT (1997) Award (15 April 2009) . . . . . . . . . . 25.8, 186, 232, 267, 289, 296, 339, 375, 405, 438, 447, 459, 465, 470–4, 708–9, 711, 718, 1253, 1255, 1260, 38.25, 41.111, 42.248, 49.72, 61.43, 45, 66 Pildegovics v Norway Peteris Pildegovics and SIA North Star v Kingdom of Norway (Case No ARB/20/11) Instrument invoked: Latvia–Norway (1992) Decision on Bifurcation (12 October 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.157 Ping An v Belgium Ping An Life Insurance Company of China, Ltd and Ping An Insurance (Group) Company of China, Ltd v Kingdom of Belgium (Case No ARB/12/29) Instruments invoked: BLEU–China BIT (1984 and 2005) Award (30 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.931, 939, 1016 PIP v Gabon Participaciones Inversiones Portuarias SARL v Gabonese Republic (Case No ARB/08/17) Instrument invoked: BLEU–Gabon BIT (1998) Decision on Disqualification (12 November 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.38, 82 Plama v Bulgaria Plama Consortium Ltd v Bulgaria (Case No ARB/03/24) Instruments invoked: Bulgaria–Cyprus BIT (1987); ECT (1994); Bulgaria–Finland BIT (1997) Decision on Jurisdiction (8 February 2005) . . . . . . . . . . . 25.321, 327, 851, 992, 1032, 1033, 1042, 1054, 1108, 1215, 26.320, 36.76, 41.24, 106, 123, 42.236, 252, 43.44–5, 111, 153 Decision on Provisional Measures (6 September 2005) . . . . . . . . . . . . 47.15, 17, 56, 86, 123, 169–72, 200, 232–3, 248 Award (27 August 2008) . . . . . . . . . . . . . . . . . . . . . . . 25.459, 465, 42.83, 61.43, 45, 48 97, 66 Planet Mining v Indonesia (see also ! Churchill and Planet Mining v Indonesia) Planet Mining Pty Ltd v Republic of Indonesia (Case No ARB/12/40) Instrument invoked: Australia–Indonesia BIT (1992) Decision on Jurisdiction (24 February 2014) . . . . . . . . . . . . 25.552, 649, 684, 776, 838, 904, 27.45, 37.46, 41.111 Pluspetrol v Perupetro Pluspetrol Perú Corporation and others v Perupetro SA (Case No ARB/12/28) Instrument invoked: Contract Award (21 May 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1448, 1468, 61.46

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PNB Banka v Latvia AS PNB Banka and others v Republic of Latvia (Case No ARB/17/47) Instrument invoked: Latvia–United Kingdom BIT (1994) Ruling on Power of Tribunal to Issue Provisional Measures Whilst Proceedings Are Suspended (24 September 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.27, 48.22 Decision on Disqualification (16 June 2020) . . . . . . . . . . . . 25.745, 42.28, 44.112, 57.14, 41, 48, 90 PNG Sustainable Development v Papua New Guinea PNG Sustainable Development Program Ltd v Independent State of Papua New Guinea (Case No ARB/13/33) Instrument invoked: Investment Law (Papua New Guinea 1992) Decision under Rule 41(5) (28 October 2014) . . . . . . . . . . . . . . . . . 41.135, 138, 145, 149, 192 Decision on Provisional Measures (21 January 2015) . . . . . . . . . . 43.88, 47.15, 29, 57, 91–2 Award (5 May 2015) . . . . . . . 25.807–8, 1039, 1053, 1487, 41.1, 149, 42.6, 9, 47.49, 61.79 Portigon v Spain Portigon AG v Kingdom of Spain (Case No ARB/17/15) Instrument invoked: ECT (1994) Decision on Jurisdiction (w/ Diss Op Sacerdoti) (20 August 2020) . . . . . . . . . . . .25.300, 428 Poštová banka v Greece Poštová banka, as and ISTROKAPITAL SE v Hellenic Republic (Case No ARB/13/8) Instruments invoked: Czech Republic–Greece BIT (1991); Cyprus–Greece BIT (1992) Award (9 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.256, 302, 356–8, 426 Decision on Annulment (29 September 2016) . . . . . . . . . . . . 52.14, 48, 205, 448, 574, 53.21 PSEG v Turkey PSEG Global Inc, The North American Coal Corporation, and Konya Ilgin Elektrik Üretim ve Ticaret Ltd Sirketi v Republic of Turkey (Case No ARB/02/5) Instrument invoked: Turkey–United States BIT (1985) Decision on Jurisdiction (4 June 2004) . . . . . . 25.140, 291, 298, 393, 1487, 1497–9, 1504, 1505, 36.38, 41.52, 123, 43.94, 144, 44.35, 132, 68.12 Award (19 January 2007) . . . . . . . . . . . 25.312, 388, 675, 41.122, 42.190, 43.137, 141, 151, 61.52, 96 PT Ventures v Cabo Verde PT Ventures, SGPS, SA v Republic of Cabo Verde (Case No ARB/15/12) Instrument invoked: Cabo Verde–Portugal BIT (1990) Procedural Order No 1 (30 November 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.96, 103 Quiborax v Bolivia Quiborax SA and Non-Metallic Minerals SA v Plurinational State of Bolivia (Case No ARB/06/2) Instrument invoked: Bolivia–Chile BIT (1994) Decision on Provisional Measures (26 February 2010) . . . . . . . . . . . . 47.16, 89, 110, 122–3, 179–80, 203, 236 Decision on Jurisdiction (27 September 2012) . . . . . . . . . . 25.185, 239, 240, 245, 255, 269, 285, 291, 376, 450, 456, 457, 458, 463, 477, 1335, 1347, 1409, 42.14, 33, 43.66 Award (w/ Part Diss Op Stern) (16 September 2015) . . . . . . . . 26.360–1, 41.41, 58, 42.140, 207, 245, 248, 318, 43.88, 123, 47.30, 50, 48.86, 57.89, 61.73, 96 Decision on Stay of Enforcement (21 February 2017) . . . . . . . . . . . . . . . . . . . . . . . .52.722, 726 Decision on Annulment (18 May 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.20, 238

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Raiffeisen Bank v Croatia Raiffeisen Bank International AG and Raiffeisenbank Austria dd v Republic of Croatia (Case No ARB/17/34) Instrument invoked: Austria–Croatia BIT (1997) Decision on Disqualification (17 May 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . 52.82, 57.82, 58.5 Decision on Jurisdiction (30 September 2020) . . . . . . . . . . . . . . . . . . . . . . . . 25.882, 1089, 41.2 Railroad Development Corp v Guatemala Railroad Development Corporation v Republic of Guatemala (Case No ARB/07/23) Instrument invoked: DR–CAFTA (2004) Decision on Provisional Measures (15 October 2008) . . . . . . . . . . . . . . . . . . . . . . . . . 47.13, 121 Decision on Jurisdiction (17 November 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.998 Second Decision on Jurisdiction (18 May 2010) . . . . . . . 25.69, 70, 72, 454, 465, 941, 942, 26.250–1, 41.123 Award (29 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.137, 61.53 Decision on Rectification (w/ Part Diss Op Eizenstat) (18 January 2013) . . . . 49.45, 47, 76 Rand Investments and others v Serbia Rand Investments Ltd and others v Republic of Serbia (Case No ARB/18/8) Instruments invoked: Cyprus–Serbia BIT (2005); Canada–Serbia BIT (2014) Decision on Bifurcation (w/ Diss Op Kohen) (24 June 2019) . . . . . . . . . . . . . . . . . . . . . 41.161 Red Eagle Exploration v Colombia Red Eagle Exploration Ltd v Republic of Colombia (Case No ARB/18/12) Instrument invoked: Canada–Colombia FTA (2008) Decision on Bifurcation (13 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41.157, 161 Renée Rose Levy v Peru Renée Rose Levy de Levi v Republic of Peru (Case No ARB/10/17) Instrument invoked: France–Peru BIT (1993) Award (w/ Diss Op Morales Godoy) (26 February 2014) . . . . . . . . . . 25.289, 378, 705, 719, 45.4, 48.61 Order on Discontinuance (24 September 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Repsol v Argentina Repsol, SA and Repsol Butano, SA v Argentine Republic (Case No ARB/12/38) Instrument invoked: Argentina–Spain BIT (1991) Decision on Disqualification (13 December 2013) . . . . . . . . . . . . . . 14.9, 40.24, 57.41, 47, 73 Repsol v Petroecuador Repsol YPF Ecuador SA v Empresa Estatal Petroleos del Ecuador (Petroecuador) (Case No ARB/01/10) Instrument invoked: Contract Award (20 February 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.548, 639 Decision on Stay of Enforcement (22 December 2005) . . . . . . . . . . . . . 52.730, 738, 743, 773 Procedural Order No 4 (22 February 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.773–5 Decision on Annulment (8 January 2007) . . . . . . . . . . . 42.42, 52.14, 51, 111, 155, 166, 193, 210, 254, 333, 414, 574, 698, 722, 61.37 Repsol and others v Ecuador and PetroEcuador Repsol YPF Ecuador SA and others v Republic of Ecuador and Empresa Estatal Petroleos del Ecuador (PetroEcuador) (Case No ARB/08/10) Instrument invoked: Ecuador–Spain BIT (1996)

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schreuer’s commentary on the icsid convention Order on Discontinuance (9 February 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.548, 38.25

Reynolds v Jamaica Reynolds Jamaica Mines Ltd and Reynolds Metals Company v Jamaica (Case No ARB/ 74/4) Instrument invoked: Contract Order on Discontinuance (12 October 1977) . . . . . . . . . . . . . . . . . . . . . . 25.1069, 1496, 26.204 RFCC v Morocco Consortium RFCC v Kingdom of Morocco (Case No ARB/00/6) Instrument invoked: Italy–Morocco BIT (1990) Decision on Jurisdiction (16 July 2001) . . . . . 25.181, 244, 249, 254, 260, 276, 26.151, 204 Award (22 December 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.122, 61.32, 33 Decision on Annulment (18 January 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.14, 48, 53.82 Rios v Chile Carlos Rios and Francisco Javier Rios v Republic of Chile (Case No ARB/17/16) Instrument invoked: Chile–Colombia FTA (2006) Procedural Order No 2 (16 February 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 Rizvi v Indonesia Rafat Ali Rizvi v Republic of Indonesia (Case No ARB/11/13) Instrument invoked: Indonesia–United Kingdom BIT (1976) Award (w/ Sep Conc Op Sornarajah) (16 July 2013) . . . . . . . . . . 25.1116, 41.138, 157, 169, 48.116 Separate Concurring Opinion Sornarajah (16 July 2013) . . . . . . . . . . . . . . . . . . . . . . . . 48.116 Order on Discontinuance (4 May 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Rizzani v Kuwait Rizzani de Eccher SpA, Obrascón Huarte Lain SA and Trevi SpA v State of Kuwait (Case No ARB/17/8) Instruments invoked: Italy–Kuwait BIT (1987); Kuwait–Spain BIT (2005) Decision on Provisional Measures (23 November 2017) . . . . . . . . . . . . . . . . . . . . . . . . 47.84, 91 Rompetrol v Romania The Rompetrol Group NV v Romania (Case No ARB/06/3) Instrument invoked: Netherlands–Romania BIT (1994) Decision on Jurisdiction (18 April 2008) . . . . . . . . . . . . . . . . . . 25.7, 405, 1187, 1224–6, 1244 Decision on Participation of Counsel (14 January 2010) . . . . . . . . . . . . . . . . . 44.120–56, 56.7 Award (6 May 2013) . . . . . . . . . . . . . . . . . . . . . . . 25.151, 674, 26.340, 43.20, 152, 156, 61.33 Roussalis v Romania Spyridon Roussalis v Romania (Case No ARB/06/1) Instrument invoked: Greece–Romania BIT (1997) Award (w/ Decl Reisman) (7 December 2011) . . . . . . . . . . . . . . . 25.161, 974, 26.340, 38.25, 42.52, 157, 43.60, 46.103 Declaration Reisman (28 November 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.103 RREEF v Spain RREEF Infrastructure (GP) Ltd and RREEF Pan-European Infrastructure Two Lux Sàrl v Kingdom of Spain (Case No ARB/13/30) Instrument invoked: ECT (1994) Decision on Jurisdiction (6 June 2016) . . . . . . . . . . . . 25.180, 254, 362, 366, 379, 410, 421, 987, 41.104, 157, 53.16

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Decision on Responsibility and Principles of Quantum (w/ Part Diss Op Volterra) (30 November 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.190 Award (11 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.331, 410 RSM v Cameroon RSM Production Company v Republic of Cameroon (Case No ARB/13/14) Instrument invoked: Contract Order on Discontinuance (19 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.12 RSM v Central African Republic RSM Production Corporation v Central African Republic (Case No ARB/07/2) Instrument invoked: Contract Award (11 July 2011) . . . . . . . . . . . . . . . . . . . . . . . 18.5, 20.2, 25.199, 239, 267, 28.12, 48.132 Decision on Annulment (20 February 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.5, 20.2, 52.48 RSM v Grenada I RSM Production Corporation v Grenada (Case No ARB/05/14) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.58 Award (13 March 2009) . . . . . . . 25.142, 185, 192, 194, 199, 200, 239, 260, 276, 277, 280, 392, 476, 770, 28.12 Order on Discontinuance (28 April 2011) . . . . . . . . . . . . . . . 45.49, 61, 66, 52.48, 61.102, 113 RSM v Grenada II RSM Production Corporation and others v Grenada (Case No ARB/10/6) Instrument invoked: Grenada–United States BIT (1986) Decision on Security for Costs (14 October 2010) . . . . . . . . . . . . . . . . . . . . . 47.15, 134, 61.106 Award (10 December 2010) . . . . . . 28.12, 41.135, 138, 142, 144, 148, 150, 51.28, 61.45, 107 RSM v St Lucia RSM Production Corporation v Saint Lucia (Case No ARB/12/10) Instrument invoked: Contract Decision on Provisional Measures (12 December 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.15 Decision on Security for Costs (w/ Sep Op Griffith and Diss Op Nottingham) (13 August 2014) . . . . . . . . . . . . . . . . . . . . . . . . . 47.89, 109, 136–9, 238, 54.31, 57.101, 61.106, 107–8 Assenting Reasons Griffith (12 August 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.107–8 Decision on Disqualification (23 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.84–6 Award (w/ Sep Op Griffith) (15 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.12 Decision on Annulment (29 April 2019) . . . . . 14.14, 37.8, 44.89, 47.32, 52.19, 20, 23, 37, 72, 111, 134, 193, 53.82, 54.31 Decision on Rectification (23 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.148 Rumeli v Kazakhstan Rumeli Telekom AS and Telsim Mobil Telekomunikasyon Hizmetleri AS v Republic of Kazakhstan (Case No ARB/05/16) Instrument invoked: Kazakhstan–Turkey BIT (1992); Investment Law (Kazakhstan 1994) Award (29 July 2008) . . . . . . . . 25.212, 457, 458, 459, 582, 899, 1083, 1262, 52.27, 61.56 Decision on Annulment (25 March 2010) . . . . . . . . . . . . . 52.14, 44, 442, 453, 474, 598, 783 RWE v Spain RWE Innogy GmbH and RWE Innogy Aersa SAU v Kingdom of Spain (Case No ARB/14/34) Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Certain Issues of Quantum (30 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.121

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Saba Fakes v Turkey Saba Fakes v Republic of Turkey (Case No ARB/07/20) Instrument invoked: Netherlands–Turkey BIT (1986) Award (14 July 2010) . . . . . . . . . 25.185, 239, 246, 268, 309, 375, 449, 456, 457, 459, 463, 477, 1122, 1124–5, 1143, 1150, 1152, 42.327, 61.45, 66 Safa v Greece Iskandar Safa and Akram Safa v Hellenic Republic (Case No ARB/16/20) Instrument invoked: Greece–Lebanon (1997) Decision on Disqualification (7 March 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.78 Saint Patrick Properties v Venezuela Saint Patrick Properties Corporation v Bolivarian Republic of Venezuela (Case No ARB/ 16/40) Instrument invoked: Barbados–Venezuela (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.16 Saint-Gobain v Venezuela Saint-Gobain Performance Plastics Europe v Bolivarian Republic of Venezuela (Case No ARB/12/13) Instrument invoked: France–Venezuela BIT (2001) Decision on Disqualification (27 February 2013) . . . . . . . . . 14.8, 57.38, 47, Final Clause.7 Decision on Liability and Principles of Quantum (30 December 2016) . . . . . . . 25.857, 26.146, 41.68, 72.17, 29 Award (3 November 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.97 Procedural Order No 2 (24 October 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.6 Saipem v Bangladesh Saipem SpA v People’s Republic of Bangladesh (Case No ARB/05/7) Instrument invoked: Bangladesh–Italy BIT (1990) Decision on Disqualification (11 October 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.14, 57.60 Decision on Jurisdiction and Provisional Measures (21 March 2007) . . . . . . . . 25.24, 83, 89, 141, 149, 181, 239, 244, 250, 260, 304, 409, 454, 851, 979, 26.146, 177, 354, 33.33, 36.21, 37.7, 40.24, 41.52, 68, 110, 122, 42.14, 245, 248, 255, 264, 43.156, 158, 44.35, 47.15, 16, 17, 60, 61, 87, 53.24 Award (30 June 2009) . . . . . . . . . . . . . . . . . . . . . . . . . 26.354, 41.122, 42.236, 53.21, 24, 61.29 Salini v Jordan Salini Construttori SpA and Italstrade SpA v Hashemite Kingdom of Jordan (Case No ARB/02/13) Instrument invoked: Italy–Jordan BIT (1996) Decision on Jurisdiction (29 November 2004) . . . . . . . . . 25.970, 26.129, 36.21, 38, 41.106, 123, 42.236, 43.94, 56.27, 57.83, 58.20 Award (31 January 2006) . . . . . . . . . . . . . . . . . . . . . . 41.122, 42.248, 43.156, 61.33, 96, 63.26 Salini v Morocco Salini Construttori SpA and Italstrade SpA v Kingdom of Morocco (Case No ARB/00/4) Instrument invoked: Italy–Morocco BIT (1990) Decision on Jurisdiction (23 July 2001) . . . . . . . . . . . 25.182–3, 236–41, 249, 255, 259, 275, 453, 527, 851, 968, 985, 26.104–5, 151, 204 Salini Impregilo v Argentina Salini Impregilo SpA v Argentine Republic (Case No ARB/15/39) Instrument invoked: Argentina–Italy BIT (1990) Decision on Jurisdiction (23 February 2018) . . . . . . . . .25.63, 288, 289, 678, 679, 947, 995, 998, 26.98–9, 41.123

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Santa Elena v Costa Rica Compañía del Desarrollo de Santa Elena SA v Republic of Costa Rica (Case No ARB/96/1) Instrument invoked: Contract Award (17 February 2000) . . . . . . . . . . . . . . . 25.98, 103, 283, 770, 1271, 27.58, 37.7, 41.68, 72, 42.46, 245, 293, 43.19, 111, 168, 171, 44.20, 61.29 Decision on Rectification (8 June 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.45, 55–7, 61.110 SAUR v Argentina SAUR International v Argentine Republic (Case No ARB/04/4) Instrument invoked: Argentina–France BIT (1991) Decision on Jurisdiction (27 February 2006) . . . . . . . . . . . . . . . . . . . . 25.123, 289, 466, 41.123 Decision on Jurisdiction and Liability (6 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.466 Award (22 May 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.52 Decision on Annulment (19 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.40 Scimitar v Bangladesh Scimitar Exploration Ltd v Bangladesh and Bangladesh Oil, Gas and Mineral Corporation (Case No ARB/92/2) Instrument invoked: Contract Award (4 May 1994) (2002) 5 ICSID Reports 4 . . . . . . . 25.548, 566, 36.28, 39.16, 41.127, 42.22, 44.115, 45.10, 27, 28, 85, 48.103, 61.46 SEEG v Gabon Société d’Energie et d’Eau du Gabon and Veolia Africa v Gabonese Republic and Société de Patrimoine du service public de l’eau potable, de l’énergie électrique et de l’assainissement (Case No ARB/18/36) Instrument invoked: Contract Award (29 March 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.546, 28.12, 34.20, 48.107 SEMOS v Mali Société d’Exploitation des Mines d’Or de Sadiola SA v Republic of Mali (Case No ARB/ 01/5) Instrument invoked: Contract Award (25 February 2003) (2006) 10 ICSID Reports 116 . . . . . . . . . . . 25.191, 199, 42.181, 210, 44.20, 61.17 Sempra v Argentina Sempra Energy International v Argentine Republic (Case No ARB/02/16) Instrument invoked: Argentina–United States BIT (1991) Decision on Jurisdiction (11 May 2005) . . . . . . . . . . 25.72, 89, 98, 161, 285, 289, 336, 344, 347, 851, 1193, 1262, 1300, 1301, 1365–7, 1403, 26.80, 129, 205, 27.13, 37.46, 38.5, 26, 41.123, 42.14, 236, 245 Award (w/ Part Diss Op Lalonde) (28 September 2007) . . . . . . . . . . 22.10, 25.24, 140, 300, 36.38, 40.24, 41.122, 42.155, 245, 266, 317, 43.60, 75, 119, 137, 139, 44.140, 46.17, 47.18, 116, 48.104, 57.89, 58.22, 61.29, 74, 62.20, 63.11 Decision on Stay of Enforcement (5 March 2009) . . . . . . . 52.722, 731, 732, 738, 742, 751, 754, 763, 793, 1122, 1137, 53.44, 46, 54.30, 107 Decision on Annulment (29 June 2010) . . . . . . . . . . . . . . . . . . . 14.14, 37.8, 48.50, 52.14, 659 Resubmitted Case: Order on Discontinuance (3 April 2015) . . . . . . . . . . . . . . . . . . . . . . 52.803 SGS v Pakistan SGS Société Générale de Surveillance SA v Islamic Republic of Pakistan (Case No ARB/01/13) Instrument invoked: Pakistan–Switzerland BIT (1995)

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Procedural Order No 2 (16 October 2002) (2005) 8 ICSID Reports 388 . . . . . . . . . . . 26.231, 260–3, 44.63, 47.15, 16, 17, 57, 68, 79, 157–63, 176, 197 Decision on Disqualification (19 December 2002) . . . . . . . . . . . . . . . . . . . . . . . 14.24, 57.37, 59 Decision on Jurisdiction (6 August 2003) . . . . . . . . . . . Preamble.20, 25.181, 213, 240, 291, 296, 424, 429, 857, 921, 986, 1054, 26.77, 115–17, 148–9, 172–3, 260–3, 27.61, 29.969–70, 37.61, 41.21, 27, 102, 123, 42.248, 46.101, 47.222, 53.22 SGS v Paraguay SGS Société Générale de Surveillance SA v Republic of Paraguay (Case No ARB/07/29) Instrument invoked: Paraguay–Switzerland BIT (1992) Decision on Jurisdiction (12 February 2010) . . . . . . . . . 25.146, 431, 454, 851, 966, 26.129, 137, 145, 152–3, 158, 41.109, 53.21 Award (10 February 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.947, 26.129, 137–8, 61.30 Decision on Stay of Enforcement (22 March 2013) . . . . . . . . . . . . 52.726, 732, 53.62, 69.14 Decision on Annulment (19 May 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.14, 162, 477 SGS v Philippines SGS Société Générale de Surveillance SA v Republic of the Philippines (Case No ARB/02/6) Instrument invoked: Philippines–Switzerland BIT (1997) Decision on Jurisdiction (w/ Decl Crivellaro) (29 January 2004) . . . . . . . . . 25.63, 146, 180, 396, 424, 430, 526, 851, 936, 938, 942, 968, 971, 1448, 26.122–8, 150, 36.73, 77, 38.5, 41.28, 106, 123, 42.248, 252, 253, 44.65, 48.136, 53.22 Order on Further Proceedings (17 December 2007) . . . . . . . . . . . . . . . . . . . . . . . . 25.89, 26.128 Shell v Nigeria Shell Nigeria Ultra Deep Ltd v Federal Republic of Nigeria (Case No ARB/07/18) Instrument invoked: Netherlands–Nigeria BIT (1992) Order on Discontinuance (1 August 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.25 Siag v Egypt Waguih Elie George Siag and Clorinda Vecchi v Arab Republic of Egypt (Case No ARB/05/15) Instrument invoked: Egypt–Italy BIT (1989) Decision on Jurisdiction (w/ Part Diss Op Orrego Vicuña) (11 April 2007) . . . . Preamble.12, 25.405, 1116, 1118, 1128, 1136, 1152, 1154–6, 1167, 36.21, 37.33, 41.106, 123, 42.16, 248, 43.158, 44.140 Partial Dissenting Opinion of Orrego Vicuña (11 April 2007) . . . . . . . . . . . . . . . . . . 21.1156 Award (w/ Diss Op Orrego Vicuña) (1 June 2009) . . . . . . . . . 16.56, 25.731, 743, 41.41.58, 56, 122, 43.156, 44.67, 61.99 Siemens v Argentina Siemens AG v Argentine Republic (Case No ARB/02/08) Instrument invoked: Argentina–Germany BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.47 Decision on Jurisdiction (3 August 2004) . . . . . . . . . . . . . . 25.70, 72, 79, 125, 334, 335, 337, 347, 920, 985, 990, 996, 1030, 26.129, 319, 321, 41.58, 107, 122–3, 169, 42.12, 155, 236, 311, 43.95, 144, 57.60, 58.21, 61.54, 56 Award (w/ Sep Op Bello Janeiro) (6 February 2007) . . . . . . . 25.98, 678, 968, 40.24, 41.58, 122, 42.122–3, 155, 311, 43.57, 85, 95, 144, 52.16, 57.60, 58.21, 61.54, 56 Order on Discontinuance (9 September 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.8, 16 SIREXM v Burkina Faso Société d’Investigation de Recherche et d’Exploitation Minière v Burkina Faso (Case No ARB/97/1) Instrument invoked: Contract Award (19 January 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.140

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SOABI v Senegal Société Ouest Africaine des Bétons Industriels v Senegal (Case No ARB/82/1) Instrument invoked: Contract Decision on Jurisdiction (w/ Decl Broches) (1 August 1984) . . . . . . . . . 25.954, 1046, 1061, 1186, 1189, 1267, 1271, 1312–14, 1333, 1352–3, 1373–4, 1385, 1409, 1416–17, 1441– 2, 38.9, 10, 39.31–4, 41.52, 44.35, 48.43, 56.29 Declaration Broches (1 August 1984) . . . . . . . . . 25.1314, 1333, 1352, 1373, 1442, 37.45, 39.34, 48.117 Award (w/ Diss Op Mbaye) (25 February 1988) (1994) 2 ICSID Reports 190 . . . . . . 25.137–9, 678, 1002, 1046, 1047, 1312–14, 26.62, 38.9–10, 39.32, 33, 34, 41.21, 122, 123, 42.7, 93, 113, 203–4, 210, 219, 282, 43.45, 48, 81, 95, 139, 140, 156, 165, 44.96, 46.24, 77, 48.23, 116, 117, 120, 54.63–5, 83, 55.47–8, 56.27, 29, 60.12, 61.33, 71, 96, 63.13 Dissenting Opinion Mbaye (25 February 1988) . . . . . . 25.1189, 1314, 1352, 1373, 1442, 39.34, 41.21, 42.219, 351, 48.116 Société Civile Immobilière de Gaëta v Guinea Société Civile Immobilière de Gaëta v Republic of Guinea (Case No ARB/12/36) Instrument invoked: Investment Law (Guinea 1987) Award (21 December 2015) . . . . . . . . . . . . . 25.211, 231, 239, 244, 245, 255, 260, 277, 308, 375, 378, 404, 405, 414, 464 Société Industrielle des Boissons v Guinea Société Industrielle des Boissons de Guinée v Republic of Guinea (Case No ARB/12/8) Instruments invoked: Contract; Investment Law (Guinea 1987) Award (21 May 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1330, 1347 Société Resort Company Invest Abidjan v Côte d’Ivoire Société Resort Company Invest Abidjan, Stanislas Citerici and Gérard Bot v Côte d’Ivoire (Case No ARB/16/11) Instrument invoked: Investment Law (Côte d’Ivoire 2012) Decision on Jurisdiction (w/ Diss Op Hobér) (1 August 2017) . . . . . . . . . . . . 25.821–2, 41.157 Dissenting Opinion Hobér (1 August 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.822 SolEs Badajoz v Spain SolEs Badajoz GmbH v Kingdom of Spain (Case No ARB/15/38) Instrument invoked: ECT (1994) Award (31 July 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.242, 49.101, 58.20 Decision on Rectification (5 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.101 Soufraki v UAE Hussein Nuaman Soufraki v United Arab Emirates (Case No ARB/02/7) Instrument invoked: Italy–UAE BIT (1995) Award (7 July 2004) . . . . . . . . . . . . . . . . 25.236, 1118, 1119–20, 1122, 1128, 1129–32, 1203, 1229, 41.127, 42.16, 43.147, 156, 48.24, 52.69, 192, 199, 61.54 Decision on Annulment (w/ Sep & Diss Op Nabulsi) (5 June 2007) . . . . . . .25.1116, 1118, 1119–20, 1128, 1133–4, 41.2, 42.42, 48.49, 66, 116, 120, 126, 52.14, 19, 20, 21, 26, 32, 43, 48, 111, 122, 151, 162, 174, 189, 192, 198–9, 211–12, 234, 237, 255–8, 407, 408, 435, 437, 449, 456, 457, 478, 564, 574, 576, 597, 612, 642, 701, 704, 722, 790, 61.37 Dissenting Opinion Nabulsi (5 June 2007) . . . . . . . . . . . . . . . . . . . . 52.255, 258, 48.116, 126 Rectification of the Annulment Decision (13 August 2007) . . . . . . . . . . . . . . . . . . . . . 49.27, 72 Spentex v Uzbekistan Spentex Netherlands, BV v Republic of Uzbekistan (Case No ARB/13/26)

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Instruments invoked: Contract; Netherlands–Uzbekistan BIT (1996); Investment Law (Uzbekistan 1998) Award (27 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.465, 61.68 SPP v Egypt Southern Pacific Properties (Middle East) Ltd v Arab Republic of Egypt (Case No ARB/84/3) Instrument invoked: Investment Law (Egypt 1974) Decision on Jurisdiction I (27 November 1985) (1995) 3 ICSID Reports 112 . . . . . . . 25.34, 698, 790–2, 818–19, 914, 959, 1079–80, 1185, 26.48–51, 36.54, 37.58, 39.21, 41.29, 52, 68, 85, 123, 177, 42.248, 44.35, 61, 46.59, 48.43, 70.10 Decision on Jurisdiction II (w/ Diss Op El Mahdi) (14 April 1988) (1995) 3 ICSID Reports 131 . . . . . . . . . 25.34, 765, 791, 1040, 1049, 1185, 1487, 26.51, 36.27, 54, 41.6, 29, 46, 42.6, 7, 48.43, 52.73, 106, 70.10 Dissenting Opinion El Mahdi (14 April 1988) . . . . . . . . 25.34, 698, 792, 914, 959, 1185, 36.27, 42.7, 46.59, 48.124 Award (w/ Diss Op El Mahdi) (20 May 1992) . . . . . . . . . . . 25.98, 291, 678, 699, 36.27, 54, 37.46, 39.21, 41.22, 36, 122, 42.58, 100–2, 153, 161–4, 237, 245, 248, 290, 43.48, 95, 143, 44.57, 64, 46.31, 53, 59–61, 95, 48.116, 61.48, 62.20, 63.21 Dissenting Opinion El Mahdi (20 May 1992) . . . . . . 25.959, 36.27, 41.117, 42.100, 193, 230, 258, 46.60, 48.116 Order on Discontinuance (9 March 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.722 Stadtwerke München v Spain Stadtwerke München GmbH, RWE Innogy GmbH, and others v Kingdom of Spain (Case No ARB/15/1) Instrument invoked: ECT (1994) Award (w/ Diss Op Hobér) (2 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . 25.587, 61.32, 34 Standard Chartered Bank (Hong Kong) v Tanzania Standard Chartered Bank (Hong Kong) Ltd v United Republic of Tanzania (Case No ARB/ 15/41) Instrument invoked: Contract Decision on Bifurcation (11 October 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.161 Award (11 October 2019) . . . . . . . . . . . 25.192, 195, 199, 200, 239, 248, 250, 260, 277, 300, 370–1, 687, 41.161 Standard Chartered Bank v TANESCO Standard Chartered Bank (Hong Kong) Ltd v Tanzania Electric Supply Company Ltd (‘TANESCO’) (Case No ARB/10/20) Instrument invoked: Contract Decision on Bifurcation (29 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.162, 166, 44.75 Decision on Jurisdiction and Liability (12 February 2014) . . . . . . . . . 25.199, 300, 371, 548, 687, 1455 Award (12 September 2016) . . . . . . . . . . . . . . . . . . . . . . 41.43–5, 44.86, 51.6, 53.40, 82, 54.31 Decision on Stay of Enforcement (17 April 2017) . . . . . . . . . . . . . 52.688, 696, 738, 739, 757 Decision on Annulment (22 August 2018) . . . . . . 41.2, 43–5, 65, 42.42, 44.87, 48.83, 51.6, 9, 52.14, 155, 159, 183, 291, 308, 392, 456, 483, 53.40 Standard Chartered Bank v Tanzania Standard Chartered Bank v United Republic of Tanzania (Case No ARB/10/12) Instrument invoked: Tanzania–United Kingdom BIT (1994) Award (2 November 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.363–4, 61.29

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Staur Eiendom v Latvia Staur Eiendom AS, EBO Invest AS and Rox Holding AS v Republic of Latvia (Case No ARB/ 16/38) Instrument invoked: Latvia–Norway BIT (1992) Award (28 February 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26.129, 42.245 STEAG v Spain STEAG GmbH v Kingdom of Spain (Case No ARB/15/4) Instrument invoked: ECT (1994) Decision on Jurisdiction, Liability and Directions on Quantum (8 October 2020) . . . . . 42.5 Suez and others v Argentina Suez, Sociedad General de Aguas de Barcelona SA, and InterAguas Servicios Integrales del Agua SA v Argentine Republic (Case No ARB/03/17) Instruments invoked: Argentina–France BIT (1991); Argentina–Spain BIT (1991) Order on Amicus Curiae Petition (17 March 2006) . . . . . . . . . . . . . . . . . . . . . . . 44.148, 179–80 Procedural Order No 1 (14 April 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Decision on Jurisdiction (16 May 2006) 25.68, 69, 70, 91, 127, 161, 284, 826, 996, 1030, 1050, 1270, 26.129, 321, 38.26, 42.252, 48.104, 53.21, 62.16 Decision on Disqualification (22 October 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.23, 37 Decision on Disqualification (12 May 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.8, 38, 49, 82 Decision on Liability (w/ Sep Op Nikken) (30 July 2010) . . . . . . . . . . . . . . . . . . . 25.973, 27.3 Decision on Annulment (14 December 2018) . . . . . . . . . . . . . . . . . . . 14.14, 37.8, 52.111, 181 Suez and Vivendi v Argentina (see also ! AWG v Argentina (UNCITRAL)) Suez, Sociedad General de Aguas de Barcelona SA, and Vivendi Universal SA v Argentine Republic (formerly Aguas Argentinas, SA, Suez, Sociedad General de Aguas de Barcelona, SA and Vivendi Universal, SA v Argentina Republic) (Case No ARB/ 03/19) Instruments invoked: Argentina–France BIT (1991); Argentina–Spain BIT (1991) Order on Transparency and Amicus Curiae Petition (19 May 2005) . . . . . . . . . . . 44.66, 148, 179, 180 Procedural Order No 1 (14 April 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Decision on Jurisdiction (3 August 2006) . . . . . . . . . . . 25.284, 826, 1054, 26.145, 206, 321, 37.46, 58, 38.27, 44.17, 63, 48.104 Procedural Order No 2 (3 August 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Order on Amicus Curiae Petition (12 February 2007) . . . . . . . . . . . . . . . . . . . . . . . .44.179, 180 Decision on Disqualification (22 October 2007) . . . . . . . . . . . . . 40.29, 57.23, Final Clause.7 Decision on Disqualification (12 May 2008) Decision on Liability (w/ Sep Op Nikken) (30 July 2010) . . . . . . . . 25.98, 974, 37.3, 42.30, 123, 190, 256, 44.66, 76 Separate Opinion Nikken (30 July 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.3 Decision on Annulment (5 May 2017) 14.14, 25.1030, 37.8, 41.2, 52.12, 32, 39, 42, 43, 46, 133, 158, 183, 233, 344, 346, 362, 441, 442, 791, 57.82, Final Clause.7 Sumrain v Kuwait Ayat Nizar Raja Sumrain and others v State of Kuwait (Case No ARB/19/20) Instrument invoked: Egypt–Kuwait BIT (2001) Decision on Joinder (5 October 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.69 Supervisión y Control v Costa Rica Supervisión y Control SA v Republic of Costa Rica (Case No ARB/12/4) Instrument invoked: Costa Rica–Spain BIT (1997)

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Award (w/ Diss Op Klock) (18 January 2017) . . . . . . 25.988, 998, 26.90, 36.22, 41.13, 67, 87, 97, 99, 101, 48.36, 116 Swiss Aluminium v Iceland Swiss Aluminium Limited and Icelandic Aluminium Company Limited v Iceland (Case No ARB/83/1) Instrument invoked: Contract Order on Discontinuance (6 March 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.770 Swisslion v North Macedonia Swisslion DOO Skopje v Macedonia, former Yugoslav Republic of (Case No ARB/09/16) Instruments invoked: North Macedonia–Serbia BIT (1996); North Macedonia–Switzerland BIT (1996) Award (6 July 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1362, 36.77, 43.18, 59, 60, 61.56 TANESCO v IPTL Tanzania Electric Supply Company Ltd v Independent Power Tanzania Ltd (Case No ARB/ 98/8) Instrument invoked: Contract Decision on Provisional Measures (20 December 1999) . . . . . . . . . . . . . . . . . . . . 47.15, 58, 85 Award (12 July 2001) . . . . . . . . . 16.243, 25.523, 569, 954, 1273, 1315, 1342, 1447, 1455, 1460, 1463, 37.33, 41.68, 42.49, 44.22 23, 29, 46.25, 47.15, 85, 48.28, 61.33, 63.11 TECO v Guatemala TECO Guatemala Holdings, LLC v Republic of Guatemala (Case No ARB/10/23) Instrument invoked: DR–CAFTA (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.143 Award (19 December 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.289, 41.124 Decision on Stay of Enforcement (10 February 2015) . . . . . . . . . . . . . . . . . . . . . . 53.72, 54.138 Decision on Annulment (5 April 2016) . . . . . . . . . . . . . . . 42.42, 52.375, 447, 453, 541, 632, 61.36, 41, 96 Resubmitted Case: Award (13 May 2020) . . . . . . . . . . . . . . . . . . . . . . . 52.803, 806, 838, 61.33 Resubmitted Case: Decision on Supplementation (16 October 2020) . . . . . . . . 49.75, 52.803 Teinver v Argentina Teinver SA, Transportes de Cercanías SA and Autobuses Urbanos del Sur SA v Argentine Republic (Case No ARB/09/1) Instrument invoked: Argentina–Spain BIT (1991) Decision on Jurisdiction (w/ Sep Op Hossain) (21 December 2012) . . . . . 25.53, 61, 63, 70, 73, 89, 334, 344, 347, 348, 355, 457, 463, 678, 739, 897, 987, 993, 995, 1030, 26.326, 41.86, 123, 42.14, 61.101 Decision on Provisional Measures (8 April 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . 22.14, 47.175 Award (w/ Diss Op Hossain) (21 July 2017) . . . . . . 25.739, 41.122, 46.7, 51, 61.101, 62.16 Decision on Annulment (29 May 2019) . . . . . . . . . . . . . . . . . . 25.271, 43.37, 52.37, 233, 314 Telefónica v Argentina Telefónica SA v Argentine Republic (Case No ARB/03/20) Instrument invoked: Argentina–Spain BIT (1991) Decision on Jurisdiction (25 May 2006) . . . . . . . . . . . . .25.92, 105, 127, 151, 161, 344, 349, 993, 1030, 26.166, 321, 41.123 Telenor v Hungary Telenor Mobile Communications AS v Republic of Hungary (Case No ARB/04/15) Instrument invoked: Hungary–Norway BIT (1991) Award (13 September 2006) . . . . . . . . 25.284, 291, 581, 979, 1033, 1034–5, 26.146, 36.38, 57, 37.32, 41.108, 127, 43.158, 48.24, 52.69, 61.46, 57, 60, 63.13

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Tenaris v Venezuela I Tenaris SA and Talta – Trading e Marketing Sociedade Unipessoal Lda. v Bolivarian Republic of Venezuela (Case No ARB/11/26) Instruments invoked: Portugal–Venezuela BIT (1994); BLEU–Venezuela BIT (1998) Award (29 January 2016) . . . . . . . . . . . . . . . . . . . 25.139, 296, 300, 26.146, 41.157, 61.33, 96 Decision on Stay of Enforcement (24 March 2017) . . . . . . . . . . . . . . 52.723, 730, 732, 53.62 Decision on Annulment (8 August 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.50 Tenaris v Venezuela II Tenaris SA and Talta – Trading e Marketing Sociedade Unipessoal Lda. v Bolivarian Republic of Venezuela (Case No ARB/12/23) Instruments invoked: Portugal–Venezuela BIT (1994); BLEU–Venezuela BIT (1998) Award (12 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.14, 25 Decision on Stay of Enforcement (23 February 2018) . . . . . . . . . . . . . . . . . . . . . . . .52.738, 760 Decision on Annulment (28 December 2018) . . . . . . . 52.176, 355, 370, 392, 400, 408, 409 Tethyan Copper v Pakistan Tethyan Copper Company Pty Ltd v Islamic Republic of Pakistan (Case No ARB/12/1) Instrument invoked: Australia–Pakistan BIT (1998) Decision on Provisional Measures (13 December 2012) . . . . . . . . 47.15, 16, 17, 28, 57, 89, 61.106 Decision on Jurisdiction and Liability (10 November 2017) . . . . . . . . . . . 25.180, 46.92, 105 Award (12 July 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.51 Decision on Stay of Enforcement (17 September 2020) . . . . . . . . . . . . . . . . . . . . . . .52.612, 775 Tidewater v Venezuela Tidewater Investment SRL and Tidewater Caribe, CA v Bolivarian Republic of Venezuela (Case No ARB/10/5) Instruments invoked: Barbados–Venezuela BIT (1994); Investment Law (Venezuela 1999) Decision on Disqualification (23 December 2010) . . . . . . . . . . . . . . . . . . . . . 57.71, 77, 78, 178 Decision on Jurisdiction (8 February 2013) . . . . . . . . . . . . . 25.711, 812, 1041, 1052, 41.123, 42.6, 43.60 Award (13 March 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.112–13, 61.53, 62.16 Decision on Revision (7 July 2015) . . . . . . . . . . . . . . . . . . . . . 51.1, 7, 8, 21, 23, 26, 47, 61.47 Decision on Stay of Enforcement (29 February 2016) . . . . . . . . . . . . . . . . . . . 52.732, 738, 739 Decision on Annulment (27 December 2016) . . . . . . . 48.70, 52.11, 50, 424, 428, 474, 486, 499, 612, 613, 624, 692, 796, 61.41, 68 Togo Electricité v Togo Togo Electricité and GDF-Suez Energie Services v Republic of Togo (Case No ARB/06/7) Instrument invoked: Contract Award (10 August 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.12, 52.122 Decision on Annulment (6 September 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . 28.12, 52.205, 530 Tokios Tokelės v Ukraine Tokios Tokelės v Ukraine (Case No ARB/02/18) Instrument invoked: Lithuania–Ukraine BIT (1994) Procedural Order No 1 (1 July 2003) . . . . . . . . . . . 26.231, 43.88, 47.17, 23, 56, 70, 76, 167 Decision on Jurisdiction (w/ Diss Op Weil) (29 April 2004) . . . . . . . . . 25.70, 74, 128, 181, 408, 458, 464, 851, 968, 985, 986, 1187, 1188, 1190, 1191, 1192, 1210, 1212–23, 1262, 1270, 1298, 41.123, 42.236, 245, 264, 47.16, 167–8, 48.116, 120, 124 Dissenting Opinion Weil (29 April 2004) . . . . . . 25.408, 1192, 1217–23, 48.24, 116, 120

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Procedural Order No 3 (18 January 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.63 Award (w/ Diss Op Price) (26 July 2007) . . . . . . . . . . . . . . . . . . 25.691, 851, 1270, 36.21, 29, 38, 67, 37.58, 38.25, 41.41, 58, 122, 42.248, 316, 43.156, 48.23, 116, 49.22, 56.29, 61.29 Total v Argentina Total SA v Argentine Republic (Case No ARB/04/1) Instrument invoked: Argentina–France BIT (1991) Decision on Jurisdiction (25 August 2006) . . . . . . 25.68, 76, 127, 152, 161, 347, 41.123, 43.158, 44.101 Decision on Liability (w/ Diss Op Alvarez and Conc Op Herrera Marcano) (27 December 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.80, 42.32, 245, 266 Award (27 November 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.116 Decision on Stay of Enforcement (4 December 2014) . . . . . . 52.730, 738, 53.14, 44, 54.30, 55, 84 Decision on Disqualification (26 August 2015) . . . . . . . . . . . . . . . . 12.5, 52.683, 57.38, 52, 64 Decision on Annulment (1 February 2016) . . . . . . . . 52.14, 20, 22, 26, 188, 189, 239, 390, 468, 471, 488, 489, 576 Toto v Lebanon Toto Costruzioni Generali SpA v Lebanese Republic (Case No ARB/07/12) Instrument invoked: Italy–Lebanon BIT (1997) Decision on Jurisdiction (11 September 2009) . . . . . 25.185, 239, 240, 244, 250, 254, 260, 271, 474, 851, 888, 26.67, 75, 102, 340, 41.123, 42.236 Award (w/ Conc Op Schwebel) (7 June 2012) . . . . . . . . . . 26.355, 38.25, 41.21, 23, 42.190, 56.49, 61.33 Order on Discontinuance (15 February 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48 Tradex v Albania Tradex Hellas SA v Republic of Albania (Case No ARB/94/2) Instruments invoked: Albania–Greece BT (1991); Investment Law (Albania 1991) Decision on Jurisdiction (24 December 1996) . . . . . . . . . . . . . . . . . . . 25.48, 64, 134, 783, 815, 827, 898, 940, 961, 985, 1011, 1049, 1206, 37.58, 38.25, 41.123, 62.20 Award (29 April 1999) . . . . . . 22.6, 25.202, 203–4, 406, 961, 42.292, 43.19, 56, 111, 118, 152, 156, 44.35, 61.33, 62.20 Transban v Venezuela Transban Investments Corporation v Bolivarian Republic of Venezuela (Case No ARB/ 12/24) Instrument invoked: Barbados–Venezuela BIT (1994) Award (w/ Sep Op Torres Bernárdez and Diss & Conc Op Caron) (22 November 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.15, 19 Trans-Global v Jordan Trans-Global Petroleum, Inc v Hashemite Kingdom of Jordan (Case No ARB/07/25) Instrument invoked: Jordan–United States BIT (1997) Decision under Rule 41(5) (12 May 2008) . . . . . . . . . . . . 41.140–1, 144, 147, 148, 149, 150 Consent Award (8 April 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107, 61.14 Transglobal v Panama Transglobal Green Energy, LLC and Transglobal Green Panama, SA v Republic of Panama (Case No ARB/13/28)

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Instrument invoked: Panama–United States BIT (1982) Decision on Respondent’s Request for Shifting the Costs of the Arbitration (4 March 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.87, 91 Decision under Rule 41(5) (17 March 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.132 Decision on Bifurcation (21 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41.157, 167 Decision on Provisional Measures (21 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.139 Award (2 June 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1260, 61.45, 66 TSA Spectrum v Argentina TSA Spectrum de Argentina, SA v Argentine Republic (Case No ARB/05/5) Instrument invoked: Argentina–Netherlands BIT (1992) Award (w/ Conc Op Abi-Saab and Diss Op Aldonas) (19 December 2008) . . . . . .25.8, 60, 993, 1189, 1323, 1330, 1340, 1343, 1347, 1353–6, 1379, 1405, 1409, 1414, 26.146, 48.116 Tulip v Turkey Tulip Real Estate and Development Netherlands BV v Republic of Turkey (Case No ARB/11/28) Instrument invoked: Netherlands–Turkey BIT (1986) Decision on Bifurcation (2 November 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.155, 161, 168 Decision on Jurisdiction (5 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.62, 988, 1054 Award (w/ Sep Op Jaffe) (10 March 2014) . . . . . . . . . . . . . . 25.139, 300, 617, 671–2, 36.75, 42.115, 43.60 Decision on Annulment (30 December 2015) . . . . . . . . . . 52.14, 39, 42, 43, 44, 45, 48, 189, 344, 346, 349, 383, 550, 574, 598, 599, 692, 790, 61.40 Tza Yap Shum v Peru Tza Yap Shum v Republic of Peru (Case No ARB/07/6) Instrument invoked: China–Peru BIT (1994) Decision on Jurisdiction (19 June 2009) . . . . . . .25.334, 337, 979, 1032, 1056, 1500, 1504, 1505, 38.50, 41.123, 54.131, 70.11 Award (7 July 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.28, 29, 33 Decision on Annulment (12 February 2015) . . . . . . . . . . . . 52.14, 370–3, 407, 468, 484, 487 UAB v Latvia UAB E energija (Lithuania) v Republic of Latvia (Case No ARB/12/33) Instrument invoked: Latvia–Lithuania BIT (1996) Award (w/ Diss Op Reinisch) (22 December 2017) . . . . . . . . . . . . 25.851, 947, 971, 26.248, 36.28, 44, 41.157, 42.138, 215, 264, 43.111, 61.24 Decision on Annulment (8 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.42, 52.28, 704 Unglaube v Costa Rica Marion Unglaube v Republic of Costa Rica (Case No ARB/08/1) and Reinhard Hans Unglaube v Republic of Costa Rica (Case No ARB/09/20) Instrument invoked: Costa Rica–Germany BIT (1994) Award (16 May 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.76, 1116, 26.203, 43.166, 61.30, 33 Unión Fenosa v Egypt Unión Fenosa Gas, SA v Arab Republic of Egypt (Case No ARB/14/4) Instrument invoked: Egypt–Spain BIT (1992) Award (w/ Diss Op Clodfelter) (31 August 2018) . . . . . . . . . . . . 25.141, 284, 459, 26.190–2, 42.83, 245, 264, 48.141 Decision on Stay of Enforcement (24 January 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.783

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United Utilities v Estonia United Utilities (Tallinn) BV and Aktsiaselts Tallinna Vesi v Republic of Estonia (Case No ARB/14/24) Instrument invoked: Estonia–Netherlands BIT (1992) Procedural Order No 1 (5 June 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.60 Decision on Bifurcation (17 June 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.161 Procedural Order No 3 (3 May 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.14 Decision on Provisional Measures (12 May 2016) . . . . 44.171, 47.15, 31, 82, 101, 110, 215 Decision on Leave to Intervene as a Non-Disputing Party (2 October 2018) . . . . . . . 44.185 Award (w/ Diss Op Williams) (21 June 2019) . . . . . . . 25.25.1020, 324, 1020, 1089, 1434, 26.254, 44.140, 53.16, 54.121, 55.7, 61.53, 57 Universal Compression v Venezuela Universal Compression International Holdings, SLU v Bolivarian Republic of Venezuela (Case No ARB/10/9) Instrument invoked: Spain–Venezuela BIT (1995) Decision on Disqualification (20 May 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.78, 58.7 UP and CD Holding v Hungary UP and CD Holding Internationale v Republic of Hungary (Case No ARB/13/35) Instrument invoked: France–Hungary BIT (1986) Decision on Jurisdiction (3 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1032 Award (9 October 2018) . . . . 25.1020, 1089, 53.16, 17, 21, 22, 23, 30, 54.120, 71.4, 72.17 Urbaser v Argentina Urbaser SA and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v Argentine Republic (Case No ARB/07/26) Instrument invoked: Argentina–Spain BIT (1991) Decision on Disqualification (12 August 2010) . . . . . . . 14.10, 40.25, 57.72, Final Clause.7 Decision on Jurisdiction (19 December 2012) . . . . . . . . . 25.24, 26, 289, 334, 336, 345, 358, 405, 463, 678, 851, 971, 985, 994, 1446, 26.325, 39.24, 41.14, 96.61.101 Award (8 December 2016) . . . . . . . . . . . . 25.98, 41.122, 170, 42.236, 43.79, 46.8, 88, 48.23 Vacuum Salt v Ghana Vacuum Salt Products Ltd v Republic of Ghana (Case No ARB/92/1) Instrument invoked: Contract Decision on Procedures Relating to Objections to Jurisdiction and Related Matters (3 December 1992) Decision on Provisional Measures (14 June 1993) (1997) 4 ICSID Reports 323 . . . . . . . 47.15, 79, 114, 48.43 Award (16 February 1994) . . . . . . . . . . . 25.765, 954, 1166, 1267, 1291, 1336–9, 1403, 1418–20, 36.28, 52, 41.52, 127, 43.150, 44.22, 64, 47.33, 114, 48.15, 24, 52.69, 56.9, 61.29, 96, 63.21 Valle Verde v Venezuela Valle Verde Sociedad Financiera SL v Bolivarian Republic of Venezuela (Case No ARB/12/18) Instrument invoked: Spain–Venezuela BIT (1995) Decision on Provisional Measures (25 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . 47.89, 61.87 Valores Mundiales v Venezuela Valores Mundiales, SL and Consorcio Andino SL v Bolivarian Republic of Venezuela (Case No ARB/13/11) Instrument invoked: Spain–Venezuela BIT (1995)

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Award (25 July 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.70, 72, 591, 26.338, 72.25 Decision on Stay of Enforcement (6 September 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.44 Procedural Order No 2 (29 August 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.109 Vattenfall v Germany Vattenfall AB and others v Federal Republic of Germany (Case No ARB/12/12) Instrument invoked: ECT (1994) Decision on the Achmea Issue (31 August 2018) . . . . . . . . . . . 25.1020, 41.57, 61–2, 65, 69, 42.4–5, 238, 241, 45.14, 48.43, 53.16, 54.121 Recommendation on Disqualification (4 March 2019) . . . . . . . . . . . . . . . 57.41, 89, 91, 58.18 Recommendation on Disqualification (6 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . 57.35, 73, 84 Decision on Disqualification (8 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.35, 84 Venezuela Holdings v Venezuela (see also ! Mobil v Venezuela) Venezuela Holdings BV and others v Bolivarian Republic of Venezuela (formerly Mobil Corporation and others v Bolivarian Republic of Venezuela) (Case No ARB/07/27) Instrument invoked: Netherlands–Venezuela BIT (1991) Award (9 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.193–5, 52.540, 917, 61.31 Decision on Revision (12 June 2015) . . . . . . . . . . . . . . . . . . . . . .51.7, 8, 21, 26, 47, 51, 57.101 Decision on Stay of Enforcement (17 September 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.783 Decision on Annulment (9 March 2017) . . . . . . . . . . . . . . 43.36, 51.41, 52.50, 389, 468, 540 Venoklim v Venezuela Venoklim Holding BV v Bolivarian Republic of Venezuela (Case No ARB/12/22) Instrument invoked: Investment Law (Venezuela 1999) Award (w/ Diss & Conc Op Gómez Pinzón) (3 April 2015) . . . . . . 25.812, 882, 72.14, 15, 19 Decision under Rule 41(5) (8 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.138 Decision on Annulment (2 February 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.38, 48 Vestey v Venezuela Vestey Group Ltd v Bolivarian Republic of Venezuela (Case No ARB/06/4) Instruments invoked: United Kingdom–Venezuela BIT (1995); Investment Law (Venezuela 1999) Award (15 April 2016) . . . . . . . . . 25.140, 162, 362, 448, 1042, 41.58, 66, 42.14, 245, 248, 255, 318, 46.104, 53.24 Decision on Annulment (26 April 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.28, 704 Vieira v Chile Sociedad Anόnima Eduardo Vieira v Republic of Chile (Case No ARB/04/7) Instrument invoked: Chile–Spain BIT (1991) Award (w/ Diss Op Czar de Zalduendo) (21 August 2007) . . . . . . . . . . . . . . . . . . . . . 25.70, 72 Decision on Annulment (10 December 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.48, 205, 620 Vigotop v Hungary Vigotop Ltd v Republic of Hungary (Case No ARB/11/22) Instrument invoked: Cyprus–Hungary BIT (1989) Award (1 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.284, 29.979, 42.248 Vivendi v Argentina Compañía de Aguas del Aconquija SA and Vivendi Universal v Argentine Republic (formerly Compañía de Aguas del Aconquija SA and Compagnie Générale des Eaux v Argentine Republic) (Case No ARB/97/3) Instrument invoked: Argentina–France BIT (1991)

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Award (21 November 2000) . . . . . . . . . . . 25.180, 523, 528, 1267, 1276, 1301, 1323, 1422, 1449, 1491, 26.67, 106–14, 347–8, 41.124, 52.633, 827, 61.33 Decision on Disqualification (3 October 2001) . . . . . . . . . . 14.8, 40.24, 44.11, 47.7, 52.683, 696, 57.37, 58, 58.3 Decision on Annulment (3 July 2002) . . . . . . . . . . . . 25.289, 526, 610, 965, 1323, 1422, 26.67, 71, 88, 106–14, 159–61, 348, 1251, 46.38, 48.49, 50, 52.14, 20, 32, 43, 44, 45, 48, 58, 79, 161, 189, 197, 379, 445, 472–3, 495, 563, 594, 626–7, 633, 656, 667, 698, 722, 827, 61.41, 96 Decision on Supplementation and Rectification of Annulment Decision (28 May 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.27, 63–71, 90–4, 61.72, 110 Resubmitted Case: Decision on Jurisdiction (14 November 2005) . . . . . . . . 25.52, 284, 289, 658, 679, 730, 897, 1245, 1335, 1347, 1414, 1422, 36.28, 38, 43, 41.5, 85, 42.245, 47.15, 52.11, 803, 806, 815–17, 827–31, 847, 53.21 Resubmitted Case: Award (20 August 2007) . . . . . . . . . . 25.26, 98, 129, 160–4, 41.96, 122, 123, 42.245, 43.58, 125–6, 151, 44.140, 52.803, 829–30, 54.106, 57.23, 61.53, 58 Resubmitted Case: Decision on Stay of Enforcement (4 November 2008) . . . . 52.730, 742, 54.106, 135, 152 Resubmitted Case: Decision on Annulment (w/ Add Op Dalhuisen) (10 August 2010) . . . . . . . . . . . . . . . . . . . . . . . 14.14, 37.8, 48.55, 52.12, 14, 111, 122, 322, 325, 790, 803 Additional Opinion Dalhuisen (30 July 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57.96 VM Solar Jerez and others v Spain VM Solar Jerez GmbH and others v Kingdom of Spain (Case No ARB/19/30) Instruments invoked: ECT (1994) Decision on Disqualification (24 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10, 57.70, 73 von Pezold and others v Zimbabwe Bernhard von Pezold and others v Republic of Zimbabwe (Case No ARB/10/15) Instruments invoked: Germany–Zimbabwe BIT (1995); Switzerland–Zimbabwe BIT (1996) Procedural Order No 2 (26 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.183–4 Award (28 July 2015) . . . . . . 25.94, 98, 221, 254, 260, 291, 328, 350, 351, 366, 405, 463, 464, 591, 826, 851, 1116, 26.209, 27.3, 42.245, 248, 264, 44.74, 61.45, 46, 59, 126 Decision on Provisional Measures (17 March 2016) . . . . . . . . . . . . 47.5, 48.137, 52.685, 687 Decision on Stay of Enforcement (24 April 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.726, 740 Decision on Annulment (21 November 2018) . . . . . . . . 14.14, 37.8, 44.27, 45.69, 52.13, 35, 131, 362, 384, 566 WalAm Energy v Kenya WalAm Energy LLC v Republic of Kenya (Case No ARB/15/7) Instrument invoked: Contract Award (10 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.79, 776, 42.5, 153 Watkins Holdings v Spain Watkins Holdings Sàrl and others v Kingdom of Spain (Case No ARB/15/44) Instrument invoked: ECT (1994) Award (w/ Diss Op Ruiz Fabri) (21 January 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . .42.245, 248 Decision on Rectification (13 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . 44.91, 49.40, 84, 53.66 Wena Hotels v Egypt Wena Hotels Ltd v Arab Republic of Egypt (Case No ARB/98/4) Instrument invoked: Egypt–United Kingdom BIT (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1262 Decision on Jurisdiction (29 June 1999) . . . . . . . . . . . . . . . . 25.851, 987, 1190, 1321, 41.106

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Award (8 December 2000) . . . . . . . . . 25.98, 407, 947, 26.244–6, 41.122, 42.114, 194, 248, 294, 43.111, 144, 50.29, 52.378, 62.53 Decision on Stay of Enforcement (5 April 2001) . . . . . . . . . . . . . . . . . . . 52.730, 738, 746, 770 Decision on Annulment (5 February 2002) . . . . . . . . 25.407, 42.42, 154, 269, 300, 310–11, 315–16, 43.30, 45.269, 48.57–8, 81–2, 85, 49.95, 50.29, 52.14, 20, 32, 100, 115, 155, 156, 169, 183, 247–50, 334, 336–7, 346, 378, 406, 427, 444, 471, 518–20, 528, 549, 550, 561, 576, 593, 698, 722, 730, 738, 770–1, 61.37, 96 Decision on Interpretation (31 October 2005) . . . . . . . . . . . 25.98, 26.244, 50.4, 5, 7–11, 14, 25–6, 33, 46, 61.110 Western NIS v Ukraine Western NIS Enterprise Fund v Ukraine (Case No ARB/04/2) Instrument invoked: Ukraine–United States BIT (1994) Order (16 March 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.63, 989, 41.98 Westwater Resources v Turkey Westwater Resources, Inc v Republic of Turkey (Case No ARB/18/46) Instrument invoked: Turkey–United States BIT (1985) Decision on Bifurcation (28 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41.161, 163 Wintershall v Argentina Wintershall Aktiengesellschaft v Argentine Republic (Case No ARB/04/14) Instrument invoked: Argentina–Germany BIT (1991) Award (8 December 2008) . . . . . . . 25.718, 738, 857, 993, 1031, 1054, 26.322, 27.1, 41.21, 43.167 World Duty Free v Kenya World Duty Free Company Ltd v Republic of Kenya (Case No ARB/00/7) Instrument invoked: Contract Decision on Provisional Measures (25 April 2001) . . . . . . . . . . . . . . . . . . . . 44.157, 54.212–14 Award (4 October 2006) . . . . . . . . . . . . . . . . 25.191, 440–2, 475, 954, 41.72, 42.61, 83, 236, 248, 43.137, 145, 44.157–8, 47.15, 17, 212–14, 53.21, 56.27, 57.83, 58.20, 61.67, 62.20, 63.21 WRB v Grenada WRB Enterprises and Grenada Private Power Ltd v Grenada (Case No ARB/97/5) Instrument invoked: Contract Award (21 December 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.107, 68.5 Zhinvali v Georgia Zhinvali Development Ltd v Republic of Georgia (Case No ARB/00/1) Instrument invoked: Investment Law (Georgia 1996) Award (w/ Sep Op Jacovides) (24 January 2003) . . . . . . . . . . . . 25.48, 89, 192, 205, 386–7, 415, 666–8, 793–4, 797, 815, 907, 956, 1039, 26.57, 231, 37.33, 40.24, 41.9, 22, 60, 67, 127, 42.6, 248, 345–6, 43.104, 156, 44.22, 140, 47.41, 164–6, 167, 222, 249, 52.69, 205, 57.38, 61.59 Separate Opinion Jacovides (24 January 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41.60

Arbitration Proceedings (Additional Facility) Abengoa v Mexico Abengoa, SA y COFIDES, SA v United Mexican States (Case No ARB(AF)/09/2) Instrument invoked: Mexico–Spain BIT (2006) Award (18 April 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.56

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ADF v United States ADF Group Inc v United States (Case No ARB(AF)/00/1) Instrument invoked: NAFTA (1992) Procedural Order No 2 Concerning Place of Arbitration (11 July 2001) . . . . . . . . . . . . . 63.14 Procedural Order No 3 (4 October 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.27 Award (9 January 2003) . . . . . . . . . . . . . . . . . . . . . . . . . 36.73, 43.27, 101, 46.40, 79–80, 61.32 Anderson and others v Costa Rica Alasdair Ross Anderson and others v Republic of Costa Rica (Case No ARB(AF)/07/3) Instrument invoked: Canada–Costa Rica BIT (1998) Award (19 May 2010) . . . . . . . . . . 25.18, 300, 461–2, 481, 591, 826, 1116, 26.214–16, 36.38, 61.29 Anglo American v Venezuela Anglo American Plc v Bolivarian Republic of Venezuela (Case No ARB(AF)/14/1) Instrument invoked: United Kingdom–Venezuela BIT (1995) Award (w/ Diss Op Tawil) (18 January 2019) . . . . . . . . . . . . . . . . . . . . . . . . . 25.337, 347, 61.57 Apotex v United States (AF) Apotex Holdings Inc and Apotex Inc v United States of America (Case No ARB(AF)/12/1) Instrument invoked: NAFTA (1992) Order on Document Production (5 July 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.68 Award (25 August 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.248, 62.10 Archer Daniels Midland v Mexico Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc v United Mexican States (Case No ARB(AF)/04/5) Instrument invoked: NAFTA (1992) Order of the Consolidation Tribunal (20 May 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.201 Award (21 November 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.30, 33 Decision on Requests for Supplementary Decision, Interpretation and Correction of the Award (10 July 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.4, 5 Azinian v Mexico Robert Azinian and others v United Mexican States (Case No ARB(AF)/97/2) Instrument invoked: NAFTA (1992) Award (1 November 1999) . . . . . . . . . . . . . . . 25.1116, 36.48, 62, 43.111, 114, 133, 61.30, 32 Bayview v Mexico Bayview Irrigation District and others v United Mexican States (Case No ARB(AF)/05/1) Instruments invoked: NAFTA (1992) Award (19 June 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.435, 26.214, 48.24, 52.69 Besserglik v Mozambique Oded Besserglik v Republic of Mozambique (Case No ARB(AF)/14/2) Instruments invoked: Investment Law (Mozambique 1993); Mozambique–South Africa BIT (1997) Award (28 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.813, 827, 41.56, 65, 74, 48.55 B-Mex and others v Mexico B-Mex, LLC and others v United Mexican States (Case No ARB(AF)/16/3) Instrument invoked: NAFTA (1992) Partial Award (19 July 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.325, 998, 1407

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Cargill v Mexico Cargill, Incorporated v United Mexican States (Case No ARB(AF)/05/2) Instrument invoked: NAFTA (1992) Award (18 September 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.55 Cementownia v Turkey Cementownia ‘Nowa Huta’ SA v Republic of Turkey (Case No ARB(AF)/06/2) Instrument invoked: ECT (1994) Award (17 September 2009) . . . . . . . . . . . . . . . . . 25.450, 1256, 1260, 1261, 43.51, 61.45, 66 Corn Products v Mexico Corn Products International, Inc v United Mexican States (Case No ARB(AF)/04/1) Instrument invoked: NAFTA (1992) Order of the Consolidation Tribunal (20 May 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.201 Decision on the Correction and Interpretation of the Award (23 March 2010) (not public) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50.4 Corona Materials v Dominican Republic Corona Materials, LLC v Dominican Republic (Case No ARB(AF)/14/3) Instrument invoked: DR–CAFTA (2004) Award (31 May 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.946, 998, 61.101 Crystallex v Venezuela Crystallex International Corporation v Bolivarian Republic of Venezuela (Case No ARB(AF)/11/2) Instrument invoked: Canada–Venezuela BIT (1996) Award (4 April 2016) . . . . . . . . . 25.18, 70, 481, 26.129, 143, 145, 146, 362, 42.245, 43.60, 53.10, 61.15, 35, 64, 96 Europe Cement v Turkey Europe Cement Investment and Trade SA v Republic of Turkey (Case No ARB(AF)/07/2) Instrument invoked: ECT (1994) Award (13 August 2009) . . . . . . . . . . . . . . . . . . . . . . 25.18, 450, 481, 42.248, 43.51, 61.45, 66 Feldman v Mexico Feldman v United Mexican States (Case No ARB(AF)/99/1) Instrument invoked: NAFTA (1992) Decision on Jurisdiction (6 December 2000) . . . . . . . . . . . . . . . . . . . . . . . . . 25.942, 1116, 1140 Award (w/ Diss Op Covarrubias Bravo) (16 December 2002) . . . . . . . . . 25.956, 1116, 1140, 26.349, 43.60, 63, 156, 48.116, 120, 53.21 Decision on Correction and Interpretation (13 June 2003) . . . . . . . . . . . . . . . . . . . . . . . . 50.4, 6 Fireman’s Fund v Mexico Fireman’s Fund Insurance Company v United Mexican States (Case No ARB (AF)/02/1) Instrument invoked: NAFTA (1992) Award (17 July 2006) . . . . . . . . . . . . . . 25.670, 43.66, 79, 97, 132, 48.140, 61.33, 96, 62.16 Foresti and others v South Africa Piero Foresti, Laura de Carli and others v Republic of South Africa (Case No ARB(AF)/07/1) Instrument invoked: BLEU–South Africa BIT (1998) Award (w/ Conc Op Matthews) (4 August 2010) . . . . . . . . . . . . . . . . . . . 25.591, 1116, 48.146 Concurring Statement Matthews (3 August 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.117 Gemplus v Mexico Gemplus, SA, SLP, SA and Gemplus Industrial, SA de CV v United Mexican States (Case No ARB(AF)/04/3)

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Instrument invoked: France–Mexico BIT (1998) Award (16 June 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.718, 1250, 26.146, 208, 61.43, 46 Gold Reserve v Venezuela Gold Reserve Inc v Bolivarian Republic of Venezuela (Case No ARB(AF)/09/1) Instrument invoked: Canada–Venezuela BIT (1996) Award (22 September 2014) . . . . . . . . . . . 25.366, 374, 405, 412, 417, 421, 715, 716, 1187, 42.123, 61.43, 45, 56, 65 Decision on the Parties’ Requests for Corrections (15 December 2014) . . . . . . . . 49.24, 30, 33, 43 Grupo Contreras v Equatorial Guinea Grupo Francisco Hernando Contreras v Republic of Equatorial Guinea (Case No ARB(AF)/12/2) Instrument invoked: Equatorial Guinea–Spain BIT (2003) Award (w/ Diss Op Orrego Vicuña) (4 December 2015) . . . . . 25.18, 389, 483, 41.123, 61.96 Lao Holdings v Laos Lao Holdings NV v Lao People’s Democratic Republic (Case No ARB(AF)/12/6) Instrument invoked: Lao People’s Democratic Republic–Netherlands BIT (2003) Decision on Provisional Measures (17 September 2013) . . . . . . . . . . . . . . . . . . . . 47.89, 181–2 Decision on Jurisdiction (21 February 2014) . . . . . . . . . . . . . . . . 25.70, 72, 714, 1255, 43.128 Ruling on Motion to Amend Provisional Measures Order (30 May 2014) . . 47.175, 181–2 Award (6 August 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.11 Lemire v Ukraine (AF) Lemire v Ukraine (Case No ARB(AF)/98/1) Instrument invoked: Ukraine–United States BIT (1994) Award (18 September 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.845, 1116, 48.96, 107 Lion v Mexico Lion Mexico Consolidated LP v United Mexican States (Case No ARB(AF)/15/2) Instrument invoked: NAFTA (1992) Decision under Art. 45(6) of the ICSID Arbitration (Additional Facility) Rules (12 December 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41.135, 144 Decision on Jurisdiction (30 July 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.18, 481 Loewen v United States Loewen Group, Inc and Raymond L Loewen v United States of America (Case No ARB(AF)/ 98/3) Instrument invoked: NAFTA (1992) Decision on Jurisdiction (9 January 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.159 Award (26 June 2003) . . . . . . . . . . 25.54, 542–3, 718, 742, 743, 1116, 1166, 1246, 26.340, 345, 61.29, 32 Decision on Supplementation (13 September 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1116 Luis García Armas v Venezuela Luis García Armas v Bolivarian Republic of Venezuela (Case No ARB(AF)/16/1) Instrument invoked: Spain–Venezuela BIT (1995) Decision on Jurisdiction (24 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1116 Mercer v Canada Mercer International, Inc v Canada (Case No ARB(AF)/12/3) Instrument invoked: NAFTA (1992) Decision on Rectification (10 December 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.37

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Metalclad v Mexico Metalclad Corporation v United Mexican States (Case No ARB(AF)/97/1) Instrument invoked: NAFTA (1992) Award (30 August 2000) . . . . . . . . . . . . . . . . . . . . . . 25.985, 987, 44.156, 46.27, 53.10, 61.29 Minnotte and Lewis v Poland David Minnotte and Robert Lewis v Republic of Poland (Case No ARB(AF)/10/1) Instrument invoked: Poland–United States (1990) Award (16 May 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.18, 465, 468, 481, 61.46 Decision on Interpretation (22 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.4, 18, 33 MNSS and RCA v Montenegro MNSS BV and Recupero Credito Acciaio NV v Montenegro (Case No ARB(AF)/12/8) Instruments invoked: Netherlands–Yugoslavia BIT (2002); Investment Law (Montenegro 2011) Award (4 May 2016) . . . . . . . . . . . 25.19, 139, 276, 277, 300, 366, 371, 463, 481, 483, 499, 704, 809, 1229, 1239, 26.129, 140, 145, 208, 338 Mobil Investments and Murphy Oil v Canada Mobil Investments Canada Inc and Murphy Oil Corporation v Canada (Case No ARB(AF)/07/4) Instrument invoked: NAFTA (1992) Procedural Order No 1: Decision of the Tribunal on the Place of Arbitration (7 October 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.10 Award (20 February 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.96 Mobile TeleSystems v Uzbekistan Mobile TeleSystems OJSC v Republic of Uzbekistan (ICSID Case No ARB (AF)/12/7) Instrument invoked: Investment Law (Uzbekistan 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.138 Mondev v United States Mondev International Ltd v United States of America (Case No ARB(AF)/99/2) Instrument invoked: NAFTA (1992) Award (11 October 2002) . . . 25.399, 677, 941, 942, 946, 1055, 61.32, 33, Final Clause.3 Nova Scotia Power v Venezuela (AF) Nova Scotia Power Incorporated v Bolivarian Republic of Venezuela (Case No ARB(AF)/11/1) Instrument invoked: Canada–Venezuela BIT (1996) Award (30 April 2014) . . . . . . . . . . 25.196, 221, 256, 437, 481, 494, 26.41–2, 61.32, 72.15 Quadrant Pacific v Costa Rica Quadrant Pacific Growth Fund LP and Canasco Holdings Inc v Republic of Costa Rica (Case No ARB(AF)/08/1) Instrument invoked: Canada–Costa Rica BIT (1998) Order on Discontinuance (27 October 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.54, 61.113 Rusoro Mining v Venezuela Rusoro Mining Ltd v Bolivarian Republic of Venezuela (Case No ARB(AF)/12/5) Instrument invoked: Canada–Venezuela BIT (1996) Award (22 August 2016) . . . . . . . . . . 25.464, 518, 882, 946, 42.123, 245, 354, 57.3, 61.96, 72.14, 15, Final Clause.6 Ryan and others v Poland Vincent J Ryan, Schooner Capital LLC, and Atlantic Investment Partners LLC v Republic of Poland (Case No ARB(AF)/11/3)

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Instrument invoked: Poland–United States BIT (1990) Award (w/ Part Diss Op Orrego Vicuña) (24 November 2015) . . . . . . . . . . . . . . . .25.371, 720 Sistem v Kyrgyzstan Sistem Mühendislik Insaat Sanayi ve Ticaret AS v Kyrgyz Republic (Case No ARB(AF)/06/1) Instruments invoked: Kyrgyz Republic–Turkey BIT (1992); Investment Law (Kyrgyz Republic 2003) Decision on Jurisdiction (13 September 2007) . . . . . . . . . . . . . . . . . 25.18, 411, 481, 482, 486 Award (9 September 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.25, 45.10, 62, 55.54, 61.56 Strabag v Libya Strabag SE v Libya (Case No ARB(AF)/15/1) Instrument invoked: Austria–Libya BIT (2002) Award (w/ Part Diss Op Ziadé) (29 June 2020) . . . . . . . . . . . . . . . . . . 25.18, 347, 483, 26.128 Tecmed v Mexico Técnicas Medioambientales Tecmed, SA v United Mexican States (Case No ARB(AF)/00/2) Instrument invoked: Mexico–Spain BIT (1995) Award (29 May 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.291, 943, 1021, 1032, 42.352, 56.27 Vannessa Ventures v Venezuela Vannessa Ventures Ltd v Bolivarian Republic of Venezuela (Case No ARB(AF)04/6) Instrument invoked: Canada–Venezuela BIT (1996) Decision on Jurisdiction (22 August 2008) Award (16 January 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.458, 463, 946, 998 Waste Management v Mexico I Waste Management, Inc v United Mexican States (Case No ARB(AF)/98/2) Instrument invoked: NAFTA (1992) Award (w/ Diss Op Highet) (2 June 2000) . . . . . . . . . . . . . . . . . . . . 25.998, 26.94, 48.116, 120 Waste Management v Mexico II Waste Management, Inc v United Mexican States (Case No ARB(AF)/00/3) Instrument invoked: NAFTA (1992) Decision on Venue of the Arbitration (26 September 2001) . . . . . . . . . . . . . . . . . . 62.10, 63.14 Decision on Jurisdiction (26 June 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.998 Award (30 April 2004) . . . . . . . 25.334, 337, 998, 1187, 1324, 26.95, 166, 352, 995, 43.80, 89, 105, 48.116, 49.28, 50.4, 19, 61.30, 63.14

Conciliation Proceedings (ICSID Convention) Barrick v Papua New Guinea Barrick (Niugini) Ltd v Independent State of Papua New Guinea (Case No CONC/20/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 29.7, 30.7 CDE v Cameroon and CAMWATER La Camerounaise des Eaux (CDE) v Republic of Cameroon and Cameroon Water Utilities Cooperation (CAMWATER) (Case No CONC/19/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 29.9, 30.7 RSM v Cameroon RSM Production Corporation v Republic of Cameroon (Case No CONC/11/1) Instrument invoked: Contract Report (11 June 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 12, 29.9, 10, 30.7, 24

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SEDITEX v Madagascar I SEDITEX Engineering Beratungsgesellschaft für die Textilindustrie mbH v Democratic Republic of Madagascar (Case No CONC/82/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.10, 28.11, 29.7, 10 SEDITEX v Madagascar II SEDITEX Engineering Beratungsgesellschaft für dieTextilindustrie mbH v Madagascar (Case No CONC/94/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 11, 29.10, 34.9, 13, 24 Shareholders of SESAM v Central African Republic Shareholders of SESAM v Central African Republic (Case No CONC/07/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 29.10, 34.24 SEEG v Gabon Société d’Energie et d’Eau du Gabon v Gabonese Republic (Case No CONC/18/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . 25.546, 28.10, 12, 29.11, 30.7, 34.24, 48.107 Tesoro v Trinidad and Tobago Tesoro Petroleum Corporation v Trinidad and Tobago (Case No CONC/83/1) Instrument invoked: Contract Report (27 November 1985) . . . . . . . 25.1003, 28.10, 11, 29.8, 32.6–7, 33.6, 34.3, 7–8, 13, 24, 35.3, 42.335, 344, 44.34, 59.5 Togo Electricité v Togo Togo Electricité v Republic of Togo (Case No CONC/05/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 29.10, 34.24 Xenofon Karagiannis v Albania Xenofon Karagiannis v Republic of Albania (Case No CONC/16/1) Instruments invoked: Albania–Greece BIT (1991); Investment Law (Albania 1993) . . . . . 28.10, 12, 29.7

Conciliation Proceedings (Additional Facility) Equatorial Guinea v CMS and others Republic of Equatorial Guinea v CMS Energy Corporation and others (Case No CONC(AF)/12/2) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.8, 11 Hess and Tullow v Equatorial Guinea Hess Equatorial Guinea, Inc. and Tullow Equatorial Guinea Ltd v Republic of Equatorial Guinea (Case No CONC(AF)/12/1) Instrument invoked: Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.10, 29.7

OTHER INVESTOR-STATE ARBITRATIONS

Ad hoc Arbitrations Aminoil v Kuwait American Independent Oil Co v Government of the State of Kuwait Instrument invoked: Contract Final Award (24 March 1982) (1984) 66 ILR 519 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.173

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Eureko v Poland Eureko BV v Republic of Poland Instrument invoked: Netherlands–Poland BIT (1992) Partial Award (19 August 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.114 InterTrade v Czech Republic InterTrade Holding GmbH v Czech Republic (PCA Case No 2009-12) Instrument invoked: Czech Republic–Germany BIT (1990) Final Award (7 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.465 Strabag v Poland Strabag SE, Raiffeisen Centrobank AG and Syrena Immobilien Holding AG v Republic of Poland (ICSID Case No ADHOC/15/1) Instrument invoked: Austria–Poland BIT (1988) Partial Award on Jurisdiction (4 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.133, 42.5 TOPCO v Libya Texaco Overseas Petroleum Co and California Asiatic Oil Co v Government of the Libyan Arab Republic Instrument invoked: Contract Preliminary Award (27 November 1975) (1979) 53 ILR 392 . . . . . . . . . . . . . . . . . . . . . . . . 41.2 Award on the Merits (19 January 1977) (1978) 17 ILM 1 . . . . . . . . . . . . . . . . . . 42.173, 54.91 Yaung Chi v Myanmar Yaung Chi Oo Trading Pte Ltd v Government of the Union of Myanmar (ASEAN ID Case No ARB/01/1) Instrument invoked: ASEAN Investment Agreement (1987) Award (31 March 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.465, 876, 1215, 26.329, 340, 506

ICC Arbitration Rules ImageSat International v Serbia ImageSat International NV v Republic of Serbia Instrument invoked: Contract Partial Award (7 May 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.634 SPP v Egypt (ICC) SPP (Middle East) Ltd and Southern Pacific Properties Ltd v Arab Republic of Egypt and Egyptian General Company for Tourism and Hotels (ICC Case No YD/AS No 3493) Instrument invoked: Contract Award (11 March 1983) (1995) 3 ICSID Reports 46 . . . . . . . . . . . . . . . . . . . . . . . . . 26.46, 52.5

SCC Arbitration Rules Al-Bahloul v Tajikistan Mohammad Ammar Al-Bahloul v Republic of Tajikistan (SCC Case No V (064/2008)) Instrument invoked: ECT (1994) Partial Award on Jurisdiction and Liability (2 September 2009) . . . . . . . . . . . . . . . . . . . 25.320 Amto v Ukraine Limited Liability Company Amto v Ukraine (SCC Case No 080/2005) Instrument invoked: ECT (1994) Final Award (26 March 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.395, 36.72

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Anglia Auto v Czech Republic Anglia Auto Accessories Ltd v Czech Republic (SCC Case No V 2014/181) Instrument invoked: Czech Republic–United Kingdom BIT (1990) Final Award (10 March 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.221, 303 Berschader v Russia Vladimir Berschader and Moïse Berschader v Russian Federation (SCC Case No 080/2004) Instrument invoked: BLEU–Russian Federation BIT (1989) Award (21 April 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.334, 417 Bogdanov, Agurdino-Invest and Agurdino-Chimia v Moldova Iurii Bogdanov, Agurdino-Invest Ltd and Agurdino-Chimia JSC v Republic of Moldova Instrument invoked: Moldova–Russian Federation BIT (1998) Award (22 September 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.347 Bogdanova v Moldova Yuri Bogdanov and Yulia Bogdanova v Republic of Moldova (SCC Case No V091/2012) Instrument invoked: Moldova–Russian Federation BIT (1998) Final Award (16 April 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.84 Charanne v Spain Charanne and Construction Investments v Spain (SCC Case No 062/2012) Instrument invoked: ECT (1994) Award (w/ Diss Op Tawil) (21 January 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.67, 84 Isolux v Spain Isolux Netherlands, BV v Kingdom of Spain (SCC Case V2013/153) Instrument invoked: ECT (1994) Award (12 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 Nagel v Czech Republic William Nagel v Czech Republic (SCC Case No 049/2002) Instrument invoked: Czech Republic–United Kingdom BIT (1990) Final Award (9 September 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.389 Nycomb v Latvia Nykomb Synergetics Technology Holding AB v Republic of Latvia Instrument invoked: ECT (1994) Award (16 December 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26.146, 329 Petrobart v Kyrgyzstan Petrobart Ltd v Kyrgyz Republic (SCC Case No 126/2003) Instrument invoked: ECT (1994) Award (29 March 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1215, 43.60 Quasar de Valores and others v Russia Quasar de Valores SICAV SA, Orgor de Valores SICAV SA, GBI 9000 SICAV SA, ALOS 34 SL v Russian Federation (formerly Renta 4 and others v Russian Federation) (SCC No 24/2007) Instrument invoked: Russian Federation–Spain BIT (1990) Award on Preliminary Objections (w/ Sep Op Brower) (20 March 2009) . . . . . . 25.428, 36.72 Award (20 July 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.702, 61.5, 97, 103 Renta 4 and others v Russia (! Quasar de Valores and others v Russia)

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RosInvest v Russia RosInvestCo United Kingdom Ltd v The Russian Federation (SCC Case No V079/2005) Instrument invoked: Russian Federation–United Kingdom BIT (1989) Award on Jurisdiction (5 October 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1032, 26.329 Final Award (12 September 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.347, 26.329 Sedelmayer v Russia Mr Franz Sedelmayer v Russian Federation Instrument invoked: Germany–Russian Federation BIT (1989) Arbitration Award (7 July 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.151, 232, 337, 55.50–1

UNCITRAL Arbitration Rules A11Y v Czech Republic A11Y LTD v Czech Republic (ICSID Case No UNCT/15/1) Instrument invoked: Czech Republic–United Kingdom BIT (1990) Award (29 June 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.141, 405, 519, 61.54 Achmea v Slovakia I Achmea BV v Slovak Republic (formerly Eureko BV v Slovak Republic) (PCA Case No 2008-13) Instrument invoked: Netherlands–Slovak Republic BIT (1991) Final Award (7 December 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.464, 465, 468 Achmea v Slovakia II Achmea BV v Slovak Republic (PCA Case No 2013-12) Instrument invoked: Netherlands–Slovak Republic BIT (1991) Award on Jurisdiction and Admissibility (20 May 2014) . . . . . . . 25.48, 64, 68, 70, 75, 76, 85, 41.84 Allard v Barbados Peter A Allard v Government of Barbados (PCA Case No 2012-06) Instrument invoked: Barbados–Canada BIT (1996) Award on Jurisdiction (13 June 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.459 Alps Finance v Slovakia Alps Finance and Trade AG v Slovak Republic Instrument invoked: Slovak Republic–Switzerland BIT (1990) Award (5 March 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 371, 26.340, 345 Al-Warraq v Indonesia Hesham Talaat M Al-Warraq v Republic of Indonesia Instrument invoked: Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organisation of the Islamic Conference (1981) Decision on Jurisdiction (21 June 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.463 Final Award (15 December 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.337 AMF Aircraftleasing v Czech Republic AMF Aircraftleasing Meier & Fischer GmbH & Co KG v Czech Republic (PCA Case No 2017-15) Instrument invoked: Czech Republic–Germany BIT (1990) Award (w/ Sep Decl Alexandrov) (11 May 2020) . . . . . . . . . . . . . . . . . . . . 25.221, 233, 26.167 Apotex v United States (UNCITRAL) Apotex Inc v United States of America (ICSID Case No UNCT/10/2)

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Instrument invoked: NAFTA (1992) Procedural Order No 1 (16 December 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Award on Jurisdiction and Admissibility (14 June 2013) . . . . . . . . . . . . . 25.395, 435, 26.345 Aven and others v Costa Rica David Aven and others v Republic of Costa Rica (ICSID Case No UNCT/15/3) Instrument invoked: DR–CAFTA (2004) Award (18 September 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.43, 54 AWG v Argentina (see also ! Suez and Vivendi v Argentina (ICSID)) AWG Group Ltd v Argentine Republic Instrument invoked: Argentina–United Kingdom BIT (1990) Decision on Jurisdiction (3 August 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.206, 44.17 Bahgat v Egypt Mohamed Abdel Raouf Bahgat v Arab Republic of Egypt (PCA Case No 2012-07) Instrument invoked: Egypt–Finland BIT (2004) Award (23 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.334 Balkan Energy v Ghana Balkan Energy (Ghana) Ltd v Republic of Ghana (PCA Case No 2010-7) Instrument invoked: Contract Interim Award (22 December 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1099 Bankswitch v Ghana Bankswitch Ghana Ltd (Ghana) v Republic of Ghana Acting as the Government of Ghana (PCA Case No 2011-10) Instrument invoked: Contract Award Save as to Costs (11 April 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1099 Belokon v Kyrgyzstan Valeri Belokon v Kyrgyz Republic Instrument invoked: Kyrgyzstan–Latvia BIT (2008) Award (24 October 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.41 BG Group v Argentina BG Group Plc v Argentine Republic Instrument invoked: Argentina–United Kingdom BIT (1990) Final Award (24 December 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.161, 352, 358, 26.323–4 Bilcon v Canada William Richard Clayton, Douglas Clayton, Daniel Clayton, and Bilcon of Delaware, Inc v Government of Canada (PCA Case No 2009-04) Instrument invoked: NAFTA (1992) Procedural Order No 2 (4 May 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.66 Procedural Order No 3 (3 June 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Procedural Order No 13 (11 July 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.98, 102–3 Bosca v Lithuania Luigiterzo Bosca v Republic of Lithuania (PCA Case No 2011-05) Instrument invoked: Italy–Lithuania BIT (1994) Award (17 May 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.298, 391, 393, 1086 British Caribbean Bank v Belize British Caribbean Bank Ltd v Government of Belize (PCA Case No 2010-18)

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Instrument invoked: Belize–United Kingdom BIT (1982) Award (19 December 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.428 Cairn Energy v India Cairn Energy Plc and Cairn UK Holdings Ltd (CUHL) v Republic of India (PCA Case No 2016-7) Instrument invoked: India–United Kingdom BIT (1994) Award (21 December 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 334, 337, 463, 26.351, 358 Canadian Cattlemen v United States The Canadian Cattlemen for Fair Trade v United States of America (formerly Consolidated Canadian Claims v United States of America) Instrument invoked: NAFTA (1992) Award on Jurisdiction (28 January 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.435, 26.214 Canfor v United States Canfor v United States of America, Tembec and others v United States of America, Terminal Forest Products v United States of America Instrument invoked: NAFTA (1992) Order of the Consolidation Tribunal (7 September 2005) . . . . . . . . . . . . . . . . . . . . . . . . . 26.201 Cargill v Poland Cargill, Inc v Republic of Poland Instrument invoked: Poland–United States BIT (1990) Final Award (29 February 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.24 CC/Devas v India CC/Devas (Mauritius) Ltd, Devas Employees Mauritius Private Ltd and Telecom Devas Mauritius Ltd v Republic of India (PCA Case No 2013-09) Instrument invoked: India–Mauritius BIT (1998) Decision on Challenges (30 September 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.25, 57.72 Award on Jurisdiction and Merits (25 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.394 Centurion v Canada Melvin J Howard, Centurion Health Corp & Howard Family Trust v Government of Canada (PCA Case No 2009-21) Instrument invoked: NAFTA (1992) Notice of Arbitration (5 January 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1175 Chemtura v Canada Chemtura Corporation v Government of Canada (formerly Crompton Corporation v Government of Canada) Instrument invoked: NAFTA (1992) Award (2 August 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.72 Chevron v Ecuador I Chevron Corporation (United States) and Texaco Petroleum Company (United States) v Republic of Ecuador (PCA Case No 34877) Instrument invoked: Ecuador–United States BIT (1993) Partial Award on the Merits (30 March 2010) . . . . . . . . . . . . . . . . . . . . . . . 26.340, 27.29, 64.14 Final Award (31 August 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.14 Chevron v Ecuador II Chevron Corporation and Texaco Petroleum Corporation v Republic of Ecuador (PCA Case No 2009-23)

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Instrument invoked: Ecuador–United States BIT (1993) Third Interim Award on Jurisdiction and Admissibility (27 February 2012) . . . . . . . 25.142, 702, 26.84 Second Partial Award on Track II (30 August 2018) . . . . . . . . . . . . 25.702, 26.340, 341, 345 Clorox v Venezuela Clorox Spain SL v Bolivarian Republic of Venezuela (PCA Case No 2015-30) Instrument invoked: Spain–Venezuela BIT (1995) Award (20 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 362, 405 CME v Czech Republic CME Czech Republic BV v Czech Republic Instrument invoked: Czech Republic–Netherlands BIT (1991) Partial Award (13 September 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26.180, 211 Final Award (14 March 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.85 Copper Mesa Mining v Ecuador Copper Mesa Mining Corporation v Republic of Ecuador (PCA Case No 2012-2) Instrument invoked: Canada–Ecuador BIT (1996) Award (15 March 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.463 Deripaska v Montenegro Oleg Deripaska v Republic of Montenegro Instrument invoked: Russia–Yugoslavia BIT (1995) Award (15 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.630 Detroit International Bridge v Canada Detroit International Bridge Company v Government of Canada (PCA Case No 2012-25) Instrument invoked: NAFTA (1992) Award on Jurisdiction (2 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.64, 677, 26.92 Deutsche Telekom v India Deutsche Telekom AG v Republic of India (PCA Case No 2014-10) Instrument invoked: Germany–India BIT (1995) Interim Award (13 December 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.337 Doutremepuich v Mauritius Christian Doutremepuich and Antoine Doutremepuich v Republic of Mauritius (PCA Case No 2018-37) Instrument invoked: France–Mauritius BIT (1973) Award on Jurisdiction (23 August 2019) . . . . . . . . . . . . . . . . 25.245, 246, 248, 253, 256, 1032 ECE v Czech Republic ECE Projektmanagement v Czech Republic (PCA Case No 2010-5) Instrument invoked: Czech Republic–Germany BIT (1990) Award (19 September 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.340 Eli Lilly v Canada Eli Lilly and Company v Canada (ICSID Case No UNCT/14/2) Instrument invoked: NAFTA (1992) Procedural Order No 1 (26 May 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.17 Final Award (16 March 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.248 EnCana v Ecuador EnCana Corporation v Republic of Ecuador (LCIA Case No UN 3481)

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Instrument invoked: Canada–Ecuador BIT (1996) Partial Award on Jurisdiction (27 February 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.71 Award (3 February 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.677, 729, 26.350, 41.85 Energoalians v Moldova Energoalians TOB v Republic of Moldova Instruments invoked: Moldova–Urkaine BIT (1995); ECT (1996) Award (23 October 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 Enkev v Poland Enkev Beheer BV v Republic of Poland (PCA Case No 2013-01) Instrument invoked: Netherlands–Poland BIT (1992) First Partial Award (29 April 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.352 Ethyl v Canada Ethyl Corporation v Government of Canada Instrument invoked: NAFTA (1992) Decision Regarding the Place of Arbitration (28 November 1997) (2005) 7 ICSID Reports 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.14 Award on Jurisdiction (24 June 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.986 Everest and others v Russia Everest Estate LLC, Edelveis-2000 PE, Fortuna CJSC and others v Russian Federation (PCA Case No 2015-36) Instrument invoked: Russian Federation–Ukraine BIT (1998) Award (2 May 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Flemingo Duty Free v Poland Flemingo DutyFree Shop Private Ltd v Republic of Poland (PCA) Instrument invoked: India–Poland BIT (1996) Award (12 August 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 366, 26.172 FPS v Czech Republic Frontier Petroleum Services Ltd v Czech Republic Instrument invoked: Canada–Czech Republic BIT (1990) Final Award (12 November 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.303, 26.340 Gallo v Canada Vito G Gallo v Government of Canada (PCA Case No 55798) Instrument invoked: NAFTA (1992) Decision on Challenge (14 October 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 GAMI v Mexico Gami Investments Inc v Mexico Instrument invoked: NAFTA (1992) Final Award (15 November 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.344, 347, 26.92 Glamis Gold v United States Glamis Gold, Ltd v United States of America Instrument invoked: NAFTA (1992) Decision on Bifurcation (31 May 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.161 Decision on Objections to Document Production (20 July 2005) . . . . . . . . . . . . . . . . . . . . 43.14 Decision on Document Production (21 April 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.98 Award (8 June 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.519

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Gold Pool v Kazakhstan Gold Pool Ltd Partnership v Republic of Kazakhstan (PCA Case No 2016-23) Instrument invoked: Canada–Russian Federation BIT (1989) Award (30 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.630 Grand River v United States Grand River Enterprises Six Nations, Ltd and others v United States of America Instrument invoked: NAFTA (1992) Decision on Jurisdiction (20 July 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.946, 36.72 Award (12 January 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.435 Guaracachi v Bolivia Guaracachi America, Inc and Rurelec Plc v Plurinational State of Bolivia (PCA Case No 2011-17) Instruments invoked: Bolivia–United Kingdom BIT (1988); Bolivia–United States BIT (1998) Award (31 January 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 337, 417, 826, 987, 1108 HICEE v Slovakia HICEE BV v Slovak Republic (PCA Case No 2009-11) Instrument invoked: Netherlands–Slovak Republic BIT (1991) Partial Award (w/ Diss Op Brower) (23 May 2011) . . . . . . . . . . . . . . . . . . . . . 25.126, 334, 358 Hulley Enterprises v Russia Hulley Enterprises Ltd (Cyprus) v Russian Federation (PCA Case No AA226) Instrument invoked: ECT (1994) Interim Award on Jurisdiction and Admissibility (30 November 2009) . . . . . . 25.405, 26.67 Iberdrola v Guatemala (UNCITRAL) Iberdrola Energía, SA v Republic of Guatemala (PCA Case No 2017-41) Instrument invoked: Guatemala–Spain BIT (2002) Final Award (24 August 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.41 ICS v Argentina ICS Inspection and Control Services (United Kingdom) v Argentine Republic (PCA Case No 2015-12) Instrument invoked: Argentina–United Kingdom BIT (1990) Award on Jurisdiction (8 July 2019) (available on ) . . . . . . . 25.141 KBR v Mexico KBR, Inc v Mexico (ICSID Case No UNCT/14/1) Instrument invoked: NAFTA (1992) Final Award (30 April 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.92 Khan Resources v Mongolia Khan Resources Inc., Khan Resources BV, and Cauc Holding Company Ltd v Government of Mongolia (PCA Case No 2011-09) Instrument invoked: ECT (1994) Decision on Jurisdiction (25 July 2012) . . . . . . . . . . . . . . 25.465, 468, 476, 26.67, 84, 43.158 Lauder v Czech Republic Ronald S Lauder v Czech Republic Instrument invoked: Czech Republic–United States BIT Final Award (3 September 2001) . . . . . . . . . . . . . . . . . . . . . 25.334, 337, 986, 26.180, 211, 350

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Lee-Chin v Dominican Republic Michael Anthony Lee-Chin v Dominican Republic (ICSID Case No UNCT/18/3) Instrument invoked: CARICOM–Dominican Republic FTA (2002) Award on Jurisdiction (w/ Diss Op Kohen) (15 July 2020) . . . . . . . . . . . . . . . . . . . . . . 25.334 Manchester Securities v Poland Manchester Securities Corporation v Republic of Poland (PCA Case No 2015-18) Instrument invoked: Poland–United States BIT (1990) Award (7 December 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.221, 26.340 Manuel García Armas and others v Venezuela Manuel García Armas and others v Bolivarian Republic of Venezuela (PCA Case No 2016-8) Instrument invoked: Spain–Venezuela BIT (1995) Decision on Jurisdiction (13 December 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.8 Mason v Korea Mason Capital LP and Mason Management LLC v Republic of Korea (PCA Case No 2018-55) Instrument invoked: Korea–United States FTA (2007) Decision on Preliminary Objections (22 December 2019) . . . . . . . . . . . . . . . . 25.240, 244, 397 Merrill & Ring v Canada Merrill & Ring Forestry LP v Canada (ICSID Case No UNCT/07/1) Instrument invoked: NAFTA (1992) Decision on Production of Documents (18 July 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.98 Methanex v United States Methanex Corporation v United States of America Instrument invoked: NAFTA (1992) Reasons for the Tribunal’s Decision on the Place of Arbitration (31 December 2000) (2005) 7 ICSID Reports 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.7, 63.14 Decision on Amici Curiae (15 January 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.176 Partial Award (7 August 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.127, 26.92 Final Award (3 August 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.21 Muszynianka v Slovakia Muszynianka spółka z ograniczoną odpowiedzialnością (formerly Spółdzielnia Pracy ‘Muszynianka’) v Slovak Republic (PCA Case No 2017-08) Instrument invoked: Poland–Slovak Republic BIT (1994) Award (w/ Part Diss Op Volterra) (7 October 2020) . . . . . . . . . . . . . . . . . . . . . . . . . .25.221, 463 Mytilineos v State Union of Serbia & Montenegro and Serbia Mytilineos Holdings SA v State Union of Serbia & Montenegro and Republic of Serbia Instrument invoked: Greece–Yugoslavia BIT (1997) Partial Award on Jurisdiction (8 September 2006) . . . . . . . . . . . . . . . . . 25.141, 458, 523, 624, 627, 26.329 Naftogaz and others v Russia NJSC Naftogaz of Ukraine, PJSC State Joint Stock Company Chornomornaftogaz, PJSC Ukrgasvydobuvannya and others v Russian Federation (PCA Case No 2017-16) Instrument invoked: Russian Federation–Ukraine BIT (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 National Grid v Argentina National Grid Plc v Argentine Republic Instrument invoked: Argentina–United Kingdom BIT (1990)

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Decision on Jurisdiction (20 June 2006) . . . . . . . . . . . . . . . . . . . . . . . . 25.69, 84, 161, 321, 729, 996, 1030, 26.129, 321, 41.85, 57.60 Decision on Challenge (3 December 2007) (LCIA Case No UN 7949) . . . . . . . 14.12, 57.60 Nordzucker v Poland Nordzucker AG v Republic of Poland Instrument invoked: Germany–Poland BIT (1989) Partial Award (10 December 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.391, 397, 451 Nova Scotia Power v Venezuela (UNCITRAL) Nova Scotia Power Incorporated (Canada) v Bolivarian Republic of Venezuela Instrument invoked: Canada–Venezuela BIT (1996) Award on Jurisdiction (22 April 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.41–2 Occidental v Ecuador (UNCITRAL) Occidental Exploration and Production Company v Republic of Ecuador (LCIA Case No UN3467) Instrument invoked: Ecuador–United States BIT (1993) Award (1 July 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.84 Oostergetel v Slovakia Jan Oostergetel and Theodora Laurentius v Slovak Republic Instrument invoked: Netherlands–Slovak Republic BIT (1991) Decision on Jurisdiction (30 April 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 375, 463 Award (23 April 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26.340, 42.318 Paushok v Mongolia Sergei Paushok, CJSC Golden East Company and CJSC Vostokneftegaz Company v Government of Mongolia Instrument invoked: Mongolia–Russian Federation BIT (1995) Award on Jurisdiction and Liability (28 April 2011) . . . . . . . . 25.347, 352, 358, 405, 46.84 Philip Morris v Australia Philip Morris Asia Ltd v Commonwealth of Australia (PCA Case No 2012-12) Instrument invoked: Australia–Hong Kong BIT (1993) Procedural Order No 6 (30 November 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.14, 44.22 Procedural Order No 10 (26 August 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.68 Procedural Order No 16 (23 February 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.60 Award on Jurisdiction and Admissibility (17 December 2015) . . . . . . . . . . . . . . . . 25.73, 328, 457, 464, 714, 922 Pope and Talbot v Canada Pope & Talbot Inc v Government of Canada Instrument invoked: NAFTA (1992) Award on Preliminary Motion (24 February 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.60 Ruling on Privilege (6 September 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.98 Pren Nreka v Czech Republic Pren Nreka v Czech Republic Instrument invoked: Croatia–Czech Republic BIT (1996) Partial Award (5 February 2007) (not public) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 President Allende Foundation v Chile President Allende Foundation, Victor Pey Casado and Coral Pey Grebe v Republic of Chile (PCA Case No 2017-30) Instrument invoked: Chile–Spain BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.78

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Privatbank and Finilon v Russia PJSC CB PrivatBank and Finance Company Finilon LLC v Russian Federation (PCA Case No 2015-21) Instrument invoked: Russian Federation–Ukraine BIT (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 PV Investors v Spain The PV Investors v Kingdom of Spain (PCA Case No 2012-14) Instrument invoked: ECT (1996) Final Award (w/ Conc & Diss Op Brower) (28 February 2020) . . . . . . . . . . . . . . . . . . . . . 48.86 Renco v Peru The Renco Group, Inc v Republic of Peru (ICSID Case No UNCT/13/1) Instrument invoked: Peru–United States FTA (2006) Procedural Order No 1 (22 August 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.17 Partial Award on Jurisdiction (15 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.64, 26.92 Romak v Uzbekistan Romak SA (Switzerland) v Republic of Uzbekistan (PCA Case No AA280) Instrument invoked: Switzerland–Uzbekistan BIT (1993) Award (26 November 2009) . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 249, 253, 256, 296, 303, 492, 437 Ruby Roz v Kazakhstan Ruby Roz Agricol LLP v Republic of Kazakhstan Instrument invoked: Contract; Investment Law (Kazakhstan 1994) Award on Jurisdiction (1 August 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1083, 43.122 Saluka v Czech Republic Saluka Investments BV v Czech Republic Instrument invoked: Czech Republic–Netherlands BIT (1991) Decision on Jurisdiction over Counterclaim (7 May 2004) . . . . . . . . . . . . . . . . . . 46.50, 52, 74, 84, 102 Partial Award (17 March 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.675, 678, 46.50, 52 Sanum Investments v Laos Sanum Investments Ltd v Lao People’s Democratic Republic (PCA Case No 2013-13) Instrument invoked: China–Laos BIT (1993) Award on Jurisdiction (13 December 2013) . . . . . . . . . . . . . . . . . . . . . . . . 25.632, 1505, 26.172 SD Myers v Canada SD Myers, Inc v Government of Canada Instrument invoked: NAFTA (1992) Award on Liability (13 November 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.27 Seo v Korea Jin Hae Seo v Republic of Korea (HKIAC Case No HKIAC/18117) Instrument invoked: South Korea–United States FTA (2007) Final Award (27 September 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.240, 405 Serafín García Armas v Venezuela Serafín García Armas and Karina García Gruber v Bolivarian Republic of Venezuela (PCA Case No 2013-3) Instrument invoked: Spain–Venezuela BIT (1995) Decision on Jurisdiction (15 December 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.8

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Société Générale v Dominican Republic Société Générale In respect of DR Energy Holdings Ltd and Empresa Distribuidora de Electricidad del Este, SA v Dominican Republic (LCIA Case No UN 7927) Instrument invoked: Dominican Republic–France BIT (1999) Award on Jurisdiction (19 September 2008) . . . . . . . . . . . . . 25.221, 310, 318, 334, 339, 375 South American Silver v Bolivia South American Silver Ltd (Bermuda) v Plurinational State of Bolivia (PCA Case No 2013-15) Instrument invoked: Bolivia–United Kingdom BIT (1988) Award (22 November 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 337, 352, 366, 405 Spence v Costa Rica Spence International Investments and others v Republic of Costa Rica (ICSID Case No UNCT/13/2) Interim Award (corrected) (30 May 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.591, 26.214 Stabil and others v Russia Stabil LLC and others v Russian Federation (PCA Case No 2015-35) Instrument invoked: Russian Federation–Ukraine BIT (1998) Award (12 April 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 ST-AD v Bulgaria ST-AD GmbH v Republic of Bulgaria (PCA Case No 2011-06) Instrument invoked: Bulgaria–Germany BIT (1986) Award on Jurisdiction (18 July 2013) . . . . . . . . . . . . . . . . . . . . . . . . 25.289, 298, 347, 352, 358, 393, 708, 711, 43.124 Swembalt v Latvia Swembalt AB, Sweden v Republic of Latvia Instrument invoked: Latvia–Sweden BIT (1992) Award (23 October 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.464, 45.10, 55 Tembec and others v United States (! Canfor v United States) Terminal Forest Products v United States (! Canfor v United States) Thunderbird v Mexico International Thunderbird Gaming Corporation v United Mexican States Instrument invoked: NAFTA (1992) Award (26 January 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.325–6, 1407, 43.156 Ukrnafta v Russia PJSC Ukrnafta v Russian Federation (PCA Case No 2015-34) Instrument invoked: Russian Federation–Ukraine BIT (1998) Award (12 April 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Ulysseas v Ecuador Ulysseas, Inc v Republic of Ecuador (PCA Case No 2009-19) Instrument invoked: Ecuador–United States BIT (1993) Interim Award (28 September 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1108 UPS v Canada United Parcel Service of America Inc v Government of Canada Instrument invoked: NAFTA (1992) Decision on Petitions for Intervention and Participation as Amici Curiae (17 October 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.176

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Decision on Cabinet Privilege (8 October 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.89, 98 Award (24 May 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.946 Venezuela US v Venezuela Venezuela US, SRL (Barbados) v Bolivarian Republic of Venezuela (PCA Case No 2013-34) Instrument invoked: Barbados–Venezuela BIT (1994) Interim Award on Jurisdiction (26 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.8 Veteran Petroleum v Russia Veteran Petroleum Ltd (Cyprus) v Russian Federation (PCA Case No 2005-05/AA228) Instrument invoked: ECT (1994) Interim Award on Jurisdiction and Admissibility (30 November 2009) . . . . . . . . . . . . 25.310, 405, 26.67 WA Investments v Czech Republic WA Investments-Europa Nova Ltd (Cyprus) v Czech Republic (PCA Case No 2014-19) Instrument invoked: ECT (1996); Cyprus–Czech Republic BIT (2001) Award (15 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 Walter Bau v Thailand Walter Bau AG (in liquidation) v Kingdom of Thailand Instrument invoked: Germany–Thailand BIT (2002) Award (1 July 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.289 White Industries v India White Industries Australia Ltd v Republic of India Instrument invoked: Australia–India BIT (1999) Final Award (30 November 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.141, 147, 221, 298, 303 Wirtgen v Czech Republic Jürgen Wirtgen, Stefan Wirtgen, Gisela Wirtgen and JSW Solar (zwei) GmbH & Co KG v Czech Republic (PCA Case No 2014-03) Instrument invoked: Czech Republic–Germany BIT (1990) Final Award (w/ Diss Op Born) (11 October 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.86 WWM and Carrol v Kazakhstan World Wide Minerals v Republic of Kazakhstan Instrument invoked: Canada–USSR BIT (1989) Award (19 October 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.630 Yukos Universal v Russia Yukos Universal Ltd (Isle of Man) v Russian Federation (PCA Case No 2005-04/AA227) Instrument invoked: ECT (1994) Interim Award on Jurisdiction and Admissibility (30 November 2009) . . . . . . . 25.405, 463, 465, 1215, 26.67, 84, 208 Final Award (18 July 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.94

INTERNATIONAL COURTS AND TRIBUNALS Permanent Court of International Justice Case Concerning the Factory at Chorzów (Germany v Poland) (Merits) [1928] PCIJ Rep Series A No 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.245, 61.43, 44

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Case Concerning the Payment in Gold of Brazilian Federal Loans Contracted in France (France v Brazil) [1929] PCIJ Rep Series A No 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.327 Case Concerning the Payment of Various Serbian Loans Issued in France (France v Kingdom of the Serbs, Croats, and Slovenes) [1929] PCIJ Rep Series A No 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.298, 1120 Interpretation of Judgments Nos 7 and 8 in the Case Concerning the Factory at Chorzów (Germany v Poland) [1927] PCIJ Rep Series A No 13 . . . . . . . . . . . . . . . . . . . . . 50.9, 25 Mavrommatis Palestine Concessions (Greece v United Kingdom) [1924] PCIJ Rep Series A No 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.38, 57, 70, 934

International Court of Justice

Contentious Cases Aegean Sea Continental Shelf (Greece v Turkey) (Provisional Measures) [1976] ICJ Rep 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.88 Ahmadou Sadio Diallo (Guinea v DR Congo) (Preliminary Objections) [2007] ICJ Rep 582 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.343–4, 1180, 27.6 b8 Alleged Violations of Sovereign Rights and Maritime Spaces in the Caribbean Sea (Nicaragua v Colombia) (Preliminary Objections) [2016] ICJ Rep 3 . . . . . . . . . . . . . . . . . . . . . . . . 25.47 Alleged Violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Iran v United States) (Provisional Measures) [2018] ICJ Rep 623 . . . . . . . . . . . . . . . . . . . . 47.63 Application for Revision and Interpretation of the Judgment of 24 February 1982 in the Case Concerning the Continental Shelf (Tunisia v Libya) [1985] ICJ Rep 192 . . . . . . . .50.5, 51.24, 30 Application for Revision of the Judgment of 11 July 1996 in the Case Concerning Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v Yugoslavia) (Preliminary Objections) (Yugoslavia v Bosnia and Herzegovina) [2003] ICJ Rep 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.22, 26 Application for Revision of the Judgment of 11 September 1992 in the Case Concerning the Land, Island and Maritime Frontier Dispute (El Salvador v Honduras, Nicaragua intervening) (El Salvador v Honduras) [2003] ICJ Rep 392 . . . . . . . . . . . . . . . . . . . 51.23 Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v Yugoslavia) (Preliminary Objections) [1996] ICJ Rep 595 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.58, 51.22, 26 Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Croatia v Serbia) (Preliminary Objections) [2008] ICJ Rep 412 . . . . . . . . . . . . . . 25.58 Application of the Convention on the Prevention and Punishment of the Crime of Genocide (The Gambia v Myanmar) Order (23 January 2020) accessed 10 January 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.35 Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) (Preliminary Objections) [2011] ICJ Rep 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.47, 58 Joint Dissenting Opinion of President Owada, Judges Simma, Abraham and Donoghue and Judge ad hoc Gaja [2011] ICJ Rep 142 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.59 Arbitral Award of 31 July 1989 (Guinea-Bissau v Senegal) [1991] ICJ Rep 53 . . . . . . . 46.38 n46, 48.19, 48.49 n38, 49, 63, 52.7 Dissenting Opinion by Judges Aguilar Mawdsley and Ranjeva [1991] ICJ Rep 120 . . . . . . 46.38 Arbitral Award of 3 October 1899 (Guyana v Venezuela) Judgment (18 December 2020) accessed 10 January 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1

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Armed Activities on the Territory of the Congo (New Application: 2002) (DR Congo v Rwanda), [2006] ICJ Rep 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.59, 70 Arrest Warrant of 11 April 2000 (DR Congo v Belgium) [2002] ICJ Rep 3 . . . . . . . . . . 25.47, 78 Avena and other Mexican Nationals (Mexico v United States) [2004] ICJ Rep 41 . . . . . . 43.156 Barcelona Traction, Light and Power Company, Ltd (Belgium v Spain) (New Application: 1962) (Second Phase) [1970] ICJ Rep 3 . . . . 25.287, 343–4, 1180, 27.2, 3, 32, 42.18, 52.307 Case Concerning the Arbitral Award Made by the King of Spain on 23 December 1906 (Honduras v Nicaragua) [1960] ICJ Rep 192 . . . . . . . . . . . . . . . . . . . . . 48.63, 52.7, 431 Certain Property (Liechtenstein v Germany) (Preliminary Objections) [2005] ICJ Rep 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.68, 70 Corfu Channel (UK v Albania) (Merits) [1949] ICJ Rep 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.24 Corfu Channel (UK v Albania) (Compensation) [1949] ICJ Rep 244 . . . . . . . . . . . . . . . . . . . 52.307 East Timor (Portugal v Australia) [1995] ICJ Rep 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.68, 70 Elettronica Sicula SpA (ELSI) (United States v Italy) [1989] ICJ Rep 15 . . . . . . . . . . . . . . . 25.287 Fisheries Jurisdiction (Spain v Canada) (Jurisdiction) [1998] ICJ Rep 432 . . . . . . . . . . . . . 42.318 Fisheries Jurisdiction (Germany v Iceland) (Merits) [1974] ICJ Rep 175 . . . . . . . . . . . . . .25.1052 Interhandel (Switzerland v United States) [1959] ICJ Rep 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.1 Jadhav (India v Pakistan) (Provisional Measures) [2017] ICJ Rep 231 . . . . . . . . . . . . . . . . . . 47.63 Jadhav (India v Pakistan) (Merits) [2019] ICJ Rep 418 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.470 Jurisdictional Immunities of the State (Germany v Italy, Greece intervening) [2012] ICJ Rep 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.15, 63 LaGrand (Germany v United States) [1999] ICJ Rep 1045 . . . . . . . . . . . . . . . . . . . . Final Clause.3 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States) (Jurisdiction and Admissibility) [1984] ICJ Rep 437 . . . . . . . . . . . . . . . . . 25.984, 43.156 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States) (Merits) [1986] ICJ Rep 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.41 Northern Cameroons (Cameroon v United Kingdom) [1963] ICJ Rep 15 . . . . . . . . . . . . . . . . 25.70 Nottebohm (Liechtenstein v Guatemala) (Preliminary Objection) [1953] ICJ Rep 111 . . . . 25.47 Nottebohm (Liechtenstein v Guatemala) (Second Phase) [1955] ICJ Rep 4 25.1118, 1122, 1123, 1125 Nuclear Tests (Australia v France) [1974] ICJ Rep 253 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.78 Nuclear Tests (New Zealand v France) [1974] ICJ Rep 457 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.78 Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v India) [2016] ICJ Rep 255 . . . . . 25.47, 70, 78, 79 Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v Pakistan) [2016] ICJ Rep 552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.47, 70 Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v United Kingdom) [2016] ICJ Rep 833 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.47, 70 Oil Platforms (Iran v United States) (Preliminary Objection) [1996] ICJ Rep 803 Separate Opinion Judge Higgins [1996] ICJ Rep 847 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.411 Passage through the Great Belt (Finland v Denmark) (Provisional Measures) [1991] ICJ Rep 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.99 Pulp Mills on the River Uruguay (Argentina v Uruguay) (Provisional Measures) [2007] ICJ Rep 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.63 Questions of Interpretation and Application of the 1971 Montreal Convention Arising from the Aerial Incident at Lockerbie (Libya v United States) (Preliminary Objections) [1998] ICJ Rep 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.47, 41.86

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Questions Relating to the Obligation to Prosecute or Extradite (Belgium v Senegal) [2012] ICJ Rep 422 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.35 Request for Interpretation of the Judgment of 15 June 1962 in the Case Concerning the Temple of Preah Vihear (Cambodia v Thailand) [2013] ICJ Rep 281 . . . . . . . . . . . . . . . . 50.5, 59.1 Request for Interpretation of the Judgment of 20 November 1950 in the Asylum Case (Colombia v Peru) [1950] ICJ Rep 395 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.5, 6, 25 Right of Passage over Indian Territory (Portugal v India) (Preliminary Objections) [1957] ICJ Rep 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.47 South West Africa (Liberia v South Africa) (Preliminary Objections) [1962] ICJ Rep 319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.70

Advisory Opinions Application for Review of Judgement No 158 of the United Nations Administrative Tribunal [1973] ICJ Rep 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.63 Effect of Awards of Compensation Made by the UN Administrative Tribunal [1954] ICJ Rep 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.2 Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (First Phase) [1950] ICJ Rep 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.38, 70 Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (Second Phase) [1950] ICJ Rep 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.5 Judgments of the Administrative Tribunal of the ILO upon Complaints Made against the UNESCO [1956] ICJ Rep 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.307 Legality of the Use by a State of Nuclear Weapons in Armed Conflict [1996] ICJ Rep 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.21 Obligation to Arbitrate under Section 21 of the United Nations Headquarters Agreement of 26 June 1947 [1988] ICJ Rep 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.70 Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide [1951] ICJ Rep 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.10

International Tribunal for the Law of the Sea ‘ARA Libertad’ (Argentina v Ghana) (Provisional Measures, Order of 15 December 2012) ITLOS Reports 2012, 326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53, 55.62 ‘Arctic Sunrise’ (Netherlands v Russia) (Provisional Measures, Order of 22 November 2013) ITLOS Reports 2013, 230 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1, 47.53 Detention of Three Ukrainian Naval Vessels (Ukraine v Russia) (Provisional Measures, Order of 25 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 ‘Enrica Lexie’ Incident (Italy v India) (Provisional Measures, Order of 24 August 2015) ITLOS Reports 2015, 182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 Land Reclamation by Singapore In and Around the Straits of Johor (Malaysia v Singapore) (Provisional Measures, Order of 8 October 2003) ITLOS Reports 2003, 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 Mox Plant (Ireland v United Kingdom) (Provisional Measures, Order of 3 December 2001) ITLOS Reports 2001, 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 M/T ‘San Pedro Pio’ (Switzerland v Nigeria) (Provisional Measures, Order of 6 July 2019) accessed 10 January 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 Southern Bluefin Tuna (Australia and New Zealand v Japan) (Provisional Measures, Order of 27 August 1999) ITLOS Reports 1999, 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53

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Russia: Measures Concerning Traffic in Transit, Report of the Panel (5 April 2019) WT/DS512/7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.99 Saudi Arabia: Measures Concerning the Protection of Intellectual Property Rights, Report of the Panel (16 June 2020) WT/DS567/7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.99

World Bank Administrative Tribunal Denis v International Bank for Reconstruction and Development, World Bank Administrative Tribunal Case No 458, Judgment (11 October 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.6

Inter-American Court of Human Rights Genie-Lacayo v Nicaragua (Application for Judicial Review of the Judgment of Merits, Reparations and Costs) Inter-American Court of Human Rights Series C No 45 (13 September 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.3

Court of Justice of the European Union Case 56/70 Fonderie Acciaierie Giovanni Mandelli v Commission [1971] ECR 1 . . . . . . . . 51.30 Case C-284/16 Slovak Republic v Achmea BV (Judgment, 6 March 2018) ECLI:EU:C:2018:158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1089, 41.34, 53.16, 54.119–23 Case C-638/19 P Commission v European Food and others [2019] OJ C 348/14 . . . . . . . 54.118 Cases T-624/15, T-694/15 and T-704/15 European Food and Others v Commission (Judgment, 18 June 2019) ECLI:EU:T:2019:423 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.113, 118, 69.16 Opinion 1/17 CETA (30 April 2019) ECLI:EU:C:2019:341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.19

Iran–United States Claims Tribunal Birnbaum v Iran (1995) 31 Iran–USCTR 286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.3 Iran v United States, Case No A/18 (1984) 5 Iran–USCTR 251 . . . . . . . . . . . . . . . . . . . . . . .25.1153 Iran v United States, Cases Nos A3, A8, A9, A14 and B61 (2011) 39 Iran-USCTR 311 . . . . 51.3 Mark Dallal v Iran (1984) 5 Iran–USCTR 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.3 Ram International v Air Force of Iran (1993) 29 Iran–USCTR 383 . . . . . . . . . . . . . . . . . . . . . . 51.3 Saghi v Iran (1993) 29 Iran–USCTR 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.318 Sylvania Technical Systems v Iran, Award (27 June 1985) Sep Op Holtzmann, 8 Iran-USCTR 329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.49 United States v Iran (1997) 33 Iran–USCTR 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.3

Mixed Claims Commissions Crisanto Medina & Sons v Costa Rica, Decision of the Umpire (31 December 1862) (2011) XXIX UNRIAA 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1133 Flegenheimer Case (United States v Italy) (1958) (1965) XIV UNRIAA 327, (1963) 25 ILR 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1133 Flutie Cases (United States v Venezuela) (1904) (1960) IX UNRIAA 148 . . . . . . . . . . . . .25.1133

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Heim et Chamant v État Allemand, Award (7 August and 22 September 1922) (1923) 3 Recueil des Décisions des Tribunaux Arbitraux Mixtes 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.22 Lehigh Valley Railroad Company and others (United States) v Germany (1933) (1958) VIII UNRIAA 160 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.3

Inter-State Arbitrations ARA Libertad Arbitration (Argentina v Ghana), PCA Case No 2013-11, Notice of Arbitration by the Argentine Republic (29 October 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Arctic Sunrise Arbitration (Netherlands v Russia), PCA Case No 2014-2, Award on the Merits (14 August 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Delimitation of the Continental Shelf between the United Kingdom of Great Britain and Northern Ireland and the French Republic (France v United Kingdom) (Interpretation) (14 March 1978) (1980) XVIII UNRIAA 271, (1979) 54 ILR 139 . . . . . . . . . . . . . . . . . . . . . . 50.6, 9 Ecuador v United States, PCA Case No 2012-5 (UNCITRAL) Request for Arbitration (28 June 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.29 Award (29 September 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.69, 70, 72, 74, 27.29, 64.14 Island of Palmas (Netherlands v United States) (4 April 1928) (1949) II UNRIAA 829 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.937 Italy v Cuba, Sentence préliminaire (15 March 2005); Sentence finale (with Dissenting Opinion Attila Tanzi) (15 January 2008) accessed 27 August 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 27.30 South China Sea Arbitration (Philippines v China), PCA Case No 2013-19, Award (12 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Southern Bluefin Tuna (New Zealand–Japan, Australia–Japan), Award on Jurisdiction and Admissibility (4 August 2000) XXIII RIAA 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.519

Inter-State Conciliation Timor Sea Conciliation (Timor-Leste v Australia), PCA Case No 2016-10 (9 May 2018) . . . . 28.2

NATIONAL COURTS Argentina CCI – Compañía de Concesiones de Infraestructura SA s/ Pedido de Quiebra (por República de Perú), Juzgado Nacional en lo Comercial N 3, Secretaría N 6, Exp, N 8030/2015, Buenos Aires Commercial Court of Appeals (8 August 2015) . . . . . . . . . 54.108, 69.15 Pérez Aznar, Facundo Pablo v Procuración del Tesoro de La Nación y otros/Amparo Ley 16.986, Camara Federal De La Plata (27 December 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.153

Australia Eiser v Spain, Federal Court of Australia, File Nos NSD 601 and 602 of 2019, Judgment (24 February 2020) [2020] FCA 157 . . . . . . . . . . . . . . .44.92, 54.55, 75–7, 82, 55.7, 22, 42–3, 84–5

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Infrastructure Services Luxembourg Sarl and Energía Solar Luxembourg Sarl v Kingdom of Spain, Federal Court of Australia, File No NSD 602 of 2019, Order (1 August 2019) [2019] FCA 1220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.40 Lahoud v DR Congo, Federal Court of Australia, File No NSD 846 of 2017, Judgment (8 August 2017) [2017] FCA 982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.7, 55.35, 42

Austria Execution of Embassy Account, Supreme Court (Oberster Gerichtshof) (30 April 1986) (1988) 77 ILR 489, (1986) 108 Juristische Blätter 733 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.71

Belgium Guinea v Maritime International Nominees Establishment (MINE), Court of First Instance of Antwerp (27 September 1985) (1997) 4 ICSID Reports 32; (1985) 24 ILM 1639; (1993) 1 ICSID Review 380; (1987) 12 YB Comm Arb 181 . . . . . . . . . . . . . . . . . . . . 26.15, 274 Micula v Romania, Brussels Court of First Instance, Judgment (25 January 2016); Brussels Appeals Court, Case Nos 2016/AR/393 and 2016/AR/394 (12 March 2019) accessed 10 January 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.30 Philippe Gruslin v La Banque Internationale pour la Reconstruction et le Développement (BIRD), Brussels Court of First Instance, Judgment (19 August 2005) (not published) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.6, 20.2 Republic of Kazakhstan v Stati Anatolie and others, Dutch Speaking Court of First Instance of Brussels, Case No 2017/4282/A (25 May 2018) (unofficial English translation at accessed 10 January 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . 55.49

Canada Bayview v Mexico, Ontario Superior Court of Justice, Case No 07-CV-340139-PD2 (5 May 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 Belokon and others v Kyrgyz Republic, Ontario Superior Court of Justice (11 July 2016) 2016 ONSC 4506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.41 Canada v Mobil and others, Ontario Superior Court of Justice (16 February 2016) (2016) 3 Ontario Reports 506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 Crystallex v Venezuela, Ontario Superior Court of Justice, Case No CV-16-11340-00CL (20 July 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.10 United Mexican States v Feldman Karpa, Ontario Superior Court of Justice (3 December 2003); Ontario Court of Appeal (11 January 2005) (2005) 8 ICSID Reports 500; (2006) 9 ICSID Reports 508 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 United Mexican States v Metalclad, Supreme Court of British Columbia (2 May 2001) [2001] BCSC 664, 1529; (2002) 5 ICSID Reports 236; (2004) 6 ICSID Reports 52 . . . . . . . . . . 53.9, 10

France Arab Republic of Egypt v Southern Pacific Properties Ltd and Southern Pacific Properties (Middle East) Ltd, Cour d’appel, Paris (12 July 1984); Cour de cassation (6 January 1987) (1995) 3 ICSID Reports 79, 96; (1984) 23 ILM 1048; (1987) 26 ILM 1004; (1991) 86 ILR 475, 490; (1985) 112 JDI 130 . . . . . . . . . . . . . . . . . . . . . . . . . . 26.47, 52.5

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Benvenuti et Bonfant SARL v Banque Commercial Congolaise and others, Cour de cassation (21 July 1987) (1993) 1 ICSID Reports 373; (1990) 82 ILR 91; (1988) 115 JDI 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.18, 54.62, 55.127 Benvenuti et Bonfant SARL v Government of the People’s Republic of the Congo, Tribunal de grande instance, Paris (23 December 1980 and 13 January 1981); Cour d’appel, Paris (26 June 1981) (1993) 1 ICSID Reports 368; (1981) 20 ILM 877; (1984) 65 ILR 88, 91; (1982) 7 YB Comm Arb 159; (1981) 108 JDI 365, 843 . . . . . . . . . . . . . . . . . . 54.59–61 Commissions Import Export v Congo, Cour de cassation, Case No 13-17751 (13 May 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.101 Guinea v Atlantic Triton Co, Cour d’appel, Rennes (26 October 1984); Cour de cassation (18 November 1986) (1995) 3 ICSID Reports 3, 10; (1985) 24 ILM 340; (1987) 26 ILM 373; (1990) 82 ILR 76, 83; (1987) 2 ICSID Review 182; (1986) 11 YB Comm Arb 215; (1987) 12 YB Comm Arb 103; (1985) 112 JDI 925; (1987) 114 JDI 125 25.276–9, 47.36 Procureur de la République v Société LIAMCO, Tribunal de grande instance, Paris (5 March 1979) (1979) 106 JDI 857 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.44 République Islamique d’Iran et consorts v Sociétés Eurodif et Sofidif, Cour d’appel, Paris (21 April 1982) (1984) 65 ILR 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.23, 94 Rusoro v Venezuela, Case No RG 16/20822-NPortalis 35L7-V-B7A-BZ2EA, Cour d’appel, Paris (29 January 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 Ryan and others v Poland, Case No RG 16/24358-NPortalis 35L7-V-B7A-B2ESP, Cour d’appel, Paris (2 April 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 SOABI v Senegal, Tribunal de grande instance, Paris (14 November 1988); Cour d’appel, Paris (5 December 1989); Cour de cassation (11 June 1991) (1994) 2 ICSID Reports 337, 341; (1990) 29 ILM 1341; (1991) 30 ILM 1167; (1990) 5 ICSID Review 135; (1991) 6 ICSID Review 598; (1990) 117 JDI 141; (1991) 118 JDI 1005 . . . . . . . . . . . . .54.63–5 Socialist Federal Republic of Yugoslavia v Societé Européenne d’Etudes et d’Entreprises, Tribunal de grande instance, Paris (6 July 1970) (1994) 65 ILR 46 . . . . . . . . . . . . 55.94 Société Bec Frères v Office des Céréales de Tunisie, Cour d’appel, Rouen (20 June 1996) [1997] Revue de l’arbitrage 263; (1999) 113 ILR 485 . . . . . . . . . . . . . . . . . . . . . . . . 55.23, 55.94 Société Creighton v ministre des finances de l’Etat du Qatar et autre, Cour de cassation (1re chambre civile) (6 July 2000) Bulletin civil I, n 207 [2001] Revue de l’arbitrage 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.23, 94 Société NML Capital v Argentina, Cour de cassation, Case No 09-72 057, Appeal Judgment (28 September 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.100 Société NML Capital v Argentina, Cour de cassation, Case No 11-10 450, ILDC 2075, Appeal Judgment (28 March 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.100 Socifros v URSS, Cour d’appel, Aix-en-Provence (23 November 1938) (1938/1940) 9 Ann Dig 236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.94 Venezuela v Gold Reserve, Case No RG 14/21103, joint with Case No RG 15/00496, Cour d’appel, Paris (7 February 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9

Germany

Federal Constitutional Court (Bundesverfassungsgericht) National Iranian Oil Company (12 April 1983) BVerfGE 64, 165; (1984) 65 ILR 215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.51, 136 Philippine Embassy Bank Account (13 December 1977) BVerfGE 46, 399; (1984) 65 ILR 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.184, 55.51, 53, 71 Waiver of Diplomatic Immunity (6 December 2006) BVerfGE 117, 141; ILDC 465 . . . . 55.100

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Federal Supreme Court (Bundesgerichtshof) Case No VII ZB 9/05, Order (4 October 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.51 Case No VII ZB 37/09, Order (1 October 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.52 Case No III ZB 40/12, Order (30 January 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.23, 54

Higher Regional Courts (Oberlandesgerichte) Oberlandesgericht Frankfurt, Case No 26 W 101/02 (26 September 2002) . . . . . . . . . . . . . . . 55.53 Kammergericht Berlin, Case No 25 W 15/03, Decision (3 December 2003) [2004] SchiedsVZ 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.52 Kammergericht Berlin, Case No 1 W 276/09, Decision (14 June 2010) (Sedelmayer v Russia) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.52

Regional Courts (Landgerichte) Landgericht Frankfurt (2 December 1975) (Central Bank of Nigeria) (1984) 65 ILR 131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.184, 55.20, 51 Landgericht Hagen, Case No 3 T 405/07, Decision (16 January 2008) . . . . . . . . . . . . . . . . . . 55.53

Ghana The Republic v High Court (Comm Div) Accra, Supreme Court, Case No J5/10/2013, Ruling (20 June 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62

Italy Benamar v Embassy of the Democratic and Popular Republic of Algeria, Corte di cassazione (4 and 25 May 1989) (1990) 84 AJIL 573; (1989) 72 Riv Dir Int 416 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.71 Condor and Filvem v Ministry of Justice, Corte costituzionale, Case No 329 (15 July 1992) (1996) 101 ILR 394; (1993) 33 ILM 593 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.26, 61 Socialist People’s Libyan Arab Jamahiriya v Rossbeton, Corte di cassazione (25 May 1989) (1990) 84 AJIL 573; (1989) 72 Riv Dir Int 691 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.26

Netherlands MK v State Secretary for Justice, Council of State, President of the Judicial Division (24 November 1986) (1994) 94 ILR 357 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.71 NV Cabolent v National Iranian Oil Company, Court of Appeal, The Hague (28 November 1968) (1974) 47 ILR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 55.22 Pichon-Duverger v International Bureau of the Permanent Court of Arbitration, District Court, The Hague (sub-district section), Judgment in the Incidental Proceedings No 262987/ 02-3417 (27 June 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.7 Republic of Ghana v Telekom Malaysia Berhad, District Court, The Hague, Challenge No 13/2004, Petition No HA/RK/2004/667, Judgment (18 October 2004); Challenge No 17/2004, Petition No HA/RK/2004/778, Judgment (5 November 2004) (unofficial English translations at (2005) 2(1) TDM 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.74 n145

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Russian Federation v Veteran Petroleum Ltd, Yukos Universal Ltd, and Hulley Enterprises Ltd, District Court, The Hague, Judgment (20 April 2016); Court of Appeal, The Hague, Judgment (18 February 2020) (unofficial translations at accessed 10 January 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.95 SEEE v Yugoslavia, Supreme Court (26 October 1973) (1984) 65 ILR 360 . . . . . . . . . . . . . . 54.65 Southern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt, District Court, Amsterdam (12 July 1984) (1995) 3 ICSID Reports 92 . . . . . . . . . . . . . . . . . . . . . . . 54.65

New Zealand Attorney-General v Mobil Oil NZ Ltd, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117; (1987) 2 ICSID Review 497 . . . . . . 25.554, 25.1306, 25.1458, 26.256–9, 37.32, 38.30, 39.19, 41.71, 42.48, 44.29, 60.10

Pakistan SGS v Pakistan, Supreme Court of Pakistan (3 July 2002) (2005) 8 ICSID Reports 352 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.172, 26.260–3, 41.27, 47.158–63

Slovak Republic CSOB v Slovakia, Supreme Court of the Slovak Republic (23 September 1999) (unreported) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.40

Spain Diana Gayle Abbott v República de Sudáfrica, Constitutional Court of, Decision No 107 (1 July 1992) (1999) 113 ILR 413 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.71 Pey Casado v Chile, Court of First Instance No 101 of Madrid (Execution of Award) (4 July 2013) (1999) 113 ILR 413 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.115

Sweden Libyan American Oil Company v Socialist People’s Arab Republic of Libya, Sweden, Svea Court of Appeals (18 June 1980) (1982) 62 ILR 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.23 Micula v Romania, Decision of the Nacka District Court in Stockholm (23 January 2019) (unofficial English translation at accessed 10 January 2021) . . . 54.117, 69.16 Russian Federation v Franz Sedelmayer, Swedish Supreme Court, Case No Ö 170-10 (1 July 2011) (unofficial English translation at accessed 10 January 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.50

Switzerland A Ltd v Uzbekistan, Federal Tribunal, Case No 5A_942/2017, Judgment (7 September 2018) (unofficial English translation at accessed 10 January 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.27, 55 Arab Republic of Egypt v CINETEL, Federal Tribunal (20 July 1979) (1984) 65 ILR 425 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.20, 54

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Clorox v Venezuela, Federal Tribunal, Case No 4A_306/2019, Judgment (25 March 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.362, 405 CMS v X, Bezirksgericht Zürich, Case No EQ080051/U, Decision (20 March 2008) (unpublished) (reported in Sandrine Giroud, ‘Enforcement Against State Assets and Execution of ICSID Awards in Switzerland: How Swiss Courts Deal with Immunity Defences’ (2012) 30(4) ASA Bulletin 758) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.129 Republic of Guinea v Maritime International Nominees Establishment (MINE), Tribunal fédéral (4 December 1985); Tribunal de première instance, Geneva (13 March 1986); Autorité de surveillance des offices de poursuite pour dettes et de faillite, Genève (7 October 1986) (1997) 4 ICSID Reports 35 . . . . . . . . . . . . . . . . . . . 26.16–19, 275, 47.38, 78, 149 Sistem Mühendislik v X, Federal Tribunal, Case No 5A_681/2011, Decision (23 November 2011) (2012) 30(4) ASA Bulletin 819 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.54 Socialist People’s Libyan Arab Jamahiriya v LIAMCO, Federal Tribunal (19 June 1980) (1981) 20 ILM 151; BGE 106 Ia 142 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.27 United Arab Republic v Mrs X, Federal Tribunal, Case No BGE 86 I 23, Judgment (10 February 1960) (1961) 55 AJIL 167; (1984) 65 ILR 385 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.54

United Kingdom AIG Capital Partners Inc and another v Republic of Kazakhstan (National Bank of Kazakhstan Intervening), High Court, Queen’s Bench Division (Commercial Court) (20 October 2005); [2005] EWHC 2239 (Comm); (2007) 11 ICSID Reports 118 . . . . . . . . . . 54.73, 55.39–40, 78, 128 Alcom v Colombia, House of Lords (12 April 1984) (1984) 23 ILM 719 . . . . . . . . . . . . . . . . 55.71 An International Bank v Zambia, High Court, Queen’s Bench Division (23 May 1997) (2001) 118 ILR 602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.91 Bogdan Alexander Adamescu v Bucharest Appeal Court Criminal Division, Romania [2019] EWHC 525 (Admin) (6 March 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.43, 189 Bucharest Appeal Court Criminal Division v Bogdan Alexander Adamescu, Westminster Magistrates’ Court, Judgment of District Judge Zani (13 April 2018) . . . . . 47.43, 190 Duff Development v Kelantan Government [1923] 1 Ch 385 (CA); (1933) 2 ILR 124; [1924] AC 797 (HL) (10 April 1924) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.23 Koza Ltd and Hamdi Akin Ipek v Koza Altin [2020] EWHC 654 (Ch) (23 March 2020); [2020] EWCA Civ 2018 (31 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.281 Micula and others v Romania [2018] EWCA Civ 1801 (27 July 2018); [2020] UKSC 5 (19 February 2020); (2022) 196 ILR 629 . . . . . . . . . . . 54.46–8, 76, 109, 113–15, 69.16 Pao Tatneft v Ukraine [2018] EWHC 1797 (Comm) (13 July 2018) . . . . . 25.366, 412, 421

United States of America Banco Central de Reserva del Peru v The Riggs National Bank of Washington DC, US District Court, District of Columbia (12 December 1994) (1996) 35 ILM 1159 . . . . . . . . 55.77 The Belize Bank Ltd v Belize, Case No 14-cv-659 (APM), US District Court, District of Columbia (6 June 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Binder-Haas Claim, Foreign Claims Settlement Commission, Decision (26 November 1954) (1957) 20 ILR 236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.312 Birch Shipping Corp v Embassy of the United Republic of Tanzania, US District Court, District of Columbia (18 November 1980) (1982) 63 ILR 524 . . . . . . . . . . . . . . . . . . . . . . . 55.72, 87

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Blue Ridge v Argentina, US District Court, Southern District, New York (30 September 2012) 902 F Supp 2d; US Court of Appeals for the Second Circuit (19 August 2013) 735 F3d 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.71, 77, 140–1, 55.83 Chevron Corp, In re Application of, Case No 10 MC 00002 (LAK), US District Court, Southern District, New York (20 October 2010 and 4 November 2010) . . . . . . . . . . . . . . . . 26.271 Chevron v Ecuador, Court of Appeals, District of Columbia Circuit (4 August 2014) 795 F3d 200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Continental Casualty v Argentina, US District Court, Eastern District Virginia (11 September 20) 893 F Supp 2d 747 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Diag Human v Czech Republic, Case No 14-7142, Court of Appeals, District of Columbia Circuit (31 May 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Entes v Kyrgyz Republic, Case No CV 18-2228 (RC), 2020 WL 1935554, US District Court, District of Columbia (22 April 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Flores v S Peru Copper Corp, Court of Appeals, Second Circuit (29 August 2003) 414 F3d 233 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.83 Funnekotter and others v Zimbabwe, Case No 09 Civ 8168 (CM) (THK), US District Court, Southern District, New York (10 November 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Hanwei Guo, In re Application and Petition of, Court of Appeals, Second Circuit (8 July 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.271 Liberian Eastern Timber Corp [LETCO] v The Government of the Republic of Liberia, US District Court, Southern District, New York (5 September 1986 and 12 December 1986); US District Court, District of Columbia (16 April 1987) (1994) 2 ICSID Reports 383, 390; (1987) 26 ILM 695; (1992) 89 ILR 355, 360; (1987) 2 ICSID Review 187; (1988) 3 ICSID Review 161 . . . . . . . . . . . . 53.50, 54.66–71, 129, 144, 55.28, 34, 36–7, 72–5, 83 Loewen v United States, US District Court, District of Columbia (31 October 2005) (2006) 10 ICSID Reports 448 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 Maritime International Nominees Establishment (MINE) v Republic of Guinea, US District Court, District of Columbia (12 January 1981); Court of Appeals, District of Columbia Circuit (12 November 1982) (1997) 4 ICSID Reports 3, 8; (1981) 20 ILM 666, 1436, 1480; (1982) 21 ILM 1355; (1983) 22 ILM 86; (1982) 63 ILR 535; (1987) 72 ILR 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.10–13, 55.36–7, 62.5 Masdar v Spain, Case No 18-2254 (JEB), US District Court, District of Columbia (18 September 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.49 Micula and others v Romania I, US District Court, District of Columbia (18 May 2015) 104 F Supp 3d 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.130 Micula and others v Romania II, US District Court, Southern District, New York (5 August 2015) 15 Misc 107 (Part I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.72, 130, 144 Micula and others v Romania III, US District Court, District of Columbia (11 September 2019) (404 F Supp 3d 265); Court of Appeals for the District of Columbia Circuit (19 May 2020) (US App LEXIS 16008); (2002) 196 ILR 683 and 707 . . . . . . . . . . 53.30, 69.16 Mobil and others v Venezuela, US District Court, Southern District, New York (13 February 2015) 87 F Supp 573; Court of Appeals, Second Circuit (11 July 2017) 863 F3d 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.77, 128, 131, 132, 55.31 OI European Group v Venezuela, Case No 16-1533 (ABJ), US District Court, District of Columbia (21 May 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.127, 128 Pao Tatneft v Ukraine, Case No 17-582 (CKK), US District Court, District of Columbia (19 March 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34, 83 Republican Party of Minnesota v White, United States Supreme Court (27 June 2002) 536 US 765 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.41

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Salini v Morocco, Case No 14-cv-2036 (TSC), US District Court, District of Columbia (10 February 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 Servotronics, Inc v Rolls Royce Plc and the Boeing Company, Case No 19-1847, Court of Appeals, Seventh Circuit (22 September 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.271 Siag v Egypt, Case No M-82, 2009 WL 1834562, US District Court, Southern District, New York (19 June 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.131, 55.34 Stati v Kazakhstan, Case No 14-1638 (ABJ), US District Court, District of Columbia (5 August 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 TECO Guatemala Holdings v Guatemala, Case No 17-102 (RDM), US District Court, District of Columbia (1 October 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.49, 132 Unión Fenosa Gas v Egypt, Case No 18-2395 (JEB), US District Court, District of Columbia (4 June 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.49

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TABLE OF INSTRUMENTS

NOTE: Bold numbers in the Table refer to the Articles of the ICSID Convention; lean numbers refer to paragraphs in the Commentary. ICSID CONVENTION INSTRUMENTS Administrative and Financial Regulations (Provisional Rules) (1967)...... . . . . . . . . . . . . 44.47 Regulation 21(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5 Administrative and Financial Regulations (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.47 Regulation 22, Notes to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.33 Administrative and Financial Regulations (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.10, 60.5 Administrative and Financial Regulations (2006) . . . . . . . . 43.4, 44.5–7, 45, 47, 47.209, 59.8, 10 n11, 60.5, 61.11 Regulation 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.4 n5 Regulation 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Regulations 1–7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Regulation 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Regulation 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Regulation 4. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Regulation 4(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Regulation 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8, 65.3 n2 Regulation 5(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.97 Regulation 6(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.47 Regulation 7(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11 Regulation 7(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.12 Regulation 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 Regulation 8(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.6 Regulation 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8 Regulation 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.9 Regulation 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7, 40.28 Regulation 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.47, 60.7–8, 18, 61.82 n159 Regulation 14(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.93, 60.2, 5, 11, 14 Regulation 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.18–19, 61.81 Regulation 14(3) . . . . . . . . . . . . 45.28, 49, 66, 51.4, 52.111, 59.14, 60.2, 8, 11, 19, 61.9, 82–3 Regulation 14(3)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.61, 66, 61.4, 38, 85, 89, 113 Regulation 14(3)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.4, 38, 92–3 Regulation 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.16 Regulation 15(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.90

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schreuer’s commentary on the icsid convention

Regulation 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.16, 52.9–13, 92, 59.9 Regulation 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.19 Regulation 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.7 Regulation 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.3 Regulation 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.2, 16.4 Regulation 21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2, 34.24 Regulation 21(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5 Regulation 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 152, 158, 47.134, 214 Regulation 22(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.153 Regulation 22(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.164 Regulation 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.61, 44.152 Regulation 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.57, 44.136 Regulation 24(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.14 Regulation 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.146, 57.97, 59.15 Regulation 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 62.15, 18, 63.25 Regulation 27(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.97 Regulation 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.9 Regulation 28(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.39, 96, 50.35, 54, 51.45, 52.736, 54.136 Regulation 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.32, 51.35, 52.555 Regulation 29(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.130 Regulation 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.16, 28, 43.59, 44.22 Regulation 30(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.53 Regulation 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.11, 22.4, 5 Regulation 32(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 Regulation 32(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.5 Regulation 32(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 Regulation 32(2)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.9 Regulation 32(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 Regulation 32(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.9 Regulation 32(3)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.5 Regulation 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.3, 75.4 Regulation 34(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.93, 68.22, Final Clause.2 Regulation 34(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Final Clause.2 Arbitration Rules (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.14, 39 Introductory Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.893, 44.6, 7, 48, 53, 61 Introductory Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.7, 17 Rule 1 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.3 Note I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.2, 40.27 Rule 2 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.11 Note F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.11 Rule 4 Note G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.17 Rule 4(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.20 Rule 5 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.17 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.17, 19 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.19

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Rule 6 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.22 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.22 Rule 6(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.206 Rule 8 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.25 Rule 9 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.21 Rule 11 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.19 Rule 14 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.16 Rule 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.206 Rule 16 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.5 Rule 18 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.107 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.107 Rule 20 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.33 Rule 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.39, 48.101 Rule 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.97 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.6 Rule 25(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.31 Rule 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.20 Rule 27 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.43, 57.70, 61.70 Rule 28 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.125 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.127 Rule 29 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.129 Rule 30 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.133 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.133 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.134 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.135 Note F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.144 Rule 31 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.146 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.138 Rule 31(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.206 Rule 32 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.16 Rule 33 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.19, 146 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.94 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.46 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.65, 86 Rule 35 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.114

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schreuer’s commentary on the icsid convention

Rule 36 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.163 Rule 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.39 Rule 37(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.151 Rule 39 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53, 191 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.45 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.76 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.16 Rule 40 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.49 Note B(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.68, 82 Note B(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.93 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.19 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.20 Rule 41 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.20 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.56 n79 Note F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.126 Rule 42 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.64 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.89, 93 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.79 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.118, 120, 43.38, 45.13 Rule 43 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.90, 49.90, 61.112 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.91, 49.91 Rule 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.121, 123 Rule 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.14 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.17 Rule 48 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.35, 121, 49.7 Rule 48(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.206, 48.131 Rule 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.29 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.31 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.32 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.35 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.32 Rule 49(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.33 Rule 49(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.51 Rule 49(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.32 Rule 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.18 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.31, 88, 50.27, 51.14, 52.96 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.18, 52.105 Rule 51 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.40 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.47 Rule 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.696 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.33 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.33, 52.697

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Rule 54 Note B(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.54 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.54, 51.43, 52.721, 731 Rule 55 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.808, 840 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.812 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.819 Arbitration Rules (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.272, 44.39, 48.101 Rule 4(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.20 Rule 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.39, 48.101 Rule 21(1)(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.39 Rule 21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.101–2 Rule 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.13–14 Rule 39(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.284, 44.39 Rule 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.46 Rule 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.121, 49.14 Rule 48(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.131 Rule 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.29 Arbitration Rules (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.40 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.13–14, 20 Rule 41(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.162 n223 Arbitration Rules (2006) . . . . . . . . . . . . 25.667, 758, 893, 36.3, 32, 34, 41.93–6, 123, 157, 43.4, 44.1, 2, 4, 5–8, 9–12, 14, 15–44, 47.104–5, 212, 218 14(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.17 Rule 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.9 Rule 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.11, 50.47 Rule 1(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 39.14–16, 57.105 Rule 1(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 35.2, 37.4, 40.26–7, 52.812 Rules 1–6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.328 Rules 1–7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 Rule 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 50.47 Rule 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.42, 58, 38.11 Rules 2–5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Rule 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 52.576 Rule 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 Rule 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.3, 38.13, 44.40, 45.43–4, 52.576 Rule 4(3)–(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 Rule 4(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.3, 48.10 Rule 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 37.11, 15, 38.11 Rule 5(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.21 Rule 5(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.19 Rule 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 37.10, 44.41, 52.324, 351, 585, 601 Rule 6(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.10, 16, 20, 22, 56.5, 57.16 Rule 6(2) . 37.18, 40.19–22, 44.142, 47.206, 48.19, 22, 50.40, 52.324, 327, 585, 601, 56.21, 57.43, 67, 73, 60.17 Rule 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4, 37.20–1, 56.5 Rules 7–12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.328 Rule 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.22, 56.23–4, 26, 46

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Rule 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.23 Rules 8–12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.681–2 Rule 9 . . . . . . . . . . 44.11, 40, 48.22, 52.131, 142, 419, 683, 56.24, 57.7, 18, 22, 27, 58.3, 7, 9 Rule 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.23, 23 n35, 24–5, 58.20 n24 Rule 9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.20 n24 Rule 9(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.19 Rule 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.22, 56.10–11 Rule 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.22, 56.14, 47, 58.19 Rule 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.33, 44.40, 48.22, 56.18, 58.26 Rule 11(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.28 Rule 11(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4, 56.20 Rule 11(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.45, 47 Rule 11(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.31, 40 Rule 11(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20–1 Rule 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12–14, 33, 58.27 Rule 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.9, 63.23 Rule 13(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.10 Rule 13(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 62.13 Rule 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.9, 12 Rule 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.16, 22, 48.14, 56.9 Rule 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.142, 47.206, 52.394 Rule 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.5, 9, 20–3 Rule 16(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 Rule 16(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.54, 49.38 Rule 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.15, 56.9 Rule 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.105–12 Rule 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.593, 597, 43.76, 44.62, 65, 71, 46.66, 48.5, 28 Rule 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.33, 34, 35–6, 46.66, 48.13, 52.363 Rule 20(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.34 Rule 20(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 48.13 Rule 20(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Rule 20(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 130 Rule 20(1)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Rule 20(1)(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 39, 151 Rule 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.5, 12, 44.34, 48.101, 52.363 Rule 21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.38, 48.102 Rule 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.15, 44.22, 94–5, 68.22, Final Clause.3 Rule 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.59, 44.136 Rule 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.59, 44.22 Rule 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.131–2, 45.92–3, 97, 48.6, 52.418 Rule 26(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22 Rule 26(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.31 n40 Rule 27 . . . . . . . . . . . 45.68–9, 52.65–6, 143, 205, 363, 416–18, 420, 666, 57.20, 23, 24–5, 28 Rule 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44.23, 61.4, 69 Rule 28(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.16, 45.82 Rule 28(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.111, 61.26, 90–1 Rule 28(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.43, 52.111, 61.69, 90 Rule 28(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.95, 113 Rule 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.16, 22, 124–5 Rule 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.128–9, 57.21

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Rule 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 128, 46.50 Rule 31(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.21, 46.21 Rule 31(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.22, 134, 47.206 Rule 31(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.28 Rule 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.137–40, 52.363, 404 Rule 32(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.41, 145–52, 158, 164, 182, 47.214, 48.32 Rule 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.16, 48, 59, 52.404 Rules 33–37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.5, 44.22 Rule 34 . . . . . . .37.59, 43.17–23, 27, 83, 135, 142, 146, 148, 47.120, 52.258, 356, n582, 404 Rule 34(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.7, 17, 20, 37, 146–7, 44.79, 52.400 Rule 34(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.24, 30, 76 Rule 34(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.93 Rule 34(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.161 Rule 34(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.7, 20, 83, 85–8, 45.47, 47.116 Rule 34(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.42, 61.19 Rule 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.112, 135, 44.138, 49.29 n28 Rule 35(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.135–45 Rule 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.113, 135, 163, 44.138 Rule 36(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.19 Rule 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.77, 161, 163, 167, 47.206, 52.363 Rule 37(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.18 Rule 37(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.41, 175, 178, 180, n307, 181–5, 47.206 Rule 37(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.183 Rule 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.53, 49.12–14, 17, 57.21, 61.23 Rule 38(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.48, 56, 51.28 Rule 38(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.28 Rule 39 . . . . . . . . . . . . . . 26.268, 44.9 n7, 74, 47.6–9, 21, 67–9, 77, 90, 129, 164, 239, 52.363 Rule 39(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.41, 47.15, 53, 106, 107, 227–8, 247, 52.668 Rule 39(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.54 Rule 39(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.15, 18, 76 Rule 39(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.16, 54 Rule 39(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.8, 53, 55.107 Rule 39(6) . . . . . . . . . . . . . . . . . . . . . . . 26.284–5, 287, 289, 292, 43.70, 44.3, 47.8, 55.105, 62.3 Rule 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.43, 46.6, 8, 18–37, 42, 43, 48, 68, 81, 52.363 Rule 40(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.16, 46.16–17, 42, 79, 92 Rule 40(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.20, 23, 28, 31, 33, 61 Rule 41 . . . . . . . . . . . . . . . . . . . 25.24, 32.4, 41.1, 4, 12, 48–52, 53, 59, 44.67, 114, 52.204, 363 Rule 41(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.912, 41.51, 54, 56, 57, 58–63, 66, 52.205 Rule 41(2) . . . . 25.8, 908, 1202, 41.40, 41 n49, 44, 60, 64–7, 77, 116, 763, 43.27, 45.14, 52.204 Rule 41(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.152, 153, 45.18, 30 Rule 41(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.151, 153 Rule 41(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.128–50, 42.27 n34, 44.41, 42, 52.69 Rule 41(6) . . . . . . . . . . . . . . . . . . . . . 41.6 n191, 36 n44, 125, 44.41, 42, 52.202, 53.41, 82 n107 Rule 42 . . . . . . . . . . . . . . . . . . . 41.81, 43.39, 45.7, 12, 18, 29, 39–42, 45, 54, 71, 88–94, 52.363 Rule 42(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.53–62 Rule 42(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.61, 45.28, 61, 68, 70, 86, 95–101 Rule 42(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.38, 45.18, 40 Rule 42(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.76–7, 118, 45.14, 52.204 Rule 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.111, 36.71, 45.12–13, 48.89–107 Rule 43(1) . . . . . . . . . . . . . 42.27 n34, 48.89–93, 51.8 n26, 12, 52.81, 363, 802, 54.33, 61.112

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Rule 43(2) . . . . 34.23, 48.92–8, 107, 124, 52.82–3, 615, 53.41, 54.33, 93, 56.48, 61.14, 112 Rules 43–45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45.7, 47.77, 48.30 Rule 44 . . . . 25.597, 36.71, 39.12 n11, 45.26, 64–6, 48.103–4, 51.8 n26, 46, 52.363, 61.113 Rule 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.71, 45.65, 101, 48.105, 61.113 Rule 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.40, 48.37, 121–2, 49.12–20, 39, 50.34, 52.347, 394 Rules 46–48. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.39, 96 Rule 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.25–32, 37, 49.36, 50.38 Rule 47(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.26 n27, 48.25, 31, 34, 48, 49.39, 52.702 Rule 47(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.113 Rule 47(1)(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.126 Rule 47(1)(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.51 Rule 47(1)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.65, 52.435 Rule 47(1)(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.116, 47.132, 49.39, 50.42, 52.435, 61.109, 114 Rule 47(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.39, 50.35, 52.702 Rule 47(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.120, 49.39, 50.35 Rule 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.37, 49.5–6, 39, 50.35, 38, 51.27 Rule 48(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.39 Rule 48(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.21, 102 Rule 48(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.22 Rule 48(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.39, 50.35, 54.134 Rule 48(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.41, 43, 154, 48.120, 131–2 Rule 48(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.155 Rule 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.29–40, 60–2, 88 Rule 49(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.58 Rule 49(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.33 Rule 49(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.33, 38, 51, 52.364–5 Rule 49(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.39, 51, 96, 52.366 Rule 49(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.29, 32, 50.31 Rules 49–54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.10 Rule 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.36, 50.23–4, 52.58, 73, 90–3, 363 Rule 50(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.25–6 Rule 50(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.94–5, 99–102, 558, 561 Rule 50(1)(c)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.5, 23 Rule 50(1)(c)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.19, 27, 52.108, 115, 637 Rule 50(1)(c)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.115, 53.637 Rule 50(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.23, 33 Rule 50(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.31 Rule 50(3)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.34, 37 Rule 50(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.104, 557, 569 Rule 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.39–42, 45 Rule 51(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.45–6 Rule 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.573–4 Rules 52–55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.58 Rule 53 . . . . . . . . . . 30.38, 44.10, 11, 45.6, 7, 54, 48.26, 49.8, 50.32, 38, 51.8 n26, 20, 52.66, 111, 585, 681, 683, 688, 695–8, 57.7, 61.4 Rule 54 . . . . . . . . . . . . . . . . . . . . . . . 44.90, 49.40, 50.53–4, 51.42, 52.363, 718, 719, 734, 850–1 Rule 54(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.44, 52.724, 725, 734, 797 Rule 54(2) . . . . . . . . . . . . . . . . . 51.44, 46, 52.720, 724, 725, 726, 728, 731, 734, 736, 797, 851 Rule 54(3) . . . . . . . . . . . . . 51.44, 52.726, 729, 731, 734, 770, 774, 791, 794–6, 848, 851, 852 Rule 54(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.734, 737

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Rule 54(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.23, 52.736 Rule 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49.28, 52.363, 807–9 Rule 55(2)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.810 Rule 55(3) . . . . . . . . . . . . . . . . . . . .44.10, 52.719, 729, 770, 774, 794–6, 818–19, 828, 848, 851 Rule 55(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.10, 48.27 Rule 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.28 Conciliation Rules (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10–13, 33.2 Introductory Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.11 Rule 8 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.25 Rule 9 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.20 Rule 22 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.8 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.12 n11 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.5 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.16 n13 Rule 29(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.151 n260 Rule 30 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 n2 Rule 31 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.22 n20 Conciliation Rules (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12, 33.4 Conciliation Rules (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12, 33.4 Conciliation Rules (2006) . . . . . . . . . . . . . . . . . . . . 6.12, 21, 11.2, 11, 25.893, 28.19, 29.4, 33.1–6 Rule 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 Rules 1–7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 Rule 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 Rule 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.3 Rule 4(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.3 Rule 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11, 29.4–5 Rule 6(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.5, 57.16 Rule 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.5 Rule 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.23 Rule 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.26 n25 Rule 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.24 Rule 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.19 Rule 9(2)–(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.10 Rule 9(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.19 Rule 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 Rule 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.19 Rule 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.26, 58.26 Rule 11(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.18 Rule 11(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20 n21 Rules 11(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.45 Rules 11(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.40 Rule 11(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20 n21

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Rule 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 n14, 33, 58.27 Rule 13(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.13, 63.23 n16 Rule 13(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.23 Rule 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 Rule 16(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 Rule 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 Rule 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.105 n185 Rule 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.6, 44.33 n34, 63.7 Rule 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.94 n166, 68.22, Final Clause.2 Rule 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.4, 62.22 Rule 22(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4, 34.11 Rule 22(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 Rule 22(3)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.18 n16 Rule 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.10 Rules 24–26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.128 Rules 24–27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.124 Rule 25(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 Rules 25–28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.6 Rule 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.137 Rule 28(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 Rule 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4, 6 Rule 29(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.912 Rule 29(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.8 Rule 29(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.151 Rule 29(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4 Rule 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.21, 144 Rule 30(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.22 Rule 30(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.26 Rule 30(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.28 Rule 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.6, 35.5 Rule 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.12 Rule 33(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.24, 48.131 n171 Draft Code of Conduct for Adjudicators in Investor–State Dispute Settlement (1 May 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.20 n12, 42, 57.53 Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98 Art. 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98 Arts. 4–9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.87 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.53 Institution Rules (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7–9, 44.48 Rule 1 Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.18 n20, 52.96 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.14 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.14 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1169 Note F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.30 Note H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1170 Note I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1170 Note K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.96 Note L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.16 n18

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Note M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.32 n42 Rule 2 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1249 Rule 3 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.34 n43 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.34 n44 Note D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.106 Rule 4 Notes A–D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.18 n20 Rule 5 Notes A–E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.17 n19 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.21 n29 Rule 6 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.55 n71 Rule 7 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.62 n85 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.106 Rule 8 Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.69 Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.70 Note E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.70 Institution Rules (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7–9, 44.46, 48 Institution Rules (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7–9, 21, 28.23, 36.3, 36–8, 44.5, 6, 9, 46 Art. 5(1)(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1104 Rule 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.28 Rule 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.11, 44.93, 68.22, Final Clause.2 Rule 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1275, 36.10, 44.30, 45, 46 Rule 2 . . . . . . . . . . . . . . . . . . . . . 25.179, 561, 565–7, 895, 1168–70, 36.25–32, 39–44, 57, 44.46 Rule 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1464, 36.41 Rule 2(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.502, 36.27 Rule 2(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.9 n10, 27 Rule 2(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.179, 904, 985, 36.9 n10, 27 Rule 2(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.607–10, 1303–4, 36.27, 39.9 Rule 2(1)(d)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1232, 1249, 1304 Rule 2(1)(d)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1304 Rule 2(1)(d)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1277, 1304 Rule 2(1)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.86, 115, 179, 36.27, 52.96, 559, 72.16 Rule 2(1)(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.27, 41, 43 Rule 2(2) . . . . . . . . . . . . . . . . . . . 25.45, 86, 115, n168, 764, 904, 1249, 1277, 1464, 36.28–9, 41 Rule 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.45, 880, 36.32, 44.51 Rule 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.33, 44.31 Rule 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.16 Rule 5(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.17 Rule 5(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.19 Rule 5(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.50, 59.13 Rule 5(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.19 Rule 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.50 Rule 6(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.63 Rule 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.62, 44.46

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schreuer’s commentary on the icsid convention

Rule 7(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.106 Rule 7(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.60, 41.19, 72.16 Rule 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.65 Memorandum of Administrative Arrangements agreed between the International Bank for Reconstruction and Development and the International Centre for Settlement of Investment Disputes (13 February 1967) . . . . . . . . . . . . . . . . . 6.16, 17.5, 59.17, 64.20 Memorandum on the Fees and Expenses of ICSID Arbitrators (6 July 2005) . . . 60.5, 8–13, 14 Memorandum on Signature and Ratification, Acceptance or Approval of the ICSID Convention (1965) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.2, 68.3 Model Clauses Recording Consent to the Jurisdiction of the International Centre for Settlement of Investment Disputes (1968) ((1968) 7 ILM 1159) . . . . . . . . . . 25.88, 510, 772 Clause IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.563 n936, 1459 n2291 Clause V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.606 n1003 Clause VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1271 n2016 Clause VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.641 n1047, 695 Clause VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.756 n1270 Clause IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.189 Clause X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.510 n835 Clause XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.510 n836 Clause XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.521 Clause XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.981 n1552 Clause XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.951 n1514, 46.13 Clause XV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.951 n1514, 46.13 Clause XVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.328 n486, 510 n835 Clause XVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.30 n33 Clauses XIX–XXI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.46 n65 Clause XIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.174 n274 Clause XX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.174 n274 Clause XXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.333 n548 Clause XXIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.54 Clause XXV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.12 Clause XXVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.11 Clause XXVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.12 Clause XXIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.4 n6 Clause XXX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.16 Clause XXXI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.12 n9 Clause XXXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.11 Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Agreements (1969) ((1969) 8 ILM 1341) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.826 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.850 n392 Clause II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.26 Clause VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.555 n919 Clause VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.860 n1403 Clause VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.860 n1403, 27.43 Clause IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.860 n1403

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Model Clauses (1981) ((1993) 1 ICSID Reports 197) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.772 Comment 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.191 Clause III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.510 n835, 521 Clause IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.87, 114, 189 Clause V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.951 n1514, 46.13 Clause VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.563 n936, 1459 n2291 Clause VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.606 n1003 Clause VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1271 n2016 Clause IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.756 n1270 Clause X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.30 n33 Clause XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.10 n4 Clause XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.16 Clause XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.12 n9 Clause XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.328 n486 Clause XVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.289 n444, 55.119 Clause XVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.46, 174 n274 Clause XVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.333 n548 Clause XIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.113 Model Clauses (1993) ((1997) 4 ICSID Reports 357) . . . . . . . . . . . . . . . . . 25.88, 114 n167, 510, 695 n1153, 772, 1138, 1283, 60.16 Clause 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.29, 773 Clause 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.29, 774 Clause 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.188 Introductory Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.189 Clause 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.951, 46.13 Clause 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.563, 1459 Clause 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.606, 1139, 1197, 1291 Clause 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1271, 1278, 1295, 1305 Clause 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.756 Clause 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.30–3 Clause 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.45, 174 Clause 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.333 Clause 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.328 Clause 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.290, 26.289, 47.11, 55.105, 119–20, 57.11 Clause 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.290, 54.9, 55.112 Clause 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.54 Clause 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.29 Clause 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.12–13 Clause 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.10 Clause 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.514 Clause 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.43 Clause 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.19, 25.520 Introductory Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.520 Schedule of Fees (1 July 2020) . . . . . . . . . . 52.92, 59.8, 12, 14 n14, 14 n15, 15, 60.5, 8, 12, 14

ICSID ADDITIONAL FACILITY INSTRUMENTS Additional Facility Rules (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.12, 66.8 Introductory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.39, 28.9

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schreuer’s commentary on the icsid convention

Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.12 Comment iii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.487 Comment on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.13 Art 4 Comment iv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.485 Art. 44(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.25, 44.159 Art. 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.27 Art. 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.28 n28, 50.19 Art. 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.28 n28, 50.19 Additional Facility Rules (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.40 n54 Additional Facility Rules (2006) . . . . . . . . . . . . . . 11.18, 25.12, 843–77, 26.27, 288, 28.9, 33.4, 44.40 n54, 47.181, 49.30 n30 Art. 1(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1324 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.25, 25.13–15, 18–19, 484, 28.9, 54.12, 18 Art. 2(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.18, 40, 480, 481–4, 489, 513, 763 Art. 2(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.18, 40, 116, 396, 480, 492–4 Art. 2(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.39–42, 480 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.25, 25.16, 35.483, 54.12, 61.3, 62.7 Art. 3(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.7 n7, 48 Art. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.15, 25.18–19, 484, 496, 36.7, 48 Art. 4(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.513, 518, 763 Art. 4(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.482, 489, 513, 763 Art. 4(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Final Clause.11 Art. 4(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.40, 485–8, 54.18–19 Art. 4(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.489 Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8, 60.2, 61.82 Art. 6(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.62 Arbitration (Additional Facility) Rules (1993) Art. 44(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.159 Arbitration (Additional Facility) Rules (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.18, 54.13 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.8, 62.7 Art. 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.12 Art. 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.10 n11 Arts. 2–5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.7 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.25 n33 Art. 3(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.48 Art. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.48, 62 n85 Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.62 n85 Art. 6(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.48 Art. 6(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.9 n11 Art. 6(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.23 n24 Art. 6(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6, 38.1 n1, 45.62 Art. 6(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.26 n21 Art. 7(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.14 n15 Art. 7(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.28 n29 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.14 n7, 57.34 n52 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.56 n66, 56.23 n22 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6, 38.13 n10

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Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.15 n17 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.20 n22, 56.5 n3 Art. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 Art. 13(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.5 n2 Art. 13(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.19 n11 Art. 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.23 n22 Art. 14(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.26 n25 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 Art. 15(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.18 n28, 32 n51 Art. 15(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.18 n28 Art. 15(3)–(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.9 n8 Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.10 n12 Art. 17(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.18 n17 Art. 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20 n21 Art. 17(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 Art. 17(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 Art. 17(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20 n21 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 n14, 33 Art. 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.7, 54.13, 17, 62.8, 11 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.9 Art. 20(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.13, 17 Art. 22(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 n11 Art. 24(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 n11 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 n11 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.105 n185 Art. 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.33 n34 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.94 n166 Art. 30(4)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.9 n12 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.131 n234 Art. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.19 Arts. 36–9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.124 n229 Art. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.128 n232 Art. 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.128 n232 Art. 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.137 n241 Art. 39(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.145 n253 Art. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.16 Art. 41(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.17 n18 Art. 41(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.27 Art. 41(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.175 Art. 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.112 n176 Art. 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.113 n177, 133 Art. 43(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.18 n17 Art. 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.12 n6 Art. 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.19 Art. 45(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1093 Art. 45(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.48 n62 Art. 45(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.64 n93 Art. 45(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.153 n112 Art. 45(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.153 n112 Art. 45(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.128 n185, 135 n192, 144 n204 Art. 45(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.125 n182

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cxxvi Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art. Art.

schreuer’s commentary on the icsid convention 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.12–19, 26.287, 47.9 46(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.287 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.20 n16, 27, 79 47(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.16 n13 48(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.53 n64 48(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.88 n101 48(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.76 n110, 45.12, 53 n64, 88 n101 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.64 n85 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.64 n85, 65 n86 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.6 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.5 n4 53(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.154 n262 54(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.358 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.28 n28, 50.4 n5, 19 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.28 n28, 49.27, 33 n35, 43 n48, 50.19 56(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.30 n31 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.27 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.3, 20 n24, 23

Conciliation (Additional Facility) Rules (2006) Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.17 n16 Art. 6(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5, 30.1 Arts. 6–13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.4 n2 Art. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.1 n1, 57.34, 34 n52 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.5 n3, 33 n34 Art. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 Art. 13(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.5 n2 Art. 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.23 n22 Art. 14(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.26 n25 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Art. 15(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.19 n29, 32 n51 Art. 15(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.19 n29 Art. 15(3)–(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.10 n9 Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.10 n12, 58.11 n9 Art. 17(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.18 n17 Art. 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20 n21 Art. 17(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Art. 17(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Art. 17(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.20 n21 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 n14, 33 n34 Art. 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.11 Art. 21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 n11 Art. 23(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 n11 Art. 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.9 n11 Art. 25(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.16 n16 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.185 n185 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.4 n4 Art. 30(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.1 n1 Art. 30(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.11 n10, 12 n11, 17 n16

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Art. 30(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.16 n13 Art. 30(4)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.9 Art. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.16 n13, 17 n16 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 n7 Art. 34(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.16 n13 Art. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 n7 Art. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.19 n11 Art. 36(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4 n2 Art. 36(2)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4 n2 Art. 37(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.26 n24 Art. 37(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.28 n26 Art. 37(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.22 n20 Art. 37(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.3 n3 Art. 38(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.3 n7 Art. 38(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.5 n7 Art. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.3 n3, 7 n5 Fact-Finding (Additional Facility) Rules (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.40 Introductory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.496 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.495 n821 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.495 n821 Art. 5. . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.495 n821

MULTILATERAL TREATIES African Union Convention on Preventing and Combating Corruption (2003) (2869 UNTS 113) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.83 Agreement Establishing the African Development Bank (1963) (510 UNTS 3) Art. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 Art. 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 Agreement Establishing the ASEAN–Australia–New Zealand Free Trade Area (2009) Chapter 11 Art. 21(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Art. 21(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Agreement on Promotion and Reciprocal Protection of Investments in the Member States of the Eurasian Economic Community (2008) Art. 9(2)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Agreement for the Termination of Bilateral Investment Treaties between the Member States of the European Union (2020) ([2020] OJ L. 169/1) . . . . . . . . . . 25.1085, 53.16 n25 Art. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.121 Agreement on Trade-Related Aspects of Intellectual Property Rights (1994) (1869 UNTS 299) Art. 73(b)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.99 n152 Articles of Agreement of the International Bank for Reconstruction and Development (1945) (2 UNTS 134) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Art. I(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble.31 Art. V, s 2(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10 Art. VII, s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3, 7

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VII, s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 VII, s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 VII, s 9(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 VII, s 9(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.3 IX, s 2(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1

Articles of Agreement of the International Development Association (1960) (439 UNTS 125) Art. VI, s 2(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10 Art. XI, s 2(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 Articles of Agreement of the International Finance Corporation (1955) (264 UNTS 117) Art. IV, s 2(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10 n2 Art. IX, s2(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 Articles of Agreement of the International Monetary Fund (1945) (2 UNTS 39) Art. IX, s 9(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 Art. IX, s 9(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.3 ASEAN Agreement for the Promotion and Protection of Investments (1987) ((1988) 27 ILM 612) Art. X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.876 ASEAN Comprehensive Investment Agreement (2009) Art. 4(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.416 n688 Art. 4(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 n338 Art. 33(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Art. 33(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 ASEAN–China Investment Agreement (2009) Art. 14(4)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Art. 14(4)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 ASEAN–Korea Investment Agreement (2009) Art. 18(5)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Art. 18(5)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 ASEAN–India Investment Agreement (1987) Art. 20(11)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 Brussels Convention for the Unification of Certain Rules relating to the Immunity of StateOwned Vessels (1926) (176 LNTS 199) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Charter of the United Nations (1945) (USTS 993) Chapter I Art. 2(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.81 Chapter VI Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.2 Chapter VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.82 Chapter IX Art. 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1, 64.19 Chapter XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.3 Art. 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.7 Art. 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.17, 19, 20

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96(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.19, 20, 21 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.3 102(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.1, 2 102(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.3 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.8

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (2018) Art. 9.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 n338 Art. 9.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.872 Arts. 9.22–9.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.32 Art. 9.23(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.29 Art. 9.23(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.13 Arts. 9.27–9.28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.32 Art. 9.29(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.72 n102 Art. 9.29(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 n86 Art. 9.29(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.19 n19 Convention Establishing the Arab Investment & Export Credit Guarantee Corporation (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.748 Convention Establishing the Multilateral Investment Guarantee Agency (1985) (1508 UNTS 99) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.748, 810 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.748 n1259 Art. 40(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10 n2 Art. 57(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.578 Art. 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 Convention on the Liability of Operators of Nuclear Ships (1962) ((1963) 57 AJIL 268) Art. X(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Convention for the Pacific Settlement of International Disputes (1907) (205 CTS 233) Art. 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Art. 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.22 Art. 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 Art. 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations (1947) (33 UNTS 261) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 Art. II, s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 Art. III, s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4 Art. III, s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 Art. III, s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.6 n2, 24.2 n1 Art. IV, s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.5 Art. VI, s 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 Art. VI, s 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 Annex VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 n1, 4 n7 Convention on the Privileges and Immunities of the United Nations (1946) (1 UNTS 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 Art. I, s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 Art. II, s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4 Art. II, s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 Art. II, s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 n1

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schreuer’s commentary on the icsid convention II, s 7(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 n3 III, s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.5 V, s 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 V, s 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3, 7 VIII, s 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.24

Covenant of the League of Nations (1919) (225 CTS 188) Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.2 Criminal Law Convention on Corruption (1999) (ETS 173); (1999) 38 ILM 505) . . . 42.83 Dominican Republic–Central America Free Trade Agreement (2004) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.713, 873, 1109, 1258, 26.96 Art. 10.16(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.677 n1112, 713 Art. 10.18(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.945 Art. 10.18(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.997 n1581 Art. 10.20(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.130 Art. 10.20(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.130 Art. 10.21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.149 Art. 10.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.136 Art. 10.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 n293 Art. 10.26(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.72 nn102 and 104, 54.138 n236 Art. 10.26(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 n86 Art. 10.26(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.19 n19 Art. 18.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.62–3 Art. 20.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.62–4 Energy Charter Treaty (1994) (2080 UNTS 95) . . . . . . . . . . . . . . . . 25.213, 300 n480, 337, 410, 428 n710, 476, 516, 747, 754, 919, 1020, 36.76, 41.24, 61–3, 165, 42.5, 7, 68, 86, 239, 53.16, 54.77, 55.49, 84 Art. 1(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.217, 321 Art. 1(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.587 Art. 1(7)(a)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1140 n1788 Art. 1(7)(a)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1209 n1903 Art. 10(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1021 Art. 13(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.346–7 Art. 15(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.758 n1277 Art. 15(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.758 n1277 Art. 15(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1274 Art 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.242–3 Art. 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.327 Art. 17(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1107 n1733 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.586, 871, 1033, 26.30 Art. 26(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.416, 450, 941, 976, 983 Art. 26(1)–(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.15, 33 Art. 26(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.983, 36.18 n21 Art. 26(3)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n33 Art. 26(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.517 n844 Art. 26(4)(a)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.516 Art. 26(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.125–6, 195–6, 234 Art. 26(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1324, 1408, 1429, 1431–3

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Art. 26(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.23 Understanding with respect to Article 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1408 European Convention on State Immunity (1972) (ETS 74); 1495 UNTS 182) . . . 55.15 Art. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.56, 95 Art. 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.56 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.56 European Union–Canada Comprehensive Economic and Trade Agreement (2016) Chapter Eight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.7 n9 Section A Art. 8.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.220 n338, 57.101 n211 Section F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.6 Art. 8.23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47.14 Art. 8.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44.32 Art. 8.26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.32, 57.101 n211 Art. 8.27(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Art. 8.27(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Art. 8.28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.26, 36 n64 Art. 8.28(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.26 n47 Art. 8.30(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.52 n85 Arts. 8.33–8.38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44.32 Art. 8.34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47.14 Art. 8.39.1(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.98 n146 Art. 8.39(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 n35, 61 Art. 8.41(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.72 n102 Art. 8.41(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.19 n19 Art. 8.42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 n58 European Union–Mexico Global Agreement (2018) Art. 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.130 European Union–Singapore Investment Protection Agreement (2018) Annex 1 Art. 3.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 n211 Art. 3.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 n64 Art. 3.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 n249 Art. 3.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.26 n47 Art. 3.20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.102 n183 Art. 9.18(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Annex 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 n249 Code of Conduct para. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40.15 n8 European Union–Viet Nam Investment Protection Agreement (2019) Annex 1 Art. 3.37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 n211 Art. 3.39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 n64 Art. 3.44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.130 Art. 3.54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.26 Art. 3.55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.26 n47 Art. 3.56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 n211

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schreuer’s commentary on the icsid convention

Geneva Convention on the High Seas (1958) (450 UNTS 82) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Geneva Convention on the Territorial Sea and Contiguous Zone (1958) (516 UNTS 205) Arts. 18–22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 Inter-American Convention against Corruption (1996) ((1996) 35 ILM 724) . . . . . . . . 42.83 International Covenant on Civil and Political Rights (1966) (999 UNTS 171) . . . . . . . 42.236 International Covenant on Economic, Social and Cultural Rights (1966) (993 UNTS 3) 42.236 North American Free Trade Agreement (1992) ((1993) 31 ILM 289) . . . . 2.54, 12.2, 25.17, 399 n658, 670 n1099, 718 n1206, 742–3, 864–7, 1055, 26.201, 42.68, 148, 43.157, 44.141 n249, 156, 159, 176 Chapter Two Art. 201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1140 n1788 Chapter Eleven . . . . . . . . . . . . . . . . . .25.435, 26.352, 36.18, 43.21, 102–3, 44.160, 46.47, 53.10 Art. 1101(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.127, 416, 435 Arts. 1101–1114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.863, 867, 26.352 Art. 1102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.397 Art. 1103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.397, 1021 Art. 1111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1140 n1788 Art. 1116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32, 677, 941, 965, 976 Art. 1116(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.944–5, 36.18 n22 Art. 1117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.325, 1324, 1407 Art. 1117(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.677 Art. 1117(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.944 n1505, 36.18 n22 Arts. 1118–20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.985 Art. 1119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.22 n30, 46.23 Art. 1120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32, 865, 26.29–30, 46.23 Art. 1120(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.18 n21 Art. 1120(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.517 n844 Art. 1120(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.516, 517 n844, 26.91, 291 n447 Art. 1121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.60 n70, 866, 998, 26.91–4, 291–2 Art. 1121(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.997 Art. 1121(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.997 n1581 Art. 1121(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.997 n1581, 26.91 Arts. 1123–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 Art. 1124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.5 Art. 1124(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Art. 1125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.27–8 Art. 1126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 Art. 1126(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 n290 Art. 1130 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.14 Art. 1131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.124 Art. 1134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.14 n14, 224 Art. 1136(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.70–2 Art. 1136(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.23 Art. 1136(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56

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Art. 1136(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.23 Art. 1137(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44.160, 48.128 Art. 1139 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.218, 321 n520, 395 n651 Annex 1137.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.128 Chapter Twenty Art. 2105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.6 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997) ((1998) 37 ILM 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.83 Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part (Cotonou Agreement) (2000) ([2000] OJ L 317/3) . . . . . . . . . 25.1019, 42.236 Protocol of Colonia for the Reciprocal Promotion and Protection of Investments in MERCOSUR (1994) Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.217 n335 Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1140 Art. 1(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1209 n1903 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1140 Statute of the International Court of Justice (1945) (USTS 993) . . . . . 5.3, 25.58, 65.6, 67.1–13 Art. I(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble.31 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.5, 6, 9 Art. 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.12 n10 Art. V(2)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10 Art. VII(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3, 7 Art. VII(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 Art. VII(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 Art. VII(9)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 Art. VII(9)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.3 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.18, 39.12 n9 Art. IX(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 Art. IX(9)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 Art. IX(9)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.3 Art. 34(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.15 Art. 36(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.55, 64.1, 15 n16 Art. 36(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.69, 1052, 41.2 Art. 38(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.139, 231, 232–3, 247, 258, 261, 300, 332 Art. 38(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.317 Art. 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1, 22, 103 Art. 41(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1 n2 Art. 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 Art. 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1, 3, 45 Art. 56(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.113 Art. 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.35, 49.2 Art. 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.3, 21 Art. 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1, 53.3

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Art. 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.2, 8 n18, 26 Art. 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.28 Arts. 65–8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.17 Treaty Establishing the European Economic Community (Treaty of Rome) (1957) Art. 187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.6 n5 Art. 192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.6, 133, 146, 150 Treaty on the Eurasian Economic Union (2014) Annex 16: Protocol on Trade in Services, Incorporation, Activities and Investments para. 85(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.874 Treaty on the Functioning of the European Union (2007) (OJ 2012 C326/47) Art. 267 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1020 Art. 344 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.587, 1020 UN Convention against Corruption (2003) ((2004) 43 ILM 37) . . . . . . . . . 42.83, 236, 52.325 UN Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention) (2018) (UNTS 56376) Art. 1(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.20, 54.33 UN Convention on Jurisdictional Immunities of States and their Property (2004) (44 ILM 803 (2005)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.15 Art. 2(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.98 Art. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 55.97–8 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.106 Art. 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.106 Art. 19(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.96 Art. 19(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.98, 137 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.99 Art. 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.100 Art. 21(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.70 Art. 21(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.76 Art. 21(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.77 Annex (Understandings with respect to certain provisions of the Convention) With respect to Article 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.98 With respect to Article 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.137 UN Convention on the Law of the Sea (1982) (1833 UNTS 3) . . . . . . . . . . . . . . . . 25.68, 55.62 Art. 28(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 n136 Art. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 n136 Art. 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 n136 Art. 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 n136 Art. 287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 n76 Art. 290 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.53 n76 Art. 290(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.62 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) (1958) (330 UNTS 38) . . . . . . . . 25.9, 42.236, 53.5–9, 54.12–23, 98–101, 55.27, 83 n194, 62.8, 10, 63.14–15 Art. I(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54.21–2 Art. I(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.17–20

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Art. III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.98 Art. V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6, 322, 424, 53.9, 54.4–5, 14–16 Art. V(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.148 Art. V(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.61 n87, 52.123 n206, 330 Art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.713 n1115, 761 UN Convention on Special Missions (1969) (1400 UNTS 231) Art. 25(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.68 n149 UN Convention on Transparency in Treaty-Based Investor-State Arbitration (Mauritius Convention) (2004) (UNTS 54749) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 Art. 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.177 Art. 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.177 Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding) (1994) (1869 UNTS 401) Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 UNESCO Convention for the Protection of the World Cultural and Natural Heritage (1972) (1037 UNTS 151) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.100, 237 United States–Mexico–Canada Agreement (2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.867 Chapter 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.868–70, 39.28 Art. 14.D.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.983 n1556, 36.18 n21 Art. 14.D.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.865 n1410, 36.22 n30, 46.27 n23 Art. 14.D.3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.941 n1495, 980 Art. 14.D.3(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.677 n1111 Art. 14.D.3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.29 n29 Art. 14.D.5(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.944 n1505 Art. 14.D.5(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.866 n1413 Art. 14.D.5(1)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.998 n1581, 26.91 n112 Art. 14.D.6(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n48, 38.5 n4 Art. 14.D.6(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.5 n4 Art. 14.D.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.14 n10 Art. 14.D.7(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.14 n14, 224 n224, 54.138 n236 Art. 14.D.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.124 n192 Art. 14.D.9(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 Art. 14.D.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.136 n210 Art. 14.D.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 Art. 14.D.13(9)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.70 n101, 54.138 n236 Art. 14.D.13(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.23 n26 Art. 14.D.13(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 n86 Art. 14.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221, 416 n686, 1209 Art. 14.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1021 Art. 14.D.13(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.19 n19 Chapter 14, Annex 14-D Art. 14.D.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.291 n447, 36.18 n22 Art. 14.D.13(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.23 n26 Chapter 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2

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Art. 31.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Art. 31.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Art. 31.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Vienna Convention on Diplomatic Relations (1961) (500 UNTS 95) . . . . . . . . . . . . . . . . . 55.68 Art. 22(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.68 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.73 Vienna Convention on the Law of Treaties (1969) (1155 UNTS 331) . . . . . 25.1042, 42.236, 261, 53.16, 54.77, 67.1 Art. 2(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.1 n2 Art. 2(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.2 n5 Art. 2(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1458 n2311, 68.10 n16 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1089 Art. 4 . . . . . . . . . . . . . . . . . 25.479 n804, 52.19 n39, 53.38 n65, 54.77 n104, 66.6 n9, 69.10 n17 Art. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.2 n4, 68.8 Art. 7(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.2 n5 Art. 7(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.2 n4 Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.1 n2 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.1 n2 Art. 16(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.6 n12 Art. 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1476 n2312 Arts. 19–23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.10, 14 Art. 19(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.14 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.14 Art. 23(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.14 Art. 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.17 n24 Art. 24(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.15 n23 Art. 24(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.17 n24 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1503 n2343, 69.1 Art. 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.139, 69.1 Art. 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.934, 68.14 Art. 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.3 Art. 30(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1018 Art. 30(4)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.6 n11 Art. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.479, 1125, 42.141, 46.105, 52.23, 225, 373, 454 Art. 31(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1419 Art. 31(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.373 n635 Art. 31(3)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.152 Arts. 31–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.595, 1055, 42.14, 52.19, 66.10 Art. 32(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1419 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Final Clause.3–4, 8 Art. 33(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Final Clause.6, 8 Art. 33(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Final Clause.5 Art. 33(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.433 n731, 54.79, Final Clause.5–6, 8 Art. 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1503 n2343 Art. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.1, 66.1, 6 n11 Art. 40(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.5 n7 Art. 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.26, 38, 65.7 n10, 66.5 n6 Art. 41(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.6 Art. 41(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.39, 65.7, 66.5

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Art. 41(1)(b)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.39 Art. 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1102, 68.5 Art. 46(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.5 n10 Art. 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.306 Art. 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.1, 71.1 Arts. 54–64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1503 n2343 Art. 59(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1020 Arts. 65–8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.1 Art. 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.1, 7 Art. 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 Art. 76(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 n3 Art. 76(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.4 Art. 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1, 75.1 Art. 77(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 n2 Art. 77(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.3 n2 Art. 77(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.5 Art. 77(1)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.1 Art. 77(2)(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.2 Art. 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.1 Art. 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.2 Vienna Convention on the Representation of States in their Relations with International Organizations of a Universal Character (1975) (UN Doc A/Conf 67/16; 1975 UNJYB 87; 69 AJIL 730) Art. 23(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.68 Vienna Convention on Succession of States in Respect of Treaties (1978) (1946 UNTS 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.625–7 Art. 2(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.622 Art. 2(1)(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.627 n1022 Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.9 n8 Arts. 16–30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.627 n1022 Art. 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.627 Art. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.627 n1019 World Health Organization Framework Convention on Tobacco Control (2003) . . . . 42.236, 44.185

BILATERAL TREATIES Albania–BLEU BIT (1999) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 Albania–Greece BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.64, 119, 703, 898, 919, 36.76 Albania–Italy BIT (1991) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1893 Art. 8(2)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1357 Algeria–BLEU BIT (1991) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.81 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 Algeria–Italy BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.702

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Argentina–Austria BIT (1992) Art. 8(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.24, 43.160 Argentina–China BIT (1992) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Argentina–France BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.528, 1422, 26.206 Art. 1(2)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1323 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.965, 26.106–13 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.71–4 Argentina–Germany BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.718, 41.107 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.322 Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.755 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.314 Art. 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.991, 26.323 Art. 10(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.122–3 Argentina–Italy BIT (1990) . . . . . . . . . . . . . . . . . 25.273, 301–2, 424, 592, 26.139, 217, 222, 224 Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Art. 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.322, 52.181 Art. 8(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.98–9 Argentina–Netherlands BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1385 Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Art. 10(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.60 Art. 10(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1323 Art. 10(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.118 Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1330 n2103, 1355 Argentina–Spain BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.61, 923, 26.206 Art. IV(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1027–9 Art. X(3)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1027, 26.316–18 Argentina–United Kingdom BIT (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.206 Art. 8(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.323 Argentina–United States BIT (1990) . . . . . . . . . . . . 25.1393, 26.114, 118–20, 130, 332, 47.247 Art. I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.286 Art. I(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.416 Art. II(2)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.62 Art. VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.972 Art. VII(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.31 n32, 846 Art. VII(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1322, 1428, 46.62 Art. VIII(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.103 Art. VIII(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.988 Art. XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.213 Argentina–Venezuela BIT (1993) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.55 Armenia–United States BIT (1992) Art. VII(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.759 Australia–China FTA (2015) Art. 9.15(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.15

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Art. 9.22(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.72 Art. 9.23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 n58 Australia–Czech Republic BIT (1993) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.833 n1371 Australia–Hungary BIT (1991) Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455 Australia–Indonesia BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.208, 27.45 n58, 42.85 Art. XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.838–9 Art. XI(4)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.903–4 Art. XI(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 n58 Australia–Korea FTA (2014) Art 11.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.119 Annex II–E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 n58 Australia–Laos BIT (1994) Art. 12(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.48 n58 Australia–Papua New Guinea BIT (1990) Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1502 n2342 Australia–Poland BIT (1991) Art. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455 Austria–Croatia BIT (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.275 Austria–Estonia BIT (1994) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455 Austria–Kazakhstan BIT (2010) Art. 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1022 Austria–Korea BIT (1991) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455 Austria–Malaysia BIT (1985) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455 Austria–UAE BIT (2001) Art. 10(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 Bahrain–United States Investment Incentive Agreement (1987) . . . . . . . . . . . . . . . . . . . . . . 11.18 Bangladesh–BLEU BIT (1981) Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455, 27.65 Bangladesh–Italy BIT (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.177 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.978 Art. 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32 Bangladesh–United Kingdom BIT (1980) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31, 34 Bangladesh–United States BIT (1986) Art. VII(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1275

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Barbados–United Kingdom BIT (1993) Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1275 Barbados–Venezuela BIT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.313, 72.20 Benin–BLEU BIT (2001) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 Benin–Canada BIT (2013) Art. 28(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.15, 17 BLEU–Botswana BIT (2006) Art. 12(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.314 BLEU–Burkina Faso BIT (2001) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 BLEU–Burundi BIT (1989) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65, 42.120 BLEU–Cameroon BIT (1980) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.310 n455, 27.65 BLEU–China BIT (2005) Art. 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.931 Art. 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1016 BLEU–Egypt BIT (1977) Art. IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.927–8, 26.310 n455 BLEU–Egypt BIT (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.927–8 BLEU–Pakistan BIT (1998) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 BLEU–Sri Lanka BIT (1982) Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1273 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 Art. 10(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 BLEU–Uganda BIT (2005) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 Bolivia–Netherlands BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1377 Art. 1 (b)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1360–1, 1394–9 Brazil–Netherlands BIT (1998) Art. 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n33 Bulgaria–Cyprus BIT (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1033 Bulgaria–Finland (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1033 Bulgaria–United States BIT (1992) Art. VI(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Burkina Faso–Canada BIT (2015) Art. 27(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.15 Burundi–United Kingdom BIT (1990) Art. 8(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45

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Cambodia–Croatia BIT (2001) Art. 10(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.311 Cameroon–United States BIT (1986) Art. VIII(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.26 Canada–Costa Rica BIT (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.214 Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1175 Art. 1(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.461–2 Canada–Guinea BIT (2015) Art. 31(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 nn168 and 170 Canada–Korea FTA (2014) Annex 8–E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.36 n58 Canada–Mali BIT (2014) Art. 25(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 Canada–Moldova BIT (2018) Art. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.102 n1183 Canada–Mongolia BIT (2016) Art. 25(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n43 Art. 25(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n50 Art. 30(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 n168 Canada–Nigeria BIT (2014) Art. 26(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.15 Canada–Slovakia BIT (2010) Art. 15(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.932 Canada–USSR (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.630 n1030 Canada–Venezuela BIT (1996) Art. XII(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.362 n540 Art. XII(3)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.481, 494, 945 n1508, 26.41, 362 Cape Verde–Netherlands BIT (1991) Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1896 Chile–France BIT (1992) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1898 Chile–Malaysia BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.130 Chile–Norway BIT (1993) Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1893 Chile–Peru BIT (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.926, 27.28 Chile–Spain BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.705, 1028 Chile–Switzerland BIT (1999) Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1895 Chile–United States FTA (2003) Annex 10-H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 n57

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China–Côte d’Ivoire BIT (2002) Art. 9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.312 China–Germany BIT (2003) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1502 n2342 China–Korea BIT (2007) Art. 9(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.945 China–Laos BIT (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.11 n11 China–Peru BIT (1994) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.11 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1500 China–Yemen BIT (1998) Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1025 Colombia–France BIT (2014) Art. 15(18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n43 Colombia–Japan BIT (2011) Art. 30(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n46 Art. 30(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n46 Colombia–Turkey BIT (2014) Art. 12(17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Art. 12(17)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.15 Colombia–United Kingdom BIT (2010) Art. II(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.416 Colombia–United States Trade Promotion Agreement (2006) Art. 10.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 n293 Costa Rica–Spain BIT (1997) Art. XI.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.22 Art. XI.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.90 Cuba–Italy BIT (1993) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.30 Art. 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.30 Cyprus–Greece BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.732 Art. I.1(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.356 Cyprus–Hungary BIT (1989) Art. 7(2)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.857, 42.131 Article 1(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1223 Cyprus–Montenegro BIT (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1208 Czech Republic–Israel BIT (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.470, 708–9, 1253, 26.180 Czech Republic–Netherlands BIT (1991) Art. 8(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.180 Czech Republic–Slovakia BIT (2002) . . . . 25.420, 735, 777, 827, 1005–6, 1038, 1086, 1089, 42.66–7, 147

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Czech Republic–United States BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.180 Czechoslovakia–United States BIT (1991) Art. VI(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1322 n2089 Denmark–Egypt BIT (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.399 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.929–30 Denmark–Estonia BIT (1991) Art. 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n35 Denmark–Hungary BIT (1988) Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.284 Art. 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n33 Denmark–Latvia BIT (1992) Art. 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27 n26 Denmark–Russia BIT (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1032 n1639 Denmark–Turkey BIT (1990) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32 DR Congo–United States BIT (1984) Art. VII(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.726 Ecuador–France BIT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.50 Ecuador–United States BIT (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1100, 27.643 Art. VI(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.72 Egypt–Greece BIT (1993) Art 10.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.70 Art. 10.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.70 Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.121 Egypt–Italy BIT (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1154 Egypt–Japan BIT (1977) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.833 n1371 Egypt–Sweden BIT (1978) Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.842 Egypt–UAE (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1321 n2087 Egypt–United Kingdom BIT (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.52 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.313 Egypt–United States BIT (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1110, 1151 Art. 8.3(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.78 Estonia–Netherlands BIT (1992) Art. 9.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1434 Estonia–Poland BIT (1993) Art. 7(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.55 Estonia–United Kingdom BIT (1994) Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.2088

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Estonia–United States BIT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49.61–2 Art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.55, 65 Art. VI(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.68 France–Hungary BIT (1986) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27 n26 France–Kuwait BIT (1989) Art. 1(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 France–Laos BIT (1989) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.511 n837 France–Malaysia BIT (1975) Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.833 n.370 France–Moldova BIT (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.343–4 France–Nigeria BIT (1990) Art. 1(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1273 France–Peru BIT (1993) Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.719–20 France–Tunisia BIT (1972) Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1273 France–Venezuela BIT (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.29, 29 n32 France–Yemen BIT (1984) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.511 n837 Gabon–Italy BIT (1999) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.65 Georgia–Greece BIT (1994) Art. 1(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.337 Art. 9(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.102 Georgia–Israel BIT (1995) Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.102 Georgia–Switzerland BIT (2014) Art. 10(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 nn167 and 169 Georgia–United States BIT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.668 Germany–Israel BIT (1976) Art. 10(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.511 n838 Germany–Kuwait BIT (1994) Art. 1(3)(b)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.578 Germany–Lebanon BIT (1997) Art. 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n45 Art. 9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n45 Germany–Mexico BIT (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.670

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Germany–Panama BIT (1983) Art. 1(4)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.578 Germany–Poland BIT (1989) Art. 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.391 n645 Germany–St Vincent and the Grenadines BIT (1986) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27 n26 Germany–Sri Lanka BIT (2000) Art. I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.427 Germany–Ukraine BIT (1993) Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.145, 149 Germany–Yugoslavia (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.391 Greece–Romania BIT (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.974 n1543 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.103 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.52, 157 Greece–Slovakia BIT (1991) Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225.304 Greece–UAE BIT (2014) Art. 10(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1321 n2088, 48.129 n169 Grenada–United States BIT (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.61 Guatemala–Spain BIT (2002) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.975 Hungary–Norway BIT (1991) Art. IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1034 Hungary–United Kingdom BIT (1987) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.313 n459 India–Singapore Comprehensive Economic Cooperation Agreement (2005) Art. 6.12(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.99 n151 Indonesia–United Kingdom BIT (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.208, 42.85 Art. 7(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.836–7 Iran–Slovak Republic BIT (2016) Art. 14(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 nn167 and 169 Israel–Myanmar BIT (2014) Art. 8(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 Italy–Korea BIT (1989) Art. 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1893 Italy–Lebanon BIT (1997) Art. 7(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.75 Italy–Morocco BIT (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.181–3 Art. 1(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.592 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.527

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Italy–Mozambique BIT (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1019 Italy–Pakistan BIT (1997) Art. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 25.656–8, 669–70, 26.131–3 Italy–Romania BIT (1990) Art. 11(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1088 Italy–UAE BIT (1995) Art. 1(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1129, 48.129 n167, 52.199, 211–12, 236–7 Jamaica–Switzerland BIT (1990) Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1895 Art. 9(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1323 n2091 Jamaica–United States BIT (1994) Art. I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1502 n2341 Art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1502 n2341 Japan–Kenya BIT (2016) Art. 15.13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 nn168 and 170 Japan–Oman BIT (2015) Art. 15.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.129 n168 and 170 Japan–Pakistan BIT (1998) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.833 Japan–Switzerland FTA (2009) Art. 94.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.119 Japan–Uruguay BIT (2015) Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.119 Kazakhstan–Turkey BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.212 n329, 341, 367, 451 Kazakhstan–United States BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.178 Kazakhstan–Uzbekistan BIT (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.320 Kenya–Netherlands BIT (1970) Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.840 Korea–United States FTA (2007) Art. 11.20–11.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.32 Art. 11.24–11.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.32 Art. 11.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 n293 Art. 11.26(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 Art. 11.26(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 Art. 11.26(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.19 Lebanon–Switzerland BIT (2000) Art. 7(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.844 Lithuania–Netherlands BIT (1994) Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1323 n2090 Lithuania–Norway BIT (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.180, 967 n1536

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Lithuania–Poland BIT (1992) Art. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n35, 845 n1386 Lithuania–Switzerland BIT (1992) Art. 9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.513, 844 Lithuania–Ukraine BIT (1994) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.408, 1213–20 Malaysia–Sweden BIT (1979) Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.842 Malaysia–United Kingdom BIT (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.263–5 Malta–United Kingdom BIT (1986) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27 n27 Mexico–UAE BIT (2016) Art. 13(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n43 Art. 13(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n51 Moldova–United States BIT (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1207 Mongolia–United Kingdom BIT (1991) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Morocco–Nigeria BIT (2016) Art. 27(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n43 Art. 27(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n43 Morocco–Sweden BIT (1990) Art. 1(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Morocco–United States FTA (2004) Art. 10.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.119 Art. 10.25(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 Mozambique–South Africa BIT (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.827 Nepal–United Kingdom BIT (1993) Art. 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1321 Netherlands–Nigeria BIT (1992) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n33 Netherlands–Pakistan BIT (1988) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.833 n1371 Netherlands–Paraguay BIT (1992) Art. 3(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.155–7 Netherlands–Poland BIT (1992) Art. 12(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.23 n34 Netherlands–Romania BIT (1994) Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1224–7 Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.674 Netherlands–Senegal BIT (1979) Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.834–5

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Netherlands–Slovak Republic BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.274 Netherlands–Turkey BIT (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.309, 456 Art. 1(a)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1125 Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.449 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.65, 671–2 Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.457 Netherlands–Venezuela BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.711–12, 72.19, 21 Art. 1(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.419, 1488 Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.704 Netherlands–Yugoslavia BIT (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.276 n438 Netherlands–Zimbabwe BIT (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.64 Nicaragua–Taiwan FTA (2006) Art 10.22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.119 Nigeria–Singapore BIT (2016) Art. 14(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 n51, 39.6 n3 North Macedonia–Switzerland BIT (1996) Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1362 Pakistan–Switzerland BIT (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.260–3 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.969, 26.115–17, 148, 27.61–2 Art. 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.986 Pakistan–Turkey BIT (1995) Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.134–6 Panama–Switzerland BIT (1983) Art. 8(b)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.578 Panama–United Kingdom BIT (1983) Art. 1(d)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.578 Paraguay–Switzerland BIT (1992) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.845, 966, 26.137–8, 152–3 Paraguay–United Kingdom BIT (1981) Art. 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 Peru–United States Trade Promotion Agreement (2006) Art 10.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 Philippines–Switzerland BIT (1997) Art. II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.398, 430, 936 n1484 Art. VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.123, 150 Philippines–United Kingdom BIT (1980) Art. X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.833 n1371 Poland–Switzerland BIT (1989) Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1895 Poland–United States BIT (1990) Art. IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.481

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Romania–Sweden BIT (193) Art. 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.933 Romania–United States BIT (1992) Art. VI(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1322 Russia–United Kingdom (1989) Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1032 Rwanda–United States BIT (2008) Art. 28(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.183 Art. 34(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.72 Art. 34(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 Saint Lucia–United Kingdom BIT (1983) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.849, 26.27 n27 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.517 Senegal–United States BIT (1983) Art. VIII(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.26 Singapore–United Kingdom BIT (1975) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.313 n459 Spain–Venezuela BIT (1995) Art. XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.8 n7 Art. XI(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27 n26 Sri Lanka–Sweden BIT (1982) Art. 9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 Sri Lanka–Switzerland BIT (1981) Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.842 Art. 9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 Sri Lanka–United Kingdom BIT (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.95–6, 106, 151, 235 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.393 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.313 n459 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1344 Sri Lanka–United States BIT (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.383 Sweden–Tunisia BIT (1984) Art. 1(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Sweden–Yemen BIT (1983) Art. 7(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 Switzerland–Turkmenistan BIT (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1024 Switzerland–Uruguay BIT (1988) Art. 10(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.967, 26.154 Switzerland–Viet Nam BIT (1992) Art. 9(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27 n25 Tanzania–United Kingdom BIT (1994) Art. 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.363

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Turkey–Turkmenistan BIT (1992) Art. II(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1031, Final Clause.6 Art. VII(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.66 Turkey–United Kingdom BIT (1991) Art. 1(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1504 n2342 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1321 Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.48 Turkey–United States BIT (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1497–8 Art. VI(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.511 n837 Art. VII(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.27 26 Turkmenistan–United Kingdom BIT (1995) Art. 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1023–4 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1023–4 UAE–United Kingdom BIT (1992) Art. 8(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.45 Ukraine–United States BIT (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.63 n76, 295 Art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.142–3 Art. VII.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.23 n34 United Kingdom–Venezuela BIT (1995) Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.104 United States–Uruguay BIT (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.329 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.119 Art. 34(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.56 Annex E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 n57

OTHER INTERNATIONAL INSTRUMENTS

International Bank for Reconstruction and Development/World Bank Agreement between the United Nations and the International Bank for Reconstruction and Development (1947) (16 UNTS 346) Art. VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.20 By-Laws of the International Bank for Reconstruction and Development (1946) s 14(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.4 General Conditions Applicable to Loan and Guarantee Agreements (1980) Art. X(10.04)(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.4 Guidelines on the Treatment of Foreign Direct Investment (1992) ((1992) 31 ILM 1363) 25.877, 42.259 Loan Regulations Nos 3 and 4 (1961) Art. VII(7.03)(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.4 Art. VII(7.04)(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.4 Memorandum of Administrative Arrangements agreed between the International Bank for Reconstruction and Development and the International Centre for Settlement of Investment Disputes (13 February 1967) . . . . . . . . . . . . . . . . . 6.16, 17.5, 59.17, 64.20

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Statute of the Administrative Tribunal of the International Bank for Reconstruction and Development, International Development Association and International Finance Corporation (1980) (amended 2001 and 2009) Art. XV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.6

International Court of Justice Rules of Court (1978, last amended 2005) Art. 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3 Art. 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.88 Art. 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.88 Art. 94(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.35 Art. 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 95(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.113 Art. 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Art. 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.2 Art. 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1, 51.2

International Law Commission Articles on Responsibility of States for Internationally Wrongful Acts ([2001] 2(2) YBILC 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.525, 27.63, 42.264–5 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.139 Art. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.222 Art. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.937 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.942 Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.63 Draft Articles on Diplomatic Protection ([2006] 2(2) YBILC 26) Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.62 Art. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1118 Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.62 Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.343 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.343 Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.63 Art. 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.1 Draft Articles on Jurisdictional Immunities of States and Their Property ([1991] 2(2) YBILC 12; (1991) 30 ILM 1563) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.15 Art. 18(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.57, 96, 106 Art. 18(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.57 Art. 18(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.57, 137 Art. 19(1)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.77 Guiding Principles Applicable to Unilateral Declarations of States Capable of Creating Legal Obligations ((2006) UN Doc A/CN.4/L.703) . . . . . . . . . . . . . . . . . . . . . . . .25.1039 Guiding Principle 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1050

Southern African Development Community Model Bilateral Investment Treaty Template (July 2012) Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.214, 222

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schreuer’s commentary on the icsid convention United Nations

Agreement between the United Nations and the International Bank for Reconstruction and Development (1947) (16 UNTS 346) Art. VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.20 General Assembly Resolutions 23(I) (10 February 1946) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.2 97(I) (14 December 1946) (registration of treaties under UNC 102) . . . . . . . . . . . . . . . . . . . . 74.1 364B(IV) (1 December 1949) (registration and publication of treaties) . . . . . . . . . . . . . . . . . 74.1 482(V) (12 December 1950) (registration and publication of treaties) . . . . . . . . . . . . . . . . . . 74.1 3281(XXIX) (12 December 1974) (Charter of Economic Rights and Duties of States) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble.17 33/141A (19 December 1978) (registration and publication of treaties) . . . . . . . . . . . . . . . . . 74.1 51/191 (16 December 1996) (UN Declaration against Corruption and Bribery in International Commercial Transactions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.83 52/153 (15 December 1997) (UN Decade of International Law) . . . . . . . . . . . . . . . . . . . . . . . 74.1 56/83 (12 December 2001) (ILC Articles on State Responsibility) . . . . . . . . . . . . . . . . . . . 25.525 Office of the UN High Commissioner for Human Rights, Principles for Responsible Contracts (2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.173

ARBITRATION AND CONCILIATION RULES AND RELATED INSTRUMENTS

China International Economic and Trade Arbitration Commission CIETAC International Investment Arbitration Rules (2017) Art. 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101

Commercial Arbitration and Mediation Center for the Americas CAMCA Arbitration Rules (35 ILM 1541 (1996)) Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Art. 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 29(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.33, 62 Art. 29(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.36 Art. 29(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.128 Art. 29(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.2 Art. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.88 Art. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25, 50.1

Hong Kong International Arbitration Centre HKIAC Guidelines on the Use of a Secretary to the Arbitral Tribunal (2014) . . . 57.98 n205

Institut de Droit International/Institute of International Law Articles on Arbitration between States, State Enterprises or State Entities and Foreign Enterprises (1989) (63(2) Ann IDI 324 (1990)) Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.81 n124 Art. 3(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1092 Art. 3(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.2

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Art. 3(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Art. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.79 n118 Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.72 n105 Art. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.637

International Bar Association Guidelines on Conflicts of Interest in International Arbitration (2004) . . . . . 57.1, 2, 52, 67, 101, 58.16, 17 General Standard 6(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 n. 211 Guidelines on Conflicts of Interest in International Arbitration (2014) . . . 52.358, 57.1, 52, 58.18 Rules for Investor–State Mediation (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.18 Rules on the Taking of Evidence in International Arbitration (2010) . . . . . . . . . . 43.7, 44.22

International Chamber of Commerce ICC Arbitration Rules (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 n67 ICC Arbitration Rules (2021) . . . . . 11.21, 25.148–9, 304–5, 843, 849, 915–16, 1001, 26.27, 33–9, 46–52, 61, 177–9, 190–5, 41.29, 46.73, 48.128, 52.5, n5, 167, 206–7, 53.27 Art. 4(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.23 Art. 5(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.23 Art. 5(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3 Art. 6(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.23 Art. 6(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.2 Art. 6(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1092 n1717 Art. 11(1)-(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Art. 11(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.23 Art. 12(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.49 n65 Art. 12(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.3 Art. 13(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 n2 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 Art. 14(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Art. 15(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.2 Art. 18(3)-(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.1, 2 Art. 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.200 Art. 21(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.332 Art. 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1, 46.3 Art. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.3 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 26(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Art. 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1 Art. 28(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.267 Art. 29(2)–(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Art. 32(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.8 n8, 48.17 Art. 32(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62

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Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.88 Art. 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.36 Art. 35(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.36, 49.1 Art. 35(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.1 Art. 35(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6, 53.3 Art. 36(2)–(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Art. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.81 Arts. 37–8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.4 Art. 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.1 Art. 38(3)-(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.1 Art. 38(4)–(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.25 Art. 38(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.25 Art. 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4 Appendix III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.1, 61.48 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.9 Arts. 1–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.4 n4 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.14, 60.6 ICC Mediation Rules (2014) Art. 6(5)–(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.7 ICC Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration (2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98, 101 ICC Rules of Optional Conciliation (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.9

International Law Commission Model Rules on Arbitral Procedure ([1958] 2 YBILC 83) Art. 3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.3 Art. 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.49 n65 Art. 3(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.49 n65 Art. 3(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Art. 4(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.6 Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 Art. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.2 Art. 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.332 Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.232 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Art. 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3, 47.1 Art. 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.88 Art. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.88 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Art. 28(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.33 Art. 28(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.113 Art. 28(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.35, 49.2 Art. 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.3

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Art. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25 Art. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.3 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Art. 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Art. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.1, 112 Art. 35(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.148, 152 Art. 35(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.323 Art. 35(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.331, 425 Art. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.10 Art. 36(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.711 Arts. 36–8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.13 Art. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.10, 799 Art. 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.2, 60.1 Art. 38(3)-(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.1

London Court of International Arbitration LCIA Arbitration Rules (2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.20, 26.27 Art. 7.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.3 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1 Art. 26.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.2 Art. 26.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.3 Art. 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 Art. 34.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4 LCIA Notes for Arbitrators (2017) Art. 8.1–8.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98

Permanent Court of Arbitration PCA Arbitration Rules (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.20 Art. 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 PCA Optional Rules for Arbitrating Disputes between Two Parties Only One of Which Is a State (1993) Art. 24(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 25(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 PCA Optional Rules for Arbitrating Disputes between Two States (1993) Art. 24(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 25(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1

Singapore International Arbitration Centre SIAC Arbitration Rules (2016) Rule 11(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.2 Rule 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Rule 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 Rule 32.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141, 49.2 Rule 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25 Rule 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141

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schreuer’s commentary on the icsid convention

SIAC Investment Rules (2017) Rule 10.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Rule 10.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Rule 10.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Rule 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 Rule 33.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.101 SIAC Practice Note on the Appointment of Administrative Secretaries (2015) . . . . . . . 57.98

Stockholm Chamber of Commerce SCC Arbitration Rules (2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.20 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 Art. 14(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.2 Art. 17(3)–(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.2 Art. 17(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 Art. 17(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 Art. 19(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Art. 21(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 Art. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1, 44.1 Art. 24(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.2, 62.2 Art. 27(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.200 Art. 29(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.2 Arts. 30–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Art. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1 Art. 42(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.3 Art. 47(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Arts. 49–51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.4 Art. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.1, 25 Art. 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.81 Art. 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4, 61.81 Appendix IV (Schedule of Costs) Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.9 Arts. 1–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.4 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.1 Art. 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.6 Art. 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.6 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.14 Arts. 49–51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.2 SCC Guidelines for Arbitrators (2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98 SCC Mediation Rules (2014) Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.7

United Nations Commission on International Trade Law Draft Code of Conduct for Adjudicators in Investor–State Dispute Settlement (1 May 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.20 n12, 42, 57.53

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Art. 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98 Art. 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.98 Arts. 4–9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.87 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.53 UNCITRAL Arbitration Rules (1976) (15 ILM 701 (1976)) Art. 10(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 Art. 13(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 n17 UNCITRAL Arbitration Rules (2010) (15 ILM 701 (2010)) Art. 12(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 UNCITRAL Arbitration Rules (2013) Art. 1(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 Art. 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.4 Art. 4(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3 Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.16 Art. 6(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6, 40.17 n10 Arts. 7-10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.23, 38.2 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.2 Art. 9(2)-(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.2 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 Art. 12(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 Art. 12(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Art. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.12 Art. 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 Art. 17(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.1 Art. 20(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 21(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 21(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3 Art. 23(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1092 n1717 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.3 Art. 26(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.267 Art. 27(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.156 Arts. 27–9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 28(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.17 Art. 33(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.8 n8 Art. 34(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.33, 53.3 Art. 34(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 34(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141, 48.128 Art. 34(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.2 Art. 35(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.200 Art. 35(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.332 Art. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.88 Art. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Art. 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25 Art. 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25 Art. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.1

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schreuer’s commentary on the icsid convention

Arts. 40–2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.25 Arts. 40–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.4 Art. 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.1, 6 Art. 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.1 Art. 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.81 UNCITRAL Conciliation Rules (1980) (20 ILM 300 (1981)) Art. 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.17 n14 Art. 7(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.12 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.5 Art. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.17 n14 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.24 Art. 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.7 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.3 n4 UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) (24 ILM 1302 (1985)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.173 Chapter II (Arbitration agreement) Art. 7(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.777 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.267 Chapter III (Composition of arbitral tribunal) Art. 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.49 Art. 11(1)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.6 n2 Art. 11(3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.49 Art. 11(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Art. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 Art. 12(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.17 n10 Art. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.15 Chapter IV (Jurisdiction of arbitral tribunal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1 Art. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.2 Art. 16(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.1092 n1717 Chapter IV A (Interim measures and preliminary orders) Art. 17A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1 n4, 89 Chapter V (Conduct of arbitral proceedings) Art. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.26, 52.335 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.1 Art. 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1 Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.1 Chapter VI (Making of award and termination of proceedings) Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.88 Art. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.2 Art. 31(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.33 Art. 31(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.62 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.25 Art. 33(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1 Chapter VII (Recourse against award) Art. 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6, 322, 424 Art. 34(2)(a)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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Art. 34(2)(a)(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.193, 330 Art. 34(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.36 Chapter VIII (Recognition and enforcement of awards) Art. 35(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.3 Art. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6, 322, 424 Art. 36(1)(a)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.148 Art. 36(1)(a)(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.123 n206, 330 Art. 36(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.713, 761, 781 UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration . . . 44.19, 22, 141, 177, 48.129, 150, 152 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.177 Art. 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14.12 n15, 48.129 Art. 3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 n15 Art. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.177 Art. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.177

NATIONAL MODEL TREATIES Austria Model BIT (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.831 Canada Model BIT (2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.831 Arts. 3–32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 n249 Art. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 Art. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.102 n183 Canada Model Foreign Investment Protection and Promotion Agreement (2004) Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.214 n332, 1207 n1894 China Model BIT (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.216, 831 Art. 9(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n35 Colombia Model BIT (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.220 France Model BIT (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.831 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.216 Art. 1(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32 Germany Model BIT (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.831 Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1275, 758 n1277 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.982 Art. 10(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32, 832 Art. 11(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1275 Germany Model BIT (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.832 India Model BIT (2015) Art. 1(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.222 n340 Italy Model Investment Promotion and Protection Agreement (2003) . . . . . . . . . . . . . . 25.831 Art. 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.216 Korea Model BIT (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.215, 831 Latvia Model BIT (2005) (draft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.831

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schreuer’s commentary on the icsid convention

Netherlands Model BIT (2004) Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.215 Art. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.964 Netherlands Model Investment Agreement (2019) Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.221 Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1405 n2227, 1428 n2257 Switzerland Model BIT (1995) Art. 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1207 n1895 Art. 8(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.46 United Kingdom Model IPPA (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.194 Art. 1(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.215 Art. 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1023 Art. 8 (Alternatives) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.964 n1531 Art. 8 (Alternative II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.31 n32, 849 Art. 8(2) (Alternative I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1321 n2088, 1428 n2256 Art. 8(2)(a) (Alternative II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.517 Art. 8(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 Art. 8(3) (Alternative I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.31 n34, 859 Art. 8(4) (Alternative I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.44 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.758 n1277 United States Model BIT (1992) Art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.55 United States Model BIT (2004) Art. 27(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 Annex D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 United States Model BIT (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.36 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.220, 224, 321 n520 Art. 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1023 Art. 24(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.846 Art. 24(3)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.517 Art. 24(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.517, 1324 n2095 Art. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.31 n32 Art. 27(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38 Art. 28(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.757 n1275, 61.102 Art. 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 n249 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.117 Art. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.32 Arts. 32–33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.141 n249 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200 Art. 33(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.200

NATIONAL LEGISLATION Albania Law on Foreign Investments 1993 Art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.202–3, 1206 Art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.960–1, 26.56 n57 Art. 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.783–4, 42.292

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Australia Foreign States Immunities Act 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.15, 22, 24 s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54.75–6, 55.15 s 17(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.134 n259 s 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.22 s 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.42 s 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.93 s 31(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.93 s 32(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55.43 78 s 32(3)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.43, 69, 76 s 35(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.77, 93 s 35(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.135 s 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.43 International Arbitration Act 1974 (as subsequently amended) s 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4 s 33(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.9 s 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 Botswana Settlement of Investment Disputes (Convention) Act 1970 ss 3–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n16 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n17 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 n5 Canada Settlement of International Investment Disputes Act 2008 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 n5 s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.10 s 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 State Immunity Act 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.15 s 10(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.106 n234 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n16 s 11(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.92 s 11(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.41, 92 s 11(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.135 s 11(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.76, 92 s 11(4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.77, 92 Central African Republic Code of Investments 1988 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.32, 1319 Chad Décret No 446-PR-MCI-87 fixant la procédure d’octroi des avantages du Code des Investissements 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1319 Art. 17(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1404 Côte d’Ivoire Code des Investissements 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.821–2 Democratic Republic of Congo Investment Code (Zaire) 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1319

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Art. 1(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1404 Art. 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1319 Egypt Law No 8 on Investment Guarantees and Incentives 1997 . . . . . . . . . . . . . . . . . . . . . . 25.798, 958 Law No 43 Concerning the Investment of Arab and Foreign Funds and the Free Zone 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.161–4 Art. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.790, 959 Law No 230 on Investment 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.959 Art. 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.793–4, 798 El Salvador Investment Law 1999 Art. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.35, 785, 797, 957–8 Georgia Investment Law 1996 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.204–5, 386, 956 Art. 16(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.666–8, 26.57 Germany Gesetz über die Mitwirkung des Bundes an der Besetzung von Gremien (Bundesgremienbesetzungsgesetz) (Federal Committee Appointments Act) 2015 . . . 13.4 Gesetz zu dem Übereinkommen vom 18. März 1965 zur Beilegung von Investitionsstreitigkeiten zwischen Staaten und Angehörigen anderer Staaten (1969) (ICSID Convention (1965) Act) 1969 Art. 2(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.9 n9 Indonesia Foreign Investment Law 1967 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.264–7 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.267 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.266, 267 Art. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1267, 52.267 Ireland Arbitration Act 1980 s 5(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69.9 n10 s 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n17 s 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n14 s 16(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 s 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.9 n.9 Jamaica Investment Disputes Awards (Enforcement) Act 1967 s 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 n5 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n14 Kazakhstan Foreign Investment Law 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.700, 899, 1083, 1401 Art. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.212, 1206 Art. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.184 Art. 6(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.899, 1083 Art. 6(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.209 Art. 6(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.209

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Kenya Investment Disputes Convention Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1996 s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n15 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 Liberia General Business Law (Liberian Code of Laws 1956, Title 14) . . . 42.99, 160, 178–9, 284–5 Madagascar Investment Code (Loi No 89-026 Relative au Code des Investissements) 1989 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.32 Art. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.615 n1008 Art. 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.32 n38 Art. 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.98 n147 Mining Code (2005) Art. 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.173 n269 Malawi Investment Disputes (Enforcement of Awards) Act 1966 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 Malaysia Convention on the Settlement of Investment Disputes Act 1966 s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 Mali Mining Code 1970 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.181 Mining Code 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.181 Montenegro Foreign Investment Law 2011 Art. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.809 Mozambique Law on Investment 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.813, 1206 Art. 1(1)(q) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1320 New Zealand Arbitration (International Investment Disputes) Act 1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.10 s 4(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.10 Arbitration (International Investment Disputes) Amendment Act 2000 s 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n15 Nigeria International Centre for Settlement of Investment Disputes (Enforcement of Awards) Act 1967 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 Investment Promotion Commission Act 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.795 Norway Act Relating to the Implementation of the Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States 1967 § 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n15

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Pakistan Arbitration (International Investment Disputes) Act 2011 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n17 s 9(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n14 Papua New Guinea Investment Disputes Convention Act 1978 Art. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.808 Investment Promotion Act 1978 Art. 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.807 Peru Foreign Investment Law 1991 Art. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.183 Senegal Law Establishing the Industrial Free Zone of Dakar 1974 Art. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1319 Singapore Arbitration (International Investment Disputes) Act 1968 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 s 6(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n15 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.11 n17 Sri Lanka Greater Colombo Economic Commission Law 1978 s 26(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.555 n918 s 26(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1319 Tanzania Investment Act 1997 s 23.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.806 National Investment (Promotion and Protection) Act 1990 s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1206, 1320 s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.201 Timor-Leste Foreign Investment Law (2005) (Law No 05/2005) Arts 19–20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.963 Art. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.212 Art. 23(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.795–6 Tunisia Investment Law 1969 Art. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.823, 900 Turkmenistan Foreign Investment Law 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.814 Uganda Investment Code 1991 s 10(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1206, 1320 s 28(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.32 n36

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United Kingdom Arbitration (International Investment Disputes) Act 1966 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.73 s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 s 3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.9 n8, 10 n10 State Immunity Act 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1123, 55.15, 89–91, 134 s 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.38 s 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.90, 135 s 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.132 s 13(2)(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.106 s 13(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.38 s 13(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.89, 91 s 13(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.38, 61, 89 s 13(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.38 s 14(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.135 s 14(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.135 s 14(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.77, 90 s 16(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.69 s 16(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.90 s 16(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.76 n170 s 17(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.38 United States 9 USC §§ 1–14 (Federal Arbitration Act 1925) Ch 1, §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.10 Ch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.22 9 USC § 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.103 n153, 55.35 22 USC § 288 (International Organizations Immunities Act 1945) . . . . . . . . . . . . . . . . . . 18.1 n4 22 USC §§ 1650, 1650(a) (Convention on the Settlement of Investment Disputes Act 1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.130, 69.8 s 3(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.125, 69.8 28 USC § 1782 (Assistance to foreign and international tribunals and to litigants before such tribunals) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.270 28 USC §§ 1330, 1602–1611 (Foreign Sovereign Immunities Act 1976) . . . . . . . . . 55.15, 31 § 1330(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.132 n231 § 1391(f)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.132 § 1603(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.132 § 1605(a)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.34 § 1605(a)(6)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.83 § 1609 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.31 § 1610 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.31 § 1610(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.74, 132 § 1610(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.87 § 1610(a)(1)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.32 § 1610(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.31 § 1610(a)(4)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.69 § 1610(a)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.33 n56, 87 § 1610(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.132 § 1610(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.106 n234

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§ 1611(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.77, 88 § 1611(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.76, 88 Uzbekistan Foreign Investment Law 1998 Art. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.802–3 Venezuela Investment Law 1999 Art. 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.810 Yemen Investment Law 1991 (Law No 22 of 1991) Art. 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.152 Investment Law 2010 (Law No 15 of 2010) Art. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.56 Zaire: see Democratic Republic of Congo Zambia Investment Disputes Convention Act 1970 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8

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ABBREVIATIONS

AAA AF AFDI AFR AJIL Ann Dig Ann IDI AR Arb ARIA Art(s). ASEAN ASIL BCDR BGBl BGE BIICL BIRD BIT(s) BLEU BSE Bus BVerfGE BYBIL CAMCA Can Centre CETA cf Ch(s) CIETAC CIRDI CJEU Co

American Arbitration Association Additional Facility Annuaire Français de Droit International Administrative and Financial Regulations American Journal of International Law Annual Digest of Public International Law Cases Institut de Droit International Annuaire Arbitration Rules Arbitration American Review of International Arbitration Article(s) Association of South East Asian Nations American Society of International Law Bahrain Chamber for Dispute Resolution Bundesgesetzblatt Entscheidungen des Bundesgerichts (Switzerland) British Institute of International and Comparative Law Banque internationale pour la reconstruction et le développement Bilateral Investment Treaty(ies) Belgium–Luxembourg Economic Union Bovine Spongiform Encephalopathy Business Entscheidungen des Bundesverfassungsgerichts (Germany) The British Yearbook of International Law Commercial Arbitration and Mediation Center for the Americas Canadian see ICSID Comprehensive Economic and Trade Agreement confer (compare) Chapter(s) China International Economic and Trade Arbitration Commission Centre International pour le Règlement des Différends Relatifs aux Investissements Court of Justice of the European Union Company

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Comm Comp CONELEC Contemp Convention Corp CPTPP CR CTS CUP DC DC Cir DDC Disp Res Doc DR DRC DR–CAFTA DR Congo Econ ECR ECSI ECT ED Va ed(s) edn eg EILA Rev EJIL esp ETS EU Eur EWCA EWHC F F Supp FAA FCA ff FIL FIPA fn FSIA FTA

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Commerce/Commercial Comparative Consejo Nacional de Electricidad Contemporary ICSID Convention Corporation Comprehensive and Progressive Agreement for Trans-Pacific Partnership Conciliation Rules Consolidated Treaty Series Cambridge University Press District of Columbia United States Court of Appeals for the District of Columbia Circuit United States District Court for the District of Columbia Dispute Resolution Document Dominican Republic Democratic Republic of Congo Dominican Republic–Central America Free Trade Agreement Democratic Republic of the Congo Economic European Court Reports European Convention on State Immunity Energy Charter Treaty United States District Court of the Eastern District of Virginia Editor(s) Edition exempli gratia (for example) European Investment Law and Arbitration Review European Journal of International Law especially European Treaty Series European Union European Court of Appeal (Reports) (England and Wales) High Court of Justice (Reports) (England and Wales) Federal Reporter Federal Supplement Federal Arbitration Act Federal Court of Australia and following (et sequens) Foreign Investment Law Foreign Investment Protection Agreement Footnote(s) (external) Foreign Sovereign Immunities Act Free Trade Agreement

List of Abbreviations

GATS GCEU Geo Geo Wash GGB History, Vol. I History, Vol. II HKIAC IA Reporter i.e. ibid IBA IBRD ICC ICCA ICCPR ICESCR ICJ ICLQ ICSID IDA IDI IFC IIA ILA ILC ILC(ASR) ILC(SI) ILDC ILJ ILM ILR IMF Int’l IPPA IPRax IR Iran–USCTR ISDS ITLOS J JDI

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General Agreement on Trade in Services General Court of the European Union Georgetown George Washington Greek Government Bond History of the ICSID Convention – Documents Concerning the Origin and the Formulation of the Convention (ICSID 1970) History of the ICSID Convention – Documents Concerning the Origin and the Formulation of the Convention (ICSID 1968) Hong Kong International Arbitration Centre Investment Arbitration Reporter id est (that is) ibidem (the same) International Bar Association International Bank for Reconstruction and Development International Chamber of Commerce International Council for Commercial Arbitration International Covenant on Civil and Political Rights’ International Covenant on Economic, Social and Cultural Rights International Court of Justice International and Comparative Law Quarterly International Centre for Settlement of Investment Disputes International Development Association Institut de Droit International International Finance Corporation international investment agreement International Law Association International Law Commission International Law Commission Articles on Responsibility of States for Internationally Wrongful Acts International Law Commission Draft Articles on Jurisdictional Immunities of States and their Property International Law in Domestic Courts International Law Journal International Legal Materials International Law Reports International Monetary Fund International International Promotion and Protection Agreement Praxis des Internationalen Privat- und Verfahrensrechts Institution Rules Iran–United States Claims Tribunal Reports investor–State dispute settlement International Tribunal for the Law of the Sea Journal Journal du Droit International

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JIDS JIEL JISP JIL JILP JTL JWELB JWIT JWT L LCIA LGDJ LIEI LJ LNTS LPICT LR Ltd Mar Mercosur MFN Mich MIGA n/nn NAFTA Neth No NYU OECD OHADA OHCHR OJ ONSC OPIC OSCE OUP p, pp Pa para(s) PCA PCIJ Pepp PNG Pol’y PPA

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Journal of International Dispute Settlement Journal of International Economic Law UN Convention on Jurisdictional Immunities of States and their Property Journal of International Law Journal of International Law and Politics Journal of Transnational Law Journal of World Energy Law and Business The Journal of World Investment & Trade Journal of World Trade Law London Court of International Arbitration Librairie Générale de Droit Legal Issues of Economic Integration Law Journal League of Nations Treaty Series The Law & Practice of International Courts and Tribunals Law Review Limited Maritime Mercado Común del Sur most-favored-nation Michigan Multilateral Investment Guarantee Agency footnote(s) (internal) North American Free Trade Agreement Netherlands Number New York University Organisation for Economic Co-operation and Development Organisation for the Harmonisation of Business Law in Africa Office of the UN High Commissioner for Human Rights Official Journal of the European Union Superior Court of Justice (Reports) (Canada) Overseas Private Investment Corporation Organization for Security and Co-operation in Europe Oxford University Press page(s) Pennsylvania paragraph(s) Permanent Court of Arbitration Permanent Court of International Justice Pepperdine Papua New Guinea Policy power purchase agreement

List of Abbreviations

Pub PUF RCDIP RdC RGD RDIDC Rec Ass’n B City NY Rep Res Rev Riv Dir Int Priv & Proc Rule SADC s / sec SCC SchiedsVZ SDNY S-G SIA SIAC Stat Suppl TDM TEC TELC

TFEU TLD U / Univ UAE UK UKSC UN UNC UNCAC UNCITRAL UNCLOS UNCTAD UNESCO UNGA UNIDROIT UNRIAA

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Publisher(s) Presses Universitaires de France Revue Critique de Droit International Privé Recueil des Cours / The Hague Academy Collected Courses Revue Générale de Droit Revue de Droit International et de Droit Comparé The Record of the Association of the Bar of the City of New York Reports Resolution Review Rivista di Diritto Internazionale Privato e Processuale Arbitration Rule Southern African Development Community section Arbitration Institute of the Stockholm Chamber of Commerce Zeitschrift für Schiedsverfahren United States District Court for the Southern District of New York Secretary-General State Immunity Act Singapore International Arbitration Centre Statute Supplement Transnational Dispute Management Treaty Establishing the European Economic Community Beiträge zum Transnationalen Wirtschaftsrecht (Essays on Transnational Economic Law), Transnational Economic Law Research Center, Martin Luther University Halle-Wittenberg School of Law Treaty on the Functioning of the European Union Trade, Law and Development University United Arab Emirates United Kingdom United Kingdom Supreme Court (Reports) United Nations Charter of the United Nations UN Convention against Corruption United Nations Commission on International Trade Law United Nations Convention on Law of the Sea United Nations Conference on Trade and Development United Nations Educational, Scientific and Cultural Organization United Nations General Assembly International Institute for the Unification of Private Law United Nations Reports of International Arbitral Awards

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UNTS UP US USC USMCA USSR USTR USTS v Va Vand VCDR VCLT VCSST viz Vol(s) WBAT WAMR Wash WTO YB YBIL YBILC ZaöRV

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United Nations Treaty Series University Press United States (Reports) United States Code United States–Mexico–Canada Agreement Union of Soviet Socialist Republics US Trade Representative United States Treaty Series versus (against) Virginia Vanderbilt Vienna Convention on Diplomatic Relations Vienna Convention on the Law of Treaties Vienna Convention on Succession of States in Respect of Treaties (1978) videlicet (namely) Volume(s) World Bank Administrative Tribunal World Arbitration & Mediation Review Washington World Trade Organization Yearbook Yearbook of International Law Yearbook of the International Law Commission Zeitschrift für ausländisches öffentliches Recht und Völkerrecht

CONVENTION ON THE SETTLEMENT OF I N V E S T ME N T D I S P U T E S B E T W E E N S T A T E S A N D N A T I O N A L S O F OT H E R S T A T E S

PREAMBLE The Contracting States Considering the need for international cooperation for economic development, and the role of private international investment therein; Bearing in mind the possibility that from time to time disputes may arise in connection with such investment between Contracting States and nationals of other Contracting States; Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases; Attaching particular importance to the availability of facilities for international conciliation or arbitration to which Contracting States and nationals of other Contracting States may submit such disputes if they so desire; Desiring to establish such facilities under the auspices of the International Bank for Reconstruction and Development; Recognizing that mutual consent by the parties to submit such disputes to conciliation or to arbitration through such facilities constitutes a binding agreement which requires in particular that due consideration be given to any recommendation of conciliators, and that any arbitral award be complied with; and Declaring that no Contracting State shall by the mere fact of its ratification, acceptance or approval of this Convention and without its consent be deemed to be under any obligation to submit any particular dispute to conciliation or arbitration, Have agreed as follows:

CHAPTER I International Centre for Settlement of Investment Disputes Section 1 Establishment and Organization

Article 1 (1) There is hereby established the International Centre for Settlement of Investment Disputes (hereinafter called the Centre).

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(2) The purpose of the Centre shall be to provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of this Convention.

Article 2 The seat of the Centre shall be at the principal office of the International Bank for Reconstruction and Development (hereinafter called the Bank). The seat may be moved to another place by decision of the Administrative Council adopted by a majority of two-thirds of its members. Article 3 The Centre shall have an Administrative Council and a Secretariat and shall maintain a Panel of Conciliators and a Panel of Arbitrators. Section 2 The Administrative Council

Article 4 (1) The Administrative Council shall be composed of one representative of each Contracting State. An alternate may act as representative in case of his principal’s absence from a meeting or inability to act. (2) In the absence of a contrary designation, each governor and alternate governor of the Bank appointed by a Contracting State shall be ex officio its representative and its alternate respectively. Article 5 The President of the Bank shall be ex officio Chairman of the Administrative Council (hereinafter called the Chairman) but shall have no vote. During his absence or inability to act and during any vacancy in the office of President of the Bank, the person for the time being acting as President shall act as Chairman of the Administrative Council. Article 6 (1) Without prejudice to the powers and functions vested in it by other provisions of this Convention, the Administrative Council shall: (a) adopt the administrative and financial regulations of the Centre; (b) adopt the rules of procedure for the institution of conciliation and arbitration proceedings; (c) adopt the rules of procedure for conciliation and arbitration proceedings (hereinafter called the Conciliation Rules and the Arbitration Rules); (d) approve arrangements with the Bank for the use of the Bank’s administrative facilities and services; (e) determine the conditions of service of the Secretary-General and of any Deputy Secretary-General; (f ) adopt the annual budget of revenues and expenditures of the Centre; (g) approve the annual report on the operation of the Centre.

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The decisions referred to in sub-paragraphs (a), (b), (c) and (f ) above shall be adopted by a majority of two-thirds of the members of the Administrative Council. (2) The Administrative Council may appoint such committees as it considers necessary. (3) The Administrative Council shall also exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions of this Convention.

Article 7 (1) The Administrative Council shall hold an annual meeting and such other meetings as may be determined by the Council, or convened by the Chairman, or convened by the Secretary-General at the request of not less than five members of the Council. (2) Each member of the Administrative Council shall have one vote and, except as otherwise herein provided, all matters before the Council shall be decided by a majority of the votes cast. (3) A quorum for any meeting of the Administrative Council shall be a majority of its members. (4) The Administrative Council may establish, by a majority of two-thirds of its members, a procedure whereby the Chairman may seek a vote of the Council without convening a meeting of the Council. The vote shall be considered valid only if the majority of the members of the Council cast their votes within the time limit fixed by the said procedure. Article 8 Members of the Administrative Council and the Chairman shall serve without remuneration from the Centre. Section 3 The Secretariat

Article 9 The Secretariat shall consist of a Secretary-General, one or more Deputy SecretariesGeneral and staff. Article 10 (1) The Secretary-General and any Deputy Secretary-General shall be elected by the Administrative Council by a majority of two-thirds of its members upon the nomination of the Chairman for a term of service not exceeding six years and shall be eligible for reelection. After consulting the members of the Administrative Council, the Chairman shall propose one or more candidates for each such office. (2) The offices of Secretary-General and Deputy Secretary-General shall be incompatible with the exercise of any political function. Neither the Secretary-General nor any Deputy Secretary-General may hold any other employment or engage in any other occupation except with the approval of the Administrative Council. (3) During the Secretary-General’s absence or inability to act, and during any vacancy of the office of Secretary-General, the Deputy Secretary-General shall act as Secretary-General. If there shall be more than one Deputy Secretary-General, the

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Administrative Council shall determine in advance the order in which they shall act as Secretary-General.

Article 11 The Secretary-General shall be the legal representative and the principal officer of the Centre and shall be responsible for its administration, including the appointment of staff, in accordance with the provisions of this Convention and the rules adopted by the Administrative Council. He shall perform the function of registrar and shall have the power to authenticate arbitral awards rendered pursuant to this Convention, and to certify copies thereof. Section 4 The Panels

Article 12 The Panel of Conciliators and the Panel of Arbitrators shall each consist of qualified persons, designated as hereinafter provided, who are willing to serve thereon. Article 13 (1) Each Contracting State may designate to each Panel four persons who may but need not be its nationals. (2) The Chairman may designate ten persons to each Panel. The persons so designated to a Panel shall each have a different nationality. Article 14 (1) Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators. (2) The Chairman, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of assuring representation on the Panels of the principal legal systems of the world and of the main forms of economic activity. Article 15 (1) Panel members shall serve for renewable periods of six years. (2) In case of death or resignation of a member of a Panel, the authority which designated the member shall have the right to designate another person to serve for the remainder of that member’s term. (3) Panel members shall continue in office until their successors have been designated. Article 16 (1) A person may serve on both Panels. (2) If a person shall have been designated to serve on the same Panel by more than one Contracting State, or by one or more Contracting States and the Chairman, he shall be deemed to have been designated by the authority which first designated him or, if one such authority is the State of which he is a national, by that State.

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(3) All designations shall be notified to the Secretary-General and shall take effect from the date on which the notification is received. Section 5 Financing the Centre

Article 17 If the expenditure of the Centre cannot be met out of charges for the use of its facilities, or out of other receipts, the excess shall be borne by Contracting States which are members of the Bank in proportion to their respective subscriptions to the capital stock of the Bank, and by Contracting States which are not members of the Bank in accordance with rules adopted by the Administrative Council. Section 6 Status, Immunities and Privileges

Article 18 The Centre shall have full international legal personality. The legal capacity of the Centre shall include the capacity: (a) to contract; (b) to acquire and dispose of movable and immovable property; (c) to institute legal proceedings. Article 19 To enable the Centre to fulfil its functions, it shall enjoy in the territories of each Contracting State the immunities and privileges set forth in this Section. Article 20 The Centre, its property and assets shall enjoy immunity from all legal process, except when the Centre waives this immunity. Article 21 The Chairman, the members of the Administrative Council, persons acting as conciliators or arbitrators or members of a Committee appointed pursuant to paragraph (3) of Article 52, and the officers and employees of the Secretariat: (a) shall enjoy immunity from legal process with respect to acts performed by them in the exercise of their functions, except when the Centre waives this immunity; (b) not being local nationals, shall enjoy the same immunities from immigration restrictions, alien registration requirements and national service obligations, the same facilities as regards exchange restrictions and the same treatment in respect of travelling facilities as are accorded by Contracting States to the representatives, officials and employees of comparable rank of other Contracting States. Article 22 The provisions of Article 21 shall apply to persons appearing in proceedings under this Convention as parties, agents, counsel, advocates, witnesses or experts; provided,

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however, that sub-paragraph (b) thereof shall apply only in connection with their travel to and from, and their stay at, the place where the proceedings are held.

Article 23 (1) The archives of the Centre shall be inviolable, wherever they may be. (2) With regard to its official communications, the Centre shall be accorded by each Contracting State treatment not less favourable than that accorded to other international organizations. Article 24 (1) The Centre, its assets, property and income, and its operations and transactions authorized by this Convention shall be exempt from all taxation and customs duties. The Centre shall also be exempt from liability for the collection or payment of any taxes or customs duties. (2) Except in the case of local nationals, no tax shall be levied on or in respect of expense allowances paid by the Centre to the Chairman or members of the Administrative Council, or on or in respect of salaries, expense allowances or other emoluments paid by the Centre to officials or employees of the Secretariat. (3) No tax shall be levied on or in respect of fees or expense allowances received by persons acting as conciliators, or arbitrators, or members of a Committee appointed pursuant to paragraph (3) of Article 52, in proceedings under this Convention, if the sole jurisdictional basis for such tax is the location of the Centre or the place where such proceedings are conducted or the place where such fees or allowances are paid.

CHAPTER II Jurisdiction of the Centre

Article 25 (1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally. (2) “National of another Contracting State” means: (a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute; and (b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and any juridical person

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which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention. (3) Consent by a constituent subdivision or agency of a Contracting State shall require the approval of that State unless that State notifies the Centre that no such approval is required. (4) Any Contracting State may, at the time of ratification, acceptance or approval of this Convention or at any time thereafter, notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. The Secretary-General shall forthwith transmit such notification to all Contracting States. Such notification shall not constitute the consent required by paragraph (1).

Article 26 Consent of the parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy. A Contracting State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under this Convention. Article 27 (1) No Contracting State shall give diplomatic protection, or bring an international claim, in respect of a dispute which one of its nationals and another Contracting State shall have consented to submit or shall have submitted to arbitration under this Convention, unless such other Contracting State shall have failed to abide by and comply with the award rendered in such dispute. (2) Diplomatic protection, for the purposes of paragraph (1), shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.

CHAPTER III Conciliation Section 1 Request for Conciliation

Article 28 (1) Any Contracting State or any national of a Contracting State wishing to institute conciliation proceedings shall address a request to that effect in writing to the SecretaryGeneral who shall send a copy of the request to the other party. (2) The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to conciliation in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings. (3) The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register.

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schreuer’s commentary on the icsid convention Section 2 Constitution of the Conciliation Commission

Article 29 (1) The Conciliation Commission (hereinafter called the Commission) shall be constituted as soon as possible after registration of a request pursuant to Article 28. (2) (a) The Commission shall consist of a sole conciliator or any uneven number of conciliators appointed as the parties shall agree. (b) Where the parties do not agree upon the number of conciliators and the method of their appointment, the Commission shall consist of three conciliators, one conciliator appointed by each party and the third, who shall be the president of the Commission, appointed by agreement of the parties. Article 30 If the Commission shall not have been constituted within 90 days after notice of registration of the request has been dispatched by the Secretary-General in accordance with paragraph (3) of Article 28, or such other period as the parties may agree, the Chairman shall, at the request of either party and after consulting both parties as far as possible, appoint the conciliator or conciliators not yet appointed. Article 31 (1) Conciliators may be appointed from outside the Panel of Conciliators, except in the case of appointments by the Chairman pursuant to Article 30. (2) Conciliators appointed from outside the Panel of Conciliators shall possess the qualities stated in paragraph (1) of Article 14. Section 3 Conciliation Proceedings

Article 32 (1) The Commission shall be the judge of its own competence. (2) Any objection by a party to the dispute that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Commission, shall be considered by the Commission which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute. Article 33 Any conciliation proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Conciliation Rules in effect on the date on which the parties consented to conciliation. If any question of procedure arises which is not covered by this Section or the Conciliation Rules or any rules agreed by the parties, the Commission shall decide the question. Article 34 (1) It shall be the duty of the Commission to clarify the issues in dispute between the parties and to endeavour to bring about agreement between them upon mutually acceptable terms. To that end, the Commission may at any stage of the proceedings

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and from time to time recommend terms of settlement to the parties. The parties shall cooperate in good faith with the Commission in order to enable the Commission to carry out its functions, and shall give their most serious consideration to its recommendations. (2) If the parties reach agreement, the Commission shall draw up a report noting the issues in dispute and recording that the parties have reached agreement. If, at any stage of the proceedings, it appears to the Commission that there is no likelihood of agreement between the parties, it shall close the proceedings and shall draw up a report noting the submission of the dispute and recording the failure of the parties to reach agreement. If one party fails to appear or participate in the proceedings, the Commission shall close the proceedings and shall draw up a report noting that party’s failure to appear or participate.

Article 35 Except as the parties to the dispute shall otherwise agree, neither party to a conciliation proceeding shall be entitled in any other proceeding, whether before arbitrators or in a court of law or otherwise, to invoke or rely on any views expressed or statements or admissions or offers of settlement made by the other party in the conciliation proceedings, or the report or any recommendations made by the Commission.

CHAPTER IV Arbitration Section 1 Request for Arbitration

Article 36 (1) Any Contracting State or any national of a Contracting State wishing to institute arbitration proceedings shall address a request to that effect in writing to the SecretaryGeneral who shall send a copy of the request to the other party. (2) The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to arbitration in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings. (3) The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register. Section 2 Constitution of the Tribunal

Article 37 (1) The Arbitral Tribunal (hereinafter called the Tribunal) shall be constituted as soon as possible after registration of a request pursuant to Article 36. (2) (a) The Tribunal shall consist of a sole arbitrator or any uneven number of arbitrators appointed as the parties shall agree. (b) Where the parties do not agree upon the number of arbitrators and the method of their appointment, the Tribunal shall consist of three arbitrators, one arbitrator appointed by each party and the third, who shall be the president of the Tribunal, appointed by agreement of the parties.

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Article 38 If the Tribunal shall not have been constituted within 90 days after notice of registration of the request has been dispatched by the Secretary-General in accordance with paragraph (3) of Article 36, or such other period as the parties may agree, the Chairman shall, at the request of either party and after consulting both parties as far as possible, appoint the arbitrator or arbitrators not yet appointed. Arbitrators appointed by the Chairman pursuant to this Article shall not be nationals of the Contracting State party to the dispute or of the Contracting State whose national is a party to the dispute. Article 39 The majority of the arbitrators shall be nationals of States other than the Contracting State party to the dispute and the Contracting State whose national is a party to the dispute; provided, however, that the foregoing provisions of this Article shall not apply if the sole arbitrator or each individual member of the Tribunal has been appointed by agreement of the parties. Article 40 (1) Arbitrators may be appointed from outside the Panel of Arbitrators, except in the case of appointments by the Chairman pursuant to Article 38. (2) Arbitrators appointed from outside the Panel of Arbitrators shall possess the qualities stated in paragraph (1) of Article 14. Section 3 Powers and Functions of the Tribunal

Article 41 (1) The Tribunal shall be the judge of its own competence. (2) Any objection by a party to the dispute that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Tribunal, shall be considered by the Tribunal which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute. Article 42 (1) The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable. (2) The Tribunal may not bring in a finding of non liquet on the ground of silence or obscurity of the law. (3) The provisions of paragraphs (1) and (2) shall not prejudice the power of the Tribunal to decide a dispute ex aequo et bono if the parties so agree. Article 43 Except as the parties otherwise agree, the Tribunal may, if it deems it necessary at any stage of the proceedings,

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(a) call upon the parties to produce documents or other evidence, and (b) visit the scene connected with the dispute, and conduct such inquiries there as it may deem appropriate.

Article 44 Any arbitration proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Arbitration Rules in effect on the date on which the parties consented to arbitration. If any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the question. Article 45 (1) Failure of a party to appear or to present his case shall not be deemed an admission of the other party’s assertions. (2) If a party fails to appear or to present his case at any stage of the proceedings the other party may request the Tribunal to deal with the questions submitted to it and to render an award. Before rendering an award, the Tribunal shall notify, and grant a period of grace to, the party failing to appear or to present its case, unless it is satisfied that that party does not intend to do so. Article 46 Except as the parties otherwise agree, the Tribunal shall, if requested by a party, determine any incidental or additional claims or counterclaims arising directly out of the subject-matter of the dispute provided that they are within the scope of the consent of the parties and are otherwise within the jurisdiction of the Centre. Article 47 Except as the parties otherwise agree, the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party. Section 4 The Award

Article 48 (1) The Tribunal shall decide questions by a majority of the votes of all its members. (2) The award of the Tribunal shall be in writing and shall be signed by the members of the Tribunal who voted for it. (3) The award shall deal with every question submitted to the Tribunal, and shall state the reasons upon which it is based. (4) Any member of the Tribunal may attach his individual opinion to the award, whether he dissents from the majority or not, or a statement of his dissent. (5) The Centre shall not publish the award without the consent of the parties.

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Article 49 (1) The Secretary-General shall promptly dispatch certified copies of the award to the parties. The award shall be deemed to have been rendered on the date on which the certified copies were dispatched. (2) The Tribunal upon the request of a party made within 45 days after the date on which the award was rendered may after notice to the other party decide any question which it had omitted to decide in the award, and shall rectify any clerical, arithmetical or similar error in the award. Its decision shall become part of the award and shall be notified to the parties in the same manner as the award. The periods of time provided for under paragraph (2) of Article 51 and paragraph (2) of Article 52 shall run from the date on which the decision was rendered. Section 5 Interpretation, Revision and Annulment of the Award

Article 50 (1) If any dispute shall arise between the parties as to the meaning or scope of an award, either party may request interpretation of the award by an application in writing addressed to the Secretary-General. (2) The request shall, if possible, be submitted to the Tribunal which rendered the award. If this shall not be possible, a new Tribunal shall be constituted in accordance with Section 2 of this Chapter. The Tribunal may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. Article 51 (1) Either party may request revision of the award by an application in writing addressed to the Secretary-General on the ground of discovery of some fact of such a nature as decisively to affect the award, provided that when the award was rendered that fact was unknown to the Tribunal and to the applicant and that the applicant’s ignorance of that fact was not due to negligence. (2) The application shall be made within 90 days after the discovery of such fact and in any event within three years after the date on which the award was rendered. (3) The request shall, if possible, be submitted to the Tribunal which rendered the award. If this shall not be possible, a new Tribunal shall be constituted in accordance with Section 2 of this Chapter. (4) The Tribunal may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Tribunal rules on such request. Article 52 (1) Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds: (a) that the Tribunal was not properly constituted; (b) that the Tribunal has manifestly exceeded its powers; (c) that there was corruption on the part of a member of the Tribunal;

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(d) that there has been a serious departure from a fundamental rule of procedure; or (e) that the award has failed to state the reasons on which it is based. (2) The application shall be made within 120 days after the date on which the award was rendered except that when annulment is requested on the ground of corruption such application shall be made within 120 days after discovery of the corruption and in any event within three years after the date on which the award was rendered. (3) On receipt of the request the Chairman shall forthwith appoint from the Panel of Arbitrators an ad hoc Committee of three persons. None of the members of the Committee shall have been a member of the Tribunal which rendered the award, shall be of the same nationality as any such member, shall be a national of the State party to the dispute or of the State whose national is a party to the dispute, shall have been designated to the Panel of Arbitrators by either of those States, or shall have acted as a conciliator in the same dispute. The Committee shall have the authority to annul the award or any part thereof on any of the grounds set forth in paragraph (1). (4) The provisions of Articles 41–45, 48, 49, 53 and 54, and of Chapters VI and VII shall apply mutatis mutandis to proceedings before the Committee. (5) The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request. (6) If the award is annulled the dispute shall, at the request of either party, be submitted to a new Tribunal constituted in accordance with Section 2 of this Chapter. Section 6 Recognition and Enforcement of the Award

Article 53 (1) The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention. (2) For the purposes of this Section, “award” shall include any decision interpreting, revising or annulling such award pursuant to Articles 50, 51 or 52. Article 54 (1) Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state. (2) A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General. Each Contracting State shall notify the Secretary-General of the designation of the competent court or other authority for this purpose and of any subsequent change in such designation.

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(3) Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought.

Article 55 Nothing in Article 54 shall be construed as derogating from the law in force in any Contracting State relating to immunity of that State or of any foreign State from execution.

CHAPTER V Replacement and Disqualification of Conciliators and Arbitrators

Article 56 (1) After a Commission or a Tribunal has been constituted and proceedings have begun, its composition shall remain unchanged; provided, however, that if a conciliator or an arbitrator should die, become incapacitated, or resign, the resulting vacancy shall be filled in accordance with the provisions of Section 2 of Chapter III or Section 2 of Chapter IV. (2) A member of a Commission or Tribunal shall continue to serve in that capacity notwithstanding that he shall have ceased to be a member of the Panel. (3) If a conciliator or arbitrator appointed by a party shall have resigned without the consent of the Commission or Tribunal of which he was a member, the Chairman shall appoint a person from the appropriate Panel to fill the resulting vacancy. Article 57 A party may propose to a Commission or Tribunal the disqualification of any of its members on account of any fact indicating a manifest lack of the qualities required by paragraph (1) of Article 14. A party to arbitration proceedings may, in addition, propose the disqualification of an arbitrator on the ground that he was ineligible for appointment to the Tribunal under Section 2 of Chapter IV. Article 58 The decision on any proposal to disqualify a conciliator or arbitrator shall be taken by the other members of the Commission or Tribunal as the case may be, provided that where those members are equally divided, or in the case of a proposal to disqualify a sole conciliator or arbitrator, or a majority of the conciliators or arbitrators, the Chairman shall take that decision. If it is decided that the proposal is well-founded the conciliator or arbitrator to whom the decision relates shall be replaced in accordance with the provisions of Section 2 of Chapter III or Section 2 of Chapter IV.

CHAPTER VI Cost of Proceedings

Article 59 The charges payable by the parties for the use of the facilities of the Centre shall be determined by the Secretary-General in accordance with the regulations adopted by the Administrative Council.

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Article 60 (1) Each Commission and each Tribunal shall determine the fees and expenses of its members within limits established from time to time by the Administrative Council and after consultation with the Secretary-General. (2) Nothing in paragraph (1) of this Article shall preclude the parties from agreeing in advance with the Commission or Tribunal concerned upon the fees and expenses of its members. Article 61 (1) In the case of conciliation proceedings the fees and expenses of members of the Commission as well as the charges for the use of the facilities of the Centre, shall be borne equally by the parties. Each party shall bear any other expenses it incurs in connection with the proceedings. (2) In the case of arbitration proceedings the Tribunal shall, except as the parties otherwise agree, assess the expenses incurred by the parties in connection with the proceedings, and shall decide how and by whom those expenses, the fees and expenses of the members of the Tribunal and the charges for the use of the facilities of the Centre shall be paid. Such decision shall form part of the award.

CHAPTER VII Place of Proceedings

Article 62 Conciliation and arbitration proceedings shall be held at the seat of the Centre except as hereinafter provided. Article 63 Conciliation and arbitration proceedings may be held, if the parties so agree, (a) at the seat of the Permanent Court of Arbitration or of any other appropriate institution, whether private or public, with which the Centre may make arrangements for that purpose; or (b) at any other place approved by the Commission or Tribunal after consultation with the Secretary-General.

CHAPTER VIII Disputes between Contracting States

Article 64 Any dispute arising between Contracting States concerning the interpretation or application of this Convention which is not settled by negotiation shall be referred to the International Court of Justice by the application of any party to such dispute, unless the States concerned agree to another method of settlement.

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CHAPTER IX Amendment

Article 65 Any Contracting State may propose amendment of this Convention. The text of a proposed amendment shall be communicated to the Secretary-General not less than 90 days prior to the meeting of the Administrative Council at which such amendment is to be considered and shall forthwith be transmitted by him to all the members of the Administrative Council. Article 66 (1) If the Administrative Council shall so decide by a majority of two-thirds of its members, the proposed amendment shall be circulated to all Contracting States for ratification, acceptance or approval. Each amendment shall enter into force 30 days after dispatch by the depositary of this Convention of a notification to Contracting States that all Contracting States have ratified, accepted or approved the amendment. (2) No amendment shall affect the rights and obligations under this Convention of any Contracting State or of any of its constituent subdivisions or agencies, or of any national of such State arising out of consent to the jurisdiction of the Centre given before the date of entry into force of the amendment.

CHAPTER X Final Provisions

Article 67 This Convention shall be open for signature on behalf of States members of the Bank. It shall also be open for signature on behalf of any other State which is a party to the Statute of the International Court of Justice and which the Administrative Council, by a vote of two-thirds of its members, shall have invited to sign the Convention. Article 68 (1) This Convention shall be subject to ratification, acceptance or approval by the signatory States in accordance with their respective constitutional procedures. (2) This Convention shall enter into force 30 days after the date of deposit of the twentieth instrument of ratification, acceptance or approval. It shall enter into force for each State which subsequently deposits its instrument of ratification, acceptance or approval 30 days after the date of such deposit. Article 69 Each Contracting State shall take such legislative or other measures as may be necessary for making the provisions of this Convention effective in its territories. Article 70 This Convention shall apply to all territories for whose international relations a Contracting State is responsible, except those which are excluded by such State by written

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notice to the depositary of this Convention either at the time of ratification, acceptance or approval or subsequently.

Article 71 Any Contracting State may denounce this Convention by written notice to the depositary of this Convention. The denunciation shall take effect six months after receipt of such notice. Article 72 Notice by a Contracting State pursuant to Articles 70 or 71 shall not affect the rights or obligations under this Convention of that State or of any of its constituent subdivisions or agencies or of any national of that State arising out of consent to the jurisdiction of the Centre given by one of them before such notice was received by the depositary. Article 73 Instruments of ratification, acceptance or approval of this Convention and of amendments thereto shall be deposited with the Bank which shall act as the depositary of this Convention. The depositary shall transmit certified copies of this Convention to States members of the Bank and to any other State invited to sign the Convention. Article 74 The depositary shall register this Convention with the Secretariat of the United Nations in accordance with Article 102 of the Charter of the United Nations and the Regulations thereunder adopted by the General Assembly. Article 75 The depositary shall notify all signatory States of the following: (a) signatures in accordance with Article 67; (b) deposits of instruments of ratification, acceptance and approval in accordance with Article 73; (c) the date on which this Convention enters into force in accordance with Article 68; (d) exclusions from territorial application pursuant to Article 70; (e) the date on which any amendment of this Convention enters into force in accordance with Article 66; and (f ) denunciations in accordance with Article 71. DONE at Washington, in the English, French and Spanish languages, all three texts being equally authentic, in a single copy which shall remain deposited in the archives of the International Bank for Reconstruction and Development, which has indicated by its signature below its agreement to fulfil the functions with which it is charged under this Convention.

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Preamble The Contracting States Considering the need for international cooperation for economic development, and the role of private international investment therein; Bearing in mind the possibility that from time to time disputes may arise in connection with such investment between Contracting States and nationals of other Contracting States; Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases; Attaching particular importance to the availability of facilities for international conciliation or arbitration to which Contracting States and nationals of other Contracting States may submit such disputes if they so desire; Desiring to establish such facilities under the auspices of the International Bank for Reconstruction and Development; Recognizing that mutual consent by the parties to submit such disputes to conciliation or to arbitration through such facilities constitutes a binding agreement which requires in particular that due consideration by given to any recommendation of conciliators, and that any arbitral award be complied with; and Declaring that no Contracting State shall by the mere fact of its ratification, acceptance or approval of this Convention and without its consent be deemed to be under any obligation to submit any particular dispute to conciliation or arbitration, Have agreed as follows: A. ‘The Contracting States . . . Have agreed as follows:’ The Convention’s preparation took place in the years 1961 to 1965.1 The drafting history is fully documented in a four-volume collection:2 s Vol. I: Analysis of Documents Concerning the Origin and the Formulation of the Convention (1970); s Vol. II (in two parts): Documents Concerning the Origin and the Formulation of the Convention (in English) (1968); 1 For descriptions of the Convention’s drafting history, see History, Vol I, 2–10; ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention’ (1993) 1 ICSID Reports 23, 24–25, paras 6–8; Aron Broches, ‘Development of International Law by the International Bank for Reconstruction and Development’ (1965) 59 ASIL Proceedings 33; Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 342–347; PF Sutherland, ‘The World Bank Convention on the Settlement of Investment Disputes’ (1979) 28 ICLQ 367, 374–378; Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 17–85. 2 All volumes were reprinted in 2001.

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schreuer’s commentary on the icsid convention s Vol. III: Documents Relatifs à l’Origine et à l’Elaboration de la Convention (in French) (1968); s Vol. IV: Documentos Relativos al Origen y a la Formulación del Convenio (in Spanish) (1969).

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In this Commentary reference to that collection is made as: History, Vol. number, and page. The initiative for the Convention came from the staff of the World Bank, notably its General Counsel, Mr. Aron Broches, who can be described as the ICSID Convention’s principal architect. On 28 August 1961, Mr. Broches sent a note to the World Bank’s Executive Directors setting out the basic idea for the Convention (History, Vol. II, pp. 1 ff.). The idea was taken up by the World Bank’s President in his address to the Bank’s Annual Meeting in Vienna on 19 September 1961 (ibid., p. 3). This was followed by Notes from the President and from Mr. Broches to the Executive Directors (ibid., pp. 4, 6). A meeting of the Executive Directors on 10 April 1962 led to a request for a more detailed proposal (ibid., p. 13). On 5 June 1962, Mr. Broches presented a Working Paper, the first draft to the Convention (History, Vol. II, p. 19). This draft was considered by the Executive Directors, meeting as a special Committee of the Whole on Settlement of Investment Disputes, from December 1962 to June 1963. Following these considerations, the staff of the Bank submitted an annotated First Preliminary Draft on 9 August 1963 (ibid., p. 133) and an annotated Preliminary Draft on 15 October 1963 (ibid., p. 184). In view of the highly technical nature of the questions involved, the next step was a series of regional consultative meetings of legal experts, which were chaired by Mr. Broches. These meetings took place in Addis Ababa (16–20 December 1963), in Santiago de Chile (3–7 February 1964), in Geneva (17–21 February 1964), and in Bangkok (27 April–1 May 1964). The basis for the deliberations at these meetings was the Preliminary Draft. The meetings were attended by legal experts from 86 countries. The debate was mainly on an article-by-article basis. No votes or formal decisions were taken. Rather, detailed summary records were prepared. These were submitted to the Executive Directors together with a detailed summary of collective conclusions prepared by Mr. Broches. The Executive Directors considered these documents in July and August 1964. On 6 August 1964, the Executive Directors submitted a Report to the World Bank’s Board of Governors concluding that it would be advisable for the Executive Directors to undertake the formulation of a convention on the settlement of investment disputes between States and nationals of other States (History, Vol. II, p. 606).3 The Board of Governors considered this Report at its Annual Meeting in Tokyo in September 1964. Despite some dissent from Latin American countries (also called the ‘No of Tokyo’; see Art. 68, para. 20), it adopted a Resolution on 10 September 1964 requesting the Executive Directors to formulate such a convention and to submit it directly to member governments (History, Vol. II, p. 608).4

3 (1964) 3 ILM 1172.

4 ibid 1171.

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Preamble

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In the meantime, the staff of the World Bank had prepared, in the light of the discussions at the regional consultative meetings, a new draft convention called the First Draft (History, Vol. II, p. 610). This draft formed the basis for deliberations in the Legal Committee on Settlement of Investment Disputes convened in Washington from 23 November to 11 December 1964. The Legal Committee consisted of government experts and acted as an advisory organ of the Executive Directors. Representatives of 61 governments participated in its work. The Legal Committee was chaired by Mr. Broches. It acted mostly through consensus. The Legal Committee used English, French, and Spanish. It adopted a decision to use British rather than American spelling for the English version (ibid., p. 749). The Legal Committee considered the draft convention on an article-by-article basis. Working groups considered certain specific issues. A Drafting Sub-Committee went over the text after consensus on substance had been reached. On 11 December 1964, the Legal Committee adopted the Revised Draft of the Convention (History, Vol. II, p. 911). The Executive Directors considered this draft in a series of meetings from 16 February to 4 March 1965. They made a number of changes. The most important of these concerned the issue of subrogation (see Art. 25, para. 751) and the standing of a foreign controlled company that is incorporated in the host State (see Art. 25, para. 1264). The Executive Directors also considered their draft report on the Convention. On 18 March 1965, the Executive Directors adopted a resolution approving the final text of the Convention (History, Vol. II, p. 1039). At the same time, they approved the Report of the Executive Directors on the Convention. The President of the World Bank was instructed to transmit the text of the Convention and the Report to all member governments of the Bank. The Report stated that the text of the Convention was submitted to member governments in order for them to consider signature and ratification. The Executive Directors also instructed the President and the General Counsel of the Bank to sign a copy of the Convention (see Final Clause, para. 1). This was designed to indicate the Bank’s agreement to fulfill the functions with which it is charged under the Convention, principally those of depositary. The Convention entered into force on 14 October 1966 in accordance with Art. 68(2) (see Art. 68, para. 18). As of 31 December 2020 the Convention had 155 Parties. A further eight States had signed, but not yet ratified the Convention (see Art. 68, para. 19).

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B. ‘Considering the need for international cooperation for economic development, and the role of private international investment therein;’ The Convention’s primary aim is the promotion of economic development. Economic development depends in large measure on private international investment. The Convention is designed to facilitate private international investment through the creation of a favorable investment climate.5 5 CF Amerasinghe, ‘The International Centre for Settlement of Investment Disputes and Development through the Multinational Corporation’ (1976) 9 Vand JTL 793, 794–795; Broches, ‘The Convention’ (n 1) 342–343; Phillipe Kahn, ‘The Law Applicable to Foreign Investments: The Contribution of the World Bank Convention on the Settlement of Investment Disputes’ (1968) 44 Indiana LJ 1, 1 ff; Ibrahim FI

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schreuer’s commentary on the icsid convention

The link between an orderly settlement of investment disputes, the stimulation of private international investments and economic development is explained in the Report of the Executive Directors on the Convention in the following terms: 9. In submitting the attached Convention to governments, the Executive Directors are prompted by the desire to strengthen the partnership between countries in the cause of economic development. The creation of an institution designed to facilitate the settlement of disputes between States and foreign investors can be a major step toward promoting an atmosphere of mutual confidence and thus stimulating a larger flow of private international capital into those countries which wish to attract it.

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12. . . . adherence to the Convention by a country would provide additional inducement and stimulate a larger flow of private international investment into its territories, which is the primary purpose of the Convention.6

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The Tribunal in Amco v Indonesia explained that ICSID arbitration is in the interest not only of investors, but also of host States. It concluded: Thus, the Convention is aimed to protect, to the same extent and with the same vigour the investor and the host State, not forgetting that to protect investments is to protect the general interest of development and of developing countries.7

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Several tribunals have quoted this passage of the Preamble in support of the conclusion that an ‘investment’ in the sense of Art. 25(1) would have to contribute to the host State’s economic development.8 The Tribunal in CSOB v Slovakia said: This language permits an inference that an international transaction which contributes to cooperation designed to promote the economic development of a Contracting State may be deemed to be an investment as that term is understood in the Convention.9

C. ‘Bearing in mind the possibility that from time to time disputes may arise in connection with such investment between Contracting States and nationals of other Contracting States;’ 15

The Convention does not attempt to develop substantive rules for the protection of private international investments (see Art. 42, para. 1). It contributes to the improvement of the investment climate by offering a procedural framework for the settlement of disputes. The substantive rules to be applied are left to the agreement of the parties. In the absence of such an agreement, Art. 42 provides that a tribunal will apply the law of the host State and applicable rules of international law.

6 7 8 9

Shihata, ‘Promotion of Foreign Direct Investment—A General Account, with Particular Reference to the Role of the World Bank Group’ (1991) 6 ICSID Rev 484 ff. (1993) 1 ICSID Reports 23, 25. Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 23. See also ibid, Award (20 November 1984) para 249. Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 28; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 66. See also Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 38. For more detail, see Art. 25, paras 258–269. CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 64.

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Preamble

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The disputes in question must arise in connection with an investment (see Art. 25, paras. 162–496). One party to the dispute must be a host State that has ratified the Convention (see Art. 25, paras. 497–522). The other party must be an investor who is a national of another State that has ratified the Convention (see Art. 25, paras. 572–615, 1111–1445). Certain disputes that do not meet all of these requirements may be settled by means of the Additional Facility created in 1978 (see Art. 6, paras. 25–27; Art. 25, paras. 12–19).

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D. ‘Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases;’ Under general principles of the conflict of laws, jurisdiction over disputes between a State and a foreign investor will normally be with the courts and tribunals of the host State. Subjection of such disputes to the local legal process increases the host State’s control over foreign investors. Therefore, capital importing States have traditionally favored this method of dispute settlement.10 From the investor’s perspective, the settlement of disputes through the host State’s court system is hardly attractive. Rightly or wrongly, the national courts of one of the disputing parties often are not perceived as sufficiently impartial. Even in the absence of overt prejudice, these courts may be subject to outside pressures. Moreover, the courts will usually be bound by the local law even if it is at odds with the host State’s international obligations. In addition, the regular courts will often lack the technical expertise required to resolve complex international investment disputes. An excessive case load of courts in many countries leading to long delays compounds the misgivings that many investors have about this form of settlement. The Report of the Executive Directors on the Convention addresses this issue in the following terms:

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10. The Executive Directors recognize that investment disputes are as a rule settled through administrative, judicial or arbitral procedures available under the laws of the country in which the investment concerned is made. However, experience shows that disputes may arise which the parties wish to settle by other methods; and investment agreements entered into in recent years show that both States and investors frequently consider that it is in their mutual interest to agree to resort to international methods of settlement.11

Domestic courts of countries other than the host State, notably those of the investor’s home State, are usually not a viable alternative. In most cases, they will lack territorial jurisdiction over investment operations taking place in another country. An agreement to submit to these courts, while theoretically possible, is usually unacceptable to the host State as a matter of principle. In addition, sovereign immunity will be a formidable

10 This preference found its expression in the Charter of Economic Rights and Duties of States, UNGA Res 3281(XXIX) (12 December 1974) Art. 2, para 2(c). 11 (1993) 1 ICSID Reports 23, 25.

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obstacle to suing the host State in the courts of another country, at any rate where acts of official authority are involved.12 A further serious limitation of dispute settlement through domestic legal processes is the absence of an effective system of international enforcement for court decisions. By contrast, arbitral awards in general, and ICSID awards in particular, enjoy a high degree of effectiveness at the enforcement stage (see Art. 54). Traditionally, private investors did not have access to international methods of dispute settlement. The International Court of Justice is open only to States in contentious proceedings. The classical method for the international settlement of investment disputes was diplomatic protection by the investor’s home State. But diplomatic protection has serious disadvantages. The investor must have exhausted all local remedies in the host State. The investor also depends entirely on its national government, which may be unwilling to pursue the claim for political reasons, or settle it without the investor’s consent (see Art. 27, paras. 1–4). The Convention does not eliminate access to the national legal process for investment disputes. It merely opens an option to the host State and to the investor to utilize international conciliation and arbitration. Once arbitration under the Convention has been agreed to, however, this choice operates to the exclusion of other remedies, notably domestic courts unless the parties agree otherwise (see Art. 26, paras. 54–63, 230–254). Yet, the exhaustion of local remedies is not a condition for arbitration under the Convention, unless this is specifically required by the host State (see Art. 26, paras. 297–364). E. ‘Attaching particular importance to the availability of facilities for international conciliation or arbitration to which Contracting States and nationals of other Contracting States may submit such disputes if they so desire;’

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The Convention provides for conciliation and arbitration on an equal footing. In actual practice, resort to conciliation has been modest (see Art. 28, para. 10). Arbitration is by far the more significant method of dispute settlement under the Convention. Arbitration agreements may be negotiated ad hoc between host States and foreign investors. Standard rules and procedures, such as those offered by the UNCITRAL Arbitration Rules,13 are useful in drafting such ad hoc agreements. The ICSID Convention goes one step further: it offers a system for dispute settlement that provides not only standard clauses for the granting of consent to arbitration and various procedural matters as well as rules of procedure, but also institutional support for the conduct of proceedings (see Art. 1, para. 4). It assures the non-frustration of proceedings and provides rules for the recognition and enforcement of awards (paras. 33, 34 infra).

12 For a description of unsuccessful proceedings in the domestic courts of the investor’s home State, see SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 20–25. 13 The UNCITRAL Arbitration Rules were initially adopted in 1976, and revised in 2010 and 2013. See David D Caron and Lee M Caplan, The UNCITRAL Arbitration Rules – A Commentary, 2nd edn (OUP 2013).

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Preamble

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The parties to an ICSID arbitration retain a large degree of autonomy. They may attach conditions and limitations to their consent to the Centre’s jurisdiction (see Art. 25, paras. 948–998). They have much latitude in shaping the composition of an arbitral tribunal (see Art. 37, paras. 28–47). They may choose the substantive rules of law to be applied by a tribunal (see Art. 42, paras. 43, 44). They may also shape the procedural rules to be applied in proceedings (see Art. 44, paras. 15–22). ICSID arbitration offers advantages to the investor as well as to the host State. Proceedings may be instituted by either side, but in the majority of cases the investor is in the position of the claimant. The Report of the Executive Directors on the Convention describes this balance of interests in the following terms:

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13. While the broad objective of the Convention is to encourage a larger flow of private international investment, the provisions of the Convention maintain a careful balance between the interests of investors and those of host States. Moreover, the Convention permits the institution of proceedings by host States as well as by investors and the Executive Directors have constantly had in mind that the provisions of the Convention should be equally adapted to the requirements of both cases.14

The advantage for the investor is obvious: he or she gains direct access to an effective international forum should a dispute arise. The possibility of going to arbitration is an important element of the legal security required for an investment decision. The advantage for the host State is twofold: by offering arbitration it improves its investment climate and becomes more attractive for international investments. In addition, by consenting to ICSID arbitration the host State protects itself from other forms of foreign or international litigation (Art. 26). Also, the host State effectively shields itself against diplomatic protection by the State of the investor’s nationality (Art. 27).15 Despite the large number of decisions by ICSID tribunals, the Convention’s success may go beyond the cases actually decided. A large number of cases submitted to ICSID arbitration are settled by agreement of the parties at some stage (see Art. 48, para. 106). It is safe to assume that the proceedings pending before ICSID are decisive in achieving these settlements. The system is likely to have effects even beyond its actual use. The availability of a remedy and information about the outcome of cases tend to affect the behavior of parties to potential disputes. It is likely to have a restraining influence on investors as well as on host States. Both sides will try to avoid actions that might involve them in arbitration that they are likely to lose. The prospect of litigation will strengthen the parties’ willingness to settle a dispute amicably. Thus, the preventive effect of the Convention may be just as important as its actual application.16 14 (1993) 1 ICSID Reports 23, 25. 15 Georges R Delaume, ‘ICSID Arbitration’ in Julian DM Lew (ed), Contemporary Problems in International Arbitration (Springer 1987) 23, 24; Ibrahim FI Shihata, ‘The Role of ICSID and the Projected Multilateral Investment Guarantee Agency (MIGA)’ (1986) 41 Außenwirtschaft 105, 110–111; but see Stephen J Toope, Mixed International Arbitration: Studies in Arbitration Between States and Private Persons (CUP 1990) 219 ff. 16 Aron Broches, ‘The Experience of the International Centre for Settlement of Investment Disputes’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West 1985) 75, 83; Delaume (n 15) 25; Pierre Lalive, ‘Some Threats to International

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F. ‘Desiring to establish such facilities under the auspices of the International Bank for Reconstruction and Development;’ 31

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The establishment of a system for the settlement of investment disputes under the auspices of an international lending institution may not appear obvious at first sight. The reason for the World Bank’s initiative (see para. 2 supra) can be found in the fact that the Bank is an international development agency.17 In fact, the World Bank’s Articles of Agreement list the promotion of private foreign investment among the Bank’s purposes.18 The Convention establishes the Centre (Art. 1) with close administrative ties to the World Bank. These ties were not undisputed during the Convention’s preparation but have since proven to be extremely useful (see Art. 2, paras. 4, 5). G. ‘Recognizing that mutual consent by the parties to submit such disputes to conciliation or to arbitration through such facilities constitutes a binding agreement which requires in particular that due consideration be given to any recommendation of conciliators, and that any arbitral award be complied with;’

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Consent by the parties to conciliation or arbitration under the Convention is binding. Once given, it may not be withdrawn unilaterally (see Art. 25, paras. 1057–1110). Recommendations of conciliators must be considered in good faith by the disputing parties (see Art. 34, paras. 18, 19). Awards are binding and enforceable (Arts. 53 and 54). The Convention effectively forestalls any attempt to deny the validity of the arbitration agreement unilaterally or to terminate it. Similarly, an award may not be repudiated based on the allegation of its nullity. The Convention’s provision on annulment (Art. 52) is the only avenue to review an award. The Convention provides a watertight system against the frustration of arbitration proceedings by a recalcitrant party. Arbitrators not appointed by the parties will be appointed by the Centre (Art. 38). The decision on whether there is jurisdiction in a particular case is with the tribunal (Art. 41). Non-cooperation of a party will not stall the proceedings (Art. 45). By contrast, conciliation proceedings depend on the participation of the parties (Art. 34(2)). H. ‘. . . and Declaring that no Contracting State shall by the mere fact of its ratification, acceptance or approval of this Convention and without its consent be deemed to be under any obligation to submit any particular dispute to conciliation or arbitration,’

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The Convention offers a regulatory and institutional framework for the settlement of disputes. But participation in the Convention does not, by itself, constitute a submission to the Centre’s jurisdiction. For jurisdiction to exist, the Convention requires separate consent in writing by both parties (see Art. 25, paras. 759–766).

Investment Arbitration’ (1986) 1 ICSID Rev 26; Jan Paulsson, ‘ICSID’s Achievements and Prospects’ (1991) 6 ICSID Rev 380, 384. 17 Broches, The Convention (n 1) 342. 18 See Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134, Art. I(ii).

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Preamble

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Consent to the Centre’s jurisdiction may be given in one of several ways. Consent may be contained in a direct agreement between the investor and the host State (see Art. 25, paras. 767–779). Alternatively, consent may be contained in a standing offer by the host State which may be accepted by the investor in appropriate form. Such a standing offer may be contained in the host State’s legislation (see Art. 25, paras. 780–824). A standing offer may also be contained in a treaty to which the host State and the investor’s State of nationality are parties (see Art. 25, paras. 825–877). In the first decades of its existence, ICSID was predominantly used for the settlement of contractbased investor–State disputes. Meanwhile, the vast majority of cases that have come before ICSID were not based on consent through direct agreement between the parties but on consent through a general offer by the host State which is later accepted by the investor most often simply through instituting proceedings.

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Article 1 (1) There is hereby established the International Centre for Settlement of Investment Disputes (hereinafter called the Centre). (2) The purpose of the Centre shall be to provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of this Convention.

OUTLINE 1. Establishment and Name of the Centre 2. Purpose and Activities of the Centre 1

Paragraphs 2 3–7

Art. 1 is part of the Convention’s Chapter I dealing with the organizational structure of the International Centre for Settlement of Investment Disputes (ICSID or the Centre). Subsequent Articles in Chapter I deal with the Centre’s seat, its organs, its financing and its status, immunities and privileges.

1. Establishment and Name of the Centre 2

During the Convention’s drafting, there was never any doubt that there would be a permanent administrative entity to facilitate the Convention’s application (History, Vol. I, pp. 22, 24). There was some debate about the name of this entity (History, Vol. II, pp. 55, 76, 97, 111, 247, 381, 677, 681). Earlier drafts foresaw ‘International Conciliation and Arbitration Center.’ This was changed into ‘International Center for the Settlement of Investment Disputes’ (History, Vol. I, pp. 22, 24; Vol. II, p. 750). Eventually, the word ‘the’ was removed from the name and the spelling ‘Centre’ was adopted (History, Vol. II, p. 943).

2. Purpose and Activities of the Centre 3

During the Convention’s drafting, it was repeatedly emphasized that the Centre’s purpose would be to facilitate conciliation and arbitration but that it would not undertake these activities itself. In other words, the Centre’s task would be administrative rather than judicial (History, Vol. II, pp. 103, 104–105, 109–111, 113, 121, 129, 241, 953).1 There were suggestions to add an advisory function to the purpose of the Centre (ibid., pp. 472–473, 541, 544, 656). The First Draft contained a reference to additional activities including research and the collection and dissemination of information in the field of international investment (History, Vol. I, p. 26). The issue of the additional

1 See also ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 26, para. 15.

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Article 1 – Establishment of the Centre

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activities led to extensive debate and even to the creation of a special working group. Eventually, it was decided to delete the reference to additional activities (History, Vol. II, pp. 660, 676–678, 681, 687–688, 691, 750, 934). This notwithstanding, the Centre’s activities in facilitating conciliation and arbitration of investment disputes are extensive. They include: s the adoption of detailed Rules and Regulations (Arts. 6(1)(a)–(c), 33, 44); s the drafting of model clauses for use in contracts between governments and

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investors (see Art. 25, paras. 772–774); s the keeping of a panel of conciliators and a panel of arbitrators (Arts. 12–16); s the screening and registration of requests for conciliation and requests for arbitration (Arts. 28, 36); s assistance in the constitution of conciliation commissions and arbitral tribunals (Arts. 30, 38); s provision of services and facilities for the conduct of proceedings (see Art. 11, paras. 10–13); s the administration of Additional Facility (AF) proceedings (see Art. 25, paras. 12–19); and s the administration of non-ICSID and non-AF proceedings (see Art. 11, paras. 20, 21). The Centre has also undertaken research and the collection and dissemination of information. These activities include the following publications:2 s List of Contracting States and Other Signatories of the Convention, Doc. ICSID/3 (periodic updates) (English, French and Spanish); s Contracting States and Measures Taken by Them for the Purpose of the Convention, Doc. ICSID/8 (periodic updates) (English); s Members of the Panels of Arbitrators and of Conciliators, Doc. ICSID/10 (periodic updates) (English); s ICSID Convention, Regulations and Rules, Doc. ICSID/15 (April 2006) (contains the texts of the Centre’s Regulations and Rules in effect from 10 April 2006 and the text of the ICSID Convention) (English, French and Spanish); s ICSID Additional Facility Rules, Doc. ICSID/11 (April 2006) (contains the texts of the Additional Facility Rules in effect from 10 April 2006) (English, French and Spanish); s List of Pending and Concluding Cases, ICSID/16 (internet edition only); s Memorandum on the Fees and Expenses of ICSID Arbitrators (6 July 2005) (English, French and Spanish); s ICSID Schedule of Fees (1 July 2020) (English, French and Spanish); s ICSID Annual Report (1967–2020) (English, French and Spanish); s ICSID Review—Foreign Investment Law Journal (1986–2013 two issues per year; since 2014 three issues per year); s Documents Concerning the Origin and Formulation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 2 ICSID, ‘Annual Report 2020’ (2020) 28–41.

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s s s s s s

(1967; 2001; 2006) (English, French and Spanish) (available online; hard copies are available for purchase from the Centre); Investment Laws of the World (ten loose-leaf volumes, periodic updates); Investment Treaties (thirteen loose-leaf volumes, periodic updates); The ICSID Caseload—Statistics (semi-annual updates) (English, French and Spanish) (internet only); Practice Notes for Respondents in ICSID Arbitration (10 December 2015) (English, French and Spanish); Bilateral Investment Treaties 1959–1996: Chronological Country Data and Bibliography (30 May 1997) (English); and Building International Investment Law—The First 50 Years of ICSID (M Kinnear and others, eds, Wolters Kluwer, 2016).

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Publications, respectively internet resources, with material on ICSID, but not published by ICSID, include: s ICSID Reports (CUP), eighteen volumes between 1993 and 2020; s italaw – Investment Treaty Arbitration ; s Investment Claims ; s Investor–State Law Guide ; and s Jus Mundi .

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The Centre’s Secretariat sponsors conferences. Its legal staff give occasional lectures and publish papers on subjects related to the Centre’s work.

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Article 2 The seat of the Centre shall be at the principal office of the International Bank for Reconstruction and Development (hereinafter called the Bank). The seat may be moved to another place by decision of the Administrative Council adopted by a majority of two-thirds of its members. The Working Paper to the Convention simply foresaw that the seat of the Centre should be at the World Bank’s headquarters (History, Vol. I, p. 26). This led to a debate on the desirability of some flexibility in moving the seat and on the best way in which this might be achieved. The possibility of a relocation upon a decision of the Administrative Council was the outcome of this debate (History, Vol. II, pp. 55, 100, 101–103, 113, 115, 118, 121, 122, 127, 248, 250, 297, 313–314, 381–382, 477–478, 544, 559–560, 583, 680–783, 750, 953). The idea to create regional centers was briefly discussed but not pursued (ibid., pp. 248, 379, 680, 683). The principal office of the International Bank for Reconstruction and Development (the World Bank, the Bank) and hence the seat of the Centre is in Washington, D.C. The address is: 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. No attempt to move the Centre’s seat to another city has ever been made. The seat of the Centre does not necessarily determine the place of conciliation and arbitration proceedings. The parties may, subject to certain limitations and procedures, decide on another place (Art. 63). They have frequently done so in practice. In the absence of other arrangements, proceedings will be held at the seat of the Centre (Art. 62). The legal ties between the Centre and the World Bank are much closer than the identity of their location. During the Convention’s drafting the relationship between the Centre and the World Bank was discussed extensively. Arguments in favor of a close association of the Centre with the Bank were administrative expediency and the Bank’s prestige and reputation. Arguments against a close link of the Centre to the Bank were the possibility of extra-legal influence on the parties by the Bank and a perceived conflict of interest between judicial activities and the Bank’s lending activities. These misgivings were countered by reference to the Centre’s purely administrative functions (History, Vol. II, pp. 67–68, 77, 90–94, 99–132, 248, 313, 382, 453, 456, 472, 476–478, 544–545, 559, 583–584). The most important legal ties between the Centre and the World Bank,1 apart from the location of their seats, are: s The President of the World Bank is ex officio the Chairman of ICSID’s Administrative Council (Art. 5). 1 See Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 295–296; Antonio R Parra, ICSID. An Introduction to the Convention and Centre (OUP 2020) 7–8.

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schreuer’s commentary on the icsid convention s The Governors of the World Bank are ex officio members of ICSID’s Administrative Council in the absence of a contrary designation by States parties to the Convention (Art. 4). s The World Bank provides ICSID with offices, services, facilities and limited budgetary support on the basis of a 1967 agreement between the two institutions (see Art. 6, para. 16).

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Article 3 The Centre shall have an Administrative Council and a Secretariat and shall maintain a Panel of Conciliators and a Panel of Arbitrators. The Centre’s basic administrative structure gave rise to relatively little discussion during the Convention’s drafting (History, Vol. I, pp. 28, 30; Vol. II, pp. 55–56, 76, 94, 107, 685, 690, 750, 954). The basic structure was modeled after that of the Permanent Court of Arbitration. The idea of creating a smaller Executive Committee, in addition to the Administrative Council, did not prevail (ibid., pp. 121, 481–482, 560–561, 685, 688–689, 716–718, 966). The Report of the Executive Directors on the Convention states that simplicity and economy consistent with the efficient discharge of its functions characterize the Centre’s structure.1 Details concerning the Administrative Council, the Secretariat, and the two Panels are contained in Arts. 4–8, 9–11, and 12–16.

1 See (1993) 1 ICSID Reports 23, 26, para. 18.

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Article 4 (1) The Administrative Council shall be composed of one representative of each Contracting State. An alternate may act as representative in case of his principal’s absence from a meeting or inability to act. (2) In the absence of a contrary designation, each governor and alternate governor of the Bank appointed by a Contracting State shall be ex officio its representative and its alternate respectively. 1

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The Administrative Council is the Centre’s plenary organ. Each State party to the Convention is represented in it. During the Convention’s drafting, the idea to limit the size of the Administrative Council did not prevail (History, Vol. II, p. 132). A suggestion to restrict membership of the Administrative Council to Member States of the World Bank also did not succeed (ibid., pp. 660, 685–686). The Convention’s text, as eventually adopted, makes it clear that alternate representatives will be entitled to participate and act only in cases where the principal representative is absent or unable to act (History, Vol. I, pp. 30, 32; Vol. II, pp. 132, 314, 685–686, 690, 713, 750). Art. 4(2) provides that, in principle, the Administrative Council is composed of the same persons as the World Bank’s Board of Governors. These are generally the ministers responsible for finance of the countries concerned. States parties to the Convention may make a different designation if they wish. During the Convention’s drafting, the simplicity and convenience of this arrangement were emphasized (History, Vol. II, pp. 94, 122, 127). The Administrative Council’s Annual Meeting could be held during the same period as the Bank’s Annual Meeting thereby saving costs (ibid., pp. 128, 249–250). The largely identical membership of the two bodies would also underline the close link between the Centre and the World Bank (ibid., pp. 100, 544). The provision was opposed by those who objected to this close link or found the Administrative Council in this composition too large (ibid., pp. 123, 132, 690). An element of flexibility was introduced by allowing non-Members of the World Bank to make ad hoc appointments (ibid., pp. 122, 123, 128) (see also Art. 67, para. 12), and by giving Members of the World Bank the possibility to appoint a person other than its governor and alternate governor (ibid., pp. 123, 128, 444, 713). The possibility of designating the World Bank’s Executive Directors, rather than its Governors, as members of ICSID’s Administrative Council was discussed but not pursued in view of the problems that would have arisen from the representation of several States by an Executive Director (ibid., pp. 94, 128, 393). In actual practice, the Administrative Council has nearly always been composed of those governors of the World Bank that represented parties to the Convention.

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Article 5 The President of the Bank shall be ex officio Chairman of the Administrative Council (hereinafter called the Chairman) but shall have no vote. During his absence or inability to act and during any vacancy in the office of President of the Bank, the person for the time being acting as President shall act as Chairman of the Administrative Council. The Working Paper, the earliest draft to the Convention, provided that the World Bank’s President would be the President of the Centre and Chairman of the Administrative Council. After some debate, this position was limited to Chairman of the Administrative Council (History, Vol. I, pp. 34, 36; Vol. II, pp. 55–56, 118–119, 122–123). There was some opposition to linking the two offices and suggestions were made to provide for the separate election of the Chairman (ibid., pp. 55–56, 315–316, 381, 482, 560, 691). But the majority of delegates supported the solution whereby the World Bank’s President would be ex officio Chairman of the Administrative Council (ibid., pp. 101, 127, 382, 560, 691). There was also some concern about the extent of powers that the Chairman would wield (ibid., pp. 111, 119, 122, 123, 248, 294, 316, 382). A debate on the Chairman’s right to vote led to the solution eventually adopted (History, Vol. I, pp. 34, 36; Vol. II, pp. 249, 250, 315, 383, 484, 691–692). Under this solution, the Chairman presides over the Administrative Council’s meetings, but does not participate in the voting. The provision in the second sentence on absence, inability, and vacancy, led to some debate in view of the fact that the World Bank’s Articles of Agreement do not contain a clear provision on an acting President (History, Vol. II, pp. 315–316, 480–482, 691).1 In actual practice, the President appoints an acting President on an ad hoc basis. Rather incongruously, Administrative and Financial Regulation 4(2) provides that, if the Chairman is unable to preside over a meeting of the Administrative Council, one of the members of the Council shall act as temporary presiding officer. The functions of the Chairman are much broader than a reading of Art. 5 would suggest (History, Vol. II, pp. 544–545, 584). Apart from presiding over meetings of the Administrative Council (Art. 7), the Chairman has the following powers: s to nominate the Secretary-General and Deputy Secretaries-General of ICSID for election by the Administrative Council (Art. 10(1)); s to designate up to ten persons each to the Panels of Conciliators and Arbitrators (Art. 13(2)); s to appoint conciliator(s) or arbitrator(s) in the case of failure by the parties to do so (Arts. 30, 38); s to appoint members of ad hoc committees (Art. 52(3)); 1 See Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134.

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schreuer’s commentary on the icsid convention s to appoint a conciliator or arbitrator in case of a resignation of a party-appointed conciliator or arbitrator without the consent of the commission or tribunal (Art. 56(3)); s to decide on a proposal to disqualify a conciliator or arbitrator under certain defined circumstances (Art. 58).

5

Under the Conciliation (Additional Facility) Rules the Chairman has the following functions: s to appoint conciliator(s) in the case of failure by the parties to do so (Arts. 6(4), 10, 17(2)(b)); s to decide on a proposal to disqualify a conciliator under certain defined circumstances (Art. 15); s to appoint a conciliator in case of a resignation of a party-appointed conciliator without the consent of the commission (Art. 17(2)(a)).

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Under the Arbitration (Additional Facility) Rules the Chairman has the following functions: s to appoint arbitrator(s) in the case of failure by the parties to do so (Arts. 6(4), 10, 17(2)(b)); s to decide on a proposal to disqualify an arbitrator under certain defined circumstances (Art. 15); s to appoint an arbitrator in case of a resignation of a party-appointed arbitrator without the consent of the tribunal (Art. 17(2)(a)).

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Article 6 (1) Without prejudice to the powers and functions vested in it by other provisions of this Convention, the Administrative Council shall (a) adopt the administrative and financial regulations of the Centre; (b) adopt the rules of procedure for the institution of conciliation and arbitration proceedings; (c) adopt the rules of procedure for conciliation and arbitration proceedings (hereinafter called the Conciliation Rules and the Arbitration Rules); (d) approve arrangements with the Bank for the use of the Bank’s administrative facilities and services; (e) determine the conditions of service of the Secretary-General and of any Deputy Secretary-General; (f ) adopt the annual budget of revenues and expenditures of the Centre; (g) approve the annual report on the operation of the Centre. The decisions referred to in sub-paragraphs (a), (b), (c) and (f ) above shall be adopted by a majority of two-thirds of the members of the Administrative Council. (2) The Administrative Council may appoint such committees as it considers necessary. (3) The Administrative Council shall also exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions of this Convention.

OUTLINE Paragraphs I. INTRODUCTION 1 II. INTERPRETATION 2–27 A. ‘(1) Without prejudice to the powers and functions vested in it by other provisions of this Convention, . . .’ 2 B. ‘. . . the Administrative Council shall . . .’ 3 C. ‘(a) adopt the administrative and financial regulations of the Centre;’ 4–6 D. ‘(b) adopt the rules of procedure for the institution of conciliation and arbitration proceedings;’ 7–9 E. ‘(c) adopt the rules of procedure for the institution of conciliation and arbitration proceedings (hereinafter called the Conciliation Rules and the Arbitration Rules;’ 10–13 F. ‘(d) approve arrangements with the Bank for the use of the Bank’s administrative facilities and services;’ 14–16 G. ‘(e) determine the conditions of service of the Secretary-General and of any Deputy Secretary-General;’ 17

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schreuer’s commentary on the icsid convention H. ‘(f) adopt the annual budget of revenues and expenditures of the Centre;’ I. ‘(g) approve the annual report on the operation of the Centre.’ J. ‘The decisions referred to in sub-paragraphs (a), (b), (c) and (f) above shall be adopted by a majority of two-thirds of the members of the Administrative Council.’ K. ‘(2) The Administrative Council may appoint such committees as it considers necessary.’ L. ‘(3) The Administrative Council shall also exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions of this Convention.’

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I. INTRODUCTION 1

Art. 6 deals with the powers and functions of the Administrative Council. It refers to three categories of such powers and functions: s powers and functions listed in Art. 6(1); s powers and functions under other provisions of the Convention; and s other powers and functions necessary for the Convention’s implementation (Art. 6(3)).

II. INTERPRETATION A. ‘(1) Without prejudice to the powers and functions vested in it by other provisions of this Convention, . . .’ 2

The powers and functions enumerated in Art. 6(1) are not exhaustive. Other provisions of the Convention contain additional functions of the Administrative Council: s moving the seat of the Centre (Art. 2); s election of the Secretary-General and any Deputy Secretaries-General (Art. 10(1)); s adoption of rules for the apportionment of the Centre’s expenditures (Art. 17); s decision on a proposal to amend the Convention (Art. 66(1)); s invitation to non-Members of the World Bank to sign the Convention (Art. 67); s appointment of committees (Art. 6(2)); s establishment of a simplified voting procedure (Art. 7(4)); and s other powers and functions necessary for the Convention’s implementation (Art. 6(3)). B. ‘. . . the Administrative Council shall . . .’

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During the early stages of the Convention’s drafting, there was a broad and unspecific reference to the powers of the Administrative Council. The Working Paper, the earliest draft of the Convention, still referred in general terms to the adoption of rules and regulations as may be necessary or useful (History, Vol. I, p. 38; Vol. II, pp. 64, 102, 109, 122). Subsequent drafts broke these powers down into specific categories.

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Article 6 – Functions of the Administrative Council

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C. ‘(a) adopt the administrative and financial regulations of the Centre;’ During the Convention’s drafting, it was uncontested that the Administrative Council would adopt administrative and financial regulations governing the internal functioning of the Centre. It was pointed out that this function included the power to amend these regulations (History, Vol. I, pp. 38, 40; Vol. II, pp. 249, 288, 356, 444). Provisional Administrative and Financial Regulations were adopted by the Administrative Council on 2 February 1967.1 They were replaced by Administrative and Financial Regulations adopted on 25 September 1967.2 These have been revised periodically.3 The current version has been in force since 10 April 2006. The Administrative and Financial Regulations deal with the procedures of the Administrative Council, the organization and functions of the Secretariat, financial provisions, certain provisions relating to individual proceedings, and immunities and privileges. They are not subject to modification or derogation by the parties to proceedings unless they provide for modification or derogation (see Art. 44, paras. 6, 47).

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D. ‘(b) adopt the rules of procedure for the institution of conciliation and arbitration proceedings;’ During the Convention’s drafting, there was some debate on whether the institution rules and the rules of procedure should be merged. It was pointed out that they dealt with different stages of the proceedings and that the institution rules, unlike the conciliation and arbitration rules, would not be subject to modification by the parties (History, Vol. I, pp. 38, 40; Vol. II, pp. 693–695). Provisional Institution Rules were adopted by the Administrative Council on 2 February 1967.4 They were replaced by the Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (Institution Rules) on 25 September 1967.5 These were revised on 26 September 19846 and on 1 January 2003.7 The Institution Rules are not subject to modification or derogation by the parties, unless they provide for modification or derogation (see Art. 44, paras. 6, 46). The Institution Rules deal with the contents and registration of a request for conciliation or arbitration. The Convention’s basic provisions on this procedure are Arts. 28 and 36. This Commentary deals with some of the details of the Institution Rules in the context of Art. 36 (see Art. 36, paras. 3, 10, 12, 19, 25–33, 39–44, 50, 62, 65).

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E. ‘(c) adopt the rules of procedure for conciliation and arbitration proceedings (hereinafter called the Conciliation Rules and the Arbitration Rules);’ During the Convention’s drafting, there was considerable debate on whether the Administrative Council should be given the power to adopt the rules of procedure for conciliation and arbitration. Some delegates felt that the rules of procedure should be

1 (1967) 6 ILM 225. 2 (1968) 7 ILM 351. 3 (1993) 1 ICSID Reports 35; Antonio R Parra, ‘Revised Regulations and Rules’ (1985) 2(1) News from ICSID 4. 4 (1967) 6 ILM 225, 241. 5 (1968) 7 ILM 351, 363; (1993) 1 ICSID Reports 51. 6 (1993) 1 ICSID Reports 153. 7 ICSID, ‘ICSID Convention, Regulations and Rules’ ICSID/15 (2006) 73.

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part of the Convention, while Mr. Broches emphasized the flexibility of separate rules that might be amended, if necessary (History, Vol. II, pp. 79, 288, 327–328, 382–383, 479–480, 515, 560, 572). There were also suggestions to have rules of procedure adopted not by the Administrative Council, but by the Panels of Conciliators and Arbitrators or by the commissions or tribunals (ibid., pp. 382, 480, 693–695). These suggestions were defeated in a vote (ibid., p. 695). Mr. Broches emphasized that the rules to be adopted would be optional in the sense that they are subject to modification or exclusion by the parties (History, Vol. II, pp. 76, 79, 107, 110, 249, 357, 383, 479, 481, 692, 693–694). This idea is reflected in Arts. 33 and 44, which provide that the respective rules apply ‘except as the parties otherwise agree’ (see Art. 44, paras. 14–36). It is clear that the rules of procedure merely supplement the Convention and that they may not be contrary to it (see Art. 44, paras. 37, 38). Provisional Conciliation Rules and Provisional Arbitration Rules were adopted by the Administrative Council on 2 February 1967.8 They were replaced by Conciliation Rules and Arbitration Rules on 25 September 1967.9 Revised Rules were adopted on 26 September 1984.10 Further revisions came into effect on 1 January 2003 and on 10 April 2006.11 In accordance with Arts. 33 and 44, the Rules in effect on the date of consent by the parties will apply, unless the parties agree otherwise (see Art. 44, paras. 39–42, 48–59). The Rules are described in this Commentary in the context of the Convention’s Articles to which they relate (see also Art. 44, paras. 43, 44). F. ‘(d) approve arrangements with the Bank for the use of the Bank’s administrative facilities and services;’

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An arrangement with the World Bank on the use of administrative facilities and services was foreseen in all drafts to the Convention (History, Vol. I, pp. 38, 40). The discussion of this technical aspect (History, Vol. II, pp. 55, 77, 103, 110, 115, 131, 313–314, 476–478, 679, 680, 681, 953) was closely linked to the broader question of the Centre’s relationship to the Bank (see Art. 2, para. 4). The Report of the Executive Directors on the Convention contains the following paragraph: 16. As sponsor of the establishment of the institution the Bank will provide the Centre with premises for its seat (Article 2) and, pursuant to arrangements between the two institutions, with other administrative facilities and services (Article 6(d)).12

16

On 13 February 1967, the two institutions entered into a Memorandum of Administrative Arrangements.13 Under this agreement, the World Bank was to bear the costs of the Centre’s staff as well as its entire administrative costs. Any income of the Centre from charges payable by parties to proceedings for the use of the facilities of the Centre under Art. 59 of the Convention was to be used towards reimbursing the Bank (see Art. 17, paras. 5–7). This agreement is still in force. However, with the large increases 8 9 10 11 13

(1967) 6 ILM 225, 246, 260. (1968) 7 ILM 351, 365, 376; (1993) 1 ICSID Reports 63, 119. (1993) 1 ICSID Reports 157, 181. See also Parra (n 3). ICSID (n 7) 81, 99. 12 (1993) 1 ICSID Reports 23, 26. See Memorandum of Administrative Arrangements agreed between the International Bank for Reconstruction and Development and the International Centre for Settlement of Investment Disputes (13 February 1967) in ICSID, ‘First Annual Report 1966/1967’ (1967) 15–16.

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in ICSID’s case load and changes in the Centre’s fee structure for its administration of cases, the extent of its financial dependence on the Bank has gradually been reduced. G. ‘(e) determine the conditions of service of the Secretary-General and of any Deputy Secretary-General;’ The determination of the conditions of service of the Secretary-General and of the Deputy Secretaries-General is part of the internal administrative tasks of the Administrative Council. This provision did not elicit any comment during the Convention’s drafting history (History, Vol. II, p. 696). The Administrative Council determines the conditions of service of the Secretary-General and of the Deputy Secretaries-General on the occasion of their election.

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H. ‘(f ) adopt the annual budget of revenues and expenditures of the Centre;’ During the Convention’s preparation, the discussion on the Administrative Council’s power to adopt the budget was uncontroversial. As a result of this discussion, the words ‘of revenues and expenditures’ were inserted (History, Vol. I, pp. 38, 40, 42; Vol. II, pp. 132, 696, 967–968, 975). The detailed rules for the budget are contained in Administrative and Financial Regulation 17. The Centre’s administrative budget includes provision for staff services, communications and information technology, office occupancy, equipment and supplies, travel and contractual services. Total administrative expenditures for the year ending 30 June 2020 amounted to USD 14,329,892.14

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I. ‘(g) approve the annual report on the operation of the Centre.’ The Centre’s Annual Report is prepared by the Centre’s Secretariat and approved by the Administrative Council. It contains information on the composition of the Secretariat, on the participation in the Convention, on disputes before the Centre, on the Panels of Conciliators and Arbitrators, on ICSID documents and publications, on conferences, on meetings and resolutions of the Administrative Council and on the Centre’s finances.

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J. ‘The decisions referred to in sub-paragraphs (a), (b), (c) and (f ) above shall be adopted by a majority of two-thirds of the members of the Administrative Council.’ A two-thirds majority of the Council’s membership is required for the adoption of the Administrative and Financial Regulations, the Institution Rules, the Conciliation Rules, and the Arbitration Rules. The adoption of the budget also requires a two-thirds majority. The more general question of voting by the Administrative Council is dealt with in Art. 7(2) (see Art. 7, paras. 6–8).

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K. ‘(2) The Administrative Council may appoint such committees as it considers necessary.’ Art. 6(2) is the outcome of the unsuccessful attempt to create a smaller Executive Committee in addition to the Administrative Council (see Art. 3, para. 1). A compromise solution was adopted that foresees the possibility to create committees

14 ICSID, ‘Annual Report 2020’ (2020) 47.

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at the Administrative Council’s discretion (History, Vol. II, pp. 731, 751, 966). In actual practice, this possibility has not been used. L. ‘(3) The Administrative Council shall also exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions of this Convention.’ 23

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The Working Paper, the earliest draft to the Convention, contained a broad residual clause providing for ‘other powers as may be necessary or useful for the operation of the Centre and the achievement of the purposes of the Convention’ (History, Vol. I, p. 44). After criticism about the open-ended nature of this formula, the words ‘or useful’ and ‘the achievement of the purposes’ were taken out (History, Vol. II, pp. 482, 659, 697–698, 716, 751, 1014). As eventually adopted, the Convention restricts the Administrative Council’s residual powers to functions that are necessary for the Convention’s implementation. Art. 6(3) does not relate to the powers vested in the Administrative Council by other Articles of the Convention. These are covered by the first phrase of Art. 6(1) (see para. 2 supra). The systematic context of Art. 6 makes it clear that the ‘other powers and . . . functions’ of Art. 6(3) are in addition to those covered explicitly by the Convention. In 1978, the Administrative Council adopted the Additional Facility.15 It authorizes the ICSID Secretariat to administer certain proceedings, which fall outside the scope of the Convention. The Additional Facility Rules cover proceedings which, by their own terms, are outside the Centre’s jurisdiction16 (see Art. 25, paras. 12–19). These Rules also specifically state that the Convention is not applicable to Additional Facility proceedings.17 In this Commentary reference is made to various aspects of the Additional Facility in the context of the Convention’s parallel provisions (see especially Art. 11, para. 15; Art. 25, paras. 12–19, 39–43, 116, 480–496, 513–518, 614–615, 763, 772, 797, 845–849, 864–877, 1093; Art. 26, paras. 29, 30, 140, 287, 288; Art. 36, paras. 7, 48; Art. 42, paras. 200, 358; Art. 43, para. 3; Art. 47, para. 9; Art. 52, para. 5; Art. 53, paras. 5–11; Art. 54, paras. 12–22; Art. 62, paras. 7–11). There is no doubt that the Additional Facility is ‘useful for . . . the achievement of the purposes of the Convention’ (see para. 23 supra). But that is not the text as eventually adopted. Since the Additional Facility operates outside the Convention, it is difficult to argue that it is ‘necessary for the implementation of the provisions of [the] Convention’18 (see Art. 66, para. 8).

15 (1993) 1 ICSID Reports 213–280. 16 Additional Facility Rules, Art. 2. 17 Additional Facility Rules, Art. 3. For detailed treatment of the Additional Facility, see Aron Broches, ‘The “Additional Facility” of the International Centre for Settlement of Investment Disputes (ICSID)’ (1979) 4 YB Comm Arb 373; Pierluigi Toriello, ‘The Additional Facility of the International Centre for Settlement of Investment Disputes’ (1978/1979) 4 Italian YBIL 59. 18 At one point, this led to questions about the propriety of the Administrative Council’s decision in adopting the Additional Facility. But the Additional Facility has long since been generally accepted as an integral part of the ICSID machinery. Toriello (n 17) 65 ff; Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 633.

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Article 7 (1) The Administrative Council shall hold an annual meeting and such other meetings as may be determined by the Council, or convened by the Chairman, or convened by the Secretary-General at the request of not less than five members of the Council. (2) Each member of the Administrative Council shall have one vote and, except as otherwise herein provided, all matters before the Council shall be decided by a majority of the votes cast. (3) A quorum for any meeting of the Administrative Council shall be a majority of its members. (4) The Administrative Council may establish, by a majority of two-thirds of its members, a procedure whereby the Chairman may seek a vote of the Council without convening a meeting of the Council. The vote shall be considered valid only if the majority of the members of the Council cast their votes within the time limit fixed by the said procedure.

OUTLINE 1. 2. 3. 4. 5.

Introduction Meetings Voting Quorum Simplified Voting Procedure

Paragraphs 1 2–5 6–8 9 10–12

1. Introduction Art. 7 contains a number of procedural rules governing the activities of the Administrative Council. They concern the Administrative Council’s meetings, voting, the quorum for meetings, and a simplified procedure for making decisions without a meeting. More detailed rules on these issues are contained in Administrative and Financial Regulations 1–7.

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2. Meetings The earlier drafts of the Convention specifically provided that the Administrative Council’s annual meeting would be held in conjunction with the annual meeting of the World Bank’s Board of Governors (History, Vol. I, p. 46). The idea was administrative expediency and economy since the members of the two bodies would be largely identical (see Art. 4, paras. 2–4) (History, Vol. II, pp. 77, 249–250, 251, 317, 477, 713). Eventually, this provision was taken out of the Convention’s text as superfluous (ibid., p. 713). Administrative and Financial Regulation 1(1) now contains a rule to this effect.

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All drafts foresaw additional meetings upon a decision of the Administrative Council or if called by the Chairman (History, Vol. I, pp. 46, 48). Suggestions that a certain number of the Council’s members should be able to request a meeting (History, Vol. II, pp. 316, 482) led to the provision under which the Secretary-General may convene a meeting at the request of at least five members. In actual practice, the meetings of the Administrative Council are always held in conjunction with the Annual Meeting of the World Bank’s Board of Governors. Only the Inaugural Meeting of the Administrative Council on 2 February 1967 was held separately. The Administrative and Financial Regulations provide details on the notice of meetings (Regulation 2), the agenda for meetings (Regulation 3), the presiding officer of meetings (Regulation 4), the secretary of the Administrative Council and records of the proceedings (Regulation 5).

3. Voting 6

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All drafts leading to the Convention provided for a formula of one vote per member of the Administrative Council. Weighted voting was not contemplated (History, Vol. I, pp. 48, 50; Vol. II, pp. 56, 111, 113, 115, 122, 127–128, 316, 752). The idea to form two voting groups, of capital importing and capital exporting countries respectively, and to require a majority in both groups for important issues, was not pursued (ibid., pp. 384, 560). There was considerable debate on which issues were important enough to require a two-thirds majority (ibid., pp. 250, 381, 383, 480, 572, 692–693, 696, 698, 714, 733, 934). Suggestions to require larger majorities or even unanimity did not succeed (ibid., pp. 382–383, 482). The basic rule is that decisions will be made by a simple majority of the votes cast unless the Convention provides otherwise.1 Administrative and Financial Regulation 7 provides additional detail on the voting procedure. The Convention requires that certain matters are to be decided by a two-thirds majority of the members of the Administrative Council. For decisions on these matters the threshold is higher in two respects: the majority is two-thirds rather than the simple majority of the residual rule of Art. 7(2). In addition, this majority is not calculated on the basis of the votes cast but on the basis of the Administrative Council’s entire membership. These matters are: s moving the seat of the Centre (Art. 2); s adoption of the Administrative and Financial Regulations (Art. 6(1)); s adoption of the Institution Rules (Art. 6(1)); s adoption of the Conciliation Rules and the Arbitration Rules (Art. 6(1)); s adoption of the annual budget (Art. 6(1)); s adoption of a simplified voting procedure (Art. 7(4)); s election of the Secretary-General and Deputy Secretary-General (Art. 10(1)); s decision on an amendment of the Convention (Art. 66(1)); s invitation to non-Members of the World Bank to sign the Convention (Art. 67). 1 See also ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 26, para 18.

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4. Quorum The requirement that more than half of the members of the Administrative Council must be present when the Council makes a decision was contained in all drafts leading to the Convention. It was never debated (History, Vol. I, p. 50; Vol. II, pp. 316, 752, 1014, 1033).

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5. Simplified Voting Procedure All drafts of the Convention foresaw the possibility of a vote by the Administrative Council without a meeting (History, Vol. I, p. 52). This seemed necessary in view of the difficulty of convening meetings in between annual meetings (History, Vol. II, p. 316).2 Suggestions to restrict this procedure to matters of minor importance did not prevail (ibid., pp. 482–483, 662, 712). The idea to deem proposals accepted if they were not rejected by a majority also did not succeed (ibid., pp. 662, 712, 722). It was decided that the simplified decision procedure would be subject to a time limit during which votes must be cast (ibid., pp. 662, 712, 714, 752, 1014, 1033). Mr. Broches explained that the majority referred to in the provision’s text only related to the necessary participation in the voting or ‘quorum’ (ibid., pp. 686, 712–713). The actual decision may be subject to a simple majority or to a two-thirds majority (see paras. 7, 8 supra). The procedure, envisaged in Art. 7(4), was established through Administrative and Financial Regulation 7(3). Votes must normally be cast within 21 days. If the replies received during this period do not include a majority of the members, the motion is lost. A similar procedure is provided for in Administrative and Financial Regulation 7(4): if at a meeting of the Administrative Council a necessary majority of two-thirds of the members is not reached, and some States parties are not represented, the votes of the absent members may be solicited afterwards.

2 The charters of the other World Bank Group institutions contain similar provisions. See Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134, Art. V, s 2(e); Articles of Agreement of the International Finance Corporation (adopted 25 May 1955, entered into force 20 July 1956) 264 UNTS 117, Art. IV, s 2(g); Articles of Agreement of the International Development Association (adopted 26 January 1960, entered into force 24 September 1960) 439 UNTS 249, Art. VI, s 2(g); Convention Establishing the Multilateral Investment Guarantee Agency (adopted 11 October 1985, entered into force 12 April 1988) 1508 UNTS 99, Art. 40(c).

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Article 8 Members of the Administrative Council and the Chairman shall serve without remuneration from the Centre. 1

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In accordance with Art. 4(2), the members of the Administrative Council are normally the governors of the World Bank. As such they are in the service of their respective governments. In accordance with Art. 5, the Chairman is the President of the World Bank. Neither the members of the Administrative Council nor the Chairman are entitled to an additional remuneration from the Centre. During the Convention’s drafting, this provision was not cast into doubt (History, Vol. I, p. 54).1 At the same time it was made clear that this would not affect the reimbursement of actual expenses of the members of the Administrative Council and of the Chairman incurred in the course of service for the Centre (History, Vol. II, pp. 251, 319, 389, 481, 482, 491, 715–716). Art. 24(2) provides for tax privileges in respect of any expense allowances paid by the Centre to the Chairman or to members of the Administrative Council.

1 See also ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 26, para 18.

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Article 9 The Secretariat shall consist of a Secretary-General, one or more Deputy Secretaries-General and staff. Art. 9 remained unchanged in all drafts of the Convention (History, Vol. I, p. 56). There was never any doubt that the Centre would have a chief administrative officer (History, Vol. II, pp. 56, 101). The creation of Deputy Secretaries-General led to some debate. There was a fear that the provision, as drafted, might lead to a proliferation of high officials. It was pointed out that this position should be filled only if warranted by the Centre’s volume of business, possibly on a part-time basis (ibid., pp. 117, 127, 384–385, 718). There was some discussion about the appointment of several Deputy Secretaries-General on a regional basis (ibid., pp. 252, 718). A suggestion to limit the number of Deputy Secretaries-General in the text of the Convention did not prevail, but in a vote it was decided to recommend language for the Report of the Executive Directors to the effect that at that time no more than one Deputy Secretary-General was foreseen (ibid., pp. 718–719, 954, 968). The Report of the Executive Directors on the Convention says in this respect:

1

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18. . . . The Secretariat will consist of a Secretary-General, one or more Deputy Secretaries-General and staff. In the interest of flexibility the Convention provides for the possibility of there being more than one Deputy Secretary-General, but the Executive Directors do not now foresee a need for more than one or two full time high officials of the Centre.1

The following persons have served or are serving in the capacity of Secretary-General of ICSID: s Aron Broches, 1967–1980; s Heribert Golsong, 1980–1983; s Ibrahim F. I. Shihata, 1983–2000; s Ko-Yung Tung, 2000–2003; s Roberto Danino, 2003–2006; s Ana Palacio, 2006–2008; and s Meg Kinnear, since 2009 (re-elected in 2014 and 2020).

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Until 2008, the General Counsel of the World Bank had been elected SecretaryGeneral of ICSID. In 2009, Meg Kinnear was elected as the first full-time SecretaryGeneral.2 No Deputy Secretary-General was elected until 1999, when Antonio R. Parra was elected to this office. He retired in September 2005. Nassib G. Ziadé served as Deputy

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1 (1993) 1 ICSID Reports 23, 26. 2 Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 90–91, 114–115, 186–187, 215–220, 270–272.

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Secretary-General from 2007 to 2011. Gonzalo Flores and Martina Polasek were elected Deputy Secretaries-General in 2016. Including the Secretary-General and Deputies, the Secretariat consists of sixty-four legal and non-legal staff members.3 Administrative and Financial Regulation 13 provides that the Secretary-General, the Deputy Secretaries-General and the Secretariat’s staff may not serve on the Panel of Conciliators, on the Panel of Arbitrators, or as members of any commission or tribunal.

3 Numbers as of 30 June 2020; see ICSID, ‘Annual Report 2020’ (2020) 6–9.

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Article 10 (1) The Secretary-General and any Deputy Secretary-General shall be elected by the Administrative Council by a majority of two-thirds of its members upon the nomination of the Chairman for a term of service not exceeding six years and shall be eligible for re-election. After consulting the members of the Administrative Council, the Chairman shall propose one or more candidates for each such office. (2) The offices of Secretary-General and Deputy Secretary-General shall be incompatible with the exercise of any political function. Neither the SecretaryGeneral nor any Deputy Secretary-General may hold any other employment or engage in any other occupation except with the approval of the Administrative Council. (3) During the Secretary-General’s absence or inability to act, and during any vacancy of the office of Secretary-General, the Deputy Secretary-General shall act as Secretary-General. If there shall be more than one Deputy Secretary-General, the Administrative Council shall determine in advance the order in which they shall act as Secretary-General.

OUTLINE 1. Election 2. Incompatibility of Office 3. Acting Secretary-General

Paragraphs 1–3 4–6 7–9

1. Election All drafts leading to the Convention provided for the appointment of the Secretary-General and any Deputy Secretaries-General by the Administrative Council upon nomination by the Chairman (History, Vol. I, pp. 56, 58; Vol. II, pp. 56, 77, 101, 108, 118, 477, 545, 752, 954, 1014). There was some opposition against the Chairman’s power to nominate candidates, based on the concern that this power would affect the Secretary-General’s independence or unduly restrict the Administrative Council’s freedom of action (ibid., pp. 127, 130–131, 248, 252, 317, 481, 484–485, 561, 720). There was also some debate on whether the Chairman should be required to nominate several candidates (ibid., pp. 318, 485, 561, 656, 719–721). A discussion on the period of service led to the insertion of a maximum period of six years with the possibility of reelection (ibid., pp. 318, 561, 722, 726, 967, 968–969, 975, 1027). Suggestions to state the candidates’ required qualifications and grounds for a possible dismissal are not reflected in the Convention (ibid., pp. 318, 483–484, 561, 969). The idea to involve governments in the nominating process led to the clause on prior consultation of the members of the Administrative Council (ibid., pp. 719–721, 935). Transition arrangements dealing with the problem that the first Secretary-General would only be elected

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by the representatives of few States were relegated to the Report of the Executive Directors on the Convention (ibid., pp. 969, 1024–1027, 1075). Administrative and Financial Regulation 8 provides that the Chairman may propose one or more candidates for the offices of Secretary-General and Deputy SecretaryGeneral. In doing so, he or she should also make proposals with respect to the length of the term of service, any approval for any of the candidates to engage, if elected, in another occupation (see para. 6 infra) and the conditions of service. In practice, the Chairman has always proposed candidates who were duly elected. At the Inaugural Meeting of the Administrative Council, the Secretary-General was elected for a period of twenty months only. At subsequent elections, the term of service has not always been fixed at six years.1 The consultation of the members of Administrative Council consists of a letter informing them of the candidate and inviting comment.

2. Incompatibility of Office 4

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The early drafts of the Convention provided for the incompatibility of the office of Secretary-General or Deputy Secretary-General with the exercise of any political function and with any employment except by the World Bank or the Permanent Court of Arbitration. A waiver by the Administrative Council was to be possible with the Chairman’s concurrence (History, Vol. I, p. 60). This led to an extensive discussion on whether the concurrent employment of the Secretary-General by the Bank should be allowed. One group, including Mr. Broches, expressed the view that this would be a practical and economical solution, at least for an initial transition period (History, Vol. II, pp. 101, 112, 113, 115, 127, 317, 384, 472, 478, 483–484, 544, 561, 725). Another group was strongly opposed to such a solution. This opposition was based on doubts whether simultaneous employment by the Bank would leave the SecretaryGeneral with the necessary freedom and on the belief that the position of SecretaryGeneral should be full time (ibid., pp. 117–118, 122, 127, 130–131, 251–252, 297, 317, 384, 472, 583, 561). The possibility of simultaneous employment by the Permanent Court of Arbitration attracted less attention (ibid., pp. 113–114, 116, 297, 384, 483, 561). Eventually, the reference to both institutions was removed from the text (ibid., pp. 752, 954, 1026). The possibility of an approval by the Administrative Council of another employment or occupation was retained, but the need for the Chairman’s concurrence in this decision was removed (ibid., pp. 253, 317, 318, 483, 561). The incompatibility with the exercise of a political function was contained in all drafts. The earlier drafts subjected this incompatibility to a possible waiver by the Administrative Council with the concurrence of the Chairman. After brief discussion, the clause dealing with a political function was severed from the sentence dealing with employment or occupation which is subject to waiver (History, Vol. I, pp. 60, 62; Vol. II, pp. 483, 725–726). As a consequence, the incompatibility of the offices of Secretary-General and Deputy Secretary-General with the exercise of any political function is absolute. Administrative and Financial Regulation 8(b) provides that the Chairman, in making a proposal to the Administrative Council of candidates for the office of

1 See ‘New Secretary-General of ICSID’ (2000) 17(2) News from ICSID 1.

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Secretary-General or Deputy Secretary-General, shall also make any proposals with respect to the approval of any other employment or occupation. Until 2008, SecretariesGeneral of ICSID simultaneously held the office of General Counsel of the World Bank (see Art. 9, para. 4). The Deputy Secretaries-General are senior legal officers of the Centre.

3. Acting Secretary-General All drafts leading to the Convention provided that a Deputy Secretary-General would act in place of the Secretary-General in case of the latter’s absence or inability to act or in case of a vacancy of the office. If there is more than one Deputy Secretary-General, the earlier drafts foresaw a determination by the Secretary-General in what order these would act. After some brief discussion, it was decided that this order should be determined in advance by the Administrative Council (History, Vol. I, pp. 62, 64; Vol. II, pp. 252–253, 317, 318, 385, 484, 719, 723, 752). Under Administrative and Financial Regulation 9(1), the Chairman shall propose to the Administrative Council the order in which Deputy Secretaries-General are to act. In the absence of a decision by the Administrative Council, the order is that of seniority in the post. When two Deputy Secretaries-General were elected in 2016 (see Art. 9, para. 5), the Administrative Council did not determine the order in which the Deputy Secretaries-General shall act as Secretary-General. Administrative and Financial Regulation 9(2) provides for the designation of senior members of the staff of the Centre to act in case of vacancy, absence, or inability to act of the Secretary-General and any Deputy Secretaries-General.

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Article 11 The Secretary-General shall be the legal representative and the principal officer of the Centre and shall be responsible for its administration, including the appointment of staff, in accordance with the provisions of this Convention and the rules adopted by the Administrative Council. He shall perform the function of registrar and shall have the power to authenticate arbitral awards rendered pursuant to this Convention, and to certify copies thereof.

OUTLINE 1. 2. 3. 4. 5. 6. 7. 8. 9.

Introduction Representation and Administration of the Centre Keeping of Records Registrar in Proceedings Administrative Support in Proceedings Public Information The Additional Facility Appointing Authority for Non-ICSID Arbitration Administering Institution for Non-ICSID Proceedings

Paragraphs 1–2 3–6 7–8 9 10–13 14 15 16–19 20–21

BIBLIOGRAPHY Parra, Antonio R., ‘The Role of the ICSID Secretariat in the Administration of Arbitration Proceedings under the ICSID Convention’ (1998) 13 ICSID Review 85 Parra, Antonio R., The History of ICSID (2nd edn, OUP 2017) 114–117, 186–187, 217–220, 270–272

1. Introduction 1

During the Convention’s drafting, there was relatively little general discussion of the Secretary-General’s overall powers and functions. All drafts refer to his administrative role and his power to appoint staff (History, Vol. I, pp. 64, 66). His role was described as administrative and advisory rather than judicial (History, Vol. II, pp. 107, 108, 249, 312, 484, 678). His various functions are scattered throughout the Convention and were rarely discussed in concentrated form (ibid., pp. 545, 584). An explicit reference to his power to represent the Centre was added after a short debate (ibid., pp. 697, 724, 753). The Report of the Executive Directors states that the Convention requires the Secretary-General to perform a variety of administrative functions as legal representative, registrar, and principal officer of the Centre.1 1 (1993) 1 ICSID Reports 23, 27, para 20.

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The text of Art. 11 mentions some of the Secretary-General’s powers. But it does not exhaust the full range of his or her functions. These functions are regulated in the Convention, in the Administrative and Financial Regulations (AFR), in the Institution Rules (IR), in the Conciliation Rules (CR), and in the Arbitration Rules (AR). These functions may be conveniently described in terms of representation and administration of the Centre, the keeping of records, the function of registrar in proceedings, administrative support in proceedings and public information. In addition, the SecretaryGeneral performs certain functions under the Additional Facility and as appointing authority in, or administration of, non-ICSID arbitration.

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2. Representation and Administration of the Centre The Secretary-General represents the Centre in its external relations. He or she signs agreements on the Centre’s behalf. Examples for such agreements are the Memorandum of Administrative Arrangements with the World Bank of 1967 (see Art. 6, para. 16) and the arrangements with a number of institutions to provide facilities for proceedings in accordance with Art. 63(a) (see Art. 63, paras. 18–20). The Secretary-General exercises certain functions with regard to the other organs of the Centre. He or she may convene the Administrative Council under the unusual circumstances of Art. 7(1) (see Art. 7, para. 3). He or she will also communicate the text of a proposed amendment of the Convention to the members of the Administrative Council in accordance with Art. 65 (see Art. 65, para. 3). In addition, the SecretaryGeneral advises the Chairman in the exercise of his or her power to designate persons to the Panels of Conciliators and Arbitrators under Art. 13(2), to appoint conciliators, arbitrators, and members of ad hoc committees under Arts. 30, 38, 52(3) and 56(3), and to decide on the disqualification of conciliators and arbitrators under Art. 58. The Secretary-General is responsible for the Centre’s internal administration. He or she appoints staff members (AFR 10) and coordinates their conditions of employment with the World Bank (AFR 11). He or she directs the Centre’s staff and has the authority to dismiss staff members and to impose disciplinary measures (AFR 12). The Secretary-General is responsible for the preparation and submission to the Administrative Council of the Centre’s budget. She is also responsible for the budget’s execution (AFR 17). In addition, she has to calculate any assessment on the States party to the Convention (Art. 17; AFR 18). He or she arranges for an audit of the Centre’s accounts on the basis of which a financial statement is submitted to the Administrative Council (AFR 19).

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3. Keeping of Records The Secretary-General keeps a list of Contracting States containing information on the dates of their signature, the dates of ratification, the dates of the Convention’s entry into force for each State, and the dates of notices of denunciation (Arts. 67, 68, 71, 73; AFR 20). In connection with this list, the Secretary-General also keeps lists containing the following information for each Contracting State: s exclusion of territories under Art. 70; s designations of constituent subdivisions or agencies under Art. 25(1) and (3); s notification concerning classes of disputes considered suitable or unsuitable for submission to the Centre under Art. 25(4);

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schreuer’s commentary on the icsid convention s designations of courts or other authorities competent for the recognition and enforcement of awards under Art. 54(2); and s legislative and other measures relating to the Convention under Art. 69.

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These lists are regularly updated and published on ICSID’s webpage. In addition, the Secretary-General maintains and administers the following lists, registers, and archives: s lists of members of the Panels of Conciliators and Arbitrators (Art. 16(3); AFR 21); s registers for requests for arbitration and conciliation containing all significant procedural developments (Arts. 28, 36; AFR 23); and s archives containing the original texts of requests, of all instruments and documents in connection with any proceeding and of any reports, awards, or decisions by a commission, tribunal or ad hoc committee (AFR 28).

4. Registrar in Proceedings 9

The function of registrar is specifically mentioned in Art. 11. It involves a number of activities. Most of these include a duty to notify the parties and the commission or tribunal as the case may be. They are: s receiving and registering requests for conciliation and arbitration subject to prior screening (Arts. 28, 36; IR 1, 5, 6, 7, 8); s authentication of awards, certification of copies and dispatch to the parties (Art. 49(1); AR 48); s receiving and registering requests for the supplementation and rectification, interpretation, revision, and annulment of awards (Arts. 49(2), 50, 51, 52; AR 49, 50, 51, 52); and s receiving and registering requests for the resubmission of a dispute after annulment (Art. 52(6); AR 55).

5. Administrative Support in Proceedings 10

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The Secretary-General and the staff of the Secretariat provide administrative support in conciliation and arbitration proceedings. This support includes provision of a venue for proceedings whether at the Centre or elsewhere (Arts. 62, 63; AFR 26; CR 13; AR 13). The Secretary-General appoints a Secretary for each commission, tribunal, or ad hoc committee (AFR 25). He or she also provides other assistance such as translations, interpretations and duplication (AFR 27). In a particular proceeding, the Secretary of the tribunal makes the necessary arrangements for hearings, keeps minutes of hearings, and prepares drafts of procedural orders. The Secretary-General is the official channel of communication between the parties, commissions, tribunals, ad hoc committees, and the Chairman (AFR 24). The Conciliation Rules and Arbitration Rules contain numerous provisions to the effect that notifications be transmitted by or through the Secretary-General (see e.g. AR 1–6, 8–11, 18, 30, 33, 41, 49–52, 54, 55). In a particular proceeding, the Secretary of the commission or tribunal serves as the channel of communication between the parties and the conciliators or arbitrators. With respect to the cost of proceedings, the Secretary-General determines the charges payable to the Centre and consults with the commission or tribunal on fees and expenses

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(Arts. 59, 60; AR 28). He or she determines the fees of conciliators, arbitrators, and members of ad hoc committees with the Chairman’s approval. He or she receives advance payments from the parties and makes the payments necessary for the conduct of proceedings (AFR 14). He or she determines and receives the fees for lodging requests and the charges for specific services (AFR 15, 16). In a particular proceeding, the Secretary of the tribunal administers this system on behalf of the Secretary-General. The Secretary-General may request a pre-hearing conference (AR 21). He or she has certain powers of decision on the discontinuance of proceedings (AR 43, 44, 45; AFR 14). He or she must be consulted by the commission or tribunal on sessions (CR 13, AR 13), on a procedural language that is not an official language of the Centre (CR 21, AR 22), on copies of instruments (AR 23), and on the holding of proceedings away from the Centre at a place where the Centre has not made previous arrangements (Art. 63(b); CR 13, AR 13).

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6. Public Information The publication of information about the Centre’s operations is part of the Secretary-General’s duties (AFR 22). This duty is subject to the provisions of Art. 48(5), CR 33(3) and AR 48(4). In actual fact, the Secretariat engages in the publication of relevant material and the dissemination of information in a variety of ways (see Art. 1, para. 5).

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7. The Additional Facility The Secretary-General performs a number of functions under the Additional Facility (see Art. 6, para. 25; Art. 25, paras. 12–19). The Additional Facility Rules and the Schedules attached thereto regulate these functions in some detail. Most of these functions are analogous to those performed in respect of proceedings under the Convention (see paras. 9–13 supra). An important additional function is the approval of any agreement providing for conciliation or arbitration proceedings under the Additional Facility in accordance with Art. 4 of the Additional Facility Rules.

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8. Appointing Authority for Non-ICSID Arbitration Parties to existing or potential disputes that fall neither under the ICSID Convention nor the Additional Facility, may seek the assistance of the Secretary-General in constituting arbitral tribunals. They may designate him or her as appointing authority for some or all arbitrators under certain circumstances. This may be done, for instance, in agreements providing for arbitration under the UNCITRAL Arbitration Rules.2 Some investment treaties (see Art. 25, paras. 825–877) designate the Secretary-General as appointing authority for arbitrations that are outside the Convention and the Additional Facility and are governed mostly by the UNCITRAL Arbitration Rules. The Secretary-General is under no obligation to accept such a designation, but has often done so in fact. It is advisable to seek his or her advance consent, preferably before the agreement containing the designation is concluded. In seeking his or her consent, the

2 UNCITRAL Arbitration Rules (2013) Art. 6.

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parties should submit the provision in draft form. The relevant provision should clearly refer to the Secretary-General and not just to ICSID. The circumstances under which he or she is to exercise this function should be clearly spelt out. Examples would be a party’s failure to appoint an arbitrator or the inability of the parties or of the party-appointed arbitrators to agree on a third arbitrator within a stated period of time. In practice, the arrangements under which the Secretary-General is requested to perform this function are international, involving at least one State or State entity. They typically concern transactions in the economic or financial fields.3 It is clear that the designation of the Secretary-General as appointing authority will not make the Convention or the rules and regulations adopted under it applicable to the dispute. Neither will the Centre’s administrative facilities be available in these proceedings. The 1993 Model Clauses (see Art. 25, para. 772) contain the following formula that may be used by parties for this purpose, or adapted as needed: Clause 22 Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. The appointing authority shall be the Secretary-General of the International Centre for Settlement of Investment Disputes. [The number of arbitrators shall be [one]/[three]. The place of arbitration shall be name of town or country. The language[s] to be used in the arbitral proceedings shall be name of language(s).]4

9. Administering Institution for Non-ICSID Proceedings 20

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The ICSID Secretariat offers administrative support and facilities also for proceedings under non-ICSID rules. This extends even to State-to-State cases. ICSID provides administrative support to investor–State arbitrations under the UNCITRAL Arbitration Rules. In addition, ICSID assists with the organization of arbitration hearings in arbitration proceedings conducted under the auspices of the ICC, LCIA, PCA, SCC, and other institutions.5 In Fiscal Year 2020, ICSID administered sixteen investor–State UNCITRAL arbitrations and five other non-ICSID cases.6

3 For examples, see ‘ICSID as Designating Authority for Non-ICSID Arbitration’ (1984) 1(1) News from ICSID 3, 3–4 and (1984) 1(2) News from ICSID 13; ‘ICSID Secretary-General as Designating Authority for Non-ICSID Arbitration’ (1987) 4(2) News from ICSID 8; Investment Incentive Agreement between the Government of the United States of America and the Government of the State of Bahrain (signed and entered into force 25 April 1987) (1987) 2 ICSID Rev 531, 533; ICSID, ‘1992 Annual Report’ (1992) 4. 4 (1997) 4 ICSID Reports 370. 5 ICSID, ‘The ICSID Caseload – Statistics, Issue 2021–1’ (2021) 9 accessed 10 January 2021. 6 ibid 10.

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Article 12 The Panel of Conciliators and the Panel of Arbitrators shall each consist of qualified persons, designated as hereinafter provided, who are willing to serve thereon. Art. 3 of the Convention states that the Centre shall maintain a Panel of Conciliators and a Panel of Arbitrators. Section 4 of the Convention’s Chapter I is headed ‘The Panels.’ It consists of Arts. 12–16 and deals with the designation of Panel members, their qualities, their periods of service, the relationship of the two Panels to each other, and notification requirements. The drafts leading to the Convention all contained provisions substantively similar to what eventually became Art. 12 (History, Vol. I, pp. 66, 68). The idea was based on Art. 44 of the Hague Convention for the Pacific Settlement of International Disputes of 1907 establishing the Permanent Court of Arbitration1 (History, Vol. II, p. 145). Arts. 12–16 of the Convention bear some resemblance to that provision.2 During the Convention’s drafting, the creation of Panels of Conciliators and Arbitrators was never cast into doubt (History, Vol. II, pp. 107, 110, 143, 145, 486–487, 753). But there were extensive debates on the Chairman’s right to designate members of Panels 1 (1908) 2 AJIL Supp 43, 60. 2 For other systems offering panels of arbitrators, see eg Art. 5 of the Commercial Arbitration and Mediation Center for the Americas (CAMCA) Arbitration Rules, (1996) 35 ILM 1541, 1551. See also Art. 1124(4) of the North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, 644 (foreseeing a roster of presiding arbitrators). Ch 31 of the United States–Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020) sets out procedures for the resolution of most disputes arising under the USMCA. If a dispute is not resolved through consultations between the disputing parties, they can resort to a neutral panel for its determination. The disputing parties form a separate five-member panel for each dispute, although they may agree to a three-member panel. Art. 31.8(1) of the USMCA requires the Contracting Parties to establish a general roster of up to thirty panelists, with each Party designating up to ten individuals. The Parties will try to achieve consensus on the appointments. Individuals on the roster are appointed for a minimum term of three years and will remain on the list until the Parties form a new roster. Panelists are normally selected from the roster. For each dispute, roster members under consideration to serve as a panelist will have to complete a disclosure form used by the Parties to identify possible conflicts of interest. The disclosure form requests information regarding financial interests and affiliations, including information regarding the identity of any clients the roster member may have, and, if applicable, clients of the roster member’s firm. To qualify for inclusion on the general dispute settlement roster, an applicant must: (i) have expertise or experience in law, international trade, other matters covered by USMCA or the resolution of disputes arising under international trade agreements; (ii) be objective, reliable and possess sound judgment; (iii) be independent of, and not be affiliated with or take instructions from, a Party; (iv) comply with a code of conduct established by the Parties (ibid Art. 31.8(2)). In the ‘investment court system’ proposed under the European Union–Canada Comprehensive Economic and Trade Agreement (CETA) (signed 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23, the Contracting Parties designate in advance the possible ‘Members of the Tribunal.’ See Art. 8.27(2) of CETA: ‘The CETA Joint Committee shall, upon the entry into force of this Agreement, appoint fifteen Members of the Tribunal. Five of the Members of the Tribunal shall be nationals of a Member State of the European Union, five shall be nationals of Canada and five shall be nationals of third countries.’

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(see Art. 13, para. 5), the number of persons to be designated (see Art. 13, paras. 1, 5), the qualifications of Panel members (see Art. 14, paras. 5–10, 17–19), the periods of service on the Panels (see Art. 15, paras. 2, 3, 5, 6), and some modalities of appointment (see Art. 16, paras. 2, 3, 5). The Report of the Executive Directors on the Convention summarizes the relevant provisions as follows: The Panels 21. Article 3 requires the Centre to maintain a Panel of Conciliators and a Panel of Arbitrators, while Articles 12–16 outline the manner and terms of designation of Panel members. In particular, Article 14(1) seeks to ensure that Panel members will possess a high degree of competence and be capable of exercising independent judgment. In keeping with the essentially flexible character of the proceedings, the Convention permits the parties to appoint conciliators and arbitrators from outside the Panels but requires (Articles 31(2) and 40(2)) that such appointees possess the qualities stated in Article 14(1). The Chairman, when called upon to appoint a conciliator or arbitrator pursuant to Article 30 or 38, is restricted in his choice to Panel members.3

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The Panels are lists of persons who may act as conciliators or arbitrators. These lists are designed to help the parties to proceedings to find appropriate conciliators and arbitrators. In selecting conciliators and arbitrators, the parties are not restricted to the Panels. Arts. 31 and 40 give the parties the freedom to appoint conciliators and arbitrators from outside the Panels, provided these persons have the qualities required of Panel members by Art. 14. But under Arts. 31(1) and 40(1), the Chairman, when making appointments pursuant to Arts. 30 and 38, is restricted to the Panels. The same restriction applies to appointments by the Chairman under Art. 56(3) and Conciliation and Arbitration Rules 11(2). Similarly, under Art. 52(3), the Chairman, when making appointments to an ad hoc committee, is restricted to the Panel of Arbitrators, which includes up to ten persons designated by the Chairman under Art. 13(2). The power to designate up to ten persons to each Panel under Art. 13(2) provides the Chairman with a larger roster of suitable candidates to choose from. Art. 12 provides that Panel members must be qualified and willing to serve. Qualifications are dealt with in Art. 14.4 Under Administrative and Financial Regulation 21(3) (see Art. 16, para. 4), the Secretary-General requests a confirmation of the designee’s willingness to serve. Willingness should not be restricted to serving on the Panel, but should extend, in principle, to being appointed as conciliator or arbitrator. In a number of cases, Panel members have refused appointments. The official functions of Panel members sometimes do not permit them to find the time to serve on a commission or tribunal.5

3 (1993) 1 ICSID Reports 23, 27. 4 A number of cases refer to the qualifications that ICSID tribunal members are required to possess under Art. 14. See, for instance, EDF v Argentina, Decision on Annulment (5 February 2016) para 107; Total v Argentina, Decision on Disqualification (26 August 2015) para 88. 5 Aron Broches, ‘The Experience of the International Centre for Settlement of Investment Disputes’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West Pub 1985) 75, 93; Patrick J O’Keefe, ‘The International Centre for Settlement of Investment Disputes’ (1980) 34 YB World Aff 286, 295.

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The wording of Art. 12 provides for two separate Panels. In view of the considerable overlap in membership (see Art. 16, para. 2), the Centre keeps a consolidated list of members of both Panels. Membership in the Panel of Conciliators, the Panel of Arbitrators, or both is indicated with each name. The list of members of the Panels of Conciliators and of Arbitrators is published by the Centre in periodically updated form. The database of ICSID Panels of Conciliators and of Arbitrators is accessible through the Centre’s website.6 Information regarding arbitrators, conciliators and ad hoc committee members, including the ICSID cases in which they have been appointed and the procedural status of the relevant proceedings, can also be found through a name search on the Centre’s website. The Centre’s Annual Reports list new designations for the period covered. Membership in a Panel does not entail any remuneration, unless and until the person is actually appointed to a conciliation commission or an arbitral tribunal (see Art. 60, paras. 7–12).

6 See ICSID, ‘Database of ICSID Panels’ (2019) accessed 10 January 2021.

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Article 13 (1) Each Contracting State may designate to each Panel four persons who may but need not be its nationals. (2) The Chairman may designate ten persons to each Panel. The persons so designated to a Panel shall each have a different nationality.

OUTLINE 1. Designation by Contracting States 2. Designation by the Chairman 3. Nationality of Panel Members

Paragraphs 1–4 5–7 8–12

1. Designation by Contracting States 1

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All drafts leading to the Convention provided for the designation of Panel members by States parties to the Convention (History, Vol. I, pp. 68, 70; Vol. II, pp. 143, 753). Other more complicated models, such as the election of Panel members, were not pursued (History, Vol. II, pp. 145, 386). A discussion about the number of persons to be designated resulted in a compromise of four per State (ibid., pp. 253, 318, 387, 561, 727). Designations are to be notified to the Secretary-General. The exact details of the designation process are set out in Administrative and Financial Regulation 21 (see Art. 16, para. 4). The wording of Art. 13(1) indicates that the designation of Panel members is a right, rather than a duty. But a workable Panel depends on States exercising this right.1 The Secretariat reminds States party to the Convention of this right before a designation falls due and at periodic intervals thereafter, if no designation has been made. As of 31 December 2020, around 700 individuals were designated to the Panels. But not all the Contracting States have exhausted all four slots for each Panel.2 In addition, the

1 See Ibrahim FI Shihata and Antonio R Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 309 ff. Pursuant to Art. 71, a Contracting State’s withdrawal from the Convention takes effect six months after the Bank’s receipt of the notice of denunciation. From that date onwards, the State in question will no longer have the right to nominate individuals to the Panels of conciliators and arbitrators under Art. 13. See Fábrica de Vidrios v Venezuela, Award (13 November 2017) para 267. However, Panel members designated by a State that has denounced the Convention remain on the Panel even after denunciation by the designating State. 2 See ICSID, ‘Members of the Panels of Conciliators and of Arbitrators’ ICSID/10 (21 December 2020). ICSID actively encourages Member States to designate their full quotas of arbitrators and conciliators and provides some guidance in this respect. See ICSID, ‘Qualifications for the Panels’ (2020) accessed 10 January 2021. The designations to the panels by the Chairman of the Administrative Council are for six years and will expire on 16 September 2023. Designations to the panels are made by States on an ongoing basis.

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terms on the Panels of more than 200 designees have expired, some many years ago. Many designees serve on both Panels (see Art. 16, para. 2). Contracting States are free to choose their designees to the Panels as they see fit and the process of selection of candidates for the ICSID Panels remains rather opaque in many countries. However, a growing number of States are adopting more accessible, transparent and public procedures. For instance, in France, Germany and the United Kingdom, nominations are made on the basis of a public selection process.3 Moreover, several States, like Germany, have adopted rules that aim at ensuring diversity, mostly with regard to gender, but also age, in selecting designees for panels, committees and the like, which is also applied to making designations to ICSID Panels.4

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2. Designation by the Chairman The Chairman’s (Art. 5) right to designate Panel members was contained in all drafts to the Convention (History, Vol. I, pp. 70, 72), but led to considerable debate. Opinions were divided as to whether this right was useful or should be removed (History, Vol. II, pp. 113, 253, 315, 316, 319, 382, 385–388, 560, 562, 662). There were also different opinions as to how many Panel members the Chairman should be allowed to designate (ibid., pp. 143–145, 253, 318, 385, 489, 562). Eventually, it was decided in two votes to leave the Chairman’s power to designate Panel members intact and to fix the number of potential designees at ten (ibid., p. 727). The Chairman exercises his or her right to designate persons to the Panels on the advice of the Secretary-General. The Chairman’s right to add names to the Panels has turned out to be extremely valuable, in order to add eminent persons to the Panels who have not been designated by States, but also to meet the specific requirements of a particular proceeding (see Art. 40, para. 11). The Chairman, in making appointments to commissions, tribunals and ad hoc committees, is usually restricted to Panel members (see Art. 12, para. 4). Initially, the Chairman used his power to designate persons to the Panels sparingly.5 However, in recent years the Chairman has designated the full supplement of ten conciliators and ten arbitrators for the Panels of Conciliators and Arbitrators.6 Once designated, Panel members will serve for six years. In the past, the Chairman refrained from filling all ten slots in order not to be deprived of the possibility to make a designation that might be necessary for a particular proceeding. However, as a growing number of Contracting States have gradually made more panel designations, due in great part to ICSID’s promotional efforts, the Chairman was also encouraged to fill all 3 In particular, the United Kingdom’s Department for International Trade invited expressions of interest for UK designates by highlighting that ‘[a]pplicants of all backgrounds are encouraged to apply and are particularly welcome from under-represented groups.’ See ‘Appointments to ICSID Panels: Call for Expressions of Interest’ (19 March 2020) accessed 10 January 2021. 4 See Gesetz über die Mitwirkung des Bundes an der Besetzung von Gremien (Bundesgremienbesetzungsgesetz) (‘Act on the Participation of the Federation in the Appointment to Bodies’) (24 April 2015) BGBl I, 642 accessed 10 January 2021. 5 For a review of the nominations policy during the first years of ICSID, see Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 117–118. 6 See ICSID, ‘New Chairman’s Designations to the ICSID Panels’ (News Release, 17 September 2017) accessed 10 January 2021.

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ten positions on his list. Art. 15(3) gives the Chairman additional flexibility. Since a Panel member continues in office until a successor has been designated, the Chairman may replace a Panel member whose term of office has expired at any time.

3. Nationality of Panel Members 8

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All drafts leading to the Convention left it open to States to designate nationals or non-nationals (History, Vol. I, pp. 68, 70; Vol. II, pp. 387, 487–488). Mr. Broches explained that ‘some countries might not be able at the outset to find sufficiently eminent people willing to serve on the Panels and should be allowed to draw on nationals of other States with which they had some affinity’ (History, Vol. II, p. 970). A suggestion to exclude nationals of non-member States of the World Bank did not succeed (ibid., pp. 484, 486, 654, 726). In actual practice, the vast majority of Panel members are nationals of the States designating them. If non-nationals are designated, the designee’s nationality is indicated in the list of Members of Panels (see Art. 12, para. 6). The designation by States of their own nationals to the Panel of Arbitrators is not designed to lead to the appointment of national arbitrators to particular tribunals. Art. 39 and the relevant Arbitration Rules make the appointment of nationals or co-nationals of the parties as arbitrators unlikely (see Art. 39, paras. 13–24). The appointment of nationals or co-nationals of parties as members of an ad hoc committee is absolutely impermissible under Art. 52(3) (see Art. 52, para. 582). The Convention’s Chapter on Conciliation does not contain a parallel provision (see Art. 29, paras. 4, 5; Art. 39, para. 5). There are no restrictions on the appointment of nationals and co-nationals of parties as members of a conciliation commission. The requirement that persons designated to a Panel by the Chairman shall each have a different nationality was not contained in the early drafts to the Convention (History, Vol. I, pp. 70, 72; Vol. II, p. 562). It is linked to Art. 14(2) which requires the Chairman to assure the representation of the principal legal systems of the world in making designations (see Art. 14, paras. 17–20). The term ‘nationals’ in Art. 13 is restricted to natural persons. By contrast, in Art. 25(2) the term ‘national’ extends to natural as well as to juridical persons.

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Article 14 (1) Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators. (2) The Chairman, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of assuring representation on the Panels of the principal legal systems of the world and of the main forms of economic activity.

OUTLINE Paragraphs I. INTRODUCTION 1–4 II. INTERPRETATION 5–20 A. ‘(1) Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators.’ 5–16 1. High Moral Character 5–6 2. Recognized Competence in the Fields of Law, Commerce, Industry, or Finance 7 3. Ability to Exercise Independent Judgment 8–10 4. Implementation of Article 14 in Respect of Concrete Dispute Settlement Proceedings 11–16 B. ‘(2) The Chairman, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of assuring representation on the Panels of the principal legal systems of the world and of the main forms of economic activity.’ 17–20

BIBLIOGRAPHY Crawford, James, ‘Challenges to Arbitrators in ICSID Arbitration’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2016) 596 Giorgetti, Chiara and others, ‘Independence and Impartiality of Adjudicators in Investment Dispute Settlement: Assessing Challenges and Reform Options’ (2020) 21 The Journal of World Investment & Trade 441

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Grimmer, Sarah, ‘The Determination of Arbitrator Challenges by the Secretary-General of the Permanent Court of Arbitration’ in Chiara Giorgetti (ed), Challenges and Recusals of Judges and Arbitrators in International Courts and Tribunals (Brill 2015) 80 Guillaume, Gilbert, ‘Some Thoughts on the Independence of International Judges vis-à-vis States’ (2003) 2 The Law & Practice of International Courts and Tribunals 163 Kinnear, Meg, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1(1) ABA Section of International Law International Arbitration Committee Newsletter 35 Kinnear, Meg and Nitschke, Frauke, ‘Disqualification of Arbitrators under the ICSID Convention and Rules’ in Chiara Giorgetti (ed), Challenges and Recusals of Judges and Arbitrators in International Courts and Tribunals (Brill 2015) 34 Lalonde, Marc, ‘Quo Vadis Disqualification?’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Wolters Kluwer 2015) 645 Malintoppi, Loretta, ‘Independence, Impartiality and Duty of Disclosure of Arbitrators’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 789 Olbourne, Ben, ‘Independence and Impartiality: International Standards for National Judges and Courts’ (2003) 2 The Law & Practice of International Courts and Tribunals 97 Shelton, Dinah, ‘Legal Norms to Promote the Independence and Accountability of International Tribunals’ (2003) 2 The Law & Practice of International Courts and Tribunals 27 Sheppard, Audley, ‘Arbitrator Independence in ICSID Arbitration’ in Christina Binder and others (eds), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer (OUP 2009) 131 Veeder, Van Vechten, ‘L’indépendance et l’impartialité de l’arbitre dans l’arbitrage international’ in Loïc Cadiet, Thomas Clay and Emmanuel Jeuland (eds), Médiation et arbitrage (Litec 2005) 219

I. INTRODUCTION 1

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Art. 14 deals with the qualities of Panel members. The first paragraph lists the qualities all designees must possess, i.e., they must be persons of high moral character, who have recognized competence in the fields of law, commerce, industry, or finance, and who may be relied upon to exercise independent judgment. The second paragraph of Art. 14 states additional requirements with respect to Panel members designated by the Chairman (Art. 5). Under Administrative and Financial Regulation 21(2), each designation made by a contracting State or the Chairman must include the designee’s name, contact information, nationality, and qualifications, with particular reference to competence in the fields of law, commerce, industry, or finance. The designation of individuals to the Panels is not subject to any challenge or scrutiny in light of the requirements of Art. 14(1). Therefore, designations are within the discretion of the States concerned (History, Vol. II, p. 728).1 Once a State has identified 1 Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 638 (stating that ‘Article 14 sets standards for Panel members but leaves their application to the discretion of designating Contracting States. The designation of a person to a Panel cannot be challenged on the ground that the person does not meet the requested standards’ – italics in the original).

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the persons it wishes to designate, it advises the Secretary-General of the names of the persons and provides copies of their curricula vitae. A sample of the letter to be provided by a State for designations to the Panels is available on the ICSID website.2 There have been complaints that not all members of the Panels had the necessary qualifications or were actually available for appointments.3 The situation is different when it comes to an actual appointment to a conciliation commission or arbitral tribunal (History, Vol. II, p. 970). Under Art. 57, a member of a commission or of a tribunal may be challenged and disqualified in case of a manifest lack of the qualities required by Art. 14(1) (see Art. 57, paras. 30–101). Under Arts. 31(2) and 40(2), conciliators and arbitrators appointed from outside the Panels must also possess the qualities stated in Art. 14(1) (see Art. 40, paras. 14–16) and may be challenged under the same conditions. In actual practice, to date, most disqualifications proposals have concerned arbitrators and have been based on the third quality under Art. 14(1), i.e., the lack of reliability to exercise independent judgment.

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II. INTERPRETATION A. ‘(1) Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators.’

1. High Moral Character The Working Paper and the Preliminary Draft to the Convention referred to high moral character and recognized competence in the fields of law, commerce, industry, or finance as required qualities. Before making designations, States were to seek advice from appropriate institutions in their countries (History, Vol. I, pp. 72, 74). The obligation to seek advice was dropped after a brief discussion (History, Vol. II, pp. 144, 385–386, 486–487, 562). The requirement of high moral character led to a number of questions. Mr. Broches explained that the phrase had been taken from the Statute of the International Court of Justice (ICJ Statute)4 (ibid., pp. 144, 728–789, 753, 969, 970). A lack of high moral character could theoretically form the basis of a disqualification proposal in actual arbitration or conciliation proceedings. In general, however, as with the parallel norm in Art. 2 of the ICJ Statute, the requirement of a high moral character will be of little practice relevance.5 So far, ICSID practice only provides one example 2 See ICSID, ‘Panel Designation Procedure’ accessed 10 January 2021. 3 George R Delaume, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 820–821; Jan Paulsson, ‘ICSID’s Achievements and Prospects’ (1991) 6 ICSID Rev 380, 394; Patrick J O’Keefe, ‘The International Centre for Settlement of Investment Disputes’ (1980) 34 YB World Aff 286, 295; ICSID, ‘Twelfth Annual Report 1977/1978’ (1978) 4. 4 See Statute of the International Court of Justice (adopted 26 June 1945, entered into force 24 October 1945) USTS 993 (ICJ Statute) Art. 2. 5 See Mariano J Aznar and Eleni Methymaki, ‘Article 2’ in Andreas Zimmermann and others (eds), The Statute of the International Court of Justice: A Commentary (3rd edn, OUP 2019) para 17 (noting that the

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of a case where a party has raised this matter or made proposals that arbitrators or conciliators be disqualified on this basis.6

2. Recognized Competence in the Fields of Law, Commerce, Industry, or Finance 7

There was also some debate during the drafting of the Convention about the competence and qualifications of Panel members. Suggestions to spell these out in more detail or to introduce a screening process did not succeed (ibid., pp. 253, 254, 318, 385, 386, 485, 487, 489, 562, 727, 728, 753). The legal qualifications of persons on the Panel of Arbitrators received special attention. As a result, a second sentence was added to Art. 14(1) emphasizing ‘particular importance’ of legal competence for persons designated to serve on the Panel of Arbitrators (History, Vol. I, p. 74; Vol. II, pp. 489, 729–730, 753, 935). This provision does not make non-lawyers ineligible as members of the Panel of Arbitrators or of an arbitral tribunal. But the absence of qualified lawyers on a tribunal will make it more difficult to draft an award in accordance with Art. 48 and may increase the risk of annulment under Art. 52(1).7 There are no known cases where parties to ICSID proceedings have raised a lack of an arbitrator’s or conciliator’s competences mentioned in Art. 14(1).

3. Ability to Exercise Independent Judgment 8

The earlier drafts of the Convention did not address the independence or impartiality of conciliators or arbitrators. The debates that led to the insertion of the words concerning the ability ‘to exercise independent judgment’ show that the delegates were actually concerned with the impartiality of members of individual conciliation commissions or arbitral tribunals and not so much with the qualities of Panel members in general (History, Vol. I, p. 74; Vol. II, pp. 56, 386–388, 485).8 Therefore, it is clear that every Panel member should possess the general capability to exercise independent judgment. But the issue of independence and impartiality, typically, arises in relation

expression ‘high moral character’ comes from the 1899 and 1907 Hague Conventions (Arts. 23 and 44, respectively) and was seen as having ‘little value’ and being ‘only subjectively determinable’; and providing some examples pertaining to questions of ‘morality’). 6 In Landesbank Baden-Wurttemberg and others v Spain, the respondent State sought to have all three members of the Tribunal disqualified inter alia on the ground that, by refusing to hold an in-person hearing during the COVID-19 pandemic and having virtual hearings instead, the Tribunal demonstrated a lack of high moral character. In rejecting the challenge, the Chairman of the Administrative Council held that, in his view, ‘[g]iven the extraordinary circumstances and the multiple uncertainties created by the COVID-19 pandemic, the Tribunal’s decision to conduct a risk assessment certainly does not show a lack of high moral character. Rather, in the eyes of an objective third party, it would appear to be the Tribunal’s duty to do so.’ See Landesbank Baden-Württemberg and others v Spain, Decision on Disqualification (15 December 2020) para 137. 7 Broches (n 1) 638. 8 ibid (stating that ‘[t]he requirement that Panel members can be relied on to exercise independent judgment relates both to their freedom from instructions from the parties appointing them and to impartiality. The legislative history of Art. 14(1) shows that while addressing the qualifications of Panel members on these points, the participants were in reality concerned with the qualifications of members of Conciliation Commissions and Arbitral Tribunals’).

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to a particular party or dispute.9 A person who is perfectly capable of exercising independent judgment in general will still be ineligible if there is a conflict of interests in a particular case. Therefore, the issue of independence and impartiality is prominent in the appointment of conciliators and arbitrators to particular commissions or tribunals and in decisions relating to challenges.10 ICSID practice consistently recognizes that the term ‘independent judgment’ encompasses both the notions of ‘independence’ and ‘impartiality’ as separate and necessary requirements for arbitrators. Independence is usually defined as the ‘absence of external control,’ while impartiality ‘refers to the absence of bias or predisposition towards a party.’ A number of ICSID tribunals have held that both independence and impartiality ‘protect parties against arbitrators being influenced by factors other than those related to the merits of the case.’11 The ICSID Convention is not alone in demanding the independence and impartiality of adjudicators. Instead, independence and impartiality of adjudicators are essential elements of any adjudicatory mechanism that is based on the principle of the rule of law, whether at the domestic or international level.12 The ICSID Convention therefore follows the same principles concerning the independence of its adjudicators that are also enshrined in the statutes of other international courts and tribunals, such as Art. 2 of the ICJ Statute. ICSID tribunals as well as the Chairman of the Administrative Council often recall the versions of Art. 14 in English, French and Spanish and note that, in spite of slight linguistic differences, the texts are equally authentic and should be construed as equivalent. In particular, the English version of Art. 14 of the Convention refers to ‘independent judgment,’ while the Spanish version refers to ‘imparcialidad de

9 See Frédéric Eisemann, ‘La double sanction prévue par la Convention de la BIRD en cas de collusion ou d’ententes similaires entre un arbitre et la partie qui l’a désigné’ (1977) 23 AFDI 436, 442 ff. 10 See Vivendi v Argentina, Decision on Disqualification (3 October 2001) paras 14, 18. 11 See İçkale v Turkmenistan, Decision on Disqualification (11 July 2014) paras 115–116; Saint-Gobain v Venezuela, Decision on Disqualification (27 February 2013) paras 65–66; Abaclat and others v Argentina, Decision on Disqualification (4 February 2014) para 75; Burlington v Ecuador, Decision on Disqualification (13 December 2013) paras 65–66; ConocoPhillips v Venezuela, Decision on Disqualification (15 December 2015) paras 50–51; Blue Bank v Venezuela, Decision on Disqualification (12 November 2013) para 59; Repsol v Argentina, Decision on Disqualification (13 December 2013) para 71; Kazmin v Latvia, Decision on Disqualification (14 October 2020) para 69. 12 For a comparative discussion of independence and impartiality in international courts and tribunals, see Chiara Giorgetti and others, ‘Independence and Impartiality of Adjudicators in Investment Dispute Settlement: Assessing Challenges and Reform Options’ (2020) 21 JWIT 441. See also Loretta Malintoppi, ‘Independence, Impartiality and Duty of Disclosure of Arbitrators’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 789; Audley Sheppard, ‘Arbitrator Independence in ICSID Arbitration’ in Christina Binder and others (eds), International Investment Law for the 21st Century (OUP 2009) 131. For general reflections on independence and impartiality of arbitrators and judges, see Van Vechten Veeder, ‘L’indépendance et l’impartialité de l’arbitre dans l’arbitrage international’ in Loïc Cadiet and others (eds), Médiation et arbitrage (Litec 2005) 219; Gilbert Guillaume, ‘Some Thoughts on the Independence of International Judges vis-à-vis States’ (2003) 2 LPICT 163; Ben Olbourne, ‘Independence and Impartiality: International Standards for National Judges and Courts’ (2003) 2 LPICT 97; Dinah Shelton, ‘Legal Norms to Promote the Independence and Accountability of International Tribunals’ (2003) 2 LPICT 27.

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juicio’ (impartiality of judgment). Given that both versions are authentic, challenge decisions have endorsed the view that arbitrators must be both impartial and independent. It is thus generally accepted by both the Chairman and the unchallenged arbitrators in deciding disqualification proposals that the term ‘independent judgment’ in Art. 14(1) should be interpreted in the sense of including both independence and impartiality.13 The issue of the independence and impartiality of arbitrators in respect of concrete proceedings is discussed in more detail in this Commentary at Art. 57, paras. 30–101.

4. Implementation of Article 14 in Respect of Concrete Dispute Settlement Proceedings 11

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Compliance with the qualities set out in Art. 14 in a concrete ICSID arbitration or conciliation is sought through the duty of the members of an arbitral tribunal or conciliation commission to disclose circumstances that could be seen to affect an arbitrator’s or conciliator’s independence or impartiality (see Art. 40, paras. 19–25). Disclosure of relevant circumstances is required when accepting an appointment as arbitrator or conciliator and continues during the life of an ICSID arbitration or conciliation proceeding (see Art. 57, paras. 43–46).14 Furthermore, the disputing parties have the possibility to challenge an arbitrator or conciliator who does not possess the qualities mentioned in Art. 14 (see Art. 57). Textually, the standards for disqualification of ICSID arbitrators or conciliators due to lack of impartiality and independence under Arts. 14(1) and 57 of the Convention can be distinguished from those prevailing under other rules. When it comes to arbitrators, under the UNCITRAL Arbitration Rules, an arbitrator may be challenged if circumstances exist that ‘give rise to justifiable doubts’ as to his or her impartiality or independence.15 The test is ‘whether a reasonable, fair-minded and informed person has justifiable doubts as to the arbitrator’s [independence] or impartiality,’ having

13 See eg Landesbank Baden-Württemberg and others v Spain, Decision on Disqualification (15 December 2020) paras 128–131; VM Solar Jerez and others v Spain, Decision on Disqualification (24 July 2020); Pey Casado v Chile, Resubmitted Case: Decision on Disqualification (13 April 2017) paras 43, 67; EDF v Argentina, Decision on Annulment (5 February 2016) para 152; ConocoPhillips v Venezuela, Decision on Disqualification (15 December 2015) paras 35, 50, 80; Blue Bank v Venezuela, Decision on Disqualification (12 November 2013) para 58; Urbaser v Argentina, Decision on Disqualification (12 August 2010) para 36; Canepa Green Energy v Spain, Decision on Disqualification (10 February 2020) para 51. Further references to the case law are included under Art. 57, paras 37–42. 14 See Rule 6 of the Arbitration and Conciliation Rules, respectively. Similar provisions exist also for arbitrations and conciliations under the Additional Facility. See Art. 13 of the Arbitration (Additional Facility) Rules and the Conciliation (Additional Facility) Rules, respectively. 15 The rules regarding challenges of arbitrators are identical in all three versions of the UNCITRAL Arbitration Rules, see UNCITRAL Arbitration Rules (1976) Art. 10(1); UNCITRAL Arbitration Rules (2010 and 2013) Art. 12(1). The 2013 version of the UNCITRAL Arbitration Rules introduced a new Art. 1(4), which applies the UNCITRAL Arbitration Rules on Transparency in Treaty-Based Investor– State Arbitration (UNCITRAL Transparency Rules) to investor–State arbitrations on certain conditions. While the UNCITRAL Transparency Rules do not contain specific provisions on arbitrators’ challenges, the provisions calling for disclosure of the information concerning the arbitration, including the names of the parties and the arbitrators as well as the written submissions, witness statements and expert reports (Art. 3(1) and (2)), may have an impact on possible challenges. Indeed, parties may more easily rely on public information to challenge arbitrators, for instance on the basis of repeat appointments or ‘issue conflicts.’

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considered all of the relevant facts and circumstances.16 Under the UNCITRAL Arbitration Rules, an arbitrator may also be challenged if he or she fails to act, or in the event of de jure or de facto impossibility of performing the arbitrator’s functions.17 Under the ICC Arbitration Rules, arbitrators may be challenged ‘for an alleged lack of impartiality or independence, or otherwise.’18 The 2017 SCC Arbitration Rules provide that an arbitrator may be challenged if circumstances exist which give rise to justifiable doubts as to the arbitrator’s impartiality or independence, or if he or she does not possess qualifications agreed to by the parties.19 In the ICSID system, Art. 57 of the Convention requires a challenging party who alleges that an arbitrator or conciliator lacks the qualities set out in Art. 14(1) of the ICSID Convention to establish that there was a ‘manifest lack’ of those qualities. The meaning of the term ‘manifest’ has given rise to varying interpretations over the years. The heart of the debate is whether the standard of disqualification is the ‘justifiable doubts’ test, or some higher standard. As will be discussed in greater detail under Art. 57, following the Blue Bank v Venezuela case, a number of ICSID decisions on disqualification proposals applied a lower threshold than in previous cases and held that Arts. 57 and 14(1) of the Convention do not require proof of actual dependence or bias. Rather, the ‘appearance of dependence or bias’ is sufficient to result in disqualification (see Art. 57, paras. 8, 11, 12, 37–42).20 This emerging trend may lead to a progressive alignment of the standard of disqualification under the ICSID Convention with the ‘justifiable doubts’ test commonly applicable under other arbitral rules. However, the presence of the word ‘manifest’ in Art. 57 of the Convention leaves the possibility open for a party to argue that proof of actual dependence or bias is required. Annulment of an award under Art. 52(1)(a) due to the improper constitution of the tribunal on account of the absence of the qualities required by Art. 14(1) is possible, but unlikely (see Art. 52, paras. 125–147). Until 31 December 2020, this ground of annulment has been raised only in fourteen cases leading to decisions.21 In twelve 16 See Gallo v Canada (UNCITRAL), Decision on Challenge (14 October 2009) para 19; National Grid v Argentina (UNCITRAL), Decision on Challenge (3 December 2007) para 80. See also Sarah Grimmer, ‘The Determination of Arbitrator Challenges by the Secretary-General of the Permanent Court of Arbitration’ in Chiara Giorgetti (ed), Challenges and Recusals of Judges and Arbitrators in International Courts and Tribunals (Brill 2015) 80, 96. 17 UNCITRAL Arbitration Rules (1976) Art. 13(2); UNCITRAL Arbitration Rules (2010 and 2013) Art. 12(3). 18 ICC Arbitration Rules (2021) Art. 14(1). 19 SCC Arbitration Rules (2021) Art. 19(1). 20 Blue Bank v Venezuela, Decision on Disqualification (12 November 2013) para 59. See also the analysis of this case in Marc Lalonde, ‘Quo Vadis Disqualification?’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Wolters Kluwer 2015) 641. For other cases relying on Blue Bank, see Burlington v Ecuador, Decision on Disqualification (13 December 2013) para 66; Abaclat and others v Argentina, Decision on Disqualification (4 February 2014) para 76; Caratube and Hourani v Kazakhstan, Decision on Disqualification (20 March 2014) para 57; ConocoPhillips v Venezuela, Decision on Disqualification (5 May 2014) para 52, ibid, Decision on Disqualification (1 July 2015) para 83, and ibid, Decision on Disqualification (26 July 2016) para 12(a); İçkale v Turkmenistan, Decision on Disqualification (11 July 2014) para 117; Kazmin v Latvia, Decision on Disqualification (14 October 2020) para 72. 21 See Carnegie Minerals v The Gambia, Decision on Annulment (7 July 2020); Vivendi v Argentina, Resubmitted Case: Decision on Annulment (10 August 2010); EDF v Argentina, Decision on Annulment (5 February 2016); Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Annulment (11 May 2010); Azurix v Argentina, Decision on Annulment (1 September 2009); Sempra v

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of these annulment cases, the ad hoc Committees rejected the allegation based on this ground, while in one case the ad hoc Committee did not deal with this ground as it rejected the request for annulment on other grounds.22 In one case, the ad hoc Committee annulled the original award in its entirety for improper constitution of the tribunal and for a serious departure from a fundamental rule of procedure due to an arbitrator’s lack of independence and impartiality.23 In the annulment proceedings in Azurix v Argentina, the Respondent contended that the Tribunal had been improperly constituted due to ‘a manifest lack of the qualities required by paragraph (1) of Article 14’ under Art. 57(1). The ad hoc Committee observed that Art. 52(1)(a) does not provide that the wording in Art. 57(1) will constitute a ground of annulment. Rather, the ground of annulment under Art. 52(1)(a) is that the tribunal was ‘not properly constituted.’24 The ad hoc Committee further noted that, if the procedures established by Arts. 57 and 58 have been properly complied with, the tribunal will be properly constituted for the purposes of Art. 52(1)(a).25 However, for the ad hoc Committee, ‘Art. 52(1)(a) cannot be interpreted as providing the parties with a de novo opportunity to challenge members of the tribunal after the tribunal has already given its award.’26 Moreover, a party with knowledge of an alleged improper constitution of the Tribunal who fails to raise the issue in the original proceeding may be taken to have waived its right to raise this as a ground for annulment (see Art. 52, paras. 65, 66, 124, 141–147; Art. 57, paras. 5, 18–20).27 In Eiser v Spain, the only case so far where an ICSID award was annulled due to the improper constitution of the Tribunal, the Claimant, resisting the application for annulment, argued that Art. 57 of the Convention distinguished between a disqualification based on challenges to the qualities required of an arbitrator under Art. 14(1) and the ineligibility of an arbitrator under Arts. 37–40.28 The ad hoc Committee disagreed and noted that a tribunal cannot be held to be ‘properly constituted’ under Art. 52(1)(a) ‘where an arbitrator, whose ability to exercise independent judgment is in doubt, is either appointed to, or continues to be a member of, a tribunal.’29 On that basis, the ad hoc Committee found that an award can be annulled for improper constitution of the tribunal if an arbitrator did not possess the qualities of impartiality and independence.30 The ad hoc Committee further held as follows:

22 23 24 25 27 28 29

Argentina, Decision on Annulment (29 June 2010); Suez and Vivendi v Argentina, Decision on Annulment (5 May 2017); von Pezold and others v Zimbabwe, Decision on Annulment (21 November 2018); OIEG v Venezuela, Decision on Annulment (6 December 2018); Suez and others v Argentina, Decision on Annulment (14 December 2018); RSM v St Lucia, Decision on Annulment (29 April 2019); Mobil v Argentina, Decision on Annulment (8 May 2019); Pey Casado v Chile, Resubmitted Case: Decision on Annulment (8 January 2020); Eiser v Spain, Decision on Annulment (11 June 2020). For the one case, see Sempra v Argentina, Decision on Annulment (29 June 2010). Eiser v Spain, Decision on Annulment (11 June 2020). For further discussion, see Art. 57, paras 11–13, 29, 57, 75. Azurix v Argentina, Decision on Annulment (1 September 2009) para 279. ibid. 26 ibid para 280. ibid para 291. See also Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Annulment (11 May 2010) paras 129–130. Eiser v Spain, Decision on Annulment (11 June 2020) para 165. ibid para 167. 30 ibid para 46.

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Article 14 – Qualities of Panel Members

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The requirement that a tribunal be properly constituted is not confined to the time of the appointment of arbitrators, i.e. the constitution of a tribunal. It is a continuing requirement. It begins with the constitution of the tribunal and ends only when the proceedings culminate in a decision or award making the tribunal functus officio. From the time of his or her appointment until he or she becomes functus officio an arbitrator must exercise independent judgment and be impartial. A failure in this regard would impact the proper constitution of the tribunal and form a ground for annulment under Article 52(1)(a).31

B. ‘(2) The Chairman, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of assuring representation on the Panels of the principal legal systems of the world and of the main forms of economic activity.’ Art. 14(2) adds two further requirements that apply only to Panel members designated by the Chairman. These requirements do not relate to the qualities of individual designees, but to the composition of the list as a whole. In making his or her designation to the Panels, the Chairman must ensure that the world’s principal legal systems and the main forms of economic activity are represented on the Panels. The words ‘in addition’ make it clear that the persons designated by the Chairman must also possess the qualities stated in Art. 14(1) (History, Vol. II, p. 486). During the Convention’s drafting, the provision that eventually became Art. 14(2) underwent little change (History, Vol. I, pp. 74, 76). There was general agreement that this provision should be used to assure a balanced representation of different legal systems supplementing the designations by States in this respect (History, Vol. II, pp. 127, 144, 145, 253, 318, 319, 386, 387, 488, 662). Mr. Broches explained that the idea was derived from the International Court of Justice32 and that it was important in view of choice of law clauses referring to principles of law common to a certain group of countries (ibid., p. 728). The Chairman’s power to designate Panel members was also seen as desirable to ensure the ‘fair representation on the Panels of qualified persons from both investing and receiving countries’ (History, Vol. II, p. 382) (see also Art. 39, para. 12). In response to a question, Mr. Broches explained that the expression ‘the main forms of economic activity’ covered such sectors as banking, industry, agriculture, and the like (ibid., p. 487). As of 31 December 2020, the following nationalities are represented in the Chairman’s List of Arbitrators: the United Kingdom, Nigeria, Bulgaria, France, Iran, Argentina, Australia, the United States of America, Italy, Mexico and China. The Chairman’s List of Conciliators contains the following nationalities: Egypt, Uganda, the United States of America, the United Kingdom, Venezuela, Spain, Japan, France, Australia, Canada and Germany.33 The fact that there are more nationalities than the numbers of designees is due to the fact that some of them have double nationality (and three nationalities in the case of a designee in the Conciliators’ List). The Chairman’s lists are increasingly diverse in terms of geographic and gender diversity,

31 ibid para 168. 32 ICJ Statute (n 4) Art. 9. 33 See ICSID, ‘Members of the Panels of Conciliators and Arbitrators’ ICSID/10 (21 December 2020).

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even though that objective is not expressly listed in the Convention. In particular, while women were under-represented in the Chairman’s Lists in the past, the latest designations included five women out of ten designees to each List.

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Article 15 (1) Panel members shall serve for renewable periods of six years. (2) In case of death or resignation of a member of a Panel, the authority which designated the member shall have the right to designate another person to serve for the remainder of that member’s term. (3) Panel members shall continue in office until their successors have been designated. Art. 15 deals with the duration of service and consequences of a vacancy on the Panels. The earlier drafts provided for four years of service on the Panels (History, Vol. I, pp. 76, 78). There were several suggestions that this term be extended. Eventually, it was fixed at six years with a possibility of renewal (History, Vol. II, pp. 144, 385, 386, 489, 562, 662, 722, 730, 731, 753, 935). The Convention does not explicitly address the possibility of a removal or replacement of a Panel member before the expiry of the six years of service. During the Convention’s drafting, there was a suggestion that Panel members should only serve ‘subject to the pleasure’ of the designating authority; in other words, that the designation could be terminated at any time. Other delegates saw a danger to the independence of Panel members in this proposal. The idea to allow the removal of Panel members during their period of service was defeated in two votes (History, Vol. II, pp. 487–489, 562, 730–732). The peremptory language of Art. 15(1) (‘shall serve for . . . six years’) also supports the interpretation that, once designated, a Panel member may not be withdrawn by the designating authority (see Art. 16, para. 6). Designations for shorter periods than six years would also be impermissible.1 Art. 56(2) makes it clear that a Panel member who has been appointed to a conciliation commission or arbitral tribunal will continue to serve in that capacity even after the expiry of the membership on the Panel (see Art. 56, paras. 34–37). The expiry of the six years of service on a Panel will not terminate the membership automatically. It merely opens the possibility for the designating authority to make another designation, thereby replacing the current member, or to redesignate the current member (History, Vol. II, pp. 730, 732, 754). This has the effect of keeping a larger number of persons on the Panels even in case of States’ failure to make designations to which they are entitled. A look at the list of Members of the Panels (see Art. 12, para. 6) reveals that a considerable number of Panel members continue to serve beyond their original six years of service. In some instances, the terms of service have expired so far

1 Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 639.

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back in time, in some cases since the 1980s, to put in question whether the relevant designations are still current and the designees continue to be available.2 The provision on the replacement of Panel members in case of death or resignation was contained in all drafts to the Convention and evoked little substantive comment (History, Vol. I, pp. 78, 80; Vol. II, pp. 144, 318, 487, 488, 723–724, 730, 753). A replacement is to be made by the authority that made the original designation, i.e., the State concerned or the Chairman. Designations under Art. 15(2) are not for a full six years, but only for the balance of the previous member’s term of office.

2 More than 200 designations to the Panels had expired as of 31 December 2020. See ICSID, ‘Members of the Panels of Conciliators and of Arbitrators’ ICSID/10 (21 December 2020). Given that Art. 15(3) allows nominees to continue to serve until their successor is named, and hence potentially after the terminal date of their designation, the figures relating to designations can change from day to day.

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Article 16 (1) A person may serve on both Panels. (2) If a person shall have been designated to serve on the same Panel by more than one Contracting State, or by one or more Contracting States and the Chairman, he shall be deemed to have been designated by the authority which first designated him or, if one such authority is the State of which he is a national, by that State. (3) All designations shall be notified to the Secretary-General and shall take effect from the date on which the notification is received. Art. 16 deals with designations of one person to both Panels, with designations of one person by more than one designating authority and with the notification of designations. The possibility of one person being designated to both Panels was foreseen in all drafts to the Convention and evoked little comment (History, Vol. I, pp. 80, 82; Vol. II, pp. 144, 726, 754). The qualifications required by Art. 14(1) for Panel membership are largely identical, although legal competence is emphasized for designations to the Panel of Arbitrators (see Art. 14, para. 7). The practice of designating the same persons to both Panels seems to be less prevalent at the moment. As of 31 December 2020, around 700 designated individuals sit on both Panels.1 The Centre keeps a consolidated list of members of both Panels (see Art. 12, para. 6).2 Multiple designations of one person were the subject of some discussion during the Convention’s drafting. The initial drafts simply provided that the earlier designation should be decisive. Later, a clause was added to the effect that designation by the State of the designee’s nationality would prevail (History, Vol. I, pp. 82, 84; Vol. II, pp. 144, 145, 253, 318, 488, 489, 732–733, 754). The latter provision has the effect of freeing a position on the Chairman’s List (see Art. 13, paras. 5–7), if a person on that List were to be designated by the State of his or her nationality. In actual practice, designations of one person by more than one designating authority are not frequent since designating States and the Chairman are fully informed of the existing Panel membership.3 All designations are notified to the Secretary-General. The technical details of the notification process are contained in the Administrative and Financial Regulations:

1 For the full list of members of the Panels, see ICSID, ‘Members of the Panels of Conciliators and Arbitrators’ ICSID/10 (21 December 2020). 2 For a searchable database of arbitrators, conciliators and ad hoc committee members, see ICSID, ‘Database of ICSID Panels’ accessed 10 January 2021. 3 There is, however, one exception at the time of writing. Franco Ferrari, an Italian national, was appointed by Saint Lucia in 2015 and then appointed by Germany on 9 September 2019. See Federico Cabona and Francesca Sepe, ‘Does Nationality Matter in Designations to the ICSID Panel of Arbitrators?’ (Kluwer Arbitration Blog, 6 November 2019).

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schreuer’s commentary on the icsid convention Regulation 21 Establishment of Panels (1) Whenever a Contracting State has the right to make one or more designations to the Panel of Conciliators or of Arbitrators, the Secretary-General shall invite the State to make such designations. (2) Each designation made by a Contracting State or by the Chairman shall indicate the name, address and nationality of the designee, and include a statement of his qualifications, with particular reference to his competence in the fields of law, commerce, industry and finance. (3) As soon as the Secretary-General is notified of a designation, he shall inform the designee thereof, indicating to him the designating authority and the terminal date of the period of designation, and requesting confirmation that the designee is willing to serve. (4) The Secretary-General shall maintain lists, which he shall transmit from time to time to all Contracting States and on request to any State or person, of the members of the Panels of Conciliators and of Arbitrators, indicating for each member: (a) (b) (c) (d) (e)

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his address; his nationality; the terminal date of the current designation; the designating authority; his qualifications.

During the Convention’s drafting, a debate on the Secretary-General’s duty to keep the States party to the Convention informed of the status of the List of Members of the Panels resulted in a decision to regulate this duty in the rules of procedure (History, Vol. II, pp. 732, 735, 768–769). It is reflected in Administrative and Financial Regulation 21(4). The rule in Art. 16(3), namely that the designation shall take effect upon receipt of the notification by the Secretary-General, is subject to Art. 15(1): if the designee is to replace a serving Panel Member, the designation will be effective from the date of the expiry of the previous Panel member’s term of office.

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Article 17 If the expenditure of the Centre cannot be met out of charges for the use of its facilities, or out of other receipts, the excess shall be borne by Contracting States which are members of the Bank in proportion to their respective subscriptions to the capital stock of the Bank, and by Contracting States which are not members of the Bank in accordance with rules adopted by the Administrative Council. Art. 17 deals with the Centre’s administrative expenditures. The cost of individual conciliation and arbitration proceedings are to be borne by the parties to these proceedings in accordance with Arts. 60 and 61. All drafts leading to the Convention reflected the basic concept for the Centre’s financing contained in Art. 17 (History, Vol. I, pp. 86, 88). In the deliberations on what became Art. 17, the overwhelming majority of opinions favored a financing of the Centre’s administrative costs by the World Bank (History, Vol. II, pp. 90, 92, 114, 116, 121, 128, 146, 254, 319, 381–382, 388, 483, 490, 544, 562, 651–652, 660, 733, 735–736). But a preference for the expenses to be borne at least partially by Contracting States to the Convention was expressed by other delegates. This was also designed to assure the financial participation of non-Members of the Bank who might ratify the Convention (ibid., pp. 56, 100, 115, 122, 123, 128, 176–177, 722). The phrase ‘or out of other receipts’ was contained in all drafts to the Convention (History, Vol. I, pp. 86, 88). This was meant as a reference to the possibility that the World Bank might finance the costs of the Centre (History, Vol. II, pp. 146, 254, 319, 733, 971). Mr. Broches explained that the purpose of having the World Bank underwrite the Centre’s administrative costs was ‘to avoid excessive administrative complexity while insulating the Center from the effects of delay by Contracting States in paying their contributions’ (ibid., p. 490). In response to suggestions that the Bank’s financial sponsorship should be made explicit (ibid., pp. 382, 651–652), Mr. Broches explained that it would be unsound to include, in the Convention, an unlimited and perpetual obligation for another institution to cover the Centre’s expenses (ibid., pp. 735–736). An undertaking, in limited terms, by the Bank’s Executive Directors to underwrite the Centre’s expenditures (see para. 4 infra) was obtained before the Convention’s adoption (History, Vol. II, pp. 935, 953–954, 970–971). The Report of the Executive Directors on the Convention states that the Bank will provide the Centre with premises for its seat and with other administrative facilities and services (see Art. 6, para. 15).1 It also defines the Bank’s financial undertaking towards the Centre in the following Terms: 17. With respect to the financing of the Centre (Article 17), the Executive Directors have decided that the Bank should be prepared to provide the Centre with office accommodation free of charge as long as the Centre has its seat at the Bank’s 1 (1993) 1 ICSID Reports 23, 26, para 16.

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schreuer’s commentary on the icsid convention headquarters and to underwrite, within reasonable limits, the basic overhead expenditure of the Centre for a period of years to be determined after the Centre is established.2

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The Bank’s financial undertaking towards the Centre is set out in more detail in a Memorandum of Administrative Arrangements of 13 February 1967 between the two institutions3 (see Art. 6, para. 16). Under this agreement, the World Bank bears the costs of the Centre’s staff, as well as its administrative costs. The Bank met ICSID’s administrative budget in full for nearly forty years. Beginning in 2005, steps were taken to reduce ICSID’s financial dependence on the Bank by refashioning its case fee structure and increasing the fees (see Art. 59, para. 17). Currently, ICSID depends on the Bank only for a small portion of its budgetary needs.4 Assessment of the Centre’s expenditures on Contracting States is foreseen only if, and to the extent that, these expenses cannot be met out of charges under Art. 59 of the Convention and out of other receipts. So far, this has never been necessary. If this should ever become necessary, assessment would take place in proportion to these States’ subscriptions in the World Bank. Under Art. 67, non-Members of the World Bank may become parties to the Convention under conditions stated there. The Administrative and Financial Regulations contain precise rules for the assessment of the Centre’s expenditures also on these States.5

2 ibid. 3 See Memorandum of Administrative Arrangements agreed between the International Bank for Reconstruction and Development and the International Centre for Settlement of Investment Disputes (13 February 1967) in ICSID, ‘First Annual Report 1966/1967’ (1967) 15–16. 4 See Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 219–220, 271. 5 See Administrative and Financial Regulation 18.

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Article 18 The Centre shall have full international legal personality. The legal capacity of the Centre shall include the capacity: (a) to contract; (b) to acquire and dispose of movable and immovable property; (c) to institute legal proceedings. Art. 18 is the first of seven Articles in the Convention’s Section on ‘Status, Immunities and Privileges.’ For other international institutions, the issues covered by this Section are often dealt with in separate treaties. These treaties are multilateral conventions on privileges and immunities as well as bilateral headquarters agreements.1 None of these treaties covers the Centre. The Centre is not a specialized agency in the sense of Art. 57 of the United Nations Charter.2 Therefore, the 1947 Convention on the Privileges and Immunities of the Specialized Agencies3 is not applicable to it. Neither is there a headquarters agreement between ICSID and the United States.4 Since the Centre has separate international legal personality, the treaties covering the status, immunities, and privileges of the World Bank do not apply to it. It follows that Arts. 18–24 of the ICSID Convention are the only treaty provisions covering the status, immunities and privileges of the Centre.5 A clause providing for legal personality was contained in all drafts to the Convention (History, Vol. I, p. 90). This clause was not uncontested and led to some debate (History, Vol. II, pp. 55, 101, 113, 246, 248–249, 312–313, 670, 697, 724). Mr. Broches explained that the clause was designed to distinguish the Centre from the World Bank (ibid., pp. 312, 380). Requests to add more elaboration to the simple statement of legal personality led to the addition of a separate Article containing the list that is now in the Article’s second sentence (ibid., pp. 312, 314, 662–663). There was a lengthy debate on the meaning of ‘international’ legal personality and its distinction from personality under domestic law (ibid., pp. 380, 737–740, 971). The efforts of a working group resulted in the merger of the two formerly separate Articles and the adoption of the final text (ibid., pp. 747–748).

1 August Reinisch, ‘Privileges and Immunities’ in Jan Klabbers and Åsa Wallendahl (eds), Research Handbook on the Law of International Organizations (Edward Elgar 2011) 132, 135 ff. 2 Aron Broches, ‘On the Finality of Awards: A Reply to Michael Reisman’ (1993) 8 ICSID Rev 92, 98 ff. 3 Convention on the Privileges and Immunities of the Specialized Agencies (approved by the General Assembly of the United Nations 21 November 1947, entered into force 2 December 1948) 33 UNTS 261. 4 Executive Order 11966 (19 January 1977) (1977) 42 FR 4331 designates ICSID as a public international organization entitled to enjoy the privileges, exemptions and immunities conferred by the United States International Organizations Immunities Act (59 Stat 669, 22 USC § 288). 5 See also Antonio R Parra, ‘The International Centre for Settlement of Investment Disputes and Immunity of Arbitrators’ in Julian DM Lew (ed), The Immunity of Arbitrators (Lloyd’s of London Press 1990) 105.

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The wording of Art. 18 is closely analogous to Art. I, Sec. 1 of the 1946 Convention on the Privileges and Immunities of the United Nations6 (History, Vol. II, p. 737) and to Art. II, Sec. 3 of the Convention on the Privileges and Immunities of the Specialized Agencies (see para. 1 supra). Art. 18 also corresponds to the provision on personality in Art. VII, Sec. 2 of the Articles of Agreement of the World Bank.7 These provisions enable the organizations to act as legal persons under domestic law.8 However, in these instruments the reference is to ‘juridical personality’ or, in the case of the World Bank, to ‘full juridical personality’ which is usually understood to refer to domestic legal personality. Thus, the express reference in Art. 18 to ‘full international legal personality’ is rather unique and probably a result of the intention to distinguish the Centre from the World Bank. While a similar reference to ‘full international personality’ may be found in Art. 50 of the 1963 Agreement establishing the African Development Bank, this provision draws a clearer distinction between ‘full international personality’9 as related to the Bank’s international status and the ‘full juridical personality’ it holds in member States.10 The Report of the Executive Directors states: 15. The Convention establishes the International Centre for Settlement of Investment Disputes as an autonomous international institution (Articles 18–24).11

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The Centre enters into publishing contracts. It does not own property and has no financial resources of its own. There is little information publicly available indicating that the Centre has ever been party to legal proceedings before national courts. Jack Grynberg, the Chief Executive Officer of RSM Production Corporation, which was the unsuccessful Claimant in an ICSID arbitration,12 filed a lawsuit in a D.C. district court against the World Bank, ICSID, and the ICSID Secretary-General based on the allegation that a member of the annulment committee had failed to disclose a conflict of interest.13 However, Grynberg withdrew his claim a few months after filing it.14 Reportedly, an unsuccessful ICSID claimant tried to sue the World Bank before Belgian courts in 2005.15 The case was dismissed for lack of jurisdiction. The decision has not been published.

6 Convention on the Privileges and Immunities of the United Nations (adopted 13 February 1946, entered into force 17 September 1946) 1 UNTS 15. 7 Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134. 8 See Niels Blokker, ‘Juridical Personality (Article I Section 1 General Convention)’ in August Reinisch (ed), The Conventions on the Privileges and Immunities of the United Nations and Its Specialized Agencies: A Commentary (OUP 2016) 49. 9 Agreement Establishing the African Development Bank (adopted 4 August 1963, entered into force 10 September 1964) 510 UNTS 3, Art. 50. 10 ibid Art. 51. 11 (1993) 1 ICSID Reports 23, 26. 12 RSM v Central African Republic, Award (11 July 2011) and Decision on Annulment (20 February 2013). 13 See RSM Production Corporation, ‘Jack Grynberg Sues the World Bank Group and ICSID over Concerns of Conflicts of Interest’ (Press Statement) (PRNewswire, 31 May 2013). 14 ‘Grynberg Drops World Bank Lawsuit’ (ICLG.com, 5 November 2013). 15 Philippe Gruslin v La Banque Internationale pour la Reconstruction et le Développement, Brussels Court of First Instance, Judgment (19 August 2005) (not published). See also August Reinisch and Jakob Wurm, ‘International Financial Institutions Before National Courts’ in Daniel D Bradlow and David B Hunter (eds), International Financial Institutions and International Law (Kluwer International 2010) 103, 128; Luke E Peterson, ‘ICSID Retains Law Firm and Responds to Lawsuit Filed by US Investor; Unrelated Lawsuit Arising out of ICSID’s Activities Also Pending in Belgium’ (IA Reporter, 22 August 2013).

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Article 18 – Legal Personality of the Centre

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Despite close legal ties between the Centre and the World Bank (see Art. 2, para. 5), the Centre is an autonomous international organization, enjoying its own international legal personality.16 Therefore, lawsuits against the World Bank relating to activities by or under the auspices of ICSID would be directed against the wrong defendant. Because of the Centre’s broad immunity from legal process under Art. 20, actions against it are unlikely to succeed.

16 See also Methanex v United States (UNCITRAL), Reasons for the Tribunal’s Decision on the Place of Arbitration (31 December 2000) para 39 (stating that ‘[t]he World Bank is an independent international organisation with juridical personality and broad jurisdictional immunities and freedoms (Article VII of its Articles of Agreement); and ICSID similarly has international legal personality and benefits from a wide jurisdictional immunity (Articles 18–20 of the Convention on the Settlement of International Disputes between States and Nationals of Other States)’).

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Article 19 To enable the Centre to fulfil its functions, it shall enjoy in the territories of each Contracting State the immunities and privileges set forth in this Section. 1

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In the First Draft, the text of what later became Art. 19 was still attached to the general statement that the Centre shall have international legal personality (History, Vol. II, p. 619) and was evidently meant as an explanation and elaboration of the general statement on legal personality. Later, a list of specific legal capacities, previously contained in a separate Article, was attached to the general statement on legal personality and capacity (see Art. 18, para. 2) to form what subsequently became Art. 18. As a consequence, the text of what became Art. 19 was put into a separate Article (History, Vol. I, p. 92). The legal relevance of this Article was not clarified in the discussions, which barely touched upon it (History, Vol. II, pp. 739, 740, 743). As it stands, Art. 19 is no more than a general introduction to the subsequent Articles. The Section referred to covers Arts. 18–24. The statement ‘to enable the Centre to fulfil its functions’ may help to establish the exact extent of the immunities and privileges set out in the Convention. But the travaux préparatoires contain no indication that immunities and privileges that do not serve the Centre’s functions should be denied or interpreted restrictively. The notion that the Centre shall enjoy certain privileges and immunities to enable it ‘to fulfil its functions’ corresponds to the generally accepted rationale for privileges and immunities. Most constituent instruments of international organizations provide for functional privileges and immunities, meaning those that are necessary for the fulfillment of their ‘functions’ or ‘purposes.’1 These are then defined more precisely in multilateral treaties addressing privileges and immunities, as well as in bilateral headquarters agreements. In the case of the Centre, Arts. 18–24 substitute for a separate multilateral treaty. The reference to the territories of the Contracting States merely restates the general principle that a treaty will not bind States that are not parties to it.

1 See August Reinisch, ‘Privileges and Immunities’ in Jacob Katz Cogan, Ian Hurd and Ian Johnstone (eds), The Oxford Handbook of International Organizations (OUP 2016) 1048.

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Article 20 The Centre, its property and assets shall enjoy immunity from all legal process, except when the Centre waives this immunity. All drafts of the Convention provided for the Centre’s immunity from all legal process (History, Vol. I, pp. 92, 94). It was explained that the immunity of other international organizations served as a model and that the different situation of the World Bank,1 which does not enjoy a similarly broad jurisdictional immunity, was due to the Bank’s international borrowing activities (History, Vol. II, pp. 147, 391, 491, 741). Because of the Centre’s broad jurisdictional immunity any lawsuits by disappointed parties to ICSID arbitration are ineffective. This may have been the reason why an unsuccessful claimant in an ICSID case has not only tried to sue ICSID and its Secretary-General, but also the World Bank, which does not enjoy an equally broad immunity from legal process. A short-lived lawsuit was filed before a D.C. district court by Jack Grynberg, President and Chief Executive Officer of RSM Production Corporation, which was the Claimant in the ICSID case RSM v Central African Republic.2 In 2013, Mr. Grynberg alleged that a member of an ad hoc committee appointed by ICSID had not disclosed a conflict of interest, which would have been relevant to RSM’s case.3 However, Mr. Grynberg dropped the lawsuit before the D.C. district court could rule on the Centre’s immunity.4 In another (relatively unknown) instance, the investor Philippe Gruslin reportedly sued the World Bank after an award against him was rendered in 2000.5 The possibility of a waiver of the Centre’s immunity was added to the text after a brief discussion (History, Vol. II, pp. 724, 741). There was a formal declaration to the effect that the Centre would not invoke its immunity in the case of counterclaims directly connected to the principal claim in proceedings instituted by the Centre (ibid., pp. 741, 748, 935).

1 See Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134, Art. VII, s 3; Convention on the Privileges and Immunities of the Specialized Agencies (adopted 21 November 1947, entered into force 2 December 1948) 33 UNTS 261, Annex VI. These provisions allow actions against the World Bank in a court of competent jurisdiction under defined circumstances. 2 RSM v Central African Republic, Award (11 July 2011) and Decision on Annulment (20 February 2013). 3 See RSM Production Corporation, ‘Jack Grynberg Sues the World Bank Group and ICSID Over Concerns of Conflicts of Interest’ (Press Statement) (PRNewswire, 31 May 2013). 4 Barbara A Warwas, The Liability of Arbitral Institutions: Legitimacy Challenges and Functional Responses (Asser Press 2017) 9. See also ‘Grynberg Drops World Bank Lawsuit’ (ICLG.com, 5 November 2013). 5 Philippe Gruslin v La Banque Internationale pour la Reconstruction et le Développement, Brussels Court of First Instance, Judgment (19 August 2005) (not published). For the Award in question, see Gruslin v Malaysia II, Award (27 November 2000). See also August Reinisch and Jakob Wurm, ‘International Financial Institutions Before National Courts’ in Daniel D Bradlow and David B Hunter (eds), International Financial Institutions and International Law (Kluwer International 2010) 103, 128; Luke E Peterson, ‘ICSID Retains Law Firm and Responds to Lawsuit Filed by US Investor; Unrelated Lawsuit Arising out of ICSID’s Activities Also Pending in Belgium’ (IA Reporter, 22 August 2013).

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Art. 20 is analogous to Art. II, Sec. 2 of the Convention on the Privileges and Immunities of the United Nations6 and Art. III, Sec. 4 of the Convention on the Privileges and Immunities of the Specialized Agencies,7 both of which refer to ‘every form of legal process’ instead of ‘all legal process.’ Under Administrative and Financial Regulation 32(1)(a) and (3)(c), the SecretaryGeneral or the Administrative Council may waive the immunity of the Centre. There is no information available as to whether such a waiver has ever been made in individual cases. The Centre does not have its own mechanism for the resolution of staff disputes. Because of its distinct legal personality, it would have to join the World Bank Administrative Tribunal as ‘any other international organization’ pursuant to Art. XV of the latter’s Statute.8 Only then could the World Bank Administrative Tribunal hear cases brought against ICSID by ICSID staff. In practice, however, there is no need for such a solution since all staff members working for the Centre are legally staff of the World Bank Group.9 This allows them to bring cases before the World Bank Administrative Tribunal against the World Bank (i.e., the International Bank for Reconstruction and Development).10 Although domestic courts have repeatedly granted international organizations broad, if not absolute, immunity, the case of Pichon-Duverger v Permanent Court of Arbitration constitutes a notable exception.11 The Sub-District Court of The Hague rejected the immunity defense of the Permanent Court of Arbitration in this staff dispute brought by a former PCA employee who challenged his dismissal. The Dutch court reasoned that staff disputes constituted a purely private law matter, and did thus not affect the functioning of the international organization. Moreover, the PCA’s absolute immunity as provided for in its Headquarters Agreement with the Netherlands demanded the creation of appropriate methods for the settlement of contractual disputes. Since the PCA had not established such a mechanism, the court denied its immunity to safeguard the former employee’s right of access to court under Art. 6 of the European Convention on Human Rights.12 In light of this case, it is unlikely but not impossible that a domestic court might deny the Centre’s jurisdictional immunity in similar disputes. However, as the employment contracts of ICSID staff are between the staff members and the World Bank, ICSID would probably not be the proper defendant in such cases. 6 Convention on the Privileges and Immunities of the United Nations (adopted 13 February 1946, entered into force 17 September 1946) 1 UNTS 15. 7 Convention on the Privileges and Immunities of the Specialized Agencies (n 1) Annex VI. 8 Statute of the Administrative Tribunal of the International Bank for Reconstruction and Development, International Development Association and International Finance Corporation (adopted by the Board of Governors 30 April 1980, amended 31 July 2001 and 18 June 2009) Art. XV accessed 10 January 2021. 9 Bruno M de Vuyst, ‘The World Bank Administrative Tribunal’ [1981/1982] Revue Belge de Droit International 81, 86. 10 See eg Denis v International Bank for Reconstruction and Development, World Bank Administrative Tribunal Case No 458, Judgment (11 October 2011). 11 Pichon-Duverger v International Bureau of the Permanent Court of Arbitration, District Court of The Hague (sub-district section), Judgment in the Incidental Proceedings No 262987/02-3417 (27 June 2002). 12 Rosanne van Alebeek and André Nollkaemper, ‘The Netherlands’ in August Reinisch (ed), The Privileges and Immunities of International Organizations in Domestic Courts (OUP 2013) 179, 190, 197.

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Article 21 The Chairman, the members of the Administrative Council, persons acting as conciliators or arbitrators or members of a Committee appointed pursuant to paragraph (3) of Article 52, and the officers and employees of the Secretariat: (a) shall enjoy immunity from legal process with respect to acts performed by them in the exercise of their functions, except when the Centre waives this immunity; (b) not being local nationals, shall enjoy the same immunities from immigration restrictions, alien registration requirements and national service obligations, the same facilities as regards exchange restrictions and the same treatment in respect of travelling facilities as are accorded by Contracting States to the representatives, officials and employees of comparable rank of other Contracting States.

OUTLINE 1. Introduction 2. Immunity from Legal Process 3. Other Immunities and Privileges

Paragraphs 1–2 3–9 10–11

BIBLIOGRAPHY Franck, Susan D, ‘The Liability of International Arbitrators: A Comparative Analysis and Proposal for Qualified Immunity’ (2000) 20 New York Law School Journal of International & Comparative Law 1 Hong-Lin, Yu and Shore, Laurence, ‘Independence, Impartiality, and Immunity of Arbitrators – US and English Perspectives’ (2003) 52 International & Comparative Law Quarterly 935 Parra, Antonio R, ‘The International Centre for Settlement of Investment Disputes and Immunity of Arbitrators’ in Julian DM Lew (ed), The Immunity of Arbitrators (Lloyd’s of London Press 1990) 105 Salahuddin, Asif, ‘Should Arbitrators Be Immune from Liability?’ (2017) 33 Arbitration International 571

1. Introduction Art. 21 deals with the personal immunities and privileges of individuals associated with the Centre’s work. It covers the members of the Administrative Council and its Chairman (Art. 5), the Secretary-General, Deputy Secretaries-General, and other officers and employees of the Centre, as well as conciliators, arbitrators, and members of ad hoc committees. The drafting of what became Art. 21 was based on the parallel provisions governing persons associated with the World Bank’s work (History, Vol. II, pp. 255, 388, 391–392, 67

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490–491, 563). It underwent relatively little change during the Convention’s drafting (History, Vol. I, pp. 94, 96, 98). Art. 21 bears strong similarities to Art. VII, Sec. 8 of the World Bank’s Articles of Agreement.1 Discussion on the drafts turned mainly on immunities for conciliators and arbitrators (see para. 4 infra), on the question of waiver of immunity (see para. 5 infra), and the criterion of officials of ‘comparable rank’ used at the end of the Article (see para. 10 infra).

2. Immunity from Legal Process 3

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The persons listed in Art. 21 are immune from lawsuits or criminal prosecution as well as administrative proceedings. But this immunity only extends to acts performed by them in the exercise of their functions for the Centre. It does not extend to private acts unconnected to the Centre’s activities, such as car accidents. This functional immunity is in line with the position of officers of other international institutions.2 The Working Paper for the Convention included conciliators and arbitrators among the individuals who would enjoy immunity from legal process. But the subsequent Preliminary Draft did not. Suggestions to restore the immunity of conciliators and arbitrators are reflected in the subsequent drafts and in the Convention. Members of ad hoc committees were added at a later stage (History, Vol. I, pp. 94, 96, 98; Vol. II, pp. 389–392, 486, 490–491, 562, 741, 755, 944). A suggestion to grant full diplomatic immunity to conciliators and arbitrators did not succeed (History, Vol. II, pp. 123, 319). In non-ICSID arbitrations, including those under the Additional Facility, as well as commercial arbitration generally, immunity for arbitrators is either expressly provided for in domestic arbitration laws3 or in the form of ‘limitations of liability’ in arbitration rules.4 The possibility of a waiver of immunity from legal process was not contained in the earlier drafts, but was included at a later stage (History, Vol. I, pp. 94, 96, 98; Vol. II, pp. 391, 724, 741, 935). There was a formal declaration to the effect that the Centre should waive any immunity in case of counterclaims directly connected with the principal claim in proceedings instituted by persons who enjoy immunity under Art. 21 (History, Vol. II, pp. 748, 935). Under Administrative and Financial Regulation 32(1), the Secretary-General may waive the immunity of the Centre’s staff. Under Regulation 32(2), the Chairman of the

1 Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134, Art. VII, s 8. 2 See Convention on the Privileges and Immunities of the United Nations (adopted 13 February 1946, entered into force 17 September 1946) 1 UNTS 15, Art. V, ss 18, 20; Convention on the Privileges and Immunities of the Specialized Agencies (adopted 21 November 1947, entered into force 2 December 1948) 33 UNTS 261, Art. VI, ss 19, 22. See also Ronja Bandyopadhyay and Tomoko Iwata, ‘Officials (Article V Sections 17–21 General Convention)’ in August Reinisch (ed), The Conventions on the Privileges and Immunities of the United Nations and Its Specialized Agencies: A Commentary (OUP 2016) 313 ff. 3 See eg Australian – International Arbitration Act (1974) (as subsequently amended) s 28. See generally, Gary Born, International Commercial Arbitration (2nd edn, Wolters Kluwer 2014) 2026–2039; Susan D Franck, ‘The Liability of International Arbitrators: A Comparative Analysis and Proposal for Qualified Immunity’ (2000) 20 NY L Sch J Int’l & Comp L 1; Yu Hong-Lin and Laurence Shore, ‘Independence, Impartiality, and Immunity of Arbitrators – US and English Perspectives’ (2003) 52 ICLQ 935; Asif Salahuddin, ‘Should Arbitrators Be Immune from Liability?’ (2017) 33 Arb Int’l 571. 4 See eg LCIA Arbitration Rules (2020) Art. 34.1; SCC Arbitration Institute Rules (2017) Art. 52; ICC Arbitration Rules (2021) Art. 41. See generally Margaret L Moses, The Principles and Practice of International Commercial Arbitration (CUP 2008) 147–148; Born (n 3) 2012–2013, 2035–2037.

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Administrative Council may waive the immunity of the Secretary-General and the Deputy Secretaries-General and of members of a conciliation commission, arbitral tribunal, or ad hoc committee. Under Regulation 32(3), the Administrative Council may waive the immunity of the Chairman and of members of the Council, as well as of any person listed in Regulation 32(1) and (2). Neither the Convention nor the Regulations offer an indication of the circumstances under which the immunity from legal process should be waived. A suggestion to add a specification to the Convention that the jurisdictional immunity should only apply ‘in the interest of the Center’ was not successful (History, Vol. II, p. 657). Such a specification would have been in line with conventions on the privileges and immunities of other international institutions (see para. 3 supra).5 Despite the absence of such a specification in the Convention, it can be expected that an immunity that impedes the course of justice would be waived, if such waiver would not prejudice the interests of the Centre.6 In the unlikely case of corruption of an arbitrator, there is a possibility of parallel proceedings for the arbitrator’s prosecution and for the resulting award’s annulment under Art. 52(1)(c) (see Art. 52, paras. 322–329). Such parallel proceedings could lead to conflicting decisions. It has been suggested that in such a situation the Chairman of the Administrative Council might defer the consideration of a waiver of an arbitrator’s immunity until the ad hoc committee has ruled on the alleged corruption.7 It should be added that the criteria for a decision by a domestic court and by an ad hoc committee may be different. For instance, an ad hoc committee is unlikely to annul an award adopted by a majority of the tribunal if the arbitrator accused of corruption has voted against it (see Art. 52, para. 603). A domestic court may still find such an arbitrator guilty of corruption. There are no known concluded cases involving the immunity from legal process of a person listed in Art. 21. In one instance, the ICSID Secretary-General was one of three named defendants in a suit filed in a D.C. district court by an unsuccessful claimant in an ICSID arbitration; however, the petition was eventually withdrawn (for details, see Art. 18, para. 5; Art. 20, para. 2).

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3. Other Immunities and Privileges The text of what eventually became Art. 21(b) underwent little change during the Convention’s drafting (History, Vol. I, pp. 94, 96, 98). A suggestion to introduce a distinction between high officials and other officials was not adopted (History, Vol. II, pp. 724–725, 742). The final phrase referring to representatives, officials, and employees of comparable rank of other Contracting States gave rise to some debate. The point was made that this criterion would be difficult to apply since the rank of individuals working on behalf of the Centre could hardly be compared with State officials 5 See eg Convention on the Privileges and Immunities of the United Nations (n 2) Art. V, s 20 (‘Privileges and immunities are granted to officials in the interests of the United Nations and not for the personal benefit of the individuals themselves’). 6 Antonio R Parra, ‘The International Centre for Settlement of Investment Disputes and Immunity of Arbitrators’ in Julian DM Lew (ed), The Immunity of Arbitrators (Lloyd’s of London Press 1990) 105, 109–110. 7 ibid 110.

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(ibid., pp. 254–255, 319, 388–389, 391, 490, 562, 971). In the end, this phrase was nevertheless maintained. In order to facilitate the application of Arts. 21(b) and 22, the Administrative and Financial Regulations provide for certificates of official travel: Regulation 31 Certificates of Official Travel The Secretary-General may issue certificates to members of Commissions, Tribunals or Committees, to officers and employees of the Secretariat and to the parties, agents, counsel, advocates, witnesses and experts appearing in proceedings, indicating that they are traveling in connection with a proceeding under the Convention.8

8 See also Parra (n 6) 108–109.

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Article 22 The provisions of Article 21 shall apply to persons appearing in proceedings under this Convention as parties, agents, counsel, advocates, witnesses or experts; provided, however, that sub-paragraph (b) thereof shall apply only in connection with their travel to and from, and their stay at, the place where the proceedings are held. Art. 22 extends the privileges and immunities granted by Art. 21 to parties and their representatives, as well as to witnesses and experts. The essence of what eventually became Art. 22 was contained in all drafts leading to the Convention (History, Vol. I, pp. 98, 100). The provision was explained as being designed to ensure the proper functioning of proceedings (History, Vol. II, pp. 146–147). The term ‘representatives of parties’ contained in the earlier drafts was deleted as superfluous in view of the references to ‘parties’ and ‘agents’ (ibid., pp. 389–390, 392–393, 742, 748, 755). Parties were not included in the First Draft, but after careful consideration they were reinstated in the list ‘thereby offering them a measure of protection if they had to appear in a country in which the atmosphere was unfriendly’ (ibid., p. 971). Immunities for witnesses and experts were not uncontested, but were retained in all drafts (ibid., pp. 490–491, 563). A general reference to ‘immunities and facilities . . . as may be necessary for the independent exercise of their functions’ in the First Draft was replaced by the more precise reference to Art. 21 (History, Vol. II, pp. 659, 666). A suggestion to grant communication privileges to parties, agents, counsel, advocates, witnesses, and experts in analogy to Art. 23(2) was not successful (ibid., p. 972). The provisions of Art. 21(b), which relate to immunities in connection with travel, apply to parties, agents, counsel, advocates, witnesses, and experts, but only in connection with their travel to and from the place of proceedings and their stay there. In order to facilitate the recognition of these privileges and immunities in States parties to the Convention, the Secretary-General may issue certificates of official travel to these persons under Administrative and Financial Regulation 311 (see Art. 21, para. 11). Apparently, practical problems in connection with travel arrangements for parties, agents, counsel, advocates, witnesses, or experts in ICSID proceedings are not infrequent. It is not clear whether persons encountering such difficulties expressly invoke Art. 22 and use certificates of official travel issued by ICSID’s Secretary-General in accordance with Administrative and Financial Regulation 31. In Tradex v Albania, the witnesses of Albanian nationality were not, at first, granted visas to enter the United Kingdom for the purpose of giving evidence at the hearing to

1 See also Antonio R Parra, ‘The International Centre for Settlement of Investment Disputes and Immunity of Arbitrators’ in Julian Lew (ed), The Immunity of Arbitrators (Lloyd’s of London Press 1990) 105, 108–109.

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be held in London. As a consequence, the Tribunal had to postpone the hearing for over six months. The problems were subsequently resolved.2 According to a press report, French authorities denied a visa to the Attorney-General of Zimbabwe as a result of targeted EU travel sanctions in late 2006. He was thus unable to attend hearings in Funnekotter and others v Zimbabwe3 before an ICSID tribunal in Paris and had to be replaced by another State official.4 Special problems are likely to occur if persons who are subject to targeted travel sanctions imposed by the UN Security Council intend to rely on Art. 22 of the Convention. According to Art. 103 of the UN Charter, obligations under the Charter shall prevail in the event of a conflict with obligations under any other international agreement. Obligations under the UN Charter include the obligation to carry out binding decisions of the UN Security Council.5 The reference to Art. 21 includes the provision on waiver of immunity in Art. 21(a) (see also History, Vol. II, p. 935). Under Administrative and Financial Regulation 32(2)(c), the Chairman of the Administrative Council may waive the immunity of the parties, agents, counsel, advocates, witnesses, or experts appearing in a proceeding if a recommendation for such waiver is made by the commission, tribunal, or ad hoc committee concerned. Even without such a recommendation, the Administrative Council may waive the immunity of any such person under Regulation 32(3)(b). The scope and content of Art. 22 (in conjunction with Art. 21) has been addressed by only a few tribunals. For instance, in Sempra v Argentina, the Claimant requested an order for provisional measures from the Tribunal following an injunction by an Argentinian court against one of the Claimant’s witnesses, which had instructed the witness not to present any testimony before any ICSID tribunal.6 The Tribunal held that Arts. 21 and 22 accorded immunity from legal process to witnesses for purposes of arbitral proceedings ‘irrespectively of their nationality.’7 Accordingly, the Tribunal decided that Argentina must not take any actions, which could prevent the witness of Argentinian nationality from providing testimony in the pending ICSID proceedings.8 In Libananco v Turkey, the Claimant complained that the Turkish authorities were holding Libananco’s legal representative and potential witnesses under surveillance and that there had been interception of the email communications of Libananco’s counsel in the arbitration.9 The Tribunal recognized that the allegations affected the immunities accorded to parties, their counsel, and witnesses under Arts. 21 and 22. The Tribunal pointed out that respect for the Tribunal itself was also implicated.10 In order to facilitate the application of Arts. 21 and 22, the Tribunal called upon the Claimant to provide the Respondent with a list of persons to whom the Claimant considered that Art. 22 2 Tradex v Albania, Award (29 April 1999) para 26. 3 Funnekotter and others v Zimbabwe (registered 15 April 2005). 4 ‘France Denies Visa to Zim’s Attorney-General’ (Zim Online, 19 December 2006) accessed 10 January 2021. 5 Rudolf Bernhardt, ‘Article 103’ in Bruno Simma (ed), The Charter of the United Nations: A Commentary vol 2 (3rd edn, OUP 2012) 2110, 2124. 6 Sempra v Argentina, Award (28 September 2007) paras 34, 37. 7 ibid para 37 (quoting an Order of 16 January 2006, para 5). 8 ibid (quoting an Order of 16 January 2006, para 7(3)). 9 Libananco v Turkey, Decision on Preliminary Issues (23 June 2008) para 72. 10 ibid para 78.

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applied.11 In any event, the Tribunal held that the escrow agent appointed by the Claimant, but receiving instructions from the Tribunal on matters related to the holding of share certificates, enjoys immunity under Art. 22 concerning any matter related to the holding of the share certificates, ‘although the present somewhat special state of affairs was not expressly in the contemplation of the drafters of the ICSID Convention.’12 In Caratube v Kazakhstan, the Claimant asked the Tribunal to issue an order granting immunity from legal process to the Claimant’s participants, witnesses and experts, whereas the Respondent objected to this request.13 In response, the Tribunal emphasized that ‘[t]he immunity granted by Art. 21 and 22 is applicable without a specific order of an ICSID Tribunal.’14 In Cambodia Power v Cambodia, the Tribunal rejected the Claimant’s requests to exclude witness testimony given by a former consultant to the Claimant; with reference to Arts. 21 and 22, the Tribunal held that the Claimant is ‘restrained from taking any action in any court against [the witness] personally in relation to his involvement and continuing involvement in these proceedings.’15 In Teinver v Argentina, the Claimants complained that a criminal investigation by Argentina into a funding agreement concluded between the Claimants and a third-party funder violated the Claimants’ immunities under Art. 22.16 In contrast, Argentina argued that the criminal investigation only related to the funding agreement, which did not form part of the arbitral proceedings and was not covered by the immunities under Art. 22.17 Holding that it must focus on the effect that the criminal investigation may have on the Claimants’ right to pursue arbitration, the Tribunal found that Argentina’s conduct had no effect on the Claimants’ representatives and the thirdparty funder’s ability or willingness to fund the Claimants.18 Moreover, distinguishing Libananco v Turkey, where the Tribunal had held that the escrow agent enjoyed immunity under Art. 22 (see para. 11 supra), the Tribunal concluded that it ‘[was] not . . . persuaded that [the third-party funder] falls within the scope of the immunity afforded by Article 22.’19 In Ipek v Turkey, the Claimant requested an order by the Tribunal demanding the cessation of criminal proceedings by Turkish authorities against the party representative and owner of Ipek Investment, and witnesses in the arbitral proceedings.20 The Claimant also argued that Turkish authorities were threatening and harassing the owner of Ipek Investment and his family, and that one imprisoned family member, who was also a witness for the arbitral proceedings, could not access proper legal

11 ibid para 82 (quoting an Order of 29 February 2008, para 1.1.5). 12 ibid para 65 (‘. . . the escrow agent will share in the immunities accorded by Article 22 of the Convention (read together with Article 21) in respect of any matter connected with the holding of the share certificates’). 13 Caratube v Kazakhstan, Award (5 June 2012) paras 59, 61. 14 ibid para 62 (quoting an Order of 19 October 2010, para 5.1). 15 Cambodia Power v Cambodia, Decision on Application to Exclude Witness Statement and Derivative Evidence (14 February 2012) paras 2, 5. 16 Teinver v Argentina, Decision on Provisional Measures (8 April 2016) para 215. 17 ibid para 215. 18 ibid paras 217–219. 19 ibid para 220. 20 Ipek v Turkey, Procedural Order No 5 (19 September 2019) paras 1, 31.

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representation.21 In that regard the Tribunal held that Art. 22 grants immunity from legal process to witnesses with respect to acts performed by them in that capacity.22 Thus, the imprisoned family member must be allowed to prepare and provide evidence to the arbitral tribunal.23 This includes confidential access to lawyers in order to review his evidence for the arbitral proceedings and the presentation of oral evidence in some form, for instance by remote video link.24

21 ibid paras 1, 71–72. 23 ibid para 76.

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22 ibid para 74. 24 ibid para 77.

Article 23 (1) The archives of the Centre shall be inviolable, wherever they may be. (2) With regard to its official communications, the Centre shall be accorded by each Contracting State treatment not less favourable than that accorded to other international organizations.

OUTLINE 1. Archives 2. Official Communications

Paragraphs 1–4 5–6

1. Archives All drafts leading to the Convention provided for the inviolability of the Centre’s archives (History, Vol. I, pp. 100, 102). The provision elicited little discussion (History, Vol. II, p. 391). The phrase ‘wherever they may be’ was added at a later stage (ibid., pp. 743–744). Mr. Broches explained that the inviolability of archives was entirely separate from the question of information and publication (ibid., p. 743). Art. 23(1) is closely parallel to Art. II, Sec. 4 of the Convention on the Privileges and Immunities of the United Nations1 and to Art. III, Sec. 6 of the Convention on the Privileges and Immunities of the Specialized Agencies.2 Art. 23(1) does not provide for a waiver of immunity, but neither does it impose an obligation of secrecy. The Centre keeps lists, registers, and archives (see Art. 11, paras. 7 and 8). It disseminates information in a variety of ways (see Art. 1, para. 5). It publishes awards, other decisions, and information about cases within the confines of Art. 48(5) and of the Arbitration Rules (see Art. 48, paras. 127–155). There are no known incidents concerning the inviolability of the Centre’s archives.

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2. Official Communications The earlier drafts to the Convention provided that the official communications of the Centre would be accorded the same treatment by each Contracting State as the official communications of other Contracting States (History, Vol. I, p. 102). This is also the solution adopted in Art. III, Sec. 9 of the Convention on the Privileges and Immunities of the United Nations and in Art. IV, Sec. 11 of the Convention on the Privileges and

1 Convention on the Privileges and Immunities of the United Nations (adopted 13 February 1946, entered into force 17 September 1946) 1 UNTS 15. See also Gian L Burci, ‘Inviolability of Archives (Article II Section 4 General Convention)’ in August Reinisch (ed), The Conventions on the Privileges and Immunities of the United Nations and Its Specialized Agencies: A Commentary (OUP 2016) 157. 2 Convention on the Privileges and Immunities of the Specialized Agencies (adopted 21 November 1947, entered into force 2 December 1948) 33 UNTS 261. See also Gian L Burci, ‘Inviolability of Archives (Article III Section 6 Specialized Agencies Convention)’ in Reinisch (n 1) 179.

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Immunities of the Specialized Agencies (see para. 2 supra).3 After little debate, the reference to official communications of other States was changed to those of other international organizations (History, Vol. II, pp. 389–390, 391, 666, 743, 755, 936). A suggestion to include a reference to documents in transit or to the transfer of documents was not successful (ibid., p. 744). Art. 23(2) covers such issues as priority of transmission, transmission rates, and taxes as well as freedom from censorship and interception.4 It was drafted before the invention of facsimile transmission and electronic mail.

3 See also Peter Bachmayer, ‘Facilities in Respect of Communications (Article III Section 9 General Convention)’ in Reinisch (n 1) 245. 4 See eg Convention on the Privileges and Immunities of the United Nations (n 1) Art. III, s 9 (‘The United Nations shall enjoy in the territory of each Member for its official communications treatment not less favourable than that accorded by the Government of that Member to any other Government including its diplomatic mission in the matter of priorities, rates and taxes on mails, cables, telegrams, radiograms, telephotos, telephone and other communications; and press rates for information to the press and radio. No censorship shall be applied to the official correspondence and other official communications of the United Nations’).

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Article 24 (1) The Centre, its assets, property and income, and its operations and transactions authorized by this Convention shall be exempt from all taxation and customs duties. The Centre shall also be exempt from liability for the collection or payment of any taxes or customs duties. (2) Except in the case of local nationals, no tax shall be levied on or in respect of expense allowances paid by the Centre to the Chairman or members of the Administrative Council, or on or in respect of salaries, expense allowances or other emoluments paid by the Centre to officials or employees of the Secretariat. (3) No tax shall be levied on or in respect of fees or expense allowances received by persons acting as conciliators, or arbitrators, or members of a Committee appointed pursuant to paragraph (3) of Article 52, in proceedings under this Convention, if the sole jurisdictional basis for such tax is the location of the Centre or the place where such proceedings are conducted or the place where such fees or allowances are paid.

OUTLINE 1. 2. 3. 4.

Introduction The Centre Persons Permanently Associated with the Centre’s Work Conciliators, Arbitrators, and Members of ad hoc Committees

Paragraphs 1 2 3–4 5–6

1. Introduction Art. 24 deals with the exemption from taxation. Para. 1 covers the Centre itself. Para. 2 covers persons who are permanently associated with the Centre’s work. These are the Chairman, the members of the Administrative Council, and officials and employees of the Secretariat. Para. 3 covers conciliators, arbitrators, and members of ad hoc committees. Parties, agents, counsel, advocates, witnesses, and experts enjoy no exemption from taxation.

1

2. The Centre The text of Art. 24(1) was contained in all drafts to the Convention and underwent almost no change (History, Vol. I, p. 104). It was copied from the parallel provisions of the World Bank’s and the International Monetary Fund’s Articles of Agreement1 1 Articles of Agreement of the International Bank for Reconstruction and Development (adopted and entered into force 27 December 1945) 2 UNTS 134, Art. VII, s 9(a); Articles of Agreement of the International Monetary Fund (adopted and entered into force 27 December 1945) 2 UNTS 40, Art. IX, s 9(a). The provisions on tax exemptions in the Convention on the Privileges and Immunities of the United Nations (adopted 13 February 1946, entered into force 17 September 1946) 1 UNTS 15, Art. II, s 7 and in the Convention on the Privileges and Immunities of the Specialized Agencies (adopted 21 November 1947, entered into force 2 December 1948) 33 UNTS 261, Art. III, s 9, are drafted differently.

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(History, Vol. II, pp. 389, 744–745) and corresponds to the tax exemptions usually granted to international organizations.2 There was some debate about local taxes or rates which cover actual services (ibid., pp. 390, 666–667, 744). The latter are often not included in the tax exemption.3 The reference to ‘operations and transactions’ was explained by the fact that the Centre might want to enter into various contracts (ibid., pp. 392, 744–745). The exemption from the collection of taxes stipulated in the second sentence of para. 1 was explained by the practice of countries to impose the liability for withholding taxes from salaries on employers (ibid., pp. 745–746).

3. Persons Permanently Associated with the Centre’s Work 3

4

A tax exemption for persons associated with the Centre’s work on a permanent basis was contained in all drafts of the Convention (History, Vol. I, p. 106). The earlier drafts still referred to salaries and emoluments of the Chairman, the members of the Administrative Council and officials or employees of the Secretariat. This led to queries concerning an apparent contradiction with the provision excluding a remuneration from the Centre for the Chairman and members of the Administrative Council (Art. 8) (History, Vol. II, pp. 254, 319–320, 389, 481–482, 491, 715). As a consequence, the tax exemption of these persons was restricted to expense allowances. There was also debate about taxation in the countries of the nationality of the persons concerned. It was pointed out that the provision should be interpreted in the same way as the corresponding Articles in the Articles of Agreement of the World Bank4 and of the International Monetary Fund,5 implying that staff might be liable to taxes in their countries of nationality (see para. 2 supra) (History, Vol. II, pp. 390–392, 667, 746, 755). The ‘officials or employees of the Secretariat’ include the Secretary-General and the Deputy Secretaries-General. Their exemption from income tax generally corresponds to the usual tax treatment of staff members of international organizations.6 However, Art. 24(2) incorporates an exception to the income tax exemption for ‘local nationals.’ Accordingly, US staff of the Secretariat are subject to local income tax on their salaries and thus, like other employees of the World Bank Group, they receive a tax allowance to reimburse them for the payment of local income taxes.7 2 See Rutsel SJ Martha, ‘Article II Sections 7–8 General Convention’ in August Reinisch (ed), The Conventions on the Privileges and Immunities of the United Nations and Its Specialized Agencies: A Commentary (OUP 2016) 219. 3 See eg Convention on the Privileges and Immunities of the United Nations (n 1) Art. II, s 7(a) (‘. . . it is understood, however, that the United Nations will not claim exemption from taxes which are, in fact, no more than charges for public utility services’). 4 Articles of Agreement of the International Bank for Reconstruction and Development (n 1) Art. VII, s 9(b). 5 Articles of Agreement of the International Monetary Fund (n 1) Art. IX, s 9(b). 6 See Rutsel SJ Martha, Tax Treatment of International Civil Servants (Martinus Nijhoff 2010) 91–116. 7 See ibid 136. See also ‘By-Laws of the International Bank for Reconstruction and Development (as approved by the Board of Governors at the First Annual Meeting)’ in International Bank for Reconstruction and Development (IBRD), First Annual Meeting of the Board of Governors for International Bank for Reconstruction and Development: Proceedings and Related Documents (IBRD 1946) 101, s 14(b) which provides: Pending the necessary action being taken by members to exempt from national taxation salaries and allowances paid out of the budget of the Bank, the Governors and the Executive Directors, and their Alternates, the President, and the staff members shall be reimbursed by the Bank for the taxes which they are required to pay on such salaries and allowances. In computing the amount of tax adjustment to be made with respect to any individual, it shall be presumed for the purposes of the computation that the income received from the Bank is his total income. All salary scales and expense allowances prescribed by this Section are stated as net on the above basis.

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4. Conciliators, Arbitrators, and Members of ad hoc Committees The essence of what later became Art. 24(3) was contained in all drafts to the Convention (History, Vol. I, pp. 108, 110). It was repeatedly emphasized that this provision does not confer a tax exemption, but merely seeks to avoid taxation based solely on the location of the Centre, the place of proceedings, or the place of payment. Liability for taxation in the country of the person’s regular fiscal domicile would not be affected (History, Vol. II, pp. 147–148, 389–392, 652, 746, 756). Only conciliators, arbitrators, and members of ad hoc committees are covered by Art. 24(3). Counsel to parties, witnesses, and experts appearing in proceedings do not benefit from this provision. Art. 24(3) only extends to fees and expense allowances under Art. 60. The provision does not affect the tax liability of conciliators, arbitrators and members of ad hoc committees in their countries of residence. Therefore, Art. 24(3) does not create a general tax exemption, but merely restricts the geographical basis for taxation.

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Article 25 (1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally. (2) “National of another Contracting State” means: (a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute; and (b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention. (3) Consent by a constituent subdivision or agency of a Contracting State shall require the approval of that State unless that State notifies the Centre that no such approval is required. (4) Any Contracting State may, at the time of ratification, acceptance or approval of this Convention or at any time thereafter, notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. The Secretary-General shall forthwith transmit such notification to all Contracting States. Such notification shall not constitute the consent required by paragraph (1).

OUTLINE I. INTRODUCTION A. General B. The Additional Facility II. INTERPRETATION A. ‘(1) The jurisdiction of the Centre . . .’ 1. Jurisdiction, Competence, and Admissibility 2. Scope of Jurisdiction 80

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Paragraphs 1–19 1–11 12–19 20–1507 20–67 20–26 27–43

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a) Conciliation or Arbitration b) Fact-Finding 3. The Relevant Date for the Determination of Jurisdiction a) Registration of the Request as the Critical Date b) Impact of Subsequent Events on Existing Jurisdiction c) Subsequent Compliance with Jurisdictional Requirements B. ‘. . . shall extend to any legal dispute . . .’ 1. General Considerations 2. The Existence of a Dispute a) Need for Prior Communication b) Practical Relevance of the Parties’ Disagreement c) Continuing Existence of the Dispute 3. The Time of the Dispute 4. The Legal Nature of the Dispute a) Legal and Non-Legal Disputes b) The Justiciability of Disputes c) Questions of Fact d) Non-Legal Means of Dispute Settlement C. ‘. . . arising directly . . .’ 1. Directness as an Independent Jurisdictional Requirement 2. General Meaning under the Convention a) Travaux Préparatoires, Context, State Practice b) Directness of Dispute v Directness of Investment c) Connection Between Dispute and Investment 3. The General Unity of the Investment 4. Targeted v General Measures Affecting Investments D. ‘. . . out of an investment, . . .’ 1. Drafting History 2. The Dual Test for the Existence of an Investment a) The Objective Nature of the Notion of Investment b) Notions of Investment in Instruments of Consent (i) Contracts Relating to Investments (ii) Definitions of Investment in National Legislation (iii) Definitions of Investment in Treaties 3. Criteria for the Existence of an Investment in the Sense of Art. 25(1) a) Doctrinal Approaches b) Concretization in Arbitral Jurisprudence: The Salini Test c) Elements of the Salini Test in Arbitral Practice (i) Substantial Contribution (ii) Duration (iii) Risk (iv) Contribution to Host State Development d) Evaluation of the Salini Test 4. Types of Investments a) (Tangible and Intangible) Property Rights and Rights under Contracts

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81 27–37 38–43 44–67 46–48 49–54 55–67 68–112 68–70 71–78 72–73 74–76 77–78 79–80 81–112 82–95 96–101 102–103 104–112 113–161 113–116 117–132 117–119 120–126 127–132 133–151 152–161 162–496 163–176 177–225 178–186 187–225 188–200 201–212 213–225 226–280 227–234 235–241 242–269 243–247 248–253 254–257 258–269 270–280 281–305 283

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schreuer’s commentary on the icsid convention b) Shareholdings c) Public Law Instruments and Government Contracts d) Sale of Goods and Other Purely Commercial Transactions Distinguished e) Financial Transactions and Financial Instruments f) Arbitral Awards as Investments 5. Forms of Making an Investment a) Split Ownership Structures (i) Nominal Ownership (ii) Beneficial Ownership b) Split between Ownership and Control c) Indirect Investments (i) Indirect Shareholdings as Investments (ii) Company Assets as Indirect Investments d) Passive v Active Investments e) Succession and Assignment 6. Temporal and Territorial Aspects of the Investment a) Pre-Investment Activities b) Past Investments c) Origin of the Investment d) Investment in the Host State’s Territory (i) Financial Instruments (ii) Transborder Performance of Contracts (iii) Transboundary Harm (iv) Conclusion 7. Legality of the Investment a) Legality of the Investment in Contract-Based Disputes b) Legality of the Investment in Treaty-Based Disputes (i) Domestic Law and Existence of a Right or Asset (ii) Legality Clauses in Investment Treaties (iii) Compliance with Domestic Law without Legality Clauses c) Legality, Good Faith, and International or Transnational Public Policy as Implied Conditions 8. The Additional Facility a) Conciliation and Arbitration Arising out of an Investment b) Conciliation and Arbitration in the Absence of an Investment c) Fact-Finding E. ‘. . . between a Contracting State . . .’ 1. Participation in the Convention 2. Contingent Submission 3. The Additional Facility 4. Ad hoc Arbitration F. ‘. . . (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) . . .’ 1. General Meaning and Function a) Conferral of Partial International Legal Personality

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284–290 291 292–297 298–302 303–305 306–380 307–320 309–315 316–320 321–330 331–361 334–342 343–361 362–368 369–380 381–437 382–397 398–401 402–414 415–437 419–428 429–434 435 436–437 438–479 439–446 447–468 448–451 452–464 465–468 469–479 480–496 481–484 485–494 495–496 497–522 497–509 510–512 513–518 519–522 523–571 523–534 523–524

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b) Designation Distinguished from Attribution c) Designation Distinguished from Consent d) Designation Distinguished from Territorial Scope of Application 2. Negotiating History 3. Constituent Subdivision or Agency 4. Designation to the Centre a) Purposes of Designation b) Author and Intention to Designate c) Form of Designation d) Communication of the Designation to the Centre e) Time of Designation f) Modification and Withdrawal of Designation G. ‘. . . and a national of another Contracting State, . . .’ 1. General Significance 2. The Private Character of the Investor 3. Multi-Party Proceedings 4. The Nationality of the Investor 5. Participation of the Investor’s State of Nationality in the Convention 6. Identification of the Investor’s State of Nationality 7. Contingent Submission 8. The Additional Facility H. ‘. . . which the parties to the dispute . . .’ 1. Identity of Consenting and Disputing Parties: Principle and Exceptions 2. The Identification of the Party on the Host State’s Side a) State Succession b) Constituent Subdivisions or Agencies 3. The Identification of the Party on the Investor’s Side a) Scope of Consent Ratione Personae b) Claims on Behalf of Third Parties (Representative and Derivative Claims) c) (Singular and Universal) Succession (i) Succession in Contract-Based Disputes (ii) Succession in Disputes Based on Domestic Legislation and Treaty (a) Disputes Based on Domestic Legislation (b) Treaty-Based Disputes (c) Limitations to Succession in Treaty-Based Disputes (d) Assignment of Treaty Claims (e) Concluding Remarks (iii) Succession after the Institution of Proceedings d) Insolvency

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83 525–529 530–533 534 535–540 541–548 549–571 549–551 552–553 554–557 558–563 564–570 571 572–615 572–573 574–588 589–597 598 599–601 602–610 611–613 614–615 616–758 616–621 622–642 622–634 635–642 643–747 643–658 659–678 679–744 681–696 697–728 698–700 701–706 707–715 716–726 727–728 729–744 745–747

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schreuer’s commentary on the icsid convention 4. Subrogation I. ‘. . . consent in writing to submit to the Centre.’ 1. General Significance 2. Consent in Writing 3. Consent through Direct Agreement between the Parties a) Consent for Future and for Existing Disputes b) Consent Based on an Investment Application c) Consent by Reference to Another Legal Instrument 4. Consent through Host State Legislation a) Binding Offer of Consent by the Host State b) Prospect of Future Consent c) Acceptance by the Investor 5. Consent through Bilateral Investment Treaties a) Binding Offer of Consent by the Host State b) Undertaking to Give Consent c) Prospect of Future Consent d) Consent to Different Forms of Arbitration e) Acceptance by the Investor 6. Consent through Multilateral Treaties a) NAFTA b) USMCA c) Energy Charter Treaty d) Other Regional Treaties e) Non-Binding References to ICSID 7. The Temporal Elements of Consent a) Time of Consent b) Contingent Expression of Consent c) Relevance of the Time of Consent d) Consent at the Time of the Institution of Proceedings e) Consent after the Institution of Proceedings: Forum Prorogatum f) Events and Disputes Prior to Consent g) Time Limits Attached to Consent 8. Limitations on Consent a) Limitations on Consent in Direct Agreements b) Limitations on Consent in Legislation c) Limitations on Consent in Treaties 9. Procedural Conditions to Consent a) Waiting Periods for Amicable Settlement b) Attempt at Settlement in Domestic Courts c) Waiver Clauses 10. Consecutive Instruments Providing for Consent a) Successive Contracts b) Successive Legislation c) Successive Treaties

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748–758 759–1056 759–763 764–766 767–779 767–774 775–776 777–779 780–824 783–797 798–813 814–824 825–862 829–832 833–839 840–842 843–849 850–862 863–877 864–867 868–870 871 872–874 875–877 878–947 880–883 884–889 890–893 894–900 901–920 921–943 944–947 948–980 951–955 956–963 964–980 981–998 982–989 990–996 997–998 999–1020 999–1010 1011 1012–1020

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J.

K. L.

M.

11. The Applicability of MFN Clauses to Consent a) The Wording of MFN Clauses b) MFN Status and Procedural Conditions to Consent c) MFN Status and the Existence of Consent 12. The Interpretation of Consent a) The Law Applicable to the Interpretation of Consent b) Restrictive or Extensive Interpretation of Consent ‘When the parties have given their consent, no party may withdraw its consent unilaterally.’ 1. The Irrevocability of Consent 2. Prohibition of Indirect Withdrawal of Consent a) Notification under Art. 25(4) b) Denunciation of the Convention c) Withdrawal of Designation or Approval in Respect of a Constituent Subdivision or Agency d) Withdrawal of Investment Authorization e) Repeal of National Legislation Providing for Consent f) Termination of a Treaty Providing for Consent g) Invalidity or Termination of the Investment Agreement Containing Consent h) Incapacity to Give Consent i) Conferral of Host State Nationality j) Denial of Benefits ‘(2) “National of another Contracting State” means:’ ‘(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute;’ 1. Determination of Nationality a) Applicable Law b) Certificate of Nationality c) Agreement on Nationality 2. Nationality of a Contracting State 3. No Nationality of the Host State 4. Critical Dates ‘and (b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration . . .’ 1. Juridical Persons 2. Determination of Corporate Nationality

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85 1021–1035 1022–1025 1026–1031 1032–1035 1036–1056 1036–1044 1045–1056 1057–1110 1057–1068 1069–1110 1069–1071 1072–1075 1076–1077 1078–1081 1082–1084 1085–1089 1090–1095 1096–1104 1105–1106 1107–1110 1111–1115

1116–1170 1117–1140 1117–1126 1127–1137 1138–1140 1141–1145 1146–1160 1161–1170

1171–1261 1172–1179 1180–1229

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schreuer’s commentary on the icsid convention a) Incorporation, Seat, or Control 1180–1195 b) Agreement on Nationality 1196–1205 c) Legislation and Treaties 1206–1229 3. Nationality of a Contracting State 1230–1241 4. Critical Date 1242–1261 N. ‘. . . and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.’ 1262–1445 1. General Significance 1262–1265 2. Host State Nationality 1266–1269 3. Agreement to Treat the Investor as a National of Another Contracting State 1270–1326 a) Form of Agreement 1270–1277 b) Implicit Agreement 1278–1302 c) Identification of the Other Contracting State 1303–1318 d) Legislation and Treaties 1319–1326 4. Foreign Control 1327–1408 a) Objective Requirement of Foreign Control 1327–1347 b) Nationality of Foreign Control 1348–1369 c) Indirect Control 1370–1380 d) Form and Extent of Control 1381–1408 5. Critical Dates 1409–1438 6. Consequences of Agreement on Nationality 1439–1445 O. ‘(3) Consent by a constituent subdivision or agency of a Contracting State shall require the approval of that State unless that State notifies the Centre that no such approval is required.’ 1446–1471 1. Art. 25(3) as a Jurisdictional Requirement 1446–1449 2. Approval of Consent 1450–1464 a) Need for Approval 1450–1456 b) Form and Validity of Approval 1457–1461 c) Time of Approval 1462–1464 3. Waiver of Approval 1465–1468 4. Consequences of Approval and Waiver for the Host State 1469–1471 P. ‘(4) Any Contracting State may, at the time of ratification, acceptance or approval of this Convention or at any time thereafter, notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. The Secretary-General shall forthwith transmit such notification to all Contracting States. Such notification shall not constitute the consent required by paragraph (1).’ 1472–1507 1. Drafting History 1473–1481 2. State Practice under Art. 25(4) 1482–1486

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3. Effect of Notifications on the Jurisdiction of the Centre a) Cases Suggesting Direct Jurisdictional Consequences b) Cases Rejecting Direct Jurisdictional Consequences c) Interaction between Notifications and Consent 4. Concluding Remarks

87 1487–1506 1488–1494 1495–1500 1501–1505 1506–1507

BIBLIOGRAPHY Abi-Saab, George, ‘The Concept of Investment in the ICSID Convention’ in Mohamed Abdel Raouf, Philippe Leboulanger and Nassib G Ziadé (eds), Festschrift Ahmed Sadek ElKosheri: From the Arab World to the Globalization of International Law and Arbitration (Wolters Kluwer 2015) 239 Acconci, Pia, ‘Determining the Internationally Relevant Link between State and Corporate Investor’ (2004) 5 The Journal of World Investment & Trade 139 ‘Most-Favoured-Nation Treatment’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 363 Alexandrov, Stanimir A, ‘The “Baby Boom” of Treaty-Based Arbitrations and the Jurisdiction of ICSID Tribunals: Shareholders as “Investors” and Jurisdiction Ratione Temporis’ (2005) 4 The Law & Practice of International Courts and Tribunals 19 ‘The “Baby Boom” of Treaty-Based Arbitrations and the Jurisdiction of ICSID Tribunals: Shareholders as “Investors” under Investment Treaties’ (2005) 6 The Journal of World Investment & Trade 387 Amerasinghe, CF, ‘How to Use the International Centre for Settlement of Investment Disputes by Reference to Its Model Clauses’ (1973) 13 Indian Journal of International Law 530 ‘Submissions to the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1973/1974) 5 Journal of Maritime Law and Commerce 211 ‘Jurisdiction Ratione Personae under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1974/1975) 47 The British Yearbook of International Law 227 ‘The Jurisdiction of the International Centre for the Settlement of Investment Disputes’ (1979) 19 Indian Journal of International Law 166 ‘Interpretation of Article 25(2)(b) of the ICSID Convention’ in Richard B Lillich and Charles N Brower (eds), International Arbitration in the 21st Century: Towards Judicialization and Uniformity? (Transnational Publishers 1994) 223 Andrade Cadena, Xavier and Mantañes, Marco Tulio, ‘Introductory Note to Ecuador’s Notice under ICSID Article 25(4)’ (2008) 47 International Legal Materials 154 Andreeva, Yulia, ‘Interpreting Consent to Arbitration as a Unilateral Act of State: A Case Against Conventions’ (2011) 27 Arbitration International 129 Asouzu, Amazu A, ‘A Review and Critique of Arbitral Awards on Articles 25(2)(b) of the ICSID Convention’ (2002) 3 The Journal of World Investment 397 Badia, Albert, Piercing the Veil of State Enterprises in International Arbitration (Wolters Kluwer 2014) Banifatemi, Yas and Jacomy, Emmanuel, ‘Compétence et recevabilité dans le droit de l’arbitrage en matière d’investissements’ in Charles Leben (ed), Droit international des investissements et de l’arbitrage transnational (Pedone 2015) 773 Baumgartner, Jorun, Treaty Shopping in International Investment Law (OUP 2016)

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‘The Significance of the Notion of Dispute and Its Foreseeability in an Investment Claim Involving a Corporate Restructuring’ (2017) 18 The Journal of World Investment & Trade 201 Ben Hamida, Walid, ‘The Mihaly v Sri Lanka Case: Some Thoughts Relating to the Status of PreInvestment Expenditures’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 47 ‘Two Nebulous ICSID Features: The Notion of Investment and the Scope of Annulment Control: Ad Hoc Committee’s Decision in Patrick Mitchell v Democratic Republic of Congo’ (2007) 24 Journal of International Arbitration 287 ‘MFN and Procedural Rights: Solutions from WTO Experience?’ in Todd Weiler (ed), Investment Treaty Arbitration and International Law vol 1 (Juris 2008) 231 Bentolila, Dolores, ‘Shareholders’ Action to Claim for Indirect Damages in ICSID Arbitration’ (2010) 2(1) Trade, Law and Development 87 Berman, Frank, ‘The Relevance of the Law on Diplomatic Protection in Investment Arbitration’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 67 Bernardini, Piero, ‘Nationality Requirements under BITs and Related Case Law’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 17 Bischoff, Jan Asmus and Happ, Richard, ‘The Notion of Investment’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/Nomos 2015) 495 Bjorklund, Andrea K, ‘Waiver of Local Remedies and Limitation Periods’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Wolters Kluwer 2016) 237 Bliesener, DH, ‘La compétence du CIRDI dans la pratique arbitrale’ (1991) 68 Revue de Droit International et de Droit Comparé 95 Born, Gary and Šćekić, Marija, ‘Pre-Arbitration Procedural Requirements “A Dismal Swamp”’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 227 Botchway, Francis F, ‘Consent to Arbitration: African States’ Practice’ (2019) 34 ICSID Review 278 Bottini, Gabriel, ‘Indirect Claims under the ICSID Convention’ (2008) 29 (3) University of Pennsylvania Journal of International Law 563 Admissibility of Shareholder Claims under Investment Treaties (CUP 2020) Broches, Aron, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972-II) 136 Recueil des Cours 331 ‘The “Additional Facility” of the International Centre for Settlement of Investment Disputes (ICSID)’ (1979) 4 Yearbook Commercial Arbitration 373 ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 Yearbook Commercial Arbitration 627 Brower, Charles N and Wong, Jarrod, ‘General Valuation Principles: The Case of Santa Elena’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Investment Treaties and Customary International Law (Cameron May 2005) 747 Burgstaller, Markus, ‘Nationality of Corporate Investors and International Claims against the Investor’s Own State’ (2006) 7 The Journal of World Investment & Trade 857 Burgstaller, Markus and Zarowna, Agnieszka, ‘Effects of Disposal of Investments on Claims in Investment Arbitration’ (2019) 36 Journal of International Arbitration 231

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Carlevaris, Andrea, ‘The Conformity of Investments with the Law of the Host State and the Jurisdiction of International Tribunals’ (2008) 9 The Journal of World Investment & Trade 35 Caron, David, ‘The Interpretation of National Foreign Investment Laws as Unilateral Acts under International Law’ in Mahnoush H Arsanjani and others (eds), Looking to the Future: Essays on International Law in Honor of W Michael Reisman (Martinus Nijhoff 2011) 649 Castro de Figueiredo, Roberto, ‘ICSID and Non-Foreign Investment Disputes’ (2007) 4(5) Transnational Dispute Management ‘The Notion of Investment and Economic Development under the ICSID Convention’ in Crina Baltag (ed), ICSID Convention after 50 Years: Unsettled Issues (Kluwer Law International 2017) 75 Chaisse, Julien and Li, Lisa Zhuoyue, ‘Shareholder Protection Reloaded: Redesigning the Matrix of Shareholder Claims for Reflective Loss’ (2016) 52 Stanford Journal of International Law 51 Chatterjee, C, ‘When Pre-Investment or Development Costs May or May Not Be Regarded as Part of Investment under Article 25(1) of the ICSID Convention’ (2003) 4 The Journal of World Investment & Trade 909 Cheng, Tai-Heng, State Succession and Commercial Obligations (Transnational Publishers 2006) Clasmeier, Maximilian, Arbitral Awards as Investments – Treaty Interpretation and Dynamics of International Investment Law (Wolters Kluwer 2017) Cole, Tony, The Structure of Investment Arbitration (Routledge 2013) Crawford, James, The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries (CUP 2002) De Brabandere, Eric, ‘“Good Faith”, “Abuse of Process” and the Initiation of Investment Treaty Claims’ (2012) 3 Journal of International Dispute Settlement 609 Dekastros, Michail, ‘Portfolio Investment: Reconceptualising the Notion of Investment under the ICSID Convention’ (2013) 14 The Journal of World Investment & Trade 286 Delaume, Georges R, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 Journal du Droit International 775 ‘ICSID Arbitration: Practical Considerations’ (1984) 1 Journal of International Arbitration 101 Transnational Contracts, Applicable Law and Settlement of Disputes (Oceana 1990) ch XV ‘How to Draft an ICSID Arbitration Clause’ (1992) 7 ICSID Review 168 Diel-Gligor, Katharina and Hennecke, Rudolf, ‘Investment in Accordance with the Law’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/ Nomos 2015) 566 Dolzer, Rudolf, ‘The Notion of Investment in Recent Practice’ in Steve Charnovitz, Debra P Steger and Peter van den Bossche (eds), Law in the Service of Human Dignity: Essays in Honour of Florentino Feliciano (CUP 2005) 261 Dolzer, Rudolf and Stevens, Margrete, Bilateral Investment Treaties (Martinus Nijhoff 1995) Douglas, Zachary, ‘The Plea of Illegality in Investment Treaty Arbitration’ (2014) 29 ICSID Review 155 Duchesne, Matthew S, ‘The Continuous-Nationality-of-Claims Principle: Its Historical Development and Current Relevance to Investor–State Investment Disputes’ (2004) 36 George Washington International Law Review 783 Dumberry, Patrick, ‘The Legal Standing of Shareholders before Arbitral Tribunals: Has Any Rule of Customary International Law Crystallised?’ (2010) 18 Michigan State Journal of International Law 353

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‘An Uncharted Question of State Succession: Are New States Automatically Bound by the BITs Concluded by Predecessor States before Independence?’ (2015) 6 Journal of International Dispute Settlement 74 A Guide to State Succession in International Investment Law (Edward Elgar 2018) ‘State Succession to BITs: Analysis of Case Law in the Context of Dissolution and Secession’ (2018) 34 Arbitration International 445 ‘State Succession to BITs in the Context of the Transfer of Territory of Macao to China: Lessons Learned from the Sanum Saga’ (2018) 35 Journal of International Arbitration 239 ‘State Succession to Multilateral Investment Treaties and the ICSID Convention’ (2018) 3 European Investment Law and Arbitration Review 3 Dupont, Pierre-Emmanuel, ‘The Notion of ICSID Investment: Ongoing “Confusion” or “Emerging Synthesis”?’ (2011) 12 The Journal of World Investment & Trade 245 Dupuy, Pierre-Marie, ‘Preconditions to Arbitration and Consent of States to ICSID Jurisdiction’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Wolters Kluwer 2016) 219 Ebert, Björn P, Forum Shopping in International Investment Law: Forum Planning, Forum Enhancement, and Facilitation of Procedure (Mohr Siebeck 2017) Fadlallah, Ibrahim, ‘La notion d’investissement: vers une restriction à la compétence du CIRDI?’ in Gerald Aksen (ed), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC 2005) 259 ‘Are State Entities Liable for the Conduct of their Instrumentalities? ICSID Case Law’ in Emmanuel Gaillard and Jennifer Younan (eds), State Entities in International Arbitration (Juris 2008) 19 Fontanelli, Filippo, Jurisdiction and Admissibility in Investment Arbitration: The Practice and the Theory (Brill 2018) Fortier, L Yves, ‘International Arbitration and the Argentine Cases: An Evaluation of 10 Years of Arbitration – Institutional Aspects’ (2012) 6 World Arbitration & Mediation Review 545 Fry, James D and Repousis, Odysseas G, ‘Intertemporality and International Investment Arbitration: Protecting the Jurisdiction of Established Tribunals’ (2015) 31 Arbitration International 213 Gaillard, Emmanuel, ‘Some Notes on the Drafting of ICSID Arbitration Clauses’ (1988) 3 ICSID Review 136 ‘Investments and Investors Covered by the Energy Charter Treaty’ in Clarisse Ribeiro (ed), Investment Arbitration and the Energy Charter Treaty (JurisNet 2006) 54 ‘Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID Practice’ in Christina Binder and others (eds), International Investment Law for the 21st Century (OUP 2009) 403 Gaillard, Emmanuel and Banifatemi, Yas, ‘The Long March towards a Jurisprudence Constante on the Notion of Investment’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer Law International 2016) 97 Gaillard, Emmanuel and Younan, Jennifer (eds), State Entities in International Arbitration (Juris 2008) Gallagher, Norah, ‘The Requirement for Substantive Nationality’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 27 Gallus, Nick, ‘State Enterprises as Organs of the State and BIT Claims’ (2006) 7 The Journal of World Investment & Trade 761

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The Temporal Scope of Investment Protection Treaties (BIICL 2008) ‘Article 28 of the Vienna Convention on the Law of Treaties and Investment Treaty Decisions’ (2016) 31 ICSID Review 290 Gallus, Nick and Peterson, Luke E, ‘International Investment Treaty Protection of NGOs’ (2006) 22 Arbitration International 527 Goh, Nelson, ‘The Assignment of Investment Treaty Claims: Mapping the Principles’ (2019) 10 Journal of International Dispute Settlement 23 Gouiffès, Laurent and Ordonez, Melissa, ‘Jurisdiction and Admissibility: Are We Closer to a Line in the Sand?’ (2015) 31 Arbitration International 107 Greenwood, Christopher, ‘Reflections on “Most Favoured Nation” Clauses in Bilateral Investment Treaties’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 556 Happ, Richard, ‘The “Foreign Nationality” Requirement and the “Exhaustion of Local Remedies” in Recent ICSID Jurisprudence’ in Rainer Hofmann and Christian J Tams (eds), The International Convention on the Settlement of Investment Disputes (ICSID): Taking Stock after 40 Years (Nomos 2007) 103 Heiskanen, Veijo, ‘Of Capital Import: The Definition of “Investment” in International Investment Law’ in Anne K Hoffmann (ed), Protection of Foreign Investments through Modern Investment Treaty Arbitration – Diversity and Harmonisation (ASA Special Series No 34, May 2010) 51 ‘Ménage à trois? Jurisdiction, Admissibility and Competence in Investment Treaty Arbitration’ (2014) 29 ICSID Review 231 ‘And Others: Mass Claims in ICSID Arbitration’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Wolters Kluwer 2015) 613 Hepburn, Jarrod, ‘In Accordance with Which Host State Laws? Restoring the “Defence” of Investor Illegality in Investment Arbitration’ (2014) 5 Journal of International Dispute Settlement 531 ‘Domestic Investment Statutes in International Law’ (2018) 112 American Journal of International Law 658 Hirsch, Moshe, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Martinus Nijhoff 1993) 41–107 Ho, Jean, ‘Investment Protection under Successive Treaties’ (2017) 32 ICSID Review 58 ‘Passive Investments’ (2020) 35 ICSID Review 523 Hobér, Kaj, ‘State Responsibility and Investment Arbitration’ in Clarisse Reibeiro (ed), Investment Arbitration and the Energy Charter Treaty (JurisNet 2006) 261 ‘State Responsibility and Attribution’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 549 Hornick, Robert N, ‘The Mihaly Arbitration – Pre-Investment Expenditure as a Basis for ICSID Jurisdiction’ (2003) 20 Journal of International Arbitration 189 Horváth, Eniko˝ and Klinkmüller, Severin, ‘The Concept of “Investment” in the Digital Economy: The Case of Social Media Companies’ (2019) 20 The Journal of World Investment & Trade 577 Hwang, Michael, ‘Recent Developments in Defining “Investment”’ (2010) 24 ICSID Review 2 Hwang, Michael and Cheng, Jennifer Fong Lee, ‘Definition of “Investment” – A Voice from the Eye of the Storm’ (2011) 1 Asian Journal of International Law 99 Jagusch, Stephen and Sinclair, Anthony, ‘The Limits of Protection for Investments and Investors under the Energy Charter Treaty’ in Clarisse Ribeiro (ed), Investment Arbitration and the Energy Charter Treaty (JurisNet 2006) 73

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Kabra, Ridhi, ‘Has Abaclat v Argentina Left the ICSID with a “Mass”ive Problem?’ (2015) 31(3) Arbitration International 425 Kirtley, William L, ‘The Transfer of Treaty Claims and Treaty-Shopping in Investor–State Disputes’ (2009) 10 The Journal of World Investment & Trade 427 Kleiner, Caroline and Costamagna, Francesco, ‘Territoriality in Investment Arbitration: The Case of Financial Instruments’ (2018) 9 Journal of International Dispute Settlement 315 Knahr, Christina, ‘Investments “in Accordance with Host State Law”’ in August Reinisch and Christina Knahr (eds), International Investment Law in Context (Eleven International 2008) 27 ‘Investments in the Territory of the Host State’ in Christina Binder and others (eds), International Investment Law for the 21st Century (OUP 2009) 42 ‘The Territorial Nexus between an Investment and the Host State’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/Nomos 2015) 590 Konrad, Sabine, ‘Protection of Investments Owned by States’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/Nomos 2015) 545 Kovar, Robert, ‘La compétence du Centre international pour le règlement des différends relatifs aux investissements’ in Centre de Recherche sur le Droit des Marchés et des Investissements internationaux de la Faculté de Droit de Paris (ed), Investissements étrangers et arbitrage entre Etats et personnes privées: La Convention BIRD du 18 mars 1965 (Pedone 1969) 25 Kriebaum, Ursula, ‘Illegal Investments’ (2010) 4 Austrian Yearbook on International Arbitration 307 Krishan, Devashish, ‘Nationality of Physical Persons’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 57 ‘A Notion of ICSID Investment’ in Todd Weiler (ed), Investment Treaty Arbitration and International Law vol 1 (Juris 2008) 61 Kröll, Stefan and Griebel, Jörn, ‘Protecting Shareholders in Investment Law: To Pierce or Not to Pierce the Veil, That Is the Question!’ (2005) 2 Stockholm International Arbitration Review 93 Kryvoi, Yarik, ‘Piercing the Corporate Veil in International Arbitration’ (2011) 1 Global Business Law Review 169 Kubiatowski, Stephen A, ‘The Case of Elettronica Sicula S.p.A.: Toward Greater Protection of Shareholders’ Rights in Foreign Investments’ (1991) 29 Columbia Journal of Transnational Law 215 Kulick, Andreas, ‘Let’s (Not) (Dis)Agree to Disagree!? Some Thoughts on the “Dispute” Requirement in International Adjudication’ (2020) 19 The Law & Practice of International Courts and Tribunals 79 Kurtz, Jürgen, ‘The Delicate Extension of MFN Treatment to Foreign Investors: Maffezini v Kingdom of Spain’ in Todd Weiler (ed), International Investment Law and Arbitration – Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 523 Laird, Ian, ‘A Distinction Without a Difference? An Examination of the Concepts of Admissibility and Jurisdiction in Salini v Jordan and Methanex v USA’ in Todd Weiler (ed), International Investment Law and Arbitration – Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 201 Lalive, Pierre, ‘The First “World Bank” Arbitration (Holiday Inns v. Morocco) – Some Legal Problems’ (1980) 51 The British Yearbook of International Law 123 (reproduced in (1993) 1 ICSID Reports 645) Lamm, Carolyn B, ‘Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1991) 6 ICSID Review 462

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Lamm, Carolyn B and Cohen Smutny, Abby, ‘The Implementation of ICSID Arbitration Agreements’ (1996) 11 ICSID Review 64 Larsen, Clifford, ‘ICSID Jurisdiction: The Relationship of Contracting States to Sub-States Entities’ in Norbert Horn and Stefan Kröll (eds), Arbitrating Foreign Investment Disputes (Kluwer 2004) 353 Laviec, Jean-Pierre, Protection et promotion des investissements (PUF 1985) 269–286 Legum, Barton, ‘Defining Investment and Investor: Who Is Entitled to Claim?’ (2006) 22 Arbitration International 521 Legum, Barton and Mouawad, Caline, ‘The Meaning of “Investment” in the ICSID Convention’ in Peter HF Bekker, Rudolf Dolzer and Michael Waibel (eds), Making Transnational Law Work in the Global Economy: Essays in Honour of Detlev Vagts (CUP 2010) 326 Llamzon, Aloysius P, Corruption in International Investment Arbitration (OUP 2014) Llamzon, Aloysius P and Sinclair, Anthony, ‘Investor Wrongdoing in Investment Arbitration: Standards Governing Issues of Corruption, Fraud, Misrepresentation and Other Investor Misconduct’ in Albert Jan van den Berg (ed), Legitimacy: Myths, Realities, Challenges (Kluwer Law International 2015) 451 Loncle, Jean-Marc, ‘La qualité d’investisseur dans les décisions CIRDI’ (2005) 6 Revue de Droit des Affaires Internationales 729 ‘La notion d’investissement dans les décisions du CIRDI’ (2006) 3 Affaires Internationales 3 Lorz, Ralph Alexander and Busch, Manuel, ‘Investment in Accordance with the Law – Specifically Corruption’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/Nomos 2015) 577 Manciaux, Sébastien, ‘The Relationships between States and Their Instrumentalities in Investment Arbitration’ in Emmanuel Gaillard and Jennifer Younan (eds), State Entities in International Arbitration (Juris 2008) 195 Markert, Lars, Streitschlichtungsklauseln in Investitionsschutzabkommen: Zur Notwendigkeit der Differenzierung von jurisdiction und admissibility in Investitionsschiedsverfahren (Nomos 2010) Masood, Arshad, ‘Jurisdiction of International Centre for Settlement of Investment Disputes’ (1972) 14 Journal of the Indian Law Institute 119 Mendelson, Maurice, ‘Runaway Train: The “Continuous Nationality” Rule from the PanavezysSaldutiskis Railway Case to Loewen’ in Todd Weiler (ed), International Investment Law and Arbitration – Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 97 ‘The Requirement for Continuous Nationality’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 41 Mengel, Hans-Joachim, ‘Probleme der Zuständigkeit des International Centre for Settlement of Investment Disputes (ICSID)’ (1986) 32 Recht der Internationalen Wirtschaft 941 Mohtashami, Reza and El-Hosseny, Farouk, ‘State-Owned Enterprises as Claimants before ICSID: Is the Broches Test on the Ebb?’ (2016) 3(2) Bahrain Chamber for Dispute Resolution (BCDR) International Arbitration Review 371 Miles, Cameron A, ‘Corruption, Jurisdiction and Admissibility in International Investment Claims’ (2012) 3 Journal of International Dispute Settlement 329 Mistelis, Loukas, ‘Award as an Investment: The Value of an Arbitral Award or the Cost of NonEnforcement’ (2013) 28 ICSID Review 64

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Mitsou, Anna O, ‘Greek Debt Restructuring and Investment Treaty Arbitration: Jurisdictional Stumbling Blocks for Bondholders’ (2016) 33 Journal of International Arbitration 687 Moloo, Rahim and Khachaturian, Alex, ‘The Compliance with the Law Requirement in International Investment Law’ (2011) 34 Fordham International Law Journal 1473 Montanaro, Francesco, ‘Poštová Banka SA and Instrokapital SE v Hellenic Republic – Sovereign Bonds and the Puzzling Definition of “Investment” in International Investmen Law’ (2015) 30 ICSID Review 549 Mortenson, Julian D, ‘The Meaning of “Investment”: ICSID’s Travaux and the Domain of International Investment Law’ (2010) 51 Harvard International Law Journal 257 Mullen, S and Whitsitt, E, ‘ICSID and Legislative Consent to Arbitrate: Questions of Applicable Law’ (2017) 32 ICSID Review 92 Murphy, Sean D, ‘The ELSI Case: An Investment Dispute at the International Court of Justice’ (1991) 16 Yale Journal of International Law 391 Nakajima, Kei, ‘Parallel Universes of Investment Protection? A Divergent Finding on the Definition of Investment in the ICSID Arbitration on Greek Sovereign Debts’ (2016) 15 The Law & Practice of International Courts and Tribunals 472 ‘Beyond Abaclat: Mass Claims in Investment Treaty Arbitration and Regulatory Governance for Sovereign Debt Restructuring’ (2018) 19 The Journal of World Investment & Trade 208 Newcombe, Andrew, ‘Investor Misconduct: Jurisdiction, Admissibility, or Merits?’ in Chester Brown and Kate Miles (eds), Evolution in Investment Treaty Law and Arbitration (CUP 2011) 187 Niggemann, Friedrich, ‘Zuständigkeitsprobleme der Weltbankschiedsgerichtsbarkeit im Licht der bisherigen Schiedsverfahren’ (1985) 5 Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 185 Nolan, Michael D and Sourgens, Frédéric G, ‘Limits of Consent – Arbitration without Privity and Beyond’ in MÁ Fernández-Ballesteros and others (eds), Liber Amicorum Bernardo Cremades (La Ley 2010) 873 Obersteiner, Thomas, ‘“In Accordance with Domestic Law” Clauses: How International Investment Tribunals Deal with Allegations of Unlawful Conduct of Investors’ (2014) 31 Journal of International Arbitration 265 Onguene Onana, Dieudonné Édouard, La Compétence en arbitrage international relatif aux investissements: Les conditions d’investissement et de nationalité devant le CIRDI (Bruylant 2012) ‘Qualification d’investissement et compétence en arbitrage international relatif aux investissements: la théorie du contrôle séparé devant le CIRDI’ [2012] Revue Générale de Droit 57 Orrego Vicuña, Francisco, ‘Changing Approaches to the Nationality of Claims in the Context of Diplomatic Protection and International Dispute Settlement’ (2000) 15 ICSID Review 340 Ortolani, Pietro, ‘Are Bondholders Investors? Sovereign Debt and Investment Arbitration after Poštová’ (2017) 30 Leiden Journal of International Law 383 Pahis, Stratos, ‘Investment Misconceived: The Investment–Commerce Distinction in International Investment Law’ (2020) 45 Yale Journal of International Law 69 Pannier, Matthias, ‘Nationality of Corporations under Domestic Law: A Comparative Perspective’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 11 Parra, Antonio R, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Review 287

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Pauker, Saar A, ‘Admissibility of Claims in Investment Treaty Arbitration’ (2018) 34 Arbitration International 1 Paulsson, Jan, ‘Arbitration without Privity’ (1995) 10 ICSID Review 232 Perera, Srilal M, ‘State Responsibility – Ascertaining the Liability of States in Foreign Investment Disputes’ (2005) 6 The Journal of World Investment & Trade 499 Perkams, Markus, ‘Piercing the Corporate Veil in International Investment Agreements’ in August Reinisch and Christina Knahr (eds), International Investment Law in Context (Eleven International 2008) 93 Peters, Paul, ‘Dispute Settlement Arrangements in Investment Treaties’ (1991) 22 Netherlands Yearbook of International Law 91 Petrochilos, Georgios, Noury, Sylvia and Kalderimis, Daniel, ‘ICSID Convention, Chapter II, Article 25’ in Loukas A Mistelis (ed), Concise International Arbitration (Wolters Kluwer 2010) 66 Pivnichny, Douglas, ‘Treaty-Based Claims against Subdivisions of ICSID Contracting States’ (2017) 16 Washington University Global Studies Law Review 125 Polckinghorne, Michael and Volkmer, Sven-Michael, ‘The Legality Requirement in Investment Arbitration’ (2017) 34 Journal of International Arbitration 149 Potestà, Michele, ‘The Interpretation of Consent to ICSID Arbitration Contained in Domestic Investment Laws’ (2011) 27 Arbitration International 149 Rand, William, Hornick, Robert N and Friedland, Paul, ‘ICSID’s Emerging Jurisprudence: The Scope of ICSID’s Jurisdiction’ (1986) 19 New York University Journal of International Law and Politics 33 Reinisch, August, ‘Jurisdiction and Admissibility in International Investment Law’ (2017) 16 The Law & Practice of International Courts and Tribunals 21 Repousis, Odysseas G, ‘On Territoriality and International Investment Law: Applying China’s Investment Treaties to Hong Kong and Macau’ (2015) 37 Michigan Journal of International Law 113 ‘Standing of Locally Incorporated Entities in International Investment Law and the Notion of “Foreign Control”’ (2016) 24 Tulane Journal of International & Comparative Law 327 ‘The Use of Trusts in Investment Arbitration’ (2018) 34 Arbitration International 261 Risso, Giorgio, ‘Portfolio Investments in ICSID Arbitration: Just a Matter of Consent?’ (2020) 37 Journal of International Arbitration 341 Rubins, Noah, ‘The Notion of “Investment” in International Investment Arbitration’ in Norbert Horn and Stefan Kröll (eds), Arbitrating Foreign Investment Disputes (Kluwer 2004) 283 ‘MFN Clauses, Procedural Rights and a Return to the Treaty Text’ in Todd Weiler (ed), Investment Treaty Arbitration and International Law vol 1 (Juris 2008) 213 Sattorova, Mavluda, ‘Defining Investment under the ICSID Convention and BITs: Of Ordinary Meaning, Telos, and Beyond’ (2012) 2 Asian Journal of International Law 267 Savarese, Eduardo, ‘La nazionalità delle società commerciali e la funzione del controllo: alcune riflessioni in margine alla decisione ICSID Tokios Tokeles v Ukraine’ (2005) 15 Rivista dell’Arbitrato 369 ‘Investment Treaties and the Investor’s Right to Arbitration between Broadening and Limiting ICSID Jurisdiction’ (2006) 7 The Journal of World Investment & Trade 407 Schill, Stephan W, ‘Illegal Investments in Investment Treaty Arbitration’ (2012) 11 The Law & Practice of International Courts and Tribunals 281

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‘Maffezini v Plama: Reflections on the Jurisprudential Schism in the Application of MostFavored-Nation Clauses to Matters of Dispute Settlement’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Wolters Kluwer 2016) 251 Schill, Stephan W and Bray, Heather L, ‘Good Faith Limitations on Protected Investments and Corporate Structuring’ in Andrew D Mitchell, M Sornarajah and Tania Voon (eds), Good Faith and International Economic Law (OUP 2015) 88 Schlemmer, Engela C, ‘Investment, Investor, Nationality, and Shareholders’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 49 Schreuer, Christoph, ‘Access to ICSID Dispute Settlement for Locally Incorporated Companies’ in Friedl Weiss, Erik Denters and Paul de Waart (eds), International Economic Law with a Human Face (Kluwer 1998) 497 ‘The Interpretation of ICSID Arbitration Agreements’ in Karel Wellens (ed), International Law: Theory and Practice, Essays in Honour of Eric Suy (Martinus Nijhoff 1998) 719 ‘Travelling the BIT Route: Of Waiting Periods, Umbrella Clauses and Forks in the Road’ (2004) 5 The Journal of World Investment & Trade 231 ‘Shareholder Protection in International Investment Law’ in Pierre-Marie Dupuy and others (eds), Common Values in International Law, Essays in Honour of Christian Tomuschat (NP Engel 2006) 601 ‘Consent to Arbitration’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 830 ‘What Is a Legal Dispute?’ in Isabelle Buffard and others (eds), International Law between Universalism and Fragmentation: Festschrift in Honor of Gerhard Hafner (Martinus Nijhoff 2009) 959 ‘Investment Arbitration Based on National Legislation’ in Gerhard Hafner and others (eds), Völkerrecht und die Dynamik der Menschenrechte, Liber Amicorum Wolfram Karl (Facultas 2012) 527 ‘Jurisdiction and Applicable Law in Investment Treaty Arbitration’ (2014) 1 McGill Journal of Dispute Resolution 1 ‘At What Time Must Jurisdiction Exist?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 264 ‘The Active Investor’ in Eric Bylander, Anna Jonsson Cornell and Jakob Ragnwaldh (eds), Forward! Essays in Honour of Prof Dr Kaj Hobér (Iustus Pub 2019) 237 ‘Pre-Investment Activities’ in Christoph Benicke and Stefan Huber (eds), National, International, Transnational: Harmonischer Dreiklang im Recht – Festschrift für Herbert Kronke (Gieseking 2020) 1553 ‘The Unity of an Investment’ (2021) 19 ICSID Reports 3 Schreuer, Christoph and Kriebaum, Ursula, ‘The Concept of Property in Human Rights Law and International Investment Law’ in Stephan Breitenmoser (ed), Human Rights, Democracy and the Rule of Law, Liber Amicorum Luzius Wildhaber (Nomos 2007) 743 Shany, Yuval, ‘Jurisdiction and Admissibility’ in Cesare PR Romano, Karen J Alter and Yuval Shany (eds), The Oxford Handbook of International Adjudication (OUP 2013) 779 Shihata, Ibrahim FI and Parra, Antonio R, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Review 299

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Sinclair, Anthony C, ‘Nationality of Individual Investors in ICSID Arbitration’ (2004) 7 International Arbitration Law Review 191 ‘The Substance of Nationality Requirements in Investment Treaty Arbitration’ (2005) 20 ICSID Review 357 ‘The “Foreign Nationality” – Requirements in ICSID Arbitration’ in Rainer Hofmann and Christian J Tams (eds), The International Convention on the Settlement of Investment Disputes (ICSID): Taking Stock after 40 Years (Nomos 2007) 129 ‘ICSID’s Nationality Requirement’ in Todd Weiler (ed), Investment Treaty Arbitration and International Law vol 1 (Juris 2008) 85 Sipiorski, Emily, Good Faith in International Investment Arbitration (OUP 2019) Sloane, Robert D, ‘Breaking the Genuine Link: The Contemporary International Legal Regulation of Nationality’ (2009) 50 Harvard International Law Journal 1 Smutny, Abby Cohen, ‘State Responsibility and Attribution: When Is a State Responsible for the Acts of State Enterprises? Emilio Agustín Maffezini v The Kingdom of Spain’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 17 ‘Claims of Shareholders in International Investment Law’ in Christina Binder and others (eds), International Investment Law for the 21st Century – Essays in Honour of Christoph Schreuer (OUP 2009) 363 Steingruber, Andrea M, Consent in International Arbitration (OUP 2012) ‘Consent in Large-Scale Arbitration Proceedings’ (2012) 27 ICSID Review 237 Stern, Brigitte, ‘The Contours of the Notion of Protected Investment’ (2009) 24 ICSID Review 534 Szasz, Paul C, ‘A Practical Guide to the Convention on Settlement of Investment Disputes’ (1968) 1 Cornell International Law Journal 1 ‘The Investment Disputes Convention – Opportunities and Pitfalls (How to Submit Disputes to ICSID)’ (1970) 5 Journal of Law and Economic Development 23 Tams, Christian J, ‘State Succession to Investment Treaties: Mapping the Issues’ (2016) 31 ICSID Review 314 Timmer, Laurens JE, ‘The Meaning of “Investment” as a Requirement for Jurisdiction Ratione Materiae of the ICSID Centre’ (2012) 29 Journal of International Arbitration 363 Toriello, Pierluigi, ‘The Additional Facility of the International Centre for Settlement of Investment Disputes’ (1978/1979) 4 The Italian Yearbook of International Law 59 Triantafilou, Epaminontas, ‘Contemporaneity and Its Limits in Treaty Interpretation’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 449 Tupman, W Michael, ‘Case Studies in the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1986) 35 International and Comparative Law Quarterly 813 Turner, Peter J, ‘Treaties as Agreements to Arbitrate: Issues of Scope – Parties, Ownership and Control’ in Albert Jan van den Berg (ed), International Arbitration 2006: Back to Basics? ICCA International Arbitration Congress (Kluwer 2006) 444 Valasek, Martin J and Dumberry, Patrick, ‘Developments in the Legal Standing of Shareholders and Holding Corporations in Investor–State Disputes’ (2011) 26 ICSID Review 34

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Valenti, Mara, ‘The Scope of an Investment Treaty Dispute Resolution Clause – It Is Not Just a Question of Interpretation’ (2013) 29 Arbitration International 243 van Houtte, Hans and McAsey, Bridie, ‘ICSID, the BIT and Mass Claims’ (2012) 27 ICSID Review 231 Vandevelde, Kenneth J, ‘Arbitration Provisions in the BITs and the Energy Charter Treaty’ in Thomas W Wälde (ed), The Energy Charter Treaty: An East–West Gateway for Investment & Trade (Kluwer 1996) 409 Vanhonnaeker, Lukas, Shareholders’ Claims for Reflective Loss in International Investment Law (CUP 2020) von Papp, Konstanze, ‘Biting the Bullet or Redefining “Consent” in Investor–State Arbitration? Pre-Arbitration Requirements after BG Group v Argentina’ (2015) 16 The Journal of World Investment & Trade 695 Voon, Tania, Mitchell, Andrew and Munro, James, ‘Parting Ways: The Impact of Mutual Termination of Investment Treaties on Investor Rights’ (2014) 29 ICSID Review 451 Waibel, Michael, ‘Opening Pandora’s Box: Sovereign Bonds in International Arbitration’ (2007) 101 American Journal of International Law 711 ‘Investment Arbitration: Jurisdiction and Admissibility’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/Nomos 2015) 1212 ‘Subject Matter Jurisdiction: The Notion of Investment’ (2021) 19 ICSID Reports 25 Wehland, Hanno, ‘The Transfer of Investments and Rights of Investors under International Investment Agreements – Some Unresolved Issues’ (2014) 30 Arbitration International 565 ‘Blue Bank International v Venezuela: When Are Trust Assets Protected under International Investment Agreements?’ (2017) 34 Journal of International Arbitration 947 ‘Jurisdiction and Admissibility in Proceedings under the ICSID Convention and the ICSID Additional Facility Rules’ in Crina Baltag (ed), ICSID Convention after 50 Years: Unsettled Issues (Wolters Kluwer 2017) 227 Williams, David AR, ‘Jurisdiction and Admissibility’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 868 Williams, David AR and Foote, Simon, ‘Recent Developments in the Approach to Identifying an “Investment” Pursuant to Article 25(1) of the ICSID Convention’ in Chester Brown and Kate Miles (eds), Evolution in Investment Treaty Law and Arbitration (CUP 2011) 42 Wisner, Robert, ‘Derivative Actions and Indirect Claims’ in Federico Ortino and others (eds), Investment Treaty Law: Current Issues vol II (BIICL 2007) 73 Wisner, Robert and Gallus, Nick, ‘Nationality Requirements in Investor–State Arbitration’ (2004) 5 The Journal of World Investment & Trade 927 Yackee, Jason Webb, ‘Investment Treaties and Investor Corruption: An Emerging Defense for Host States?’ (2012) 52 Virginia Journal of International Law 723 Yala, Farouk, ‘The Notion of “Investment” in ICSID Case Law: A Drifting Jurisdictional Requirement? Some “Unconventional” Thoughts on Salini, SGS and Mihaly’ (2005) 22 Journal of International Arbitration 105 Yannaca-Small, Katia, ‘Definition of “Investment”: An Open-Ended Search for a Balanced Solution’ in Katis Yannaca-Small (ed), Arbitration under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) 266

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I. INTRODUCTION A. General Art. 25 lays down the general parameters for ICSID’s activity in settling investment disputes through arbitration and conciliation proceedings under the ICSID Convention. It is the first of three Articles in Chapter II, and is headed ‘Jurisdiction of the Centre.’ The other two Articles in Chapter II deal with the much narrower questions of excluding other remedies (Art. 26) and diplomatic protection (Art. 27). Unlike Arts. 26 and 27, Art. 25 is not restricted to arbitration, but refers to ‘[t]he jurisdiction of the Centre,’ thereby also encompassing conciliation (see also paras. 27–37 infra). Art. 25 sets out the preconditions for the operation of Chapter III (Conciliation) and Chapter IV (Arbitration). Unlike Chapter I, which provides for the establishment of the Centre as an international organization and its internal organization and sets out the organization’s purpose, Art. 25 constitutes a concrete conferral of competence by the Contracting States to the Centre to administer concrete proceedings for the settlement of investment disputes under the Convention. In circumscribing ICSID’s ‘jurisdiction,’ Art. 25 defines the objective range and outer limits of the Centre’s competence as an international organization in administering concrete dispute settlement proceedings. It does not, by contrast, address the ‘jurisdiction’ of individual arbitral tribunals or conciliation commissions that are established under the Convention and are its adjudicatory organs. Still, the Centre’s jurisdiction in the sense of Art. 25 is one element that needs to be fulfilled in order for an ICSID tribunal or conciliation commission to be competent in the sense of Arts. 32 and 41 to resolve an individual investment dispute. Art. 25, in other words, is a title of jurisdiction (or competence) in the sense of international institutional law, that is, the law governing international organizations, not an independent title of jurisdiction for the settlement of individual cases in the sense used by the law governing international dispute settlement.1 Art. 25 only deals with the substantive questions of the Centre’s jurisdiction. The procedure for the determination of whether that jurisdiction exists is regulated in Arts. 28(3) and 36(3), dealing with the Secretary-General’s screening power, and in Arts. 32 and 41, which make conciliation commissions or arbitral tribunals the judges of their own competence. Their assessment of ‘competence’ encompasses determining both whether the Centre, as an international organization that has the power to administer investment dispute settlement proceedings, has institutional jurisdiction, and whether a commission or tribunal can entertain the specific claim or lacks competence for reasons other than a lack of the Centre’s jurisdictional grant (see paras. 20–26 infra). Art. 25 exhaustively lays down the criteria for the Centre’s jurisdiction. It contains requirements relating to the nature of the dispute (ratione materiae) and to the parties (ratione personae). The requirements relating to the nature of the dispute are that it must 1 For a similar distinction between ICSID’s ‘general jurisdiction,’ referring to ‘the objective range and outer limits of the ambit for all cases’ and its ‘special jurisdiction,’ that is, ‘the subjective range and limits of the ambit of jurisdiction of the organ in a particular case, according to the specific jurisdictional title bearing the consent of the parties,’ see Abaclat and others v Argentina, Dissenting Opinion Abi-Saab (4 August 2011) paras 9–14. See also Yuval Shany, Questions of Jurisdiction and Admissibility before International Courts (CUP 2016) 23–26 (distinguishing between ‘foundational’ and ‘specific’ jurisdiction).

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be of a legal nature (see paras. 68–112 infra) and arise directly out of an investment (see paras. 113–496 infra). Those relating to the parties specify that one side must be a Contracting State (or a constituent subdivision or agency of a Contracting State designated to the Centre by that State) (see paras. 497–571 infra) and the other a national of another Contracting State (see paras. 572–615 infra). In addition, the parties (see paras. 616–758 infra) must have given their consent in writing (ratione voluntatis) (see paras. 759–1054 infra). All other parts of Art. 25 either define or further specify these essential requirements. Art. 25(2) defines who qualifies as a national of a Contracting State (see paras. 1111–1445 infra); Art. 25(3) contains additional jurisdictional requirements for a constituent subdivision or agency to come under ICSID’s jurisdiction (see paras. 1446–1471 infra); Art. 25(4) provides for a mechanism by which Contracting States to the ICSID Convention can notify the Centre formally of the types of disputes they would or would not consider submitting in the future for resolution under the Convention (see paras. 1472–1507 infra). Art. 25 does not leave room for reading unwritten criteria into the Centre’s jurisdictional grant. The mixed nature of the dispute, that is the limitation to cases arising between a State and a foreign national, is in keeping with one of the Convention’s purposes, that is, to close a perceived procedural gap. Legal disputes between individuals or corporations are normally settled before domestic courts. States may settle their legal disputes before the International Court of Justice (ICJ) or through inter-State arbitration. However, in mixed disputes (between private and public actors), especially those arising from international investment relationships, no appropriate forum was seen to exist that could guarantee, in the eyes of the parties involved, independent, impartial, and neutral dispute settlement. The jurisdictional requirements in Art. 25 are partly formulated by the Convention as objective requirements – the nature of the dispute and of the parties – and partly left to the disputing parties’ disposition in the framing of their consent. The relationship between the objective and consensual sides of jurisdiction has given rise to some debate. In the course of the Convention’s drafting, there were extensive discussions as to whether the objective criteria, notably those relating to the notions of ‘investment’ and ‘legal dispute,’ and to the investor’s nationality, required precise definition (see esp. History, Vol. II, pp. 491, 826, 831, 936, 956–957). Especially Mr. Broches explained that, since jurisdiction was optional in character, there was no need to give precise definitions. It was always up to the parties to give or withhold consent (ibid., pp. 83, 258, 267, 268, 397, 491, 497, 499, 505, 540, 563, 566, 567, 700, 702, 707, 710, 972). He was joined by a number of delegates who felt that the parties’ consent in a particular case implied their recognition that the objective criteria of the Centre’s jurisdiction had been met. In other words, it should be the terms of consent that ultimately defined the Centre’s jurisdiction (ibid., pp. 286, 450, 659, 701, 702, 706, 831, 972). Another group of delegates objected to an imprecise or open-ended description of the Centre’s scope of activities. They feared that the mere participation in a convention which opens the door to a far-reaching jurisdiction would create expectations that would make it difficult for host States to resist pressure to give their consent. This, in turn, was liable to lead to friction and embarrassment (ibid., pp. 259, 260, 285, 471, 494, 499, 501, 566, 653, 660, 700, 703, 704, 822). A Brazilian member of the Legal Committee summarized this position by saying that ‘the more the jurisdiction of the Centre is restricted, the closer we shall be to a satisfactory result’ (ibid., p. 838).

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The fact that most of the proposed definitions for the objective criteria for jurisdiction were not adopted was motivated less by the view that they were redundant than by an inability to agree on them. It would therefore be inaccurate to assume that the general phrasing of these objective criteria in Art. 25 gives the parties complete freedom to determine, by the terms of their consent, which disputes they wish to submit to the Centre. This fact is borne out by the Report of the Executive Directors:

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25. While consent of the parties is an essential prerequisite for the jurisdiction of the Centre, consent alone will not suffice to bring a dispute within its jurisdiction. In keeping with the purpose of the Convention, the jurisdiction of the Centre is further limited by reference to the nature of the dispute and the parties thereto.2

Consequently, while the interpretation by the parties of the objective jurisdictional requirements in Art. 25 carries a certain amount of weight, Art. 25 establishes outer limits to the Centre’s jurisdiction that are not subject to the parties’ disposition (see paras. 68, 109, 113–114, 177–186, 951, 1114, 1115 infra). Consequently, for the Centre to have jurisdiction, all requirements in Art. 25 need to be fulfilled, and the disputing parties cannot opt out of, or contract around, them and thereby expand ICSID’s ambit.3 This conclusion is also borne out by Rule 41(2) of the Arbitration Rules and Rule 29(2) of the Conciliation Rules, which provide that a conciliation commission or arbitral tribunal will not only take note of an objection to jurisdiction filed by a party, but may – and arguably must – consider on its own initiative (sua sponte, proprio motu, or ex officio) whether the dispute before it is within the Centre’s jurisdiction.4 This conclusion is also supported by the consideration that the settlement of an investment dispute through arbitration under the ICSID Convention not only has the consequence for the disputing parties of resulting in a final and binding award; instead, all Contracting Parties are obliged to refrain from exercising their review powers that would otherwise exist in relation to international arbitral awards, either in set-aside or annulment proceedings at the tribunal’s seat or at the stage of recognition or enforcement (see Arts. 53 and 54). Refraining from exercising such review powers is only acceptable if the jurisdictional contours of the Centre’s activity in administering concrete dispute settlement proceedings are objectively defined, rather than wholly determined by the disputing parties. Otherwise, disputing parties would have it entirely in their hands to opt into ICSID’s delocalized dispute settlement system and circumvent the States’ powers to control arbitral tribunals, whether under domestic arbitration

2 (1993) 1 ICSID Reports 23, 28. 3 This position is also widely reflected in the practice of ICSID tribunals. See eg Joy Mining v Egypt, Award (6 August 2004) para 50; Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 31; Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) para 80; TSA Spectrum v Argentina, Award (19 December 2008) para 134 and ibid, Concurring Opinion of Arbitrator Georges Abi-Saab (19 December 2008) para 11; Phoenix Action v Czech Republic, Award (15 March 2009) paras 82, 96; Malaysian Historical Salvors v Malaysia, Decision on Annulment (16 April 2009) para 72 and ibid, Dissenting Opinion Shahabuddeen (19 February 2009) paras 4–13; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 438–439; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 203. 4 On the power of ICSID tribunals to consider their competence proprio motu /ex officio, see Art. 41, paras 64–82.

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statutes or the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).5 Jurisdictional questions under Art. 25 may arise at different stages in the proceedings: at the stage of instituting proceedings, especially in connection with the SecretaryGeneral’s screening power under Arts 28(3) and 36(3), at a preliminary stage before the conciliation commission or arbitral tribunal, if the commission or tribunal decides to deal with some or all of them as preliminary questions, and at any time in the course of the proceedings, if the commission or tribunal decides to join all, or some of them, to the merits of the dispute in accordance with Arts. 32(2) and 41(2). In the case of an arbitral award, questions of the Centre’s jurisdiction may also be raised in the context of a request for annulment: a violation of Art. 25 may have the consequence that the tribunal has manifestly exceeded its powers in accordance with Art. 52(1)(b) of the Convention (see Art. 52, paras. 189–218). Exceptionally, questions of jurisdiction may also arise in revision proceedings under Art. 51 of the Convention, if the newly discovered fact is of such a nature as to decisively affect the tribunal’s jurisdictional determination (see Art. 51, para. 23). The effect of a lack of jurisdiction under Art. 25 is that the Centre cannot administer a concrete dispute settlement proceeding as a proceeding under the ICSID Convention.6 The Secretary-General has to decline to register a request for arbitration under the conditions laid down in Art. 36(3) (see Art. 36, paras. 49–57); conciliation commissions or arbitral tribunals lack competence to entertain the dispute (see Art. 32, paras. 4, 5; Art. 41, paras. 120, 125–127); and an award that is rendered by a tribunal even though the Centre lacks jurisdiction will have to be annulled for a manifest excess of powers pursuant to Art. 52(1)(b) (see Art. 52, paras. 189–195). B. The Additional Facility

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Certain investors and capital-exporting States regarded some of Art. 25’s jurisdictional requirements as too restrictive. The requirement that both the host State and the investor’s State of nationality must be Contracting States excluded access to the Centre in many situations. In addition, doubts persisted as to the precise meaning of ‘dispute arising directly out of an investment.’ In response to these concerns, the Administrative Council of the Centre on 27 September 1978 adopted the Additional Facility Rules.7 These Rules are designed to open access to the Centre in certain situations where the

5 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (signed 10 June 1958, entered into force 7 June 1959) 330 UNTS 38 (New York Convention). 6 ICSID may, however, be able to administer such a dispute either under the Additional Facility Rules (see paras 12–19 infra) or under other non-ICSID rules outside the jurisdictional boundaries of the ICSID Convention. See also ICSID, ‘Arbitration under UNCITRAL and other Non-ICSID Rules’ accessed 10 January 2021. 7 The Additional Facility was initially approved for a five-year term. It was continued indefinitely by a decision of the Administrative Council of 26 September 1984. See ‘Continuation of the Additional Facility’ (1985) 2(1) News from ICSID 6–7. Generally on the Additional Facility, see Aron Broches, ‘The “Additional Facility” of the International Centre for Settlement of Investment Disputes (ICSID)’ (1979) 4 YB Comm Arb 373; Georges R Delaume, Transnational Contracts: Applicable Law and Settlement of Disputes (Oceana 1990) ch XV, 79–83; Pierluigi Toriello, ‘The Additional Facility of the International Centre for Settlement of Investment Disputes’ (1978/1979) 4 Italian YBIL 59; Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 128–137.

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Convention’s jurisdictional requirements ratione personae and/or ratione materiae have not been met. The conditions for access to the Centre under the Additional Facility are described in Art. 2 of its Rules:

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Article 2 Additional Facility Rules The Secretariat of the Centre is hereby authorized to administer, subject to and in accordance with these Rules, proceedings between a State (or a constituent subdivision or agency of a State) and a national of another State, falling within the following categories: (a) conciliation and arbitration proceedings for the settlement of legal disputes arising directly out of an investment which are not within the jurisdiction of the Centre because either the State party to the dispute or the State whose national is a party to the dispute is not a Contracting State; (b) conciliation and arbitration proceedings for the settlement of legal disputes which are not within the jurisdiction of the Centre because they do not arise directly out of an investment, provided that either the State party to the dispute or the State whose national is a party to the dispute is a Contracting State; and (c) fact-finding proceedings. The administration of proceedings authorized by these Rules is hereinafter referred to as the Additional Facility.

Therefore, the Additional Facility created three new types of proceedings:

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1. Conciliation or arbitration for the settlement of investment disputes where only one side is a party to the Convention or a national of a party to the Convention; 2. Conciliation or arbitration for the settlement of disputes that do not arise directly from an investment, provided that at least one side is a party to the Convention or a national of a party to the Convention; and 3. Fact-finding proceedings.

In all three cases, proceedings must arise from a mixed dispute, that is, between a State and a foreign national. In the case of 1 and 2, at least one side must be either a Contracting State or a national of another Contracting State of the Convention.8 In the case of fact-finding, no further jurisdictional requirements ratione personae or ratione materiae are indicated (see paras. 38–43 infra). Art. 3 of the Additional Facility Rules points out that the Convention is not applicable to Additional Facility proceedings. This means, in particular, that arbitration proceedings under the Additional Facility Rules are not insulated from national law and that the recognition and enforcement of awards is not subject to Arts. 53 and 54 of the Convention, but governed by the law of the forum and any applicable treaties (see Art. 53, paras. 5–11; Art. 54, paras. 12–23).

8 One author has surmised that a literal reading of the French version of Art. 2 of the Additional Facility Rules might be read in the sense that the Additional Facility is also open to parties both of which are foreign to the Convention. See Toriello (n 7) 73. This interpretation does not appear to be supported by the French text and is flatly contradicted by the Introductory Notes to the Additional Facility Rules and the Comments to their Art. 2 prepared by the Centre. See (1993) 1 ICSID Reports 213, 218.

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The Additional Facility is reflected in a considerable number of investment agreements, bilateral investment treaties (BITs), multilateral treaties, and national investment legislation. Many of these documents offer consent to dispute settlement under the Additional Facility. Since 1997, the Additional Facility has generated a considerable number of proceedings. It has been especially significant in the framework of the North American Free Trade Agreement (NAFTA), since for a long time neither Canada nor Mexico were parties to the ICSID Convention (see para. 865 infra). Some of the more detailed questions arising in relation to the Additional Facility are discussed below in the context of the concept of investment (paras. 480–496 infra), Contracting States (paras. 513–518, 614–615 infra), and fact-finding (paras. 38–43 infra) (see also Art. 6, para. 26). Compliance with the requirements in Art. 2(a) and (b) of the Additional Facility Rules is, without doubt, a prerequisite for the Secretary-General’s approval of the parties’ agreement to arbitration or conciliation proceedings pursuant to Art. 4 of the Additional Facility Rules. To what extent the requirements in Art. 2 of the Additional Facility Rules also constitute separate jurisdictional requirements for tribunals or conciliation commissions is less clear. In many arbitration proceedings under the Arbitration (Additional Facility) Rules, there is no discussion of these requirements, nor any mention that they would impose any limitations on the tribunal. Rather, tribunals often limit their jurisdictional inquiry to ascertaining that the dispute was covered by the parties’ consent.9 By contrast, other Additional Facility tribunals verify compliance with Art. 2 of the Additional Facility Rules, thus suggesting that the provision’s requirements constitute separate jurisdictional requirements also for arbitral tribunals and conciliation commission.10 The more convincing view, however, is that Art. 2 of the Additional Facility Rules does not establish jurisdictional requirements that would need to be complied with in addition to the disputing parties’ consent once their agreement to arbitrate under the Additional Facility has been approved by the Secretary-General. Unlike Art. 25 of the Convention, the Additional Facility contains no provision that circumscribes the outer limits of dispute settlement under the Additional Facility or would require tribunals or conciliation commissions established under the Additional Facility to verify compliance with such limits.11 Arts. 2 and 4 of the Additional Facility Rules merely limit the conditions under which the Secretary-General can make the Additional Facility available to the disputing parties, but does not contain limits to the jurisdiction of arbitral

9 See eg Europe Cement v Turkey (AF), Award (13 August 2009) paras 140–145; Anderson and others v Costa Rica (AF), Award (19 May 2010) paras 43–61; Crystallex v Venezuela (AF), Award (4 April 2016) para 426; Lion v Mexico (AF), Decision on Jurisdiction (30 July 2018) paras 163–263. 10 See eg Sistem v Kyrgyzstan (AF), Decision on Jurisdiction (13 September 2007) paras 58, 60, 68, 98; Minnotte and Lewis v Poland (AF), Award (16 May 2014) para 150; Grupo Contreras v Equatorial Guinea (AF), Award (4 December 2015) paras 86–87, 138–139, 261–262; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 186, 187; Strabag v Libya (AF), Award (29 June 2020) paras 109, 210. 11 Notably, Art. 45 of the Arbitration (Additional Facility) Rules and Art. 36 of the Conciliation (Additional Facility) Rules limit preliminary objections to the ‘competence’ of the tribunal or conciliation commission; there is no parallel to Art. 41(2) of the Convention that would suggest that a tribunal or conciliation commission under the Additional Facility would need to determine compliance with the ‘jurisdiction’ of the Additional Facility.

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tribunals or conciliation commissions established thereunder. Arbitral tribunals and conciliation commissions should therefore not review or second-guess the SecretaryGeneral’s approval under Art. 4 of the Additional Facility Rules (see also para. 484 infra).

II. INTERPRETATION A. ‘(1) The jurisdiction of the Centre . . .’

1. Jurisdiction, Competence, and Admissibility Art. 1 of the Convention makes clear that the term ‘the Centre’ refers to the International Centre for Settlement of Investment Disputes. No similar clarification, however, is offered for the term ‘jurisdiction’ in the sense of Art. 25. In the context of international dispute settlement, the concept of ‘jurisdiction’ is often defined as ‘the power of a court or judge to entertain an action, petition or other proceeding.’12 Art. 25, however, does not have this concept of ‘jurisdiction’ in mind. Instead, the term ‘jurisdiction’ in Art. 25 has to be understood as referring to the competences conferred on the Centre as an international organization to administer arbitration and conciliation proceedings for the purpose of settling investment disputes between Contracting States and nationals of other Contracting States pursuant to the Convention. Seen from the perspective of the disputing parties, jurisdiction in the sense of Art. 25 concerns the conditions under which use can be made of the Centre for settling disputes under the ICSID Convention. Jurisdiction in the sense of Art. 25 does not, by contrast, refer to the adjudicatory powers of a specific arbitral tribunal or conciliation commission that is established under the Convention to settle an individual dispute (see also para. 2 supra). These powers are referred to as the tribunal’s or commission’s ‘competence’ in Arts. 32 and 41. This reading is what transpires from the Convention’s travaux. The term ‘jurisdiction of the Centre’ was used throughout the Convention’s drafting history (History, Vol. I, pp. 110–118). There were some queries as to the appropriateness of the word ‘jurisdiction,’ seeing that the Centre only exercises administrative functions (History, Vol. II, p. 830). Also, there was some feeling that the term might not reflect the purely voluntary nature of the Centre’s activity and might indicate an element of compulsion (ibid., pp. 491, 700). At times, the word ‘competence’ was suggested (ibid., pp. 396, 409, 451). The retention of ‘jurisdiction’ was justified by reference to its use in Art. 47 of the 1907 Hague Convention for the Pacific Settlement of International Disputes in addressing the possibilities of the Permanent Court of Arbitration to administer certain disputes (ibid., pp. 203, 255, 320, 491).13 The Report of the Executive Directors to the Convention gives a broad interpretation to the term:

12 Jowitt’s Dictionary of English Law vol 1 (Sweet & Maxwell 1977) 1034. See also Bryan A Garner (ed), Black’s Law Dictionary (10th edn, West 2014) 855. 13 See also Aron Broches, ‘The Convention on the Settlement of Investment Disputes, Some Observations on Jurisdiction’ (1966) 5 Columbia JTL 263, 265–266.

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This reading is also confirmed by the context. A look at the English text of the Convention shows that the terms ‘jurisdiction’ and ‘competence’ are used in slightly different ways. Arts. 32(2) and 41(2) speak of the ‘jurisdiction of the Centre’ and of the ‘competence of the Commission’ or ‘Tribunal’ respectively.15 Arts. 28(3) and 36(3) also refer to the ‘jurisdiction of the Centre’ in the context of the Secretary-General’s screening power. Arbitration Rule 41 adopts the same distinction (see Art. 41, paras. 87, 88). Many ICSID tribunals follow this terminology in referring to the ‘jurisdiction of the Centre’ and the ‘competence of the Tribunal’16 (see also Art. 41, paras. 12, 13, 87, 88). Jurisdiction in the sense of Art. 25 therefore refers to the Centre’s competence in the sense of international institutional law, not to the jurisdiction of an ICSID tribunal or conciliation commission in the sense of the law of international dispute settlement.17 Jurisdiction in the sense of Art. 25 also has to be distinguished from the ‘admissibility’ of claims brought before conciliation commissions or arbitral tribunals established under the Convention (see also Art. 41, paras. 14, 92–104).18 Objections going to 14 (1993) 1 ICSID Reports 23, 28. 15 The equally authentic Spanish and French texts use the terms ‘jurisdicción’ and ‘compétence’ in Art. 25(1). The Spanish text, like the English text, in Arts. 32 and 41 distinguishes between ‘jurisdicción’ and ‘competencia.’ The French text uses ‘compétence’ for both purposes. 16 See eg Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 6; Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.13; Maffezini v Spain, Decision of the Tribunal on Objections to Jurisdiction (25 January 2000) paras 18, 19, 23, 64, 65, 75, 90, 99; CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 131; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 161; CMS v Argentina, Decision on Annulment (25 September 2007) para 68; Sempra v Argentina, Award (28 September 2007) para 21; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 126. Some tribunals, however, have consciously used the terms ‘jurisdiction’ and ‘competence’ interchangeably; see Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 54; ADC v Hungary, Award (2 October 2006) para 294; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 225, 245. 17 Considering the use of the term ‘jurisdiction’ in Art. 25 to be misplaced, given that ICSID itself does not settle disputes, but administers their settlement through arbitration and conciliation proceedings, disregards that Art. 25 makes reference to the meaning of ‘jurisdiction’ in the sense of international institutional law. For such a view, see Gerold Zeiler, ‘Jurisdiction, Competence, and the Admissibility of Claims in ICSID Arbitration Proceedings’ in Christina Binder and others (eds), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer (OUP 2009) 76, 80. 18 See Ian Laird, ‘A Distinction without a Difference? An Examination of the Concepts of Admissibility and Jurisdiction in Salini v Jordan and Methanex v USA’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 201; Jan Paulsson, ‘Jurisdiction and Admissibility’ in Gerald Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution – Liber Amicorum in Honour of Robert Briner (ICC 2005) 601; David AR Williams, ‘Jurisdiction and Admissibility’ in Peter Muchlinksi, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 868; Lars Markert, Streitschlichtungsklauseln in Investitionsschutzabkommen: Zur Notwendigkeit der Differenzierung von jurisdiction und admissibility in Investitionsschiedsverfahren (Nomos 2010); Yuval Shany, ‘Jurisdiction and Admissibility’ in Cesare PR Romano, Karen J Alter and Yuval Shany (eds), The Oxford Handbook of International Adjudication (OUP 2013) 779; Veijo Heiskanen, ‘Ménage à trois? Jurisdiction, Admissibility and Competence in Investment Treaty Arbitration’ (2014) 29 ICSID Rev 231; Laurent Gouiffès and Melissa Ordonez, ‘Jurisdiction and Admissibility: Are We Closer to a Line in the Sand?’ (2015) 31 Arb Int’l 107; Yas Banifatemi and Emmanuel Jacomy, ‘Compétence et recevabilité dans le droit de l’arbitrage en matière d’investissements’ in Charles Leben (ed), Droit

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admissibility concern characteristics of a claim that warrant that the commission or tribunal declines to entertain the claim, even though the claim falls under the jurisdiction of the Centre and is otherwise within the commission’s or tribunal’s competence.19 As the practice of ICSID tribunals shows, objections to admissibility may encompass the lack of ripeness or mootness of a claim, the effects of contractual forum selection clauses, or the need for negotiations or other prior attempts at dispute settlement between host State and investor, or the possibility to bring mass claims, among others.20 Although the term ‘admissibility’ does not, unlike in Art. 79 of the Rules of Court of the ICJ,21 appear in the ICSID Convention, and even though several tribunals have questioned the extent to which the use of the term is useful in the ICSID framework,22 it is clear that admissibility objections are not matters going to the jurisdiction of the Centre as such.23 They are instead a matter for the conciliation commission or arbitral tribunal to consider as part of the determination of their competence in the sense of Arts. 32(2) and 41(2) (see Art. 41, paras. 92–104). As stated succinctly by the Tribunal in Gavrilović v Croatia, ‘jurisdiction and admissibility are separate bases for preliminary objections.’24

19

20 21 22

23 24

international des investissements et de l’arbitrage transnational (Pedone 2015) 773; Michael Waibel, ‘Investment Arbitration: Jurisdiction and Admissibility’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/Hart/Nomos 2015) 1212; Friedrich Rosenfeld, ‘Arbitral Praeliminaria – Reflections on the Distinction between Admissibility and Jurisdiction after BG v Argentina’ (2016) 29 Leiden JIL 137; Hanno Wehland, ‘Jurisdiction and Admissibility in Proceedings under the ICSID Convention and the ICSID Additional Facility Rules’ in Crina Baltag (ed), ICSID Convention after 50 Years: Unsettled Issues (Wolters Kluwer 2017) 227; August Reinisch, ‘Jurisdiction and Admissibility in International Investment Law’ (2017) 16 LPICT 21; Saar A Pauker, ‘Admissibility of Claims in Investment Treaty Arbitration’ (2018) 34 Arb Int’l 1; Filippo Fontanelli, Jurisdiction and Admissibility in Investment Arbitration: The Practice and the Theory (Brill 2018). See only Reinisch (n 18) 22 (stating that ‘[a] rough consensus seems to emerge that if a particular arbitral forum is challenged it is likely to be jurisdictional, whereas if the claim itself is challenged it is likely to relate to admissibility’). For clear formulations of this difference in the practice of ICSID arbitrations, see eg Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) para 90 (stating that ‘[j]urisdiction is an attribute of a tribunal and not of a claim, whereas admissibility is an attribute of a claim but not of a tribunal’); Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 63 (stating that ‘an objection to jurisdiction goes to the ability of a tribunal to hear a case while an objection to admissibility aims at the claim itself and presupposes that the tribunal has jurisdiction’). For an overview of arbitral practice, see eg Reinisch (n 18) 31–41; Pauker (n 18) 8–64; Fontanelli (n 18). Art. 79 of the Rules of Court provides that ‘the Court may decide . . . that questions concerning its jurisdiction or the admissibility of the application shall be determined separately.’ See eg CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 41; Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 33; LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 2; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 85–87; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 54; Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) para 7.2.4; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 2.10; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 112–128; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 572–575; Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 257–260; Levy and Gremcitel v Peru, Award (9 January 2015) para 181. In this sense also Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 126. Gavrilović v Croatia, Award (26 July 2018) para 413.

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2. Scope of Jurisdiction a) Conciliation or Arbitration 27

28

29

30

Under the Convention’s system, the jurisdiction of the Centre encompasses administering conciliation and arbitration proceedings. Art. 25 does not differentiate between these two methods of dispute settlement. Earlier drafts to the Convention referred to conciliation and arbitration separately, but the word ‘jurisdiction’ was used in later versions (History, Vol. I, pp. 110, 112, 116, 118; Vol. II, p. 836). Some delegates felt that arbitration was appropriate only for legal disputes whereas conciliation was useful also for non-legal disputes (History, Vol. II, pp. 322, 396, 467, 508, 699, 702). Another idea was that conciliation should precede arbitration and that this should be reflected in the Convention’s text (ibid., pp. 65, 203, 255, 263, 265, 275, 320, 404, 413, 564). Neither suggestion found its way into either the Convention’s text or the Executive Directors’ Report. With the Centre being empowered to administer both conciliation and arbitration proceedings, issues may arise as to which of the two types of proceedings apply in a specific case. From the perspective of the Centre, this is a matter for the determination of the parties. Rule 1 of the Institution Rules states in relevant part that ‘[t]he request shall indicate whether it relates to a conciliation or an arbitration proceeding.’ It is on this basis that a determination needs to be made whether conciliation or arbitration proceedings under the Convention have been initiated. What remains necessary, in any event, for the Centre to be able to administer the specific proceeding in question is that the parties have expressed their consent to the type of proceeding that has been instituted. To avoid confusion, it is advisable that the parties make an explicit choice as to whether their consent to the Centre’s jurisdiction encompasses either conciliation or arbitration proceedings or both, and if so, at whose choice and in which sequence. Clauses 1 and 2 of the 1993 ICSID Model Clauses25 suggest that the parties specify whether their consent relates to conciliation or to arbitration. Alternatively, they suggest that the parties consent to ‘conciliation followed, if the dispute remains unresolved within [a stated time limit] of the communication of the report of the Conciliation Commission to the parties, by arbitration . . .’ (see paras. 773, 774 infra). References to ‘conciliation or arbitration’ or to ‘conciliation and arbitration’ are less clear, although, presumably, the choice between the two methods is left to the party instituting proceedings. Mere references to accepting the ‘jurisdiction of the Centre,’ to ‘dispute settlement by the Centre,’ or to the Convention in general terms, are not desirable since they may lead to disagreements between the disputing parties about the means of dispute settlement, if they insist on different procedures.26 The practice of parties in contracts containing ICSID clauses shows a variety of consent clauses dealing with this question with different degrees of precision. Some

25 (1997) 4 ICSID Reports 357. For further explanation on the Model Clauses, see para 772 infra. 26 See also CF Amerasinghe, ‘How to Use the International Centre for Settlement of Investment Disputes by Reference to Its Model Clauses’ (1973) 13 Indian JIL 530, 533; CF Amerasinghe, ‘Submissions to the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1973/1974) 5 J Mar L & Comm 211, 216–217.

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investment agreements specify that consent refers to arbitration only.27 Another model provides for conciliation, failing which the dispute is to be settled by arbitration.28 In other cases, the agreements provide for ‘conciliation and arbitration’ or ‘conciliation or arbitration.’29 In yet other agreements between the parties the dispute settlement clause merely provides for submission to the Centre without any reference to conciliation or arbitration.30 Clauses in treaties referring to the jurisdiction of ICSID are similarly diverse.31 Many of these clauses refer to arbitration only.32 Other clauses provide for settlement by ‘conciliation or arbitration’ under the Convention.33 Another type refers to ‘conciliation or arbitration,’ adding that ‘[i]n the event of disagreement as to whether conciliation or arbitration is the more appropriate procedure, the national or company affected shall have the right to choose.’34 Finally, a number of BITs simply provide for the reference of disputes to the Centre without mention of conciliation or arbitration.35 Provisions in national investment legislation referring to the settlement of investment disputes by ICSID also show a certain range of variation. Some refer to arbitration under the Convention,36 others to ‘conciliation or arbitration.’37 and some to arbitration preceded by conciliation.38

27 See eg AGIP v Congo, Award (30 November 1979) para 18; Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.15. 28 MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 67 and ibid, Decision on Annulment (22 December 1989) para 1.04. It appears that the original clause was seriously flawed. It was replaced subsequently by a clause referring to arbitration only. See also Lester Nurick and Stephen J Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 344. 29 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 12; LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 350. 30 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 10. 31 Antonio R Parra, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Rev 287, 323; Linda C Reif, ‘Conciliation as a Mechanism for the Resolution of International Economic and Business Disputes’ (1991) 14 Fordham ILJ 578, 607 ff. 32 See eg North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 289, Arts. 1116, 1120; France Model BIT (2006) Art. 8; German Model BIT (2008) Art. 10(2); UK Model IPPA (2008) Art. 8 (Alternative II); US Model BIT (2012) Art. 25; Denmark–Turkey BIT (signed 7 February 1990, entered into force 1 August 1992) Art. 8; Bangladesh–Italy BIT (signed 20 March 1990, entered into force 20 September 1994) Art. 9(2); Argentina–United States BIT (signed 14 November 1991, entered into force 20 October 1994) Art. VII(3). 33 See eg Energy Charter Treaty (ECT) (adopted 17 December 1994, entered into force 16 April 1998) 2080 UNTS 95, Art. 26(3)(a); Netherlands–Nigeria BIT (signed 2 November 1992, entered into force 1 February 1994) Art. 9; Brazil–Netherlands BIT (signed 25 November 1998, not in force) Art. 9(2); Denmark–Hungary BIT (signed 2 May 1988, entered into force 18 October 1988) Art. 9(2). 34 UK Model IPPA (2008) Art. 8(3) (Alternative I); Bangladesh–United Kingdom BIT (signed and entered into force 19 June 1980) Art. 8. 35 See eg China Model BIT (2003) Art. 9(2)(b); Lithuania–Poland BIT (signed 28 September 1992, entered into force 6 August 1993) Art. 7; Denmark–Estonia BIT (signed 6 November 1991, entered into force 24 February 1993, terminated 16 August 2017) Art. 9(2). 36 See eg Uganda–Investment Code (1991) Art. 28(2)(a). For a collection of national investment legislation see ICSID (ed), Investment Laws of the World (loose-leaf, OUP, since 1973). See also the country studies on national investment legislation in Wenhua Shan (ed), The Legal Protection of Foreign Investment: A Comparative Study (Hart 2012). 37 See eg Central African Republic–Code of Investments (1988) Art. 30. 38 See eg Madagascar–Investment Code (1989) Art. 34.

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So far, instruments that did not specify whether the parties’ consent to ICSID concerned arbitration or conciliation proceedings have not raised specific difficulties. In contract-based cases, the choice for arbitration, rather than conciliation, does not seem to have raised any issues. Similarly, in AAPL v Sri Lanka, the first ICSID case based on a jurisdictional clause in a BIT, there is no indication that AAPL’s right to choose arbitration was ever challenged, even though the 1980 Treaty between Sri Lanka and the United Kingdom in its Art. 8 provided for ‘. . . settlement by conciliation or arbitration under the Convention . . .’39 In SPP v Egypt, jurisdiction was based on Art. 8 of Egypt’s Law No. 43 of 1974, which provided, in relevant part, for the settlement of disputes ‘within the framework of the Convention.’40 Egypt argued that this phrase was insufficient to express consent to arbitration, since it did not refer expressly to arbitration, but embraced both arbitration and conciliation. The Tribunal rejected this argument: Nowhere . . . does the Washington Convention say that consent to the Centre’s jurisdiction must specify whether the consent is for purposes of arbitration or conciliation. Once consent has been given ‘to the jurisdiction of the Centre’, the Convention and its implementing regulations afford the means for making the choice between the two methods of dispute settlement. The Convention leaves that choice to the party instituting the proceedings.41

35

Similarly, in Pac Rim v El Salvador, Art. 15 of El Salvador’s Investment Law provided, without specifying the relationship between arbitration and conciliation under the Convention, that investors could submit investment disputes to the Centre ‘in order to settle the dispute by means of conciliation or arbitration.’42 Faced with the Respondent’s argument that the Claimant was required to initiate conciliation before recourse to arbitration, the Tribunal found: The conjunction ‘and’ in Article 15 of the Investment Law can only mean that both dispute settlement mechanisms provided by the ICSID Convention are available to the Claimant. Once consent has been given by the Respondent (as it is in the form of Article 15), it is for the party instituting the proceedings to choose between conciliation and arbitration under the ICSID Convention.43

36

The position taken by these tribunals is convincing and is supported by a considerable number of consent clauses that fail to distinguish between conciliation and arbitration. Any other solution would deprive general references to dispute settlement under the ICSID Convention of their value as a basis for consent to arbitration. Therefore, undifferentiated references to the Centre’s jurisdiction provide the party instituting proceedings with a choice between the two methods. A choice once made can, in principle, only be changed by agreement between the parties.

39 AAPL v Sri Lanka, Award (27 June 1990) para 2. See Nassib G Ziadé, ‘Some Recent Decisions in ICSID Cases’ (1991) 6 ICSID Rev 515. See also AMT v Zaire, Award (21 February 1997) paras 5.19, 5.22. 40 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 70. 41 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 102. For the opposite position, see ibid, Dissenting Opinion El Mahdi (14 April 1988) (1995) 3 ICSID Reports 168–170, 171–172, 185–186. 42 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 5.28. 43 ibid para 5.42.

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To avoid difficulties, it is advisable, however, to specify in advance which of the two methods is to be used, possibly providing for conciliation followed by arbitration, if necessary. If both methods are offered, it is desirable to indicate which party has the choice between them. Failure to clarify these points in advance may lead to surprising results. For instance, a host State that is aware of an investor’s intention to institute arbitration, or vice versa an investor who is aware of the host State’s intention to do the same, may rush to initiate conciliation, thereby blocking access to arbitration.

37

b) Fact-Finding Unlike conciliation and arbitration, fact-finding is not specifically mentioned as a means of international dispute settlement in the Convention, although a legal dispute under international law can encompass a dispute involving differences about facts,44 and although Art. 43 refers to several methods of gathering factual information. During the Convention’s preparation, there was some concern whether the reference to a ‘dispute of a legal character’ in the Preliminary Draft might not exclude questions of fact that are essential to the dispute’s resolution (History, Vol. II, pp. 399, 411, 565). As a result, it was suggested to mention questions of fact explicitly in the Convention (ibid., pp. 493, 502). These suggestions found their expression in the First Draft. Its definition of ‘legal dispute’ included disputes ‘concerning a fact relevant to the determination of a legal right or obligation’ (History, Vol. I, p. 116). This raised concerns that the establishment of facts might become an independent issue in conciliation or arbitration proceedings (History, Vol. II, pp. 655, 700, 703, 709). The reference to questions of fact was dropped in the Revised Draft and does not appear in the Convention. No independent fact-finding function in addition to conciliation and arbitration was ever suggested in the course of the Convention’s drafting. But it is clear that points of fact that are incidental to the legal questions to be decided must be clarified by the commission or tribunal (see paras. 102, 103 infra). While pure fact-finding does not have an independent role under the Convention, a separate fact-finding function was introduced in 1978 by way of the Additional Facility (paras. 12–15 supra). The Introductory Notes to the Additional Facility Rules point out that fact-finding was seen as a process of preventing rather than settling legal disputes and that this procedure is therefore fundamentally different from conciliation and arbitration. It is designed for the ‘pre-dispute’ stage and aims to prevent diverging views on factual issues from escalating to legal disputes. The Introductory Notes point out that this may be useful in a contractual framework as well as in contexts such as national or international guidelines or codes of conduct relating to foreign investment.45 This purpose may explain, in part, why the provision on fact-finding in Art. 2(c) of the Additional Facility Rules is devoid of any jurisdictional requirements except that the proceeding take place between a State and a national of another State (see paras. 13, 14 supra). Paragraphs (a) and (b) of Art. 2 of the Additional Facility Rules repeat or modify 44 See Mavrommatis Palestine Concessions (Greece v United Kingdom) PCIJ Rep Series A No 2, 11; Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (First Phase) (Advisory Opinion) [1950] ICJ Rep 65, 74 (defining a legal dispute as ‘a disagreement on a point of law or fact, a conflict of legal views or interests between two persons’). 45 See ICSID Additional Facility, Introductory Notes, (1993) 1 ICSID Reports 215. See also Broches (n 7) 379.

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the jurisdictional requirements ratione personae and ratione materiae of Art. 25 of the Convention by providing that conciliation and arbitration may be available even where only one side is a Contracting State or a national of a Contracting State, or where the dispute does not arise directly out of an investment. These requirements are to be monitored by the Secretary-General who, moreover, must ensure that the dispute does not arise from an ordinary commercial transaction (see paras. 486–488 infra).46 By contrast, Art. 2(c) of the Additional Facility Rules, dealing with fact-finding, contains none of these limitations. There is no requirement ratione personae, nor any indication of the types of facts that may be clarified. Neither do the Fact-Finding (Additional Facility) Rules, which are attached to the Additional Facility Rules as Schedule A, provide for any jurisdictional requirements other than consent. It follows that any State and a national of any other State, irrespective of whether these are Contracting States, may utilize fact-finding under the Additional Facility. An agreement to do so does not require the Secretary-General’s approval.47 This means that fact-finding under the Additional Facility is available regardless of either party’s link to the Convention.48 The scope of fact-finding ratione materiae under the Additional Facility is less obvious. But it is reasonable to assume, given the context of Art. 2(c) of the Additional Facility Rules, that the facts to be investigated must be of a nature that may potentially lead to a dispute that is subject to settlement under the Convention or the Additional Facility (see paras. 495–496 infra). Fact-finding under the Additional Facility must therefore relate to foreign investment relations between private and public actors that could, in principle, result in formal dispute settlement proceedings under the ICSID Convention or Additional Facility at a later stage. At the same time, it is not necessary that an arbitral tribunal or conciliation commission under the Convention or Additional Facility would already be competent to settle such a dispute. Clause 21 of the 1993 Model Clauses offers the following formula for an agreement to resort to fact-finding under the Additional Facility: Clause 21 The parties hereto hereby agree to submit to the International Centre for Settlement of Investment Disputes (hereinafter ‘the Centre’) for an inquiry under the Additional Facility (Fact-Finding) Rules of the Centre [the following questions of fact: . . .]/[any questions of fact related to the following matters: . . .].49

3. The Relevant Date for the Determination of Jurisdiction 44

The Convention designates certain critical dates at which requirements, such as the nationality requirements contained in Art. 25(2), must be fulfilled (see paras. 1161–1170, 1242–1261, 1409–1438 infra). In other contexts, the Convention itself

46 Art. 4(3) Additional Facility Rules. 47 See introductory comment to Clause 21 of the 1993 ICSID Model Clauses, (1997) 4 ICSID Reports 369. 48 Patrick Rambaud, ‘Note sur l’extension du système CIRDI’ (1983) 29 AFDI 290, 297. For a different view see Toriello (n 7) 77–78, who holds that at least one side must be either a Contracting State or a national of a Contracting State. 49 (1997) 4 ICSID Reports 369.

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does not specify the temporal requirements: e.g. the time the investment was made (see para. 172 infra), the time when the dispute has arisen (see para. 79 infra), the date of consent (see paras. 880–883 infra), the date at which the State party must have become a Contracting State (see paras. 503–509 infra), the date at which a Contracting State’s constituent subdivision or agency must have been designated to the Centre (see paras. 564–570 infra), the date at which the State of the investor’s nationality must have become a Contracting State (see paras. 611–613 infra), and the date at which the approval or notification under Art. 25(3) relating to the consent of a constituent subdivision or agency must have been given (see paras. 1462–1464 infra). Institution Rule 2(3) further defines the date of consent, but is otherwise silent on the date for the determination of jurisdiction. It provides that:

45

‘Date of consent’ means the date on which the parties to the dispute consented in writing to submit it to the Centre; if both parties did not act on the same day, it means the date on which the second party acted.

a) Registration of the Request as the Critical Date In the absence of a specific rule about critical dates, the date of the registration of the request for arbitration or conciliation is decisive for determining the Centre’s jurisdiction. This follows the principle generally accepted in international adjudication that jurisdiction will be determined by reference to the date on which judicial proceedings are instituted. This means that, in principle, on that date all jurisdictional requirements must be met. It also means that events taking place after that date until the date of the tribunal’s or commission’s decision on jurisdiction will, in principle, not affect jurisdiction.50 The ICJ has developed a jurisprudence constante to this effect.51 In the Arrest Warrant Case, it said: The Court recalls that, according to its settled jurisprudence, its jurisdiction must be determined at the time that the act instituting proceedings was filed. Thus, if the Court has jurisdiction on the date the case is referred to it, it continues to do so regardless of subsequent events. Such events might lead to a finding that an application has subsequently become moot and to a decision not to proceed to judgment on the merits, but they cannot deprive the Court of jurisdiction.52

50 For further details, see Christoph Schreuer, ‘At What Time Must Jurisdiction Exist?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 264, 266–270. 51 Questions of Interpretation and Application of the 1971 Montreal Convention Arising from the Aerial Incident at Lockerbie (Libya v United States) (Preliminary Objections) [1998] ICJ Rep 115, para 37, referring back to Nottebohm (Liechtenstein v Guatemala) (Preliminary Objection) [1953] ICJ Rep 111, 122; Right of Passage over Indian Territory (Portugal v India) (Preliminary Objections) [1957] ICJ Rep 125, 142. 52 Arrest Warrant of 11 April 2000 (DR Congo v Belgium) [2002] ICJ Rep 3, para 26. See more recently also Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) (Preliminary Objections) [2011] ICJ Rep 70, para 30; Alleged Violations of Sovereign Rights and Maritime Spaces in the Caribbean Sea (Nicaragua v Colombia) (Preliminary Objections) [2016] ICJ Rep 3, para 52; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v India) [2016] ICJ Rep 255, para 39; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v Pakistan) [2016] ICJ Rep 552, para 39; Obligations Concerning

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ICSID tribunals have applied the same principle consistently and determined whether the jurisdictional requirements in Art. 25 of the Convention were fulfilled on the date when ICSID proceedings were registered.53 As stated by the Tribunal in AmpalAmerican v Egypt: Article 25(1) of the ICSID Convention is very clear. The jurisdiction of the Centre is to be assessed at the time that jurisdiction is invoked, which is when the investor’s Request for Arbitration is registered by the Centre. When jurisdiction has crystallized, ‘no Party may withdraw its consent unilaterally’, says plainly Article 25(1).54

b) Impact of Subsequent Events on Existing Jurisdiction 49

ICSID tribunals have also, rather consistently, concluded that jurisdiction, once established when the request is registered, would not be affected by subsequent events. In respect of post-registration conduct of the Respondent, the Tribunal in Bayindir v Pakistan explained the rationale for the irrelevance of such conduct for purposes of jurisdiction as follows: The contrary would entail, amongst other things, that a unilateral act by the respondent to an arbitral proceeding could retrospectively affect (to the respondent’s own benefit) the arbitral tribunal’s jurisdiction which, according to the long-established jurisprudence of international tribunals of all kinds, is fixed as of the time the proceedings are commenced, and is not subject to ex post facto alteration.55

50

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ICSID tribunals have also determined that conduct by the claimant that occurred after ICSID proceedings had been initiated would not affect a tribunal’s jurisdiction that was present at the date of the registration of the request. Thus, in numerous cases, tribunals have applied this principle to cases where the claimants had divested themselves of, or had transferred, the rights that had given rise to the dispute after the institution of proceedings, thus rejecting the argument that the claimants were no longer the real parties in interest and therefore lacked standing (for further discussion, see paras. 729–744 infra). In CSOB v Slovakia, the Claimant had agreed to assign contractual claims against the Respondent to the Czech Republic. The Respondent argued that these assignments had transformed the Czech Republic into the real party in interest and that the Tribunal should dismiss the case for lack of jurisdiction because the Claimant no longer had the requisite standing under Art. 25(1) of the ICSID Convention. The Tribunal rejected this argument since the assignments had taken place after the institution of the ICSID proceedings: Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v United Kingdom) [2016] ICJ Rep 833, para 42. 53 In addition to the case law cited below, see Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Pierre Lalive, ‘The First “World Bank” Arbitration’ (Holiday Inns v. Morocco) – Some Legal Problems’ (1980) 51 BYBIL 123, 142–147); Goetz v Burundi, Award (10 February 1999) para 72; Zhinvali v Georgia, Award (24 January 2003) para 407; Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 58. For a non-ICSID investment treaty case, see eg Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) paras 267–269. 54 Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) para 168. 55 Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 178.

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In assessing the effect of the June 25, 1998 assignment (and of the April 24, 1998 assignment it superseded) on the Centre’s jurisdiction to hear this dispute, the Tribunal notes, in the first place, that the Request for Arbitration in the instant case was filed on April 17, 1997 and that the case was registered on April 25, 1997. Hence, at the time when these proceedings were instituted, neither of these assignments had been concluded. Second, it is generally recognized that the determination whether a party has standing in an international judicial forum for purposes of jurisdiction to institute proceedings is made by reference to the date on which such proceedings are deemed to have been instituted. Since the Claimant instituted these proceedings prior to the time when the two assignments were concluded, it follows that the Tribunal has jurisdiction to hear this case regardless of the legal effect, if any, the assignments might have had on Claimant’s standing had they preceded the filing of the case.56

In Vivendi v Argentina, one of the original Claimants had been Compagnie Générale des Eaux (CGE), which subsequently changed its name to Vivendi S.A., while the ICSID proceedings were pending. Vivendi S.A. then merged with several other companies to form Vivendi Universal. Vivendi Universal continued to hold the majority stake in the other named Claimant, Compañía de Aguas del Aconquija (CAA), a company incorporated in Argentina. Argentina’s allegation that there had been a change in CAA’s corporate ownership was rejected by the Tribunal.57 One of the reasons for this decision was as follows:

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[I]t is generally recognized that the determination of whether a party has standing in an international judicial forum, for purposes of jurisdiction to institute proceedings, is made by reference to the date on which such proceedings are deemed to have been instituted. ICSID Tribunals have consistently applied this Rule . . . The consequence of this rule is that, once established, jurisdiction cannot be defeated. It simply is not affected by subsequent events. Events occurring after the institution of proceedings . . . cannot withdraw the Tribunal’s jurisdiction over the dispute.58

The same position was taken in a number of subsequent cases, thus confirming that the claimant’s conduct after the initiation of ICSID proceedings would not defeat the Centre’s jurisdiction if it had existed on the date of the registration of the request.59 There are only very few cases that are at odds with the otherwise consistent jurisprudence that events subsequent to the initiation of the proceedings could not defeat jurisdiction that existed when the request was registered. The Tribunal in Loewen v United States, an ICSID Additional Facility proceeding based on the NAFTA, instead postulated a continuous nationality requirement that had to persist until a final decision was taken and declined jurisdiction because of a bankruptcy-induced reorganization of the Claimant that took place after the initiation of the case (see also paras. 742–743 infra).60 The Tribunal in Marfin and others v Cyprus dismissed claims by two Claimants who

56 57 58 59

CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 31. Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 82. ibid paras 60, 63 (international references omitted). See El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 135–136; Enron v Argentina, Award (22 May 2007) paras 196–198, 396; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 255–259. See further paras 729–744 infra. 60 Loewen v United States (AF), Award (26 June 2003) paras 220–240.

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passed away after the initiation of the proceedings, concluding that they no longer qualified as foreign nationals under Art. 25(2)(a) of the ICSID Convention (see also para. 732 infra).61 In Azpetrol v Azerbaijan, the Tribunal concluded that it lacked jurisdiction because the dispute had been settled between the disputing parties after ICSID proceedings had been initiated (see also para. 78 infra).62 All three decisions, however, if read to extend the need for jurisdictional requirements under Art. 25 to exist beyond the date when ICSID proceedings are initiated, are incompatible with the principle that subsequent events cannot defeat the Centre’s jurisdiction if it existed when the request was registered.

c) Subsequent Compliance with Jurisdictional Requirements 55

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The question of the impact of subsequent events on the Centre’s jurisdiction that once existed when the request was registered has to be distinguished from the question of whether it is possible that jurisdictional requirements that are missing at the time proceedings are instituted can be complied with before a tribunal or conciliation commission makes a determination on jurisdiction.63 Situations of this type may arise, for example, if a treaty providing for jurisdiction enters into force, or waiting periods, or requirements to pursue negotiations or domestic litigation, lapse only after the registration of the request. Applying the principle that only the time of the registration of the request is the critical date for determining jurisdiction in such situations could have the paradoxical consequence that jurisdiction would need to be declined, even though the missing jurisdictional requirement has been complied with at the time a tribunal or conciliation commission makes a determination of its competence. A claimant receiving a decision declining jurisdiction would then be able immediately to institute new proceedings without facing the jurisdictional objection in question. To decline jurisdiction in such a situation would be, as stated by the Tribunal in Casinos Austria v Argentina, ‘an exaggerated procedural formalism that is incompatible with the fair administration of international justice in investment treaty disputes and the principle of good faith, which govern the settlement of international disputes.’64 In such situations, it should therefore be accepted as sufficient that the jurisdictional requirements of Art. 25 are fulfilled when the tribunal or conciliation commission decides on its competence, unless an earlier or additional date, as in the case of determining nationality under Art. 25(2), is expressly provided for. This position is in line with an important strand of ICJ cases, where the Court accepted to exercise jurisdiction, even though certain jurisdictional requirements were only satisfied after the proceedings had been instituted. Already in the Mavrommatis Palestine Concessions case, the Court’s predecessor, the Permanent Court of International Justice (PCIJ), found that a jurisdictional requirement missing at the time

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Marfin and others v Cyprus, Award (26 July 2018) paras 613–615. Azpetrol v Azerbaijan, Award (8 September 2009) para 105. See Schreuer (n 50) 271–277. Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 319.

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of the institution of proceedings, in that case the ratification of a treaty, could be fulfilled after seizing the Court.65 In Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Croatia v Serbia), the ICJ found that its jurisdiction was not affected by the fact that Serbia had only become a party to the ICJ’s Statute after the proceedings had been instituted. As the Court stated:

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What matters is that, at the latest by the date when the Court decides on its jurisdiction, the applicant must be entitled, if it so wishes, to bring fresh proceedings in which the initially unmet condition would be fulfilled. In such a situation, it is not in the interests of the sound administration of justice to compel the applicant to begin the proceedings anew — or to initiate fresh proceedings — and it is preferable, except in special circumstances, to conclude that the condition has, from that point on, been fulfilled.66

In one case, the ICJ departed from the approach to accept compliance with jurisdictional requirements subsequently to the initiation of the proceedings. In Racial Discrimination (Georgia v Russia), the Court, without discussing the possibility of conducting negotiations after the case had been initiated, found that the negotiations required by Art. 22 of the International Convention on the Elimination of all Forms of Racial Discrimination (CERD) were not only a condition for its jurisdiction, but had to be complied with when proceedings were instituted.67 This decision, however, is put into perspective by a forceful dissent that, inter alia, pointed to the Court’s departure from its prior jurisprudence that compliance with a jurisdictional requirement may take place after the institution of proceedings;68 the decision may also have been influenced by the particular circumstances of the case rather than by a desire of the Court to depart from its earlier approach as a matter of principle.69

65 Mavrommatis Palestine Concessions (Greece v United Kingdom) PCIJ Rep Series A No 2, 34 (‘Even if the grounds on which the institution of proceedings was based were defective for the reason stated, this would not be an adequate reason for the dismissal of the applicant’s suit. The Court, whose jurisdiction is international, is not bound to attach to matters of form the same degree of importance which they might possess in municipal law. Even, therefore, if the application were premature because the Treaty of Lausanne had not yet been ratified, this circumstance would now be covered by the subsequent deposit of the necessary ratifications’). 66 Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Croatia v Serbia) (Preliminary Objections) [2008] ICJ Rep 412, para 85. Similarly, ibid paras 87 and 89. See also Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v Yugoslavia) (Preliminary Objections) [1996] ICJ Rep 595, para 26. 67 Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) (Preliminary Objections) [2011] ICJ Rep 70, para 141. 68 Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) (Preliminary Objections) Joint Dissenting Opinion of President Owada, Judges Simma, Abraham and Donoghue and Judge ad hoc Gaja [2011] ICJ Rep 142, para 35. In addition, it has been pointed out that there was no indication that Georgia had made an attempt to fulfill the negotiation requirement subsequently to initiating the case, which may distinguish the case from the Court’s earlier jurisprudence. See Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 327. Similarly, in Armed Activities on the Territory of the Congo (New Application: 2002) (DR Congo v Rwanda), [2006] ICJ Rep 6, paras 88–93, no argument was put forward that certain of the conditions under Art. 29 of the Convention on Discrimination against Women had been met after the seisin of the Court. 69 Cf Manuel Casas, ‘Functional Justiciability and the Existence of a Dispute: A Means of Jurisdictional Avoidance?’ (2019) 10 JIDS 599.

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The majority of ICSID tribunals has adopted the same rationale as the ICJ in the majority of its cases and accepted that certain jurisdictional requirements could be complied with subsequently to the initiation of ICSID proceedings, thus rejecting objections that jurisdiction did not exist when the request for arbitration was registered.70 In TSA Spectrum v Argentina, for example, the Tribunal accepted its competence, even though the Claimant had not complied with the requirement contained in the Argentina–Netherlands BIT to litigate in domestic courts for eighteen months before initiating ICSID proceedings.71 In its view, it would be highly formalistic now to reject the case on the ground of failure to observe the formalities in Article 10(3) of the BIT, since a rejection on such ground would in no way prevent TSA from immediately instituting new ICSID proceedings on the same matter.72

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The Tribunal in Teinver v Argentina equally accepted compliance with a comparable domestic-courts-first clause in the Argentina–Spain BIT after the registration of ICSID proceedings: while Claimants concede that the 18-month local court period had not lapsed at the time they filed their Request for Arbitration, they are correct to note that 18 months have subsequently passed, and the local suit remains pending. As such, the core objective of this requirement, to give local courts the opportunity to consider the disputed measures, has been met. To require Claimants to start over and re-file this arbitration now that their 18 months have been met would be a waste of time and resources.73

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The Tribunal in Philip Morris v Uruguay, basing itself on the predominant approach taken by the PCIJ and the ICJ, and addressing compliance with a similar domesticcourts-first clause, also explained that jurisdictional requirements could be complied with until a tribunal would make a determination on its competence: [E]ven if the requirement were regarded as jurisdictional, the Tribunal concludes that it could be, and was, satisfied by actions occurring after the date the arbitration was instituted. The Tribunal notes that the ICJ’s decisions show that the rule that events subsequent to the institution of legal proceedings are to be disregarded for jurisdictional purposes has not prevented that Court from accepting jurisdiction where requirements for jurisdiction that were not met at the time of instituting the proceedings were met subsequently (at least where they occurred before the date on which a decision on jurisdiction is to be taken).74

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Other ICSID tribunals have followed a similar approach and accepted that jurisdictional requirements could be fulfilled after the initiation of ICSID proceedings in order to avoid excessive formalism and to provide for the efficient and fair administration of 70 In addition to the cases cited below, cf also Daimler v Argentina, Award (22 August 2012) para 190 (suggesting that it may have accepted jurisdiction if ‘the dispute has, at least in the interim, been litigated for 18 months before the Argentine domestic courts’). For a non-ICSID case to the same effect, see Pope and Talbot v Canada (UNCITRAL), Award on Preliminary Motion (24 February 2000) para 18 (accepting that a waiver of domestic proceedings required under Art. 1121 of the NAFTA could be effected after proceedings have been initiated). 71 TSA Spectrum v Argentina, Award (19 December 2008) para 108. 72 ibid para 112. 73 Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 135 (footnote omitted). 74 Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 144 (footnote omitted).

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justice in the settlement of investment disputes under the Convention.75 For similar reasons, some ICSID tribunals have also decided to suspend the proceedings early on in order to allow the claimant to complete a missing jurisdictional requirement.76 A few ICSID tribunals, however, took a different approach and declined to rely on circumstances that occurred after the start of proceedings for a positive finding on jurisdiction.77 In Tradex v Albania, the Tribunal declined to base its jurisdiction on the Albania–Greece BIT, which had entered into force after the Request for Arbitration had been submitted to ICSID, finding that ‘both in national and international procedural law jurisdiction must mostly be established at the time of filing the claim.’78 It also pointed out, however, that the BIT itself provided that only disputes that arose after its entry into force could be submitted to ICSID.79 The Tribunal in Tulip v Turkey declined jurisdiction because the Claimant had initiated ICSID proceedings earlier than the one-year waiting period stipulated in the Netherlands–Turkey BIT and even though that period had meanwhile lapsed. The Tribunal stated:

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It would be to rewrite the BIT and to confound its plain meaning to accept that a party may file its Request without notice and then perfect the breach after the arbitration commenced. In the absence of a waiver (and, possibly, circumstances giving rise to estoppel), which do not arise here, the Tribunal does not have jurisdiction if the notice requirements are not satisfied before the arbitration is commenced. Absent a waiver, actions, or inactions, of the Parties after the commencement of arbitration will not perfect a defective commencement.80

The Tribunal in Kiliç v Turkmenistan, in turn, declined to stay the proceedings, as requested by the Claimant, in order to allow compliance with a provision in the Turkey– Turkmenistan BIT that required the investor to litigate in domestic courts for a specific period of time.81 75 See Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 135; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 318–319, 337; Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018) para 139. 76 See Western NIS v Ukraine, Order (16 March 2006) paras 5–8 (suspending the proceedings to allow the Claimant to meet what the Tribunal considered as a jurisdictional requirement under the applicable Ukraine–United States BIT, namely to give proper notice to the Respondent and attempt to resolve the dispute through negotiation during a six-month period). See also SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 171–177 (staying the proceedings in order to allow the Claimant to fulfill a requirement concerning the admissibility of its claim consisting in compliance with an exclusive contractual forum selection clause to resolve a preliminary issue). For further discussion see also Pauker (n 18) 22–26. On the power to stay proceedings, see Art. 26, paras 46–51; Art. 41, para 29; Art. 44, paras 8, 65. 77 For non-ICSID cases declining to consider that jurisdictional requirements could be complied with after the initiation of arbitration proceedings, see Detroit International Bridge v Canada (UNCITRAL), Award on Jurisdiction (2 April 2015) para 321; Renco v Peru (UNCITRAL), Partial Award on Jurisdiction (15 July 2016) paras 145–160 (both considering that a waiver of domestic proceedings could not be effected after arbitral proceedings had been initiated). See also Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) para 266. 78 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 58. 79 ibid. The Tribunal, however, based its jurisdiction on Albania’s Investment Law of 1993. 80 Tulip v Turkey, Decision on Jurisdiction (5 March 2013) para 91. 81 Kiliç v Turkmenistan, Award (2 July 2013) para 6.4.2. But see also ibid, Separate Opinion Park (20 May 2013) para 8 (reasoning that proceedings should have been suspended to allow for compliance with the domestic courts requirement).

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Overall, however, in the absence of specific language in the instrument containing the disputing parties’ consent to the jurisdiction of the Centre requiring that certain jurisdictional requirement must be met when the request is registered, there is nothing in the ICSID Convention that would prevent taking into account compliance with jurisdictional requirements after the registration of a request for arbitration or conciliation. In fact, the more convincing interpretation would militate for taking into account subsequent developments to allow for a positive finding in respect of the Centre’s jurisdiction if the requirement in question has meanwhile been fulfilled and the claimant could reinitiate the identical proceedings without facing the jurisdictional obstacle in question. B. ‘. . . shall extend to any legal dispute . . .’

1. General Considerations 68

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The existence of a ‘legal dispute’ is one of the objective conditions for the Centre’s jurisdiction. It indicates that, unlike some other international courts and tribunals, such as the ICJ or the International Tribunal for the Law of the Sea (ITLOS), the Centre does not have jurisdiction for administering non-contentious proceedings, such as those for obtaining an advisory opinion.82 Instead, ICSID’s jurisdiction is exclusively of an adversarial nature: a claimant must advance legal claims that are opposed by the respondent. Whether the claim is asserted rightly or wrongly, that is, whether the claim has merit, is irrelevant for purposes of jurisdiction.83 The existence of a legal dispute is occasionally argued about in ICSID proceedings, but this condition has presented few difficulties in practice. The notion of ‘legal dispute’ itself is not defined in the ICSID Convention.84 At the same time, this notion is not unique in circumscribing the Centre’s jurisdiction. It is equally found in provisions circumscribing the jurisdiction of other international courts and tribunals, most importantly in Art. 36(2) of the ICJ Statute, and in compromissory clauses in international treaties, including in international investment agreements

82 For suggestions during the Convention’s drafting to equip the Centre with an advisory function, see Art. 1, para 3; Art. 42, para 251. 83 See Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 67, 74, 99; AES v Argentina, Decision on Jurisdiction (26 April 2005) para 69; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 126; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) para 21; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 35–37; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 178; Total v Argentina, Decision on Jurisdiction (25 August 2006) para 87; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 75; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 124; Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 137–138; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 86. See also Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014)) paras 181, 186, 206–265 (addressing the distinction between the question whether a dispute exists and whether the claimant has forwarded a prima facie plausible claim). On the lack of a prima facie claim as an obstacle to the admissibility of the claim, see further Art. 41, paras 105–115. Cf also East Timor (Portugal v Australia) [1995] ICJ Rep 90, para 22; Certain Property (Liechtenstein v Germany) (Preliminary Objections) [2005] ICJ Rep 6, paras 20–27. 84 In this sense also Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 35; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) para 127; Lundin v Tunisia, Award (22 December 2015) para 143.

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(IIAs).85 Keeping in mind the differences between the various international courts and tribunals and the varying contexts and objects and purposes in which compromissory clauses are included in international treaties,86 it is appropriate carefully to draw on the interpretations of the notions of ‘dispute’ or ‘legal dispute’ in those other treaties, in particular in Art. 36(2) of the ICJ Statute, in order to get an understanding of the same term in the ICSID Convention.87 Such a comparative exercise is not least warranted to get an understanding of the ordinary meaning States attribute to the meaning of ‘legal dispute.’88 The ICJ, following a statement of its predecessor in the Mavrommatis Palestine Concessions case, has defined a dispute as ‘a disagreement on a point of law or fact, a conflict of legal views or interests between two persons.’89 It has added that for a dispute to exist, ‘[i]t must be shown that the claim of one party is positively opposed by the other.’90 For the ICJ, the existence of a dispute is a matter for ‘objective 85 This encompasses provisions in investment treaties relating to investor–State and State-to-State arbitration. For a discussion of the notion of dispute in the context of a State-to-State arbitration under an investment treaty, see Ecuador v United States, Award (29 September 2012) paras 190–228. 86 For a call cautioning against ‘naïvely rely[ing] on ICJ jurisprudence’ in this respect, see Andreas Kulick, ‘Let’s (Not) (Dis)Agree to Disagree!? Some Thoughts on the “Dispute” Requirement in International Adjudication’ (2020) 19 LPICT 79, 101–103. 87 For parallels between Art. 25(1) of the ICSID Convention and the practice of the ICJ on the notion of ‘legal dispute,’ see Christoph Schreuer, ‘What Is a Legal Dispute?’ in Isabelle Buffard and others (eds), International Law between Universalism and Fragmentation: Festschrift in Honor of Gerhard Hafner (Martinus Nijhoff 2009) 959. For parallels concerning the notion of ‘legal dispute’ in Art. 25(1) and in compromissory clauses in investment treaties, see National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) para 160; Alpha Projektholding v Ukraine, Award (8 November 2010) para 246. 88 Cf Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) [2011] ICJ Rep 70, para 29 (concerning the interpretation of the notion of ‘dispute’ in a compromissory clause in line with the generally understood meaning of the term). In investment arbitrations, it has occasionally been argued that the notion of dispute was particularly narrow. This argument, however, has rightly been rejected; see Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) paras 128–129. 89 See Mavrommatis Palestine Concessions (Greece v United Kingdom) PCIJ Rep Series A No 2, 11; Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (First Phase) (Advisory Opinion) [1950] ICJ Rep 65, 74; South West Africa (Liberia v South Africa) (Preliminary Objections) [1962] ICJ Rep 319, 328; Northern Cameroons (Cameroon v United Kingdom) [1963] ICJ Rep 15, 27; Applicability of the Obligation to Arbitrate under Section 21 of the United Nations Headquarters Agreement of 26 June 1947 (Advisory Opinion) [1988] ICJ Rep 12, para 35; East Timor (Portugal v Australia) [1995] ICJ Rep 90, 99–100; Certain Property (Liechtenstein v Germany) (Preliminary Objections) [2005] ICJ Rep 6, para 24; Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) [2011] ICJ Rep 70, para 30; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v India) [2016] ICJ Rep 255, para 34; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v Pakistan) [2016] ICJ Rep 552, para 34; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v United Kingdom) [2016] ICJ Rep 833, para 37. Generally on the ICJ’s approach, see Christian Tomuschat, ‘Article 36’ in Andreas Zimmermann and Christian J Tams (eds), The Statute of the International Court of Justice: A Commentary (3rd edn, OUP 2019) paras 8–18; Casas (n 69). 90 South West Africa (Liberia v South Africa) (Preliminary Objections) [1962] ICJ Rep 319, 328; Certain Property (Liechtenstein v Germany) (Preliminary Objections) [2005] ICJ Rep 6, para 24; Armed Activities on the Territory of the Congo (New Application: 2002) (DR Congo v Rwanda) [2006] ICJ Rep 6, para 90; Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) [2011] ICJ Rep 70, para 30; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v

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determination’ undertaken by the Court itself.91 It is not sufficient that the claimant merely claims that a dispute exists. ICSID tribunals have adopted similar descriptions of ‘disputes,’ often relying on the ICJ’s definition.92

2. The Existence of a Dispute 71

The existence of a dispute may be in doubt in several ways. An open question may not have matured into a dispute between the parties. Or a difference of opinion may not be sufficiently concrete to amount to a dispute that is susceptible to conciliation or arbitration. It may also be that there has been a dispute that has since become moot.

a) Need for Prior Communication 72

The existence of a dispute presupposes a minimum of communication between the parties prior to initiating proceedings before the Centre. The matter must have been taken up with the other party, which must have positively opposed the claimant’s position, either expressly or by implication.93 Thus, failure to respond to a specific demand within a reasonable time would be sufficient to establish the existence of a dispute, if an answer can be expected and consequently the party’s silence interpreted as a rejection of the claimant’s position.94 In AAPL v Sri Lanka, the Tribunal noted that the claim remained outstanding without a reply for more than the three-month negotiation period provided for in the applicable investment treaty and that hence AAPL had become entitled to institute the proceedings.95 However, it is not necessary that other

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India) [2016] ICJ Rep 255, paras 34, 38. Cf also Ecuador v United States, Award (29 September 2012) paras 208–224. Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (First Phase) (Advisory Opinion) [1950] ICJ Rep 65, 74; Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) [2011] ICJ Rep 70, para 30; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v India) [2016] ICJ Rep 255, para 36. See eg Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 93, 94; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras 106, 107; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 159; Lucchetti v Peru, Award (7 February 2005) para 48; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 302, 303; AES v Argentina, Decision on Jurisdiction (26 April 2005) para 43; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 61; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 29; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 80; MCI v Ecuador, Award (31 July 2007) para 63; Vieira v Chile, Award (21 August 2007) paras 245–249; ATA Construction v Jordan, Award (18 May 2010) para 99; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) paras 127–129; Burlington v Ecuador, Decision on Jurisdiction (2 June 2010) para 289; ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) para 58; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 119; Arif v Moldova, Award (8 April 2013) para 339; Gambrinus v Venezuela, Award (15 June 2015) para 198; Valores Mundiales v Venezuela, Award (25 July 2017) para 231; EuroGas and Belmont v Slovakia, Award (18 August 2017) para 437. See also Lao Holdings v Laos (AF), Decision on Jurisdiction (21 February 2014) para 120; Crystallex v Venezuela (AF), Award (4 April 2016) para 447; Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) paras 167–169, 186. See Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 96; Lucchetti v Peru, Award (7 February 2005) para 48; Vieira v Chile, Award (21 August 2007) para 249; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) para 129; Valores Mundiales v Venezuela, Award (25 July 2017) para 231. See also Lao Holdings v Laos (AF), Decision on Jurisdiction (21 February 2014) para 121. Cf also Ecuador v United States, Award (29 September 2012) paras 216–224. AAPL v Sri Lanka, Award (27 June 1990) para 3.

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means of settlement, notably negotiations, have been utilized unsuccessfully before the Centre is seized of a dispute, unless the terms of the consent provide for the prior use of other means of settlement (see paras. 981–996 infra).96 Similarly, the existence of pending negotiations between the parties, or proceedings pending in domestic courts, do not preclude the existence of a dispute in the sense of Art. 25(1) of the ICSID Convention and do not, in and of themselves, constitute an obstacle to the Centre’s jurisdiction.97 Under certain circumstances, one may even be able to dispense with communications prior to instituting proceedings altogether and still conclude that a dispute exists. In situations where contacts between investor and host State are relatively frequent, in particular when a contract or concession exists between the parties, the crystallization of a dispute may take some back and forth in the communications between the parties even after the events giving rise to the dispute have taken place.98 By contrast, in situations of greater distance, in particular when general regulations or legislation is passed that is alleged to affect an investor, positive opposition may result immediately when the aggrieved investor opposes the measure adopted by the host State, including by initiating proceedings before the Centre.99 If no acceptance by the State of the investor’s claim can reasonably be expected, for example in case of a legislative measure from which no exemption can be granted by the executive, it would be a senseless formality to require the investor to notify its opposition to the State’s measure in order to bring a dispute into existence that could only then, in a second step, be brought before the Centre. In such cases, no prior communication between the investor and the host State would seem necessary as far as Art. 25(1) of the Convention is concerned.

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b) Practical Relevance of the Parties’ Disagreement The disagreement between the parties must also have some practical relevance for their relationship and must not be purely theoretical. It is not the task of the Centre to clarify legal questions in abstracto. The dispute must relate to clearly identified issues between the parties and must not be merely academic. There must be a concrete claim with practical consequences for the relations of the parties.100 This is not to say that a 96 See CF Amerasinghe, ‘The Jurisdiction of the International Centre for the Settlement of Investment Disputes’ (1979) 19 Indian JIL 166, 170–172. In particular, the existence of a dispute, on the one hand, and compliance with the procedural requirements a treaty establishes before initiating proceedings before the Centre through waiting clauses or clauses requiring amicable dispute resolution, conciliation, or recourse to domestic courts, on the other hand, are legally separate issues. 97 Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 158–160; AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 62–71; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 97; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 108; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 93. 98 Cf Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 96; Burlington v Ecuador, Decision on Jurisdiction (2 June 2010) paras 291–316; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 110; Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 203; Levy and Gremcitel v Peru, Award (9 January 2015) para 167 (noting that ‘in theory, the moment when the challenged acts occurred is not necessarily the same as the one when the dispute arose . . . In the Tribunal’s view, a breach or violation does not become a “dispute” until the injured party identifies the breach or violation and objects to it’). 99 Cf Philip Morris v Australia (UNCITRAL), Award on Jurisdiction and Admissibility (17 December 2015) para 532. 100 Cf Ecuador v United States, Award (29 September 2012) paras 190–207.

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specific action must have been taken by one side, or that the dispute must have escalated to a certain level of confrontation, but merely that it must be of immediate interest to the parties. The dispute must go beyond general grievances and must be susceptible of being stated in terms of a concrete claim.101 In some cases, the respondents contended that the claims were hypothetical and hence there was no dispute. In Enron v Argentina,102 some provinces of Argentina had assessed taxes that the Claimants described as exorbitant and enough to wipe out the entire value of their investment. Argentina argued that the claim was hypothetical since the taxes had been assessed, but not collected. The Claimants pointed out that the taxes had not been collected only because there was a temporary injunction ordered by the Supreme Court. The Tribunal refused to accept that under these circumstances the dispute was merely hypothetical. It said: The Tribunal is mindful of the fact that once the taxes have been assessed and the payment ordered there is a liability of the investor irrespective of the actual collection of those amounts. This means that a claim seeking protection under the Treaty is not hypothetical but relates to a very specific dispute between the parties.103

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In other cases, the allegedly hypothetical nature of the claims related to the lack of specifying the quantum of damages when initiating proceedings. For example, in Pan American v Argentina, the Respondent complained that the damages claimed were hypothetical, conjectural, and speculative.104 The Tribunal found that a certain degree of uncertainty about the quantum of damages was acceptable at the jurisdictional stage. Provided the Claimants were able to demonstrate prima facie that some damage had occurred, there was no obstacle to jurisdiction.105 In several other cases, tribunals reached similar conclusions in respect of the lack of specification of damages when initiating proceedings.106 Several tribunals also concluded that claims were not premature or hypothetical only because negotiations or proceedings in domestic courts were still pending when proceedings before the Centre were initiated.107

c) Continuing Existence of the Dispute 77

A dispute may clearly have existed, but one party may feel that it has taken steps to satisfy any claims that the other party may have had. In AGIP v Congo, the Government

101 See Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 94; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 106; AES v Argentina, Decision on Jurisdiction (26 April 2005) para 43 (all referring to the First Edition of this Commentary). 102 Enron v Argentina, Decision on Jurisdiction (14 January 2004). 103 ibid para 74. See also Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) paras 178–180 (holding that the breach of substantive obligations must not necessarily have occurred for there to be a dispute about the parties’ rights and obligations). 104 Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 162–168. 105 ibid paras 177–179. 106 Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 93; Total v Argentina, Decision on Jurisdiction (25 August 2006) paras 87–89; Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 135–141. Cf also Alghanim v Jordan, Award (14 December 2017) paras 125–127; Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) paras 178–179. 107 See the references supra n 97. See also Unglaube v Costa Rica, Award (16 May 2012) paras 289–295.

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declared before the ICSID tribunal, after having expropriated the Claimant without compensation, that there was no longer any dispute since it had recognized the principle of compensation.108 The Tribunal found that the declarations made by the Government were so lacking in precision that the continuing existence of the dispute was not in doubt. It noted that the Claimant had not, in fact, received any compensation. In addition, the claim was also directed at damages for losses resulting from the Government’s violations of its contractual obligations.109 By contrast, the Tribunal in Azpetrol v Azerbaijan found that the dispute had ceased to exist because the parties had agreed on a settlement subsequently to the initiation of the arbitral proceedings, even though there was continued disagreement as to whether the settlement was binding.110 The Tribunal concluded that the disappearance of the dispute after the start of the proceedings resulted in a lack of jurisdiction. In the Tribunal’s view, ‘there is no “legal dispute” between the Claimants and the Respondent as required by Article 25(1) of the ICSID Convention . . . and, consequently, no jurisdiction to hear the claim.’111 While the Tribunal’s ultimate conclusion not to make a decision on the claim merits support, the reasoning that this is due to a lack of jurisdiction in the sense of Art. 25 is questionable, given the principle that the Centre’s jurisdiction, once established on the date of the registration of the request, is not affected by subsequent events (see paras. 49–54 supra).112

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3. The Time of the Dispute The Convention does not specify at what time a dispute must have arisen in order for the Centre to have jurisdiction. In accordance with the general rule on the critical date for the fulfillment of jurisdictional requirements (see paras. 46–48 supra), and in line with the jurisprudence of the ICJ on this point,113 the dispute must exist at the time the request for arbitration or conciliation is registered.114 At what time the dispute has arisen before that date is irrelevant from the perspective of the ICSID Convention. It is even possible that the dispute had already existed when the ICSID Convention entered into force in relation to the disputing parties (see also para. 172 infra).115 108 109 110 111 112

AGIP v Congo, Award (30 November 1979) paras 38, 39. ibid paras 42, 95–97. Azpetrol v Azerbaijan, Award (8 September 2009) para 105. ibid. Similarly, in ICJ jurisprudence, the subsequent disappearance of the dispute was not characterized as a lack of jurisdiction, but rather as a matter of the admissibility of the claim or its merits. See Nuclear Tests (Australia v France) [1974] ICJ Rep 253, paras 55–59; Nuclear Tests (New Zealand v France) [1974] ICJ Rep 457, paras 58–62; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v India) [2016] ICJ Rep 255, para 40. See also Arrest Warrant of 11 April 2000 (DR Congo v Belgium) [2002] ICJ Rep 3, para 26. 113 Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) [2011] ICJ Rep 70, para 30; Obligations Concerning Negotiations Relating to Cessation of the Nuclear Arms Race and to Nuclear Disarmament (Marshall Islands v India) [2016] ICJ Rep 255, para 39 (both with further references to earlier ICJ cases). 114 ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) para 58. See also Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 161 (considering that ‘the dispute must exist at the time of the notice of arbitration[,] the time the dispute is filed with the ICSID Secretariat and at the time of registration’). 115 Arif v Moldova, Award (8 April 2013) para 340; see also WalAm Energy v Kenya, Award (10 July 2020) para 60. But see the unclear statement in Cortec Mining v Kenya, Award (22 October 2018) para 257, where the Tribunal stated obiter that ‘in order for the Centre to have jurisdiction over a dispute . . . according to Article 25 . . . one must add a condition resulting from a general principle of law, which is

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More important for determining whether a dispute is within the temporal limits of the Centre’s jurisdiction are the terms of the parties’ consent. Consent can be given for the settlement of a specific dispute that already exists between the parties; it can be given to settle future disputes only; or it may cover any dispute, embracing existing as well as future disputes (see paras. 767–774 infra). In addition, BITs often contain clauses that limit the host State’s consent ratione temporis (see paras. 944–947 infra). While the parties’ consent therefore may establish limitations of a temporal nature concerning the Centre’s jurisdiction, the Convention itself does not impose jurisdictional requirements ratione temporis relating to the dispute.116 The Centre’s limitation to adversarial proceedings only requires that a dispute must already exist, when the proceedings are instituted, and must not be moot by the time a tribunal renders an award.

4. The Legal Nature of the Dispute 81

The jurisdiction of the Centre does not extend just to any dispute. According to Art. 25(1), the dispute that divides the parties must be of a legal nature, thus excluding non-legal disputes from the Centre’s jurisdiction.117 This raises the question of how to distinguish legal and non-legal disputes (see paras. 82–95 infra). The limitation of the Centre’s jurisdiction to legal disputes also raises wider issues concerning justiciability (see paras. 96–101 infra) as well as the Convention’s relation to the finding of facts (see paras. 102–103 infra). The need for the dispute to be of a legal nature further raises the question as to which extent this limits the parties in making use of non-legal means of dispute settlement (see paras. 104–112 infra).

a) Legal and Non-Legal Disputes 82

The requirement that a dispute must be ‘legal’ in order to qualify for settlement before the Centre gave rise to much debate during the Convention’s preparation. The Working Paper contained no reference to the dispute’s legal nature, but it was pointed out that a clarification should be added to exclude political or commercial disputes (History, Vol. II, pp. 54, 83, 96). The Preliminary Draft referred to a ‘dispute of a legal character’ (History, Vol. I, p. 112). These words were explained as excluding moral, political, or commercial claims (History, Vol. II, pp. 203, 259, 267, 322, 397), or as expressing the requirement that a legal right or obligation had to be involved (ibid., pp. 267, 285, 322, 565). A number of delegates from capital-exporting countries found the reference to legal disputes too limiting or too confusing and suggested its deletion (ibid., pp. 88, 322, 396, 411, 412, 565) or found a definition unnecessary (ibid., pp. 395, 401). Others asked for more clarification (ibid., pp. 376, 395, 493, 495). The subsequent First Draft not only retained the reference to legal disputes, but added the following definition: ‘legal dispute’ means any dispute concerning a legal right or obligation or concerning a fact relevant to the determination of a legal right or obligation.118

the principle of non-retroactivity . . . the ICSID Convention must have been applicable at the relevant time,’ without explaining however what, in its view, the relevant point in time is. 116 See also Amerasinghe (n 96) 171. 117 See also CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 26. 118 History, Vol I, 116.

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In reaction to this draft, some delegates stated that they did not find this definition useful and that it should be deleted (History, Vol. II, pp. 701, 707). Others offered alternative definitions (ibid., pp. 707, 833, 835). Yet another group suggested the deletion of the limitation to legal disputes altogether (ibid., pp. 702, 831). Eventually, it was decided by a large majority to retain the qualification ‘of a legal character,’ but without any further definition (ibid., p. 826). The change from ‘dispute of a legal character’ to ‘legal dispute’ in the Convention’s final version appears to be one of pure drafting convenience. The Report of the Executive Directors adds the following clarification:

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26. . . . The expression ‘legal dispute’ has been used to make clear that while conflicts of rights are within the jurisdiction of the Centre, mere conflicts of interests are not. The dispute must concern the existence or scope of a legal right or obligation, or the nature or extent of the reparation to be made for breach of a legal obligation.119

Commentators on the ICSID Convention have endeavored to come to terms with the concept of ‘legal dispute’ by listing typical factual situations and the consequences they entail.120 These include expropriation, breach or termination of an agreement, or the application of tax and customs provisions. While these descriptions are undoubtedly useful, it must be borne in mind that fact patterns alone do not determine the legal character of a dispute. Rather, it is the type of claim that is put forward, and its framing by the claimant, that decides whether a dispute is legal or not. Thus, it is entirely possible to react to a breach of agreement by relying on moral standards, by invoking concepts of justice, or by pointing to the lack of political and economic wisdom of such a course of action. The dispute will only qualify as legal, however, if legal remedies, such as restitution or damages, are sought, and if legal rights based on, for example, contracts, treaties, or legislation, are invoked. Consequently, it is largely in the hands of the claimant to present the dispute in legal terms.121 Institution Rule 2(1)(e) makes it incumbent upon the claimant to demonstrate the legal nature of the dispute by directing that the Request for Arbitration shall ‘contain information concerning the issues in dispute indicating that there is, between the parties,

119 (1993) 1 ICSID Reports 23, 28. This statement is frequently cited by ICSID tribunals as authority. See Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 47; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 58; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 125; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) para 20; Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Jurisdiction (19 December 2005) (2011) 25 ICSID Rev 173, 175–176, para 26; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 74; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 95; Meerapfel v Central African Republic, Award (12 May 2012) para 234; Perenco v Ecuador, Decision on Jurisdiction (30 June 2011) para 134; Lundin v Tunisia, Award (22 December 2015) para 144; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 123. See also National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) para 160. 120 See eg Amerasinghe (n 96) 173; Georges R Delaume, ‘How to Draft an ICSID Arbitration Clause’ (1992) 7 ICSID Rev 168, 181; Paul C Szasz, ‘The Investment Disputes Convention – Opportunities and Pitfalls (How to Submit Disputes to ICSID)’ (1970) 5 J Law & Econ Dev 23, 37. 121 At the same time, for the existence of a legal dispute, it is not necessary that a breach of an obligation has already occurred, in particular if the claimant seeks protection against an impending breach, or that the remedy sought is permissible; these are rather questions concerning the merits of the claim. See Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) paras 177–180, 187.

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a legal dispute arising directly out of an investment.’ However, in accordance with Institution Rule 2(2), no documentation on this point is required at the time of the institution of proceedings and it would appear that a plausible assertion on the part of the claimant suffices for purposes of the Secretary-General’s screening power under Arts. 28(3) and 36(3) of the Convention. To avoid difficulties, it has been suggested that the parties should make express advance provision to clarify the legal nature of their dispute.122 The 1981 Model Clauses for use in agreements between the parties contained the following Clause IV: The parties hereto hereby agree that, for the purposes of Article 25(1) of the Convention, [the dispute] [any dispute in relation to or arising out of this Agreement] is a legal dispute arising directly out of an investment.123

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An agreement between the parties on this point, however, is of limited use. It is perfectly feasible for an ad hoc submission, where the dispute has already arisen and its nature is known, although submission itself would probably imply that the parties see the dispute as legal. But it seems futile to characterize disputes as legal before they have arisen, unless the relevant words are read not as part of a jurisdictional clause, but as an undertaking between the parties to refrain from making non-legal claims and from using non-legal arguments. It is for this reason that neither the 1993 Model Clauses,124 nor the old 1968 version,125 contain language purporting to characterize future disputes as legal. Tribunals have at times mentioned in passing that the dispute before them was a legal dispute since it concerned legal rights and obligations.126 More recently, tribunals addressing the issue of the existence of a legal dispute have pointed out that the claimants had asserted rights, articulated the violation of rights, had relied on legal arguments, and had sought legal remedies. On this basis, tribunals consistently concluded that the disputes before them were legal in nature.127

122 Emmanuel Gaillard, ‘Some Notes on the Drafting of ICSID Arbitration Clauses’ (1988) 3 ICSID Rev 136, 139–140; Arshad Masood, ‘Jurisdiction of International Centre for Settlement of Investment Disputes’ (1972) 14 J Indian Law Institute 119, 131; Amerasinghe, ‘Submissions’ (n 26) 220. 123 (1993) 1 ICSID Reports 201. 124 (1997) 4 ICSID Reports 357. 125 1968 Model Clauses, (1968) 7 ILM 1159. 126 Alcoa Minerals v Jamaica, Decision on Jurisdiction (6 July 1975) (as reported by John T Schmidt, ‘Arbitration under the Auspices of the International Centre for Settlement of Investment Disputes (ICSID), Implications of the Decision on Jurisdiction in Alcoa Minerals of Jamaica Inc v Government of Jamaica’ (1976) 17 Harvard ILJ 90, 98–99); Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 16; Cable TV v St Kitts and Nevis, Award (13 January 1997) para 5.03; AMT v Zaire, Award (21 February 1997) para 5.06; Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) paras 15, 16; Zhinvali v Georgia, Award (24 January 2003) para 290. 127 In addition to the decisions discussed below, see also Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 47; AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 40–47; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 55; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 67, 68; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 20–23; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 124–126; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 47–62; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 74; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 71–91; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 93–97; SGS v Philippines, Order on Further Proceedings (17 December 2007) para 19; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 121–124; Alpha Projektholding v Ukraine, Award (8 November 2010) paras 246–249; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 255; Meerapfel v Central African

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For example, in Continental Casualty v Argentina, the Claimant had invested in the insurance business in Argentina. It claimed that Argentina had enacted a series of decrees and resolutions that allegedly destroyed the legal security of the assets held by the investor. Argentina submitted that in order to meet the requirement of a legal dispute, the dispute had to concern rights, obligations, and legal titles, and not some undesirable consequences that have not had as the proximate cause the host State’s conduct in respect of its investment.128 The Tribunal found that the Claimant had made legal claims. It said:

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In this case, the Claimant invokes specific legal acts and provisions as the foundation of its claim: it indicates that certain measures by Argentina have affected its legal rights stemming from contracts, legislation and the BIT. The Claimant further indicates specific provisions of the BIT granting various types of legal protection to its investments in Argentina, that in its view have been breached by those measures.129

In Suez and others v Argentina, the Claimants had invested in water distribution and waste water services in Argentina. When the Argentine economy experienced a severe crisis, the government enacted measures that resulted in a significant depreciation of the Argentine Peso. Claiming that these measures injured their investments in violation of the commitments made to them, the Claimants sought to obtain adjustments in the tariffs as well as modifications in their operating conditions.130 Argentina argued that there was no legal dispute, but rather a business or commercial dispute. In addition, in Argentina’s view, the dispute over the effects of the devaluation measures was one over policy and fairness and hence not legal in nature. The Tribunal rejected this objection and said:

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A legal dispute, in the ordinary meaning of the term, is a disagreement about legal rights or obligations. . . . In the present case, the Claimants clearly base their case on legal rights which they allege have been granted to them under the bilateral investment treaties that Argentina has concluded with France and Spain. In their written pleadings and oral arguments, the Claimants have consistently presented their case in legal terms. . . . the dispute as presented by the Claimants is legal in nature.131

Quite similarly, the Tribunal in Telefónica v Argentina pointed out that the dispute was legal in nature as the Claimant ‘does not complain about general economic measures, but of the violation of express legally binding commitments (neither political nor commercial) of Argentina as regards Telefónica’s investments under the BIT.’132 For the Tribunal, the need for the legal character of the dispute was inherently connected to the judicial function of the proceedings before the Centre:

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Republic, Award (12 May 2012) paras 233–236; Daimler v Argentina, Award (22 August 2012) para 62; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 119. Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 37. ibid para 67. Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 24. ibid paras 34, 37. See also CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 29 (where the Tribunal stated that a country’s ‘economic . . . choices are not under the Centre’s jurisdiction and ICSID tribunals cannot pass judgment on whether such polices are right or wrong. Judgment cannot only be made in respect of whether the rights of investors have been violated’). Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) para 61.

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schreuer’s commentary on the icsid convention Indeed judicial organs can by their very nature only pass judgment upon disputes which involve the recognition as between the parties of rights and obligations, stemming from binding norms and instruments. Such disputes must be resolved by the proper interpretation and application of those norms and other relevant rules to the facts of the case. This is confirmed within the ICSID system by Art. 42 listing the various ‘rules of law’ in accordance with which the tribunal ‘shall decide’ a dispute.133

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In Perenco v Ecuador, the distinction between legal disputes, on the one hand, and ‘technical and/or economic’ disputes played a role, given that the change to the Claimant’s share in the crude oil production resulted from the modification of a complex technical formula in the parties’ agreement.134 The contract between the parties provided ‘to submit to the INTERNATIONAL CENTRE FOR THE SETTLEMENT OF INVESTMENT DISPUTES [sic] any technical and/or economic dispute relating to this Participation Contract.’ The Tribunal accepted that the dispute was nevertheless of a legal nature in the sense of Art. 25(1) of the ICSID Convention, because disputes about technical and/or economic issues constituted contract claims in the relations between the parties and hence involved the allocation of legal rights and obligations between them.135 In von Pezold and others v Zimbabwe, a dispute which related to a large-scale land reform that affected the Claimants’ properties, the Respondent, without clearly contesting its legal character, framed the dispute ‘in the context of a historical narrative arising out of Zimbabwe’s colonial past.’136 The Claimants, by contrast, presented the claims arising from Zimbabwe’s land reform program as breaches of domestic law, customary international law, and of the BITs between Zimbabwe, on the one hand, and Switzerland and Germany, on the other hand.137 For the Tribunal, this satisfied the legal nature of the dispute in the sense of Art. 25(1) of the ICSID Convention.138 It follows from the practice of tribunals that the legal nature of a dispute is determined by the way the claimant presents its claim. If the claim is couched in terms of violation of legal rights, is based on legal arguments, and seeks legal remedies, there is a legal dispute. Whether the claim is asserted rightly or wrongly is then a matter for the merits of the dispute.139

b) The Justiciability of Disputes 96

Even a dispute that gives rise to legal questions is sometimes said to be inappropriate for arbitration, if it affects sovereign powers or questions of political significance. In fact, in the course of the Convention’s drafting, most of the discussion about the types of disputes that should be made subject to the Centre’s jurisdiction did not turn on their legal or non-legal nature, but on whether it was acceptable to expose a State to

133 ibid para 59 (internal footnote omitted, where the Tribunal mentions the possibility to decide ex aequo et bono as a ‘possible exception’). 134 Perenco v Ecuador, Decision on Jurisdiction (30 June 2011) paras 130–147.135 See ibid para 135. 136 von Pezold and others v Zimbabwe, Award (28 July 2015) para 183. 137 ibid paras 184–189. 138 ibid paras 190–191. 139 For the possibility to reject a claim that is prima facie not plausible in response to a preliminary objection to this effect, see Art. 41, paras 105–115.

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arbitration in respect of activities within its sovereign prerogative.140 Especially delegates from capital-importing countries expressed the opinion that questions of a political nature that affected governmental functions, vital interests, security, national policy, or sovereign powers were non-justiciable (History, Vol. II, pp. 257, 466, 468, 470, 500–501, 548, 565, 699–700, 708, 830). In particular, it was argued that questions arising from the validity and application of domestic legislation should be excluded from the Centre’s jurisdiction (ibid., pp. 498, 504, 550, 703, 706, 708, 838). A similar demand was that the legality of expropriations should be excluded from the Centre’s jurisdiction (ibid., pp. 258, 267, 550, 709, 829) or at least confined to matters of compensation (ibid., pp. 259, 498, 504, 669, 703). Conversely, it was suggested that only disputes in connection with a specific contract between the host State and the investor and, possibly, in connection with the host State’s investment legislation should be considered arbitrable disputes (History, Vol. II, pp. 471, 494, 497, 498, 504, 505, 514, 543, 653, 702, 707, 708, 830, 832). These ideas were opposed by Mr. Broches (ibid., pp. 495, 540, 707). He pointed out that it was always open to the parties to define the disputes that they regarded as justiciable in their consent agreement (ibid., p. 566).141 Eventually, none of the proposed limitations relating to justiciability found entry into the Convention, and there is nothing to suggest that they are included by implication. Since the early years of ICSID proceedings, the question of justiciability and sovereign prerogative has not posed any major problems in the practice of ICSID tribunals. Tribunals have examined the legality of expropriations and of other typical governmental actions without hesitation.142 For instance, in Benvenuti & Bonfant v Congo, the Tribunal saw no difficulty in examining the legality of government action that consisted in the dissolution of a local company set up by the Claimant followed by the seizure of its assets. Likewise, the Tribunal examined the legality of the military occupation and nationalization of another company jointly owned by the Claimant and the Respondent.143 In AAPL v Sri Lanka, the Tribunal saw no difficulty in examining the conduct of the host State’s security forces resulting in the destruction of the investment.144 In the cases involving the state of emergency that unfolded in Argentina in the late 1990s, the justiciability of the disputes was not in question; tribunals instead addressed it as a defense on the merits.145 In von Pezold and others v Zimbabwe, there was no question that the question of whether domestic constitutional law was in line 140 See also Amerasinghe (n 96) 173–174, 176. For a classical account surrounding the authority of international courts and tribunals over ‘political disputes,’ see Hersch Lauterpacht, The Function of Law in the International Community (Clarendon Press 1933) ch VII. 141 See also Amerasinghe, ‘Submissions’ (n 26) 221–222. 142 See eg SPP v Egypt, Award (20 May 1992); Goetz v Burundi, Award (10 February 1999); Santa Elena v Costa Rica, Award (17 February 2000); Wena Hotels v Egypt, Award (8 December 2000) and ibid, Decision on Interpretation (31 October 2005); Middle East Cement v Egypt, Award (12 April 2002); ADC v Hungary, Award (2 October 2006); Siemens v Argentina, Award (6 February 2007); Vivendi v Argentina, Resubmitted Case: Award (20 August 2007). 143 Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 4.47–4.65. 144 AAPL v Sri Lanka, Award (27 June 1990) paras 79–86. For similar situations involving actions by the host State’s security forces, see eg AMT v Zaire, Award (21 February 1997) para 1.05; Amco v Indonesia, Decision on Annulment (16 May 1986) para 68. 145 See eg CMS v Argentina, Decision on Jurisdiction (17 July 2003); Enron v Argentina, Decision on Jurisdiction (14 January 2004); LG&E v Argentina, Decision on Jurisdiction (30 April 2004); Sempra v

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with the host State’s obligations under an investment treaty was justiciable.146 In Lundin v Tunisia, the Tribunal also stressed that Art. 25(1) did not provide for any exception as to the type of legal dispute that could be submitted for resolution to the Centre;147 such disputes ‘can be of any nature (commercial, civil, fiscal, contractual, regulatory) and concern different types of obligations, including those under international treaties, contract, and national laws.’148 The consistent practice of ICSID tribunals thus confirms that the ICSID Convention, unlike some domestic legal systems, for example under the political questions doctrine in the United States,149 does not provide for limitations to the justiciability of certain claims or types of disputes, as long as they are of a legal nature. This notwithstanding, the parties are, of course, at liberty to limit their consent to ICSID’s jurisdiction, and exclude, for example, matters pertaining to their essential interests, national security, or other classes of disputes that they do not wish to submit to dispute resolution before the Centre.150 Such exclusions will generally have to be explicit in order to have jurisdictional effects.151 Clauses that merely provide for self-judging elements will generally not suffice to exclude the jurisdiction of the Centre as a whole; they only modify the standard of review in respect of the self-judging element.152

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Argentina, Decision on Jurisdiction (11 May 2005); Continental Casualty v Argentina, Award (5 September 2008) paras 160–236; Suez and Vivendi v Argentina, Decision on Liability (30 July 2010) paras 249–271; Impregilo v Argentina, Award (21 June 2011) paras 336–360; Urbaser v Argentina, Award (8 December 2016) paras 709–732. For discussion of the Argentine crisis cases and the way arbitral tribunals addressed the state of emergency, see William W Burke-White and Andreas von Staden, ‘Investment Protection in Extraordinary Times: The Interpretation and Application of NonPrecluded Measures Provisions in Bilateral Investment Treaties’ (2008) 48 Va JIL 307; José E Alvarez and Kathryn Khamsi, ‘The Argentine Crisis and Foreign Investors: A Glimpse into the Heart of the Investment Regime’ in Karl P Sauvant (ed), Yearbook on International Investment Law and Policy 2008–2009 (OUP 2009) 379; Jürgen Kurtz, ‘Adjudging the Exceptional at International Investment Law: Security, Public Order and Financial Crisis’ (2010) 59 ICLQ 325; William J Moon, ‘Essential Security Interests in International Investment Agreements’ (2012) 15 JIEL 481; Ji Ma, ‘International Investment and National Security Review’ (2019) 52 Vanderbilt JTL 899. von Pezold and others v Zimbabwe, Award (28 July 2015). See also Lundin v Tunisia, Award (22 December 2015) para 150. ibid para 143. See Jared P Cole, ‘The Political Question Doctrine: Justiciability and the Separation of Powers’ (Congressional Research Service, 2014) accessed 10 January 2021. See Katia Yannaca-Small, ‘Essential Security Interests under International Investment Law’ in OECD (ed), International Investment Perspectives: Freedom of Investment in a Changing World (OECD 2007) 93; UNCTAD, The Protection of National Security in IIAs (United Nations 2009). For an example, see India–Singapore Comprehensive Economic Cooperation Agreement (signed 29 June 2005, entered into force 1 August 2005) Art. 6.12(4), which provides: ‘This Article shall be interpreted in accordance with the understanding of the Parties on non-justiciability of security exceptions as set out in their exchange of letters, which shall form an integral part of this Agreement.’ On self-judging clauses and their interpretation in international dispute settlement generally, see Stephan W Schill and Robyn Briese, ‘“If the State Considers”: Self-Judging Clauses in International Dispute Settlement’ (2009) 13 Max Planck YB UN Law 61. See also Michael D Nolan and Frederic G Sourgens, ‘The Limits of Discretion? Self-Judging Emergency Clauses in International Investment Agreements’ in Karl P Sauvant (ed), Yearbook on International Investment Law & Policy 2010–2011 (OUP 2012) 363. Concerning the interpretation of self-judging clauses in WTO law, WTO, Russia: Measures Concerning Traffic in Transit – Report of the Panel (5 April 2019) WT/DS512/7, paras 7.20–7.149 (concerning Art. XXI of the General Agreement on Tariffs and Trade); WTO, Saudi Arabia: Measures concerning the Protection of Intellectual Property Rights – Report of the Panel (16 June 2020) WT/DS567/7, paras

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In CSOB v Slovakia, the Respondent did not question the legal nature of the dispute. But it stressed its political nature and its close link with the dissolution of the former Czech and Slovak Federal Republic (see also paras. 138–139, 579 infra). The Tribunal pointed out that the claim was based on an agreement between the parties to the dispute. It said:

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While it is true that investment disputes to which a State is a party frequently have political elements or involve governmental actions, such disputes do not lose their legal character as long as they concern legal rights or obligations or the consequences of their breach.153

As already noted by Mr. Broches (see paras. 6, 97 supra), it is open to States to exclude categories of disputes that they consider inappropriate for arbitration from the terms of their consent (see paras. 948–980 infra). In addition, under Art. 25(4), States may notify the Centre of categories of disputes which they would, or would not, consider submitting to ICSID’s jurisdiction (see paras. 1472–1507 infra). Against this background, there is no need for a restrictive interpretation of the ‘legal’ character of the dispute in order to protect a State’s interest not to submit certain disputes for resolution before the Centre.

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c) Questions of Fact There was some argument in the course of the Convention’s drafting about the role of fact-finding (see para. 38 supra). Fact-finding has no independent role under the Convention, but was added by means of the Additional Facility (see paras. 39–40 supra). Nevertheless, it is clear from the Convention’s history (see para. 38 supra) and its general context that issues of fact that are incidental to the legal questions to be decided must be ascertained by the arbitral tribunal or conciliation commission.154 This conclusion is warranted not only in light of the travaux préparatoires and the practical requirements of arbitration, but also reflects the Convention’s wording. Art. 43 of the Convention refers to several methods of obtaining evidence, such as relevant documents, visits to the scene connected with the dispute, or appropriate inquiries. It is obvious that all this is designed to equip the tribunal with the required factual information to make a rational decision. There has been some debate as to whether pure questions of fact would qualify as legal disputes for purposes of the Convention.155 It would seem that where the existence or not of these facts results in legal consequences between the parties, the answer clearly must be in the affirmative. The nature of the dispute is determined not by the facts leading to it, but by the legal claims they trigger. Claims for damages or other legal 7.241–7.294 (concerning Art. 73(b)(iii) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (signed 15 April 1994, entered into force 1 January 1995) 1869 UNTS 299). 153 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 60. 154 Amerasinghe (n 96) 174; Szasz (n 120) 37. 155 George R Delaume, ‘La Convention pour le règlement des différends relatifs aux investissements entre Etats et ressortissants d’autres Etats’ (1966) 93 JDI 26, 35; Robert Kovar, ‘La compétence du Centre international pour le règlement des différends relatifs aux investissements’ in Centre de Recherche sur le Droit des Marchés et des Investissements internationaux de la Faculté de Droit de Paris (ed), Investissements étrangers et arbitrage entre Etats et personnes privées: La Convention BIRD du 18 mars 1965 (Pedone 1969) 25, 29.

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remedies are sufficient to establish jurisdiction, even if both parties accept that the alleged facts, if proven, would justify the claims. In AGIP v Congo (see para. 77 supra)156 and in Santa Elena v Costa Rica,157 the parties were agreed, in principle, on the legal duty to pay compensation for the expropriations. But the Claimants had not received any compensation and the amount of compensation due had not been determined. This was sufficient ground for the tribunals to entertain the claims.

d) Non-Legal Means of Dispute Settlement 104

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The Convention provides not only for arbitration, but also for conciliation (Chapter III, Arts. 28–35). Conciliation, by definition, is not judicial, but is directed towards an agreed settlement. Art. 34 of the Convention provides that it is the conciliation commission’s duty ‘to clarify the issues in dispute between the parties and to endeavor to bring about agreement between them upon mutually acceptable terms.’ By contrast, Art. 42 of the Convention directs that an arbitral tribunal shall decide a dispute in accordance with ‘rules of law.’ But even in arbitration proceedings, Art. 42(3) of the Convention gives the parties the possibility to authorize the tribunal ‘to decide a dispute ex aequo et bono’ rather than in accordance with legal rules (see Art. 42, paras. 328–362). It may, therefore, seem odd that Art. 25 requires that there must be a legal dispute, even if the parties wish to utilize conciliation or agree that the tribunal may decide in accordance with equitable principles.158 Mr. Broches explained the statement in the Executive Directors’ Report, which emphasizes that conflicts of rights are within the jurisdiction of the Centre, while mere conflicts of interests are not (see para. 84 supra), in the following terms: The purpose of this sentence was to dispel the fears of some developing countries that investors might request a host State to consent to conciliation proceedings with respect to disputes in which the investor did not even claim that any of his legal rights had been impaired. This fear was based on another fear, namely that a refusal to consent to conciliation proceedings would lead to what these delegations called ‘adverse inferences’ as to their treatment of foreign investment. It was for that reason that even for conciliation proceedings, the Convention requires that the dispute be a legal one and the quoted sentence was addressed to that point.159

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The problem has been discussed most frequently in the context of a wish by one or both parties to renegotiate a long-standing agreement, because it no longer appears equitable, or because the underlying circumstances have changed. Renegotiation of investment agreements is useful and common.160 Yet, the limitation of the Centre’s 156 AGIP v Congo, Award (30 November 1979). 157 Santa Elena v Costa Rica, Award (17 February 2000). 158 For a qualification of the possibility of deciding a dispute ex aequo et bono as an exception to the need for the dispute to have a legal character, see Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) para 59, fn 23. 159 Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 363 (emphasis in the original, footnote omitted). See also Szasz (n 120) 36–37. 160 Wolfgang Peter, Arbitration and Renegotiation of International Investment Agreements (2nd edn, Wolters Kluwer 1995) esp 231–258; Nigel S Rodley, ‘Some Aspects of the World Bank Convention on the Settlement of Investment Disputes’ (1966) 4 Can YBIL 43, 55–57; Piero Bernardini, ‘The Renegotiation of the Investment Contract’ (1998) 13 ICSID Rev 411; Stefan Kröll, ‘The

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jurisdiction to legal disputes would seem to bar access to conciliation under the ICSID Convention for the purpose of facilitating renegotiation (see also History, Vol. II, p. 701).161 Where the agreement between the parties itself provides for its adjustment under certain circumstances, either in the form of a hardship clause, or of a clause for its equitable modification in specific situations,162 the problem can be overcome: a claim would have to be presented as arising from the original agreement and in terms of whether the conditions for renegotiation have been met.163 Even without a clause in the agreement providing for modification, a demand for renegotiation may be supported by legal arguments. A party may claim that a fundamental change of circumstance gives it a right to renegotiation.164 What matters, in this context, is not whether such a claim will be upheld ultimately; for purposes of jurisdiction, it is sufficient that a claim phrased in legal terms can be put forward in good faith. The nature of the claim, and not its ultimate success, determines, at the jurisdictional stage, whether the dispute is of a legal nature. Much will depend on whether the parties agree to seek help in revising their agreement through conciliation or an award ex aequo et bono. Where they agree, it would appear rather unlikely that the Secretary-General in his or her screening capacity (Arts. 28(3) and 36(3)), a conciliation commission (Art. 32(1)) or an arbitral tribunal (Art. 41(1)) will find that there is no jurisdiction. Nevertheless, the objective requirement of a legal dispute remains. The parties’ agreement cannot replace the limitation as contained in the Convention entirely (see paras. 6–9 supra). Where the parties do not agree on the wish to revise the agreement, the claimant would have to present a convincing claim, couched in legal terms, that it has a right to bona fide negotiations and that the conditions for such renegotiations have been met.165 Even if no right to renegotiation can be established, conciliation and arbitration ex aequo et bono are by no means ruled out. A claimant that has characterized its claim in legal terms, and has invoked legal rules, may still choose a method of settlement,

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Renegotiation and Adaptation of Investment Contracts’ in Norbert Horn and Stefan Kröll (eds), Arbitrating Foreign Investment Disputes (Kluwer 2004) 425. Conciliation under the ICSID Additional Facility Rules was initially envisaged as an alternative venue in order to help parties to renegotiate an investment agreement in the absence of a legal dispute. See ‘Administration by the Centre of Proceedings Outside the Scope of Article 25 of the Convention, Draft Report and Recommendation of the Secretary-General’ ICSID Doc AC/77/1 (13 May 1977) para 26. This suggestion was dropped, however, after objections that this may draw conciliation commissions into political controversies. See ‘Administration of Proceedings Outside the Scope of Article 25 of the Convention, Report and Recommendation of the Secretary-General’ ICSID Doc AC/77/5 (6 September 1977) para 4(iv). See Parra (n 7) 130–131. Peter (n 160) 231 ff. See Georges R Delaume, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 799–800; Georges R Delaume, ‘ICSID and the Transnational Financial Community’ (1986) 1 ICSID Rev 237, 242; Elihu Lauterpacht, ‘The World Bank Convention on the Settlement of International Investment Disputes’ in Recueil d’études de droit international en hommage à Paul Guggenheim (Faculté de Droit de l’Université Genève and Institut de Hautes Études Internationales 1968) 642, 644. Kovar (n 155) 31. See Rodley (n 160) 57. In Gardella v Côte d’Ivoire, Award (29 August 1977) para 4.7, there was some discussion on whether a clause in the agreement providing for its ‘updating’ could justify an essential modification of the fundamental basis of the agreement. But the question did not arise as a jurisdictional issue and was not presented in terms of the legal nature of the dispute.

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namely conciliation, that results in ‘mutually acceptable terms’ (Art. 34(1)), or may agree in an arbitration proceeding that not only rules of law, but also principles of equity, are to be applied. In other words, the utilization of non-judicial methods of settlement, as in conciliation, and the application of standards other than legal rules, does not necessarily deprive the dispute of its legal nature. All that is necessary is that the claimant convincingly presents a legal claim at the outset. The method of settlement chosen, and the remedy sought, will not affect the requirement under the ICSID Convention that there must be a legal dispute. This conclusion is supported by Arbitration Rule 43, which provides: Rule 43 Settlement and Discontinuance (1) If, before the award is rendered, the parties agree on a settlement of the dispute or otherwise to discontinue the proceeding, the Tribunal, or the Secretary-General if the Tribunal has not yet been constituted, shall, at their written request, in an order take note of the discontinuance of the proceeding. (2) If the parties file with the Secretary-General the full and signed text of their settlement and in writing request the Tribunal to embody such settlement in an award, the Tribunal may record the settlement in the form of its award.

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Thus, even in the course of arbitration proceedings, it is always open to the parties to resort to non-judicial methods to settle their legal dispute. If the tribunal records the settlement in its award, the parties’ agreement will acquire the full authority of an ICSID award for purposes of recognition and enforcement. It follows that the existence of a legal dispute and the employment of a judicial or non-judicial method for its settlement are two distinct questions. C. ‘. . . arising directly . . .’

1. Directness as an Independent Jurisdictional Requirement 113

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The requirement of directness is one of the objective criteria for jurisdiction of the Centre and is, therefore, independent of the parties’ consent. This means that, no matter what the parties have agreed, the dispute must objectively be sufficiently closely connected to the investment so that a direct relationship between dispute and investment exists. This notwithstanding, in practice there will often be an overlap between the objective requirement of directness and the parties’ consent. Disputes arising from ancillary or peripheral aspects of the investment operation are likely to give rise to both the objection that they do not arise directly from the investment and that they are not covered by the parties’ consent. Nevertheless, the two objections are analytically distinct.166 A stipulation by the parties that an existing dispute has arisen directly out of an investment would be strong authority for a conciliation commission or arbitral tribunal, but would not pre-empt the commission’s or the tribunal’s power and duty to determine its competence in this respect. On the other hand, a stipulation between the parties, such as

166 The question of the scope of consent is examined at paras 948–980 infra.

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the one suggested by Clause IV of the 1981 Model Clauses167 (see para. 87 supra), that any future dispute relating to their agreement arises directly out of an investment does not appear meaningful. Not only is it futile to predetermine the character of disputes that may arise in the future, but in addition the commission or tribunal would not be bound by such a clause, since that character relates to the Convention’s objective requirements for jurisdiction and must be determined independently of the parties’ agreement. Institution Rule 2(1)(e) indicates that a request to institute conciliation or arbitration proceedings should also contain information on the directness of the dispute in relation to an investment (see para. 86 supra). However, no documentation on this point is required at the time of instituting proceedings168 (see Art. 36, paras. 25–28). Art. 2(b) of the Additional Facility Rules authorizes proceedings for the settlement of disputes that are not within the Centre’s jurisdiction because they do not arise directly out of an investment (see para. 13 supra). This is usually read to refer to disputes that arise from transactions other than investments (see paras. 485–494 infra).169 But a dispute that arises from an investment, though only indirectly, would also be covered by the wording of Art. 2(b) of the Additional Facility Rules. Therefore, where the connection between the investment and the dispute appears too remote to satisfy the Convention’s requirement of directness, the Additional Facility could serve as an alternative forum for dispute settlement.170 In order to settle disputes that are related to investments, and are covered by an ICSID consent clause, but that fall outside the scope of the Convention, the parties could also, in order to benefit from the services of the Centre, agree on ad hoc arbitration, incorporate the ICSID Rules by reference, and designate the Secretary-General as appointing authority.171

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2. General Meaning under the Convention a) Travaux Préparatoires, Context, State Practice The Convention itself does not define what is meant by the word ‘directly.’172 The First Draft foresaw the Centre’s jurisdiction for all legal disputes ‘arising out of or in connection with any investment’ (History, Vol. I, p. 116). In the French version, this was translated as relating to disputes ‘se rapportant directement ou indirectement à un investissement’ (History, Vol. III, pp. 401, 419). These words were criticized as giving a tribunal ‘wide and indefinite authority’ (History, Vol. II, p. 700), and it was suggested that only disputes directly relating to an investment should be included (ibid., pp. 707, 708, 830). A motion to insert the word ‘directly’ as an additional qualification to the word ‘investment’ was adopted by twenty-six to eight votes (ibid., p. 826). However, no definition or explanation of the word ‘directly’ was ever offered. This notwithstanding, the travaux clarify that the dispute must not only be somehow connected to an investment, but must be reasonably closely connected. 167 (1993) 1 ICSID Reports 201. This clause was omitted from the 1993 Model Clauses, (1997) 4 ICSID Reports 357. 168 Institution Rule 2(2). 169 Broches (n 7) 377; Toriello (n 7) 73–74. 170 See Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 28. 171 Georges R Delaume, ‘ICSID Arbitration’ in Julian DM Lew (ed), Contemporary Problems in International Arbitration (Springer 1987) 23, 37. See also (1984) 1(2) News from ICSID 14. 172 In this sense also Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 256 (citing the Second Edition of this Commentary).

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Art. 46 of the Convention also employs the words ‘arising directly out of,’ but in an entirely different context. It provides for an ICSID tribunal’s competence to determine incidental or additional claims or counterclaims ‘arising directly out of the subject-matter of the dispute.’ This reference concerns the relationship between the main claim and the ancillary claim, but it does not relate to the jurisdictional requirement that the dispute itself must arise directly out of an investment (see Art. 46, paras. 69–76). This is clear from the wording and structure of Art. 46, which provides that the ancillary claim, too, must be within the scope of the parties’ consent and otherwise within the Centre’s jurisdiction. Art. 46 does therefore not help elucidate the meaning of the directness requirement in Art. 25(1). The Contracting Parties to the ICSID Convention have generally not expressed any views on the meaning of the directness requirement. Yet, one State party to the Convention is evidently of the opinion that the ‘arising directly’ clause in the Convention is not sufficiently rigorous. Papua New Guinea has made a notification under Art. 25(4) of the Convention to the effect that ‘it will only consider submitting those disputes to the Centre which are fundamental to the investment itself.’173 It is unclear what, if anything, the words ‘fundamental to’ add to ‘arising directly.’ Possibly, ‘fundamental to’ refers to all the conditions and circumstances without which the investment would not have been made.

b) Directness of Dispute v Directness of Investment 120

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As becomes clear from the wording of Art. 25(1), the requirement of directness refers to the relationship of the dispute to the investment. It does not refer to the character of the investment as such. Neither does the directness requirement limit the Centre’s jurisdiction to disputes concerning foreign direct investment, as compared to portfolio investment, nor does it exclude disputes that arise out of investments that were made, or are held, indirectly in the host State through intermediate companies (see further paras. 331–361 infra). That the directness requirement does not limit ICSID’s jurisdiction to disputes arising out of foreign direct investment was addressed expressly by a number of tribunals. In Fedax v Venezuela, the Respondent argued that the disputed transaction, which involved debt instruments issued by the Republic of Venezuela, was not a ‘direct foreign investment’ and therefore could not qualify as an investment under the Convention.174 The Tribunal rejected this argument: It is apparent that the term ‘directly’ relates in this Article to the ‘dispute’ and not to the ‘investment’. It follows that jurisdiction can exist even in respect of investments that are not direct, so long as the dispute arises directly from such transaction.175

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Other tribunals have taken the same position, often quoting the above passage from Fedax.176 173 See ICSID, ‘Notifications Concerning Classes of Disputes Considered Suitable or Unsuitable for Submission to the Centre (Art. 25(4) of the Convention)’ ICSID/8-D (February 2019). See also para 1483 infra. 174 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 24. 175 ibid. 176 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 71, 72; CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 52; Continental Casualty v Argentina, Decision on Jurisdiction (22

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That the directness requirement in Art. 25(1) is also unrelated to the manner in which investments in the host State are made and held, i.e., directly or indirectly through intermediary companies, was also discussed in the jurisprudence of ICSID tribunals. In a number of cases, Argentina argued that the dispute did not arise directly from an investment, since the investor had made its investment indirectly by way of an intermediary company.177 Tribunals have rejected this argument consistently (see also paras. 334–342 infra).178 In CMS v Argentina,179 the Respondent argued that neither TGN, a company incorporated in Argentina in which the Claimant held shares, nor the license held by TGN, qualified as an investment. Since these assets did not constitute an investment under the applicable BIT, CMS’s claims, based on the alleged breach of TGN’s rights under the license, could not be considered as arising directly from an investment.180 The Tribunal rejected that argument. It said:

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[T]he rights of the Claimant can be asserted independently from the rights of TGN and those relating to the License, and because the Claimant has a separate cause of action under the Treaty [the BIT] in connection with the protected investment, the Tribunal concludes that the present dispute arises directly from the investment made and that therefore there is no bar to the exercise of jurisdiction on this count.181

In Siemens v Argentina, the Tribunal said in response to a similar argument:

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There is no doubt that the dispute with Argentina under the Treaty is a dispute which arises directly from the investment as defined by Siemens. The quality of a direct dispute is not affected by Siemens not being the direct shareholder of the local company. This is a separate question. For purposes of Article 25(1), a dispute may arise directly out of an investment made directly or indirectly by an investor. Whether in that situation the investor qualifies as such will depend on the definition of investor in the treaty or the terms of the investment contract. The direct requirement under the ICSID Convention is related to the investment dispute, not to whether the investor [investment] is direct or indirect.182

The requirement that the dispute must arise directly out of an investment is therefore not an obstacle to claims by investors who hold their investments indirectly. In fact, ICSID tribunals have recognized more generally that the Centre’s jurisdiction in principle extends to disputes relating to indirect investments and claims by indirect shareholders (see paras. 331–361 infra). This does not mean, however, that the Centre always has jurisdiction for disputes connected to indirect investments. Instead, attention

177 178 179 180 182

February 2006) para 73; Metalpar v Argentina, Decision on Jurisdiction (27 April 2006) para 89; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 194. See, however, ADC v Hungary, Award (2 October 2006) para 331, which is ambivalent on this point. See also Stanimir A Alexandrov, ‘The “Baby Boom” of Treaty-Based Arbitrations and the Jurisdiction of ICSID Tribunals: Shareholders as “Investors” and Jurisdiction Ratione Temporis’ (2005) 4 LPICT 19, 40–45. In addition to the cases discussed below, see Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 58–60; Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) para 22; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 40. CMS v Argentina, Decision on Jurisdiction (17 July 2003). ibid para 66. 181 ibid para 68. Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 150.

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must be paid also to the way the parties’ consent is framed, as this may exclude disputes concerning indirectly held investments.183

c) Connection Between Dispute and Investment 127

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While it is clear that the directness requirement concerns the relationship between the dispute and the investment, the precise test to apply in order to determine the degree of directness is less clear. So far, no precise test has been formulated.184 Efforts to draw parallels to the test applied under the dispute settlement provisions of investment treaties, such as Art. 1101(1) of the NAFTA, which refers to ‘measures . . . relating to’ investors and investments, and which has been interpreted by the Tribunal in Methanex v United States as requiring a legally significant connection,185 have been rejected because of the differences in wording.186 The lack of a precise meaning of the directness requirement notwithstanding, it can be concluded, based on the travaux of the ICSID Convention (see para. 117 supra), that the dispute must be reasonably closely connected to the investment. The test of a reasonably close connection, which had been introduced by the First Edition of this Commentary, has also been picked up in arbitral jurisprudence. The Tribunal in Tokios Tokelės v Ukraine, for example, demanded ‘an adequate nexus between the dispute and the Claimant’s investment in the territory of the Contracting Party.’187 In the Tribunal’s, view, ‘[i]n order for the directness requirement to be satisfied, the dispute and investment must be “reasonably closely connected.”’188 In the case, the Respondent argued that the dispute did not arise directly out of an investment, because the allegedly wrongful acts by Ukrainian governmental authorities had not been directed against the Claimant’s physical assets.189 The Tribunal rejected this argument: For a dispute to arise directly out of an investment, the allegedly wrongful conduct of the government need not be directed against the physical property of the investor. The requirement of directness is met if the dispute arises from the investment itself or the operations of its investment . . .190

183 For an example, see HICEE v Slovakia (UNCITRAL), Partial Award (23 May 2011) paras 102 ff. 184 To this effect also Bridgestone v Panama, Decision on Expedited Objections (13 December 2017) para 238. 185 Methanex v United States, Partial Award (7 August 2002) paras 127–147. 186 AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 58, 59; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 75; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 92–97; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 27–30; Telefónica v Argentina, on Jurisdiction (25 May 2006) para 65, fn 24; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 58–63; Total v Argentina, Decision on Jurisdiction (25 August 2006) para 66. This notwithstanding, on certain issues, parallels can appropriately be drawn to the interpretation of compromissory clauses in investment treaties, for example in respect of the principle of the general unity of the investment. See para 69 supra. 187 Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 87. 188 ibid para 88 (quoting the First Edition of this Commentary). For the same approach, see Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 86 (quoting from the 1st and 2dn edn of this Commentary). 189 Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 90. 190 ibid para 91.

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The Tribunal in Metalpar v Argentina refined the test of a reasonably close connection further. It stated that, in order for the dispute to arise directly out of an investment in the sense of Art. 25(1) of the ICSID Convention,

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there must be an immediate ‘cause-and-effect’ relationship between the acts of the host State and the effects of such acts on the protected investments; a first-hand causal link must be established between the investment and the events of the receiving State that cause it to be affected. This does not mean, however, that the measures adopted by the State must be directed specifically against investment. It is enough that an immediate link can be established (as opposed to a remote one) between the effects on the investment and the acts that cause them.191

That the directness requirement concerns the effect of the State’s measures on the protected investment was reiterated by the Tribunal in Burimi v Albania.192 At issue was a claim by two companies relating to the revocation by the Government of a permit to organize lottery games. One of the Claimants, Eagle Games, was the holder of the license; the other Claimant, Burimi, had entered into financing and pledge agreements with one of Eagle Games’ shareholders, Ms. Leka, pursuant to which Burimi would finance all of Ms. Leka’s investments in Eagle Games in return for receiving 90 percent of the resulting profits and absorbing all future losses. The Tribunal rejected jurisdiction over Burimi’s claim, reasoning that

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the dispute at hand does not arise out of any government measure affecting Burimi SRL’s agreement with Ms. Alma Leka. The financing and pledge agreements are freestanding contracts between Ms. Alma Leka and Burimi SRL, and exist independently of Eagle Games’ gambling business. Burimi SRL’s claims in this dispute arise out of its agreement with Ms. Alma Leka and do not arise out of the investment in question, namely, the enterprise of Eagle Games.193

The Tribunal in Bridgestone v Panama considered the test set out in Metalpar as ‘sound and sensible.’194 On its basis, it concluded that a claim for the allegedly unlawful imposition of a penalty by the Panamanian Supreme Court for efforts of the Claimants to police certain of their trademarks, and the resulting diminution of value of those trademarks, only in parts arose directly out of the Claimants’ investment in the trademarks. It found the dispute concerning damage allegedly arising inside Panama as a result of the decision by Panama’s Supreme Court to arise directly out of the Claimants’ investment.195 By contrast, the Tribunal found the dispute insofar as it concerned damage that could result outside of Panama because the decision of Panama’s Supreme Court could serve as a precedent in other Latin American countries did not arise directly out of the Claimants’ investment in Panama and was thus outside the Centre’s jurisdiction. The Tribunal stated:

191 Metalpar v Argentina, Decision on Jurisdiction (27 April 2006) para 95 (translation by the author). The Tribunal also cited to the First Edition of this Commentary (see ibid paras 93–94). 192 Burimi v Albania, Award (29 May 2013) paras 142–146. 193 ibid para 145. 194 Bridgestone v Panama, Decision on Expedited Objections (13 December 2017) para 238. 195 ibid paras 239–246.

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schreuer’s commentary on the icsid convention In the opinion of the Tribunal, a dispute as to whether States other than Panama are likely to copy Panama’s alleged abuse of the Claimants’ intellectual property rights to the detriment of the Claimants is both speculative and remote from each of the Claimants’ investments. That part of the overall dispute cannot possibly be said to ‘arise directly out of ’ either Claimant’s investment.196

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All in all, no precise test has developed in ICSID jurisprudence to specify exactly when a dispute is reasonably closely connected so as to arise directly out of an investment. Whether there is a sufficient nexus between the dispute and the investment will be highly fact-specific and depend on the specific circumstances of each case. This notwithstanding, two specific situations have received particular attention in arbitral practice. The first concerns disputes that do not relate to the investment as such, but to certain of its parts. For such disputes, the Centre may have jurisdiction pursuant to the doctrine of the ‘general unity of the investment’ (see paras. 133–151 infra). The second concerns the question of whether the directness requirement limits the Centre’s jurisdiction when the host State takes general measures rather than measures that are specifically targeted to the investment (see paras. 152–161 infra).

3. The General Unity of the Investment 133

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In discussing the directness requirement in Art. 25(1), an important issue is how to take account of the phenomenon that an investment operation often consists of a number of individual transactions and legal relationships. They may include, among others, financing, the acquisition of property, construction, the lease of land, purchase of various goods, marketing of produced goods, activities to comply with the regulatory framework, the payment of taxes, etc. In economic terms, these transactions are all more or less linked to the investment. But whether disputes relating to these activities arise directly out of the investment for purposes of ICSID’s jurisdiction may give rise to debates in proceedings before the Centre. Similarly, questions relating to the temporal or territorial dimensions of what is protected as an investment may give rise to debate depending on how wide or narrow the analytical inquiry is cast as to how to conceive of the investment. In the first decades of ICSID’s existence, concerns as to whether the directness requirement is fulfilled arose particularly in respect of transactions that were ancillary to the investment operation, either because they were carried out by means of contracts that were separate from the main investment (see paras. 999–1010 infra) or through distinct juridical persons both on the side of the Contracting State197 (see also paras. 523–571 infra) and on the side of the investor (see also paras. 643–658 infra). At times, these separate contracts, though clearly related to the investment, may even contain their own dispute settlement provisions that provide for fora other than ICSID (see Art. 26, paras. 54–63, 167).

196 ibid para 354. This conclusion was affirmed in ibid, Award (14 August 2020) paras 198–200. These decisions can be read in support of the argument that the requirement that the dispute arises directly out of the investment does not impose a requirement ratione loci as to where the investment was made, nor does it establish jurisdictional limits on claims involving transboundary harm. See also para 435 infra. 197 See eg Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 35–40; Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 58–59.

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For purposes of assessing whether disputes in relation to such ancillary activities nevertheless arise directly out of the claimant’s investment, ICSID tribunals have used, in certain circumstances, the doctrine of the general unity of the investment to connect the disputes to the investment and to the agreement to arbitrate contained in the main investment relationship. The doctrine was first developed in a number of contract-based arbitrations, but later transferred to arbitrations based on domestic legislation and treaty. Its function was also enlarged over time, from capturing ancillary activities towards determining more broadly what activities and assets form part of the investment out of which disputes can arise that can be brought to the Centre.198 In Holiday Inns v Morocco, the agreement for the establishment and operation of hotels had also provided for financing by the Government.199 This was done by means of separate loan contracts between C.I.H., a Moroccan specialized agency, and four wholly owned subsidiaries created by the Claimants (the H.I.S.A. companies). The loan contracts contained choice-of-forum clauses in favor of the Moroccan courts. These clauses led the Respondent to object to the jurisdiction of ICSID over the claims connected with the loan contracts. The Tribunal rejected these contentions and asserted its jurisdiction over the issues related to the loan contracts, emphasizing ‘the general unity of an investment operation.’ The Tribunal said:

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It is well known, and it is being particularly shown in the present case, that investment is accomplished by a number of juridical acts of all sorts. It would not be consonant either with economic reality or with the intention of the parties to consider each of these acts in complete isolation from the others. It is particularly important to ascertain which is the act which is the basis of the investment and which entails as measures of execution the other acts which have been concluded in order to carry it out.200

In SOABI v Senegal, another contract-based ICSID case, the Government was found liable for the termination of an investment operation committed to the construction of housing units. Among the claims for compensation were architects’ fees under a contract between the investor and a firm of architects. As a consequence of the project’s termination, the Claimant was unable to fulfill the contract with the architects. The Tribunal found that only the Senegalese courts had jurisdiction to rule on the dispute between the investor and the architects. But the Tribunal affirmed jurisdiction over the dispute between the Claimant and the Government concerning the latter’s obligation to indemnify the former for its losses, including those arising from the contract with the architects.201 Furthermore, in determining whether the arbitration clause contained in the Establishment Agreement between SOABI and the Government covered disputes concerning the implementation of separate contracts for the construction of a concrete production plant and the construction of housing units, the Tribunal stressed that both contracts formed part of the same investment operation and were thus subject to its

198 For detailed discussion, see Christoph Schreuer, ‘The Unity of an Investment’ (2021) 19 ICSID Reports 3. 199 See Lalive (n 53) 156. 200 Holiday Inns v Morocco, Further Decision on Jurisdiction (12 May 1974) (as reported in Lalive (n 53) 159). 201 SOABI v Senegal, Award (25 February 1988) paras 8.01–8.23.

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jurisdiction.202 In both respects, the Tribunal’s reasoning reflects the doctrine of the general unity of the investment.203 The doctrine of the general unity of the investment has also been accepted in treatybased cases in order to identify the investment in the sense of Art. 25(1), and hence fulfill the directness requirement in that provision. In CSOB v Slovakia, the Claimant had granted a loan to a Slovak Collection Company that was secured by a guarantee of the Slovak Ministry of Finance.204 When the Slovak Collection Company defaulted in its payment, CSOB instituted ICSID proceedings against Slovakia. Slovakia argued that the claims against it did not arise directly out of the loan and were, therefore, outside the Tribunal’s jurisdiction. The Tribunal rejected this argument. After citing from the Fedax case it said: An investment is frequently a rather complex operation, composed of various interrelated transactions, each element of which, standing alone, might not in all cases qualify as an investment. Hence, a dispute that is brought before the Centre must be deemed to arise directly out of an investment even when it is based on a transaction which, standing alone, would not qualify as an investment under the Convention, provided that the particular transaction forms an integral part of an overall operation that qualifies as an investment.205

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The Tribunal added that the term ‘directly’ in Art. 25(1) should not lead to a restrictive interpretation merely because the claim was based on an obligation which, standing alone, did not qualify as an investment. The Slovak Republic’s obligation was closely related to the loan made by CSOB. The loan, in turn, was in integral part of, and could not be disassociated from, the overall operation of consolidating CSOB and developing its banking activity in the Slovak Republic. Therefore, the Tribunal concluded, the dispute arose directly out of the investment.206 Numerous other tribunals have since adopted the doctrine of the general unity of the investment operation in order to identify what activities and assets formed part of the investment in the sense of Art. 25(1). In doing so, tribunals have accepted that disputes arising from activities or assets that would not necessarily constitute investments by

202 ibid, paras 4.01–4.24. 203 For further instances reflecting the doctrine in contract-based arbitrations, see Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 67–164, 306; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 360–372. 204 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 1–3. 205 ibid para 72 (footnote omitted). 206 ibid paras 12, 70–75, 82, 91. But see the later decision in CSOB v Slovakia, Decision on Further and Partial Objection to Jurisdiction (1 December 2000) paras 26–32. For other cases where the Tribunal qualified loans as part of the overall investment, see Alpha Projektholding v Ukraine, Award (8 November 2010) paras 265–274; Tulip v Turkey, Award (10 March 2014) paras 172–208; Tenaris v Venezuela I, Award (29 January 2016) para 289. See also MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 196–202. For the inclusion of other ancillary agreements into the assessment of the investment as a whole, see Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 58–60, 70; H&H v Egypt, Decision on Jurisdiction (5 June 2012) para 42; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 360–372; Elsamex v Honduras, Award (16 November 2012) paras 288–291; Mamidoil v Albania, Award (30 March 2015) paras 285–288, 362–369; Koch Minerals v Venezuela, Award (30 October 2017) paras 6.57–6.59.

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themselves, but that were linked to an investment, were covered by the requirement of ‘arising directly’ out of the investment.207 In many cases, this involved looking not at individual assets or contractual arrangements, but at the operation as a whole.208 For example, in ADC v Hungary, the Claimant and a Hungarian State entity had entered into a Master Agreement and a series of more specific Project Agreements for the expansion and operation of a terminal at Budapest International Airport.209 When a dispute arose following the termination of the parties’ agreement by the State, the Respondent argued ‘the Claimants’ claims arose from contractual disputes under the Project Agreements and therefore do not pertain to disputes that arise “directly” out of an investment for the purpose of Article 25.’210 The Tribunal disagreed. It found that the entire operation had the characteristics of an investment. In its view, it was ‘necessary to have regard to the effect of all the Project Agreements.’211 Ultimately finding that the Claimant had made an investment in the sense of Art. 25(1), the Tribunal reasoned:

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In considering whether the present dispute falls within those which ‘arise directly out of an investment’ under the ICSID Convention, the Tribunal is entitled to, and does, look at the totality of the transaction as encompassed by the Project Agreements.212

In some cases, tribunals also used the doctrine of the general unity of the investment to underpin the temporal dimensions of the concept of investment.213 In Lemire v Ukraine, a dispute under the Ukraine–United States BIT, the dispute concerned a US shareholder in a Ukrainian radio station, which had tendered unsuccessfully for the allocation of new radio frequencies and the concomitant broadcasting licenses in order to expand its operation.214 The Respondent objected that the resulting dispute

207 For further endorsements of the doctrine of the general unity of the investment, see also PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 106–124; Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 38; Sempra v Argentina, Award (28 September 2007) paras 214–215; Gavazzi v Romania, Decision on Jurisdiction, Admissibility and Liability (21 April 2015) para 120; Vestey v Venezuela, Award (15 April 2016) para 196. See also Fraport v Philippines I, Decision on Annulment (23 December 2010) para 113. 208 For further cases adopting a similar approach, see Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) paras 92, 100–102; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 110–114; OKO v Estonia, Award (19 November 2007) paras 203–209; Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) paras 5.41, 5.44, 5.48; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 423–434; İçkale v Turkmenistan, Award (8 March 2016) para 293; Bear Creek Mining v Peru, Award (30 November 2017) para 296. For non-ICSID cases adopting a similar approach, see Mytilineos v State Union of Serbia & Montenegro and Serbia (UNCITRAL), Partial Award on Jurisdiction (8 September 2006) paras 120–125; White Industries v India (UNCITRAL), Final Award (30 November 2011) paras 7.6.1–7.6.10; A11Y LTD v Czech Republic (UNCITRAL), Award (29 June 2018) para 107; ICS v Argentina (UNCITRAL), Award on Jurisdiction (8 July 2019) para 293. Cf also Unión Fenosa v Egypt, Award (31 August 2018) paras 6.66–6.68. 209 ADC v Hungary, Award (2 October 2006) paras 113–124. 210 ibid para 330. 211 ibid para 325. 212 ibid para 331 (emphasis in the original). 213 For further examples, see RSM v Grenada I, Award (13 March 2009) paras 256, 264; Arif v Moldova, Award (8 April 2013) paras 363–370, 384. See also Bear Creek Mining v Peru, Award (30 November 2017) paras 295–298; Chevron v Ecuador II (UNCITRAL), Third Interim Award on Jurisdiction and Admissibility (27 February 2012) paras 4.15–4.16, 4.33, 4.36. 214 Lemire v Ukraine, Decision on Jurisdiction and Liability (14 January 2010) paras 92–98.

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concerned pre-investment activities and therefore did not arise directly out of an investment in the sense of Art. 25(1) of the Convention. The Tribunal disagreed. It distinguished between a situation where a claimant intended to enter a market for the first time, and hence a scenario where indeed no investment exists yet, and a situation where an existing investment was intended to be expanded. In such a scenario, disputes concerning the refusal to allow the expansion arise directly out of an existing investment. To arrive at this conclusion, the Tribunal made use of the principle of the general unity of the investment. It reasoned: The applications for additional frequencies and licences formed an integral part of Gala’s business operations. They were intended to defend and expand Gala’s market share against growing competition and thus enhance the sustainability and profitability of Claimant’s investment. Disputes affecting these objectives thus are directly related to Claimant’s investment as controlling shareholder of Gala.215

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The doctrine of the general unity of the investment has also been used to permit claimants access to ICSID jurisdiction, who, when looked at in isolation, have not made an investment in the sense of Art. 25(1), but whose transactions formed part of a broader operation, which was undertaken together with other entities and, as a whole, qualified as an investment.216 This situation arose in Inmaris Perestroika v Ukraine, where the Tribunal accepted jurisdiction over four related companies that were involved in different capacities in the charter and commercial operation of the Khersones, a windjammer sail training ship, owned by the Kerch Maritime Technological Institute (KMTI), a government entity.217 One Claimant, WKG, was party to the Bareboat Charter Contract with KMTI in respect of the Khersones; WKG, in turn, sub-chartered the Khersones to IWC; IWC concluded a general agency contract with IWS for marketing travel tours on the Khersones, collecting revenues, and handling the technical and nautical management of the vessel outside Ukraine; and IWS entered into an agency agreement with IPS, which carried out advertising, bookings, and customer service for the travel tours on the Khersones. The Claimants’ exploitation of the Khersones ended when, following a dispute between the parties, they were prohibited from sailing the vessel outside of Ukraine’s territorial waters. The Respondent objected, inter alia, that the Claimants’ contracts did not constitute investments out of which the dispute directly arose in the sense of the ICSID Convention. The Tribunal concluded that the charter party between WKG and KMTI gave rise to ‘claims to performance,’ thus fulfilling the definition of ‘investment’ in the Germany–Ukraine BIT and in Art. 25(1) of the ICSID Convention.218 In respect of the other Claimants, the Tribunal pointed out that it was not faced with a situation of derivative claims,219 nor with 215 ibid para 95. The Tribunal added that was ‘immaterial whether the receipt of additional frequencies had already been envisaged in Claimant’s initial business plan and whether Respondent had made any commitment to support such a business plan’ (ibid para 97) and ‘whether additional frequencies were sought to extend the reach of Gala’s existing program or to access new audiences with newly designed programs’ (ibid para 98). 216 For a similar approach, see also Cortec Mining v Kenya, Award (22 October 2018) paras 297–299. 217 For the facts of the case, see Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 30–49. 218 ibid paras 84–85. 219 ibid para 91. On the prohibition of derivative claims, see further paras 659–678 supra.

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a question of indirect investments.220 Instead, invoking the doctrine of the general unity of the investment, it concluded that it had jurisdiction as the claims of all Claimants arose directly out of an investment, which consisted in the ‘totality of the venture.’221 The Tribunal noted that it is presented with claims on behalf of all of the Inmaris companies, proceeding jointly, arising out of all of the interrelated contracts relating to the reconstruction and operation of the Khersones. Accordingly, the Tribunal can step back to consider their claimed investments as component parts of a larger, integrated investment undertaking. It is not necessary to parse each component part of the overall transaction and examine whether each, standing alone, would satisfy the definitional requirements of the BIT and the ICSID Convention. For purposes of this Tribunal’s jurisdiction, it is sufficient that the transaction as a whole meets those requirements.222

In some cases, tribunals relied on the doctrine of the general unity of the investment to substantiate the nexus between the investment and the host State’s territory.223 In Ambiente Ufficio and others v Argentina, the Respondent argued that the acquisition of security entitlements in Argentine government bonds had not taken place on Argentinian soil.224 The Tribunal reasoned that Argentina was the beneficiary of the investment and that it had ‘to conceive of the investment in question as a unified economic operation.’225 It said:

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In sum, the Tribunal is convinced that, looking at the investment operation at stake as a whole and in terms of its economic realities, it is hard to imagine the investment’s situs to be elsewhere than in Argentina. . . . the Tribunal cannot join the Respondent’s conclusion that the investment was not made in the Respondent’s territory since the decisive elements, notably the fact that the funds involved were destined to contribute to Argentina’s economic development and were actually made available to it for that purpose, qualify the investments pertinent to the present case as having been made in Argentina.226

Two decisions, however, seem to be at variance with the principle of the unity of the investment. In Joy Mining v Egypt, the Claimant had delivered and installed mining equipment. The transaction was secured by a bank guarantee. The claim before the Tribunal was for the return of the guarantee. The Tribunal did refer to the unity of the investment operation, saying that ‘a given element of a complex operation should not be examined in isolation because what matters is to assess the operation globally or as a

220 Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 97. 221 ibid para 98. 222 ibid para 92. The Tribunal added that it was irrelevant whether the contractual arrangements and the corporate set-up were ‘necessary’; rather, it was sufficient that each was an integrated part of the exploitation of the Khersones, independently of ‘whether they flow directly from KMTI or indirectly via “sub-delegation” through another Inmaris company’ (ibid para 94). 223 For further examples, see SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 102, 112; BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) para 103; SGS v Paraguay, Decision on Jurisdiction (12 February 2010) paras 113–115; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 124–125. 224 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 497. 225 ibid para 500. 226 ibid para 508.

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whole.’227 Yet elsewhere, the Tribunal denied the existence of an investment ‘as a bank guarantee is simply a contingent liability.’228 In other words, the Tribunal, rather than examining the entire transaction, looked at the bank guarantee in isolation, which was but one aspect of the operation, and examined whether it was an investment.229 The Tribunal in GEA Group v Ukraine also did not assess whether the different transactions before it formed part of a general scheme, but dissected them into isolated parts.230 In the case, the Claimant’s subsidiary KCH was bound by a long-term contract with the former State-owned refinery Oriana under which KCH provided raw fuel for conversion (the Conversion Contract). After discrepancies between the raw fuel provided to the refinery and the quantity of the finished products were discovered, Oriana and KCH signed two agreements in which Oriana acknowledged that it was indebted to KCH for these discrepancies and agreed to the payment of a specified sum of money. Later a dispute arose about the performance of these agreements; KCH had recourse to ICC arbitration as provided for in the agreements and obtained an award in its favor. Ukrainian courts subsequently thwarted KCH’s efforts to collect on the ICC award. The ICSID tribunal hearing the subsequent dispute about whether Ukraine breached the Germany–Ukraine BIT accepted that the Conversion Contract between KCH and Oriana qualified as an investment.231 It declined, however, to consider the settlement and repayment agreements, as well as the ICC award resulting from those agreements, as investments, although they were the result of breaches of the Conversion Contract.232 In the Tribunal’s view, both agreements, which were concluded in settlement of the breaches of the Conversion Contract, as well as the resulting arbitration awards, did not ‘in and of themselves – constitute “investments”’233 and remained ‘analytically distinct’ from the Conversion Contract.234 While reflecting the Claimant’s framing of what it considered its investments to be,235 the Tribunal’s conclusion appears contrary to the principle that an investment should not be dissected into its constituent parts, but looked at as a whole under the principle of the general unity of the investment.236 It is difficult to draw a precise line in general terms between disputes arising directly and those arising only indirectly out of investments. Nevertheless, ICSID practice yields certain indications for the distinction: In order to be ‘arising directly’ out of an investment, disputes must have distinctive features linking them to an investment, features that are not shared by disputes unrelated to investments. Moreover, in delineating what

227 Joy Mining v Egypt, Award (6 August 2004) para 54. 228 ibid para 44. Cf also White Industries v India (UNCITRAL), Final Award (30 November 2011) paras 7.5.1–7.5.7. 229 The Joy Mining tribunal also found that the overall transaction was an ordinary sales contract, rather than an investment. See Joy Mining v Egypt, Award (6 August 2004) paras 55–58. 230 For the facts of the case, see GEA Group v Ukraine, Award (31 March 2011) paras 32–85. 231 ibid paras 146–153. 232 ibid paras 154–164. 233 ibid paras 157 (emphasis in the original) and 161. 234 ibid para 162. 235 See ibid para 145. Note, in this context, also the Tribunal’s general position (ibid para 90) to understand its decision as remaining within the four corners of the Parties’ pleadings and not going in any aspect beyond it. 236 Cf also Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 113–114; Gavazzi v Romania, Decision on Jurisdiction Admissibility and Liability (21 April 2015) paras 115–120. See also paras 303–305 infra.

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transactions are part of the investment, the majority of tribunals rightly have recourse to the doctrine of the general unity of the investment. Under the doctrine, tribunals have refused to dissect investments into individual steps taken by investors, even if these steps were identifiable as separate legal transactions, but looked at the overall operation in order to determine the existence and scope of an investment. The fact that transactions that are ancillary, but vital to the investment are made in separate form, or even through separate entities does not in itself deprive a dispute relating to such assets or activities of its direct character. At the same time, the doctrine of the general unity of the investment cannot be used to circumvent the prohibition to bring representative and derivative claims (see paras. 659–678 infra). It allows claimants access to ICSID jurisdiction in respect of disputes arising out of transactions or operations which, if looked at in isolation, do not constitute an investment. But the principle of the general unity of the investment does not allow claimants to bring claims that vest in third parties.237 Furthermore, while it can help to circumscribe the temporal dimensions of an investment and connect preinvestment activities to other activities to qualify as a protected investment, it cannot transform pre-investment activities, which are not protected as investments, into protected investments (see further paras. 382–397 infra).238

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4. Targeted v General Measures Affecting Investments What has also given rise to discussion in ICSID arbitration is the question of whether a dispute, in order to arise directly out of an investment in the sense of Art. 25(1), had to concern a measure that was specifically addressed to or even targeted the investment itself, or whether it could also arise out of the effects a general measure had on an investment. This issue has occurred both in the context of contractbased and treaty-based disputes. In this context, tribunals have pointed out, however, that ‘from a textual point of view the term “specific” can [not] be considered as a synonym of “directly.”’239 Consequently, ‘[a] measure of the host State can affect directly an investment, so that the dispute as to the international legality of that measure arises directly out of that investment, even if the measure is not specifically aimed at that investment.’240 In the resubmitted case in Amco v Indonesia, a contract-based dispute, Indonesia alleged tax fraud and sought to recover unpaid corporate taxes by way of a

237 See Rompetrol v Romania, Award (6 May 2013) para 170 (stating that the Tribunal can only adjudicate disputes that arise directly out of an investment between the disputing parties based on the applicable BIT). Similarly, the doctrine cannot turn personal belongings of the investor into property used for the business activity connected to the investment. Cf Sedelmayer v Russia (SCC), Arbitration Award (7 July 1998) s V.3.4.3. 238 See Eyre and Montrose v Sri Lanka, Award (5 March 2020) para 301 (stating that ‘principles of unity of investment do not elevate [Claimant’s] payments and efforts in relation to the potential hotel development and to the contribution and operational risk necessary to prove a qualifying investment under Article 1 of the BIT and Article 25(1) of the ICSID Convention’ – internal reference omitted). 239 Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 71. 240 ibid. See also Total v Argentina, Decision on Jurisdiction (25 August 2006) para 61; Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) para 62; Daimler v Argentina, Award (22 August 2012) para 104.

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counterclaim.241 Amco contended that tax fraud was beyond the jurisdiction ratione materiae of the Tribunal. Amco argued that the tax dispute was only related in the most indirect way to the investment. The Tribunal noted that tax claims may well be within ICSID’s jurisdiction, but it found that in the particular case the issue of tax fraud did not arise directly out of the investment. The Tribunal reasoned: 125. . . . it is correct to distinguish between rights and obligations that are applicable to legal or natural persons who are within the reach of a host State’s jurisdiction, as a matter of general law; and rights and obligations that are applicable to an investor as a consequence of an investment agreement entered into with that host state. Legal disputes relating to the latter will fall under Article 25(1) of the Convention. Legal disputes concerning the former in principle fall to be decided by the appropriate procedures in the relevant jurisdiction unless the general law generates an investment dispute under the Convention. 126. The obligation not to engage in tax fraud is clearly a general obligation of law in Indonesia. It was not specially contracted for in the investment agreement and does not arise directly out of the investment. 127. For these reasons the Tribunal finds the claim of tax fraud beyond its competence ratione materiae.242

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The Tribunal’s observation in Amco that tax matters may well be covered by ICSID’s jurisdiction is important. This is also illustrated by Kaiser Bauxite v Jamaica, where the Government had made a ‘no further tax’ commitment to the investor. There, the Tribunal had no doubt that a dispute arising from the imposition of additional taxes in violation of the agreement between the parties arose directly from the investment and was within the Centre’s jurisdiction.243 Unlike in Amco, in Kaiser Bauxite, the tax issue was a central element of the investment relationship between the parties. The distinction made in Amco between rights and obligations of general application and those applicable to an investor as a consequence of the special investment relationship is a useful criterion for contract cases. As a general matter, however, the conceptualization of investment relationships in terms of agreements between investor and host State appears too narrow. After all, investment relationships may also be grounded on the host State’s investment legislation or on an investment treaty. In these cases, as well, the issue can arise whether a dispute arises directly out of an investment when the measures affecting an investment are of a general nature and no specific commitment existed between the parties. In a number of cases relating to Argentina’s 2001/2002 emergency legislation, the Respondent argued that the measures it had taken were of a general nature, were designed to serve the national welfare, and were not specifically directed at the particular investment. Therefore, in Argentina’s view, the dispute about these measures did not arise directly out of the investment. The tribunals did not accept this argument.

241 Amco v Indonesia, Resubmitted Case: Decision on Jurisdiction (10 May 1988) paras 110–127. 242 ibid paras 125–127. 243 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) paras 15–25. See also Schmidt (n 126) 93–95, 98–99.

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In CMS v Argentina, the Respondent argued that general measures dealing with a public economic emergency that were not directed towards investors, but affected the country and its population as a whole, could not be said to lead to a dispute arising directly out of an investment. The Tribunal distinguished between measures of a general economic nature and measures specifically directed at the investment’s operation.244 The Tribunal found that questions of general economic policy not directly related to the investment, as opposed to measures specifically addressed to the operations of the business concerned, would normally fall outside ICSID’s jurisdiction. It added that a direct relationship could, however, be established if the general measures were adopted in violation of specific commitments given to the investor in treaties, legislation, or contracts. What is then brought under ICSID’s jurisdiction is not the general measure in itself, but the extent to which the measure may violate those specific commitments.245 The Tribunal said:

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[T]he Tribunal concludes on this point that it does not have jurisdiction over measures of general economic policy adopted by the Republic of Argentina and cannot pass judgment on whether they are right or wrong. The Tribunal also concludes, however, that it has jurisdiction to examine whether specific measures affecting the Claimant’s investment or measures of general economic policy having a direct bearing on such investment have been adopted in violation of legally binding commitments made to the investor in treaties, legislation or contracts.246

The Tribunal found it sufficient that the Claimant had demonstrated prima facie that it had been adversely affected by Argentina’s measures in order to consider the claim admissible and within its jurisdiction.247 In AES v Argentina, the Respondent similarly argued that the measures under dispute were not specifically related to or targeted at the Claimant’s investment. Rather, they were measures of general bearing aimed at restoring the economy. Therefore, the dispute did not arise directly out of the investment.248 The Tribunal did not accept this argument. It said: 57. . . . What is at stake in the present case, as it was in the CMS one, are not the measures of a general economic nature taken by Argentina in 2001 and 2002 but their specific negative impact on the investments made by AES. As a sovereign State, the Argentine Republic had a right to adopt its economic policies; but this does not mean that the foreign investors under a system of guarantee and protection could be deprived of their respective rights under the instruments providing them with these guarantees and protection. . . . 60. . . . Under this provision, directness has to do with the relationship between the dispute and the investment rather than between the measure and the investment.249

244 245 247 248 249

CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 25. ibid para 27. 246 ibid para 33. ibid para 35. AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 48, 49. ibid paras 57, 60.

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In Continental Casualty v Argentina, the Respondent based its objection on the argument that ‘arising directly’ meant that the measure had to be specifically addressed to the particular investment. This would exclude general measures taken in case of emergency and affecting all sectors of the economy.250 While following CMS in framing the subject-matter of the dispute, the Tribunal added that it did not accept that ‘specific’ was a synonym of ‘directly.’251 Instead, it emphasized that a breach of international standards may well arise from general measures. The Tribunal said: International practice indeed shows that many, if not most, disputes based on an alleged breach of international standards concerning the treatment of the property of aliens, settled either by means of diplomatic protection or of direct arbitration, have arisen from general measures taken by host States, that affected directly those investments, without necessarily being specifically aimed at them. Were this not the case, nationalization measures, either aimed at the property of both nationals and foreigners, or just at foreign property, which have been the subject matter of a substantial portion of those disputes, would have escaped any international litigation and dispute settlement mechanisms.252

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Other tribunals have followed this line of argument.253 It follows that a host State cannot escape the jurisdiction of the Centre because the dispute does not arise directly out of the investment based on the fact that the measures it has taken are of a general nature, as long as these measures had a concrete effect on the investment and are presented as violating specific commitments and obligations in relation to the investment. These commitments may arise from legislation, a treaty, or a contract, and can form the basis of a dispute that arises directly out of an investment. D. ‘. . . out of an investment, . . .’

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The existence of an investment constitutes one of the requirements for the Centre to have jurisdiction.254 The concept of investment is central to dispute settlement under the

250 Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) paras 38, 39, 46, 47, 70–75. 251 ibid para 71. On the framing of the subject-matter of the dispute, see ibid para 74. 252 ibid para 72. 253 LG&E v Argentina, Decision on Jurisdiction (30 April 2004) paras 67, 68; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 71; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 59; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 21, 37–40; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 89–100; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 27–32; Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) paras 62–67; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 55–70; Total v Argentina, Decision on Jurisdiction (25 August 2006) paras 61–66; Metalpar v Argentina, Decision on Jurisdiction (27 April 2006) paras 95, 111–115; Daimler v Argentina, Award (22 August 2012) paras 100–104. See also National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) paras 135–141; BG Group v Argentina (UNCITRAL), Final Award (24 December 2007) paras 219–233. For similar arguments not relating to Argentina’s emergency legislation, see Roussalis v Romania, Award (7 December 2011) paras 486–495. 254 As part of the jurisdictional inquiry, it must only be ascertained, as a threshold matter, that an investment exists, not the precise scope of the substantive protections afforded. For differences in the analysis of the existence of an investment at the jurisdictional and merits stage, see Micula v Romania I, Decision on

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Convention.255 Yet, the Convention does not offer any definition or even description of this basic term. As the drafting history of the Convention illustrates, this was a deliberate choice that gives parties flexibility to submit a wide range of economic disputes to the Centre for settlement and allows for the meaning of investment to Jurisdiction (24 September 2008) paras 122–128; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 244, 301–302; Vestey v Venezuela, Award (15 April 2016) paras 189–200. 255 The literature dealing with the concept is abundant. It includes Noah Rubins, ‘The Notion of “Investment” in International Investment Arbitration’ in Norbert Horn and Stefan Kröll (eds), Arbitrating Foreign Investment Disputes (Kluwer 2004) 283; Ibrahim Fadlallah, ‘La notion d’investissement: vers une restriction à la compétence du CIRDI?’ in Gerald Aksen (ed), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC 2005) 259; Rudolf Dolzer, ‘The Notion of Investment in Recent Practice’ in Steve Charnovitz, Debra P Steger and Peter van den Bossche (eds), Law in the Service of Human Dignity: Essays in Honour of Florentino Feliciano (CUP 2005) 261; Barton Legum, ‘Defining Investment and Investor: Who Is Entitled to Claim?’ (2006) 22 Arb Int’l 521; Jean-Marc Loncle, ‘La notion d’investissement dans les décisions du CIRDI’ (2006) 3 Aff Int’l 3; Emmanuel Gaillard, ‘Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID Practice’ in Binder and others (n 17) 403; Brigitte Stern, ‘The Contours of the Notion of Protected Investment’ (2009) 24 ICSID Rev 534; Barton Legum and Caline Mouawad, ‘The Meaning of “Investment” in the ICSID Convention’ in Peter HF Bekker, Rudolf Dolzer and Michael Waibel (eds), Making Transnational Law Work in the Global Economy: Essays in Honour of Detlev Vagts (CUP 2010) 326; Veijo Heiskanen, ‘Of Capital Import: The Definition of “Investment” in International Investment Law’ in Anne K Hoffmann (ed), Protection of Foreign Investments through Modern Investment Treaty Arbitration – Diversity and Harmonisation (ASA Special Series No 34, May 2010) 51; Michael Hwang, ‘Recent Developments in Defining “Investment”’ (2010) 24 ICSID Rev 2; Michael Hwang and Jennifer Fong Lee Cheng, ‘Definition of “Investment” – A Voice from the Eye of the Storm’ (2011) 1 Asian JIL 99; David AR Williams and Simon Foote, ‘Recent Developments in the Approach to Identifying an “Investment” Pursuant to Article 25(1) of the ICSID Convention’ in Chester Brown and Kate Miles (eds), Evolution in Investment Treaty Law and Arbitration (CUP 2011) 42; Mavluda Sattorova, ‘Defining Investment under the ICSID Convention and BITs: Of Ordinary Meaning, Telos, and Beyond’ (2012) 2 Asian JIL 267; Andrés Rigo Sureda, Investment Treaty Arbitration: Judging under Uncertainty (CUP 2012) 56–75; Georges Abi-Saab, ‘The Concept of Investment in the ICSID Convention’ in Mohamed Abdel Raouf, Philippe Leboulanger and Nassib G Ziadé (eds), Festschrift Ahmed Sadek El-Kosheri: From the Arab World to the Globalization of International Law and Arbitration (Wolters Kluwer 2015) 239; Jan Asmus Bischoff and Richard Happ, ‘The Notion of Investment’ in Bungenberg and others (n 18) 495; Roberto Castro de Figueiredo, ‘The Notion of Investment and Economic Development under the ICSID Convention’ in Baltag (n 18) 75; Emmanuel Gaillard and Yas Banifatemi, ‘The Long March towards a Jurisprudence Constante on the Notion of Investment’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer 2016) 97; Katia Yannaca-Small, ‘Definition of “Investment”: An Open-Ended Search for a Balanced Solution’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) 266; Stratos Pahis, ‘Investment Misconceived: The Investment–Commerce Distinction in International Investment Law’ (2020) 45 Yale JIL 69; Michael Waibel, ‘Subject Matter Jurisdiction: The Notion of Investment’ (2021) 19 ICSID Reports 25. See also Farouk Yala, ‘The Notion of “Investment” in ICSID Case Law: A Drifting Jurisdictional Requirement? Some “Unconventional” Thoughts on Salini, SGS and Mihaly’ (2005) 22 J Int’l Arb 105; Engela C Schlemmer, ‘Investment, Investor, Nationality, and Shareholders’ in Muchlinski, Ortino and Schreuer (n 18) 49, 51–69; Devashish Krishan, ‘A Notion of ICSID Investment’ in Todd Weiler (ed), Investment Treaty Arbitration and International Law vol 1 (Juris 2008) 61; Pierre-Emmanuel Dupont, ‘The Notion of ICSID Investment: Ongoing “Confusion” or “Emerging Synthesis”?’ (2011) 12 JWIT 245; Laurens JE Timmer, ‘The Meaning of “Investment” as a Requirement for Jurisdiction Ratione Materiae of the ICSID Centre’ (2012) 29 J Int’l Arb 363; Dieudonné Édouard Onguene Onana, ‘Qualification d’investissement et compétence en arbitrage international relatif aus investissements: la théorie du contrôle séparé devant le CIRDI’ [2012] RGD 57; Dieudonné Édouard Onguene Onana, La Compétence en arbitrage international relatif aux investissements: Les conditions d’investissement et de nationalité devant le CIRDI (Bruylant 2012); Michail Dekastros, ‘Portfolio Investment: Reconceptualising the Notion of Investment under the ICSID Convention’ (2013) 14 JWIT 286; Giorgio Risso, ‘Portfolio Investments in ICSID Arbitration: Just a Matter of Consent?’ (2020) 37 J Int’l Arb 341.

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evolve (see paras. 163–176 infra). This notwithstanding, the notion of investment in Art. 25(1) is an objective notion that establishes outer limits for the jurisdiction of the Centre which must be respected in addition to any definition of investment that the parties may have adopted in their instrument of consent (see paras. 177–225 infra). Over time, the contours of that notion have been concretized, both through doctrine and arbitral practice, to include a number of characteristics that help identify the existence of an investment in the sense of Art. 25(1); these include a contribution by the investor, a certain duration, the assumption of risk, and – albeit more controversially – a contribution to the host State’s development (see paras. 226–280 infra). In this context, a large amount of arbitral practice has developed, which addresses not only the general meaning and function of the term, but also a number of special issues concerning different types and forms of investments (see paras. 281–380 infra), temporal and territorial aspects of investments (see paras. 381–437 infra), and issues concerning the legality of investments (see paras. 438–479 infra).

1. Drafting History 163

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The final text of Art. 25, which requires the existence of an investment in order for the Centre to have jurisdiction, without further defining that term, is the product of a compromise between the interests of capital-exporting countries, who favored a broad jurisdictional grant that was limited only by the disputing parties’ consent, and capitalimporting countries who favored a much stricter limitation of the types of disputes that the Centre could take up.256 The compromise ultimately cast into the text of the Convention consisted of, on the one hand, limiting ICSID’s jurisdiction to ‘investment’ disputes, without defining that notion, and, on the other, providing for several mechanisms for States to tailor the Centre’s jurisdictional reach over disputes involving them, including in particular the scope of consent given and notifications under Art. 25(4).257 The Working Paper’s draft on jurisdiction did not even contain a reference to ‘investments’ (History, Vol. II, pp. 22, 33). Mr. Broches advised against limiting or defining the type of disputes that could be submitted to the Centre, since it would be difficult to find a satisfactory definition and since any definition was likely to lead to jurisdictional controversies (ibid., pp. 22, 54, 59). On the other hand, a number of delegates found more precision desirable (ibid., pp. 57, 66, 67). The Preliminary Draft included the requirement that the Centre’s jurisdiction be limited to ‘any existing or future investment dispute of a legal character,’ but failed to offer a definition (ibid., pp. 202–204). Instead, as the attached comment explained, the use of the term ‘investment dispute’, and the requirement that the dispute be of a legal character as distinct from political, economic or purely commercial disputes, were thought adequate to limit the scope of the Convention in this regard. Within those limits Contracting States would be free to determine in each particular case what disputes they would submit to the Center. To include a more precise definition would tend to open the

256 For a detailed account of the relevant negotiations, see also Julian D Mortenson, ‘The Meaning of “Investment”: ICSID’s Travaux and the Domain of International Investment Law’ (2010) 51 Harvard ILJ 257, 281–296. See also Waibel (n 255) paras 25–46. 257 See Mortenson (n 256) 292–296 (who adds reservations to the Convention as a further possibility). On the limited permissibility of reservations, see Art. 68, paras 10–14.

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door to frequent disagreements as to the applicability of the Convention to a particular undertaking, thus undermining the primary objective of this article viz., to give confidence that undertakings to have recourse to conciliation or arbitration will be carried out.258

The subsequent discussions showed a widely held opinion that a definition of the term ‘investment’ was necessary (History, Vol. II, pp. 182, 261, 293, 297, 450, 468, 470, 474, 492, 493, 496, 499–500, 501, 502, 504). At the same time, some suggestions as to possible definitions were put forward (ibid., pp. 285, 493, 537, 564). These reflected the basic separation between those who wanted to create a forum that was open for the widest possible range of economic disputes between private parties and States and those who wanted a limited jurisdiction that would protect States’ sovereignty.259 Mr. Broches, however, continued to oppose a definition (ibid., pp. 203–204, 395, 451, 497). The First Draft introduced a definition in the following terms:

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Article 30 For the purposes of this Chapter (i) ‘investment’ means any contribution of money or other assets of economic value for an indefinite period or, if the period be defined, for not less than five years.260

This draft led to a broad critical discussion and a flurry of counterproposals both before and within the Legal Committee that convened starting in November 1964. Some delegates found the draft unsatisfactory (History, Vol. II, pp. 661, 699), especially since it was too imprecise (ibid., pp. 652, 668, 700, 703, 707). There was considerable opposition to the word ‘contribution’ (ibid., pp. 702, 703, 708, 709, 710), but also to the introduction of a specific time element (ibid., pp. 705, 707). Some alternative proposals emphasized aspects of money and profit (ibid., pp. 704, 837), property rights (ibid., p. 704), or the host State’s interest in development (ibid., pp. 705, 839). The various suggested definitions of ‘investment’ prompted Mr. Broches to remark that they were, in fact, definitions of what the delegates believed their governments would wish to submit to the Centre (ibid., pp. 704, 707). Some definitions in BITs (ibid., p. 843) and domestic statutes (ibid., pp. 843–834) were also quoted, but had not proven acceptable (ibid., p. 972). An attempted definition by the Secretariat was presented in the following terms:

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The term ‘investment’ means the acquisition of (i) property rights or contractual rights (including rights under a concession) for the establishment or in the conduct of an industrial, commercial, agricultural, financial or service enterprise; (ii) participations or shares in any such enterprise; or (iii) financial obligations of a public or private entity other than obligations arising out of short-term banking or credit facilities.261

Mr. Broches insisted that the precise delimitation of the Centre’s jurisdiction was best left to the parties (History, Vol. II, pp. 707, 710). He found support with the UK delegate who agreed that a definition would only create jurisdictional difficulties (ibid.,

258 History, Vol II, 203–204. 260 History, Vol I, 116.

259 Mortenson (n 256) 285. 261 History, Vol II, 844.

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pp. 668, 702, 822). This view was endorsed by a number of other delegates (ibid., pp. 703, 706–707, 823, 844). Yet another group advocated for the inclusion of a descriptive list only (ibid., pp. 707, 709, 824, 825). A working group to which the issue was transferred was unable to come up with an agreed position, providing instead two possible formulations: one alternative, reflecting the position of capital-exporting countries, that excluded any definition of ‘investment’ at all; and a second alternative, reflecting the position of capital-importing countries, that consisted of a closed list of disputes for which the Centre had jurisdiction, namely those involving compliance with investor–State contracts, guarantee obligations given to specific investments, and to determine any indemnity for violations of rights acquired by an investor (ibid., p. 828). The looming impasse on the scope of ICSID’s jurisdiction was eventually overcome by a compromise suggested by the United Kingdom, which resulted in the Convention’s current jurisdictional structure. The proposal opted to limit ICSID’s jurisdiction to ‘investment’ disputes, without defining that notion, and combined this jurisdictional grant with a notification mechanism (now found in Art. 25(4)) that would allow States to declare what disputes they would not consider submitting to the Centre (History, Vol. II, p. 821). This proposal was, subject to a number of minor modifications, adopted by a large majority in the Legal Committee in a vote against a proposal that defined the Centre’s jurisdiction through a narrowly defined list of investment disputes based on the working group’s second alternative (amended only to be an illustrative, rather than a closed list) (ibid., pp. 824, 825, 826, 880). As a consequence of this compromise, neither the Revised Draft nor the Convention itself contains a definition of the term ‘investment.’ A number of specific points were discussed during the debate on the term ‘investment,’ but were either not adopted or left open. It was felt by many that the Centre should only be concerned with investments of a certain magnitude. In fact, the Working Paper provided that, subject to special agreement by the parties, the Centre would not exercise jurisdiction in respect of disputes involving claims of less than USD 100,000 (History, Vol. II, p. 34). Although this clause was eliminated from the Preliminary Draft, it continued to attract the delegates’ attention. There was considerable support for introducing a minimum limit in order to exclude insignificant claims (ibid., pp. 257–258, 260, 498, 502, 547, 660, 669, 710). In objection to these various suggestions it was argued that not all claims would be presented in terms of money, and that smaller claims could lead to important test cases (ibid., pp. 204, 260, 432, 497, 567, 660). Some delegates felt that the total value of the investment and not the claim under dispute should be determinative (ibid., pp. 497, 706). Yet another proposal envisaged the involvement of the investor’s Government (ibid., pp. 498, 503), or the Secretary-General’s screening power (ibid., p. 258), to shield the Centre from insignificant claims. Mr. Broches opposed inflexible limits and pointed to the parties’ autonomy also in this matter (ibid., pp. 497, 499). No quantitative limit was included in any of the subsequent drafts or in the Convention. Another topic of discussion related to the necessary duration of the engagement of a foreign national in the host State. While the First Draft defined ‘investment’ as requiring the ‘contribution of money or other assets of economic value for an indefinite period or, if the period be defined, for not less than five years’ (see para. 166 supra), this limitation was dropped after receiving strong criticism in the Legal Committee (History, Vol. II,

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pp. 702, 705, 707). At the same time, the understanding remained among delegates that not every capital transfer by a foreign national, such as short-term transactions, would automatically qualify as an investment (ibid., p. 450). A further topic of discussion was the exclusion of ‘old investments’ from the Convention’s application. The aim was to limit the Centre’s jurisdiction to disputes arising from investments made after the Convention’s entry into force: since the Convention’s purpose was to create a favorable investment climate in the future, it should not be applied to older investments, especially those made when the countries concerned had not yet gained control over the conditions for admission (History, Vol. II, pp. 320, 468, 500, 503, 504, 548, 565, 669). Mr. Broches opposed this suggestion, pointing out that the desired exclusion could be achieved by a refusal of consent in respect of old investments (ibid., p. 566). The idea to exclude old investments was not pursued further. Other questions that were left open concerned the Centre’s jurisdiction over loans (History, Vol. II, pp. 261, 474, 668, 709), suppliers’ credits (ibid., p. 451), outstanding payments (ibid., p. 542), ownership of shares (ibid., p. 661), and construction contracts (ibid., p. 500). At the same time, attempts generally to exclude purely commercial disputes from the Centre’s jurisdiction by including the term ‘investment’ did not succeed (ibid., pp. 260, 395, 397, 493, 702, 705).262 In the debate over the draft for the Executive Directors’ Report, Mr. Broches recalled that none of the suggested definitions for the word ‘investment’ had proven acceptable. He suggested that, while it might be difficult to define the term, an investment was in fact readily recognizable. He proposed that the Report should say that the Executive Directors did not think it necessary or desirable to attempt a definition (History, Vol. II, pp. 957, 972). After some further debate about the desirability of a definition, the more neutral statement was adopted in the Report that no attempt had been made in the Convention itself to define the term ‘investment’ (ibid., pp. 972, 1027).263 The relevant portion of the Report of the Executive Directors, as adopted, says:

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27. No attempt was made to define the term ‘investment’ given the essential requirement of consent by the parties, and the mechanism through which Contracting States can make known in advance, if they so desire, the classes of disputes which they would or would not consider submitting to the Centre (Article 25(4)).264

As a reflection of the Convention’s travaux, this statement in the Report is, of course, incorrect, as there had been a number of attempts to define the notion of investment, which all failed. But it accurately reflects the fact that the Convention itself offers no explanation or concretization of the concept of investment. Instead, the omission of a 262 See also Mortenson (n 256) 298–299 (concluding that ‘all efforts to preclude jurisdiction over “merely commercial” activity were dropped’). In the same sense, Pahis (n 255) 99–101. 263 According to Mortenson, the Report’s ‘bland description of the compromise was adopted at least in part to appease José Mejia-Palacio, a World Bank Director from Colombia who advocated a narrow version of investment and who ultimately became the only Director to enter a recorded vote against the Convention’ (Mortenson (n 256) 292). Its ‘abbreviated summary’ of the drafting history not only ‘obscured the intensity and the details of the underlying conflict’ (ibid), the ‘word choice in the widely promulgated report may bear substantial culpability for modern tribunals’ failure to implement the historical agreement’ (ibid 293, fn 184). 264 (1993) 1 ICSID Reports 23, 28.

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definition was a deliberate choice in order to give parties flexibility to submit a wide range of disputes to the Centre for settlement by consent. While allowing for the meaning of investment to evolve over time – also in reaction to new economic and technological developments – the notion of investment was understood to have some limiting function on excluding non-investment disputes and in serving as an outer limit in terms of the subject-matter of disputes that could be submitted to the Centre.265 In addition, several of the debates during the drafting of the Convention provide important hints as to the relevance or irrelevance of certain factors in limiting what the Convention understands as an investment, including in terms of value, duration, or type of transaction.

2. The Dual Test for the Existence of an Investment 177

That the reference to the essential requirement of consent in the Report of the Executive Directors (see para. 175 supra) does not imply unlimited freedom for the parties to define the scope of disputes that could be submitted to the Centre also reflects in actual dispute settlement practice. The large majority of ICSID tribunals has recognized that the term ‘investment’ in Art. 25(1) constitutes an objective notion that is independent of, and constitutes an outer limit for, the type of disputes that the parties can consent to submit to the Centre (see paras. 178–186 infra). Hence, in order for the Centre to have jurisdiction, a dual test for the existence of an investment must be passed: On the one hand, the activity or transaction in question must qualify as an investment under the instrument containing the parties’ consent (see paras. 187–225 infra). On the other hand, the activity must also fall within the outer limits that the notion of investment in Art. 25(1) establishes for the subject-matter jurisdiction of the Centre (see paras. 226–280 infra).

a) The Objective Nature of the Notion of Investment 178

The drafting history of the Convention leaves no doubt that the Centre’s services would not be available for just any dispute that the parties may wish to submit, but are subject to outer limits that are open to objective determination both by the SecretaryGeneral pursuant to Arts. 28(3) and 36(3) and arbitral tribunals and conciliation commissions under Arts. 32(2) and 41(2). In addition, leaving the definition of investment in the sense of Art. 25(1) entirely to the parties’ consent would make the notion itself superfluous – a result that is incompatible with the principle of effective treaty interpretation, which requires that a term should be given meaning, rather than be deprived of it (effet utile).266

265 Some limiting function of the notion of investment in Art. 25(1) is also acknowledged by Mortenson (n 256) 300, namely whether ‘the thing in question [is] a plausibly economic activity or asset,’ although he otherwise considers the requirement historically to have been conceived as being ‘a nonjusticiable norm whose enforcement depends solely on the give and take among political entities . . . with the scope of investment cabined only by individual countries’ consent in order to “allow as general as application as possible”’ (ibid 299–300, quoting from observations made by Austria on the Draft Convention in History, Vol II, 670). On the notion of investment being a generic term that is subject to evolutionary interpretation, see Waibel (n 255) paras 16–20. 266 See also Joy Mining v Egypt, Award (6 August 2004) paras 49–50; Pey Casado v Chile, Award (8 May 2008) para 232. On the application of the effet utile principle in investor–State dispute settlement more

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That the term ‘investment’ in Art. 25(1) has an objective meaning that is independent of the parties’ disposition is also confirmed by Rule 2 of the Institution Rules. It mandates that a request for conciliation or arbitration must indicate not only particulars concerning the parties’ consent (Rule 2(1)(c)), but also, as a separate requirement, information concerning the issue in dispute, indicating that there is a legal dispute arising directly out of an investment (Rule 2(1)(e)). Therefore, while it is clear that the parties have much freedom in describing their transaction as an investment, they cannot designate an activity as an investment that is outside of the objective meaning of that concept (see also paras. 7–9 supra). Still, the lack of a definition of ‘investment’ in Art. 25(1) of the Convention, coupled with the statement in the Report of the Executive Directors that such a definition was not needed in light of the requirement of the parties’ consent, has led some tribunals to adopt a subjectivist approach, which looks solely at the instrument containing the parties’ consent for determining whether an investment exists.267 While the subjectivist approach still persists in a smaller set of more recent decisions,268 the cases endorsing it mostly date from early treaty-based arbitrations. In Gruslin v Malaysia II, for example, the Sole Arbitrator reasoned: It is clear to the Tribunal that Article 25(1) does not touch upon the definition of ‘investment’ for the purposes of either the Convention or the [BIT]. Article 25(1) inter alia is directed to defining the Convention requirement for written consent with respect to the ‘investment . . . which the parties to the dispute consent in writing to submit to the Centre’. It does not operate to define the particular investment. That is a matter to be determined by the terms of the [BIT] as the document relied upon as constituting the consent.269

generally, see J Romesh Weeramantry, Treaty Interpretation in Investment Arbitration (OUP 2012) 143–147; Tarcisio Gazzini, Interpretation of International Investment Treaties (Hart 2016) 169–175. 267 On the subjectivist v the objectivist approach, see also Stern (n 255) 535–541; Gaillard and Banifatemi (n 255) 105–110; Gazzini (n 266) 114–118. 268 See ATA Construction v Jordan, Award (18 May 2010) para 111 (stating that ‘[t]he ICSID Convention leaves the definition of the term investment open to the parties, allowing them to determine its scope and application pursuant to mutual agreement in the relevant BIT’); Al Tamimi v Oman, Award (3 November 2015) paras 275–280; Garanti Koza v Turkmenistan, Award (19 December 2016) paras 235–242; Tethyan Copper v Pakistan, Decision on Jurisdiction and Liability (10 November 2017) para 571. See also the ambiguous analysis in MCI v Ecuador, Award (31 July 2007) paras 157–161, 165; Malaysian Historical Salvors v Malaysia, Decision on Annulment (16 April 2009) paras 72–74; Awdi v Romania, Award (2 March 2015) paras 197–199; RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 157; Blusun v Italy, Award (27 December 2016) para 271; Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) paras 168–169. 269 Gruslin v Malaysia II, Award (27 November 2000) para 13.6. For a similar approach, see Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 48; Generation Ukraine v Ukraine, Award (16 September 2003) para 8.2. See also CMS v Argentina, Decision on Annulment (25 September 2007) para 71. In addition, some other early treaty-based ICSID cases focused principally on the notion of investment in the applicable BIT, without, however, necessarily suggesting that the concept of investment in Art. 25(1) lacked objective content. See eg Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 67–68; Olguín v Paraguay, Award (26 July 2001) para 28; Genin v Estonia, Award (25 June 2001) paras 321–325; Vivendi v Argentina, Award (21 November 2000) para 45; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 65–66; SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 99–112; Parkerings v Lithuania, Award (11 September 2007) paras 249–254.

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By contrast, the large majority of arbitral tribunals rightly has accepted that the notion of investment in Art. 25(1) has an objective meaning that is independent from the parties’ consent.270 In CSOB v Slovakia, the existence of an investment was disputed. The agreement between the parties referred to the BIT, thereby incorporating the BIT’s reference to ICSID arbitration.271 This, in the Tribunal’s view, created a strong presumption that the parties considered their transaction as an investment within the meaning of the Convention.272 But the Tribunal did not accept that this disposed of the question whether there was an investment. It said: The Slovak Republic is correct in pointing out, however, that an agreement of the parties describing their transaction as an investment is not, as such, conclusive in resolving the question whether the dispute involves an investment under Article 25(1) of the Convention. The concept of an investment as spelled out in that provision is objective in nature in that the parties may agree on a more precise or restrictive definition of their acceptance of the Centre’s jurisdiction, but they may not choose to submit disputes to the Centre that are not related to an investment. A two-fold test must therefore be applied in determining whether this Tribunal has the competence to consider the merits of the claim: whether the dispute arises out of an investment within the meaning of the Convention and, if so, whether the dispute relates to an investment as defined in the Parties’ consent to ICSID arbitration, in their reference to the BIT and the pertinent definitions contained in Article 1 of the BIT.273

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The Tribunal in Salini v Morocco, in a dispute under the Italy–Morocco BIT, also endorsed the view that the notion of ‘investment’ in Art. 25(1) of the Convention was independent from the same term used in the BIT and had to be given an independent meaning from the parties’ instrument of consent. It reasoned that insofar as the option of jurisdiction has been exercised in favour of ICSID, the rights in dispute must also constitute an investment pursuant to Article 25 of the Washington Convention. The Arbitral Tribunal, therefore, is of the opinion that its jurisdiction depends upon the existence of an investment within the meaning of the Bilateral Treaty as well as that of the Convention, in accordance with the case law.274

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The Tribunal, referencing the statement in the Report of the Executive Directors (see para. 176 supra), noted that ‘[n]o definition of investment is given by the Convention,’275 and added:

270 In this sense already, but without further exploring the content of the objective meaning, Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) paras 21–43; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 133–140. Other tribunals have also undertaken separate examinations of the concept of investment under the parties’ consent to jurisdiction and under Art. 25(1), without however reflecting on the independence of the notion of investment in Art. 25. See eg RFCC v Morocco, Decision on Jurisdiction (16 July 2001) paras 50–66; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras 73–86; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 98, 119. 271 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 55. 272 ibid para 66. 273 ibid para 68. 274 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 44 (citing Fedax v Venezuela, Decision on Jurisdiction (11 July 1997)). 275 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 51.

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However, it would be inaccurate to consider that the requirement that a dispute be ‘in direct relation to an investment’ is diluted by the consent of the Contracting Parties. To the contrary, ICSID case law and legal authors agree that the investment requirement must be respected as an objective condition of the jurisdiction of the Centre.276

Further endorsement of this position followed, inter alia, in Joy Mining v Egypt, where the Claimant argued that the transaction in question, a bank guarantee, fell within the broad definition of ‘investment’ contained in the BIT between Egypt and the United Kingdom.277 The Tribunal found that there was a limit to the freedom with which the parties could define an investment for purposes of ICSID’s jurisdiction. It said:

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The parties to a dispute cannot by contract or treaty define as investment, for the purpose of ICSID jurisdiction, something which does not satisfy the objective requirements of Article 25 of the Convention. Otherwise Article 25 and its reliance on the concept of investment, even if not specifically defined, would be turned into a meaningless provision.278

Numerous other tribunals have endorsed this approach since, thus recognizing the objective nature of the notion of investment in Art. 25(1).279 That the notion of investment in Art. 25(1) is an objective notion has two implications. First, it entails that the disputing parties cannot extend the Centre’s jurisdiction by agreeing on a wider notion of investment. They are limited to submit disputes arising out of transactions to the Centre that qualify as an investment in the sense of Art. 25(1). Second, it requires the application of a dual test to determine whether a dispute arising out of the parties’ transaction or activity qualifies as an investment dispute, that is: (1) whether the activity in question is covered by the parties’ consent; and (2) whether it meets the Convention’s independent requirement.280 This approach is followed by most arbitral tribunals, in particular if jurisdiction is to be based on a treaty or legislation containing an offer of consent. In those cases, the definition of investment in the treaty or legislation will determine the scope of consent ratione materiae. In addition, an arbitral tribunal or conciliation commission will have to establish that the activity remains within the outer limits of the concept of investment in the sense of the 276 ibid para 52 (referring to a case comment on Fedax v Venezuela by Emmanuel Gaillard, ‘Chronique des sentence arbitrales’ (1999) 126 JDI 273, 290 ff and his reference to Alcoa Minerals v Jamaica, Decision on Jurisdiction (6 July 1975)). 277 Joy Mining v Egypt, Award (6 August 2004) paras 42–50. 278 ibid para 50. 279 Mihaly v Sri Lanka, Award (15 March 2002) paras 52, 58; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 278; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 90; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 80; Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 31; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 55; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 113; Pey Casado v Chile, Award (8 May 2008) para 232; RSM v Grenada I, Award (13 March 2009) para 235; BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) para 87; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 66–68; Saba Fakes v Turkey, Award (14 July 2010) para 108; Global Trading v Ukraine, Award (1 December 2010) paras 43–45; RSM v Central African Republic, Decision on Jurisdiction and Liability (7 December 2010); El Paso v Argentina, Award (31 October 2011) para 142; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 211–217; Houben v Burundi, Award (12 January 2016) para 114; Cortec Mining v Kenya, Award (22 October 2018) para 255. For further references to cases, see the discussion in paras 235–269 infra. 280 Rubins (n 255) 289–290.

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Convention. This dual test has at times been referred to as the ‘double keyhole’ approach or as a ‘double barrelled’ test.281 It also applies when consent is based on a contract.

b) Notions of Investment in Instruments of Consent 187

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Strictly speaking, the meaning of ‘investment’ as reflected in the parties’ consent agreement is a matter of the scope of consent and ought to be discussed in that context (see paras. 948–980 infra). For the sake of convenience, not least because parties to ICSID proceedings often do not distinguish between the two aspects when raising preliminary objections, it is discussed here in the context of the concept of ‘investment.’ Consent may be given in three ways: through a contract between the host State and the investor, through a provision in the host State’s investment legislation that has been accepted by the investor, or through a clause in a treaty that has been accepted by the investor (see also paras. 767–862 infra). (i) Contracts Relating to Investments A clause in an agreement by which the parties consent to submit disputes to the Centre is a strong indication that they consider their transaction to qualify as an investment in the sense of Art. 25(1) of the Convention. The classification by the parties of the proposed operation as an investment arises by necessary implication from the ICSID clause.282 This notwithstanding, the 1993 ICSID Model Clauses suggest a specific clarification on this point for inclusion in a contract between a foreign investor and the host State: Clause 3 It is hereby stipulated that the transaction to which this agreement relates is an investment.283

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The earlier versions of the Model Clauses offered formulae to the same effect.284 The Introductory Note to Clause 3 of the 1993 Model Clauses states that the inclusion of such a clause in a contract is designed to strengthen the presumption in favor of the existence of an investment in the sense of Art. 25(1) of the Convention, which arises from the parties’ consent to submit disputes under the contract to the Centre. A specific statement in an investment agreement containing an ICSID clause that the planned transaction is an investment is not necessary for the contract to qualify as an investment in the sense of Art. 25(1), but it is advisable to avoid disputes on that point.

281 See Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 278; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 55; Malicorp v Egypt, Award (7 February 2011) para 107; Phoenix Action v Czech Republic, Award (15 April 2009) para 74; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 438; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) para 242; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 413; CMC v Mozambique, Award (24 October 2019) para 191. 282 See also Amerasinghe, ‘Submissions’ (n 26) 223; Broches (n 13) 268; Heribert Golsong, ‘A Guide to Procedural Issues in International Arbitration’ (1984) 18 Int’l Lawyer 633, 634–635. 283 (1997) 4 ICSID Reports 360. 284 See Clause IV of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 201; Clause IX of the 1968 Model Clauses, (1968) 7 ILM 1159, 1169.

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It demonstrates that the parties have given careful thought to the nature of the project and that, when adopting the ICSID clause, they were aware of the Centre’s jurisdictional requirements. As Broches concluded, such an agreement ‘will be given great weight in any determination of the Centre’s jurisdiction, although it would not be controlling.’285 Delaume further recommends that such a specific statement be supplemented with a description of the particular features of the transaction, such as its nature, size, and duration.286 This is particularly advisable in order to strengthen the credibility of the transaction’s classification as an investment in the sense of Art. 25(1) in borderline situations. Parties to agreements containing ICSID clauses have sometimes specified in their agreements that the intended transaction is indeed an investment287 or described the features that would make this characterization plausible. In CSOB v Slovakia, the Tribunal interpreted a reference in a contract between the parties to a BIT containing an ICSID arbitration clause as expressing their view that their transaction was an investment within the meaning of Art. 25(1) of the Convention.288 In most contract-based cases before ICSID, the question whether the dispute at hand arose from an investment in the sense of Art. 25(1) did not create problems, not least because the facts squarely fit that concept.289 Only in a few cases did the respondent actually object that the parties’ transaction did not qualify as an investment.290 Several tribunals even considered, as did the Tribunal in CSOB v Slovakia, that

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[t]he Parties’ acceptance of the Centre’s jurisdiction with respect to the rights and obligations arising out of their agreement therefore creates a strong presumption that they considered their transaction to be an investment within the meaning of the ICSID Convention.291

It would go too far, however, to consider that the parties’ contractual agreement to consent to the jurisdiction of the Centre, or their qualification of their transaction as an investment in the sense of Art. 25(1), would give rise to estoppel. This is what the Tribunal in Caratube and Hourani v Kazakhstan may be understood to have suggested when stating that ‘where there is an agreement between the parties regarding the 285 Broches (n 13) 268. 286 Delaume (n 120) 182. See also Comment 9 in the 1981 Model Clauses, (1993) 1 ICSID Reports 201. 287 See eg World Duty Free v Kenya, Award (4 October 2006) para 6. The contractual clause containing consent to ICSID arbitration contained the following proviso: ‘It is hereby stipulated . . . (b) that the transaction to which this Agreement relates is an “investment” within the meaning of the Convention.’ For a further example, see SEMOS v Mali, Award (25 February 2003) (2006) 10 ICSID Reports 114, 117. 288 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 66, 67, 89. 289 But see the somewhat unclear treatment of a contractual clause expressing consent to ICSID’s jurisdiction in Zhinvali v Georgia, Award (24 January 2003) paras 171, 172, 407. 290 See CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 62–91; RSM v Grenada I, Award (13 March 2009) paras 213–266; Elsamex v Honduras, Award (16 November 2012) paras 239–283; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 355–372; Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 185–246, 251–252. See also Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 629–650 (where the issue was not so much whether an investment existed, but who had made it). 291 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 66. Similarly, RSM v Grenada I, Award (13 March 2009) para 236; RSM v Central African Republic, Decision on Jurisdiction and Liability (7 December 2010) para 47; Elsamex v Honduras, Award (16 November 2012) para 281.

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existence of an investment, they are generally precluded from later challenging ICSID’s jurisdiction based on the alleged absence of an investment.’292 Instead, it is clear that also in cases where the Centre’s jurisdiction is based on a contract the disputing parties are not free to determine the meaning of investment in the sense of Art. 25(1), and thereby contract around the outer limits established for the Centre’s jurisdiction. They can only submit contract-based disputes to the Centre, if their transaction qualifies objectively as an investment in the sense of Art. 25(1). As stated by the Tribunal in RSM v Grenada I: This Tribunal, however, like several earlier ICSID tribunals, subscribes to the concept that a private party and a state contracting with each other are not at liberty to create their own definition of an investment under the ICSID Convention with the effect of bringing a dispute under the jurisdiction of ICSID even where their operation is clearly not an investment. There are certain objective elements to an investment which must be present; and it is the duty of this Tribunal to ensure that they are present, lest its assertion of jurisdiction be false and amount to an abuse of power.293

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Similarly, the Tribunal in Standard Chartered Bank (Hong Kong) v Tanzania noted that the Parties’ consent as reflected in the contract, while of great importance, could not be the only test and is not conclusive in resolving the issue of whether there is jurisdiction under Article 25 of the ICSID Convention. The subject matter of the dispute must nevertheless still be an investment as contemplated by the ICSID Convention and consent by the Parties alone could not subject an ordinary commercial transaction or political dispute or non-legal dispute to ICSID for resolution.294

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A presumption, if any, that the parties’ transaction qualifies as an investment in the sense of Art. 25(1) is therefore at best refutable.295 Furthermore, even in contract-based cases, where none of the parties had challenged the Centre’s jurisdiction for lack of a qualifying investment, ICSID tribunals are called to examine the question of the existence of an investment in the sense of Art. 25(1) on their own motion. This is what happened in the large majority of cases. In Kaiser Bauxite v Jamaica, the Tribunal noted the essential requirement of consent as mentioned in para. 27 of the Executive Directors’ Report (see para. 175 supra) and concluded that the consent of the parties should be entitled to great weight in any determination of the Centre’s jurisdiction. Turning to the objective requirement of an investment, the Tribunal said: Moreover, it seems clear to the Tribunal that a case like the present, in which a mining company has invested substantial amounts in a foreign state in reliance upon an agreement with that State, is among those contemplated by the Convention.296

292 Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 635. 293 RSM v Grenada I, Award (13 March 2009) para 235. Similarly, RSM v Central African Republic, Decision on Jurisdiction and Liability (7 December 2010) para 48. 294 Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) para 194 (relying on the Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (18 March 1965) (1993) 1 ICSID Reports 23, 28, para 25). 295 RSM v Central African Republic, Decision on Jurisdiction and Liability (7 December 2010) para 48. 296 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 17. See also Schmidt (n 126) 99–100.

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In LETCO v Liberia, the Tribunal took it upon itself to examine all requirements for jurisdiction under Art. 25(1).297 It gave a brief description of the activities under the Concession Agreement, which concerned the harvesting and processing of forest products in Liberia, putting special emphasis on the extensive amounts that LETCO had paid out for the development of the concession. It concluded:

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There is, therefore, no doubt that, based on the Concession Agreement, amounts paid out to develop the concession, as well as other undertakings, this legal dispute has arisen directly from an ‘investment’ as that term is used in the Convention.298

Similarly, other tribunals have made at least an affirmative statement, based on their own assessment of the Centre’s jurisdiction, that the transaction in question appeared to fit under the objective concept of an investment in the sense of Art. 25(1).299 The test tribunals applied in contract-based cases to determine the objective meaning of the term ‘investment’ reflected the same test that tribunals also apply in treaty-based cases and which has come to be referred to as the Salini test (see paras. 235–241 infra).300 Where challenges in contract-based cases to the existence of an investment in the sense of Art. 25(1) were brought, the tribunals found that those were without merit. The Tribunal in CSOB v Slovakia found that a loan which the Respondent guaranteed constituted an investment in the sense of Art. 25(1) (see also paras. 138–139, 181 supra; para. 420 infra).301 In RSM v Grenada I, the Tribunal found that the party’s agreement was not merely a preparatory agreement, but already an investment in the sense of Art. 25(1) (see also para. 392 infra).302 In Elsamex v Honduras, the Tribunal found that not only the original construction, but also the rehabilitation and paving of a highway under a contract qualified as an investment.303 In Niko Resources v Bangladesh, the Tribunal applied the doctrine of the general unity of the investment and found that a contract for the sale of gas qualified as an investment because it was part of a larger operation that consisted in the development of gas fields in the host State; it was therefore immaterial whether the parties’ relations were organized in a

297 LETCO v Liberia, Decision on Jurisdiction (24 October 1984), reproduced in ibid, Award (31 March 1986) (1994) 2 ICSID Reports 349. 298 ibid 350. 299 See eg Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 101 (concerning the design, construction, operation, exploitation, conservation, and maintenance of a highway); SEMOS v Mali, Award (25 February 2003) (2006) 10 ICSID Reports 114, 116–117 (concerning the operation of a gold mine); Aguaytia v Peru, Award (11 December 2008) para 67 (concerning a power production project); RSM v Central African Republic, Award (11 July 2011) paras 46–70 (concerning a contract for the exploration and exploitation of oil); Standard Chartered Bank (Hong Kong) v TANESCO, Decision on Jurisdiction and Liability (12 February 2014) paras 109, 111 (concerning the purchase of a debt for financing the construction and operation of an electricity generating facility); Grenada Private Power v Grenada, Award (29 March 2020) para 110 (concerning the operation of utilities for the supply of electricity). 300 RSM v Grenada I, Award (13 March 2009) para 241; RSM v Central African Republic, Award (11 July 2011) para 50; Elsamex v Honduras, Award (16 November 2012) paras 256–260; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 352; Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 198–200. 301 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 62–91. 302 RSM v Grenada I, Award (13 March 2009) paras 213–266. 303 Elsamex v Honduras, Award (16 November 2012) paras 239–283.

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single legal instrument or in separate contracts.304 In Standard Chartered Bank (Hong Kong) v Tanzania, the Tribunal concluded that the purchase and assignment of a secured loan for financing the construction and operation of an electricity generating facility in the host State qualified as an investment in the sense of Art. 25(1).305 201

(ii) Definitions of Investment in National Legislation National laws offering consent to ICSID’s jurisdiction306 often also contain definitions or descriptions of investments to which they apply.307 As with investor–State contracts, these definitions therefore also circumscribe the subject-matter dimension of the host State’s consent under its legislation to the jurisdiction of the Centre. Some of these definitions are quite terse. The definition in Section 3 of the Tanzanian Investment Act of 1997 is typical of this: ‘investment’ means the creation or acquisition of new business assets and includes the expansion, restructuring or rehabilitation of an existing business enterprise.

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Other definitions are more elaborate and follow the pattern of modern BITs. Art. 1 of the Albanian Law on Foreign Investments of 1993 provides: ‘Foreign investment’ means every kind of investment in the territory of the Republic of Albania owned directly or indirectly by a foreign investor, consisting of: (a) moveable and immoveable, tangible and intangible property and any other property rights; (b) a company, shares in stock of a company and any form of participation in a company; (c) loans, claim to money or claim to performance having economic value; (d) intellectual property, including literary and artistic works, sound recordings, inventions, industrial designs, semiconductor mask works, know how, trademarks, service marks and trade names; and (e) any right conferred by law or contract, and any license or permit pursuant to law.308

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In Tradex v Albania, the Tribunal undertook a detailed interpretation of this provision.309 It held, inter alia, that the sources from which the investor financed the foreign investment in Albania were not relevant.310 It also held that even without ownership by the Claimant of the land in question its right to use the land could have been expropriated.311 Georgia’s Investment Law of 1996, which offers ICSID arbitration, contains the following definition of ‘investment’: 304 305 306 307

Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 355–372. Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 185–246, 251–252. For a collection of national investment legislation, see ICSID (n 36). Delaume, ‘Le Centre’ (n 163) 802–803; Antonio R Parra, ‘The Scope of New Investment Laws and International Investments’ in Robert Pritchard (ed), Economic Development, Foreign Investment and the Law (Kluwer 1996) 27; Rubins (n 255) 295–296. See also Shan (n 36); Antonio R Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 7 ICSID Rev 428; Jarrod Hepburn, ‘Domestic Investment Statutes in International Law’ (2018) 112 AJIL 658. 308 See Tradex v Albania, Award (29 April 1999) para 105. 309 ibid paras 88, 106, 126–128. 310 ibid paras 108–111. 311 ibid paras 126–131.

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Article 1: Investment (1) Investment is any kind of property or intellectual value or right to be contributed and used in the entrepreneurial activity carried out on the territory of Georgia for earning of possible income. (2) Such value or right may be: (a) funds, shares, stocks and other securities; (b) movable and immovable property – land, buildings, equipment and wealth; (c) land tenure or right to use other natural resources (concessions, as well), patent, license, ‘know-how’, experience and other intellectual value; (d) other legally recognized property and intellectual value or right.312

In Zhinvali v Georgia, the Claimant had conducted lengthy negotiations with the authorities of Georgia. These negotiations ultimately failed. Zhinvali claimed ‘development costs’ and damages. The Tribunal found that there had been no investment in the sense of the Investment Law.313 It said:

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the law of Georgia contemplates the core expenditures to be ‘realized’ as an ‘investment’ on the ‘territory’ of Georgia. To conclude that a given ‘legal person’ can qualify as an ‘investor’ for purposes of . . . the Georgia Investment Law, without having realized investments on the territory of Georgia, is, in the Tribunal’s opinion, not in keeping with the definition of that term.314

Some codes exclude investment from certain areas of economic activity, such as banking or insurance, or subject foreign investment to conditions and admission procedures. An example of a domestic investment legislation that contains a strictly circumscribed definition of covered investments, including a list of exceptions, is the 2002 Investment Code of the Democratic Republic of Congo, which was at the basis of the dispute in Lahoud v DR Congo.315 The Code applies to ‘direct investments,’ which are realized through a ‘new or existing enterprise,’ and which ‘(ii) aim to put in place new capacity or increase the capacity to produce goods or provision of services, to expand the range of products manufactured or services rendered, to increase the productivity of the company or to improve the quality of the goods or services.’316 The Code also contains a list of exceptions that limit its scope of application, excluding among others investments in mining and hydrocarbons, banking, insurance, production of arms and explosives, and commercial activities.317 The Claimants in Lahoud v DR Congo had invested in a local company called IMPOREX, which was claimed to be active in three economic sectors: electricity; import, assembling, sale, and service of heavy engines and vehicles; and the fabrication of wood products. The Tribunal, before addressing whether the Claimants’ activities qualified as an investment in the sense of Art. 25(1) of the Convention,318 examined in detail whether the activities of IMPOREX qualified as investments under the

312 313 315 316 318

Zhinvali v Georgia, Award (24 January 2003) para 377. ibid paras 1–4. 314 ibid para 381 (emphasis in the original). Lahoud v DR Congo, Award (7 February 2014) paras 221–310. ibid para 227. 317 ibid para 228. ibid paras 311–326.

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Respondent’s Investment Code, concluding that certain activities in the electricity sector qualified as investments, while others fell under the exception for commercial activities;319 in respect of heavy engines and vehicles, the Tribunal found no proof of the activity in question;320 in respect of wood products, the Tribunal found certain activities to qualify as an investment, while the existence of other activities in that sector could not be proven.321 The Tribunal also addressed the Code’s exception for commercial activities, finding that the basic import and sale of electrical equipment and wood products fell under those exceptions and was not covered by the Investment Code.322 The interpretation of exceptions to the application of domestic investment laws was also at issue in AES v Kazakhstan, which involved a dispute arising out of the Claimants’ investment in a number of power facilities and trading companies that held rights in long-term concessions concluded with the Government, which were affected, inter alia, by measures concerning the regulation of competition in the electricity sector.323 The Respondent argued that the Claimants’ investment in the electricity sector was excluded from coverage under Kazakhstan’s Foreign Investment Law (FIL), either under an exception for ‘defence potential, national security, ecological safety and public health and morals’ (Art. 6(3) of the FIL), or an exception for ‘questions of taxation and other measures of State regulation’ (Art. 6(4) of the FIL).324 The Tribunal rejected this objection. After pointing out that the electricity sector was ‘not explicitly named in Article 6(3), which lists specific excluded fields,’325 it further explained: 205. Given the importance of a law such as the 1994 FIL, one should not simply assume that a list as the one mentioned in Article 6(3) is for illustrative purposes only. On the contrary, given the importance of the 1994 FIL, the need for legal security and predictability and the specific wording of Article 6(3), one should rather presume that the list of excluded fields is exhaustive. . . . 206. Second, given the exhaustive nature of the list, the only possibility left for the electricity sector to be excluded from the scope of application of the 1994 FIL is if it can be subsumed under any of the listed categories. . . . While the Tribunal concedes that certain aspects of the electricity sector, such as ensuring supply of energy, may under certain circumstances give rise to issues of ‘national security’, this is hardly the case for issues relating to the management of competition in the electricity market. . . . The same reasoning applies with regard to the concept of ‘public health and morals’. The electricity market is of a commercial nature, and while being an important component of a country’s economy, it is not of a nature to constitute per se and in its entirety a matter of ‘ordre public’, even supposing that the phrase ‘public health and morals’ can be given that wide meaning. As concerns the concept of ‘taxation and other State regulation’, there is no indication that these terms would have been meant to include competition regulations in the field of electricity supply.326

319 321 323 324 326

ibid paras 239–248. 320 ibid paras 249–256. ibid paras 257–276. 322 ibid paras 279–308. For the facts of the case, see AES v Kazakhstan, Award (1 November 2013) paras 18–66. ibid para 202. 325 ibid para 204. ibid paras 205–206.

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As with investor–State contracts, national legislation cannot extend the subjectmatter of the Centre’s jurisdiction beyond what are its outer limits under the notion of investment contained in Art. 25(1).327 This point was stressed in ABCI Investments v Tunisia, where the Tribunal pointed out:

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65. The Tribunal must also take into account the fact that, while the parties generally have great freedom to adopt a definition of the concept of investment, this definition is limited by the requirement not to contradict the meaning and scope of the Washington Convention concerning that concept. . . . 66. However, in this case, the definition of investment in Tunisian legislation and in the BIT indicates that a broad conception has been favored. Indeed, Article 2 of [the] Law . . . extends the application of the guarantees and advantages provided for to ‘investments made in Tunisia by natural or legal persons, whatever their nationality’ and having obtained the approval of the Government, without restricting their scope. Likewise, Article 1 of the BIT, regardless of its application in this case, provides for a very broad definition of the concept of investment, as is customary in this type of agreement. None of the definitions mentioned can be considered to be in conflict with the Washington Convention.328

Overall, it is clear that the diverse definitions of investment and the various restrictions contained in national legislation do not necessarily reflect the term as used in Art. 25(1) of the Convention. But they form part of the conditions of consent and must be respected in order for the Centre to have jurisdiction in a particular case. As the Tribunal in Lighthouse Corp v Timor-Leste stated in a case based on Timor-Leste’s Foreign Investment Law (FIL), which required foreign investors to have their investments approved and authorized and receive a foreign investor’s certificate:

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the Tribunal considers that the FIL sets out a specific framework of administrative control on inbound foreign investments. The benefits granted through the FIL, particularly consent to ICSID arbitration, are available only to those investors complying with the law’s requirements. That does not include the Claimants.329

(iii) Definitions of Investment in Treaties Whereas most ICSID proceedings in the first three decades of the Centre’s existence were based on investor–State contracts, the vast majority of cases since have been brought

327 See also Lahoud v DR Congo, Award (7 February 2014) paras 221–326 (separately analyzing compliance with the notions of ‘investment’ under the domestic law and under Art. 25(1) of the Convention); Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) para 214 (noting that the definition of investment in the Investment Code of Guinea corresponded to the definition of investment in Art. 25(1)). 328 ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) paras 65, 66 (translation by the author). 329 Lighthouse Corp v Timor-Leste, Award (22 December 2017) para 333. For the requirements of the law in a nutshell, see ibid para 323. For further examples, confirming the importance of compliance with the national legislation, see Getma and others v Guinea, Decision on Jurisdiction (29 December 2012) paras 97–125 (addressing the scope of jurisdiction in light of a provision in Guinea’s Investment Code that gives preference to the parties’ agreement on an alternative forum); Rumeli v Kazakhstan, Award (29 July 2008) paras 333, 336 (finding that jurisdiction under Kazakhstan’s Foreign Investment Law existed because the investment in question qualified for protection under the legislation, but noting that this jurisdiction was consumed by the Kazakhstan–Turkey BIT, which the Claimants had invoked as a principal basis of jurisdiction).

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to ICSID under the provisions of investment treaties containing consent to the Centre’s jurisdiction. This mostly involved cases based on a BIT or under the Energy Charter Treaty (ECT). In most of those treaties, the clauses providing for ICSID’s jurisdiction are drafted in general terms, covering in particular future investment disputes. The parties’ consent is normally completed by the investor’s acceptance of the host State’s offer of arbitration in the treaty (see paras. 850–862 infra). Unlike in the contract-based context (see paras. 192–196 supra), no inferences can be drawn as to the existence of an investment in the sense of Art. 25(1) in a particular case from the mere existence of the parties’ consent. An ICSID conciliation commission or arbitral tribunal will have to carefully examine whether the transaction out of which the dispute arises meets the criteria of an investment under the Convention and under the investment treaty in question.330 Almost all investment treaties contain definitions of the term ‘investment.’ In most BITs that were concluded between the early 1960s and the early 2010s, these definitions have similar features, not least because they have been based on model BITs developed by capital-exporting countries – first in Western Europe, since the 1980s also by the United States – who coordinated their investment policies within the Organisation for Economic Co-operation and Development (OECD).331 The definitions in those treaties are usually introduced by a broad, general description, followed by a non-exhaustive list of rights that qualify as investments. The general description frequently refers to ‘every kind of asset.’ The list of typical rights usually includes, but is not limited to, traditional property rights; participation in companies; claims and rights to performance of contracts; intellectual and industrial property rights; and concession or similar rights. Less frequently, BITs do not base their definition of investment on an open, but on a closed list of assets.332 Many BITs also include returns on investment in their definition of investment, stipulate that changes in the form of the investment are immaterial, and cover investments owned or controlled directly or indirectly, made both before and after the entry into force of the treaty in question. Art. 1 of the 2008 UK’s Model Agreement is a typical example of a broad, assetbased definition with an open list. It provides:

330 Statements in decisions by ICSID tribunals that deference should be given to the parties in their qualification of disputes as arising out of investments must therefore be seen with caution, as they border denying the objective meaning of the term ‘investment’ in Art. 25(1). For examples of such decisions, see SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 133; F-W Oil v Trinidad and Tobago, Award (3 March 2006) para 104; BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) paras 76, 78; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 129–130; Alpha Projektholding v Ukraine, Award (8 November 2010) para 314; Gavrilović v Croatia, Award (26 July 2018) paras 192–193. 331 See Stephan W Schill, The Multilateralization of International Investment Law (CUP 2009) 88–92. For a more detailed overview of the definitions of the term ‘investment’ in BITs, see Rudolf Dolzer and Margrete Stevens, Bilateral Investment Treaties (Martinus Nijhoff 1995) 25–31; UNCTAD, Scope and Definition (United Nations 2011) 21–48. For analysis of model BITs, see the contributions in Chester Brown (ed), Commentaries on Selected Model Investment Treaties (OUP 2013). A collection of model BITs is also provided by UNCTAD at accessed 10 January 2021. 332 See eg Canada Model Foreign Investment Protection and Promotion Agreement (2004) Art. 1. For the text of the model and further discussion, see Andrew Newcombe and Celine Lévesque, ‘Canada’ in Brown (n 331) 53. See also SADC Model Bilateral Investment Treaty Template (July 2012) Art. 2 ‘investment – ASSET-BASED OPTION 1’ accessed 10 January 2021.

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For the purposes of this Agreement: (a) ‘investment’ means every kind of asset, owned or controlled directly or indirectly, and in particular, though not exclusively, includes: (i) movable and immovable property and any other property rights such as mortgages, liens or pledges; (ii) shares in and stock and debentures of a company and any other form of participation in a company; (iii) claims to money or to any performance under contract having a financial value; (iv) intellectual property rights, goodwill, technical processes and know-how; (v) business concessions conferred by law or under contract, including concessions to search for, cultivate, extract or exploit natural resources. A change in the form in which assets are invested does not affect their character as investments and the term ‘investment’ includes all investments, whether made before or after the date of entry into force of this Agreement.333

A number of BITs combine an asset-based approach with the provision that investment must have been made ‘in accordance with host State law’ (see further paras. 452–464 infra). Art. 1 of the 2003 Italian Model BIT is typical in this respect. It provides: For the purposes of this Agreement: 1. The term ‘investment’ shall mean any kind of asset invested, before or after the entry into force of this Agreement, by a natural or legal person of a Contracting Party in the territory of the other Contracting Party, in conformity with the laws and regulations of that Party, irrespective of the legal form chosen, as well as of the legal framework. Without limiting the generality of the foregoing, the term ‘investment’ shall include in particular, but not exclusively: a) movable and immovable property and any ownership rights in rem, including real guarantee rights on a property of a third party, to the extent that it can be invested; b) shares, debentures, equity holdings and any other instruments of credit, as well as Government and public securities in general; c) credits for sums of money connected with an investment as well as reinvested incomes and capital gains or any service right having an economic value as integral part of an investment; d) copyright, commercial trademarks, patents, industrial designs and other intellectual and industrial property rights, know-how, trade secrets, trade names and goodwill; e) any economic right accruing by law or by contract and any licence and franchise granted in accordance with the provisions in force on economic activities, including the right to prospect for, extract and exploit natural resources; f ) any increase in value of the original investment.

333 UK Model IPPA (2008) Art. 1(a). The Model BITs of Germany of 2009, of Korea of 2001, of the Netherlands of 2004, and most BITs concluded by Switzerland and Japan contain similar definitions, which are based on a broad asset-based approach with an open list of examples. For the text of the models and further discussion, see the respective chapters in Brown (n 331).

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schreuer’s commentary on the icsid convention Any alteration of the legal form chosen for the investments shall not affect their classification as investments.334

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The first generation of multilateral treaties that provide for dispute settlement before the Centre contain definitions of ‘investment’ that are closely modeled on the definitions of traditional BITs. This holds true, for example, for Art. 1(6) of the ECT, which contains an asset-based, open-list definition of investment, coupled with the limitation that ‘“Investment” refers to any investment associated with an Economic Activity in the Energy Sector and to investments or classes of investments designated by a Contracting Party in its Area as “Charter efficiency projects” and so notified to the Secretariat.’335 Art. 1139 of the NAFTA (see paras. 864–867 infra) contains an elaborate, but narrower definition of ‘investment’ as compared to traditional BITs.336 It covers an enterprise, equity or debt securities of an enterprise, interests that entitle an owner to a share in the income or profits of an enterprise, tangible and intangible assets acquired for business purposes, interests arising from the commitment of capital and other resources such as under turnkey or construction contracts, and contracts where remuneration depends substantially on the production, revenues or profits of an enterprise. The definition specifically excludes claims to money that arise solely from commercial contracts for the sale of goods or services or short-term credit in connection with a commercial transaction, such as trade financing. In reaction to the mounting number of investment treaty arbitrations in the past two decades, and concerns of States about the overly broad coverage of the treaties of certain assets or activities as ‘investments,’ a number of investment treaties have nuanced and narrowed their definitions of ‘investment.’ One such example is the qualification that assets covered as investments must exhibit ‘characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk,’ thus drawing on elements of the definition of the notion of ‘investment’ under Art. 25(1) of the Convention (see paras. 226–269 supra). The definition in the United States Model BIT of 2012 is a good example of this. It provides: ‘investment’ means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include: (a) an enterprise; (b) shares, stock, and other forms of equity participation in an enterprise; (c) bonds, debentures, other debt instruments, and loans; (d) futures, options, and other derivatives; (e) turnkey, construction, management, production, concession, revenue-sharing, and other similar contracts;

334 Italy Model Investment Promotion and Protection Agreement (2003) Art. 1(1). The Model BITs of China of 2003 (Model III), of Colombia of 2009, of France of 2006, and BITs concluded by Singapore contain similar definitions, including in-accordance-with-host-State-law clauses. For the text of these models and further discussion, see the respective chapters in Brown (n 331). 335 See ECT (n 33) Art. 1(6). See also Art. 1(1) of the Protocol of Colonia for the Reciprocal Promotion and Protection of Investments in MERCOSUR (signed 17 January 1994), which never entered into force, also contained a definition of investment closely modeled on the definitions in traditional BITs. 336 See NAFTA (n 33) Art. 1139. For the USMCA, see n 338 infra.

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(f ) intellectual property rights; (g) licenses, authorizations, permits, and similar rights conferred pursuant to domestic law; and (h) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens, and pledges.337

A number of other (model) investment treaties, including multilateral agreements that provide for the promotion and protection of foreign investments, also adopt this approach.338 What is more, in several cases, arbitral tribunals even consider that definitions of investments in BITs must be read as incorporating elements of the notion of investment in the sense of Art. 25(1) of the Convention as it has developed under the so-called Salini test (see paras. 235–269 infra), even when the governing BIT does not contain explicit wording to this effect.339 Another approach that restricts the scope of coverage of investment treaties, but has found little resonance so far in actual treaty practice, concerns enterprise-based definitions of investment. One of the options contained in the 2012 Model Bilateral Investment Treaty Template of the Southern African Development Community provides for such a definition: Investment means an enterprise within the territory of one State Party established, acquired or expanded by an investor of the other State Party, including through the constitution, maintenance or acquisition of a juridical person or the acquisition of

337 US Model BIT (2012) Art. 1 (footnotes omitted). 338 See eg Association of South-East Asian Nations Comprehensive Investment Agreement (signed 26 February 2009, entered into force 29 March 2012) Art. 4(c); SADC Model Bilateral Investment Treaty Template (n 332) Art. 2 ‘investment – ASSET-BASED OPTION 2’; European Union–Canada Comprehensive Economic and Trade Agreement (CETA) (signed 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23, Art. 8.1; Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into force 30 December 2018) Art. 9.1; Netherlands Model Investment Agreement (2019) Art. 1 accessed 10 January 2021; United States–Mexico–Canada Agreement (USMCA) (signed 10 December 2019, entered into force 1 July 2020) Art. 14.1. 339 See eg Italy v Cuba (ad hoc), Sentence préliminaire (15 March 2005) paras 81–83; Société Générale v Dominican Republic (UNCITRAL), Award on Jurisdiction (19 September 2008) paras 33–38; Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) paras 173–208; Alps Finance v Slovakia (UNCITRAL), Award (5 March 2011) paras 230–246; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 371; Caratube v Kazakhstan, Award (5 June 2012) para 360; Nova Scotia Power v Venezuela (AF), Award (30 April 2014) paras 77–84; Isolux v Spain (SCC), Award (12 July 2016) paras 683–686; Masdar v Spain, Award (16 May 2018) paras 196–200; AMF Aircraftleasing v Czech Republic (UNCITRAL), Award (11 May 2020) paras 470–472; Muszynianka v Slovakia (UNCITRAL), Award (7 October 2020) paras 288–289; Cairn Energy v India (UNCITRAL), Award (21 December 2020) para 706. See also Pren Nreka v Czech Republic (UNCITRAL), Partial Award (5 February 2007) (as reported by Emmanuelle Cabrol, ‘Pren Nreka v Czech Republic and the Notion of Investment under Bilateral Investment Treaties: Does “Investment” Really Mean “Every Kind of Asset”?’ in Karl P Sauvant (ed), Yearbook on International Investment Law & Policy 2009–2010 (OUP 2010) 217, 219); Oostergetel v Slovakia (UNCITRAL), Decision on Jurisdiction (30 April 2010) paras 159–171; von Pezold and others v Zimbabwe, Award (28 July 2015) para 284; Manchester Securities v Poland (UNCITRAL), Award (7 December 2018) paras 360–384. For rejections of this approach, see White Industries v India (UNCITRAL), Final Award (30 November 2011) para 7.4.9; Energoalians v Moldova (UNCITRAL), Award (23 October 2013) paras 240–241; Guaracachi v Bolivia (UNCTRAL), Award (31 January 2014) para 364; Flemingo Duty Free v Poland (UNCITRAL), Award (12 August 2016) para 298; Anglia Auto v Czech Republic (SCC), Final Award (10 March 2017) para 150; South American Silver v Bolivia (UNCITRAL), Award (22 November 2018) paras 339–340; Clorox v Venezuela (UNCITRAL), Award (20 May 2019) para 819. See also WA Investments v Czech Republic (UNCITRAL), Award (15 May 2019) para 272.

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schreuer’s commentary on the icsid convention shares, debentures or other ownership instruments of such an enterprise, provided that the enterprise is established or acquired in accordance with the laws of the Host State[;] and [registered] [approved] [recognized] in accordance with the legal requirements of the Host State]. An enterprise may possess assets such as: 1. Shares, stocks, debentures and other equity instruments of the enterprise or another enterprise 2. A debt security of another enterprise 3. Loans to an enterprise 4. Movable or immovable property and other property rights such as mortgages, liens or pledges 5. Claims to money or to any performance under contract having a financial value 6. Copyrights, know-how, goodwill and industrial property rights such as patents, trademarks, industrial designs and trade names, to the extent they are recognized under the law of the Host State 7. Rights conferred by law or under contract, including licences to cultivate, extract or exploit natural resources For greater certainty, Investment does not include: 1. Debt securities issued by a government or loans to a government 2. Portfolio investments 3. Claims to money that arise solely from commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of another Party, or the extension of credit in connection with a commercial transaction, or any other claims to money that do not involve the kind of interests set out in subparagraphs (a) through (g) above.340

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Actual investment treaty practice is far too extensive to permit a fuller analysis in the framework of this Commentary.341 By and large, however, definitions of ‘investment’ in investment treaties are along the lines described above. The broad similarity of definitions in investment treaties does not mean, however, that they reflect a general definition for the Convention’s concept of investment. Rather, these definitions are part of the specific conditions of consent governing the relation between the disputing parties to individual disputes. Generalizations drawn from these definitions should be treated with caution especially where jurisdiction is not based on an investment treaty. In a case not based on an investment treaty, jurisdiction should not be denied just because the dispute arises from an operation that does not fit the typical definition of investments adopted under investment treaties. Conversely, if an investment treaty’s definition of ‘investment’ goes beyond the notion of ‘investment’ in the sense of Art. 25(1), the Centre will not have jurisdiction for a resulting dispute even if it falls under the disputing parties’ consent. ICSID tribunals have examined whether the activities underlying the claims before them were covered by the definitions of ‘investment’ in the applicable treaties. In most cases they found that the disputes before them did indeed concern investments as 340 SADC Model Bilateral Investment Treaty Template (n 332) Art. 2 ‘investment – ENTERPRISEBASED DEFINITION.’ For another example of an enterprise-based definition, see the Indian Model BIT (December 2015) Art. 1(4) accessed 10 January 2021. 341 For a broad survey of BITs and their definitions of ‘investment,’ see UNCTAD’s searchable database ‘International Investment Agreements Navigator’ at accessed 10 January 2021.

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defined in the respective BITs; in other cases, the tribunals found that the claimants’ activities fell outside the definitions contained in BITs. In interpreting and applying treaty clauses concerning the definition of investment, arbitral jurisprudence has not only addressed a number of special issues concerning the subject-matter coverage of access to the Centre; this practice also allows conclusions about how much freedom it leaves to the disputing parties to submit disputes to the Centre and where the limits of this freedom lie.

3. Criteria for the Existence of an Investment in the Sense of Art. 25(1) In addition to qualifying as an investment under the parties’ instrument of consent, the transactions or activity must also qualify as an investment in the sense of Art. 25(1) of the Convention. The criteria for that have first been laid down in doctrine (see paras. 227–234 infra) and subsequently developed further by arbitral tribunals into what is by now widely referred to as the ‘Salini test’ (see paras. 235–241 infra). This test requires a contribution by the investor, a certain duration, the assumption of risk, and – albeit controversially – a contribution to host State development (see paras. 242–269 infra). While these criteria are useful to circumscribe certain typical characteristics of economic activities and transactions that fall under the concept of investment in the sense of Art. 25(1), they should not be elevated to jurisdictional requirements, but rather be handled flexibly (see paras. 270–280 infra).

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a) Doctrinal Approaches During the drafting of the Convention, there were repeated attempts to define the concept of investment in general terms.342 However, all attempts to reach agreement on a definition to be inserted into the Convention failed (see paras. 163–176 supra). This notwithstanding, certain criteria have crystallized as relevant factors from the Convention’s drafting. These included the idea that the foreign national must have made a contribution, that some minimum duration was required, and that the purpose of the Convention was to decrease the political risk connected to foreign investment by offering a means to settle disputes and enforce promises made by States to foreign investors (see paras. 165, 167, 168, 171, 172 supra). Textually, the only possible indication of an objective meaning of the term ‘investment’ that can be gleaned from the Convention itself is contained in the Preamble’s first sentence, which speaks of ‘the need for international co-operation for economic development and the role of private international investment therein.’ This declared purpose of the Convention is confirmed by the Report of the Executive Directors, which points out that the Convention was ‘prompted by the desire to strengthen the partnership between countries in the cause of economic development.’343 Therefore, it is arguable that the Convention’s object and purpose indicate that there should be some positive impact on development; but it does not necessarily follow that an activity that does not contribute to the host State’s development cannot be an investment in the sense of Art. 25 and is hence outside the Centre’s jurisdiction (see also paras. 258–269, 279–280 infra). Given the lack of a definition of investment in the Convention, the concretization of the term was essentially left to doctrine and ICSID practice. Scholars have 342 For a survey of definitions, see Amerasinghe (n 96) 177–181. 343 (1993) 1 ICSID Reports 23, 25, para 9.

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proposed different approaches on how to determine the existence of an investment in Art. 25(1).344 One influential approach is reflected in Carreau, Flory, and Juillard, for whom three criteria were key: First, there can be no investment without a contribution – whatever the form of that contribution. Second, there can be no investment within a short period of time: an investment transaction is characterized by a ‘durability’ that can only be satisfied by a mid to long term contribution. Third, there can be no investment without risk, which means that the deferred compensation of the investor must be dependent upon the loss and profit of the venture. These three criteria must be applied cumulatively.345

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An alternative approach was suggested by Delaume who considered that a definition based on contribution, duration, and risk was too narrow to capture all relevant phenomena; instead a test for the existence of an investment should be based on the contribution to the host State’s development only. He stated: [The] traditional concept, which is inspired by a narrow economic and legal conception, is today substituted by another concept, which is essentially economic in nature and legally flexible in its formulation, that is not based on contribution in the form of ownership but, to the contrary, on the expected, if not always actual, contribution of the investment to the economic development of the country in question.346

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A combination of both approaches was suggested by Schreuer in identifying characteristics that were typical of investments in the sense of Art. 25(1). In his view: It would not be realistic to attempt yet another definition of ‘investment’ on the basis of ICSID’s experience. But it seems possible to identify certain features that are typical to most of the operations in question. The first such feature is that the projects have a certain duration. Even though some break down at an early stage, the expectation of a longer term relationship is clearly there. The second feature is a certain regularity of profit and return. A one-time lump sum agreement, while not impossible, would be untypical. Even where no profits are ever made, the expectation of return is present. The third feature is the assumption of risk usually by both sides. Risk is in part a function of duration and expectation of profit. The fourth typical feature is that the commitment is substantial. This aspect was very much on the drafters’ minds although it did not find entry into the Convention. A contract with an individual consultant would be untypical. The fifth feature is the operation’s significance for the host State’s development. This is not necessarily characteristic of investments in general. But the wording of the Preamble and the Executive Directors’ Report suggest that development is part of the Convention’s object and purpose. These features should not necessarily be understood as jurisdictional requirements but merely as typical characteristics of investments under the Convention.347

344 For the following, see Gaillard (n 255) 404–406. 345 Dominique Carreau, Thiébaut Flory and Patrick Juillard, Droit international économique (3rd edn, LGDJ 1990) para 940 (translation by Gaillard (n 255) 405). The same position is taken by Gaillard (n 276). 346 Delaume, ‘Le Centre’ (n 163) 801 (translation by Gaillard (n 255) 406). 347 Christoph Schreuer, ‘Commentary on the ICSID Convention’ (1996) 11 ICSID Rev 318, 372–373 (emphases in the original, internal references omitted). This paragraph was reproduced in substantively identical terms in Art. 25, para 122 of the First Edition of this Commentary and Art. 25, para 153 of the Second Edition of this Commentary.

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Despite their differences, the above approaches display certain similarities in their function. One function of the definition is to exclude all non-economic disputes between States and foreign nationals from the Centre’s jurisdiction. As explained by Mr. Broches during the drafting of the Convention, the limitation to investment disputes would exclude non-economic disputes that ‘had nothing to do with investments, such as the law dealing with the status of persons, marriage and divorce, adoption, nationality, the coming of age, etc.’ (History, Vol. II, p. 989).348 Several ICSID tribunals have illustrated this function of the definition with examples of transactions that, while having a financial value, would not qualify as investments, such as a dowry,349 the purpose of a personal residence as compared to rental properties,350 or claims by a foreign national to receive a pension from a State.351 The second function of these definitions is to exclude certain types of economic disputes from the jurisdiction of the Centre where the underlying activity is too transitory or does not involve the type of risk against which the ICSID Convention intends to protect. As the Tribunal in Casinos Austria v Argentina explained, the purpose of criteria to determine the existence of an investment in the sense of Art. 25(1) is to

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help to circumscribe the type of economic activity or asset protected as an ‘investment’ and delineate it from non-protected activities or assets in relation to the risk certain forms of economic involvement abroad entail. The specific risk in question arises out of the fact that certain long-term forms of economic involvement in a host State (which are termed ‘foreign investment’) require foreign nationals to place their economic activities and assets upfront under the sovereign authority of the host State in order to recoup economic returns over time. It is the investment-specific risk stemming from the nonsynallagmatic nature of investor–State relations that the ICSID Convention aims, if not to minimize, at least to make more manageable by providing a mechanism for settling disputes between investors and host States.352

Whereas the function of the notion of investment to exclude non-economic disputes has not been cast into doubt, the extent to which purely commercial disputes between States and foreign nationals are excluded from the jurisdiction of the Centre under a ‘commercial transaction test’ in spite of the disputing parties’ consent to this effect has given rise to some controversy.353 The justificability and precise contours of such a ‘commercial transaction test’ notwithstanding, subsequent practice of both the Secretary-General and ICSID tribunals has been consistent in rejecting that disputes arising out of simple sales of goods and comparable transactions can come before the Centre (see paras. 292–297 infra). Similarly, the terms of Art. 4(3) of the Additional

348 Note, however, that this statement did not directly relate to Art. 25, but was made in the context of Mr. Broches explaining why ordre public was not included as an exception to recognize and enforce ICSID awards. 349 Phoenix Action v Czech Republic, Award (15 April 2009) para 82. 350 Pantechniki v Albania, Award (30 July 2009) para 47. Cf also Sedelmayer v Russia (SCC), Award (7 July 1998) s V.3.4.3 (excluding personal belongings as investments). 351 OIEG v Venezuela, Award (10 March 2015) para 218. 352 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 188. Similarly, AMF Aircraftleasing v Czech Republic (UNCITRAL), Award (11 May 2020) para 475. 353 See Mortenson (n 256) 280–301; Sattorova (n 255) 279–281; Pahis (n 255).

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Facility Rules confirm that the Centre’s facility should not be used for ‘ordinary commercial transactions’ (see para. 40 supra; paras. 486–488 infra).354

b) Concretization in Arbitral Jurisprudence: The Salini Test 235

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Against the background of these doctrinal approaches to the notion of investment in Art. 25(1), ICSID tribunals have, over time, developed a set of criteria that they have found typical of investments. The Tribunal in Fedax v Venezuela was the first ICSID tribunal to draw on the five criteria mentioned above (see para. 231 supra) to determine the existence of an investment.355 The decision that has become most influential in shaping the test for the existence of an investment in the sense of Art. 25(1), however, was handed down in Salini v Morocco.356 In that case, the Respondent contended that the contract for the construction of a road did not constitute an investment in the sense of the Convention.357 The Tribunal noted that the existence of an investment under the Convention was an objective condition of jurisdiction in addition to consent. It said: The doctrine generally considers that investment infers: contributions, a certain duration of performance of the contract and a participation in the risks of the transaction. In reading the Convention’s preamble, one may add the contribution to the economic development of the host State of the investment as an additional condition.358

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The Tribunal then proceeded to examine the existence of contributions by the investors, the risks incurred by them, and the contribution to Morocco’s development. On that basis it concluded that the contract constituted an investment.359 The use of these four criteria to determine whether the activities under dispute constitute an investment has since become known as the ‘Salini test.’ They encompass: s a (substantial) contribution; s a certain duration of the operation; s risk; and s contribution to the host State’s development. While the Salini test has not been universally accepted (for criticism, see paras. 270–274 infra), tribunals have applied these criteria – subject to variations and further refinement – in a large number of cases.360 Several tribunals even consider that these 354 See also Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 28 (noting the Additional Facility Rules as confirmation for excluding ‘ordinary commercial transactions’). 355 ibid para 43 (adopting the criteria from Schreuer (n 347) 372)). 356 Salini v Morocco, Decision on Jurisdiction (23 July 2001). For in-depth analysis of the decision and its impact, see Gaillard and Banifatemi (n 255). 357 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 39. 358 ibid para 52 (referring for the first three criteria to Gaillard (n 276) 292). 359 ibid paras 53–58. 360 See eg Joy Mining v Egypt, Award (6 August 2004) paras 53–63; LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, paras 13, 14; AES v Argentina, Decision on Jurisdiction (26 April 2005) para 88; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 130–138; Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Jurisdiction (19 December 2005) (2011) 26 ICSID Rev 173, 176–177, paras 27–28; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 91–96; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) paras 72, 73; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 77; Mitchell v DR Congo, Decision

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criteria reflect the inherent meaning of the term ‘investment,’ whether it is used in the context of Art. 25(1) or in other instruments (see para. 221 supra). As the Tribunal in Eyre and Montrose v Sri Lanka stated: The Tribunal does not find it necessary to resolve the dispute between the Parties as to whether the Salini criteria do or do not apply per se in evaluating whether an investor has made a protected investment. There are now many decisions that have considered that ‘investment’ has an inherent meaning and implies at least a contribution by the investor, a certain duration, and economic risk.361

By contrast, the element of regularity of profits and return has found little attention. It has been adopted by a few tribunals, mostly in earlier treaty-based ICSID cases,362 but has been abandoned since. Some tribunals have even rejected its relevance expressly363 or considered that (the expectation of ) a commercial return is part of the risk foreign investments entail.364 The Tribunal in Deutsche Bank v Sri Lanka, for example, reasoned:

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on Annulment (1 November 2006) paras 23–48; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 99–102, 109–111; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) paras 44, 48–148; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 116; OKO v Estonia, Award (19 November 2007) para 206; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 125–135; Pey Casado v Chile, Award (8 May 2008) paras 231–232; RSM v Grenada I, Award (13 March 2009) para 240; Phoenix Action v Czech Republic, Award (15 March 2009) paras 82–86; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 81–87; Chevron v Bangladesh, Award (17 May 2010) paras 123–126; Saba Fakes v Turkey, Award (14 July 2010) paras 95–114; Millicom v Senegal, Decision on Jurisdiction (16 July 2010) paras 80–81; Alpha Projektholding v Ukraine, Award (8 November 2010) paras 310–332; Nations Energy v Panama, Award (24 November 2010) paras 442–455; RSM v Central African Republic, Award (11 July 2011) paras 50–59; Malicorp v Egypt, Award (7 February 2011) paras 106–114; Meerapfel v Central African Republic, Award (12 May 2012) paras 175–186; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 218–227; Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 293–307; Elsamex v Honduras, Award (16 November 2012) paras 253–261; Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) paras 5.43–5.44; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 475–487; Convial Callao v Peru, Award (21 May 2013) paras 431–440; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 352; KT Asia v Kazakhstan, Award (17 October 2013) paras 161–173; Lahoud v DR Congo, Award (7 February 2014) paras 311–326; Flughafen Zürich v Venezuela, Award (18 November 2014) paras 244–258; OIEG v Venezuela, Award (10 March 2015) para 245; Mamidoil v Albania, Award (30 March 2015) paras 285–288; Orascom v Algeria, Award (31 May 2017) para 370; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 205–206; Capital Financial Holdings v Cameroon, Award (22 June 2017) paras 414–429; Karkey v Pakistan, Award (22 August 2017) paras 633, 636; Koch Minerals v Venezuela, Award (30 October 2017) para 6.67; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 187–193; Cortec Mining v Kenya, Award (22 October 2018) para 300; Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 198–246; CMC v Mozambique, Award (24 October 2019) paras 190–196; Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) paras 296–301. Eyre and Montrose v Sri Lanka, Award (5 March 2020) para 293. Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 43; Joy Mining v Egypt, Award (6 August 2004) para 53; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 77; OKO v Estonia, Award (19 November 2007) para 203. See also SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 133, fn 153 (citing Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 43). See also Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 108; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 486. See Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 219; Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 5.43; KT Asia v

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schreuer’s commentary on the icsid convention the Tribunal notes that most of the recent decisions have generally refused – rightly so – to take into consideration ‘regularity of profit and return’. Indeed, some investments can qualify as such although they were loss leaders. Others may indeed be contingent on extraneous events, such as the discovery of natural resources or, as here, the evolution of the oil price on the world market. The criterion should rather be qualified as an expectation that the investment will be profitable.365

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There is also broad agreement that no further criteria form part of a test for the existence of an investment in the sense of Art. 25(1). In particular, and contrary to what some tribunals have held, Art. 25(1) does not require that the investment is lawful or has been made in good faith (see further paras. 438–479 infra). There is also no requirement that the host State is aware of the existence of the investment.366

c) Elements of the Salini Test in Arbitral Practice 242

The available case law makes it possible to look at the four criteria of the Salini test in more detail. While the first three of them – (substantial) contribution, duration, and risk – are widely accepted, the fourth criterion – contribution to host State development – has proven to be controversial. (i) Substantial Contribution

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In respect of the requirement of a substantial contribution, arbitral tribunals have accepted a large variety of different types and forms of investments (for detailed discussion, see paras. 281–380 infra). Under the doctrine of the general unity of the investment, tribunals also generally look at the investment operation as a whole, not only individual assets and transactions (see paras. 133–151 supra). They have also addressed, and largely rejected, the relevance of the origin of funds (see paras. 402–414 infra) and the need for an active, rather than passive contribution (see paras. 362–368 infra). All that is required is that the contribution is made by the investor him- or herself or one of his or her predecessors (see paras. 369–380, 679–728 infra). The contribution must also go beyond mere pre-investment activities (see paras. 382–397 infra). Tribunals have pointed out that the contribution or commitment should not only be looked at in financial terms, but also in terms of know-how, management, equipment,

Kazakhstan, Award (17 October 2013) para 170; Orascom v Algeria, Award (31 May 2017) para 379. See also Seo v Korea (UNCITRAL), Final Award (27 September 2019) para 133; Mason v Korea (UNCITRAL), Decision on Preliminary Objections (22 December 2019) paras 220, 221. 365 Deutsche Bank v Sri Lanka, Award (31 October 2012) para 305. It would, however, not seem necessary that an investment in the sense of Art. 25(1) of the Convention is actually profitable or even designed to yield monetary profits. Although non-economic activity is not to be considered as constituting an investment (see para 232 supra), it would seem sufficient that the activity or asset in question yields some other long-term benefit, thus allowing also non-profit organizations or philanthropists to make investments in the sense of Art. 25(1). For further discussion, see Gregory W MacKenzie, ‘ICSID Arbitration as a Strategy for Levelling the Playing Field between International Non-Governmental Organizations and Host States’ (1993) 19 Syracuse J Int’l L & Comm 197, 223 ff; Nick Gallus and Luke E Peterson, ‘International Investment Treaty Protection of NGOs’ (2006) 22 Arb Int’l 527, 538. See also Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 84 (mentioning the possibility that the activity or transaction ‘serve the public interest’). 366 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 348–355.

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material, personnel, labor, and services.367 For example, the Tribunal in LESI– DIPENTA v Algeria described the contribution in the following terms: With respect to contributions: there can be no investment unless a portion of the contribution . . . brings with it economic value. This would presumably involve financial commitments, in the first place, but it would be too restrictive an interpretation not to admit other sacrifices. These contributions could, then, consist of loans, materials, works, or services, provided they have an economic value. In other words, the Contractor must have committed outlays, in some way, in order to pursue an economic objective.368

Tribunals often seem to assume that a substantial contribution would require a significant investment in terms of financial value.369 While this will often in fact be the case with the projects that lead to disputes before the Centre, the need for a substantial contribution should not be misunderstood to require a minimum amount of capital or exclude small investments. A substantial investment refers to a concrete, material contribution, rather than one that amounts to a certain value. At the most, ‘wholly insignificant activities and assets’ may be excluded under this criterion.370 By contrast, as confirmed by the drafting history, a minimum value for an investment cannot be required (see para. 170 supra).371 ICSID tribunals have also confirmed that small investments qualify as investments under Art. 25(1) of the Convention. As stated by the Tribunal in Saba Fakes v Turkey, small investments are covered by the ICSID Convention in the same way as large investments. An investment can be large or small, or it can be profitable or unprofitable, or it can contribute or not to the economic development of a country. All those propositions make sense and neither the size nor the profitability or the usefulness of investments are included in the ordinary meaning of the word.372 367 RFCC v Morocco, Decision on Jurisdiction (16 July 2001) para 61; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 131; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 109; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 86(a); Deutsche Bank v Sri Lanka, Award (31 October 2012) para 297; Flughafen Zürich v Venezuela, Award (18 November 2014) paras 248–249; OIEG v Venezuela, Award (10 March 2015) para 245; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) para 216; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 424. See also Mason v Korea (UNCITRAL), Decision on Preliminary Objections (22 December 2019) para 216. 368 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 14(i). In identical terms, LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 73(i). 369 See eg Joy Mining v Egypt, Award (6 August 2004) para 57; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 92; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 77; OIEG v Venezuela, Award (10 March 2015) paras 241, 247; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 424. See also, but (at least partly) under the heading of contribution to host State development, Malaysian Historical Salvors v Malaysia, Award (17 May 2007) paras 109, 143; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 483, 487. 370 See Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 188. Ownership of a single share may be such a situation; see Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 233; the contribution of EUR 1 another, see Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) para 126. 371 See also Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) para 219; Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) para 126. 372 Saba Fakes v Turkey, Award (14 July 2010) para 112, fn 73. This view is confirmed by a number of further decisions. See Mihaly v Sri Lanka, Award (15 March 2002) para 51; Pantechniki v Albania,

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The payment of a purely nominal purchase price does also not automatically exclude a contribution, but it may give rise to further inquiry as to whether the transaction is real and reflects the intention of the foreign national to develop economic activity (for further discussion, see para. 375 infra). If that is the case, an investment exists; if, by contrast, the nominal price means that the transaction is simulated, no investment exists. (ii) Duration The need for a certain duration of an activity or transaction is one of the main criteria to distinguish investments from short-term economic exchanges that are not subject to the jurisdiction of the Centre. This becomes clear both from the drafting history of the Convention (see paras. 166, 167, 171 supra), as well as from arbitral practice under the ICSID Convention. A ‘transitory’ activity in the host State,373 the short-term holding of assets,374 as well as ‘volatile capital,’375 do not qualify as investments in the sense of Art. 25(1). What the minimum duration is, however, has given rise to some debate. Several tribunals, including the Tribunal in Salini v Morocco, indicated that the minimum term should be between two and five years.376 By contrast, in cases involving government bonds, tribunals considered it sufficient that the underlying contracts extended beyond the fiscal year.377 Similarly, the Tribunal in Deutsche Bank v Sri Lanka pointed out that the minimum duration was ‘very flexible’ and ‘could be anything from a couple of months to many years.’378 In the case at hand, it found a Hedging Agreement with a term of twelve months to be sufficiently long, but also noted that the Agreement took two years to negotiate.379 In another case, an agreement whose term was five months was not considered as sufficient, but the underlying transaction also lacked other characteristics of an investment.380 In calculating duration, tribunals regularly point out that the element of duration referred not merely to the actual period of the core activity, but also to the time taken for

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Award (30 July 2009) para 45. See also Mitchell v DR Congo, Award (9 February 2004) para 56 and Decision on Annulment (1 November 2006) para 33; Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) para 126. Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 236–239. ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) para 62; KT Asia v Kazakhstan, Award (17 October 2013) paras 207–216; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 340–345; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 189. See also Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) para 141. Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 43. Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 54 (referring, inter alia, to Carreau, Flory and Juillard (n 345) 558–578, who did not however, as noted by Gaillard (n 255) 404–405, stipulate the indicated term as a minimum, but rather as a typical period). The same reasoning and references as in Salini are found in the parallel dispute by an identically composed tribunal in RFCC v Morocco, Decision on Jurisdiction (16 July 2001) para 62. For similar findings, see also Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 93–95; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) paras 110, 111. Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 43; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 484. Deutsche Bank v Sri Lanka, Award (31 October 2012) para 303 (quoting Christoph Schreuer in Panel Discussion, ‘Are the ICSID Rules Governing Nationality and Investment Working?’ in Weiler (n 255) 119, 125). ibid para 304. Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) paras 225–227.

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tender, work interruption, renegotiation, extension, maintenance, and a contractor’s guarantee.381 Tribunals have also noted that it is the intended rather than actual duration that is relevant.382 Early terminations or attempts at selling the investment therefore do not undercut any minimum period.383 The investor’s intentions were central to the dispute in KT Asia v Kazakhstan, in which the Tribunal found the transaction before it not to qualify as an investment.384 In the case, the Claimant was to hold shares in a locally incorporated company for a period of a few weeks before selling them on to other investors. Although this period became eventually extended to sixteen months, the Tribunal considered that the intended duration was the determinative factor. In the Tribunal’s view, ‘[a] planned short term project does not suddenly meet the duration element in the definition of investment because onward sale does not materialize within the intended time frame due to external forces unrelated to the project author’s intent or expectations.’385 Obiter, the Tribunal added doubts whether even the actual period of sixteen months during which the Claimant had held the shares would have been sufficiently long.386 The Tribunal in Kim and others v Uzbekistan took a slightly different position in a case where the Claimants’ intention to sell majority shares in two companies at some point in the future was already present when acquiring them.387 The Tribunal reasoned:

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342. . . . there is nothing in the BIT, nor in the ICSID Convention, to provide a foundation for Respondent’s argument that investments made with some measure of intent to dispose, or possibly to dispose, of them in the short, rather than long, term do not gain the protection of the BIT as ‘investments’. 343. The Tribunal agrees that there might be circumstances in which it would be appropriate for an ‘investment’ to lose the protection of a BIT on the grounds that it was ‘short term’. Those circumstances might include, for example, where investors in a stock exchange briefly hold shares in an undertaking, in the midst of buying and selling.388

In sum, Art. 25(1) of the Convention does not indicate a fixed minimum term for a transaction or activity to qualify as an investment. Much will instead depend on the factual circumstances of the case and the type of activity in question.389

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(iii) Risk The existence of risk is the third factor that tribunals have had recourse to in applying the Salini test to determine the existence of an investment in the sense of Art. 25(1). 381 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 14(ii); Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 132, 133; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 94, 95; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 73(ii); Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 101, 102; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 86(c); Deutsche Bank v Sri Lanka, Award (31 October 2012) para 304. 382 Deutsche Bank v Sri Lanka, Award (31 October 2012) para 303. See also ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) para 62. 383 Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 236–239. 384 KT Asia v Kazakhstan, Award (17 October 2013) paras 207–216. 385 ibid para 213. 386 ibid para 214. 387 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 340–341. 388 ibid paras 342–343. 389 Similarly, Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) para 225; Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) para 143.

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In most cases, tribunals have handled the existence of risk in a flexible manner. Some tribunals have seen the very existence of the dispute as an indication of risk.390 Other tribunals found that risk was inherent in any business activity, in particular if it was long-term and complex.391 Risk entailed uncertainty about the commercial success of an activity or transaction and involves the possibility of losses with the foreign national that is party to the dispute.392 Neither advance, guaranteed, or fixed payments to the investor under a contract,393 nor the performance of due diligence by the investor are able to exclude risk.394 The host State’s political and economic climate395 and the need to rely on national courts were also seen as risk factors.396 Many tribunals have thus taken a broad approach to the type of risk and included commercial, operational, and sovereign risk.397 The Tribunal in Salini v Morocco, for example, described the risk involved in the case before it as follows: With regard to the risks incurred by the Italian companies, these flow from the nature of the contract at issue. The Claimants . . . gave an exhaustive list of the risks taken in the performance of the said contract. Notably, among others, the risk associated with the prerogatives of the Owner permitting him to prematurely put an end to the contract, to impose variations within certain limits without changing the manner of fixing prices; the risk consisting of the potential increase in the cost of labour in case of modification of Moroccan law; any accident or damage caused to property during the performance of the works; those risks relating to problems of co-ordination possibly arising from the simultaneous performance of other projects; any unforeseeable incident that could not be considered as force majeure and which, therefore, would not give rise to a right to

390 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 40; Deutsche Bank v Sri Lanka, Award (31 October 2012) para 301. 391 RFCC v Morocco, Decision on Jurisdiction (16 July 2001) paras 63, 64; Salini v Morocco, Decision on Jurisdiction (23 July 2001) paras 55, 56; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 134–136; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 91; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 77; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 109; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 78, 84; Chevron v Bangladesh, Award (17 May 2010) para 125, lit c); ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) para 62; Lahoud v DR Congo, Award (7 February 2014) para 322; Krederi v Ukraine, Award (2 July 2018) para 238; Cortec Mining v Kenya, Award (22 October 2018) para 300. See also RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 158. 392 Cf KT Asia v Kazakhstan, Award (17 October 2013) paras 218–220; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 217, 221; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 425, 429. 393 Saipem v Bangladesh, Decision on Jurisdiction on Provisional Measures (21 March 2007) para 109; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 78, 79; Alpha Projektholding v Ukraine, Award (8 November 2010) paras 322–323. 394 von Pezold and others v Zimbabwe, Award (28 July 2015) para 285. 395 Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 117; Pey Casado v Chile, Award (8 May 2008) para 233(c); Alpha Projektholding v Ukraine, Award (8 November 2010) para 320; Deutsche Bank v Sri Lanka, Award (31 October 2012) para 301; Meerapfel v Central African Republic, Award (12 May 2011) para 204; Lahoud v DR Congo, Award (7 February 2014) para 323. 396 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 14(iii); LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 73(iii). 397 Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 234 (‘market, financial and political risks’); GEA Group v Ukraine, Award (31 March 2011) para 152 (‘market risk, credit risk and political risk’); Eyre and Montrose v Sri Lanka, Award (5 March 2020) para 293 (‘anticipated or unanticipated changes to market conditions, economic factors and/or political influences affecting the commercial transaction in the area of the investment’).

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compensation; and finally those risks related to the absence of any compensation in case of increase or decrease in volume of the work load not exceeding 20% of the total contract price.398

Some tribunals, however, have rejected a broad approach to the element of risk and distinguished between risks that qualified the underlying activity or transaction as an investment in the sense of Art. 25(1) and risks that pointed towards purely commercial activity that would not qualify as an investment.399 Drawing on the distinction made in Romak v Uzbekistan between ‘pure commercial, counterparty risk, or . . . the risk of doing business generally,’ on the one hand, and ‘“investment risk” [which] entails a . . . situation in which the investor cannot be sure of a return on his investment,’400 a majority in Poštová banka v Greece stated as follows:

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367. Under an ‘objective’ test, the element of risk is essential and cannot be analysed in isolation. Indeed any economic transaction – it could even be said any human activity – entails some element of risk. Risk is inherent in life and cannot per se qualify what is an investment.

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369. under an ‘objective’ approach, an investment risk would be an operational risk and not a commercial risk or a sovereign risk. A commercial risk covers, inter alia, the risk that one of the parties might default on its obligation, which risk exists in any economic relationship. A sovereign risk includes the risk of interference of the Government in a contract or any other relationship, which risk is not specific to public bonds [i.e. the purported investment].401

Such a limitation of the risk necessary for the existence of an investment in the sense of Art. 25(1) to operational risk seems little convincing. It would run counter to the object and purpose for which the Centre was established, namely to provide for a dispute settlement mechanism that could address, among others, political risk in the form of disputes arising out of a sovereign’s interference with investments. Instead, the risk an activity or transaction must face, in order to qualify as an investment, is any risk resulting from the non-synallagmatic nature of the activity, that is, where the foreign national places assets under the host State sovereign authority and only recoups its (expected) return over time (see para. 233 supra). (iv) Contribution to Host State Development Contribution to the host State’s development has turned out to be the most controversial indicator of an investment.402 In CSOB v Slovakia, the Tribunal pointed to the Convention’s Preamble and its reference to economic development. It concluded that this permitted an inference that an international transaction that is designed to promote a 398 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 55. 399 In this sense, see already Joy Mining v Egypt, Award (6 August 2004) para 57; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 112; Nova Scotia Power v Venezuela (AF), Award (30 April 2014) paras 105–112 (all alluding to normal commercial risk as an indicator weighing against the existence of an investment). 400 Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) paras 229–230; similarly Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) paras 145–148. 401 Poštová banka v Greece, Award (9 April 2015) paras 367, 369. 402 For further discussion, see Castro de Figueiredo (n 255).

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State’s economic development may be deemed to be an investment in the sense of the Convention.403 In Salini v Morocco, the Tribunal confirmed the fulfillment of this criterion by pointing to the public interest in the project. It stated: Lastly, the contribution of the contract to the economic development of the Moroccan State cannot seriously be questioned. In most countries, the construction of infrastructure falls under the tasks to be carried out by the State or by other public authorities. It cannot be seriously contested that the highway in question shall serve the public interest. Finally, the Italian companies were also able to provide the host State of the investment with know-how in relation to the work to be accomplished.404

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As in Salini, in many cases ICSID tribunals examined and confirmed the project’s contribution to the host State’s development.405 Even tribunals entertaining doubts about the usefulness or legitimacy of the criterion assessed and confirmed compliance with it.406 Yet, only few tribunals indicated that the criterion was a necessary component to establish the existence of an investment in the sense of Art. 25(1);407 and in only two cases was the Centre’s jurisdiction declined because the activity in question was found to lack a contribution to host State development. In Mitchell v DR Congo, the Claimant had obtained an award in his favor, finding that action against the Claimant’s law firm in the DR Congo amounted to an expropriation.408 In the annulment proceedings, the DR Congo argued that the law firm was not an investment, since it did not contribute to the host State’s economic and social development.409 The ad hoc Committee accepted this contention. It relied on the 403 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 64. See also ibid paras 88, 91. 404 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 57. 405 See eg Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 43; RFCC v Morocco, Decision on Jurisdiction (16 July 2001) paras 65, 66; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 77; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 117; OKO v Estonia, Award (19 November 2007) para 206; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 128, 132; Chevron v Bangladesh, Award (17 May 2010) para 125, lit d); Millicom v Senegal, Decision on Jurisdiction (16 July 2010) paras 80–81; Malicorp v Egypt, Award (7 February 2011) paras 109–112; Meerapfel v Central African Republic, Award (12 May 2011) paras 179, 183, 184, 206–209; Convial Callao v Peru, Award (21 May 2013) paras 438; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 206, 250; Karkey v Pakistan, Award (22 August 2017) para 633; Cortec Mining v Kenya, Award (22 October 2018) para 300, lit c); Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 191. See also Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 378. The treatment in Joy Mining v Egypt, Award (6 August 2004) para 57 is unclear. Some tribunals accepted the criterion, but did not further analyze it, see eg Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 99–101; RSM v Grenada I, Award (13 March 2009) para 240. 406 Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 129, 132; Alpha Projektholding v Ukraine, Award (8 November 2010) paras 312, 328–331; Lahoud v DR Congo, Award (7 February 2014) paras 313, 325; von Pezold and others v Zimbabwe, Award (28 July 2015) para 286. See also Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 190–192; Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 240, 246. See also Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 487. 407 See Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 86. 408 For the analysis on whether the Claimant had made an investment, see Mitchell v DR Congo, Award (9 February 2004) paras 40–57. 409 Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 23. For commentary on the decision, see Walid Ben Hamida, ‘Two Nebulous ICSID Features: The Notion of Investment and the Scope of Annulment Control. Ad Hoc Committee’s Decision in Patrick Mitchell v Democratic Republic of Congo’ (2007) 24 J Int’l Arb 287.

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Convention’s Preamble with its reference to economic development, on previous cases, and on the First Edition of this Commentary.410 In the ad hoc Committee’s view, in order to show a contribution to the host State’s development, ‘it would be necessary for the Award to indicate that, through his knowhow, the Claimant had concretely assisted the DRC, for example by providing it with legal services in a regular manner or by specifically bringing investors.’411 In addition, the ad hoc Committee noted that returns collected by the investor were not reinvested in the host State, but transferred to the United States.412 The ad hoc Committee found that the Award’s reasoning was incoherent since ‘it boils down to granting the qualification as investor to any legal counseling firm or law firm established in a foreign country, thereby enabling it to take advantage of the special arbitration system of ICSID.’413 It followed that the Tribunal’s acceptance of jurisdiction on the basis of an investment within the meaning of the Convention had to be annulled on the grounds of manifest excess of powers and failure to state reasons.414 In Malaysian Historical Salvors v Malaysia, a case under the Malaysia–United Kingdom BIT, the dispute arose out of the non-performance by the Respondent of a contract for finding and salvaging historical objects from an ancient shipwreck. Quoting, inter alia, from the paragraph listing typical features of an investment from the First Edition of this Commentary (see para. 231 supra), the Convention’s Preamble, and the Executive Directors’ Report, both of which refer to economic development,415 the Sole Arbitrator appointed in the case concluded that the weight of authorities was in favor of requiring a significant contribution to the host State’s economy.416 On the facts, he found that this was not the case:

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131. . . . the Tribunal finds that the Contract did not benefit the Malaysian public interest in a material way or serve to benefit the Malaysian economy in the sense developed by ICSID jurisprudence, namely that the contributions were significant. 132. . . . The benefits which the Contract brought to the Respondent are largely cultural and historical. These benefits, and any other direct financial benefits to the Respondent, have not been shown to have led to significant contributions to the Respondent’s economy in the sense envisaged in ICSID jurisprudence.417

The Tribunal specifically rejected any ‘perceived political or cultural benefits’ except where these would have a significant impact on the State’s economic development.418 A possible contribution of the salvage contract to the tourism industry was dismissed as speculative.419 It followed that, in the absence of an investment in the sense of Art. 25(1) of the Convention, there was no jurisdiction.

410 Mitchell v DR Congo, Decision on Annulment (1 November 2006) paras 28–31. For further analysis, see Yulia Andreeva, ‘Salvaging or Sinking the Investment? MHS v Malaysia Revisited’ (2008) 7 LPICT 161. 411 Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 39. 412 ibid paras 42–46. 413 ibid para 40. 414 ibid para 67. 415 Malaysian Historical Salvors v Malaysia, Award (17 May 2007) paras 44, 66, 67. For further analysis, see Jean Ho, ‘The Meaning of “Investment” in ICSID Arbitrations’ (2010) 26 Arb Int’l 633. 416 Malaysian Historical Salvors v Malaysia, Award (17 May 2007) para 123. 417 ibid paras 131, 132. See also ibid para 143. 418 ibid para 138. 419 ibid para 144.

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However, the Award in Malaysian Historical Salvors v Malaysia was subsequently annulled.420 The ad hoc Committee found, by majority, that the Tribunal had manifestly exceeded its powers by not exercising the jurisdiction with which it had been endowed, inter alia, because it had elevated the criterion of contribution to host State development into a jurisdictional condition and interpreted that condition as excluding small contributions and contributions with a cultural and historical value.421 In the ad hoc Committee’s view, the drafting history of the Convention was clear in rejecting a minimum monetary value for the existence of an investment422 and in giving the parties wide freedom to determine the types of disputes they wanted to submit to the Centre, subject only to the outer limits that a sale did not constitute an investment.423 In a forceful dissent, Mohamed Shahabuddeen disagreed with the majority’s finding on this point, reasoning that a substantial contribution to host State development had to be understood as a condition for the existence of an ‘ICSID investment.’424 In contrast to these decisions, an increasing number of tribunals reject the contribution to host State development as an independent criterion for determining the existence of an investment in the sense of Art. 25(1). In Bayindir v Pakistan, the Tribunal considered that the condition was often already included in the other three conditions of the ‘Salini test.’425 In the two closely related LESI cases, the Tribunals rejected the relevance of a contribution to the host State’s development as a separate criterion. The Tribunals said: it is not necessary that the investment contribute more specifically to the host country’s economic development, something that is difficult to ascertain and that is implicitly covered by the other three criteria.426

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The Tribunal in Phoenix Action v Czech Republic spoke of a reversible presumption that contribution to the host State’s development was inherent in the other three Salini criteria. It stated: 85. It is the Tribunal’s view that the contribution of an international investment to the development of the host State is impossible to ascertain – the more so as there are highly diverging views on what constitutes ‘development’. A less ambitious approach should therefore be adopted, centered on the contribution of an international investment to the economy of the host State, which is indeed normally inherent in the mere concept of investment as shaped by the elements of contribution/duration/risk, and should therefore in principle be presumed. . . . 86. Nevertheless, depending on the circumstances, this presumption can be reversed . . . If the investor carries out no economic activity, which is the goal of the encouragement of the flow of international investment, the operation, although possibly involving

420 421 423 424

Malaysian Historical Salvors v Malaysia, Decision on Annulment (16 April 2009). ibid para 80. 422 ibid paras 64–71. ibid para 72. ibid, Dissenting Opinion Shahabuddeen (19 February 2009) paras 2, 4, 14–32, 33–38 (relying, inter alia, on the First Edition of this Commentary). 425 Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 137. 426 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 13(iv) in fine; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 72(iv) in fine. Similarly, Houben v Burundi, Award (12 January 2016) para 112, fn 43.

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a contribution, a duration and some taking of risk will not qualify as a protected investment, as it does not satisfy the purpose of the ICSID Convention. . . .427

Many other tribunals also rejected the criterion, stating that a contribution to host State development was a consequence of an investment, not a pre-condition. For example, the Tribunal in Saba Fakes v Turkey reasoned:

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The Tribunal is not convinced, on the other hand, that a contribution to the host State’s economic development constitutes a criterion of an investment within the framework of the ICSID Convention. Those tribunals that have considered this element as a separate requirement for the definition of an investment, such as the Salini Tribunal, have mainly relied on the preamble to the ICSID Convention to support their conclusions. The present Tribunal observes that while the preamble refers to the ‘need for international cooperation for economic development,’ it would be excessive to attribute to this reference a meaning and function that is not obviously apparent from its wording. In the Tribunal’s opinion, while the economic development of a host State is one of the proclaimed objectives of the ICSID Convention, this objective is not in and of itself an independent criterion for the definition of an investment. The promotion and protection of investments in host States is expected to contribute to their economic development. Such development is an expected consequence, not a separate requirement, of the investment projects carried out by a number of investors in the aggregate. Taken in isolation, certain individual investments might be useful to the State and to the investor itself; certain might not. Certain investments expected to be fruitful may turn out to be economic disasters. They do not fall, for that reason alone, outside the ambit of the concept of investment.428

Other tribunals also rejected the need for a contribution to host State development, thus reducing the Salini test from four to three elements.429 The tribunals took issue with the subjective nature of the element, the vagueness of the notion of development, and difficulties in establishing a contribution to it, in particular in light of the risk of evaluating a project’s contribution in hindsight, rather than at the time of its establishment. The weight of authority is therefore against accepting a contribution to the host State’s development as a necessary element for the existence of an investment and hence as a jurisdictional requirement under the ICSID Convention.

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d) Evaluation of the Salini Test While the Salini test has become the regular starting point of analysis in arbitral jurisprudence to determine the existence of an investment in the sense of Art. 25(1), the test itself is not universally accepted. Failure to apply the test has also rightly been 427 Phoenix Action v Czech Republic, Award (15 March 2009) paras 85–86 (emphases in the original). Similarly, RSM v Central African Republic, Award (11 July 2011) paras 56–57. 428 Saba Fakes v Turkey, Award (14 July 2010) para 111 (emphasis in the original). 429 Pey Casado and v Chile, Award (8 May 2008) para 232; Alpha Projektholding v Ukraine, Award (8 November 2010) para 312; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 220–225; Deutsche Bank v Sri Lanka, Award (31 October 2012) para 306; Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 5.42; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 201, 207–208; KT Asia v Kazakhstan, Award (17 October 2013) paras 171, 173; İçkale v Turkmenistan, Award (8 March 2016) para 291; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 422; Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) paras 296, 301, 414.

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found not to constitute a ground for annulment of an ICSID award.430 Above all, the test should not be handled as imposing strict jurisdictional requirements, but be understood as providing guidance for characteristics that an investment in the sense of Art. 25(1) of the Convention typically does, but not necessarily must, display. Some tribunals have distanced themselves explicitly from the Salini test, criticizing in particular that a rigid application of its criteria would result in an overly strict handling of the notion of investment in Art. 25(1). The Tribunal in Biwater Gauff v Tanzania went into a detailed discussion of the Salini test and stated: 312. In the Tribunal’s view, there is no basis for a rote, or overly strict, application of the five Salini criteria in every case. These criteria are not fixed or mandatory as a matter of law. They do not appear in the ICSID Convention. . . . 313. Given that the Convention was not drafted with a strict, objective, definition of ‘investment’, it is doubtful that arbitral tribunals sitting in individual cases should impose one such definition which would be applicable in all cases and for all purposes. ... 314. Further, the Salini Test itself is problematic if, as some tribunals have found, the ‘typical characteristics’ of an investment as identified in that decision are elevated into a fixed and inflexible test, and if transactions are to be presumed excluded from the ICSID Convention unless each of the five criteria are satisfied. This risks the arbitrary exclusion of certain types of transaction from the scope of the Convention. . . . 316. The Arbitral Tribunal therefore considers that a more flexible and pragmatic approach to the meaning of ‘investment’ is appropriate, which takes into account the features identified in Salini, but along with all the circumstances of the case, including the nature of the instrument containing the relevant consent to ICSID.431

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The Tribunal in Abaclat and others v Argentina also rejected the Salini criteria as a jurisdictional test for determining the existence of an investment in the sense of Art. 25(1). It stated: Considering that these criteria were never included in the ICSID Convention, while being controversial and having been applied by tribunals in varying manners and degrees, the Tribunal does not see any merit in following and copying the Salini criteria. The Salini criteria may be useful to further describe what characteristics contributions may or should have. They should, however, not serve to create a limit, which the Convention itself nor the Contracting Parties to a specific BIT intended to create.432

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Instead, the Abaclat tribunal suggested to limit the inquiry under the notion of investment in the sense of Art. 25(1) to verifying that Claimants made contributions, which led to the creation of the value that Argentina and Italy intended to protect under the BIT. Thus the only requirement regarding the contribution is that it be apt to create the value that is protected under the BIT.433

430 Teinver v Argentina, Decision on Annulment (29 May 2019) paras 86–87. 431 Biwater Gauff v Tanzania, Award (24 July 2008) paras 312–314, 316 (emphases in the original). Similarly, Malaysian Historical Salvors v Malaysia, Decision on Annulment (16 April 2009) para 79; Pantechniki v Albania, Award (30 July 2009) paras 43–48; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 82. 432 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 364. 433 ibid para 365.

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The development by some tribunals of the elements of the Salini test from a descriptive list of typical features towards a set of mandatory legal requirements is indeed unfortunate. The First Edition of this Commentary cannot serve as authority for this development. To the extent that the ‘Salini test’ is applied to determine the existence of an investment, its criteria should not be seen as a rigid list of distinct jurisdictional requirements each of which must be met separately, but as characteristics that an investment in the sense of Art. 25(1) typically displays. Furthermore, it is not necessary that every element must be slavishly fulfilled. It is an overall assessment that is relevant, the purpose of which is to filter out disputes arising out of activities or transactions that the Centre was not thought to address, in particular non-economic activities and commercial activities that do not involve investmentspecific risks. In fact, several tribunals that have looked at the elements of the Salini test have pointed out repeatedly that the criteria were interrelated and should not be looked at in isolation, but in conjunction. Already the Salini tribunal said:

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In reality, these various elements may be interdependent. Thus, the risks of the transaction may depend on the contributions and the duration of performance of the contract. As a result, these various criteria should be assessed globally even if, for the sake of reasoning, the Tribunal considers them individually here.434

Other tribunals have adopted a similar view.435 For example, the Tribunal in İçkale v Turkmenistan stated:

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The Tribunal agrees that the three criteria identified by the Salini tribunal – contribution of capital, certain duration and assumption of risk – are not independent or free-standing criteria but interdependent in the sense that a commitment of capital to a business venture – ‘contribution’ of capital – implies, in itself, a certain duration for the contribution in question and a risk of loss of the capital contributed.436

Other tribunals also expressed the view that the elements laid down in the Salini test should at the most ‘be viewed as non-binding, non-exclusive means of identifying (rather than defining) investments that are consistent with the ICSID Convention.’437 As the Tribunal in Philip Morris v Uruguay stated, the Salini criteria

434 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 52. 435 RFCC v Morocco, Decision on Jurisdiction (16 July 2001) para 60; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 130; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 91; Malaysian Historical Salvors v Malaysia, Award (17 May 2007) paras 72, 106, 124, 130; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 116; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 128; RSM v Grenada I, Award (13 March 2009) para 244; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 92 (stating that ‘[i]t is not necessary to parse each component part of the overall transaction and examine whether each, standing alone, would satisfy the definitional requirements of the BIT and the ICSID Convention. For purposes of this Tribunal’s jurisdiction, it is sufficient that the transaction as a whole meets those requirements’); Meerapfel v Central African Republic, Award (12 May 2011) paras 184–186; Caratube v Kazakhstan, Award (5 June 2012) para 409. See also MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 189. 436 İçkale v Turkmenistan, Award (8 March 2016) para 290. 437 Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 131. Similarly, MCI v Ecuador, Award (31 July 2007) para 165; RSM v Grenada I, Award (13 March 2009) para 241; Malicorp v Egypt, Award (7 February 2011) para 109; Gavrilović v Croatia, Award (26 July 2018) para 193.

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schreuer’s commentary on the icsid convention are typical features of investments under the ICSID Convention, not ‘a set of mandatory legal requirements’. As such, they may assist in identifying or excluding in extreme cases the presence of an investment but they cannot defeat the broad and flexible concept of investment under the ICSID Convention to the extent it is not limited by the relevant treaty, as in the present case.438

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A rigid list of criteria that must be met in every case is also not likely to facilitate the task of tribunals or to make decisions more predictable. In addition, such an approach will have difficulties in coping with developments in economic reality, in particular as related to digitization, that bring about new forms of assets or services. The individual criteria for the determination of an investment in the sense of Art. 25(1) carry a considerable margin of appreciation that arbitral tribunals and conciliation commissions should make use of in order to help the Convention fulfill its object and purpose in contributing to managing and reducing political risk in foreign investment relations. Above all, a test that turns on the contribution to the host State’s development should be treated with particular care. The reference in the Convention’s Preamble indicates that economic development is among the Convention’s object and purpose. This would support the proposition that an activity or transaction that is designed to promote the host State’s development enjoys the presumption of being an investment. But it does not follow that an activity that does not obviously contribute to economic development, either because it is economically too insignificant or harmful to the host State’s population or its environment, must be excluded from access to the jurisdiction of the Centre. Instead, the disputing parties, and in particular host States, have it in their hands to limit their consent to the jurisdiction of the Centre by establishing quantitative or qualitative criteria an investment has to meet and thereby exclude those investments from entering their territory and from access to the Convention’s dispute settlement mechanism. Moreover, any concept of host State development, if it were to serve as a yardstick for the existence of an investment, and hence for access to dispute settlement under the Convention, should be treated with flexibility.439 It should not be restricted to measurable contributions to GDP, but should include development of human potential, political and social development, and the protection of the local and the global environment. Any contribution to development would also need to be assessed and forecasted prospectively at the moment of making an investment, rather than retrospectively when an investment has either failed or occasioned negative impact on the host State.440 Otherwise, legal certainty would be endangered if the possibility for a foreign national

438 Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 206 (quoting the Second Edition of this Commentary). Similarly, Alpha Projektholding v Ukraine, Award (8 November 2010) para 313; Elsamex v Honduras, Award (16 November 2012) paras 256–260; Awdi v Romania, Award (2 March 2015) paras 197–199; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 207, 215; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 420; Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) para 200. See also MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 189. 439 For further detail, see Ben Hamida (n 409) 296–297. 440 See Stephan W Schill, ‘International Investment Law as International Development Law’ in Andrea K Bjorklund (ed), Yearbook on International Investment Law and Policy 2012–2013 (OUP 2014) 327, 342. Similarly, RSM v Grenada I, Award (13 March 2009) para 244.

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to have access to the Centre depended on the future impacts of the investment on the host State.

4. Types of Investments A perusal of cases that have come before ICSID tribunals demonstrates the diversity of matters covered by the concept of investment. The cases concern a wide range of economic sectors, including oil, gas, and mining; electric power and other energy; transportation; construction; finance; information and communication; water, sanitation, and flood protection; agriculture, fishing, and forestry; tourism; services and trade; and other industries.441 In fact, no economic sector is excluded from involving investments in the sense of Art. 25(1) of the Convention. State practice under Art. 25(4) of the Convention, which involves examples of Contracting Parties notifying the Centre of classes of disputes concerning specific economic activities they would not consider submitting to the jurisdiction of the Centre confirms this (see paras. 1483, 1486 infra). The breadth of the concept of investment also shows when looking at the categories of rights and assets covered by it. These include (tangible and intangible) property rights and rights under contracts (see para. 283 infra), shareholdings (see paras. 284–290 infra), and public law instruments and government contracts (see para. 291 infra). ICSID tribunals further distinguish investments from simple sales of goods or similar purely commercial transactions, which are not covered as investments (see paras. 292–297 infra). A number of cases also involve the question as to whether financial transactions and instruments (see paras. 298–302 infra) and arbitral awards qualify as investments (see paras. 303–305 infra).

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a) (Tangible and Intangible) Property Rights and Rights under Contracts In many cases, tribunals have not entertained doubts that the investors’ involvement in economic activities in the host State qualified as investments in the sense of Art. 25(1) of the ICSID Convention. Holding property rights in the host State is a chief example of an investment. This includes cases where the foreign national has, for purposes of his or her business activity, acquired ownership of movable or immovable property.442 But also intangible rights, such as intellectual property rights, have been found to qualify as investments under Art. 25(1) of the ICSID Convention.443 Similarly, 441 See ICSID, ‘The ICSID Caseload – Statistics Issue 2020-1’ (2020) 12 accessed 10 January 2021. 442 See eg Santa Elena v Costa Rica, Award (17 February 2000); Middle East Cement v Egypt, Award (12 April 2002) paras 131–151. 443 For ICSID cases involving claims connected to the violation of intellectual property rights, see Philip Morris v Uruguay, Award (8 July 2016); Bridgestone v Panama, Decision on Expedited Objections (13 December 2017) paras 153–222. For passing reference, see also F-W Oil v Trinidad and Tobago, Award (3 March 2006) para 184. For further discussion, see Lahra Liberti, ‘Intellectual Property Rights in International Investment Agreements: An Overview’ OECD Working Papers on International Investment No 2010/01 (OECD 2010); Bryan Mercurio, ‘Awaking the Sleeping Giant: Intellectual Property Rights in International Investment Agreements’ (2012) 15 JIEL 871; Rochelle Dreyfuss and Susy Frankel, ‘From Incentive to Commodity to Asset: How International Law Is Reconceptualizing Intellectual Property’ (2015) 36 Mich JIL 557; Henning Grosse Ruse-Khan, ‘Investment Law and Intellectual Property Rights’ in Bungenberg and others (n 18) 1692; Lukas Vanhonnaeker, Intellectual Property Rights as Foreign Direct Investments, from Collision to Collaboration (Elgar 2016); Carlos Correa and Jorge E Viñuales, ‘Intellectual Property Rights as Protected Investments: How Open Are the

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it is well established that rights arising from contracts, both between the foreign national and the government (see paras. 291, 299–301, 419–427, 429–434 infra) and between the foreign national and private parties (see paras. 300, 393–394, 428 infra), may amount to investments.

b) Shareholdings 284

Participation by the foreign national in companies or shareholdings constitutes a frequently invoked form of investment.444 This is important as many host States require foreign investments to be implemented through locally incorporated companies. The number of cases that have accepted shareholdings in locally incorporated companies as a form of investment in the sense of Art. 25(1) of the Convention is considerable.445 What is more, that shareholdings qualify as investments is so wellaccepted that the point hardly merits discussion anymore in actual practice. As the Tribunal in Dan Cake v Hungary stated in relation to Danesita, the Claimant’s subsidiary in Hungary: Although neither the Treaty nor the ICSID Convention defines ‘direct investment,’ there is no doubt that Dan Cake’s shares in Danesita are a direct investment in Hungary, . . . The liquidation of Danesita therefore affects Dan Cake’s direct investment in Hungary, and Dan Cake has a right to the protection offered by the Treaty in relation to it.446

Gates?’ (2016) 19 JIEL 91; Susy Frankel, ‘Interpreting the Overlap of International Investment and Intellectual Property Law’ (2016) JIEL 121; Rochelle Dreyfuss and Susy Frankel, ‘Reconceptualizing ISDS: When Is IP an Investment and How Much Can States Regulate It?’ (2019) 21 Vand J Ent & Tech L 377; Daniel Gervais, ‘Intellectual Property: A Beacon for Reform of Investor–State Dispute Settlement’ (2019) 40 Mich JIL 289. 444 For further discussion, see Alexandrov (n 177) 27–45; Christoph Schreuer, ‘Shareholder Protection in International Investment Law’ in Pierre-Marie Dupuy and others (eds), Common Values in International Law, Essays in Honour of Christian Tomuschat (Engel 2006) 601; Schill (n 331) 200–209; Zachary Douglas, The International Law of Investment Claims (CUP 2009) 397–457; Abby Cohen Smutny, ‘Claims of Shareholders in International Investment Law’ in Binder and others (n 17) 363; Patrick Dumberry, ‘The Legal Standing of Shareholders before Arbitral Tribunals: Has Any Rule of Customary International Law Crystallised?’ (2010) 18 Mich State JIL 353; Martin J Valasek and Patrick Dumberry, ‘Developments in the Legal Standing of Shareholders and Holding Corporations in Investor–State Disputes’ (2011) 26 ICSID Rev 34; Lukas Vanhonnaeker, Shareholders’ Claims for Reflective Loss in International Investment Law (CUP 2020); Gabriel Bottini, Admissibility of Shareholder Claims under Investment Treaties (CUP 2020). 445 For examples from early ICSID practice, see Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 88–94 and Appendix 1 (listing eighteen cases to this effect). For further examples, see IBM v Ecuador, Decision on Jurisdiction (22 December 2003) paras 44, 48; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) paras 51–54, 76–89; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 46–51; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 209–222; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 46–51; Telenor v Hungary, Award (13 September 2006) paras 19, 27, 60; Parkerings v Lithuania, Award (11 September 2007) paras 250–254; Lemire v Ukraine, Award (28 March 2011) paras 34–39; Meerapfel v Central African Republic, Award (12 May 2011) paras 195, 216–222; Impregilo v Argentina, Award (21 June 2011) paras 110–140, 238–246, 271; Vigotop v Hungary, Award (1 October 2014) para 248; Awdi v Romania, Award (2 March 2015) para 194; Unión Fenosa v Egypt, Award (31 August 2018) para 6.67; Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 118. See also the references in nn 449–456 infra. On indirect shareholdings, see paras 334–342 infra. 446 Dan Cake v Hungary, Decision in Jurisdiction and Liability (24 August 2015) para 73.

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Tribunals have also clarified that the protection as a shareholder in a locally incorporated company was independent from, and additional to, any possibility of the locally incorporated company qualifying as a foreign national under Art. 25(2)(b), second alternative if the company is under foreign control and the parties have agreed to treat it as a foreign national.447 Similarly, the protection of shareholdings is not limited to majority or controlling shareholdings. Instead, arbitral jurisprudence has consistently confirmed that it also covers minority shareholdings without the need for a controlling interest in a locally incorporated company. The short-term holding of shares may, however, be excluded as an investment.448 In Lanco v Argentina, the first decision that expressly commented on this issue, the Tribunal emphasized that the language of the Argentina–United States BIT ‘says nothing indicating that the investor in the capital stock has to have control over the administration of the company, or a majority share.’449 Instead, it considered an equity share participation of 18.3 percent as sufficient to qualify as an investment under both the BIT and Art. 25(1) of the Convention.450 Along the same lines, the Tribunal in CMS v Argentina observed that since the ICJ’s decision in Barcelona Traction, which distinguished for purposes of exercising diplomatic protection principally according to whether rights of the company or rights of the shareholder were affected (see para. 343 infra), international law had undergone a profound change as regards the protection of shareholders. Not only did ‘the Elettronica Sicula decision evidences that the International Court of Justice itself accepted, some years later, the protection of shareholders of a corporation by the State of their nationality;’451 what is more, ‘[d]iplomatic protection itself has been dwindling in current international law, as the State of nationality is no longer considered to be protecting its own interest in the claim but that of the individual affected.’452 As the CMS tribunal reasoned: State practice further supports the meaning of this changing scenario. Besides accepting the protection of shareholders and other forms of participation in corporations and partnerships, the concept of limiting it to majority or controlling participations has 447 See Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 38–42; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 28–32. There are by now several examples where both locally incorporated companies and their shareholders have been accepted as joint claimants, generally without any specific discussion on this point. See eg Duke Energy v Ecuador, Award (18 August 2008) paras 2–5, 146–147; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 193–196; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 2, 236; Eyre and Montrose v Sri Lanka, Award (5 March 2020) para 270. 448 ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) para 62; KT Asia v Kazakhstan, Award (17 October 2013) paras 207–216; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 340–345. 449 Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 10. 450 ibid paras 10 and 48. See also AAPL v Sri Lanka, Award (27 June 1990) para 95, where the circumstance that the Claimant only disposed of a minority shareholding interest in a local joint venture was never questioned as constituting an investment. 451 CMS v Argentina, Decision on Jurisdiction (17 June 2003) para 44 (referring to Elettronica Sicula SpA (ELSI) (United States v Italy) [1989] ICJ Rep 15). For further analysis of the ELSI case, see Stephen A Kubiatowski, ‘The Case of Elettronica Sicula S.p.A.: Toward Greater Protection of Shareholders’ Rights in Foreign Investments’ (1991) 29(1) Columbia JTL 215; Sean D Murphy, ‘The ELSI Case: An Investment Dispute at the International Court of Justice’ (1991) 16 Yale JIL 391. 452 CMS v Argentina, Decision on Jurisdiction (17 June 2003) para 45.

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schreuer’s commentary on the icsid convention given way to a lower threshold in this respect. Minority and non-controlling participations have thus been included in the protection granted or have been admitted to claim in their own right. Contemporary practice relating to lump-sum agreements, the decisions of the Iran–United States Tribunal and the rules and decisions of the United Nations Compensation Commission, among other examples, evidence increasing flexibility in the handling of international claims.453

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The Tribunal therefore concluded that there was ‘no bar in current international law to the concept of allowing claims by shareholders independently from those of the corporation concerned, not even if those shareholders are minority non-controlling shareholders.’454 It also stated that this had repercussions for the interpretation of the notion of investment under Art. 25(1) of the Convention, namely that ‘[t]here is indeed no requirement that an investment, in order to qualify, must necessarily be made by shareholders controlling a company or owning the majority of its shares.’455 This approach to the protection of minority shareholdings as investments in the sense of Art. 25(1) of the Convention has been confirmed consistently in numerous decisions by ICSID tribunals since.456 As summarized by Alexandrov: In sum, it is beyond doubt that shareholders have standing in ICSID to submit claims separate and independent from the claims of the corporation. Moreover, this principle applies to all shareholders, no matter whether or not they own the majority of the shares or control the corporation.457

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The coverage of shareholdings as investments, both under investment treaties and Art. 25(1) of the Convention, raises a number of further questions. These include the question whether only direct, or also indirect shareholdings are covered under Art. 25(1) and whether shareholdings themselves qualify as a form of holding an indirect investment in the company assets (see paras. 331–361 infra).

453 ibid para 47 (internal references omitted). 454 ibid para 48. 455 ibid para 51. 456 See eg Vivendi v Argentina, Decision on Annulment (3 July 2002) para 50 and ibid, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 88–90; Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) para 3.4.2; Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 39, 44, 49 and Decision on Jurisdiction (Ancillary Claim) (2 August 2004) paras 21, 22, 29, 39; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) paras 50–63; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 42, 92–94; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 32, 58, 79–82; Camuzzi v Argentina II, Decisión sobre Jurisdicción (10 June 2005) para 34(v); SAUR v Argentina, Decision on Jurisdiction (27 February 2006) paras 87–90; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 138 and Award (31 October 2011) paras 206–213; Metalpar v Argentina, Decision on Jurisdiction (27 April 2006) para 68; CMS v Argentina, Decision on Annulment (25 September 2007) paras 58–76; Phoenix Action v Czech Republic, Award (15 April 2009) paras 121–123; Impregilo v Argentina, Award (21 June 2011) paras 137–140; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 29, 235–254; TECO v Guatemala, Award (19 December 2013) paras 438–439; Renée Rose Levy v Peru, Award (26 February 2014) para 144; Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) paras 112–119; ibid, Decision on Liability (29 December 2014) paras 150–181, 302–307; Orascom v Algeria, Award (31 May 2017) paras 153, 374–385; Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018) paras 6, 178; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 191–193, 195; Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) para 288. For non-ICSID cases, see eg Walter Bau v Thailand (UNCITRAL), Award (1 July 2009) paras 12.31–12.32; ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) para 275. 457 Alexandrov (n 177) 30.

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c) Public Law Instruments and Government Contracts ICSID tribunals found a variety of public law instruments, such as concessions, licenses, or permits, for example for the exploitation of natural resources, the operation of public utilities, or the implementation of other regulated business activities, to qualify as investments under Art. 25(1) of the Convention.458 Various ICSID tribunals have also found that rights arising from contracts with the government may amount to investments.459 This is little surprising given that investor–State contracts are one of the bases for establishing the Centre’s jurisdiction (see also paras. 188–200 supra).

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d) Sale of Goods and Other Purely Commercial Transactions Distinguished ICSID tribunals take care, however, to emphasize that not every contract with the host State, or one of its entities, qualifies as an investment in the sense of Art. 25(1) of the ICSID Convention. ICSID practice is consistent in emphasizing that contracts that are not more than regular commercial transactions do not qualify as investments in the sense of Art. 25(1) of the Convention. On a few occasions, the Secretary-General has refused to register a request for arbitration as being manifestly outside the Centre’s jurisdiction that related to sale of goods transactions.460 For the Tribunal in Fedax v Venezuela, one of the key issues in determining whether promissory notes issued by the Respondent qualified as an investment was to distinguish them from ordinary commercial transactions.461 As indicated by the ad hoc Committee in Malaysian Historical Salvors v Malaysia, this distinction is said to keep with the idea of the Drafts of the Convention ‘that use of the term “investment” excluded a simple sale and like transient commercial transactions from the jurisdiction of the Centre’462 as part of the ‘outer limits’ of the notion of investment in the sense of Art. 25(1).463

458 See eg Goetz v Burundi, Award (10 February 1999) para 124; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 135; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 62; Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 70; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 104; Telenor v Hungary, Award (13 September 2006) paras 61–62; Malicorp v Egypt, Award (7 February 2011) paras 111–114; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 228–237; Convial Callao v Peru, Award (21 May 2013) para 435; Flughafen Zürich v Venezuela, Award (18 November 2014) paras 238–258; von Pezold and others v Zimbabwe, Award (28 July 2015) para 315. See also Tecmed v Mexico (AF), Award (29 May 2003) para 113. 459 See eg SPP v Egypt, Award (20 May 1992) paras 164, 165; IBM v Ecuador, Decision on Jurisdiction (22 December 2003) paras 11–18; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 255; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 92. See also the cases referenced in paras 188–200 supra; paras 299–302, 419–427, 429–434 infra. 460 See Gaillard and Banifatemi (n 255) 102, fn 21 (reporting that the Secretary-General’s refusal to register the request for arbitration in Asian Express International (S) PTE Ltd v Greater Colombo Economic Commission in 1985 was due to the case arising out of a sales contract); Ibrahim FI Shihata and Antonio Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 308 (reporting on one such situation, which seems to have occurred in the late 1990s, where the BIT on which the host State’s consent was based arguably contained a notion of investment that would have covered a sale of goods). 461 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) paras 15–43. 462 Malaysian Historical Salvors v Malaysia, Decision on Annulment (16 April 2009) para 69. 463 ibid para 72. For criticism of this ‘commercial transaction test,’ see Pahis (n 255); Mortenson (n 256) 298–299; Sattorova (n 255) 279–281.

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Distinguishing between regular commercial contracts and investment agreements was also at the heart of the reasoning of the Tribunal in Joy Mining v Egypt.464 In respect of a contract between the Claimant and a host State instrumentality, the Tribunal stated: First, the Tribunal notes that the scope of the Contract is to replace and ‘procure’ longwall mining equipment, this being an element of normal sales contracts. Second, admittedly the Contract involves a number of additional activities mentioned above, such as engineering and design, production and stocking of spare parts and maintenance tools and incidental services such as supervision of installation, inspection, testing and commissioning, training and technical assistance. This is certainly a special feature of contracts relating to the supply of complex equipment. But it does not transform the Contract into an investment, any more than the procurement of highly sophisticated railway or aircraft equipment would, despite the fact that such equipment would require additional activities such as engineering and design, spare parts and incidental services.465

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The Tribunal added that it is also mindful that if a distinction is not drawn between ordinary sales contracts, even if complex, and an investment, the result would be that any sales or procurement contract involving a State agency would qualify as an investment. International contracts are today a central feature of international trade and have stimulated far reaching developments in the governing law, among them the United Nations Convention on Contracts for the International Sale of Goods, and significant conceptual contributions. Yet, those contracts are not investment contracts, except in exceptional circumstances, and are to be kept separate and distinct for the sake of a stable legal order. Otherwise, what difference would there be with the many State contracts that are submitted every day to international arbitration in connection with contractual performance, at such bodies as the International Chamber of Commerce and the London Court of International Arbitration?466

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A similar approach was taken by the Tribunal in Global Trading v Ukraine, a case under the Ukraine–United States BIT, in which the Claimants claimed that the Respondent had failed to pay for, and take delivery of, shipments of poultry under several purchase-and-sale contracts that the Claimants had entered into with a Ukrainian State enterprise as part of the government’s poultry ‘purchase-and-import program,’ which had the objective of resolving a severe poultry supply issue in Ukraine at the time.467 As regards the question whether the Claimants had an investment in Ukraine in the sense of Art. 25(1) of the Convention, the Tribunal stated: In the present instance, the Tribunal considers that the purchase and sale contracts entered into by the Claimants were pure commercial transactions and therefore cannot qualify as an investment for the purposes of Article 25 of the Convention. When the circumstances of the present case are examined and weighed, it can readily be seen that the money laid out by the Claimants towards the performance of these contracts was no

464 Joy Mining v Egypt, Award (6 August 2004). 465 ibid para 55. 466 ibid para 58 (internal references omitted). 467 For the facts of the case, see Global Trading v Ukraine, Award (1 December 2010) paras 36–39.

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more than is typical of the trading supplier under a standard CIF [i.e., cost, insurance, and freight] contract. The fact that the trade in these particular goods was seen to further the policy priorities of the purchasing State does not bring about a qualitative change in the economic benefit that all legitimate trade brings in its train. Nor can an undertaking by officials of the State to honour the contractual commitments to be concluded transform a sale and purchase agreement into an investment.468

Numerous other tribunals have confirmed that the simple sale of goods would not qualify as an investment in the sense of Art. 25(1) of the Convention.469 However, investment agreements do not only need to be distinguished from contracts for the sale of goods; the distinction is more broadly one between investment agreements and simple commercial transactions, including, for example, in respect of the simple provision of services.470 GEA Group v Ukraine, which involved the question whether a so-called Conversion Contract under which raw materials were delivered for a production plant in Ukraine for conversion against the payment of a tolling fee qualified as an investment, is a case in point to illustrate this distinction.471 Countering the Respondent’s argument that the Contract was in essence a sales contract, the Tribunal found it to ‘establish[] a relationship of “common interest” whereby [the Claimant] would, among other things, assist with delivery of logistics and pay for Ukrainian domestic freight, resolve customs issues, and supply the Oriana plant with necessary materials.’472 The Contract thus went beyond a simple commercial transaction and qualified as an investment in the sense of Art. 25(1) of the Convention. The Tribunal reasoned: The Conversion Contract entailed a contribution in kind, in the form of over one million metric tons of diesel and naphtha, catalysts and other materials, delivered to Ukraine as part of a broad economic operation, as well as the contribution of the Claimant’s knowhow on logistics, marketing, and the mobilisation of repairs and other services. This was clearly a complex relationship going far beyond a simple sale of raw materials. The relationship extended over a certain duration (a three year period if one considers only the time period when the Claimant was involved). Further, it is unquestionable that the foreign investor . . . undertook multiple risks, in the form of market risk, credit risk and political risk, in particular since Oriana was supplied with diesel without advance payment.473

468 ibid para 56. 469 See eg SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 133, fn 153; Phoenix Action v Czech Republic, Award (15 March 2009) para 82; Pantechniki v Albania, Award (30 July 2009) para 44; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 203; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 470; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 358–359; Tenaris v Venezuela I, Award (29 January 2016) para 291. See also Nova Scotia Power v Venezuela (AF), Award (30 April 2014) para 113; Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) para 211. 470 Cf also Elsamex v Honduras, Award (16 November 2012) paras 239–283; Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 635 (concerning ‘ordinary commercial transactions’ that fall ‘squarely outside the objective meaning of [the ICSID Convention’s concept of investment]’). 471 GEA Group v Ukraine, Award (31 March 2011) paras 148–153. 472 ibid para 149. 473 ibid para 152.

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e) Financial Transactions and Financial Instruments 298

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Numerous ICSID arbitrations involved the question to which extent financial transactions or financial instruments qualified as investments in the sense of Art. 25(1) (see also paras. 419–428 infra).474 In cases where the rights and obligations under those instruments were contingent, this was denied. Thus, ICSID tribunals have found that a bank guarantee475 and an option476 were not covered by the concept of an investment. A variety of other financial transactions and instruments, by contrast, have generally been accepted as qualifying as investments under Art. 25(1) of the Convention. Loan agreements, for example, have qualified in several cases as investments, either on a stand-alone basis, or in connection with the implementation of a larger investment project. In Fedax v Venezuela, Venezuela argued that the purchase of promissory notes issued by the government did not qualify as an investment since they involved neither a long-term transfer of financial resources in order to acquire interests in a corporation nor a portfolio investment.477 The Tribunal concluded that loans and other credit facilities were within the jurisdiction of the Centre and that the purchase of the promissory notes constituted an investment.478 Several other cases confirmed that loans given for concrete projects to the host State, public entities, or State instrumentalities,479 as well as loans extended to private

474 See also Aron Broches, ‘Choice-of-Law Provisions in Contracts with Governments’ (1971) 26 Rec Ass’n B City NY 42, 50; Delaume, ‘ICSID and the Transnat’l Financial Community’ (n 163) 237; Alexandrov (n 177) 45–49; Thomas W Wälde, ‘The Serbian Loans Case – a Precedent for Investment Treaty Protection of Foreign Debt?’ in Weiler (n 18) 383; Michail Dekastros, ‘Portfolio Investment: Reconceptualising the Notion of Investment under the ICSID Convention’ (2013) 14 JWIT 286; Charles N Brower and Alexandra Goetz-Charlier, ‘International Investment Arbitration and the Global Financial System: Are They “Yin” and “Yang” or like Oil and Water?’ in Christian J Tams, Stephan W Schill and Rainer Hofmann (eds), International Investment Law and the Global Financial Architecture (Elgar 2017) 23, 27–37; Caroline Kleiner and Francesco Costamagna, ‘Territoriality in Investment Arbitration: The Case of Financial Instruments’ (2018) 9 JIDS 315; Risso (n 255). 475 See Joy Mining v Egypt, Award (6 August 2004) paras 42–63, 78; Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 171–174, 245–246, 311. Similarly, White Industries v India (UNCITRAL), Final Award (30 November 2011) paras 7.5.1–7.5.7, 12.2.1 (concerning the notion of investment under the applicable BIT). But see Elsamex v Honduras, Award (16 November 2012) paras 284–293 (where a bank guarantee was but one part of a broader investment transaction). 476 PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 189. Cf also ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) para 273; Bosca v Lithuania (UNCITRAL), Award (17 May 2013) para 169. But see H&H v Egypt, Decision on Jurisdiction (5 June 2012) para 42 (finding that an option viewed in a broader context could fall under the concept of investment). 477 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 19. 478 ibid paras 18–43. See also Continental Casualty v Argentina, Award (5 September 2008) (concerning treasury bills and government bonds and loans as investments under the BIT and Art. 25(1) of the Convention); African Holding v DR Congo, Award (29 July 2008) paras 74–84 (concerning a loan to the host State that was later ceded). 479 See Holiday Inns v Morocco, Further Decision on Jurisdiction (12 May 1974) (as reported in Lalive (n 53) 155–160) (assuming jurisdiction in respect of claims relating to loan contracts concluded to implement the overall investment); CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 76–91; CDC v Seychelles, Award (17 December 2003) paras 6, 8, 18, 19, 21; Alpha Projektholding v Ukraine, Award (8 November 2010) paras 273–274, 322–323 (holding that loan agreements, including those involving fixed payment terms, qualify as investments); Standard Chartered Bank v TANESCO, Decision on Jurisdiction and Liability (12 February 2014) para 111; Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 220, 251.

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actors480 qualified as investments. Some controversy exists, however, whether the fact that loans often receive fixed payments may exclude them as investments on a standalone basis.481 Life insurance contracts and bonds issued by corporate banks have also been qualified as investments.482 A one-year hedging agreement between a foreign bank and a national petroleum company, which had the objective of protecting the company against the impact of rising oil prices, also qualified as an investment.483 Whether financial instruments issued by host governments for the financing of the State’s general budget qualify as investments under Art. 25(1) has proven to be more controversial.484 In three cases against Argentina involving large numbers of Italian bondholders who had purchased security interests in bonds issued by the State, the Tribunals concluded that the Claimants had made investments in the sense of both the Argentina–Italy BIT and Art. 25(1) of the ICSID Convention.485 Two Tribunals – in Abaclat and others v Argentina and Ambiente Ufficio and others v Argentina – did so over long and emphatic dissents.486 In a case involving the restructuring of Greek government bonds, the Tribunal in Poštová banka v Greece concluded that the bonds purchased on the secondary market did not qualify as investments under the terms of the Greece–Slovak Republic BIT, inter alia, because that BIT had a definition of investment that was much narrower than that in the Argentina–Italy BIT at stake in the Argentine bondholder

480 Sempra v Argentina, Award (28 September 2007) paras 214–216; OKO v Estonia, Award (19 November 2007) paras 179–180, 208; Daimler v Argentina, Award (22 August 2012) para 83; Tulip v Turkey, Award (10 March 2014) paras 202–203; Tenaris v Venezuela I, Award (29 January 2016) para 289. See also Anderson and others v Costa Rica (AF), Award (19 May 2010) paras 49–50 (qualifying private loans as assets under the BIT that only did not qualify as investments because the Tribunal found a violation of the BIT’s in-accordance-with-host-State-law clause); MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 196, 201 (qualifying loans to a privatized company that are part of the fulfillment of a privatization agreement with the host State qualify as investments). See also Portigon v Spain, Decision on Jurisdiction (20 August 2020) (not public) (reportedly qualifying financing of renewable energy projects as an investment under the ECT and Art. 25 of the ICSID Convention; see Lisa Bohmer, ‘Breaking: Majority Abitrators Uphold Jurisdiction over Claims by Financial Institution which Funded Renewable Energy Projects in Spain’ (IA Reporter, 21 August 2020)). In case of private loans, specific attention needs to be paid, however, as to whether a dispute with the host State arises directly out of the investment. See Burimi v Albania, Award (29 May 2013) paras 144–146. 481 In this sense, Emmanuel Gaillard, La Jurisprudence du CIRDI (Pedone 2004) 479 (stating that ‘un simple prêt dont la rémunération ne dépend en rien du succès de l’entreprise ne peut être qualifié d’investissement’); similarly MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 196. Cf Alpha Projektholding v Ukraine, Award (8 November 2010) para 323 (stating that ‘[t]he fact that a party is owed a fixed amount by the terms of a contract does not mean that all risk for that party has been eliminated, as the risk of default may remain at elevated levels. Removing all fixed payment contracts from the scope of investment protection would lead to a substantial loophole in the ICSID Convention . . .’). 482 Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) paras 291–304. 483 See Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 283–312. 484 See already Michael Waibel, ‘Opening Pandora’s Box: Sovereign Bonds in International Arbitration’ (2007) 101 AJIL 711. 485 See Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 362–367; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 441–471; Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) para 296. 486 See Abaclat and others v Argentina, Dissenting Opinion Abi-Saab (4 August 2011) paras 34–119, 268–270; Ambiente Ufficio and others v Argentina, Dissenting Opinion Torres Bernárdez (2 May 2013) paras 146–330.

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cases.487 The Poštová banka tribunal added, in an obiter dictum, which was only supported by a majority of the Tribunal, that it would have been prepared to find that the bonds did not qualify as an investment under Art. 25(1) of the Convention, inter alia, because the general financing of the State through debt did not involve the creation of value in the host State,488 nor did it involve any ‘operational risk,’ as distinct from ‘commercial and sovereign risks.’489

f ) Arbitral Awards as Investments 303

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In several cases, the issue arose whether claims concerning the non-enforcement or set-aside of international commercial arbitration awards arose out of investments.490 In this context, the Tribunal in ATA Construction v Jordan went as far as stating that ‘the right to arbitration is a distinct “investment” within the meaning of the BIT,’ which included in its definition ‘claims to . . . any other rights to legitimate performance having financial value related to an investment.’491 Other tribunals have generally been more hesitant and considered that arbitral awards did not qualify as stand-alone investments under investment treaties. However, to the extent the underlying contractual arrangement qualified as an investment, claims related to the non-enforcement or set-aside of arbitral awards could be seen as arising out of an investment.492 Several tribunals have supported a similar approach in respect of the notion of investment under Art. 25(1) of the ICSID Convention. The Tribunal in Saipem v Bangladesh, for example, stated, when faced with the claim that the set-aside by the Bangladeshi courts of an ICC award constituted an expropriation: 113. . . . The Tribunal agrees with Bangladesh that the rights arising out of the ICC Award arise only indirectly from the investment. Indeed, the opposite view would mean that the Award itself does constitute an investment under Article 25(1) of the ICSID Convention, which the Tribunal is not prepared to accept.

487 Poštová banka v Greece, Award (9 April 2015) paras 248–350. For critical discussion of this decision, see Francesco Montanaro, ‘Poštová Banka SA and Instrokapital SE v Hellenic Republic – Sovereign Bonds and the Puzzling Definition of “Investment” in International Investment Law’ (2015) 30 ICSID Rev 549; Kei Nakajima, ‘Parallel Universes of Investment Protection? A Divergent Finding on the Definition of Investment in the ICSID Arbitration on Greek Sovereign Debts’ (2016) 15 LPICT 472; Anna O Mitsou, ‘Greek Debt Restructuring and Investment Treaty Arbitration: Jurisdictional Stumbling Blocks for Bondholders’ (2016) 33 J Int’l Arb 687; Pietro Ortolani, ‘Are Bondholders Investors? Sovereign Debt and Investment Arbitration after Poštová’ (2017) 30 Leiden JIL 383. 488 See Poštová banka v Greece, Award (9 April 2015) paras 361–365. 489 ibid para 370. 490 For further discussion, see Maximilian Clasmeier, Arbitral Awards as Investments: Treaty Interpretation and Dynamics of International Investment Law (Wolters Kluwer 2017); Andrea K Bjorklund, ‘The Use of Investor–State Arbitration as a de facto Enforcement Mechanism for Arbitral Awards’ in Stavros Brekoulakis, Julian DM Lew and Loukas Mistelis (eds), The Evolution and Future of International Arbitration (Wolters Kluwer 2016) 97; Loukas Mistelis, ‘Award as an Investment: The Value of an Arbitral Award or the Cost of Non-Enforcement’ (2013) 28 ICSID Rev 64. 491 ATA Construction v Jordan, Award (18 May 2010) para 117. See also Anglia Auto v Czech Republic (SCC), Final Award (10 March 2017) paras 151–153. 492 See Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) para 211; FPS v Czech Republic (UNCITRAL), Final Award (12 November 2010) para 231; White Industries v India (UNCITRAL), Final Award (30 November 2011) paras 7.6.1–7.6.10.

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114. However, . . . the notion of investment pursuant to Article 25 of the ICSID must be understood as covering all the elements of the operation, that is not only the ICC Arbitration, but also inter alia the Contract, the construction itself . . .493

In GEA Group v Ukraine, the Tribunal emphasized the conceptual difference between an arbitral award and the underlying operation and declined to view it as part of the investor’s operation as a whole (see also paras. 148–149 supra):

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Even if – arguendo – the Settlement Agreement and Repayment Agreement could somehow be characterised as ‘investments,’ or the ICC Award could be characterised as directly arising out of the Conversion Contract or the Products, the Tribunal considers that the fact that the Award rules upon rights and obligations arising out of an investment does not equate the Award with the investment itself. In the Tribunal’s view, the two remain analytically distinct, and the Award itself involves no contribution to, or relevant economic activity within, Ukraine such as to fall – itself – within the scope of Article 1(1) of the BIT or (if needed) Article 25 of the ICSID Convention.494

5. Forms of Making an Investment Not only certain types of investments, but also certain forms of making investments have given rise to debate as to whether they qualify as investments in the sense of Art. 25(1) of the Convention. This is particularly the case if the form of making the investment departs from the archetypical greenfield investment directly made by the foreign national in the host State. In this context, issues surrounding split ownership structures (see paras. 307–320 infra), splits between ownership and control (see paras. 321–330 infra), coverage of indirect investments (see paras. 331–361 infra), the distinction between passive and active investments (see paras. 362–368 infra), and certain modes of acquisition, namely succession and assignment (see paras. 369–380 infra), have given rise to debate in ICSID practice.

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a) Split Ownership Structures In many cases, ownership and control of the rights and assets that form an investment run in parallel and vest in the same person. There are, however, also situations in which ownership and control are split, or different forms of ownership vest in different persons, such as a separation between nominal title and beneficial ownership. In such cases, the question arises whether only the nominal owner of the asset in question, only its controller or beneficial owner, or both (either jointly or separately) can be considered to hold an investment in the sense of Art. 25(1). Art. 25(1) of the Convention itself does not contain any qualification as to what forms of holding an investment are covered by the term ‘investment.’ It only requires that the investment is the investment of the foreign national involved in the dispute, not the

493 Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 113–114. See also ibid para 127 (concluding that ‘[t]he ICC Award crystallized the parties’ rights and obligations under the original contract. It can thus be left open whether the Award itself qualifies as an investment, since the contract rights which are crystallized by the Award constitute an investment within Article 1(1)(c) of the BIT’). For a similar approach, see Gavazzi v Romania, Decision on Jurisdiction, Admissibility and Liability (21 April 2015) paras 118–120. 494 GEA Group v Ukraine, Award (31 March 2011) para 162.

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investment of a third party (see also paras. 659–678 infra).495 Arbitral tribunals have not been fully consistent in their treatment of split ownership structures. Concerning purely nominal ownership, they have offered somewhat diverging solutions (see paras. 309–315 infra). By contrast, they have consistently recognized beneficial ownership as a form of holding an investment that can be subjected to the Centre’s jurisdiction (see paras. 316–320 infra). 309

(i) Nominal Ownership In Sabes Fakes v Turkey, the Tribunal, in a dispute under the Netherlands–Turkey BIT, was faced with a situation in which the Claimant allegedly had acquired legal title to the shares in a locally incorporated company, but held those shares beneficially for a third person.496 While finding on the facts that the Claimant had not acquired legal title to the shares, the Tribunal did not take issue with the mere holding of title to the benefit of a third party as satisfying the definition of investment in Art. 25(1). It observed that the division of property rights amongst several persons or the separation of legal and beneficial ownership is commonly accepted in a number of legal systems, be it through a trust, a fiducie or any other similar structure. Such structures are in no way indicative of a sham or a fraudulent conveyance, and no such presumption should be entertained without convincing evidence to the contrary. The separation of legal title and beneficial ownership rights does not deprive such ownership of the characteristics of an investment within the meaning of the ICSID Convention or the Netherlands– Turkey BIT. Neither the ICSID Convention, nor the BIT make any distinction which could be interpreted as an exclusion of a bare legal title from the scope of the ICSID Convention or from the protection of the BIT.497

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In several other cases, ICSID tribunals confirmed that the holding of an investment is sufficient for qualifying as an investment under Art. 25(1) of the Convention even if the holder of the investment does not reap the benefits of the investment. This is above all the case with respect to corporate investors who may hold an investment for the benefit of their shareholders (see paras. 284–290, 331–361 infra).498 At the same time, some tribunals deny that the passive holding of shares is sufficient, requiring instead an active investment (see paras. 362–368 infra). By contrast, the ad hoc Committee in Occidental v Ecuador concluded that nominal title held to the benefit of a third party was insufficient for qualifying as an

495 In this sense also Douglas (n 444) 248–249; KT Asia v Kazakhstan, Award (17 October 2013) paras 188–206; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 231, 254; Capital Financial Holdings v Cameroon, Award (22 June 2017) paras 423, 428; Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) paras 299, 338–344. 496 Saba Fakes v Turkey, Award (14 July 2010) para 133. 497 ibid para 134. See also the obiter in CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 32 (stating that the ‘absence of beneficial ownership by a claimant in a claim or the transfer of the economic risk in the outcome of a dispute should not and has not been deemed to affect the standing of a claimant in an ICSID proceeding’). 498 See also Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 107. For nonICSID cases accepting that nominal title is sufficient, see also Société Générale v Dominican Republic (UNCITRAL), Award on Jurisdiction (19 September 2008) para 48; Veteran Petroleum v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) para 477.

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investment.499 It found that one of the Claimants had ‘farmed out’ to a third-country investor 40 percent of its position in a contract concerning the production of crude oil, which it had concluded with the Respondent’s national oil company, thus resulting in ownership title being partially split between a nominee and a beneficial owner.500 In the ad hoc Committee’s view, awarding compensation to the nominee for 100 percent of the contract, as the majority of the Tribunal did,501 constituted a manifest excess of powers by the Tribunal. Endorsing the position taken by one of the arbitrators in the case,502 the ad hoc Committee concluded: In cases where legal title is split between a nominee and a beneficial owner international law is uncontroversial: as Arbitrator Stern has stated in her Dissent the dominant position in international law grants standing and relief to the owner of the beneficial interest – not to the nominee.503

The ad hoc Committee in Occidental v Ecuador also connected its position on the exclusion of nominal title from qualifying as an investment to the limitations endorsed by many tribunals concerning derivative and representative claims (see paras. 659–678 infra). In the ad hoc Committee’s view,

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[t]he position as regards beneficial ownership is a reflection of a more general principle of international investment law: claimants are only permitted to submit their own claims, held for their own benefit, not those held (be it as nominees, agents or otherwise) on behalf of third parties not protected by the relevant treaty. And tribunals exceed their jurisdiction if they grant compensation to third parties whose investments are not entitled to protection under the relevant instrument.504

A similar position was taken by the Tribunal in Blue Bank v Venezuela, in a dispute under the Barbados–Venezuela BIT, which involved a Claimant that was engaged, inter alia, in the administration and management of trust assets.505 Blue Bank had been appointed as trustee of the Qatar Trust, a trust established under the laws of Barbados, to administer and manage the Trust’s assets; these included the shareholding in two companies established in the British Virgin Islands, which, in turn, were indirect

499 500 501 502 503

Occidental v Ecuador, Decision on Annulment (2 November 2015) paras 202–291. ibid para 203. See Occidental v Ecuador, Award (5 October 2012) paras 649–658. See ibid, Dissenting Opinion Stern (20 September 2012) paras 133–165. Occidental v Ecuador, Decision on Annulment (2 November 2015) para 259 (relying on David J Bederman, ‘Beneficial Ownership of International Claims’ (1989) 38 ICLQ 935, 936; Francisco Orrego Vicuña, ‘Changing Approaches to the Nationality of Claims in the Context of Diplomatic Protection’ (2000) 15 ICSID Rev 340, 352; Marjorie M Whiteman, Digest of International Law vol 8 (US Government Printing Office 1967) 1261; David J Bederman, ‘Eligible Claimants before the Iran– United States Claims Tribunal’ in Richard B Lillich and Daniel B Magraw (eds), The Iran–United States Claims Tribunal: Its Contribution to the Law of State Responsibility (Transnational Pub 1998) 47, 105. In addition, the ad hoc Committee invoked Occidental v Ecuador, Decision on Annulment (2 November 2015) paras 273–281. 504 Occidental v Ecuador, Decision on Annulment (2 November 2015) para 262. For discussion of precedent, see ibid paras 273–281 (invoking Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 146–151; PSEG v Turkey, Award (19 January 2007) para 325; Mihaly v Sri Lanka, Award (15 March 2002) para 24; and Binder-Haas Claim, United States, Foreign Claims Settlement Commission, Decision (26 November 1954) (1957) 20 ILR 236–238). 505 See Blue Bank v Venezuela, Award (26 April 2017) paras 46–47.

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shareholders in two Venezuelan companies whose business the Respondent had allegedly destroyed. The Respondent objected that the Tribunal lacked jurisdiction, inter alia, because the Claimant did not qualify as an investor under the BIT; instead, it was Qatar Trust that owned the investment, not the Claimant.506 The Claimant disagreed, maintaining that it qualified as an investor and had made an investment in the sense of both the BIT and Art. 25(1) of the Convention.507 The Tribunal declined jurisdiction, concluding that the Claimant’s holding of assets in trust for the beneficiaries of the Qatar Trust did not qualify as an investment in the sense of the BIT. The Tribunal found that the legal nature of trusts and the position of trustees under the laws of Barbados was such that the Claimant ‘[i]n actual fact and law . . . is not an owner in any relevant sense of the word.’508 The Claimant did ‘not own the assets, but simply manages and administers them for a particular purpose . . . or to the benefit of a third party.’509 Consequently, ‘by acting in its capacity as a trustee, the Claimant cannot be considered as having committed any assets in its own rights, as having incurred any risk, or as sharing the loss and profit resulting from the investment.’510 Although the pronouncements in Saba Fakes and Occidental appear to be contradictory, they may be reconciled if one views Saba Fakes as an expression of the rule that Art. 25(1) of the ICSID Convention does not contain a general limitation on the standing of nominal owners, but that, in order for such an owner to bring a claim, the host State’s consent is required. This consent was arguably missing in Occidental. Alternatively, Occidental could be interpreted as concerning the scope of substantive protections of nominal owners only. After all, it seems clear that, on substance, a claimant can only bring claims for breach of his or her own rights and ask for compensation of his or her own damages, rather than vindicate the rights of third parties to compensation. (ii) Beneficial Ownership

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As regards the protection of beneficial owners, arbitral jurisprudence has so far been consistent in accepting it as a form of investment that is covered by Art. 25(1) of the Convention. While denying protection to the nominee, the ad hoc Committee in Occidental v Ecuador emphasized that beneficial ownership itself would qualify as an investment. It stated: A final caveat: neither the international law principles nor the Committee’s decision imply that investors holding beneficial ownership are left unprotected from interferences by host States. Such investors will enjoy the protection granted under the treaties which benefit their nationality.511

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Similarly, the Tribunal in Blue Bank v Venezuela pointed out that, in the case at hand, it was not the trustee, but rather the beneficiary of the trust that ‘would come closest to satisfying the requirements of “ownership” with regard to the assets of the Qatar Trust’ 506 508 510 511

ibid paras 51(b), 121–125. 507 ibid paras 55–56, 126–133. ibid para 168. 509 ibid para 163. ibid. Occidental v Ecuador, Decision on Annulment (2 November 2015) para 272. See also Perenco v Ecuador, Decision on Remaining Issues of Jurisdiction and on Liability (12 September 2014) paras 522–523.

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as it ‘enjoys ultimate control over the trust assets and . . . will ultimately enjoy or suffer, as the case may be, the fortunes of the trust assets.’512 The Tribunal refrained, however, from making any statements on the position of trusts or trustees under Art. 25(1) (see also paras. 313–314 supra). That beneficial ownership qualifies as an investment follows State practice in the law of diplomatic protection513 and is also reflected in other decisions by ICSID tribunals.514 In Abaclat and others v Argentina, the Tribunal concluded that the Claimants who had not directly acquired bonds issued by Argentina, but rather ‘security entitlements’ in those bonds issued by Italian banks acting as intermediaries, had made an investment in the sense of Art. 25(1) of the Convention:

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With regard to Respondent’s objection as to the quality of investors of Claimants, it is based on the allegedly remote connection between the security entitlements and the original underwriters and underlying bonds. This objection has to be rejected for the Tribunal has come to the conclusion, in the preceding section . . . that not only the bonds themselves, but also any security entitlement held in those bonds and distributed by the Participants and other Intermediaries to Claimants constitute an investment in the sense of Article 1 BIT and Article 25 ICSID Convention.515

Similarly, the Tribunal in Ambiente Ufficio and others v Argentina stated concerning the same underlying ownership structure:

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[T]he Respondent has contended that the Claimants do not have locus standi since in their capacity as holders of security entitlements acquired through multiple intermediaries they are only remotely connected with the underwriters and the underlying bonds . . . In view of the fact that the issuance and the circulation of the bonds/security entitlements in the present case must be regarded as an economic unity, there is neither too remote a relation between the Claimants and Argentina nor does there exist, in the light of the numerous intermediaries involved, any ‘cut-off point’ beyond which the Claimants could not rely on the bonds/security entitlements vis-à-vis the Respondent.516

In Kim and others v Uzbekistan, a dispute under the Kazakhstan–Uzbekistan BIT which involved ownership interests in two companies incorporated in Uzbekistan that in parts relied on the existence of an oral trust to the benefit of the Claimants, the Tribunal also stated that it was immaterial for the determination of jurisdiction ‘that certain aspects of the ownership holding structure entail a beneficial, rather than a legal, ownership.’517 In Adamakopoulos and others v Cyprus, the Tribunal confirmed that

512 Blue Bank v Venezuela, Award (26 April 2017) para 170. For further discussion of the role of trusts in investment arbitration, see Hanno Wehland, ‘Blue Bank International v Venezuela: When Are Trust Assets Protected under International Investment Agreements?’ (2017) 34 J Int’l Arb 947; Odysseas G Repousis, ‘The Use of Trusts in Investment Arbitration’ (2018) 34 Arb Int’l 261. 513 See Bederman (n 503). 514 See also Société Générale v Dominican Republic (UNCITRAL), Award on Jurisdiction (19 September 2008) para 48. For a discussion of the treatment of beneficial ownership by the Iran–United States Claims Tribunal, see Saghi v Iran (1993) 29 Iran–USCTR 20, paras 18–26. 515 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 411. 516 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 327. 517 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 11, 320. See also AlBahloul v Tajikistan (SCC), Partial Award on Jurisdiction and Liability (2 September 2009) paras 141–146 (accepting that the Claimant made an investment in two locally incorporated companies via an

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schreuer’s commentary on the icsid convention [b]eneficial ownership is a form of legal interest widely recognized by the principal legal systems of the world and by international law. For the purpose of establishing the Tribunal’s jurisdiction, it is sufficient for the relevant Claimant or Claimants to assert and provide prima facie evidence of such a beneficial interest.518

b) Split between Ownership and Control 321

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Several investment treaties explicitly provide that either ownership or control is sufficient in order for an asset to qualify as an investment.519 Art. 1(6) of the ECT, for example, provides that ‘“[i]nvestment” means every kind of asset, owned or controlled directly or indirectly by an [i]nvestor . . .’520 In such cases, ownership and control are clear alternatives and only one must be met in order for the foreign national’s interest in the asset to be protected as an investment.521 While control is often the consequence of sole or majority ownership of an investment, ownership is not the only determining factor for control. The ordinary meaning of the word also encompasses other factors, such as special voting rights and powers of operation and management, often conferred through contractual arrangements.522 Provided the other requirements for the jurisdiction of the Centre under Art. 25(1) are met, the Convention accepts control as a form of holding an investment. In the practice of investment tribunals, the question of control has arisen in several contexts. One such context is Art. 25(2)(b) of the ICSID Convention, which provides that the parties may agree to treat a company that has the host State’s nationality as a foreign investor because of foreign control (for further discussion, see paras. 1262–1445 infra). As stressed by the Tribunal in United Utilities v Estonia in the context of Art. 25(2)(b), ‘control is a flexible concept, which can only be determined case by case in the light of the particular facts.’523 While it can be grounded on formal, legal control through ownership (see paras. 309–320 supra), it can also derive from other factors, such as operational management and technical expertise.524 Thus, the United Utilities tribunal accepted that the first Claimant, the Netherlands incorporated company UUTBV, de

518 519 520

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intermediary company incorporated in the Bahamas of which he held directly 4,999 shares, while one share was held in trust for his benefit). Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) para 285. For further discussion, see also Douglas (n 444) 299–308. Similar formulations can be found in the US Model BIT (2012) Art. 1 (defining ‘investment’ as ‘every asset that an investor owns or controls, directly or indirectly . . .’) and NAFTA (n 32) Art. 1139 (defining ‘investment of an investor of a Party’ as meaning ‘an investment owned or controlled directly or indirectly by an investor of such Party’). Cf Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 170 (concerning the interpretation of the ECT’s denial-of-benefits clause that requires, in parallel to the ECT’s definition of ‘investment,’ ownership or control by third-country nationals, among others, to be triggered). See Garner (n 12) 403 (defining ‘control’ as ‘[t]he direct or indirect power to govern the management and policies of a person or entity, whether through ownership of voting securities, by contract, or otherwise; the power or authority to manage, direct or oversee . . .’); Shorter Oxford Dictionary (6th edn, OUP 2007) 510 (defining ‘control’ as ‘[t]he act or power of directing or regulating; command, regulating influence’). United Utilities v Estonia, Award (21 June 2019) para 366. See also Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Jurisdiction (19 December 2005) para 40.

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facto controlled the second Claimant, ASTV, a company incorporated in Estonia, although it only held 35.3 percent of its ordinary shares.525 As the Tribunal stated, UUTBV effectively enjoyed dominant influence over the Supervisory Council pursuant to the voting convention agreed pursuant to the Shareholders’ Agreement. Even if after the IPO these rights did not grant UUTBV a majority of appointees to the Supervisory Council, the evidence is that UUTBV was at all times the party directing and driving the Supervisory Council’s activities and decisions. This is manifest not only from the fact of UUTBV’s special management and technical expertise, the exercise of which was the raison d’être of ASTV’s privatisation, but also from the uncontradicted evidence concerning the dominant role played by ASTV’s CEO, a UUTBV appointee, in the management of ASTV’s affairs.526

Another context in which the meaning of control has played a role are clauses in investment treaties, such as Art. 1117 of the NAFTA, that provide that an investor may submit to arbitration claims on behalf of an enterprise that it ‘owns or controls.’ In this respect, tribunals have accepted not only formal, legal control based on ownership, but also de facto control.527 As the Tribunal in Thunderbird v Mexico stated:

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Interpreted in accordance with its ordinary meaning, control can be exercised in various manners. Therefore, a showing of effective or ‘de facto’ control is, in the Tribunal’s view, sufficient for the purposes of Article 1117 of the NAFTA. In the absence of legal control however, the Tribunal is of the opinion that de facto control must be established beyond any reasonable doubt.528

The Tribunal found that, in the case at hand, there was sufficient evidence of de facto control by the Claimant over several companies, even though it only owned a minority of the shares, because it had the ability to exercise significant influence on the companies’ decision-making and had been the consistent driving force behind the business endeavor of the companies in the host State.529 As the Tribunal stated,

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[i]t is quite common in the international corporate world to control a business activity without owning the majority voting rights in shareholders meetings. Control can also be achieved by the power to effectively decide and implement the key decisions of the business activity of an enterprise and, under certain circumstances, control can be achieved by the existence of one or more factors such as technology, access to supplies, access to markets, access to capital, know how, and authoritative reputation.530

Furthermore, denial-of-benefits clauses may involve determinations on the concept of control. In interpreting the denial-of-benefits clause in Art. 17 of the ECT, under which the ECT’s Contracting Parties reserve their right to deny the advantages of the treaty’s investment provisions to ‘a legal entity if citizens or nationals of a third state own or control such entity,’ the Tribunal in Plama v Bulgaria adopted a wide understanding of

525 526 527 528 529

United Utilities v Estonia, Award (21 June 2019) (2011) 26 ICSID Rev 173, 179, para 396. ibid para 416. Similarly B-Mex and others v Mexico (AF), Partial Award (19 July 2019) paras 205, 234, 239. Thunderbird v Mexico (UNCITRAL), Award (26 January 2006) para 106 (internal reference omitted). ibid para 107. 530 ibid para 108.

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the concept of control as encompassing ‘control in fact, including an ability to exercise substantial influence over the legal entity’s management, operation and the selection of members of its board of directors or any other managing body.’531 Finally, in a few cases, provisions in investment treaties, which contain definitions of investment that refer to assets being owned or controlled by an investor, addressed the concept of control.532 In Awdi v Romania, a dispute under the Romania–United States BIT, which covered ‘investments’ ‘owned or controlled directly or indirectly by nationals or companies of the other Party,’ the Tribunal found that control could be exercised de facto by minority shareholders whenever they ‘dominated the company decision-making structure.’533 In von Pezold and others v Zimbabwe, the Tribunal confirmed that ‘[c]ontrol of a company may be factual or effective (“de facto”) as well as legal.’534 It found that the Claimants exercised control over one set of locally incorporated companies, the Makandi companies, even though they possessed only a minority shareholding, through a management agreement that ‘gave Heinrich [i.e. one of the Claimants], acting on behalf of the von Pezold Claimants, de facto control over the Makandi Companies.’535 In Italba v Uruguay, the Tribunal was faced with a claim under the United States– Uruguay BIT by a US company that claimed to have made an investment, inter alia, because of its control of Trigosul, a company incorporated in the host State, which the Tribunal found was formally owned by an Italian national, Dr. Alberelli.536 The Tribunal pointed out that ‘determinations as to whether an investor controls an enterprise will involve factual situations that must be evaluated on a case-by-case basis.’537 The Tribunal took into account various factors, including the Claimant’s submission that it had made business decisions for Trigosul, had contributed the majority of its share capital, had funded its operations, and had represented to third parties that it was the owner of Trigosul.538 The Tribunal concluded, however, that the Claimant did not control Trigosul for the purposes of the BIT and Art. 25 of the Convention, but that it was the Italian shareholder of Trigosul who exercised control, thus resulting in a lack of jurisdiction.539 Overall, the case law on these various provisions dealing with the concept of control demonstrates that arbitral tribunals have shown a high degree of flexibility. In order to determine control, they have, in addition to formal ownership, looked at criteria such as powers of management and operation of the investment, as well as expertise. What matters to establish control are not formal parameters, like the existence or amount of ownership, but the actual ability to direct the action of the controlled investment.

531 Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 170. 532 For discussion of an investment treaty that required a substantial interest in a company in order to exercise control, see Philip Morris v Australia (UNCITRAL), Award on Jurisdiction and Admissibility (17 December 2015) paras 497–505. 533 Awdi v Romania, Award (23 March 2015) para 166 (quoting LETCO v Liberia, Award (31 March 1986) 4). 534 von Pezold and others v Zimbabwe, Award (28 July 2015) para 324. 535 ibid. 536 For the factual background and the position of the parties, see Italba v Uruguay, Award (22 March 2019) paras 75–128. 537 ibid para 254. 538 See ibid paras 255–265. 539 ibid para 285.

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c) Indirect Investments Another form of holding an investment that departs from the archetypical greenfield investment, and has given rise to debate in respect of the jurisdiction of the Centre, is indirect investments. As the Tribunal in RREEF v Spain explained:

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The very concept of an indirect investor and an indirect investment contains within it the concept that there will be a chain of ownership and control that involve[s] more than one entity. Otherwise, there could be no investment that is indirectly owned or controlled. The very concept of indirect ownership or control presupposes that there is interposed between a claimant that is an indirect owner or controller and the investment one or more other owners and controllers through which the claimant owns or controls the investment.540

Several investment treaties expressly encompass indirect investments as investments (see paras. 215, 220 supra); others exclude them, whether explicitly or by implication; and again other treaties are silent on this issue. Art. 25(1) of the Convention, in turn, does not further define whether it covers both directly and indirectly held investments. Its reference to disputes arising directly out of investment cannot be understood as a limitation to directly held investments, as the directness requirement concerns the relationship between the dispute and the investment, not the form of holding the investment (see paras. 120–126 supra). ICSID tribunals have generally accepted that the notion of investment in Art. 25(1) encompasses both direct and indirect investments. Arbitral practice to this effect has developed virtually exclusively in relation to shareholdings. Shareholdings raise two issues in respect of the protection of indirect investments: first, whether indirect shareholdings themselves qualify as investments (see paras. 334–342 infra) and, second, whether a shareholding is a form of making an indirect investment in the assets of the company of which the foreign national holds shares (see paras. 343–361 infra).

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(i) Indirect Shareholdings as Investments Provided they are also covered by the disputing parties’ consent,541 ICSID tribunals have recognized in a large number of cases that not only direct shareholdings in locally incorporated companies qualify as investments under Art. 25(1), but also indirect shareholdings in such companies that are held by the foreign national through a third, intermediary company.542 In some of these cases, the definition of ‘investments’ in the applicable BIT contained a reference to direct or indirect investments;543 in other cases, 540 RREEF v Spain, Award (11 December 2019) para 142. 541 This is not the case, eg, if a BIT that contains the host State’s consent excludes, either expressly or by implication, the protection of indirect shareholdings. See eg Berschader v Russia (SCC), Award (21 April 2006) paras 121–150; HICEE v Slovakia (UNCITRAL), Partial Award (23 May 2011) paras 102–147. 542 Note, in this context, also the discussion on the requirement that an investment must have been made actively, which some tribunals have applied to exclude indirect investments from access to the Centre. See paras 362–368 infra. 543 See eg Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 21, 22, 59–74; Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 42–57 and ibid, Decision on Annulment (30 July 2010) paras 115–127; Waste Management v Mexico II (AF), Award (30 April 2004) paras 77–85; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 9, 19–44; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 70–83; Arif v Moldova, Award (8 April 2013) paras 377–380. For non-ICSID cases, see eg Lauder v Czech Republic (UNCITRAL), Award

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the applicable BITs did not contain such a reference.544 Indirect shareholdings may take place in different ways, depending on where the intermediary company is located, whether in the foreign national’s home jurisdiction, in the host State, or in a third country. As for investments made through companies registered in the investor’s home State, which are not themselves parties to ICSID proceedings, ICSID tribunals have consistently accepted that the Centre had jurisdiction for settling resulting disputes. In Siemens v Argentina, the German Claimant indirectly controlled SITS, a corporation registered in Argentina, through its German affiliate SNI.545 Argentina objected that Siemens was merely bringing indirect claims for damage suffered by a company in which it held shares.546 The Tribunal rejected the idea that the Claimant needed to be the immediate owner of the local company and noted: The Tribunal observes that there is no explicit reference to direct or indirect investment as such in the Treaty. The definition of ‘investment’ is very broad. . . . The drafters were careful to use the words ‘not exclusively’ before listing the categories of ‘particularly’ included investments. One of the categories consists of ‘shares, rights of participation in companies and other types of participation in companies’. The plain meaning of this provision is that shares held by a German shareholder are protected under the Treaty. The Treaty does not require that there be no interposed companies between the investment and the ultimate owner of the company. Therefore, a literal reading of the Treaty does not support the allegation that the definition of investment excludes indirect investments.547

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In other cases, the intermediary company was set up in the host State. Here as well, ICSID tribunals have accepted that investments held through such companies qualified as investments both under applicable BITs and Art. 25(1) of the Convention. In Casinos Austria v Argentina, for example, the Claimants held shareholdings in ENJASA, a locally incorporated company that was engaged in gaming and lottery activities in the

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(3 September 2001) paras 77, 120, 153, 154; Société Générale v Dominican Republic, (UNCITRAL), Award on Jurisdiction (19 September 2008) paras 37, 45–52, 113–121. See eg Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 138–144; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 9, 10, 32–35; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) paras 121–124; Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 80, 91–111; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 109–112; Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 162–166; CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 141–158; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 235–254; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 229–235. For non-ICSID cases to this effect, see eg Bahgat v Egypt (UNCITRAL), Award (23 December 2019) paras 195–199; Lee-Chin v Dominican Republic (UNCITRAL), Award on Jurisdiction (15 July 2020) paras 210–219; Cairn Energy v India (UNCITRAL), Award (21 December 2020) paras 715–729. Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 23. ibid paras 123, 125–127. ibid para 137 (internal reference omitted). For further cases involving the acceptance of indirect investments in companies through intermediaries established in the Claimant’s home State, see CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 19, 149–158; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 4, 207, 229–232; Awdi v Romania, Award (2 March 2015) para 201. Cf also Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 49, 186, 193 (where the indirect shareholding of one Claimant through an intermediary company set up in the home State was not further problematized).

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Argentine Province of Salta through another Argentine company called L&E.548 The Tribunal concluded that the ‘Claimants’ involvement in the operation of gaming and lottery activities in Salta through their participation in L&E and, indirectly, in ENJASA also qualifies as an “investment” in the sense of Article 25(1) of the ICSID Convention.’549 In a further group of cases, ICSID tribunals were faced with intermediaries established in a third country. Here, as well, tribunals have widely accepted that shareholdings held indirectly through such companies qualified as investments under applicable BITs and Art. 25(1) of the Convention.550 For example, in Kardassopoulos v Georgia, the Greek Claimant held half of the shares of a company registered in Panama, which, in turn, was a partner to a joint venture registered in Georgia.551 Noting that the definition of ‘investment’ in the Georgia–Greece BIT was silent on whether the shareholding had to be direct, the Tribunal agreed with the reasoning in Siemens v Argentina552 and concluded that ‘the indirect ownership of shares by Claimant constitutes an “investment” under the BIT and the ECT,’ the breach of which was invoked by the Claimant.553 Similarly, in Noble Energy v Ecuador, MachalaPower, a company incorporated in the Cayman Islands that was the holder of a concession granted by the host State, was indirectly owned by Noble Energy through two levels of intermediaries registered in the Cayman Islands and in Delaware respectively.554 Ecuador contended that Noble Energy could not bring the claim because it did not make the investment itself and because Art. 25 of the ICSID Convention did not allow a ‘grandparent company’ to bring a claim.555 The applicable Ecuador–United States BIT did refer to direct or indirect control, but the reasoning of the Tribunal contains no indication that this reference made any difference to

548 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 49. 549 ibid para 186. For further cases involving the acceptance of indirect investments in companies through intermediaries established in the host State, see Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 39. Similarly, Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 63 ff; Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) paras 29 ff; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 80 ff; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 54 ff; Camuzzi v Argentina II, Decision on Jurisdiction (10 June 2005) para 34; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 29, 235–254; Awdi v Romania, Award (2 March 2015) para 201. 550 For further cases, see African Holding v DR Congo, Award (29 July 2008) paras 85–104; Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 106–107; CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 19, 149–158; Mobil v Venezuela, Decision on Jurisdiction (10 June 10) paras 162–165; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 317–322 (investment through third State intermediary); Orascom v Algeria, Award (31 May 2017) paras 374–385; Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) para 284. For non-ICSID cases, see also Sedelmayer v Russia (SCC), Arbitration Award (7 July 1998) s V.2.1.5; Lauder v Czech Republic (UNCITRAL), Final Award (3 September 2001) paras 77, 120, 153, 154; Waste Management v Mexico II (AF), Award (30 April 2004) paras 80, 85; Guaracachi v Bolivia (UNCITRAL), Award (31 January 2014) paras 361–362; Al-Warraq v Indonesia (UNCITRAL), Final Award (15 December 2014) paras 511, 517; Deutsche Telekom v India (UNCITRAL), Interim Award (13 December 2017) para 142; South American Silver v Bolivia (UNCITRAL), Award (22 November 2018) paras 282–310; Anglo American v Venezuela (AF), Award (18 January 2019) paras 188–204; Cairn Energy v India (UNCITRAL), Award (21 December 2020) paras 715–729. 551 Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 20. 552 ibid para 123 (quoting Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 137). 553 ibid 124. 554 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 80. 555 ibid para 71.

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its decision. Following previously decided cases, without discussing differences between BITs that do refer to ‘direct or indirect’ investments and those that do not, the Tribunal accepted that Noble Energy had standing under the ICSID Convention and the BIT as indirect shareholder of MachalaPower.556 It reasoned: The Tribunal concurs with previous tribunals that have held that an indirect shareholder can bring a claim under the ICSID Convention and under a BIT in respect of a direct and an indirect investment. Failing any contrary wording, the BIT and the ICSID Convention encompass actions of indirect shareholders for their damages.557

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Some tribunals have expressed concern about how many intermediary corporate layers an indirect investment could have before it stopped being protected.558 The Tribunal in Enron v Argentina noted in this respect: 50. . . . if minority shareholders can claim independently from the affected corporation, this could trigger an endless chain of claims, as any shareholder making an investment in a company that makes an investment in another company, and so on, could invoke a direct right of action for measures effecting a corporation at the end of the chain. . . . 52. The Tribunal notes that while investors can claim in their own right under the provisions of the treaty, there is indeed a need to establish a cut-off point beyond which claims would not be permissible as they would have only a remote connection to the affected company. . . .559

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On the facts, the Enron tribunal concluded, however, that the Claimants were not ‘only remotely connected to the legal arrangements governing the privatization, they are beyond any doubt the owners of the investment made and their rights are protected under the Treaty . . .’560 Similarly, the Tribunal in Noble Energy v Ecuador addressed the question how far an indirect shareholding may be traced to still qualify for protection, but concluded that the cut-off point, whatever it may be, is not reached with two intermediate layers. The relationship between the investment and the direct shareholder, on the one hand, and the indirect shareholder, on the other, is not too remote.561

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Other tribunals cast into doubt that a cut-off point could be introduced at all to exclude certain indirect investments from access to the Centre under a test of remoteness. The Tribunal in Kim and others v Uzbekistan concluded, in a dispute under the Kazakhstan–Uzbekistan BIT that involved multi-layered structures of ownership and control through shareholdings and a trust: The Tribunal concludes that there is no basis – in the BIT or in the authorities to which the Parties make reference – to read a ‘remoteness’ test into the definition of ‘investor’. Indeed, Respondent does not offer any specificity as to what such a requirement would 556 ibid para 83. 557 ibid para 77. 558 See also African Holding v DR Congo, Award (29 July 2008) para 100; Phoenix Action v Czech Republic, Award (15 April 2009) para 122; Société Générale v Dominican Republic (UNCITRAL), Award on Jurisdiction (19 September 2008) paras 17–19. 559 Enron v Argentina, Decision on Jurisdiction (14 January 2014) paras 50, 52. 560 ibid para 56. 561 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 82.

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entail. The Tribunal does not accept that Claimants were unaware of their investment. The Tribunal also does not consider Claimants’ complex corporate structure to be sufficient, of itself, to render the BIT not applicable. Furthermore, the Tribunal does not consider the fact that certain aspects of the ownership holding structure entail a beneficial, rather than a legal, ownership, to be material to the jurisdictional issue.562

Overall, there is ample authority for the proposition that indirect shareholdings qualify as investments under many BITs, independently of whether the coverage of such indirect investments is expressly mentioned in the consent instrument and independently where the intermediary company is located. Similarly, indirect shareholdings are also accepted as investments in the sense of Art. 25(1) of the Convention. This allows foreign nationals to bring disputes to the Centre that arise out of their indirect investments in the host State. What exactly indirect shareholders can claim, is a matter of some controversy, and closely connected to the question, which is addressed in the next section (see paras. 343–361 infra), that is, whether a shareholding is a form of making an indirect investment in the assets of the company in which the foreign national holds shares. (ii) Company Assets as Indirect Investments The use of shareholdings also raises the question whether the assets of a company in which the foreign national holds shares qualify as the shareholder’s indirect investments, with the consequence that disputes relating to measures affecting the company’s assets could be brought by the shareholder-investor. If the rules on diplomatic protection were to apply mutatis mutandis before the Centre, such disputes would fall outside ICSID’s jurisdiction in light of the ‘firm distinction’ the ICJ drew in Barcelona Traction ‘between the separate entity of the company and that of the shareholder, each with a distinct set of rights.’563 Based on that distinction, the Court held that the entitlement of a State to grant diplomatic protection depended, in principle, on whether rights of the company or rights of the shareholders were affected and whether the requisite bond of nationality existed between the affected actor and the State espousing the claim. In case a State measure interfered directly with the rights of the shareholders, diplomatic protection could be granted by the shareholders’ home State; in case a State measure infringed the rights of the company, diplomatic protection could, in principle, only be granted by the company’s home State.564 This approach to diplomatic protection has not only been affirmed by the Court in the Diallo case,565 it has also been adopted by the International Law Commission in its 2006 Draft Articles on Diplomatic Protection.566

562 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) para 320. 563 Barcelona Traction, Light and Power Company, Ltd (Belgium v Spain) [1970] ICJ Rep 3, para 41. 564 See ibid paras 39–54. For exceptional cases in which a lifting of the corporate veil regarding the exercise of diplomatic protection was perceivable, see ibid paras 55–84. In the case at hand, the Court rejected the entitlement of Belgium to espouse a claim against Spain on behalf of Belgian nationals who suffered loss as shareholders in the Barcelona Traction, Light and Power Company, a company incorporated in Canada, when the company was declared bankrupt pursuant to bankruptcy proceedings in Spanish courts. 565 Ahmadou Sadio Diallo (Guinea v DR Congo) (Preliminary Objections) [2007] ICJ Rep 582, paras 49–96. 566 See ILC, ‘Draft Articles on Diplomatic Protection’ [2006] 2(2) YBILC 24, 25, Arts. 11, 12.

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The ICSID Convention, however, has departed from the rules of diplomatic protection concerning shareholder claims. Indeed, the ICJ itself had already indicated in Barcelona Traction and Diallo that its decisions were based on customary international law and that the protection of shareholders under bilateral and multilateral treaties may differ.567 Various ICSID tribunals thus have confirmed that: . . . Barcelona Traction and Diallo do not solidify any general principle of international law on shareholder rights that should be applied to the present dispute. Indeed, the Court has taken pains in both Barcelona Traction and Diallo to distinguish these cases from the situation in which an investment treaty regime would apply.568

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While it is clear that the strict distinction between the rights and interests of shareholders and of the company in which they hold shares plays no role for determining the Centre’s jurisdiction, the scope of the rights shareholders enjoy is less clear.569 Some tribunals consider that the shareholder’s protection extends beyond ownership rights in the shares and encompasses a right to be protected against action affecting the company’s assets. Other tribunals point out that the rights of foreign investors do not go beyond what could be derived from the shareholding. They deny an immediate right of shareholders to be protected against host State action affecting the assets of the companies that constitute the investment and limit shareholder-investors to claims for a reduction in share value. The first approach, which allows shareholders protection directly against host State measures affecting the company’s assets, can partly rely on express treaty provisions 567 Barcelona Traction, Light and Power Company, Ltd (Belgium v Spain) [1970] ICJ Rep 3, paras 89–90; Ahmadou Sadio Diallo (Guinea v DR Congo) (Preliminary Objections) [2007] ICJ Rep 582, paras 88–90. 568 Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 221. Similarly, CMS v Argentina, Decision on Jurisdiction (17 June 2003) paras 44–56; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 72; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) para 52; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 150–154; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 138–142; Camuzzi v Argentina II, Decision on Jurisdiction (10 June 2005) para 44; Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) para 83; El Paso v Argentina, Award (31 October 2011) para 203; Daimler v Argentina, Award (22 August 2012) para 90; Gosling and others v Mauritius, Award (18 February 2020) paras 138–139. See also GAMI v Mexico (UNCITRAL), Final Award (15 November 2004) para 30. 569 For further analysis, see Gabriel Bottini, ‘Indirect Claims under the ICSID Convention’ (2008) 29(3) U Pa JIL 563; Dolores Bentolila, ‘Shareholders’ Action to Claim for Indirect Damages in ICSID Arbitration’ (2010) 2(1) TLD 87; David Gaukrodger, ‘Investment Treaties as Corporate Law: Shareholder Claims and Issues of Consistency’ OECD Working Papers on International Investment 2013/03 (OECD 2013); David Gaukrodger, ‘Investment Treaties and Shareholder Claims for Reflective Loss: Insights from Advanced Systems of Corporate Law’ OECD Working Papers on International Investment 2014/02 (OECD 2014); Julien Chaisse and Lisa Zhuoyue Li, ‘Shareholder Protection Reloaded: Redesigning the Matrix of Shareholder Claims for Reflective Loss’ (2016) 52 Stanford JIL 51; Vera Korzun, ‘Shareholder Claims for Reflective Loss: How International Investment Law Changes Corporate Law and Governance’ (2018) 40 U Penn JIL 189; Julian Arato, ‘The Private Law Critique of International Investment Law’ (2019) 113 AJIL 1; Vanhonnaeker (n 444); Bottini (n 444). It is clear, however, that shareholder claims concern claims of the shareholder’s own rights, not claims on behalf of the company, or on behalf of the entirety of a company’s shareholders. See Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 254 (emphasizing that the Tribunal’s ‘jurisdiction is limited to claims brought by Claimants under the BIT for damage suffered by them arising from their investment in the form of shares in AGBA, the Tribunal does not have jurisdiction over any AGBA claims, any claims arising from damage suffered by AGBA, or any claims premised on damages suffered by other AGBA shareholders’).

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allowing for such protection. For example, Art. 13(3) of the ECT addressing the concept of expropriation states: For the avoidance of doubt, Expropriation shall include situations where a Contracting Party expropriates the assets of a company or enterprise in its Area in which an Investor of another Contracting Party has an Investment, including through the ownership of shares.

The introductory phrase ‘[f]or the avoidance of doubt’ may indicate that this approach is not peculiar to the ECT, but has more general validity. In fact, even without such a provision, numerous tribunals and ad hoc committees have upheld that shareholders can seek protection against host State conduct that affects the company without being limited to violations of their rights as shareholders in the company.570 The Tribunal in Teinver v Argentina also noted in relation to the jurisdiction of the Centre that ‘there is no evidence that the ICSID Convention’s drafters rejected the possibility of shareholders bringing “derivative” suits under the ICSID Convention,’571 that is, suits based on conduct taken in relation to the company’s assets. The ad hoc Committee in Azurix v Argentina, for example, had no doubt that, irrespective of the legal form of the investment, the beneficiary of an indirect investment had a commercial interest that was protected by a treaty and could therefore be pursued before the Centre.572 It stated: [T]he Committee considers that, even where a foreign investor is not the actual legal owner of the assets constituting an investment, or not an actual party to the contract giving rise to the contractual rights constituting an investment, that foreign investor may nonetheless have a financial or other commercial interest in that investment. This is so, irrespective of whether the actual legal owner of the assets or contractual rights constituting the investment is a wholly or partly owned subsidiary of the investor, or whether the actual legal owner is an unrelated third party. The Committee sees no reason in principle why an investment protection treaty cannot protect such an interest of a foreign investor, and enable the foreign investor to bring arbitration proceedings in respect of alleged violations of the treaty with respect to that interest. An investment 570 For further cases, see CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 59, 66–69 and ibid, Decision on Annulment (25 September 2007) paras 58–76; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 69, 73, Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 35–37, 43–49, 58–60 and ibid, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) paras 17, 34–35; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 125, 136–150; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 45–67; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 59–79; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 79; Total v Argentina, Decision on Jurisdiction (25 August 2006) para 74; Daimler v Argentina, Award (22 August 2012) paras 82–93; Arif v Moldova, Award (8 April 2013) para 380; Hochtief v Argentina, Decision on Liability (29 December 2014) paras 151, 153–174, 302–307; Bridgestone v Panama, Award (14 August 2020) paras 172–174. For non-ICSID cases to the same effect, see GAMI v Mexico (UNCITRAL), Final Award (15 November 2004) paras 26–33; Bogdanov, Agurdino-Invest and Agurdino-Chimia v Moldova (SCC), Award (22 September 2005) 18–19; RosInvest v Russia (SCC), Final Award (12 September 2010) para 608; Paushok v Mongolia (UNCITRAL), Award on Jurisdiction and Liability (28 April 2011) para 202; ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) paras 278–285; Anglo American v Venezuela (AF), Award (18 January 2019) paras 208–213; Strabag v Libya (AF), Award (29 June 2020) paras 125–136. 571 Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 223. 572 Azurix v Argentina, Decision on Annulment (1 September 2009) para 108.

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In Telefónica v Argentina, the Respondent argued that the Claimant had no standing to bring claims arising out of measures taken against TASA, a corporation under Argentine law that was owned by the Claimants.574 The Tribunal rejected this argument and pointed out that the operation of the local company was also protected. It found that: 76. . . . treaty protection is not limited to the free enjoyment of the shares, that is the exercise of the rights inherent in the position of a shareholder. It also extends to the standards of protection spelled out in the BIT with regard to the operation of the local company that constitutes the investment. . . . 81. . . . Telefónica’s rights are not limited to the mere title to the shareholding in TASA. Telefónica made the investment through TASA and not just in TASA. The Tribunal is thus competent to entertain claims that measures affecting the legal regime of TASA’s operations have breached Telefónica’s rights under the BIT.575

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In von Pezold and others v Zimbabwe, the Tribunal equally relied on the ‘principle – that where a company is controlled, legally or factually, by a certain shareholder or group of shareholders, the latter may be entitled to a direct claim in respect of the assets of the former.’576 On this basis, it upheld the Claimants’ right to bring claims in respect of the underlying assets held by the Zimbabwean Companies. The von Pezold Claimants’ ownership and control of the Zimbabwean Properties (and related assets) through an indirect corporate holding structure presents no bar to their claims for restitution and/or compensation for the loss suffered to those investments.577

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The Tribunal in Mera Investment v Serbia was also explicit in holding that a controlling shareholder’s rights extended to the rights held by the company through which it had made the investment, so that the Claimant ‘may bring claims not only for the impairment of the value of its shares in its subsidiary, but also for the impairment of its subsidiary’s assets.’578 Relying on von Pezold and others, Telefónica, and Azurix, it held: Other tribunals when faced with the similar issue have supported the principle that where a company is controlled, legally or factually, by a certain shareholder or group of shareholders, the latter may be entitled to a direct claim in respect of the assets of the former. Accordingly, in situations where a shareholder controls the company that owns the assets in issue, tribunals may consider those underlying assets to be the investments of the shareholder.579

573 574 575 576 577 578 579

ibid. Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) para 31. ibid paras 76, 81. von Pezold and others v Zimbabwe, Award (28 July 2015) para 321. ibid para 326. Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 135. ibid para 230.

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Under an alternative approach, which is adopted by fewer ICSID tribunals than the first,580 tribunals point out that the rights of foreign investors do not go beyond what could be derived from the shareholding; they deny an immediate right of shareholders to the assets of the companies that constitute the investment and limit shareholder claims to a possible reduction in share value. In El Paso v Argentina, the Claimant held shares in several Argentine companies and claimed that its investment encompassed not only those shares, but that ‘the vested and contractual rights belonging to those entities indirectly belonged to El Paso.’581 The Respondent, in turn, was of the view that ‘El Paso can claim for the loss allegedly caused unlawfully by the Respondent to its shares in said companies but not for allegedly unlawful damage caused to rights belonging to the latter.’582 This would exclude claims for breach of the legal and contractual rights of the Argentine companies themselves. The Tribunal rejected the Claimant’s contention and found that the licenses and other contracts granted to the Argentine companies were not protected as the Claimant’s (indirect) investments under the BIT.583 Since there was also no investment agreement between the Claimant and the Respondent,584 the only investment the Claimant held were the shares in the companies.585 Its finding, the Tribunal stated, was consistent with prior ICSID practice, which recognized that investment treaties

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protect the rights of foreign shareholders in domestic companies, more precisely their own rights as shareholders (right to the shares, right to a dividend, participation in stockholders’ meetings, etc.), including the right to compensation for loss of value of stocks imputable to measures taken by the host State.586

In the Tribunal’s view, precedent could not, however, be read as protecting the company’s assets as indirect investments of the shareholder. Allowing shareholder claims both for a diminution of the value of the shares and for interferences with assets or rights of the company would result in compensating the shareholder twice.587 The Tribunal in El Paso therefore summarized: ‘The overall conclusion related to the definition of the protected investment could be: what is protected are “the shares, all the shares, but only the shares.”’588 In Poštová banka v Greece, one of the Claimants, Istrokapital SE, a company organized under the laws of Cyprus, was the majority shareholder in the other Claimant, Poštová banka, a Slovak bank, which in turn had purchased interests in Greek Government Bonds (GGBs).589 Bringing a claim for breach of the Cyprus–Greece

580 For non-ICSID cases endorsing this approach, see BG Group v Argentina (UNCITRAL), Final Award (24 December 2007) paras 112, 206–218; Paushok v Mongolia (UNCITRAL), Award on Jurisdiction and Liability (28 April 2011) para 202; ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) paras 278–285; Enkev v Poland (UNCITRAL), First Partial Award (29 April 2014) para 310; South American Silver v Bolivia (UNCITRAL), Award (22 November 2018) paras 308–309. 581 El Paso v Argentina, Award (31 October 2011) para 149. 582 ibid para 157. 583 ibid paras 177–189. 584 ibid paras 190–198. 585 ibid paras 199–212. 586 ibid para 206. 587 ibid paras 175, 204. 588 ibid para 214. Indirect shareholdings in locally incorporated companies, by contrast, were acceptable for the Tribunal as indirect investments (ibid). 589 Poštová banka v Greece, Award (9 April 2015) paras 2, 51–59.

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BIT based on the restructuring of the Respondent’s sovereign debt, Istrokapital claimed that as a shareholder in Poštová banka, it made an indirect investment in the GGBs through Poštová banka and that such investment is protected under article 1.1. (c) [of] the Cyprus–Greece BIT as assets comprising monetary claims and contractual claims with an economic value. In this regard, Istrokapital has clearly stated that its claim rests solely on the GGB interests held by Poštová banka – that is, on the bank’s assets – and not on its shareholding in the company.590

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The Tribunal declined finding that Istrokapital had an investment in the sense of the BIT. While it entertained no doubt that indirect investors have standing to pursue claims for damage inflicted upon their shareholding, it considered that shareholders did not have a right to pursue claims directly over the assets of the company they invested in. The Tribunal reasoned that there is nothing in the record that supports Claimants’ contention that a shareholder in the position of Istrokapital has standing to assert claims for an alleged impairment of the assets of a company (in the place of Poštová banka) in which it holds shares. Claimants have failed to establish that the Cyprus–Greece BIT enables Istrokapital to submit claims for any alleged rights or claims that Poštová banka might have against Greece. Moreover, prior case law, discussed by the Parties, supports the opposite proposition, that is, that shareholders do not have claims arising from or rights in the assets of the companies in which they hold shares.591

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Relying, inter alia, on El Paso v Argentina, the Poštová banka tribunal concluded that a shareholder of a company incorporated in the host State may assert claims based on measures taken against such company’s assets that impair the value of the claimant’s shares. However, such claimant has no standing to pursue claims directly over the assets of the local company, as it has no legal right to such assets.592

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In Casinos Austria v Argentina, the Tribunal was faced with the question whether certain assets owned by the locally incorporated company ENJASA, shares of which the Claimants had acquired as part of the privatization of the gaming sector in the Argentine Province of Salta, most importantly the exclusive license to operate games of chance held by ENJASA, qualified as the Claimants’ investment.593 The Tribunal rejected this position as follows: Even though ENJASA’s operating license was the only significant asset ENJASA held at the time of the privatization in 1999/2000, and although it was, from an economic perspective, the reason why the bidders in the public tender were willing to make economically significant promises in return for becoming shareholders in ENJASA, the operating license as such was an asset that belonged, already at the time of the public

590 ibid para 228. 591 ibid para 229. 592 ibid para 245 (other precedents relied on by the Tribunal include HICEE v Slovakia (UNCITRAL), Partial Award (23 May 2011); ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013); BG Group v Argentina (UNCITRAL), Final Award (24 December 2007); Urbaser v Argentina, Decision on Jurisdiction (19 December 2012); and Paushok v Mongolia (UNCITRAL), Award on Jurisdiction and Liability (28 April 2011)). 593 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 173–176.

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tender, to ENJASA. Different from the role of L&E, which was created subsequently as a vehicle to hold the shares in ENJASA, the participants in the privatization process did not bid for the 30-year operating license and later created ENJASA to hold that license. They participated in the bid in order to become shareholders of ENJASA. Unlike Claimants’ shareholding in ENJASA, which is held indirectly through L&E, ENJASA’s license, therefore cannot be considered as an ‘investment’ that is held indirectly by Claimants through their (indirect) participation in ENJASA. The same holds true for other assets owned by ENJASA; these as well do not qualify as ‘investments’ that are indirectly held by Claimants through their participation in ENJASA.594

The Tribunal continued that the above finding

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does not mean, however, that interferences with ENJASA’s assets are irrelevant for Claimants’ rights as shareholder-investors protected under the BIT. Yet, the question to which extent Claimants enjoy protection as (indirect) shareholders against interferences with ENJASA’s assets, such as the revocation of its operating license and subsequent events, is, in principle, an issue for the merits of the case. At the present jurisdictional stage, and despite Respondent’s formulation as part of its objection that the Tribunal lacks jurisdiction ratione materiae, the issue (i.e., the scope of protection of Claimants as shareholder-investors) is only relevant in order to assess whether Claimants have successfully presented a prima facie claim.595

Both schools of thought depart from different conceptual bases about the extent to which shareholdings are a means to hold indirect investments. Often the differentiation between the damage suffered by an indirect investor by way of the reduction of share value and the damage inflicted immediately upon the asset held by the company will be theoretical and lead to the same results. In other cases, the different approaches may play out as regards the scope of the substantive rights enjoyed by the foreign national or the calculation of compensation or damages. But both approaches concur that they do not concern the question of access to dispute settlement before the Centre. The debate between the two approaches is about the nature and substantive scope of the underlying rights, not about the question whether the Centre has jurisdiction over shareholder claims.

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d) Passive v Active Investments Over the last couple of years, some tribunals established under investment treaties have subscribed to the idea that the mere ownership or control of assets that qualified as an ‘investment’ was not sufficient, but that an active allocation of resources by the investor must have been involved.596 Under this approach, the protection of passive

594 ibid para 184. 595 ibid para 185. 596 In addition to the cases discussed below, see Caratube v Kazakhstan, Award (5 June 2012) paras 408–467; Capital Financial Holdings v Cameroon, Award (22 June 2017) para 425. See also OIEG v Venezuela, Award (10 March 2015) para 248; Vestey v Venezuela, Award (15 April 2016) para 192; Blue Bank v Venezuela, Award (26 April 2017) paras 159–179 (concluding that since the acquisition of shares had taken place before the appointment of the Claimant as trustee, it had not made an investment, but was providing trustee services for a fee). For a non-ICSID case, see Clorox v Venezuela (UNCITRAL), Award (20 May 2019) paras 814–816 (this Award has been set aside; see Swiss Federal Tribunal, Case No 4A_306/2019, Judgment (25 March 2020) para 3.4.2.6). For further discussion, see also Jean Ho, ‘Passive Investments’ (2020) 35 ICSID Rev 523.

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shareholdings, the coverage of investments made through corporate restructurings, and certain modes of acquisition of investments, for example through succession or assignments that do not involve any additional capital injection into the host State, may become questionable.597 The approach to demand an active investment, or the activity of making an investment, is based primarily on the wording in investment treaties that an investment must be invested ‘by’ or constitute an investment ‘of’ a protected investor, or must have been ‘made’ or ‘invested’ by a protected investor. Conceptually, such a requirement may constitute a limitation to the host State’s consent under the respective treaty. But such a requirement does not find a basis in Art. 25(1) of the ICSID Convention. In other words, while the instrument of consent may be limited to active investments, the Centre’s jurisdiction itself contains no such limitation.598 The need for an active contribution was supported, for example, by the Tribunal in Standard Chartered Bank v Tanzania in a dispute under the Tanzania–United Kingdom BIT, which referred to ‘investments of [a UK company],’ ‘investments by investors,’ and ‘investments made.’599 The UK Claimant argued that the Respondent, through a variety of measures attributable to it, had vitiated the repayment of a loan made by the Claimant’s Hong Kong subsidiary, Standard Chartered Bank (Hong Kong), to the Tanzanian corporation IPTL in order to finance a power plant in Tanzania in breach of the BIT; the Claimant’s investment, in turn, was claimed to consist of its indirect ownership of the loan to IPTL held via its Hong Kong subsidiary.600 The Tribunal concluded that the Tanzania–United Kingdom BIT only protected investments that the investor had made in some active way, rather than held based on passive ownership. The Tribunal said: 230. . . . the Tribunal interprets the BIT to require an active relationship between the investor and the investment. To benefit from Article 8(1)’s arbitration provision, a claimant must demonstrate that the investment was made at the claimant’s direction, that the claimant funded the investment or that the claimant controlled the investment in an active and direct manner. Passive ownership of shares in a company not controlled by the claimant where that company in turn owns the investment is not sufficient. 231. The Tribunal is not persuaded that an ‘investment of’ a company or an individual implies only the abstract possession of shares in a company that holds title to some piece of property. 232. Rather, for an investment to be ‘of’ an investor in the present context, some activity of investing is needed, which implicates the claimant’s control over the investment or an action of transferring something of value (money, know-how, contacts, or expertise) from one treaty-country to the other.601

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The Tribunal in KT Asia v Kazakhstan took a similar approach in finding that a transfer of shares in a Kazakh bank between two foreign companies that belonged to the same individual without injecting additional economic value did not qualify as an

597 See further Christoph Schreuer, ‘The Active Investor’ in Eric Bylander, Anna Jonsson Cornell and Jakob Ragnwaldh (eds), Forward! Essays in Honour of Prof Dr Kaj Hobér (Iustus Pub 2019) 237. 598 For further support that passively held assets are protected, see also RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 158. 599 Standard Chartered Bank v Tanzania, Award (2 November 2012) paras 206–232. 600 See ibid paras 54–61. 601 ibid paras 230–232.

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investment in the sense of Art. 25(1), as there was neither a contribution nor an economic risk in the operation at stake.602 The Tribunal said: [T]he Tribunal considers that KT Asia has made no contribution with respect to its alleged investment, nor is there any evidence on record that it had the intention or the ability to do so in the future. As a consequence, the Claimant has not demonstrated the existence of an investment under Article 25(1) of the ICSID Convention and under the BIT. This suffices to rule out jurisdiction over the present dispute.603

By contrast, the majority of investment tribunals faced with arguments that the protection of an investment required an active contribution by the current owner rejected such an approach.604 The Tribunal in Orascom v Algeria, in a dispute under the BIT between Algeria and the Belgium–Luxembourg Economic Union, made this clear in the following terms:

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[T]he Respondent submits that the BIT excludes from its protection the ‘simple holding of an indirect share.’ Again, the Tribunal cannot agree. No ‘active’ involvement is required under the BIT, which protects both ‘minority or indirect’ shareholding. Nor is there such a requirement under the ICSID Convention.605

Similarly, the Tribunal in Kim and others v Uzbekistan stressed that no distinction should be made between passive and active investments when faced with the Respondent’s contention that the Kazakhstan–Uzbekistan BIT, which referred to ‘property rights invested by the investors’ and ‘investments made by him or her,’ required the Claimant to establish that it ‘took specific action involving substantial contribution and risk to make his or her investment.’606 The Tribunal rejected this argument:

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310. . . . the Tribunal does not agree that the ordinary meaning of the term ‘made’ does not necessarily entails [sic] a requirement that Claimants must have an ongoing ‘active’ role in the investment such that the term imposes a limitation on the definition of ‘investor’ under the BIT. . . . 312. The Tribunal therefore holds that the BIT in this case does not contain a distinction between active and passive investors . . .607

Overall, a theory that requires an active contribution by each investor as a requirement for the existence of a qualifying investment would be contrary, inter alia, to the

602 KT Asia v Kazakhstan, Award (17 October 2013) paras 188–206. 603 ibid para 206. See also ibid para 220 (pointing out in addition that ‘not only did the Claimant not make any contribution, nor was it meant to absorb any financial losses’). The Tribunal distinguished the situation before it, however, from a corporate restructuring within a group of companies where the successor could arguably rely on the contribution made by its predecessor; see ibid paras 194–205. 604 In addition to the cases discussed below, see Garanti Koza v Turkmenistan, Award (19 December 2016) para 231; Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) paras 106–107. See also von Pezold and others v Zimbabwe, Award (28 July 2015) para 312; RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 158. See also Gold Reserve v Venezuela (AF), Award (22 September 2014) paras 260–262; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 126, 204; Flemingo Duty Free v Poland (UNCITRAL), Award (12 August 2016) para 321; South American Silver v Bolivia (UNCITRAL), Award (22 November 2018) paras 311–341. For a similar conclusion, see also Pao Tatneft v Ukraine [2018] EWHC 1797 (Comm) (13 July 2018) paras 67–68. 605 Orascom v Algeria, Award (31 May 2017) para 384. 606 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 306. 607 ibid paras 310, 312.

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established practice concerning the protection of shareholdings as investments. Moreover, this theory leads to the unsatisfactory result that an existing investment would lose that quality if transferred to another person or entity who does not meet the test of an active involvement, as postulated by these tribunals. Problematic cases that some tribunals attempted to capture by introducing an active investor requirement, it seems, are better addressed through doctrines relating to the abuse of right or process (see paras. 707–715 infra). As discussed in the next section, succession and assignment are, however, generally considered to be valid modes of acquiring an investment and making a contribution that is necessary for its existence (see paras. 369–380 infra).

e) Succession and Assignment 369

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In a sizable number of cases, the foreign national did not build up a greenfield investment, but acquired an existing investment from a third party, either in the form of a purchase, an assignment, or other form of succession. Such situations raise not only the question under which conditions the former owner can use the Centre for settling disputes with the host State arising directly out of the investment (see paras. 398–401 supra); it also raises the question whether the acquirer can have access to the Centre. In order to do so, it is necessary, inter alia, that the successor’s holding of rights or assets qualifies as an investment in the sense of Art. 25(1). In several instances, arbitral tribunals have found that the successor or assignee has made an investment in the sense of Art. 25(1) (see also paras. 679–744 infra). In Standard Chartered Bank (Hong Kong) v Tanzania, the Claimant brought claims as an assignee of rights of IPTL under the so-called Implementation Agreement, which had been concluded between IPTL and the Government of Tanzania; this Agreement contained an ICSID arbitration clause and provided, inter alia, for certain government guarantees against expropriation and non-discrimination for the benefit of IPTL.608 The Claimant, in turn, had obtained IPTL’s rights against Tanzania on the basis of a Security Deed that had been assigned to it as collateral when purchasing loans that a third party had given to IPTL under the so-called Facility Agreement in order to finance the construction and operation of an electricity generating facility in Tanzania. The Tribunal stressed that it had to assess, as part of its analysis whether the Centre had jurisdiction, ‘whether the purchase of the Loan by the Claimant in the circumstances of the case is in the nature of an “investment”’ in the sense of Art. 25(1).609 Considering that the purchase of a loan ‘standing alone without any link to some economic venture intended to provide for the improvement of the State’s development would not be considered an “investment”’ constituted ‘merely . . . an income stream,’ but not an investment in the sense of Art. 25(1),610 the Tribunal conducted a detailed ‘examination of whether there exists in this transaction, the various elements of risk, substantial contribution, minimum duration and arguably, economic development of Tanzania.’611 It concluded that this was indeed the case: 608 For the facts of the case, see Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 5–18. 609 ibid para 215. 610 ibid para 220 (referring to Alps Finance v Slovakia (UNCITRAL), Award (5 March 2011) paras 242–243). 611 Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) para 215.

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Following the Tribunal’s consideration of the various elements of the Claimant’s undertaking, including maintaining the loans for the benefit of IPTL and the Facility, the Tribunal finds that this is a legal dispute arising out of an investment and that it has jurisdiction under Article 25 of the ICSID Convention. Neither the Project, nor its individual elements, ceased to be an investment merely because the identity of the Lender under the Facility Agreement has changed or that no further drawdown of funds were made following the transfer. The fact is that the Facility continued to enjoy the use of the funds earlier disbursed following the change of the Lender. The Tribunal is also satisfied that the Claimant is the rightful party to maintain such claim as an absolute assignee who is entitled to enforce the rights thereunder in its own name. Being a Chinese entity, it is indisputably a ‘National of another Contracting State.’612

In Caratube and Hourani v Kazakhstan, the Tribunal also addressed whether the assignee of a contract with the host State for the exploration and exploitation of oil had made an investment in the sense of Art. 25(1) of the Convention.613 It concluded that this was the case, not least because the host State had been aware of and had approved the assignment of the contract after a several months-long assignment process, knew the majority owner of the Claimant, and could not furnish any evidence that the assignment was abused in order to obtain undue access to the Centre.614 While both Standard Chartered Bank (Hong Kong) and Caratube and Hourani concerned contract-based disputes, similar conclusions were also reached by ICSID tribunals in cases involving assignments or succession based on domestic legislation or treaty (see paras. 697–728 infra). In many cases, the question of whether there was an investment by the successor in the sense of Art. 25(1) proves uncontroversial. Debates as to whether the successor has made an investment arose, however, in cases involving acquisitions of existing investments without the injection of funds into the host State, either because the transactions took place completely outside the host State, because the purchase price was nominal, or because the transaction consisted of a donation. In some cases, the acquisition of the investment was based on commercial transactions that were implemented entirely outside the host State and did not involve any capital flows, or additional injection of funds, into the host State. Such transactions have been accepted as giving rise to an investment. In Orascom v Algeria, the Tribunal was faced with the argument that the purchase of shares in a locally incorporated company by the Claimant could only result as an investment if it occurred directly in the host State.615 The Tribunal rejected this argument, and concluded that the purchased shares qualified as an investment in the sense of the applicable BIT and Art. 25(1) of the Convention,616 as

612 ibid para 251. See also Standard Chartered Bank v TANESCO, Decision on Jurisdiction and Liability (12 February 2014) para 111 (stating ‘that by virtue of its purchase of the outstanding debt under the loans to IPTL and the assigning of the rights under the relevant agreements, SCB HK has an investment for the purposes of the ICSID Convention’). See also Ryan and others v Poland (AF), Award (24 November 2015) para 207; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 203–208. 613 See Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 629–649. 614 ibid para 648. 615 Orascom v Algeria, Award (31 May 2017) para 382. 616 See ibid para 385.

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Agreements of parties on transferring investments against a nominal purchase price may raise doubts as to whether the successor has made a contribution that is indicative of the existence of an investment and requires specific attention. The Tribunal in Phoenix Action v Czech Republic reasoned in this respect: The question of the low price paid by Claimant for the acquisition of the shares . . . has been extensively discussed between the parties. The Tribunal considers that the existence of a nominal price for the acquisition of an investment raises necessarily some doubts about the existence of an ‘investment’ and requires an in depth inquiry into the circumstances of the transaction at stake. If there is indeed a real intent to develop economic activities on that basis, the existence of a nominal price is not a bar to a finding that there exists an investment.618

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In Quiborax v Bolivia, one of the Claimants, Mr. Allan Fosk, had acquired one share of another Claimant, Non Metallic Minerals SA, a company incorporated in Bolivia, that exploited several mining concessions in the host State, in order to comply with the requirement under Bolivian law that a corporation must have at least three shareholders.619 The Tribunal found that the acquisition of the one share did not qualify as an investment in the sense of Art. 25(1) of the Convention, stating that there is no evidence that Allan Fosk made a contribution of money or assets. As the Claimants have readily conceded, Allan Fosk did not pay for his one share but rather ‘received’ it ‘in order to comply with the minimum three shareholders requirement under Bolivian corporate law.’ There is thus no evidence of an original contribution. Nor is there evidence that he personally made a subsequent contribution to exploit the mining concessions. In short, it is not established that Mr. Fosk made any contribution whatsoever. While on one occasion Mr. Fosk received dividends for his one share, this only demonstrates that he benefited from the investment, not that he made a contribution.620

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By contrast, several ICSID tribunals have recognized that the recipient of a donation could qualify as holding an investment in the sense of Art. 25(1) of the Convention. In Pey Casado v Chile, the Tribunal accepted that one of the Claimants, the ‘Presidente Allende’ Foundation, qualified as an investor in two locally incorporated companies,

617 ibid para 382. See also Gold Reserve v Venezuela (AF), Award (22 September 2014) paras 261–262. 618 Phoenix Action v Czech Republic, Award (15 March 2009) para 119. For similar considerations around the payment of a nominal purchase price, see Saba Fakes v Turkey, Award (14 July 2010) paras 139–141, 147; Caratube v Kazakhstan, Award (5 June 2012) paras 435–438; KT Asia v Kazakhstan, Award (17 October 2013) paras 203–206; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) para 219; Capital Financial Holdings v Cameroon, Award (22 June 2017) paras 427–428. See also Société Générale v Dominican Republic (UNCITRAL), Award on Jurisdiction (19 September 2008) paras 36–38 (considering that, on the facts of the case, a nominal purchase price of USD 2 does not speak against the existence of an investment); Oostergetel v Slovakia (UNCITRAL), Decision on Jurisdiction (30 April 2010) para 168. 619 Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 15. 620 ibid para 232 (internal references omitted).

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shares of which it had received as a donation from the first Claimant, Mr. Pey Casado several years before the initiation of the case.621 That the assignment of the shares was based on a donation, rather than a commercial transaction, was irrelevant for the Tribunal.622 Similarly, in Renée Rose Levy v Peru, the Tribunal rejected the host State’s argument that the share ownership that the Claimant had received through a donation from her father did not amount to an investment, as ‘the monetary value of assignments of rights and endorsements does not affect the status of the initial investment.’623 The Tribunal reasoned that

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[i]t is clear that the Claimant acquired her rights and shares free of charge. However, this does not mean that the persons from whom she acquired these shares and rights did not previously make very considerable investments of which ownership was transmitted to the Claimant by perfectly legitimate legal instruments.624

Relatedly, arbitral tribunals have also concluded that the inheritance of an investment was an acceptable mode of acquisition that allowed the heir to have access to the Centre for any dispute arising out of the inherited investment (see also paras. 731–732 infra). As the Tribunal in RREEF v Spain stated: ‘a national of one State who merely inherits property in another State nonetheless has an investment in that other State.’625 Overall, arbitral jurisprudence therefore confirms that an investment in the sense of Art. 25(1) of the Convention can be based on different modes of acquisition, including succession, assignment, purchase, or donation. Where these transactions take place and whether they involve the injection of additional funds into the host State is irrelevant.

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6. Temporal and Territorial Aspects of the Investment In distinguishing economic activity and assets that were protected as an investment in the sense of Art. 25(1) from those which were not, both temporal and territorial aspects have given rise to debate. These include in particular the distinction between an investment and pre-investment activities, which are not yet protected as an investment (see paras. 382–397 infra), access to the Centre for past investments (see paras. 398–401 infra), the origin of the investment (see paras. 402–414 infra), and the connection an investment must have to the host State’s territory (see paras. 415–437 infra).

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a) Pre-Investment Activities The Convention states that the dispute must arise out of an investment. Tribunals have interpreted this to mean that an existing investment is a requirement for the Centre’s jurisdiction ratione materiae. By contrast, steps preparatory to an investment

621 Pey Casado v Chile, Award (8 May 2008) paras 501–511, 537–544. 622 ibid para 542. This part of the Tribunal analysis was confirmed on annulment; see Pey Casado v Chile, Decision on Annulment (18 December 2012) paras 44–48, 169–173. 623 Renée Rose Levy v Peru, Award (26 February 2014) para 146. 624 ibid para 148 (emphases in the original). 625 RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 158.

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by themselves will not qualify for protection as an investment in the sense of Art. 25(1) of the ICSID Convention.626 In Mihaly v Sri Lanka, a dispute based on the Sri Lanka–United States BIT, the parties had engaged in extensive negotiations on the construction and operation of a power station. They had exchanged various documents, but never reached the stage of signing a contract. When the Claimant sought to recover its development costs, the Tribunal found that it lacked jurisdiction because no investment existed. It found that the documents made clear that the parties had not yet wished to enter into any binding obligations.627 It said: The Claimant has not succeeded in furnishing any evidence of treaty interpretation or practice of States, let alone that of developing countries or Sri Lanka for that matter, to the effect that pre-investment and development expenditures in the circumstances of the present case could automatically be admitted as ‘investment’ in the absence of the consent of the host State to the implementation of the project . . . The Tribunal is consequently unable to accept as a valid denomination of ‘investment’, the unilateral or internal characterization of certain expenditures by the Claimant in preparation for a project of investment.628

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The Tribunal clarified that if the negotiations had come to fruition, the preparatory expenses might have become part of the costs of the project and thereby part of the investment.629 The Tribunal also stated that the parties were free to agree on when binding obligations were to arise, and therefore on the starting point of an investment; but claims that a party had breached an obligation to conduct negotiations for the establishment of a future investment in good faith, if any, were not arbitrable under the ICSID Convention.630 In a separate opinion, one of the arbitrators suggested that the ICSID Convention would not have prevented the parties from agreeing to treat development costs as an investment.631 In addition, the separate opinion noted, an investment in the sense of Art. 25(1) would have been present, had the costs been incurred by a locally incorporated company set up for the implementation of the project in which the Claimant held shares, as the shareholding would have qualified as an investment.632 In Zhinvali v Georgia, the parties had engaged in negotiations about the rehabilitation of a power plant. The negotiations failed. The claim was directed at the recovery of development costs in the form of expenses incurred during the negotiations. Jurisdiction was based on Georgia’s Investment Law, which referred to ‘entrepreneurial activity 626 See also Christoph Schreuer, ‘Pre-Investment Activities’ in Christoph Benicke and Stefan Huber (eds), National, International, Transnational: Harmonischer Dreiklang im Recht – Festschrift für Herbert Kronke (Gieseking 2020) 1553. 627 Mihaly v Sri Lanka, Award (15 March 2002) paras 47, 59. 628 ibid paras 60, 61. 629 ibid para 50. 630 ibid para 51. For critical discussion of the decision, see Robert N Hornick, ‘The Mihaly Arbitration: PreInvestment Expenditure as a Basis for ICSID Jurisdiction’ (2003) 20 J Int’l Arb 189; C Chatterjee, ‘When Pre-Investment or Development Costs May or May Not Be Regarded as Part of “Investment” under Article 25(1) of the ICSID Convention: The Mihaly Case’ (2003) 4 JWIT 909; Walid Ben Hamida, ‘The Mihaly v Sri Lanka Case: Some Thoughts Relating to the Status of Pre-Investment Expenditures’ in Weiler (n 18) 47; Yala (n 255) 120–124; Rubins (n 255) 300–304; Dolzer (n 255) 270–271; Williams (n 18) 880–882; Douglas (n 444) 188. 631 Mihaly v Sri Lanka, Individual Concurring Opinion by Mr David Suratgar (7 March 2002) para 6. 632 ibid para 7.

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carried out on the territory of Georgia.’633 Relying heavily on Mihaly, and ultimately declining jurisdiction on this count, the Tribunal found that the ‘development costs’ in this case must either stand as an ‘investment’ solely on their own two feet or otherwise fall by the wayside as expenditures that fail to qualify either under the 1996 Georgia Investment Law or under the ICSID Convention.634

Subsequent tribunals have rather consistently endorsed the finding of principle in Mihaly and Zhinvali that pre-investment activities in and of themselves are not covered by the notion of investment in Art. 25(1) of the Convention. Hence, the main focus in arbitral jurisprudence has been to determine when pre-investment activities end and when a protected investment starts. The material step at which a project moves beyond the stage of preparation, and becomes an actual investment, is when the investor makes binding commitments or acquires assets that are part of the overall investment. In PSEG v Turkey, the parties had signed a concession contract for a power plant, but the project was not carried out. The Respondent argued that there was no investment, since the project had never moved beyond the drawing board and essential terms were still missing from the contract.635 The Tribunal however concluded that the concession contract existed, was valid, and legally binding. This, the Tribunal found, distinguished the case from Mihaly and Zhinvali.636 It therefore found jurisdiction on the basis of an investment made in the form of a concession contract.637 That the plant had never even started to be built was irrelevant, as the investor’s activity had moved beyond the preinvestment stage in light of the binding contract.638 Development costs and preinvestment expenditures consequently formed part of the investment:

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An investment can take many forms before actually reaching the construction stage, including most notably the cost of negotiations and other preparatory work leading to the materialization of the Project, even in connection with pre-investment expenditures, particularly when, like in this case, there is a valid and binding Contract duly executed between the parties.639

By contrast, purely preparatory agreements with the host State, as well as the successful participation in public tender proceedings without the conclusion of a binding contract, or conferral of a license or the like, will not qualify as investments under Art. 25(1) of the Convention. In F-W Oil v Trinidad and Tobago, the Claimant had won a tender for the extraction of oil and gas, but no operating agreement was ever concluded. The Claimant argued that its claim arose out of its investment in the bidding process. The Tribunal found that a covered investment could only be something in the nature of a legal right or entitlement based on proprietary or contractual rights.640 The Tribunal examined separately whether a ‘Process Contract’ governing the post-tender 633 634 635 636 638

Zhinvali v Georgia, Award (24 January 2003) para 377. ibid para 410. PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 66–73. ibid para 81. 637 ibid paras 79–104. For a similar assessment of investment projects whose implementation ended at a very early stage, see MTD v Chile, Award (25 April 2004) paras 39–85, 97; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 73(ii); Houben v Burundi, Award (12 January 2016) paras 111–130. 639 PSEG v Turkey, Award (19 January 2007) para 304. 640 F-W Oil v Trinidad and Tobago, Award (3 March 2006) para 125.

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negotiations existed and reached a negative conclusion. It stated that even if such a contract had existed, it was doubtful whether ‘an intermediate obligation . . . concerned only with negotiating methods and not with substantive rights, could rank as an “investment” for the purpose of conferring jurisdiction on the present Tribunal.’641 The situation was different in Malicorp v Egypt.642 Here the Claimant had successfully participated in a tender for the construction of an airport and thereafter signed a concession contract with the Egyptian Government. When a dispute arose from the State’s unilateral termination of the concession, the Tribunal addressed the question whether an investment under Art. 25(1) of the Convention existed in the following terms: In the case of a contract, it has been rightly held that the costs incurred during negotiations with a view to concluding a contract do not constitute an investment if in the end the State finally refuses to sign it. The situation in the present case is different since the Contract was indeed signed. It is true that Malicorp does not appear to have performed many services in connection with it. Nonetheless, the fact of being bound by that Contract implied an obligation to make major contributions in the future. That commitment constitutes the investment; it entails the promise to make contributions in the future for the performance of which that party is henceforth contractually bound. In other words, the protection here extends to deprivation of the revenue the investor had a right to expect in consideration for contributions that it had not yet made, but which it had contractually committed to make subsequently.643

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The above cases confirm that winning a public tender alone will not qualify as an investment.644 The situation may be different, however, if the successful participation in the tender does not concern the investor’s entry into the host State market, but relates to the extension of an already existing investment in that market. This could be the case, for example, if a locally incorporated company in which the investor holds shares has participated in the tender as part of its business operations. Participation in the tender is then not an unprotected pre-investment activity, but part of an otherwise already protected investment.645 641 ibid para 183 (emphasis in the original). For similar conclusions that preparatory agreements would not be sufficient to constitute protected investments as defined in the governing BIT, see Generation Ukraine v Ukraine, Award (16 September 2003) paras 8.6, 18.5–18.9; Nagel v Czech Republic (SCC), Final Award (9 September 2003) paras 328–329; Grupo Contreras v Equatorial Guinea (AF), Award (4 December 2015) paras 141–142. 642 Malicorp v Egypt, Award (7 February 2011). 643 ibid para 113 (relying on the Second Edition of this Commentary and PSEG v Turkey, Award (19 January 2007) para 304 – internal reference omitted). 644 See also ACP Axos Capital v Kosovo, Award (3 May 2018) paras 133–256 (concluding that participation in a successful tender that does not result in a binding contract is not a protected investment under the applicable BIT). 645 In a similar situation, the Tribunal in Lemire v Ukraine rejected the argument that the unsuccessful participation in a public tender of a locally incorporated radio station of which the Claimant held shares for additional frequencies was an unprotected pre-investment activity. See paras 142–143 supra. See also Bosca v Lithuania (UNCITRAL), Award (17 May 2013) paras 166–173 (where the successful participation in a tender for purchasing shares of a to-be-privatized company was considered to be covered by the applicable BIT as an ‘associated activity’ to an investment that the Claimant already had made). In Nordzucker v Poland, a case decided under the Germany–Poland BIT, the Tribunal found that the attempted acquisition, after a successful tender, of two further sugar enterprises, in addition to two already existing ones in which the Claimant had invested before, did not constitute part of the original

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The distinction between preparatory agreements and binding commitments also played a role in RSM v Grenada I, where the parties had entered into an Agreement that foresaw an application for an ‘Exploration Licence’ for oil and gas and a possible subsequent ‘Development Licence.’646 When the grant of the Exploration License was refused by the Respondent, and the Agreement subsequently terminated, the Respondent argued that the Agreement was only a preliminary or preparatory arrangement that was not susceptible by itself of constituting an investment in the sense of Art. 25(1). The Tribunal rejected this argument and reasoned:

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256. In the present case, the first phase resulting from the organization of the project under the Agreement can hardly be dissociated from the rest of the transaction. In fact, one does not find in the Agreement any formal separation between the terms relating respectively to the pre-exploration period, the exploration period and the development period: they all form a single and overall agreement. . . . 257. . . . The Agreement spells out in detail all the undertakings of the Parties from its signature to the end of the projected exploitation, so that it cannot be termed in any sense a ‘preliminary agreement.’647

It is not necessary, however, that a binding commitment exists in relation to the host State itself. Instead, contractual commitments made by the investor in relation to third parties will be sufficient in order for an activity to have moved beyond the preinvestment phase and qualify as an investment under Art. 25(1) of the ICSID Convention.648 In Eyre and Montrose v Sri Lanka, the Tribunal rejected its jurisdiction in a case under the Sri Lanka–United Kingdom BIT concerning the envisaged development of a hotel project in Sri Lanka, even though the land had already been in the possession of the investor, because the planning for the hotel project had not yet sufficiently materialized: 301. . . . The Claimants have not proven, on a balance of the probabilities, that the Hotel Project was anywhere near a certainty . . . The record reflects that Mr Eyre has not investment; in the absence of a legal commitment concerning the acquisition of the additional enterprises, the Tribunal found that no investment existed in respect of them. See Nordzucker v Poland (UNCITRAL), Partial Award (10 December 2008) paras 143–159, 201. However, the BIT also required the contracting States to promote investments and to admit them in accordance with its laws, so that, in this context, the term ‘investment’ had to be understood as covering also intended investments that were about to be made. See ibid paras 202–217. For commentary on the case, see Irmgard Marboe, ‘Nordzucker AG v The Republic of Poland’ (2015) 16 JWIT 533. 646 For the basic facts, see RSM v Grenada I, Award (13 March 2009) paras 5–6. 647 ibid paras 256–257. 648 See also Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) paras 294–321 (qualifying a ‘claim of entitlement to ownership of shares’ in a hotel based on an agreement between private parties as an investment in the sense of the applicable BIT, the host State’s foreign investment legislation, and Art. 25(1) of the Convention). For further cases addressing the need for agreements with private parties to go beyond preliminary agreements to qualify as investments under the applicable BIT, see ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) para 273 (finding that a preliminary agreement for the purchase of shares in the future was not considered as an investment, while the final agreement was); Bosca v Lithuania (UNCITRAL), Award (17 May 2013) paras 168–169 (finding that a service agreement between the Claimant and a Lithuanian company for the development of brands in Lithuania qualified as an investment, whereas an option agreement for the purchase of shares for which no consideration was paid and whose option was not exercised was not an investment). See also PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 189 (declining to qualify an option agreement as an investment).

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schreuer’s commentary on the icsid convention obtained formal planning permission [nor] actually executed contractual commitments with architects, hotel management firms or financiers. The Claimants may be right in stating in the Memorial that the Hotel Project was recognised as ‘potentially lucrative’, but more than potential is necessary. There must have been substantive commitments and arrangements entered into, involving specific commitments and financial costs, all of which would entail both certain risks as well as possible benefits. 302. The Tribunal can find only that the Hotel Project remained at best aspirational at the time of the compulsory State acquisition in 2010. Consequently, Mr Eyre’s contributions rose only to the pre-investment level and he did not face the operational risk necessary for the Hotel Project to qualify as a protected investment for purposes of Article 1 of the BIT and Article 25(1) of the ICSID Convention.649

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Contractual arrangements with private parties may even be sufficient to qualify as an investment in the sense of Art. 25(1) of the Convention if the to-be-developed project requires government approval for implementation. Thus, the Tribunal in Gosling and others v Mauritius concluded that contractual arrangements between the Claimants and local landowners for the development of a real-estate project on a site later inscribed in the UNESCO World Heritage List qualified as an investment, and were not limited to unprotected pre-investment activities, even though the Government never issued the necessary permits.650 The acquisition of assets in the host State that form part of the overall investment operation will generally also be sufficient to mark the end of the phase of unprotected pre-investment activities and fall within the realm of an actual investment.651 Thus, in Houben v Burundi, the Tribunal concluded that the acquisition of land in the host State for the development of a real estate project was not a pre-investment activity, but part of the Claimant’s investment in the sense of Art. 25(1) of the Convention, even though no contracts for the financing of the real estate development had been concluded.652 All of these cases suggest that costs incurred in the course of preparing or developing a project will not, by themselves, amount to an investment for purposes of ICSID’s jurisdiction.653 If the project materializes, however, development costs may well

649 Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 301–302 (internal references omitted). 650 See Gosling and others v Mauritius, Award (18 February 2020) paras 130–135, 144–146, 166(i) (addressing the notion of investment under the applicable BIT and somewhat unclearly speaking of a ‘potential’ of the contractual rights to become investments if the necessary permits were obtained). See also CC/Devas v India (UNCITRAL), Award on Jurisdiction and Merits (25 July 2016) paras 199–210 (qualifying a contract between one of the Claimants and a third party concerning the lease of capacity on a spacecraft for the launch of satellites as an investment under the BIT, and not as non-covered preinvestment activities, even if governmental permits necessary for the operation of the satellite are not granted). 651 See also Douglas (n 444) 187 (‘If expenditures in the host state lead to the acquisition of a property right . . . and the economic characteristics of an investment have materialized . . . then there is an investment in the host state and the protection of the treaty is engaged’). For similar holdings in regard of the notion of investment in BITs, see Amto v Ukraine (SCC), Final Award (26 March 2008) para 48 (holding that steps to acquire shares do not yet result in an investment, while their actual acquisition will); Apotex v United States (UNCITRAL), Award on Jurisdiction and Admissibility (14 June 2013) paras 206–225 (concluding that an applied-for, but not granted approval for a new drug is not yet protected property and hence not an investment under Art. 1139 of the NAFTA). 652 Houben v Burundi, Award (12 January 2016) paras 127–130. 653 See also Generation Ukraine v Ukraine, Award (16 September 2003) paras 8.6, 18.5–18.9.

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become part of the overall investment, and will hence be protected. The material step at which a project moves beyond the stage of preparation and becomes an actual investment is the conclusion of a binding contract, even if it does not ultimately lead to actual economic activity.654 In certain circumstances the contract itself constitutes the investment. Where investments are made without a contract with the host State or one of its authorized entities, the decisive stage will usually be the making of definite commitments with partners, suppliers, subcontractors, or similar legally binding steps, or the acquisition of assets in the host State that form part of the investment operation. The successful participation in a tender process alone has generally not been considered to be sufficient, as binding commitments usually only result from a separately concluded, subsequent agreement between investor and host State. In such cases, access to the Additional Facility under Art. 2(b) of the Additional Facility Rules may be an option (see para. 13 supra; paras. 485–494 infra). The requirement under Art. 25(1) of the Convention that there must be an existing investment applies even if another treaty, such as a BIT, grants rights at the preinvestment stage, for instance in the form of a right to be admitted.655 Therefore, disputes arising from investments that are merely planned, intended, or attempted will not be covered by Art. 25(1).

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b) Past Investments The need for the dispute to arise directly out of an investment for the Centre to have jurisdiction under Art. 25(1) of the ICSID Convention has raised the question, in particular in investment treaty cases, of whether the claimant still needs to hold the investment when accepting the host State’s offer to the Centre’s jurisdiction, and/or when the request is registered by the Centre, and whether a divestment, for example in the form of a sale to a third party, or the disappearance of the investment that has taken place in the meantime would result in a lack of jurisdiction.656 ICSID tribunals have consistently held that the ICSID Convention does not contain any requirement that the claimant must still hold the investment when consenting to the Centre’s jurisdiction or when his or her request is registered. Art. 25(1) of the ICSID Convention therefore does not require that there must be an ongoing or current investment. Thus, in Helnan v Egypt, the Respondent challenged the Tribunal’s jurisdiction because the investment no longer existed when the Claimant brought its claim that it

654 For the same view, see SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 132(d). 655 See eg US Model BIT (2012) Arts. 3, 4, which grant national treatment and most-favored-nation treatment also with respect to the establishment and acquisition of investments. Similar provisions are contained in NAFTA (n 32) Arts. 1102 and 1103. For detailed treatment, see Thomas Pollan, Legal Framework for the Admission of FDI (Eleven 2006); Ignacio Gómez-Palacio and Peter Muchlinski, ‘Admission and Establishment’ in Muchlinski, Ortino and Schreuer (n 18) 227; Anna Joubin-Bret, ‘Admission’ in August Reinisch (ed), Standards of Investment Protection (OUP 2008) 9. For examples in the case law addressing pre-establishment obligations, see Nordzucker v Poland (UNCITRAL), Partial Award (10 December 2008) paras 210–217 and ibid, Second Partial Award (28 January 2009); Mason v Korea (UNCITRAL), Decision on Preliminary Objections (22 December 2019) para 210. 656 This situation is to be distinguished from the situation where a divestment has taken place after instituting proceedings. For discussion of this situation, see paras 729–744 infra.

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had been deprived by the Respondent of its investment in a hotel project in violation of the Denmark–Egypt BIT.657 The Tribunal rejected this objection and said: 116. The argument that the investment had ceased to legally exist under Egyptian law when HELNAN filed its request for ICSID arbitration has no relevance to the jurisdiction of the Arbitral Tribunal since HELNAN’s claim is precisely that this legal situation is the result of alleged actions by EGYPT in breach of the Treaty. . . . 120. . . . Article 25 of the ICSID Convention contains no requirement that an investment must continue to exist at the time of filing of a request for ICSID arbitration: it only requires that a legal dispute arises directly out of an investment ‘. . . which the parties to the dispute consent in writing to submit to the Centre.’658

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Similarly, in GEA Group v Ukraine, the Tribunal rejected the Respondent’s argument that jurisdiction was lacking because the Claimant no longer had control of the investment when the request was registered: The Tribunal agrees with the Claimant. The Respondent, in effect has attempted to create a standing requirement (i.e., a requirement of ownership or control of the investment at the time of registration of the Request) that does not otherwise exist under the BIT, ICSID Convention or ICSID Rules. Indeed, such a requirement, if it existed, would exclude a significant range of cases where claims are made in respect of the divestment or expropriation of an investment.659

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The above cases therefore make clear that Art. 25(1) of the ICSID Convention does not require continuous ownership of the investment until the dispute is brought to the Centre (see also paras. 44–54 supra; paras. 729–744 infra).660 This is obvious when the investor’s claim concerns the deprivation of his or her investment through host State action. But it would seem to equally hold true if the claimant has transferred or sold the investment after the measure has been taken that allegedly triggered the host State’s responsibility to a third party, provided the ICSID claim has not also been transferred to the third party in question.661

c) Origin of the Investment 402

At times, respondents have argued that there was no foreign investment in the absence of fresh capital imported into the host country, either because the investor raised capital locally or acquired the investment through transactions taking place entirely outside the host State, including in cases of corporate restructuring. Similarly,

657 See Helnan v Egypt, Award (3 July 2008) paras 110–120. 658 ibid paras 116, 120 (emphasis in the original). See also Mondev v United States (AF), Award (11 October 2002) para 91 (finding that NAFTA did not require ‘the claimant to maintain a continuing status as an investor under the law of the host State at the time the arbitration is commenced’). Tribunals have also consistently held that treaty protections, including access to investment arbitration, continued as long as the relevant treaty obligation was in force for the State concerned at the time of the alleged breach, even if the rights as such have come to an end. See Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 135; Pey Casado v Chile, Decision on Annulment (18 December 2012) para 168. See also Alghanim v Jordan, Award (14 December 2017) para 117. 659 GEA Group v Ukraine, Award (31 March 2011) para 124. 660 In this sense also, El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 135. 661 On the separability of ICSID claims from the underlying investment and their transferability, see paras 716–726 infra.

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in some cases, respondents have raised the argument that there was no investment because the investor had not injected its own funds, but financed its activities in the host State or relied on the funds of a third party. The origin of funds played a role during the Convention’s drafting. One delegate pointed out that the nationality of the investment was more important than that of the investor. Since the Convention’s aim was to encourage the international flow of capital, the Convention should apply to cases where the funds invested came from outside the host State, rather than from foreigners. In response, Mr. Broches said that he did not see how the Convention could make a distinction based on the origin of funds (History, Vol. II, pp. 261, 397–398). The idea to link the protection of an investment under the Convention to the origin of funds was therefore not pursued. The host State may, however, impose the requirement that a certain amount of fresh capital in foreign currency be imported into the country662 or that the investor must have actively made the investment him- or herself (see paras. 362–368 supra).663 In the absence of such requirements, investments made by foreign investors with capital raised locally, or relying on the capital of third parties, would also qualify as investments under Art. 25(1) of the ICSID Convention. In the same vein, it is not decisive if capital originates from third persons who may or may not be entitled to benefit from the ICSID Convention or from an applicable BIT. The only decisive criterion for the foreignness of an investment under the ICSID Convention is the nationality of the investor who has made the contribution and owns or controls the investment. Tribunals have consistently found the origin of capital used in investments to be immaterial.664 Only a few awards are sometimes read as implying that the origin of funds was relevant. They did so, however, in very specific contexts that suggest that the

662 See Amco v Indonesia, Award (20 November 1984) paras 220 242. 663 Such an ‘active investor’ requirement would concern the identity of the investor, rather than the origin of funds. See Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) para 222. 664 In addition to the cases referenced below, see ADC v Hungary, Award (2 October 2006) paras 310–325, 342, 343, 346, 347, 355, 356, 358, 360; Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 37 40, 62 66, 86, 100, 110, 122, 208 210; Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) paras 55–56, 71, 101, 110; Lemire v Ukraine, Decision on Jurisdiction and Liability (14 January 2010) paras 56–59; Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 198; Caratube v Kazakhstan, Award (5 June 2012) para 355; Arif v Moldova, Award (8 April 2013) para 383; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 307; Flughafen Zürich v Venezuela, Award (18 November 2014) paras 250–254; OIEG v Venezuela, Award (10 March 2015) para 242; von Pezold and others v Zimbabwe, Award (28 July 2015) para 288; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 220–231; Eiser v Spain, Award (4 May 2017) para 228; Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 642–643; Masdar v Spain, Award (16 May 2018) paras 201–202; Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 170. For similar statements of tribunals under non-ICSID rules, see Yukos Universal v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 432–435; Veteran Petroleum v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 488–491; Hulley Enterprises v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 431–434; Paushok v Mongolia (UNCITRAL), Award on Jurisdiction and Liability (28 April 2011) para 205; Gold Reserve v Venezuela (AF), Award (22 September 2014) para 261; A11Y v Czech Republic (UNCITRAL), Award (29 June 2018) paras 137–142; South American Silver v Bolivia (UNCITRAL), Award (22 November 2018) para 332–333; Seo v Korea (UNCITRAL), Final Award (27 September 2019) paras 103–104.

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tribunals did not mean to introduce a general origin-of-funds requirement into Art. 25(1) of the ICSID Convention.665 In Tradex v Albania, there was a dispute between the parties on the legal relevance of the financial sources of Tradex’s alleged foreign investment in Albania.666 Tradex claimed that the financial sources of its investment were irrelevant. The Tribunal agreed with Tradex on this point and noted that the law that formed the basis of the Tribunal’s jurisdiction contained a broad definition of investment that did not give room for further conditions. The Tribunal concluded that ‘the sources from which the investor financed the foreign investment in Albania are not relevant for the application of the 1993 Law.’667 In Olguín v Paraguay, the Tribunal rejected the Respondent’s argument that, in order to be protected, the funds invested had to originate in the country of which the investor was a national, even though such a requirement was not expressly indicated in the relevant BIT.668 Similarly, in Wena Hotels v Egypt, both the Tribunal and the ad hoc Committee found the alleged origin of the funds from other investors who were not entitled to benefit from the applicable BIT to be irrelevant.669 In Tokios Tokelės v Ukraine, the Claimant company had its registered seat in Lithuania. The Respondent argued that there was no protected investment, since the capital invested did not originate from outside the Ukraine. The majority of the Tribunal noted that neither the ICSID Convention nor the Lithuania–Ukraine BIT contained a requirement that capital used by an investor should originate in its State of nationality or otherwise originate from outside the host State.670 The majority of the Tribunal rejected an origin-of-capital requirement and said: The Respondent alleges that the Claimant has not proved that the capital used to invest in Ukraine originated from non-Ukrainian sources, and, thus, the Claimant has not made a direct, or cross-border, investment. Even assuming, arguendo, that all of the capital used by the Claimant to invest in Ukraine had its ultimate origin in Ukraine, the resulting investment would not be outside the scope of the Convention. The Claimant made an investment for the purposes of the Convention when it decided to deploy

665 In Phoenix Action v Czech Republic, Award (15 April 2009) para 97, the Tribunal addressed the situation of a post-breach restructuring by stating that ‘[t]he BITs are not deemed to create a protection for rights involved in purely domestic claims, not involving any significant flow of capital, resources or activity into the host State’s economy.’ In Capital Financial Holdings v Cameroon, Award (22 June 2017) para 426, the Tribunal stated that ‘the origin of funds arguably invested cannot be completely ignored’ (translation from French by the present author), but did so in the context of assessing whether the claimant company was used to disguise an investment by a national of the host State. In the same sense as understood here, see also ibid, Decision on Annulment (25 October 2019) paras 214, 220. The Award in Clorox v Venezuela, which has been interpreted as suggesting an origin-of-funds requirement under the applicable BIT in a case involving a corporate restructuring, has been set aside by the Swiss Federal Tribunal, which insisted, inter alia, that the BIT did not impose an origin-of-funds requirement that could be used to address situations of treaty-shopping. See Swiss Federal Tribunal, Case No 4A_306/2019, Judgment (25 March 2020) para 3.4.2.6. For the Award, see Clorox v Venezuela (UNCITRAL), Award (20 May 2019) paras 806–836. 666 Tradex v Albania, Award (29 April 1999) paras 105, 108–111. 667 ibid para 111. 668 Olguín v Paraguay, Award (26 July 2001) para 66, fn 9. 669 Wena Hotels v Egypt, Award (8 December 2000) para 126 and ibid, Decision on Annulment (5 February 2002) para 54. 670 Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras 74–82.

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capital under its control in the territory of Ukraine instead of investing it elsewhere. The origin of the capital is not relevant to the existence of an investment. . . . The origin of the capital used to acquire these assets is not relevant to the question of jurisdiction under the Convention.671

In Saipem v Bangladesh, the Claimant had entered into a contract to build a pipeline. The Respondent disputed the existence of an investment on the ground that the Claimant had not put its own money into the project.672 The Tribunal rejected this argument and said:

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it is true that the host State may impose a requirement that an amount of capital in foreign currency be imported into the country. However, in the absence of such a requirement, investments made by foreign investors from local funds or from loans raised in the host State are treated in the same manner as investments funded with imported capital. In other words, the origin of the funds is irrelevant. This results from the drafting history of the ICSID Convention and is confirmed by several arbitral decisions relating to BITs.673

More recently, the Tribunal in RREEF v Spain was faced with the argument that there was no investment in the sense of the applicable ECT and the ICSID Convention by the Claimants because the funds came from third parties that were involved as limited partners with one of the Claimants and thus shouldered the investment risk.674 The Tribunal rejected this objection, stating that

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there is no requirement for any assumption of risk contained in the ECT or the ICSID Convention just as there is no requirement for funds to be brought into a State from overseas in order for a national of one State to have an investment in another State (for example, a national of one State who merely inherits property in another State nonetheless has an investment in that other State). It would be improper to read such criteria . . . into those international instruments.675

The Tribunal in Gavrilović v Croatia confirmed the underlying consideration in a case where the origin of the funds used by one of the Claimants was in dispute by stating:

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There is no requirement under the BIT, the ICSID Convention, international law, or otherwise that a prospective investor must use his or her personal funds in order to be found to have made a contribution that qualifies as an investment.676

That the notion of investment does not require an influx of new capital into the host State was also confirmed in cases involving the acquisition of foreign investments

671 ibid paras 80, 81. But see also the reasoning to the contrary in ibid, Dissenting Opinion Weil (29 April 2004) paras 19, 20. 672 Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 103. 673 ibid para 106 (internal reference omitted). 674 See RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 150 and ibid, Award (11 December 2019) para 5. 675 ibid para 158. 676 Gavrilović v Croatia, Award (26 July 2018) para 216. Similarly, Sistem v Kyrgyzstan (AF), Decision on Jurisdiction (13 September 2007) paras 85–87; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 331–335.

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between foreign investors through transactions taking place entirely outside the host State. The Tribunal in Orascom v Algeria rejected the Respondent’s argument that the purchase of shares only qualified as an investment under the applicable BIT if made in the host State, inter alia by pointing out that: requiring a flow of funds directly into the host state would preclude a foreign investor from purchasing an existing investment from another foreign investor, because the purchase price would necessarily be paid to the foreign seller of the investment.677

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Conversely, changes in the nationality of shareholders of a claimant company, independently of whether additional funds are injected into the host State, will not have an effect on the protection of the investment of the company. Thus, in Cortec Mining v Kenya, the fact that a Canadian company became the sole shareholder in two UK companies, which in turn held a locally incorporated company in the host State that was involved in a mining project, was irrelevant for the assessment of whether the UK companies and the locally incorporated company held investments in Kenya.678 As the Tribunal stated, ‘[i]t is well established in arbitral law that the “origin of funds” issue is not a valid objection. The UK companies hold the shares. Through their corporate network money was invested in Kenya.’679 It follows that the origin of the funds is irrelevant for purposes of jurisdiction, unless it is specifically provided for in the instrument containing the parties’ consent. Whether investments are made from imported capital, from profits made locally, from payments received locally, or from loans, whether raised locally or from abroad, makes no difference for the jurisdiction of the Centre. The decisive criterion for the existence of a foreign investment is the nationality of the investor. An investment is a foreign investment if it is owned or controlled by a foreign investor. There is no additional requirement under the ICSID Convention of foreignness for the investment in terms of its origin. In the same way, the origin of capital from persons who are foreigners, but do not enjoy protection under the Convention because they do not meet the nationality requirements, is immaterial as long as the foreign national holding the investment is covered under the Convention.680 This position is also convincing from a policy perspective as the benefits of foreign investments accrue to host States not merely through a transfer of capital, but can also result from non-monetary assets that are essential to investments, such as know-how, technology, business experience, entrepreneurship, or intellectual property.

677 Orascom v Algeria, Award (31 May 2017) para 382 (referring to Gold Reserve v Venezuela (AF), Award (22 September 2014) paras 261–262). See also Gavrilović v Croatia, Award (26 July 2018) para 205 (considering it irrelevant that payment for the companies that qualified as the investment was made to an account outside the host State). For a similar conclusion, see also Pao Tatneft v Ukraine [2018] EWHC 1797 (Comm) (13 July 2018) para 69. 678 See Cortec Mining v Kenya, Award (22 October 2018) paras 108–110. 679 ibid para 271. See also ibid, paras 298–301. 680 See Douglas (n 444) 248–249; KT Asia v Kazakhstan, Award (17 October 2013) paras 188–206; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) paras 231, 254; Capital Financial Holdings v Cameroon, Award (22 June 2017) paras 423, 428; Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) paras 299, 338–344.

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d) Investment in the Host State’s Territory The Convention does not contain an express requirement that the investment must be located physically in the host State. The Sole Arbitrator in Gruslin v Malaysia II therefore suggested that there was no need for a territorial nexus of the investment under Art. 25(1) of the Convention; he pointed out though that the instrument expressing consent to the Centre’s jurisdiction may well require a territorial nexus.681 The Report of the Executive Directors, in turn, refers to the Directors’ belief that ‘adherence to the Convention by a country would provide additional inducement and stimulate a larger flow of private international investment into its territories, which is the primary purpose of the Convention.’682 This would suggest that some territorial nexus should exist.683 Unlike the Convention, many investment treaties, in their definitions of ‘investment,’ require a link to the territory of the parties for the investment in question to be covered by the treaty and for the host State’s consent to apply ratione materiae.684 For instance, the Argentina–United States BIT provides that ‘“investment” means every kind of investment in the territory of one Party owned or controlled directly or indirectly by nationals or companies of the other Party . . .’685 Similarly, Art. 1101(1) of the NAFTA speaks of ‘investments in the territory’ of a Party.686 Art. 26(1) of the ECT refers to investments ‘in the Area’ of a Party. Other investment treaties make reference to the host State’s territory not in the definition of investment, but in the substantive standards of protection. Art. II(2) of the Colombia–United Kingdom BIT, for example, provides that ‘[e]ach Contracting Party shall protect within its territory investments made in accordance with its laws by investors of the other Contracting Party . . .’687 Again other investment treaties require specifically that an investment must have been ‘admitted’ in the host State’s territory in order to be protected under the treaty.688 Traditional ‘brick and mortar’ investments that involve the establishment of the foreign investor, or of a subsidiary, or ownership of physical assets in the host State raise little concern in this respect, as a territorial nexus to the host State in these situations clearly exists. Arbitral tribunals have also clarified that the possible need for a territorial nexus does not constitute an obstacle to recognizing indirect investments

681 See Gruslin v Malaysia II, Award (27 November 2000) paras 13.5–13.12. Similarly, Zhinvali v Georgia, Award (24 January 2003) paras 377, 381. 682 See (1993) 1 ICSID Reports 23, 25, para 12. 683 In this sense Waibel (n 18) 1248–1249. 684 See Caroline Kleiner and Francesco Costamagna, ‘Territoriality in Investment Arbitration: The Case of Financial Instruments’ (2018) 9 JIDS 315, 319–320. 685 Argentina–United States BIT (n 32) Art. I(1)(a). 686 See also USMCA (n 338) Art. 14.1. 687 Colombia–United Kingdom BIT (signed 17 March 2010, entered into force 10 October 2014) Art. II(2). For the qualification of such territorial links as either establishing a limit on the tribunal’s jurisdiction or as affecting the claim on the merits, and the corresponding standard of review a tribunal should apply at the stage of jurisdiction, respectively admissibility, see Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 121. 688 See eg ASEAN Comprehensive Investment Agreement (signed 26 February 2009, entered into force 29 March 2012) Art. 4(a).

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in companies in the host State by means of an intermediate company established outside the host State as investments made in the host State (see paras. 337, 338 supra).689 The situation is more difficult with respect to intangible assets and rights arising under contractual arrangements, which may have a more remote connection to the host State’s territory and which may neither involve the investor’s ownership of assets nor even its physical presence in the host State’s territory. To what extent a territorial nexus is needed has been dealt with in arbitral jurisprudence in a number of cases, addressing in particular financial instruments (see paras. 419–428 infra), the transborder performance of contracts (see paras. 429–434 infra), and cases of transboundary harm (see para. 435 infra). The focus in these cases has principally been on territorial nexus requirements contained in investment treaties, without addressing the question whether such a requirement was part of the notion of investment in Art. 25(1) of the ICSID Convention. (i) Financial Instruments In cases involving claims arising out of financial instruments, respondents have regularly argued that the requirement of territoriality for investments was not met since the would-be investor had not established a significant physical presence in the host State. In Fedax v Venezuela, the investor had acquired promissory notes issued by the host country. The Tribunal rejected the Respondent’s argument that the Claimant had not invested ‘in the territory’ of Venezuela, as required under the Netherlands– Venezuela BIT. It said: While it is true that in some kinds of investments . . . such as the acquisition of interests in immovable property, companies and the like, a transfer of funds or value will be made into the territory of the host country, this does not necessarily happen in a number of other types of investments, particularly those of a financial nature. It is a standard feature of many international financial transactions that the funds involved are not physically transferred to the territory of the beneficiary, but put at its disposal elsewhere. In fact, many loans and credits do not leave the country of origin at all, but are made available to suppliers or other entities. . . . The important question is whether the funds made available are utilized by the beneficiary of the credit . . .690

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In CSOB v Slovakia, the Claimant bank had transferred non-performing receivables to a Collection Company in Slovakia. That Company was to pay CSOB for the assigned receivables. To enable the Collection Company to do so, it received the necessary funds from CSOB under the terms of a loan agreement. The repayment of the loan was secured by a guarantee of the Slovak Ministry of Finance. The Respondent argued that there was no expenditure of resources in the territory of the host State, as stipulated in the Czech–Slovak BIT. The Tribunal noted that the loan did not involve any spending or outlay of resources in the territory of the Slovak Republic.691 Nevertheless, it held:

689 See Guaracachi v Bolivia (UNCITRAL), Award (31 January 2014) para 358. See also Gruslin v Malaysia II, Award (27 November 2000) paras 10.3, 13.1–15.9; Gold Reserve v Venezuela (AF), Award (22 September 2014) paras 261–262; Orascom v Algeria, Award (31 May 2017) paras 382–385. See also Berschader v Russia (SCC), Award (21 April 2006) para 137. 690 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 41. 691 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 78, 79.

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The Tribunal notes, in this connection, that while it is undisputed that CSOB’s loan did not cause any funds to be moved or transferred from CSOB to the Slovak Collection Company in the territory of the Slovak Republic, a transaction can qualify as an investment even in the absence of a physical transfer of funds.692

That no flow of funds into the host State was needed in order for an investment to have a sufficient territorial nexus was confirmed by a number of tribunals in the context of cases not involving financial instruments.693 The requirement of a territorial nexus of the investment was also discussed in several cases involving sovereign bonds which were purchased by foreign individuals on the secondary market outside the debtor State and had no connection to specific investment projects or government activities (see also paras. 301–302 supra). The Tribunal’s majority in Abaclat and others v Argentina accepted that such bonds qualified as investments made in the territory of Argentina, as required by the Argentina–Italy BIT.694 It reasoned

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that the determination of the place of the investment firstly depends on the nature of such investment. With regard to an investment of a purely financial nature, the relevant criteria cannot be the same as those applying to an investment consisting of business operations and/or involving manpower and property. With regard to investments of a purely financial nature, the relevant criteria should be where and/or for the benefit of whom the funds are ultimately used, and not the place where the funds were paid out or transferred. Thus, the relevant question is where [sic] the invested funds ultimately made available to the Host State and did they support the latter’s economic development.695

The Tribunal also found that it was not necessary that the bonds were linked to a specific economic enterprise or operation taking place in the territory of the host State nor that a distinction needed to be made between the purchase of bonds by the Claimants on the secondary market and the original issuance in relation to underwriting banks as both types of activities formed part of the same economic operation.696 The Tribunal therefore concluded: There is no doubt that the funds generated through the bonds issuance process were ultimately made available to Argentina, and served to finance Argentina‘s economic development. Whether the funds were actually used to repay pre-existing debts of Argentina or whether they were used in government spending is irrelevant. In both

692 ibid para 78. 693 See Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 123–124; Alpha Projektholding v Ukraine, Award (8 November 2010) para 278–281; Gold Reserve v Venezuela (AF), Award (22 September 2014) paras 261–262; Orascom v Algeria, Award (31 May 2017) para 382. Similarly, RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 158. See also Pao Tatneft v Ukraine [2018] EWHC 1797 (Comm) (13 July 2018) para 69. 694 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 372–380. The dissenting opinion, by contrast, considered that ‘[a] territorial link or nexus is inherent in the concept of “investment”’ under both the ICSID Convention and the BIT. See ibid, Dissenting Opinion Abi-Saab (4 August 2011) paras 73–119 (quote at para 74). 695 ibid para 374 (relying in support of this position on Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 41, SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 136–140, and SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 111). 696 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 375–376.

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Several other tribunals relied on, and endorsed the findings in, Abaclat and others that sovereign bonds had a sufficient territorial nexus to the host State.698 The Tribunal’s majority in Ambiente Ufficio and others v Argentina agreed that bonds purchased on the secondary market qualified as investments made in the territory of the host State.699 It reasoned that ‘in order to identify in which State’s territory an investment was made, one has to determine first which State benefits from this investment.’700 By contrast, whether the State could ‘exercise full sovereign rights or . . . otherwise full control’ over the bonds was irrelevant for determining the territorial nexus.701 In the Tribunal’s view, [t]o which extent and in which ways those funds made available to the Respondent were actually used for promoting the economic development of Argentina does not fall into the sphere of the Claimants. Nor is it relevant whether the individual Claimants, when purchasing the security entitlements, actually believed or were aware that they were making ‘an investment in Argentina’. It suffices that, by virtue of the bonds issuance process and the circulation of bonds/security entitlements, funds were made available to the Respondent that were at its disposal to foster its economic development, and this notably suffices to qualify the investment at stake as one made ‘in the territory’ of Argentina.702

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In Deutsche Bank v Sri Lanka, the Tribunal was faced with the question whether a Hedging Agreement between the Claimant and the Respondent’s fully State-owned national petroleum company with a term of one year, which had the objective of protecting the Respondent against the impact of rising oil prices, qualified as an investment under the Germany–Sri Lanka BIT and Art. 25(1) of the Convention.703 The Tribunal’s majority found that the Agreement satisfied the territorial nexus to the host State, which the BIT required as a condition of jurisdiction.704 Endorsing and applying the test established in Abaclat and others, the Tribunal in Deutsche Bank equated territorial nexus with the question for whom the funds were ultimately used.705 It was thus irrelevant which of the Claimant’s subsidiaries or branches was involved in 697 ibid para 378. 698 See also Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 296–297, 320 (joining the question of whether bonds purchased on the secondary market were investments made in the territory of the host State to the merits, while holding that the original bonds qualified as investments made in the host State’s territory). The Tribunal in Poštová banka v Greece, Award (9 April 2015), which stated obiter that bonds purchased on the secondary market would not qualify as investments under Art. 25(1) of the ICSID Convention (see ibid paras 360–371), did not address the territorial nexus, either in respect of the Convention, or under the BIT (see ibid paras 248–350), even though it was raised by the Respondent (see ibid paras 110–113). 699 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 496–510. See also ibid, Dissenting Opinion Torres Bernárdez (2 May 2013) paras 298–317 (rejecting that the territorial nexus required under the BIT existed). 700 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 499. 701 ibid para 507. 702 ibid para 504. 703 See Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 283–312. 704 For the dissent, see ibid, Dissenting Opinion Khan (23 October 2012) paras 6–75. 705 Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 288–290.

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the Agreement’s preparation and finalization and what choice-of-law and choice-ofcourt clauses it contained.706 Instead, the Tribunal reasoned that it is undisputed that the funds paid by Deutsche Bank in execution of the Hedging Agreement were made available to Sri Lanka, were linked to an activity taking place in Sri Lanka and served to finance its economy which is oil dependent. The Tribunal therefore decides that the condition of a territorial nexus with Sri Lanka is satisfied.707

The territorial nexus was also addressed in cases that did not involve contractual relations with the host State, but with other commercial actors.708 In Adamakopoulos and others v Cyprus, the Tribunal concluded that life insurance contracts between the Claimants and a Greek insurance company had a territorial nexus with Cyprus because the contracts were used to purchase, for the benefit of the policyholders, bonds from a Cypriot bank, which was subjected to a bail-in that caused losses to the Claimants, thus qualifying as covered investments under the Cyprus–Greece BIT.709 The same held true, in the Tribunal’s view, for bonds issued in the United Kingdom by a UK company, but guaranteed by the same Cypriot bank, which were equally affected by the bail-in.710 (ii) Transborder Performance of Contracts The existence of a sufficient territorial nexus has also been discussed in respect of disputes that concerned the performance of transborder contracts, in particular as regards transborder services. Several cases concerned pre-shipment inspections that were essentially carried out outside the territory of the host country. Although the applicable BITs required covered investments to be made in the territory of the host State, the tribunals found the territorial links to be sufficient. The Tribunal in SGS v Pakistan relied on the fact that expenditures had been made, even though in a relatively small amount, by the investor in connection with its activity in the territory of Pakistan.711 In SGS v Philippines, the Respondent objected that the pre-shipment inspection services were not performed ‘in the territory’ of the Philippines as required by the BIT.712 The Tribunal dealt with this issue in some detail.713 It found that ‘[i]n accordance with normal principles of treaty interpretation, investments made outside the territory of the Respondent State, however beneficial to it, would not be covered by

706 ibid para 291. 707 ibid para 292. 708 For similar conclusions, see Quasar de Valores and others v Russia (SCC), Award on Preliminary Objections (20 March 2009) paras 135–144 (concluding that American Depositary Receipts, a specific type of security which were issued by a foreign bank outside Russia, but linked to a shareholding in the Russian company Yukos, qualified as protected investments in Russia); British Caribbean Bank v Belize (UNCITRAL), Award (19 December 2014) paras 208–211 (concluding that loan and security agreements made to acquire a company in the host State had a territorial nexus to that State). 709 Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) para 300. 710 ibid paras 302–304. See also Portigon v Spain, Decision on Jurisdiction (20 August 2020) (not public) (where the Tribunal reportedly concluded that financing by a German financial institution of renewable energy projects in Spain qualified as a protected investment under the ECT and Art. 25 of the ICSID Convention; see Bohmer (n 480)). 711 SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 46, 136. 712 SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 57, 70, 80–82, 89. 713 ibid paras 99–112.

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the BIT.’714 The Tribunal rejected a subdivision of activities inside and outside the host country. It found that a substantial and non-severable aspect of the overall service was provided in the Philippines.715 This, and the location of a liaison office in Manila, were sufficient to support the finding that there had been an investment in the territory of the Philippines.716 The Tribunal in BIVAC v Paraguay also found that the Claimant had made an investment in Paraguay because, even though the pre-inspection services under a contract with the Respondent were carried out abroad, the Claimant had established a local subsidiary, maintained liaison offices in Paraguay, and trained local personnel.717 The Tribunal in SGS v Paraguay agreed with these earlier decisions, concluding that an investment had been made in Paraguay, as no distinction between services provided abroad and in Paraguay could be made and as the Claimant actually maintained offices in the host State, independently of whether it was contractually required to do so or not.718 In LESI-DIPENTA v Algeria and in LESI & Astaldi v Algeria, the Tribunals addressed the need for a territorial link of the investment in the context of the discussion of whether a contribution was made in the host country when the contract to construct a dam in Algeria was canceled by the Respondent at a point when works on the dam had not yet substantially progressed. The Tribunals said: It is often the case that these investments are made in the country concerned, but that again is not an absolute condition. Nothing prevents investments from being committed, in part at least, from the contractor’s home country, as long as they are allocated to the project to be carried out abroad. . . . The fact that the amounts claimed may . . . cover primarily expenses incurred in the Claimant’s home country is not in itself a determining factor . . . Indeed, experience shows that in contracts of this kind the initial expenditures required to prepare the project and the worksite consist of material and intangible contributions that can and must often be made in the home country, but that are nevertheless destined for the country concerned.719

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In Inmaris Perestroika v Ukraine, part of the contractual obligations the Claimants had undertaken was to reconstruct the Khersones, a vessel owned by KMTI, one of the Respondent’s fully State-owned entities (see further paras. 144–145 supra).720 The contractual construction chosen to finance the reconstruction involved ‘the creation of a German ship investment fund to solicit funds directly from investors, carry out the reconstruction, and then recoup the funds by operating the Khersones under a bareboat charter (analogous to a lease).’721 Because many of the financial flows under this construction took place between the various Claimants in Germany, the Respondent

714 ibid para 99 (internal reference omitted). The Tribunal also mentioned the construction of an embassy in a third State, or the provision of security services to such an embassy, as examples of services that would not be protected as investments made in the territory of the host State. 715 ibid para 102. 716 ibid paras 104, 111, 112. 717 BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) paras 97–104. 718 SGS v Paraguay, Decision on Jurisdiction (12 February 2010) paras 109–117. 719 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 14(i); see also LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 73(i). 720 See Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 113–125. 721 ibid para 38.

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objected that no investment had been made in the territory of Ukraine. The Tribunal rejected this objection. It found that an investment may be made in the territory of a host State without a direct transfer of funds there, particularly if the transaction accrues to the benefit of the State itself. Here, the benefits of Claimants’ investments, considered as an integrated whole, were received by Respondent. It is undisputed that KMTI, a Ukrainian state entity, now owns a substantially renovated sailing vessel for the training of its cadets, which also offers the prospect of revenues from tourist operations. Respondent does not dispute that the funds for such a renovation would otherwise have had to come from the State’s coffers, or that the State lacked the financial resources to undertake the renovation. Claimants’ expenditures in connection with the Khersones created value in Ukraine, on the basis of contractual relationships with a Ukrainian state entity.722

The Inmaris tribunal also addressed how the concept of the general unity of the investment, which was involved because of the collaboration of multiple companies on the Claimants’ side in implementing its activities in Ukraine (see paras. 144–145 supra), interacted with the territorial nexus required under the BIT. In this respect, it pointed out:

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The division of labor among the Claimants does not affect the nature of the integrated investment in which they participated. Likewise, it does not affect the fact that the investment as a whole was ultimately undertaken in relation to property belonging to the Ukrainian state, and thus sufficiently in the territory of Ukraine. It is not necessary to parse the territorial nexus of each and every component of the Claimants’ investment; it is the investment as a whole that has that nexus.723

(iii) Transboundary Harm The territorial nexus between an investment and the territory of the host State is also at play in cases involving transboundary harm. In Bayview v Mexico, a case decided under the ICSID Additional Facility, farmers in Texas claimed that Mexico had breached investor rights under Chapter 11 of the NAFTA by seizing and diverting water from a transboundary river upstream in Mexico, thereby reducing the amount of irrigation water available downstream in the United States. The Tribunal found that the Claimants did not have, as required by Art. 1101(1) of the NAFTA, investments in the territory of the State that has adopted or maintained the challenged measures, that is, Mexico, but only in the United States.724 The situation may be different for

722 ibid para 124. See also ibid para 123 (relying for the same point on Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 41 and CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 78). 723 Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 125. 724 Bayview v Mexico (AF), Award (19 June 2007) paras 105–122. See also Canadian Cattlemen v United States (UNCITRAL), Award on Jurisdiction (28 January 2008) para 111, where the Tribunal confirmed in a case involving the claim by Canadian cattle raisers that a US ban on importing Canadian cattle into the United States due to bovine spongiform encephalopathy (BSE) that ‘only investors who may avail themselves of the protections of Chapter Eleven . . . are actual and prospective foreign investors in another NAFTA Party.’ Similarly, Grand River v United States (UNCITRAL), Award (12 January 2011) paras 87–89; Apotex v United States (UNCITRAL), Award on Jurisdiction and Admissibility (14 June 2013) paras 149–241.

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transboundary harm occurring in third countries arising out of action taken by, and affecting an investment made in the territory of, the host State itself (see also para. 131 supra). (iv) Conclusion 436

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The case law does not yield an entirely clear picture concerning a requirement for a territorial nexus of the investment as a limit on the Centre’s jurisdiction under Art. 25(1) of the Convention. However, given the absence of a textual basis, no such additional requirement should be read into the ICSID Convention. Furthermore, where the document providing the basis of consent refers to investments made in the territory of the State, a certain degree of flexibility will be appropriate. Not all investment activities are physically located in the host State. This is particularly true for financial instruments and many other contractual arrangements. If a treaty includes loans and claims to money in its definition of investment, it would be unrealistic to require a physical presence in, or a transfer of funds into, the host State. Similar considerations will apply to intellectual property, which is typically included in definitions of investment in investment treaties. Other novel phenomena, such as investments in the digital economy,725 or in areas beyond territorial sovereignty in the oceans and space, will also require a flexible handling of the extent to which a link to the territory of the host State is required.726 In the end, the interpretation of a territorial requirement will, to a large extent, depend on the type of investment involved. Investments in movable and particularly immovable property will by their nature have a territorial nexus. In cases involving financial or other contractual obligations the locus of the investment can often be determined by reference to the debtor, or the beneficiary, and its location. In this way financial instruments issued by States, as well as other contractual arrangements made by the State, have their situs in that State independently of the governing law, the choice of forum, or the place of performance.727 It is also not necessary that funds are injected into the territory of the host State. Investment through shareholding may be seen to take place at the company’s place of registration or main place of activity. Services may be

725 See further Helena Jung Engfeldt, ‘Should ICSID Go Gangnam Style in Light of Non-Traditional Foreign Investments Including Those Spurred on by Social Media? Applying an Industry-Specific Lens to the Salini Test to Determine Article 25 Jurisdiction’ (2014) 32 Berkeley JIL 44; Eniko˝ Horváth and Severin Klinkmüller, ‘The Concept of “Investment” in the Digital Economy: The Case of Social Media Companies’ (2019) 20 JWIT 577. 726 See the contributions in Stephan W Schill, Christian J Tams and Rainer Hofmann (eds), ‘Oceans and Space: New Frontiers in Investment Protection?’ (2018) 19 JWIT 765–1058. 727 See also Romak v Uzbekistan (UNCITRAL), Award (26 November 2009) para 237 (rejecting the argument that a contract that provided for the delivery of wheat for the host State lacked the quality as a protected investment because the delivery location was outside the host State’s territory by stating that ‘unless contracting States have made “territoriality” an express pre-requisite for treaty coverage (which is not the case in the BIT), references to “territory” normally refer to the benefit that the host State expects to derive from the investment’). Similarly, Nova Scotia Power v Venezuela (AF), Award (30 April 2014) para 130 (stating that ‘[a] contractual right by its very nature has no fixed abode in the physical sense, for it is intangible. However, a lack of physical presence is not per se fatal to meeting the territoriality requirement; intangible assets, with no accompanying physical in-country activities, have been accepted as investments for the purposes of bilateral investment treaties by many tribunals. The awards of those tribunals are therefore apposite and instructive. Further, the Tribunal agrees with the approach taken in several such cases, whereby tribunals have looked to whether the host State received a benefit’).

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seen to be located in a State if their chief impact is in that State. The need for a territorial nexus will, however, prevent claims for transboundary harm where the challenged measures originate from a third State and not the State where the investment has been made.

7. Legality of the Investment In various cases, respondent States have argued that the Centre lacked jurisdiction because the investment or the claimant’s conduct in making it, including through acts of fraud, misrepresentation, or corruption, was unlawful, either under domestic law or other international legal rules or principles.728 These arguments have given rise to the question to what extent the legality of the investment has jurisdictional relevance under Art. 25(1) of the ICSID Convention. In contract-based disputes, arbitral tribunals have, except under narrow circumstances, consistently rejected the jurisdictional relevance of an alleged illegality (see paras. 439–446 infra). In treaty-based cases, and cases based on domestic legislation, which will have to be treated analogously, the situation is more complex, with arbitral jurisprudence offering a greater variety of approaches (see paras. 447–468 infra). However, compliance with domestic law or other international legal instruments or principles should not, as suggested, among others, by the Tribunal in Phoenix Action v Czech Republic,729 be read either into the definition of investment under Art. 25(1) or added as further implied jurisdictional requirements to Art. 25(1) of the ICSID Convention (see paras. 469–479 infra).

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a) Legality of the Investment in Contract-Based Disputes In contract-based cases, ICSID tribunals have consistently considered that both the investment’s and the investor’s compliance with domestic law do not, in principle, 728 For further discussion, see Christina Knahr, ‘Investments “in Accordance with Host State Law”’ in August Reinisch and Christina Knahr (eds), International Investment Law in Context (Eleven 2008) 27; Andrea Carlevaris, ‘The Conformity of Investments with the Law of the Host State and the Jurisdiction of International Tribunals’ (2008) 9 JWIT 35; Ursula Kriebaum, ‘Illegal Investments’ (2010) 4 Austrian YB Int’l Arb 307; Rahim Moloo and Alex Khachaturian, ‘The Compliance with the Law Requirement in International Investment Law’ (2011) 34 Fordham ILJ 1473; Andrew Newcombe, ‘Investor Misconduct: Jurisdiction, Admissibility, or Merits?’ in Brown and Miles (n 255) 187; Stephan W Schill, ‘Illegal Investments in Investment Treaty Arbitration’ (2012) 11 LPICT 281; Zachary Douglas, ‘The Plea of Illegality in Investment Treaty Arbitration’ (2014) 29 ICSID Rev 155; Jarrod Hepburn, ‘In Accordance with Which Host State Laws? Restoring the “Defence” of Investor Illegality in Investment Arbitration’ (2014) 5 JIDS 531; Thomas Obersteiner, ‘“In Accordance with Domestic Law” Clauses: How International Investment Tribunals Deal with Allegations of Unlawful Conduct of Investors’ (2014) 31 J Int’l Arb 265; Katharina Diel-Gligor and Rudolf Hennecke, ‘Investment in Accordance with the Law’ in Bungenberg and others (n 18) 566; Michael Polckinghorne and Sven-Michael Volkmer, ‘The Legality Requirement in Investment Arbitration’ (2017) 34 J Int’l Arb 149. Specifically on corruption in investment arbitration, see Jason Webb Yackee, ‘Investment Treaties and Investor Corruption: An Emerging Defense for Host States?’ (2012) 52 Va JIL 723; Cameron A Miles, ‘Corruption, Jurisdiction and Admissibility in International Investment Claims’ (2012) 3 JIDS 329; Aloysius P Llamzon, Corruption in International Investment Arbitration (OUP 2014); Ralph Alexander Lorz and Manuel Busch, ‘Investment in Accordance with the Law – Specifically Corruption’ in Bungenberg and others (n 18) 577; Aloysius Llamzon and Anthony Sinclair, ‘Investor Wrongdoing in Investment Arbitration: Standards Governing Issues of Corruption, Fraud, Misrepresentation and Other Investor Misconduct’ in Albert Jan van den Berg (ed), Legitimacy: Myths, Realities, Challenges (Kluwer 2015) 451. See also Kathrin Betz, Proving Bribery, Fraud and Money Laundering in International Arbitration (CUP 2017). 729 See Phoenix Action v Czech Republic, Award (15 April 2009) paras 100–116.

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constitute obstacles to the Tribunal’s jurisdiction, but rather concern the merits of the claims. They also agree that the legality of the investment is not an element of the definition of the investment in the sense of Art. 25(1) of the ICSID Convention. A jurisdictional effect can only arise under narrow circumstances, namely if noncompliance of the investment or the investor’s conduct with the law affects the validity of the host State’s consent to the jurisdiction of the Centre. In World Duty Free v Kenya, a case that involved the investor bribing the Kenyan President in order to obtain a contract for the construction, maintenance, and operation of duty-free complexes at the Nairobi and Mombassa international airports, the Tribunal accepted its jurisdiction under the ICSID clause in the contract, but rejected the investor’s claim for restitution and compensation of assets invested on the merits.730 In the Tribunal’s view, the investor’s illegal conduct only could have affected the jurisdiction of the Centre, if the bribe had specifically aimed at the conclusion of the arbitration agreement, thus undermining the validity of the parties’ consent to ICSID arbitration; otherwise, the ICSID clause was severable from the rest of the contract and remained unaffected by the illegality in question.731 Notably, the Tribunal addressed the bribe paid by the investor not only under English and Kenyan law, which the contract had stipulated as its applicable law,732 but also under the concept of ‘international public policy,’733 which the Tribunal understood as follows: The term ‘international public policy’, however, is sometimes used with another meaning, signifying an international consensus as to universal standards and accepted norms of conduct that must be applied in all fora. It has been proposed to cover that concept in referring to ‘transnational public policy’ or ‘truly international public policy’.734

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The Tribunal found that corruption could contravene ‘transnational public policy’ as it was sanctioned in various international agreements, both at the universal and at the regional levels.735 Addressing corruption as part of the merits of the dispute, the Tribunal concluded: In light of domestic laws and international conventions relating to corruption, and in light of the decisions taken in this matter by courts and arbitral tribunals, this Tribunal is convinced that bribery is contrary to the international public policy of most, if not all, States or, to use another formula, to transnational public policy. Thus, claims based on contracts of corruption or on contracts obtained by corruption cannot be upheld by this Arbitral Tribunal.736

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A similar framework of analysis was applied by the Tribunals in the two joint cases in Niko Resources v Bangladesh. These cases involved allegations that the investor 730 731 733 734

See World Duty Free v Kenya, Award (4 October 2006) paras 130–188. ibid para 187. 732 ibid paras 158–181. ibid paras 138–157. ibid para 139 (referring to Pierre Lalive, ‘Transnational (or Truly International) Public Policy and International Arbitration’ in Pieter Sanders (ed), Comparative Arbitration Practice and Public Policy in Arbitration (ICCA Congress Series No 3) (Kluwer 1987) 258 and International Law Association, ‘International Commercial Arbitration on Public Policy as a Bar to Enforcement of International Arbitral Awards’ (Report of the Seventieth Conference, New Delhi, 2002)). 735 World Duty Free v Kenya, Award (4 October 2006) para 139. 736 ibid para 157.

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engaged in corruption to obtain contracts for the development of gas fields and the sale of gas in the host State.737 While agreeing that ‘[a] contract in conflict with international public policy cannot be given effect by arbitrators,’738 the Tribunals in Niko Resources considered, as in World Duty Free, that corruption in obtaining the contracts in question would not affect the validity of the (severable) arbitration clause, unless the arbitration clause itself was procured by means of corruption.739 This jurisprudence confirms that questions concerning the legality of the investment are not matters that concern the definition of the notion of investment in the sense of Art. 25(1) of the Convention, but rather constitute a defense to the merits of the claim for which an ICSID tribunal has jurisdiction.740 The Tribunal in Niko Resources v Bangladesh also addressed the Respondent’s argument that it should decline jurisdiction because (i) the offer of ICSID arbitration applied only to investments made in good faith; (ii) accepting jurisdiction would jeopardize the integrity of the ICSID dispute settlement mechanism; and (iii) the unclean hands doctrine would exclude the Tribunal’s jurisdiction.741 In respect of the argument that only good faith investments were protected, the Tribunal said:

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The question whether the investment was made in good faith or not and, if not, what consequences would have to be drawn from it, are matters which must be resolved in the agreed manner. In a contractual dispute as the present one, alleged or established lack of good faith in the investment does not justify the denial of jurisdiction but must be considered as part of the merits of the dispute.742

The Tribunal in Niko Resources also rejected the Respondent’s submission that it ‘would violate the principles of international public policy to afford the Claimant access to ICSID.’743 In this respect, the Tribunal stated that it

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is mindful of the importance of the ICSID dispute settlement mechanism and its integrity. In the Tribunal’s view, such integrity is promoted, and not violated, by the adjudication of disputes submitted to the Centre under a valid consent to arbitrate. Faced with a binding arbitration agreement and subject to the specific requirements under the ICSID Convention, considered elsewhere in this decision, the Tribunal must address the substance of the dispute. In so doing, the integrity of the system is protected by the resolution of the contentions made (including allegations of violation of public policy) rather than by avoiding them.744

The above-mentioned contract-based ICSID cases therefore confirm that the legality of the investment or the investor’s conduct are not elements of the notion of investment under Art. 25(1) of the ICSID Convention. Furthermore, a stand-alone requirement for legality cannot be read into Art. 25(1) as an additional, unwritten jurisdictional

737 See Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 423–485 and ibid, Decision on the Corruption Claim (25 February 2019) paras 568–597. 738 ibid, Decision on Jurisdiction (19 August 2013) para 434. 739 ibid paras 440–464; ibid, Decision on the Corruption Claim (25 February 2019) paras 572–576. 740 See also ibid, Decision on the Corruption Claim (25 February 2019) para 597. 741 ibid, Decision on Jurisdiction (19 August 2013) para 466. 742 ibid para 471. See also ibid, Decision on the Corruption Claim (25 February 2019) para 581. 743 ibid, Decision on Jurisdiction (19 August 2013) para 473. 744 ibid para 474. See also ibid, Decision on the Corruption Claim (25 February 2019) para 581.

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requirement. Illegality of the investment can only have jurisdictional relevance if it affects the parties’ consent to the jurisdiction of the Centre. This holds true independently of whether non-compliance with domestic law or a breach of other international instruments or principles is at stake.

b) Legality of the Investment in Treaty-Based Disputes 447

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In treaty-based cases, the situation is more complex; the same holds true for cases based on domestic legislation, which have to be treated analogously. In these cases, compliance with domestic law can have jurisdictional relevance in two situations: (1) as a prerequisite for the very existence of the right or asset that allegedly constitutes the investment (see paras. 448–451 infra); and (2) as a condition of the parties’ consent to the jurisdiction of the Centre (see paras. 452–464 infra). Beyond those two situations, compliance with domestic law is immaterial for the jurisdiction of the Centre. Compliance with domestic law would only be relevant as a matter of the substantive protection of an investment (see paras. 465–468 infra). Above all, a domestic legality requirement cannot be read as an element into the notion of investment under Art. 25(1), so that the Centre’s jurisdiction would be limited to ‘assets invested in accordance with the laws of the host State’ or ‘assets invested bona fide,’ as suggested by the Tribunal in Phoenix Action v Czech Republic.745 For similar reasons, non-compliance with other international legal instruments or principles, including in particular ‘international’ or ‘transnational public policy,’ should not be analyzed as a matter concerning the jurisdiction of the Centre (see paras. 469–479 infra). (i) Domestic Law and Existence of a Right or Asset In certain circumstances, compliance with domestic law can be relevant for determining whether an investment in the sense of Art. 25(1) of the Convention exists (see also Art. 42, paras. 29–34).746 Thus, in a number of cases the issue arose whether the claimants had validly – that is, in accordance with the domestic law applicable to the transaction – acquired title to the shareholding in a locally incorporated company, which was argued to constitute the investment in question.747 In Saba Fakes v Turkey, the Tribunal concluded that no investment existed under both Art. 25 of the ICSID Convention and the Netherlands–Turkey BIT in the form of the alleged shareholding in the Turkish company Telsim, because ‘the parties to the . . . transactions never had any intention to transfer any rights to the Claimant in relation to Telsim’s shares, nor did they actually transfer such rights.’748

745 See Phoenix Action v Czech Republic, Award (15 April 2009) para 114. 746 See Douglas (n 728) 178–179; Jan Asmus Bischoff and Richard Happ, ‘The Notion of Investment’ in Bungenberg and others (n 18) 495, 521. 747 The same would apply to the acquisition of other assets. For a case concerning the acquisition of land, see Vestey v Venezuela, Award (15 April 2016) paras 202–206 (also addressing the conceptual difference between the role of domestic law for the existence of an investment and for determining the legality of the investment under a legality clause in an investment treaty). 748 Saba Fakes v Turkey, Award (14 July 2010) para 136. The shareholding itself could therefore not constitute an investment; see ibid para 135. The Tribunal, however, also assessed whether the content of the transaction as it stood qualified as an investment in the sense of Art. 25(1) of the Convention, but concluded that it did not, because it did not involve the making of a contribution, nor qualified in terms of duration and risk. See ibid paras 137–149.

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In Libananco v Turkey, the Tribunal emphasized that domestic law determined the existence and validity of the alleged share transfer, which it ultimately found not to have been proven. It stated:

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[I]t is common ground between the Parties that Turkish law applies to the issue of whether (and when) Libananco acquired the shares in question and thus had an ‘Investment’ under Article 26(1) of the ECT and Article 25(1) of the ICSID Convention. . . . The Tribunal will also apply Turkish law (evidence of which has been given by both Parties) to determine whether there has been a valid transfer of the shares in question to Libananco as this is a question of domestic law.749

Domestic law is also relevant for the determination of an investment in the sense of Art. 25(1) of the Convention if the purported investment consists of a specific right or asset the existence of which depends on its creation by, or recognition under, domestic law. As the Tribunal in Cortec Mining v Kenya graphically stated, albeit in the context of the notion of investment contained in a BIT: ‘it is impossible to conclude that the parties intended to protect non-existent assets.’750 In most cases, it will be the domestic law of the host State that determines the existence of the assets or rights that are claimed to be protected investments.751 In other circumstances, however, the domestic law of a third State may become relevant. In Kim and others v Uzbekistan, the Tribunal determined that the question of whether the Claimants had made an investment in the host State in the sense of both Art. 25(1) of the ICSID Convention and the Kazakhstan– Uzbekistan BIT in the form of indirect shareholdings in two companies incorporated in Uzbekistan depended on the validity, under Cypriot law, which was the law the Tribunal determined to be applicable to that issue, of oral trusts that formed part of the structure through which the Claimants claimed to hold their investment.752

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(ii) Legality Clauses in Investment Treaties Compliance with domestic law can also have relevance for determining the jurisdiction of the Centre under Art. 25(1) of the Convention, if such compliance constitutes a condition of the respondent State’s consent. This will particularly be the case if the applicable treaty specifies that the investment must be made ‘in accordance with host State law’ in order to qualify as an ‘investment’ under the treaty. In fact, IIAs frequently include so-called in-accordance-with-host-State-law clauses in their definitions of the

749 Libananco v Turkey, Award (2 September 2011) paras 112–113. See also ibid paras 385 ff. For similar approaches concerning the valid acquisition of shareholdings, see Pey Casado v Chile, Award (8 May 2008) paras 517, 525–530, 531, 537–544; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 52, 115–122; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 246–305; EuroGas and Belmont v Slovakia, Award (18 August 2017) paras 375–420; Anglo-Adriatic v Albania, Award (7 February 2019) paras 222–224, 247; Italba v Uruguay, Award (22 March 2019) paras 213, 280. See also Europe Cement v Turkey (AF), Award (13 August 2009) paras 139–145, 163, 167, 170; Cementownia v Turkey (AF), Award (17 September 2009) paras 114–149. 750 Cortec Mining v Kenya, Award (22 October 2018) para 343. 751 See Gavrilović v Croatia, Award (26 July 2018) para 432 (stating that ‘Croatian law controls the establishment of property rights in Croatia’). Similarly, Accession Mezzanine v Hungary, Award (17 April 2015) para 187; Philip Morris v Uruguay, Award (8 July 2016) paras 177, 178. See also Nordzucker v Poland (UNCITRAL), Partial Award on Jurisdiction (10 December 2008) para 167. 752 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 289–300.

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term ‘investment’ or in provisions that otherwise define the scope of application of the respective treaty.753 In disputes involving such clauses, host States have sometimes argued that this meant that the concept of ‘investment,’ and hence the reach of the protection under the IIA, had to be determined entirely by reference to their own domestic law. Tribunals have rejected this approach. In Salini v Morocco, the Tribunal said in response to this argument: The Tribunal cannot follow the Kingdom of Morocco in its view that paragraph 1 of Article 1 [of the BIT] refers to the law of the host State for the definition of ‘investment’. In focusing on ‘the categories of invested assets (. . .) in accordance with the laws and regulations of the aforementioned party’, this provision refers to the validity of the investment and not to its definition. More specifically, it seeks to prevent the Bilateral Treaty from protecting investments that should not be protected, particularly because they would be illegal.754

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Other tribunals have also held that the reference to the host State’s domestic law concerned not the definition of the term ‘investment,’ but the legality of the investment.755 When an IIA specifies that an investment must be made ‘in accordance with host State law,’ this specification simultaneously limits the host State’s consent to compliant investments. As this limitation only affects the host State’s consent as expressed in the respective treaty, it does not add a legality requirement to the notion of ‘investment’ as used in Art. 25(1) of the Convention. This analytical structure is widely reflected in the jurisprudence of ICSID tribunals. The decision in Saba Fakes v Turkey offers an example. In that case, the Netherlands– Turkey BIT provided that ‘[t]he present Agreement shall apply to investments . . . which are established in accordance with the laws and regulations in force in the [host State’s] territory at the time the investment was made,’ which the Tribunal interpreted as follows: If this condition [i.e., fulfilment of the legality clause in the BIT] is not satisfied, the BIT does not apply. As a result, the Contracting Party cannot be deemed to have given its consent to arbitrate the dispute under Article 8(3) of the BIT and there would therefore be no consent to the Centre’s jurisdiction within the meaning of Article 25(1) of the ICSID Convention.756

753 For detailed discussion, see Knahr (n 728); Schill (n 728); Hepburn (n 728); Obersteiner (n 728). The same would hold true in respect of in-accordance-with-host-State-law clauses in domestic legislation providing for access to the Centre. For an example, see Anglo-Adriatic v Albania, Award (7 February 2019) paras 281–292. 754 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 46 (emphasis in the original). 755 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 24(iii); Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 33, 34; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 105–110; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 79–82, 120–124; SGS v Paraguay, Decision on Jurisdiction (12 February 2010) paras 118–123; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) para 140; Convial Callao v Peru, Award (21 May 2013) paras 382–390. 756 Saba Fakes v Turkey, Award (14 July 2010) para 115. See also ibid paras 120–121. For a similar conceptualization, see eg Inceysa v El Salvador, Award (2 August 2006) paras 142–145, 156, 162, 207; Fraport v Philippines I, Award (16 August 2007) paras 305–306; Quiborax v Bolivia, Decision on

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Arbitral tribunals, however, also stress that not every breach of domestic law will trigger the operation of an in-accordance-with-host-State-law clause. Instead, tribunals tend to read the clauses narrowly and subject to a number of limitations. These concern the severity of a violation of domestic law (see para. 458 infra), the nature of the violated rules and their addressee (see paras. 459–462 infra), the relevance of those rules to the making rather than the operation of the investment (see para. 463 infra), and the host State’s behavior in relation to any violation (see para. 464 infra). Tribunals generally also place the burden of proving that the investor has committed a relevant illegality on the host State.757 As for the severity of the violation, tribunals have consistently recognized that minor infractions of host State law will not exclude the protection of an investment under the treaty in question.758 For example, if the investor fails to observe a bureaucratic formality in establishing its investment, then it will not have breached any legality requirement that would exclude protection under the treaty. As the Tribunal in Kim and others v Uzbekistan summarized:

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[T]he Tribunal is not aware of any authority that argues that the legality requirement has no limits. On the contrary, many, if not all, other tribunals exclude minor or trivial acts not in compliance with legislation as not the type of acts intended to be captured by a legality requirement.759

Tribunals are also consistent in limiting the application of ‘in accordance with host State law’ clauses to domestic rules of a certain nature. Some tribunals consider that such clauses only exclude investments from treaty protection that are in breach of rules concerned with the regulation of investments, but not all other domestic rules that apply to a business venture. Under that approach, a violation of domestic rules of general application, such as tax legislation, or competition law, would not make an investment illegal in the sense of an in-accordance-with-host-State-law clause.760 Other tribunals

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Jurisdiction (27 September 2012) para 255; Metal-Tech v Uzbekistan, Award (4 October 2013) para 373; Fraport v Philippines II, Award (10 December 2014) para 467. See eg Desert Line v Yemen, Award (6 February 2008) para 105; Rumeli v Kazakhstan, Award (29 July 2008) para 320; Hamester v Ghana, Award (18 June 2010) para 132; Saba Fakes v Turkey, Award (14 July 2010) paras 129, 131; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 259, 262; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 324; Convial Callao v Peru, Award (21 May 2013) para 420; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) para 417. See also Philip Morris v Australia (UNCITRAL), Award on Jurisdiction and Admissibility (17 December 2015) para 514. See Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 86; Metalpar v Argentina, Decision on Jurisdiction (27 April 2006) para 84; Mytilineos v State Union of Serbia & Montenegro and Serbia (UNCITRAL), Partial Award on Jurisdiction (8 September 2006) paras 151–157; Desert Line v Yemen, Award (6 February 2008) paras 104–106; Rumeli v Kazakhstan, Award (29 July 2008) para 168; Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 144–145; Alpha Projektholding v Ukraine, Award (8 November 2010) para 297; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 266; Vannessa Ventures v Venezuela (AF), Award (16 January 2013) para 167; Convial Callao v Peru, Award (21 May 2013) para 410; Hochtief v Argentina, Decision on Liability (29 December 2014) para 199; Mamidoil v Albania, Award (30 March 2015) paras 479–483; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 390, 394; Cortec Mining v Kenya, Award (22 October 2018) para 320. Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) para 390. See eg Saba Fakes v Turkey, Award (14 July 2010) paras 119–120.

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focus on whether the rule in question protects an interest of the host State of a fundamental nature.761 This would include, for example, prohibitions or restrictions relating to foreign ownership of certain assets,762 general prohibitions of certain business activities,763 as well as the rules prohibiting fraud, misrepresentation, or corruption to secure an investment or profits.764 As stated by the Tribunal in Kim and others v Uzbekistan, [t]he denial of the protections of the BIT is a harsh consequence that is a proportional response only when its application is triggered by noncompliance with a law that results in a compromise of a correspondingly significant interest of the Host State.765

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Closely related to the nature of the violated rules is the issue of whom the rules in question were addressed to and who violated them. In most cases, the breaches of domestic law assessed under an in-accordance-with-host-State-law clause relate ‘to the investor’s actions in making the investment.’766 By contrast, breaches of domestic law committed by a partner entity of the foreign investor who was a public entity of the host State could not have the effect of excluding the investment’s protection.767 The only decision at odds with this line of jurisprudence is the decision of the Tribunal in Anderson and others v Costa Rica. By application of the in-accordancewith-host-State-law clause in the Canada–Costa Rica BIT, payments, in the form of term deposits that the Claimants had made into a Ponzi scheme set up in Costa Rica were excluded from treaty protection. The Tribunal’s reason for this exclusion was that the local operators of that scheme had committed a criminal offense in operating the scheme, inter alia, because they did so without the license Costa Rican banking

761 Desert Line v Yemen, Award (6 February 2008) para 104; Rumeli v Kazakhstan, Award (29 July 2008) paras 168, 319; Allard v Barbados (UNCITRAL), Award on Jurisdiction (13 June 2014) para 94; Hochtief v Argentina, Decision on Liability (29 December 2014) para 199; Cortec Mining v Kenya, Award (22 October 2018) paras 345–349. 762 Fraport v Philippines II, Award (10 December 2014) paras 339–340, 388–467; Bear Creek Mining v Peru, Award (30 November 2017) para 124; Phoenix Action v Czech Republic, Award (15 April 2009) para 101; Mamidoil v Albania, Award (30 March 2015) para 372. 763 Mamidoil v Albania, Award (30 March 2015) para 372. Such a prohibition would arguably also cover the examples provided in Phoenix Action v Czech Republic, Award (15 April 2009) para 78 (‘investments made in violation of the most fundamental rules of protection of human rights, like investments made in pursuance of torture or genocide or in support of slavery or trafficking of human organs should not be granted investment protection, regardless of whether such acts are contrary to domestic law’). 764 See eg Inceysa v El Salvador, Award (2 August 2006) paras 101–127, 208, 257; Hamester v Ghana, Award (18 June 2010) paras 123–139; Metal-Tech v Uzbekistan, Award (4 October 2013) para 165; Flughafen Zürich v Venezuela, Award (18 November 2014) paras 129–131; Unión Fenosa v Egypt, Award (31 August 2018) para 7.46; Glencore v Colombia, Award (27 August 2019) para 665. See also Plama v Bulgaria, Award (27 August 2008) paras 130–146. 765 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) para 396 (emphasis in the original). See also ibid paras 404–413. For further endorsements of proportionality considerations, see Álvarez y Marín v Panama, Award (12 October 2018) paras 151–154; Cortec Mining v Kenya, Award (22 October 2018) para 320; Anglo-Adriatic v Albania, Award (7 February 2019) para 288. See also Mamidoil v Albania, Award (30 March 2015) paras 479–494. 766 Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 182 (emphasis in the original). 767 See Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 139; Alpha Projektholding v Ukraine, Award (8 November 2010) para 299.

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regulations required for financial intermediaries and because the scheme itself was fraudulent.768 The Tribunal reached this result even though the Claimants themselves were not subject to Costa Rican banking regulations, had not themselves violated Costa Rican law, and did not apparently know about the violation of domestic law by the operators of the scheme. The method by which the Tribunal imputed the wrongful conduct of the local operators to the Claimants was via a finding that the Claimants did not undertake proper due diligence before making the investment.769 Another noteworthy aspect of this decision is its interpretation of the in-accordance-with-host-State-law clause. Unlike most in-accordance-with-host-State-law clauses that specify that the investment must be admitted, established, or made in accordance with host State law, this clause only specified that the investment had to be ‘owned’ or ‘controlled’ in accordance with Costa Rican law, something that the Tribunal duly noted.770 However, the illegalities cited by the Tribunal did not concern the ownership of the term deposits by Canadian investors in Costa Rican financial institutions, but rather the use of those term deposits. Tribunals have further consistently held that the legality requirement included in investment treaties refers to the making of the investment, not to its continuous management and operation after it has been made.771 To pass muster under an inaccordance-with-host-State-law clause, the investment, in other words, must be legal at the time of its establishment, so that any incidental violation of host State law during the investment’s lifetime will not lead to the withdrawal of protection under such a legality clause. As summarized by the Tribunal in Kim and others v Uzbekistan, the scope of application of the BIT is limited by a legality requirement that an investment must be ‘in compliance with [Host State] legislation’ at the time that the

768 Anderson and others v Costa Rica (AF), Award (19 May 2010) paras 15, 28, 51–61. For critical discussion of the case, see C Chatterjee and Anna Lefcovitch, ‘When an Investment Is Not an Investment: Anderson et al and the Republic of Costa Rica’ (2011) 12 JWIT 761; Schill (n 728) 303–306. 769 Anderson and others v Costa Rica (AF), Award (19 May 2010) para 58. 770 ibid para 51. 771 Inceysa v El Salvador, Award (2 August 2006) para 242; Fraport v Philippines I, Award (16 August 2007) para 345; OKO v Estonia, Award (19 November 2007) paras 188–190; Hamester v Ghana, Award (18 June 2010) paras 123–139; Saba Fakes v Turkey, Award (14 July 2010) paras 114–120; Al-Warraq v Indonesia (UNCITRAL), Decision on Jurisdiction (21 June 2012) paras 97–99; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 266 and ibid, Award (16 September 2015) para 129; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 260; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 317–323; Vannessa Ventures v Venezuela (AF), Award (16 January 2013) para 167; Convial Callao v Peru, Award (21 May 2013) para 399; Metal-Tech v Uzbekistan, Award (4 October 2013) paras 185–193, 267, 370; Churchill Mining v Indonesia, Decision on Jurisdiction (24 February 2014) paras 289–291; Yukos Universal v Russia (UNCITRAL), Final Award (18 July 2014) paras 1354, 1355, 1365; Fraport v Philippines II, Award (10 December 2014) paras 331, 333; von Pezold and others v Zimbabwe, Award (28 July 2015) para 420; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 214–215; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 373–377, 410; Gavrilović v Croatia, Award (26 July 2018) para 303. See also Oostergetel v Slovakia (UNCITRAL), Decision on Jurisdiction (30 April 2010) paras 173– 183; Copper Mesa Mining v Ecuador (UNCITRAL), Award (15 March 2016) paras 5.54–5.56; Muszynianka v Slovakia (UNCITRAL), Award (7 October 2020) paras 300–301; Cairn Energy v India (UNCITRAL), Award (21 December 2020) paras 709–710.

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schreuer’s commentary on the icsid convention investment is made. This limitation does not discount the possibility that there may be illegal action by Claimants at a later date or an illegal action unrelated to the making of the investment, but any such later illegality would be a matter for the Tribunal to consider at the merits stage of these proceedings.772

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Tribunals have also consistently taken the behavior of the host State into account when applying in-accordance-with-host-State-law clauses. They have considered, for example, that the host State may be estopped from invoking the lack of legality to defeat the investment’s protection, if it has knowingly overlooked the investor’s failure to comply with its law for a period of time, or has participated in the illegality.773 As the Tribunal in Kardassopoulos v Georgia explained: ‘Protection of investments’ under a BIT is obviously not without some limits. It does not extend, for instance, to an investor making an investment in breach of the local laws of the host State. A State thus retains a degree of control over foreign investments by denying BIT protection to those investments that do not comply with its laws. . . . This control, however, relates to the investor’s actions in making the investment. It does not allow a State to preclude an investor from seeking protection under the BIT on the ground that its own actions are illegal under its own laws. In other words, a host State cannot avoid jurisdiction under the BIT by invoking its own failure to comply with its domestic law.774

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(iii) Compliance with Domestic Law without Legality Clauses The host State’s consent under an investment can also be conditioned on the legality of the investment in case no specific legality clause exists in the governing investment treaty. Even in the absence of such clauses, there is broad agreement in arbitral jurisprudence, that compliance with domestic law remains relevant and that investments that have been made in breach of host State law do not, in principle, enjoy protection under the treaty.775 As the Tribunal in Fraport v Philippines II stated:

772 Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) para 377. 773 For further cases, see Swembalt v Latvia (UNCITRAL), Award (23 October 2000) paras 34, 35; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 86; Fraport v Philippines I, Award (16 August 2007) para 346; Desert Line v Yemen, Award (6 February 2008) paras 118–120; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) para 146; Achmea v Slovakia I (UNCITRAL), Final Award (7 December 2012) para 176; Arif v Moldova, Award (8 April 2013) paras 374, 376; Convial Callao v Peru, Award (21 May 2013) paras 411–416; Mamidoil v Albania, Award (30 March 2015) paras 466–478, 490–491; von Pezold and others v Zimbabwe, Award (28 July 2015) para 411; Philip Morris v Australia (UNCITRAL), Award on Jurisdiction and Admissibility (17 December 2015) para 522; Société Civile Immobilière de Gaëta v Guinea, Award (21 December 2015) para 240; Rusoro Mining v Venezuela (AF), Award (22 August 2016) paras 309, 314, 498; Gavrilović v Croatia, Award (26 July 2018) para 396. 774 Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 182 (emphases in the original). 775 Yaung Chi v Myanmar (ad hoc), Award (31 March 2003) para 58; Plama v Bulgaria, Award (27 August 2008) para 138; Phoenix Action v Czech Republic, Award (15 April 2009) para 101; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) para 140; Hamester v Ghana, Award (18 June 2010) para 124; Malicorp v Egypt, Award (7 February 2011) para 116; InterTrade v Czech Republic (ad hoc), Final Award (7 June 2012) para 137; Khan Resources v Mongolia, Decision on Jurisdiction (25 July 2012) paras 380–385; Achmea v Slovakia I (UNCITRAL), Final Award (7 December 2012) para 170; Minnotte and Lewis v Poland (AF), Award (16 May 2014) para 131; Yukos Universal v Russia (UNCITRAL), Final Award (18 July 2014) paras 1349–1352; Flughafen Zürich v Venezuela, Award (18 November 2014) para 132; Fraport v Philippines II, Award (10 December 2014) paras 328, 332; Mamidoil v Albania, Award

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even absent the sort of explicit legality requirement that exists here, it would be still be appropriate to consider the legality of the investment. As other tribunals have recognized, there is an increasingly well-established international principle which makes international legal remedies unavailable with respect to illegal investments, at least when such illegality goes to the essence of the investment.776

Similar to the situation where a specific legality clause in the governing investment treaty exists, compliance with domestic law can have an effect on the jurisdiction of the Centre if it can be read into the treaty as an implied condition that affects the treaty’s scope of application and the host State’s consent under the treaty. The Tribunal in Álvarez y Marín v Panama, for example, concluded that it had no jurisdiction under a treaty not containing a legality clause for disputes arising out of investments that were non-compliant with domestic law because the Tribunal considered it

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reasonable to assume that the States have only consented to the curtailment of their sovereignty on the condition that the protective mechanism is limited to investments made in compliance with their own legal system – but that it does not cover noncompliant investments. Holding the opposite, and extending coverage to investments made in violation of national law, would go against one of the most basic principles of any legal system: nemo audiatur propriam turpitudinem allegans.777

The Tribunal stressed, however, that the same type of limitations that applied to an explicit legality clause in an investment treaty in terms of the seriousness and timing of the breach of domestic law would also apply to a legality requirement that was merely implied.778 The approach to read a legality requirement into the applicable investment treaty, and thereby limit the host State’s consent to investments untainted by illegality, has been opposed by other tribunals. The decision in Bear Creek Mining v Peru offers an example. In that case, the alleged misconduct was the fraudulent circumvention of a constitutional prohibition on foreign ownership of mines in certain parts of Peru and subsequent misrepresentations to the local community regarding the ownership of the mine.779 The applicable treaty, the Canada–Peru Free Trade Agreement, did not contain an explicit requirement for the investment’s legality. In dismissing Peru’s argument that an implicit requirement should be read into the treaty, the Tribunal held that it ‘may not import a requirement that limits its jurisdiction when such a limit is not specified by the parties.’780 In its view, questions concerning the compliance of the investment with domestic law related to the merits of the case and were not relevant to the Tribunal’s jurisdiction.781 Other tribunals, as well, have addressed issues concerning the compliance of the investment with domestic law under investment treaties not involving

776 777 778 779 780 781

(30 March 2015) paras 359, 360; Spentex v Uzbekistan, Award (27 December 2016) para 834 (not public); Blusun v Italy, Award (27 December 2016) para 264. Fraport v Philippines II, Award (10 December 2014) para 332 (internal reference omitted). Álvarez y Marín v Panama, Award (12 October 2018) para 135. Similarly, SAUR v Argentina, Decision on Jurisdiction and Liability (6 June 2012) paras 307–308; Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) para 301. See Álvarez y Marín v Panama, Award (12 October 2018) paras 147–156. Bear Creek Mining v Peru, Award (30 November 2017) para 306. ibid para 320. Similarly, Capital Financial Holdings v Cameroon, Award (22 June 2017) para 467; Achmea v Slovakia I (UNCITRAL), Final Award (7 December 2012) para 177. Bear Creek Mining v Peru, Award (30 November 2017) para 324.

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specific legality clauses as issues going to the merits.782 Ultimately, however, the issue of whether it is possible to imply a condition of legality into the State’s consent under an investment treaty not containing a specific legality clause is predominantly a matter for the interpretation of the instrument providing consent.783

c) Legality, Good Faith, and International or Transnational Public Policy as Implied Conditions 469

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As the above cases indicate, most tribunals do not consider that the legality of the investment, or of the investor’s conduct, is an element of the notion of investment in the sense of Art. 25(1). One line of jurisprudence, however, views this differently. It has suggested that compliance with domestic law, good faith, and ‘international’ or ‘transnational public policy’ constitutes an implied condition for an investment to qualify as an investment under Art. 25 of the Convention. This position was first developed by the Tribunal in Phoenix Action v Czech Republic.784 The question whether the investment or investor’s conduct was in compliance with Czech law, however, was not in issue. Additionally, the applicable Czech Republic–Israel BIT contained an explicit in-accordance-with-host-State-law clause. Notwithstanding, and in the context of discussing the permissibility of restructuring a domestic investment into an international investment after the alleged breach had already taken place in order to secure access to arbitration under the treaty (see also paras. 708–709 infra), the Tribunal stated that: . . . States cannot be deemed to offer access to the ICSID dispute settlement mechanism to investments made in violation of their laws. If a State, for example, restricts foreign investment in a sector of its economy and a foreign investor disregards such restriction, the investment concerned cannot be protected under the ICSID/BIT system. These are illegal investments according to the national law of the host State and cannot be protected through an ICSID arbitral process.785

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In a similar vein, and relying on obiter from a few tribunals that had mentioned the need for investments to have been made in ‘good faith,’ none of which suggested this

782 See Plama v Bulgaria, Award (27 August 2008) paras 138–139; Blusun v Italy, Award (27 December 2016) para 264; Khan Resources v Mongolia (UNCITRAL), Decision on Jurisdiction (25 July 2012) paras 380–385. See also Minnotte and Lewis v Poland (AF), Award (16 May 2014) paras 131–132; Mamidoil v Albania, Award (30 March 2015) para 294 (considering that if the lack of a substantive cause of action is already manifest at the jurisdictional stage, the question of the domestic illegality can also result in a lack of admissibility for lack of a prima facie claim). An investor’s misconduct may also affect the calculation of damages, for example by taking it into account as part of contributory fault. See generally Martin Jarrett, Contributory Fault and Investor Misconduct in Investment Arbitration (CUP 2019). 783 See eg Bear Creek Mining v Peru, Award (30 November 2017) para 321 (emphasizing that ‘the wording of the FTA provides further clarity, because not only does it not mention such a limit, but, by the wording cited above, provides that such a limit is considered a formality which would have to be expressly included to be effective’). 784 See Phoenix Action v Czech Republic, Award (15 April 2009) paras 100–116. For further analysis, see Emily Sipiorski, Good Faith in International Investment Arbitration (OUP 2019) 48 ff; Stephan W Schill and Heather L Bray, ‘Good Faith Limitations on Protected Investments and Corporate Structuring’ in Andrew D Mitchell, M Sornarajah and Tania Voon (eds), Good Faith and International Economic Law (OUP 2015) 88, 93–104. 785 Phoenix Action v Czech Republic, Award (15 April 2009) para 101.

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element was part of the definition of investment under Art. 25(1) of the Convention,786 the Phoenix tribunal further announced that investments, in order to be able to make use of the dispute settlement proceedings offered by the Centre, needed to comply with the principle of good faith: . . . States cannot be deemed to offer access to the ICSID dispute settlement mechanism to investments not made in good faith. The protection of international investment arbitration cannot be granted if such protection would run contrary to the general principles of international law, among which the principle of good faith is of utmost importance.787

Although the Phoenix tribunal itself did not commit itself as to whether noncompliance with domestic law and the requirement of good faith would go to jurisdiction or the merits of a claim,788 it listed the existence of ‘assets invested in accordance with the laws of the host State’ and the existence of ‘assets invested bona fide’ among ‘the requirements for an investment to benefit from the international protection of ICSID.’789 For this reason, the Phoenix award is often viewed as lending support to the position that a legality and a good faith requirement must be read into the notion of investment under Art. 25(1) of the Convention.790 The Tribunal in Phoenix Action also made clear, however, that an investment made in good faith not only had to comply with domestic law, but equally with other international legal instruments or principles. In its view, ‘investments made in violation of the most fundamental rules of protection of human rights, like investments made in pursuance of torture or genocide or in support of slavery or trafficking of human organs’ should not be granted investment protection, regardless of whether such acts are contrary to domestic law.791 In the Tribunal’s view, compliance with international law, or ‘international public policy,’ the term used by the Tribunal in reliance on earlier arbitral precedent, was part of the principle of good faith and therefore a condition for access to the Centre.792 The Tribunal stated: In the instant case, no question of violation of a national principle of good faith or of international public policy related with corruption or deceitful conduct is at stake. The Tribunal is concerned here with the international principle of good faith as applied to the international arbitration mechanism of ICSID. The Tribunal has to prevent an abuse of the system of international investment protection under the ICSID Convention, in ensuring that only investments that are made in compliance with the international principle of good faith and do not attempt to misuse the system are protected.793

786 Inceysa v El Salvador, Award (2 August 2006) paras 179–183, 230–244; Plama v Bulgaria, Award (27 August 2008) paras 143–144. 787 Phoenix Action v Czech Republic, Award (15 April 2009) para 106. 788 ibid paras 102, 104. 789 ibid para 114. 790 See eg Polckinghorne and Volkmer (n 728) 156–157, 168; Yas Banifatemi and Elise Edson, ‘Article 25(1)’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulations and Rules: A Practical Commentary (Elgar 2019) 102, 126, para 2.44. 791 Phoenix Action v Czech Republic, Award (15 April 2009) para 78. 792 ibid paras 109–112 (relying on Inceysa v El Salvador, Award (2 August 2006) paras 230, 243, 249 and Plama v Bulgaria, Award (27 August 2008) paras 143–144). 793 Phoenix Action v Czech Republic, Award (15 April 2009) para 113 (emphasis in the original).

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Only few other ICSID tribunals have explicitly endorsed Phoenix’s approach to defining the notion of investment in the sense of Art. 25(1) of the ICSID Convention as encompassing both a legality and a good faith requirement. These endorsements were mostly made obiter dicta as the applicable BITs contained explicit in-accordance-withhost-State-law clauses. Moreover, in all of these cases, the President of the Phoenix tribunal served as part of the deciding tribunal,794 in one case even as its president.795 Apart from these instances, support for the approach in Phoenix remains limited.796 In contract-based cases, the Tribunals in World Duty Free v Kenya and Niko Resources v Bangladesh declined to view either non-compliance with domestic law, good faith, or transnational public policy as elements conditioning the jurisdiction of the Centre (see paras. 439–446 supra). In addition, numerous treaty-based tribunals rightly considered questions concerning the illegality of the investment to concern the validity of the host State’s consent, both in the presence of an explicit legality clause (see paras. 452–464 supra) and in its absence (see paras. 465–468 supra). Other treaty-based tribunals, while recognizing that an investment must have been made in good faith and in compliance with international or transnational public policy in order to receive protection under an investment treaty, did not use good faith as a jurisdictional element. The Tribunal in Plama v Bulgaria, for example, a case that involved the Claimant’s misrepresentation about the identity of the members of a consortium in a bid for the privatization of a State-owned oil refinery which was decided before Phoenix, treated compliance with good faith as a matter of the substantive protection of the investment under the ECT: 144. The Tribunal finds that Claimant’s conduct is contrary to the principle of good faith which is part not only of Bulgarian law . . . but also of international law . . . The principle of good faith encompasses, inter alia, the obligation for the investor to provide the host State with relevant and material information concerning the investor and the investment. This obligation is particularly important when the information is necessary for obtaining the State’s approval of the investment. . . . 146. In consideration of the above . . . this Tribunal cannot lend its support to Claimant’s request and cannot, therefore, grant the substantive protections of the ECT.797

794 Convial Callao v Peru, Award (21 May 2013) paras 433, 435, 439; Cortec Mining v Kenya, Award (22 October 2018) paras 260–261, 303, 308, 319, 321, 333, 365. This was also the case in one contractbased dispute, where the Tribunal adopted Phoenix’s approach; see RSM v Central African Republic, Decision on Jurisdiction and Liability (7 December 2010) para 58. 795 Hamester v Ghana, Award (18 June 2010) paras 123–124. 796 But see Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 85; Liman Caspian Oil v Kazakhstan, Award (22 June 2010) paras 193–194 (stating that ‘[a] violation of international public policy is such a case in which an investment is invalid without a legal action for invalidation and without a court declaration of invalidity having to be issued. The Tribunal agrees . . . that it does not have jurisdiction over investments made in violation of international public policy’); Getma and others v Guinea, Award (16 August 2016) para 174 (stating that ‘[t]he Arbitral Tribunal agrees with the Respondent that only legal investments, carried out in good faith, are to be protected by the ICSID arbitration, and that the Arbitral Tribunal must decline jurisdiction, if it appears that the investment was made fraudulently or as a result of corruption’). 797 Plama v Bulgaria, Award (27 August 2008) paras 144, 146; Blusun v Italy, Award (27 December 2016) para 264; Khan Resources v Mongolia (UNCITRAL), Decision on Jurisdiction (25 July 2012) paras 380–385; Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 493, 508.

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A number of treaty-based tribunals have also explicitly opposed reading either a legality or a good faith requirement into the notion of investment under Art. 25(1) of the ICSID Convention. The Tribunal in Saba Fakes v Turkey, for example, stated:

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112. . . . the principles of good faith and legality cannot be incorporated into the definition of Article 25(1) of the ICSID Convention without doing violence to the language of the ICSID Convention: an investment might be ‘legal’ or ‘illegal,’ made in ‘good faith’ or not, it nonetheless remains an investment. The expressions ‘legal investment’ or ‘investment made in good faith’ are not pleonasms, and the expressions ‘illegal investment’ or ‘investment made in bad faith’ are not oxymorons. 113. While a treaty should be interpreted and applied in good faith, this is a general requirement under treaty law, from which an additional criterion of ‘good faith’ for the definition of investments, which was not contemplated by the text of the ICSID Convention, cannot be derived. 114. As far as the legality of investments is concerned, this question does not relate to the definition of ‘investment’ provided in Article 25(1) the ICSID Convention . . . In the Tribunal’s opinion, while the ICSID Convention remains neutral on this issue, bilateral investment treaties are at liberty to condition their application and the whole protection they afford, including consent to arbitration, to a legality requirement of one form or another.798

The Tribunal in Malicorp v Egypt reached a similar conclusion when faced with the request that it should decline jurisdiction because the Respondent had entered into the concession contract, which constituted the investment, based on a forgery that violated the principle of good faith.799 While acknowledging that ‘the protection afforded by investment treaties does not extend to cases in which an investor has created the conditions therefor in a manner contrary to the principle of good faith, in particular by resorting to a veritable abuse of the law,’800 or ‘when the “investment” is the result of corruption, or has been obtained by deception or fraud,’801 the Tribunal concluded that it favored ‘examining the issue of the validity of the investment at the merits stage.’802 It reasoned that: Only defects that go to the consent to arbitrate itself can deprive the tribunal of jurisdiction. In the present case, there is nothing to indicate that the consent to arbitrate, as distinct from the consent to the substantive guarantees in the bilateral Agreement, was obtained by misrepresentation or corruption or even by mistake. The allegations of the Respondent relate to the granting of the Concession. However, it is not the Contract that provides the basis for the right to arbitrate, but the State’s offer to arbitrate

798 Saba Fakes v Turkey, Award (14 July 2010) paras 112–114. Similarly, Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 226; Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 5.43; Metal-Tech v Uzbekistan, Award (4 October 2013) para 127. For the view that ‘good faith’ should not be read into the instrument containing the host State’s consent, see Bear Creek Mining v Peru, Award (30 November 2017) para 321 (stating that ‘the Tribunal does not consider that the alleged good faith of the investor is a further condition under the FTA for the jurisdiction of the Tribunal’). 799 Malicorp v Egypt, Award (7 February 2011) para 115. 800 ibid para 116. 801 ibid. 802 ibid para 119.

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schreuer’s commentary on the icsid convention contained in the Agreement and the investor’s acceptance of that offer. The offer to arbitrate thereby covers all disputes that might arise in relation to that investment, including its validity.803

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Although it might appear unsavory to conclude that activities that are expressly prohibited by domestic or international law should be adjudicated on under the ICSID Convention, it is more convincing to consider such questions as going to the merits, unless the parties’ instrument of consent is limited to lawful investments. In any event, additional jurisdictional elements should not be inserted into the notion of investment in Art. 25(1) of the ICSID Convention, whether for compliance with domestic law, good faith, or international or transnational public policy. Art. 25 of the ICSID Convention, after all, is silent on these issues; it does not mention the need for compliance of the investment, or the investor’s conduct, with domestic or international law. Reading such requirements into the notion of investment in Art. 25(1) of the ICSID Convention is therefore difficult to square with the principles of treaty interpretation enshrined in Art. 31 of the Vienna Convention on the Law of Treaties (VCLT).804 Furthermore, reading additional requirements into the notion of investment under Art. 25(1) of the Convention, in particular concepts as vague as good faith or transnational public policy, would grant unnecessary discretion to arbitral tribunals and conciliation commissions in assessing the Centre’s jurisdictional grant. Against this background, both compliance of the investment with domestic law and good faith should not be regarded as elements of the notion of investment in the sense of Art. 25(1) of the Convention.

8. The Additional Facility 480

The Additional Facility authorizes the Centre to administer conciliation and arbitration proceedings for the settlement of two types of disputes: (1) legal disputes that arise directly out of an investment, but are not within the jurisdiction of the Centre because either the host State or the investor’s home State are not party to the ICSID Convention (Art. 2(a) of the Additional Facility Rules); and (2) legal disputes that are not within the jurisdiction of the Centre because they do not arise directly out of an investment, provided that either the host State or the investor’s home State are party to the ICSID Convention (Art. 2(b) of the Additional Facility Rules). In addition, the Centre is authorized to administer fact-finding proceedings under the Additional Facility without further specification as to the subject-matter involved (Art. 2(c) of the Additional Facility Rules). In all of these cases, the question arises as to what extent the subjectmatter of the proceedings in question must relate to the notion of ‘investment’ in the sense of the ICSID Convention.

803 ibid para 119(a). 804 Vienna Convention on the Law of Treaties (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331 (VCLT). Although the VCLT, as per its Art. 4, does not apply to a treaty that was concluded prior to the VCLT’s entry into force, its rules on treaty interpretation reflect customary international law. See eg Jadhav (India v Pakistan) (Merits) [2019] ICJ Rep 418, para 71; Malaysian Historical Salvors v Malaysia, Decision on Annulment (16 April 2009) para 56.

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a) Conciliation and Arbitration Arising out of an Investment The Additional Facility Rules do not further define the notion of ‘investment’ used in Art. 2(a) of the Additional Facility Rules.805 It is therefore not surprising that most tribunals limit their jurisdictional inquiry in proceedings under the Additional Facility Rules to ascertaining the disputing parties’ consent, including, as the case may be, whether the requirement of an investment under the governing BIT was fulfilled.806 As the Tribunal in Nova Scotia Power v Venezuela noted in an Additional Facility arbitration under the Canada–Venezuela BIT: ‘To ascertain whether there is an investment, the Tribunal must look to the terms of the BIT. For the Tribunal, this is the focus of its enquiries, and is unaltered by what forum the dispute is before.’807 Similarly, the Tribunal in Minnotte and Lewis v Poland inferred from compliance with the definition of ‘investment’ in the Poland–United States BIT that the activities in question also qualified as an investment in the sense of Art. 2(a) of the Additional Facility Rules.808 At the same time, Art. 2(a) of the Additional Facility Rules has an intrinsic connection to Art. 25(1) of the ICSID Convention: it authorizes the Centre to administer conciliation and arbitration proceedings where jurisdiction under Art. 25(1) of the Convention is lacking because only one of the relevant States (the host State or the investor’s home State) is a Contracting Party to the ICSID Convention, not both of them. Art. 4(2) of the Additional Facility Rules also requires the Secretary-General, when approving access to the Additional Facility under Art. 2(a), to ensure that these conditions are fulfilled. In terms of subject-matter, no difference should therefore exist between disputes submitted under Art. 2(a) of the Additional Facility Rules and Art. 25(1) of the ICSID Convention. While the notion of ‘investment’ in Art. 2(a) of the Additional Facility Rules will in many cases not display any significant differences to the notions of investment used in BITs or national investment legislation,809 it should be given an independent meaning, namely one that corresponds in substance to how the notion of investment in Art. 25(1) of the ICSID Convention is understood and applied. Several tribunals have noted the connection between the concepts of ‘investment’ in Art. 25(1) of the ICSID Convention and in Art. 2(a) of the Additional Facility Rules. Some decisions appear to suggest that the interpretation of the term investment in Art. 2(a) should be informed by the meaning of the term investment in Art. 25(1) of the Convention.810 The Tribunal in MNSS and RCA v Montenegro, an Additional Facility arbitration based on the BIT between the Netherlands and Yugoslavia (as the predecessor of Montenegro) and Montenegro’s foreign investment legislation, went 805 Sistem v Kyrgyzstan (AF), Decision on Jurisdiction (13 September 2007) para 69; similarly, MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 186–187. 806 See eg Europe Cement v Turkey (AF), Award (13 August 2009) paras 140–145; Anderson and others v Costa Rica (AF), Award (19 May 2010) paras 43–61; Crystallex v Venezuela (AF), Award (4 April 2016) para 426; Lion v Mexico (AF), Decision on Jurisdiction (30 July 2018) paras 163–263. 807 Nova Scotia Power v Venezuela (AF), Award (30 April 2014) para 75; see also ibid para 80. 808 Minnotte and Lewis v Poland (AF), Award (16 May 2014) para 150, lit a) (stating that ‘the Tribunal is of the view that Messrs Minnotte and Lewis have made an investment for the purposes of the BIT and hence for the purposes of Articles 4(2) and 2(a) of the Additional Facility Rules’). 809 Sistem v Kyrgyzstan (AF), Decision on Jurisdiction (13 September 2007) para 72. 810 See eg Grupo Contreras v Equatorial Guinea (AF), Award (4 December 2015) paras 138–139. See also Strabag v Libya (AF), Award (29 June 2020) para 109 (concluding that the Salini criteria were fulfilled in the case at hand, but leaving it open whether these criteria have any legal relevance at all).

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even further. Navigating between the Respondent’s objection that the acquisition of shares of, and loans made to, a privatized steel mill by the Claimants did not qualify as investments in the sense of Art. 25(1) of the ICSID Convention, and the Claimants’ argument that the ICSID Convention was not applicable to the proceedings pursuant to Art. 3 of the Additional Facility Rules, the Tribunal held as follows: The Claimants obtained the approval of the Secretary-General under Article 2(a) of the AF Rules. A proceeding under this article is not under the jurisdiction of ICSID because the State party is not a member of ICSID or the private party is not a national of a member State. The terms of Article 3 are clear and sweeping: . . . Nonetheless, this provision cannot be read out of the context of other AF Rules, in particular of AF Rule 4(2) . . . The implication of this rule is that the requirement that a ‘dispute arises directly arising out of an investment’ is to be fulfilled at the time of approval by the SecretaryGeneral and that the investment needs to be an investment under the ICSID Convention.811

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Compliance with the requirements in Art. 2(a) of the Additional Facility Rules is, without doubt, a prerequisite for the Secretary-General’s approval of the parties’ agreement to arbitration or conciliation proceedings under the Additional Facility. Once approved, however, it would not seem plausible to deduct from Art. 2 jurisdictional requirements that would need to be complied with by the disputing parties in addition to their consent, not least because the Additional Facility lacks provisions that are comparable to Arts. 25(1) and 41(2) of the Convention and that impose jurisdictional limits on the use of the Additional Facility (see para. 19 supra). This notwithstanding, Arts. 2 and 4 of the Additional Facility may remain relevant for interpreting the instruments on which the parties’ consent is based, including in particular in respect of the meaning of investment used in such instruments.

b) Conciliation and Arbitration in the Absence of an Investment 485

Art. 2(b) of the Additional Facility authorizes the Centre to administer conciliation and arbitration proceedings for the settlement of legal disputes that are not within the jurisdiction of the Centre because they do not arise directly out of an investment. As was explained by the Administrative Council in approving the Additional Facility Rules: among the reasons for the proposal to establish the Additional Facility was the concern that a conciliation or arbitration agreement might be frustrated if a Commission or Tribunal declared itself incompetent on the ground that it considered the underlying transaction not to be an ‘investment’.812

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Therefore, the Additional Facility may be used if a transaction does not meet the requirements of an ‘investment’ under the Convention.813 This does not mean, however, that proceedings under Art. 2(b) of Additional Facility are open for any type of dispute. The Secretary-General may give approval for conciliation or arbitration proceedings 811 MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 186. 812 Comment (iv) to Art. 4 of the Additional Facility Rules, (1993) 1 ICSID Reports 220. See also Broches (n 7) 377–378. 813 For confirmation in arbitral practice, see Sistem v Kyrgyzstan (AF), Decision on Jurisdiction (13 September 2007) para 68 (noting that ‘it is not necessary for the existence of jurisdiction under the ICSID Facility that the dispute concern an investment’).

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under Art. 2(b) of the Additional Facility only if he or she is satisfied that the underlying transaction has features that ‘distinguish it from an ordinary commercial transaction’ (Art. 4(3) Additional Facility Rules).814 In other words, the transaction, even if it falls short of the requirement of an investment in the sense of Art. 25(1) of the ICSID Convention, must still be more than an ordinary commercial transaction. The Administrative Council in approving these provisions attempted to describe the concept of a transaction that is distinguishable from an ordinary commercial transaction as follows:

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Economic transactions which (a) may or may not, depending on their terms, be regarded by the parties as investments for the purposes of the Convention, which (b) involve long-term relationships or the commitment of substantial resources on the part of either party, and which (c) are of special importance to the economy of the State party, can be clearly distinguished from ordinary commercial transactions. Examples of such transactions may be found in various forms of industrial cooperation agreements and major civil works contracts.815

This description makes the classification independent of whether the parties thought their transaction was an investment. It presents a long-term relationship or the commitment of substantial resources as possible alternatives. A commitment of substantial resources need not be made by the investor, but may be made by the host State. Most significant is the element that the transaction is of special importance to the economy of the host State. This description has certain similarities to the ‘Salini test’ discussed above (see paras. 235–241 supra), but potentially encompasses a wider range of economic transactions. The Additional Facility is not designed as a means to avoid the application of the Convention where access to the Centre is available.816 Also, there may be genuine borderline cases where it is unclear whether the transaction meets the requirements of an ‘investment’ under the Convention or has to be brought under the Additional Facility. In a situation of this kind, Art. 4(4) of the Additional Facility Rules provides that proceedings under the Convention must be tried first:

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If in the case of an application based on Article 2(b) the jurisdictional requirements ratione personae of Article 25 of the Convention shall have been met and the SecretaryGeneral is of the opinion that it is likely that a Conciliation Commission or Arbitral Tribunal . . . will hold that the dispute arises directly out of an investment, he may make his approval of the application conditional upon consent by both parties to submit any dispute in the first instance to the jurisdiction of the Centre.

In actual practice, submissions to the Additional Facility are principally made to overcome non-participation in the Convention of either the host State or the investor’s home State. In this context, the Model Clauses offer ways to submit to the Additional Facility where the jurisdictional requirements ratione personae have not been met (see paras. 513–518 infra) and for fact-finding (see para. 43 supra), but not for disputes that do not arise directly out of an investment. 814 See also Shihata and Parra (n 460) 344 ff. 815 Comment (iii) to Art. 4 of the Additional Facility Rules, (1993) 1 ICSID Reports 220. 816 This becomes clear from a combined reading of Arts. 2(a) and 4(2) of the Additional Facility Rules.

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Decisions in some cases, in which tribunals found that there was no investment and that hence there was no jurisdiction, underscore the potential of the Additional Facility for this type of situation. If the parties have doubts as to whether their transaction amounts to an investment, they may draft a combined submission clause, which, after submitting to the jurisdiction of the Centre, makes the following addition: In case the [Conciliation Commission]/[Arbitral Tribunal] decides that the jurisdictional requirements ratione materiae of Art. 25 of the Convention are not fulfilled because the dispute does not arise directly out of an investment, the Parties hereby consent to [conciliation]/[arbitration] under the Additional Facility [Conciliation]/[Arbitration] Rules of the Centre.

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Many BITs provide for proceedings under the Additional Facility. But they also contemplate the lack of participation in the Convention by either of the parties (see paras. 517, 615 infra) and not the submission of disputes that do not arise directly out of investments. Nevertheless, even where BITs provide for the Additional Facility to remedy the lack of participation by one contracting State in the Convention, Art. 2(b) of the Additional Facility Rules also opens the door for the settlement of disputes that are covered by the BIT, but excluded from the Convention ratione materiae.817 A possible example would be BIT-based disputes relating not to an existing investment, but to pre-investment activities that are not covered by Art. 25(1) of the Convention.818 Where the parties to an agreement entertain doubts as to whether their transaction qualifies as an investment, and whether a submission clause to ICSID would therefore be appropriate, they have several possibilities. In addition to making a special statement in their contract designating their project as an investment, possibly adding a brief description of those features that support this characterization (see paras. 190, 191 supra), they may draft a combined jurisdictional clause submitting to the Additional Facility in case the competent ICSID organs determine that the Convention’s requirements ratione materiae have not been met (see para. 491 supra). Finally, they may combine such an ICSID Convention/Additional Facility Clause with a clause referring to another arbitral institution or submitting to ad hoc arbitration in order to protect against the Secretary-General withholding approval to access the Additional Facility. What is clear, in any event, is that Art. 2(b) of the Additional Facility Rules does not operate independently of the instrument conferring jurisdiction to an arbitral tribunal or conciliation commission. It does not function so as to allow access to the Additional Facility, and provide for the jurisdiction of a conciliation commission or arbitral tribunal, over disputes that do not arise out of an investment if the parties’ consent is limited to investment disputes. After finding that the dispute did not relate to an ‘investment’ in the sense of the Canada–Venezuela BIT, the Tribunal in Nova Scotia Power v Venezuela stated this clearly as follows:

817 See also Heribert Golsong, ‘Dispute Settlement in Recently Negotiated Bilateral Investment Treaties – the Reference to the ICSID Additional Facility’ in Adriaan Bos and Hugo Siblesz (eds), Realism in LawMaking: Essays on International Law in Honour of Willem Riphagen (Martinus Nijhoff 1986) 35; Shihata and Parra (n 460) 358. 818 See Parra (n 31) 325, 329. See further paras 382–397 supra.

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The BIT (and consequently the dispute mechanisms thereunder, as well as the consent to same) hinges upon the existence of an investment. This cannot be overridden by Article 2(b). It is the BIT which defines the outer boundaries of the contracting parties’ consent under the BIT and which provides a gateway to dispute resolution under the ICSID Additional Facility Rules. The Tribunal recognises that this means that the ostensibly unqualified reference in the BIT to arbitration under the Additional Facility is in fact implicitly limited, in so far as Article 2(b) permits recourse to the ICSID Additional Facility for a dispute that arises out of an economic transaction that is not an investment.819

c) Fact-Finding Unlike conciliation and arbitration, fact-finding under the Additional Facility820 is not subject to any explicit requirements ratione materiae. Not even the requirement that the underlying transaction have features distinguishing it from an ordinary commercial transaction (see para. 486 supra) applies to fact-finding. The SecretaryGeneral also has no power to approve or disapprove arrangements for fact-finding proceedings.821 It is therefore arguable that the lack of restrictions ratione materiae should be taken at face value and that, hence, fact-finding under the Additional Facility is available for any question of fact that may arise between a State and a national of another State independently of whether or not an investment relationship is involved. The omission of any indication of the type of facts to be clarified, or the underlying relationship between the parties, is somewhat surprising at first sight. It may be due to the circumstance that, both in the Convention and in the Additional Facility, jurisdiction ratione materiae is always described in relation to a dispute. Fact-finding, by contrast, is designed to be preventive and hence, by definition, does not require a legal dispute. Still, the Introductory Notes to the Fact-Finding (Additional Facility) Rules contain a reference to a ‘long-term relationship’ and to ‘national or international guidelines or codes of conduct relating to foreign investment.’822 This would indicate that the drafters of the Fact-Finding (Additional Facility) Rules had relationships between parties in mind that were somehow related or akin to an investment. A contextual reading of the relevant provisions on fact-finding as part of the Additional Facility Rules could then suggest that there should be at least some connection with the ICSID Convention’s jurisdictional grant or the Centre’s general scope of activities.

819 Nova Scotia Power v Venezuela (AF), Award (30 April 2014) para 144. 820 See generally Shihata and Parra (n 460) 357. 821 See Art. 4 of the Additional Facility Rules, which subjects only conciliation and arbitration proceedings under the Additional Facility, but not fact-finding, to the Secretary-General’s approval. In fact-finding proceedings, the Secretary-General is limited to verifying whether the request to initiate such proceedings conforms to what are in essence formal requirements. See Arts. 2 and 3 of the Fact-Finding (Additional Facility) Rules. Objections to the initiation of fact-finding proceedings by a party are dealt with pursuant to Art. 5 of the Fact-Finding (Additional Facility) Rules, which may involve the determination by a ‘Special Commissioner,’ if the parties so choose. 822 (1993) 1 ICSID Reports 215.

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E. ‘. . . between a Contracting State . . .’

1. Participation in the Convention 497

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The concept of a Contracting State is clearly determined by the Convention. Contracting States are States that have deposited their instrument of ratification, acceptance, or approval and for which the Convention is in force. Which States can sign the Convention is laid down in Art. 67. In accordance with Art. 68, they become Contracting States 30 days after such deposit. Mere signatories are not Contracting States. A Contracting State can be either respondent or claimant in an ICSID arbitration or conciliation proceeding.823 The status as a Contracting State may be terminated by a written notice whereby the State denounces the Convention (Art. 71). Such a denunciation is subject to two limitations: it only becomes effective after six months, and it does not affect perfected consents to the jurisdiction of the Centre given prior to the denunciation (Arts. 71, 72). Art. 72 thus constitutes an exception to the requirement that the State party to the dispute be a Contracting State (see further Art. 72, paras. 5–16). ICSID membership, and hence the status of a Contracting Party, cannot be obtained by new States through State succession.824 The practice of the International Bank for Reconstruction and Development (World Bank) as depositary of the Convention (see Art. 73, paras. 1–5) requires that new States have to join the ICSID Convention as parties and are not able to derive their status as a Contracting State from their predecessor State. This practice has been followed after the dissolution of Czechoslovakia, with the Czech and Slovak Republics joining ICSID as new Contracting States. Similarly, after the dissolution of the Socialist Federal Republic of Yugoslavia, Slovenia, Bosnia and Herzegovina, Croatia, and North Macedonia, and later Serbia and Montenegro acceded as new Contracting States to the Convention. Equally, following their respective secessions, Timor-Leste, Kosovo, and South Sudan all applied anew to become a Contracting State.825 The requirement that the State party to ICSID proceedings must be a Contracting State was contained in all drafts leading to what eventually became Art. 25 of the Convention (History, Vol. I, pp. 110–118). This was explained by reference to the principle of reciprocity (History, Vol. II, pp. 22, 150, 204). At an early stage of the Convention’s drafting, the idea to open the machinery of the Centre to nonContracting States on an ad hoc basis was aired (ibid., pp. 82, 95, 96, 255, 294). It

823 See East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 173–174. So far, however, States have acted only twice as claimants in ICSID proceedings. See Gabon v Société Serete, Order on Discontinuance (27 February 1978); Peru v Caravelí, Order on Discontinuance (26 December 2013). For constituent subdivisions and agencies as claimants, see the references in n 854 infra. 824 See Christian J Tams, ‘State Succession to Investment Treaties: Mapping the Issues’ (2016) 31 ICSID Rev 314, 320–324; Patrick Dumberry, ‘State Succession to Multilateral Investment Treaties and the ICSID Convention’ (2018) 3 Eur Inv Law & Arb Rev 3, 13–17; Patrick Dumberry, A Guide to State Succession in International Investment Law (Elgar 2018) ch 9. 825 Until new States have become Contracting States of the ICSID Convention, claims may proceed under the ICSID Additional Facility (AF) Rules, if the investor’s home State is a Contracting State. See paras 513–518 infra. For an example, see MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 6–9 (involving an arbitration launched at a time when Montenegro had not yet become a Contracting State).

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was treated with scepticism by Mr. Broches, who pointed out that the Convention contained a number of rules of law that were binding only on the States parties to the Convention (ibid., p. 255). The idea was therefore not further pursued at the time. Participation in the Convention of the State party to proceedings is an absolute requirement, which is not subject to waiver by agreement between the parties. Therefore, ad hoc use of the Convention procedures by States that have not ratified the ICSID Convention is not possible.826 A List of Contracting States and Other Signatories of the Convention is maintained and regularly updated by the Centre. It is readily available as document ICSID/3 and on the Centre’s website: . Arts. 28(2) and 36(2) provide that a request for conciliation or arbitration must contain information concerning the identity of the parties. Institution Rule 2(1)(a) requires that the request designate precisely each party to the dispute. The SecretaryGeneral, in the exercise of his or her screening powers under Arts. 28(3) and 36(3), will determine whether the condition that the State party is a Contracting State is fulfilled. If the State party named in the request is not a Contracting State, the Secretary-General will refuse to register the request, since the dispute is manifestly outside the jurisdiction of the Centre. It follows that the critical time for the status of a Contracting State is the date the Secretary-General takes up the request for consideration. Presumably, if by that time an instrument of ratification has been deposited, but the 30-day period under Art. 68(2) has not yet been completed, the Secretary-General will not refuse registration, but will wait for the completion of the period. Since the critical date for determining the status of Contracting State is the registration of requests for arbitration or conciliation proceedings, and not the time of consent to jurisdiction, it is possible for a host State to consent to ICSID’s jurisdiction before it becomes a Contracting State. If the Convention is in force for the State party by the time requests for arbitration or conciliation are registered, the requirement is fulfilled.827 The converse situation arises in case of a denunciation of the Convention. Under Art. 72, an offer to arbitrate disputes contained in an investment treaty or law, that is not accepted whilst a State is a Contracting State, thus perfecting consent, may not be accepted after a State has given a notice of denunciation under Art. 71 (see further Art. 72, paras. 9–29). In Holiday Inns v Morocco, neither the host State, nor Switzerland, the State of which the investor was a national, had ratified the Convention when the agreement containing consent to the Centre’s jurisdiction was made. Both States ratified the Convention subsequently before the institution of the proceedings. Before the Tribunal, Morocco argued that the Claimant’s consent was defective because Switzerland was not a Contracting State at the time of consent, but did not press the argument that by the same logic Morocco would not be a Contracting State for purposes of jurisdiction.828 The Tribunal noted the dates at which the two States became Contracting Parties and

826 See also Szasz (n 120) 30. 827 Amerasinghe (n 96) 182–184; Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 642. See also paras 44–54 supra. This also applies in cases of State succession. See paras 622–634 infra. 828 Lalive (n 53) 142–143.

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concluded that it was on the last of those dates that the consent to submit the dispute to arbitration became effective and irrevocable (see para. 612 infra). In Amco v Indonesia, consent to ICSID arbitration was given in July 1968, but Indonesia only became a party to the Convention on 28 October 1968. The Tribunal simply stated that jurisdiction over the Respondent could not be denied since it was a Contracting State.829 Similarly, in LETCO v Liberia, the submission to ICSID’s jurisdiction was made on 12 May 1970, but Liberia only became a party to the Convention on 16 July 1970. This was not raised as a problem and the Tribunal simply noted that ‘[s]ince Liberia has signed and ratified the Convention, it qualifies as a “Contracting State”.’830 In Cable TV v St Kitts and Nevis, the contract containing an ICSID clause was signed on 18 September 1986, but the Respondent became a party to the ICSID Convention only on 3 September 1995. The Tribunal, relying on Holiday Inns, confirmed that: the critical date for determining the status of a contracting state is the date of submission of the dispute to ICSID, rather [than] the date of the agreement containing the ICSID Arbitral Clause.831

508

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In Generation Ukraine v Ukraine, the Tribunal rejected Ukraine’s argument that its unilateral consent to submit disputes to ICSID in the Ukraine–United States BIT was in some way ‘preliminary’ and subject to later confirmation, in part because it was given at a time when Ukraine was yet to ratify the ICSID Convention. The Tribunal found the language of the BIT to be unequivocal and final and confirmed that the consent to ICSID was perfected once the Convention had entered into force in respect of Ukraine.832 The position that the disputing parties can consent to the jurisdiction of ICSID before the Convention enters into force between the State party to the dispute and the foreign investor’s home State is by now so well entrenched that tribunals, at times, no longer even comment on this circumstance as a jurisdictionally noteworthy issue.833

2. Contingent Submission 510

At times, explicit provision is made for a future application of the Convention, either because the possible future ratification of the Convention by the host State is taken into account, or because the Convention may become applicable on the side of the investor. Such provision may be made either in an investment agreement with the investor834 or in a BIT. The 1968 and 1981 Model Clauses, providing for reference of disputes to ICSID by the parties, contained special clauses in anticipation of subsequent ratification of the Convention by a non-Contracting State. Under these clauses, the parties 829 830 831 832 833

Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 34. LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 351. Cable TV v St Kitts and Nevis, Award (13 January 1997) para 4.09. Generation Ukraine v Ukraine, Award (16 September 2003) paras 12.4–12.6. See Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 10–14, 58 (where the Respondent State had become a Contracting State years after agreeing to ICSID arbitration in a contract with the foreign investor). 834 For examples, see ibid paras 10–14 (concerning future accession of the host State to the ICSID Convention); Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 79 (concerning the future application of the Convention on the side of the investor).

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prospectively submit to the jurisdiction of ICSID with the proviso that the consent becomes effective when the Convention enters into force for the State. For the intervening period, an arrangement for an alternative mode of dispute settlement was suggested.835 The 1968 Clauses even provided for an undertaking by the host State to arrange for the Convention’s speedy ratification.836 The 1968 and 1981 Model Clauses contain no reference to the Additional Facility. In 1968, the Additional Facility did not exist. In 1981, it had only been approved on a temporary basis (see para. 12 supra). The 1993 version of the Model Clauses envisages a contingent submission clause in anticipation of the Convention’s ratification, combined with a submission to the Arbitration (Additional Facility) Rules, as long as the requirements ratione personae remain unfulfilled (see para. 514 infra). Similarly, BITs may contain ICSID clauses even before one or both of the parties to the BIT become Contracting States to the Convention. In some cases, BITs simply contain ICSID consent clauses without reference to the fact that one of the parties to the BIT is not a Contracting State of the Convention.837 It is clear that these clauses have no effect until both parties to the BIT are Contracting States of the Convention. In other BITs, the fact that the Convention has not yet been ratified by one or both parties is acknowledged. These provide for submission to the Centre in the event that both parties have become Contracting States of the Convention.838 Yet another group of BITs combine a contingent submission to jurisdiction under the Convention in anticipation of its ratification by both parties with a submission to the Additional Facility Rules (see paras. 516–517 infra). By contrast, few, if any, BITs envisage the situation that one of the States parties involved may denounce the Convention (see also para. 763 infra). Consent clauses in national legislation of countries that are not yet Contracting States of the Convention are possible, but not common. They would attain their effect once the State is a party to the Convention. A reference to ICSID arbitration was included in Art. 70 of the Republic of Yemen’s Law of 1991 Concerning Investment despite the fact that Yemen was not a Contracting Party in 1991 and did not become one until 2004.839

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3. The Additional Facility One of the purposes of the Additional Facility is to fill a jurisdictional gap where, in case a dispute directly arises out of an investment in the sense of Art. 25(1) of the Convention, either the host State or the State of the investor’s nationality is not a Contracting State (see paras. 12–14 supra). Even under the Additional Facility, conciliation and arbitration of such a dispute can be undertaken only if either the host State or

835 See Clauses X and XII of the 1968 Model Clauses, (1968) 7 ILM 1159, 1170–1171; Clause III of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 200. 836 Clause XI, of the 1968 Model Clauses ibid. 837 See eg France–Laos BIT (signed 12 December 1989, entered into force 8 March 1991) Art. 8; France– Yemen BIT (signed 27 April 1984, entered into force 19 July 1991) Art. 8; Turkey–United States BIT (signed 3 December 1985, entered into force 18 May 1990) Art. VI(3). See also Dolzer and Stevens (n 331) 136–138; Nassib G Ziadé, ‘ICSID and Arab Countries’ (1988) 5(2) News from ICSID 5, 7. 838 See eg Germany–Israel BIT (signed 24 June 1976, not in force) Art. 10(8); Lithuania–Switzerland BIT (signed 23 December 1992, entered into force 17 May 1997) Art. 9(3). See also Dolzer and Stevens (n 331) 138–139, 150, 152–153; Parra (n 31) 326 ff; Ziadé (n 837). 839 See Law No 22 of 1991 Concerning Investment (English translation in Abdulla MA Maktari and John McHugo, Business Laws of Yemen (Graham & Trotman 1995) 37 ff ).

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the investor’s State of nationality is a Contracting State (Art. 2(a) Additional Facility Rules). An agreement to submit to conciliation or arbitration under the Additional Facility is subject to approval by the Secretary-General of ICSID (Art. 4(1) Additional Facility Rules). Where the State party is a non-Contracting State, the Secretary-General may approve the agreement only if satisfied that the State of the investor’s nationality is a Contracting State. Since the Additional Facility is not intended as an alternative to the Convention, the Secretary-General can give approval only if the agreement providing for conciliation or arbitration under the Additional Facility also contains a contingent clause by which the parties consent to the jurisdiction of the Centre under Art. 25 of the Convention, in case by the time proceedings are instituted both the State party and the State of the investor’s nationality are Contracting States to the Convention (Art. 4(2) Additional Facility Rules). In other words, conciliation and arbitration under the Additional Facility of investment disputes in the sense of Art. 25 of the Convention is not open to parties both of which meet the requirements ratione personae under the Convention. One – but only one – of the two States in question must be a Contracting State. The purpose of this condition is to promote the use of the Convention whenever possible. The 1993 Model Clauses offer a combined contingent submission to settlement under the Convention and to settlement under the Additional Facility in the following terms: Clause 20 The Government of name of host State (hereinafter the ‘Host State’) and name of investor (hereinafter the ‘Investor’), a national of name of home State (hereinafter the ‘Home State’), hereby consent to submit to the International Centre for Settlement of Investment Disputes (hereinafter the ‘Centre’) any dispute arising out of or relating to this agreement for settlement by arbitration pursuant to: (a) the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (hereinafter the ‘Convention’) if the Host State and the Home State have both become parties to the Convention at the time when any proceeding hereunder is instituted, or (b) the Arbitration (Additional Facility) Rules of the Centre if the jurisdictional requirements ratione personae of Article 25 of the Convention remain unfulfilled at the time specified in (a) above.840

515

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The decisive criterion for the operation of one of the two alternatives is whether both States have become parties to the Convention at the time the request for arbitration is registered. Bilateral, regional, or multilateral investment treaties and trade agreements, such as the NAFTA and the ECT, have made similar use of the Additional Facility.841 If one of the parties to the treaty is not yet a Contracting State of the Convention, a treaty may simply provide for settlement of disputes under the Additional Facility without providing for the possible (future) use of the Convention.842 This may require

840 (1997) 4 ICSID Reports 368–389. 841 NAFTA (n 32) Art. 1120(1)(b); ECT (n 33) Art. 26(4)(a)(ii). 842 See eg Panama–United States BIT (signed 27 October 1982, entered into force 30 May 1991) Art. VII(3).

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an amendment of the treaty once both States have become Contracting States to the Convention.843 A wiser solution is the combination of a submission to settlement under the Convention contingent upon its ratification by both parties to the treaty together with a reference to the Additional Facility in case one of the parties to the treaty is not yet a Contracting State when the dispute is ready for settlement.844 The UK and the US Model Agreements provide for such combined submission clauses.845 For purposes of using the Additional Facility under Art. 2(a) of the Additional Facility Rules, the relevant time for determining that either the State party to the dispute or the investor’s home State are party to the ICSID Convention is the date of the request to approve access to the Centre under Art. 4(1) of the Additional Facility Rules.846

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4. Ad hoc Arbitration Even if neither the host State nor the investor’s State of nationality is a Contracting State, ICSID may play a role in dispute settlement. ICSID is able, for example, to act as administering institution for investor–State, and even State-to-State disputes, that take place neither under the Convention nor under the Additional Facility.847 The parties may also request the Chairman of the Administrative Council of ICSID or the Secretary-General of ICSID to appoint conciliators or arbitrators. The SecretaryGeneral has often undertaken to appoint arbitrators on an ad hoc basis, but is not obliged to do so.848 Therefore, it is advisable to obtain his or her consent in advance.849 The 1993 Model Clauses suggest the combination of such an arrangement with the adoption of the UNCITRAL Arbitration Rules in the following terms: Clause 22 Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. The appointing authority shall be the Secretary-General of the International Centre for Settlement of Investment Disputes. [The number of arbitrators shall be [one]/[three]. The place of arbitration shall be name of town or country. The language[s] to be used in the arbitral proceedings shall be name of language(s).]850

843 After Panama’s ratification of the Convention in May 1996 the two governments had to amend this treaty. See also Dolzer and Stevens (n 331) 139–140; Georges R Delaume, ‘ICSID and Bilateral Investment Treaties’ (1985) 2(1) News from ICSID 12, 15; Golsong (n 817). 844 See eg NAFTA (n 32) Art. 1120(1)(a) and (b); ECT (n 33) Art. 26(4); Saint Lucia–United Kingdom BIT (signed and entered into force 18 January 1983) Art. 8(2); Bulgaria–United States BIT (signed 23 September 1992, entered into force 2 June 1994) Art. VI(3)(b). See also Dolzer and Stevens (n 331) 140; Heribert Golsong, ‘Note’ (1986) 25 ILM 85; Shihata and Parra (n 460) 346. 845 UK Model IPPA (2008) Art. 8(2)(a) (Alternative II); US Model BIT (2012) Art. 24(3)(a) and (b). 846 Rusoro Mining v Venezuela (AF), Award (22 August 2016) paras 260–273. 847 See ICSID (n 6). For examples of investor-State arbitrations under non-ICSID rules administered by ICSID, see Glamis Gold v United States (UNCITRAL), Award (8 June 2009) para 187; A11Y v Czech Republic (UNCITRAL), Award (29 June 2018) para 2. For an example of an inter-State arbitration administered by ICSID, see Southern Bluefin Tuna (New Zealand–Japan, Australia–Japan), Award on Jurisdiction and Admissibility (4 August 2000) XXIII RIAA 1. 848 See Delaume (n 7) 83–88. 849 See Introductory Note to Clause 22 of the 1993 Model Clauses, (1997) 4 ICSID Reports 369–370. See also ‘The ICSID Secretary-General as Appointing Authority in Ad Hoc Proceedings’ (1989) 6(2) News from ICSID 6. 850 (1997) 4 ICSID Reports 370.

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The earlier versions of the Model Clauses also suggested the possibility of adopting the Convention and its Rules and Regulations by reference in an ad hoc arbitration agreement; the dispute settlement would then take place through procedures similar to those provided for by the Convention.851 This procedure is subject to some of the same limitations as the Additional Facility: while the parties may agree on rules analogous to those under the Convention, the Convention itself is not applicable. This aspect is particularly important in the context of enforcement (Art. 54), but also for the exclusion of other remedies (Art. 26) and of diplomatic protection (Art. 27).852 Some bilateral investment treaties also contain provisions for ad hoc arbitration with reference to the Secretary-General of ICSID as appointing authority.853 F. ‘. . . (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) . . .’

1. General Meaning and Function a) Conferral of Partial International Legal Personality 523

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In many States, investment agreements are entered into not by the government itself, but by statutory corporations or agencies and public companies that exercise public functions but are legally distinct from the State. Also, in some States it is not the central government, but another entity, such as a province or even a municipality, that deals with foreign investors. The reference in parentheses in Art. 25(1) to ‘any constituent subdivision or agency of a Contracting State’ opens the possibility for such entities, by means of a designation by a Contracting State, to become party, as respondent or claimant,854 to ICSID proceedings instead of, or in addition to,855 the host State itself.856 The designation of a constituent subdivision or agency thus confers on that entity, as an exception to the principle of international law of the unity of the State, partial international legal personality.857 This extension of party status on the host State’s side by means of a designation pursuant to Art. 25(1) has to be read in close conjunction with Art. 25(3) (see paras. 1446–1471 infra); both provisions introduce additional jurisdictional requirements for the involvement of constituent subdivisions or agencies as disputing parties in ICSID proceedings.858 While Art. 25(1) and (3) are closely related, they have different

851 See Clause XII of the 1968 Model Clauses, (1968) 7 ILM 1159, 1171; Clause III of the 1981 Model Clauses, (1993) 1 ICSID Reports 200. 852 Gaillard (n 122) 142. 853 Dolzer and Stevens (n 331) 146. 854 TANESCO v IPTL, Award (12 July 2001) para 13; East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 173–174. See also para 1447 infra. 855 Claims may be brought simultaneously against both a State and one of its designated constituent subdivisions or agencies. For examples, see Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011); Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013). 856 This explanation contained in the First Edition of this Commentary is cited in Vivendi v Argentina, Award (21 November 2000) para 52. 857 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 280–283, 325–329. On the exceptional nature of the possibility for sub-State entities to participate in dispute settlement under international law, see Mytilineos v State Union of Serbia & Montenegro and Serbia (UNCITRAL), Partial Award on Jurisdiction (8 September 2006) paras 172–173. 858 Specifically on designation under Art. 25(1) as a jurisdictional requirement, see Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.28; East Kalimantan v PT Kaltim Prima Coal, Award (28

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functions, which should not be confused. The designation addressed in Art. 25(1) relates to the abstract capacity or competence of a constituent subdivision or agency to be a party to ICSID proceedings; Art. 25(3) contains additional requirements in respect of jurisdiction ratione personae for the concrete investment dispute in question. For a conciliation commission or arbitral tribunal to exercise jurisdiction over a constituent subdivision or agency, the conditions of both Art. 25(1) and (3) must be met.859 That both requirements are sometimes addressed in the same document does not alter the fact that they are analytically distinct and must be examined separately.

b) Designation Distinguished from Attribution The mechanism in Art. 25(1) by which constituent subdivisions or agencies may become party to ICSID proceedings must be distinguished from the principles of attribution to a State of the conduct of such entities under the rules of State responsibility. Under certain circumstances States are responsible, in respect of violations of international law, for the conduct of persons or entities beyond the core organs of State or government.860 The applicable rules are codified in the International Law Commission’s Articles on State Responsibility.861 The rules of attribution, found in Arts. 4–11 of the Articles, are generally accepted to be a codification of applicable customary international law rules.862 ICSID tribunals have also recognized that there is a distinction between responsibility of the State for the conduct of a constituent subdivision or agency, and the possibility that a subdivision or agency itself may actually be party to ICSID proceedings.863 The issue of attribution of acts of State entities to the respective States has been addressed in numerous decisions.864

859 860 861

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December 2009) para 201; Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 215, 224; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 258. For further references to case law on this point, see paras 1447–1449 infra. For an overview, see Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn, OUP 2012) 216–227. See ILC, ‘Draft Articles on Responsibility of States for Internationally Wrongful Acts’ (2001) in ‘Report of the International Law Commission on the Work of Its Fifty-Third Session’ GAOR, 56th Sess, Supp No 10, UN Doc A/56/10, 26 [hereinafter Articles on State Responsibility] and UNGA Res 56/83 (12 December 2001) UN Doc A/RES/56/83 by which the General Assembly took note of the ILC Articles and recommended them to the attention of governments. See further James Crawford, The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries (CUP 2002); James Crawford and others (eds), The Law of International Responsibility (OUP 2010). Daniel Bodansky and John R Crook, ‘Introduction and Overview’ (2002) 96 AJIL 773, 783; James Crawford, ‘Investment Arbitration and the ILC Articles on State Responsibility’ (2010) 25 ICSID Rev 127, 132–134; Simon Olleson, ‘Attribution in Investment Treaty Arbitration’ (2016) 31 ICSID Rev 457, 461–462 (with further reference also to the jurisprudence of the ICJ). See also Ian Brownlie, System of the Law of Nations: State Responsibility pt I (Clarendon Press 1983) ch VII; Clyde Eagleton, The Responsibility of States in International Law (New York UP 1928) 44–75. See eg Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 74; Vivendi v Argentina, Decision on Annulment (3 July 2002) para 96; SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 29, fn 6; Generation Ukraine v Ukraine, Award (16 September 2003) paras 10.2–10.7; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 107; see also Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 242–248. For discussion and further references, see Crawford (n 862); Olleson (n 862) 462 ff. See also Csaba Kovács, Attribution in International Investment Law (Wolters Kluwer 2018).

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In Salini v Morocco,865 the investor–State dispute settlement provision in Art. 8 of the applicable BIT between Italy and Morocco referred to ‘all disputes or differences . . . concerning an investment.’ The Tribunal distinguished between breaches of contract committed by the State itself and breaches committed by a distinct entity. It held that ICSID’s jurisdiction extended to BIT violations and to breaches of a contract that binds the State directly. ICSID’s jurisdiction did not extend to breaches of a contract with an entity of the State, unless these breaches also amounted to a violation of the BIT. Therefore, in the absence of a designation of the constituent subdivision or agency pursuant to Art. 25(1), contract claims that relate to a contract with an entity of the State, and which do not amount to violations of the BIT, are outside ICSID’s jurisdiction. In Vivendi v Argentina, the Claimants brought a claim against Argentina invoking breach of the Argentina–France BIT. Argentina asserted that the investors’ dispute was with the Province of Tucumán, with which the investors had a contractual relationship, and not the Argentine Republic. Argentina added that it had not designated the Province of Tucumán to the Centre, as required by Art. 25(1), or given its consent to it being a party to ICSID proceedings, as required by Art. 25(3).866 The Tribunal properly dismissed this objection to its jurisdiction. Since the Claimants had characterized their case as a breach of the BIT, the dispute was indeed between the Claimants and a Contracting State, given that the Claimants sought to hold Argentina responsible for the conduct of its Province.867 The Tribunal said: Moreover, the Tribunal cannot accept the position of Respondent that its failure to designate or consent to the application of the ICSID Convention to the Province of Tucumán under Article 25 of that treaty deprives the Tribunal of jurisdiction to hear the claims of CGE against the Argentine Republic. The designation and consent provisions of paragraphs (1) and (3) of Article 25 stipulate that a subdivision or agency of a Contracting State may, with the permission of that State, submit itself to the jurisdiction of ICSID for purposes of resolving a legal dispute arising out of an investment dispute between that subdivision or agency and a national of another Contracting State. Those optional provisions do not apply to disputes between the Contracting State itself (in this instance the Argentine Republic) and a national of another Contracting State that may be related to an investment contract between a subdivision or agency of that State and the national. In other words, Article 25(3) does not restrict the subject matter jurisdiction of the Tribunal; rather, it creates potential efficiencies in operations of ICSID by establishing, with approval of the central government, the right of such agencies or subdivisions to be parties in their own right to an ICSID proceeding.868

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Therefore, designations of constituent subdivisions or agencies serve procedural convenience, but do not affect questions of State responsibility. The State entity’s party status is independent of the issue of the attribution of its actions to the State and solely depends on a valid designation pursuant to Art. 25(1). In fact, if attribution to the State cannot be established, the State entity may be the only potential respondent under the rules of State responsibility. In that case, however, the designation under Art. 25(1) as such does not make the law that governs the relations between the foreign investor and 865 Salini v Morocco, Decision on Jurisdiction (23 July 2001) paras 60–62. 866 Vivendi v Argentina, Award (21 November 2000) paras 41, 46. 867 ibid para 50. 868 ibid para 51.

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the host State, for example a BIT, also applicable to the relationship between the foreign investor and the State entity.869 By contrast, where attribution can be established, the State, if it has also given consent, may be an alternative or additional respondent, even if a designation of the State entity has been made.

c) Designation Distinguished from Consent Designation must also be distinguished from the need for consent of the disputing parties. A designation under Art. 25(1) by the Contracting State of a constituent subdivision or agency does not substitute for the subdivision’s or agency’s consent to the Centre’s jurisdiction. In order for ICSID jurisdiction to exist over the constituent subdivision or agency, the entity in question must also express its own consent. Thus, in LETCO v Liberia, the Tribunal rejected the Claimant’s attempt to join a Government agency to the proceedings, not on the basis of the absence of its designation to the Centre, but for lack of the agency’s consent.870 Conversely, if ICSID jurisdiction is sought in relation to the host State, the latter’s consent is needed, even if a constituent subdivision or agency has consented to ICSID jurisdiction. This is well illustrated by Cable TV v St Kitts and Nevis.871 This case arose from an agreement of September 1986 containing an ICSID arbitration clause between the Claimants and the Nevis Island Administration (NIA). Under the Constitution of St. Kitts and Nevis, the country is organized as a Federation with the Island of Nevis as an autonomous entity within that Federation.872 The Request for Arbitration named the Federation as Respondent. The Tribunal noted that the Federation was not a party to the agreement containing consent to ICSID jurisdiction and that the NIA had not been designated as a constituent subdivision or agency. The Tribunal held that, in the absence of a designation of the NIA under Art. 25(1), it had no jurisdiction; it was also not possible to substitute the Federation for the NIA.873 There is a need for the host State’s consent, even if the host State has chosen to implement the project in question on the basis of an investment contract with one of its agencies, and has designated that agency pursuant to Art. 25(1). Thus, in Niko Resources v Bangladesh, the Tribunal declined jurisdiction over the host State, because it had not given consent to ICSID arbitration, unlike two of its agencies with whom the investor, upon request of the State, had entered into contractual arrangements to implement the project in question, which provided for ICSID arbitration.874 The foreign investor must also express its consent in relation to the subdivision or agency in question; consent in relation to the Contracting State is not sufficient to establish ICSID jurisdiction.875 The possibility for a constituent subdivision or agency 869 On possible avenues for making an investment treaty applicable to a claim against a subdivision, see Douglas Pivnichny, ‘Treaty-Based Claims against Subdivisions of ICSID Contracting States’ (2017) 16 Wash U Global Stud LR 125. 870 See LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 351, 354. 871 Cable TV v St Kitts and Nevis, Award (13 January 1997). See also East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 173–174. 872 Cable TV v St Kitts and Nevis, ibid paras 2.01–2.17. 873 ibid paras 2.22–2.33, 5.06–5.10, 7.02. 874 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 242–256. See already Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 3.01–3.02. 875 Churchill Mining v Indonesia, Procedural Order No 2 (Request for Joinder) (5 February 2013) para 25.

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to become party to an ICSID proceeding by means of designation is a procedural reflection of the privity of contract that may exist between a foreign investor and the State entity in question; it does not in any way alter that privity.

d) Designation Distinguished from Territorial Scope of Application 534

Given its application to constituent subdivisions, the designation under Art. 25(1) should also not be confused with the written notice Contracting States can give concerning excluded territories under Art. 70 of the Convention. Art. 70 deals with the territorial application of the Convention, which may be varied by special notice. By contrast, the parenthetical clause of Art. 25(1) deals with a special jurisdictional status that may be granted, inter alia, to territorial units that are within the Convention’s territorial reach.

2. Negotiating History 535

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Neither the Working Paper nor the Preliminary Draft contained any reference to entities of the Contracting State (History, Vol. I, pp. 110, 112).876 When inquiries were first made whether public and political entities should be included, Mr. Broches reacted with reserve in view of ‘enormous difficulties, constitutional and otherwise’ (History, Vol. II, pp. 65–66). Later on, a delegate from Tanganyika pointed out that in many countries investment agreements were concluded by quasi-governmental institutions, such as statutory corporations or public companies (ibid., p. 258). After some further discussion (ibid., pp. 297, 321, 366, 393, 473–474), a new draft provision was circulated, which was designed to give political subdivisions and instrumentalities standing before the Centre (ibid., pp. 288–289, 396, 492). Reactions were mostly positive (ibid., pp. 396, 398, 446, 500, 502, 507, 551, 564), although there was also a critical voice (ibid., pp. 400, 409–410). The First Draft recognized the interest of allowing for the resolution of disputes arising out of agreements between foreign investors and State entities and thus provided that ICSID jurisdiction could cover disputes involving a Contracting State ‘(or one of its political subdivisions or agencies),’ without yet foreseeing a designation requirement (History, Vol. I, p. 116). At this point, there was a good deal of criticism and a number of delegates suggested the deletion of the clause (History, Vol. II, pp. 657, 701, 702, 705, 708, 709, 838–839). Concerns raised by several delegations focused on the resulting international legal personality of sub-State entities, which could interfere with purely domestic affairs and enter into conflict with the constitutional law of some States (ibid., pp. 657, 838). As a result, a Working Group was formed to discuss a number of open questions (ibid., pp. 866–867). After further extensive discussion in the Legal Committee (ibid., pp. 856–860), the solution found in the final draft to the two competing concerns – that is, to allow, in principle, the use of the Centre in order to resolve contractual investment disputes with sub-State entities and to give Contracting States control over whether sub-State entities were conferred international legal personality for this purpose – was to combine the designation of eligible subdivisions and agencies, which would grant limited international legal personality in the abstract, with

876 For a more elaborate summary of the negotiating history on this point, see Pivnichny (n 869) 130–135.

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the need for the host State’s approval of the entity’s consent to arbitrate (or waiver thereof ); this would ensure control of the host State for each concrete submission of a constituent subdivision or agency to the jurisdiction of the Centre (History, Vol. II, p. 879) (see also para. 1450 infra). The First Draft, which already contained a reference to political subdivisions or agencies, did not mention any process for their official accreditation. The idea of a designation arose from a British proposal to create some machinery for enabling investors to identify political subdivisions or agencies (History, Vol. II, pp. 667, 702). It was supported by the delegates from New Zealand and Australia (ibid., pp. 703, 704) and later incorporated into several working drafts (ibid., p. 867). After some debate on the practicability of the idea (ibid., pp. 856, 857), a vote was taken on whether ‘the Contracting State must designate a body of a lower order before the latter can be a party to proceedings under the Convention.’ The proposal was adopted by a large majority (ibid., pp. 859–860). After a short debate as to whether the designation requirement should refer only to agencies or to constituent subdivisions as well, a vote resulted in a decision that it would apply to both (ibid., p. 857). The question was also raised whether the designations should be made for a particular purpose or in general. Mr. Broches responded that this should be left to the State concerned (ibid., p. 858). The proposal as adopted (ibid., p. 879) was incorporated into the Revised Draft (ibid., p. 918) and remained unchanged when becoming part of the Convention. During the Convention’s drafting, there were also lengthy discussions concerning the general description of the entities to be included and the precise meaning of the terms chosen. Two main sets of entities were debated. One set consisted of constituent or component parts of States, such as states, provinces, cantons, and municipalities. The other set consisted of public agencies performing governmental functions, such as development corporations or investment boards (History, Vol. II, pp. 288–289, 321, 366, 393, 396–397, 446–447). The wording suggested initially was ‘political subdivision or instrumentality’ (ibid., pp. 288, 396, 492). Both parts of the phrase came under criticism. It was suggested that the term ‘political subdivison’ did not adequately express the idea of a State’s component part (ibid., p. 507). Mr. Broches explained that the word ‘instrumentality’ was only intended to include governmental agencies. While these were normally part of, and indistinguishable from, the government, they were legally separate entities in some countries, although entrusted with government functions (ibid). The First Draft adopted the term ‘political subdivisions,’ but used the term ‘agency’ instead of ‘instrumentality’ (History, Vol. I, p. 116). The US representative wanted the reintroduction of ‘instrumentalities’ (History, Vol. II, pp. 703, 837). The British delegate thought that ‘political subdivisions or agencies’ really meant parts of a State and that these would be acting on behalf and in the name of the State (ibid., p. 702). In the Working Group (see para. 536 supra), the suggestion was made simply to refer to ‘any body’ (History, Vol. II, p. 867), but this raised questions whether constituent subdivisions of States were still included and whether the phrase ‘such as a State, Republic or Province’ should be added (ibid., p. 856). Eventually, the phrase ‘or any constituent subdivision or agency of a Contracting State’ was adopted (ibid., p. 879). The precise domestic status of the entities in question was not clarified. There was no agreement whether they needed to have juridical personality distinct from the Contracting State (History, Vol. II, p. 867). Still, it was emphasized that an agency

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would be acting on behalf of the Contracting State though acting in its own name (ibid., pp. 857, 858). There was some disagreement as to whether subdivisions of a lower level, such as municipalities, would be included (ibid., pp. 856, 857). Another point that was left open was the question whether agencies of political subdivisions should be included. The idea of including them expressly was dropped ‘for the sake of simplicity’ (ibid., pp. 859–860).877

3. Constituent Subdivision or Agency 541

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It has been pointed out that a precise definition of the term ‘constituent subdivision or agency’ is of subordinate importance in view of the requirement that the Contracting State must designate any such entity to the Centre; designation, in light of the authentication function it has (see para. 550 infra), would create a very strong presumption that the entity in question is indeed a ‘constituent subdivision or agency.’878 For example, in Noble Energy v Ecuador, the Tribunal inferred from the mere designation to the Centre of the Consejo Nacional de Electricidad (CONELEC), Ecuador’s national electricity council, its quality as an agency in the sense of Art. 25(1).879 Actual designation could also preclude the Contracting State or the designated entity from arguing that the Convention’s requirements were not fulfilled because the entity was in fact not a ‘constituent subdivision or agency.’880 Nevertheless, the existence of a ‘constituent subdivision or agency’ is ultimately for the conciliation commission or arbitral tribunal to decide. It is part of the Convention’s objective criteria and must be determined, if necessary, in the framework of the commission’s or tribunal’s power to rule on matters of jurisdiction and competence in accordance with Arts. 32 and 41.881 Consequently, it is neither necessary, nor sufficient, that, in the State’s view, the entity qualifies as a ‘constituent subdivision’ or ‘agency,’ or that the designating instrument qualifies or characterizes the entity as such. It also matters little if a State expressly designates an entity as a ‘constituent subdivision,’ although that entity would more appropriately need to be considered as an ‘agency’ in the sense of Art. 25(1),882 or vice versa. The clause as ultimately adopted was designed to create flexibility for Contracting States in order to take account of national peculiarities. The term ‘constituent

877 This omission was perceived as a problem for Australia. See Ross P Buckley, ‘Some Jurisdictional Difficulties with Australia’s Ratification of the ICSID Convention’ (1993) 2 Asia Pac LR 92, 93; Julian R Moti, ‘Australia to Ratify the ICSID Convention’ (April 1991) 17 Australian Construction Law Newsletter 26, 27. On Australia’s designations, see paras 554, 1467 infra. 878 CF Amerasinghe, ‘Jurisdiction Ratione Personae under the Convention for the Settlement of Investment Disputes between States and Nationals of Other States’ (1974/1975) 47 BYBIL 227, 234. 879 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 63. 880 Broches (n 159) 354; Georges R Delaume, ‘ICSID Arbitration: Practical Considerations’ (1984) 1 J Int’l Arb 101, 109; Delaume (n 120) 179–180; Szasz (n 120) 31. Cf also Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 260–270 (addressing estoppel in the context of designation). 881 Amerasinghe (n 878). See also Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.26. 882 This is what may have occurred in Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 9, 11, where the English translation of the original award in French indicates that the then Statecontrolled company SOCAME was designated as a ‘constituent subdivision,’ not as an ‘agency,’ which would be the correct classification. The extract of the original French Award in (1984) 111 JDI 409 does not contain the relevant passage. For further discussion of the case, see paras 567–568 infra.

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subdivision’ covers any territorial entity below the level of the Contracting State itself. The Tribunal in Cable TV v St Kitts and Nevis understood it as covering ‘a colony or partially autonomous government forming part of or belonging to the state.’883 It concluded that the Nevis Island Administration qualified as a ‘constituent subdivision,’ as it is a creature of the Constitution and is a separate juridical body, clothed with several powers and functions, over and above powers and functions normally vested in a corporation or a company, [which] has exclusive responsibility for the administration within the island of Nevis of certain matters.884

The Tribunal in East Kalimantan v PT Kaltim Prima Coal held that

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the term ‘constituent subdivision’ covers a fair range of subdivisions including municipalities, local government bodies in unitary states, semi-autonomous dependencies, provinces or federated States in non-unitary States and the local government bodies in such subdivisions.885

The concept of ‘agency’ was equally intended to cover a broad range of entities.886 The term does not refer to the private law concept of ‘agency,’887 but to an organizational unit that fulfills public functions or exercises public authority in and on behalf of the host State. The term should thus not be read in institutional terms, but functionally. This means that whether the ‘agency’ is organized under private law (e.g. in the form of a corporation under a State’s company law) or public law (i.e. an agency in the administrative law sense, or a statutory corporation under public law) is of secondary importance. What matters primarily is that it performs public functions on behalf of the Contracting State or one of its constituent subdivisions.888 A company organized under private law can therefore qualify as an agency in the sense of Art. 25(1), as long as it fulfills public functions delegated to it by the State.889 This is certainly true if the company is owned or controlled by the government. Thus, the Tribunal in Niko Resources v Bangladesh qualified both the Bangladesh Oil Gas and Mineral Corporation (Petrobangla), a statutory corporation created by the Bangladesh Oil, Gas and Mineral Corporation Ordinance of 1985, and Bangladesh Petroleum Exploration & Production Company Ltd (BAPEX), a wholly owned subsidiary of Petrobangla incorporated under Bangladesh’s Companies Act of 1994, as agencies in the sense of Art. 25(1), in light of the governmental functions delegated to them.890

883 Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.28. 884 ibid para 2.32. 885 East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) para 191 (referring to Amerasinghe (n 878) 233). 886 Amerasinghe (n 878) 233–234. 887 Cf Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 236–241. 888 See Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.32. This interpretation would also lend support to extending the concept to agencies of constituent subdivisions. See also Amerasinghe (n 878) 233–234; Amerasinghe (n 96) 185–186. 889 Cf also the discussion of Klöckner v Cameroon at paras 567–568 infra. However, whether SOCAME was able to exercise any public authority is not clear from the case. 890 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 220–228, 261.

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Similarly, government-owned companies that administer government funds or assets that fulfill a public function and that do not operate in a market setting qualify as agencies in the sense of Art. 25(1).891 It would also seem possible that a privately owned company that has been empowered to exercise public authority, delegated to it by the State, can qualify as an agency in the sense of Art. 25(1), given that a foreign investor would find itself in the same relationship of supra- and subordination as in respect of a unit that exercises public authority and is fully owned, or part of, the host State.892 By contrast, government ownership or control of a private law company, which is not able to exercise public authority, and does not fulfill specific governmental functions, but rather operates as one among several market actors, is likely unable to qualify as an agency in the sense of Art. 25(1).893 There has also been some discussion as to whether the entity in question must have independent legal personality under domestic law, which is frequently the case in ICSID practice,894 or whether it can be an organizational part of the host State. The idea that, by means of designation, ‘the distinct legal personality of the agency under domestic law is recognised at the level of ICSID’895 would militate for requiring that the entity has a distinct legal personality under domestic law.896 On the other hand, the negotiating history of the Convention, including the original use of the term ‘instrumentality,’ suggests that initially only ‘agencies which were legally part of and indistinguishable from the central government’ were intended to be able to act as party to an ICSID proceeding.897 Against this background, it does not seem to be necessary that the entity in question has separate legal personality. In fact, ICSID practice knows several

891 See SEEG v Gabon, Award (29 March 2019) (concerning a company administering government assets in a State-run public utilities sector); Baymina v Boru, Decision on Jurisdiction (19 August 2016) and ibid, Award (28 July 2017) (involving a State-owned pipeline company). In Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 5, 50, 268, 271, the Tribunal ultimately did not decide whether Electricité du Cambodge, which had morphed from a department within a ministry into a State-owned limited liability company, qualified as an agency under Art. 25(1). Its lengthy analysis on designation is, however, highly suggestive of a positive answer on the entities’ qualification as an agency; see ibid paras 215 ff. 892 In this direction, Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 225–228. But see the caveat in Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.28 that ‘a body corporate established in the Contracting State wholly or substantially owned by private citizens would not appear to qualify for designation.’ 893 Amerasinghe (n 878) 234; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 220–224. 894 State corporations with separate legal personality are among the ‘agencies’ that appear most frequently in ICSID arbitrations. See Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 9; Scimitar v Bangladesh, Award (4 May 1994); TANESCO v IPTL, Award (12 July 2001); Standard Chartered Bank v TANESCO, Decision on Jurisdiction and Liability (12 February 2014). There are also numerous ICSID arbitrations involving Petroecuador, Ecuador’s State petroleum corporation; see eg Repsol v Petroecuador, Award (20 February 2004); City Oriente v Ecuador, Decision on Provisional Measures (19 November 2007); Burlington v Ecuador, Decision on Jurisdiction (2 June 2010) para 78; Repsol and others v Ecuador and PetroEcuador, Order on Discontinuance (9 February 2011). 895 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 282. See also ibid paras 229–235, 261. 896 Cf also Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.32. 897 Amerasinghe (n 878) 233.

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examples where governmental agencies without separate legal personality were involved as a party to ICSID arbitrations.898

4. Designation to the Centre a) Purposes of Designation In addition to fulfilling of the objective criteria of qualifying as either a ‘constituent subdivision’ or an ‘agency,’ there must also be a designation of the entity concerned to the Centre. Designation is an act of the Contracting State by which it manifests its intention that a constituent subdivision or agency can be, in abstracto, a party to an ICSID arbitration. As stated by the Tribunal in Niko Resources v Bangladesh, the designation has, as its main purpose, to confer on the constituent subdivision or agency in question limited international capacity before the Centre.899 Apart from this main purpose, designations also have a number of secondary purposes. One such purpose is to provide information to foreign investors and contribute to legal certainty by giving an investor an assurance that he or she is dealing with an entity that can, in principle, and subject only to further approval pursuant to Art. 25(3), be a party to ICSID proceedings.900 Another secondary purpose concerns the authentication connected to a designation made by the host State, as there may be a dispute whether an entity is in fact a constituent subdivision or agency.901 In that context, a designation carries a strong presumption that the entity that is the object of designation qualifies as a ‘constituent subdivision or agency’ in the sense of Art. 25(1), although the notion of constituent subdivision and agency is objective, and not for the host State to determine unilaterally (see paras. 541–542 supra).902 A final, secondary purpose is safeguarding the desire on the part of the host State to preserve control over semi-autonomous entities generally in their dealings with foreign investors.903 In addition, in respect of concrete relationships between foreign investors and sub-State entities, host State control is ensured by withholding approval of consent to jurisdiction under Art. 25(3) (see paras. 1446–1471 infra).904

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b) Author and Intention to Designate As the wording of Art. 25(1) makes clear, the author of the designation must be the Contracting State.905 It is therefore clear that the entity concerned cannot designate 898 See Manufacturers Hanover Trust v Egypt, Order on Discontinuance (24 June 1993); Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 63. 899 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 269, 280–283, 325–329. 900 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 227; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 277–279. 901 Amerasinghe (n 878) 235 (referring to History, Vol II, 702). 902 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 218 (referring to Broches (n 827) 642, who states that ‘[t]he limited purpose of the requirement of designation is to avoid doubt whether an entity is a constituent subdivision or agency and thus qualified to be a party to a dispute before the Centre’). 903 In this sense also Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 228, 230, 250 (attributing to the designation requirement a ‘“gate-keeping” function’). 904 In this sense Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 329. 905 Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.26; Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 249; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 293, 300, 316, 325.

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itself. For the same reason, the investor and the entity cannot agree that the entity qualifies as a ‘constituent subdivision’ or ‘agency’ and designate it as such to the Centre.906 At the same time, the ICSID Convention does not establish who within the Contracting State is competent to issue a designation. This is left for the internal organization of the State concerned. Often, the competent authority will be a ministry of the central government, occasionally the host State’s legislator. But it is also conceivable that a domestic court interpreting and applying domestic law can be the author of a designation.907 In any event, an ICSID tribunal or conciliation commission has the power to verify whether the author of the designation was internally competent, taking into account the relevant domestic law.908 In terms of content, a designation must demonstrate the host State’s intention to confer procedural status on a constituent subdivision or agency before the Centre. While the instrument containing the designation does not have to qualify or characterize the entity in question expressly as a ‘constituent subdivision’ or ‘agency’ in the sense of Art. 25(1), the instrument in question must evince a clear intention to confer the capacity on that entity to become a party to an ICSID proceeding.909 To this end, the instrument in question must identify the subdivision or agency in question910 and make clear that capacity is conferred on it to submit to ICSID’s jurisdiction.911 An incorrect qualification of an ‘agency’ as a ‘constituent subdivision’ or vice versa would not matter (see also para. 542 supra). Designations can be made either in general form, that is, for any future dispute with foreign nationals, or ad hoc, that is, for a specific project, agreement, or even dispute. Designations may also be made subject to conditions, limitations, or time limits.912

c) Form of Designation 554

In ICSID practice, designations encompass both general designations made by Contracting States in the form of notifications, which the Centre includes in a list published as document ICSID/8-C,913 and ad hoc designations made on the occasion of specific investment projects,914 for specific investment agreements, or even for the purpose of a concrete dispute; none of these is included in the list of notifications.915

906 Amerasinghe (n 878) 234. 907 See East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 196–198. 908 Cf ibid paras 165–168; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 337–341; Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) paras 214–216. 909 Amerasinghe (n 878) 235; East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) para 192; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 299. 910 Generic circumscriptions of classes of subdivisions or agencies or ‘beneficiaries to a contract’ without naming the entities expressly is likely not sufficient; cf East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) para 195. 911 ibid para 194. 912 The same effect may thus also be achieved by the State by withholding approval of consent under Art. 25(3) selectively. See Amerasinghe (n 96) 187. 913 Available at accessed 10 January 2021. 914 See Attorney-General v Mobil Oil NZ Ltd, High Court Wellington (1 July 1987) [1989] 2 NZLR 649, 655; (1997) 4 ICSID Reports 117, 123–124. 915 The list of designated constituent subdivisions or agencies has a note attached to it saying that ad hoc designations and notifications made by Contracting States pursuant to Art. 25(1) and (3) are excluded from the listing. Appearing on the list is therefore not necessary for a designation to be valid. See also

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Designations on the list fall into two categories. Australia, Canada, Indonesia, and the United Kingdom have designated territorial units, in other words constituent subdivisions. Guinea, Kenya, Madagascar, Nigeria, Peru, Portugal, Sudan, and Turkey have designated entities of a non-territorial nature, in other words agencies. Ecuador, when it was still a Contracting Party, had designated two agencies pursuant to Art. 25(1). The ICSID Convention does not subject the designation to any formal requirements; it leaves the choice of form to the State.916 Notably, the Convention does not impose a ‘structured and standardised system of notification’ for designations pursuant to Art. 25(1).917 Instead, the host State’s intention to designate an entity in the sense of Art. 25(1) can be expressed in a variety of ways and instruments. It can, but does not have to, be made through formal notification communicated to the Centre. It can also be included in an agreement between the Contracting State and the investor, in legislation by the Contracting State that includes a designation in the sense of Art. 25(1),918 or in a BIT.919 Given that the ICSID Convention does not impose a specific form for the designation of a constituent subdivision or agency, tribunals have also considered the possibility of implied or implicit designations.920 Notably, the Tribunal in Niko Resources v Bangladesh held that a State’s intention to designate an agency could flow implicitly from its express and formal approval of an investment agreement to which one of its agencies was party and which contained an ICSID clause. In the Tribunal’s view,

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a particularly strong case of implicit designation occurs when the State expressly and formally approves in writing that one of its agencies enters into an investment agreement containing an ICSID clause. Since designation has as its purpose and objective to confer on the agency the competence or capacity to become party to an ICSID arbitration, the approval by the State of an ICSID arbitration commitment by one of its agencies presupposes that this agency has the capacity to conclude such a commitment, which means that it must be capable to be a party to an ICSID arbitration.921

Under the circumstances of the case, the host State’s intention that two of its agencies should be able to resolve disputes with the foreign investor by recourse to ICSID arbitration was clear. The Bangladeshi Government had not only approved the

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East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) para 192; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 284–291. East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 192–193; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 284, 292, 326. In this sense, Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 227, 232. On the difference between designation and notification, see Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 265–276. See Sri Lanka, Greater Colombo Economic Commission Law (1978) s 26(2)(a). See also Manufacturers Hanover Trust v Egypt, Order on Discontinuance (24 June 1993). Many US BITs contain an Article which provides: ‘This Treaty shall apply to the political subdivisions of the Parties.’ It is doubtful whether such a treaty provision could form the basis of a designation under Art. 25 of the Convention. The general reference to political subdivisions is too unspecific. Moreover, it is not specially linked to the clause providing for ICSID jurisdiction in the BIT. See also Clause VI of the Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Treaties, (1969) 8 ILM 1341, 1348. See East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) para 197 (mentioning this possibility). Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 301.

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respective contracts without reservation, but also suggested the inclusion of ICSID arbitration clauses in the agreements in question.922 Under these circumstances, the Tribunal could infer the intention to designate the two agencies in question from the approval by the Government of the agencies’ consent to ICSID arbitration (see paras. 1452–1453 infra).

d) Communication of the Designation to the Centre 558

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The designation must also be communicated to the Centre.923 This concerns both general and ad hoc designations. In the practice of ICSID tribunals, there is broad agreement on this point.924 The view expressed by Broches that failure of a formal designation should not defeat jurisdiction if the entity concerned is proven or conceded to be a constituent subdivision or agency of a Contracting State,925 would therefore seem to go too far. Designation, and its communication to the Centre, cannot be dispensed with altogether. In this context, it has been accepted, for example, that the communication of a designation could not only take the form of a formal notification addressed to the Centre, but be effectuated through other acts of the Contracting State that have ‘public notoriety’ and thus are able to bring a designation to the Centre’s attention, such as a designation contained in national legislation926 or in a BIT. It is controversial, however, whether a designation can also be communicated by the investor, or whether it must necessarily come from the State. The Tribunal in Cambodia Power v Cambodia considered ‘communication [of the designation to] be the sole preserve of the State itself – and not a function which the investor can discharge.’927 Relying on the fact that the designation as such had to be made by the State, the Tribunal concluded that ‘communication of a designation to the Centre by anyone else than the Contracting State does not comply with Article 25(1) of the Convention.’928 On the other hand, it has been argued that where there is a clear intention to designate, it does not matter how and through whom the communication reaches the Centre.929 The Tribunal in East Kalimantan v PT Kaltim Prima Coal concluded that ‘the designation requirement may in particular be deemed fulfilled when a document that emanates from the State is filed with the request for arbitration and shows the State’s intent to name a specific entity as a constituent subdivision or agency.’930

922 ibid paras 332–336. 923 Amerasinghe (n 96) 187–189. 924 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 218–236, 238; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 303, 316. 925 Broches (n 827) 642 (relying on the unpublished jurisdictional decision in Manufacturers Hanover Trust v Egypt, Order on Discontinuance (24 June 1993)). 926 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 245 (making reference to Manufacturers Hanover Trust v Egypt, Order on Discontinuance (24 June 1993)). 927 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 250. 928 ibid paras 245–254 (quote at para 251). 929 See Amerasinghe (n 96) 188. See also Carolyn B Lamm, ‘Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1991) 6 ICSID Rev 462, 469; Szasz (n 120) 31. 930 East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) para 193.

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Insisting that designation and communication are analytically and conceptually different,931 the Tribunal in Niko Resources v Bangladesh held that an arbitral tribunal may give effect to an existing ad hoc designation which may be made known to ICSID by an investor when filing a Request for Arbitration by a statement pertaining to a specific dispute, particular facts, and in accordance with Institution Rule 2.932

Overall, the view of the Tribunal in Cambodia Power v Cambodia is overly strict. It disregards that the Convention does not provide for specific formalities for how a designation is communicated to the Centre. In particular, it does not require formal notification, as in the context of other provisions, such as Arts. 16(3), 25(4), or 54(2).933 Art. 25(1) only speaks of the designation having been made by the State, but is silent on how that designation is brought to the Centre’s attention. Moreover, the wording of Art. 25(1) that the entity in question must be designated ‘to the Centre’ does not have to be read as requiring the State itself to communicate the designation; rather ‘designation to the Centre’ refers to the State making a choice in conferring the entity in question the capacity to be a party to ICSID proceedings.934 This choice, which is the designation, is made prior to its communication to the Centre. Hence, there is no reason why a designation already made by the host State should not be valid when it is brought to the Centre’s attention by an investor or the entity in question once a dispute formally ensues. It should also be noted that the host State’s interest in controlling the use of ICSID by its subdivisions and agencies does not need to be safeguarded by giving the State control over the communication of the designation; instead, the State’s interest in controlling the use of ICSID by sub-State entities is protected by the need for approval of the entity’s consent pursuant to Art. 25(3).935 Despite all this, it is nevertheless advisable that the Contracting State sends a clear and separate notification of the designation to the Centre in order to avoid any misunderstandings and jurisdictional difficulties. Similarly, it is useful for the investor to obtain confirmation from the State or the entity in question that a designation has, in fact, been made. The Model Clauses of 1993 provide the following formula for this purpose: Clause 5 The name of constituent subdivision or agency is [a constituent subdivision]/[an agency] of the Host State, which has been designated to the Centre by the Government of that State in accordance with Article 25(1) of the Convention.936

931 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 265–276, 317–318. 932 ibid para 327. See also Amerasinghe (n 878) 235 (stating that ‘it will suffice if the designation by the State is brought to the attention of the Centre, whether by the State concerned or by one of the parties to the consent agreement, provided this is done before the initial intention is changed’). 933 See Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 271–276, 317–318. 934 ibid paras 267–270. 935 ibid para 329. 936 (1997) 4 ICSID Reports 361. See also Clause IV of the 1968 Model Clauses, (1968) 7 ILM 1159, 1165; Clause VI of the 1981 Model Clauses, (1993) 1 ICSID Reports 201–202.

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e) Time of Designation 564

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There is no particular time limit for the designation of an entity to the Centre. For the investor and the entity involved, it would appear desirable that the designation be in place by the time they sign an agreement that contains the consent to ICSID. But it is entirely possible for the designation to be made after consent is given, or even after a dispute has arisen.937 If no designation has been made at the time the agreement is made, the State or the entity may give an undertaking that the designation will be made in due course.938 In either case, ICSID’s jurisdiction over a dispute involving a constituent subdivision or agency exists only once the designation has actually been made. In any event, in order to institute proceedings against a constituent subdivision or agency validly, the designation must have been made. Therefore, the day on which the request for conciliation or arbitration is registered is normally the critical date for the existence of a designation.939 Upon instituting proceedings, Rule 2 of the Institution Rules provides in relevant part: (1) The request shall: (a) designate precisely each party to the dispute and state the address of each; (b) state, if one of the parties is a constituent subdivision or agency of a Contracting State, that it has been designated to the Centre by that State pursuant to Article 25(1) of the Convention; (c) indicate the date of consent and the instrument in which it is recorded, including, if one party is a constituent subdivision or agency of a Contracting State, similar data on the approval of such consent by that State unless it had notified the Centre that no such approval is requested. . . .940

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In the absence of a valid designation of the constituent subdivision or agency in question, the Secretary-General may reject the request as manifestly outside the jurisdiction of the Centre by virtue of his or her screening power under Arts. 28(3) and 36(3). The same would apply where such a constituent subdivision or agency wishes to initiate proceedings against an investor. However, Rule 2 of the Institution Rules does not require that evidence of a valid designation, or a specific instrument containing it, is furnished; it is sufficient that the request states that the designation has occurred.941 This may explain a somewhat looser scrutiny of the Secretary-General in respect of the requirement of designation as compared to other requirements for the Centre’s jurisdiction.942 The proceedings in Klöckner v Cameroon show that, in exceptional circumstances, a designation may be made even after the institution of proceedings before the arbitral 937 Amerasinghe (n 878) 236. 938 See Delaume, ‘Le Centre’ (n 163) 795–796; Georges R Delaume, ‘ICSID Arbitration in Practice’ (1984) 2 Int’l Tax & Bus Law 58, 62. 939 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 289. More generally on the critical date, see paras 44–67 supra. 940 On the approval of consent by a constituent subdivision or agency, see paras 1450–1464 infra. 941 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 298. 942 A number of cases involved government entities as parties, although there was no clear evidence of their designation to the Centre. See Scimitar v Bangladesh, Award (4 May 1994); Manufacturers Hanover Trust v Egypt, Order on Discontinuance (24 June 1993); East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009).

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tribunal.943 In this case, the 1971 Protocol of Agreement between the investor and the Government provided for the establishment of a joint venture company, SOCAME. Fifty-one percent of its shares were held by the European investors, 49 percent by the Cameroonian Government. The agreement contained an ICSID arbitration clause. Subsequently, a 1972 Supply Contract, which also contained an ICSID arbitration clause, was signed between the same parties. Upon the establishment of SOCAME in 1973, the Government transferred all its rights and obligations under the Supply Contract to SOCAME. A third contract, the 1973 Establishment Agreement, was signed by the Government and SOCAME. It also contained an ICSID arbitration clause. After a capital increase in SOCAME, Klöckner and its European partners lost majority control of the company in 1978.944 In 1981, Klöckner submitted a Request for Arbitration against Cameroon and against SOCAME accompanied by a copy of the Supply Contract. A formal designation of SOCAME, however, had not been made at that point. This notwithstanding, the Tribunal later stated that the Request for Arbitration was in conformity with, inter alia, Art. 36 of the Convention and Rule 2 of the Institution Rules.945 Actual designation of SOCAME by the Government only occurred after the Tribunal’s first session.946 This part of the case is interesting in more than one respect. There is no indication in the report that the Secretary-General refused to register the request against SOCAME for lack of its designation. Moreover, the case shows that an entity that at one stage was an instrument of the investor, and that was even regarded as capable of entering into an ICSID arbitration clause with the Government, subsequently can become an agency of the Government, which was capable of being designated to ICSID in that capacity, and arbitrate disputes with a foreign investor. In TANESCO v IPTL, the Claimant was a State-owned Tanzanian corporation and the Respondent was also a Tanzanian corporation, but owned by foreign, Malaysian, investors. The parties’ consent to submit disputes to ICSID was contained in a contract dated 8 June 1995, but the Claimant was only designated by Tanzania as an agency of the State on 24 September 1998. Shortly thereafter, on 25 November 1998, it transmitted its Request for Arbitration to the Centre. The Secretary-General registered the Request on 7 December 1998. No issue of jurisdiction arose in the proceedings.947 Similarly, in Noble Energy v Ecuador, one of the bases of consent was a Concession Contract of 15 October 2001 between the Claimant and the Ecuadorian Government, ‘represented by CONELEC’; Ecuador designated CONELEC as an ‘agency’ for purposes of Art. 25(1) on 21 August 2002. CONELEC was named as a Respondent in the Request for Arbitration. No issue arose from the fact that consent had been given before the designation.948 943 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3. By contrast, whether a designation is possible that occurred after a request for arbitration had been already filed was left open in Churchill Mining v Indonesia, Procedural Order No 2 (Request for Joinder) (5 February 2013) para 25. 944 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 58. 945 ibid 10. 946 ibid 11. The English translation of the Award indicates that SOCAME was designated as a ‘constituent subdivision,’ even though it rather constitutes an ‘agency’ in the sense of Art. 25(1) and will hence be treated as such in the discussions here. See also para 542 supra. 947 TANESCO v IPTL, Award (12 July 2001) para 13. 948 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 6, 11, 55, 63.

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f ) Modification and Withdrawal of Designation 571

The Convention is silent on whether a designation, once made, may be withdrawn or modified. Such a withdrawal or modification is, in principle, possible: a Contracting State can decide that a designated constituent subdivision or agency shall no longer have the necessary status to be a party to ICSID proceedings. To the extent, however, that a withdrawal or modification would undermine the consent given to a dispute involving a constituent subdivision or agency, the last sentence of Art. 25(1) precludes such effect. Once consent has been given by a constituent subdivision or agency, that consent may not be vitiated by the withdrawal of its capacity to be a party to an ICSID proceeding (see further paras. 1076–1077, 1469–1471 infra). This rule should apply irrespective of whether the entity’s designation as a constituent subdivision or agency preceded its consent or not. To date, there are no recorded withdrawals of designations to the Centre. G. ‘. . . and a national of another Contracting State, . . .’

1. General Significance 572

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The basic idea of the Convention, as expressed in its title, is to provide for dispute settlement between States and foreign investors. In doing so, it was to fill a particular procedural gap. Disputes between governments may be taken to the ICJ or the Permanent Court of Arbitration. Disputes between individuals or corporations can be settled either by domestic courts or through one of the established institutions for the arbitration of commercial disputes. Disputes between a State and its own nationals are settled by that State’s domestic courts. The purpose of the Convention was to deal with disputes between States and foreign nationals arising from investment relationships (History, Vol. II, pp. 78, 150, 205).949 The idea of granting a non-State party direct access to an international forum was one of the Convention’s avowed purposes. This was said to be in harmony with the growing recognition of the individual as a subject of international law and was designed to obviate the espousal of individuals’ claims by their respective governments (History, Vol. II, pp. 303, 394, 464). Some delegates had difficulties with this departure from accepted concepts and wanted to bring the investor’s home State into the picture (ibid., pp. 493, 494, 501). In response, Mr. Broches pointed to the advantages of direct dealings between States and investors for both sides (ibid., pp. 495–496, 499, 502). The reference to ‘a national of another Contracting State’ remained unchanged throughout the Convention’s drafting history (History, Vol. I, pp. 110–118).

2. The Private Character of the Investor 574

The Convention’s Preamble speaks of the role of private international investment. This would indicate that the investor must be a private individual or corporation. Therefore, States acting as investors have no access to the Centre in that capacity. The idea to give party status also to investor States was raised during the Convention’s preparation, but was not pursued (History, Vol. II, p. 401).950 At one point during the preparatory work it was suggested that international organizations should be admitted as parties to ICSID

949 Szasz (n 120) 25.

950 Amerasinghe (n 878) 241.

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proceedings if they acted as investors (ibid., pp. 307, 324, 564). Mr. Broches pointed out that there were perfectly satisfactory arbitration arrangements for international bodies (ibid., p. 307). The idea was not pursued. The situation is less clear when it comes to wholly or partly government-controlled companies (or similar entities, such as funds responsible for investing sovereign wealth). The Comment to the Preliminary Draft stated:

575

It will be noted that the term ‘national’ is not restricted to privately-owned companies, thus permitting a wholly or partially government-owned company to be a party to proceedings brought by or against a foreign State (History, Vol. II, p. 230; see already ibid., p. 170).

This statement was never contradicted in the course of the subsequent deliberations on the Convention (see also History, Vol. II, p. 580). But neither is it repeated in the Executive Directors’ Report. The criteria suggested for the admission of government-controlled entities as investors under the Convention have varied somewhat between more structural or more functional tests.951 The best guideline is probably still the one formulated by Broches in 1972:

576

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[I]n today’s world the classical distinction between private and public investment, based on the source of the capital, is no longer meaningful, if not outdated. There are many companies which combine capital from private and governmental sources and corporations all of whose shares are owned by the government, but who are practically indistinguishable from the completely privately owned enterprise both in their legal characteristics and in their activities. It would seem, therefore, that for purposes of the Convention a mixed economy company or government-owned corporation should not be disqualified as a ‘national of another Contracting State’ unless it is acting as an agent for the government or is discharging an essentially governmental function.952

Most BITs do not specify whether their definitions of ‘investor’ include State-owned companies. Exceptionally, some specify that these definitions exclude953 or include954 State entities or State-owned enterprises as investors. In CSOB v Slovakia, the Respondent contested the Tribunal’s competence, arguing that the Claimant was a State agency of the Czech Republic, rather than an independent

951 See Moshe Hirsch, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Martinus Nijhoff 1993) 64–66; Michele Barbieri, ‘Sovereign Wealth Funds as Protected Investors under BITs and the Safeguard of the National Security of Host States’ in Giorgio Sacerdoti and others (eds), General Interests of Host States in International Investment Law (CUP 2014) 130. 952 Broches (n 159) 354–355. See also Amerasinghe (n 96) 196; PF Sutherland, ‘The World Bank Convention on the Settlement of Investment Disputes’ (1979) 28 ICLQ 367, 385; Kovar (n 155) 36; MacKenzie (n 365) 230; Shihata and Parra (n 460) 315–316; Sabine Konrad, ‘Protection of Investments Owned by States’ in Bungenberg and others (n 18) 545, 550; Reza Mohtashami and Farouk El-Hosseny, ‘State-Owned Enterprises as Claimants before ICSID: Is the Broches Test on the Ebb?’ (2016) 3(2) BCDR Int’l Arb Rev 371. 953 See Germany–Panama BIT (signed 2 November 1983, entered into force 10 March 1989) Art. 1(4)(a); Panama–Switzerland BIT (signed 19 October 1983, entered into force 22 August 1985) Art. 8(b)(ii); Panama–United Kingdom BIT (signed 7 October 1983, entered into force 7 November 1985) Art. 1(d)(i). 954 The definition of ‘investor’ in the Germany–Kuwait BIT (signed 30 March 1994, entered into force 15 November 1997) Art. 1(3)(b)(iii) includes the government of Kuwait acting through the Kuwait Investment Authority and other government institutions.

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commercial entity and that it was discharging essentially governmental activities. The Tribunal rejected this contention. Relying on the Convention’s legislative history, and on the passage by Broches cited above (see para. 577 supra), it held that the concept of ‘national’ under the Convention was not limited to privately owned companies and did not depend upon whether or not the company was partially or wholly owned by the Government. The decisive test was whether the company was discharging an essentially governmental function. CSOB’s activities in executing international banking transactions under the State’s control had to be judged by their nature and not by their purpose and were hence commercial. With regard to CSOB’s activities in the context of its privatization and restructuring, these also had to be judged by their nature and were commercial, rather than governmental acts.955 In CDC v Seychelles, the Claimant was a company with a separate legal personality but was 100 percent owned by the British Government. The Respondent initially raised, but did not pursue, an objection that the Claimant was not a ‘national of another Contracting State.’ As the Claimant’s investment related to a commercial loan, it could not be said to have been fulfilling a governmental function.956 In Telenor v Hungary, the Claimant was 75 percent owned by the State of Norway. No issue was raised as to whether the Claimant qualified as a ‘national of another Contracting State.’957 In Rumeli Telekom v Kazakhstan, the Tribunal held that the Claimants were independent commercial entities and qualified as nationals of another Contracting State. The Respondent’s argument that the Republic of Turkey was the real party in interest was rejected. The extent of any control over the Claimants by the Turkish Government, and the possibility that the proceeds of any award might be remitted to the Turkish Treasury, did not deprive them of this status.958 In Flughafen Zürich v Venezuela,959 the Claimant was a mixed public/private company with the Canton of Zürich and the City of Zürich as minority shareholders. The Tribunal found that the activities of Flughafen Zürich were of a commercial nature. It held that if the State itself acted as investor it would not have access to ICSID.960 After quoting the passage from Broches cited above (para. 577 supra), the Tribunal found that a State-owned or mixed-economy company belonging to a Contracting State, which has invested in another Contracting State, is entitled to invoke the jurisdiction of the Centre, provided that it does not act as a State agent or exercise an essentially governmental function.961

584

The Tribunal concluded that Flughafen Zürich was neither a State agent nor did it exercise governmental functions, since it did not act on behalf, or for the benefit, of the Swiss Federation and because the business of airport management is not essentially governmental.962

955 956 957 958 959 960 962

CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 16–27. CDC v Seychelles, Award (17 December 2003) paras 6, 19, 34. Telenor v Hungary, Award (13 September 2006) paras 16, 18. Rumeli v Kazakhstan, Award (29 July 2008) paras 325–328. Flughafen Zürich v Venezuela, Award (18 November 2014) paras 262–286. ibid paras 271–272. 961 ibid para 275. ibid paras 283–286.

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In Beijing Urban Construction v Yemen, the Claimant was a publicly funded and wholly State-owned entity of China. The Tribunal pointed out that under Art. 25(1), ICSID is not open to State-owned companies as claimants when they are acting as agents of the State or in the exercise of governmental functions. It found that the issue was not the corporate framework of the State-owned enterprise, but whether it functions as an agent of the State. The evidence showed that the Claimant was operating under a construction contract as a commercial contractor and not as an agent of the Chinese Government. The Claimant was not discharging Chinese governmental functions.963 In Masdar v Spain, the Respondent argued that in reality the dispute was between the UAE (respectively one of its emirates, Abu Dhabi) and Spain and that, therefore, the jurisdictional requirements of Art. 26 of the ECT and of Art. 25 of the ICSID Convention were not met. In the Respondent’s view, the Claimant was a special purpose vehicle to which Abu Dhabi provided funding. The Tribunal rejected this objection. It held that the Claimant could not be equated with the State of Abu Dhabi, since it neither exercised governmental authority, nor was under the effective control of the State in its investment activities.964 In Stadtwerke München v Spain, the Respondent argued that the fact that Stadtwerke München (SWM) were controlled and owned by the City of Munich meant that the case was in fact filed by the Federal Republic of Germany and should hence be dismissed as incompatible with Art. 344 of the Treaty on the Functioning of the European Union (TFEU).965 The Tribunal rejected this argument and said:

585

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While it is common ground between the Parties that SWM is a company controlled and fully owned by the Council of the City of Munich, this does not result in assimilating SWM to the Republic of Germany. All this entails is that SWM is a State-owned entity because the sole shareholder is the State. The Tribunal observes that the ECT does not provide that companies owned by States are to be treated differently from companies owned by private individuals and entities. SWM falls squarely within the definition of ‘Investor . . . with respect to Contracting Party’ since it was organized in accordance with the law of a Contracting Party, that is, in accordance with the law of Germany. As a G.m.b.H., SWM is clearly a ‘company’ as that term is understood in Germany. Even if that were not the case, the fact that SWM is an organization is sufficient to bring it within the ECT’s definition of an ‘Investor.’966

These cases confirm that claimants may have significant State ownership interests, but still qualify as a ‘national of another Contracting State’ for the purposes of Art. 25(1). These entities have access to ICSID if they act in a commercial, nonsovereign capacity.

963 Beijing Urban Construction v Yemen, Decision on Jurisdiction (31 May 2017) paras 31–44. 964 See Masdar v Spain, Award (16 May 2018) paras 144(i), 145, 155, 169–173. 965 Art. 344 of the Treaty on the Functioning of the European Union (signed on 13 December 2007, entered into force on 1 December 2009) provides: ‘Member States undertake not to submit a dispute concerning the interpretation or the application of the Treaties to any method of settlement other than those provided for therein.’ 966 Stadtwerke München v Spain, Award (2 December 2019) paras 133, 134.

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3. Multi-Party Proceedings 589

590

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The Convention speaks of ‘a national of another Contracting State’ in the singular. But it would be wrong to conclude that only one party may be admitted to ICSID proceedings on the investor’s side.967 During the Convention’s drafting, the British expert mentioned that there might well be more than just two parties to a dispute and that he assumed that this was implicit in the draft (History, Vol. II, pp. 400, 413). There are multiple examples in ICSID’s case list of cases involving several or even multiple claimants. Where closely related claims are filed separately, there may be a possibility to consolidate proceedings or to appoint identical tribunals (see Art. 26, paras. 199–229). The argument that the use of the singular for ‘national’ in Art. 25(1) barred multipartite arbitration was raised in Klöckner v Cameroon, but was not taken up by the Tribunal and was apparently dropped subsequently by the Government.968 Subsequent cases show that having more than one party on the investor’s side in one set of proceedings is perfectly possible and not uncommon.969 The appearance of more than one party on the investor’s side may be the consequence of companies claiming jointly with their parent companies or their subsidiaries or the (partial) assignment of the investor’s rights to an additional investor. Alternatively, several claimants may simply be pursuing similar or identical claims against the same Respondent arising out of the same set of events. The cases brought by Italian bondholders against Argentina involved large numbers of claimants. Abaclat and others v Argentina970 initially involved 180,000 claimants (later reduced to 60,000). Argentina argued that mass proceedings were not covered by its consent and were inadmissible under the system of ICSID.971 The Tribunal noted that each individual Claimant was aware of, and had consented to, the ICSID arbitration.972 It held that consent to ICSID arbitration under the Argentina–Italy BIT included mass proceedings.973 The Tribunal said: [W]here the BIT covers investments, such as bonds, which are susceptible of involving in the context of the same investment a high number of investors, and where such investments require a collective relief in order to provide effective protection to such investments, it would be contrary to the purpose of the BIT and to the spirit of ICSID, to

967 See Szasz (n 120) 28; Hans van Houtte and Bridie McAsey, ‘ICSID, the BIT and Mass Claims’ (2012) 27 ICSID Rev 231; Andrea M Steingruber, ‘Consent in Large-Scale Arbitration Proceedings’ (2012) 27 ICSID Rev 237; Ridhi Kabra, ‘Has Abaclat v Argentina Left the ICSID with a “Mass”ive Problem?’ (2015) 31 Arb Int’l 425; Veijo Heiskanen, ‘And Others: Mass Claims in ICSID Arbitration’ in Kinnear and others (n 255) 613; Kei Nakajima, ‘Beyond Abaclat: Mass Claims in Investment Treaty Arbitration and Regulatory Governance for Sovereign Debt Restructuring’ (2018) 19 JWIT 208. 968 See Delaume (n 171) 36 and 37. 969 See eg Goetz v Burundi, Award (10 February 1999) paras 84–89; Funnekotter and others v Zimbabwe, Award (22 April 2009) paras 1, 3; Anderson and others v Costa Rica (AF), Award (19 May 2010) paras 2, 3, 15; Foresti and others v South Africa (AF), Award (4 August 2010) 1; von Pezold and others v Zimbabwe, Award (28 July 2015) para 9; Spence v Costa Rica (UNCITRAL), Interim Award (corrected) (30 May 2017) para 1; Valores Mundiales v Venezuela, Award (25 July 2017) para 2; Marfin and others v Cyprus, Award (26 July 2018) paras 2–20. 970 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011). 971 ibid para 297. 972 ibid para 486. 973 ibid paras 480–492.

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require in addition to the consent to ICSID arbitration in general, a supplementary express consent to the form of such arbitration.974

As for procedure, the Tribunal found that it would need to implement a mechanism allowing a simplified verification of evidentiary material.975 This was justified by the homogeneous nature of the claims. The nature of the necessary measures would not exceed the powers of the Tribunal under Art. 44 of the ICSID Convention and Arbitration Rule 19.976 It followed that the mass aspect of the claims did not constitute an impediment to their admissibility either.977 Ambiente Ufficio and others v Argentina978 initially involved 119 claimants (later reduced to ninety). The Tribunal examined questions of consent979 and due process.980 It found that multi-party arbitration was a generally accepted practice in ICSID arbitration and did not require any consent beyond the general requirements of consent to arbitration.981 It agreed with the Tribunal in Abaclat that the authors of the BIT, by including bonds into the list of protected investments, envisaged a high number of potential claimants.982 The Tribunal rejected the contention that the number of claimants would make the proceedings unmanageable or would violate fundamental principles of due process or would be unfair to the Respondent.983 Alemanni and others v Argentina initially involved 183 claimants (later reduced to seventy-four).984 The Tribunal undertook a detailed critique of Abaclat and Ambiente Ufficio. It found that the proper application of the rules on treaty interpretation in the VCLT did not compel the conclusion that the use of the singular for ‘national’ in Art. 25(1) of the ICSID Convention excluded proceedings involving several claimants.985 For the Tribunal the decisive question was the substantive unity of the dispute submitted to arbitration. The interest represented in the dispute had to be in all essential respects identical for all those involved.986 The Tribunal agreed with the decision in Ambiente Ufficio that fundamental principles of due process did not stand in the way of the proceeding.987 In Adamakopoulos and others v Cyprus,988 the Claimants were 951 natural persons and seven companies. The Respondent contested the Tribunal’s jurisdiction for ‘mass claims’ and argued that such a claim would infringe its due process rights.989 The Tribunal rejected the Respondent’s argument that the singular for ‘investor’ in the BITs providing for consent as well as in the ICSID Convention excluded multiple claimants.990 The Tribunal also rejected the argument that separate consent for mass claims

974 ibid para 490. See also ibid para 518. 975 ibid paras 506–551, 665–671. 976 ibid paras 534, 547, 551. ICSID Arbitration Rule 19 of 2006 provides: ‘The Tribunal shall make the orders required for the conduct of the proceeding.’ 977 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 551. 978 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013). 979 ibid paras 126–163. 980 ibid paras 164–172. 981 ibid para 141. 982 ibid para 144. 983 ibid para 166. 984 Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014). 985 ibid paras 270–272. 986 ibid paras 287–295. 987 ibid paras 321–325. 988 Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020). 989 ibid para 188. 990 ibid paras 197–200.

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would be required.991 In the view of the Tribunal there was substantial unity or similarity in the claims that were made and in the breaches alleged.992 It followed that the Tribunal had jurisdiction.993 After discussing Abaclat as well as Art. 44 of the Convention and Rule 19 of the Arbitration Rules, the Tribunal found that it had no mandate to devise a new procedural framework, outside the existing ICSID framework, to deal with the case.994 It looked at each stage of the arbitral process and concluded that the claims were procedurally manageable under the existing framework and hence admissible.995 The Tribunal also decided that the list of Claimants was fixed and that individual Claimants no longer had the right to withdraw from the proceedings. This followed from Art. 25(1) of the Convention, under which once consent is given no party can withdraw it unilaterally, and from Arbitration Rule 44, allowing the Respondent to object to the discontinuance of proceedings.996 The Tribunal also dismissed an objection based on the lack of consent to consolidation since there was no consolidation where, as in this case, a plurality of claimants agreed to proceed jointly in one proceeding.997

4. The Nationality of the Investor 598

Art. 25(2) provides a detailed definition of ‘national of another Contracting State’ dealing with the nationality of natural persons and of juridical persons separately. Questions relating to the investor’s nationality are therefore discussed in detail below at paras. 1111–1445.

5. Participation of the Investor’s State of Nationality in the Convention 599

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Much of what has been said about the host State’s participation in the Convention (paras. 497–522 supra) applies equally to the investor’s State of nationality. The rules on ratification, acceptance, or approval of the Convention as well as on renunciation are the same (see paras. 497–498 supra). The requirement that the investor be a national of a Contracting State was contained in all drafts leading to the Convention (History, Vol. I, pp. 110–118). A suggestion to grant party status to investors whose home States are not Parties to the Convention was put forward, but not accepted (History, Vol. II, pp. 82, 255, 260, 406). Mr. Broches pointed out that there were essential reciprocal obligations between the host State and the investor’s home State under the Convention. In particular, the investor’s State of nationality would renounce its normal right to diplomatic protection and would assume the obligation to enforce awards against its national (ibid., pp. 22, 82, 150, 204, 406, 495, 564, 579). Since the investor’s principal assets were likely to be under his national State’s jurisdiction, the enforcement of awards against the investor might be frustrated if the home State was not a Contracting State.998 A suggestion to exclude juridical persons that do not have the nationality of any Contracting State was adopted by a large majority (ibid., p. 868).

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ibid para 201. 992 ibid paras 209–219. ibid para 220. 994 ibid paras 222–246. ibid paras 247–259. 996 ibid paras 260–261. ibid paras 267–270. See also Broches (n 159) 356; Hirsch (n 951) 73–74; Gaillard (n 122) 140; Kovar (n 155) 39.

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Once the investor’s nationality has been established, it is simple to determine whether its State of nationality is a Contracting State by referring to a list of Contracting States, which is regularly updated by the ICSID Secretariat.999 Complications may arise with regard to the exact territorial application of the Convention. Art. 70 provides that, subject to an explicit exclusion, the Convention shall apply to all territories for whose international relations a Contracting State is responsible. Therefore, corporations having their seat or registration in such territories will be considered nationals of Contracting States1000 (see also Art. 70, paras. 10, 11).

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6. Identification of the Investor’s State of Nationality The Convention provides that to become a party to ICSID proceedings, the investor must be a national of another Contracting State. The exact dates at which this nationality must exist are specified in Art. 25(2) (see paras. 1161–1170, 1242–1261 infra). But the Convention is silent on whether this other Contracting State must be identified. Even if it is uncontested that the investor is a national of another Contracting State, there may be doubt which of several possible nationalities the investor has. In situations of this kind, is it necessary to identify the ‘other Contracting State’? Must the investor’s nationality be specified either when consent to ICSID’s jurisdiction is given or when proceedings are instituted? It would appear that the identification of the ‘other Contracting State’ at the time of consent is a matter of prudence. At the time of the institution of proceedings it becomes a necessity. It is not advisable to ignore the question of the investor’s nationality at the time of the consent agreement between the parties. Nor is it advisable simply to agree that ‘the investor is a national of another Contracting State.’ Similarly, the parties should not just agree that ‘because of foreign control the investor shall be treated as a national of another Contracting State.’ Agreements of this kind are not invalid but are prone to lead to difficulties (see paras. 1303–1318 infra). The assumption or even agreement that the investor is a national of another Contracting State may be challenged later and this may cause problems if the nationality is not specified.1001 Consent to the jurisdiction of the Centre has some effects for the investor’s State of nationality even before the institution of proceedings: the suspension of the right to diplomatic protection under Art. 27(1) operates from the moment consent is perfected. But the specification of the investor’s nationality at the time of consent is not necessary for the operation of Art. 27(1). Before a Contracting State can exercise diplomatic protection, it must claim the investor as its national. This, in turn, would lead to the automatic operation of the prohibition of diplomatic protection under Art. 27(1)1002 (see also Art. 27, paras. 39–46). The 1993 Model Clauses suggest a clear identification of the other Contracting State:

999 ICSID, ‘List of Contracting States and other Signatories of the Convention’ ICSID/3 (June 2020). 1000 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 54. 1001 Amerasinghe, ‘Submissions’ (n 26) 227; Aron Broches, ‘Arbitration Clauses and Institutional Arbitration, ICSID: A Special Case’ in Associazione Italiana per l’Arbitrato (ed), Commercial Arbitration: Essays in Memoriam Eugenio Minoli (UTET 1974) 69, 76 ff; Gaillard (n 122) 140. 1002 See also Szasz (n 120) 35.

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schreuer’s commentary on the icsid convention Clause 6 It is hereby stipulated by the parties that the Investor is a national of name of another Contracting State.1003

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At the time of the institution of proceedings, the identification of the ‘other Contracting State’ becomes inevitable. Institution Rule 2(1)(d) provides that the request must indicate the investor’s nationality on the day of consent and, if the party is a natural person, also his nationality on the date of the request. A mere statement that ‘the investor is a national of a Contracting State’ will not suffice at this stage. Failure to divulge the investor’s nationality at the relevant times may lead to a refusal by the Secretary-General to register the request in accordance with Arts. 28(3) and 36(3). There are good reasons for this formal requirement. The Convention attaches certain consequences to the nationality of an investor once he or she becomes a party to ICSID proceedings. There are exclusionary clauses that are linked to the investor’s nationality: under Arts. 38, 39, and 52(3) nationals of the same State as the investor may be barred from appointments as arbitrators or members of an ad hoc committee (see also paras. 1439–1445 infra). The situation is somewhat more complicated where there is an agreement between the parties under Art. 25(2)(b) to treat a host State company as a national of another Contracting State because of foreign control. Institution Rule 2(1)(d) does not require the identification of the nationality that was agreed upon (see para. 1303 infra). ICSID tribunals have confirmed that there is no need to identify the controlling nationality in the arbitration agreement (see paras. 1307–1318 infra). The question may be more difficult in the context of investment treaty arbitration, as noted in Camuzzi v Argentina I and Sempra v Argentina (see paras. 1365–1367 infra). It is possible to combine the interests of two or more entities to establish foreign control. However, if they do not all have the nationality of the same State party to a BIT, it is unclear whether a claimant having the nationality of the host State qualifies for protection on grounds that it is controlled by one or more nationals of the other State party to the BIT. The situation is even more complex if control is combined among shareholders some of whom are nationals of a party of a BIT, while others are not.1004

7. Contingent Submission 611

The critical date for the status of a Contracting State is the time of the institution of proceedings. This applies to the investor’s State of nationality in the same way as for the host State (see paras. 503–509 supra). This date should be distinguished clearly from the date at which the investor must possess the nationality of the States in question under Art. 25(2) (see paras. 1161–1170, 1242–1261, 1409–1438 infra). It is entirely possible for an investor to give valid consent to the jurisdiction of the Centre, even

1003 (1997) 4 ICSID Reports 362. See also Clause V of the 1968 Model Clauses, (1968) 7 ILM 1159, 1166; Clause VII of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 202. 1004 See Vivendi v Argentina, Decision on Annulment (3 July 2002) para 48.

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though his or her home State is not yet a Contracting State, provided that this State subsequently ratifies the Convention before the institution of proceedings.1005 In Holiday Inns v Morocco (see also para. 504 supra), the parties had signed a Basic Agreement on 5 December 1966 containing an ICSID arbitration clause. Switzerland, the Claimant’s State of nationality, became a Contracting State to the Convention only on 14 June 1968. Before the Tribunal, Morocco contended that consent to the jurisdiction of the Centre could be given only by the national of a State that had previously ratified the Convention. The Claimants contended that the critical date for the status of the ‘other Contracting State’ was the date of filing the request for arbitration. This argument was strengthened by the fact that, when contracting the ICSID arbitration clause with the investor, Morocco was fully aware of the fact that Switzerland had not yet ratified the Convention.1006 The Tribunal rejected the Moroccan objection to its jurisdiction and said:

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The Tribunal is of the opinion that the Convention allows parties to subordinate the entry into force of an arbitration clause to the subsequent fulfilment of certain conditions, such as the adherence of the States concerned to the Convention, or the incorporation of the company envisaged by the agreement. On this assumption, it is the date when the conditions are definitely satisfied, as regards one of the Parties involved, which constitutes in the sense of the Convention the date of consent by that Party . . . the only reasonable interpretation of the Basic Agreement is to hold that the Parties when signing the Agreement envisaged that all necessary conditions for jurisdiction of the Centre would be fulfilled and their consent would at that time become fully effective.1007

Therefore, if the investor’s State of nationality is not a Contracting State, it is still possible to consent to the Centre’s jurisdiction in anticipation of the Convention’s future ratification. This may be done either through an investment agreement between the host State and the investor or in a BIT (see for more detail paras. 510–512 supra).

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8. The Additional Facility One of the purposes of the Additional Facility was to provide for dispute settlement where either the host State or the home State of the investor’s nationality is not a Contracting State (see paras. 12–15 supra). If the Additional Facility is to be used because the investor’s home State is not a Contracting State, the host State must be a Contracting State (see further paras. 513–518 supra). The same considerations apply mutatis mutandis to the reverse situation where the host State is not a Contracting State, but the investor’s home State is. Potential host countries that are Contracting States may provide in their national legislation for dispute settlement through ICSID conciliation or arbitration with nationals of other Contracting States (see paras. 780–824 infra). The relevant national

1005 Broches (n 1001) 75. In Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 140, the Tribunal expressly noted that, by the time of the institution of proceedings, the State of the Claimant’s nationality was a party to the ICSID Convention. See also paras 503–512 supra. 1006 Lalive (n 53) 142–144. 1007 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 146).

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legislation may also provide for settlement under the Additional Facility if and as long as the investor’s State of nationality is not yet another Contracting State (see para. 797 infra).1008 Similarly, some treaties provide for a submission to the Additional Facility if, and as long as, not all parties to the treaty are Contracting States of the ICSID Convention (see paras. 845–848, 864, 865, 869, 871–873 infra). The non-Contracting State may be the host State, but it may also be the State of the investor’s nationality (see para. 517 supra). H. ‘. . . which the parties to the dispute . . .’

1. Identity of Consenting and Disputing Parties: Principle and Exceptions 616

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The text of the Convention requires that the parties to the dispute must have given consent to the Centre’s jurisdiction. Parties may do so either in person (in case of a natural person), through representative organs (in case of corporate persons, the host State, as well as constituent subdivision or agencies), or through entities that act as representatives for a party with power of attorney and give consent on a party’s behalf. In principle, however, consenting and disputing parties must be identical.1009 This would indeed be the normal case. It cannot be assumed lightly that consent covers someone other than the party named in an instrument containing consent or that consent given may be transferred subsequently to a third party. The identification of who the disputing parties to an ICSID proceeding are, is determined on the basis of who is named as ‘party,’ on the claimant and respondent sides, in the Request for Arbitration pursuant to Art. 36 of the Convention (see Art. 36, paras. 23–28). Only those named entities qualify as disputing parties, as aptly stated in Tulip v Turkey: The relevant inquiry for the Tribunal is defined as identifying the claimant or claimants from the constituting Request made under Art 36 of the ICSID Convention. As a matter of substance, it is those principal parties alone who are the claimants in proceedings instituted under the BIT, and none of Art 36 or any other provision of the ICSID Convention enable a third person not named as a claimant to prosecute claims as agent for a non-party principal.1010

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Although, in principle, it is the named disputing parties who must have given consent to the jurisdiction of the Centre, situations do arise where, due to special circumstances, parties appear before ICSID, either as respondents or claimants, who are different from those who had originally expressed consent. On the host State’s side, situations of State succession may lead to exceptions to the rule that consenting and disputing parties must 1008 See eg Madagascar–Investment Code, (1989) Art. 33. 1009 At times, the involvement of such organs and representatives may raise questions as to whether an entity that consented acted as a representative (or agent) for another and was empowered to bind the principal and subject it to ICSID’s jurisdiction. Moreover, there is a distinction between the legal entity that is the party to an ICSID proceeding, and the question of who represents this entity during proceedings. These issues do not relate to the need for identity of consenting and disputing parties, but may influence the determination of who is the right party to an ICSID proceeding, and who validly represents it during an arbitration or conciliation proceeding. Cf East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 179–183; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 236–241. 1010 Tulip v Turkey, Award (10 March 2014) para 228.

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be identical (see paras. 622–634 infra). Similarly, questions of succession may come into play if a host State’s constituent subdivision or agency in the sense of Art. 25(1) consented to the Centre’s jurisdiction, but disappears because of a host State-internal reorganization (see paras. 635–642 infra). On the investor’s side, situations where the consenting and disputing party may diverge can also arise. They are particularly prevalent when corporations, which frequently work through complicated multi-level corporate structures, involving parent companies, subsidiaries, or affiliates, and often spanning multiple jurisdictions, are involved as investors. These structures may raise the question whether consent given in the name of one entity in that structure may extend to another entity which has not in person consented to ICSID jurisdiction, allowing that entity to become party to an ICSID proceeding (see paras. 643–658 infra). The identity between consenting and disputing parties is also involved in respect of the closely related issue whether entities who have expressed consent to ICSID’s jurisdiction and are parties to an ICSID proceeding are limited to bringing claims on their own behalf, or can also bring derivative or representative claims on behalf of other entities that are not party to the ICSID proceeding in question (see paras. 659–678 infra). Rights and obligations arising from an investment relationship may also subsequently be transferred to third parties, either by means of singular or universal succession. In these situations, it will also have to be decided whether the predecessor or the successor is the proper party to the proceedings in the sense of Art. 25(1) (see paras. 679–744 infra). Finally, the insolvency of an investor can have an impact on who the proper party is to an ICSID proceeding (see paras. 745–747 infra). A rather special case arises where the investor’s home State has provided investment insurance. Once an insurance claim has been settled, the investor may no longer be an injured party and may hence have no claim on the merits against the host State. In this situation, the question arises whether the insurer, having indemnified the investor, may be subrogated in the investor’s position also in ICSID proceedings or whether special arrangements will have to be made for the investor to pursue the claim before the Centre (see paras. 748–758 infra).

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2. The Identification of the Party on the Host State’s Side a) State Succession State succession covers a variety of phenomena related to ‘the replacement of one State by another in the responsibility for the international relations of territory.’1011 It encompasses the creation of a new State as a consequence of separation from an existing State (secession), the independence of a dependent territory, the complete break-up of an existing State into several new States (dissolution), the integration of one State into another, the merger of two or more States into a new State, and the cession of territory between existing States. By contrast, changes to a State’s internal system of government (regime change), occupation of territory, and changes that do not affect a State’s legal

1011 See the definition used in Art. 2(1)(b) of the Vienna Convention on Succession of States in Respect of Treaties (adopted 23 August 1978, entered into force 6 November 1996) 1946 UNTS 3 (1978 Vienna Convention).

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personality, including changes to the name of a State, have to be distinguished from State succession.1012 Situations of State succession give rise to multiple issues under international law generally,1013 as well as international investment law more specifically.1014 This includes the impact of State succession on a State’s status as a Contracting State (see para. 499 supra), the territorial scope of application of the host State’s consent to ICSID jurisdiction, and the determination of an investor’s nationality (see para. 1145 infra). What is relevant for the present context is the question whether a successor State, who itself is a Contracting State to the ICSID Convention, is subject to the jurisdiction of the Centre because of consent given by its predecessor State, either under a bilateral or multilateral investment treaty or in a contract concluded with a foreign investor. Relatedly, cases of State succession raise questions as to what extent the predecessor State remains subject to ICSID’s jurisdiction in respect of specific disputes. The ICSID Convention itself does not answer these questions in substance; recourse must instead be had to general international law. Where, according to these rules, the State continues its predecessor’s treaty relationships, any consent to the Centre’s jurisdiction given by the predecessor State would become automatically applicable to the successor State. It would be difficult to consider that succession and continuity have taken place with respect to substantive obligations, but not with regard to the submission to the jurisdiction of the Centre. The ICSID Convention, however, does fix the time when a request for the initiation of ICSID proceedings is registered as the relevant point in time beyond which changes to the identity of the disputing and consenting parties, including in respect of the impact of State succession on the host State’s side, will not affect ICSID’s jurisdiction (see paras. 44–54 supra).1015 It also allows that consent to the Centre’s jurisdiction be given before the host State becomes a Contracting State (see paras. 502–512 supra). Consequently, the ICSID Convention does not prevent consent to the Centre’s jurisdiction from being passed on to a successor State regardless of when that State becomes a Contracting State to the Convention and regardless of whether the predecessor State ever was a Contracting State.1016 The legal framework under general international law relating to State succession is unsettled and highly controversial, with one approach favoring, as a matter of international law and policy, continuity of treaty obligations and one departing from the principle that new States should start from a clean slate; in addition, State practice in respect of State succession is characterized by what has been described as 1012 See Tams (n 824) 316–320. 1013 See eg Robert Jennings and Arthur Watts (eds), Oppenheim’s International Law vol I (9th edn, OUP 2008) 208–240 and the literature cited there. See also Tai-Heng Cheng, State Succession and Commercial Obligations (Transnational Pub 2006). 1014 For an overview, see Tams (n 824). An extensive account is given by Dumberry, A Guide (n 824). 1015 Cf Mytilineos v State Union of Serbia & Montenegro and Serbia (UNCITRAL), Partial Award on Jurisdiction (8 September 2006) paras 158–162 (finding that the rule that, once established, jurisdiction cannot be defeated by subsequent events, which ICSID tribunals established in the context of subsequent changes to the investor’s nationality also applies with respect to changes in the personality of respondents in investment cases). See also Patrick Dumberry, ‘Terra Incognita: What Happens When a Problem of State Succession Occurs During Arbitration Proceedings’ (2018) 17 LPICT 350, 353–360 (who points to certain problems that may arise when both the predecessor and the successor State refuse to participate in the proceedings). 1016 See the obiter in Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.27.

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situation-specific ‘diplomatic bricolage.’1017 One major attempt at codification, the 1978 Vienna Convention on Succession of States in Respect of Treaties, was largely unsuccessful, and only in part reflects customary international law.1018 Much will therefore depend on the circumstances of the succession in question. Although deciding which State or States are bound by an investment instrument and the consent to ICSID arbitration contained therein is a case-by-case and fact-specific exercise, certain general guidelines exist. In order to structure the analysis, it is useful to distinguish between the question of whether the predecessor State’s consent to ICSID jurisdiction was contained in an international treaty or in a contract concluded with a foreign investor. This distinction takes account of the fact that, for questions of consent expressed in an international treaty, the 1978 Vienna Convention may apply, whereas it is silent on succession concerning State contracts. One must also differentiate according to the type of State succession involved, as customary international law rules have developed in respect of some (notably cession of territory and incorporation), but not other types of successions (notably secession and dissolution). In case of secession, investment treaties, whether bilateral or multilateral, remain in force in relation to the predecessor State and its remaining territory; its international legal personality continues without rupture.1019 By contrast, in case of dissolution, no predecessor State remains that could be bound.1020 What is less clear is under what circumstances the seceding State is bound by the predecessor’s investment treaties. Art. 34 of the 1978 Vienna Convention establishes a presumption for the automatic continuity of treaty obligations in relation to the successor State; it does so both for cases of secession and dissolution. However, this presumption is generally considered as not reflecting customary international law.1021 Instead, customary international law, as reflected in State practice, is arguably closer to the rules contained in the 1978 Vienna Convention for newly independent States that were previously a dependent territory of another State. These States are considered to start with a clean slate and are not automatically bound by the predecessor’s treaties, but have the possibility of opting

1017 See Tams (n 824) 317–318 (quoting Martti Koskenniemi, ‘Report of the Director of Studies of the English-Speaking Section of the Centre’ in Pierre Michel Eisemann and Martti Koskenniemi (eds), State Succession: Codification Tested against the Facts (Brill 2000) 65, 132); Patrick Dumberry, ‘State Succession to Bilateral Treaties: A Few Observations on the Incoherent and Unjustificable Solution Adopted for Secession and Dissolution of States under the 1978 Vienna Convention’ (2015) 28 Leiden JIL 13. 1018 Tams (n 824) 325–327. 1019 See eg Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 16. Cf also Mytilineos v State Union of Serbia & Montenegro and Serbia (UNCITRAL), Partial Award on Jurisdiction (8 September 2006) para 158. This principle is also reflected in Art. 35 of the 1978 Vienna Convention (n 1011). 1020 Note, however, that in some cases of dissolution, one State may be treated as continuing the legal personality of the predecessor State. This is the case notably with the Russian Federation, which is universally treated as continuing the legal personality of the Soviet Union. See Patrick Dumberry, ‘An Uncharted Question of State Succession: Are New States Automatically Bound by the BITs Concluded by Predecessor States Before Independence?’ (2015) 6 JIDS 74, 89–93; Patrick Dumberry, ‘State Succession to BITs: Analysis of Case Law in the Context of Dissolution and Secession’ (2018) 34 Arb Int’l 445, 456–459. The Russian Federation, however, is not a Contracting State of the ICSID Convention. 1021 Tams (n 824) 334; Dumberry (n 1017); Dumberry, ‘An Uncharted Question’ (n 1020); Dumberry, ‘State Succession’ (n 824) 6–11.

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unilaterally into multilateral treaties in force in relation to their territory and agreeing, expressly or tacitly, to continue bilateral treaties with the respective other treaty partner.1022 The impact of secession and dissolution on multilateral investment treaties containing consent to ICSID jurisdiction has so far played no role in practice.1023 In respect of BITs, and the consent they may contain to the jurisdiction of the Centre, the practice of States points to several avenues for continuation of treaties entered into by the predecessor State. In several cases, BITs have been continued based on agreement between the successor State and the other treaty partners. This has been, for example, the approach adopted following the dissolution of Czechoslovakia, when both the Czech and Slovak Republics reached agreement with their respective treaty partners, that they would succeed to the BITs concluded before by Czechoslovakia and also be bound by the consent to the Centre given in those treaties.1024 ICSID tribunals established on the basis of these BITs have consistently accepted jurisdiction despite the resulting divergence between consenting and disputing parties.1025 Similarly, when Montenegro seceded from the Federal Republic of Yugoslavia, some of the BITs were continued by agreement with the respective contracting parties, and have been accepted as a source of the successor State’s consent.1026 But there are also other ways than express agreement in order for a successor State to be bound by the predecessor’s BITs and the consent to the jurisdiction of the Centre contained therein. Arbitral tribunals, for example, have drawn inferences from unilateral statements made by the successor State to the effect that it wished to succeed to the predecessor’s BITs, sometimes in combination with similar statements of the predecessor’s treaty partner, and from a variety of other unilateral statements and practices, including domestic devolution agreements, as well as the State’s conduct during arbitration hearings, in order to conclude that the successor State after secession or dissolution was bound by the predecessor State’s BIT and the consent to arbitrate contained therein.1027 Territorial nexus may also play an important role in transferring a predecessor’s consent to arbitrate to the successor State. It may even be possible to make a case that a successor State remains bound by consent given in treaties by the predecessor State if those treaties specifically extended to the new State’s territory under a territorial application clause.1028 Similarly, prior designation of what later became a new State as a constituent subdivision in accordance with Art. 25(1) (see paras. 543–544 supra) would further strengthen this argument. Finally, to the extent foreign investors can be considered as beneficiaries of the obligations contained in a BIT, including in respect of 1022 See 1978 Vienna Convention (n 1011) Arts. 2(1)(f ), 16–30. Conversely, an investment made before succession in the territory of what later became the successor State will regularly be recognized as an investment made in that State under the successor State’s treaty commitments. See OKO v Estonia, Award (19 November 2007) paras 182–183, 187. 1023 For discussion, see Dumberry, ‘State Succession’ (n 824) 6–13. 1024 Tams (n 824) 330–331. 1025 See Dumberry, ‘State Succession to BITs’ (n 1020) 449–456. 1026 Tams (n 824) 329–330; Dumberry, ‘State Succession to BITs’ (n 1020) 459–461. 1027 See Tams (n 824) 332–334. For critical discussion, see further Dumberry, ‘State Succession to BITs’ (n 1020). 1028 Jennings and Watts (n 1013) 229.

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investor–State dispute settlement, arguments relating to the protection of vested rights, or even analogies to the treatment of human rights treaties in situations of State succession, may play a role in future discussions.1029 Any of these arguments may lead to a conclusion that the successor State is bound by a BIT concluded by the predecessor State, including in respect of the offer under that treaty to settle disputes before the Centre with foreign investors.1030 As stated before, however, general international law so far yields no clear-cut answers in respect of State succession to investment treaties in cases of secession and dissolution. It would therefore always be preferable for States to address questions concerning the application of BITs concluded by the predecessor State expressly. Similarly, foreign investors covered by a BIT with the predecessor State could seek clarification from the successor State by seeking a contractual agreement to ICSID jurisdiction post-secession or dissolution. The situation is somewhat clearer as concerns internationally lawful cessions of territory between existing States.1031 In this respect, Art. 15 of the 1978 Vienna Convention establishes the principle of ‘moving treaty frontiers’: the predecessor’s treaty obligations, including its BITs, stop applying to the ceded territory; the successor’s treaty obligations, including its BITs, start applying. This rule is generally considered to reflect customary international law.1032 Similarly, in cases of incorporation of a State into another State, in principle, the successor’s treaty obligations start applying to the incorporated territory; this too reflects well-established State practice.1033 In all of these cases, in principle, the successor State’s BITs, and any submission to ICSID jurisdiction, apply ipso facto to the ceded or incorporated territory. This notwithstanding, difficulties may arise if the successor State’s BIT obligations and the provisions for dispute settlement are less favorable than those contained in the predecessor State’s BITs. In order to reduce any uncertainties, these questions, again, are best addressed in the instruments that bring about the cession of territory or the incorporation 1029 See Tams (n 824) 335–336. 1030 Note, in this context, WWM and Carrol v Kazakhstan (UNCITRAL), Award (19 October 2015) (not public), where the Tribunal is reported to have found Kazakhstan to be bound by the consent to arbitrate given in the BIT concluded between Canada and the Soviet Union. By contrast, the Tribunal in Gold Pool v Kazakhstan (UNCITRAL), Award (30 July 2020) (not public) is reported to have declined to consider the Respondent bound to the same treaty as a successor of the Soviet Union. See Vladislav Djanic, ‘Kazakhstan Fends Off Claims by Canadian Gold Miner, as Tribunal Finds It Is Not a Successor to USSR BIT’ (IAReporter, 4 August 2020). For a further case addressing succession to a BIT, Deripaska v Montenegro (UNCITRAL), Award (15 October 2019) (not public), see Vladislav Djanic, ‘Revealed: Reasons Surface for Tribunal’s Decision that Montenegro Was Not Bound by the Russia–Yugoslavia BIT’ (IAReporter, 3 July 2020). 1031 For purposes of State succession, internationally lawful cessions of territory have to be distinguished from unlawful annexations and situations of occupation. This notwithstanding, arbitral tribunals may find ways to assume jurisdiction in such situations too. See Patrick Dumberry, ‘Requiem for Crimea: Why Tribunals Should Have Declined Jurisdiction over the Claims of Ukrainian Investors against Russian [sic] under the Ukraine–Russia BIT’ (2018) 9 JIDS 506. 1032 Tams (n 824) 337; Dumberry, A Guide (n 824). See also Sanum Investments v Laos (UNCITRAL), Award on Jurisdiction (13 December 2013) paras 212–300. For further discussion, see also Odysseas G Repousis, ‘On Territoriality and International Investment Law: Applying China’s Investment Treaties to Hong Kong and Macau’ (2015) 37 Mich JIL 113; Patrick Dumberry, ‘State Succession to BITs in the Context of the Transfer of Territory of Macao to China: Lessons Learned from the Sanum Saga’ (2018) 35 J Int’l Arb 239. 1033 Tams (n 824) 338; Dumberry, A Guide (n 824).

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of one State into another and through exchange with the respective other contracting parties to the treaties in question. As regards the question whether consent expressed by the predecessor’s State in a State contract with a foreign investor also binds the successor State, general international law equally eschews clear-cut answers.1034 To be sure, the 1978 Vienna Convention does not apply to this question.1035 This notwithstanding, certain parallels can be drawn to the rules on State succession in respect of treaties. In addition, depending on the circumstances, one may need to consider whether in case of the termination of an agreement which contains the consent to ICSID, the consent clause may be severable from the agreement and hence survive succession (see paras. 1090–1095 infra). This does not protect the investor entirely against the risk of losing access to ICSID though, as continuing validity of consent cannot replace the requirement that the successor State be a Contracting State at the time proceedings are instituted. In a case of secession, the predecessor State will likely continue to be bound by a contract concluded with a foreign investor, including in respect of the consent given to arbitration.1036 The successor State, by contrast, will in principle not be bound by that contract. Exceptions may exist, however, in case of a territorial nexus between the State contract and the successor State, in case an organ of a territorial unit that later becomes independent has signed the contract in question, or if unjust enrichment of the successor State would be the consequence of not considering the successor State to be bound by the contract and the offer to the Centre’s jurisdiction it contains.1037 Similar consequences will follow in the case of dissolution of a State. Here, however, it would seem clear that at least one of the successor States will have to succeed to the contract, likely based on territorial nexus, in order to avoid unjust enrichment.1038 In cases of transfers of territory, the contract and its consent to the Centre’s jurisdiction will follow the moving frontier rule.1039 Finally, in cases of incorporation or merger of States, the successor State will be bound by the contract and its consent to the Centre’s jurisdiction.1040

b) Constituent Subdivisions or Agencies 635

The Convention opens the possibility that a constituent subdivision or agency of the host State rather than the host State itself becomes a party to ICSID proceedings (see paras. 523–571 supra). In this context as well, questions may arise whether the consent to the jurisdiction of the Centre given by the constituent subdivision or agency can be extended to other entities, either in case the host State interferes with the investment through acts of public authority, such as legislation, or internally reorganizes the constituent subdivision or agency, with or without an immediate successor.

1034 See Patrick Dumberry, ‘State Succession to State Contracts: A New Framework of Analysis for an Unexplored Question’ (2018) 19 JWIT 595; Dumberry, A Guide (n 824) pt D. 1035 See 1978 Vienna Convention (n 1011) Art. 1. 1036 Cf ImageSat International v Serbia (ICC), Partial Award (7 May 2008) (discussed in Dumberry, ‘State Succession to State Contracts’ (n 1034) 603–604). 1037 See Dumberry, ibid, 616–626. 1038 ibid 610–612. 1039 ibid 605–609. 1040 ibid 612–616.

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During the Convention’s drafting, the question was raised whether Contracting States could be made parties to ICSID proceedings in order to address the concern that a constituent subdivision or agency that had given consent might disclaim its responsibility, for example, by invoking force majeure, in case the host State interferes with the investment through acts of public authority. Mr. Broches denied that an action could be brought directly against the host State under these circumstances absent its own consent to the Centre’s jurisdiction (History, Vol. II, pp. 410, 411, 564, 704, 858). Therefore, consent to the Centre’s jurisdiction given by a constituent subdivision or agency cannot simply be extended to the host State.1041 It would seem wise on the part of the investor to secure separate consent to ICSID’s jurisdiction from the host State to cover the contingency of State interference in the investment relationship and to guard against the argument of force majeure by the constituent subdivision or agency. If this is not possible, the subdivision or agency may be persuaded to assume responsibility for acts of the host State that may damage the investor. The situation may be different if the host State does not interfere with the investment activity, but reorganizes the constituent subdivision or agency internally, either by shifting responsibilities from one entity to another, or by abolishing the original entity altogether, for example by privatizing it, or by transforming it into another entity. Indeed, the idea that the host State should succeed to the jurisdictional obligations of a designated agency if the latter is abolished was brought up during the Convention’s drafting, but was not pursued further (History, Vol. II, p. 867) (see also paras. 1469–1471 supra). One way of dealing with the matter may be to resolve this question by recourse to the domestic law of the host State and its provisions addressing succession in relation to a constituent subdivision or agency. Although questions of the Centre’s jurisdiction are not necessarily governed by the domestic law that may otherwise be applicable by virtue of Art. 42(1) of the Convention (see Art. 42, paras. 4–15), and the interpretation and application of the consent agreement remains subject to the Convention and to international law in general,1042 domestic law may be taken into account.1043 It seems that on this basis the Tribunal in Repsol v Petroecuador considered Petroecuador to be the successor to Corporacíon Estatal Petrolera Ecuatoriana, the entity Ecuador had designated in 1988 as an agency to the Centre.1044 Under international law, four arguments speak in favor of the assumption of jurisdictional rights and responsibilities by the host State, if it abolishes a subdivision or agency or otherwise eliminates their procedural capacity under the ICSID Convention.1045 First, the subdivision or agency has acted, from the perspective of international law, on behalf of the host State. Designation is a matter of administrative and procedural

1041 See Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 3.01–3.02; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 242–256. See also paras 530–533 supra. See Amerasinghe (n 878) 238; Institut de Droit International, ‘Arbitration between States, State Enterprises or State Entities, and Foreign Enterprises’ (12 September 1989) (1990) 63(2) Ann IDI 324, 330, Art. 7. 1042 See Amerasinghe (n 878) 239. 1043 See East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 165–168. 1044 Repsol v Petroecuador, Award (20 February 2004) para 4. 1045 For a similar line of argument, see Amerasinghe (n 878) 239–240.

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convenience, but is not designed to free the host State from its responsibilities. Second, the host State itself has brought about the change that has deprived the entity of its procedural capacity to act as a party to ICSID proceedings to the possible detriment of the investor. Third, the last sentence of Art. 25(1) prohibits the unilateral withdrawal of consent (see paras. 1057–1110 infra). The State should not be able to achieve the same effect through indirect means, namely by dissolving the entity that has given consent without providing for a successor (see also para. 571 supra; paras. 1076–1077 infra). Finally, parallels between the abolition of a subdivision or agency could be drawn to the situation where a State is incorporated into the territory of another State; here the successor State is considered bound by a contractual consent to arbitrate given by the predecessor State (see paras. 633–634 supra). This situation may be seen as comparable because in both cases one (formerly separate) legal entity is incorporated into another (successor) entity. To avoid uncertainties about whether the host State or a successor subdivision or agency are bound by the consent of the original subdivision or agency (and whether it can be considered as a designated agency in the sense of Art. 25(1)), it seems wise to address the problem at the time of drafting the ICSID clause. The Contracting State may be induced to undertake to designate any future subdivision or agency that may replace the old one in its capacity as party to the investment agreement.1046 At the same time, provision must be made to transfer consent to the Centre’s jurisdiction to the successor constituent subdivision or agency.1047 Better still would be an undertaking that the host State would substitute itself for the entity in case the latter is abolished or otherwise procedurally incapacitated. Ideally, the host State should be nominated in the consent agreement from the outset to avoid any problems of succession. In Klöckner v Cameroon (see paras. 567–568 supra), an entity that was named as coRespondent had changed its legal character during the course of the investment. But the situation was entirely different from the one discussed here. The entity in question, SOCAME, had started out as a joint venture company with the majority of its shares in the hands of the investor. Later it came under the majority control of the Government and was named as a co-respondent in the request for arbitration. Eventually, the respondent host State agreed to designate it as a government agency in the sense of Art. 25(1) during the course of the proceedings.1048

3. The Identification of the Party on the Investor’s Side a) Scope of Consent Ratione Personae 643

On the investor’s side, questions relating to the possible divergence between disputing and consenting parties arise frequently when complex corporate structures consisting of parent companies, subsidiaries, or affiliates in different jurisdictions are involved. In these structures, questions may arise as to whether entities that are not expressly named in an agreement containing the consent to the Centre’s jurisdiction can be parties to ICSID proceedings. This question arises predominantly in contract-based situations,

1046 Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 109–110; Delaume (n 120) 180. 1047 See Clause VII of the 1968 Model Clauses, (1968) 7 ILM 1159, 1167–1168. 1048 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 10, 11, 58.

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for example, when agreements on the investor’s side also mention other companies, such as ‘subsidiaries,’ or when such agreements are concluded with entities other than the true investor in the economic sense. In these and similar situations, ICSID tribunals or conciliation commissions may be confronted with the problem of whether to restrict standing to the parties specifically named in the consent agreement or to extend the consent given to ICSID jurisdiction to companies that control or are associated with the named parties to the contract.1049 By contrast, in cases based on a host State’s unilateral submission to ICSID jurisdiction in a domestic law or investment treaty, the issue of extending party status ratione personae will only rarely arise. In Holiday Inns v Morocco, the two American investors, Holiday Inns Inc. and Occidental Petroleum Corporation (O.P.C.), had decided to undertake a joint investment through two separate, wholly owned subsidiaries that were to be created for that purpose. When the Basic Agreement was signed with Morocco in December 1966, one of the subsidiaries was in the process of being established in Switzerland, and the other one did not exist at all. The Government was fully aware of this situation. Nevertheless, the formal signatories to the Basic Agreement, which contained the ICSID clause, were the subsidiaries, named as Holiday Inns S.A., Glarus, Switzerland (H.I. Glarus), and ‘a subsidiary of O.P.C.’1050 The creation of H.I. Glarus was eventually completed in February 1967.1051 A Request for Arbitration was brought to ICSID in December 1971, submitted jointly by H.I. Glarus and by O.P.C. According to the terms of the Request, the two companies were acting in their own name and in the name, and on behalf, of several other companies.1052 Before the Tribunal, Morocco contested the jurisdiction with respect to H.I. Glarus on the ground that it had not yet existed on the date of the consent agreement.1053 In respect of the parent companies, Holiday Inns Inc. and O.P.C., jurisdiction was contested because they were not named as signatories in the agreement that contained the arbitration clause.1054 The Tribunal categorically rejected the Moroccan argument with respect to H.I. Glarus. It found that it was perfectly possible to make the entry into force of an arbitration clause dependent on the subsequent fulfillment of certain conditions, such as the incorporation of the company named in the agreement. The date of consent was the day on which the conditions were definitely satisfied (see para. 612 supra; paras. 885–886 infra).1055 The question whether the parent companies enjoyed access to the Centre as unnamed parties to the agreement caused more difficulty and was discussed extensively.1056 The Government simply contended that there had been no consent in writing with regard to the parent companies, and that consequently the arbitration clause was res inter alios acta for them.1057 The Claimants countered with a variety of arguments, including the fact that the parent companies had acted as guarantors for their subsidiaries, that they

1049 See also Friedrich Niggemann, ‘Zuständigkeitsprobleme der Weltbankschiedsgerichtsbarkeit im Licht der bisherigen Schiedsverfahren’ (1985) 5 IPRax 185, 189–190; William Rand, Robert N Hornick and Paul Friedland, ‘ICSID’s Emerging Jurisprudence: The Scope of ICSID’s Jurisdiction’ (1986) 19 NYU JILP 33, 57. 1050 See Lalive (n 53) 128. 1051 ibid 142. 1052 ibid 123. 1053 ibid 142, 144. 1054 ibid 147–148. 1055 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 146). 1056 See Lalive (n 53) 147–155. 1057 ibid 148, 150.

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had, in fact, performed several of their obligations under the Basic Agreement, had been assigned rights and duties under the contract, and that the principles of good faith and effective interpretation led to the status of the parent companies as parties to the ICSID proceedings.1058 The Tribunal rejected Morocco’s objections and recognized that Holiday Inns Inc. and O.P.C. were parties to the Basic Agreement. The Tribunal relied specifically on the fact that the parent companies had participated in the carrying out of the contract.1059 Therefore, the Tribunal found them to be entitled to invoke the arbitration clause. The Tribunal also emphasized the flexibility of the contractual set-up in respect of the designation in the contract of the various companies concerned and the need to consider the contractual relations between the parties as a whole.1060 The Tribunal said: 27. . . . to the extent that they [O.P.C. and H.I. Inc.] have carried out obligations contemplated by the Basic Agreement they are entitled to invoke the arbitration clause. 28. This conclusion is perfectly in keeping with the spirit of the Basic Agreement which obviously wanted to give the contracting companies a great amount of flexibility in the designation of the companies which would assume responsibility . . . 30. In the opinion of the Tribunal the arbitration clause must be considered an inseparable part of the Basic Agreement. It follows, therefore, that any Party on whom rights and obligations under the Agreement have devolved is entitled to the benefits and subject to the burdens of the arbitration clause.1061

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In Amco v Indonesia, a similar question arose with respect to standing before ICSID of a parent company that was not named in the consent agreement. In April 1968, Amco Asia, a company incorporated in Delaware (USA), signed a Lease and Management Agreement with an Indonesian company relating to the development of a hotel and office block in Indonesia. Indonesia had enacted a Foreign Capital Investment Law in 1967, offering tax concessions to foreign investors operating through corporations organized under Indonesian law and domiciled in Indonesia. In May 1968, Amco Asia applied for permission to establish an Indonesian company, PT Amco. The application contained a clause providing for ICSID arbitration of disputes between PT Amco and the Government of Indonesia. The application was approved in July 1968. The application and its approval constituted an agreement containing consent to the jurisdiction of the Centre. After PT Amco was established in January 1969, Amco Asia’s rights under the Lease and Management Contract were transferred to PT Amco. In January 1981, Amco Asia, PT Amco, and a third company (see paras. 683–685 infra) filed a Request for Arbitration with the Centre. The Government argued that it had never consented to ICSID arbitration with respect to Amco Asia.1062 The Claimants contended that the wording of the ICSID clause in the application, which referred to ‘the business,’ not only covered PT Amco, but also Amco Asia. The Tribunal did not accept this argument.1063 But it still found that it had jurisdiction with respect to Amco Asia. In its view, the arbitration clause, in its context, and in light of its object and purpose to 1058 1060 1061 1062 1063

ibid 148–154. 1059 ibid 151. ibid 154–155. Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 149, 151). Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 4. ibid paras 10, 19–20.

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protect investors through international arbitration, should be interpreted ‘as necessarily extending their benefit to the foreign investor,’1064 which was Amco Asia.1065 Klöckner v Cameroon involved a series of three contracts all containing ICSID clauses (see paras. 567–568, 642 supra). The first two were concluded between the foreign investor, i.e., Klöckner, and the Government. The third, the Establishment Agreement of 1973, was concluded by SOCAME, a joint venture company, 51 percent of whose shares Klöckner owned at the time, and the Government. When the arbitration was instituted in April 1981, control over SOCAME had passed from the investor to the host State. In fact, SOCAME was subsequently designated as an agency of the Government in the sense of Art. 25(1) and joined the proceedings in that capacity.1066 Before the Tribunal, the question arose whether Klöckner, SOCAME’s majority shareholder at the time of consent, was bound by the consent to the Centre contained in the Establishment Agreement that SOCAME had entered into with the Government. This time, it was the Government that sought to extend the jurisdiction over the investor in order to press a counterclaim.1067 Klöckner contested jurisdiction with respect to the Establishment Agreement arguing that, after all, it was an agreement between the two Respondents (SOCAME and the Government).1068 The Tribunal found that it had jurisdiction over Klöckner also in respect of the Establishment Agreement. It said:

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This Agreement, although formally signed by the Government and SOCAME, was in fact negotiated between the Government and Klöckner . . . Moreover, it is undeniable that it was manifestly concluded in the interest of Klöckner, at a time when Klöckner was SOCAME’s majority shareholder. The Establishment Agreement reflected the contractual relationship between a foreign investor, acting through a local company, and the host country of this foreign investment.1069

Of further note, Klöckner’s Request for Arbitration was submitted not only on its own behalf, but also on behalf of its Belgian and Netherlands subsidiaries.1070 Initially, Cameroon contested the participation of the subsidiaries. Eventually, the Tribunal and the parties agreed that the Applicant could act on behalf of its affiliates, if it produced proper powers of attorney from them.1071 All of these cases show that the tribunals take a realistic, not formalistic, attitude when identifying the consenting party on the investor’s side in contract-based ICSID arbitrations.1072 In interpreting the scope of consent ratione personae of the respective

1064 ibid para 24. 1065 An almost identical situation as in Amco, with the Tribunal adopting the same solution, arose in Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) paras 11, 13–17, 199, 203–213. Here, as well, the question arose whether a consent expressed in the instrument approving the establishment of a foreign-owned company in Indonesia, which was directed to the locally incorporated company, also covered the foreign shareholder. The Tribunal in Planet Mining found that this was indeed the case. 1066 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 11. 1067 ibid 14. 1068 ibid 15. 1069 ibid 17. 1070 ibid 10. 1071 (1984) 1(2) News from ICSID 9. 1072 The analysis of this issue in Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 6.01–6.34 is unclear and inconclusive.

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contractual agreements to arbitrate, tribunals look for the actual foreign investor and are unimpressed by the fact that the consent agreement only names a subsidiary. Consequently, in contract-based cases, the operation of ICSID clauses will regularly not be frustrated by a narrow interpretation of the investor’s identity. What matters is that the parent company, as the true investor, acts in the preparation and possibly the implementation of the investment operation and that the ICSID clause is designed to work for its benefit.1073 Depending on the circumstances, it may even be possible that ICSID clauses extend to other associated companies who are not themselves signatories to the ICSID clause, but can be seen as investors in the case at hand. The pragmatic attitude in ICSID dispute settlement practice notwithstanding, to avoid any uncertainties as to the parties’ consent ratione personae, it will be wise to take the precaution of drafting consent clauses carefully. Whenever desired and possible, parent companies, holders of controlling interests, or partners should be included among those to be accorded party status. In doing so, it should be borne in mind that the extension of jurisdiction ratione personae will only be effective if the entities in question also fulfill the Convention’s other jurisdictional requirements, in particular those relating to nationality. Cases where jurisdiction is not (claimed to be) based on a contractual agreement to arbitrate, but on the acceptance of the host State’s unilateral offer to arbitrate made in domestic legislation or in an international treaty have to be distinguished from the above line of cases. Here, there is no room for considerations as to how a contractual agreement to arbitrate should be interpreted in respect of its coverage ratione personae. Instead, as the host State’s unilateral offer to arbitrate can only be accepted by entities to whom the offer is made, the question is whether an entity that claims party status is part of the class of entities to whom the host State’s offer was made. In this respect, no issue of extending the host State’s consent to third parties can arise. This point was made clear by the Tribunal in Impregilo v Pakistan, a case based on the Italy–Pakistan BIT (see also paras. 669–670 infra).1074 The Claimant, Impregilo SpA, sought to advance claims also on behalf of an unincorporated joint venture of which it was part, as well as of its partners in that joint venture, none of whom had Italian nationality. The Tribunal rejected this attempt, finding that Pakistan’s consent under the BIT only extended to claims by Impregilo itself: In this case, Pakistan’s consent is delineated by the BIT. . . . On a proper construction, Pakistan has consented to the resolution by ICSID of disputes arising out of investments made by Italian nationals in Pakistan. There is nothing in the BIT to extend this to claims of nationals of any other state, even if advanced on their behalf by Italian nationals.1075

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The Tribunal also held that any internal arrangements between the Claimant and its partners were irrelevant for determining the scope of Pakistan’s consent under the BIT:

1073 For a critical evaluation of the ‘group enterprise’ theory, see W Michael Tupman, ‘Case Studies in the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1986) 35 ICLQ 813, 836–838. 1074 Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 114–155. 1075 ibid paras 147–148.

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The fact that Impregilo may be empowered to advance claims on behalf of its partners is an internal contractual matter between the participants of the Joint Venture. It cannot, of itself, impact upon the scope of Pakistan’s consent as expressed in the BIT. . . . If this were not so, any party would be at liberty to conclude a variety of private contracts with third parties, and thereby unilaterally expand the ambit of a BIT.1076

As the Decision on Jurisdiction in Impregilo makes clear, cases based on a host State’s unilateral offer to arbitrate, whether in domestic legislation or in an international treaty, may raise questions as to whom that offer is directed ratione personae. These situations do not, however, give rise to considerations as to whether an entity can be party to an ICSID proceeding to whom the unilateral offer has not been directed. These situations may only raise the question under what conditions, if any, an entity who is covered ratione personae by an offer to arbitrate made by the host State can bring not only (original) claims in its own name, but also (derivative or representative) claims on behalf of third parties (see paras. 659–678 infra).

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b) Claims on Behalf of Third Parties (Representative and Derivative Claims) The identity of consenting and disputing parties is also involved in respect of the question whether an entity, which is covered by the disputing parties’ consent to ICSID jurisdiction, and accordingly can act as a party to an ICSID proceeding, is limited to bringing original claims, i.e., claims on its own behalf, or can also bring derivative or representative claims, i.e., claims on behalf of another entity that has not itself consented to ICSID jurisdiction and does therefore not have party status in ICSID proceedings. This issue is mostly related to ICSID proceedings where the host State’s consent was expressed in a domestic law or investment treaty, but it may equally arise in contract-based cases. In AGIP v Congo, there was a 1974 Agreement between the investor, AGIP SpA of Italy, and the Government governing their joint ownership of a locally incorporated company, AGIP (Brazzaville) SA.1077 This company had been set up in 1962 with 90 percent of its shares being owned by AGIP SpA and 10 percent by Hydrocarbons of Switzerland. Pursuant to the 1974 Agreement, to which Hydrocarbons was not a party, AGIP SpA and the Government were to each hold 50 percent of AGIP (Brazzaville) SA. The 1974 Agreement contained an ICSID arbitration clause. Arbitration was instituted in October 1977 by AGIP SpA. The Claimant purported to act also on behalf of Hydrocarbons, since 10 percent of the shares of AGIP (Brazzaville) SA belonged to that company. AGIP SpA invoked a tacit mandate given to it by Hydrocarbons to conclude the 1974 Agreement of which the Government would have been aware. The Tribunal rejected the idea of a tacit mandate, holding that it could not give rise to a direct obligation owed by the Government towards Hydrocarbons. But the Tribunal found that Hydrocarbons, though not a party to the proceedings, was a third-party beneficiary of the 1974 Agreement in the sense of Art. 1121 of the French Civil Code,1078 which applied by virtue of a choice of law clause in the Agreement1079 (see Art. 42, para. 64). The Tribunal concluded that AGIP SpA as 1076 ibid para 151. 1077 See AGIP v Congo, Award (30 November 1979) paras 15–36. 1078 ibid para 93. 1079 ibid paras 18, 45.

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In LETCO v Liberia, a 1970 Concession Agreement between LETCO, a Liberian incorporated company controlled by French nationals, and the Government provided for ICSID arbitration. When a Request for Arbitration was submitted by LETCO in 1983, it was made in its own name and in the name of its subsidiary LLIC. The Tribunal declined jurisdiction over LLIC, noting its separate juridical personality and the absence of an ICSID arbitration agreement between LLIC and Liberia.1081 Nevertheless, the Award included as damages amounts related to the investment made by LETCO in its subsidiary LLIC. This resulted from the fact that LETCO created and capitalized LLIC pursuant to the requirements of the 1970 Concession Agreement. Whether these requirements were carried out directly by LETCO, or by means of the creation of a separate subsidiary, was irrelevant.1082 The report of the Award fails to indicate whether the Government had played any part in the subsidiary’s establishment that could have been interpreted as an implicit extension of consent to jurisdiction; nor is there any indication as to whether the nationality requirements under Art. 25(2)(b) were satisfied with respect to LLIC. In Niko Resources v Bangladesh, another contract-based ICSID arbitration, the Claimant was part of a joint venture, together with BAPEX, a Bangladeshi subsidiary of Petrobangla, that sold gas to Petrobangla. In the arbitration, the issue arose whether the Claimant could bring direct claims on her own behalf for payment of her portion of the sales price for gas delivered to Petrobangla, or whether the Claimant was limited to the (fully or partially representative) claim, pursued alternatively, for payment of amounts owed by Petrobangla to the joint venture.1083 The Respondents objected to the Tribunal’s jurisdiction, arguing that the Claimant could not ‘claim for the entire loss suffered by the corporate entity or group,’1084 as this would ‘effectively be giving investment protection to a national of Bangladesh.’1085 The Tribunal rejected the Respondent’s objection. It found that Petrobangla had consented to arbitrate the payment claim in relation to the Claimant individually,1086 and considered that ‘the question whether the claim to payment for the gas is a claim to which the Joint Venture Partners are entitled individually or jointly should be considered in the proceedings on the merits.’1087 In response to the argument that a resulting award may benefit BAPEX as a Bangladeshi national, the Tribunal reasoned: Neither Article 25 of the Convention nor the ‘purpose of the Convention’ excludes that an award in favour of a foreign national also benefits nationals of the defendant

1080 ibid para 94. 1081 LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 351, 349, 353–354. 1082 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 348, 374. 1083 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 529–574. 1084 ibid para 530 (quoting Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 154). 1085 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 530. 1086 ibid para 541. 1087 ibid para 546. See also ibid para 570.

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Contracting State. The Tribunal sees no grounds on which the Convention should make such an exclusion and the Respondents do not indicate any.1088

As the above decisions show, ICSID tribunals have been generally open in contractbased cases to assume jurisdiction over derivative or representative claims. In doing so, however, tribunals have paid little attention as to whether Art. 25(1) establishes jurisdictional strictures to such claims, for example in respect of the nationality of the third party on whose behalf a claim was advanced. At the same time, it must be noted that the claims on substance were governed by municipal laws. Thus, under the analysis of the AGIP tribunal, the claim brought in favor of a third party was technically not a derivative claim, but vested in the Claimant herself. The same seems to be the case in LETCO, where investments in the subsidiary were required by the Concession Agreement to which LETCO was a party. In Niko Resources, the Tribunal ultimately considered that the Claimant could pursue her principal claim, and there was no need to decide on the representative claim made in the alternative.1089 In cases based on a host State’s unilateral offer to arbitrate made in domestic legislation, tribunals have been stricter on the possibility to entertain representative claims. In Zhinvali v Georgia, a case based on the Respondent’s consent to ICSID in Art. 16(2) of Georgia’s Investment Law of 1996, the Request for Arbitration had been filed solely by the Claimant, but it was said to be also ‘submitted on behalf of’ the Claimant’s three shareholders.1090 The Claimant described itself as a ‘consortium’ of the three shareholding companies. The Tribunal thus had to decide whether the Claimant, a corporation established in Ireland, was entitled to assert claims on behalf of its shareholders for the purposes of Art. 25(1) of the Convention. The Respondent objected to the claims on their behalf ‘without those shareholders assuming the risk of becoming parties to this arbitration.’1091 The Tribunal found that there was no consortium agreement; the three companies were just shareholders in the Claimant.1092 Distinguishing its case from Holiday Inns, AGIP, Amco, and Klöckner, the Tribunal in Zhinvali noted that there was no specific agreement between the Claimant and the host State, which could have allowed its shareholders to become party to the case.1093 Instead, the Tribunal emphasized, ‘there is only one “precisely designated” Claimant Party and that is [the Claimant]. There are no “Others” as co-claimant parties . . .’1094 The issue this situation raised was thus whether a named party to the ICSID arbitration could bring claims on behalf of a non-party. This was not possible, in the Tribunal’s view, absent a specific agreement between the disputing parties. It reasoned: [N]either the ICSID Convention nor the ICSID Arbitration Rules contain any express provision permitting parties to assert claims on behalf of non-parties. This omission, and the case precedents previously cited, therefore, support the proposition that any

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ibid para 573. Niko Resources v Bangladesh, Decision on Payment Claim (11 September 2014) para 150. Zhinvali v Georgia, Award (24 January 2003) paras 392–395. ibid para 395. 1092 ibid para 394. ibid paras 401–402. 1094 ibid para 403.

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schreuer’s commentary on the icsid convention such right of a complaining company requires the agreement or ‘consent’ of the respondent Contracting State.1095

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The Tribunal further noted that it would have been possible, but had not occurred in the case, that two of the three shareholders that were incorporated in the United States could have brought claims in their own name based on the jurisdictional offer made under the Georgia–United States BIT.1096 In investment treaty-based arbitrations, tribunals follow in essence the same line of reasoning. The Tribunal in Impregilo v Pakistan, a case based on the Italy–Pakistan BIT, rejected the attempt of the Claimant to advance claims also on behalf of an unincorporated joint venture of which it was part, as well as of its partners in that joint venture, none of whom had Italian nationality (see also paras. 656–658 supra).1097 The Tribunal concluded that a claimant national of one State party to a BIT generally could not bring claims on behalf of nationals of non-parties, arguing that [i]f this were permissible, it would constitute a simple and effective means of evading the limitations in Article 25 of the Convention, and expanding the scope of the BIT. Indeed, on this basis, any party could bring itself within the ambit of the Convention and the BIT by simply appointing a representative. This cannot have been intended by the careful delimitation of both the Convention’s and the BIT’s scope.1098

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The Claimant was therefore not permitted to bring a claim under the Italy–Pakistan BIT on behalf of either the joint venture or its non-Italian partners therein.1099 But the Tribunal also indicated that its conclusion was not limited to situations where the nationalities of the claimant and third parties diverged. Instead, it reflected ‘an established principle of international law that a shareholder of a company, or one member of a partnership or joint venture, may not claim for the entire loss suffered by the corporate entity or group.’1100 That jurisdictional limitations for derivative or representative claims under Art. 25(1) are unrelated to the nationality of the entities involved, was also confirmed by the Tribunal in Tulip v Turkey.1101 In that case, the Claimant not only brought claims for breach of the Netherlands–Turkey BIT in its own name, but also representative claims on behalf of an individual with Dutch nationality who executed a power of attorney in the Claimant’s favor to this effect without, however, seeking to assume party status himself. In the Tribunal’s view, it was not sufficient that the individual qualified as an 1095 ibid. 1096 ibid para 404. 1097 Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 114–155. 1098 ibid para 135. Similarly Mihaly v Sri Lanka, Award (15 March 2002) paras 13–24 (rejecting the attempt to bring representative claims based on a partnership with, or an assignment by, a third party with nationality of a State that, at the time, was not an ICSID member). 1099 See also Fireman’s Fund v Mexico (AF), Award (17 July 2006) paras 138–140 (noting that a NAFTA claimant is not, and cannot, present claims on behalf of a German parent company under the Germany– Mexico BIT); Mihaly v Sri Lanka, Award (15 March 2002) paras 13–26 (holding that the Claimant was limited to bringing claims in its own name and could not bring claims on behalf of a Canadian company based on either partnership or assignment). 1100 Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 154. Cf also LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, paras 34–41 (finding that an ‘external consortium’ under Italian law, which had the capacity to sue and be sued, could not bring claims on behalf of the members of the consortium). 1101 Tulip v Turkey, Award (10 March 2014) paras 209–231.

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investor who had made an investment and had himself agreed that the Claimant would bring a claim on his behalf: The relevant enquiry must be whether the respondent State has consented to prospective liability under the BIT on the basis of representative claims. This issue is properly characterised as jurisdictional in nature rather than being merely procedural, as it concerns the scope of State consent in treaty arbitration.1102

Turning to the BIT, the Tribunal found that it did not ‘provide a basis to conclude that the State has consented to have representative claims brought against it.’1103 The Tribunal also considered that the ICSID Convention did not alter this position:

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Ex facie, no provision of the ICSID Convention enables such a non-party to impose himself upon a State party respondent by deciding to ‘submit himself’ by giving a prior or subsequent authority to the named claimant, nor to himself be joined later in the proceeding without the explicit consent of the respondent State.1104

The jurisdictional prohibition of representative claims in the absence of the parties’ specific consent is also reflected in other investment treaty decisions, including in the assessment of whether the host State abided by its substantive investment treaty obligations and in respect of the calculation of damages a claimant in an ICSID arbitration can claim. In Rompetrol v Romania, the Tribunal emphasized that its competence only related to whether obligations under the Netherlands–Romania BIT owed to the Claimant, Rompetrol Group NV, had been breached, but did not encompass an assessment of the lawfulness under the BIT of criminal investigations against two individuals that were not party to the arbitration:

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[T]he claims before the Tribunal for adjudication in these proceedings are those which allege unlawful harm to TRG, the Claimant in the arbitration, and that the Tribunal is not competent, in general or in particular, to pronounce on actions said to have injured either Mr. Patriciu or Mr. Stephenson, except to the extent that the latter can be shown to have occasioned unlawful harm to TRG.1105

Several ICSID tribunals have also held that claimants could only claim for damages they have incurred themselves and that no jurisdiction existed in respect of representative claims for damages incurred by third parties. For example, in PSEG v Turkey, the Claimants had included in their damages calculation payments made by entities which were not parties to the proceedings and alleged that these expenses had been incurred on behalf of the Claimant.1106 The Tribunal found that these amounts were not subject to compensation, since they had not been made by the Claimant. After recalling that it had found in its Decision on Jurisdiction that the entities which incurred the expenses did not have standing in the ICSID proceedings, the Tribunal explained:

1102 ibid para 222. 1103 ibid para 224. 1104 ibid para 229. 1105 Rompetrol v Romania, Award (6 May 2013) para 165. See also ibid paras 166, 171, 172, 177, 190, 200. But see Desert Line v Yemen, Award (6 February 2008) paras 290–291 (where the Tribunal awarded moral damages, including for physical duress of the Claimant’s executives). 1106 PSEG v Turkey, Award (19 January 2007) paras 322–326.

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schreuer’s commentary on the icsid convention The Tribunal will not undo with one hand what it did with the other. This would be the result if compensation is awarded in respect of investments or expenses incurred by entities over which there is no jurisdiction, even if this was done on behalf of one of the Claimants. As the Tribunal also noted in the Decision on Jurisdiction, these entities might have a claim against PSEG in the light of intra-corporate arrangements, but this is not something for which Turkey is liable, directly or indirectly.1107

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The jurisdictional limitations under Art. 25(1) for derivative and representative claims were also stressed by the ad hoc Committee in Occidental v Ecuador.1108 In that case, one of the Claimants had sought damages arising out of the Government’s termination of the Participation Contract, a type of production-sharing agreement for crude oil, in respect of 100 percent of the claimed value of the Contract, even though the Claimant had ‘farmed out’ 40 percent of its position in the Participation Contract to a third-country investor. The ad hoc Committee found that the Tribunal had exceeded its jurisdiction when awarding damages on the 40 percent share that had been farmed out to the third-country investors who had to be considered as the beneficial owner of the 40 percent share: The position as regards beneficial ownership is a reflection of a more general principle of international investment law: claimants are only permitted to submit their own claims, held for their own benefit, not those held (be it as nominees, agents or otherwise) on behalf of third parties not protected by the relevant treaty. And tribunals exceed their jurisdiction if they grant compensation to third parties whose investments are not entitled to protection under the relevant instrument.1109

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In general, derivative and representative claims are therefore outside the jurisdiction of an ICSID tribunal, unless both disputing parties consent to such claims.1110 One way to do this is in a contract between the investor and the State (see paras. 660–661 supra). Another way is through provisions in host State legislation or in an investment treaty. An example of the latter can be found in the NAFTA, which allows covered investors not only to bring claims on their own behalf (Art. 1116 of the NAFTA), but also ‘on behalf of an enterprise of another Party that is a juridical person that the investor owns or controls directly or indirectly’ (Art. 1117(1) of the NAFTA). In such a case, the enterprise the investor owns or controls does not become a party to a proceeding;

1107 ibid para 325. See also Occidental v Ecuador, Award (5 October 2012), Dissenting Opinion Stern (20 September 2012) paras 132, 138–144 (noting at para 144 that the Claimant ‘can only claim, on its own behalf, the value of its reduced investment, and not of the investments made by another, nonAmerican company’); Saluka v Czech Republic (UNCITRAL), Partial Award (17 March 2006) para 244. 1108 Occidental v Ecuador, Decision on Annulment (2 November 2015) paras 255–291. 1109 ibid para 262. For a different conclusion on the issue of beneficial ownership, see CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 32 (stating, albeit in the context of an assignment of ownership after the registration of the request, and in a situation where the Claimant had not been deprived of an interest in the outcome of the case since the assignment was to become effective only after the conclusion of the ICSID proceedings so that the assignor remained entitled to a portion of the amount received by the assignee, that ‘absence of beneficial ownership by a claimant in a claim or the transfer of the economic risk in the outcome of a dispute should not and has not been deemed to affect the standing of a claimant in an ICSID proceeding, regardless whether or not the beneficial owner is a State Party or a private party’). 1110 See also EnCana v Ecuador (UNCITRAL), Award (3 February 2006) paras 119–126.

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instead, the claimant who acts as a named party is exceptionally permitted to bring claims on behalf of a third party.1111 Similar provisions are also contained in other investment treaties.1112 What is important to determine in this context is whether the claim advanced is of a derivative or representative nature and involves the breach of obligations owed by the respondent in relation to a third party, or whether the claim advanced involves the breach of obligations owed to the named claimant herself.1113 A practically relevant situation where this question plays a crucial role concerns treaty claims by investors whose investment consists of a shareholding in a company in the host State or who hold their investment through intermediary companies. In these situations, shareholderinvestors will often invoke the breach of the shareholders’ own rights under a treaty. These generally constitute original claims, not derivative or representative claims on behalf of the company.1114 Similarly, investors who bring claims after having divested in the host State after an alleged breach of their rights, including by transferring their investment to a third party, regularly bring claims for breach of their own rights and not derivative or representative claims on behalf of their successor (see also paras. 398–401 supra).1115

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c) (Singular and Universal) Succession Divergence between the consenting and disputing parties on the investor’s side may also occur where, in the course of the investment operation, parts or all of the investment, or the investor’s rights and duties, are transferred to a third party, which may, but 1111 For an example, see Detroit International Bridge v Canada (UNCITRAL), Award on Jurisdiction (2 April 2015). See also Mondev v United States (AF), Award (11 October 2002) para 79 (stating that in respect of Art. 1117 of the NAFTA, ‘there does not seem to be any room for the application of any rules of international law dealing with the piercing of the corporate veil or with derivative actions by foreign shareholders. The only question for NAFTA purposes is whether the claimant can bring its interest within the scope of the relevant provisions and definitions’). See also USMCA (n 338) Art. 14.D.3(1)(b). 1112 See eg Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) (signed 5 August 2004, in force) Art. 10.16(1)(b). 1113 If obligations owed to the claimant have been breached, expenses incurred by the claimant under contracts with third parties, or compensation the claimant owes to those third parties for breach of the contracts as a consequence of the State’s breach of its obligation to the claimant, form part of the calculation of the claimant’s damages or compensation; such expenses do not constitute derivative claims of the third parties in question. For examples, see SOABI v Senegal, Award (25 February 1988) paras 8.01–8.23, 12.05; SPP v Egypt, Award (20 May 1992) para 230; Middle East Cement v Egypt, Award (12 April 2002) paras 154–156; Siemens v Argentina, Award (6 February 2007) paras 322, 329, 365, 387, 403. 1114 See eg AMT v Zaire, Award (21 February 1997) para 5.15; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 88–94; CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 36–65; Impregilo v Argentina, Award (21 June 2011) paras 110–140; Daimler v Argentina, Award (22 August 2012) paras 82–93; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 235–238; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 187–235; Alghanim v Jordan, Award (14 December 2017) para 120; Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018) paras 178–186. Conversely, claims advanced by companies acting as parties in ICSID proceedings regularly involve claims for the vindication of the companies’ own rights, not derivative or representative claims in respect of rights of the shareholders. See eg Saluka v Czech Republic (UNCITRAL), Partial Award (17 March 2006) paras 227–230, 244. See also paras 331–342 supra. 1115 For further details and reference to the respective case law, see Markus Burgstaller and Agnieszka Zarowna, ‘Effects of Disposal of Investments on Claims in Investment Arbitration’ (2019) 36 J Int’l Arb 231.

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need not, be affiliated with the original party.1116 Such transfer can be the consequence of either singular succession, involving, for example, an assignment of the investment or the investor’s rights and duties after a sale (in the form of an asset or share deal) or a donation, or universal succession, which occurs, inter alia, in the case of the death of the investor or as a result of corporate restructurings that lead to the disappearance of the original investor. Succession on the investor’s side has multiple jurisdictional implications, including for the determination of corporate nationality (see para. 1145 infra) and whether the successor itself has made an investment (see paras. 369–380 supra). Successions also raise, as relevant for present purposes, the question whether the successor to the original investor’s rights and duties will succeed to the predecessor’s status in respect of ICSID jurisdiction so that it can become a party to proceedings before the Centre.1117 The practice of ICSID tribunals on the effect of singular and universal succession on party status is extensive and often driven by fact-specific, rather than principled, considerations.1118 This notwithstanding, a number of factors can be identified that play a role in determining whether a successor can rely on the host State’s consent given prior to the succession. These include the point in time when the succession occurred, the type of succession (singular or universal) involved, and whether succession is used strategically in order to gain access to ICSID jurisdiction where none would exist otherwise or expand the protection under an investment treaty. Moreover, the basis of the parties’ consent to ICSID jurisdiction (contract v. legislation or treaty) matters. Succession in the context of contract-based ICSID proceedings raises the question whether replacing a party to a contractual agreement to submit to the jurisdiction of the Centre is permissible under the parties’ agreement and the applicable lex contractus. Succession in cases involving acceptance of the host State’s unilateral offer to accept ICSID jurisdiction turns on whether the successor qualifies as an addressee of an offer to arbitrate made by the host State ratione personae, ratione materiae, and ratione temporis.1119 (i) Succession in Contract-Based Disputes In contract-based cases, ICSID tribunals repeatedly have been confronted with assignments of contracts that contained ICSID clauses. In Holiday Inns v Morocco, the problem of identifying the proper parties on the investor’s side was not restricted to the parent companies and the subsidiaries at the time of consent (see paras. 644–647 supra). The Basic Agreement of December 1966 contained a provision that reserved the 1116 A transfer of rights and obligations to a third party must be distinguished from a change of name of a party, which leaves its identity unaffected. See eg Lucchetti v Peru, Decision on Annulment (5 September 2007) para 1; Daimler v Argentina, Award (22 August 2012) paras 2, 16, 21, 22, 33 fn 2, 105 fn 175; Orascom v Algeria, Award (31 May 2017) para 2; Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018) para 2 (involving a name change after a merger by incorporation of another corporation). Similarly, a transfer of a company’s seat from one jurisdiction to another may leave the company’s identity unaffected; see eg Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 110. 1117 See also Broches (n 1001) 77–78; Delaume, ‘Le Centre’ (n 163) 796–797; Delaume (n 7) 24–26. 1118 For critical analysis of the approaches of tribunals, see also Kathleen Claussen, ‘The International Claims Trade’ (2020) 41 Cardozo LR 1743. 1119 Hanno Wehland, ‘The Transfer of Investments and Rights of Investors under International Investment Agreements – Some Unresolved Issues’ (2014) 30 Arb Int’l 565, 567.

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right of the foreign partners to assign their rights and duties under the contract at any time ‘to any affiliated corporation they may jointly own or designate’ or ‘to separate corporations or affiliates.’1120 In order to facilitate the project, and upon the Government’s specific requests, four local companies (the H.I.S.A. companies) were established and incorporated.1121 No attempt was made to confirm, extend, or modify the original consent to ICSID arbitration with respect to the four new companies.1122 The Request for Arbitration was made also in the name of the four H.I.S.A. companies.1123 The Government objected to the Tribunal’s competence with regard to the H.I.S.A. companies on a number of grounds: it had never agreed to treat them as ‘nationals of another Contracting State’ in the sense of Art. 25(2)(b); at the time of the execution of the Basic Agreement, the four companies were not yet in existence and could, consequently, not rely on its arbitration clause; and the rights under the Basic Agreement had never been assigned to them.1124 The Claimants contended that the Government’s agreement to treat the four H.I.S.A. companies as nationals of another Contracting State, and the extension of the Centre’s jurisdiction to them, had been given implicitly. The Tribunal held that ‘the H.I.S.A. companies cannot be parties to the present proceedings before ICSID,’ finding that the four companies did not meet the Convention’s nationality requirements under Art. 25(2)(b), since the Government had not agreed, also not implicitly, to treat them as nationals of another Contracting State1125 (see also paras. 1281–1283 infra). In Amco v Indonesia, too, the problem of identifying the proper parties on the investor’s side was not confined to the relationship between parent and subsidiary at the time of consent (see paras. 648–649 supra). Some years after the original consent agreement and after the establishment of the local subsidiary, PT Amco, a written application was made by PT Amco to the Indonesian authorities requesting permission for the transfer of a portion of the shares held by Amco Asia to Pan American Development Ltd., a Hong Kong corporation. Written permission was given by the Government, but the question of ICSID’s jurisdiction was not mentioned at the time. The Request for Arbitration in January 1981 was also made by Pan American. The Government contested jurisdiction with respect to Pan American, arguing that there was no consent to the jurisdiction of the Centre.1126 In the Government’s view, the permission for the transfer of shares did not amount to an express consent to ICSID arbitration with Pan American.1127 The Tribunal found otherwise. It held: [T]he right acquired by Amco Asia to invoke the arbitration clause is attached to its investment, represented by its shares in PT Amco, and may be transferred with those shares. To be sure, for such a transfer to be effective, the government of the host country must approve it, which approval has as its consequence that said government agrees to the transferee acquiring all rights attached to the shares, including the right to arbitrate, unless this latter right would be expressly excluded in the approval decision.

1120 1122 1124 1125 1126 1127

See Lalive (n 53) 127. 1121 ibid 129, 140–141. ibid 138. 1123 ibid 123, 137. ibid 139. Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 141–142). Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 4. ibid para 27.

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schreuer’s commentary on the icsid convention Such approval having been given in the instant case, it constitutes, together with Amco Asia’s Request to transfer the shares, the agreement in writing to submit to ICSID arbitration the disputes with the transferee, requested by the Convention (Article 25).1128

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The Tribunal added that the partial transfer of shares and the consequent acquisition of party status by Pan American did not alter Amco Asia’s right to invoke the arbitration clause. Whether or not the block of shares transferred to Pan American was a controlling one was irrelevant: [T]he right to invoke the arbitration clause is transferred with the transferred shares, whether or not the same constitute a controlling block, being it understood, once again, that for such transfer of the right to take place, the government’s approval is indispensable.1129

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The question of jurisdiction over the Claimant re-emerged in Amco v Indonesia at a much later stage and under entirely different circumstances. After the first Award in the case had been partly annulled,1130 the case was resubmitted to a new Tribunal in May 1987. Before the new Tribunal, Indonesia objected to the jurisdiction ratione personae over Amco Asia, since the company had been dissolved under the laws of Delaware in December 1984, approximately one month after the rendering of the original Award. A different company, bearing the name Amco Asia Corporation, was then incorporated allegedly ‘for the sole purpose of creating the semblance of its status on [sic] a claimant.’1131 Amco responded that it was not suggested that the newly incorporated corporation was a claimant. Rather, the old company, Amco Asia, continued to exist under the law of Delaware for purposes of the arbitration. The Tribunal found that the legal status and capacity of a company was determined by the law of the State of incorporation (see Art. 42, para. 21). It determined that Delaware corporate law allowed the continuation in existence of a dissolved corporation in respect of a proceeding begun by or against it, prior to, or within three years of, its dissolution. Therefore, the arbitration was within the time limits of Delaware law.1132 In Standard Chartered Bank v TANESCO, the Claimant, Standard Chartered Bank (Hong Kong) Ltd (SCB HK), brought claims for outstanding payments under a power purchase agreement (PPA) as an assignee of rights of IPTL, a locally incorporated, but foreign-owned company, which had entered into the PPA with TANESCO, a Stateowned Tanzanian corporation.1133 The PPA included an ICSID arbitration clause. Originally, the rights under the PPA had been assigned under a Security Deed to a third party as collateral for loans given to IPTL in order to finance the construction and 1128 ibid para 31 (emphasis in the original). For a similar analysis of the same issue, see Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) paras 16–17, 199–213. 1129 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 32. See also Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 115–116; DH Bliesener, ‘La compétence du CIRDI dans la pratique arbitrale’ (1991) 68 RDIDC 95, 125–126; M Sornarajah, ‘ICSID Involvement in Asian Foreign Investment Disputes: The AMCO and AAPL Cases’ (1994) 4 Asian YBIL 69, 75–76. 1130 Amco v Indonesia, Decision on Annulment (16 May 1986). 1131 Amco v Indonesia, Resubmitted Case: Decision on Jurisdiction (10 May 1988) para 99. 1132 ibid paras 100–108. 1133 Standard Chartered Bank v TANESCO, Decision on Jurisdiction and Liability (12 February 2014) paras 21–26, 30–63, 115–123.

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operation of an electricity generating facility. SCB HK had taken over those loans and been assigned the Security Deed. When IPTL defaulted on those loans, SCB HK relied on the assignment of IPTL’s rights in the PPA under the Security Deed, and sought payment from TANESCO under the PPA, invoking the ICSID arbitration clause in the agreement. The Tribunal accepted that SCB HK could rely on that clause because the PPA had been validly assigned to SCB HK by operation of Tanzanian law, the law the Tribunal found to apply to the validity and effect of the assignment.1134 Consequently, SCB HK could ‘invoke the arbitration agreement in . . . the PPA as a right that has been assigned to it and . . . bring proceedings against TANESCO without joining IPTL as a part to the action.’1135 The assignment of a contract containing an ICSID arbitration clause was also at issue in Caratube and Hourani v Kazakhstan.1136 In that case, the contract was originally concluded between a Kazakh subsidiary of Consolidated Contractors (Oil and Gas) Company SAL (CCC); it stipulated that the ‘Contractor’ was a resident/national of Lebanon.1137 At the time, Lebanon was not yet a member of the ICSID Convention.1138 A few months later, the contract was assigned, with the Government’s approval, to Caratube International Oil Company LLP (Caratube), a company incorporated in Kazakhstan, that was under foreign control.1139 When Caratube initiated ICSID arbitration, the question arose whether ICSID’s jurisdiction could be established on the basis of the assigned contract. This included the questions of whether Kazakhstan had consented, in the contract, to ICSID jurisdiction in relation to Caratube and whether the contract contained an agreement that Caratube be treated as a foreign national in the sense of Art. 25(2)(b) of the ICSID Convention.1140 The Tribunal found that the interpretation of the contract was governed by Kazakh law as the lex contractus.1141 On this basis, the Tribunal determined that the clause in the contract, which stipulated that CCC should be treated as a national of Lebanon because of its incorporation in Lebanon, could not be understood to mean that Caratube should be treated as a Kazakh national because of its incorporation in Kazakhstan after the assignment of the contract to Caratube. Instead, the clause in question, in the Tribunal’s view, was evidence that the parties to the contract had agreed to ‘internationalize’ the contract from the start.1142 Consequently, the Tribunal found that the contract should be interpreted as an expression of the Parties’ intention to have their disputes arbitrated as a general proposition and to pave the way for ICSID arbitration wherever possible, including through an agreement to treat the Contractor as a foreign national for the purposes of the ICSID Convention.1143 1134 ibid paras 126–153. 1135 ibid para 153. For a similar analysis concerning the assignment by IPTL to Standard Chartered Bank (Hong Kong) of the so-called Implementation Agreement which had been concluded with the Government of Tanzania and contained an ICSID arbitration clause and certain assurances of nondiscrimination and non-expropriation, see Standard Chartered Bank (Hong Kong) v Tanzania, Award (11 October 2019) paras 54–175. 1136 Caratube and Hourani v Kazakhstan, Award (27 September 2017). 1137 ibid paras 27, 602. 1138 ibid para 607, fn 44. 1139 ibid paras 1, 6, 25, 608. 1140 ibid paras 598–628. 1141 ibid para 601. 1142 ibid para 599. 1143 ibid para 607.

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The Caratube and Hourani tribunal therefore found that an agreement to treat a locally incorporated company under foreign control pursuant to Art. 25(2)(b) of the ICSID Convention could be assigned, allowing a successor who is a locally incorporated company under foreign control access to ICSID proceedings. In addition, the Tribunal found that the Government and Caratube had consented to arbitrate in the contract, which had become binding between the parties by means of the assignment.1144 The Tribunal also concluded that the assignee had made an investment (see para. 372 supra).1145 Universal succession, which involves the substitution of the successor for the predecessor in respect of all rights and obligations, has also been found to bind the successor to an ICSID arbitration clause contained in a contract between the predecessor and the host State. In Noble Energy v Ecuador, an Investment Agreement containing an ICSID arbitration clause was concluded between Samedan, a wholly owned subsidiary of Noble Energy, and Ecuador. Samedan was subsequently absorbed by Noble Energy, which succeeded to all its rights and obligations. Under the terms of the Investment Agreement, it applied to ‘successors, assigns and designees.’1146 The record did not show an authorization, registration, or notification of the merger. The Tribunal held that Noble Energy was allowed to rely on the Investment Agreement to establish ICSID’s jurisdiction.1147 It said: When a parent absorbs its subsidiary and thus becomes formally the investor in the latter’s place, there is no real change in the ‘investor’ from the State’s perspective. No previously unknown entity has entered into the contractual relationship. The only real change is a shortening of the corporate chain of ownership, which should not impact the State in any way. This is especially true here where the nationality of the parent and subsidiary is the same.1148

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Although various types of succession have been accepted in contract-based cases, ICSID tribunals have also emphasized that this could not have the effect of circumventing jurisdictional requirements under Art. 25(1).1149 One example of such an attempt of circumvention occurred in Banro v DR Congo, which arose out of an investment agreement that was concluded between a Canadian company, Banro Resource, and the Democratic Republic of Congo and that contained an ICSID arbitration clause.1150 After a dispute arose, Banro Resource transferred the investment to Banro American, its US affiliate. Banro American, however, was not party to the investment agreement. Nine days after the transfer, Banro American instituted ICSID arbitration. Canada, unlike the United States, was not a party to the Convention either at the date of the consent to arbitration or at the time the proceedings were instituted. The Tribunal found that it did not have jurisdiction in the case. Banro Resource was not a ‘national of

1144 1146 1147 1148

ibid para 626. 1145 ibid paras 629–650. Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 12, 99. ibid paras 105, 109. ibid para 107. Cf also Tokios Tokelės v Ukraine, Award (26 July 2007) para 111, where the Tribunal found that the transfer of assets from one subsidiary of the investor to another did not affect jurisdiction. 1149 See also the discussion in Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 640–647. 1150 Banro v DR Congo, Award (1 September 2000) (excerpts published in (2002) 17 ICSID Rev 380).

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another Contracting State’ and could therefore not assign any right to access to ICSID to its US affiliate. It stated: Banro Resource, a Canadian company, never had, at any time, jus standi before ICSID. Having never existed for the benefit of Banro Resource, the right to access to ICSID cannot be viewed as having been ‘extended’ or ‘transferred’ to its affiliate, Banro American.1151

As the ICSID practice discussed above shows, both singular succession based on the assignment of contracts containing ICSID clauses, as well as universal succession involving the substitution of the predecessor by the successor in respect of all rights, including those arising from ICSID consent clauses, has been accepted as complying with the principle that consenting and disputing parties must be identical. The fact that the host State had agreed to the succession, whether in advance in the contract or when the succession occurred, was often an important factor. If the host State is aware of, and agrees to, the assignment of rights and duties, the approval of the extension of jurisdiction ratione personae to the successor will be assumed. If the host State is unaware of an assignment, or has resisted succession, it is less likely that a tribunal or conciliation commission will decide that party status under the Convention has been transferred. If the successor to rights and obligations is closely affiliated to the party named in the consent agreement, either as a parent company or as a subsidiary, the standards will often be less stringent. At the same time, it is important to keep in mind that succession cannot be used to circumvent jurisdictional requirements under Art. 25(1) of the ICSID Convention, in particular those relating to the investor’s nationality. Succession can neither lead to the successor having greater rights than the predecessor in respect of access to ICSID, nor does succession allow to dispense with the need for all jurisdictional requirements to be present in the successor. In order to avoid difficulties, it seems wise to make early provision for the contingency of a later succession.1152 In doing so, it should be kept in mind that any successor must satisfy the Convention’s nationality requirements if it is to have access to the Centre. The 1968 Model Clauses offered a clause for the transfer of jurisdictional rights on both the investor’s side and in respect of the host State’s constituent subdivisions or agencies.1153 Delaume has suggested a simpler clause in the following terms: It is hereby agreed that the consent to the jurisdiction of the Centre shall equally bind any assignee . . . to the extent that the Centre can assume jurisdiction over a dispute between such assignee and the other party, and that neither party to this Agreement shall, without the written consent of the other, transfer its interest in this Agreement to an assignee with respect to whom the Centre could not exercise such jurisdiction.1154

1151 ibid para 5. 1152 Amerasinghe, ‘Submissions’ (n 26) 230–231. 1153 Clause VII of the 1968 Model Clauses, (1968) 7 ILM 1159, 1167–1168. The 1993 Model Clauses do not provide for this contingency; see 1993 Model Clauses, (1997) 4 ICSID Reports 357. See also Art. 7.4 of the 1982 Participation Agreement between New Zealand and Mobil Oil NZ Ltd in (1997) 4 ICSID Reports 123. 1154 Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 116.

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Even if no advance arrangements for the jurisdictional consequences of succession have been made, it is still possible to clarify the situation at the time of the assignment. The authorization by the host State of a transfer of interests arising from the investment should specifically include the arbitration clause. At that point, the assignee’s nationality under the Convention can be determined and, as the case may be, possibly rectified by way of an agreement under Art. 25(2)(b). (ii) Succession in Disputes Based on Domestic Legislation and Treaty Questions of succession have to be analyzed differently when no direct contractual arrangement exists between the predecessor and the host State, but where the Centre’s jurisdiction is based on the claimant’s acceptance of the host State’s consent expressed in legislation or treaty. In such cases, the institution of ICSID proceedings may well be the investor’s first direct contact with the host State. Unlike in contract-based cases, the principal question raised by succession in this context is whether the successor herself qualifies as an addressee of the host State’s offer to submit to ICSID jurisdiction and can therefore accept that offer herself. Succession in these cases can be the consequence of an assignment of the investment itself (involving an asset deal) or follow from changes in the ownership structure in case corporate entities are involved (involving a share deal). Under certain circumstances, succession can also be the consequence of the assignment of an existing claim against the host State for breach of the underlying legislation or treaty (see paras. 716–726 infra). (a) Disputes Based on Domestic Legislation

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In SPP v Egypt, jurisdiction was not based on an agreement between the investor and the host State, but on Egyptian legislation (see paras. 790–792 infra). In 1974, agreements were drawn up between SPP, a Hong Kong company, and Egypt under which a joint venture company was to be established for the purpose of carrying out the investment project. One of the agreements provided that SPP would incorporate a holding company to own its shareholding in the joint venture and that SPP had the right to assign its rights and obligations to the new company.1155 Thereupon, SPP incorporated a subsidiary company, SPP(ME), which held SPP’s shares in the joint venture. In August 1984, SPP(ME) filed a Request for Arbitration with ICSID; in July 1985, it was joined as a Claimant by SPP, the parent of SPP(ME).1156 In the proceedings on the merits, Egypt raised the objection that SPP(ME) did not have the status of an approved investor under the Egyptian law providing for ICSID arbitration. The authorization granted to the parent company, SPP, was never extended or transferred to SPP(ME). The Claimants argued that the Egyptian authorities had, in fact, approved the substitution of SPP(ME) for SPP, and that it was SPP(ME) that made the investment and implemented the joint venture.1157 The Tribunal examined the details of SPP(ME)’s incorporation and the establishment of the joint venture and concluded that the substitution of SPP(ME) for SPP was not only known to, but had

1155 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 23. 1156 ibid para 14. See also ibid, Dissenting Opinion El Mahdi (14 April 1988) Part II, para 3 (criticizing this as being at odds with the formalities for the institution of proceedings). 1157 SPP v Egypt, Award (20 May 1992) paras 134–136.

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also been approved by, the Egyptian authorities. Therefore, SPP(ME) was an investor entitled to avail itself of the ICSID clause in the Egyptian law.1158 In Caratube and Hourani v Kazakhstan, the Tribunal took the same approach and confirmed that an assignment of the investment from the original investor to its successor could not affect or modify the scope of the host State’s offer to arbitrate in domestic legislation.1159 The issue here was whether jurisdiction over Caratube could be established not only based on the ICSID arbitration clause included in the contract with the Government that was assigned to Caratube (see paras. 688–690 supra), but also on Kazakhstan’s Foreign Investment Law (FIL). The Respondent objected, inter alia, that the FIL had been repealed years before the arbitration had been initiated.1160 The Claimant, in turn, submitted that it was sufficient that the FIL was in force when the contract was assigned to it.1161 The Tribunal found that the FIL could not offer an independent basis of jurisdiction because it had lapsed; this notwithstanding, the rights and guarantees the FIL contained had been integrated by the parties to the contract as contractual obligations. The Tribunal reasoned:

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the question is not whether two private parties by means of a private agreement are entitled under Kazakh law to extend the scope of application of the FIL to persons, entities or transactions not covered by the FIL. . . . Rather, the wording of . . . the Contract indicates that these substantive guarantees and protections were intended to apply between the Parties in their contractual relationship in the capacity of supplementary contractual provisions.1162

(b) Treaty-Based Disputes In treaty-based cases, the analytical approach to determining access to ICSID following changes in ownership of the investment through singular or universal succession are similar to cases based on domestic legislation. Here too, the question is regularly not whether consent given to the predecessor under an investment treaty between its home State and the host State can be transferred to the successor. Instead, the question is whether the successor can have access to ICSID based on the investment treaty between the host State and its home State. Under this approach, the successor must meet both the jurisdictional requirements under Art. 25(1) of the ICSID Convention and be within the parameters of the offer to submit to ICSID jurisdiction made by the host State in the investment treaty with the successor’s home State. In many situations, singular and universal succession in the treaty-based context will therefore not raise any specific issues with respect to ICSID jurisdiction. As stated by Wehland, ‘[t]he requirements for investment protection in a post-transfer situation are in principle no different from those applicable at any other point in time.’1163 ICSID tribunals have thus accepted jurisdiction over disputes brought by the successor in a variety of situations that included both singular and universal succession (see also paras. 369–380 supra).

1158 ibid paras 138–144. See also ibid, Dissenting Opinion El Mahdi (20 May 1992) Part III.2. 1159 Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 537–560, 579–593, 627–628, 651–659. 1160 ibid para 588. 1161 ibid para 554–560. 1162 ibid para 655. 1163 See Wehland (n 1119) 567.

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The possibility of the successor to rely on the host State’s consent in an investment treaty in order to have access to the Centre in case of universal succession was addressed in a number of cases.1164 None of them, however, involved transborder successions; consequently, no changes to nationality or questions as to the applicability of a different investment treaty were at stake. In LESI & Astaldi v Algeria, a case based on the Algeria–Italy BIT, the second Claimant Astaldi SpA was the universal successor of the company Gruppo Dipenta Costruzione SpA following a ‘fusion-absorption’; Dipenta had earlier entered into a consortium agreement with the first Claimant in order to undertake construction work under a contract with the Government.1165 The Respondent objected that it had never approved Astaldi’s involvement in the contract. The Tribunal rejected this argument, stressing that the case did not involve the change of a party to a contract by means of assignment, but the change of identity of a corporate entity that was party to the contract pursuant to the entity’s lex societatis. In the Tribunal’s view, the Respondent could not be considered to be prejudiced by such a universal succession, also considering that Astaldi had never become involved in the execution of the contract, but had absorbed Dipenta only after work under the contract had already stopped. Under these circumstances, the Tribunal saw no reason to decline jurisdiction over Astaldi, or limit it ratione temporis.1166 Similarly, in Pantechniki v Albania,1167 a case based on the Albania–Greece BIT, the Claimant, a Greek company listed on the Athens Stock Exchange had absorbed C.I. Sarantopoulos S.A., another publicly listed Greek company, in 2002. C.I. Sarantopoulos S.A. had entered into a contract for roadwork with the Albanian Government in 1994. The works were interrupted by riots in 1997; claims for compensation in domestic courts initiated by the original contractor followed and were rejected in 2007. The Claimant initiated ICSID proceedings shortly thereafter. The Sole Arbitrator did not question the Claimant’s right to have access to the Centre under the BIT and accepted, without any further limitations, including of a temporal nature, that he had jurisdiction over the claim brought by Pantechniki as the corporate successor of C.I. Sarantopoulos.1168 Singular succession to the assets forming the investment following a commercial transaction was also found to be no obstacle to an ICSID tribunal’s jurisdiction, as long as all other jurisdictional requirements of Art. 25(1) were met. In Fedax v Venezuela (see paras. 121, 299, 419 supra), a case based on the Netherlands–Venezuela BIT, the Government had issued promissory notes to a third party in 1988. The third party subsequently transferred these promissory notes by way of endorsements to the Dutch Claimant. The promissory notes explicitly allowed their endorsement to subsequent

1164 For further cases involving universal succession, albeit after the initiation of ICSID proceedings, see paras 730, 738 supra. Cf also Quasar de Valores and others v Russia (SCC), Award (20 July 2012) paras 35–40 (assuming jurisdiction over a new claimant that the Tribunal qualified as the universal successor to a previous claimant who had gone insolvent and whose treaty claim had been assigned to its former 99.99 percent shareholder); Chevron v Ecuador II (UNCITRAL), Third Interim Award on Jurisdiction and Admissibility (27 February 2012) paras 4.22–4.27 and ibid, Second Partial Award on Track II (30 August 2018) paras 7.67–7.71 (concerning the effect of a merger on jurisdiction in treatybased arbitration). 1165 LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) paras 3–18. 1166 ibid paras 92–94. 1167 Pantechniki v Albania, Award (30 July 2009) paras 6, 12–27. 1168 ibid para 30.

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holders. The Tribunal, confirming its competence under the BIT, noted that the promissory notes were negotiable instruments and that the Respondent foresaw the possibility that they would be transferred. The investor would change with every endorsement, but the investment itself would remain constant.1169 The transfer of the investment allowed the successor to have access to the Centre based on the host State’s offer to arbitrate in the investment treaty with the successor’s home State.1170 Singular succession to the assets forming the investment following a donation was also accepted. In Pey Casado v Chile, a case based on the Chile–Spain BIT, the first Claimant, Mr. Pey Casado, had donated a major portion of his investment, the shares in two locally incorporated companies, to the second Claimant, the ‘Presidente Allende’ Foundation, many years before the dispute arose.1171 The Tribunal held that the question whether the Foundation qualified as an ‘investor’ depended on both the validity of the assignment of the shares, which was to be determined by the applicable private law, and its effects, which was a matter of public international law, namely of Art. 25(1) of the ICSID Convention.1172 The Tribunal found that the assignment was valid under private law1173 and had the effect that the assignee became an investor.1174 That the assignment of the shares was based on a donation, rather than a commercial transaction as in Fedax (see para. 704 supra), was irrelevant for the Tribunal;1175 similarly, it was inconsequential that the Chile–Spain BIT had not yet entered into force when the assignment occurred, as the assignment did not involve the transfer of a treaty claim as in Mihaly (see paras. 717, 723–725 infra).1176 In any event, the Tribunal stressed that the Foundation itself had to fulfill all jurisdictional requirements under both the ICSID Convention and the BIT, which the Tribunal found it did.1177 In particular, whether the host State had given consent was a matter of whether the offer made under the BIT was addressed to the Foundation ratione personae, ratione materiae, and ratione temporis.1178 The assignment as such played no further role in this context, as the Foundation did not claim that the right to access the Centre was assigned to it, but merely the assets constituting the investment.1179 The Foundation’s claims were also all based on government conduct that occurred after the assignment.1180

1169 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) paras 18–19, 37–40. On the assignment of a loan qualifying the assignee as an investor, see MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 203–208. 1170 Situations involving corporate restructurings undertaken for purposes of nationality planning have to be analyzed in a similar fashion. In such cases, too, ICSID jurisdiction is determined based on the investment treaty applicable with the host State post-restructuring; any treaty that may be applicable prior to the restructuring is not relevant for determining access to the Centre. See also paras 1252–1261 infra. See generally Jorun Baumgartner, Treaty Shopping in International Investment Law (OUP 2016); Björn P Ebert, Forum Shopping in International Investment Law: Forum Planning, Forum Enhancement, and Facilitation of Procedure (Mohr Siebeck 2017); Ed Poulton and others, Corporate Restructuring and Investment Treaty Protections (BIICL/Baker McKenzie 2020). 1171 Pey Casado v Chile, Award (8 May 2008) paras 501–511. 1172 ibid para 517. 1173 ibid paras 525–530. 1174 ibid paras 537–544. 1175 ibid para 542. See also Renée Rose Levy v Peru, Award (26 February 2014) para 146 (endorsing the view in Pey Casado, stating that ‘the monetary value of assignments of rights and endorsements does not affect the status of the initial investment’). 1176 Pey Casado v Chile, Award (8 May 2008) para 543. 1177 ibid paras 544–568. 1178 ibid paras 554–567. 1179 See ibid para 543. 1180 ibid paras 563–567.

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On annulment, the ad hoc Committee agreed with the Tribunal that the share transfer gave the Foundation the status of an investor and the right to access the Centre.1181 (c) Limitations to Succession in Treaty-Based Disputes 707

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Limitations to ICSID jurisdiction in treaty-based cases may, however, arise when changes of ownership (other than through universal succession – see paras. 691, 702– 703 supra) take place after the damaging act has already occurred.1182 In this context, tribunals have found that the assignment of an investment, including in the context of corporate restructurings, while not in itself illegal or improper,1183 could not bestow an assignee with rights arising from adverse acts of the host State that either occurred prior to the assignment of the investment, respectively the restructuring, or after the assignment when the dispute was already foreseeable. In reaching this conclusion, tribunals have relied both on temporal limitations to the host State’s consent under the applicable investment treaty, as well as argument relating to abuse of right or abuse of process.1184 In Phoenix v Czech Republic, a claim under the Czech Republic–Israel BIT, ownership in two Czech companies that were involved in legal disputes before the Czech courts was assigned, under the guise of a share purchase, to the Claimant, a company registered in Israel, but owned by a Czech citizen who was the husband of the owner of the two Czech companies.1185 Since Phoenix’s claim initially covered acts committed before and after the assignment, the Tribunal explained: The Tribunal is limited ratione temporis to judging only those acts and omissions occurring after the date of the investor’s purported investment. The proposition that bilateral investment treaty claims cannot be based on acts and omissions occurring prior to the claimant’s investment results from the nature of the host State’s obligations under a bilateral investment treaty. All such obligations relate to the host State’s conduct regarding the investments of nationals of the other contracting party. Therefore, such obligations cannot be breached by the host State until there is such an investment of a national of the other State.1186

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In addition to its jurisdiction being limited ratione temporis, the Tribunal also found that the assignment of the shares in the two Czech companies to Phoenix constituted an abuse of right.1187 In the Tribunal’s view,

1181 Pey Casado v Chile, Decision on Annulment (18 December 2012) paras 44–48, 169–173. 1182 See also Wehland (n 1119) 567–568. 1183 Expressly in this sense in the context of corporate restructuring, Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 330. 1184 For further discussion, see also Baumgartner (n 1170); Eric De Brabandere, ‘“Good Faith”, “Abuse of Process” and the Initiation of Investment Treaty Claims’ (2012) 3 JIDS 609; Schill and Bray (n 784) 108–114; Jorun Baumgartner, ‘The Significance of the Notion of Dispute and Its Foreseeability in an Investment Claim Involving a Corporate Restructuring’ (2017) 18 JWIT 201; Ebert (n 1170); Sipiorski (n 784) 48 ff; Patrick Dumberry, A Guide to General Principles of Law in International Investment Law (OUP 2020) 275–285. 1185 Phoenix Action v Czech Republic, Award (15 April 2009). 1186 ibid para 68. See also ibid paras 67, 71, 89–92. For similar analyses and further references, see ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) paras 298–333; Levy and Gremcitel v Peru, Award (9 January 2015) para 182. Conversely, there is no standing of the assignor for claims based on conduct that occurred after she assigned the investment to a third party. See GEA Group v Ukraine, Award (31 March 2011) para 118. 1187 Phoenix Action v Czech Republic, Award (15 April 2009) paras 141–144.

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the Claimant’s initiation and pursuit of this arbitration is an abuse of the system of international ICSID investment arbitration. If it were accepted that the Tribunal has jurisdiction to decide Phoenix’s claim, then any pre-existing national dispute could be brought to an ICSID tribunal by a transfer of the national economic interests to a foreign company in an attempt to seek protections under a BIT. . . . It is the duty of the Tribunal not to protect such an abusive manipulation of the system of international investment protection under the ICSID Convention and the BITs.1188

In Mobil v Venezuela, Mobil Corporation, a US company, had invested in the petroleum sector in Venezuela in the 1990s.1189 In 2004, Venezuela increased certain taxes and royalties, and in 2007 nationalized Mobil’s investments. In 2005, Mobil Corporation inserted a Dutch company, Venezuela Holdings, into its ownership structure in order to obtain protection under the Netherlands Venezuela BIT. The Respondent characterized this restructuring as an ‘abuse of the corporate form and blatant treaty-shopping.’1190 Finding that abuse of right constituted a general principle of law,1191 the Mobil tribunal considered that corporate restructuring was not per se abusive; the decisive factor to distinguish ‘legitimate corporate planning’ and ‘abuse of right’ concerned timing. Restructuring for the purpose of gaining access to ICSID arbitration under the Netherlands–Venezuela BIT to protect against future disputes ‘was a perfectly legitimate goal.’1192 However,

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[w]ith respect to pre-existing disputes, the situation is different and the Tribunal considers that to restructure investments only in order to gain jurisdiction under a BIT for such disputes would constitute, to take the words of the Phoenix Tribunal, ‘an abusive manipulation of the system of international investment protection under the ICSID Convention and the BITs’.1193

The Tribunal therefore concluded that it had jurisdiction over the claims that came into existence after the restructuring (those concerning nationalization of the investment), but declined jurisdiction over the claims that had already existed prior to the restructuring (those concerning tax and royalty increases).1194 Pac Rim v El Salvador, a dispute under the Dominican Republic–Central America Free Trade Agreement (DR–CAFTA), also involved corporate restructuring for the purpose of gaining access to ICSID. The Tribunal, adopting the approach in Mobil, also focused on the issue of timing to determine whether a restructuring constituted legitimate corporate planning or an abuse of right.1195 However, the Pac Rim tribunal

1188 ibid para 144. 1189 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010). See also Stephen Jagusch, Anthony Sinclair and Manthi Wickramasooriya, ‘Restructuring Investments to Achieve Investment Treaty Protection’ in Kinnear and others (n 255) 175. 1190 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 27. 1191 ibid paras 169–184. 1192 ibid para 204. 1193 ibid para 205 (quoting Phoenix Action v Czech Republic, Award (15 April 2009) para 144). See also Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013) para 146; ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) paras 412–423; Gold Reserve v Venezuela (AF), Award (22 September 2014) para 270. 1194 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 206. 1195 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 2.45.

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went a step further in clarifying exactly when a change of nationality will become an abuse of process. The Tribunal explained: [T]he dividing-line occurs when the relevant party can see an actual dispute or can foresee a specific future dispute as a very high probability and not merely as a possible controversy. In the Tribunal’s view, before that dividing-line is reached, there will be ordinarily no abuse of process; but after that dividing-line is passed, there ordinarily will be. The answer in each case will, however, depend upon its particular facts and circumstances, as in this case.1196

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The Tribunal in Pac Rim also clarified which issues concerned a tribunal’s jurisdiction ratione temporis and which issues went to an abuse of right. With regard to jurisdiction ratione temporis, the relevant timeframe ‘is the date on which the measure, act, or fact that constitutes the alleged breach took place,’1197 and, unlike cases of abuse of process, ‘[t]here is no reference to a claimant’s knowledge or awareness of an alleged breach or present or future dispute.’1198 As for abuse of right, the timeframe ‘must necessarily be earlier,’1199 and hinges on the claimant’s knowledge and intentions: ‘abuse of process must preclude unacceptable manipulations by a claimant acting in bad faith and fully aware of an existing or future dispute.’1200 In sum, although it is neither illegal nor improper for an investor of one nationality to establish a new entity in a jurisdiction perceived to provide a beneficial regulatory and legal environment, including the availability of an investment treaty, and assign to it the benefits of a foreign investment,1201 such transactions are subject to limitations if they are used strategically in order to gain access to ICSID’s jurisdiction where none would exist otherwise, or to expand the substantive protection under an investment treaty. Limits stem both from the scope of application ratione temporis of the treaty that applies to the successor, respectively post-restructuring, and under the general principle of law prohibiting abuse of right and abuse of process.1202 Independently of that, singular succession, whether in the form of an assignment of the investment or through a corporate restructuring, does not allow the cirumvention of the other jurisdictional requirements under Art. 25(1) of the ICSID Convention. (d) Assignment of Treaty Claims Singular succession can involve not only the assignment of the investment, or take the form of a corporate restructuring, it can also have as its object an existing claim against the host State for the breach of an investment treaty, which has already occurred, and in relation to which the predecessor may or may not have already accepted the host State’s consent expressed in the BIT with the predecessor’s home State.1203 Indeed, an 1196 ibid para 2.99. 1197 ibid para 2.102. 1198 ibid. 1199 ibid para 2.107. 1200 ibid para 2.100. For further cases confirming this distinction between jurisdiction ratione temporis and abuse of right or abuse of process, see Lao Holdings v Laos (AF), Decision on Jurisdiction (21 February 2014) para 76; Levy and Gremcitel v Peru, Award (9 January 2015) para 182; Philip Morris v Australia (UNCITRAL), Award on Jurisdiction and Admissibility (17 December 2015) para 527. 1201 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 330. 1202 For further support, see Gold Reserve v Venezuela (AF), Award (22 September 2014) para 270. 1203 For general discussion, see Nelson Goh, ‘The Assignment of Investment Treaty Claims: Mapping the Principles’ (2019) 10 JIDS 23; Wehland (n 1119) 573–575; William L Kirtley, ‘The Transfer of Treaty Claims and Treaty-Shopping in Investor–State Disputes’ (2009) 10 JWIT 434.

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investor may, for a variety of reasons, wish to transfer a ripe claim against the host State to a third party with the objective that the third party pursues the claim against the host State. In these situations, the question arises whether the successor can have access to the Centre to vindicate the assigned claim. In ICSID practice, it has occasionally been doubted that treaty claims could be assigned at all. The Tribunal in Mihaly v Sri Lanka, in a case brought under the Sri Lanka–United States BIT, for example, considered that

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[a] claim under the ICSID Convention with its carefully structured system is not a readily assignable chose in action as shares in the stock-exchange market or other types of negotiable instruments, such as promissory notes or letters of credit.1204

It is doubtful, however, that any rule exists under international law that generally would exclude the assignability of treaty claims.1205 In particular, there is no rule in international law that would require continuous nationality from the time of the breach of the treaty until a decision is handed down on a claim in a proceeding before the Centre (see paras. 49–54 supra; paras. 733–743, 1161, 1245–1248, 1418 infra). Instead, as stated by the Tribunal in Daimler v Argentina, a dispute based on the Argentina– Germany BIT, ‘[t]he better view would seem to be that ICSID claims are at least in principle separable from their underlying investments,’1206 and, as a consequence, can either remain with the assignor when an investment is assigned to a third party or can also be assigned to a third party independently of the underlying investment. The assignment of treaty claims has been accepted in a number of ICSID arbitrations. In Renée Rose Levy v Peru, the Claimant, a French national, had been assigned in 2005, following a donation from her father, also a French national, shares in a holding company, which in turn held shares in Banco Nuevo Mundo (BNM).1207 BNM had been subject to various measures of the Peruvian banking supervisory authority starting in the late 1990s, which eventually led to BNM’s liquidation in 2001. In response to the objection that the Tribunal lacked jurisdiction because Ms. Levy had acquired the investment several years after the events that allegedly constituted a breach of the France–Peru BIT, the Tribunal held that 1204 Mihaly v Sri Lanka, Award (15 March 2002) para 25. Voices in the literature have built on this statement and concluded that treaty claims could not be assigned. See Wehland (n 1119) 574–575; Stephen Jagusch and Anthony Sinclair, ‘The Impact of Third Parties on International Arbitration – Issues of Assignment’ in Loukas A Mistelis and Julian DM Lew (eds), Pervasive Problems in International Arbitration (Wolters Kluwer 2006) 291, 296; James Crawford, Brownlie’s Principles of Public International Law (9th edn, OUP 2019) 678. 1205 In this sense also Goh (n 1203) 35. 1206 Daimler v Argentina, Award (22 August 2012) para 145; see also ibid paras 136–138. In the same direction, El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 135 (stating that ‘the right to demand compensation for the injury suffered at the hand of the State remains – unless, of course, it can be shown that it was sold with the investment’); Wintershall v Argentina, Award (8 December 2008) para 56; Gemplus v Mexico (AF), Award (16 June 2010) paras 5-28, 5-29, 5-33. Also the Award in Loewen can be read as, in principle, accepting the assignability of treaty claims, but for the fact that the Tribunal considered the specific assignment in the case at hand as circumventing specific jurisdictional requirements under the NAFTA. See Loewen v United States (AF), Award (26 June 2003) paras 220, 237–238. The issue of whether treaty rights could be assigned was also raised in other cases, but ultimately did not become relevant. See eg Phoenix Action v Czech Republic, Award (15 April 2009) paras 4–8; GEA Group v Ukraine, Award (31 March 2011) para 120. 1207 For the facts of the case, see Levy and Gremcitel v Peru, Award (9 January 2015) paras 31–117.

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schreuer’s commentary on the icsid convention shares may be assigned at any time with no effect on the rights of the assignee. The transmission of legal rights and endorsement of the shares could occur without affecting protection of the investment under the [BIT], provided that the other requirements of that treaty were met.1208

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The Tribunal also noted that the assignment was not abusive and did not involve ‘an attempt to “manufacture” ICSID jurisdiction.’1209 Indeed, not even a change of nationality was involved as both the assignor and the assignee were French nationals. Consequently, it was also the same investment treaty that applied both before and after the assignment.1210 There are, however, also cases involving assignments of treaty claims between entities from different jurisdictions. In EDF v Argentina, three French companies had participated successfully in a bid for a local utilities company in the host State.1211 One of them had later assigned its participation to a subsidiary incorporated in Luxembourg. This company, which was also a Claimant in the arbitration, as well as another Claimant, assigned their participation and claims under the treaty to EDF International (EDFI), a French company, in 2004, that is, after the ICSID arbitration had commenced. In 2005, EDFI then sold its investment to a third party, without, however, assigning its treaty claims.1212 The Tribunal accepted both that the 2004 assignment transferred all treaty claims to EDFI and that, despite the 2005 assignment of its investment to a third party, EDFI retained the rights under the treaty that it pursued before the Centre. In respect of the 2004 assignment, the Tribunal stated: At present, French investors again own all of the shares considered by the Tribunal in its findings of liability and quantum, including any which for a time were owned by León. Crédit Lyonnais (incorporated in France) was the initial owner of the relevant shares, which were subsequently transferred to León, its wholly-owned subsidiary. Ultimately those shares were acquired by EDFI, at which point all of León’s rights to the ICSID claim were ceded to EDFI, a French investor which now possesses all relevant rights.1213

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There are, however, certain limitations for accessing the Centre in cases involving the assignment of treaty claims. Thus, tribunals have looked with disfavor upon situations in which parties sought to transfer existing treaty claims, that is, actual claims for the alleged breach of an investment treaty based on past conduct of the host State, from an entity that did not fulfill the Convention’s nationality requirements to another that did. An example is Mihaly v Sri Lanka, a case brought on the basis of the Sri Lanka–United States BIT. The case concerned, in the words of the Respondent,

1208 ibid para 145. 1209 ibid para 154. 1210 For a similar situation where the assignment of treaty claims between entities of the same nationality was involved, see Ryan and others v Poland (AF), Award (24 November 2015) paras 195–208. Cf also EuroGas and Belmont v Slovakia, Award (18 August 2017) paras 421–424 (which can be read as implying the possibility to assign treaty claims). 1211 See EDF v Argentina, Award (11 June 2012). 1212 See ibid paras 171–175. 1213 ibid para 886. See also ibid para 1099 (stating that the treaty rights had been maintained by the Claimants despite the 2005 arrangements). See also the discussion on these points by the ad hoc Committee in the case; EDF v Argentina, Decision on Annulment (5 February 2016) paras 201–217 (also implying that the assignment of treaty claims across jurisdictions was possible; see ibid para 216).

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a claim by a Canadian Company, allegedly assigned to this US Claimant but without Sri Lanka’s consent, for reimbursement of expenditures made pursuing a possible investment in a proposed power project in Sri Lanka that never happened.1214

The Tribunal noted that the investor behind the project was a Canadian corporation, yet the designated Claimant was a US corporation to which the former had purported to assign its claim. In the alternative, the Claimant said there was a partnership agreement between it and the Canadian company. The Tribunal did not find any evidence of a legal partnership. The Tribunal held that the Claimant could not bring a claim in respect of a right allegedly assigned to it by its Canadian affiliate. To allow such an assignment to operate in favor of creating ICSID jurisdiction where it would not otherwise exist would defeat the object and purpose of the Convention and create rights and obligations for nonConvention States or their nationals. As the Tribunal explained:

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It follows that as neither Canada nor Mihaly (Canada) could bring any claim under the ICSID Convention, whatever rights Mihaly (Canada) had or did not have against Sri Lanka could not have been improved by the process of assignment with or without, and especially without, the express consent of Sri Lanka, on the ground that nemo dat quod non habet or nemo potiorem potest transfere quam ipse habet. That is, no one could transfer a better title than what he really has. Thus, if Mihaly (Canada) had a claim which was procedurally defective against Sri Lanka before ICSID because of Mihaly (Canada)’s inability to invoke the ICSID Convention, Canada not being a Party thereto, this defect could not be perfected vis-à-vis ICSID by its assignment to Mihaly (USA). To allow such an assignment to operate in favour of Mihaly (Canada) would defeat the object and purpose of the ICSID Convention and the sanctity of the privity of international agreements not intended to create rights and obligations for non-Parties. Accordingly, a Canadian claim which was not recoverable, nor compensable or indeed capable of being invoked before ICSID could not have been admissible or able to be entertained under the guise of its assignment to the US Claimant.1215

That the assignment of a treaty claim did not give the assignee any more rights than the assignor could transfer was also confirmed in African Holding v DR Congo.1216 In the case, SAFRICAS, a locally registered but US-controlled company, had assigned its claims to African Holding, a company equally incorporated in the United States. After the assignment, African Holding started ICSID arbitration proceedings against the DR Congo, arguing that it had succeeded to all rights arising from the investment. The Tribunal agreed that SAFRICAS had effectively assigned all its rights to African Holding, including the right to go to arbitration under the DR Congo–United States BIT. Distinguishing the case from both Mihaly (see paras. 717, 723–725 supra) and Banro (see para. 692 supra), the Tribunal noted that, both before and after the assignment, the United States had been the home State of the investors. Consequently, African Holding could, following the assignment, have access to

1214 Mihaly v Sri Lanka, Award (15 March 2002) para 11. 1215 ibid para 24. 1216 African Holding v DR Congo, Award (29 July 2008).

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ICSID arbitration, whereas jurisdiction no longer existed in relation to SAFRICAS.1217 Eventually, however, the Tribunal declined jurisdiction over African Holding’s claim, because it found, in applying the BIT, which required that ownership or control had to exist before the events leading to the dispute, that the dispute had already existed when US nationals acquired SAFRICAS from its Belgian owners.1218 727

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(e) Concluding Remarks As the above cases show, tribunals have been flexible in accepting party status of successors in interest in cases where jurisdiction was based on the acceptance of a host State’s offer in domestic legislation or an investment treaty to submit to the jurisdiction of the Centre, provided all other requirements of Art. 25(1) of the Convention were fulfilled. The analysis in such cases differs, however, from cases of succession to investor–State contracts containing an ICSID clause. In case of successions to the investment in disputes based on treaty or legislation, the question will regularly not be whether the successor is bound by, or can rely on, an agreement to arbitrate that was perfected by the predecessor accepting the host State’s offer, but whether the successor is itself in a position to accept an offer to submit to ICSID jurisdiction, which is addressed to it by the host State. The situation may only be different where a claim against the host State, and not the underlying investment, has been assigned after the predecessor has already accepted the host State’s offer. In such a situation, the issue will be to determine whether the claim can be assigned at all and whether there are any limitations to the successor’s claim arising out of limitations that already existed for the predecessor. In treaty-based cases, the determination of whether the successor to the investment can have access to the Centre is slightly more complex than in cases based on domestic legislation, because it is not only relevant whether the claimant is foreign at all (of whatever nationality), but whether its nationality is such that a specific investment treaty, which contains the host State’s consent in relation to the successor, is applicable. Furthermore, because the protection offered by investment treaties, including access to investor–State dispute settlement, is tied to the investor holding a specific nationality at the time of consent, changes in ownership of the investment, whether through corporate restructuring or asset reorganization, may be used strategically in order to bring an investment under the protection of an investment treaty that is more favorable than under the treaty that applied prior to the ownership reorganization. In this context, ICSID tribunals have emphasized limitations to opportunistic structurings after a dispute has already arisen or was already foreseeable, stemming both from the scope of application ratione temporis of the investment treaty with the successor’s home State and from the general principle of law concerning the prohibition of abuse of right and abuse of process. Tribunals have also stressed that assignments of treaty claims against the host State cannot be used to circumvent jurisdictional strictures that prevented or limited a claim by the predecessor. Opportunistic assignments and restructurings designed to bring an existing dispute within the scope of ICSID’s jurisdiction will not be accepted. 1217 ibid paras 57–73, 101–104.

1218 ibid paras 108–121.

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(iii) Succession after the Institution of Proceedings Whereas the timing of changes in ownership of the investment, through assignments of the investment or corporate restructuring, and of assignments of claims plays an important role for determining whether there is identity between the disputing and consenting parties and whether the dispute can be resolved before the Centre, changes in the ownership of the investment, with or without a change of nationality, as well as assignments of claims that take place after the registration of the request for conciliation or arbitration, are immaterial for ICSID jurisdiction. The reason for this is that the time of the registration of the request is the relevant point in time for determining whether the jurisdiction of the Centre exists (see also paras. 46–48 supra). The jurisprudence of ICSID tribunals is largely consistent on this point also in the context of succession.1219 In Vivendi v Argentina, one of the original Claimants had been Compagnie Générale des Eaux (CGE), which subsequently changed its name to Vivendi S.A. during the course of the ICSID proceedings. Vivendi S.A. then merged with several other companies to form Vivendi Universal. Vivendi Universal continued to hold the majority stake in the other named Claimant, Compañía de Aguas del Aconquija (CAA). The Tribunal rejected Argentina’s argument that there was a change of corporate ownership of CAA, and confirmed Vivendi Universal’s standing. The Tribunal also accepted that Vivendi Universal was the universal successor to CGE and as such a proper Claimant.1220 Universal succession following the death of a claimant after the initiation of ICSID proceedings was considered in Siag v Egypt.1221 Although no attempt was made to substitute one of the Claimants, the deceased Mrs. Vecchi, by her heirs, the Tribunal found

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that Mrs Vecchi’s claim under the BIT survived her death, with the result that any sums payable to her are now payable to her estate. The ultimate destination of those funds would be irrelevant if Mrs Vecchi were still alive and it is similarly irrelevant now that she has passed away. The doctrine of continuous nationality does not apply in this case. No doubt the estate will distribute the funds as it sees fit and in accordance with any applicable domestic laws.1222

A different position was taken by the Tribunal in Marfin and others v Cyprus.1223 When two of the Claimants passed away after proceedings had been initiated, the Claimants sought to continue the claims for the benefit of the successors, without requesting the replacement of the deceased by their heirs. The Tribunal dismissed the claims of the deceased, finding that they did not qualify either as ‘investors’ in the sense of the Cyprus–Greece BIT, or as ‘nationals of another contracting party’ under Art. 25(2)(a) of the ICSID Convention. This decision is clearly not in line with what the

1219 See also Burgstaller and Zarowna (n 1115) 240–248. The same solution is also adopted in non-ICSID proceedings, see EnCana v Ecuador (UNCITRAL), Award (3 February 2006) paras 123–132; National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) paras 114–122. 1220 Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 82, 85, 86. 1221 Siag v Egypt, Award (1 June 2009) paras 491–503. 1222 ibid para 503. 1223 Marfin and others v Cyprus, Award (26 July 2018) paras 613–615.

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Convention considers relevant in terms of the date on which to determine jurisdiction and the nationality of natural persons (see paras. 44–54 supra; paras. 1161–1170 infra). Transfers of the investment to third parties after the institution of the proceedings have also been found to be of no influence on ICSID jurisdiction. In El Paso v Argentina, the Claimant sold its shares in the local companies shortly after the institution of proceedings.1224 Argentina argued that, as a consequence, El Paso had lost its jus standi.1225 The Tribunal found that an examination of the BIT, of the ICSID Convention, and of the case law revealed that there was no rule of continuous ownership of the investment. The decisive point was that by the time the request for arbitration was registered, El Paso still owned the investment.1226 Similarly, in Enron v Argentina, long after the institution of the proceedings, the Claimants sold most of their holding in the local company TGS to another investor, together with a right to a further purchase of the balance, thus effectively withdrawing from their investment.1227 The Tribunal held that jurisdiction was determined by reference to the date on which the proceedings were instituted and was not altered by later transactions. It also noted that the sales transaction expressly safeguarded the Claimants’ rights in the litigation.1228 The Tribunal said: [T]he Tribunal wishes to recall that the disposal of Enron’s participation in TGS does not affect its jurisdiction to decide in this case. . . . ICSID jurisdiction is determined on the date the arbitration is instituted and subsequent changes in their ownership of TGS does not affect jurisdiction.1229

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In CSOB v Slovakia, the Claimant had assigned contractual claims against the Respondent that arose out of an agreement relating to the financial reorganization of CSOB to its home State; breach of this agreement was also the subject-matter of the dispute under the Czech–Slovak BIT.1230 The Slovak Republic argued that these assignments had transformed the Czech Republic, rather than CSOB, into the real party in interest. Since the Czech Republic could not step into the investor’s shoes in ICSID arbitration (see paras. 574–588 supra), the Respondent moved to have the claim dismissed. The Tribunal noted that the assignments had taken place after the registration of the request for arbitration, and therefore could not affect its jurisdiction.1231 The Tribunal added that even if it were to accept the contention that the Czech Republic had become the real party in interest, it would not follow that there was no jurisdiction. It said: This conclusion is compelled by the consideration that absence of beneficial ownership by a claimant in a claim or the transfer of the economic risk in the outcome of a dispute should not and has not been deemed to affect the standing of a claimant in an ICSID

1224 El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 130. 1225 ibid para 117. 1226 ibid paras 135–136. See also Hamester v Ghana, Award (18 June 2010) para 95 (affirming the conclusion in El Paso that a post-initiation transfer of shares did not affect a tribunal’s jurisdiction); Electrabel v Hungary, Award (25 November 2015) paras 6, 63. 1227 Enron v Argentina, Award (22 May 2007) para 192. 1228 ibid paras 196–198. 1229 ibid para 396. 1230 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 28–32. 1231 ibid para 31.

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proceeding, regardless whether or not the beneficial owner is a State Party or a private party.1232

In addition, the Claimant had not been deprived of an interest in the outcome of the case, since the assignment was to become effective only after the conclusion of the ICSID proceedings and the assignor remained entitled to a portion of the amount received by the assignee.1233 In Wintershall v Argentina, the Claimant notified the Centre, after having initiated its claims, of a ‘spin-off,’ which involved a corporate restructuring of all of the Claimant’s assets and liabilities to a new legal entity, which included an assignment of the Claimant’s rights and liabilities in the pending ICSID claim itself.1234 The claimant entity, however, continued to exist, therefore resulting in a partial, rather than a universal, succession.1235 The Respondent objected to the Claimant’s request to replace the original Claimant with the new entity.1236 The Tribunal accepted that a replacement of the Claimant with a new entity after the institution of the proceeding could only take place with the Respondent’s consent; however, since both Parties agreed, the Tribunal agreed to add the new entity as an additional Claimant.1237 In Teinver v Argentina, the Tribunal was faced with a third-party funding agreement into which the Claimants had entered after the institution of the proceeding.1238 The Tribunal confirmed that jurisdiction had to be determined when proceedings were instituted and that subsequent transfers of the rights at stake had no effect on jurisdiction.1239 Furthermore, the Tribunal noted that the assignment only concerned proceeds of any award, without the assignee having a right to receive payment directly from the Respondent.1240 In the resubmitted case of Pey Casado v Chile, the effect of an assignment of the investment and the treaty claim from the first Claimant to his daughter was at issue, which took place after the original award was partially annulled, but before the resubmitted case was initiated.1241 The Tribunal affirmed that ‘a new claimant party cannot simply freeload on the back of the jurisdictional claims of others, but must establish jurisdiction in his or her own right under the usual criteria.’1242 But it qualified the

1232 1234 1235 1237 1238 1239 1240

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ibid para 32. 1233 ibid. Wintershall v Argentina, Award (8 December 2008) paras 31, 45–60. See ibid para 53. 1236 ibid paras 48, 60. ibid paras 59–60. Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 255–259 and ibid, Award (21 July 2017) paras 234–242. Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 255–259. Teinver v Argentina, Award (21 July 2017) para 240. By contrast, in cases where third-party funding agreements are entered into before the initiation of the claim, it will depend on the precise content of the arrangements whether an assignment of the underlying claim is involved and whether ICSID’s jurisdiction exists in relation to claims by the funded party or the funder. In practice, third-party funding agreements regularly do not involve an assignment of the claim, but are limited to the funder’s entitlement to a percentage of the proceeds. For detailed discussion of third-party funding in international commercial and investment arbitration, see International Council of Commercial Arbitration (ICCA), ‘Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration’ (ICCA Reports No 4) (ICCA 2018). Pey Casado v Chile, Resubmitted Case: Award (13 September 2016) paras 43–48, 125–130, 180–188. ibid para 187.

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resubmitted case as ‘a continuation of the original arbitration, such that the title and case reference remain unchanged, as do the Parties to the proceedings.’1243 Consequently, the Tribunal considered the assignment to have taken place after the registration of the request, and therefore without effect on its own competence. It added: Such compensation as may be awarded pursuant to the partial annulment will accordingly be awarded to these named Claimants, and will be in respect of the injury suffered by these Claimants as the result of the breaches identified, as res judicata, in the First Award. . . . Should the Tribunal decide that the compensation is to take a monetary form, the payment over of the moneys due to each of the two entitled Claimants will be a matter for internal arrangement between them in which their designated counsel will play their duly appointed role as counsel to Ms Pey Grebe as well.1244

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There is one outlier decision that considered changes to the way an investment was held after the initiation of treaty-based arbitration as relevant. In Loewen v United States,1245 an ICSID Additional Facility proceeding based on the NAFTA, a reorganization took place when the Claimant filed for bankruptcy. The Claimant ceased to exist as a Canadian entity and became a US corporation. In order to satisfy the diversity of nationality requirement under the NAFTA, the Claimant assigned its interest in the NAFTA claim to a specifically created Canadian entity, Nafcanco. The Tribunal did not accept this restructuring: By the terms of the assignment, the only item being assigned was this NAFTA claim. All of the assets and business of [claimant] have been reorganized under the mantle of an American corporation. All of the benefits of any award would clearly inure to the American corporation. Such a naked entity as Nafcanco, even with its catchy name, cannot qualify as a continuing national for the purposes of this proceeding.1246

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In order to reach this result, the Tribunal applied a version of the continuous nationality rule that would require continuity of nationality up to the end of the arbitration proceeding.1247 The existence of such a rule is highly doubtful, and the Award in Loewen has been severely criticized on this as well as on other grounds and generally not been followed by other tribunals.1248 Whatever its merits under the NAFTA, it is certain that the ICSID Convention does not require that all of its jurisdictional requirements need to be present until the date an award is rendered.1249

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ibid para 188. 1244 ibid. Loewen v United States (AF), Award (26 June 2003). ibid para 237. 1247 ibid paras 225, 229, 230. For critical discussion, see eg Jan Paulsson, ‘Continuous Nationality in Loewen’ (2004) 20 Arb Int’l 213; Gaillard (n 481) 788; Maurice Mendelson, ‘Runaway Train: The “Continuous Nationality” Rule from the Panavezys-Suldutiskis Railway Case to Loewen’ in Weiler (n 18) 97; Noah Rubins, ‘Loewen v United States: The Burial of an Investor–State Arbitration Claim’ (2005) 21 Arb Int’l 1; Andrea K Bjorklund, ‘The Emerging Civilization of Investment Arbitration’ (2009) 113 Penn State LR 1269, 1279–1280; Piero Bernardini, ‘Continuous Nationality Rule in Investor–State Arbitration’ in Kinnear and others (n 255) 163; Goh (n 1203) 28. The Award in Loewen has also been criticized in arbitral jurisprudence. See eg Siag v Egypt, Award (1 June 2009) paras 497–498; Daimler v Argentina, Award (22 August 2012) para 143. 1249 See also Schreuer (n 50) 266–270. Somewhat different approaches are taken by the Tribunals in Marfin and others v Cyprus, Award (26 July 2018) paras 613–615 and Azpetrol v Azerbaijan, Award (8 September 2009) para 105.

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It follows from this consistent line of cases that any change in the ownership of the investment that forms the basis of a claim, whether effectuated through a disposal or transfer of assets, a corporate restructuring, or another form of (singular or universal) succession, or a change in the entitlement to the claim itself, which takes place after the institution of proceedings does not affect the standing of the original Claimant. Changes to party status after that point in time are, in principle, only possible with the other party’s consent; in such a case, it will also be necessary that the successor fulfills the other jurisdictional requirements of Art. 25(1) of the Convention, in particular those concerning nationality.

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d) Insolvency Not only singular or universal succession can have an impact on the determination of the right party in a proceeding before the Centre; the insolvency of an entity that has consented to, or is the addressee of, an offer by the host State to settle disputes before the Centre can also be relevant in this context.1250 The practice in proceedings before the Centre is rather limited.1251 It emerges, however, that the effects an insolvency will depend chiefly on the domestic insolvency law that applies to the insolvent entity (see Art. 42, paras. 26–28). In two arbitration proceedings, German companies placed under insolvency administration were involved as claimants. In line with German insolvency law, the insolvent companies were not named as parties, but the insolvency administrator. In Inmaris Perestroika v Ukraine, two of the German companies involved, IWC and IWS, had become insolvent. The Tribunal noted that the respective insolvency administrator formally appeared as the Claimant in the proceedings on behalf of the insolvent companies.1252 However, in order to determine the jurisdiction of the Centre, such as whether an investment had been made, the relevant person was not the insolvency administrator, but the entity on whose behalf the administrator was acting in the proceedings. Similarly, in Herzig v Turkmenistan, the named Claimant is the insolvency administrator of an insolvent German company that is alleged to have made an investment in Turkmenistan.1253 By contrast, under Italian insolvency law, the insolvent company itself seems to remain the proper party to any legal proceedings. In Eskosol v Italy, a local Italian company who owned the investment was placed under receivership and brought an ICSID claim relying on the ECT.1254 An Italian bankruptcy receiver controlled Eskosol on the date of the commencement of the proceedings, but Eskosol SpA remained the named Claimant in the case.

1250 For the interplay between insolvency and international arbitration more generally, see Klaus Sachs, ‘Insolvency Proceedings and International Arbitration’ in (2013) 1 Collected Courses of the International Academy for Arbitration Law 1. 1251 The effect liquidation of a company would have on the jurisdiction of the Centre was left open in Rumeli v Kazakhstan, Award (29 June 2008) para 327. See also PNB Banka v Latvia, Decision on Disqualification (16 June 2020) paras 142, 166 (concerning the effect of insolvency on representation). 1252 Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 31, fns 7, 10. 1253 Herzig v Turkmenistan, Decision on Security for Costs (27 January 2020) para 1. 1254 Eskosol v Italy, Decision under Rule 41(5) (20 March 2017).

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4. Subrogation 748

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A special case of succession may arise where the investor has received an indemnity under an insurance claim. Most industrialized countries and some developing countries operate investment insurance schemes protecting their nationals against political risks, such as expropriation, currency exchange restrictions, and civil strife.1255 In addition, there are multilateral investment programmes, such as the Multilateral Investment Guarantee Agency (MIGA)1256 and the Inter-Arab Investment Guarantee Corporation.1257 Besides, private companies are also offering political risk insurance.1258 Depending on the terms of these national and international investment insurance systems, the insured investor’s claim against the host State may be assigned to the insurer upon payment of the claim arising from the insurance. This process is called subrogation and is an accepted principle of insurance law in general. Upon assignment, the insurer succeeds to all the rights of the beneficiary who has received compensation under the insurance contract. This result is achieved either under the terms of the insurance contract or by virtue of the operation of the law that applies to the insurance contract. In order to function in the context of foreign investment disputes, it is important that the host State agrees to the subrogation of the insurer, either in an agreement with the investor or with the insurer. For this purpose, many BITs contain subrogation clauses.1259 If the insurer succeeds to all of the investor’s rights upon compensating him or her, the question arises whether the succession also extends to access to dispute settlement before the Centre. In other words, can a State, a State agency administering the investment program, an international investment insurance organization, or a private insurer, become party to ICSID proceedings after having compensated the investor by virtue of the assignment of the (contract or treaty) claim of the investor against the host State? This requires that the insurer itself fulfills the jurisdictional requirements of Art. 25(1), in particular that it qualifies as a national of another Contracting State, has an investment in the host State, and that both the insurer and the host State have consented to the jurisdiction of the Centre.

1255 For overviews, see Michael D Nolan, Frédéric G Sourgens and Mark L Rockefeller, ‘Political Risk Insurance and Guarantees from Public Providers’ in Mathias Audit and Stephan W Schill (eds), Transnational Law of Public Contracts (Bruylant 2016) 737; Kathryn Gordon, ‘Investment Guarantees and Political Risk Insurance: Institutions, Incentives and Development’ in OECD Investment Policy Perspectives (OECD 2008) 91. 1256 See Convention Establishing the Multilateral Investment Guarantee Agency (adopted 11 October 1985, entered into force 12 April 1988) 1508 UNTS 99, (1985) 24 ILM 1598, (1986) 1 ICSID Rev 145 (MIGA Convention). For an overview and further references, see Stephan W Schill, ‘Multilateral Investment Guarantee Agency (MIGA)’ in Rüdiger Wolfrum (ed), Max Planck Encyclopedia of Public International Law vol VII (OUP 2012) 410. 1257 An English translation of the Convention Establishing the Arab Investment and Export Credit Guarantee Corporation (opened for signature May 1971, entered into force April 1974) is available via accessed 10 January 2021. For an overview and analysis, see Nathalia Najjar, ‘The Inter Arab Investment Guarantee Corporation and Its Impact on Public Contracting’ in Audit and Schill (n 1255) 773. 1258 Gordon (n 1255) 103–104. 1259 See Dolzer and Stevens (n 331) 156–160; Parra (n 31) 342. See also MIGA Convention (n 1256) Art. 18.

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For investment insurance programs administered by governments or international organizations, the answer is clearly no.1260 These entities cannot have party status in ICSID proceedings for three main reasons. First, the Convention provides for the settlement of disputes between States and nationals of other States. The clear wording of Art. 25(1) cannot be reinterpreted to cover disputes involving States, State agencies, or international organizations on the investor’s side, even if the host State has agreed to the subrogation. Second, one of the Convention’s objectives is to depoliticize disputes. This objective is expressed most clearly in Art. 27 of the Convention, which prohibits diplomatic protection in favor of the investor.1261 This purpose would be defeated if the investor’s home State were to be given standing before the Centre. Finally, the Convention’s travaux préparatoires indicate a conscious decision to exclude States, State agencies, or international organizations from access to ICSID proceedings on the investor’s side (see also para. 574 supra). The question of whether an investor’s State of nationality should be given standing before the Centre after subrogation was discussed extensively in the course of the Convention’s preparation. A provision to this effect was deleted at the last stage of the drafting and, consequently, does not appear in the Convention (History, Vol. I, p. 14). Therefore, the history of these discussions may be dealt with rather briefly here.1262 The Preliminary Draft contained a clause after the words ‘a national of another Contracting State’ which added ‘(or that State when subrogated to the rights of its national)’ (ibid., p. 130). The First Draft contained a more elaborate clause that would have included subrogation by a ‘public international institution’ (ibid., pp. 130–132). After much debate and controversy, the Revised Draft offered an even more complicated formula for subrogation, requiring the host State’s separate consent to the substitution of the investor’s home State for the investor and allowing the withdrawal of such consent in principle (ibid., p. 132). After more lively debate, this draft was put before the Executive Directors of the World Bank. There, Mr. Broches explained that the deletion of the clause would only make it impossible for the investor’s national State to appear before the Centre, but would not affect the question of subrogation per se. Moreover, it would not prevent the indemnifying State from requiring that the investor pursue his remedies under the Convention even after he or she had been indemnified (History, Vol. II, p. 1017). Thereupon, a vote was taken. This revealed a large majority in favor of deleting the clause that would have allowed States to succeed in their nationals’ procedural rights upon their indemnification under an investment insurance scheme (ibid., p. 1018). All of this shows that the Convention’s silence on this point, far 1260 See also William E Albrecht, ‘Some Legal Questions Concerning the Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1968) 12 St Louis Univ LJ 679, 683; Amerasinghe (n 96) 194–196; Aron Broches, ‘La Convention et l’assurance-investissement: Le problème dit de la subrogation’ in Centre de Recherche sur le Droit des Marchés et des Investissements internationaux de la Faculté de Droit (n 155) 161, 166; Delaume, ‘Le Centre’ (n 163) 798; Nigel S Rodley, ‘Some Aspects of the World Bank Convention on the Settlement of Investment Disputes’ (1966) 4 Canadian YBIL 43, 53–54; Nassib G Ziadé, ‘ICSID Clauses in the Subrogation Context’ (1990) 7(2) News from ICSID 4. 1261 See also Ibrahim FI Shihata, ‘Towards a Greater Depoliticization of Investment Disputes: The Roles of ICSID and MIGA’ (1986) 1 ICSID Rev 1. 1262 For detailed accounts of subrogation in the Convention’s drafting history, see Amerasinghe (n 878) 241–242; Broches (n 1260) 162–166; Dolzer and Stevens (n 331) 161–162; Masood (n 122) 134–136.

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from implying procedural standing for a State in case of subrogation, is actually the result of a conscious decision to deny party status to the national’s home State. The exclusion of an insurer that has been subrogated to the investor’s rights from access to the Centre applies only to public entities, and not to private insurers. While private insurers, as assignees of an investor’s claim against the host State, can qualify ratione personae for access to ICSID jurisdiction under Art. 25(1), provided they have the nationality of a Contracting State, and can be considered as having an investment in the host State (History, Vol. II, p. 404) (see also paras. 369–375, 716–726 supra), their claim must also be covered by the host State’s consent. If the host State has consented to the assignment or subrogation, it seems unproblematic that the insurer can invoke the consent given to the investor and have access to ICSID as a named party.1263 Without the host State’s consent to the assignment, an insurer may often lack access to the Centre, even if it is covered by an investment treaty with the host State, as jurisdiction ratione temporis for claims brought under the treaty would often be missing (see paras. 680, 706, 708, 714, 715 supra). The decisive criterion for distinguishing public entities from private insurance providers would likely not be whether or not the insurer has a separate legal personality from the State, nor whether it is organized in the form of a private company, but whether the investment insurance system is administered on behalf of, and is financially dependent on, the investor’s home State or operates as part of the commercial insurance market. The denial of standing to the investor’s home State and its agencies, and the jurisdictional difficulties that arise if the host State does not consent to the subrogation of a private investment insurer, does not mean that ICSID is worthless in cases where the investor receives compensation under one of the respective investment insurance schemes. It merely means that the claimant in ICSID proceedings would have to be the investor despite the investment insurance. One way to achieve this result would be to require the investor under the insurance contract to exhaust the remedies before ICSID before being eligible for compensation under the terms of the investment insurance. In that case, the investor would certainly be the real party in interest and not pursue a representative claim (see paras. 659–678 supra).1264 However, having to undertake lengthy arbitration proceedings first would dramatically reduce the attractiveness of the investment insurance to the investor. An alternative would be to make payments under the insurance contract conditional on the subsequent pursuit of the claim before ICSID by the investor, or make an assignment of the investor’s claims against the host State only take effect after the investor has instituted proceedings before the Centre. ICSID’s jurisdiction would then be determined when the investor’s request for arbitration is registered (see paras. 44–54 supra). Any proceeds from the proceedings before ICSID would then go towards reimbursing the investment insurer.1265 Such arrangements may, however, run into 1263 See Broches (n 1260) 167; Broches (n 1001) 78; Ziadé (n 1260). 1264 For the same reason, the investment insurance should not be considered as affecting the quantum of possible damages. See İçkale v Turkmenistan, Award (8 March 2016) para 373 (referring to received rather than future compensation); Hochtief v Argentina, Decision on Liability (29 December 2014) para 309 (more generally supporting that investment insurances should not affect quantum, independently of when compensation is paid). 1265 This is also the approach taken by MIGA. See Ziadé (n 1260) 6.

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the problem that the insurer, rather than the claimant investor, may be considered as the real party in interest, a factor that the ad hoc Committee in Occidental v Ecuador considered as limiting ICSID’s jurisdiction under certain circumstances.1266 Furthermore, it is unclear whether completed or prospective indemnification under an investment insurance may reduce the damages due to the claimant investor.1267 These problems could be avoided if the insurance contract, and the subrogation provisions in a BIT, operate in a way that the rights of the insured investor are not extinguished by the compensation received and that it is clear that compensation under the insurance will be reduced by a corresponding damages claim. Thus, the Tribunal in Hochtief v Argentina held in respect of the Respondent’s objection that, in light of the provision on subrogation in Art. 6 of the Argentina–Germany BIT, the Claimant could no longer pursue her claim because of an indemnification received under the German Government’s political risk insurance program for foreign investment:

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Article 6 is phrased in terms that do not require that the insuring State succeed to and extinguish the rights of the insured investor once payment is made on the insurance policy. Much less does Article 6 itself bring about that legal result. Article 6 merely obliges the respondent State to recognize or admit (‘reconocerá’, ‘erkennt’) such a transfer of rights if and when the transfer is in fact effected by provision of law or by a legal act. In the present case no such transfer has been shown to have occurred.1268

The problems that exist if the insured investor pursues its claims against the host State can also be eliminated by an appropriate agreement with the host State, which permits the pursuit of the claim by the investor, even after the insurer has paid the indemnity.1269 ICSID’s 1993 Model Clauses suggest a formula for insertion into an agreement between the investor and the host State for this purpose:

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Clause 8 It is hereby agreed that the right of the Investor to refer a dispute to the Centre pursuant to this agreement shall not be affected by the fact that the Investor has received full or partial compensation from any third party with respect to any loss or injury that is the subject of the dispute [; provided that the Host State may require evidence that such third party agrees to the exercise of that right by the Investor].1270

Appropriate arrangements may also be made in investment treaties, not least since the investor’s home State has the primary interest in ensuring a possible recourse of its

1266 Occidental v Ecuador, Decision on Annulment (2 November 2015) para 262. See also paras 311–312 supra. For arguments to the same effect, see Rumeli v Kazakhstan, Award (29 June 2008) paras 241–276. But see CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 32 (expressing a contrary position on the issue of beneficial ownership in a case where assignment had only taken place after the initiation of the ICSID arbitration); see also paras 735–737 supra. 1267 See İçkale v Turkmenistan, Award (8 March 2016) para 373 (suggesting that the prior, but not future, payment of compensation under an insurance contract affects quantum). For the contrary position, see Hochtief v Argentina, Decision on Liability (29 December 2014) para 309. 1268 ibid para 186. 1269 Broches (n 1001) 78; Gerd Langer, ‘Das Weltbankübereinkommen zur Beilegung von Investitionsstreitigkeiten’ (1972) 18 Recht der Internationalen Wirtschaft 321, 324. 1270 (1997) 4 ICSID Reports 363. See also Clause VIII of the 1968 Model Clauses, (1968) 7 ILM 1159, 1168; Clause IX of the 1981 Model Clauses, (1993) 1 ICSID Reports 203.

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national investment scheme against the investor’s host State.1271 Investment treaties provide different versions of ‘subrogation clauses.’ What is common to them, however, is that they are almost exclusively concerned with public investment insurances and do not apply to political risk insurance by private insurers.1272 Under one version, treatybased subrogation clauses provide that payment to the insured investor shall not affect the investor’s right to pursue ICSID proceedings.1273 Another version provides that the host State shall not raise the fact that the investor has been compensated as a defense.1274 The 2008 UK Model Agreement contains the following clause in Art. 8(3): The Contracting Party which is a party to the dispute shall not raise as an objection at any stage of the proceedings or enforcement of an award the fact that the national or company which is the other party to the dispute has received in pursuance of an insurance contract an indemnity in respect of some or all of his or its losses.1275

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This is not the only possible approach to the procedural problem arising from subrogation. Some BITs provide for inter-State arbitration.1276 At the same time, BITs may contain subrogation clauses by means of which the host State recognizes the assignment to the home State of the investor’s claims against the host State and undertakes that the indemnifying State is entitled to the same treatment in respect of the rights and claims acquired, including in respect of the payment of damages.1277 The US public investment insurance scheme administered by the Overseas Private Investment Corporation (OPIC) can recover compensation paid to insured investors based on bilateral treaties concluded between the United States and host States.1278 The MIGA Convention provides for ad hoc arbitration ‘guided’ by the ICSID Arbitration Rules between the Agency, acting as subrogee of the indemnified investor, and the host State.1279 I. ‘. . . consent in writing to submit to the Centre.’

1. General Significance 759

Consent by both or all parties is an indispensable condition for the jurisdiction of the Centre. The fact that the host State and the investor’s State of nationality have ratified 1271 See Dolzer and Stevens (n 331) 156–160; Parra (n 31) 343; Paul Peters, ‘Dispute Settlement Arrangements in Investment Treaties’ (1991) 22 Neth YBIL 91, 142–143. 1272 An exception may be found in Art. 22 of the 2015 Draft Norwegian Model BIT accessed 10 January 2021, which refers generally to insurances against non-commercial risk, without apparent limitation to public investment insurance schemes. 1273 See eg France–Tunisia BIT (signed and entered into force 30 June 1972, terminated 10 September 1999) Art. 3; BLEU–Sri Lanka BIT (signed 5 April 1982, entered into force 26 April 1984) Art. 8(2); France–Nigeria BIT (signed 27 February 1990, entered into force 18 August 1991) Art. 9. 1274 For examples, see Dolzer and Stevens (n 331) 163–164; Ziadé (n 1260) 5–6. See also ECT (n 33) Art. 15(3). 1275 UK Model IPPA (2008) Art. 8(3). See also German Model BIT (2008) Art. 11(3); US Model BIT (2012) Art. 28(7). See also Paraguay–United Kingdom BIT (signed 4 June 1981, entered into force 23 April 1992) Art. 8(1); Bangladesh–United States BIT (signed 12 March 1986, entered into force 25 July 1989) Art. VII(4); Barbados–United Kingdom BIT (signed and entered into force 7 April 1993) Art. 8(3); Armenia–United States BIT (signed 23 September 1992, entered into force 29 March 1996) Art. VI(7). 1276 Ziadé (n 1260) 6. 1277 See eg ECT (n 33) Art. 15(1) and (2); German Model BIT (2008) Art. 6; UK Model IPPA (2008) Art. 10. 1278 See Nolan, Sourgens and Rockefeller (n 1255) 745. 1279 MIGA Convention (n 1256) Art. 57(b).

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the Convention will not suffice. The last paragraph of the Preamble to the Convention makes this quite clear (see Preamble, paras. 35, 36). During the Convention’s drafting, Mr. Broches was tireless in emphasizing that the use of the Centre’s facilities would be voluntary and that participation in the Convention would not compel any State to submit disputes to the Centre (History, Vol. II, pp. 68, 69, 74, 77, 79, 82–83, 135–136, 241, 257, 258, 303, 334, 335, 464, 492, 563, 566). He had to overcome apprehensions of some developing countries’ representatives who feared that the Convention’s mere existence might lead to pressure on host States to give consent or that refusal to give consent might lead to ‘adverse inferences’ (ibid., pp. 259, 261, 470, 499, 501, 540, 541, 566). These fears were accommodated in part through the insertion of Art. 25(4), which allows States to state in advance which classes of disputes they would, or would not, consider submitting to the Centre (see paras. 1472–1507 infra). The Report of the Executive Directors to the Convention describes consent as ‘the cornerstone of the jurisdiction of the Centre.’1280 Participation in the Convention alone does not carry any obligation or even expectation that there will be consent to jurisdiction. A Contracting State remains free as to whether or not, and if so to what extent, it wishes to give consent. Consent must be obtained from both or all parties. The Convention leaves the parties a large measure of freedom in expressing their consent. Traditionally this would take place by way of a direct agreement between the host State and the investor (see paras. 767–776 infra). Consent may also result from a unilateral offer by the host State, expressed in its legislation or in a treaty, which is subsequently accepted by the investor (see paras. 780–874 infra). Nowadays the vast majority of cases are based on consent given in this way.1281 This phenomenon has been called ‘arbitration without privity.’1282 Here too the result is an agreement, although it is often achieved without direct contact between the parties prior to the institution of proceedings. A unilateral act is insufficient (see paras. 814–824, 850–862 infra). Consent will be valid according to its own terms, that is, to the extent that disputes are covered by its scope (see paras. 948–980 infra). Consent to the jurisdiction of the Centre implies a submission to all relevant rules of the Convention, including the obligation to abide by an award, and to the Centre’s Rules and Regulations. Consent under the Additional Facility (see paras. 12–19 supra) is separate from consent under the ICSID Convention. Consent under the Convention does not include consent under the Additional Facility, which must be given separately (see paras. 772, 785, 793, 797, 832, 845–847, 849, 865, 871–873, 957 infra). Art. 4(1) of the Additional Facility Rules foresees an agreement between the parties providing for conciliation or arbitration under the Additional Facility, which requires approval of ICSID’s

1280 ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 28, para 23. 1281 Andrea M Steingruber, Consent in International Arbitration (OUP 2012) 60–68. 1282 Jan Paulsson, ‘Arbitration without Privity’ (1995) 10 ICSID Rev 232; Michael D Nolan and Frédéric G Sourgens, ‘Limits of Consent – Arbitration without Privity and Beyond’ in Miguel Á FernándezBallesteros and David Arias (eds), Liber Amicorum Bernardo Cremades (La Ley 2010) 873.

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Secretary-General. In case access to the Additional Facility is sought under Art. 2(a) of the Additional Facility Rules (i.e. because either the investor’s State of nationality or the host State are not Contracting States to the ICSID Convention), the Secretary-General shall only give this approval, if the parties also consent to the jurisdiction of the Centre under Art. 25, if by the time proceedings are instituted both the State party and the State of the investor’s nationality are Contracting States to the Convention (see Art. 4(2) of the Additional Facility Rules).

2. Consent in Writing 764

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The Convention’s only formal requirement for consent is that it must be in writing. This condition was contained in all of the Convention’s drafts except the Preliminary Draft (History, Vol. I, pp. 110, 112, 116, 118). It was never the object of any controversy and was reiterated a number of times (History, Vol. II, pp. 402, 828, 833, 835, 836, 842, 879). Consent in writing will normally be communicated between the parties but there is no need to notify the Centre at the time of consent. A suggestion to this effect, made during the Convention’s drafting (ibid., p. 402), was not pursued. In fact, the Centre has no precise knowledge of the number and the contents of various consent clauses covering investments. But proof of consent in writing will be required at the time a request for conciliation or arbitration is made. Rule 2(2) of the Institution Rules provides that a request must be supported by documentation concerning the instruments recording consent and their dates. The need to put consent into writing has not led to difficulties in practice, though ICSID tribunals have at times noted specifically that consent to the Centre’s jurisdiction had been given in writing.1283 In Holiday Inns v Morocco, the Government argued that there had been no consent in writing with the mother companies of the parties to the contract containing the consent clause (see paras. 644–647 supra). The argument was not accepted. There had been consent in writing, even though the claimant investor had not been identified in writing at the outset.1284 Also, in cases of succession, consent would be binding without the need for a renewed consent in writing (see paras. 679–744 supra). Consent in writing must be explicit and not merely construed. In Cable TV v St Kitts and Nevis, the Respondent was not a party to the agreement containing the consent clause (see para. 531 supra). The Claimant argued that consent by the Respondent could be construed from the institution of proceedings by the Attorney-General of St. Kitts and Nevis against the Claimant in a domestic court of the Respondent. The purpose of the domestic court proceedings was to obtain an injunction to restrain the Claimant from raising its rates prior to the resolution of the dispute through ICSID arbitration (see Art. 26, para. 280). The Tribunal held that the references in the court documentation to

1283 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 21; Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 23; LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 350–351; SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 98, 100, 101; Vacuum Salt v Ghana, Award (16 February 1994) para 26. 1284 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 150).

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the ICSID clause in the agreement were merely statements of fact and did not amount to consent by any person to ICSID jurisdiction.1285

3. Consent through Direct Agreement between the Parties a) Consent for Future and for Existing Disputes Consent through a direct agreement may be achieved through a compromissory clause in an investment agreement between the host State and the investor submitting future disputes arising from the investment operation to ICSID jurisdiction. It is also possible to submit a dispute that has already arisen between the parties through consent expressed in a compromis. Therefore, consent may be given with respect to existing or future disputes (see paras. 79, 80 supra).1286 This principle was not uncontested during the Convention’s drafting. The Working Paper and the Preliminary Draft contained a reference to ‘any existing or future dispute’ (History, Vol. I, pp. 110, 112). The Preliminary Draft also referred to ‘a prior written undertaking’ and ‘ad hoc submission of a dispute’ as alternative forms of consent (ibid., p. 112). The First Draft stated that consent ‘may be given either before or after the dispute has arisen’ (ibid., p. 116). Mr. Broches maintained throughout the drafting process that both forms of consent should be admissible (History, Vol. II, pp. 59, 77–78, 323, 336, 493, 506, 511, 566, 836) and was supported by some delegations (ibid., pp. 833, 842). However, a number of delegates insisted that the only acceptable form of consent would be in respect of a dispute that had already arisen and that advance consent for future disputes should be excluded (ibid., pp. 69, 334, 499, 501, 541, 829, 834, 836, 838, 839). No formal decision appears to have been taken on this point, but the reference to consent before or after the emergence of the dispute disappeared from subsequent drafts (ibid., p. 879), including the Revised Draft (History, Vol. I, p. 118), and does not appear in the Convention. Nevertheless, it is clear that both forms of consent are covered by the Convention. The Report of the Executive Directors mentions both possibilities:

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24. . . . Consent may be given, for example, in a clause included in an investment agreement, providing for the submission to the Centre of future disputes arising out of that agreement, or in a compromis regarding a dispute which has already arisen.1287

This view is supported by writers on the Convention1288 and by the practice under the Convention. In fact, the majority of cases brought to ICSID arbitration under direct agreements between the parties are based on agreements containing a consent clause

1285 Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 4.02–4.17. 1286 Steingruber (n 1281) 197–199, 214–215. 1287 (1993) 1 ICSID Reports 23, 28. See also Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 21, where the Tribunal explicitly approved this interpretation in the Executive Directors’ Report. 1288 Amerasinghe (n 96) 171; Broches (n 159) 353–354; Szasz (n 120) 28; Steingruber (n 1281) 197–198, 212–215.

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for future disputes.1289 Agreements to submit existing disputes to the Centre are rare.1290 In CSOB v Slovakia, the Respondent contended that the dispute settlement clause in the BIT (see paras. 777, 827 infra), which stated that the investor and the host State had the right to submit disputes to ICSID, meant that any submission had to be made jointly by both parties. The Tribunal rejected this interpretation. It pointed out that a holding that the parties must submit their dispute jointly would mean that the ICSID clause in the BIT was subject to an agreement by the parties after the dispute had arisen. The fact that some BITs contained provisions for joint submission of disputes to arbitration did not compel the conclusion that provisions whose wording is at best ambiguous should be interpreted in this way. Moreover, the Tribunal noted that the BIT offered a choice between ICSID and UNCITRAL arbitration and that any dispute was to be resolved by the method that was chosen first. The Tribunal concluded that this provision made sense only on the assumption that each party to a dispute had the right to institute the arbitration proceedings separately.1291 It is obvious that consent by both parties is much easier to obtain before the outbreak of a disagreement. Therefore, it is important to give careful attention to the drafting of consent clauses when negotiating investment agreements. The Centre has developed a set of Model Clauses for the convenience of the parties to facilitate the drafting of consent clauses between them.1292 These Model Clauses are designed to assist the parties, but their use is by no means mandatory. Apart from two basic submission clauses to cover consent in respect of future and existing disputes, the Model Clauses also offer clauses describing the subject-matter of the dispute (see paras. 188, 189 supra; para. 951 infra), clauses relating to the parties (see paras. 563, 606 supra), clauses concerning the method of the tribunal’s constitution, applicable law, other remedies, waiver of immunity from the execution of the award, procedural questions, division of costs, and place of proceedings. There are also model clauses referring to the Additional Facility and to the designation of the Secretary-General as appointing authority of ad hoc arbitrators. The Model Clauses, as published, are merely offered as examples, and the parties are free to adapt them to the specific circumstances of their

1289 See eg Lalive (n 53) 128 (reporting on Holiday Inns v Morocco); Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) paras 12, 21; Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 10; Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 10, 13; Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) paras 2, 49, 58 and Decision on Annulment (1 March 2011) paras 129 ff; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 22, 23, 54, 55, 150; Duke Energy v Ecuador, Award (18 August 2008) paras 62, 111–189; Aguaytia v Peru, Award (11 December 2008) paras 66–67; RSM v Grenada I, Award (13 March 2009) paras 8, 42, 213; Liman Caspian Oil v Kazakhstan, Award (22 June 2010) para 214; Millicom v Senegal, Decision on Jurisdiction (16 July 2010) paras 88–100; Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 11–14; Perenco v Ecuador, Decision on Jurisdiction (30 June 2011) paras 107–147; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 45, 88–90; Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 626. 1290 See Swiss Aluminium v Iceland, Order on Discontinuance (6 March 1985); MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 67; Santa Elena v Costa Rica, Award (17 February 2000) para 26. 1291 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 56–58. 1292 See Doc ICSID/5/Rev.2 (1 February 1993), containing the 1993 Model Clauses, reproduced in (1997) 4 ICSID Reports 357.

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relationship. They are useful not only as blueprints for actual contracts, but also as a checklist for the various questions to be considered when submitting to ICSID.1293 The Model Clauses have undergone several revisions.1294 The 1993 Model Clauses suggest the following basic submission clause in respect of future disputes for insertion in investment agreements between host States and foreign investors:

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Clause 1 The [Government]/[name of constituent subdivision or agency] of name of Contracting State (hereinafter the ‘Host State’) and name of investor (hereinafter the ‘Investor’) hereby consent to submit to the International Centre for Settlement of Investment Disputes (hereinafter the ‘Centre’) any dispute arising out of or relating to this agreement for settlement by [conciliation]/[arbitration]/ [conciliation followed, if the dispute remains unresolved within time limit of the communication of the report of the Conciliation Commission to the parties, by arbitration] pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (hereinafter the ‘Convention’).

If the parties have not given their consent in respect of future disputes, the Model Clauses offer the following formula for the submission of an existing dispute:

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Clause 2 The [Government]/[name of constituent subdivision or agency] of name of Contracting State (hereinafter the ‘Host State’) and name of investor (hereinafter the ‘Investor’) hereby consent to submit to the International Centre for Settlement of Investment Disputes (hereinafter the ‘Centre’) for settlement by [conciliation]/[arbitration]/[conciliation followed, if the dispute remains unresolved within time limit of the communication of the report of the Conciliation Commission to the parties, by arbitration] pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, the following dispute arising out of the investment described below.

b) Consent Based on an Investment Application The agreement on consent between the parties need not be recorded in a single instrument. An investment application made by the investor may provide for arbitration. If the application is approved by the competent authority of the host State, there is consent to arbitration by both parties. In Amco v Indonesia, the investor had submitted an application to the Indonesian Foreign Investment Board to establish a locally incorporated company for the purpose of carrying out the investment operation. The application provided that later disagreements would be put before ICSID. The application was approved. The Tribunal accepted the validity of the consent clause and found that it was sufficient that

1293 See esp Gaillard (n 122); Delaume (n 120). 1294 Earlier versions were published in (1968) 7 ILM 1159 and (1993) 1 ICSID Reports 197. The 1993 version is published in (1993) 7 ICSID Rev 134–151 and in (1997) 4 ICSID Reports 357.

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its interpretation in good faith showed that the parties had agreed to ICSID arbitration.1295

c) Consent by Reference to Another Legal Instrument 777

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An agreement between the parties may record their consent to ICSID jurisdiction by reference to another legal instrument.1296 In CSOB v Slovakia, an agreement entered into between the parties to the dispute contained the clause ‘this Agreement shall be governed by the laws of the Czech Republic and the [BIT between the Czech and Slovak Republics].’ The Claimant contended that this constituted an incorporation by reference of consent to ICSID arbitration as provided for in the BIT. However, the BIT had never entered into force (see para. 827 infra). The Tribunal carefully examined the drafting history of the agreement between the parties and concluded that the parties, by referring to the BIT, had intended to incorporate the ICSID clause in the BIT into their agreement.1297 In Inceysa v El Salvador, one of several bases of consent invoked by the Claimant was a clause in the contract between the parties submitting disputes arising under the contract to arbitration ‘in accordance with Salvadoran Law.’1298 The Tribunal examined several pieces of legislation cited by the Claimant. It found that some of these, while referring to arbitration, contained no express reference to ICSID and could consequently not meet the requirement of consent under Art. 25 of the Convention.1299 On the other hand, El Salvador’s Investment Law provided for ICSID’s jurisdiction for ‘controversies arising between foreign investors and the State regarding their investments in El Salvador.’ In the end, the Tribunal denied jurisdiction because the Claimant did not enjoy the rights granted by the Investment Law, since its ‘investment’ did not meet the condition of legality1300 (see paras. 454–457 supra; paras. 785, 786, 801, 957, 958 infra). In Lighthouse Corp v Timor-Leste, an agreement between the parties contained a reference to Standard Terms and Conditions, which in turn contained an ICSID arbitration clause.1301 The Tribunal confirmed that contracting parties can express their agreement to arbitrate future disputes by referring to another document that contains an arbitration clause.1302 However, in the particular case, the Tribunal was not satisfied that the parties had expressed an intent to submit to ICSID jurisdiction. The reference to the document containing the ICSID clause was ambiguous and it was unclear whether the Respondent was aware of the document. Therefore, the Claimants had not established that consent to ICSID arbitration was part of the parties’ contractual arrangements.1303

1295 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 10, 11, 23, 25. See also Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) paras 11–18, 199–217; WalAm Energy v Kenya, Award (10 July 2020) paras 1, 364–367. 1296 Cf UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Art. 7(6) (‘The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract’). 1297 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 49–55. 1298 Inceysa v El Salvador, Award (2 August 2006) paras 266–301. 1299 ibid paras 309–330. 1300 ibid paras 258–264, 332. 1301 Lighthouse Corp v Timor-Leste, Award (22 December 2017) paras 9, 16. 1302 ibid para 144. 1303 ibid paras 228–282.

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4. Consent through Host State Legislation The possibility that a host State might express its consent to the Centre’s jurisdiction through a provision in its national legislation, or through some other form of unilateral declaration, was discussed repeatedly during the Convention’s preparation. In response to several questions, Mr. Broches pointed out that unilateral acceptance of the Centre’s jurisdiction constituted an offer that could be accepted by a foreign investor and so become binding on both parties (History, Vol. II, pp. 274–275). There was some concern that, in view of a State’s undisputed right to change its legislation, this form of consent would be revocable at any time. Mr. Broches responded that this would depend upon the terms of the State’s offer (ibid., pp. 405–406). The investor’s acceptance could be linked to the granting of an investment license. But in the absence of a provision to this effect in the national legislation, it was arguable that until the investor had actually availed him or herself of the offer contained in the law, there would be no agreement to accept the Centre’s jurisdiction (ibid., pp. 410, 527). Also, in making a unilateral statement in an investment law, the host State could limit its undertaking to certain specified issues in connection with approved investments (ibid., p. 506). At one point, an Italian proposal was put forward to include a specific provision in the Convention to the effect that a State may make a declaration, contained in its legislation and officially notified to the Centre, whereby it submits to the Centre’s jurisdiction (History, Vol. II, p. 402). Mr. Broches was of the opinion that unilateral consent given through investment legislation was covered by the general provision on consent. This form of giving consent should not be singled out in order to avoid the impression that it would be the normal means of dealing with foreign investors (ibid., pp. 405–406). Eventually, it was decided to explicitly mention, in the comment to the Convention, that a State may give its undertaking to have recourse to the Centre in legislation for the promotion of foreign investment (ibid., p. 406). The Report of the Executive Directors to the Convention, after dealing with consent through a direct agreement between the parties (see para. 769 supra), says:

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24. . . . Nor does the Convention require that the consent of both parties be expressed in a single instrument. Thus, a host State might in its investment promotion legislation offer to submit disputes arising out of certain classes of investments to the jurisdiction of the Centre, and the investor might give his consent by accepting the offer in writing.1304

References to dispute settlement by the Centre in national investment legislation show a considerable measure of diversity.1305 Not all references amount to consent to jurisdiction or an offer to the investor to accept ICSID’s jurisdiction. Therefore, in each

1304 (1993) 1 ICSID Reports 23, 28. The 1968 Model Clauses offer a formula for inclusion in national investment legislation and one for acceptance by the investor, (1968) 7 ILM 1159, 1163–1164. 1305 See also Parra (n 31) 290, 314 ff; David Caron, ‘The Interpretation of National Foreign Investment Laws as Unilateral Acts under International Law’ in Mahnoush H Arsanjani and others (eds), Looking to the Future: Essays on International Law in Honor of W Michael Reisman (Brill 2010) 649; Steingruber (n 1281) 199–201; Michele Potestà, ‘The Interpretation of Consent to ICSID Arbitration Contained in Domestic Investment Laws’ (2011) 27 Arb Int’l 149; Christoph Schreuer, ‘Investment Arbitration Based on National Legislation’ in Gerhard Hafner and others (eds), Völkerrecht und die Dynamik der Menschenrechte. Liber Amicorum Wolfram Karl (Facultas 2012) 527; Hepburn (n 307).

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case the respective provisions in national laws must be studied carefully. Even then, their meaning is not always clear (see further paras. 1036–1056 infra).

a) Binding Offer of Consent by the Host State 783

Some national investment laws provide unequivocally for dispute settlement by ICSID. For instance, Art. 8(2) of the Albanian Law on Foreign Investment of 1993 states in part: the foreign investor may submit the dispute for resolution and the Republic of Albania hereby consents to the submission thereof, to the International Centre for Settlement of Investment Disputes . . .1306

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The Tribunal in Tradex v Albania found this formulation unambiguous.1307 But the limitation of the consent to matters relating to expropriation turned out to be decisive in that case (see paras. 960–961, 978–979 infra). In Inceysa v El Salvador, the Claimant relied, inter alia, on Art. 15 of the El Salvador Investment Law, which provides in relevant part: In the case of controversies arising between foreign investors and the State regarding their investment in El Salvador, the investors may submit the controversy to: (a) . . . ICSID . . . (b) . . . the Additional Facility of ICSID; in those cases in which the foreign investor involved in the controversy is a national of a State that is not a contracting party to the ICSID Convention.1308

786

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The Tribunal concluded that this provision constituted a unilateral offer of consent to submit to the jurisdiction of the Centre to hear disputes regarding investments arising between El Salvador and an investor1309 (see also paras. 454–457, 778 supra; paras. 801, 957, 958 infra). A more common method to provide for settlement by the Centre is to include a reference to the Convention as one of several possible means of dispute settlement. The alternatives offered may include procedures expressly agreed to by the parties, procedures provided by BITs, the host State’s domestic courts, and non-ICSID arbitration. Some laws of this type specifically state that the State consents to ICSID’s jurisdiction. Other provisions are not so clear, but one may still infer from them that they express the State’s consent to ICSID’s jurisdiction. Thus, some national laws state that the foreign investor ‘shall be entitled to request’ that the dispute be conclusively settled by one of several methods, including the ICSID Convention, or that the dispute ‘shall be settled’ by one of these methods. A legislative provision of this kind was at the centre of the discussion on jurisdiction in SPP v Egypt.1310 The Request for Arbitration relied on Art. 8 of Egypt’s Law No. 43 1306 See Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 54. 1307 ibid 63. 1308 Inceysa v El Salvador, Award (2 August 2006) para 331. See also Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 5.1–5.26, 5.37, 5.39. 1309 Inceysa v El Salvador, Award (2 August 2006) para 332. In the particular case the Claimant was not entitled to the rights granted in the Investment Law because its investment did not meet the condition of legality. 1310 SPP v Egypt, Decision on Jurisdiction I (27 November 1985).

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of 1974 Concerning the Investment of Arab and Foreign Funds and the Free Zone. Art. 8 provided in relevant part: Investment disputes in respect of the implementation of the provisions of this Law shall be settled in a manner to be agreed upon with the investor, or within the framework of the agreements in force between the Arab Republic of Egypt and the investor’s home country, or within the framework of the Convention for the Settlement of Investment Disputes between the State and the nationals of other countries to which Egypt has adhered by virtue of Law No. 90 of 1971, where such Convention applies.1311

Egypt claimed that the clause referring to ICSID was not self-executing and required a separate implementing agreement with the investor. In Egypt’s view, Law No. 43 was too ambiguous and equivocal to establish consent to ICSID arbitration.1312 The Tribunal embarked upon a detailed grammatical analysis of the relevant text, including the Arabic original. This led it to conclude that the Arabic text mandated the submission of disputes to the various methods prescribed therein, to the extent that such methods were applicable.1313 The Tribunal rejected the idea that Art. 8 had the consequence only of informing potential investors of Egypt’s willingness, in principle, to negotiate a consent agreement.1314 Similarly, the Tribunal was unconvinced by the argument that a State’s conclusion of a BIT containing an ICSID clause implied that the ICSID remedy was not already available under domestic legislation.1315 The mandatory nature of the legislative provision was further confirmed by Egypt’s official investment promotion literature.1316 Since the parties had not agreed on another method of dispute resolution, and since there was no applicable bilateral treaty in force, the Tribunal found ‘that Article 8 of Law No. 43 operates to confer jurisdiction upon the Centre with respect to the Parties’ dispute.’1317 In Zhinvali v Georgia, the Claimant relied on Art. 16(2) of Georgia’s Investment Law of 1996, which provides: 2. Disputes between a foreign investor and [a] governmental body, if the order of its resolution is not agreed between them, shall be settled at the court of Georgia or at . . . [ICSID]. Should [the] dispute not be considered in the . . . [ICSID] the foreign investor is entitled to refer a dispute to the . . . [Additional Facility] or to any international arbitration established in accordance with regulations provided by . . . UNCITRAL.1318

1311 ibid para 70. See also (1977) 16 ILM 1476, 1479. The provision continues by providing that disputes may also be settled by ad hoc arbitration under Egyptian law. Law No 43 of 1974 has since been replaced. See para 798 infra. 1312 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 70–73. See also ibid, Decision on Jurisdiction II (14 April 1988) paras 53, 73. 1313 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 74–88. See also ibid, Dissenting Opinion El Mahdi (14 April 1988) paras 22–26. 1314 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 89–101. See also ibid, Dissenting Opinion El Mahdi (14 April 1988) para 21. 1315 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 110. 1316 ibid paras 112–115. See also ibid, Dissenting Opinion El Mahdi (14 April 1988) para 29. 1317 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 117. In a subsequent case, Manufacturers Hanover Trust v Egypt, jurisdiction was also based on Egypt’s Law No 43 of 1974. Although there is no published decision, it is known that the case had progressed beyond a jurisdictional decision before it was settled. 1318 Zhinvali v Georgia, Award (24 January 2003) para 337.

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The Tribunal accepted the Claimant’s position that ‘the election between recourse to the Georgia courts or to an ICSID tribunal is solely for the Claimant to make.’1319 The reference to ICSID in Art. 16(2) of the Investment Law constituted consent in writing by Georgia to the jurisdiction of ICSID.1320 In Lighthouse Corp v Timor-Leste, the Respondent’s Foreign Investment Law contained a clear provision offering consent to ICSID arbitration: Disputes between the State and foreign investors of foreign nationality that cannot be resolved under the terms of Paragraph 1 above [conciliation] shall be settled by way of arbitration in accordance with the rules of the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID), unless there is an agreement to the contrary.1321

796 797

Jurisdiction was denied nevertheless, since the Claimant had not obtained a Foreign Investor’s Certificate prescribed by the Foreign Investment Law.1322 A number of legislative provisions providing for consent to ICSID’s jurisdiction contain a separate clause referring to the Additional Facility (see paras. 12–19, 480– 496, 513–518, 615 supra).1323 In these legislative provisions, the Additional Facility is foreseen only if the investor does not meet the nationality requirements of Art. 25 of the Convention. Therefore, these provisions are designed to open access to the Centre for foreign investors whose home States are not (yet) Contracting States to the Convention (see paras. 13–15, 614–615 supra).

b) Prospect of Future Consent 798

Not every reference to arbitration in domestic legislation amounts to a binding offer of consent. Some legislative provisions referring to the settlement of disputes by arbitration indicate that further action on the part of the host State is necessary to establish consent. For instance, the Egyptian Investment Law of 19891324 provided in Art. 55, after a reference to the role of domestic courts in the settlement of disputes under that law: The parties concerned may also agree to settle such disputes within the framework of the agreements in force between the Arab Republic of Egypt and the investor’s home country or within the framework of the [ICSID] Convention . . . subject to the terms and conditions, and in the instances where such agreements do apply.1325

799

The legislation of some countries provides for the determination of one of several methods of dispute settlement by way of an investment license. In these types of 1319 ibid para 335. 1320 ibid para 342. 1321 Timor Leste – Foreign Investment Law (Law No 05/2005) Art. 23(2). See also the similarly worded Nigerian Investment Promotion Commission Act (1995) applied in Interocean Oil v Nigeria, Award (6 October 2020) paras 65, 99–104. 1322 Lighthouse Corp v Timor-Leste, Award (22 December 2017) paras 283–334. 1323 See Georgia – Investment Law (1996) Art. 16(2), quoted in Zhinvali v Georgia, Award (24 January 2003) para 337; El Salvador – Investment Law (1999) Art. 15, quoted in Inceysa v El Salvador, Award (2 August 2006) para 331. 1324 Egypt – Investment Law (Law No 230 of 1989) (1989). The Law was replaced by the Law on Investment Guarantees and Incentives (Law No 8 of 1997) (1997). 1325 See also Georges R Delaume, ‘The Pyramids Stand – The Pharaohs Can Rest in Peace’ (1993) 8 ICSID Rev 231, 257–258; Bertrand P Marchais, ‘The New Investment Law of the Arab Republic of Egypt’ (1989) 4 ICSID Rev 297, 305–306.

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clauses, the legislative provisions as such do not amount to consent to ICSID’s jurisdiction. They do not constitute an offer by the host State that may be accepted by the investor through a unilateral act. Rather, they require a specific agreement between the host State and the investor contained in an investment agreement, an investment license, or another document. Such an agreement may be withheld at the host State’s discretion. In Amco v Indonesia, the consent to ICSID’s jurisdiction was contained in an agreement between the parties (see para. 776 supra). Before the Tribunal, Amco additionally relied on Indonesia’s foreign investment legislation and on ‘investment promotion literature’ as containing Indonesia’s written consent to ICSID arbitration.1326 The Tribunal noted that the foreign investment legislation merely referred to arbitration in general terms without any mention of ICSID. Moreover, the legislation had been enacted before the Convention had entered into force for Indonesia. Therefore, there was no commitment under the Act to submit investment disputes to ICSID. As to the ‘investment promotion literature,’ it could not contain a direct commitment, but could be taken into account in the interpretation of the investment agreement.1327 In Inceysa v El Salvador, the Claimant relied on several pieces of legislation as a basis for ICSID’s jurisdiction. The Tribunal examined the statutory provisions cited by the Claimant in some detail and found that some of these, while referring to arbitration, contained no express reference to ICSID. Consequently, they could not meet the requirement of consent under Art. 25 of the Convention.1328 On the other hand, El Salvador’s Investment Law provided for ICSID’s jurisdiction1329 (see paras. 454–457, 778, 785, 786 supra; paras. 957, 958 infra). Metal-Tech v Uzbekistan concerned Art. 10 of the Foreign Investment Law of Uzbekistan which, in relevant part, reads as follows:

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Article 10. Settlement of disputes A dispute directly or indirectly related to foreign investments (investment dispute) may be settled by the agreement of the parties through consultations. If the parties are unable to reach a negotiated resolution, the dispute must be settled by a commercial court of the Republic of Uzbekistan or in arbitration in accordance with the rules and procedures of international treaties (agreements and conventions) on the settlement of investment disputes to which the Republic of Uzbekistan has acceded. The parties involved in an investment dispute, by mutual agreement, may determine the body considering said dispute as well as the country in which arbitration proceedings are held under the investment dispute.

The Tribunal rejected the Claimant’s reliance on this provision as a basis for ICSID jurisdiction. It pointed out that Art. 10 did not contain an expression of consent to a particular arbitral mechanism. In particular, there was no offer to submit to ICSID.

1326 1327 1328 1329

Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 5, 17. ibid paras 21–22. Inceysa v El Salvador, Award (2 August 2006) paras 309–330. ibid para 331.

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Moreover, Art. 10 required a further agreement of the parties before a dispute could be brought to arbitration.1330 In İçkale v Turkmenistan, the Tribunal found that a mere reference to ‘Law courts determined by inter-state treaties (agreements)’ in Turkmenistan’s Foreign Investment Law could not be interpreted as an expression of consent to ICSID arbitration.1331 In other cases, tribunals denied the existence of a binding offer of consent to arbitrate despite the existence of references to ICSID. The ground was that the language of the respective provisions was not couched in clearly mandatory terms. In Biwater Gauff v Tanzania, the Tribunal found that Section 23.2 of the Tanzanian Investment Act of 1997 did not amount to a binding offer of arbitration since it was conditioned by a further agreement. It provided: A dispute between a foreign investor and the [Tanzania Investment] Centre or the Government in respect of a business enterprise which is not settled through negotiations may be submitted to arbitration in accordance with any of the following methods as may be mutually agreed by the parties, that is to say — (a) in accordance with arbitration laws of Tanzania for investors; (b) in accordance with the rules of procedure for arbitration of the International Centre for the Settlement of Investment Disputes; (c) within the framework of any bilateral or multilateral agreement on investment protection agreed to by the Government of the United Republic and the Government of the country where the investor originates.1332

807

In PNG Sustainable Development v Papua New Guinea, the Claimant sought to rely on a combination of two statutory provisions of Papua New Guinea (PNG) to establish ICSID jurisdiction. Art. 39 of the PNG Investment Promotion Act of 1978 provided: The Investment Disputes Convention Act 1978, implementing the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States, applies, according to its terms, to disputes arising out of foreign investment.

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In turn, Art. 2 of the Investment Disputes Convention Act of 1978 provided: ‘A dispute shall not be referred to the Centre unless the dispute is fundamental to the investment itself.’ The Tribunal found that it was unable to discern in these provisions anything that would qualify as an independent consent to ICSID jurisdiction by the State.1333 In MNSS and RCA v Montenegro, the Tribunal found that it had no jurisdiction under Art. 30 of the Montenegrin Foreign Investment Law of 2011, as consent to arbitration was subject to a further agreement. The provision stated as follows: Any dispute arising from foreign investments shall be resolved before the competent court in Montenegro, unless the investment agreement or the incorporation act

1330 1331 1332 1333

Metal-Tech v Uzbekistan, Award (4 October 2013) paras 381–388. İçkale v Turkmenistan, Award (8 March 2016) paras 395–399. Biwater Gauff v Tanzania, Award (24 July 2008) para 329. PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) para 286.

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stipulates that such disputes shall be resolved in domestic or foreign arbitration in accordance with international conventions. Where the Government is a contracting party, the disputes arising from the foreign investments shall, until the signature of the ICSID (International Center [sic] for the Settlement of Investment Disputes) Convention, be subject to domestic or foreign arbitration in accordance with the Additional Facility Rules of the ICSID Convention for countries which are not signatories to the ICSID Convention.1334

In a series of cases, tribunals had to interpret Art. 22 of the 1999 Venezuelan Investment Law. This piece of legislation (translated into English) provides as follows:

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Disputes arising between an international investor, whose country of origin has in effect with Venezuela a treaty or agreement for the promotion and protection of investments, or disputes to which are applicable the provisions of the Multilateral Investment Guarantee Agency (MIGA), or the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID), shall be submitted to international arbitration, according to the terms of the respective treaty or agreement, if it so provides, without prejudice to the possibility of using, if appropriate, the dispute resolution means provided for under the Venezuelan legislation in effect, when applicable.1335

The Tribunal in Mobil v Venezuela found that Venezuela had not, through this ambiguous provision, consented to ICSID jurisdiction. It reached this conclusion after examining Venezuela’s historical attitude towards international arbitration, the circumstances surrounding the investment law’s adoption, and the existence of BITs providing for ICSID arbitration. The Mobil tribunal noted, in particular, that Venezuela had signed a number of BITs that, unlike the Investment Law, contained clear expressions of consent to ICSID arbitration.1336 Subsequent tribunals that had to apply Art. 22 of Venezuela’s Investment Law reached the same conclusion.1337 The Tribunal in Brandes v Venezuela adopted the same reasoning,1338 adding that, considering the political circumstances, it did not find it logical that Venezuela was willing to grant a broad unilateral consent to ICSID jurisdiction without any reciprocity.1339 The Tribunal in ConocoPhillips v Venezuela

1334 MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 167. 1335 The text in the original Spanish is as follows: ‘Las controversias que surjan entre un inversionista internacional, cuyo país de origen tenga vigente con Venezuela un tratado o acuerdo sobre promoción y protección de inversiones, o las controversias respecto de las cuales sean aplicables las disposiciones del Convenio Constitutivo del Organismo Multilateral de Garantía de Inversiones (OMGI-MIGA) o del Convenio sobre Arreglo de Diferencias Relativas a Inversiones entre Estados y Nacionales de Otros Estados (CIADI), serán sometidas al arbitraje internacional en los términos del respectivo tratado o acuerdo, si así este lo establece, sin perjuicio de la posibilidad de hacer uso, cuando proceda, de las vías contenciosas contempladas en la legislación venezolana vigente.’ See CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) para 63. 1336 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 120–140. 1337 CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 137, 138; Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013) paras 103–141; OPIC Karimum v Venezuela, Award (28 May 2013) paras 100–108, 165–179; Highbury v Venezuela I, Award (26 September 2013) paras 237–241; Venoklim v Venezuela, Award (3 April 2015) paras 81–113. 1338 Brandes v Venezuela, Award (2 August 2011) paras 79–118. 1339 ibid para 105.

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reached the same result, adding that the function of Art. 22 of the Investment Law was to authorize the State to enter into arbitration agreements.1340 In Besserglik v Mozambique, the Claimant relied on the Mozambique Investment Law (MIL) in addition to the BIT between South Africa and Mozambique. Art. 25(2) of the MIL required ‘express agreement of both parties’ to arbitration. The Tribunal found that the only possible source of the express agreement for purposes of the MIL would have been the BIT. Since it had found that the BIT had not entered into force, it declined jurisdiction also under the MIL.1341

c) Acceptance by the Investor 814

815

While a host State may express its consent to ICSID’s jurisdiction through legislation, the investor must perform some reciprocal act to perfect consent. Even where consent is based on the host State’s legislation, it can only come into existence through an agreement between the parties. The provision in the host State’s legislation can amount to no more than an offer that may be accepted by the investor.1342 The Convention requires consent in writing (see paras. 764–766 supra). This indicates a minimum of formality in accepting the host State’s offer.1343 Consent must be perfected, at the latest, at the time of the institution of proceedings (see paras. 894–900 infra). The investor may accept the host State’s offer by submitting a request for conciliation or arbitration to the Centre1344 (see para. 882 infra). This is illustrated by Tradex v Albania. The Albanian Law of 1993 contained an offer of consent by the host State (see para. 783 supra). The Tribunal said: it can now be considered as established and not requiring further reasoning that such consent can also be effected unilaterally by a Contracting State in its national laws, the consent becoming effective at the latest if and when the foreign investor files its claim with ICSID making use of the respective national law.1345

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While it is possible to perfect consent through the institution of proceedings, it may not be wise for the investor to rely on the host State’s offer contained in its legislation, without accepting it at an early stage. After all, a State may retract its offer of consent by repealing the legislation that contains it and consent will be perfected only upon the acceptance of the offer. Also, the time of consent triggers a number of legal consequences under the Convention (see paras. 890–893 infra), the most important of which is that consent becomes irrevocable (see paras. 1057–1110 infra). Therefore, once the investor has accepted consent based on legislation, the agreement on consent will stay in effect, even if the legislation is repealed (see paras. 1082–1084 infra). The investor may express its acceptance in a variety of ways other than instituting proceedings. These include a simple written communication to the host State to the 1340 1341 1342 1343

ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) para 259. Besserglik v Mozambique (AF), Award (28 October 2019) paras 397–417. Broches (n 13) 269; Delaume (n 120) 172. Amerasinghe, ‘Submissions’ (n 26) 217; CF Amerasinghe, ‘The International Centre for Settlement of Investment Disputes and Development through the Multinational Corporation’ (1976) 9 Vand JTL 793, 810; Amerasinghe (n 96) 224; Szasz (n 120) 27. 1344 Broches (n 827) 643; Amerasinghe, ‘Submissions’ (n 26) 217. 1345 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 63. See also Zhinvali v Georgia, Award (24 January 2003) para 342.

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effect that consent to ICSID’s jurisdiction in accordance with the legislation is accepted, a statement contained in an application for an investment license, or a mere application if under the law in question the successful applicant automatically gets specified benefits, including access to ICSID.1346 The investor’s acceptance of consent can be given only to the extent of the offer made in the legislation (see paras. 956–963 infra). But it is entirely possible for the investor’s acceptance to be narrower than the offer and to extend only to certain matters or only to a particular investment operation.1347 In SPP v Egypt (see paras. 790–792 supra), about one year before the institution of arbitration, the Claimants had sent a letter to Egypt’s Minister of Tourism, which said in relevant part:

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we hereby notify you that we accept and reserve the opportunity of availing ourselves of the uncontestable jurisdiction of the International Centre for the Settlement of Investment Disputes, under the auspices of the World Bank, which is open to us as a result of Law No. 43 of 1974, Article 8 of which provides that investment disputes may be settled by ICSID arbitration.1348

Before the Tribunal, the Claimants contended successfully that their own consent was expressed in the letter and again by the act of filing their request for arbitration with the Centre.1349 The choice of one of several methods for dispute settlement offered by the legislation (see para. 787 supra) may have to be stated expressly in an application. Therefore, the mere submission of an application for an investment license, without any reference to the ICSID Convention, may not suffice. In order to perfect consent to ICSID’s jurisdiction, the investor should explicitly select the Centre. In Société Resort Company Invest Abidjan v Côte d’Ivoire, jurisdiction rested on the country’s 2012 Code des Investissements. That Code offers consent to ICSID jurisdiction, which may be accepted by the investor by way of an application (‘demande d’agrément’), in the following terms:

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820

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Le consentement des parties à la compétence du CIRDI ou du mécanisme supplémentaire, selon le cas, requis par les instruments les régissant est constitué, pour la République de Côte d’Ivoire par le présent article, et exprimé expressément dans la demande d’agrément pour la personne concernée.1350

The Claimant had submitted a demande d’agrément, which contained no reference to ICSID arbitration, but was approved by the competent national authority. The Tribunal, in a majority decision, found that the act of filing the demande d’agrément was the investor’s manifestation of consent to ICSID arbitration.1351 It found material the fact that the Respondent’s model demande d’agrément did not refer to ICSID arbitration.1352 The Tribunal interpreted the word expressément in the Code as a mere See also ‘ICSID and National Investment Laws’ (1986) 3(2) News from ICSID 8. Amerasinghe (n 96) 224–225; Szasz (n 120) 29. SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 40. ibid para 48. Société Resort Company Invest Abidjan v Côte d’Ivoire, Decision on Jurisdiction (1 August 2017) para 128. 1351 ibid paras 100–157. See also ibid, Dissenting Opinion Hobér (1 August 2017). 1352 ibid para 139.

1346 1347 1348 1349 1350

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restatement of the requirement in Art. 25(1) of the ICSID Convention that consent must be in writing.1353 In ABCI Investments v Tunisia, Art. 20 of Tunisia’s 1969 Investment Law was the primary basis for jurisdiction. That Law contained an offer of consent to ICSID arbitration. In 1993, Tunisia repealed the 1969 Law and replaced it with a new Law that did not contain consent to ICSID arbitration. The Request for Arbitration was submitted in 2003. The majority of the Tribunal found that the Claimant had accepted the offer of consent to arbitration under the 1969 Law before its abrogation. Although no document, taken in isolation, satisfied the requirement of the Claimant’s consent in writing under Art. 25(1) of the Convention, the Tribunal found that multiple letters, taken together, established consent. The majority held that the Claimant’s repeated requests regarding the guarantees of the 1969 Investment Law were evidence of of its acceptance of ICSID arbitration even though the Claimant had made no explicit reference to ‘ICSID’ or to ‘arbitration.’1354 This case suggests a maximum of flexibility for the investor’s acceptance of consent under national legislation. Any indication of acceptance on the part of the investor would suffice. This may be accomplished by any written instrument by which the investor signifies its submission to the legal framework provided in the host State’s legislation, including settlement under the Convention. Nevertheless, it is advisable to make an acceptance as clear as possible. Implicit acceptance, while not impossible, is liable to lead to jurisdictional disputes, to uncertainties concerning the exact date of consent (see para. 815 supra; paras. 890–893 infra), and to difficulties once the host State changes its legislation.

5. Consent through Bilateral Investment Treaties 825

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There is little reference to BITs in the travaux préparatoires to the Convention (History, Vol. II, p. 400). This is hardly surprising considering that, at the time of the Convention’s drafting, BITs had only just started to appear in State practice. The Report of the Executive Directors to the Convention does not mention the possibility of consent being expressed by way of treaties. But it does refer to the possibility of a unilateral offer of consent by the host State through its legislation and the acceptance of that offer by the investor (see para. 781 supra). The same principle applies to treaties to which the host State is a party. While the treaty on its own cannot amount to consent to the Centre’s jurisdiction by the parties to the dispute, it may constitute the host State’s offer to do so. This offer may then be taken up by a national of the other State party to the treaty. Consent through BITs has become accepted practice. In 1969, the Centre published a set of Model Clauses Designed for Use in Bilateral Investment Agreements,1355 but it does not seem that these have been used widely. Rather, ICSID clauses in BITs have

1353 ibid para 149. 1354 ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) paras 89–134. See also Philippe Pinsolle, ‘ABCI Investments Limited v Republic of Tunisia: How Explicit Must Be the Investor’s Consent to Arbitration?’ (2014) 29 ICSID Rev 548. 1355 Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Agreements (September 1969) (1969) 8 ILM 1341.

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evolved in a haphazard way and display a large variety of form and substance.1356 Many States, including some developing countries, have developed their own national practice in this regard, usually through the use of model BITs.1357 Over the years, ICSID clauses have been incorporated into several thousand BITs. Today, they can be found in the overwhelming majority of BITs. In recent years, the majority of ICSID cases have been brought on the basis of consent offered by BITs or similar treaties.1358 Some cases involved consent offered by several BITs.1359 In addition, free trade agreements containing investment chapters also typically offer consent to ICSID dispute settlement. It is clear that a BIT, in order to provide a basis for ICSID jurisdiction, must be in force at the relevant time. In Tradex v Albania, the Tribunal found that the Request for Arbitration had been submitted before the entry into force of the BIT between Albania and Greece. Therefore, it was not possible to establish jurisdiction on the basis of that treaty.1360 In CSOB v Slovakia, the Tribunal, while confirming the principle of consent to ICSID jurisdiction by way of a BIT, found that the BIT between the Czech and Slovak Republics had not entered into force.1361 A notice of the Ministry of Foreign Affairs in the Official Gazette of the Slovak Republic that the BIT had entered into force was not accepted by the Tribunal as an independent basis for jurisdiction. The notice neither reflected an intention of the State to become bound, nor had it led to an estoppel1362 (see also para. 777 supra; paras. 1085–1089 infra). Similarly, in Besserglik v Mozambique, the Tribunal found that the BIT between Mozambique and South Africa, upon which the Claimant sought to rely, had never entered into force.1363 Not every reference to the Convention in a BIT constitutes an offer of consent by the host State. While some clauses amount to an unequivocal commitment, others contain undertakings to give consent or hold out a general prospect of sympathetic consideration. Still others simply state that consent may be given by way of agreements with the investor.1364

1356 For broad overviews, see Aron Broches, ‘Bilateral Investment Protection Treaties and Arbitration of Investment Disputes’ in Jan C Schultsz and Albert Jan van den Berg (eds), The Art of Arbitration: Liber Amicorum Pieter Sanders (Kluwer 1982) 63; Geneviève Burdeau, ‘Nouvelles perspectives pour l’arbitrage dans le contentieux économique intéressant les états’ (1995) Revue de l’arbitrage 11–16; Delaume, ‘Le Centre’ (n 163) 783; Delaume (n 843) 13–14; Delaume (n 7) ch XV, 12–14; Jean-Pierre Laviec, Protection et promotion des investissements (PUF 1985) 278–279; Parra (n 31) 290–291, 322 ff; Peters (n 1271) 121 ff, 141; Steingruber (n 1281) 201–208. 1357 For comprehensive surveys, see Dolzer and Stevens (n 331); Kenneth J Vandevelde, Bilateral Investment Treaties: History, Policy, and Interpretation (OUP 2010) 433–499; Brown (n 331). 1358 For a bilateral treaty covering a specific investment, see HEP v Slovenia, Decision on the Treaty Interpretation Issue (12 June 2009) paras 11, 166–169. 1359 Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 2; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 1, 2, 4; OKO v Estonia, Award (19 November 2007) paras 171–176; Kardassopoulos v Georgia, Award (3 March 2010) para 57; Anderson and others v Costa Rica (AF), Award (19 May 2010) para 2; Guaracachi v Bolivia (UNCITRAL), Award (31 January 2014) paras 334–347; von Pezold and others v Zimbabwe, Award (28 July 2015) paras 1, 5–7, 85–87; Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 2, 7. 1360 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 58. 1361 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 37–43. 1362 ibid paras 44–47. 1363 Besserglik v Mozambique (AF), Award (28 October 2019) paras 325–396. 1364 For a survey of clauses in BITs referring to investor–State arbitration, see UNCTAD (n 341).

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a) Binding Offer of Consent by the Host State 829

The majority of ICSID clauses in modern BITs express consent on the part of the two Contracting States to submit to ICSID’s jurisdiction, for the benefit of nationals of the other State party to the treaty. Art. 8(1) of the Sri Lanka–United Kingdom BIT of 1980 offers an example of a simple ICSID clause: Each Contracting Party hereby consents to submit to the International Centre for the Settlement of Investment Disputes (herein referred to as ‘the Centre’) for settlement by conciliation or arbitration under the Convention . . . any legal disputes arising between that Contracting Party and a national or company of the other Contracting Party concerning an investment of the latter in the territory of the former.1365

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This clause was the basis for the Centre’s jurisdiction in the first case brought under a BIT in AAPL v Sri Lanka.1366 Similar clauses in BITs have formed the basis for jurisdiction in a large number of other cases. In all these cases, the claimants’ reliance on the ICSID clauses in the BITs as a basis for the Centre’s jurisdiction was not questioned in principle. Many BITs contain similar clauses.1367 The Model Agreements of Austria, Canada, China, France, Germany, Italy, Korea, Latvia, the Netherlands, the United Kingdom, and the United States all provide for definite consent to ICSID’s jurisdiction by the host State.1368 Some BITs mention consent, but others do not. Formulations to the effect that a dispute ‘shall be submitted’ to the Centre, that the investor ‘may submit’ the dispute, or that the parties have the right to initiate proceedings leave no doubt as to the binding character of these clauses. For instance, the German Model BIT of 2009 in its Art. 10(2) provides: If the dispute cannot be settled within six months of the date on which it was raised by one of the parties to the dispute, it shall, at the request of the investor of the other Contracting State, be submitted to arbitration. The two Contracting States hereby declare that they unreservedly and bindingly consent to the dispute being submitted to one of the following dispute settlement mechanisms of the investor’s choosing: 1. arbitration under the auspices of . . . [ICSID] provided both Contracting States are members of this Convention, or 2. arbitration under the . . . Additional Facility . . . where the personal or factual preconditions for proceedings pursuant to figure 1 do not apply, but at least one Contracting State is a member of the Convention referred to herein, or . . .1369

b) Undertaking to Give Consent 833

Some clauses in BITs referring to ICSID’s jurisdiction amount to an undertaking by the host State to give consent. This may be achieved by providing that a future 1365 (1980) 19 ILM 886, 888. 1366 AAPL v Sri Lanka, Award (27 June 1990) para 2. See also CF Amerasinghe, ‘The Prawn Farm (AAPL) Arbitration’ (1992) 4 Sri Lanka JIL 155; Patrick Rambaud, ‘Des obligations de l’Etat vis-à-vis de l’investisseur étranger (Sentence AAPL c Sri Lanka)’ (1992) 38 AFDI 501; Ziadé (n 39). 1367 For a detailed survey of different forms of consent (twenty-five varieties) in Indonesia’s BITs, see Churchill Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 203. 1368 See Brown (n 331). 1369 ibid 316.

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investment agreement between the host State and the investor shall, upon the investor’s request, include a provision for the submission of disputes to ICSID.1370 More simply, the BIT may contain an undertaking to assent to any demand by the investor to submit to dispute settlement by the Centre.1371 In Millicom v Senegal, Art. 10 of the Netherlands–Senegal BIT contained the following ICSID clause:

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The Contracting Party in the territory of which a national of the other Contracting Party makes or intends to make an investment shall assent [devra consentir] to any request on the part of such national to submit, for arbitration or conciliation, any dispute that may arise in connection with that investment, to [ICSID].1372

The Tribunal found that this formula amounted to a ‘unilateral offer and a commitment by Senegal to submit itself to ICSID jurisdiction.’1373 It concluded:

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in ratifying the [BIT], the Republic of Senegal gave its general consent to any arbitration that could be subsequently instituted against it in an ICSID proceeding under the conditions prescribed by Article 10.1374

In Churchill Mining v Indonesia, Art. 7(1) of the Indonesia–United Kingdom BIT contained the following clause:

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The Contracting Party in the territory of which a national or company of the other Contracting Party makes or intends to make an investment shall assent to any request on the part of such national or company to submit, for conciliation or arbitration, to [ICSID].1375

The Tribunal found that this provision contained a standing offer to arbitrate any dispute that may arise in connection with an investment.1376 The Tribunal noted that this clause provided only for ICSID arbitration. It also noted the absence of any indication as to how Indonesia was to give its assent and the absence of a discretion to assent.1377 A detailed examination of the BIT’s travaux préparatoires led the Tribunal to the conclusion that ‘the treaty drafters considered the “shall assent” language as functionally equivalent to “hereby consents” or similar wording.’1378 In Planet Mining v Indonesia, an identically composed Tribunal, deciding on the same day, reached a different result on a somewhat differently worded ICSID clause. Art. XI of the Australia–Indonesia BIT provided that the investor may submit a dispute to ICSID, adding that:

1370 See France–Malaysia BIT (signed 24 April 1975, entered into force 1 August 1976) Art. 5. 1371 See Egypt–Japan BIT (signed 28 January 1977, entered into force 14 January 1978) Art. 11; Philippines–United Kingdom BIT (signed 3 December 1980, entered into force 2 January 1981) Art. X; Netherlands–Pakistan BIT (signed 4 October 1988, entered into force 1 October 1989) Art. 10; Australia–Czech Republic BIT (signed 30 September 1993, entered into force 29 June 1994) Art. 11; Japan–Pakistan BIT (signed 10 March 1998, entered into force 29 May 2002) Art. 10. For further examples, see Dolzer and Stevens (n 331) 133; Broches (n 1356) 65–66. 1372 See Millicom v Senegal, Decision on Jurisdiction (16 July 2010) paras 55–66. 1373 ibid para 63. 1374 ibid para 66. 1375 Churchill Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 90. 1376 ibid para 231. 1377 ibid paras 172–175. 1378 ibid para 230.

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schreuer’s commentary on the icsid convention Where that action is taken by an investor of one Party, the other Party shall consent in writing to the submission of the dispute to the Centre within forty-five days of receiving such a request from the investor.1379

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The Tribunal found that this provision contained no standing offer to arbitrate. Rather, a further act on the part of Indonesia would be required to perfect consent.1380 A decisive element in this decision was the time sequence foreseen for Indonesia’s consent after the dispute’s submission to ICSID.1381 The Tribunal found confirmation for this result in the treaty practice of the two States, which indicated that Australia ‘deliberately entertains the distinction between advance consent and promise to consent.’1382

c) Prospect of Future Consent 840

Some BITs provide that the host State give sympathetic consideration to a request for ICSID dispute settlement or that a dispute shall be submitted to ICSID upon the agreement of the disputing parties. For instance, the Kenya–Netherlands BIT of 1970 provides in Art. 11: The Contracting Party in the territory of which a national of the other Contracting Party makes or intends to make an investment, shall give sympathetic consideration to a request on the part of such national to submit for conciliation or arbitration, to the Centre established by the Convention of Washington of 18 March 1965, any dispute that may arise in connection with the investment.1383

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A clause of this kind does not amount to consent by the host State. The most that can be read into it is that consent may not be withheld arbitrarily and that the States parties to the BIT must consider conciliation or arbitration under the ICSID Convention in good faith. Some BITs contemplate a future agreement between the host State and the investor containing consent to ICSID’s jurisdiction. An example is Art. 6 of the Malaysia– Sweden BIT of 1979: In the event of a dispute arising between a national or a company of one Contracting Party and the other Contracting Party in connection with an investment on the territory of that other Contracting Party, it shall upon the agreement by both parties to the dispute be submitted for arbitration to the International Centre for Settlement of Investment Disputes . . .1384

d) Consent to Different Forms of Arbitration 843

The dispute settlement clauses in many BITs refer to ICSID as one of several possibilities. The alternatives contemplated may include the domestic courts of the host

1379 1380 1382 1383 1384

Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 90. ibid para 198. 1381 ibid paras 162–165. ibid para 195. Kenya–Netherlands BIT (signed 11 September 1970, entered into force 11 June 1979) Art. 11. Malaysia–Sweden BIT (signed 3 March 1979, entered into force 6 July 1979) Art. 6; See also Egypt– Sweden BIT (signed 15 July 1978, entered into force 29 January 1979) Art. 6; Sri Lanka–Switzerland BIT (signed 23 September 1981, entered into force 12 February 1982) Art. 9.

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State, procedures agreed to by the parties to the dispute, ICC arbitration, the Arbitration Institute of the Chamber of Commerce of Stockholm, arbitration under the UNCITRAL rules, and other forms of ad hoc arbitration.1385 Some of these composite dispute settlement clauses contemplate a subsequent agreement of the parties to select one of these procedures (see para. 849 infra). Others contain the State’s advance consent to all of them, thereby leaving the choice to the claimant investor when instituting the proceedings. For instance, Art. 7(2) of the Lebanon–Switzerland BIT of 2000 provides:

844

2. If these consultations do not result in a solution within six months from the date of the written request for consultations, the investor may submit the dispute, at his choice, for settlement to: (a) the competent court of the Contracting Party in the territory of which the investment has been made; or (b) the International Center for Settlement of Investment Disputes (ICSID) . . ., once both Contracting Parties have become members of this Convention; or (c) an ad hoc arbitral tribunal which, unless otherwise agreed upon by the parties to the dispute, shall be established under the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL).

As the above example demonstrates, some BITs offering several methods of settlement specify that the choice among them is with the investor.1386 These clauses should be distinguished from contingent submissions where one of the parties to the BIT is not yet a Contracting State to the ICSID Convention. In these cases, the Additional Facility and non-ICSID procedures are envisaged for cases that might arise before both the host State and the investor’s State of nationality have become Contracting States1387 (see paras. 510, 511, 517, 522, 611–615 supra). A comprehensive menu of dispute settlement procedures is typically offered in BITs concluded by the United States.1388 Art. 24(3) of the 2012 US Model BIT provides: 3. Provided that six months have elapsed since the events giving rise to the claim, a claimant may submit a claim referred to in paragraph 1: (a) under the ICSID Convention and the ICSID Rules of Procedure for Arbitration Proceedings, provided that both the respondent and the non-disputing Party are parties to the ICSID Convention; (b) under the ICSID Additional Facility Rules, provided that either the respondent or the non-disputing Party is a party to the ICSID Convention; (c) under the UNCITRAL Arbitration Rules; or (d) if the claimant and respondent agree, to any other arbitration institution or under any other arbitration rules.

1385 See Dolzer and Stevens (n 331) 147 ff; Parra (n 31) 325 ff; Peters (n 1271) 122 ff. 1386 See Paraguay–Switzerland BIT (signed 31 January 1992, entered into force 28 September 1992) Art. 9; Lithuania–Poland BIT (n 35) Art. 7. See also Peters (n 1271) 122 ff. 1387 See Ukraine–United States BIT (signed 4 March 1994, entered into force 16 November 1996) Art. VI; Lemire v Ukraine (AF), Award (18 September 2000) para 4. See also Shihata and Parra (n 460) 347, 351–352. 1388 See eg Argentina–United States BIT (n 32) Art. VII(3). On the choice under the latter provision, see LG&E v Argentina, Decision on Jurisdiction (30 April 2004) para 73.

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Art. 25 of the 2012 US Model BIT adds that each Party to the treaty consents to arbitration and that this consent, and the submission of a claim to arbitration, will satisfy the requirements for consent of the Convention and of the Additional Facility. The alternative between ICSID and Additional Facility depends not on the claimant’s choice, but on whether the treaty partner of the United States is a Party to the Convention. The Additional Facility is accessible only if ICSID proceedings are unavailable. But the possibility of UNCITRAL arbitration is open not only if ICSID is not available but also if the investor, for whatever reason, prefers a dispute settlement method other than ICSID.1389 Some BITs of the United Kingdom provide for a choice by agreement of the parties to the dispute among several methods of dispute settlement. Thus, the parties may agree to ICSID, ICC, or UNCITRAL arbitration. If no agreement can be reached on one of these procedures, UNCITRAL arbitration shall be used.1390 The UK Model Agreement of 2008 provides to this effect in Art. 8 (second alternative): (2) Where the dispute is referred to international arbitration, the national or company and the Contracting Party concerned in the dispute may agree to refer the dispute either to: (a) the International Centre for the Settlement of Investment Disputes (having regard to the provisions, where applicable, of the Convention . . . and the Additional Facility . . .); or (b) the Court of Arbitration of the International Chamber of Commerce; or (c) an international arbitrator or ad hoc arbitration tribunal to be appointed by a special agreement or established under the Arbitration Rules of . . . [UNCITRAL]. If after a period of three months from written notification of the claim there is no agreement to one of the above alternative procedures, the dispute shall at the request in writing of the national or company concerned be submitted to arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law as then in force. The parties to the dispute may agree in writing to modify these Rules.1391

e) Acceptance by the Investor 850

The Convention requires consent in writing by both parties to the dispute. Just as in the case of legislative provisions for the settlement of disputes by ICSID, a provision on consent in a BIT can be no more than an offer that needs to be accepted in order to amount to a consent agreement. The treaty provision cannot replace the need for consent by the foreign investor.1392 The observations made in the context of national legislation concerning the timing, form, and scope of an acceptance by the investor (paras.

1389 See also Kenneth J Vandevelde, ‘US Bilateral Investment Treaties: The Second Wave’ (1993) 14 Mich JIL 621, 655–659, 664–667, 684–685, 691–692. 1390 See Saint Lucia–United Kingdom BIT (n 844) Art. 8. 1391 UK Model IPPA (2008) Art. 8 (Alternative II). 1392 See paras 7, 20, 21, and 22 of the Notes to the Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Agreements, (1969) 8 ILM 1341. See also Laviec (n 1356) 279–280; Parra (n 31) 339 ff.

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814–817 supra) apply equally to BITs. An additional requirement is that the BIT must be between the host State and the State of the investor’s nationality. Under most treaties, an investor may accept an offer of consent contained in a BIT simply by instituting ICSID proceedings. Tribunals have accepted this form of expressing consent in numerous cases. Most investment arbitration cases in recent years are based on consent established in this way. Some tribunals have simply applied this principle without discussing its rationale.1393 Other tribunals have explained the combination of the offer given by the host State through the BIT and the acceptance by the investor through the request for arbitration as resulting in an agreement to arbitrate between the host State and the foreign investor.1394 The Tribunal in AMT v Zaire emphasized the need for the expression of consent by the investor: The requirement of the consent of the parties does not disappear with the existence of the Treaty. The Convention envisages an exchange of consents between the Parties. When Article 25 states in paragraph 1 that ‘the parties’ must have consented in writing to submit the dispute to the Centre, it does not speak of the States or more precisely, it speaks of a State and a national of another State. It appears therefore that the two States cannot, by virtue of Article 25 of the Convention, compel any of their nationals to appear before the Centre; this is a power that the Convention has not granted to the States.1395

1393 AAPL v Sri Lanka, Award (27 June 1990) paras 2–4; Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 30; Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 19; Olguín v Paraguay, Award (26 July 2001) paras 26, 27; Gruslin v Malaysia II, Award (27 November 2000) para 2.3; BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) paras 62–73; Garanti Koza v Turkmenistan, Decision on Jurisdiction (3 July 2013) paras 21–39; ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) paras 264–265; Emmis v Hungary, Award (16 April 2014) para 1; von Pezold and others v Zimbabwe, Award (28 July 2015) paras 192–199. 1394 Lanco v Argentina, Decision on Jurisdiction (8 December 1998) paras 8, 28–33, 43, 44; Goetz v Burundi, Award (10 February 1999) paras 67, 81; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 37, 38; Wena Hotels v Egypt, Decision on Jurisdiction (29 June 1999) (2004) 6 ICSID Reports 74, 87; Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 27; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 56; IBM v Ecuador, Decision on Jurisdiction (22 December 2003) paras 24–30; SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 30–31; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras 94–100; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) paras 69–74; Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 65; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 198; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 108; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 130–132; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 140; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 35–37; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 33–37; ADC v Hungary, Award (2 October 2006) para 363; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 74; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 118; Tokios Tokelės v Ukraine, Award (26 July 2007) para 104; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 94; SGS v Paraguay, Decision on Jurisdiction (12 February 2010) para 70; Millicom v Senegal, Decision on Jurisdiction (16 July 2010) paras 56–66; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 47; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 208; Agility v Pakistan, Decision on Jurisdiction (27 February 2013) paras 157–162; UAB v Latvia, Award (22 December 2017) para 502. 1395 AMT v Zaire, Award (21 February 1997) para 5.18.

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In Generation Ukraine v Ukraine, the Tribunal said: 12.2 . . . it is firmly established that an investor can accept a State’s offer of ICSID arbitration contained in a bilateral investment treaty by instituting ICSID proceedings. There is nothing in the BIT to suggest that the investor must communicate its consent in a different form directly to the State; . . . 12.3 It follows that the Claimant validly consented to ICSID arbitration by filing its Notice of Arbitration at the ICSID Centre.1396

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In Abaclat and others v Argentina, the Tribunal said: Within the context of BIT-based arbitration, it is widely admitted that an arbitration clause contained in a BIT and providing for ICSID arbitration constitutes a valid written offer for ICSID arbitration by the relevant State. . . . Such an offer of consent may be validly accepted by an investor through the initiation of ICSID proceedings.1397

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856

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Acceptance of an offer of consent contained in a BIT is possible not only by way of instituting proceedings. The investor may express its consent in writing at any time during the BIT’s validity even before a dispute has arisen. Withdrawal of an offer of consent contained in a treaty, before its acceptance, is less likely than in the case of national legislation (see para. 816 supra). An ICSID clause in a treaty is more difficult to terminate unilaterally by one of the contracting States. It remains valid notwithstanding an attempt by a party to terminate it, unless there is objectively a basis for termination under the law of treaties. Most BITs contain provisions for their termination often subject to a sunset clause. Termination of BITs is not uncommon and should be considered when planning an investment. The irrevocability of consent provided for in the last sentence of Art. 25(1) operates only after the consent has been perfected through its acceptance by the investor (see further paras. 1061, 1062, 1085–1089 infra). Therefore, early acceptance is advisable.1398 A wise investor will express its consent to ICSID jurisdiction at the earliest possible time. In a number of cases, investors have expressed their consent some time before submitting their request for arbitration.1399 This process was described by the Tribunal in ADC v Hungary in the following terms: Article 25(1) of the ICSID Convention requires the parties’ ‘consent in writing’ to arbitration before the Centre. The consent of Hungary to the institution of the proceedings before ICSID can be found in Article 7(2)(c) of the Treaty. The Claimants consented to ICSID arbitration by their letter of consent dated November 29,

1396 1397 1398 1399

Generation Ukraine v Ukraine, Award (16 September 2003) paras 12.2, 12.3. Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 258. Broches (n 1356) 68–69. Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 44; CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 98; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 32; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 56; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 36; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 37; ADC v Hungary, Award (2 October 2006) para 363; Wintershall v Argentina, Award (8 December 2008) para 10; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 446; Saint-Gobain v Venezuela, Decision on Liability (30 December 2016) paras 359, 360.

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2002 which consent was confirmed by their lodging of their Request for Arbitration with the Centre on July 27, 2003.1400

Some BITs recognize the need for mutual consent by stating that only the investor is entitled to institute proceedings. The clause in German BITs, cited above (para. 832), is an example. While such a one-sided approach to ICSID’s jurisdiction is technically possible, it is not in the interest of the host State to grant access to the Centre to investors without obtaining a reciprocal right to initiate proceedings. Some BITs specifically provide for the giving of consent by the investor. Under these clauses, once the investor has accepted the offer contained in the BIT, either party may start proceedings.1401 UK treaties provide for the reciprocal expression of consent and for access by both parties to the Centre. Art. 8(3) (first alternative) of the United Kingdom Model Agreement of 2008 provides in relevant part:

858

859

If any such dispute should arise and agreement cannot be reached within three months between the parties to this dispute through pursuit of local remedies or otherwise, then, if the national or company affected also consents in writing to submit the dispute to the Centre for settlement by conciliation or arbitration under the Convention, either party may institute proceedings by addressing a request to that effect to the Secretary-General of the Centre as provided in Articles 28 and 36 of the Convention . . .1402

Consent by the investor must be expressed in some positive way and cannot be substituted by the BIT or simply assumed. But there are ways by which an investor may be induced to give consent. Submission to ICSID, or other methods of dispute settlement, may be made a condition for admission of investments in the host State and may form part of the licensing process. BITs may provide specifically that their benefits will extend only to investors that have consented to ICSID’s jurisdiction. They may also provide that diplomatic protection will not be available to an investor that has declined to accept an offer of consent to arbitration contained in a BIT. Suggestions to incorporate clauses to this effect in BITs have found little or no manifestation in practice1403 (see Art. 27, paras. 42–46). The Tribunal in İçkale v Turkmenistan rejected the theory of an offer of consent to arbitration in a BIT which is accepted by the investor, as a contractual analogy that is ‘inaccurate and legally incorrect.’1404 It found that ‘the State parties’ “consent” to arbitrate, which is binding on the State as such, without any further “perfecting,” as a unilateral undertaking vis-à-vis a class of foreign investors.’1405 The Tribunal described the situation as follows: An arbitration agreement included in a contract and an arbitration agreement construed on the basis of a unilateral consent of the State, as expressed in an investment treaty, and the investor’s subsequent invocation of that consent after the dispute has arisen, are

1400 1401 1402 1403

ADC v Hungary, Award (2 October 2006) para 363 (emphasis in the original). AMT v Zaire, Award (21 February 1997) para 5.21. Brown (n 331) 743. See Clauses VII, VIII, and IX of the Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Agreements, (September 1969) (1969) 8 ILM 1341, 1349–1351; Laviec (n 1356) 280. 1404 İçkale v Turkmenistan, Award (8 March 2016) para 244. 1405 ibid.

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schreuer’s commentary on the icsid convention two very different types of agreements. While the former is based on privity, the latter is construed after the fact, once the dispute has arisen, and therefore effectively constitutes a hybrid between an arbitration agreement based on privity and an arbitration agreement based on a compromis.1406

862

This theory of consent as a binding unilateral undertaking, if accepted, would have far-reaching repercussions on the time of consent (see paras. 890–893 infra), on the irrevocability of consent (see paras. 1057–1110 infra), and on the consequences of a denunciation of the ICSID Convention (see Art. 72).

6. Consent Through Multilateral Treaties 863

A number of multilateral treaties also provide for ICSID’s jurisdiction. The underlying mechanism is similar to that in the BITs discussed above. The treaties contain offers of consent to ICSID’s jurisdiction by the States parties to these treaties. These offers may be taken up by investors who are nationals of the other States parties to the treaties.1407

a) NAFTA 864

865

The NAFTA of 1992 between Canada, Mexico, and the United States1408 contains a Chapter 11 on Investments. Its Section A offers a set of substantive rules on investment (Arts. 1101–1114). Section B deals with the ‘Settlement of Disputes between a Party and an Investor of Another Party.’1409 In Art. 1122, the NAFTA Parties gave consent to ICSID and ICSID Additional Facility Arbitration. Art. 1120 provided that after a waiting period of six months, a disputing investor may submit a claim to arbitration under the ICSID Convention, the Additional Facility of ICSID, or under the UNCITRAL Arbitration Rules.1410 As long as Canada and Mexico were not parties to the ICSID Convention, the NAFTA did not operate to confer jurisdiction under the Convention. But ICSID Additional Facility arbitration was available between US investors and Canada or Mexico and between Canadian or Mexican investors and the United States. In disputes between Canadian investors and Mexico or Mexican investors and Canada not even the ICSID Additional Facility was available (see paras. 12–19, 513–518, 614–615 supra). In disputes of the latter kind only UNCITRAL arbitration was available.1411 Therefore, access to ICSID arbitration, Additional Facility arbitration, and UNCITRAL arbitration was largely dictated by the state of ratification of the ICSID Convention and was not a matter of choice. Even where ICSID arbitration or Additional Facility arbitration was available, the investor was able to eschew the Centre and opt for UNCITRAL arbitration. With the accession

1406 1407 1408 1409

ibid. See Parra (n 31) 344 ff, 356; Steingruber (n 1281) 208–212. See NAFTA (n 33). Generally see Guillermo Aguilar Alvarez and William W Park, ‘The New Face of Investment Arbitration: NAFTA Chapter 11’ (2003) 28 Yale JIL 365; James Holbein and Nick Ranieri, North American Free-Trade Agreements: Chapter 11 Investor–State Arbitration (OUP 2007); Meg N Kinnear, Andrea K Bjorklund and John FG Hannaford, Investment Disputes under NAFTA (Kluwer 2006); Barton Legum, ‘The Innovation of Investor–State Arbitration under NAFTA’ (2002) 43 Harvard ILJ 531; Todd Weiler (ed), NAFTA Investment Law and Arbitration: Past Issues, Current Practice, Future Prospects (Brill 2004). 1410 See also USMCA (n 338) Art. 14.D.3. 1411 See Shihata and Parra (n 460) 347–348, 351–352.

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of Canada (2013) and Mexico (2018) to the ICSID Convention, consent to ICSID arbitration became fully applicable.1412 The NAFTA specifically provides that the investor must consent to arbitration (Art. 1121), thereby emphasizing the reciprocal nature of consent to arbitration.1413 However, under the NAFTA, submission of a claim to arbitration is open only to an investor and not to a host State. The NAFTA is in the process of being replaced by the United States–Mexico– Canada Agreement (USMCA, in force as of 1 July 2020). NAFTA’s Chapter 11 remains available to investors from all three countries, should they choose to use it, for three years after the USMCA’s entry into force.

866

867

b) USMCA The USMCA departs from the NAFTA’s investor–State dispute settlement mechanisms in a number of ways. In addition to a new set of substantive rules on the protection of investments, Annex 14-D of the USMCA provides for the settlement of investment disputes between the United States or Mexico and investors of the respective other country. Canada does not participate in this dispute settlement mechanism, though investment disputes between Canada and Mexico are subject to the investor–State arbitration provisions of the Comprehensive and Progressive Agreement for TransPacific Partnership. Investment disputes between Canada and the United States in the USMCA context will presumably be brought, if at all, under the Agreement’s State– State dispute settlement mechanism. Claims under Annex 14-D are restricted to national treatment, most-favored-nation (MFN) treatment and direct expropriation. Under the USMCA, the means of dispute settlement are ICSID arbitration, Additional Facility arbitration, UNCITRAL arbitration or any other form of arbitration agreed to by the parties. The two States explicitly consent to these forms of arbitration. Before proceeding to arbitration, the claimant must initiate proceedings before a competent court or administrative tribunal of the respondent State with respect to the measures alleged to constitute the breach. A claimant may proceed to arbitration if it has obtained a final decision from a court of last resort of the respondent State or thirty months have elapsed from the initiation of the court proceedings. The claim must be submitted to arbitration within four years from the date on which the claimant first acquired or should have first acquired knowledge of the alleged breach. The claimant must consent in writing to arbitration and must waive any right to initiate or continue proceedings in respect of the measure alleged to constitute the breach before any court or administrative tribunal under the law of either State. Annex 14-E, which also applies as between Mexico or the United States and investors of the respective other country, is less restrictive, and permits a claimant who is party to a covered government contract to submit claims for breach of all of the obligations in Chapter 14, including the minimum standard of treatment and the prohibition of certain performance requirements. The procedural requirements of Annex 14-D generally apply, with a few modifications, such as a shorter limitations period of three years. Covered government contracts are those between a national authority of one of the governments and an investment or investor in one of the sectors listed in the Annex. 1412 Canada ratified the ICSID Convention on 1 November 2013, Mexico on 27 July 2018. 1413 See USMCA (n 338) Art. 14.D.5(1)(d).

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869

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c) Energy Charter Treaty 871

The ECT of 1994 between the European Communities and fifty-two, mostly European, States also provides for consent to ICSID’s jurisdiction by the Contracting Parties in relation to investors of all other Contracting Parties (see Art. 26 of the ECT).1414 The Treaty contains an unconditional offer of consent to arbitration or conciliation under the ICSID Convention or the Additional Facility, whichever may be available. Art. 26 of the ECT specifically requires consent in writing also on the part of the investor. Apart from the ICSID Convention or the Additional Facility, the investor is given the choice of the courts and administrative tribunals of the host State, previously agreed procedures, UNCITRAL arbitration, and arbitration in the framework of the Arbitration Institute of the Stockholm Chamber of Commerce. The Article only envisages the submission of a claim by the investor, but not by the host State.

d) Other Regional Treaties 872

873

874

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)1415 contains a Chapter 9 dealing with investment. Section A of that Chapter addresses substantive protections. Section B addresses investor–State dispute settlement. Art. 9.19 provides for submission of a claim to arbitration under the ICSID Convention, the Additional Facility, and the UNCITRAL Arbitration Rules. The Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) of 20041416 comprises the United States, five Central American countries (Costa Rica, Honduras, Nicaragua, El Salvador, and Guatemala), and the Dominican Republic. Chapter 10 Section B of the DR–CAFTA provides for submission, at the investor’s choice, to ICSID, Additional Facility, and UNCITRAL arbitration. Other regional treaties providing for ICSID and ICSID Additional Facility arbitration include the Treaty on the Eurasian Economic Union,1417 the Eurasian Investment Agreement,1418 the Association of Southeast Asian Nations (ASEAN) Comprehensive

1414 See ECT (n 33) Art. 26. For further discussion, see Thomas W Wälde, ‘International Investment under the 1994 Energy Charter Treaty’ (1995) 29 JWT 5, 56–63; Kenneth J Vandevelde, ‘Arbitration Provisions in the BITs and the Energy Charter Treaty’ in Thomas W Wälde (ed), The Energy Charter Treaty (Kluwer 1996) 409, 413; Richard Happ, ‘Dispute Settlement under the Energy Charter Treaty’ (2002) 45 German YBIL 331; Thomas W Wälde, ‘Energy Charter Treaty-Based Investment Arbitration Controversial Issues’ (2004) 5 JWIT 373; Kaj Hobér, ‘The Energy Charter Treaty: An Overview’ (2007) 8 JWIT 323; Graham Coop and Clarisse Ribeiro (eds), Investment Protection and the Energy Charter Treaty (Juris 2008); Thomas Roe and Matthew Happold, Settlement of Investor–State Disputes under the Energy Charter Treaty (CUP 2011); Graham Coop, ‘20 Years of the Energy Charter Treaty’ (2014) 29 ICSID Rev 515; Emmanuel Gaillard and Mark McNeill, ‘The Energy Charter Treaty’ in Yannaca-Small (n 255) 2.01. 1415 On 30 December 2018, the CPTPP entered into force among the first six countries to ratify the agreement: Canada, Australia, Japan, Mexico, New Zealand, and Singapore. On 14 January 2019, the CPTPP entered into force for Viet Nam. 1416 See Gabriel Bottini, Veronica Lavista and Mariana Lozza, ‘MERCOSUR and CAFTA’ in Bungenberg and others (n 18) 332–341. 1417 Treaty on the Eurasian Economic Union (signed 29 May 2014, entered into force 1 January 2015). Annex 16: Protocol on Trade in Services, Incorporation, Activities and Investments, para 85(4). 1418 Agreement on Promotion and Reciprocal Protection of Investments in the Member States of the Eurasian Economic Community (signed 12 December 2008, entered into force 11 January 2016) Art. 9(2)(d).

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Investment Agreement,1419 and several agreements concluded by ASEAN, such as the ASEAN–Australia–New Zealand Free Trade Agreement,1420 the ASEAN–Korea Investment Agreement,1421 or the ASEAN–China Investment Agreement.1422

e) Non-Binding References to ICSID Some multilateral instruments contain reference to ICSID dispute settlement without offering consent on the part of the participating States. In this regard, they are similar to some provisions in national legislation and in BITs (see paras. 798, 799, 840–842 supra). Art. X of the 1987 ASEAN Agreement for the Promotion and Protection of Investments1423 foresaw several methods of dispute settlement, including ICSID. However, the choice was subject to an agreement between the parties to the dispute. If no agreement could be reached, the dispute was to go to ad hoc arbitration. Therefore, this clause could be seen as consent to jurisdiction under the ICSID Convention.1424 The 1992 World Bank Guidelines on the Treatment of Foreign Direct Investment1425 are not a binding instrument and as such incapable of forming the basis of consent by States. They encourage States to submit disputes with investors to arbitration under the ICSID Convention or the ICSID Additional Facility Rules.1426

875

876

877

7. The Temporal Elements of Consent Jurisdiction ratione temporis can raise complex problems. Timing issues may arise in the context of the time of the dispute (see para. 79 supra), pre-investment activities (see paras. 382–397 supra), the Respondent’s participation in the Convention at the relevant times (see paras. 497–512 supra; see also Arts. 71, 72), the designation of a constituent subdivision or agency (see paras. 564–570 supra), the participation of the investor’s State of nationality in the Convention (see paras. 599–601 supra), and the investor’s nationality (see paras. 1161–1170, 1242–1261, 1409–1438 infra), as well as the timing of an approval of consent by a constituent subdivision or agency (see paras. 1462–1464 infra). All jurisdictional requirements must have been met at the time of the institution of proceedings. Consent to ICSID’s jurisdiction raises several inter-temporal issues. The exact time of consent depends on the documents establishing it as well as on participation in the Convention. Treaties offering consent may contain additional temporal restraints. The consequences of the time of consent can be far-reaching. They relate to the

1419 ASEAN Comprehensive Investment Agreement (signed 26 February 2009, entered into force 29 March 2012) Art. 33(1)(b) and (c). 1420 Agreement Establishing the ASEAN–Australia–New Zealand Free Trade Area (signed 27 February 2009, entered into force 10 January 2010) ch 11, Art. 21(1)(b) and (c). 1421 ASEAN–Korea Investment Agreement (signed 2 June 2009, entered into force 1 September 2009) Art. 18(5)(a) and (b). 1422 ASEAN–China Investment Agreement (signed 15 August 2009, entered into force 1 January 2010) Art. 14(4)(b) and (c). 1423 (1988) 27 ILM 612. The Agreement has been replaced by the ASEAN Comprehensive Investment Agreement (n 1419). 1424 See Yaung Chi v Myanmar (ad hoc), Award (31 March 2003). 1425 (1992) 31 ILM 1363, 1379. 1426 Guideline V, ibid 1384.

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879

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exclusion of other remedies, the irrevocability of consent, the denunciation of the ICSID Convention, the possibility of diplomatic protection, and the Rules and Regulations applicable to proceedings. The events and disputes covered by consent also depend on its timing.

a) Time of Consent 880

Rule 2(3) of the Institution Rules provides: ‘Date of consent’ means the date on which the parties to the dispute consented in writing to submit it to the Centre; if both parties did not act on the same day, it means the date on which the second party acted.

881

882

883

The possibility that the parties did not act on the same day covers two situations. A single instrument, such as an investor–State contract, may be signed on different days. Alternatively, the consent may be expressed not in one, but in two or several instruments. If the consent clause is contained in an offer by one party, its acceptance by the other party will determine the time of consent. For instance, the offer may be made in an investment application by the investor that is subsequently approved by the host State. This was the situation in Amco v Indonesia (see para. 776 supra).1427 The date of acceptance is particularly important if the host State makes a general offer to consent to ICSID’s jurisdiction in its legislation or in a treaty. In this situation, the time of consent is determined by the investor’s acceptance of the offer. At the latest, this offer may be accepted through bringing a request for conciliation or arbitration to the Centre1428 (paras. 814–824, 850–862 supra). If the claimant accepts the offer of consent through its request for arbitration, the date of the filing of the request will be the date of consent.1429 The investor is under no time constraints to accept the offer, and thus to complete the consent, unless the offer, by its own terms, provides for acceptance within a certain period of time. But it should be borne in mind that consent, once completed, has several legal consequences and its timing is relevant for a number of questions under the Convention, such as withdrawal of consent, nationality of the investor, exclusion of other remedies, diplomatic protection, denunciation and for various intertemporal rules (see paras. 890–893 infra).

b) Contingent Expression of Consent 884

Some expressions of consent are contingent upon the fulfillment of a future condition for jurisdiction. Contingent submissions to the Centre are expressions of consent based on the expectation that the conditions will be met in the future (see paras. 510–512, 611–613 supra). They become effective upon the fulfillment of the outstanding conditions.

1427 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 10, 25. 1428 Amerasinghe, ‘Submissions’ (n 26) 217; Broches (n 827) 643; Steingruber (n 1281) 212–216. 1429 Venoklim v Venezuela, Award (3 April 2015) paras 76–79; Rusoro Mining v Venezuela (AF), Award (22 August 2016) paras 266–268; Blue Bank v Venezuela, Award (26 April 2017) paras 113–116. By contrast, in Raiffeisen Bank v Croatia, Decision on Jurisdiction (30 September 2020) para 143, the Tribunal found the date of the request’s registration to be relevant.

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In some cases, the conditions ratione personae for the Centre’s jurisdiction have not yet been met when the document containing the consent clause is signed. For instance, the host State, or the State of the investor’s nationality, may not yet have ratified the Convention. In such a case, the date of consent will be the date on which all the conditions have been met.1430 If the host State ratifies the Convention after the effective date of the consent agreement, the time of consent will be the entry into force of the Convention for the host State in accordance with Art. 68(2) (see paras. 503–512 supra). The same applies to a ratification of the Convention by the State of the investor’s nationality subsequent to the effective date of the agreement containing the consent clause (see paras. 611, 612 supra). If the consent agreement is made with a constituent subdivision or agency that has not yet been designated by the host State, the date of consent will be the date of designation (see paras. 564–566 supra). Effective consent by a constituent subdivision or agency may also be delayed until it is approved by the host State or a notification is made that no such approval is necessary (see paras. 1446–1471 infra). In Holiday Inns v Morocco, no fewer than three conditions for the full validity of consent were lacking at the time the agreement containing the consent clause was signed: (i) the host State had not yet ratified the Convention (see para. 504 supra); (ii) the investor’s home State had not yet ratified the Convention (see para. 612 supra); and (iii) one of the corporate parties to the dispute had not yet been created (see paras. 644, 645 supra). The Tribunal noted that all these defects had been cured before the institution of proceedings and stated that ‘it is the date when the conditions are definitely satisfied . . . which constitutes in the sense of the Convention the date of consent.’1431 In Generation Ukraine v Ukraine, the entry into force of the BIT between Ukraine and the United States on 16 November 1996 antedated the entry into force of the ICSID Convention for Ukraine on 7 July 2000. The Respondent argued that its consent, expressed in the BIT, was only ‘preliminary’ and subject to ‘final’ consent once the Convention came into force for Ukraine.1432 The Tribunal rejected this argument. It noted that there was nothing in the BIT that suggested that its consent was only preliminary. The Tribunal said: Ukraine’s consent to ICSID arbitration in Article VI(3) of the BIT was naturally conditional upon a future event, viz. Ukraine’s ratification of the ICSID Convention. This no doubt explains the proviso to the consent in Article 3(a)(i) which states: ‘provided that the Party is a party to [the ICSID] Convention’. But Ukraine’s free standing consent to ICSID arbitration was perfected as soon as the ICSID Convention entered into force for Ukraine on 7 July 2000. Ukraine did not make any reservation to the BIT whereby it could reassess the status of its consent once the condition precedent for its full validity had been fulfilled.1433

1430 Broches (n 1001) 75; Delaume, ‘Le Centre’ (n 163) 781. 1431 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 146). See also Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 2.18, 4.09, 5.24. 1432 Generation Ukraine v Ukraine, Award (16 September 2003) para 12.1. 1433 ibid para 12.6.

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886

887

378 888

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The Tribunal concluded that Ukraine’s consent was valid since the condition precedent to the Ukraine’s offer to arbitrate had been fulfilled by the date of the institution of proceedings.1434 In Autopista v Venezuela, the contract clause expressing the parties’ consent was subject to a condition: the transfer of the company’s majority share to a national of another Contracting State. The Tribunal found that the consent had become effective on the date of the share transfer.1435

c) Relevance of the Time of Consent 890

891

892

893

Consent to the jurisdiction of the Centre triggers a number of legal consequences under the Convention. Perhaps the most important one is that consent, once perfected, becomes irrevocable under the last sentence of Art. 25(1) (see paras. 1057–1110 infra). The nationality of the foreign investor under Art. 25(2) is determined by reference to the date of consent. Natural and juridical persons must be nationals of another Contracting State on the date of consent (see paras. 1161–1170, 1242–1261, 1409–1438 infra). Consent to the jurisdiction of the Centre will, unless otherwise stated, exclude other remedies pursuant to Art. 26 of the Convention. Therefore, resort to domestic courts or to other forms of arbitration becomes unavailable, in principle, from the date of consent. Similarly, under Art. 27(1) diplomatic protection by the investor’s State of nationality is no longer permitted once the parties have consented to the jurisdiction of the Centre (see Art. 27, paras. 39–46). The parties’ rights and duties under the Convention are frozen from the date of consent. Under Art. 66(2), an amendment to the Convention will not apply with respect to consent given before the amendment’s entry into force (see Art. 66, paras. 12, 13). Similarly, under Art. 72 a denunciation of the Convention by a State in accordance with Art. 71 will not affect a consent given before the date of the denunciation (see Art. 72, para. 2). By the same token, declarations by States excluding certain territories from the application of the Convention under Art. 70 will not affect a consent once it is given (see Art. 70, para. 4). The date of consent will determine which version of the ICSID Arbitration Rules applies. Arts. 33 and 44 of the Convention provide that proceedings will be conducted in accordance with the Conciliation Rules and Arbitration Rules in effect on the date on which the parties have given their consent (see Art. 44, paras. 48–59). The parties may agree otherwise. But if they do not, it is not the Rules in their latest version that apply, but those in force on the date of consent. The idea is to protect the parties against amendments that might not suit them.1436 On the other hand, where a claimant accepts an offer of consent contained in a BIT on the occasion of instituting proceedings, the latest amended version of the ICSID Rules will normally apply irrespective of the date of conclusion or entry into force of the BIT.

1434 ibid para 12.8. In the same sense, Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 91–94. 1435 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 89–91. 1436 See Introductory Note D to the Arbitration Rules of 1968, (1993) 1 ICSID Reports 65.

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d) Consent at the Time of the Institution of Proceedings The jurisdictional requirements under the Convention must be met on the date of the institution of proceedings (see paras. 44–67 supra).1437 The opening sentence of para. 24 of the Executive Directors’ Report states that:

894

24. Consent of the parties must exist when the Centre is seized (Articles 28(3) and 36(3)) but the Convention does not otherwise specify the time at which consent should be given.1438

Rule 2(1)(c) of the Institution Rules directs that a request for conciliation or arbitration must:

895

indicate the date of consent and the instruments in which it is recorded, including, if one party is a constituent subdivision or agency of a Contracting State, similar data on the approval of such consent by that State unless it had notified the Centre that no such approval is required.1439

Rule 2(2) requires that this information must be supported by documentation. If the party wishing to institute proceedings cannot supply documentation of written consent to the jurisdiction of the Centre, the Secretary-General will find that the dispute is manifestly outside the jurisdiction of the Centre and will refuse to register it in accordance with Arts. 28(3) and 36(3) of the Convention. But a decision on the validity and scope of consent is left to the conciliation commission or arbitration tribunal in accordance with Arts. 32 and 41. Tribunals have found consistently that the relevant date for the determination of jurisdiction is the date of the institution of proceedings.1440 In Tradex v Albania, the Claimants relied on the Albania–Greece BIT as one of two bases for jurisdiction (see paras. 783, 815, 827 supra). The Tribunal noted that the Request for Arbitration was dated 17 October 1994, but that the BIT had come into force only on 4 January 1995. It found that jurisdiction must be established on the date of the filing of the claim and rejected the BIT as a basis for jurisdiction.1441 In Rumeli Telekom v Kazakhstan, the Respondent had expressed its consent to ICSID arbitration in its 1994 Foreign Investment Law (FIL). The Claimants made their investments from 1998 to 2002. The FIL was abrogated as of January 2003 before the institution of ICSID proceedings in July 2005. Art. 6(1) of the FIL provided that in case of a deterioration of the investor’s situation due to a change of legislation ‘the legislation shall be applied which had been current at the making of the investment.’ The Tribunal found that it had jurisdiction on the basis of Art. 6(1) and on the basis of the doctrine of acquired rights1442 (see para. 1083 infra). 1437 See Schreuer (n 50). 1438 (1993) 1 ICSID Reports 23, 28. 1439 See also Cable TV v St Kitts and Nevis, Award (13 January 1997) para 5.08. 1440 Goetz v Burundi, Award (10 February 1999) para 72; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 31; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 60–64; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 174–178; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 135–136; Enron v Argentina, Award (22 May 2007) paras 196–198, 396; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 259; Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) paras 167, 168. 1441 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 58. 1442 Rumeli v Kazakhstan, Award (29 July 2008) paras 333–335.

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896

897 898

899

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In ABCI Investments v Tunisia, Art. 20 of Tunisia’s 1969 Investment Law contained an offer of consent to ICSID arbitration. In 1993, Tunisia repealed the 1969 Law and replaced it with a new Law that did not contain consent to ICSID arbitration. The Request for Arbitration was submitted in 2003. The majority of the Tribunal found that the Claimant had implicitly accepted the offer of consent to arbitration under the 1969 Law before its abrogation1443 (see further para. 823 supra).

e) Consent after the Institution of Proceedings: Forum Prorogatum 901

902

903

Both the Working Paper and the Preliminary Draft foresaw consent not only by way of an agreement prior to the institution of proceedings, but also by the ‘acceptance . . . of jurisdiction in respect of a dispute submitted to the Center by another party’ (History, Vol. I, p. 112). The idea is based on a practice of the International Court of Justice, whereby failure to contest jurisdiction by the respondent State is deemed to be consent to the Court’s jurisdiction.1444 This would have allowed a claimant to bring a claim to the Centre without previous consent. The decision on jurisdiction would have depended on whether the respondent contests or accepts the jurisdiction in the particular case. After relatively little debate (History, Vol. II, pp. 323, 402, 403, 470, 706), Mr. Broches retracted the suggestion since he recognized that the host State’s refusal of consent under these circumstances might do damage to its reputation (ibid., pp. 499, 509, 540, 566, 711). Subsequent drafts and the Convention make no reference to this possibility and the Secretary-General’s screening power with respect to consent would appear to make this method of obtaining consent impossible.1445 The impossibility of forum prorogatum does not, however, affect the possibility to waive certain jurisdictional requirements before the tribunal. There are also good practical reasons for not proceeding with a request that is unsupported by documentation of consent by the other party. It does not make much sense to go through the procedure of constituting a commission or tribunal if it is likely that it will find that there is no jurisdiction. Therefore, manifest absence of consent is an absolute bar against registration of a request, which takes place on the basis of the information presented by the requesting party. Some BITs provide for the giving of consent by the host State after the institution of proceedings. The Australia–Indonesia BIT in Art. XI(4)(a) foresees the following procedure where an investor has referred a dispute to ICSID: Where that action is taken by an investor of one Party, the other Party shall consent in writing to the submission of the dispute to the Centre within forty-five days of receiving such a request from the investor.1446

904

In Planet Mining v Indonesia, the Tribunal described the resulting dilemma in the following terms: 1443 ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) paras 89–134. 1444 Terry D Gill (ed), Rosenne’s The World Court (6th edn, Martinus Nijhoff 2003) 73; Sienho Yee, ‘Article 40’ in Andreas Zimmermann and others (eds), The Statute of the International Court of Justice: A Commentary (3rd edn, OUP 2019) paras 115–133. 1445 Broches (n 13) 270 ff; Masood (n 122) 123–124; Kovar (n 155) 49. 1446 Australia–Indonesia BIT (signed 17 November 1992, entered into force 29 July 1993, terminated 6 August 2020) Art. XI(4)(a).

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The mechanism contemplated in Article XI(4) poses a difficulty in the ICSID framework. Indeed, in the ICSID regime, consent must exist on the day of the filing of the request for arbitration. This derives from Institution Rule 2(1)(c) which provides that the request for arbitration must indicate the date of consent, and from Institution Rule 2(2) which requires consent to be documented. Further, Article 36(3) of the ICSID Convention directs the Secretary-General to refuse to register a request for arbitration when consent is manifestly lacking. To achieve consent on the day of filing, the investor would have to seek consent before it files its request. Although this solution is conceivable, it does not reflect what Article XI(4) says.1447

The absence of a documented consent should be distinguished from a situation where the existence of a valid consent is merely unclear or where the precise scope of the consent (see paras. 948–980 infra) is subject to doubt. These are questions that are to be decided by the commission or tribunal under Arts. 32 and 41, and it is in these proceedings that the position taken by the respondent may become relevant. A respondent’s failure to appear before the commission or tribunal cannot be interpreted as an admission of jurisdiction. Logic militates against interpreting absence from the proceedings as implicit consent to jurisdiction. Moreover, Art. 45 expressly states that failure of a party to appear, or to present his or her case, shall not be deemed an admission of the other party’s assertions. What if the respondent does appear and fails to raise objections to the tribunal’s jurisdiction, proceeds to plead on the merits concerning matters that are beyond the scope of its original consent, or even explicitly states that it wishes to confirm or extend its earlier consent? Is the tribunal under an obligation to examine the question of jurisdiction from the perspective of consent as it existed at the time of the registration of the request, and must it decline jurisdiction if consent was absent or incomplete at that time? One Tribunal seems to have thought so,1448 relying on the Report of the Executive Directors which stated that ‘[c]onsent of the parties must exist when the Centre is seized.’1449 However, the Convention does not give a clear answer to this question. Arts. 32 and 41 merely provide that the respondent may raise an objection to jurisdiction or competence, that the commission or tribunal must consider the objection and that it is the commission or tribunal which decides on its competence. The Convention does not say whether the commission or tribunal must examine the Centre’s jurisdiction and, if necessary, decline its competence if the matter is uncontested. But Arbitration Rule 41(2) and Conciliation Rule 29(2) state that the tribunal or commission may, at any stage of the proceedings, consider the question of its jurisdiction on its own initiative. A mere delay in the raising of a jurisdictional objection will not be interpreted as implied consent given in the course of proceedings1450 (see also Art. 41, paras. 58–63). In Gruslin v Malaysia II, the Respondent had not, at first, raised the objection that the investment did not comply with the condition that it had to be an ‘approved project’ as 1447 1448 1449 1450

Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 166 (footnotes omitted). Zhinvali v Georgia, Award (24 January 2003) para 407. See also ibid paras 313–327. (1993) 1 ICSID Reports 23, 28, para 24. See Christoph Schreuer, ‘Belated Jurisdictional Objections in ICSID Arbitration’ in Miguel Ángel Fernández-Ballesteros and David Arias (eds), Liber Amicorum Bernardo Cremades (La Ley 2010) 1081.

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required by the applicable BIT. The Sole Arbitrator found that the host State’s initial failure to insist on that condition did not extend its consent as expressed in the BIT. Therefore, the host State was not precluded from raising non-compliance with that condition later on.1451 On the other hand, there are good reasons to assume that defects of jurisdiction through lack of consent may be cured after the institution of proceedings. If there is no disagreement on consent between the parties, it does not make sense for the commission or tribunal to decide that it lacks competence. This would force the parties to record their consent in writing before resubmitting the request to the Centre, which, in turn, would then have to repeat the process of constituting the commission or tribunal.1452 There is an even more serious argument. If the defect in the consent cannot be cured implicitly or even explicitly by the parties during the proceedings, but remains an objective bar to the Centre’s jurisdiction, it may be raised at any time especially as a ground for annulment. Under these circumstances, a party might be tempted not to raise an objection to jurisdiction, while it is still optimistic about the outcome of the case. Once it becomes clear, however, that it has lost the case on the merits, lack of consent might be brought forward to argue that the tribunal has manifestly exceeded its powers. Even if one takes the strict attitude that consent must have been fully perfected before the institution of proceedings, it is impossible to deny that a party must be estopped from arguing lack of consent after not raising it as a jurisdictional objection at an early stage in the proceedings and after pleading on the merits.1453 This question is related to the procedural question of the tribunal’s or commission’s power to determine its own competence under Arts. 32 and 41 (see Art. 41, paras. 64–82). Rule 29(1) of the Conciliation Rules and Rule 41(1) of the Arbitration Rules provide that a jurisdictional objection must be made as early as possible and, in principle, no later than at the end of the time limit for the counter-memorial. In Amco v Indonesia, Indonesia argued in the annulment proceedings that the acts of the army and police personnel in seizing the hotel, if illegal under international law, constituted an international tort and not an investment dispute. The Tribunal’s jurisdiction, as accepted by the Parties’ consent, only extended to investment disputes and not to torts. Therefore, Indonesia argued, the Tribunal had manifestly exceeded its powers. The ad hoc Committee, apart from rejecting the distinction between international torts and investment disputes, found that Indonesia was precluded from challenging the jurisdiction of the Tribunal since it had, in the course of the annulment proceedings, expressly waived the claims of nullity relating to the Tribunal’s jurisdiction.1454 The question at issue was not so much the scope of consent, but rather the nature of the dispute. But the ad hoc Committee did accept the principle that jurisdictional objections, once they have been waived, cannot be reintroduced. In SPP v Egypt, the question of consent after the institution of proceedings also arose in a somewhat peripheral way. The original request for arbitration had been made by SPP(ME). During the hearings on jurisdiction, SPP(ME) was joined on the Claimant’s side by SPP, the parent company. The parties agreed on this move, which was accepted 1451 Gruslin v Malaysia II, Award (27 November 2000) paras 18.1–18.4, 19.3. 1452 Broches (n 13) 277–278. 1453 See also Szasz (n 120) 26. 1454 Amco v Indonesia, Decision on Annulment (16 May 1986) paras 67–69.

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by the Tribunal (see para. 698 supra).1455 This procedure was criticized in the Dissenting Opinion on the ground that under Art. 36(2) the consent to arbitration had to precede the request for arbitration and that there was nothing to show that SPP had consented to the jurisdiction of the Centre before its intervention.1456 In Klöckner v Cameroon, there was a series of successive agreements between the parties. A Protocol of Agreement of December 1971 laid down the general outline of the investment operation. It contained an ICSID arbitration clause. This was followed by a Supply Contract also containing an ICSID arbitration clause. Subsequently, a Management Contract was concluded between Klöckner and SOCAME, a company owned jointly by the Government and by Klöckner. This contract contained not an ICSID clause, but an ICC arbitration clause. ICSID arbitration was initiated in 1981 by Klöckner on the basis of the ICSID clause in the Supply Contract.1457 Before the Tribunal, the Respondent Government not only accepted ICSID jurisdiction on that basis, but actually broadened it by invoking the ICSID clause in the Protocol of Agreement. This extension of jurisdiction was accepted by the Claimant. The Respondent then brought a counterclaim arising from the Claimant’s management of the operation. The Claimant opposed the counterclaim, arguing that it was governed by the Management Contract, which was subject to ICC and not to ICSID arbitration. The Tribunal accepted its competence over the counterclaim, saying that the initial Protocol of Agreement had already provided, in principle, for the technical and commercial management of the operation by Klöckner ‘ensured by a Management Contract.’ After restating the Claimant’s position with regard to the Management Contract, and its acceptance of the Protocol of Agreement, as an additional basis for jurisdiction, the Tribunal said:

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Once the Centre has been validly seized (as it was in this case by Klöckner’s Request), consent as to the ‘ratione materiae’ extent of the Tribunal’s jurisdiction may be expressed at any time, even in written submissions to the Tribunal (‘forum prorogatum’). On this score, the Report of the Executive Directors of the World Bank indicates at paragraph 24 that ‘the Convention does not . . . specify the time at which consent should be given.’1458

The quotation from the Report of the Executive Directors misrepresents its contents. The original says that consent must exist when the Centre is seized, but the Convention does not otherwise specify the time at which consent should be given (see para. 894 supra).1459 More importantly, consent with regard to the Protocol of Agreement existed when the original request for arbitration was made, but was merely not invoked in the request. Therefore, it is questionable whether the concept of forum prorogatum was relevant in that case.1460

1455 1456 1457 1458 1459 1460

SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 14. ibid, Dissenting Opinion El Mahdi (14 April 1988) (1995) 3 ICSID Reports 184. Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 10, 13. ibid 14. Cf also ibid, Dissenting Opinion Schmidt (1994) 2 ICSID Reports 91. See also the criticism by the ad hoc Committee in Klöckner v Cameroon, Decision on Annulment (3 May 1985) paras 5–11.

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In Mamidoil v Albania, the Claimant, in its Request for Arbitration, invoked the Albania–Greece BIT as the basis for the Tribunal’s jurisdiction. In its Memorial, the Claimant, additionally, relied on the ECT. The Respondent did not object to the Tribunal’s jurisdiction on the basis of the ECT, but responded to the substance of the alleged breaches of the ECT.1461 The Tribunal accepted its competence to examine the legality of the Respondent’s actions also on the basis of the ECT. It said: to the extent the Parties both took positions as to the propriety of the Respondent’s conduct under the ECT, for this reason alone the Tribunal will consider the ECT when addressing the existence and legality of an investment under each of the BIT and the ECT and Respondent’s compliance with both the BIT and the ECT.1462

920

It follows that a conciliation commission or arbitral tribunal must examine its competence carefully on the basis of any objections to the Centre’s jurisdiction, but also proprio motu (see also Art. 41, paras. 64–82). If the commission or tribunal finds that there is agreement between the parties to the proceedings on the existence, validity, and scope of their consent at the time of its decision on jurisdiction, it may proceed on the basis of that agreement. In other words, agreement between the parties before the commission or tribunal would cure any defects concerning consent that may have existed at the time proceedings were instituted. A mere delay in raising a jurisdictional objection would not support the existence of an agreement of this kind. But a party that has indicated its consent during the proceedings, either explicitly or by pleading on the merits of the case, without objecting that consent was lacking, defective, or too narrow, is precluded from raising such an objection later on. This preclusion would apply to the original proceedings as well as to any annulment proceedings.

f ) Events and Disputes Prior to Consent 921

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BITs frequently provide that they shall apply also to investments made before their entry into force.1463 Some BITs state, however, that they shall not apply to disputes that have arisen before that date. Under provisions of this kind, the decisive time for the applicability of the consent to arbitration is the time at which the dispute has arisen. The exact determination of the time of the dispute has led to some difficulties. The time of the dispute is not identical with the time of the events leading to the dispute. Typically, the incriminated acts will have occurred some time before the dispute. Therefore, the exclusion of disputes occurring before a certain date cannot be read as excluding jurisdiction over events occurring before that date. A dispute requires not only the development of the events to a degree where a difference of legal positions becomes apparent, but also the existence of communication between the parties that demonstrates that difference1464 (see further paras. 71–78 supra). 1461 Mamidoil v Albania, Award (30 March 2015) paras 267–278. 1462 ibid para 278. 1463 Genin v Estonia, Award (25 June 2001) para 326; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 153; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 211; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) paras 196–201; OKO v Estonia, Award (19 November 2007) paras 184–186; Bayindir v Pakistan, Award (27 August 2009) para 131; H&H v Egypt, Decision on Jurisdiction (5 June 2012) paras 52–56. 1464 Levy and Gremcitel v Peru, Award (9 January 2015) para 167; Philip Morris v Australia (UNCITRAL), Award on Jurisdiction and Admissibility (17 December 2015) para 532. See Nick

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In Maffezini v Spain, the Respondent challenged ICSID’s jurisdiction, alleging that the dispute originated before the entry into force of the Argentina–Spain BIT. The Claimant relied on facts and events that pre-dated the BIT’s entry into force but argued that a ‘dispute’ arises only when it is formally presented as such. This, according to the Claimant, had occurred only after the BIT’s entry into force.1465 The Tribunal distinguished between the events giving rise to the dispute and the dispute itself. After noting that the events on which the parties disagreed began years before the BIT’s entry into force, the Tribunal said that ‘this does not mean that a legal dispute as defined by the International Court of Justice can be said to have existed at the time.’1466 The Tribunal described the development towards a dispute in the following terms:

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there tends to be a natural sequence of events that leads to a dispute. It begins with the expression of a disagreement and the statement of a difference of views. In time these events acquire a precise legal meaning through the formulation of legal claims, their discussion and eventual rejection or lack of response by the other party. The conflict of legal views and interests will only be present in the latter stage, even though the underlying facts predate them. It has also been rightly commented that the existence of the dispute presupposes a minimum of communications between the parties, one party taking up the matter with the other, with the latter opposing the Claimant’s position directly or indirectly. This sequence of events has to be taken into account in establishing the critical date for determining when under the BIT a dispute qualifies as one covered by the consent necessary to establish ICSID’s jurisdiction.1467

On that basis, the Tribunal reached the conclusion that the dispute in its technical and legal sense had begun to take shape after the BIT’s entry into force: ‘At that point, the conflict of legal views and interests came to be clearly established, leading not long thereafter to the presentation of various claims that eventually came to this Tribunal.’1468 It followed that ICSID had jurisdiction and that the Tribunal was competent to consider the dispute. In Lucchetti v Peru, the Chile–Peru BIT similarly provided that it would not apply to disputes that arose prior to its entry into force. A series of administrative measures by local authorities had denied or withdrawn construction and operating licenses from the investors. The investors had successfully challenged the earlier administrative acts through court proceedings that took place entirely before the BIT’s entry into force. A few days after the BIT’s entry into force, the municipality issued further adverse decrees. The Tribunal found that the dispute had already arisen before the BIT’s entry into force and declined jurisdiction.1469 In Jan de Nul v Egypt, the BIT between the Belgo-Luxembourg Economic Union (BLEU) and Egypt also provided that it would not apply to disputes that had arisen prior to its entry into force. A dispute already existed when, in 2002, the BIT replaced an earlier BIT of 1977. At that time, the dispute was pending before the Administrative

1465 1466 1468 1469

Gallus, The Temporal Scope of Investment Protection Treaties (BIICL 2008); Noah Rubins and Ben Love, ‘Ratione Temporis’ in Bungenberg and others (n 18) 481. Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 92, 93. ibid para 95. 1467 ibid para 96 (footnote omitted). ibid para 98. Lucchetti v Peru, Award (7 February 2005) paras 48–59. An application for the annulment of the Award was not successful: see Lucchetti v Peru, Decision on Annulment (5 September 2007).

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Court of Ismaïlia which eventually rendered an adverse decision in 2003, approximately one year after the new BIT’s entry into force. The Tribunal accepted the Claimants’ contention that the dispute before it was different from the one that had been brought to the Egyptian court. It found that: while the dispute which gave rise to the proceedings before the Egyptian courts and authorities related to questions of contract interpretation and of Egyptian law, the dispute before this ICSID Tribunal deals with alleged violations of the two BITs.1470

928

This conclusion was confirmed by the fact that the court decision was a major element of the complaint. The Tribunal, concluding that it had jurisdiction over the claim, said: The intervention of a new actor, the Ismaïlia Court, appears here as a decisive factor to determine whether the dispute is a new dispute. As the Claimants’ case is directly based on the alleged wrongdoing of the Ismaïlia Court, the Tribunal considers that the original dispute has (re)crystallized into a new dispute when the Ismaïlia Court rendered its decision.1471

929

Helnan v Egypt concerned a clause in the Denmark–Egypt BIT which excluded its applicability to divergences or disputes that had arisen prior to its entry into force. The Tribunal distinguished between divergences and disputes in the following terms: Although, the terms ‘divergence’ and ‘dispute’ both require the existence of a disagreement between the parties on specific points and their respective knowledge of such disagreement, there is an important distinction to make between them as they do not imply the same degree of animosity. Indeed, in the case of a divergence, the parties hold different views but without necessarily pursuing the difference in an active manner. On the other hand, in case of a dispute, the difference of views forms the subject of an active exchange between the parties under circumstances which indicate that the parties wish to resolve the difference, be it before a third party or otherwise. Consequently, different views of parties in respect of certain facts and situations become a ‘divergence’ when they are mutually aware of their disagreement. It crystallises as a ‘dispute’ as soon as one of the parties decides to have it solved, whether or not by a third party.1472

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On that basis, the Tribunal found that, even though a divergence had existed before the BIT’s entry into force, that divergence was of a nature different from the dispute that had arisen subsequently. It followed that the Tribunal had jurisdiction over the dispute.1473 In Ping An v Belgium, the dispute settlement clause in the 2009 BLEU–China BIT started with the words ‘[w]hen a legal dispute arises.’1474 The Tribunal reached the conclusion that this clause was not to be read as covering past disputes. It held that ‘[w]hen a legal dispute arises’ must be read as referring only to disputes that arise after the BIT’s entry into force.1475

1470 1471 1472 1473 1475

Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 117. ibid para 128. Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 52 (emphasis in the original). ibid paras 53–57. 1474 Ping An v Belgium, Award (30 April 2015). ibid para 224. See also Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 170; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 299–300; ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) paras 169–170.

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Eurogas and Belmont v Slovakia concerned Art. 15(6) of the Canada–Slovakia BIT, which provides that the treaty will only ‘apply to any dispute which has arisen not more than three years prior to its entry into force.’ Since the BIT had entered into force on 14 March 2012, the critical date for the existence of a dispute was 14 March 2009. On that date, proceedings were pending before Slovak courts concerning the subject-matter of the dispute. In addition, the possibility of investment treaty proceedings had been the subject of correspondence between the parties in 2005. The Tribunal noted that the real cause of the dispute had remained the same throughout these events and that there had been no separate act by a Slovak State organ that could be deemed to have crystallized a new dispute after the critical date. Therefore, the dispute had arisen in 2005, more than six years before the entry into force of the BIT, and the Tribunal declined jurisdiction.1476 In Micula v Romania II, Art. 9(1) of the Romania–Sweden BIT provided that it did not apply to any dispute which arose before its entry into force. The Tribunal failed to make the established distinction between a dispute and events leading to a dispute. With respect to one of the claims, the Tribunal found that the alleged breach had occurred more than a year before the BIT’s entry into force and that, therefore, it had no jurisdiction over the claim. The Tribunal did not examine separately whether a dispute concerning the alleged breach existed on the date of the BIT’s entry into force.1477 A host State’s actions that adversely affect the investor may take some time to develop into a dispute. Under most of the BIT provisions discussed in the above cases, the decisive question is the existence of a dispute on the date of the treaty’s entry into force. Therefore, on the date of the treaty’s entry into force the adverse events may have occurred already, even though they have not yet evolved into a dispute. It follows that consent expressed in a treaty may well cover events that took place before the treaty’s entry into force.1478 Jurisdiction over events that occurred prior to the BIT’s entry into force is not contrary to the principle of non-retroactivity as enshrined in Art. 28 of the VCLT.1479 The issue was specifically addressed by the drafters of Art. 28 of the VCLT. The International Law Commission, in the commentary to what eventually became Art. 28, stated with respect to disputes arising out of events previous to the conclusion of a treaty: This is not to give retroactive effect to the agreement because, by using the word ‘disputes’ without any qualification, the parties are to be understood as accepting

1476 EuroGas and Belmont v Slovakia, Award (18 August 2017) paras 427–461. 1477 Micula v Romania II, Award (5 March 2020) paras 294–300. 1478 See Mavrommatis Palestine Concessions (Greece v UK) PCIJ Rep Ser A No 2, 35 (‘in cases of doubt, jurisdiction based on an international agreement embraces all disputes referred to it after its establishment . . . The reservation made in many arbitration treaties regarding disputes arising out of events previous to the conclusion of the treaty seems to prove the necessity for an explicit limitation of jurisdiction and, consequently, the correctness of the rule of interpretation enunciated above’). See also Gallus (n 1464) 138–141. 1479 VCLT (n 804) Art. 28 (Non-retroactivity of treaties) provides: ‘Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party.’ See Nick Gallus, ‘Article 28 of the Vienna Convention on the Law of Treaties and Investment Treaty Decisions’ (2016) 31 ICSID Rev 290.

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schreuer’s commentary on the icsid convention jurisdiction with respect to all disputes existing after the entry into force of the agreement.1480

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The Third Report on the Law of Treaties by the then Special Rapporteur for the project, Sir Humphrey Waldock, confirms that a treaty clause that confers jurisdiction on a Tribunal over ‘disputes’ confers jurisdiction over disputes ‘concern[ing] events which took place prior to’ the treaty entering into force.1481 Moreover, the Report notes that this is not to give ‘retroactive effect’ to the jurisdiction clause because the clause merely applies to ‘disputes arising or continuing to exist after its entry into force.’1482 Therefore, the question whether acts and events that occurred prior to an expression of consent to arbitration are covered by the latter should be distinguished from the issue of the applicable substantive law.1483 The Tribunal in Impregilo v Pakistan said: ‘care must be taken to distinguish between (1) the jurisdiction ratione temporis of an ICSID tribunal and (2) the applicability ratione temporis of the substantive obligations contained in a BIT.’1484 A jurisdictional provision in a treaty may extend to events that took place prior to the treaty’s entry into force. On the other hand, the law in force at the time of the relevant events will have to be applied to the merits of the case. In other words, jurisdiction may exist in respect of a dispute that arises from facts which are not subject to the treaty’s substantive standards.1485 The ILC has stated that a requirement that arbitrators apply the rules of international law in force at the time when the alleged wrongful acts took place is a generally recognized principle.1486 This principle was already expressed by Judge Huber in the Island of Palmas case in the following terms: A juridical fact must be appreciated in the light of the law contemporary with it, and not of the law in force at the time when a dispute in regard to it arises or falls to be settled.1487

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In SGS v Philippines, the Tribunal distinguished the application ratione temporis of the BIT’s jurisdictional provisions from the application of the BIT’s substantive standards. It said: According to Article II of the BIT, it applies to investments ‘made whether prior to or after the entry into force of the Agreement’. Article II does not, however, give the substantive provisions of the BIT any retrospective effect. The normal principle stated in Article 28 of the Vienna Convention on the Law of Treaties applies: the provisions of

1480 [1966] 2 YBILC 212. See also Olivier Corten and Pierre Klein (eds), The Vienna Conventions on the Law of Treaties: A Commentary vol 1 (OUP 2011) 721. 1481 [1964] 2 YBILC 11. 1482 ibid. 1483 See Christoph Schreuer, ‘Jurisdiction and Applicable Law in Investment Treaty Arbitration’ (2014) 1 McGill J Disp Res 1; Steingruber (n 1281) 287–288. 1484 Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 309. See also SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 167. 1485 See also Art. 13 of the ILC’s Articles on State Responsibility (n 861), which provides: ‘An act of a State does not constitute a breach of an international obligation unless the State is bound by the obligation in question at the time the act occurs.’ 1486 Crawford (n 861) 132. See also Epaminontas E Triantafilou, ‘Contemporaneity and Its Limits in Treaty Interpretation’ in Caron and others (n 50) 449. 1487 Island of Palmas (Netherlands v United States) (4 April 1928) (1949) II UNRIAA 829, 845.

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the BIT ‘do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty.’1488

Other tribunals have adopted the same principle.1489 It follows that in some situations tribunals have to apply substantive rules of international law that are not contained in the treaty that is the basis of its jurisdiction. These substantive rules may derive from a predecessor treaty, from other treaties that relate to the subject-matter of the dispute, from customary international law, and from domestic law.1490 A similar situation can arise where consent to jurisdiction by the State is expressed in national legislation. In Tradex v Albania a domestic statute, the ‘1993 Law,’ was the basis for ICSID’s jurisdiction. Art. 8 of that statute provided for ICSID jurisdiction ‘if a foreign investment dispute arises.’ The Tribunal concluded that ‘a dispute which started before the coming into force of the 1993 Law can be covered by the submission to ICSID jurisdiction.’1491 The Tribunal applied the distinction between jurisdiction ratione temporis and the substantive law applicable to the facts of the case. It said:

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it occurs frequently that courts and arbitral tribunals have to apply certain substantive rules of law which were in force during the relevant period though they have been replaced by new rules as from a certain date. Accepting ICSID jurisdiction for the present dispute under Art. 8, therefore, by no means implies that the substantive protection rules of the 1993 Law would be applicable in the consideration of the merits of this case.1492

A treaty may also exclude jurisdiction in respect of acts that occurred before its entry into force.1493 If consent to arbitration contained in a treaty is limited to violations of that treaty (see paras. 974–976 infra), the date of the treaty’s entry into force is also necessarily the date from which acts and events are covered by consent to jurisdiction.1494 For instance, under the NAFTA,1495 and under the ECT,1496 the scope of the consent to arbitration is limited to claims arising from alleged breaches of the respective treaties. Tribunals operating under clauses of this kind have found that they could not go beyond applying the substantive standards contained in these treaties. In that situation, the entry into force of the substantive law also determines the tribunal’s jurisdiction ratione temporis since the tribunal may only hear claims for violation of that law.1497

1488 SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 166. 1489 Salini v Jordan, Decision on Jurisdiction (29 November 2004) paras 176, 177; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 311; Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 157; Jan de Nul v Egypt, Award (6 November 2008) paras 132–135; Ping An v Belgium, Award (30 April 2015) paras 172, 186–191, 218. For a contrary view, see MCI v Ecuador, Award (31 July 2007) paras 59–67, where the Tribunal failed to distinguish between jurisdiction and substantive law. 1490 Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 150–152. 1491 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 65. 1492 ibid 66. 1493 See Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) paras 114–116. 1494 See Generation Ukraine v Ukraine, Award (16 September 2003) paras 11.1–11.4, 17.1, 17.5. 1495 See NAFTA (n 32) Art. 1116. See also USMCA (n 338) Art. 14.D.3(1). 1496 ECT (n 33) Art. 26(1). 1497 Mondev v United States (AF), Award (11 October 2002) paras 57–75.

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Some tribunals have applied the concept of a continuing breach to deal with this situation.1498 An act that commenced before the treaty’s entry into force may persist thereafter. This would suffice to give the tribunal jurisdiction.1499 The Tribunal in SGS v Philippines applied the concept of a continuing breach in the following terms: It is not, however, necessary for the Tribunal to consider whether Article VIII of the BIT applies to disputes concerning breaches of investment contracts which occurred and were completed before its entry into force. At least it is clear that it applies to breaches which are continuing at that date, and the failure to pay sums due under a contract is an example of a continuing breach.1500

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A variant of the theory of continuing breach was applied in Tecmed v Mexico. The Tribunal held that, in principle, a treaty does not bind a party in relation to acts that took place before its entry into force.1501 Also, the BIT’s language appeared to be directed at the future.1502 However, it did not follow that events prior to the BIT’s entry into force were irrelevant. If there was still a breach after the treaty’s entry into force, acts or omissions occurring before that date might play a role. The Tribunal said: conduct, acts or omissions of the Respondent which, though they happened before the entry into force, may be considered a constituting part, concurrent factor or aggravating or mitigating element of conduct or acts or omissions of the Respondent which took place after such date do fall within the scope of this Arbitral Tribunal’s jurisdiction. This is so, provided such conduct or acts, upon consummation or completion of their consummation after the entry into force of the Agreement constitute a breach of the Agreement, . . .1503

g) Time Limits Attached to Consent 944

Some treaties offering consent to ICSID arbitration prescribe limitation periods.1504 The investor must bring its claim within a certain period of time from the date it acquires knowledge of the alleged breach and the resulting damage. For example, Art. 1116(2) of the NAFTA provides: An investor may not make a claim if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.1505

1498 See Art. 14 of the ILC’s Articles on State Responsibility (n 861). 1499 See esp Feldman v Mexico (AF), Decision on Jurisdiction (6 December 2000) para 62; Mondev v United States (AF), Award (11 October 2002) paras 57–75; OKO v Estonia, Award (19 November 2007) paras 194–196, 284; Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) paras 123–125; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 2.91, 2.92; Mobil v Canada, Decision on Jurisdiction (13 July 2018) paras 112–120, 161–162, 173. 1500 SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 167. 1501 Tecmed v Mexico (AF), Award (29 May 2003) para 63. 1502 ibid paras 64, 65. 1503 ibid para 68. See also ibid paras 172, 178, 179, 181. See also Bayindir v Pakistan, Award (27 August 2009) para 132. 1504 Andrea K Bjorklund, ‘Waiver of Local Remedies and Limitation Periods’ in Kinnear and others (n 255) 237. 1505 See also NAFTA (n 32) Art. 1117(2); USMCA (n 338) Art. 14.D5(1)(c).

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The DR–CAFTA in Art. 10.18.1 contains a very similar provision. The US Model BIT1506 of 2012 in Art. 26(1) and Canada’s Model BIT1507 in Art. 22(2)1508 offer clauses that are identical or similar to Art. 1116(2) of the NAFTA. The China–Korea BIT contains a similar clause in its Art. 9(7).1509 Tribunals have found that they had to examine whether a claimant had actual knowledge of the relevant facts or whether constructive knowledge could be imputed to the investor if by exercise of reasonable care or diligence it would have known of the facts. The knowledge must have related to the breach as well as to loss or damage resulting therefrom.1510 Investment tribunals have found, in a number of cases, that in the absence of a time limit in the underlying treaty, the principle of prescription did not apply.1511

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8. Limitations on Consent During the Convention’s drafting, there was never any doubt that the parties had the right to limit the scope of their consent. The Working Paper contained a somewhat sweeping clause to the effect that either party had the right to stipulate in their consent ‘that one or more of the provisions of this Convention shall not apply’ (History, Vol. I, p. 110). This clause was criticized as going too far (History, Vol. II, pp. 55, 57, 65) and does not appear in subsequent drafts. All later drafts, as well as the Convention, just refer to ‘any dispute’ or ‘all disputes’ subject to the Convention’s objective requirements (History, Vol. I, pp. 112, 116, 118). The Comment to the Preliminary Draft contains the following observation:

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9. When entering into any undertaking pursuant to Section 2 a party would, of course, be free to include such limitations on the scope of the particular undertaking as may seem to it appropriate provided that those limitations were not inconsistent with its obligations deriving from the Convention as a whole (History, Vol. II, p. 205).

The principle of the parties’ freedom to limit the extent of their consent remained uncontroverted (History, Vol. II, pp. 268, 336, 505, 566, 706). Mr. Broches explained that the parties’ freedom in shaping their consent was merely limited by such principles as the non-revocability of consent or the binding nature of awards (ibid., p. 505). 1506 1508 1509 1510

See Brown (n 331) 828. 1507 ibid 105. See also Canada–Venezuela BIT (signed 1 July 1996, entered into force 28 January 1998) XII(3)(d). China–Korea BIT (signed 7 September 2007, entered into force 1 December 2007). Mondev v United States (AF), Award (11 October 2002) paras 51–52, 87; Feldman v Mexico (AF), Award (16 December 2002) paras 46(b), 49, 57–58, 63, 199; Grand River v United States (UNCITRAL), Decision on Jurisdiction (20 July 2006) paras 3–4, 22–104; UPS v Canada (UNCITRAL), Award (24 May 2007) paras 20–30; Vannessa Ventures v Venezuela (AF), Decision on Jurisdiction (22 August 2008) ss 3.5.1–3.5.4; Corona Materials v Dominican Republic (AF), Award (31 May 2016) paras 4, 10, 54–171, 184, 189, 192–238; Rusoro Mining v Venezuela (AF), Award (22 August 2016) paras 204–240, 428–429; Ansung Housing v China, Award (9 March 2017) paras 57, 74–122. 1511 Maffezini v Spain, Award (13 November 2000) paras 92, 93; Wena Hotels v Egypt, Award (8 December 2000) paras 102–110; Kardassopoulos v Georgia, Award (3 March 2010) paras 250–268; SGS v Paraguay, Award (10 February 2012) para 166; H&H v Egypt, Decision on Jurisdiction (5 June 2012) paras 81–88; Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 412–426; UAB v Latvia, Award (22 December 2017) paras 537–540; Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018) paras 83–94; CMC v Mozambique, Award (24 October 2019) paras 450–464.

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Where ICSID’s jurisdiction is based on an offer made by one party, subsequently accepted by the other, the parties’ consent exists only to the extent that offer and acceptance coincide. For instance, the host State’s investment legislation, or its BIT, with the investor’s home State may provide for the Centre’s jurisdiction in the most general terms. If the investor accepts ICSID jurisdiction only with regard to a particular dispute, or in respect of certain investment operations, the consent between the parties will be thus limited.1512 It is evident that the investor’s acceptance may not validly go beyond the limits of the host State’s offer. Therefore, any limitations contained in the legislation or treaty would apply irrespective of the terms of the investor’s acceptance. If the terms of acceptance do not coincide with the terms of the offer there is no perfected consent.

a) Limitations on Consent in Direct Agreements 951

Art. 25 merely defines the outer limits of the consent that the parties may give. There is nothing to stop them from circumscribing it in a narrower way. The parties are free to delimit their consent by defining it in abstract terms, by excluding certain types of disputes or by listing the questions they are submitting to ICSID’s jurisdiction.1513 The 1993 Model Clauses offer the following formula for this purpose: Clause 4 The consent to the jurisdiction of the Centre recorded in citation of basic clause above shall [only]/[not] extend to disputes related to the following matters: . . .1514

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These limitations in a specific consent agreement must be distinguished from the notifications that may be given under Art. 25(4). Art. 25(4) allows Contracting States to state, in advance and in general terms, which classes of disputes they would not consider submitting to the Centre’s jurisdiction (see paras. 1472–1507 infra). In practice, broad inclusive consent clauses, covering any dispute that may arise in connection with the agreement containing the clause, are the norm. They are also generally preferable. Narrow clauses, listing only certain questions or excluding certain questions, are liable to lead to difficulties in determining the commission’s or tribunal’s precise competence. Moreover, narrow clauses may inadvertently exclude essential aspects of a dispute. Consent clauses contained in investment agreements typically refer to ‘any dispute’ or to ‘all disputes’ under the respective agreements. The consent clause in AGIP v Congo is characteristic of this; it provides: All disputes that may arise with respect to the application or interpretation of the present Protocol of Agreement will be finally settled in accordance with the [ICSID] Convention . . .1515

1512 Amerasinghe (n 96) 224–225; Szasz (n 120) 29. 1513 Amerasinghe, ‘Submissions’ (n 26) 220–222. 1514 (1997) 4 ICSID Reports 361. See also Clauses XIV and XV of the 1968 Model Clauses, (1968) 7 ILM 1159, 1173; Clause V of the 1981 Model Clauses, (1993) 1 ICSID Reports 201. 1515 AGIP v Congo, Award (30 November 1979) para 18. See also Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 12; Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.15; Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 10; Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 10 and 13; SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 23; LETCO v Liberia, Decision on Jurisdiction (24 October 1984)

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But there are also occasional counterexamples circumscribing ICSID’s jurisdiction more narrowly.1516

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b) Limitations on Consent in Legislation Offers of consent to ICSID arbitration in national investment legislation may cover disputes between the foreign investor and the host State in general terms. In Zhinvali v Georgia, the Tribunal accepted an ICSID consent clause in Georgia’s Investment Law of 1996 that simply referred to ‘disputes between a foreign investor and a government body.’1517 In Inceysa v El Salvador, Art. 15 of the El Salvador Investment Law provided as follows:

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In the case of controversies arising between foreign investors and the State regarding their investments in El Salvador, the investors may submit the controversy to: (a) [ICSID] . . . (b) [the Additional Facility] . . .1518

The Tribunal found that this clearly constituted an offer of consent concerning all ‘disputes referring to investments.’ The Tribunal added an obiter dictum to the effect that, in order to invoke the arbitration provision in the Investment Law, there had to be a claim with substantive grounds in that law. This excluded contract claims.1519 This latter reasoning is surprising in view of the fact that the Investment Law refers to ICSID jurisdiction in general terms for controversies regarding investments of foreign investors. A limitation to claims arising from the statute’s substantive provisions, or an exclusion of contract claims, is not apparent from the Investment Law as quoted by the Tribunal. Some offers of consent in national legislation are narrower and relate to the application and interpretation of the piece of legislation in question. In SPP v Egypt, the Centre’s jurisdiction was based on Art. 8 of Egypt’s Law No. 43 of 1974.1520 That provision offered several forms of dispute settlement, including the ICSID Convention, ‘in respect of the implementation of the provisions of this Law.’1521 Before the

1516 1517 1518 1519 1520 1521

(1994) 2 ICSID Reports 350; Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 17; Vacuum Salt v Ghana, Award (16 February 1994) para 2; TANESCO v IPTL, Award (12 July 2001) para 10; CDC v Seychelles, Award (17 December 2003) para 4; Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) paras 49, 58; World Duty Free v Kenya, Award (4 October 2006) para 6; Aguaytia v Peru, Award (11 December 2008) para 66; Liman Caspian Oil v Kazakhstan, Award (22 June 2010) para 214; Millicom v Senegal, Decision on Jurisdiction (16 July 2010) para 88; Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 11–14; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 45, 88; Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 27. Perenco v Ecuador, Decision on Jurisdiction (30 June 2011) paras 107–161. Zhinvali v Georgia, Award (24 January 2003) para 329. Inceysa v El Salvador, Award (2 August 2006) para 331. ibid paras 332–333. This Law was subsequently replaced by Law No 230 of 1989 which, in turn, was replaced by Law No 8 of 1997. See Marchais (n 1325). SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 70.

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Tribunal, Egypt argued that Art. 8 of the Law was not applicable to disputes involving the non-performance of obligations under contracts. Rather, Art. 8 should be restricted to disputes concerning the non-performance of obligations under the Law itself.1522 The Tribunal remarked that it had some difficulty in accepting the above distinction as applying to all contracts and agreements, even those entered into by the Government itself. At the same time, the Tribunal found it unnecessary to address this question since, in the particular case, the alleged breach by Egypt of an agreement with one of the Claimants also constituted a breach of the Law. The alleged breach of the agreement would also violate the prohibition of nationalization or confiscation in Law No. 43.1523 Some national laws circumscribe the issues that are subject to ICSID’s jurisdiction even more narrowly. Art. 8 of the Albanian Law on Foreign Investment of 1993 offers unconditional consent to ICSID’s jurisdiction (see para. 783 supra), but limits this consent in the following terms: if the dispute arises out of or relates to expropriation, compensation for expropriation, or discrimination and also for the transfers in accordance with Article 7, . . .1524

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In Tradex v Albania, the Tribunal, applying that law, held that it had jurisdiction, subject to the existence of an expropriation, an issue which was to be examined in the merits phase.1525 In its Award it found, after a detailed examination of the facts, that the Claimant had not been able to prove that an expropriation had occurred.1526 Anglo-Adriatic v Albania concerned the same Albanian Law. The Tribunal noted that the Law required the fulfillment of certain requirements, namely, the existence of a protected investment, the existence of a protected investor, who acts as claimant in the arbitration and that the claimant is the owner or titleholder of the protected investment. After considering the evidence, the Tribunal concluded that the Claimant had not proven ownership of, or title to, the protected investment.1527 The host State’s legislation containing the offer of consent may prescribe certain formalities. Under some investment laws, the investor’s consent is linked to the process of obtaining an investment authorization. In Lighthouse Corp v Timor-Leste, the Tribunal noted that the Timor-Leste Foreign Investment Law, which contained the offer of consent to ICSID arbitration, required foreign investments to be authorized, approved, and registered. The Tribunal found that the Claimants had not complied with that requirement and declined jurisdiction.1528

1522 ibid para 67. 1523 ibid paras 68–69. See also ibid, Dissenting Opinion El Mahdi (14 April 1988) (1995) 3 ICSID Reports 182–183 and Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 315–318. See also Interocean Oil v Nigeria, Award (6 October 2020) paras 155–165, extending jurisdiction under the NIPC Act to customary international law. 1524 See Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 54. Art. 7 deals with the investor’s right to transfer funds abroad. 1525 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 61–62. 1526 Tradex v Albania, Award (29 April 1999) paras 92, 132, 203–205. 1527 Anglo-Adriatic v Albania, Award (7 February 2019) paras 207, 210, 294–296. 1528 Lighthouse Corp v Timor-Leste, Award (22 December 2017) paras 310–334.

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c) Limitations on Consent in Treaties The scope of consent to arbitration offered in BITs varies.1529 Some clauses providing consent are wide and unlimited. Many BITs, in their consent clauses, contain phrases such as ‘all disputes concerning investments’ or ‘any legal dispute concerning an investment.’ For instance, Art. 9 of the Netherlands Model BIT of 2004 refers to ‘any legal dispute . . . concerning an investment . . .’1530 These provisions do not restrict a tribunal’s jurisdiction to claims arising from the BIT’s substantive standards.1531 By their own terms, these consent clauses encompass disputes that go beyond the interpretation and application of the BIT itself and would cover claims that arise from a contract in connection with the investment,1532 from customary international law, and from other treaties. In Vivendi v Argentina, Art. 8 of the Argentina–France BIT, which was applicable in that case, offered consent for ‘[a]ny dispute relating to investments.’ In its discussion of the BIT’s fork-in-the-road clause, the ad hoc Committee said:

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. . . Article 8 deals generally with disputes ‘relating to investments made under this Agreement between one Contracting Party and an investor of the other Contracting Party.’ . . . Article 8 does not use a narrower formulation, requiring that the investor’s claim allege a breach of the BIT itself. Read literally, the requirements for arbitral jurisdiction in Article 8 do not necessitate that the Claimant allege a breach of the BIT itself: it is sufficient that the dispute relate to an investment made under the BIT. This may be contrasted, for example, with Article 11 of the BIT [dealing with State/State dispute settlement], which refers to disputes ‘concerning the interpretation or application of this Agreement’, or with Article 1116 of the NAFTA, which provides that an investor may submit to arbitration under Chapter 11 ‘a claim that another Party has breached an obligation under’ specified provisions of that Chapter.1533

In SGS v Paraguay, the clause on the settlement of investor–State disputes in the Paraguay–Switzerland BIT referred to ‘disputes with respect to investments.’ The Tribunal’s interpretation was as follows: Article 9 provides for the resolution of ‘disputes with respect to investments between a Contracting Party and an investor of the other Contracting Party,’ . . . There is no qualification or limitation in this language on the types of ‘disputes with respect to investments’ that a Swiss investor may bring against the Republic of Paraguay. The

1529 For an overview, see Campbell McLachlan, Laurence Shore and Matthew Weiniger, International Investment Arbitration: Substantive Principles (2nd edn, OUP 2017) paras 3.41–3.66. 1530 See Brown (n 331) 580. 1531 The UK Model IPPA (2008) contains two versions of Art. 8, dealing with investor–State disputes. One version, marked as ‘Preferred,’ provides for ICSID conciliation or arbitration for ‘any legal dispute . . . concerning an investment.’ The other version, marked as ‘Alternative,’ relates to ‘Disputes . . . concerning an obligation of the latter under this Agreement in relation to an investment.’ 1532 For discussion of this issue, see Stanimir A Alexandrov, ‘Breaches of Contract and Breaches of Treaty’ (2004) 5 JWIT 555, 572; Jörn Griebel, ‘Jurisdiction over “Contract Claims” in Treaty-Based Investment Arbitration on the Basis of Wide Dispute Settlement Clauses in Investment Agreements’ (2007) 4(5) TDM; Jacomijn J van Haersolte-van Hof and Anne K Hoffmann, ‘The Relationship between International Tribunals and Domestic Courts’ in Muchlinski, Ortino and Schreuer (n 18) 962; Steingruber (n 1281) 299–302. 1533 Vivendi v Argentina, Decision on Annulment (3 July 2002) para 55.

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schreuer’s commentary on the icsid convention ordinary meaning of Article 9 would appear to give this Tribunal jurisdiction to hear claims for violation of Claimant’s rights under the Contract – surely a dispute ‘with respect to’ Claimant’s investment – should Claimant have chosen to bring them before us.1534

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In Philip Morris v Uruguay, the Switzerland–Uruguay BIT provided for investor– State arbitration for ‘Disputes with respect to investments within the meaning of this Agreement . . .’ The Tribunal interpreted that clause as follows: 107. In the Tribunal’s view, the ordinary meaning of the phrase ‘disputes with respect to investments’ is broad and includes any kind of disputes where the subject matter is an ‘investment’ as this term is defined by the BIT. . . . 109. . . . The Tribunal shares the view expressed by other tribunals that the definition of disputes as ‘relating to investments within the meaning of this Agreement’, or ‘relating to investments made under this Agreement’, or ‘in connection with investments within the meaning of this Agreement’, ‘does not use a narrower formulation, requiring that the investor’s claim allege a breach of the BIT itself . . .; it is sufficient that the dispute relate to an investment made under the BIT’.1535

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A number of other tribunals have also endorsed this position.1536 The Tribunal in SGS v Pakistan reached a different conclusion. Art. 9 of the Pakistan–Switzerland BIT referred to ‘disputes with respect to investments.’ The Tribunal found that the phrase was merely descriptive of the factual subject-matter of the disputes and did not relate to the legal basis of the claims or cause of action asserted in the claims. The Tribunal said: from that description alone, without more, we believe that no implication necessarily arises that both BIT and purely contract claims are intended to be covered by the Contracting Parties in Article 9.1537

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Therefore, the Tribunal held that it did not have jurisdiction with respect to contract claims, which did not also constitute breaches of the substantive standards of the BIT.1538 Other tribunals have distanced themselves from that decision.1539 However, some tribunals, without analyzing the matter, seem to operate under the unfounded perception that they are restricted to treaty claims regardless of the wording of a BIT’s jurisdiction clause.1540 1534 SGS v Paraguay, Decision on Jurisdiction (12 February 2010) para 129. See also ibid paras 183–184. 1535 Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 107, 109. 1536 Salini v Morocco, Decision on Jurisdiction (23 July 2001) para 61; SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 131–135, 169(3); Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 52, fn 42; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 57, 82, 102, 188; Siemens v Argentina, Award (6 February 2007) para 205; Parkerings v Lithuania, Award (11 September 2007) paras 261–266; Alpha Projektholding v Ukraine, Award (8 November 2010) para 243; Metal-Tech v Uzbekistan, Award (4 October 2013) para 378. 1537 SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 161. 1538 ibid. For a case with a similar result, see LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 25. 1539 SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 133–135; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 52, fn 42. See also the discussions in Salini v Jordan, Decision on Jurisdiction (29 November 2004) paras 97–101. 1540 Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 254; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 162–164; UAB v Latvia, Award (22 December 2017) paras 498, 846, 853.

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Other BIT clauses offering consent to arbitration circumscribe the scope of consent to arbitration in narrower terms. A provision that is typical for United States BITs is contained in Art. VII of the Argentina–United States BIT of 1991.1541 It offers consent for investment disputes which are defined as follows:

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a dispute between a Party and a national or company of the other Party arising out of or relating to (a) an investment agreement between that Party and such national or company; (b) an investment authorization granted by that Party’s foreign investment authority (if any such authorization exists) to such national or company; or (c) an alleged breach of any right conferred or created by this Treaty with respect to an investment.1542

The consent clause in Art. 24 of the 2012 US Model BIT is similar. It covers breaches of the classical substantive standards laid down in Arts. 3–10 of the Model BIT, of an investment authorization, or of an investment agreement. Other treaties restrict consent to disputes involving the respective treaty’s substantive provisions. Tribunals operating under these restrictive clauses have found that they could only apply the substantive standards contained in these treaties.1543 In Iberdrola v Guatemala, the Guatemala–Spain BIT provided for jurisdiction ‘concerning matters governed by this Agreement.’1544 The Tribunal contrasted this limited jurisdictional clause with comprehensive clauses contained in other treaties:

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the Treaty contrasts with other bilateral investment treaties signed by Guatemala and by Spain, which extend arbitral jurisdiction to ‘any dispute’, ‘every dispute’, ‘the disputes’, ‘the differences’ or ‘every class of disputes or of differences’ as regards the extent of protection. The language of the Treaty is restricted . . . which means that the Republic of Guatemala did not give general consent to submit any kind of dispute or difference related to investments made in its territory to arbitration, but only those related to violations of substantive provisions of the treaty itself.1545

Under Art. 1116 of the NAFTA, the scope of the consent to arbitration is limited to claims arising from alleged breaches of the NAFTA itself. Also, under Art. 26(1) of the ECT the scope of the consent is limited to disputes ‘which concern an alleged breach of an obligation . . . under Part III [of the ECT].’1546 The limitation of consent to violations of the treaty maybe offset, at least in part, by an ‘umbrella clause’ or ‘observance of obligations clause’ contained in the treaty. Under such a clause, the States parties to the treaty undertake to observe any obligations they may have entered into with respect to investments. A violation of such an obligation may then amount to a violation of a treaty obligation. An umbrella clause is not jurisdictional in nature, but contains a substantive obligation. However, it can have

1541 See Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 58. 1542 For comment, see K Scott Gudgeon, ‘Arbitration Provisions of US Bilateral Investment Treaties’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West 1985) 41, 45–47; Peters (n 1271) 138; Vandevelde (n 1389) 655. 1543 Suez and others v Argentina, Decision on Liability (30 July 2010) para 63; Roussalis v Romania, Award (7 December 2011) paras 43, 679–683. 1544 See Iberdrola v Guatemala, Award (17 August 2012) paras 296–310. 1545 ibid 306 (footnotes omitted). 1546 Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) paras 249–251.

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jurisdictional consequences. The exact meaning and effect of umbrella clauses has been the subject of much debate and disagreement in arbitral practice.1547 The scope for the jurisdiction of tribunals is even narrower where consent is limited to one or some of the rights granted under the Treaty. Some BITs restrict jurisdiction to claims relating to expropriation or to the amount of compensation due after an expropriation.1548 For instance, the Bangladesh–Italy BIT provides in Art. 9 for the submission to arbitration, including to ICSID, of: Any dispute arising between a Contracting Party and the investors of the other, relating to compensation for expropriation, nationalization, requisition or similar measures including disputes relating to the amount of the relevant payments . . .

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ICSID tribunals have held that clauses of this kind restricted their jurisdiction to claims based on expropriation to the exclusion of other standards of protection.1549 However, clauses referring to compensation for expropriation extended to the question of the existence of an expropriation1550 (see also paras. 960, 961 supra; para. 1034 infra). The United States–Mexico–Canada Agreement limits consent to arbitration to claims for violations of certain standards guaranteed by the Agreement. These are: national treatment, most-favored-nation treatment, and expropriation and compensation (except with respect to indirect expropriation).1551

9. Procedural Conditions to Consent 981

Even if a dispute is clearly covered by the parties’ consent to ICSID’s jurisdiction, access to the Centre may be subject to conditions. The parties are free to add such conditions to their consent, provided they are not contrary to the Convention’s mandatory provisions and are in compliance with the Centre’s Rules and Regulations.1552 In practice, such conditions typically concern certain procedural steps that must be taken before proceedings can be instituted.1553 Under Art. 26, a State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under the Convention. Some States have expressed such a requirement either in their investment legislation or in BITs (see Art. 26, paras. 302–327).

1547 See Stephan W Schill, ‘Enabling Private Ordering: Function, Scope and Effect of Umbrella Clauses in International Investment Treaties’ (2009) 18 Minn JIL 1; Anthony C Sinclair, ‘Umbrella Clause’ in Bungenberg and others (n 18) 887; Andrés Rigo Sureda, ‘The Umbrella Clause’ in Kinnear and others (n 255) 375; Katia Yannaca-Small, ‘The Umbrella Clause: Is the Umbrella Closing?’ in Yannaca-Small (n 255) 16.01. 1548 See Peters (n 1271) 129 ff; McLachlan, Shore and Weiniger (n 1529) paras 3.55–3.61. 1549 Telenor v Hungary, Award (13 September 2006) paras 18(2), 25, 57, 81–83; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 70, 129–133; Emmis v Hungary, Award (16 April 2014) paras 142–145; Vigotop v Hungary, Award (1 October 2014) para 634. 1550 Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 129–188; Beijing Urban Construction v Yemen, Decision on Jurisdiction (31 May 2017) paras 50, 59–69, 74–108. 1551 USMCA (n 338) Art. 14.D.3(1). 1552 Clause XIII of the 1968 Model Clauses contained a general formula for subjecting consent to unspecified conditions, (1968) 7 ILM 1159, 1172. 1553 Delaume (n 843) 17.

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a) Waiting Periods for Amicable Settlement A common condition for the institution of proceedings before ICSID is that an amicable settlement has been attempted through consultations or negotiations.1554 Where this is the case, negotiations must be undertaken in good faith. Some national investment laws and numerous BITs contain the condition that a negotiated settlement must be attempted before resort can be had to the Centre. If no settlement is reached, the claimant may proceed to arbitration. Art. 10 of the German Model BIT of 2009 is characteristic of this; it provides:

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(1) Disputes concerning investments between a Contracting State and an investor of the other Contracting State should as far as possible be settled amicably between the parties in dispute. . . . (2) If the dispute cannot be settled within six months of the date on which it was raised by one of the parties in dispute, it shall, at the request of the investor of the other Contracting State, be submitted to arbitration. . . .1555

Most other model agreements and numerous BITs contain similar clauses. The NAFTA contains a comparable provision in Arts. 1118 to 1120.1556 The ECT, in Art. 26(1) and (2), also provides for a mandatory period for amicable settlement before submission to arbitration. The treaties typically lay down time limits for negotiations in order to forestall dilatory tactics and to make it clear when the condition precedent for settlement under the Convention has been satisfied. If no settlement is reached within a certain period of time, access to ICSID is open. Typical time periods foreseen for this purpose are three months, six months, or twelve months. If these waiting periods are jurisdictional requirements, they have to be complied with by the time of the institution of proceedings (see paras. 44–67 supra). As a consequence, if the request for arbitration is submitted before the expiry of the time period foreseen for a settlement, a tribunal would have to decline jurisdiction. On the other hand, the possibility to reach a settlement continues after the institution of proceedings and by the time a decision on jurisdiction is rendered, the period for a settlement will typically have expired. Therefore, it would be possible for the claimant to recommence proceedings immediately. The ICJ has repeatedly addressed the issue of non-compliance with a requirement to engage in negotiations in a treaty providing for the Court’s jurisdiction.1557 In the majority of cases, tribunals found that the claimants had complied with waiting periods before proceeding to arbitration.1558 In cases where the claimants had not

1554 Amerasinghe, ‘Submissions’ (n 26) 219; Steingruber (n 1281) 195–196; McLachlan, Shore and Weiniger (n 1529) paras 3.20, 3.23–3.31. 1555 See Brown (n 331) 316. 1556 See also USMCA (n 338) Art. 14.D.2. 1557 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States) (Jurisdiction and Admissibility) [1984] ICJ Rep 392, 427–429. See also Pierre-Marie Dupuy, ‘Preconditions to Arbitration and Consent of States to ICSID Jurisdiction’ in Kinnear and others (n 255) 219, 227–228. 1558 Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 54, 60–61; AMT v Zaire, Award (21 February 1997) paras 5.40–5.45; Metalclad v Mexico (AF), Award (30 August 2000) paras 64–69; Salini v Morocco, Decision on Jurisdiction (23 July 2001) paras 15–23; CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 121–123; Generation Ukraine v Ukraine, Award (16 September 2003) paras 14.1–14.6; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 55; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras

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complied with the requirement to first attempt an amicable settlement, the reaction of tribunals has not been uniform.1559 In a number of cases, tribunals found that non-compliance with waiting periods did not affect their jurisdiction.1560 In SGS v Pakistan, the Pakistan–Switzerland BIT provided for a twelve-month consultation period before permitting the investor to go to ICSID arbitration. SGS had filed its request for arbitration only two days after notifying Pakistan of the existence of the dispute. The Tribunal accepted the Claimant’s argument that the waiting period was procedural, rather than jurisdictional, and that negotiations would have been futile.1561 It said: Tribunals have generally tended to treat consultation periods as directory and procedural rather than as mandatory and jurisdictional in nature. Compliance with such a requirement is, accordingly, not seen as amounting to a condition precedent for the vesting of jurisdiction . . . there was little indication of any inclination on the part of either party to enter into negotiations or consultations in respect of the unfolding dispute. Finally, it does not appear consistent with the need for orderly and cost-effective procedure to halt this arbitration at this juncture and require the Claimant first to consult with the Respondent before resubmitting the Claimant’s BIT claims to this Tribunal.1562

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Other ICSID tribunals have endorsed this position, holding that waiting periods were not jurisdictional requirements.1563 In some cases, tribunals decided that there was no need to comply with waiting periods prior to the institution of arbitration proceedings since they would not have served any useful purpose and would hence have been futile.1564 Some tribunals have found that waiting periods need not necessarily be

1559 1560 1561 1562 1563

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101–107; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) para 80; MTD v Chile, Award (25 May 2004) para 96; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 163–173; LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, paras 32, 33; AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 62–71; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 6; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 38; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 39, 41; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 212–217; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 62–63; Arif v Moldova, Award (8 April 2013) paras 335–342; Marfin and others v Cyprus, Award (26 July 2018) para 637; Cortec Mining v Kenya, Award (22 October 2018) para 282; Interocean Oil v Nigeria, Award (6 October 2020) para 149. Christoph Schreuer, ‘Travelling the BIT Route: Of Waiting Periods, Umbrella Clauses and Forks in the Road’ (2004) 5 JWIT 231, 232; Gary Born and Marija Šćekić, ‘Pre-Arbitration Procedural Requirements “A Dismal Swamp”’ in Caron and others (n 50) 227. Several decisions to this effect were in non-ICSID cases: see Ethyl v Canada (UNCITRAL), Award on Jurisdiction (24 June 1998) (2005) 7 ICSID Reports 12, paras 76–88; Lauder v Czech Republic (UNCITRAL), Final Award (3 September 2001) (2006) 9 ICSID Reports 66, paras 181–191. SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 80, 183–184. ibid para 184 (footnote omitted). Wena Hotels v Egypt, Decision on Jurisdiction (29 June 1999) (2004) 6 ICSID Reports 74, 82 and 87; Metalclad v Mexico (AF), Award (30 August 2000) paras 64–67; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 88–103; Biwater Gauff v Tanzania, Award (24 July 2008) paras 343–347; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 564; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 280. LESI–DIPENTA v Algeria, Award (10 January 2005) pt II, para 32(iv); Teinver v Argentina, Decision on Jurisdiction (12 December 2012) 126–129; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 582; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 227–229; Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 301–317; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 284, 311–313; Interocean Oil v Nigeria, Award (6 October 2020) para 152.

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complied with prior to initiating proceedings, but can be fulfilled before the tribunal makes a decision on its jurisdiction.1565 Also, additional claims based on facts that occurred after the initiation of proceedings were mere factual extensions of the same dispute and did not trigger additional periods for negotiation.1566 Other tribunals treated waiting periods as requirements for jurisdiction or admissibility that had to be strictly observed.1567 Enron v Argentina involved the Argentina– United States BIT, which provided for a six-month period for consultation between the parties to the dispute. The Tribunal found that the waiting period had been complied with in the particular case. But it added the following obiter dictum:

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[T]he conclusion reached is not because the six-month negotiation period could be a procedural and not a jurisdictional requirement as has been argued by the Claimants and affirmed by other tribunals. Such requirement is in the view of the Tribunal very much a jurisdictional one. A failure to comply with that requirement would result in a determination of lack of jurisdiction.1568

It would seem that the decisive question is whether or not there was a promising opportunity for a settlement. There is little point in declining jurisdiction and sending the parties back to the negotiating table if negotiations are obviously futile. Negotiations remain possible, while the arbitration proceedings are pending. Even if the institution of arbitration was premature, the waiting period will often have expired by the time a decision on jurisdiction is rendered. Under these circumstances, compelling the claimant to start the proceedings anew would be uneconomical. A better way to deal with non-compliance with a waiting period is a suspension of proceedings to allow additional time for negotiations if these appear promising.1569

989

b) Attempt at Settlement in Domestic Courts Art. 26 specifically excludes the requirement to exhaust local remedies in the host State unless otherwise stated (see Art. 26, paras. 297–364). Some consent clauses in BITs provide for a mandatory attempt, for a certain period of time, to settle the dispute in the host State’s domestic courts.1570 The investor may proceed to international arbitration if the domestic proceedings do not result in the dispute’s settlement during 1565 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 279–281, 312. 1566 Metalclad v Mexico (AF), Award (30 August 2000) paras 64–69; CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 121–123; RREEF v Spain, Decision on Jurisdiction (6 June 2016) paras 221–231; Eiser v Spain, Award (4 May 2017) paras 315–321; Antin v Spain, Award (15 June 2018) paras 341–358; Belenergia v Italy, Award (28 August 2019) paras 360–369. But see Guaracachi v Bolivia (UNCITRAL), Award (31 January 2014) paras 385–401. 1567 Goetz v Burundi, Award (10 February 1999) paras 90–93; Burlington v Ecuador, Decision on Jurisdiction (2 June 2010) paras 312–318, 332–340; Murphy v Ecuador, Award on Jurisdiction (15 December 2010) paras 90–157; Tulip v Turkey, Decision on Jurisdiction (5 March 2013) paras 55–72; Supervisión y Control v Costa Rica, Award (18 January 2017) paras 336–348, 351. 1568 Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 88 (internal references omitted). 1569 This was the solution chosen in Western NIS v Ukraine, Order (16 March 2006). This entire paragraph, as contained in the Second Edition of this Commentary, was quoted in full in Daimler v Argentina, Award (22 August 2012) para 188. 1570 Christoph Schreuer, ‘Calvo’s Grandchildren: The Return of Local Remedies in Investment Arbitration’ (2005) 4 LPICT 1, 3–5; Konstanze von Papp, ‘Biting the Bullet or Redefining “Consent” in Investor– State Arbitration? Pre-Arbitration Requirements After BG Group v Argentina’ (2015) 16 JWIT 695; Born and Šćekić (n 1559); Dupuy (n 1557); McLachlan, Shore and Weiniger (n 1529) paras 3.32–3.40.

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that period, or if the dispute persists after the domestic decision. Tribunals have held that this was not an application of the exhaustion of local remedies rule.1571 The Argentina–Germany BIT provides in Art. 10(2) that any investment dispute shall first be submitted to the host State’s competent tribunals. The provision continues: (3) The dispute may be submitted to an international arbitration tribunal in any of the following circumstances: (a) at the request of one of the parties to the dispute if no decision on the merits of the claim has been rendered after the expiration of a period of eighteen months from the date in which the court proceedings referred to in para. 2 of this Article have been initiated, or if such decision has been rendered, but the dispute between the parties persists;

992

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A requirement of this kind attached to consent to arbitration creates a considerable burden to the party seeking arbitration with little chance of advancing the settlement of the dispute. A final decision by the domestic courts in a complex investment dispute is unlikely within eighteen months. Even if a decision is rendered, the dispute is likely to persist if the investor is dissatisfied with the outcome. Therefore, arbitration remains an option after the expiry of the period of eighteen months. It follows that the most likely effect of a clause of this kind is delay and additional cost. One tribunal has called a provision of this kind ‘nonsensical from a practical point of view.’1572 In some cases, tribunals found the requirement to submit the dispute to domestic courts for a certain period to be procedural. Therefore, it could be handled with some flexibility1573 and could be complied with subsequent to the initiation of ICSID arbitration, but before the decision on jurisdiction is taken.1574 Other tribunals have insisted on the requirement’s jurisdictional nature and its strict application.1575 In a number of cases, tribunals decided that there was no need to comply with directions contained in treaties to resort to domestic courts prior to the institution of arbitration proceedings since this would have been futile and would not have served any useful purpose.1576 The Tribunal in Ambiente Ufficio and others v Argentina said: Given the jurisprudence of the Supreme Court of Argentina and in the light of the circumstances prevailing in the present case, the Tribunal concludes that having recourse to the Argentine domestic courts and eventually to the Supreme Court would

1571 Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 19–37; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 104; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) para 30. 1572 Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 224. 1573 Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) paras 91–93; TSA Spectrum v Argentina, Award (19 December 2008) paras 98–113; Teinver v Argentina, Decision on Jurisdiction (12 December 2012) para 135; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 98–150; İçkale v Turkmenistan, Award (8 March 2016) paras 195–263. 1574 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 315–328, 337. 1575 Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 24–37; Wintershall v Argentina, Award (8 December 2008) paras 114–157; Impregilo v Argentina, Award (21 June 2011) paras 79–91; Daimler v Argentina, Award (22 August 2012) paras 160–281; Kiliç v Turkmenistan, Award (2 July 2013) paras 6.1.4–6.4.2. 1576 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 585–591; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 106–202; Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 302–317.

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not have offered Claimants a reasonable possibility to obtain effective redress from the local courts and would have accordingly been futile.1577

Tribunals found that where investors had to seek relief through domestic courts before resorting to ICSID arbitration, the exact nature of the claim raised before the domestic court was not decisive. What mattered was that the aggrieved party had sought relief in the domestic court. It did not matter whether that relief had been sought under domestic law or international law. Therefore, tribunals dealing with the requirement to resort to domestic courts for a certain period of time did not require that the cause of action before them and before a domestic court was the same.1578 In a number of cases in which clauses of this kind were invoked, the claimants were able to avoid their effect by relying on most-favored-nation (MFN) clauses, which allowed them to rely on other BITs of the host State that did not contain any such requirement (see paras. 1021–1035 infra).1579

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c) Waiver Clauses Some treaties providing for consent to ICSID arbitration require that the investor waive the right to initiate or continue dispute settlement procedures before domestic courts with respect to the same measures.1580 Under Art. 1121(1) of the NAFTA, the investor may submit a claim to arbitration only if

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the investor . . . waive their right to initiate or continue before any administrative tribunal or court under the law of any Party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Party that is alleged to be a breach referred to in Article 1116, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the disputing Party.1581

ICSID tribunals have assessed the sufficiency of waivers under Art. 10.18.2 of the DR–CAFTA1582 and other treaties.1583 In Waste Management v Mexico I, the Tribunal 1577 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 620. 1578 Teinver v Argentina, Decision on Jurisdiction (12 December 2012) paras 132, 133; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 113; Dede v Romania, Award (5 September 2013) paras 247, 250–253; İçkale v Turkmenistan, Award (8 March 2016) paras 262–263; Salini Impregilio v Argentina, Decision on Jurisdiction (23 February 2018) paras 115–140; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 296–305. 1579 Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 38–64; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 32–110; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 24–31; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 52–66; National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) paras 80–93; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 52–68. 1580 Steingruber (n 1281) 194–195; Bjorklund (n 1504). 1581 NAFTA (n 32) Art. 1121(1). See also NAFTA (n 32) Art. 1121(2). To the same effect DR–CAFTA (n 1112) Art. 10.18.2; US Model BIT (2012) Art. 26(2). See also USMCA (n 338) Art. 14.D.5.1.(e). 1582 Railroad Development Corp v Guatemala, Decision on Jurisdiction (17 November 2008); Pac Rim v El Salvador, Decision on Preliminary Objections (2 August 2010) paras 173–188, 239–243, 250–253; Commerce Group v El Salvador, Award (14 March 2011) paras 69–128; Corona Materials v Dominican Republic (AF), Award (31 May 2016) paras 10, 266–268. 1583 Vannessa Ventures v Venezuela (AF), Award (16 January 2013) para 229; Supervisión y Control v Costa Rica, Award (18 January 2017) paras 6, 133–146, 292–300; Salini Impregilio v Argentina, Decision on Jurisdiction (23 February 2018) paras 141–149; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 329–335, 339.

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found that the Claimant’s waiver did not satisfy Art. 1121 of the NAFTA. A waiver under Art. 1121 could not be limited to claims specifically made under the NAFTA itself, but had to cover any claim concerning a measure that was in dispute, even if the basis of the claim was purely domestic. Therefore, the Tribunal declined jurisdiction.1584 The Claimant resubmitted the same claim to arbitration accompanied by an amended waiver. The second Tribunal decided that the first Tribunal’s dismissal on jurisdictional grounds did not preclude the resubmission,1585 and proceeded to give an Award on the merits.1586

10. Consecutive Instruments Providing for Consent a) Successive Contracts 999

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Investment operations often involve complex arrangements expressed in a number of consecutive agreements. These agreements may be concluded in stages and over a period of time. Though economically interrelated, the agreements are legally distinct and often have different features. At times, ICSID clauses are included in some of these agreements, but not in others. If ICSID clauses are neither repeated, nor incorporated by reference in related agreements, the question arises whether the parties’ consent to ICSID’s jurisdiction extends to matters governed by these related agreements.1587 Some such related agreements concern peripheral operations, such as financing or arrangements with subcontractors. In these situations, it may even be doubtful whether disputes relating to them can be described as ‘arising directly’ out of the investment (see paras. 113–161 supra). In Holiday Inns v Morocco, the Tribunal found that it also had jurisdiction over peripheral transactions governed by separate contracts not containing an ICSID clause (see para. 136 supra). In Klöckner v Cameroon, the parties had first signed a Protocol of Agreement in 1971 outlining the general framework of their relationship. This agreement contained an ICSID arbitration clause. Two subsequent contracts, a Supply Contract of 1972 and an Establishment Agreement of 1973, also contained ICSID arbitration clauses. However, a 1977 Management Contract did not contain an ICSID clause, but referred to ICC arbitration. Before the Tribunal, Cameroon brought a counterclaim relating to Klöckner’s allegedly defective performance of its management duties. Klöckner sought to exclude questions relating to its management from the Tribunal’s jurisdiction by arguing that these matters were governed exclusively by the Management Contract, which was subject to the ICC clause.1588 The Tribunal found that all disputes arising from the investment operation, including those relating to management, were subject to the ICSID clause in the original Protocol of Agreement.1589 The Tribunal found that it did have jurisdiction with respect to the counterclaim, given the direct connection between the different instruments and the parties’ claims.1590

1584 Waste Management v Mexico I (AF), Award (2 June 2000). 1585 Waste Management v Mexico II (AF), Decision on Jurisdiction (26 June 2002). 1586 Waste Management v Mexico II (AF), Award (30 April 2004). See also B-Mex and others v Mexico (AF), Partial Award (19 July 2019) paras 43–44. 1587 Delaume (n 120) 171–172; Niggemann (n 1049) 190–192; Steingruber (n 1281) 239–240. 1588 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 10, 13. 1589 ibid 13–14. 1590 ibid 17–18, 65.

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In SOABI v Senegal, three successive contracts were directly relevant to the question of jurisdiction, but only the last of these contained an ICSID clause. The Tribunal reached the conclusion that the earlier agreements were implicitly embraced in the latter agreement and, therefore, fell within the scope of its ICSID clause.1591 In the conciliation case Tesoro v Trinidad and Tobago,1592 jurisdiction was based on the Heads of Agreement signed in 1968, a comprehensive document setting out the terms of a joint venture between the parties. The Heads of Agreement contained a combined ICSID conciliation/arbitration clause. On the same date, the parties also signed ten ‘side letters’ touching on a number of matters also covered in the Heads of Agreement. The side letters did not contain ICSID clauses. The side letters referred to the Heads of Agreement, but the Heads of Agreement did not refer to the side letters.1593 The Government argued that Tesoro’s claim was based on one of the side letters, which did not contain an ICSID clause. The Conciliator found that ICSID had jurisdiction over the dispute, since the side letter and the Heads of Agreement constituted one agreement and the Heads of Agreement clearly contained an ICSID clause.1594 These cases suggest that ICSID tribunals are inclined to take a broad view of consent clauses where the agreement between the parties is reflected in several successive instruments. Expressions of consent are not applied narrowly to the specific document in which they appear but are read in the context of the parties’ overall relationship. Therefore, a series of interrelated contracts may be regarded, in functional terms, as representing the legal framework for one investment operation. ICSID clauses contained in some, though not all, of the different contracts may be interpreted to apply to the entire operation.1595 This practice is based on the concept of the general unity of the investment operation (see paras. 133–151 supra). Other tribunals have adopted a more differentiated approach to ICSID clauses contained in only one of several related instruments. CSOB v Slovakia involved a Consolidation Agreement between the Claimant and the Ministry of the Slovak Republic, which was designed to deal with the issue of non-performing receivables (see para. 138 supra). The Consolidation Agreement contained a reference to a projected BIT which the Tribunal accepted as incorporating, into the Consolidation Agreement, the BIT’s ICSID clause (see para. 777 supra). Subsequent Loan Agreements with the Slovak Collection Company did not include an ICSID clause. The Tribunal adopted the doctrine of the unity of the investment operation.1596 It found that the loan to the Collection Company was closely related to, and could not be disassociated from, the other transactions and that the Slovak Republic’s undertaking and the loan formed an integrated whole.1597 Yet, in a supplementary decision on jurisdiction, the Tribunal found that it did not have jurisdiction with respect to the

1591 SOABI v Senegal, Award (25 February 1988) paras 4.01–4.17. See Nassib G Ziadé, ‘Introductory Note to the SOABI v Senegal Award’ (1991) 6 ICSID Rev 123. 1592 Tesoro v Trinidad and Tobago, Report (27 November 1985). See Nurick and Schnably (n 28). 1593 Nurick and Schnably (n 28) 343–344. 1594 ibid 347–348. 1595 This passage, contained in the First Edition of this Commentary, is quoted in Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 130. 1596 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 72. 1597 ibid paras 80, 82.

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Loan Agreements. The unity of the investment operation did not mean that the Tribunal automatically acquired jurisdiction with regard to each agreement concluded to implement the investment operation. This result was based in part on the somewhat indirect incorporation by reference of the consent to ICSID arbitration contained in the projected but abortive BIT. It was also based on the fact that the respective agreements were between different parties. Therefore, the Tribunal’s competence was confined to the Consolidation Agreement.1598 In Duke Energy v Peru, the investor and Peru had entered into a series of contracts called Legal Stability Agreements (LSAs). Only one of these (the DEI Bermuda LSA) contained an ICSID clause.1599 The Tribunal embraced the principle of the unity of the investment and analyzed the decisions in Holiday Inns, CSOB, and SOABI.1600 It said: The reality of the overall investment, which is clear from the record, overcomes Respondent’s objection that it could never have consented to arbitration of a dispute related to the broader investment . . .1601

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But the Tribunal immediately added language that seems to severely limit this principle: However, the Tribunal also acknowledges the corollary finding in the CSOB case, namely that Claimant will need to substantiate its claims, during the merits phase, by reference solely to the guarantees contained in the DEI Bermuda LSA, and not those contained in any of the other LSAs . . .1602

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The goal of settling investment disputes finally and comprehensively supports the generous application of the principle of the unity of the investment also for purposes of interpreting consent to jurisdiction. A situation in which an ICSID tribunal addresses some of the issues between the parties but leaves other closely related ones to be litigated elsewhere is unsatisfactory. Partial decisions are uneconomical and not conducive to the settlement of disputes. But this approach can be maintained only to the extent that it reflects the parties’ presumed intentions. Where it is clear that the parties wished to exclude certain matters from ICSID’s jurisdiction, this intention must be respected.1603 Some cases involve several contracts, all of which contain ICSID clauses. In Cambodia Power v Cambodia, there were three economically related contracts, each containing an ICSID clause. The Respondent objected to the joinder of all claims into one proceeding. The Tribunal noted that the three contracts arose from a single investment for a single, indivisible project. It also noted the existence of cross-default provisions in the three contracts, as well as the near identity of the arbitration clauses. It concluded:

1598 CSOB v Slovakia, Decision on Further and Partial Objection to Jurisdiction (1 December 2000) paras 26–32. 1599 Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) paras 80–82, 89, 90. 1600 ibid paras 119–131. 1601 ibid para 131. 1602 ibid para 132. 1603 See also Tupman (n 1073) 834.

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Investments often are in the form of complex financial structures which require the implementation of several agreements. It would be contrary to the spirit of the Convention to require claimants in each case to file as many requests for arbitration as they have claims arising under different agreements, particularly where such claims are clearly connected as in the present case. Not only would this be onerous, but it would also represent a considerable waste of time and costs, and could lead to potential delaying tactics, and inconsistent determinations. More importantly such an approach is not mandated by the Convention or by the Rules.1604

b) Successive Legislation Successive pieces of legislation in host States may lead to the question of jurisdiction and applicable law (see also paras. 1085–1089 infra). In Tradex v Albania, there were consecutive pieces of legislation, providing for different forms of arbitration. A law of 1992 contained an UNCITRAL arbitration clause. A subsequent law of 1993 provided for ICSID arbitration.1605 The more recent law explicitly abrogated the earlier one. The Request for Arbitration was registered after the entry into force of the 1993 Law, but Albania contested ICSID jurisdiction, inter alia, since the investments had been made before the entry into force of the 1993 Law. The Tribunal came to the conclusion that it was more plausible to interpret the 1993 Law to the effect that ICSID arbitration should also cover disputes that had started before its entry into force.1606 The Tribunal found confirmation for this result in the fact that Albanian investment legislation showed a continuous evolution towards more advanced and efficient dispute settlement mechanisms1607 (see also para. 940 supra).

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c) Successive Treaties Successive treaties for the protection of investments can lead to overlaps and gaps.1608 In Jan de Nul v Egypt, there were two successive BITs between Belgium and Egypt. A BIT of 1977 had been replaced by one of 2002. The dispute settlement clause in the 2002 BIT provided that it would apply to investments made prior to its entry into force. At the same time, it provided that ‘[i]t shall, however, not be applicable to disputes having arisen prior to its entry into force.’ The Tribunal found that the 2002 BIT was applicable to the entire dispute. Although there had been a dispute before 2002, it had recrystallized after the new BIT’s entry into force as a consequence of a decision of an Egyptian court.1609 Egypt contended that the Tribunal had no jurisdiction over facts that took place before the entry into force of the 2002 BIT. The Tribunal rejected Egypt’s contention. It found that the legality of events that had taken place before the entry into force of the 2002 BIT had to be examined in light of the substantive provisions of the 1977 BIT. The Tribunal said:

1604 1605 1606 1608 1609

Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 160. Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 53–55. ibid 66–68. 1607 ibid 67. Jean Ho, ‘Investment Protection under Successive Treaties’ (2017) 32 ICSID Rev 58. Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 110–131.

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schreuer’s commentary on the icsid convention 132. It is undisputed, and rightly so, that the legality of an act must be assessed in the light of the law applicable at the time of its performance. This rule of intertemporal law is well established in international judicial and arbitral practice. It is a consequence of the rule on non-retroactivity, which for treaties is codified in Article 28 of the Vienna Convention [on the Law of Treaties] . . . 133. The rule that acts are governed by contemporaneous law is also reflected in Article 13 of the ILC Articles on State Responsibility (‘ILC Articles’), which rules out responsibility for an act in violation of an obligation not in effect at the time of the performance of the act . . . 134. In other words, the Tribunal must apply . . . the provisions of the 1977 BIT with regard to conduct that took place prior to the entry into force of the 2002 BIT . . .1610

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In ABCI Investments v Tunisia, there were two consecutive BITs of 1963 and 1998. The 1998 BIT provided for ICSID jurisdiction over ‘any legal dispute arising . . .’ It also provided that ‘disputes arisen’ before its entry into force would continue to be ruled by the 1963 BIT. The Tribunal found that the 1998 BIT applied only to disputes that arose after its entry into force.1611 Dede v Romania involved two successive BITs. The first BIT entered into force in 1996. It was replaced by a successor BIT that entered into force on 8 July 2010. The 2010 BIT provided that it shall not apply to any disputes that arose before its entry into force. The Request for Arbitration was registered on 3 November 2010. The parties agreed that the dispute had arisen in 2009 and Tribunal applied the 1996 BIT.1612 In Ping An v Belgium, there were two successive BITs. The first one entered into force in 1986. The second BIT, replacing the first one, entered into force in 2009. The first BIT contained a narrow jurisdiction clause, covering only the amount of compensation payable in case of an expropriation. The second BIT contained a wide jurisdiction clause. The second BIT provided that it shall apply to all investments, old or new, but not to a dispute that was under judicial or arbitral process before its entry into force.1613 The parties agreed that the dispute had arisen before the entry into force of the second BIT. The question before the Tribunal was whether the expanded jurisdiction under the second BIT applied to disputes that had arisen before its entry into force and resulting from breaches of the first BIT. The Tribunal admitted that there may be a ‘black hole’ or ‘arbitration gap’ between the two BITs.1614 It also recognized that ‘the application of a new dispute settlement mechanism to acts which may have been unlawful when they were committed is not in itself the retroactive application of law.’1615 Nevertheless, the

1610 1611 1612 1613

Jan de Nul v Egypt, Award (6 November 2008) paras 132–134 (footnotes omitted). ABCI Investments v Tunisia, Decision on Jurisdiction (18 February 2011) paras 162–170. Dede v Romania, Award (5 September 2013) paras 63–65, 172. Art. 10(2) of the BLEU–China BIT (signed 6 June 2005, entered into force 1 December 2009) provides: ‘The present Agreement shall apply to all investments made by investors of either Contracting Party in the territory of the other Contracting Party, whether made before or after the entry into force of this Agreement, but shall not apply to any dispute or any claim concerning an investment which was already under judicial or arbitral process before its entry into force. Such disputes and claims shall continue to be settled according to the provisions of the Agreement of 1984 mentioned in paragraph 1 of this Article.’ 1614 Ping An v Belgium, Award (30 April 2015) para 207. See also Qing Ren, ‘Ping An v Belgium, Temporal Jurisdiction of Successive BITs’ (2016) 31 ICSID Rev 129. 1615 Ping An v Belgium, Award (30 April 2015) para 218.

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Tribunal held that the plain meaning of the words ‘[w]hen a legal dispute arises’ excluded past disputes.1616 It followed that the Tribunal did not have jurisdiction. These cases illustrate two points. One is that the jurisdictional provision of a successor BIT may well apply to events that have arisen before its entry into force. In that case, the substantive provisions of the predecessor BIT may have to be applied to the merits (see paras. 921–943 supra). The second point concerns the exclusion of disputes that have arisen before the new BIT’s entry into force. Provisions of this kind may create a jurisdictional gap depriving the investor of access to arbitration. A different issue of successive treaties arises where the respondent argues that the treaty offering consent has been superseded by a subsequent treaty. Under Art. 30 of the VCLT, in the case of successive treaties relating to the same subject-matter, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty provided all the parties to the earlier treaty are parties also to the later treaty.1617 In CMC v Mozambique, the Respondent argued that the Italy–Mozambique BIT containing consent to ICSID arbitration had been superseded by the later Cotonou Agreement.1618 The Tribunal found that the BIT and the Cotonou Agreement did not relate to the same subject-matter. After noting that one of the aims of the Cotonou Agreement was the facilitation of the negotiation of BITs, the Tribunal said:

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It would seem evident that a treaty that affirms the need for and importance of investment promotion and protection agreements, and in which the Parties undertake to study the main clauses of such an agreement, is not itself an investment promotion and protection agreement. The Cotonou Convention and the BIT thus appear to the Tribunal not to deal with ‘the same subject-matter.’1619

In cases involving intra-EU BITs and the ECT, respondent States, as well as the European Commission, have argued that these treaties have become inapplicable by virtue of subsequent incompatible provisions of EU law. In particular, Arts. 267 and 344 of the TFEU were said to have superseded the arbitration provisions of these BITs and the ECT by virtue of Arts. 30 and 59 of the VCLT.1620 Tribunals have consistently rejected these arguments. They have held, inter alia, that the relevant provisions of EU law were not later in time,1621 that the provisions of EU law and the arbitration

1616 ibid para 224. 1617 VCLT (n 804) Art. 30(3) provides: ‘When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty.’ 1618 Partnership Agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part (signed 23 June 2000, entered into force 1 April 2003) [2000] OJ L 317/3. 1619 CMC v Mozambique, Award (24 October 2019) para 276. The Tribunal added that the two treaties were entirely compatible, see ibid paras 277, 331. 1620 VCLT (n 804) Art. 59(1)(b) reads: ‘Termination or suspension of the operation of a treaty implied by conclusion of a later treaty: 1. A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject matter and: . . . (b) the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time.’ 1621 Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) para 218.

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provisions in the BITs and the ECT did not address the same subject-matter,1622 and that the two sets of provisions were not incompatible.1623 The Tribunal in UP and CD Holding v Hungary summarized the situation in the following terms: The BIT and the TFEU do not relate to the same subject matter, and this renders Art. 59(1)(b) of the VCLT (implicit termination of an earlier treaty by a subsequent one) and Art. 30(3) of the VCLT (inapplicability of incompatible provisions in the earlier treaty) inapplicable. The lex posterior rule of Art. 30 of the VCLT does not apply because neither requirement – (1) the existence of a fundamental incompatibility between provisions of two successively ratified treaties, or (2) that the two rules in conflict have the same subject matter – is fulfilled. Respondent has failed to demonstrate that a fundamental or material incompatibility exists between Art. 9(2) of the BIT and the TFEU.1624

11. The Applicability of MFN Clauses to Consent 1021

A most-favored-nation (MFN) clause contained in a treaty extends the better treatment granted to a third State or its nationals to a beneficiary of the treaty.1625 Most BITs, the NAFTA (Art. 1103), the USMCA (Art. 14.5), and the ECT (Art. 10(7)) contain MFN clauses. Some of these MFN clauses specify whether they cover dispute settlement. But most MFN clauses are worded in general terms and typically just refer to the treatment of investments. This has led to the question whether the effect of MFN clauses extends to the provisions on dispute settlement in these treaties.1626 Is it possible to

1622 Marfin and others v Cyprus, Award (26 July 2018) paras 583–595; NextEra v Spain, Decision on Jurisdiction, Liability and Quantum Principles (12 March 2019) para 352; Eskosol v Italy, Decision on Termination Request and Intra-EU Objection (7 May 2019) paras 127–147; OperaFund v Spain, Award (6 September 2019) para 383; BayWa v Spain, Decision on Jurisdiction and Liability (2 December 2019) paras 272–273; Micula v Romania II, Award (5 March 2020) paras 273–281. 1623 Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 4.191; Blusun v Italy, Award (12 December 2016) paras 229–303; United Utilities v Estonia, Award (21 June 2019) paras 544–566; Belenergia v Italy, Award (6 August 2019) paras 320–321. 1624 UP and CD Holding v Hungary, Award (9 October 2018) para 218. 1625 See also Rudolf Dolzer and Terry Myers, ‘After Tecmed: Most-Favored-Nation Clauses in Investment Protection Agreements’ (2004) 19 ICSID Rev 49; August Reinisch, ‘Most Favoured Nation Treatment’ in Bungenberg and others (n 18) 807; Inna Uchkunova and Oleg Temnikov, ‘Toss out the Baby and Put the Water to Bed: On MFN Clauses and the Significance of Treaty Interpretation’ (2015) 30 ICSID Rev 414; David D Caron and Esmé Shirlow, ‘Most-Favored-Nation Treatment: Substantive Protection’ in Kinnear and others (n 255) 399; Patrick Dumberry, ‘The Importation of the FET Standard through MFN Clauses: An Empirical Study of BITs’ (2017) 32 ICSID Rev 116; Abby Cohen Smutny, Petr Polášek and Chad Farrell, ‘The MFN Clause and Its Evolving Boundaries’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements (OUP 2018) 23.01; N Jansen Calamita and Ewa Zelazna, ‘Most-Favoured Nation Clauses and the Centrality and Limits of General Principles’ in Andrea Gattini and others (eds), General Principles of Law and International Investment Arbitration (Brill Nijhoff 2018) 398. 1626 See Emmanuel Gaillard, ‘Establishing Jurisdiction through a Most-Favored-Nation Clause’ (2 June 2005) 233 NYLJ; Dana H Freyer and David Herlihy, ‘Most-Favored-Nation Treatment and Dispute Settlement in Investment Arbitration: Just How “Favored” is “Most-Favored”?’ (2005) 20 ICSID Rev 58; Stephen Fietta, ‘Most Favoured Nation Treatment and Dispute Resolution under Bilateral Investment Treaties: A Turning Point?’ (2005) 2(3) TDM; Nick Gallus, ‘Plama v Bulgaria and the Scope of Investment Treaty MFN Clauses’ (2005) 2(3) TDM; Walid Ben Hamida, ‘Clause de la nation la plus favorisée et mécanismes de règlement des différends: que dit l’histoire?’ (2007) 4 JDI 1127; Walid Ben Hamida, ‘MFN Clause and Procedural Rights: Seeking Solutions from WTO Experiences’ (2009) 6(1) TDM; Steingruber (n 1281) 306–318; Christopher Greenwood, ‘Reflections on “Most

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avoid the limitations and conditions attached to consent, or even to overcome the absence of consent to arbitration by relying on the treaty’s MFN clause?

a) The Wording of MFN Clauses Much depends on the wording of the particular MFN clause. Some BITs indicate whether an MFN clause applies to dispute settlement or not. For instance, the Austria– Kazakhstan BIT provides in Art. 3(3):

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Each Party shall accord to investors of the other Party and to their investments or returns treatment no less favourable than that it accords to its own investors and their investments or to investors of any third State and their investments or returns with respect to the management, operation, maintenance, use, enjoyment, sale and liquidation as well as dispute settlement of their investments or returns, whichever is more favourable to the investor.1627

MFN clauses in British BITs typically specify the Articles to which MFN treatment is to apply.1628 In Garanti Koza v Turkmenistan, the Turkmenistan–United Kingdom BIT in Art. 3(3) contained the following specification to its MFN clause:

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For the avoidance of doubt it is confirmed that the [MFN] treatment provided for in paragraphs (1) and (2) above shall apply to the provisions of Articles 1 to 11 of this Agreement.

Since Art. 8 of the BIT, dealing with investor–State arbitration, was among the listed ‘Articles 1 to 11,’ the Tribunal found that the Claimant, as a UK investor, was entitled by the MFN provision to avail itself of the more favorable dispute settlement provision contained in the Switzerland–Turkmenistan BIT.1629 In Beijing Urban Construction v Yemen, Art. 3 of the China–Yemen BIT contained an MFN clause that related to ‘treatment accorded to investors of the other Contracting Party in its territory.’1630 The Tribunal rejected the invocation of the MFN clause to jurisdiction. The words ‘in the territory’ suggested application to material rights and not to international arbitration, which is not an activity inherently linked to the host State’s territory.1631

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b) MFN Status and Procedural Conditions to Consent Some cases deal with the attempt to use an MFN clause to overcome conditions that are attached to consent and constitute procedural obstacles to arbitration (see paras.

1627 1629 1630 1631

Favoured Nation” Clauses in Bilateral Investment Treaties’ in Caron and others (n 50) 556; Stephan W Schill, ‘Maffezini v Plama: Reflections on the Jurisprudential Schism in the Application of MostFavored-Nation Clauses to Matters of Dispute Settlement’ in Kinnear and others (n 255) 251; Sam Wordsworth and Chester Brown, ‘A Re-run of Siemens, Wintershall and Hochtief on Most-FavouredNation Clauses: Daimler Financial Services AG v Argentine Republic’ (2015) 30 ICSID Rev 365. Emphasis added. 1628 See UK Model IPPA (2008) Art. 3(3). Garanti Koza v Turkmenistan, Decision on Jurisdiction (3 July 2013) paras 39–96. In the same sense, Krederi v Ukraine, Award (2 July 2018) paras 283–343. Beijing Urban Construction v Yemen, Decision on Jurisdiction (31 May 2017) para 112 (emphasis added). ibid paras 110–121.

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981–998 supra). They typically concern the requirement to use domestic courts for a certain period of time before resorting to arbitration. In Maffezini v Spain, the consent clause in the Argentina–Spain BIT required resort to the host State’s domestic courts for 18 months before the institution of arbitration. That BIT contained the following MFN clause: In all matters subject to this Agreement, this treatment shall not be less favorable than that extended by each Party to the investments made in its territory by investors of a third country.

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The Argentinian Claimant relied on that clause to invoke the Chile–Spain BIT, which did not contain the requirement to try the host State’s courts for 18 months. The Tribunal undertook a detailed analysis of the applicability of MFN clauses to dispute settlement arrangements1632 and concluded: the most favored nation clause included in the Argentine–Spain BIT embraces the dispute settlement provisions of this treaty. Therefore, relying on the more favourable arrangements contained in the Chile–Spain BIT and the legal policy adopted by Spain with regard to the treatment of its own investors abroad, the Tribunal concludes that Claimant had the right to submit the instant dispute to arbitration without first accessing the Spanish courts.1633

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However, the Maffezini tribunal warned against exaggerated expectations attached to the operation of MFN clauses and distinguished between the legitimate extension of rights and benefits and disruptive treaty shopping. In particular, the MFN clause should not override public policy considerations that the contracting parties had in mind as fundamental conditions for their acceptance of the agreement.1634 Tribunals have adopted this solution in a number of subsequent decisions. They confirmed that the claimants were entitled to rely on the MFN clause in the applicable treaty to invoke the more favorable dispute settlement clause of another treaty that did not contain the eighteen-months rule.1635 These tribunals pointed out that arbitration was an important part of the protection of foreign investors and that MFN clauses should consequently apply to dispute settlement. For instance, the Tribunal in Gas Natural v Argentina said: assurance of independent international arbitration is an important – perhaps the most important – element in investor protection. Unless it appears clearly that the state parties to a BIT or the parties to a particular investment agreement settled on a different method

1632 Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 38–64. 1633 ibid para 64. 1634 ibid paras 62, 63. 1635 Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 32–110; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 24–31, 41–49; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 52–66; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 52–68 (confirmed in ibid, Decision on Annulment (5 May 2017) paras 220–261); Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) paras 91–114; National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) paras 53–94; Impregilo v Argentina, Award (21 June 2011) paras 51–109; Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) paras 56–99; Teinver v Argentina, Decision on Jurisdiction (12 December 2012) paras 137–186.

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for resolution of disputes that may arise, most-favored-nation provisions in BITs should be understood to be applicable to dispute settlement.1636

However, practice on the application of MFN clauses to overcome procedural hurdles to arbitration is not uniform. In another group of cases, tribunals were more restrictive and refused to apply MFN clauses even to procedural questions such as the requirement to first seek a remedy in domestic courts for a certain period of time.1637 In these decisions, tribunals relied on the central role of consent in international adjudication, on the ejusdem generis principle, on the Parties’ presumed intention, as well as on the separability of dispute settlement clauses.

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c) MFN Status and the Existence of Consent Another type of argument invoking MFN clauses does not concern procedural obstacles, but the existence or scope of consent to arbitration. In these cases, the claimants invoked MFN clauses in treaties to create a jurisdiction that is otherwise absent or to expand the tribunal’s scope of jurisdiction. In these cases, tribunals have overwhelmingly rejected reliance on the MFN clauses.1638 Instances of application of MFN clauses to jurisdiction are rare.1639 In Plama v Bulgaria, the Tribunal found that it had jurisdiction on the basis of Art. 26 of the ECT.1640 The Claimant additionally attempted to base the Tribunal’s jurisdiction on the Bulgaria–Cyprus BIT. That BIT provided for investor–State arbitration only in very limited terms. The Claimant sought to use an MFN clause in that BIT to avail itself of the Bulgaria–Finland BIT. The Tribunal rejected this attempt stating that any intention to incorporate dispute settlement provisions from another treaty, by way of an MFN clause, would have to be expressed clearly and unambiguously. It said: an MFN provision in a basic treaty does not incorporate by reference dispute settlement provisions in whole or in part set forth in another treaty, unless the MFN provision in the basic treaty leaves no doubt that the Contracting Parties intended to incorporate them.1641

1636 Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) para 49. 1637 Wintershall v Argentina, Award (8 December 2008) paras 158–197; Daimler v Argentina, Award (22 August 2012) paras 160–281; Kiliç v Turkmenistan, Award (2 July 2013) paras 7.1.1–7.9.1; H&H v Egypt, Award (6 May 2014) paras 356–358. 1638 Tecmed v Mexico (AF), Award (29 May 2003) paras 69, 74; Salini v Jordan, Decision on Jurisdiction (29 November 2004) paras 102–119; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 183–227; Telenor v Hungary, Award (13 September 2006) paras 20, 41, 52, 56, 83–102; Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 189–220; Accession Mezzanine v Hungary, Decision under Rule 41(5) (16 January 2013) paras 73–74; Ansung Housing v China, Award (9 March 2017) paras 123–144; Menzies v Senegal, Award (5 August 2016) paras 132–145; Itisaluna v Iraq, Award (3 April 2020) paras 192–225. See also the non-ICSID case Doutremepuich v Mauritius (UNCITRAL), Award on Jurisdiction (23 August 2019) paras 188–235. 1639 But see UP and CD Holding v Hungary, Decision on Jurisdiction (3 March 2016) paras 159–222. In the non-ICSID case RosInvest v Russia (SCC), Award on Jurisdiction (October 2007) paras 124–139, the Tribunal applied the MFN clause in the Soviet Union–United Kingdom BIT to import the wider jurisdictional clause from the Denmark–Russia BIT. 1640 Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 179. 1641 ibid para 223.

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In Telenor v Hungary, consent to investor–State arbitration under the Hungary– Norway BIT was limited to the consequences of expropriation. The Claimant sought to rely on the MFN clause in the BIT to benefit from wider dispute resolution provisions in BITs between Hungary and other countries. However, the Tribunal found that the term ‘treatment’ contained in the MFN clause referred to substantive, but not to procedural rights. Deciding otherwise would lead to undesirable treaty-shopping creating uncertainty and instability. Also, the jurisdiction of an arbitral tribunal, as determined by a BIT, was not to be inferentially extended by an MFN clause seeing that Hungary and Norway had made a deliberate choice to limit arbitration.1642 The Tribunal said: The Tribunal therefore concludes that in the present case the MFN clause cannot be used to extend the Tribunal’s jurisdiction to categories of claim other than expropriation, for this would subvert the common intention of Hungary and Norway in entering into the BIT in question.1643

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The two sets of cases may be distinguishable on factual grounds. Most of the cases in which the tribunals accepted the applicability of MFN clauses concerned procedural conditions to consent. Most of the cases in which they denied the effect of the MFN clauses concerned attempts to extend jurisdiction to issues not covered by consent clauses in the basic treaties. Nevertheless, there is substantial contradiction in the reasoning of the tribunals. The tribunals made conflicting statements as to the applicability, or otherwise, of MFN clauses to dispute settlement in general.

12. The Interpretation of Consent a) The Law Applicable to the Interpretation of Consent 1036

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The consent to ICSID’s jurisdiction may require interpretation. This raises the question of the appropriate methods for the interpretation of an expression of consent. The first step in such an inquiry is the identification of the law applicable to this issue.1644 Tribunals have held consistently that questions of jurisdiction are not subject to Art. 42, which governs the law applicable to the merits of the case. Rather, questions of jurisdiction are governed by Art. 25 of the Convention and by the instruments expressing consent (see Art. 42, paras. 5–15). In cases involving consent expressed in direct agreements between the host State and the investor, the parties have repeatedly relied on the international nature of the consent clauses. In Amco v Indonesia, consent was based on an investment application providing for ICSID arbitration that had been accepted by the host State. The Tribunal said that it would determine the true common will and intention of the parties from the normal expectations of the parties, as they may be established in view of the agreement as a whole, and of the aim and the spirit of the Washington Convention as well as of the Indonesian legislation and behaviour.1645

1642 Telenor v Hungary, Award (13 September 2006) paras 90–97. 1643 ibid para 100. 1644 Steingruber (n 1281) 225–235. 1645 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 18. See also ibid paras 21–23.

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In CSOB v Slovakia, consent to arbitration was based on a contract between the parties that referred to a BIT. Although the BIT had never entered into force, the Tribunal concluded that by referring to the BIT the parties had incorporated the arbitration clause in the BIT into their contract1646 (see paras. 777, 827 supra). With respect to the interpretation of the consent agreement the Tribunal had no doubt that it was governed by international law:

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The question of whether the parties have effectively expressed their consent to ICSID jurisdiction is not to be answered by reference to national law. It is governed by international law as set out in Article 25(1) of the ICSID Convention.1647

Where consent is based on a clause in domestic legislation,1648 reliance on domestic law principles of statutory interpretation would seem to suggest itself. But it must be kept in mind that an ICSID clause in legislation is only the first step towards agreed consent. The offer must be accepted in writing by the investor (see paras. 814–824 supra). From the perspective of international law, the offer of consent in domestic legislation is a unilateral act that may have to be interpreted accordingly.1649 In cases involving consent by way of domestic legislation, tribunals have grappled with the relative emphasis to be given to domestic law and international law.1650 In SPP v Egypt, jurisdiction rested on a provision in Egyptian legislation (see paras. 790–792 supra). The Tribunal refused to accept Egypt’s argument that the parties’ consent to arbitration should therefore be interpreted in accordance with Egyptian law. It also did not accept the Claimant’s argument that the arbitration clause was subject to the rules of treaty interpretation.1651 The issue was whether unilaterally enacted legislation had created an international obligation under a multilateral treaty (the ICSID Convention). This involved statutory and treaty interpretation as well as certain aspects of international law governing unilateral juridical acts.1652 A series of cases turned on the interpretation of Art. 22 of Venezuela’s Investment Law and on the question whether Venezuela had offered consent through that piece of legislation (see paras. 810–812 supra). In these cases, the parties differed on the relative significance of domestic law and of international law in interpreting this provision. The Tribunals, though with certain variations in emphasis, found that both the host state’s law and international law had to be taken into account.1653 The Tribunal in Tidewater v

1646 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 49–55. 1647 ibid para 35. 1648 See Potestà (n 1305). 1649 See ILC, ‘Guiding Principles Applicable to Unilateral Declarations of States Capable of Creating Legal Obligations’ (2006) UN Doc A/CN.4/L.703, 2; W Michael Reisman and Mahnoush H Arsanjani, ‘The Question of Unilateral Governmental Statements as Applicable Law in Investment Disputes’ (2004) 19 ICSID Rev 328; Caron (n 1305) 653; Yulia Andreeva, ‘Interpreting Consent to Arbitration as a Unilateral Act of State: A Case against Conventions’ (2011) 27 Arb Int’l 129; S Mullen and E Whitsitt, ‘ICSID and Legislative Consent to Arbitrate: Questions of Applicable Law’ (2017) 32 ICSID Rev 92. 1650 Zhinvali v Georgia, Award (24 January 2003) paras 339–340; PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) paras 264–265; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 5.32–5.33 and Award (14 October 2016) para 5.71; Lighthouse Corp v TimorLeste, Award (22 December 2017) paras 149–153. 1651 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 55–60. 1652 ibid para 61. 1653 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 71–85; CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) para 67–139; Brandes v Venezuela, Award (2 August

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Venezuela discussed the relative weight to be given to domestic law and international law in some detail.1654 It said: 81. . . . It is the Tribunal’s view that the Investment Law being a municipal legal instrument susceptible to having effects on the international plane, both national rules of interpretation and international rules of interpretation have their role to play. 86. The Tribunal does not consider that national law has to be completely disregarded, but considers that logic implies that an act, which is both rooted in the national legal order and extends its effects in the international legal order, has to be interpreted by reference to both legal orders. Thus, an ICSID tribunal determining its jurisdiction is not required to interpret the instrument of consent according primarily to national law, but rather has to take into account the principles of international law. . . . 103. . . . domestic law has a role to play first in order to ascertain the existence and validity of the national law, but also in order to help understanding the intention of the state in adopting such law.1655

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Where consent is based on a treaty, tribunals have applied principles of treaty interpretation.1656 In Vestey v Venezuela, the Tribunal described the question of the law applicable to consent based on an offer in a treaty, in the following terms: 114. It is common ground between the Parties that jurisdiction must be established under both Article 25 of the ICSID Convention and the BIT. . . . 115. It is equally undisputed that the Tribunal’s jurisdiction is governed by international law (save of course when international law refers to municipal law . . .). Similarly, it is uncontroversial that the interpretation of the ICSID Convention and the BIT is governed by customary international law as codified in the Vienna Convention on the Law of Treaties of 23 May 1969 (‘VCLT’). . . .1657

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However, it must be kept in mind that an ICSID clause in a treaty is only the first step towards agreed consent. The offer must be accepted in writing by the investor (see paras. 850–862 supra). The perfected consent is neither a treaty nor simply a contract under domestic law, but an agreement between the host State and the investor based on a treaty. The available practice, as set out above, varies in its emphasis on domestic and on international law. Some of this variation is due to the different ways in which consent is expressed by way of contracts, on the basis of legislation, or on the basis of treaties. The end result is always an agreement between a State and a foreign investor. This leads to a methodological mix involving treaty interpretation, statutory interpretation, and general principles of contract law. The framework for this process is always Art. 25 of the Convention.

1654 1655 1656 1657

2011) paras 36, 81; OPIC Karimum v Venezuela, Award (28 May 2013) paras 70–76; ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) para 255. Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013) paras 75–141. ibid paras 81, 86, 103. Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 20; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 430. Vestey v Venezuela, Award (15 April 2016) paras 114–115.

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b) Restrictive or Extensive Interpretation of Consent A recurrent argument of respondents before ICSID tribunals is that consent by the host State to jurisdiction should be construed restrictively. The Claimants have invoked an alleged principle of interpretation in the opposite sense: that of effective interpretation epitomized in the Latin phrase ut res magis valeat quam pereat. ICSID tribunals have been disinclined to embrace either of the two principles.1658 Where claimants invoked consent through direct agreement, respondents have relied on the argument that there was a presumption against the limitation of a State’s sovereignty.1659 Respondents have also argued against derogation from general principles of law concerning dispute settlement1660 or suggested that ICSID jurisdiction was in derogation from general rules of municipal law and had to be interpreted strictly.1661 Arguments inspired by international law, and seeking to uphold jurisdiction, relied on the principle of effective interpretation1662 and pacta sunt servanda.1663 In general, tribunals have rejected either restrictive or extensive interpretations of consent clauses contained in contracts.1664 In Amco v Indonesia, the Tribunal was confronted with the argument that consent given by a sovereign State to an arbitration convention amounted to a limitation of its sovereignty and should be construed restrictively.1665 The Tribunal rejected this contention categorically. It said:

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[A] convention to arbitrate is not to be construed restrictively, nor, as a matter of fact, broadly or liberally. It is to be construed in a way which leads to find out and to respect the common will of the parties: such a method of interpretation is but the application of the fundamental principle pacta sunt servanda, a principle common, indeed, to all systems of internal law and to international law.1666

In the Tribunal’s view, the proper method for the interpretation of the consent agreement was to read it in the spirit of the ICSID Convention and in the light of its objectives. ICSID arbitration was in the interest of both parties, a thought that was expressed in the first paragraph of the Convention’s Preamble. The investor’s interest in submitting investment disputes to international arbitration was matched by a parallel 1658 Steingruber (n 1281) 235–239; Mara Valenti, ‘The Scope of an Investment Treaty Dispute Resolution Clause – It Is Not Just a Question of Interpretation’ (2013) 29 Arb Int’l 243; Weeramantry (n 266) 164–168, 195–198; Gazzini (n 266). 1659 See Lalive (n 53) 150, 153, 158 (reporting on arguments raised in Holiday Inns v Morocco); Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 16. 1660 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 48. 1661 ibid, Award (25 February 1988) para 4.08. 1662 See Lalive (n 53) 151–154 (reporting on arguments raised in Holiday Inns v Morocco). 1663 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14. 1664 SOABI v Senegal, Award (25 February 1988) para 4.08–4.10; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 34; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 195–197; Duke Energy v Ecuador, Award (18 August 2008) paras 129–132; Lighthouse Corp v Timor-Leste, Award (22 December 2017) paras 147–148. For a rare voice for an interpretation in favor of arbitration, see Millicom v Senegal, Decision on Jurisdiction (16 July 2010) para 98. 1665 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 12, 16. 1666 ibid para 14 (emphases in the original). See also to the same effect ibid paras 18, 29. This passage was quoted with approval in Cable TV v St Kitts and Nevis, Award (13 January 1997) para 6.27; Ethyl v Canada (UNCITRAL), Award on Jurisdiction (24 June 1998) (2005) 7 ICSID Reports 12, para 55; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 34; Inceysa v El Salvador, Award (2 August 2006) para 177; Duke Energy v Peru, Decision on Annulment (1 March 2011) para 140.

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interest of the host State: to protect investments is to protect the general interest of development and of developing countries.1667 In cases involving national legislation as a basis for jurisdiction, most tribunals also preferred a balanced approach.1668 In SPP v Egypt, the Tribunal, interpreting an ICSID clause in national legislation, found that there was neither a presumption in favor of, nor against, jurisdiction. The Tribunal said: Thus, jurisdictional instruments are to be interpreted neither restrictively nor expansively, but rather objectively and in good faith, and jurisdiction will be found to exist if – but only if – the force of the arguments militating in favor of it is preponderant.1669

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The ‘Guiding Principles applicable to unilateral declarations of States capable of creating legal obligations,’ which were adopted by the ILC in 2006,1670 contain criteria for the interpretation of unilateral declarations. These include the principle that unilateral declarations entail obligations only if they are stated in clear and specific terms and that, in case of doubt, such obligations must be interpreted restrictively.1671 In Mobil v Venezuela, the Tribunal concluded that this principle did not apply to unilateral acts formulated in the framework and on the basis of a treaty, such as the ICSID Convention.1672 Other tribunals have followed the same approach.1673 In Tidewater v Venezuela, the Tribunal distinguished between unilateral acts adopted in the framework of a treaty and other unilateral acts. The Tribunal found that the restrictive approach, envisaged by the ILC’s Guiding Principles, may well apply to the latter category, but would not apply to acts adopted in the framework of a treaty. The reference to ICSID in the Investment Law had to be interpreted in analogy to a unilateral declaration of a State accepting the compulsory jurisdiction of the ICJ in the framework of Art. 36(2) of the ICJ Statute.1674 The Tidewater tribunal found that these sui generis rules applicable to unilateral offers of jurisdiction were encapsulated in a passage from the ICJ’s Fisheries Jurisdiction case.1675 The ICJ had found that these rules would require that the interpretation be performed in a natural and reasonable way, having due regard to the intention of the State concerned at the time when it accepted the compulsory jurisdiction of the Court. The intention of a . . . State may be deduced not only from the text of the relevant clause, but also from the context in which the clause is to be read, and an examination of evidence regarding the circumstances of its preparation and the purposes intended to be served.1676

1667 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 23. 1668 In Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47, 68, the Tribunal found that the relevant Albanian Law should be interpreted in favor of ICSID jurisdiction in case of doubt. 1669 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 63. 1670 ILC (n 1649). 1671 ibid, Guiding Principle 7. 1672 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 89–92. 1673 CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 81–85; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 5.34. 1674 Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013) paras 87–99. 1675 Fisheries Jurisdiction (Spain v Canada) (Jurisdiction) [1998] ICJ Rep 432. 1676 ibid para 49.

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In other cases, ICSID tribunals rejected any presumption in favor of or against jurisdiction based on consent expressed in national legislation.1677 A number of tribunals have emphasized the relevance of the intention of the State adopting the legislation.1678 The interpretation of consent offered through treaties has led to similar debates. Some tribunals seemed to suggest a restrictive interpretation of consent.1679 In Plama v Bulgaria, the Tribunal stated that the arbitration agreement should be ‘clear and unambiguous.’1680 Some tribunals have specifically distanced themselves from that statement.1681 A clear majority of tribunals interpreting treaty-based consent have endorsed a balanced approach. In Mondev v United States, the Respondent argued that its consent to arbitration under the NAFTA was given only subject to the conditions set out in that treaty, ‘which conditions should be strictly and narrowly construed.’1682 The Tribunal rejected this contention. It said:

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In the Tribunal’s view, there is no principle either of extensive or restrictive interpretation of jurisdictional provisions in treaties. In the end the question is what the relevant provisions mean, interpreted in accordance with the applicable rules of interpretation of treaties. These are set out in Articles 31–33 of the Vienna Convention on the Law of Treaties, which for this purpose can be taken to reflect the position under customary international law.1683

A number of other tribunals have also endorsed a balanced approach to the interpretation of consent clauses in treaties. Such an approach rejects both a presumption against and in favor of jurisdiction.1684

1677 CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 104–114; PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) paras 253–255; Lighthouse Corp v TimorLeste, Award (22 December 2017) para 148. 1678 Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 119; CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) para 87; OPIC Karimum v Venezuela, Award (28 May 2013) paras 77–80; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 5.35. 1679 SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 171; Wintershall v Argentina, Award (8 December 2008) para 160(3); Tulip v Turkey, Decision on Jurisdiction Issue (5 March 2013) para 44. 1680 Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 198. See also Wintershall v Argentina, Award (8 December 2008) para 167; ConocoPhillips v Venzuela, Decision on Jurisdiction and Merits (3 September 2013) para 254. 1681 Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 64; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) para 66; Garanti Koza v Turkmenistan, Decision on Jurisdiction (3 July 2013) para 22; Churchill Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 148. 1682 Mondev v United States (AF), Award (11 October 2002) para 42. 1683 ibid para 43 (footnotes omitted). The Tribunal cited several decisions by the ICJ and other tribunals. 1684 Inceysa v El Salvador, Award (2 August 2006) paras 176–181; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 195–197; Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) para 37; Libananco v Turkey, Award (2 September 2011) para 540; Iberdrola v Guatemala, Award (17 August 2012) para 303; Daimler v Argentina, Award (22 August 2012) paras 174–178; Garanti Koza v Turkmenistan, Decision on Jurisdiction (3 July 2013) para 23; National Gas v Egypt, Award (3 April 2014) para 119.

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J. ‘When the parties have given their consent, no party may withdraw its consent unilaterally.’

1. The Irrevocability of Consent 1057

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The Working Paper, the Preliminary Draft, and the First Draft did not contain express statements to the effect that consent, once given, was irrevocable (History, Vol. I, pp. 110–116). But it does not appear that the principle was ever cast into doubt. Mr. Broches explained tirelessly that while there was no obligation to give consent, once such an undertaking was voluntarily made, no subsequent withdrawal should be possible (History, Vol. II, pp. 68, 70, 241, 303, 334, 335, 402, 403, 405, 406, 464, 503). He was joined by a number of delegates, mainly from developed countries (ibid., pp. 305, 402, 403, 405, 701). Eventually, Italian and British proposals suggested that this principle should be stated explicitly in the Convention (ibid., p. 757). After some further deliberation (ibid., p. 836), it was adopted in the Revised Draft in its final form. The principle of irrevocability of consent is confirmed by the Convention’s Preamble, which states: Recognizing that mutual consent by the parties to submit such disputes to conciliation or to arbitration through such facilities constitutes a binding agreement which requires in particular that due consideration be given to any recommendation of conciliators, and that any arbitral award be complied with.

1059 1060

The principle is reiterated in the Report of the Executive Directors, which points out that ‘[c]onsent to jurisdiction . . . once given cannot be withdrawn unilaterally.’1685 The irrevocability of consent is a consequence of consent and not a condition for its validity. The Tribunal in Abaclat and others v Argentina said in this respect: With regard to the irrevocability of the consent, this irrevocability is not a prerequisite of a valid consent but rather a consequence of the existence of a valid consent: If a party has validly consented to ICSID arbitration, such consent is irrevocable. Thus, although irrevocability and validity go hand in hand, irrevocability does not constitute a separate validity requirement. Thus, whilst it is necessary, it is also sufficient that the party giving its consent be aware of and agrees with such irrevocable nature.1686

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The binding and irrevocable nature of consent to the jurisdiction of ICSID is a manifestation of the maxim pacta sunt servanda and applies to undertakings to arbitrate in general.1687 The principle’s aptness is obvious where the consent is expressed in a compromissory clause contained in a direct agreement between the host State and the investor.1688 It applies equally where an offer of consent is contained in national legislation or a treaty, which has been accepted by the investor (see paras. 780–874 supra). Consent to ICSID’s jurisdiction is always by agreement, even if the elements of agreement are expressed in separate documents (see paras. 775, 814, 850, 881 supra).

1685 (1993) 1 ICSID Reports 23, 28, para 23. 1686 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 439. 1687 See Georges R Delaume, ‘The Finality of Arbitrations Involving States: Recent Developments’ (1989) 5 Arb Int’l 21, 24 ff; Steingruber (n 1281) 216–218. 1688 See the obiter dictum in SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 43.

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The irrevocability of consent operates only after the consent has been perfected. A mere offer of consent to ICSID’s jurisdiction may be withdrawn at any time unless, of course, it is irrevocable by its own terms. In the case of national legislation and treaty clauses providing for ICSID jurisdiction, the investor must have accepted the consent in writing to make it irrevocable. Therefore, it is not advisable for an investor to rely on an ICSID consent clause contained in the host State’s domestic law or in a treaty without making a reciprocal declaration of consent. The investor may accept the offer of consent simply by instituting proceedings before the Centre (see paras. 815, 882 supra), but in doing so it runs the risk that the offer may be withdrawn at any time before then.1689 Instead, the investor should perfect consent by accepting the offer as early as possible. The perfection of consent may also be delayed by other circumstances. If either the host State, or the State of the investor’s nationality, has not yet ratified the Convention at the time consent is given by the parties, the consent will only be perfected, and hence become irrevocable, once these objective conditions for jurisdiction have been met (see para. 885 supra). In Holiday Inns v Morocco, neither the host State nor the State of the investor’s nationality were parties to the Convention on the date the agreement containing the consent clause was signed. The Tribunal noted the dates of the subsequent ratifications by the two States and concluded:

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it is on the last of those dates . . . that the Parties ‘have consented to submit the dispute to arbitration’ within the meaning of Article 25(2)(b) of the Convention. From that date neither Party could unilaterally withdraw its consent as provided in Article 25(1).1690

Similar considerations must apply to consent given by a constituent subdivision or agency of the host State. Such consent is subject to the condition that the constituent subdivision or agency has been designated to the Centre (see paras. 549–571 supra), and that its consent has been approved by the State, or that the State has notified the Centre that no such approval is required (see paras. 1446–1471 infra). It is not until these conditions are met that the consent becomes effective and hence irrevocable. The irrevocability of consent only applies to unilateral attempts at withdrawal. It is clear that the parties may terminate consent to jurisdiction by mutual agreement either before or after the institution of proceedings. In particular, the parties may reach a settlement and discontinue proceedings (see Art. 48, paras. 88–107). The Convention not only declares the unilateral withdrawal of consent inadmissible but also makes provision for the institution and continuance of proceedings despite the refusal of a party to cooperate. The provisions on the constitution of conciliation commissions and arbitral tribunals (Arts. 29–30, 37–38), on ex parte procedure (Arts. 34(2), 45), and on the enforcement of awards (Art. 54) are designed to secure the successful conclusion of proceedings even in the face of a recalcitrant party. The parties are free to subject their consent to limitations and conditions (see paras. 948–998 supra). However, once consent has been given, its irrevocability extends to the

1689 See also Hirsch (n 951) 50. 1690 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 146, fn 2). See also paras 611, 612, 886 supra.

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introduction of new limitations and conditions. In other words, the prohibition of withdrawal covers the full extent of the consent to jurisdiction.

2. Prohibition of Indirect Withdrawal of Consent a) Notification under Art. 25(4) 1069

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Contracting States may notify the Centre of classes of disputes that they would not consider submitting to the jurisdiction of the Centre (see paras. 1472–1507 infra). A notification of this kind may not be used to withdraw or limit a consent given previously. The point is well illustrated by three related cases instituted against Jamaica.1691 In all three cases, the Government had entered into agreements with the foreign investor containing ‘no further tax’ clauses and clauses containing consent to ICSID’s jurisdiction.1692 All three cases involved bauxite mining. On 8 May 1974, Jamaica notified ICSID that disputes arising out of investments relating to minerals and other natural resources ‘shall not be subject to the jurisdiction of the Centre.’1693 The notification was phrased to match the wording of Art. 25(4) of the Convention, but was evidently designed to withdraw consent with respect to the three investors. One month later, Jamaica enacted new legislation that brought about a ninefold increase in the taxes on the mining operations.1694 The three Tribunals found that the Government could not limit or withdraw its consent to jurisdiction by way of a notification under Art. 25(4): In the present case the written consent was contained in the arbitration clauses between the Government and Kaiser . . . This consent having been given could not be withdrawn. The notification under Article 25 only operates for the future by way of information to the Centre and potential future investors in undertakings concerning minerals and other natural resources of Jamaica.1695

1071

The Tribunals added that any other interpretation would very largely, if not wholly, deprive the Convention of any practical value for Contracting States and investors.1696

b) Denunciation of the Convention 1072

Under Art. 71, a Contracting State may denounce the Convention at six months’ notice. Since participation by the host State and the investor’s State of nationality are conditions for the validity of consent (see paras. 885, 1063 supra), the termination of either State’s participation in the Convention could vitiate consent. Art. 72 blocks this indirect way of withdrawing consent. It provides that the Convention’s denunciation by the host State or the investor’s home State shall not affect the rights and obligations 1691 These are Alcoa Minerals v Jamaica, Decision on Jurisdiction (6 July 1975); Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975); and Reynolds v Jamaica, Order on Discontinuance (12 October 1977). The Alcoa case is described by Schmidt (n 126). 1692 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 12. See also Schmidt (n 126) 93–94. 1693 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 14; Schmidt (n 126) 102. See also ICSID (n 173) 3. 1694 Schmidt (n 126) 94. 1695 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 23; Schmidt (n 126) 103. 1696 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 24. The cases were subsequently discontinued after agreed settlements.

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arising out of consent given before receipt of the notice of denunciation (see Art. 72, paras. 2, 9–16) Bolivia submitted a notice of denunciation on 2 May 2007. Ecuador submitted a notice of denunciation on 6 July 2009. Venezuela submitted a notice of denunciation on 24 January 2012. In Fábrica de Vidrios v Venezuela, the Claimants accepted the offer of consent to ICSID’s jurisdiction contained in a BIT on 20 July 2012, just under six months after Venezuela’s notice of denunciation. The Tribunal found that the investor’s acceptance of consent after the date of the denunciation was too late. The consent to be preserved by Art. 72 was not the offer of consent in the BIT, but mutual consent by the host State and the investor. The Tribunal reached this result with the help of the last sentence of Art. 25(1). The Tribunal said:

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The phrase ‘consent in writing to submit to the Centre’ is equivalent in meaning to an arbitration agreement and thus perfected consent. . . . Whilst the phrase ‘no party may withdraw its consent unilaterally’ relates to the possible conduct of one party only, the preceding phrase ‘[w]hen the parties have given their consent’ makes it clear that ‘consent’ in the final phrase is not directed to the idea of unilateral consent that arises where a Contracting State has given its consent to ICSID arbitration in an investment treaty or domestic legislation. In other words, it is not being used to describe the legal situation created by a unilateral engagement of a Contracting State to submit to ICSID arbitration (but before that engagement is relied upon by a national of another Contracting State). The last sentence of Article 25(1) simply means that where there is perfected consent, it cannot be undone by the conduct of one of the parties.1697

The same principle applies if a State party to the Convention excludes the application of the Convention to any territory for which it is responsible under Art. 70. In accordance with Art. 72, such a notice of exclusion will not affect any consent to jurisdiction given previously.

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c) Withdrawal of Designation or Approval in Respect of a Constituent Subdivision or Agency Valid consent to jurisdiction by a constituent subdivision or agency of the host State depends on two additional requirements: 1. The host State must have designated the constituent subdivision or agency to the Centre (see paras. 523–571 supra). 2. The host State must either have approved the consent given by its constituent subdivision or agency or notified the Centre that no such approval is required (see paras. 1446–1471 infra). Only after these conditions are met does the consent become effective and irrevocable. Once consent to the jurisdiction by a constituent subdivision or agency has become effective, it may not be vitiated by a repeal of the designation (see para. 571 supra) or by the withdrawal of the approval of consent (see para. 1469 infra).1698 Similar

1697 Fábrica de Vidrios v Venezuela, Award (13 November 2017) para 277. 1698 See, however, Amerasinghe (n 878) 237 and Amerasinghe (n 96) 190–191, who is of the opinion that the approval of the consent would become binding on the host State and therefore irrevocable only when one or both parties to the investment agreement have acted or changed their position in reliance on it. See also Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 111.

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considerations must apply, if the host State abolishes the constituent subdivision or agency for the purpose of defeating consent. This is not to say that every abolition or privatization of a constituent subdivision or agency would automatically lead to the host State assuming its rights and duties under an agreement on jurisdiction (see paras. 638–641 supra). But it follows from the prohibition of a unilateral withdrawal of consent that a host State may not nullify the consent given by one of its constituent subdivisions or agencies by removing or restructuring it.

d) Withdrawal of Investment Authorization 1078

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Consent to jurisdiction is sometimes limited to investments approved or authorized by the host State (see para. 963 supra). Consent would then become effective and irrevocable only after the approval or authorization of the investment by the host State. A subsequent revocation of the investment license might serve to withdraw consent to ICSID’s jurisdiction indirectly. In SPP v Egypt, jurisdiction was based on Art. 8 of Egypt’s Law No. 43 of 1974 (see paras. 790–792 supra). Art. 1 of that Law made the application of the jurisdictional clause conditional upon the approval of the project by the Egyptian authorities. Before the Tribunal, Egypt argued that any rights conferred upon the Claimants by Law No. 43 were extinguished when the approval of their project was withdrawn on 28 May 1978. This withdrawal took place before SPP(ME) had accepted the Centre’s jurisdiction in a letter of 15 August 1983.1699 The Tribunal examined the situation under Egyptian law and found that, under the prevailing circumstances, the withdrawal of the approval had exceeded the capacity of the acting authority and, therefore, had no juridical effect. The Tribunal added the following observations: If Law No. 43 contained an offer by Egypt to accept ICSID jurisdiction prior to cancellation of the Pyramids Oasis project, that offer did not terminate as a result of the withdrawal of the approval of the project. For cancellation of the project did not alter the fact that an investment had been made under Law 43. Accordingly, the Tribunal finds that Law No. 43 is applicable to the investment dispute in the present case.1700

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In the particular case, the attempted withdrawal of the investment authorization had taken place before the offer of consent contained in Law No. 43 was accepted by the investor. Therefore, consent had not yet become effective. Nevertheless, the Tribunal found that even the unilateral offer contained in Law No. 43 was not terminated by the cancelation of the project. However, it indicated that if Law No. 43 had been repealed before the Claimants had invoked ICSID’s jurisdiction, the offer would have lapsed. The Convention’s prohibition of unilateral withdrawal of consent means that acceptance of the offer by the investor would be an absolute bar to measures by the host State to defeat ICSID’s jurisdiction. Therefore, even if a valid investment authorization is a condition for obtaining the host State’s consent to jurisdiction, a subsequent withdrawal of the authorization cannot nullify consent after acceptance by the investor.

1699 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 64. 1700 ibid para 66.

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e) Repeal of National Legislation Providing for Consent A host State is free to change its investment legislation, including the provision concerning consent to ICSID’s jurisdiction. An offer of consent contained in national legislation (see paras. 780–824 supra) that has not been taken up by the investor will lapse when the legislation is repealed.1701 The situation is different if the investor has accepted the offer in writing, while the legislation was still in force. The consent agreed to by the parties then becomes insulated from the validity of the legislation containing the offer. It assumes a contractual existence that is independent of the legislative instrument that helped to bring it about. Therefore, repeal of investment legislation providing for ICSID’s jurisdiction will not have the effect of a withdrawal of consent if the investor has accepted the offer during the legislation’s lifetime. In Rumeli v Kazakhstan, the Respondent’s Foreign Investment Law (FIL) of 1994 contained an offer of ICSID jurisdiction. The Claimants made the relevant investments from 1998 to 2002. The FIL was repealed in 2003. The Claimants’ request for arbitration, containing their acceptance of the offer of arbitration, was registered in 2005. The Tribunal applied Art. 6(1) of the FIL, which granted investors protection against adverse changes in legislation for a period of ten years from the date they made their investment. Therefore, the offer of consent in the FIL remained applicable to the dispute.1702 The Tribunal said:

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334. Respondent has expressed its consent to ICSID arbitration on December 28, 1994, the date of the entry into force of the FIL, and it remains applicable to the dispute pursuant to Article 6(1). On the other hand, Claimants have consented to ICSID jurisdiction by filing their Request for Arbitration. The Arbitral Tribunal has therefore jurisdiction under the FIL. 335. Besides Article 6(1), it is also well established in international law that a State may not take away accrued rights of a foreign investor by domestic legislation abrogating the law granting these rights. This is an application of the principles of good faith, estoppel and venire factum proprium.1703

Caratube and Hourani v Kazakhstan dealt with the repeal of the same piece of legislation in 2003. The second Claimant had acquired shares in the first Claimant over a year after the FIL’s repeal. The Tribunal declined jurisdiction over the second Claimant’s claims, finding that he had never obtained any rights under the FIL. He could not by means of stabilization clauses revive the FIL as a basis of jurisdiction.1704

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f ) Termination of a Treaty Providing for Consent BITs and multilateral international instruments providing for consent to ICSID’s jurisdiction (see paras. 825–874 supra) are more difficult to terminate or amend than national legislation. However, a number of States have proceeded to terminate some or

1701 For an argument to the contrary, see Hirsch (n 951) 53–54. 1702 Rumeli v Kazakhstan, Award (29 July 2008) paras 165, 220–222, 308, 332–336. 1703 ibid paras 334, 335. But see the contrary decision in the non-ICSID case Ruby Roz v Kazakhstan (UNCITRAL), Award on Jurisdiction (1 August 2013) para 156. 1704 Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 689–696.

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all of their BITs.1705 The Member States of the EU are in the process of terminating the BITs among themselves.1706 In a number of cases, tribunals had to deal with the question whether offers of consent in intra-EU investment treaties had been repealed by subsequent treaties (see para. 1020 supra). Consent based on treaties is only perfected once it is accepted by the investor (see para. 850 supra). It is only after its acceptance by the investor that an offer of consent contained in a BIT or other international instrument becomes irrevocable and hence insulated from attempts by the host State to terminate the treaty or instrument.1707 In CSOB v Slovakia, the Tribunal found that the BIT had never entered into force despite the fact that it was published in Slovakia’s Official Gazette together with a notice announcing its entry into force (see para. 827 supra). After the institution of ICSID proceedings, Slovakia published a corrective notice in its Official Gazette asserting the BIT’s invalidity. The Tribunal said: In this connection, it should be noted that if the Notice were to be held to constitute a valid offer by the Slovak State to submit to international arbitration, the corrective notice published by the Slovak Ministry of Foreign Affairs in the Official Gazette on November 20, 1997, asserting the invalidity of the BIT, would be of no avail to Respondent, since Claimant accepted the offer in the Request for Arbitration filed prior to the publication of the corrective notice.1708

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Many BITs may be terminated subject to ‘sunset clauses.’ Under these clauses, the BIT will continue to apply for a certain period of time to investments made before its termination. The Italy–Romania BIT entered into force in 1995 and was terminated in 2010. It contained a sunset clause providing for its continued application for five years for investments made before its termination. In Gavazzi v Romania, the Request for Arbitration was received by ICSID on 2 August 2012. The Tribunal proceeded to exercise jurisdiction on the basis of the BIT without a discussion of its termination.1709 Respondent States as well as the European Commission have argued that, as a consequence of the Achmea judgment of the Court of Justice of the European Union1710 and of a Declaration of EU Member States on the legal consequences of that Judgment,1711 consent to arbitration under treaties with other EU Member States has become inapplicable. Claimants have argued that perfected consent was irrevocable 1705 Tania Voon, Andrew Mitchell and James Munro, ‘Parting Ways: The Impact of Mutual Termination of Investment Treaties on Investor Rights’ (2014) 29 ICSID Rev 451; James D Fry and Odysseas G Repousis, ‘Intertemporality and International Investment Arbitration: Protecting the Jurisdiction of Established Tribunals’ (2015) 31 Arb Int’l 213. 1706 See Agreement for the Termination of Bilateral Investment Treaties between the Member States of the European Union (signed 5 May 2020, entered into force 29 August 2020) [2020] OJ L 169/1. 1707 In Bosca v Lithuania (UNCITRAL), Award (17 May 2013) paras 179–181, the Tribunal rejected as incorrect the Respondent’s contention that the Parties had terminated the BIT. 1708 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 45. 1709 Gavazzi v Romania, Decision on Jurisdiction, Admissibility and Liability (21 April 2015). In fn 1, the Tribunal refers to the BIT’s termination and its ‘sunset provision’ in Art. 11(3). 1710 CJEU, Case C-284/16 Slovak Republic v Achmea BV (Judgment, 6 March 2018) ECLI:EU: C:2018:158. 1711 Declaration of the Representatives of the Governments of the Member States, of 15 January 2019 on the Legal Consequences of the Judgment of the Court of Justice in Achmea and on Investment Protection in the European Union, available at accessed 10 January 2021.

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under the ICSID Convention and not subject to withdrawal by way of a novel interpretation of EU law.1712 Tribunals have consistently rejected the ‘Achmea objection,’ inter alia, by relying on the impossibility of a unilateral withdrawal of consent under Art. 25(1). The Tribunal in Magyar Farming v Hungary said to this effect: 213. . . . the UK and Hungary have not terminated the BIT pursuant to the rules of Section 3 of the VCLT. Even if they had done so by virtue of the 2019 Declarations, however, the Claimants accepted the BIT’s offer to arbitrate prior to its purported termination. Pursuant to Article 25 of the ICSID Convention, ‘[w]hen the parties [i.e. the investor and the State] have given their consent, no party may withdraw its consent unilaterally.’ Indeed, it is common ground between the Parties that the relevant time for determining jurisdiction is the date of the initiation of the arbitration. 214. Thus, the consent to arbitrate, in the sense of a meeting of the minds, which is perfected by the investor’s acceptance of the State’s offer to arbitrate expressed in the BIT would not be retroactively invalidated by a subsequent termination of the BIT. In other words, even if the Tribunal were to regard the 2019 Declarations as an agreement to terminate the BIT, quod non, that agreement could not have invalidated the consent to arbitrate because it was entered after the consent was formed.1713

g) Invalidity or Termination of the Investment Agreement Containing Consent If an investment agreement between the host State and the investor containing a clause providing for ICSID’s jurisdiction is alleged to be invalid or has been terminated, it may be argued that the consent clause is also invalidated or ceases to operate. A party contending that the investment agreement is not in force may seek to deny the power of an ICSID commission or tribunal even to determine its own competence: if there is no legal basis for the Centre’s jurisdiction, no commission or tribunal may be constituted; if constituted it has no power to decide anything, including the question of jurisdiction. It is evident that the assertion that an investment agreement, including the ICSID clause contained therein, is void cannot be the end of the matter. A unilateral invocation of invalidity or termination of the investment agreement will not defeat the consent clause. Any other result would be contrary not only to the prohibition of unilateral withdrawal of consent, as contained in Art. 25(1), but also to the principle that the commission or tribunal shall be the judge of its own competence (Arts. 32 and 41). In other words, the commission or tribunal must have the power to decide on disputes concerning the alleged invalidity of investment agreements, even if the commission’s or tribunal’s very existence depends on the agreement’s validity (see Art. 41, paras. 6, 7). Despite some problems of formal logic, this is the only practical way to deal with attempts to defeat consent clauses in investment agreements by asserting their invalidity.

1712 UP and CD Holding v Hungary, Award (9 October 2018) paras 211, 221, 227–229; United Utilities v Estonia, Award (21 June 2019) para 492; InfraRed v Spain, Award (2 August 2019) para 227; OperaFund v Spain, Award (6 September 2019) paras 355, 367. 1713 Magyar Farming v Hungary, Award (13 November 2019) paras 213–214. See also Marfin and others v Cyprus, Award (26 July 2018) para 592; Eskosol v Italy, Decision on Termination Request and IntraEU Objection (7 May 2019) para 226; Addiko v Croatia, Decision on Jurisdiction (12 June 2020) paras 221–308; ESPF v Italy, Award (14 September 2020) paras 221–339; Raiffeisen Bank v Croatia, Decision on Jurisdiction (30 September 2020) paras 95–150.

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International arbitral practice has developed a general legal principle that supports this result. It is the doctrine of the severability or separability of the arbitration agreement. Under this doctrine, the agreement providing for arbitration assumes a separate existence, which is autonomous and legally independent of the agreement containing it.1714 The most important argument in favor of this doctrine is the assumption that the parties, in providing for the arbitration of disputes relating to the agreement, intended all disputes, including disputes about the agreement’s validity, to be resolved through arbitration.1715 Otherwise, a party could at any time defeat its obligation to arbitrate simply by declaring the agreement to be void or terminated. Therefore, the ‘intention of the parties and the requirements of effective arbitration combine to give rise to the concept of severability.’1716 This principle of severability of the arbitration agreement is supported by the weight of international arbitral codifications1717 and cases, as well as by national arbitral practice.1718 The Arbitration (Additional Facility) Rules (see paras. 12–19 supra) expressly provide for the separability of the arbitration agreement from the underlying contract. Their Art. 45(1) provides: The Tribunal shall have the power to rule on its competence. For the purposes of this Article, an agreement providing for arbitration under the Additional Facility shall be separable from the other terms of the contract in which it may have been included.

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In Millicom v Senegal, the Respondent had terminated the Concession containing the ICSID arbitration clause. The Tribunal rejected the contention that the Concession’s termination had extinguished the arbitration clause. It said: it is undisputed that an arbitration clause is autonomous and that the end of a contract in which it is incorporated does not eliminate its effects; on the contrary, the arbitration which is agreed to therein also covers the principle and effects of the end of the contract. To admit the contrary would amount to depriving it of an important part of its practical effect since it would suffice for a party to abandon a contract in order to escape from it. This reasoning must apply also to the Concession.1719

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Despite the weight of authority against a unilateral withdrawal of consent by way of asserting the invalidity of the underlying agreement, Delaume would recommend a clarification of this point in the agreement. He has suggested that no harm will be done, and something might be gained, by including a proviso in the consent clause that would specify its applicability to disputes arising ‘at any time during the duration of this

1714 For an extensive analysis, see Stephen M Schwebel, International Arbitration: Three Salient Problems (Grotius 1987) 1–60. See also Hirsch (n 951) 50–51; Jochen Langkeit, Staatenimmunität und Schiedsgerichtsbarkeit. Verzichtet ein Staat durch Unterzeichnung einer Schiedsgerichtsvereinbarung auf seine Immunität? (Recht und Wirtschaft 1989) 72–73. 1715 Schwebel (n 1714) 3. 1716 ibid 4. 1717 See ICC Arbitration Rules (2021) Art. 6(9); UNCITRAL Arbitration Rules (2013) Art. 23(1); UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Art. 16(1); Institut de Droit International (n 1041), Art. 3(a). 1718 Schwebel (n 1714) 24–59. 1719 Millicom v Senegal, Decision on Jurisdiction (16 July 2010) para 91. See also Duke Energy v Peru, Decision on Annulment (1 March 2011) paras 125–144.

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contract or thereafter.’1720 This formula addresses the problem of the agreement’s termination, but not the allegation of its nullity ab initio. To dispel any doubts as to the severability of the agreement to arbitrate and as to the intention of the parties in this regard, the consent clause may be further specified as applying not only to the construction, application, and effect of the agreement, but also to its validity.

h) Incapacity to Give Consent A special form of arguing the invalidity of an arbitration agreement is a State’s contention that, under its own law, it lacks the capacity to make such a submission.1721 If the rule providing for the incapacity to arbitrate is introduced after the consent has been given, it is clear that this unilateral measure by the State cannot affect its prior consent.1722 The situation is not so obvious, if the rule providing for incapacity was in force at the time of consent. Technically, this is not a withdrawal of consent since the State’s position is that consent was never validly given. But from the perspective of the investor, who has relied on the State’s undertaking to arbitrate, a subsequent claim of incapacity amounts to a withdrawal of consent (see also Art. 42, paras. 78, 79, 219–221). No problems are likely to arise with regard to constituent subdivisions and agencies under the Convention. The dual requirement of a designation to the Centre of any such entity possessing the authority to give consent (see paras. 523–571 supra) and of approval of consent (or notification to the Centre that no approval is required) (see paras. 1446–1471 infra) makes it unlikely that consent will be challenged on the ground of incapacity. But even the argument that an expression of consent by a State organ was defective under the State’s law, and is hence invalid, is unlikely to succeed. The State’s argument can take two forms: it may argue that its substantive law restricts or excludes its capacity to submit to arbitration. Such prohibitions are not uncommon.1723 Alternatively, it may argue that the commitment to arbitrate was not given by the right organ or in violation of prescribed procedures. In either case, there are weighty arguments to dismiss a plea of incapacity as vitiating a State’s consent. It is the primary duty of the Contracting State to ensure the observance of its own law. A State that has submitted to international arbitration may be estopped from arguing that it lacked the capacity to do so.1724 Alternatively, good faith requires that any incapacities or procedural requirements must be divulged to the other side. A party may not avail itself of its own violation of legal rules.1725 The weight of

1720 Delaume (n 120) 174. 1721 See Steingruber (n 1281) 35–40. 1722 Bernard Audit, ‘Transnational Arbitration and State Contracts: Findings and Prospects’ in Hague Academy of International Law Centre for Studies and Research in International Law and International Relations (ed), Transnational Arbitration and States Contracts/Arbitrage transnational et les contrats d’état (Martinus Nijhoff 1988) 77, 91–92. 1723 See Parra, ‘Principles’ (n 307) 447. 1724 See the non-ICSID cases Balkan Energy v Ghana (UNCITRAL), Interim Award (22 December 2010) paras 162–167; Bankswitch v Ghana (UNCITRAL), Award (11 April 2014) paras 11.71–11.97. 1725 Audit (n 1722) 92–96. See also IDI (n 1717) Art. 5.

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practice in international arbitration is squarely against allowing States to invoke their incapacity to arbitrate to the detriment of the other party.1726 In IBM v Ecuador, jurisdiction was based on the Ecuador–United States BIT. The Respondent argued that the dispute was incapable of being settled by arbitration since there was no constitutional or legal provision that empowered the Ecuadorean Government to do so.1727 The Tribunal rejected this argument and found that Ecuador was bound by its international obligations.1728 In Millicom v Senegal, the Respondent argued that the law of Senegal excluded the possibility for the State validly to enter into an arbitration clause concerning the subjectmatter of the Concession. The Tribunal flatly rejected the proposition that this vitiated the arbitration clause in the Concession. It found that it was firmly established in international arbitration that a State is prohibited from invoking its own domestic law in order to avoid arbitration and its capacity to enter into arbitration clauses. Such an attitude would violate the principles of good faith and of ‘international public policy.’1729

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The observations made above are predicated on the good faith or ‘legitimate ignorance’ of the non-State partner. If an investor is grossly negligent or fully aware of the host State’s incapacity or non-compliance with procedural requirements, it will not be able to rely on the consent clause. An appropriate standard might be gleaned by analogy from Art. 46 of the VCLT.1730 Therefore, it is wise to take legal advice as to the requirements for consent in the State concerned. As a general rule, it may be expected that the government minister in charge of economic matters has the authority to give consent to arbitration. But such an expression of consent may be subject to the approval of other organs of the State. An investor may reduce its risk drastically if it can obtain a written assurance, possibly in the agreement itself, which sets out the legal requirements for consent under the host State’s domestic law and declares that they have been met. This may be supplemented by a statement on the part of the investor that it will not be responsible for any irregularity.1731 Problems concerning the validity of consent can also arise on the investor’s side. A corporation may plead lack of authority on the part of a person representing it or nonobservance of proper corporate procedure. Therefore, it is advisable to obtain evidence 1726 See Audit (n 1722) 91–92; Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 105–107; Delaume (n 1687) 26; Langkeit (n 1714) 74 ff; Jan Paulsson, ‘May a State Invoke Its Internal Law to Repudiate Consent to Arbitration?’ (1986) 2 Arb Int’l 90. See esp Benteler v Belgian State, Award of Ad Hoc Tribunal (18 November 1983) (1984) 1 J Int’l Arb 184–190. 1727 IBM v Ecuador, Decision on Jurisdiction (22 December 2003) heading 2.5. 1728 ibid paras 71, 85. 1729 Millicom v Senegal, Decision on Jurisdiction (16 July 2010) para 103 (emphasis in the original). 1730 VCLT (n 804) Art. 46 reads: 1. A State may not invoke the fact that its consent to be bound by a treaty has been expressed in violation of a provision of its internal law regarding competence to conclude treaties as invalidating its consent unless that violation was manifest and concerned a rule of its internal law of fundamental importance. 2. A violation is manifest if it would be objectively evident to any State conducting itself in the matter in accordance with normal practice and in good faith. 1731 Audit (n 1722) 97.

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of authority from whoever purports to give consent to the jurisdiction of ICSID on behalf of the investor.1732

i) Conferral of Host State Nationality In the case of natural persons, the investor must not possess the host State’s nationality either at the time of consent or at the time a request for conciliation or arbitration is registered (Art. 25(2)(a)) (see paras. 1146–1160 infra). Therefore, acquisition of the host State’s nationality after the date of consent would destroy the basis for jurisdiction ratione personae. The prohibition of unilateral withdrawal of consent protects the investor from the jurisdictional consequences of an involuntary acquisition of host State nationality after the date of consent if the compulsory grant of nationality is designed to defeat jurisdiction or is otherwise contrary to international law. In the same vein, a host State cannot destroy an essential jurisdictional requirement by depriving a local company of its foreign control, as required by Art. 25(2)(b), through an act of expropriation (see para. 1438 infra).

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j) Denial of Benefits Some treaties contain so-called denial-of-benefits clauses. Under such a clause, a party to the treaty containing consent to arbitration may deny the benefits of the treaty to a corporate investor that is registered in a State party to the treaty, but has no substantial business connection to that State and is controlled by nationals of another State.1733 The denial-of-benefits clause does not operate automatically, but must be actively exercised. It gives the State an option to deny the treaty’s benefits to affected investors.1734 In the majority of cases, tribunals have held that the State must exercise its right under the denial-of-benefits clause prospectively and cannot invoke it once proceedings have been initiated.1735 But some tribunals have found that a State may raise a denial-ofbenefits clause in the course of proceedings as an objection to jurisdiction.1736 In the 1732 Institution Rule 2(1)(f ) states that a request for arbitration, made by a juridical person, must state that all internal action to authorize the request has been taken. The request must be supported by documentation to this effect. This rule refers not to the giving of consent but to the institution of proceedings. See also Delaume (n 120) 170. 1733 See eg ECT (n 33) Art. 17(1). ‘Each Contracting Party reserves the right to deny the advantages of this Part [of the ECT] to: (1) a legal entity if citizens or nationals of a third state own or control such entity and if that entity has no substantial business activities in the Area of the Contracting Party in which it is organized.’ 1734 See Stephen Jagusch and Anthony Sinclair, ‘Denial of Advantages under Article 17(1)’ in Graham Coop and Clarisse Ribeiro (eds), Investment Protection and the Energy Charter Treaty (Juris 2008) 17; Elvira Gadelshina, ‘Burden of Proof under the “Denial-of-Benefits” Clause of the Energy Charter Treaty: Actori Incumbit Onus Probandi?’ (2012) 29 J Int’l Arb 269; Lindsay Gastrell and Paul-Jean Le Cannu, ‘Procedural Requirements of “Denial-of-Benefits” Clauses in Investment Treaties: A Review of Arbitral Decisions’ (2015) 30 ICSID Rev 78; Anne K Hoffmann, ‘Denial of Benefits’ in Bungenberg and others (n 18) 598; Mark Feldman, ‘Denial of Benefits after Plama v Bulgaria’ in Kinnear and others (n 255) 463. 1735 Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 153–165; Liman Caspian Oil v Kazakhstan, Award (22 June 2010) paras 225–227, 249, 254; Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) paras 164–173; Masdar v Spain, Award (16 May 2018) paras 232–236; NextEra v Spain, Decision on Jurisdiction, Liability and Quantum Principles (12 March 2019) paras 262–271. 1736 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 4.83–4.92; Gran Colombia Gold v Colombia, Decision on Jurisdiction (23 November 2020) para 130. See also the non-ICSID cases

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latter case, the State would be permitted to withdraw its consent to arbitration after it has been accepted by the investor.1737 The Tribunal in Pac Rim v El Salvador was unimpressed by the argument that allowing a respondent State to rely on a denial-of-benefits clause in the course of proceedings would run counter to the irrevocability of consent under Art. 52(1) of the ICSID Convention. It found that the Respondent’s consent was qualified from the outset by the denial-of-benefits clause and concluded: Accordingly, a CAFTA Party’s denial of benefits invoked after the commencement of an ICSID arbitration cannot be treated as the unilateral withdrawal of that Party’s consent to ICSID arbitration under ICSID Article 25(1).1738

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In Ampal-American v Egypt, the Tribunal took a different position. The Tribunal rejected Egypt’s argument that it had not withdrawn consent, but had exercised a right reserved as part of the consent, and said: 168. Article 25(1) of the ICSID Convention is very clear. The jurisdiction of the Centre is to be assessed at the time that jurisdiction is invoked, which is when the investor’s Request for Arbitration is registered by the Centre. When jurisdiction has crystallized, ‘no Party may withdraw its consent unilaterally,’ says plainly Article 25(1). 169. As the Egypt–United States Treaty and its Protocol must be read in the light of the ICSID Convention, the Tribunal finds that there cannot be an embedded conditionality in the Treaty which could be triggered after the submission of the dispute to arbitration.1739

K. ‘(2) “National of another Contracting State” means:’ 1111

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Art. 25(2) undertakes to give a definition of the words ‘national of another Contracting State’ contained in Art. 25(1). However, Art. 25(2) does not provide an exhaustive definition of the concept of nationality. Instead, Art. 25(2) merely offers some clarifications on eligible and non-eligible nationalities at certain dates for the purposes of access to the jurisdiction of the Centre. The investor’s party status in ICSID proceedings is subject to a positive and to a negative nationality requirement. The investor must possess the nationality of a Contracting State. Therefore, investors who only have the nationality of a nonContracting State are excluded (see paras. 599–601 supra). On the other hand, the investor must not, in principle, be a national of the host State. Therefore, nationals of the host State are also excluded, subject to an important exception for certain juridical persons, contained in Art. 25(2)(b). Art. 25(2) distinguishes between natural persons or individuals, on the one side, and juridical persons, such as corporations, on the other. The rule on nationality for natural persons is stricter than for juridical persons. For natural persons the nationality requirement must be met at two distinct dates. For juridical persons it exists only with regard to

Ulysseas v Ecuador (UNCITRAL), Interim Award (28 September 2010) paras 172–174; Guaracachi v Bolivia (UNCITRAL), Award (31 January 2014) paras 366–384. 1737 Antonio R Parra, ICSID: An Introduction to the Convention and Centre (OUP 2020) 44–47. 1738 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 4.90. 1739 Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) paras 168–169.

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one date. For natural persons, possession of the host State’s nationality is an absolute bar to becoming a party to ICSID proceedings. For juridical persons an exception is possible. Much of the debate during the preparatory works on the investor’s nationality turned on the question of whether it was necessary to set out objective requirements. Mr. Broches, in particular, emphasized the optional character of ICSID’s jurisdiction, and pointed out that it was up to the host State to decide whom it wished to regard as a foreign investor (History, Vol. II, pp. 256, 284, 287, 360, 397, 450, 539, 540, 580, 581–582). Nevertheless, the view prevailed that the Convention should contain objective criteria also in this respect (see para. 6 supra). A consensual element was preserved in the second clause of Art. 25(2)(b) in relation to a juridical person possessing the nationality of the host State. But even an agreement to treat such a juridical person as a national of another Contracting State is subject to the objective requirement that it must be under foreign control (see paras. 1327–1347 infra). Therefore, the existence of a consent agreement between a host State and an investor cannot be taken as an automatic recognition that the investor has met the Convention’s nationality requirements. This holds true also for the satisfaction of the nationality conditions to qualify for protection under investment protection treaties. The nationality requirements are part of the Convention’s objective criteria that must be ascertained in addition to the existence of consent.

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L. ‘(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute;’ The nationality of individual investors received considerable attention in the deliberations surrounding the Convention’s drafting. In actual practice, most cases that have reached ICSID have involved juridical persons. Still, as of 31 December 2020, at least seventy ICSID and Additional Facility cases, past and present, have involved investors who were natural persons.1740

1740 These include Pharaon v Tunisia, Order on Discontinuance (21 November 1988) (settled); Gruslin v Malaysia I, Order on Discontinuance (24 April 1996) (settled); Goetz v Burundi, Award (10 February 1999); Azinian v Mexico (AF), Award (1 November 1999); Lemire v Ukraine (AF), Award (18 September 2000); Maffezini v Spain, Award (13 November 2000); Gruslin v Malaysia II, Award (27 November 2000); Feldman v Mexico (AF), Decision on Jurisdiction (6 December 2000) and Award (16 December 2002); Genin v Estonia, Award (25 June 2001); Olguín v Paraguay, Award (26 July 2001); Loewen v United States (AF), Award (26 June 2003) and ibid, Decision on Supplementation (13 September 2004); Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003); Mitchell v DR Congo, Award (9 February 2004); Soufraki v UAE, Award (7 July 2004) and ibid, Decision on Annulment (5 June 2007); Siag v Egypt, Decision on Jurisdiction (11 April 2007); Kardassopoulos v Georgia, Decision on Jurisdiction (6 June 2007); Ahmonseto v Egypt, Award (18 June 2007); Pey Casado v Chile, Resubmitted Case: Decision on Annulment (8 January 2020); Funnekotter and others v Zimbabwe, Award (22 April 2009); Kardassopoulos v Georgia, Award (3 March 2010); Anderson and others v Costa Rica (AF), Award (19 May 2010); Foresti and others v South Africa (AF), Award (4 August 2010); Lemire v Ukraine, Award (28 March 2011); Unglaube v Costa Rica, Award (16 May 2012); Rizvi v Indonesia, Award (16 July 2013); Micula v Romania I,

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1. Determination of Nationality a) Applicable Law 1117

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During the Convention’s preparatory work, it was generally acknowledged that nationality would be determined by reference to the law of the State whose nationality is claimed, subject, where appropriate, to the applicable rules of international law (History, Vol. II, pp. 67, 286, 321, 448, 580, 705, 839).1741 In particular, it was pointed out that the commission or tribunal would have to deal appropriately with cases where a host State imposed its nationality upon an investor1742 (ibid., pp. 582, 658, 705, 868, 874, 876–877) (see also para. 1160 infra). Whether a person is a national of a particular State is determined, in the first place, by the law of the State whose nationality is claimed.1743 Indeed, in determining whether the individual holds a particular nationality, ICSID tribunals and conciliation commissions are entitled, and may be required, to apply that law.1744 Art. 42, which otherwise determines the law applicable to the dispute, does not determine the law applicable for purposes of determining nationality (see Art. 42, paras. 16, 17).1745 Questions of nationality will fall to be examined under Art. 25, in the context of a tribunal’s jurisdictional inquiry, rather than Art. 42, which applies to the merits of the dispute.1746 An international tribunal is not bound, however, by the national law in question under all circumstances, as held in the landmark Nottebohm case (see para. 1122 infra).1747 In the context of determining nationality for the purposes of the ICSID Convention, national law on nationality need not be followed, for example, in situations of involuntary acquisition of nationality that is in violation of international law, or cases of

1741 1742 1743 1744

1745 1746 1747

Award (11 December 2013); Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014); Levy and Gremcitel v Peru, Award (9 January 2015); von Pezold and others v Zimbambwe, Award (28 July 2015); Al Tamimi v Oman, Award (3 November 2015); Dogan v Turkmenistan, Decision on Annulment (15 January 2016); Abaclat and others v Argentina, Consent Award (29 December 2016); Kim and others v Uzbekistan, Award (8 March 2017); Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020); Luis García Armas v Venezuela (AF), Decision on Jurisdiction (24 July 2020). See also Aron Broches, ‘A Guide for Users of the ICSID Convention’ (1991) 8(1) News from ICSID 5; Anthony Sinclair, ‘Nationality of Individual Investors in ICSID Arbitration’ (2004) 7(6) Int’l Arb LR 191. See also AES v Argentina, Decision on Jurisdiction (26 April 2005) para 79. This passage contained in the First Edition of this Commentary was endorsed in Pey Casado v Chile, Award (8 May 2008) para 320. See ILC, ‘Draft Articles on Diplomatic Protection with Commentaries’ [2006] 2(2) YBILC 26, Art. 4, note (6). See eg Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) 11; Soufraki v UAE, Award (7 July 2004) paras 55, 81 (upheld by the ad hoc Committee, Decision on Annulment (5 June 2007) para 60); Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 152, 171, 172, 193; Pey Casado v Chile, Award (8 May 2008) paras 275–323; Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 86; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 285, 407; Arif v Moldova, Award (8 April 2013) paras 354–357. See Art. 42(1) ICSID Convention. See CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 88; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 57. Nottebohm (Liechtenstein v Guatemala) (Second Phase) [1955] ICJ Rep 4, 23. See also Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 145; Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 91; Arif v Moldova, Award (8 April 2013) para 357.

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withdrawal of nationality that are contrary to international law.1748 A further category may be nationality obtained on the basis of fraud or mistake.1749 In Soufraki v UAE, the Tribunal explained that:

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It is accepted in international law that nationality is within the domestic jurisdiction of the State, which settles, by its own legislation, the rules relating to the acquisition (and loss) of its nationality. Article 1(3) of the BIT reflects this rule. But it is no less accepted that when, in international arbitral or judicial proceedings, the nationality of a person is challenged, the international tribunal is competent to pass upon that challenge. It will accord great weight to the nationality law of the State in question and to the interpretation and application of that law by its authorities. But it will in the end decide for itself whether, on the facts and law before it, the person whose nationality is at issue was or was not a national of the State in question and when, and what follows from that finding. Where, as in the instant case, the jurisdiction of an international tribunal turns on an issue of nationality, the international tribunal is empowered, indeed bound, to decide that issue.1750

Mr. Soufraki sought to annul the Award in part because the Tribunal was required to apply Italian law, not merely to give it ‘great weight.’ The ad hoc Committee dismissed this complaint, explaining that whatever ambiguity may have existed in the Award, it was clear ‘that the Tribunal did in reality apply Italian law.’1751 The Committee explained that the Tribunal’s statement should more properly be that the Tribunal ‘will apply the nationality law of the State in question and accord great weight to the interpretation and application of that law by its authorities.’1752 The case did not turn on any decision of the Italian courts, but in other cases it would be incumbent upon Tribunals to apply decisions of higher judicial bodies. The Committee stated that ‘when applying national law, an international tribunal must strive to apply the legal provisions as interpreted by the competent judicial authorities and as informed by the State’s “interpretative authorities.”’1753 International legal practice on questions of nationality has developed primarily in the context of the law of diplomatic protection. Some tribunals and commentators have suggested that the legal principles developed in that context need not be followed for purposes of determining a natural person’s ‘nationality’ under Art. 25(2)(a). The function of nationality for diplomatic protection is said to be different from its function for bringing the private party within the jurisdictional pale of the Centre.1754 In Olguín v Paraguay, the Tribunal explained obiter that: [I]nternal rules of this nature, pertaining to the grant of diplomatic protection to individuals, and therefore, to something that under international law is a prerogative of the mother country, could not, by analogy, be applied to the case of access to the ICSID forum, one of whose most important and unique objectives is to effectively give 1748 1749 1750 1751 1752 1753

Jennings and Watts (n 1013) 852–856. Soufraki v UAE, Decision on Annulment (5 June 2007) para 71. See also Amerasinghe (n 878) 249. Soufraki v UAE, Award (7 July 2004) para 55. ibid, Decision on Annulment (5 June 2007) para 93 (emphasis in the original). ibid. ibid para 96 (citing Case Concerning the Payment of Various Serbian Loans Issued in France (France v Kingdom of the Serbs, Croats, and Slovenes) [1929] PCIJ Rep Series A No 20, 36). 1754 Amerasinghe (n 96) 198–203. See also Hirsch (n 951) 76–77.

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schreuer’s commentary on the icsid convention the individual the right of action, excluding the mother country’s endorsement of his claim or any other initiatives from the mother country, the only requirement being that it be a party to the 1965 Convention and the relevant BIT.1755

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Nevertheless, arguments have been frequently advanced that national law definitions of nationality should give way to international law concepts, for the purposes of Art. 25(2)(a), in particular the notion of a ‘dominant and effective’ nationality. Parties have argued repeatedly that nationality provisions of national law may be disregarded in cases of ineffective nationality lacking a genuine link between the State and the individual.1756 Such arguments have been based on the findings of the ICJ in the landmark Nottebohm case. In that case, the Court held that, even though the individual in respect of whom Liechtenstein was advancing its claim, Friedrich Nottebohm, had acquired Liechtenstein nationality by naturalization in accordance with Liechtenstein’s domestic law, this nationality could not be opposed to other States on the plane of international law. This was so because Nottebohm, formerly a German national, had acquired Liechtenstein nationality only ‘to enable him to substitute for his status as a national of a belligerent State that of the subject of a neutral State.’1757 The acquisition of nationality was not based on a genuine link between the State and the individual, and the Court dismissed Liechtenstein’s claim as Nottebohm could not be considered its national for the purposes of international law. However, there is no published decision upholding this doctrine in the ICSID context.1758 Tribunals have rejected the existence of an ‘effective nationality’ test, while, at the same time, not ruling out the possibility of such a test needing to be applied in exceptional circumstances.1759 In Micula v Romania I, the Respondent argued that the Claimants’ Swedish nationality was not ‘opposable’ to Romania in view of their ‘genuine connection’ with Romania and lack of effective ties with Sweden.1760 The Tribunal noted that the Claimants had only one nationality, namely that of Sweden. It found that there is a clear reluctance in international law to apply the test of a genuine or effective link where only a single nationality is at issue, and that there is in any event little support for that test in ICSID proceedings. The Tribunal held that the Nottebohm case does not allow

1755 Olguín v Paraguay, Award (26 July 2001) para 62 (unofficial translation). 1756 See Nottebohm (Liechtenstein v Guatemala) (Second Phase) [1955] ICJ Rep 4, 23, in which the ICJ ruled: ‘. . . is a legal bond having as its basis a social fact of attachment, a genuine connection of existence, interests and sentiments, together with the existence of reciprocal rights and duties.’ 1757 ibid 26. 1758 ICSID tribunals have refused to apply an ‘effective nationality’ test in Olguín v Paraguay, Decision on Jurisdiction (8 August 2000) para 18 and Award (26 July 2001) paras 60–62; Soufraki v UAE, Award (7 July 2004) paras 42–46; Pey Casado v Chile, Award (8 May 2008) para 241; Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 100; Saba Fakes v Turkey, Award (14 July 2010) para 63; Arif v Moldova, Award (8 April 2013) para 359. In respect of the similar argument in the context of dual nationals, one of which nationalities is the nationality of the host State, it is also clear that the test of ‘real and effective’ nationality cannot apply in order to avoid the consequences of Art. 25(2)(a); see Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) 16; Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 198. 1759 Saba Fakes v Turkey, Award (14 July 2010) para 77. The Tribunal mentioned that such circumstances could be the acquisition of a nationality of convenience ‘in exceptional circumstances of speed and accommodation’ or a nationality passed down over generations with the third or fourth foreign-born generation having no ties with the country at issue. 1760 Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 89.

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disregarding an individual’s single nationality, duly recognized under national law, on the basis that the individual has not resided in the country of his nationality for a period of time.1761 Arguments around whether there is a rule of ‘effective’ nationality in the ICSID context frequently arise in cases involving dual nationals. In this regard, Art. 25(2)(a) contains an absolute prohibition against claims by claimants having the nationality of the host State, which excludes the application of this argument in any event. This is confirmed by Saba Fakes v Turkey,1762 for instance, in which the Tribunal held that:

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The explicit exclusion from the Centre’s jurisdiction of dual nationals who hold the nationality of the host State is the only jurisdictional bar relating to a natural person’s nationality that was contemplated by the drafters of the Convention. It is significant, in the Tribunal’s opinion, that this bar is not subject to the test of the effectiveness of the host State’s nationality. Indeed, the Contracting Parties have avoided any reference to the effectiveness of an investor’s nationality for the purposes of Article 25 of the ICSID Convention.1763

In this case, the Claimant, Mr. Saba Fakes, was a dual Dutch and Jordanian national. The Respondent, Turkey, disputed the effectiveness of Mr. Fakes’ Dutch nationality, and therefore his standing under the Netherlands–Turkey BIT, arguing that the Claimant’s nationality ought to satisfy the effective nationality test as set forth in the Nottebohm case.1764 The Tribunal disagreed, holding that the Convention ‘did not exclude claims of dual nationals per se,’ provided ‘such dual nationals (i) hold the nationality of at least one Contracting State and (ii) do not hold the nationality of the host State.’1765 Moreover, the Tribunal held that in the case of dual nationals ‘the ICSID drafters did not subject their access to ICSID jurisdiction to the effective nationality test.’1766 When rejecting Turkey’s argument, the Tribunal noted the following: First, while the Nottebohm case set forth a requirement of a ‘genuine link’ with the State of nationality, that requirement was applied in the context of diplomatic protection of nationals by way of claims filed by the State whose nationality they hold. The issue in that case was not one of dual nationality and its consequences, if any, on an individual’s right to bring a direct claim against a third State, but whether a State could exercise diplomatic protection on behalf of an individual who had no ‘genuine link’ with that State. . . . The present Tribunal observes that . . . the ICSID Convention contains an express exclusion of claims by dual nationals when one of the nationalities is that of the host State regardless of whether those nationalities are effective. . . . The language of Article 25(2)(a) of the ICSID Convention is clear and does not require any further clarification. Pursuant to the generally accepted rules of treaty interpretation, as codified in Article 31 of the Vienna Convention on the Law of Treaties, the Tribunal is precluded from elaborating any interpretation that would run counter to this clear language, in particular any interpretation that would result in establishing additional limitations to the Centre’s jurisdiction where no such limitations were provided by the Contracting Parties.1767

1761 1763 1765 1767

ibid paras 98–103. ibid para 61. ibid para 62. ibid paras 68–76 (emphases in the original).

1762 Saba Fakes v Turkey, Award (14 July 2010). 1764 ibid para 66. 1766 ibid para 63.

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If there is an agreement on nationality between the parties, a commission or tribunal may be expected to be more flexible in the application of the traditional standards. Such an agreement would create a strong presumption in favor of the existence of the agreed nationality (see paras. 1138–1140 infra).

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The Working Paper for the Convention foresaw a complicated preliminary procedure to determine the nationality of the non-State party (History, Vol. I, p. 120). The subsequent Preliminary Draft provided for ‘a written affirmation of nationality signed by or on behalf of the Minister of Foreign Affairs of the State whose nationality is claimed.’ The affirmation was to be accepted as ‘conclusive proof’ (ibid., p. 122). This procedure received only scant support (History, Vol. II, p. 295) and ran into overwhelming opposition (ibid., p. 582).1768 In particular, there were doubts as to whether the Minister of Foreign Affairs would be the appropriate authority to issue such a certificate (ibid., pp. 259, 323, 325, 396, 397, 400, 503, 507–508, 538). There were also concerns that this procedure might lead to nationalities of convenience (ibid., p. 323) or that an investor might be unable to obtain the required certificate (ibid., p. 539). There was broad consensus that any certificate should not be treated as conclusive proof but only as prima facie evidence (ibid., pp. 256, 394–395, 504, 508, 543, 582). The procedure for the certification of nationality was dropped from subsequent drafts and does not appear in the Convention. Therefore, the decision as to whether the investor meets the Convention’s nationality requirements is incumbent upon the commission or tribunal in the same way as with the other objective requirements for ICSID’s jurisdiction. A certificate of nationality will be treated as part of the ‘documents or other evidence’ to be examined by the tribunal in accordance with Art. 43. Such a certificate will be given its appropriate weight but does not preclude a decision at variance with its contents.1769 In Soufraki v UAE, the Claimant relied on the Italy–UAE BIT. The UAE challenged his assertion that he qualified as an Italian national under the BIT, on grounds that his dominant or effective nationality was not Italian. In the course of the jurisdiction proceedings, Mr. Soufraki disclosed facts that led the Tribunal to conclude that he had automatically lost his Italian nationality by operation of the applicable Italian law when, in 1991, he voluntarily acquired Canadian citizenship.1770 The issue of genuine and effective nationality was therefore superfluous and the question became whether Mr. Soufraki had ever reacquired Italian nationality. The facts as found by the Tribunal led it to conclude that at no point after 1991 had Soufraki taken steps to reacquire Italian nationality as provided for by Italian law.1771

1768 Amerasinghe (n 96) 198–199. 1769 In Soufraki, both the Tribunal and the ad hoc Committee endorsed this passage from the First Edition of this Commentary; see Soufraki v UAE, Award (7 July 2004) para 63 and Decision on Annulment (5 June 2007) para 74. See also Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 151; CEAC v Montenegro, Award (26 July 2016) para 155; Kim and others v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 209–212. 1770 Soufraki v UAE, Award (7 July 2004) paras 66–68. 1771 ibid para 81.

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Mr. Soufraki nevertheless insisted that Italian officials continued to treat him as Italian. In support of his claim, Mr. Soufraki produced two Italian passports, five certificates of Italian nationality (three of which pre-dated the acquisition of Canadian nationality) and a letter from the Italian Ministry of Foreign Affairs.1772 The UAE disputed the relevance and reliability of the certificates and the letter. Relying on the principle in Art. 41 that an ICSID tribunal is ‘the judge of its own competence,’ the Tribunal held that it was entitled to look behind the official Italian documentation and investigate matters in order to satisfy itself of its jurisdiction (see para. 1119 supra). The Tribunal agreed with the UAE that the passports and certificates were not reliable for ICSID’s jurisdictional purposes, since they had been issued by Italian authorities who were not apprised of the relevant details by which they could have determined that Soufraki was no longer an Italian national, applying their own law. The key details were the date and fact of his acquisition of Canadian nationality. The Tribunal issued an award declining jurisdiction. Mr. Soufraki applied for the annulment of the Award arguing, inter alia, that the Tribunal exceeded its powers by not accepting the certificates of nationality at face value as determinative of the question of his nationality. Mr. Soufraki argued that an ICSID tribunal’s power to scrutinize official certificates was limited only to cases of alleged fraud. The UAE argued that inquiry was also called for where there was evidence of error or mistake.1773 The ad hoc Committee agreed with the UAE. The Committee insisted that the power of ICSID tribunals to scrutinize certificates of nationality or passports is ‘well established’ in international law generally.1774 The Committee did observe that ‘[i]t is only in exceptional cases – like the case under scrutiny – that ICSID tribunals have to review nationality documentation issued by state officials.’1775 The ad hoc Committee rejected the application for annulment. It held that in the particular circumstances the Tribunal did not commit any error, much less one justifying annulment, in ‘not considering the national documentation on nationality as conclusive and in ascertaining on its own the nationality of the Claimant.’1776 The ad hoc Committee said:

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[T]he principle is in fact well established that international tribunals are empowered to determine whether a party has the alleged nationality in order to ascertain their own jurisdiction, and are not bound by national certificates of nationality or passports or other documentation in making that determination and ascertainment.1777

The Tribunal in Pey Casado v Chile endorsed the approach of the Soufraki v UAE Tribunal in agreeing that it was for the Tribunal itself to decide, applying Chilean law, 1772 ibid para 14. 1773 Soufraki v UAE, Decision on Annulment (5 June 2007) paras 49, 70, 71. 1774 ibid para 64. See also Crisanto Medina & Sons v Costa Rica, Decision of the Umpire (31 December 1862) (2011) XXIX UNRIAA 75; Flutie Cases (United States v Venezuela) (1904) (1960) IX UNRIAA 148; Flegenheimer Case (United States v Italy) (1958) (1965) XIV UNRIAA 327, (1963) 25 ILR 91; Durward Sandifer, Evidence before International Tribunals (Virginia UP 1975) 222–223; Jennings and Watts (n 1013) 855. 1775 Soufraki v UAE, Decision on Annulment (5 June 2007) para 28. 1776 ibid paras 75–76, 132, 134. 1777 ibid para 64.

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whether Mr. Pey Casado remained a Chilean national or had validly renounced this nationality (see para. 1159 infra).1778 In Micula v Romania I, the Tribunal intimated that it would not recognize a nationality obtained ‘by fraud or material error’ on grounds that such nationality would have been obtained ‘in a manner inconsistent with international law.’1779 The Tribunal assessed the available evidence to establish whether the Claimants had acquired their nationality in accordance with Swedish law,1780 as well as their formal documentation, which it found to be prima facie satisfactory,1781 and concluded that the Respondent had not met its burden to establish grounds for the Tribunal to question the Claimants’ nationality.1782 In doing so, the Tribunal considered that State authorities have a ‘margin of appreciation’ in deciding upon the factors that they consider necessary for the grant of nationality.1783 The Tribunal in Arif v Moldova followed the approach in Micula I.1784 It held that, as there was no proof that the Claimant’s French nationality was obtained fraudulently, or resulted from a material error by the French authorities, it would not ‘exercise control over the French authorities’ decision to grant French nationality to Mr. Arif.’1785

c) Agreement on Nationality 1138

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The Model Clauses published by the Centre suggest an express clarification of the investor’s nationality in an agreement between the host State and the investor (see para. 606 supra). A stipulation concerning the investor’s nationality in an investment agreement is not necessary but useful. It may forestall a dispute at a later stage. At the same time, an agreement of this kind cannot create a nationality that does not exist. If under the law of the State in question and on the facts the investor does not have the alleged nationality, the agreement will be of no avail. But an agreement on nationality will create a strong presumption in favor of the existence of the stipulated nationality. This would be otherwise if there was deception on the part of the investor as to its true nationality.1786 Model Clause 6 (see para. 606 supra) suggests that the investor’s State of nationality be named in an agreement on nationality. A mere stipulation that the Convention’s nationality requirements have been met is possible, but would not have the same value (see paras. 602–609 supra). BITs usually refer to the nationals of the respective States Parties. Subject to small variations, nationals are defined by reference to the Parties’ domestic laws on citizenship.1787 An extension of treaty rights to permanent residents, which is found in some investment treaties,1788 cannot extend ICSID’s jurisdiction beyond nationals of Contracting States to the ICSID Convention. But the exclusion of foreign investors 1778 1779 1780 1782 1784 1785 1787 1788

Pey Casado v Chile, Award (8 May 2008) paras 319, 320. Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 91–97. ibid para 93. 1781 ibid para 94. ibid para 96. 1783 ibid para 94. Arif v Moldova, Award (8 April 2013) paras 354–357. ibid para 357. 1786 Amerasinghe (n 96) 204. Dolzer and Stevens (n 331) 31–33. See eg ECT (n 33) Art. 1(7)(a)(i); NAFTA (n 32) Arts. 201, 1111. On the latter, see also Feldman v Mexico (AF), Decision on Jurisdiction (6 December 2000) paras 24–38 and Award (16 December 2002) para 48.

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who are permanent residents in the host States1789 would make an ICSID consent clause inapplicable to such investors.

2. Nationality of a Contracting State The investor must have the nationality of a Contracting State. Therefore, an investor who only has the nationality of a non-Contracting State is excluded (see para. 600 supra). Stateless persons are also barred from access to the Centre.1790 There was considerable debate during the Convention’s preparation on the question of dual or multiple nationality. No particular problem arises if an investor has the nationality of more than one Contracting State. The possession of the nationality of a non-Contracting State in addition to that of a Contracting State would not be a bar to becoming a party to ICSID proceedings.1791 The Preliminary Draft specifically provided that a national of a Contracting State ‘may possess concurrently the nationality of a State not party to this Convention’ (History, Vol. I, p. 122; Vol. II, p. 170). Although the provision does not appear in later drafts, no concern was expressed about situations of this kind1792 (see Art. 27, paras. 14, 15). If the nationality of the non-Contracting State is the effective nationality and the nationality of the Contracting State is merely one of convenience, the host State may wish to attempt to challenge the investor’s standing. But it will be estopped from doing so if it has recognized the nationality of the Contracting State in full awareness of the facts (see also para. 1138 supra). If the investor has the nationality of the host State, Art. 25(2)(a) presents an absolute bar to jurisdiction. In such a situation there is no room for an argument based on effective nationality1793 (see paras. 1146–1160 infra). A host State that does not insist on the effectiveness of the nationality of the Contracting State may be faced with a diplomatic claim by the non-Contracting State. Art. 27(1) of the Convention prohibits diplomatic protection in respect of claims that the parties have consented to submit to arbitration. But this prohibition would not apply to a non-Contracting State1794 (see Art. 27, paras. 14–16). In cases of State succession, questions may arise as to whether a natural person remains or has become a national of a Contracting State. Depending on the type of State succession at issue, if the successor State already is, or becomes, an ICSID Contracting State before the critical date, the issue should not present difficulties (see paras. 622–634 supra).

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3. No Nationality of the Host State The Convention states categorically that the individual investor, to be eligible for party status, must not be a national of the host State. Thus, even persons who possess

1789 See eg Protocol of Colonia (n 335) Arts. 1(2), 9. 1790 Hirsch (n 951) 77; Kovar (n 155) 40; Kathigamar VSK Nathan, The ICSID Convention (Juris Pub 2000) 84. 1791 Olguín v Paraguay, Award (26 July 2001) paras 60–62. 1792 Broches (n 159) 357. 1793 Saba Fakes v Turkey, Award (14 July 2010) para 62. 1794 Amerasinghe (n 96) 206.

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the nationality of another Contracting State are excluded if they possess the host State’s nationality concurrently. This principle was not contained in the early drafts of the Convention. In fact, the Preliminary Draft provided exactly the opposite by stating that the national of the other Contracting State ‘may possess concurrently the nationality . . . of the State party to the dispute’ (History, Vol. I, p. 122; Vol. II, pp. 170, 171). This idea received only qualified support (History, Vol. II, pp. 259, 445, 538, 540) and ran into overwhelming opposition (ibid., pp. 256, 258, 260, 285, 325). Mr. Broches emphasized that this was merely designed to allow a host State to regard the dual national as a foreign investor, if it wished to do so (ibid., pp. 257, 284, 324, 359, 395, 398, 445, 580). But there was a widespread opinion that it was unrealistic to expect a State to submit to an international jurisdiction with respect to its own national (ibid., pp. 325, 394, 396–398, 445, 581). The provision was deleted and the First Draft was silent on the dual nationality of individual investors (History, Vol. I, p. 124). The debate on dual nationality continued and the idea to exclude dual nationals, if one of the nationalities was that of the host State, gained strength (History, Vol. II, pp. 707–708, 709, 840, 869, 877). Suggestions to admit dual nationals, if the host State’s nationality was not effective (ibid., pp. 400, 708), or if the host State had recognized the foreign nationality specifically (ibid., pp. 708, 868, 878–879) failed. Eventually, a proposal was adopted unanimously to exclude dual nationals explicitly, if one of their nationalities was that of the host State (ibid., pp. 868, 874, 876, 878, 880–881, 937).1795 The Report of the Executive Directors explains the provision on dual nationality in the following terms: 29. It should be noted that under clause (a) of Article 25(2) a natural person who was a national of the State party to the dispute would not be eligible to be a party in proceedings under the auspices of the Centre, even if at the same time he had the nationality of another State. This ineligibility is absolute and cannot be cured even if the State party to the dispute had given its consent.1796

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The ineligibility of an investor who also possesses the host State’s nationality applies irrespective of which of the several nationalities is the effective one.1797 This disqualification may not even be cured by agreement between the parties. This bar would also apply if consent is based on a treaty. If an investor possesses the nationalities of both States parties to a BIT, he or she may enjoy the benefits of the BIT for other purposes. But the dual national would be disqualified from invoking the ICSID clause in the BIT.1798 The ICSID Secretariat has declined to register requests for arbitration presented by individuals having the nationality of the host State and another Contracting State on grounds that such disputes are manifestly outside the jurisdiction of the Centre. This is notwithstanding that the instrument of consent – whether contract, law, or treaty – may purport to afford protection to such persons.1799 1795 1797 1798 1799

ibid 205. 1796 (1993) 1 ICSID Reports 23, 29. Saba Fakes v Turkey, Award (14 July 2010) para 62. Dolzer and Stevens (n 331) 141; Shihata and Parra (n 460) 308. Antonio R Parra, ‘The Institution of ICSID Arbitration Proceedings’ (2003) 20(2) News from ICSID 12, 13.

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Champion Trading v Egypt concerned claims under the Egypt–United States BIT brought by both corporate and natural persons who were shareholders in an Egyptian company. The natural persons were three brothers born in the United States to an Egyptian father. They were found to be nationals of the United States by birth and residence, but also Egyptian nationals on account of the nationality of their father at the time of their birth.1800 The Tribunal found that, as dual nationals, possessing the nationality of the host State to the dispute, they had no access to ICSID by application of the rule in Art. 25(2)(a).1801 The Tribunal volunteered the view that the application of the jus sanguinis principle over multiple generations to persons having no contact with their ancestral country of origin might raise a question about the appropriateness of the blanket exclusion expressed in Art. 25(2)(a).1802 However, in the circumstances of the case, the Tribunal considered there to be no unfairness, since the brothers had relied upon their Egyptian nationality at the time they set up the investment.1803 The rule that the investor may not have the nationality of the Contracting State to the dispute applies irrespective of which of two or more nationalities is more effective. This has been confirmed in several published decisions.1804 In Champion Trading v Egypt, the Claimants argued that even if the three brothers were found to be Egyptian nationals, this was not their ‘effective nationality’ as they had no ties with Egypt. They contended that their non-effective Egyptian nationality should be disregarded when considering the application of Art. 25(2)(a), since their dominant and effective nationality was that of the United States. This argument was unsuccessful. The Tribunal ruled that the dominant and effective nationality test had no application in the case of dual nationals who possess the nationality of the Contracting State to the dispute in the light of the ‘clear and specific rule’ in Art. 25(2)(a) of the Convention.1805 In Siag v Egypt, the two Claimants were both natural persons. They invoked the Egypt–Italy BIT in bringing claims against Egypt for harm done to an investment in the Gulf of Aqaba. It was not disputed that both were Italian nationals,1806 but Egypt argued that jurisdiction should be denied, in the light of Art. 25(2)(a), because all of the Claimants’ substantial connections were with Egypt, not Italy. Whilst the Tribunal acknowledged these connections, the majority found them not to be relevant to the question of jurisdiction. This was because the Claimants were found not to have been nationals of Egypt at the relevant times, nor indeed dual nationals at all.1807

1800 1801 1803 1804

Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) 11. ibid 16–17. 1802 ibid 17. ibid 16–17. ibid 16; Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 198; Pey Casado v Chile, Award (8 May 2008) para 241; Saba Fakes v Turkey, Award (14 July 2010) paras 62, 68–76. 1805 Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) 16. The Iran–United States Claims Tribunal in the ‘Dual Nationality Case, A-18,’ upon which the Claimants relied for the application of an effective nationality test, also observed that the real and effective nationality principle may be excluded if ‘an exception is clearly stated’; see Iran v United States, Case A/18 (1984) 5 Iran– USCTR 251, 263. This result would be contrary to the idea underlying that rule. There is no evident reason why a host State national should be able to take a constituent subdivision or agency before ICSID any more than the host State itself. 1806 Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 142. 1807 ibid paras 159, 162, 171–173, 196.

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The Tribunal went on to offer the further conclusion that ‘the regime established under Art. 25 of the ICSID Tribunal [sic - read ‘Convention’] does not leave room for a test of dominant or effective nationality.’1808 Strictly speaking, that conclusion went beyond what was necessary to dispose of the dispute and is not directly supported by authority, including the Decision on Jurisdiction in Champion Trading v Egypt upon which the Tribunal purported to rely.1809 The latter decision was restricted to the application of the particular rule in Art. 25(2)(a), but in Siag v Egypt neither Claimant had the nationality of the host State. The dissenting arbitrator in Siag v Egypt would have applied the doctrine of effective nationality to deny jurisdiction given the Claimants’ extensive connections with Egypt, albeit not formal nationality, especially at the time they made or acquired their investment.1810 Whilst he admitted that the question of dominant and effective nationality predominantly arises in situations of dual nationality, he did not agree with the majority that the doctrine could not be applied in relation to a person who was not a dual national.1811 The dissenting arbitrator’s proposed application of the doctrine of effectiveness apparently reflected the difficulty he had with upholding jurisdiction in respect of the claims of formerly Egyptian nationals, whose investment had benefited from that status.1812 The Convention speaks of the nationality of the Contracting State party to the dispute. If the party to the dispute is not the host State itself, but one of its constituent subdivisions or agencies (see paras. 523–571 supra), a literal interpretation may reach the result that the rule excluding host State nationals does not apply. But this result would be contrary to the idea underlying that rule. There is no evident reason why a host State national should be able to take a constituent subdivision or agency before ICSID more easily than the host State itself. The individual investor’s only chance to gain access to the Centre may be to relinquish the host State’s nationality before consent to ICSID’s jurisdiction is perfected. The investor would have to ensure that the renunciation of the nationality is valid under the host State’s law.1813 Pey Casado v Chile concerned the question whether Mr. Pey Casado had duly renounced his Chilean nationality. Applying Chilean law, the Tribunal first found that renunciation of Chilean nationality was possible and consistent with the Chilean Constitution. It then found that Pey Casado had taken a number of acts intended to renounce his Chilean nationality, and that the Chilean officials had acknowledged these and acted consistent with them having due effect. The Tribunal concluded that Pey Casado was no longer a Chilean national for purposes of ICSID’s jurisdiction.1814

1808 1809 1810 1811 1813

Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 198. ibid para 197. Siag v Egypt, Dissenting Opinion Orrego Vicuña (11 April 2007) 1–2, 4–5. ibid 2. 1812 ibid 2, 4–5. See Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) 11, discussing whether the father of the natural person Claimants had validly renounced his Egyptian nationality by the time of their birth, such that they avoided acquiring Egyptian nationality automatically. The Tribunal found that he had not. See also Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 169–173. 1814 Pey Casado v Chile, Award (8 May 2008) paras 314–322.

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There is one situation in which the host State’s nationality may be disregarded. An involuntary acquisition of nationality after consent to jurisdiction has been given should not deprive the investor of access to the Centre, if the compulsory grant of nationality is intended to defeat jurisdiction or is otherwise contrary to international law. The host State may not impose its nationality on a foreign investor for the purpose of withdrawing its consent (see para. 1105 supra). During the Convention’s drafting, the problem of compulsory granting of nationality was discussed, and the opinion was expressed that this would not be a permissible way for a State to evade its obligation to submit a dispute to the Centre (History, Vol. II, pp. 658, 705, 876). But it was decided that this question could be left to the decision of the conciliation commission or arbitral tribunal (ibid., pp. 868, 874, 877).1815

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4. Critical Dates Both the positive and the negative nationality requirements must be met at the time of consent as well as at the time the request for conciliation or arbitration is registered. The nationality of the other Contracting State must exist at both dates and the nationality of the host State must not exist at either date. There was much debate and uncertainty on the critical dates for determining the investor’s nationality during the Convention’s drafting.1816 The Working Paper referred to the date when the dispute is submitted to the Centre (History, Vol. I, p. 120), the Preliminary Draft to the date of consent (ibid., p. 122; Vol. II, p. 171). The subsequent discussions showed a wide spectrum of opinions. Some supported the date of consent (pp. 446, 539), others the time of investment (ibid., pp. 398, 708), and yet others the time of the institution of proceedings (ibid., pp. 446, 658). Some suggested that proof of nationality should be maintained throughout the proceedings up to the time of an award (ibid., pp. 395, 538, 583), while Mr. Broches favored nationality at the time of consent as well as at the institution of proceedings (ibid., pp. 260, 445, 538, 582–583). The First Draft provided that the positive nationality requirement must be met on the date of consent and on the date of the institution of proceedings (History, Vol. I, p. 124). The double test of time was later extended to the negative nationality requirement, that is the absence of the host State’s nationality (History, Vol. II, pp. 874, 878, 880–881). This was explained by the possibility that the individual investor might change his or her nationality between the two dates (ibid., p. 869). The Revised Draft retained the double test of time, but changed the second date to that of registration (History, Vol. I, p. 124). This is also the rule that is reflected in the Convention. The critical dates for the possession of the nationality of another Contracting State and the non-possession of the host State’s nationality should be distinguished from the dates at which these States become Contracting Parties to the Convention (see paras. 503–512, 611, 612 supra). In particular, it is not necessary that the investor’s home State or the host State are Contracting States on the date that consent to ICSID’s jurisdiction is given. But consent becomes effective only upon the fulfillment of all the requirements for its validity. It is the date at which all these requirements are met, 1815 This passage from the First Edition of this Commentary was noted to be of ‘particular significance’ in Pey Casado v Chile, Award (8 May 2008) para 321. 1816 See also Amerasinghe (n 96) 206–207.

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including the Convention’s entry into force for the host State and for the investor’s home State, that constitutes the date of consent (see paras. 880–885 supra). In Siag v Egypt, the dissenting arbitrator expressed the view that Art. 25(2)(a) should be read to exclude claims by individual investors who were nationals of the host State at the time of the host State’s ‘consent’ to submit disputes to ICSID. He read the date of consent broadly to mean not only the date when consent was perfected (typically, in investment treaty arbitration, the date of the request for arbitration), but also at the time of entry of an investment. In his view, it was at the date of entry that the Contracting Parties incurred ‘specific legal effects, including obligations of the host State under the treaty and the prohibition to exercise diplomatic protection by the other Contracting Party.’1817 The dissenting arbitrator apparently would have disregarded the Claimants’ subsequent loss of Egyptian nationality, and found them to be caught by the barrier to jurisdiction in Art. 25(2)(a), since they were both Egyptian at the time they made or acquired their investment.1818 This view appears to be more a call for reform than a construction of the applicable text. The dissenting arbitrator himself recognized that there was no support for such a reading in the Convention and that the parties had not raised such arguments themselves.1819 He acknowledged that ICSID’s rules on the institution of proceedings would need to be clarified if his view were to prevail.1820 The Convention only states that the positive and negative nationality requirements must be met at two discrete dates, that of consent and that of registration. It is silent on the intervening period. In the traditional law of diplomatic protection, a requirement of continuous nationality is often asserted from the time the claim arises up to the date it is taken up by the State of the injured person’s nationality or even up to the date of a decision.1821 The Convention does not require continuity of nationality. Its wording is directed at distinct points in time and not at a continuous period of time, which could have been expressed quite easily by ‘from’ and ‘to,’ or ‘continuously until,’ rather than by ‘as well as’ and ‘on either date.’1822 It follows that it is possible that the investor will have different nationalities on the two dates. The individual investor may change his or her nationality between the two critical dates, without affecting jurisdiction, as long as he or she has the nationality of some Contracting State other than the host State at both dates.1823 The Convention would even permit the rather unlikely situation that the investor acquires the host State’s nationality after the date of consent and loses it before the date of registration.

1817 1818 1820 1821 1822

Siag v Egypt, Decision on Jurisdiction, Dissenting Opinion (11 April 2007) 4. ibid. 1819 ibid. ibid. Loewen v United States (AF), Award (26 June 2003) paras 220 ff. This passage, contained in the First Edition of this Commentary, was quoted with approval in Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 205. See, however, an obiter dictum in a footnote to the Award in Vacuum Salt v Ghana, Award (16 February 1994) fn 9, where the Tribunal asserts that a ‘plausible justification exists for requiring continuous nationality (at least to the date of registration of a request for arbitration) of an individual but not of a juridical person: An individual has substantial control over his nationality, and thus an involuntary change of it, with consequent loss of a right to ICSID arbitration, is improbable.’ 1823 See Amerasinghe (n 96) 207–208; Hirsch (n 951) 79–80; Kovar (n 155) 40–41. See also History, Vol II, 538. Cf Laviec (n 1356) 281.

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Institution Rule 2 provides:

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(1) The request shall: . . . (d) indicate with respect to the party that is a national of a Contracting State: (i) its nationality on the date of consent; and (ii) if the party is a natural person: (A) his nationality on the date of the request; and (B) that he did not have the nationality of the Contracting State party to the dispute either on the date of consent or on the date of the request;

The Secretary-General will decide, inter alia, on the basis of this information whether or not the request is manifestly outside the jurisdiction of the Centre under Arts. 28(3) and 36(3). Institution Rule 2 does not require that the assertions as to nationality are substantiated by documentary evidence at the stage of the request. Such evidence may have to be produced at a later stage.1824 The date of the request may be identical with the date of consent, if the investor takes up an offer by the host State to submit to ICSID’s jurisdiction (see paras. 815, 882 supra). But the date of the request will almost certainly precede that of its registration. Theoretically, a change of nationality may occur in the short period between the date of the request and the date of its registration. Since it is the date of the registration, and not that of the request that is the second critical date, such a change of nationality would be relevant, but would have to be raised as an issue of jurisdiction or admissibility before the tribunal.1825 Under Arts. 32 and 41 of the Convention, it is ultimately up to the commission or tribunal to decide whether all jurisdictional requirements, including those of nationality, have been met at the relevant dates.

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M. ‘and (b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration . . .’ Art. 25(2)(b) defines ‘national of another Contracting State’ with respect to juridical persons. It consists of two clauses. The first, reproduced above, contains the general rule. The second (see text before para. 1262 infra) provides an important exception to that rule. The first clause of Art. 25(2)(b) is almost identical to the first part of Art. 25(2)(a) dealing with natural persons. Both provide that the investor, in order to have access to the Centre, must have had the nationality of a Contracting State other than the host State on the date of consent. But Art. 25(2)(a) continues by providing for a second critical date, the date of registration, and by expressly excluding investors with multiple nationalities if one of them is that of the host State. By contrast, Art. 25(2)(b), in its second clause, provides a special exception from the exclusion of host State nationals if they are foreign controlled and it is agreed to treat them as such. It is clear that the exception in Art. 25(2)(b) does not import an additional requirement of ‘control’ into the first clause (see paras. 1180–1195 infra).

1824 See Note D to Institution Rule 2, (1993) 1 ICSID Reports 53–54. 1825 See Notes H and I to Institution Rule 2, (1993) 1 ICSID Reports 54. See also Amerasinghe (n 96) 208; Paul C Szasz, ‘A Practical Guide to the Convention on Settlement of Investment Disputes’ (1968) 1 Cornell ILJ 1, 19.

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1. Juridical Persons 1172

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The Convention does not define the concept of a juridical person. The Working Paper was silent on juridical persons, but the Preliminary Draft referred to a ‘company,’ which was described as including ‘any association of natural or juridical persons, whether or not such association is recognized by the domestic law of the Contracting State concerned as having juridical personality’ (History, Vol. I, p. 122; Vol. II, p. 170). It was pointed out that countries might differ in their treatment of partnerships, associations, or companies (ibid., pp. 284, 359, 360, 661), and Mr. Broches suggested that for purposes of the Convention the matter might be left to the host State (ibid., p. 284). But there was also some opposition to extending the definition of the term ‘company’ to a mere association of natural persons or to an unincorporated partnership. Mr. Broches suggested that the matter might be left to be worked out by a tribunal in practice (ibid., p. 538).1826 The subsequent drafts and the Convention refer to ‘juridical person’ without a definition. This indicates that legal personality is a requirement for the application of Art. 25(2)(b) and that a mere association of individuals or of juridical persons would not qualify. In such a situation, the individuals’ case might be brought under Art. 25(2)(a) or the juridical persons’ case forming the association would have to be brought separately under Art. 25(2)(b).1827 This has been confirmed by ICSID tribunals. In LESI-DIPENTA v Algeria, the Tribunal declined jurisdiction to hear a claim brought by an unincorporated ‘consortium’ of companies.1828 The Tribunal in Impregilo v Pakistan also held that the Claimant was not permitted to submit a BIT claim to ICSID on behalf of all of its partners in an unincorporated joint venture. The unincorporated consortium did not qualify as a legal person for ICSID purposes.1829 The Tribunal added that it was not permissible for the Claimant alone to bring claims on behalf of partners that did not have the nationality of a Contracting State to the BIT, notwithstanding the companies’ agreement that the Claimant could represent the group. It was not permissible to expand the scope of consent set out in the BIT by way of private contract (see further paras. 656, 657 supra).1830 It would thus appear that the entity appearing as claimant must have legal personality under some legal system. Normally this would be the law of the State whose nationality is claimed (see Art. 42, para. 222).1831 The idea that ‘the term may encompass juridical persons which do not have that status under the law of either the host State or the other Contracting State’1832 would seem to go too far. Some BITs include associations

1826 See also CF Amerasinghe, ‘Interpretation of Article 25(2)(b) of the ICSID Convention’ in Richard B Lillich and Charles N Brower (eds), International Arbitration in the 21st Century: Towards Judicialization and Uniformity? (Transnational Pub 1994) 223, 242–243. 1827 This passage from the First Edition of this Commentary was quoted in Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) pt II, para 133. 1828 LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, paras 37–41. 1829 Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 131–139. 1830 ibid para 151. 1831 See also Amerasinghe (n 96) 209. 1832 Amerasinghe (n 1826) 244.

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without legal personality in their definitions of ‘investor.’1833 Some treaties also include trusts in their definitions of covered ‘investor.’1834 Such is the case of the Canada–Costa Rica BIT, which covers ‘any entity constituted or organized under applicable law, whether or not for profit, whether privately owned or governmentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association.’1835 But for purposes of the Convention the quality of legal personality is inherent in the concept of ‘juridical person’ and is part of the objective requirements for jurisdiction.1836 It follows that trusts and associations lacking legal personality would not qualify as nationals for the purposes of the Convention. However, other forms of dispute settlement outside the Convention may be available to them.1837 Provided a claimant has legal personality, it may not be relevant for the purposes of Art. 25(2)(b) that its capacity is constrained in some respect. In Abaclat and others v Argentina, for instance,1838 the Tribunal held that:

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With regard to the nature of the capacity necessary for corporations to benefit from the protection of the BIT and be a party to the present arbitration, the Tribunal is of the opinion that neither Article 1(2)(b) BIT nor Article 25 ICSID Convention limits the scope of eligible entities to those having full legal capacity, and also encompasses entities which enjoy limited civil capacity to the extent that such entities have the capacity to make an investment under the BIT and further to sue and to be sued.1839

In arriving at this conclusion, the Abaclat tribunal noted that the ‘ICSID Convention does not define the concept of juridical person, and does in particular not expressly require a non-natural investor to have specific legal personality.’1840 From that, the Abaclat tribunal itself proposed the following approach: (ii) . . . the ICSID Convention does not provide for a clear ‘yes or no’ answer and that the specific requirements regarding the legal personality of a non-natural investor therefore eventually depends on the scope rationae personae of the relevant BIT and the legal capacity required for a non-natural investor to acquire an investment protected by the BIT under the law applicable to such investor and to sue or be sued in its own name with regard to such investment. (iii) Where a non-natural investor falls within the definition of juridical persons provided for in the BIT, and where such investor has under the law applicable to it the legal capacity to acquire an investment protected under the BIT and to sue and to be sued, it would be contrary to the purpose of the BIT and the ICSID Convention to deny such investor the capacity to initiate ICSID arbitration. Indeed, it would make no sense to allow on one hand an investor to make an

1833 1834 1835 1836

Dolzer and Stevens (n 331) 37, 38. See esp German Model BIT (2008) Art. 1(3). Repousis (n 512) 265–268. Canada–Costa Rica BIT (signed 18 March 1998, entered into force 29 September 1999) Art. 1(b). The final sentence of this paragraph contained in the First Edition of this Commentary was quoted in Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 133. 1837 Repousis (n 512) 265 (noting that Chapter 11 of the NAFTA also covers trusts, and pointing to at least one claim that has been filed by a trust claimant, namely Centurion v Canada (UNCITRAL), Notice of Arbitration (5 January 2009)). 1838 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011). 1839 ibid para 416. 1840 ibid para 417(ii).

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schreuer’s commentary on the icsid convention investment protected under the BIT, and deny on the other hand such investor the right to invoke protection under the BIT for violation of the rights attached to such investment.1841

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Abaclat would appear to extend the concept of a ‘juridical person’ to entities that have the capacity to own assets in their own name and the capacity to ‘sue and to be sued,’ even if those entities do not, strictly speaking, possess separate legal personality in the legal system in which they were established. This approach, if followed, places emphasis on the functional elements of a ‘juridical person’ over a certain form. A company in insolvency may have standing under Art. 25 to bring claims. In Inmaris Perestroika v Ukraine, two German companies in insolvency, IWC and IWS, were among the Claimants and were represented by the insolvency administrator of the companies.1842 In line with German insolvency law, the Tribunal considered the insolvency administrator ‘formally the Claimant on [the companies’] behalf.’1843 No objection to jurisdiction was raised arising from these circumstances. In Herzig v Turkmenistan, the insolvency administrator of a bankrupt German limited liability company, Unionmatex, brought claims against Turkmenistan on behalf of the defunct company.1844 As of 31 December 2020, the case was still pending.

2. Determination of Corporate Nationality a) Incorporation, Seat, or Control 1180

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Under traditional international law, there are several possible criteria for the determination of a juridical person’s nationality.1845 The most widely used test looks at the place of incorporation or registered office. Alternatively, the place of the central administration or effective seat (siège social) is considered decisive. Incorporation or seat have become the accepted tests in the area of diplomatic protection. This excludes the possibility of piercing the corporate veil and looking at the nationality of the controlling interest, notably that of the shareholders.1846 On the other hand, a control test has been accepted for other purposes, notably for the treatment of enemy aliens in time of war.1847 The Preliminary Draft of the Convention offered two possible criteria for the nationality of a company: nationality under the domestic law of a Contracting State, or a ‘controlling interest’ of the nationals of such a State (History, Vol. I, p. 122; Vol. II, pp. 170, 260, 537). Nationality under a State’s domestic law was later explained to mean that the company either had its seat in that country or was incorporated under the law of that country (ibid., p. 446). In the subsequent debates, there was much doubt on

1841 1842 1843 1844 1845

ibid para 417(ii)–(iii) (internal references omitted). Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) paras 1, 31. ibid para 31, fns 7, 8. Herzig v Turkmenistan, Decision on Security for Costs (27 January 2020) para 1. See Pia Acconci, ‘Determining the Internationally Relevant Link between State and Corporate Investor’ (2004) 5 JWIT 139. 1846 See esp Barcelona Traction, Light and Power Company, Ltd (Belgium v Spain) (New Application: 1962) (Second Phase) [1970] ICJ Rep 3, 42; Ahmadou Sadio Diallo (Guinea v DR Congo) (Preliminary Objections) [2007] ICJ Rep 582. 1847 More generally see Giorgio Sacerdoti, ‘Barcelona Traction Revisited: Foreign-Owned and Controlled Companies in International Law’ in Yoram Dinstein (ed), International Law in a Time of Perplexity: Essays in Honour of Shabtai Rosenne (Martinus Nijhoff 1989) 699.

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the feasibility of a control test (ibid., pp. 286, 287, 359, 360, 446, 448). It was suggested that it might be more reasonable to afford protection directly to the individual shareholders (ibid., pp. 446, 447, 538, 581). Some delegates pointed out that the search for a controlling interest would be extremely difficult (ibid., pp. 361, 447–448, 538, 581). On the other hand, it was felt that companies of a non-Contracting State should be covered by the Convention if nationals of a Contracting State had a majority holding of their capital (ibid., p. 447). The subsequent First Draft is silent on the possible criteria for corporate nationality and merely refers to a possible agreement on nationality between the parties (History, Vol. I, p. 124). Although there was some reference to the fact that the criteria for the nationality of a juridical person remained to be determined (History, Vol. II, pp. 669, 671), no serious effort to do so was made. A United States attempt to reintroduce the criterion of a ‘controlling interest’ in the definition of ‘national of another Contracting State’ was defeated by a large majority (ibid., pp. 837, 871). The Revised Draft and the Convention are silent on the method to be employed for the determination of a juridical person’s nationality. A systematic interpretation of Art. 25(2)(b) would militate against the use of the control test for determining a corporation’s nationality. The second clause of Art. 25(2)(b) provides that a juridical person, even though it possesses the nationality of the host State, may be treated as a foreign investor by way of a special agreement ‘because of foreign control.’ By relying on control for the exception to host State nationality, the provision implies that host State nationality is not based on control. Therefore, it is clear that the control test cannot be applied to explain the word ‘nationality’ in the second clause of Art. 25(2)(b). It is unlikely that the word ‘nationality’ used earlier on in the same sentence in a more general context has a different meaning. It is improbable that the nationality of a Contracting State other than the host State should be determined differently from nationality of the host State. Practice does not demonstrate any convincing reasons to the contrary. Therefore, it must be assumed that the word appearing twice in the same sentence has the same meaning in both instances. Scholarly opinion is divided on whether incorporation or seat are the only permissible criteria for the determination of nationality under Art. 25(2)(b).1848 According to Delaume, it is generally agreed that, within the framework of the ICSID Convention, the nationality of a corporation is determined on the basis of its siège social or place of incorporation.1849 He is supported by a number of other authors.1850 By contrast, Amerasinghe has questioned the relevance of the criteria for corporate nationality, as developed in the context of diplomatic protection, for purposes of ICSID’s jurisdiction. He pleads in favor of an extremely flexible approach that would merely require some

1848 See generally Schlemmer (n 255) 76–78; Vandevelde (n 1357) 168–172; Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 107 (‘According to international law and practice, there are different possible criteria to determine a juridical person’s nationality. The most widely used is the place of incorporation or registered office. Alternatively, the place of the central administration or effective seat may also be taken into consideration’); Anil Yilmaz Vastardis, The Nationality of Corporate Investors under International Investment Law (Hart 2020). 1849 Georges R Delaume, ‘ICSID Arbitration and the Courts’ (1983) 77 AJIL 784, 793–794; Delaume, ‘ICSID Arbitration’ (n 938) 62; Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 111. 1850 Hirsch (n 951) 85; Laviec (n 1356) 282; Sutherland (n 952) 384–385; Alexandrov (n 177) 36–37.

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adequate connection between the juridical person and the State, including control by nationals of that State.1851 Broches has adopted a more cautious approach. In his view, the Convention clearly assumes that the company’s place of establishment will or may be held to determine its nationality.1852 But he warns against a mechanical application of the criteria developed for diplomatic protection. An agreement to submit to ICSID’s jurisdiction should be upheld unless it would lead to a use of the Convention for purposes for which it was clearly not intended.1853 In giving effect to such an agreement, a commission or tribunal should take account not only of formal criteria such as incorporation, but also of economic realities such as ownership and control (see also para. 1204 infra).1854 ICSID tribunals have uniformly adopted the test of incorporation or seat, rather than control when determining the nationality of claimants that are juridical persons. In Kaiser Bauxite v Jamaica, the Tribunal held that the Claimant was a national of another Contracting State on the basis of the finding that ‘Kaiser is a private corporation organized under the laws of the State of Nevada in the United States of America.’1855 In SPP v Egypt, the Tribunal consistently referred to both Claimants as Hong Kong corporations.1856 Documents filed by the Claimants satisfied the Tribunal that they were, in fact, ‘Hong Kong corporations domiciled in Hong Kong.’1857 Findings that a juridical person had the nationality of the host State, for the purposes of the second clause of Art. 25(2)(b), were also based on the corporations’ head offices or places of incorporation (see para. 1267 infra).1858 In SOABI v Senegal, the Tribunal said: As a general rule, States apply either the head office or the place of incorporation criteria in order to determine nationality. By contrast, neither the nationality of the company’s shareholders nor foreign control, other than over capital, normally govern the nationality of a company, although a legislature may invoke these criteria in exceptional circumstances. Thus, a ‘juridical person which had the nationality of the Contracting State party to the dispute,’ the phrase used in Article 25(2)(b) of the

1851 Amerasinghe, ‘The International Centre’ (n 1343) 807–808; Amerasinghe (n 96) 212–214, 222; Amerasinghe (n 1826) 241. See also Szasz (n 120) 33; Charles Vuylsteke, ‘Foreign Investment Protection and ICSID Arbitration’ (1974) 4 Georgia JICL 343, 356. 1852 Broches (n 1356) 70. 1853 See also Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 109. 1854 See MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54 (where the parties had agreed on ICSID jurisdiction and on MINE’s Swiss nationality despite the fact it was a Lichtenstein company. The Tribunal did not expressly rule on an objection to that effect, but impliedly accepted that Swiss control over MINE was sufficient for it to be considered a Swiss company, and consequently for ICSID jurisdiction to be upheld. This was critical as Lichtenstein had not ratified the Convention). See also Broches (n 159) 360–361; Broches (n 1001) 77; Amerasinghe, ‘Submissions’ (n 26) 228; Amerasinghe (n 96) 217 ff, 222–223. In respect of giving effect to the parties’ agreement, see also Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 119–120; Delaume, ‘Le Centre’ (n 163) 790–791; Sutherland (n 952) 385. 1855 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 19. 1856 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 46. 1857 ibid, Decision on Jurisdiction II (14 April 1988) para 54. See also ibid, Dissenting Opinion El Mahdi (14 April 1988) Part II, para 3. 1858 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(ii); LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 351–354.

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Convention, is a juridical person which, in accordance with the laws of the State in question, has its head office or has been incorporated in that State.1859

In Tokios Tokelės v Ukraine, the majority observed that ICSID tribunals have consistently applied a test of incorporation or seat, when determining the nationality of a corporate person, and, of these, ‘reference to the state of incorporation is the most common method of defining the nationality of business entities under modern BITs and traditional international law.’1860 Thereafter, the approach of the Tokios Tokelės majority has been confirmed consistently.1861 At times, tribunals will determine corporate nationality by reference to both the place of incorporation and effective seat.1862 Another context in which tribunals apply the traditional test is the nationality of the foreign control under the second clause of Art. 25(2)(b). In Amco v Indonesia, the Tribunal simply relied on the classical concept of nationality based on incorporation and the social seat (see para. 1371 infra).1863 In SOABI v Senegal, the Tribunal examined the nationality of the controlling company by looking at its place of incorporation and at the location of its head office. But it found that for the special purposes of the exception contained in the second clause of Art. 25(2)(b), control could be traced beyond the first controlling corporation (see paras. 1373, 1374 infra).1864 Tribunals have denied that the Convention requires any investigation into a claimant company’s controllers for purposes of establishing nationality,1865 save in the limited exception in respect of claims brought by legal persons having the host State’s nationality (see paras. 1331–1347, 1381–1408 infra). The reference to foreign control in the second sentence of Art. 25(2)(b) does not change this basic conclusion. This provision, and provisions like it in treaties and legislation, are intended to expand ICSID jurisdiction to include entities incorporated in the host State, not limit jurisdiction where a foreign company is controlled by nationals of the host State. This has been confirmed in several cases. It was said in Wena Hotels v Egypt to be ‘rather convincingly’ established.1866 In CMS v Argentina, the Tribunal said that ‘the Convention does not really 1859 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 29. See also eg Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 108 (citing the quoted passage from SOABI). 1860 Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 63, and see para 42. See also Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) para 83. 1861 Waste Management v Mexico II (AF), Award (30 April 2004) para 85; ADC v Hungary, Award (2 October 2006) paras 357–359; Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) paras 82–83; BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) para 53, item (5); KT Asia v Kazakhstan, Award (17 October 2013) para 128; Gold Reserve v Venezuela (AF), Award (22 September 2014) paras 250–252. 1862 See eg Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 46; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 43; Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) para 395. 1863 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(iii). 1864 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 35–36. See also ibid, Dissenting Opinion Mbaye (25 February 1988) paras 61, 62. See also TSA Spectrum v Argentina, Award (19 December 2008) (denying jurisdiction because behind the Claimant’s immediate Dutch owner was a natural person having the nationality of the host State). 1865 See eg Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 28; ADC v Hungary, Award (2 October 2006) paras 358, 359; Mabco v Kosovo, Decision on Jurisdiction (30 October 2020) para 395 and ibid, Dissenting Opinion Reinisch (29 October 2020) para 53. 1866 Wena Hotels v Egypt, Decision on Jurisdiction (29 June 1999) (2004) 6 ICSID Reports 74, 82.

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make such a requirement [i.e. control] a central tenet of jurisdiction but only an alternative for very specific purposes.’1867 In Tokios Tokelės v Ukraine, the Tribunal held, by a majority, that the second clause of Art. 25(2)(b), referring to control, applies only in the context of an agreement of the parties. Its effect is to extend the scope of ICSID jurisdiction to companies incorporated in the host State that are controlled by nationals of another Contracting State. It does not apply to limit ICSID jurisdiction.1868 The President of the Tribunal in Tokios Tokelės, Prosper Weil, dissented from the majority decision (see para. 1217 infra). In his opinion, the Convention imposed a requirement that investment disputes within the meaning of the Convention were ‘disputes between States and foreign investors,’ not ‘investment disputes between states and their own nationals.’1869 In Weil’s reading, the ICSID Convention was not meant to allow nationals of a State party to use a foreign corporation to gain access to ICSID arbitration. His dissenting opinion has often been cited in support of the proposition that the existence of foreign control must be taken into account when determining whether the nationality requirements of the Convention have been met. However, this approach has consistently remained a minority position and has been rejected in favor of the approach of the majority in Tokios Tokelės that control has no role to play within the inquiry of the first limb of Art. 25(2)(b) (see paras. 1194, 1223 infra). The same point was expressed in similar terms in Enron v Argentina1870 and in CMS v Argentina.1871 It was also explained clearly in the Decisions on Jurisdiction in Sempra v Argentina and Camuzzi v Argentina I: 40. The structure of the provision leaves no room for doubt. The first situation is that of a company having the nationality of a contracting State different from the one that is a party to the dispute. To the extent that it meets the requirements of the Convention and of the respective Treaty, that company is eligible to resort to ICSID on the basis of its nationality. 41. The second situation is different. It relates to a company which has the nationality of the State that is a party to the dispute and which, for that reason, could be prevented from claiming against its own State; in such a case, the foreign control criterion enables it to complain as if it were a company of the nationality of the other contracting Party . . .1872

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The overwhelming weight of the authority, outlined above, points towards the traditional criteria of incorporation or seat for the determination of corporate nationality of claimants under Art. 25(2)(b). It follows that the reference to foreign control in Art. 25(2)(b) does not impose a further general requirement upon investors having the requisite foreign nationality in order for them to submit a dispute to ICSID. It is this approach, based on the criteria of incorporation and seat, that allows corporate groups to interpose a foreign holding company to obtain the protection of 1867 1868 1869 1870 1871 1872

CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 58. Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras 45–46. ibid, Dissenting Opinion, para 5. Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) paras 40–46. CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 51, 58. Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 40, 41. See also Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 30–31.

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presumably more favorable provisions in different BITs and access to the Centre. Had the ICSID Convention adopted a general requirement that legal persons falling within the first limb of Art. 25(2)(b) must also be controlled by nationals of the home State, such ‘restructuring’ would be to no avail. However, it is open to States to define additional conditions, such as control and substantial economic connections, in their agreements, treaties, or national legislation containing their consent to refer disputes to ICSID.1873

b) Agreement on Nationality The question of the corporate investor’s nationality may be clarified through an agreement between the host State and the investor. The First Draft contained a clause whereby the parties could have agreed freely to treat any juridical person as a ‘national of another Contracting State’ (History, Vol. I, p. 124). Although designed mainly to deal with companies incorporated in the host State, this provision was drafted in broad terms and would have applied to agreements on corporate nationality in general. It was criticized in subsequent discussions as being ‘unnecessary’ and having ‘no practical use’ (History, Vol. II, pp. 658, 840) and dropped. The Revised Draft and the Convention refer to an agreement between the parties only in the context of the exception to host State nationality contained in the second clause of Art. 25(2)(b). Model Clause 6 (see para. 606 supra) suggests that the host State and the investor clarify the investor’s nationality through a special stipulation in the investment agreement. Such a stipulation should be distinguished from the agreement under the second clause of Art. 25(2)(b) concerning host State nationals (see paras. 1270–1326 infra). The Model Clause suggests that the particular nationality be specified in an agreement on nationality. Such a specification is advisable to avoid potential disputes as to the nationality of the investor, although it is not necessary (see paras. 602–609 supra). An agreement between the parties on the investor’s nationality will carry much weight in case a respondent State argues that the investor does not possess the claimed nationality, but it cannot create a nationality that does not exist. For instance, a corporation that clearly has only the nationality of a non-Contracting State, cannot be made a national of a Contracting State by agreement. On the other hand, it has been suggested convincingly that any reasonable criterion supporting the agreement should be accepted.1874 In particular, mere control of the corporation should be sufficient in such a case.1875 (On the form and extent of control, see paras. 1381–1408 infra.) An agreement on nationality became relevant in MINE v Guinea. A 1975 agreement between the parties provided for the settlement of their dispute by ICSID arbitration. 1873 See eg Georgios Petrochilos, Sylvia Noury and Daniel Kalderimis, ‘ICSID Convention, Chapter II, Article 25’ in Loukas Mistelis (ed), Concise International Arbitration (Kluwer 2010) 66–77; Jeswald W Salacuse, The Law of Investment Treaties (OUP 2009) 186–190; Jeswald W Salacuse, The Three Laws of International Investment: National, Contractual, and International Frameworks for Foreign Capital (OUP 2013) 376–378; Odysseas Repousis, ‘Standing of Locally Incorporated Entities in International Investment Law and the Notion of “Foreign Control”’ (2016) 24 Tulane J Int’l & Comp L 327. 1874 Amerasinghe, ‘Submissions’ (n 26) 228; Amerasinghe (n 96) 217 ff, 222–223; Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 120. 1875 Broches (n 159) 361; Broches (n 1001) 77; Delaume, ‘Le Centre’ (n 163) 790–791; Sutherland (n 952) 385.

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The ICSID consent clause stated that ‘[t]he parties hereby precise [sic] that the investor is Swiss.’1876 In fact, MINE was incorporated in Liechtenstein but was apparently under Swiss control. Since Switzerland had ratified the Convention but Liechtenstein had not, MINE’s nationality was decisive for ICSID’s jurisdiction. MINE did not, at first, pursue proceedings before ICSID, but obtained an ex parte award under the auspices of the American Arbitration Association (AAA). In proceedings to confirm that award before US Federal Courts, Guinea filed a motion to dismiss the case for lack of jurisdiction, arguing that ICSID had exclusive jurisdiction.1877 On appeal from the District Court,1878 MINE argued that the 1975 agreement was inadequate to confer jurisdiction on ICSID, since MINE was incorporated in Liechtenstein, a non-Contracting State, and that the nationality of a juridical person was to be determined exclusively by its place of incorporation. In opposition, Guinea argued for a more flexible approach, permitting agreement on a nationality based on substantial contacts.1879 A brief submitted on behalf of the United States suggested that an ICSID tribunal would not necessarily be precluded from taking jurisdiction over the dispute between MINE and Guinea under these circumstances and suggested that the Court should withhold its decision pending a ruling by an ICSID tribunal.1880 The Court of Appeals found for Guinea, but based its decision on considerations of sovereign immunity1881 (see also Art. 26, paras. 9–12, 15–19, 171, 274, 275). MINE’s next step was to institute ICSID proceedings in September 1984. At the time of registration, MINE argued that the real interest in the company was Swiss and the Secretary-General registered the application ‘without prejudice to the question whether the condition of nationality is satisfied.’1882 Before the Tribunal, neither party raised jurisdictional objections, and the Tribunal did not issue a formal decision on the question of MINE’s nationality.1883 But by assuming jurisdiction, the Tribunal implicitly accepted MINE’s Swiss nationality. A subsequent application for annulment did not raise the issue.1884 The Tribunal appears to have accepted the view that an agreement on nationality based on actual control is decisive for the determination of the claimant’s nationality. The fact that the parties raised no objections to the Centre’s jurisdiction constituted no obstacle to a finding on this issue. Under Arbitration Rule 41(2), the tribunal may consider questions of jurisdiction on its own initiative. The circumstances of the case 1876 Delaume, ‘ICSID Arbitration and the Courts’ (n 1849) 786–787; Bette Shifman, ‘Maritime International Nominees Establishment v Republic of Guinea: Effect on US Jurisdiction of an Agreement by a Foreign Sovereign to Arbitrate before the International Centre for Settlement of Investment Disputes’ (1982) 16 Geo Wash J Int’l L & Econ 451, 461–462. 1877 Delaume, ‘ICSID Arbitration and the Courts’ (n 1849) 787–789. 1878 505 F Supp 141, (1981) 20 ILM 666, (1997) 4 ICSID Reports 3. 1879 Delaume, ‘ICSID Arbitration and the Courts’ (n 1849) 794. See also Brief for the United States of America as Intervenor and Suggestion of Interest (1981) 20 ILM 1436, 1480. 1880 Brief for the United States of America, ibid, 1481. 1881 693 F 2nd 1094, (1982) 21 ILM 1355, (1987) 72 ILR 152, (1997) 4 ICSID Reports 9. 1882 (1985) 2(1) News from ICSID 3. See also Hirsch (n 951) 88. 1883 The Tribunal makes reference to MINE’s justification for going to the US courts to compel AAA arbitration in the context of a claim for reimbursement of legal fees. But the denial of this claim is inconclusive for the question of nationality. See MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 76. 1884 MINE v Guinea, Decision on Annulment (22 December 1989) fn 1 to para 1.02.

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make it obvious that the Tribunal could not have been ignorant of the questions surrounding the claimant’s nationality.1885 The loan and sovereign guarantee agreements at issue in CDC v Seychelles contained an agreement that CDC was a national of another Contracting State for the purposes of Art. 25 of the Convention.1886 The Concession Agreement in Soufraki v UAE described Mr. Soufraki as a Canadian national.1887 In neither case did the agreement on nationality play a decisive role in the tribunals’ reasoning. An agreement on the investor’s nationality need not be made in the form of an express stipulation. Consent to ICSID’s jurisdiction expressed in a direct agreement between the parties implies an understanding that the investor fulfills the Convention’s nationality requirements.1888 This would hold true only if two conditions are fulfilled. First, the host State must have expressed its consent specifically with respect to the particular investor. Normally, this would be the case only if the consent is expressed in a single instrument; a general offer of consent contained in national legislation or a treaty that is taken up by the investor would not carry this implication. Second, the parties must have been fully aware of the circumstances surrounding the investor’s nationality. In particular, if mistake, deception, or misrepresentation can be shown to have existed, no inferences as to an agreement on nationality can be drawn from the fact of consent. The consequence of such an implicit agreement on nationality would be that the nationality hurdle would be easily overcome (see para. 1198 supra). Any reasonable connection to a Contracting State, including control, would be acceptable. For instance, if the host State entered into a consent agreement with an investor that is incorporated in a non-Contracting State, but is controlled by nationals of a Contracting State, the host State could not subsequently challenge jurisdiction on the ground that the nationality requirements of Art. 25(2)(b) were not met, provided the circumstances surrounding the investor’s nationality were fully known. By contrast, if consent is based on an offer, contained in host State legislation, or in a treaty, which is simply taken up by the investor, no inferences as to agreed nationality can be drawn. Unless another test is provided by the legislation or treaty, the host State may insist that the investor demonstrate its nationality of a Contracting State based on incorporation or siège social. The conditions frequently found in legislation and treaties are discussed next.

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c) Legislation and Treaties In the case of consent based on national legislation or treaties (see paras. 780–874 supra), the respective instruments often contain definitions or descriptions of foreign investors. Definitions in national investment legislation containing ICSID clauses are by no means uniform. Some national laws refer to a corporate foreign investor as a juridical person ‘incorporated or constituted under the law of a foreign country’1889 or as

1885 1886 1887 1888 1889

For a critical evaluation, see Hirsch (n 951) 88–91. CDC v Seychelles, Award (17 December 2003) para 4. Soufraki v UAE, Award (7 July 2004) paras 3, 41. Broches (n 159) 361; Szasz (n 120) 34. Albania – Law on Foreign Investments (1993) Art. 1. See Tradex v Albania, Decision on Jurisdiction (24 December 1996) (1999) 14 ICSID Rev 161, 171–172, 181–182; Kazakhstan – Law on Foreign Investments (1995) Art. 1; Mozambique – Law on Investments (1993) Art. 1(1)(q).

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‘incorporated outside the . . . Republic.’1890 Other laws refer to corporations in which more than half of the registered capital is held by foreign persons or foreign corporations.1891 BITs use a variety of criteria to determine the nationality of a company.1892 Many BITs use the traditional criteria of incorporation and/or seat.1893 For instance, the Chinese Model BIT of 2003 defines corporate investors in the following terms: ‘legal entities, including companies, associations, partnerships and other organizations, incorporated or constituted under the laws and regulations of either Contracting Party and that have their seats in that Contracting Party.’1894 Some Swiss treaties use the concept of a controlling interest.1895 BITs of other States, such as the Netherlands,1896 the United States,1897 France,1898 and Sweden1899 use a combination of the traditional criteria and of control.1900 Some BITs combine incorporation with the need to demonstrate substantial business activity in the country concerned.1901 Some investment treaties combine both place of incorporation and seat. This was the case, for instance, in CEAC v Montenegro, where the Cyprus–Montenegro BIT defined investors as legal entities that were both constituted under the laws of a Contracting State to the BIT and had their ‘seat’ in that State. However, the Tribunal held that it did not need to decide what the meaning of ‘seat’ was under the applicable BIT, as the Claimant had failed to convince the Tribunal that it satisfied the definition under any of the three pleaded interpretations of the term. These were that the term ‘seat’ meant (a) ‘registered office,’ (b) the place where the entity is managed and controlled, and (c) the place where the entity had its tax residency.1902

1890 1891 1892 1893

1894 1895

1896

1897 1898 1899 1900 1901 1902

Tanzania – National Investment (Promotion and Protection) Act (1990) s 2. Uganda – Investment Code (1991) s 10(1)(b); Zaire/DR Congo – Investment Code (1986) Art. 1(c). See Dolzer and Stevens (n 331) 34–42. See eg Italy–Korea BIT (signed 10 January 1989, entered into force 26 June 1992) Art. 2(3); Argentina–Italy BIT (signed 22 May 1990, entered into force 14 October 1993) Art. 1(2); Albania– Italy BIT (signed 12 September 1991, entered into force 29 January 1996) Art. 1(2); Argentina–China BIT (signed 5 November 1992, entered into force 1 August 1994) Art. 1(2); Chile–Norway BIT (signed 1 June 1993, entered into force 7 September 1994) Art. 1(1). China Model BIT (2003) Art. 1(2)(b). See Swiss Model Agreement (1986) Art. 1(b), reproduced in Dolzer and Stevens (n 331) 219. See also Poland–Switzerland BIT (signed 8 November 1989, entered into force 18 April 1990) Art. 1(1); Jamaica–Switzerland BIT (signed 11 December 1990, entered into force 21 November 1991) Art. 1 (b); Chile–Switzerland BIT (signed 24 September 1999, entered into force 2 May 2002) Art. 1(1). Dolzer and Stevens (n 331) 210. See also Cape Verde–Netherlands BIT (signed 11 November 1991, entered into force 25 November 1992) Art. 1(b); Argentina–Netherlands BIT (signed 20 October 1992, entered into force 1 October 1994) Art. 1(b); Lithuania–Netherlands BIT (signed 26 January 1994, entered into force 1 April 1995) Art. 1(b). See Dolzer and Stevens (n 331) 241–242; Bulgaria–United States BIT (n 844); Moldova–United States BIT (signed 21 April 1993, entered into force 26 November 1994). See France Model BIT (2006) Art. 1(2)(b. See also France–Kuwait BIT (signed 27 September 1989, entered into force 16 May 1991) Art. 1(4); France–Nigeria BIT (n 1273) Art. 1(3); Chile–France BIT (signed 14 July 1992, entered into force 24 July 1994) Art. 1(3). See eg Sweden–Tunisia BIT (signed 15 September 1984, entered into force 13 May 1985) Art. 1(3); Morocco–Sweden BIT (signed 26 September 1990, entered into force 16 June 2008) Art. 1(3). See Parra, ‘The Scope’ (n 307). See US Model BIT (2012) Art. 1, defining ‘enterprise of a Party’. CEAC v Montenegro, Award (26 July 2016) para 184.

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Some multilateral instruments containing ICSID consent clauses (see paras. 863–874 supra) follow the traditional criteria. For instance, the ECT describes a corporate investor as ‘a company or other organization organized in accordance with the law applicable in that Contracting Party.’1903 The NAFTA defines an ‘enterprise of a Party’ as ‘an enterprise constituted or organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there.’1904 The USMCA in Art. 14.1 defines an ‘enterprise of a Party’ in the same terms.1905 Definitions of corporate nationality in national legislation or in treaties providing for ICSID’s jurisdiction are directly relevant to the determination of whether the nationality requirements of Art. 25(2)(b) have been met. They are part of the legal framework for the host State’s submission to the Centre. Upon acceptance in writing by the investor (see paras. 814–824, 850–862 supra), they become part of the agreement on consent between the parties. Therefore, any reasonable determination of the nationality of juridical persons contained in national legislation or in a treaty should be accepted by an ICSID commission or tribunal (see also paras. 1325, 1326 infra). This conclusion was expressly confirmed in Tokios Tokelės v Ukraine.1906 Host States have at times argued that the ICSID Convention implies additional conditions for the determination of an investor’s nationality, besides the requirements set out in applicable investment treaties. In Tokios Tokelės v Ukraine, Ukraine argued that, whilst Tokios Tokelės was lawfully incorporated in Lithuania, it was not a ‘genuine entity’ of Lithuania for the purposes of the Lithuania–Ukraine BIT and the Convention. Ukraine argued that the Tribunal should adopt either a ‘control test,’ and look to the company’s ultimate owners, or determine its siège social, both of which, it said, pointed to Ukrainian, not Lithuanian, nationality. Ukraine emphasized that Tokios Tokelės was 99 percent owned by Ukrainian nationals, who also comprised two-thirds of its management. Ukraine also argued that Tokios Tokelės conducted no substantial business activities in Lithuania, and that its administrative headquarters were based in Ukraine, although these allegations were disputed. Ukraine argued that the Tribunal ought not to uphold its jurisdiction for policy reasons. It said that the object and purpose of the Lithuania–Ukraine BIT and the Convention did not permit nationals of the host State to submit claims against their own State to international arbitration, albeit through a foreign-incorporated entity. Ukraine argued that the Lithuania–Ukraine BIT, and the Convention, both contemplated only the settlement of international investment disputes involving a Contracting State and a foreign investor.1907

1903 1904 1905 1906

See ECT (n 33) Art. 1(7)(a)(ii). See also Protocol of Colonia (n 335) Art. 1(2)(b). NAFTA (n 32) Art. 1139. USMCA (n 338) Art. 14(1). Tokios Tokelės v Ukraine, Art. 14(1) Decision on Jurisdiction (29 April 2004) para 26 (quoting the corresponding passage in the First Edition of this Commentary). 1907 Ukraine further argued that Tokios Tokelės did not make an investment in Ukraine as defined by the BIT. Ukraine argued that both the Lithuania–Ukraine BIT and the Convention protected only international, cross-border investments and asserted that Tokios Tokelės had failed to prove that its capital investment originated from outside Ukraine. On the issue of the origin of the investment see paras 182–187 supra.

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The Tribunal held, by a majority, that the Convention leaves the task of choosing the applicable test by which to determine whether a legal person qualifies as a national of a Contracting State to the ‘reasonable discretion of the Contracting Parties.’1908 Art. 1(2)(b) of the BIT defined Lithuanian ‘investors’ to mean ‘any entity established in the territory of the Republic of Lithuania in conformity with its laws and regulations.’1909 The Tribunal further held that the legal place of incorporation was the only relevant consideration to determine whether the Tribunal had jurisdiction ratione personae. Nothing in the Convention or the BIT required any further or substantial connection between Tokios Tokelės and Lithuania, including the locus of the underlying controllers, in order for it to qualify for protection under the treaty and to submit a claim to ICSID.1910 As it was not disputed that Tokios Tokelės was a legal entity duly established under the laws of Lithuania, the majority concluded that Tokios Tokelės qualified as a Lithuanian ‘investor’ for the purposes of the BIT and a ‘national of another Contracting State’ for the purposes of the Convention.1911 The majority explained the rationale for its approach as follows: We emphasize here that Contracting Parties are free to define their consent to jurisdiction in terms that are broad or narrow; they may employ a control-test or reserve the right to deny treaty protection to claimants who otherwise would have recourse under the BIT. Once that consent is defined, however, tribunals should give effect to it, unless doing so would allow the Convention to be used for purposes for which it clearly was not intended.1912

1215

Some States require a further bond between a company and their territory, if the company is to be entitled to benefit from treaty protection. They express qualifications on the standing of companies or reserve the right to deny protection to entities that lack a substantial connection to the State in which they are incorporated if they are controlled by nationals of a third State.1913 The majority in Tokios Tokelės v Ukraine regarded the absence of such qualifications as ‘a deliberate choice of the Contracting Parties.’1914

1908 1909 1911 1913

Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 24. ibid para 28. 1910 ibid. ibid paras 29, 38. 1912 ibid para 39. On the interpretation and application of denial-of-benefits clauses, see eg Generation Ukraine v Ukraine, Award (16 September 2003) paras 15.1–15.9; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 143–178; Petrobart v Kyrgyzstan (SCC), Award (29 March 2005) 63; Yukos Universal v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) para 461. For commentary, see eg Stephen Jagusch and Anthony Sinclair, ‘The Limits of Protection for Investments and Investors under the Energy Charter Treaty’ in Clarisse Ribeiro (ed), Investment Arbitration and the Energy Charter Treaty (Juris 2006) 93; Mark Feldman, ‘Setting Limits on Corporate Nationality Planning in Investment Treaty Arbitration’ (2012) 27 ICSID Rev 281, 296; Paul M Blyschak, ‘Yukos Universal v Russia: Shell Companies and Treaty Shopping in International Energy Disputes’ (2010/2011) 10 Rich J Global L & Bus 179, 208–209; Loukas A Mistelis and Crina Baltag, ‘Denial of Benefits and Article 17 of the Energy Charter Treaty’ (2008/2009) 113 Penn St LR 1301; Jordan Behlman, ‘Out on a Rim: Pacific Rim’s Venture into CAFTA’s Denial of Benefits Clause’ (2013/2014) 45 U Miami Inter-Am LR 397. On the substance of criteria that exist in some treaties to qualify for protection, see eg Yaung Chi v Myanmar (ad hoc), Award (31 March 2003). See also Anthony Sinclair, ‘The Substance of Nationality Requirements in Investment Treaty Arbitration’ (2005) 20 ICSID Rev 357, 378–387. 1914 Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 36.

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The Tribunal also appears to have been persuaded by the fact that there was no evidence that Tokios Tokelės had been established for the very purpose of attracting the protection of the Lithuania–Ukraine BIT and obtaining access to ICSID. As with the cases that have queried the ‘effective’ nationality of natural persons, the majority held that this was not a case involving a nationality of convenience.1915 The President of the Tribunal dissented from the majority decision, stating that he disagreed with the very ‘philosophy of the decision.’1916 In the President’s opinion, the Convention imposes certain objective jurisdictional requirements on the Centre. These requirements formed the ‘outer limits’ of ICSID’s jurisdiction, which the parties to a dispute may not ‘dispose at will.’1917 For him, it followed that while the Contracting Parties to the BIT were free to confer to the ICSID tribunal a jurisdiction narrower than that provided for by the Convention, it was not for them to extend the jurisdiction of an ICSID tribunal beyond its determination in the Convention.1918 The President observed, relying in part on the Preamble, that the Convention was established as a mechanism for arbitrating ‘international investment disputes, that is to say, for disputes between States and foreign investors,’ not for ‘investment disputes between states and their own nationals.’1919 According to the President,

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the ICSID mechanism and remedy are not meant for, and are not to be construed as, allowing – even less encouraging – nationals of a State party to the ICSID Convention to use a foreign corporation, whether preexistent or created for that purpose, as a means of evading the jurisdiction of their domestic courts and the application of their national law. It is meant to protect – and thus encourage – international investment.1920

Although the President acknowledged that it would be necessary to establish criteria to identify the controllers of a corporate entity, in the instant case it was clear to his mind that in effect Tokios Tokelės was a Ukrainian entity. The President observed that ‘[i]n the present case . . . where Tokios Tokelės is indisputably and totally in the hands of, and controlled by, Ukrainian citizens and interests, there is no evading the issue of principle.’1921 Thus, in his view, Tokios Tokelės was not a ‘national of another Contracting State,’ it was a national and investor of Ukraine, and he would have declined to uphold jurisdiction accordingly.1922 The President felt moved to express his dissenting view, and subsequently resign from the case, out of concern for ‘the future of the institution.’1923 The President’s Dissenting Opinion reflects a particular appreciation of the ICSID Convention’s object and purpose. But it is not supported by the text of Art. 25. The majority decision, on the other hand, is respectful of the clear terms of the parties’ consent to use ICSID as expressed in the Lithuania–Ukraine BIT. The majority declared that they would be loath to undermine the basic principle that the cornerstone of ICSID’s jurisdiction is party consent.

1915 1917 1919 1921 1923

ibid ibid ibid ibid ibid

paras 53–56. para 28 para 5. para 10. para 1.

1916 1918 1920 1922

ibid, Dissenting Opinion, para 1. ibid para 13. ibid para 30 (emphasis in the original). ibid para 21.

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For the most part, commentators have sided with the majority in Tokios Tokelės.1924 They disagree with the President and see no risk of ‘unwarranted encroachment’ on domestic jurisdiction since both Ukraine and Lithuania had agreed to ICSID jurisdiction and had not specified a control test for nationality.1925 But there are some critics of the majority decision and voices in support of the President’s approach. They have described the majority decision as illogical1926 and have pointed to the Convention’s apparent object and purpose.1927 They have described the majority decision in Tokios Tokelės as ‘flawed, both in terms of law and policy,’1928 and have described it as an unwarranted extension of jurisdiction opening the door to treaty shopping.1929 Subsequent tribunals have followed the majority decision in Tokios Tokelės rather than the approach of the President. ADC v Hungary concerned a claim, brought by two companies incorporated in Cyprus, pursuant to the Cyprus–Hungary BIT. The Respondent objected to jurisdiction, alleging that the Claimants were shell companies controlled by Canadians, which it said were the true investors.1930 It also said that the Claimants lacked a ‘genuine link’ with Cyprus. The Tribunal dismissed these objections.1931 The Cyprus–Hungary BIT, which contained the relevant definition of nationality, did not require a ‘genuine link’ or require that the Claimants’ controllers should also be Cypriot.1932 In doing so, the Tribunal expressly disagreed with the Dissenting Opinion in Tokios Tokelės v Ukraine and referred to the majority decision as ‘good law.’1933 In Rompetrol v Romania, Romania objected to the jurisdiction of the Centre, alleging that the investment was in reality domestic in nature, since it was owned by a Romanian national and since the source of the funds was also domestic and not foreign. Romania argued that the Request for Arbitration was really an inappropriate attempt to clothe a domestic investment with Dutch nationality.1934 Romania conceded that the Claimant satisfied the formal requirements of Dutch nationality for the purposes of ICSID and the Netherlands–Romania BIT, but alleged that, based on ownership and control, effective seat and source of funds, the Claimant’s ‘real and effective’ nationality was that of Romania.1935 1924 See eg Alexandrov (n 177) 36–37; Hege Veenstra-Kjos, ‘Tokios Tokelės v Ukraine, Decision on Jurisdiction of April 29, 2004’ (2004) 1(3) TDM; Julien Fouret and Dany Khayat, ‘Chronique de règlement pacifique des différends internationaux (2005)’ (2009) 6(1) TDM; Caline Mouawad and Lara Karam, ‘Tokios Tokelės: Home Is Where Control Is?’ in American Arbitration Association (ed), ADR and the Law (Juris 2007) 259. 1925 Robert Wisner and Nick Gallus, ‘Nationality Requirements in Investor–State Arbitration’ (2004) 5 JWIT 927, 943. 1926 Schlemmer (n 255) 79. 1927 Stefan Kröll and Jörn Griebel, ‘Protecting Shareholders in Investment Law: To Pierce or Not to Pierce the Veil, That Is the Question!’ (2005) 2 Stockholm Int’l Arb Rev 93, 113. 1928 Markus Burgstaller, ‘Nationality of Corporate Investors and International Claims against the Investor’s Own State’ (2006) 7 JWIT 857, 860. 1929 Alain Prujiner, ‘L’arbitrage unilatéral: Un coucou dans le nid de l’arbitrage conventionnel?’ (2005) 1 Revue de l’arbitrage 63, 80. 1930 ADC v Hungary, Award (2 October 2006) para 335. 1931 ibid paras 336–341. 1932 ibid paras 358–359. 1933 ibid para 360. 1934 Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) para 71. 1935 ibid para 78.

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The Tribunal rejected these objections. Its starting premise was that the Convention left it to the Contracting States to define the conditions for nationality. The Tribunal was guided by the definition of nationality in the Netherlands–Romania BIT:

1225

In the Tribunal’s view, the latitude granted to define nationality for purposes of Article 25 must be at its greatest in the context of corporate nationality under a BIT, where, by definition, it is the Contracting Parties to the BIT themselves, having under international law the sole power to determine national status under their own law, who decide by mutual and reciprocal agreement which persons or entities will be treated as their ‘nationals’ for the purposes of enjoying the benefits the BIT is intended to confer.1936

The Tribunal noted that the Contracting Parties to the BIT were entitled to adopt incorporation under their own law as a ‘necessary and also sufficient criterion of nationality for purposes of ICSID jurisdiction,’ and that they had done so. This was sufficient for the purposes of Art. 25(2)(b). The Contracting Parties had not stipulated any further examination of ownership and control, of the source of investment funds, or of the corporate body’s effective seat. The Tribunal held that the definition of national status given in the Netherlands–Romania BIT was decisive for the purpose of establishing its jurisdiction.1937 The parties had specifically consented to ICSID jurisdiction brought by Dutch companies, ‘without regard to the incidents of control or source of capital.’1938 The Tribunal was unable to accept Romania’s argument which drew upon the President’s Dissenting Opinion in Tokios Tokelės v Ukraine, the effect of which would be ‘tantamount to setting aside the clear language agreed upon by the treaty Parties in favour of a wide-ranging policy discussion.’1939 Where the Tribunal’s jurisdiction was governed by the ICSID Convention and the BIT, there was no basis to import alleged international law rules of ‘real and effective nationality’ or ‘nonopposability’ to defeat jurisdiction:

1226

[T]he Tribunal is clear in its mind that there is simply no room for an argument that a supposed rule of ‘real and effective nationality’ should override either the permissive terms of Article 25 of the ICSID Convention or the prescriptive definitions incorporated in the BIT.1940

The Tribunal in Mobil v Venezuela expressly held that ‘Article 25(b)(i) does not impose any particular criteria of nationality (whether place of incorporation, siège social or control).’1941 Parties to investment treaties are free to choose the criteria by which they consider legal persons to be their nationals.1942 In Mobil, this meant that subsidiaries incorporated in the United States and the Bahamas were considered Dutch nationals under the applicable Bolivia–Netherlands BIT, whose definition of nationals included both ‘legal persons constituted under the law of one of the Parties and those constituted under another law, but controlled by such legal persons.’1943 In BIVAC v Paraguay, the Tribunal held that ‘[c]ase law and commentary are clear in their support for the proposition that States have a broad discretion to define corporate 1936 1938 1940 1941 1942

ibid para 81. 1937 ibid para 83. ibid para 101. 1939 ibid para 85. ibid para 93. Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 157. ibid. 1943 ibid.

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nationality, for instance for the purposes of a BIT.’1944 In that case, the applicable BIT included an incorporation test (‘legal persons constituted under the laws of that Contracting Party’). Therefore, a Dutch-incorporated company was considered to be a Dutch national irrespective of it being controlled by its French parent company. Paraguay’s argument that the claim was inadmissible because the real party in interest was the French parent, even though not strictly ruled upon by the Tribunal as it was belatedly raised, was nevertheless rejected in principle.1945 The Tribunal found that States have a broad discretion to identify the criteria for determining nationality in the context of investment treaties and that in the case of that BIT ‘no test of control [was] required.’1946 ICSID practice repeatedly confirms that, in the absence of a definition of nationality in a treaty or law imposing further, more substantial connections than mere incorporation or seat, it is both permissible and to be expected that investors will structure their investments in order to avail themselves of treaty protection and, thus, the right to submit disputes to ICSID.1947

3. Nationality of a Contracting State 1230

1231

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The juridical person must have the nationality of a Contracting State other than the host State. Therefore, a corporation that only has the nationality of a non-Contracting State is excluded. A proposal to exclude juridical persons that do not have the nationality of any Contracting State was put to the vote in the Legal Committee and adopted with a large majority (History, Vol. II, p. 868) (see also para. 600 supra). Juridical persons may be treated as having multiple nationalities where the criteria of incorporation, seat, and control do not coincide. A company may be incorporated in State A, have its main seat of business in State A or B, and may be controlled by nationals of State C. If all possible nationalities linked the juridical person to Contracting States, no problem would arise. The Convention’s phrasing in the singular (‘a Contracting State’) would not preclude two or several nationalities of Contracting States, even if no clear decision can be made between or among them. At the time of a request for conciliation or arbitration a specific nationality must be stated (see para. 607 supra). Rule 2(1)(d)(i) of the Institution Rules requires that the request shall indicate the investor’s ‘nationality on the date of consent.’ No problem is likely to arise if a nationality of a Contracting State based on one of the accepted criteria is indicated or even if several nationalities, all of Contracting States, are indicated. The situation is more complicated, if one of the possible nationalities is that of a nonContracting State. The possession of the nationality of a non-Contracting State in

1944 BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) para 53, item (5). 1945 ibid. 1946 ibid. 1947 See eg Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) s 3.4.2; Soufraki v UAE, Award (7 July 2004) para 83; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 330; BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) para 53, item (5); Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 157; Orascom v Algeria, Award (31 May 2007) paras 267–268, 314–315 (citing the Second Edition of this Commentary); ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) paras 279–280; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 178–182.

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addition to that of a Contracting State would not as such be a bar to becoming a party to ICSID proceedings (see para. 1142 supra). The decisive test would then be whether the nationality of a Contracting State, other than the host State, can be established with the help of the accepted criteria described above (paras. 1180–1195 supra). If it can, the concurrent possession of the nationality of a non-Contracting State, established on the basis of these same criteria, would not exclude jurisdiction.1948 It is also possible that in a situation of this kind, a commission or tribunal would not have to search for the dominant or most effective nationality. The simple existence of the nationality of a Contracting State based on acceptable criteria would suffice. For instance, if the investor is incorporated in a non-Contracting State, but controlled by nationals of Contracting States, jurisdiction should be upheld, if the host State, in full knowledge of the relevant facts, has consented to jurisdiction and has thereby implicitly agreed that the investor possesses the required nationality (see para. 1204 supra). If control is exercised by nationals of Contracting States as well as of non-Contracting States, the question of form and extent of control should be treated with flexibility (see paras. 1381–1408 infra). In view of the agreement on nationality, any reasonable degree of control by nationals of Contracting States should be accepted under this theory.1949 The above solution incurs the risk of diplomatic protection on behalf of the investor by a non-Contracting State. A non-Contracting State is not bound by the prohibition of diplomatic protection under Art. 27(1) of the Convention (see Art. 27, paras. 14–16). This is the inevitable consequence of accepting criteria for corporate nationality for purposes of ICSID’s jurisdiction that differ from those used for diplomatic protection. A juridical person that has access to the Centre on the basis of incorporation or seat may be protected by a non-Contracting State whose nationality it has on the basis of control. In Autopista v Venezuela, Mexico sought to facilitate a settlement between the Claimant and Venezuela. In light of Mexico’s interest in the outcome of the case, Venezuela contended that should the Tribunal accept its jurisdiction, Venezuela may face both the treaty claim and a diplomatic protection claim on Mexico’s part, since Mexico was not a Contracting State and therefore not bound by Art. 27 of the Convention. The Tribunal found Mexico’s interest in the outcome of the dispute ‘somewhat disturbing,’ but held that it did not affect its jurisdiction.1950 Investors may be precluded from adopting tactics that will enable them to benefit from both ICSID jurisdiction and diplomatic protection. In Banro v DR Congo, the Tribunal found that an investor cannot manipulate its investments through subsidiaries incorporated in different jurisdictions to simultaneously invoke ICSID arbitration as a national of a Contracting State and benefit from the diplomatic protection of another Contracting State in respect of the same dispute.1951 In Mihaly v Sri Lanka, the Tribunal also referred to the harm that would be done to the scheme of the Convention if investors, not having the nationality of a Contracting State, were permitted to assign a claim to an affiliated company incorporated in another

1948 1949 1950 1951

Amerasinghe (n 96) 213–216; Amerasinghe (n 1826) 241–242. Amerasinghe (n 96) 222. Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 135–140. Banro v DR Congo, Award (1 September 2000) para 103. See also Bernardo Cremades and David Cairns, ‘The Brave New World of Global Arbitration’ (2002) 3 JWIT 173, 200–201.

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State which was a party to the ICSID Convention and so facilitate ICSID jurisdiction, but at the same time not exclude the right of the State of the assignor from espousing a claim in diplomatic protection.1952 In case of State succession, questions may also arise as to whether a juridical person possesses the nationality of a Contracting State on the critical date (see paras. 622–634 supra). The likelihood of complications arising from the nationality of non-Contracting States depends on the degree to which the Convention is ratified by more and more States. To the extent that the list of ratifications approaches universality, the entire problem of the investor’s nationality becomes increasingly insignificant. All the above considerations concerning multiple nationalities are premised on the assumption that the juridical person does not have the nationality of the host State. Nationality of the host State, even if one of several nationalities, leads to the applicability of the second clause of Art. 25(2)(b) requiring a special agreement based on foreign control (see paras. 1262–1445 infra).

4. Critical Date 1242

1243

1244

The requirement that the juridical person must have the nationality of a Contracting State other than the host State only applies at the date of consent. The double test of time, which is valid for natural persons (see paras. 1161–1170 supra), does not apply to juridical persons. The Working Paper for the Convention linked the nationality requirement to the date of the submission of the dispute to the Centre, without distinguishing between natural and juridical persons (History, Vol. I, p. 120). The Preliminary Draft took the date of consent as the critical date, also without distinguishing between the two types of investors (ibid., p. 122). In the subsequent discussion, there was some concern that the investor might change its nationality subsequently (History, Vol. II, pp. 287, 395) (see also para. 1162 supra). Mr. Broches favored a double test of time for natural persons but did not think it necessary to apply this principle to companies since he thought it unlikely that a company could become incorporated in another country without being dissolved (ibid., pp. 538, 869). Consequently, the First Draft retained the single test to determine corporate nationality at the date of consent for juridical persons (History, Vol. I, p. 124). This solution was confirmed in subsequent debates (History, Vol. II, pp. 837, 868, 881) and found entry into the Revised Draft and into the Convention. The effective date of consent is the day on which all the conditions for a valid consent have been met (see paras. 880–889 supra). This day may be the date on which the Convention entered into force for the investor’s State of nationality, but it will normally be a later date (see para. 1164 supra). It may be the date on which proceedings are instituted, if the investor takes up a general offer by the host State in legislation or a treaty to submit to ICSID jurisdiction (see paras. 815, 882 supra). The Tribunal in Rompetrol v Romania rightly observed that the ‘critical date’ in investment treaty arbitration is the date of the Request for Arbitration,1953 or more precisely, the date it 1952 Mihaly v Sri Lanka, Award (15 March 2002) para 24. 1953 Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) para 79.

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is transmitted to the Centre. There is no support in the text of the Convention for the critical date to be the acquisition or making of an investment, as suggested by the dissenting arbitrator in Siag v Egypt.1954 Any change in the juridical person’s nationality after the date of consent is immaterial for jurisdiction.1955 Subsequent to consent, a juridical person may lose the nationality of the original Contracting State and may acquire the nationality of a non-Contracting State or that of the host State without losing access to ICSID.1956 As the Tribunal in the resubmitted case in Vivendi v Argentina observed: ‘once established, jurisdiction cannot be defeated. It simply is not affected by subsequent events.’1957 This may not be the case in respect of specific investment treaties, such as the NAFTA. In Loewen v United States, the Tribunal held that, under the NAFTA Chapter 11, a claimant must demonstrate its continuous nationality until the date of any award, and must not acquire the nationality of the host State.1958 The correctness of that conclusion as a matter of general international law has been questioned by commentators.1959 It is certainly not a requirement of the ICSID Convention. Art. 25 spells out the applicable rules on nationality for the purposes of ICSID’s jurisdiction. Some have cast doubt on the conclusion that a change in nationality after the critical date cannot defeat ICSID jurisdiction, where the later nationality is that of a nonContracting State. It is argued that the enforcement of an arbitral award against the investor might be jeopardized if the investor is not a national of a Contracting State. In addition, the prohibition of diplomatic protection would not apply to the investor’s new home State.1960 Both arguments are unconvincing. Under Art. 54 of the Convention, recognition and enforcement are obligations that are incumbent on all Contracting States. There is no particular obligation of the investor’s home State. The change of nationality of a corporation does not necessarily go hand-in-hand with a relocation of assets. The problem of concurrent diplomatic protection may arise, even if no change of nationality has occurred (see paras. 1235–1238 supra). Most importantly, the Convention’s wording is quite unambiguous on this point. The contrast between the provisions on critical dates in Arts. 25(2)(a) and 25(2)(b) makes it abundantly clear that different solutions are intended for natural and for juridical persons. The double test of time was chosen for individuals and a single test at the time of consent was chosen for corporations. Institution Rule 2(1)(d)(i) provides that the request for conciliation or arbitration shall indicate the investor’s nationality on the date of consent (see para. 1168 supra). The Secretary-General will decide, inter alia, on the basis of this information whether or not 1954 Siag v Egypt, Decision on Jurisdiction, Dissenting Opinion (11 April 2007) 4. 1955 Amerasinghe (n 96) 223. 1956 This passage, contained in the First Edition of this Commentary, was endorsed in Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 64. 1957 Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 63. 1958 Loewen v United States (AF), Award (26 June 2003) para 220. 1959 See eg Paulsson (n 1248); Matthew Duchesne, ‘The Continuous-Nationality-of-Claims Principle: Its Historical Development and Current Relevance to Investor–State Investment Disputes’ (2004) 36 Geo Wash Int’l LR 783; Mendelson (n 1248); Noah Rubins, ‘The Burial of an Investor–State Arbitration Claim’ (2005) 21 Arb Int’l 1. 1960 Hirsch (n 951) 95–96.

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the request is manifestly outside the jurisdiction of the Centre in accordance with Arts. 28(3) and 36(3) of the Convention. No documentation of the investor’s nationality is required at that time (Institution Rule 2(2)), but evidence to this effect may have to be produced at a later stage.1961 When the investment’s ownership changes after the filing of the claim, for example, when ownership over the investment is transferred, this should not affect an ICSID tribunal’s jurisdiction, and therefore that investor’s standing (see paras. 729–744 supra). This is in line with the general rule that the critical date is that of consent.1962 For instance, the Tribunal in CSOB v Slovakia held that the ‘absence of beneficial ownership by a claimant in a claim or the transfer of the economic risk in the outcome of a dispute should not and has not been deemed to affect the standing of a claimant in an ICSID proceeding.’1963 When the transfer of ownership takes place prior to the filing of the claim, for example, by way of assignment or sale, as long as the assignee or purchaser is a national of a Contracting State, this alone should not be a bar to ICSID jurisdiction. In those cases, however, it needs to be examined whether the investor would still be covered under the relevant contract, treaty, or legislation. For example, in Vivendi, the ad hoc Committee explained that the claim could initially be characterized as a Spanish treaty claim (because that was the nationality of the investor when the Respondent’s wrongful conduct occurred); however, the claim was then assigned to another French investor and became a French treaty claim.1964 The Vivendi committee did not have to rule on whether this particular issue would deprive the Tribunal of its jurisdiction in respect of claims brought by the assignee. From the perspective of the Convention itself, however, prior to the filing of a claim, assignments or transfers of claims to nationals of other Contracting States are permissible, absent other circumstances. The Convention is also silent on the permissibility of so-called corporate restructuring and ‘nationality planning’ aimed at allowing investors to obtain more favorable investment treaty protection (see para. 1229 supra).1965 In those cases, however, a relevant consideration to the question of whether the treaty applies is whether the dispute has arisen or was foreseeable, prior to any such restructuring. In that respect, tribunals have resorted to general principles of international law, such as good faith, in order to determine the permissibility of such claims. In Phoenix Action v Czech Republic, a Czech national established an Israeli entity, acquired ownership of two Czech companies, which had been engaged in ongoing disputes with the Czech criminal authorities,1966 and brought proceedings under the Czech Republic–Israel BIT.1967 The chief executive officer of one of the Czech companies was also the subject of a criminal investigation that had determined that 1961 See Note D to Rule 2 of the 1968 Institution Rules, (1993) 1 ICSID Reports 53–54. 1962 El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 117, 135–136; Enron v Argentina, Award (22 May 2007) para 192; Gemplus v Mexico, Award (16 June 2010) paras 5–33. 1963 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 32. 1964 Vivendi v Argentina, Decision on Annulment (3 July 2002) para 50. 1965 See generally Baumgartner (n 1170); Ebert (n 1170); Kirtley (n 1203); Robert Sloane, ‘Breaking the Genuine Link: The Contemporary International Legal Regulation of Nationality’ (2009) 50 Harvard ILJ 1. 1966 Phoenix Action v Czech Republic, Award (15 April 2009) paras 29–32. 1967 ibid paras 1, 139–144.

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the company’s funds were the proceeds of crime.1968 The Tribunal found that the principle of good faith, as a general principle of international law, barred the Claimant from bringing these claims.1969 As the Tribunal put it, a ‘change [in] the structure of a company complaining of measures adopted by a State for the sole purpose of acquiring an ICSID claim that did not exist before such change cannot give birth to a protected investment.’1970 It was crucial for the Tribunal that, when the Israeli entity bought the Czech companies, the dispute had already arisen, civil and criminal litigation was ongoing, and the sale was effected ‘after the actions taken by the Czech Republic against these companies.’1971 The Phoenix tribunal further noted that Phoenix’s ‘investment project’ was made ‘simply to assert a claim under the BIT,’1972 and the transaction was intended ‘to transform a preexisting domestic dispute into an international dispute subject to ICSID arbitration.’1973 The Tribunal considered this to be an ‘abuse of the system,’1974 noting also that it was under a duty to ensure that the ‘ICSID mechanism does not protect investments that it was not designed . . . to protect.’1975 In Mobil v Venezuela, Exxon Mobil had restructured its investment in Venezuela by establishing a Dutch holding company, which owned certain Delaware companies, which owned a Bahamas-incorporated company, which, in turn, owned the relevant participations in the oil concession projects in Venezuela.1976 The Tribunal held that restructuring can be a ‘perfectly legitimate goal,’ both in general and, specifically, in the context of gaining access to ICSID jurisdiction, but only as long as this concerned future disputes.1977 Therefore, the Tribunal identified the disputes that had already arisen before the restructuring, rejecting jurisdiction for those and accepting it for disputes that had arisen after the relevant dates.1978 The findings of Phoenix Action v Czech Republic and Mobil v Venezuela have been affirmed and cited by several later tribunals.1979 In Cementownia v Turkey, the Claimant alleged it had acquired shares in two Turkish companies less than two weeks before the concessions those companies held were terminated.1980 Whilst the Tribunal dismissed the claims on the basis that the Claimant had not been able to prove that the acquisition of shares had taken place,1981 it also opined that ‘an investment made for the sole purpose of gaining access to international jurisdiction . . . is deemed not to be a protected investment.’1982 Implicit in the Award is the view that the investor’s attempt to ‘internationalise’ his investment after the dispute had become foreseeable would not have been successful to attract ICSID jurisdiction.1983

1968 1970 1972 1974 1976 1977 1979

ibid para 32. 1969 ibid paras 114, 139–144. ibid para 92. 1971 ibid paras 136–137. ibid para 138. 1973 ibid para 142. ibid. 1975 ibid para 144. Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 186–187. ibid para 204. 1978 ibid para 206. Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 2.46; ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) para 273; Lao Holdings v Laos (AF), Decision on Jurisdiction (21 February 2014) para 69. 1980 Cementownia v Turkey (AF), Award (17 September 2009) paras 5, 16. 1981 ibid paras 117, 156, 179. 1982 ibid para 154. 1983 ibid.

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In Pac Rim v El Salvador, the test to distinguish between permissible and impermissible cases of investment restructuring was expanded. Whereas the Mobil tribunal had drawn a line between disputes that had arisen at the time of the restructuring, holding that in that case the claim would become impermissible, and disputes that had not arisen at the time of the restructuring, which rendered the claim permissible, the Pac Rim tribunal held that claims restructured when disputes had become foreseeable at the time of the restructuring were equally impermissible.1984 In the words of the Tribunal, ‘the dividing line occurs when the relevant party can see an actual dispute or can foresee a specific future dispute as a very high probability and not merely as a possible controversy.’1985 Nonetheless, the Tribunal recognized that, ‘as a matter of practical reality, this dividing-line will rarely be a thin red line, but will include a significant grey area.’1986 In Pac Rim v El Salvador, at the time of the investment, the shares in the local entity, which was the investment, were transferred from its Canadian parent to a Cayman Islands entity. Thereafter, in 2007, the Cayman entity was reorganized to become a US company, with one of the factors in favor of this reorganization being the ‘ability to bring claims under [DR–]CAFTA, if a dispute with El Salvador were to arise in the future.’1987 The Claimant’s initial pleadings complained of a host of State measures, including measures that had taken place in 2005 and 2006. Those pleadings also stated that, in 2006, ‘it was increasingly apparent that the Government’s aim was preventing [its] operations altogether.’1988 Considering how the Claimant had framed its case, the Tribunal, applying the test set out above, held that it was ‘minded to accept’ that the claim amounted to an abuse of process.1989 However, the claim ‘as finally pleaded’ focused on the Respondent’s ‘de facto ban on mining operations’ in 2008, which was held to be a dispute that had not beeen known, nor could have been foreseeable, at the time of the restructuring.1990 Accordingly, the claims as finally presented were not dismissed.1991 In Levy and Gremcitel v Peru, the Tribunal adopted the test in Pac Rim v El Salvador, holding that a dispute must be foreseeable ‘as a very high probability and not merely as a possible controversy’ at the time of the restructuring for jurisdiction to be rejected.1992 Tribunals have also opined that corporate restructuring after a dispute has become foreseeable is potentially an abuse of right or an abuse of process (see paras. 707–715 supra).1993 As the Phoenix tribunal put it, the ICSID Convention/BIT System is not deemed to protect economic transactions undertaken and performed with the sole purpose of taking advantage of the rights

1984 1985 1987 1989 1991 1992 1993

Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 2.96, 2.99. ibid para 2.99. 1986 ibid. ibid para 2.22. 1988 ibid para 2.81. ibid para 2.82. 1990 ibid para 2.109. ibid para 2.110. Levy and Gremcitel v Peru, Award (9 January 2015) para 185. Phoenix Action v Czech Republic, Award (15 April 2009) paras 93, 151; Cementownia v Turkey (AF), Award (17 September 2009) paras 158–159; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 2.99; Transglobal v Panama, Award (2 June 2016) para 118; Levy and Gremcitel v Peru, Award (9 January 2015) paras 193–195.

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contained in such instruments, without any significant economic activity, which is the fundamental prerequisite of any investor’s protection.1994

In Cementownia, the attempt to bring a claim based on a restructuring when the dispute had become foreseeable, in the particular circumstances of that case, led to the Tribunal declaring that the investor had brought a ‘fraudulent’ claim.1995

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N. ‘. . . and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.’

1. General Significance The Convention is designed to facilitate the settlement of investment disputes between States and nationals of other States. It is not meant for disputes between States and their own nationals. The latter type of dispute is to be settled by domestic procedures, notably before domestic courts. On the other hand, host States frequently require that investment operations are carried out through companies organized under local law. The purpose of this requirement is a better supervision of the investors’ activities. Incorporation in the host State makes the investor technically a national of that State according to the most common test for nationality of juridical persons (see paras. 1180–1229 supra). This would exclude all investors that operate through local companies from the ambit of the ICSID Convention. A large and important part of foreign investment would then be outside the Convention’s scope. The second clause of Art. 25(2)(b) is designed to accommodate this problem by creating an exception to the ‘diversity of nationality’ requirement.1996 The Preliminary Draft specifically foresaw standing for investors who had the nationality of the host State in addition to that of another Contracting State. The nationality of companies was defined not only through establishment under national law, but also by way of a controlling interest (History, Vol. I, p. 122). The idea of giving host State nationals standing, if they have the concurrent nationality of another Contracting State, soon ran into strong opposition and was abandoned (see para. 1147 supra). Similarly, ‘controlling interest’ as a criterion for corporate nationality was cast into doubt, and later dropped (see para. 1181 supra). While there was some resistance to the idea of giving locally incorporated companies the possibility to sue the host State (History, Vol. II, pp. 449, 580, 581), a majority of delegates found that it would be unwise to exclude locally incorporated but foreign controlled companies (ibid., pp. 287, 325, 359, 360, 361, 394, 397, 400, 449, 581). A suggested solution to give access to 1994 Phoenix Action v Czech Republic, Award (15 April 2009) para 93. 1995 Cementownia v Turkey (AF), Award (17 September 2009) paras 158–159. 1996 For discussion, see Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 102; Wena Hotels v Egypt, Summary Minutes of the Session of the Tribunal (29 June 1999) para 48; Tokios Tokelés v Ukraine, Decision on Jurisdiction (29 April 2004) paras 46–48; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 31; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 41; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 213; Rumeli v Kazakhstan, Award (29 July 2008) para 329; Mera Investment v Serbia, Decision on Jurisdiction (30 November 2018) para 175. And see Broches (n 159) 358–359; Delaume, ‘ICSID Arbitration: Practical Considerations’ (n 880) 112.

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dispute settlement not to the locally incorporated company, but directly to its foreign owners (ibid., pp. 360, 396, 397, 446, 447, 449, 538, 705, 709, 871) was discarded. It was soon realized that this would not be feasible, where shares are widely scattered and their owners are insufficiently organized (ibid., pp. 449, 539, 581). Mr. Broches maintained throughout that, in view of the Convention’s optional character, it should be left to the host State whom it wished to treat as a foreign national (ibid., pp. 256, 284, 287, 359, 360, 361, 450, 539, 580) (see also para. 1114 supra). The First Draft provided that the parties could agree to treat a juridical person as a ‘national of another Contracting State.’ There was no reference to the objective requirement of control (History, Vol. I, p. 124). Delegates from developing countries strongly opposed this purely consensual solution (History, Vol. II, pp. 658, 706, 709, 710, 840, 869, 870). At the same time, the representatives of the United States expressed their preference for the reintroduction of the criterion of control (ibid., pp. 703, 837, 871). Intensive deliberations in a Working Group produced no clear decision in favor of a solution based either on agreement or on control (ibid., pp. 874–875). Two votes in the Legal Committee did not yield a majority for the restrictive view to prevent access to juridical persons that are nationals of the host State under any circumstances (ibid., pp. 869, 870). Eventually, Mr. Broches introduced a draft that combined the elements of agreement and foreign control by permitting agreement to treat a corporation of host State nationality as a national of another Contracting State because of foreign control. This solution was adopted by a narrow majority (ibid., pp. 871, 881, 937–938). In view of the continuing divergence of opinion evidenced by these votes, Mr. Broches stated that he would report the views expressed to the Executive Directors (ibid., pp. 938, 957–958). The draft, as adopted, was accepted without discussion at a meeting of the Executive Directors (ibid., p. 1027).1997 The Report of the Executive Directors, after referring to the provision in Art. 25(2)(a) on natural persons (para. 1149 supra), offers the following comment: 30. Clause (b) of Article 25(2), which deals with juridical persons, is more flexible. A juridical person which had the nationality of the State party to the dispute would be eligible to be a party to proceedings under the auspices of the Centre if that State had agreed to treat it as a national of another Contracting State because of foreign control.1998

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For purposes of finding that the corporate investor has the host State’s nationality, the criterion of control cannot be applied. The exception for juridical persons under foreign control only makes sense if the initial test is based on the traditional criteria of incorporation or siège social (see para. 1183 supra).1999 The drafting history also indicates clearly that the second clause of Art. 25(2)(b) was designed for situations in which the foreign investor had established a corporation under the host State’s law (see paras. 1263, 1264 supra).

1997 See also Aron Broches, ‘Development of International Law by the International Bank for Reconstruction and Development’ (1965) 59 ASIL Proc 33, 37. 1998 (1993) 1 ICSID Reports 23, 29. 1999 See also Amerasinghe (n 96) 211; Hirsch (n 951) 84.

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This conclusion is confirmed by the cases in which ICSID tribunals have applied the second clause of Art. 25(2)(b).2000 By way of example, in Amco v Indonesia, the Tribunal found that PT Amco had the nationality of Indonesia due to its place of incorporation and the place of its registered seat as well as of its actual seat.2001 In Klöckner v Cameroon, SOCAME was established as a Cameroonian limited liability company.2002 In SOABI v Senegal, the Claimant was a joint stock company with its head offices in Dakar, which, under the local law, made it a national of Senegal.2003 In that case, the Tribunal confirmed in general terms that the criteria of the location of the head office or the place of incorporation were decisive for corporate nationality (see para. 1186 supra). In LETCO v Liberia, the Claimant was found to be a juridical person with Liberian nationality because it was incorporated and registered in Liberia.2004 In Vacuum Salt v Ghana, the Claimant was a corporation organized under the 1963 Companies Code of Ghana.2005 In Cable TV v St Kitts and Nevis, the parties requesting arbitration were corporations under the Companies Act of St. Kitts and Nevis.2006 In Vivendi v Argentina, the second Claimant was incorporated in Argentina.2007 In Autopista v Venezuela, the Claimant was a corporation incorporated under the laws of Venezuela.2008 In Aguas del Tunari v Bolivia, the Claimant was incorporated in Bolivia.2009 In Caratube and Hourani v Kazakhstan, the first Claimant was incorporated in Kazakhstan.2010 In National Gas v Egypt, the Claimant was incorporated in Egypt.2011 In Eyre and Montrose v Sri Lanka, the second Claimant was incorporated in Sri Lanka.2012 A concurrent nationality of another State would not detract from a finding of host State nationality. Therefore, even if the host State’s nationality is one of several nationalities, the second clause of Art. 25(2)(b) would come into operation, requiring an agreement on nationality based on foreign control.2013 The Convention speaks of the nationality of the Contracting State party to the dispute. If the party to the dispute is not the host State itself, but one of its constituent subdivisions or agencies (see paras. 523–571 supra), a literal interpretation may lead to the result that the rule concerning host State nationals does not apply. But this result would be contrary to the idea underlying that rule. There is no evident reason why a host State national should be able to take a constituent subdivision or agency before ICSID more easily than the host State itself.

2000 See also Lalive (n 53) 138, fn 1. 2001 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(ii). See also the reference to the terms of the Indonesian Foreign Investment Law of 1967 in Award (20 November 1984) para 14. 2002 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 15, 18. 2003 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 30. 2004 LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 351. 2005 Vacuum Salt v Ghana, Award (16 February 1994) para 28. 2006 Cable TV v St Kitts and Nevis, Award (13 January 1997) para 5.13. 2007 Vivendi v Argentina, Award (21 November 2000) para 1. 2008 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 1. 2009 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 1. 2010 Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 1. 2011 National Gas v Egypt, Award (3 April 2014) para 3. 2012 Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 253–254. 2013 See, however, Amerasinghe (n 96) 213.

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3. Agreement to Treat the Investor as a National of Another Contracting State a) Form of Agreement 1270

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The Convention does not require any specific form for an agreement to treat a juridical person that has the host State’s nationality as a national of another Contracting State because of foreign control. An agreement is essential, however. Without it, the Centre will not have jurisdiction. The Secretariat has declined to register requests for arbitration by parties that could not identify an agreement to treat a locally incorporated company as foreign. In some cases, parties withdrew voluntarily.2014 Since such an agreement is closely linked to consent, it will normally be recorded in the consent agreement.2015 The Model Clauses offer the following formula for this purpose: Clause 7 It is hereby agreed that, although the Investor is a national of the Host State, it is controlled by nationals of name(s) of other Contracting State(s) and shall be treated as a national of [that]/[those] State[s] for the purposes of the Convention.2016

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Clauses of this kind are used in actual practice.2017 Contracts may contain more complex provisions. In TANESCO v IPTL, the clause stated that, for the purposes of consenting to the jurisdiction of the Centre, it was agreed that IPTL was a foreign-controlled entity, unless the amount of the voting stock in IPTL held by non-Tanzanian investors should decrease to less than 50 percent of its voting stock.2018 In Autopista v Venezuela, the Tribunal accepted that the parties may conclude a conditional agreement for the purposes of Art. 25(2)(b). At the time the relevant agreement was signed, the Claimant was a Venezuelan company controlled by Mexican nationals. Mexico, however, was not a Contracting State at the time. By the time a dispute arose, the Claimant was directly controlled by investors of the United States, which is a Contracting State. The nationality of the Claimant’s immediate shareholders satisfied the parties’ conditional agreement to treat the Claimant as a foreign national, because of foreign control, as of such time as it came to be controlled by nationals of another Contracting State.2019 That agreement provided: Both The Republic of Venezuela, acting by means of the MINISTRY, and THE CONCESSIONAIRE, agree to attribute to THE CONCESSIONAIRE, a legal person

2014 See eg Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 8 and Award (26 July 2007) para 19; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 40. 2015 This was the case in SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 30–31; Santa Elena v Costa Rica, Award (17 February 2000) paras 1, 16, 26; Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 133, 134. For the formation of such agreements based on an offer contained in investment treaties, see eg National Gas v Egypt, Award (3 April 2014) para 132; Eyre and Montrose v Sri Lanka, Award (5 March 2020) para 256. 2016 (1997) 4 ICSID Reports 362. See also Clause VI of the 1968 Model Clauses, (1968) 7 ILM 1159, 1167; Clause VIII of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 202. 2017 For examples, see Delaume (n 120) 176. 2018 TANESCO v IPTL, Award (12 July 2001) para 10. 2019 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 83, 89–91, 117, 142.

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of Venezuela subject to foreign control for the date when this clause enters into force, the character of ‘National of another Contracting state’ for the purpose of applying this Clause and the provisions of the Convention.2020

Alternatively, the agreement on nationality may be made independently of a consent agreement, such as in a compromis or a joint request under Institution Rule 1(2). National legislation and investment treaties providing for ICSID jurisdiction may grant access to locally established, but foreign controlled corporations (see paras. 1319–1326 infra). If the investor takes up the offer contained in the legislation or treaty, the provisions on access of locally established, but foreign controlled companies become part of the agreement between the parties (see paras. 1325, 1326 infra). This was the form of agreement found in cases such as Vivendi v Argentina,2021 Genin v Estonia,2022 MTD v Chile,2023 Lucchetti v Peru,2024 Aguas del Tunari v Bolivia,2025 National Gas v Egypt,2026 and Eyre and Montrose v Sri Lanka.2027 The Institution Rules require that the agreement on nationality is to be ‘indicated’ at the time of the request (Rule 2(1)(d)(iii)). This information must be supported by documentation (Rule 2(2)). This need to supply documentation at the time of the request is stricter than the requirement for showing the investor’s nationality. Evidence of nationality may be developed at a later stage (see para. 1249 supra; paras. 1303, 1304 infra). Failure to produce documentation concerning the agreement on nationality may lead to the Secretary-General’s refusal to register the request based on a finding that the dispute is manifestly outside the jurisdiction of the Centre in accordance with Arts. 28(3) and 36(3). But once the request is registered, any lack of appropriate documentation at the time of filing is not fatal and the documentation may be provided to the Tribunal.2028

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b) Implicit Agreement The agreement to treat a juridical person with the host State’s nationality as a national of another Contracting State because of foreign control should normally be explicit, at least, if the investor has a contractual relationship with the host State. The Model Clauses recommend an unambiguous stipulation to this effect (see para. 1271 supra) and it seems generally prudent to be as clear as possible also on this point. During the Convention’s drafting, the expectation seems to have been that the agreement on nationality would be expressed in a separate clause. But at one point it was also suggested that consent to proceed under the Convention implied recognition by the host State of the foreign nationality of the other party (History, Vol. II, pp. 450, 582). A comparison of Art. 25(1) with Art. 25(2) of the Convention shows that, while consent to the Centre’s jurisdiction must be ‘in writing’ (see paras. 764–766 supra), 2020 2021 2022 2023 2024 2025 2026 2027 2028

ibid para 83. Vivendi v Argentina, Award (21 November 2000) para 24. Genin v Estonia, Award (25 June 2001) para 328. MTD v Chile, Award (25 May 2004) paras 93–94. Lucchetti v Peru, Award (7 February 2005) para 15. Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 280–281. National Gas v Egypt, Award (3 April 2014) para 132. Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 253–256. See eg Cable TV v St Kitts and Nevis, Award (13 January 1997) para 5.15.

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there is no such requirement for the agreement on nationality. This would indicate that the standard of formality is somewhat lower for the agreement on nationality than for consent.2029 On the other hand, the need to submit documentation on the agreement to the Centre at the time of the request (see para. 1277 supra) would not support the idea that the agreement can be inferred from the general circumstances. Writers on the ICSID Convention have argued that an agreement under Art. 25(2)(b) constitutes an exception to the general rule that a State cannot be brought before an international forum by its own nationals. They assert that such an exception should be admitted only if it is expressed in the most unambiguous terms.2030 The practice of ICSID tribunals shows an increasing readiness to accept an implicit agreement to treat a juridical person as a foreign national because of foreign control. In Holiday Inns v Morocco, the request for arbitration was made also on behalf of four locally organized subsidiaries of the foreign investors, the H.I.S.A. Companies. The local subsidiaries had not been parties to the original agreement containing consent to arbitration. In fact, they had not yet existed at the time. Nor had the rights arising from the original agreement ever been assigned to them (see paras. 681, 682 supra).2031 It was undisputed that there was no express consent to treat them as foreign nationals.2032 The Moroccan Government insisted that ‘clear and express consensus was essential.’2033 The Claimants argued that the four local companies had been set up in the interest and upon the request of the Government. Moreover, the Government had always considered the H.I.S.A. Companies as totally foreign controlled and had treated them as such. It followed that the Government had ‘agreed’ to treat them as nationals of another Contracting State.2034 The Tribunal found that an implied agreement could only be accepted in very special circumstances, which were not present in the case before it. It said: The question arises, however, whether such an agreement must be expressed or whether it may be implied. The solution which such an agreement is intended to achieve constitutes an exception to the general rule established by the Convention, and one would expect that parties should express themselves clearly and explicitly with respect to such a derogation. Such an agreement should therefore normally be explicit. An implied agreement would only be acceptable in the event that the specific circumstances would exclude any other interpretation of the intention of the parties, which is not the case here.2035

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In the particular situation of the case, the parties had no intention at all in this respect. Therefore, the Tribunal held that ‘the H.I.S.A. Companies cannot be Parties to the

2029 See also Lalive (n 53) 140; Hirsch (n 951) 99. 2030 Broches (n 1001) 76; Lalive (n 53) 139–140; Amerasinghe (n 96) 220; Amerasinghe (n 1826) 233–235; Delaume, ‘ICSID Arbitration’ (n 938) 63. 2031 See Lalive (n 53) 137 ff. 2032 ibid 139. 2033 ibid 140. 2034 ibid 141. 2035 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 141). The passage is quoted in Cable TV v St Kitts and Nevis, Award (13 January 1997) para 5.24. See also LETCO v Liberia, Award (31 March 1986) paras 27–30; Millicom v Senegal, Decision on Jurisdiction (16 July 2010) para 97; AHS Niger and Menzies v Niger, Decision on Jurisdiction (13 March 2013) paras 137–145.

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present proceedings before ICSID.’2036 In addition, the Tribunal cited the Model Clauses as indicating that the host State’s willingness to treat a local company as a national of another Contracting State should generally be expressed in the form of a ‘subsidiary agreement.’2037 In Amco v Indonesia, the arbitration clause named the local subsidiary, PT Amco, as a potential party to ICSID proceedings. Also, Amco Asia, the party to the original consent agreement, had transferred its contractual rights to PT Amco (see paras. 648, 649 supra). But the Respondent still argued that there was no jurisdiction with respect to PT Amco since Indonesia had not expressed its agreement to treat it as a national of another Contracting State.2038 The Claimants argued that there was no formal requirement on the way in which such an agreement should be expressed.2039 The Tribunal found that there was indeed no formal requirement as long as the agreement was expressed clearly:

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Nothing in the Convention, and in particular in Article 25, provides for a formal requisite of an express clause stating that the parties have decided to treat a company having legally the nationality of the Contracting State, which is a party to the dispute, as a foreign company of another Contracting State, because of the control to which it is submitted. What is needed, for the final provision of Article 25(2)(b) to be applicable, is (1) that the juridical person, party to the dispute be legally a national of the Contracting State which is the other party and (2) that this juridical person being under foreign control, to the knowledge of the Contracting State, the parties agree to treat it as a foreign juridical person.2040

In this particular case, the Tribunal held that the documents containing consent had indicated in several ways that PT Amco was an Indonesian company under foreign control: PT Amco was referred to as a ‘foreign business.’ There was a provision that all of the capital would represent ‘foreign capital.’ There was to be a gradual transfer of shares to Indonesian citizens or businesses. Therefore, the Government had agreed to the arbitration clause in full knowledge of PT Amco’s foreign control. It followed that the Government had agreed to treat PT Amco as a national of another Contracting State for purposes of the Convention.2041 The Tribunal countered Indonesia’s reference to Holiday Inns by declaring that its own conclusions were actually based on an explicit agreement:

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To refer to the Holiday Inns award – in spite of the same not being a binding precedent in this case – here, this agreement is by no means implied; it is expressed, and clearly expressed, no formal or ritual clause being provided for in the Convention, nor needed in order for such an agreement to be binding on the parties.2042

In Klöckner v Cameroon, the foreign investor had participated in the establishment of a joint venture company, SOCAME, in Cameroon. An Establishment Agreement of 2036 2037 2038 2039 2041 2042

Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Lalive (n 53) 142). Tupman (n 1073) 819. Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 12. ibid para 13. 2040 ibid para 14. ibid para 14(ii). ibid (emphasis in the original). See also Lamm (n 929) 471–472; Rand, Hornick and Friedland (n 1049) 48–49; Sornarajah (n 1129) 74–75.

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1973 between SOCAME and Cameroon contained an ICSID clause. At the time, Klöckner owned 51 percent of SOCAME’s shares and Cameroon 49 percent (see paras. 650–652 supra). The validity of the ICSID clause was challenged, inter alia, because SOCAME was a Cameroonian company. The Tribunal reinforced the approach expressed in Amco by holding that the mere existence of an ICSID arbitration clause indicated an agreement on foreign nationality: The insertion of an ICSID arbitration clause by itself presupposes and implies that the parties were agreed to consider SOCAME at the time to be a company under foreign control, thus having the capacity to act in ICSID arbitration. This is an acknowledgment which completely excludes a different interpretation of the parties’ intent. Inserting this clause in the Establishment Agreement would be nonsense if the parties had not agreed that, by reason of the control then exercised by foreign interests over SOCAME, said Agreement could be made subject to ICSID jurisdiction.2043

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In LETCO v Liberia, the French investors had incorporated the company in Liberia. They owned 100 percent of its capital stock. A Concession Agreement between LETCO and the Government of Liberia provided for dispute settlement by ICSID but did not record an agreement to treat LETCO as a foreign national.2044 The Tribunal confirmed the reasoning of the previous cases by holding that the mere fact of an ICSID clause constituted an agreement to treat LETCO as a national of another Contracting State. To conclude otherwise would have amounted to imputing bad faith to Liberia in that it had never intended to honor the ICSID clause. The Tribunal said: When a Contracting State signs an investment agreement, containing an ICSID arbitration clause, with a foreign controlled juridical person with the same nationality as the Contracting State and it does so with the knowledge that it will only be subject to ICSID jurisdiction if it has agreed to treat that company as a juridical person of another Contracting State, the Contracting State could be deemed to have agreed to such treatment by having agreed to the ICSID arbitration clause. This is especially the case when the Contracting State’s laws require the foreign investor to establish itself locally as a juridical person in order to carry out an investment.2045

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This approach, based purely on logical reasoning, is somewhat mitigated by a subsequent reference to factual evidence. The Tribunal found that Liberia had actually treated LETCO as a foreign national in several contexts. This indicated that, even if there was no express agreement, there was at least an implied agreement.2046 In Vacuum Salt v Ghana, there was also no agreement to treat the locally incorporated company as a foreign national. The Tribunal, citing Model Clause 7 (see para. 1271 supra), suggested that the better practice would be for the parties to at least make some reference to foreign control. But it admitted that the reported cases suggest that such has not been the practice.2047 Ultimately, the Tribunal found the previous cases

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Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 16. LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 349, 350. ibid 352. 2046 ibid 353. Vacuum Salt v Ghana, Award (16 February 1994) para 31.

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distinguishable since in none of them was the issue of the agreement on foreign nationality separated from that of control (see also paras. 1336–1339 infra).2048 In Cable TV v St Kitts and Nevis, the Tribunal found that there was no expressed or implied agreement on consent with the Respondent (see paras. 531, 766 supra). But it indicated that recognition as a national of another State could be inferred from the granting of privileges that are reserved to foreign investors. These were currency convertibility, a tax holiday, recruitment of foreign nationals, as well as customs and duty exemptions.2049 In Millicom v Senegal, the Tribunal found an implicit agreement to treat Sentel, a Senegalese company, as a national of another Contracting State in a telecommunications concession agreement. The agreement provided the option to refer disputes to ICSID, which was found to be sufficient to establish Senegal’s consent.2050 In conjunction with this, the Tribunal found that Senegal was aware that Sentel was under foreign control from the circumstances of its tender and negotiations leading up to the concession, and the fact that the successful bidder, Millicom, was required to set up Sentel locally in order to operate. The Tribunal cited LETCO with approval for the conclusion that the reference to ICSID jurisdiction in the concession agreement with Sentel was an implied agreement that the second sentence of Art. 25(2)(b) applied.2051 An implicit agreement to treat a locally incorporated company as a national of another Contracting State was also found to arise from an investment agreement in AHS Niger and Menzies v Niger.2052 Citing LETCO and Millicom with approval, the Tribunal found evidence of such an agreement in the offer to refer disputes to ICSID.2053 In addition, by their conduct, the parties, and in particular Niger, had implicitly recognized that AHS Niger was a foreign national,2054 generating legitimate expectations on the part of AHS Niger and its majority shareholders that AHS Niger would be considered a foreign national, and enjoy the benefits inherent in this condition with respect to its investments in Niger.2055 The fact that AHS Niger was established as a local entity did not contradict this conclusion, but was explained by the State’s interest that local private shareholders and the State would take minority stakes in the company.2056 Tribunals’ willingness to find an implicit agreement should not induce drafters of ICSID clauses to be careless about the investors’ nationality requirements. Imprecise clauses are liable to lead to complications and additional costs. A clear and unambiguous stipulation on nationality along the lines of Model Clause 7 (see para. 1271 supra) must be recommended strongly. Even so, the cases on the second clause of Art. 25(2)(b) demonstrate that the tribunals have been generous in construing an agreement on foreign nationality. Basically, all that is needed is an agreement to consent to ICSID’s jurisdiction concluded with a national of the host State. Since the consent clause is only valid if the Convention’s nationality 2048 2049 2050 2051 2052 2053 2055

ibid. Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 5.17, 5.18. Millicom v Senegal, Decision on Jurisdiction (16 July 2010) para 97. ibid paras 113–114. AHS Niger and Menzies v Niger, Decision on Jurisdiction (13 March 2013) para 148. ibid paras 137, 139, 146. 2054 ibid para 143. ibid para 144. 2056 ibid para 145.

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requirements are met, the necessary agreement on nationality was inferred. The effect of this practice is that the standards for an implicit agreement on nationality are no stricter for corporations with the host State’s nationality than for other corporations (see paras. 1204, 1205 supra). This result has drawn criticism from authors who insist that the agreement on nationality under Art. 25(2)(b) is designed as a distinct requirement in addition to the consent needed under Art. 25(1). Therefore, according to these authors, the satisfaction of the second requirement should not simply be inferred from the satisfaction of the first.2057 Not every expression of consent to jurisdiction can in and of itself serve as a basis for the conclusion that the host State has acknowledged the investor’s foreign nationality. This conclusion only makes sense where the investor and the host State have been in immediate contact and have entered into a direct agreement. The conclusion that there is an implied agreement on nationality, without more, is impossible where consent to jurisdiction is based on the host State’s legislation or on a treaty. If the investor simply accepts a standing offer by the host State to submit to jurisdiction, no agreement to treat that particular investor as a foreign national because it is foreign controlled can be imputed to the host State.2058 A company incorporated in the host State will not qualify as an investor entitled to protection under investment treaties or laws, and will not be able to bring a claim, unless there is additional evidence of an agreement to treat it as a foreign national.2059 The question of a need for an agreement on nationality for local subsidiaries should also be seen from another perspective. ICSID tribunals have developed a practice of looking beyond the investors’ subsidiaries, and of granting party status to parent companies, even if the latter are not named in the consent agreement. In a number of cases the controlling foreign owners were given standing despite the fact that they were not the formal parties to the ICSID clauses (see paras. 643–678 supra). This practice reduces the significance of an agreement to treat the local subsidiary as a foreign national. If the foreign investors controlling the local company are given direct access, ICSID’s jurisdiction no longer depends on the existence of an agreement to treat the subsidiary as a foreign national. Recognition of shareholding as investments in most investment protection treaties has led many parent companies to bring claims in their own names, as shareholders (see para. 284 supra). This course of action is often preferred over proceedings brought by a locally incorporated company under Art. 25(2)(b). Indeed, the Tribunal in CMS v Argentina observed that the offer of treaty protection for non-controlling or minority shareholders can achieve a similar result to the mechanism in Art. 25(2)(b).2060 In Sempra v Argentina, the alternative to the US-incorporated shareholder proceeding as claimant was said to have been preferred over designating the Argentine company as a 2057 Hirsch (n 951) 99–100. See also Stephen Toope, Mixed International Arbitration: Studies in Arbitration between States and Private Persons (Grotius 1990) 228; Tupman (n 1073) 834–835. 2058 See also Amerasinghe (n 1826) 235. 2059 See eg Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 8. 2060 CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 51. See also Anthony Sinclair, ‘ICSID’s Nationality Requirement’ in Todd Weiler (ed), Investment Treaty Arbitration and International Law (Juris 2008) 85.

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claimant because it was thought to simplify the requirements for registration of the request for arbitration.2061 Occasionally, cases also involve claims brought by joint claimants: the locally incorporated company having standing based on an agreement to treat it as foreign because it is foreign controlled, and the foreign shareholders themselves pursuant to an applicable treaty provision for the protection of shareholders as investors. Thus, in Vivendi v Argentina, MTD v Chile, Lucchetti v Peru, Millicom v Senegal, and Eyre and Montrose v Sri Lanka, for instance, the shareholder Claimants had standing under the respective BITs as foreign investors by virtue of their shareholdings, while the second Claimants did so as a company incorporated locally but controlled by the former.2062 In AHS Niger and Menzies v Niger, jurisdiction arose from an investment agreement and Niger’s investment law, with an implicit agreement to treat the first Claimant as a national of another Contracting State arising from the investment agreement.2063 The situation involves no contradiction. As the Sempra Tribunal explained:

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It is conceivable that where various investor companies resort to arbitration, some can do so as shareholders and others as companies of the nationality of the State that is a party to the dispute, on the basis of the various corporate arrangements and control structures.2064

The conferral by investment treaties or foreign investment legislation upon the foreign shareholders in local companies of both substantive protection and a direct access to arbitration for harm suffered by the local companies (see para. 284 supra) provides an alternative, or supplementary means of recourse, to the mechanism under Art. 25(2)(b).

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c) Identification of the Other Contracting State Art. 25(2)(b) does not indicate whether the agreement on nationality must relate to a particular foreign State. Institution Rule 2(1)(d) would suggest that the agreed nationality need not be specified. Whereas the investor’s primary nationality under Art. 25(2)(a) and under the first clause of Art. 25(2)(b) must be indicated in the request (see paras. 602–609 supra), the nationality to which the host State has agreed with respect to a juridical person of its own nationality need not be identified. Institution Rule 2 provides in relevant part: (1) The request shall: ... (d) indicate with respect to the party that is a national of a Contracting State: (i) its nationality on the date of consent; and (ii) if the party is a natural person:

2061 Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 43. 2062 Vivendi v Argentina, Award (21 November 2000) para 24; MTD v Chile, Award (25 May 2004) paras 93, 94; Lucchetti v Peru, Award (7 February 2005) para 15; Millicom v Senegal, Decision on Jurisdiction (16 July 2010) paras 97, 113–114; Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 253–256. 2063 AHS Niger and Menzies v Niger, Award Decision on Jurisdiction (13 March 2013) para 148. 2064 Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 44.

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schreuer’s commentary on the icsid convention (A) his nationality on the date of the request; and (B) that he did not have the nationality of the Contracting State party to the dispute either on the date of consent or on the date of the request; or (iii) if the party is a juridical person which on the date of consent had the nationality of the Contracting State party to the dispute, the agreement of the parties that it should be treated as a national of another Contracting State for the purposes of the Convention.

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It will be noted that, whereas Institution Rule 2(1)(d)(i) and (ii) refer to ‘its nationality’ and ‘his nationality’ respectively, Rule 2(1)(d)(iii) speaks of ‘a national of another Contracting State’ in more general terms. However, if the nationality(ies) of the foreign controller(s) is (are) not specified in the request for arbitration, the ICSID Secretariat will require the requesting party to provide this information before registering the request. Model Clause 7 (see para. 1271 supra) suggests that the State in question should be actually named in the agreement. This is clearly preferable, and is more likely to forestall subsequent uncertainties and challenges. Therefore, the foreign State should be clearly identified. There should be a statement that the local company is controlled by nationals of that State and that, consequently, the local company shall be treated as a national of that State. If the local company is jointly controlled by nationals of several Contracting States, the controlling nationalities may be listed, and the agreement may specify that the local company is to be regarded as a national of these States.2065 Model Clause 7 is designed to accommodate controllers of several nationalities and treatment as a national of several States. Some agreements on nationality contain all the relevant details.2066 Others merely state an agreement that the Convention’s nationality requirements are fulfilled (see paras. 1312, 1313 infra). An even less precise formula states that the investor ‘shall be deemed to be a national of that state of which it or its respective controlling shareholder is a national.’2067 Clauses thus lacking in precision may lead to complications. The identity of the controlling interest, the nationality of the controllers and the status of their home States as Contracting States may all have to be determined before jurisdiction ratione personae can be established. ICSID tribunals have also shown flexibility on this point. In Holiday Inns v Morocco, the Government argued that an agreement on nationality had to be not only clear and express (see para. 1281 supra), but that it also had to be specific as to the local company’s other nationality.2068 In that case, the Tribunal does not appear to have reached this question. In Amco v Indonesia (see paras. 1284–1287 supra), the Respondent also argued that there was no formal and express indication as to the Contracting State in respect of which the parties would have agreed to treat PT Amco as a national. In Indonesia’s 2065 See Amerasinghe, ‘Submissions’ (n 26) 228; Amerasinghe (n 96) 219–220; Broches (n 1001) 76–77; Delaume (n 120) 176; Szasz (n 1825) 20. 2066 For examples, see Delaume (n 120) 176–177. 2067 See Art. 7.3 of the Participation Agreement of 12 February 1982 between New Zealand and Mobil Oil NZ Ltd, cited in Attorney-General v Mobil Oil NZ Ltd, New Zealand High Court (1 July 1987) (1997) 4 ICSID Reports 123. 2068 See Lalive (n 53) 140.

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view, such an indication was indispensable for a valid agreement under Art. 25(2)(b). The Government also claimed that this lack of a clear and formal indication resulted in ignorance by Indonesia of the nationality of the persons who controlled PT Amco. The Claimants opposed this argument by saying that a formal indication of the nationality based on control in the arbitration clause itself was not needed. In addition, the Respondent knew PT Amco’s situation in this respect.2069 The Tribunal rejected Indonesia’s argument:

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[T]he Tribunal does not think that an objection to the binding character of the arbitration clause can be drawn, in the circumstances of the case, from the fact that the country of which the controlling shareholders of PT Amco were the nationals was not expressly mentioned in said clause, nor from the fact, alleged by the Respondent, that it did effectively not know which this country was. Taking first the legal point of view, and the contents of the agreement itself, the Tribunal will state, here again, that there is no provision in the Convention imposing a formal indication, in the arbitration clause itself, of the nationality of the foreign juridical or natural persons who control the juridical person having the nationality of the Contracting State, party to the dispute. On the other hand, in the instance case, that nationality was clearly indicated in the Application.2070

After citing several sentences from the investment application, which all pointed towards United States control, the Tribunal concluded:

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It thus appears that the nationality of the controller of PT Amco, the Indonesian juridical person to be established, was repeatedly and expressly stated in the Application to which the Indonesian Government agreed; under the circumstances, lacking any formal requirement in this respect in the Convention, there was no need for a particular statement of said nationality in the arbitration clause itself.2071

The Tribunal added, by way of a caveat, that the case ‘could have been different if there would have been fraud or misrepresentation on this issue,’ but found that this was not the case.2072 In SOABI v Senegal, a Belgian national, acting on behalf of a corporation named Flexa, incorporated SOABI in Senegal in September 1975. All of the shares in SOABI were owned by Flexa, which was itself controlled by a Belgian national. In the papers filed for the incorporation, the head office of Flexa was stated to be in Geneva, although Flexa was, in fact, a Panamanian company.2073 Switzerland was a party to the ICSID Convention, but Panama was not.2074 In November 1975, SOABI and Senegal entered into an Establishment Agreement containing an ICSID clause. The ICSID clause contained the following sentence:

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Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 12–13. ibid para 14(iii). 2071 ibid. ibid. See also Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 127–132. SOABI v Senegal, Award (25 February 1988) fn 1 to para 2.13. Panama since became a Contracting State to the Convention in May 1996.

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schreuer’s commentary on the icsid convention To this end, the Government agrees that the requirements of nationality set out in Article 25 of the IBRD Convention shall be deemed to be fulfilled.2075

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The Tribunal found this sentence somewhat laconic, but perfectly clear in its meaning. It meant that, notwithstanding its Senegalese nationality, SOABI could be deemed to be a national of another Contracting State by reason of its being controlled by foreign interests.2076 It reached the result that SOABI was indirectly controlled by nationals of Belgium, a Contracting State (see paras. 1333, 1352–1353, 1373, 1385 infra). The Government argued that it had been misled by the description of Flexa as a company with its head office in Geneva. This misrepresentation had induced the Government to take positions it would not have taken had Flexa’s Panamanian nationality been known to it. The Tribunal rejected this argument. It found that it had been evident that Flexa was merely a corporation of convenience. SOABI’s capital could not possibly have come from Flexa’s funds. Therefore, the Tribunal could not accept that Flexa’s nationality could have affected the Government’s consent to ICSID’s jurisdiction.2077 A declaration by the Tribunal’s President (A. Broches) confirmed the position that it is not necessary to identify the agreed nationality of the locally incorporated company: Nor is it necessary that the compromissory clause indicate the nationality that is ascribed to the locally incorporated company. It is up to the party who contests the effect of its intention ‘to deem the requirement of nationality set out in Article 25 as fulfilled’ to prove that that requirement could not be considered as having been fulfilled in accordance with the Convention.2078

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In TANESCO v IPTL, it was sufficient that the parties had agreed to treat IPTL as a foreign-controlled entity, unless the amount of the voting stock in IPTL held by nonTanzanian investors should decrease to less than 50 percent.2079 Autopista v Venezuela was concerned with a claim brought by a Venezuelan company, which was immediately owned by Icatech, a corporation having United States nationality, which in turn was owned by ICA Holding, a Mexican company. The parties’ agreement to treat the Claimant as a foreign national was conditional upon it becoming controlled by a national of a Contracting State. This was the case because, when the agreement was signed, the Claimant was directly owned by a Mexican corporation, and Mexico was not, at the time, a Contracting State. The Tribunal found this conditional agreement sufficiently certain to meet the requirements of Art. 25(2)(b).2080 In Caratube and Hourani v Kazakhstan, the Tribunal had to consider whether the locally incorporated company Caratube was controlled by nationals of another Contracting State for the purposes of Art. 25(2)(b). The Tribunal was satisfied by Mr. Hourani’s legal ownership of 92 percent of the company’s shares, as well as his prior

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SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 23. ibid paras 30, 31. ibid paras 44–46. See also ibid, Dissenting Opinion Mbaye (25 February 1988) paras 60–65, 74–77. SOABI v Senegal, Declaration Broches (1 August 1984) para 6 (footnote omitted). TANESCO v IPTL, Award (12 July 2001) para 10. Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 83, 89–91, 117, 142.

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service as the company’s director, as evidence of Mr. Hourani’s control.2081 As Mr. Hourani was a US national, this element of the test was met. However, the Tribunal in passing expressed the view that even if the actual controller was not Mr. Hourani, but somebody else, provided that person or persons were not a national of Kazakhstan, this was insufficient ‘to rebut the presumption of “foreign control” based on Mr. Devincci Hourani’s undisputable legal capacity to control’ the company.2082 It follows from the decisions in Amco and in SOABI that an identification of the nationality of the controlling interest in the arbitration clause is not necessary. In Amco, the Tribunal found that the Government had been informed of that nationality and that this knowledge was sufficient. TANESCO and Autopista confirm that a conditional agreement will suffice. But SOABI went further in holding that even incorrect information on nationality did not affect the validity of the consent clause as long as it could not be shown that the false information had influenced the Government’s decision to give its consent to ICSID’s jurisdiction.

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d) Legislation and Treaties Some national investment laws providing for ICSID’s jurisdiction extend access to the Centre to local companies that are under foreign control.2083 The legislative techniques employed for this purpose are quite diverse. Some laws simply grant the right to require ICSID settlement to corporations with a majority of foreign capital.2084 A more elaborate clause was contained in the Investment Code of Zaire, 1986, which provided in Art. 46 after referring to the ICSID Convention:

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In its request for admission to the General or Conventional Regime or Free Zone, or later by a separate instrument, the investor gives its consent to such arbitration pursuant to the said agreement, not only in its own name but in that of any Zairean company which it controls and by whose intermediary the investment is made. It accepts, moreover, that any such company shall be considered a ‘National of another Contracting State.’2085

Other investment laws do not open access to ICSID for foreign controlled local companies directly, but offer definitions of foreign investors in their definitions section that include locally established legal persons that are controlled by a majority of foreign capital.2086 A number of BITs provide that companies constituted in one State, but controlled by nationals of the other State shall be treated as nationals of the other State for purposes of Art. 25(2)(b).2087 For instance, Art. 8(2) of the 2008 UK Model Agreement runs as follows:

2081 Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 622. 2082 ibid. 2083 See generally Shan (n 36); Hepburn (n 307). 2084 See Central African Republic – Code of Investments (1988) Art. 30; Chad – Décret N◦ 446-PR-MCI-87 fixant la procédure d’octroi des avantages du Code des Investissements (1987). 2085 Zaire/DR Congo – Investment Code (1986) Art. 46. See also Sri Lanka – Greater Colombo Economic Commission Law (1978) s 26(2)(b); Senegal – Law Establishing the Industrial Free Zone of Dakar (1974) Art. 31. 2086 Tanzania – Investment Investment (Promotion and Protection) Act (1990) s 2; Mozambique – Law on Investment (1993) Art. 1(1)(q); Uganda – Investment Code (1991) s 10(1)(b). 2087 Dolzer and Stevens (n 331) 142–144; Parra (n 31) 324; Peters (n 1271) 144. See also Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 107–115; Caratube v Kazakhstan, Award

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schreuer’s commentary on the icsid convention A company which is incorporated or constituted under the law in force in the territory of one Contracting Party and in which before such a dispute arises the majority of shares are owned by nationals or companies of the other Contracting Party shall in accordance with Article 25(2)(b) of the Convention be treated for the purposes of the Convention as a company of the other Contracting Party.2088

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The Argentina–United States BIT uses the following formula in Art. VII(8): For purposes of an arbitration held under paragraph 3 of this Article, any company legally constituted under the applicable laws and regulations of a Party or a political subdivision thereof but that, immediately before the occurrence of the event or events giving rise to the dispute, was an investment of nationals or companies of the other Party, shall be treated as a national or company of such other Party in accordance with Article 25(2)(b) of the ICSID Convention.2089

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Many Dutch2090 and Swiss2091 BITs also provide that a legal person that is a national of one State, but is controlled by nationals of the other State shall be treated as a national of the latter in accordance with Art. 25(2)(b). Art. 1(2)(c) of the Argentina–France BIT refers to a legal person ‘effectively controlled’ by nationals of the other State. It applies to: Any body corporate effectively controlled, directly or indirectly, by nationals of one Contracting Party, or by bodies corporate having their registered office in the territory of one Contracting Party and constituted in accordance with that Party’s legislation.2092

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Multilateral instruments containing ICSID consent clauses (see paras. 863–874 supra) also deal with the problem of locally incorporated, but foreign controlled companies. One solution is to give standing not to the company established in the

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(5 June 2012) para 339; Burimi v Albania, Award (29 May 2013) para 114; National Gas v Egypt, Award (3 April 2014) para 100 (noting that the Egypt–UAE BIT (1997) contains such a provision); Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 253–256. UK Model IPPA (2008) Art. 8(2) (Alternative I). See also Turkey–United Kingdom BIT (signed 15 March 1991, entered into force 22 October 1996) Art. 8(2); Nepal–United Kingdom BIT (signed and entered into force 2 March 1993) Art. 8(1); Estonia–United Kingdom BIT (signed 12 May 1994, entered into force 16 December 1994) Art. 8(2). For analysis, see Wena Hotels v Egypt, Decision on Jurisdiction (29 June 1999) (2002) 41 ILM 881, 888. See also Czechoslovakia–United States BIT (signed 22 October 1991, entered into force 19 December 1992) Art. VI(5); Romania–United States BIT (signed 28 May 1992, entered into force 15 January 1994) Art. VI(8). See also Pamela Gann, ‘The US Bilateral Investment Treaty Program’ (1985) 21 Stanford JIL 373, 419, 452. See also Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 213 (applying the clause in the Argentina–United States BIT). Dolzer and Stevens (n 331) 214. See also, Argentina–Netherlands BIT (n 1896) Art. 10(6); Netherlands–Lithuania BIT (n 1896) Art. 9. On the interpretation of this aspect of the Argentina– Netherlands BIT, see TSA Spectrum v Argentina, Award (19 December 2008) paras 155–162. Art. 1(b) of the 2019 Dutch Model BIT brings a refinement, restricting the definition of nationals in respect of juridical persons: ‘investor means with regard to either Contracting Party: . . . (ii) any legal person constituted under the law of that Contracting Party and having substantial business activities in the territory of that Contracting Party; or (iii) any legal person that is constituted under the law of that Contracting Party and is directly or indirectly owned or controlled by a natural person [having the nationality of that Contracting Party] or by a legal person as defined in (ii).’ Dolzer and Stevens (n 331) 224, 225. See also Jamaica–Switzerland BIT (n 1895) Art. 9(7). A side letter to the BIT specifies several forms of control. See also Vivendi v Argentina, Award (21 November 2000) para 24, fn 6 and ibid, Decision on Annulment (3 July 2002) paras 47–50.

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host State, but to the controlling investor on behalf of the company. Art. 1117 of the NAFTA2093 provided that an investor may submit to arbitration a claim against the host State on behalf of an enterprise constituted or organized under the host State’s law, which the investor owns or controls directly or indirectly.2094 By contrast, the ECT of 1994 adopts the ICSID Convention’s classical solution in Art. 26(7): An Investor other than a natural person which has the nationality of a Contracting Party party to the dispute on the date of the consent in writing referred to in paragraph (4) and which, before a dispute between it and that Contracting Party arises, is controlled by Investors of another Contracting Party, shall for the purpose of article 25(2)(b) of the ICSID Convention be treated as a ‘national of another Contracting State’ and shall for the purpose of article 1(6) of the Additional Facility Rules be treated as a ‘national of another State.’2095

The second clause of Art. 25(2)(b) requires an agreement between the parties to the dispute, that is, the host State and the foreign investor. A provision in a treaty or in national legislation does not, without more, amount to an agreement between the parties to the dispute.2096 A clause in a treaty or in national legislation providing for ICSID’s jurisdiction is no more than an offer to the investor, which may be accepted by the latter (see paras. 814–824, 850–862 supra). The proviso that a local company, because of foreign control, would be treated as a national of another Contracting State is part of the terms of the offer made by the host State. When the offer to submit disputes to ICSID is accepted by the investor, that proviso becomes part of the consent agreement between the parties to the dispute (see also para. 1210 supra), although it will not displace a tribunal’s duty to confirm to its own satisfaction that foreign control in fact exists. In Aguas del Tunari v Bolivia,2097 Pan American v Argentina,2098 Micula v Romania I,2099 and Eyre and Montrose v Sri Lanka,2100 among others, the tribunals upheld jurisdiction, often with little discussion, based on investment treaty provisions by which the Contracting Parties agreed to treat locally incorporated juridical persons as nationals of the other Contracting State. Where there is a direct contractual relationship between the investor and host State, an additional clarification between the parties to the effect that the investor fulfills the conditions under the second clause of Art. 25(2)(b) would not be amiss. If a dispute should arise over whether the condition of foreign control has, in fact, been met, a specific admission by the parties would strengthen the case in favor of foreign control and would, at the least, create a presumption to that effect (see paras. 1330, 1337–1339 infra).

2093 See NAFTA (n 33) Art. 1117. See also US Model BIT (2012) Art. 24(1)(b); USMCA (n 338) Art. 14.D.3(1)(b). 2094 See also Waste Management v Mexico II (AF), Award (30 April 2004) paras 77–85. 2095 See ECT (n 33) Art. 26(7). 2096 See also Delaume, ‘Le Centre’ (n 163) 792–793; Laviec (n 1356) 283. 2097 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 323. 2098 Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 213. 2099 Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 107–115. 2100 Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 253–256.

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The Convention states that the agreement on nationality shall be ‘because of foreign control.’ These words indicate a causal connection between control and the agreement and suggest that control is an objective requirement that cannot be replaced by an agreement. This requirement must be met whether jurisdiction is asserted based on a contract, national legislation, or an investment treaty. In the cases, tribunals have found this requirement to be met based on both express and implicit evidence of such an agreement. During the Convention’s drafting, the emphasis shifted from the purely objective criterion of control in the Preliminary Draft to a purely consensual element of agreement on nationality in the First Draft (History, Vol. I, pp. 122, 124). Eventually, the objective requirement of control and the consensual requirement of an agreement were combined into the composite formula of ‘because of foreign control, the parties have agreed’ (see paras. 1263, 1264 supra). The history of this provision would suggest that the existence of foreign control is a necessary element, which must exist independently of the terms of any agreement. That conclusion has been put in some doubt in Burimi v Albania, however, in which the Tribunal had to consider its jurisdiction over a locally incorporated entity, Eagle Games.2101 The Tribunal appears to have suggested that, while the test under Art. 25(2)(b) second sentence is objective, the parties may still derogate from it, through a specific agreement. Although the Tribunal did not have to decide the point, because there was no such specific agreement, the Tribunal considered that: The requirement of ‘foreign control’ is not expressly defined in the ICSID Convention. The wording of the second clause of 25(2)(b) allows the parties ‘to decide under what circumstances a company could be treated as a ‘national of another Contracting State.’ Accordingly, the Tribunal must consider whether the parties to this dispute have agreed that Eagle Games is under foreign – in this case, Italian – control and thereby qualifies as a national of Italy.2102

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Commentators on the Convention vary as to the emphasis they put on the objective requirement of foreign control. But there seems to be consensus that control is a factual element that may be examined by a tribunal independently of the agreement on nationality.2103 On the other hand, it has been argued that an agreement on nationality would create a strong presumption in favor of foreign control that should be discarded only if it amounts to an unreasonable selection of nationality that cannot be sustained by

2101 Burimi v Albania, Award (29 May 2013) paras 97–122. 2102 ibid para 112 (emphasis in the original). 2103 Gaillard (n 122) 140; Hirsch (n 951) 102. See also TSA Spectrum v Argentina, Award (19 December 2008) para 142. In this case, the majority declined to be bound by a protocol to the Argentina– Netherlands BIT indicating the facts that should be accepted as evidence of foreign control. See also Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Annulment (11 May 2010) para 41; Caratube v Kazakhstan, Award (5 June 2012) paras 336–337; National Gas v Egypt, Award (3 April 2014) paras 131, 135, 149 (which also cited the Second Edition of this Commentary); Société Industrielle des Boissons v Guinea, Award (21 May 2014) para 103; Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 256–258.

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any rational interpretation of the facts.2104 Agreement to treat a local company as foreign may be conditional upon foreign control arising at some point in the future,2105 or foreign control becoming vested in a national of another Contracting State.2106 ICSID tribunals have invariably examined the actual existence of foreign control over the local company and the nationality of that controller.2107 In Amco v Indonesia, the Tribunal, after considering the parties’ agreement on nationality (see paras. 1284–1287, 1308–1311 supra), proceeded to examine the foreign control over PT Amco. By looking at the nationality of the immediate controller, Amco Asia (see paras. 1371–1372 infra), it came to the conclusion that the locally incorporated company was under US control.2108 In Klöckner v Cameroon (see para. 1288 supra), the Tribunal pointed out that when the agreement containing the ICSID clause was concluded between the local joint venture company, SOCAME, and the host State, ‘SOCAME was a Cameroonian company, but subject to the majority control of foreign interests.’ This, to the Tribunal, was clear from another agreement that stipulated that Klöckner and its European partners would subscribe to 51 percent of SOCAME’s capital.2109 In SOABI v Senegal, much of the debate on jurisdiction turned on whether the local company was actually controlled by Panamanian, by Swiss, or by Belgian interests. Flexa, a Panamanian company, was the immediate owner of all of SOABI’s shares. But Panama was not a Contracting State. Flexa’s nationality was stated as Swiss, but this statement appears to have been incorrect (see paras. 1312–1314 supra). Eventually, the Tribunal found that control over Flexa was exercised by nationals of Belgium, a Contracting State, and that, consequently, SOABI was under the indirect foreign control of nationals of a Contracting State (see para. 1373 infra).2110 A Declaration of the Tribunal’s President (Mr. Broches) pointed out that where there was an agreement that the nationality requirements were fulfilled, the party that contested the effect of this agreement had the burden of proving that the requirement of control was not, in fact, fulfilled (see para. 1314 supra).2111 In LETCO v Liberia, the Tribunal had no problem in establishing that the locally incorporated company was under French control at the time of consent to ICSID’s jurisdiction (see para. 1386 infra). The Tribunal also went into the question of the relationship between foreign control and the agreement on nationality (see paras. 1289, 1290 supra). It said: 2104 Amerasinghe (n 1826) 232–233, 235, 237–238, 240; Broches (n 159) 361; Szasz (n 1825) 20, cited with approval in Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 114; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 281 (citing the First Edition of this Commentary). 2105 TANESCO v IPTL, Award (12 July 2001) para 10. 2106 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 83, 89–91, 117, 142. The Tribunal in TSA Spectrum v Argentina declined jurisdiction where control was ultimately vested in a natural person having the nationality of the host State, see Award (19 December 2008) para 162. 2107 For a discussion of whether the Claimant in Santa Elena v Costa Rica was in fact controlled by US nationals, see Charles N Brower and Jarrod Wong, ‘General Valuation Principles: The Case of Santa Elena’ in Weiler (n 18) 754. The Award dated 17 February 2000 does not explore these facts. 2108 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(iii). 2109 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 15–16. 2110 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 35–38. 2111 ibid, Declaration Broches (1 August 1984) para 6.

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schreuer’s commentary on the icsid convention Clearly the Convention’s use of the word ‘because’ in Article 25(2)(b) establishes a need to show that the agreement to treat LETCO as a French national was motivated by the fact that it was under French control. However, in most instances the virtually insurmountable burden of proof in showing what motivated a government’s actions might well frustrate the purpose of the Convention. Therefore, unless circumstances clearly indicate otherwise, it must be presumed that where there exists foreign control, the agreement to treat the company in question as a foreign national is ‘because’ of this foreign control. In the case at hand, there is no indication whatsoever that an agreement to treat LETCO as a French national resulted from anything other than the fact that it was under French control and we must therefore conclude that the necessary causal relationship exists.2112

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Read together with the Tribunal’s reasoning on an implicit agreement on nationality (see paras. 1289, 1290 supra), this means that all that is required for purposes of Art. 25(2)(b) is the objective fact of foreign control over the local company, the host State’s awareness of this objective fact, and an otherwise valid consent to ICSID’s jurisdiction. The host State’s agreement to treat the local company as a national of another Contracting State, and the causal nexus expressed in the word ‘because’ may then be construed from these elements. That approach is manifested in the later cases too.2113 In Vacuum Salt v Ghana, the factual question of foreign control turned out to be decisive. In this case, there had been a Lease Agreement containing an ICSID clause.2114 Vacuum Salt was a corporation organized under the 1963 Companies Code of Ghana.2115 Ghana objected to ICSID’s jurisdiction on the ground that the Claimant ‘essentially is a Ghanaian Company’ that ‘is not foreign controlled and there has been no agreement between the parties that it should be treated as a national of another contracting state.’2116 The Tribunal noted the practice of previous tribunals to infer an agreement on nationality from the very existence of an ICSID arbitration clause (see paras. 1278–1302 supra).2117 But it found that these cases were distinguishable from the case before it since in each of them ‘the objective existence of foreign control was presumed.’2118 The Tribunal’s decision had to turn on whether or not ‘foreign control’ existed as a matter of fact on the date of consent: [T]he parties’ agreement to treat Claimant as a foreign national ‘because of foreign control’ does not ipso jure confer jurisdiction. The reference in Article 25(2)(b) to ‘foreign control’ necessarily sets an objective Convention limit beyond which ICSID

2112 LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 352. 2113 See also eg Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 24; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 213; Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 113–114; El Paso v Argentina, Award (31 October 2011) para 182; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 195; Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 261–262. 2114 Vacuum Salt v Ghana, Award (16 February 1994) para 2. 2115 ibid para 28. 2116 ibid para 12. 2117 ibid para 31. 2118 ibid. See also Aron Broches, ‘Denying ICSID’s Jurisdiction: The ICSID Award in Vacuum Salt Products Limited’ (1996) 13 J Int’l Arb 21, 25–26.

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jurisdiction cannot exist and parties therefore lack power to invoke same no matter how devoutly they may have desired to do so.2119

After citing authors to the effect that the parties’ agreement on foreign nationality raised a strong presumption that there was adequate foreign control (see para. 1330 supra), the Tribunal continued:

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Nevertheless the words ‘because of foreign control’ have to be given some meaning and effect. These words are clearly intended to qualify an agreement to arbitrate and the parties are not at liberty to agree to treat any company of the host State as a foreign national: They may only do so ‘because of foreign control.’ The Tribunal concludes that the existence of consent to an arbitration clause such as paragraph 36(a) of the 1988 Lease Agreement in circumstances such that jurisdiction could be premised only on the second clause of Article 25(2)(b) raises a rebuttable presumption that the ‘foreign control’ criterion of the second clause of Article 25(2)(b) has been satisfied on the date of consent.2120

A review of the relevant facts and circumstances (see paras. 1387–1390 infra) led the Tribunal to conclude that this presumption was rebutted. The factual requirements of the second clause of Art. 25(2)(b) were not satisfied on the date of consent. The Tribunal concluded that it did ‘not find here indications of foreign control of Vacuum Salt such as to justify regarding it as a national of an ICSID Contracting State other than Ghana.’2121 To assume jurisdiction under these circumstances would have been contrary to the purpose of the Convention, which was designed for the settlement of disputes between States and nationals of other States. In a similar vein, in TSA Spectrum v Argentina, the Tribunal held that the second sentence of Art. 25(2)(b) establishes an objective test. In that case, the Tribunal concluded that it was required to pierce the layers of ownership of a locally incorporated entity in order to ascertain whether its ultimate owner was a national of the host State. In the Tribunal’s words, ‘the existence and materiality of this foreign control have to be objectively proven.’2122 The Tribunal ultimately rejected jurisdiction because the Claimant, an Argentine company, was ultimately owned by an Argentinian national. In Cable TV v St Kitts and Nevis, the Tribunal declined jurisdiction since the Respondent had not consented to jurisdiction (see paras. 531, 766, 1292 supra). But it still examined the question of control over the locally incorporated companies concluding that ownership of the Claimant companies by nationals of the United States had been established for purposes of Art. 25(2)(b).2123 Although the parties in TANESCO v IPTL at no stage contested jurisdiction, the Tribunal nevertheless independently observed that at all times IPTL, a national of the Contracting State to the dispute, had been 70 percent owned and controlled by nationals of Malaysia.2124

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Vacuum Salt v Ghana, Award (16 February 1994) para 36. ibid para 38. 2121 ibid para 54. TSA Spectrum v Argentina, Award (19 December 2008) para 147. Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 5.16–5.22. TANESCO v IPTL, Award (12 July 2001) para 13.

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In Autopista v Venezuela, the immediate controller of the Claimant was a US company that was controlled by a Mexican company. Venezuela argued that the Claimant was not, in fact, controlled by nationals of the United States, a Contracting State, but was in fact controlled by nationals of Mexico, which is not a Contracting State. The Tribunal did not accept the premise that Art. 25(2)(b) of the Convention requires effective control. It said that Art. 25(2)(b) ‘does not specify the nature, direct, indirect, ultimate or effective, of the foreign control.’2125 It also noted that the parties had agreed in their contract that direct shareholding would suffice as evidence of control.2126 Where an agreement for the purposes of Art. 25(2)(b) second sentence is founded upon an offer of consent in an investment treaty, tribunals have readily found the host State’s agreement to treat the local company as a national of another Contracting State. That such an agreement was ‘because’ of foreign control is routinely found to be satisfied by establishing objectively that the local company was indeed foreign controlled at the date of the consent to submit the dispute to arbitration, typically being the date of filing the request for arbitration. Thus, in Micula v Romania I, the standing of three Romanian companies under Art. 25(2)(b) was satisfied by establishing that the majority of their shares were held by the Micula brothers, who had Swedish nationality.2127 In Eyre and Montrose v Sri Lanka, Montrose, a Sri Lankan company, came within the second sentence in Art. 25(2)(b) by virtue of the extension of the offer to arbitrate in Art. 8(2) of the Sri Lanka–United Kingdom BIT, and because the majority of shares in it were ultimately controlled by a UK national, Mr. Eyre. The Tribunal was satisfied by evidence of Mr. Eyre’s indirect ownership of Montrose through a chain of holding companies.2128 By contrast, in Caratube v Kazakhstan, the Tribunal was not satisfied that Mr. Hourani, who held 92 percent of the shares in the locally incorporated company, did objectively exercise ‘actual control’ over it.2129 The Tribunal stated that it was ‘not satisfied that a legal capacity to control a company, without evidence of an actual control’ was enough for the purposes of Art. 25(2)(b).2130 That statement should be understood in the context of the case. The Tribunal’s decision was influenced by the introduction by the Claimant, and later withdrawal from the record, of certain documents alleged to be fabricated.2131 The Tribunal was also influenced by the fact that Mr. Hourani paid only a nominal price for his 92 percent share in the company, and made no other substantial contribution.2132 That analysis, however, would not be generally applicable to the test in the second sentence of Art. 25(2)(b), since under that provision, it is the local company that is deemed to be the investor and to hold or to have made an investment, not the foreign controller of that company. The Claimant sought annulment

2125 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 110. The Tribunal in TSA Spectrum took a different approach, finding by a majority that it was appropriate to pierce the corporate veil of the immediate controlling entity, see Award (19 December 2008) paras 152, 153. 2126 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 117. 2127 Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 113–114. 2128 Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 267–268. 2129 Caratube v Kazakhstan, Award (5 June 2012) paras 406, 457. 2130 ibid para 407. 2131 ibid paras 405, 447. 2132 ibid paras 435, 455.

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of this aspect of the Award. The application was declined, however, out of deference to the ‘factual findings and weighing of evidence’ of the Tribunal.2133 In Burimi v Albania, the Tribunal examined financing and pledge agreements to assess whether an Albanian company, Eagle Games, was owned and controlled by a national of Italy, and thus foreign controlled for the purposes of Art. 25(2)(b).2134 The Tribunal concluded that the agreements did not represent ownership of shares in Eagle Games, and the facts, instead, pointed to ownership and control in the hands of Mr. Burimi, a dual national of Italy and Albania.2135 Because Mr. Burimi held the nationality of Albania, Eagle Games could not be found to be foreign controlled for the purposes of Art. 25(2)(b).2136 These cases make it abundantly clear that foreign control at the time of consent is an objective requirement which must be examined by the tribunal in order to establish jurisdiction.2137 Whereas an agreement on foreign nationality may be readily inferred from a consent agreement, no such inference is possible with regard to foreign control. An agreement on foreign nationality will create a presumption that its factual condition of foreign control exists, but no more. This presumption is rebuttable. Foreign control must actually exist and cannot be construed by the parties or implied from an agreement between the parties.

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b) Nationality of Foreign Control The second clause of Art. 25(2)(b) refers to ‘foreign control’ without specifying any nationality requirements in this respect. It is clear from the wording and from the context that control exercised by nationals of the host State is not ‘foreign control’ and that juridical persons controlled by such nationals are excluded from ICSID’s jurisdiction. The question whether ‘foreign control’ means control by nationals of another Contracting State or control by nationals of any State other than the host State is not so clear at first sight. A literal interpretation could suggest that ‘foreign’ has a different and wider meaning than ‘of another Contracting State.’ But a number of considerations strongly suggest that control by nationals of non-Contracting States would not qualify for purposes of Art. 25(2)(b). There may also be a distinction to be drawn between contractual and treaty-based references to ICSID. In contract-based cases, any foreign control may be sufficient, as long as it is by nationals of another Contracting State and the contractual agreement to treat the locally incorporated company as foreign does not require control by nationals of a specific country. By contrast, in treaty-based cases, the

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Caratube v Kazakhstan, Decision on Annulment (21 February 2014) paras 158, 166, 185, 238, 246. Burimi v Albania, Award (29 May 2013) para 117. ibid para 118. 2136 ibid para 121. See eg Vacuum Salt v Ghana, Award (16 February 1994) para 41; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 24; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 213; Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 113–114; TSA Spectrum v Argentina, Award (19 December 2008) para 162; El Paso v Argentina, Award (31 October 2011) para 182; Caratube v Kazakhstan, Award (5 June 2012) para 336; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 195; Burimi v Albania, Award (29 May 2013) para 112; National Gas v Egypt, Award (3 April 2014) paras 131–133; Société Industrielle des Boissons v Guinea, Award (21 May 2014) para 103 (citing the Second Edition of this Commentary); Eyre and Montrose v Sri Lanka, Award (5 March 2020) paras 255–258.

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treaty definition of ‘national’ commonly requires that the locally incorporated company is controlled by nationals of the other Contracting State to the treaty. In respect of the first issue, namely, whether control by nationals of another Contracting State is required or whether control by nationals of any State other than the host State suffices under Art. 25(2)(b) of the Convention, the drafting history of the second clause of Art. 25(2)(b) suggests that what the delegates had in mind was control by nationals of other Contracting States (see paras. 1263, 1264 supra). In addition, a conscious decision was made to exclude nationals of non-Contracting States, including juridical persons, from access to the Centre (see paras. 600, 1230 supra). This result is also borne out by a more careful interpretation of the second clause of Art. 25(2)(b) itself. The fact of foreign control is linked to the agreement to treat the investor as a national of another Contracting State by the word ‘because.’ This causal connection suggests that the foreign control must correspond to an agreement that the investor has the nationality of another Contracting State. It would be illogical to accept an agreement to treat the investor as a national of another Contracting State because of foreign control by a national of a non-Contracting State. In SOABI v Senegal, jurisdiction turned on whether the foreign control over the local company was exercised by Flexa, a Panamanian company, or, indirectly, by Flexa’s Belgian owner (see paras. 1312, 1333 supra). Belgium was a Contracting State but Panama was not. The Tribunal had no doubts that the ‘foreign control’ had to be exercised by nationals of Contracting States: The Tribunal is of the opinion that it follows from the structure and purpose of the Convention that the foreign interests which might serve as a basis for according ‘foreign status’ to a company established under local law, should be those of nationals of Contracting States.2138

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The Tribunal was able to uphold jurisdiction only by finding that control, in the sense of the second clause of Art. 25(2)(b), was exercised indirectly by the Belgian controller of Flexa (see para. 1373 infra). Therefore, it is clear that control must be exercised by nationals of Contracting States. The Award in TSA Spectrum v Argentina takes this proposition further by insisting that control through an intermediate holding company is insufficient for Art. 25(2)(b), if ultimate control is vested in a person having the nationality of the host State. In TSA Spectrum v Argentina, the Claimant, an Argentine company, was ultimately owned by an Argentinian national.2139 Focusing on the second sentence of Art. 25(2)(b), the Tribunal held that: Although the text refers to juridical persons holding the nationality of the host State that the parties have agreed should be treated as nationals of another contracting State ‘because of foreign control’, the existence and materiality of this foreign control have to be objectively proven in order for them to establish ICSID jurisdiction by their agreement. It would not be consistent with the text, if the tribunal, when establishing

2138 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 33. This view is shared by ibid, Dissenting Opinion Mbaye (25 February 1988) paras 61–63, 76–77. See also ibid, Declaration Broches (1 August 1984) paras 2–4. 2139 TSA Spectrum v Argentina, Award (19 December 2008). See generally Repousis (n 1873).

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whether there is foreign control, would be directed to pierce the veil of the corporate entity national of the host State and to stop short at the second corporate layer it meets, rather than pursuing its objective identification of foreign control up to its real source, using the same criterion with which it started.2140

In other words, the TSA Spectrum tribunal held that, unlike the first sentence of Art. 25(2)(b), the second sentence establishes an objective test that requires an ICSID tribunal to pierce the layers of ownership of a locally incorporated entity in order to ascertain whether the ultimate owner of that locally incorporated entity is a national of the host State. In addition, the TSA Spectrum Tribunal determined that for this assessment ‘the relevant date is the date on which the parties consented to submit the dispute to arbitration.’2141 Applying this test to the facts, the Tribunal held that:

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The only conclusion that can be drawn from the information and evidence available to the Tribunal is thus that the ultimate owner of TSA on and around the date of consent was the Argentinian citizen Mr. Jorge Justo Neuss. It therefore follows that, whatever interpretation is given to the BIT between Argentina and the Netherlands, including the Protocol to the BIT, TSA cannot be treated, for the purposes of Article 25(2)(b) of the ICSID Convention, as a national of the Netherlands because of absence of ‘foreign control’ and that the Arbitral Tribunal therefore lacks jurisdiction to examine TSA’s claims.2142

The findings of the Tribunal in TSA Spectrum were affirmed in Burimi v Albania2143 and National Gas v Egypt.2144 In Burimi v Albania, one of the Claimants, Eagle Games, was an Albanian entity, whose majority shareholder, Mr. Burimi, was a national of both Italy and Albania. Thus, the Burimi tribunal faced the question whether a dual national, who ultimately controlled an entity incorporated in the host State, and who, in addition to his foreign nationality, had the nationality of the host State, could invoke his foreign nationality for purposes of contending that the local company fell within the scope of Art. 25(2)(b) second sentence. The Burimi tribunal answered this question in the negative. The Tribunal held that: While neither the ICSID Convention nor relevant precedents address the potential for a dual national invoking one of his two nationalities to establish jurisdiction over a claim brought in the name of a juridical person under the second clause of Article 25(2)(b), it strikes the Tribunal as anomalous that the principle against use of dual nationality in 25(2)(a) would not transfer to the potential use of dual nationality in 25(2)(b). Otherwise, any dual national who is a national of the Contracting State to a dispute could circumvent the bar on claims in Article 25(2)(a) by establishing a company in that state and asserting foreign control of that company by virtue of his second (foreign) nationality. Accordingly, the Tribunal finds that for the purposes of considering whether Eagle Games could be treated as a national of another Contracting State (i.e., Italy)

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TSA Spectrum v Argentina, ibid para 147. 2141 ibid para 160. ibid para 162. Burimi v Albania, Award (29 May 2013) para 121. National Gas v Egypt, Award (3 April 2014) paras 136–144. See also Repousis (n 1873) 327; Albert Badia, Piercing the Veil of State Enterprises in International Arbitration (Kluwer 2014) 143; Yarik Kryvoi, ‘Piercing the Corporate Veil in International Arbitration’ (2011) 1 Global Bus LR 169.

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schreuer’s commentary on the icsid convention because of ‘foreign control,’ Mr. Ilir Burimi cannot invoke his Italian nationality to establish ‘foreign control’ of Eagle Games.2145

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The Burimi tribunal clarified that the veil-piercing exercise that is permissible under Art. 25(2)(b) second sentence is not applicable in the context of Art. 25(2)(b) first sentence, even if the ultimate controller is the same, as was the case in Burimi. As the Tribunal explained: Burimi SRL does not have the nationality of the Contracting State party to the dispute (Albania). It is an Italian legal entity. Therefore, whether it is under ‘foreign control’ is irrelevant to the determination of its nationality. Respondent mistakenly argues that piercing the corporate veil – as is required by Article 8(2)(c) of the Italy–Albania BIT – is necessary to determine the nationality of a company that already has the nationality of a State other than the State party to the dispute.2146

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In National Gas v Egypt, the Claimant was controlled by CTIP, a UAE company, wholly owned by another UAE company (REGI), which was in turn wholly owned by Mr. Ginena, an Egyptian and Canadian national.2147 Similar to Burimi, the National Gas tribunal found it did not have jurisdiction, holding that: [T]here is a significant difference under Article 25(2)(b) between (i) control exercised by a national of the Contracting State against which the Claimant asserts its claim and (ii) control by a national of another Contracting State. The latter situation violates no principle of international law and is consistent with the text of the ICSID Convention. On the other hand, the former situation violates the general limitation in Article 25(1) and the first part of Article 25(2)(a) of the ICSID Convention in regard to both Contracting States and nationals (including dual nationals). In other words, the latter is consistent with the object and purpose of the ICSID Convention; but the former is inconsistent: it would permit the use of the ICSID Convention for a purpose for which it was clearly not intended and it would breach its outer limits. As already noted above, Article 25(2)(b) operates only as a qualified exception to the general limitation to ICSID jurisdiction in Article 25: a sardine cannot swallow a whale.2148

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As to the question of whether a specific agreement may displace the objective test enshrined in Art. 25(2)(b), the National Gas tribunal confirmed that such agreement would only act as a rebuttable presumption and would therefore not displace the objective test: [E]ven as an objective test, the requirement of Article 25(2)(b) as to foreign control may take into account the express agreement of both the disputing parties and the Contracting Parties to the ICSID Convention. In the words of Vacuum Salt, such agreement may operate as ‘a rebuttable presumption’; and, as expressed in Autopista, agreement based on ‘reasonable criteria,’ without formalities, would ordinarily suffice. Yet both approaches impose limitations to such agreements. In Vacuum Salt, citing 2145 Burimi v Albania, Award (29 May 2013) para 121. 2146 ibid para 131. 2147 National Gas v Egypt, Award (3 April 2014). As to the Claimant’s argument that Mr Ginena exercised control with Mr Rasikh (who allegedly held a 5 percent direct interest), the Tribunal held that it did not matter whether Mr Ginena exercised sole control over the Claimant, because Mr Rasikh was also an Egyptian national (ibid para 145). 2148 ibid para 136.

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Dr. Broches, an agreement could not permit parties to use the ICSID Convention ‘for purposes for which it was clearly not intended.’ In Autopista, again citing Dr. Broches, an agreement must keep within ‘the outer limits within which disputes may be submitted to . . . arbitration under the auspices of the Centre’; and also ‘the purposes of the Convention have not been abused.’2149

The nationality of foreign controllers is relevant not only to ensure that they are nationals of a Contracting State, but also to ensure that a local company is entitled to avail itself of the protection of an investment treaty. In Aguas del Tunari v Bolivia, a claim was brought by a Bolivian company under the Bolivia–Netherlands BIT. Art. 1(b)(iii) of that treaty defines investors of a Contracting Party to mean ‘legal persons controlled directly or indirectly, by nationals of that Contracting Party, but constituted in accordance with the law of the other Contracting Party.’ There was no dispute that the Claimant was foreign controlled. The question was whether it was controlled by Dutch investors such that the Claimant qualified for the protection of the BIT. The Tribunal found control to be vested in the hands of one or more tiers of Dutch holding companies, which held 55 percent of the shares in the Claimant via a Luxembourg company, which was its immediate shareholder. The Tribunal did not pierce the corporate veil of these Dutch companies, as Bolivia argued it should, to attribute control to their ultimate US or Italian parent companies, neither of which could have benefited from the protection of the BIT in question. In so holding, the Tribunal found that control within the meaning of the Bolivia–Netherlands BIT encompassed both actual exercise of powers or direction and the rights arising from the ownership of shares. In the words of the Tribunal:

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An entity that owns 100% of the shares of another entity necessarily possesses the power to control the second entity. The first entity may decline to exercise its control, but that is its choice. Moreover, the first entity may be held responsible under various corporate law doctrines for the actions of its subsidiary, whether or not it actually exercised control over that subsidiary’s actions. Respondent contends that IWT B.V. and IWH B.V. are mere ‘shells’ which cannot even decline to exercise its possible control. Holding companies (if that is all IWT B.V. and IWH B.V. are in this case) owning substantial assets (here the rights under the Concession) are, however, both a common and legal device for corporate organization and face the same legal obligations of corporations generally. The Tribunal acknowledges that the corporate form may be abused and that form may be set aside for fraud or on other grounds. . . . the Tribunal finds no such extraordinary grounds to be present on the evidence.2150

In Swisslion v North Macedonia, the claim was brought under the North Macedonia– Switzerland BIT by a locally incorporated entity, which was owned by a Swiss company, which was in turn wholly owned by a Serbian national.2151 Art. 2 of the BIT provided that if more than 50 percent of the equity interest of a locally incorporated company was beneficially owned by persons of the other Contracting State, that company would be considered an investor of the other Contracting State.2152 2149 2150 2151 2152

ibid para 134 (footnotes omitted). Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 245. Swisslion v North Macedonia, Award (6 July 2012) para 1. ibid para 131.

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Considering that a Swiss company held more than 50 percent of the shares in the local entity, the Tribunal had no difficulty finding that this requirement was satisfied ‘whatever the nationality of [its] ultimate owner may be.’2153 The ultimate beneficial owner was a national of an ICSID Contracting State other than the host State, namely Serbia. Complications may arise if control is exercised by investors of different nationalities. This is not liable to lead to difficulties if all possible controllers are nationals of Contracting States. Thus, in Amco v Indonesia, the debate on whether the true controller of PT Amco was an American company, a Dutch individual, or a Hong Kong company2154 was ultimately moot, since all nationalities concerned were those of Contracting States at the time of consent. If control is exercised jointly by shareholders of several Contracting States it is still possible to regard the local company as being under foreign control for purposes of the second clause of Art. 25(2)(b), provided that nationals of the host State cannot, without the consent of other shareholders, steer the company’s fortunes. Even if the nationals of one Contracting State cannot be said to be in a position of control, it would be sufficient if they can exercise control together with nationals of other Contracting States. The agreement on nationality may take this situation into account (see para. 1305 supra). The mere existence among the shareholders of nationals of non-Contracting States or of nationals of the host State would not by itself oust the Centre’s jurisdiction. But it must be shown that the combined influence of the nationals of Contracting States other than the host State can be described as controlling.2155 Again, investment treaty arbitration can present particular difficulties. The Tribunals in the related cases of Camuzzi v Argentina I and Sempra v Argentina discussed, obiter, the circumstances in which a company incorporated in the host State might be considered to be foreign controlled, and especially the possibility of foreign control deriving from the joint interests of multiple parties of different foreign nationalities. In the case of an agreement on foreign control deriving from an investment treaty, it seems unobjectionable that such control be vested in more than one national of the other Contracting Party to a bilateral treaty.2156 The same cannot be said if a claimant sought to argue that it was foreign controlled by reference to underlying investors of different nationalities some of whom may be entitled to protection under separate BITs or no treaty protection at all. The problem was explained in Camuzzi v Argentina I and Sempra v Argentina in the following (identical) terms: The problem arises in the case of foreign investors of different nationalities acting, as in this case, under different treaties. The Argentine Republic is right when it argues that the consent is expressed in each treaty individually, with a different personal and normative import, in such a way that the combination of various participations could result in situations that that consent did not have in mind and might not have intended to include. In such an alternative the control could not be exercised jointly for the purposes of the Convention and of the Treaty and would have to be measured on the basis of the individual intents.

2153 2154 2155 2156

ibid para 132. Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(iii). See also Broches (n 1001) 77. Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 38.

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The assertion of the Claimant to the effect that the shareholders’ nationality is not relevant inasmuch as they are nationals of a State that is a contracting party to the Convention is not convincing. It could, for instance, result in a shareholder protected by a treaty adding his participation to that of another shareholder who is a national of a State that is a party to the Convention but does not have a bilateral treaty with the host State that would protect him.2157

At the same time, the tribunals in Camuzzi v Argentina I and Sempra v Argentina recognized that in the particular circumstances of a case it may be shown that different shareholders having different nationalities had collaborated together from the outset in making and operating their investment, to the knowledge of the host State. On this basis, it was possible to find that the locally incorporated claimant was foreign controlled, and thus a ‘national of another Contracting State,’ by reference to the consolidated interests of its shareholders, notwithstanding their different nationalities. The Tribunals said that:

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[I]f the context of the initial investment or other subsequent acquisitions results in certain foreign investors operating jointly, it is then presumable that their participation has been viewed as a whole, even though they are of different nationalities and are protected by different treaties. In such a case, it would be perfectly feasible for these participations to be combined for purposes of control or to make the whole the beneficiary [sic].2158

Camuzzi and Sempra had entered into their investment together, pursuant to a shareholders’ agreement that reflected their joint venture and assigned to them both managerial responsibilities in relation to the operating companies, such that ‘when the dispute arose it was already a reality that could not be ignored for jurisdictional purposes.’2159 In such circumstances, the Tribunals held that it was possible to consider two foreign nationalities together to establish foreign control in a company incorporated in the host State, without identifying one or the other nationality as controlling. Amerasinghe has argued that Art. 25(2)(b) does not refer to effective control but simply to control so that any reasonable amount of control should be accepted. Therefore, even though nationals of non-Contracting States or of the host State may have greater control, there would be good reasons for not rejecting an agreement on nationality as long as there is an adequate control by nationals of Contracting States.2160 It does not seem likely that ICSID tribunals will follow this course. The cases thus far decided show a clear tendency to ascertain control independently of an agreement on nationality (see paras. 1327–1347 supra). The Vacuum Salt case, in particular, suggests that control means effective control or a dominant position and not merely a degree of participation (see paras. 1336–1339 supra; paras. 1387–1390 infra). Joint venture corporations in which the foreign investor, as well as the host Government, or a local investor, participate may be designed specifically to exclude foreign control over the enterprise. In a situation of this kind it is advisable to make the 2157 ibid paras 39–40; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 52–53. 2158 Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 41; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 54. 2159 Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 43. 2160 Amerasinghe (n 96) 219, 221; Amerasinghe (n 1826) 236–240.

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foreign shareholder, and not just the joint venture corporation, the party to the agreement containing the ICSID clause.

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A foreign corporate investor controlling a company in the host State may, in turn, be controlled by nationals of other States. ICSID tribunals have reached conflicting answers to the question of whether only immediate control or also indirect control should be taken into consideration to determine the nationality of the foreign controller. In Amco v Indonesia, the Respondent contended that the true controller of the local company, PT Amco, was not Amco Asia, a US national, as had been indicated by the Claimant (see paras. 1308–1311 supra). Rather, it was alleged that Amco Asia itself was controlled by a Dutch citizen, Mr. Tan, residing in Hong Kong, through a Hong Kong company of which Mr. Tan was the sole or the main shareholder. The Tribunal refused to go beyond the first level of control: To take this argument into consideration, the Tribunal would have to admit first that for the purpose of Article 25(2)(b) of the Convention, one should not take into account the legal nationality of the foreign juridical person which controls the local one, but the nationality of the juridical or natural persons who control the controlling juridical person itself: in other words, to take care of a control at the second, and possibly third, fourth or xth degree. Such a reasoning is, in law, not in accord with the Convention. Indeed, the concept of nationality is there a classical one, based on the law under which the juridical person has been incorporated, the place of incorporation and the place of the social seat. An exception is brought to this concept in respect of juridical persons having the nationality, thus defined, of the Contracting State Party to the dispute, where said juridical persons are under foreign control. But no exception to the classical concept is provided for when it comes to the nationality of the foreign controller, even supposing – which is not at all clearly stated in the Convention – that the fact that the controller is the national of one or another foreign State is to be taken into account . . .2161

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In this particular case, a determination of the controlling nationality was of no immediate interest, since all the countries concerned, the United States, the Netherlands, and the United Kingdom, were Contracting States at the relevant date (see paras. 1348–1369 supra). But the Tribunal added a remark that gives some relevance to the controller’s nationality in addition to its status as a national of a Contracting State: the true nationality of the controller would have to be taken into account where, for political or economic reasons, it matters for the host State to know the nationality of the controller, and where the host State, had it known this nationality, would not have agreed to the arbitration clause. This, however, was neither alleged nor proven in the instant case.2162 This resembles the function arguably achieved by the insertion of denial-of-benefits clauses in treaties, whereby States deny the treaty’s protection to legal entities that have no connection to the State where they are

2161 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(iii). 2162 ibid.

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incorporated (other than the incorporation itself ) and entities controlled by investors of a country with which the host State has no diplomatic relations.2163 In SOABI v Senegal, the local company’s immediate owner was a Panamanian company, Flexa, which itself was controlled by Belgian nationals. Since Belgium was a Contracting State, but Panama was not, the issue of direct or indirect control was decisive (see paras. 1312, 1333, 1352 supra). The Government argued that SOABI did not meet the requirements of Art. 25 since its sole shareholder, at the relevant time, had Panamanian nationality. The Tribunal rejected this argument:

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35. . . . The nationality of this company, which held in 1975 all of SOABI’s subscribed capital shares, could only be determinative of the nationality of the foreign interests if the Convention were concerned only with direct control of the company. However, the Tribunal cannot accept such an interpretation, which would be contrary to the purpose of Article 25(2)(b) in fine. This purpose, it is hardly necessary to observe, is to reconcile, on the one hand, the desire of States hosting foreign investments to see those investments managed by companies established under local law and, on the other hand, their desire to give those companies standing in ICSID proceedings. . . . 37. It is obvious that, just as a host State may prefer that investments be channelled through a company incorporated under domestic law, investors may be led for reasons of their own to invest their funds through intermediary entities while retaining the same degree of control over the national company as they would have exercised as direct shareholders of the latter. 38. For the above reasons, the Tribunal concludes that, at the date of the conclusion of the Establishment Agreement, control over Flexa was exercised by nationals of Contracting States, notably the Kingdom of Belgium.2164

The solution adopted in SOABI found support among commentators.2165 But it leaves a number of questions unanswered. Was the Tribunal’s objective to be realistic by piercing the veil of the first controller’s corporate identity? Could this search for the true controller go on indefinitely beyond the first controller? Or was it the Tribunal’s intention to search until it could find a foreign controller that had the nationality of a Contracting State? Put differently, how would a tribunal decide if the situation in SOABI were to be reversed? If the immediate controller is a national of a Contracting State which is, in turn, controlled by nationals of non-Contracting States or even by nationals of the host State? Searching for the true controller would militate against jurisdiction in such a case. On the other hand, the endeavor to find control of a nationality that is favorable to ICSID’s jurisdiction would exclude the second level of control. The issue also arose in Autopista v Venezuela. The parties had entered into a contract which provided that they agreed to attribute to the Claimant the character of ‘national of another Contracting State’ for the purposes of the parties’ ICSID arbitration agreement and for the application of the Convention, if the Claimant’s majority shareholders

2163 See generally Jagusch and Sinclair (n 1913); Feldman (n 1913) 296; Blyschak (n 1913) 208–209; Mistelis and Baltag (n 1913); Behlman (n 1913). 2164 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 35, 37–38. For the contrary view, see ibid, Dissenting Opinion Mbaye (25 February 1988) paras 62–64, 74–77. See also ibid, Declaration Broches (1 August 1984) paras 2–5 in support of the Tribunal’s decision, describing the finding on this point in Amco v Indonesia as an obiter dictum. 2165 Amerasinghe (n 1826) 236; Delaume (n 120) 178; Hirsch (n 951) 104.

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came to be nationals of a Contracting State.2166 The same clause went on to refer to the ‘country of citizenship of the majority shareholder or shareholders of the Concessionaire.’2167 The Claimant argued that the criterion of foreign control was satisfied because its immediate shareholder was a US company and the United States is a Contracting State. Venezuela objected to the jurisdiction of the Centre because the Claimant’s ‘ultimate and actual’ controller was a Mexican company, Mexico not being a Contracting State at the time.2168 The Tribunal held that the parties’ agreement to submit disputes to ICSID was not subject to the Claimant’s ‘ultimate’ controller or parent being a national of a Contracting State. To the contrary, the agreement had referred to the ‘majority shareholder. . . of the Concessionaire,’ meaning its direct shareholder.2169 The Tribunal concluded that the parties had consented to ICSID jurisdiction in the event that the Claimant’s majority shareholder or shareholders came to be a national of another Contracting State.2170 As a result of an internal corporate restructuring, 75 percent of the Claimant’s shares came to be held by a US company. This was done in an orderly fashion, and with Venezuela’s knowledge and approval.2171 As the Convention does not define foreign control as used in Art. 25(2)(b),2172 the Tribunal held that ‘given the autonomy granted to the parties by the ICSID Convention, an Arbitral Tribunal may not adopt a more restrictive definition of foreign control, unless the parties have exercised their discretion in a way inconsistent with the purposes of the Convention.’2173 The parties’ agreement to define the term ‘foreign control’ only by reference to the Claimant’s direct shareholding, and not for example by more sensitive economic criteria, was ‘certainly a reasonable test for control,’ and not inconsistent with the Convention. The Tribunal therefore found the Claimant to be controlled by a national of another Contracting State by virtue of its shares being held by a US company, notwithstanding that the latter was in turn owned by a national of a non-Contracting State.2174 The issue in Aguas del Tunari v Bolivia was slightly different. The identity of the controllers was relevant primarily for the question of whether the Bolivia–Netherlands BIT applied, not whether the Claimant was controlled by a national of another Contracting State (see paras. 1360, 1361 supra; paras. 1394–1399 infra). Ownership by intermediate holding companies, albeit active in the management of the project, was held to be sufficient for these purposes.2175 But this conclusion was also determinative of the question of jurisdiction under Art. 25(2)(b).2176 Amco and SOABI may be reconciled by adopting Amerasinghe’s suggestion that the search should be pursued until foreign control by nationals of a Contracting State can be established. Once the appropriate foreign control has been found, the search should end,

2166 2167 2169 2171 2173 2175

Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 83. ibid para 84. 2168 ibid para 85. ibid para 86. 2170 ibid para 87. ibid paras 93, 124. 2172 ibid para 105. ibid para 114. 2174 ibid paras 117–121, 133–134. Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 319–320. For the question of interpretation arising under the terms of the BIT, the Tribunal distinguished ICSID jurisprudence on the meaning of ‘control’ for the purposes of Art. 25(2)(b) (ibid paras 275–286). 2176 ibid paras 280–281.

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subject always to the question whether the ultimate controller is a national of the host State, in which case jurisdiction likely will be rejected (see paras. 1336–1347 supra).2177 In other words, the method that works best in favor of ICSID’s jurisdiction is to be adopted in the particular case. Autopista is also in line with this method. But the Tribunal in that case stressed that its decision was dictated by the parties’ own agreement as to the criteria for foreign control and, as such, that it did not purport to lay down a test of general application for the purposes of Art. 25(2)(b).2178 The idea of adopting the solution that works best in favor of ICSID’s jurisdiction has a certain degree of attractiveness, but leads to further questions. Is it sufficient for nationals of non-Contracting States to set up a company of convenience in a Contracting State to create the semblance of appropriate foreign control? Whereas the first part of Art. 25(2)(b) merely refers to the investor’s nationality, the second part specifically refers to foreign control. This would indicate an approach that is governed less by formal aspects of corporate nationality than by economic realities and nationality requirements. Therefore, on balance, for the purposes of the second part of Art. 25(2)(b), the better approach would appear to be a realistic look at the true controllers thereby blocking access to the Centre for juridical persons that are controlled directly or indirectly by nationals of non-Contracting States. This approach would also be in line with the approach of ICSID tribunals to block access to local entities controlled by nationals of the host State.2179 This view was endorsed in Eyre and Montrose v Sri Lanka. In that case, Montrose, a Sri Lankan company, was ultimately controlled by a UK national, Mr. Eyre. The Tribunal saw no requirement in Art. 8(2) of the BIT or Art. 25(2)(b) that the locally incorporated company must be directly held by the qualifying foreign national. The Tribunal said

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to recognize indirect foreign control of such a locally incorporated company, through indirect as well as direct share ownership, is in line with both ICSID jurisprudence and commercial reality. In modern international economic relations, chains of closely-held companies are frequently used, without preventing the majority shareholder at the top of a chain from asserting control of or making claims on behalf of a foreign company lower in the chain.2180

d) Form and Extent of Control Control over a juridical person is not a simple phenomenon. Participation in the company’s capital stock or share ownership, while relatively simple to ascertain, is not necessarily a reliable indicator of control.2181 Different voting rights attached to different types of shares, decision-making procedures and the exercise of management all

2177 Amerasinghe (n 1826) 236. 2178 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 142. 2179 In this sense, TSA Spectrum v Argentina, Award (19 December 2008) paras 114–162; Burimi v Albania, Award (29 May 2013) paras 109–122; National Gas v Egypt (3 April 2014) paras 125–149. 2180 Eyre and Montrose v Sri Lanka, Award (5 March 2020) para 266. 2181 See also Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 119; Caratube v Kazakhstan, Award (5 June 2012) paras 406, 457.

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contribute to a complex picture of control.2182 For instance, a joint venture in which the foreign investor and local interests hold equal shares may be under the effective control of the foreign partner due to the latter’s management and know-how. During the Convention’s drafting, there was some debate on the meaning of ‘control’ after its first introduction (see paras. 1263, 1264 supra). It was pointed out that a mere majority holding of shares would not necessarily be decisive (History, Vol. II, pp. 359, 360, 396, 447, 447–448, 538), that actual holdings would be difficult to trace in the case of bearer shares (ibid., pp. 361, 539, 581) and that even a minority holding of as little as 25 percent or even 15 percent might amount to control through a capacity to block major changes or otherwise (ibid., pp. 447, 448, 538). Mr. Broches stated that there was no uniform view of what constituted ‘foreign control’ but that the matter could be left to the appreciation of each State (ibid., p. 870). ICSID tribunals have developed an increasing awareness of the necessity to take a differentiated approach when examining actual control. In Amco v Indonesia, Amco Asia’s control over PT Amco was simply accepted as a fact, although there was some reference to a sole or main shareholding in the context of PT Amco’s indirect control (see para. 1371 supra).2183 In Klöckner v Cameroon, the Tribunal pointed out that on the critical date SOCAME, the local company, was subject to the majority control of foreign interests by virtue of the fact that Klöckner and its European partners had subscribed to 51 percent of SOCAME’s capital (see also paras. 1288, 1332 supra). The Tribunal also mentioned that a change occurred subsequently when the foreign investors lost majority control over the Company because they refused to subscribe to a capital increase.2184 There is no reference to any element of control other than shareholding in these cases. In SOABI v Senegal, the immediate controller, Flexa, was the sole shareholder of the local corporation. But the Tribunal found that Flexa was, in turn, controlled by nationals of Belgium (see paras. 1312, 1313, 1333, 1352, 1353, 1373 supra). It reached this result primarily by establishing that a Belgian national owned all of Flexa’s shares, but also by reference to the fact that at least one of the three members of Flexa’s Board of Directors was of Belgian nationality.2185 In LETCO v Liberia, the question of control over the locally incorporated company did not raise any factual problems in view of its 100 percent French ownership (see paras. 1289–1290, 1334–1335 supra). But the Tribunal still found it appropriate to base its finding also on the company’s decision-making structure and management: The evidence provided by LETCO clearly indicates that it was under French control at the time the Concession Agreement was signed. This control is not only a result of the fact that LETCO’s capital stock was 100% owned by French nationals as indicated by both LETCO and official documents of the Liberian Government, it also results from what appears to be effective control by French nationals; effective control in the sense that, apart from French shareholdings, French nationals dominated the company decision-making structure. It appears from the evidence presented that a majority, if

2182 2183 2184 2185

See also Amerasinghe (n 1826) 240; Masood (n 122) 139. Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(iii). Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 15–16. SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 38–41.

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not all, of LETCO’s directors, as well as the General Manager, were at all times French nationals.2186

In Vacuum Salt v Ghana, foreign control over the locally incorporated company was the central issue in the Tribunal’s decision. After dismissing the idea that foreign control could be inferred from the existence of an ICSID clause (see paras. 1336–1339 supra), the Tribunal undertook a detailed examination of control over the company. The request for arbitration had contended that Vacuum Salt was controlled by a Greek national, Mr. Panagiotopulos, who at the relevant date held 20 percent of its shares.2187 The Tribunal noted that, while 20 percent of the shares were in the hands of the Greek national, Ghanaian nationals held the remaining 80 percent.2188 In addition, the Greek national and his wife were directors of Vacuum Salt. The Tribunal prefaced its investigation with the following general observation:

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The Tribunal notes, and itself confirms, that ‘foreign control’ within the meaning of the second clause of Article 25(2)(b) does not require, or imply, any particular percentage of share ownership. Each case arising under that clause must be viewed in its own particular context, on the basis of all of the facts and circumstances. There is no ‘formula.’ It stands to reason, of course, that 100 percent foreign ownership almost certainly would result in foreign control, by whatever standard, and that a total absence of foreign shareholding would virtually preclude the existence of such control. How much is ‘enough,’ however, cannot be determined abstractly.2189

The Tribunal added that reasonable criteria other than shareholding, such as voting rights or management, may be considered but that ‘it must be true that the smaller . . . the percentage of voting shares held by the asserted source of foreign control, the more one must look to other elements.’2190 Therefore, it was necessary to examine Mr. Panagiotopulos’ personal role in Vacuum Salt at the critical date.2191 This examination2192 led the Tribunal to conclude that, while Mr. Panagiotopulos served in a significant technical capacity, there was no evidence that he had acted or was materially influential in a truly managerial function:

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Nowhere in these proceedings is it suggested that Mr. Panagiotopulos, as holder of 20 percent of Vacuum Salt’s shares, either through an alliance with other shareholders, through securing a significant power of decision or managerial influence, or otherwise, was in a position to steer, through either positive or negative action, the fortunes of Vacuum Salt.2193

It followed that there was no foreign control in the sense of Art. 25(2)(b). Therefore, jurisdiction had to be declined.2194 In Cable TV v St Kitts and Nevis (see also paras. 531, 766, 1292, 1341 supra), the Tribunal noted that the Claimants were 99.9 percent owned and therefore controlled by nationals of the United States. Nevertheless, it also noted that the directors and other

2186 2187 2188 2190 2192 2194

LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 349, 351. Vacuum Salt v Ghana, Award (16 February 1994) fn 22 to para 35. ibid para 41. 2189 ibid para 43. ibid para 44. 2191 ibid. ibid paras 47–53. 2193 ibid para 53 (footnotes omitted). ibid paras 54–55. See also Broches (n 2118) 27–28.

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persons acting on behalf of the Claimant companies were nationals of the United States.2195 In AIG v Kazakhstan,2196 the Tribunal held that AIG exercised ‘foreign control’ over the second Claimant, a Kazakhstan-registered company, for purposes of Art. 25(2)(b) despite its minimal shareholding of 5 percent.2197 The Tribunal found that AIG exercised voting control over the local company, such that it was ‘operated, managed and controlled’ by AIG.2198 In El Paso v Argentina,2199 the Tribunal determined that, absent majority ownership, the US Claimant could not have had control over certain Argentinian companies. Specifically, the Tribunal resolved that: For Costanera, there is clearly no control, as El Paso holds only an indirect noncontrolling interest of about 12% in Costanera. The same is true for CAPSA and, through the latter, CAPEX, as there is no control by the American company El Paso over these two Argentinian entities: El Paso has only indirect non-controlling shareholdings in CAPSA and CAPEX; more precisely, El Paso owns a 45% interest in CAPSA, the latter having a 60.36% interest in CAPEX. The analysis is different for SERVICIOS: both the first condition for considering it as a foreign company – El Paso owned a 99.2% controlling shareholding in that company – and the second condition – the agreement by Argentina to consider SERVICIOS as a US company because of control – are met. However, SERVICIOS has signed no contracts or other agreements with Argentina. The conclusion is that the rights of the four mentioned Argentinian companies in which El Paso has invested cannot be considered rights enjoying the protection of the Argentina–US BIT by application of Article 25(2)(b) of the ICSID Convention.2200

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In Aguas del Tunari v Bolivia, the Tribunal noted in the context of interpreting the provisions of the Bolivia–Netherlands BIT that the ordinary meaning of ‘control’ can ‘encompass both actual exercise of powers or direction and the rights arising from the ownership of shares.’2201 As to the legal meaning, the Tribunal concluded that this refers to the power to control and not the actual exercise of control.2202 The Tribunal was satisfied that where there is 100 percent ownership, or a majority of voting rights, there is almost inevitably control. Thus, the Tribunal concluded that the phrase in the BIT ‘directly or indirectly controlled’ means that one entity may be said to control another entity (either directly . . . or indirectly) if that entity possesses the legal capacity to control the other entity. Subject to evidence of particular restrictions on the exercise of voting rights, such legal capacity is to be ascertained with reference to the percentage of shares held.2203

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Bolivia argued that control could not be established purely through evidence of ownership but required proof of actual control,2204 but it could not articulate a workable

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Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 5.13–5.22. AIG v Kazakhstan, Award (7 October 2003). ibid para 9.4.9(c)(ii)(c). 2198 ibid para 9.4.8 (5), (6). El Paso v Argentina, Award (31 October 2011). ibid para 183. Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 227. ibid para 232. 2203 ibid para 264. ibid para 223.

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test. The Tribunal thought that it is almost impossible to discern precisely at what stage mere formal control through ownership might transform and become actual or effective control. It thought any such test would be impracticable,2205 and would engender uncertainty contrary to the object and purpose of investment promotion and protection treaties.2206 The Tribunal concluded that control is a quality that accompanies ownership, and can exist in the absence of its overt exercise.2207 Aguas del Tunari was held to be controlled, for the purpose of the BIT, by the Dutch holding companies, the topmost of which, far from being a ‘mere shell,’ was the joint venture company through which the ultimate US and Italian investors worked together to manage their project.2208 The Tribunal nevertheless dealt with Bolivia’s argument that the BIT required proof of ‘actual control’ at some length. This objection was rejected by a majority of the Tribunal.2209 Instead, the majority held that an entity may be said to control another entity, if it possesses the legal capacity to control it. The percentage of voting shares was a reliable test to identify control in the absence of evidence of particular restrictions on the exercise of the rights attaching to them.2210 The Tribunal concluded by considering whether this definition of control was compatible with the objective jurisdictional requirements in Art. 25(2)(b). In the absence of a definition of control in the Convention, and the importance attributed to party autonomy, the Tribunal noted that it is not at all surprising that the drafting history, commentary, and arbitral awards all point to ‘foreign control’ being ‘flexible’ so that reasonable definitions in referring instruments may pass through the jurisdictional keyhole.2211 It was clear to the Tribunal that the definition of control as used in the BIT was an agreement as to ‘foreign control’ that satisfied ‘the flexible and deferential requirement of Article 25(2).’2212 The dissenting arbitrator in Aguas del Tunari found that the legal capacity to control an entity was not sufficient for ‘control’ to be established. He considered instead that it must be proven that the Claimant ‘received the effects of actions’ of the controlling companies.2213 Thus, tests that, according to this view would be more suitable to demonstrate this, would be the nationality of the board members, the frequency of visits of board members of the direct shareholder, and the frequency of monitoring and financial support, rather than majority shareholding.2214 In Caratube v Kazakhstan, the Claimant, CIOC, was an entity incorporated in Kazakhstan.2215 The key question for jurisdictional purposes was whether CIOC was controlled by one of its shareholders, Mr. Devincci Hourani, who was a national of the United States. Kazakhstan argued that, for the purposes of the investigation required in

2205 ibid para 246 (citing in support the Claimant’s argument in Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 69). See further paras 1343, 1375, 1376 supra. 2206 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 247. 2207 ibid para 242. 2208 ibid paras 319–320. 2209 Arbitrator Alberro-Semerena issued a Declaration, arguing that proof of actual control was required by the BIT and concluding that the Claimant had not satisfied this test. 2210 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 264. 2211 ibid paras 280, 283. 2212 ibid para 285. 2213 ibid, Declaration Alberro-Semerena (11 October 2005) para 44. 2214 ibid para 42. 2215 Caratube v Kazakhstan, Award (5 June 2012).

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Art. 25(2)(b) second sentence, the Tribunal ought not to limit itself to nominal ownership, but ‘investigate the existence of actual control arising from all of the facts and circumstances.’2216 Specifically, Kazakhstan argued that the evidence on the record, which showed that Mr. Hourani had paid the nominal equivalent of USD 6,500 for a 92 percent stake in CIOC, but which did not show that he participated in the day-to-day running of the business, called for an inquiry into the circumstances by which Mr. Hourani had acquired his shares and necessitated an investigation into whether he had actual control of CIOC.2217 The Claimant, on the other hand, argued that majority ownership alone must satisfy the control test under Art. 25(2)(b). Ultimately, the Tribunal held that control under Art. 25(2)(b) required ‘sufficient evidence of exercise of actual control,’ and it was not enough that the BIT used the terms ‘owned or controlled’ not merely ‘control’ as does Art. 25(2)(b), because ‘the definition in the BIT cannot go beyond the limits established by Art. 25(2)(b) of the ICSID Convention which makes no reference to ownership, but expressly requires control.’2218 Applying that test to the facts, the Tribunal concluded that: The Claimant has not provided sufficient proof for control as required by Art. 25(2)(b) of the ICSID Convention. The Tribunal is not satisfied that a legal capacity to control a company, without evidence of an actual control, is enough in light of Devincci Hourani’s characterisation of his purported investment in CIOC.2219

1401

In Caratube and Hourani v Kazakhstan, a subsequent case initiated under a concession contract between CIOC and the Respondent as well as under the Kazakh Foreign Investment Law, the second Tribunal considered that the former had not decided the matter in a way that would bar it from deciding the question whether ‘the requirement of foreign control under Art. 25(2)(b) of the ICSID Convention . . . requires the existence of objective, actual and effective foreign control, formal or legal control not being enough.’2220 Indeed, the Caratube and Hourani tribunal upheld jurisdiction holding that: [T]he Respondent has not provided sufficient evidence to justify disregarding Mr. Devincci Hourani’s 92% ownership of CIOC’s shares in favor of piercing the corporate veil and determining ‘the reality behind the cover of nationality.’ The Respondent has not convincingly rebutted the presumption that CIOC was at all relevant times under foreign control within the meaning of Article 25(2)(b) of the ICSID Convention. In light of the foregoing, the Tribunal concludes that the two threshold requirements in Article 25(2)(b) of the ICSID Convention are met and that CIOC must thus be considered as a national of another Contracting State, i.e. a US national, for the purposes of Article 25 of the ICSID Convention.2221

1402

On the basis of the Convention’s preparatory works as well as the published cases, it is possible to conclude that the existence of foreign control is a complex question requiring the examination of several factors such as equity participation, voting rights,

2216 2218 2219 2220 2221

ibid para 323. 2217 ibid para 415. ibid para 380. ibid para 407. See also Caratube v Kazakhstan, Decision on Annulment (21 February 2014) para 259. Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 611. ibid.

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and management. In order to obtain a reliable picture, all these aspects must be looked at in conjunction. There is no simple mathematical formula based on shareholding or votes alone. An argument has been made that what matters in terms of control is not absolute control, but merely a reasonable amount of control. Therefore, a controller might be said to exercise foreign control despite the fact that another controller exercises an even higher degree of control.2222 The Tribunal in Vacuum Salt mentioned the problem of whether control in Art. 25(2)(b) means exclusive control, or whether more than one shareholder or group of shareholders may enjoy control, but found that it did not need to address the problem.2223 Admittedly, for purposes of ICSID’s jurisdiction, the concept of control should be treated with some flexibility. Thus, joint control by different shareholders from different Contracting States should be admitted in principle (see paras. 1305, 1363, 1364 supra). The Sempra v Argentina and Camuzzi v Argentina I cases confirm this possibility, but note the problem that may arise in treaty arbitrations if not all shareholders are nationals of a Contracting Party to the treaty (see paras. 610, 1365–1367 supra).2224 On the other hand, not every substantial minority participation should be accepted as control (see para. 1368 supra). The combined control of nationals of Contracting States other than the host State should, at least, outweigh the combined control of nationals of non-Contracting States and of the host State. A number of national investment laws containing ICSID clauses extend access to the Centre to host State corporations that are under foreign control (see paras. 1319, 1320 supra). Where an explanation of foreign control is offered, it is nearly always in terms of a majority interest in the local company’s share capital.2225 BITs that address the second clause of Art. 25(2)(b) (see paras. 1321–1323 supra) refer to foreign control in varying terms.2226 Many Dutch and Swiss BITs merely reiterate the Convention’s terminology by referring to control by nationals of the other Contracting Party.2227 By contrast, many UK agreements refer to majority share ownership (see para. 1321 supra). The provisions in these BITs and most of the provisions in national legislation are narrower than the Convention would permit. Their effect is to restrict the parties’ agreement on nationality (see para. 1325 supra) to cases of majority equity ownership.2228

2222 Amerasinghe (n 1826) 240. 2223 Vacuum Salt v Ghana, Award (16 February 1994) para 43. 2224 Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 52–53; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 39–40. 2225 See Central African Republic–Code of Investments (1988) Art. 30; Chad–Décret N◦ 446-PR-MCI-87 fixant la procédure d’octroi des avantages du Code des Investissements (1987) Art. 17(4); Mozambique– Law on Investment (1993) Art. 1(1)(q)(2); Uganda–Investment Code (1991) s 10(1)(b); Zaire/DR Congo–Investment Code (1986) Art. 1(c). 2226 Peters (n 1271) 144. 2227 Dolzer and Stevens (n 331) 214, 224–225. See also Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 245; TSA Spectrum v Argentina, Award (19 December 2008) paras 155–162. The 2019 Netherlands Model BIT has removed the provision containing the Contracting Parties’ offer to treat locally incorporated companies as foreign entities because of foreign control and has accordingly restricted its definition of ‘national’ of a Contracting Party (see Art. 1(b)). 2228 Dolzer and Stevens (n 331) 143.

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US BITs refer to a local company that is ‘an investment of nationals or companies of the other Party’ (see para. 1322 supra). This formula is open to conflicting interpretations. The phrase ‘investment of’ may be read as including a minority participation in the local company. This would probably go beyond the concept of foreign control as used in the Convention.2229 The formula in the US BITs may also be interpreted in the opposite way. A local company that is an investment of nationals of the other Party may be seen to require close to 100 percent ownership. Obviously, this would be narrower than required by the Convention. Multilateral instruments containing ICSID consent clauses (see paras. 863–874 supra) deal with the question of foreign control over host State companies in several ways (see para. 1324 supra). Art. 1117 of the NAFTA refers to direct or indirect control by an investor of a Party, which can exist even in the case of a minority shareholding provided that the shareholder can demonstrate effective or ‘de facto’ control over the local company.2230 The ECT in Art. 26(7) simply speaks of control by investors of another Contracting Party (see para. 1324 supra). But an ‘understanding,’ adopted together with the ECT, offers the following definition of control: For greater clarity as to whether an Investment made in the Area of one Contracting Party is controlled, directly or indirectly, by an Investor of any other Contracting Party, control of an Investment means control in fact, determined after an examination of the actual circumstances in each situation. In any such examination, all relevant factors should be considered, including the Investor’s (a) financial interest, including equity interest, in the Investment; (b) ability to exercise substantial influence over the management and operation of the Investment; and (c) ability to exercise substantial influence over the selection of members of the board of directors or any other managing body. Where there is doubt as to whether an Investor controls, directly or indirectly, an Investment, an Investor claiming such control has the burden of proof that such control exists.2231

5. Critical Dates 1409

The second clause of Art. 25(2)(b) refers back to the first clause as far as the critical date is concerned. ‘On that date’ means ‘the date on which the parties consented to submit such dispute to conciliation or arbitration’ (see paras. 1242–1261 supra). The conclusion that the critical date is the date of consent is irrefutable as far as the relevant date for the host State’s nationality is concerned. ICSID tribunals applying the second clause of Art. 25(2)(b) have never cast this principle into doubt and have in some cases

2229 ibid 144. 2230 Thunderbird v Mexico (UNCITRAL), Award (26 January 2006) paras 96–110; B-Mex and others v Mexico (AF), Partial Award (19 July 2019) paras 209–210; USMCA (n 338) Art. 14.D.3(1)(b). 2231 See ECT (n 33) Understanding with respect to Article 1(6).

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specifically pointed out that the host State’s nationality of the foreign controlled corporation existed on the date of consent.2232 The situation is less clear when it comes to the critical date for the foreign control. During the Convention’s drafting, there was some concern about a change of control over the locally established company (History, Vol. II, pp. 287, 445), but no definite solution was offered. The Convention’s wording is not without ambiguity on this point. The words ‘on that date’ relate to ‘the nationality of the Contracting State party to the dispute.’ But they do not relate to the subsequent words dealing with foreign control. To express this meaning the words ‘on that date’ would have to be repeated after the words ‘because of foreign control.’ Therefore, a strictly grammatical interpretation leaves open the question at what time foreign control over the local company must have existed. On the other hand, the agreement to treat the local company as a national of another Contracting State must be ‘because of foreign control.’ Therefore, foreign control must have existed at the time of the agreement. In Autopista v Venezuela, at the time of the agreement, the investment was controlled by foreign nationals, which were not, however, nationals of a Contracting State (see paras. 1274, 1316, 1375, 1376 supra). In that case, the parties’ agreement to treat the Claimant as a foreign national was conditional upon it becoming controlled by a national of a Contracting State.2233 The validity of that agreement was upheld by the Tribunal as at the date such foreign control came into existence.2234 This approach appears to advocate in favor of a more liberal construction where foreign control at the time of consent suffices, regardless of whether that date coincides with the date any agreement on foreign control was concluded. This conclusion does not answer the question as to the effect of subsequent changes in control. In other words, does the disappearance of foreign control after the date of consent affect jurisdiction? The simpler answer would be to adopt a uniform test for all of Art. 25(2)(b) taking the time of consent as the only critical date. This would also be in line with the different rules on relevant dates in Art. 25(2)(a) and (b). Whereas the first provision, dealing with natural persons, looks at two distinct critical dates (see paras. 1161–1170 supra), the second provision, dealing with juridical persons, only looks at the time of consent (see paras. 1242–1261 supra). This would mean that the company’s situation would be fixed at the time of consent and subsequent changes in control would be irrelevant for purposes of ICSID’s jurisdiction.2235 On the other hand, it would seem somewhat anomalous to maintain ICSID’s jurisdiction if all objective elements for the investor’s foreign nationality have disappeared by the time the proceedings are instituted. A strict adherence to the time of consent as the only critical date would mean that a locally incorporated company which is entirely

2232 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 15; SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 29; LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 349, 351; Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 111; TSA Spectrum v Argentina, Award (19 December 2008) para 162; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 195; Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 596. 2233 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 83, 134. 2234 ibid. 2235 Amerasinghe, ‘How to Use’ (n 26) 541; Amerasinghe (n 878) 266–267.

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controlled by local interests could avail itself of an ICSID clause on the basis of previous foreign control that has since disappeared. Since some host States require a transfer of ownership to themselves or their own nationals or entities over a stated period of time, this situation is quite likely to occur. Also possible is a situation where control over the local company passes from nationals of Contracting States to nationals of non-Contracting States after the date of consent. It has been argued with some persuasiveness that upholding ICSID’s jurisdiction under these circumstances would be contrary to the purposes of the Convention.2236 ICSID tribunals dealing with the critical date for foreign control have generally favored the date of consent, but have also shown some concern for subsequent developments.2237 In Amco v Indonesia, the Tribunal, after recalling the two elements for the application of the second clause of Art. 25(2)(b), namely nationality of the host State and agreement to treat the company as a national of another Contracting State because of foreign control, stated: Now, in the Tribunal’s view, these two conditions were fulfilled in the instance case, at the date on which the parties consented to submit possible future disputes to arbitration (which date is relevant, according to Article 25(2)(b)), and as a matter of fact, are still fulfilled today.2238

1415

1416

In LETCO v Liberia, the Tribunal first confirmed French control at the time the Concession Agreement was signed, but shortly thereafter emphasized the fact of French management ‘at all times’2239 (see para. 1386 supra). The ambivalence towards the critical date for control is also evident in SOABI v Senegal. The Tribunal first determined that at the date of the agreement containing consent to ICSID’s jurisdiction, control over Flexa, the company controlling the local company (see paras. 1373, 1385 supra), was exercised by nationals of a Contracting State, notably of Belgium. It added: As has been observed above, the ‘national of another Contracting State’ criterion must be fulfilled as of the date on which the parties agree to submit the dispute to the Centre. Changes or modifications after this date thus have no effect on whether the condition is satisfied.2240

1417

Having made this categorical statement, the Tribunal continued that ‘it is nevertheless of some interest’ to look into the question of shareholding immediately before the institution of the ICSID proceedings. It proceeded to a detailed analysis of the nationality of the shareholders on the day before the submission of the application for arbitration, which led to the result that over 99 percent of the shares were still in Belgian hands at that date.2241

2236 Tupman (n 1073) 836. 2237 This observation contained in the First Edition of this Commentary is echoed in Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 65. See also TSA Spectrum v Argentina, Award (19 December 2008) para 160. 2238 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 14(ii). 2239 LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 349, 351. 2240 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 41. 2241 ibid.

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In Vacuum Salt v Ghana, the Tribunal declined jurisdiction because there was no foreign control over the local company in the sense of Art. 25(2)(b) (see paras. 1387–1390 supra). It made this finding on the basis of the premise that ‘the conditions of the second clause of Article 25(2)(b) must be fulfilled, at least initially, on the date of consent, in this case 22 January 1988.’2242 Nevertheless, the Tribunal, in a lengthy footnote, dealt with the Respondent’s argument that the requirements of Art. 25(2)(b) must be satisfied also on the date of registration. The Tribunal looked at the available evidence, including previous ICSID decisions, and reached the result that only the date of consent is relevant for the fulfillment of the corporation’s nationality requirements. In doing so, the Tribunal did not differentiate between continued control and the possession of the host State’s nationality. It added the following argument in favor of looking at foreign control only at the time of consent:

1418

[A] municipal corporation of the host State which is granted foreign status under the second clause of Article 25(2)(b) of the Convention, however, could be deprived involuntarily of all foreign ownership through expropriation, and thus, were there a requirement of continuous nationality, could be deprived of its right to ICSID arbitration by the very act which it presumptively would wish to challenge in such a proceeding.2243

Having said all this, the Tribunal admitted that a change of control after the date of consent could have a profound impact on ICSID’s jurisdiction after all:

1419

It cannot be denied, on the other hand, that the prospect would be deeply unsettling, for example, of a State being required to submit to international arbitration under the auspices of ICSID a dispute with a municipal corporation all of whose shares had been freely transferred from aliens to nationals of that State in the interim between the conclusion of an investment agreement including an ICSID clause premised on the second clause of Article 25(2)(b) and the registration of a request for arbitration. In that circumstance the issue is raised as to whether in light of the object and purpose of the Convention an interpretation of the second clause of Article 25(2)(b) permitting the Centre to exercise jurisdiction would lead to a result which is ‘manifestly absurd or unreasonable.’ See Art. 31(1) and 32(b) of the Vienna Convention on the Law of Treaties . . . The Tribunal need not resolve this troubling issue, however, given the further terms of this Award.2244

In later passages of the Award, the Tribunal repeatedly referred to developments concerning control over the Claimant subsequent to consent without reaching a clear result.2245 After examining a shareholders’ meeting on 14 May 1992, two weeks before the institution of ICSID arbitration, in which the alleged foreign controller did not even participate, the Tribunal made the following statement: The Tribunal is conscious, of course, that the date as of which the existence or absence of ‘foreign control’ initially is to be determined is 22 January 1988 and not 14 May

2242 2243 2244 2245

Vacuum Salt v Ghana, Award (16 February 1994) para 29. ibid (referring to History, Vol II, 400–401). Vacuum Salt v Ghana, Award (16 February 1994) para 29. See also Broches (n 2118) 21, 24, 25. Vacuum Salt v Ghana, Award (16 February 1994) paras 43–44, 51–53.

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schreuer’s commentary on the icsid convention 1992. Nonetheless, in the context of the entire record in this case the Tribunal finds the events of 14 May 1992 pertinent.2246

1421

1422

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1424

In Autopista v Venezuela, the relevant change in the nationality of control occurred after the conclusion of the contract that contained the parties’ consent to ICSID jurisdiction. This was not an obstacle to the Tribunal’s jurisdiction, since the parties’ consent was expressly conditional upon the Claimant coming to be controlled by a national of a Contracting State (see paras. 889, 1274, 1316, 1318, 1375, 1376 supra).2247 In the Vivendi case, Argentina had objected to jurisdiction in respect of the first Claimant, CAA, which was an Argentinian company. Argentina alleged that at the date the parties concluded a concession contract, CAA was an Argentine company and that it did not become controlled by French investors until after the dispute had arisen. As such, it would be a ‘fraud on the treaty,’ if CAA was entitled to claim under the Argentina–France BIT.2248 In the original proceedings, the Tribunal had held that CAA was controlled by the second Claimant, CGE, a national of France, from the effective date of the contract.2249 The ad hoc Committee found that CGE controlled CAA at the date of the commencement of proceedings under the BIT, in other words, on the date of consent. It followed that there was no question that the Tribunal lacked jurisdiction over CAA as one of the Claimants in the arbitration.2250 In the resubmitted proceedings, the Tribunal accepted that this conclusion was res judicata.2251 In any event, there had not been any change in control of CAA from the date of the contract through to the date of consent.2252 None of the above cases involved a decisive change of control after the date of consent. Therefore, the Tribunals’ comments on the relevant dates for control are of somewhat limited authority. Moreover, the statements to the effect that the only relevant time is the date of consent are counterbalanced by an apparent unease towards the idea of opening ICSID jurisdiction to juridical persons that have since come under the control of host State nationals. By way of illustration, in Klöckner v Cameroon a change of control occurred between the date of consent and the institution of the arbitration. In 1973, an Establishment Agreement, containing an ICSID clause, was concluded between SOCAME, a joint venture company of Cameroonian nationality, and the Government. At the time, 51 percent of SOCAME’s shares were in the hands of the European investors, whereas 49 percent were held by the host State. In 1978, the European partners lost majority control over SOCAME after a capital increase. When ICSID proceedings were instituted in 1989 by the foreign investor on the basis of an ICSID clause in another contract, SOCAME was named as a co-Respondent with the Government and was designated as

2246 2247 2248 2249 2250 2251 2252

ibid para 53 fn 31. Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 83, 89–91, 117, 142. Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) para 21. ibid, Award (21 November 2000) para 24, fn 6. ibid, Decision on Annulment (3 July 2002) paras 48, 50. ibid, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 71, 97. ibid para 65.

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a constituent subdivision of the State of Cameroon in the course of the proceedings (see paras. 567, 642 supra). Before the Tribunal, the Government relied on the Establishment Agreement of 1973 between itself and SOCAME to press its counterclaim against Klöckner. Klöckner contested jurisdiction based on the Establishment Agreement, since it was, after all, an agreement between the two Respondents. Moreover, SOCAME should not be accepted as a national of another Contracting State, but simply as a Cameroonian company.2253 The Tribunal held that the relevant question was not whether it had jurisdiction ratione personae as regards SOCAME, but whether it had jurisdiction ratione materiae to rule on the application and interpretation of the Establishment Agreement. It found that it had jurisdiction over Klöckner also in respect of the Establishment Agreement, which ‘reflected the contractual relationship between a foreign investor, acting through a local company, and the host country’2254 (see paras. 650–652 supra). The Tribunal concluded that:

1425

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In these conditions, it would be inequitable to accept that Klöckner, having benefited from 1973 to 1978 from the existence of the ICSID arbitral clause, underlying the legal, economic, financial, and fiscal advantages and guarantees granted in the Establishment Agreement, be allowed today to contest ICSID jurisdiction with respect to questions relating to the application of the same Agreement, at least during the 1973–1978 period, when the arbitration clause is invoked by the Government which consented to it.2255

By substituting the foreign controller for the local company, the Tribunal bypassed the entire question of nationality and hence of foreign control. A tendency of tribunals to look beyond the identity of the company named in the consent agreement and to accept jurisdiction in respect of unnamed parent companies (see paras. 643–658 supra) could make the question of control over a local company at a particular time largely irrelevant. In view of the Tribunal’s technique of piercing the veil of the local company, it would be misleading to conclude that ICSID’s jurisdiction over SOCAME survived the change of control after the date of consent. The Tribunal’s reasoning was not based on the situation as it existed at the time of consent. Rather, it assumed jurisdiction directly in relation to the foreign controller in respect of the period during which control did, in fact, exist. Some BITs provide that companies constituted in one State but controlled by nationals of the other State shall be treated as nationals of the other State for purposes of Art. 25(2)(b) (see paras. 1321–1323 supra). Interestingly enough, these BITs specify a relevant time for control other than the date of consent. Thus, the 2008 UK Model Agreement provides that foreign control must be exercised through majority ownership of shares ‘before such a dispute arises’2256 (see para. 1321 supra). Many Dutch and Swiss BITs are similar in this respect in that they refer to foreign control ‘before such a dispute arises’ and ‘prior to the origin of the dispute’ respectively.2257 2253 2254 2256 2257

Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 15. ibid 17. 2255 ibid. UK Model IPPA (2008) Art. 8(2) (Alternative I). Dolzer and Stevens (n 331) 214, 224. The 2019 Netherlands Model BIT has removed the provision containing the Contracting Parties’ standing offer to treat locally incorporated companies as foreign

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The Argentina–United States BIT, in line with other current US BITs, is even more specific. It refers to a company constituted in one State that was an investment of nationals of the other State ‘immediately before the occurrence of the event or events giving rise to the dispute’2258 (see also para. 1322 supra). The choice of these dates was made with a view to compulsory changes of control by the host State, i.e. expropriations. It is not clear who would bring a claim to ICSID after such an event. It must be expected that the host State would exercise its newly acquired control to prevent this. But the tendency of ICSID tribunals to admit unnamed parent companies (see paras. 643–658 supra) and to admit shareholders as claimants (see para. 284 supra) would appear to make this problem surmountable. The multilateral instruments containing ICSID clauses (see paras. 863–874 supra) also deal with the problem of host State companies under foreign control (paras. 1324, 1408 supra). Of these, only the ECT addresses the time of control. Its Art. 26(7) extends the status of a ‘national of another Contracting State’ under Art. 25(2)(b) of the ICSID Convention to companies that have the host State’s nationality on the date of consent and that are controlled by the foreign investor ‘before a dispute . . . arises’ (see para. 1324 supra). The solution chosen in these treaties appears to be rational and is clearly preferable to a rigid adherence to the date of consent only. If the locally incorporated investor expresses its consent by taking up a standing offer contained in host State legislation or a treaty, the date of consent is the date at which the request for conciliation or arbitration is submitted to the Centre (see paras. 815, 850, 882 supra). In a situation of this kind, the selection of a critical date for control before the outbreak of the dispute may be valuable, if the dispute arises from a compulsory change of control. But even if consent was perfected before the events giving rise to the dispute, there is no convincing reason why the situation with regard to control over the locally constituted company must be frozen at the date of consent for purposes of ICSID’s jurisdiction. Successive tribunals, while choosing the date of consent as the critical date, have expressed their unease about the rigidity of this rule and about its possible consequences. This is most evident in Vacuum Salt, where the Tribunal, after adopting the date of consent as the only relevant date, admits that this may lead to a result that is manifestly absurd or unreasonable (see para. 1419 supra). Changes in control after the measures in dispute, but prior to the date of consent, featured in Eskosol v Italy. The case was filed under the ECT by an Italian corporation in liquidation. Prior to and at the time of the measures challenged in that case, which occurred in March and May 2011, Eskosol was controlled by its 80 percent shareholder Blusun, a Belgian company.2259 Art. 26(7) of the ECT extends the status of a ‘national of another Contracting State’ under the second part of Art. 25(2)(b) of the Convention to companies that have the host State’s nationality ‘before a dispute . . . arises.’ In the light of this, Italy did not dispute that Eskosol was under foreign control until at least

entities because of foreign control and has accordingly restricted its definition of ‘national’ of a Contracting Party (see Art. 1(b)). 2258 Argentina–United States BIT (n 32) Art. VII(8). 2259 Eskosol v Italy, Decision under Rule 41(5) (20 March 2017) para 87.

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December 2012.2260 Italy did, however, dispute that Eskosol was under foreign control on the later date of consent, when the proceedings were commenced. In fact, it was undisputed that ‘on the date on which the parties consented to submit’ the dispute to arbitration, 9 December 2015, Eskosol was in liquidation. Italy argued that the entry into ‘bankruptcy proceedings following the challenged State measures divested [Eskosol] of the uncontroverted foreign control it enjoyed prior to bankruptcy.’2261 In approaching the matter, the Tribunal identified the issue as having two necessary components: The first is whether it would be inconsistent either with the text of Article 25(2)(b) or with the purposes of the ICSID Convention to accept jurisdiction based on foreign control connected to the date a dispute arises (the ECT test), rather than the date of consent to arbitration. The second is how the existence of foreign control should be evaluated for purposes of the ICSID Convention, and whether it would be inconsistent with the purposes of the ICSID Convention to accept jurisdiction over a claim filed by a local company after its entry into bankruptcy proceedings in the host State.2262

As regards the first issue, the Tribunal remarked that a strict grammatical interpretation could lead to the conclusion that there was ‘no intention by the Convention’s drafters to mandate foreign control as of the date of consent, instead leaving that temporal issue – like the definition of “foreign control” itself – to discussion between the parties.’2263 However, following a contextual interpretation of the Convention, the Tribunal appeared to prefer the view that there must be a foreign element to the claimant, that is, foreign control, at the date of consent:

1432

If this interpretation were adopted, then the question would be whether such an implicit requirement is mandatory for purposes of the Convention, thereby precluding the parties from agreeing to any contrary date for demonstrating foreign control, such as appears to have been done in Article 26(7) ECT by its reference to the time before the dispute arises.2264

Ultimately, the Tribunal found that it did not have to resolve this temporal issue for the purposes of deciding Italy’s application for dismissal under Rule 41(5), because Italy’s application also depended ‘on the proposition that Eskosol’s entry into bankruptcy proceedings . . . divested it of the uncontroverted foreign control it enjoyed prior to bankruptcy.’2265 Finding that Italy could not demonstrate ‘in any event, a loss of foreign control over Eskosol even as of the date of consent,’ the Tribunal dismissed Italy’s application.2266 The Tribunal explained that the interpretation of Art. 25(2)(b) could have significant implications for future cases:

2260 2262 2264 2265

ibid. 2261 ibid para 100. ibid para 91. 2263 ibid para 94. ibid para 95. See also Eskosol v Italy, Award (4 September 2020) paras 234–235. Eskosol v Italy, Decision under Rule 41(5) (20 March 2017) para 100. See also ibid para 105 (noting that ‘[i]t would not be consistent with the underlying purposes of the Convention to render an otherwise qualified foreign-owned entity suddenly ineligible to access its protections, simply because the entity’s liabilities eventually overtake its assets enough to justify (at least temporary) supervision of its activities to protect the rights of creditors’). See also Eskosol v Italy, Award (4 September 2020) paras 236. 2266 Eskosol v Italy, Decision under Rule 41(5) (20 March 2017) paras 99, 108.

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schreuer’s commentary on the icsid convention First, as Italy contends, an approach that permits the parties to agree to jurisdiction so long as there is foreign control ‘before a dispute . . . arises’ (the language in Article 26(7) of the ECT) could be stretched to imply at any time before the dispute; this arguably would enable a local company to invoke ICSID arbitration simply on the basis of some historic foreign ownership that had ceased to exist, such as by voluntary sale, well before the State measures that gave rise to the parties’ dispute. Even if Article 26(7)’s ‘before’ language were read implicitly to mean ‘immediately before’ or ‘as of the moment’ a dispute arises – a reading that Eskosol urges – dispensing with a requirement that foreign control persist at least through the date of consent could have other consequences. Among other things, it could facilitate the buying or selling of ICSID claims, by recognizing that once a local company owned by a foreign investor has been affected by a State measure, that company would retain standing to sue the State at any time in the future, even after being sold to new owners who are host State nationals with no element of foreign control whatsoever. . . . But the fact remains that all interpretations of arguably ambiguous treaty language have potential doctrinal consequences for future cases that should not be lightly ignored.2267

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Whilst the Eskosol case casts doubt on the permissibility of the adoption by agreement of the parties (see para. 1325 supra) of an additional date at which the requirement of foreign control must be fulfilled, there is nothing in the Convention preventing the parties from doing so. In fact, the parties are free to agree on conditions to their consent to ICSID’s jurisdiction, in addition to those provided by the Convention, as long as these conditions are not contrary to the Convention’s mandatory rules (see paras. 981–998 supra). The adoption of the requirement that ‘foreign control’ in the sense of Art. 25(2)(b) must have existed immediately before the outbreak of the dispute is highly advisable and does not in principle appear to conflict with the Convention’s mandatory provisions. Indeed, in United Utilities v Estonia, a case under the Estonia– Netherlands BIT, which, similar to the ECT, provides that a local entity must be under foreign control ‘before such a dispute arises,’ the Tribunal examined control both at the time of the alleged violations and at the time of consent, when the request for arbitration was filed.2268 Even without an explicit clause in the Convention naming a second relevant date for the existence of foreign control, ICSID tribunals will have to come to terms with the possibility of a decisive change of control after the date of consent. The starting point should remain the date of consent. An agreement to treat the local company as a national of another Contracting State should be accepted only if the local company was indeed under such foreign control at the time the agreement was made. But the investigation should not stop there. Subsequent changes in control should be taken into account under

2267 ibid paras 96–98. See also Carnegie Minerals v The Gambia, Decision on Representation (7 October 2016) paras 38, 45 (‘at the time of consent to arbitration, the parties had agreed that Carnegie, a company incorporated under the laws of Gambia but with Australian control, met the requirements of Article 25(2)(b) and thus could bring a claim against The Gambia . . . there is no basis in the Convention for concluding that the question of representation of a claimant who is a deemed “national of another contracting state” under Article 25(2)(b) is to be decided by application of the domestic law of the respondent state. Accordingly, the Committee concludes that the issue of representation is not to be determined under Gambian law, and thus the appointment of a liquidator for Carnegie does not resolve the question of who represents Carnegie in this case’). 2268 United Utilities v Estonia, Award (21 June 2019) paras 348 ff, 420.

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certain circumstances. A change of control should not be considered relevant if it takes place among nationals or groups of nationals of Contracting States other than the host State. The exact nationality of the foreign controlling interest is not material as long as there is control by nationals of ‘another Contracting State’ or even of several Contracting States (see paras. 1363, 1364 supra). Even if the originally controlling nationality has been named in the agreement between the parties (see paras. 1303–1318 supra), such a change should not affect jurisdiction. The situation is different if there is a voluntary change of control into the hands of nationals of the host State. The title of the Convention itself, the history of the Convention (see paras. 1146–1160 supra), the Preamble, and the wording of Art. 25 all make it clear that the Centre will not be available for disputes between States and their own nationals. The exception for locally established corporations is conditioned on the existence of foreign control. As soon as the condition for the exception disappears, jurisdiction can no longer be sustained. Similarly, a specific decision was made in the course of the Convention’s preparation to exclude nationals of non-Contracting States from access to the Centre (History, Vol. II, p. 868) (see paras. 600, 1230 supra). Therefore, foreign control in the sense of Art. 25(2)(b) means control by nationals of another Contracting State. Control by nationals of non-Contracting States does not qualify (see paras. 1348–1369 supra). It follows that a change of control to nationals of non-Contracting States would terminate ICSID’s jurisdiction. Despite the choice made in the treaties cited above (paras. 1428, 1429 supra), the more logical date for the examination of foreign control would be the date of registration of the request for conciliation or arbitration. This is the last practical date for the commission or tribunal to examine the factual conditions for jurisdiction. Even if the company was still under foreign control until just before the dispute arose, there is no convincing reason to give it access to the Centre if control has since changed into the hands of host State or non-Contracting State nationals. But it must be understood clearly that forcible acquisition of control over the local company by the host State through expropriation or similar measures would not affect jurisdiction. Such eventualities are covered by the last sentence of Art. 25(1), which prohibits direct as well as indirect withdrawal of consent (see para. 1106 supra). Moreover, as made clear in Eskosol, even bankruptcy proceedings, or involuntary liquidation that may otherwise divest a local entity of its foreign control, even if unconnected to any State measure, should not prevent a claim when foreign control existed at the time of the crystallization of the dispute (see paras. 1431–1433 supra).

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6. Consequences of Agreement on Nationality The last part of Art. 25(2)(b) provides for treatment of the local company as a national of another Contracting State ‘for the purposes of this Convention.’ This phrase was not contained in the First Draft, which first provided for the possibility of an agreed foreign nationality for companies established in the host State (History, Vol. I, p. 124). It was added upon the suggestion of Mr. Broches ‘as a matter of drafting’ without any further explanation or discussion (History, Vol. II, p. 869). The Executive Directors’ Report refers to the second clause of Art. 25(2)(b) only in the context of eligibility to become a party to ICSID proceedings (see para. 1265 supra).

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Nevertheless, the words ‘for the purposes of this Convention’ indicate that the consequences of the agreement on nationality based on foreign control extend beyond the confines of jurisdiction, as defined in Art. 25, to all provisions of the Convention in which nationality is relevant. Arts. 38, 39 and 52(3) exclude nationals and co-nationals of parties to the dispute from appointments as arbitrators or members of an ad hoc committee under certain circumstances. In SOABI v Senegal, for instance, the Tribunal clearly assumed that the nationality of the controllers was relevant for the constitution of the tribunal. The parties had appointed by agreement a Belgian, a Senegalese and a Swiss national as arbitrators. The Tribunal noted that, under Art. 39 of the Convention, an agreement on each individual member of a tribunal is only necessary if the majority of the arbitrators are nationals or co-nationals of the parties to the dispute. From the designation by mutual consent, it followed that the parties had recognized SOABI, a company established in Senegal, as a national of Belgium due to its control by Belgian nationals.2269 The logic of this reasoning was the subject of some debate in the Dissenting Opinion and a Declaration of the Tribunal’s President.2270 But the underlying assumption of the relevance of the controller’s nationality for the rules restricting or excluding certain nationals from appointment to tribunals or ad hoc committees was never cast into doubt. The application of the exclusionary rules for appointments based on nationality also to co-nationals of controllers under Art. 25(2)(b) seems perfectly reasonable and in line with the spirit of these rules. Unfortunately, there are some practical problems. The nationality of the controllers may not be known with certainty at the time of the tribunal’s constitution. There is no need to specify the controlling nationality in the agreement to treat the company established in the host State as a national of another Contracting Party (see paras. 1303–1318 supra). The parties frequently do not specify the controlling nationality and ICSID tribunals have held that there is no need to do so (see paras. 1307–1318 supra). The ICSID Secretariat will require the requesting party to specify the nationality(ies) of the foreign controller(s) before registering the request (see para. 1304 supra). But registration is based on the submissions of the requesting party, which may turn out to be incorrect. Tribunals have investigated the precise circumstances of control (see paras. 1331–1401 supra), but, obviously, this is possible only after a tribunal has been constituted. The situation is further complicated by the fact that the local company may be controlled jointly by nationals of several States (see paras. 1305, 1363, 1364, 1403 supra). In addition, there may be several layers of control whereby the immediate controller is controlled by nationals of other States (see paras. 1370–1380 supra). Finally, control may have shifted from nationals of one State to nationals of another State between the date of consent and the institution of ICSID proceedings (see paras. 1410–1438 supra). All these factors make it impossible to determine the nationality of the controllers with absolute certainty at the time of the tribunal’s constitution. The only practical suggestion that can be made is to steer clear of co-nationals of possible controllers in the appointment of arbitrators when applying Arts. 38 and 39. 2269 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 42. 2270 ibid, Declaration Broches (1 August 1984) paras 67–73, and ibid, Dissenting Opinion Mbaye (25 February 1988) paras 8–10.

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The information available at the time of the tribunal’s constitution may not permit an accurate determination of the controllers’ nationality, but will most probably offer some clues as to possible nationalities. These should be avoided as far as possible. The appointment of members of an ad hoc committee under Art. 52(3) would appear to be less problematic. By the time a case is ready for a request for annulment, the nationality of any foreign controllers should have been clarified. O. ‘(3) Consent by a constituent subdivision or agency of a Contracting State shall require the approval of that State unless that State notifies the Centre that no such approval is required.’

1. Art. 25(3) as a Jurisdictional Requirement ICSID’s jurisdiction in respect of a constituent subdivision or agency of the host State is subject to two requirements in addition to the subdivision’s or agency’s consent: first, the subdivision or agency must have been designated to the Centre in accordance with Art. 25(1) (see paras. 523–571 supra) and, second, approval of the subdivision’s or agency’s consent to jurisdiction must have been given specifically by the host State, or waived, as provided for in Art. 25(3). This applies only to constituent subdivisions and agencies acting on the side of the host State, not to those acting as investors in third States.2271 Art. 25(3) thus contains an additional jurisdictional requirement in case a constituent subdivision or agency, which has been designated as such to the Centre, is party to a conciliation or arbitration proceeding. It applies independently of whether the subdivision or agency in question is a respondent or claimant in an ICSID proceeding.2272 Whether the conditions under Art. 25(3) have been met forms part of the SecretaryGeneral’s screening powers under Arts. 28(3) and 36(3) of the ICSID Convention.2273 Art. 25(3) does not, by contrast, constitute a rule of attribution concerning the conduct of subdivisions or agencies to their Contracting State.2274 The character of Art. 25(3) as an additional jurisdictional condition for ICSID proceedings involving constituent subdivisions or agencies as disputing parties on the side of the host State has been confirmed consistently in the jurisprudence of ICSID tribunals. As put succinctly in Generation Ukraine v Ukraine: Article 25(3) relates to the consent of the respondent State to the participation of a ‘constituent subdivision or agency’ of that State in ICSID proceedings. This is a

2271 This becomes clear from a systematic reading of Art. 25(3) in connection with Art. 25(1). The constituent subdivisions or agencies referred to in Art. 25(3) are those that Art. 25(1) requires to be designated as such on the side of the host State. See Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 319–329. See also Flughafen Zürich v Venezuela, Award (18 November 2014) paras 287–290. 2272 Flughafen Zürich v Venezuela, ibid para 290, incorrectly considered that Art. 25(3) only concerns the legitimation to act as respondent, not claimant. For an example where an agency acted as claimant and where the Tribunal determined the existence of approval pursuant to Art. 25(3), see TANESCO v IPTL, Award (12 July 2001) para 13. 2273 For an example where registration of a request for arbitration has been refused, inter alia, because of the lack of approval pursuant to Art. 25(3), see Hamester v Ghana, Award (18 June 2010) para 62. 2274 Cf Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 74.

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schreuer’s commentary on the icsid convention necessary prerequisite for investment disputes where the investor alleges a breach of an obligation owed by the ‘constituent subdivision or agency’ in its own capacity.2275

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The purpose of Art. 25(3), together with the designation of such entities required by Art. 25(1) (see paras. 523–571 supra), is to extend the use of ICSID proceedings by and against subdivisions and agencies. Art. 25(3) does not apply to proceedings involving a Contracting State as a disputing party, even if the investment dispute in question relates to a contract with, or arises out of conduct of, a constituent subdivision or agency. As held by the Tribunal in Vivendi v Argentina: 51. . . . Article 25(3) does not restrict the subject matter jurisdiction of the Tribunal; rather, it creates potential efficiencies in operations of ICSID by establishing, with approval of the central government, the right of such agencies or subdivisions to be parties in their own right to an ICSID proceeding. 52. . . . Articles 25(1) and (3) . . . were designed to permit the expansion of the scope of ICSID arbitration ratione personae to include subdivisions and agencies of a Contracting State. This enlargement of the Centre’s jurisdiction occurred without in any respect restricting ICSID jurisdiction ratione materiae over claims against a Contracting State arising from actions of such subdivisions or agencies that are alleged to be attributable to the Contracting State. . . . Article 25 consequently provided a method for giving these entities standing for purposes of ICSID arbitration as long as their Contracting State had given its consent thereto.2276

2. Approval of Consent a) Need for Approval 1450

The need to have the subdivision or agency’s consent approved by the host State was perceived early on in the debate on the admission of government entities to party status (History, Vol. II, pp. 258, 288, 321, 396, 492, 502) (see paras. 535–536 supra). This was intended as ‘a screening process, so that governments could withhold their approval where the “instrumentality” should really not be considered as a governmental agency but an ordinary company’ (History, Vol. II, p. 503). Initially, when access to the Centre by political subdivisions or agencies was included in the First Draft, there was no mention of a designation procedure; subdivisions and agencies were instead included as possible parties to disputes subject to ICSID’s jurisdiction without more (History, Vol. I, pp. 116, 126). After the adoption of the requirement for the designation to the Centre of a constituent subdivision or agency as a response to concerns raised by several delegations about the resulting international legal personality of such sub-State entities (see para. 537 supra), the question arose whether an additional approval by the host State of the consent by the designated entity might not be dispensed with altogether

2275 Generation Ukraine v Ukraine, Award (16 September 2003) para 10.5. Similarly confirming that Art. 25(3) is of a jurisdictional nature, Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 2.22, 2.33; Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 63; SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 29, fn 6; Churchill Mining v Indonesia, Procedural Order No 2 (Request for Joinder) (5 February 2013) para 23; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 258; Pluspetrol v Perupetro, Award (21 May 2015) paras 14–15. 2276 Vivendi v Argentina, Award (21 November 2000) paras 51–52 (internal references omitted – the Award was partially annulled, albeit on unrelated points).

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(History, Vol. II, pp. 657, 667, 859, 860, 867).2277 In a show of hands, the view prevailed that approval would still be necessary since a designation would not necessarily imply approval in specific cases (ibid., p. 858). In addition, the possibility to waive approval of consent would provide a means to Contracting States effectively to dispense with the need for approval. The discussions during the preparation of the ICSID Convention make clear that designation and approval are two distinct acts with different functions. Whereas designation accounts for the reality that many foreign investment projects are implemented through contracts between investors and sub-State entities, and for this purpose extends limited international legal personality to them by providing for the abstract capacity of such entities to be party to an ICSID proceeding,2278 approval is a necessary element of jurisdiction ratione personae for a concrete proceeding. It ensures that the host State maintains control over which of its subdivisions and agencies concretely are permitted to have access to ICSID’s jurisdiction (see paras. 523–524 supra). In this regard, as the Tribunal in Niko Resources v Bangladesh stated, the requirement of approval under Art. 25(3) serves a ‘gate-keeping function.’2279 Given the conceptual difference between designation and approval, approval cannot be inferred from the existence of a designation. The abstract capacity of being a party to an ICSID proceeding does not, as Art. 25(3) makes clear, imply concrete approval of personal jurisdiction in every individual case. By contrast, it is arguable that the concrete approval of consent that is notified to the Centre may be interpreted, under certain circumstances, as implying acceptance by the host State that a subdivision or agency has the capacity to be party to an ICSID proceeding and hence as an ad hoc designation of the constituent subdivision or agency in the sense of Art. 25(1) (see paras. 555–557 supra). This was held to be the case by the Tribunal in Niko Resources v Bangladesh: If the State has not already conferred this capacity [to be a party to an ICSID arbitration] on the agency by an earlier (general) designation, the approval necessarily must include the intention to confer this capacity on the agency by an ad hoc designation. Assuming the contrary would mean that the State, when granting its approval of the agency’s consent, intended to leave this approval without effect. It would require very strong evidence to establish that a State intended to act in such contradictory fashion. Even then, it is doubtful that such a contrary intention should be given effect in view of the overriding principle requiring good faith conduct.2280

2277 The reasons for this mainly related to isolating problems that were internal to certain Contracting States from the international plane. Requiring approval by federal States was said to raise constitutional obstacles if the matter fell into the exclusive competence of constituent States; in addition, the approval requirement could result in frustrating access to arbitration if a subdivision or agency had incorrectly held itself out as competent to agree to ICSID arbitration. 2278 For this qualification, see already Amerasinghe (n 878) 234–235. 2279 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 324. 2280 ibid para 302. In Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 255–258, the Tribunal did not address such arguments, possibly also because of the ambiguous wording of the designation provisions in the agreements in question, which had been concluded prior to Cambodia’s accession to the ICSID Convention and referred to designations to be made once Cambodia would accede to the Convention.

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Arbitral practice on the approval by the host State of consent by a constituent subdivision or agency is scant. In Cable TV v St Kitts and Nevis, jurisdiction was denied because the constituent subdivision or agency had not been designated under Art. 25(1) (see para. 531 supra). The Tribunal added that there was also no approval of the constituent subdivision’s consent.2281 In Noble Energy v Ecuador, CONELEC had been designated to the Centre as an agency of the State for purposes of Art. 25(1) (see paras. 541, 570 supra). The Tribunal noted that CONELEC’s consent to ICSID arbitration, contained in a concession contract, had also been approved by the State.2282 In TANESCO v IPTL, the Tribunal simply noted that Tanzania had designated TANESCO as an agency and approved TANESCO’s consent to ICSID arbitration, which was contained in an agreement made separately with IPTL.2283 By contrast, in Standard Chartered Bank v TANESCO, a dispute that concerned rights under the same power purchase agreement that IPTL had assigned to Standard Chartered Bank (Hong Kong) (see also para. 687 supra), the Tribunal only noted that TANESCO had been designated as an agency, but did not determine separately whether Tanzania had approved TANESCO’s consent to ICSID arbitration under the contract.2284 In Niko Resources v Bangladesh, the Tribunal accepted that approval by the host State of the agencies’ consent, as required by Art. 25(3), was given, as the ICSID clauses had been introduced into the agreements by the Government, as the Government had subsequently expressly approved those agreements containing the ICSID clause without qualification, and since none of the Respondents, which included the host State itself, had questioned that approval had been given.2285

b) Form and Validity of Approval 1457

The Convention does not require any particular form for the approval of consent to be valid. In particular, unlike designation of the constituent subdivision or agency (see paras. 554–555 supra), and unlike waiver of approval (see paras. 1465–1468 infra), the approval need not be communicated to the Centre. In principle, approval is a unilateral act of the host State that need not be formally communicated to anyone in order to be valid.2286 For practical reasons, it is desirable, however, that the foreign investor, and the constituent subdivision or agency, are informed of the approval, so that they may rely on the validity of consent.2287 An investor will be well-advised to insist on approval by the State prior to, or simultaneously with, the consent agreement.

2281 Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.33. A similar consideration may have motivated the Tribunal in LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 351, 354, to decline jurisdiction over a government agency, when it pointed to the lack of Liberia’s consent to the agency’s participation. 2282 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 179–182. 2283 TANESCO v IPTL, Award (12 July 2001) para 13. 2284 See Standard Chartered Bank v TANESCO, Decision on Jurisdiction and Liability (12 February 2014) paras 3, 110, 152–153. Given the existence of approval by Tanzania expressed in the separate agreement with IPTL mentioned in TANESCO v IPTL, Award (12 July 2001) para 13, and absent any objection to this effect, it can be assumed that Art. 25(3) was in fact complied with. 2285 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 262, 335–336, 344–345. 2286 Amerasinghe (n 878) 236–237. 2287 Amerasinghe, ‘Submissions’ (n 26) 224 ff.

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Approval may be contained in a separate agreement between the host State and the investor. Or the approval may be contained in an instrument of designation communicated to the Centre.2288 It may be practical to obtain approval by way of making the host State a party to the consent agreement.2289 Alternatively, written approval by the host State may be affixed directly to the agreement between the constituent subdivision or agency and the investor. In addition, the consent clause may confirm that the investor’s partner is indeed a designated subdivision or agency. Approval of consent may also be the result of a government-internal approval procedure.2290 It is also conceivable that approval is expressed in national legislation or in an investment treaty entered into by the host State. The Model Clauses of 1993 offer the following choices for agreements to which the central government is party to express approval of consent of a constituent subdivision or agency:

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Clause 5 The name of constituent subdivision or agency is [a constituent subdivision]/[an agency] of the Host State, which has been designated to the Centre by the Government of that State in accordance with Article 25(1) of the Convention. In accordance with Article 25(3) of the Convention, the Host State [hereby gives its approval to this consent agreement]/[has given its approval to this consent agreement in citation of instrument in which approval is expressed]/[has notified the Centre that no approval [of this type of consent agreement]/[of consent agreements by the name of constituent subdivision or agency] is required].2291

In Noble Energy v Ecuador, the Tribunal noted that the designated agency’s director was entitled and authorized by law to consent to international arbitration, without, however, referring specifically to ICSID arbitration. In addition, the concession contract containing the agency’s consent to ICSID arbitration was signed by the President of Ecuador as a ‘witness of honour,’ thereby approving the agency’s consent.2292 In TANESCO v IPTL, the State’s approval was included in an agreement made separately between the foreign investor and the host State a few days after the agreement between the investor and the host State agency.2293 The approval must also be valid otherwise. As the Convention does not require communication or notification of the approval to the Centre, a question may arise as to whether the host State’s entity that has authored the approval was competent to do so under the host State’s internal law. Similarly, collusion between an investor and the host State’s constituent subdivision or agency in procuring a formally valid, but substantively defective approval that is contrary to the host State’s laws, may affect the validity

2288 For a combined designation and approval clause see Art. 7.10 of the 1982 participation agreement between New Zealand and Mobil Oil NZ Ltd, cited in Attorney-General v Mobil Oil NZ Ltd, High Court Wellington (1 July 1987) (1997) 4 ICSID Reports 117, 123–124. 2289 Delaume, ‘Le Centre’ (n 163) 795; Amerasinghe (n 878) 236 ff. 2290 Amerasinghe (n 878) 237. 2291 (1997) 4 ICSID Reports 361. See also Clause IV of the 1968 Model Clauses, (1968) 7 ILM 1159, 1165–1166; Clause VI of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 201–202. 2292 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 179–182. 2293 TANESCO v IPTL, Award (12 July 2001) paras 3, 8, 13.

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of the approval.2294 Arbitral tribunals and conciliation commissions have the competence to review that validity.2295 In doing so, they must recognize that approval pursuant to Art. 25(3) is a requirement for jurisdiction under international law that is closely connected to compliance with the host State’s domestic law, which must hence be taken into account.2296

c) Time of Approval 1462

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The Convention does not specify at what time the host State’s approval of the consent given by one of its constituent subdivisions or agencies must be obtained. Approval may be given in advance of consent or thereafter. But it should be kept in mind that the validity of consent by a constituent subdivision or agency depends on its approval. Therefore, the actual date of consent is not before its approval (see para. 885 supra). The date of consent triggers a number of consequences under the Convention (see paras. 890–893 supra). In Noble Energy v Ecuador, approval of consent was given simultaneously with the consent. Both were contained in the same concession contract to which the State was also a party.2297 In TANESCO v IPTL, the State’s approval was given subsequently to the agency’s consent in a separate agreement with the foreign investor.2298 It is imperative that approval of consent has been given by the time ICSID proceedings are instituted. Rule 2(1) of the Institution Rules requires that a request for conciliation or arbitration shall not only state that a constituent subdivision or agency has been designated to the Centre, but shall also indicate information on the approval of consent (see paras. 565, 895–896 supra). Under Rule 2(2) of the Institution Rules, this information must be supported by documentation. Failure to provide this information in the request will lead to its rejection by the Secretary-General in accordance with his or her screening power under Arts. 28(3) and 36(3) of the Convention.2299 Under certain circumstances, it would seem possible, however, that the lack of approval can be cured subsequently to the initiation of ICSID proceedings.2300

3. Waiver of Approval 1465

The possibility of a notification to the Centre that no approval of consent to jurisdiction by a constituent subdivision or agency is required arose not from a feeling that such an approval might be unnecessary, but rather from the perception that under some constitutions approval would be impossible. Several delegates pointed out that, if matters are within the exclusive competence of a constituent subdivision, it would be unconstitutional under some constitutions to require the approval by the central government (History, Vol. II, pp. 289, 858, 859). In reaction to these misgivings, Mr. Broches

2294 2296 2297 2298 2299 2300

Amerasinghe (n 878) 238. 2295 ibid 237. Cf East Kalimantan v PT Kaltim Prima Coal, Award (28 December 2009) paras 165–168. Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 178–182. TANESCO v IPTL, Award (12 July 2001) paras 3, 8, 13. For an example, see Hamester v Ghana, Award (18 June 2010) para 62. Cf Cable TV v St Kitts and Nevis, Award (13 January 1997) para 2.30 (referring to the validity of a designation in Klöckner v Cameroon of an agency of the host State made after the initiation of an ICSID arbitration). See further para 567 supra.

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suggested that the approval should be required except where the Contracting State notifies the Centre that no approval is required (ibid., pp. 859, 860). This solution was adopted in the Revised Draft (History, Vol. I, p. 126) and remained unchanged in the Convention. The notification that no approval is required is normally made in general terms for the future in respect of all consents given to ICSID proceedings by a particular constituent subdivision or agency. It may be limited, however, if the Contracting State so chooses, to certain types of consent agreements or even to a specific consent agreement. Functionally, a notification by the host State that no approval of such a specific consent agreement is required is barely distinguishable from actual approval. But it may satisfy constitutional requirements in the host State if the subdivision or agency has exclusive competence under domestic law and if no advance notice has been given that approval is not required. Notifications that no approval is required can also be used in respect of draft contracts. The Centre has published a list of designated constituent subdivisions and agencies as document ICSID/8-C; this list does not include ad hoc designations though (see para. 554 supra). The document also indicates in respect of which subdivisions or agencies Contracting States have notified the Centre that approval of consent is not required. These notifications were made on the occasion of the designation of the respective subdivisions or agencies. Such notifications were made by Australia, Canada, Indonesia, Peru, Portugal, and the United Kingdom. In the case of Australia, Canada, Indonesia, and the United Kingdom, the notifications concern constituent subdivisions, that is, territorial units. In the case of Peru and Portugal the notifications concern agencies. All of these six countries have made the notifications with respect to all subdivisions or agencies designated by them, with the exception of the United Kingdom, which has waived the approval of consent only in respect of Guernsey and Jersey, but not other dependencies. The countries that have not given notification that no approval of consent is necessary (Guinea, Kenya, Madagascar, Nigeria, Sudan, and Turkey) have all designated agencies and not constituent subdivisions. Ecuador, when still a Contracting State, had designated two agencies pursuant to Art. 25(1) without waiving approval of consent pursuant to Art. 25(3). In the scant dispute settlement practice, waivers of approval under Art. 25(3) have not raised any difficulties. In Pluspetrol v Perupetro, the Tribunal accepted jurisdiction over an agency that Peru had designated together with a notification that no approval of consent was required.2301

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4. Consequences of Approval and Waiver for the Host State Art. 25(3) does not explicitly address whether the approval of consent by a constituent subdivision or agency, once given, or the notification that no such approval is necessary, can be withdrawn or revoked by the Contracting State. As a unilateral act, approval, or the waiver of it, is not per se irrevocable; it may, however, become binding in different scenarios, for example, if it is given in an instrument that is itself binding in relation to the investor or its home State, such as an investor–State contract or an

2301 See Pluspetrol v Perupetro, Award (21 May 2015) paras 14–15.

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investment treaty. It may also become binding in case the investor, or the subdivision or agency, rely on the approval, or the waiver, for example by incurring expenditure.2302 In any event, once the consent by the constituent subdivision or agency has become binding, that consent is protected by the prohibition in Art. 25(1) to withdraw consent unilaterally; the subdivision’s or agency’s consent cannot be invalidated through a subsequent retraction of the consent’s approval by the host State or its waiver (see paras. 571, 1076–1077 supra). There was some debate during the Convention’s drafting on whether the host State itself would assume responsibilities as a consequence of approving the consent by one of its constituent subdivisions or agencies (History, Vol. II, pp. 288, 289, 321).2303 It was made clear, however, that approval of consent would not amount to consent to jurisdiction by the host State itself. Therefore, even if the host State had interfered in the investment activity, it would be impossible to bring it before the Centre without its independent consent (ibid., pp. 410, 411, 564, 704). Without more, the host State’s obligation would be limited to ensuring the enforcement of an award against its constituent subdivision or agency (ibid., pp. 858, 859, 990). The situation may be different if the host State abolishes or otherwise eliminates the procedural capacity under the ICSID Convention of a constituent subdivision or agency after having given approval of consent.2304 In such a case an argument may be made that the host State is substituted for its constituent subdivision or agency for purposes of ICSID’s jurisdiction (see also paras. 635–641, 1076–1077 supra). P. ‘(4) Any Contracting State may, at the time of ratification, acceptance or approval of this Convention or at any time thereafter, notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. The Secretary-General shall forthwith transmit such notification to all Contracting States. Such notification shall not constitute the consent required by paragraph (1).’

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Art. 25(4) is the final paragraph of the provision addressing the jurisdiction of the Centre. It establishes a mechanism by which Contracting States can notify the Centre formally2305 of the types of disputes they would or would not consider submitting in the future for resolution under the Convention. During the negotiation of the Convention, the introduction of this notification mechanism was of great importance in securing wide acceptance of the ICSID Convention by capital-importing and capital-exporting States (see paras. 1473–1481 infra). In actual practice, Contracting Parties have, however, made only scant use of Art. 25(4) notifications to tailor ICSID’s jurisdictional reach (see paras. 1482–1486 infra). This may be due not least to the limited jurisdictional effect Art. 25(4) notifications have rightly been given in arbitral jurisprudence (see paras. 1487–1505 infra). This notwithstanding, Art. 25(4) has important functions that remain underappreciated (see paras. 1506–1507 infra).

2302 See Amerasinghe (n 878) 237–239. 2303 See also ibid 238–239. 2304 See ibid 239–241. 2305 Notification has also been described as ‘a formal act of communication.’ See Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 275.

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1. Drafting History The possibility for States to make known in advance which classes of disputes they would or would not consider submitting to ICSID’s jurisdiction arose from the more general debate about the scope of the Centre’s jurisdiction and the question of whether the notion of ‘investment’ should be defined in the Convention.2306 Especially representatives of capital-importing countries were in favor of a strict limitation of the types of disputes that the Centre might be allowed to take up, inter alia, by including a precise and narrow definition of protected investments (see paras. 163–169 supra). Representatives of capital-exporting countries, by contrast, favored abstaining from any definition of investment, leaving the scope of jurisdiction entirely to the State’s consent. Despite the insistence of Mr. Broches that States are entirely free to shape their consent to jurisdiction according to their own wishes and to withhold consent from matters they considered inappropriate (see paras. 6, 760 supra), there was a widespread feeling that participation in the Convention as such would suffice to create expectations and pressure on host States to give consent (History, Vol. II, pp. 57–58, 82, 83, 259, 260, 285, 471, 494, 499, 501, 540, 541, 548, 566, 653, 660, 700, 703, 704, 822). In response to these fears, Mr. Broches suggested that the States might make announcements in general terms, and for purposes of information only, as to the types of disputes in respect of which they would consider giving consent (History, Vol. II, pp. 54, 59, 377, 497, 499, 541, 567, 711, 822; see also ibid., pp. 412, 665, 973). This suggestion found expression in the First Draft in the following terms:

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Article 29 Any Contracting State may at any time transmit to the Secretary-General for purposes of information a statement indicating in general or specific terms the class or classes of dispute within the jurisdiction of the Center which it would in principle consider submitting to conciliation or arbitration pursuant to this Convention. Such statement shall not constitute, or be deemed to constitute, the consent required by Article 26.2307

This proposal did not meet with unqualified support. Some delegates felt that a general statement of this kind was superfluous in view of the necessity of consent in a particular case (History, Vol. II, pp. 69, 659, 710, 839). Others expressed the concern that general announcements about what types of disputes a State would consider to submit to the jurisdiction of the Centre might unnecessarily discourage foreign investments since they could adversely affect the investors’ confidence (ibid., pp. 504, 660, 704, 822, 824, 825). On the other hand, it was suggested successfully that States should be allowed to declare not only classes of disputes they were willing to submit, but also the classes of disputes they would not consider submitting (ibid., p. 830). A number of drafting proposals were submitted on the basis of these debates (ibid., pp. 828, 831, 832, 833, 834, 835, 836, 840).

2306 For a detailed account of the relevant negotiations, see Mortenson (n 256) 281–296. This drafting history has been used as interpretative background in Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 445–454 and Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 197–198. 2307 History, Vol I, 128. In the First Draft, the Article dealing with consent had the number 26.

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The looming impasse between capital-importing and capital-exporting States on the scope of ICSID’s jurisdiction was eventually overcome by a compromise suggested by the United Kingdom, which resulted in the ICSID Convention’s current jurisdictional structure (History, Vol. II, p. 821).2308 The UK proposal opted to limit ICSID’s jurisdiction to ‘investment’ disputes, without defining that notion, and combined this jurisdictional grant with a notification mechanism inspired by Art. 29 of the First Draft that allowed Contracting States to declare what disputes they would not consider submitting to ICSID proceedings (ibid., p. 821). This proposal was finally adopted subject to a number of minor modifications (ibid., pp. 824, 825, 826, 880). The Revised Draft comes close to the final version of the Convention (History, Vol. I, pp. 128, 130). The only substantive addition after that stage was the SecretaryGeneral’s responsibility to transmit notifications to all Contracting States (History, Vol. II, pp. 945, 973). There was some debate in the Executive Directors’ Committee of the Whole on whether the Report of the Executive Directors should expressly refer to the debates about the need for defining the notion of ‘investment’ and the misgivings of some governments as to creating expectations of consent by adhering to the Convention (History, Vol. II, pp. 957, 958, 1027–1028). Eventually, the Report addressed Art. 25(4) in the following terms: Nature of the dispute ... 27. No attempt was made to define the term ‘investment’ given the essential requirement of consent by the parties, and the mechanism through which Contracting States can make known in advance, if they so desire, the classes of disputes which they would or would not consider submitting to the Centre (Article 25(4)). ... Notifications by Contracting States 31. While no conciliation or arbitration proceedings could be brought against a Contracting State without its consent and while no Contracting State is under any obligation to give its consent to such proceedings, it was nevertheless felt that adherence to the Convention might be interpreted as holding out an expectation that Contracting States would give favorable consideration to requests by investors for the submission of a dispute to the Centre. It was pointed out in that connection that there might be classes of investment disputes which governments would consider unsuitable for submission to the Centre or which, under their own law, they were not permitted to submit to the Centre. In order to avoid any risk of misunderstanding on this score, Article 25(4) expressly permits Contracting States to make known to the Centre in advance, if they so desire, the classes of disputes which they would or would not consider submitting to the Centre. The provision makes clear that a statement by a Contracting State that it would consider submitting a certain class of dispute to the Centre would serve for purposes of information only and would not constitute the consent required to give the Centre jurisdiction. Of course, a statement excluding certain classes of disputes from consideration would not constitute a reservation to the Convention.2309

2308 Mortenson (n 256) 289–291. See also paras 163–169 supra. 2309 (1993) 1 ICSID Reports 23, 29.

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From the foregoing, it is clear that a notification under Art. 25(4) does not amount to a reservation to the Convention. In fact, the debates leading to Art. 25(4) indicate that one of the purposes of this provision was to avoid reservations (History, Vol. II, pp. 57–58, 59, 377, 822). This conclusion is confirmed by the last sentence of the Executive Directors’ Report on Art. 25(4) (see para. 1477 supra).2310 A notification under Art. 25(4) does not exclude or modify the legal effect of a provision in the Convention.2311 Moreover, Art. 25(4) permits notifications at any time after ratification, acceptance, or approval of the Convention, whereas reservations are, in principle, only permissible up to the moment of ratification, acceptance, or approval, but not thereafter.2312 Conversely, as Art. 25(4), last sentence, states explicitly, notifications also do not constitute the consent required under Art. 25(1). In the course of the drafting of what eventually became Art. 25(4), there was an Italian proposal to the effect that any notification of classes of disputes would in itself constitute consent of the State in question to the Centre’s jurisdiction; but this proposal was not accepted (History, Vol. II, pp. 823, 840). During the drafting of Art. 25(4), it was also made clear that in case of a conflict between specific consent and a notification to exclude the type of dispute covered by the consent, the specific consent would govern (History, Vol. II, p. 824). Proposals that only those disputes could be subject to ICSID jurisdiction that were covered by the cumulative requirements of consent and coverage by a notification, which were made prior to the British compromise, failed (ibid., pp. 831, 832). As the Convention’s travaux make clear, notifications under Art. 25(4) are for purposes of information only about the scope of jurisdiction the respective State is considering to accept or not to accept in the future; Art. 25(4) is also designed to avoid misunderstandings that notifications do not constitute an offer of consent. Art. 25(4) notifications are independent of a State’s consent and do not have any direct legal consequences (see paras. 1487–1505 infra). In particular, they do not bind the Contracting State making the notification, which may withdraw, as has happened on a few occasions (see paras. 1484, 1485 infra), or modify, its notification at any time.

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2. State Practice under Art. 25(4) Despite the importance attributed during the drafting of the ICSID Convention to the possibility of submitting notifications under Art. 25(4) to the Centre in order to allow States to tailor individually the jurisdictional reach of ICSID, only a small number of States have availed themselves of this opportunity. State practice under Art. 25(4) is documented in the periodically updated document ICSID/8-D.2313 Content-wise, most notifications envisage either restrictions to certain categories of economic activity or exclude certain types of government action. In this respect, the Centre has received the following notifications, which are still in place: s Jamaica, through its notification of 1974, intends to exclude ‘[l]egal disputes arising directly out of an investment relating to minerals or other natural resources.’ 2310 2311 2312 2313

See See See See

also PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 141. VCLT (n 804) Art. 2(1)(d). ibid Art. 19. See also Amerasinghe (n 96) 225–226. ICSID (n 173).

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s Papua New Guinea made a notification in 1978 ‘that it will only consider submitting those disputes to the Centre which are fundamental to the investment itself’ (see para. 119 supra). s Saudi Arabia, through a notification of 1980, ‘reserves the right of not submitting all questions pertaining to oil and pertaining to acts of sovereignty.’ s Turkey in 1989 notified the Centre that ‘only the disputes arising directly out of investment activities which have obtained necessary permission, in conformity with the relevant legislation of the Republic of Turkey on foreign capital, and that have effectively started’ would be subject to the Centre’s jurisdiction. At the same time, Turkey announced its intention to exclude ‘disputes, related to the property and real rights upon the real estates,’ which are to remain ‘totally under the jurisdiction of the Turkish courts.’ s China declared in 1993 that it ‘would only consider submitting . . . disputes over compensation resulting from expropriation and nationalisation’ to ICSID proceedings. s Guatemala submitted a notification in 2003 to the effect that it ‘does not accept submitting to the Centre’s jurisdiction any dispute which arises from a compensation claim against the State for damages due to armed conflicts or civil disturbances.’ s Indonesia notified the Centre in 2012 that it would exclude from the Centre’s jurisdiction the ‘class of dispute [sic] arising from the administrative decision issued by the Regency Governments within the Republic of Indonesia.’2314 1484

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Guyana and Israel have notified the Centre of classes of disputes they would or would not consider submitting, but have since withdrawn these notifications. Guyana’s 1974 notification, which it withdrew in 1987, excluded investment disputes ‘relating to the mineral and other natural resources of Guyana’; Israel’s 1983 notification, which it withdrew in 1991, envisaged submitting to ICSID ‘only disputes related to an approved investment under one of the Israeli Laws for the Encouragement of Capital Investments.’ Costa Rica and Guatemala used Art. 25(4) to announce that they would require the exhaustion of local remedies before the commencement of ICSID arbitration. Israel’s now withdrawn 1983 notification contained a statement to the same effect. It is not clear though whether Art. 25(4) covers such limitations, as one could doubt that the exhaustion of local remedies constitutes a ‘class of disputes.’ At the same time, no protests of other Contracting States have been documented in respect of any of these notifications. Of note is finally the notification Ecuador sent to the Centre on 4 December 2007, prior to its denunciation of the Convention in 2009. This Notification stated: The Republic of Ecuador will not consent to submit to the jurisdiction of the International Centre for settlement of Investment Disputes (ICSID) the disputes that arise in matters concerning the treatment of an investment in economic activities related to the exploitation of natural resources, such as oil, gas, minerals or others. Any instrument containing the Republic of Ecuador’s previously expressed will to submit that class of disputes to the jurisdiction of the Centre, which has not been perfected by 2314 The term ‘Regency Governments’ refers to a level of administrative units below Indonesia’s Provinces.

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the express and explicit consent of the other party given prior to the date of submission of the present notification, is hereby withdrawn by the Republic of Ecuador with immediate effect as of this date.

3. Effect of Notifications on the Jurisdiction of the Centre Art. 25(4), last sentence, states explicitly that notifications given under its terms do not constitute the consent required under Art. 25(1). This statement is cited as evidence in SPP v Egypt for the indispensability of consent for the competence of an ICSID tribunal.2315 The Tribunal in Ambiente Ufficio and others v Argentina also stressed that ‘notifications cannot replace the specific consent to arbitration required under Art. 25.’2316 Similarly, the Tribunal in Alemanni and others v Argentina invoked the ‘categorical statemen[t]’ in Art. 25(4) that notifications did not constitute consent, as reinforcing the view that ‘the ICSID Convention cannot properly be interpreted as granting some form of pre-consent to arbitration.’2317

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a) Cases Suggesting Direct Jurisdictional Consequences Some controversy in ICSID arbitrations has ensued as to whether Art. 25(4) notifications can have an effect in limiting ICSID’s jurisdictional reach. Thus, several tribunals have inferred from the absence of notifications under Art. 25(4) a broad meaning of the notion of ‘investment’ when determining their jurisdiction ratione materiae. The Tribunal in Fedax v Venezuela reached the conclusion that loans were covered by the term ‘titles to money’ in the definition of investments under the Netherlands–Venezuela BIT. It added the following observation:

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It must also be noted that the Republic of Venezuela has not exercised its right under Article 25(4) of the ICSID Convention to notify the Centre of any class or classes of disputes it would or would not consider submitting to the jurisdiction of the Centre. This provision allows Contracting States to put investors on notice as to what class of disputes they would or would not consider consenting to within the broad meaning of investment under the Convention.2318

CSOB v Slovakia also concerned the issue whether a loan constituted an investment. The Tribunal found that the notion of ‘investment,’ as a concept under the Convention, should be interpreted broadly. In support of this conclusion, the Tribunal added: It is worth noting, in this connection, that a Contracting State that wishes to limit the scope of the Centre’s jurisdiction can do so by making the declaration provided for in Article 25(4) of the Convention. The Slovak Republic has not made such a declaration and has, therefore, submitted itself broadly to the full scope of the subject matter jurisdiction governed by the Convention.2319

2315 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 62. See also PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 136; PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) para 244. 2316 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 452. 2317 Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) para 304. 2318 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 33. 2319 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 65.

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In a similar vein, the Tribunal in Abaclat and others v Argentina relied on the absence of a notification under Art. 25(4) as support to reject Argentina’s argument that disputes arising from a foreign debt restructuring were excluded from ICSID’s ratione materiae jurisdiction.2320 A few other tribunals attributed similar effects to the absence of Art. 25(4) notifications on the meaning of ‘investment’ in relation to the respondent State.2321 Other tribunals have pointed to the absence of Art. 25(4) notifications as confirmation that the respondent State had otherwise accepted ICSID jurisdiction in broad terms. In Vivendi v Argentina, the Tribunal noted that Argentina had not notified its intention under Art. 25(4) to exclude claims based on actions of political subdivisions in support of its finding of subject-matter jurisdiction.2322 In Lundin v Tunisia, the Tribunal pointed to the absence of an Art. 25(4) notification to support its reading that the Respondent had accepted ICSID jurisdiction for all investment claims, independently of the nature of those claims as commercial, civil, fiscal, contractual, or regulatory.2323 Finally, in Philip Morris v Uruguay, the Tribunal referred, when interpreting the scope and effect of an investment admission provision in the applicable BIT, to Art. 25(4) as a possibility of excluding access to ICSID arbitration of an investment otherwise covered under the BIT. It observed: Uruguay might exclude the admission of investments under the BIT for reasons of public health in two different ways, either (i) by providing for such exclusion in its internal legislation so that a proposed investments [sic] would not be admitted as being not ‘in accordance with its law’ under Article 2(1) [of the BIT], or (ii) by availing itself of the possibility under Article 25(4) of the ICSID Convention to notify the Centre that it would not consider submitting to the jurisdiction of the Centre disputes relating to public health.2324

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A similar position was taken by the Tribunal in Ambiente Ufficio and others v Argentina, which considered that ‘possible restrictions to the consent to arbitration . . . may be effected by the interplay of pertinent declarations on the part of the States involved, including . . . notifications under Art. 25(4).’2325 All of these decisions may be taken as an indication that the tribunals in question considered that Art. 25(4) notifications could have direct jurisdictional effect and limit a State’s consent to ICSID jurisdiction that was declared in another legal instrument, including in an international treaty.2326 At the same time, the arbitral jurisprudence mentioned only engaged with Art. 25(4) by way of obiter. It is contradicted by another line of cases that considers that individual Art. 25(4) notifications do not limit either ICSID’s subject-matter jurisdiction or the written consent a State has otherwise given. 2320 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 477. 2321 See Mitchell v DR Congo, Award (9 February 2004) para 42 (subsequently annulled); OIEG v Venezuela, Award (10 March 2015) para 220. Cf also Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 453, 457, 462. 2322 Vivendi v Argentina, Award (21 November 2000) para 52 (partially annulled, albeit on unrelated points). 2323 Lundin v Tunisia, Excerpts of Award (22 December 2015) para 143. 2324 Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 171. 2325 Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 453. 2326 For similar assessments in the literature, see Tony Cole, The Structure of Investment Arbitration (Routledge 2013) 25–42; cf also L Yves Fortier, ‘International Arbitration and the Argentine Cases: An Evaluation of 10 Years of Arbitration – Institutional Aspects’ (2012) 6 WAMR 545, 551 (terming Art. 25(4) a ‘“gate-keeping” provision’).

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b) Cases Rejecting Direct Jurisdictional Consequences In Mitchell v DR Congo, the ad hoc Committee noted that the concept of investment was to be looked for in the parties’ agreement or the applicable investment treaty. It added:

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In doing so, the fact that a State has not made use of the notification option provided for under Article 25(4) of the Convention may not be understood to mean that that State has taken a certain position regarding the very concept of investment.2327

Several other tribunals concluded that consent, once validly given, may not be defeated by a subsequent notification under Art. 25(4). This is what the Government attempted in three parallel cases against Jamaica2328 (see para. 1069 supra). The three Tribunals refused to accept the Government’s notification under Art. 25(4) as a valid withdrawal of the host State’s consent given in concession agreements in the mining sector concluded with the investor. They pointed out that Jamaica’s Art. 25(4) notification ‘only operates for the future by way of information to the Centre and potential future investors’2329 (see paras. 1070–1071 supra). In PSEG v Turkey, the Tribunal squarely addressed the nature of a notification under Art. 25(4) in some detail. In that case, the Respondent had based a jurisdictional objection on its notification under Art. 25(4) (see para. 1483 supra). In particular, Turkey relied on the requirement, expressed in its notification, that the investment activities must ‘have effectively started.’ The Turkey–United States BIT, which was applicable in that case, did not reflect that requirement. The BIT was signed in 1985; the notification was made in 1989, when Turkey deposited its instrument of ratification of the ICSID Convention; the BIT entered into force in 1990.2330 The PSEG tribunal found that the purpose of notifications under Art. 25(4) was to give advance information on the types of disputes to which consent to arbitration might or might not be expected to be given by the State in question. It held that the notifications do not have an autonomous legal operation, but express questions of policy and are a matter of information for prospective investors. In order to be effective, the contents of a notification would have to be embodied in the consent, ‘[o]therwise the consent . . . stands unqualified by the notification.’2331 The Tribunal said: [T]he notification does not create an obligation for the Contracting State, but rather it is associated with the claim to a right. In fact, States making notifications will always wish to remain free to either follow or not follow the terms of the notification when expressing their consent. No State would believe that by making a notification it has become bound by its terms as in that case there would be no difference between notification and consent, thus contradicting specific provisions of the Convention. In this context, the Contracting State is in fact claiming a right to later exclude certain

2327 Mitchell v DR Congo, Decision on Annulment (1 November 2006) para 25. 2328 These are Alcoa Minerals v Jamaica, Decision on Jurisdiction (6 July 1975) (1979); Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975); and Reynolds v Jamaica, Order on Discontinuance (12 October 1977). The Alcoa case is described by Schmidt (n 126). 2329 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 23. 2330 PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 125–130. 2331 ibid paras 135–147.

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schreuer’s commentary on the icsid convention disputes from consent, if it so wishes, and it is always free not to adhere to the terms of its notification.2332

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The effect of Ecuador’s notification of 4 December 2007, with which it sought to withdraw any offers of consent that had not yet been accepted by an investor relating to disputes in respect of the exploitation of natural resources independently of the instrument in which they were contained (see para. 1486 supra), was addressed in Murphy v Ecuador.2333 The Tribunal held that Art. 25(4) ‘allows the Contracting States to notify the Centre of the class of disputes they would submit to the jurisdiction of the Centre in the future;’2334 but such a notification could ‘not unilaterally modify the consent given in another treaty,’2335 even if the Claimant investor had only accepted Ecuador’s consent after Ecuador’s Art. 25(4) notification. Offers of consent to ICSID jurisdiction given in a BIT could ‘not be withdrawn or revoked other than by the mechanisms expressly agreed upon by the parties.’2336 In the Tribunal’s view, ‘Article 25(4) notifications are useful to alter those mechanisms in the future only and in absence of another legal instrument as the BIT which make [sic] them mandatory.’2337 In Tza Yap Shum v Peru, the People’s Republic of China sought to rely on its notification under Art. 25(4) for purposes of interpreting the clause providing for ICSID’s jurisdiction in the China–Peru BIT.2338 The Tribunal stressed the independence of the BIT’s consent clause from the notification under Art. 25(4): The Tribunal notes that Article 25(4) of the ICSID Convention clarifies that the respective notifications do not condition the consent of the parties to the ICSID Convention. The Tribunal also has considered duly whether this notification helps to elucidate the intention of the contracting parties when signing subsequently the 1994 Peru–China BIT. In this respect, the Tribunal considers it to be questionable to interpret the consent of the contracting parties to the BIT in Art. 8 of the same in light of a notification that concerns a completely different treaty, namely the ICSID Convention, and whose content does not even condition the consent of the People’s Republic of China in the Convention. For these reasons, the Tribunal does not consider that the notification of the People’s Republic of China pursuant to Article 25(4) of the Convention would invalidate the scope of Article 8 of the BIT when it is interpreted in accordance with Article 31 of the Vienna Convention.2339

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All tribunals that entered holdings on the effect of Art. 25(4) notifications on ICSID’s subject-matter jurisdiction, and addressed the interplay of these notifications with the host State’s consent given in another instrument, declined to attribute any effect to the notification in limiting the Centre’s jurisdiction. This position is convincing. It accords 2332 ibid para 143. 2333 Murphy v Ecuador, Award on Jurisdiction (15 December 2010) paras 60–89. For further background on Ecuador’s notification, see also Xavier Andrade Cadena and Marco Tulio Mantañes, ‘Introductory Note to Ecuador’s Notice under ICSID Article 25(4)’ (2008) 47 ILM 154. 2334 Murphy v Ecuador, Award on Jurisdiction (15 December 2010) para 72 (emphasis in the original). 2335 ibid para 73. 2336 ibid para 80. 2337 ibid. Similarly on the effect of Art. 25(4) notifications, OIEG v Venezuela, Award (10 March 2015) para 220, fn 213. 2338 Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 136, 141. 2339 ibid para 165.

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best with the wording of Art. 25(4), which distinguishes notifications from consent to ICSID, and corresponds to the discussions during the drafting of Art. 25(4) (see paras. 1473–1481 supra).2340 As for the interplay with the State’s consent, an existing notification under Art. 25(4) does not stand in the way of a subsequent consent.2341 A host State may give consent in respect of a dispute, even though the dispute does not fit into a class that was listed as one it would consider submitting. It may even give consent in respect of a dispute that belongs to a class that was listed as one it would not consider submitting for dispute settlement to the Centre. In fact, several countries that have made notifications under Art. 25(4) have concluded BITs, which go beyond the limits indicated in their notifications.2342 Control over consent remains entirely at the host State’s discretion. Consent may be subjected to limitations (see paras. 948–980 supra), but the terms of consent are not restricted by the terms of a notification under Art. 25(4). Conversely, Art. 25(4) notifications do not have the effect of withdrawing or narrowing an otherwise binding consent. This holds true for consent included in an earlier investor–State contract, as well as a unilateral consent made in a treaty or in domestic legislation and accepted by the investor prior to the notification. The rule in Art. 25(1) that a perfected consent cannot be withdrawn unilaterally excludes any such effect of an Art. 25(4) notification (see paras. 1069–1071 supra). But it also holds true for offers of consent not accepted before the notification, if the offer in question otherwise has become binding. This is the case for offers of consent contained in BITs; they are protected by the law of treaties and cannot be withdrawn by a unilateral declaration.2343 For unaccepted offers made in domestic legislation, it will depend on whether the legislation in question protects the offer against subsequent change through an Art. 25(4) notification. Whether an offer of consent may be withdrawn, or limited by way of a notification under Art. 25(4), therefore also depends on the instrument containing the offer to consent. Consequently, only to the extent that an offer has not become binding can an Art. 25(4) notification lead to narrowing the State’s consent. While jurisdiction must thus be determined independently of the notifications under Art. 25(4), these notifications may nevertheless have, under narrow circumstances, an indirect bearing on jurisdiction. A consent that is ambiguous may be interpreted by reference to a notification made before that consent has become binding (either by acceptance or through other means).2344 In the absence of contrary evidence, it may be assumed that a State intended to remain within the limits of its notification when giving binding consent to ICSID jurisdiction. However, in the case of offers of consent made in

2340 In this sense also Mortenson (n 256) 294–295. 2341 Amerasinghe (n 96) 226; Delaume (n 120) 170. 2342 See eg Jamaica–United States BIT (signed 4 February 1994, entered into force 7 March 1997) Arts. I, VI; Turkey–United Kingdom BIT (signed 15 March 1991, entered into force 22 December 1996) Art. 1 (a)(i); Australia–Papua New Guinea BIT (signed 3 September 1990, entered into force 20 October 1991) Art. 14; China–Germany BIT (signed 1 December 2003, entered into force 11 November 2005) Art. 9. 2343 Art. 26 of the VCLT reflects the traditional principle pacta sunt servanda. Under Art. 39 of the VCLT, a treaty may be amended by agreement between the parties. The possibilities for the termination and suspension of the operation of treaties under Arts. 54–64 of the VCLT are limited. 2344 See PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 140; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 452.

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international treaties, a prior notification will generally only be effective if referenced in the treaty itself or otherwise made part of the mutual understanding of the Contracting States about the scope of their respective consents.2345 Conversely, while Art. 25(4) itself is context for interpreting the notion of ‘investment’ in Art. 25(1), it is questionable to take the possibility of Art. 25(4) notifications, or their absence, as a basis for inferring the scope of a State’s consent.2346 All in all, a notification under Art. 25(4) has no autonomous legal force. Such notifications are principally given for information purposes to alert potential investors, and their home States, of the policy and intentions of the host State as to future submissions to ICSID’s jurisdiction. The notification mechanism in Art. 25(4) is designed neither as offering or broadening consent, nor as withdrawing or narrowing an existing and binding offer of consent.2347 Only in narrow circumstances can Art. 25(4) notifications serve as an aid to interpretation of a consent given in another instrument.

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Overall, State practice under Art. 25(4) has therefore not had the effect of leading, through subsequent practice, to a concretization of the notion of ‘investment’ contained in Art. 25(1). Art. 25(4) thus did not fulfill one of its originally envisaged functions: to allow States to tailor ICSID’s jurisdictional reach. More important in achieving this purpose have been limitations in instruments containing actual consent to ICSID. Whether Art. 25(4) achieved its second function – to help protect States against being pressured into accepting ICSID jurisdiction – is difficult to say, as one cannot measure the effect the few existing notifications, or the possibility of entering them in the future, actually had or will have. Still, the current absence of widespread practice under Art. 25(4) neither makes that provision ‘spurious,’2348 nor does it require a general interpretation of Art. 25(4) that would give such notifications direct jurisdictional effect. Instead, Art. 25(4) continues to have important functions. Notifications under Art. 25(4) serve the purpose of informing investors about a Contracting State’s willingness to submit disputes about certain matters to the jurisdiction of the Centre. Notifications under Art. 25(4) can also be used by Contracting States at any time to tailor individually their future submission to the Centre’s jurisdiction, including in respect of consent given in national legislation that has not been accepted by foreign investors and has not otherwise become binding on the host State. Furthermore, under certain circumstances, Art. 25(4) notifications can influence the interpretation of the scope of consent given by States in contracts, treaties, or national legislation.

2345 See PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 145–146; Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) para 165. 2346 Cf Ambiente Ufficio and others v Argentina, Decision on Jurisdiction and Admissibility, Dissenting Opinion Torres Bernárdez (2 May 2013) para 232. 2347 See also Sanum Investments v Laos (UNCITRAL), Award on Jurisdiction (13 December 2013) para 328 (stating that ‘it is settled case law that such notification is for informative purposes only and cannot be considered as a legal obligation to narrow or broaden an otherwise accepted consent to jurisdiction’) (referencing the Second Edition of this Commentary; Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 163–165; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 135–147; and Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) paras 23–24). 2348 In this sense Cole (n 2326) 26.

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Article 26 Consent of the parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy. A Contracting State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under this Convention.

OUTLINE Paragraphs I. INTRODUCTION 1–5 II. INTERPRETATION 6–364 A. ‘Consent of the parties to arbitration under this Convention . . .’ 6–22 B. ‘. . . unless otherwise stated, . . .’ 23–167 1. Concurrent Arbitration Clauses 27–53 a) Form of Concurrent Arbitration Clauses 27–43 b) Validity of Concurrent Arbitration Clauses 44–53 2. Concurrent Reference to Domestic Courts 54–63 3. Fork-in-the-Road Clauses 64–100 4. Jurisdiction for Treaty Claims and Contract Claims 101–167 a) Jurisdiction over Treaty Claims Arising out of Contractual Relationships 101–139 b) Contractual Forum Selection Clause as a Waiver of ICSID Jurisdiction 140–146 c) Jurisdiction over Treaty and Contract Claims under a Broad Jurisdictional Clause 147–154 d) Jurisdiction under Umbrella Clauses 155–158 e) ICSID Tribunals’ Jurisdiction (and Obligation) to Interpret Contracts 159–167 C. ‘. . . shall, . . . be deemed consent to such arbitration to the exclusion of any other remedy.’ 168–296 1. Parallel Arbitration 170–198 2. Consolidation and Establishment of Identical Tribunals 199–213 3. Consolidation and Multiple Claimants 214–229 4. Domestic Proceedings 230–254 5. Intervention by Domestic Courts to Stay ICSID Arbitration 255–266 6. Provisional Measures by Domestic Courts in ICSID Arbitration 267–292 a) Judicial Practice 273–281 b) The Scholarly Debate 282–283 c) ICSID Arbitration Rule 39(6) 284–286 d) Provisional Measures under the Additional Facility 287–288 e) Clauses Permitting Provisional Measures by Domestic Courts 289–292

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schreuer’s commentary on the icsid convention 7. Non-Judicial Remedies D. ‘A Contracting State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under this Convention.’ 1. The Basic Rule of Non-Exhaustion 2. Exhaustion of Local Remedies as a Condition of Consent a) Bilateral Investment Treaties b) National Legislation c) Investment Contracts 3. Practice of Tribunals a) Exhaustion of Local Remedies and Jurisdiction b) The Use of Local Remedies as a Substantive Requirement 4. General Considerations

293–296

297–364 298–301 302–328 310–326 327 328 329–362 329–338 339–362 363–364

BIBLIOGRAPHY Alexandrov, Stanimir A, ‘Breaches of Contract and Breaches of Treaty. The Jurisdiction of Treaty-Based Arbitration Tribunals to Decide Breach of Contract Claims in SGS v Pakistan and SGS v Philippines’ (2004) 5 The Journal of World Investment & Trade 555 ‘Breach of Treaty Claims and Breach of Contract Claims: When Can an International Tribunal Exercise Jurisdiction?’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) 370 Ben Hamida, Walid, ‘La consolidation des procédures arbitrales’ [2006] 3 Les Cahiers de l’Arbitrage 30 Born, Gary and Šćekić, Marija, ‘Pre-Arbitration Procedural Requirements’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 227 Broches, Aron, ‘A Guide for Users of the ICSID Convention’ (1991) 8(1) News from ICSID 5 Brower, Charles N, and Goodman, Ronald EM, ‘Provisional Measures and the Protection of ICSID Jurisdictional Exclusivity Against Municipal Proceedings’ (1991) 6 ICSID Review 431 Collins, Lawrence, ‘Provisional and Protective Measures in International Litigation’ (1992–III) 234 Recueil des Cours 98 Crawford, James, ‘Treaty and Contract in Investment Arbitration’ (2008) 24 Arbitration International 351 Cremades, Bernardo M, ‘Parallel Arbitration Tribunals and Awards’ in Clarisse Ribeiro (ed), Investment Arbitration and the Energy Charter Treaty (JurisNet 2006) 304 Cremades, Bernardo M and Cairns, David JA, ‘Contract and Treaty Claims and Choice of Forum in Foreign Investment Disputes’ in Norbert Horn and Stefan Kröll (eds), Arbitrating Foreign Investment Disputes. Procedural and Substantive Legal Aspects (Kluwer 2004) 325 Crivellaro, Antonio, ‘Consolidation of Arbitral and Court Proceedings in Investment Disputes’ (2005) 4 The Law & Practice of International Courts and Tribunals 371 Delaume, Georges R, ‘ICSID Arbitration and the Courts’ (1983) 77 American Journal of International Law 784 Demirkol, Berk, Judicial Acts and Investment Treaty Arbitration (CUP 2018)

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Dolzer, Rudolf, ‘Local Remedies in International Treaties: A Stocktaking’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 280 Dolzer, Rudolf and Schreuer, Christoph, Principles of International Investment Law (2nd edn, OUP 2012) Dominicé, Christian, ‘Quelques observations sur la question des mesures conservatoires dans les arbitrages CIRDI’ (1990) 112 La Semaine Judiciaire 327 Friedland, Paul D, ‘Provisional Measures and ICSID Arbitration’ (1986) 2 Arbitration International 335 ‘ICSID and Court-Ordered Provisional Measures: An Update’ (1988) 4 Arbitration International 161 Gaillard, Emmanuel, ‘Investment Treaty Arbitration and Jurisdiction Over Contract Claims – the SGS Cases Considered’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 325 Greenwood, Christopher J, ‘Anti-Suit Injunctions in International Arbitration, A Public International Lawyer’s Perspective’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris 2005) 147 Happ, Richard, ‘The “Foreign Nationality”-Requirement and the “Exhaustion of Local Remedies” in Recent ICSID Jurisprudence’ in Rainer Hofmann and Christian J Tams (eds), The International Convention on the Settlement of Investment Disputes (ICSID) (Nomos 2007) 103 Hoffmann, Anne K, ‘The Investor’s Right to Waive Access to Protection under a Bilateral Investment Treaty’ (2007) 22 ICSID Review 69 Kalderimis, Daniel and others, ‘ICSID Convention, Chapter II, Article 26 [Exclusive Remedy]’ in Loukas A Mistelis (ed), Concise International Arbitration (Kluwer 2015) 82 Kaufmann-Kohler, Gabrielle and others, ‘Consolidation of Proceedings in Investment Arbitration: How Can Multiple Proceedings Arising from the Same or Related Situations Be Handled Effectively? – Final Report on the Geneva Colloquium on Consolidation of Proceedings in Investment Arbitration April 22, 2006’ (2006) 21 ICSID Review 59 Kerameus, Konstantinos D, ‘Anti-Suit Injunctions in ICSID Arbitration’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris 2005) 131 Marchais, Bertrand P, ‘ICSID and the Courts’ (1986) 3(2) News from ICSID 4 ‘ICSID Tribunals and Provisional Measures—Introductory Note to Decisions of the Tribunals of Antwerp and Geneva in MINE v Guinea’ (1986) 1 ICSID Review 372 ‘Mesures provisoires et autonomie du système d’arbitrage CIRDI’ (1988) 14 Droit et Pratique du Commerce International 275 McLachlan, Campbell, Shore, Laurence and Weiniger, Matthew, International Investment Arbitration: Substantive Principles (2nd edn, OUP 2017) Parra, Antonio R, ‘The Practices and Experience of ICSID’ in Conservatory and Provisional Measures in International Arbitration (International Chamber of Commerce 1993) 37 ‘Desirability and Feasibility of Consolidation: Introductory Remarks’ (2006) 21 ICSID Review 132 The History of ICSID (2nd edn, OUP 2017) Porterfield, Matthew C, ‘Exhaustion of Local Remedies in Investor–State Dispute Settlement: An Idea Whose Time Has Come?’ (2015) 41 Yale Journal of International Law 1

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Prislan, Vid, Domestic Courts in Investor–State Arbitration: Partners, Competitors, Suspects (PhD Thesis, Leiden 2019) Rubins, Noah, Papanastasiou, Thomas-Nektarios and Kinsella, N Stephan, International Investment, Political Risk and Dispute Resolution: A Practitioner’s Guide (2nd edn, OUP 2020) Schramke, Hein-Jürgen, ‘The Interpretation of Umbrella Clauses in Bilateral Investment Treaties’ (2007) 4(5) Transnational Dispute Management Schreuer, Christoph, ‘Travelling the BIT Route. Of Waiting Periods, Umbrella Clauses and Forks in the Road’ (2004) 5 The Journal of World Investment & Trade 231 ‘Calvo’s Grandchildren: The Return of Local Remedies in Investment Arbitration’ (2005) 4 The Law & Practice of International Courts and Tribunals 1 ‘Investment Treaty Arbitration and Jurisdiction over Contract Claims – the Vivendi I Case Considered’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 281 Schwebel, Stephen M, ‘On Whether the Breach by a State of a Contract with an Alien Is a Breach of International Law’ in International Law at the Time of its Codification: Essays in Honour of Roberto Ago vol III (Dott A Giuffrè Editore 1987) 401 ‘Arbitration and the Exhaustion of Local Remedies’ in Stephen M Schwebel, Justice in International Law: Selected Writings (CUP 1994) 171 ‘Anti-Suit Injunctions in International Arbitration: An Overview’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris 2005) 5 Shany, Yuval, ‘Contract Claims vs Treaty Claims: Mapping Conflicts between ICSID Decisions on Multisourced Investment Claims’ (2005) 99 American Journal of International Law 835 Sheppard, Audley and Hunter, Martin, ‘An Overview of the Relationship between Courts and Investment Treaty Arbitration’ in Federico Ortino, Audley Sheppard and Hugo Warner (eds), Investment Treaty Law Current Issues vol 1 (BIICL 2006) 153 Söderlund, Christer, ‘Multiple Judicial Proceedings and the Energy Charter Treaty’ in Clarisse Ribeiro (ed), Investment Arbitration and the Energy Charter Treaty (JurisNet 2006) 237 Spiermann, Ole, ‘Individual Rights, State Interests and the Power to Waive ICSID Jurisdiction under Bilateral Investment Treaties’ (2004) 20 Arbitration International 179 Suarez Anzorena, Carlos I, ‘Multiplicity of Claims under BITs and the Argentine Case’ in Federico Ortino, Audley Sheppard and Hugo Warner (eds), Investment Treaty Law: Current Issues vol 1 (BIICL 2006) 37 United Nations Conference on Trade and Development (UNCTAD), Investor–State Dispute Settlement and Impact on Investment Rulemaking (United Nations 2007) 83 van Haersolte-van Hof, Jacomijn J and Hoffmann, Anne K, ‘The Relationship between International Tribunals and Domestic Court’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 962 Vandevelde, Kenneth J, Bilateral Investment Treaties: History, Policy and Interpretation (OUP 2010) Wehland, Hanno, The Coordination of Multiple Proceedings in Investment Treaty Arbitration (OUP 2013)

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Yannaca-Small, Catherine, ‘Consolidation of Claims: A Promising Avenue for Investment Arbitration?’ in Organisation for Economic Co-operation and Development (OECD), International Investment Perspectives (OECD 2006) 225 Yannaca-Small, Katia, ‘Parallel Proceedings’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 1008

I. INTRODUCTION Art. 26 is the clearest expression of the self-contained and autonomous nature of the arbitration procedure provided for by the Convention. Unlike Art. 25, it applies only to arbitration and not to conciliation.1 The first sentence of Art. 26 has two main features. The first is that, once consent to ICSID arbitration has been given, the parties have lost their right to seek relief in another forum, national or international, and are restricted to pursuing their claim through ICSID arbitration. This principle operates from the moment of valid consent. This exclusive remedy rule of Art. 26 is subject to modification by the parties. The phrase ‘unless otherwise stated’ in the first sentence gives the parties the option to deviate from it by agreement. The second feature of Art. 26, first sentence, is that of non-interference with the ICSID arbitration process, once it has been instituted. The principle of non-interference is a consequence of the self-contained nature of proceedings under the Convention. The Convention provides for an elaborate process designed to make arbitration independent of domestic courts. Even in the face of an uncooperative party, ICSID arbitration is designed to proceed independently without the support of domestic courts. This is evidenced by the provisions on the constitution of the tribunal (Arts. 37–40), on proceedings in the absence of a party (Art. 45(2)), on autonomous arbitration rules (Art. 44), on applicable law (Art. 42(1)), and on provisional measures (Art. 47). It is only in the context of enforcement that domestic courts may enter the picture (Arts. 54–55). In addition, the arbitration process is also insulated from inter-State claims, by the exclusion of diplomatic protection (Art. 27). The underlying idea of the exclusive remedy rule, and of the principle of noninterference, is to provide an effective forum and to dispense with other proceedings which, for a variety of reasons, appear unattractive to the parties. Investors often do not perceive litigation in the courts of host States as a reliable way of protecting their interests. In turn, host States dislike getting involved in litigation abroad. In addition, State immunity tends to have a distorting effect on litigation between States and nonState parties before domestic courts. The principle of autonomy for ICSID arbitration, as expressed in Art. 26, therefore, meets a number of needs of both host States and foreign investors. 1 For discussion on the complex and multifaceted relationship between investment arbitration and domestic courts more generally, see Berk Demirkol, Judicial Acts and Investment Treaty Arbitration (CUP 2018); Vid Prislan, Domestic Courts in Investor–State Arbitration: Partners, Competitors, Suspects (PhD Thesis Leiden 2019); Gabrielle Kaufmann-Kohler and Michele Potestà, Investor–State Dispute Settlement and National Courts (Special Issue: European Yearbook of International Economic Law) (Springer 2020) chs 2, 3; A Saravanan and SR Subramanian, Role of Domestic Courts in the Settlement of Investor–State Disputes: The Indian Scenario (Springer 2020) ch 3; Szilárd Gáspár-Szilágyi, ‘Let Us Not Forget about the Role of Domestic Courts in Settling Investor–State Disputes’ (2020) 18 LPICT 389.

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The second sentence of Art. 26 deals with a traditional concept of international law, the exhaustion of local remedies before resort can be had to an international remedy. The exclusive remedy rule of the first sentence implies that there is no need to exhaust local remedies before initiating ICSID arbitration ‘unless otherwise stated.’ The second sentence reiterates and specifies the host State’s right to insist on the exhaustion of local remedies as a condition of its consent to arbitration. In fact, the drafting history of Art. 26 was dominated almost entirely by the relationship of ICSID arbitration with domestic courts, especially with the exhaustion of local remedies rule (see paras. 298–301 infra). By contrast, the possibility of competition between ICSID arbitration and other international judicial or arbitral proceedings was barely discussed.

II. INTERPRETATION A. ‘Consent of the parties to arbitration under this Convention . . .’ 6

7

8

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Art. 26 applies from the moment of consent (see Art. 25, paras. 880–893). Therefore, it is not necessary for the operation of this provision that ICSID arbitration proceedings have been instituted. If ICSID arbitration has been instituted, there will be a finding by the Secretary-General, in accordance with his or her screening power under Art. 36(3), or a decision on jurisdiction by the tribunal under Art. 41. If the Secretary-General has found that, because of a lack of consent, the dispute is manifestly outside the jurisdiction of the Centre, or if the tribunal has determined that the Centre does not have jurisdiction because there is no valid consent, Art. 26 does not apply and other remedies may be pursued. Prior to the determination by the Secretary-General and by an ICSID tribunal, it will be up to the non-ICSID forum seized of the same claim to stay the proceedings and to await the ICSID decision as to jurisdiction (see Art. 41, paras. 25–30). If no ICSID arbitration has been instituted, and if there is no immediate prospect that this will be done, the non-ICSID forum must decide for itself whether there is consent to ICSID arbitration, which would be a bar to its own jurisdiction under Art. 26. The exclusive remedy rule applies regardless of whether consent is based on a direct agreement between the host State and the investor or an offer of consent contained in a treaty or in legislation. However, Art. 26 operates only once the offer of consent in the treaty or legislation has been perfected through acceptance by the investor. Practical problems may arise where the drafting of clauses mentioning ICSID is so poor that it is not clear whether there is a valid consent. These problems may be exacerbated if the respondent fails to appear in order to contest the jurisdiction of a non-ICSID forum. In MINE v Guinea,2 the parties had entered into a contract, which contained a provision on the settlement of disputes to the effect that a dispute would be submitted to arbitration by a panel of three arbitrators ‘selected by the President of CIRDI.’3 2 See generally Georges R Delaume, ‘ICSID Arbitration and the Courts’ (1983) 77 AJIL 786; Aron Broches, ‘A Guide for Users of the ICSID Convention’ (1991) 8(1) News from ICSID 5, 8; Bertrand P Marchais, ‘ICSID and the Courts’ (1986) 3(2) News from ICSID 4. 3 Cited from 693 F 2d 1094, 1096, (1997) 4 ICSID Reports 8, 10. CIRDI is the French acronym for ICSID.

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When a dispute arose, the parties jointly executed a document consenting to arbitrate all existing disputes pursuant to the ICSID Convention called ‘Consent to Arbitrate.’ Subsequently, MINE requested Guinea to execute a revised Consent to Arbitrate, but Guinea failed to respond.4 MINE then filed a petition in a US Federal District Court to compel arbitration under Section 4 of the Federal Arbitration Act (FAA), claiming that it could not initiate ICSID arbitration due to Guinea’s lack of cooperation. Guinea did not appear and the Court ordered arbitration before the American Arbitration Association (AAA). An ex parte award was rendered in MINE’s favor by an AAA tribunal. MINE then returned to the District Court and moved to have the award confirmed under Section 9 of the FAA. At this point, Guinea, for the first time, entered the proceedings and moved to dismiss MINE’s motion, claiming that the Court lacked subject-matter jurisdiction both in respect of the earlier order to compel arbitration and of the motion to confirm the award. The District Court for the District of Columbia granted MINE’s motion and confirmed the AAA award.5 Guinea appealed to the Court of Appeals disputing the District Court’s subject-matter jurisdiction. The United States submitted a brief,6 which relied extensively on Art. 26 of the Convention. It argued for the exclusive nature of ICSID arbitration and pointed out that a case brought in a US court that arguably falls within ICSID’s jurisdiction should be stayed to permit ICSID to determine whether it has jurisdiction.7 In addition, it noted that consent to ICSID jurisdiction could not be interpreted as a waiver of sovereign immunity other than for purposes of enforcing an ICSID award.8 The Court of Appeals reversed the decision of the District Court.9 It held that the District Court had no jurisdiction to order Guinea to arbitrate. It did cite Art. 26,10 but only for the purpose of reaching the conclusion that Guinea had not waived sovereign immunity since no role for the US courts was foreseen.11 The outcome of this decision met the requirements of Art. 26 in that it blocked resort to any ‘other remedy.’ But the Court of Appeals’ reliance on sovereign immunity, rather than on Art. 26, has been criticized by several commentators.12 The Court’s reasoning

4 MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 67. 5 MINE v Guinea, US District Court, District of Columbia (12 January 1981) (1997) 4 ICSID Reports 3, 505 F Supp 141, (1982) 63 ILR 535. See also (1981) 20 ILM 666 and the introductory note by Gordon. 6 Brief for the United States of America as Intervenor and Suggestion of Intent (1981) 20 ILM 1436. 7 ibid 1472 ff. 8 ibid 1482 ff. 9 MINE v Guinea, US Court of Appeals, District of Columbia Circuit (12 November 1982) (1997) 4 ICSID Reports 8, 693 F 2d 1094; cert denied 464 US 815 (1983), (1987) 72 ILR 152, (1982) 21 ILM 1355, (1983) 22 ILM 86. 10 See (1997) 4 ICSID Reports 20. 11 ibid 19–20. See also Gary B Sullivan, ‘Implicit Waiver of Sovereign Immunity by Consent to Arbitration: Territorial Scope and Procedural Limits’ (1983) 18 Texas ILJ 329; Mees Brenninkmeijer and Fabien Gélinas, ‘Execution Immunities and the Effect of the Arbitration Agreement’ (2020) 37 J Int’l Arb 549. 12 See eg Delaume (n 2) 789 ff; Katherine H Kemby, ‘US Courts May Not Assert Jurisdiction over Disputes Involving Agreements to Arbitrate under the Auspices of the International Centre for the Settlement of Investment Disputes if the Foreign Sovereign Immunities Act Bars Jurisdiction’ (1983) 24 Va JIL 217; Bette E Shifman, ‘Maritime International Nominees Establishment v Republic of Guinea: Effect on US Jurisdiction of an Agreement by a Foreign Sovereign to Arbitrate before the International Centre for the Settlement of Investment Disputes’ (1982) 16 Geo Wash J Int’l Law & Econ 451; Okezie Chukwumerije, ‘ICSID Arbitration and Sovereign Immunity’ (1990) 19 Anglo-American LR 166, 176.

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left open the question whether ICSID’s exclusive jurisdiction would be respected if sovereign immunity were found to be waived. European courts, in which MINE attempted to enforce the AAA award, and the ICSID tribunal, before which the case was subsequently brought, confirmed ICSID arbitration as the exclusive remedy. Despite the proceedings pending before ICSID, MINE started attachment proceedings in order to have the AAA award enforced by courts in Belgium and Switzerland. The Court of First Instance of Antwerp lifted attachments that MINE had obtained on assets belonging to Guinea in Belgium.13 It noted ICSID’s exclusive competence and found that the proceedings to obtain a seizure fell within the definition of ‘remedy’ in Art. 26 and were hence inadmissible. Consequently, there was no need to examine the question of State immunity.14 Proceedings before Swiss courts led to a similar result. MINE obtained an attachment order against various Guinean bank accounts on the basis of the 1980 AAA award. The Swiss Federal Tribunal15 at first upheld the attachment order since a prima facie debt had been shown, but referred the question of the ICSID tribunal’s exclusive competence under Art. 26 of the Convention to the Court of First Instance. In the meantime, Guinea requested the ICSID tribunal to direct MINE to dissolve all pending attachments in accordance with Art. 26. MINE responded by arguing that the actions before domestic courts were not related to the ICSID arbitration, but sought enforcement of the AAA award. The ICSID tribunal issued a provisional measure under Art. 47 (see Art. 47, paras. 146–150), ruling that ‘MINE’s litigation to enforce the AAA award in European courts constituted an “other remedy” under Art. 26 of the ICSID Convention; . . .’ Therefore, it directed that ‘MINE dissolve every existing attachment and that it seek no new remedy in any national court.’16 MINE thereupon withdrew its appeal in Belgium, but continued its attachments in Switzerland, contending that Guinea refused to agree to the withdrawal of the security that MINE had filed in order to obtain the attachments.17 When the case reached the Court of First Instance of the Canton of Geneva,18 the Court noted the proceedings pending before ICSID and the Tribunal’s provisional measures. It found that, by virtue of Art. 26 of the ICSID Convention, the parties did not have the right to seek non-ICSID remedies. Therefore, MINE’s application to have the AAA award enforced was rejected.19

13 Guinea v MINE, Belgium, Court of First Instance, Antwerp (27 September 1985) (1997) 4 ICSID Reports 32. It appears that these attachments had been obtained for the purpose of enforcing the AAA award rather than as provisional measures in the ICSID proceedings, although this is not entirely clear from the court’s decision. 14 An appeal by MINE against this decision was subsequently abandoned. 15 Guinea v MINE, Switzerland, Tribunal fédéral (4 December 1985) (1997) 4 ICSID Reports 39. 16 The Decision on Provisional Measures of 4 December 1985 is unpublished. The above citations are taken from MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 69. 17 ibid 77. 18 Guinea v MINE, Switzerland, Tribunal de première instance, Geneva (13 March 1986) (1997) 4 ICSID Reports 41. 19 A subsequent effort by MINE to maintain the attachments, not on the basis of the AAA award, but as provisional or conservatory measures in connection with the pending ICSID proceedings, failed. See para 275 infra.

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In the ICSID arbitration, Guinea made counterclaims for legal expenses arising from the AAA arbitration and from the subsequent attachments to have the resulting award enforced in Belgium and Switzerland. The counterclaims concerning the AAA arbitration were rejected because of Guinea’s failure to respond, or voice a timely objection, to MINE’s selection of what proved to be an improper forum. With regard to the attachment proceedings before the national courts, the Tribunal found that they were contrary to ICSID’s exclusive jurisdiction and, therefore, allowed Guinea’s counterclaim although the sum awarded under this counterclaim was reduced by about one-third.20 A different question is whether a party can, on the one hand, rely on its right to the exclusivity of the ICSID proceedings and, at the same time, argue that it did not consent to ICSID arbitration. This question arose in the jurisdictional phase of Duke Energy v Peru. In that case, Peru filed a request for provisional measures asking the Tribunal to order Duke to withdraw a petition it had filed before the US Trade Representative (USTR) to revoke or suspend Peru’s beneficiary status under the Andean Trade Preference Act.21 Peru also requested a provisional measure from the Tribunal to the effect that Duke Energy seek no new remedy in any non-ICSID proceeding. At the same time Peru was disputing the Tribunal’s jurisdiction on several grounds. The Tribunal invited the parties to exchange submissions in response to the following question:

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Can a party claim lack of consent on the one hand (for purposes of Articles 25 and 41 of the ICSID Convention) and, on the other, its right to the exclusivity of ICSID proceedings (including preclusion of the other party’s right to seek diplomatic protection) based on the existence of consent (for purposes of Articles 26, 27 and 47 of the ICSID Convention)?22

Following a decision by the USTR to suspend its review of Duke Energy’s petition pending the ICSID proceedings, Peru withdrew the request for provisional measures and thus the Tribunal’s question remained unanswered. The answer has to be that the exclusivity of the ICSID proceeding must be preserved regardless of whether the ICSID tribunal’s jurisdiction is disputed. Art. 26 applies once ICSID proceedings are initiated – nothing in the text of the ICSID Convention states or implies otherwise. Of course, if the ICSID tribunal concludes that it has no jurisdiction, it will be open to the parties to seek other remedies.

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B. ‘. . . unless otherwise stated, . . .’ The exclusive remedy rule of Art. 26 is subject to modification by agreement of the parties. The parties are free to provide for other dispute settlement procedures in addition to ICSID arbitration or to subject certain parts of their relationship to procedures other than ICSID arbitration. Consent to remedies other than ICSID arbitration does not necessarily exclude ICSID arbitration. The exclusive remedy rule of Art. 26 is not a requirement of consent to ICSID arbitration, but merely a rule of interpretation,

20 MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 76–77. 21 Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 15. 22 ibid para 16.

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which operates to exclude other remedies ‘unless otherwise stated.’ Therefore, submission to other dispute settlement procedures cannot be interpreted as invalidating consent to ICSID arbitration. Even if the parties have created an exception to the exclusive remedy rule, by agreeing on another forum, this does not mean that they have invalidated their consent to ICSID jurisdiction. In other words, the exclusive remedy rule of Art. 26 does not work in reverse: non-exclusivity of ICSID does not exclude ICSID’s jurisdiction. In Casinos Austria v Argentina, the Claimants’ local subsidiary had initiated proceedings in local courts in relation to the withdrawal of its license. Art. 8(4) of the Argentina–Austria BIT requires disputing parties to take all necessary measures to withdraw from any pending judicial proceedings. Argentina argued that this requirement was a condition of its consent and objected to the Tribunal’s jurisdiction on the ground that the local subsidiary continued to pursue domestic court proceedings. Argentina further argued that this conduct was ‘irreconcilable with Article 26 of the ICSID Convention.’23 With respect to the first argument, the Tribunal held that the Claimants could not be required to withdraw from the domestic proceedings before the Tribunal reached a decision that it had jurisdiction, and took note of the Claimants’ undertaking that, once a positive decision on jurisdiction was arrived at by the Tribunal, they would take all measures to withdraw from the domestic proceedings.24 Having disposed of that argument, the Casinos Austria tribunal turned to the second prong of Argentina’s objection based on the alleged incompatibility of the Claimants’ conduct with Art. 26. The Tribunal stated: Article 26, first sentence of the ICSID Convention, which provides that ‘[c]onsent of the parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy,’ does not suggest a different conclusion or a different construction of Article 8(4) of the BIT. While Article 26 of the ICSID Convention provides for the exclusivity of ICSID arbitration to resolve the dispute in question, the provision only has an effect on the proceedings pending in parallel to the ICSID arbitration; Article 26 of the ICSID Convention does not stipulate that parallel pendency in another forum has an effect on the jurisdiction or admissibility of the ICSID arbitration. Instead, the parties’ consent to ICSID arbitration, and by prolongation the jurisdiction of the Tribunal, remain unaffected by the existence of parallel proceedings in another forum. Article 26 of the ICSID Convention does therefore not suggest a different construction of Article 8(4) of the BIT from the one adopted by the Tribunal above. On the contrary, the exclusivity rule of Article 26 of the ICSID Convention supports the Tribunal’s conclusion that the exclusivity of the ICSID arbitration should be achieved by withdrawing the proceedings pending in parallel before Argentine courts as stipulated in Article 8(4) of the BIT.25

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Thus, Art. 26 does not exclude consent to multiple acceptances of jurisdiction in respect of the same dispute. Such multiple acceptances, however, have repeatedly led to practical problems.

23 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 98. 24 ibid para 333. 25 ibid para 334.

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1. Concurrent Arbitration Clauses a) Form of Concurrent Arbitration Clauses In many bilateral investment treaties (BITs), ICSID clauses are combined with references to other arbitration systems, such as arbitration under the auspices of the International Chamber of Commerce (ICC), the Stockholm Chamber of Commerce (SCC), the London Court of International Arbitration (LCIA), or ad hoc arbitration under the Arbitration Rules adopted by the United Nations Commission for International Trade Law (UNCITRAL). In some BITs, non-ICSID arbitration is only foreseen if ICSID arbitration is not available.26 A number of British BITs list several arbitration systems, including ICSID, ICC, and UNCITRAL, from which the investor and host State may choose by agreement. If there is no agreement, UNCITRAL arbitration will be available to the investor27 (see Art. 25, para. 849). Under these types of clauses, no problems of concurrence will arise. Other ICSID clauses in BITs offer genuine choices among several arbitration systems. These may be found, for example, in BITs concluded by Switzerland and the United States. These clauses are described at some length in the context of consent to ICSID arbitration (see Art. 25, paras. 843–848). Under these clauses, the party entitled to choose has a genuine alternative between ICSID and non-ICSID arbitration.28 In other words, the exclusive remedy rule of Art. 26 will only apply once the investor has accepted the State’s offer in the treaty to arbitrate under the ICSID Convention. The North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States also provides for several forms of arbitration: Article 1120: Submission of a Claim to Arbitration 1. Except as provided in Annex 1120.1, and provided that six months have elapsed since the events giving rise to a claim, a disputing investor may submit the claim to arbitration under: (a) the ICSID Convention, provided that both the disputing Party and the Party of the investor are parties to the Convention; (b) the Additional Facility Rules of ICSID, provided that either the disputing Party or the Party of the investor, but not both, is a party to the ICSID Convention; or (c) the UNCITRAL Arbitration Rules.29

26 See eg Denmark–Latvia BIT (signed 30 March 1992, entered into force 28 November 1994) Art. 2(2); Switzerland–Viet Nam BIT (signed 3 July 1992, entered into force 3 December 1992) Art. 9(2); France– Hungary BIT (signed 6 November 1986, entered into force 30 September 1987) Art. 9; Germany–St Vincent and the Grenadines BIT (signed 25 March 1986, entered into force 8 January 1989) Art. 10; Spain–Venezuela BIT (signed 2 November 1995, entered into force 10 September 1997) Art. XI(3). 27 See UK Model IPPA (2008) Art. 8 (Alternative II); Saint Lucia–United Kingdom BIT (signed and entered into force 18 January 1983) Art. 8; Malta–United Kingdom BIT (signed and entered into force 4 October 1986) Art. 8; Mongolia–United Kingdom BIT (signed and entered into force 4 October 1991) Art. 8. 28 See CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 56–58. 29 North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, 643. The United States-Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020) in Art. 14.D.3(3) provides for a similar choice.

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Under this provision, the investor may opt for UNCITRAL arbitration, even if ICSID arbitration, or arbitration under the Additional Facility is available. Similar alternatives are offered under the Energy Charter Treaty (ECT) (see Art. 25, para. 871) and several regional treaties (see Art. 25, para. 872–874). National legislation offering access to ICSID arbitration (see Art. 25, paras. 780–824) may also provide for several alternative arbitration procedures. Specifying the arbitral system in an agreement between the host State and the investor may be a condition of consent (see Art. 25, paras. 799, 820). In this case, the problem of concurrent arbitration clauses will not arise. But arbitration clauses in national investment laws may offer a genuine choice among several possibilities. The investor may exercise this choice by accepting the host State’s offer in writing prior to the institution of proceedings (see Art. 25, paras. 817–824). Such an acceptance may contain a selection of one of the several options open to it. But the investor may also accept the host State’s offer by instituting proceedings, thereby leaving its options open up to the moment the forum is selected in a particular dispute. Direct agreements between host States and investors may also contain concurrent arbitration arrangements. These are less likely to arise from single clauses offering a choice of several arbitration systems than from contractual arrangements consisting of consecutive documents spread over a period of time. These documents may contain different arbitration clauses, the relationship of which is not clear (see Art. 25, paras. 999–1020). In Klöckner v Cameroon, the problems as to ICSID’s jurisdiction arose from a sequence of contracts between the host country and the investor, which contained arbitration clauses referring to ICSID, as well as to the ICC (see also Art. 25, para. 1001). The parties had, in 1971, entered into a general ‘Protocol of Agreement’ providing for the construction and operation of a fertilizer factory. The agreement contained an ICSID arbitration clause. This general agreement was followed by a series of more specific agreements dealing with particular aspects of the overall relationship. One of these more specific agreements was a ‘Supply Contract’ for the fertilizer factory of 1972 containing an ICSID clause identical to the one in the Protocol of Agreement. Another was a ‘Management Contract’ of 1977, which contained an ICC arbitration clause.30 The parties to the Management Contract of 1977 were Klöckner and SOCAME, a joint venture company which, at the time, was under the majority control of the foreign investor. Therefore, an ICSID clause in this contract was impossible because no Contracting State (or a constituent subdivision or an agency of a Contracting State) was involved (see Art. 25, paras. 915–916). It was only later that SOCAME became an agency of Cameroon (see Art. 25, para. 567). The situation was further complicated by the fact that the original Protocol of Agreement already provided for the management of the project by Klöckner ‘under a Management Contract,’ and that Klöckner had actually started exercising this function some time before the conclusion of the Management Contract. After the collapse of the operation, Klöckner instituted ICSID arbitration proceedings in 1981.31 The Claimant seized the Tribunal on the basis of the ICSID clause in the 30 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 9. 31 For a general description, see Jan Paulsson, ‘The ICSID Klöckner v Cameroon Award: The Duties of Partners in North–South Economic Development Agreements’ (1984) 1 J Int’l Arb 145.

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1972 Supply Contract, but did not contest the extension of the Tribunal’s jurisdiction based on the ICSID clause in the more general Protocol of Agreement. When Cameroon made counterclaims for losses arising from Klöckner’s performance, Klöckner sought to exclude questions arising from its management of the enterprise from the purview of ICSID’s jurisdiction by relying on the ICC clause in the 1977 Management Contract. The Tribunal found that it had jurisdiction to rule on all aspects of the original undertaking.32 It conceded that there might be disputes arising exclusively from the Management Contract, which would be beyond the jurisdiction of ICSID, and subject to the ICC clause. However, Klöckner’s performance of its management obligations was and remained subject to ICSID jurisdiction by virtue of the undertaking to be responsible for management in the original Protocol of Agreement and the ICSID clause contained therein. In the Tribunal’s view, the subsequent Management Contract did not withdraw ICSID’s jurisdiction from that part of the overall relationship.33 The Tribunal found additional support for this interpretation in the fact that Klöckner itself had acknowledged the ICSID tribunal’s jurisdiction with respect to the entire Protocol of Agreement, without excepting the provision on management. Even if there had been doubt about the relationship of the two arbitration clauses, Klöckner’s submissions before the Tribunal would have constituted consent to ICSID’s jurisdiction in this respect as well.34 The Dissenting Opinion to the award35 reached the conclusion that the ICSID tribunal had no jurisdiction to evaluate Klöckner’s possible responsibility resulting from the management of the enterprise. It concluded that the Management Contract was the single source of all the responsibilities arising from this part of the relationship and that the parties had consciously chosen to depart from the original arbitration clause in the implementing agreement.36 The entire award was subsequently annulled for different reasons.37 However, the ad hoc Committee was also critical of the Tribunal’s reasoning that it had jurisdiction to rule on all aspects of the original undertaking. It found the Tribunal’s argument that Klöckner had submitted to ICSID arbitration in respect of its management, by admitting jurisdiction over the entire Protocol of Agreement, including the provision on management, unconvincing. Klöckner had always contested this part of the Tribunal’s jurisdiction, and had interpreted the references to management in the Protocol of Agreement as a mere obligation to conclude a management contract.38 On the decisive question of whether or not the later ICC clause had implicitly limited the earlier ICSID clause, the ad hoc Committee came to the conclusion that both interpretations were possible: There may of course be differences on the correct interpretation of the Protocol of Agreement and . . . its relationship to a subsequent agreement like the Management Contract. The inclusion of an ICC arbitration clause in this latter contract may also be 32 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3. 33 ibid 13–14, 17–18, 68–70. 34 ibid 14. 35 See Friedrich Niggemann, ‘The ICSID Klöckner v Cameroon Award: The Dissenting Opinion’ (1984) 1 J Int’l Arb 331. See also Friedrich Niggemann, ‘Zuständigkeitsprobleme der Weltbankschiedsgerichtsbarkeit im Licht der bisherigen Schiedsverfahren’ (1985) 5 IPRax 185, 191–192. 36 Klöckner v Cameroon, Dissenting Opinion Schmidt (21 October 1983) (1994) 2 ICSID Reports 77, 89–93. 37 Klöckner v Cameroon, Decision on Annulment (3 May 1985). 38 ibid paras 4–10.

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schreuer’s commentary on the icsid convention interpreted in opposing ways. In this case, the Tribunal refused to accept, in the absence of completely precise and unequivocal contractual provisions, that the parties to the Management Contract wanted to ‘derogate’ from the Protocol’s ICSID clause. The Tribunal may have implicitly accepted that the ICSID clause constituted for both parties an ‘essential jurisdictional guarantee,’ the relinquishment of which could neither be presumed nor accepted in the absence of clear evidence. Such an interpretation of the agreements and especially of the two arbitration clauses, whether correct or not, is tenable and does not in any event constitute a manifest excess of powers . . .39

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It is clear that the exclusive remedy rule of Art. 26 was not as such applicable in view of the parties’ consent to ICC arbitration, because Art. 26 only applies ‘unless otherwise stated.’ On the other hand, the competing jurisdiction of another system of arbitration, such as ICC arbitration, does not necessarily exclude ICSID arbitration. Overlapping consent clauses referring to different types of arbitration within the same overall relationship, while permitted under Art. 26, are undesirable and should be avoided. Once a dispute arises, it is often not practical to dissect the relationship into different segments and to pursue remedies simultaneously in separate fora. If competing consent clauses exist nevertheless, it makes more sense to have the entire dispute heard by one tribunal, preferably the one with the most comprehensive jurisdiction. In the Klöckner case, this was clearly the ICSID tribunal. A provision derogating from ICSID’s exclusivity by adding another remedy does not, unless clearly so intended, rule out ICSID arbitration. Providing for additional procedures should be interpreted as giving the claimant a choice of remedies. However, once this choice has been made, the parties must be bound by it. The principles of ne bis in idem and res judicata would clearly preclude any attempt by a party to one set of arbitration proceedings to seek another remedy in the same matter under different arbitration rules. In Nova Scotia Power v Venezuela, the Canada–Venezuela BIT provided for arbitration before ICSID or the ICSID Additional Facility, and for arbitration under the UNCITRAL Arbitration Rules only in case ICSID or the Additional Facility were not ‘available.’ Nova Scotia Power initiated arbitration under the UNCITRAL Arbitration Rules. Venezuela argued that the Additional Facility was available and therefore the UNCITRAL tribunal lacked jurisdiction.40 The Tribunal agreed and declined jurisdiction.41 In the subsequent arbitration under the ICSID Additional Facility, Nova Scotia Power argued, inter alia, that the Tribunal had jurisdiction because Venezuela had stated in the UNCITRAL arbitration that the Additional Facility was the proper forum to resolve the dispute.42 The Tribunal, however, was not convinced that Venezuela’s statement in the UNCITRAL arbitration determined its jurisdiction ‘in any way’ and concluded that Venezuela’s statement did not represent ‘a concession to jurisdiction.’43 The Tribunal 39 ibid para 52(b). See also Dennis Thompson, ‘The Klöckner v Cameroon Appeal: A Note on Jurisdiction’ (1986) 3 J Int’l Arb 93. 40 Nova Scotia Power v Venezuela (UNCITRAL), Award on Jurisdiction (22 April 2010) paras 35, 51. 41 ibid para 147. 42 Nova Scotia Power v Venezuela (AF), Award (30 April 2014) para 44. On whether a negative finding on jurisdiction by the first arbitral tribunal would have a preclusive effect on the second arbitral tribunal, see Iberdrola v Guatemala (UNCITRAL), Award (24 August 2020) para 267. 43 Nova Scotia Power v Venezuela (AF), Award (30 April 2014) para 44.

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ultimately declined jurisdiction because it concluded that there was no investment within the meaning of the BIT.44 In a number of instances, ICSID tribunals were confronted with non-ICSID arbitration proceedings relating to the same disputes. The issue of concurrent ICSID and nonICSID proceedings is discussed below (see paras. 170–198 infra).

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b) Validity of Concurrent Arbitration Clauses The applicability of the exception to the exclusive remedy rule under Art. 26 depends on the validity of the alternative consent to arbitration. If the consent to non-ICSID arbitration is void or inapplicable to the dispute, the phrase ‘unless otherwise stated’ does not apply. In SPP v Egypt, there was no completed consent to ICSID arbitration at the outset. Egypt had, it was argued, merely offered to consent to ICSID dispute settlement in general terms in its legislation. This offer was subject to the investor’s acceptance (see Art. 25, paras. 790–792, 818). Therefore, the exclusive remedy rule of Art. 26 was not applicable. SPP first instituted ICC proceedings in 1978 against Egypt and EGOTH, an Egyptian public sector enterprise, for breach of a 1974 agreement for the development of two international tourist complexes in Egypt between SPP and EGOTH, which contained an ICC arbitration clause. An award was rendered against Egypt in the ICC proceedings in 1983.45 Egypt applied for annulment of the ICC award to the French courts, claiming that there had been no valid arbitration agreement with Egypt, because the signature of the Egyptian minister on the contract merely signaled his approval of the contract, but not submission of the Egyptian State to arbitration. The Paris Court of Appeals on 12 July 1984 annulled the ICC award on the ground that Egypt had not been a party to the 1974 Agreement and, therefore, was not bound by the ICC clause therein.46 Shortly thereafter, SPP initiated ICSID arbitration against Egypt. SPP also appealed the Paris Court of Appeals’ decision to the French Cour de cassation. Before the ICSID tribunal, Egypt attempted to rely on Art. 26 to show that SPP’s submission to ICSID arbitration was invalid. Egypt’s position was that, by reserving its rights under the ICC award, SPP had not accepted the exclusive remedy requirement of Art. 26.47 The Tribunal rejected this argument and pointed out that the exclusive remedy rule of Art. 26 did not mean that failure to waive other remedies impairs consent to ICSID jurisdiction. This was underlined by the words ‘unless otherwise stated’ in Art. 26.48 Whether the parties had indeed agreed on another remedy depended on the validity of the ICC arbitration clause. The Tribunal also rejected Egypt’s argument that 44 ibid para 113. 45 SPP v Egypt (ICC), Award (11 March 1983) (1995) 3 ICSID Reports 46. 46 Egypt v SPP, France, Cour d’appel, Paris (12 July 1984) (1995) 3 ICSID Reports 79. See the case notes by Berthold Goldman in (1985) 112 JDI 129 and Philippe Leboulanger in [1986] Revue de l’arbitrage 3, 11. See also Patrice Rambaud, ‘L’affaire “des pyramides”’ (1985) 31 AFDI 508; Georges R Delaume, ‘The Pyramids Stand – The Pharaoes Can Rest in Peace’ (1993) 8 ICSID Rev 231; W Laurence Craig, ‘The Final Chapter in the Pyramids Case: Discounting an ICSID Award for Annulment Risk’ (1993) 8 ICSID Rev 264, 266. 47 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) paras 53–56. 48 ibid para 58.

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the Claimants’ pursuit of remedies before the ICC and ICSID should be barred by the principle of estoppel. The Tribunal found no inconsistency or bad faith in pursuing alternative remedies.49 On the possibility of concurrent jurisdiction, the Tribunal said: When the jurisdictions of two unrelated and independent tribunals extend to the same dispute, there is no rule of international law which prevents either tribunal from exercising its jurisdiction. However, in the interest of international judicial order, either of the tribunals may, in its discretion and as a matter of comity, decide to stay the exercise of its jurisdiction pending a decision by the other tribunal.50

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Therefore, the Tribunal rejected Art. 26 as a bar to its jurisdiction, but ordered a stay of the ICSID proceedings until the French courts had finally decided whether the parties had agreed to submit to ICC arbitration.51 After the French Cour de cassation had confirmed the nullity of the ICC award,52 the ICSID tribunal resumed its proceedings and found that it had now been established that the parties before it had not agreed on a method of dispute resolution which would have constituted a bar to the application of the ICSID clause in the Egyptian legislation. SPP attempted to preserve some benefit from the ICC arbitration by suggesting that the ICSID tribunal ‘adopt and incorporate as its own the pertinent findings of fact made by the ICC Arbitral Tribunal.’ This, the Tribunal found unacceptable, both in principle and under ICSID’s Arbitration Rules, which require tribunals to make their own findings of fact53 (Arbitration Rule 47(1)(g)). In Joy Mining v Egypt, the jurisdiction of ICSID was based on the BIT between Egypt and the United Kingdom. A contract for the provision of mining equipment between the Claimant and IMC, an Egyptian State entity, contained a forum selection clause which, in addition to reference to domestic courts, provided for UNCITRAL arbitration. Before the ICSID Tribunal, the Claimant expressed the concern that in view of the requirements that had led to the annulment of the ICC Award in SPP v Egypt, the UNCITRAL clause might not be honored.54 The ICSID tribunal found that, in the absence of an investment, it lacked jurisdiction, but that resort to UNCITRAL arbitration remained open to the Claimant. It noted that, at the hearing, Egypt had given the assurance and formal commitment that it would abide by the UNCITRAL clause. The Tribunal noted that the solemn declaration had been made on behalf of both the Egyptian State and IMC and that this constituted an international legal obligation.55

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The parties may agree on the utilization of domestic judicial remedies, even if there is consent to ICSID arbitration. Exhaustion of local remedies is not a requirement under the ICSID Convention, but may be required by the host State (see paras. 298–363 infra). 49 51 52 53 54 55

ibid paras 60–63. 50 ibid para 84. ibid para 88. Egypt v SPP, France, Cour de cassation (6 January 1987) (1995) 3 ICSID Reports 96. SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 120, 121. Joy Mining v Egypt, Award (6 August 2004) paras 92–93. ibid paras 95–98.

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Explicit reference to domestic courts means that the exclusive remedy rule of Art. 26 does not apply, since the parties have stated otherwise. Whether domestic court proceedings are offered as an alternative to ICSID arbitration, as a preliminary remedy before the institution of ICSID proceedings, or as a remedy replacing ICSID arbitration depends on the terms of the particular consent agreement. But the traditional relationship between domestic and international adjudication creates a strong presumption that concurrent reference to domestic courts and to ICSID arbitration means that resort to domestic remedies does not preclude resort to ICSID, and that decisions of domestic courts may be the basis for claims presented to ICSID tribunals. BITs containing ICSID clauses sometimes also provide for dispute settlement by domestic courts. Some of these provide that resort may be had to domestic courts, often for a certain period of time, but that domestic remedies need not be exhausted before the institution of ICSID proceedings. Others provide that local remedies must be exhausted before ICSID arbitration (see paras. 312–325 infra). In either case, the exclusive remedy rule of Art. 26 does not apply and proceedings may be instituted before domestic courts. It is also clear, in either case, that the option of ICSID arbitration remains open after the proceedings before domestic courts. Another recurrent clause in BITs gives the investor a choice between domestic proceedings and international arbitration, including ICSID. Under these so-called fork-in-the-road clauses, opting for domestic courts would typically preclude ICSID arbitration and vice versa (see paras. 64–100 infra).56 Some national investment laws also contain references to ICSID as well as to domestic courts. In some cases, it is obvious that the attempt to utilize domestic remedies will not preclude subsequent resort to ICSID adjudication. For instance, Art. 26 of the Investment Law of Yemen of 2010 provided that, while ‘Yemeni commercial courts shall be the competent authority to resolve investment disputes,’ the dispute can also be referred to arbitration.57 In Zhinvali v Georgia, the Claimant argued to the ICSID Tribunal that the Respondent’s consent was contained in Art. 16(2) of Georgia’s Investment Law, which provided for a choice of dispute resolution forum between the Georgian courts and ICSID proceedings. The Claimant further contended that the choice of forum was to be made solely by the investor.58 The Tribunal reviewed the purpose and context of the Georgian Law and agreed with the Claimant that the choice of forum was for the benefit of the investor and should be made at the latter’s choice.59

56 See US Model Agreement (1992) Art. VI, reproduced in Rudolf Dolzer and Margrete Stevens, Bilateral Investment Treaties (Martinus Nijhoff 1995) 240, 247. See also the Estonia–United States BIT (signed 19 April 1994, entered into force 16 February 1997) Art. VI; Estonia–Poland BIT (signed 6 May 1993, entered into force 6 August 1993) Art. 7(2); Argentina–Venezuela BIT (signed 16 November 1993, entered into force 1 July 1995) Art. 11. See also Antonio R Parra, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Rev 287, 334, 351–352; Kaufmann-Kohler and Potestà (n 1) 39–43. 57 Law No 15 of 2010 accessed 10 January 2021. See also Art. 8 of the Albania Law on Foreign Investment (1993) in Investment Laws of the World vol I (loose-leaf, Oceana 2016). 58 Zhinvali v Georgia, Award (24 January 2003) paras 328–332. 59 ibid paras 335–337.

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The situation in Holiday Inns v Morocco60 bears a certain resemblance to the Klöckner case (see paras. 33–40 supra) in that there were several contracts containing different jurisdiction clauses. After the execution of a basic agreement between the Government and the investor, which contained an ICSID arbitration clause, there were several subsidiary contracts, including loan contracts, between the local subsidiaries of Holiday Inns and a government agency, C.I.H. These contracts provided for dispute settlement before the courts of Morocco. Morocco argued that the ICSID tribunal should stay the proceedings and await the decision of the Moroccan courts on the loan contracts. Even then, the Moroccan Government argued, the Tribunal should only examine the possible effects of such Moroccan decisions on the rights and obligations of the parties to the international arbitration. The Tribunal squarely rejected these contentions. It emphasized the general unity of the investment operation and the principle that ‘international proceedings in principle have primacy over purely internal proceedings.’ Where an investment is accomplished by a number of juridical acts, it was important not to consider these in complete isolation. While questions affecting the indirect or secondary aspects of the investment could properly fall within the jurisdiction of the local courts, a conflict of jurisdiction would have to be resolved in favor of ICSID arbitration. The Tribunal said: the Moroccan tribunals should refrain from making decisions until the Arbitral Tribunal has decided these questions or, if the Tribunal had already decided them, the Moroccan tribunals should follow its opinion. Any other solution would, or might, put in issue the responsibility of the Moroccan State and would endanger the rule that international proceedings prevail over internal proceedings.61

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This decision appears convincing. In addition, the considerations outlined above in the context of competing ICSID and ICC clauses (para. 48 supra) apply here with equal force. In SOABI v Senegal, the request for arbitration had been introduced on the basis of an ICSID clause contained in an agreement for the establishment of a prefabricated industrial concrete plant (‘the Establishment Agreement’).62 Senegal objected to the Tribunal’s jurisdiction, arguing that the investment operation was also regulated by a subsequent agreement, the General Undertaking, which provided for dispute settlement by the municipal courts. The Tribunal rejected Senegal’s contentions as it found that the dispute settlement clause contained in the General Undertaking concerned only a very particular type of disputes, i.e., disputes between the engineer and the contractor during the construction work, and did not apply after completion of the work. The Tribunal further opined that the General Undertaking applied to the construction of a building,

60 See Pierre Lalive, ‘The First “World Bank” Arbitration (Holiday Inns v. Morocco) – Some Legal Problems’ (1980) 51 BYBIL 123. See also W Michael Tupman, ‘Case Studies in the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1986) 35 ICLQ 813, 819 ff; Niggemann, ‘Zuständigkeitsprobleme’ (n 35) 190–191. 61 Holiday Inns v Morocco, Further Decision on Jurisdiction (12 May 1974) (as reported in Lalive (n 60) 160). 62 SOABI v Senegal, Award (25 February 1988) paras 4.44–4.52.

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and was not an agreement concerning investments. Consequently, disputes arising under this agreement were not investment disputes under Art. 25 of the Convention.63 Consent to the jurisdiction of domestic courts in derogation of the exclusive remedy rule of Art. 26 need not be given explicitly. Tacit consent may be seen in pleading on the merits before the non-ICSID forum, without invoking ICSID’s exclusive jurisdiction.

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3. Fork-in-the-Road Clauses Fork-in-the-road provisions are attached to the consent clauses of some BITs. They offer the investor a choice between the host State’s domestic courts and international arbitration. The choice, once made, is final. Under a typical fork-in-the-road clause, if the investor resorts to the host State’s domestic courts to have the dispute settled, it loses the right to international arbitration. In terms of the ICSID Convention, a clause of this kind creates an exception to the exclusivity provided by Art. 26, because the parties would have agreed ‘otherwise,’ that is, to submit the dispute to domestic courts. Moreover, under the explicit terms of the clause, it excludes access to ICSID arbitration once the alternative – litigation in domestic courts – has been chosen. If, by contrast, the investor resorts to international arbitration first, under a typical BIT provision, it would not lose its right to subsequently resort to domestic courts. However, resort to domestic courts in such circumstances would be contrary to the exclusivity requirement in Art. 26.64 An example of a fork-in-the-road provision is contained in Art. VI of the Estonia– United States BIT:

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2. . . . If the dispute cannot be settled amicably, the national or company concerned may choose to submit the dispute for resolution: (a) to the courts or administrative tribunals of the Party that is a party to the dispute; or (b) in accordance with any applicable, previously agreed dispute-settlement procedures; or (c) in accordance with the terms of paragraph 3. 3. (a) Provided that the national or company concerned has not submitted the dispute for resolution under paragraph 2 (a) or (b) . . . the national or company concerned may choose to consent in writing to the submission of the dispute for settlement by binding arbitration: (i) to [ICSID] . . .

Under provisions of this kind, the loss of access to international arbitration applies only if the same dispute was submitted to the domestic courts. Investors are often drawn into legal disputes of one sort or another in the course of their investment activities.

63 ibid paras 4.48–4.50. 64 For more detailed treatment, see Christoph Schreuer, ‘Travelling the BIT Route: Of Waiting Periods, Umbrella Clauses and Forks in the Road’ (2004) 5 JWIT 231, 239; Hanno Wehland, The Coordination of Multiple Proceedings in Investment Treaty Arbitration (OUP 2013) paras 3.119–3.158. See also Daniel Kalderimis and others, ‘ICSID Convention, Chapter II, Article 26 [Exclusive Remedy]’ in Loukas A Mistelis (ed), Concise International Arbitration (Kluwer 2015) 82; Matthew C Porterfield, ‘Exhaustion of Local Remedies in Investor–State Dispute Settlement: An Idea Whose Time Has Come?’ (Fall 2015) 41 Yale JIL 1; Noah Rubins, Thomas-Nektarios Papanastasiou and N Stephan Kinsella, International Investment, Political Risk and Dispute Resolution (2nd edn, OUP 2020) paras 7.45–7.52.

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These disputes may relate in some way to the investment, but they are not necessarily identical to the dispute covered by the BIT’s provisions on consent to arbitration. In order to determine whether the choice under a fork-in-the-road clause has been made, it is necessary to establish if the parties and the causes of action in the two sets of lawsuits are identical. The loss of access to international arbitration applies only if the same dispute between the same parties has previously been submitted to the domestic courts. This principle is now well-established and has been confirmed in a number of decisions.65 For instance, in Genin v Estonia, jurisdiction was based on the Estonia–United States BIT. The Claimants, US nationals, were the principal shareholders of EIB, a bank incorporated under the laws of Estonia. The claims arose, principally, from EIB’s purchase of a branch of ‘Social Bank’ and from the revocation of EIB’s license by the Estonian authorities. EIB sued Social Bank in a local court for losses from the purchase. EIB also instituted proceedings before the Administrative Court, challenging the revocation of the license.66 In the ICSID proceedings Estonia argued that ‘by choosing to litigate their disputes with Estonia in the Estonian courts . . . Claimants have exhausted their right to choose another forum to relitigate those same disputes.’67 The Tribunal found that the lawsuits undertaken by EIB in Estonia were not the same as the ‘investment dispute’ that was the subject-matter of the ICSID proceedings. Both the causes of action and the parties were different in the national and in the international proceedings. Therefore, the domestic lawsuits did not constitute the choice under the BIT’s fork-in-the-road provision. The Tribunal said: the lawsuits in Estonia relating to the purchase by EIB of the Koidu branch of Social Bank and to the revocation of EIB’s license are not identical to Claimants’ cause of action in the ‘investment dispute’ that they seek to arbitrate in the present proceedings. The actions instituted by EIB in Estonia . . . certainly affected the interests of the Claimants, but this in itself did not make them parties to these proceedings.68

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In Middle East Cement v Egypt, Art. 10.2 of the Egypt–Greece BIT provided that investment disputes between the Contracting Parties may be brought either to the

65 See only Olguín v Paraguay, Decision on Jurisdiction (8 August 2000) paras 20–23, 30; Vivendi v Argentina, Award (21 November 2000) paras 40, 42, 53–55, 81; ibid, Decision on Annulment (3 July 2002) paras 38, 42, 55; Middle East Cement v Egypt, Award (12 April 2002) para 71; CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 77–82; Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) para 3.4.3; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 37–41, 86–92; Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 95–98; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) paras 75, 76; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 155–157; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 203–212. For non-ICSID cases, see Hulley Enterprises v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 597–599; Veteran Petroleum v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 609–611; Yukos Universal v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 598–600; Khan Resources v Mongolia (UNCITRAL), Decision on Jurisdiction (25 July 2012) paras 388–400; Charanne v Spain (SCC), Award (21 January 2016) paras 398–410. 66 Genin v Estonia, Award (25 June 2001) paras 47, 58. 67 ibid para 321. 68 ibid para 331.

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competent local courts or ‘to an international arbitral tribunal.’69 The Respondent argued that the Claimant had waived its right to go to international arbitration by resorting to the Egyptian courts to contest the validity of the auctioning procedure for a ship belonging to the Claimant. The Tribunal held that, while the BIT referred to investment disputes between an investor and the host State, the case before the Egyptian courts did not, and could not, concern Egypt’s obligations under the BIT, but only the validity of the auction under Egyptian law.70 Accordingly, the Claimant’s conduct in the court proceedings could not be considered a waiver under Art. 10.1 of the BIT.71 One of the questions examined by the first ad hoc Committee in Vivendi v Argentina was the Tribunal’s reasoning that recourse by the Claimants to the Argentine administrative courts would not have precluded recourse to ICSID arbitration under the fork-inthe-road provision contained in Art. 8(2) of the Argentina–France BIT.72 The Tribunal had interpreted that provision as being limited exclusively to claims alleging a violation of the treaty, e.g. as being restricted to treaty claims as such, and not extending to claims based on the contract.73 In carrying out its own analysis of Art. 8(2), the ad hoc Committee found as follows:

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Article 8 deals generally with disputes ‘relating to investments made under this Agreement between one Contracting Party and an investor of the other Contracting Party.’ It is those disputes which may be submitted, at the investor’s option, either to national or international adjudication. Article 8 does not use a narrower formulation, requiring that the investor’s claim allege a breach of the BIT itself. Read literally, the requirements for arbitral jurisdiction in Article 8 do not necessitate that the Claimant allege a breach of the BIT itself; it is sufficient that the dispute relate to an investment made under the BIT. . . . In the Committee’s view, a claim by CAA against the Province of Tucumán for breach of the Concession Contract, brought before the contentious administrative courts of Tucumán, would prima facie fall within Article 8(2) and constitute a ‘final’ choice of forum and jurisdiction, if that claim was coextensive with a dispute relating to investments made under the BIT.74

The fork-in-the-road provision in the Argentina–France BIT differs from the typical forkin-the-road clause. The relevant portion of Art. 8(2) of the Argentina–France BIT provided:

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Once an investor has submitted the dispute either to the jurisdictions of the Contracting Party involved or to international arbitration, the choice of one or the other of these procedures shall be final.

Thus, instead of prohibiting access to international arbitration, if the dispute is submitted to domestic courts (but not the reverse), it provides that the choice of either procedure is final. For the ad hoc Committee, when the Claimants started ICSID arbitration and took the ‘fork in the road’ under Art. 8(2), they took the risk of the ICSID tribunal rejecting their claims as not amounting to treaty violations, with the

69 70 71 72 73

See Middle East Cement v Egypt, Award (12 April 2002) para 71. ibid. ibid para 72. Vivendi v Argentina, Decision on Annulment (3 July 2002) para 36. ibid para 38. 74 ibid para 55.

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result that they would have lost both their treaty claims and contract claims.75 Arguably, however, any claims by CAA against the Province of Tucumán under the Concession Contract, while falling within the scope of Art. 8 of the BIT, would not be ‘coextensive’ with, and would thus constitute a different dispute from, the dispute submitted by Vivendi and CAA against Argentina for violations of the BIT. In Toto v Lebanon, the Tribunal had to interpret a similar fork-in-the-road provision. The BIT between Italy and Lebanon provided that the investor had a choice between submitting the dispute to domestic courts, ICSID arbitration, or UNCITRAL arbitration, and that the choice of any of those procedures was final. The Claimant had initiated proceedings in Lebanon for breach of contract. Lebanon argued that this precluded Toto from submitting the dispute to ICSID arbitration. The Tribunal reasoned that it had to consider whether the claim submitted to domestic courts was ‘the same claim,’ that is, a ‘claim with the same object, parties, and cause of action,’ and that claims arising under the contract did not have the same causes of action as claims under the BIT.76 In CMS v Argentina, Argentina argued that the investor had triggered the fork-in-theroad provision of the Argentina–United States BIT because the investment vehicle, the Argentine company TGN, had appealed a decision to the Federal Supreme Court and sought other administrative remedies in Argentina.77 The Tribunal recalled the decisions of other ICSID tribunals on the separation of treaty claims and contract claims and held that submission of a claim for breach of contract to local courts did not prevent resort to arbitration for the treaty claims. The Tribunal further noted that this was particularly apposite in the circumstances of that case, since CMS had not resorted to the local courts, and the parties and causes of action in the two sets of proceedings were different. The Tribunal concluded: Decisions of several ICSID tribunals have held that as contractual claims are different from treaty claims even if there had been or there currently was a recourse to the local courts for breach of contract, this would not have prevented submission of the treaty claims to arbitration. This Tribunal is persuaded that with even more reason this view applies to the instant dispute, since no submission has been made by CMS to local courts and since, even if TGN had done so – which is not the case –, this would not result in triggering the ‘fork in the road’ provision against CMS. Both the parties and the causes of action under separate instruments are different.78

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The treaty between Switzerland and Pakistan which applied in SGS v Pakistan contained neither a fork-in-the-road provision, nor a requirement of prior exhaustion of local remedies before a dispute could be submitted to ICSID arbitration. SGS contended that – in the absence of a fork-in-the-road provision in the relevant BIT – a party could not be held to have waived its right to ICSID arbitration, if it had pursued domestic proceedings, as SGS had done in that case.79 The Tribunal confirmed that the only recourse available to investors under the treaty was ICSID arbitration and that there was no fork-in-the-road provision, nor any requirement of prior recourse to the 75 76 77 78 79

ibid para 113. Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 211. CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 77. ibid para 80 (footnotes omitted). SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 121.

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municipal courts.80 In the circumstances, the Tribunal did not feel free to read into the BIT a requirement that prevented the Claimant from seeking other remedies with regard to its contract claims before it pursued the dispute resolution avenues available under the treaty for its BIT claims.81 In Champion Trading v Egypt, the Respondent argued that a claim brought by the Egyptian company NCC before the Egyptian Conseil d’Etat concerned the same dispute and the same Claimants as the ICSID proceedings. The Tribunal analyzed the terms of the fork-in-the-road clause in the Egypt–United States BIT and concluded that the treaty ‘excludes from ICSID arbitration only those disputes where the ICSID claimant is also the claimant in the national proceedings.’ Since the Claimants were not the same, the Tribunal rejected the Respondent’s objection to its jurisdiction.82 Objections to the Tribunal’s jurisdiction based on the fork-in-the-road provision of the Argentina–United States BIT were also raised in Azurix v Argentina. In that case, ABA, the local company in which Azurix had invested, had lodged administrative appeals. Also, the dispute between ABA and the Province of Buenos Aires over the termination of a concession agreement had been submitted to a local court.83 The Tribunal stressed that submission of a claim for breach of contract to the local courts did not preclude submission of a treaty claim to arbitration under a BIT, particularly when the parties and causes of action under the separate instruments are different.84 Argentina raised similarly unsuccessful objections to the jurisdiction of ICSID tribunals on the basis of fork-in-the-road provisions in a number of subsequent cases:85 Enron v Argentina,86 LG&E v Argentina,87 Sempra v Argentina,88 Continental Casualty v Argentina,89 Total v Argentina,90 and Pan American v Argentina.91 In all these instances, the tribunals rejected Argentina’s jurisdictional objections based on these grounds and found that the fork-in-the-road mechanism of the BIT had not been triggered. In several cases, Argentina raised an objection to jurisdiction, arguing that an amparo action filed by a claimant in Argentine courts triggered the fork-in-the-road provision. This objection has been rejected by tribunals. In Mobil v Argentina, for example, the Tribunal began its analysis by observing: As stated by the Claimants, the fork-in-the-road clause, in the light of the decisions of many ICSID tribunals, only excludes disputes before international tribunals that have been previously brought before local courts when those disputes are between the same parties and involve the same purpose as well as the same cause of action.92 80 82 83 84 85

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ibid para 151. 81 ibid paras 176–177. Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) s 3.4.3. Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 37–41, 86. ibid paras 89, 90 (quoting from CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 80). The BIT applicable in Camuzzi v Argentina I, contained no fork-in-the-road clause strictly speaking but simply a provision that, upon initiating international arbitration, each party should take ‘the measures required to discontinue the court action in progress.’ Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 117, 118. Enron v Argentina, Decision on Jurisdiction (14 January 2004) paras 95–98. LG&E v Argentina, Decision on Jurisdiction (30 April 2004) paras 75–76. Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 116, 127. Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 5. Total v Argentina, Decision on Liability (27 December 2010) para 443. Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 155–157. Mobil v Argentina, Decision on Jurisdiction and Liability (10 April 2013) para 139.

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The Tribunal next found that ‘under Argentine law, the sole purpose of “amparo actions” is to guarantee the protection of constitutional rights upon violations caused by overtly illegal or arbitrary acts on the part of public authorities or private parties’; that amparo actions are not available to seek damages; and that the amparo actions that the Claimants filed with Argentine courts were not based on violations of the Argentina– United States BIT.93 The Tribunal stated: 145. . . . An ICSID arbitral tribunal has not the power to declare an Argentine law unconstitutional or to grant an amparo. The Claimants instituted the amparo actions in order not to lose the rights they contend they have and not in order to seek damages. On the other hand, the purpose of the ICSID arbitration is to establish whether damages are owed by Argentina for violation of the BIT standards. Amparo is not a precondition to claim damages. Thus the amparo actions have a different cause of action and a different purpose and object than this ICSID arbitration. This is so even if decisions rendered in amparo proceedings become res judicata in relation to any subsequent claims for damages in the event that a measure is held to be unlawful. 146. To conclude, this Tribunal has no jurisdiction to set aside any of the laws or regulations envisaged in the amparo actions or declare them void under Argentine law. Conversely, the local courts of Argentina, in an amparo action, had, and have, no authority to adjudicate the legal claims brought in this investment arbitration; that is, they have no jurisdiction to determine whether the foregoing measures, and other measures enumerated in the Request and Ancillary Claims, violated the provisions of the BIT.94

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The Tribunal in Pan American v Argentina summarized the standard as follows: a choice under the fork-in-the-road provision is made if, first, the parties to the dispute brought before the national courts are the same as the parties in the investment dispute and, second, there is an identity of the causes of action.95 Several cases against Ecuador also raised questions relating to fork-in-the-road provisions.96 In these cases too, the application of these provisions was declined since the requirements of identity of cause of action and/or identity of parties had not been met. Numerous BIT tribunals,97 as well as tribunals under the ECT, have followed the same approach.98 In Desert Line v Yemen, the fork-in-the-road provision offered a menu of options for submitting a dispute without stating that the choice of one option precluded the investor from resorting to another. Yemen argued that Desert Line had submitted an identical

93 ibid paras 141–144. 94 ibid paras 145–146 (emphasis in the original). 95 Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 155–157. 96 IBM v Ecuador, Decision on Jurisdiction (22 December 2003) paras 58 ff, 82–84; Occidental v Ecuador (UNCITRAL), Award (1 July 2004) paras 37(a), 38–63; MCI v Ecuador, Award (31 July 2007) paras 36–38, 171–191; Chevron v Ecuador II (UNCITRAL), Third Interim Award on Jurisdiction and Admissibility (27 February 2012) paras 4.72–4.89. 97 See eg Pey Casado v Chile, Award (8 May 2008) paras 482–486; Bogdanova v Moldova (SCC), Final Award (16 April 2013) paras 169–176. 98 See eg Yukos Universal v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 598–600; Libananco v Turkey, Award (2 September 2011) paras 539–548; Khan Resources v Mongolia (UNCITRAL), Decision on Jurisdiction (25 July 2012) paras 386–400; Charanne v Spain (SCC), Award (21 January 2016) paras 398–410.

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dispute to arbitration in Yemen, had obtained an award, and therefore had lost its right to submit the dispute to international arbitration. The Tribunal stated: 137. The Claimant initiated the Yemeni Arbitration for the enforcement of its private rights under the Contracts. At no time was the violation of substantive standards of the BIT claimed in the Yemeni Arbitration. This matter was never alleged and therefore never dealt with by the Yemeni Arbitral Tribunal. The Yemeni Arbitration was commenced pursuant to the Yemeni Arbitration Agreement, and the claims there asserted were fundamentally distinct from the claims related to the violation of the BIT by the respondent. 138. In sum, the settlement of the Claimant’s contractual claims in the Yemeni Arbitration does not bar the Arbitral Tribunal from having jurisdiction in the present case, since the claims formulated by the Claimant here are capable of constituting violations of the BIT if they are upheld.99

The practice regarding fork-in-the-road clauses shows that they have had little, if any, practical impact on the jurisdiction of ICSID tribunals. The submission of a dispute to domestic courts does not necessarily reflect an exclusive choice precluding ICSID arbitration. Tribunals have held consistently that a fork-in-the-road clause will prevent access to international arbitration, only if the same dispute involving the same parties and cause of action had been submitted to the courts of the host State. The jurisdiction of an ICSID tribunal is not affected by the submission of a related, but not identical dispute to domestic courts.100 There are several cases, however, that have somewhat deviated from that practice. In Pantechniki v Albania, Albania argued that the Claimant had breached the fork-in-theroad provision by submitting the contractual dispute to Albanian courts. Moreover, Albania asserted that Art. 26 did not permit the Claimant to consent to ICSID jurisdiction, while pursuing the same matter before Albanian courts. The Claimant countered that Art. 26 does not prevent it from filing a treaty claim with ICSID, while a contract claim is pending before a domestic court because Art. 26 ‘does no more than exclude the possibility that “any other court – including the Albanian Courts” would consider claims under the Treaty.’ The Claimant also argued that the fork-in-the-road provision did not apply because, inter alia, ‘the dispute before the Albanian Courts and the dispute before ICSID are not the same dispute.’101 In considering whether the same dispute had been submitted to both national and international fora, the Tribunal invoked the test of ‘the fundamental basis of a claim,’102 which had earlier been articulated by the first ad hoc Committee in Vivendi v Argentina in the context of the potential application of a contractual forum selection clause.103 The Pantechniki tribunal found that ‘a mere assertion’ that the claims based on treaty provisions are inherently different from contract claims was not sufficient; it characterized that as ‘argument by labelling – not by analysis.’104 Instead, the Tribunal thought it necessary to determine whether the ‘claimed entitlements have the same normative

99 100 101 102 103 104

Desert Line v Yemen, Award (6 February 2008) paras 137–138. See Schreuer (n 64). Pantechniki v Albania, Award (30 July 2009) paras 52–55. ibid para 61. Vivendi v Argentina, Decision on Annulment (3 July 2002) paras 97–101. Pantechniki v Albania, Award (30 July 2009) para 61.

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source,’ which required an analysis of the specific circumstances of the case.105 In doing so, the Tribunal sought to establish whether ‘the claim truly does have an autonomous existence outside the contract.’106 The Tribunal concluded that the claims in Albanian courts would ‘grant the Claimant exactly what it is seeking before ICSID – and on the same “fundamental basis”’ and, thus, the Claimant’s grievance ‘arises out of the same purported entitlement that it invoked in the contractual debate . . .’107 On that basis, the Tribunal concluded, both under Art. 26 and the fork-in-the-road provision of the BIT, that having ‘made the election to seise the national jurisdiction the Claimant is no longer permitted to raise the same contention before ICSID.’108 The Tribunal in H&H v Egypt followed the logic of the Pantechniki tribunal and agreed with its analysis. The H&H tribunal explicitly rejected the triple identity test (same parties, same object, same cause of action) to determine whether the dispute before the domestic courts and the dispute submitted to international arbitration were the same. Instead, it embraced the standard of whether the ‘fundamental basis of the claim’ was the same in both proceedings.109 In Supervisión y Control v Costa Rica, the Tribunal had to interpret a somewhat different provision. Art. XI.3 of the Costa Rica–Spain BIT specified that, when the investor had submitted the dispute to a domestic court, it could proceed to international arbitration only if the domestic court had not issued a judgment, and the investor adopted ‘any measures that are required for the purpose of permanently desisting from the court case then underway.’110 As a first step, the Tribunal had to determine whether the Claimant had submitted the same dispute to the courts of Costa Rica. In concluding that the dispute was indeed the same, the Tribunal agreed with the analysis of the Pantechniki tribunal and adopted the test of ‘the fundamental basis of the claim.’111 The fork-in-the-road provision is not ubiquitous. A number of treaties include instead a so-called ‘no U-turn’ provision. A typical example is Chapter 11 of the NAFTA. Art. 1121 of the NAFTA provides, in relevant part, that investors may submit a claim to arbitration only if they waive their right to initiate or continue before any administrative tribunal or court under the law of any Party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Party that is alleged to be a breach [of the Treaty] . . .112

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This provision allows an investor to submit the dispute to the domestic courts of the host State and nevertheless subsequently initiate international arbitration provided it waives in writing its right to ‘continue’ the domestic litigation. Under such waiver, however, once the investor has initiated arbitration under the NAFTA, the investor cannot ‘make a U-turn’ and submit the dispute to domestic courts.113

105 ibid para 62. 106 ibid para 64. 107 ibid para 67. 108 ibid. 109 H&H v Egypt, Award (6 May 2014) paras 359–387. But see Gosling and others v Mauritius, Award (18 February 2020) paras 163–164, where the Tribunal endorsed the triple identity test. 110 Supervisión y Control v Costa Rica, Award (18 January 2017) para 6. 111 ibid paras 292–335. 112 NAFTA (n 29) Art. 1121(1)(b) and (2)(b). See also USMCA (n 29) Art. 14.D.5(1)(e). 113 For non-ICSID practice on this provision, see Ethyl v Canada (UNCITRAL), Award on Jurisdiction (24 June 1998) paras 89, 91; Methanex v United States (UNCITRAL), Partial Award (7 August 2002)

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One notable feature of the ‘no U-turn’ provision in the NAFTA is the phrase ‘with respect to the measure.’ This language introduces a standard that is different from the standard of ‘the same dispute’ and thus does not require the application of tests such as the triple identity test or the test for the ‘fundamental basis of the claim.’ The ‘no U-turn’ provision applies, even if the parties are different (for example, if the local subsidiary has initiated domestic proceedings against a government agency in domestic courts, while the foreign investor has submitted a claim against the host State in international arbitration), or when the cause of action is different (breach of domestic law, in the first case, and breach of the treaty, in the second) as far as both proceedings are ‘with respect to the measure.’ In Waste Management v Mexico I, the Claimant submitted a timely waiver. However, the Claimant stated its understanding that the waiver did not apply to any dispute settlement proceedings involving allegations that the Respondent had breached provisions of sources of law other than the NAFTA, including provisions of Mexican municipal law.114 Mexico objected to the Tribunal’s jurisdiction on the basis of the deficiency of the waiver and the fact that the Claimant’s subsidiary had initiated domestic proceedings under Mexican law in relation to one of the measures challenged in the arbitration. The Tribunal concluded that the Claimant had not presented a valid waiver within the terms of Art. 1121 of the NAFTA and declined jurisdiction.115 Subsequently, Waste Management initiated a new proceeding against Mexico under Chapter 11. Mexico objected to the jurisdiction of the Tribunal, arguing that the Claimant’s failure to submit a proper waiver in the first case could not be remedied ‘by any act of the Claimant’ and thus the effect of the dismissal of the first case was to ‘debar the Claimant from bringing any further claim’ with respect to the same measure.116 The Tribunal rejected the objection and proceeded to decide on the merits of the claim.117 Tribunals have ruled that an investor must not only submit a properly worded waiver, but must also take appropriate action to comply with it. Commerce Group v El Salvador was a case under the Dominican Republic–Central America Free Trade Agreement (DR–CAFTA), which includes a waiver provision along the lines of that in the NAFTA. The Tribunal concluded that the waiver provision requires the Claimants not only to file a formal ‘written waiver,’ but also to ensure that no other legal proceedings are ‘initiated’ or ‘continued.’118 After reviewing the relevant facts, the Tribunal held that the Claimants were obliged to take steps to discontinue the proceedings before the El Salvador courts and ‘by not doing so, Claimants did not act in accordance with the

114 115 116 117 118

para 93; international Thunderbird Gamimg v Mexico (UNCITRAL), Award (26 January 2006) paras 116–118; GAMI v Mexico (UNCITRAL), Final Award (15 November 2004) paras 1, 8, 38; Detroit International Bridge v Canada (UNCITRAL), Award on Jurisdiction (2 April 2015) para 321; KBR v Mexico (UNCITRAL), Final Award (30 April 2015) paras 109–142; Renco v Peru (UNCITRAL), Partial Award on Jurisdiction (15 July 2016) paras 58, 73, 86–89, 96, 138, 142. Waste Management v Mexico I (AF), Award (2 June 2000) paras 5–6. ibid para 31. Waste Management v Mexico II (AF), Award (30 April 2004) para 4. ibid para 11 and Annex 1 (Decision of the Tribunal on Mexico’s Preliminary Objection concerning the Previous Proceedings). Commerce Group v El Salvador, Award (14 March 2011) para 84. See also Kappes v Guatemala, Decision on Preliminary Objections (13 March 2020) para 141.

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requirements of the Waiver Provision’ at the time the waiver was given.119 On that basis, the Tribunal declined jurisdiction.120 Notably, a ‘no U-turn’ provision typically requires a claimant to waive its ‘right to initiate or continue’ any proceedings with respect to the measure in domestic courts or arbitration. It leaves open the question whether a claimant has the right to initiate international arbitration after a domestic proceeding has concluded and to assert breaches other than denial of justice. A similar situation arose in Salini Impregilo v Argentina. The relevant provision under the Argentina–Italy BIT reads: ‘From the time arbitration proceedings are commenced, each party to the dispute shall take any such measures as may be necessary to dismiss any pending court proceedings.’ Argentina complained that Salini Impregilo did not abandon the domestic proceedings, or procure their abandonment, as it should have done under that provision.121 Salini Impregilo responded that it had no power to force the domestic entity, which was the party to the domestic proceeding, to abandon them because Salini Impregilo owned only 26 percent of the shares in that entity. Thus, Salini Impregilo argued, the provision imposed a ‘best efforts’ obligation because a party would not necessarily be able to secure the dismissal of claims brought by other parties in relation to the same dispute.122 The Tribunal agreed with Salini Impregilo. It stated: The law does not require the impossible, and Salini Impregilo was not in a position to withdraw proceedings to which it was not a party. . . . To hold otherwise would place minority shareholders at a serious disadvantage in seeking to uphold their rights under the BIT.123

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As discussed earlier, the Casinos Austria tribunal required the withdrawal of the local proceedings initiated by the local subsidiary, but did so not pursuant to Art. 26, but because the withdrawal was explicitly required by the applicable BIT. Regarding Art. 26, the Casinos Austria tribunal explicitly recognized that the exclusivity requirement did not operate to deprive the ICSID tribunal of jurisdiction in case of parallel proceedings (see paras. 24–25 supra).

4. Jurisdiction for Treaty Claims and Contract Claims a) Jurisdiction over Treaty Claims Arising out of Contractual Relationships 101

The most difficult problems in the relationship between ICSID tribunals and domestic courts have arisen from competing jurisdictional clauses in treaties and contracts. Contracts between investors and host States frequently contain forum selection clauses that refer disputes arising from the application of these contracts to the host State’s domestic courts. When disputes arise in connection with the investments, investors will often invoke provisions in treaties, such as BITs, to gain access to international arbitration, including ICSID arbitration. The host States typically respond by insisting on the contractual forum selection, arguing that, by signing the contracts, the investors committed to using domestic courts, rather than ICSID arbitration. 119 120 121 122

Commerce Group v El Salvador, Award (14 March 2011) para 107. ibid para 116. Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018) para 141. ibid para 145. 123 ibid para 148.

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ICSID tribunals have insisted on their jurisdiction in disputes of this nature. In cases where ICSID jurisdiction was based on an offer contained in a treaty and subsequently accepted by the investor, the tribunals have uniformly upheld their jurisdiction despite the presence of contractual dispute settlement clauses pointing to domestic courts.124 As the Tribunal in Jan de Nul v Egypt observed, ‘the fact that the dispute involves contract rights and contract remedies does not in and of itself mean that it cannot also involve Treaty breaches and Treaty claims.’125 In the same vein, the Tribunal in Toto v Lebanon explained:

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The contractual jurisdiction clause and the Treaty jurisdiction clause are not mutually exclusive clauses. The contractual jurisdiction clause provided for in the Contract applies to actions and matters that are violations of the Contract; the Treaty jurisdiction clause applies to actions and matters that constitute violations of the substantive Treaty provisions even if the same actions and matters may give rise to breach of contract. It must also be noted that contractual claims founded on the investment contract do not have the same cause of action as the Treaty claims.126

In Lanco v Argentina,127 jurisdiction was based on an offer of ICSID arbitration, accepted by the investor, contained in the Argentina–United States BIT. A contractual choice of forum clause in a concession contract referred disputes to the Federal Contentious-Administrative Tribunals of Buenos Aires. The Tribunal rejected the Respondent’s objection to its jurisdiction based on the choice of forum clause in the contract. The Tribunal held that the clause did not constitute a ‘previously agreed dispute settlement procedure’ under the terms of the BIT. It found that the Contentious-Administrative Tribunals had jurisdiction under domestic law and that this jurisdiction was not subject to agreement or waiver128 and that the BIT procedure referring the dispute to ICSID prevailed over the purported contractual forum selection clause. In Salini v Morocco,129 ICSID jurisdiction was based on an offer of consent, accepted by the investor, in the Italy–Morocco BIT. A contract between the investors and ADM, a State entity, contained a clause referring disputes to the administrative courts of Rabat. Morocco relied on that clause and objected to the ICSID tribunal’s jurisdiction.130 The Claimants argued that the consent to ICSID’s jurisdiction contained in the BIT should prevail over the contractual acceptance of another forum. The Salini tribunal, too, found that consent to ICSID jurisdiction under the BIT should prevail over the contractual dispute settlement clause.131 It followed that the contractual forum selection clause did not oust ICSID jurisdiction. The Tribunal found that its jurisdiction extended to all claims based on a violation of the BIT, to contractual breaches that amounted at the same time to BIT violations, and to breaches of contracts

124 See also Ole Spiermann, ‘Individual Rights, State Interests and the Power to Waive ICSID Jurisdiction under Bilateral Investment Treaties’ (2004) 20 Arb Int’l 179. 125 Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 80. 126 Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 214. 127 Lanco v Argentina, Decision on Jurisdiction (8 December 1998). 128 ibid para 26. 129 Salini v Morocco, Decision on Jurisdiction (23 July 2001). 130 ibid paras 24–26. 131 ibid para 27.

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that bound the State directly.132 The Tribunal, however, specified that its jurisdiction did not cover breaches of a contract concluded with an entity other than the State and that did not also constitute a violation of the BIT.133 An important decision on the relationship between ICSID jurisdiction based on a BIT and a contractual forum selection clause is the first Award in Vivendi v Argentina,134 together with the subsequent decision partly annulling it.135 In Vivendi, ICSID’s jurisdiction was based on Art. 8(2) of the Argentina–France BIT. Argentina unsuccessfully challenged jurisdiction by pointing to a forum selection clause in a Concession Contract with the Argentinian province of Tucumán. The clause, Art. 16.4 of the Concession Contract, provided as follows: For purposes of interpretation and application of this Contract the parties submit themselves to the exclusive jurisdiction of the Contentious Administrative Tribunals of Tucumán.136

107

The Tribunal dealt first with jurisdiction, holding that Art. 16.4 of the Concession Contract did not represent a waiver of the Claimants’ rights to file claims under the Argentina–France BIT. The decisive passage in this respect reads as follows: 53. . . . In this case the claims filed by CGE [i.e. the Claimant] against Respondent are based on violation by the Argentine Republic of the BIT through acts or omissions of that government and acts of the Tucumán authorities that Claimants assert should be attributed to the central government. As formulated, these claims against the Argentine Republic are not subject to the jurisdiction of the contentious administrative tribunals of Tucumán, if only because, ex hypothesi, those claims are not based on the Concession Contract but allege a cause of action under the BIT. 54. Thus, Article 16.4 of the Concession Contract cannot be deemed to prevent the investor from proceeding under the ICSID Convention against the Argentine Republic on a claim charging the Argentine Republic with a violation of the Argentine–French BIT.137

108

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In dealing with the merits, however, the Tribunal dismissed the claims. It found it impossible to separate potential contract breaches from BIT violations because the alleged violations of the treaty were closely linked with the performance of the Concession Contract. The Tribunal stated that it could not decide on the BIT claims, unless and until the Claimant had asserted its contractual rights in the domestic courts.138 The ad hoc Committee, which had to decide on the request for annulment of the Award, found, on the one hand, that the Vivendi Tribunal had correctly held that it had jurisdiction and, on the other hand, that the Tribunal had manifestly exceeded its powers by not examining, under the BIT, the merits of the claims concerning the acts of the

132 ibid paras 61–64. 133 ibid. 134 Vivendi v Argentina, Award (21 November 2000). 135 Vivendi v Argentina, Decision on Annulment (3 July 2002). For a more detailed discussion, see Christoph Schreuer, ‘Investment Treaty Arbitration and Jurisdiction over Contract Claims – the Vivendi I Case Considered’ in Todd Weiler (ed), International Investment Law and Arbitration (Cameron May 2005) 281. 136 Vivendi v Argentina, Award (21 November 2000) para 27. 137 ibid paras 53, 54 (footnotes omitted, emphasis in the original). 138 ibid paras 78, 81.

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Tucumán authorities. Therefore, it annulled the Award with regard to those claims. The ad hoc Committee summarized the issue as follows: The Tribunal’s stated rationale for rejecting Claimants’ position is ‘the impossibility, on the facts of the instant case, of separating potential breaches of contract claims from BIT violations without interpreting and applying the Concession Contract, a task that the contract assigns expressly to the local courts’. The Tribunal appears to have considered that, because Claimants’ contract and treaty claims could not be separated, a distinct claim ‘based on the BIT’ was impossible in the circumstances of the case, at least prior to submission of the dispute to the provincial courts.139

The ad hoc Committee found it ‘evident that a particular investment dispute may at the same time involve issues of the interpretation and application of the BIT’s standards and questions of contract.’140 This did not impair the jurisdiction of the ICSID tribunal. On the relation between breach of contract and breach of treaty, the ad hoc Committee pointed out that these related to independent standards: ‘A state may breach a treaty without breaching a contract, and vice versa.’ Therefore, ‘whether there has been a breach of the BIT and whether there has been a breach of contract are different questions.’141 This led the ad hoc Committee to the following conclusions:

110

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101. . . . where ‘the fundamental basis of the claim’ is a treaty laying down an independent standard by which the conduct of the parties is to be judged, the existence of an exclusive jurisdiction clause in a contract between the claimant and the respondent state or one of its subdivisions cannot operate as a bar to the application of the treaty standard. . . . 103. A state cannot rely on an exclusive jurisdiction clause in a contract to avoid the characterisation of its conduct as internationally unlawful under a treaty. . . . 105. . . . it is one thing to exercise contractual jurisdiction (arguably exclusively vested in the administrative tribunals of Tucumán by virtue of the Concession Contract) and another to take into account the terms of a contract in determining whether there has been a breach of a distinct standard of international law, such as that reflected in Article 3 of the BIT.142

Consequently, the ad hoc Committee held that the Vivendi tribunal had manifestly exceeded its powers in that it had failed to decide on the claims under the BIT. It concluded that the tribunal ‘failed to decide whether or not the conduct of Argentina,’ arising out of the contractual relationship, ‘amounted to a breach of the BIT.’143 According to the ad hoc Committee, the Tribunal erred when it concluded that, because of the contractual forum selection clause, it could not decide certain ‘allegations and issues,’ even though ‘these were adduced by Claimants specifically in support of their BIT claim.’144 The ad hoc Committee concluded: It was open to Claimants to claim, and they did claim, that these acts taken together, or some of them, amounted to a breach of Articles 3 and/or 5 of the BIT. In the

139 140 142 143

Vivendi v Argentina, Decision on Annulment (3 July 2002) para 41. ibid para 60. See also ibid para 76. 141 ibid paras 95, 96. ibid paras 101–105 (internal footnote omitted). ibid para 111. 144 ibid.

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113

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117

The Decision on Annulment in Vivendi established the principle that a forum selection clause in a contract pointing to domestic courts will not oust ICSID’s jurisdiction based on a treaty. The decisive reason is that contract claims and treaty claims have a different legal basis. A failure by an ICSID tribunal to exercise its jurisdiction under these circumstances amounts to an excess of powers and is a ground for annulment of the award. Subsequent tribunals have relied heavily on the first Annulment Decision in Vivendi v Argentina.146 In CMS v Argentina,147 ICSID jurisdiction was based on an offer of consent, accepted by the investor, in the Argentina–United States BIT. Argentina objected to jurisdiction, arguing that the investor’s license contained forum selection clauses in favor of the Federal Courts of Buenos Aires. The Claimant responded that its cause of action was founded on the BIT.148 The Tribunal, after reviewing some of the cases discussed above, concluded that the forum selection clauses in the relevant contracts were ‘not a bar to the assertion of jurisdiction by an ICSID tribunal under the Treaty, as the functions of these various instruments are different.’149 In SGS v Pakistan,150 jurisdiction was based on the Pakistan–Switzerland BIT. The Claimant had entered into a Pre-Shipment Inspection Agreement (PSI Agreement) with the Government of Pakistan. The PSI Agreement contained a dispute settlement clause, which provided for domestic arbitration in Pakistan. That procedure had been initiated by Pakistan some time prior to the ICSID proceedings under the BIT. The ICSID proceedings concerned non-payment by Pakistan of invoices submitted by SGS and Pakistan’s attempt to terminate the PSI Agreement. Pakistan contested the jurisdiction of the ICSID Tribunal, arguing that the essential basis of the claims put forward by SGS was a breach of contract, and that the parties had agreed to submit their contractual dispute to domestic arbitration.151 The ICSID tribunal, relying on the first Decision on Annulment in Vivendi v Argentina, pointed out that the same set of facts could give rise to both contract claims and treaty claims.152 It found that the contractual forum selection clause in the PSI Agreement did not affect its jurisdiction based on the BIT. The Tribunal stated: ‘We do not consider that that jurisdiction would to any degree be shared by the PSI Agreement arbitrator.’153 At the same time, the Tribunal found that it did not have jurisdiction over pure contract claims, which did not also amount to breaches of the relevant BIT.154 145 146 147 148 150

ibid para 112. Eureko v Poland (ad hoc), Partial Award (19 August 2005) paras 112–113. CMS v Argentina, Decision on Jurisdiction (17 July 2003). ibid paras 70–71. 149 ibid para 76. SGS v Pakistan, Decision on Jurisdiction (6 August 2003). For more detailed discussions, see Emmanuel Gaillard, ‘Investment Treaty Arbitration and Jurisdiction over Contract Claims – the SGS Cases Considered’ in Weiler (n 135) 325; Stanimir A Alexandrov, ‘Breaches of Contract and Breaches of Treaty. The Jurisdiction of Treaty-Based Arbitration Tribunals to Decide Breach of Contract Claims in SGS v Pakistan and SGS v Philippines’ (2004) 5 JWIT 555. See also Stephen Donnelly, ‘Conflicting Forum-Selection Agreements in Treaty and Contract’ (2020) 69 ICLQ 759. 151 SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 43, 44, 48–74. 152 ibid paras 147–148. 153 ibid para 155. 154 ibid paras 156–173.

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In Azurix v Argentina,155 jurisdiction was based on an offer of consent, accepted by the investor, in the Argentina–United States BIT. Argentina’s objection to ICSID’s jurisdiction was based on forum selection clauses contained in a series of contractual arrangements between Argentina and the Claimant. These provided for the exclusive jurisdiction of the courts for contentious-administrative matters of the city of La Plata. The Respondent pointed out that the forum selection clause not only provided for the exclusive jurisdiction of the domestic courts, but also explicitly waived any other forum or jurisdiction.156 The Tribunal relied on the decisions in Lanco and Vivendi and adopted the distinction between contract claims and treaty claims in the following terms:

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The tribunals in the cases cited concluded that such forum selection clauses did not exclude their jurisdiction because the subject-matter of any proceedings before the domestic courts under the contractual arrangements in question and the dispute before the ICSID tribunal was different and therefore the forum selection clauses did not apply. This reasoning applies equally to the waiver of jurisdiction clause in this case. The claims or causes of action before this Tribunal are different in nature from any claims which ABA could bring before the courts of the city of La Plata under the Contract Documents.157

In Enron v Argentina, jurisdiction was also based on the offer of consent, accepted by the investor, in the Argentina–United States BIT. Argentina objected to ICSID’s jurisdiction on the basis of a forum selection clause contained in a Transfer Agreement, which provided for the submission of disputes to the Argentine courts. The Enron tribunal found the issue so clearly settled by previous tribunals that there was no need to dwell on it at length.158 These authorities indicate that a forum selection clause contained in a contract between the investor and the host State does not affect the competence of an ICSID tribunal based on a treaty. Domestic and international proceedings result from different causes of action, even though they may arise from the same set of facts. While domestic proceedings based on dispute settlement clauses in contracts are designed to deal with contract claims, ICSID proceedings based on treaties concern claims arising from alleged violations of those treaties.159 The Decision on Jurisdiction in SGS v Philippines160 represents an apparent departure from earlier practice as described above. The Tribunal first confirmed, consistent with those cases, that it had jurisdiction over the investor’s claims – but then refused to proceed to the merits, and instead stayed the proceedings, relying on a forum selection clause in a contract.161

155 156 158 159

Azurix v Argentina, Decision on Jurisdiction (8 December 2003). ibid para 26. 157 ibid para 79. Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 91. The situation may be different if the basis for the ICSID tribunal’s jurisdiction is a broad arbitration clause defining a dispute as ‘any dispute’ relating to an investment or where ‘pure’ contractual claims may rise to the level of treaty claims by operation of umbrella clauses (see paras 147–158 infra). 160 SGS v Philippines, Decision on Jurisdiction (29 January 2004). 161 Unlike the decision in Vivendi, in SGS v Philippines, the Tribunal rendered only a Decision on Jurisdiction, which is not subject to annulment.

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In SGS v Philippines, the dispute arose from contracts for pre-shipment inspections carried out by the investor on behalf of the government. The claim was for monies unpaid under the contracts. Most of the amount claimed was conceded by the Respondent to be payable, but a smaller portion of the amount was disputed. The ICSID proceedings were instituted on the basis of Art. VIII of the Philippines– Switzerland BIT. That provision foresaw ICSID jurisdiction generally for ‘disputes with respect to investments.’ The Tribunal found that this provision covered not only disputes about an alleged violation of the BIT, but also disputes arising from an investment contract.162 The Tribunal also found that it had jurisdiction over claims based on the contract on the basis of a so-called umbrella clause in Art. X(2) of the BIT.163 The contract underlying the dispute contained a clause selecting the courts of Manila as the forum for the resolution of all contractual disputes. The SGS v Philippines tribunal described the contractual forum selection clause as exclusive164 and found that its effect was not overridden by the BIT or by the ICSID Convention.165 The Tribunal’s reasons for this conclusion were twofold. First, the Tribunal reasoned that the BIT provision on which ICSID jurisdiction was founded was a general one, and as such could not be presumed to override a specific provision in a particular contract (generalia specialibus non derogant).166 The Tribunal did not address the point that the BIT’s clause on investor–State arbitration is only a standing offer that requires the investor’s acceptance to become an arbitration agreement.167 The ICSID arbitration agreement, as perfected through the institution of proceedings (see Art. 25, paras. 814–824, 850–862), applies to the particular dispute only. In that sense, it is more specific than the, more general, contractual clause, which refers to any dispute arising from the contract. Second, the Tribunal rejected Art. 26 of the ICSID Convention as a basis for giving effect to the ICSID arbitration agreement. For the Tribunal, Art. 26 was only a rule of interpretation and not a mandatory rule168 and the phrase ‘unless otherwise stated’ indicated that the rule of exclusivity of ICSID proceedings would not apply, if there was a contrary agreement, such as a non-ICSID forum selection.169 In the view of the Tribunal, Art. 26 did not override previously agreed-to dispute settlement clauses. In the end, the Tribunal concluded that it had jurisdiction because a party could not waive treaty-based jurisdiction by way of a contract.170 Nevertheless, the Tribunal found that, as a matter of admissibility (see Art. 25, paras. 25–26), a party should not be allowed to rely on a contract where the contract itself referred the claim exclusively to another forum. Therefore, the Tribunal stayed the proceedings pending a decision on

162 163 165 167 168 169 170

SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 130–135. ibid paras 113–128. 164 ibid para 137. ibid paras 139–148. 166 ibid para 141. The Tribunal described this process at ibid para 31. ibid para 146. ibid para 147 (quoting the First Edition of this Commentary). SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 154 (footnotes omitted). For a detailed examination of the issue of waiver of jurisdiction, see Anne K Hoffmann, ‘The Investor’s Right to Waive Access to Protection under a Bilateral Investment Treaty’ (2007) 22 ICSID Rev 69.

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the amount due, either by agreement, or by a decision of the Philippine court as agreed in the contract.171 In a further decision made almost three years after the Tribunal’s original decision, the SGS v Philippines tribunal found that the open issues of quantum had been sufficiently clarified to warrant a resumption of the ICSID proceedings.172 Investment tribunals since have generally followed the distinction between contract claims, which are subject to contractual forum selection clauses, and treaty claims, which are unaffected by such clauses. Under this consistent practice, the treaty-based jurisdiction of international arbitral tribunals to decide on violations of treaties is not affected by domestic forum selection clauses contained in contracts and the contractual selection of domestic courts appears to be restricted to claims for violations of the respective contracts.173 For instance, in AES v Argentina,174 the jurisdiction of the ICSID tribunal was based on an offer of consent, accepted by the investor, in the Argentina–United States BIT. Argentina objected to ICSID’s jurisdiction on the basis of forum selection clauses contained in concession contracts. The Tribunal rejected Argentina’s argument, stating that: 93. . . . the Entities concerned have consented to a forum selection clause electing Administrative Argentine law and exclusive jurisdiction of Argentine administrative tribunals in the concession contracts and related documents. But this exclusivity only plays within the Argentinean legal order, for matters in relation with the execution of these concession contracts. They do not preclude AES from exercising its rights as resulting, within the international legal order from two international treaties, namely the US–Argentina BIT and the ICSID Convention.

171 SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 155, 170–173, 177. 172 ibid, Order on Further Proceedings (17 December 2007). But see Strabag v Libya (AF), Award (29 June 2020) para 208, where the Tribunal rejected an argument based on the holding in SGS v Philippines (to stay treaty proceedings in favour of the contractual forum) because it found that domestic courts were not a practicable and safe option. 173 IBM v Ecuador, Decision on Jurisdiction (22 December 2003) paras 50–70; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) paras 58–62; Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) paras 23–24, 47–51; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 174–183; Salini v Jordan, Decision on Jurisdiction (29 November 2004) paras 92–96; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 219, 258, 286–289; AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 90–99; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 105–119; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 116–128; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 94–123; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 41–45; National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) para 167–170; Inceysa v El Salvador, Award (2 August 2006) paras 43, 212–217; Fraport v Philippines I, Award (16 August 2007) paras 388–391; Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) paras 7.3.1.–7.3.11; Occidental v Ecuador, Decision on Jurisdiction (9 September 2008) paras 62–74; SGS v Paraguay, Decision on Jurisdiction (12 February 2010) paras 125–142; ibid, Award (10 February 2012) paras 101–109; Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 316–326, 498–499; Hochtief v Argentina, Decision on Liability (29 December 2014) paras 190–194; Crystallex v Venezuela (AF), Award (4 April 2016) paras 686–708; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 148–159; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 214–222; Staur Eiendom v Latvia, Award (28 February 2020) para 304; Lidercón v Peru, Award (6 March 2020) paras 160–164. See also para 146 and n 206 infra. 174 AES v Argentina, Decision on Jurisdiction (26 April 2005).

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schreuer’s commentary on the icsid convention 94. In other terms, the present Tribunal has jurisdiction over any alleged breach by Argentina of its obligations under the US–Argentina BIT.175

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In two cases involving the Republic of Pakistan, the Respondent raised the question of the relationship between treaty claims and contract claims. In Impregilo v Pakistan,176 the Claimant relied on the Italy–Pakistan BIT to establish ICSID’s jurisdiction. Pakistan objected on the basis of dispute settlement provisions in contracts between the Claimant and WAPDA, the Pakistan Water and Power Development Authority. According to Impregilo, Pakistan was in breach of its obligations under the Contracts and had violated its obligations under the Italy–Pakistan BIT. Pakistan argued that the two sets of claims advanced by Impregilo were so inextricably linked that the treaty claims could not be separated from the contract claims, and thus both fell outside the scope of the Tribunal’s jurisdiction. The Tribunal disagreed with Pakistan’s analysis of the interrelationship between treaty and contract claims and noted, in particular: The fact that Article 9 of the BIT does not endow the Tribunal with jurisdiction to consider Impregilo’s Contract Claims does not imply that the Tribunal has no jurisdiction to consider Treaty Claims against Pakistan which at the same time could constitute breaches of the Contracts.177

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The Impregilo v Pakistan tribunal further remarked that, contrary to Pakistan’s approach in this case, the fact that a breach may give rise to a contract claim does not mean that it cannot also – and separately – give rise to a treaty claim.178 Similar objections to the Tribunal’s jurisdiction were raised by Pakistan in a subsequent case, Bayindir v Pakistan.179 The dispute arose as a result of the termination of a contract between the Turkish company Bayindir and Pakistan’s National Highway Authority (NHA) for the construction of a motorway and the subsequent expulsion of Bayindir from Pakistan. The ICSID tribunal’s jurisdiction was based on the Pakistan– Turkey BIT. The contract foresaw a complex dispute settlement procedure culminating in domestic arbitration in Pakistan.180 Pakistan objected to the ICSID tribunal’s jurisdiction, arguing, inter alia, that Bayindir’s treaty claims were in reality contract claims because their elements were contractual and because the amount of the treaty claims corresponded to the amount of the contract claims.181 Accordingly, Pakistan contended that Bayindir’s claims fell outside the purview of the ICSID tribunal’s jurisdiction.182 Bayindir, for its part, relied on the Impregilo decision and contended that Pakistan had terminated the relevant contract for reasons of convenience, which had nothing to do with Bayindir’s performance, thus violating its commitments under the Pakistan–Turkey BIT.183 Bayindir

175 176 177 178

ibid paras 93, 94. Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005). ibid para 219. ibid para 258. See also Strabag v Poland (ad hoc), Partial Award on Jurisdiction (4 March 2020) para 5.34. 179 Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005). 180 ibid paras 20, 36, 37. 181 ibid paras 152–153. 182 ibid para 139. 183 ibid paras 143–145.

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withdrew its contract claims at the hearing on jurisdiction and therefore pursued only treaty claims in the ICSID arbitration. The Tribunal considered that the principle that treaty violations are legally distinct from contractual breaches, even when they arise from the same factual context, was well established.184 The Tribunal observed that ‘when the investor has a right under both the contract and the treaty, it has a self-standing right to pursue the remedy accorded by the treaty.’185 The investor’s claims in SGS v Paraguay, brought under the Paraguay–Switzerland BIT, arose out of a contract between the Claimant and the Ministry of Finance of Paraguay concerning pre-shipment customs inspections. That contract contained a forum selection clause in favor of the courts of Paraguay. Although the Claimant asserted claims for breach of the BIT only, the Respondent argued that the contractual clause had to be given effect because the Claimant’s claims were, at their core, claims for breach of the contract. The Tribunal rejected the Respondent’s argument and stated:

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[W]e accept that Claimant has stated claims under the Treaty, and so the question before us is simply whether a contractual forum selection clause can divest this Tribunal of its jurisdiction to hear claims for breach of the Treaty. The answer to that question is undoubtedly negative.186

At the merits stage, Paraguay revived its argument based on the forum selection clause. The Tribunal refused to revisit its decision:

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In the Decision on Jurisdiction, the Tribunal found that the forum selection clause did not deprive the Tribunal of jurisdiction over the dispute nor did it render Claimant’s claims inadmissible. Furthermore, the Tribunal found that, once having taken jurisdiction over the claims, it was compelled to decide them. The Tribunal would not be deciding the claims if it now concludes that the claims must be resolved by local courts. Respondent’s attempt now to repackage its argument as a defense on the merits does not change that conclusion.187

In Abaclat and others v Argentina, jurisdiction was based on the Argentina–Italy BIT. The claims concerned Argentine government bonds held by Italian nationals, the terms of which included domestic forum selection clauses. Argentina argued that those clauses had to be interpreted as excluding consent to ICSID arbitration. The Tribunal disagreed: 498. The Tribunal cannot follow Respondent in this respect as it conflates contract claims and treaty claims. As explained above . . . even though Claimants’ claims relate to the bonds, they are based on alleged breaches by Argentina of the BIT and not on contractual rights provided to Claimants under the bond documents. The forum selection clauses apply only to claims based on contractual rights, and may not affect treaty claims, which the bond documents did neither anticipate nor deal with. 499. Consequently, the presence of forum selection clauses in the contractual bond documents is irrelevant for the assessment of the existence and/or validity of Argentina’s consent to ICSID arbitration.188

184 186 187 188

ibid para 148. 185 ibid para 167. SGS v Paraguay, Decision on Jurisdiction (12 February 2010) para 138. SGS v Paraguay, Award (10 February 2012) para 109. Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 498–499.

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b) Contractual Forum Selection Clause as a Waiver of ICSID Jurisdiction 140

A somewhat more nuanced argument – that the contractual forum selection clause constituted a waiver of ICSID jurisdiction – has been raised in several cases. In MNSS and PCA v Montenegro, the Claimants relied on the BIT between the Netherlands and Yugoslavia (as the predecessor of Montenegro), which provided for ICSID Additional Facility arbitration. The Respondent argued that the forum selection clauses in the underlying contracts, which provided for UNCITRAL ad hoc arbitration, amounted to a waiver of ICSID Additional Facility arbitration with respect to both contract and treaty claims.189 The Tribunal disagreed and stated: To conclude, the parties to the Privatization Agreement waived the ability to bring before other fora the same claims that they could bring before a tribunal constituted pursuant to Clause 11.2.1 of the Privatization Agreement. The scope of the waiver therefore encompasses all contract claims pursuant to the Privatization and Assignment Agreements. The waiver was not intended to, and does not, capture claims for breach of the BIT. These claims are separate from, and different to, claims concerning a breach of the Privatization and Assignment Agreements.190

141

The question of a possible waiver of ICSID jurisdiction was discussed at some length by the Tribunal in Aguas del Tunari v Bolivia. In that case, the Tribunal reasoned that whether a contractual forum selection clause constituted a waiver of the treaty-based right to arbitration depended on the intent of the parties.191 The Tribunal observed that if the parties to an ICSID arbitration could jointly agree to a different mechanism for the resolution of their disputes other than that of ICSID, it would appear that an investor could also waive its rights to invoke the jurisdiction of ICSID.192

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However, the Tribunal required an explicit waiver or other ‘specific indications’ of the common intention of the parties.193 It held that the mere fact that the forum selection clause conferred upon the domestic forum exclusive jurisdiction to resolve contractual claims was not sufficient to affect a treaty-based tribunal’s jurisdiction.194 The Aguas del Tunari approach was endorsed by the Tribunal in Occidental Petroleum v Ecuador. That Tribunal concluded: Based on elementary principles of contract interpretation, any exception to the availability of ICSID arbitration for the resolution of disputes arising under [the relevant contract] requires clear language to this effect.195

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In reaching this conclusion, the Occidental tribunal relied on the Aguas del Tunari decision, from which it quoted extensively. The Occidental tribunal noted further that the parties could have excluded certain disputes from ICSID jurisdiction, but did not do so, and, therefore, the Tribunal could not imply such an exclusion.196

189 190 191 192 194 195

MNSS and PCA v Montenegro (AF), Award (4 May 2016) paras 78 ff. ibid para 159. Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 115. ibid para 118. 193 ibid para 119. ibid para 122. Occidental v Ecuador, Decision on Jurisdiction (9 September 2008); Crystallex v Venezuela (AF), Award (4 April 2016) para 71. 196 ibid para 73.

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The Tribunals in Azurix v Argentina,197 Suez and Vivendi v Argentina,198 SGS v Paraguay,199 Hochtief v Argentina,200 and Crystallex v Venezuela201 also endorsed the conclusion that a contractual forum selection clause is not a waiver of ICSID jurisdiction, both with respect to treaty claims and contract claims.202 Some tribunals, however, have held that a forum selection clause in a contract constitutes a waiver of treaty jurisdiction for contract claims and that such claims could not be submitted to investor– State arbitration, including by virtue of the operation of the umbrella clause – either because the tribunal lacks jurisdiction203 or because the claims are inadmissible.204 Numerous other tribunals have also relied upon the distinction between contract claims and treaty claims and have upheld jurisdiction over treaty claims.205 The respondents’ objections that a case involves only contract claims and the claimants’ insistence that treaty rights are involved, have become routine features in these cases. A clear-cut separation of treaty claims and contract claims is often difficult and hinges on the facts of each case. As pointed out by several tribunals, a particular course of action by the host State may well constitute both a breach of contract and a violation of international law. On the other hand, a mere breach of contract may, but need not, amount to a treaty violation. The two categories are not mutually exclusive, but, rather, two different standards have to be applied to determine whether one or the other, or both, have been violated.206 197 198 199 200 201 202 203 204 205

Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 75–85. Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 41–45. SGS v Paraguay, Decision on Jurisdiction (12 February 2010) paras 177–179. Hochtief v Argentina, Decision on Liability (29 December 2014) paras 190–194. Crystallex v Venezuela (AF), Award (4 April 2016) paras 481–483. SGS v Paraguay, Decision on Jurisdiction (12 February 2010) paras 177–179. MNSS and PCA v Montenegro (AF), Award (4 May 2016) paras 148–165, 308–310. BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) paras 143–158. See eg Nycomb v Latvia (SCC), Award (16 December 2003) para 2.4; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 63–65; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 79–82; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 84; Telenor v Hungary, Award (13 September 2006) paras 32, 47(1), 50; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 139–142; Parkerings v Lithuania, Award (11 September 2007) paras 257, 260–266, 289, 317, 345; TSA Spectrum v Argentina, Award (19 December 2008) paras 56–66; Gemplus v Mexico (AF), Award (16 June 2010) paras 6-22, 6-25, 826; Daimler v Argentina, Award (22 August 2012) paras 54–64; Tenaris v Venezuela I, Award (29 January 2016) paras 300–312; Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) paras 249–257; İçkale v Turkmenistan, Award (8 March 2016) paras 306–310; Crystallex v Venezuela (AF), Award (4 April 2016) paras 686–708; Saint-Gobain v Venezuela, Decision on Liability and the Principles of Quantum (30 December 2016) paras 369–373; Beijing Urban Construction v Yemen, Decision on Jurisdiction (31 May 2017) paras 139–146; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 214–222. 206 See Stephen M Schwebel, ‘On Whether the Breach by a State of a Contract with an Alien Is a Breach of International Law’ in International Law at the Time of its Codification: Essays in Honour of Roberto Ago vol III (Dott A Giuffrè Editore 1987) 401. See also Prosper Weil, ‘Problèmes relatifs aux contracts passés entre un Etat et un particulier’ (1969–III) 128 RdC 95, 130; FA Mann, ‘British Treaties for the Promotion and Protection of Investments’ (1981) 52 BYBIL 242, 246; Derek W Bowett, ‘State Contracts with Aliens: Contemporary Developments in Compensation for Termination or Breach of Contract of International Law’ (1988) 59 BYBIL 49; François Rigaux, ‘Les situations juridiques individuelles dans un système de relativité générale’ (1989–I) 213 RdC 1, 230; Marian Nash Leich, ‘Contemporary Practice of the United States Relating to International Law’ (1990) 84 AJIL 885, 898; Kenneth J Vandevelde, United States Investment Treaties: Policy and Practice (Kluwer 1992) 81 ff; Robert Y Jennings and Arthur D Watts (eds), Oppenheim’s International Law vol 1 (9th edn, OUP 2008) § 408; Ibrahim FI Shihata, ‘Applicable Law in International Arbitration: Specific Aspects in Case

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c) Jurisdiction over Treaty and Contract Claims under a Broad Jurisdictional Clause 147

148

149

150

The situation is made even more complex by the fact that some treaties offer jurisdiction for any investment dispute, a terminology which may be interpreted to include contract claims, while other treaties restrict jurisdiction to alleged violations of the treaty (see Art. 25, paras. 964–980). Therefore, it is incorrect to assume that the jurisdiction of treaty-based tribunals is necessarily restricted to claims for violations of the treaty’s substantive provisions. The jurisdiction of a tribunal is not determined by the fact that it was established through a treaty mechanism, but instead by the wording of the clause offering consent to arbitration. In addition, umbrella clauses may operate to convert contract breaches into treaty breaches, although this point is not undisputed.207 In SGS v Pakistan, the Tribunal first appeared to accept the ordinary meaning of the broad ‘disputes with respect to investments’ jurisdictional clause found in Art. 9 of the Pakistan–Switzerland BIT. The Tribunal recognized that disputes ‘arising from claims grounded on alleged violation of the BIT’ and disputes ‘arising from claims based wholly on’ alleged violations of contract can both be described as ‘disputes with respect to investments,’ the phrase used in Art. 9 of the Pakistan–Switzerland BIT.208 The Tribunal, however, concluded that, despite the ordinary meaning, ‘we do not see anything in Article 9 or in any other provision of the BIT that can be read as vesting this Tribunal with jurisdiction over claims resting ex hypothesi exclusively on contract,’209 and, therefore, ‘without more, we believe that no implication necessarily arises that both BIT and purely contract claims are intended to be covered by the Contracting Parties in Article 9.’210 Based on this reasoning, the SGS v Pakistan tribunal declined to assert jurisdiction over SGS’s claims for breach of contract. By contrast, the tribunal in SGS v Philippines gave full effect to the ordinary meaning of the phrase ‘disputes with respect to investments,’ when it held that it had jurisdiction over SGS’s contract claims. Interpreting the jurisdictional clause in the Philippines– Switzerland BIT, the Tribunal concluded: Prima facie, Article VIII is an entirely general provision, allowing for submission of all investment disputes by the investor against the host State. The term ‘disputes with respect to investments’ . . . is not limited by reference to the legal classification of the claim that is made. A dispute about an alleged expropriation contrary to Article VI of

of the Involvement of State-Parties’ in Ibrahim FI Shihata and James D Wolfensohn (eds), The World Bank in a Changing World: Selected Essays and Lectures vol 2 (Martinus Nijhoff 1995) 595, 601; Joachim Karl, ‘The Promotion and Protection of German Foreign Investment Abroad’ (1996) 11 ICSID Rev 1, 23. For the more recent debate, see Schreuer (n 64) 249–255; Alexandrov (n 150); Sophie Lemaire, ‘Treaty Claims et Contract Claims: la compétence du Cirdi à l’epreuve de la dualité de l’Etat’ (2006) 2 Revue de l’arbitrage 353; John P Gaffney and James L Loftis, ‘The “Effective Ordinary Meaning” of BITs and the Jurisdiction of Treaty-Based Tribunals to Hear Contract Claims’ (2007) 8 JWIT 5; Stephan W Schill, ‘Enabling Private Ordering: Function, Scope and Effect of Umbrella Clauses in International Investment Treaties’ (2009) 18 Minn JIL 1. 207 For a brief survey, see Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn, OUP 2012) 166–178. 208 SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 161. 209 ibid. 210 ibid.

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the BIT would be a ‘dispute with respect to investments’; so too would a dispute arising from an investment contract such as the [contract at issue in the case].211

Several tribunals have applied the logic of the SGS v Philippines tribunal more narrowly. They have concluded that, in cases of purely contractual claims, a provision consenting to arbitration of ‘any disputes’ covers only disputes with the State itself, i.e., when the State is a direct party to the contract, and that the provision does not extend to situations where the contractual relationship is between the investor and a State entity.212 This interpretation of an ‘any disputes’ jurisdictional provision limits significantly the scope of its application: as a practical matter, the State itself, rather than its entities, would rarely enter directly into a contract with a foreign investor. Other tribunals have interpreted ‘any disputes’ provisions more literally as encompassing, according to their terms, ‘any disputes’ relating to an investment. In SGS v Paraguay, the clause on the settlement of investor–State disputes in the Paraguay– Switzerland BIT referred to ‘disputes with respect to investments.’ The Tribunal’s interpretation was as follows:

151

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Article 9 provides for the resolution of ‘disputes with respect to investments between a Contracting Party and an investor of the other Contracting Party,’ and, as discussed in Section IV.A above, Article 9(2) contains Paraguay’s consent to international arbitration of such a dispute. There is no qualification or limitation in this language on the types of ‘disputes with respect to investments’ that a Swiss investor may bring against the Republic of Paraguay. The ordinary meaning of Article 9 would appear to give this Tribunal jurisdiction to hear claims for violation of Claimant’s rights under the Contract – surely a dispute ‘with respect to’ Claimant’s investment – should Claimant have chosen to bring them before us.213

The Tribunal found added authority in that clause for declining to abdicate its jurisdiction on the basis of a domestic forum selection clause:

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As previously noted, the BIT’s dispute resolution provisions (Article 9) are not on their terms limited to claims for breach of the BIT itself. Article 9(1) arguably extends the Treaty dispute settlement process to all manner of ‘disputes related to investments’ – a category broad enough to encompass contract disputes. But deference to a contractual forum selection clause would significantly cut back Article 9’s scope. It will be the rare State contract that has no dispute resolution clause of any kind.214

In Philip Morris v Uruguay, the Switzerland–Uruguay BIT provided for investor– State arbitration for ‘[d]isputes with respect to investments within the meaning of this Agreement.’ According to the Tribunal, ‘the ordinary meaning of the phrase “disputes with respect to investments” is broad and includes any kind of disputes where the subject matter is an “investment” as . . . defined by the BIT.’215 In its view,

211 SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 131 (internal citation omitted). 212 See eg Salini v Morocco, Decision on Jurisdiction (23 July 2001) paras 59–64; RFCC v Morocco, Decision on Jurisdiction (16 July 2001) paras 67–69. 213 SGS v Paraguay, Decision on Jurisdiction (12 February 2010) para 129. 214 ibid para 183. 215 Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 107.

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154

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schreuer’s commentary on the icsid convention [t]he words ‘within the meaning of this Agreement,’ appearing after the phrase in question in Article 10(1), clearly refer in the context to ‘investments’ as defined by Article 1(2) of the BIT, not to ‘disputes’.216

d) Jurisdiction under Umbrella Clauses 155

156

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The relationship between contractual forum selection clauses and BIT claims can also arise in cases where investors invoke an umbrella clause in a BIT.217 A claim for violation of an umbrella clause is, of course, a BIT claim; however, it is often based on a breach of an underlying contract, which would typically include a forum selection clause. Some tribunals have ruled that investors are precluded by the forum selection clause in a contract from invoking a breach of that contract as a basis for an umbrella clause claim. For example, in BIVAC v Paraguay, jurisdiction rested on the Netherlands–Paraguay BIT. The Claimant and the Ministry of Finance of Paraguay had entered into a contract for the provision of technical services for pre-shipment inspections. Art. 9 of the contract provided that disputes in relation to the contract with regard to its implementation, termination, or invalidity were to be submitted to the courts of the City of Asunción.218 Paraguay argued that the dispute should be decided by these domestic courts. The Tribunal started with the well-known proposition, based on Vivendi v Argentina, that treaty claims and contract claims had to be distinguished, and that the domestic forum selection clause did not extend to treaty claims.219 Turning to the BIT’s umbrella clause, the Tribunal found that its reference to ‘any obligation’ was all-encompassing. It gave the Tribunal jurisdiction over claims arising from the contract.220 However, the Tribunal noted that the contract post-dated the BIT.221 It also held that the Claimants could not select only parts of the contract that suited them for incorporation into an umbrella clause claim and ignore the forum selection clause of the contract.222 The Tribunal’s conclusion was that the claims based on the umbrella clause were inadmissible because the BIT’s umbrella clause did not override the contract’s exclusive forum selection clause. The fundamental basis of the claim, presented under the umbrella clause, was contractual, and the proper forum for its resolution was the Tribunals of the City of Asunción. The Tribunal said:

216 ibid. 217 See generally Anthony Sinclair, ‘The Origins of the Umbrella Clause in the International Law of Investment Protection’ (2004) 20 Arb Int’l 411; Vlad Zolia, ‘Effect and Purpose of “Umbrella Clauses” in Bilateral Investment Treaties: Unresolved Issues’ (2004) 1(2) TDM; Alexandrov (n 150); Schreuer (n 64) 249–255; Thomas Wälde, ‘The “Umbrella Clause” in Investment Arbitration: A Comment on Original Intentions and Recent Cases’ (2005) 6 JWIT 183; Gaffney and Loftis (n 206); Craig Miles, ‘Where’s My Umbrella? An “Ordinary Meaning” Approach to Answering Three Key Questions That Have Emerged from the “Umbrella Clause” Debate’ in Todd G Weiler (ed), Investment Treaty Arbitration and International Law (JurisNet 2008) 3; Schill (n 206); Katia Yannaca-Small, ‘The Umbrella Clause: Is the Umbrella Closing?’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) 395; Alperen Af¸sin Gözlügöl, ‘The Effects of Umbrella Clauses: Their Relevance in Interpretation and in Practice’ (2020) 21 JWIT 558. 218 BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009) para 8. 219 ibid para 127. 220 ibid paras 141, 142. 221 ibid para 146. 222 ibid para 148.

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[H]aving regard to the need to respect the autonomy of the parties, BIVAC cannot rely on the Contract as the basis of a claim under Article 3(4) of the BIT [the umbrella clause] when the Contract itself refers that claim exclusively to another forum, in the absence of exceptional reasons which might make the contractual forum unavailable . . .223

The Tribunal in SGS v Paraguay, on the other hand, declined to follow the reasoning in BIVAC. It reasoned that doing so would place the Tribunal at risk of failing to carry out its mandate under the treaty.224 Having found that it had jurisdiction over the umbrella clause claims, the Tribunal declined to reject them as inadmissible.225 It disagreed with the BIVAC tribunal’s acceptance of the contractual forum selection clause as an implied waiver of treaty arbitration. The Tribunal said:

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177. . . . to dismiss umbrella clause claims as inadmissible on the ground that a forum selection clause is applicable to the parties’ commitments under the Contract will be, in effect, to read an implied waiver of BIT rights into every investment agreement that specifies a dispute resolution mechanism other than ICSID – a result we would not embrace. . . . 180. At least in the absence of an express waiver, a contractual forum selection clause should not be permitted to override the jurisdiction to hear Treaty claims of a tribunal constituted under that Treaty.226

e) ICSID Tribunals’ Jurisdiction (and Obligation) to Interpret Contracts The distinction between contract and treaty claims, and the presence in contracts of an exclusive forum selection clause, raise the question of the extent to which ICSID tribunals can interpret the contract in the exercise of their jurisdiction to decide on treaty breaches. The first ad hoc Committee in Vivendi v Argentina set the standard by stating:

159

[U]nder . . . the BIT the Tribunal had jurisdiction to base its decision upon the Concession Contract, at least so far as necessary in order to determine whether there had been a breach of the substantive standards of the BIT.227

In the resubmitted Vivendi v Argentina case, Argentina argued that

160

in order to determine if Argentina breached the standards contained in the BIT, the Tribunal must apply Argentine law in general, and the law regulating the Concession Agreement in particular.228

In the view of Argentina, ‘the existence of a forum selection clause prevents the Tribunal from deciding the meaning of the contract.’229 Argentina went still further and asserted that ‘the provisions of Article 16.4 of the Concession Agreement [the forum selection clause] prevented the Tribunal from interpreting or applying the contract’ and that it was ‘impermissible’ for the Tribunal to determine whether ‘there have or have not

223 224 225 227 228 229

ibid para 159(4). SGS v Paraguay, Decision on Jurisdiction (12 February 2010) para 172. ibid para 175, 176. 226 ibid paras 177, 180. Vivendi v Argentina, Decision on Annulment (3 July 2002) para 110. ibid, Resubmitted Case: Award (20 August 2007) para 7.3.1. ibid para 7.3.2.

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been breaches of the contract because . . . such a finding is expressly reserved by the parties to the Courts of Tucumán themselves.’230 The Tribunal in the resubmitted case in Vivendi v Argentina did not accept ‘the limitation on its ability to ascertain whether a Treaty breach may have occurred as a result of or having regard, inter alia, to breaches (by either of the parties) of the Concession Agreement.’231 It explained that in the forum selection clause of the Concession Agreement, the parties submit themselves to the exclusive jurisdiction of the Administrative Courts of Tucumán only ‘for purposes of interpretation and application of this contract.’232

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However, it was ‘open to the Tribunal, should it feel it necessary for its analysis of Treaty breach, to interpret the Concession Agreement and come to a view as to whether either of the parties failed to live up to its terms.’233 The Tribunal clarified that, in doing so, it ‘would not be applying the contract by deciding a contractual issue, determining the parties’ respective rights and obligations or granting relief under the agreement.’234 Rather, the Tribunal ‘would be doing no more than the Respondent concedes is its right – ie, taking the contractual background into account in determining whether or not a breach of the Treaty has occurred.’235 The Tribunal further noted: A state may breach a treaty without breaching a contract; it may also breach a treaty at the same time it breaches a contract. And, in the latter case it is permissible for the Tribunal to consider such alleged contractual breaches, not for the purpose of determining whether a party has incurred liability under domestic law, but to the extent necessary to analyse and determine whether there has been a breach of the Treaty. In doing so, the Tribunal would in no way be exercising jurisdiction over the contract, it would simply be taking into account the parties behaviour under and in relation to the terms of the contract in determining whether there has been a breach of a distinct standard of international law, as reflected in . . . the BIT.236

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The Tribunal in Biwater Gauff v Tanzania followed closely the analysis of the Tribunal in Vivendi. In Biwater, Tanzania argued that the Tribunal could, and had to, assess the performance of the Claimant’s affiliate under the contract, given its intimate connection with the treaty claims. The Claimant, on the other hand, asserted that the Tribunal did not need to, and should not, evaluate the contractual performance, at least in any detail, given that the claims in the arbitration arose exclusively from the BIT, and not from the contract.237 The Tribunal ruled that it had no jurisdiction over contract claims, but observed that ‘[t]here are no contractual claims in this BIT arbitration’ and ‘no relief is sought on behalf of either [party to the contract].’238 The Biwater tribunal, however, concluded that it had jurisdiction, and indeed an obligation, to interpret the contract in order to decide the treaty-based claims. It stated:

230 232 234 237 238

ibid para 7.3.3. 231 ibid para 7.3.8. ibid para 7.3.9 (emphases in the original). 233 ibid. ibid (emphasis in the original). 235 ibid. Biwater Gauff v Tanzania, Award (24 July 2008) para 468. ibid para 469.

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236 ibid para 7.3.10.

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470. On the other hand, in determining the treaty claims as between [the Claimant] and the Republic, it is impossible to disregard the way in which the Lease Contract was concluded, performed, renegotiated and terminated. The Lease Contract was, after all, the principal asset in question in this dispute. Both sides’ cases entailed the presentation of extensive evidence on all aspects of the contractual position. None of the acts of the Republic about which [the Claimant] complains can be evaluated in the abstract, without considering the precise circumstances in which they occurred, which in turn necessarily involves consideration of the contractual position. . . . 471. Since this Arbitral Tribunal can only discharge its mandate by considering issues relevant to the contractual relationship, it obviously has jurisdiction to do so. . . .239

The separate treatment of contract claims and treaty claims may lead to the undesirable phenomenon of claim-splitting and parallel proceedings.240 The claimant may be compelled to pursue part of its claim through national procedures and another part through international procedures. National as well as international proceedings arising from the same dispute are not only uneconomical. They also require coordination and measures to avoid double-dipping. Even worse is the prospect of conflicting decisions in national and international proceedings. Moreover, in certain circumstances, claimsplitting and seeking to take advantage of multiple fora may rise to the level of an abuse of rights.241

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C. ‘. . . shall, . . . be deemed consent to such arbitration to the exclusion of any other remedy.’ Art. 26 creates a presumption that the parties intended to resort to ICSID arbitration to the exclusion of all other means of dispute settlement. This is expressed in the Report of the Executive Directors to the Convention:

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32. It may be presumed that when a State and an investor agree to have recourse to arbitration, and do not reserve the right to have recourse to other remedies or require the prior exhaustion of other remedies, the intention of the parties is to have recourse to arbitration to the exclusion of any other remedy. This rule of interpretation is embodied in the first sentence of Article 26.242

Once it has been established that there is a valid consent to ICSID arbitration (and ‘unless otherwise stated’), any other forum in which an attempt is made to pursue the claim must decline to deal with it.

239 ibid paras 470–471. For further cases that address a tribunal’s competence to interpret contracts in order to determine the existence of treaty breaches, see Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) para 87, fn 36. See also Waste Management v Mexico II (AF), Award (30 April 2004) para 73. 240 See generally Katia Yannaca-Small, ‘Parallel Proceedings’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 1008. 241 See Orascom v Algeria, Award (31 May 2017) paras 539–548. The Tribunal’s decision on abuse of rights was upheld in the annulment proceedings; see Orascom v Algeria, Decision on Annulment (17 September 2020) paras 315–320. See also AMF Aircraftleasing v Czech Republic, Award (11 May 2020) paras 485–490, where the Tribunal found no abuse of rights. 242 (1993) 1 ICSID Reports 23, 29–30.

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1. Parallel Arbitration 170

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One of the functions of Art. 26 is to create a rule of priority vis-à-vis other systems of adjudication in order to avoid contradictory decisions and to preserve the principle of ne bis in idem (History, Vol. II, p. 114, para. 34, pp. 274, 758). Therefore, a non-ICSID tribunal should decline jurisdiction in the face of a valid submission to ICSID arbitration, unless a contrary intention of the parties can be established (see also Art. 27, paras. 23–27). Nevertheless, a respondent before a non-ICSID tribunal is well advised to make a timely appearance and to point out ICSID’s exclusive jurisdiction. Failure to protest the pursuit of remedies before a non-ICSID tribunal in a timely fashion can lead to considerable complications and delays and may affect a decision on legal costs. In MINE v Guinea, MINE pursued its claim before the AAA which rendered an award in its favor. Subsequently, this award was ruled to be invalid in view of ICSID’s exclusive jurisdiction. However, Guinea’s failure to appear in the AAA proceedings, as well as before American courts in the proceedings to compel arbitration, ultimately worked to its disadvantage. Before the ICSID tribunal, which subsequently decided the case, Guinea brought a counterclaim for legal fees and expenses related to the AAA arbitration. The Tribunal denied this particular counterclaim in view of Guinea’s failure to respond or voice a timely objection, and also on the same grounds reduced Guinea’s claim for costs associated with MINE’s various attachment efforts on the basis of the AAA award.243 In a number of cases, ICSID tribunals have been confronted with concurrent nonICSID arbitration proceedings.244 In some of these cases, the competing proceedings were based on contractual provisions while the ICSID tribunal’s jurisdiction was based on a BIT. In SGS v Pakistan, the Respondent had initiated an arbitration in Pakistan under the disputed contract, the PSI Agreement, before ICSID proceedings were instituted by the Claimant.245 After initiating the ICSID arbitration, SGS objected to the arbitration proceedings in Pakistan before the courts of Pakistan, but ultimately the Supreme Court of Pakistan granted the Respondent’s request to proceed with the arbitration.246 Before the ICSID tribunal, Pakistan argued that SGS’s claim was essentially a claim for breach of contract, and as such should be submitted to the exclusive jurisdiction of the arbitrator in Pakistan.247 SGS submitted, in relevant part: (a) that the ICSID tribunal’s jurisdiction extended to SGS’s claims as formulated by SGS; (b) that the forum selection clause in the PSI Agreement did not diminish the ICSID tribunal’s jurisdiction; (c) that in the event of prima facie overlapping arbitration provisions, the Tribunal’s jurisdiction should prevail; (d) that the lis pendens principle did not bar the ICSID tribunal from hearing SGS’s claims; and, (e) that SGS did not waive its right to pursue ICSID arbitration, nor was it estopped from presenting its claims to the Tribunal.248

243 MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 76–77. 244 See also the non-ICSID cases Sanum Investments v Laos (UNCITRAL), Award on Jurisdiction (13 December 2013) paras 359, 365–367; Flemingo Duty Free v Poland (UNCITRAL), Award (12 August 2016) paras 339, 347. 245 SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 26–29. 246 ibid paras 35–42. 247 ibid paras 43–74. 248 ibid para 88.

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The Tribunal referred to previous decisions recognizing that contractual claims and treaty claims could co-exist and upheld its jurisdiction with respect to alleged violations of the treaty, since that jurisdiction would not be shared by the PSI Agreement arbitrator.249 As to claims arising from alleged breaches of contract, the Tribunal held that it was not competent to decide contractual claims unless they also constituted or amounted to treaty violations.250 In Lucchetti v Peru, the Respondent filed a request for suspension of the ICSID arbitration in view of the fact that the request for arbitration was the subject of a concurrent State-to-State dispute between Peru and Chile.251 After exchanges of submissions by the parties on the subject, the Tribunal found that ‘the conditions for a suspension of the proceedings were not met.’252 The Tribunal provided no reasoning for its decision. In Bayindir v Pakistan, the Respondent asked for a stay of the ICSID proceedings pending a decision on the contractual issues in arbitral proceedings that had been initiated in Pakistan under the contract.253 Pakistan contended that the contractual arbitral tribunal was already seized of the dispute between the National Highway Authority (NHA), and Bayindir and was obliged to proceed to the merits. Pakistan maintained that there were compelling reasons of principle and the orderly administration of justice to stay the ICSID proceedings pending resolution of the local contractual arbitration.254 The Bayindir tribunal disagreed with Pakistan and found that there were no compelling reasons to stay its proceedings. It stated:

173

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270. In the Tribunal’s view its jurisdiction under the BIT allows it – if this should prove necessary – to resolve any underlying contract issue as a preliminary question. Exactly like the arbitral tribunal sitting in Pakistan, this Tribunal should proceed with the merits of the case. This is an inevitable consequence of the principle of the distinct nature of treaty and contract claims. The Tribunal is aware that this system implies an intrinsic risk of contradictory decisions or double recovery. . . . 271. In any event, accepting that it has discretion to order the stay of the present proceedings as requested by Pakistan, that discretion is to be exercised only if there are truly compelling reasons. In the present case, the Tribunal cannot see any compelling reason to stay the current arbitration.255

A different issue arose in Saipem v Bangladesh, where the Claimant alleged that Bangladesh violated the terms of the Bangladesh–Italy BIT by unlawfully interfering with an ICC arbitration and precluding enforcement of the ICC award.256 The ICC arbitration had been initiated by Saipem under the contractual dispute resolution mechanism against the Bangladeshi State entity Petrobangla. The Tribunal noted that Bangladesh had stated, in its oral arguments on jurisdiction, that Art. 26 of the

249 250 251 252 253 254 256

ibid para 155. ibid paras 156–162. See also ibid paras 178–181, 185–189. Lucchetti v Peru, Award (7 February 2005) para 7. ibid para 9. Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 264–273. ibid para 269. 255 ibid para 270–271. Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 18–36.

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Convention does not permit an ICSID tribunal to accept the findings of another tribunal for its own decisions. The Tribunal emphasized that it was not requested to ‘accept and use’ the ICC tribunal’s findings, but, rather, that its mission was ‘to review whether the ICC Award was frustrated contrary to the protection provided in the BIT.’257 In Fraport v Philippines I, the Respondent made allegations of fraud and corruption on the part of shareholders, including the Claimant, of the investment vehicle PIATCO, as well as of various public officials of the Philippines. The Philippines contended that evidence of such corruption could be found in documents and submissions filed in a pending ICC arbitration initiated by PIATCO against the Philippines.258 The Claimant subsequently filed a formal request for production of documents by the Respondent including the submissions and documents filed in the ICC arbitration.259 The Tribunal accepted the Claimant’s argument that the underlying issues overlapped in both arbitrations. Consequently, the Respondent was directed to produce all submissions and documents filed in the ICC arbitration on ‘an on-going basis.’ The Tribunal’s Procedural Order read as follows, in relevant part: While the present ICSID arbitration and the ICC arbitration are not strictly speaking, parallel arbitrations, the Tribunal accepts Claimant’s representations that the underlying issues in both arbitration [sic] are, in substantial part, overlapping. In the circumstances, there exists a real possibility that the two arbitral tribunals, presented with and asked to consider similar facts, could render conflicting or inconsistent decisions regarding those facts. This is not a desirable outcome.260

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CME v Czech Republic and Lauder v Czech Republic were non-ICSID cases, but have become emblematic for parallel proceedings. Mr. Lauder initiated arbitration under the Czech Republic–United States BIT, while CME, a Dutch company controlled by him, initiated arbitration under the Czech Republic–Netherlands BIT. In both CME261 and Lauder,262 the Tribunals declined to find an abuse of process by the Claimant and emphasized the refusal of the Respondent to consolidate the two proceedings. In Ampal-American v Egypt, the circumstances were somewhat different. The Tribunal observed that Ampal’s 100 percent-owned subsidiary, MAGL, had filed in a parallel arbitration claims that partially overlapped with Ampal’s claims in this case. However, no issue of consolidation appears to have been raised. The Tribunal noted: This is tantamount to double pursuit of the same claim in respect of the same interest. In the Tribunal’s opinion, while the same party in interest might reasonably seek to protect its claim in two fora where the jurisdiction of each tribunal is unclear, once jurisdiction is otherwise confirmed, it would crystallize in an abuse of process for in substance the same claim is to be pursued on the merits before two tribunals. However, the Tribunal wishes to make it very clear that this resulting abuse of process is in no way tainted by bad faith on the part of the Claimants as alleged by the Respondent. It is merely the

257 258 259 260 261 262

ibid para 115. Fraport v Philippines I, Award (16 August 2007) para 5. ibid para 18. ibid para 19 (citing the Tribunal’s Procedural Order of 18 October 2004). CME v Czech Republic (UNCITRAL), Partial Award (13 September 2001) para 412. Lauder v Czech Republic (UNCITRAL), Final Award (3 September 2001) paras 160–165.

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result of the factual situation that would arise were two claims to be pursued before different investment tribunals in respect of the same tranche of the same investment.263

The Tribunal further noted that the tribunal in the parallel arbitration had taken jurisdiction over MAGL’s claims. It stated:

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The consequence of this finding, together with the balance of the present Decision on Jurisdiction, is that the abuse of process constituted by the double pursuit of the MAGL portion of the claim in both proceedings must now be treated as having crystallised. Both Tribunals have confirmed that they have jurisdiction. It follows from this therefore that there is no risk of a denial of justice occasioned by the absence of a tribunal competent to determine the MAGL portion of the claim. Both Tribunals are seised of the merits and neither Tribunal has yet reached a decision on the merits.264

The Tribunal continued:

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It lies in the power of Ampal, as 100% owner of MAGL . . . to cure the abuse here identified were Ampal and MAGL to elect, in light of the present Decision which has otherwise confirmed the Tribunal’s jurisdiction, to submit the MAGL portion of the claim made in the Maiman arbitration to the exclusive jurisdiction of the present Tribunal, relinquishing that part of the claim in the Maiman arbitration, or conversely to pursue such claim only in the latter proceeding.265

The Tribunal then referred explicitly to Art. 26 and, on that basis, invited Ampal ‘to elect to pursue the MAGL portion of the claim in the present proceedings alone.’266 Ampal eventually chose to pursue the MAGL portion of the claim in the ICSID arbitration together with the other claims.267 In Orascom v Algeria, three entities in a vertically integrated chain of companies controlled by the same shareholder (Orascom) submitted notices of dispute, and Orascom initiated arbitration against Algeria under different instruments, but in relation to the same measure and for the same damages. As explained by the Tribunal:

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[T]he Claimant first caused one of its subsidiaries, OTH, to bring claims against Algeria. Then, it caused a different subsidiary in the chain, Weather Investments, to threaten to bring a different arbitration in relation to the same dispute. Finally – after selling the investment – it pursued yet another investment treaty proceeding in its own name for the same investment (its past shareholding in OTA) in relation to the same host state measures and the same harm. Doing so, the Claimant availed itself of the existence of various treaties at different levels of the vertical corporate chain using its rights to treaty arbitration and substantive protection in a manner that conflicts with the purposes of such rights and of investment treaties.268

The Tribunal concluded that ‘this conduct must be viewed as an abuse of the system of investment protection’ and a ‘ground for the inadmissibility of the Claimant’s claims.’269 The Tribunal noted that its conclusions were 263 264 266 267 268 269

Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) para 331. ibid para 333. 265 ibid para 334. ibid para 339 Ampal-American v Egypt, Decision on Liability and Heads of Loss (21 February 2017) paras 11–22. Orascom v Algeria, Award (31 May 2017) para 545. ibid.

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schreuer’s commentary on the icsid convention the result of the peculiar facts of the case, in which (i) the group of companies of which the Claimant was part was organized as a vertical chain; (ii) the entities in the chain were under the control of the same shareholder; (iii) the measures complained of by the various entities in the chain were the same and thus the dispute notified to Algeria by those entities was in essence identical; and (iv) the damage claimed by the various entities was, in its economic essence, the same.270

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Moreover, one of the entities in the chain, OTH, had entered into a settlement agreement resolving its claims. With respect to the settlement agreement, the Tribunal found: The settlement agreement puts an end to the dispute arising from Algeria’s measures in the same manner as the award would have ended the dispute. In the absence of harm which it incurred itself to the exclusion of OTH, the Claimant cannot take over the dispute that OTH has settled. In this respect, the content of the settlement . . . is irrelevant. What matters is that the claims arising from Algeria’s measures have ceased to exist due to the settlement agreement.271

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The Tribunal further explained: It goes without saying that structuring an investment through several layers of corporate entities in different states is not illegitimate. Indeed, the structure may well pursue legitimate corporate, tax, or pre-dispute BIT nationality planning purposes. In the field of investment treaties, the existence of a vertical corporate chain and of treaty protection covering ‘indirect’ investments implies that several entities in the chain may claim treaty protection, especially where a host state has entered into several investment treaties. In other words, several corporate entities in the chain may be in a position to bring an arbitration against the host state in relation to the same investment. This possibility, however, does not mean that the host state has accepted to be sued multiple times by various entities under the same control that are part of the vertical chain in relation to the same investment, the same measures and the same harm.272

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The Orascom tribunal distinguished its conclusions from those of the Tribunals in CME v Czech Republic and Lauder v Czech Republic, which allowed the claims under different investment treaties to proceed ‘despite the fact that both sets of proceedings were based on the same facts and sought reparation for the same harm.’273 In the view of the Orascom tribunal, those cases ‘should be placed in the context of their procedural history, in which the respondent had refused several offers to consolidate or otherwise coordinate proceedings.’274 The Orascom tribunal added: Moreover, it cannot be denied that in the fifteen years that have followed those cases, the investment treaty jurisprudence has evolved, including on the application of the principle of abuse of rights (or abuse of process), as was recalled above. The resort to such principle has allowed tribunals to apply investment treaties in such a manner as to avoid consequences unforeseen by their drafters and at odds with the very purposes underlying the conclusion of those treaties.275

270 272 274 275

ibid para 546. ibid para 542. ibid. ibid.

271 ibid para 524. 273 ibid para 547.

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In Unión Fenosa v Egypt, the Respondent contended that the Claimant (and its affiliate, SEGAS) had engaged in an elaborate and improper strategy of ‘claim-splitting.’ The Respondent pointed to two arbitrations commenced by the Claimant in Egypt, and an ICC arbitration commenced by SEGAS, in addition to the ICSID arbitration, with a significant overlap of factual and expert witnesses in the four separate arbitrations. On that basis, the Respondent argued that the Claimant’s claims in the ICSID arbitration were precluded by such claim-splitting and overlapping issues, and relied, inter alia, on Orascom v Algeria.276 The Tribunal noted that the Claimant and SEGAS had come close to the dividing line between proper and improper conduct in pursuing four separate arbitrations with overlapping factual issues and evidence. However, the Tribunal found the position in the case ‘materially different’ from the situation in Orascom v Algeria because in Orascom there was bad faith and/or res judicata found against the Claimants. In Unión Fenosa, there could be no res judicata effect of the ICC arbitration award upon the Claimant and the Respondent in the ICSID arbitration. As to bad faith, the Tribunal declined to find that the Claimant (with SEGAS) was not acting in good faith, although its tactics appeared to the Tribunal to be wasteful of time, effort, and expense, both for the Respondent and also, possibly, for the Claimant and SEGAS. In addition, according to the Tribunal, in Orascom v Algeria, the investor had deliberately structured its investment through several layers of corporate entities so as to gain the protection of multiple investment treaties, which was not the case in Unión Fenosa.277 The Unión Fenosa tribunal noted that it had taken steps in the Award to ensure that the Claimant would not benefit from any double recovery in respect of equivalent losses that might be awarded in the other arbitrations. The Tribunal also emphasized that the Claimant had made it abundantly clear that all its claims were based on alleged breaches of the Respondent’s obligations under the Treaty and not on any contractual breaches.278 In Venezuela Holdings v Venezuela, Venezuela invoked a parallel ICC arbitration before the ICSID tribunal – not as a bar to jurisdiction, but as a final disposition of the dispute. According to Venezuela, the ICC Award ‘should end the compensation dispute and effectively put an end to this case’ because

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[the] Claimants have argued from the beginning that this is the proceeding contemplated under [the relevant agreement] to mitigate the ‘damages payable’ as a result of the Government’s measures. Now that the ‘damages payable’ have been determined by the ICC tribunal and the ICC Award has been paid, there is no point or basis for a continuation of the . . . compensation controversy.279

The ICSID tribunal observed that ‘the ICC Award and the present case concern the liability of different parties under different normative regimes,’ that Venezuela ‘was not a party to the ICC arbitration,’ and that the ICSID proceedings concerned the responsibility of Venezuela for breach of the BIT and international law, ‘a matter that was not

276 Unión Fenosa v Egypt, Award (31 August 2018) paras 6.77–6.78. 277 ibid paras 6.80–6.81. 278 See ibid paras 6.82–6.83. 279 Venezuela Holdings v Venezuela, Award (9 October 2014) para 215.

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(and could not) have been resolved by the ICC tribunal, which [sic] jurisdiction was limited to the contractual dispute.’280 The Tribunal concluded: As a result, the Tribunal finds that the ICC Award does not, as the Respondent contends, put an end to this case. However, it is true that some facts that were relevant in the ICC arbitration are also relevant in the present case, such as the facts underlying the production and export curtailments claim. In its analysis, the Tribunal has thus considered the findings of the ICC tribunal in an attempt to avoid inconsistent outcomes whenever possible.281

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The ICSID tribunal further noted that the agreement at issue in the ICC arbitration limited the compensation due from the relevant government entity (PDVSA), and that the limitation had been reflected in the amount awarded by the ICC tribunal. The Tribunal observed that ‘[n]o such limitation applies, however, to the State’s responsibility under the BIT’ and concluded that it would ‘assess the effect of the ICC Award on quantum where relevant’ in the Award.282 Similarly, in Fábrica de Vidrios v Venezuela,283 the Respondent referred to a parallel ICSID arbitration initiated by the Claimants’ majority shareholder, OIEG, in which the tribunal had awarded damages to OIEG.284 Venezuela requested that the Claimants readjust their claims in the Fábrica de Vidrios arbitration in light of the award rendered in the parallel OIEG arbitration, and sought a commitment from the Claimants not to seek double recovery in the ICSID arbitration. Subsequently, Venezuela raised a jurisdictional objection on the basis of the parallel arbitration. The Fábrica de Vidrios tribunal rejected Venezuela’s request for an order to readjust claims and dismissed as untimely the jurisdictional objection. Nevertheless, the Tribunal invited Venezuela to address the significance of the findings of the award in the parallel arbitration on any potential liability of Venezuela in the instant case.285 In addressing the issue, Venezuela noted that OIEG had obtained an award in the parallel arbitration that covered all of its shareholding in the Claimants, which amounted to 72.983 percent of the damages sought by the Claimants in the ICSID case. Therefore, Venezuela argued, the Tribunal should consider the outcome of the OIEG award to avoid double recovery. The Claimants, on the other hand, stated that any recovery by OIEG in the parallel arbitration would be set off against the compensation payable to the Claimants in this proceeding. However, the Claimants noted that Venezuela had failed to pay any compensation to OIEG and had initiated annulment proceedings against the award rendered in the parallel arbitration. Therefore, in the Claimants’ view, at the time there was no need to readjust their claim in this arbitration. The Claimants asked that the Tribunal render an award specifying that the Respondent shall pay compensation to the Claimants equal to: (a) 27.017% of the Tribunal’s valuation of the Claimants’ investment; and (b) 72.983% of the Tribunal’s valuation minus any amounts collected by OIEG pursuant to the OIEG Award.286 280 282 283 284 285 286

ibid para 216. 281 ibid para 217. ibid paras 218–219. Fábrica de Vidrios v Venezuela, Award (13 November 2017). OIEG v Venezuela, Award (10 March 2015). Fábrica de Vidrios v Venezuela, Award (13 November 2017) paras 61–65. ibid paras 168–172.

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The Fábrica de Vidrios tribunal never reached a decision on this point because it dismissed the claims on unrelated jurisdictional grounds. Nevertheless, the Tribunal expressed some sympathy with the Respondent’s argument that it was unreasonable for the Claimants to pursue the proceedings for the full amount of the Claimants’ interest in the investment when OIEG had already obtained an award that covered all of its shareholding in the Claimants, and which amounted to 72.983 percent of the damages sought by the Claimants. The Tribunal also noted that the question of the res judicata effect of the OIEG award would have been a serious issue for the Tribunal’s consideration had it proceeded to adjudicate the merits of the case.287

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2. Consolidation and Establishment of Identical Tribunals Consolidation is the joinder of separate proceedings on the basis of common questions of law or fact in the underlying disputes. It may be ordered by a court, by an arbitral tribunal, or by the arbitral institution chosen by the parties. Consolidation is designed to promote procedural efficiency and consistency of decisions and to relieve the hardship to the respondent of having to defend separately against multiple claimants.288 Exceptionally, claims arising from the same overall transaction between the same parties, but subject to several jurisdictional instruments may call for consolidation.289 Procedures for the consolidation of related proceedings are provided, inter alia, by Art. 1126 of the NAFTA,290 Art. 33 of the 2012 United States Model BIT,291 Art. 32 of the 2004 Canadian Model Foreign Investment Protection Agreement (FIPA),292 and a number of international investment and free trade agreements.293 Most recently, a

287 ibid para 319. 288 See generally Yannaca-Small (n 240); Gabrielle Kaufmann-Kohler and others, ‘Consolidation of Proceedings in Investment Arbitration: How Can Multiple Proceedings Arising from the Same or Related Situations Be Handled Effectively? – Final Report on the Geneva Colloquium on Consolidation of Proceedings in Investment Arbitration April 22, 2006’ (2006) 21 ICSID Rev 59; Walid Ben Hamida, ‘La consolidation des procédures arbitrales’ [2006] 3 Les Cahiers de l’Arbitrage 30–35; Antonio Crivellaro, ‘Consolidation of Arbitral and Court Proceedings in Investment Disputes’ (2005) 4 LPICT 371; Martin Platte, ‘When Should an Arbitrator Join Cases?’ (2002) 18 Arb Int’l 67; Robin F Hansen, ‘Parallel Proceedings in Investor–State Treaty Arbitration: Responses for TreatyDrafters, Arbitrators and Parties’ (2010) 73 Modern L Rev 523. See also the contributions on ‘Multiparty Investor Disputes in the Energy Sector – Preclusion, Consolidation, or Free-For-All?’ in Ian A Laird and others (eds), Investment Treaty Arbitration and International Law (Juris 2014) 203–286. 289 Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 186–207. 290 NAFTA (n 29) Art. 1126(2) provides: ‘Where a Tribunal established under this Article is satisfied that claims have been submitted to arbitration under Article 1120 that have a question of law or fact in common, the Tribunal may, in the interests of fair and efficient resolution of the claims, and after hearing the disputing parties, by order: (a) assume jurisdiction over, and hear and determine together, all or part of the claims; or (b) assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in the resolution of the others.’ 291 US Model BIT (2012) Art. 33(1) provides: ‘Where two or more claims have been submitted separately to arbitration under Article 24(1) and the claims have a question of law or fact in common and arise out of the same events or circumstances, any disputing party may seek a consolidation order in accordance with the agreement of all the disputing parties sought to be covered by the order or the terms of paragraphs 2 through 10.’ 292 Available at accessed 10 January 2021. 293 See eg Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) (signed 5 August 2004, in force) Art. 10.25; Colombia–United States Trade Promotion Agreement (signed 22 November 2006, entered into force 15 May 2012) Art. 10.25; Korea–United States Free Trade Agreement (signed

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provision for consolidation has been included in the Agreement between the United States of America, the United Mexican States, and Canada (USMCA).294 Under these provisions, consolidation may be requested if two or more claims have been submitted separately that have a question of law or fact in common. In that case, a tribunal may be established to decide on the consolidation request. Consolidation offers obvious advantages for respondents,295 since it avoids the proliferation of parallel proceedings, which are likely to result in increased costs and may lead to conflicting results. Not surprisingly, the consolidation proceedings conducted under the NAFTA are usually initiated by the respondent State and opposed by the claimants.296 Misgivings of the claimants about consolidation in those cases concerned the protection of confidential information from competitors in consolidated proceedings, full participation of claimants in the composition of the consolidated tribunal, and the opportunity of individual claimants to present their cases fully.297 In Pan American v Argentina, Pan American Energy LLC and BP Argentina Exploration Company (the ‘first Claimants’) filed a Request for Arbitration against Argentina that was registered on 6 June 2003. Then, BP America Production Company, Pan American Sur SRL, Pan American Fueguina SRL, and Pan American Continental SRL (the ‘second Claimants’) also submitted a Request for Arbitration against Argentina, which was registered on 27 February 2004. The Respondent and the first and second Claimants agreed that the Tribunal should consist of the same members and that both cases should be consolidated. The parties agreed that the two cases would be considered to form one set of proceedings and that the Tribunal would issue a single decision on jurisdiction for both proceedings.298 The most obvious case for consolidation is where two or more claimants who have an ownership interest in the same investment either initiate a single arbitration or initiate separate arbitrations and subsequently agree with the respondent to consolidate the proceedings. For example, in Unglaube v Costa Rica, two spouses, Marion Unglaube and Reinhard Unglaube, had shares in the same investments and initially filed separate requests for arbitration. Subsequently, the parties agreed to consolidate the two cases.299

294 295 296 297

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30 June 2007, entered into force 15 March 2012) Art. 11.25; Peru–United States Trade Promotion Agreement (signed 12 April 2006, entered into force 1 January 2009) Art. 10.25. See generally UNCTAD, Investor–State Dispute Settlement and Impact on Investment Rulemaking (United Nations 2007) 83–84. On so-called mega-regionals, see generally Stephan W Schill, ‘Authority, Legitimacy, and Fragmentation in the (Envisaged) Dispute Settlement Disciplines in Mega-Regionals’ in Stefan Griller and others (eds), Mega-Regional Trade Agreements: CETA, TTIP, and TiSA: New Orientations for EU External Economic Relations (OUP 2017) 111. USMCA (n 29) Art. 14.D.12. But see Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 186–207. In that case, the Respondent unsuccessfully opposed the pursuit of related claims in one set of proceedings. See Canfor v United States, Tembec and others v United States, Terminal Forest Products v United States (UNCITRAL), Order of the Consolidation Tribunal (7 September 2005); Corn Products v Mexico (AF), Archer Daniels Midland v Mexico (AF), Order of the Consolidation Tribunal (20 May 2005). In Corn Products v Mexico (AF), the Claimants were direct competitors and argued that accepting Mexico’s request for consolidation would not have been efficient or fair because the Claimants could not exchange details regarding their respective business. The Consolidation Tribunal agreed and concluded that the Claimants were unable to cooperate in a single claim. Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 1–4, 7. Unglaube v Costa Rica, Award (16 May 2012) paras 8, 13, 27.

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As an alternative to consolidation, identical tribunals can be established for separate, but related claims in order to improve efficiency and to avoid inconsistency. This method has been employed in some ICSID cases that were closely related, but had been filed separately.300 For instance, in Salini v Morocco and in RFCC v Morocco, where the factual background was almost identical, and the same BIT applied, the parties were invited by the ICSID Secretariat to appoint the same arbitrators, who then appointed the same Chairman. As a result, although the two arbitral proceedings remained distinct, the identically composed tribunals issued similar decisions on jurisdiction.301 The same approach has been used to coordinate some of the ICSID arbitrations brought against Argentina. In Sempra v Argentina and Camuzzi v Argentina I, although the cases were based on different BITs, the Claimants were both shareholders in two gas distribution companies that served certain Argentine provinces. The parties agreed to set up identical tribunals to hear the two requests for arbitration. Sempra and Camuzzi appointed one arbitrator jointly, the Respondent also appointed the same arbitrator, and the Secretary-General of ICSID appointed the Chairman of the Tribunal.302 Similarly, identical arbitral tribunals were constituted in Suez and Vivendi v Argentina and AWG v Argentina. In these parallel cases, the Claimants invoked Argentina’s consent under the Argentina–France BIT, the Argentina–Spain BIT, and the Argentina–United Kingdom BIT. The first two BITs offered ICSID arbitration, but under the third BIT only UNCITRAL arbitration was available. The parties agreed that the same tribunal would hear the ICSID case and the UNCITRAL arbitration.303 The Tribunal explained:

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Since the parties pleaded ICSID Case No. ARB/03/19 jointly with the UNCITRAL case of AWG v. Argentina and filed joint memorials relating thereto and since the facts and the legal questions in both cases are virtually identical, the Tribunal has determined that it is appropriate to issue a single Decision on Jurisdiction covering both cases.304

In Niko Resources v Bangladesh, there was one Claimant, but three Respondents. The proceedings were started by two successive requests for arbitration; subsequently, it was agreed that the two cases would proceed in a concurrent manner and that the two Tribunals (of the same composition) could render their decisions in the two cases in a single instrument.305 The claims may be related in various ways: the claimants may be related, they may have an interest in the same investment, the investments may be separate, but subject to

300 See also the early cases Alcoa Minerals v Jamaica, Kaiser Bauxite v Jamaica and Reynolds v Jamaica and the note at (1993) 1 ICSID Reports 296. 301 Salini v Morocco, Decision on Jurisdiction (23 July 2001); RFCC v Morocco, Decision on Jurisdiction (16 July 2001). See Crivellaro (n 288). See also Antonio R Parra, ‘Desirability and Feasibility of Consolidation: Introductory Remarks’ (2006) 21 ICSID Rev 59, 133. 302 Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 4–6; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 5–7, 11, 14, 19. 303 See Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 1–7; AWG v Argentina (UNCITRAL), Decision on Jurisdiction (3 August 2006) paras 1–7. 304 ibid para 19. 305 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 7–9.

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the same measure, or the disputes may arise out of the same facts.306 In Churchill and Planet Mining v Indonesia, two separate ICSID proceedings were initiated under the Indonesia–United Kingdom and the Australia–Indonesia BITs, respectively. A tribunal composed of the same arbitrators was constituted in each of the two cases. The facts on which both disputes were based were ‘essentially the same.’ The parties agreed to consolidate the cases; the only disagreement was on whether one or two awards should be rendered.307 Similarly, in von Pezold and others v Zimbabwe and Border Timbers v Zimbabwe, two identically composed Tribunals were constituted to hear disputes in two separate arbitrations. However, the parties to the two cases agreed that the cases would be heard together, although they would not be formally consolidated, and that the two Tribunals would render two separate awards, one in relation to each case. The parties submitted joint pleadings and evidence, and the proceedings were characterized by the Tribunals as ‘unique conjoined and intertwined proceedings.’308 Nevertheless, as agreed, each Tribunal rendered a separate award.309 Consolidation, or de facto consolidation, requires the agreement of all parties. In Fábrica de Vidrios v Venezuela, the Claimants’ majority shareholder, OIEG, had launched a parallel arbitration (OIEG v Venezuela), under the same BIT. Venezuela proposed that the same tribunal be appointed in the second case. However, the Claimants rejected the Respondent’s proposal and the cases proceeded separately. While often it is the respondent State that seeks consolidation, this is not necessarily always the case. In Lauder v Czech Republic and CME v Czech Republic, for example, it was the Czech Republic that declined consolidation. As another example, in Emmis v Hungary and Accession Mezzanine v Hungary, Emmis and Accession Mezzanine initially filed a joint request for arbitration. Hungary objected to the registration of that request. The ICSID Secretary-General informed the parties that ‘[i]n the absence of consent by all disputing parties to join disputes relating to manifestly separate investments,’ the Secretary-General could not ‘proceed to register the Request for Arbitration as submitted to the Centre.’310 In certain circumstances, however, the consent to consolidate may be implied. In Cambodia Power v Cambodia, the dispute arose out of three different agreements. The Respondents objected to the Tribunal’s jurisdiction to resolve the dispute under the three agreements in a single proceeding. The Respondents argued that the absence of

306 In the UNCITRAL proceedings in Yukos Universal v Russia (UNCITRAL), Interim Award on Jurisdiction and Admissibility (30 November 2009) paras 1–2, three shareholders of Yukos Oil Corporation initiated three arbitrations. The three arbitrations were heard in parallel by the same Tribunal. 307 Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 2–7. See also Kardassopoulos v Georgia, Award (3 March 2010); Gemplus v Mexico (AF), Award (16 June 2010) paras 1‑15, 1‑23; MNSS and RCA v Montenegro (AF), Award (4 May 2016) paras 148–165, 308–310. 308 von Pezold and others v Zimbabwe, Award (28 July 2015) para 7. 309 ibid paras 5–8. 310 Emmis v Hungary, Decision under Rule 41(5) (11 March 2013) paras 9–10; Accession Mezzanine v Hungary, Decision under Rule 41(5) (16 January 2013) paras 9–10.

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express consolidation provisions in the three agreements demonstrated the parties’ intention to have separate proceedings in case of dispute.311 According to the Claimant, the negotiations of the contracts and the wording of the three agreements demonstrated the parties’ intention to consider the agreements as part of a unitary project, and to have a single proceeding in case of dispute.312 The Tribunal held that, while consent to consolidation ‘usually takes the form of an express provision, whether in a contract or Treaty; by way of incorporated arbitration rules; or in a submission agreement; it can also be implied from the circumstances.’313 In its analysis, the Tribunal discussed various types of consolidation: In particular, parties may agree that disputes arising out of multiple contracts are all to be brought within the scope of one particular arbitration agreement in one of the contracts. Alternatively, separate arbitration clauses in separate agreements might be interpreted as, in truth, one single arbitration agreement. Further still, claims under multiple contracts might be merged into one arbitration proceeding, and determined by way of one award. Alternatively, separate arbitration proceedings arising out of separate arbitration agreements might be heard and determined concurrently (i.e. synchronised), whilst maintaining a separate juridical nature. Whilst all of these variations might be described as ‘consolidation’, each is obviously different in nature.314

The Respondents raised an additional procedural objection. According to the Respondents, the Claimant was not entitled to activate the three arbitration clauses, and commence three concurrent arbitrations with the same Tribunal, by filing a single request.315 The Tribunal disagreed. It stated: The starting point of the Tribunal’s consideration of this issue must be the Convention itself and the Arbitration Rules. There is nothing in either which expressly prohibits an investor using a single Request to commence ICSID arbitration proceedings pursuant to more than one arbitration agreement relating to the same project and involving a single investment. Therefore, the Tribunal must exercise its power in light of its own judgment. The filing of a single Request in such cases may well facilitate the consolidation of proceedings before a single tribunal, and thereby achieve a fair, expeditious and costefficient resolution of the dispute. Investments often are in the form of complex financial structures which require the implementation of several agreements. It would be contrary to the spirit of the Convention to require claimants in each case to file as many requests for arbitration as they have claims arising under different agreements, particularly where such claims are clearly connected as in the present case. Not only would this be onerous, but it would also represent a considerable waste of time and costs, and could lead to potential delaying tactics, and inconsistent determinations. More importantly such an approach is not mandated by the Convention or by the Rules.316

311 312 314 316

Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 94–96. ibid paras 68–81. 313 ibid para 122. ibid para 128. 315 ibid para 157. ibid paras 159–160.

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In a number of cases, a large number of claimants jointly initiated proceedings.317 Those cases have raised the question whether claims by multiple claimants should be heard in one proceeding or whether in fact those are multiple parallel proceedings. In Anderson v Costa Rica, multiple Claimants asserted separate and distinct claims against Costa Rica for injuries to their alleged individual investments as a result of various breaches of domestic and international law, including the Canada–Costa Rica BIT.318 The alleged investments were funds deposited by the individual Claimants with an entity created by two brothers in Costa Rica that turned out to be a fraudulent Ponzi scheme. The Claimants alleged that Costa Rica, by failing to provide proper vigilance and governmental regulatory supervision, allowed the fraudulent scheme to operate for a significant time and, ultimately, brought about the loss of their investments.319 The arbitration was initiated via a single request for arbitration. The initial request was submitted by a large number of individuals and companies of different nationalities and included claims for breaches of multiple legal instruments.320 Almost three years later, after extensive correspondence, the Secretary-General of ICSID registered a significantly revised request for arbitration submitted by 137 individual nationals of Canada.321 A year later, the Claimants filed yet another revised request for arbitration.322 Costa Rica did not object to hearing the claims in a single proceeding. It raised jurisdictional objections, some of which applied to all claims, while others applied to certain categories of claims and claimants.323 Ultimately, the Tribunal concluded that it lacked jurisdiction ratione materiae and dismissed all of the claims. Perhaps the best-known examples of a large number of claimants submitting their claims in a single proceeding are the Argentine bond cases. In Abaclat and others v Argentina, at the time of initiation of the arbitration, the Claimants numbered more than 180,000 (this was eventually reduced to approximately 60,000), including both natural persons of Italian nationality and juridical entities incorporated and existing under the laws of Italy. Each of them had issued a power of attorney and delegation of authority to their counsel. The Claimants were represented by an association called Task Force Argentina (TFA).324 The dispute was submitted under the Argentina–Italy BIT in relation to bonds issued by the Respondent, allegedly held by the Claimants, on the payment of which the Respondent had defaulted.325 TFA obtained a mandate from the bond holders to pursue the ICSID arbitration by receiving from each one of them a package of documents (including instructions, powers of attorney, and consent forms).326

317 For further cases falling into this category, see also Spence v Costa Rica (UNCITRAL), Interim Award (corrected) (30 May 2017) paras 1, 2, 4, 10, 308; Bayview v Mexico (AF), Award (19 June 2007); Canadian Cattlemen v United States (UNCITRAL), Award on Jurisdiction (28 January 2008); Funnekotter and others v Zimbabwe, Award (22 April 2009). 318 Anderson v Costa Rica (AF), Award (19 May 2010) para 15. 319 ibid para 16. 320 ibid para 2. 321 ibid para 3. 322 ibid para 6. 323 ibid para 43. 324 Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) paras 1–4. 325 ibid para 8. 326 ibid para 85.

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The Claimants submitted a single request for arbitration. Argentina objected to the registration of the request, arguing that it was an impermissible ‘group claim’ or ‘class action,’ to which Argentina never consented. The Claimants responded that the claim was not a class action, but a joint claim in which each Claimant initiated arbitration on its own behalf and was therefore covered by ICSID’s jurisdiction. In the meantime, the Claimants amended the request for arbitration to incorporate new Claimants, to which Argentina also objected. ICSID’s Secretary-General registered the request, leaving it to the Tribunal to decide on its jurisdiction.327 One question that the Tribunal had to address was whether the consent of Argentina to the jurisdiction of ICSID included claims presented by multiple Claimants in a single proceeding,328 and whether a specific consent was required regarding the specific conditions in which the present arbitration would be conducted (in the form of collective proceedings).329 The Tribunal stated:

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Assuming that the Tribunal has jurisdiction over the claims of several individual Claimants, it is difficult to conceive why and how the Tribunal could lose such jurisdiction where the number of Claimants outgrows a certain threshold. First of all, what is the relevant threshold? And second, can the Tribunal really lose jurisdiction it has when looking at Claimants individually? In addition, the collective nature of the present proceeding derives primarily from the nature of the investment made. The ICSID Convention aims at promoting and protecting investments, without however further defining the concept of investment and leaving this task to the parties through relevant instruments such as BITs . . . Thus, where the BIT covers investments, such as bonds, which are susceptible of involving in the context of the same investment a high number of investors, and where such investments require a collective relief in order to provide effective protection to such investment, it would be contrary to the purpose of the BIT and to the spirit of ICSID, to require in addition to the consent to ICSID arbitration in general, a supplementary express consent to the form of such arbitration. In such cases, consent to ICSID arbitration must be considered to cover the form of arbitration necessary to give efficient protection and remedy to the investors and their investments, including arbitration in the form of collective proceedings.330

The Tribunal determined that the relevant question was not whether Argentina had consented to having claims of multiple Claimants heard in a single proceeding, but rather whether an ICSID arbitration could be conducted in the form of ‘mass proceedings,’ ‘considering that this would require an adaptation and/or modification by the Tribunal of certain procedural rules provided for under the current ICSID framework’:331 Consequently, the Tribunal is of the opinion that the mass aspect of the present proceedings relates to the modalities and implementation of the ICSID proceedings and not to the question whether Respondent consented to ICSID arbitration. Therefore,

327 ibid paras 98–108. 329 ibid para 482. 331 ibid para 491.

328 ibid para 130. 330 ibid para 490.

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schreuer’s commentary on the icsid convention it relates to the question of admissibility and not to the question of jurisdiction. It will thus be addressed below when dealing with admissibility issues.332

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The Tribunal concluded that the claims were admissible because the ‘procedure necessary to deal with the Claimants’ claims in a collective way is admissible and acceptable’ both under the ICSID Convention and Arbitration Rules, as well as ‘under the more general spirit, object and aim of the ICSID Convention.’333 With respect to the examination of the claims in a collective way, the Tribunal added: It appears that the effect of such examination method and procedure on Argentina’s defense rights is limited and relative. Whilst it is true that Argentina may not be able to enter into full length and detail into the individual circumstances of each Claimant, it is not certain that such approach is at all necessary to protect Argentina’s procedural rights in the light of the homogeneity of Claimants’ claims. In addition, the only alternative would be to conduct 60,000 separate proceedings. The measures that Argentina would need to take to face 60,000 proceedings would be a much bigger challenge to Argentina’s effective defense rights than a mere limitation of its right to individual treatment of homogeneous claims in the present proceedings.334

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Two subsequent ICSID cases, Ambiente Ufficio and others v Argentina and Alemanni and others v Argentina, addressed the same issue of multiple claimants. In Ambiente Ufficio, the initial number of Claimants was 119, eventually reduced to 90. The case was also submitted under the Argentina–Italy BIT and the dispute related to bonds issued by Argentina on which it had defaulted.335 The Ambiente Ufficio tribunal explicitly recognized ‘the substantial parallels between the present case and the Abaclat case’ and concluded that ‘it would be artificial for this Tribunal to ignore the Decision taken by its sister Tribunal.’336 Like the Abaclat tribunal, the Ambiente Ufficio tribunal found that it had jurisdiction over the claims and that they were admissible. Nevertheless, the Ambiente Ufficio tribunal approached the matter in a somewhat different way. It rejected the labels ‘mass claim,’ or ‘class action,’ in favor of the factually objective descriptions ‘multiple claimants,’ or ‘multi-party proceeding,’ and treated the matter as a question going to the scope of the ICSID Convention and the scope of the Respondent State’s specific consent under the BIT. It explained why no additional consent was necessary in that case: Having concluded that the present dispute constitutes a multi-party proceeding, a further conceptual clarification is in place: A multi-party proceeding can be the result of the initial submission of a certain number of separate individual arbitrations which are subsequently consolidated and joined with each other. There can be no doubt that such an ex post joinder or consolidation of proceedings is subject to a specific consent of the Parties. . . . The present dispute is not a case of consolidation of proceedings, however, but the original submission of a claim by a plurality of Claimants in one single ICSID proceeding.337

332 334 335 336

ibid para 492. 333 ibid para 547. ibid para 545. Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 1. ibid para 10. 337 ibid paras 123–124.

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The Ambiente Ufficio tribunal added a further reason why it was appropriate to consider the claims jointly:

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On that basis, the present Tribunal considers that Claimants are correct in arguing that the necessary link among them exists in terms of the treaty claim they jointly submit in the present arbitration. Thus, they are right to point out that they complain about the same illegality which the Respondent is said to have committed against them all. They base their claim on the same provisions of the Argentina–Italy BIT as well as the ICSID Convention and they have made identical prayers of relief, i.e. indemnification under the BIT for the acts allegedly committed by the Respondent. In addition, they claim that the factual background on the basis of which the Claimants seek to establish their claim is virtually the same for all Claimants.338

In Alemanni, the initial number of the Claimants (also Italian holders of Argentine bonds) was 183, which was eventually reduced to 74.339 The Alemanni tribunal also acknowledged ‘benefitting from the comprehensive analyses on the record from the Abaclat and Ambiente Ufficio tribunals.’340 It emphasized, however, that

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the present proceedings are not of a representative character; each Claimant claims in his own name, advancing his own personal loss in respect of his own identified investment. It is not a case in which a person claims to represent the interests of others, as well as his own, or in which an attorney claims or seeks authority to act on behalf of persons who have not instructed him.341

The Alemanni tribunal took a somewhat different approach. It first addressed the issue under the ICSID Convention and stated:

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[T]he question to be answered in this case is: are the words ‘dispute arising directly out of an investment, between a Contracting State . . . and a national of another Contracting State’ as they appear in Article 25(1) of the ICSID Convention to be understood as meaning ‘dispute between a Contracting State and one, but only one, national of another Contracting State’? Once it is correctly posed, it seems to the Tribunal that the question at issue answers itself. The Tribunal can see no reasonable basis for implying into the text as it stands of Article 25(1) the additional words ‘but only one.’342

The Tribunal then turned to the scope of consent under the BIT. The Tribunal asked the question whether the actual rights of all of the Claimants (under Argentine law and such rules of international law as may be applicable) and whether the actual effect (under Argentine law and such rules of international law as may be applicable) on those rights (or associated expectations) of Argentina’s conduct were sufficiently the same as to amount to a single ‘dispute’ over Argentina’s obligations under the BIT, even within

338 ibid para 161 (emphasis in the original). In a strongly worded Dissenting Opinion, Arbitrator Torres Bernárdez concluded that the Tribunal had no jurisdiction over the multiparty claims action instituted by the Claimants in the absence of Argentina’s consent to such multiparty claims. 339 Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) para 1. 340 ibid para 261. 341 ibid para 267. 342 ibid paras 270–271.

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schreuer’s commentary on the icsid convention the broad and non-technical understanding of a ‘dispute’ that is appropriate to Article 8 of the BIT read in conjunction with Article 25 of the ICSID Convention.343

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That question, in the view of the Tribunal, was so closely entwined with the substantive disagreement between the parties, both factual and legal, that it had to be joined to the merits.344 The Tribunal however never reached the merits because the proceeding was discontinued.345 Most recently, the Tribunal in Adamakopoulos and others v Cyprus concluded that a separate consent to mass claims was not required ‘over and above the consent given by a state to the jurisdiction of an investment tribunal when it became party to the BIT’ and that the ‘notion of double or dual consent finds no basis in the relevant BITs.’346 According to the Adamakopoulos tribunal, the first step was to determine whether there was jurisdiction over the individual claims; the second step, however, was to decide whether those individual claims could be ‘put together as a single “mass claim,”’347 or, in other words, whether the claims could be ‘regarded as a single dispute.’348 The Tribunal observed that there was a ‘substantial unity’ or ‘similarity’ in the claims and the alleged breaches, and they all related to identical measures.349 On that basis, the Tribunal did not see the fact that two separate BITs had been invoked as a barrier to the case ‘being considered as a single dispute.’350 The Adamakopoulos tribunal found that the real issue in the case was the large number of Claimants (956), which related to the ‘manageability’ of the case; the Tribunal considered this to be a matter of admissibility rather than jurisdiction.351 Following a careful review of key procedural steps, the Tribunal concluded that the claims were ‘manageable’ within the ICSID framework, and therefore admissible.352

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It is beyond doubt that the exclusive remedy rule of Art. 26 also operates in relation to proceedings before domestic courts. Therefore, turning to domestic proceedings, instead of ICSID, after ICSID arbitration is agreed, would clearly be impermissible unless this has been ‘otherwise stated’ between the parties. Delaume has succinctly expressed the duties of a court in this situation: If a court in a Contracting State becomes aware of the fact that a claim before it may call for adjudication under ICSID, the court should refer the parties to ICSID to seek a ruling on the subject. Until such a ruling is made, if the possibility exists that the claim may fall within the jurisdiction of ICSID, the court must stay the proceedings pending proper determination of the issue by ICSID. Only in the event of an adverse decision by ICSID, which, for example, may result from the Secretary-General’s refusal to register a request for arbitration or from a decision of an ICSID arbitral tribunal that the issue involved does not fall within its competence, may the court in question resume hearing

343 345 346 347 349 351

ibid para 293. 344 ibid. Alemanni and others v Argentina, Order on Discontinuance (14 December 2015). Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) para 201. ibid para 205. 348 ibid para 209. ibid para 210. 350 ibid para 211. ibid para 214. 352 ibid paras 247–259.

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the case, assuming, of course, that it has an independent basis for entertaining jurisdiction over the parties and the subject matter of the dispute.353

Nevertheless, problems of competing jurisdiction have arisen. At times, court proceedings may simply appear more promising to a party than ICSID arbitration. ICSID tribunals have firmly asserted their own jurisdiction when attempts were made to claim competence for domestic courts in proceedings on the merits. In a number of cases, ICSID tribunals have issued provisional measures enjoining parties from pursuing related claims in domestic courts354 (see Art. 47, paras. 145–190). In Benvenuti & Bonfant v Congo, the Government advanced the argument of lis pendens before the ICSID tribunal, in view of proceedings that were pending between the Government and Mr. Bonfant before the Revolutionary Tribunal of Brazzaville. The ICSID tribunal declared that there could only be a case of lis pendens where there was identity of the parties, object, and cause of action in both proceedings. Those conditions were not satisfied, since the case before the ICSID tribunal was between B&B and the Government, and not between Mr. Bonfant and the Government.355 In LETCO v Liberia, domestic proceedings were used in an attempt to evade ICSID arbitration. The Respondent Government not only failed to participate in the proceedings before ICSID, but after their initiation also instituted proceedings in its own courts against the Claimant in respect of the same dispute. The Tribunal left no doubt as to the impropriety of this course of action. In awarding costs incurred for carrying out the arbitration, it took account of Liberia’s lack of cooperation.356 In Holiday Inns v Morocco, the Tribunal also dealt with the relationship between ICSID arbitration and domestic court proceedings. While dispute settlement clauses referred certain aspects of the overall relationship to domestic courts, the Tribunal ruled in favor of its jurisdiction with respect to the overarching dispute by relying on the general unity of the investment operation (see paras. 58–60 supra). In Amco v Indonesia, proceedings were pending before the domestic courts of Indonesia, when ICSID arbitration was instituted by Amco, claiming damages for the seizure of its investment and cancelation of its investment license by Indonesia. The domestic proceedings had been initiated by P.T. Wisma, a company indirectly controlled by the Indonesian government. In the ICSID arbitration, Indonesia argued that the Claimants had waived any right to have their claim heard by an ICSID tribunal, since they had cooperated in the domestic proceedings and had not requested a stay of those proceedings so that the matter could be brought before ICSID for arbitration. The first Tribunal, in its Decision on Jurisdiction, rejected this contention for two reasons. It pointed out that the parties to the two lawsuits were not identical. In addition,

353 Georges R Delaume, ‘ICSID Arbitration in Practice’ (1984) 2 Int’l Tax & Bus Lawyer 58, 68 (footnote omitted). See also Georges R Delaume, ‘Foreign Sovereign Immunity: Impact on Arbitration’ (1983) 38 The Arb Journal 34, 38; Delaume (n 2) 785. 354 MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 69; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 9; SGS v Pakistan, Procedural Order No 2 (16 October 2002) (2005) 8 ICSID Reports 388; Zhinvali v Georgia, Award (24 January 2003) para 45; Tokios Tokelės v Ukraine, Procedural Order No 1 (1 July 2003). 355 This decision of 19 January 1979 is unpublished. It is summarized in Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 1.12–1.14. 356 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 356, 378.

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the issue in the domestic proceedings was simply a lease dispute which was not the object of the international arbitration.357 In its decision on the merits, the first Tribunal returned to the Indonesian court proceedings in some detail.358 It found that they did not constitute a denial of justice and therefore did not give rise to international responsibility of the State.359 But the domestic decisions were not binding on the Tribunal. The Tribunal said: In any case, an international tribunal is not bound to follow the result of a national court. One of the reasons for instituting an international arbitration procedure is precisely that parties – rightly or wrongly – feel often more confident with a legal institution which is not entirely related to one of the parties. If a national judgment was binding on an international tribunal such a procedure could be rendered meaningless. Accordingly, no matter how the legal position of a party is described in a national judgment, an international arbitral tribunal enjoys the right to evaluate and examine this position without accepting any res judicata effect of a national court. In its evaluation, therefore, the judgments of a national court can be accepted as one of the many factors which have to be considered by the arbitral tribunal.360

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After the annulment of the first Award in Amco v Indonesia, when the second ICSID Tribunal rendered its Award in the resubmitted case, it found that a confirmation of the lower court decisions by the Indonesian Supreme Court after the first ICSID award could not be accepted as novus actus interveniens.361 It follows that failure of a party to protest the institution of domestic proceedings, and to insist on the exclusive nature of ICSID arbitration, may be interpreted as a waiver of the exclusive remedy principle contained in Art. 26. However, this does not in any way amount to a renunciation of ICSID jurisdiction. Even less does it mean that an ICSID tribunal would be bound by a finding of a domestic court in matters falling within the former’s jurisdiction. This does not preclude an ICSID tribunal from taking into account, or relying on, decisions of domestic courts, especially where the applicable law, in accordance with Art. 42, is the law of the domestic court’s forum State. In CSOB v Slovakia, a Slovak ‘Collection Company’ defaulted on payments that were due to the Claimants. These payments were secured by a guarantee of the Slovak Ministry of Finance to cover any losses of the Collection Company (see Art. 25, paras. 138–139). Parallel to the proceedings before the ICSID tribunal, there were bankruptcy proceedings against the Collection Company in Slovak courts. The Tribunal issued provisional measures under Art. 47, recommending that the bankruptcy proceedings be suspended to the extent that they might lead to determinations as to whether the Collection Company had a valid claim against the Slovak Republic to cover its losses and as to whether it had made any losses (see Art. 47, paras. 151–154).362

357 358 359 360

Amco v Indonesia, Decision on Jurisdiction (25 September 1983) paras 50–52. Amco v Indonesia, Award (20 November 1984) paras 131–141. ibid para 150. ibid para 177. Therefore, the opinions expressed in the domestic decisions were in no way binding in the international proceedings, see ibid para 263. 361 Amco v Indonesia, Resubmitted Case: Award (5 June 1990) paras 146–153. 362 CSOB v Slovakia, Procedural Orders No 4 (11 January 1999) and No 5 (1 March 2000).

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In Autopista v Venezuela, the Claimant argued that the Respondent’s resort to the Venezuelan Supreme Court of Justice to obtain a declaration of termination of the relevant agreement represented a breach of the arbitration clause contained in that agreement, which provided for ICSID arbitration.363 The Respondent contended that its action could not represent a breach, because the law governing the agreement, that is, Venezuelan law, reserved to the Venezuelan courts any issues relating to the termination of the agreement.364 The Tribunal referred to the dispute settlement clause contained in the agreement and to its own Decision on Jurisdiction, which demonstrated that its jurisdiction included issues relating to the termination of the contract.365 The Tribunal further noted that the dispute settlement clause referred all disputes under the agreement exclusively to ICSID arbitration and held as follows:

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By entering into such an exclusive arbitration agreement, both parties have accepted to refrain from proceeding before a court which is not the one jointly entrusted with the resolution of the dispute. As long as jurisdiction is challenged and not decided upon, an argument may be made that a party has a right to proceed elsewhere. However, that argument cannot be maintained after a decision affirming jurisdiction was issued. In the present case, the proceedings before the Supreme Court were initiated after the Decision on Jurisdiction had been rendered.366

The Tribunal added that the fact that the governing law of the agreement appeared to refer matters relating to the termination of the contract to the jurisdiction of the local courts did not change this position. The Tribunal observed in this respect:

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Further, it is a well settled principle of international law that a state cannot rely on a provision of its domestic law to defeat its consent to arbitration. It is further a well accepted practice that the national law governing by virtue of a choice of law agreement (pursuant to Article 42(1) first sentence of the ICSID Convention) is subject to correction by international law in the same manner as the application of the host state law failing an agreement (under the second sentence of the same treaty provision). As a result, Venezuela’s defense based on national law is no bar to Aucoven’s claim of a breach of Clause 64.367

In TANESCO v IPTL, the Respondent filed a petition in the High Court of Tanzania at Dar Es Salaam, against the Claimant and three officials of the Government, a few days after the request for arbitration in the ICSID proceeding was filed. When the Claimant sought a stay of the court proceedings, the Respondent filed further submissions, arguing that the Claimant had waived its right to pursue ICSID arbitration.368 The High Court of Tanzania decided in favor of IPTL on the merits, but eventually IPTL agreed not to execute the amount due under the Court’s order for a limited period of time.369 The question whether the domestic proceedings were consistent with Art. 26 of the ICSID Convention remained unresolved. Although the Claimant filed a request for provisional measures partly related to the Tanzanian court proceedings, the parties later 363 364 366 367 368 369

Autopista v Venezuela, Award (23 September 2003) para 200. ibid para 201. 365 ibid para 202. ibid para 205. ibid para 207 (internal references to the First Edition of this Commentary omitted). TANESCO v IPTL, Award (12 July 2001) paras 21–23. ibid para 25.

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requested the Tribunal to defer consideration of this matter, which was thus not addressed in the Tribunal’s Decision on provisional measures.370 In Wena Hotels v Egypt, domestic proceedings were initiated after the ICSID tribunal had rendered its Award. Therefore, the issue was not a matter of concurrent proceedings, but rather of the ICSID award’s effect as res judicata. The Tribunal found that Egypt’s actions had amounted to an expropriation.371 Wena sought the Award’s interpretation, claiming that, despite the Award’s conclusion that Egypt had expropriated Wena’s rights under lease and development agreements, recent legal actions undertaken by Egypt and its constituent entities against Wena raised questions about that finding.372 Wena argued that legal proceedings initiated by a company owned and controlled by the Egyptian State seeking payment of rent due under the agreements overlooked the Tribunal’s finding that Egypt had expropriated Wena’s interests. In its Request for Interpretation, Wena requested the Tribunal to indicate whether the expropriation constituted a total and permanent deprivation of Wena’s rights, such as to preclude subsequent legal actions by Egypt that presumed the contrary.373 In its response, Egypt sought to distinguish the BIT dispute – resolved by the Tribunal’s Award – from the other disputes concerning the lease which, in its view, were left for another forum.374 The Tribunal observed that the Award did not refer to an expropriation of Wena’s rights, but rather stated that Egypt’s actions amounted to an expropriation of Wena’s investments.375 However, the Tribunal also noted as follows: It is true that the Original Tribunal did not explicitly state that such expropriation totally and permanently deprived Wena of its fundamental rights of ownership. However, in assessing the weight of the actions described above, there was no doubt in the Tribunal’s mind that the deprivation of Wena’s fundamental rights of ownership was so profound that the expropriation was indeed a total and permanent one.376

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In the circumstances, the Tribunal found that Egypt was ‘precluded from legal actions that would presume the contrary of the Tribunal’s determinations in the Award.’377 In EDF v Argentina, Argentina contended that certain claims were barred from adjudication by the Tribunal because they were contractual in nature and had been ruled on by Argentine courts.378 The Tribunal rejected the objection and stated: 1131. Multiple sources of law may apply to a single set of facts, as is the case with the facts of the Pre-Emergency Measures affecting the concession. While Argentina’s national courts may have made decisions pursuant to national laws, the France BIT still furnishes Claimants the opportunity to seek redress before an international tribunal for violations of rights established under international law. 1132. Furthermore, it is generally accepted that an identity requirement must be satisfied in order for a tribunal to take into account the decisions of national courts. As

370 371 372 373 375 377 378

ibid paras 29–31. Wena Hotels v Egypt, Award (8 December 2000) para 131. Wena Hotels v Egypt, Decision on Interpretation (31 October 2005) paras 6–7. ibid para 33. 374 ibid paras 38–41. ibid para 112. 376 ibid para 120. ibid para 125. EDF v Argentina, Award (11 June 2012) para 1123.

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Claimants explain, there is a notable absence of the requisite parity relating to the parties, cause of action, and applicable legal standards between the claims brought in local courts by Claimants and those currently before this Tribunal. This lack of parity precludes satisfaction of the identity requirement in res judicata or lis pendens, rendering Respondent’s defense in this respect moot.379

In UAB v Latvia, Latvia applied for a stay of the ICSID arbitration on the basis of pending proceedings in Latvian courts. The Tribunal concluded that the application was without foundation.380 It observed that: (i) the parties to the Latvian proceedings and the parties to the ICSID arbitration proceedings were not the same; (ii) the issues arising in the ICSID proceedings were not the same as those arising in the Latvian proceedings, because the domestic proceedings were brought under a contract; (iii) the fact that there might be an overlap between contract claims and treaty claims was not sufficient per se to warrant a stay of proceedings;381 and (iv) the Respondent’s complaint that the Claimant had been ‘actively and selectively seeking procedural remedies in the Latvian courts’ was without foundation because the Latvian proceedings had been brought by an agency of the Respondent.382 In sum, ICSID tribunals have consistently accepted jurisdiction and rejected lis pendens arguments based on parallel domestic court proceedings. In doing so, tribunals have relied on the difference between the disputes pending in domestic courts and those submitted to international arbitration, such as parties, object, and cause of action. Tribunals have applied the same analysis when the parallel proceedings have been domestic arbitrations rather than domestic court proceedings. For example, in Railroad Development Corp v Guatemala, the Respondent raised an objection based on parallel arbitration proceedings in Guatemala.383 The Tribunal stated:

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The issue for the Tribunal is whether the instant dispute may be differentiated from the disputes in the local arbitration proceedings. For this purpose, the Tribunal finds guidance in arbitral practice related to lis pendens. In Benvenuti & Bonfant the tribunal held that ‘there could only be a case of lis pendens where there was identity of the parties, object and cause of action in the proceedings pending before both tribunals.’384

The Tribunal concluded that the cause of action was based on the Treaty and not on the contracts at issue in the domestic arbitration and that the parties to the dispute were different.385 In Helnan v Egypt, the Respondent objected to the admissibility of Helnan’s claims on the grounds that they ‘almost duplicate its counterclaims’ in the domestic arbitration and thus ‘the entire debate belonged to the contractual forum,’ and that the domestic award was res judicata.386 The domestic arbitration was not ‘parallel’ in the sense that it had already concluded with an award, but the analysis of the Tribunal was very similar to the analyses performed by tribunals facing parallel proceedings. According to the Tribunal, while there was no doubt that the domestic award was a binding and final award, and that it was res judicata within the Egyptian legal order, it did not follow that 379 380 381 383 384 386

ibid paras 1131–1132. UAB v Latvia, Award (22 December 2017) para 566. ibid paras 567–569. 382 ibid para 570. Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010) paras 84–85. ibid para 131. 385 ibid para 132. Helnan v Egypt, Award (3 July 2008) para 121.

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this was the case in the international legal order.387 The Tribunal found that ‘there is no effect of res judicata from the decision of a municipal court so far as an international jurisdiction is concerned,’ because ‘although the subject matter may be substantially the same, the causes of action are different.’388 The Tribunal stated further: For an earlier final decision, issued by a competent court or arbitral tribunal, to be conclusive in subsequent proceedings, three cumulative basic conditions must be met: identity of parties, identity of subject matter or relief sought and identity of legal grounds or causes of actions. This is largely accepted. Those three cumulative conditions are not met in the instant case.389

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Moreover, the Tribunal observed that the parties to the domestic arbitration proceedings, and the parties to the ICSID arbitration, were not the same,390 that the relief sought in each of the two proceedings was not fully identical, and that there was no identity at all of the legal grounds or causes of actions.391 In United Utilities v Estonia, the second Claimant was seeking remedies before the Estonian courts relating to the same facts as the ICSID arbitration. Estonia argued that the exclusivity principle under Art. 26 of the ICSID Convention was a prerequisite for ICSID’s jurisdiction and that a breach of Art. 26 would deprive ICSID of any jurisdiction.392 The Tribunal found that the proceedings before it and the domestic proceedings were not substantially the same. The case before the ICSID tribunal concerned international obligations, whereas the proceedings before the Estonian courts concerned questions of Estonian law. Therefore, the tribunal said, Art. 26 of the ICSID Convention ‘simply does not enter into play.’393

5. Intervention by Domestic Courts to Stay ICSID Arbitration 255

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ICSID proceedings are even more immediately affected where domestic courts do not deal with the merits of the case, but purport to enjoin the parties from instituting, or proceeding with, ICSID arbitration. In some cases, parties have resorted to national courts to oppose ICSID proceedings. This is usually done through measures known as ‘anti-suit injunctions.’ The question is central not only to the principle of the exclusive jurisdiction of ICSID tribunals under Art. 26, but also to the power of an arbitral tribunal to be the judge of its own competence under Art. 41(1).394 In Attorney-General v Mobil Oil NZ Ltd.,395 the Government and the foreign investor had entered into an agreement in 1982 granting Mobil certain favorable ‘offtake rights.’ The agreement contained an ICSID arbitration clause. Subsequent legislation purported

387 389 391 392 393 394

ibid para 123. 388 ibid para 124. ibid para 126. 390 ibid para 127. ibid para 128. United Utilities v Estonia, Award (21 June 2019) para 450. ibid paras 464–465. Konstantinos D Kerameus, ‘Anti-Suit Injunctions in ICSID Arbitration’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris 2005) 131. See more generally Jan Paulsson, ‘Interference by National Courts’ in Lawrence W Newman and Richard D Hill (eds), The Leading Arbitrators’ Guide to International Arbitration (3rd edn, Juris 2014) 33. 395 Attorney-General v Mobil Oil NZ, New Zealand, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117, [1987] 2 NZLR 649, (1987) 2 ICSID Rev 497. See also Broches (n 2) 8 ff.

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to affect these favorable rights. Mobil referred the matter to ICSID arbitration. After the case had been properly registered with ICSID in accordance with Art. 36(3), the Government commenced injunction proceedings in the New Zealand courts, seeking to restrain Mobil from continuing to refer the dispute to ICSID. Mobil, in turn, applied for a stay of those injunction proceedings, relying on Sec. 8 of the Arbitration (International Investment Disputes) Act of 1979, which is designed to give effect to the ICSID Convention in New Zealand.396 Sec. 8 provides that a court may order a stay of domestic judicial proceedings in respect of matters relating to the Convention, if it is satisfied that there is no sufficient reason why the matter should not be dealt with under the Convention. The Government claimed that there was no dispute under the 1982 agreement, but only an essentially domestic dispute relating to the ‘offtake rights’ and the subsequent legislation. The New Zealand High Court disagreed with the attempt to separate the allegedly domestic from the international aspects of the case:

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Having regard to the interlocking considerations which obviously must apply in a contract of this magnitude and complexity, to isolate one aspect of the investment which is possibly largely domestic, and advance that as a ground for applying domestic rather than international principles, ignores the overall impact of the contract.397

Moreover, the High Court found that the question was a matter that amounted to a dispute under the 1982 agreement and that either party was entitled to refer it to ICSID.398 Therefore, all proceedings were stayed until the ICSID tribunal had determined its jurisdiction.399 The outcome of this case is undoubtedly in full accord with the requirements of Art. 26. What is disquieting about the Court’s reasoning is the fact that it emphasized its discretion on the basis of New Zealand’s legislation, and that it considered a number of arguments in favor of and against ICSID arbitration,400 including the fact that the parties had chosen New Zealand law as the applicable law and had agreed on a New Zealand national as the chairman of the Tribunal,401 rather than paying automatic deference to the impending decision of the ICSID tribunal on its jurisdiction, as a faithful application of Art. 26 would have required. Any attempt to block an ICSID arbitration through injunctions by domestic courts is at variance with the clear mandate of the Convention and will violate that State’s international obligations under the Convention.402 396 See ‘Legislative or Other Measures Relating to the Convention (Art. 69 of the Convention)’ ICSID/8-F (July 2020) 7 in ICSID, ‘Contracting States and Measures Taken by them for the Purpose of the Convention’ ICSID/8 (July 2020). The Act was amended in 2000. 397 Attorney-General v Mobil Oil NZ, New Zealand, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117, 135. 398 ibid 133. 399 ibid 139. The Crown subsequently informed the ICSID Tribunal that it no longer wished to challenge its jurisdiction. See Mobil Oil v New Zealand, Findings on Liability, Interpretation and Allied Issues (4 May 1989) para 2.9. 400 See Attorney-General v Mobil Oil NZ, New Zealand, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117, 133 ff. 401 ibid 129. 402 Stephen M Schwebel, ‘Anti-Suit Injunctions in International Arbitration – an Overview’ in Gaillard (n 394) 5, 12. See also Christopher J Greenwood, ‘Anti-Suit Injunctions in International Arbitration: A Public International Lawyer’s Perspective’ in Gaillard (n 394) 147, 150.

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In SGS v Pakistan, the dispute arose from a contract (the PSI Agreement) containing a dispute resolution clause providing for arbitration in Pakistan. Pakistan terminated the PSI Agreement and started arbitration proceedings under the arbitration clause in the PSI Agreement. SGS filed a request for arbitration with ICSID, alleging that Pakistan had expropriated its investment and violated a number of standards under the Pakistan– Switzerland BIT. SGS also applied to the Pakistani court for an injunction against the PSI arbitration initiated by the Respondent in Pakistan, arguing that ICSID had exclusive jurisdiction over the claim. For its part, Pakistan filed a petition with the Pakistani courts to enjoin SGS from proceeding with the ICSID arbitration and sought to hold SGS in contempt of court for pursuing the ICSID arbitration. The Supreme Court of Pakistan eventually granted Pakistan’s request to proceed with the Pakistani arbitration and restrained SGS from pursuing or participating in the ICSID arbitration.403 SGS reacted by introducing two requests for provisional measures before the ICSID tribunal (see Art. 47, paras. 157–163). The first of these requests was for a withdrawal of the judicial proceedings initiated before the Pakistani courts, including Pakistan’s request for a stay of the ICSID arbitration and its application for SGS to be held in contempt of court. SGS’s second request was that the local Pakistani arbitration be stayed until the ICSID tribunal rendered a decision on jurisdiction. The Tribunal granted both requests and stressed that any ICSID tribunal is the judge of its own competence pursuant to Art. 41 of the Convention.404 On that basis, although the Tribunal recognized that the judgment of the Supreme Court of Pakistan was final and binding as a matter of Pakistani law, it also stated that, as a matter of international law, it was not binding on the Tribunal. The Tribunal also held that the right of access to international adjudication must be preserved and cannot be constrained by an order of a national court. Thus, while recognizing that the judgment of the Supreme Court of Pakistan was final, the Tribunal also requested the Respondent not to act on its earlier complaint of an alleged breach of the Court’s stay or to file a new complaint.405 The Tribunal’s procedural order carefully weighed the parties’ respective concerns in the light of the procedural history of the case, and recommended a provisional stay of the Islamabad-based arbitration until a decision was rendered on the Tribunal’s jurisdiction. It should be noted that the Tribunal also requested that a copy of the order be transmitted to the Pakistani arbitrator so that he could be fully informed of the status of the ICSID proceedings.406 In Agility v Pakistan, the Claimant applied for urgent provisional measures in connection with court proceedings in Pakistan, where the Respondent had sought to enjoin the Claimant from continuing with the ICSID arbitration. The Claimant asked that the Tribunal order Pakistan to withdraw, or cause to be discontinued, all domestic proceedings relating to the arbitration. In its Procedural Order No. 1, the Tribunal

403 SGS v Pakistan, Supreme Court of Pakistan, Judgment (3 July 2002) (2005) 8 ICSID Reports 356, also reproduced in Gaillard (n 394) 183. See also SGS v Pakistan, Procedural Order No 2 (16 October 2002) (2005) 8 ICSID Reports 388 and ibid, Decision on Jurisdiction (6 August 2003) para 39. 404 SGS v Pakistan, Procedural Order No 2 (16 October 2002) (2005) 8 ICSID Reports 388. 405 ibid 393–394. 406 ibid 397.

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determined that it was the proper entity to determine any questions of jurisdiction and ordered the Respondent to immediately withdraw and cause to be discontinued any proceedings in the courts of Pakistan seeking to restrain the Claimant from proceeding with these arbitration proceedings or otherwise seeking a stay of this arbitration [and to] . . . refrain from commencing or participating in any such proceeding in the future.407

As discussed earlier (see paras. 24–25 supra), in Casinos Austria, the Claimants’ local subsidiary had initiated proceedings in local courts. Art. 8(4) of the Argentina– Austria BIT required disputing parties to take all necessary measures to withdraw from any pending judicial proceedings. The Tribunal held that the Claimants could not be required to withdraw from the domestic proceedings before the Tribunal reached a decision that it had jurisdiction, and took note of the Claimants’ undertaking that, once a positive decision on jurisdiction was arrived at by the Tribunal, they would take all measures to withdraw from the domestic proceedings.408 The Casinos Austria tribunal further concluded that, pursuant to Art. 26 of the ICSID Convention, pending parallel proceedings in another forum had no effect on the jurisdiction or admissibility of the ICSID arbitration; quite the opposite: the parties’ consent to ICSID arbitration remained unaffected by the existence of parallel proceedings in another forum.409

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6. Provisional Measures by Domestic Courts in ICSID Arbitration Provisional measures ordered by domestic courts are a common feature of international commercial arbitration.410 The question whether domestic courts are permitted to order such measures in the context of ICSID arbitration used to be a controversial subject in the interpretation of Art. 26.411 Provisional measures may be initiated by the host State, usually in its own courts, or by the foreign investor, usually in the courts of another State. Art. 47 provides for provisional measures to be recommended by an ICSID tribunal itself in order to preserve the respective rights of the parties (cf. also Arbitration Rule 39). The controversy surrounding the power of domestic courts to order provisional measures was usually phrased in terms of whether the power of the ICSID tribunal under Art. 47 is exclusive or not.412

407 See Agility v Pakistan, Decision on Jurisdiction (27 February 2013) paras 32–37 (quoting the Tribunal’s Procedural Order No 1). 408 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 333. 409 ibid para 334. 410 See ICC Arbitration Rules (2021) Art. 28(2); UNCITRAL Arbitration Rules (2013) Art. 26(9); UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Art. 9. See also Stephen J Toope, Mixed International Arbitration (Grotius 1990) 190–196; Charles N Brower and W Michael Tupman, ‘Court-Ordered Provisional Measures under the New York Convention’ (1986) 80 AJIL 24. 411 Emmanuel Gaillard and John Savage (eds), Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer Law International 1999) para 1309. 412 For comprehensive treatment of this question, see Charles N Brower and Ronald EM Goodman, ‘Provisional Measures and the Protection of ICSID Jurisdictional Exclusivity against Municipal Proceedings’ (1991) 6 ICSID Rev 431; Lawrence Collins, ‘Provisional and Protective Measures in International Litigation’ (1992–III) 234 RdC 98; Paul D Friedland, ‘Provisional Measures and ICSID

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It should be pointed out that this disagreement as to the power of domestic courts to order provisional measures does not extend to measures designed to safeguard evidence in the course of ICSID arbitration. While early on, the exclusive power of an ICSID tribunal to make ‘discovery orders’ or to take similar procedural action under Art. 43 was uncontested,413 subsequent developments have recognized that domestic courts can play a role in safeguarding and preserving evidence necessary for the purposes of international arbitration. One example is the possibility to turn to courts to obtain evidence in aid of international arbitration under Section 1782 of Title 28 of the United States Code.414 The full name of Section 1782 is ‘Assistance to foreign and international tribunals and to litigants before such tribunals’ and it allows, inter alia, a US court to order discovery, including producing documents or providing testimony, for use in a proceeding in an international tribunal, which many (but not all) US courts have interpreted to include international arbitration. The US court may enter such an order not only upon the request of the international tribunal, but also upon the application of ‘any interested person,’ for example, a party to the arbitration proceeding.415 One of the best-known examples is the resort to Section 1782 by Chevron in connection with its ICSID arbitration against Ecuador and domestic litigation proceedings in Ecuador. In that case, the US court ordered the production of documents and the obtaining of evidence through depositions.416 The travaux préparatoires of the ICSID Convention are silent on the question of provisional measures by domestic courts in support of ICSID arbitration. Judicial practice does not provide clear guidance. The decisions of domestic courts and of ICSID tribunals are uneven and somewhat contradictory. Scholarly opinion was sharply divided. However, as discussed further below (see paras. 284–286 infra), a 1984 amendment to the ICSID Arbitration Rules has clarified the situation for arbitrations filed after that date and the controversy seems to have disappeared.

Arbitration’ (1986) 2 Arb Int’l 335; Paul D Friedland, ‘ICSID and Court-Ordered Provisional Remedies: An Update’ (1988) 4 Arb Int’l 161; Bertrand P Marchais, ‘ICSID Tribunals and Provisional Measures: Introductory Note to Decisions of the Tribunals of Antwerp and Geneva in MINE v Guinea’ (1986) 1 ICSID Rev 372; Bertrand P Marchais, ‘Mesures provisoires et autonomie du système d’arbitrage CIRDI’ (1988) 14 Droit et Pratique du Commerce International 275; Antonio R Parra, ‘The Practices and Experience of ICSID’ in Conservatory and Provisional Measures in International Arbitration (ICC 1993) 37; Ibrahim FI Shihata and Antonio R Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 322 ff; Domenico Pauciulo, ‘Provisional Measures in ICSID Arbitration Proceedings: Between the Current Legal Framework and the Proposed Reform’ in Fulvio M Palombino, Roberto Virzo and Giovanni Zarra (eds), Provisional Measures Issued by International Courts and Tribunals (Springer 2020) 319. 413 Emmanuel Gaillard, ‘Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI). Chronique des sentences arbitrales’ (1988) 115 JDI 165, 188; Marchais, ‘Mesures provisoires’ (n 412) 298 ff. 414 See 28 USC § 1782. 415 ibid. 416 See In re Application of Chevron Corp, Case No 10 MC 00002 (LAK) (SDNY, 20 October 2010 and 4 November 2010). See also Servotronics, Inc v Rolls Royce Plc and the Boeing Company, Case No 191847 (7th Cir, 22 September 2020) 8; In re Application and Petition of Hanwei Guo, Case No 19-781 (2d Cir, 8 July 2020) 19–20.

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a) Judicial Practice In Holiday Inns v Morocco,417 after the initiation of ICSID arbitration, the Respondent turned to the Moroccan courts and obtained provisional measures authorizing the Government to take the necessary steps to resume and complete construction of the hotels at the Claimants’ cost and to appoint a judicial administrator. The Claimants relied on Arts. 26 and 47 to protest these measures by domestic courts to the ICSID tribunal. Morocco claimed sole jurisdiction of its courts for the provisional measures. These contentions met with a somewhat vague reply by the Tribunal in a decision on provisional measures.418 While affirming its power under Art. 47 to recommend provisional measures, the Tribunal merely held that ‘the Parties are under an obligation to abstain from all measures likely to prevent definitely the execution of their obligations’419 (see Art. 47, paras. 46, 225, 226). In MINE v Guinea,420 attachment proceedings in domestic courts were initially instituted by the Claimant to enforce the AAA award, shortly after ICSID proceedings had been instituted (for details, see paras. 9–19 supra). The decision by the Belgian Court and the early decisions of the Swiss Courts, therefore, did not concern provisional measures in the context of the ICSID arbitration. The Tribunal’s ruling on provisional measures of 4 December 1985 was also primarily directed at MINE’s attempt to enforce the AAA award. Nevertheless, the Tribunal, after dealing with the proceedings based on the AAA award, added:

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The Tribunal further recommends that MINE dissolve every existing provisional measure obtained in litigation in national courts (including attachment, garnishment, sequestration, or seizure of the property of Guinea, by whatever term it is designated and by whatever means obtained) and that MINE seek no new provisional remedy in a national court.421

After the Court of First Instance of Geneva had refused to confirm the attachments for the purpose of enforcing the AAA award, MINE sought to maintain them as provisional measures in the context of the pending ICSID proceedings. The Supervisory Authority of the Office des Poursuites for the Enforcement of Debts and Bankruptcy of Geneva was quite unequivocal in rejecting this attempt. In doing so, it relied on Art. 26 of the ICSID Convention and on the Tribunal’s decision on provisional measures of 4 December 1985.422

417 See Lalive (n 60) 132 ff; Marchais, ‘Mesures provisoires’ (n 412) 287 ff; Friedland, ‘Provisional Measures’ (n 412) 340 ff. 418 See Lalive (n 60) 136; Parra (n 412) 42. 419 Holiday Inns v Morocco, Decision on Provisional Measures (2 July 1972) (as reported in Lalive (n 60) 136). 420 See MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 68. See also Friedland, ‘Provisional Measures’ (n 412) 345 ff, 352 ff; Marchais, ‘Mesures provisoires’ (n 412) 284 ff. 421 The Ruling on Provisional Measures of 4 December 1985 is unpublished. The citation is taken from Guinea v MINE, Autorité de surveillance des offices de poursuite pour dette et de faillite, Geneva (7 October 1986) (1997) 4 ICSID Reports 45, 47. 422 ibid.

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Atlantic Triton v Guinea produced sharply conflicting decisions and has evoked considerable critical comment.423 The Claimant had obtained an order in France, attaching three vessels belonging to the Respondent before starting ICSID proceedings. Guinea appealed. The Court of Appeal of Rennes accepted Guinea’s reliance on ICSID’s exclusivity in accordance with Art. 26. The attachments were, therefore, lifted.424 In an interim decision on provisional measures rendered shortly thereafter,425 the ICSID tribunal found that a request by Guinea to direct Atlantic Triton to have the attachments lifted had been rendered moot by the French courts. The Tribunal also refused to make a general recommendation that the parties should abstain from actions in national courts. This refusal was based on the somewhat formalistic ground that the request had been based on Art. 44 of the Convention, which only deals with procedural questions. Therefore, the role of Art. 26 was not addressed. In its Award,426 the Tribunal returned to this question in the context of a claim by Guinea for damages from Atlantic Triton for having instituted abusive court proceedings to obtain the provisional measures.427 The claim was rejected. After citing Arts. 26 and 47, the Tribunal said: 2.6. While it certainly follows from the foregoing texts that the Tribunal has jurisdiction to recommend conservatory measures, it hardly follows, as obviously, that such jurisdiction should be exclusive and prohibit any recourse to national courts, traditionally and virtually universally recognized as having sole jurisdiction to order such measures.428

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When the case reached the French Cour de cassation, the actual attachments had been overtaken by events. The ships had left the port and the ICSID award had been rendered. Nevertheless, the highest French court gave a strongly worded decision, affirming the power of domestic courts to order interim measures in the course of ICSID arbitration.429 With regard to Art. 26, it said: This provision was not intended to prohibit parties from applying to a national court to seek conservatory measures in order to guarantee the execution of an award which might subsequently be given.430

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In Cable TV v St Kitts and Nevis, the Claimants sought to increase the charges for their services. The Respondent refused to permit the increase. After the Claimants had given notice of their intention to institute ICSID arbitration, the Respondent obtained an ex parte injunction from a local court, restraining and enjoining the Claimants from raising their rates prior to the completion of the ICSID arbitration. The ICSID tribunal declined jurisdiction, since there was no valid consent to jurisdiction by the Respondent 423 For a general description, see Friedland, ‘Provisional Measures’ (n 412) 343 ff; Friedland, ‘ICSID and Court-Ordered Provisional Measures’ (n 412) 162 ff; Marchais, ‘ICSID Tribunals’ (n 412) 375 ff; Marchais, ‘Mesures provisoires’ (n 412) 276 ff, 283, 289 ff. 424 Guinea v Atlantic Triton, France, Cour d’appel, Rennes (26 October 1984) (1995) 3 ICSID Reports 3. 425 On 18 December 1984, see (1995) 3 ICSID Reports 18. 426 Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 17. 427 ibid 19. 428 ibid 35 (emphases in the original). 429 Guinea v Atlantic Triton, France, Cour de cassation (18 November 1986) (1995) 3 ICSID Reports 10. 430 ibid 11.

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(see Art. 25, paras. 531, 766, 1454). It did not express an opinion as to the compatibility of the injunction with Art. 26.431 In a recent case, the London High Court granted an injunction, preventing Mr. Hamdi Akin Ipek from using funds belonging to Koza Ltd, the English subsidiary of a publicly listed Turkish mining conglomerate, to pay the costs of the ICSID arbitration dispute between his UK company and the Republic of Turkey.432 Prior to and alongside the ICSID proceedings, there has been a protracted dispute before the English courts concerning control of Koza Ltd between Mr. Ipek and Koza Altin – a member of the Koza Group, which had been placed under the control of Trustees by the Turkish Government. The Court ruled that Koza Ltd’s funds should not be used in support of the arbitration – in particular because it appeared that Mr. Ipek’s claim that he could not pay for the arbitration was based on dubious evidence: Koza Altin submitted evidence to the Court showing that Mr. Ipek and his family members had access to sufficient funds to pay for the arbitration. The Court reprimanded Mr. Ipek for failing to disclose his assets and for his refusal to cooperate to enable proper scrutiny of his asset position.433

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b) The Scholarly Debate Scholarly opinion on the permissibility of provisional measures by domestic courts in the context of ICSID arbitration was sharply divided up through the mid 1980s. The conflicting reactions to the decisions of the Court of Appeal of Rennes434 and of the Cour de cassation435 in the Atlantic Triton case were characteristic of this controversy. The primary arguments of the proponents of an independent power of domestic courts to order provisional measures in ICSID arbitration proceedings436 were as follows: s The urgency of circumstances in which a party may dispose of assets, or otherwise change a situation to the detriment of the other party, does not make it practical to wait until an ICSID tribunal is constituted and may start to act under Art. 47; s The power of an ICSID tribunal under Art. 47 is limited to a recommendation and hence inadequate; s The concept of ‘remedy’ in Art. 26 only covers decisions on the merits and not interim measures;

431 See Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 1.05, 2.20, 4.04, 4.05, 4.11, 4.15. 432 See Koza Ltd and Hamdi Akin Ipek v Koza Altin [2020] EWCA Civ 2018 (31 July 2020) para 1. The Court of Appeal, by majority judgment, dismissed the appeal brought by Koza Ltd and Mr Ipek against the injunction, see ibid paras 106–107. 433 Koza Ltd and Hamdi Akin Ipek v Koza Altin [2020] EWHC 654 (Ch) (23 March 2020). 434 See the case notes by Georges R Delaume in (1985) 24 ILM 340; Emmanuel Gaillard in (1985) 112 JDI 934; and Georges Flécheux in [1985] Revue de l’arbitrage 449. See also Friedland, ‘Provisional Measures’ (n 412) 352. 435 See notes by Emmanuel Gaillard in (1987) 114 JDI 127; Bernard Audit in (1987) 76 Revue Critique de Droit International Privé 762; Georges R Delaume, ‘Judicial Decisions Related to Sovereign Immunity and Transnational Arbitration’ (1987) 2 ICSID Rev 403, 421; Friedland, ‘ICSID and Court-Ordered Provisional Measures’ (n 412) 162 ff. 436 See esp Gaillard (n 434) and (n 435); Audit (n 435); Albert Jan van den Berg, ‘Some Recent Problems in the Practice of Enforcement under the New York and ICSID Conventions’ (1987) 2 ICSID Rev 439, 453 ff; Broches (n 2) 9. Cf also Moshe Hirsch, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Martinus Nijhoff 1993) 159 ff.

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s The exclusive power of an ICSID tribunal does not extend to the enforcement of awards, which is left to domestic courts (Art. 54); provisional measures must be seen as steps preliminary to enforcement; s The common rule in arbitration, as evidenced by other arbitration rules and by domestic law, is that domestic courts have the power to order provisional measures.437 An intention to deviate from this common rule is not apparent from the drafting history of Art. 26 and would have to be clearly expressed by the parties to a dispute. 283

On the other hand, the supporters of the theory that the ICSID tribunal’s power to recommend provisional measures is exclusive438 have argued: s Art. 26 is unequivocal and does not provide for an exception in respect of courtordered provisional measures; s The self-contained character of the ICSID Convention would be seriously affected by the intervention of domestic courts; s This self-contained character, as well as the mixed nature of the dispute between States and foreign investors, fundamentally distinguishes ICSID arbitration from other arbitration regimes; therefore, provisional measures by domestic courts should only be permitted if the parties to an ICSID dispute have given their express consent; s The danger of abuse of provisional measures, both in the host State and in third countries, far outweighs their usefulness; s An ICSID tribunal may take account of any refusal to comply with provisional measures it has recommended, as well as of attempts to dissipate assets to the detriment of the other party; s The highly effective enforcement mechanism provided for by the Convention minimizes the need for provisional measures.

c) ICSID Arbitration Rule 39(6) 284

The controversy about the role of domestic courts in rendering provisional measures was clarified on 26 September 1984, when a new para. 5 was added to ICSID Arbitration Rule 39. This paragraph was renumbered into para. 6 in April 2006. The other paragraphs of Arbitration Rule 39 deal with provisional measures recommended by an ICSID tribunal in the exercise of its powers under Art. 47 of the Convention. Para. 6 reads as follows: Nothing in this Rule shall prevent the parties, provided that they have so stipulated in the agreement recording their consent, from requesting any judicial or other authority to order provisional measures, prior to or after the institution of the proceeding, for the preservation of their respective rights and interests. 437 See Toope (n 410) 190–196. 438 Delaume, ‘Foreign Sovereign Immunity’ (n 353) 41; Georges R Delaume, ‘ICSID and the Transnational Financial Community’ (1986) 1 ICSID Rev 239, 248; Georges R Delaume, Transnational Contracts, Applicable Law and Settlement of Disputes (Oceana 1990) ch XV, 41 ff; Delaume (n 435) 420; Friedland, ‘ICSID and Court-Ordered Provisional Measures’ (n 412); Marchais, ‘Mesures provisoires’ (n 412); Toope (n 410) 236 ff; Parra (n 412) 41; Christian Dominicé, ‘Quelques observations sur la question des mesures conservatoires dans les arbitrages CIRDI’ (1990) 112 La Semaine Judiciaire 327.

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Since the introduction of this addition to Arbitration Rule 39, the issue of provisional measures by domestic courts in ICSID arbitration is no longer controversial. It is now clear that provisional measures by domestic courts are permissible, but only if the parties have expressly agreed to them in the instrument recording their consent to arbitration. The new paragraph has been regarded as a mere clarification of a rule already contained in Art. 26 by some authors,439 and as an attempt to amend substantive law by others.440 The fact that the new rule was adopted by the Administrative Council,441 and that its draft was accompanied by a note by the Secretary-General to the effect that the new provision was merely a clarification and continuation of a preexisting rule,442 lends support to the former view. Cases in which consent to arbitration was given before 26 September 1984 are, in principle, subject to the older Rules, that is without the clarification provided by Rule 39(6) (see Art. 44, paras. 48–59). But with the passage of time, cases in which consent was given before 26 September 1984 have become very unlikely.

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d) Provisional Measures under the Additional Facility The power of domestic courts to order provisional measures under the Additional Facility stands in stark contrast to the solution adopted in Arbitration Rule 39(6) under the Convention. Art. 46 of the Arbitration (Additional Facility) Rules provides for provisional measures to be ordered or recommended by the tribunal in paras. (1) to (3). As concerns domestic courts, Art. 46(4) of the Arbitration (Additional Facility) Rules says:

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The parties may apply to any competent judicial authority for interim or conservatory measures. By doing so they shall not be held to infringe the agreement to arbitrate or to affect the powers of the Tribunal.

It is important to note that the rules governing the Additional Facility operate outside the Convention. Therefore, Art. 26 does not apply in this context. For the same reason, it would be impermissible to draw any conclusions from the Additional Facility Rules for the interpretation of Art. 26. In order to understand the different solution adopted in the Additional Facility Rules for the role of domestic courts in ordering provisional measures it is important to remember that the Convention’s provisions on the recognition and enforcement of awards (Arts. 53 and 54) do not apply to awards rendered under the Additional Facility.443

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e) Clauses Permitting Provisional Measures by Domestic Courts There was never any doubt that the parties are free to provide by agreement for the possibility of having provisional measures ordered by a domestic court or other authority. Arbitration Rule 39(6) requires that this possibility must have been stipulated

See eg Antonio R Parra, ‘Revised Regulations and Rules’ (1985) 2(1) News from ICSID 4, 6. See eg Audit (n 435) 771. Res AC (18)/RES/57, see ICSID, ‘1985 Annual Report’ (1985) 14, 18. Marchais, ‘Mesures provisoires’ (n 412) 292 ff; Parra (n 412) 40; Philip D O’Neill, ‘American Legal Developments in Commercial Arbitration Involving Foreign States and State Enterprises’ (1989) 6 J Int’l Arb 117, 127. 443 Parra (n 412) 40 ff. 439 440 441 442

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in the agreement recording the consent to the Centre’s jurisdiction. The Model Clauses of 1993 offer a formula for this purpose in Clause 14 (see Art. 55, para. 119).444 The availability of provisional measures thus provided for may still run into the obstacle of sovereign immunity. The rules on immunity from conservatory measures or prejudgment attachment vary considerably from one country to another (see Art. 55, paras. 104–106). The consent to provisional or conservatory measures as contained in Model Clause 14 will not necessarily be accepted as a waiver of sovereign immunity. A court may find that the Clause addresses the question of ICSID’s exclusive jurisdiction but not immunity. Moreover, the words ‘either party . . . may request’ may be held not to be sufficiently specific for a waiver of immunity. Therefore, it is advisable to add an express proviso whereby the Government waives its immunity in such proceedings.445 Such a waiver of immunity in the context of provisional measures may, but need not, be combined with a waiver of immunity from enforcement of an award446 (see Art. 55, paras. 107–120) (see Model Clause 15 of 1993). Provision for the right to request provisional measures by domestic courts need not be contained in a direct agreement between the parties, but may be contained in a treaty that offers consent to ICSID arbitration. For example, Art. 1121 of the NAFTA, which requires a waiver of other remedies including domestic courts, adds the following formula: except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the disputing Party.447

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Once this clause has become part of the consent agreement between the parties, it may be accepted as a stipulation in the sense of Arbitration Rule 39(6).

7. Non-Judicial Remedies 293

The idea that the concept of ‘other remedy,’ excluded by the first sentence of Art. 26, might extend to measures other than those that can be taken through domestic courts or non-ICSID arbitration, was discussed in Amco v Indonesia. The Respondent contended that the Claimants had been responsible for the publication of propaganda in the form of a newspaper article in violation of Art. 26. The Tribunal in its Decision on Provisional Measures held: obviously, such an article, would it even be proved that it was ‘promoted’ by the Claimants, does not mean that the same rely on any legal remedy other than the ICSID arbitration.448 444 (1997) 4 ICSID Reports 365. The Model Clauses of 1981 contained a similar Clause XVI, see (1993) 1 ICSID Reports 206. 445 Georges R Delaume, ‘State Contracts and Transnational Arbitration’ (1981) 75 AJIL 784, 795. 446 Cf Gaillard (n 435) 131, who expresses the concern that States in agreeing to provisional measures might inadvertently waive immunity from execution. 447 NAFTA (n 29) Art. 1121(1)(b) and (2)(b). See also USMCA (n 29) Art. 14.D.5, which includes very similar language, allowing a claimant to ‘initiate or continue an action that seeks interim injunctive relief and does not involve the payment of monetary damages before a judicial or administrative tribunal of the respondent, provided that the action is brought for the sole purpose of preserving the claimant’s or the enterprise’s rights and interests during the pendency of the arbitration.’ 448 Amco v Indonesia, Decision on Provisional Measures (9 December 1983) para 3.

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The reference to a ‘legal remedy’ indicates that the Tribunal was of the view that nonjudicial remedies are not covered by the first sentence of Art. 26 of the Convention. On the other hand, the second sentence of Art. 26 specifically refers to ‘administrative or judicial remedies’ in the context of the exhaustion of local remedies. There is no evidence in the preparatory history of Art. 26 that would support the view that the concept of remedy has different meanings in the two sentences of Art. 26. In fact, the second sentence was originally introduced as a clarification for the first. Therefore, the better view appears to be that the exclusion of any other remedy would go beyond judicial proceedings, at least as far as administrative proceedings are concerned. The non-judicial remedy of diplomatic protection is ruled out by Art. 27, except in case of failure to comply with an award. However, Art. 27 is directed at Contracting States, and does not create an obligation on the part of the investor to refrain from seeking diplomatic protection. Therefore, the investor’s obligation corresponding to its home State’s duty under Art. 27 must be looked for in Art. 26. Under certain circumstances a State attempting to exercise diplomatic protection may not be a Contracting State and would, hence, not be bound by Art. 27 (see Art. 25, paras. 1141–1145, 1230– 1241; Art. 27, paras. 14–16). In a situation of this kind, Art. 26 could not stop the investor’s home State from exercising its right to diplomatic protection. However, such an action could be seen to constitute a bar for the investor to take any steps to obtain such diplomatic protection (History, Vol. II, pp. 74, 80).

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D. ‘A Contracting State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under this Convention.’ The exhaustion of local remedies is a concept of traditional international law, which requires that, before a claim for the violation of the rights of an individual or a corporation can be pursued against a State through international procedures, that individual or corporation must first have recourse to all means of redress available under the domestic law of the State concerned. Developed originally in the context of diplomatic protection (see Art. 27, paras. 1–3), the concept of the exhaustion of local remedies was retained in procedures granting individuals direct access to an international forum, especially for the protection of human rights. The requirement to exhaust local remedies is a right of the State that it may elect to renounce in a particular context.449

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1. The Basic Rule of Non-Exhaustion Art. 26 reverses the situation under traditional international law: the Contracting States waive the requirement of exhaustion of local remedies unless otherwise stated. The second sentence of Art. 26 clarifies that a State may make the exhaustion of local remedies a condition of its consent to arbitration. However, in the absence of such a proviso, there is no requirement to exhaust local remedies. The Report of the Executive Directors on the Convention gives the following explanation for this provision:

449 See generally Chittharanjan Felix Amerasinghe, Local Remedies in International Law (2nd edn, CUP 2004).

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schreuer’s commentary on the icsid convention 32. . . . In order to make clear that it was not intended thereby to modify the rules of international law regarding the exhaustion of local remedies, the second sentence explicitly recognizes the right of a State to require the prior exhaustion of local remedies.450

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The removal of the exhaustion of local remedies requirement dominated the drafting history of Art. 26. The Working Paper contained a provision similar to what eventually became the first sentence of Art. 26 (History, Vol. I, p. 132). The subsequent debate centered almost exclusively on the possibility to resort to domestic courts, and on the requirement to exhaust local remedies before going to arbitration. Especially participants from Latin America and other developing countries sought to retain the traditional requirement and expressed concern that the rule, as stated, would eliminate or undermine the role of domestic courts, and might create procedural privileges for foreign investors (History, Vol. II, pp. 58, 61–62, 88–89, 96–97, 523–526, 543, 758). Even an ‘appeals function’ for the Centre seemed acceptable to some delegates only in cases of denial of justice or discrimination (ibid., pp. 326, 350, 432, 527). Mr. Broches repeatedly explained that the provision merely created a rule of interpretation, that is, a presumption that arbitration was intended to be the sole remedy, but that it left the parties entirely free to require the exhaustion of local remedies (ibid., pp. 59, 84–85, 97, 241, 303, 326, 347, 348, 371, 431, 464, 506, 524, 756). This position was supported by some of the delegates from industrialized countries (ibid., pp. 432–433, 758–759). Some delegates wanted to reverse the presumption, thereby making direct access to arbitration the exception, and the prior exhaustion of local remedies the rule (ibid., pp. 431, 505, 663, 756–757, 761). An Israeli proposal sought to differentiate between different types of disputes, requiring the exhaustion of local remedies for some, but not for others (ibid., pp. 498, 553). Eventually, a second sentence was inserted into the Revised Draft (History, Vol. I, p. 134) to clarify the possibility for States to require the exhaustion of local remedies, although this had already been expressed in the words ‘unless otherwise stated’ in the first sentence (History, Vol. II, pp. 792–793, 936, 958, 1029). The additional sentence was criticized by some as superfluous (ibid., pp. 794, 973). A vote on the second sentence showed a narrow majority in its favor (ibid., p. 794). That second sentence refers to ‘administrative or judicial remedies.’ The exhaustion of local remedies is usually associated with redress in domestic courts. But administrative remedies are clearly also part of the overall system of measures that must be taken. The separation of the words ‘administrative’ and ‘judicial’ by the word ‘or’ rather than ‘and’ creates the impression of two mutually exclusive alternatives. The Convention’s travaux préparatoires give no clear explanation for this choice of words, although it might have been chosen in response to misgivings by some delegates concerning the review of final domestic court decisions by an arbitral tribunal (History, Vol. II, p. 794, see also ibid., p. 772). It is possible that an investor may seek and find relief through the decision of an administrative authority of the host State, rather than through its courts, possibly in the form of a negotiated settlement. Therefore,

450 (1993) 1 ICSID Reports 23, 30.

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insistence on the utilization of administrative as well as judicial remedies would be in line with the traditional concept of the exhaustion of local remedies.

2. Exhaustion of Local Remedies as a Condition of Consent A State may make the exhaustion of local remedies a condition of its consent to arbitration. The condition may be expressed in a treaty offering consent to ICSID arbitration (see Art. 25, paras. 825–862), in national legislation providing for ICSID arbitration (see Art. 25, paras. 780–824), or in a contract with the investor containing an ICSID arbitration clause (see Art. 25, paras. 767–779).451 The condition that local remedies must be exhausted before ICSID arbitration can be instituted may be expressed by a State party to the Convention only up to the time that consent to arbitration is perfected, but not later (History, Vol. II, p. 974) (see Art. 25, paras. 880–889). This is a consequence of the principle that once consent to jurisdiction has been given, it may not be unilaterally withdrawn or restricted452 (see Art. 25, paras. 890, 981, 1062, 1068). On the other hand, the condition that local remedies must be exhausted may be withdrawn at any time, thereby opening direct access to ICSID arbitration. A State may also give advance notice that it will require the exhaustion of local remedies as a condition for its consent to ICSID arbitration by way of a general notification to the Centre. But a general notification of this kind is a statement for information purposes only. It is an announcement of the State’s intentions much like the notifications under Art. 25(4) (see Art. 25, paras. 1472–1507). If a State subsequently consents to ICSID arbitration in terms inconsistent with the prior general notification, the consent will prevail over the notification. There are only few examples of such notifications. These notifications are published in Document ICSID/8-D and are available on the ICSID website. Upon its ratification of the Convention in 1983, Israel issued the following notification, but withdrew it later by a communication received by the Centre on 21 March 1991: ‘Israel requires the exhaustion of local administrative or judicial remedies as a condition under this Convention.’453 On 27 April 1993, Costa Rica notified the Centre that

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There may only be recourse to arbitration pursuant to [the Convention] where all existing administrative or judicial remedies have been exhausted.

On 16 January 2003, Guatemala notified the Centre that

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the Republic of Guatemala will require the exhaustion of local administrative remedies as a condition of its consent to arbitration under the Convention.

It is worth noting that Guatemala’s notification refers to administrative remedies only. By implication, it does not extend to judicial remedies.

451 In this sense Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 39. 452 CF Amerasinghe, ‘Whither the Local Remedies Rule?’ (1990) 5 ICSID Rev 292, 294. 453 See ‘Notifications Concerning Classes of Disputes Considered Suitable or Unsuitable for Submission to the Centre (Art. 25(4) of the Convention)’ ICSID/8-D (July 2020) 1, fn 5 in ICSID, ICSID/8 (n 396). See also Hirsch (n 436) 20, fn 12.

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a) Bilateral Investment Treaties 310

The situation with regard to investment treaties, such as BITs, is somewhat complex.454 Most BITs do not mention the question of exhaustion of local remedies, thereby leaving the basic rule of Art. 26 untouched. Some treaties explicitly provide that local remedies need not be exhausted, thereby restating the residual rule of Art. 26. For instance, Art. 10(5) of the Austria–UAE BIT of 2001 provides: If the investor chooses to file for arbitration, the host Contracting Party agrees not to request the exhaustion of local settlement procedures.455

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Other treaties specifically state that the requirement of exhaustion of domestic remedies is waived by virtue of a State’s consent to submit a dispute to arbitration. An illustration of this is provided by Art. 10(2)(b) of the Cambodia–Croatia BIT of 2001, which, in relevant part, reads as follows: In case of arbitration, each Contracting Party, by this Agreement irrevocably consents in advance, even in the absence of an individual arbitral agreement between the Contracting Party and the investor, to submit any such dispute to the Centre. This consent implies the renunciation of the requirement that the internal administrative or judicial remedies shall be exhausted.

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Some treaties unequivocally require the exhaustion of local remedies before ICSID arbitration may be instituted. This type of provision is prevalent in some older investment treaties, for example older treaties concluded by Romania.456 The China–Côte d’Ivoire BIT of 2002, in Art. 9(3), requires the exhaustion of domestic administrative review procedures: If such dispute cannot be settled amicably through negotiations, any legal dispute between an investor of one Contracting Party and the other Contracting Party in connection with an investment in the territory of the other Contracting Party shall have exhausted the domestic administrative review procedure specified by the laws and

454 For a survey of BIT provisions, see UNCTAD, Bilateral Investment Treaties 1995–2006: Trends in Investment Rulemaking (United Nations 2007) 108–109. See also Delaume, Transnational Contracts (n 438) 41; Parra (n 56) 333 ff; Paul Peters, ‘Dispute Settlement Arrangements in Investment Treaties’ (1991) 22 Neth YBIL 91, 133–135; Dolzer and Stevens (n 56); Kenneth J Vandevelde, Bilateral Investment Treaties: History, Policy and Interpretation (OUP 2010); Jeswald W Salacuse, The Law of Investment Treaties (OUP 2010). 455 Austria–UAE BIT (signed 17 June 2001, entered into force 1 December 2003) Art. 10(5). See also Australia–Hungary BIT (signed 15 August 1991, entered into force 10 May 1992) Art. 12; Australia– Poland BIT (signed 7 May 1991, entered into force 27 March 1992) Art. 13; Belgium/Luxemburg Economic Union (BLEU)–Egypt BIT (signed 28 February 1977, entered into force 20 September 1978) Art. IX; BLEU–Cameroon BIT (signed 27 March 1980, entered into force 1 November 1981) Art. 10; Bangladesh–BLEU BIT (signed 22 May 1981, entered into force 15 September 1987) Art. 6; Austria– Malaysia BIT (signed 12 April 1985, entered into force 1 January 1987) Art. 9; Austria–Korea BIT (signed 14 March 1991, entered into force 1 November 1991) Art. 8; Austria–Estonia BIT (signed 16 May 1994, entered into force 1 October 1995) Art. 8. See also Dolzer and Stevens (n 56) 172–173. 456 Georges R Delaume, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 785; Aron Broches, ‘Bilateral Investment Protection Treaties and Arbitration of Investment Disputes’ in Jan C Schultsz and Albert Jan van den Berg (eds), The Art of Arbitration: Liber Amicorum Pieter Sanders (Kluwer 1982) 63, 69; Heribert Golsong, ‘A Guide to Procedural Issues in International Arbitration’ (1984) 18 Int’l Lawyer 637, fn 10; Nassib G Ziadé, ‘ICSID and Arab Countries’ (1988) 5(2) News from ICSID 6–7.

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regulations of that Contracting Party, before submission of the dispute to the aforementioned arbitration procedure . . .457

Yet another group of BITs provides for resort to ICSID if a dispute has not been settled through local remedies within a certain period of time.458 Technically, this is not a requirement to exhaust local remedies, since the parties are free to turn to ICSID, once the time has elapsed. British treaties, for example, provide for ICSID arbitration if agreement cannot be reached ‘within three months’ between the parties to the dispute ‘through pursuit of local remedies or otherwise.’459 The addition of ‘or otherwise’ indicates that the pursuit of local remedies is just one of several options for dispute resolution, such as negotiations or conciliation. The time limit of three months makes any notion of exhaustion quite unrealistic. Longer periods are foreseen in some other treaties. For instance, the Belgium and Luxembourg– Botswana BIT provides for a period of six months within which a dispute may be submitted to a local court for its decision.460 A number of BITs, such as Art. 10 of the Argentina–Germany BIT, provide for submission to international arbitration, if no decision has been rendered within eighteen months of submission of the dispute to domestic courts, or if the dispute persists despite such a decision.461 Tribunals have held that a requirement that local remedies be used for a certain period of time (also known as a ‘domestic litigation requirement’) is not an application of the exhaustion of local remedies rule.462 In Maffezini v Spain, the Argentina–Spain BIT provided that the dispute must first be submitted to the host State’s domestic courts. It could be submitted to international arbitration only under the following condition:

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if no decision has been rendered on the merits of the claim after the expiration of a period of eighteen months from the date on which the proceedings referred to in paragraph 2 of this Article [i.e. domestic courts] have been initiated, or if such decision has been rendered, but the dispute between the parties continues . . .463

The Respondent objected to the Tribunal’s jurisdiction, contending that the treaty required the exhaustion of local remedies in Spain before it could be submitted to ICSID.464 In addition, Spain argued that, once a decision of a Spanish court had been

457 China–Côte d’Ivoire BIT (signed 30 September 2002, not yet in force) Art. 9(3). 458 Christoph Schreuer, ‘Calvo’s Grandchildren: The Return of Local Remedies in Investment Arbitration’ (2005) 4 LPICT 1, 3–5. See also Michal Swarabowicz, ‘Identity of Claims in Investment Arbitration: A Plea for Unity of the Legal System’ (2016) 8 JIDS 280. 459 UK Model IPPA (2008) Art. 8(3) (Alternative I). See also eg Egypt–United Kingdom BIT (signed 11 June 1975, entered into force 24 February 1976) (1995) 14 ILM 1472, Art. 8; Singapore–United Kingdom BIT (signed and entered into force 22 July 1975) (1976) 15 ILM 593, Art. 8; Sri Lanka–United Kingdom BIT (signed 13 February 1980, entered into force 18 December 1980) (1980) 19 ILM 888, Art. 8; Hungary–United Kingdom BIT (signed 9 March 1987, entered into force 28 August 1987) Art. 8. See also Delaume (n 456) 783, fn 23e). 460 BLEU–Botswana BIT (signed 7 June 2006, not yet in force) Art. 12(2). 461 Argentina–Germany BIT (signed 9 April 1991, entered into force 8 November 1993) Art. 10. 462 Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 28; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) para 30. 463 See Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 19. 464 ibid paras 19–37.

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rendered, there was no longer any dispute and therefore the case could no longer be referred to international arbitration.465 The Tribunal did not interpret the relevant provision of the BIT as requiring the exhaustion of all available local remedies in the sense of international law. Any decision by a Spanish court would not even have to be final.466 Even if the treaty had contained such a clause, this still would not have deprived the parties of their right to go to international arbitration.467 The Tribunal further interpreted the treaty as leaving the parties the option of bringing the dispute to international arbitration after the expiration of the eighteen-month period, regardless of the decision rendered by the domestic court.468 The treaty gave national courts ‘an opportunity to vindicate the international obligations guaranteed in the BIT.’469 Eventually, the Claimant avoided this requirement by relying on the most-favored-nation (MFN) clause contained in the BIT.470 However, the Tribunal specified that – had a party expressly conditioned its consent to ICSID jurisdiction on the exhaustion of local remedies – this requirement could not be bypassed by invoking the MFN clause.471 In Siemens v Argentina, the Tribunal also distinguished between a domestic litigation requirement and a requirement to exhaust domestic remedies. The Tribunal concluded that the domestic litigation requirement was intended to give the local tribunals an opportunity to decide a dispute first before it would be submitted to international arbitration. However, the provision did not require the exhaustion of local remedies; nor did it require a prior decision of the domestic courts. It simply required ‘the passing of time or the persistence of the dispute after a decision by a court.’472 The usefulness of a domestic litigation requirement is questionable as it creates a considerable burden on the party seeking arbitration with little chance of advancing the settlement of the dispute. A substantive decision by the domestic courts in a complex investment dispute is unlikely to be rendered within eighteen months, particularly if the possibility of appeals is also considered. Even if a decision can be rendered within this time period, the dispute is likely to persist, if the investor is dissatisfied with the outcome, and arbitration remains an option. It follows that the most likely effect of a clause of this kind is delay and additional costs. One tribunal called a provision of this kind ‘nonsensical from a practical point of view.’473 There has been a series of decisions on BIT provisions containing the requirement to try to settle disputes in domestic courts for eighteen months before going to arbitration. A large number of tribunals have consistently held that claimants were entitled to invoke MFN clauses in order to avoid this requirement.474

465 467 469 471 472 473 474

ibid para 25. 466 ibid para 28. ibid para 29. 468 ibid paras 32–33. ibid paras 35–36. 470 ibid paras 38–64. ibid para 63. See also Itisaluna v Iraq, Award (3 April 2020) paras 209–212. Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 104. Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 224. Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 38–64; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) paras 32–110; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 117–121; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 24–31, 41–49; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 52–66; Telefónica v Argentina, Decision on Jurisdiction (25 May 2006) paras 92–108;

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In Wintershall v Argentina, however, the Tribunal reached a different conclusion, ruling that the investor’s right of access to ICSID arbitration was conditioned strictly upon compliance with, inter alia, the domestic litigation requirement.475 The Tribunal in Impregilo v Argentina reached the same conclusion on the domestic litigation requirement.476 Nevertheless, a number of subsequent tribunals have reverted to the earlier, more expansive trend.477 Tribunals have also declined to give force to the domestic litigation requirement where the respondent States had interfered with the investor’s access to the judiciary. In BG Group v Argentina, the Argentina–United Kingdom BIT provided that recourse to arbitration was possible only where disputes had been submitted for eighteen months to the competent court of the Respondent and (i) that court had not issued a final decision, or (ii) the parties were still in dispute after the decision.478 Argentina argued that BG’s claims were inadmissible because BG had not met that requirement.479 The Tribunal rejected Argentina’s objection and found the claims admissible.480 It reasoned that Argentina, through various measures, had restricted ‘the effectiveness of the domestic judicial remedies’ to challenge the very measures contested by BG in the arbitration.481 The Tribunal concluded that the eighteen-months domestic litigation requirement could not be construed ‘as an absolute impediment to arbitration.’ If, for example, recourse to the domestic judiciary was ‘unilaterally prevented or hindered by the host State,’ such interpretation ‘would lead to the kind of absurd and unreasonable result proscribed by Article 32 of the Vienna Convention’ and would allow the State ‘to unilaterally elude arbitration.’482 Similarly, several tribunals have also applied some sort of a ‘futility exception’ in case domestic remedies proved insufficiently effective to fulfill the demands of a domestic litigation requirement.483 More recently, the Casinos Austria tribunal stated that the rationale of the domestic litigation requirement was to give a domestic jurisdiction ‘the opportunity to correct the complained about measure, thus avoiding the need for formal international dispute settlement through investor–State arbitration.’484 In other words, all that domestic

475 476 477 478 479 481 483

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National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) paras 53–94; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 52–68. See Wintershall v Argentina, Award (8 December 2008) paras 114–118. The Tribunal further held that the MFN clause in the Argentina–Germany BIT could not be applied to overcome that condition. See ibid 161–197. Impregilo v Argentina, Award (21 June 2011) paras 79–94. However, contrary to Wintershall, the Impregilo tribunal applied the MFN clause in the Argentina–Italy BIT to overcome the domestic litigation requirement. See ibid 95–108. See eg Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) paras 40–99. BG Group v Argentina, Final Award (24 December 2007) para 140. ibid para 141. 480 ibid para 157. ibid para 156. 482 ibid para 147. See Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 579; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 131; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 599–607; Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 310–311; Daimler v Argentina, Award (22 August 2012) para 198; Kiliç v Turkmenistan, Award (2 July 2013) paras 8.1.1–8.1.21; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) paras 137, 234. Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 297.

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litigation provisions required was ‘to provide domestic institutions with an opportunity of self-correction.’485

b) National Legislation 327

It is evident that a State offering ICSID arbitration in its legislation on investment may make this offer conditional on the exhaustion of its local remedies. Little use, if any, appears to have been made of this possibility.

c) Investment Contracts 328

Agreements between the host State and the investor providing for ICSID arbitration are another obvious place for States to reserve the requirement to exhaust local remedies. The ICSID Model Clauses of 1993 contain a sample for such a provision: Clause 13 Before either party hereto institutes an arbitration proceeding under the Convention with respect to a particular dispute, that party must have taken all steps necessary to exhaust the [following] [administrative] [and] [judicial] remedies available under the laws of the Host State with respect to that dispute [list of required remedies], unless the other party hereto waives that requirement in writing.486

3. Practice of Tribunals a) Exhaustion of Local Remedies and Jurisdiction 329

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States parties to ICSID proceedings have invoked the principle of the exhaustion of local remedies as a jurisdictional requirement in a number of cases, but – as discussed further below – never with success.487 In Benvenuti & Bonfant v Congo, the principle was invoked by reference to a somewhat unclear ICSID clause in a contract. However, the Tribunal did not reach the question, finding that the claims at issue did not directly arise from a dispute as to the application of that particular contract.488 In the first annulment proceedings in Amco v Indonesia, Indonesia argued that the Tribunal manifestly exceeded its powers by holding that Amco could bring its claim for compensation of damages based on the acts of the army and police personnel involved directly to an ICSID Tribunal without previously seeking redress before the

485 ibid. See also Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 111; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 137. For a general overview of recent practice, see Gary Born and Marija Šćekić, ‘Pre-Arbitration Procedural Requirements’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 227. 486 (1997) 4 ICSID Reports 365. See also Clause XIV of the 1981 Clauses, (1993) 1 ICSID Reports 205; Clause XVII of the 1968 Model Clauses, (1968) 7 ILM 1174. 487 Even in non-ICSID proceedings, tribunals have routinely rejected attempts by respondents to invoke the non-exhaustion of local remedies as an obstacle to jurisdiction. See Yaung Chi v Myanmar (ad hoc), Award (31 March 2003) para 40; Mytilineos v State Union of Serbia & Montenegro and Serbia (UNCITRAL), Partial Award on Jurisdiction (8 September 2006) para 221; Nycomb v Latvia (SCC), Award (16 December 2003) para 2.4; RosInvest v Russia (SCC), Award on Jurisdiction (5 October 2007) para 153. See also ibid, Final Award (12 September 2010) paras 594–597. 488 Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 1.13–1.16.

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Indonesian courts in conformity with the general international law rule on exhaustion of local remedies.489

The ad hoc Committee had little problem to dispose of this argument:

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By acceptance of ICSID jurisdiction without reserving under Article 26 of the Convention a right to require prior exhaustion of local remedies as a condition for obtaining access to an ICSID tribunal, Indonesia must be deemed to have waived such right.490

In Lanco v Argentina, the Respondent objected to ICSID jurisdiction, arguing that a dispute settlement provision had been agreed in the contract subsequent to the entry into force of the Argentina–United States BIT, thus replacing the consent given to ICSID arbitration.491 The Tribunal analyzed Art. 26 and held that it was ‘merely a standard for interpretation, a presumption that arbitration is the exclusive remedy, but that the parties may require exhaustion of domestic remedies.’492 However, the Tribunal found that the State’s valid consent came directly from the Argentina–United States BIT and that the treaty did not contain a requirement of prior resort to the local courts.493 In Generation Ukraine v Ukraine, the Respondent maintained that, on the basis of Art. 26, it had the right to insist on the exhaustion of local remedies by the Claimant as a precondition to the submission of the dispute to arbitration.494 The Tribunal observed that the Ukraine–United States BIT did not contain a requirement of prior exhaustion of local remedies before submitting a dispute to ICSID. The Tribunal said:

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13.4 The first sentence of Article 26 secures the exclusivity of a reference to ICSID arbitration vis-à-vis any other remedy. A logical consequence of this exclusivity is the waiver by Contracting States to the ICSID Convention of the local remedies rule, so that the investor is not compelled to pursue remedies in the respondent State’s domestic courts or tribunals before the institution of ICSID proceedings. This waiver is implicit in the second sentence of Article 26, which nevertheless allows Contracting States to reserve its right to insist upon the prior exhaustion of local remedies as a condition of its consent. 13.5 Any such reservation to the Ukraine’s consent to ICSID arbitration must be contained in the instrument in which such consent is expressed, i.e. the BIT itself.495

The Tribunal added that once the investor had accepted the State’s offer to arbitrate in the BIT by instituting arbitration proceedings, no further limitations or restrictions can be imposed unilaterally. Therefore, the Claimant was under no constraint to exhaust remedies in the Ukrainian courts before starting arbitration at ICSID.496 Ecuador also opposed the Tribunal’s jurisdiction in IBM v Ecuador, arguing that, on the basis of Art. 26, it could condition its consent to ICSID arbitration on the existence

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Amco v Indonesia, Decision on Annulment (16 May 1986) para 62. ibid para 63. Lanco v Argentina, Decision on Jurisdiction (8 December 1998) para 33. ibid para 38. 493 ibid para 40. Generation Ukraine v Ukraine, Award (16 September 2003) paras 13.1–13.6. ibid paras 13.4, 13.5. 496 ibid paras 13.5–13.6.

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of a prior decision by the courts of Ecuador.497 The Tribunal rejected Ecuador’s position. It said: The provision of article 26 of the Convention authorized the Ecuadorian Government to establish certain conditions for the applicability of an International Treaty; i.e., the Ecuadorian Government should have included, as previous requirement, the condition of exhausting the administrative or judicial channels, at the moment it ratified the BIT. And it has not. On the contrary, the first part of article 26 of the Convention, as well as number 2 of article 11 of the BIT, excluded the possibility to call on the national judges if the ICSID arbitration has been sought first.498

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Similarly, the Tribunal in AES v Argentina reiterated that the ICSID system was established ‘on the basis of a reversed rule of exhaustion of local remedies,’ which needs to be ‘expressly required as a condition of the consent of one party to arbitration under the Convention.’499 The Tribunal recalled that previous decisions rejected recourse to local judicial remedies as a prerequisite of ICSID jurisdiction and added that no precedent exists of an ICSID tribunal subordinating its jurisdiction to the exhaustion of prior negotiations between the parties.500 In EDF v Argentina, Argentina contended that certain claims were barred from adjudication by the ICSID tribunal, because the claims were contractual in nature and had not been exhausted by the Claimants in local proceedings.501 The Tribunal held that the Claimants were not required to exhaust local remedies before the Tribunal could hear their claims. It stated: 1126. . . . In fact, the language of the ICSID Convention suggests that an agreement to arbitration precludes the parties from seeking local remedies. ICSID Convention, Article 26, provides: ‘Consent of the parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy. (Emphasis added).’ 1127. Having elected not to incorporate a provision mandating the exhaustion of remedies prior to arbitration into the France BIT, Respondent cannot now argue that one implicitly exists. To hold otherwise would conflict with the plain reading of Article 26, as well as invite States to mandate the exhaustion of local remedies without giving fair warning of such a stipulation to investors who enter a treaty expecting a clear path to arbitration.502

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In MNSS and RCA v Montenegro, the Respondent objected to the Tribunal’s jurisdiction, asserting that the Claimant had not exhausted domestic remedies. In rejecting the objection, the Tribunal observed that this argument ‘ignore[d] that the Respondent has not made its consent to arbitration under the BIT subject to the exhaustion of local remedies’ and that the text of the BIT, its context, or the object and purpose of the BIT do not support ‘such addition when the State parties to the BIT did not include

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IBM v Ecuador, Decision on Jurisdiction (22 December 2003) paras 77–84. ibid para 80. AES v Argentina, Decision on Jurisdiction (26 April 2005) para 69. ibid para 70. EDF v Argentina, Award (11 June 2012) para 1123. ibid paras 1126–1127.

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it.’503 It added that ‘[t]he Respondent also ignores the consistent jurisprudence of arbitral tribunals in this respect.’504

b) The Use of Local Remedies as a Substantive Requirement In contrast to the above cases, a number of tribunals have required parties to resort to domestic courts before initiating international arbitration for purposes of advancing certain types of claims. In these cases, however, resort to local remedies was not treated as a matter of jurisdiction or admissibility. Rather, the substantive violation of the international obligation would not have occurred until at least an attempt had been made to obtain redress through domestic courts.505 Some of these cases involved the question whether a denial of justice had occurred. It is generally recognized that a denial of justice claim can arise only once remedies under the domestic legal system have been exhausted,506 in other words, when ‘the system as a whole has been tested and the initial delict remained uncorrected.’507 The exhaustion of domestic remedies as a prerequisite of a denial of justice claim is different from the exhaustion of domestic remedies as a prerequisite for jurisdiction. As the Jan de Nul tribunal explained, the requirement of exhaustion of domestic remedies in the context of a denial of justice claim

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relates to the merits of the denial of justice claim. It must be distinguished from the requirement addressed in Article 26 of the ICSID Convention which deals with the admissibility of the claims brought before an ICSID Tribunal.508

The Arif v Moldova tribunal agreed that ‘for claims for denial of justice, the exhaustion of local remedies is a question to be addressed with the merits of the dispute. It is a substantive standard, rather than a procedural bar.’509

503 MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 216. See also Valores Mundiales v Venezuela, Award (25 July 2017) paras 575–576. 504 MNSS and RCA v Montenegro (AF), Award (4 May 2016) para 217. 505 See Schreuer (n 458) 13–16. 506 See Pantechniki v Albania, Award (30 July 2009) para 96; Toto v Lebanon, Decision on Jurisdiction (11 September 2009) para 164; ATA Construction v Jordan, Award (18 May 2010) para 107; FPS v Czech Republic (UNCITRAL), Final Award (12 November 2010) para 293; Chevron v Ecuador I (UNCITRAL), Partial Award on the Merits (30 March 2010) para 321; Alps Finance v Slovakia (UNCITRAL), Award (5 March 2011) para 251; Roussalis v Romania, Award (7 December 2011) para 472; Oostergetel v Slovakia (UNCITRAL), Award (23 April 2012) paras 225, 275; Arif v Moldova, Award (8 April 2013) paras 442–443; Rompetrol v Romania, Award (6 May 2013) para 165; ECE v Czech Republic (UNCITRAL), Award (19 September 2013) para 4.746; Lahoud v DR Congo, Award (7 February 2014) para 466; Flughafen Zürich v Venezuela, Award (18 November 2014) paras 392, 600, 628, 635; OIEG v Venezuela, Award (10 March 2015) paras 524, 526; Philip Morris v Uruguay, Award (8 July 2016) paras 487, 503. See also Chevron v Ecuador II (UNCITRAL), Second Partial Award on Track II (30 August 2018). Cf also Yaung Chi v Myanmar (ad hoc), Award (31 March 2003) para 40; Manchester Securities v Poland (UNCITRAL), Award (7 December 2018) para 483; Bridgestone v Panama, Award (14 August 2020) paras 163–167. 507 Jan Paulsson, Denial of Justice in International Law (CUP 2005) 125. See further on the possible breach of investment treaties through judicial acts, Demirkol (n 1); Prislan (n 1) chs 6, 7. 508 Jan de Nul v Egypt, Award (6 November 2008) para 255. See also Loewen v United States (AF), Award (26 June 2003) para 168; Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) paras 58, 111, 114. 509 Arif v Moldova, Award (8 April 2013) para 346.

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In other cases, the claimants asserted claims for breach of the relevant BIT arising out of acts of the judiciary, but did not assert denial of justice claims. Some tribunals have ruled that because there was no jurisdictional requirement to exhaust domestic remedies, and because there was no claim for denial of justice, no exhaustion of domestic remedies was required for the tribunal to proceed to decide on the claims. In Arif v Moldova, the Tribunal first noted that Art. 26 of the ICSID Convention constituted ‘an express waiver of the rule of exhaustion of local remedies in ICSID arbitrations,’510 and that there was no general requirement to exhaust local remedies for a treaty claim to exist (unless such a claim is for denial of justice).511 The Tribunal continued: The fact that the alleged wrongful acts mainly relate to acts of the judiciary does not necessarily mean that local remedies should be exhausted before an international claim can arise. A court may violate a BIT standard directly and this breach will be attributable to the respondent State without there being any requirement to exhaust local remedies, unless it is a breach for denial of justice.512

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The Tribunal therefore concluded: [A]s a matter of principle, in accordance with Article 4 of the ILC Articles on State Responsibility, court decisions can engage a State’s responsibility, including for unlawful expropriation, without there being any requirement to exhaust local remedies (unless claims for denial of justice have been made). Respondent’s argument that there can be no international wrongful act or Treaty dispute arising from a court decision until the entire justice system has heard the case is therefore rejected.513

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Some tribunals, however, have held that the non-exhaustion of domestic remedies precluded them from deciding on claims arising out of acts or omissions of the judiciary.514 This conclusion appears to follow from the – incorrect – understanding that acts or omissions of the judiciary could only give rise to denial of justice claims, which generally require exhaustion of domestic remedies.515 Other tribunals have required parties to resort to domestic courts before initiating international arbitration even when the claims did not arise out of acts or omissions of the judiciary. They have required resort to local remedies because, in their view, an attempt had to be made to obtain redress through domestic courts before a violation of the BIT could occur. Thus, the tribunals also considered the exhaustion of domestic remedies not as a bar to their jurisdiction, but as a substantive requirement for them to proceed and rule on the claims.516

510 ibid para 333. 511 ibid para 334. 512 ibid. 513 ibid para 347. 514 Alps Finance v Slovakia (UNCITRAL), Award (5 March 2011) para 251. See also Jan de Nul v Egypt, Award (6 November 2008) para 259. Cf Loewen v United States (AF), Award (26 June 2003) paras 156, 207–217; Apotex v United States (UNCITRAL), Award on Jurisdiction and Admissibility (14 June 2013) paras 280–282, 298. See also Chevron v Ecuador II (UNCITRAL), Second Partial Award on Track II (30 August 2018) paras 321, 323–324 (concerning the exhaustion of an local remedies in the context of an ‘effective means’ provision). 515 See generally Paulsson (n 507) 100–130. For an alternative view, see Zachary Douglas, ‘International Responsibility for Domestic Adjudication: Denial of Justice Deconstructed’ (2014) 63 ICLQ 867. 516 See generally Anne van Aaken, ‘Primary and Secondary Remedies in Investment Arbitration and State Liability: A Functional and Comparative View’ in Stephan W Schill (ed), International Investment Law and Comparative Public Law (OUP 2010) 721.

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For instance, in Vivendi v Argentina, the first Tribunal found that there was a close connection between the terms of the contract and the alleged treaty violations. Because of that close connection, the Tribunal also held that the Claimants could not pursue international arbitration, until their rights had been asserted before the Tucumán courts and those courts had denied those rights, either procedurally or substantively. The Tribunal’s position was as follows:

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any claim against the Argentine Republic could arise only if Claimants were denied access to the courts of Tucumán to pursue their remedy under Article 16.4 or if the Claimants were treated unfairly in those courts (denial of procedural justice) or if the judgment of those courts were substantively unfair (denial of substantive justice) or otherwise denied rights guaranteed to French investors under the BIT by the Argentine Republic.517

The Tribunal however emphasized that its decision did not impose a requirement to exhaust local remedies because that requirement would be incompatible with Art. 26 of the ICSID Convention. Rather, the need to resort to the local courts was based on the contract and arose from the impossibility to separate the contractual and treaty claims.518 The first ad hoc Committee in Vivendi v Argentina partly annulled this Award, and held that the fact that the contractual dispute resolution clause referred claims under the contract to the courts of Tucumán did not preclude the jurisdiction of the international Tribunal with respect to claims based on a violation of the treaty.519 The Tribunal in Feldman v Mexico also considered the availability of local remedies in examining the Claimant’s allegations of unlawful conduct by the host State. The Tribunal drew attention to the fact that the Claimant had failed to seek an administrative ruling and court review regarding the withdrawal of certain tax benefits affecting its investment. The Tribunal concluded that the State’s conduct was not tantamount to expropriation.520 In Generation Ukraine v Ukraine, the Claimant complained of an indirect expropriation.521 The Tribunal found that the Claimant should have at least attempted to bring its claim before the domestic courts and explained its reasoning as follows:

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In such instances, an international tribunal may deem that the failure to seek redress from national authorities disqualifies the international claim, not because there is a requirement of exhaustion of local remedies but because the very reality of conduct tantamount to expropriation is doubtful in the absence of a reasonable – not necessarily exhaustive – effort by the investor to obtain correction.522

The Tribunal further stated: In the circumstances of this case, the conduct cited by the Claimant was never challenged before the domestic courts of Ukraine. More precisely, the Claimant did

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Vivendi v Argentina, Award (21 November 2000) para 80. ibid para 81. Vivendi v Argentina, Decision on Annulment (3 July 2002) para 76. Feldman v Mexico (AF), Award (16 December 2002) paras 114, 134. Generation Ukraine v Ukraine, Award (16 September 2003) paras 20.30, 20.33. ibid para 20.30 (emphases in the original). See also Lauder v Czech Republic (UNCITRAL), Final Award (3 September 2001) para 204; EnCana v Ecuador (UNCITRAL), Award (3 February 2006) para 194.

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schreuer’s commentary on the icsid convention not attempt to compel the Kyiv City State Administration to rectify the alleged omissions in its administrative management of the Parkview Project by instituting proceedings in the Ukrainian courts. There is, of course, no formal obligation upon the Claimant to exhaust local remedies before resorting to ICSID arbitration pursuant to the BIT. Nevertheless, in the absence of any per se violation of the BIT discernable from the relevant conduct of the Kyiv City State Administration, the only possibility in this case for the series of complaints relating to highly technical matters of Ukrainian planning law to be transformed into a BIT violation would have been for the Claimant to be denied justice before the Ukrainian courts in a bona fide attempt to resolve these technical matters.523

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The Tribunal in Waste Management v Mexico II discussed the issue of exhaustion of local remedies in connection with the State’s obligation to ensure fair and equitable treatment and full protection and security for investors.524 The Waste Management II tribunal considered the issue important not only on a procedural level, but also with respect to a State’s compliance with substantive standards. The Tribunal held: It is true that in a general sense the exhaustion of local remedies is a procedural prerequisite for the bringing of an international claim, one which is dispensed with by NAFTA Chapter 11. But the availability of local remedies to an investor faced with contractual breaches is nonetheless relevant to the question whether a standard such as Article 1105(1) has been complied with by the State.525

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The Tribunal in Jan de Nul v Egypt found that there is ‘a clear trend of cases requiring an attempt to seek redress in domestic courts before bringing a claim for violations of BIT standards irrespective of any obligation to exhaust local remedies.’526 In Saipem v Bangladesh, the Tribunal rejected, on the basis of Art. 26, Bangladesh’s arguments that Saipem’s claim was not admissible for failure to meet the requirement to exhaust local remedies. The Tribunal recognized that this requirement does apply to claims of denial of justice, but this was a substantive rather than a procedural matter. Since Saipem’s claim was based on expropriation and the expropriating authority was a judicial body, the Tribunal raised the question of a possible application by analogy of the exhaustion of local remedies requirement. However, the Tribunal refrained from deciding the issue, which was left for consideration at the merits stage.527 On the merits, the Tribunal held that ‘Saipem’s case is one of expropriation’ and that expropriation by a court does not necessarily presuppose a denial of justice. Accordingly, the Tribunal considered that ‘exhaustion of local remedies does not constitute a substantive requirement of a finding of expropriation by a court.’528 Other tribunals, however, have taken a somewhat different approach. The Award in Parkerings v Lithuania repeatedly referred to the possibility or the need for obtaining

523 Generation Ukraine v Ukraine, Award (16 September 2003) para 20.33. But see Cairn Energy v India (UNCITRAL), Award (21 December 2020) paras 854–874. 524 Waste Management v Mexico II (AF), Award (30 April 2004) paras 97, 116. 525 ibid para 116. 526 Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 121. 527 Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 150–153. 528 Saipem v Bangladesh, Award (30 June 2009) para 181.

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preliminary determinations by domestic courts, without explaining the relationship of this requirement to Art. 26.529 In Helnan v Egypt, the Tribunal found that the Claimant never attempted to challenge the measure (the downgrading of its hotel) before the competent Egyptian administrative courts.530 According to the Tribunal, ‘Helnan’s own behaviour and its failure to take the legal steps to challenge the downgrade of the hotel disqualify its claim before this Tribunal that such downgrading was made in breach of the Treaty.’531 The Claimant sought the annulment of the Award. The Helnan ad hoc Committee disagreed with the Tribunal and stated:

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The Tribunal’s finding on this issue . . . was a manifest excess of its powers. An ICSID tribunal may not decline to make a finding of breach of treaty on the ground that the investor ought to have pursued local remedies or otherwise validated the substance of its claims by recourse to the courts of the host State.532

The ad hoc Committee stated further:

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46. The Tribunal accepts in paragraph 148 of its Award that there was no requirement for Helnan to exhaust local remedies before starting the arbitration. But it then proceeds, relying on a passage in Generation Ukraine, to find as a matter of substance that the failure of Helnan to challenge the Ministerial decision in the administrative courts means that that decision ‘cannot be seen as a breach of Treaty.’ 47. The problem with the Tribunal’s reasoning is that this is to do by the back door that which the Convention expressly excludes by the front door. Many national legal systems possess highly developed remedies of judicial review. Yet it would empty the development of investment arbitration of much of its force and effect, if, despite a clear intention of States parties not to require the pursuit of local remedies as a pre-condition to arbitration, such a requirement were to be read back in as part of the substantive cause of action. . . . 53. A requirement to pursue local court remedies would have the effect of disentitling a claimant from pursuing its direct treaty claim for failure by the Executive to afford fair and equitable treatment, even where the decision was taken at the highest level of government within the host State. It would leave the investor only with a complaint of unfair treatment based upon denial of justice in the event that the process of judicial review of the Ministerial decision was itself unfair. Such a consequence would be contrary to the express provisions of Article 26, incorporated into the parties’ compromis, since it would have the effect of substituting another remedy for that provided under the BIT and the ICSID Convention.533

The ad hoc Committee, however, did not annul the Award, because it found that the Tribunal’s finding on this point had no effect on the rest of the Award.534

529 Parkerings v Lithuania, Award (11 September 2007) paras 316–320, 344, 360, 361, 449, 453, 454. See also Toto v Lebanon, Award (7 June 2012) para 163–164. 530 Helnan v Egypt, Award (3 July 2008) para 148. 531 ibid para 162. 532 Helnan v Egypt, Decision on Annulment (14 June 2010) para 9. 533 ibid paras 46–47, 53. See also Cairn Energy v India (UNCITRAL), Award (21 December 2020) paras 854–874, where the Tribunal reached a similar conclusion. 534 Helnan v Egypt, Decision on Annulment (14 June 2010) para 57.

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Recent decisions have followed the logic of the Helnan ad hoc Committee. In Quiborax v Bolivia, the Respondent argued that the Claimants had not made reasonable efforts to obtain the revocation of Bolivia’s alleged breaches (in particular, a Revocation Decree) of the BIT before local courts, and that their claims were therefore premature.535 According to the Respondent, such reasonable efforts were a constitutive element of a breach of treaty and international law. It specified that [t]his requirement cannot and should not be confused with a procedural requirement to exhaust local remedies before resorting to an international tribunal. On the contrary, it provides that an international illicit act can only be established through a definitive decision of the State that affects the investor’s rights.536

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The Tribunal disagreed with the Respondent’s argument.537 It pointed out that the BIT contained ‘a fork-in-the-road provision that would have prevented the Claimants from bringing their case to an arbitral tribunal if they would have first gone through the local judicial channels.’538 In Crystallex v Venezuela, the Tribunal rejected the argument put forward by Venezuela that neglect of local remedies should be viewed as a ‘determinative factor on the merits of an expropriation claim.’539 The Tribunal pointed out that the applicable Canada–Venezuela BIT required the investor to terminate any domestic proceedings in order to pursue its international remedies.540 In the view of the Tribunal, accepting Argentina’s argument would mean ‘bringing in by the back door a requirement that is excluded at the front door (i.e., an exhaustion requirement as a pre-condition to arbitration).’541

4. General Considerations 363

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It is questionable whether insistence by a host State on the exhaustion of local remedies prior to ICSID arbitration serves any useful purpose. Most consent agreements do not, in fact, contain this condition. Some of the BITs that refer to resort to local remedies do so under severe time constraints, demonstrating the half-hearted nature of the adherence to the principle of exhaustion of local remedies. Claimants have often succeeded in avoiding the imposition of a requirement to utilize local remedies for a limited time by relying on MFN clauses in the relevant BITs. The cases examined above show a consistent approach of ICSID tribunals not to impose an obligation to exhaust local remedies before a case is brought to international arbitration. Nevertheless, some tribunals have required an attempt to seek redress before the courts of the host State not as a procedural prerequisite, but in order to show that a substantive standard under the treaty had been violated.

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Quiborax v Bolivia, Award (16 September 2015) para 150. ibid para 151. 537 ibid para 160. ibid para 158. Crystallex v Venezuela (AF), Award (4 April 2016) para 710. Canada–Venezuela BIT (signed 1 July 1996, entered into force 28 January 1998) Art. XII(3). Crystallex v Venezuela (AF), Award (4 April 2016) para 710 (quoting affirmatively from Helnan v Egypt, Decision on Annulment (14 June 2010) para 51).

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Article 27 (1) No Contracting State shall give diplomatic protection, or bring an international claim, in respect of a dispute which one of its nationals and another Contracting State shall have consented to submit or shall have submitted to arbitration under this Convention, unless such other Contracting State shall have failed to abide by and comply with the award rendered in such dispute. (2) Diplomatic protection, for the purposes of paragraph (1), shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.

OUTLINE Paragraphs I. INTRODUCTION 1–12 II. INTERPRETATION 13–65 A. General 13 B. ‘(1) No Contracting State . . .’ 14–16 C. ‘. . . shall give diplomatic protection, . . .’ 17–22 D. ‘. . . or bring an international claim, . . .’ 23–31 1. Inter-State Arbitration 23–30 2. The International Court of Justice 31 E. ‘. . . in respect of a dispute which one of its nationals and another Contracting State . . .’ 32–38 F. ‘. . . shall have consented to submit or shall have submitted to arbitration under this Convention, . . .’ 39–46 G. ‘. . . unless such other Contracting State shall have failed to abide by and comply with the award rendered in such dispute.’ 47–55 H. ‘(2) Diplomatic protection, for the purposes of paragraph (1), shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.’ 56–65

BIBLIOGRAPHY Juratowitch, Ben, ‘The Relationship between Diplomatic Protection and Investment Treaties’ (2008) 23 ICSID Review 10 Kaufmann-Kohler, Gabrielle, ‘Non-Disputing State Submissions in Investment Arbitration: Resurgence of Diplomatic Protection?’ in Laurence Boisson de Chazournes, Marcelo G Cohen and Jorge E Viñuales (eds), Diplomatic and Judicial Means of Dispute Settlement (OUP 2012) 307 Kokott, Juliane, ‘The Role of Diplomatic Protection in the Field of the Protection of Foreign Investment’ in International Law Association (ed), Report for the 70th Conference of the Law Association (ILA) in New Delhi (2002) (ILA 2002) 259

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Kriebaum, Ursula, ‘Evaluating Social Benefits and Costs of Investment Treaties: Depoliticization of Investment Disputes’ (2018) 33 ICSID Review 14 Malintoppi, Loretta and Haeri, Hussein, ‘The Non-Disputing Party in Investment Arbitration: An Interested Player or the Third Man Out?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 565 Parlett, Kate, ‘Diplomatic Protection and Investment Arbitration’ in Rainer Hofmann and Christian J Tams (eds), International Investment Law and General International Law (Edward Elgar 2011) 211 Potestà, Michele, ‘International Decision: Republic of Italy v Republic of Cuba, Interim Award’ (2012) 106 American Journal of International Law 341 ‘State-to-State Dispute Settlement Pursuant to Bilateral Investment Treaties: Is There Potential?’ in Nerina Boschiero and others (eds), International Courts and the Development of International Law: Essays in Honour of Tullio Treves (Asser Press 2013) 753 Roberts, Anthea, ‘State-to-State Investment Treaty Arbitration: A Hybrid Theory of Interdependent Rights and Shared Interpretive Authority’ (2014) 55 Harvard International Law Journal 1 Schreuer, Christoph, ‘Investment Protection and International Relations’ in August Reinisch and Ursula Kriebaum (eds), The Law of International Relations: Liber Amicorum Hanspeter Neuhold (Eleven 2007) 345 Tejera Pérez, Victorino J, ‘Diplomatic Protection Revival for Failure to Comply with Investment Arbitration Awards’ (2012) 3 Journal of International Dispute Settlement 445 Vermeer-Künzli, Annemarieke, ‘As If: The Legal Fiction in Diplomatic Protection’ (2007) 18 European Journal of International Law 68

I. INTRODUCTION 1

Diplomatic protection is a concept of customary international law whereby a State espouses the claim of its national against another State and pursues it in its own name.1 It was developed as a consequence of the non-availability of international remedies to individuals and corporations under traditional international law. Diplomatic protection depends on a number of conditions. The individual’s or corporation’s nationality of the protecting State must be established. This bond of nationality must have existed continuously from the time of the injury until the claim is made.2 There must have

1 In 2006, the International Law Commission (ILC) adopted Draft Articles on Diplomatic Protection, see ILC, ‘Draft Articles on Diplomatic Protection’ (2006) GAOR 61st Session Supp 10, 16. Art. 17 of these Draft Articles (‘Special rules of international law’) states: ‘The present draft articles do not apply to the extent that they are inconsistent with special rules of international law, such as treaty provisions for the protection of investments.’ The Commentary to Draft Article 17 makes it clear that the Draft Articles do not apply to the regime for the protection of the rights of foreign investors provided by bilateral and multilateral investment treaties to the extent that they are inconsistent with the provisions of such treaties. For a review of the debate on the ‘fiction’ on which diplomatic protection is based, ie, the fact that an injury to an individual is treated as if it were an injury to the State of the individual’s nationality, see Annemarieke Vermeer-Künzli, ‘As If: The Legal Fiction in Diplomatic Protection’ (2007) 18 EJIL 68. 2 See ILC Draft Articles on Diplomatic Protection, Art. 5 (‘Continuous nationality of a natural person’): ‘1. A State is entitled to exercise diplomatic protection in respect of a person who was a national of that State continuously from the date of injury to the date of the official presentation of the claim. Continuity is presumed if that nationality existed at both these dates.’

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been a wrongful act under international law on the part of the State against which diplomatic protection is to be exercised. The legal remedies in the State that has allegedly committed the violation must have been exhausted by the individual or corporation concerned.3 In addition to these stringent legal requirements, a number of political factors reduce the usefulness of this device to the private party. The individual or corporation has no right to diplomatic protection under international law but depends on the political discretion of his government. The government may refuse to take up the claim. It may discontinue diplomatic protection at any time. It may waive the national’s claim, or agree to a reduced settlement. As soon as a State has taken up the claim of its national, the claim becomes part of the foreign policy process with all the attendant political risks.4 Diplomatic protection as an institution of international law has not remained unchallenged. Under the so-called Calvo Doctrine, Latin American countries have sought to exclude any special rights for foreigners.5 This has led them to reject diplomatic protection as an undesirable, or even impermissible, interference in their internal affairs or to limit it to cases of denial of justice. Against this background, the arbitration procedure provided by ICSID offers considerable advantages to both sides. The foreign investor no longer depends on the uncertainties of diplomatic protection, but obtains direct access to an international remedy, while the host State will not have to face multiple claims and claimants (History, Vol. II, pp. 242, 303, 372, 464, 527).6 The dispute settlement process is removed from the 3 See for instance Interhandel (Switzerland v United States) [1959] ICJ Rep 6, 27 (stating that ‘[t]he rule that local remedies must be exhausted before international proceedings may be instituted is a well-established rule of customary international law; the rule has been generally observed in cases in which a State has adopted the cause of its national whose rights are claimed to have been disregarded in another State in violation of international law’). See also Wintershall v Argentina, Award (8 December 2008) paras 110–111. 4 Barcelona Traction, Light and Power Company, Ltd (Belgium v Spain) (New Application 1962) [1970] ICJ Rep 3, paras 78–79. 5 Echoes of the Calvo Doctrine can still be heard in ICSID arbitrations. Respondent States have often objected to the jurisdiction of ICSID tribunals arguing that the investors had agreed to national forum selection clauses, thus precluding ICSID arbitration. ICSID tribunals have uniformly rejected this argument, stressing the difference between the proceedings before local courts, which concern disputes arising out of a breach of the contractual agreements, and the jurisdiction of ICSID tribunals, based on a treaty violation. See Art. 26, paras 101–167. In particular, in AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 97–99, one of Argentina’s jurisdictional objections drew a comparison between the waiver of jurisdiction in that case and the Calvo Clause. The Tribunal, in its Decision on Jurisdiction, rejected the comparison as irrelevant and stated that the Calvo Clause could only make sense by reference to the notion of diplomatic protection, a notion which ‘is per definition put aside’ under the ICSID system of dispute settlement. See also Christoph Schreuer, ‘Calvo’s Grandchildren: The Return of Local Remedies in Investment Arbitration’ (2005) 4 LPICT 1. For other ICSID cases referring to the Calvo Doctrine in general, see ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) para 94; von Pezold and others v Zimbabwe, Award (28 July 2015) para 541; OPIC Karimum v Venezuela, Award (28 May 2013) para 114, point 14; Suez and others v Argentina, Decision on Liability (30 July 2010) Separate Opinion Nikken, paras 12–13. 6 For the observation that the discretionary nature of diplomatic protection and the restrictive rule laid down in Barcelona Traction have prompted States to resort to BITs, which allow investors to settle their investment disputes with the host State directly before ad hoc or ICSID arbitral tribunals, see Juliane Kokott, ‘The Role of Diplomatic Protection in the Field of the Protection of Foreign Investment’ in International Law Association (ed), Report for the 70th Conference of the Law Association (ILA) in New Delhi (2002) (ILA 2002) 259, 265. See also ibid 276–277.

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political and diplomatic realm and subjected to objective legal criteria (ibid., pp. 242, 273, 303, 372, 464).7 Moreover, there is no requirement to exhaust local remedies before resorting to ICSID arbitration unless this has been made an explicit condition of consent by the host State (see Art. 26, paras. 297–364). In turn, by consenting to ICSID arbitration the host State obtains the assurance that it will not be exposed to an international claim by the investor’s home State, as long as it abides by the award. Art. 27 must also be seen in the context of the exclusive remedy rule of Art. 26. Like Art. 26, Art. 27 only applies to arbitration, but not to conciliation. As a condition of submission to ICSID arbitration, the parties not only relinquish resort to national and international judicial remedies, but also forgo resort to the political remedy of diplomatic protection. However, there is an important difference between the two provisions. Whereas the exclusive remedy rule of Art. 26 is subject to variation by the parties (‘unless otherwise stated’), the exclusion of diplomatic protection is mandatory. In other words, it is not possible for the investor to reserve the right to diplomatic protection when submitting to ICSID arbitration. This mandatory exclusion of diplomatic protection makes sense. A combination of arbitration and diplomatic protection would lead to undesirable results. The balance of interests between the parties would be upset, if the host State, after consenting to international arbitration, remained exposed to diplomatic protection by the investor’s home State. In fact, the guarantee against diplomatic protection may constitute a strong incentive for the host State to consent to arbitration. Also, the arbitration process between the host State and the foreign investor could be severely hampered by simultaneous efforts to pursue the claim through diplomatic channels. The system established by the ICSID Convention has reduced the relevance of diplomatic protection.8 For instance, the Tribunal in CMS v Argentina held that [d]iplomatic protection itself has been dwindling in current international law, as the State of nationality is no longer considered to be protecting its own interest in the claim but that of the individual affected. It is precisely this kind of arrangement that has come to prevail under international law, particularly in respect of foreign investment, the paramount example being that of the 1965 Convention.9

7 For a discussion of the depoliticization of disputes conflicts from the political arena of diplomatic protection to a pre-formulated dispute settlement process, see Ursula Kriebaum, ‘Evaluating Social Benefits and Costs of Investment Treaties: Depoliticization of Investment Disputes’ (2018) 33 ICSID Rev 14. 8 The diminishing role of diplomatic protection in the settlement of investment disputes has been acknowledged by the International Court of Justice (ICJ) in its judgment on preliminary objections in the Diallo case, where the ICJ held in particular: ‘[I]n contemporary international law, the protection of the rights of companies and the rights of their shareholders, and the settlement of the associated disputes, are essentially governed by bilateral or multilateral agreements for the protection of foreign investments . . . and also by contracts between States and foreign investors. In that context, the role of diplomatic protection somewhat faded, as in practice recourse is only made to it in rare cases where treaty régimes do not exist or have proved inoperative.’ Ahmadou Sadio Diallo (Guinea v DR Congo) (Preliminary Objections) [2007] ICJ Rep 582, para 88. See also Ben Juratowitch, ‘The Relationship between Diplomatic Protection and Investment Treaties’ (2008) 23 ICSID Rev 10; Kate Parlett, ‘Diplomatic Protection and Investment Arbitration’ in Rainer Hofmann and Christian J Tams (eds), International Investment Law and General International Law (Edward Elgar 2011) 211. 9 CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 45.

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Thus, while diplomatic protection remains available, when Contracting States have submitted their disputes to arbitration under the Convention, its role is confined to situations where Contracting States have failed to abide by and comply with the award rendered in such arbitrations. In addition, Art. 27(2) distinguishes between diplomatic protection and informal diplomatic exchanges that have the sole purpose of facilitating a settlement of the dispute.10 Art. 27 is the last of three Articles in the Convention’s Chapter II on ‘Jurisdiction of the Centre.’ But it would be erroneous to assume that abstention from diplomatic protection is a condition for the Centre’s jurisdiction. A violation of Art. 27 will not affect the Centre’s jurisdiction, or the tribunal’s competence, but will enable the host State to legitimately resist diplomatic protection. An international court or tribunal in an inter-State case, before which a claim is brought in violation of Art. 27, will have to decline jurisdiction11 (see also para. 27 infra). In Banro v DR Congo,12 Canada – not a Contracting Party to the ICSID Convention at the time – gave diplomatic protection to its national, Banro Resource. The request for arbitration was first introduced by an affiliate of Banro Resource, the US company Banro American. The United States did not provide diplomatic protection to Banro American. The Tribunal said:

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[T]he United States did not intervene diplomatically in favour of Banro American. If they had, they would have violated Article 27 of the ICSID Convention and would have committed an unlawful act under international law, however, such act would not affect the jurisdiction of this Tribunal.13

A similar conclusion was reached in Autopista v Venezuela where the Tribunal found that the efforts of Mexican officials towards an amicable resolution of the dispute did not affect jurisdiction:

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While active solicitation of diplomatic protection by the investor might be a violation of Article 26, there is no support, however, for the proposition that an ICSID tribunal may deny jurisdiction on this ground.14

The reference to Art. 26 above is not accidental, since Mexico was not a Contracting State of the ICSID Convention at the time and therefore Art. 27(1) did not apply.15 This notwithstanding, the Tribunal stated that ‘the bar on diplomatic protection under Art. 27(1) is not meant to discourage the amicable resolution of disputes.’16 In any event, the Tribunal added, even if Mexico’s interventions were to constitute prohibited diplomatic interventions in the meaning of Art. 27, this would have no bearing on its jurisdiction.17 In Cervin v Costa Rica, the Respondent relied on Banro to argue that it would be contrary to Art. 27 for the Claimants to resort to ICSID arbitration after they sought the

10 See Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 138. 11 Chittharanjan F Amerasinghe, ‘The Jurisdiction of the International Centre for the Settlement of Investment Disputes’ (1979) 19 Indian JIL 166, 226–227. 12 Banro v DR Congo, Award (1 September 2000) paras 18, 19. 13 ibid para 18. 14 Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) para 75. 15 ibid para 74. 16 ibid para 72. 17 ibid para 140.

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diplomatic protection of the Mexican government.18 In that case, after the investment had taken place, the Mexican Embassy in Costa Rica had written to the Costa Rican Ministry of Foreign Affairs to seek a meeting to discuss a projected decree that was considered prejudicial to the group of companies to which the Claimants belonged. The Tribunal recalled that the purpose of Art. 27 is to avoid that claims between investors and States and diplomatic claims between States take place in parallel. The Tribunal further stressed that the meaning and purpose of Art. 27 is to prevent any resort to diplomatic protection once the parties have agreed to submit a dispute to investment arbitration and not the opposite. Finally, the Tribunal noted that the letter in question did not amount to the granting of diplomatic protection, but was an informal diplomatic step aimed at facilitating a disagreement that arose at the time.19

II. INTERPRETATION A. General 13

Diplomatic protection does not appear to have created any practical problems in the context of ICSID arbitration. Nowadays most disputes relating to investments are referred to arbitration through the mechanism offered by treaties on investment protection. Investment tribunals have pointed to these treaty arrangements as a lex specialis which, although not amounting to a rule of customary law, can now be considered the general rule in respect of foreign investments.20 Diplomatic protection has become ‘a residual mechanism available when the affected individual has no direct channel to claim on its own right.’21 B. ‘(1) No Contracting State . . .’

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Under the terms of Art. 27, the obligation to refrain from diplomatic protection is incumbent upon Contracting States. Under normal circumstances, States that are not parties to the ICSID Convention will not have the opportunity to exercise diplomatic protection in the context of ICSID arbitration, since access to the Centre is open only to nationals of Contracting States (History, Vol. II, p. 406). This notwithstanding, there are possible situations where cases involving nationals of non-Contracting States might be subject to ICSID arbitration. An investor may have dual nationality or his or her nationality may be unclear (see also para. 32 infra). A corporate investor may possess the nationality of a Contracting State, while a shareholder in the corporation does not (see Art. 25, para. 284). In situations of this kind, the investor may have gained access to ICSID arbitration as a national of a Contracting State. A non-Contracting State may, nevertheless, claim the investor as its own national and proceed to exercise diplomatic protection (see Art. 25, paras. 1141–1145, 1230–1241). But in the case of diplomatic protection by a non-Contracting State, the host State may insist on the exhaustion of 18 Cervin v Costa Rica, Decision on Jurisdiction (15 December 2014) para 311. Mexico was not a Contracting Party to the ICSID Convention at the time. As noted above, its involvement was limited to the steps undertaken by the Mexican Embassy in Costa Rica seeking to safeguard the interests of the corporate group to which the Claimant belonged. 19 ibid paras 311–315. 20 Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 157. 21 ibid para 145. See also Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 157.

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local remedies since the rule of non-exhaustion (see Art. 26, paras. 298–301) only applies to relations between Contracting States. There is no simple solution to situations of this kind. The obligation imposed by Art. 27 does not apply to non-Contracting States. Since diplomatic protection is a right of the protecting State, and not of the national to be protected, consent to ICSID arbitration by the investor cannot be construed as a valid waiver of diplomatic protection. This is why Art. 27 is addressed to Contracting States and not to investors. On the other hand, diplomatic protection is rarely accorded, unless it is actively solicited by the national to be protected. Any solicitation of diplomatic protection (except in the case of a non-performance of an award) by an investor who has consented to ICSID arbitration is clearly contrary to the spirit of the Convention. It is also a violation of Art. 26, which excludes any other remedy where consent to arbitration has been given (see Art. 26, para. 296). A Tribunal that is aware of an attempt by a non-State party before it to enlist the diplomatic protection of a nonContracting State to the Convention should view this action as a sign of procedural impropriety. Where appropriate, it might issue provisional measures in accordance with Art. 47 of the Convention to enjoin the party from seeking diplomatic protection. Non-compliance with provisional measures, or other signs of bad faith, may be taken into account when rendering the award on the merits and for the allocation of costs (see Art. 47, paras. 44–51; Art. 61, paras. 16, 57–68). Two examples of ICSID arbitrations where a non-contracting State to the ICSID Convention (Mexico) provided diplomatic assistance to one of the parties have already been mentioned.22 Another interesting example of this kind of situation is provided by Banro v DR Congo where Canada had provided diplomatic protection to Banro Resource, while arbitration was sought by a US company of the Banro group, Banro American (see para. 9 supra). The Tribunal held that the prohibition of simultaneously requesting diplomatic protection and asserting ICSID jurisdiction applies equally to the investor and the State and that Art. 27, read in the context of Art. 26, must be interpreted in the sense of preventing the investor from using a plurality of channels.23 The Tribunal observed that, since Canada had chosen not to be a party to the ICSID Convention, it was free to provide diplomatic protection to one of its nationals. However, the Tribunal also noted that the Banro group was not at liberty to pursue diplomatic protection on the part of the Canadian Government, by using the nationality of the parent company, Banro Resource, as well as ICSID arbitration proceedings, by availing itself of the nationality of one of its subsidiaries, Banro American.24 The Tribunal said: [S]ince the ICSID Convention has as its purpose and aim to protect the host State from diplomatic intervention on the part of the national State of the investor and to ‘depoliticize’ investment relations, it would go against this aim and purpose to expose the State to, at the same time, both diplomatic pressure and an arbitration claim.25

22 See Autopista v Venezuela, Decision on Jurisdiction (27 September 2001); Cervin v Costa Rica, Decision on Jurisdiction (15 December 2014). 23 Banro v DR Congo, Award (1 September 2000) para 20. 24 ibid para 23. 25 ibid para 19.

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C. ‘. . . shall give diplomatic protection, . . .’ 17

The Report of the Executive Directors summarizes the idea underlying the exclusion of diplomatic protection in Art. 27 as follows: 33. When a host State consents to the submission of a dispute with an investor to the Centre, thereby giving the investor direct access to an international jurisdiction, the investor should not be in a position to ask his State to espouse his case and that State should not be permitted to do so. Accordingly, Article 27 expressly prohibits a Contracting State from giving diplomatic protection, or bringing an international claim, in respect of a dispute which one of its nationals and another Contracting State have consented to submit, or have submitted, to arbitration under the Convention, unless the State party to the dispute fails to honor the award rendered in that dispute.26

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In the course of the Convention’s drafting, the exclusion of diplomatic protection was variously explained in terms of the obligation to abide by the agreement to arbitrate (History, Vol. II, pp. 74, 80, 221), the protection of the host State from having to deal with a multiplicity of claims and claimants (ibid., pp. 242, 303, 372, 464, 527), the removal of the dispute from the realm of politics and diplomacy into the realm of law (ibid., pp. 242, 273, 303, 372, 464), and the absence of any necessity for diplomatic protection once the investor gained direct access to an international remedy (ibid., pp. 221, 242, 273, 303, 372, 432, 464, 960). Although there seemed to be general agreement among the drafters of the Convention that diplomatic protection should not be available under the conditions described in Art. 27, some experts objected to mentioning the concept in the Convention at all. Especially experts from Latin America feared that, by expressly excluding diplomatic protection under these conditions, the Convention might imply that it was available otherwise (History, Vol. II, pp. 349, 350, 432, 576). This concern was presumably due to the fact that Latin American States at the time rejected the notion of diplomatic protection as undesirable under the Calvo Doctrine.27 The reference to diplomatic protection was retained nevertheless. The Preliminary Draft of the Convention (History, Vol. II, p. 187) contained a reference to diplomatic protection in its preamble: 3. RECOGNIZING that while such disputes would usually be subject to national legal processes (without prejudice to the right of any State to espouse a claim of one of its nationals in accordance with international law), international methods of settlement may be appropriate in certain cases.

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Following objections by experts from Brazil and from Venezuela (History, Vol. II, pp. 306, 364), the reference to diplomatic protection in the preamble was omitted in the subsequent First Draft (ibid., p. 611) and does not appear in the Convention’s final text. The misgivings of some experts about completely relinquishing the capacity of the investor’s home State to take any action (History, Vol. II, pp. 62 ff., 1032) were accommodated through the insertion of the second paragraph on informal diplomatic exchanges (see also para. 56 infra). The words ‘or bring an international claim’ were put between commas in order to clarify the fact that diplomatic protection would only be 26 (1993) 1 ICSID Reports 23, 30.

27 See para 3 supra.

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suspended under the specific circumstances set forth in the Article (History, Vol. II, p. 1032). Put differently, the words ‘No Contracting State shall give diplomatic protection’ must not be read in isolation, but apply only in respect of a dispute that the parties have consented to submit or have submitted to ICSID arbitration. D. ‘. . . or bring an international claim, . . .’

1. Inter-State Arbitration The reference to an international claim separated by ‘or’ from the phrase dealing with diplomatic protection would indicate that an international claim in this context is something distinct from, or additional to, diplomatic protection. In actual fact, bringing an international claim is a typical element of diplomatic protection. The reason for this particular phrase is the existence of arbitration clauses in many bilateral investment treaties (BITs) for the settlement of disputes between the States parties to the treaties. This opens the possibility of two different arbitration procedures arising from the same claim: one under ICSID between the investor and the host State, the other between the two States based on the alleged violation of the investment treaty.28 In such a situation, the inter-State claim may not be viewed as a form of diplomatic protection. The possibility of two parallel arbitral procedures arising from the same claim albeit with different parties greatly concerned the drafters of the Convention. Mr. Broches pointed out that under these circumstances, abstract questions of interpretation of a treaty might be arbitrated between the States parties to it, but that the outcome of any such arbitration would not affect the decision in the case before ICSID to which the investor was a party (History, Vol. II, pp. 65–66). A separate paragraph was added into the Preliminary Draft (History, Vol. I, p. 136; Vol. II, p. 221) to make this clear:

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(2) Nothing in this Section shall be construed as precluding a Contracting State from founding an international claim against another Contracting State upon the facts of a dispute which one of these Contracting States and a national of the other shall have consented to submit or shall have submitted to arbitration pursuant to this Convention, where those facts also give rise to a dispute concerning the interpretation or application of an agreement between the States concerned; without prejudice, however, to the finality and binding character of any arbitral award rendered pursuant to this Convention as between the parties to the arbitral proceedings.29

In the ensuing debates, Mr. Broches pointed out that an award in a subsequent interState arbitration would not affect an existing ICSID award, but would only be declaratory. However, an ICSID tribunal was likely to consider itself bound by an earlier decision under the bilateral agreement (History, Vol. II, pp. 273–274, 349, 350, 527–528, 576).30 Nevertheless, a number of delegates had misgivings about this provision, fearing it might lead to conflicting decisions or might provide dual remedies in

28 See also Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 376 ff. 29 See also the comment at History, Vol II, 222 and the Annotated First Preliminary Draft Convention, ibid 163 ff. 30 See also Broches (n 28) 376 ff.

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cases where investments were covered by State-run investment insurance (ibid., pp. 433, 435, 528, 577). The conclusion was that the continued availability of interState dispute settlement should be regarded as self-evident, and that the reference to it could give rise to widespread misunderstanding. Therefore, it seemed wiser to drop it (ibid., p. 577). No provision to this effect was introduced in the subsequent drafts nor does the Convention refer to inter-State arbitration. The removal of the clause referring to inter-State arbitration from the drafts did not resolve the underlying problem. Parallel proceedings of this kind do not strictly compete with each other, since they involve different parties. Nevertheless, conflicting decisions on the same question, possibly involving the same set of facts, could occur in practice and would clearly be undesirable. One way of dealing with the matter would be a provision in the BIT barring inter-State arbitration where ICSID arbitration has been instituted or is available. A possible formula was suggested in the 1969 ICSID Model Clauses for Use in Bilateral Investment Agreements.31 Clauses of this kind have been utilized in practice.32 Even in the absence of such a provision in a BIT, a tribunal in an inter-State arbitration may be expected to decline jurisdiction, if the claim brought before it is in conflict with Art. 27. This would be the case if the inter-State proceedings are designed to avoid, obstruct, or influence an ICSID arbitration, or if they are designed to affect the implementation of an ICSID award or revise its outcome. This does not mean that the mere existence of a valid consent to ICSID arbitration will necessarily exclude a claim from inter-State arbitration. Under the terms of Art. 27, a claim may be brought by the investor’s State of nationality, if the host State has failed to abide by the ICSID award (see paras. 47–55 infra). In addition, an investor may have been compensated by an investment insurance operated by its home State. As a consequence, the insurer succeeds to the investor’s claim by way of subrogation. Since the investor’s home State has no access to ICSID arbitration, it may obligate the investor to pursue the claim through ICSID despite the fact that it has been indemnified under the insurance (see Art. 25, paras. 748–758). Alternatively, the investor’s home State may pursue the claim directly against the host State as the investor’s subrogee. Some BITs reserve the right of the investor’s State of nationality to pursue claims through inter-State arbitration against the host State in case of subrogation.33 Contracting parties to a BIT may also seek to interpret or clarify the scope of their treaty obligations via State-to-State arbitration. However, thus far, there are no successful examples of this practice. This is evidenced, for instance, by the Peru v Chile arbitration, which was initiated by the Peruvian Government after Chilean investors 31 Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Agreements (September 1969) Clause II (1969) 8 ILM 1341, 1346. 32 See some older US BITs, such as Turkey–United States BIT (signed 3 December 1985, entered into force 18 March 1990) Art. VII(7); Cameroon–United States BIT (signed 26 February 1986, entered into force 6 April 1989) Art. VIII(9); Senegal–United States BIT (signed 16 December 1983, entered into force 25 October 1990) Art. VIII(7). See also Pamela B Gann, ‘The US Bilateral Investment Treaty Program’ (1985) 21 Stanford JIL 373, 423, 454; Nassib G Ziadé, ‘ICSID and Arab Countries’ (1988) 5(2) News from ICSID 7. The more recent US BITs no longer contain this clause. See also Rudolf Dolzer and Margrete Stevens, Bilateral Investment Treaties (Martinus Nijhoff 1995) 249; Kenneth J Vandevelde, US International Investment Agreements (OUP 2009). 33 See also Nassib G Ziadé, ‘ICSID Clauses in the Subrogation Context’ (1990) 7(2) News from ICSID 6.

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initiated the ICSID case in Lucchetti v Peru.34 Peru argued in Lucchetti v Peru that the dispute pre-dated the entry into force of the Chile–Peru BIT, thus falling outside the scope of the treaty.35 Having failed to reach an agreement with Chile on the matter, Peru initiated State-to-State proceedings to request an interpretation of the BIT and also filed a request for the suspension of the Lucchetti v Peru proceedings, in view of the fact that the ‘Claimants’ Request for Arbitration [was] . . . the subject of a concurrent State-toState dispute between the Republic of Peru and the Republic of Chile.’36 The Tribunal in Lucchetti v Peru dismissed the request for suspension without providing reasons and Peru eventually withdrew the State-to-State claim.37 Another example is provided by the arbitration brought by Ecuador against the United States in the aftermath of the investor–State award rendered in the UNCITRAL arbitration in Chevron v Ecuador.38 While not directly connected with Art. 27 of the ICSID Convention, given that the underlying arbitration was not an ICSID case, the Ecuador v United States arbitration is worth mentioning because it provides an interesting insight into the complexities of inter-State claims in investment arbitration. Displeased with the Tribunal’s interpretation of the Ecuador–United States BIT in Chevron v Ecuador, Ecuador requested the United States to agree to a joint interpretation of the treaty in order to clarify the treaty’s scope.39 Given that the United States failed to respond, Ecuador submitted the dispute regarding the interpretation and application of the treaty to a State-to-State arbitral tribunal for a ‘binding decision in accordance with the applicable rules of international law.’40 The United States argued that Ecuador attempted to re-litigate the Chevron award, and that the BIT’s object and purpose would not allow the State-to-State tribunal to act as an appellate jurisdiction. A majority of the State-to-State tribunal found that the dispute was abstract rather than concrete, and concluded that it had no jurisdiction to entertain the case.41 While the argument raised by the United States remained unanswered, the Tribunal’s decision in Ecuador v United States may imply that, by analogy, Art. 27 of the ICSID Convention would not apply to inter-State disputes generally aimed at interpreting the meaning of treaty provisions in abstracto.42 Another case worth a mention, although outside of the ICSID context, is the Italy v Cuba arbitration.43 In this case, Italy alleged a breach of its own substantive rights under the Cuba–Italy BIT, and at the same time brought a diplomatic protection claim against Cuba on behalf of its nationals.44 Cuba argued in the preliminary phase that the

34 Lucchetti v Peru, Award (7 February 2005). 35 Anthea Roberts, ‘State-to-State Investment Treaty Arbitration: A Hybrid Theory of Interdependent Rights and Shared Interpretive Authority’ (2014) 55 Harvard ILJ 1, 8. See also Luke Eric Peterson, ‘ICSID Tribunal Declines to Halt Investor Arbitration in Deference to State-to-State Arbitration’ (INVEST-SD: Investment Law and Policy Weekly News Bulletin, 19 December 2003). 36 Lucchetti v Peru, Award (7 February 2005) para 7. 37 ibid para 9. 38 Chevron v Ecuador I (UNCITRAL), Partial Award on the Merits (30 March 2010). 39 Ecuador v United States, Request for Arbitration (28 June 2011) paras 12–13. 40 ibid para 1. 41 Ecuador v United States, Award (29 September 2012). 42 See Roberts (n 35) 59. 43 Italy v Cuba, Sentence préliminaire (15 March 2005) and ibid, Sentence finale (15 January 2008). 44 ibid, Sentence préliminaire, paras 24–25.

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compromissory clause of the BIT concerned only disputes relating to the interpretation and application of the BIT, and did not cover the espousal of claims by either State for injuries caused to its own nationals. The majority of the Tribunal rejected Cuba’s argument and held that the compromissory clause in the Cuba–Italy BIT precluded a claim for diplomatic protection only if the investor initiates investor–State proceedings or gives its prior consent to arbitration.45 The majority of the Tribunal based its reasoning on an analogy with Art. 27 of the ICSID Convention, thus adopting the same sequencing approach, even in the absence of a similar provision in the underlying BIT.46

2. The International Court of Justice 31

Art. 64 provides that disputes between Contracting Parties concerning the interpretation or application of the Convention can be referred to the International Court of Justice (ICJ). In the course of the drafting of the Convention, some delegates showed concern that the clause, which eventually became Art. 64, might lead to conflicts with the activities of ICSID tribunals (History, Vol. II, pp. 274, 439, 906). The Report of the Executive Directors clearly establishes that Art. 64 must not be used to undermine or circumvent consent to ICSID arbitration. The Report specifically states that Art. 64 does not: 45. . . . empower a State to institute proceedings before the Court in respect of a dispute which one of its nationals and another Contracting State have consented to submit or have submitted to arbitration, since such proceedings would contravene the provisions of Article 27, unless the other Contracting State had failed to abide by and comply with the award rendered in that dispute.47

E. ‘. . . in respect of a dispute which one of its nationals and another Contracting State . . .’ 32

One of the cornerstones of diplomatic protection is the requirement that the protected individual or corporation must have the nationality of the protecting State. In the case of corporations, difficulties have arisen where the formal aspects of nationality, i.e., the place of the company’s incorporation, or its registered office, do not coincide with the economic control over the corporation, i.e., the nationality of the shareholders. Under traditional international law, as evidenced by the ICJ’s decision in the Barcelona Traction case,48 the company’s incorporation and registered seat are decisive. However, the ICSID Convention offers a more flexible approach towards questions of corporate nationality. For purposes of the Centre’s jurisdiction, the parties may determine the nationality of the foreign investor by agreement under certain circumstances (see Art. 25, paras. 1196–1205). In particular, the disputing parties may agree, under Art. 25(2)(b) of the Convention, to treat a juridical person having the nationality of the host State as a national of another Contracting State because of foreign control ‘for the purposes of this Convention’ (see Art. 25, paras. 1262–1445). The question therefore

45 ibid para 65. 46 See Roberts (n 35) 47. See also Michele Potestà, ‘International Decision: Republic of Italy v Republic of Cuba, Interim Award’ (2012) 106 AJIL 341, 342. 47 (1993) 1 ICSID Reports 23, 32. 48 See Barcelona Traction, Light and Power Company, Ltd (Belgium v Spain) (New Application 1962) [1970] ICJ Rep 3.

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arises whether an agreed determination of nationality between the disputing parties to an ICSID arbitration would also apply to diplomatic protection under Art. 27. No problems are likely to arise in cases covered by the first part of Art. 27(1). If diplomatic protection is disallowed, it makes no difference which concept of nationality is invoked by a State attempting to exercise it. A State claiming to exercise it on the basis of incorporation or location of the corporation’s siège social will be just as much barred by Art. 27(1) as a State relying on foreign control and an agreement of the parties concerning nationality.49 Either the investor is a national of the protecting State, in which case Art. 27(1) will not allow diplomatic protection, or the investor is not a national of the protecting State, in which case diplomatic protection will not be available under traditional international law.50 The question of nationality becomes acute, however, where diplomatic protection is revived as a consequence of a State’s failure to abide by, and comply with, an ICSID award (see paras. 47–55 infra). In this situation, a decision will have to be made whether diplomatic protection may only be exercised by the State that qualifies as the home State in accordance with traditional concepts of corporate nationality, or whether it can also be exercised by the State that qualifies as the home State on the basis of any agreement on nationality that the disputing parties may have made. It has been suggested that, under the Convention, determining which State qualifies as the home State based on different approaches to corporate nationality is secondary in this context.51 After all, Art. 27 is not the only possibility for inter-State recourses under the Convention. Art. 64, which provides for the settlement of disputes concerning the interpretation or application of the Convention between Contracting States by the ICJ, is also an option, as it should be read as giving standing to every Party to the Convention to enforce the obligation to comply with awards. This means that every State party to the Convention would have an enforceable interest in the observance of the Convention irrespective of the nationality of the investor. Therefore, any Contracting State could bring a case before the ICJ to ensure compliance with an award without having to prove a bond of nationality with the national involved in the dispute. It may be true that Art. 64 gives a right of action to all Contracting States since they have an interest in the faithful observance of the Convention (see para. 50 infra). However, this does not resolve the problem of diplomatic protection and the attendant question of nationality. While any Contracting Party may require the Convention’s observance in general terms, only the national State of an aggrieved investor demanding compliance with an ICSID award may espouse the claim and pursue it in its own name. It may demand payment directly to the protecting State, it may freeze assets of the delinquent State to obtain payment, and it may offset any claim that the delinquent State may have against the protecting State. A State exercising diplomatic protection is in a 49 See Broches (n 28) 375. 50 Paul C Szasz, ‘The Investment Disputes Convention – Opportunities and Pitfalls (How to Submit Disputes to ICSID)’ (1970) 5 J Law & Econ Dev 23, 35. 51 Broches (n 28) 379 ff. Cf also Application of the Convention on the Prevention and Punishment of the Crime of Genocide (The Gambia v Myanmar) Order (23 January 2020) para 41, where the Court held that States parties to the Genocide Convention have a common interest to ensure that acts of genocide are prevented and that, if they occur, their authors do not enjoy impunity. In other words, such obligations are erga omnes partes, ie, they are owed by any State party to all the other States parties to the Convention. See also Questions Relating to the Obligation to Prosecute or Extradite (Belgium v Senegal) [2012] ICJ Rep 422, para 68.

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much stronger position than a Contracting State demanding compliance with the Convention in general terms. If the right to diplomatic protection becomes available because the State party to ICSID arbitration has failed to comply with an award, the more flexible model of nationality under the Convention should be applied. This means that a valid agreement on nationality should also apply to the post-award phase for purposes of diplomatic protection. The wording of Art. 25(2)(b) envisages that the agreement on nationality should be ‘for the purposes of this Convention’ and not just for purposes of ICSID’s jurisdiction. A systematic interpretation of the Convention would therefore suggest that it is more rational to use the same concept of nationality for purposes of jurisdiction and for purposes of securing compliance with an award. Most importantly, the effectiveness of the Convention requires that the remedy of diplomatic protection to enforce awards be available to all investors irrespective of the basis on which they have gained access to the Centre. It would not make sense to grant the possibility to obtain post-award diplomatic protection to investors who are incorporated, or have their registered office, in another Contracting State, but not to those which the host State consented to treat as nationals of another Contracting State. Any expectation that non-compliance with awards would lead to different consequences for different categories of investors is liable to have an adverse effect on the entire arbitration process. Art. 27(1) was also analyzed by an ICSID tribunal in the context of claims advanced by multiple parties. The Tribunal in Alemanni and others v Argentina addressed the Respondent’s objection that the continuation of the arbitration was precluded altogether, because it constituted a form of mass or collective arbitral proceeding that is not within the scope of the ICSID Convention.52 The Tribunal held that, based on the principles of treaty interpretation, it saw ‘no reasonable basis’ for reading into the text of Art. 25(1) the additional words ‘but only one’ ‘national of another Contracting State’53 (see also Art. 25, paras. 589–597). Moreover, the Tribunal considered that this conclusion would also not lead to difficulties if Arts. 27, 36, 38, or 39 of the ICSID Convention were applied directly or viewed as part of the ‘context’ for the interpretation of Art. 25, since these Articles would apply regardless of the number of claimant parties. With particular regard to Art. 27, the Tribunal held that this provision would ‘operate seamlessly in the case of a plurality of claimants all holding the same nationality, since the parent State’s obligation would be equal and identical for all of them.’54 F. ‘. . . shall have consented to submit or shall have submitted to arbitration under this Convention, . . .’

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Under the wording of the Convention, the suspension of the right to diplomatic protection operates from the moment consent is given to ICSID arbitration, and not just from the moment proceedings are instituted. At one point in the course of the Convention’s drafting, a suggestion was made to allow diplomatic protection until a dispute is brought before the Centre, and to exclude it only during the period when proceedings are actually in progress, since diplomatic means might be used to prevent litigation (History, Vol. II, p. 763). A show of hands on this proposal revealed that a majority was against it (ibid., p. 765) (see also para. 56 infra). 52 Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) para 261. 53 ibid para 271. 54 ibid para 272.

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Where the existence of valid consent to ICSID arbitration is disputed by the opposing party, the appropriate procedure would be to submit a request for arbitration. If the Secretary-General has found, in accordance with Art. 36(3), that the dispute is manifestly outside the jurisdiction of the Centre, or if the tribunal has determined that the Centre does not have jurisdiction, Art. 27 does not apply and any right to diplomatic protection may be exercised. This rule is sometimes stated in BITs (see para. 26 supra; paras. 43, 45 infra). Practical problems may arise in the unlikely case that the investor does not him or herself institute proceedings against the host State and the investor’s home State considers the Centre not to have jurisdiction in order to start exercising diplomatic protection against the host State. In such a situation, the host State against whom the claim by the investor’s home State is directed is unlikely to institute ICSID proceedings against the investor given that it would find itself in a defensive role. Even if the host State has merely argued, for purposes of defending the inter-State claim under Art. 27 of the Convention, that the Centre has jurisdiction, it can no longer credibly dispute jurisdiction in any subsequent ICSID proceedings with the investor. Under the wording of Art. 27, both parties to a dispute, the foreign investor and the host State, must have consented to arbitration. Consent in writing in accordance with Art. 25 need not be expressed in a single instrument between the parties. It may be based on investment legislation in the host State, or on a clause in a treaty between the host State and the investor’s home State. In such a case, the acceptance by the investor of the host State’s offer made in legislation or treaty may take place at any time before the institution of proceedings or, most likely, by actually commencing proceedings before the Centre (see Art. 25, paras. 814–824, 850–862). In situations where the host State has offered consent to ICSID arbitration, but the investor has neither explicitly accepted the offer, nor started proceedings, Art. 27 does not (yet) apply. Therefore, the investor retains the option to request diplomatic protection from its home State despite the fact that ICSID arbitration is open to it. But in that case, the investor would first have to exhaust local remedies before asking his or her home State to exercise diplomatic protection. It does not appear, however, that this question was ever considered during the Convention’s drafting. This situation may be remedied by an agreement between the host State and the investor’s home State to the effect that no diplomatic protection will be given where the host State has offered consent to submit disputes to ICSID arbitration. The 1969 ICSID Model Clauses for Use in Bilateral Investment Agreements suggested a specific formula for this purpose.55 As the commentary to that provision explains, the principle on which

55 Model Clauses Relating to the Convention on the Settlement of Investment Disputes Designed for Use in Bilateral Investment Agreements (September 1969) Clause IX, (1969) 8 ILM 1341, 1345: Neither Contracting Party shall give diplomatic protection, or bring an international claim in respect of any legal dispute between one of its nationals and the other Party, if such other Party shall have consented to submit the dispute to the jurisdiction of the International Centre for Settlement of Investment Disputes for settlement by arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, unless (i) the Secretary-General of the Centre or an Arbitral Tribunal constituted by it decides that that dispute is not within the jurisdiction of the Centre (for some reason other than the failure of such national to consent to such jurisdiction) or (ii) that Party should fail to abide by or to comply with any award rendered by such a Tribunal.

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it is based is ‘that the host State might already be offered immunity from diplomatic intervention or international claims if and as soon as it indicates its willingness to submit a dispute to the Centre – even if the investor fails to do so.’56 To make it absolutely clear that the investor does not have a choice of remedies, another formula is suggested in the same document: IX. Condition for requesting diplomatic intervention [The Contracting Parties agree that] Article 27 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States shall also apply in respect of any dispute which the national concerned has declined to submit to the International Centre for Settlement of Investment Disputes for settlement by arbitration under the Convention.57

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Older British BITs deal with the relation between diplomatic protection and submission of disputes to the Centre in the following terms: Neither Contracting Party shall pursue through the diplomatic channel any dispute referred to the Centre unless (a) the Secretary-General of the Centre, or a conciliation commission or an arbitral tribunal constituted by it, decides that the dispute is not within the jurisdiction of the Centre, or (b) the other Contracting Party should fail to abide by or to comply with any award rendered by an arbitral tribunal.58

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Unfortunately, the terse formula ‘any dispute referred to the Centre’ is not very clear.59 Presumably, ‘referred to’ covers not only the actual institution of proceedings, but also

56 ibid para 12. 57 ibid 1351. 58 See UK Model IPPA (2008) Art. 8(4) (Alternative I); Dolzer and Stevens (n 32) 235. For other examples of similar provisions, see UAE–United Kingdom BIT (signed 8 December 1992, entered into force 15 December 1993) Art. 8(4); Turkey–United Kingdom BIT (signed 15 March 1991, entered into force 22 October 1996) Art. 8(3); Burundi–United Kingdom BIT (signed and entered into force 13 September 1990) Art. 8(4). See also BLEU–Sri Lanka BIT (signed 15 April 1982, entered into force 26 April 1984) Art. 10(6); Sri Lanka–Sweden BIT (signed and entered into force 30 April 1982) Art. 9(3); Sweden– Yemen BIT (signed 29 October 1983, entered into force 23 February 1984) Art. 7(2); Sri Lanka– Switzerland BIT (signed 23 September 1981, entered into force 12 February 1982) Art. 9(3); Australia–Laos BIT (signed 6 April 1994, entered into force 8 April 1995) Art. 12(4). Art. XI(5) of the Australia–Indonesia BIT (signed 17 November 1992, entered into force 29 July 1993, terminated 6 August 2020) states that the home State is precluded from exercising diplomatic protection once a dispute has been referred to ICSID. This provision was found to be consistent with Art. 27 of the ICSID Convention, because it precludes diplomatic protection when the Centre is seized of a dispute, in Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 170. For a discussion of the treatment of diplomatic protection in Art. 27 of the ICSID Convention and in BITs, see Juratowitch (n 8) 14–22. See also Aron Broches, ‘Bilateral Investment Protection Treaties and Arbitration of Investment Disputes’ in Jan C Schultsz and Albert Jan Van den Berg (eds), The Art of Arbitration: Liber Amicorum Pieter Sanders (Springer 1982) 63, 71; Georges R Delaume, Transnational Contracts, Applicable Law and Settlement of Disputes (Oceana 1990) ch XV, 18; Jean-Pierre Laviec, Protection et promotion des investissements (PUF 1985) 288–289; Gerd Langer, ‘Das Weltbankübereinkommen zur Beilegung von Investitionsstreitigkeiten’ (1972) 18 Recht der Internationalen Wirtschaft/ Außenwirtschaftsdienst des Betriebs-Beraters 321, 324. Art. 8.42 of the European Union–Canada Comprehensive Economic and Trade Agreement (CETA) (signed 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23 is modeled on Art. 27, albeit using the word ‘claim.’ For a discussion on the unclear scope of Art. 8.42 of CETA, see Benedict Kingsbury, Megaregulation Contested: The Global Economic Order after TPP (OUP 2019) 545. 59 The Swiss Model BIT (1986) uses the words ‘a dispute submitted to the arbitration of the Centre;’ see Dolzer and Stevens (n 32) 225.

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consent to jurisdiction. A negative finding on jurisdiction by the Secretary-General or the tribunal opens the way for diplomatic protection, but it is not clear who would have to take the initiative to obtain such a finding (see also paras. 40, 41 supra). It is also not entirely clear whether ‘referred to’ means consent by both parties or just the offer by the host State expressed in the BIT (see also paras. 42–44 supra). The fact that this language is contained in an investment treaty suggests that it alludes to any dispute referred by the treaty to the Centre. This interpretation is supported by the fact that the ICSID clauses in these treaties bear the heading ‘Reference to International Centre for Settlement of Investment Disputes.’ If this reading is correct, consent to ICSID arbitration by the investor would not be required to block diplomatic protection.60 Any other interpretation of these BIT clauses would render them redundant since they would add nothing to Art. 27 of the Convention. G. ‘. . . unless such other Contracting State shall have failed to abide by and comply with the award rendered in such dispute.’ The last part of Art. 27(1) makes it clear that the right of diplomatic protection will revive in case of non-compliance with the award, i.e. when a State fails to abide by and comply with the award or fails to recognize the award as required pursuant to Arts. 53 and 54 of the Convention. The ad hoc Committee in Enron v Argentina recognized that the words ‘to abide by and comply with the award rendered in such dispute’ in Art. 27(1) mirror the words of the second sentence of Art. 53(1). For the Committee,

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it is clear when these two provisions are examined together that the failure of a State to abide by and comply with an award, as required by Article 53(1), is a breach of the ICSID Convention, entitling the national State of the award creditor to give diplomatic protection or bring an international claim. If a Contracting State was entitled to require an award creditor to use enforcement mechanisms established under Article 54(1) as a precondition to compliance with the award, the Committee considers that the final words of Article 27(1) would have reflected the language of Article 54(1), rather than that of Article 53(1). The Committee accepts the argument of the Claimants that to sustain that the recognition and enforcement process in Article 54 must precede compliance with an award would be as unreasonable as asserting that compliance is dependent on a previous exercise of diplomatic protection under Article 27.61

Thus, the Enron committee points to the connection between Art. 27(1) and Art. 53(1), since failure to comply with an award under the latter provision is a violation of the Convention and triggers the possibility of bringing a claim for diplomatic protection or an international claim. Diplomatic protection is an alternative and supplement to the judicial enforcement of awards. In exercising diplomatic protection, the national State of the investor may avail itself of Art. 64 of the Convention, giving jurisdiction to the ICJ to settle disputes between Contracting States concerning the interpretation or application of the Convention (History, Vol. II, p. 906).62 However, Art. 64 merely provides an additional 60 This interpretation is supported by Laviec (n 58) fn 93. 61 Enron v Argentina, Decision on Stay of Enforcement (7 October 2008) paras 63–65. See also Sempra v Argentina, Decision Stay of Enforcement (5 March 2009) paras 43–44. 62 See also MINE v Guinea, Decision on Annulment (22 December 1989) Annex II, para 25.

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procedure for the exercise of the right existing under Art. 27 without creating a new cause of action (see also paras. 31, 34, 35 supra.) In the course of the Convention’s drafting, some delegates voiced concern that diplomatic protection to secure compliance with the award would create a one-sided situation in favor of the investor, without a corresponding right for the host State in case the investor failed to abide by the award. The Chairman pointed out that there were sufficient means to enforce an award against the non-State party through domestic courts, while there was no such possibility of enforcement against States (History, Vol. II, pp. 58–60, 763–764, 767). Therefore, diplomatic protection to secure compliance with the award is also designed to provide a solution for any State immunity that is preserved by Art. 55 of the Convention. The Working Paper and the Preliminary Draft of the Convention contained a somewhat wider description of the circumstances under which the right to diplomatic protection would revive. They were not restricted to non-compliance with an award, but referred generally to violations of obligations under the Convention (History, Vol. II, p. 136). In the ensuing debates, there was some uncertainty as to what obligation other than compliance with awards should be secured by diplomatic protection (ibid., pp. 349, 527, 763). However, in view of the possibility of an investor to have recourse to ICSID proceedings, as well as the wide-ranging powers of ICSID tribunals, which include the possibility of rendering default awards, the more restrictive version referring only to compliance with awards was adopted (ibid., pp. 764, 767). Some delegates from developing countries indicated that they would prefer the exclusion of diplomatic protection even in the context of securing compliance with awards (History, Vol. II, pp. 710, 764, 766). Other delegates showed a clear preference for the retention of diplomatic protection to ensure compliance with an award (ibid., pp. 403, 430–431, 766–767). A show of hands on the proposal to exclude diplomatic protection even where a Contracting State had failed to abide by an award indicated a negative response (ibid., p. 767). Provisions in BITs dealing with diplomatic protection in an ICSID context routinely state that diplomatic protection may be exercised if the State party fails to abide by an award (see also para. 45 supra). Under the Convention, diplomatic protection after an award has been rendered is available exclusively for the purpose of compliance with an award. It does not afford another remedy independently of the award. Therefore, if an investor’s claim or part of a claim has been rejected by the tribunal, quite aside from the res judicata effect of the award, it could not be pursued through subsequent diplomatic protection.63 H. ‘(2) Diplomatic protection, for the purposes of paragraph (1), shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.’

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No provision corresponding to Art. 27(2) was present in the earlier drafts of the Convention. Some delegates from developed countries expressed the view that informal diplomatic contacts might actually be useful and might facilitate negotiated settlements 63 See Victorino J Tejera Pérez, ‘Diplomatic Protection Revival for Failure to Comply with Investment Arbitration Awards’ (2012) 3 JIDS 445, 466–468.

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(History, Vol. II, pp. 433, 434, 576, 763, 764). A British proposal to retain the possibility of diplomatic assistance in the friendly settlement of a dispute (ibid. pp. 667, 763 ff.) was endorsed by the Chairman (ibid., p. 764) and accepted by a majority in a show of hands (ibid., pp. 764, 767, 880, 937). Therefore, para. 2 does not establish an exception to para. 1 of Art. 27, but is merely designed to avoid an overly strict interpretation of the basic rule. The espousal of a national’s claim, and the presentation of a formal international claim, are not permitted under the conditions of Art. 27. Less formal international contacts are allowed. In Autopista v Venezuela, the Tribunal was confronted with the diplomatic efforts by a State to reach an amicable settlement of the dispute. The Claimant was a Venezuelan company controlled by Mexican interests. Although Mexico was not a contracting party to the ICSID Convention, and not a party to the case, Mexican officials attempted to find an amicable settlement of the dispute on several occasions, including after the filing of the Request for Arbitration.64 The Tribunal stated that Art. 27 did not apply to this case since Mexico is not a Contracting Party to the ICSID Convention. In addition, it recalled that the prohibition of diplomatic protection contained in this Article is ‘not meant to discourage the amicable resolution of disputes.’65 The Tribunal emphasized the distinction made in Art. 27 between diplomatic protection and possible diplomatic efforts aimed at reaching an amicable resolution of a dispute and specified that, while the ICSID Convention provides a forum for dispute settlement, at the same time, ‘its purpose is not to commit parties to arbitration, when there is a possibility to reach an amicable solution.’66 A different kind of State intervention took place in Santa Elena v Costa Rica. The Claimant in that case was a Costa Rican company, the majority of whose shareholders were US citizens. The dispute arose in relation to the expropriation by Costa Rica of a property known as ‘Santa Elena.’ In recalling the events that occurred prior to the beginning of the arbitration, the Final Award mentioned that the US Government had exercised a form of indirect pressure to persuade Costa Rica to consent to ICSID arbitration. A 1994 law enacted by the United States prohibited foreign aid to any country that had expropriated property of US citizens, or corporations of which US citizens owned at least 50 percent (the so-called ‘Helms Amendment’), unless the country provided an effective remedy including ICSID arbitration. This law was invoked against Costa Rica in connection with the granting of a loan to the country by the Inter-American Development Bank. The US Government requested a delay of the loan until Costa Rica consented to refer the Santa Elena case to ICSID arbitration.67 Strictly speaking, this case does not provide an example of diplomatic protection within the meaning of Art. 27(1) or of informal diplomatic exchanges under Art. 27(2). However, it does provide an example of a situation where a State may intervene indirectly to persuade another State to consent to refer a case to arbitration.68 A non-disputing party, most likely the home State of the investor, may also provide its own interpretation of the relevant treaty, without this amounting to prohibited

64 65 67 68

Autopista v Venezuela, Decision on Jurisdiction (27 September 2001) paras 35–36, 45–46. ibid para 72. 66 ibid para 138. Santa Elena v Costa Rica, Award (17 February 2000) paras 24–25. ibid para 25.

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diplomatic protection in the sense of Art. 27.69 In Aguas del Tunari v Bolivia, although there was no question of diplomatic protection, the investor’s home State (the Netherlands) expressed an opinion on the interpretation of the relevant Bolivia– Netherlands BIT at the Tribunal’s request pursuant to Rule 34 of the ICSID Arbitration Rules.70 The Tribunal’s letter of inquiry addressed to the Legal Advisor of the Netherlands Foreign Ministry stated, in relevant part: The ICSID Convention entrusts the Tribunal with deciding upon its jurisdiction in this matter. The parties to this arbitration have put in issue provisions of the BIT between the Netherlands and Bolivia. Given that the Government of the Netherlands is not a party or otherwise present in this arbitration, the Tribunal concludes that information from the Government of the Netherlands would assist the work of the Tribunal. Given further the above quoted Article 27 of the ICSID Convention and the fact that the Netherlands is not a party to this arbitration, the Tribunal is also of the view that such questions must be specific and narrowly tailored, aiming at obtaining information supporting interpretative provisions of general application rather than ones related to a specific case.71

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The Tribunal however found that the reply letter from the Netherlands Government did not provide it with any relevant information as to the BIT’s interpretation. As a result, the Tribunal disregarded the reply letter of the Dutch Government in reaching its decision. The Tribunal also found that the reply letter may have been based on incorrect information. In the light of these findings, the Tribunal held that there was no ‘subsequent practice . . . which establishes an agreement of the parties’ regarding the interpretation of the BIT.72 A different situation, which equally does not amount to prohibited diplomatic protection in the sense of Art. 27, may occur when a State objects to the interpretation of a treaty provided by a tribunal. This took place in SGS v Pakistan, where the Government of the Claimant’s nationality, Switzerland, took the unusual step of writing to ICSID to voice its disapproval of the interpretation of the relevant BIT given by the Tribunal.73 The Swiss Government, in a letter addressed to ICSID’s Acting SecretaryGeneral, stated that the Swiss authorities were wondering why the Tribunal had not found it necessary to inquire about their view of the meaning of the provision of the Pakistan–Switzerland BIT in spite of the fact that the Tribunal attributed considerable importance to the intent of the Contracting Parties in drafting it. The Swiss authorities were alarmed by the interpretation given by the Tribunal to the provision. The letter added that the interpretation ran counter to the intention of Switzerland when 69 See Christoph Schreuer, ‘Investment Protection and International Relations’ in August Reinisch and Ursula Kriebaum (eds), The Law of International Relations (Eleven 2007) 345, 353–354. See also Loretta Malintoppi and Hussein Haeri, ‘The Non-Disputing Party in Investment Arbitration: An Interested Player or the Third Man Out?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 565, 566–572. 70 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 258–263. For a review of the practice on non-disputing parties in investment arbitration, see Gabrielle Kaufmann-Kohler, ‘NonDisputing State Submissions in Investment Arbitration: Resurgence of Diplomatic Protection?’ in Laurence Boisson de Chazournes, Marcelo G Cohen and Jorge E Viñuales (eds), Diplomatic and Judicial Means of Dispute Settlement (OUP 2012) 307, 309 ff. See also Malintoppi and Haeri (n 69). 71 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 258. 72 ibid paras 260–262. 73 SGS v Pakistan, Decision on Jurisdiction (6 August 2003).

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concluding the Treaty and was neither supported by the meaning of similar Articles in BITs concluded by other countries nor by academic commentary.74 In Pac Rim v El Salvador, the Tribunal had to decide whether the procedures envisaged by the Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) Arts. 18.3 (Notification of Measures) and 20.4 (Consultations) amounted to the exercise of diplomatic protection by a DR–CAFTA Party.75 The Claimant argued that the Respondent failed to provide its home State, the United States, timely notice of its intent to deny benefits to the Claimant and thus deprived it of the opportunity to engage in Stateto-State consultations before the claim was submitted to ICSID arbitration as provided by Art. 27 of the Convention. The Respondent relied on Art. 1 of the 2006 ILC Draft Articles on Diplomatic Protection, which describes diplomatic protection as

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the invocation by a State, through diplomatic action or other means of peaceful settlement, of the responsibility of another State for an injury caused by an internationally wrongful act of that State to a natural or legal person that is a national of the former State with a view to the implementation of such responsibility.76

The Tribunal distinguished diplomatic protection from the other actions and procedures described in Art. 16 of the ILC Draft Articles.77 Having noted ‘a similar distinction between diplomatic protection under ICSID Article 27(1) and “informal diplomatic exchanges for the sole purpose of facilitating a settlement of a dispute” under ICSID Article 27(2),’ the Tribunal concluded that the procedures envisaged by the DR–CAFTA Arts. 18.3 and 20.4 did not amount to diplomatic protection under international law.78 In other words, the type of interventions that occurred in this case (i.e. the consultations procedures relating to denial-of-benefits requests under the DR–CAFTA) were understood to amount to mere informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute in the meaning of Art. 27(2). Another example of a State getting involved in treaty interpretation, without, however, using diplomatic protection in contravention of Art. 27, is provided by the Funnekotter and others v Zimbabwe case, where the Dutch Embassy in Harare repeatedly advised the Government of Zimbabwe of its obligations under the Netherlands– Zimbabwe BIT in connection with some farms which were owned by the Claimants. Despite an originally positive reaction on the part of the Ministry of Foreign Affairs of Zimbabwe, these efforts were ultimately unsuccessful and, in spite of many protests from the Dutch Embassy, the dispute was submitted to ICSID arbitration.79

74 See Stanimir A Alexandrov, ‘Breaches of Contract and Breaches of Treaty’ (2004) 5 JWIT 555, 570–571; Emmanuel Gaillard, ‘Investment Treaty Arbitration and Jurisdiction over Contract Claims – the SGS Cases Considered’ in Todd Weiler (ed), International Investment Law and Arbitration (Cameron May 2005) 325, 341–342. 75 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 4.87–4.89. Arts. 18.3 and 20.4 of the DR–CAFTA are entitled respectively (Notification and Provision of Information) and (Consultation). 76 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 4.88. 77 The ‘other actions and procedures’ in question are not specified in Art. 16 of the ILC Draft Articles. The Commentary refers to various treaties as examples. See ILC, ‘Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries’ [2001] 2(2) YBILC 26, 31. 78 Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 4.89. 79 Funnekotter and others v Zimbabwe, Award (22 April 2009) para 31.

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Some BITs provide for the settlement of disputes by diplomatic means first, and only if these turn out to be unsuccessful, for settlement by ICSID.80 Thus, Art. 10 of the Belgium Luxembourg–Cameroon Treaty of 1980 provides: Preferably, this dispute shall be settled amicably by direct arrangement between the disputing parties, and failing, by conciliation between the contracting parties through diplomatic means. In the absence of an amicable settlement by direct arrangement between the parties or conciliation through diplomatic means within six months with effect from the date of notice, the dispute shall, at the request of the investor concerned, be referred to the ICSID for conciliation or arbitration.81

80 See also Laviec (n 58) 289–290. 81 The majority of the BITs concluded by the Belgo–Luxembourg Economic Union (BLEU) contain a mechanism for investor–State dispute resolution that refers to the prior exhaustion of diplomatic means of settlement. For a full list of these treaties, see UNCTAD, ‘International Investment Agreements Navigator’ accessed 10 January 2021. See eg BLEU–Pakistan BIT (signed 23 April 1998, entered into force 7 August 2015) Art. 11; Albania–BLEU BIT (signed 1 February 1999, entered into force 18 October 2002) Art. 11; Algeria–BLEU BIT (signed 24 April 1991, entered into force 17 October 2002) Art. 9; BLEU–Uganda BIT (signed 1 February 2005, not yet in force) Art. 10; Benin–BLEU BIT (signed 18 May 2001, entered into force 30 August 2007) Art. 9; BLEU– Burkina Faso BIT (signed 18 May 2001, entered into force 13 January 2004) Art. 9; BLEU–Burundi BIT (signed 13 April 1989, entered into force 12 September 1993) Art. 8. See also the BLEU–Sri Lanka BIT (signed 5 April 1982, entered into force 26 April 1984) n 58 Art. 10; Bangladesh–BLEU BIT (signed 22 May 1981, entered into force 15 September 1987) Art. 6; and Italy–Gabon BIT (signed 28 June 1999, entered into force 7 July 2006) Art. 10.

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Article 28 (1) Any Contracting State or any national of a Contracting State wishing to institute conciliation proceedings shall address a request to that effect in writing to the Secretary-General who shall send a copy of the request to the other party. (2) The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to conciliation in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings. (3) The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register.

OUTLINE I. INTRODUCTION 1. Characteristics of Conciliation 2. The Procedural Framework for Conciliation 3. The Additional Facility 4. Use and Possible Advantages of Conciliation 5. Enforcement of Settlements in Conciliation Proceedings II. INTERPRETATION

Paragraphs 1–20 3–6 7–8 9 10–18 19–20 21–23

BIBLIOGRAPHY Bonnitcha, Jonathan, Poulsen, Lauge and Waibel, Michael, The Political Economy of the Investment Treaty Regime (OUP 2017) 82–84 Echandi, Roberto and Kher, Priyanka, ‘Can International Investor–State Disputes Be Prevented? Empirical Evidence from Settlements in ICSID Arbitration’ (2013) 29 ICSID Review 41 Gaillard, Emmanuel, La Jurisprudence du CIRDI (Pedone 2004) 417–419 Lahlou, Yasmine, ‘Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (Institution Rules)’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulations and Rules: A Practical Commentary (Edward Elgar 2019) 976 Legum, Barton and Crevon, Anna, ‘Conciliation’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulations and Rules: A Practical Commentary (Edward Elgar 2019) 256 Nurick, Lester and Schnably, Stephen J, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Review 340 Reif, Linda C, ‘Conciliation as a Mechanism for the Resolution of International Economic and Business Disputes’ (1991) 14 Fordham International Law Journal 578

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Reinisch, August, ‘Elements of Conciliation in Dispute Settlement Procedures’ in Christian Tomuschat, Riccardo Pisillo Mazzeschi and Daniel Thürer (eds), Conciliation in International Law (Brill 2017) 116 Reinisch, August and Malintoppi, Loretta, ‘Methods of Dispute Resolution’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook on International Investment Law (OUP 2008) 691 Salacuse, Jeswald W, The Global Negotiator: Making, Managing, and Mending Deals around the World in the Twenty-First Century (Palgrave Macmillan 2003) 257–266 Schneider, Michael E, ‘Investor–State Disputes: Moving Beyond Arbitration’ in Laurence Boisson de Chazournes, Marcelo G Kohen and Jorge E Viñuales (eds), Diplomatic and Judicial Means of Dispute Settlement (Brill 2013) 119 Shirlow, Esmé, ‘The Promises and Pitfalls of Investor–State Mediation’ in Lisa E Sachs, Lise J Johnson and Jesse Coleman (eds), Yearbook on International Investment Law & Policy 2019 (OUP 2021) 461 Titi, Catharine and Fach Gómez, Katia, Mediation in International Commercial and Investment Disputes (OUP 2019) Ziadé, Nassib G, ‘ICSID Conciliation’ (1996) 13(2) News from ICSID 3

I. INTRODUCTION 1

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The Convention has separate Chapters on Conciliation (Chapter III, Arts. 28–35) and Arbitration (Chapter IV, Arts. 36–55). Art. 28, entitled ‘Request for Conciliation,’ is the first Article in Convention Chapter III. Section 2 of Chapter III addresses the ‘Constitution of the Conciliation Commission’ and consists of Arts. 29–31. Section 3, which deals with ‘Conciliation Proceedings,’ is made up of Arts. 32–35. The Convention’s core Article on conciliation is Art. 34. Conciliation is one of the peaceful methods of international dispute settlement listed in Art. 33 of the United Nations Charter. Since the early twentieth century, it is well established, if infrequently used, in the inter-State context.1 An example of a successful inter-State conciliation is the one between Australia and Timor-Leste regarding their maritime boundary dispute in the Timor Sea.2 The conciliation of investor–State disputes has its roots in the successful, informal role of the World Bank, and specifically its President Eugene Black, as a conciliator of investment disputes in the 1950s.3

1 Sven MG Koopmans, Diplomatic Dispute Settlement: The Use of Inter-State Conciliation (Asser Press 2008). Giorgio Sacerdoti, ‘Diplomatic Conciliation of Investment Disputes: The Italian–Swiss Controversy on Secondary Residences in Engadine (1990–1992) and Its Lessons’ in Marise Cremona and others (eds), Reflections on the Constitutionalisation of International Economic Law: Liber Amicorum for Ernst-Ulrich Petersmann (Martinus Nijhoff 2014) 403, describes a conciliation in the late twentieth century based on a 1924 conciliation treaty between Italy and Switzerland. 2 Timor Sea Conciliation (Timor-Leste v Australia) (9 May 2018). 3 Jochen Kraske and others, Bankers with a Mission: The Presidents of the World Bank 1946–1991 (OUP 1996) ch 3; Michael Waibel, Sovereign Defaults before International Courts and Tribunals (CUP 2011) 83–84; Antonio R Parra, ‘“Black’s Bank” and the Settlement of Investment Disputes’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 150, 156 (describing ICSID conciliation as a legacy of Black’s World Bank); Taylor St John, The Rise of Investor–State Arbitration: Politics, Law, and Unintended Consequences (OUP 2018) chs 2, 4.

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1. Characteristics of Conciliation Arbitration, conciliation, and mediation together make up the umbrella term of investor State dispute settlement (ISDS). Unlike arbitration, conciliation does not involve an adversarial procedure resulting in a binding third-party decision. Conciliation is directed towards an agreed settlement based on the parties’ flexibility and goodwill.4 Blackaby and Partasides note the lack of agreed definitions of conciliation and mediation:

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Historically, a conciliator was seen as someone who went a step further than the mediator, so to speak, in that the conciliator would draw up and propose the terms of an agreement that he or she considered represented a fair settlement.5

Merrills defines conciliation as a

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method for the settlement of international disputes of any nature according to which a Commission set up by the Parties, either on a permanent basis or an ad hoc basis to deal with a dispute, proceeds to the impartial examination of the dispute and attempts to define the terms of settlement susceptible of being accepted by them or of affording the Parties, with a view to its settlement, such aid as they may have requested.6

The conciliator ‘investigate[s] the dispute and . . . present[s] the parties with a set of formal proposals for its resolution.’7 ‘[C]onciliation puts third-party intervention on a formal legal footing and institutionalizes it in a way comparable, but not identical to inquiry or arbitration.’8 By contrast, mediation is ‘essentially an extension of negotiation.’9 In practice, however, the terms conciliation and mediation are often used interchangeably,10 particularly in the investor–State context. Under the Convention’s general scheme, conciliation and arbitration are equivalent methods of dispute settlement. The drafters maintained this equivalence, even though some delegates had doubts concerning the usefulness or effectiveness of conciliation (History, Vol. II, pp. 263, 265, 415).

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2. The Procedural Framework for Conciliation Accordingly, parts of the Convention are common to both types of procedures. These common provisions include Art. 25 on jurisdiction (which does not distinguish between conciliation and arbitration), Chapter V on the replacement and disqualification of conciliators and arbitrators, Chapter VI on the cost of proceedings, and Chapter VII on the place of proceedings. As Art. 25 of the Convention does not distinguish between conciliation and arbitration, a consent agreement may refer to one or the other. Consent may relate to both 4 Linda C Reif, ‘Conciliation as a Mechanism for the Resolution of International Economic and Business Disputes’ (1991) 14 Fordham ILJ 578, 586–587, 634–638. 5 Nigel Blackaby and Constantine Partasides (with Alan Redfern and Martin Hunter), Redfern and Hunter on International Arbitration (5th edn, OUP 2009) 46. 6 JG Merrills, International Dispute Settlement (6th edn, CUP 2017) 62. 7 ibid 26. 8 ibid. 9 ibid. 10 August Reinisch, ‘Elements of Conciliation in Dispute Settlement Procedures Relating to International Economic Law’ in Christian Tomuschat and others (eds), Conciliation in International Law (Brill 2017) 116; Parra (n 3) 153.

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without stating any priority. In such a situation, the choice between conciliation or arbitration rests with the party that institutes proceedings. One way of including both procedures in a consent agreement is to provide for conciliation, followed by arbitration, if conciliation turns out to be unsuccessful (see Art. 25, paras. 27–37).

3. The Additional Facility 9

The Additional Facility (see Art. 6, para. 25; Art. 25, paras. 12–19) provides for conciliation of certain disputes that are outside the jurisdiction of the Centre (ICSID (AF) conciliation). The Additional Facility Rules authorize the Secretariat of the Centre to administer the following categories of proceedings which fall outside the jurisdiction of the Centre: (i) conciliation and arbitration proceedings for the settlement of legal disputes arising directly out of an investment where either the State party to the dispute or the State whose national is a party to the dispute is not a Contracting State; (ii) conciliation and arbitration proceedings for the settlement of legal disputes, which do not directly arise out of an investment, provided that either the State party to the dispute or the State whose national is a party to the dispute is a Contracting State; and (iii) fact-finding proceedings.11 The (Additional Facility) Conciliation Rules (AF Conciliation Rules) are set out in Schedule B of the Additional Facility Rules. The Introductory Notes to the 1978 Additional Facility Rules describe the AF Conciliation Rules as ‘an amalgam of certain provisions of the Convention.’12 Other rules for the settlement of disputes, including those of the International Chamber of Commerce,13 and of UNCITRAL, also provide for conciliation.14

4. Use and Possible Advantages of Conciliation 10

States and investors have made little use of ICSID and ICSID (AF) conciliation. As of 31 December 2020, ICSID had registered thirteen requests for conciliation (eleven ICSID conciliation cases and two ICSID (AF) conciliation cases). Three ICSID conciliations and one ICSID (AF) conciliation were pending in December 2020.15 In contrast, by 31 December 2020, ICSID has registered more than 800 requests for arbitration, of which almost 300 were pending. ICSID registered two ICSID conciliations in the 1980s, one in the 1990s, three in the 2000s, and five between 2010 and 2020.16 Ten 11 See Art. 2 of the Additional Facility Rules (2006). 12 See Introductory Notes to the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes (Additional Facility Rules) (September 1978) (1993) 1 ICSID Reports 213, 214. 13 ICC Rules of Optional Conciliation (1988) (1989) 28 ILM 231, 234. 14 Conciliation Rules of the United Nations Commission on International Trade Law (1980) (1981) 20 ILM 300. 15 Hess and Tullow v Equatorial Guinea (CONC(AF)) (registered 15 May 2012); Xenofon Karagiannis v Albania (CONC) (registered 16 May 2016); CDE v Cameroon and CAMWATER (CONC) (registered 24 May 2019). 16 SEDITEX v Madagascar I (CONC) (registered 5 October 1982); Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983) – see Lester Nurick and Stephen J Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 345; SEDITEX v Madagascar II (CONC) (registered 13 June 1994) – see Emmanuel Gaillard, ‘Centre International pour le Règlement des Différends Relatifs aux Investissements: Chronique des sentences arbitrales’ (1997) 124 JDI 277, 278; TG World Petroleum v Niger (CONC) (registered 8 December 2003); Togo Electricité v Togo (CONC) (registered 20 May 2005); Shareholders of SESAM v Central African Republic (CONC) (registered 13 August 2007); RSM v Cameroon (CONC) (registered 19 September

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ICSID conciliations, or 90 percent (excluding conciliations under the Additional Facility), were contract-based. Only one was based on a bilateral investment treaty and an investment law and concerned the construction sector.17 Out of the contractbased ICSID conciliations, four concerned the oil, gas, and mining sector, two the textile sector, two the electric power and other energy sector, one the water, sanitation, and flood protection sector, and one concerned the agriculture, fishing, and forestry sector. The two contract-based ICSID (AF) conciliations were registered in the 2010s. Both concerned the oil, gas, and mining sector.18 Information in the public domain on ICSID conciliations is limited. Investors initiated all eleven ICSID conciliations. An investor initiated one of the two ICSID (AF) conciliations, a host State the other. Conciliation commissions issued reports in six ICSID conciliations and in one ICSID (AF) conciliation. These reports are unpublished, but some information is available in commentary on two conciliations, Tesoro v Trinidad and Tobago and SEDITEX v Madagascar II.19 Investors and host States settled two ICSID conciliations.20 Three unsuccessful ICSID conciliations were followed by ICSID arbitrations (Togo Electricité v Togo, RSM v Cameroon, and SEEG v Gabon).21 One investor, RSM Production Corporation, has experience in both ICSID conciliation and ICSID arbitration.22 Notably, eight of the eleven ICSID conciliations and both ICSID (AF) conciliations involved African States.23 The reasons why ICSID arbitrations exceed conciliations by a factor of 60 are complex and remain a matter for debate. The central question is when is conciliation an effective method of resolving investment disputes, and what value does it add compared to direct negotiations between the parties? The perceptions and expectations of the parties, especially investors, are likely to play a key role. One hypothesis is that conciliation of investment disputes is often a waste of time, effort, and money. Even though consent to ICSID conciliation is binding on the parties and cannot be unilaterally withdrawn (Art. 34), either party can, at any time,

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2011); Xenofon Karagiannis v Albania (CONC) (registered 16 May 2016); SEEG v Gabon (CONC) (registered 16 October 2018); CDE v Cameroon and CAMWATER (CONC) (registered 24 May 2019); Barrick v Papua New Guinea (CONC) (registered 22 July 2020). The bilateral investment treaty between Greece and Albania and the Albanian investment law, Xenofon Karagiannis v Albania (CONC) (registered 16 May 2016). Hess and Tullow v Equatorial Guinea (CONC(AF)) (registered 15 May 2012); Equatorial Guinea v CMS and others (CONC(AF)) (registered 29 June 2012). Nurick and Schnably (n 16) 347–349; Emmanuel Gaillard, La jurisprudence du CIRDI (Pedone 2004) 417–419. SEDITEX v Madagascar I (CONC) (registered 5 October 1982); TG World Petroleum v Niger (CONC) (registered 8 December 2003). Togo Electricité v Togo, Award (10 August 2010) paras 7–9, 125 (annulled 6 September 2011); RSM v Cameroon, Order on Discontinuance (19 January 2016); SEEG v Gabon, Award (29 March 2019) (pursuant to Rule 43(2)). RSM v Grenada I, Award (13 March 2009); RSM v Central African Republic, Award (11 July 2011); RSM v Grenada II, Award (10 December 2010); RSM v Cameroon (CONC/11/1), Report (11 June 2013); RSM v St Lucia, Award (15 July 2016); RSM v Cameroon (n 21). Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983) and Xenofon Karagiannis v Albania (CONC) (registered 16 May 2016) did not involve African States.

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withdraw from the procedure or not follow the Commission’s recommendation.24 The risk then is that conciliation adds further costs, without resolving the underlying investment dispute.25 States may also find it difficult, politically or otherwise, to settle investment disputes, including through conciliation. A multiplicity of State actors may need to collaborate for a settlement to be concluded or for a conciliation to succeed.26 These actors may be reluctant to accept responsibility for a settlement, in conciliation or through another means.27 Conciliation may also be inadequate if the objectives of the parties are mutually incompatible.28 Possible advantages of conciliation over arbitration include shorter duration, lower cost, additional flexibility, greater party control, and preserving a working relationship between host State and foreign investors.29 Conciliation may be particularly appropriate where the parties continue their cooperation on the investment. Conciliation may also be attractive for disputing parties in cultures that are less favorably disposed towards adversarial procedures or parties that value confidentiality, as many arbitral awards are published, in contrast to conciliation reports (see also Art. 35 on the principle that all statements during the conciliation are off limits for any other proceedings).30 By contrast, investors typically resort to arbitration when the parties have reached the end of their business relationship.31 It may also be difficult for host States to agree to conciliation and settle disputes outside binding third-party adjudication.32

24 Aron Broches, ‘The Experience of the International Centre for Settlement of Investment Disputes’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West 1985) 75, 87; Reif (n 4) 587, 635; Frauke Nitschke, ‘ICSID Conciliation in Practice’ in Catharine Titi and Katia Fach Gómez (eds), Mediation in International Commercial and Investment Disputes (OUP 2019) 124. 25 Edna Sussman, ‘Investor–State Dispute Mediation: The Benefits and Obstacles’ in Arthur W Rovine (ed), Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2009 (Martinus Nijhoff 2010) 321, 333; Margrete Stevens and Ben Love, Investor–State Mediation: Observations on the Role of Institutions (Brill 2010) 411. 26 Barton Legum, ‘The Difficulties of Conciliation in Investment Treaty Cases: A Comment on Professor Jack C Coe’s “Toward A Complementary Use of Conciliation in Investor–State Disputes – a Preliminary Sketch”’ (2006) 21 Mealey’s Int’l Arb Rep 23. 27 Thomas W Wälde, ‘Improving the Mechanisms for Treaty Negotiation and Investment Disputes’ in Karl P Sauvant (ed), Yearbook on International Investment Law and Policy 2008–2009 (OUP 2009) 505, 534–535. 28 Stephen M Schwebel, ‘Is Mediation of Foreign Investment Disputes Plausible?’ (2007) 22 ICSID Rev 237; Michael W Reisman, ‘International Investment Arbitration and ADR: Married But Best Living Apart’ (2009) 24 ICSID Rev 185; Jonathan Bonnitcha, Lauge N Skovgaard Poulsen and Michael Waibel, The Political Economy of the Investment Treaty Regime (OUP 2017) 84. 29 Sussman (n 25); Christine Sim, ‘Conciliation of Investor–State Disputes, Arb-Con-Arb, and the Singapore Convention’ (2019) 31 Singapore Academy of Law J 670, 673–674. 30 Christopher M Koa, ‘The International Bank for Reconstruction and Development and Dispute Resolution: Conciliating and Arbitrating with China through the International Centre for Settlement of Investment Disputes’ (1991) 24 NYU JILP 439, 487; Chunlei Zhao, ‘Investor–State Mediation in a China–EU Bilateral Investment Treaty: Talking about Being in the Right Place at the Right Time’ (2018) 17 Chinese JIL 111. 31 Aron Broches, ‘Settlement of Disputes Arising out of Investment in Developing Countries’ (1983) 11 Int’l Bus Lawyer 206. 32 Michael E Schneider, ‘Investment Disputes – Moving beyond Arbitration’ in Laurence Boisson de Chazournes, Marcelo G Kohen and Jorge E Viñuales (eds), Diplomatic and Judicial Means of Dispute Settlement (Brill 2013) 119, 134–135.

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ICSID fees for lodging requests for conciliation and arbitration are the same, and arbitrators and conciliators are entitled to the same daily fee.33 Under Art. 61(1), costs in ICSID conciliation are always borne equally by the parties34 (see Art. 61, paras. 7–9). In contrast, under Art. 61(2), the apportionment of costs in arbitration is left to the tribunal’s discretion and tribunals at least sometimes shift costs to the other party. The average cost of an ICSID conciliation is USD 182,000, or USD 91,000 per party35 (including fees and expenses of the commission and ICSID’s fees, but excluding legal fees and expenses by the parties). The average cost of ICSID arbitrations, excluding legal fees, is around USD 1.2 million – more than six times the average cost of conciliations – and the median cost of arbitrations is USD 0.5 million.36 It is likely that conciliation is less expensive than arbitration,37 but the relative total cost of arbitration and conciliation is difficult to assess due to the lack of comprehensive data (especially on legal fees). Even if investors have made limited use of ICSID conciliation as such thus far, elements of alternative dispute resolution are increasingly found in investment treaties. Many investment treaties contain prerequisites to arbitration,38 including cooling-off periods and attempts at amicable settlement, though these are typically not mandatory. A recent example is Arts. 8.19–8.20 of CETA.39 These two provisions provide for amicable dispute settlement through consultations, and mediation at any time in relation to investment disputes. In 2012, the International Bar Association Council adopted the IBA Rules for Investor–State Mediation40 with a view to encouraging greater use of mediation for investment disputes.41

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5. Enforcement of Settlements in Conciliation Proceedings In contrast to the binding character of ICSID arbitration awards (see Art. 53, paras. 12, 13) and the Convention’s machinery for their enforcement (see Art. 54, paras. 31–98), neither the Convention nor the Conciliation Rules provide for any remedies and

33 34 35 36 37

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The ICSID Schedule of Fees applies to arbitration as well as conciliation proceedings. Nassib G Ziadé, ‘ICSID Conciliation’ (1996) 13(2) News from ICSID 3, 6–7. Nitschke (n 24) 139. Bonnitcha, Poulsen and Waibel (n 28) 88, Table 3.2; Susan D Franck, Arbitration Costs: Myths and Realities in Investment Treaty Arbitration (OUP 2019) 270 states that average tribunal costs and administrative expenses of ICSID arbitrations were USD 0.65 million. Nurick and Schnably (n 16) 342–343; Jack Coe, ‘Toward a Complementary Use of Conciliation in Investor–State Disputes – a Preliminary Sketch’ (2005) 12 UC Davis LR 7; Jeswald W Salacuse, ‘Is There a Better Way? Alternative Methods of Treaty-Based, Investor–State Dispute Resolution’ (2007) 31 Fordham ILJ 138; Kun Fan, ‘Mediation of Investor–State Disputes: A Treaty Survey’ [2020] JDR 327, 340. David Gaukrodger and Kathryn Gordon, ‘Investor–State Dispute Settlement: A Scoping Paper for the Investment Policy Community’ OECD Working Papers on International Investment 2012/03 (2012). European Union–Canada Comprehensive Economic and Trade Agreement (CETA) (signed 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23. International Bar Association (Mediation Committee), Rules for Investor–State Mediation (adopted 4 October 2012). Anna Joubin-Bret and Barton Legum, ‘A Set of Rules Dedicated to Investor–State Mediation: The IBA Investor–State Mediation Rules’ (2014) 29 ICSID Rev 17; Jan K Schäfer, ‘Alternatives to Investment Arbitration’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck/ Hart/Nomos 2015) 1186, paras 66–99.

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enforcement in respect of reports of conciliation commissions. A new legal action is needed (see Art. 34, para. 23). UNCITRAL Working Group II (Arbitration and Conciliation/Dispute Settlement) developed the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention) to enhance the enforcement of mediated settlements.42 It is an open question, however, whether the Singapore Convention offers an alternative to facilitate the enforcement of settlements in ICSID conciliation, obviating the need for a new legal action. This is because the Singapore Convention applies to settlements of ‘commercial disputes,’ but does not define this term. By contrast, it is clear that the Singapore Convention does not apply to settlement agreements resulting from ICSID arbitral awards.43

II. INTERPRETATION 21 22

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Art. 28 resembles Art. 36, its counterpart in Chapter IV on Arbitration. The only difference is the word ‘conciliation’ instead of ‘arbitration’ in Arts. 28(1) and (2). All drafts of Art. 28 were identical to the corresponding drafts of Art. 36 (History, Vol. I, pp. 140, 142, 144, 170, 172, 174) which delegates mostly discussed together (see Art. 36, paras. 11, 20, 24, 31, 45, 49, 58). The debates on the drafts that became Art. 28 (History, Vol. II, pp. 326–327, 412, 508–509, 568, 790, 946, 982) did not lead to any divergence of the two provisions. Some delegates suggested adopting a different approach to the institution of conciliation proceedings compared to the institution of arbitration proceedings in view of conciliation’s more consensual nature (ibid., pp. 262–263, 404, 409, 770, 778). As conciliation could only take place if both parties cooperated, the parties should submit requests for conciliation jointly (ibid., p. 771). However, delegates ultimately voted in favor of identical rules for the institution of conciliation and arbitration proceedings (ibid., p. 782). The Institution Rules provide details on applying Arts. 28 and 36. They apply equally to conciliation and arbitration. Given the similarity between Arts. 28 and 36, the observations on Art. 36 in this Commentary apply also to the provisions of Art. 28.44

42 United Nations Convention on International Settlement Agreements Resulting from Mediation (adopted 20 December 2018, entered into force 12 September 2020) UN Doc A/RES/73/198, Annex (Singapore Convention). As of 31 December 2020, fifty-three States signed and six States ratified the Singapore Convention. For literature concerning the Singapore Convention, see eg Abramson Hal, ‘New Singapore Convention on Cross-Border Mediated Settlements’ in Titi and Fach Gómez (n 24) 370; Sim (n 29); Yvonne Guo, ‘From Conventions to Protocols: Conceptualizing Changes to the International Dispute Resolution Landscape’ (2020) 11 JIDS 217; Esmé Shirlow, ‘The Promises and Pitfalls of Investor–State Mediation’ in Lisa E Sachs, Lise J Johnson and Jesse Coleman (eds), Yearbook on International Investment Law & Policy 2019 (OUP 2021) 461; Clemens Treichl, ‘The Singapore Convention: Towards a Universal Standard for the Recognition and Enforcement of International Settlement Agreements’ (2020) 11 JIDS 409. 43 See Singapore Convention (n 42) Art. 1(3)(b). 44 Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 365; Ziadé (n 34) 4.

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Article 29 (1) The Conciliation Commission (hereinafter called the Commission) shall be constituted as soon as possible after registration of a request pursuant to Article 28. (2) (a) The Commission shall consist of a sole conciliator or any uneven number of conciliators appointed as the parties shall agree. (b) Where the parties do not agree upon the number of conciliators and the method of their appointment, the Commission shall consist of three conciliators, one conciliator appointed by each party and the third, who shall be the president of the Commission, appointed by agreement of the parties. Art. 29 is the first of three Articles in Chapter III, Section 2 on the ‘Constitution of the Conciliation Commission.’ Art. 29 is the basic provision on the constitution of a conciliation commission. Art. 30 concerns the appointment of conciliators by the Chairman instead of the parties. Art. 31 addresses the appointment of conciliators who are, or are not, designated to the Panel of Conciliators under Arts. 12–16. The rules on the constitution of conciliation commissions do not contain nationality requirements, unlike Art. 39 in Section 2, Chapter IV on arbitral tribunals (see para. 5 infra). Art. 29 resembles Art. 37, its counterpart in Chapter IV on arbitration. The only differences are the words ‘Conciliation Commission’ and ‘Commission’ instead of ‘Arbitral Tribunal’ and ‘Tribunal’ and ‘conciliator(s)’ instead of ‘arbitrator(s),’ as well as the reference to Art. 28, rather than to Art. 36. The drafts of Art. 29 were almost identical to the parallel drafts of Art. 37 (History, Vol. I, pp. 146, 148, 176, 178). The debates on the drafts that became Art. 29 did not lead to any changes to the texts (History, Vol. II, pp. 78, 152–153, 262–263, 412, 782–783, 790). The details on the constitution of a conciliation commission are set out in Conciliation Rules 1–7. These mirror Arbitration Rules 1–7 except for references to ‘(Conciliation) Commissions’ and ‘conciliator(s)’ rather than ‘(Arbitral) Tribunals’ and ‘arbitrator(s).’ The only three substantive differences are the following. First, nationals or co-nationals of the parties can sit on conciliation commissions, in contrast to ICSID arbitrations where such appointments require the agreement of the parties.1 Second, the declaration that each conciliator is to sign under Conciliation Rule 6 does not contain the formula ‘I shall judge fairly as between the parties, according to the applicable law . . .,’ which is contained in the otherwise similar declaration required by Arbitration Rule 6 for arbitrators (see Art. 40, para. 18). Third, the Conciliation Rules do not feature

1 Art. 39 ICSID Convention, Conciliation Rules 1, 3(1); Arbitration Rules 1(3), 3(1).

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an equivalent to Arbitration Rule 1(4), which excludes persons who previously acted as conciliators or arbitrators in the same case from appointment as arbitrators.2 The non-exclusion of nationals or co-nationals of parties from appointment as conciliators results from a deliberate decision of the Convention’s drafters. Mr. Broches explained that the appointment of conciliators of the same nationality as the parties might be helpful in reaching a settlement. Familiarity with the views of the parties might be useful (History, Vol. II, pp. 266, 329, 510–511, 569) (see also Art. 13, para. 10; Art. 39, para. 5). Consequently, Chapter III on conciliation lacks a provision equivalent to Art. 39, which addresses the nationality of arbitrators. Similarly, the last sentence of Art. 38, which deals with the nationality of arbitrators appointed by the Chairman, is not found in the parallel provision of Art. 30, which deals with the appointment of conciliators by the Chairman (see Art. 30, para. 4). In view of the similarity of Arts. 29 and 37, the provisions of Art. 29 should be read in the light of what this Commentary states on Art. 37 (see Art. 37, paras. 9–58). Subject to the remarks made above, the observations made on Art. 37 apply also to the constitution of a conciliation commission under Art. 29. As of 31 December 2020, conciliation commissions were constituted in six out of eleven ICSID conciliation proceedings. In SEDITEX v Madagascar I3 and in TG World Petroleum v Niger,4 the parties settled and ICSID closed the proceedings before the constitution of the commissions.5 In Xenofon Karagiannis v Albania6 and Barrick v Papua New Guinea,7 the commissions had not yet been constituted. In the ICSID (AF) conciliation Hess and Tullow v Equatorial Guinea,8 the constitution of the commission was repeatedly suspended; the case remained pending. In one ICSID conciliation, the parties agreed on the appointment of a sole conciliator under Art. 29(2)(a) (Tesoro v Trinidad and Tobago).9 In one ICSID (AF) conciliation, the parties also appointed a sole conciliator pursuant to Art. 6(2) AF Conciliation Rules.10 In both cases, the conciliator had the nationality of a third country.11 In two cases, the parties appointed one conciliator each, and agreed on the appointment of the presiding arbitrator under Art. 29(2)(b).12 In three cases, the majority of the commission was composed of third-country nationals, but one of the parties appointed a person of its own nationality (the investor 2 The details on the constitution of ICSID (AF) conciliation commissions are set out in Arts. 6–13 of the Conciliation (Additional Facility) Rules (AF Conciliation Rules) and mirror Arts. 14, 29, and 30 of the ICSID Convention and the Conciliation and Arbitration Rules 2, 3, 4(3)–(5), 5, 6, and 7. The differences between the constitution of an ICSID conciliation commission and an ICSID arbitration tribunal mentioned above are the same for ICSID (AF) conciliation and ICSID arbitration. 3 SEDITEX v Madagascar I (CONC) (registered 5 October 1982). 4 TG World Petroleum v Niger (CONC) (registered 8 December 2003). 5 Emmanuel Gaillard, ‘Centre International pour le Règlement des Différends Relatifs aux Investissements: Chronique des sentences arbitrales’ (1997) 124 JDI 277, 278. 6 Xenofon Karagiannis v Albania (CONC) (registered 16 May 2016). 7 Barrick v Papua New Guinea (CONC) (registered 22 July 2020). 8 Hess and Tullow v Equatorial Guinea (CONC(AF)) (registered 15 May 2012). 9 Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983). 10 Equatorial Guinea v CMS and others (CONC(AF)) (registered 29 June 2012). 11 British in Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983); Mexican in Equatorial Guinea v CMS and others (CONC(AF)) (registered 29 June 2012). 12 CDE v Cameroon and CAMWATER (CONC) (registered 24 May 2019); RSM v Cameroon (CONC) (registered 19 September 2011).

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in RSM v Cameroon; the host State in SEDITEX v Madagascar II13 and in Shareholders of SESAM v Central African Republic14). There was also no Togolese national on the conciliation commission in Togo Electricité v Togo.15 Out of the nineteen members of ICSID conciliation commissions, excluding AF conciliations, five were French nationals, one was a French and Lebanese national, two were Belgian nationals, two were US nationals, and one national came from each of the following countries: Canada, Central Africa, Egypt, Germany, Madagascar, Morocco, Portugal, Switzerland, and the United Kingdom. The nationality of the commission members is only known in one of the two ICSID (AF) conciliations, where the sole conciliator was Mexican.16 As of 31 December 2020, only two women17 have served as conciliators in ICSID conciliations and no woman has served in ICSID (AF) conciliations.

13 14 15 16 17

SEDITEX v Madagascar II (CONC/94/1) (registered 13 June 1994). Shareholders of SESAM v Central African Republic (CONC) (registered 13 August 2007). Togo Electricité v Togo (CONC) (registered 20 May 2005). Equatorial Guinea v CMS and others (CONC(AF)) (registered 29 June 2012). They were both appointed in SEEG v Gabon (CONC) (registered 30 March 2018).

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Article 30 If the Commission shall not have been constituted within 90 days after notice of registration of the request has been dispatched by the Secretary-General in accordance with paragraph (3) of Article 28, or such other period as the parties may agree, the Chairman shall, at the request of either party and after consulting both parties as far as possible, appoint the conciliator or conciliators not yet appointed. 1

2

3

4

Art. 30 is designed to safeguard the constitution of an ICSID conciliation commission in the absence of timely appointments by the parties, through appointments by the Chairman (Art. 5). Art. 30 resembles the first sentence of Art. 38, its counterpart in Chapter IV on Arbitration. The only differences are the substitution of ‘Commission’ for ‘Tribunal’ and ‘conciliator or conciliators’ for ‘arbitrator or arbitrators,’ as well as the reference to Art. 28 rather than Art. 36. There are no restrictions on the nationality of conciliators in Art. 30 or elsewhere in Chapter III on Conciliation (see Art. 29, para. 5), unlike in the second sentence of Art. 38, which provides that the Chairman cannot appoint nationals of the disputing parties as arbitrators.1 All drafts of Art. 30 contain the same provision of what became the first sentence of Art. 38 (History, Vol. I, pp. 148, 150, 180, 182). The debates on what became Art. 30 (History, Vol. II, pp. 152–153, 262–263, 412–413, 783, 790–791, 1035) did not lead to any divergence in the texts. Some delegates expressed doubts about the usefulness of the Chairman appointing conciliators, since conciliation was by definition a strictly voluntary matter, and a refusal by one party to appoint a conciliator was bound to lead to the failure of the conciliation.2 But Mr. Broches argued successfully that the parties might be willing to accept nominations by a third party and would find it difficult to avoid cooperating once a commission had been set up. A proposal to delete the provision that later became Art. 30 was defeated in a vote (ibid., pp. 409, 413, 783). The details on the appointment of conciliators by the Chairman are set out in Conciliation Rule 4. Conciliation Rule 4 is almost identical to the parallel Arbitration Rule 4 except for references to ‘Commission’ and ‘conciliator(s)’ rather than ‘Tribunal’ and ‘arbitrator(s).’ A small difference in Conciliation and Arbitration Rules 4(4) is due to the absence of a nationality requirement in Art. 30 of the Convention. The absence of a prohibition to appoint nationals or co-nationals of the parties in Art. 30 is the major difference to Art. 38. It is in line with the lack of a provision in Chapter III on Conciliation corresponding to Art. 39 according to which the majority of the tribunal shall be non-nationals. This is the consequence of the drafters’ decision to accept conciliators of the same nationality as the parties (see Art. 29, para. 5). Therefore, 1 Art. 6(4) of the Conciliation (Additional Facility) Rules mirrors Art. 30 of the Convention. 2 See also Paul de Waart, ‘ICSID and Other Forms of Arbitration and Conciliation: Institutionalization of Dispute Settlement in the Context of the Right of Development’ in Detlev C Dicke (ed), Foreign Investment in the Present and a New International Economic Order (Westview 1987) 116, 118.

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appointing under Art. 30, the Chairman may appoint one or several nationals or co-nationals of one or both parties. Due to the similarity of Art. 30 and the first sentence of Art. 38, the provisions of Art. 30 should be read in the light of what this Commentary states on Art. 38 (see Art. 38, paras. 1–27). Subject to the remarks made above, the observations on Art. 38 apply also to the appointment of conciliators by the Chairman as regulated by Art. 30. There is limited practice of the Chairman appointing conciliators pursuant to Art. 30. Most appointments thus far have been made by agreements of the parties under Art. 29(2)(a), obviating the need for the Chairman to become active under Art. 30 (see Art. 29, paras. 7–11). This is not surprising given the need for the parties to collaborate for the conciliation to progress (see Art. 34, paras. 27–29). Known practice is limited to the following three conciliations. In RSM v Cameroon3 and CDE v Cameroon and CAMWATER,4 the Chairman of the Administrative Council appointed the presiding conciliator. In SEEG v Gabon,5 the Chairman appointed all three conciliators. In Barrick v Papua New Guinea, after appointing its conciliator, the investor requested that the Chairman appoint the conciliators not yet appointed pursuant to Art. 30.6

3 4 5 6

RSM v Cameroon (CONC) (registered 19 September 2011). CDE v Cameroon and CAMWATER (CONC) (registered 24 May 2019). SEEG v Gabon (CONC) (registered 16 October 2018). Barrick v Papua New Guinea (CONC) (registered 22 July 2020).

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Article 31 (1) Conciliators may be appointed from outside the Panel of Conciliators, except in the case of appointments by the Chairman pursuant to Article 30. (2) Conciliators appointed from outside the Panel of Conciliators shall possess the qualities stated in paragraph (1) of Article 14. 1

2

3

Art. 31 resembles Art. 40, the equivalent provision in Chapter IV on Arbitration. The only two differences are the substitution of ‘Conciliators’ for ‘Arbitrators’ and the reference to Art. 30 rather than to Art. 38.1 The drafting of what became Art. 31 contains the same provisions as the drafting of Art. 40 (History, Vol. I, pp. 150, 152, 154, 184, 186). In the case of conciliation, the drafters favored maximum flexibility, including the option for the parties to select conciliators from outside the Panel of Conciliators (History, Vol. II, pp. 262, 327, 412–413, 486–487, 510, 569, 783, 791, 938, 955, 960–961, 1038). The requirement that conciliators appointed by the parties from outside the Panel possess the same qualities evoked little discussion (ibid., pp. 946, 982–983). In view of the similarity of Arts. 31 and 40, the provisions of Art. 31 should be read in the light of what this Commentary states on Art. 40. Most of the observations on Art. 40 apply also to the appointment and qualities of conciliators set out in Art. 31 (but see Art. 29, para. 4; Art. 40, paras. 19, 26–27, 30).

1 Art. 7 of the Conciliation (Additional Facility) Rules contains the same provisions as Art. 14(1) of the Convention.

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Article 32 (1) The Commission shall be the judge of its own competence. (2) Any objection by a party to the dispute that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Commission, shall be considered by the Commission which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute. Art. 32 is the first of four Articles in Section 3 of Chapter III on ‘Conciliation Proceedings.’ Other Articles in Section 3 deal with the Conciliation Rules (Art. 33), the conduct of conciliation (Art. 34) and the prohibition to rely on statements during the conciliation in other proceedings (Art. 35). Art. 32 resembles Art. 41, its counterpart in the Chapter on Arbitration. The only difference is the word ‘Commission’ instead of ‘Tribunal.’1 Art. 32 was drafted alongside Art. 41. All drafts provided in identical terms that commissions and tribunals judge their own competence (History, Vol. I, pp. 154, 156, 186, 188). There was practically no separate discussion of the text that became Art. 32 (History, Vol. II, pp. 399, 408, 508, 783, 784, 791, 800, 946). Art. 32 does not reflect the debate during the drafting of the Convention on whether the decision of a conciliation commission on its competence should be a non-binding recommendation only (ibid., pp. 35, 206, 407–408). The idea to submit the question of jurisdiction in conciliation proceedings to separate arbitration was dropped at an early stage of the drafting (ibid., p. 156). The details on the exercise of an ICSID conciliation commission’s KompetenzKompetenz, i.e., its power to determine its own competence, are set out in Conciliation Rule 29.2 This rule resembles Arbitration Rule 41 (see Art. 41, paras. 48, 64, 125, 153), but there are three differences. First, it recognizes that conciliation is a less formal procedure. Second, Conciliation Rule 29(2) does not refer to an ancillary claim in view of the absence of an equivalent provision to Art. 46 in Chapter III on Conciliation. Third, under Conciliation Rule 29(5), the conciliation commission’s decision that the dispute is not within the Centre’s jurisdiction, or not within the commission’s competence, takes the form of a reasoned report (rather than an arbitral award). In view of the similarity between Arts. 32 and 41, the provisions of Art. 32 should be read in the light of what this Commentary states on Art. 41. Subject to the remarks

1 See also ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 31, para 38. 2 See also the Notes to the identical Conciliation Rule 30 of 1968 in ‘Rules of Procedure for Conciliation Proceedings (Conciliation Rules), January 1968’ (1993) 1 ICSID Reports 119, 148–149. Art. 36(1) of the Conciliation (Additional Facility) Rules (2006) mirrors Art. 32(1) of the Convention. Art. 36(2)–(4) of the Conciliation (Additional Facility) Rules (2006) mirrors Conciliation Rule 29.

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made above, the observations on Art. 41 apply also to a decision on jurisdiction by a conciliation commission. In Tesoro v Trinidad and Tobago,3 the Government reserved its right to object to jurisdiction at the preliminary procedural consultation held in accordance with Conciliation Rule 20. The parties agreed that this first meeting would not constitute the ‘first hearing’ in the sense of Conciliation Rule 29, which requires that an objection to jurisdiction be filed no later than the respondent’s first written statement or the first hearing, whichever occurs earlier. Consequently, Trinidad and Tobago remained free to object to the Commission’s jurisdiction.4 The Government objected to jurisdiction in its Counter-Memorial. The objection was based on the inclusion of an ICSID clause in a ‘Heads of Agreement’ between the parties (setting out the terms of the joint venture between Tesoro and the Government of Trinidad and Tobago)5 and the lack of an ICSID clause in the side letter on which Tesoro based its claim. The Conciliator decided to join the Government’s objection to jurisdiction to the merits. After extensive oral presentations and further memorials, the Conciliator found that ICSID had jurisdiction over the dispute because the side letter and the Heads of Agreement constituted one agreement.6

3 Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983). 4 See Lester Nurick and Stephen J Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 346–347. 5 ibid 343. 6 ibid 347–348.

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Article 33 Any conciliation proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Conciliation Rules in effect on the date on which the parties consented to conciliation. If any question of procedure arises which is not covered by this Section or the Conciliation Rules or any rules agreed by the parties, the Commission shall decide the question. Art. 33 resembles Art. 44, its counterpart in Chapter IV on Arbitration. The only difference is the substitution of ‘conciliation’ and ‘Conciliation Rules’ for ‘arbitration’ and ‘Arbitration Rules’ and ‘Commission’ for ‘Tribunal.’ The early drafts to the Convention sought to give conciliation commissions some influence on the choice of procedural rules. The drafters dropped a plan that the Commission must approve an agreement of the parties on conciliation rules (History, Vol. I, pp. 158, 160; Vol. II, pp. 264, 327–328, 414, 479, 510). Starting with the First Draft, the drafts of what became Arts. 33 and 44 were similar, and the two provisions were mostly discussed together (ibid., pp. 791, 946–947) (see Art. 44, paras. 2, 15, 37, 49, 50, 60). In view of the similarity of Arts. 33 and 44, the provisions of Art. 33 should be read in the light of what the applicable parts of this Commentary state on Art. 44. The Centre’s Administrative Council adopted the Conciliation Rules in accordance with Art. 6(1)(c) on 25 September 1967, with effect from 1 January 1968.1 The Conciliation Rules have been amended three times as part of amendments of ICSID’s Rules and Regulations (1984, 2003, and 2006). On 26 September 1984, the Administrative Council adopted revisions to the Rules which took effect immediately.2 The 1968 version of the Conciliation Rules continues to apply to consents given before 26 September 1984.3 On 1 January 2003, the 2003 version of the Conciliation Rules took effect. These Rules continue to apply to consent given before 1 January 2003. The current Conciliation Rules became effective on 10 April 2006.4 They apply to consents given from 10 April 2006 onwards.5 1 ‘Rules of Procedure for Conciliation Proceedings (Conciliation Rules), January 1968’ (1993) 1 ICSID Reports 119. These Rules superseded Provisional Conciliation Rules (adopted 2 February 1967) (1967) 6 ILM 225, 246, (1968) 7 ILM 351, 365. 2 ‘Rules of Procedure for Conciliation Proceedings (Conciliation Rules), September 1984’ (1993) 1 ICSID Reports 181. 3 For a review of the 1984 revisions of the Rules, see Antonio R Parra, ‘Revised Regulations and Rules’ (1985) 2(1) News from ICSID 4. 4 See Rules of Procedure for Conciliation Proceedings (Conciliation Rules) (April 2006). For a review of the 2006 revisions of the ICSID Rules and the Additional Facility Rules, see Aurélia Antonietti, ‘The 2006 Amendments to the ICSID Rules and Regulations and the Additional Facility Rules’ (2006) 21 ICSID Rev 427. 5 The Additional Facility Rules came into effect on 27 September 1978. They were published with nonbinding explanatory comments. The Additional Facility Rules were amended twice, resulting in the Additional Facility Rules 2003 and the current 2006 Rules. The Administrative Council approved the 2003 amendment on 29 September 2002. It became effective on 1 January 2003. The current Additional Facility Rules came into effect on 10 April 2006. The 1978 version of the Additional Facility Rules continues to apply to consents given before 1 January 2003; the 2003 version continues to apply to consents given before 10 April 2006.

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Conciliation procedure differs considerably from arbitration procedure. The more flexible and informal nature of conciliation is reflected in the absence in Chapter III on Conciliation of several of the Convention’s provisions that apply to arbitration, including provisions on evidence, default of a party, ancillary claims, provisional measures, and the award (Arts. 43, 45, 46, 47, 48). These provisions have no direct counterpart in the Chapter on Conciliation but are reflected, in different terms, in Art. 34 (see Art. 34, paras. 5, 6, 12, 15–16, 21–24, 27–29). Other provisions on arbitration dealing with rectification, interpretation, revision and annulment (Arts. 49, 50, 51, 52), and recognition and enforcement of awards (Arts. 53, 54, 55) also lack corresponding provisions in the Chapter on Conciliation. The differences between conciliation and arbitration are also reflected in divergences of the Conciliation and Arbitration Rules (see also Art. 29, para. 4; Art. 32, para. 4).6 The more informal character of conciliation is already apparent in the brevity of the Conciliation Rules. The rules on written statements and hearings in conciliation, as well as on witnesses and on evidence (Conciliation Rules 25–28), are shorter and even more flexible than their counterparts in the Arbitration Rules. The preparation of the report (Conciliation Rule 32) is much simpler than the drafting of an award and the resulting document is likely to be much shorter. There are no provisions in the Conciliation Rules on remedies and procedures after a conciliation commission has rendered its report7 (but see Art. 28, paras. 19–20 concerning enforcement).

6 See also Lester Nurick and Stephen L Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 349. 7 See also Nassib G Ziadé, ‘ICSID Conciliation’ (1996) 13(2) News from ICSID 3.

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Article 34 (1) It shall be the duty of the Commission to clarify the issues in dispute between the parties and to endeavour to bring about agreement between them upon mutually acceptable terms. To that end, the Commission may at any stage of the proceedings and from time to time recommend terms of settlement to the parties. The parties shall cooperate in good faith with the Commission in order to enable the Commission to carry out its functions, and shall give their most serious consideration to its recommendations. (2) If the parties reach agreement, the Commission shall draw up a report noting the issues in dispute and recording that the parties have reached agreement. If, at any stage of the proceedings, it appears to the Commission that there is no likelihood of agreement between the parties, it shall close the proceedings and shall draw up a report noting the submission of the dispute and recording the failure of the parties to reach agreement. If one party fails to appear or participate in the proceedings, the Commission shall close the proceedings and shall draw up a report noting that party’s failure to appear or participate.

OUTLINE Paragraphs A. ‘(1) It shall be the duty of the Commission to clarify the issues in dispute between the parties and to endeavour to bring about agreement between them upon mutually acceptable terms.’ 1–9 B. ‘To that end, the Commission may at any stage of the proceedings and from time to time recommend terms of settlement to the parties.’ 10–14 C. ‘The parties shall cooperate in good faith with the Commission in order to enable the Commission to carry out its functions, . . .’ 15–17 D. ‘. . . and shall give their most serious consideration to its recommendations.’ 18–20 E. ‘(2) If the parties reach agreement, the Commission shall draw up a report noting the issues in dispute and recording that the parties have reached agreement.’ 21–24 F. ‘If, at any stage in the proceedings, it appears to the Commission that there is no likelihood of agreement between the parties, it shall close the proceedings and shall draw up a report noting the submission of the dispute and recording the failure of the parties to reach agreement.’ 25–26 G. ‘If one party fails to appear or participate in the proceedings, the Commission shall close the proceedings and shall draw up a report noting that party’s failure to appear or participate.’ 27–29

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A. ‘(1) It shall be the duty of the Commission to clarify the issues in dispute between the parties and to endeavour to bring about agreement between them upon mutually acceptable terms.’ 1

2

Art. 34 is the Convention’s core Article on ICSID conciliation. The first sentence of Art. 34(1), which sets out the basic function of conciliation to clarify the issues in dispute and to facilitate an agreement between the parties, was reflected in all drafts to the Convention (History, Vol. I, pp. 162, 164). A suggestion to delete the words ‘upon mutually accepted terms’ was defeated in a vote (History, Vol. II, pp. 784–785).1 The aim of conciliation is also reflected in the Report of the Executive Directors to the Convention. After referring to the Convention’s Articles dealing with ICSID conciliation and arbitration respectively, it says: 37. . . . The differences between the two sets of provisions reflect the basic distinction between the process of conciliation which seeks to bring the parties to agreement and that of arbitration which aims at a binding determination of the dispute by the Tribunal.2

3

Lord Wilberforce in Tesoro v Trinidad and Tobago described the function of the conciliator in the following terms: to examine the contentions raised by the parties, to clarify the issues, and to endeavour to evaluate their respective merits and the likelihood of their being accepted, or rejected, in arbitration or court proceedings, in the hope that such evaluation may assist the parties in reaching an agreed settlement.3

4

The procedure in conciliation is more flexible than in arbitration (see Art. 33, para. 6). The Conciliation Rules describe the function of a commission to clarify the issues in dispute in the following terms: Rule 22 Functions of the Commission (1) In order to clarify the issues in dispute between the parties, the Commission shall hear the parties and shall endeavour to obtain any information that might serve this end. The parties shall be associated with its work as closely as possible. (2) [see para. 11 infra] (3) The Commission, in order to obtain information that might enable it to discharge its functions, may at any stage of the proceeding: (a) request from either party oral explanations, documents and other information; (b) request evidence from other persons; and (c) with the consent of the party concerned, visit any place connected with the dispute or conduct inquiries there, provided that the parties may participate in any such visits and inquiries.4

1 Art. 30(1) of the Conciliation (Additional Facility) Rules mirrors the first sentence of Art. 34(1) of the Convention. 2 (1993) 1 ICSID Reports 23, 31. 3 See Lester Nurick and Stephen L Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 348; Nassib G Ziadé, ‘ICSID Conciliation’ (1996) 13(2) News from ICSID 3, 6. 4 See also Conciliation (Additional Facility) Rules (2006) Art. 30.

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Like in arbitration, the commission must hear both parties. Nevertheless, the conciliation commission may hear the parties separately and the commission does not necessarily convey all communications from one party to the other party.5 The Rules do not determine the sequence of written and oral statements by the parties. Under Conciliation Rule 25(1), the commission initially invites the parties to give written statements of their positions within 30 days. But either party may at any stage of the proceedings ‘file such other written statements as it deems useful and relevant.’ Under Conciliation Rule 22(3), the conciliation commission may request oral explanations from either party at any stage of the proceedings.6 Under Conciliation Rule 28(1), each party may, at any stage of the proceeding, request that the commission hear witnesses and experts whose evidence the party considers relevant.7 Two examples of ICSID conciliations, the only ones for which there is significant information in the public domain, illustrate the character and conduct of conciliations. In Tesoro v Trinidad and Tobago,8 ICSID registered the request on 26 August 1983. The briefing schedule set by the Conciliator (Lord Wilberforce) provided for an opening memorial by Tesoro on 20 April 1984. This was to be followed by the Government’s counter-memorial by 22 June 1984 and a reply memorial by 16 July 1984. The parties made oral presentations on 23 July 1984. The sole conciliator, who was appointed by the parties, decided, with the parties’ agreement, that no further hearing was necessary, and that he would decide based on the written submissions of the parties. The conciliator invited both parties to submit to him, in confidence, their views on what might constitute an acceptable settlement. After that, the Government filed a rejoinder memorial followed by a rebuttal memorial by Tesoro and a response memorial by the Government. On 5 February 1985, the conciliator issued his recommendation. He analyzed the merits of the parties’ arguments and proposed a specific settlement. This was followed by eight months of negotiations between the parties during which they also communicated with the conciliator. In response, the conciliator modified one aspect of his recommendation. On 15 October 1985, the parties announced that they had reached a settlement of the dispute. On 27 November 1985, the conciliator issued his report in which he formally closed the proceedings. In SEDITEX v Madagascar II,9 ICSID registered the request on 13 June 1994. The parties first exchanged two rounds of memorials. At a subsequent session of the conciliation commission, its president directed the parties to make confidential proposals to the commission with a view to a complete settlement of the dispute. After the submission of these proposals, the parties responded to questions posed by the commission. Thereafter, the commission communicated a draft recommendation to the parties and invited their observations thereon. When significant divergences persisted, the

5 Note A to Conciliation Rule 22 of 1968, (1993) 1 ICSID Reports 119, 142. Cf also Art. 10 of the UNCITRAL Conciliation Rules (1980) (1981) 20 ILM 300, 304. 6 See also Notes D and E to Conciliation Rule 22 of 1968, (1993) 1 ICSID Reports 119, 142–143. 7 Ziadé (n 3). See also Conciliation (Additional Facility) Rules (2006) Arts. 33, 35. 8 Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983). The description of the proceeding is based on Nurick and Schnably (n 3) 347–349. 9 SEDITEX v Madagascar II (CONC) (registered 13 June 1994). The description of the proceeding is based on Emmanuel Gaillard, La Jurisprudence du CIRDI (Pedone 2004) 417–419.

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commission held another session during which it invited the parties to advance specific proposals for the resolution of the remaining open questions. At the end of that session, the commission found that the parties were unable to reach agreement and announced its intention to close the proceedings after 30 days. The commission’s report of 19 July 1996 describes the proceedings and concludes that no agreement had been reached. B. ‘To that end, the Commission may at any stage of the proceedings and from time to time recommend terms of settlement to the parties.’ 10

11

The conciliation commission’s power to recommend terms of settlement is part of its essential functions and was reflected in all drafts of the Convention (History, Vol. I, pp. 162, 164). The drafters inserted the words ‘and from time to time’ to preclude any interpretation that it would be without functions after issuing a recommendation (History, Vol. II, p. 154). On the question of whether a conciliation commission would state the grounds on which its recommendation was based, Mr. Broches pointed out that ‘such a statement of reasons was not excluded’ (ibid., p. 414). Conciliation Rule 22(2) specifies the ICSID commission’s power to make recommendations: (2) In order to bring about agreement between the parties, the Commission may, from time to time at any stage of the proceeding, make – orally or in writing – recommendations to the parties. It may recommend that the parties accept specific terms of settlement or that they refrain, while it seeks to bring about agreement between them, from specific acts that might aggravate the dispute; it shall point out to the parties the arguments in favor of its recommendations. It may fix time limits within which each party shall inform the Commission of its decision concerning the recommendations made.10

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The commission ‘shall point out’ the arguments supporting its recommendation. The words ‘at any stage of the proceeding’ and ‘from time to time’ give the conciliation commission much flexibility. The commission need not wait until a particular stage of the proceedings has been reached before it can issue a recommendation. In particular, it need not wait until it has completed clarifying the issues in dispute. It may also make recommendations repeatedly. In doing so, it may vary and adjust its recommendations as the deliberations progress. It can make recommendations ‘orally or in writing.’11 In both Tesoro and SEDITEX II, the conciliators issued recommendations to the parties. In both cases, the parties continued to negotiate based on these recommendations. In both cases, the conciliators showed their willingness to adjust their recommendations as the need arose (see paras. 7, 9 supra). The recommendation of terms of settlement is not unique to conciliation. Agreed settlements may also be reached during adjudication including arbitration. More than

10 See also Conciliation (Additional Facility) Rules (2006) Art. 30(3). 11 Ziadé (n 3) 6. See also Note C to Conciliation Rule 22 of 1968, (1993) 1 ICSID Reports 119, 142. Cf also UNCITRAL Conciliation Rules (n 5) Art. 7(4). As for the question whether reasons need to be provided for recommendations, see Conciliation (Additional Facility) Rules (2006) Art. 30(3) (stating that the Commission’s recommendations to the parties may be made ‘together with arguments in favor thereof’).

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one-third of ICSID arbitration cases were at some stage settled or otherwise discontinued by the parties (see Art. 48, paras. 88–107). Tribunals may have helped bring about that result.12 C. ‘The parties shall cooperate in good faith with the Commission in order to enable the Commission to carry out its functions, . . .’ The procedural obligation to cooperate in conciliation is referred to in the Convention’s Preamble which recognizes ‘that mutual consent by the parties to submit such disputes to conciliation . . . constitutes a binding agreement . . .’ This principle was contained in all drafts leading to the Convention (History, Vol. I, pp. 162, 164) and was not seriously challenged during the deliberations (History, Vol. II, pp. 54–55, 57, 154–155, 263, 328, 435, 785–786). This procedural obligation contrasts with a party’s right to reject the conciliation commission’s recommendations on the merits (see para. 18 infra). Unlike arbitration (Art. 45), participation in conciliation is necessary for the conciliation commission to proceed and non-participation will lead to the closure of the proceedings (see paras. 29–31 infra). The Conciliation Rules set out the duty to cooperate in more detail:

15

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Rule 23 Cooperation of the Parties (1) The parties shall cooperate in good faith with the Commission and, in particular, at its request furnish all relevant documents, information and explanations as well as use the means at their disposal to enable the Commission to hear witnesses and experts whom it desires to call. The parties shall also facilitate visits to and inquiries at any place connected with the dispute that the Commission desires to undertake. (2) The parties shall comply with any time limits agreed with or fixed by the Commission.13

Art. 25(1), second sentence, states that consent to ICSID jurisdiction is irrevocable (see Art. 25, paras. 1057–1110). As mentioned above, Art. 25 does not distinguish between conciliation and arbitration and consent may relate to both without stating any priority (see Art. 28, para. 8). A party that has consented to ICSID conciliation ought to take part in these proceedings in good faith.14 However, there is no legal obligation to do so (History, Vol. II, p. 328). Continuation of the proceedings depends on the ongoing cooperation of the parties.15 Non-participation of one party leads to closure of the conciliation proceedings. Moreover, the commission cannot sanction a party for refusing to cooperate in conciliation proceedings, except that it shall note such

12 See also Ziadé (n 3) 7. 13 See also the Notes to the identical Conciliation Rule 23 of 1968, (1993) 1 ICSID Reports 119, 143–144; Conciliation (Additional Facility) Rules (2006) Arts. 30(4), 31. 14 See Conciliation (Additional Facility) Rules (2006) Arts. 25(1), 34(1). Cf also UNCITRAL Conciliation Rules (n 5) Arts. 2(3), 11. 15 See also Barton Legum and Anna Crevon, ‘Conciliation’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulations and Rules (Edward Elgar 2019) 256, paras 3.32–3.34.

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non-cooperation in its report (see paras. 27–29 infra). The parties can also reject any recommendation of the conciliation commission.16 D. ‘. . . and shall give their most serious consideration to its recommendations.’ 18

19

20

Unlike arbitral awards, recommendations of conciliation commissions are not binding. The parties may not reject these recommendations arbitrarily, but must consider them in good faith. This principle was reflected in all drafts of the Convention (History, Vol. I, pp. 162, 164). It remained uncontested during its drafting (History, Vol. II, pp. 154–155, 328, 785, 786, 791). The Convention’s Preamble also states that mutual consent to conciliation ‘constitutes a binding agreement which requires in particular that due consideration be given to any recommendation of conciliators.’ The parties may agree in advance to accept a recommendation of conciliators as binding. The Preliminary Draft and the First Draft provided that the recommendations of the conciliation commission would not be binding ‘except as the parties to the dispute shall otherwise agree’ (History, Vol. I, pp. 162, 164; Vol. II, pp. 328, 786). This provision did not make it into the Convention’s final text. But the parties can agree otherwise although in this case the binding character of the recommendation does not result from the Convention.17 Such agreement between the parties does not give the recommendation the status of an award. In particular, it is not enforceable in accordance with Art. 54, a weakness compared to arbitration.18 As an alternative, it is conceivable that parties, after agreeing on a settlement in conciliation proceedings, but without formalizing it, switch to arbitration proceedings where they formally settle and have the tribunal cast the settlement into an (enforceable) award19 (but see also Art. 28, paras. 19–20 concerning enforcement). E. ‘(2) If the parties reach agreement, the Commission shall draw up a report noting the issues in dispute and recording that the parties have reached agreement.’

21

The report of the commission is the final document in conciliation proceedings. It was foreseen in all drafts of the Convention. The Working Paper and the Preliminary Draft provided that, except as the parties otherwise agree, the report should contain the terms of settlement reached by the parties (History, Vol. I, pp. 164, 166). After some debate, the delegates deleted this provision (History, Vol. II, pp. 153, 263–264, 328, 783–784, 786, 791). Mr. Broches explained that publication of the terms of settlement might embarrass governments and private investors (ibid., p. 510). The requirement that the 16 Ziadé (n 3) 4, 8; Paul de Waart, ‘ICSID and Other Forms of Arbitration and Conciliation: Institutionalization of Dispute Settlement in the Context of the Right of Development’ in Detlev C Dicke (ed), Foreign Investment in the Present and a New International Economic Order (Westview 1987) 116, 118. The same applies to ICSID (AF) conciliation. See Conciliation (Additional Facility) Rules (2006) Arts. 1, 30(3), 31. 17 Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 337; Legum and Crevon (n 15) para 3.43. 18 Ziadé (n 3) 7. 19 This is plausible, and more likely if the time between the request for arbitration and the award in the form of a settlement is short. See Art. 28, para 12 for a list of failed ICSID conciliations that were followed by arbitration. In one case, SEEG v Gabon, the time between the request and the award on agreed terms was less than six months.

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‘issues in dispute’ be noted was inserted instead (History, Vol. I, pp. 164, 166; Vol. II, pp. 784–785). Conciliation Rule 30(1) foresees the option for the parties to jointly request the inclusion of the terms of settlement in the report:

22

Rule 30 Closure of the Proceeding (1) If the parties reach agreement on the issues in dispute, the Commission shall close the proceeding and draw up its report noting the issues in dispute and recording that the parties have reached agreement. At the request of the parties, the report shall record the detailed terms and conditions of their agreement.20

An agreement reached during conciliation does not enjoy the status of an award. There is no possibility to incorporate such an agreement into an award analogous to Arbitration Rule 43(2) (see Art. 48, paras. 89, 92). Enforcement of a settlement reached during conciliation does not benefit from Art. 54 on enforcement, but requires a new legal action.21 Therefore, it may be wise to include an arbitration clause into an agreement reached under Art. 34(2). Including such an arbitration clause in the parties’ agreement enables an arbitration to be initiated for failure to implement the settlement (but see also Art. 28, paras. 19–20 concerning enforcement). Conciliation Rule 33(3) provides that the report of a conciliation commission shall not be published without the consent of the parties. This provision echoes Art. 48(5) relating to the publication of an arbitral award (see Art. 48, paras. 127–155). Under Administrative and Financial Regulation 22(2), if both parties consent to the publication of the conciliation commission’s report, the Secretary-General shall arrange for its publication in an appropriate form. There is no prohibition against one party releasing a report for publication (cf. Art. 48, paras. 136, 137).22 Conciliation commissions issued reports in six ICSID conciliations.23 However, none of these reports has been published.

23

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F. ‘If, at any stage in the proceedings, it appears to the Commission that there is no likelihood of agreement between the parties, it shall close the proceedings and shall draw up a report noting the submission of the dispute and recording the failure of the parties to reach agreement.’ A report of the conciliation commission in case of a failure of its efforts was provided for in all drafts of the Convention. The original wording to the effect that the commission ‘will close the proceedings’ was changed into the mandatory wording ‘shall close 20 See also Conciliation (Additional Facility) Rules (2006) Art. 37(3) and Note C to Conciliation Rule 31 of 1968, (1993) 1 ICSID Reports 119, 150. 21 See also Linda C Reif, ‘Conciliation as a Mechanism for the Resolution of International Economic and Business Disputes’ (1991) 14 Fordham ILJ 578, 636. 22 Cf UNCITRAL Conciliation Rules (n 5) Art. 14. 23 Tesoro v Trinidad and Tobago (CONC) (registered 26 August 1983); SEDITEX v Madagascar II (CONC) (registered 13 June 1994); Togo Electricité v Togo (CONC) (registered 20 May 2005); Shareholders of SESAM v Central African Republic (CONC) (registered 13 August 2007); RSM v Cameroon (CONC) (registered 19 September 2011); SEEG v Gabon (CONC) (registered 16 October 2018). In addition, one report has been issued in Equatorial Guinea v CMS and others (CONC(AF)) (registered 29 June 2012).

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the proceeding’ (History, Vol. II, p. 785). A clause in the Working Paper stating that the report should not contain the terms of a settlement recommended by the commission, unless the parties otherwise agree, was deleted (History, Vol. I, pp. 164, 166, 168). The provision led to little debate (History, Vol. II, pp. 154, 415, 510, 784, 791–792). Conciliation Rule 30(2)24 does little more than restate the second sentence of Art. 34(2). It additionally refers to the notification of the parties before closing the proceeding. The Report in SEDITEX II describes the different stages of the proceedings and records the fact that the parties have not reached an agreement.25 G. ‘If one party fails to appear or participate in the proceedings, the Commission shall close the proceedings and shall draw up a report noting that party’s failure to appear or participate.’

27

28

Non-participation in the conciliation by one party leads to the closure of the proceedings. Furthermore, the Commission shall note such non-cooperation in its report (see paras. 15–17 supra). Starting with the Preliminary Draft, the drafts to the Convention all provided that a party’s non-cooperation shall be reflected in the report (History, Vol. I, pp. 166, 168; Vol. II, pp. 264, 409, 784, 785, 792). The Convention does not foresee any other sanction for non-cooperation. Rule 30(3) of the Conciliation Rules states: If one party fails to appear or participate in the proceeding, the Commission shall, after notice to the parties, close the proceeding and draw up its report noting the submission of the dispute to conciliation and recording the failure of that party to appear or participate.26

29

Since conciliation depends on the cooperation of the parties, the Convention does not provide for ex parte proceedings analogous to Art. 45(2).27

24 25 26 27

See also Conciliation (Additional Facility) Rules (2006) Art. 37(2). Gaillard (n 9) 417–419. See also Conciliation (Additional Facility) Rules (2006) Art. 37(1). See also Ziadé (n 3) 7, 8.

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Article 35 Except as the parties to the dispute shall otherwise agree, neither party to a conciliation proceeding shall be entitled in any other proceeding, whether before arbitrators or in a court of law or otherwise, to invoke or rely on any views expressed or statements or admissions or offers of settlement made by the other party in the conciliation proceedings, or the report or any recommendations made by the Commission. The principle in Art. 35 is that all statements during the conciliation are off limits for any other proceedings and helps keep ICSID conciliation proceedings confidential.1 It was reflected in all drafts of the Convention (History, Vol. I, pp. 168, 170). Its purpose is to encourage the parties to remain flexible during conciliation proceedings and to dispel concerns that their position in conciliation might be used against them in subsequent adjudication (History, Vol. II, pp. 154–155, 328, 414). The idea was not uncontested during the deliberations and the possibility for parties to agree otherwise was adopted as a compromise (ibid., pp. 263, 265, 328, 414–415, 786–787). Since reports and recommendations of conciliation commissions usually have their origin in offers by the parties, reports and recommendations were included in the prohibition (ibid., pp. 415, 787). Mr. Broches underscored that if the parties agreed to accept a recommendation of a conciliation commission, such agreement is not excluded from invocation in subsequent judicial proceedings (ibid., p. 787). A related provision in the Arbitration Rules (Rule 1(4)) prohibits the appointment of a person, who had previously acted as conciliator, to an arbitral tribunal constituted in the same dispute2 (see Art. 40, paras. 26, 27). Art. 35 is designed to ensure that disclosures and admissions by the parties in conciliation proceedings will not be used in subsequent arbitration or court proceedings. This assurance is likely to foster the parties’ readiness to agree to conciliation and their flexibility in negotiating an agreed settlement.3 Other instruments governing international conciliation incorporate the same principle.4 On the other hand, this may lead to additional legal costs in subsequent arbitration proceedings. The parties will have to prove the facts underlying the dispute, and will have to present arguments to a tribunal, which they have previously put before a conciliation commission.5 1 See Barton Legum and Anna Crevon, ‘Conciliation’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulations and Rules: A Practical Commentary (Edward Elgar 2019) 256, para 3.51. 2 See also Note I to Arbitration Rule 1 of 1968, (1993) 1 ICSID Reports 63, 67. 3 Nassib G Ziadé, ‘ICSID Conciliation’ (1996) 13(2) News from ICSID 3, 4. Art. 37(4) of the Conciliation (Additional Facility) Rules mirrors Art. 35 except for referring to ‘may’ instead of ‘shall be entitled.’ 4 See Art. 20 of the UNCITRAL Conciliation Rules (adopted 23 July 1980) (1981) 20 ILM 300, 306. See also Linda C Reif, ‘Conciliation as a Mechanism for the Resolution of International Economic and Business Disputes’ (1991) 14 Fordham ILJ 578, 586, 614, 618–619. 5 Lester Nurick and Stephen J Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 343.

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The prohibition in Art. 35 is subject to the clause ‘except as the parties to the dispute shall otherwise agree.’ Therefore, the parties may agree to permit the use of material presented in conciliation proceedings or of the report or recommendation of a conciliation commission in subsequent judicial proceedings. An agreement of this kind can be reached in advance, together with the agreement containing consent to conciliation.6 Such an agreement may be concluded during conciliation proceedings and may be part of an arbitration clause contained in an agreement under Art. 34(2). The Conciliation Rules provide that any agreement under Art. 35 must be reflected in the report of the conciliation commission: Rule 32 The Report ... (2) The report shall also record any agreement of the parties, pursuant to Article 35 of the Convention, concerning the use in other proceedings of the views expressed or statements or admissions or offers of settlement made in the proceeding before the Commission or of the report or any recommendation made by the Commission.7

6 See Clause XXIX of the 1968 Model Clauses, (1968) 7 ILM 1159, 1181. The subsequent versions of the Model Clauses do not contain such a clause. 7 Art. 38(2) of the Conciliation (Additional Facility) Rules contains the same provisions as Conciliation Rule 32.

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Article 36 (1) Any Contracting State or any national of a Contracting State wishing to institute arbitration proceedings shall address a request to that effect in writing to the Secretary-General who shall send a copy of the request to the other party. (2) The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to arbitration in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings. (3) The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register.

OUTLINE Paragraphs I. INTRODUCTION 1–8 II. INTERPRETATION 9–78 A. ‘(1) Any Contracting State or any national of a Contracting State wishing to institute arbitration proceedings shall address a request to that effect in writing to the Secretary-General who shall send a copy of the request to the other party.’ 9–22 1. Initiative 9–11 2. The Request 12–18 3. Transmittal of Copy 19–22 B. ‘(2) The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to arbitration in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings.’ 23–44 1. Required Information 23–32 2. Optional Information 33–35 3. Consultation, Supplementation, and Correction 36–38 4. Procedural Nature of Institution Rules 39–44 C. ‘(3) The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register.’ 45–78 1. Purpose of Screening 45–48 2. Basis for Decision on Registration 49–57 3. Finality of Decision on Registration 58–60 4. Notification and Consequences of Registration 61–64

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65–71 72–78

BIBLIOGRAPHY Brower, Charles N, ‘The Initiation of Arbitration Proceedings: “Jack Be Nimble, Jack Be Quick . . .!”’ (1998) 13 ICSID Review 15 Parra, Antonio R, ‘The Screening Power of the ICSID Secretary General’ (1985) 2(2) News from ICSID 10 ‘The Institution of ICSID Arbitration Proceedings’ (2003) 20(2) News from ICSID 12 The History of ICSID (2nd edn, OUP 2017) 143–146, 232–236 Polasek, Martina, ‘The Threshold for Registration of a Request for Arbitration under the ICSID Convention’ (2011) 5(2) Dispute Resolution International 177 Puig, Sergio and Brown, Chester, ‘The Secretary-General’s Power to Refuse to Register a Request for Arbitration under the ICSID Convention’ (2012) 27 ICSID Review 172 Sutton, Stephen D, ‘Emilio Augustin Maffezini v Kingdom of Spain and the ICSID Secretary General’s Screening Power’ (2005) 21 Arbitration International 113 Townsend, John M, ‘The Initiation of Arbitration Proceedings: “My Story Had Been Longer”’ (1998) 13 ICSID Review 21

I. INTRODUCTION 1 2

3

Art. 36 is the single Article in Section 1 of the Convention’s Chapter IV on ‘Arbitration,’ Section 1 is entitled ‘Request for Arbitration.’ Art. 36 deals with the institution, that is, the first stage of arbitration proceedings. It describes the request that must be submitted to the Secretary-General by the claimant and the information contained therein. It also deals with the steps that the SecretaryGeneral must take, specifically his or her duty to determine whether the request is manifestly outside the Centre’s jurisdiction. The more detailed rules for this initial stage of the proceedings are contained in the Institution Rules1 (see Art. 44, paras. 5, 6, 9, 45–47). They are adopted by the Administrative Council pursuant to Art. 6(1)(b) of the Convention. The Institution Rules deal with the submission and registration of the request for arbitration and the notification of registration to the parties.2 They focus on the period from the filing of a request to the dispatch of the notice of registration. After that, proceedings are regulated by the Conciliation Rules and the Arbitration Rules. The inter-temporal rule of Art. 44, which provides that, unless otherwise agreed, proceedings shall be conducted under the Rules in effect on the date of consent (see Art. 44, paras. 48–52) does not apply to the Institution Rules; they are always applied in their most recent version. The Institution Rules are examined in more detail in their proper context below.

1 See ‘Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (Institution Rules)’ in ICSID, ‘ICSID Convention, Regulations and Rules’ ICSID/15 (2006) 73. 2 See also PF Sutherland, ‘The World Bank Convention on the Settlement of Investment Disputes’ (1979) 28 ICLQ 367, 386–387.

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Other instruments governing international adjudication show considerable variation in their provisions on the initiation of proceedings.3 This variation is manifest, in particular, with respect to the addressee of the request4 and with respect to the existence of a preliminary screening of the request.5 Art. 36 does not follow any pre-existing model but was developed independently during the Convention’s drafting. Questions prominent in the deliberations on what eventually became Art. 36 were the necessity or desirability of a joint request (see paras. 10, 11 infra), the transmittal of the request to the respondent (see para. 19 infra), the information to be included in the request (see paras. 23–25 infra), the requirement of prior consent (see Art. 25, para. 901), and the extent of the Secretary-General’s screening power (see paras. 45–48, 57 infra). Art. 36 has its counterpart in Art. 28 dealing with conciliation. The provisions of Arts. 28 and 36 are identical, except for the words ‘conciliation’ and ‘arbitration’ appearing in the respective Articles. During the Convention’s preparation, there was some discussion on whether different rules should apply to the two procedures, since conciliation depends on cooperation and good faith (History, Vol. II, pp. 262–263, 404, 409, 770–771, 788). But in the end, the opinion prevailed that the two provisions should be substantively identical (ibid., p. 782). Art. 36 does not apply to the Additional Facility (see Art. 25, paras. 12–19).6 The Arbitration (Additional Facility) Rules contain a chapter on Institution of Proceedings (Arts. 2–5), which is similar to the ICSID Institution Rules (see para. 3 supra). The most important difference between the two sets of rules is the fact that, under the Additional Facility, the registration of the claimant’s request is subject to an additional requirement: the agreement of the parties providing for arbitration under the Additional Facility must have been approved by the Secretary-General in accordance with Art. 4 of the Additional Facility Rules7 (see Art. 25, paras. 40, 41, 485–486, 489, 495–496, 513). Other aspects of the Arbitration (Additional Facility) Rules dealing with the institution of proceedings are referred to below (see paras. 10, 18, 25, 48, 62, 65 infra). The Secretary-General performs a different screening function with respect to a request for annulment. He or she will refuse to register an application for annulment, if it does not relate to an award (see Art. 52, paras. 71, 73), if it is outside the time limits or if it is not submitted by one of the parties to the original proceedings (see Art. 52, paras. 103–111). Similar considerations apply to a request for revision (see Art. 51, paras. 18, 19) and to a request for rectification (see Art. 49, paras. 29–40). In the case of

3 See esp Charles N Brower, ‘The Initiation of Arbitration Proceedings: “Jack Be Nimble, Jack Be Quick . . .!”’ (1998) 13 ICSID Rev 15, 17 ff; Antonio R Parra, ‘The Screening Power of the ICSID Secretary General’ (1985) 2(2) News from ICSID 10, 10–11; Antonio R Parra, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Rev 287, 303–304. 4 See eg UNCITRAL Arbitration Rules (2013) Art. 3(1), providing for direct delivery of the notice of arbitration to the respondent. 5 See eg ICC Arbitration Rules (2021) Arts. 4(5), 5(1), and 6(4), providing for a screening of the request after the respondent has had the opportunity to provide an answer. 6 See Additional Facility Rules, Art. 3. 7 See Arbitration (Additional Facility) Rules, Art. 3(1)(c). See Ibrahim FI Shihata and Antonio R Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 344 ff.

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a request for interpretation, there is no time limit to observe (Art. 50, para. 28). There is no screening power under Art. 36(3) with respect to the resubmission of a dispute under Art. 52(6) after the annulment of an award (see Art. 52, para. 809).

II. INTERPRETATION A. ‘(1) Any Contracting State or any national of a Contracting State wishing to institute arbitration proceedings shall address a request to that effect in writing to the Secretary-General who shall send a copy of the request to the other party.’

1. Initiative 9

10

The request for arbitration may come from either the host State or the investor. In actual practice, the request for arbitration nearly always comes from the investor.8 An investor does not require any authorization from its State of nationality to institute proceedings.9 A host State’s constituent subdivision or agency may also submit a request for arbitration, provided the requirements of Art. 25(1) and (3) have been complied with (see Art. 25, paras. 523–571, 1446–1471).10 The request may also be made jointly by both parties. The Institution Rules provide to this effect: Rule 1 The Request ... (2) The request may be made jointly by the parties to the dispute.11

11

The issue of a joint request was the subject of some debate during the Convention’s preparation. A suggestion that the Convention require a joint request by the parties was rejected, since it was seen as amounting to a requirement of a second consent (History, Vol. II, pp. 770–773, 776).

2. The Request 12

The request for arbitration is to be directed to the Secretary-General.12 The Institution Rules elaborate on the Convention’s text in the following manner:13 Rule 1 The Request (1) Any Contracting State or any national of a Contracting State wishing to institute conciliation or arbitration proceedings under the Convention shall address a request to that effect in writing to the Secretary-General at the seat of the Centre. The request shall

8 For cases initiated by the host State or an agency of the host State, see Gabon v Société Serete; TANESCO v IPTL; East Kalimantan v PT Kaltim Prima Coal; Caravelí v Peru. See also Gustavo Laborde, ‘The Case for Host State Claims in Investment Arbitration’ (2010) 1 JIDS 97. 9 A suggestion to this effect during the Convention’s drafting found no support, see History, Vol II, 982. 10 See Institution Rules 2(1)(b) and (c); see further para 25 infra. 11 See also Arbitration (Additional Facility) Rules, Art. 2(2). 12 See ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 30, para 34. 13 See also ICSID, ‘How to File a Request for Arbitration – ICSID Convention’ accessed 10 January 2021.

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indicate whether it relates to a conciliation or an arbitration proceeding. It shall be drawn up in an official language of the Centre, shall be dated, and shall be signed by the requesting party or its duly authorized representative.14

In accordance with Art. 2, the Centre’s seat is at the principal office of the International Bank for Reconstruction and Development. The address is: ICSID, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. A request and all supporting documentation should be submitted by uploading it onto ICSID’s document-sharing platform and by transmitting it to the ICSID Secretariat’s email: .15 The parties’ consent may cover both conciliation and arbitration (see Art. 25, paras. 27–37), or conciliation followed by arbitration. If a choice can be made between the two methods, the request is the latest opportunity to do so. If arbitration is to follow an unsuccessful attempt at conciliation, separate requests are required at each stage.16 The official languages of the Centre are specified in Administrative and Financial Regulation 34(1) as English, French, and Spanish. Therefore, the request must be drawn up in one of these three languages. The choice of one of these languages for the request is without prejudice to the choice of the procedural language(s) for the arbitration proceedings, which is specified in Arbitration Rule 2217 (see Art. 44, paras. 92–103). In accordance with Institution Rule 4, a request must be accompanied by five additional signed copies. The Secretary-General may require further copies. Any documentation supporting the request (see paras. 29–30 infra) must conform to Administrative and Financial Regulation 30. This Regulation specifies the form of documents, the number of copies, the possibility of submitting extracts, and the languages of supporting documentation.18 The request should be accompanied by a lodging fee in accordance with Administrative and Financial Regulation 16 (see Art. 59, para. 9). This fee is a charge for the use of the Centre in the sense of Art. 59 of the Convention. The fee is nonrefundable, even if registration is refused or the request is withdrawn (see paras. 65–71 infra). Its amount is determined, from time to time, by the Secretary-General. The Schedule of Fees in its version of 1 January 2020 sets this fee at USD 25,000. Non-payment of the lodging fee at the time of the request will stall the procedure: under Institution Rule 5(1) the Secretary-General will not take any action except to acknowledge receipt of the request to the requesting party until the fee has been received.19 Neither the Convention, nor the Institution Rules, contain any time limits for requests.20 But an agreement between the parties may contain certain temporal conditions for consent. For example, Chapter 11 of the North American Free Trade Agreement (NAFTA), which provides for ICSID and Additional Facility arbitration

14 See also Arbitration (Additional Facility) Rules, Art. 2(1). 15 See ICSID, ‘How to File a Request for Arbitration – ICSID Convention’ accessed 10 January 2021. 16 See Note C to Institution Rule 1 of 1968, (1993) 1 ICSID Reports 52. 17 See Note D to Institution Rule 1 of 1968, (1993) 1 ICSID Reports 52. 18 See also Note L to Institution Rule 2 of 1968 and Notes A–D to Institution Rule 4 of 1968, (1993) 1 ICSID Reports 55, 56–57. 19 See also Notes A–E to Institution Rule 5 of 1968, (1993) 1 ICSID Reports 57–58. 20 See Note A to Institution Rule 1 of 1968, (1993) 1 ICSID Reports 52.

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(see Art. 25, paras. 864–867), requires that six months must have elapsed since the events giving rise to a claim before an investor may make a request for arbitration.21 But a claim is allowed only within three years from the date on which the investor acquired knowledge of the relevant facts.22

3. Transmittal of Copy 19

The requesting party will receive an acknowledgement from the Secretary-General that the request has been received (Institution Rule 5(1)(a)). The Secretary-General will also transmit a copy of the request to the respondent.23 The Institution Rules provide to this effect: Rule 5 Acknowledgement of the Request ... (2) As soon as he has received the fee for lodging the request, the Secretary-General shall transmit a copy of the request and of the accompanying documentation to the other party.24

20

21

During the Convention’s drafting there was some debate on who should notify the respondent of the request. The original idea was that the claimant would have to send a copy of the request to the respondent (History, Vol. II, pp. 769, 771, 773, 775, 787). This was subsequently changed to the final version under which it is the SecretaryGeneral’s duty to transmit a copy of the request to the respondent (ibid., pp. 788, 861). After receiving a copy of the request, the respondent need not react immediately25 (see para. 51 infra). But the respondent is not precluded from reacting and often argues that the request should not be registered.26 The requesting party gets an opportunity to comment on the reaction of the respondent, particularly if that reaction raises serious jurisdictional issues, or casts doubt on the veracity of the claimant’s assertions.27 Sometimes there are several rounds of submissions by the parties before the decision on the registration of the request is made.28 Also, the notification of the request to the respondent gives the parties an opportunity to settle the dispute before the arbitration

21 North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, Art. 1120(1). See also United StatesMexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020) Art. 14.D.2; Energy Charter Treaty (ECT) (signed 17 December1994, entered into force 16 April 1998) (1995) 34 ILM 373, Art. 26(2). 22 NAFTA (n 21) Arts. 1116(2) and 1117(2). See also USMCA (n 21) Art. 14.D.5. 23 States may notify ICSID of the name and address of the State office in charge of receiving requests for arbitration from ICSID. See ICSID, ‘Practice Notes for Respondents in ICSID Arbitration’ (2015) 16 accessed 10 January 2021. 24 See also Note E to Institution Rule 5 of 1968, (1993) 1 ICSID Reports 58. 25 Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 659. 26 See eg Olguín v Paraguay, Award (26 July 2001) para 8; Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 2. 27 See eg Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 40; Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 3; Tokios Tokelės v Ukraine, Award (26 July 2007) para 20; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 44. 28 Antonio R Parra, ‘The Institution of ICSID Arbitration Proceedings’ (2003) 20(2) News from ICSID 12, 13; Antonio R Parra, The History of ICSID (2nd edn, OUP 2017) 235.

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procedure is actually set in motion (see History, Vol. II, p. 769).29 The claimant may withdraw the request up to the date of its registration, or the date of the formal refusal of registration, as the case may be (see paras. 65–71 infra). The agreement between the parties may add further procedural requirements to the lodging of the request. Some treaties providing for consent require that the investor deliver a notice of intent to submit a claim to arbitration to the host State a certain period of time before the claim is submitted to arbitration.30 Some treaties provide for a mandatory waiting period for amicable settlement and/or an attempt to settle the dispute through domestic courts (see Art. 25, paras. 982–996).

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B. ‘(2) The request shall contain information concerning the issues in dispute, the identity of the parties and their consent to arbitration in accordance with the rules of procedure for the institution of conciliation and arbitration proceedings.’

1. Required Information Art. 36(2) specifies the information to be included in the request. This information covers the jurisdictional requirements as set out in Art. 25(1). It relates to jurisdiction ratione materiae, ratione personae, and to consent (see Art. 25, para. 4). There is no need to articulate all legal arguments or specific causes of action that the claimant relies upon in the request for arbitration.31 The provision dealing with the information to be contained in a request underwent considerable changes during the Convention’s drafting.32 The Preliminary Draft simply required that the request ‘shall state that the other party has consented to the jurisdiction of the Center’ (History, Vol. I, p. 172). After some deliberation (History, Vol. II, pp. 262–263, 412–413, 511), the First Draft provided that the request shall contain information concerning the subject-matter of the dispute, the identity of the parties as well as consent, sufficient to establish prima facie that the dispute is within the Centre’s jurisdiction (History, Vol. I, p. 172). The formula dealing with prima facie proof of jurisdiction was deleted after some debate (History, Vol. II, pp. 770, 773, 775, 787, 861). It was replaced by the provision on the Secretary-General’s screening power in Art. 36(3). In response to demands that the request for arbitration should contain more specific information, it was decided to relegate further detail to the Institution Rules (ibid., pp. 773, 774, 787, 861). The necessary detail concerning the information to be included in the request for arbitration is provided in the Institution Rules: Rule 2 Contents of the Request (1) The request shall: (a) designate precisely each party to the dispute and state the address of each;

29 See also Note E to Institution Rule 5 of 1968, (1993) 1 ICSID Reports 58. 30 See eg NAFTA (n 21) Art. 1119; USMCA (n 21) Art. 14.D.3; Costa Rica–Spain BIT (signed 8 July 1997, entered into force 17 July 1999) Art. XI.1. For an application of this provision, see Supervisión y Control v Costa Rica, Final Award (18 January 2017) paras 336–348, 351. 31 See Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 298–301. 32 See Parra, ‘The Screening Power’ (n 3) 11.

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schreuer’s commentary on the icsid convention (b) state, if one of the parties is a constituent subdivision or agency of a Contracting State, that it has been designated to the Centre by that State pursuant to Article 25(1) of the Convention; (c) indicate the date of consent and the instruments in which it is recorded, including, if one party is a constituent subdivision or agency of a Contracting State, similar data on the approval of such consent by that State unless it had notified the Centre that no such approval is required; (d) indicate with respect to the party that is a national of a Contracting State: (i) its nationality on the date of consent; and (ii) if the party is a natural person: (A) his nationality on the date of the request; and (B) that he did not have the nationality of the Contracting State party to the dispute either on the date of consent or on the date of the request; or (iii) if the party is a juridical person which on the date of consent had the nationality of the Contracting State party to the dispute, the agreement of the parties that it should be treated as a national of another Contracting State for the purposes of the Convention; (e) contain information concerning the issues in dispute indicating that there is, between the parties, a legal dispute arising directly out of an investment; and (f ) state, if the requesting party is a juridical person, that it has taken all necessary internal actions to authorize the request. (2) The information required by subparagraphs (1)(c), (1)(d)(iii) and (1)(f ) shall be supported by documentation. (3) ‘Date of consent’ means the date on which the parties to the dispute consented in writing to submit it to the Centre; if both parties did not act on the same day, it means the date on which the second party acted.33

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The request does not have to be formulated in any particular manner but must contain all the information listed in Institution Rule 2. A complete request is in the claimant’s interest since this will expedite the procedure (see paras. 36–38 infra). The SecretaryGeneral needs all the information before he or she can exercise the screening power in accordance with Art. 36(3). Since the Institution Rules are not, generally, subject to modification by the parties (see Art. 44, para. 6), the required information cannot be waived by the parties even in the case of a joint request (see para. 10 supra). The information required by Institution Rule 2 echoes the jurisdictional requirements of Art. 25.34 These are dealt with in some detail in the Commentary on that Article. Under Institution Rule 2(1)(a) the request must designate as parties a Contracting State (see Art. 25, paras. 497–522) and a national of another Contracting State35 (see Art. 25, paras. 572–615). Under Institution Rule 2(1)(b), if one of the parties is a constituent 33 See also Arbitration (Additional Facility) Rules, Art. 3. 34 See also Alejandro A Escobar, ‘Three Aspects of ICSID’s Administration of Arbitration Proceedings’ (1997) 14(2) News from ICSID 4, 5–6. 35 In SPP v Egypt, an additional Claimant joined the proceedings after the registration of the Request for Arbitration. This intervention was agreed to by the Respondent, and the Tribunal accepted the informal notification of the intervention. But the Dissenting Opinion criticized this procedure as being at odds with the formal requirement of Institution Rule 2. See SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 14 and Dissenting Opinion El Mahdi (14 April 1988) Part II, para 3; ibid, Award (20 May 1992) paras 145, 146 and Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 318.

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subdivision or agency of a Contracting State, it must have been designated to the Centre (see Art. 25, paras. 523–571). Under Institution Rule 2(1)(c), the instrument recording consent (see Art. 25, paras. 759–877), as well as the date of consent (see Art. 25, paras. 878–893), must be indicated. If one of the parties is a constituent subdivision or agency of a Contracting State, data on the approval of the consent is required, unless the State concerned has indicated that no such approval is required (see Art. 25, paras. 1446–1471). Institution Rule 2(1)(d) requires that all the relevant information concerning the investor’s nationality be included in order to indicate that the requirements of Art. 25(2) are fulfilled (see Art. 25, paras. 1111–1261). In the case of a juridical person incorporated in the host State, this would include the agreement of the parties that the juridical person should be treated as a national of another Contracting State in accordance with Art. 25(2)(b) (see Art. 25, paras. 1262–1445). Institution Rule 2(1)(e) requires information on the issues in dispute to show the existence between the parties of a legal dispute arising directly out of an investment (see Art. 25, paras. 68–496). The information concerning the issue in dispute given in the request does not affect the right to submit incidental or additional claims under Art. 46 at a later stage. Institution Rule 2(1)(f ) requires a statement to the effect that all necessary internal actions to authorize the request have been taken, if the claimant is a juridical person (see Art. 44, para. 46). Art. 36(2) requires that ‘information’ on these points be contained in the request. Institution Rule 2 says that the request must ‘designate,’ ‘state,’ ‘indicate,’ and ‘contain information.’ Therefore, no proof is required at this stage. On most points a mere assertion in the request will suffice and the information thus given may be developed at a later stage.36 But on certain points of the request, Institution Rule 2(2) requires that they be supported by documentation. These are (i) the instrument recording consent, (ii) any agreement by the parties to treat a juridical person as a national of another Contracting State in accordance with Art. 25(2)(b), and (iii) internal authorization of a juridical person to commence proceedings. Documentation of authorization for the request in the case of juridical persons is meant to forestall a later dispute between the parties about the company’s internal procedure leading to the institution of the proceedings.37 Documentation under Institution Rule 2(2) must conform to the formalities for supporting documents set out in Administrative and Financial Regulation 30 (see para. 16 supra). The information concerning the instrument of consent must be supported by documentation. Institution Rule 2(2) also requires documentation on the approval of consent in case of a constituent subdivision or agency. The documentation may consist of the copy of a contractual clause between the parties providing for ICSID arbitration (see Art. 25, paras. 767–776). In the case of a joint request (see para. 10 supra), consent may be recorded in the request. If consent is based on legislation of the host State, or on a treaty between the host State and the investor’s home State, a copy of the relevant legislative or treaty provision should be included. If consent is based on a treaty, 36 CMS v Argentina, Award (12 May 2005) paras 106, 115. See also Note D to Institution Rule 2 and Note B to Institution Rule 6 of 1968, (1993) 1 ICSID Reports 53–54, 58. 37 See Vacuum Salt v Ghana, Award (16 February 1994) para 4; Scimitar v Bangladesh, Award (4 May 1994) paras 6, 13, 15, 21, 25, 28, 29; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 72, 175–183; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 22–23, 45–49, 98–104; UAB v Latvia, Award (22 December 2017) paras 503–517.

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evidence of its entry into force is required. In addition, documentation may be required to demonstrate that the case is within the scope of the consent in the legislation or treaty (see Art. 25, paras. 948–980). If consent is subject to procedural conditions, such as a mandatory waiting period for amicable settlement, documentation indicating compliance may be required (see Art. 25, paras. 981–998).38 If the investor has accepted the offer of arbitration in writing prior to the request for arbitration, a copy of that document should be supplied. Otherwise, the request for arbitration may express the investor’s consent, thereby perfecting the agreement between the parties39 (see Art. 25, paras. 814–824, 850–862). During the Convention’s drafting, there was some debate on whether a claimant should be allowed to institute proceedings even without prior consent. The respondent’s consent might then be indicated by not contesting jurisdiction (History, Vol. I, p. 112) (see also Art. 25, para. 901). The idea, called forum prorogatum, was based on a practice of the International Court of Justice whereby failure to contest jurisdiction by the respondent State is deemed to be consent to the Court’s jurisdiction.40 The idea was dropped since it might have led to the embarrassment of a State that did not wish to give its consent, and since it would be undesirable to set the arbitration machinery in motion where it was unlikely that consent would be given41 (History, Vol. II, pp. 402, 403, 470, 499, 509, 540, 566, 711). Art. 36(2) and Institution Rule 2 leave no doubt that consent must exist when the request is lodged (see Art. 25, paras. 894–900, 902). But consent may be confirmed and extended during the proceedings before the tribunal (see Art. 25, paras. 903–920). The ‘date of consent’ is defined in Institution Rule 2(3). It is relevant for a number of questions under the Convention, in particular the irrevocability of consent, the determination of the investor’s nationality, the exclusion of other remedies, the effect of a denunciation of the Convention, as well as the version of the Conciliation or Arbitration Rules that will be applied (see Art. 25, paras. 890–893).42 If consent is based on legislation or on a treaty, the date of consent is the time at which the investor accepts the offer contained therein. Unless the offer has been accepted separately in writing, the date of consent will be the date of the request for arbitration (see Art. 25, paras. 880–883).

2. Optional Information 33

The requesting party is not restricted to the information required by Institution Rule 2. The Institution Rules provide to this effect: 38 Tokios Tokelės v Ukraine, Award (26 July 2007) para 18. See also Parra, ‘The Institution’ (n 28) 13. 39 See also Note F to Institution Rule 2 of 1968, (1993) 1 ICSID Reports 54. 40 See Shabtai Rosenne, The World Court (5th edn, Martinus Nijhoff 1995) 98. Under the Rules of the International Court of Justice as revised in 1978 (Art. 38(5)), an application not based on prior consent of the respondent State will not be entered in the Court’s General List nor will any action be taken, unless and until the respondent State consents to the Court’s jurisdiction. 41 See Aron Broches, ‘The Convention on the Settlement of Investment Disputes, Some Observations on Jurisdiction’ (1966) 5 Columbia JTL 263, 272–277; Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 366–367; Arshad Masood, ‘Jurisdiction of International Centre for Settlement of Investment Disputes’ (1972) 14 J Indian Law Institute 119, 123–124; Parra, ‘The Screening Power’ (n 3) 11. 42 See also Note M to Institution Rule 2 of 1968, (1993) 1 ICSID Reports 55.

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Rule 3 Optional Information in the Request The request may in addition set forth any provisions agreed by the parties regarding the number of conciliators or arbitrators and the method of their appointment, as well as any other provisions agreed concerning the settlement of the dispute.

Under Art. 37(1), the tribunal shall be constituted as soon as possible after the registration of the request. In order to expedite the proceedings, it is wise to indicate already in the request any agreement that is relevant to the tribunal’s constitution.43 Other procedural agreements may also be communicated in the request. These may concern the place and language of proceedings or any modification of the Arbitration Rules that the parties may have agreed upon (see Art. 44, paras. 15–36). In addition, the request may contain a designation of counsel, agents, or advocates and may indicate the extent of their authority.44 If the request is signed by counsel, it should be accompanied by the appropriate authorization signed by the party. The request is also an opportunity for the claimant to present its case on the merits. The issues in dispute may be described in more or less detail. Since the request is likely to be the first document that the arbitrators will read, it is advisable that it contain a persuasive, coherent and complete statement of the facts underlying the dispute.45

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3. Consultation, Supplementation, and Correction The fact that the Convention and the Institution Rules require a formal request does not rule out informal communication between the claimant and the Centre. During the Convention’s drafting, the possibility to supplement an incomplete or inadequate request upon the advice of the Secretary-General was already foreseen (History, Vol. II, p. 774). Historically, advance consultation with the Centre prior to lodging the request for arbitration was possible to clarify points that need to be addressed, and spare the claimant the cost and embarrassment of a request that is subsequently rejected.46 This practice has since been discontinued by ICSID. If the request does not conform to the requirements of the Convention or the Institution Rules, or if there is a need for additional information, the SecretaryGeneral will consult with the requesting party.47 The Secretary-General will give the party concerned an opportunity to supplement or correct the request before a decision

43 See also Note B to Institution Rule 3 of 1968, (1993) 1 ICSID Reports 56. 44 See Notes C and D to Institution Rule 3 of 1968, (1993) 1 ICSID Reports 56. 45 See John M Townsend, ‘The Initiation of Arbitration Proceedings: “My Story Had Been Longer”’ (1998) 13 ICSID Rev 21. 46 Brower (n 3) 17; Parra, ‘The Screening Power’ (n 3) 13. 47 See eg Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 2; Olguín v Paraguay, Award (26 July 2001) paras 5, 7; MTD v Chile, Award (25 May 2004) para 3; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 4; Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 2; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 100, 101; Telenor v Hungary, Award (13 September 2006) paras 3, 4; Tokios Tokelės v Ukraine, Award (26 July 2007) paras 18, 19; Parkerings v Lithuania, Award (11 September 2007) para 13; Sempra v Argentina, Award (28 September 2007) para 7; Anderson v Costa Rica, Award (19 May 2010) paras 2–3; Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 274.

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on its registration is taken.48 Such consultation may result in the request’s withdrawal (see paras. 65–71 infra).

4. Procedural Nature of Institution Rules 39

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Institution Rule 2 is of a procedural nature. It lists the information that must be submitted to the Secretary-General to enable him or her to make a decision on the request’s registration. Nevertheless, in some cases, tribunals have treated Institution Rule 2 as if it contained jurisdictional requirements in addition to Art. 25. In Cable TV v St Kitts and Nevis,49 the Tribunal, after finding that there was no jurisdiction, proceeded to examine the same jurisdictional issues from the perspective of Institution Rule 2.50 It held that the request had not complied with the Institution Rules in several respects and that this was fatal for the claim.51 Similarly, the Tribunal in Impregilo v Pakistan entertained a jurisdictional objection based on the alleged non-compliance of the request with Institution Rule 2(1)(f ). It examined whether Impregilo’s internal authorization for the commencement of the arbitration proceedings satisfied the requirements of Institution Rule 2(1) and 2(2). The Tribunal found that the authorization supplied by the Claimant was sufficient and dismissed the objection to jurisdiction.52 It would appear that reliance on Institution Rule 2 to determine jurisdiction is inappropriate. Institution Rule 2 does not set out jurisdictional requirements in addition to Art. 25. It is merely a rule of procedure. It lists the information and documentation that must be contained in the request. Its purpose is to enable the Secretary-General to decide whether a request should be registered in accordance with Art. 36(3). Once a request has been registered, the tribunal must ascertain the existence of all jurisdictional requirements on the basis of Art. 25 in the light of all available evidence. Omissions, errors, and other deficiencies in the request for arbitration are not an independent basis for the tribunal to decline jurisdiction. This position has since been endorsed by tribunals. In the Resubmitted Case in Vivendi v Argentina, the Respondent invoked Institution Rule 2(1)(f ) to argue that not all necessary internal action had been taken to authorize the request. The Tribunal, relying on the First Edition of this Commentary, found that objections to jurisdiction must be premised on a failure to satisfy an element of Art. 25 of the Convention. The corporate authorization requirement is not a jurisdictional requirement, but merely a rule of procedure. Moreover, when faced with any shortcomings in a request under Art. 36(2) and Institution Rule 2, the Secretary-General will not necessarily decline to register the request. He or she may consult with the claimant with a view to the request’s supplementation or correction. Once the request is registered, deficiencies in the request can no longer be raised and cannot operate as a bar to the Tribunal’s jurisdiction.53

48 See Georges R Delaume, ‘ICSID Arbitration Proceedings: Practical Aspects’ (1985) 5 Pace LR 563, 569; Parra, ‘The Screening Power’ (n 3) 12; Shihata and Parra (n 7) 308–309. 49 Cable TV v St Kitts and Nevis, Award (13 January 1997). 50 ibid paras 5.01–5.24. 51 ibid paras 5.06–5.10, 5.24. 52 Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 72, 175–183. 53 Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 22, 23, 45–49, 98–104. See also Metalpar v Argentina, Award (6 June 2008) para 11.

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Other tribunals have decided similarly.54 The Tribunal in UAB v Latvia said:

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Article 36(2) of the ICSID Convention (and Institution Rule 2) deal with the registration procedure, not with the jurisdiction of a tribunal constituted under the ICSID Convention. Jurisdiction is dealt with in Article 25 of the ICSID Convention. Insofar as the Respondent’s ‘preliminary objection’ is based on Article 36(2) of the ICSID Convention and Institution Rule 2, such objection must therefore fail.55

C. ‘(3) The Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register.’

1. Purpose of Screening The Preliminary Draft to the Convention did not provide for the screening of requests for arbitration. Several delegates expressed the opinion that before setting the Centre’s machinery into motion, the requirements for jurisdiction, especially consent, should be established by prima facie evidence (History, Vol. II, pp. 399, 408, 409, 451, 568). This idea was reflected in the First Draft (History, Vol. I, p. 174; Vol. II, pp. 653, 689, 769). Various officers and bodies were suggested for the function of verifying jurisdiction, until it became clear that it was to be exercised by the Secretary-General (History, Vol. I, p. 174; Vol. II, pp. 399, 409, 451, 653, 689, 771–775, 787, 861). The purpose was to deal with unfounded proceedings at an early stage (ibid., p. 772) (see also para. 24 supra). The Report of the Executive Directors on the Convention explains the SecretaryGeneral’s screening power in the following terms:

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20. . . . the Secretary-General is given the power to refuse registration of a request for conciliation proceedings or arbitration proceedings, and thereby to prevent the institution of such proceedings, if on the basis of the information furnished by the applicant he finds that the dispute is manifestly outside the jurisdiction of the Centre (Article 28(3) and 36(3)). The Secretary-General is given this limited power to ‘screen’ requests for conciliation or arbitration proceedings with a view to avoiding the embarrassment to a party (particularly a State) which might result from the institution of proceedings against it in a dispute which it had not consented to submit to the Centre, as well as the possibility that the machinery of the Centre would be set in motion in cases which for other reasons were obviously outside the jurisdiction of the Centre e.g., because either the applicant or the other party was not eligible to be a party in proceedings under the Convention.56

The constitution of a tribunal involves time, effort, and expense. The SecretaryGeneral’s screening power is designed to avoid a situation where a tribunal, once established, would almost certainly find itself without competence. In addition, the

54 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 279–280, 297–301; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) para 317. 55 UAB v Latvia, Award (22 December 2017) para 506. 56 (1993) 1 ICSID Reports 23, 27 (emphasis in the original).

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procedure should not be set in motion merely to pressure or embarrass a party, especially a host State, if it had not given its consent to jurisdiction.57 The Secretary-General performs a similar function with respect to the registration of requests for arbitration under the Additional Facility. He or she will only register the request after being satisfied that the request conforms in form and substance to the requirements.58 These requirements are similar to those under the Convention, but add the precondition that the agreement providing for Additional Facility arbitration must have been approved by the Secretary-General59 (see Art. 25, paras. 485–486).60

2. Basis for Decision on Registration 49

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The First Draft still provided that the Secretary-General would have to find the request to be in conformity with the Convention (History, Vol. I, p. 174). In the subsequent discussions this wording was seen as imposing too strict a requirement. It was pointed out that a refusal to register should only take place where there was not the slightest doubt as to the request’s impropriety. The nature of the screening process was expressed through the adoption of negative wording making the Secretary-General’s screening power the exception to the basic obligation to register (History, Vol. II, pp. 771, 772, 774, 775). The Institution Rules express the Secretary-General’s power to screen requests in the following terms: Rule 6 Registration of the Request (1) The Secretary-General shall, subject to Rule 5(1)(b),61 as soon as possible, either: (a) register the request in the Conciliation or the Arbitration Register and on the same day notify the parties of the registration; or (b) if he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre, notify the parties of his refusal to register the request and of the reasons therefor. (2) A proceeding under the Convention shall be deemed to have been instituted on the date of the registration of the request.

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The Secretary-General’s decision to register, or to refuse registration, is made primarily on the basis of the information contained in the request, and is limited to the issue of the jurisdiction of the Centre.62 But the respondent is given the opportunity

57 Broches, ‘Some Observations’ (n 41) 273; Broches (n 25) 659–660; Georges R Delaume, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 818; Escobar (n 34) 5; Parra, ‘The Screening Power’ (n 3) 10. 58 Arbitration (Additional Facility) Rules, Art. 4. See Azinian v Mexico (AF), Award (1 November 1999) paras 38, 39. 59 Arbitration (Additional Facility) Rules, Art. 3(1)(c) and Additional Facility Rules, Art. 4. 60 For a comparative analysis including other arbitration institutions, see Parra, ‘Provisions’ (n 3) 303 ff. 61 Institution Rule 5(1)(b) requires the prior payment of the lodging fee (see para 17 supra). 62 Broches, ‘Some Observations’ (n 41) 274; Parra, ‘The Screening Power’ (n 3) 12; Parra, ‘Provisions’ (n 3) 305; Paul C Szasz, ‘A Practical Guide to the Convention on Settlement of Investment Disputes’ (1968) 1 Cornell ILJ 1, 11; Parra, ‘The Institution’ (n 28) 12; Parra, The History (n 28) 144; Sergio Puig and Chester Brown, ‘The Secretary-General’s Power to Refuse to Register a Request for Arbitration under the ICSID Convention’ (2012) 27(1) ICSID Rev 172.

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to be heard on the question of whether the request should be registered (see para. 21 supra).63 If the respondent does not avail itself of that opportunity, it retains the right to contest jurisdiction before the tribunal (see Art. 41, paras. 46–63). While the Centre sometimes receives formal or informal comments aimed at preventing the registration of a request, either by the potential respondent, or by civil society groups, it has never refused to register a request on the basis of an objection from a respondent or a third party.64 The Secretary-General will assume that the information supplied by the requesting party is true unless there are indications to the contrary. The request must contain information and documentation on certain points (see paras. 23–32 supra). But the requesting party is not required to establish or prove that the dispute is within the Centre’s jurisdiction.65 The information contained in the request may well turn out to be incorrect in the light of arguments before the tribunal.66 The request must be drawn up in one of the Centre’s three official languages (see paras. 12, 15 supra). Documentation filed in support of a request that is not in one of the Centre’s official languages must be accompanied by a translation.67 For the purpose of deciding whether to register the request, the Secretary-General will look at the translation in one of the official languages. If a translation does not correspond to the original, the claimant will be asked to comment. If, in the light of this comment, the original clearly does not form a basis for ICSID jurisdiction, registration will be refused. In SPP v Egypt, the Tribunal noted that the Secretary-General had registered the request despite the fact that he had reached the conclusion that the English translation of Art. 8 of Egyptian Law No. 43 of 1974, which was put forward as the basis for jurisdiction, did not adequately reflect the Arabic text.68 The Tribunal undertook a detailed analysis of the Arabic original of this text on the basis of which it found that it had jurisdiction69 (see Art. 25, paras. 790–792). The Secretary-General may refuse to register a request only if it is manifestly outside the Centre’s jurisdiction.70 Manifest means easily recognizable (see also Art. 52, paras. 149, 152, 153, 203). This would be the case, if neither party is a Contracting State, or a duly designated subdivision or agency of a Contracting State, or if neither party is a national of a Contracting State. It would also be the case, if there is no showing of a written consent to jurisdiction.71 Additionally, there must be a legal dispute, pertaining directly to an investment.72 The term ‘investment’ is broadly

63 See eg Deutsche Bank v Sri Lanka, Award (31 October 2012) para 66. 64 Martina Polasek, ‘The Threshold for Registration of a Request for Arbitration under the ICSID Convention’ (2011) 5(2) Disp Res Int’l 181. See also Ana Palacio, ‘Recent Institutional Developments’ (2007) 24(2) News from ICSID 20. 65 Parra, ‘The Screening Power’ (n 3) 12; Brower (n 3) 16–17. 66 See eg Vacuum Salt v Ghana, Award (16 February 1994) para 45, fn 36. 67 Administrative and Financial Regulation 30(3). 68 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 3; ibid, Decision on Jurisdiction II (14 April 1988) para 3; ibid, Award (20 May 1992) para 3. 69 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 74–82. 70 Broches, ‘Some Observations’ (n 41) 274. 71 See Note C to Institution Rule 6 of 1968, (1993) 1 ICSID Reports 58–59. 72 Puig and Brown (n 62) 183.

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interpreted by the Secretary-General for the purposes of registration.73 If the SecretaryGeneral has doubts in the matter, he or she must register the request.74 Formal decisions to refuse registration of requests are not published. But instances of such decisions appear to be relatively rare.75 Previously, this was due, in large part, to advance consultations with the Centre, and to the possibility to supplement or withdraw a request after it has been submitted (see paras. 36–38 supra). Cases in which requests were not registered include lack of consent to ICSID, the absence of a legal dispute, non-ratification of the Convention by the investor’s home State, and the absence of an investment. If the information and documentation required by Institution Rule 2 is before the Secretary-General, and the lodging fee has been paid, he or she is under an obligation to register the request.76 There is no discretion beyond the criterion described in Art. 36(3). Registration may take place within a few days of the arrival of the request at the Centre.77 But in cases involving complex issues, registration may take several months.78 Registration cannot be postponed to satisfy cooling-off conditions under an investment treaty, or until a particular claim is ripe.79

3. Finality of Decision on Registration 58

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During the Convention’s drafting, there was some discussion on whether the Secretary-General’s decision to refuse registration of a request should be subject to review. Suggestions to this effect were made, but Mr. Broches expressed his unequivocal opposition to this idea (History, Vol. II, pp. 770, 772). A series of votes led to the rejection of all proposals to introduce a review of the Secretary-General’s decision on registration (ibid., pp. 773–774). Therefore, a decision by the Secretary-General not to register a request for arbitration is non-reviewable. It is not subject to any form of recourse. No further action will be taken upon the request in that case.80 But a party may at any time submit a new request based on the same claim.81 A new request would have to follow the procedure of Art. 36 and the Institution Rules, including the payment of the lodging fee. A decision by the Secretary-General to register a request for arbitration does not in any way bind the tribunal in its determination of its own competence or of the Centre’s jurisdiction in accordance with Art. 41.82 It should not be understood as a decision on the jurisdiction of a future ICSID tribunal or conciliation commission.83 A respondent remains free to raise jurisdictional objections and a tribunal remains free to decline 73 Polasek (n 64) 188. See also Shihata and Parra (n 7) 308. 74 See also Broches, ‘Some Observations’ (n 41) 276; Broches, ‘The Convention’ (n 41) 368; Brower (n 3) 19–20; Delaume (n 57) 818. 75 See eg ‘Disputes before the Centre’ (1985) 2(2) News from ICSID 2, 3; ICSID, ‘1985 Annual Report’ (1985) 4, 6; Shihata and Parra (n 7) 307–308; Parra, The History (n 28) 144–145, 235; Antonio R Parra, ICSID – An Introduction to the Convention and Centre (OUP 2020) 50–52. 76 Broches (n 25) 660. 77 See eg CSOB v Slovakia, Award (29 December 2004) para 1. The Request was filed on 18 April 1997 and was registered on 25 April 1997. 78 See eg Telenor v Hungary, Award (13 September 2006) paras 3, 4. The Request was filed on 16 December 2003 and was registered on 2 August 2004. See also Parra, The History (n 28) 234–235. 79 Polasek (n 64) 185. 80 Parra, ‘The Screening Power’ (n 3) 12. 81 See Accession Mezzanine v Hungary, Decision on Jurisdiction (8 August 2013) paras 7–8. 82 Parra, ‘The Institution’ (n 28) 12. 83 Puig and Brown (n 62) 175.

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jurisdiction, even if the Secretary-General has found that the dispute is not manifestly outside the Centre’s jurisdiction. This follows from the explicit provision in Art. 41(1) that the Tribunal shall be the judge of its own competence (see Art. 41, paras. 17–24).84 In fact, Institution Rule 7(e) (see para. 62 infra) requires the Secretary-General, when sending the notice of registration, to remind the parties that the registration of the request is without prejudice to the powers and functions of the conciliation commission or arbitral tribunal in regard to jurisdiction, competence, and the merits.

4. Notification and Consequences of Registration Registration consists of the entry of the request into the Arbitration Register kept by the Secretary-General in accordance with Administrative and Financial Regulation 23. Institution Rule 6(1)(a) requires that the Secretary-General notify the parties of the registration on the same day (see para. 50 supra). The Institution Rules prescribe the particulars of a notice of registration:

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Rule 7 Notice of Registration The notice of registration of a request shall: (a) record that the request is registered and indicate the date of the registration and of the dispatch of that notice; (b) notify each party that all communications and notices in connection with the proceeding will be sent to the address stated in the request, unless another address is indicated to the Centre; (c) unless such information has already been provided, invite the parties to communicate to the Secretary-General any provisions agreed by them regarding the number and the method of appointment of the conciliators or arbitrators; (d) invite the parties to proceed, as soon as possible, to constitute a Conciliation Commission in accordance with Articles 29 to 31 of the Convention, or an Arbitral Tribunal in accordance with Articles 37 to 40; (e) remind the parties that the registration of the request is without prejudice to the powers and functions of the Conciliation Commission or Arbitral Tribunal in regard to jurisdiction, competence and the merits; and (f ) be accompanied by a list of the members of the Panel of Conciliators or of Arbitrators of the Centre.85

The registration triggers a number of consequences. Arbitration proceedings are formally instituted from the date of registration in accordance with Institution Rule 6(2) (see para. 50 supra). The tribunal is to be constituted ‘as soon as possible’ after that date under Art. 37(1). If the tribunal is not constituted within 90 days from that date, the Chairman shall complete its constitution in accordance with Art. 38 at the request of either party. In addition, the date of registration is relevant under Art. 25(2)(a) in

84 Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009) paras 5, 8–11. 85 See also the Notes to Institution Rule 7 of 1968, (1993) 1 ICSID Reports 59–60. Similarly, Arbitration (Additional Facility) Rules, Arts. 4 and 5, providing for a notice of registration to be sent to the parties. See eg Azinian v Mexico (AF), Award (1 November 1999) para 39.

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connection with the nationality of a natural person party to the dispute (see Art. 25, paras. 1161–1170). Registration of the request provides a basis for provisional measures under Art. 47. Such measures may be taken by the tribunal while the question of jurisdiction is still under dispute (see Art. 47, paras. 62–75).

5. Withdrawal of Request 65

The withdrawal of a request for arbitration is possible only before its registration or the formal refusal of registration. The Institution Rules provide to this effect: Rule 8 Withdrawal of the Request The requesting party may, by written notice to the Secretary-General, withdraw the request before it has been registered. The Secretary-General shall promptly notify the other party, unless, pursuant to Rule 5(1)(b), the request had not been transmitted to it.86

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The withdrawal of a request may be based on a settlement between the parties. The transmission of a copy of the request to the other party gives the parties an opportunity to reach such a settlement (see para. 21 supra). The withdrawal may also be based on the requesting party’s realization that registration is unlikely or impossible in the light of informal consultations with the Centre (see paras. 36–38 supra). For instance, in Tokios Tokelės v Ukraine, the Request for Arbitration was submitted in the name of Tokios Tokelės, registered in Lithuania, and its wholly owned subsidiary Taki Spravy, registered in Ukraine. Two months later, ICSID notified the requesting parties that a mandatory waiting period for the purpose of reaching a settlement had not been complied with. Thereupon the requesting parties informed ICSID that they withdrew the Request for Arbitration. The Request was resubmitted a few weeks later.87 Thereupon the Centre alerted the requesting parties to the fact that there was no agreement under Art. 25(2)(b) to treat the locally incorporated company as a national of another Contracting State. In response, Tokios Tokelės informed the Centre that Taki Spravy would be removed as a requesting party.88 The withdrawal of the request before its registration does not require the assent of the other party. But if the request was made jointly by both parties it can only be withdrawn by joint action of the parties.89 The lodging fee (see para. 17 supra) will not be refunded in case of a withdrawal. Withdrawal of the request does not constitute withdrawal of a pre-existing consent.90 If the request contains the investor’s acceptance of an offer of consent made by the host State in its legislation or in a treaty with the investor’s home State (see para. 30 supra), the situation is less clear. Art. 25(1) provides that a consent once given may not be withdrawn unilaterally (see Art. 25, paras. 1057–1068). Therefore, it would appear that even after the withdrawal of a request that has been transmitted to the respondent, the

86 87 88 89 90

The Arbitration (Additional Facility) Rules do not contain a comparable provision. Tokios Tokelės v Ukraine, Award (26 July 2007) paras 16, 18. ibid para 19. See Note B to Institution Rule 8 of 1968, (1993) 1 ICSID Reports 60. See Note C to Institution Rule 8 of 1968, (1993) 1 ICSID Reports 60.

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investor’s consent remains effective. This means that the host State could thereafter submit a request for arbitration based on the investor’s acceptance of the offer of consent.91 It also means that the host State can no longer withdraw its offer of consent. But consent to jurisdiction will exist only to the extent of the investor’s acceptance which may be quite narrowly circumscribed in the request. Once the request is registered, its unilateral withdrawal becomes impossible. The proceedings may thereafter be discontinued at one party’s request with the other party’s assent in accordance with Arbitration Rule 44 (see Art. 45, para. 64). Alternatively, the parties may submit a joint request of discontinuance on the basis of a settlement in accordance with Arbitration Rule 43 (see Art. 48, paras. 88–107). Failure of both parties to act for more than six months will lead to a discontinuance in accordance with Arbitration Rule 45 (see Art. 45, para. 65).

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6. Modification of Pleadings after Registration In a number of cases, tribunals had to decide to what extent a claimant was entitled to supplement, develop, or change a position taken in the request for arbitration after its registration.92 Art. 36(2) states that the request for arbitration is to contain information concerning the issues in dispute, the identity of the parties, and the consent to arbitration. In SGS v Philippines, the Tribunal had to decide whether the issue in dispute was limited to claims under a treaty, as originally stated in the request for arbitration, or was capable of being extended to contract claims. The Tribunal distinguished between the addition of new claims and the presentation of additional facts. It said:

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in international arbitration a Claimant must state its claim in its initial application, and wholly new claims cannot thereafter be added during the pleadings. On the other hand, a Claimant is not limited to the facts set out in its Request for Arbitration: it may assert and prove additional facts, including those occurring at a subsequent time up to the closure of the proceedings, provided these fall within the scope of its original claim.93

An imprecise designation of applicable rules of law can be remedied at a later stage. In Cambodia Power v Cambodia, the Tribunal said: At the stage of the Request for Arbitration, the Claimant is not required to set out its precise case by identifying the specific rules of customary international law upon which it sought to rely. This can be for a later stage when Parties exchange pleadings or memorials on the merits.94

91 See Note E to Institution Rule 8 of 1968, (1993) 1 ICSID Reports 61. 92 For non-ICSID cases dealing with similar issues, see Grand River v United States (UNCITRAL), Decision on Jurisdiction (20 July 2006) paras 88–102; AMTO v Ukraine (SCC), Final Award (26 March 2008) paras 26(g), 57; National Grid v Argentina (UNCITRAL), Award (3 November 2008) paras 202–204; Quasar de Valores and others v Russia (SCC), Award on Preliminary Objections (20 March 2009) paras 70–72; Chemtura v Canada (UNCITRAL), Award (2 August 2010) paras 99–105. 93 SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 157 (footnotes omitted). The Tribunal relied on the case law of the ICJ. See also the Additional Facility case ADF v United States, Award (9 January 2003) para 135. 94 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 328.

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The identity of the disputing parties was at issue in Tulip v Turkey. The corporate Claimant sought to assert claims in a representative capacity on behalf of an individual investor who had not been named in the request for arbitration. The Tribunal found that Art. 36 did not permit the prosecution of claims for a non-party.95 In Mamidoil v Albania, the request for arbitration invoked the Albania–Greece Bilateral Investment Treaty as the basis of consent to arbitration. In its memorial, the Claimant additionally relied on the ECT. The Tribunal noted that both parties took positions as to the propriety of the Respondent’s conduct also under the ECT. Therefore, it applied both the BIT and the ECT.96 Events occurring after the registration of the request for arbitration are covered by the request, provided they fall within the scope of the original claim. The Tribunal in Hochtief v Argentina said: The Tribunal considers it to be axiomatic that the scope of the claims that Respondent is called upon to answer is fixed by the terms of the Request for Arbitration and the Submissions set out in the Memorial. Subject to the possibility of the making of ancillary claims arising directly out of the subject-matter of the dispute, those instruments define the case that the Respondent has to answer . . . As long as the claims remain within the limits thus described, the facts that a tribunal may take into account in order to decide the claims are not confined to those facts that occurred prior to the date of the signature or registration of the Request for Arbitration and / or the Memorial.97

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The restriction to claims raised in the request for arbitration is put into perspective by Art. 46, which permits incidental or additional claims arising directly out of the subjectmatter of the dispute.

95 Tulip v Turkey, Award (10 March 2014) paras 209–231. 96 Mamidoil v Albania, Award (30 March 2015) paras 265–278. See also Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 231–234. 97 Hochtief v Argentina, Decision on Liability (29 December 2014) paras 183–184 (footnote omitted). See also CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 101–115; SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 157; Swisslion v North Macedonia, Award (6 July 2012) paras 133–138.

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Article 37 (1) The Arbitral Tribunal (hereinafter called the Tribunal) shall be constituted as soon as possible after registration of a request pursuant to Article 36. (2) (a) The Tribunal shall consist of a sole arbitrator or any uneven number of arbitrators appointed as the parties shall agree. (b) Where the parties do not agree upon the number of arbitrators and the method of their appointment, the Tribunal shall consist of three arbitrators, one arbitrator appointed by each party and the third, who shall be the president of the Tribunal, appointed by agreement of the parties.

OUTLINE Paragraphs I. INTRODUCTION 1–8 II. INTERPRETATION 9–58 A. ‘(1) The Arbitral Tribunal (hereinafter called the Tribunal) shall be constituted as soon as possible after registration of a request pursuant to Article 36.’ 9–22 1. Appointment 11–14 2. Acceptance and Replacement 15–22 B. ‘(2)(a) The Tribunal shall consist of a sole arbitrator or any uneven number of arbitrators . . .’ 23–27 C. ‘. . . appointed as the parties shall agree.’ 28–47 1. Prior Agreement 30–38 2. Ad hoc Agreement 39–47 D. ‘(b) Where the parties do not agree upon the number of arbitrators and the method of their appointment, the Tribunal shall consist of three arbitrators, one arbitrator appointed by each party and the third, who shall be the president of the Tribunal, appointed by agreement of the parties.’ 48–58

BIBLIOGRAPHY Kinnear, Meg, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1 ABA Section of International Law International Arbitration Committee Newsletter 35 Kostadinova, Milanka, ‘Aspects of Procedure for Institution of Proceedings and Establishment of Tribunals in Investment Arbitration’ in Katia Yannaca-Small (ed), Arbitration Under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) 114 Obadia, Eloïse and Nitschke, Frauke, ‘Institutional Arbitration and the Role of the Secretariat’ in Chiara Giorgetti (ed), Litigating International Investment Disputes: A Practitioner’s Guide (Brill 2014) 80

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I. INTRODUCTION 1

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Art. 37 is the first of four Articles in Section 2 of the Convention’s Chapter IV on ‘Arbitration.’ Section 2 bears the title ‘Constitution of the Tribunal.’ Art. 37 deals with some basic principles for the constitution of a tribunal and with the appointment of arbitrators by the parties. Art. 38 deals with the appointment of arbitrators in default of the parties. Art. 39 deals with the nationality requirements for arbitrators. Art. 40 deals with the appointment of arbitrators who are, or who are not, designated to the Panel of Arbitrators under Arts. 12–16. It also deals with the general qualities of arbitrators. Thus, with regard to the constitution of arbitral tribunals, the ICSID Convention endorses the principle of party autonomy, as reflected in Art. 37 of the Convention.1 While the appointment of arbitrators by the Chairman is the default rule under Art. 38, this provision also imposes the duty on the Chairman to consult the parties ‘as far as possible’ before appointing an arbitrator. The constitution of tribunals is governed by two principles. One is the principle of freedom of choice by the parties. The other is the principle of non-frustration. The parties are free to shape the size, composition, and method of appointment by agreement. There is only a limited number of mandatory rules in the Convention in this respect.2 These are: s Art. 37(2)(a) prescribing that the tribunal must consist of a sole arbitrator or an uneven number of arbitrators; s Art. 38 prescribing the Chairman’s default powers as an appointing authority; s Art. 39 prescribing that the majority of arbitrators must not be nationals or conationals of the parties. This rule does not apply if each arbitrator is appointed by agreement of the parties; and s Art. 40(2) providing that arbitrators appointed from outside the Panel of Arbitrators must possess the qualities required of persons on the Panel.3

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In addition, under Arbitration Rule 1(4), a person who previously acted as a conciliator or arbitrator in any proceeding to settle the dispute at issue in the arbitration cannot be appointed to the Tribunal. Since the Arbitration Rules are generally subject to modification by the parties (see Art. 44, paras. 14–36), Rule 1(4) may be waived by agreement of the parties (see Art. 40, para. 27). The Convention also deals with the problem of a party’s non-cooperation during the stage of the tribunal’s constitution. If the parties are unable or unwilling to constitute the tribunal, the task falls on the Chairman of the Administrative Council in accordance with Art. 38.4 This means that a party cannot block the proceedings by refusing to 1 See Pey Casado v Chile, Resubmitted Case: Decision on Annulment (8 January 2020) para 545. 2 See Chittharanjan F Amerasinghe, ‘How to Use the International Centre for Settlement of Investment Disputes by Reference to Its Model Clauses’ (1973) 13 Indian JIL 530, 545 ff; Georges R Delaume, ‘ICSID Arbitration’ in Julian DM Lew (ed), Contemporary Problems in International Arbitration (Springer 1987) 23, 32; Ibrahim FI Shihata, ‘Towards a Greater Depoliticization of Investment Disputes: The Roles of ICSID and MIGA’ (1986) 1 ICSID Rev 1, 8–9. 3 See also Note B to Arbitration Rule 1 of 1968, (1993) 1 ICSID Reports 63, 66. 4 See also Pierre Lalive, ‘Aspects procéduraux de l’arbitrage entre un Etat et un investisseur étranger dans la Convention du 18 mars 1965 pour le règlement des différends relatifs aux investissements entre Etats et ressortissants d’autres Etats’ in Centre de Recherche sur le Droit des Marchés et des Investissements internationaux de la Faculté de Droit et de Sciences Economiques de Dijon (ed), Investissements étrangers et arbitrage entre Etats et personnes privées: La Convention BIRD du 18 mars 1965 (Pedone 1969) 111,

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cooperate in the tribunal’s constitution.5 But the Chairman is more limited in his or her choice of arbitrators than the parties (see Art. 38, paras. 24, 28–31; Art. 40, paras. 9–13). Art. 56(3) of the Convention contains a safeguard against the unilateral withdrawal of an arbitrator appointed by one of the parties. The Report of the Executive Directors on the Convention summarizes the interplay of the two principles in the following terms:

6

35. Although the Convention leaves the parties a large measure of freedom as regards the constitution of Commissions and Tribunals, it assures that a lack of agreement between the parties on these matters or the unwillingness of a party to cooperate will not frustrate proceedings (Articles 29–30 and 37–38, respectively).6

Improper constitution of the tribunal is a ground for annulment of the resulting award under Art. 52(1)(a) (see Art. 52, paras. 123–147). The provisions controlling the constitution of tribunals are fairly complex and may lead to the inadvertent nonobservance of a rule. But the ICSID Secretariat monitors the constitution of tribunals.7 A party may challenge the appointment of an arbitrator by making a proposal for his or her disqualification under Art. 57. In order to forestall later challenges, tribunals typically state at their first session with the parties that they have been validly constituted and request the parties’ agreement in that regard.8 In its standard agenda, the Secretariat suggests that this always be done during first sessions of tribunals.9 Challenges of awards on the basis of improperly constituted tribunals are rare in practice. As of 31 December 2020, there are only fourteen instances where the issue has been raised. In twelve cases, the ad hoc committees rejected this ground of annulment; in one case, the committee did not deal with the issue at all; and in one case, it annulled the original award (see also Art. 14, paras. 14–16; Art. 52, paras. 125–147 and Art. 57, paras. 5, 8–13).10

5 6 7 8

9 10

112 ff; Elihu Lauterpacht, ‘The World Bank Convention on the Settlement of International Investment Disputes’ in Recueil d’études de droit international en hommage à Paul Guggenheim (Faculté de Droit de l’Université de Genève and Institut Universitaire de Hautes Etudes Internationales 1968) 642, 645 ff. For an illustration of the problem, see Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (second phase) (Advisory Opinion) [1950] ICJ Rep 221. (1993) 1 ICSID Reports 23, 30. Eloïse Obadia and Frauke Nitschke, ‘Institutional Arbitration and the Role of the Secretariat’ in Chiara Giorgetti (ed), Litigating International Investment Disputes (Brill 2014) 80, 84, 108 ff. See Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 663–664. See eg Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 8; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 6; Santa Elena v Costa Rica, Award (17 February 2000) para 8; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 48. For the modalities of the first session, including a reference to ICSID’s standard agenda, see ICSID, ‘First Session – ICSID Convention’ accessed 10 January 2021. See Vivendi v Argentina, Resubmitted Case: Decision on Annulment (10 August 2010); EDF v Argentina, Decision on Annulment (5 February 2016); Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Annulment (11 May 2010); Azurix v Argentina, Decision on Annulment (1 September 2009); Sempra v Argentina, Decision on Annulment (29 June 2010); Eiser v Spain, Decision on Annulment (11 June 2020); Suez and Vivendi v Argentina, Decision on Annulment (5 May 2017); von Pezold and others v Zimbabwe, Decision on Annulment (21 November 2018); OIEG v Venezuela, Decision on Annulment (6 December 2018); Suez and others v Argentina, Decision on Annulment (14 December 2018); RSM v St Lucia, Decision on Annulment (29 April 2019); Mobil v Argentina, Decision on Annulment (8 May 2019); Pey Casado v Chile, Resubmitted Case: Decision on Annulment (8 January 2020); Carnegie Minerals v The Gambia, Decision on Annulment (7 July 2020).

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II. INTERPRETATION A. ‘(1) The Arbitral Tribunal (hereinafter called the Tribunal) shall be constituted as soon as possible after registration of a request pursuant to Article 36.’ 9

Art. 37(1) sets out an obligation to constitute the tribunal as soon as possible. The Arbitration Rules restate this obligation in the following terms: Rule 1 General Obligations (1) Upon notification of the registration of the request for arbitration, the parties shall, with all possible dispatch, proceed to constitute a Tribunal, with due regard to Section 2 of Chapter IV of the Convention.11

10

The process of constituting the tribunal is completed upon the acceptance of their appointments by all arbitrators. The Arbitration Rules provide to this effect: Rule 6 Constitution of the Tribunal (1) The Tribunal shall be deemed to be constituted and the proceeding to have begun on the date the Secretary-General notifies the parties that all the arbitrators have accepted their appointment.12

1. Appointment 11

The parties may have reached an agreement concerning the number of arbitrators and the method for their appointment. If such an agreement exists at the time of the request for arbitration, it is advisable, in the interest of expediting the proceedings, to include information concerning that agreement in the request itself (see Art. 36, paras. 33, 34). In case that information has not been so included, Arbitration Rule 1 provides as follows: (2) Unless such information is provided in the request, the parties shall communicate to the Secretary-General as soon as possible any provisions agreed by them regarding the number of arbitrators and the method of their appointment.13

12

13

An agreement between the parties concerning the constitution of the tribunal may be contained in a clause in the instrument providing for consent (see paras. 30–38 infra) or in an ad hoc compromis between the parties (see paras. 39–47 infra).14 Theoretically, 90 days after the registration of the request, the Chairman could appoint any arbitrators that the parties have failed to appoint in accordance with

11 12 13 14

See also Milanka Kostadinova, ‘Aspects of Procedure for Institution of Proceedings and Establishment of Tribunals in Investment Arbitration’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements (2nd edn, OUP 2018) 114, 128–129. See also ICSID, ‘Updated Background Paper on Annulment for the Administrative Council of ICSID’ (2016) paras 77–80 accessed 10 January 2021. See also Arbitration (Additional Facility) Rules (2006) Art. 6(2). See also ibid Art. 13(1). See also Note F to Arbitration Rule 2 of 1968, (1993) 1 ICSID Reports 67. See Note A to Arbitration Rule 2 of 1968, (1993) 1 ICSID Reports 66.

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Art. 38. But the parties may extend this period by agreement. Also, the Chairman will act only if requested by one of the parties. A study conducted by ICSID on sixty-three cases in the period from 1 January 2015 to 30 June 2017 in the context of the revision of the Arbitration Rules shows that the actual time spent for the constitution of tribunals varies depending on whether parties agree on a method to appoint the tribunal or whether a default methodology applies.15 The average length for the constitution of a tribunal where the parties agreed on a method was 222 days, whereas the average was 294 days when a default method applied. The average duration of tribunal constitutions for all sixty-three cases examined by the Secretariat was 258 days (whereas the average duration for tribunal constitutions in all ICSID original arbitrations concluded during the year 2017 was 234 days). In previous years, the data showed that the period for the constitution of tribunals oscillated between 90 days and over twelve months.16

14

2. Acceptance and Replacement The appointment of an arbitrator is subject to the acceptance by the individual concerned. The actual acceptance is sought by the Secretary-General. The Arbitration Rules foresee the following procedure for this purpose:

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Rule 5 Acceptance of Appointments (1) The party or parties concerned shall notify the Secretary-General of the appointment of each arbitrator and indicate the method of his appointment. (2) As soon as the Secretary-General has been informed by a party or the Chairman of the Administrative Council of the appointment of an arbitrator, he shall seek an acceptance from the appointee. (3) If an arbitrator fails to accept his appointment within 15 days, the SecretaryGeneral shall promptly notify the parties, and if appropriate the Chairman, and invite them to proceed to the appointment of another arbitrator in accordance with the method followed for the previous appointment.17

The duty to notify the Secretary-General is either incumbent upon the appointing party or upon both parties, in the case of appointment by agreement (see paras. 43, 57 infra). In turn, the Secretary-General has to inform the parties, and, if necessary, the Chairman or other appointing authority, of a refusal to accept. The Secretary-General

15 See ICSID, ‘Proposals for Amendment of the ICSID Rules – Working Paper’ vol 3 (August 2018) (Working Paper No 1) 902–903 accessed 10 January 2021. It should be noted that this study was limited to only those proceedings which resulted in an award during the time frame mentioned and thus did not include all ICSID arbitrations. Useful data concerning the time of constitution of ICSID tribunals up to 1 March 2018 can be found in José J Caicedo and Dany Khayat, ‘Article 37’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulations and Rules: A Practical Commentary (Edward Elgar 2019) 283, 287–292. 16 For details, see the Procedural Calender included in the Second Edition of this Commentary at pp. lxviii– lxxiv. 17 Arbitration (Additional Facility) Rules (2006) Art. 11 is substantially identical.

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will also inform the parties of the acceptance by the arbitrators of their appointments in accordance with Rule 6(1) (see para. 10 supra). There is no duty to accept an appointment. Even a person on the Panel of Arbitrators is under no obligation to accept a particular appointment. Before making appointments, the parties or any appointing authority will be wise to inquire informally whether a prospective arbitrator is willing to accept. Acceptance may depend on an agreement on the fees of arbitrators in accordance with Art. 60(2)18 (see Art. 60, paras. 14–17). No particular form is foreseen for the acceptance of the appointment, although acceptance is usually expressed in writing, by email, or in the form of a letter (typically sent under cover of an email). But the acceptance must be communicated to the Secretary-General and is accompanied by the formal declaration under Arbitration Rule 6(2) (see Art. 40, para. 19).19 If the person appointed fails to accept, the party, parties, or appointing authority that made the original appointment will be given the chance to select another arbitrator. The short time limit of 15 days in Arbitration Rule 5(3) is designed to expedite matters. An appointee who does not respond within 15 days will be deemed to have declined. This time limit can be extended by agreement of the parties. The time limit of Art. 38 may well elapse during this process. If it does, either party may request the Chairman to make any outstanding appointment. Although a party could in principle lose its right to appoint an arbitrator, in practice the Centre takes the view that a party can still make a valid appointment even after the invocation of Art. 38.20 Until the appointment process under Art. 38 is complete, it remains possible for a party to make an appointment (or for the parties to agree on the presiding arbitrator) in accordance with Art. 37(2)(a) or Art. 37(2)(b) (as applicable).21 The tribunal’s composition is fixed only after its constitution is completed in accordance with Arbitration Rule 6(1) (see para. 10 supra). In accordance with Art. 56(1), the tribunal’s composition shall remain unchanged after that date. Before that date, arbitrators may be replaced. The Arbitration Rules provide: Rule 7 Replacement of Arbitrators At any time before the Tribunal is constituted, each party may replace any arbitrator appointed by it and the parties may by common consent agree to replace any arbitrator. The procedure of such replacement shall be in accordance with Rules 1, 5 and 6.22

21

Therefore, an arbitrator who has accepted the appointment may still be removed until the tribunal is finally constituted. Rule 7 speaks of the replacement rather than of the withdrawal of an arbitrator. Therefore, the removal of an arbitrator would only be permissible through the simultaneous appointment of another arbitrator. Replacement

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See Note B to Arbitration Rule 5 of 1968, (1993) 1 ICSID Reports 73. See Note C to Arbitration Rule 5 of 1968, (1993) 1 ICSID Reports 73. See Notes C and D to Arbitration Rule 5 of 1968, (1993) 1 ICSID Reports 73. For an example of a party making an appointment after the arbitrator initially appointed had withdrawn his acceptance and after Claimant had requested the Chairman to make appointments of all arbitrators not yet made, see Ansung Housing v China, Award (9 March 2017) paras 9–15. 22 Arbitration (Additional Facility) Rules (2006) Art. 12 provides for the same solution.

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may take place even after the Chairman has been requested to make an appointment or appointments under Art. 38. Even an arbitrator appointed by the Chairman may be replaced by agreement of the parties before the tribunal is constituted. After the tribunal’s constitution in accordance with Arbitration Rule 6(1), any change in the tribunal’s composition would have to take place in accordance with Arts. 56–58.23

22

B. ‘(2)(a) The Tribunal shall consist of a sole arbitrator or any uneven number of arbitrators . . .’ The requirement that a tribunal must have an uneven number of arbitrators is one of the Convention’s few mandatory provisions concerning the constitution and composition of the tribunal.24 The parties may not deviate from this rule by agreement. It is designed to avoid a stalemate if the tribunal is evenly divided. Other instruments governing international arbitration either mandate or express a strong preference for an uneven number of arbitrators.25 The early drafts to the Convention did not provide for an uneven number of arbitrators. The Working Paper and the Preliminary Draft made reference to a sole arbitrator or several arbitrators (History, Vol. I, pp. 176, 178). A suggestion to specify that an uneven number of arbitrators must be appointed in order to avoid a possible impasse was incorporated into the later drafts (History, Vol. II, pp. 329, 416). The possibility of appointing a sole arbitrator was foreseen in all drafts to the Convention (History, Vol. I, pp. 176, 178). Suggestions to narrow the parties’ choice to three arbitrators or to a sole arbitrator did not prevail (History, Vol. II, pp. 266, 270, 326, 329). Theoretically, the parties may choose any uneven number of arbitrators, that is one, three, five, seven etc. A number higher than three appears unlikely because of the attendant cost. But an agreement to appoint five arbitrators in a particularly weighty case is possible (see also Art. 39, para. 3). In actual practice, most ICSID tribunals have consisted of three arbitrators. The appointment of sole arbitrators has remained exceptional.26 From 1996 until the end of December 2020, there have been only eleven instances where sole arbitrators were appointed.27 There have been no instances of tribunals comprising more than three arbitrators.

23 See also Notes A and B to Arbitration Rule 6 of 1968, (1993) 1 ICSID Reports 74. 24 See also Arbitration (Additional Facility) Rules (2006) Art. 6(3). 25 See International Law Commission (ILC) Model Rules on Arbitral Procedure [1958] 2 YBILC 83, 84, Art. 3(3); UNCITRAL Arbitration Rules (2013) Arts. 7–10; UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Art. 10; ICC Arbitration Rules (2021) Art. 12. See also Antonio R Parra, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Rev 287, 305–307. 26 In Generation Ukraine v Ukraine, the Claimant had proposed to the Respondent that the arbitral tribunal consist of a sole arbitrator appointed by agreement of the parties from a list of three persons. However, the Respondent rejected this proposal and a three-member panel was appointed. See Generation Ukraine v Ukraine, Award (16 September 2003) para 4.5. See also Gavan Griffith, ‘Constitution of Arbitral Tribunals: The Duty of Impartiality in Tribunals or Choose Your Arbitrator Wisely’ (1998) 13 ICSID Rev 36, 44 ff. 27 Gruslin v Malaysia I, Order on Discontinuance (24 April 1994); Misima Mines v Papua New Guinea, Order on Discontinuance (14 May 2001); Gruslin v Malaysia II, Award (27 November 2000); CDC v

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The importance of the requirement that a tribunal must be composed of an uneven number of arbitrators under Art. 37(2) was stressed by the Tribunal in PNB Banka v Latvia.28 A few months after the introduction of a request for provisional measures by the Claimants at an early stage of the proceedings, the case was suspended under Arbitration Rule 9(6) following the Respondent’s proposal to disqualify the arbitrator appointed by the Claimants. Shortly thereafter, the Claimants asked the two remaining arbitrators to proceed to the decision on provisional measures in spite of the suspension of the proceedings. The Claimants argued that the word ‘suspended’ in Rule 9(6) did not apply to an application for provisional measures and that, in any event, the Tribunal had ‘inherent powers’ to decide a request for provisional measures.29 In ruling on the Claimants’ request, the unchallenged arbitrators stressed that the Claimants’ submissions failed to refer to critical provisions of the Convention, inter alia, Art. 37(2), which states that a tribunal ‘shall consist of an uneven number of arbitrators’ and, unless otherwise agreed, ‘shall consist of three arbitrators.’30 While recognizing the importance of the power to issue provisional measures, the Tribunal held that the clear language of Arbitration Rule 9(6) is ‘principally designed to implement the requirements of Articles 37(2) and 48(1) of the Convention.’ In dismissing the Claimant’s request, the Tribunal concluded that ‘[a]n ICSID Tribunal may have implied, rather than inherent, powers. In either event, such powers cannot be exercised contrary to the express provisions of the Arbitration Rules.’31 C. ‘. . . appointed as the parties shall agree.’

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The primary principle for the composition and method of constitution of the tribunal is agreement by the parties.32 This principle was reflected in all drafts leading to the

28 29 30

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Seychelles, Award (17 December 2013); Booker v Guyana, Order on Discontinuance (11 October 2003); Malaysian Historical Salvors v Malaysia, Award (17 May 2007); Pantechniki v Albania, Award (20 July 2009); Astaldi v Honduras II, Award (17 September 2010); Elsamex v Honduras, Award (16 November 2012); IGB v Spain, Award (14 August 2015); NEPC v Bangladesh Power Development Board, Decision on Jurisdiction (10 December 2019). PNB Banka v Latvia, Ruling on Power of Tribunal to Issue Provisional Measures Whilst Proceedings Are Suspended (24 September 2018) para 5. ibid para 3. ibid para 5. Apart from referring to Art. 37(1) of the Convention, the two arbitrators also referred to Art. 48(1) of the Convention, which provides that questions shall be decided by a majority of votes, Art. 58 of the Convention, which provides that no provision for deadlock exists, unlike the case of the unchallenged arbitrators deciding an application for disqualification, and Art. 44 of the Convention, which provides that ‘any arbitration proceedings shall be conducted . . . in accordance with the Arbitration Rules.’ The Tribunal also noted that the Claimants’ submissions did not refer to Arbitration Rule 10(2), which ‘provides that, in the case of a vacancy on the Tribunal, “the proceeding shall be or remain suspended until the vacancy has been filled”. The word “remain” is a clear reference to Arbitration Rule 9(6)’ (ibid para 6). ibid para 10. As noted by the ad hoc Committee in Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Annulment (11 May 2010) para 128: ‘la composition d’un tribunal, tout comme la soumission même d’un litige à l’arbitrage, repose sur le consentement ou sur le commun accord des parties au litige. Une prohibition absolue de la désignation de plusieurs arbitres de la même nationalité ne serait pas réconciliable avec la marge de manœuvre que la Convention de Washington laisse aux parties, comme l’indiquent les articles 37(2)(a) et 39.’

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Convention and found consistent support (History, Vol. I, pp. 176, 178; Vol. II, pp. 265, 295, 326, 486, 983). The agreement may exist prior to the institution of proceedings. In this case, its contents should either be set out in the request for arbitration (see Art. 36, paras. 33, 34), or should be communicated by the parties to the Secretary-General as soon as possible after the registration of the request (see para. 10 supra). The agreement may also be contained in a joint request for arbitration by the parties (Art. 36, paras. 10, 11). Alternatively, the parties may reach an ad hoc agreement on the tribunal’s composition and constitution after the registration of the request.

29

1. Prior Agreement An advance agreement by the parties concerning the composition and method of appointment of the tribunal will typically be contained in the instrument providing for consent to ICSID arbitration. The ICSID Model Clauses of 1993 (see Art. 25, para. 772) offer the following formula which provides the parties with a number of alternatives:

30

Clause 9 Any Arbitral Tribunal constituted pursuant to this agreement shall consist of [a sole arbitrator]/[uneven total number arbitrators, number appointed by each party, and an arbitrator, who shall be President of the Tribunal, appointed by [agreement of the parties]/[title of neutral official]/[agreement of the parties or, failing such agreement, by title of neutral official]].33

On the basis of this Model Clause the parties may opt for a sole arbitrator or, typically, three arbitrators. If they opt for a sole arbitrator, the appointment will usually be by agreement. It is useful to nominate a neutral official as appointing authority, in case no agreement can be reached (see paras. 32, 36–38 infra). It is also possible to provide for appointment by the neutral official as the primary method of appointment. If the parties opt for a tribunal of three arbitrators, one will be appointed by each party. The third member may be appointed by agreement of the parties. This formula would correspond to the residual provision of Art. 37(2)(b), which may be incorporated into the parties’ agreement as their primary choice.34 In case the parties are unable to agree on the third member, it is useful to provide for appointment by an appointing authority. Appointment of the third member by an appointing authority may also be made the primary choice, that is, without a prior attempt by the parties to make the

33 (1997) 4 ICSID Reports 357, 364. See also Clause X of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 204; Clause XVIII of the 1968 Model Clauses, (1968) 7 ILM 1174–1175. 34 This was the case in Mobil Oil v New Zealand. The arbitration clause is reproduced in Attorney-General v Mobil Oil NZ Ltd, New Zealand High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117, 123. See also CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 5–6; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 5; Fraport v Philippines I, Award (16 August 2007) para 9; Parkerings v Lithuania, Award (11 September 2007) paras 10, 15–19.

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appointment by agreement. Such a formula may save time since it avoids the potentially lengthy negotiations on the third member.35 There is yet another possibility, which is not reflected in Model Clause 9 but is open to the parties. It consists in the appointment of one arbitrator each by the parties and the subsequent appointment of the third arbitrator by agreement of the two arbitrators who have been chosen by the parties. This method has been employed in a number of cases.36 According to the ICSID Annual Report 2020, as of 30 June 2020, 64 percent of appointments were made either by the parties or by the party-appointed arbitrators, while the remaining 36 percent were made by ICSID based on agreement of the parties or the applicable default provisions. In total, ICSID acted as appointing authority seventy-seven times as of 30 June 2020.37 The two members of the tribunal designated by the parties are more likely to reach agreement on the third member than the parties themselves.38 The possibilities, as described above, may be appropriately adapted in case the parties decide on a tribunal consisting of more than three arbitrators (see para. 26 supra). The president of the tribunal should be designated clearly. In case of a tribunal consisting of three persons, the ‘third’ arbitrator should be the president (see also History, Vol. II, p. 412). It is undesirable that a member who has been appointed by one of the parties presides over the tribunal. Selection of the president of the tribunal by lot or through election by the members of the tribunal is possible with the agreement of the parties.39 In the case of appointments by a neutral official, the appointing authority should be required to designate the president of the tribunal, if necessary. In several cases, the parties have agreed that the ICSID Secretary-General select the presiding arbitrator from a shortlist submitted by the parties, or that the presiding arbitrator be selected from a shortlist compiled by ICSID.40 The choice of a neutral official as appointing authority for arbitrators should be made with care. Possible choices would be the Chairman of the Administrative Council or the 35 See also Chittharanjan F Amerasinghe, ‘Submissions to the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1973/1974) 5 J Mar L & Comm 211, 236–237; Paul C Szasz, ‘A Practical Guide to the Convention on Settlement of Investment Disputes’ (1968) 1 Cornell ILJ 1, 27. 36 Vacuum Salt v Ghana, Award (16 February 1994) paras 5–10; TANESCO v IPTL, Award (12 July 2001) paras 10, 12; Zhinvali v Georgia, Award (24 January 2003) para 14; Joy Mining v Egypt, Award (6 August 2004) para 5; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 38; Telenor v Hungary, Award (13 September 2006) paras 5, 6; ADC v Hungary, Award (2 October 2006) paras 17, 20; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 45; Siag v Egypt, Decision on Jurisdiction (11 April 2007) para 5. 37 According to the Report, individuals of forty-four nationalities were represented among the appointments made in the fiscal year 2020 (between 1 July 2019 and 30 June 2020). Of these individuals, 15 percent were appointed for the first time in an ICSID case. Forty-two percent of the first-time appointments as of 30 June 2020 involved nationals of low- or middle-income countries, and 19 percent were women. ICSID appointed 53 percent of female appointees, respondents appointed 34 percent, and claimants appointed 3 percent. No female appointments were made by the co-arbitrators. See ICSID, ‘Annual Report 2020’ (2020) 26–28. 38 Heribert Golsong, ‘A Guide to Procedural Issues in International Arbitration’ (1984) 18 Int’l Lawyer 633, 639. 39 Arbitration Rule 13(1) envisages an agreement of the parties that the tribunal’s president shall be elected by its members. 40 Meg Kinnear, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1 ABA SIL Int’l Arb Committee Newsletter 36.

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Secretary-General of ICSID. In Joy Mining v Egypt, the Claimants suggested that the Chairman of the Administrative Council be the appointing authority if an appointment was not made within the proposed time limit. The Respondent accepted the proposal, but the parties ultimately agreed – upon proposal of the Centre and for administrative reasons – to replace the Chairman of the Administrative Council as appointing authority with the Secretary-General of ICSID.41 Persons not officially associated with ICSID, such as the President of the International Court of Justice or the president of a national supreme court, might also be formally asked whether they are willing to undertake the task of acting as appointing authority. But even in the case of an affirmative response, there is no guarantee that the appointment will actually be made. The neutral official is usually designated by reference to his or her office rather than in an individual capacity. A successor in the office may not see him or herself bound by the assent of a predecessor.42 But the risk of a refusal by an appointing authority to exercise its function is limited in the case of ICSID arbitration: Art. 38 designates the Chairman as ex officio appointing authority should other methods of constituting the tribunal fail. An increasing number of treaties that provide for consent to ICSID arbitration (see Art. 25, paras. 825–874) also contain provisions on the constitution of a tribunal, including the method of appointment of arbitrators, the appointing authority selected by the parties, and possible qualities of arbitrators, as well as specifications of the requirements of independence and impartiality.43 By accepting the offer of arbitration contained in the treaty, the investor also agrees to these provisions. International investment agreements often provide that the ICSID Secretary-General or the Chairman of the ICSID Administrative Council act as appointing authority for arbitrator appointments.44 Some treaties indicate as the appointing authority the SecretaryGeneral of the Permanent Court of Arbitration (PCA), or the President of the International Court of Arbitration of the International Chamber of Commerce (ICC).45 The selection of arbitrators is not limited to the individuals on the ICSID Panel of Arbitrators unless the applicable treaty has specific provisions to that effect.46 For

41 Joy Mining v Egypt, Award (6 August 2004) para 5. 42 See Amerasinghe (n 38) 236 ff; Lalive (n 4) 114 ff; Lauterpacht (n 4) 646–647. 43 See, for instance, United States Model BIT (2004) Art. 27(1); Canada–Mongolia BIT (signed 8 September 2016, entered into force 24 February 2017) Art. 25(1); Colombia–France BIT (signed 10 July 2014, not yet in force) Art. 15(18); Nigeria–Singapore BIT (signed 4 November 2016, not yet in force) Art. 14(1); Mexico–UAE BIT (signed 29 January 2016, entered into force 25 January 2018) Art. 13(1); Morocco–Nigeria BIT (signed 3 December 2016, not yet in force) Art. 27(2)(a). 44 See Kostadinova (n 10) 133. See also Alejandro A Escobar, ‘Three Aspects of ICSID’s Administration of Arbitration Proceedings’ (1997) 14(2) News from ICSID 4, 6. 45 For an example of a treaty referring to the Secretary-General of the PCA as appointing authority, see Morocco–Nigeria BIT (n 46) Art. 27(2)(b). In El Jaouni v Lebanon, the Respondent did not nominate an arbitrator within the required time limits. Given that Art. 9(3) of the Germany–Lebanon BIT (signed 18 March 1997, entered into force 25 March 1999) designates as appointing authority the President of the ICC Court, he appointed an arbitrator on behalf of Lebanon. See El Jaouni v Lebanon, Decision on Jurisdiction, Liability and Certain Aspects of Quantum (25 June 2018) (not public). 46 See eg Colombia–Japan BIT (signed 12 September 2011, entered into force 11 September 2015) Art. 30(2), which requires the Secretary-General to appoint the arbitrator(s) not yet appointed from the ICSID Panels of Arbitrators. Art. 30(5) of the treaty further allows each party to exclude up to three nationalities; the Secretary-General may not appoint persons from these excluded nationalities. See Kostadinova (n 10) 133.

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example, Arts. 1123–1124 of the NAFTA47 adopt the basic formula of Art. 37(2)(b) of the Convention, but designate the Secretary-General of ICSID, rather than the Chairman, as appointing authority; in addition, in appointing the presiding arbitrator, the Secretary-General shall normally choose a person from a special roster of presiding arbitrators.48 The latter provision is evidently designed to contribute to continuity and uniformity in the application of the pertinent NAFTA provisions (see also Art. 38, para. 5).49 This NAFTA roster has, however, never been successfully established. In some instances, the appointing authority can consult with the parties prior to making an appointment,50 while other treaties leave the appointment to the discretion of the appointing authority.51

2. Ad hoc Agreement 39

Since advance agreements concerning the constitution of tribunals appear to be rather rare, the more likely opportunity to reach agreement is after the registration of the request. The Arbitration Rules provide a special procedure to facilitate such an agreement: Rule 2 Method of Constituting the Tribunal in the Absence of Previous Agreement (1) If the parties, at the time of the registration of the request for arbitration, have not agreed upon the number of arbitrators and the method of their appointment, they shall, unless they agree otherwise, follow the following procedure: (a) the requesting party shall, within 10 days after the registration of the request, propose to the other party the appointment of a sole arbitrator or of a specified uneven number of arbitrators and specify the method proposed for their appointment; (b) within 20 days after receipt of the proposals made by the requesting party, the other party shall: (i) accept such proposals; or (ii) make other proposals regarding the number of arbitrators and the method of their appointment; (c) within 20 days after receipt of the reply containing any such other proposals, the requesting party shall notify the other party whether it accepts or rejects such proposals. (2) The communications provided for in paragraph (1) shall be made or promptly confirmed in writing and shall either be transmitted through the Secretary-General or directly between the parties with a copy to the Secretary-General. The parties shall promptly notify the Secretary-General of the contents of any agreement reached.

47 North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, 644. 48 The United States–Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020), which replaces the NAFTA as of 1 July 2020, also provides in Art. 14.D.6(2) that the Secretary-General of ICSID shall serve as appointing authority. 49 See Parra (n 19) 351; Cheri D Eklund, ‘A Primer on the Arbitration of NAFTA Chapter Eleven Investor– State Disputes’ (1994) 11 J Int’l Arb 135, 149–150. 50 Canada–Mongolia BIT (n 37) Art. 25(4); Colombia–France BIT (n 37) Art. 15(18). 51 Nigeria–Singapore BIT (n 37) Art. 14(1); Mexico–UAE BIT (n 37) Art. 13(2). See also United States Model BIT (2012) Art. 27(3).

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(3) At any time 60 days after the registration of the request, if no agreement on another procedure is reached, either party may inform the Secretary-General that it chooses the formula provided for in Article 37(2)(b) of the Convention. The SecretaryGeneral shall thereupon promptly inform the other party that the Tribunal is to be constituted in accordance with that Article.52

Arbitration Rule 2 is designed to facilitate an agreement on the number of arbitrators and on the method of their appointment. It does not deal with their actual appointment. Rule 2 merely suggests a sequence of communications between the parties subject to certain time limits. The underlying idea is that the actual constitution of the tribunal will be easier once a procedural framework has been set up for this purpose. The time limits of Rule 2 are meant to make it possible to achieve an agreement concerning constitution as well as the actual appointments of the arbitrators within 90 days of registration, that is, before the alternative procedure of Art. 38 becomes available. The requesting party has 10 days to make its first proposal. The other party has 20 days to accept it or make a counterproposal. Thereafter, the requesting party has another 20 days to react. If no agreement concerning the number of arbitrators and the modalities for their appointment is reached in this way after 60 days, either party may abandon the procedure of Rule 2 and opt for the residual rule of Art. 37(2)(b). All these time limits are subject to modification by agreement of the parties. The parties may also vary the procedure of Rule 2 in other ways, for instance, by adding further exchanges of proposals.53 The procedure of Rule 2 gives the parties the possibility to exercise their freedom of choice in the composition and constitution of the tribunal. But it also limits the opportunities for non-cooperation and procrastination. If the parties do not reach agreement within 60 days, the Convention offers a perfectly reasonable method in Art. 37(2)(b). This leaves the parties some time to make the actual appointments before the expiry of the time limit of 90 days under Art. 38. Once the parties have reached an agreement, they are individually bound by it and are no longer free to opt for Art. 37(2)(b) except by another agreement.54 The Secretary-General and the legal staff of ICSID monitor the constitution of tribunals. Therefore, the agreement reached, and all communications leading up to it, must be communicated to the Secretary-General.55

52 Under Arts. 6 and 9 of the Arbitration (Additional Facility) Rules, a tribunal is constituted as follows: (i) the tribunal consists of three arbitrators; (ii) each party appoints one co-arbitrator; (iii) the parties attempt to agree on the presiding arbitrator. If the parties cannot agree on the method of constituting the tribunal, the ICSID’s default mechanism under Art. 9 of the Arbitration (AF) Rules applies as follows: the first party to appoint an arbitrator also proposes a candidate to serve as president of the tribunal. The other party then appoints an arbitrator and either agrees to the appointment of the arbitrator proposed for president or proposes another candidate. If a counterproposal is made, the party making the first appointment then indicates whether it agrees to the new proposal for president. The parties are not limited in the number of proposals or counterproposals that can be made and may agree on a different method of constituting the tribunal even after a party has raised the ICSID default formula. If the parties are unable to appoint all members of the Tribunal under the established method, either party may invoke the ICSID default mechanism for appointing the missing arbitrator(s). 53 See Note B to Arbitration Rule 2 of 1968, (1993) 1 ICSID Reports 68. 54 See Note F to Arbitration Rule 2 of 1968, (1993) 1 ICSID Reports 69. 55 See also Administrative and Financial Regulations.

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An agreement reached by the parties under Arbitration Rule 2 may embody any of the options described above for advance agreements (see paras. 30–38 supra). Such an agreement will facilitate the constitution of the tribunal, but is no guarantee that the actual appointment of the arbitrators will be smooth and speedy. In particular, if the third arbitrator is to be appointed by agreement of the parties, the choice of a person that is acceptable to both sides may prove difficult. Therefore, even if the parties have reached an agreement on the composition and method of constituting the tribunal, action by the Chairman under Art. 38 may still become necessary. An agreement on the composition and method of constituting the tribunal is not an agreement in the sense of Art. 39. Art. 39 waives the nationality requirements for arbitrators if each individual member of the tribunal has been appointed by agreement of the parties. Art. 39 refers to the actual process of appointment and not to any agreement concerning the number of arbitrators and the method of their appointment.56 While the descriptions in decisions of ICSID tribunals of their own constitution are not always entirely clear,57 the parties at times also fail to distinguish clearly the agreement on the composition and constitution of the tribunal and the actual appointments of arbitrators. In some cases, the parties agreed to establish identical tribunals because the underlying cases were closely related (see Art. 26, paras. 202, 204–209).58 For instance, in Planet Mining v Indonesia, the parties agreed to appoint jointly all members of the Tribunal. However, this can be explained by the fact that the same Tribunal members had been appointed six months earlier in a parallel arbitration between the same parties.59 The two cases were eventually consolidated by agreement of the parties. Another example of two cases with identical tribunals is provided by the BSG Resources v Guinea arbitrations.60 In the first case, the Claimant proposed the following method of constitution of the Tribunal in its Request for Arbitration: (i) one arbitrator appointed by the Claimant within 20 days from the Request of Arbitration; (ii) one arbitrator appointed by the Respondent within 20 days from the Claimant’s appointment; and (iii) the President to be appointed by the two co-arbitrators within 30 days from the appointment by the Respondent. In the event that a party failed to appoint its arbitrator or if the co-arbitrators failed to agree on the presiding arbitrator, the Chairman of the Administrative Council would appoint the arbitrator(s) not yet appointed within the agreed time limits.61 Guinea accepted the method proposed by BSG. In the subsequent

56 See SOABI v Senegal, Declaration Broches (1 August 1984) paras 8–10. 57 See eg Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 10; SPP v Egypt, Award (20 May 1992) paras 4–7. 58 Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 4; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 5, 11, 14, 15; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 4, 7; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) paras 1–7, 19. 59 Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 53. 60 In the underlying dispute, two separate proceedings were registered under ICSID Case Nos ARB/14/22 and ARB/15/46, which were later consolidated under ICSID Case No ARB/14/22. 61 See BSG Resources v Guinea I, Request for Arbitration (1 August 2014) para 115.

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case, the Claimant requested that the cases be consolidated and the same Tribunal appointed. Following agreement of the parties, the cases were consolidated.62 D. ‘(b) Where the parties do not agree upon the number of arbitrators and the method of their appointment, the Tribunal shall consist of three arbitrators, one arbitrator appointed by each party and the third, who shall be the president of the Tribunal, appointed by agreement of the parties.’ Art. 37(2)(b) is the formula for the composition and constitution of the tribunal that will apply if the parties do not reach an agreement in accordance with Art. 37(2)(a).63 It was contained in a similar fashion in all drafts leading to the Convention and evoked practically no comment (History, Vol. I, pp. 176, 178; Vol. II, pp. 266, 862). Either party may opt for Art. 37(2)(b) if no agreement on the number of arbitrators and the method of their appointment has been reached within 60 days of the registration of the request for arbitration (see paras. 40–41 supra).64 The parties are free to extend this time limit by agreement. They may also adopt the formula of Art. 37(2)(b) by agreement. Theoretically, they may also agree not to exhaust the time limit of 60 days, but to move on to Art. 37(2)(b) earlier. In practical terms, it is of little relevance whether the parties adopt the terms of Art. 37(2)(b) in their agreement or use Art. 37(2)(b) in the absence of an agreement. Other instruments governing international arbitration offer similar fall-back formulae if the parties do not agree on the composition and constitution of the tribunal.65 Art. 37(2)(b) provides that the ‘third arbitrator’ shall be the tribunal’s president. It would be undesirable if an arbitrator who was appointed by one of the parties were to preside over the tribunal (see para. 35 supra). This provision means, in particular, that the three arbitrators are not free to agree on one of the other two arbitrators to be president. The parties may, however, enter such an agreement under Art. 37(2)(a). In order to expedite the process of appointing the three arbitrators, the Arbitration Rules offer the following procedure: Rule 3 Appointment of Arbitrators to a Tribunal Constituted in Accordance with Convention Article 37(2)(b) (1) If the Tribunal is to be constituted in accordance with Article 37(2)(b) of the Convention: (a) either party shall in a communication to the other party: (i) name two persons, identifying one of them, who shall not have the same nationality as nor be a national of either party, as the arbitrator appointed

62 The two cases were consolidated by agreement of the parties with BSG Resources v Guinea II, Procedural Order No 1 (14 February 2016) and BSG Resources v Guinea I, Procedural Order No 5 (14 February 2016). 63 A very similar formula is contained in Arbitration (Additional Facility) Rules (2006) Art. 6(1). 64 See also Amerasinghe (n 2) 546–547; Georges R Delaume, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 820. 65 See ILC Model Rules (n 19) Art. 3(3), (4); UNCITRAL Arbitration Rules (2013) Arts. 7–10; UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Arts. 10(2), 11(3)(a); ICC Arbitration Rules (2021) Art. 12(2).

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schreuer’s commentary on the icsid convention by it, and the other as the arbitrator proposed to be the President of the Tribunal; and (ii) invite the other party to concur in the appointment of the arbitrator proposed to be the President of the Tribunal and to appoint another arbitrator; (b) promptly upon receipt of this communication the other party shall, in its reply: (i) name a person as the arbitrator appointed by it, who shall not have the same nationality as nor be a national of either party; and (ii) concur in the appointment of the arbitrator proposed to be the President of the Tribunal or name another person as the arbitrator proposed to be President; (c) promptly upon receipt of the reply containing such a proposal, the initiating party shall notify the other party whether it concurs in the appointment of the arbitrator proposed by that party to be the President of the Tribunal. (2) The communications provided for in this Rule shall be made or promptly confirmed in writing and shall either be transmitted through the Secretary-General or directly between the parties with a copy to the Secretary-General.66

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This procedure may be used by the parties if Art. 37(2)(b) is directly applicable because there is no agreement on the tribunal’s constitution. It may also be used if the parties have agreed to adopt the formula of Art. 37(2)(b). Either of the parties may take the first step. There are no specific time limits in Rule 3, but the parties will be under pressure if they want to avoid the time limit of 90 days under Art. 38, especially if they have previously exhausted the procedure of Rule 2 (see paras. 39–41 supra). But Art. 38 allows the parties to extend that time limit by agreement. Rule 3 is designed to expedite the process of appointing arbitrators. Rather than go through the selection of the party-appointed arbitrators first and then proceed to negotiating the person of the third, agreed arbitrator, the two steps are to be taken simultaneously. The selection of the party-appointed arbitrator goes hand in hand with a proposal for the third arbitrator or a reaction to such proposal. In this way, the tribunal can be constituted through two or three communications between the parties. Only the appointment of the third arbitrator is subject to an agreement by the parties. The appointments of the first two arbitrators are unilateral acts that are not subject to the approval of the other party, except if the appointee is a national of the other party, in which case party agreement is required. Suggestions to grant a veto to the other side against a party appointed arbitrator who is regarded as persona non grata were made during the Convention’s drafting, but were not pursued (History, Vol. II, pp. 484, 486, 513, 569). A disqualification of an arbitrator can be proposed only in accordance with Art. 57, if the requirements for an appointment contained in the Convention are lacking. The parties may modify and extend the procedure offered by Rule 3. In particular, they can agree on further exchanges for the appointment of the third arbitrator. The procedure foreseen in Rule 3 may, subject to appropriate adjustments, also be used for

66 A similar procedure is foreseen in Arbitration (Additional Facility) Rules (2006) Art. 9.

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other methods for the tribunal’s constitution, that is, those outside the formula of Art. 37(2)(b) (see paras. 32–37 supra). The provisions in Rule 3 concerning the nationality of arbitrators are designed to take account of Art. 39. They are discussed in the Commentary to Art. 39 (see Art. 39, paras. 13–24). All communications between the parties under Rule 3 are to be transmitted to the Secretary-General who monitors the proper constitution of the tribunal.67 The formula offered by Art. 37(2)(b) for the composition of the tribunal and the appointment of arbitrators has been used repeatedly. In some cases, the reports make it clear that one party availed itself of this option after the expiry of the time limit of Arbitration Rule 2(3) (see para. 39 supra).68 In other cases, it is not clear whether this formula for the composition and constitution of the tribunal was used on the basis of an agreement or in the absence of an agreement.69

67 See also Administrative and Financial Regulation 24 (n 49). 68 For examples, see Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 47; AMT v Zaire, Award (21 February 1997) para 2.01; Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 6; Maffezini v Spain, Decision on Jurisdiction (25 January 2000) para 5; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) para 8; Inceysa v El Salvador, Award (2 August 2006) para 5; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) para 5; Tokios Tokelės v Ukraine, Award (26 July 2007) para 21; MCI v Ecuador, Award (31 July 2007) para 3; Görkem v Turkmenistan, Order on Discontinuance (12 December 2017) para 3. See also John T Schmidt, ‘Arbitration under the Auspices of the International Centre for Settlement of Investment Disputes (ICSID), Implications of the Decision on Jurisdiction in Alcoa Minerals of Jamaica Inc v Government of Jamaica’ (1976) 17 Harvard ILJ 90, 96. 69 For examples, see SPP v Egypt, Decision on Jurisdiction I (27 November 1985) paras 4–8; Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 17; Cable TV v St Kitts and Nevis, Award (13 January 1997) para 1.09; Goetz v Burundi, Award (10 February 1999) paras 19–28; RSM v Grenada II (registered 16 March 2010).

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Article 38 If the Tribunal shall not have been constituted within 90 days after notice of registration of the request has been dispatched by the Secretary-General in accordance with paragraph (3) of Article 36, or such other period as the parties may agree, the Chairman shall, at the request of either party and after consulting both parties as far as possible, appoint the arbitrator or arbitrators not yet appointed. Arbitrators appointed by the Chairman pursuant to this Article shall not be nationals of the Contracting State party to the dispute or of the Contracting State whose national is a party to the dispute.

OUTLINE Paragraphs I. INTRODUCTION 1–6 II. INTERPRETATION 7–31 A. ‘If the Tribunal shall not have been constituted within 90 days after notice of registration of the request has been dispatched by the Secretary-General in accordance with paragraph (3) of Article 36, or such other period as the parties may agree, . . .’ 7–11 B. ‘. . . at the request of either party and after consulting both parties as far as possible . . .’ 12–17 1. Initiative 12–14 2. Consultation 15–17 C. ‘. . . the Chairman shall . . . appoint the arbitrator or arbitrators not yet appointed.’ 18–27 1. Obligation to Appoint 18–21 2. Appointments and Designations 22–27 D. ‘Arbitrators appointed by the Chairman pursuant to this Article shall not be nationals of the Contracting State party to the dispute or of the Contracting State whose national is a party to the dispute.’ 28–31

BIBLIOGRAPHY Gaukrodger, David, ‘Appointing Authorities and the Selection of Arbitrators in Investor–State Dispute Settlement: An Overview’ (OECD Consultation Paper, March 2018) accessed 10 January 2021 Kinnear, Meg, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1 ABA Section of International Law International Arbitration Committee Newsletter 35 Kostadinova, Milanka, ‘Aspects of Procedure for Institution of Proceedings and Establishment of Tribunals in Investment Arbitration’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) 114

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Obadia, Eloïse and Nitschke, Frauke, ‘Institutional Arbitration and the Role of the Secretariat’ in Chiara Giorgetti (ed), Litigating International Investment Disputes: A Practitioner’s Guide (Brill 2014) 80

I. INTRODUCTION Art. 38 is part of Section 2 of Chapter IV of the Convention. Section 2 deals with the ‘Constitution of the Tribunal.’ Art. 38 is the most important Article designed to safeguard the principle of non-frustration in the constitution of the tribunal. The parties are first given a chance to appoint the arbitrator or arbitrators in accordance with Art. 37. If they fail, Art. 38 provides a fall-back procedure that may be initiated by either party. In that case, appointments are to be made by the Chairman of the Administrative Council.1 The basic concept of Art. 38 was embodied in all drafts leading to the Convention (History, Vol. I, pp. 180, 182). It evoked little reaction and hardly any opposition (History, Vol. II, pp. 77, 78, 108, 119, 306, 862). The discussion revolved mainly around the nationality of arbitrators to be appointed by the Chairman (see paras. 27–28 infra) and around the requirement to consult with the parties (see paras. 15–16 infra). Other instruments governing international arbitration contain comparable provisions for the appointment of arbitrators if the parties are unable to do so.2 The Chairman’s default powers as an appointing authority under Art. 38 of the Convention cannot be modified by the disputing parties, as this could result in the frustration of the constitution of an ICSID tribunal, which Art. 38 wants to avoid (see also Art. 37, paras. 3, 5). This notwithstanding, the disputing parties can agree on an appointing authority that is different from the Chairman as part of the principle of party autonomy. Appointments made by such an agreed appointing authority would, however, be appointments made under Art. 37(2)(a) of the Convention, rather than appointments under Art. 38. Agreements on an appointing authority other than the Chairman of the Administrative Council under Art. 37(2)(a) of the Convention may be made by the parties at the occasion of a specific proceeding.3 They may also find their basis in an instrument containing consent to ICSID arbitration. Thus, a number of investment treaties stipulate that the Secretary-General, rather than the Chairman, or even a

1 See also Arbitration (Additional Facility) Rules (2006) Art. 6(4). 2 See International Law Commission Model Rules on Arbitral Procedure [1958] 2 YBILC 83, Art. 3(2); UNCITRAL Arbitration Rules (2013) Arts. 8(2) and 9(2)–(3); UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Art. 11.2 and 3; ICC Arbitration Rules (2021) Art. 12(5); SIAC Arbitration Rules (2016) Rule 11(2)(3); LCIA Arbitration Rules (2020) Art. 7.2; SCC Arbitration Rules (2017) Art. 17(3)–(7). See also Antonio R Parra, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Rev 287, 305–306. For a comparative study on appointing authorities in investment arbitration, see David Gaukrodger, ‘Appointing Authorities and the Selection of Arbitrators in Investor–State Dispute Settlement: An Overview’ (OECD Consultation Paper, March 2018) accessed 10 January 2021. 3 See eg Champion Trading and Ameritrade v Egypt, Decision on Jurisdiction (21 October 2003) part 2; SGS v Philippines, Decision of Jurisdiction (29 January 2004) para 5; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 3; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 5; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 4.

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different institution, such as the Secretary-General of the Permanent Court of Arbitration (PCA), act as appointing authority (see Art. 37, para. 38). Art. 1124 of the NAFTA, for example, provides that any appointments are to be made by the SecretaryGeneral and that presiding arbitrators are to be appointed from a specific roster, which has, however, never been established: Article 1124: Constitution of a Tribunal When a Party Fails to Appoint an Arbitrator or the Disputing Parties are Unable to Agree on a Presiding Arbitrator 1. The Secretary-General shall serve as appointing authority for an arbitration under this Section. 2. If a Tribunal, other than a Tribunal established under Article 1126, has not been constituted within 90 days from the date that a claim is submitted to arbitration, the Secretary-General, on the request of either disputing party, shall appoint, in his discretion, the arbitrator or arbitrators not yet appointed, except that the presiding arbitrator shall be appointed in accordance with paragraph 3. 3. The Secretary-General shall appoint the presiding arbitrator from the roster of presiding arbitrators referred to in paragraph 4, provided that the presiding arbitrator shall not be a national of the disputing Party or a national of the Party of the disputing investor. In the event that no such presiding arbitrator is available to serve, the Secretary-General shall appoint, from the ICSID Panel of Arbitrators, a presiding arbitrator who is not a national of any of the Parties. 4. On the date of entry into force of this Agreement, the Parties shall establish, and thereafter maintain, a roster of 45 presiding arbitrators meeting the qualifications of the Convention and rules referred to in Article 1120 and experienced in international law and investment matters. The roster members shall be appointed by consensus and without regard to nationality.4

6

The application of Art. 38 is a frequent occurrence in ICSID practice (see para. 25 infra). The application of Art. 38 may be triggered by a variety of circumstances.5 The parties may be unable to agree on a joint appointment. The appointed members of the tribunal may be unable to agree on the appointment of a third member or of further members if the tribunal is to consist of more than three arbitrators. A party may have failed to make the appointment or appointments for which it has sole responsibility. An appointing authority chosen by agreement of the parties (see Art. 37, paras. 31–32, 36–38) may have failed to make an appointment. The parties may have cooperated in

4 North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, 644. See also Parra (n 2) 351. The United States– Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020) Art. 14. D.6(2), similarly states that the Secretary-General shall serve as appointing authority. Pursuant to Art. 14. D.6(2) of the USMCA, the period for constitution of the tribunal is 75 days after the date that a claim is submitted to arbitration under the Annex. If a tribunal is not constituted within this period, the SecretaryGeneral shall appoint the arbitrators not yet appointed in his or her own discretion. The special roster is no longer mentioned, and no reference is made to ICSID’s Panel of Arbitrators. This provision also states that ‘the Secretary-General shall not appoint a national of either the respondent or the Party of the claimant as the presiding arbitrator unless the disputing parties agree otherwise.’ 5 Milanka Kostadinova, ‘Aspects of Procedure for Institution of Proceedings and Establishment of Tribunals in Investment Arbitration’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements (2nd edn, OUP 2018) 114, 134–135. See also Paul C Szasz, ‘A Practical Guide to the Convention on Settlement of Investment Disputes’ (1968) 1 Cornell ILJ 1, 28.

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the constitution of the tribunal, but may have missed the 90-day time limit provided by Art. 38. Therefore, the application of Art. 38 is not necessarily an indication that one of the parties has been uncooperative or negligent.

II. INTERPRETATION A. ‘If the Tribunal shall not have been constituted within 90 days after notice of registration of the request has been dispatched by the Secretary-General in accordance with paragraph (3) of Article 36, or such other period as the parties may agree, . . .’ The time limit of 90 days begins to run on the day the Secretary-General informs the parties of the registration of the request for arbitration in accordance with Art. 36(3) (see Art. 36, paras. 61–63). The parties may extend this limit by agreement at any time before the tribunal’s constitution. Even after the expiry of the 90 days and before one of the parties has made a request to the Chairman to appoint, the parties may agree to extend the time period. The parties may also agree to reduce the 90-day time limit. Even in the absence of such an agreement, the parties may continue their attempts to constitute the tribunal without the Chairman’s intervention beyond the 90 days as long as neither party makes a request to the Chairman to appoint. Therefore, the passage of 90 days after registration merely opens the possibility for either party to initiate the procedure provided by Art. 38. It does not trigger the procedure of Art. 38 automatically. The applicability of Art. 38 is independent of any wrongdoing or negligence by either party. Although the primary purpose of Art. 38 is to overcome the non-cooperation of a recalcitrant party, it may be applied even if both parties are perfectly cooperative (see para. 6 supra). This was the case in SOABI v Senegal, where the parties had initially nominated all three arbitrators, including an arbitrator that had the nationality of the Respondent State and an arbitrator that had the nationality of the Claimant’s controlling shareholder, by mutual agreement within 90 days of the registration. However, the person designated as President of the Tribunal declined the nomination. By that time, 90 days had passed since the registration of the request for arbitration. As the parties were unable to reach agreement on a further nominee, SOABI, basing itself on Art. 38, requested the Chairman to appoint the President, which the Chairman proceeded to do.6 Since no agreement of both parties to this appointment is referenced in the published record, this course of action was problematic. The appointment of the President could not have been made under Art. 38, given that the other arbitrators, who had been jointly appointed by the parties, each had the nationality of one of the parties involved. The appointment of the President could therefore only have been made by agreement of the parties under Art. 39 (see also Art. 39, paras. 31–33). When the thus appointed President resigned from the Tribunal shortly thereafter, the Chairman proceeded to appoint Aron Broches as the new President of the Tribunal. The Decision on Jurisdiction in SOABI records this step as the Chairman ‘appointing’ the arbitrator and ‘designating’ him as President of the Tribunal.7 In addition, the parties’ agreement 6 See SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 4, 5; ibid, Award (25 February 1988) paras 1.04–1.05. 7 ibid, Decision on Jurisdiction (1 August 1984) para 6.

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with the composition of the Tribunal was sought.8 This, the Decision on Jurisdiction states, resulted in each one of the members of the Tribunal being ‘designated’ to serve on the Tribunal pursuant to Art. 39 of the Convention,9 thus remedying any defect that may have existed with the way the Tribunal’s President was appointed, both in the original composition and after the Chairman had proceeded to appoint a replacement for the original President. The deadline of 90 days is sometimes difficult to meet in practice. If there is no prior agreement between the parties on the composition of the tribunal and the method of appointment of the arbitrators, Arbitration Rule 2(3) gives the parties 60 days to reach such an agreement (see Art. 37, paras. 39–41). If they exhaust this time limit, they have 30 days left for the actual process of appointing arbitrators. The appointment of arbitrators involves preliminary consultation with prospective appointees (see Art. 37, para. 17), communication between the parties and notifications to the Secretary-General (see Art. 37, paras. 51–53, 55, 57) as well as acceptance by the persons nominated as arbitrators (see Art. 37, paras. 15, 18). Under Arbitration Rule 5 appointees have 15 days to accept or decline. Even if the parties have agreed previously on the modalities of the tribunal’s constitution, or have reached such agreement quickly after registration, the time limit of 90 days is likely to create problems. In practice, the constitution of a tribunal usually takes considerably more than 90 days (see Art. 37, para. 14). B. ‘. . . at the request of either party and after consulting both parties as far as possible . . .’

1. Initiative 12

13

The Chairman will only proceed to make appointments upon the request of a party. Normally, the request to appoint will come from the party that has submitted the request for arbitration. But the request under Art. 38 may also be made by the respondent or by both parties jointly. The Chairman will not take the initiative under Art. 38. The parties may continue in their efforts to make the appointments without making a request to the Chairman (see para. 8 supra). The Arbitration Rules offer the following clarification: Rule 4 Appointment of Arbitrators by the Chairman of the Administrative Council (1) If the Tribunal is not constituted within 90 days after the dispatch by the Secretary-General of the notice of registration, or such other period as the parties may agree, either party may, through the Secretary-General, address to the Chairman of the Administrative Council a request in writing to appoint the arbitrator or arbitrators not yet appointed and to designate an arbitrator to be the President of the Tribunal. (2) The provision of paragraph (1) shall apply mutatis mutandis in the event that the parties have agreed that the arbitrators shall elect the President of the Tribunal and they fail to do so.

8 ibid para 7.

9 ibid.

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(3) The Secretary-General shall forthwith send a copy of the request to the other party. (4) The Chairman shall use his best efforts to comply with that request within 30 days after its receipt. Before he proceeds to make an appointment or designation, with due regard to Articles 38 and 40(1) of the Convention, he shall consult both parties as far as possible. (5) The Secretary-General shall promptly notify the parties of any appointment or designation made by the Chairman.10

The request under Art. 38 is directed to the Chairman, but it must be made through the Secretary-General.11 The request has to contain precise information on any agreement concerning the composition of the tribunal and the appointment of arbitrators. If the parties have not reached such an agreement, the Chairman will proceed on the basis of the formula contained in Art. 37(2)(b). The request must also contain precise information on the appointment or appointments already made.

14

2. Consultation The Chairman must consult both parties as far as possible. A clause providing for consultation with the parties was contained in the earlier drafts to the Convention. It was dropped at one point, but later restored, all with very little discussion (History, Vol. I, p. 180; Vol. II, pp. 108, 330, 797–798). The purpose of this rule is to avoid appointments that are objectionable to one or both of the parties. Theoretically, the Chairman is free to disregard objections by a party. But this would be difficult in practice unless the objections are obviously unreasonable.12 The obligation to consult both parties extends to any arbitrators not yet appointed. It is not limited to the appointment of the arbitrator or arbitrators who should have been appointed by agreement of the parties. This has a curious side effect: if a party fails to appoint an arbitrator that it is entitled to nominate unilaterally, the other party gains an additional procedural right. It will be consulted on the appointment of an arbitrator whom the party that has failed to act could have appointed alone and without consultation. Consultations with the parties may be held orally or in writing. The Chairman must hold these consultations only as far as possible. In particular, he or she will not be held up by an unresponsive party. While the Chairman must make an effort to consult, failure to elicit a constructive response from a party will not affect his or her power to make the appointment.13

10 Arbitration (Additional Facility) Rules (2006) Art. 10 offer a similar procedure. 11 See also Administrative and Financial Regulations (September 1984) Regulation 24(1), (1993) 1 ICSID Reports 35, 46. 12 Aron Broches, ‘The Experience of the International Centre for Settlement of Investment Disputes’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West Group 1985) 75, 93; Jan Paulsson, ‘ICSID’s Achievements and Prospects’ (1991) 6 ICSID Rev 380, 395; Ibrahim FI Shihata and Antonio R Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 312. 13 See also Note G to Arbitration Rule 4 of 1968, (1993) 1 ICSID Reports 72.

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C. ‘. . . the Chairman shall . . . appoint the arbitrator or arbitrators not yet appointed.’

1. Obligation to Appoint 18

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The Chairman is under an obligation to make appointments if so requested. The Convention’s wording (‘shall . . . appoint’) leaves no doubt in this regard. The Chairman does not have the discretion not to appoint.14 The Chairman, in making appointments, acts at the recommendation of the SecretaryGeneral.15 Under Art. 5, the President of the International Bank for Reconstruction and Development is ex officio Chairman of ICSID’s Administrative Council. The SecretaryGeneral of ICSID is in the best position to identify appropriate individuals who may serve as arbitrators. The Chairman is to use his or her best efforts to make any appointments within 30 days of receipt of the request.16 An appointment by the Chairman is subject to acceptance by the appointee. It is for the Secretary-General to seek this acceptance (Arbitration Rule 5(2)) (see Art. 37, para. 15). The Secretary-General has to inform the parties of appointments made by the Chairman.

2. Appointments and Designations 22

The substance of the Chairman’s obligation to appoint depends on the composition of the tribunal and on appointments already made. He or she may have to appoint a sole arbitrator. If the tribunal is to consist of three arbitrators, he or she may have to appoint a third arbitrator, if the parties have each appointed one arbitrator, but have failed to agree on the third. A similar situation arises if the two party-appointed arbitrators are charged with the task of appointing the third arbitrator, but have been unable to agree on the person. It is possible, but unlikely, that the parties have agreed on a person as president, but that one party has failed to appoint an arbitrator.

14 See also Pierre Lalive, ‘Aspects procéduraux de l’arbitrage entre un Etat et un investisseur étranger dans la Convention du 18 mars 1965 pour le règlement des différends relatifs aux investissements entre Etats et ressortissants d’autres Etats’ in Centre de Recherche sur le Droit des Marchés et des Investissements Internationaux de la Faculté de Droit et de Sciences Economiques de Dijon (ed), Investissements étrangers et arbitrage entre Etats et personnes privées; La Convention BIRD du 18 mars 1965 (Pedone 1969) 111, 115; Elihu Lauterpacht, ‘The World Bank Convention on the Settlement of International Investment Disputes’ in Recueil d’études de droit international en hommage à Paul Guggenheim (Faculté de Droit de l’Université de Genève and Institut Universitaire de Hautes Études Internationales 1968) 642, 647–648. 15 See Alejandro A Escobar, ‘Three Aspects of ICSID’s Administration of Arbitration Proceedings’ (1997) 14(2) News from ICSID 4, 6; Parra (n 2) 307–308. 16 Earlier versions of Arbitration Rule 4 provided for a mandatory deadline of 30 days for appointments by the Chairman. See Rule 4(2) (as in force between 1968 and 1984): ‘The Chairman shall comply – with due regard to Articles 38 and 40(1) of the Convention – with that request within 30 days after its receipt, or such longer period as the parties may agree. Before he proceeds to make appointments or a designation, he shall consult both parties as far as possible.’ Rule 4(4) (as in force between 1984 and 2002): ‘The Chairman shall, with due regard to Articles 38 and 40 (1) of the Convention, and after consulting both parties as far as possible, comply with that request within 30 days after its receipt.’ Rule 4(4) (as in force between 2003 and 2006): ‘The Chairman shall use his best efforts to comply with that request within 30 days after its receipt.’

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If only one party has made an appointment and there is no agreement on the president, the Chairman will have to make two appointments. One in lieu of the unilateral appointment by the party that has failed to act and the other in the absence of an agreement on the third arbitrator. In that case, the Chairman also has to designate one of the arbitrators appointed by him or her as president of the tribunal. A designation as president is not necessary if both parties have made their appointments but no agreement has been reached on the third. In this case, the third arbitrator appointed by the Chairman will be the president. In making appointments, the Chairman is more limited in his or her choice than the parties. Under the second sentence of Art. 38 he or she may not appoint a national or conational of one of the parties (see paras. 28–30 infra). In addition, under Art. 40(1), he or she is restricted to persons who are on the Panel of Arbitrators (see Art. 40, paras. 9–13). In actual practice, the Chairman has frequently acted under Art. 38.17 In most cases he was charged with appointing only the tribunal’s president.18 In other cases, the Respondent State had failed to make its appointment and the Chairman appointed an arbitrator on behalf of the Respondent.19 On occasion, the Respondent had not appointed an arbitrator and there was no agreement on the president. Therefore, the Chairman had to make two appointments and one of the appointees was designated president by the Chairman.20 There are also a few cases where the Chairman made the appointment on the side of the Claimant.21 In rare cases, the Chairman made the appointment of all arbitrators on a tribunal and designated one of them as president.22 In making appointments to tribunals, the Chairman regularly pays attention to both the specificities of the underlying dispute and possible systemic implications, in particular as regards consistency in resolving disputes. Thus, in three closely related cases against Jamaica, the Claimants appointed the same person as arbitrator. After Jamaica had failed to act for over 90 days from registration, the Claimants requested the Chairman to appoint, for each proceeding, two arbitrators and to designate one of them as President of each Tribunal. The Chairman, after consulting with the parties,

17 Shihata and Parra (n 12) 312. 18 For a full review of all ICSID cases and how tribunals were appointed in each case, see ICSID, ‘Pending Cases’ accessed 10 January 2021. 19 For examples of cases where the Chairman made the appointment on the respondent State’s side, see AIG v Kazakhstan, Award (7 October 2003) paras 5.7–5.9; CIT Group v Argentina (registered 27 February 2004, discontinued 12 May 2009 pursuant to Arbitration Rule 44); Chevron v Bangladesh (registered 30 June 2006); Occidental v Ecuador, Award (5 October 2012) para 11; Meerapfel v Central African Republic, Award (Excerpts) (12 May 2011) para 6 (in French); Shell v Nigeria (registered 26 July 2007, discontinued 1 August 2011 pursuant to Arbitration Rule 43(1)); Repsol and others v Ecuador and PetroEcuador, Order on Discontinuance (9 February 2011) para 6; Pan American v Bolivia (registered 12 April 2010, discontinued 24 February 2015 pursuant to Arbitration Rule 43(1)). See also Sistem v Kyrgyzstan (AF), Award (9 September 2009) paras 6, 7. 20 For examples, see AGIP v Congo, Award (30 November 1979) para 3; Tradex v Albania, Decision on Jurisdiction (24 December 1996) (2002) 5 ICSID Reports 43, 47–48; AMT v Zaire, Award (21 February 1997) paras 2.01–2.03; Agility v Pakistan (registered 28 March 2011, not public). 21 For examples, see Roussalis v Romania, Award (7 December 2011) para 16; Toto v Lebanon, Award (7 June 2012) para 23. 22 See Phoenix Action v Czech Republic, Award (15 April 2009) para 10.

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appointed the same two persons as arbitrators for all three tribunals and designated one of them as president for each tribunal.23 Similarly, in several instances in disputes against Argentina, the same individual was appointed as president of the tribunal in closely related cases, presumably also in order to avoid contradictions in outcome.24 When a party asks ICSID to appoint a sole arbitrator or a tribunal president, ICSID has adopted a ballot procedure whereby it proposes a list of several candidates and requests the parties to indicate the candidates it would agree to as president of the tribunal (a party is not required to share its ballot with the other party).25 If the parties agree on a candidate from the ballot, that person will be deemed to have been appointed by agreement of the parties. If the parties agree on more than one proposed candidate, usually ICSID selects one of them and informs the parties of the selection. A successful ballot is considered an appointment by agreement of the parties under the established method of constituting the tribunal. If the parties do not agree on a ballot candidate, the Chairman appoints a person from the ICSID Panel of Arbitrators, after consultation with the parties.26 If the ballot procedure fails, the arbitrator is chosen from the ICSID Panel of Arbitrators and is appointed pursuant to Arts. 30 and 38, following consultation with the parties.27 In Additional Facility proceedings, the Chairman of the Administrative Council may also appoint candidates who are not members of the ICSID Panel of Arbitrators.28 D. ‘Arbitrators appointed by the Chairman pursuant to this Article shall not be nationals of the Contracting State party to the dispute or of the Contracting State whose national is a party to the dispute.’

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The nationality of arbitrators was the subject of much debate during the Convention’s preparation (see Art. 39, paras. 1, 2). The resulting compromise is reflected in most part in Art. 39. With regard to appointments made by the Chairman, the opinion prevailed that national arbitrators should be avoided under all circumstances (History, Vol. I, pp. 180–181; Vol. II, pp. 265, 266, 513, 789, 797, 799). The purpose is to avoid even

23 Alcoa Minerals v Jamaica, Decision on Jurisdiction (6 July 1975) (1979) 4 YB Comm Arb 206, 207; Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 3. See also Georges R Delaume, ‘ICSID Arbitration: Practical Considerations’ (1984) 1 J Int’l Arb 101, 123; Georges R Delaume, ‘ICSID Arbitration Proceedings: Practical Aspects’ (1985) 5 Pace LR 563, 572–573; Georges R Delaume, Transnational Contracts, Applicable Law and Settlement of Disputes (Oceana 1990) ch XV, 51–52. 24 This occurred eg in the two Suez arbitrations: see Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) para 6; Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) para 6. See also Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 5 and Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) para 4, where the (acting) Secretary-General of ICSID made the appointment of the respective president of the tribunals, as had been agreed by the parties. 25 For a description of the two-step system adopted by ICSID, see Meg Kinnear, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1(1) ABA SIL International Arbitration Committee Newsletter 37; Eloïse Obadia and Frauke Nitschke, ‘Institutional Arbitration and the Role of the Secretariat’ in Chiara Giorgetti (ed), Litigating International Investment Disputes (Brill 2014) 80, 112. 26 See eg ICSID, ‘Annual Report 2010’ (2010) 27. See also Kostadinova (n 5) 134–135; Obadia and Nitschke (n 25) 112. 27 In 2013, the success rate of the ballot procedure was about 33 percent and the process took about six weeks from the date when the request was received from the ICSID Secretariat and the date of appointment of the arbitrator. See Obadia and Nitschke (n 25) 112–113. 28 ibid 113.

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the semblance of a lack of objectivity.29 The prohibition of national arbitrators does not have a parallel in the otherwise corresponding Art. 30 dealing with conciliators. The prohibition against appointing arbitrators who have the nationality of a party or are co-nationals of a party does not only apply to sole arbitrators or to ‘third arbitrators’ who would preside over the tribunal. This prohibition also applies to arbitrators who are to be appointed primarily by unilateral decision of one of the parties. If a party has failed to make the unilateral appointment to which it was entitled and the Chairman is called upon to make the appointment instead, he or she does not have the limited flexibility granted to the parties by the first sentence of Art. 39, but rather must appoint a national of a third State. In addition, he or she must appoint a person from the Panel of Arbitrators in accordance with Art. 40(1). The exclusion of national arbitrators applies only if the appointment by the Chairman is made ‘pursuant to this Article.’ It does not apply if the Chairman acts as appointing authority under an agreement between the parties. In Mobil Oil v New Zealand, the arbitration clause in the contract between the parties contained the following provision on the constitution of the Tribunal:

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7.6 An Arbitral Tribunal to be constituted in relation to a dispute shall consist of three arbitrators, one of whom shall be appointed by each party to the dispute and the third, who shall be the president of the Arbitral Tribunal, shall be a New Zealand national appointed by agreement of such parties, but failing agreement shall be a New Zealand national appointed by the chairman, as that term is described in the Convention.30

This clause is not in conflict with Art. 38. An appointment by the Chairman under this clause is not pursuant to Art. 38, but falls under Art. 37(2)(a) (see also Art. 40, para. 9).

29 See also Arbitration (Additional Facility) Rules 2006 Art. 7(2). 30 See Attorney-General v Mobil Oil NZ Ltd, New Zealand High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117, 123.

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Article 39 The majority of the arbitrators shall be nationals of States other than the Contracting State party to the dispute and the Contracting State whose national is a party to the dispute; provided, however, that the foregoing provisions of this Article shall not apply if the sole arbitrator or each individual member of the Tribunal has been appointed by agreement of the parties.

OUTLINE Paragraphs I. INTRODUCTION 1–12 II. INTERPRETATION 13–35 A. ‘The majority of the arbitrators shall be nationals of States other than the Contracting State party to the dispute and the Contracting State whose national is a party to the dispute;’ 13–24 B. ‘. . . provided, however, that the foregoing provisions of this Article shall not apply if the sole arbitrator or each individual member of the Tribunal has been appointed by agreement of the parties.’ 25–35

I. INTRODUCTION 1

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The drafts leading to what eventually became Art. 39 were the subject of much discussion during the Convention’s drafting. The Preliminary Draft sought to exclude nationals or co-nationals of parties from appointment as arbitrators without exception (History, Vol. I, p. 182). The debates on this provision showed opposing views. Some delegates were in agreement with the exclusion of national arbitrators in order to avoid any lack of impartiality or even semblance thereof. Another group thought that arbitrators possessing the nationality or co-nationality of the parties were useful sources of information on the law and position of the parties and would inspire the parties’ confidence in the arbitration process (History, Vol. II, pp. 265, 266, 295, 306, 329, 386, 387, 416, 417, 487, 489, 510, 511, 512, 569). The First Draft tightened the provision by also excluding persons who had been designated to the Panel of Arbitrators by either of the two States. After further debate (History, Vol. II, pp. 663, 789), several votes were taken. These showed a majority against the total exclusion of national arbitrators. There was also a majority for the proposition that national arbitrators should never constitute a majority on a tribunal. Another vote approved an exception where the parties were in agreement on the person of each arbitrator (ibid., p. 789). Subsequent proposals to remove most of the restrictions on national arbitrators were defeated (ibid., pp. 796–797). The provision was adopted subject to certain drafting adjustments (History, Vol. I, p. 182; Vol. II, pp. 862, 938, 947).

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Mr. Broches explained that the provision was intended ‘to avoid a situation in which the third arbitrator, as the only one appointed by a neutral party, might find himself in the position of a sole arbitrator in having to maintain a balance between the two other arbitrators who were more inclined to act as advocates for the parties appointing them’ (History, Vol. II, p. 983). In the case of a tribunal consisting of five persons, two could be national arbitrators appointed by each party since there would be a majority not linked by nationality to either party (ibid.).1 The provision, as eventually adopted, attempts to strike a compromise in two ways. First, national arbitrators are to be avoided, in principle, but are allowed if they constitute only a minority on the tribunal. This would normally be the case in a tribunal of five or more arbitrators where the parties would be allowed one national arbitrator each. Second, the principle of freedom of choice (see Art. 37, para. 3) accounts for the power of the parties to override the prohibition of national arbitrators, if they agree on the identity of each arbitrator. The exclusion of national arbitrators is absolute only in case of an appointment by the Chairman under Art. 38 (see Art. 38, paras. 28–31). Art. 39 does not have a parallel in the provisions on the constitution of a conciliation commission (see Arts. 29–31). During the Convention’s drafting, a conscious decision was made to treat the composition of arbitral tribunals and of conciliation commissions differently on this point (History, Vol. II, pp. 266, 329, 487, 510–511, 569). On the other hand, Art. 52(3) contains very strict rules concerning the exclusion of persons from ad hoc committees, including an absolute exclusion of nationals or co-nationals of parties to the dispute (see Art. 52, paras. 581–585). The provision on the exclusion of national arbitrators is atypical for international arbitration. Other documents governing international arbitration contain much weaker provisions. They merely mandate that nationality be taken into account in the appointment of arbitrators.2 However, international investment agreements increasingly include more specific and detailed rules concerning the nationality of the arbitrators. For instance, the Agreement on Investment under the Framework on Comprehensive Economic Cooperation between ASEAN and India not only requires the arbitrators to have a different nationality from the disputing parties, but also not to have their usual place of residence in the territory of the investor’s home State or the host State.3 Under the bilateral investment treaty between Israel and Myanmar, arbitrators are required to 1 See also Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 662; Aron Broches, ‘The Experience of the International Centre for Settlement of Investment Disputes’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West 1985) 75, 94. 2 See UNCITRAL Arbitration Rules (2013) Art. 6(7); UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Art. 11(1)(5); ICC Arbitration Rules (2021) Art. 13(5) (providing that a sole arbitrator or president of a tribunal may have the nationality of one of the parties, if neither of the parties objects). Art. 17(6) of the SCC Arbitration Rules (2017) provides that, if the parties have different nationalities, the sole arbitrator or the president of the tribunal shall be of a different nationality than the parties, unless the parties have agreed otherwise or the Board otherwise deems it appropriate. Under Art. 17(7) of the SCC Arbitration Rules, the SCC Board will also consider nationality of the parties as one of the factors to be taken into account when appointing arbitrators, together with the nature and circumstances of the dispute, the applicable law, the seat, and the language of the arbitration. 3 ASEAN–India Investment Agreement (signed 12 November 2014, not yet in force) Art. 20(11)(b). Similarly, Nigeria–Singapore BIT (signed 4 November 2016, not yet in force) Art. 14(1).

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be nationals of States that have diplomatic relations with both Israel and Myanmar.4 As will be seen below (see paras. 27–29 infra), the North American Free Trade Agreement (NAFTA), the United States–Mexico–Canada Agreement (USMCA), and other treaties contain language facilitating the appointment of national arbitrators. The Report of the Executive Directors on the Convention offers the following explanation on Art. 39: 36. . . . While the Convention does not restrict the appointment of conciliators with reference to nationality, Article 39 lays down the rule that the majority of the members of an Arbitral Tribunal should not be nationals either of the State party to the dispute or of the State whose national is a party to the dispute. This rule is likely to have the effect of excluding persons having these nationalities from serving on a Tribunal composed of not more than three members. However, the rule will not apply where each and every arbitrator on the Tribunal has been appointed by agreement of the parties.5

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There are good practical reasons for excluding or restricting the appointment of national arbitrators. National arbitrators may be expected to side with their countries of nationality or their co-nationals. In order to achieve a majority, the third arbitrator will have no choice, but to side with one of the two national arbitrators (see Art. 48, paras. 17–21).6 The resulting decision will not necessarily represent the best objective outcome. Even if a compromise can be reached as to the award’s dispositif, the drafting of the reasons can be made extremely difficult by strongly held divergent views.7 In extreme cases, this may lead to contradictory reasons, which in turn can constitute a ground for annulment (see Art. 52, paras. 485–504). Unlike certain other arbitration systems,8 ICSID arbitration does not allow a decision by the presiding arbitrator alone, if no majority can be formed (see Art. 48, paras. 18, 21). The application of Art. 39 requires knowledge of the investor’s nationality. Institution Rule 2(1)(d) requires precise information concerning the investor’s nationality in the request for arbitration (see Art. 36, paras. 25, 27). But there may still be problems in the proper identification of the investor’s nationality (see Art. 25, paras. 598–613, 1116–1261). This is particularly so, if the parties have agreed under Art. 25(2)(b) to treat a national of the host State as a national of another Contracting State because of foreign control (see Art. 25, paras. 1262–1438). In a situation of this kind it is advisable, in the

4 Israel–Myanmar BIT (signed 5 October 2014, not yet in force) Art. 8(5). 5 (1993) 1 ICSID Reports 23, 30. 6 Rudolf Dolzer, ‘Dispute Settlement Mechanisms in the IMF, the World Bank and MIGA’ in Ernst-Ulrich Petersmann and Günther Jaenicke (eds), Adjudication of International Trade Disputes in International and National Economic Law (Fribourg UP 1992) 139, 147–148. 7 See also W Michael Reisman, ‘The Supervisory Jurisdiction of the International Court of Justice: International Arbitration and International Adjudication’ (1996) 258 RdC 11, 291–296. 8 See ICC Arbitration Rules (2021) Art. 32(1) provides: ‘If there is no majority, the award shall be made by the president of the Arbitral Tribunal alone.’ See also UNCITRAL Arbitration Rules (2013) Art. 33(2), dealing with questions of procedure only. In the three Brcko Awards of 1997, 1998, and 1999, under the UNCITRAL Arbitration Rules, which concerned a territorial dispute between the Federation of Bosnia and Herzegovina and Republika Srpska, the decision was made by the Presiding Arbitrator alone. See (1997) 36 ILM 396, (1999) 38 ILM 534 and Christoph Schreuer, ‘The Brcko Award of 14 February 1997’ (1998) 11 Leiden JIL 71, 73–74.

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application of Art. 39 and of the last sentence of Art. 38, to avoid the appointment of nationals of States that may turn out to be linked to the investor through nationality or control (see Art. 25, paras. 1439–1445). Non-compliance with the nationality requirements for arbitrators may have several consequences. Under Art. 57, a party may propose the disqualification of an arbitrator if he or she was ineligible for appointment under Art. 39 or the last sentence of Art. 38. In addition, the resulting award can be subject to annulment under Art. 52(1)(a) if the tribunal was not properly constituted (see Art. 52, paras. 123–147). In the case of arbitrators who have dual or multiple nationalities, the more flexible rule would be to look only at the dominant nationality. But in view of the possible consequences arising from the improper constitution of a tribunal it will be wiser not to appoint a person even if a non-dominant nationality is excluded by the Convention (see Art. 52, para. 128). Neither the Convention nor the Arbitration Rules contain any rules concerning a nationality of arbitrators not related to the two parties. In particular, there is no requirement that the arbitrators represent different forms of civilization or different legal systems.9 Nor is there a rule of diversity requiring arbitrators on one tribunal to be of different nationalities.10 In fact, there have been ICSID tribunals consisting of three arbitrators of the same nationality.11 For instance, in IBM v Ecuador, the parties agreed that the Tribunal be composed exclusively of Ecuadorian nationals.12 There has been some concern about the insufficient representation of arbitrators from developing countries on ICSID’s tribunals.13 But this situation has considerably improved.14

9 Cf Statute of the International Court of Justice (adopted 26 June 1945, entered into force 24 October 1945) USTS 993, Art. 9. 10 ibid Art. 3(1). 11 Gardella v Côte d’Ivoire (1993) 1 ICSID Reports xxi; MINE v Guinea (1997) 4 ICSID Reports lix; Occidental v Pakistan (registered 7 October 1987, discontinued 27 January 1989 pursuant to Arbitration Rule 44); Astaldi v Honduras I, Award (19 October 2000); IBM v Ecuador, Decision on Jurisdiction (22 December 2003) para 4; Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Award (7 March 2008); Alyafei v Jordan, Order on Discontinuance (11 July 2016). See also Ahmed S El-Kosheri, ‘ICSID Arbitration and Developing Countries’ (1993) 8 ICSID Rev 104, 111–112. 12 IBM v Ecuador, Decision on Jurisdiction (22 December 2003) para 4. 13 See eg Ibrahim FI Shihata, ‘Obstacles Facing ICSID’s Proceedings and International Arbitration in General’ (1986) 3(1) News from ICSID 8, 9; Bertrand P Marchais, ‘Composition of ICSID Tribunals’ (1987) 4(2) News from ICSID 5, 6–7; Augustus A Agyemang, ‘African States and ICSID Arbitration’ (1988) 21 Comp & Int’l LJ Southern Africa 177, 183 ff; Moshe Hirsch, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Springer 1993) 29–30; John A Westberg, ‘Applicable Law, Expropriatory Takings and Compensation in Cases of Expropriation, ICSID and Iran– United States Claims Tribunal Case Law Compared’ (1993) 8 ICSID Rev 1, 3–4; Ibrahim FI Shihata and Antonio R Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 311–312; Andrea K Bjorklund and others, ‘The Diversity Deficit in International Investment Arbitration’ (2020) 21 JWIT 410. Cf also Jan Paulsson, ‘Moral Hazard in International Dispute Resolution’ (2010) 25 ICSID Rev 339, 351, 353. 14 See ICSID, ‘The ICSID Caseload – Statistics (Issue 2020-1)’ (2020) pt I, s 9 and pt II, s 7; ICSID, ‘The ICSID Caseload – Statistics: Special Focus – Africa’ (May 2017); ICSID, ‘The ICSID Caseload – Statistics: Special Focus: South & East Asia & the Pacific’ (June 2019) all available at accessed 10 January 2021; ICSID, ‘Annual Report 2020’ (2020) 26–28; Meg Kinnear, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1(1) ABA SIL Int’l Arb Committee Newsletter 35–38.

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II. INTERPRETATION A. ‘The majority of the arbitrators shall be nationals of States other than the Contracting State party to the dispute and the Contracting State whose national is a party to the dispute;’ 13

14

Art. 39 does not exclude national arbitrators. It merely states that they must not form a majority. In a tribunal of three members this means that one arbitrator may be a national or co-national of a party, but not two. This could lead to the unsatisfactory result that the party acting first in the unilateral appointment of an arbitrator can appoint a national arbitrator thereby precluding the other party from doing the same. In order to forestall this result, Arbitration Rule 1(3) provides: (3) The majority of the arbitrators shall be nationals of States other than the State party to the dispute and of the State whose national is a party to the dispute, unless the sole arbitrator or each individual member of the Tribunal is appointed by agreement of the parties. Where the Tribunal is to consist of three members, a national of either of these States may not be appointed as an arbitrator by a party without the agreement of the other party to the dispute. Where the Tribunal is to consist of five or more members, nationals of either of these States may not be appointed as arbitrators by a party if appointment by the other party of the same number of arbitrators of either of these nationalities would result in a majority of arbitrators of these nationalities.15

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Therefore, if the tribunal is to consist of three arbitrators, a national or co-national of one of the parties may be appointed by a party only if the other party agrees thereto. The party agreeing to the appointment of a national arbitrator by the other party will be aware of the fact that by doing so it forgoes the possibility of doing the same. Once one national arbitrator is appointed, the appointment of another national arbitrator would create a majority of national arbitrators on the tribunal which is prohibited by the first sentence of Art. 39. The only exception to this result is the appointment of all three arbitrators by agreement under the second sentence of Art. 39. The need to obtain the agreement of the other party to the appointment of a national arbitrator applies even after the party making the first appointment has appointed a national of a third State. In that situation the appointment of a national arbitrator by the party making the second appointment would not create a majority of national arbitrators on the tribunal. But it would give an unfair advantage to the party making the second appointment. Therefore, Arbitration Rule 1(3), in requiring agreement on the appointment of a national arbitrator, does not distinguish between the first and the second appointment.16 If the tribunal is to consist of five arbitrators, both parties may appoint one national arbitrator each. The two national arbitrators would not be a majority in a tribunal of five.17

15 See also Arbitration (Additional Facility) Rules (2006) Art. 7(1). 16 In Scimitar v Bangladesh, Award (4 May 1994), the Respondent appointed as its arbitrator a person who, as a British national, was technically a co-national of the British Virgin Island Claimant. At ICSID’s insistence, the Respondent sought and obtained the Claimant’s agreement to the appointment. 17 See Note G to Arbitration Rule 1 of 1968, (1993) 1 ICSID Reports 67. See also Broches, ‘Convention’ (n 1) 662–663; Chittharanjan F Amerasinghe, ‘Submissions to the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1973/1974) 5 J Mar L & Comm 211, 237–238.

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Arbitration Rule 1(3) operates regardless of whether there was an advance agreement on the constitution of the tribunal (see Art. 37, paras. 30–38) or whether an ad hoc agreement was reached after the registration of the request for arbitration (see Art. 37, paras. 39–47). If Art. 37(2)(b) is applied (see Art. 37, paras. 48–58), Arbitration Rule 3(1) contains further restrictions on the nationality of arbitrators (see Art. 37, para. 51).18 It provides that neither of the two party appointed arbitrators may have the same nationality or be a national of either party. Therefore, under Arbitration Rule 3(1) the prohibition against the appointment of a national arbitrator by a party applies regardless of an agreement. Arbitration Rule 1(3) does not preclude the appointment of a national or co-national of one of the parties as the third, presiding arbitrator. But the appointment of a national or co-national of one of the parties as third arbitrator who is to be president of the tribunal is unlikely to arise as a problem. Since the parties must usually agree on this person, either party can prevent such an appointment. If they do agree, there is nothing to stop them from making such an appointment.19 If the third arbitrator is to be appointed by agreement of the arbitrators appointed by the parties (see Art. 37, paras. 33, 34), two arbitrators who have the nationalities of third States could, theoretically, appoint a third arbitrator who is a national or co-national of one of the parties. If the Chairman acts as appointing authority under Art. 38, he or she may not select a national or co-national of one of the parties under any circumstances (see Art. 38, paras. 28–31). But if he or she acts as appointing authority under an agreement of the parties rather than under Art. 38, the exclusion of a national arbitrator does not apply.20 If the parties have agreed on another neutral official as appointing authority (see Art. 37, paras. 31–32, 36–38), it is possible that a person will be appointed as the presiding arbitrator who has the nationality or co-nationality of one of the parties. It is obvious that such a choice will generally be imprudent and should only be made in exceptional circumstances. Whereas Art. 39 is mandatory, the Arbitration Rules are subject to modification by agreement of the parties (see Art. 44, paras. 15–36). In particular, the parties are free to depart from Arbitration Rules 1(3) and 3(1) by mutual agreement. This means that they can agree in advance that in a tribunal of three arbitrators one, but only one, party shall be permitted to appoint a national or co-national as arbitrator. In SPP v Egypt, Egypt designated an Egyptian national in accordance with Arbitration Rule 3. SPP informed the Centre ‘that it did not object to the nationality of the arbitrator named by Egypt, as it might have done under Arbitration Rule 3(1)(a)(i)’ (see Art. 37, para. 51).21 SPP designated a national of a third State as arbitrator and the parties agreed

18 See Note H to Arbitration Rule 1 of 1968, (1993) 1 ICSID Reports 67. 19 In Mobil Oil v New Zealand, the arbitration clause in a contract between the parties provided for appointment by agreement of the parties of the third arbitrator who was to be a New Zealand national. See Attorney-General v Mobil Oil NZ Ltd, New Zealand High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 123. 20 See ibid. In Mobil Oil v New Zealand, the arbitration clause provided that, failing agreement between the parties on the appointment of the third arbitrator, the Chairman was to appoint a New Zealand national as third arbitrator. 21 Arguably, ICSID should have raised the issue of nationality of the arbitrator before the Claimant’s communication.

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on the person of a national of a third State as President of the Tribunal. All three persons accepted their appointments.22 In Olguín v Paraguay, Paraguay nominated a Paraguayan national as arbitrator. The ensuing developments are reported as follows: The Centre immediately informed the Republic of Paraguay that, pursuant to Article 39 of the ICSID Convention and Rule 1(3) of the Rules of Procedure for Arbitration Proceedings (Arbitration Rules), in cases where the Arbitral Tribunal has been established with three arbitrators, the appointment as arbitrator by one of the parties of a national of that party’s State, or of a State whose national is a party to the dispute, requires the consent of the other party. As the Claimant had not given such consent, Paraguay was prevented from appointing Mr Villalba Zaldivar as arbitrator. Consequently, on 25 November 1998, the Republic of Paraguay appointed Justice Francisco Rezek, a Brazilian national, as arbitrator for the present case.23

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Also in Olguín v Paraguay, the Claimant appointed a national of the United States as arbitrator. After the constitution of the Tribunal, the Respondent challenged the appointment of the arbitrator because the Claimant, as was unknown to ICSID before the challenge, held dual Peruvian and United States nationality. Therefore, the Claimant was prevented from appointing a United States national as arbitrator. The arbitrator tendered his resignation and was replaced by a national of Guatemala.24 In Urbaser v Argentina, the Parties agreed to waive the nationality requirement under Art. 39 of the Convention and endorsed the formula provided for in Art. 37(2)(b) with regard to the constitution of the Tribunal, namely that each party appoint an arbitrator and that both parties agree on the appointment of the presiding arbitrator.25 However, given that the co-arbitrators proposed by the Parties had the nationality of the Claimants and the Respondent, respectively, the Centre reminded the Parties that agreement of all Parties was required to confirm the appointments under Art. 39. In the absence of an agreement between the Parties, no party could designate an arbitrator having the nationality of either Party. The Parties eventually had to appoint persons of neutral nationality as they did not reach agreement on this matter. B. ‘. . . provided, however, that the foregoing provisions of this Article shall not apply if the sole arbitrator or each individual member of the Tribunal has been appointed by agreement of the parties.’

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The rule that a majority of arbitrators must be nationals of States other than the host State and the State of the investor’s nationality does not apply if the parties agree on the appointment of each member of the tribunal (see also para. 4 supra). This provision does not refer to a general agreement on the composition of a tribunal and the method of appointment (see Art. 37, paras. 28–47). Rather, it relates to the actual appointment of individual arbitrators who must be identified by name. Therefore, it is possible to apply

22 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 7; ibid, Award (20 May 1992) para 7. 23 Olguín v Paraguay, Decision on Jurisdiction (8 August 2000) paras 8, 9; ibid, Award (26 July 2001) paras 11, 12. 24 ibid, Decision on Jurisdiction (8 August 2000) paras 12, 13; ibid, Award (26 July 2001) paras 15, 16. 25 Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 3–11.

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this provision even where Art. 37(2)(b) is applied since the parties have not reached an agreement on the composition of the tribunal. The requirement that members of the tribunal who have the same nationality as one of the parties must be appointed by agreement of the parties applies not just to the nationals or co-nationals concerned. In such a situation, every single arbitrator that is to be a member of the tribunal, even if he or she is a national of a third State, must be appointed by agreement. Therefore, it is not possible to charge two national arbitrators who have been appointed by agreement of the parties with the task of appointing the third arbitrator. Instead, in this kind of situation, the third arbitrator must also be appointed by agreement of the parties. For example, if, in a tribunal of three members, one party has appointed unilaterally a national of a third State, this appointment must be agreed to by the other party, if the parties wish to jointly appoint two further arbitrators who are nationals or co-nationals of the parties. Similarly, the parties may not agree on the appointment of a presiding arbitrator and grant each other the right to appoint national arbitrators. Rather, an agreement of the parties on the appointment of each individual arbitrator is necessary. The agreement must identify the appointees by name. Advance agreement to the selection by the other party of a national arbitrator would not suffice. The NAFTA attempts to preserve the right to appoint national arbitrators in the following terms:

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Article 1125: Agreement to Appointment of Arbitrators For purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator based on Article 1124(3) or on a ground other than nationality: (a) the disputing Party agrees to the appointment of each individual member of a Tribunal established under the ICSID Convention or the ICSID Additional Facility Rules; (b) a disputing investor referred to in Article 1116 may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the disputing investor agrees in writing to the appointment of each individual member of the Tribunal; and (c) a disputing investor referred to in Article 1117(1) may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the disputing investor and the enterprise agree in writing to the appointment of each individual member of the Tribunal.26

This provision merely foresees the appointment of each arbitrator by agreement. It neither constitutes nor makes superfluous a specific agreement on each arbitrator under Art. 39 of the ICSID Convention.27 Art. 9.22(4) the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is crafted in the same terms. It reads as follows:

26 North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, 644. 27 The United States–Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020), replacing the NAFTA, contains a similar provision in Art. 14.D.

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schreuer’s commentary on the icsid convention Article 9.22: Selection of Arbitrators ... 4. For the purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator on a ground other than nationality: (a) the respondent agrees to the appointment of each individual member of a tribunal established under the ICSID Convention or the ICSID Additional Facility Rules; (b) a claimant referred to in Article 9.19.1(a) (Submission of a Claim to Arbitration) may submit a claim to arbitration under this Section, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant agrees in writing to the appointment of each individual member of the tribunal; and (c) a claimant referred to in Article 9.19.1(b) (Submission of a Claim to Arbitration) may submit a claim to arbitration under this Section, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant and the enterprise agree in writing to the appointment of each individual member of the tribunal.28

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The requirement of an appointment by agreement of the parties of every single arbitrator under Art. 39 also means that an appointment by a neutral official as appointing authority (see Art. 37, paras. 31–32, 36–38) is impermissible. This applies also to the procedure of Art. 38. If the parties appoint two national arbitrators by agreement, but are unable to agree on the third arbitrator, an appointment by the Chairman is not possible. This would be otherwise if the nomination by the Chairman or other appointing authority is confirmed by both parties. In that case, it could be said that the third arbitrator was also appointed by agreement of the parties. In SOABI v Senegal, the Claimant was a company incorporated in the host State, but wholly owned by Flexa, a Panamanian company. Flexa, in turn, was controlled by a Belgian national. Therefore, the relevant nationality of the investor was Belgian (see Art. 25, paras. 1312–1314, 1333, 1352–1353, 1373–1374, 1385). By mutual agreement the parties nominated a Senegalese and a Belgian national as arbitrators. The two persons accepted the appointments. Also by agreement the two parties nominated a Swiss national as third arbitrator and President of the Tribunal. This person declined the nomination. In the absence of agreement on a further nominee, SOABI requested the appointment of a third arbitrator by the Chairman, basing itself on Art. 38. The Chairman nominated another Swiss national as arbitrator and President of the Tribunal who accepted the appointment (see Art. 38, paras. 9, 10). The published records do not reveal an agreed confirmation by the parties of the Chairman’s appointment of the President. If such confirmation was indeed lacking, the Tribunal would have been improperly constituted, because the parties’ agreement was required under Art. 39. But the President of the Tribunal resigned only a few weeks after his appointment. The proceedings were suspended and the Chairman nominated a

28 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into force 30 December 2018). The agreement incorporates the provisions of the Trans-Pacific Partnership (TPP) (signed 4 February 2016) from which the United States withdrew in January 2017.

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national of the Netherlands as arbitrator and designated him President of the Tribunal. The new President accepted the appointment.29 Shortly thereafter, the parties agreed to the composition of the Tribunal. The Tribunal pointed out that ‘[e]ach member of the Tribunal was thus designated in accordance with Article 39 of the Convention.’30 At a later stage of the proceedings, the Belgian arbitrator resigned. He was replaced through a nomination of SOABI by a national of the Netherlands under Art. 56(1) in accordance with Arbitration Rule 11 (see Art. 56, paras. 18–21). The new arbitrator accepted his appointment.31 The records do not reveal an agreement between the parties on this new appointment. But the nomination of a Dutch rather than a Belgian national meant that there was no longer a majority of nationals and co-nationals of the parties on the Tribunal. Therefore, Art. 39 was no longer applicable and there was no need to appoint each arbitrator by agreement of the parties. The method for the appointment of arbitrators became relevant in the Tribunal’s discussion of SOABI’s nationality. The Tribunal noted that designation of the arbitrators by mutual consent pursuant to Art. 39 appeared necessary to the parties in light of the Senegalese and Belgian nationalities of the two arbitrators.32 It seemed to follow that the parties had recognized SOABI as a Belgian company (see Art. 25, paras. 1441, 1442). This conclusion led to a debate in the Dissenting Opinion and in a Declaration of the Tribunal’s President.33 Some tribunals were composed of three arbitrators who all had the nationality of the respondent State. In IBM v Ecuador, ‘[p]ursuant to article 39 of the Convention, the parties, by common consent, appointed’ three nationals of Ecuador.34

29 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) paras 3–6; ibid, Award (25 February 1988) paras 1.04–1.06. It is likely that the word ‘designated’ (‘désigné’ in the original French), instead of ‘appointed’ contained in Art. 39, was employed to seek to remedy the defect in the Tribunal’s constitution. Aaron Broches presided over the Tribunal at the time of this Decision. 30 ibid, Decision on Jurisdiction (1 August 1984) para 7. 31 ibid, Award (25 February 1988) para 1.25. 32 ibid, Decision on Jurisdiction (1 August 1984) para 42. 33 ibid, Award (25 February 1988); ibid, Dissenting Opinion Mbaye (25 February 1988) paras 67–73; ibid, Declaration Broches (1 August 1984) paras 8–10. 34 IBM v Ecuador, Decision on Jurisdiction (22 December 2003) para 4. In Astaldi v Honduras I, Award (19 October 2000), the Parties appointed three nationals of Honduras as arbitrators.

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Article 40 (1) Arbitrators may be appointed from outside the Panel of Arbitrators, except in the case of appointments by the Chairman pursuant to Article 38. (2) Arbitrators appointed from outside the Panel of Arbitrators shall possess the qualities stated in paragraph (1) of Article 14.

OUTLINE Paragraphs I. INTRODUCTION 1–4 II. INTERPRETATION 5–30 A. ‘(1) Arbitrators may be appointed from outside the Panel of Arbitrators, except in the case of appointments by the Chairman pursuant to Article 38.’ 5–13 1. Appointment by the Parties 5–8 2. Appointment by the Chairman 9–13 B. ‘(2) Arbitrators appointed from outside the Panel of Arbitrators shall possess the qualities stated in paragraph (1) of Article 14.’ 14–30 1. General Qualities under Article 14(1) 14–17 2. Independence and Impartiality in the Concrete Case 18–25 3. Other Reasons for the Exclusion of Arbitrators 26–28 4. Consequences of Improper Appointment 29–30

BIBLIOGRAPHY Branson, David, ‘Sympathetic Party-Appointed Arbitrators: Sophisticated Strangers and Governments Demand Them’ (2010) 25 ICSID Review 367 Giorgetti, Chiara, ‘The Arbitral Tribunal: Selection and Replacement of Arbitrators’ in Chiara Giorgetti (ed), Litigating International Investment Disputes: A Practitioner’s Guide (Brill 2014) 145 Griffith, Gavan, ‘Constitution of Arbitral Tribunals: The Duty of Impartiality in Tribunals or Choose Your Arbitrator Wisely’ (1998) 13 ICSID Review 36 Hoffmann, Anne K, ‘Duty of Disclosure and Challenge of Arbitrators: The Standard Applicable under the New IBA Guidelines on Conflicts of Interest and the German Approach’ (2005) 21 Arbitration International 427 Kinnear, Meg, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1(1) ABA Section of International Law International Arbitration Committee Newsletter 35 Matthews, Joseph M, ‘Difficult Transitions Do Not Always Require Major Adjustment – It’s Not Time to Abandon Party-Nominated Arbitrators in Investment Arbitration’ (2010) 25 ICSID Review 356 Paulsson, Jan, ‘Ethics, Elitism, Eligibility’ (1997) 14 Journal of International Arbitration 13 ‘Moral Hazard in International Dispute Resolution’ (2010) 25 ICSID Review 339

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Schill, Stephan W, ‘Editorial: The New Journal of World Investment and Trade; Arbitrator Independence and Academic Freedom; In This Issue’ (2015) 16 The Journal of World Investment & Trade 1 Shihata, Ibrahim FI, ‘The Experience of ICSID in the Selection of Arbitrators’ (1989) 6(1) News from ICSID 4 Tupman, W Michael, ‘Challenge and Disqualification of Arbitrators in International Commercial Arbitration’ (1989) 38 International & Comparative Law Quarterly 26

I. INTRODUCTION Art. 40(1) provides that parties can appoint arbitrators from outside the Panel of Arbitrators kept by the Centre in accordance with Arts. 12–16. While the Chairman, in making appointments under Art. 38, is restricted to the Panel of Arbitrators, the parties enjoy greater flexibility in appointing arbitrators and in actual practice frequently appoint arbitrators who are not included in the ICSID Panel. Pursuant to Art. 40(2), arbitrators appointed outside of the ICSID Panel of Arbitrators must possess the qualities required under Art. 14(1). These qualities are, however, not exhaustive and the parties can consider additional factors in selecting arbitrators.1 The earlier drafts of the Convention had sought to restrict the parties in their choice of arbitrators to persons on the Panel of Arbitrators, unless the parties had reached agreement on the tribunal’s constitution (History, Vol. I, p. 184; Vol. II, pp. 568, 938). The ensuing discussion showed a preponderance of opinions in favor of giving the parties the freedom to choose persons from outside the Panel (History, Vol. II, pp. 265, 266, 329–330, 346, 416, 417, 487, 510, 527). Eventually, a vote was taken, which showed a clear majority in favor of allowing the parties to select arbitrators from outside the Panel at all times with the result that only the Chairman would be obliged to appoint arbitrators from the Panel (ibid., pp. 798, 862, 948). It was emphasized that arbitrators selected from outside the Panel would have to possess the same qualifications (ibid., pp. 265, 387, 798, 862, 948). The Report of the Executive Directors on the Convention rephrases the provision of Art. 40 in the following terms:

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21. . . . In keeping with the essentially flexible character of the proceedings, the Convention permits the parties to appoint conciliators and arbitrators from outside the Panels but requires (Articles 31(2) and 40(2)) that such appointees possess the qualities stated in Article 14(1). The Chairman, when called upon to appoint a conciliator or arbitrator pursuant to Article 30 or 38, is restricted in his choice to Panel members.2

Art. 40(2) is part of a series or provisions of the Convention (together with Arts. 14(1), 40(2), and 57) that deal with the qualities of the individuals who may be called to be appointed as arbitrators in ICSID proceedings and set forth the mechanism that may be used to challenge those individuals if they lack the required qualities. Art. 14(1) provides that persons designated to serve on both the Panels of Arbitrators and Conciliators should 1 The ICSID website lists these and other additional considerations for parties to take into account when appointing arbitrators; see ICSID, ‘Selection and Appointment of Tribunal Members – ICSID Convention Arbitration’ accessed 10 January 2021. 2 (1993) 1 ICSID Reports 23, 27. See also ibid 30, para 36.

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be persons of high moral character, with recognized competence in the fields of law, commerce, industry, or finance, and must have the ability to exercise independent judgment. Art. 40(2) provides that arbitrators appointed from outside of the ICSID Panel of Arbitrators should also possess the qualities listed under Art. 14(1). Art. 57 provides for the disqualification of arbitrators due to any fact indicating a manifest lack of the qualities under Art. 14(1). In actual practice, as discussed in connection with Art. 57, proposals for disqualifications of arbitrators have been focused on the third requirement under Art. 14(1) only, i.e., independence and impartiality (see Art. 57, paras. 34, 35, 47–101).

II. INTERPRETATION A. ‘(1) Arbitrators may be appointed from outside the Panel of Arbitrators, except in the case of appointments by the Chairman pursuant to Article 38.’

1. Appointment by the Parties 5

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Arts. 12–16 contain detailed provisions concerning the Panel of Arbitrators and Conciliators. Each Contracting State may designate four persons to each one of the Panels. In addition, the Chairman may designate ten persons to each Panel (Art. 13). The persons designated to serve on the Panels must have certain qualities and qualifications (Art. 14(2)). The purpose of the Panels is to assist the parties in the selection of arbitrators and conciliators by providing a pool of suitable individuals. Moreover, the Panel may contribute to a certain degree of continuity in how disputes are settled under the jurisdiction of the Centre. Even appointments from outside the Panels are sometimes related to the desire for continuity, since there have been appointments of former Panel members or of persons who later became Panel members. The freedom of the parties to select arbitrators who are not on the Panel is in keeping with the principle of freedom of choice for the parties in the constitution of the tribunal (see Art. 37, para. 3). It enables them not only to select persons who enjoy their special confidence, but also to appoint arbitrators who have some specific expertise in the matter under dispute.3 The freedom of the parties to appoint arbitrators outside the Panel applies regardless of whether they make their appointments on the basis of an agreement concerning the constitution of the tribunal (see Art. 37, paras. 28–47) or in the absence of such an agreement in application of Art. 37(2)(b) (see Art. 37, paras. 48–58). It also applies

3 Georges R Delaume, ‘ICSID and the Transnational Financial Community’ (1986) 1 ICSID Rev 237, 244–245. On the critical discussion of the benefits and challenges of the institution of party-appointments of arbitrators, see eg Jan Paulsson, ‘Ethics, Elitism, Eligibility’ (1997) 14 J Int’l Arb 13; David Branson, ‘Sympathetic Party-Appointed Arbitrators: Sophisticated Strangers and Governments Demand Them’ (2010) 25 ICSID Rev 367; Joseph M Matthews, ‘Difficult Transitions Do Not Always Require Major Adjustment – It’s Not Time to Abandon Party-Nominated Arbitrators in Investment Arbitration’ (2010) 25 ICSID Rev 356; Jan Paulsson, ‘Moral Hazard in International Dispute Resolution’ (2010) 25 ICSID Rev 339; Chiara Giorgetti, ‘The Arbitral Tribunal: Selection and Replacement of Arbitrators’ in Chiara Giorgetti (ed), Litigating International Investment Disputes (Brill 2014) 145; Gavan Griffith, ‘Constitution of Arbitral Tribunals: The Duty of Impartiality in Tribunals or Choose Your Arbitrator Wisely’ (1998) 13 ICSID Rev 36.

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regardless of whether a particular appointment is made unilaterally by one party or jointly by agreement of the parties. Neutral officials who are chosen by the parties as appointing authority are also free to appoint persons from outside the Panel (see Art. 37, paras. 31–32, 36–38). In this context it is irrelevant whether, under the parties’ agreement, the appointing authority has primary authority to appoint or only authority to appoint if the parties are unable to make an appointment.

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2. Appointment by the Chairman The Chairman is restricted to designating persons from the Panel of Arbitrators only in the case of appointments pursuant to Art. 38. The restriction does not apply if the Chairman has been chosen as appointing authority by agreement of the parties (see Art. 38, paras. 30, 31). Even if the parties’ agreement provides for an appointment by the Chairman, in case one of them fails to appoint an arbitrator, or in case they fail to agree on the appointment of the third arbitrator, the resulting appointment is not pursuant to Art. 38, but rather on the basis of the parties’ agreement. Therefore, in such a case the Chairman would also not be restricted by Art. 40(1) to making the appointment from the Panel. In making appointments under Art. 38, the Chairman is restricted in his or her choice in several ways. Not only must he or she make all appointments from the Panel of Arbitrators, but also may not appoint nationals or co-nationals of either party (see Art. 38, paras. 28–31). In addition, he or she must consult or try to consult both parties (see Art. 38, paras. 15–17). Under Arbitration Rule 4(4), the Chairman is to use his or her best efforts to make the appointment within 30 days. However, ICSID has developed a practice of inviting the parties to agree on a list process whereby names of potential arbitrators are circulated for the parties’ consideration prior to proceeding to a direct appointment from the Panel by the Chairman. This manner of proceeding allows the Centre to propose candidates from outside the Panel, thus considerably expanding the pool of qualified individuals to choose from.4 In making appointments under Art. 38 the Chairman is given some additional flexibility through the Chairman’s List. Art. 13(2) provides that the Chairman may designate ten persons to the Panel of Arbitrators. The Chairman may use this power to meet the requirements of a particular proceeding.5 In other words, if there is an absence or shortage of eligible candidates, a person who appears suitable for appointment as arbitrator, but is not listed on the Panel of Arbitrators may be designated to the Panel by the Chairman. Once designated to the Panel, the person will normally remain for six years. Therefore, the designee must be suitable for appointments throughout the term of service on the Panel. The full complement of ten persons is currently designated to the

4 For a description of the two-step system adopted by ICSID, see Meg Kinnear, ‘Appointment to Arbitral Tribunals at ICSID’ (2013) 1(1) ABA SIL Int’l Arb Committee Newsletter 35, 37. See also Eloïse Obadia and Frauke Nitschke, ‘Institutional Arbitration and the Role of the Secretariat’ in Giorgetti (n 3) 80, 110. 5 Aron Broches, ‘The Experience of the International Centre for Settlement of Investment Disputes’ in Seymour J Rubin and Richard W Nelson (eds), International Investment Disputes: Avoidance and Settlement (West Group 1985) 75, 92–93.

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Chairman’s Panel, as part of ICSID’s efforts to increase and diversify the membership of the Panels.6 An arbitrator who has been appointed by the Chairman under Art. 38 in accordance with Art. 40(1) continues to be a member of the tribunal even if his or her term of office as a Panel member expires. Under Art. 56(2), a person who has been appointed as arbitrator will continue to serve as a member of the tribunal regardless of that person’s current membership on the Panel (see History, Vol. II, p. 488). The Chairman’s restriction to making appointments from the Panel of Arbitrators has a parallel in Art. 52(3). In making appointments to an ad hoc committee, the Chairman is also restricted to persons serving on the Panel of Arbitrators. In the case of Art. 52(3), the Chairman’s choice is even further restricted (see Art. 52, paras. 571–585). B. ‘(2) Arbitrators appointed from outside the Panel of Arbitrators shall possess the qualities stated in paragraph (1) of Article 14.’

1. General Qualities under Article 14(1) 14

Art. 14(1) lists the qualities that a person must have in order to be eligible to serve on the Panel of Arbitrators. These are: s high moral character; s recognized competence in the fields of law, commerce, industry or finance; s reliability to exercise independent judgment.7

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Of these three qualities, only the requirement of reliability to exercise independent judgment has played a practical role. This requirement is at times further concretized in instruments providing for consent to ICSID arbitration. For example, some investment agreements provide that an arbitrator should not take instructions from the disputing parties or from any organization or government with regard to matters before a tribunal, or that an arbitrator is not ‘affiliated with’ the disputing parties or the home State of the investor.8 Under Art. 40(2), arbitrators appointed from outside the Panel of Arbitrators must also have the qualities stipulated under Art. 14(1). An appointment from the Panel carries a strong presumption that the person in question has these qualities. A demonstrable absence of one or several of these qualities would mean that a party may propose the disqualification of that member in accordance with Art. 57 (see Art. 57, paras. 30–101). It would also mean that the tribunal is not properly constituted. This, in turn, could form the basis of a request for annulment in accordance with Art. 52(1)(a) (see Art. 52, para. 129). In selecting arbitrators, parties may also consider other factors that are not included in Art. 14(1), depending on the specific needs of the case. Such factors may include, for

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6 See Kinnear (n 4) 38. For the full list of members of the ICSID Panels of Conciliators and of Arbitrators, see ICSID, ‘Members of the Panels of Conciliators and Arbitrators’ Doc ICSID/10 (21 December 2020) accessed 10 January 2021. 7 See also Arbitration (Additional Facility) Rules (2006) Art. 8. 8 See eg Canada–Nigeria BIT (signed 6 May 2014, not yet in force) Art. 26(2); Benin–Canada BIT (adopted 9 January 2013, entered into force 12 May 2014) Art. 28(2); Colombia–Turkey BIT (adopted 28 July 2014, not yet in force) Art. 12(17)(b); Australia–China FTA (adopted 17 June 2015, entered into force 20 December 2015) Art. 9.15(8); Burkina Faso–Canada BIT (signed 20 April 2015, entered into force 11 October 2017) Art. 27(2). See also Code of Conduct for the European Union–Singapore Investment Protection Agreement (signed 19 October 2018, not yet in force) para 2.

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instance, experience as arbitrator (or as presiding arbitrator), timeliness and availability, language proficiency, absence of conflicts, capacity to work cohesively with the other tribunal members, and knowledge about any relevant laws and practices.9 A number of investment agreements require that arbitrators have expertise or experience in public international law, international trade, or international investment law, or experience in dispute resolution under international investment agreements.10

2. Independence and Impartiality in the Concrete Case Art. 14(1) only addresses the eligibility of persons to serve on the Panel of Arbitrators. A person may be perfectly qualified as a member of the Panel, but may still be unsuitable as an arbitrator in a particular case. A person may be relied upon to exercise independent judgment generally, but there may be a conflict of interest in respect of a specific dispute. The Arbitration Rules address this question in a somewhat indirect way. They require a statement by each arbitrator of any professional, business or other relationships with the parties. To this end, Rule 6(2), as amended on 10 April 2006, provides: (2) Before or at the first session of the Tribunal, each arbitrator shall sign a declaration in the following form: ‘To the best of my knowledge there is no reason why I should not serve on the Arbitral Tribunal constituted by the International Centre for Settlement of Investment Disputes with respect to a dispute between __________________ and __________________. ‘I shall keep confidential all information coming to my knowledge as a result of my participation in this proceeding, as well as the contents of any award made by the Tribunal. ‘I shall judge fairly as between the parties, according to the applicable law, and shall not accept any instruction or compensation with regard to the proceeding from any source except as provided in the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and in the Regulations and Rules made pursuant thereto.

9 Kinnear (n 4). 10 See eg Australia–China FTA (n 8) Art. 9.15(8); Benin–Canada BIT (n 8) Art. 28(2); Canada–Mali BIT (adopted 28 November 2014, entered into force 8 June 2016) Art. 25(2); Colombia–Turkey BIT (n 8) Art. 12(17). Cf also European Union–Canada Comprehensive and Economic Trade Agreement (CETA) (signed 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23, 8.27(4); European Union–Singapore Investment Protection Agreement (signed 19 October 2018, not yet in force) COM(2018)194 final, Annex 1, Art. 9.18(6). Other instruments governing international arbitration also contain provisions concerning the qualities of arbitrators; see for instance 1958 International Law Commission (ILC) Model Rules on Arbitral Procedure [1958] 2 YBILC 83, 84, Art. 3(5). Significantly, most of these instruments put more emphasis on the arbitrators’ independence from the parties than on general qualifications and qualities, see UNCITRAL Arbitration Rules (2013) Art. 6(7); UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) Arts. 11(5), 12 (1); ICC Arbitration Rules (2021) Art. 11(1)–(3); SCC Arbitration Rules (2017) Art. 18; SIAC Investment Rules (2017) Rule 10.1 and 2. The SIAC Investment Rules (Rule 10.3) also mention that arbitrators should have ‘sufficient availability to determine the case in a prompt and efficient manner that is appropriate given the nature of the arbitration.’

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schreuer’s commentary on the icsid convention ‘Attached is a statement of (a) my past and present professional, business and other relationships (if any) with the parties and (b) any other circumstance that might cause my reliability for independent judgment to be questioned by a party. I acknowledge that by signing this declaration, I assume a continuing obligation promptly to notify the Secretary-General of the Centre of any such relationship or circumstance that subsequently arises during this proceeding.’11 Any arbitrator failing to sign a declaration by the end of the first session of the Tribunal shall be deemed to have resigned.

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The amendments of 2006 to Rule 6(2) added two important requirements which were not included in the previous version: (i) the inclusion in the declaration of a statement disclosing any other circumstance that might cause questions about the arbitrator’s reliability for independent judgment and (ii) the imposition on the arbitrator of a continuing obligation to notify the Secretary-General of the Centre of any such relationship or circumstance that may subsequently arise during the arbitral proceedings.12 With respect to the first of these new requirements the Explanatory Note states that the purpose of this amendment is to ‘expand the scope of disclosures of arbitrators to include any circumstances likely to give rise to justifiable doubts as to the arbitrator’s reliability for independent judgment.’ However, no further specification of the type of circumstances envisaged by this Rule is provided.13 Although the existence of a particular relationship is not specifically mentioned as being incompatible with the appointment as arbitrator, it is clear that a conflict of interest in a particular case is a bar to the appointment as arbitrator. Even partyappointed arbitrators must exercise independent judgment and must be expected to judge fairly between the parties.14 A subjective belief on the part of the arbitrator, of the appointing party, or of the neutral appointing authority that the appointee will be capable of independent and fair judgment is not sufficient. A conflict of interest is an objective criterion that is independent of the moral character of the arbitrator in

11 Lit (b) in the last paragraph of the declaration was added through the amendment of the Arbitration Rules in 2006. Similar changes were made to the corresponding provision of the Arbitration (Additional Facility) Rules (n 7) Art. 13(2). 12 The Discussion Paper published by the ICSID Secretariat on 22 October 2004 had also made a third proposal with respect to this provision, concerning the elaboration of a code of conduct for ICSID arbitrators. However, this proposal was not adopted at the time. ICSID is currently working on a Code of Conduct for arbitrators with UNCITRAL Working Group III; see Report of Working Group III (Investor– State Dispute Settlement Reform) on the Work of Its Thirty-Fifth Session (New York, 23–27 April 2018) UN Doc No A/CN.9/935 (15 May 2018) para 64. See Draft Code of Conduct for Adjudicators in Investor–State Dispute Settlement (1 May 2020) accessed 10 January 2021. Once final, this Code of Conduct is slated to replace the revised Arbitrator Declaration in Schedule 2. 13 See James Crawford, ‘Challenges to Arbitrators in ICSID Arbitration’ in David D Caron and others (eds), Practicing Virtue: Inside International Arbitration (OUP 2016) 596, 603 (noting that the standard of disclosure in Rule (6) ‘appears to be concerned not only with manifest cases of lack of independence—or more strictly, of reliability—but also with situations that might give rise to serious, reasonable reservations about an arbitrator’s ability to act independently,’ emphasis in the original). 14 See also Frédéric Eisemann, ‘La double sanction prévue par la Convention de la BIRD en cas de collusion ou d’ententes similaires entre un arbitre et la partie qui l’a désigné’ (1977) 23 AFDI 436, 451.

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question. In particular, a conflict of interest may exist even if there is no suspicion or likelihood of corruption in the sense of Art. 52(1)(c) (see Art. 52, paras. 322–329). A relationship with a party affecting the eligibility as arbitrator may be of a personal, family, or business nature. It would include a permanent attorney–client relationship, any other permanent or recurrent business relationship, employment by a party, including civil service in a State that is a party, substantial participation or shareholding in a company that is a party and any form of relationship in which the arbitrator stands to profit directly or indirectly from the financial gain of a party.15 There have been at least two instances to date of judges in office in a respondent State being appointed to ICSID tribunals.16 Arguably, the situation of a judge is distinct, as the individual, albeit a civil servant in the relevant State as a member of the judiciary, must be independent and impartial by virtue of her or his judicial function. The practice on the independence and impartiality of arbitrators is set out in more detail in particular under Art. 57, which deals, inter alia, with disqualification procedures relating to arbitrators. These procedures give specific form and effect to the notions of independence and impartiality in respect of concrete issues and conflicts of interests in actual cases. Suffice to mention here that not every past contact, professional, or personal, with a party would disqualify a person from being appointed as arbitrator.17 Professional contacts between an arbitrator and legal counsel representing one of the parties are not, as a rule, an obstacle to the exercise of independent judgment.18 Dissatisfaction by a party with a decision rendered by the Tribunal, or with a decision rendered by another tribunal in which an arbitrator had participated, was not accepted as evidence of a lack of independence or impartiality.19

15 Some guidance as to the standards to be applied to arbitrator challenges is offered by the IBA Guidelines on Conflicts of Interest in International Arbitration (adopted by resolution of the IBA Council on 23 October 2014) accessed 10 January 2021. The Guidelines use three color-coded lists (red, orange, and green) encompassing a number of situations, illustrated by examples, where the duty to disclose varies. If a matter falls under the red list, the arbitrator should not accept the appointment or resign (but exceptions are made for matters that can be waived by the parties); the orange list is an intermediate area describing situations where the arbitrator may or may not disclose or resign, and the green list contains situations where the disqualification is unfounded and there is no need to disclose. See Anne K Hoffmann, ‘Duty of Disclosure and Challenge of Arbitrators: The Standard Applicable under the New IBA Guidelines on Conflicts of Interest and the German Approach’ (2005) 21 Arb Int’l 427. 16 SPP v Egypt (registered 28 August 1984); Mobil Oil v New Zealand (registered 15 April 1987). 17 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 2; Vivendi v Argentina, Decision on Disqualification (3 October 2001); Zhinvali v Georgia, Award (24 January 2003) paras 19–24. See further the cases cited at Art. 57, paras 55–66. 18 SGS v Pakistan, Decision on Disqualification (19 December 2002); Azurix v Argentina, Decision on Disqualification (25 February 2005) (not public) and ibid, Award (14 July 2006) para 33; Saipem v Bangladesh, Decision on Disqualification (11 October 2005) (not public) and ibid, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 47; Siemens v Argentina, Award (6 February 2007) paras 31, 35–38; Repsol v Argentina, Decision on Disqualification (13 December 2013) para 86; Vivendi v Argentina, Decision on Disqualification (3 October 2001) para 28. See further the cases cited at Art. 57, paras 67, 68. 19 Sempra v Argentina, Award (28 September 2007) paras 53–60, 66; Suez and Vivendi v Argentina, Decision on Disqualification (22 October 2007); Abaclat and others v Argentina, Decision on Disqualification (4 February 2014); ConocoPhillips v Venezuela, Decision on Disqualification (5 May 2014). See Meg Kinnear and Frauke Nitschke, ‘Disqualification of Arbitrators under the ICSID Convention and Rules’ in Chiara Giorgetti (ed), Challenges and Recusals of Judges and Arbitrators in International Courts and Tribunals (Brill 2015) 34, 55. See further the cases cited at Art. 57, paras 83–91.

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Similarly, academic writings, political beliefs, or philosophical orientations are not a basis for the exclusion of an arbitrator for lack of impartiality.20 A person’s personal convictions may be known from published writings or public statements and may give some idea of an arbitrator’s likely judgment. A particular person may be known to be supportive of the causes of capital importing countries or may favor protecting private property rights. A supposed or real predisposition of this kind is not an obstacle to independent judgment in a particular case for a person of high moral character. It is not illegitimate for parties to appoint arbitrators who they believe to be sympathetic to their arguments. Neutral appointing authorities will be prudent to avoid the selection of persons who are known for strongly held views on controversial issues touching upon international investment. Parties appointing arbitrators by agreement will opt for arbitrators who are likely to be balanced as well as independent in their judgment.

3. Other Reasons for the Exclusion of Arbitrators 26

Arbitration Rule 1(4) contains an additional exclusion for the appointment of an arbitrator: (4) No person who had previously acted as a conciliator or arbitrator in any proceeding for the settlement of the dispute may be appointed as a member of the Tribunal.21

27

This rule is based on the principle that no person should take part twice in the settlement of a dispute as an impartial decision-maker.22 It applies regardless of who made the appointments. The question may arise if ICSID arbitration is preceded by inconclusive non-ICSID arbitration (see Art. 26, paras. 15–19, 45–51) or if conciliation is to be followed by arbitration (see Art. 25, paras. 27–32; Art. 28, para. 8; Art. 34, para. 23). But it would apply only if the previous proceeding had actually taken place.23 It also applies to successive steps in ICSID arbitration, such as annulment and resubmission to a new tribunal in accordance with Art. 52(6) (see Art. 52, para. 812). Art. 52(3) goes even further in not only excluding members of the tribunal that rendered the award from appointment to an ad hoc committee, but also persons having the same 20 The IBA Guidelines (n 15) Point 4.1 treat the expression of a legal opinion concerning an issue that also arises in the arbitration as falling within the Green List and not giving rise to justifiable doubts as to the arbitrator’s impartiality. In Urbaser v Argentina, the Claimants challenged the arbitrator appointed by the Respondent based on views he had expressed in prior publications. In the Claimants’ view, the arbitrator had ‘already prejudiced an essential element of the conflict that is the object of the arbitration.’ The remaining arbitrators rejected the challenge and held in particular that: ‘[T]he mere showing of an opinion, even if relevant in a particular arbitration, is not sufficient to sustain a challenge for lack of independence or impartiality of an arbitrator.’ See Urbaser v Argentina, Decision on Disqualification (12 August 2010) paras 22, 45. See also Judge Tomka’s decision in CC/Devas v India (UNCITRAL), Decision on Challenges (30 September 2013), which shows that an arbitrator may run the risk of being disqualified on the basis of his or her views on a legal issue. For a critical analysis of this challenge, see Stephan W Schill, ‘Editorial: The New Journal of World Investment and Trade; Arbitrator Independence and Academic Freedom; In This Issue’ (2015) 16 JWIT 1, 3–8. See also Loretta Malintoppi and Alvin Yap, ‘Challenges of Arbitrators in International Investment Arbitration: Still Work in Progress?’ in Katia Yannaca-Small (ed), Arbitration under International Investment Agreements: A Guide to the Key Issues (2nd edn, OUP 2018) ch 8, paras 8.95–8.98. 21 See also Arbitration (Additional Facility) Rules (n 7) Art. 6(5). 22 See also Note I to Arbitration Rule 1 of 1968, (1993) 1 ICSID Reports 67. 23 ibid.

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nationality as any such member (see Art. 52, para. 583). Since the Arbitration Rules are generally subject to modification by the parties (see Art. 44, paras. 14–36), Rule 1(4) may be waived by agreement of the parties.24 Under Administrative and Financial Regulation 13, the Secretary-General, the Deputy Secretaries-General, and the members of the staff of ICSID may not serve on the Panel of Arbitrators and may not be appointed as arbitrators. This provision is not subject to waiver by the parties (see Art. 44, para. 6).

28

4. Consequences of Improper Appointment Any appointment that is in violation of the provisions of the Convention or the attendant rules may lead to a proposal for the disqualification of the arbitrator in question in accordance with Art. 57. A decision on disqualification is made by the other members of the tribunal or by the Chairman under Art. 58. Improper appointments of arbitrators may lead to the annulment of the resulting award. The most likely ground for annulment would be improper constitution of the tribunal under Art. 52(1)(a) (see Art. 52, paras. 123–147). Lack of impartiality may lead to the charge of a serious departure from a fundamental rule of procedure under Art. 52(1)(d) (see Art. 52, paras. 350–362). In extreme cases of a demonstrable exploitation of a conflict of interest, there may be an allegation of corruption in accordance with Art. 52(1)(c) (see Art. 52, paras. 322–329).25

24 ibid. See LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 44. 25 See also Ibrahim FI Shihata, ‘The Experience of ICSID in the Selection of Arbitrators’ (1989) 6(1) News from ICSID 4, 5.

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Article 41 (1) The Tribunal shall be the judge of its own competence. (2) Any objection by a party to the dispute that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Tribunal, shall be considered by the Tribunal which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute.

OUTLINE Paragraphs I. INTRODUCTION 1–14 A. Kompetenz-Kompetenz 2–11 B. Preliminary Objections: Jurisdiction, Competence, and Admissibility 12–14 II. INTERPRETATION 15–170 A. ‘(1) The Tribunal shall be the judge of its own competence.’ 15–45 1. Exclusive Power to Determine Jurisdiction 15–30 a) The International Court of Justice 15–16 b) The Secretary-General’s Screening Power 17–24 c) Domestic Courts 25–30 2. Review of the Decision on Jurisdiction 31–39 a) The International Court of Justice 31 b) Domestic Courts 32–33 c) Internal ICSID Review Procedure 34–39 3. Reconsideration of a Decision on Jurisdiction by the Tribunal 40–45 B. ‘(2) Any objection by a party to the dispute . . .’ 46–86 1. Preliminary Objections 46–47 2. Timeliness of Preliminary Objections 48–63 a) As Early as Possible 48–52 b) No Later than the Deadline for the Counter-Memorial 53 c) Deadline for Jurisdictional Objections to Ancillary Claims 54–55 d) Subsequently Discovered Facts 56–57 e) Consequence of Untimely Objection 58–63 3. Examination of Jurisdiction and Competence on the Tribunal’s Initiative 64–82 a) Proceedings in which Both Parties Participate 68–75 b) Proceedings in which the Respondent Fails to Participate 76–82 4. Relevant Time for the Determination of Jurisdiction, Competence, and Admissibility 83–86

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C. ‘. . . that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Tribunal, . . .’ 87–115 1. Jurisdiction and Competence 87–88 2. Jurisdictional Issues 89–91 3. Other Preliminary Objections 92–115 a) Admissibility 92–104 b) The Prima Facie Test 105–115 D. ‘. . . shall be considered by the Tribunal . . .’ 116–150 1. Obligation to Decide 116–119 2. Form of Decision 120–127 3. Summary Procedure 128–150 E. ‘. . . which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute.’ 151–170 1. Bifurcation 151–169 2. Bifurcation and Ancillary Claims 170

BIBLIOGRAPHY Antonietti, Aurélia, ‘The 2006 Amendments to the ICSID Rules and Regulations and the Additional Facility Rules’ (2006) 21 ICSID Review 427 Benedettelli, Massimo V, ‘To Bifurcate or Not to Bifurcate? That Is the (Ambiguous) Question’ (2013) 29 Arbitration International 493 Brower, Charles N and Henin, Paula F, ‘Res Judicata: ConocoPhillips v Venezuela, ICSID Case No ARB/07/30’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer 2015) 56 Brown, Chester and Puig, Sergio, ‘The Power of ICSID Tribunals to Dismiss Proceedings Summarily: An Analysis of Rule 41(5) of the ICSID Arbitration Rules’ (2011) 10 The Law & Practice of International Courts and Tribunals 227 Cantelmo, Tobia, ‘The Inherent Power of Reconsideration in Recent ICSID Case Law’ (2017) 18 The Journal of World Investment & Trade 232 Magnaye, Jose and Reinisch, August, ‘Revisiting Res Judicata and Lis Pendens in Investor–State Arbitration’ (2016) 15 The Law & Practice of International Courts and Tribunals 264 Markert, Lars, ‘Summary Dismissal of ICSID Proceedings’ (2016) 31 ICSID Review 690 Parra, Antonio R, ‘The Development of the Regulations and Rules of the International Centre for Settlement of Investment Disputes’ (2007) 22 ICSID Review 55 Potestà, Michele, ‘Preliminary Objections to Dismiss Claims that Are Manifestly Without Legal Merit under Rule 41(5) of the ICSID Arbitration Rules’ in Crina Baltag (ed), ICSID Convention after 50 Years: Unsettled Issues (Kluwer 2016) 249 Reinisch, August, ‘Jurisdiction and Admissibility in International Investment Law’ (2017) 16 The Law & Practice of International Courts and Tribunals 21 Schreuer, Christoph, ‘Belated Jurisdictional Objections in ICSID Arbitration’ in Miguel Angel Fernández-Ballesteros and David Arias (eds), Liber Amoricum Bernardo Cremades (La Ley 2010) 1081 ‘At What Time Must Jurisdiction Exist?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 264

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Sheppard, Audley, ‘The Jurisdictional Threshold of a Prima-Facie Case’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 932 Titi, Catharine, ‘Res Iudicata and Interlocutory Decision under the ICSID Convention: Antinomies over the Power of Tribunals to Review’ (2018) 33 ICSID Review 358 Vasani, Baiju S and Vasani, Sarah Z, ‘Bifurcation of Investment Disputes’ in Katia YannacaSmall (ed), Arbitration under International Investment Agreements: A Guide to Key Issues (2nd edn, OUP 2018) 302 Waibel, Michael, ‘Investment Arbitration: Jurisdiction and Admissibility’ Investment Arbitration: Jurisdiction and Admissibility’ in Marc Bungenberg and others (eds), International Investment Law: A Handbook (CH Beck‑Hart‑Nomos 2015) 1212

I. INTRODUCTION 1

Art. 41 addresses two matters that are central for the effective settlement of investment disputes by arbitral tribunals established under the ICSID Convention. Art. 41(1) lays down the principle of Kompetenz-Kompetenz, that is, the tribunal’s power to decide upon its own competence. Art. 41(2) addresses the power of ICSID tribunals to deal with preliminary objections. This power encompasses objections directed at the jurisdiction of the Centre or the competence of a tribunal, which are expressly mentioned. It also covers objections arising out of other preliminary issues that are not explicitly mentioned in Art. 41(2), namely questions concerning the admissibility of claims. Art. 41 is complemented by Arbitration Rule 41, which concretizes the procedures for ICSID tribunals to deal with preliminary objections. A. Kompetenz-Kompetenz

2

The power of a judicial body to determine its own competence is an accepted principle of international adjudication1 and is also known as the principle of Kompetenz-Kompetenz (or competence-competence).2 It is a common feature in instruments governing international judicial procedure. Comparable clauses can be found in the Statute of the International Court of Justice (Art. 36(6)), the 2013 UNCITRAL Arbitration Rules (Art. 23(1)), the 1958 International Law Commission Model Rules on Arbitral Procedure (Art. 9),3 the 1985 UNCITRAL Model Law on International Commercial Arbitration (amended in 2006) (Art. 16), the 2021 ICC Arbitration Rules

1 See eg TOPCO v Libya, Preliminary Award (27 November 1975) (1979) 53 ILR 392, 404 ff; PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) para 242. 2 Inceysa v El Salvador, Award (2 August 2006) para 148; Soufraki v UAE, Decision on Annulment (5 June 2007) para 50; Azurix v Argentina, Decision on Annulment (1 September 2009) para 67; Garanti Koza v Turkmenistan, Decision on Jurisdiction – Dissenting Opinion Boisson de Chazournes (3 July 2013) para 5; İçkale v Turkmenistan, Award (8 March 2016) para 239; Suez and Vivendi v Argentina, Decision on Annulment (5 May 2017) para 117; Standard Chartered Bank v TANESCO, Decision on Annulment (22 August 2018) paras 152, 209, 321; Cavalum v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (31 August 2020) para 370; Raiffeisen Bank v Croatia, Decision on Jurisdiction (30 September 2020) para 128. 3 [1958] 2 YBILC 83, 84.

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(Art. 6(5)), the 2017 SCC Arbitration Rules (Art. 14(4)), and the 1989 Institute of International Law’s Articles on Arbitration between States, State Enterprises or State Entities and Foreign Enterprises (Art. 3(b)).4 In the Convention’s drafting, the principle as such never raised any doubts (History, Vol. I, pp. 186–190; Vol. II, pp. 76, 97, 206, 291–292, 406, 511), although there was some discussion on the details (see paras. 15–16, 17, 31, 64, 89, 151 infra). The Report of the Executive Directors to the Convention points out: ‘Article 41 reiterates the wellestablished principle that international tribunals are to be the judges of their own competence.’5 The first paragraph of Art. 41 states the general principle of the tribunal’s power to rule on its own competence. The second paragraph addresses a number of procedural issues in connection with this power. Art. 41 is supplemented by Arbitration Rule 41. Within the chapter on arbitration, Art. 41 is the first of a section of seven Articles dealing with the powers and functions of the tribunal. Art. 41 is materially identical to Art. 32 dealing with the parallel power of a conciliation commission. Art. 52(4) extends the application of Art. 41 to ad hoc committees charged with the task of deciding on an application for annulment of the original award. Art. 41 also applies to proceedings before a new tribunal constituted after an annulment in accordance with Art. 52(6).6 The primary purpose of Art. 41 is to prevent a frustration of the arbitration proceedings through a unilateral denial of the tribunal’s competence by one of the parties. Therefore, Art. 41 is an essential procedural corollary to the last sentence of Art. 25(1), which provides that, once the parties have given their consent, they may not withdraw it unilaterally. This includes the tribunal’s power to interpret a party’s consent in the face of that party’s attempt to interpret it restrictively.7 This power of the tribunal to determine its own competence in the face of a recalcitrant party has never been challenged seriously in ICSID proceedings. Art. 41 also implies that a tribunal constituted pursuant to the Convention’s procedure is validly constituted even if the validity of the consent to arbitration is disputed and may turn out to be defective. The tribunal has its independent legal basis in the Convention, even if it finds that it does not have competence or if its decision on jurisdiction is eventually annulled for excess of power.8 In Inceysa v El Salvador, the Respondent raised the objection that the investment had not been made in accordance with the host State’s law. The Claimant argued that this

4 (1990) 63 Ann IDI 324, 326; (1990) 5 ICSID Rev 139. 5 ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 31, para 38. 6 Amco v Indonesia, Resubmitted Case: Decision on Jurisdiction (10 May 1988); Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005). 7 In SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 60, the Tribunal refused to accept Egypt’s interpretation of its legislation containing an ICSID clause: ‘While Egypt’s interpretation of its own legislation is unquestionably entitled to considerable weight, it cannot control the Tribunal’s decision as to its own competence.’ 8 Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 664.

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4

5

6

7

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objection raised issues that belonged to the merits on which the Tribunal could not rule when deciding on its own competence.9 However, the Tribunal found that its power to decide on its own competence existed independently of the presence of a valid consent: [T]he Arbitral Tribunal has an original and unquestionable competence, which arises from its own constitution and the ICSID Convention, and whose only object is to determine its competence to decide the substantive dispute presented by the parties. Only after the Arbitral Tribunal determines its own competence can it hear and decide the merits of the matter presented. As an obvious consequence of the above, there are cases in which an Arbitral Tribunal decides that it lacks competence to decide the merits of the matter brought before it, without such decision implying that the Arbitral Tribunal exceeded its bounds or acted illegally. Such being the case, there is no paradox when an Arbitral Tribunal rules on its own competence, as asserted by Inceysa, because the power to decide this issue stems directly from the command of Article 41 of the ICSID Convention.10

9

10

11

In Zhinvali v Georgia, the Tribunal found that it lacked jurisdiction because there was no qualifying investment. Nevertheless, it found that it was competent to make a decision on costs since ‘Article 61(2) applies even where the Tribunal determines that “the dispute is not within the jurisdiction of the Centre”.’11 A secondary effect of Art. 41 is that it gives the tribunal an exclusive power to decide on matters of its jurisdiction in relation to other decision-makers. These other decisionmakers include the International Court of Justice (ICJ) in the context of Art. 64 of the Convention (see paras. 15, 16 infra), the Secretary-General of ICSID in the context of Art. 36(3) of the Convention (see paras. 17–24 infra), and domestic courts (see paras. 25–30, 32, 33 infra). The Tribunal in Pac Rim v El Salvador underlined this approach and considered it part of the general principles applicable when assessing its jurisdiction: 5.30. First, under Article 41(1) of the ICSID Convention, it is for the Tribunal, as the judge of its competence and not for State authorities or national courts, to determine the basis of that competence, whether it be derived from a treaty or a unilateral offer made in legislation and subsequently accepted in writing by the investor. 5.31. Second, such an approach is consistent with the solution adopted by international tribunals, such as the Permanent Court of International Justice and the International Court of Justice, when making clear that a sovereign State’s interpretation of its own unilateral consent to the jurisdiction of an international tribunal is not binding on the tribunal or determinative of jurisdictional issues.12

9 10 11 12

Inceysa v El Salvador, Award (2 August 2006) para 146. ibid paras 150–152. Zhinvali v Georgia, Award (24 January 2003) para 420. Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 5.30–5.31 (internal references omitted). For a similar conclusion, see Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 75; CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) para 70.

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B. Preliminary Objections: Jurisdiction, Competence, and Admissibility In the practice of ICSID arbitration, preliminary objections can be directed either against the jurisdiction of the Centre if a condition stipulated in Art. 25 of the ICSID Convention is not fulfilled, against the competence of a tribunal to hear a particular dispute, or against the admissibility of a particular claim. While Art. 41(2) of the Convention deals with preliminary objections, as the title of the corresponding Rule 41 of the ICSID Arbitration Rules suggests, it expressly mentions only two grounds for preliminary objections: objections to the jurisdiction of the Centre and objections that a dispute is for other reasons not within the competence of the tribunal. It does not, however, explicitly mention objections to the ‘admissibility’ of a particular claim.13 Neither of the terms used in Art. 41(2) – ‘jurisdiction’ and ‘competence’ – are defined in the Convention. What is more, the terminology used in the ICSID Convention is slightly confusing, in particular when compared to the terminology used in respect of dispute settlement by other international courts and tribunals, where the term ‘jurisdiction’ is generally used to designate the ‘power of a court or judge to entertain an action, petition or other proceedings.’14 In the context of the ICSID Convention, however, the term ‘jurisdiction’ is used to refer to the conditions laid down in Art. 25 of the Convention under which the Centre, which is not a judicial organ itself, may offer its services for dispute settlement (see Art. 25, paras. 1–3, 20–26). ‘Competence’ in Art. 41(2), by contrast, is the term used to designate the authority of an ICSID tribunal to hear a specific dispute15 and to exercise the jurisdiction bestowed upon the Centre in a particular case. The Convention mentions no requirements that concern specifically the ‘competence’ of a tribunal.16 The concept of ‘admissibility,’ finally, is related to the characteristics of a particular claim; objections going to admissibility can concern both temporary and permanent defects of a claim.17 Whether and how the concept of admissibility fits into the framework of the ICSID Convention is disputed among tribunals and in the literature (see further paras. 92–104 infra). One approach is to subsume issues of ‘admissibility’ under a broad interpretation of the term ‘competence’ in Art. 41(2), so that the two concepts – ‘competence’ and

13 See James Crawford, Brownlie’s Principles of Public International Law (9th edn, OUP 2019) 667. 14 Brian A Garner, Black’s Law Dictionary (10th edn, West 2014); Zachary Douglas, The International Law of Investment Claims (CUP 2009) para 293; Michael Waibel, ‘Investment Arbitration: Jurisdiction and Admissibility’ in Marc Bungenberg and others (eds), International Investment Law (CH Beck‑Hart‑Nomos 2015) 1212, 1213; August Reinisch, ‘Jurisdiction and Admissibility in International Investment Law’ (2017) 16 LPICT 21, 23. See eg Supervisión y Control v Costa Rica, Award (18 January 2017) para 269. 15 Yuval Shany, ‘Jurisdiction and Admissibility’ in Cesare PR Romano, Karen J Alter and Yuval Shany (eds), Oxford Handbook of International Adjudication (OUP 2014) 779, 782. See also Abaclat and others v Argentina, Dissenting Opinion Abi-Saab (4 August 2011) para 12. 16 Hanno Wehland, ‘Jurisdiction and Admissibility in Proceedings under the ICSID Convention and the ICSID Additional Facility Rules’ in Crina Baltag (ed), ICSID Convention after 50 Years (Wolters Kluwer 2017) 227, 230; Andrea Steingruber, ‘Some Remarks on Veijo Heiskanen’s Note “Ménage à trois? Jurisdiction, Admissibility and Competence in Investment Treaty Arbitration”’ (2014) 29 ICSID Rev 675, 688. 17 Douglas (n 14) 146; Waibel (n 14) 1213; Reinisch (n 14) 23. See eg Supervisión y Control v Costa Rica, Award (18 January 2017) para 269. See also eg Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) para 90; Micula v Romania I, Decision on Jurisdiction (24 September 2008) 63.

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‘admissibility’ – are ‘two sides of the same conceptual coin.’18 Alternatively, one can keep the ‘competence’ of the tribunal and the ‘admissibility’ of a claim conceptually separate, but still treat questions of admissibility as part of the ‘other reasons’ mentioned in Art. 41(2) of the Convention why a dispute is not within the competence of the tribunal. If, by contrast, one considers that only ‘jurisdiction’ and ‘competence’ in a strict sense, but not ‘admissibility,’ are addressed in Art. 41 of the Convention, a decision by a tribunal declining to entertain a case for a lack of admissibility would need to be based on the inherent powers of ICSID tribunals laid down in Art. 44. Tribunals that hold the opinion that the concept of admissibility has no place in the Convention will have to solve ‘admissibility issues’ as questions of jurisdiction, competence, or the merits, depending on the issue in question.19

II. INTERPRETATION A. ‘(1) The Tribunal shall be the judge of its own competence.’

1. Exclusive Power to Determine Jurisdiction a) The International Court of Justice 15

Art. 64 of the Convention contains a submission to the jurisdiction of the ICJ for disputes concerning the interpretation or application of the Convention between Contracting States, if the dispute is not settled by negotiation. This is a standard clause in treaties. However, during the Convention’s drafting there was considerable debate about the ICJ’s power to interpret the Convention in matters of jurisdiction in specific cases.20 There were various suggestions for the referral of questions concerning competence to the ICJ (History, Vol. II, pp. 57, 292). This was to be achieved either through a suspension of proceedings during which the interested States might bring the matter to the ICJ21 (ibid., pp. 290, 354, 533, 578, 906) or, possibly, through a request for an advisory opinion22 (ibid., pp. 533–534, 578). The view prevailed that such procedures would be impractical, that they would lead to procrastination, that they might bring 18 Veijo Heiskanen, ‘Ménage à trois? Jurisdiction and Admissibility and Competence in Investment Treaty Arbitration’ (2014) 29 ICSID Rev 231, 245. 19 See eg Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) para 126 (providing further references) (‘Moreover, the ICSID Convention does not contain a concept akin to “admissibility” of claims. The Convention distinguishes between jurisdiction and the merits of claims. To the extent that the lack of “admissibility” is asserted as an objection at the jurisdictional stage, it is dealt with at that stage within a jurisdictional framework or in the context of the Tribunal’s competence with respect to at least one or all of its elements (rationes temporis, loci, personae, et materiae). If it is not so addressed, it is merged with the merits, and thus examined, if at all, at that stage,’ internal footnotes omitted). 20 Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 368–389. 21 See Statute of the International Court of Justice (adopted 26 June 1945, entered into force 24 October 1945) USTS 993, Art. 34(1) (‘Only States may be parties in cases before the Court’). 22 See Charter of the United Nations (adopted 26 June 1945, entered into force 24 October 1945) 1 USTS 993, Art. 96: 1. The General Assembly or the Security Council may request the International Court of Justice to give an advisory opinion on any legal question. 2. Other organs of the United Nations and specialized agencies, which may at any time be so authorized by the General Assembly, may also request advisory opinions of the Court on legal questions arising within the scope of their activities.

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about an undesirable intervention by States and that, therefore, the tribunal’s exclusive power to determine its own jurisdiction should be upheld (ibid., pp. 59, 290, 354, 439–440, 533–534, 578). Eventually, the Chairman recorded the general consensus of the delegates that the provision providing for the ICJ’s jurisdiction would in no case enable a State, party to proceedings pursuant to the Convention, to frustrate those proceedings by a referral of the matter to the ICJ (History, Vol. II, p. 906) (see also Art. 27, para. 31). While it is, therefore, clear that the ICJ will not determine the competence of a tribunal in proceedings pending before ICSID, this does not affect the general jurisdiction of the ICJ concerning the interpretation or application of the Convention. No case concerning the competence of an ICSID tribunal or any other question arising from the Convention has ever been brought to the ICJ.

16

b) The Secretary-General’s Screening Power Under Art. 36(3) the Secretary-General shall register the request for arbitration unless he or she finds, based on the information contained in the request, that the dispute is manifestly outside the Centre’s jurisdiction. In the course of the Convention’s drafting, there were various suggestions to entrust the determination of the tribunal’s competence to one of the Centre’s administrative bodies or to an ad hoc committee (History, Vol. II, pp. 409, 451, 653, 770). Eventually, the view prevailed that the Secretary-General’s decision was to be purely preliminary and that the actual decision on jurisdiction would be left to the tribunal (ibid., pp. 508, 769). The Report of the Executive Directors on the Convention contains the following clarification:

17

18

41. . . . It is to be noted in this connection that the power of the Secretary-General to refuse registration of a request for conciliation or arbitration . . . is so narrowly defined as not to encroach on the prerogative of Commissions and Tribunals to determine their own competence and, on the other hand, that registration of a request by the SecretaryGeneral does not, of course, preclude a Commission or Tribunal from finding that the dispute is outside the jurisdiction of the Centre.23

Rule 7(e) of the Institution Rules also makes clear that the registration of a request for arbitration is without prejudice to the tribunal’s power to decide on jurisdiction and competence:

19

The notice of registration of a request shall: ... (e) remind the parties that the registration of the request is without prejudice to the powers and functions of the Conciliation Commission or Arbitral Tribunal in regard to jurisdiction, competence and the merits . . .

Therefore, a tribunal remains free to decline jurisdiction, even if the SecretaryGeneral has found that the dispute is not manifestly outside the Centre’s jurisdiction.24

23 (1993) 1 ICSID Reports 23, 31. 24 See also Note A to Arbitration Rule 41 (1968), (1993) 1 ICSID Reports 101; Broches (n 8) 664.

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ICSID tribunals have confirmed this principle. In Holiday Inns v Morocco, the Tribunal rejected an argument that ICSID had tacitly recognized a particular position on a point of jurisdiction by the very fact of registration of the request. The Tribunal found that such registration ‘does not of course preclude a finding by the Tribunal that the dispute is outside the jurisdiction of the Centre.’25 In Mihaly v Sri Lanka, the Tribunal confirmed that the Request’s registration in no way prejudiced its power to examine its own competence. The Tribunal said: the fact of the registration of this case as ICSID Case No ARB/00/2 constituted an indication that, on the basis of the information contained in the request for arbitration, the dispute was not manifestly outside the jurisdiction of the Centre. Such registration is naturally without prejudice to the further examination of arguments of evidence presented by the Parties on issues of jurisdiction. The Tribunal is competent to determine the limits of its own competence.26

23

The Tribunal in Cambodia Power v Cambodia mentioned explicitly that it is not bound in its decision on jurisdiction by the request’s registration by the SecretaryGeneral: It is clear that the decision of the Secretary-General to register a single arbitral proceeding does not bind this Tribunal, which has to consider the jurisdictional arguments raised de novo.27

24

A tribunal is not necessarily restricted to the basis of jurisdiction underlying the Secretary-General’s decision to register the request. In Plama v Bulgaria, the Respondent argued that the Request for Arbitration had been registered on the basis of the Energy Charter Treaty (ECT), but not on the basis of the bilateral investment treaty (BIT) between Bulgaria and Cyprus.28 The Tribunal found that the BIT, by its terms, did not establish its competence.29 The Tribunal added that the Request for Arbitration had been registered without any limitation. It was up to the Tribunal under Art. 41 to determine its own competence.30

c) Domestic Courts 25

Art. 26 of the Convention provides that, unless otherwise stated, consent to ICSID arbitration shall exclude other remedies. Art. 26 operates from the moment of consent. Therefore, whether a valid submission to ICSID arbitration exists may well be relevant 25 Holiday Inns v Morocco, Decision on Jurisdiction (1 July 1973) (as reported in Pierre Lalive, ‘The First “World Bank” Arbitration (Holiday Inns v. Morocco) – Some Legal Problems’ (1980) 51 BYBIL 123, 144, fn 2). See also Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 8; SOABI v Senegal, Dissenting Opinion Mbaye (25 February 1988) paras 101–104; AMT v Zaire, Award (21 February 1997) para 5.01; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) fn 165; Wintershall v Argentina, Award (8 December 2008) para 71; Abaclat and others v Argentina, Procedural Order No 11 (27 June 2012) paras 25–26; Menzies v Senegal, Procedural Order No 2 (2 December 2015) para 109; Lidercón v Peru, Award (6 March 2020) 158–159. 26 Mihaly v Sri Lanka, Award (15 March 2002) para 57. See also Zhinvali v Georgia, Award (24 January 2003) para 13. 27 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 119. See also eg Abaclat and others v Argentina, Procedural Order No 11 (27 June 2012) para 26. 28 Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 38, 52, 67. 29 ibid paras 183–227. 30 ibid paras 231–234.

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to a domestic court’s or other decision-maker’s determination of its own competence (see Art. 26, para. 6). It is only after ICSID proceedings have been instituted that Art. 41(1) begins to operate. From this moment, any question of competing competence is up to the tribunal. Domestic courts of ICSID Contracting States must defer to the tribunal’s decision on its own jurisdiction. This is so even in cases were an incompatibility with national constitutional law or EU law is alleged.31 In Mobil Oil v New Zealand, the case had been registered with ICSID in April 1987. Shortly thereafter, the Government commenced proceedings in the New Zealand courts to obtain an interim injunction seeking to restrain Mobil from continuing the proceedings before ICSID. The Government argued that the dispute was outside ICSID’s jurisdiction. Mobil applied for a stay of the proceedings. The New Zealand High Court granted the stay of proceedings until the ICSID tribunal had determined its jurisdiction.32 The Court based its decision on a variety of reasons (see Art. 26, paras. 255–259) including the ICSID tribunal’s power under Art. 41.33 In SGS v Pakistan, a Request for Arbitration had been registered by ICSID when the Supreme Court of Pakistan issued a judgment restraining SGS from pursuing or participating in the ICSID arbitration. The judgment was based mainly on a finding that there was no investment in the sense of the applicable BIT and that SGS had waived the right to avail itself of ICSID arbitration.34 Thirteen months later, the ICSID Tribunal determined its own jurisdiction, finding that the activities in question constituted an investment under the applicable BIT as well as under the ICSID Convention.35 It found that it had jurisdiction over SGS’s claims arising from the applicable BIT, but that it did not have jurisdiction over the claims arising from the contract that was the basis of the investment.36 An ICSID tribunal’s exclusive power to determine its own competence does not mean that it may not postpone its decision until a domestic court or a commercial arbitral tribunal has taken a decision that is of pertinence for its own decision. It may do this if it regards this as appropriate under the circumstances. This can for example be the case if a particular issue is already pending before a domestic court or another commercial arbitral tribunal (see also Art. 26, paras. 49–50, 122–127, 175–176).37 Under certain circumstances, a domestic court’s decision may also be preliminary to an issue of jurisdiction to be decided by an ICSID tribunal. In SPP v Egypt, the Claimants relied on an ICSID clause in Egyptian legislation as a basis for jurisdiction (see Art. 25, paras. 34, 790–792). ICSID arbitration was available only if there was no agreement between the parties on another mode of settlement.38 There was an agreement providing for ICC arbitration and an ICC award had been rendered in favor of the

31 32 33 34 35 36 37

For a discussion on the applicable law on issues of jurisdiction, see Art. 42, paras 4–5. Attorney-General v Mobil Oil NZ, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117. ibid 128. SGS v Pakistan, Judgment, Supreme Court of Pakistan (3 July 2002) (2005) 8 ICSID Reports 356. SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 140. ibid para 190. See eg SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 173–176; BIVAC v Paraguay, Further Decision on Jurisdiction (9 October 2012) paras 284–290. 38 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) paras 70–79.

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Claimants. Egypt had applied to the French courts for the annulment of the ICC award. The Tribunal decided to stay the proceedings before it until the French courts had finally resolved the question of whether the parties had agreed to submit their dispute to the ICC.39 The French Cour de cassation finally determined that Egypt had not consented to ICC arbitration.40 As a result, the ICSID Tribunal found that the parties had not agreed on another method of dispute resolution. Therefore, the clause in the Egyptian legislation operated to confer jurisdiction upon ICSID41 (see Art. 26, paras. 45–53). The delimitation of competences between ICSID tribunals and domestic courts is discussed in the context of Art. 26 (see Art. 26, paras. 230–254, 255–266, 267–292, 297–364).

2. Review of the Decision on Jurisdiction a) The International Court of Justice 31

During the Convention’s preparation, the debates on the respective powers of a tribunal and of the ICJ in matters of competence and jurisdiction (paras. 15, 16 supra) also turned to the question of a possible review of a tribunal’s decision by the ICJ. Mr. Broches emphasized that a tribunal’s decision on its competence should be final (History, Vol. II, pp. 440, 534, 910). This view is reflected in the Executive Directors’ Report on the Convention dealing with the jurisdiction of the ICJ under Art. 64: 45. . . . the provision does not confer jurisdiction on the Court to review the decision of a Conciliation Commission or Arbitral Tribunal as to its competence with respect to any dispute before it.42

b) Domestic Courts 32

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The Convention’s provisions on the recognition and enforcement of ICSID awards underline the self-contained nature of ICSID awards by disallowing any review by domestic courts. Art. 53(1) provides that an award is not subject to any appeal or other remedy outside the Convention’s system. Art. 54(1) enjoins Contracting States to recognize an ICSID award as binding and to enforce pecuniary obligations imposed by it, as if it were a final judgment of a domestic court. Therefore, the review normally exercised by domestic courts over commercial arbitration (see para. 29 supra) does not apply to ICSID awards (see Art. 54, paras. 3, 4, 103). Decisions on jurisdiction and competence by ICSID tribunals become part of the award by incorporation and enjoy binding force for domestic courts (see para. 122 infra).

c) Internal ICSID Review Procedure 34

The Convention provides for a number of precisely defined review procedures. They are supplementation and rectification (Art. 49(2)), interpretation (Art. 50), revision (Art. 51), and annulment (Art. 52). Of these, supplementation and rectification are

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ibid paras 80–88. Egypt v SPP, France, Cour de cassation (6 January 1987) (1995) 3 ICSID Reports 96. SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 117. (1992) 1 ICSID Reports 23, 33.

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incumbent on the original tribunal. Requests for interpretation and revision are to be submitted, if possible, to the original tribunal (see paras. 40–45 infra). Once the tribunal has rendered its final award, all preliminary decisions are encompassed in it (see para. 122 infra) and it is clear that these procedures are available also in respect of the tribunal’s determinations on jurisdiction.43 Annulment proceedings before ad hoc committees may take place after the award has been rendered. Art. 52 provides for the possible annulment of an award. It does not provide for the annulment of interim decisions. Tribunals routinely incorporate decisions that uphold jurisdiction into their awards. This is true even if jurisdiction is not joined to the merits, but the decision on jurisdiction is made in the form of a separate interim decision (see paras. 120–123 infra). If the tribunal makes a decision declining jurisdiction or competence, such a decision has to be rendered in the form of an award44 (see paras. 125–127 infra). A request for annulment of the award may also contend that a decision on jurisdiction on which the award is based suffered from one of the defects listed in Art. 52(1). A preliminary decision on jurisdiction is not subject to annulment proceedings before the tribunal has given its final award. In SPP v Egypt, the Tribunal had confirmed its jurisdiction. The Respondent filed an Application for Annulment of the Tribunal’s Decision on Jurisdiction. The Acting Secretary-General of ICSID notified the Respondent of his decision not to register the Application for Annulment on the ground that the Tribunal’s Decision was not an ‘award’ in the sense of Art. 52 of the Convention and Rule 50 of the Arbitration Rules.45 Apart from the wording of Art. 52, considerations of procedural economy also militate against the subjection of interim decisions to annulment (see Art. 52, paras. 67–75). Annulment proceedings against preliminary decisions on jurisdiction would lead to excessive delays. A concentration of annulment proceedings after the tribunal’s final award is the more efficient solution. The possibility that the tribunal proceeds with the merits without a valid jurisdictional base weighs less heavily.46 Requests for annulment connected with jurisdictional questions would normally be based on the ground that the tribunal has manifestly exceeded its powers in accordance with Art. 52(1)(b). Ad hoc committees have repeatedly examined decisions on jurisdiction contained in awards for alleged excess of powers (see Art. 52, paras. 189–218). It is clear that an affirmative decision on jurisdiction where jurisdiction does not, in fact, exist, may amount to an excess of powers in the sense of Art. 52(1)(b) of the Convention. A decision declining jurisdiction, where jurisdiction does, in fact, exist, also constitutes an excess of powers, although this may appear paradoxical at first sight.

43 In both Edenred v Hungary, Decision on Revision (7 February 2019) and Dan Cake v Hungary, Decision on Revision (25 February 2020) (both not public), the Respondent had asked for a revision of the determination of jurisdiction by the respective Tribunal after the Court of Justice of the European Union (CJEU) had handed down its judgment in Case C-284/16 Slovak Republic v Achmea BV (Judgment, 6 March 2018) ECLI:EU:C:2018:158. 44 Arbitration Rule 41(6). 45 SPP v Egypt, Award (20 May 1992) para 26; (1989) 6(1) News from ICSID 2. 46 See Moshe Hirsch, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Springer 1993) 46–47.

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Excess of powers infra petita is also an impermissible deviation from the terms of the arbitration agreement and may lead to annulment (see Art. 52, paras. 196–202).

3. Reconsideration of a Decision on Jurisdiction by the Tribunal 40

41

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For the arbitral tribunal itself, a decision on jurisdiction will be final in most contexts.47 This is particularly the case for decisions declining jurisdiction. Exceptionally, however, a tribunal may be asked to reconsider a decision on jurisdiction.48 However, Arbitration Rule 41(2) authorizes the tribunal to examine on its own initiative ‘at any stage of the proceeding, whether the dispute or any ancillary claim before it is within the jurisdiction of the Centre and within its own competence.’ This includes the power to reconsider a decision on jurisdiction. Therefore, decisions accepting jurisdiction may, as opposed to decisions declining jurisdiction, be revisited by tribunals during the same proceedings. It is disputed whether a tribunal may review a preliminary decision on jurisdiction informally, while the case is still pending before it. Decisions declining jurisdiction are rendered as awards and may only be subjected to review with the post-award remedies laid down in Arts. 49(2), 50, 51, and 52. The reaction of tribunals confronted with a request to reconsider a decision on jurisdiction has varied considerably. Some have reconsidered their decisions on jurisdiction without much ado.49 Others left it open whether they were empowered to reconsider a decision on jurisdiction and declined to do so on the facts.50 The majorities of the Tribunal in ConocoPhillips v Venezuela refused twice, in different composition, to reconsider their decision on jurisdiction considering them to be res judicata.51 The Tribunal in ConocoPhillips held in this respect: 20. As noted, the Respondent characterises the Decision as ‘interim’ or ‘preliminary’ and, accordingly, capable of being reconsidered, perhaps on an informal basis. . . .

47 See Catharine Titi, ‘Res Iudicata and Interlocutory Decision under the ICSID Convention: Antinomies over the Power of Tribunals to Review’ (2018) 33 ICSID Rev 358. 48 On belated jurisdictional objections, see paras 58–60 infra. 49 See eg CSOB v Slovakia, Decision on Further and Partial Objection to Jurisdiction (1 December 2000) para 23; Tokios Tokelės v Ukraine, Award (26 July 2007) paras 5, 27, 96–112; Helnan v Egypt, Award (3 July 2008) paras 87, 111–113 (relied on the power in Arbitration Rule 41(2)). 50 See eg Quiborax v Bolivia, Award (16 September 2015) paras 130 and 541, which seem to contradict each other. 51 ConocoPhillips v Venezuela, Decision on Reconsideration (10 March 2014) para 21 and ibid, Decision on Reconsideration (9 February 2016) para 33. The first Decision on Reconsideration was rendered by Arbitrators Keith, Fortier, and Abi-Saab, with the latter issuing a dissenting opinion on the matter. AbiSaab expressed the view that only an award is final and the Tribunal had the power to reconsider its decision on jurisdiction and liability. After his resignation and the reconstitution of the Tribunal (now joined by Bucher), the arbitrators – again – decided negatively on the Respondent’s renewed Request for Reconsideration and Bucher dissented. In an interim decision of 17 January 2017, the Tribunal, by then constituted of Arbitrators Zuleta (President), Bucher, and Fortier, rejected a third request for reconsideration after discussing the content of the application and thereby seemingly implying that the Tribunal enjoys an authority to reconsider prior rulings. It added that the dismissal was regardless of whether it had power to consider it. See ibid, Interim Decision (17 January 2017) para 62.

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21. Those decisions in accordance with practice are to be incorporated in the Award. It is established as a matter of principle and practice that such decisions that resolve points in dispute between the Parties have res judicata effect. ‘They are intended to be final and not to be revisited by the Parties or the Tribunal in any later phase of their arbitration proceedings.’52

Other Tribunals found that they had the power to reconsider decisions on jurisdiction.53 The Tribunal in Standard Chartered Bank v TANESCO held that it had the power to reconsider its decision on jurisdiction. It focused on the difference between a decision and an award and found that only the latter had res judicata effect. It pointed to the fact that there is a requirement for incorporation of earlier decisions into the award and that only the award triggers an obligation to recognize and enforce it.54 It stated:

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The Tribunal is of the view that it is incorrect to characterize the decisions of ICSID tribunals, as opposed to their awards, as res judicata. They are binding within the scope of the proceedings but do not impose obligations upon the parties or other Contracting States outside the proceedings as is the case with awards that are res judicata.55

The ad hoc Committee in Standard Chartered Bank v TANESCO endorsed the approach of the Tribunal and stressed the Kompetenz-Kompetenz power conferred on the Tribunal by Art. 41(1) of the ICSID Convention, as well as the wording of Arbitration Rule 41(2). It found that:

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the clear wording of ICSID Arbitration Rule 41(2), allowing a tribunal to consider jurisdictional objections ‘at any stage of the proceedings’, i.e. including after having already rendered an interlocutory decision on jurisdiction, implies that such earlier findings on jurisdiction are subject to reconsideration.56

While in principle allowing for reconsideration of decisions, the Tribunal in Standard Chartered Bank v TANESCO distinguished between the power to reconsider a decision and the appropriateness of doing so. Art. 51 of the ICSID Convention (revision of awards) guided the Tribunal as to whether a reconsideration should be granted.57 The ad hoc Committee agreed that the opportunity to seek reconsideration of an interlocutory decision should not be unlimited since this would impair the efficiency of the arbitral process.58

52 ConocoPhillips v Venezuela, Decision on Reconsideration (10 March 2014) paras 20, 21 (quoting Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 10.1). See also Perenco v Ecuador, Decision on Reconsideration (10 April 2015) para 81 (expressing the Tribunal’s general agreement with the approach taken in ConocoPhillips v Venezuela). 53 Standard Chartered Bank v TANESCO, Award (12 September 2016) paras 307–320 and ibid, Decision on Annulment (22 August 2018) paras 150–173; Pac Rim v El Salvador, Award (14 October 2016) para 5.50. See also Burlington v Ecuador, Decision on Reconsideration and Award (7 February 2017) para 92. 54 Standard Chartered Bank v TANESCO, Award (12 September 2016) para 309. 55 ibid para 318. 56 ibid, Decision on Annulment (22 August 2018) paras 152, 153. 57 ibid, Award (12 September 2016) paras 318–322. The ad hoc Committee in Standard Chartered Bank also endorsed this approach, see ibid, Decision on Annulment (22 August 2018) paras 160–173. 58 ibid para 172.

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B. ‘(2) Any objection by a party to the dispute . . .’

1. Preliminary Objections 46

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Preliminary objections are a standard feature in ICSID arbitration. In the majority of cases, tribunals are confronted with the argument that they lack jurisdiction or competence either entirely or at least with regard to some of the claims put forward. This argument is normally couched in terms of formal preliminary objections. At times, tribunals have also looked at arguments expressed in more tentative terms such as ‘doubts’59 and ‘questions.’60 As might be expected, preliminary objections usually come from the respondent in the case. Sometimes, respondents make counterclaims and the original claimants will contest the tribunal’s competence with respect to the counterclaim.61

2. Timeliness of Preliminary Objections a) As Early as Possible 48

Since preliminary objections are preliminary in character, they must be raised as early as possible. To this effect, the Arbitration Rules contain the following provision: Rule 41 Preliminary Objections (1) Any objection that the dispute or any ancillary claim is not within the jurisdiction of the Centre or, for other reasons, is not within the competence of the Tribunal shall be made as early as possible. A party shall file the objection with the Secretary-General no later than the expiration of the time limit fixed for the filing of the counter-memorial, or, if the objection relates to an ancillary claim, for the filing of the rejoinder – unless the facts on which the objection is based are unknown to the party at that time.62

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The primary rule under Rule 41 is that preliminary objections have to be made ‘as early as possible.’ In Desert Line v Yemen, the Respondent waited until the last day of the time fixed for the filing of its counter-memorial to file its objections to jurisdiction.63 The Tribunal found it difficult to accept that the objections could not have been made earlier, but ultimately nevertheless examined and disposed of them. It said: The fact that objections shall be filed with ICSID ‘no later’ than the deadline for the Counter-Memorial does not mean that the Respondent was not bound to raise them before that date, if such objections were or ought to have been already manifest, in view of the ‘as early as possible’ requirement in the first sentence of Article 41.64

59 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 12. 60 SPP v Egypt, Decision on Jurisdiction II (14 April 1988) para 54. 61 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 13–18; Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, para 3.1.2; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 9. 62 See also Note C to Arbitration Rule 41 of 1968, (1993) 1 ICSID Reports 102. See also the parallel provision in Art. 45(2) of the Arbitration (Additional Facility) Rules. 63 Desert Line v Yemen, Award (6 February 2008) para 90. 64 ibid para 97.

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In Micula v Romania II, the Claimant argued that the Respondent’s objection to the jurisdiction of the Tribunal based on the judgment of the Court of Justice of the European Union (CJEU) in Achmea was belated.65 The Tribunal accepted that the objections could not have been made earlier:

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260. The Tribunal considers that the objection made by the Respondent on the basis of the Achmea Decision falls within the framework of Rule 41(1) justifying late jurisdictional objections. A late objection may be made, according to Rule 41(1), when ‘the facts on which the objection is based’ are unknown to the party at the time for making an objection. . . . 263. In light of this, the Tribunal concludes that the terms of Rule 41(1) are met, and it is appropriate for the Tribunal to consider this objection, notwithstanding that it has been brought late in the proceedings.66

In contrast, the Tribunal in Gavrilović v Croatia concerning the same CJEU judgment considered that the ‘Respondent has not raised the supplementary preliminary objections “as early as possible”, as required by ICSID Arbitration Rule 41(1).’67 The Tribunal considered first that the legal questions concerning the impact of EU law on the jurisdiction of investment treaty tribunals were not new. Second, many of the facts concerning Achmea, that is, the procedural steps leading to the preliminary ruling of the CJEU, were not new. The whole ‘Achmea issue,’ including the referral to the CJEU of the question whether Arts. 267 and 344 of the Treaty on the Functioning of the European Union precluded the application of a provision in a BIT between EU Member States under which an investor of one Member State could bring arbitration proceedings against another Member State had been public knowledge for some time. While the outcome of the CJEU judgment was not foreseeable, the facts were known to the Respondent which could, as a minimum, have stated that it reserved the right to raise a preliminary objection in case the CJEU ruled in favor of Slovakia in the Achmea proceedings. Alternatively, the Respondent could have requested that the Tribunal suspended the proceedings until the judgment was rendered. Since the Respondent did not raise the potential incompatibility of the BIT with EU law, made no reservations of rights, and only raised the objection once the Tribunal had already informed the parties that it expected the award to be issued in a few months, the Tribunal considered the objection as untimely.68 Preliminary objections are sometimes filed with considerable speed even before the tribunal’s constitution69 or soon thereafter.70 The first session of the tribunal is an obvious opportunity to raise preliminary objections.71 In some cases, objections to 65 66 67 68 69

Micula v Romania II, Award (5 March 2020) paras 243–247. ibid paras 260, 263. See also paras 62–63 infra. Gavrilović v Croatia, Decision on Respondent’s Request of 4 April 2018 (30 April 2018) para 39. ibid paras 39–48. SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 5; Generation Ukraine v Ukraine, Award (16 September 2003) paras 4.10–4.18. 70 Vacuum Salt v Ghana, Award (16 February 1994) para 12. In Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 198, 199, the Claimant unsuccessfully argued that the Respondent should have waited until the memorial on the merits before raising its jurisdictional objections. 71 Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 9; Gruslin v Malaysia II, Award (27 November 2000) para 6.5; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 9–11; Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) paras 9, 10.

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jurisdiction were raised only after a memorial on the merits had been submitted by claimants.72

b) No Later than the Deadline for the Counter-Memorial 53

The deadline provided by Arbitration Rule 41 for the filing of preliminary objections is the time limit fixed for the counter-memorial. If the respondent raises preliminary objections early on in the proceedings, it may get a second chance to do so. In CSOB v Slovakia, the Respondent declared its intention to raise preliminary objections at the Tribunal’s first session. The parties addressed these objections extensively in a series of written and oral pleadings.73 After a Decision on Jurisdiction was rendered, the Claimant filed its Memorial on the Merits. Thereupon, within the time limit for its Counter-Memorial, the Respondent filed a Further and Partial Objection to Jurisdiction. After confirming its competence in a second jurisdictional decision,74 the Tribunal proceeded to the merits of the case.75

c) Deadline for Jurisdictional Objections to Ancillary Claims 54

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If the respondent makes a counterclaim, the procedure is somewhat more complicated. Normally, counterclaims will not be advanced before the filing of the respondent’s counter-memorial. Therefore, the claimant can only raise preliminary objections to the counterclaims in its reply memorial.76 Additional claims (see Art. 46, paras. 40–48) are typically raised after the claimant’s first pleading, especially in its reply. Arbitration Rule 41(1) gives the respondent the opportunity to raise preliminary objections against these until its rejoinder is due. In Atlantic Triton v Guinea, the Government’s Counter-Memorial of January 1985 contained counterclaims. Atlantic Triton implicitly raised jurisdictional objections to the counterclaims in its Reply Memorial of 6 March 1985. After a Memorial in Rejoinder from the Government of 29 April 1985, Atlantic Triton filed another Memorial in Rejoinder on the counterclaims on 13 August 1985 in which it explicitly raised the lack of jurisdiction. The Tribunal upheld these preliminary objections to the counterclaims in its final award.77

d) Subsequently Discovered Facts 56

If the facts on which a preliminary objection may be based are unknown before the expiration of these time limits, Arbitration Rule 41(1) provides that the objection may

72 See eg Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.7; Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 3; SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 12; AMT v Zaire, Award (21 February 1997) paras 4.02, 4.03; Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 5–7; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 50; Enron v Argentina, Award (22 May 2007) para 14; Dan Cake v Hungary, Decision on Stay of Enforcement (Revision Proceeding) (25 December 2018) para 2; Blusun v Italy, Decision on Annulment (13 April 2020) para 323. 73 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 7. 74 CSOB v Slovakia, Decision on Further and Partial Objection to Jurisdiction (1 December 2000). 75 CSOB v Slovakia, Award (29 December 2004) paras 3–5. 76 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 13–14 and ibid, Decision on Annulment (3 May 1985) para 5. 77 Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 39.

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be raised later. The knowledge of facts means that the facts were known to the Respondent or ought reasonably to have been so known.78 For instance, the State party to the proceeding may at a later stage become aware of the fact that the other party is its national.79 It is impossible to provide time limits for this contingency, but it is clear that such objections must be raised immediately once the relevant facts come to light. In Vattenfall v Germany, the Tribunal decided that the judgment of the CJEU in Achmea amounted to a new situation that entitled the Respondent to raise its jurisdictional objection in accordance with Arbitration Rule 41(1). The objection was raised six years after the proceedings had been initiated and 18 months after the hearing. The Tribunal considered the existence of the CJEU’s Achmea judgment, which was unknown before its issuance, as a fact and said:

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98. The Tribunal considers that the ECJ [i.e., European Court of Justice] Judgment amounts to a new situation that entitled Respondent to raise its jurisdictional objection . . . Respondent is not estopped from raising this jurisdictional objection under ICSID Rule 41, for the following reasons. 99. The Tribunal does not agree with Claimants’ contention that the ECJ Judgment does not constitute a ‘fact’ under ICSID Rule 41(1). What constitutes a ‘fact’ under ICSID Rule 41(1) is the very existence of the ECJ Judgment, which was unknown to the Parties prior to the Judgment’s issuance on 6 March 2018. . . . the nature of the ECJ Judgment as a legal instrument does not exclude it from being a new ‘fact’ for the purposes of ICSID Rule 41(1).80

e) Consequence of Untimely Objection In a number of cases, respondents submitted preliminary objections outside the time limits provided by Arbitration Rule 41(1). The reaction of tribunals to these belated preliminary objections is not uniform.81 In some cases, the tribunals declared that a belated objection would not be taken into consideration.82 In other cases, the tribunals also dismissed preliminary objections as belated, but found it appropriate to point out that the objections were also unmeritorious.83 In Siag v Egypt, the Tribunal went as far as declaring that belated preliminary objections had been waived and had to be disregarded.84 However, ‘for the sake of completeness’ it examined and dismissed them as

78 Desert Line v Yemen, Award (6 February 2008) para 97; Siag v Egypt, Award (1 June 2009) para 293; Gavrilović v Croatia, Decision on Respondent’s Request of 4 April 2018 (30 April 2018) para 41; Besserglik v Mozambique (AF), Award (28 October 2019) para 269. 79 See Note C to Arbitration Rule 41 of 1968, (1993) 1 ICSID Reports 102. 80 Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) paras 98, 99. See also eg Micula v Romania II, Award (5 March 2020) paras 260, 263. 81 See also Holiday Inns v Morocco, Decision on Jurisdiction (12 May 1974) (as reported in Lalive (n 25) 160) (where the Tribunal avoided a formal pronouncement on the admissibility of a second objection). 82 Autopista v Venezuela, Award (23 September 2003) para 90; Quiborax v Bolivia, Award (16 September 2015) para 541 (the Tribunal did not refer to the time limits in Arbitration Rule 41(1)); Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) paras 175–177; Vestey v Venezuela, Award (15 April 2016) paras 149–150; Fábrica de Vidrios v Venezuela, Award (13 November 2017) paras 65, 169. 83 Generation Ukraine v Ukraine, Award (16 September 2003) para 16.1; Siemens v Argentina, Award (6 February 2007) para 68; Desert Line v Yemen, Award (6 February 2008) paras 97–98; El Paso v Argentina, Award (31 October 2011) para 147; Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 163. 84 Siag v Egypt, Award (1 June 2009) paras 206, 207, 311–360.

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unmeritorious. Yet another Tribunal found that the new objection ‘could have been raised sooner,’ but agreed to examine it.85 Concerning objections made after a decision on jurisdiction, much depended on the specific facts of the case, for example, whether and when new facts had been discovered and whether the objections were made ‘as early as possible.’86 In AIG v Kazakhstan, the Respondent filed its objections to jurisdiction two and a half months after the time limit originally fixed for the filing of its counter-memorial. The Claimant argued that these belated objections should not be entertained. The Tribunal squarely rejected this contention. It said: In the opinion of the Tribunal this plea cannot be accepted. Objections to the jurisdiction of an adjudicatory body cannot be ignored, if raised during the arbitral proceedings – delay notwithstanding. Mere tardiness in raising a point of jurisdiction cannot preclude it being considered by the Tribunal at a later stage: so long as the same is raised in the course of the arbitral proceedings. Rule 41 of the Arbitration Rules (Objection to Jurisdiction) cannot and does not negate the mandate of Article 41 of the Convention: the latter requires a Tribunal to determine every objection to jurisdiction. The time limits prescribed in Rule 41(1) and the requirement that every objection as to jurisdiction or competence of the Tribunal shall be made ‘as early as possible’ is intended to alert the parties to bring forth their objections, basic to the dispute being adjudicated upon on merits, at the earliest possible point of time. It appears to be rationally and reasonably related only to the expeditious disposal of ICSID arbitral proceedings. It cannot be read as coercive. It could not for instance empower the Arbitral Tribunal to grant relief to a Claimant when there is apparently no jurisdiction of the Centre or the Tribunal to entertain and try the case. The plea of the Claimants based on Article 41 of the Arbitration Rules must therefore stand rejected.87

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The inadmissibility of submissions filed outside time limits would not make sense in the context of Art. 41. Under Arbitration Rule 41(2) the tribunal may examine questions of jurisdiction and competence at any time (see para. 64 infra) and may be expected to do so even if a party’s submissions are out of order. Several tribunals have held that

85 Helnan v Egypt, Award (3 July 2008) paras 87, 111–113. 86 See eg CSOB v Slovakia, Decision on Further and Partial Objection to Jurisdiction (1 December 2000) (within the time limit for the Counter-Memorial, after decision on jurisdiction a Further and Partial Objection to Jurisdiction; the Tribunal confirmed its competence; from the circumstances objections were made ‘as early as possible’); Autopista v Venezuela, Award (23 September 2003) para 90 (rejected as belated because after Decision on Jurisdiction); Tokios Tokelės v Ukraine, Award (26 July 2007) paras 5, 27, 96–112 (disclosure of information by the Claimants led to further objection to jurisdiction; the Tribunal declined to rule immediately on these objections, but disposed of them in its Award); Siemens v Argentina, Award (6 February 2007) para 68 (the Tribunal declined to review its finding on jurisdiction in view of recent decisions submitted by the Respondent in its submissions on the merits; found it appropriate to distinguish the new cases relied upon); Helnan v Egypt, Award (3 July 2008) paras 87, 111–13 (although the Tribunal found that the new objection ‘could have been raised sooner,’ it agreed to examine it); Siag v Egypt, Award (1 June 2009) paras 108, 136, 190, 226, 305 (well over a year after the time limit for submissions on jurisdiction, considered the right to object as waived). 87 AIG v Kazakhstan, Award (7 October 2003) para 9.2.

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failure by a party to adhere to the time limits of Arbitration Rule 41(1) did not affect their duty to satisfy themselves that all jurisdictional requirements were fulfilled.88 The Tribunal in Vattenfall v Germany pointed out that the objection was not untimely since the judgment of the CJEU that gave rise to the objection was a new fact (see para. 57 supra).89 In addition, the Tribunal confirmed that it had ex officio powers to consider jurisdictional matters at any stage of the proceedings under Rule 41(2) (see paras. 64–82 infra). It stated that it would have exercised those powers if needed in this case:

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[T]he Tribunal notes that in respect of the issue of intra-EU investor–State arbitration under the ECT and any implications of EU law, the Tribunal would have exercised its power to examine its jurisdiction ex officio, even in the absence of a jurisdictional objection by Respondent.90

This decision contrasts sharply with the one of the Tribunal in Gavrilović v Croatia concerning the same CJEU judgment. Unlike Vattenfall, which is based on the ECT, Gavrilović was based on a BIT. The Gavrilović tribunal considered that the judgment was not a new fact, but that the Respondent’s objection was untimely and therefore inadmissible (see also para. 51 supra).91 In Antin v Spain, a case also based on the ECT, the Respondent also raised an ‘Achmea objection,’ this time in an application to reopen the proceedings that had been closed in February 2018. The Tribunal denied the application in an unpublished procedural order.92

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3. Examination of Jurisdiction and Competence on the Tribunal’s Initiative During the Convention’s drafting, the preponderant view was that a tribunal would not only have to deal with objections to the jurisdiction of the Centre or its competence by the parties, but would also have the power to deal with such questions of its own motion (History, Vol. II, pp. 271, 399, 407, 409, 702). This principle is reflected in Arbitration Rule 41(2) which provides:

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The Tribunal may on its own initiative consider, at any stage of the proceeding, whether the dispute or any ancillary claim before it is within the jurisdiction of the Centre and within its own competence.93

The tribunal’s authority to examine questions of jurisdiction and competence on its own initiative is essential. This authority is designed to avoid awards that exceed the tribunal’s powers (see paras. 38–39 supra) if the parties failed to make preliminary objections or filed them outside time limits. Tribunals have stressed this ‘broad power to

88 Gruslin v Malaysia II, Award (27 November 2000) para 19.7; Zhinvali v Georgia, Award (24 January 2003) paras 286, 313–324, and ibid, Separate Opinion Jacovides (24 January 2003) paras 10, 12, 21; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 44, 68. 89 Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) para 103. 90 ibid para 106. 91 Gavrilović v Croatia, Decision on Respondent’s Request of 4 April 2018 (30 April 2018) paras 39–48. 92 Antin v Spain, Award (15 June 2018) para 56. 93 See also the parallel provision in Art. 45(3) of the Arbitration (Additional Facility) Rules.

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consider any issues relating to [their] jurisdiction on an ex officio basis, and at any stage of the proceedings.’94 However, tribunals have stressed that this does not absolve the parties from complying with their obligation to file objections as early as possible. In some cases in which respondents violated this obligation, tribunals have refused to exercise their discretionary power to review their jurisdiction ex officio. The Tribunal in Vestey v Venezuela stated, ‘[t]he Tribunal’s discretionary power to review its jurisdiction ex officio does not absolve the parties from compliance with ICSID Arbitration Rule 41(1).’95 With respect to issues that concern the admissibility of a claim, a tribunal will generally only be obliged and able to take them up when a party (usually the responding party) will have raised it, since admissibility issues are generally waivable.96

a) Proceedings in which Both Parties Participate 68

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If the respondent appears before the tribunal it may reasonably be expected that it raises all pertinent preliminary objections. Normally, tribunals restrict themselves to the objections raised by the parties without going into other jurisdictional questions. However, tribunals have, at times, explicitly satisfied themselves of jurisdictional requirements that were not raised by the parties.97 The Tribunal in Metal-Tech v Uzbekistan stated in this respect that ‘it is the duty of a tribunal established on the basis of a treaty to verify its jurisdiction under that treaty, even if the parties have not objected to it.’98 Sometimes, tribunals have examined belated objections concerning the jurisdiction of the Centre or their competence based on their power to examine them on their own initiative.99 In Vattenfall v Germany (see para. 57 supra), the Tribunal decided that, independently of the fact that it considered the Respondent’s jurisdictional objections to be

94 See eg Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) para 105. See also İçkale v Turkmenistan, Award (8 March 2016) para 239; Pac Rim v El Salvador, Award (14 October 2016) para 5.50; Standard Chartered Bank v TANESCO, Decision on Annulment (22 August 2018) para 153; Besserglik v Mozambique (AF), Award (28 October 2019) paras 307–315. 95 Vestey v Venezuela, Award (15 April 2016) para 149. See also Gavrilović v Croatia, Decision on Respondent’s Request of 4 April 2018 (30 April 2018) para 47 (referring to Vestey with approval). 96 Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) para 94; Supervisión y Control v Costa Rica, Award (18 January 2017) para 273. 97 See eg SPP v Egypt, Decision on Jurisdiction I (27 November 1985) paras 46, 47; Cable TV v St Kitts and Nevis, Award (13 January 1997) para 5.03; AMT v Zaire, Award (21 February 1997) para 5.03; Santa Elena v Costa Rica, Award (17 February 2000) para 11; TANESCO v IPTL, Award (12 July 2001) para 13; CDC v Seychelles, Award (17 December 2003) paras 3–6; MTD v Chile, Award (25 May 2004) paras 90–97; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) paras 5, 6; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 71–74; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) paras 108–119. See also Fedax v Venezuela, Decision on Jurisdiction (11 July 1997) para 25; Micula v Romania I, Decision on Jurisdiction (24 September 2008) para 65; AES v Hungary, Award (23 September 2010) paras 5.2–6.5.5; Dan Cake v Hungary, Decision on Jurisdiction and Liability (24 August 2015) paras 67–79; Saint-Gobain v Venezuela, Decision on Liability and the Principles of Quantum (30 December 2016) paras 356–361. 98 Metal-Tech v Uzbekistan, Award (4 October 2013) para 123. 99 See eg Zhinvali v Georgia, Award (24 January 2003) paras 317, 321, 323, 324; Azurix v Argentina, Decision on Jurisdiction (8 December 2003) para 68; see also Gruslin v Malaysia II, Award (27 November 2000) para 19.7. On the consequences of untimely preliminary objections, see paras 58–60 supra.

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timely, it had the power to examine objections to its jurisdiction ex officio at any stage of the proceedings: 104. . . . However, the Tribunal notes that in any event, irrespective of the timeliness of Respondent’s objection, the Tribunal considers that it has broad power to examine issues relating to its jurisdiction on an ex officio basis. In this respect, ICSID Rule 41(2) is the basis of a tribunal’s power to assess, on ‘its own initiative . . . at any stage of the proceeding, whether the dispute or any ancillary claim before it is within the jurisdiction of the Centre and within its own competence’. 105. . . . In general, the provision [ICSID Rule 41(2)] is the repository of an ICSID tribunal’s broad power to consider any issues relating to its jurisdiction on an ex officio basis, and at any stage of the proceedings.100

In some cases, tribunals did not discuss preliminary questions, although they were contested in an earlier stage of the dispute. In MINE v Guinea, the institution of an ICSID arbitration had been preceded by lengthy proceedings before US courts and an arbitration procedure of the American Arbitration Association.101 A crucial question in these proceedings had been whether MINE met the ICSID Convention’s nationality requirements (see Art. 25, paras. 1199–1202). When the case was eventually brought to ICSID, the Secretary-General at first hesitated to register it and eventually did so, ‘without prejudice’ to the jurisdictional question.102 Before the Tribunal, neither party raised the fact that the Claimant appeared to be a national of a non-Contracting State. The Tribunal never addressed the question and proceeded to give a decision on the merits.103 The Tribunal chose to ignore an important jurisdictional question that had been debated extensively and of which the Tribunal must have been aware.104 In Mobil Oil v New Zealand, the question whether ICSID had jurisdiction over the case had also been the subject of proceedings in domestic courts. The New Zealand High Court had granted a stay of proceedings until the ICSID Tribunal had determined its jurisdiction105 (see para. 26 supra; Art. 26, paras. 256–259). However, the Government wrote to the ICSID tribunal that it no longer wished to challenge its jurisdiction. The Tribunal was content to record this statement without examining its jurisdiction proprio motu.106 In other cases, in which no jurisdictional objections were raised, the tribunals barely touched upon the question of their jurisdiction.107

100 101 102 103

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Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) paras 104–105. MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, paras 31–34. (1985) 2(1) News from ICSID 3; Hirsch (n 46) 88. The Tribunal only mentioned the issue of the Claimant’s nationality in passing in the context of whether Guinea was entitled to the reimbursement of legal fees arising from the US proceedings, see MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 76. See also MINE v Guinea, Decision on Annulment (22 December 1989) paras 1.01, 1.02, fn 1. See the criticism by Hirsch (n 46) 88–91. Attorney-General v Mobil Oil NZ, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117. Mobil Oil v New Zealand, Findings on Liability, Interpretation and Allied Issues (4 May 1989) para 2.9. See eg AAPL v Sri Lanka, Award (27 June 1990) paras 1, 2; Santa Elena v Costa Rica, Award (17 February 2000) para 11; CDC v Seychelles, Award (17 December 2003) para 6; Noble Ventures v Romania, Award (12 October 2005); World Duty Free v Kenya, Award (4 October 2006); Ortiz v Algeria, Award (29 April 2020) paras 134–141.

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Failure to raise jurisdictional objections may be interpreted as implicit consent to jurisdiction. Once the request for arbitration has cleared the hurdle of the SecretaryGeneral’s screening power under Art. 36(3), the parties may indicate their consent to jurisdiction by not raising jurisdictional questions.108 Therefore, forum prorogatum is a definite possibility in ICSID proceedings after a case has been registered successfully (see Art. 25, paras. 901–920). But it must be remembered that not all of the Convention’s jurisdictional requirements are subject to the parties’ disposition. The Convention also contains objective requirements (see Art. 25, paras. 2–9). Thus, the existence of a legal dispute arising directly out of an investment is an objective fact that must be ascertained independently of the parties’ consent (see Art. 25, paras. 68–70, 113–114, 178–186). Similarly, the parties’ agreement cannot replace the Convention’s nationality requirements (see Art. 25, paras. 1114–1115, 1138, 1198, 1328). Therefore, the tribunal may rely on a party’s failure to invoke the non-existence of its consent as an indication of its consent. But it cannot rely on the parties’ understanding when it comes to the Convention’s objective requirements.109 Failure to discuss a jurisdictional question in a published decision does not necessarily mean that a tribunal has not considered it. The obligation set out in Art. 48(3) of the Convention that the award shall deal with every question and state reasons only applies to questions submitted to the tribunal. It would not make sense to go through a ritualistic examination of all possible jurisdictional issues even if they do not give rise to any questions. But it is sensible and desirable for a tribunal to briefly discuss all jurisdictional questions that are relevant to the case, even if the parties have not raised them.

b) Proceedings in Which the Respondent Fails to Participate 76

If the respondent fails to appear and plead before the tribunal, the situation is somewhat different. Art. 45(1) of the Convention provides that failure of a party to appear or to present its case shall not be deemed an admission of the other party’s assertions (see Art. 45, paras. 14–18). Arbitration Rule 42(4) dealing with default proceedings directs that: The Tribunal shall examine the jurisdiction of the Centre and its own competence in the dispute and, if it is satisfied, decide whether the submissions made are well-founded in fact and in law. To this end, it may, at any stage of the proceeding, call on the party appearing to file observations, produce evidence or submit oral explanations.110

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It follows that, whereas in contested proceedings the tribunal ‘may consider’ questions concerning the jurisdiction of the Centre and its competence on its own initiative (see Arbitration Rule 41(2); see para. 64 supra), it ‘shall examine’ them ex officio in default proceedings (see Arbitration Rule 42(4)).

108 Broches (n 20) 367–368. See eg Dan Cake v Hungary, Decision on Jurisdiction and Liability (24 August 2015) para 78. 109 See also Kathigamar VSK Nathan, ‘Submission to the International Centre for Settlement of Investment Disputes in Breach of the Convention’ (1995) 12 J Int’l Arb 27, 39 ff. See also Besserglik v Mozambique (AF), Award (28 October 2019) paras 307–316, 318–324. 110 See also the parallel provision in Art. 48(3) of the Arbitration (Additional Facility) Rules.

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In Kaiser Bauxite v Jamaica, the Government failed to appear. The Tribunal decided that the question of the jurisdiction of the Centre and the competence of the Tribunal should be dealt with as a preliminary issue. It made a procedural order directing the Claimant to submit a memorial containing full argument on any issue of jurisdiction and competence and directing the Government to file a counter-memorial in reply. The Claimant filed its Memorial, but the Government did not respond. The Tribunal said:

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The Tribunal regrets that Jamaica has failed to appear and to bring forward any objections to the jurisdiction of the Centre and the competence of the Tribunal which it might entertain. The Tribunal, nevertheless, decided to examine its own jurisdiction proprio motu and in doing so to consider any objections which might be raised against its jurisdiction.111

The Tribunal proceeded to a detailed examination of the jurisdictional requirements, as set out in Art. 25 of the Convention, and concluded that the dispute was within the jurisdiction of the Centre and the competence of the Tribunal.112 The situation in LETCO v Liberia was similar. The Government declined to appear or present any case. The Tribunal requested both parties to submit their arguments concerning the jurisdiction of the Tribunal. LETCO submitted a Memorandum in support of jurisdiction, but Liberia did not respond.113 The Tribunal undertook a detailed and systematic examination of all jurisdictional requirements and concluded:

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Given the fact that Liberia had failed to file a pleading in this dispute, the Tribunal has raised the question of jurisdiction of its own initiative and required LETCO to submit evidence on this question. The evidence submitted has proven beyond a reasonable doubt that this Tribunal has jurisdiction within the meaning of Article 25 of the Convention and that it may now proceed to a consideration of the substance of the dispute between the parties.114

In Goetz v Burundi, the Respondent was represented intermittently in the proceedings.115 Burundi had reserved the right to raise jurisdictional objections but, in the end, had not done so. The Tribunal said: 78. No objection to the jurisdiction of the Centre or of the Tribunal has been raised by the Republic of Burundi in the course of the written or oral proceedings. 79. The Tribunal must do more, however, than make this statement, since Article 42 of the Arbitration Rules obliges it, if one party defaults or fails to put forward its side of the case, to examine whether the dispute is or is not ‘within the jurisdiction of the Centre and its own competence’.116

111 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 10. 112 ibid paras 11–25. For a description of the decision in a parallel case, see John T Schmidt, ‘Arbitration under the Auspices of the International Centre for Settlement of Investment Disputes (ICSID), Implications of the Decision on Jurisdiction in Alcoa Minerals of Jamaica Inc v Government of Jamaica’ (1976) 17 Harvard ILJ 90, 98 ff. 113 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 348. 114 LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 353 (reproduced as part of the final Award). 115 Goetz v Burundi, Award (10 February 1999) paras 50–57. 116 ibid paras 78, 79.

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The Tribunal proceeded to a full examination of the jurisdictional questions in the case.117

4. Relevant Time for the Determination of Jurisdiction, Competence, and Admissibility 83

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It is one of the most firmly established principles of international adjudication that the jurisdiction of an international court or tribunal is determined by reference to the date on which judicial proceedings are instituted. This means, in particular, that events taking place after that date will, in principle, not affect jurisdiction (see Art. 25, paras. 49–54).118 This approach also holds true as regards the jurisdiction of the Centre and the competence of an ICSID tribunal. The rule that the date of the institution of proceedings is decisive for determining whether the conditions for the jurisdiction and competence are met serves an obvious purpose. It would be unacceptable for either of them to disappear as a result of subsequent events, such as changes brought about by a State to defeat jurisdiction, while a case is pending, such as denouncing a treaty or changing the nationality of a person. ICSID tribunals have consistently followed the principle that the jurisdiction of the Centre and the competence of the tribunal are determined by reference to the date on which judicial proceedings are instituted.119 It follows that the critical time for the determination of a tribunal’s competence under Art. 41(1) is the date of the initiation of proceedings. Once established, any subsequent changes of relevant facts will not defeat the jurisdiction of the Centre, respectively a tribunal’s competence.120 Under certain conditions, requirements for a tribunal’s competence can also be complied with subsequently to the initiation of ICSID proceedings (see Art. 25, paras. 55–67).121 Concerning issues of admissibility, the ICJ has confirmed in the Lockerbie case that the critical date is equally the date on which it is filed.122 However, ICSID tribunals will

117 ibid paras 80–85. 118 See eg Malcolm N Shaw, International Law (8th edn, CUP 2017) 775. 119 Goetz v Burundi, Award (10 February 1999) para 72; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 60–64 (‘it is an accepted principle of international adjudication that jurisdiction will be determined in the light of the situation as it existed on the date the proceedings were instituted.’); Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 178 (‘the arbitral tribunal’s jurisdiction . . . according to the long-established jurisprudence of international tribunals of all kinds, is fixed as of the time the proceedings are commenced’); Enron v Argentina, Award (22 May 2007) paras 196–198, 396 (‘ICSID jurisdiction is determined on the date the arbitration is instituted’); Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 259. See also EnCana v Ecuador (UNCITRAL), Award (3 February 2006) paras 123, 126, 132; National Grid v Argentina (UNCITRAL), Decision on Jurisdiction (20 June 2006) paras 115, 117 (‘all the arbitral tribunals in the cases discussed by the parties . . . held that the critical date to meet the jurisdictional requirements is the date when the proceedings are instituted’); Achmea v Slovakia II (UNCITRAL), Award on Jurisdiction and Admissibility (20 May 2014) para 269 (‘an international tribunal’s jurisdiction must exist on the date of the institution of proceedings’). 120 Christoph Schreuer, ‘At What Time Must Jurisdiction Exist?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 264. 121 ibid 274–277. 122 Questions of Interpretation and Application of the 1971 Montreal Convention Arising from the Aerial Incident at Lockerbie (Libya v United States) (Preliminary Objections) [1998] ICJ Rep 115, 605.

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take into consideration when admissibility requirements are waived, subsequently fulfilled, or no longer fulfilled (see also para. 97 infra).123 C. ‘. . . that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Tribunal, . . .’

1. Jurisdiction and Competence In the Convention’s terminology, the word ‘jurisdiction’ refers to the requirements set out in Art. 25, which are conditional for the power of a conciliation commission or an arbitral tribunal. ‘Competence’ in Art. 41(2) refers to the narrower issues of the power of a specific ICSID tribunal to exercise the jurisdiction bestowed upon the Centre and resolve a particular dispute.124 The Convention’s English text is consistent in distinguishing between the jurisdiction of the Centre and the competence of the Commission or Tribunals125 (see Art. 25, para. 24). It is the task of tribunals to decide upon issues of jurisdiction and competence. However, the Convention’s distinction between jurisdiction and competence has not produced a relevant body of case law, probably due to the fact that tribunals decide upon both concepts and the legal consequences of determinations on jurisdiction and competence at the same time. In fact, tribunals often do not distinguish between the two concepts and often decide upon both under the heading of ‘jurisdiction.’126 Therefore, the distinction between both concepts is of little practical consequence. Tribunals must be satisfied that both elements (jurisdiction of the Centre and competence of the tribunal) are fulfilled. Thus, when Art. 41(1) says that the tribunal shall be the judge of its own competence, it is clear that the tribunal must also judge whether the Centre has jurisdiction in the case before it. That the jurisdiction of the Centre in the sense of Art. 25(1) is encompassed by the term ‘competence’ in Art. 41(1) is also clear from the wording of Art. 41(2), which speaks of an objection that the dispute is not within the Centre’s jurisdiction or for another reason not within the tribunal’s competence.

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2. Jurisdictional Issues The preparatory works to Art. 41(2) show an effort to detail the types of jurisdictionrelated issues that a party may raise before a tribunal. The Working Paper listed the existence of a dispute, the scope of consent, and the validity of consent (see History, Vol. I, p. 188). The Preliminary Draft added the nationality of a Contracting State (ibid.). In the

123 See eg Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 99–100; Biwater Gauff v Tanzania, Award (24 July 2008) para 434; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) para 135; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 144. 124 See also Georges R Delaume, ‘ICSID Arbitration Proceedings: Practical Aspects’ (1985) 5 Pace LR 563, 577; Shany (n 15). See also Abaclat and others v Argentina, Dissenting Opinion Abi-Saab (4 August 2011) para 12. 125 The Spanish text distinguishes between ‘jurisdicción’ and ‘competencia.’ The French text uses ‘compétence’ for both purposes. 126 See eg Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 10; Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 52 and ibid, Resubmitted Case: Decision on Jurisdiction (10 May 1988) (1993) 1 ICSID Reports 543, 565; Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 18; LETCO v Liberia, Decision on Jurisdiction (24 October 1984) (1994) 2 ICSID Reports 353 (reproduced as part of the final Award); Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 258–260.

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ensuing debate, a number of delegates pointed out that this list of possible preliminary objections was incomplete (History, Vol. II, pp. 321, 324, 325, 407, 451). It was suggested to clarify that the list was non-exhaustive and was not intended to exclude other jurisdictional issues (ibid., pp. 325, 406–407, 507, 567), or to refer to jurisdictional questions in general terms (ibid., pp. 498, 543, 567). The First Draft and the Revised Draft speak of a claim that the dispute is not one in respect of which arbitration proceedings can be instituted pursuant to the Convention, or is not within the scope of consent (History, Vol. I, p. 190). Eventually, the drafters replaced this formula by a general reference to the jurisdiction of the Centre or the competence of the Tribunal (History, Vol. II, p. 948). The practice of ICSID tribunals shows a broad range of jurisdictional questions covering nearly all items listed in Art. 25. The Commentary on Art. 25 discusses these questions in some detail. Therefore, it will suffice to list them here: s the existence of a dispute (Art. 25, paras. 71–78); s the legal nature of the dispute (Art. 25, paras. 81–101); s the existence of an investment (Art. 25, paras. 162–496); s the existence of a claim arising directly from an investment (Art. 25, paras. 113–161); s the status of one party as a Contracting State (Art. 25, paras. 497–509, 622–634); s the status of a constituent subdivision or agency (Art. 25, paras. 523–571, 635–642); s the nationality of the investor (Art. 25, paras. 1111–1115, 1116–1445); s the status and identity of the investor (Art. 25, paras. 574–601, 643–758); s the existence of consent to jurisdiction (Art. 25, paras. 759–947, 1446–1471); s the scope of consent to jurisdiction (Art. 25, paras. 948–1035); s the interpretation of consent to jurisdiction (Art. 25, paras. 1036–1056); s the withdrawal of consent (Art. 25, paras. 1057–1110). In addition, parties to ICSID arbitration have at times put forward preliminary objections arising from Art. 26 (see para. 102 infra).

3. Other Preliminary Objections a) Admissibility 92

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The dispute settlement system of the ICSID Convention consists of three layers. A first layer circumscribes when the Centre may be used and is called ‘jurisdiction.’ A second layer is concerned with the competence of the tribunal to decide a particular case (see paras. 87–88 supra). A third layer concerns the admissibility of specific claims. This third layer is not explicitly mentioned in the Convention, but applied in practice by tribunals under the heading ‘admissibility’ of claims, in line with the general law of international dispute settlement.127 Although the term admissibility appears neither in the Convention nor in the Arbitration Rules, tribunals frequently address preliminary objections that are not of a jurisdictional nature. Under these admissibility objections, respondents typically request tribunals not to pass judgment upon a particular claim or at least not at that time. For example, in Gavrilović v Croatia, the Respondent had submitted two objections to admissibility based on the alleged illegality of the investment and on the existence of 127 See eg Heiskanen (n 18) 236.

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a forum selection clause in a purchase agreement for five companies. The Claimant argued that the concept of admissibility did not exist under the ICSID Convention. The Tribunal decided that both types of preliminary objections were relevant under the ICSID Convention and found that jurisdiction and admissibility are separate bases for preliminary objections. Thus, it is appropriate for the Tribunal to assess the Respondent’s admissibility objections separately from the Respondent’s objections to jurisdiction.128

The literature offers an extensive discussion on the concepts of jurisdiction and admissibility in the context of investment arbitration.129 Heiskanen considers admissibility and competence as two sides of the same coin.130 Steingruber disagrees and sees jurisdiction, competence, and admissibility as three different concepts.131 The absence of any mention of admissibility in the text of the Convention and in the Arbitration Rules has led some tribunals to conclude that the concept of admissibility is not useful in the context of the Convention.132 However, the characterization of a

128 Gavrilović v Croatia, Award (26 July 2018) para 413. 129 See Ian Laird, ‘A Distinction without a Difference? An Examination of the Concepts of Admissibility and Jurisdiction in Salini v Jordan and Methanex v USA’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases (Cameron May 2005) 201; Jan Paulsson, ‘Jurisdiction and Admissibility’ in Gerald Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC 2005) 601; David AR Williams, ‘Jurisdiction and Admissibility’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 868; Zachary Douglas, The International Law of Investment Claims (CUP 2009) 134–150; Gerold Zeiler, ‘Jurisdiction, Competence, and Admissibility of Claims in ICSID Arbitration Proceedings’ in Christina Binder and others (eds), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer (OUP 2009) 76; Lars Markert, Streitschlichtungsklauseln in Investitionsschutzabkommen: Zur Notwendigkeit der Differenzierung von jurisdiction und admissibility in Investitionsschiedsverfahren (Nomos 2010); Shany (n 15) 779 ff; Heiskanen (n 18) 231; Steingruber (n 16) 675; Veijo Heiskanen, ‘Comment on Andrea Marco Steingruber’s Remarks on Veijo Heiskanen’s Note “Ménage à trois? Jurisdiction and Admissibility and Competence in Investment Treaty Arbitration”’ (2014) 29 ICSID Rev 669; Laurent Gouiffès and Melissa Ordonez, ‘Jurisdiction and Admissibility: Are We Closer to a Line in the Sand?’ (2015) 31 Arb Int’l 107; Yas Banifatemi and Emmanuel Jacomy, ‘Compétence et recevabilité dans le droit de l’arbitrage en matière d’investissements’ in Charles Leben (ed), Droit international des investissements et de l’arbitrage transnational (Pedone 2015) 773; Waibel (n 14); Friedrich Rosenfeld, ‘Arbitral Praeliminaria – Reflections on the Distinction between Admissibility and Jurisdiction after BG v Argentina’ (2016) 29 Leiden JIL 137; Wehland (n 16) 227; Reinisch (n 14); Saar A Pauker, ‘Admissibility of Claims in Investment Treaty Arbitration’ (2018) 34 Arb Int’l 1; Filippo Fontanelli, Jurisdiction and Admissibility in Investment Arbitration: The Practice and the Theory (Brill 2018). 130 Heiskanen (n 18) 243. The Tribunal in Rompetrol v Romania, Decision on Jurisdiction (18 April 2008) para 112 also followed this line of argument and suggested that the wording ‘for other reasons, not within the competence of the Tribunal’ in Rule 41(1) had to be interpreted with a degree of flexibility. 131 Steingruber (n 16) 680. 132 See eg CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 41; LESI-DIPENTA v Algeria, Award (10 January 2005) pt II, para 2; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 85–87; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 54; Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 33; Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) para 7.2.4; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 2.10; Urbaser v Argentina, Decision on Jurisdiction (19 December 2012) paras 112–128; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 572–575; Alemanni and others v Argentina, Decision on Jurisdiction (17 November 2014) paras 257–260; Levy and Gremcitel v Peru, Award (9 January 2015) para 181.

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preliminary objection as jurisdictional or as relating to the admissibility of a claim has considerable consequences. Tribunals have to deal proprio motu (see paras. 74, 77 supra) with jurisdictional questions that are not waivable, whereas they will, in principle, only have to deal with issues of admissibility if raised by a party.133 The critical date for the assessment of objections to jurisdiction and admissibility may differ. For purposes of jurisdiction, the critical date is the date the request for arbitration is registered (see Art. 25, paras. 46–48). For issues of admissibility, this is not always the case, as later developments may be taken into consideration by tribunals.134 For example, waiting periods may be fulfilled while the arbitration is already ongoing (see also para. 86 supra). A claim may also become inadmissible during an ICSID arbitration proceeding if, for example, in case of a local litigation requirement a dispute has been resolved in domestic court proceedings during the required eighteen-month period.135 The Tribunal in Western NIS v Ukraine used this flexibility. It decided that ‘proper notice’ under the BIT did not affect the tribunal’s jurisdiction. But it considered the claim to be inadmissible as long as this deficiency had not been remedied, allowing accordingly for a certain period to remedy the deficient notice: 6. Proper notice of the present claim was not given. 7. This conclusion does not, in and of itself, affect the Tribunal’s jurisdiction. The Claimant should be given an opportunity to remedy the deficient notice. On the other hand, the proceedings should not be indefinitely suspended.136

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The Tribunal in Supervisión y Control v Costa Rica made the following observations concerning the characteristics of admissibility issues, among them the time period which is relevant for a decision on admissibility: On the other hand, admissibility’s characteristics are the following: (i) it affects the claims themselves and not the entire dispute itself submitted to arbitration; (ii) the relevant time period for its analysis starts from the beginning of the arbitration proceedings until the rendering of the award; and (iii) in general, conditions and requirements can be renounced by the parties.137

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The characterization as a question of jurisdiction or of admissibility also has consequences for the availability of post-award remedies. In case of a question of jurisdiction, the decision of a tribunal is open to review by an ad hoc committee for manifest excess of powers. The same is not true for a question of admissibility, which will in principle not be reviewable.138 The Tribunal in Supervisión y Control v Costa Rica succinctly summarized the different consequences that arise from the distinction between jurisdiction and admissibility. It said:

133 134 135 136 137 138

Waibel (n 14) 1275; Steingruber (n 16) 681. See eg Supervisión y Control v Costa Rica, Award (18 January 2017) para 272. Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 146. Western NIS v Ukraine, Order (16 March 2006) paras 6–7. Supervisión y Control v Costa Rica, Award (18 January 2017) para 273. Waibel (n 14) 1275; but see Fontanelli (n 129) 163–166.

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Several consequences arise from the distinction between jurisdiction and admissibility: a) There is greater procedural flexibility if the tribunal has jurisdiction. b) There are possible waivers of objections to admissibility. c) The tribunal is able to consider questions of jurisdiction proprio motu. d) Questions of admissibility are more likely to be addressed with the merits. e) Issues of admissibility generally cannot be reviewed. f ) A finding of inadmissibility does not become res judicata.139

While the distinction between jurisdiction and admissibility seems to be clear in theory, there are open issues concerning the distinction between these two concepts in practice.140 This is true for example for a number of objections that parties to ICSID arbitrations have put forward as jurisdictional objections arising from Art. 26: s the existence of another remedy (Art. 26, paras. 33–40, 44–53, 58–62, 101–167,

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172–176, 234, 235–238); s fork-in-the-road clauses (Art. 26, paras. 64–100); s litispendence (Art. 26, paras. 232–238); s exhaustion of local remedies (Art. 26, paras. 329–338).141 Depending on the formulation of the instruments of consent, especially on how procedural requirements are formulated in arbitration clauses, these and other requirements may affect consent, and are hence conditions for jurisdiction, or may merely qualify as issues of admissibility.142 This is also true for the following issues which have given rise to conflicting characterizations by tribunals as to whether they raise issues or jurisdiction or whether they concern admissibility: s timeliness of a claim (including additional claims);143 s waiting periods, domestic litigation, negotiation requirements;144 139 Supervisión y Control v Costa Rica, Award (18 January 2017) para 270 (referring to Michael Waibel, ‘Investment Arbitration: Jurisdiction and Admissibility’ University of Cambridge Legal Studies Research Paper Series No 9/2014 (February 2014) 67–70, which corresponds to Waibel (n 14) 1275–1278). 140 See eg the different approaches of tribunals concerning cooling-off periods and local litigation requirements: Daimler v Argentina, Award (22 August 2012) para 193 (18 months in domestic courts – jurisdiction), but see ibid, Dissenting Opinion Brower, fn 39; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) para 184 (consultation period not jurisdictional); Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 142 (irrespective of the characterization as jurisdiction or admissibility, a local litigation requirement is mandatory). 141 The literature considers exhaustion of local remedies as an objection to admissibility, see eg Reinisch (n 14) 31; Waibel (n 14) 1213. See also eg Jan de Nul v Egypt, Award (6 November 2008) para 255. 142 See eg Waibel (n 14) 1278. 143 See eg Paulsson (n 129) 609, 616. 144 See eg İçkale v Turkmenistan, Award (8 March 2016) para 242: ‘When conceptualized in these terms, it is plain that the “provided that, if” clause does not constitute a jurisdictional requirement that delimits the scope of consent of the State parties to arbitrate; it sets out the procedure . . . The provision does not concern the issue of whether the State parties have given their consent to arbitrate – they have – but rather the issue of how that consent is to be invoked by a foreign investor . . . Consequently, any objection raised on the basis of alleged non-compliance by an investor with any of the required procedural steps must be characterized as an objection to the admissibility of the claim rather than as an objection to the tribunal’s jurisdiction. A claim that has not been first submitted to local courts may be said to be inadmissible before an international tribunal on grounds that it is not yet ripe for such submission as all the required procedural steps have not yet been taken.’ But see the contrary view in Kiliç v Turkmenistan, Award (2 July 2013) para 6.3.15 (jurisdiction); see also Burlington v Ecuador,

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schreuer’s commentary on the icsid convention proper notice of a dispute;145 extinctive prescription;146 waiver of claims;147 mootness of a claim;148 denial of benefits;149 legality requirements, abuse of rights/process, corruption, breach of transnational public policy, good faith, clean hands.150

b) The Prima Facie Test 105

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Tribunals have developed a practice whereby they will apply a prima facie test as to the merits of the case at the stage of determining jurisdiction.151 This test originates from the Separate Opinion of Judge Higgins in the Oil Platforms case.152 It requires that the facts alleged by the claimant, if established, are capable of forming the basis for a claimant’s claim. Tribunals have applied this test in a large number of cases. It does not appear to be controversial in principle.153 The majority of these tribunals have referred to the matter

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Decision on Jurisdiction (2 June 2010) paras 312, 315 (jurisdiction); Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011) para 496 (admissibility); Hochtief v Argentina, Decision on Jurisdiction (24 October 2011) para 96 (admissibility); RREEF v Spain, Decision on Jurisdiction (6 June 2016) para 225 (admissibility); Almasryia v Kuwait, Award (1 November 2019) paras 34–48 (jurisdiction). Gary Born and Marija Scekic, ‘Pre-Arbitration Procedural Requirements “A Dismal Swamp”’ in Caron and others (n 120) 244 identify a third line of jurisprudence that declined to use the categories jurisdiction and admissibility, but qualified such requirements as mandatory, eg the Tribunal in Phillipp Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 142 did not consider it necessary to characterize a domestic litigation requirement as pertaining to jurisdiction or to admissibility, but said its compulsory character is evident. See eg Houben v Burundi, Award (12 January 2016) para 140 (admissibility). See eg Paulsson (n 129) 616. 147 ibid. ibid; Waibel (n 14) 1219. See eg Generation Ukraine v Ukraine, Award (16 September 2003) para 15.7 (admissibility). For further discussion, see eg Reinisch (n 14) 38–41; Richard H Kreindler, ‘Corruption in International Investment Arbitration: Jurisdiction and the Unclean Hands Doctrine’ in Kaj Hobér, Annette Magnusson and Marie Öhrström (eds), Between East and West: Essays in Honour of Ulf Franke (Juris 2010) 309; Ursula Kriebaum, ‘Illegal Investments’ [2010] Austr YB Int’l Arb 307; Rahim Moloo and Alex Khachaturian, ‘The Compliance with the Law Requirement in International Investment Law’ (2011) 34 Fordham ILJ 1473, 1499–1501; Stephan W Schill, ‘Illegal Investments in Investment Treaty Arbitration’ (2012) 11 LPICT 281, 288–291; Cameron A Miles, ‘Corruption, Jurisdiction and Admissibility in International Investment Claims’ (2012) 3 JIDS 329; Richard H Kreindler and Carolyn B Lamm (eds), Corruption and Arbitration (TDM Special Issue) (2013) 10(3) TDM; Thomas Obersteiner, ‘“In Accordance with Domestic Law” Clauses: How International Investment Tribunals Deal with Allegations of Unlawful Conduct of Investors’ (2014) 31 J Int’l Arb 265, 274; Yas Banifatemi, ‘The Impact of Corruption on “Gateway Issues” of Arbitrability, Jurisdiction, Admissibility and Procedural Issues’ in Domitille Baizeau and Richard H Kreindler (eds), Addressing Issues of Corruption in Commercial and Investment Arbitration (ICC Pub 2015) 18; Pauker (n 129) 55–57, 59–64. For detailed treatment, see Audley Sheppard, ‘The Jurisdictional Threshold of a Prima Facie Case’ in Muchlinski, Ortino and Schreuer (n 129) 932. Oil Platforms Case (Iran v USA) (Preliminary Objection) Separate Opinion Judge Higgins [1996] ICJ Rep 847, para 33 (‘The Court should thus see if, on the facts as alleged by Iran, the United States actions complained of might violate the Treaty articles’). Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 38; Wena Hotels v Egypt, Decision on Jurisdiction (29 June 1999) (2004) 6 ICSID Reports 86; Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 99; SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 26, 159, 161, 162; Joy Mining v Egypt, Award (6 August 2004) paras 29, 30; Salini v Jordan,

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as jurisdictional. Strictly speaking, this is not correct. What happens is that tribunals find it inappropriate to proceed with a case that is evidently meritless. The issue is not whether the Centre lacks jurisdiction or the tribunal lacks competence. Rather, the relevant question is whether the claimant’s claim is prima facie meritless, which leads to the dismissal of the case.154 In Siemens v Argentina, the Respondent argued that Siemens was pursuing contract claims for which the domestic courts were competent. Siemens insisted that its claims pertained to violations of the Argentina–Germany BIT. The Tribunal said in its Decision on Jurisdiction:

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At this stage of the proceedings, the Tribunal is not required to consider whether the claims under the Treaty made by Siemens are correct. This is a matter for the merits. The Tribunal simply has to be satisfied that, if the Claimant’s allegations would be proven correct, then the Tribunal has jurisdiction to consider them.155

In Impregilo v Pakistan, the issue before the Tribunal was also whether the claims put forward qualified as treaty claims. In its Decision on Jurisdiction, it examined the practice of the ICJ as well as of previous investment tribunals in some detail and reached the following conclusion:

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The present Tribunal is in full agreement with the approach evident in this jurisprudence. It reflects two complementary concerns: to ensure that courts and tribunals are not flooded with claims which have no chance of success, or may even be of an abusive nature; and equally to ensure that, in considering issues of jurisdiction, courts and tribunals do not go into the merits of cases without sufficient prior debate. In conformity with this jurisprudence, the Tribunal has considered whether the facts as alleged by the Claimant in this case, if established, are capable of coming within those provisions of the BIT which have been invoked.156

SGS v Paraguay is an example of a case where a Tribunal mentioned explicitly that it considered that the ‘objection goes only to the authority of the Tribunal to hear claims for the breach of the legal right identified by the Claimant.’157 Therefore, it seemed to consider the issue as one of competence and not of admissibility.

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Decision on Jurisdiction (29 November 2004) para 151; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 118–119, 132; Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 87; Continental Casualty v Argentina, Decision on Jurisdiction (22 February 2006) paras 59–63; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 40–45, 109; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 69–71; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 84(iv); Helnan v Egypt, Decision on Jurisdiction (17 October 2006) paras 73, 81, 91, 94; Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 139–141; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) paras 103, 104; MCI v Ecuador, Award (31 July 2007) paras 162, 163; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 143–165; Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 66–67. For an example of a Tribunal that considered the Respondent’s prima facie objection to be an objection to admissibility and not jurisdiction, see Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 198. Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 180. Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) para 254 (emphasis in the original). See also Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 185–196, 197; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 47; Telenor v Hungary, Award (13 September 2006) paras 34, 53, 68, 80. SGS v Paraguay, Decision on Jurisdiction (12 February 2010) para 52.

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In Saipem v Bangladesh, the Tribunal summarized its task at the stage of preliminary objections in the following terms: the Tribunal’s task is to determine the meaning and scope of the provisions upon which Saipem relies to assert jurisdiction and to assess whether the facts alleged by Saipem fall within those provisions or would be capable, if proven, of constituting breaches of the treaty obligations involved. In performing this task, the Tribunal will apply a prima facie standard, both to the determination of the meaning and scope of the relevant BIT provisions and to the assessment whether the facts alleged may constitute breaches of these provisions. In doing so, the Tribunal will assess whether Saipem’s case is reasonably arguable on its face. If the result is affirmative, jurisdiction will be established, but the existence of breaches will remain to be litigated on the merits.158

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The Tribunal in Phoenix v Czech Republic outlined that usually tribunals apply a double approach: facts on which the jurisdiction rests have to be proven at the jurisdictional stage; and facts that, if proven would constitute a violation of the relevant BIT standard, have to be accepted proven at the jurisdictional stage.159 Therefore, Tribunals apply the prima facie test only to the second types of facts.160 The test is that the facts the claimant alleges are susceptible of constituting a breach of the treaty if they are ultimately proven. The Tribunal in Tidewater v Venezuela held that it has to presume the facts that found the claim on the merits to be true as alleged by the claimant unless they are entirely baseless: an arbitral tribunal must, for the purpose of its jurisdictional determination, presume the facts that found the claim on the merits as alleged by the claimant to be true (unless they are plainly without any foundation). In that sense, its determination may be said to be prima facie.161

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This means that the prima facie test is a limited one. However, the Tribunal stated that it had to objectively characterize those facts in order to determine whether they were capable of falling within the scope of consent of the parties.162 In Casinos Austria v Argentina, the Tribunal described the prima facie test in terms of conflicting propositions of the Parties concerning the proper interpretation of the applicable law and its application to the alleged facts. It stated that it had to preserve the right of both parties to fully present their case and their legal arguments. At the same time, it had to prevent clearly unmeritorious cases going forward to the merits. It held that: 209. . . . it should take into account the right of both parties to fully present their case and their legal arguments to the Tribunal, including arguments that are novel or go

158 Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 91. See also ibid paras 83–93, 129–134, 144–147, 149. 159 Phoenix v Czech Republic, Award (15 April 2009) para 61. 160 See eg Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) paras 2.5–20.10; Philip Morris v Uruguay, Decision on Jurisdiction (2 July 2013) para 29; Planet Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 96; Emmis v Hungary, Award (16 April 2014) para 172. 161 Tidewater v Venezuela, Award (13 March 2015) para 84. 162 ibid.

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against the predominant views and would hence contribute to the further development of the law. On the other hand, the Tribunal should prevent frivolous, spurious, and legally clearly unfounded cases, which would impose an illegitimate burden on the time and resources of both Respondent and the Tribunal, from going forward to the merits. 210. . . . the Tribunal’s determination of whether a prima facie claim exists should be limited to ascertaining whether Claimant’s case relies on a plausible interpretation of the law.163

The Tribunal decided that tribunals have to take into consideration whether there are ambiguities in the existing case law or conflicting lines of prior jurisprudence as ‘room must be made for arguments that are novel or that go against the predominant view on the applicable law’164 considering also the lack of an appeal in the current system of investment protection.

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D. ‘. . . shall be considered by the Tribunal . . .’

1. Obligation to Decide Art. 41(2) directs the tribunal to consider preliminary objections, but it does not spell out, in terms, an obligation of the tribunal to decide all preliminary issues. Arbitration Rule 41(2) authorizes the tribunal to consider preliminary questions proprio motu, but it does not contain a general obligation to decide them. Art. 48(3) provides that the award must deal with every question submitted to the tribunal and give the reasons therefor. This obligation is repeated in Arbitration Rule 47(1)(i). Therefore, the tribunal must decide all preliminary questions that have been raised by the parties. In SPP v Egypt, the Dissenting Opinion stated that the Tribunal had not found it necessary to answer a preliminary objection by Egypt. This objection had asserted that the Egyptian Law on which the Claimants had based jurisdiction was not applicable since the claim related to the non-performance of obligations under a contract. The dissent quotes from the Decision on Jurisdiction to the effect that it was unnecessary to address this question since the Egyptian objection could simply be answered by a recapitulation of certain facts.165 However, an examination of the criticized decision reveals that the recapitulation of facts was, in reality, a legal analysis that resulted in the conclusion that the alleged breach of the contractual obligations simultaneously constituted a breach of the Egyptian Law.166 Arbitration Rule 42(4) (see para. 76 supra) provides that, if a party fails to participate, the tribunal shall examine the jurisdiction of the Centre and its own competence and, if it is satisfied, decide the merits of the case. It follows that whereas in contested proceedings the tribunal must only decide those preliminary questions that the parties have raised, and consider obligatory requirements even if not raised by the parties, in default proceedings a full consideration on jurisdiction and competence is mandatory.167 Obviously, it is wise for a tribunal to also address all relevant questions

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Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 209, 210. ibid para 211. SPP v Egypt, Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 252. SPP v Egypt, Decision on Jurisdiction I (27 November 1985) paras 67–69. See Note E to Arbitration Rule 42 of 1968, (1993) 1 ICSID Reports 104. See also paras 64–82 supra.

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concerning jurisdiction and competence in contested proceedings even if they were not raised by the parties. The failure of a tribunal to account for the jurisdictional basis of its award may expose the award to annulment. Under Art. 52(1)(e) of the Convention, annulment may be requested on the ground that the award has failed to state the reasons on which it is based. The omission of reasoning on preliminary objections relating to a point that is open to debate would fall into this category.

2. Form of Decision 120

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The tribunal has essentially three possibilities to deal with jurisdictional questions:168 first, it may decide the question by way of a separate preliminary decision (see paras. 151–170 infra); second, it may decide the question as part of the award on the merits; and third, it may make a finding that it does not have jurisdiction, a decision that is final by definition and hence has to be rendered in the form of an award. A (preliminary) decision on jurisdiction, rather than an award on jurisdiction, will uphold jurisdiction at least in some matters. Otherwise it would not be preliminary. It terminates the interim procedure described below (paras. 152–156 infra) and opens the way to proceedings on the merits. Upon delivery of the award on the merits, the decision on jurisdiction becomes part of the final award especially for purposes of annulment and recognition. Art. 48(3) of the Convention, providing that the award shall deal with every question submitted to the tribunal and state the reasons upon which it is based, requires that a preliminary decision on jurisdiction be incorporated into the final award. Tribunals have invariably incorporated preliminary decisions on jurisdiction into their final awards. This is done either by reference,169 by reciting the conclusions of the preliminary decision,170 by quoting the relevant portions of the decision on jurisdiction,171 or by attaching the decision on jurisdiction to the final award.172

168 See also Note E to Arbitration Rule 41 of 1968, (1993) 1 ICSID Reports 102. 169 See eg Amco v Indonesia, Award (20 November 1984) para 4 and ibid, Resubmitted Case: Award (5 June 1990) paras 25, 36; Fedax v Venezuela, Award (9 March 1998) para 15; Azurix v Argentina, Award (14 July 2006) para 16; Siemens v Argentina, Award (6 February 2007) para 24; LG&E v Argentina, Award (25 July 2007) para 5; Siag v Egypt, Award (1 June 2009) para 108; Inmaris Perestroika v Ukraine, Award (1 March 2012) para 17; Churchill and Planet Mining v Indonesia, Award (6 December 2016) para 1. 170 See eg Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 1.12–1.16; SPP v Egypt, Award (20 May 1992) paras 15, 24, 257; Tradex v Albania, Award (29 April 1999) para 17; Maffezini v Spain, Award (13 November 2000) para 21; Wena Hotels v Egypt, Award (8 December 2000) para 7; Olguín v Paraguay, Award (26 July 2001) paras 27, 28; CSOB v Slovakia, Award (29 December 2004) paras 3, 5; CMS v Argentina, Award (12 May 2005) para 20; Enron v Argentina, Award (22 May 2007) paras 23, 32; Tokios Tokelės v Ukraine, Award (26 July 2007) para 24; Urbaser v Argentina, Award (8 December 2016) para 20; Cervin v Costa Rica, Award (7 March 2017) para 38. 171 See eg LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 349–54; RFCC v Morocco, Award (22 December 2003) paras 29, 32–35; CSOB v Slovakia, Award (29 December 2004) paras 41, 42; PSEG v Turkey, Award (19 January 2007) para 5; Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) para 2.6.8; Saipem v Bangladesh, Award (30 June 2009) paras 66, 91–93. 172 See eg SOABI v Senegal, Award (25 February 1988) para 1.18; Maffezini v Spain, Award (13 November 2000) para 22; Olguín v Paraguay, Award (26 July 2001) para 29; Autopista v Venezuela, Award (23 September 2003) para 61; Salini v Jordan, Award (31 January 2006) para 15; Champion Trading v Egypt, Award (27 October 2006) para 12; PSEG v Turkey, Award (19 January 2007) para 6; Sempra v

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The terminology of tribunals in denominating their interim decisions on jurisdiction has not been uniform. Neither the Convention nor the Arbitration Rules offer a clear designation. Tribunals have at times called preliminary decisions on jurisdiction ‘Award on Jurisdiction,’173 ‘Decision on Objections to Jurisdiction,’174 ‘Interim Award,’175 ‘Decision on Preliminary Objections to Jurisdiction,’176 ‘Decision on Jurisdiction and Competence,’177 and ‘Decision on Jurisdiction and Admissibility.’178 For practical reasons, ‘Decision on Jurisdiction’ is to be preferred and, in fact, most tribunals now follow this approach.179 The term ‘award’ is better avoided in this context to prevent confusion with final awards declining jurisdiction (see para. 121 supra). If jurisdictional questions are joined to the merits (see paras. 151–170 infra), they will be decided as part of the final award. They are often addressed in an opening portion of the award to signal their preliminary nature.180 If the jurisdictional question relates to an

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Argentina, Award (28 September 2007) paras 21, 22; Teinver v Argentina, Award (21 July 2017) para 65. Amco v Indonesia, Award (20 November 1984) para 4 and ibid, Resubmitted Case: Decision on Jurisdiction (10 May 1988) (1993) 1 ICSID Reports 543; Grupo Contreras v Equatorial Guinea (AF), Award (4 December 2015). See eg SOABI v Senegal, Award (25 February 1988) para 1.17; Fedax v Venezuela, Decision on Jurisdiction (11 July 1997); CSOB v Slovakia, Decision on Jurisdiction (24 May 1999); Maffezini v Spain, Decision on Jurisdiction (25 January 2000); CMS v Argentina, Decision on Jurisdiction (17 July 2003); SGS v Pakistan, Decision on Jurisdiction (6 August 2003); SGS v Philippines, Decision on Jurisdiction (29 January 2004); LG&E v Argentina, Decision on Jurisdiction (30 April 2004); Sempra v Argentina, Decision on Jurisdiction (11 May 2005); Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005); SAUR v Argentina, Decision on Jurisdiction (27 February 2006); Telefónica v Argentina, Decision on Jurisdiction (25 May 2006); Total v Argentina, Decision on Jurisdiction (25 August 2006); BIVAC v Paraguay, Decision on Jurisdiction (29 May 2009); Railroad Development Corp v Guatemala, Second Decision on Jurisdiction (18 May 2010). LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 349. See eg SPP v Egypt, Decision on Jurisdiction I (27 November 1985) paras 15, 24, 26; Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005); Interocean Oil v Nigeria, Decision on Preliminary Objections (29 October 2014). Alcoa Minerals v Jamaica, Decision on Jurisdiction (6 July 1975); Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975); IBM v Ecuador, Decision on Jurisdiction (22 December 2003); Tza Yap Shum v Peru, Decision on Jurisdiction (19 June 2009). See eg Micula v Romania I, Decision on Jurisdiction (24 September 2008); Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011); Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013); Salini Impregilo v Argentina, Decision on Jurisdiction (23 February 2018). See eg Tradex v Albania, Decision on Jurisdiction (24 December 1996); Autopista v Venezuela, Decision on Jurisdiction (27 September 2001); Azurix v Argentina, Decision on Jurisdiction (8 December 2003); Enron v Argentina, Decision on Jurisdiction (14 January 2004); Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004); PSEG v Turkey, Decision on Jurisdiction (4 June 2004); Siemens v Argentina, Decision on Jurisdiction (3 August 2004); Salini v Jordan, Decision on Jurisdiction (29 November 2004); Plama v Bulgaria, Decision on Jurisdiction (8 February 2005); Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005); Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005); Vivendi v Argentina, Resubmitted Case: Award (20 August 2007); Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006); Siag v Egypt, Decision on Jurisdiction (11 April 2007); Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008); Toto v Lebanon, Decision on Jurisdiction (11 September 2009); Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010); Teinver v Argentina, Decision on Jurisdiction (21 December 2012); Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013); Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016); Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018); Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020). See eg Gardella v Côte d’Ivoire, Award (29 August 1977) paras 4.1–4.2; Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 13–18; Vivendi v Argentina, Award (21 November 2000)

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ancillary claim, such as a counterclaim, it may be disposed of in the context of the discussion of that claim.181 It is evident that jurisdictional decisions made as part of the final award partake of that award’s legal nature for purposes of annulment and recognition. If a tribunal finds that it does not have jurisdiction over the case, this decision will be final. Arbitration Rule 41(6) provides: If the Tribunal decides that the dispute is not within the jurisdiction of the Centre or not within its own competence, or that all claims are manifestly without legal merit, it shall render an award to that effect.182

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The resultant award should conform with all the requirements for awards in general as contained in Arts. 48 and 49. It should also contain a decision on costs in accordance with Art. 61(2). An award declining jurisdiction is subject to the post-award remedies specified in Arts. 49(2) and 50–52.183 Tribunals that have found that the dispute before them was not within the jurisdiction of the Centre or not within their competence have issued awards to this effect.184

3. Summary Procedure 128

In April 2006, an amendment to the Arbitration Rules introduced a summary or expedited procedure. The newly inserted Arbitration Rule 41(5) provides as follows: Unless the parties have agreed to another expedited procedure for making preliminary objections, a party may, no later than 30 days after the constitution of the Tribunal, and in any event before the first session of the Tribunal, file an objection that a claim is manifestly without legal merit. The party shall specify as precisely as possible the basis for the objection. The Tribunal, after giving the parties the opportunity to present their observations on the objection, shall, at its first session or promptly thereafter, notify the parties of its decision on the objection. The decision of the Tribunal shall be without prejudice to the right of a party to file an objection pursuant to paragraph (1) or to object, in the course of the proceeding, that a claim lacks legal merit.185

181 182 183 184

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paras 40–55; Genin v Estonia, Award (25 June 2001) paras 27, 319–335; Generation Ukraine v Ukraine, Award (16 September 2003) paras 6.1–17.7; AIG v Kazakhstan, Award (7 October 2003) paras 9.1–9.4.9; CDC v Seychelles, Award (17 December 2003) paras 3–6; MTD v Chile, Award (25 May 2004) paras 90–97; ADC v Hungary, Award (2 October 2006) paras 294–364; MCI v Ecuador, Award (31 July 2007) paras 16, 26–191; Parkerings v Lithuania, Award (11 September 2007) paras 234–266; Teco v Guatemala, Award (19 December 2013) paras 437–488; Eiser v Spain, Award (4 May 2017) paras 160–321; Masdar v Spain, Award (16 May 2018) paras 144–342. Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 39. See also the parallel provision in Art. 45(7) of the Arbitration (Additional Facility) Rules. See also Note F to Arbitration Rule 41 of 1968, (1993) 1 ICSID Reports 102. Vacuum Salt v Ghana, Award (16 February 1994); Scimitar v Bangladesh, Award (4 May 1994); Cable TV v St Kitts and Nevis, Award (13 January 1997); Banro v DR Congo, Award (1 September 2000); Gruslin v Malaysia I, Award (27 November 2000); Mihaly v Sri Lanka, Award (15 March 2002); Zhinvali v Georgia, Award (24 January 2003); Soufraki v UAE, Award (7 July 2004); Joy Mining v Egypt, Award (6 August 2004); Lucchetti v Peru, Award (7 February 2005); Inceysa v El Salvador, Award (2 August 2006); Telenor v Hungary, Award (13 September 2006); Malaysian Historical Salvors v Malaysia, Award on Jurisdiction (17 May 2007); Fraport v Philippines I, Award (16 August 2007); Libananco v Turkey, Award (2 September 2011); Global Trading v Ukraine, Award (1 December 2010); Ansung Housing v China, Award (9 March 2017); Itisaluna v Iraq, Award (3 April 2020); Lotus v Turkmenistan, Award (6 April 2020). See also the parallel provision in Art. 45(6) of the Arbitration (Additional Facility) Rules.

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The idea behind this provision is to efficiently dispose of cases that are manifestly without merit. The Secretary-General can only deny the registration of requests for arbitration that are ‘manifestly outside the jurisdiction of the Centre’ based on the information available in the requests. The Secretary-General’s screening power does not extend to the merits of a case. Where claims are frivolous on the merits, this filter is not available. Therefore, even if the Secretary-General believes that a claim is manifestly unmeritorious, he or she is under an obligation to register the request for arbitration.186 Therefore, the primary goal of the new procedure was to provide a special procedure for tribunals to discuss claims that were obviously unsustainable on the merits without going through the lengthy and costly regular procedure. Tribunals have decided, however, that the procedure is also available if the ground on which the claim manifestly lacks legal merit is jurisdictional in nature (see paras. 134–137 infra). The procedure under Arbitration Rule 41(5) will apply only if the parties have not agreed on another expedited procedure for making preliminary objections. A number of more recent investment protection treaties provide for expedited procedures to dismiss unmeritorious claims.187 So far, only respondents have availed themselves in the publicly known cases of the possibility to apply for an expedited procedure. The text, however, refers to ‘a party.’ Therefore, also claimants could make use of it in case of an allegedly manifestly unmeritorious counterclaim.188 The procedure under this provision is considerably accelerated as compared to proceedings triggered by a regular preliminary objection. Whereas the filing of a regular preliminary objection is to be made within the time limit for the filing of the countermemorial, the summary procedure must be initiated within 30 days of the tribunal’s constitution and before its first session.189 The tribunal’s decision is to be made at its first session or promptly thereafter. It follows that the decision under the summary

186 The ICSID Secretariat’s background papers of 2004 and 2005 as well as an article by former Deputy Secretary-General of the Centre Antonio R Parra, ‘The Development of the Regulations and Rules of the International Centre for Settlement of Investment Disputes’ (2007) 22 ICSID Rev 55, 65, suggest that the new procedure was primarily introduced to close the gap left by the screening power of the Secretary-General. 187 See eg Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) (signed 5 August 2004, in force) Art. 10.20(4) and (5), which have been accepted by the Tribunal in Pac Rim v El Salvador as an expedited procedure to the exclusion of ICSID Arbitration Rule 41(5), see Pac Rim v El Salvador, Decision on Preliminary Objections (2 August 2010) paras 84, 85. See also Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into force 30 December 2018) Art. 9.23(4); Canada–EU Comprehensive Economic Trade Agreement (CETA) (adopted 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23, Art. 8.23; European Union–Viet Nam Investment Protection Agreement (signed 30 June 2019, not yet in force) COM(2018)683 final, Art. 3.44; European Union–Mexico Global Agreement (text as of April 2018) Art. 17. 188 See Michele Potestà, ‘Preliminary Objections to Dismiss Claims that Are Manifestly without Legal Merit under Rule 41(5) of the ICSID Arbitration Rules’ in Baltag (n 16) 249, 254. 189 The Tribunal in Transglobal v Panama, Decision under Rule 41(5) (17 March 2015) para 29 stated that ‘and’ means ‘and’ and not ‘or’ and that, therefore, the two temporal conditions are cumulative and not alternative.

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procedure will be typically made before the tribunal has had an opportunity to examine matters of jurisdiction and competence. In the practice of tribunals, the handling of the concept of ‘prompt’ has varied. The period of time it takes to make decisions under the expedited procedure ranges from three days to five and a half months after the first session of the tribunal.190 Although the primary target of the new procedure were claims that were manifestly unsustainable on the merits, tribunals have decided that the expedited procedure is also available for issues of jurisdiction. It is debatable, however, whether the extension of the expedited procedure to questions of jurisdiction is covered by the wording of Arbitration Rule 41(5).191 The Tribunal in Brandes v Venezuela, which subsequent tribunals followed,192 justified this approach as follows: There exist no objective reasons why the intent not to burden the parties with a possibly long and costly proceeding when dealing with such unmeritorious claims should be limited to an evaluation of the merits of the case and should not also englobe an examination of the jurisdictional basis on which the tribunal’s powers to decide the case rest.193

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As admitted by the Tribunal in Brandes, applying the procedure also to jurisdictional issues has the effect that there are actually three stages at which jurisdictional issues may be addressed. First by the Secretary-General under Art. 36(3). If the case passes that threshold, jurisdiction may be examined under Rule 41(5). If the case passes that threshold or when no request for the application of Rule 41(5) is made, jurisdiction is examined under Rule 41(6).194 Where jurisdiction and merits are closely connected (see paras. 151–170 infra), the summary proceedings may have to address jurisdiction. For instance, if the basis of jurisdiction is limited to expropriation, an objection asserting that there was manifestly no expropriation may relate to both jurisdiction and the merits. Before making its decision, the tribunal must give the parties the opportunity to present their observations on the objection. In many of the cases, tribunals have allowed

190 Cf ICSID, ‘Case Details: Mobile TeleSystems OJSC v Republic of Uzbekistan (ICSID Case No ARB (AF)/12/7)’ accessed 10 January 2021; Emmis v Hungary, Decision on under Rule 41(5) (11 March 2013) para 20. 191 Notably, Arbitration Rule 41(6) distinguishes between a decision declining jurisdiction and one finding claims to be manifestly without legal merit. 192 See eg Global Trading v Ukraine, Award (1 December 2010) para 30; RSM v Grenada II, Award (10 December 2010) para 6.1.1; Elsamex v Honduras, Decision on Preliminary Objection on Annulment (7 January 2014) paras 93–96; PNG Sustainable Development v Papua New Guinea, Decision under Rule 41(5) (28 October 2014) para 91; Lion v Mexico (AF), Decision under Art. 45(6) of the ICSID Arbitration (Additional Facility) Rules (12 December 2016) para 75; Almasryia v Kuwait, Award (1 November 2019) paras 30, 48. 193 Brandes v Venezuela, Decision under Rule 41(5) (2 February 2009) para 52. 194 ibid para 53; see also Global Trading v Ukraine, Award (1 December 2010) para 33; Emmis v Hungary, Decision under Rule 41(5) (11 March 2013) para 84; MOL v Croatia, Decision under Rule 41(5) (2 December 2014) para 52.

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oral submissions usually at the first session of the tribunal after one or two rounds of written submissions.195 Failure to give both parties a full opportunity to be heard is likely to lead to a charge of a serious departure from a fundamental rule of procedure with the consequence of a possible annulment under Art. 52(1)(d) of the Convention. Arbitration Rule 41(5) refers to lack of ‘legal’ merit. This and the summary nature of the procedure imply that the tribunal will be reluctant to entertain factual evidence at this stage. Indeed, the Tribunal in Trans-Global v Jordan observed that it was inappropriate to decide disputed facts at this stage of the proceedings:

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At this early stage of these proceedings, without any sufficient evidence, the Tribunal is in no position to decide disputed facts alleged by either side in a summary procedure. Nonetheless, the Tribunal recognises that it is rarely possible to assess the legal merits of any claim without also examining the factual premise upon which that claim is advanced.196

The Tribunal adopted a test that is similar to the prima facie test applied by some tribunals concerning their jurisdiction ratione materiae (see paras. 105–115 supra) when it stated:

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In applying Rule 41(5), the Tribunal accepts that, as regards disputed facts relevant to the legal merits of a claimant’s claim, the tribunal need not accept at face value any factual allegation which the tribunal regards as (manifestly) incredible, frivolous, vexatious or inaccurate or made in bad faith; nor need a tribunal accept a legal submission dressed up as a factual allegation. The Tribunal does not accept, however, that a tribunal should otherwise weigh the credibility or plausibility of a disputed factual allegation.197

Tribunals are prepared to exercise only a very limited scrutiny as concerns the assessment of facts at this stage.198 This becomes especially evident from the statement of the Tribunal in MOL v Croatia:

195 Trans-Global v Jordan, Decision under Rule 41(5) (12 May 2008); Brandes v Venezuela, Decision under Rule 41(5) (2 February 2009) para 22; Global Trading v Ukraine, Award (1 December 2010) para 22; RSM v Grenada II, Award (10 December 2010) para 1.3.6; Rizvi v Indonesia, Award (16 July 2013) para 19; Lundin v Tunisia, Award (22 December 2015) para 19; Elsamex v Honduras, Decision on Preliminary Objection on Annulment (7 January 2014) para 22; PNG Sustainable Development v Papua New Guinea, Decision under Rule 41(5) (28 October 2014) paras 11–15; MOL v Croatia, Decision under Rule 41(5) (2 December 2014) para 57; CEAC v Montenegro, Award (26 July 2016) para 9; Venoklim v Venezuela, Decision under Rule 41(5) (8 March 2016) para 35; Ansung Housing v China, Award (9 March 2017) para 20; Eskosol v Italy, Decision under Rule 41(5) (20 March 2017) para 17. See also the procedural details provided by ICSID for Pan American v Bolivia; Vattenfall v Germany; Mobile TeleSystems v Uzbekistan (AF), and Elektrogospodarstvo Slovenije v Bosnia and Herzegovina at accessed 10 January 2021. 196 Trans-Global v Jordan, Decision under Rule 41(5) (12 May 2008) para 97. 197 ibid para 105. 198 See eg Brandes v Venezuela, Decision under Rule 41(5) (2 February 2009) para 71; RSM v Grenada II, Award (10 December 2010) para 6.1.2; Àlvarez y Marín v Panama, Reasoning of Decision under Rule 41(5) (4 April 2016) paras 95–96.

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schreuer’s commentary on the icsid convention an objection to the jurisdiction or substantive defence (in terms, that a claim ‘lacks legal merit’), which requires for its disposition more elaborate argument or factual enquiry, must be made the subject of a regular preliminary objection under Rule 41(1) or a regular defence on the merits.199

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This approach is also supported by the decision in Almasryia v Kuwait. There, the Tribunal, after summarizing the case law, decided that its task was to ‘determine whether taking the facts as given, unless they are plainly without foundation, the claims are such that they “manifestly” (i.e. clearly and obviously) lack legal merit.’200 The lack of legal merit would have to be evident from the claimant’s assertions as set out in the request for arbitration. The Tribunal in Trans-Global v Jordan observed that it has to be assumed that ‘manifest’ in Rule 41(5) is used in the same manner as in other already pre-existing provisions of the ICSID Convention.201 It found the standard to be a high one and required the Respondent ‘to establish its objection clearly and obviously, with relative ease and dispatch.’202 Nevertheless, it recognized that the ‘exercise may thus be complicated; but it should never be difficult.’203 A number of tribunals have agreed with this approach.204 The Tribunal in PNG Sustainable Development v Papua New Guinea specified that the Rule 41(5) procedure was not created to ‘resolve novel, difficult or disputed legal issues, but instead only to apply to undisputed or genuinely indisputable rules of law to uncontested facts.’205 The Tribunal in MOL v Croatia followed the path of the Trans Global Tribunal, but opted for a clearer distinction. It considered the option of ‘complicated but not difficult’ questions as leading into hybrid territory and found that tribunals should only dismiss clear-cut cases under Rule 41(5).206 It stated: 44. . . . The Rule, as introduced in 2006, plainly envisages a claim that is so obviously defective from a legal point of view that it can properly be dismissed outright. . . . 45. . . . the Tribunal is firmly of the view that the distinction has to be maintained between a claim by an investor that can properly be rejected out of hand, and one which requires more elaborate argument for its eventual disposition.207

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The objection leading to the summary procedure must state that a claim is manifestly without legal merit. It need not state that the entire case is without legal merit. Therefore, it is possible that a tribunal disposes of one of several claims by way of a

199 200 201 204

MOL v Croatia, Decision under Rule 41(5) (2 December 2014) para 44. Almasryia v Kuwait, Award (1 November 2019) para 33. See also ibid, 58. Trans-Global v Jordan, Decision under Rule 41(5) (12 May 2008) para 83.202 ibid para 88.203 ibid. See eg Brandes v Venezuela, Decision under Rule 41(5) (2 February 2009) para 63; Global Trading v Ukraine, Award (1 December 2010) para 35; RSM v Grenada II, Award (10 December 2010) para 6.1.2; Àlvarez y Marín v Panama, Reasoning of Decision under Rule 41(5) (4 April 2016) para 80; Lion v Mexico (AF), Decision under Art. 45(6) of the ICSID Arbitration (Additional Facility) Rules (12 December 2016) para 67; Ansung Housing v China, Award (9 March 2017) para 70. 205 PNG Sustainable Development v Papua New Guinea, Decision under Rule 41(5) (28 October 2014) para 89. 206 MOL v Croatia, Decision under Rule 41(5) (2 December 2014) para 45. 207 ibid paras 44, 45.

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summary decision under Arbitration Rule 41(5), while proceeding with other claims. Even if the respondent objects to all claims as being manifestly without legal merit, the tribunal may still uphold the objection with respect to some claims, while rejecting it with respect to others.208 If the tribunal’s decision upholds the objection in summary proceedings with respect to all claims it will have to issue an award (see Art. 48, para. 24).209 In accordance with Arts. 48(3) and 52(1)(e) of the Convention such an award will have to state the reasons on which it is based. If the decision dismisses the objection it will also have to state reasons in accordance with the established practice of ICSID tribunals (see Art. 48, paras. 108–111). A decision that declines a summary disposal of claims and hence reserves full examination of the merits to a future award requires less elaborate reasoning, because there will be a full examination of the parties’ arguments at the merits stage. If the tribunal dismisses the objection in the summary proceedings, the right to raise other preliminary objections remains unaffected. Equally, the right to object that a claim lacks merit is unaffected by a prior dismissal of an objection in summary proceedings.210 It is doubtful, however, whether a party should be allowed to insist on the application of the prima facie test at the stage of jurisdiction (see paras. 105–115 supra) once its objection that a claim is manifestly without legal merit has been dismissed in summary proceedings because the respective tests are very similar and should not be applied twice. In practice, the summary procedure introduced by Arbitration Rule 41(5) has enabled tribunals to dispose of evidently unmeritorious and abusive claims in a number of cases.211

208 See Trans-Global v Jordan, Decision under Rule 41(5) (12 May 2008); Accession Mezzanine v Hungary, Decision under Rule 41(5) (16 January 2013); Emmis v Hungary, Decision under Rule 41 (5) (11 March 2013). 209 See eg Trans-Global v Jordan, Decision under Rule 41(5) (12 May 2008) para 74: Global Trading v Ukraine, Award (1 December 2010) para 58; RSM v Grenada II, Award (10 December 2010) para 9.1.4; Ansung Housing v China, Award (9 March 2017) 50; Almasryia v Kuwait, Award (1 November 2019) paras 67–68 (it follows implicitly from the fact that the Tribunal’s decision is called an award). 210 Global Trading v Ukraine, Award (1 December 2010) para 33; Brandes v Venezuela, Decision under Rule 41(5) (2 February 2009) para 53; Emmis v Hungary, Decision under Rule 41(5) (11 March 2013) para 84; PNG Sustainable Development v Papua New Guinea, Decision under Rule 41(5) (28 October 2014) para 98 (where the Tribunal rejected the application of Rule 41(5), but upheld an objection on jurisdiction brought under the regular procedure of Rule 41(1)) and ibid, Award (5 May 2015) paras 410, 417; MOL v Croatia, Decision under Rule 41(5) (2 December 2014) para 52. 211 Trans-Global v Jordan, Decision under Rule 41(5) (12 May 2008) paras 119, 124; Global Trading v Ukraine, Award (1 December 2010) para 58; RSM v Grenada II, Award (10 December 2010) para 9.1 (a); Accession Mezzanine v Hungary, Decision under Rule 41(5) (16 January 2013) paras 77, 78 (Partial); Emmis v Hungary, Decision under Rule 41(5) (11 March 2013) paras 70, 72, 85; Ansung Housing v China, Award (9 March 2017) paras 73, 122, 143. For an assessment of the application of Arbitration Rule 41(5), see eg Chester Brown and Sergio Puig, ‘The Power of ICSID Tribunals to Dismiss Proceedings Summarily: An Analysis of Rule 41(5) of the ICSID Arbitration Rules’ (2011) 10 LPICT 227; Potestà (n 188) 249–272; Lars Markert, ‘Summary Dismissal of ICSID Proceedings’ (2016) 31 ICSID Rev 690.

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E. ‘. . . which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute.’

1. Bifurcation 151

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The Working Paper and the Preliminary Draft to the Convention provided in mandatory terms that the tribunal shall decide on jurisdictional objections as preliminary questions (History, Vol. I, p. 188; Vol. II, pp. 79, 206). Subsequent debates showed a strong preference for a solution that would let the tribunal decide whether to make a preliminary decision on jurisdiction or join the issue to the merits (History, Vol. II, pp. 270–271, 325, 407, 408–409, 507, 567). A solution opening that choice and modeled on the ICJ’s Rules was adopted in the First Draft and remained unchanged in the Revised Draft (History, Vol. I, p. 190) and in the Convention’s final text. The two alternatives are repeated in the second sentence of Arbitration Rule 41(4) (see para. 153 infra). Under Arbitration Rule 41(3), as in force until April 2006, the suspension of the proceedings upon the raising of jurisdictional objections was mandatory (‘the proceeding on the merits shall be suspended’). The Arbitration Rules, as amended with effect from 10 April 2006, provide for a tribunal’s discretion in this respect (‘the Tribunal may decide to suspend’). Arbitration Rule 41 (as amended in 2006) provides in relevant part: (3) Upon the formal raising of an objection relating to the dispute, the Tribunal may decide to suspend the proceeding on the merits. The President of the Tribunal, after consultation with its other members, shall fix a time limit within which the parties may file observations on the objection. (4) The Tribunal shall decide whether or not the further procedures relating to the objection made pursuant to paragraph (1) shall be oral. It may deal with the objection as a preliminary question or join it to the merits of the dispute. If the Tribunal overrules the objection or joins it to the merits, it shall once more fix time limits for the further procedures.212

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An objection to jurisdiction over the dispute may lead to a division of the arbitral proceedings into separate phases (bifurcation). Bifurcation most commonly takes place between jurisdiction and merits, but also other splits (such as liability and quantum) or several splits are possible.213 In case of a bifurcation between jurisdiction and merits, the tribunal has discretion to suspend the proceedings on the merits and start an interim procedure dealing only with the jurisdictional questions.214 The interim procedure is to consist of an exchange of written observations and, possibly, oral hearings. Once the interim procedure has been

212 See also the parallel provision in Art. 45(4) and (5) of the Arbitration (Additional Facility) Rules. 213 See eg Burimi v Albania, Award (29 May 2013) para 63; Metal-Tech v Uzbekistan, Award (4 October 2013) para 68; Churchill and Planet Mining v Indonesia, Procedural Order No 12 (27 October 2014) para 50; İçkale v Turkmenistan, Award (8 March 2016) para 55; Eco Oro Minerals v Colombia, Decision on Bifurcation (28 June 2018) para 61 (rejecting bifurcation). 214 It is also possible to bifurcate without suspending the proceedings on the merits in the interest of procedural economy. See eg Tulip v Turkey, Decision on Bifurcation (2 November 2012) para 56.

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completed and the jurisdictional objection has been rejected, the tribunal must fix new time limits for the proceedings on the merits and the proceedings on the merits will continue. If it is known early enough, bifurcation can be taken into account in the procedural timetable. Otherwise, a tribunal can prepare two alternative calendars for written submissions once a respondent has indicated that it intends to file an objection to jurisdiction.215 Neither the ICSID Convention nor the Arbitration Rules set forth criteria for the decision on whether to join preliminary objections to the merits or to bifurcate the proceedings. This decision is entirely within the discretion of tribunals.216 In case of an objection to jurisdiction, the tribunal will usually hear both parties (usually in the form of written submissions) on whether to bifurcate and will make a procedural order deciding on bifurcation or issue a decision on bifurcation.217 A tribunal will not make a decision on bifurcation before preliminary objections are raised by the respondent.218 The choice between a preliminary decision and a joinder to the merits is a matter of procedural economy. As the Tribunal in Lighthouse Corp v Timor-Leste stated:

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As a general matter, the Tribunal believes that it is good practice to deal with jurisdictional objections preliminarily, so as to avoid imposing full-fledged proceedings on a party disputing that it is subject to arbitration, whenever bifurcating such objections would likely result in increased efficiency in terms of both time and costs. On the other hand, if the bifurcation was unlikely to eliminate the need for a merits stage, either because the jurisdictional objections prima facie were not substantial, or because they were only directed to a few claims, a tribunal should be disinclined to bifurcate, unless there are other circumstances that would lead to a contrary conclusion.219

It does not make sense to go through lengthy and costly proceedings dealing with the merits of the case unless the tribunal’s jurisdiction has been determined authoritatively. On the other hand, some jurisdictional questions are so intimately linked to the merits of the case that it is impossible to dispose of them in preliminary form.

215 See eg Gavazzi v Romania, Procedural Order No 1 (11 March 2013) para 13; Ampal-American v Egypt, Decision on Jurisdiction (1 February 2016) para 32; Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 331. 216 See eg Transglobal v Panama, Decision on Bifurcation (21 January 2016) para 15; Global Telecom v Canada, Decision on Bifurcation (14 December 2017) para 99; Red Eagle Exploration v Colombia, Decision on Bifurcation (13 August 2020) para 40. 217 See eg Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 75–79; Alapli v Turkey, Award (16 July 2012) paras 13–19; Iberdrola v Guatemala, Award (17 August 2012) paras 16–19, 257–258; Rizvi v Indonesia, Award on Jurisdiction (16 July 2013) paras 22–25; Burimi v Albania, Award (29 May 2013) paras 58–63; Emmis v Hungary, Decision on Bifurcation (13 June 2013); Accession Mezzanine v Hungary, Decision on Jurisdiction (8 August 2013); Tenaris v Venezuela I, Award (29 January 2016) paras 16–18; RREEF v Spain, Decision on Jurisdiction (6 June 2016) paras 19–22; Eiser v Spain, Award (4 May 2017) paras 14–20; Société Resort Company Invest Abidjan v Ivory Coast, Decision on Jurisdiction (1 August 2017) paras 21–23, 28, 32; UAB v Latvia, Award (22 December 2017) paras 19–23; Antin v Spain, Award (15 June 2018) paras 14–16; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 18–19. 218 Pildegovics v Norway, Decision on Bifurcation (12 October 2020) paras 7–8. 219 Lighthouse Corp v Timor-Leste, Decision on Bifurcation (8 July 2016) para 19.

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Where the parties agreed to bifurcate, tribunals usually will accept this decision.220 Tribunals can also request submissions on distinct jurisdictional issues proprio motu. In CEAC v Montenegro, the Tribunal declined the Respondent’s objections under Rule 41(5) and decided to hold a separate phase of proceedings dedicated to the jurisdictional issue of the Claimant’s ‘seat.’ It invited the parties to agree on a procedural calendar to this effect.221 In case of disagreement between the parties, tribunals were guided by considerations of fairness and procedural efficiency222 and considered some or all of the following three factors when deciding whether to order bifurcation of jurisdictional issues from the decision on the merits: (1) whether the objection is substantial inasmuch as the preliminary consideration of a frivolous objection to jurisdiction is very unlikely to reduce the costs of, or time required for, the proceeding; (2) whether the objection to jurisdiction if granted results in a material reduction of the proceedings at the next phase (in other words, the tribunal should consider whether the costs and time required of a preliminary proceedings, even if the objecting party is successful, will be justified in terms of the reduction in costs at the subsequent phase of proceedings); and (3) whether bifurcation is impractical in that the jurisdictional issue identified is so intertwined with the merits that it is very unlikely that there will be any savings in time or cost.223

162

Tribunals undertake an overall assessment of all the factors militating for and against bifurcation. Only if the criteria listed above are fulfilled cumulatively will they decide to bifurcate. The possibility to award compensation for costs caused by unmeritorious 220 See eg H&H v Egypt, Award (6 May 2014) para 20; İçkale v Turkmenistan, Award (8 March 2016) para 55 (the parties agreed to hear jurisdiction and merits together and decided that quantum would be heard at a later hearing); Al Tamimi v Oman, Procedural Order No 6 (18 March 2013) Schedule 2, 13.1.6. 221 CEAC v Montenegro, Award (26 July 2016) para 10. 222 See eg Accession Mezzanine v Hungary, Decision on Jurisdiction (8 August 2013) para 38; Gavrilović v Croatia, Decision on Bifurcation (21 January 2015) para 66; United Utilities v Estonia, Decision on Bifurcation (17 June 2015) para 16; İçkale v Turkmenistan, Award (8 March 2016) para 33; Eiser v Spain, Award (4 May 2017) para 20; Eco Oro Minerals v Colombia, Decision on Bifurcation (28 June 2018) para 50. 223 These criteria were first spelled out by the Tribunal in Glamis Gold v United States (UNCITRAL), Decision on Bifurcation (31 May 2005) para 12(c). ICSID tribunals took these or similar criteria into consideration when deciding on bifurcation, see eg Emmis v Hungary, Decision on Bifurcation (13 June 2013) para 37(2); Standard Chartered Bank v TANESCO, Decision on Bifurcation (29 May 2012) para 9; Tulip v Turkey, Decision on Bifurcation (2 November 2012) para 30; Gavrilović v Croatia, Decision on Bifurcation (21 January 2015) paras 60–93; Standard Chartered Bank (Hong Kong) v Tanzania, Decision on Bifurcation (11 October 2016) para 56; Global Telecom v Canada, Decision on Bifurcation (14 December 2017) para 100; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 19; Rand Investments and others v Serbia, Decision on Bifurcation (24 June 2019) paras 13, 16; LSG Building Solutions and others v Romania, Decision on Bifurcation (9 October 2019) para 36; Gran Colombia Gold v Colombia The Prima Facie Test Decision on Bifurcation (17 January 2020) para 25; Carlyle v Morocco, Decision on Bifurcation (20 January 2020) para 66; Westwater Resources v Turkey, Decision on Bifurcation (28 April 2020) para 15; Canepa Green Energy v Spain, Decision on Bifurcation (28 August 2020) para 67; Red Eagle Exploration v Colombia, Decision on Bifurcation (13 August 2020) paras 41–44. Similar criteria were also used by tribunals deciding on bifurcation under the 2003 ICSID Arbitration Rules, which contained in Rule 41(3) an obligation to bifurcate, stating that ‘the proceedings on the merits shall be suspended.’ See eg Libananco v Turkey, Award (2 September 2011) para 33.

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jurisdictional objections, or for additional costs in cases where a bifurcation had been declined, may also be included in the equation.224 In Eco Oro Minerals v Colombia, the Tribunal decided that certain objections were not on a prima facie basis serious or substantial enough to bifurcate, without prejudice to its view once the matter has been fully argued.225 With regard to other objections, it found that they were too intertwined with the merits to bifurcate them.226 The Tribunal decided that yet another objection would not be capable of disposing of a substantial part of the claim and, therefore, declined bifurcation.227 In Global Telecom v Canada, the Tribunal found that the jurisdictional objections ‘meet the standard of being prima facie serious and substantial, and not frivolous.’228 However, it was not convinced that bifurcation would support procedural economy.229 It considered that there was considerable potential for overlap between jurisdiction and merits and that the issues were too intertwined to decide on them separately.230 It described the balancing process it had to undertake in the following way:

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the possibility that the consideration of this jurisdictional objection as a preliminary matter through a bifurcated proceeding might result in the avoidance of years of unnecessary and costly litigation must be weighed against the possibility that bifurcation to address this jurisdictional objection might simply result in additional costs and delays if the objection is rejected.231

Considerations that the jurisdictional questions were too intertwined with issues on the merits led a number of tribunals to reject bifurcations.232 The Tribunal in Gavrilović v Croatia pointed out that, once a considerable factual overlap between jurisdiction and merits is accepted, ‘little can be said in support of the division of the case.’233 The Tribunal in Standard Chartered Bank v TANESCO declined bifurcation among other reasons because the Respondent could not discharge its burden of establishing that the preliminary objection, if successful, would dispose of the entire case and therefore achieve the required efficiency and cost savings.234 The Tribunal in Emmis v Hungary decided that all three criteria for bifurcation set out above were fulfilled. It considered the objection not as frivolous, but as substantial.

224 See eg Emmis v Hungary, Decision on Bifurcation (13 June 2013) para 56; Eco Oro Minerals v Colombia, Decision on Bifurcation (28 June 2018) para 50. 225 ibid paras 58, 59, 60. 226 ibid paras 52, 53, 55, 57. See also Westwater Resources v Turkey, Decision on Bifurcation (28 April 2020) para 21. 227 Eco Oro Minerals v Colombia, Decision on Bifurcation (28 June 2018) para 54. 228 Global Telecom v Canada, Decision on Bifurcation (14 December 2017) para 102. For an example where a tribunal considered that the requirement of the objection being ‘serious and substantial’ was not fulfilled, see Canepa Green Energy v Spain, Decision on Bifurcation (28 August 2020) paras 70, 76, 82. 229 Global Telecom v Canada, Decision on Bifurcation (14 December 2017) para 103. 230 ibid para 109. 231 ibid para 107. 232 See eg Iberdrola v Guatemala, Award (17 August 2012) paras 19, 257; Burimi v Albania, Award (29 May 2013) para 63; Gavrilović v Croatia, Decision on Bifurcation (21 January 2015) paras 68–93; Canepa Green Energy v Spain, Decision on Bifurcation (28 August 2020) para 90 (denying bifurcation because of a finding that denial of benefits under the ECT does not fall within the scope of Art. 41 of the ICSID Convention). 233 Gavrilović v Croatia, Decision on Bifurcation (21 January 2015) para 93. 234 Standard Chartered Bank v TANESCO, Decision on Bifurcation (29 May 2012) paras 19, 22, 23.

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Furthermore, it noted that if the objection was successful it would dispose of the entire case and that it could be separated from the merits.235 In a number of cases, tribunals decided to allow bifurcation with regard to certain objections and to deny it with regard to others.236 Where a Tribunal allows for bifurcation, it will limit its inquiry to the bifurcated issue and will not entertain legal arguments or consider evidence that relates to other matters.237

2. Bifurcation and Ancillary Claims 170

If the jurisdictional question at issue relates not to the primary dispute, but to an ancillary claim such as a counterclaim, the case in favor of joining related objections to the merits is strong. Considerations of expediency will usually militate in favor of proceeding with the main claim, even if the question of jurisdiction over the ancillary claim is as yet undecided. Therefore, where the jurisdictional objection related to a counterclaim, proceedings on the merits of the principal claim were not suspended.238

235 Emmis v Hungary, Decision on Bifurcation (13 June 2013) paras 47–56; Accession Mezzanine v Hungary, Decision on Jurisdiction (8 August 2013) paras 38, 39, which was similar to Emmis considered the Emmis decision to be persuasive authority and followed it. For other tribunals allowing for bifurcation, see eg Transglobal v Panama, Decision on Bifurcation (21 January 2016) paras 16, 17; Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 19. 236 See eg Tulip v Turkey, Decision on Bifurcation (2 November 2012) paras 29–56; Guardian Fiduciary v North Macedonia, Award (22 September 2015) paras 31–35. 237 Rizvi v Indonesia, Award (16 July 2013) paras 33–34. 238 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 13–18; Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 39; Urbaser v Argentina, Award (8 December 2016). See, however, Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) para 4. In this case, the Claimant submitted two requests for arbitration. The second claim has been registered under the same ICSID case number as the first as an ancillary claim. The Tribunal decided to handle both disputes independently until it had decided on the exceptions to jurisdiction in both cases.

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Article 42 (1) The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable. (2) The Tribunal may not bring in a finding of non liquet on the ground of silence or obscurity of the law. (3) The provisions of paragraphs (1) and (2) shall not prejudice the power of the Tribunal to decide a dispute ex aequo et bono if the parties so agree.

OUTLINE I. INTRODUCTION A. Purpose of the Provision B. Issues of Applicable Law Not Governed by Article 42 1. The Law Applicable to Procedure and Jurisdiction a) Clauses in Domestic Legislation as Basis of Consent b) Clauses in an Agreement between the Parties as Basis of Consent c) Clauses in an International Investment Treaty as Basis of Consent 2. Nationality of the Investor 3. Jus Standi of Minority Shareholders 4. Corporate Capacity and Authority to Represent (Lex Societatis) 5. Existence and Scope of Proprietary Rights C. Method for Determining the Applicable Law D. Proper Law and Annulment II. INTERPRETATION A. ‘(1) The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties.’ 1. Freedom of Choice 2. Modality of Choice 3. The Law Chosen by the Parties a) The Law of the Host State b) The Law of a Third State c) International Law d) The Law of the Contract 4. Choice of Law or Choice of Rules

Paragraphs 1–42 1–2 3–34 4–15

6–10 11 12–15 16–17 18–19 20–28 29–34 35 36–42 43–361

43–190 43–44 45–47 48–70 48–56 57–62 63–68 69–70 71–74 797

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B. C.

D. E.

F.

5. Limits on Choice of Law a) Reasonable Connection b) Mandatory Provisions of the Host State’s Law c) Public Policy 6. Renvoi 7. Supervening Choice of Law 8. Indirect and Implicit Choice of Law a) Choice of Law by Reference to Domestic Legislation b) Choice of Law through the Parties’ Pleadings c) Reliance on a Clause on Applicable Law in a Treaty d) Reliance on a Treaty as a Choice of International Law e) Treaty as a Choice of General International Law 9. The Applicability of International Law a) International Law as the Chosen Law b) International Law as Part of Domestic Law c) International Law in the Absence of Its Choice 10. Subsequent Changes in the Chosen Law a) Stabilization Clauses b) In the Absence of a Stabilization Clause ‘In the absence of such agreement, . . .’ ‘. . . the Tribunal shall apply the law of the Contracting State party to the dispute . . .’ 1. The Decision in Favour of the Host State’s Law 2. Application of Host State Law by ICSID Tribunals 3. Limits on the Application of the Host State’s Law a) International Law b) The Host State’s Capacity to Submit to Arbitration c) The Investor’s Legal Status 4. Subsequent Changes in the Host State’s Law ‘. . . (including its rules on the conflict of laws) . . .’ ‘. . . and such rules of international law . . .’ 1. Rules or Principles of International Law 2. Finding the Rules of International Law a) Treaties b) Customary International Law c) General Principles of Law d) Judicial Decisions e) Writings f) Resolutions and Guidelines ‘. . . as may be applicable.’ 1. Applicability of International Law to Investment Disputes a) Reliance of Private Parties on International Law b) International Nature of Investment Disputes 2. Which Rules of International Law Are Applicable?

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75–87 75 76–79 80–87 88–90 91–96 97–147 98–105 106–115 116–126 127–142 143–147 148–171 148–152 153–157 158–171 172–190 173–185 186–190 191–195 196–223 196–200 201–217 218–222 218 219–221 222 223 224–229 230–260 230–231 232–260 234–242 243–245 246–250 251–256 257 258–260 261–322 261–267 261–266 267 268–272

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3. The Relationship of International Law to Domestic Law a) Parallel Application of International and Domestic Law b) Supplemental and Corrective Function of International Law c) Autonomous Application of Both Legal Systems G. ‘(2) The Tribunal may not bring in a finding of non liquet on the ground of silence or obscurity of the law.’ H. ‘(3) The provisions of paragraphs (1) and (2) shall not prejudice the power of the Tribunal to decide a dispute ex aequo et bono if the parties so agree.’ 1. General Meaning 2. Agreement on Decision ex aequo et bono a) Drafting the Agreement b) Supervening Agreement c) Necessity of an Agreement 3. The Relationship of Equity to Law a) Application of Equity and Law b) Equity within the Law 4. Limits on Equity 5. Decisions ex aequo et bono by ICSID Tribunals

799 273–322 275–282 283–309 310–322 323–327

328–362 328–332 333–347 333–335 336–338 339–347 348–354 348–350 351–354 355–359 360–362

BIBLIOGRAPHY Atanasova, Dafina, ‘Applicable Law Provisions in Investment Treaties: Forever Midnight Clauses?’ (2019) 10 Journal of International Dispute Settlement 396 Begic, Taida, Applicable Law in International Investment Disputes (Eleven International 2005) Bischoff, Jan Asmus, ‘Conflict of Laws and International Investment Arbitration’ (2018) 7 European International Arbitration Review 143 Bjorklund, Andrea K, ‘Investment Treaty Arbitral Decisions as Jurisprudence Constante’ in Colin B Picker, Isabella D Bunn and Douglas W Arner (eds), International Economic Law: The State and Future of the Discipline (Hart 2008) 265 Broches, Aron, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 Recueil des Cours 381 ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 Yearbook Commercial Arbitration 627 Chen, Richard C, ‘Precedent and Dialogue in Investment Treaty Arbitration’ (2019) 60 Harvard International Law Journal 47 Cheng, Tai-Heng, ‘Precedent and Control in Investment Treaty Arbitration’ (2007) 30 Fordham International Law Journal 1014 Cherian, Joy, Investment Contracts and Arbitration: The World Bank Convention on the Settlement of Investment Disputes (AW Sijthoff 1975) Chukwumerije, Okezie, ‘International Law and Municipal Law in ICSID Arbitration’ (1996) 1 Canadian Journal of International Business Law & Policy 61 Commission, Jeffery P, ‘Precedent in Investment Treaty Arbitration: A Citation Analysis of a Developing Jurisprudence’ (2007) 24 Journal of International Arbitration 129

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‘Precedent in Investment Treaty Arbitration: The Empirical Backing’ (2007) 4(5) Transnational Dispute Management Curtis, Christopher T, ‘The Legal Security of Economic Development Agreements’ (1988) 29 Harvard International Law Journal 317 Delaume, Georges R, ‘Le Centre International pour le règlement des différends relatifs aux investissements (CIRDI)’ (1982) 109 Journal du Droit International 775 ‘The Proper Law of State Contracts and the Lex Mercatoria: A Reappraisal’ (1988) 3 ICSID Review 79 ‘L’affaire du Plateau des Pyramides et le CIRDI: Considérations sur le droit applicable’ [1994] Revue de l’arbitrage 39 ‘The Proper Law of State Contracts Revisited’ (1997) 12 ICSID Review 1 Di Pietro, Domenico, ‘Applicable Law under Article 42 of the ICSID Convention – The Case of Amco v Indonesia’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 223 Douglas, Zachary, The International Law of Investment Claims (CUP 2009) 39–133 Elombi, George, ‘ICSID Awards and the Denial of Host State Law’ (1994) 11 Journal of International Arbitration 61 Feuerle, Peter, ‘International Arbitration and Choice of Law under Article 42 of the Convention on the Settlement of Investment Disputes’ (1977) 4 Yale Studies in World Public Order 89 Firth, Thomas V, ‘The Law Governing Contracts in Arbitration under the World Bank Convention’ (1968) 1 New York University Journal of International Law & Politics 253 Gaillard, Emmanuel, ‘The Extent of Review of the Applicable Law in Investment Treaty Arbitration’ in Emmanuel Gaillard and Yas Banifatemi (eds), Annulment of ICSID Awards (Stämpfli 2004) 190 Gaillard, Emmanuel and Banifatemi, Yas, ‘The Meaning of “and” in Article 42(1), Second Sentence, of the Washington Convention: The Role of International Law in the ICSID Choice of Law Process’ (2003) 18 ICSID Review 375 Gaillard, Emmanuel and Banifatemi, Yas (eds), Precedent in International Arbitration (Juris 2008) Gazzini, Tarcisio and De Brabandere Eric (eds), International Law: The Sources of Rights and Obligations (Martinus Nijhoff 2012) Giardina, Andrea, ‘La legge regolatrice dei contratti di investimento nel sistema ICSID’ (1982) 18 Rivista di diritto internazionale privato e processuale 677 Goldman, M Berthold, ‘Le droit applicable selon la Convention de la BIRD, du 18 mars 1965, pour le règlement des différends relatifs aux investissements entre Etats et ressortissants d’autres Etats’ in Centre de Recherche sur le Droit des Marchés et des Investissements Internationaux de la Faculté de Droit et de Sciences Economiques de Dijon (ed), Investissements étrangers et arbitrage entre Etats et personnes privées: La Convention BIRD du 18 mars 1965 (Pedone 1969) 133 Hepburn, Jarrod, Domestic Law in International Investment Arbitration (OUP 2017) ‘Domestic Investment Statutes in International Law’ (2018) 112 American Journal of International Law 658 Hirsch, Moshe, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Martinus Nijhoff 1993) 109–153

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‘Interactions between Investment and Non-Investment Obligations’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 154 ‘Sources of International Investment Law’ Hebrew University of Jerusalem Research Paper No 05-11 (2011) Igbokwe, Virtus C, ‘Developing Countries and the Law Applicable to International Arbitration of Oil Investment Disputes’ (1997) 14 Journal of International Arbitration 99 ‘Determination, Interpretation and Application of Substantive Law in Foreign Investment Treaty Arbitrations’ (2006) 23 Journal of International Arbitration 267 Kahn, Phillipe, ‘The Law Applicable to Foreign Investments: The Contribution of the World Bank Convention on the Settlement of Investment Disputes’ (1968) 44 Indiana Law Journal 1 Kaufmann-Kohler, Gabrielle, ‘Arbitral Precedent: Dream, Necessity or Excuse?’ (2007) 23 Arbitration International 357 Kjos, Hege E, Applicable Law in Investor–State Arbitration: The Interplay between National and International Law (OUP 2013) Kreindler, Richard, ‘The Law Applicable to International Investment Disputes’ in Norbert Horn (ed), Arbitrating Foreign Investment Disputes: Procedural and Substantive Legal Aspects (Kluwer 2004) 401 Lauterpacht, Elihu, ‘The World Bank Convention on the Settlement of International Investment Disputes’ in Recueil d’études de droit international en hommage à Paul Guggenheim (Faculté de Droit de l’Université Genève and Institut Universitaire de Hautes Études Internationales 1968) 642 Aspects of the Administration of International Justice (Grotius Pub 1991) 117–152 Leben, Charles, ‘La Théorie du contrat d’état et l’évolution du droit international des investissements’ (2003) 302 Recueil des Cours 199 Lillich, Richard B, ‘The Law Governing Disputes under Economic Development Agreements: Re-examining the Concept of “Internationalization”’ in Richard B Lillich and Charles N Brower (eds), International Arbitration in the 21st Century: Towards ‘Judicialization’ and Uniformity? (Transnational Pub 1993) 61 Masood, Arshad, ‘Law Applicable in Arbitration of Investment Disputes under the World Bank Convention’ (1973) 15 Journal of the Indian Law Institute 311 Nassar, Nagla, ‘Internationalization of State Contracts: ICSID, The Last Citadel’ (1997) 14 Journal of International Arbitration 185 Parra, Antonio R, ‘Applicable Substantive Law in ICSID Arbitrations Initiated under Investment Treaties’ (2001) 16 ICSID Review 20 ‘Applicable Law in Investor–State Arbitration’ (2009) 6(1) Transnational Dispute Management Potestà, Michele, ‘The Interpretation of Consent to ICSID Arbitration Contained in Domestic Investment Laws’ (2011) 27 Arbitration International 149 Reinisch, August, ‘The Role of Precedent in ICSID Arbitration’ [2008] Austrian Arbitration Yearbook 495 Reisman, W Michael, ‘The Regime for Lacunae in the ICSID Choice of Law Provision and the Question of Its Threshold’ (2000) 15 ICSID Review 362 Reisman, W Michael and Arsanjani, Mahnoush H, ‘Applicable Law under the ICSID Convention: The Tortured History of the Interpretation of Article 42’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer Law International 2015) 3

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Sacerdoti, Giorgio, ‘Investment Arbitration under ICSID and UNCITRAL Rules: Prerequisites, Applicable Law, Review of Awards’ (2004) 19 ICSID Review 1 Sasson, Monique, Substantive Law in Investment Treaty Arbitration (2nd edn, Wolters Kluwer 2017) Schreuer, Christoph, ‘Decisions Ex Aequo et Bono under the ICSID Convention’ (1996) 11 ICSID Review 37 ‘International and Domestic Law in Investment Disputes: The Case of ICSID’ (1996) 1 Austrian Review of International and European Law 89 ‘Failure to Apply the Governing Law in International Investment Arbitration’ (2002) 7 Austrian Review of International and European Law 147 ‘Diversity and Harmonization of Treaty Interpretation in Investment Arbitration’ (2006) 3(2) Transnational Dispute Management ‘The Development of International Law by ICSID Tribunals’ (2016) 32 ICSID Review 728 Schreuer, Christoph and Weiniger, Matthew, ‘A Doctrine of Precedent?’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 1188 Shihata, Ibrahim FI and Parra, Antonio R, ‘Applicable Substantive Law in Disputes between States and Private Foreign Parties: The Case of Arbitration under the ICSID Convention’ (1994) 9 ICSID Review 183 Spiermann, Ole, ‘Applicable Law’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 89 Tawil, Guido S, ‘Applicable Law’ in UNCTAD (ed), Course on Dispute Settlement. International Centre for Settlement of Investment Disputes (United Nations 2003) ch 2.6 Wälde, Thomas, ‘Confidential Awards as Precedent in Arbitration: Dynamics and Implication of Award Publication’ in Emmanuel Gaillard and Yas Banifatemi (eds), Precedent in International Arbitration (Juris 2008) 113 Weil, Prosper, ‘The State, the Foreign Investor, and International Law: The No Longer Stormy Relationship of a Ménage à Trois’ (2000) 15 ICSID Review 401

I. INTRODUCTION A. Purpose of the Provision 1

2

The Convention does not provide substantive rules for the relationship between host States and foreign investors. It is merely designed to establish a procedural framework for the settlement of investment disputes. Suggestions, made in the course of the Convention’s drafting, to offer some substantive guidance to tribunals (History, Vol. II, pp. 418 ff.) were not pursued (ibid., pp. 465, 472, 570). Doing so would have led to insurmountable difficulties in trying to reconcile sharply conflicting positions between different delegations and would have endangered the entire project. At the same time, it was considered necessary to offer some legal security and predictability concerning the outcome of arbitration proceedings. Art. 42 provides a mechanism whereby the tribunal is to select the appropriate rules of substantive law for the particular dispute. It is designed to combine flexibility with certainty. Flexibility by granting maximum autonomy to the parties in choosing rules, certainty by ensuring that the tribunal will find appropriate rules even in the absence of such a choice. The aim of flexibility is served by the first sentence of para. (1), on agreement by the parties, and by para. (3), extending party autonomy to equitable

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principles. The aim of certainty is served by the second sentence of para. (1), designating the host State’s law in conjunction with international law as the applicable law in the absence of agreement, and by para. (2), prohibiting a finding of non liquet by the tribunal. B. Issues of Applicable Law Not Governed by Article 42 Art. 42 governs only the question of the law to be applied to the merits of a dispute. This has to be distinguished from a number of other important aspects that can arise in an investment dispute, which are not, however, regulated by Art. 42 of the ICSID Convention. These include the law applicable to procedure and jurisdiction (see paras. 4–15 infra), the determination of nationality of the private party (see paras. 16–17 infra), standing of shareholders (see paras. 18–19 infra), questions of corporate capacity and corporate authority (see paras. 20–28 infra), and the existence and scope of property rights (see paras. 29–34 infra).

3

1. The Law Applicable to Procedure and Jurisdiction Art. 42 addresses only the substantive law to be applied on the merits, not procedure.1 Art. 44 of the Convention unequivocally provides that arbitration proceedings are regulated exhaustively by the Convention itself and by the rules adopted under it subject to any agreement by the parties. In the absence of guidance within the Convention’s system, the tribunal is to decide any procedural question independently of outside regulations2 (see Art. 44, para. 3). Similarly, Art. 42 does not govern questions of the tribunal’s jurisdiction under Art. 25 (see also paras. 218–220 infra). This holds true for jurisdiction based on national legislation, contract, and treaty. In a dispute under the Energy Charter Treaty (ECT), the Tribunal in Vattenfall v Germany confirmed this approach, relying on the Second Edition of this Commentary. It explicitly held that Art. 42 of the ICSID Convention only concerns the law applicable to the merits of a dispute and does not address issues of jurisdiction.3

1 Moshe Hirsch, The Arbitration Mechanism of the International Center for the Settlement of Investment Disputes (Martinus Nijhoff 1993) 110; Christoph Schreuer, ‘International and Domestic Law in Investment Disputes: The Case of ICSID’ (1996) 1 Austrian Rev Int’l & Eur L 89, 90; M Berthold Goldman, ‘Le droit applicable selon la Convention de la BIRD, du 18 mars 1965, pour le règlement des différends relatifs aux investissements entre Etats et ressortissants d’autres Etats’ in Centre de Recherche sur le Droit des Marchés et des Investissements Internationaux de la Faculté de Droit et de Sciences Economiques de Dijon (ed), Investissements étrangers et arbitrage entre Etats et personnes privées: La Convention BIRD du 18 mars 1965 (Pedone 1969) 133, 138 ff. See eg CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 42, 87–89; Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) paras 118, 119; Hydro Energy v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (9 March 2020) para 502; Landesbank Baden-Württemberg v Spain, Decision on Intra-EU Objection (25 February 2019) para 161. 2 See LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 357. 3 Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) paras 118–119; Hydro Energy v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (9 March 2020) para 502; Landesbank Baden-Württemberg and others v Spain, Decision on Intra-EU Objection (25 February 2019) para 161; Strabag v Poland (ad hoc), Partial Award on Jurisdiction (4 March 2020) para 8.106; WalAm Energy v Kenya, Award (10 July 2020) para 350; STEAG v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (8 October 2020) para 259. See also Venetia Argyropoulou, ‘Vattenfall in the Aftermath of Achmea: Between a Rock and a Hard Place?’ (2019) 4 EILA Rev 203,

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a) Clauses in Domestic Legislation as Basis of Consent 6

7

Where claimants have sought to base consent on the national legislation of the respondent State, tribunals have applied principles of statutory interpretation, as well as rules of international law relating to unilateral acts.4 The emphasis on either domestic law or on international law varies from case to case5 (see Art. 25, paras. 1039–1041). In SPP v Egypt, a provision of Egyptian law served as the basis for jurisdiction (see Art. 25, paras. 790–792). Egypt contended that Egyptian law by virtue of Art. 42(1) governed the jurisdictional issues.6 The Tribunal rejected Egypt’s argument that its own interpretation of an ICSID clause in its legislation was controlling. Instead, it pointed out that the statutory provision, which SPP claimed to be a unilateral acceptance of the Centre’s jurisdiction, would have to be considered in light of the international law governing unilateral juridical acts.7 After referring to decisions of the Permanent Court of International Justice (PCIJ) and of the International Court of Justice (ICJ) on unilateral consent to jurisdiction, the Tribunal concluded: in deciding whether in the circumstances of the present case Law No. 43 constitutes consent to the Centre’s jurisdiction, the Tribunal will apply general principles of statutory interpretation taking into consideration, where appropriate, relevant rules of treaty interpretation and principles of international law applicable to unilateral declarations.8

8

In Mobil v Venezuela, the Claimants wanted to base jurisdiction on a provision of domestic law. The Tribunal decided that those unilateral acts ‘must accordingly be interpreted according to the ICSID Convention itself and to the rules of international law governing unilateral declarations of States.’9

4

5

6 7 8 9

212–214; Julian Scheu and Petyo Nikolov, ‘The Incompatibility of Intra-EU Investment Treaty Arbitration with European Union Law – Assessing the Scope of the ECJ’s Achmea Judgement’ (2019) 62 German YBIL 475. See Yulia Andreeva, ‘Interpreting Consent to Arbitration as a Unilateral Act of State: A Case against Conventions’ (2011) 27 Arb Int’l 129 ff; David D Caron, ‘The Interpretation of National Foreign Investment Laws as Unilateral Acts under International Law’ in Mahnoush H Arsanjani and others (eds), Looking to the Future: Essays on International Law in Honor of W Michael Reisman (Brill 2011) 650 ff; Michele Potestà, ‘The Interpretation of Consent to ICSID Arbitration Contained in Domestic Investment Laws’ (2011) 27 Arb Int’l 149, 160 ff; Makane M Mbengue, ‘National Legislation and Unilateral Acts of States’ in Tarcisio Gazzini and Eric De Brabandere (eds), International Investment Law: The Sources of Rights and Obligations (Martinus Nijhoff 2012) 183, 206 ff; Jarrold Hepburn, ‘Domestic Investment Statutes in International Law’ (2018) 112 AJIL 658 ff. See SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 55 ff; Zhinvali v Georgia, Award (24 January 2003) para 229; Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 85; CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) para 79; Brandes v Venezuela, Award (2 August 2011) paras 36, 81; Pac Rim v El Salvador, Decision on Jurisdiction (1 June 2012) para 5.33; Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013) paras 81, 86, 103; ConocoPhillips v Venezuela, Decision on Jurisdiction and Merits (3 September 2013) para 255; PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) paras 264, 265. See also a similar argument in SOABI v Senegal, Award (25 February 1988) paras 4.54, 4.55. SPP v Egypt, Decision on Jurisdiction II (14 April 1988) paras 55 ff. ibid para 61. Cf also ibid, Dissenting Opinion El Mahdi (14 April 1988) in (1995) 3 ICSID Reports 163, 170, 177, 186. See also CEMEX v Venezuela, Decision on Jurisdiction (30 December 2010) paras 67–79. Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) para 85.

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The Tribunal in PNG Sustainable Development v Papua New Guinea confirmed this approach. It found that statutory provisions referring to ICSID arbitration were of a hybrid nature and were governed by both national and international law. It held:

9

[T]he Tribunal concludes that such legislative provisions are of a ‘hybrid’ nature. As a consequence, interpretation of those provisions must also be approached from a hybrid perspective, taking into account both that State’s domestic law on statutory construction and international law. Where the principles of interpretation under the State’s domestic law conflict with international law principles, international law principles will ordinarily prevail, although this is an issue that must be resolved on a case-by-case basis, in light of the nature of the conflict. In general, the relevant rules of international law would be sui generis, reflecting the character of unilateral acts, but the Vienna Convention’s provisions will often be applicable by analogy.10

Therefore, the determination as to whether a State has validly consented to ICSID’s jurisdiction by way of national legislation is to be made both as a matter of statutory interpretation and also on the basis of international law.

10

b) Clauses in an Agreement between the Parties as Basis of Consent In CSOB v Slovakia, an agreement between the parties was the basis for jurisdiction (see Art. 25, para. 777). The Tribunal held:

11

The question of whether the parties have effectively expressed their consent to ICSID jurisdiction is not to be answered by reference to national law. It is governed by international law as set out in Article 25(1) of the ICSID Convention.11

c) Clauses in an International Investment Treaty as Basis of Consent In Siemens v Argentina, the Tribunal had to assess its treaty-based jurisdiction. It rejected Argentina’s argument that only the provision on applicable law in the Argentina–Germany BIT governed questions of jurisdiction:

12

Argentina in its allegations has not distinguished between the law applicable to the merits of the dispute and the law applicable to determine the Tribunal’s jurisdiction. This being an ICSID Tribunal, its jurisdiction is governed by Article 25 of the ICSID Convention and the terms of the instrument expressing the parties’ consent to ICSID arbitration, namely, Article 10 of the Treaty. Therefore, the Tribunal needs to assess whether the Request for Arbitration meets the requirements of Article 25 of the ICSID Convention and of Article 10 of the Treaty.12

The prevailing view, that Art. 42 does not address questions of jurisdiction, was reaffirmed in the Decision on Jurisdiction in CMS v Argentina.13 The Tribunal held:

10 PNG Sustainable Development v Papua New Guinea, Award (5 May 2015) para 265. 11 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 35. See also Alpha Projektholding v Ukraine, Award (8 November 2010) paras 225–227; Duke Energy v Peru, Decision on Annulment (1 March 2011) paras 140–142; Meerapfel v Central African Republic, Award (12 May 2011) paras 146–147. 12 Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 31. See also Azurix v Argentina, Decision on Jurisdiction (8 December 2003) paras 48–50. 13 CMS v Argentina, Decision on Jurisdiction (17 July 2003) paras 42, 87–89.

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schreuer’s commentary on the icsid convention Article 42 is mainly designed for the resolution of disputes on the merits and, as such, it is in principle independent from the decisions on jurisdiction, governed solely by Article 25 of the Convention and those other provisions of the consent instrument which might be applicable, in the instant case the Treaty provisions. However, the argument of the Republic of Argentina has merit in so far as the parties can agree to a different choice of law applicable also to jurisdictional questions. The very option the investor has under the Treaty to submit a dispute to local jurisdiction also involves to an extent a choice of law provision, as local courts will apply mainly domestic law. In such a case, domestic law might apply together with the Treaty and Convention or separately.14

14

Other tribunals have confirmed that in case of treaty-based jurisdiction the law applicable to the tribunal’s jurisdiction was the provisions of the BIT and Art. 25.15 In Inmaris Perestroika v Ukraine, the Tribunal summarized the question of applicable law as follows: The BIT and Article 25(1) of the ICSID Convention constitute the applicable law for deciding questions of the Tribunal’s jurisdiction. In considering such questions, rules of international law, including the Vienna Convention on the Law of Treaties of 1969 and, in particular, the principles of treaty interpretation set forth in Articles 31–33 thereof, may appropriately be invoked. Likewise, points of relevant domestic law may inform the Tribunal’s jurisdictional analysis, but its conclusions must ultimately be reached under the BIT and the ICSID Convention themselves.16

15

In a dispute under the ECT, the Tribunal in Landesbank Baden-Württemberg and others v Spain endorsed this approach. It stated that Art. 26(1) to (5) of the ECT and Art. 25 of the ICSID Convention define the scope of jurisdiction of a tribunal under the ECT.17

2. Nationality of the Investor 16

Art. 42 also does not govern the nationality of the investor. Primarily, the law of the State whose nationality is claimed determines the nationality of a natural person (see Art. 25, paras. 1117–1126). In Soufraki v UAE, the Tribunal reaffirmed the primary relevance of the law of the State whose nationality is claimed. The Tribunal also

14 ibid para 88. To the same effect CMS v Argentina, Decision on Annulment (25 September 2007) para 68. 15 See eg Enron v Argentina, Decision on Jurisdiction (14 January 2004) para 38; AES v Argentina, Decision on Jurisdiction (26 April 2005) paras 34–39; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) paras 15–17, 57; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 25–28; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 65–68; Saipem v Bangladesh, Decision on Jurisdiction on Provisional Measures (21 March 2007) paras 68–70, 78–82; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 56, 57; Daimler v Argentina, Award (22 August 2012) paras 45–50, 136–138; Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 47–52; Teinver v Argentina, Decision on Jurisdiction (21 December 2012) paras 227–228; Ambiente Ufficio and others v Argentina, Decision on Jurisdiction (8 February 2013) paras 134, 153, 233–246, 257, 514–515; KT Asia v Kazakhstan, Award (17 October 2013) paras 85–89; Philip Morris v Uruguay, Decision on Jurisdiction (7 July 2013) para 30; Vestey v Venezuela, Award (15 April 2016) paras 114, 115; Adamakopoulos and others v Cyprus, Decision on Jurisdiction (7 February 2020) para 157. 16 Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 54. 17 Landesbank Baden-Württemberg and others v Spain, Decision on Intra-EU Objection (25 February 2019) para 159.

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emphasized that it had jurisdiction to scrutinize whether the nationality requirements under domestic law were fulfilled It is accepted in international law that nationality is within the domestic jurisdiction of the State, which settles, by its own legislation, the rules relating to the acquisition (and loss) of its nationality. Article 1(3) of the BIT reflects this rule. But it is no less accepted that when, in international arbitral or judicial proceedings, the nationality of a person is challenged, the international tribunal is competent to pass upon that challenge. It will accord great weight to the nationality law of the State in question and to the interpretation and application of that law by its authorities. But it will in the end decide for itself whether, on the facts and law before it, the person whose nationality is at issue was or was not a national of the State in question and when, and what follows from that finding.18

The nationality of a juridical person is determined by the criteria of incorporation or seat of the company in question subject to pertinent agreements, treaties, and legislation (see Art. 25, paras. 1180–1229). The Tribunal in AES v Argentina expressly endorsed this view in its Decision on Jurisdiction and rejected the assertion of the host State that Art. 42 would be applicable to issues of nationality.19

17

3. Jus Standi of Minority Shareholders An issue related to nationality is the problem of jus standi, in particular of minority shareholders, to submit claims to ICSID. It is not governed by Art. 42. Rather, it is determined according to the applicable international investment agreements and Art. 25 (see Art. 25, paras. 284–290, 343–361). In the Decision on Preliminary Objections in Pan American v Argentina, the Tribunal rejected the host State’s view that the law applicable to the merits would also determine the jus standi of the Claimants.20 Instead, it found that

18

the instant case is not situated at the level of general international law but at that of treaty law – the BIT and the ICSID Convention – and the Claimants have established that the applicable Treaty deviates from Barcelona Traction, allowing, inter alia, claims based on direct or indirect shareholdings of nationals of one Contracting State in companies of another Contracting State.21

The Decision on Jurisdiction in the case of CMS v Argentina reached the same solution. Argentina had challenged the ability of minority shareholders to institute ICSID proceedings on the basis of domestic law provisions: ‘in that country, as in most civil and common law countries, to the effect that the corporate legal personality is distinct and separate from that of the shareholders.’22 The CMS tribunal, however, did not consider this legal distinction of Argentinian law ‘determinant’ because it found that

18 Soufraki v UAE, Award (7 July 2004) para 55. See also Champion Trading v Egypt, Decision on Jurisdiction (21 October 2003) s 3.4.1; Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 195–201; Micula v Romania I, Decision on Jurisdiction (24 September 2008) paras 86, 101. 19 AES v Argentina, Decision on Jurisdiction (26 April 2005) para 78 (citing the First Edition of this Commentary). 20 Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 192–193. 21 ibid para 217. 22 CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 42.

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‘the applicable jurisdictional provisions are only those of the Convention and the BIT, not those which might arise from national legislation.’23

4. Corporate Capacity and Authority to Represent (Lex Societatis) 20

21

Questions relating to the legal personality of a corporate foreign investor and to the authority to represent it are governed by the domestic law applicable to corporate bodies (lex societatis). This law is, in many cases, the law of the State of incorporation.24 Depending on the home State of the corporate body concerned, it may, however, also be the law of the seat.25 In Amco v Indonesia (see Art. 25, para. 686), the Claimant, a company registered in Delaware, was dissolved under the laws of Delaware approximately one month after the rendering of the first Award. Indonesia argued that under Indonesian law, which was applicable by virtue of Art. 42(1), second sentence, once a limited liability corporation is dissolved, it ceases to exist for any purpose.26 The Tribunal disagreed with Indonesia’s argument on applicable law: When a company enters into an agreement with a foreign legal person, the legal status and capacity of that company is determined by the law of the state of incorporation. Similarly, one should apply the law of the state of incorporation to determine whether such a company, though dissolved, is still an existing legal entity for any specified legal purpose. The dissolution of Amco Asia was governed by the law of the state of Delaware. Under Delaware law Amco Asia remains a juridical entity for purposes of any action, suit or proceeding begun by or against it prior to or within three years of dissolution or until such action, suit or proceeding is completed and any judgment, order or decree therein is executed (Section 278, Delaware General Corporation Law).27

22

In Scimitar v Bangladesh, the Respondents objected to jurisdiction on the ground that proceedings had been instituted by persons not competent to act for the Claimant. The Claimant was a company established under the laws of the British Virgin Islands. The Tribunal said: It is the joint position of the Parties that the law applicable to the question of corporate transactions and governance is the law of the British Virgin Islands. Upon its own review of applicable law, the Tribunal sees no reason to depart from this position, which is consonant with Article 42 [of the ICSID Convention]. The Tribunal has also

23 ibid. This finding was explicitly endorsed by the ad hoc Committee in CMS v Argentina, Decision on Annulment (25 September 2007) para 68. 24 See eg LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 93(i); Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 87–89. 25 Some domestic legal orders determine the lex societatis, as well as corporate nationality for purposes of investment treaty protection, in relation to the seat of the corporate body. This has been traditionally the situation under German law, including in Germany’s investment treaty practice. See Stephan W Schill, ‘Linking Private and Public International Law: The Determination of Nationality of Juridical Persons under German Investment Treaties’ in Stefan Huber and Christoph Benicke (eds), Festschrift für Herbert Kronke zum 70. Geburtstag (Gieseking 2020) 513. 26 Amco v Indonesia, Resubmitted Case: Decision on Jurisdiction (10 May 1988) (1993) 1 ICSID Reports 561. 27 ibid 562.

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examined the question of corporate authorization under the law of the British Virgin islands, which is that proceedings initiated by a corporation without proper corporate authority or authorization are invalid.28

Therefore, the Tribunal found that the law governing corporate transactions and governance was the law under which the company had been established. On that basis, the Tribunal found that the dispute was not within the jurisdiction of ICSID.29 In Abaclat and others v Argentina,30 it was disputed whether the corporate Claimants had the necessary capacity to be a party to the arbitration and were protected under the BIT. The Tribunal started by looking at the Claimants’ legal capacity under Italian domestic law.31 However, it concluded that the protection under the applicable BIT and the ICSID Convention extended even to entities without full legal capacity under domestic law. The Tribunal said:

23

24

With regard to the nature of the capacity necessary for corporations to benefit from the protection of the BIT and be a party to the present arbitration, the Tribunal is of the opinion that neither Article 1(2)(b) BIT nor Article 25 ICSID Convention limits the scope of eligible entities to those having full legal capacity, and also encompasses entities which enjoy limited civil capacity to the extent that such entities have the capacity to make an investment under the BIT and further to sue and to be sued.32

Therefore, the role of the law of incorporation for the determination of a disputing parties’ capacity to use ICSID arbitration has its limits. The Abaclat tribunal held that the lex societatis had to yield to the treaty provisions governing jurisdiction, which had to be interpreted autonomously. The law of the State of incorporation merely applies to the existence and capacity to sue of the juridical person in question. A further field in which domestic law has a role to play in the context of corporate entities pursuing ICSID claims is the authority to represent the entity in question. In practice, this has played a role in particular in respect of insolvent companies. According to some national laws, it is not the insolvent company that can act in legal proceedings, but the insolvency administrator who has to act for the company. Both Inmaris Perestroika v Ukraine and Herzig v Turkmenistan, which each involved insolvent German companies, are examples of such a case.33 By contrast, under Italian insolvency law, the insolvent company seems to remain the proper party to any legal proceedings. In Eskosol v Italy, a local Italian company who owned the investment was placed under receivership and brought an ICSID claim relying on the ECT. An Italian bankruptcy receiver controlled Eskosol on the date of the commencement of the proceedings. While the case raises many disputed issues, including in respect of the interpretation and application of the ICSID Convention, Italy

28 29 30 31 33

Scimitar v Bangladesh, Award (4 May 1994) paras 26, 28. ibid para 29. Abaclat and others v Argentina, Decision on Jurisdiction (4 August 2011). ibid para 407. 32 ibid para 416. Inmaris Perestroika v Ukraine, Decision on Jurisdiction (8 March 2010) para 31, fns 7, 10 (stating that ‘[f]or convenience, the Tribunal in this Decision will refer to [the insolvent company], even though [the insolvency administrator] is formally the Claimant on [the company’s] behalf’); Herzig v Turkmenistan, Decision on Security for Costs (27 January 2020) para 1.

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26

27

810

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did not object to the fact that the company and not the receiver acted as claimant in this case.34 Another case where the authority to represent a company, this time a Bank, and the applicable law was heavily disputed is PNB Banka v Latvia.35 As two different actors claimed that they legitimately were entitled to represent the Claimant, the Tribunal, in a procedural order, decided that the insolvency administrator appointed for the bank represented the Claimant until the end of the jurisdictional phase, and rejected a claim for representation of the Claimant based on a power of attorney issued by the bank’s board of directors. Domestic law would appear to be the law governing these matters.

5. Existence and Scope of Proprietary Rights 29

30

According to its Art. 25, the ICSID Convention is only applicable to disputes arising out of an investment. The Convention is silent on what an investment is (see Art. 25, para. 162). The definitions of ‘investment’ in international investment treaties often enumerate various proprietary rights, but do not define these rights.36 Municipal laws, particularly those of the host State, create them. Therefore, the host State’s law is important for establishing the existence and extent of the rights upon which the investor relies. This question is preliminary to any issue of interference with the investor’s rights.37 In Suez and Vivendi v Argentina, the Tribunal relied on domestic law to decide upon the nature of the rights allegedly expropriated, stating that a tribunal must first understand the nature of the rights allegedly expropriated before proceeding to determine whether they have been expropriated under international law. To assess the nature of these rights, in a case of alleged expropriation of contractual rights one must look to the domestic law under which the rights were created.38

31

In Alpha Projektholding v Ukraine, the Tribunal relied on domestic law to decide upon the existence of rights arising out of a joint activity agreement (JAA): Where necessary to resolve factual questions, including the scope of Claimant’s rights and interests in the JAAs, the Tribunal shall apply the domestic law of Ukraine.39

34 Eskosol v Italy, Decision under Rule 41(5) (20 March 2017). There also seems to have been no objection against the company in liquidation acting as Claimant in Grassetto v Slovenia (registered 4 June 2013, discontinued 29 January 2020 pursuant to Arbitration Rule 43(1)). See also Rumeli v Kazakhstan, Award (29 June 2008) para 327 (stating that ‘[t]he role of the TSDIF may be compared to some extent to the role of a receiver or liquidator or judicial manager. The presence of such an entity as manager of the company in accordance with the law is no bar to the jurisdiction of the Centre. The Arbitral Tribunal does not have to anticipate what would be the status of Claimants in case the two companies would be put into liquidation, since so far no such decision of liquidation has been taken’). 35 See PNB Banka v Latvia, Decision on Disqualification (16 June 2020) paras 142, 166. 36 See Monique Sasson, Substantive Law in Investment Treaty Arbitration (2nd edn, Kluwer 2017) 104 ff. 37 See Jarrod Hepburn, Domestic Law in International Investment Arbitration (OUP 2017) 2, 106. 38 Suez and Vivendi v Argentina, Decision on Liability (30 July 2010) para 151. See also Emmis v Hungary, Award (16 April 2014) para 48. 39 Alpha Projektholding v Ukraine, Award (8 November 2010) para 347.

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In Total v Argentina, the Tribunal emphasized the relevance of the host State’s law for determining the investor’s economic rights under the local legal system:

32

The first question concerns the role of Argentina’s domestic law in determining the content and the extent of Total’s economic rights as they exist in Argentina’s legal system. . . . The content and the scope of Total’s economic rights . . . must be determined by the Tribunal in light of Argentina’s legal principles and provisions. . . . Thus, the Tribunal shall determine the precise content and extent of Total’s economic rights under Argentina’s legal system in respect of Total’s claims under the BIT, wherever necessary in order to ascertain whether a breach of the BIT has occurred.40

The existence of property rights may depend on national rules on ownership of certain assets. The Tribunal in Libananco v Turkey stated with regard to an alleged share transfer:

33

[I]t is common ground between the Parties that Turkish law applies to the issue of whether (and when) Libananco acquired the shares in question and thus had an ‘Investment’ under Article 26(1) of the ECT and Article 25(1) of the ICSID Convention. . . . The Tribunal will also apply Turkish law (evidence of which has been given by both Parties) to determine whether there has been a valid transfer of the shares in question to Libananco as this is a question of domestic law.41

The Tribunal in Italba v Uruguay used the same approach. The Claimant, a US company, claimed to be the owner of a company incorporated in Uruguay. The Tribunal found that there was no evidence that the shares of the Uruguayan company Trigosul had been validly transferred to the Claimant. The Tribunal also found that ‘the law of Uruguay, the country in which Trigosul was established and registered and where it operates should apply to the validity of the endorsement.’42

34

C. Method for Determining the Applicable Law The rules of private international law of the lex fori guide a municipal court having to decide which system of law is applicable to a dispute. The lex fori containing conflict of laws rules in the case of ICSID arbitration is Art. 42. Art. 42 is designed to give guidance to the ICSID tribunal in choosing the proper law on the merits. The tribunal’s first task is to ascertain whether the parties have chosen a system of law or individual rules of law (Art. 42(1), first sentence). This choice may extend beyond legal rules sensu stricto to principles of equitable justice (Art. 42(3)). Only after determining that there is no agreement on applicable rules of law may the tribunal resort to the residual rule referring it to the law of the host State and to international law (Art. 42(1), second sentence).43 This method should provide the tribunal with sufficient authority to resolve

40 Total v Argentina, Decision on Liability (27 December 2010) para 39. 41 Libananco v Turkey, Award (2 September 2011) paras 112–113. See also ibid paras 385 ff. For a similar approach, see Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) paras 52, 115 ff; Philip Morris v Uruguay, Award (8 July 2016) paras 177, 178; Gavrilović v Croatia, Award (26 July 2018) para 432; Almasryia v Kuwait, Award (1 November 2019) paras 53–58. 42 Italba v Uruguay, Award (22 March 2019) para 213. 43 Georges R Delaume, ‘The Pyramids Stand – The Pharaohs Can Rest in Peace’ (1993) 8 ICSID Rev 231, 241–242; Georges R Delaume, ‘L’affaire du Plateau des Pyramides et le CIRDI: Considérations sur le droit applicable’ [1994] Revue de l’arbitrage 39, 41, 47; Christoph Schreuer, ‘Failure to Apply the

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the substantive dispute before it and should leave no room for silence or obscurity of the law making a decision impossible (Art. 42(2)). Despite the apparent clarity of Art. 42, ICSID tribunals have not always followed the method set out there. In particular, tribunals did not always clarify whether an agreement between the parties on the substantive law to be applied existed. At times, tribunals considered such a determination to be immaterial to applying the proper law (see paras. 100–102 infra). At other times, the line between the different situations envisaged in Art. 42 appears to have been blurred. D. Proper Law and Annulment 36

37

The risks of applying Art. 42 carelessly are well illustrated by the possible consequence of nullity of the resulting award44 (see also Art. 52, paras. 219–321). During the drafting of what eventually became Art. 52 on annulment, a suggestion was made to add to the clause on excess of powers (Art. 52(1)(b)) the words ‘including failure to apply the proper law’ (History, Vol. II, p. 517). The suggestion was not adopted. But the Chairman expressed the opinion that, while a mistake in applying the law would not be a valid ground for annulment, applying a different law from that agreed by the parties would lead to an award that could be properly challenged on the ground that the arbitrators had gone against the terms of the ‘compromis’ (ibid., p. 518). In Klöckner v Cameroon, the ad hoc Committee confirmed that the non-application of the rules contained in the arbitration agreement or the application of other rules may amount to an excess of powers leading to annulment.45 It adopted the distinction between a non-application of the governing law and a mistaken application of such law, holding that a mere error in law, even an essential one, would not generally constitute an excess of powers.46 The ad hoc Committee found that, in the case before it, the Tribunal, after having identified the applicable law correctly,47 had not, in fact, applied it, but had based its decision on a broad equitable principle without establishing its existence in positive law. No attempt had been made to show that Cameroonian law, based on French law, contained a ‘duty of full disclosure to a partner’ in a contract.48 In the ad hoc Committee’s opinion, the award’s reasoning seemed very much like a simple reference to equity. By limiting its reasoning to postulating, rather than demonstrating, the existence of the principle, the Tribunal had not applied the law of the Contracting

44

45 46 47 48

Governing Law in International Investment Arbitration’ (2002) 7 Austrian Rev Int’l & Eur L 147, 163–195; Taida Begic, Applicable Law in International Investment Disputes (Eleven International 2005) 11. See also Ibrahim FI Shihata and Antonio R Parra, ‘Applicable Substantive Law in Disputes between States and Private Foreign Parties: The Case of Arbitration under the ICSID Convention’ (1994) 9 ICSID Rev 183, 206 ff; Elihu Lauterpacht, Aspects of the Administration of International Justice (Grotius 1991) 102 ff; Andrea Giardina, ‘ICSID: A Self-Contained, Non-National Review System’ in Richard B Lillich and Charles N Brower (eds), International Arbitration in the 21st Century: Towards ‘Judicialization’ and Uniformity? (Transnational 1994) 199, 211; W Michael Reisman, ‘The Regime for Lacunae in the ICSID Choice of Law Provision and the Question of Its Threshold’ (2000) 15 ICSID Rev 362, 380; Richard Kreindler, ‘The Law Applicable to International Investment Disputes’ in Norbert Horn (ed), Arbitrating Foreign Investment Disputes: Procedural and Substantive Legal Aspects (Kluwer 2004) 401, 422. Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 59. ibid para 61. Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 58–59. ibid 59.

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State.49 In applying concepts or principles it probably considered equitable, the Tribunal had acted outside the framework of Art. 42(1), and had thus manifestly exceeded its powers in the sense of Art. 52(1)(b) (see paras. 341, 342 infra).50 In the Decision on Annulment in Amco v Indonesia, the ad hoc Committee reiterated the distinction between a failure to apply the proper law and a mere misconstruction of that law and pointed out that only the former would constitute a manifest excess of powers and a ground for annulment under Art. 52(1)(b).51 In addition, in the ad hoc Committee’s view, the invocation of equitable considerations was not automatically equivalent to a decision ex aequo et bono, which, in the absence of an agreement by the parties in accordance with Art. 42(3), would render a decision annullable for manifest excess of powers (see paras. 351–354 infra).52 In this case too, the complaint was not that the Tribunal had erred in selecting the proper law,53 but rather that it had failed to apply an essential provision of the correctly chosen applicable law. In calculating Amco’s investments in Indonesia, the Tribunal had ignored a rule of Indonesian law that only investments recognized and registered as such by the competent Indonesian authority were to be considered investments. By failing to apply this fundamental provision of Indonesian law, the Tribunal had manifestly exceeded its powers. The relevant portion of the Award, therefore, had to be annulled.54 In MINE v Guinea, the ad hoc Committee confirmed the view that disregard of the agreed rules of law would constitute a derogation from a tribunal’s terms of reference and could hence constitute an excess of powers. This would include a decision not based on any law, unless the parties had agreed on a decision ex aequo et bono. The ad hoc Committee also distinguished disregard of the applicable rules of law from a mere erroneous application, which furnishes no ground for annulment.55 Guinea had put forward the argument that in ruling on the point of breach of contract the Tribunal had ‘failed to apply any law whatsoever, much less the correct law – Guinean law, based on French law.’56 The ad hoc Committee rejected this contention. MINE had based its case on Art. 1134 of the Code Civil de l’Union Française applicable in Guinea and containing the principles of pacta sunt servanda and good faith. The Tribunal had erred in that it had cited Art. 1134 of the French Civil Code.57 The ad hoc Committee noted that the two Articles in the two Codes not only bore the same number, but also had the same contents and that this error did not warrant annulment.58 Despite the distinction they made between a non-application of the proper law and its mere misapplication, the Klöckner and Amco ad hoc Committees applied extremely strict standards to the Awards before them. There was no question of an incorrect choice

49 50 51 52 53 54 55 56 57 58

Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 79. See also paras 211, 212 infra. Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 79. Amco v Indonesia, Decision on Annulment (16 May 1986) para 23. ibid paras 26, 28. See Amco v Indonesia, Award (20 November 1984) paras 147, 148. Amco v Indonesia, Decision on Annulment (16 May 1986) paras 93–105. MINE v Guinea, Decision on Annulment (22 December 1989) para 5.04. ibid para 6.30. See MINE v Guinea, Award (6 January 1988) (1997) 4 ICSID Reports 54, 73. MINE v Guinea, Decision on Annulment (22 December 1989) para 6.40. A similar argument on ‘failure to apply the law’ in the context of the award of damages was not dealt with by the ad hoc Committee, ibid paras 6.93, 6.109.

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of law in either case. In Klöckner, the Tribunal had failed to substantiate the rule it applied in terms of the relevant legislation and court practice. In Amco, the Tribunal had failed to take account of a procedural rule of the applicable law that would have led it to disregard investments, which had, in fact, been made. The two ad hoc Committees’ reasoning blurs the boundary between an error in the interpretation or application of the governing law and a failure to apply the applicable law. In this way, the distinction between an incorrect choice of law and a misapplication of the correctly chosen law becomes tenuous. No matter how justified the annulments in Klöckner and Amco were in terms of a failure to apply the proper law, the fact remains that a violation of Art. 42 may lead to the annulment of an award. The preparatory works (see para. 36 supra), as well as the decisions of the ad hoc Committees referred to above, leave no doubt that an agreement on choice of law is an essential element of the parties’ undertaking to arbitrate. In the absence of an express agreement on choice of law, the second sentence of Art. 42(1) would equally form part of the tribunal’s ‘terms of reference.’ Its violation would therefore also expose the award to annulment.59 Subsequent ad hoc committees have confirmed that a non-application of the proper law may constitute an excess of powers calling for annulment. At the same time, the committees stressed the distinction between a mere misapplication of the properly selected law and an error of such magnitude as to amount to a non-application of the proper law.60 The relevant cases are examined in more detail in the context of the provision of Art. 52 on manifest excess of powers (see Art. 52, paras. 242–262).

II. INTERPRETATION A. ‘(1) The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties.’

1. Freedom of Choice 43

Art. 42(1) proceeds from the basic freedom of the parties to choose the law they consider most appropriate for their relationship.61 This freedom of choice is a recurrent theme in the travaux préparatoires (History, Vol. II, pp. 266–267, 330, 514, 569–570, 984), although certain delegates aired misgivings that this might be exploited to the

59 Shihata and Parra (n 44) 207. 60 See eg Amco v Indonesia, Resubmitted Case: Decision on Annulment (17 December 1992) paras 7.18–7.29; Wena Hotels v Egypt, Decision on Annulment (5 February 2002) paras 21–55; CDC v Seychelles, Decision on Annulment (29 June 2005) paras 44–47; Repsol v Petroecuador, Decision on Annulment (8 January 2007) para 38; MTD v Chile, Decision on Annulment (21 March 2007) paras 44–48, 59–77; Soufraki v UAE, Decision on Annulment (5 June 2007) paras 35, 37, 79–114; Lucchetti v Peru, Decision on Annulment (5 September 2007) para 98; Micula v Romania I, Decision on Annulment (26 February 2016) para 127; TECO v Guatemala, Decision on Annulment (5 April 2016) paras 77–80; Gambrinus v Venezuela, Decision on Annulment (30 October 2017) paras 163–165; Standard Chartered Bank v TANESCO, Decision on Annulment (22 August 2018) para 282; UAB v Latvia, Decision on Annulment (8 April 2020) paras 107, 108, 149–161. 61 See generally on the freedom of choice of law Kurt Lipstein, ‘International Arbitration between Individuals and Governments and the Conflict of Laws’ in Bin Cheng and Edward D Brown (eds), Contemporary Problems of International Law: Essays in Honour of Georg Schwarzenberger (Stevens 1988) 177.

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advantage of the foreign investor (ibid., p. 803). The parties to the dispute are free to avail themselves of the option offered by Art. 42(1), first sentence, or to leave the question of applicable law to the residual rule of Art. 42(1), second sentence. There are several possible motives for selecting a particular system of law. A desire to create greater certainty, a preference for a law with which one of them or both are familiar, or the wish to maximize the legal protection for one of them, most notably the foreign investor, may influence the parties.62 On the other hand, the law most closely connected to the contractual relationship will presumably be the most practical choice. In the context of an investment contract, the State party may insist on the application of its own domestic law as a matter of principle and of national prestige. The parties to the dispute will only exercise this choice jointly if they enter into a direct agreement. If a national law is the basis of consent, the host State may choose the applicable law. In case of consent based on a treaty, the two States may agree on the applicable law. In both of these situations, the investor can only accept any choice of law made in the law or treaty (see paras. 97–126 infra).

44

2. Modality of Choice The parties may exercise the choice of law open to them in one of several ways. One is a direct agreement between the parties. The 1993 ICSID Model Clauses offer the following sample for an agreement on choice of law:

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Clause 10 Any Arbitral Tribunal constituted pursuant to this agreement shall apply specification of system of law [as in force on the date on which this agreement is signed]/[subject to the following modifications:].63

The explanatory comments to the Model Clauses point out that the parties are free to agree on rules of law defined as they choose. They spell out that they may refer to national law, international law, a combination of national and international law, or a law frozen in time or subject to certain modifications. Earlier versions of the Model Clauses offered specific references to international law64 and a formula for the exclusion of a particular system of law.65 Parties have exercised this choice in a number of cases (see paras. 48–70 infra). In Santa Elena v Costa Rica, the Tribunal held that an agreement on choice of law would have to be clear and unequivocal.66 If jurisdiction is based not on a direct agreement between the parties, but on a provision in the host State’s law or in a treaty (see Art. 25, paras. 780–874), those instruments may contain a choice of law prior to the institution of proceedings.67 Typically, the first direct contact between the parties in these cases is the request for

62 Aron Broches, ‘Choice-of-Law Provisions in Contracts with Governments’ (1971) 26 Rec Ass’n B City NY 42, 43. 63 (1997) 4 ICSID Reports 364. 64 See Clause XVII of the 1981 Model Clauses, (1993) 1 ICSID Reports 197, 206. 65 See Clauses XIX–XXI of the 1968 Model Clauses, (1968) 7 ILM 1159, 1175–1176. 66 Santa Elena v Costa Rica, Award (17 February 2000) paras 28, 35, 37, 40, 60–68. 67 For an overview of applicable law provision in investment treaties, see Dafina Atanasova, ‘Applicable Law Provisions in Investment Treaties: Forever Midnight Clauses?’ (2019) 10 JIDS 396.

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arbitration. However, the national legislation or treaty offering consent to jurisdiction may contain its own clause on applicable law. By taking up the offer of consent, the investor accepts the choice of law clause contained in the legislation or treaty. Therefore, the clause on applicable law becomes an implicit choice of law agreed by the parties. A national investment code providing for ICSID arbitration (see Art. 25, paras. 780–824) may specify the law to be applied by the tribunal (see para. 98 infra). Some bilateral investment treaties (BITs) offering consent to ICSID jurisdiction (see Art. 25, paras. 825–862) designate the applicable law (see paras. 116–123 infra). Multilateral treaties providing for ICSID’s jurisdiction (Art. 25, paras. 863–874) also contain clauses on applicable law (see paras. 124–126 infra).

3. The Law Chosen by the Parties a) The Law of the Host State 48

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Practice shows considerable variation in the drafting of choice of law clauses.68 A straightforward reference to the domestic law of the host State is relatively rare. An example for such a choice of law is contained in the Participation Agreement of 1982 between New Zealand and Mobil Oil NZ Ltd. Art. VII, providing for ICSID arbitration, contains the following formula: ‘7.7 An Arbitral Tribunal shall apply the Law of New Zealand.’69 In TANESCO v IPTL, the Tribunal applied the law of Tanzania ‘that being the governing law of the contract expressly designated by the parties by Article 19.4 of the [Power Purchase Agreement].’70 In Perenco v Ecuador, the Tribunal had to decide a dispute arising out of a series of measures, which, according to Perenco, were in breach of Ecuador’s obligations under the Ecuador–France BIT, as well as under two Participation Contracts. The arbitration was brought on the basis of the BIT, as well as on the basis of the arbitration clauses contained in the Contracts. The Participation Contracts contained the following choice of law clause: 22.1 Applicable legislation: This Contract is governed exclusively by Ecuadorian legislation, and the laws in force at the time of its execution are understood to be incorporated in it.71

51

The Tribunal mentioned that Art. 42(1) of the ICSID Convention provides for full autonomy of the parties to designate the rules of law governing any dispute arising between them.72 Based on the express choice of applicable law clause, the Tribunal stated that it had to apply Ecuadorian law concerning the contract claims.73 Concerning the Treaty claims, the Tribunal observed that the BIT did not contain an express clause 68 For overviews of practice, see Shihata and Parra (n 44) 198 ff; Georges R Delaume, ‘Le Centre International pour le règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 825 ff; Delaume, ‘L’affaire’ (n 43) 42 ff. 69 Attorney-General v Mobil Oil NZ Ltd, New Zealand, High Court, Wellington (1 July 1987) (1997) 4 ICSID Reports 117, 123. 70 TANESCO v IPTL, Award (12 July 2001) para 51, Appendix B, paras 98 ff. 71 Perenco v Ecuador, Decision on Remaining Issues of Jurisdiction and on Liability (12 September 2014) para 318 (footnote omitted). 72 ibid. 73 ibid para 320.

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on applicable law. It found that it had therefore to apply Art. 42(1), second sentence, of the ICSID Convention, which pointed to Ecuadorian and international law.74 In Roussalis v Romania, the parties agreed at the first session of the Arbitral Tribunal that host State law would govern the merits and that the BIT was part of host State law. The BIT contained an applicable law clause that pointed to the treaty and international law.75 The Tribunal applied both Romanian law and the BIT. The BIT contained a provision that the most favorable protection, in the domestic law of the parties to the BIT or in international agreements to which the two States are parties, shall to the extent that it is more favorable prevail over the BIT.76 Although invoked by the Claimant, the Tribunal did not apply the European Convention on Human Rights; rather, it decided that the BIT has a higher and more specific level of protection and that the European Convention would therefore not enlarge the protection available to the Claimant.77 A more cautious approach is taken where the law of the host State is chosen subject to a stabilization or intangibility clause designed to protect the contract from subsequent changes in the law (see paras. 173–185 infra). This is exemplified by clauses in contracts concluded by Guinea. Thus, Atlantic Triton v Guinea arose from a 1981 contract containing the following clause:

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Article 14: Law The term ‘law’ in the present Agreement refers to Guinean law. However, Guinean law will be applicable only insofar as it is not incompatible with the terms of the present Agreement, and where it is not more restrictive than the law in force at the date of entry into force of the present Agreement.78

Similarly, the Agreement of 1971 underlying the case of MINE v Guinea contains the following Art. XIII, para. 1:

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La Loi de la présente Convention sera la Loi de la République de Guinée en vigueur à la date de signature, sous réserve des dispositions du présent Article XIII.79

In both cases, the Agreement contains a ‘freezing clause’ and gives preference to the Agreement. Therefore, national law is only applicable when the Agreement is silent and only to the extent it was in existence at the ‘freezing’ date. The case of Grenada Private Power v Grenada provides another example for a limited application of host State law. A share purchase agreement between the investor and the Government provided for the application of host State law. However, for certain sections of the share purchase agreement, the agreement provided that its norms would prevail over inconsistent provisions of Grenadian law. The dispute concerned the

74 75 76 77 78

ibid para 532. Roussalis v Romania, Award (7 December 2011) paras 306, 307. Greece–Romania BIT (signed 23 May 1997, entered into force 11 June 1998) Art. 10. Roussalis v Romania, Award (7 December 2011) para 312. Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 23. Interestingly, the subsequent Article containing an ICSID arbitration clause contains a reference to Art. 42(3) of the Convention, see ibid 17. 79 MINE v Guinea, Decision on Annulment (22 December 1989) para 6.31. Subsequent paragraphs of the Agreement guarantee precedence of the Agreement over the law of Guinea (see paras 69, 70 infra).

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existence of such inconsistencies.80 The Tribunal accepted this choice of law. It said: ‘the Parties’ common intent regarding the choice of law is clear and unambiguous and will be given effect.’81 The Tribunal found no inconsistency between the provisions in the agreement and Grenadian law.82

b) The Law of a Third State 57

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References to the law of the investor’s home country, or to the law of a third State, are rare. Where the investment involves extensive activities of the investor in the host State, the choice of a law other than that of the host State would lead to difficulties. The investor’s activities will be so closely linked to the administrative law, labor law, tax law, foreign exchange regulations, real property legislation, and many other areas of the host State’s legal system that it would be impractical to choose the law of another country.83 But in cases involving loan contracts, there is a well-established practice to submit the agreement to the law of the lender’s country or, less frequently, to the law of a third country that has an important financial centre.84 In SPP v Egypt, a loan agreement of 1976 which was supplementary in nature to the parties’ primary agreement provided: ‘This Agreement shall be governed by and construed in all respects in accordance with the laws of England.’85 In CDC v Seychelles, an Amending and Rescheduling Agreement to a loan agreement between an English company and the host State provided as follows: ‘This Agreement and its performance shall be governed by and construed in all respects in accordance with the laws of England.’ The Tribunal noted that the submissions presented by the parties proceeded on the footing that the claim was to be resolved in accordance with English law.86 A choice of the law of the investor’s home country also seems to have been made in Colt Industries v Korea.87 The investment concerned technical and licensing agreements for the production of weapons and was apparently most closely connected with the licensor’s home country.88 In World Duty Free v Kenya, a contract for the construction, maintenance, and operation of an airport duty free complex contained two choice of law clauses opting for both English and Kenyan law. Because of the substantial similarity of the two legal systems, the Tribunal did not see any problem in applying this ‘perhaps awkwardly worded’ choice of law:

80 Grenada Private Power v Grenada, Award (19 March 2020) para 112. 81 ibid para 215. 82 ibid para 117. 83 Goldman (n 1) 155; Phillipe Kahn, ‘The Law Applicable to Foreign Investments: The Contribution of the World Bank Convention on the Settlement of Investment Disputes’ (1968) 44 Indiana LJ 1, 12–13. 84 Georges R Delaume, ‘ICSID and the Transnational Financial Community’ (1986) 1 ICSID Rev 237, 243. 85 SPP v Egypt, Award (20 May 1992) para 225. The choice of English law to the exclusion of Egyptian law turned out to be decisive for the computation of interest. 86 CDC v Seychelles, Award (17 December 2003) para 43. 87 This case was settled and discontinued with no published record of the proceedings. It is discussed in Shihata and Parra (n 44) 199. 88 ibid.

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158. The Tribunal now turns to the applicable laws chosen by the Parties in their Agreement of 27th April 1989, as required by Article 42(1) of the ICSID Convention. As already recorded above, Article 9(2)(c) of this Agreement provides that ‘any arbitral tribunal constituted pursuant to this Agreement shall apply English law’; and Article 10(A) provides that ‘This Agreement shall be governed by and construed in accordance with the law of Kenya.’ 159. As an express choice of applicable law to their contractual relations, these two provisions are perhaps awkwardly worded. For present purposes, however, no practical difficulty arises from their apparent inconsistency. . . . the Tribunal considers the two legal systems to have the same material effect as applied to this case . . .89

In situations where the application of a law other than that of the host State is feasible and desirable, it is particularly important that the parties avail themselves of the possibility to choose the governing law. In the absence of an explicit choice of law, an ICSID tribunal will not, as might be expected, select the law most closely related to the relationship in accordance with general conflict of laws principles. Rather, the mechanical rule of Art. 42(1), second sentence, will direct the tribunal to apply the law of the State party to the dispute (together with any applicable international law) no matter how tenuous the connection of the transaction with that law may be. The rules of the State party’s conflict of laws may, but need not, refer to another more appropriate law (see paras. 224–229 infra).

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c) International Law In situations where consent to arbitration is given in a contract, a more realistic way to protect the investors’ interests against the vagaries of the host State’s law is to internationalize their agreement.90 The parties achieve this most frequently by a reference to international law or to general principles of law, together with the host State’s law. To achieve this result, some BITs contain combined choice of law clauses of this kind (see paras. 116–123 infra).91 The result is closely akin to the residual rule of Art. 42(1), second sentence.92

89 World Duty Free v Kenya, Award (4 October 2006) paras 158–159. For another ICSID case in which the parties to a contract chose English law, see Azpetrol v Azerbaijan, Award (8 September 2009) para 49. 90 Richard B Lillich, ‘The Law Governing Disputes under Economic Development Agreements: Reexamining the Concept of “Internationalization”’ in Lillich and Brower (n 44) 61; Domenico Di Pietro, ‘Applicable Law under Article 42 of the ICSID Convention – The Case of Amco v Indonesia’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 223, 238. 91 For statistics, see Atanasova (n 67) 408 ff. 92 For examples, see Georges R Delaume, ‘State Contracts and Transnational Arbitration’ (1981) 75 AJIL 784, 796 ff; Georges R Delaume, Transnational Contracts, Applicable Law and Settlement of Disputes (Oceana 1990) ch XV, 64; Georges R Delaume, ‘How to Draft an ICSID Arbitration Clause’ (1992) 7 ICSID Rev 168, 184–185; Delaume, ‘Le Centre’ (n 68) 825 ff; Delaume, ‘L’affaire’ (n 43) 50; Thomas V Firth, ‘The Law Governing Contracts in Arbitration under the World Bank Convention’ (1968) 1 NYU JILP 253, 267 ff; Kahn (n 83) 15 ff; Pierre Lalive, ‘L’Etat en tant que partie à des contrats de concession ou d’investissement conclus avec des sociétés privées étrangères’ in UNIDROIT (ed), New Directions in International Trade Law vol 1 (Oceana 1977) 317, 332 ff. In Caratube v Kazakhstan, Award (5 June 2012) paras 224, 230, the Tribunal applied the law of Kazakhstan and such rules of international law as may be applicable according to a choice of law clause in a contract.

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In AGIP v Congo, the choice of law clause in the agreement read as follows: ‘The law of the Congo, supplemented if need be by any principles of international law, will be applicable.’93 In Kaiser Bauxite v Jamaica, the 1969 Agreement between the parties contained a reference to the host State’s law and international law supplemented by a stabilization clause: (3) In determining any dispute submitted to arbitration as aforesaid, the Arbitration Tribunal shall apply the law of Jamaica and such rules of international law as may be applicable excluding however any enactments passed or brought into force in Jamaica subsequent to the date of this agreement which may modify or affect the rights of the parties under the Principal Agreement or this Agreement and excluding also any law or rule which could throw doubt upon the authority or ability of the Government to enter into the Principal Agreement and this Agreement.94

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In CSOB v Slovakia, the Consolidation Agreement (CA), underlying the dispute, contained the following choice of law clause in its Art. 7(4): ‘This agreement shall be governed by the laws of the Czech Republic and the [BIT].’ The Tribunal applied a combination of international law and Czech private law. It said: An implied submission to international law can be seen in Article 7(4) CA where it is stated that the CA shall be governed by the BIT, in addition to the laws of the Czech Republic. In its First Decision on Jurisdiction (No. 55), the Tribunal concluded that by referring to the BIT in Article 7(4) CA, the Parties intended to incorporate the arbitration clause of Article 8 of the BIT into the CA. As the reference to the BIT in Article 7(4) is not limited to this particular provision, such incorporation into the CA is equally pertinent in respect of any other provision of the BIT that may be relevant for the interpretation and application of the CA. Even to the extent the CA is not governed by international law as such, the BIT, as it is incorporated into the CA, has to be interpreted in the context of the legal system under which it has been drafted. Consequently, the incorporation of the BIT includes the rules of international law that are relevant for its interpretation.95

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The Tribunal added that the substance of the dispute, which involved a guarantee by the Czech and Slovak governments to cover losses from the privatization of the Claimant, was governed by Czech private law.96 It is possible to internationalize a contract completely by referring exclusively to international law, to general principles of law, or to a set of usages customarily governing like transactions.97 However, this is not advisable. The contacts of the 93 Art. 15 of the Agreement of 2 January 1974, see AGIP v Congo, Award (30 November 1979) para 18. This provision was supplemented by stabilization clauses contained in separate Articles. In Meerapfel v Central African Republic, Award (12 May 2011) paras 291–295, the parties chose, in a contract, the law of the Organisation for the Harmonisation of Business Law in Africa (OHADA), a regional organization, and as a default general principles of international law. 94 Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 12. 95 CSOB v Slovakia, Award (29 December 2004) para 63. 96 ibid paras 71–72. In Caratube v Kazakhstan, Award (5 June 2012) paras 224, 230, the Tribunal applied the law of Kazakhstan and such rules of international law as may be applicable according to a choice of law clause in a contract. 97 On the general problem of a ‘lex mercatoria’ as the applicable law in international arbitration, see Georges R Delaume, ‘The Proper Law of State Contracts and the Lex Mercatoria: A Reappraisal’ (1988) 3 ICSID Rev 79; Andrea Giardina, ‘La legge regolatrice dei contratti di investimento nel sistema

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investment activity to various technical provisions of the host State’s law, such as administrative law, labor law, real property legislation, etc. (see para. 57 supra), would make such a formula impractical. The law thus chosen may lack the clarity and the technical detail that is desirable.98 But several multilateral treaties providing for ICSID arbitration, including NAFTA and the ECT, contain clauses on applicable law that refer only to the respective treaty and to rules of international law (see paras. 124–126 infra).

d) The Law of the Contract A doubtful method to select rules applicable to the parties’ relationship is to treat the agreement as a self-contained legal system detached from any existing domestic or international law. The choice of law provision in the 1971 Agreement underlying the case MINE v Guinea goes a long way towards reducing the impact of domestic law, but stops short of making the agreement a ‘contrat sans loi’: ‘la Loi Guinéenne n’interviendra dans l’interprétation et l’exécution de la présente Convention qu’à titre supplétif et seulement dans le cas où celle-ci laisserait une difficulté sans solution.’99 A genuine detachment of an agreement from any pre-existing and extraneous system of law is not only questionable on theoretical grounds, but may also create practical problems.100 In terms of Art. 42(1), there is no compelling reason why the ‘rules of law as may be agreed by the parties’ cannot be confined to the rules contained in their agreement. However, if a tribunal can find no guidance on a particular question in the agreement itself, it may resort to the second sentence of Art. 42(1). In view of the clear prohibition of a non liquet in Art. 42(2), a tribunal may treat an agreement to apply a set of rules that provide no answer to a question as an absence of agreement on applicable law concerning this particular question (see paras. 193–195 infra). Therefore, a choice of law clause couched in terms of an exclusive reference to the terms of the agreement between the parties is not necessarily a promising method to avoid the application of the law of the host State. Alternatively, where the parties agreed on the contract to be the applicable law, the tribunal may conclude that the parties’ agreement authorizes it, by implication, to fill gaps by recourse to general principles of law or to some other national law.

ICSID’ (1982) 18 Riv Dir Int Priv & Proc 677, 682–683; Goldman (n 1) 145; Kahn (n 83) 18; FrédéricEdouard Klein, ‘The Law to be Applied by the Arbitrators to the Substance of the Dispute’ in Jan C Schultsz and Albert Jan van den Berg (eds), The Art of Arbitration: Essays on International Arbitration. Liber Amicorum Pieter Sanders (Kluwer 1982) 189, 196 ff; Lalive (n 92) 324–325; Emmanuel Gaillard, ‘Thirty Years of Lex Mercatoria: Towards the Selective Application of Transnational Rules’ (1995) 10 ICSID Rev 208. 98 PF Sutherland, ‘The World Bank Convention on the Settlement of Investment Disputes’ (1979) 28 ICLQ 367, 394; Lalive (n 92) 335–336. For a contrary view, see Christopher T Curtis, ‘The Legal Security of Economic Development Agreements’ (1988) 29 Harvard ILJ 317, 341 ff. 99 Art. XIII(4) cited in MINE v Guinea, Decision on Annulment (22 December 1989) para 6.34. Cf also Delaume, ‘Le Centre’ (n 68) 827. 100 See esp Curtis (n 98) 340; Georges R Delaume, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1966) 1 Int’l Lawyer 64, 77; Goldman (n 1) 146–147; Hirsch (n 1) 119–120; Kahn (n 83) 14 ff; Lalive (n 92) 335; Wolfgang Peter, Arbitration and Renegotiation of International Investment Agreements (Kluwer 1986) 91 ff.

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4. Choice of Law or Choice of Rules 71

Art. 42(1), first sentence, refers to ‘rules of law’ rather than to systems of law.101 Therefore, it is generally accepted that the parties are not restricted to accepting an entire system of law tel quel, but are free to combine, to select, and to exclude rules or sets of rules of different origin.102 The parties may want to choose rules of law common to their two countries or indeed to any combination of countries they select.103 Alternatively, they may choose certain pieces of legislation from a particular legal system. In Autopista v Venezuela, the Tribunal expressly endorsed this method. It stated: The Tribunal observes that the first sentence of Article 42(1) refers to ‘rules of law’ rather than to systems of law. It is generally accepted that this wording allows the parties to agree on a partial choice of law, and in particular to select specific rules from a system of law.104

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Not infrequently, choice of law clauses refer to several legal systems cumulatively. For instance, a number of BITs refer to the law of the host State and to international law in a way similar to the residual rule of the second sentence of Art. 42(1) (see paras. 116–123 infra). The parties may also subject different parts of their relationship to different systems of law, a process called dépeçage.105 This is particularly likely to occur where separate agreements concluded at different times, and regulating different issues, govern the overall relationship.106 The parties may also exclude certain parts of a chosen system of law from its application to their relationship. The most common use of this technique is the exclusion of legislation passed by the host State after the conclusion of the investment agreement through a stabilization clause (see paras. 53, 65 supra; paras. 173–185 infra). The parties may agree to exempt the investor from certain fiscal, foreign exchange, or

101 Earlier drafts to the Convention referred to ‘the law to be applied.’ The change to ‘rules of law’ was only made relatively late. No reasons for the change are apparent from the travaux préparatoires. See History, Vol I, 190–192. 102 Curtis (n 98) 341; Joy Cherian, Investment Contracts and Arbitration: The World Bank Convention on the Settlement of Investment Disputes (AW Sijthoff 1975) 75; Andrea Giardina, ‘The International Centre for Settlement of Investment Disputes between States and Nationals of Other States (ICSID)’ in Petar Šarčević (ed), Essays on International Commercial Arbitration (Graham & Trotman 1989) 214, 216; Hirsch (n 1) 118–119; Lalive (n 92) 328–330. 103 Shihata and Parra (n 44) 189; Chittharanjan F Amerasinghe, ‘Submissions to the Jurisdiction of the International Centre for Settlement of Investment Disputes’ (1973/1974) 5 J Mar L & Comm 211, 238–239; Georges R Delaume, ‘The Proper Law of State Contracts Revisited’ (1997) 12 ICSID Rev 1; Kreindler (n 44) 408. 104 Autopista v Venezuela, Award (23 September 2003) para 96. See also Grenada Private Power v Grenada, Award (19 March 2020) para 215. 105 See esp Institut de Droit International, ‘Articles on Arbitration between States, State Enterprises or State Entities and Foreign Enterprises of the Institute of International Law’ (12 September 1989) (1990) 63(2) Ann IDI 324, 330, Art. 6; Di Pietro (n 90). 106 In SPP v Egypt, a supplementary loan agreement contained a choice of law clause not applicable to the rest of the parties’ relationship, see para 58 supra. In Perenco v Ecuador, the arbitration was brought on the basis of a BIT as well as on the basis of arbitration clauses contained in the contracts. The Tribunal decided that it had to apply Ecuadorian law concerning the contract claims and Art. 42(1), second sentence, concerning the Treaty claims; see paras 50, 51 supra.

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social security legislation.107 They may even purport to exclude rules that would limit the capacity of the government to enter into the agreement at issue.108 The parties are also free to declare applicable the rules of a treaty that is not in force109 or of a non-binding code of conduct. Although the term ‘rules of law’ might indicate that parties can choose only existing legal rules,110 there is nothing to stop them from adopting their own rules by reference to a document, which by itself is not binding.111

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5. Limits on Choice of Law a) Reasonable Connection Despite the parties’ basic freedom to choose the system or rules of law they consider best suited for their relationship, certain limitations to this freedom have been suggested. It is generally accepted that there is no requirement of a reasonable connection of the transaction to the law chosen by the parties in ICSID arbitration. Such a requirement of reasonable connection is mandated in some domestic legal systems to prevent irrational choices of law but is less appropriate in international arbitration where the choice of an unrelated ‘neutral’ legal system may be desirable and rational.112

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b) Mandatory Provisions of the Host State’s Law A variant of the above theory is the suggestion that certain mandatory or core provisions of the most closely connected system of law, usually the host State’s, cannot be dispensed with. Such rules would include the host State’s administrative, labor, monetary, regulatory, and penal law. These areas of legal regulation would be inherently reserved to the host State and would not be subject to contractual waiver.113 However, international law will govern in the event of inconsistencies between the host State’s domestic law and its international legal obligations; even mandatory provisions of host State law cannot override the State’s obligations under international law.114 While it would probably cause inconvenience to choose a law other than the host State’s in these matters (see also para. 57 supra), there is no reason why the host State should not have the power to do so.115 An investor may be required to apply higher standards of labor law than are otherwise required in the host State. The contract may contain special tax and customs arrangements. The investor may wish to exclude certain

107 See eg Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 4.24 ff. 108 See the choice of law rule in Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975), cited in para 65 supra. But see also paras 77, 78, 218–220 infra. 109 CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) paras 36–55. 110 Arshad Masood, ‘Law Applicable in Arbitration of Investment Disputes under the World Bank Convention’ (1973) 15 J Indian Law Institute 311, 317. 111 In Lemire v Ukraine, Decision on Jurisdiction and Liability (14 January 2010) paras 106–111, the Tribunal found the UNIDROIT principles applicable. 112 David J Branson and Richard E Wallace, ‘Choosing the Substantive Law to Apply in International Commercial Arbitration’ (1986) 27 Va JIL 39, 53 ff; Hirsch (n 1) 125–126. 113 Peter Feuerle, ‘International Arbitration and Choice of Law under Article 42 of the Convention on the Settlement of Investment Disputes’ (1977) 4 Yale Stu World Pub Order 89, 108; Giardina (n 97) 683–684. On the role of mandatory rules of law and investment arbitration, see Andrea Bjorklund, ‘Mandatory Rules of Law and Investment Arbitration’ (2007) 18 ARIA 175. 114 Bjorklund (n 113) 195. 115 Goldman (n 1) 154–155; Hirsch (n 1) 126.

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aspects of the host State’s traditional penal law in relation to his employees. The best that can be said is that the choice of a law other than the host State’s in these matters cannot be presumed lightly and that it would require unequivocal proof of the parties’ intent. A more difficult question is the exclusion of provisions in the host State’s domestic law limiting the authority or capacity of the host State to enter into certain types of arrangements. Thus, some domestic legal systems purport to curtail the capacity of the government to submit to international arbitration or to assent to the application of systems of law other than their own (see Art. 25, para. 1096).116 In Kaiser Bauxite v Jamaica, the choice of law provision in the 1969 agreement purported to exclude, inter alia, any rule of Jamaican law that could throw doubt upon the authority or ability of the Government to enter into agreements between the Parties117 (see para. 65 supra; cf. also paras. 219–221 infra). The theoretical question, whether a State can contract out of a rule of its own law limiting its freedom to enter into agreements, is not easy. Much will depend on whether the domestic provision is seen to affect the State’s capacity to contract resulting in the agreement’s nullity, or whether it is seen as a simple prohibition not affecting the agreement’s validity. In case of doubt, the latter solution, upholding the validity of the agreement, is to be preferred, especially where the investor has relied in good faith on the host State’s capacity to contract.118 Nevertheless, provisions of this kind in domestic law should be a cause of concern and should be investigated thoroughly before relying on a contractual clause purporting to exclude them.119

c) Public Policy 80

Public policy (ordre public) is a classic reason for excluding the application of foreign law by domestic courts. It represents the superiority of basic value choices of the local community over the strict application of conflict of laws rules. In the case of ICSID arbitration, there is no domestic legal system that would provide the standards for public policy. A host State’s reliance on its own ordre public in the face of an agreed choice of law pointing to another system of law is simply a breach of the undertaking to make the chosen law controlling.120 For instance, a State, after having consented to the subjection of a loan agreement to French law, could not argue that the obligation to pay interest is contrary to the public policy of its religiously inspired domestic law. Reliance on the ordre public of another State in which an ICSID award might have to be enforced121 would be equally unwarranted. Arts. 53 and 54 do not provide for such an exception to the obligation to recognize and enforce awards.122

116 117 118 119 120

Delaume (n 97) 94–95; Lalive (n 92) 326–327. Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 12. In this sense Institut de Droit International (n 105) Art. 4. Broches (n 62) 54. See, however, Horacio A Grigeria Naón, Choice-of-Law Problems in International Commercial Arbitration (Mohr Siebeck 1992) 281. 121 Feuerle (n 113) 108–109. 122 Hirsch (n 1) 127.

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The matter is different with regard to certain basic international tenets that may be described as international public policy.123 These principles would include, but not be restricted to, peremptory rules of international law. Examples are the prohibition of slavery, piracy, drug trade, terrorism, and genocide, the protection of basic principles of human rights, the prohibition to prepare and wage an aggressive war, or the use of force contrary to Art. 2(4) of the United Nations Charter. An ICSID tribunal would have to disregard provisions that would otherwise be applicable, whether contained in an investment agreement or adopted by reference, that violate these basic principles.124 If any theoretical justification is needed for this conclusion, it can be found in the fact that the Convention is rooted in international law which, in a wider sense, is the lex fori of ICSID arbitration. The application of international public policy to investment arbitration cases is less far-fetched than might appear at first sight. For instance, cooperation in certain forms of weapons production, especially weapons of mass destruction, could easily be seen to violate one or several of the principles enumerated above. The refusal of an ICSID tribunal to apply and enforce arrangements that serve the violation of one of these principles would be the only appropriate response. The application of international public policy would have to extend to arrangements that violate binding Security Council resolutions under Chapter VII of the UN Charter, even where the resolutions have not been made controlling by a domestic system of law chosen by the parties. An example for the decisive influence of international public policy is World Duty Free v Kenya. The case arose from a contract for the construction, maintenance, and operation of an airport duty free complex, which, the Tribunal found, had been procured by corruption. The Tribunal based its decision not only on the express choice of law clauses opting for both English and Kenyan law (see para. 61 supra). It also relied on international public policy as evidenced by the widespread condemnation of corrupt business practices in a number of regional and universal instruments outlawing bribery and corruption.125 The Tribunal held that the Claimant was not legally entitled to 123 See Bernardo M Cremades and David JA Cairns, ‘The Brave New World of Global Arbitration’ (2002) 3 JWIT 173, 205–208; Audley Sheppard, ‘Final Report on Public Policy as a Bar to the Enforcement of Arbitral Awards’ (69th ILA Conference, London 25–29 July 2000) 340, 345; Nils Börnsen, Nationales Recht in Investitionsschiedsverfahren (Mohr Siebeck 2016) 249 ff; Nartnirum Junngam, ‘Public Policy in International Investment Law: The Confluence of the Three Unruly Horses’ (2016) 51 Texas ILJ 45, 93 ff; Jean-Michel Marcoux, ‘Transnational Public Policy as an International Practice in Investment Arbitration’ (2019) 10 JIDS 496; Jean-Michel Marcoux, ‘Transnational Public Policy as a Vehicle to Impose Human Rights Obligations in International Investment Arbitration’ (2020) 21 JWIT 809; Eric De Brabandere, ‘The (Ir)Relevance of Transnational Public Policy in Investment Treaty Arbitration – A Reply to Jean-Michel Marcoux’ (2020) 21 JWIT 847. 124 Delaume (n 97) 90–91; Feuerle (n 113) 107–108; Hirsch (n 1) 120, 127 ff. See also Institut de Droit International (n 105) Art. 2. 125 See eg Inter-American Convention against Corruption (adopted 29 March 1996, entered into force 6 March 1997) (1996) 35 ILM 724; the UN Declaration against Corruption and Bribery in International Commercial Transactions, General Assembly Resolution 51/191 (16 December 1996) (1997) 36 ILM 1043; the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (adopted 21 November 1997, entered into force 15 February 1999) (1998) 37 ILM 4; the Council of Europe Criminal Law Convention on Corruption (signed 27 January 1999, entered into force 1 July 2002) (1999) 38 ILM 505; the African Union Convention on Preventing and Combating Corruption (adopted 11 July 2003, entered into force 5 August 2006) (2004) 43 ILM 5; and UN Convention against Corruption (adopted 31 October 2003, entered into force 14 December 2005) (2004) 43 ILM 37.

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maintain any of its pleaded claims ‘as a matter of ordre public international and public policy under the contract’s applicable laws.’126 It reasoned: In light of domestic laws and international conventions relating to corruption, and in light of the decisions taken in this matter by courts and arbitral tribunals, this Tribunal is convinced that bribery is contrary to the international public policy of most, if not all, States or, to use another formula, to transnational public policy. Thus, claims based on contracts of corruption or on contracts obtained by corruption cannot be upheld by this Arbitral Tribunal.127

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In a similar vein, the Tribunal in Niko Resources v Bangladesh concluded that international public policy constituted a limit to party autonomy. It stated that ‘[a] contract in conflict with international public policy cannot be given effect by arbitrators.’128 However, the relevance of international public policy is not limited to arbitrations based on contracts. The Tribunal in Churchill and Planet Mining v Indonesia decided in a case based on the Australia–Indonesia and the Indonesia–United Kingdom BITs that claims based on ‘fraud or forgery which a claimant deliberately or unreasonably ignored are inadmissible as a matter of international public policy.’129 In a case based on the ECT, the Tribunal in Liman Caspian Oil v Kazakhstan emphasized the invalidating effect for a transaction that was made in violation of international public policy at the international level. It held: [T]here are situations in which a transaction is to be considered as automatically invalid from the very beginning. A violation of international public policy is such a case in which an investment is invalid without a legal action for invalidation and without a court declaration of invalidity having to be issued.130

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These instances of international public policy should be distinguished from the applicability of international law pure and simple, which is discussed below in paras. 116–171 infra.

6. Renvoi 88

A law determined to be applicable to a transaction may in turn contain rules on the conflict of laws, which refer to another legal system. This process is termed renvoi. The second sentence of Art. 42(1), in referring to the host State’s law, specifically includes its rules on the conflict of laws (see paras. 224–229 infra). Art. 42(1) does not contain such a reference in its first sentence in connection with the law agreed by the parties. This may be taken as an indication that renvoi is not contemplated under the first sentence. Moreover, the first sentence refers to ‘rules of law’ rather than to a system of law. Only the latter could be expected to contain conflict of laws rules. 126 World Duty Free v Kenya, Award (4 October 2006) para 188. 127 ibid para 157. See also eg Inceysa v El Salvador, Award (2 August 2006) para 249; Plama v Bulgaria, Award (27 August 2008) para 141; Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) paras 431–434; Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 493, 508; Blusun v Italy, Award (27 December 2016) para 264; Kim v Uzbekistan, Decision on Jurisdiction (8 March 2017) paras 593–598; Krederi v Ukraine, Award (2 July 2018) para 385; Unión Fenosa v Egypt, Award (31 August 2018) para 7.48. 128 Niko Resources v Bangladesh, Decision on Jurisdiction (19 August 2013) para 434. 129 Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 493, 508. 130 Liman Caspian Oil v Kazakhstan, Award (22 June 2010) para 193.

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Mr. Broches explained that this kind of reasoning would not be warranted. Express reference to conflict rules in the first sentence would have been inappropriate precisely because the rules chosen by agreement need not be the rules of a national system. Therefore, it is arguable that the choice of a given national law does not necessarily exclude its conflict provisions.131 While a purely textual interpretation may leave the question open, an interpretation directed towards the parties’ intention strongly supports the view that an explicit choice of law only refers to the substantive rules of the chosen law, but not to the conflict rules contained therein. Unless the parties express a contrary intention, it must be assumed that, by their choice of law, they did not want to subject their transaction to the uncertainties of renvoi to another, as yet undetermined, system of law.132 In drafting a choice of law clause, it may be appropriate to clarify the question through an express reference to the substantive rules of the chosen law or an express exclusion or inclusion of its conflict rules (see para. 117 infra).

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7. Supervening Choice of Law The normal way to agree on a choice of law is a clause in the initial investment agreement between the host State and the investor (see paras. 45, 48–69 supra). If jurisdiction is based on the host State’s legislation or a treaty (see para. 47 supra), these may contain a provision on applicable law. These provisions and the acceptance of jurisdiction by the investor form an agreement on choice of law between the parties (see paras. 98, 116–126 infra). If there has been no choice of law by the parties, there is nothing to preclude a later agreement on applicable law.133 The institution of arbitration proceedings or the first session of the tribunal may be good opportunities to agree on the choice of law.134 The parties may also reach agreement at a later stage during the proceedings. ICSID tribunals have addressed the question of whether a choice of law may be made in the course of the proceedings on several occasions. In Gardella v Côte d’Ivoire, the Tribunal made a somewhat unclear statement on the parties’ pleadings, which leaves the question open whether the choice of law was made under the first or second sentence of Art. 42(1)135 (see para. 276 infra). In SOABI v Senegal, the finding on applicable law is equally unclear. After noting the absence of an agreement on applicable law, the Tribunal notes that it appears from the parties’ submissions to the Tribunal that they agreed that the applicable law was Senegalese law136 (see also paras. 203, 204 infra).

131 Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States’ (1972–II) 136 RdC 331, 390–391; Aron Broches, ‘Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965, Explanatory Notes and Survey of Its Application’ (1993) 18 YB Comm Arb 627, 668–669. 132 Branson and Wallace (n 112) 44–45; Goldman (n 1) 148–149; Hirsch (n 1) 130 ff. 133 Delaume, ‘Le Centre’ (n 68) 828–829; Delaume, Transnational Contracts (n 92) 66–67; Delaume, ‘How to’ (n 92) 186; Delaume, ‘L’affaire’ (n 43) 44 ff; Delaume (n 103) 19 ff; Goldman (n 1) 192; Hirsch (n 1) 123; Shihata and Parra (n 44) 201. 134 Bertrand P Marchais, ‘Setting up the Initial Procedural Framework in ICSID Arbitration’ (1988) 5(1) News from ICSID 9. 135 Gardella v Côte d’Ivoire, Award (29 August 1977) para 4.3. 136 SOABI v Senegal, Award (25 February 1988) para 5.02.

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In Benvenuti & Bonfant v Congo, the parties reached agreement in the course of the arbitration proceedings to authorize the Tribunal to rule ex aequo et bono,137 a power which was accepted by the Tribunal.138 While this agreement did not strictly relate to rules of law in the sense of Art. 42(1), first sentence, it may be inferred that such an agreement reached in the course of the proceedings would be equally acceptable. If the parties base jurisdiction on national legislation or on a treaty, and there is no rule on applicable law in the legislation or treaty, an agreement on applicable law may be reached after the institution of proceedings.139 In AAPL v Sri Lanka, the Claimants initiated the arbitration under the terms of the Sri Lanka–United Kingdom BIT of 1980. The BIT did not contain a provision on applicable law. The Tribunal opened its finding on applicable law with the following observation: 19. . . . the Parties in dispute have had no opportunity to exercise their right to choose in advance the applicable law determining the rules governing the various aspects of their eventual disputes. In more concrete terms, the prior choice-of-law referred to in the first part of Article 42 of the ICSID Convention could hardly be envisaged in the context of an arbitration case directly instituted in implementation of an international obligation undertaken between two States in favour of their respective nationals investing within the territory of the other Contracting State. 20. Under these special circumstances, the choice-of-law process would normally materialize after the emergence of the dispute, by observing and construing the conduct of the Parties throughout the arbitration proceedings.140

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The Tribunal proceeded to hold that the Parties had, by their conduct, demonstrated agreement to choose the Sri Lanka–United Kingdom BIT as the primary legal source and the relevant rules of international and Sri Lanka’s domestic law as a supplementary source.141 The conclusions drawn by the Tribunal from the parties’ behavior may be open to doubt and are discussed below (see paras. 106–115 infra) in the context of implicit choice. However, the basic assumption that the parties may agree on the law applicable to their dispute in the course of the arbitration proceedings appears sound and has not been cast into doubt.142

8. Indirect and Implicit Choice of Law 97

It is an open question whether a choice of law by the parties must be direct and explicit, or can be indirect and implicit, and whether a tribunal may infer it from the facts and circumstances of the relationship between the parties. This point was discussed in the course of the Convention’s drafting and appears to have been answered in

137 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.22. The suggestion was originally put forward by the Claimants at the Tribunal’s first session on 14–15 June 1978, but rejected by the Respondent (ibid para 1.6). An agreement to this effect was formally reached by the Parties on 5 June 1979 and communicated to the Tribunal (ibid para 1.22). 138 ibid paras 4.4, 4.65. See also para 338 infra. 139 Kahn (n 83) 7–8. 140 AAPL v Sri Lanka, Award (27 June 1990) paras 19, 20. 141 ibid para 22. 142 Georges R Delaume, ‘ICSID Tribunal Determines that Parties Could and Did Make a Valid Belated Choice of Law’ (1991) 6 News and Notes from the Institute for Transnational Arbitration 1, 2; Nassib G Ziadé, ‘Some Recent Decisions in ICSID Cases’ (1991) 6 ICSID Rev 514, 517.

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the latter sense (History, Vol. II, pp. 418, 570).143 On the other hand, assumption of a hypothetical agreement derived from the objective circumstances of a case, a method that is sometimes utilized in private international law, would not be in line with the meaning of Art. 42(1) and is likely to undermine the residual rule of its second sentence. The French version of the Convention, which uses the word ‘adoptées’ for ‘agreed’ in the English text, would suggest that the parties must have taken some positive action to justify the assumption of an agreed choice of law.144 Therefore, no conclusions as to applicable law may be drawn from the fact that the dispute has been submitted to international arbitration145 and certainly not from the place of proceedings determined under Arts. 62 and 63.146

a) Choice of Law by Reference to Domestic Legislation National investment laws providing for ICSID’s jurisdiction (see para. 47 supra) may contain a clause on applicable law.147 Acceptance by the investor of the offer to consent to jurisdiction would include the acceptance of the clause on applicable law leading to an agreed choice of law. However, explicit choice of law clauses of this kind are rare. The mere fact that jurisdiction is based on a provision of the host State’s law cannot be taken as a choice of the host State’s law. Nor can a jurisdictional provision relating to ICSID for disputes arising out of the interpretation and application of a national investment law necessarily be taken as a general choice of the host State’s legal system (see Art. 25, paras. 782, 956–963). Reference in a direct agreement between the parties to an item in the host State’s legislation is also not a reliable indication of an intention to choose the host State’s entire legal system. The Tribunal in LETCO v Liberia seemed to think otherwise. The Concession Agreement between the Parties stated, in its opening paragraph, that it was made under the General Business Law, Title 15 of the Liberian Code of Laws of 1956. The Tribunal concluded that ‘[t]his appears to indicate an express choice by the parties of the Law of Liberia as the law governing the Concession Agreement.’148 The parties in SPP v Egypt put forward a similar argument.149 This case concerned a tourism development project, which had been terminated by Egypt, ostensibly to protect undiscovered antiquities in the area. The preamble of the underlying contract, the ‘Heads of Agreement’ of 1974, referred to three items of Egyptian legislation stemming 143 See also Shihata and Parra (n 44) 190, fn 28. 144 Giardina (n 102) 217; Goldman (n 1) 142–143; Shihata and Parra (n 44) 190. 145 Derek W Bowett, ‘State Contracts with Aliens: Contemporary Developments on Compensation for Termination or Breach’ (1988) 59 BYBIL 49, 52; Delaume, ‘State Contracts’ (n 92) 798–799; Delaume (n 97) 88; Lalive (n 92) 339–340. 146 See the clearly erroneous decision of the District Court for the District of Columbia in MINE v Guinea, 505 F Supp 141 (1981) (1997) 4 ICSID Reports 3, in which the Court sought to base the applicability of US legislation on the alleged fact that ICSID arbitration could be expected to take place in the United States. See also Art. 26, paras 9–10. 147 The Madagascar Investment Code (1989) Art. 42, provides that, in the case of ICSID arbitration, only the law of Madagascar shall be applicable to the substance of the dispute. See Madagascar–Loi No 89026 Relative au Code des Investissements (1990) 5 ICSID Rev 142, 154. 148 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 358. See also para 284 infra. 149 SPP v Egypt, Award (20 May 1992). On this point, see esp W Laurence Craig, ‘The Final Chapter in the Pyramids Case: Discounting an ICSID Award for Annulment Risk’ (1993) 8 ICSID Rev 264; Delaume, ‘The Pyramids’ (n 43); Shihata and Parra (n 44) 201–202.

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from 1973 and 1974.150 Paradoxically, both parties were interested in the application of international law in addition to Egyptian law. Egypt relied on the 1972 UNESCO Convention for the Protection of the World Cultural and Natural Heritage. SPP relied on general international law relating to nationalization, expropriation, and the termination of foreign investment projects.151 Egypt argued that the reference to Egyptian legislation in the preamble of the 1974 agreement amounted to a choice of Egyptian law. This was corroborated by the fact that one of the items of legislation referred to, Law No. 43 of 1974, provided that ‘[m]atters not covered by this Law are subject to the applicable laws and regulations.’152 Therefore, the role of international law would be limited to those rules and principles incorporated in Egyptian law. This was the case for the 1972 UNESCO Convention.153 SPP denied that an agreement on choice of law in favor of Egyptian law existed and argued that the second sentence of Art. 42(1) would have to be applied, leading to the application of Egyptian law and of applicable rules of international law.154 The Tribunal refused to take a position on this question, holding that ‘[t]he Parties’ disagreement as to the manner in which Article 42 is to be applied has very little, if any, practical significance.’155 It proceeded to hold that under either solution Egyptian and international law would have to be applied and that the same sources of law would apply under the first and second sentences of Art. 42(1)156 (see also paras. 161–164 infra). Situations under which a particular agreement on choice of law would lead to the same result as the residual rule in the second sentence of Art. 42(1) are feasible and the situation in SPP v Egypt may have been just such a case. However, this should not lead to a dismissal of the distinction between the two situations envisaged in Art. 42(1). Despite the relevance of international law even where it is not part of the law chosen by the parties (see paras. 158–171 infra), its position is somewhat different and clearly stronger under the residual rule where there is no agreed choice of law (see paras. 273–322 infra). Moreover, whether or not the parties have agreed on a choice of law also affects the applicability of the conflict of laws rules of the host State’s law (see paras. 88–90 supra; paras. 224–229 infra). Therefore, the preferable method is the one advocated by Delaume under which a tribunal first has to determine whether an agreed choice of law does exist before proceeding either under the first or second sentence of Art. 42(1)157 (see para. 35 supra). In Autopista v Venezuela, a reference to specific parts of the host State’s legislation in a concession agreement between the investor and the host State was in issue. According to its preamble, the concession agreement was to ‘be governed by . . . [Decree] Law Nr. 138 . . . Executive Decree Nr. 502 . . . and the provisions of any other laws, regulations, or other documents as may be applicable.’158 In addition, Clause 5 of the

150 SPP v Egypt, Award (20 May 1992) para 44. 151 Craig (n 149) 273. 152 See also SPP v Egypt, Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 321 ff which rests its choice-of-law arguments primarily on this aspect. 153 SPP v Egypt, Award (20 May 1992) paras 76 ff. 154 ibid para 80. 155 ibid para 78. 156 ibid paras 80 ff. 157 Delaume, ‘The Pyramids’ (n 43) 241–242. 158 Autopista v Venezuela, Award (23 September 2003) para 94.

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concession agreement provided that it ‘shall be governed by [Decree Law 138]; [Executive Decree Nr. 502]; by the Clauses and Annexes [of the Concession Agreement]; by the terms set forth in the Bid submitted by [the investor]; and by the conditions set forth in the Bid Documents.’159 The parties disagreed whether these provisions led to the exclusive application of Venezuelan law. The Tribunal found that Clause 5 of the concession agreement led to a valid ‘partial choice of law’ in favor of the two mentioned Venezuelan decrees160 (see para. 71 supra). However, it found that the reference to specific texts of Venezuelan law did not necessarily amount to a general choice of Venezuelan law.161 The Tribunal recognized that such an ‘extension’ of the choice of law was accepted in LETCO v Liberia (see para. 99 supra). However, it found that the question whether this language constituted an implied choice of any other Venezuelan laws or regulations depended upon the interpretation of the terms ‘and the provisions of any other laws, regulations, or other documents as may be applicable.’162 According to the Tribunal, ‘the parties’ mutual intent to submit their contract to Venezuelan law exclusively’ could not be sufficiently established. The Tribunal stated:

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The parties could easily have adopted language showing their common intent to apply exclusively Venezuelan law, i.e., they could easily have expressed their agreement on a general choice of Venezuelan law in the Concession Agreement. Had they meant to provide for international law, they could also have expressed it. But they did not. Failing any indication on record demonstrating that, when agreeing on the Preamble’s wording the parties impliedly meant to provide for a general choice of Venezuelan law or for international law, the Tribunal comes to the conclusion that, except for the matters covered by Venezuelan Decree Law Nr. 138 and Executive Decree Nr. 502, it must look to the second sentence of Article 42(1).163

As a general proposition, it is not convincing to accept the recital of a provision of domestic law, or even of an entire piece of legislation, in an agreement as a general choice of the domestic law concerned. This pars pro toto argument is neither logical nor likely to be indicative of the intention of the parties. Such an argument is particularly unconvincing in the context of an arrangement, which allows the parties great latitude in combining, selecting, and excluding parts of different legal systems (see paras. 71–74 supra). Moreover, it is beyond doubt that certain aspects of the host State’s domestic law will almost inevitably be applicable to the parties’ relationship unless specifically excluded. Therefore, reference to specific aspects of the host State’s law may be seen as clarifying certain details concerning the application of that law, but cannot be taken as an implicit general choice of that law. This is not to say that genuine choice of law clauses may not contain reference to specific domestic legislation. Thus, the parties may agree that their contract should be governed by the investment code and other pertinent rules of law of the host State. But in the absence of such a general reference, the choice of a system of law in its entirety cannot be imputed to the parties.

159 ibid. 161 ibid para 97. 163 ibid para 100.

160 ibid para 96. 162 ibid para 98.

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b) Choice of Law through the Parties’ Pleadings 106

Another example of an implicit choice of law rests on the argument that by relying on certain sources of law in their pleadings before a tribunal, the parties have demonstrated agreement on the choice of these sources. In AAPL v Sri Lanka, the case was brought to ICSID arbitration under the terms of the Sri Lanka–United Kingdom BIT. The conduct of the Parties in the arbitration proceedings led the Tribunal to conclude that: both Parties acted in a manner that demonstrates their mutual agreement to consider the provisions of the Sri Lanka/UK Bilateral Investment Treaty as being the primary source of the applicable legal rules.164

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After establishing the BIT as the primary source of the applicable legal rules, the Tribunal proceeded to draw conclusions on a general choice of law: 22. In fact, the submissions of both Parties . . . clearly demonstrate that they are in agreement about admitting the supplementary role of the recourse – regarding certain issues – to general customary international law, other specific international rules rendered applicable in implementation of the most-favoured-nation clause, as well as to Sri Lankan domestic legal rules.165

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Having determined that the BIT had to be applied in the context of international law in general,166 the Tribunal used a most-favored-nation (MFN) clause in the BIT167 to apply principles of State responsibility under general international law.168 The Tribunal’s conclusion was that the Respondent Government’s responsibility had been established under international law.169 The Tribunal’s method of establishing the applicable law has been criticized severely,170 not least in the Dissenting Opinion attached to the Award,171 which points out that the Respondent had no choice, but to respond to the Claimant’s arguments based on the BIT. This did not necessarily imply a choice of law.172 In the absence of a published detailed record of the proceedings, it is impossible to form a definitive opinion as to whether the parties’ behavior did, in fact, demonstrate an agreement on international law as the applicable law. It appears that Sri Lankan law

164 165 166 167 169 170

AAPL v Sri Lanka, Award (27 June 1990) para 20. ibid para 22. See also Bosh v Ukraine, Award (25 October 2012) paras 110–113. AAPL v Sri Lanka, Award (27 June 1990) para 42. ibid para 66. 168 ibid para 78. ibid para 86. Derek Asiedu-Akrofi, ‘Asian Agricultural Products Limited (AAPL) v Republic of Sri Lanka’ (1992) 86 AJIL 371; A Rohan Perera and Noel Dias, ‘Asian Agricultural Products Ltd v The Republic of Sri Lanka’ (1991) 2 ARIA 216; Stephen C Vasciannie, ‘Bilateral Investment Treaties and Civil Strife: The AAPL/Sri Lanka Arbitration’ (1992) 39 Neth ILR 332; Muthucumaraswamy Sornarajah, ‘ICSID Involvement in Asian Foreign Investment Disputes: The Amco and AAPL Cases’ (1994) 4 Asian YBIL 69, 95 ff; Okezie Chukwumerije, ‘International Law and Municipal Law in ICSID Arbitration’ (1996) 1 Can J Int’l Bus L & Pol’y 61, 78 ff; George Elombi, ‘ICSID Awards and the Denial of Host State Law’ (1994) 11 J Int’l Arb 61, 65–66. But see Chittharanjan F Amerasinghe, ‘The Prawn Farm (AAPL) Arbitration’ (1992) 4 Sri Lanka JIL 155 (who supports the Tribunal’s conclusions on choice of law). 171 AAPL v Sri Lanka, Dissenting Opinion Asante (15 June 1990) (1997) 4 ICSID Reports 296. 172 ibid 310.

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was not fully pleaded during the arbitration proceedings,173 which would indicate a failure of the Respondent to insist on the applicability of its own law in accordance with the second sentence of Art. 42(1). Reliance on the BIT could hardly have justified the assumption of an agreement to adopt international law in general as the chosen law. Legal provisions invariably have to be interpreted in the broader context of the legal system to which they belong. This process is quite different from choice of law. Unlike in LETCO and SPP (see paras. 99–101 supra), in AAPL the acceptance by the Tribunal of an implicit agreement on choice of law was not immaterial. In AAPL v Sri Lanka, a different result concerning the applicable law would have been reached under the residual rule of Art. 42(1), second sentence. The assumption of an agreement in favor of the BIT and of international law in general effectively blocked the application of Sri Lankan law. An analysis of LETCO, SPP, and AAPL, in which the tribunals accepted an agreement on choice of law by implication, suggests that a stricter standard of proof for the existence of such an agreement should be adopted. In these cases, there was no unequivocal expression of an agreement. Aron Broches has expressed the opinion that an agreement under Art. 42(1) requires an affirmative choice and should be express.174 Ironically, in an article published in 1969, Berthold Goldman, one of the arbitrators in the majority in AAPL v Sri Lanka, concluded after a careful analysis of the modes of designation of the applicable law under the Convention that, while there was no ‘règle impérative de forme,’ the designation of an applicable law had to be perfectly clear.175 In other cases, tribunals relied on the submissions of parties merely as corroboration of their findings on applicable law. This was the case in the first Award in Amco v Indonesia. The Tribunal determined that, since the Parties had not expressed agreement as to rules of applicable law, Indonesian law, and such rules of international law as it deemed applicable, were to be applied (see para. 202 infra). The Tribunal found support for this finding in the fact that both parties had not only failed to deny the applicability of these two systems of law, but, had, in fact, constantly referred to both of them.176 In Wena Hotels v Egypt, the Tribunal found that, except for the BIT, there was no special agreement between the parties on the rules of law applicable to the dispute. But the

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pleadings of both parties indicate[d] that, aside from the provisions of the [BIT], the Tribunal should apply both Egyptian law (i.e. ‘the law of the Contracting State party to the dispute’) and ‘such rules of international law as may be applicable.’177

In Enron v Argentina, the Tribunal also relied on the parties’ submissions in order to corroborate its finding that it should apply both host State law and international law.178 173 AAPL v Sri Lanka, Award (27 June 1990) para 71; ibid, Dissenting Opinion Asante (15 June 1990) (1997) 4 ICSID Reports 296, 299. See, however, ibid, Award (27 June 1990) paras 36 ff. 174 Broches, ‘The Convention’ (n 131) 389; Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 667. See also Kahn (n 83) 8–9; Shihata and Parra (n 44) 190. 175 Goldman (n 1) 144. 176 Amco v Indonesia, Award (20 November 1984) para 148. It is possible that the somewhat contradictory finding of the Tribunal in SOABI v Senegal, Award (25 February 1988) (see para 93 supra and paras 203, 204 infra), has to be interpreted in this sense. For a more detailed analysis, see Ziadé (n 142) 514 ff. 177 Wena Hotels v Egypt, Award (8 December 2000) para 79. 178 Enron v Argentina, Award (22 May 2007) para 209.

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The Tribunal noted that the parties had ‘relied on many . . . rules of the Argentine legal system, including the Constitution, the Civil Code, specialized legislation and the decisions of courts’179 and that ‘international conventions [had] been invoked by the parties, as they [had] also discussed the meaning of customary international law.’180

c) Reliance on a Clause on Applicable Law in a Treaty 116

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Some treaties providing for ICSID arbitration (Art. 25, paras. 825–874) offer their own rules on applicable law. Acceptance by the investor of an offer to consent to jurisdiction includes the acceptance of the clause on applicable law in the treaty leading to an agreed choice of law. Such an acceptance may be expressed simply by instituting proceedings.181 A number of BITs contain choice of law clauses.182 Most of these clauses incorporate references to the BIT itself, other treaties, the law of the State party to the dispute, including its rules on the conflict of laws, and the rules and principles of international law.183 Some BITs add a reference to agreements relating to the particular investment. For instance, Art. 10(7) of the Argentina–Netherlands BIT of 1992, after providing for ICSID arbitration, provides: The arbitration tribunal addressed in accordance with paragraph (5) of this Article shall decide on the basis of the law of the Contracting Party which is a party to the dispute (including its rules on the conflict of law), the provisions of the present Agreement, special Agreements concluded in relation to the investment concerned as well as such rules of international law as may be applicable.184

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An increasing number of treaties contain clauses on applicable law prescribing different applicable laws depending on the claimant’s cause of action: (1) where a claim is based on the alleged violation of a treaty obligation, the applicable law consists of the treaty and applicable international law; (2) where a claim is based on the alleged violation of an investment authorization or an investment contract, the applicable law is specified by the relevant authorization or contract; in case of absence of such a specification, a tribunal shall apply the law of the respondent State complemented by applicable rules of international law.185 179 ibid para 206. 180 ibid para 207. See also Tulip v Turkey, Award (10 March 2014) para 171. 181 Emmanuel Gaillard, ‘The Extent of Review of the Applicable Law in Investment Treaty Arbitration’ in Emmanuel Gaillard and Yas Banifatemi (eds), Annulment of ICSID Awards (Stämpfli 2004) 190, 193–194; Wolfgang Kühn and Ulrike Wiegel, ‘The Application of International Law and Treaty Provisions by Arbitrators’ (2003) 4 JWIT 451, 471; Begic (n 43) 25. 182 Antonio R Parra, ‘Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment’ (1997) 12 ICSID Rev 287, 332; Paul Peters, ‘Dispute Settlement Arrangements in Investment Treaties’ (1991) 22 Neth YBIL 91, 147–148; Ibrahim FI Shihata and Antonio R Parra, ‘The Experience of the International Centre for Settlement of Investment Disputes’ (1999) 14 ICSID Rev 299, 336; Atanasova (n 67) 407 ff. 183 See eg US Model BIT (2012) Art. 30. 184 Many BITs, especially of Latin American countries, contain similar clauses. See Fedax v Venezuela, Award (9 March 1998) para 30. 185 Morocco–United States FTA (signed 15 June 2004, entered into force 1 January 2006) Art. 10.21. See also eg United States–Uruguay BIT (signed 4 November 2005, entered into force 31 October 2006) Art. 30; Japan–Switzerland FTA (signed 19 February 2009, entered into force 1 September 2009)

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Tribunals have held that treaty clauses on applicable law were the basis for an agreement on the choice of law between the host State and the investor. The Tribunal in Goetz v Burundi, applying the BIT between Belgium and Burundi, held:

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Without doubt the determination of the applicable law is not, in its true sense, made by the parties to the present dispute (Burundi and the claimant investors) but by the parties to the investment treaty (Burundi and Belgium). As that was a case for the parties’ consent, the Tribunal considers however that the Republic of Burundi decided in favour of the applicable law as it is determined in the already cited provision of the Belgium–Burundi investment treaty in becoming a party to this treaty and that the claimant investors have effected a similar choice in lodging their claim for arbitration based on the said treaty. If this is not the first time, as we have noted, that the jurisdiction of the centre results directly from a bilateral treaty for the protection of investments, and not from a distinct agreement between the host State and the investor, it is one of the first times, it seems, that an ICSID Tribunal is called to apply the law as directly determined by such a treaty.186

In Middle East Cement v Egypt, the Tribunal also found that a choice of law provision contained in a BIT determined the applicable law. Art. 11 of the Egypt– Greece BIT provided that, ‘in addition to the rules of the BIT, obligations for a more favorable treatment stemming from the national law of the Contracting Parties or existing under international law between the Contracting Parties [should] prevail.’187 The Tribunal held that Art. 11 of the BIT was the basis for an agreement on applicable law in the sense of the first sentence of Art. 42. Since the Tribunal found that there were no additional obligations for more favorable treatment, it concluded that it could only consider and accept claims under the Egypt–Greece BIT.188 In Siemens v Argentina, the applicable BIT provided that a tribunal established under the Treaty should decide on

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the basis of this Treaty, and, as the case may be, on the basis of other treaties in force between the Contracting Parties, the internal law of the Contracting Party in whose territory the investment was made, including its rules of private international law, and on the general principles of international law.189

In the Tribunal’s view, this choice of law provision in the BIT led to an agreement by the parties pursuant to Art. 42(1), first sentence, of the ICSID Convention. The Tribunal held: By accepting the offer of Argentina to arbitrate disputes related to investments, Siemens agreed that this should be the law to be applied by the Tribunal. This constitutes an agreement for purposes of the law to be applied under Article 42(1) of the Convention.190

186 187 188 189 190

Art. 94.8; Nicaragua–Taiwan FTA (signed 23 June 2006, entered into force 1 January 2008) Art. 10.22; Australia–Korea FTA (signed 8 April 2014, entered into force 12 December 2014) Art. 11.22; Japan– Uruguay BIT (signed 26 January 2015, entered into force 14 April 2017) Art. 14. Goetz v Burundi, Award (10 February 1999) para 94 (footnote omitted). Middle East Cement v Egypt, Award (12 April 2002) para 86. ibid para 87. Argentina–Germany BIT (signed 9 April 1991, entered into force 8 November 1993) Art. 10(5). Siemens v Argentina, Award (6 February 2007) para 76. See also eg Suez and Vivendi v Argentina, Decision on Liability (30 July 2010) paras 59–63; EDF v Argentina, Award (11 June 2012) para 181; Gold Reserve v Venezuela (AF), Award (22 September 2014) para 533; Rusoro Mining v Venezuela (AF), Award (22 August 2016) paras 347–349.

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Multilateral treaties by which the Contracting States offer consent to ICSID arbitration to investors from other Contracting States (see Art. 25, paras. 863–874) invariably contain clauses on applicable law.191 These clauses are similarly transformed into agreements on the choice of law between the host State and the investor upon the acceptance by the investor of the offer of consent to jurisdiction. The NAFTA in its Chapter 11, Section B, dealing with the settlement of investment disputes, contains the following provision: Article 1131: Governing Law 1. A Tribunal established under this Section shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.192

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The ECT provides similarly in its Art. 26(6): A tribunal established under paragraph (4) shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law.193

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In Kardassopoulos v Georgia, the Claimant relied on the ECT, as well as on the BIT between Greece and Georgia. The latter contained a clause on applicable law very similar to Art. 26(6) of the ECT. The Tribunal after quoting these provisions said: whatever may be the determination of a municipal court applying Georgian law to the dispute, this Tribunal can only decide the issues in dispute in accordance with the applicable rules and principles of international law.194

d) Reliance on a Treaty as a Choice of International Law 127

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Although many BITs contain choice of law clauses,195 a large number of BITs do not provide for any express choice of law.196 Strictly speaking, this should lead to the application of the default rule of Art. 42(1), second sentence (‘In the absence of such agreement, . . .’). However, there is some disagreement on how to proceed in the absence of an applicable law clause in an investment treaty. In the literature, one school of thought considers that absent a choice of law clause in the treaty the second sentence of Art. 42 becomes applicable and a tribunal will have to apply international and national law. An implicit choice of law will only have been made if the treaty contains an applicable law clause which the investor accepts when

191 Parra (n 182) 347. 192 North American Free Trade Agreement (NAFTA) (signed 17 December 1992, entered into force 1 January 2014, terminated 1 July 2020) (1993) 32 ILM 605, 645. See also United States–Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020) Art. 14.D.9. See also Cheri D Eklund, ‘A Primer on the Arbitration of NAFTA Chapter Eleven Investor–State Disputes’ (1994) 11 J Int’l Arb 135, 146; Geneviève Bastid-Burdeau, ‘Nouvelles perspectives pour l’arbitrage dans le contentieux économique intéressant les états’ (1995) 1 Revue de l’arbitrage 3, 25–26. 193 Energy Charter Treaty (ECT) (signed 17 December1994, entered into force 16 April 1998) (1995) 34 ILM 373, 400. See also Thomas W Wälde, ‘International Investment under the 1994 Energy Charter Treaty – Legal, Negotiating and Policy Implications for International Investors within Western and Commonwealth of Independent States/Eastern European Countries’ (1995) 29 JWT 5, 60 ff. 194 Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 146. See also ESPF v Italy, Award (14 September 2020) paras 401, 402. 195 See paras 117–123 supra. 196 Gaillard (n 181) 194.

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perfecting consent to arbitrate.197 The other school of thought deems that even without an explicit provision on the applicable law in the treaty, the parties would have implicitly agreed on the treaty and international law as the applicable law since the treaty is part of international law and has to be interpreted in accordance with international law.198 Some ICSID tribunals have treated cases of treaty claims brought on the basis of BITs as involving an implicit choice of international law. In investment treaty arbitration, claimants regularly assert violations of the substantive treatment standards contained in the applicable investment instrument. In the absence of any express choice of law provisions, reliance on the substantive provisions of these treaties would amount to a choice of international law. In MTD v Chile,199 the Tribunal had to determine the applicable law in a dispute brought under the Chile–Malaysia BIT, which did not contain a choice of law. The Tribunal rejected the Respondent’s argument that the ICSID Convention required – in the absence of agreement between the parties – the application of Chilean legislation. The Tribunal ‘limit[ed] itself to note that, for purposes of Article 42(1) of the Convention, the parties [had] agreed to this arbitration under the BIT. This instrument being a treaty, the agreement to arbitrate under the BIT require[d] the Tribunal to apply international law.’200 The Tribunal subsequently reaffirmed this reasoning when it asserted that ‘[t]his being a Tribunal established under the BIT, it [was] obliged to apply the provisions of the BIT.’201 For the Tribunal, it followed that domestic law was secondary: ‘The breach of an international obligation will need, by definition, to be judged in terms of international law. To establish the facts of the breach, it may be necessary to take into account municipal law.’202 In ADC v Hungary, the BIT did not contain a choice of law clause.203 The Tribunal found that consent to arbitration under the BIT implied a choice of the BIT as the applicable law. This, in turn, implied a choice of international law in general. The Tribunal said: In the Tribunal’s view, by consenting to arbitration under Article 7 of the BIT . . . the Parties also consented to the applicability of the provisions of the Treaty . . . Those provisions are Treaty provisions pertaining to international law. That consent falls under the first sentence of Article 42(1) of the ICSID Convention (‘The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties’). The consent must also be deemed to comprise a choice for general international law,

197 See eg Sasson (n 36) 69; Jan Asmus Bischoff, ‘Conflict of Laws and International Investment Arbitration’ (2018) 7 Eur Int’l Arb Rev 161. 198 W Michael Reisman and Mahnoush H Arsanjani, ‘Applicable Law under the ICSID Convention: The Tortured History of the Interpretation of Article 42’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer Law International 2015) 10; Andrea K Bjorklund and Lukas Vanhonnaeker, ‘Article 42’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulation and Rules: A Practical Commentary (Edward Elgar 2019) 354. 199 MTD v Chile, Award (25 May 2004). 200 ibid para 87. 201 ibid para 112. 202 ibid para 204. 203 Somewhat confusingly, the Tribunal quoted the choice of law clause from the BIT’s provision on interState arbitration; see ADC v Hungary, Award (2 October 2006) para 290.

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schreuer’s commentary on the icsid convention including customary international law, if and to the extent that it comes into play for interpreting and applying the provisions of the Treaty.204

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The BIT applied in Azurix v Argentina did not contain an applicable law clause. The ad hoc Committee did not believe the Tribunal was obliged to apply Argentine law by virtue of the second sentence of Art. 42(1). It decided that the second sentence ‘cannot possibly be understood as having the effect that, in the absence of an express choice of law clause, the municipal law of the Contracting State will be the applicable law in claims for alleged breaches of an investment treaty.’205 It said: By definition, a treaty is governed by international law, and not by municipal law. . . . Bearing in mind that an investment treaty . . . is itself a source of international law as between the State parties to that treaty, the applicable law in any claim for a breach of that treaty can thus be said to be the treaty itself specifically, and international law generally.206

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In Alpha Projektholding v Ukraine, the Tribunal noted that the applicable BIT did not contain ‘any express guidance on the governing law.’207 Rather than deciding that in such a situation the second sentence of Art. 42(1) applies, it held that the BIT and international law were applicable and that if pertinent national law will be treated as a fact. It found that: [T]he question of whether the UABIT [i.e., the Agreement for the Promotion and Reciprocal Protection of Investments between the Republic of Austria and Ukraine] has been breached can only be answered by reference to the UABIT’s own terms. The Tribunal will apply the provisions of the UABIT and interpret the UABIT in a manner consistent with customary international law. In addition, where Ukrainian law defines the parties’ rights and obligations under the various contracts, such questions will be decided as questions of fact.208

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In Addiko v Croatia,209 the Tribunal explained that an investor implicitly consents to the applicable law in case of investment treaty arbitration. It believed that the acceptance of the offer to arbitrate would also implicitly bring about a choice of the treaty and international law as applicable law, even in the absence of an explicit choice of law clause. It said: [T]he Tribunal believes that by accepting an offer to arbitrate contained in an investment treaty that does not contain an express applicable law clause, but which nonetheless is implicitly governed by its own terms and by international law under VCLT Article 2(1)(a), an investor thereby agrees to such applicable law for the proceedings. In these circumstances, there generally will be no need to proceed to the second sentence of Article 42(1) of the ICSID Convention, which supplies a default applicable law ‘[i]n the absence of [an] agreement’ between the disputing parties. . . . in the context of

204 ibid. 205 Azurix v Argentina, Decision on Annulment (1 September 2009) para 147 (footnote omitted; emphasis added). 206 ibid para 146 (internal reference omitted). 207 Alpha Projektholding v Ukraine, Award (8 November 2010) para 228. 208 ibid para 233. 209 Addiko v Croatia, Decision on Jurisdiction (12 June 2020).

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treaty-based arbitration, it is difficult to imagine a treaty which does not reflect at least an implicit agreement on applicable law, based on the treaty’s terms and general principles of international law. This is particularly so since investment treaties incorporate by mutual agreement among Contracting States certain substantive standards of behavior – essentially, ‘thou shalt do x’ and ‘thou shalt not do y’ – which themselves were developed in the context of international law (expropriation, fair and equitable treatment, etc.). The Tribunal agrees with Addiko that these standards form a lex specialis that the Contracting States agree to govern their respective relationships with each other’s investors, and which the investors in turn accept to govern any disputes alleging non-compliance with those standards.210

In a weightier group of cases, the tribunals did not accept an implicit choice of law through the reliance on a BIT that does not contain an applicable law clause. LG&E v Argentina discussed the concept of an implicit choice of international law through the invocation of a BIT, but did not adopt it. The Tribunal reasoned as follows:

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It is to be noted that the Argentine Republic is a signatory party to the Bilateral Investment Treaty, which may be regarded as a tacit submission to its provisions in the event of a dispute related to foreign investments. In turn, LG&E grounds its claim on the provisions of the Treaty, thus presumably choosing the Treaty and the general international law as the applicable law for this dispute. Nevertheless, these elements do not suffice to say that there is an implicit agreement by the Parties as to the applicable law, a decision requiring more decisive actions. Consequently, the dispute shall be settled in accordance with the second part of Article 42(1).211

Although the Tribunal continued to address the issue of the applicable law under the second sentence of Art. 42(1) (see paras. 272, 297, 312 infra), its solution came very close to the concept of an implicit choice of international law. The LG&E tribunal cited the view ‘that when submitting the settlement of a dispute to an Arbitral Tribunal acting within the framework of an international agreement, like ICSID, the dispute falls under public international law; thus its rules are to be applied.’212 Finally, the Tribunal concluded that it would first apply the BIT, second, ‘in the absence of explicit provisions therein, general international law, and, third, the Argentine domestic law.’213 In MCI v Ecuador, the Claimants contended that the BIT included an implicit choice of law pointing to the BIT and international law as the applicable law in accordance with Art. 42(1) first sentence.214 The Respondent argued that the domestic law of Ecuador would be the applicable law because that would be the law agreed to by the parties for dealing with alleged default under the contract.215 The Tribunal decided that it could not find any evidence of an agreement on applicable law in the underlying dispute. It rejected the argument that there was an implicit choice of law and applied the provisions of the second sentence of Art. 42(1) of the ICSID Convention:

210 ibid para 260 (international references omitted). The Tribunal relied on ADC v Hungary, Award (2 October 2006) paras 290, 291; Azurix v Argentina, Decision on Annulment (1 September 2009) paras 132, 141, 146, 147, 149, 151; Alpha Projektholding v Ukraine, Award (8 November 2010) para 228. 211 LG&E v Argentina, Decision on Liability (3 October 2006) para 85 (footnote omitted). 212 ibid para 93. 213 ibid para 99. 214 MCI v Ecuador, Award (31 July 2007) para 214. 215 ibid para 215.

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schreuer’s commentary on the icsid convention From the supporting documentation supplied by the parties during the proceedings, the Tribunal finds no evidence of any agreement on the law applicable to this dispute. Therefore, the Tribunal considers that it must respect the provisions of the second part of Article 42(1) of the ICSID Convention, i.e., in the absence of an agreement, the Tribunal shall apply Ecuadorian law, including its rules of private international law and such rules of international law as may be applicable. With respect to the latter rules, the Tribunal finds that the rules contained in the BIT, as well as the other pertinent rules of general international law, are applicable in the present case.216

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In UAB v Latvia, the Tribunal referred to an implicit choice of international and host State law when the investor accepted an offer to arbitrate in a BIT. It stated: In the Tribunal’s view, acceptance of the offer to arbitrate in Article 7 of the BIT establishes an implicit agreement that the applicable law consists primarily of the standards of protection contained in the BIT, but that recourse may be had to general international law as well as to the domestic law of Latvia.217

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The Tribunal in Perenco v Ecuador218 also adopted the approach that in the absence of an explicit choice of law it had to apply Art. 42(1), second sentence of the ICSID Convention. It decided, therefore, that it had to apply Ecuadorian Law and the BIT and that in case of a conflict international law would prevail. It stated: 532. The Tribunal observes that, unlike the Participation Contracts, which specify Ecuadorian law as the applicable law, the Treaty does not contain an express applicable law clause. Accordingly, the Tribunal must apply Article 42(1), second sentence, of the ICSID Convention, which provides as follows: . . . 533. This requires the Tribunal to apply Ecuadorian law and international law. It is well-established that the Treaty itself, as conventional law, falls within the phrase ‘such rules of international law as may be applicable.’ The Report of the Executive Directors on the Convention noted in this regard that the term ‘international law’ as used in Article 42(1), second sentence, ‘should be understood in the sense given to it by Article 38(1) of the Statute of the International Court of Justice, allowance being made for the fact that Article 38 was designed to apply to inter State disputes.’ A bilateral investment treaty falls within Article 38’s description of international law. 534. The Tribunal therefore finds that the applicable law for the purposes of this claim is Ecuadorian law (as already considered by the Tribunal) and the Treaty. In the event that there is a conflict between the two, on the basis of well-established principle recognised in international judicial and arbitral case law as well as in Article 27 of the Vienna Convention on the Law of Treaties and Article 3 of the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts, international law prevails.219

216 ibid para 217. 217 UAB v Latvia, Award (22 December 2017) para 792. See also Metal-Tech v Uzbekistan, Award (4 October 2013) para 119. 218 Perenco v Ecuador, Decision on Remaining Issues of Jurisdiction and on Liability (12 September 2014). 219 ibid paras 532–534 (internal reference omitted).

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The Tribunal in Quiborax v Bolivia220 also had recourse to the rule contained in the second sentence of Art. 42(1) of the ICSID Convention in a dispute based on a BIT without an explicit choice of law. It decided that, since the ICSID Convention did not allocate matters to either law, it had to determine whether an issue is subject to national or international law.221 In the absence of a reference in the BIT, the Tribunal in Gosling and others v Mauritius applied the provisions of the BIT as well as domestic law on certain issues:

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Given the nature of the claims that the Respondent breached its obligations under the BIT the Tribunal shall apply the provisions of the BIT and interpret them in accordance to the rules of interpretation set forth in Article 31 of the Vienna Convention on the Law of the Treaties. This notwithstanding, there are matters underlying the claims such as conditions to acquire land in Mauritius or to its development to which Mauritian law applies.222

The Tribunal in Magyar Farming v Hungary, in reliance on ICSID case law, rejected the Claimant’s assertion that, since the claims were based on the BIT and in the absence of an explicit choice of law, only international law would apply to the merits:

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ICSID jurisprudence supports the approach that, when the disputing parties have made no express choice-of-law, such choice cannot be implied from the mere fact that the claims arise under an international treaty. . . . Therefore, in the absence of a choice-oflaw provision in the BIT, or elsewhere for that matter, the default rule of the second sentence of Article 42(1) of the ICSID Convention applies.223

e) Treaty as a Choice of General International Law Irrespective of any express choice of law provisions, it is generally accepted that the substantive provisions of the treaties that contain the host States’ consent are applicable to the dispute. Whether such an implicit choice of law also encompasses other rules of international law is less clear. It has been suggested that ‘[t]he treaty being an instrument of international law, it is . . . also implicit in such cases that the arbitrators should have recourse to the rules of general international law to supplement those of the treaty.’224 As mentioned (see para. 106 supra), the Tribunal in AAPL v Sri Lanka established that the BIT was the primary source of the applicable legal rules. From there, the Tribunal drew the conclusion that international law in general was also applicable to the case:

220 221 222 223

Quiborax v Bolivia, Award (16 September 2015). ibid paras 90–91. Gosling and others v Mauritius, Award (18 February 2020) para 88. Magyar Farming v Hungary, Award (13 November 2019) paras 25, 26 (referring to Perenco v Ecuador, Decision on Remaining Issues of Jurisdiction and on Liability (12 September 2014) paras 532–533, where the Tribunal applied the second sentence of Art. 42(1) ICSID Convention, and Burlington v Ecuador, Decision on Liability (14 December 2012) para 178). 224 Antonio R Parra, ‘Applicable Substantive Law in ICSID Arbitrations Initiated under Investment Treaties’ (2001) 16 ICSID Rev 20, 21. See also Giorgio Sacerdoti, ‘Investment Arbitration under ICSID and UNCITRAL Rules: Prerequisites, Applicable Law, Review of Awards’ (2004) 19 ICSID Rev 1, 24 (who reasons that ‘in case of arbitration on the basis of a BIT, international law, in primis the very BIT provisions and the standards of treatment and protection they refer to, have to be applied, including when the BIT does not contain any indication as to the applicable law’).

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schreuer’s commentary on the icsid convention the Bilateral Investment Treaty is not a self-contained closed legal system limited to provide for substantive material rules of direct applicability, but it has to be envisaged within a wider juridical context in which rules from other sources are integrated through implied incorporation methods, or by direct reference to certain supplementary rules, whether of international law character or of domestic law nature . . .225

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This approach was also endorsed in Middle East Cement v Egypt, where the Tribunal applied a provision in a BIT which provided that, ‘in addition to the rules of the BIT, obligations for a more favourable treatment stemming from the national law of the Contracting Parties or existing under international law between the Contracting Parties [should] prevail.’226 The Tribunal stated: both according to the 1st sentence of Art. 42(1) as the rules of law chosen by the Parties in Art. 11 of the BIT and according to the 2nd sentence of Art. 42(1) of the ICSID Convention as ‘rules of international law as may be applicable,’ the reference to and application of the BIT implies that the Tribunal may have recourse to the rules of general international law to supplement those of the BIT.227

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In MTD v Chile, the Tribunal stated that since the parties had agreed to the arbitration under a BIT the agreement to arbitrate under the BIT required the Tribunal to apply international law.228 It asserted that it was obliged to apply the provisions of the BIT229 and that ‘[t]he breach of an international obligation will need, by definition, to be judged in terms of international law.’230 In CSOB v Slovakia, the claim was based on a ‘Consolidation Agreement’ (CA), which provided: ‘This agreement shall be governed by the laws of the Czech Republic and the [BIT].’231 The Tribunal found that international law had to be applied to the extent necessary for the BIT’s interpretation: Even to the extent the CA is not governed by international law as such, the BIT, as it is incorporated into the CA, has to be interpreted in the context of the legal system under which it has been drafted. Consequently, the incorporation of the BIT includes the rules of international law that are relevant for its interpretation.232

9. The Applicability of International Law a) International Law as the Chosen Law 148

There is no doubt that a choice of international law by the parties either in conjunction with a national law or on its own is valid and has to be respected by a tribunal (see paras. 63–68 supra). The most common agreement of this kind, a combined choice of the law of the host State and of international law (see paras. 116–123 supra), would produce a result similar to the residual rule of Art. 42(1), second sentence. But an exclusive reference to international law, such as in the NAFTA and in the ECT (see paras. 124–126 supra), is also possible.

225 226 227 229 231 232

AAPL v Sri Lanka, Award (27 June 1990) para 22. Middle East Cement v Egypt, Award (12 April 2002) para 86. ibid para 87. 228 MTD v Chile, Award (25 May 2004) para 87. ibid para 112. 230 ibid para 204. CSOB v Slovakia, Award (29 December 2004) para 61. ibid para 63.

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In AGIP v Congo, the parties had agreed on the application of Congolese law supplemented by the principles of international law (see para. 64 supra). After establishing that the Congolese ordinance, which had nationalized the Claimant’s property, was in breach of Congolese law, the Tribunal turned to international law:

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80. These observations, with respect to Congolese Law, do not, however, exempt the Tribunal from examining the acts of nationalization from the point of view of international law. . . . 82. In the present case, it must be recalled, that according to Article 15 of the Agreement, Congolese law can be ‘supplemented’ when the occasion arises by principles of international law. 83. It has been maintained by AGIP that the qualification of ‘supplemented’ must be interpreted as implying the subordination of Congolese law to international law. Whatever the merits of this argument it suffices for the Tribunal to note that the use of the word ‘supplemented’ signifies at the very least that recourse to principles of international law can be made either to fill a lacuna in Congolese law, or to make any necessary additions to it.233

The Tribunal proceeded to look at the compatibility of the nationalization with international law in the light of a stabilization clause. It pointed out that it was using the principles of international law to ‘complete’ Congolese law. On this basis, it reached the result that the nationalization was irregular in nature and led to an obligation to compensate the Claimant234 (see further para. 176 infra). The Tribunal’s use of the words ‘supplement,’ ‘addition,’ and ‘complete’ in describing the relationship of international law to the host State’s law is not very precise.235 Nevertheless, the circumstances of the case permit the conclusion that the claim would have been upheld, even if the host State’s actions had been found legal under Congolese law (see also para. 291 infra). In AAPL v Sri Lanka, the Tribunal reached the conclusion that the parties had, by their conduct in the arbitration proceedings, made an implicit choice of law in favor of the Sri Lanka–United Kingdom BIT and hence of international law in general (see paras. 106–110 supra). Although reference was made to the admissibility of recourse to Sri Lankan domestic legal rules236 (see para. 107 supra), the decision is, in fact, completely dominated by considerations of international law. Similarly, Tribunals that found that reliance on a BIT implied a general choice of international law (see paras. 130, 143–147 supra) concentrated on the application of the BIT as interpreted in the light of international law. The Tribunal in Emmis v Hungary, relying on Art. 31(3)(c) of the Vienna Convention on the Law of Treaties,237 found that, where international law is the applicable law, it includes all its sources:

233 234 235 236 237

AGIP v Congo, Award (30 November 1979) paras 80–83. ibid para 88. Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 671 ff. AAPL v Sri Lanka, Award (27 June 1990) para 22. Vienna Convention on the Law of Treaties (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331 (VCLT) Art. 31(3)(c) (‘There shall be taken into account, together with the context: . . . (c) any relevant rules of international law applicable in the relations between the parties’).

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schreuer’s commentary on the icsid convention True it is that the choice of law rule in Article 42(1) of the ICSID Convention includes reference to ‘such rules of international law as may be applicable.’ This means that the Tribunal has to apply international law as a whole to the claim, and not the provisions of the BIT in isolation. It must in any event construe the applicable primary rules in the Treaties by reference to other relevant rules of international law applicable in the relations between the parties.238

b) International Law as Part of Domestic Law 153

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International law is frequently incorporated into domestic law through a variety of techniques.239 To the extent that it thereby becomes applicable internally, it may be seen as part of a system of domestic law chosen by the parties and may be relied upon before an ICSID tribunal (see para. 269 infra).240 In Gardella v Côte d’Ivoire241 (see para. 92 supra; para. 276 infra) and LETCO v Liberia242 (see para. 99 supra; para. 284 infra), the respective Tribunals found the law of the host State to be applicable. In response to arguments for the Claimants that international law should be applied as well, the Tribunals pointed out that no divergence existed between the chosen domestic law and international law, since the former was in full accord with the latter (see also para. 160 infra). The ad hoc Committee in the annulment proceedings of Wena Hotels v Egypt noted that, under the Egyptian Constitution, treaties that had been ratified and published had the force of law. It further noted that a number of important domestic laws contained a ‘without prejudice clause’ in favor of the relevant treaty provisions. According to the ad hoc Committee, ‘[t]his amount[ed] to a kind of renvoi to international law by the very law of the host State.’243 It further held ‘that when a tribunal applies the law embodied in a treaty to which Egypt is a party it is not applying rules alien to the domestic legal system of this country.’244 In a series of decisions relating to Argentina, ICSID tribunals similarly noted that, according to the Argentine Constitution, treaties are the supreme law of the nation, and have primacy over domestic laws.245 238 Emmis v Hungary, Decision under Rule 41(5) (11 March 2013) para 78 (emphasis in the original) (relying on MTD v Chile, Decision on Annulment (21 March 2007) paras 61 ff ). 239 Robert Jennings and Arthur Watts (eds), Oppenheim’s International Law vol 1 (9th edn, OUP 2008) 54 ff. 240 Broches, ‘The Convention’ (n 131) 389; Delaume (n 97) 89. The disputing States in SPP v Egypt, Award (20 May 1992) (see para 100 supra), and in AAPL v Sri Lanka, Award (27 June 1990) (1997) 4 ICSID Reports 245, 257, referred to certain treaties as part of their own domestic law. However, in neither case did the Tribunal accept the host State’s law as the law chosen by agreement. In WalAm Energy v Kenya, Award (10 July 2020) para 348, the Tribunal pointed out that customary international law could be relevant insofar as it was incorporated into Kenyan law. In Interocean Oil v Nigeria, Award (6 October 2020) para 165, the Tribunal stated that customary international law had become part of Nigerian law and was thus applicable in the case. 241 Gardella v Côte d’Ivoire, Award (29 August 1977) para 4.3. 242 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346. 243 Wena Hotels v Egypt, Decision on Annulment (5 February 2002) para 42. 244 ibid para 44. 245 CMS v Argentina, Award (12 May 2005) paras 119, 120; Azurix v Argentina, Award (14 July 2006) para 65; LG&E v Argentina, Decision on Liability (3 October 2006) paras 90, 91; Siemens v Argentina, Award (6 February 2007) para 79; Enron v Argentina, Award (22 May 2007) para 208; Sempra v Argentina, Award (28 September 2007) paras 237, 238; Mobil v Argentina, Decision on Jurisdiction and Liability (10 April 2013) para 315.

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Still, it would not be wise to rely on the incorporation of international law into domestic law at the expense of a clause specifically providing for the application of international law. The status of international law under domestic constitutions varies greatly. Some constitutions do not provide for an automatic application of certain parts of international law, but require specific incorporation by legislation. Even where there are constitutional provisions to this effect, their import is often uncertain. Subsequent domestic enactments may take precedence over treaties or customary international law or both. Certain parts of international law may be regarded as non-self-executing, or may be defeated by other doctrines, such as Act of State or Political Question. Finally, even constitutional provisions mandating the application of international law may be amended or defeated by other constitutional provisions authorizing or directing action that is contrary to international law. An investor seeking protection in international law must be advised not to put its faith in references to international law in the law of the host State, but to insist either on its explicit inclusion in a choice of law clause or on the application of the second sentence of Art. 42(1).246 In Roussalis v Romania, the Parties agreed that Romanian law governed the merits of the case and that the BIT was applicable as part of domestic law.247

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c) International Law in the Absence of Its Choice The question remains whether international law will be taken into account by an ICSID tribunal where it is not included in the formula on choice of law agreed to by the parties. At first sight, a negative reply would be indicated by the juxtaposition of the first and second sentences of Art. 42(1). Whereas the second sentence includes a reference to applicable rules of international law, the first sentence does not. Mr. Broches has explained this omission as a matter of drafting technique. The first sentence speaks of ‘rules of law’ rather than of a system of national law. Since such ‘rules of law’ may be national as well as international, a separate reference to international law would have been out of place.248 The principle of freedom of choice of law (see paras. 43, 44 supra) would also indicate that a failure to mention international law in an agreement actually amounts to a negative choice of law effectively excluding its applicability. Several authors have drawn this conclusion arguing that the application of international law in this situation would violate the parties’ declared will.249 Nevertheless, the practice of ICSID tribunals, the overwhelming weight of writers, and important policy considerations all indicate that there is at least some place for international law, even in the presence of an agreement on choice of law which does not incorporate it. In LETCO v Liberia, the Tribunal determined that a reference to Liberian legislation in the concession agreement ‘appears to indicate an express choice by the parties of the

246 247 248 249

Kreindler (n 44) 414; Hege E Kjos, Applicable Law in Investor–State Arbitration (OUP 2013) 182. Roussalis v Romania, Award (7 December 2011) para 306. Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 668. Denis Bettems, Les Contrats entre Etats et entreprises étrangères (Méta-Editions 1989) 76, 79; Masood (n 110) 319; Stephen J Toope, Mixed International Arbitration : Studies in Arbitration between States and Private Persons (Grotius 1990) 238–239; Chukwumerije (n 170) 69 ff; Nagla Nassar, ‘Internationalization of State Contracts: ICSID, The Last Citadel’ (1997) 14 J Int’l Arb 185, 196 ff.

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Law of Liberia’250 (see para. 99 supra). The Claimant had argued that no express choice of law had been made and that, in accordance with the second sentence of Art. 42(1), international law should also be applied. The Tribunal pointed out that, though the Contracting State’s law is recognized as paramount within its own territory, it is nevertheless subjected to the control of international law251 (see further para. 284 infra). After confirming the general compliance of Liberian law with the generally accepted principles of public international law, the Tribunal proceeded to examine the legality of the revocation of the concession and the question of damages under both Liberian and international law. It came to the conclusion that ‘both according to international law and, more importantly, Liberian law, LETCO is entitled to compensation for damages . . .’252 In SPP v Egypt, there was also disagreement as to whether the parties had made a choice of Egyptian law and, consequently, whether international law was applicable in conformity with the residual rule of Art. 42(1), second sentence. The Tribunal declared this disagreement immaterial, holding that the same sources of law would have to be applied either way (see further paras. 100, 101 supra). It found: Finally, even accepting the Respondent’s view that the Parties have implicitly agreed to apply Egyptian law, such an agreement cannot entirely exclude the direct applicability of international law in certain situations. The law of the ARE [Arab Republic of Egypt], like all municipal legal systems, is not complete or exhaustive, and where a lacuna occurs it cannot be said that there is agreement as to the application of a rule of law which, ex hypothesi, does not exist. In such case, it must be said that there is ‘absence of agreement’ and, consequently, the second sentence of Article 42(1) would come into play.253

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The Tribunal proceeded to apply international law to defeat an argument by Egypt that certain acts of its officials were invalid under Egyptian law. It held that these acts created expectations protected by the application of the principle of international law establishing the international responsibility of States for unauthorized or ultra vires acts of officials having an official character: 83. Whether legal under Egyptian law or not, the acts in question were the acts of Egyptian authorities, including the highest executive authority of the Government. These acts, which are now alleged to have been in violation of the Egyptian municipal legal system, created expectations protected by established principles of international law. A determination that these acts are null and void under municipal law would not resolve the ultimate question of liability for damages suffered by the victim who relied on the acts. If the municipal law does not provide a remedy, the denial of any remedy whatsoever cannot be the final answer. 84. When municipal law contains a lacuna, or international law is violated by the exclusive application of municipal law, the Tribunal is bound in accordance with Article 42 of the Washington Convention to apply directly the relevant principles and rules of international law.254

250 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 358. 251 ibid. 252 ibid 372. 253 SPP v Egypt, Award (20 May 1992) para 80. 254 ibid paras 83 ff.

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The Tribunal continued to apply international law in a variety of contexts, such as in the context of the protection against uncompensated expropriation, the calculation of damages, and interest.255 It is true that the Tribunal never made a determination that Egyptian law was the law chosen by the parties. However, its insistence that international law was to be applied either way indicates that international law will not be ousted by a simple choice of a national system of law. The Tribunal’s reasoning as to lacunae in the chosen domestic law pointing towards an absence of agreement in the sense of Art. 42(1), first sentence, and hence leading to the application of international law in accordance with Art. 42(1), second sentence, may be open to doubt and has been criticized.256 What the Tribunal did, in fact, was not to close lacunae, but to subject the national law to the scrutiny and control of international law. The example of the ultra vires acts of Egyptian officials shows that the answer offered by Egyptian domestic law was simply superseded by the solution mandated by international law. The Tribunal in Autopista v Venezuela affirmed the view that the corrective function of international law (see further paras. 283–309 infra) was also relevant in the case of a choice of law in favor of domestic law. In the specific dispute, the Tribunal had to decide the question of the applicable law on the basis of Art. 42(1), second sentence, ICSID Convention (see also paras. 295, 296 infra). Nevertheless, the Tribunal expressly considered

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[it] a well accepted practice that the national law governing by virtue of a choice of law agreement (pursuant to Article 42(1) first sentence of the ICSID Convention) [was] subject to correction by international law in the same manner as the application of the host state law failing an agreement (under the second sentence of the same treaty provision).257

The Tribunal in Duke Energy v Peru also stressed the corrective function of international law even in the absence of its choice.258 The Tribunal found that the agreement between the investor and the host State did not contain a specific choice regarding the applicable substantive law and that thus the default rule of Art. 42(1), second sentence, ICSID Convention had to apply (see further paras. 191–195 infra). It added, however, that

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even if the law of Peru were held to apply to the interpretation of the [agreement between the investor and the host State], this Tribunal has the authority and duty to subject Peruvian law to the supervening control of international law.259

The Tribunal in Cambodia Power v Cambodia pointed out that despite a choice of English law in the contract, parties would have to exclude customary international law expressly to preclude its application. Otherwise, customary international law would 255 ibid paras 153 ff, 190, 222 ff. 256 See ibid, Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 321 ff; Delaume, ‘The Pyramids’ (n 43) 248, 261; Delaume, ‘L’affaire’ (n 43) 48; Zachary Douglas, The International Law of Investment Claims (CUP 2009) 130. 257 Autopista v Venezuela, Award (23 September 2003) para 207 (expressly relying on the First Edition of this Commentary). 258 Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 162, fn 52 (also relying on the First Edition of this Commentary). 259 ibid para 162.

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inevitably be relevant in the context of an investment arbitration as a minimum standard: 332. First, as it is clearly explained by Professor Schreuer, customary international law exists and may be applied independently of any choice of law . . . 333. . . . the express choice of English law itself has the effect of including (rather than displacing) at least a body of customary international law, since customary international law (i.e. general practices of states followed by them from a sense of legal obligation) constitutes part of the Common law by a well established doctrine of incorporation. 334. Customary international law is inevitably relevant in the context of foreign investment (and ICSID arbitration), given that it comprises a body of norms that establish minimum standards of protection in this field. It is simply unrealistic to assume that the parties to a foreign investment contract such as those in question here would have intended to exclude such inherent protection by simply choosing an applicable national law. 335. Equally, parties can always consent to exclude customary international law from the scope of their dispute resolution clause. However, one would expect this to be done expressly and unequivocally.260

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This practice shows a general reluctance to abandon international law in favor of the host State’s or another system of domestic law. The complete exclusion of standards of international law as a consequence of an agreed choice of law pointing towards a domestic legal system would indeed lead to some extraordinary consequences. It would mean that an ICSID tribunal would have to uphold discriminatory and arbitrary action by the host State, breaches of its undertakings that are evidently in bad faith or amount to a denial of justice, as long as they conform to the applicable domestic law, which is most likely that of the host State. It would mean that a foreign investor, simply by assenting to a choice of law, could sign away the minimum standards for the protection of aliens and their property developed in customary international law. Such a solution would hardly be in accordance with one of the goals of the Convention, namely ‘promoting an atmosphere of mutual confidence and thus stimulating a larger flow of private international capital into those countries which wish to attract it.’261 The idea that a choice of law clause might be construed as a waiver of the substantive standards of international law is not entirely without parallel. Under so-called Calvo Clauses, investors were induced, especially by Latin American host States, to waive any rights to diplomatic protection by their home States. These clauses were less than successful and have been looked upon with some reserve by arbitral tribunals.262 The limited success of a clause that was specifically designed to exclude remedies under international law must cast grave doubt on the ability of a choice of law clause to exclude international minimum standards by the mere omission of a reference to international law. In addition, it is highly unlikely that parties intend to make a choice 260 Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) paras 332–335. 261 ‘Report of the Executive Directors of the International Bank for Reconstruction and Development on the ICSID Convention, 1965’ (1993) 1 ICSID Reports 23, 25, para 9. 262 Patrick Juillard, ‘Calvo Doctrine, Calvo Clause’ in Rüdiger Wolfrum (ed), Max Planck Encyclopedia of Public International Law (online edn, OUP 2007); Donald R Shea, The Calvo Clause (Minnesota UP 1955).

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to the total exclusion of international law including the international minimum standards. It is for these and similar reasons that a number of authors have advocated the retention of international standards for the protection of foreign investments, even in the face of a choice of law clause pointing towards the host State’s domestic law alone.263 As early as 1968, Elihu Lauterpacht pointed out that the competence of an ICSID tribunal to pass upon questions of international law is inherent in its very status as a tribunal to dispose of issues under international investment contracts in substitution for alternative modes of international protection.264 Other authors have elaborated on this theme, pointing out that it would be extraordinary, if the traditional procedure of diplomatic protection ousted by Art. 27 of the Convention were to be replaced by a procedure that ignored internationally guaranteed minimum standards.265 In a similar vein, the prospect of awards that are in disregard of international law would be difficult to reconcile with the general obligation to recognize and enforce awards under Art. 54 (1) of the Convention.266 Other authors have demanded that any agreed exclusion of international law must be made perfectly clear,267 thereby indicating that the mere omission of its mention in a choice of law clause would not be sufficient to achieve this result. The weight of the arguments outlined above strongly militates in favor of the preservation of the international minimum standards, even in the absence of a reference to international law in a choice of law clause. Apart from the highly undesirable results that may arise from a complete disregard for international law, and the incompatibility of such a course of action with the purpose and overall system of the Convention, it is doubtful whether this problem can be adequately dealt with in terms of choice of law. The mandatory rules of international law, which provide an international minimum standard of protection for aliens, exist independently of any choice of law made for a specific transaction. They constitute a framework of public order within which such transactions operate. Their mandatory nature is not open to the disposition of the parties. This assertion is quite different from questions of applicable law under conflict of law rules. International law does not thereby become the law applicable to the contract. The transaction remains governed by the domestic legal system chosen by the parties. However, this choice is limited by the application of a number of mandatory international rules, such as the prohibition of denial of justice, the discriminatory taking of property, or the arbitrary repudiation of contractual undertakings.268 263 Curtis (n 98) 325 ff; Bastid-Burdeau (n 192) 5; Feuerle (n 113) 110 ff; Firth (n 92) 262 ff; Goldman (n 1) 151 ff. For a broad investigation, see Lillich (n 90) 61; Kjos (n 246) 182. 264 Elihu Lauterpacht, ‘The World Bank Convention on the Settlement of International Investment Disputes’ in Recueil d’études de droit international en hommage à Paul Guggenheim (Faculté de Droit de l’Université Genève and Institut de Hautes Études Internationales 1968) 642, 658. 265 Peter T Muchlinski, ‘Dispute Settlement under the Washington Convention on the Settlement of Investment Disputes’ in William E Butler (ed), Control over Compliance with International Law (Martinus Nijhoff 1991) 175, 186; Craig (n 149) 275; Giardina (n 97) 687 ff. 266 The ad hoc Committee in Amco v Indonesia has echoed these considerations in the context of an absence of choice of law, see Amco v Indonesia, Decision on Annulment (16 May 1986) para 21. See para 263 infra. These observations are equally valid where the parties have chosen the host State’s law. 267 Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 669. 268 See also Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 288–292 (quoting with approval Art. 42, paras 112, 115 of the Second Edition of this Commentary).

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10. Subsequent Changes in the Chosen Law 172

For the investor, the most dangerous aspect of choosing the host State’s domestic legal system is the prospect of subsequent changes in that law affecting the investment. This is particularly so where the host State’s law is chosen exclusively. Subsequent changes in the governing law may have an incisive effect on the parties’ relationship, going as far as the complete termination of a contract or the expropriation of the investor’s property. Such action may be taken in conformity with the host State’s constitutional requirements. In fact, measures causing injury to a foreign investor are frequently presented in the form of a change of domestic law. It is evident that exclusive reliance on domestic law and on domestic remedies will be of little or no use in a situation of this kind. Other changes in the host State’s law are less dramatic, but may still have a profound impact on the investor’s activities. They include changes in taxation and labor standards, environmental regulations and zoning laws, the freezing of tariffs for utilities, and other aspects of the regulatory framework for the investor’s operations.

a) Stabilization Clauses 173

One technique to shield a foreign investor from the consequences of a change in the host State’s law is the insertion of a stabilization clause into the investment contract or national laws. Under such a clause, the host State undertakes to leave the investor unaffected by subsequent changes of the local law. This is not a prohibition on changing the law, but merely a promise not to apply any changes vis-à-vis the investor or a promise to compensate the investor for any adverse consequences of such a change. From the investor’s perspective, the law becomes frozen at the time of the conclusion of the contract. In case of a stabilization clause in a law, that law specifies how the freezing is triggered.269 Put differently, the parties’ choice of law is specified also in terms of the chosen law’s evolution over time. The rules of law agreed to by the parties are only those enacted up to the date of the contract. In order to immunize stabilization clauses against their abrogation by subsequent national law of the host State, it is sometimes said that they are governed by international law, even if otherwise the chosen law is domestic law. Despite some debate concerning the precise legal foundations of stabilization clauses and their relationship to the host State’s sovereign right to legislate, arbitral practice,270 as well as scholarly writings,271 indicate that these clauses are 269 See eg Madagascar–Mining Code (2005) Art. 154 accessed 10 January 2021. 270 TOPCO v Libya (ad hoc), Award on the Merits (19 January 1977) (1978) 17 ILM 1, 24; Aminoil v Kuwait (ad hoc), Final Award (24 March 1982) (1984) 66 ILR 519, 586 ff, 621 ff. 271 Begic (n 43) 84–96; Curtis (n 98) 346 ff; Margarita TB Coale, ‘Stabilization Clauses in International Petroleum Transactions’ (2002) 30 Denv J Int’l L & Pol’y 217; Delaume (n 103) 23 ff; Abdullah Faruque, ‘Validity and Efficacy of Stabilisation Clauses’ (2006) 23 J Int’l Arb 317; Timothy B Hansen, ‘The Legal Effect Given Stabilization Clauses in Economic Development Agreements’ (1988) 28 Va JIL 1015; Giardina (n 97) 684 ff; Hirsch (n 1) 141 ff; Lillich (n 90) 97 ff; Thomas W Wälde and George Ndi, ‘Stabilizing International Investment Commitments: International Law versus Contract Interpretation’ (1996) 31 Texas ILJ 215; Prosper Weil, ‘Les clauses de stabilisation ou d’intangibilité insérées dans les accords de développement économique’ in Gorges Abi-Saab (ed), Mélanges offerts à Charles Rousseau: La communauté internationale (Pedone 1974) 301; Charles Leben, ‘La théorie du contrat d’État et l’évolution du droit international des investissements’ (2003)

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binding and should be respected. However, stabilization clauses require careful drafting so that protections for investors against future changes in the domestic law do not interfere with the host State’s obligations to respect its other commitments under domestic as well as international law, such as in the field of human rights.272 ICSID Model Clause 10 of 1993273 dealing with applicable law contains a reference to the possibility to stabilize the chosen law. It suggests the insertion of the words ‘as in force on the date on which this agreement is signed’ (see also para. 45 supra).274 Stabilization clauses have, in fact, been used repeatedly in contracts providing for ICSID arbitration (see paras. 53, 65 supra; paras. 175–186 infra). Stabilization clauses need not be comprehensive, but may be used selectively. It is possible to apply them only to special areas of concern. Thus, they may be directed to taxation or company law, but not to other areas of the host State’s law. Selective stabilization clauses provide additional flexibility and may be easier to obtain than comprehensive clauses.275 An example for such a selective stabilization is offered by the Principal Agreement underlying the Kaiser Bauxite v Jamaica case, which contained a ‘no further tax’ clause.276 ICSID tribunals have adopted a favorable attitude towards stabilization clauses. In AGIP v Congo, the chosen law was Congolese law supplemented by international law (see para. 64 supra). The agreement between the parties contained clauses protecting the investor against certain subsequent changes of Congolese law: the Government undertook not to apply ordinances or subsequent decrees the object of which would be to change the private joint-stock character of the Company set up locally; it also promised to enact appropriate provisions to ensure that possible modifications to the company law would not affect the structure and composition of the organs of the Company.277 The Tribunal, after examining the legality of the Company’s nationalization under

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273 274 275 276 277

302 RdC 199, 249; Lorenzo Cotula, ‘Reconciling Regulatory Stability and Evolution of Environmental Standards in Investment Contracts: Towards a Rethink of Stabilization Clauses’ (2008) 1 JWELB 164; Munir AFM Maniruzzaman, ‘The Pursuit of Stability in International Energy Investment Contracts: A Critical Appraisal of the Emerging Trends’ (2008) 1 JWELB 123; Moshe Hirsch, ‘Between Fair and Equitable Treatment and Stabilization Clause: Stable Legal Environment and Regulatory Change in International Investment Law’ (2011) 6 JWIT 783; Patrick Dumberry, ‘International Investment Contracts’ in Gazzini and De Brabandere (n 4) 215, 221; Frank Sotonye, ‘Stabilization Clauses and Foreign Direct Investment’ (2015) 16 JWIT 89; Sangwani P Ng’ambi, Resource Nationalism in International Investment Law (Routledge 2015) 55 ff; Katja Gehne and Romulo Brillo, ‘Stabilization Clauses in International Investment Law: Beyond Balancing and Fair and Equitable Treatment’ (2017) 143 TELC 6 ff. See eg John Ruggie, Just Business: Multinational Corporations and Human Rights (Norton & Company 2013) 135–137; Office of the UN High Commissioner for Human Rights (OHCHR), Principles for Responsible Contracts (United Nations 2015) 15–18; Andrea Shemberg, ‘Stabilization Clauses and Human Rights’ (2009) 10 accessed 10 January 2021. (1997) 4 ICSID Reports 364. Earlier versions of the Model Clauses also offered formulas for stabilization. See Clause XVII of the 1981 Model Clause XVII, (1993) 1 ICSID Reports 206; Clauses XIX and XX of the 1968 Model Clauses, (1968) 7 ILM 1115, 1176. Ottoarndt Glossner and Martin Bartels, ‘Internationale Bergbauvorhaben und Vertragspraxis für die Beilegung von Streitigkeiten’ (1982) 28 Außenwirtschaft 555, 561. Kaiser Bauxite v Jamaica, Decision on Jurisdiction (6 July 1975) para 12. The Tribunal did not reach the question of the clause’s relevance. AGIP v Congo, Award (30 November 1979) paras 68–70.

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Congolese law, turned to the situation under international law, pointing out that the act of nationalization was, after all, itself a piece of Congolese law that might provide a legal basis for the measures (see further paras. 149, 150 supra). After reciting the clauses, the Tribunal said: 86. These stabilization clauses, which were freely entered into by the Government, do not affect the principle of its legislative and regulatory sovereignty since it retains both with respect to those, whether nationals or foreigners, with whom the Government has not entered into such undertakings, and that, in the present case, they are limited to rendering the modifications to the legislative and regulatory provisions provided for in the Agreement, unopposable to the other contracting party. 87. . . . It suffices to concentrate the examination of the compatibility of the nationalization with international law on the stabilization clauses. 88. It is indeed in connection with these clauses that the principles of international law are used to complete the rules of Congolese Law. The reference made to international law suffices to demonstrate the irregular nature, from the point of view of this law, of the acts of nationalization carried out in the present case. It follows that the Government is obliged to compensate AGIP for the damage suffered by it as a result of the nationalization . . .278

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This decision shows not only a general deference to the stabilization clauses, but also a willingness to regard them as part of international law, thereby shielding them against unilateral abrogation through host State legislation. In other cases, stabilization clauses did not play a central role in the tribunals’ reasoning, but were referred to as an effective way to safeguard the rights of investors. In LETCO v Liberia, the Tribunal determined that there had been a choice of Liberian law (see further para. 99 supra). The Concession Agreement contained the following general stabilization clause: Except as otherwise provided in this Agreement, no amendment or repeal of any law or regulation governing this Agreement or any part thereof shall affect the rights and duties of the CONCESSIONAIRE without its consent.279

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After pointing out that it had found no indication that the laws of Liberia had been changed so as to affect the Concession Agreement, the Tribunal offered the following observation: This clause, commonly referred to as a ‘Stabilization Clause,’ is commonly found in long-term development contracts and, as is the case with notification procedures of the Concession Agreement, is meant to avoid the arbitrary actions of the contracting government. This clause must be respected, especially in this type of agreement. Otherwise, the contracting State may easily avoid its contractual obligations by legislation.280

278 ibid paras 86–88. 279 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 368. 280 ibid.

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In MINE v Guinea, the parties had agreed on Guinean law in force on the date of signature (see further para. 54 supra) and specified that their agreement would be binding, ‘nonobstant toutes les dispositions du droit interne public, administratif ou privé, qui pourraient intervenir en Guinée, et ce, sans exception ni réserve.’281 The ad hoc Committee observed that subsequent Guinean legislation could not affect the agreement and that the agreement could be said to have ‘frozen’ the applicable law.282 In SEMOS v Mali, stability guarantees were contained in national legislation as well as in agreements (so-called ‘Conventions’) with the investor. The Tribunal said:

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the 1999 wording of Article 993 of the General Tax Code of Mali constitutes an innovation in relation to the legal texts in force when the Amended Convention was signed. As such, it is not applicable to Semos, in view of the guarantee of the stability of the fiscal and customs regime the company enjoys under the 1970 and 1991 Mining Codes, as well as under the Original and Amended Conventions which are applicable to it.283

In CMS v Argentina, the Claimant’s license contained a specific undertaking that the tariff structure would not be subject to further regulation or price control, as well as a more general undertaking that the basic rules governing the license would not be amended.284 The Tribunal said:

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The important question . . . is that concerning the right to benefit from stabilization clauses. This discussion is well known in international law and to the extent this dispute concerns the simultaneous operation of the License and protection under the Treaty, the stabilization ensured a right that the Claimant can properly invoke.285

In Duke Energy v Peru, the Foreign Investment Law was the basis for the conclusion of ‘legal stability agreements’ (LSAs) which provided for the stabilization of legal regimes applicable to various fundamental rights of foreign investors.286 The Tribunal held that

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pursuant to the investment laws of Peru, the main features of LSAs are that (i) the stabilized legal regimes cannot be changed unilaterally by the State, and (ii) the agreements are subject to private or civil law and not administrative law.287

In AES v Kazakhstan, the foreign investment law contained a stabilization clause that, according to the Tribunal, applied to the investment.288 This clause, the Tribunal concluded, would only be triggered if changes in the legislation adversely affect the investor’s rights. Since the law provided for an exception in the field of security and health where an adverse effect would only lead to a compensation requirement, but 281 282 283 284 285 286

MINE v Guinea, Decision on Annulment (22 December 1989) para 6.33. ibid para 6.36. SEMOS v Mali, Award (25 February 2003) (2006) 10 ICSID Reports 116, 126. CMS v Argentina, Award (12 May 2005) paras 145–151. ibid para 151. Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) paras 24–31, 85. For stabilization clauses in foreign investment laws, see also Joseph E Neuhaus, ‘The Enforceability of Legislative Stabilization Clauses’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 318. 287 Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 31. 288 AES v Kazakhstan, Award (1 November 2013) para 252.

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would not prohibit the change,289 the Tribunal held that the requirement of the adverse effect was not fulfilled.290 These examples show that ICSID tribunals were confronted with a variety of different stabilization clauses whose precise formulations have effects upon the applicable law.

b) In the Absence of a Stabilization Clause 186

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The problem of changes to the chosen law after an investment has been made becomes considerably more complex where the parties have not agreed on a stabilization clause. The Convention’s drafting history shows some awareness of the problem, but offers no obvious solution. There was some suggestion that subsequent legislation should not apply, at any rate, if it worked to the investor’s detriment (History, Vol. II, pp. 405, 406, 419, 803, 985). On the other hand, the Chairman (Mr. Broches) pointed out that it was up to the parties to decide whether they wanted the chosen law to apply as it prevailed from time to time, or whether the investor should receive assurances in this respect as part of the incentives offered to the investor (ibid., p. 502). In the absence of any reference to the time factor, it is difficult to argue that a choice of the host State’s law is made on the tacit understanding that it only refers to the law as it existed at the time of the investment.291 The more obvious meaning of an agreement on choice of law, unqualified by a stabilization clause, is that the investment is governed by the chosen law subject to later change.292 However, this general principle does not mean that the host State is free to dispose of its contractual obligations through subsequent legislation or to radically change the legal regime applicable to an investment. A number of authors have suggested that host States are not free to change their law in a manner that would defeat, cancel, or gravely affect prior commitments.293 It appears that the solution to this problem can only be found by distinguishing between two different types of legislation in terms of their intended and actual effect. Normal changes to the host State’s legal system, which may be expected in the course of time to adjust to changing social, economic, and technological conditions, would undoubtedly apply to existing investment arrangements. These would typically include adjustments of labor law, reasonable changes of tax law, and the updating of technical safety standards. These bona fide evolutions of the local law would have to apply in a non-discriminatory fashion and in a way that does not point towards undeclared secondary purposes. The situation is different with respect to legislation with the declared or undeclared purpose of defeating undertakings which have been freely made by the host State. Action taken through changes in the local law, which is designed to strike at the root of a contractual relationship, or to create an environment under which the investor can no longer operate, need not be accepted. A repudiation of a contract or the confiscatory

289 ibid para 255. 290 ibid paras 259, 271. 291 But see Lauterpacht (n 264) 657–658. 292 Delaume, ‘State Contracts’ (n 92) 805; Delaume, ‘Le Centre’ (n 68) 829; Delaume, ‘Transnational Contracts’ (n 92) 70; Delaume, ‘L’affaire’ (n 43) 62; Giardina (n 97) 685 ff; Goldman (n 1) 152 ff; Hirsch (n 1) 124. 293 See Broches, ‘The Convention’ (n 131) 389; Curtis (n 98) 329; Feuerle (n 113) 119; Goldman (n 1) 153; Hirsch (n 1) 124; Masood (n 110) 323 (all with further references); Hirsch, ‘Between Fair and Equitable Treatment’ (n 271) 792 ff.

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expropriation of the investor’s property through legislative action are obvious examples. The creation of economic conditions designed to force the investor to abandon its operations would also fall into this category. An obvious indicator of impermissible purpose would be legislation directed selectively at a particular investor or group of investors. The minimum standards of protection mandated by international law limit the host State’s freedom to legislate (see further para. 171 supra). Under the regime of a BIT, changes in the host State’s legislation would be examined primarily against the standard of fair and equitable treatment. The legislative framework existing at the time of the investment will often be the basis for legitimate expectations of the investor. Any drastic change in that framework that seriously affects the investment may constitute a breach of the BIT’s fair and equitable treatment standard.294

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B. ‘In the absence of such agreement, . . .’ Before the tribunal may proceed to apply the residual rule contained in the second sentence of Art. 42(1), it must determine that the parties have not agreed on a choice of law. This determination may be made simply by a search of any contractual document that governs their relationship for an explicit choice of law clause, failing which the tribunal may conclude that there is no agreement on choice of law. This was the method adopted in Benvenuti & Bonfant v Congo. After referring to two Articles in agreements between the parties containing ICSID arbitration clauses, the Tribunal said:

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These Articles do not contain any provision regarding the law applicable. In this case, according to Article 42 (1) of the Convention, the Tribunal applies the law of the contracting State which is a party to the dispute as well as the principles of international law in the matter.295

Another method is to look for an indirect or implicit choice of law either in the original agreement or in the parties’ subsequent conduct. In two cases, it was argued that reference to specific items of the host State’s legislation in the agreements between the parties amounted to a general choice of its law. The argument was accepted in LETCO v Liberia (see para. 99 supra), but the question was left open in SPP v Egypt (see paras. 100, 101 supra). In Autopista v Venezuela, it was only partially accepted (see para. 103 supra). As pointed out above (see para. 105 supra), arguments of this kind should be treated with great caution. Yet another way to infer agreement on choice of law is to look at the parties’ submissions to the tribunal in the course of the proceedings (see paras. 106–115 supra) or at the reliance on a treaty as an indirect choice of law (see paras. 127–142 supra). As a general proposition, an agreement on choice of law should

294 See eg CMS v Argentina, Award (12 May 2005) paras 274–276; LG&E v Argentina, Decision on Liability (3 October 2006) paras 124–133; PSEG v Turkey, Award (19 January 2007) paras 240, 250; Enron v Argentina, Award (22 May 2007) paras 267, 268; Suez and Vivendi v Argentina, Decision on Liability (30 July 2010) para 203; Toto v Lebanon, Award (7 June 2012) para 244; AES v Kazakhstan, Award (1 November 2013) paras 252–260; Eiser v Spain, Award (4 May 2017) paras 363, 365; RREEF v Spain, Decision on Responsibility and Principles of Quantum (30 November 2018) paras 315–317. See also August Reinisch and Christoph Schreuer, International Protection of Investments: The Substantive Standards (CUP 2020) 461–480. 295 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.2. For similar findings, see Cable TV v St Kitts and Nevis, Award (13 January 1997) para 6.02; LG&E v Argentina, Decision on Liability (3 October 2006) paras 83, 84.

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be proven and not construed (see para. 112 supra). Where a clear indication to this effect is lacking, the tribunal should assume the absence of such an agreement and apply the residual rule. The parties may choose a law that fails to provide an answer to the question before the tribunal. In SPP v Egypt, the Tribunal found that lacunae in the law allegedly chosen by the parties amounted to an ‘absence of agreement,’ which led to the application of the residual rule of Art. 42(1), second sentence (see paras. 161–163 supra). The choice of a system of domestic law is unlikely to lead to gaps in the chosen law necessitating resort to the residual rule (see para. 164 supra). As pointed out in the Dissenting Opinion to the Award,296 Egyptian law, like other domestic systems, has its own devices to close any perceived gaps. However, choice of law clauses that leave the tribunal without clear direction in a particular situation are indeed feasible. This is particularly so since Art. 42(1) does not mandate the choice of an entire system of law, but opens the possibility to choose rules of law selectively (see paras. 71–74 supra). In Wena Hotels v Egypt, the Tribunal found that the parties had chosen the BIT as ‘the primary source of applicable law for this arbitration.’297 The Tribunal noted that the BIT was a terse document that did not contain all the applicable rules. After quoting Art. 42(1) of the Convention, the Tribunal said: The Tribunal finds that, beyond the provisions of the IPPA [i.e. the BIT], there is no special agreement between the parties on the rules of law applicable to the dispute. Rather, the pleadings of both parties indicate that, aside from the provisions of the IPPA, the Tribunal should apply both Egyptian law (i.e., ‘the law of the Contracting State party to the dispute’) and ‘such rules of international law as may be applicable.’298

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Art. 42(2) contains a clear prohibition of non liquet (see paras. 323–327 infra), thereby forcing the tribunal to come up with a decision even where the rules of law chosen by the parties do not offer a solution. At the same time, Art. 42(3) makes clear that, unless otherwise directed, the tribunal must rest its decision on legal rules and not on equitable considerations (see paras. 339–347 infra). In the case of an agreement on rules of law that turn out to be incomplete, the only acceptable avenue for the tribunal is to turn to the residual rule of Art. 42(1), second sentence, to the extent that the law cannot be determined within the framework of the agreed rules. Therefore, resort to the residual rule remains a possible fall-back position, even where the parties have made an agreement, although an incomplete one, on choice of law. However, this is unlikely to be the case where the parties have chosen an entire legal system, since such a choice of law would include the legal system’s rules on closing any gaps (see paras. 324–327 infra). C. ‘. . . the Tribunal shall apply the law of the Contracting State party to the dispute . . .’

1. The Decision in Favor of the Host State’s Law 196

Earlier versions of what eventually became Art. 42(1) contained no reference to the law of the host State (or ‘Contracting State party to the dispute’). The Working Paper, 296 SPP v Egypt, Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 321. 297 Wena Hotels v Egypt, Award (8 December 2000) para 78. 298 ibid para 79.

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the Preliminary Draft, and the First Draft provided that, in the absence of an agreement, the tribunal should decide in accordance with such rules of national or (and) international law ‘as it shall determine to be applicable’ (History, Vol. I, pp. 190, 192). The idea behind this somewhat open-ended formula was to let the tribunal find the proper law by applying generally accepted principles of the conflict of laws or private international law (History, Vol. II, pp. 79, 110, 267, 330, 506, 570). As Mr. Broches explained, this would lead to the law to which the transaction had the most significant connection. In most cases, this would be the law of the host State, but there would be cases in which other national laws would become applicable (ibid., pp. 514, 571, 800). Some delegates wanted more precision (ibid., pp. 469, 669) and a growing number, especially from capital-importing countries, insisted that only the law of the host country could apply in the absence of agreement between the parties (ibid., pp. 418, 419, 466, 513, 515, 516, 653, 660, 663, 800, 801, 802). In the end, Mr. Broches accepted these demands and presented a redrafted version that directed tribunals to apply the law of the State party to the dispute including its rules on the conflict of laws (ibid., p. 804; see also ibid., p. 985). A majority of 35 to 1 adopted the new draft (ibid., p. 804; see also ibid., p. 939; cf. para. 267 infra).299 The solution eventually adopted contains a clear decision in favor of the host State’s law. The qualifying words at the end of the sentence – ‘as may be applicable’ – cannot be taken as making this decision contingent on the particular circumstances of the case, since these words do not refer to the law of the Contracting State party to the dispute (see also paras. 270–272 infra). Other systems of domestic law are excluded, unless their application is mandated by the host State’s rules on the conflict of laws.300 Four factors mitigate this clear victory for the law of the host State: 1. In the vast majority of cases, the host State’s law is also the law to which the investment relationship has the closest connection. In other words, it is the law that general principles of conflict of laws would most likely designate as the proper law.301 2. The adoption of the host State’s law in the second sentence of Art. 42(1) explicitly includes its conflict of laws rules. Therefore, where a particular contractual relationship has stronger connections to the law of another State, the host State’s private international law will probably provide for a renvoi to the law of that other State (see paras. 88–90 supra; paras. 224–227 infra). It may be expected that the host State’s rules on the conflict of laws will usually lead to the same result as the generally accepted principles of the conflict of laws envisaged in the earlier drafts of the Convention. 3. Whenever reliance on the residual rule of Art. 42(1) would lead to unsatisfactory results, the parties may avail themselves of the possibility to choose a more appropriate set of rules in accordance with the first sentence of Art. 42(1) (see also paras. 57–62 supra).

299 See also Aron Broches, ‘The Convention on the Settlement of Investment Disputes between States and Nationals of Other States: Applicable Law and Default Procedure’ in Pieter Sanders (ed), International Arbitration: Liber Amicorum for Martin Domke (Martinus Nijhoff 1967) 12, 14, 16; Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 667–668; Chukwumerije (n 170) 66–67. 300 See, however, the contrary position taken by Feuerle (n 113) 114 ff. 301 Broches, ‘Applicable Law and Default Procedure’ (n 299) 16; Broches, ‘The Convention’ (n 131) 390; Delaume (n 100) 78; Hirsch (n 1) 133; Kahn (n 83) 21 ff; Shihata and Parra (n 44) 191.

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4. The host State’s law will be subject to the corrective function of international law. If the host State’s law is in violation of international law, the latter will provide relief to the investor (see paras. 273–309 infra). 200

The formula contained in Art. 42(1) is not only a careful compromise between the interests of host States and of investors, but also strikes a delicate balance between flexibility and predictability. While flexibility is provided by the almost unlimited freedom to agree on a choice of law, the residual rule gives a clear indication of the rules of law that will govern if no such agreement is made. This certainty is a unique feature of the ICSID Convention. Other arbitration rules, such as those of the International Chamber of Commerce,302 UNCITRAL,303 the Stockholm Chamber of Commerce,304 and the Iran–United States Claims Tribunal,305 all direct the respective tribunals, in terms, to apply those rules and principles which they determine to be appropriate.306 Interestingly enough, even the Arbitration Rules governing the ICSID Additional Facility contain a provision that follows the traditional, more open-ended formula: Article 54 Applicable Law (1) The Tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the Tribunal shall apply (a) the law determined by the conflict of laws rules which it considers applicable and (b) such rules of international law as the Tribunal considers applicable.

2. Application of Host State Law by ICSID Tribunals 201

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In the absence of an agreed choice of law, ICSID tribunals have not hesitated to turn to the law of the host State. In Benvenuti & Bonfant v Congo, the Tribunal found that, since there was no provision regarding the applicable law in the Parties’ arbitration clauses, it had to apply Congolese as well as international law (see para. 191 supra).307 In Amco v Indonesia, the Tribunal in the original proceedings said, after citing Art. 42(1): The parties having not expressed an agreement as to the rules of law according to which the disputes between them should be decided, the Tribunal has to apply Indonesian law, which is the law of the Contracting State Party to the dispute, and such rules of international law as the Tribunal deems to be applicable, considering the matters and issues in dispute.308

302 303 304 305

ICC Arbitration Rules (2021) Art. 21. UNCITRAL Arbitration Rules (2013) Art. 35(1). SCC Arbitration Rules (2017) Art. 27(1). Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by Iran and the United States (January 1981) Art. V (1981) 20 ILM 230, 232. 306 Hirsch (n 1) 110–111, 132; Parra (n 182) 309; Shihata and Parra (n 44) 191; John A Westberg, ‘Applicable Law, Expropriatory Takings and Compensation in Cases of Expropriation: ICSID and Iran–United States Claims Tribunal Case Law Compared’ (1993) 8 ICSID Rev 5. 307 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.2. See also Cable TV v St Kitts and Nevis, Award (13 January 1997) paras 6.02, 6.25. 308 Amco v Indonesia, Award (20 November 1984) para 148.

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In SOABI v Senegal, the Tribunal said in relation to Art. 42(1):

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In the Tribunal’s view, in the absence of agreement between the parties, the national law applicable to the relations of two Senegalese parties in respect of a project that was to take place in Senegal, can only be Senegalese law. The Tribunal is of the opinion that the agreements in question must be characterized as ‘government contracts,’ the effect and execution of which are governed primarily by the Code of Governmental Obligations (C.G.O.). It appears from the position of the Government stated in its Counter-Memorial (p. 11) and that of SOABI contained in its Reply (p. 7) that both parties agree that the applicable law is Senegalese administrative law.309

The apparent contradiction in this passage containing references to an absence of agreement and to the existence of agreement on the choice of law (see also para. 93 supra) may be resolved in the following way: the parties had not agreed on a choice of law in accordance with Art. 42(1), first sentence. Once the Tribunal had determined that it had to apply Senegalese law in accordance with the second sentence of Art. 42(1), it found corroboration for the application of Senegalese administrative law in the parties’ submissions. In Genin v Estonia, the Tribunal restated the rule contained in Art. 42(1). It then concluded that ‘[i]n the present case, in the absence of any agreement by the parties to the contrary, it is the law of the Republic of Estonia that applies.’310 Similarly, in MCI v Ecuador, the Tribunal considered that

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it must respect the provisions of the second part of Article 42(1) of the ICSID Convention, i.e., in the absence of an agreement, the Tribunal shall apply Ecuadorian law, including its rules of private international law and such rules of international law as may be applicable.311

The Tribunal in Perenco v Ecuador also adopted this approach.312 The same is true for Quiborax v Bolivia, where the Tribunal stated that since Art. 42(1), second sentence, did not allocate matters to either domestic or international law, the Tribunal had to determine whether an issue was governed by national or international law.313 The Tribunal in Magyar Farming v Hungary later confirmed this approach.314 In Bosh v Ukraine, the BIT did not contain an applicable law provision. The Tribunal referred with approval to the statement in AAPL that the BIT was not a self-contained regime. It considered that the applicable law consisted of the BIT as interpreted in accordance with international law and Ukraine law where appropriate. It stated: [T]he Tribunal considers that the applicable law consists, for the most part, of the BIT, as interpreted in accordance with international law. However, the Tribunal agrees with the Respondent that, in addition to applying the provisions of the BIT, it will have to consider Ukrainian law, in particular as the Claimants’ claims are at least in part based on asserted contractual rights.315 309 310 311 312

SOABI v Senegal, Award (25 February 1988) para 5.02 (footnote omitted). Genin v Estonia, Award (25 June 2001) para 350. MCI v Ecuador, Award (31 July 2007) para 217. Perenco v Ecuador, Decision on Remaining Issues of Jurisdiction and on Liability (12 September 2014) paras 532–534. 313 Quiborax v Bolivia, Award (16 September 2015) paras 90, 91. 314 Magyar Farming v Hungary, Award (13 November 2019) paras 25–27. 315 Bosh v Ukraine, Award (25 October 2012) para 113.

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Another example is the decision on counterclaims in Burlington v Ecuador. The Tribunal decided that it would apply Ecuadorian tort law, not as the chosen law, but as the law applicable under the second sentence of Art. 42(1) of the ICSID Convention. It stated: the Tribunal will apply Ecuadorian tort law, not as the law chosen by the Parties under the first leg of Article 42(1) of the ICSID Convention, but as the law of the host State under the second leg of that provision. The relevance of this distinction is that, under the second leg, international law also ‘may be applicable’.316

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In all these cases, the Tribunals proceeded to examine and apply the respective domestic systems of law.317 In Benvenuti & Bonfant v Congo and in SOABI v Senegal, the Tribunals also noted that the respective domestic legal systems were heavily influenced by French law and relied on that law as a way of establishing the appropriate rules of the host State’s domestic law.318 In Klöckner v Cameroon, the Tribunal determined that it had to apply the law of the Contracting State, that is the civil and commercial law applicable in Cameroon, which in its relevant part (see para. 228 infra) is also based on French law.319 The Tribunal’s subsequent analysis contains some references to French authorities.320 Before the ad hoc Committee, it was argued that the Award should be annulled for manifest excess of powers in the sense of Art. 52(1)(b) of the Convention because of a violation of Art. 42(1). The ad hoc Committee had no problem with the Tribunal’s basic finding on the applicable law, but held that it had failed to discharge its duty actually to apply that law321 (see para. 37 supra; Art. 52, paras. 277–283). A careful reading of the Award and of the Decision on Annulment in Klöckner suggests that the issue was neither a failure to select the correct law, nor a material error in the application of that law, a point which the ad hoc Committee never addressed, but simply the quality and thoroughness of the reasoning supporting a portion of the Award. The ad hoc Committee held that by not providing detailed authority on positive law, the Tribunal had not, in fact, applied the host State’s law. Whatever the merits of such a strict standard for the annulment (see paras. 40–42 supra), this case is an apt reminder, that in applying the host State’s law, great care must be taken to substantiate any particular findings of law. The situation in Amco v Indonesia was similar in that the ad hoc Committee acknowledged that the Tribunal had correctly identified and selected the proper law in accordance with the second sentence of Art. 42(1).322 However, in the ad hoc Committee’s view, the Tribunal had failed to apply an essential rule of Indonesian

316 Burlington v Ecuador, Decision on Counterclaims (7 February 2017) para 74. 317 See also SEMOS v Mali, Award (25 February 2003) (2006) 10 ICSID Reports 116, 122–125, where the Tribunal simply applied the law of Mali without a discussion of Art. 42. 318 Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 4.2–4.3; SOABI v Senegal, Award (25 February 1988) paras 5.06 ff, 5.34, 6.15 ff, 7.13. 319 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 59. See for a critical discussion of this issue, Elombi (n 170) 62 ff. 320 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 62 ff, 66–67, 70–71. 321 ibid, Decision on Annulment (3 May 1985) paras 57 ff. 322 Amco v Indonesia, Decision on Annulment (16 May 1986) para 19.

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law and had thereby exceeded its powers323 (see para. 38 supra; Art. 52, paras. 264–267). In LG&E v Argentina, the Tribunal applied Art. 42(1), second sentence, and analyzed the reference to the domestic law contained in that sentence. It noted that, according to Argentine law, the BIT prevailed over domestic law and became lex specialis concerning disputes between foreign investors and Argentina.324 It decided that it had to apply the BIT, general international law, and Argentine domestic law:

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In order to settle this controversy, the present Tribunal shall apply first the Bilateral Treaty; second and in the absence of explicit provisions therein, general international law, and, third, the Argentine domestic law, particularly the Gas Law that governs the natural gas sector. The latter is applicable in view of its relevance for determining the Argentine Republic’s liability and the defenses to which it may resort vis-à-vis the allegations made by Claimants.325

In UAB v Latvia, the Tribunal assumed an implicit choice of law and applied the domestic law of Latvia to actions of the Latvian executive and judicial authorities. It said:

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The Tribunal finally notes that it is not in dispute that (i) Article 1(1) of the BIT refers to Latvian laws and regulations, (ii) such laws and regulations apply to the actions of Latvian executive and judicial authorities and (iii) the agreements entered into by Latgales Enerģija with the Municipality, Rēzeknes Siltumtīkli and Rēzeknes Enerģija are governed by such laws and regulations. As follows from the preceding paragraph, the Tribunal considers that it is empowered by Article 42(1) of the ICSID Convention to interpret and apply such laws and regulations in so far as necessary to determine the dispute that has been referred to it.326

In Gosling and others v Mauritius, the Tribunal also applied Art. 42(1), second sentence, in the absence of an applicable law clause in the BIT. It pointed out that host State law applied to matters such as the conditions to acquire property and to develop it. It said:

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87. . . . Absent the Parties’ agreement, Article 42(1) of the ICSID Convention requires the Tribunal to ‘apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable.’ 88. Given the nature of the claims that the Respondent breached its obligations under the BIT, the Tribunal shall apply the provisions of the BIT and interpret them . . . This notwithstanding, there are matters underlying the claims such as the conditions to acquire rights to land in Mauritius or to its development to which Mauritian law applies.327

The Award in Micula v Romania II is an example of a Tribunal not respecting the default rule of Art. 42(1). The Tribunal determined that the parties had made no specific submission on the applicable law.328 However, the Claimant’s allegation was that Romania had failed properly to enforce its tax law. Despite referring to Art. 42(1) of

323 324 325 326 327 328

ibid paras 93–98. LG&E v Argentina, Decision on Liability (3 October 2006) paras 90–92. ibid para 99. UAB v Latvia, Award (22 December 2017) para 793. Gosling and others v Mauritius, Award (18 February 2020) paras 87–88. Micula v Romania II, Award (5 March 2020) para 348.

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the ICSID Convention in a footnote, the Tribunal determined that the relevant law in this case was the BIT, the ICSID Convention, and relevant rules of international law and ignored host State law. It said: The law relevant to this case is found in the BIT between Sweden and Romania, the relevant provisions of the ICSID Convention and any relevant rules of international law applicable to the interpretation and application of the BIT as well as any rules of international law applicable in the relationship between Sweden and Romania.329

3. Limits on the Application of the Host State’s Law a) International Law 218

The most important limits on the application of the host State’s law arise from the applicable rules of international law (for further discussion, see paras. 273–322 infra). These include considerations of international public policy (see paras. 80–87 supra), which are not only applicable to cases of choice of law by agreement, but also to the application of the host State’s law by virtue of the residual rule of Art. 42(1), second sentence.

b) The Host State’s Capacity to Submit to Arbitration 219

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Other possible limits to the application of the host State’s law concern the status and capacity of the parties. Some domestic legal systems contain limitations on the power of the State, and of State agencies, to enter into arbitration agreements.330 Unlimited reliance on the host State’s law as the law applicable to the dispute would support that State’s argument that its submission to ICSID arbitration was invalid.331 One possible solution to this problem is the adoption of a special clause in the agreement between the parties excluding the application of any provision in the host State’s law that might cast doubt on its capacity to submit to arbitration (see paras. 65, 78 supra). Even in the absence of such a specific provision, the arbitration clause may be read as a special agreement on a rule of law in the sense of the first sentence of Art. 42(1) modifying the otherwise applicable law of the host State. The more difficult question of the State’s capacity to contract in violation of its own law (see paras. 78, 79 supra) is likely to involve the interplay of domestic and international law (see paras. 273–322 infra). The principles of good faith and estoppel would strongly suggest that a State cannot rely on its own law to extricate itself from contractual commitments to the investor.332 In addition, Art. 25(1), second sentence, provides that a party may not withdraw its consent unilaterally. It follows that a State cannot rely on a provision of its domestic law to defeat its consent to arbitration (see also paras. 5–15 supra; Art. 25, paras. 1096–1104). In Autopista v Venezuela, the Respondent argued that Venezuelan law did not allow the submission of a dispute concerning the termination of a concession contract to 329 ibid. 330 Delaume (n 97) 94–95; Delaume, ‘How to’ (n 92) 169–170; Lalive (n 92) 326–327. 331 See SOABI v Senegal, Award (25 February 1988) paras 4.54 ff and ibid, Dissenting Opinion Mbaye (25 February 1988) paras 25 ff. 332 See Stephen M Schwebel, International Arbitration: Three Salient Problems (Grotius 1987) 68 ff (with further references).

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arbitration. The Tribunal rejected this argument as belated.333 It added the following observation: Moreover, a jurisdictional challenge based on an alleged exclusive jurisdiction of a Venezuelan authority would also violate the well-established principle of international law pursuant to which a state cannot rely on its domestic legislation to renege on a contractual obligation to resort to arbitration.334

c) The Investor’s Legal Status Another situation in which the application of the host State’s law must be qualified concerns the status of the investor. The legal status and capacity of a corporate foreign investor is not subject to the control of the host State’s law, but is governed by the law of the State of incorporation (see para. 17 supra).335

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4. Subsequent Changes in the Host State’s Law Most of what has been said about a subsequent change by the host State of its law in the context of the first sentence of Art. 42(1) (see paras. 172–190 supra) is equally valid where that law is applicable by virtue of the residual rule of the second sentence. In principle, the host State’s law will be applicable as it evolves over time, that is, subject to any changes that may occur after the establishment of the investment relationship. Stabilization clauses (see paras. 173–185 supra) are less likely where the parties have not addressed the question of choice of law. Nevertheless, they would have to be respected also in the context of the residual rule. In the more likely case of an absence of a stabilization clause, one would have to distinguish between routine adjustments of the host State’s law and changes that fundamentally affect an investment agreement between the parties (see paras. 186–190 supra) or otherwise encroach upon rights of the investor protected under international law. Changes of the former kind would have to be accepted by the investor, whereas changes of the latter kind would give rise to the host State’s responsibility. However, there is an important difference in this respect between the first and second sentence of Art. 42(1). The problems encountered where an agreed choice of law does not include reference to international law (see paras. 158–171 supra) would not arise here. The residual rule of Art. 42(1) instructs the tribunal to apply the law of the Contracting State party in conjunction with international law. As set out below (see paras. 273–322 infra), any alteration of the host State’s law, which is in violation of international law, would lead an ICSID tribunal to hold that State liable for a breach of its obligations.

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D. ‘. . . (including its rules on the conflict of laws) . . .’ The earlier drafts to the Convention had not provided for the application of the host State’s law in the absence of agreement on the choice of law, but had foreseen a wide discretion for the tribunal to apply such rules of law as it would determine to be applicable (History, Vol. I, pp. 190–192). The expectation was that, in exercising this

333 Autopista v Venezuela, Award (23 September 2003) paras 89, 90, 206. 334 ibid para 91. See also ibid para 207 (relying on the First Edition of this Commentary). 335 See also Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) paras 87–89.

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discretion, a tribunal would apply generally accepted principles on the conflict of laws (see paras. 196–198 supra). When, under mounting pressure, especially from representatives of capital importing countries, the draft was changed to refer the tribunal to the host State’s law, a reference to that State’s rules on private international law was added (History, Vol. II, p. 804). The idea was to take some of the rigidity out of the automatic reference to the host State’s law in case another system of law has stronger contacts to the transaction and a court of the host State would apply that other system of law.336 It is this origin in the Convention’s drafting history that explains the highly unusual phenomenon of a choice of law clause containing a reference to the conflict rules of the chosen law.337 Typical situations where a law other than that of the host State would turn out to be the proper law would be commercial loan contracts or licensing agreements338 (see paras. 57–62 supra). The renvoi provision of the second sentence of Art. 42(1) constitutes an important difference to the rule on agreed choice of law in the first sentence. While the difference may be explained by the technicalities of the drafting of Art. 42(1) (see para. 89 supra), there is a strong presumption that an agreed choice of law would only refer to the chosen law’s substantive provisions (see para. 90 supra). The residual rule clearly directs the tribunal to take the host State’s own rules on the conflict of laws into account. A tribunal, after having determined that there is no agreement on choice of law, would, therefore, first have to examine the host State’s private international law. Only after establishing that these rules do not refer to another system of law may the tribunal proceed to apply the host State’s substantive law. The original Award in Amco v Indonesia contains some reference to this process. After noting that the parties had not agreed on a choice of law and that, therefore, the second sentence of Art. 42(1) had to be applied (see para. 202 supra), the Tribunal said: As to Indonesian law, there is no need to enter into a discussion of its conflicts of laws’ rules. Indeed, Claimants as well as Respondent were constantly referring, in their discussion on the merits to the substantive law of Indonesia. Moreover, the dispute before the Tribunal relating to an investment in Indonesia, there is no doubt that the substantive municipal rules of law to be applied by the Tribunal are to [be] drawn from Indonesian law.339

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There is no doubt that the flexibility provided by the renvoi clause of Art. 42(1) somewhat detracts from the predictability achieved through the reference to the host State’s law.340 One possible outcome is that the host State’s conflict of law rules might refer the tribunal to another State’s law for certain aspects of the dispute, but not for others. While this may appear an unnecessary complication, it is a normal result of private international law rules before domestic courts. Of course, the renvoi clause is subject to variation or exclusion by agreement of the parties.

Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 668. Cf Delaume, ‘Le Centre’ (n 68) 828; Delaume, ‘L’affaire’ (n 43) 52. Delaume (n 100) 79. Amco v Indonesia, Award (20 November 1984) para 148. This reasoning of the Amco tribunal was expressly endorsed by the Tribunal in LG&E v Argentina, Decision on Liability (3 October 2006) para 87. 340 See esp Kahn (n 83) 24 ff, who is highly critical of the renvoi provision. Cf also Giardina (n 97) 690 ff. 336 337 338 339

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The only case in which conflict of laws rules of the host State have become relevant involved circumstances that were most probably not in the minds of the drafters of the Convention. In Klöckner v Cameroon, there was no agreement on the choice of law. Therefore, the second sentence of Art. 42(1) became operative, directing the Tribunal to apply the law of Cameroon. As a consequence of its colonial heritage, Cameroon continues to apply two different systems of law, common law in the former British Cameroon and the French Civil Code in the previously French part. The Tribunal accepted the Claimant’s position that only French law should be applied to the dispute. It noted that the factory project’s location, and the place where the agreements between the parties were finalized, both pointed towards that part of Cameroonian law which was based on French law.341 The Tribunal proceeded to analyze the merits of the case primarily by reference to French law.342 However, some uncertainty seems to have lingered in the Tribunal’s mind. At one point in its analysis, it said: ‘In view of the parties’ divergence of views as to applicable law under Article 42 of the ICSID Convention, it is appropriate to remark that English law and international law reach similar conclusions.’343 After citing an English law and an international law authority, the Tribunal reverts to its analysis in the light of French law. Although some reservations have been expressed about this use of the renvoi rule for choice of law questions arising within a State,344 the approach of the Tribunal in Klöckner appears eminently reasonable. When considering choice of law questions, not only is a State’s political organization relevant, but also the fact that its domestic legal order may be made up of different legal systems. This point applies regardless of whether or not the State concerned takes the form of a federation. For example, if the Contracting State party to the dispute is the United States, it will make some difference whether the applicable law is that of Delaware or of Louisiana. If the State concerned is the United Kingdom, it will be necessary to clarify whether English law or Scots law is to be applied.

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E. ‘. . . and such rules of international law . . .’

1. Rules or Principles of International Law This passage of Art. 42(1) contains a curious discrepancy between the English and Spanish texts of the Convention, on the one side, and the French text, on the other. Whereas the English text speaks of ‘rules of international law’ (Spanish ‘normas de derecho internacional’), the French text speaks of ‘principes de droit international,’ which would be better translated as ‘principles of international law’ and would indicate a higher level of generality and abstraction. Even Mr. Broches found the difference hard to explain in view of the joint sessions of the trilingual drafting committee.345 The mystery is compounded by the fact that the English text of Art. 42(1) contains the word ‘rules’ three times, which in the French text is rendered as ‘regles’ twice, but as ‘principes’ on the third occasion. The Spanish text is consistent in the use of the word ‘normas.’ A look at the drafting history of the French text shows that it initially 341 342 343 344 345

Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 59. ibid 61–64, 71–72. ibid 63. See also Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 168. Delaume, Transnational Contracts (n 92) 67–68; Delaume, ‘L’affaire’ (n 43) 52; Hirsch (n 1) 134–135. Broches, ‘The Convention’ (n 131) 391.

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contained the word ‘regle’ also in reference to international law, but that this was changed to ‘principes’ in the Revised Draft for no apparent reason (History, Vol. I, pp. 190–191). This background would indicate that the French term ‘principes’ should not be accorded any particular significance and should not be used to exclude the application of specific rules.346 The difference between rules and principles of international law does not seem to have created major difficulties for tribunals. However, in Klöckner v Cameroon, the ad hoc Committee, writing in French, seemed to be unaware of any version of the Convention other than the French one. In castigating the Tribunal for applying what it assumed to be a basic principle of French law, it noted that Art. 42(1) itself distinguishes between the concepts of ‘rules of law’ and ‘principles of law.’347 It continued to speculate that the Tribunal might have confused the ‘principles of international law’ referred to in Art. 42(1) with the ‘general principles of law recognized by civilized nations’ in the sense of Art. 38 of the Statute of the International Court of Justice (ICJ Statute)348 (see paras. 246–250 infra).

2. Finding the Rules of International Law 232

Reference to rules of international law was contained in all drafts of the Convention, although their inclusion was by no means uncontested (see para. 267 infra). There was repeated concern that the mere reference to rules of international law was too unspecific and required further elaboration (History, Vol. II, pp. 330, 418, 570, 801). Suggestions to clarify the contents of ‘rules of international law’ by reference to the established sources of international law (ibid., p. 418) led to a definition in the First Draft of the Convention which specifically refers to Art. 38(1) of the ICJ Statute (History, Vol. I, p. 192; Vol. II, p. 802). This definition was later transferred from the text of the Convention to the Report of the Executive Directors (History, Vol. II, pp. 962, 1029). Its para. 40 runs in part: The term ‘international law’ as used in this context should be understood in the sense given to it by Article 38(1) of the Statute of the International Court of Justice, allowance being made for the fact that Article 38 was designed to apply to inter-State disputes.349

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The reference to the enumeration of sources of international law as contained in Art. 38(1) of the ICJ Statute by no means resolves the problem of establishing the rules

346 347 348 349

ibid. See also SPP v Egypt, Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 326. Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 68. ibid para 69. (1993) 1 ICSID Reports 23, 31. The following footnote is attached to the Report (ibid): Article 38(1) of the Statute of the International Court of Justice reads as follows: ‘1. The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply: a. international conventions, whether general or particular, establishing rules expressly recognized by the contesting states; b. international custom, as evidence of a general practice accepted as law; c. the general principles of law recognized by civilized nations; d. subject to the provisions of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.’

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of international law relevant to the particular dispute. It is debatable whether the list provided there paints a complete picture of contemporary international law and whether the neat categories suggested there conform to the complex realities of international legal practice. Nevertheless, this reference demonstrates that an ICSID tribunal is directed to look at the full range of sources of international law in a similar way as the ICJ350 (see also paras. 261–272 infra).

a) Treaties There can be no doubt that treaty law is an important aspect of international law to be applied by ICSID tribunals. First and foremost among treaties would be bilateral investment treaties (BITs) between the host State and the home State of the investor. In addition, a number of multilateral treaties, such as the NAFTA351 and the ECT (see paras. 124–125 supra; Art. 25, paras. 864–871), contain detailed rules concerning foreign investment. These treaties are specifically designed to govern the type of relationship that is likely to come before an ICSID tribunal. It is also clear from the Convention’s drafting history that BITs were meant to be included among the ‘rules of international law’ of Art. 42(1) (History, Vol. II, p. 984). The large number of BITs352 and multilateral treaties dealing with investment makes them the most important source of international law for ICSID tribunals. AAPL v Sri Lanka was the first case in which consent to jurisdiction was based on a BIT. The Tribunal accepted the Sri Lanka–United Kingdom BIT as the primary source of the applicable legal rules.353 Although the Tribunal reached this result by construing an implied agreement of the parties through their conduct before the Tribunal (see paras. 95, 96, 106 supra), there can be no doubt that the Treaty would have constituted the main source of the rules of international law also under the residual rule of Art. 42(1), second sentence. Ever since that case, reliance on BITs has become a routine feature of numerous ICSID cases. In the majority of contemporary cases, a BIT is the centrepiece of the law applied by tribunals. Other treaties may also become relevant in ICSID arbitration.354 Tribunals, especially when interpreting BITs, routinely apply the Vienna Convention on the Law of Treaties.355 Numerous ICSID tribunals have adopted the principle of systemic 350 Kahn (n 83) 28 ff. 351 See also United States–Mexico–Canada Agreement (n 192) ch 14. 352 Jean-Pierre Laviec, Protection et Promotion des Investissements (PUF 1985); United Nations Centre on Transnational Corporations, Bilateral Investment Treaties (United Nations 1988, with 1992 suppl); World Bank, Legal Framework for the Treatment of Foreign Investment vol I (World Bank 1992); Rudolf Dolzer and Margrete Stevens, Bilateral Investment Treaties (Martinus Nijhoff 1995); ICSID (ed), Investment Treaties (loose-leaf, OUP); UNCTAD, ‘International Investment Agreements Navigator’ (2020) accessed 10 January 2021. 353 AAPL v Sri Lanka, Award (27 June 1990) para 20. 354 See Moshe Hirsch, ‘Interactions between Investment and Non-Investment Obligations’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 154. 355 See eg AAPL v Sri Lanka, Award (27 June 1990) paras 38–42; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 27; MTD v Chile, Award (25 May 2004) para 112; Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) para 32; Siemens v Argentina, Decision on Jurisdiction (3 August 2004) para 80; Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 75; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 117, 147–165; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) para 141; Camuzzi v Argentina I, Decision on

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integration in interpreting investment treaties and applied the maxim of jura novit curia to the treaties in question that came from outside the investment treaty regime. These include, inter alia, the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention);356 the International Covenant on Civil and Political Rights;357 the United Nations Convention against Corruption;358 the World Health Organization Framework Convention on Tobacco Control;359 the Cotonou Agreement between African, Caribbean and Pacific States and the European Community and its Member States;360 and the International Covenant on Economic, Social and Cultural Rights.361 In SPP v Egypt, Egypt argued that the 1972 UNESCO Convention for the Protection of the World Cultural and Natural Heritage required the cancelation of a tourism project. The Tribunal declared the question of whether the parties had made an agreed choice of law in favor of Egyptian law immaterial, holding that the UNESCO Convention and general international law would be applicable either way362 (see paras. 100, 101, 161, 162 supra). It came to the conclusion that the UNESCO Convention did not justify the measures taken by the Respondent and did not exclude the Claimant’s right to compensation. This was primarily so because it was not until some time after the project’s cancelation that the area in question was registered in the inventory of property to be protected by the UNESCO Convention. On the other hand, the concern for the antiquities was accepted as genuine.363 When EU law is involved in a certain dispute, the question arises whether it must be treated as international law, domestic law, or as a mere fact.364 Tribunal practice is divided on the question whether EU law is part of domestic and/or international law,365

356 357 358 359 360 361 362 363 364

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Jurisdiction (11 May 2005) para 133; Noble Ventures v Romania, Award (12 October 2005) para 50; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 88–93, 226, 230, 239; Fraport v Philippines I, Award (16 August 2007) para 339. Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) paras 174–179; Saipem v Bangladesh, Award (30 June 2009) paras 163–170; ATA Construction v Jordan, Award (18 May 2010) paras 124, 128. Toto v Lebanon, Decision on Jurisdiction (11 September 2009) paras 158–160. World Duty Free v Kenya, Award (4 October 2006) para 145. Philip Morris v Uruguay, Award (8 July 2016) para 395. CMC v Mozambique, Award (24 October 2019) paras 266–295. Urbaser v Argentina, Award (8 December 2016) paras 1195–1199. SPP v Egypt, Award (20 May 1992) paras 75–78. ibid paras 150–159. There is by now an extensive discussion in the literature on the relationship between EU law and investment arbitration and an increasing number of awards dealing with this problem. See eg Nico Basener, Investment Protection in the European Union (Nomos 2017) 204–213; Scheu and Nikolov (n 3) (both with further references); Julian Scheu and Petyo Nikolov, ‘The Setting Aside and Enforcement of Intra-EU Investment Arbitration Awards after Achmea’ (2020) 36 Arb Int’l 253. See eg Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) paras 4.112–4.129; Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) paras 140–150; Eskosol v Italy, Decision on Termination Request and Intra-EU Objection (7 May 2019) paras 112–123, 173–174; Landesbank Baden-Württemberg and others v Spain, Decision on Intra-EU Objection (25 February 2019) para 158; Hydro Energy v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (9 March 2020) para 494.

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and whether it is to be applied to a case as part of the applicable law or to be treated as fact.366 For example, in AES v Hungary, a case based on the ECT, the Claimant contended that EU law was to be considered the equivalent of internal or municipal law and therefore to be treated as a fact by the Tribunal when determining the applicable law.367 The Tribunal pointed to the dual nature of EU law as an international legal regime and as part of the national legal orders.368 Referring to the fact that both parties pleaded that the Tribunal should apply EU law as fact,369 it decided to do so:

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In summary, the Tribunal determines that the Respondent’s acts/measures are to be assessed under the ECT as the applicable law but that the EC law is to be considered and taken into account as a relevant fact.370

The Tribunal in Micula v Romania I opted for the same approach and described EU law as part of the ‘factual matrix’ of the case. The Tribunal held that the EU accession agreement in general and the pertinent provisions of EU law may be relevant to determine whether the acts conducted by Romania were reasonable, or whether the Claimant’s expectations were legitimate.371 By contrast, in Electrabel v Hungary, the Tribunal, though accepting that EU law became part of the national legal order, also considered EU law as part of the international legal order:

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EU law as a whole is part of the international legal order; and it does not draw a material distinction, as proposed by the Claimant, between the EU Treaties (which the Claimant acknowledges as international law) and the ‘droit dérivé’ (which the Claimant does not acknowledge as international law). In the Tribunals’ view, all EU legal rules are part of a regional system of international law and therefore have an international legal character.372

The Tribunal in SolEs Badajoz v Spain, another ECT-based dispute, considered EU law to be part of international law.373 However, despite the fact that EU law was part of international law, it could only form part of the applicable law in the arbitration, if it fulfilled the requirements of Art. 16 of the ECT, the provision addressing the relationship between the ECT and other international agreements. In the Tribunal’s view, Art. 16 of the ECT served as a choice of law provision in the sense of Art. 42(1) of the ICSID Convention.374 Under Art. 16 of the ECT, EU law could thus only apply in the arbitration if it provided investors with more favorable treatment than the ECT.375 366 See eg AES v Hungary, Award (23 September 2010) para 7.6.12; Micula v Romania I, Award (11 December 2013) para 328. See eg Basener (n 364) 204–212. 367 AES v Hungary, Award (23 September 2010) para 7.3.4. 368 ibid para 7.6.6. 369 ibid. 370 ibid para 7.6.12. 371 Micula v Romania I, Award (11 December 2013) para 328. See also Addiko v Croatia, Decision on Jurisdiction (12 June 2020) para 269. 372 Electrabel v Hungary, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 4.122. See also Vattenfall v Germany, Decision on the Achmea Issue (31 August 2018) para 146; Hydro Energy v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (9 March 2020) para 494. 373 See SolEs Badajoz v Spain, Award (31 July 2019) paras 155–167. 374 ibid para 158. 375 ibid para 164.

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Since the parties did not identify any provision of the EU treaties that would be more favorable than the ECT, the Tribunal concluded that EU law was not applicable to the dispute.376

b) Customary International Law 243

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Customary international law offers important guidance in investment disputes. Its rules on the minimum standard for the treatment of aliens including their property, more specifically on expropriation and compensation, on the prohibition of denial of justice, and on State responsibility for injury to aliens are obvious examples.377 In the course of the Convention’s drafting, a number of suggestions were made concerning possible rules of international law that might be applied by tribunals. These included protection against discriminatory treatment, the obligation to act in good faith, the prohibition of measures contrary to international public policy, pacta sunt servanda, the exhaustion of local remedies and rules on State succession (History, Vol. II, pp. 419, 570, 801, 985). Mr. Broches pointed out that the reference to international law in Art. 42 comprised, apart from treaty law, only such principles as that of good faith and the principle that one ought to abide by agreements voluntarily made and ought to carry them out in good faith (ibid., p. 985). ICSID tribunals have affirmed in the context of Art. 42(1) that ‘applying the rules of international law is to be understood as comprising the general international law, including customary international law . . .’378 ICSID tribunals have frequently applied rules of customary international law under either the first or the second sentence of Art. 42(1).379 This practice may be illustrated by the following examples: s principles of State responsibility;380 s the principle of respect for acquired rights;381 s consequences of a state of necessity;382

376 ibid paras 163–167. 377 For a more elaborate analysis, see Firth (n 92) 262 ff; Patrick Dumberry, The Formation and Identification of Rules of Customary International Law in International Investment Law (CUP 2016). 378 LG&E v Argentina, Decision on Liability (3 October 2006) para 89. See also ADC v Hungary, Award (2 October 2006) para 290. 379 See eg Dumberry (n 377). 380 SPP v Egypt, Award (20 May 1992) para 85; CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 108; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 102; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 89; Azurix v Argentina, Award (14 July 2006) para 50; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 148; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 190; Quiborax v Bolivia, Award (16 September 2015) paras 327, 370; Caratube and Hourani v Kazakhstan, Award (27 September 2017) paras 1072; Burlington v Ecuador, Decision on Reconsideration and Award (7 February 2017) paras 177, 574; Staur Eiendom v Latvia, Award (28 February 2020) paras 312–354. 381 Amco v Indonesia, Award (20 November 1984) para 248(v); Magyar Farming v Hungary, Award (13 November 2019) paras 343–348. 382 CMS v Argentina, Award (12 May 2005) paras 304–331; LG&E v Argentina, Decision on Liability (3 October 2006) paras 245–266; Enron v Argentina, Award (22 May 2007) paras 294–313; CMS v Argentina, Decision on Annulment (25 September 2007) paras 101–150; Sempra v Argentina, Award (28 September 2007) paras 333–354, 392–397; Total v Argentina, Decision on Liability (27 December 2010) para 220; von Pezold and others v Zimbabwe, Award (28 July 2015) para 668; Unión Fenosa v Egypt, Award (31 August 2018) para 8.62. See also Avidan Kent and Alexandra R Harrington, ‘The Plea of Necessity under Customary International Law: A Critical Review in Light of the Argentine Cases’ in

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denial of justice;383 the standard of protection in case of an insurrection;384 nationalization in breach of a stabilization clause;385 expropriation requires compensation;386 the Chorzów Factory standard,387 providing the appropriate measure of compensation for wrongful expropriation;388 a lawful nationalization requires a legislative enactment, taken for a bona fide public purpose, non-discrimination, and appropriate compensation;389 not only tangible property rights, but also contractual rights, may be indirectly expropriated;390 jurisdiction is determined by reference to the date on which proceedings are instituted;391 whether there is a requirement to exhaust local remedies;392 the permissibility of piercing the corporate veil to determine jurisdiction;393 shareholder protection under general international law.394

c) General Principles of Law Under prevailing theory and practice, general principles of law are found through a process of comparative law whereby features common to domestic legal systems, international legal regimes and principles common to any system of law are

383 384 385 386 387 388

389 390 391

392 393 394

Chester Brown and Kate Miles (eds), Evolution in Investment Treaty Law and Arbitration (CUP 2011) 246 ff. Amco v Indonesia, Resubmitted Case: Award (5 June 1990) paras 122–138. AAPL v Sri Lanka, Award (27 June 1990) para 72. AGIP v Congo, Award (30 November 1979) paras 84–88. Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.64; Amco v Indonesia, Award (20 November 1984) para 188; Santa Elena v Costa Rica, Award (17 February 2000) paras 68–95. Case Concerning the Factory at Chorzów (Germany v Poland) (Merits) PCIJ Rep Series A No 17, 47. ADC v Hungary, Award (2 October 2006) paras 483–494; Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) paras 8.2.2–8.2.7; Burlington v Ecuador, Decision on Reconsideration and Award (7 February 2017) para 177; Quiborax v Bolivia, Award (16 September 2015) paras 327, 370; Vestey v Venezuela, Award (15 April 2016) para 329; Rusoro Mining v Venezuela (AF), Award (22 August 2016) para 640; Watkins Holdings v Spain, Award (21 January 2020) para 677; Hydro Energy v Spain, Decision on Jurisdiction, Liability and Directions on Quantum (9 March 2020) para 686. LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 366. SPP v Egypt, Award (20 May 1992) paras 160–168; Emmis v Hungary, Award (16 April 2014) para 164; Crystallex v Venezuela (AF), Award (4 April 2016) para 663. Goetz v Burundi, Award (10 February 1999) para 72; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 31; Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 178; Vivendi v Argentina, Resubmitted Case: Decision on Jurisdiction (14 November 2005) paras 60, 63; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 117–136; Enron v Argentina, Award (22 May 2007) para 396; Awdi v Romania, Award (2 March 2015) para 190. Maffezini v Spain, Decision on Jurisdiction (25 January 2000) paras 28 ff; Generation Ukraine v Ukraine, Award (16 September 2003) paras 13.1–13.6; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 150–153. Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) paras 53–56. CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 48; Camuzzi v Argentina I, Decision on Jurisdiction (11 May 2005) 144, 145; Sempra v Argentina, Decision on Jurisdiction (11 May 2005) paras 156, 157.

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established.395 Although formally equivalent to treaty and custom, they are frequently used to fill gaps left by these two sources. Since treaties and custom are created through the interaction of States, general principles of law are particularly useful in areas of the law which involve non-State actors such as investment relationships. They have played a prominent role in arbitrations between States and foreign nationals396 as is aptly illustrated by the practice of the Iran–United States Claims Tribunal.397 General principles of law are an important source of international law also in ICSID cases.398 Typically, they involve questions of a less political and more technical character than rules of customary international law. The increased inclusion of general principles of public law can support the interpretation and clarification of substantive treaty provisions.399 In Inceysa v El Salvador, the Tribunal, after quoting Art. 38 of the ICJ Statute, described general principles of law as follows: 226. According to the precept transcribed above, the general principles of law are an autonomous or direct source of International Law, along with international conventions and custom. 227. Without attempting to define what the general principles of law are, the Tribunal notes that, in general, they have been understood as general rules on which there is international consensus to consider them as universal standards and rules of conduct that must always be applied and which, in the opinion of important commentators, are rules of law on which the legal systems of the States are based.400

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The practice of ICSID tribunals on general principles of law may be illustrated by the following examples: s good faith;401 s prohibition of corruption;402

395 Stephan W Schill, ‘General Principles of Law and International Investment Law’ in Gazzini and De Brabandere (n 4) 133, 147, 148, 152. 396 Curtis (n 98) 331 ff; Phillipe Kahn, ‘Les principes généraux du droit devant les arbitres du commerce international’ (1989) 116 JDI 305; Lipstein (n 61); Lillich (n 90) 107 ff; Schill (n 395) 133 ff; Börnsen (n 123) 74 ff; Charles T Kotuby and Luke A Sobota, General Principles of Law and International Due Process: Principles and Norms Applicable in Transnational Disputes (OUP 2017) 16, 87 ff; Andrea Gattini, Attila Tanzi and Filippo Fontanelli, ‘Under the Hood of Investment Arbitration: General Principles of Law’ in Andrea Gattini, Attila Tanzi and Filippo Fontanelli (eds), General Principles of Law and International Investment Arbitration (Brill Nijhoff 2018) 1, 2 ff. 397 Grant Hanessian, ‘“General Principles of Law” in the Iran–US Claims Tribunal’ (1989) 27 Columbia JTL 309. 398 Cherian (n 102) 90 ff; Emmanuel Gaillard, ‘Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI) Chronique des sentences arbitrales’ (1987) 114 JDI 135, 159; Patrick Dumberry, A Guide to General Principles of Law in International Investment Arbitration (OUP 2020). 399 Schill (n 395) 137, 145 ff; Gattini, Tanzi and Fontanelli (n 396) 3 ff. 400 Inceysa v El Salvador, Award (2 August 2006) paras 226, 227. 401 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 47; Inceysa v El Salvador, Award (2 August 2006) paras 230 ff; Europe Cement v Turkey, Award (13 August 2009) paras 171–174; Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 169–185; Vigotop v Hungary, Award (1 October 2014) paras 310, 585–586. See also Andrea Carlevaris, ‘General Principles of Commercial Law and International Investment Law’ in Mads Andenas and others (eds), General Principles and the Coherence of International Law (Brill Nijhoff 2019) 205, 219. 402 Wena Hotels v Egypt, Award (8 December 2000) para 111; World Duty Free v Kenya, Award (4 October 2006) paras 138–157; Krederi v Ukraine, Award (2 July 2018) paras 384–386.

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s nobody can benefit from his or her own fraud (nemo auditur propriam turpitudinem allegans);403 s general principles of contract law404 including pacta sunt servanda405 and the exceptio non adimpleti contractus;406 s estoppel;407 s unjust enrichment;408 s full compensation of prejudice resulting from a failure to fulfill contractual obligations;409 s the principle of compensation in case of nationalization;410 s general principles of due process;411 s the claimant bears the burden of proof;412 s res judicata;413

403 Inceysa v El Salvador, Award (2 August 2006) paras 240 ff. 404 Amco v Indonesia, Award (20 November 1984) paras 180–183. 405 Gardella v Côte d’Ivoire, Award (29 August 1977) para 4.3; Amco v Indonesia, Award (20 November 1984) paras 248 ff; Watkins Holdings v Spain, Award (21 January 2020) paras 200–202. Cf also Toope (n 249) 241 ff. 406 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 61 ff; Autopista v Venezuela, Award (23 September 2003) para 316. 407 Amco v Indonesia, Decision on Jurisdiction (25 September 1983) para 47; Amco v Indonesia, Resubmitted Case: Award (5 June 1990) paras 144–145; Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 123; SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 63; CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 47; Gruslin v Malaysia II, Award (27 November 2000) paras 20.1–20.5; Zhinvali v Georgia, Award (24 January 2003) paras 244–248; SGS v Pakistan, Decision on Jurisdiction (6 August 2003) paras 122, 175–177; SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 109; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 140–161; ADC v Hungary, Award (2 October 2006) paras 474, 475; Fraport v Philippines I, Award (16 August 2007) paras 346, 347. See also Carlevaris (n 401) 221. 408 Amco v Indonesia, Resubmitted Case: Award (5 June 1990) paras 154–156; SPP v Egypt, Award (20 May 1992) paras 245–249; Inceysa v El Salvador, Award (2 August 2006) paras 253 ff; Occidental v Ecuador, Award (5 October 2012) paras 653–655 and ibid, Dissenting Opinion Stern (20 September 2012) paras 132, 160–165. See also Ben Juratowitch and James Shaerf, ‘Unjust Enrichment as a Primary Rule of International Law’ in Andenas and others (n 401) 227; Christina Binder, ‘Unjust Enrichment as a General Principle of Law in Investment Arbitration’ in Gattini, Tanzi and Fontanelli (n 396) 269 ff. 409 Amco v Indonesia, Award (20 November 1984) paras 265–268. 410 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.64. 411 Amco v Indonesia, Award (20 November 1984) paras 199–201; Amco v Indonesia, Decision on Annulment (16 May 1986) paras 75–79. 412 AAPL v Sri Lanka, Award (27 June 1990) para 56; Tradex v Albania, Award (29 April 1999) para 74; Middle East Cement v Egypt, Award (12 April 2002) para 89; Generation Ukraine v Ukraine, Award (16 September 2003) paras 19.1, 19.4; Noble Ventures v Romania, Award (12 October 2005) para 100; Salini v Jordan, Award (31 January 2006) paras 70–75; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 83; Tokios Tokelės v Ukraine, Award (26 July 2007) para 121; von Pezold and others v Zimbabwe, Award (28 July 2015) para 174; Eli Lilly v Canada (UNCITRAL), Final Award (16 March 2017) para 109; Churchill and Planet Mining v Indonesia, Decision on Annulment (18 March 2019) para 215. 413 Amco v Indonesia, Resubmitted Case: Decision on Jurisdiction (10 May 1988) (1993) 1 ICSID Reports 548 ff; Bosh v Ukraine, Award (25 October 2012) para 277; EDF v Argentina, Award (11 June 2012) para 1132; Elsamex v Honduras, Award (16 November 2012) para 212; Apotex v United States (AF), Award (25 August 2014) para 7.11. See also Philipp Janig and August Reinisch, ‘General Principles and the Coherence of International Investment Law: Of Res Judicata, Lis Pendens and the Value of Precedents’ in Andenas and others (n 401) 247, 248 ff.

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s prohibition of abuse of right;414 s the duty to mitigate damage;415 s no one can transfer a better title than he or she has (nemo plus iuris transferre potest quam ipse habet);416 s valuation of damages;417 s jura novit curia.418 249

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Before applying presumed general principles of law, one must take great care to establish these principles by inductive proof and not simply to assume or postulate their existence. In Klöckner v Cameroon, the Tribunal, while purporting to apply domestic law, added that a ‘duty of full disclosure to a partner in a contract’ was not only a principle of French civil law, but that this was ‘indeed the case under the other national codes which we know of’ and that this was the criterion which ‘applies to relations between partners in simple forms of association anywhere’419 (see also paras. 37, 211 supra). The ad hoc Committee took these allusions as a reference to general principles of law.420 In annulling the Award, it deplored the absence of any authority for these general principles or universal requirements421 and concluded that the Award’s reasoning seemed more like a simple reference to equity422 (see paras. 341–343 infra). It is important to remember that general principles of law are not a substitute for decisions ex aequo et bono provided for in Art. 42(3). The latter would require specific consent (see paras. 339–347 infra). General principles of law are not an expression of general feelings of justice or equity, but are part of the body of international law which, in a particular case, must be proven and not presumed. This proof must be furnished on the basis of a rigorous examination, if not of all systems of law, at least of the most important major representative systems.

d) Judicial Decisions 251

At one point in the Convention’s drafting, concerns about the scarcity, or lack of clarity, of rules of international law which might have to be applied by ICSID tribunals led to a suggestion to obtain the authorization by the UN General Assembly for ICSID 414 Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 154–158; Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 119, 125, 213; Phoenix Action v Czech Republic, Award (15 April 2009) para 143; Mobil v Venezuela, Decision on Jurisdiction (10 June 2010) paras 169–185. 415 Middle East Cement v Egypt, Award (12 April 2002) para 167; AIG v Kazakhstan, Award (7 October 2003) para 10.6.4; EDF v Argentina, Award (11 June 2012) para 1302; HEP v Slovenia, Award (17 December 2015) paras 215, 386. 416 Mihaly v Sri Lanka, Award (15 March 2002) para 24; Vestey v Venezuela, Award (15 April 2016) para 286. 417 Amco v Indonesia, Award (20 November 1984) para 267; Fedax v Venezuela, Award (9 March 1998) para 30; Enron v Argentina, Award (22 May 2007) para 360. 418 Burlington v Ecuador, Decision on Liability (14 December 2012) para 179; Metal-Tech v Uzbekistan, Award (4 October 2013) para 287; Quiborax v Bolivia, Award (16 September 2015) para 92; Vestey v Venezuela, Award (15 April 2016) paras 116–118; Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 235, 236; Burlington v Ecuador, Decision on Counterclaims (7 February 2017) para 74; Krederi v Ukraine, Award (2 July 2018) para 7; Magyar Farming v Hungary, Award (13 November 2019) para 27. 419 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 59. 420 Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 69. 421 ibid para 72. 422 ibid para 77.

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tribunals to seek advisory opinions from the ICJ (History, Vol. II, p. 420). For practical reasons this idea was not pursued. However, ICSID tribunals have relied heavily on previous international judicial decisions as authority when dealing with questions of international law. References to international adjudication include decisions of the PCIJ and of the ICJ, of the European Court of Human Rights, the Iran–United States Claims Tribunal, and other courts and arbitral tribunals.423 Reference to previous ICSID decisions has become a standard feature in most decisions of ICSID tribunals (see also Art. 53, paras. 21–24).424 Tribunals regularly rely on other ICSID decisions and awards to the extent that they find their reasoning persuasive.425 At times, they disregard earlier decisions and voice their disagreement.426 ICSID tribunals are not legally ‘bound by any other judgments or arbitral awards’427 and ‘the decisions of ICSID tribunals are not binding precedents.’428 At the same time, tribunals have generally tried to interpret similar issues in a similar way attempting to establish a coherent body of law.429 The notion of a ‘common legal opinion or 423 For a comprehensive survey of citations, see Jeffery P Commission, ‘Precedent in Investment Treaty Arbitration: A Citation Analysis of a Developing Jurisprudence’ (2007) 24 J Int’l Arb 129. See also Ole K Fauchald, ‘The Legal Reasoning of ICSID Tribunals – an Empirical Analysis’ (2008) 19 EJIL 301, 339–342; Moshe Hirsch, ‘Sources of International Investment Law’ Hebrew University of Jerusalem Research Paper No 05-11 (2011) 18–21; Alain Pellet, ‘2013 Lalive Lecture – The Law of the ICJ in Investment Arbitration’ (2013) 28 ICSID Rev 223 ff. 424 For a comprehensive survey, see Commission (n 423) 129 ff. 425 See Andrea K Bjorklund, ‘Investment Treaty Arbitral Decisions as Jurisprudence Constante’ in Colin Picker, Isabella D Bunn and Douglas Arner (eds), International Economic Law: The State and Future of the Discipline (Hart 2008) 265; Tai-Heng Cheng, ‘Precedent and Control in Investment Treaty Arbitration’ (2007) 30 Fordham ILJ 1014; Gabrielle Kaufmann-Kohler, ‘Arbitral Precedent: Dream, Necessity, or Excuse’ (2007) 23 Arb Int’l 357; Jan Paulsson, ‘International Arbitration and the Generation of Legal Norms: Treaty Arbitration and International Law’ (2006) 3(5) TDM; August Reinisch, ‘The Role of Precedent in ICSID Arbitration’ [2008] Austrian Arb YB 495; Christoph Schreuer, ‘Diversity and Harmonization of Treaty Interpretation in Investment Arbitration’ (2006) 3(2) TDM; Christoph Schreuer and Matthew Weiniger, ‘A Doctrine of Precedent?’ in Muchlinski, Ortino and Schreuer (n 354) 1188; Mohamed Shahabuddeen, Precedent in the World Court (CUP 1996); Jeffery P Commission, ‘Precedent in Investment Treaty Arbitration: The Empirical Backing’ (2007) 4(5) TDM; Emmanuel Gaillard and Yas Banifatemi (eds), Precedent in International Arbitration (Juris 2008); Thomas W Wälde, ‘Confidential Awards as Precedent in Arbitration: Dynamics and Implication of Award Publication’ in Gaillard and Banifatemi, ibid, 113; Fauchald (n 423) 333–339; Judith Gill, ‘Is There a Special Role for Precedent in Investment Arbitration?’ (2010) 25 ICSID Rev 87 ff; Eric De Brabandere, ‘Arbitral Decisions as a Source of International Investment Law’ in Gazzini and De Brabandere (n 4) 245 ff; Christoph Schreuer, ‘The Development of International Law by ICSID Tribunals’ (2016) 31 ICSID Rev 728, 736–739; Patrick M Norton, ‘The Role of Precedent in the Development of International Investment Law’ (2018) 33 ICSID Rev 280; Richard C Chen, ‘Precedent and Dialogue in Investment Treaty Arbitration’ (2019) 60 Harvard ILJ 47. 426 See eg SGS v Philippines, Decision on Jurisdiction (29 January 2004) paras 97, 128, 134; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 216–226; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 75, 76. See also Susan D Franck, ‘The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law Through Inconsistent Decisions’ (2005) 73 Fordham LR 1521. 427 Gas Natural v Argentina, Decision on Jurisdiction (17 June 2005) para 36. 428 Enron v Argentina, Decision on Jurisdiction (Ancillary Claim) (2 August 2004) para 25 (cited in AES v Argentina, Decision on Jurisdiction (26 April 2005) para 23). See also LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 352; Amco v Indonesia, Decision on Annulment (16 May 1986) para 44. 429 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 352; Amco v Indonesia, Decision on Annulment (16 May 1986) para 44; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) para 39; Suez and others v Argentina, Decision on Jurisdiction (16 May 2006) paras 26, 31,

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jurisprudence constante’ first used by the Tribunal in SGS v Philippines430 was espoused by the Tribunal in AES v Argentina. It spoke of the ICSID de facto case law as the contribution ‘to the development of a common legal opinion or jurisprudence constante, to resolve some difficult legal issues discussed in many cases, inasmuch as these issues share the same substantial features.’431 In Gas Natural v Argentina, the Tribunal took an unusually cautious attitude towards ‘precedents.’ It first gave its Decision on Jurisdiction ‘independently, without considering itself bound by any other judgments or arbitral awards.’ Only after having reached a result, the Tribunal added that it would be useful to compare its conclusions with the conclusions reached in other ICSID arbitrations.432 In ADC v Hungary, the Tribunal summarized the practice of ICSID tribunals by stating that ‘cautious reliance on certain principles developed in a number of those cases, as persuasive authority, may advance the body of law, which in turn may serve predictability in the interest of both investors and host States.’433 The Tribunal in Saipem v Bangladesh summarized the relevance of previous decisions as follows: The Tribunal considers that it is not bound by previous decisions. At the same time, it is of the opinion that it must pay due consideration to earlier decisions of international tribunals. It believes that, subject to compelling contrary grounds, it has a duty to adopt solutions established in a series of consistent cases. It also believes that, subject to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to the harmonious development of investment law and thereby to meet the legitimate expectations of the community of States and investors towards certainty of the rule of law.434

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Later tribunals followed this path and also justified the need to consider previously decided cases with a ‘fundamental principle of the rule of law that “like cases should be decided alike,” unless a strong reason exists to distinguish the current case from previous ones.’435 This illustrates that relying on, and engaging with, previous decisions serves not only practical aspects, such as helping to concretize the sometimes vague and open-ended provisions and principles contained both in investment treaties and in the ICSID Convention into more concrete rules. It also serves the desire to foster values like

430 431 432 433 434

435

60–65; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 63, 64; Azurix v Argentina, Award (14 July 2006) para 391; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) para 42. SGS v Philippines, Decision on Jurisdiction (29 January 2004) para 97. AES v Argentina, Decision on Jurisdiction (26 April 2005) para 33. Gas Natural v Argentina (n 427) paras 36, 52. ADC v Hungary, Award (2 October 2006) para 293. Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 67. See also Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 50; Churchill Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 85; Vestey v Venezuela, Award (15 April 2016) para 113. Daimler v Argentina, Award (22 August 2012) para 52 (referring to Suez and Vivendi v Argentina, Decision on Liability (30 July 2010) para 189).

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predictability, accuracy, and legitimacy of decisions, which may explain why the engagement with previous decisions has become a predominant feature of investment arbitration.436

e) Writings As would be expected, ICSID tribunals and ad hoc committees have also frequently relied on academic writings. Notably, with regard to the interpretation of the ICSID Convention, ICSID tribunals have relied frequently on earlier editions of this Commentary.437

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f ) Resolutions and Guidelines In addition to the classical sources of international law that are enumerated in Art. 38(1) of the ICJ Statute, ICSID tribunals have also had occasion to refer to resolutions of the General Assembly on questions of nationalization.438 During the drafting of the Convention, concern that the scarcity of well-established rules in the area of international investment law might cause difficulties led the French and British representatives to propose that at least a general code of conduct or guidelines for the investor and the host country should be laid down (History, Vol. II, pp. 418, 420). At the time of drafting, it did not appear possible to enter into the substance of investment law. However, in 1992, the World Bank adopted guidelines on the treatment of foreign direct investment.439 When looking at such guidelines and General Assembly resolutions, it must be borne in mind that they do not necessarily reflect ‘rules of international law’ in the sense of Art. 42(1). They may become part of the law applicable by virtue of their incorporation into an agreement on the choice of law under the first sentence of Art. 42(1) (see para. 74 supra), through a reference contained in a treaty, or because they reflect customary international law.

436 See Stephan W Schill, ‘Sources of International Investment Law: Multilateralization, Arbitral Precedent, Comparativism, Soft Law’ in Samantha Besson and Jean d’Aspremont (eds), The Oxford Handbook of the Sources of International Law (OUP 2017) 1095, 1103–1106; Chen (n 425) 57–62; Stephan W Schill, The Multilateralization of International Investment Law (CUP 2009) 321–357. 437 For a comprehensive survey of citations to scholarship, see Commission (n 423). See also Fauchald (n 423) 351–353; Tony Cole, ‘Non-Binding Documents and Literature’ in Gazzini and De Brabandere (n 4) 289, 304–306, 310–312; Sandesh Sivkuraman, ‘The Influence of Teachings of Publicists on the Development of International Law’ (2017) 66 ICLQ 1, 19, 27, 31–34; Niccolò Ridi and Thomas Schultz, ‘Empirically Mapping Investment Arbitration Scholarship: Networks, Authorities, and the Research Front’ in Katia Fach Gómez (ed), Private Actors in International Investment Law (Springer 2021) 209; Damien Charlotin, ‘Authorities’ in International Dispute Settlement: A Data Analysis (PhD thesis, University of Cambridge 2020). 438 Amco v Indonesia, Award (20 November 1984) para 188; LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 366; SPP v Egypt, Dissenting Opinion El Mahdi (20 May 1992) (1995) 3 ICSID Reports 249, 254–255. 439 World Bank, ‘Report to the Development Committee and Guidelines on the Treatment of Foreign Direct Investment’ (1992) 31 ILM 1363.

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F. ‘. . . as may be applicable.’

1. Applicability of International Law to Investment Disputes a) Reliance of Private Parties on International Law 261

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The Report of the Executive Directors in defining the term ‘international law’ refers to Art. 38(1) of the ICJ Statute, but adds that allowance would have to be made for the fact that Art. 38 was designed to apply to inter-State disputes (see para. 231 supra). The meaning of this qualification is by no means clear. It could mean that rules of international law would have to be appropriately adjusted to apply to relationships in which one party is not a State. For instance, rules of the Vienna Convention on the Law of Treaties might be adapted to apply to agreements between investors and host States. It could also mean that rules of international law, which by their nature are designed to apply between States, are not applicable between a State and a foreign investor. The latter view has prompted some authors to argue that the remedies of a private investor would arise solely from its contractual relationship with the host State and that the private party cannot invoke the principles of State responsibility.440 This view appears unfounded. Already in the course of the Convention’s drafting, it was repeatedly pointed out, especially by the Chairman Mr. Broches, that an investor before an ICSID tribunal would have rights identical to those of its government exercising diplomatic protection (History, Vol. II, pp. 259, 267, 400, 420). Elihu Lauterpacht has argued cogently that the waiver of diplomatic protection contained in Art. 27(1) makes it essential that the Convention provides a substitute for the consideration of the international law aspect, which is excluded by that provision.441 The purpose of the Convention, advancing the cause of investment, could not be achieved by withdrawing an important procedure for the investor’s protection, without having all legal issues decided by a single tribunal.442 In addition, the enforcement of awards under Art. 54 is only conceivable, if these are in conformity with international law.443 This line of reasoning was adopted by the ad hoc Committee in Amco v Indonesia, which found that the application of international law and its precedence over domestic law was suggested by an overall evaluation of the system established by the Convention. The law of the host State is, in principle, the law to be applied in resolving the dispute. At the same time, applicable norms of international law must be complied with since every ICSID award has to be recognized, and pecuniary obligations imposed by such award enforced, by every Contracting State of the Convention (Art. 54(1), Convention). Moreover, the national State of the investor is precluded from exercising its normal right of diplomatic protection during the pendency of the ICSID proceedings and even after such proceedings, in respect of a Contracting State which complies with the ICSID award (Art. 27, Convention). The thrust of Article 54(1) and of Article 27 of the Convention makes sense only under the supposition that the award involved is not violative of applicable principles and rules of international law.444

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Toope (n 249) 243 ff; Masood (n 110) 321; Douglas (n 256) 94 ff. Lauterpacht (n 264) 655–656. See also History, Vol II, 803. Lauterpacht (n 264) 660. 443 Giardina (n 102) 217–218. Amco v Indonesia, Decision on Annulment (16 May 1986) para 21.

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In a number of investment cases, the question arose whether private parties could invoke the principles of State responsibility, even though these principles primarily address responsibility between States. The International Law Commission (ILC) clarified, however, that its 2001 Articles on State Responsibility445 ‘apply to the whole field of the international obligations of States, whether the obligation is owed to one or several States, to an individual or group, or to the international community as a whole.’446 ICSID tribunals thus have had no difficulty in relying on State responsibility principles, especially those concerning the attribution of conduct to host States, or the preclusion of wrongfulness.447 In Azurix v Argentina, the Tribunal relied on customary international law principles as evidenced by the ILC Articles on State Responsibility in order to attribute acts of Argentine provinces to the Republic of Argentina. The Tribunal held:

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The responsibility of States for acts of its organs and political subdivisions is well accepted under international law. The Draft Articles . . . are the best evidence of such acceptance and as such have been often referred to by international arbitral tribunals in investor–State arbitration.448

The application of international law to the relationship between a State and a foreign investor is not limited to reliance of private parties on international law. It may also result from the invocation of international law by host States. The cases in which Argentina invoked the plea of necessity as a ground for precluding international wrongfulness provide examples of such a situation. Without explicitly discussing the question whether State responsibility principles were applicable to the relationship between a State and a foreign investor, the tribunals in CMS v Argentina,449 LG&E v Argentina,450 Enron v Argentina,451 Sempra v

445 ILC, ‘Draft Articles on Responsibility of States for Internationally Wrongful Acts’ (2001) in ‘Report of the International Law Commission on the Work of Its Fifty-third Session’ GAOR, 56th Sess, Supp No 10, UN Doc A/56/10, 26. 446 ibid 62. See also James Crawford, The International Law Commission’s Articles on State Responsibility (CUP 2002) 76. 447 CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 108; Tokios Tokelės v Ukraine, Decision on Jurisdiction (29 April 2004) para 102; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) para 89; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 148; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) para 190; Bosh v Ukraine, Award (25 October 2012) para 176; von Pezold and others v Zimbabwe, Award (28 July 2015) para 668; UAB v Latvia, Award (22 December 2017) paras 804–811; Unión Fenosa v Egypt, Award (31 August 2018) para 8.62. See also Kent and Harrington (n 382) 246 ff. 448 Azurix v Argentina, Award (14 July 2006) para 50. 449 CMS v Argentina, Award (12 May 2005) para 315 (stating that ‘[t]he Tribunal, like the parties themselves, considers that Article 25 of the Articles on State Responsibility adequately reflect[s] the state of customary international law on the question of necessity’). 450 LG&E v Argentina, Decision on Liability (3 October 2006) para 245 (stating that ‘the Tribunal recognizes that satisfaction of the state of necessity standard as it exists in international law (reflected in Article 25 of the ILC’s Draft Articles on State Responsibility) supports the Tribunal’s conclusion’). 451 Enron v Argentina, Award (22 May 2007) para 303 (stating that ‘[t]he Tribunal’s understanding of Article 25 of the Articles on State Responsibility, to the effect that it reflects the state of customary international law on the matter, is not different from the view of the parties in this respect. This is not to say that the Articles are a treaty or even a part of customary law themselves; it is simply the learned and systematic expression of the development of the law on state of necessity by decisions of courts and tribunals and other sources along a long period of time’).

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Argentina,452 and Total v Argentina453 implicitly gave affirmative answers by applying Art. 25 of the ILC Articles as an expression of general international law on state of necessity.

b) International Nature of Investment Disputes 267

The representatives of capital-importing countries put forward a somewhat different argument against the application of international law during the Convention’s drafting. They insisted that a foreign investor, by making the investment, submitted to the host State’s law, that the host State’s sovereignty required the exclusive application of its law, and that reliance on international law might actually contribute to the perpetuation of an unjust system (History, Vol. II, pp. 267, 501, 505, 513–514, 571, 801 ff., 804, 984). In turn, representatives of capital-exporting countries insisted on the necessity to retain international law as part of the applicable law (ibid., pp. 419, 421, 801, 803). At one point, representatives of capital-importing countries suggested that international law only be used in cases of alleged discrimination (ibid., p. 800), or in order to fill lacunae in the host State’s law (ibid., pp. 802–803). Eventually, a compromise was reached that preserved the applicability of international law, but yielded to demands of developing countries that the national law to be applied in the absence of agreement on the choice of law would be that of the host State454 (see paras. 196–198 supra). A vote taken under these auspices produced a majority of 24 to 6 in favor of retaining the formula which included international law (History, Vol. II, p. 804). A suggestion to limit the application of international law to cases where the domestic legislation of the host State was silent was defeated by 19 to 7 (ibid., p. 804).455

2. Which Rules of International Law Are Applicable? 268

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The acceptance of the applicability of international law, in principle, to disputes before ICSID tribunals does not answer the question as to the meaning of the qualifying phrase ‘as may be applicable.’ It might be inferred from these words that only some rules of international law are applicable, while others are not. There is no good reason to believe that the applicability of rules of international law might depend on their incorporation into, or adoption by, the host State’s domestic law. A suggestion in the course of the drafting of Art. 42(1) to make international law applicable only if the national law of the host country so provides did not prevail (History, Vol. II, p. 802). Unlike the domestic law of another country, which depends on the host State’s rules on the conflict of laws for its applicability (see paras. 224–229 supra), international law is independent of such domestic rules. This is clear from the wording of Art. 42(1). Whereas the ‘rules on the conflict of laws’ are linked to ‘the law

452 Sempra v Argentina, Award (28 September 2007) para 344 (stating that ‘[t]he Tribunal shares the parties’ understanding of Article 25 of the Articles on State Responsibility as reflecting the state of customary international law on the matter’). 453 Total v Argentina, Decision on Liability (27 December 2010) para 220 (stating that ‘Article 25 of the ILC Articles on State Responsibility is generally considered as having codified customary international law in the matter, as also accepted by both parties in this case’). 454 Broches, ‘Applicable Law and Default Procedure’ (n 299) 16. 455 For detailed accounts of the travaux préparatoires on this point, see Cherian (n 102) 78 ff; Masood (n 110) 313.

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of the Contracting State’ by the word ‘including,’ no such linkage exists for the ‘rules of international law.’ If the drafters had intended to make the applicability of international law dependent on the provisions of the host State’s law, they would have chosen words such as ‘and including such rules of international law as may be applicable,’ or ‘and such rules of international law as may be applicable by virtue of the rules of the law of the Contracting State.’456 Most ICSID tribunals, when applying rules of international law, have not investigated their status under the host State’s domestic law.457 However, some tribunals have noted that, in situations falling under Art. 42(1), second sentence, international law is applicable also by virtue of its incorporation into domestic law (see paras. 153–157 supra).458 The most plausible explanation for the words ‘as may be applicable’ can be found in the drafting history of Art. 42(1). The Working Paper, the Preliminary Draft, and the First Draft referred the tribunal to rules of national or (and) international law ‘as it shall determine to be applicable’ (History, Vol. I, pp. 190, 192). At that stage, the idea was to let the tribunal find the proper law by applying generally accepted principles of the conflict of laws. Eventually, the view prevailed that the national law to be applied should not be left to the determination of the tribunal, but should be the law of the host State (see paras. 196–198 supra). Therefore, the words concerning the determination of the applicable law were severed from the part of the sentence dealing with national law and were moved to the end of the paragraph. A look at the French version of the Convention confirms the impression that, in the course of drafting, this phrase lost its original meaning (History, Vol. I, pp. 190–192). The earlier drafts corresponded to their English counterpart by directing the tribunal to apply ‘règles de droit international ou (et) national, qu’il considère applicables.’ Since the insertion of the rule on the applicability of the host State’s law, the formula ‘as may be applicable’ is rendered in the French version by the words ‘en la matière,’ which is probably best translated as ‘on the subject.’ It follows that this phrase is not designed to limit the rules of international law by declaring some of them inapplicable. It simply means that the relevant rules of international law are to be applied.459 This interpretation is corroborated by the defeat of attempts during the Convention’s drafting to limit the applicability of international law (see para. 267 supra). The Tribunal in LG&E v Argentina expressly endorsed this interpretation. It rejected the idea that the words ‘as may be applicable’ would require further conditions for the application of international law. Instead, it shared the view that the wording meant that the rules of international law relevant in the context of the case were to be applied. The Tribunal held: With reference to the rules of international law and, particularly, to the language ‘as may be applicable,’ found in Article 42(1) of the ICSID Convention, the Tribunal holds the view that it should not be understood as if it were in some way conditioning 456 Broches, ‘The Convention’ (n 131) 391–392; Firth (n 92) 274; Lauterpacht (n 264) 660. 457 See, however, AAPL v Sri Lanka, Dissenting Opinion Asante (15 June 1990) (1997) 4 ICSID Reports 296, 299, which emphasizes the applicability of international law by virtue of its incorporation into Sri Lankan law. 458 Wena Hotels v Egypt, Decision on Annulment (5 February 2002) para 42; LG&E v Argentina, Decision on Liability (3 October 2006) paras 90–91. 459 Giardina (n 97) 692–693.

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3. The Relationship of International Law to Domestic Law 273

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The relationship of international law to the host State’s domestic law has turned out to be the most complex question in the application of the second sentence of Art. 42(1).461 The Working Paper and the Preliminary Draft had provided for the application of ‘rules of law, whether national or international’ (see History, Vol. I, pp. 190, 192, emphasis added). The word ‘or,’ which had indicated two mutually exclusive alternatives, was replaced by the more neutral ‘and’ in the First Draft (ibid., Vol. I, p. 192; Vol. II, p. 421). An attempt to restrict the applicability of international law to filling gaps in the host State’s law was defeated (History, Vol. II, pp. 802–804; see also para. 267 supra). Although some mention was made of a principle of priority for domestic law, which was to be ‘of primary importance’ and would be applied ‘in the first place’ (History, Vol. II, pp. 571, 800, 984), a suggestion to insert the word ‘first’ into the text was not adopted (ibid., p. 804). It was made clear that international law would prevail where the host State’s domestic law violated international law, for instance, through a subsequent change of its own law to the detriment of the investor (ibid., pp. 570–571, 985). The Chairman’s explanation of the vote, which retained the reference to international law, pointed out that international law would come into play both in the case of a lacuna in domestic law and in the case of any inconsistency between the two (ibid., p. 804; see also para. 267 supra). Asked whether the validity of the host State’s law could be questioned before an ICSID tribunal, Mr. Broches answered that the validity of national laws would not be at issue, but that a valid law of the host State might give rise to international responsibility (History, Vol. II, p. 986). The formula of the supplemental and corrective effect of international law used to be widely accepted. Most commentators writing on this aspect of Art. 42(1) agreed that the function of international law was to close any gaps in domestic law as well as to remedy any violations of international law that may arise through the application of host State law.462

460 LG&E v Argentina, Decision on Liability (3 October 2006) para 88 (footnotes omitted) (citing the First Edition of this Commentary). 461 Di Pietro (n 90) 250. 462 In this sense, Broches, ‘The Convention’ (n 131) 392; Delaume, Transnational Contracts (n 92) 68 ff; Feuerle (n 113) 118–119; Giardina (n 102) 217; Goldman (n 1) 151; Hirsch (n 1) 134, 140–141; Günther Jaenicke, ‘The Prospects for International Arbitration: Disputes between States and Private Enterprises’ in Alfred HA Soons (ed), International Arbitration: Past and Prospects (Martinus Nijhoff 1990) 155, 159; Kahn (n 83) 27, 28; Lauterpacht (n 264) 660; Sacerdoti (n 224) 23; Schreuer (n 43) 156; Antonio R Parra, ‘Applicable Law in Investor–State Arbitration’ (2009) 6(1) TDM 6. For slightly different conceptualizations of the relationship between domestic and international law, see Mauro RubinoSammartano, International Arbitration Law (Kluwer 1990) 55; Chukwumerije (n 170) 82 ff; Elombi (n 170) 66 ff; Virtus C Igbokwe, ‘Developing Countries and the Law Applicable to International Arbitration’ (1997) 14 J Int’l Arb 99, 114 ff; Nassar (n 249) 202 ff; Douglas (n 256) 130–133; Kjos (n 246) 211, 224 ff.

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a) Parallel Application of International and Domestic Law ICSID tribunals, especially in earlier decisions in disputes arising out of investment contracts, frequently looked at domestic law and international law side by side, without any deeper analysis of their relationship. In a number of cases, the tribunals were content simply to state in general terms that there was an identity of rules or that the host State’s domestic law was in conformity with international law. Such an approach could in principle also have been adopted in cases based on investment treaties. However, tribunals in general have moved away from the approach of parallel application to an autonomous application of both legal systems (paras. 310–322 infra). In Gardella v Côte d’Ivoire, the dispute turned on reciprocal claims for breach of a joint venture agreement. The Tribunal said:

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Both parties admit that their agreement is governed by the law of the Ivory Coast. Gardella has pleaded, it is true, that the law of the Ivory Coast ought to apply, in this case, within the framework and in the context of public international law. However, Gardella has not drawn any other conclusion from that argument than that it is necessary to have regard to the rule ‘pacta sunt servanda’ and to the principle of good faith, principles which are equally recognized by the law of the Ivory Coast as well as by French law.463

In Benvenuti & Bonfant v Congo, the Tribunal applied Congolese law and international law in accordance with the second sentence of Art. 42(1) (see para. 191 supra), but was also authorized to rule ex aequo et bono in accordance with Art. 42(3) (see para. 338 infra). The Tribunal determined that the Government had seized the Claimant’s assets and therefore had to be ordered to pay damages. On the law applicable, the Tribunal was rather terse:

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This principle of compensation in case of nationalization is in accordance with the Congolese Constitution and constitutes one of the generally recognized principles of international law as well as of equity.464

In Klöckner v Cameroon, the Tribunal after examining the law of the host State on the exceptio non adimpleti contractus simply added that international law reaches similar conclusions465 (see para. 228 supra). In Amco v Indonesia, the first Tribunal found that, in the absence of an agreement on the choice of law between the parties, it had to apply Indonesian law and international law (see para. 202 supra). It added that both parties had left no doubt that they believed both Indonesian law and international law to be applicable by constantly referring to both legal systems in their pleadings and oral arguments.466 The Tribunal proceeded to examine a number of legal questions from the perspectives of Indonesian law and international law, finding in each case that both systems led to identical solutions. Thus, it held that, under both legal systems, there was a right of the State to nationalize private property in the public interest coupled with a duty to compensate the previous

463 464 465 466

Gardella v Côte d’Ivoire, Award (29 August 1977) para 4.3. Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.64. Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 63. Amco v Indonesia, Award (20 November 1984) para 148.

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owner.467 The Tribunal held the modalities of the revocation of the investment authorization to be contrary to Indonesian regulations as well as to the ‘general and fundamental principle of due process.’468 On the substance of Indonesia’s liability for the withdrawal of the investment authorization, the Tribunal went into a detailed examination of Indonesian as well as international law, both of which established that the Respondent had acted illegally and was liable to pay damages.469 In discussing the legal basis for its calculation of damages, the Tribunal, once again, found that there was a concordance between Indonesian and international law.470 The investor’s right to full and effective compensation required the repatriation of the money awarded in US Dollars also under Indonesian law.471 Finally, in determining the date for the commencement of interest, the Tribunal decided that Indonesian and international law required that interest must run from the date of the Request for Arbitration.472 These instances of a parallel application of domestic and international law, coupled with assurances of their harmony, do not provide much useful information on the interaction of the two legal systems. It is obvious that the Tribunals did not draw upon international law in its supplemental function, since there were no gaps in the domestic law that needed to be filled. It is arguable that an attempt was made to employ international law in its corrective function. Under this reading, the Tribunals made sure that the solutions offered by domestic law did not violate international law. However, the way in which the legal arguments are presented in these cases does not support the assumption that domestic law was checked against international law for compliance. Rather, each legal position was adopted after being established separately under national and international law. Such a parallel application may seem reasonable where compliance with mandatory standards of international law is at stake. It is much less convincing where the rules of international law derive from general principles of law. If a clear rule is offered by the host State’s domestic law, a comparative search for general principles is of doubtful value. It will be difficult to argue that there is a general principle of law which is at variance with the host State’s law. Moreover, general principles of law do not necessarily set mandatory minimum standards that must be complied with. The Decision on Annulment in Amco v Indonesia contains a brief hint that the ad hoc Committee was aware of this aspect. It approved the way in which the Tribunal had substantiated Indonesia’s obligation under Indonesian law to pay damages in US Dollars outside Indonesia and converted as of the day on which the damage occurred (see para. 279 supra). However, it added that ‘[t]he Tribunal’s amplification concerning international law on this issue appears obiter to the ad hoc Committee.’473 In Mobil Oil v New Zealand, the Tribunal found it unnecessary to deal with ‘the difficult questions of international law,’ since it found in favor of Mobil on the basis of New Zealand law.474 Considerations of this kind may have been on the minds of the Tribunal in SOABI v Senegal. After citing Art. 42(1), the Tribunal determined that there was no agreement on 467 469 471 473 474

ibid para 188. 468 ibid para 201. ibid paras 245–250. 470 ibid paras 265–268. ibid para 280. 472 ibid para 281. Amco v Indonesia, Decision on Annulment (16 May 1986) para 118. Mobil Oil v New Zealand, Findings on Liability, Interpretation and Allied Issues (4 May 1989) (1997) 4 ICSID Reports 140, 196–197. See also ibid 166, 210.

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the choice of law between the parties and concluded that, under the prevailing circumstances, the applicable law could only be Senegalese law475 (see paras. 203, 204 supra). It proceeded to examine the legal questions surrounding the Government’s unilateral termination of the contract purely from the perspective of the host State’s law. On this basis, it found in favor of the investor and awarded compensation.476 It is possible that the Tribunal examined the results reached on the basis of domestic law for compliance with international law, but found it unnecessary to say so. More probably, the lack of any reference to international law was caused by a failure of the parties to plead it before the Tribunal.

b) Supplemental and Corrective Function of International Law Starting with the ad hoc Committee’s decision in Klöckner v Cameroon, a more careful discussion of the interaction of international and national law can be observed. The Tribunal had based part of its Award on a somewhat broadly defined principle, which it sought to base on French law, as well as on other national codes (see paras. 37, 211, 249, 278 supra). The ad hoc Committee confirmed the supplemental and corrective functions of international law, while emphasizing that an award may not be based on international law alone:

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Article 42 of the Washington Convention certainly provides that ‘in the absence of agreement between parties, the Tribunal shall apply the law of the Contracting State party to the dispute . . . and such principles of international law as may be applicable’. This gives these principles (perhaps omitting cases in which it should be ascertained whether the domestic law conforms to international law) a dual role, that is, complementary (in the case of a ‘lacuna’ in the law of the State), or corrective, should the State’s law not conform on all points to the principles of international law. In both cases, the arbitrators may have recourse to the ‘principles of international law’ only after having inquired into and established the content of the law of the State party to the dispute (which cannot be reduced to one principle, even a basic one) and after having applied the relevant rules of the State’s law. Article 42(1) therefore clearly does not allow the arbitrator to base his decision solely on the ‘rules’ or ‘principles of international law.’477

The Award in LETCO v Liberia determined that the parties had, by their reference to Liberian legislation in the Concession Agreement, chosen the law of Liberia as the governing law (see para. 99 supra). In response to the Claimant’s argument that no express choice of law had been made and that, therefore, the second sentence of Art. 42(1) applied, the Tribunal said: This provision of the ICSID Convention envisages that, in the absence of any express choice of law by the parties, the Tribunal must apply a system of concurrent law. The law of the Contracting State is recognized as paramount within its own territory, but is

475 SOABI v Senegal, Award (25 February 1988) para 5.01. 476 ibid paras 5.01 ff. 477 Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 69 (emphases in the original). The original decision was rendered in French. The reference to ‘principles of international law,’ rather than ‘rules of international law,’ is explained by a discrepancy between the French and English texts of Art. 42(1). See paras 230–231 supra.

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schreuer’s commentary on the icsid convention nevertheless subjected to control by international law. The role of international law as a ‘regulator’ of national systems of law has been much discussed, with particular emphasis being focused on the problems likely to arise if there is divergence on a particular point between national and international law. No such problem arises in the present case; the Tribunal is satisfied that the rules and principles of Liberian law which it has taken into account are in conformity with generally accepted principles of public international law governing the validity of contracts and the remedies for their breach.478

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In view of the prior finding that there had been an agreed choice of law, the LETCO tribunal’s observations on the interpretation of the second sentence of Art. 42(1) are obiter. It is still worth noting that the Tribunal examined the merits of the case on the basis of national as well as international law (see para. 160 supra). The ad hoc Committee in Amco v Indonesia approved of the Tribunal’s use of Art. 42479 (see para. 279 supra). It reiterated the formula of the supplemental and corrective function of international law: It seems to the ad hoc Committee worth noting that Article 42(1) of the Convention authorizes an ICSID tribunal to apply rules of international law only to fill up lacunae in the applicable domestic law and to ensure precedence to international law norms where the rules of the applicable domestic law are in collision with such norms.480

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It found that this relationship of international law vis-à-vis the law of the host State was suggested by an overall evaluation of the Convention’s system, notably by Arts. 27 and 54(1)481 (see para. 263 supra). The second Tribunal in the resubmitted case of Amco v Indonesia noted the positions of the first Tribunal and of the ad hoc Committee (see paras. 279, 286 supra). It also observed that Indonesia had advanced legal arguments on each of the issues under, first, the heading of Indonesian law and, second, the heading of international law. Nevertheless, counsel for Indonesia had explained that international law was only relevant, if there was a lacuna in the law of the host State, or if the law of the host State was incompatible with international law, in which case the latter would prevail. Amco submitted no contrary arguments. The Tribunal said: This Tribunal notes that Article 42(1) refers to the application of host-state law and international law. If there are no relevant host-state laws on a particular matter, a search must be made for the relevant international laws. And, where there are applicable hoststate laws, they must be checked against international laws, which will prevail in case of conflict. Thus international law is fully applicable and to classify its role as ‘only’ ‘supplemental and corrective’ seems a distinction without a difference. In any event, the Tribunal believes that its task is to test every claim of law in this case first against Indonesian law, and then against international law.482

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The Tribunal proceeded to examine the substantive questions before it in accordance with this method. On the point of the revocation of Amco’s license, the Tribunal first 478 479 480 482

LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 358–359. Amco v Indonesia, Decision on Annulment (16 May 1986) para 19. ibid para 20. 481 ibid. Amco v Indonesia, Resubmitted Case: Award (5 June 1990) para 40.

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looked into Indonesian law, concluding that it did not clearly stipulate whether a procedurally unlawful act per se generates compensation, or whether a decision tainted by bad faith is necessarily unlawful.483 It then turned to international law, finding that there the decisive criterion was the existence of a denial of justice. It concluded that the circumstances surrounding the revocation of the license constituted a denial of justice, making the decision unlawful irrespective of certain substantive grounds that may have existed for it.484 The procedure employed by the Tribunal to establish principles of compensation and the method of valuation was similar. It found that non-speculative lost profits were recoverable under both legal systems.485 As to valuation, it found the discounted cash flow method appropriate. This method was supported by international authority, but neither prescribed nor prohibited in Indonesian law. It concluded: ‘The Tribunal finds it a method that is entirely consistent with Indonesian law and international law.’486 In SPP v Egypt, the Tribunal refused to decide whether an agreed choice of law had taken place, finding that, either way, Egyptian and international law would have to be applied (see paras. 100–102 supra). It found that, if municipal law contained a lacuna, or if international law was violated by the exclusive application of municipal law, the Tribunal was bound to apply international law directly. It proceeded to apply international law in addition to national law in a variety of contexts (see paras. 161–163 supra). The Tribunal’s findings on interest offer some interesting insights concerning the interaction of national and international law. On the rate of interest, it held that the determination must be made according to Egyptian law, because there was no rule of international law that would fix the rate or proscribe the limitation imposed by Egyptian law.487 On the other hand, the Tribunal observed that Egyptian law lacked any provision concerning the date from which interest would run for compensation arising out of an act of expropriation. In the face of this gap in the host State’s law, the Tribunal turned to international law, which it found to offer a rule providing for interest from the date on which the dispossession effectively took place.488 AGIP v Congo was not decided under the second sentence of Art. 42(1), but the choice of law clause agreed to by the parties resembles the residual rule of Art. 42(1) in that it provided for the application of the law of the host State ‘supplemented if need be by any principles of international law’ (see para. 64 supra). The Tribunal came to the conclusion that the Congolese ordinance which had nationalized the Claimant’s property was illegal even under Congolese law. However, it left no doubt that the claim would have been upheld under international law, even if no illegality under Congolese law had been found to exist.489 The ‘supplementation’ of the host State’s law by international law clearly led to its correction (see paras. 149, 150, 176 supra). In Tradex v Albania, the Tribunal found that it had jurisdiction on the basis of the Albanian Law on Foreign Investment of 1993 (see Art. 25, paras. 783–784). The Tribunal held that the 1993 Law was determinative also of the merits of the case to

483 485 487 488 489

ibid para 121. 484 ibid paras 136–139. ibid paras 171–178. 486 ibid para 197. SPP v Egypt, Award (20 May 1992) para 222. See also Delaume, ‘L’affaire’ (n 43) 57. SPP v Egypt, Award (20 May 1992) paras 232–234. See also Delaume, ‘L’affaire’ (n 43) 60. AGIP v Congo, Award (30 November 1979) paras 79–88.

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the exclusion of other sources including international law.490 However, the Tribunal added that in applying the second sentence of Art. 42(1) it would use and take guidance from sources of international law for the interpretation of the term ‘expropriation’ used in the 1993 Law491 (see also Art. 25, para. 961). In Santa Elena v Costa Rica, the Tribunal found that the parties had not reached a clear and unequivocal agreement that their dispute would be decided solely in accordance with international law (see para. 46 supra). Therefore, it had to rely on the second sentence of Art. 42(1). After stating that the relevant rules and principles of Costa Rican law were generally consistent with international law, it added that in case of any inconsistency public international law would have to prevail. This led the Tribunal to the conclusion that international law was controlling.492 Somewhat surprisingly, it held that ‘[t]he Tribunal is satisfied that, under the second sentence of Art. 42(1), the arbitration is governed by international law.’493 It proceeded by applying the appropriate rules of international law. The Award in Wena Hotels v Egypt provides another example of the ‘corrective’ function of international law. The Tribunal first determined that, pursuant to Art. 42(1), it had to apply both Egyptian law and international law. The host State had argued that one of the investor’s claims was time-barred on the basis of Egyptian legislation. The Tribunal refused to apply the domestic law statute of limitations, because it considered it to be contrary to international law. The Tribunal held that: strict application of [the] three-year limit, even if applicable, would collide with the general, well-established international principle recognized since before the Gentini case: that municipal statutes of limitation do not bind claims before an international tribunal . . .494

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The Tribunal in Autopista v Venezuela again stressed the ‘corrective and supplemental functions of international law.’ In finding that there was no choice of law by the parties, the Tribunal held that it had to rely upon Art. 42(1), second sentence, ICSID Convention: The role of international law in ICSID practice is not entirely clear. It is certainly well settled that international law may fill lacunae when national law lacks rules on certain issues (so called complementary function). It is also established that it may correct the result of the application of national law when the latter violates international law (corrective function). . . . Whatever the extent of the role that international law plays under Article 42(1) (second sentence), this Tribunal believes that there is no reason in this case, considering especially that it is a contract and not a treaty arbitration, to go beyond the corrective and supplemental functions of international law.495

490 491 492 493 494

Tradex v Albania, Award (29 April 1999) paras 68–69. ibid paras 69, 135–136. Santa Elena v Costa Rica, Award (17 February 2000) paras 28, 35, 37, 40, 60–68. ibid para 65. Wena Hotels v Egypt, Award (8 December 2000) para 107. To the same effect Maffezini v Spain, Award (13 November 2000) paras 92, 93. 495 Autopista v Venezuela, Award (23 September 2003) para 102 (citing the First Edition of this Commentary).

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On this basis, the Tribunal held that the dispute must be resolved by Venezuelan law. However, it added that ‘international law prevails over conflicting national rules.’496 In LG&E v Argentina, the Tribunal found that submission to the BIT was not sufficient to indicate an implicit agreement on the choice of law (see para. 134 supra). The Tribunal was explicit about the superiority of international law under the second sentence of Art. 42(1):

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International law overrides domestic law when there is a contradiction since a State cannot justify non-compliance of its international obligations by asserting the provisions of its domestic law.497

The Tribunal in MCI v Ecuador reached a similar outcome. After finding that the parties had not even implicitly agreed on the applicable law, the Tribunal resorted to Art. 42(1), second sentence, and concluded:

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In the event of possible contradictions between the rules of Ecuadorian law and the BIT and other applicable rules of general international law, the Tribunal will decide on their compatibility, bearing in mind the contents and purpose of those rules in light of the precedence that international rules take over the domestic legislation of a State.498

The Tribunal in Goetz v Burundi summarized the practice of tribunals, and the discussion surrounding it, in the following terms:

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In the previous case law the problem of the links between the various applicable sources of international law is posed in the context of the second sentence of Article 42, first paragraph, of the ICSID Convention, and it has received divergent responses, abundantly commented on in academic writings: hierarchal relationships according to some, domestic law applying first of all but being overborne where it contradicts international law; according to others, relationships based on subsidiarity, with international law being called upon only to fill lacunae or to settle uncertainties in national law; according to others again, complementary relationships, with domestic law and international law each having its own sphere of application.499

The ad hoc Committee in Wena Hotels v Egypt gave a broad overview of the past practice of ICSID tribunals in the following terms: 38. This discussion brings into light the various views expressed as to the role of international law in the context of Article 42(1). Scholarly opinion, authoritative writings and some ICSID decisions have dealt with this matter. Some views have argued for a broad role of international law, including not only the rules embodied in treaties but also the rather large definition of sources contained in Article 38(1) of the Statute of the International Court of Justice. Other views have expressed that international law is called in to supplement the applicable domestic law in case of the existence of lacunae. In Klöckner I the ad hoc Committee introduced the concept of international law as complementary to the applicable law in case of lacunae and as corrective in case that the applicable domestic law would not conform on all points to

496 497 498 499

ibid para 105. See also ibid para 207. LG&E v Argentina, Decision on Liability (3 October 2006) para 94. MCI v Ecuador, Award (31 July 2007) para 218. Goetz v Burundi, Award (10 February 1999) para 97.

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schreuer’s commentary on the icsid convention the principles of international law. There is also the view that international law has a controlling function of domestic applicable law to the extent that there is a collision between such law and fundamental norms of international law embodied in the concept of jus cogens. 39. Some of these views have in common the fact that they are aimed at restricting the role of international law and highlighting that of the law of the host State. Conversely, the view that calls for a broad application of international law aims at restricting the role of the law of the host State. There seems not to be a single answer as to which of these approaches is the correct one. The circumstances of each case may justify one or another solution.500

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Although the parties chose the application of domestic law in an investment contract, the Tribunal in Caratube and Hourani v Kazakhstan (referencing to the Second Edition of this Commentary) found that it could not disregard, but must take into account, international law, in particular mandatory rules of international law: In accordance with Clause 26.1 of the Contract, this Tribunal will apply Kazakh law to the merits of the dispute as the law chosen by the Parties. However, in doing so, it will afford a supplemental and corrective function to international law, supplementing and informing the Parties’ choice of law by the application of relevant international law rules.501

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In light of these considerations, the Tribunal found that it may apply customary international law.502 The main points emerging from the practice, as outlined above, may be summarized as follows:503 1. A tribunal applying the second sentence of Art. 42(1) may not restrict itself to applying either the host State’s law or international law, but must examine the legal questions at issue under both systems. 2. A decision which can be based on the host State’s domestic law need not be sustained by reference to general principles of law. 3. A tribunal may give a decision based on the host State’s domestic law, even if it finds no positive support in international law, as long as it is not prohibited by any rule of international law. 4. A tribunal may not render a decision on the basis of the host State’s domestic law, which is in violation of a mandatory rule of international law. 5. A claim that cannot be sustained on the basis of the host State’s domestic law must be upheld if it has an independent basis in international law. The complex relationship between national and international law under Art. 42(1), second sentence, has given rise to a range of different interpretations among legal scholars. While most writers seem to adhere to the ‘supplemental and corrective

500 Wena Hotels v Egypt, Decision on Annulment (5 February 2002) paras 38–39 (footnotes omitted; emphases in the original). 501 Caratube and Hourani v Kazakhstan, Award (27 September 2017) para 290. 502 ibid para 294. 503 See also Emmanuel Gaillard, ‘Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1991) 118 JDI 165, 182–183.

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function’ approach, some have called for an entirely autonomous application of international law. Even those scholars who follow the dominant view of a ‘supplemental and corrective function of international law’ come to markedly divergent results, depending on whether they emphasize the importance of domestic or of international law. W. Michael Reisman would limit the relevance of international law by asserting that the corrective function would only apply in the case of ‘international jus cogens.’504 Specifically referring to Art. 53 of the Vienna Convention on the Law of Treaties, Reisman proposes that ‘the test, then, is not inconsistency, but whether applying the Contracting State’s law would constitute a violation of something fundamental to international law.’505 In contrast, Prosper Weil stressed the importance of international law.506 He rejects the ‘complex and multifaceted’ theories about the relationship between domestic and international law under Art. 42(1), second sentence, as ‘futile,’ arguing that ‘under the second sentence of Article 42(1), international law always gains the upper hand and ultimately prevails.’507 According to his theory, international law would either prevail ‘indirectly’ through the application of domestic law where the latter is deemed consistent with international law or incorporates it, or ‘directly’ where domestic law is deemed deficient or contrary to international law.508 From this point of view, the reference to the domestic law of the host State ‘is indeed a pointless exercise, the sole raison d’être of which is to avoid offending the sensibilities of the host State.’509 Weil’s theory is based mainly upon the pronouncements of the second tribunal in the resubmitted case of Amco v Indonesia, which had noted that ‘international law is fully applicable and to classify its role as “only” “supplemental and corrective” seems a distinction without a difference.’510 Börnsen, as well as Kjos, point out the complementary function of national and international law in the field of international investment protection.511 Douglas suggested an approach to adopt the ‘proper law of the issue,’ which is supported by Sasson.512

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c) Autonomous Application of Both Legal Systems The ad hoc Committee in Wena Hotels v Egypt, after giving a broad overview of practice (see para. 294 supra), made the following statement on the relationship of host State law and international law: 39. . . . the use of the word ‘may’ in the second sentence of this provision [Art. 42(1)] indicates that the Convention does not draw a sharp line for the distinction of the respective scope of international and of domestic law and, correspondingly, that this has the effect to confer on to the Tribunal a certain margin and power for interpretation.

504 Reisman (n 44) 374 ff. 505 ibid 375. 506 Prosper Weil, ‘The State, the Foreign Investor, and International Law: The No Longer Stormy Relationship of a Ménage à Trois’ (2000) 15 ICSID Rev 401, 401 ff. 507 ibid 409. 508 ibid. 509 ibid. 510 Amco v Indonesia, Resubmitted Case: Award (5 June 1990) para 40. 511 Börnsen (n 123) 274; Kjos (n 246) 271 ff. 512 Douglas (n 256) 39 ff; Sasson (n 36) 72–73.

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schreuer’s commentary on the icsid convention 40. What is clear is that the sense and meaning of the negotiations leading to the second sentence of Article 42(1) allowed for both legal orders to have a role. The law of the host State can indeed be applied in conjunction with international law if this is justified. So too international law can be applied by itself if the appropriate rule is found in this other ambit.513

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The broad statement that ‘international law can be applied by itself if the appropriate rule is found in this other ambit’514 has given rise to an alternative interpretation of the role of international law. The theory of the supplemental and corrective functions of international law has been criticized as a misinterpretation of the clear and unambiguous wording of Art. 42(1), second sentence, triggered by the Klöckner and Amco ad hoc Committees.515 According to Emmanuel Gaillard and Yas Banifatemi, neither the wording, nor the drafting history of the ICSID Convention supports the view that international law would come into play only in cases of lacunae or inconsistency.516 Instead, they argue that ICSID tribunals ‘may also apply international law as a body of substantive rules in order to resolve the dispute or a particular issue.’517 Based on the decision of the ad hoc Committee in Wena Hotels v Egypt, they argue that ‘each ICSID tribunal should have discretion to decide whether any rules of international law are directly applicable, without any requirement of initial scrutiny into the law of the host State.’518 In their view, this approach ‘is consistent with both the text of Article 42(1) – “and” should only mean “and” – and its object and purpose.’519 The Tribunal in LG&E v Argentina expressly endorsed this view and held: It is this Tribunal’s opinion that ‘and’ means ‘and,’ so that the rules of international law, especially those included in the ICSID Convention and in the Bilateral Treaty, as well as those of domestic law are to be applied. In the Wena Hotels Limited v. Arab Republic of Egypt case, the Tribunal affirmed that ‘and means and,’ but accepted the supremacy of international law.520

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ICSID tribunals are increasingly turning to a simultaneous application of international law and domestic law. In cases falling under the residual rule of Art. 42(1), second sentence, they will apply domestic law to some aspects of disputes and rules of international law to other aspects. Tribunals, like the one in CMS v Argentina, have called for a ‘more pragmatic and less doctrinaire approach.’521 The dispute arose from the unilateral suspension and later abrogation of various tariff stipulations under a long-term license for the transport of gas. Since there was no express choice of law, and since the BIT did not contain a provision on applicable law, the Tribunal had to revert to Art. 42(1), second

513 Wena Hotels v Egypt, Decision on Annulment (5 February 2002) paras 39, 40. 514 This passage was quoted with approval in Siemens v Argentina, Award (6 February 2007) para 77. 515 For a curious revival of the theory of the supplemental and corrective function of international law, see WalAm Energy v Kenya, Award (10 July 2020) para 349. 516 Emmanuel Gaillard and Yas Banifatemi, ‘The Meaning of “and” in Article 42(1), Second Sentence, of the Washington Convention: The Role of International Law in the ICSID Choice of Law Process’ (2003) 18 ICSID Rev 375, 382 ff. 517 ibid 399. 518 ibid 409. 519 ibid. 520 LG&E v Argentina, Decision on Liability (3 October 2006) para 96. 521 CMS v Argentina, Award (12 May 2005) para 116.

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sentence.522 It noted that both parties had invoked both national and international law rules.523 It concluded that it would apply the Argentine Constitution, Civil Code, gas legislation and regulations, as well as Argentina’s emergency law, while it would ‘also apply’ the BIT and customary international law ‘in reaching the pertinent conclusions.’524 In justifying this ‘à la carte’ approach, the CMS tribunal expressly relied upon the decision of the ad hoc Committee in Wena Hotels v Egypt.525 The Tribunal held:

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116. More recently, however, a more pragmatic and less doctrinaire approach has emerged, allowing for the application of both domestic law and international law if the specific facts of the dispute so justifies [sic]. It is no longer the case of one prevailing over the other and excluding it altogether. Rather, both sources have a role to play. . . . 117. This is the approach this Tribunal considers justified when taking the facts of the case and the arguments of the parties into account. Indeed, there is here a close interaction between the legislation and the regulations governing the gas privatization, the License and international law, as embodied both in the Treaty and in customary international law. All of these rules are inseparable and will, to the extent justified, be applied by the Tribunal.526

Other ICSID tribunals have also followed a more pragmatic, fact-specific approach in determining the applicable law and, in particular, the relationship between international and domestic law.527 Again, relying upon the ad hoc Committee’s decision in Wena Hotels v Egypt,528 the Tribunal in Azurix v Argentina said: 66. Article 42(1) has been the subject of controversy on the respective roles of municipal law and international law. It is clear from the second sentence of Article 42(1) that both legal orders have a role to play, which role will depend on the nature of the dispute and may vary depending on which element of the dispute is considered. The Annulment Committee in Wena v. Egypt considered that ‘The law of the host State can indeed be applied in conjunction with international law if this is justified. So too international law can be applied by itself if the appropriate rule is found in this other ambit.’ 67. Azurix’s claim has been advanced under the BIT and, as stated by the Annulment Committee in Vivendi II, the Tribunal’s inquiry is governed by the ICSID Convention, by the BIT and by applicable international law. While the Tribunal’s inquiry will be guided by this statement, this does not mean that the law of Argentina should be disregarded. On the contrary, the law of Argentina should be helpful in the carrying out of the Tribunal’s inquiry into the alleged breaches of the Concession Agreement to

522 524 525 526 527

ibid para 108. 523 ibid para 118. ibid para 122. Wena Hotels v Egypt, Decision on Annulment (5 February 2002). CMS v Argentina, Award (12 May 2005) paras 116–117. See also eg MTD v Chile, Award (25 May 2004) para 204; Enron v Argentina, Award (22 May 2007) paras 205–209; National Grid v Argentina (UNCITRAL), Award (3 November 2008) paras 82–85; El Paso v Argentina, Award (31 October 2011) para 135; Bosh v Ukraine, Award (25 October 2012) para 280. But see Tokios Tokelės v Ukraine, Award (26 July 2007) para 143 (where the Tribunal, after endorsing the approach of the Wena ad hoc Committee, found that the system of protection provided by Ukrainian law was ‘replaced ratione materiae by the substantive provisions of the Treaty and international law, to the extent that the latter govern the same subject-matter’). 528 Wena Hotels v Egypt, Decision on Annulment (5 February 2002).

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schreuer’s commentary on the icsid convention which Argentina’s law applies, but it is only an element of the inquiry because of the treaty nature of the claims under consideration.529

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The Tribunal in Sempra v Argentina also opted for a solution that gives both legal systems an autonomous and simultaneous role. In response to a detailed discussion of the parties concerning the meaning of Art. 42(1) the Tribunal said, before proceeding to examine the issues before it, first under the law of Argentina, and then under international law:530 235. The parties’ discussion concerning Article 42(1) of the Convention appears to be theoretical to some extent since this Article provides for a variety of sources to play simultaneous roles. Indeed, the Respondent is right to argue that domestic law is not confined in scope of application to the determination of factual questions. It indeed has a broader role, as is evident from the pleadings and arguments of the parties to this very case. The License is itself governed by the legal order of the Argentine Republic, and it must be interpreted in its light. 236. So too, the Claimant is right in arguing for the prominent role of international law. In fact, the Treaty, international conventions and customary law have been invoked by the parties in respect of a number of matters. While writers and decisions have on occasion tended to consider domestic law and international law as mutually incompatible in their application, this is far from actually being the case. Both have a role to perform in the resolution of the dispute, as has been recognized.531

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A number of tribunals have pointed out that Art. 42(1) of the ICSID Convention does not allocate matters to either domestic or international law. They found that in the absence of an agreement of the parties on the rules of law applicable to the merits of a dispute, they are not bound by the arguments and sources invoked by the parties. It is for the tribunal to determine whether national or international law is applicable to an issue. According to the principle jura novit curia/arbiter, the tribunal has discretion to form its own opinion on the meaning of the law. However, it may not surprise the parties with a legal theory. In Quiborax v Bolivia, the Tribunal said: 91. Except for the undisputed application of the BIT, the Parties have not agreed on the rules of law that govern the merits of this dispute. Consequently, the Tribunal shall apply Bolivian law and international law when appropriate. The Tribunal is of the view that the second sentence of Article 42(1) of the ICSID Convention does not allocate matters to either law. It is thus for the Tribunal to determine whether an issue is subject to national or international law. 92. When applying the law (whether national or international), the Tribunal is of the view that it is not bound by the arguments and sources invoked by the Parties. The principle iura novit curia – or better, iura novit arbiter – allows the Tribunal to form its own opinion of the meaning of the law, provided that it does not surprise the Parties with a legal theory that was not subject to debate and that the Parties could not anticipate.532

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Azurix v Argentina, Award (14 July 2006) paras 66–67 (footnotes omitted). Sempra v Argentina, Award (28 September 2007) paras 241 ff, 270 ff. ibid paras 235, 236 (footnotes omitted). Quiborax v Bolivia, Award (16 September 2015) paras 91, 92. The Tribunal relied on the following authorities: Burlington v Ecuador, Decision on Liability (14 December 2012) para 179; Daimler v

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The Tribunal in Magyar Farming v Hungary, after rejecting the Claimant’s assertion that the BIT provided for an implied choice of law, applied the second sentence of Art. 42(1) of the ICSID Convention. It referred to the BIT as principal guidance and to the principle jura novit arbiter and stated that it would select the appropriate legal norm from either national or international law depending on the issue under consideration:

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26. Therefore, in the absence of a choice-of-law provision in the BIT, or elsewhere for that matter, the default rule of the second sentence of Article 42(1) of the ICSID Convention applies. This provision does not allocate specific matters to either international or domestic law. Instead, it calls for the application of either of these laws ‘as may be applicable’ to a particular issue in dispute. It is thus for the Tribunal to determine whether a particular issue is subject to national or international law. In doing so, the Tribunal will be guided primarily by the BIT. 27. When applying the law, whether municipal or international, the Tribunal is not bound by the arguments and sources invoked by the Parties. The principle iura novit arbiter allows the Tribunal to form its own opinion of the meaning of the law, provided that it does not surprise the Parties with legal theory that was not subject to debate and that the Parties could anticipate.533

In ConocoPhillips v Venezuela, Art. 9(5) of the BIT contained a choice of law clause referring to (i) the law of the Contracting Party concerned; (ii) the provisions of this Agreement and other relevant Agreements between the Contracting Parties; (iii) the provisions of special agreements relating to the investments; (iv) the general principles of international law; and (v) such rules of law as may be agreed by the parties to the dispute. The Tribunal stated that Art. 9(5) of the BIT did not provide for a priority among the five sources of law it mentions.534 International law itself required its prevalence over domestic law: One important factor of hierarchy is the principle that international law must prevail over domestic law, and that a State may not invoke its internal law to extract itself from an international law obligation. As a matter of principle, this is not disputed between the Parties, nor is there any controversy that such principle results from the international law itself and not from Article 9(5) of the BIT.535

Argentina, Decision on Annulment (7 January 2015) para 295 (‘an arbitral tribunal is not limited to referring to or relying upon only the authorities cited by the parties. It can, sua sponte, rely on other publicly available authorities, even if they have not been cited by the parties, provided that the issue has been raised before the tribunal and the parties were provided an opportunity to address it’). See also Fisheries Jurisdiction (Germany v Iceland) (Merits) (1974) ICJ Rep 175, para 18 (‘[i]t being the duty of the Court itself to ascertain and apply the relevant law in the given circumstances of the case, the burden of establishing or proving rules of international law cannot be imposed upon any of the Parties, for the law lies within the judicial knowledge of the Court’); Oostergetel v Slovakia (UNCITRAL), Award (23 April 2012) para 141; Metal-Tech v Uzbekistan, Award (4 October 2013) para 287. See also Ole Spiermann, ‘Applicable Law’ in Muchlinski, Ortino and Schreuer (n 354) 89, 90 ff. See also Vestey v Venezuela, Award (15 April 2016) paras 116–118; Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 235, 236; Burlington v Ecuador, Decision on Counterclaims (7 February 2017) para 74; Gavrilović v Croatia, Award (26 July 2018) para 436. 533 Magyar Farming v Hungary, Award (13 November 2019) paras 26–27. 534 ConocoPhillips v Venezuela, Award (8 March 2019) para 85. 535 ibid para 88.

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However, the Tribunal acknowledged that this principle of priority of international law over domestic law has its own limitations. It would not apply in a matter not governed by international law.536 The pragmatic, fact-specific approach taken in arbitral jurisprudence means that tribunals will have to identify the various legal issues before them in their proper legal contexts. Tribunals will then apply international law to some of these issues and domestic law to other issues. Tribunals will not have complete discretion in selecting international and domestic law. They will have to identify the questions to which the respective legal systems apply. G. ‘(2) The Tribunal may not bring in a finding of non liquet on the ground of silence or obscurity of the law.’

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This provision directs that the tribunal may not refuse to give a decision on the ground that the law is not sufficiently clear. It applies equally to a refusal to render an award at all and to a refusal to decide certain questions only. Art. 42(2) is reinforced by Art. 48(3), which says that the award shall deal with every question submitted to the tribunal. The prohibition of non liquet is generally accepted in international adjudication.537 It was adopted from Art. 11 of the 1958 ILC’s Model Rules on Arbitral Procedure.538 The wording remained essentially unchanged throughout the Convention’s drafting history (History, Vol. I, p. 194) and evoked virtually no comment (History, Vol. II, pp. 158, 330, 805). Art. 42(2) applies irrespective of the choice of law under Art. 42(1). It must be observed independently of whether the parties have agreed on applicable rules of law, or whether the residual rule referring the tribunal to the host State’s domestic law and to international law is applied. The underlying assumption is that the body of law provided for by Art. 42(1) is sufficiently complete to provide an answer to every question that may come before the tribunal. In the case of an agreed choice of law, the tribunal must first exhaust the possibilities for closing any perceived gaps within the chosen rules of law. Where a domestic system of law has been chosen, the appropriate rules of that system for closing lacunae have to be utilized.539 If the chosen law provides no answer, the tribunal will have recourse to the residual rule in Art. 42(1), second sentence (see paras. 193–195 supra). The combination of the host State’s law and international law offers such a broad range of authority that a genuine non liquet is almost unthinkable.540 Gaps in the host State’s law may be filled through international law’s supplemental function.541 In this process, a tribunal will deal with a silence of the law on a specific point through such techniques as analogy, looking at the general legal context, and applying broader principles.542 Obscurities of the law will be clarified by various interpretation techniques including object and purpose. Non-binding authority, such as judicial decisions, scholarly writings, 536 ibid para 89. 537 Julius Stone, ‘Non-Liquet and the Function of Law in the International Community’ (1959) 35 BYBIL 124; Hersch Lauterpacht, ‘Some Observations on the Prohibition of “Non Liquet” and the Completeness of the Law’ in Frederick M van Asbeck and others (eds), Symbolae Verzijl (Martinus Nijhoff 1958) 196. 538 [1958] 2 YBILC 83, 84. 539 Shihata and Parra (n 44) 195–196. 540 Di Pietro (n 90) 259. 541 Cherian (n 102) 77, 84 ff. 542 Masood (n 110) 323.

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resolutions, or codes of conduct may assist the tribunal (see paras. 251–260 supra). General principles of law will frequently provide guidance where other sources fail. Nevertheless, it must be borne in mind that applicable rules must be proven and cannot simply be assumed or postulated (see para. 250 supra). The function of closing gaps is inherently different from that of applying equity under Art. 42(3). Decisions ex aequo et bono require the specific consent of the parties (see paras. 339–347 infra). The tribunal’s obligation under Art. 48(3) to state the reasons for the award requires rigorous legal reasoning. Failure to do so will expose the award to annulment under Art. 52(1)(e). Failure to apply positive law may constitute an excess of powers under Art. 52(1)(b) (see paras. 36–42 supra). If the domestic law on a certain question is unsettled, a tribunal is under an obligation to select the interpretation, which it considers most in conformity with the law, as expressed by the PCIJ in the Brazilian Loans case.543 However, there are also investment tribunals that refused to take sides in case of conflicting domestic law interpretations.544

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H. ‘(3) The provisions of paragraphs (1) and (2) shall not prejudice the power of the Tribunal to decide a dispute ex aequo et bono if the parties so agree.’

1. General Meaning Art. 42(3) provides that a tribunal, if it is so authorized by the parties, may base its award on extra-legal considerations which it regards as equitable.545 In other words, it may disregard the rules of law otherwise applicable under Art. 42(1) in favor of justice and fairness. In a sense, this provision is an extension of Art. 42(1), first sentence. The parties are free not only to choose the rules of law to be applied, but may also go beyond these rules and choose equity. But it must be borne in mind that, while an authorization under Art. 42(3) achieves maximum flexibility, it does so at considerable cost to predictability. Decisions ex aequo et bono do not have the function of filling gaps in the applicable law, thereby assisting tribunals to avoid a non liquet in accordance with Art. 42(2). Decisions based on law must be distinguished from decisions based on equity. Where parties have not agreed to authorize the tribunal to decide ex aequo et bono, it must remain within the limits of the applicable rules of law (see paras. 339–347 infra). Art. 42(3) does not adopt a distinction between legal and non-legal disputes. Under Art. 25(1), the jurisdiction of the Centre extends to legal disputes only. Therefore, questions decided ex aequo et bono are capable of being decided in accordance with rules of law. It is not the nature of the dispute, but the parties’ agreement that makes equity applicable to it. An agreement to authorize the tribunal to decide ex aequo et bono may be particularly appropriate in the case of complex long-term relationships. As an investment evolves

543 Case Concerning the Payment in Gold of Brazilian Federal Loans Contracted in France (France v Brazil) PCIJ Rep Series A No 21, 124. See also Hepburn (n 4) 110. 544 See eg Saba Fakes v Turkey, Award (14 July 2010) para 129; Mamidoil v Albania, Award (30 March 2015) para 768. For further discussion, see also Hepburn (n 4) 133 ff. 545 More generally, see Christoph Schreuer, ‘Decisions Ex Aequo et Bono under the ICSID Convention’ (1996) 11 ICSID Rev 37.

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over time, new circumstances may appear which were not taken into account originally. If a renegotiation turns out to be impossible, the tribunal’s power to decide ex aequo et bono may be a second-best method to achieve a result that is fair and suitable to changed circumstances.546 The possibility to authorize a tribunal to decide ex aequo et bono was envisaged throughout the Convention’s drafting history and has elicited very little comment (History, Vol. I, pp. 194–196; see also paras. 339, 348 infra). The text, as eventually adopted, closely follows Art. 38(2) of the ICJ Statute. Other documents governing international arbitration contain similar clauses.547

2. Agreement on Decision ex aequo et bono a) Drafting the Agreement 333

The power of the tribunal to decide ex aequo et bono is contingent on an agreement by the parties. Such an agreement must be explicit. The ICSID Model Clauses of 1993 offer the following formula for use by the parties: Clause 11 Any Arbitral Tribunal constituted pursuant to this agreement shall have the power to decide a dispute ex aequo et bono.548

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The parties may also call upon the tribunal to act as an ‘amiable compositeur,’ although following the wording of Art. 42(3) may be preferable. In Atlantic Triton v Guinea, the agreement between the parties contained the following formula: ‘the disagreement shall be settled ex aequo et bono in accordance with the provisions of Article 42(3) . . .’549 Clauses authorizing the tribunal to decide ex aequo et bono need not be comprehensive, but may cover a limited number of points only. Other matters will then remain to be decided in accordance with rules of law.550 This method of dépeçage (see paras. 71, 72 supra) adds flexibility to the drafting and may facilitate compromise. In such a situation, it is perfectly reasonable to combine an agreement authorizing decision ex aequo et bono with an agreement on the choice of law.551

546 Broches, ‘The Convention’ (n 131) 394–395; Amerasinghe (n 103) 240. 547 ICC Arbitration Rules (2021) Art. 21(3); UNCITRAL Arbitration Rules (2013) Art. 35(2); ILC Model Rules (n 538) Art. 10(2). See also Louis B Sohn, ‘The Function of International Arbitration Today’ (1963–I) 108 RdC 1, 41–59; Ulrich Scheuner, ‘Decisions Ex Aequo et Bono by International Courts and Arbitral Tribunals’ in Sanders (n 299) 275; Lauterpacht (n 44) 117 ff. 548 (1997) 4 ICSID Reports 364. Cf also Clause XVIII of the Model Clauses of 1981, (1993) 1 ICSID Reports 206; Clause XXII of the Model Clauses of 1968, (1968) 7 ILM 1177. 549 Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, para 7. For another example see Lester Nurick and Stephen J Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 344. 550 Broches, ‘The Convention’ (n 131) 395; Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 666. 551 Amerasinghe (n 103) 250.

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b) Supervening Agreement While an agreement on decision ex aequo et bono will normally be made in advance of the proceedings before the tribunal, this need not be the case. Especially where jurisdiction is not based on a direct agreement between the parties, but on a treaty or on national legislation (see Art. 25, paras. 780–874), there will not be an early opportunity to agree on this question. Just as with an agreement on applicable law under Art. 42(1) (see paras. 91–96 supra), the parties may agree on decision ex aequo et bono at the beginning or in the course of the proceedings. In AGIP v Congo, the Government proposed in its Counter-Memorial that the Tribunal should adopt the role of an amiable compositeur. Since AGIP did not agree to this proposal, the Tribunal found that it had to make its decision in accordance with the provisions of the applicable law.552 In Benvenuti & Bonfant v Congo, there was no agreed choice of law and the residual rule of Art. 42(1) applied (see para. 191 supra). At the Tribunal’s first session, the Claimant suggested that the Tribunal be granted the power to decide ex aequo et bono. However, the Respondent rejected this initial suggestion.553 Later on, during the proceedings, the parties reached an agreement to attempt an amicable settlement, failing which they authorized the Tribunal ‘to render its award as quickly as possible by judgment ex aequo et bono.’554 After being notified of the failure to settle through negotiations,555 the Tribunal proceeded to apply Art. 42(3).556

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c) Necessity of an Agreement In the course of the Convention’s drafting, there was some suggestion to allow a tribunal to decide ex aequo et bono, even without the parties’ specific authorization (History, Vol. II, pp. 330, 570). On the other hand, it was pointed out that certain legal systems draw a clear distinction between arbitration under law and the reference of a dispute to an amiable compositeur, who had the power to decide ex aequo et bono (ibid., p. 419). The Convention’s text clearly follows this distinction. Therefore, there can be no doubt that an explicit agreement under the terms of Art. 42(3) is an indispensable requirement for a decision ex aequo et bono. The application of equitable principles without the parties’ authorization exposes the award to annulment for excess of powers.557 In Amco v Indonesia, the first Tribunal noted that the parties had not agreed to entrust the Tribunal with the power to decide ex aequo et bono and that, therefore, it had to decide according to the applicable rules of law.558 Before the ad hoc Committee, Amco argued that this explicit recognition by the Tribunal created an overwhelming presumption that the arbitrators did indeed refrain from deciding ex aequo et bono. The ad hoc Committee rejected this argument and held that it had to ‘examine closely both what the Tribunal said it was doing and what it was

552 553 554 556 557

AGIP v Congo, Award (30 November 1979) para 44. Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 1.5–1.6. ibid para 1.22. 555 ibid para 1.23. ibid para 4.4. Broches, ‘Convention, Explanatory Notes and Survey’ (n 131) 666; Delaume, ‘L’affaire’ (n 43) 55; Giardina (n 44) 212; Schreuer (n 543) 53 ff. 558 Amco v Indonesia, Award (20 November 1984) para 147.

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in fact doing, in resolving particular questions.’559 While no impermissible resort to equitable principles appeared in the Award, the ad hoc Committee pointed out that, in view of the law applicable to the case (see para. 202 supra), a decision ex aequo et bono would constitute a decision annullable for manifest excess of powers. Nullity would be a proper result only where the Tribunal decided an issue ex aequo et bono in lieu of applying the applicable law.560

341

In Klöckner v Cameroon, there was also no agreement on decision ex aequo et bono. The ad hoc Committee pointed out that an excess of powers might consist not only in a failure to apply the governing law, but also in a solution in equity where there was a requirement to decide in law.561 In dealing with the Tribunal’s suggestion that there was a basic and general principle of full disclosure to a partner in a contractual relationship,562 the ad hoc Committee found that the Tribunal had failed to establish such a principle under the host State’s law or under international law (see paras. 37, 211, 249 supra). It drew the following conclusion: Now, the Award’s reasoning and the legal grounds on this topic (to the extent that they are not in any case mistaken because of the inadequate description of the duty of ‘full disclosure’) seem very much like a simple reference to equity, to ‘universal’ principles of justice and loyalty, such as amiable compositeurs might invoke.563

342

It followed that the Tribunal did act outside the framework provided by Article 42(1), applying concepts or principles it probably considered equitable (acting as an amiable compositeur, which should not be confused with applying ‘equitable considerations’ as the International Court of Justice did in the Continental Shelf case). However, justified its award may be (a question on which the Committee has no opinion), the Tribunal thus ‘manifestly exceeded its powers’ within the meaning of Article 52(1)(b) of the Washington Convention.564

343

Similarly, the ad hoc Committee took issue with the Tribunal’s attempt to make a quantitative comparison of the parties’ respective failure of performance, which had led it to conclude that the partial amount already paid to the Claimant corresponded equitably to the value of its defective performance.565 It concluded that ‘the Award is based more on a sort of general equity than on positive law (and in particular French civil law) or precise contractual provisions . . .’566 Therefore, in the ad hoc Committee’s opinion, the Award’s passages on the evaluation of the respective obligations or debts contained little in the way of legal reasoning, but are based on an ‘equitable estimate.’567

559 560 561 562 563 564 565 566 567

Amco v Indonesia, Decision on Annulment (16 May 1986) para 24. ibid para 28. Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 59. ibid, Award (21 October 1983) (1994) 2 ICSID Reports 3, 59. ibid, Decision on Annulment (3 May 1985) para 77. ibid para 79. ibid, Award (21 October 1983) (1994) 2 ICSID Reports 3, 72. ibid, Decision on Annulment (3 May 1985) para 163. ibid para 176.

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The principle that a decision based on equity without authorization may constitute an excess of powers in the sense of Art. 52(1)(b) was confirmed by the ad hoc Committee in MINE v Guinea. It pointed out that, unless the parties had agreed on a decision ex aequo et bono, a decision not based on any law would constitute a derogation from the Tribunal’s terms of reference.568 In the instant case, no such decision was found to exist (see para. 39 supra). In Zhinvali v Georgia, the Tribunal found that in the absence of a qualifying investment it had no jurisdiction over the case. It observed that the Claimant may find this result unfair and painful and added:

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But the Tribunal is without any special equitable powers. Article 42(3) of the ICSID Convention provides that an ICSID tribunal only has ‘the power to decide a dispute ex aequo et bono if the parties so agree’, and here the parties have not so agreed. Consequently, the Tribunal can only seek fairly and properly to apply the governing law to the facts before it.569

One might add that even an agreement of the parties on the tribunal’s power to decide ex aequo et bono would not have cured a lack of jurisdiction. In Pey Casado v Chile, the Respondent alleged that the Tribunal had decided the case ex aequo et bono and that the award should therefore be annulled for excess of powers.570 The ad hoc Committee rejected this argument and held that the Award contained a detailed analysis of the factual and legal issues of which the parties had seized it. Therefore, it dismissed the request for annulment.571

346 347

3. The Relationship of Equity to Law a) Application of Equity and Law The power to decide ex aequo et bono gives the tribunal a certain element of discretion, not only with regard to the selection of the principles of equity to be applied, but also insofar as it is open to the tribunal to apply rules of law after all. In other words, Art. 42(3) is permissive and does not preclude the application of law. The Convention’s travaux préparatoires show that the power to apply equity does not prevent the application of law (History, Vol. II, pp. 420, 570). Therefore, the tribunal is free to apply the law, to depart from it, or to apply rules of law that would not be applicable otherwise under Art. 42(1). Just as a clause may authorize the tribunal to decide only certain matters ex aequo et bono (see para. 335 supra), the tribunal may choose to decide some of the matters that are within an authorization under Art. 42(3) in accordance with equity and others with law.572 In Benvenuti & Bonfant v Congo, the Tribunal was authorized by the parties to decide ex aequo et bono (see para. 338 supra). This did not stop the Tribunal from looking at

568 MINE v Guinea, Decision on Annulment (22 December 1989) para 5.03. 569 Zhinvali v Georgia, Award (24 January 2003) (2006) 10 ICSID Reports 6, para 418 (emphasis in the original). 570 Pey Casado v Chile, Decision on Annulment (18 December 2012) para 339. 571 ibid para 341. 572 Chittharanjan F Amerasinghe, ‘How to Use the International Centre for Settlement of Investment Disputes by Reference to Its Model Clauses’ (1973) 13 Indian JIL 530, 545.

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rules of law.573 Thus it found that compensation in case of nationalization was mandated by the host State’s law, by international law, as well as by equity (see para. 277 supra). It proceeded to determine the quantum of damages ex aequo et bono.574 The interplay of equity and law is particularly well illustrated by the following passage: 4.97. . . . B&B claimed interest at the rate of 15% a year on all sums awarded to it. 4.98. The Tribunal does not consider it possible to uphold this claim seeing as the law applicable, Congolese Law, lays down a significantly lower rate of interest. The Tribunal observes, however, that the Government, in its Memorial in Defence, suggested a rate of interest of 10% in connection with its counterclaim. By virtue of its power to rule ex aequo et bono, the Tribunal considers it equitable to adopt this rate in relation to the compensation awarded to B&B.575

350

In Atlantic Triton v Guinea, the agreement between the parties contained a choice of law clause that referred to the law of the host State (see para. 53 supra), as well as a clause authorizing decision ex aequo et bono (see para. 334 supra).576 The Tribunal proceeded to apply at times the law of Guinea577 and at times equitable principles.578

b) Equity within the Law 351

Not every invocation of equitable considerations amounts to a decision ex aequo et bono. A tribunal may take note of equitable standards provided for by the law or may exercise some discretion in applying rules of law on the basis of justice and fairness.579 In other words, a decision ex aequo et bono must be distinguished from equity within the law. In Amco v Indonesia, the ad hoc Committee said: 26. Neither does the ad hoc Committee consider that any mention of ‘equitable consideration’ in the Award necessarily amounts to a decision ex aequo et bono and a manifest excess of power on the part of the Tribunal. Equitable considerations may indeed form part of the law to be applied by the Tribunal, whether that be the law of Indonesia or international law. . . . 28. The ad hoc Committee thus believes that invocation of equitable considerations is not properly regarded as automatically equivalent to a decision ex aequo et bono . . .580

352

The fact that a tribunal may take equitable considerations into account without deciding ex aequo et bono was also recognized in the ICSID Additional Facility case of Tecmed v Mexico. The Tribunal found that an

573 574 576 577 579 580

Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 4.5–4.6. ibid para 4.65. 575 ibid paras 4.97–4.98. Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 17, 19, 23. ibid 33, 36. 578 ibid 30, 32, 42. Lauterpacht (n 44) 120 ff; Di Pietro (n 90) 271. Amco v Indonesia, Decision on Annulment (16 May 1986) paras 26, 28. The Committee also rejected the contention that the ICJ had applied equitable considerations only in the context of delimitation of maritime boundaries (ibid para 27). See also the remark by the ad hoc Committee in Klöckner v Cameroon cited in paras 341–343 supra, and SOABI v Senegal, Dissenting Opinion Mbaye (25 February 1988) (1994) 2 ICSID Reports 277, 282.

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Arbitral Tribunal may consider general equitable principles when setting the compensation owed to the Claimant, without thereby assuming the role of an arbitrator ex aequo et bono.581

Similarly, the ad hoc Committee in MTD v Chile pointed out that considerations of fairness and balancing of interests did not necessarily amount to decision ex aequo et bono. The Committee said:

353

It should be noted that Article 42(3) of the ICSID Convention concerns the determination ex aequo et bono of disputes, i.e., of the substantial matter referred to the tribunal. This is different from taking into account considerations of fairness in applying the law. For example, individual rules of law will often require fairness or a balancing of interests to be taken to account. This is the case with the fair and equitable treatment standard itself, the standard the Tribunal was required to apply.582

In Rusoro Mining v Venezuela, the Tribunal distinguished the margin of appreciation in the assessment of damages from a decision ex aequo et bono since the former requires full accordance with the law:

354

Any assessment of damages in a complex factual situation, involving revenuegenerating enterprises, includes some degree of estimation – the same degree which is also applied by (private and government) actors in the real world when valuing enterprises. Because of this difficulty, tribunals retain a certain margin of appreciation. This should not be confused with acting ex aequo et bono, because the Tribunal’s margin of appreciation can only be exercised in a reasoned manner and with full respect of the principles of international law for the calculation of damages.583

4. Limits on Equity The authorization by the parties to go beyond rules of law, and to apply equitable principles of justice, does not give the tribunal unlimited discretion. The tribunal may not act arbitrarily, but must base its decision on objective and rational considerations which must be stated.584 The obligation of Art. 48(3), that the tribunal shall state the reasons underlying an award, extends to decisions ex aequo et bono, although the burden of reasoning may be somewhat lighter than in the case of decisions based on law. Failure to state any reasons for a decision ex aequo et bono may expose the award to annulment under Art. 52(1)(e) (see Art. 48, para. 65; Art. 52, para. 436). In addition, certain fundamental principles of international law, which may be summarized as international public policy and jus cogens (see paras. 80–87 supra), constitute an outer margin for the tribunal’s discretion. Even an award ex aequo et bono may not violate peremptory rules, such as the prohibition of slavery and terrorism and other grave violations of human rights. The domestic law of some States does not permit arbitration ex aequo et bono. Some commentators have therefore concluded that, when a tribunal sits in such a country, it

581 582 583 584

Tecmed v Mexico (AF), Award (29 May 2003) para 190. MTD v Chile, Decision on Annulment (21 March 2007) para 48 (emphasis in the original). Rusoro Mining v Venezuela (AF), Award (22 August 2016) paras 640–642. Broches, ‘The Convention’ (n 131) 394; Hirsch (n 1) 151 ff.

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lacks the power to decide on the basis of equity rather than law.585 Such a conclusion is unwarranted in the case of ICSID arbitration. Arbitration under the ICSID Convention is truly international and free from the interference of national rules of a place of arbitration.586 The choice of an ICSID tribunal’s place or places of proceedings is purely a matter of convenience and has no impact on the applicable law (see para. 97 supra). By contrast, Art. 54(2) of the Arbitration (Additional Facility) Rules provides that a decision ex aequo et bono not only requires express authorization by the parties, but also the permission of the law applicable to the arbitration. Even if parties combine an authorization to decide ex aequo et bono with the choice of a law (see paras. 335, 348 supra) that prohibits ex aequo et bono decisions, they would not affect the tribunal’s power to use equitable principles. Art. 42(3) provides that the tribunal’s power to decide ex aequo et bono is not prejudiced by the selection of the proper law under Art. 42(1). In other words, an agreement authorizing the tribunal to decide equitably under Art. 42(3) would derogate to that extent from contrary provisions of the law otherwise applicable under Art. 42(1). This principle applies irrespective of whether the governing law applies by virtue of the first or second sentence of Art. 42(1).

5. Decisions ex aequo et bono by ICSID Tribunals 360

The practice of ICSID tribunals acting under an agreed authorization to decide ex aequo et bono is restricted to two known cases.587 In Benvenuti & Bonfant v Congo (see paras. 338, 349 supra), the Tribunal specifically described its decision as being ‘determined ex aequo et bono’ or as ‘equitable’ on the following points: s the quantum of damages for the nationalization without compensation;588 s the award of a sum for a claim that was not contested by the Respondent;589 s the award of a relatively small amount as compensation for ‘prejudice moral’;590 s the rate of interest on all sums awarded;591 s the dates from which interest was to run;592 and s the award of a special amount to cover additional procedural costs caused by the Respondent’s delay in participating in the proceedings.593

361

In Atlantic Triton v Guinea (see also paras. 334, 350 supra), the Tribunal noted that a subcontractor had initiated court proceedings in Norway against the Claimant and the Respondent in respect of one of the claims between the parties. Therefore, in order to prevent Guinea from being ordered to pay twice, the Tribunal subjected payment for this claim to the condition that Atlantic Triton produce a bank guarantee. The Tribunal 585 Leo J Bouchez, ‘The Prospects for International Arbitration: Disputes between States and Private Enterprises’ in Soons (n 462) 138. 586 Goldman (n 1) 140; Hirsch (n 1) 151. 587 See also an obiter dictum in AAPL v Sri Lanka, Dissenting Opinion Asante (15 June 1990) (1997) 4 ICSID Reports 296, 319, where the Arbitrator points out that the claim must be dismissed on strict legal grounds but that, if the Tribunal were competent to decide ex aequo et bono, he would recommend an ex gratia amount. 588 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.65. 589 ibid para 4.82. 590 ibid para 4.96. 591 ibid para 4.98. See further para 349 supra. 592 Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 4.99–4.100. 593 ibid paras 4.127–4.129.

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made this ruling despite the fact that this point was not raised during argument and described it as being made ex aequo et bono.594 In addition, the Tribunal set interest on this amount ‘equitably’ at 9 percent, seeing that the parties had chosen the US Dollar as their monetary unit and that this was the then current inter-bank interest rate in the United States.595 Finally, with regard to outstanding management fees, the Tribunal found that the services were reduced after a while, and then terminated altogether, during the period in question. Moreover, the Claimant had not exercised the necessary diligence in performing its functions. For these reasons, the Tribunal, ruling ex aequo et bono, awarded a lump sum of less than one-third of what would have been due otherwise.596 The Tribunal reiterated that it was acting ex aequo et bono before the final dispositif of the award.597 This brief survey indicates that, in the majority of instances, rulings ex aequo et bono were used to calculate or estimate the amounts of monetary compensation including the interest due on them. There is no clear instance where a tribunal disregarded rules of law in favor of equitable principles. A possible exception to this observation is the award of special procedural costs in Benvenuti & Bonfant v Congo (see para. 360 supra), seeing that the agreement between the parties had provided for the costs of the arbitration to be shared equally.

594 Atlantic Triton v Guinea, Award (21 April 1986) (1995) 3 ICSID Reports 13, 30. 595 ibid. 596 ibid 31–32. 597 ibid 42.

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Article 43 Except as the parties otherwise agree, the Tribunal may, if it deems it necessary at any stage of the proceedings, (a) call upon the parties to produce documents or other evidence, and (b) visit the scene connected with the dispute, and conduct such inquiries there as it may deem appropriate.

OUTLINE I. INTRODUCTION II. INTERPRETATION A. ‘Except as the parties otherwise agree, . . .’ B. ‘. . . the Tribunal may, if it deems it necessary . . .’ 1. Necessity and Discretion 2. Default Proceedings 3. Expenses C. ‘. . . at any stage of the proceedings, . . .’ D. ‘. . . (a) call upon the parties to produce . . .’ 1. Initiative 2. Addressee 3. Form 4. Legal Effect E. ‘. . . documents or other evidence, . . .’ 1. Types of Evidence a) Documents b) Witnesses c) Experts 2. Probative Value 3. Burden of Proof F. ‘. . . and (b) visit the scene connected with the dispute, and conduct such inquiries there as it may deem appropriate.’

Paragraphs 1–7 8–171 8–15 16–45 16–37 38–41 42–45 46–58 59–92 59–68 69–75 76–83 84–92 93–160 93–145 95–108 109–134 135–145 146–155 156–160

161–171

BIBLIOGRAPHY Amerasinghe, Chittharanjan F, Evidence in International Litigation (Brill 2005) Benzing, Markus, ‘Community Interests in the Procedure of International Courts and Tribunals’ (2006) 5 The Law & Practice of International Courts and Tribunals 369 Das Beweisrecht vor internationalen Gerichten und Schiedsgerichten in zwischenstaatlichen Streitigkeiten (Springer 2010) Berger, Klaus P, ‘Evidentiary Privileges: Best Practice Standards versus/and Arbitral Discretion’ (2006) 22 Arbitration International 501

907

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Blackaby, Nigel and Partasides, Constantine, with Redfern, Alan and Hunter, Martin, Redfern and Hunter on International Arbitration (6th edn, OUP 2015) 6.75–6.151 Blackaby, Nigel and Wilbraham, Alex, ‘Practical Issues Relating to the Use of Expert Evidence in Investment Treaty Arbitration’ (2016) 31 ICSID Review 655 Brower, Charles N, ‘Evidence Before International Tribunals: The Need for Some Standard Rules’ (1994) 28 The International Lawyer 47 Brown, Chester, A Common Law of International Adjudication (OUP 2007) Brown, Chester and Still, Patrick, ‘The Status of the Testimony of the Non-Appearing Witness in International Arbitration’ (2020) 35 ICSID Review 369 Devaney, James G, Fact-Finding before the International Court of Justice (CUP 2016) Ireton, Jessica O, ‘The Admissibility of Evidence in ICSID Arbitrations: Considering the Validity of Wikileaks Cables as Evidence’ (2015) 30 ICSID Review 231 Kazazi, Mojtaba, Burden of Proof and Related Issues: A Study of Evidence before International Tribunals (Brill 1996) Niemoj, Asaf, ‘The Limitations on Article 43 ICSID Convention: An (Un)limited Instrument of the Tribunal?’ (2020) 34 ICSID Review 697 O’Malley, Nathan D, Rules of Evidence in International Arbitration: An Annotated Guide (2nd edn, Routledge 2019) Riddell, Anna and Plant, Brendan, Evidence before the International Court of Justice (BIICL 2009) Sandifer, Durward V, Evidence before International Tribunals (Virginia UP 1975) Sharpe, Jeremy K, ‘Drawing Adverse Inferences from the Non-Production of Evidence’ (2006) 22 Arbitration International 549 Sheppard, Audley, ‘The Approach of Investment Treaty Tribunals to Evidentiary Privileges’ (2016) 31 ICSID Review 670 Sourgens, Frédéric G, Duggal, Kabir AN and Laird, Ian A, Evidence in International Investment Arbitration (OUP 2018) von Schlabrendorff, Fabian and Sheppard, Audley, ‘Conflict of Legal Privileges in International Arbitration: An Attempt to Find a Holistic Solution’ in Gerald Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC 2005) 743 Waincymer, Jeffrey, Procedure and Evidence in International Arbitration (Kluwer 2012)

I. INTRODUCTION 1

Provision for the power of an international court or tribunal to take evidence is a standard feature in instruments governing international adjudication. Comparable clauses may be found in the Statute of the International Court of Justice (Arts. 49, 50, and 51),1 in the 1958 International Law Commission Model Rules on Arbitral Procedure (Arts. 17(2), 18),2 in the 2012 Permanent Court of Arbitration (PCA) Arbitration Rules (Art. 27), the 1993 PCA Optional Rules for Arbitrating Disputes between Two States (Arts. 24(2)(3) and 25(6)), and in the 1993 PCA Optional Rules for Arbitrating Disputes between Two Parties Only One of Which Is a State (Arts. 24(2)(3)

1 Statute of the International Court of Justice (adopted 26 June 1945, entered into force 24 October 1945) USTS 993. 2 [1958] 2 YBILC 83, 85.

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and 25(6)).3 Moreover, comparable clauses exist in the 2021 ICC Arbitration Rules (Art. 25), in the 2013 UNCITRAL Arbitration Rules (Arts. 17(3), 20(4), 21(2), 27–29), in the 2017 SCC Arbitration Rules (Arts. 23, 30–34), and in the 1985 UNCITRAL Model Law on International Commercial Arbitration (amended in 2006) (Arts. 24, 26). The Preliminary Draft of the ICSID Convention did not have a provision on the tribunal’s power to summon evidence (History, Vol. I, p. 196). It was inserted in the First Draft upon the suggestion of the delegate from the Central African Republic and remained almost unchanged (History, Vol. II, pp. 244, 269, 572, 805). There was some suggestion to delete the Article and to relegate its contents to the Arbitration Rules (ibid., p. 806). Three successive votes on the matter eventually resulted in the Article’s retention (ibid., p. 807). During the Convention’s drafting, it was also made clear that fact-finding is not an independent function of a tribunal, but an indispensable task incidental to its judicial function (see Art. 25, paras. 38, 102, 103). The ability of tribunals to determine disputes depends on their capacity to ascertain the relevant facts.4 Pure fact-finding was introduced by means of the Additional Facility, but this is an activity that is totally separate from arbitration under the Convention (see Art. 25, paras. 13–15, 39–43, 495–496). The taking and evaluation of evidence is a crucial aspect of fair and impartial judicial proceedings.5 Failure to abide by the relevant standards, as contained in the Arbitration Rules, but also in general principles of law, may expose an award to annulment on the ground that there has been a serious departure from a fundamental rule of procedure in accordance with Art. 52(1)(d) of the Convention (see Art. 52, paras. 330–423). Art. 43 is the only provision in the ICSID Convention that expressly deals with evidentiary matters, although the ICSID Arbitration Rules contain further provisions (Rules 21, 33–37). The power of ICSID tribunals to call upon the parties ‘to produce documents or other evidence,’ and ‘to visit the scene connected with the dispute, and conduct inquiries there as it may deem appropriate’ is one which ICSID tribunals exercise in most (if not all) cases, given the importance of fact-finding to their arbitral function. The power conferred by Art. 43 is broad, and can be exercised by tribunals on their own initiative as well as at the request of one or both of the parties. Given the central role of fact-finding in the adjudicatory process, it is also considered that international tribunals have inherent powers concerning the obtaining of evidence.6

3 See accessed 10 January 2021. 4 See eg Chester Brown, A Common Law of International Adjudication (OUP 2007) 83–85. 5 There is a rich literature on evidence in international adjudication. See eg Durward Sandifer, Evidence before International Tribunals (Virginia UP 1975); Charles N Brower, ‘Evidence before International Tribunals: The Need for Some Standard Rules’ (1994) 28 Int’l Lawyer 47; Mojtaba Kazazi, Burden of Proof and Related Issues (Brill 1996); Chittharanjan F Amerasinghe, Evidence in International Litigation (Brill 2005); Anna Riddell and Brendan Plant, Evidence before the International Court of Justice (BIICL 2009); Markus Benzing, Das Beweisrecht vor internationalen Gerichten und Schiedsgerichten in zwischenstaatlichen Streitigkeiten (Springer 2010); Jeffrey Waincymer, Procedure and Evidence in International Arbitration (Kluwer 2012); James Devaney, Fact-Finding before the International Court of Justice (CUP 2016); Frédéric Sourgens, Kabir Duggal and Ian Laird, Evidence in International Investment Arbitration (OUP 2018); Nathan O’Malley, Rules of Evidence in International Arbitration (2nd edn, Routledge 2019); Asaf Niemoj, ‘The Limitations on Article 43 ICSID Convention: An (Un)limited Instrument of the Tribunal?’ (2020) 34 ICSID Rev 697. 6 See eg Brown (n 4) 90.

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The opening phrase of Art. 43, ‘[e]xcept as the parties otherwise agree,’ would appear to permit the parties to exclude or modify the tribunal’s powers to obtain evidence (see further paras. 8–15 infra). Other issues raised by Art. 43 include the circumstances in which the Tribunal may use its discretion in determining whether it is ‘necessary’ to exercise its evidence-gathering powers (see paras. 16–37 infra), which may be exercised at any stage of the proceedings’ (see paras. 46–58 infra). Usually, the parties produce evidence along with their written submissions which supports their claim or their defense to the claim, as the case may be. Nevertheless, tribunals have the power to order parties to produce further evidence, either on their own initiative, or at the request of one of the parties. The most frequently exercised power is that identified in Art. 43(a), being the power ‘to call upon the parties to produce documents or other evidence,’ which includes fact witnesses and expert witnesses (see paras. 59–160 infra). The ICSID Arbitration Rules include further relevant provisions; for instance, Rule 34(1) confirms that the tribunal ‘shall be the judge of the admissibility of any evidence adduced and of its probative value.’ Rule 34(3) confirms that the parties have a duty to ‘cooperate with the tribunal in the production of the evidence,’ and the tribunal is to ‘take formal note’ of a party’s failure to comply with its obligations in this regard, ‘and of any reasons given for such failure.’7 A party may object to producing documents because they may be protected by legal privilege, or covered by another ground for objection, such as ‘special political or institutional sensitivity’ which may apply to certain documents of a respondent State.8 In exercising their powers and functions in the gathering of evidence, tribunals are likely to find further guidance in the International Bar Association’s Rules on the Taking of Evidence in International Arbitration of 2010 (IBA Rules).9 Art. 43(b) also confirms that the tribunal can ‘visit the scene connected with the dispute, and conduct such inquiries there as it may deem appropriate’ (see paras. 161–171 infra). In contrast to the power to request the parties to produce documents or other evidence, this power has not been exercised with great frequency.

II. INTERPRETATION A. ‘Except as the parties otherwise agree, . . .’ 8

Art. 43 is one of several Articles that is open to variation by the parties (cf. Arts. 26, 33, 35, 44, 46, 47, 60, 61, 62, 63). This is an expression of the consensual nature of proceedings under the Convention leaving the parties a large measure of discretion.

7 See eg Jeremy K Sharpe, ‘Drawing Adverse Inferences from the Non-Production of Evidence’ (2006) 22 Arb Int’l 549. 8 See eg Audley Sheppard, ‘The Approach of Investment Treaty Tribunals to Evidentiary Privileges’ (2016) 31 ICSID Rev 670. See also Fabian von Schlabrendorff and Audley Sheppard, ‘Conflict of Legal Privileges in International Arbitration: An Attempt to Find a Holistic Solution’ in Gerald Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution (ICC 2005) 743; Klaus P Berger, ‘Evidentiary Privileges: Best Practice Standards versus/and Arbitral Discretion’ (2006) 22 Arb Int’l 501. 9 See IBA Rules on the Taking of Evidence in International Arbitration (2010) accessed 10 January 2021. See generally O’Malley (n 5).

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During the Convention’s drafting, the ability of the parties to agree that the tribunal would not have the power to obtain evidence as contained in Art. 43 was repeatedly cast into doubt. The tribunal’s power to obtain evidence was described as an essential element in rendering an award. There were several calls to delete the clause (History, Vol. II, pp. 663, 805, 806). At the same time, there was concern that States parties to proceedings might need to withhold sensitive information relating to national security and would have to claim privilege in respect of certain documents (ibid., pp. 805–806). A vote on the deletion of the clause did not produce a majority (ibid., p. 807). In Churchill and Planet Mining v Indonesia, the Tribunal noted in connection with Art. 43 that ‘the parties have ample freedom to determine the applicable procedure with respect to the taking of evidence. Should the parties fail to agree on the applicable procedure, the Tribunal enjoys an equally ample freedom to establish the applicable procedure.’10 In a typical arbitration, matters of fact as well as of law will be contested. It is difficult to see how a tribunal could proceed under these circumstances without the power to ascertain all relevant facts. But it is conceivable that the parties may submit to the tribunal an agreed statement of facts coupled with a request to render an award purely on the legal issues arising therefrom. In this situation, it is foreseeable that the parties may agree to withhold from the tribunal the power to obtain further factual information. Alternatively, the parties may agree on specific rules governing the taking of evidence. The Arbitration Rules offer a special procedure to reach agreement on uncontested facts:

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Rule 21 Pre-Hearing Conference (1) At the request of the Secretary-General or at the discretion of the President of the Tribunal, a pre-hearing conference between the Tribunal and the parties may be held to arrange for an exchange of information and the stipulation of uncontested facts in order to expedite the proceeding.

Parties to ICSID proceedings as well as tribunals often make reference to the IBA Rules11 as an appropriate standard. In Noble Ventures v Romania, the Tribunal noted that the IBA Rules, though not directly applicable in this case and primarily provided for use in the field of commercial arbitrations, can be considered (particularly in Articles 3 and 9) as giving indications of what may be relevant criteria for what documents may be requested and ordered to be produced in ICSID procedures between investors and States.12

10 Churchill and Planet Mining v Indonesia, Procedural Order No 5 (19 March 2013) para 5. 11 IBA Rules (n 9). 12 Noble Ventures v Romania, Award (12 October 2005) para 20 (citing para 2 of the Tribunal’s Procedural Order No 1).

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In Churchill and Planet Mining v Indonesia, the Tribunal noted that, in deciding on the parties’ requests for the production of documents, it would, in accordance with the provisions of Procedural Order No 1, ‘seek guidance from the IBA Evidence Rules, which in any event it considers to reflect the current practice in international arbitration.’13 Multiple ICSID tribunals, as well as non-ICSID tribunals, have agreed that the IBA Rules provide appropriate guidance on issues relating to evidence,14 even in circumstances where the parties have not agreed that they are formally applicable.15 Notwithstanding the terms of the first sentence of Art. 43, it is arguable that there are cases where a tribunal can exercise powers proprio motu, in pursuance of its public function in ensuring the proper administration of international justice. Thus, where the conduct of one or both of the parties appears to violate international public policy (such as conduct involving corruption or fraud), it can be said that the tribunal has the authority as well as the duty to investigate that behavior.16 This is not to say that the tribunal would have a carte blanche to go beyond the factual record of the case in all circumstances, but it is arguable that the tribunal may have fact-finding powers beyond the agreement of the parties in certain limited cases. B. ‘. . . the Tribunal may, if it deems it necessary . . .’

1. Necessity and Discretion 16

The parties are primarily interested in bringing all the evidence supporting their case before the tribunal. Therefore, most of the relevant information will be supplied on the parties’ initiative. In this context, Arbitration Rule 33 provides: Rule 33 Marshalling of Evidence Without prejudice to the rules concerning the production of documents, each party shall, within time limits fixed by the Tribunal, communicate to the Secretary-General, for transmission to the Tribunal and the other party, precise information regarding the evidence which it intends to produce and that which it intends to request the Tribunal to call for, together with an indication of the points to which such evidence will be directed.17

13 Churchill and Planet Mining v Indonesia, Procedural Order No 5 (19 March 2013) para 7. 14 See eg Eyre and Montrose v Sri Lanka, Procedural Order No 1 (1 June 2017) para 24.1; United Utilities v Estonia, Procedural Order No 3 (3 May 2016) paras 12–14; Churchill and Planet Mining v Indonesia, Procedural Order No 5 (19 March 2013) paras 4–7; Lighthouse Corp v Timor-Leste, Procedural Order No 1 (13 October 2015) para 25.1; Liman Caspian Oil v Kazakhstan, Excerpts of Award (22 June 2010) para 11 (extracting Minutes of the First Session of 1 May 2008); Philip Morris v Australia (UNCITRAL), Procedural Order No 6 (30 November 2012) para 2; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 22 (quoting Procedural Order No 1); Glamis Gold v United States (UNCITRAL), Decision on Objections to Document Production (20 July 2005) paras 9, 10. 15 See eg Metal-Tech v Uzbekistan, Award (4 October 2013) para 245. 16 See eg Stephan W Schill, ‘Crafting the International Economic Order: The Public Function of Investment Treaty Arbitration and its Significance for the Role of an Arbitrator’ (2010) 23 Leiden JIL 401, 423–424. 17 Art. 40 of the Arbitration (Additional Facility) Rules is identical. See also the Note to the identical Rule 32 of 1968, (1993) 1 ICSID Reports 94.

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The Arbitration Rules go on to state:

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Rule 34 Evidence: General Principles (1) The Tribunal shall be the judge of the admissibility of any evidence adduced and of its probative value.18

Arbitration Rule 34 continues by paraphrasing Art. 43 of the Convention. Therefore, the tribunal’s power under Art. 43 is designed to close gaps left after the parties have adduced all the material that they deem relevant.19 The tribunal has discretion in deciding on the relevance and admissibility of the evidence adduced by the parties and in exercising the power to summon further evidence20 and is not bound by the parties’ submissions regarding the taking of evidence. It is for the tribunal and not for an interested party to determine whether a piece of evidence is admissible and relevant.21 In some cases, tribunals have, in fact, denied requests for the production of evidence.22 The tribunal’s discretion regarding the relevance and admissibility of the evidence was addressed by the Tribunal in Rompetrol v Romania.23 It summarized the position as follows:

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[The Tribunal] starts from the position that in international arbitration – including investment arbitration – the rules of evidence are neither rigid nor technical. If further confirmation of that were necessary, in the specific ICSID context, it can be found in Articles 43–45 of the Washington Convention, the intention behind which is plainly that a tribunal should possess a large measure of discretion over how the relevant facts are to be found and to be proved – a general principle which finds strong reinforcement in the Arbitration Rules, notably in paragraphs (1) and (3) of Rule 34. The overall effect of these provisions is that an ICSID tribunal is endowed with the independent power to determine, within the context provided by the circumstances of the dispute before it, whether particular evidence or kinds of evidence should be admitted or excluded, what weight (if any) should be given to particular items of evidence so admitted, whether it would like to see further evidence of any particular kind on any issue arising in the case, and so on and so forth. The tribunal is entitled to the cooperation of the parties in that regard, and is likewise entitled to take account of the quality of their cooperation.24

In some cases, tribunals have excluded evidence on the basis that it had been acquired by unlawful means. In Methanex v United States, a tribunal established under Chapter 11 of the North American Free Trade Agreement (NAFTA) ruled that illegally obtained

18 Art. 41(1) of the Arbitration (Additional Facility) Rules is identical. 19 For example, the Tribunal in Swisslion v North Macedonia, Award (6 July 2012) para 206 emphasized that its power under Art. 43 was to be used ‘with care when the parties have already produced what they consider to be the relevant documents and have submitted witness testimony and pleadings.’ 20 See also Note A to Arbitration Rule 33 of 1968, (1993) 1 ICSID Reports 95. 21 See eg Santa Elena v Costa Rica, Award (17 February 2000) para 49; Tradex v Albania, Award (29 April 1999) para 34. 22 Many examples can be cited. See eg Bridgestone v Panama, Procedural Order No 7 (15 January 2019) Annex A, paras 1, 3–5, 8 and Annex B, paras 1–4, 7; Churchill and Planet Mining v Indonesia, Procedural Order No 5 (19 March 2013) Annex A, paras 3, 6, 9–11; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 223–226; MCI v Ecuador, Award (31 July 2007) para 20. 23 Rompetrol v Romania, Award (6 May 2013). 24 ibid para 181.

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evidence was inadmissible as it was procured ‘in violation of a general duty of good faith imposed by the UNCITRAL Rules and, indeed, incumbent upon all who participate in international arbitration, without which it cannot operate.’25 In Libananco v Turkey, the Claimant claimed that it had learned that the Respondent had sought and obtained Turkish court orders permitting it to intercept ‘approximately 1,000 privileged, private and confidential emails sent by, to and between Claimant’s counsel of record in connection with this arbitration over the past year.’26 The Claimant argued that this had caused it irreparable prejudice, and asked the Tribunal to find in its favor, including the award of costs in respect of the Respondent’s ‘bad faith.’27 The Tribunal accepted that a sovereign State had a right and duty to investigate the alleged commission of serious crime, and that this right and duty ‘cannot be affected by the existence of an ICSID arbitration against it, or put into commission by the fact that an ICSID arbitration is begun against it.’28 However, this did not mean that the State’s investigative power ‘may be exercised without regard to other rights and duties, or that, by starting a criminal investigation, a State may baulk an ICSID arbitration.’29 The Tribunal decided to exclude any privileged documents or information or evidence derived from these surveillance activities. It further directed that: If, as the arbitration progresses, it turns out that the Respondent has used, in any way, privileged or confidential information obtained during the surveillance, the Claimant will be at liberty to bring an appropriate application to the Tribunal. The Tribunal attributes great importance to privilege and confidentiality, and if instructions have been given with the benefit of improperly obtained privileged or confidential information, severe prejudice may result. If that event arises, the Tribunal may consider other remedies available apart from the exclusion of improperly obtained evidence or information.30

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In EDF v Romania, an ICSID tribunal reached the same conclusion as the Methanex tribunal, regarding the admissibility of an audio recording which had been obtained in violation of Romanian law. The Tribunal held that: Admitting the evidence represented by the audio recording of the conversation held in Ms. Iacob’s home, without her consent in breach of her right to privacy, would be contrary to the principles of good faith and fair dealing required in international arbitration. In that regard, the Tribunal shares the position of the Methanex award.31

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The tribunal’s discretion in ruling on evidence is not without limits. The Tribunal in Aguas del Tunari found that its exercise of discretion regarding the production of documentary evidence under Art. 43 of the Convention and Arbitration Rule 34(2) was contingent upon a number of considerations which guide tribunals in requesting the

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Methanex v United States (UNCITRAL), Final Award (3 August 2005) pt II, ch 1, para 58. Libananco v Turkey, Decision on Preliminary Issues (23 June 2008) para 19. ibid. 28 ibid para 79. ibid. ibid 80. See also Cherie Blair and Ema Vidak Gojković, ‘Wikileaks and beyond: Discerning an International Standard for the Admissibility of Illegally Obtained Evidence’ (2018) 33 ICSID Rev 235; Jessica Ireton, ‘The Admissibility of Evidence in ICSID Arbitrations: Considering the Validity of Wikileaks Cables as Evidence’ (2015) 30 ICSID Rev 231. 31 EDF v Romania, Procedural Order No 3 (29 August 2008) para 38.

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production of documents or witnesses from the parties. The Tribunal said that its discretion in ordering parties to produce evidence is informed by concepts of materiality, relevance, and specificity present in the laws of evidence generally and by the customs of evidentiary production in international arbitration generally.32 In particular, the Aguas del Tunari tribunal emphasized that Art. 43 requires that a tribunal may order the production of documents at any stage of the proceedings ‘if necessary’ and identified the following considerations that may be taken into account by tribunals in evaluating whether or not to request the production of evidence:

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[T]he necessity of the requests made to the point the requesting party wishes to support, the relevance and likely merit of the point the requesting party seeks to support, the cost and burden of the request on the Claimant and the question of how the request may be specified so as to both fulfill legitimate requests by a party while not allowing inquiries that are an abuse of process.33

In that specific case, the Tribunal concluded that the parties’ arguments as to the necessity of the requests for production of documents were not sufficiently developed or clear to allow the Tribunal to decide the issue at that stage of the proceedings.34 In ADF v United States, decided under the Additional Facility, ADF asked the Tribunal to order the United States to produce a number of documents. The Tribunal identified two main aspects of the ‘necessity’ requirement, contained in Art. 41(2) of the Arbitration (Additional Facility) Rules,35 for the production of documents: (i) a substantive inquiry into the relevance of the document requested for purposes of the proceedings and (ii) a procedural inquiry ‘into the effective and equal availability of the documents requested to both the requesting party and the party requested.’ When only one party has access to the relevant documents, the Tribunal considered that it should make them available to the other party. By contrast, when the documents are in the public domain, and available to both parties, there should be no necessity for one party to produce and deliver the documents to the other.36 The Tribunal ordered the production of some documents, but denied the production of other documents whose identification was problematic due to the fact that they had been described in ‘overly broad terms.’ Another ground for denial of production was the fact that the party making the request had not shown the documents’ relevance for the subject-matter of the case.37 Under Art. 3(3)(b) of the IBA Rules, the request must concern documents that are ‘relevant and material to the outcome of the case.’ Art. 9(2) of the IBA Rules allows tribunals to exclude from evidence or production any documents on a number of grounds, including ‘lack of sufficient relevance or materiality,’ ‘legal impediment or privilege’ under the legal rules determined to be applicable by the tribunal, ‘unreasonable burden’ to produce the evidence, ‘loss or destruction of the document that has been reasonably shown to have occurred,’ grounds of ‘commercial or technical

32 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 25 (citing the Tribunal’s Procedural Order No 1, paras 13–15). 33 ibid. 34 See also ibid para 327. 35 Art. 41(2) of the Arbitration (Additional Facility) closely follows the text of Art. 43 of the Convention and of Arbitration Rule 34. 36 ADF v United States (AF), Award (9 January 2003) para 29 (citing Procedural Order No 3). 37 ibid paras 32–38.

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confidentiality,’ ‘special political or institutional sensitivity,’ and ‘considerations of fairness or equality’ of the parties which the tribunal must determine to be compelling.38 Applicants in annulment proceedings have repeatedly referred to the use of discretion by tribunals in the treatment of evidence as constituting an excess of powers and/or a serious departure from a fundamental rule of procedure. Ad hoc committees have rejected such applications as attempts to reintroduce evidence in annulment proceedings (see also Art. 52, paras. 39, 400–413, 453, 498, 541). For instance, in the annulment proceedings in Wena Hotels v Egypt, the Applicant, Egypt, alleged that the Tribunal had exceeded its powers because it failed to decide an alleged instance of corruption. The ad hoc Committee dismissed the issue as ‘a purely factual issue which is irrelevant as a matter of minimal standard of procedure.’39 Egypt also argued that the Tribunal breached a fundamental rule of procedure when it did not call for further evidence under Arbitration Rule 34(2) and allegedly decided the issue against the Respondent ‘on the basis of the absence of the evidence it had, in its discretion, decided not to ask for.’ The ad hoc Committee observed that ‘it is incumbent to the parties to produce the evidence they wish to present or they intend to request the Tribunal to call for.’ Neither the Rules nor the Convention impose any obligation on ICSID tribunals ‘to call for evidence on any item critical for the outcome of the dispute.’ The ad hoc Committee therefore concluded that the Tribunal’s conduct in this case did not represent a serious departure from a fundamental rule of procedure and dismissed the Applicant’s request.40 In CDC v Seychelles, the Applicant contended that the Award had failed to state reasons regarding conflicting witness statements. In rejecting the Application, the ad hoc Committee held that the Tribunal did not ignore the relevant evidence but simply came to a conclusion as to the meaning of this evidence with which the Applicant disagreed.41 In MTD v Chile, the Applicant, Chile, argued that the Tribunal’s alleged failure to consider expert evidence presented by both Parties on a variety of issues constituted a serious departure from a fundamental rule of procedure. The ad hoc Committee ruled that there was no indication of any procedural failure by the Tribunal ‘let alone a serious one.’42 In the annulment proceedings in Lucchetti v Peru, the Applicant argued that the Tribunal’s failure to exercise its powers under Art. 43 to call for evidence on a certain issue contributed to there having been a serious departure from a fundamental rule of procedure within the meaning of Art. 52(1)(d).43 The ad hoc Committee rejected this submission, finding that the applicant had had the possibility of submitting evidence on this issue. It acknowledged that ‘the Tribunal could also ex officio have called for

38 See further O’Malley (n 5) 23–110; Georg von Segesser, ‘The IBA Rules on the Taking of Evidence in International Arbitration’ (2010) 28 ASA Bulletin 735; IBA Arbitration Committee and IBA Rules of Evidence Subcommittee, ‘Commentary on the Revised Text of the 2010 IBA Rules on the Taking of Evidence in International Arbitration’ (2010) accessed 10 January 2021. 39 Wena Hotels v Egypt, Decision on Annulment (5 February 2002) para 60. 40 ibid paras 71–74. 41 CDC v Seychelles, Decision on Annulment (29 June 2005) paras 77, 83, 85. 42 MTD v Chile, Decision on Annulment (21 March 2007) paras 56, 57. 43 Lucchetti v Peru, Decision on Annulment (5 September 2007) paras 117–123.

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documents or evidence under Article 43 of the ICSID Convention or, alternatively, have joined the preliminary issue to the merits in order to allow its factual basis to be further explored.’44 But ‘the decision whether or not to proceed in either of these manners was within the Tribunal’s discretion and the fact of not doing so does not constitute a violation of a fundamental rule of procedure.’45 In Azurix v Argentina, the ad hoc Committee confirmed that the power to request the production of documents under Art. 43(a) is discretionary. This means that ‘a decision by a tribunal not to accede to a party’s request to exercise that power can never, in and of itself, be a departure from a fundamental rule of procedure.’ It was only where the exercise by the Tribunal of its discretion under Art. 43, ‘in all of the circumstances of the case, amounts to a serious departure from another rule of procedure of a fundamental nature that there will be grounds for annulment under Article 52(1)(e) of the ICSID Convention.’46 In the annulment proceeding in Occidental v Ecuador, the Respondent argued that the Tribunal had committed a ‘serious departure from a fundamental rule of procedure’ by having sent the parties an email which amounted to a ‘determination of liability’ which failed to state reasons, with the result that the award should be annulled.47 The ad hoc Committee rejected this argument, on the basis that the Tribunal had been acting within its powers under Art. 43 in requesting assistance from the parties’ experts. In addition, the email in question did not constitute a decision on any merits issues, with the result that there was no need for it to contain reasons; the award was therefore not subject to annulment on this basis.48 In Venezuela Holdings v Venezuela, the ad hoc Committee was critical of an aspect of the Tribunal’s decision on document production, noting that it shared ‘to a certain extent Venezuela’s surprise at the cursory nature of the Tribunal’s decision.’49 However, it could ‘find no warrant for saying that the exercise of that discretion [was] subject to control through the annulment procedure on the basis simply that the tribunal has not offered sufficiently ample reasons for how it has chosen to exercise its discretion.’50 In Teinver v Argentina, the ad hoc Committee observed that ‘an annulment committee has no powers to revisit the assessment of evidence made by the tribunal. Pursuant to Arbitration Rule 34(1), the tribunal is the judge of the admissibility as well as of the probative value of the evidence, and it is not up to an annulment committee to secondguess its findings in this regard.’51

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2. Default Proceedings If a party does not appear before the tribunal and does not make written submissions, the tribunal’s task in obtaining all the necessary evidence is particularly delicate. Art. 45(1) of the Convention provides that a party’s failure to appear or to present its case shall not be deemed an admission of the other party’s assertions. Arbitration Rule 42(3) in its 44 46 47 48 49 50 51

ibid para 123. 45 ibid. Azurix v Argentina, Decision on Annulment (1 September 2009) para 210. Occidental v Ecuador, Decision on Annulment (2 November 2015) paras 562–570. ibid paras 571–574. Venezuela Holdings v Venezuela, Decision on Annulment (9 March 2017) para 127. ibid. Teinver v Argentina, Decision on Annulment (29 May 2019) para 175.

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second sentence paraphrases the Convention’s provision. This means that the tribunal must on its own motion verify all the factual assertions made by the active party52 (see Art. 45, paras. 13–23). In LETCO v Liberia, the Respondent declined to appear or present any case. The Tribunal cited Art. 45 of the Convention and Arbitration Rule 42 dealing with default. The Tribunal found that it had to examine proprio motu the merit of the assertions made by the active party in order to satisfy itself whether they are well founded. The Tribunal said: It is this procedure which was followed by the Tribunal in the present arbitration. The Tribunal did not take for granted the assertions of law and fact made by the claimant. On the contrary, it submitted them to careful examination; and its award is made on the basis of that examination.53

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The Tribunal sent procedural orders to both parties requesting further evidence regarding certain issues. The Tribunal also appointed a firm of accountants to investigate and report on the amount of damages claimed by LETCO. In two rounds of oral hearings, the Tribunal heard testimony from various witnesses concerning the issue of whether LETCO had complied with its contractual obligations and as to the validity of the accountants’ report54 (see Art. 45, paras. 20–22). In Goetz v Burundi, the Respondent failed to present its case. The Tribunal noted that it regretted not being able to hear Burundi’s position on matters of fact and law. Echoing a ruling of the International Court of Justice in a similar case, the Tribunal held as follows: The Tribunal, like the Court, is certainly obliged to ‘proceed to an examination of the conclusions of the party pleading’; it is not however obliged to ‘verify all details of it in their minutia – a task which, in certain cases and in the absence of contradiction, could reveal itself as totally impossible.’55

3. Expenses Arbitration Rule 34(4) provides:

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Expenses incurred in producing evidence and in taking other measures in accordance with paragraph (2) shall be deemed to constitute part of the expenses incurred by the parties within the meaning of Article 61(2) of the Convention.

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According to Art. 61(2), the tribunal shall decide how and by whom expenses are to be paid. Under Arbitration Rule 28(1)(b) (see Art. 61, para. 69), the tribunal may decide with respect to any part of the proceeding that the related costs shall be borne entirely or in a particular share by one of the parties. This opens the possibility to charge the party whose conduct has necessitated a particular measure to obtain evidence with all or a major share of the cost of that measure. For example, if a party wishes to have the tribunal visit the scene connected with the dispute, in accordance with Art. 43(b), the

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See also Note E to Arbitration Rule 42 of 1968, (1993) 1 ICSID Reports 104. LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 356–357. ibid 348–349. Goetz v Burundi, Award (10 February 1999) para 56 (citing Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States) (Merits) [1986] ICJ Rep 25, para 30).

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tribunal may do so at the cost of that party.56 A party that fails to cooperate with the tribunal, thereby causing additional effort and expenses, may be charged with a higher proportion of the costs, or indeed the entire cost57 (see Art. 61, paras. 69–74). In Plama v Bulgaria, the Claimant resisted the Respondent’s requests for documents. The Tribunal issued an Order directing the Claimant to produce all documents falling within a particular category.58 Later on in the proceedings, Bulgaria requested an award on costs arguing that Plama’s refusal to disclose information in its possession obliged it to find the information itself and thus needlessly aggravated its costs.59 The Tribunal showed some sympathy for Bulgaria’s position that it was entitled to costs because Plama had been unwilling to respond fully to its request for information. The Tribunal acknowledged that Bulgaria had to spend considerable time, effort and money to obtain the information. In the Tribunal’s words:

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The Claimant had access to and/or control over all information relating to its ownership and control . . . The evidence of . . . asserted ownership and control of [the Claimant] should have been submitted by the Claimant as part of its case. The fact that it did not and that the structure of ownership it described in its memorials is so obtuse has raised many questions in the minds of the Arbitrators which remain to be explored in the second phase of this arbitration.60

The Plama tribunal eventually deferred its decision on costs to the second phase of the case when it would be in a better position to make a judgment about the costs of the arbitration.61

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C. ‘. . . at any stage of the proceedings, . . .’ The tribunal may request further information and evidence as the need arises. Typically, the need for further documents will become apparent after the completion of the written procedure.62 Witnesses will be called to testify during oral hearings. But the need to take action to obtain evidence may arise at an early stage of the proceedings. Conversely, the need for further facts may emerge at a later stage. In AGIP v Congo, the Tribunal requested the production of documents before it had received memorials. This was necessary because all of AGIP’s records had been seized by the Government in the course of the nationalization which was the object of the dispute. Accordingly, the Tribunal recommended a ‘measure of preservation’ in accordance with Art. 47 for the production of these records.63 In several cases tribunals requested further evidence after the oral pleadings.64 In SOABI v Senegal, the President of the Tribunal, in preparation for hearings, had requested the parties to supply all the information provided for in Rule 33 of the

56 57 58 59 61

See Note B to Arbitration Rule 27 of 1968, (1993) 1 ICSID Reports 90. See LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 378. Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 16. ibid para 110. 60 ibid para 238. ibid para 239. For another case dealing with this issue, see SOABI v Senegal, Award (25 February 1988) paras 9.05–9.25. 62 See Note C to Arbitration Rule 33 of 1968, (1993) 1 ICSID Reports 95. 63 AGIP v Congo, Award (30 November 1979) paras 7–9. 64 See Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 1; AAPL v Sri Lanka, Award (27 June 1990) para 11. In SPP v Egypt, Award (20 May 1992) paras 32, 37, the Tribunal requested further information from the parties five months after the final hearings on the merits.

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Arbitration Rules65 (see para. 16 supra). During the hearings, the Government indicated that it wished to produce a document not previously filed. The Tribunal granted the request. At the close of the hearings in July 1985, the Tribunal indicated that the proceedings were not yet closed within the meaning of Arbitration Rule 38(1) and that it reserved the right to request additional information. This it did in a Procedural Order of January 1986, in which it requested financial accounts from the Claimant.66 In February 1986, the Tribunal submitted written questions to the parties. In March 1986, the Tribunal appointed a chartered accountant who submitted his report in March 1987. After an exchange of comments in April 1987,67 the Tribunal met in August and December 1987.68 It rendered its Award in February 1988. In Noble Ventures v Romania, the Claimant introduced a document entitled ‘Investor’s Proposal for Document Production’ at the first procedural session between the parties and the Tribunal. After hearing the parties in this respect, the Tribunal decided to use this document only as a guideline to be used for the production of documents in the case.69 It was further specified in the minutes of the first procedural session that the parties would attach any evidence to their written submissions and that the Tribunal would allow introduction of new evidence at a later stage of the proceedings only under exceptional circumstances.70 Noble Ventures introduced three further requests for production of documents before the pleadings were filed. In the circumstances, the Tribunal found that it was unable to identify which documents may be relevant and material for its decision and invited the parties to try and agree on the disclosure of documents and, in the absence of such an agreement, to submit new requests for the production of documents together with their written pleadings.71 In Libananco v Turkey, the Claimant filed a request for the production of documents shortly after the constitution of the Tribunal; the requested documents concerned ‘surveillance by the Respondent of the Claimant’s potential witnesses and counsel’72 (see para. 22 supra). The Respondent issued a response, and the Claimant withdrew its request.73 Following the filing of the Claimant’s memorial, the Respondent made its own request for the production of documents concerning the Claimant’s alleged ownership of shares in the CEAS and Kepez companies.74 The Libananco tribunal held that it did not have to decide ‘whether the Respondent was entitled as of right to a form of prepleading discovery of this kind,’ as the Claimant had indicated that it was willing to provide ‘its share documents for inspection under suitable safeguards.’75 The Tribunal adopted a proposal made by the Claimant that it offer up the share certificates for inspection, with the shares to be held by an escrow agent, and ‘Turkey may inspect them

65 66 68 69 70 71 72 74

SOABI v Senegal, Award (25 February 1988) para 1.23. ibid para 1.32. 67 ibid para 9.14. ibid para 1.39. Noble Ventures v Romania, Award (12 October 2005) para 18 (citing the minutes of the first session, item 15). ibid (citing the minutes of the first session, items 15, 18). ibid para 20 (citing paras 7, 8.1 and 8.3 of Procedural Order No 1 of the Tribunal). See also Libananco v Turkey, Decision on Preliminary Issues (23 June 2008) paras 10–11, 53–54, 61–71. ibid para 10. 73 ibid paras 11–13. ibid paras 15, 28–29. 75 ibid para 63.

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strictly for the purposes of the present arbitration, in confidence that these valuable documents will be protected from harm.’76 In a parallel proceeding, Europe Cement v Turkey, the Respondent made a similar request for the production of documents concerning the Claimant’s ownership of its alleged investments shortly after the Tribunal had been constituted.77 The Tribunal placed the Respondent’s request in abeyance until after the filing of the Claimant’s memorial.78 And in a third related proceeding, Cementownia v Turkey, the Respondent also made a request for the production of documents shortly after the constitution of the Tribunal.79 Like the Europe Cement tribunal, the Cementownia tribunal rejected the Respondent’s request, as the case then stood.80 In Fraport v Philippines I, the Award ultimately turned on the existence of secret shareholder agreements which were in violation of host State law. The Tribunal found that Fraport had sought to conceal these agreements. Most of the relevant documents were produced either immediately before the hearing on jurisdiction and liability or during the hearing.81 In Noble Energy v Ecuador, the Claimants objected that the Respondents had introduced new evidence at the hearing. The Tribunal found that the issues developed by the Respondents during their oral argument were aimed at rebutting issues developed in the Claimants’ Rejoinder and were hence admissible.82 The tribunal remains free to examine evidence up to the time it renders the award. Arbitration Rule 38 (see Art. 49, para. 12) provides that, even after the closure of the proceeding, the tribunal may exceptionally reopen the proceeding in order to take new evidence. In Quadrant Pacific v Costa Rica, the Tribunal reminded the parties ‘of its power to request, up to the time of rendering the award, the production of any additional document the Tribunal finds relevant to the outcome of this arbitration.’83 Even after the award has been rendered, the appearance of new evidence may lead to the award’s revision. Art. 51 of the Convention provides that a party may request revision of the award on the ground of discovery of some decisive fact that was unknown to the tribunal and to the applicant when the award was rendered. In Tradex v Albania, the Tribunal had issued a ruling that no new documents could be submitted by the Parties after submission of the post-hearing briefs. When Tradex nevertheless sought to submit new documents, Albania objected and the Tribunal ruled that the new documents were inadmissible. The Tribunal added that these documents would not have changed its reasoning or decision on the merits. The Tribunal subsequently issued a formal Order closing the proceedings in accordance with Arbitration Rule 38(1).84

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ibid para 65. See also the orders mentioned in ibid para 82. Europe Cement v Turkey, Award (13 August 2009) para 15. ibid para 19. Cementownia v Turkey, Award (17 September 2009) para 34. ibid para 36. Fraport v Philippines I, Award (16 August 2007) paras 383, 400. Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 48. Quadrant Pacific v Costa Rica (AF), Order on Discontinuance (27 October 2010) para 35. See also, relatedly, Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 12. 84 Tradex v Albania, Award (29 April 1999) paras 43–49.

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In Siemens v Argentina, the Respondent filed post-hearing briefs which also included additional accounting information. Siemens contested this submission and the Tribunal invited Argentina to make some observations on Siemens’ arguments. Argentina failed to meet the deadline fixed by the Tribunal for the filing of these observations and Siemens requested a declaration from the Tribunal that the proceedings were closed. However, Argentina informed the Tribunal that it had not received the Tribunal’s letter setting the deadline for its observations and opposed Siemens’ request for the closure of the proceedings. Argentina later filed its observations with supporting documentation explaining why the Tribunal’s letter had not been received. The Tribunal accepted Argentina’s explanation, admitted its letter into the evidence and invited Siemens to make further comments to the letter. The Tribunal, however, disregarded a subsequent exchange of correspondence between the parties because it was unsolicited.85 In the Resubmitted Case in Vivendi v Argentina, the Claimants sought to file additional evidence after the conclusion of the hearing, but before the closure of the proceeding. The additional evidence concerned alternative approaches to the calculation of damages. The Respondent objected. The Tribunal declined to exercise its discretion to accept the Claimants’ new evidence.86 D. ‘. . . (a) call upon the parties to produce . . .’

1. Initiative 59

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The initiative to provide relevant evidence will be primarily with the parties (see para. 15 supra). As noted above, the Swisslion tribunal emphasized that the power to order the production of documents or other evidence should be used ‘with care when the parties have already produced what they consider to be the relevant documents and have submitted witness testimony and pleadings.’87 The Rules and Regulations adopted under the Convention control the submission of evidence by the parties.88 If, in the tribunal’s view, the evidence thus supplied remains incomplete, it may request further information. In the majority of cases, requests for production of documentary evidence or witnesses originate from one of the parties.89 Thus, in Tulip v Turkey, the Tribunal acceded to an application by the Claimant ‘that a witness, Mr Erdogan Bayraktar (at the time a Minister in the Turkish Government) be called for examination at the Hearing.’90 85 Siemens v Argentina, Award (6 February 2007) paras 60–67. 86 Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) paras 2.7.17, 8.1.6–8.1.9. The Tribunal’s detailed reasons for the decision are contained in a letter from the Tribunal to the parties of 15 September 2006, which is attached to the Award. 87 Swisslion v North Macedonia, Award (6 July 2012) para 206. 88 Arbitration Rules 23, 24, 33; Administrative and Financial Regulation 30. 89 See eg Tidewater v Venezuela, Decision on Jurisdiction (8 February 2013) paras 13–15; Caratube v Kazakhstan, Award (5 June 2012) para 39; Roussalis v Romania, Award (7 December 2011) paras 21–22, 25–27; Sempra v Argentina, Award (28 September 2007) paras 29–31, 36; Siemens v Argentina, Award (6 February 2007) paras 30, 39, 43, 44, 48–52; Champion Trading v Egypt, Award (27 October 2006) paras 15–16; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) paras 13, 19–23; ADC v Hungary, Award (2 October 2006) paras 30, 33–37; Azurix v Argentina, Award (14 July 2006) paras 22–27, 29, 31; Biwater Gauff v Tanzania, Procedural Order No 1 (31 March 2006) paras 99–103 and ibid, Procedural Order No 2 (24 May 2006); Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 23–27; Noble Ventures v Romania, Award (12 October 2005) paras 19–20, 96–98. 90 Tulip v Turkey, Award (10 March 2014) para 37.

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The Respondent duly confirmed that Mr. Bayraktar would be available to give evidence in person.91 In some cases, the initiative for a request for further information originated from the tribunal. Tribunals have asked parties to provide answers to specific questions,92 to produce specific documents,93 witnesses,94 further expert reports,95 or have appointed experts on their own motion.96 In Metal-Tech v Uzbekistan, the Claimant’s principal witness admitted during the hearing that substantial sums of money were paid to certain ‘consultants.’ The Tribunal considered it to be ‘its duty to inquire about the reasons for such payment.’97 At the hearing, the Tribunal observed that, ‘given the disclosure of facts unknown until then, it needed more information from the Parties.’98 The Tribunal exercised ‘its ex officio powers under Article 43 of the ICSID Convention,’ and ‘invited the Parties in Procedural Order No. 7 to provide that information.’ The Tribunal did this again in Procedural Order No. 10, calling for additional testimony and evidence.99 In Perenco v Ecuador, the Tribunal requested clarification from the Claimant ‘as to the relationship between the various Bahamian corporations and the Perrodo estate.’100 The Tribunal’s question was largely met ‘with a reiteration of points already made,’ with which it was not satisfied. The Tribunal was ‘not content to leave this to inference,’ and considered ‘that this must be determined on the basis of evidence rather than counsel’s representation.’101 It accordingly directed the Claimant ‘to file further evidence in support of its averment that it is controlled by Mr. Perrodo’s heirs,’ including evidence proving ‘(i) that the shares of what is now called Perenco International Limited in fact form part of the estate under French law and are being or will be distributed to the heirs of Mr. Perrodo in accordance with that law; and (ii) the means and instrument(s) through which the heirs have exercised control over the Claimant.’102 In Feldman v Mexico, an arbitration under the Additional Facility, the Tribunal invited the parties to submit requests for discovery and production of documents. Following a request from Mexico that the Tribunal order production of documents by the Claimant concerning the preliminary issues briefed by the parties, the Tribunal ordered the parties to comply promptly with any requests for the production of

91 ibid para 38. 92 See eg Crystallex v Venezuela (AF), Award (4 April 2016) para 130; Philip Morris v Australia (UNCITRAL), Procedural Order No 16 (23 February 2015); Metal-Tech v Uzbekistan, Award (4 October 2013) paras 92–93; Alapli v Turkey, Award (16 July 2012) para 31; Petrobart v Kyrgyzstan (SCC), Award (29 March 2005) 79–80, 83. 93 See eg Metal-Tech v Uzbekistan, Award (4 October 2013) paras 92–93; Feldman v Mexico (AF), Award (16 December 2002) para 33; AAPL v Sri Lanka, Award (27 June 1990) para 11. 94 See eg United Utilities v Estonia, Procedural Order No 1 (5 June 2015) para 18.5; BSG Resources v Guinea I, Procedural Order No 1 (13 May 2015) para 18.11. This power was exercised in eg Maffezini v Spain, Award (13 November 2000) paras 26, 27, 32; Champion Trading v Egypt, Award (27 October 2006) para 15. 95 See eg Crystallex v Venezuela (AF), Award (4 April 2016) para 130. 96 See eg Perenco v Ecuador, Interim Decision on Environmental Counterclaim (11 August 2015) paras 587, 611; Abaclat and others v Argentina, Procedural Order No 15 (20 November 2012) para 12; Sempra v Argentina, Award (28 September 2007) paras 47–51; LG&E v Argentina, Decision on Liability (3 October 2006) para 32; CMS v Argentina, Award (12 May 2005) paras 50–51. 97 Metal-Tech v Uzbekistan, Award (4 October 2013) paras 240–241. 98 ibid para 241. 99 ibid. 100 Perenco v Ecuador, Decision on Jurisdiction (30 June 2011) para 101. 101 ibid para 105. 102 ibid para 106.

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documents which they regarded (in good faith and after exhaustion of all best efforts) ‘to be admissible, relevant and otherwise inaccessible to the party requesting them.’ Several submissions concerning the production of documents and presentation of witnesses were filed by both parties during the jurisdictional and merits phases and eventually the Tribunal ruled on the issue with a procedural order regarding the marshaling of the evidence at the hearing on the merits.103 At the first procedural session with the parties in Impregilo v Pakistan, Pakistan stated that, before it could formulate its position with respect to the jurisdiction of the Tribunal and decide whether to raise jurisdictional objections, it needed additional information beyond what was contained in the Claimant’s Request for Arbitration. The Tribunal thereafter ordered Pakistan to submit a document specifying the kind of information it needed in order to formulate possible objections to jurisdiction. Following Pakistan’s submission, Impregilo raised several objections concerning the nature and scope of Pakistan’s request for information. The Tribunal – rather than requesting a specific response to Pakistan’s request for information – directed Impregilo to submit a Limited Memorial on the Merits in which it was to articulate the legal basis for each of its claims.104 In Fraport v Philippines I, the decisive documents were produced at a late stage in the proceedings upon the insistence of the Tribunal’s President.105 In some cases, the parties may request that documents be produced under the terms of a confidentiality protocol. For instance, in Philip Morris v Australia, Abaclat and others v Argentina, and Bilcon v Canada, the tribunals issued ‘confidentiality orders.’106 The confidentiality order in Philip Morris v Australia contained provisions on the designation of documents as confidential, a procedure for challenging such designations, and also identified the circumstances in which documents and materials produced in the course of the arbitration could be published.107 In addition, enhanced confidentiality procedures can also be fashioned for extremely sensitive documents. Thus, in Quiborax v Bolivia, the Respondent requested the Claimants to produce original share certificates ‘for inspection by an expert under the supervision of the Tribunal in order to determine their authenticity and date.’108 The Tribunal ordered the Claimants to make the original share certificates available for inspection, and issued further orders ‘on the time, place and logistics of the inspection.’109 In Libananco v Turkey, the Respondent requested access to the Claimant’s alleged share certificates, which were ‘bearer shares,’ and were thus an asset ‘of some fragility.’ The Tribunal therefore considered that the arrangements ‘for their preservation and inspection’ required ‘the greatest care.’110 The Tribunal adopted a proposal that the 103 104 105 106

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Feldman v Mexico (AF), Award (16 December 2002) paras 33–41. Impregilo v Pakistan, Decision on Jurisdiction (22 April 2005) paras 5, 6. Fraport v Philippines I, Award (16 August 2007) paras 383, 400, 401. Philip Morris v Australia (UNCITRAL), Procedural Order No 5 (30 November 2012); Abaclat and others v Argentina, Procedural Order No 3 (27 January 2010); Bilcon v Canada (UNCITRAL), Procedural Order No 2 (4 May 2009). See also Fireman’s Fund v Mexico (AF), Award (17 July 2007) paras 24, 222–225. Philip Morris v Australia (UNCITRAL), Procedural Order No 5 (30 November 2012). Quiborax v Bolivia, Decision on Jurisdiction (27 September 2012) para 31. ibid para 32. Libananco v Turkey, Decision on Preliminary Issues (23 June 2008) para 64.

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Claimant offer up the share certificates for inspection, with the shares to be held by an escrow agent, and that ‘Turkey may inspect them strictly for the purposes of the present arbitration, in confidence that these valuable documents will be protected from harm.’111 Parties ordered to produce documents may produce them with redactions, which may relate to information which is privileged. In Kardassopoulos v Georgia, the Claimant produced a number of documents in which allegedly privileged material had been redacted.112 These redactions were challenged by the Respondent, and the Tribunal ordered the Claimant to produce unredacted versions of certain documents.113 In other cases, tribunals have ordered parties to produce ‘privilege logs’ of documents withheld from production on grounds of privilege.114

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2. Addressee The Convention’s text provides that the tribunal direct its call for further information to the parties. During the Convention’s drafting, there was some discussion of a possible power to compel the appearance of witnesses before the tribunal (History, Vol. II, pp. 805, 806). A proposal to give the tribunal the right to call witnesses directly and not through the parties was defeated narrowly (ibid., p. 807). The Convention does not provide for the right of an ICSID tribunal to enlist the assistance of national authorities, notably domestic courts, to obtain evidence. Under Arbitration Rule 39(6) (see Art. 26, paras. 284–286), the parties may agree that provisional measures may be requested from domestic courts. But such requests may be made by the parties only. There is no explicit legal basis for a tribunal’s request for judicial assistance (see Art. 26, para. 269–271). This issue arose in Niko Resources v Bangladesh. In that case, the Respondents asked the Tribunal to request a Canadian court to order the Royal Canadian Mounted Police to provide information gathered in an investigation against the Claimant.115 The Tribunal observed that it was

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content to assume, without finally deciding, that, despite the absence of such an express power, an ICSID tribunal may, in an appropriate case where it is satisfied that a request under Article 43(a) of the Convention would be unavailing, be entitled to issue a request for assistance in the collection of evidence to a national court or . . . to permit a party to pursue such a request directly.116

The Tribunal accepted that ‘[t]he initiative of an ICSID tribunal as that requested by the Respondents would be a very unusual step; indeed the Respondents have not found any precedent.’117 It continued:

111 112 113 114

ibid para 65. See also the orders in ibid para 82. Kardassopoulos v Georgia, Award (3 March 2010) paras 35–40. ibid para 40. See eg Gabriel Resources v Romania, Procedural Order No 13 (20 July 2018); Philip Morris v Australia (UNCITRAL), Procedural Order No 10 (26 August 2014); Apotex v United States (AF), Order on Document Production (5 July 2013). 115 Niko Resources v Bangladesh, Procedural Order No 18 (23 March 2017) para 2. 116 ibid para 70. 117 ibid para 72.

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schreuer’s commentary on the icsid convention Such a request would be an exception to the general principle according to which the production of evidence is the responsibility of the parties to an arbitration. The Respondents accept that an intervention by these Tribunals with the Alberta Court is conditional on a number of requirements being met. They have identified the requirements under the Canadian Evidence Acts; and they have referred to Article 3.9 of the IBA Evidence Rules. The conditions which must be met under this provision correspond to a large extent to those of the requirements in Canada. Article 3.9 provides that the tribunal makes the order . . . if, in its discretion, it determines that (i) the Documents would be relevant to the case and material to its outcome, (ii) the requirements of Article 3.3, as applicable, have been satisfied and (iii) none of the reasons for objection set forth in Article 9.2 applies.118

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The Tribunal ultimately ruled that the requirements of Art. 3(3) of the IBA Rules were not met, as the Respondents had not established that they did not have access to the evidence in question.119 In the majority of instances, tribunals have directed their calls for evidence to the parties. In this manner, questions were asked and the production of documents was ordered. When witnesses were heard, they were normally brought to the tribunal through the intercession of the parties (see paras. 109–134 infra). There is nothing that would prevent a tribunal from directly inviting a witness to appear before it and to testify. But it is clear that a tribunal has no power to compel a witness’s appearance.120 The situation is different regarding the power of ICSID tribunals to engage an independent expert, which has been done in numerous cases.121 There is no indication of any opposition to such a procedural step.

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There is no clear indication in which form a tribunal shall call upon the parties to produce the required evidence. Arbitration Rule 34(2) simply repeats the Convention’s relevant words. Arbitration Rule 19 provides for procedural orders in general terms: Procedural Orders The Tribunal shall make the orders required for the conduct of the proceeding.

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It is only in the context of visits and inquiries that Arbitration Rule 37 specifically requires the tribunal to make an order (see paras. 161–162 infra). In some cases, tribunals call upon the parties to deal with the production of evidence directly between themselves.122 In Generation Ukraine v Ukraine, the Respondent made a request for the production of corporate documents of the Claimant. The Tribunal urged the parties to deal with any request for production of documents directly between themselves. The Claimant produced the documents requested and, in turn, filed a request for production of documents by the Respondent. The Claimant was

118 ibid. 119 ibid para 85. 120 See eg Niko Resources v Bangladesh, Procedural Order No 18 (23 March 2017) para 69. 121 See eg Perenco v Ecuador, Interim Decision on Environmental Counterclaim (11 August 2015) para 611(2); Abaclat and others v Argentina, Consent Award (29 December 2016) para I(x)–(y); Sempra v Argentina, Award (28 September 2007) paras 50, 51; LG&E v Argentina, Decision on Liability (3 October 2006) para 32; CMS v Argentina, Award (12 May 2005) para 418. 122 See Parkerings v Lithuania, Award (11 September 2007) paras 24–28.

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dissatisfied with the response to its request and submitted a motion complaining that the Respondent had not complied with the Parties’ agreement regarding discovery of documents and had destroyed the documents requested. After further correspondence the Tribunal dismissed the Claimant’s motion.123 The standard procedure for tribunals is to issue formal procedural orders for the purpose of obtaining evidence from the parties.124 Occasionally, the parties were simply ‘asked,’ ‘invited’ or ‘requested’ to furnish the required evidence.125 The power of a tribunal to make formal orders extends only to the parties. A tribunal cannot order third parties to do anything. In Waste Management v Mexico II, an issue was ownership and control of the relevant investment by a Mexican company which was the actual concessionaire. The Respondent called on the Tribunal to order access to information regarding this company which was in the possession of another company, not a party to the proceedings. The Tribunal requested Waste Management to promptly disclose to Mexico all the relevant documents that this third company could provide to Waste Management.126 A tribunal cannot issue an order to experts or to the ICSID Secretariat to provide evidence. Therefore, experts were ‘appointed’127 or merely ‘asked to be kind enough’ to provide a report.128 The ICSID Secretariat was ‘asked’ or ‘requested’ to provide information.129 In AGIP v Congo, the Tribunal acceded to a request for provisional measures in accordance with Art. 47 of the Convention in order to obtain necessary documentation130 (see Art. 47, paras. 47, 113). There is no apparent reason why the Tribunal acted under Art. 47 rather than issuing a procedural order under Art. 43. By contrast, in Biwater Gauff v Tanzania, when the Claimant sought production of documents pursuant to Art. 47 of the Convention, the Tribunal ruled that document production ‘is usually not considered within the ambit of such interim relief’ but, rather, it falls under the purview of Art. 43 of the Convention and ICSID Arbitration Rule 34. The Tribunal further warned against the risk of using Art. 47 as a method of obtaining

123 Generation Ukraine v Ukraine, Award (16 September 2003) paras 4.20, 4.25, 4.26, 4.28–4.30. 124 See eg Urbaser v Argentina, Award (8 December 2016) para 21; Deutsche Bank v Sri Lanka, Award (31 October 2012) paras 86, 91, 106, 109, 111; El Paso v Argentina, Award (31 October 2011) para 31; Fraport v Philippines I, Award (16 August 2007) paras 18, 25, 31, 38, 42, 47; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 22; Fireman’s Fund v Mexico (AF), Award (17 July 2007) paras 24, 222, 224–225; Azurix v Argentina, Award (14 July 2006) paras 22–27, 29, 31; Biwater Gauff v Tanzania, Procedural Order No 1 (31 March 2006) paras 99–103 and ibid, Procedural Order No 2 (24 May 2006). 125 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.28; Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 12; Amco v Indonesia, Decision on Annulment (16 May 1986) para 11. 126 Waste Management v Mexico II (AF), Award (30 April 2004) paras 18, 22, 30. 127 LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 348; SOABI v Senegal, Award (25 February 1988) para 9.06; AMT v Zaire, Award (21 February 1997) para 7.19. 128 Benvenuti & Bonfant v Congo, Award (15 August 1980) para 4.77. 129 Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 1; Amco v Indonesia, Decision on Annulment (16 May 1986) para 12. 130 AGIP v Congo, Award (30 November 1979) paras 7, 9.

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disclosure of documents in order to circumvent other procedures and concluded that requests for production should be considered under Art. 43.131

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During the Convention’s drafting, Mr. Broches pointed out in the context of what eventually became Art. 43 that the parties could not be forced to do things that they might be asked by the tribunal, but that failure to produce a document would probably lead to an inference by the tribunal (History, Vol. II, pp. 269, 805, 806). A suggestion to add the words ‘formal note should be taken of any refusal’ was defeated in a vote together with the proposal to delete the clause ‘except as the parties otherwise agree’ (ibid., p. 807) (see para. 9 supra). Procedural decisions do not enjoy the status of awards for purposes of their recognition and enforcement under Arts. 53 and 54 of the Convention. But Arbitration Rule 34(3) provides: The parties shall cooperate with the Tribunal in the production of the evidence and in the other measures provided for in paragraph (2). The Tribunal shall take formal note of the failure of a party to comply with its obligations under this paragraph and of any reasons given for such failure.

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The duty to cooperate with the tribunal is a natural consequence of the consent to jurisdiction. The tribunal’s only sanction is to draw the appropriate conclusions from a refusal which will be reflected in the award. The tribunal will take note of any reasons that may exonerate a party that fails to produce the requested evidence.132 In Churchill and Planet Mining v Indonesia, the Tribunal considered Rule 34(3) of the ICSID Arbitration Rules. It held that: As the Tribunal interprets this provision, it (i) enshrines a general obligation to cooperate, (ii) and therefore does not aim at particular failures to comply with particularized disclosure requirements, (iii) provides for the opportunity, under certain circumstances to excuse non-compliance, such as the invocation of privilege, and (iv) does not necessarily imply specific consequences in cases of non-compliance, such as the drawing of adverse inferences.133

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As noted above, the Tribunal in AGIP ordered the production of documents in the form of a recommendation for provisional measures under Art. 47 of the ICSID Convention.134 The legal effect of this would appear to be the same as an order under Art. 43 and Rule 34(3); under these provisions, the parties have a duty to cooperate in the case of measures taken under that provision, including an order to produce documents. An order for provisional measures under Art. 47 is a ‘recommendation,’ although this has been interpreted by multiple tribunals as nonetheless giving rise to a mandatory obligation of compliance.135

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Biwater Gauff v Tanzania, Procedural Order No 1 (31 March 2006) paras 100–103. See Note D to Arbitration Rule 33 of 1968, (1993) 1 ICSID Reports 96. See also Kazazi (n 5) 312–313. Churchill and Planet Mining v Indonesia, Award (6 December 2016) para 248. See eg AGIP v Congo, Award (30 November 1979) para 42. See eg Quiborax v Bolivia, Award (16 September 2015) paras 578–582; PNG Sustainable Development v Papua New Guinea, Decision on Provisional Measures (21 January 2015) para 102; Perenco v Ecuador,

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In a number of cases tribunals have indicated that they would draw adverse inferences from a party’s failure to supply documents.136 In Niko Resources v Bangladesh, both parties sought the drawing of adverse inferences against the other due to alleged deficiencies in document production.137 The Tribunal considered that ‘inferences as requested require that (i) a party was called upon to produce documents; that (ii) it failed to do so and (iii) the Tribunals take note of such failure and the reasons given for it.’138 The Tribunal observed that:

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The documents actually produced by both Parties are incomplete in various respects. When discussing the many factual issues that arise in the context of the Corruption Claim, this will become quite clear. It can be said here that it is indeed surprising that there are no or only very few records of communications in the circumstances on which the Respondents’ three requests are based – just as it is surprising that the Respondents failed to produce a number of documents relevant to the case, e.g. the legal opinions of the Law Ministry which, as will be seen below, are of critical importance to the outcome of the case or records about interrogations of the persons accused of having taken bribes.139

After considering the parties’ explanations for their respective inability to produce documents, the Tribunal concluded that ‘any gaps in the evidence that remained at the end of the proceedings are attributable primarily to the Respondents who insisted through repeated procedural initiatives on involving the Tribunals in the search for evidence which must be available in Bangladesh.’140 However, ultimately, the Tribunal did not draw any adverse inferences.141 In Fraport v Philippines I, the Tribunal had issued numerous orders for the production of documents and had warned the parties of ‘appropriate inferences’ in case of a failure to comply.142 The Tribunal found that the Claimant had consciously concealed a secret shareholder agreement that was in violation of Philippine law. The relevant documents were produced at a late stage at the insistence of the Tribunal’s President.143 The Tribunal said: Despite requests for document production, the obvious relevance of these secret documents to the Respondent’s jurisdictional objection, and a stern warning by the President of the Tribunal early in the arbitration that adverse consequences could be drawn from the failure to produce such documents, it was only in the course of the hearing that the existence of many of these documents became known. It was only at the

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Decision on Provisional Measures (8 May 2009) paras 67–76; Tokios Tokelės v Ukraine, Procedural Order No 1 (1 July 2003) para 4; Maffezini v Spain, Decision on Provisional Measures (28 October 1999) para 9; cf Caratube v Kazakhstan, Decision on Provisional Measures (31 July 2009) para 67. See Waste Management v Mexico II (AF), Award (30 April 2004) para 30; UPS v Canada (UNCITRAL), Decision on Cabinet Privilege (8 October 2004) para 15. See esp Jeremy Sharpe, ‘Drawing Adverse Inferences from the Non-Production of Evidence’ (2006) 22 Arb Int’l 549; see also Menalco Solis, ‘Adverse Inferences in Investor–State Arbitration’ (2018) 24 Arb Int’l 79. Niko Resources v Bangladesh, Decision on the Corruption Claim (25 February 2019) para 948. ibid para 958. 139 ibid para 959. ibid para 963. 141 ibid. Fraport v Philippines I, Award (16 August 2007) paras 18, 25, 31, 38, 42, 47 (quoting para 18 of Procedural Order No 21). ibid para 383.

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The Tribunal found that Fraport had intentionally circumvented Philippine law and had thus not made an investment ‘in accordance with law’ as required by the applicable BIT. Therefore, jurisdiction was denied.145 E. ‘. . . documents or other evidence, . . .’

1. Types of Evidence 93

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The First Draft still contained the phrase ‘documents or other information’ (History, Vol. I, p. 196). Upon the suggestion of Mr. Broches, this was replaced by ‘documents or other evidence’ in order to broaden its meaning and to enable the tribunal to call for evidence in every form (History, Vol. II, pp. 806–807). Arbitration Rule 34(2)(a), which paraphrases Art. 43, refers to ‘documents, witnesses and experts.’ Normally, the information obtained by these means will be of a factual nature. A note to the Arbitration Rules of 1968 also refers to ‘experts on national law who (in view of Article 42(1) of the Convention) may be of special importance.’146 ICSID tribunals have, at times, admitted expert opinions not only on national, but also on international law147 or have called on the parties to provide documents illustrating points of national and international law.148

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ICSID tribunals have on a number of occasions asked for additional documentation.149 Most often, these documents were financial statements or accounts.150 At times, the documents concerned were memoranda and notes,151 files and transcripts of the original proceedings in annulment proceedings,152 or transcripts and expert reports in separate arbitrations.153 Tribunals have attempted to balance the interest in a full disclosure of all relevant information against a disproportionate burden involved in the production of documents. In Noble Ventures v Romania, the Tribunal found that the ICSID Convention and the Arbitration Rules did not provide a basis for the application of national rules of

144 ibid para 400. 145 ibid para 401. 146 Note B to Arbitration Rule 33 of 1968, (1993) 1 ICSID Reports 95. 147 See eg Pac Rim v El Salvador, Decision on Preliminary Objections (2 August 2010) paras 40–41, 173, 251; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 48, 91, 119, 135; Salini v Jordan, Decision on Jurisdiction (29 November 2004) para 40; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 137. 148 See eg AAPL v Sri Lanka, Award (27 June 1990) para 13. 149 See eg Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.30; Klöckner v Cameroon, Decision on Annulment (3 May 1985) para 1. 150 See eg AGIP v Congo, Award (30 November 1979) paras 7, 9; SOABI v Senegal, Award (25 February 1988) paras 1.32, 9.06; SPP v Egypt, Award (20 May 1992) para 37; Siemens v Argentina, Award (6 February 2007) paras 43–45, 48–52, 58–60. 151 See eg Amco v Indonesia, Award (20 November 1984) para 95. 152 See eg Amco v Indonesia, Decision on Annulment (16 May 1986) para 11. 153 See eg Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 22; Fraport v Philippines I, Award (16 August 2007) paras 5, 19, 42.

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discovery, such as those of the United States.154 The Tribunal invited the parties to agree on a disclosure of documents taking into account certain considerations specified by the Tribunal and, in particular, the fact that the Respondent was a civil law country where production of documents is less customary than in common law countries. The Tribunal further stated: The Tribunal further recognises that, on one hand, ordering the production of documents can be helpful in the Tribunal’s task of establishing the facts of the case relevant for the issues to be decided, but, on the other hand, (1) the process of discovery and disclosure may be time-consuming, excessively burdensome and even oppressive and that unless carefully limited, the burden may be disproportionate to the value of the result, and (2) Parties may have a legitimate interest of confidentiality.155

In Fireman’s Fund v Mexico, both parties made numerous requests for the production of documents. The Tribunal ruled that, to the extent that the Tribunal would refer to documents or information, it would identify the portions that were confidential and these should not be published to third parties. This led the parties to designating all documents submitted by them as containing ‘reserved information.’ In its Award, the Tribunal ordered the parties to reach an agreement within 30 days as to which portions of the Award should be redacted for purposes of confidentiality.156 It is not uncommon in investor–State arbitrations for respondent States to invoke the privileged or politically sensitive nature of certain documents as grounds for refusing production and to invoke executive privilege under their national laws. Some tribunals have generally viewed such claims with disfavor,157 whilst other tribunals have accepted that national laws are relevant for the determination of whether a document can be withheld from disclosure on this basis, albeit subject to a balancing process (see paras. 98–103 infra).158 In Biwater Gauff v Tanzania, the Tribunal held that issues relating to document production can be decided without resorting to national standards. International tribunals are not bound by national rules of evidence. The Tribunal said: [T]he nature of this dispute resolution process is entirely different from a national court process. This is an international tribunal, governed by an international convention, which is mandated to enquire into the conduct and responsibility of a State in light of its international treaty and customary international law obligations. It is hardly conceivable that, in this setting, a State might invoke domestic notions of public interest and policy relating to the operations of its own government as a basis to object to the production of documents which are relevant to determine whether the State has violated

154 Noble Ventures v Romania, Award (12 October 2005) para 20 (quoting para 1.2 of Procedural Order No 1). 155 ibid paras 18, 20 (citing para 4 of Procedural Order No 1). 156 Fireman’s Fund v Mexico (AF), Award (17 July 2007) paras 24, 222–225. 157 See also the non-ICSID cases Pope and Talbot v Canada (UNCITRAL), Ruling on Privilege (6 September 2000) para 1.4; UPS v Canada (UNCITRAL), Decision on Cabinet Privilege (8 October 2004) para 1. 158 See eg Bilcon v Canada (UNCITRAL), Procedural Order No 13 (11 July 2012) paras 20–23; Merrill & Ring v Canada (UNCITRAL), Decision on Production of Documents (18 July 2008) paras 15–18; Glamis Gold v United States (UNCITRAL), Decision on Document Production (21 April 2006) paras 12–14, 30.

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schreuer’s commentary on the icsid convention its international obligations and whether, therefore, its international responsibility is engaged. . . . Further, if a State were permitted to deploy its own national law in this way, it would, in effect, be avoiding its obligation to produce documents in so far as called upon to do so by this Tribunal. This, in itself, is an international legal obligation arising from the State’s consent by way of the BIT to ICSID arbitration. It may also thereby stifle the evaluation of its own conduct and responsibility. As such, this would be to undermine the well established rule that no State may have recourse to its own internal law as a means of avoiding its international responsibilities.159

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The Biwater Gauff tribunal added that invocation of Crown privilege would create an imbalance between the parties which would be contrary to one of the most fundamental principles of international arbitration. The only ground which might justify a refusal to produce documents would be the protection of privileged or politically sensitive information, including State secrets. Any decision on politically sensitive information would have to be finally made by the Tribunal.160 Other tribunals have accepted the relevance of national laws in the application of the ‘special political or institutional sensitivity’ objection to production. In ADF v United States, the Respondent invoked ‘government deliberative and pre-decisional privileges.’ The Tribunal ruled that for it to be able to determine the applicability of the privileges adverted to, the Respondent will have to specify the documents in respect of which one or more privilege is claimed and the nature and scope of the particular privilege claimed, and show the applicability of the latter to the former.161

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In Bilcon v Canada, a NAFTA claim brought under the UNCITRAL Arbitration Rules, the Respondent sought to withhold from production documents evidencing deliberations of the federal and provincial governments, as well as other governmental decision-making bodies. The Tribunal noted that the parties were in agreement that the refusal of a party to produce documents on the basis of their asserted ‘special political or institutional sensitivity’ required ‘a balancing process’; this process would involve weighing ‘the compelling nature of the requested party’s asserted sensitivities’ against ‘the extent to which disclosure would advance the requesting party’s case.’162 The Bilcon tribunal ruled that: for a party to assert privilege on grounds of political and institutional sensitivity in the context of NAFTA Chapter Eleven proceedings, it must first demonstrate that it carried out the requisite balancing exercise in the course of its review of requested documents, on a document-by-document basis, supervised by sufficiently senior legal or regulatory counsel, and that where such review is not carried out by legal counsel familiar with the arbitration, the balancing exercise must be guided by instructions from counsel familiar with the case. Along with a description of the contents of the document and an explanation of grounds for claiming the privilege, a satisfactory account of whether

159 160 161 162

Biwater Gauff v Tanzania, Procedural Order No 2 (24 May 2016) 8. ibid 9. ADF v United States (AF), Award (9 January 2003) para 38. Bilcon v Canada (UNCITRAL), Procedural Order No 13 (11 July 2012) para 22.

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and how the party claiming privilege carried out the appropriate balancing process may be necessary to present the privilege claim to the tribunal.163

Occasionally, the desire to withhold sensitive information is expressed by the claimant. In Zhinvali v Georgia, the parties had entered into a confidentiality agreement.164 The material supplied by the Claimant included a ‘financial model.’ The Respondent argued that this model could only be analyzed in depth if it were to be provided in electronic form. The Claimant refused to supply the electronic version arguing that it was at the core of its competitive position and strictly proprietary. The Tribunal ordered the delivery of the model’s electronic version to the Respondent to the extent it was relevant for the calculation of lost profits. In case the electronic version was not supplied the Tribunal would not take the financial model into account for ascertaining the quantum of damages, if any. The Claimant did not supply the financial model’s electronic version.165 The broad and general nature of a request for documents can be a problem. Art. 3(3)(a)(ii) of the IBA Rules stresses that requests for production of documents should describe in sufficient detail ‘narrow and specific’ categories of documents which ‘are reasonably believed to exist.’ Therefore, tribunals have insisted that the documents requested be precisely identified.166 In some cases, tribunals denied requests for production of documents since the requests were too broad. In Churchill and Planet Mining v Indonesia, the Tribunal rejected a number of document requests because they were overbroad.167 Similarly, in Noble Ventures v Romania, the Tribunal said that it was ‘not in a position to identify, within the many and broad requests submitted by Claimant, which documents must be considered relevant and material for the Tribunal to decide on the relief sought.’168 In Aguas del Tunari v Bolivia, the Tribunal found that the requests for documents in the main did not specifically identify documents, but were general. It ruled that the parties’ arguments as to the necessity of requests for production of documents were insufficiently developed to make an order upon them.169 In Biwater Gauff v Tanzania, the Tribunal ordered the production of documents which comprised ‘a specifically identified, narrow category of documents that are of obvious potential relevance and materiality to the issues in dispute.’170 The Tribunal took a different position with respect to other requests which comprised broad categories of documents. In view of the potential burden of meeting such requests, it concluded

163 164 165 166 167 168 169 170

ibid para 24. Zhinvali v Georgia, Award (24 January 2003) paras 35–37. ibid paras 47–53. See also Waste Management v Mexico II (AF), Award (30 April 2004) para 21; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) para 22 (quoting Procedural Order No 1). Churchill and Planet Mining v Indonesia, Procedural Order No 5 (19 March 2013) Annex A, items 1, 3, 6, 7, 9–11. Noble Ventures v Romania, Award (12 October 2005) para 20 (incorporating Procedural Order No 1, paras 7, 9.1). Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 24–28, 324–327. Biwater Gauff v Tanzania, Procedural Order No 1 (31 March 2006) para 104.

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that it would be more appropriate to give these issues further consideration and deal with them through a ‘Redfern Schedule’ procedure.171

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There is no doubt that witness testimony is covered by the Convention’s term ‘other evidence’ (History, Vol. II, p. 806) (see paras. 93–94 supra). Since the tribunal has no power to subpoena witnesses, their appearance will normally be arranged by the parties (see paras. 69, 74 supra). The tribunal may however request the parties to produce witnesses on its own motion or following a party’s request.172 In Duke Energy v Peru, the parties indicated, during the pre-hearing call, that they did not wish to produce any witnesses. The Tribunal nonetheless requested them to call one witness each at the hearing in order to address the history of negotiations between the parties. The parties agreed and called one witness each as instructed by the Tribunal.173 There is recurrent reference to witness testimony in decisions of ICSID tribunals. In most instances, the fact that witnesses were presented by, or appeared for, one or the other party is mentioned specifically.174 In some cases, the tribunal’s summary of the proceedings states that the witnesses were examined by both parties as well as by the tribunal.175 The examination of witnesses is governed by Arbitration Rule 35: Examination of Witnesses and Experts (1) Witnesses and experts shall be examined before the Tribunal by the parties under the control of its President. Questions may also be put to them by any member of the Tribunal. (2) Each witness shall make the following declaration before giving his evidence: ‘I solemnly declare upon my honour and conscience that I shall speak the truth, the whole truth and nothing but the truth.’176

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Witnesses will normally testify before the tribunal and in the presence of the parties. Exceptionally, this rule may be waived. Arbitration Rule 36 provides:

171 ibid paras 107–113. Biwater Gauff and Tanzania subsequently submitted their respective requests for production of documents in the form of a ‘Redfern Schedule’ and the Tribunal ruled on the matter with Procedural Order No 2 of 24 May 2006. The Redfern Schedule takes its name from the British practitioner, Alan Redfern. For a description of a ‘Redfern Schedule,’ see Nigel Blackaby and Constantine Partasides, Redfern and Hunter on International Arbitration (6th edn, OUP 2015) paras 6.100–6.103. 172 Champion Trading v Egypt, Award (27 October 2006) paras 15–16; Maffezini v Spain, Award (13 November 2000) paras 26, 27. 173 Duke Energy v Peru, Decision on Jurisdiction (1 February 2006) para 20. 174 See eg UAB v Latvia, Award (22 December 2017) paras 16, 26; Churchill and Planet Mining v Indonesia, Award (6 December 2016) paras 21, 32, 54, 67, 75; 83; Metal-Tech v Uzbekistan, Award (4 October 2013) para 100; Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 17; Santa Elena v Costa Rica, Award (17 February 2000) paras 45, 46; Azinian v Mexico (AF), Award (1 November 1999) paras 71–72, 112; Tradex v Albania, Award (29 April 1999) para 36. 175 See eg Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) para 172; Wena Hotels v Egypt, Award (8 December 2000) para 9; Maffezini v Spain, Award (13 November 2000) para 33. 176 See also Art. 42 of the Arbitration (Additional Facility) Rules.

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Witnesses and Experts: Special Rules Notwithstanding Rule 35 the Tribunal may: (a) admit evidence given by a witness or expert in a written deposition; and (b) with the consent of both parties, arrange for the examination of a witness or expert otherwise than before the Tribunal itself. The Tribunal shall define the subject of the examination, the time limit, the procedure to be followed and other particulars. The parties may participate in the examination.177

The probative value of testimony not given directly before the tribunal may be subject to doubt (see paras. 146–155 infra). Written depositions by witnesses should be notarized or attested in another appropriate manner. The examination of witnesses other than before the tribunal is subject to the consent of both parties.178 In addition, the parties may participate in such an examination. The tribunal may appoint one of its members or another trustworthy person or body as ‘commissioner’ or ‘examiner’ for the purpose of taking such evidence.179 The 2010 IBA Rules provide in Art. 4(7):

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If a witness whose appearance has been requested . . . fails without a valid reason to appear for testimony at an Evidentiary Hearing, the Arbitral Tribunal shall disregard any Witness Statement related to that Evidentiary Hearing by that witness unless, in exceptional circumstances, the Arbitral Tribunal decides otherwise.

As noted above, many tribunals use the IBA Rules as a guide, and tribunals have discretion in deciding whether – in the absence of oral testimony – a written statement or an affidavit filed by a witness is admissible as evidence, or whether it should be disregarded. A witness may fail to appear at the hearing to give oral evidence for various reasons. The witness’s non-appearance may be due to illness; it may be caused by legal action taken by the other party; it may be a result of pressure that is applied by the other party; it may be due to conflicting employment obligations; it may result from a failure to make appropriate travel or visa arrangements; or there may be no explanation for the witness’s failure to appear.180 Tribunals have had to exercise their discretion in deciding whether the stated reason is ‘valid,’ and whether the witness’s written witness statement or expert report should remain on the record, or whether it should be disregarded. A study of arbitral practice reveals that where the witness’s non-appearance is for reasons outside the party’s (or the witness’s) control, tribunals have generally declared the witness testimony to be admissible, but they may accord such testimony less weight than if the witness had been available for cross-examination.181 In Tradex v Albania, Tradex submitted written witness statements. The witness did not come to the hearing to present oral testimony. Albania had requested his appearance

177 See also Art. 43 of the Arbitration (Additional Facility) Rules. 178 See CSOB v Slovakia, Decision on Jurisdiction (24 May 1999) para 14; Azinian v Mexico (AF), Award (1 November 1999) para 71. 179 See Notes to Arbitration Rule 35 of 1968, (1993) 1 ICSID Reports 97. 180 See esp Chester Brown and Patrick Still, ‘The Status of the Testimony of the Non-Appearing Witness in International Arbitration’ (2020) 35 ICSID Rev 369. 181 ibid.

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and objected to the acceptance of the written statements without cross-examination. The Tribunal found that, in view of the Claimant’s burden of proof, the written statements of a single witness who was not available for questioning at the hearing was not sufficient to prove the point in issue.182 In Enron v Argentina, a witness was prevented from attending the hearing by an injunction issued by an Argentine judge at the request of the Respondent. The Tribunal decided that the written statement filed by the witness was admissible.183 By contrast, the same Tribunal disregarded the testimony of a witness who submitted a written statement, but could not be cross-examined and gave no satisfactory explanation for his absence from the hearing.184 In Cargill v Poland, the Claimant submitted a written witness statement which was signed by a former Minister of the State Treasury. The Respondent requested that he attend the hearing for cross-examination, but the Claimant informed the Tribunal that he was unable to attend for reasons which were described by the Tribunal as ‘allegedly valid.’185 The Tribunal acceded to a request by Poland not to consider the witness statement in question, ‘as there were no exceptional circumstances or valid reasons’ for the witness’s non-appearance at the hearing.186 Similarly, in Churchill and Planet Mining v Indonesia, one of the Respondent’s witnesses was unavailable to testify at the hearing. The Tribunal ‘invited counsel for the Respondent to inform Mr. Noor that the Tribunal would appreciate the opportunity of hearing Mr. Noor in the course of the document authenticity hearing.’187 Mr. Noor did not attend the hearing, and the Tribunal decided to disregard his witness statement.188 In Ruby Roz v Kazakhstan, the Claimant’s three principal fact witnesses were served with a summons to appear before a Lebanese juge d’instruction on a charge of alleged premeditated murder 5 days before a hearing was due to take place.189 Separately, the Greek Intelligence Services commenced an investigation into persons affiliated with the Claimant. The Claimant requested that the testimony of the three witnesses be postponed to a later hearing, and sought provisional measures from the Tribunal restraining Kazakhstan from (inter alia) taking any steps which would prejudice the Claimant’s due process rights.190 The Claimant also informed the Tribunal that, following these events, none of the Claimant’s other non-European witnesses wished to appear before the Tribunal. The Respondent sought an order that the nine witness statements in question be struck from the record, and that the Claimant be barred from cross-examining the Respondent’s witnesses.191 The Tribunal determined that the witness statements would be ‘maintained on the record and given the weight that the Tribunal deems appropriate,’ adding that ‘the Tribunal will find it difficult to put weight on uncorroborated testimony

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Tradex v Albania, Award (29 April 1999) paras 184, 185. To the same effect, see Sempra v Argentina, Award (28 September 2007) paras 31, 37, 44, 156. Enron v Argentina, Award (22 May 2007) para 142. Cargill v Poland (UNCITRAL), Final Award (29 February 2008) para 51. ibid. Churchill and Planet Mining v Indonesia, Award (6 December 2016) para 80. ibid para 84. Ruby Roz v Kazakhstan (UNCITRAL), Award on Jurisdiction (1 August 2013) para 126. ibid para 127. 191 ibid paras 127–131.

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on an important, contested subject where the witness has not appeared for crossexamination or examination by the Tribunal when called.’192 In Quiborax v Bolivia, one of the Claimant’s witnesses passed away before the hearing. The Claimants requested the Tribunal to treat his witness statement as having ‘probative value,’ whereas the Respondent referred to its inability to cross-examine the witness.193 The Tribunal decided that it would ‘attempt to rely on the remainder of the evidence presented by the Parties to reach its decision. Should the Tribunal need to rely on the evidence submitted by Mr. Astudillo when carrying out its analysis, it will clearly state so.’194 Tribunals have refused to hear oral testimony from witnesses who have not submitted a written witness statement. In Burimi v Albania, the Claimant intended to call such witnesses, but the Tribunal decided that to hear such witnesses would be ‘prejudicial to Respondent, which would not be in a position to prepare cross-examination.’195 Likewise, in ST-AD v Bulgaria, the Tribunal acceded to the Claimant’s request to produce a new witness for the hearing on the condition that the Claimant file a written witness statement for his testimony.196 In Vivendi v Argentina, the parties had agreed that statements of witnesses who were not also heard at the hearing should not be taken into evidence by the Tribunal.197 Prior to the hearings on the merits, a witness for the Claimants fell ill and was unable to attend the hearing. Similarly, during the hearing, one of the witnesses for Argentina also fell ill and could not attend the hearing. In both cases, medical certificates were produced at the Tribunal’s request. The parties agreed to admit into evidence the written statements submitted by the witnesses in spite of their inability to be present at the hearing, having regard to the medical certificates they both filed.198 Also in Vivendi v Argentina, a different situation arose when the Respondent requested that one of its witnesses be heard by video conference, without providing further justification. The Claimants opposed the application. The Tribunal denied Argentina’s application to present the witness by video conference, noting that no reasons had been given for the witness’s inability to attend the hearing. It granted the Claimants’ request to have the relevant witness statement stricken from the record. The Tribunal’s decision was influenced, inter alia, by the fact that the Respondent had been offered a number of opportunities to explain the witness’s whereabouts and the reason for his absence but had failed to do so.199 Many tribunals have permitted the examination of witnesses and experts by video conference, which is expressly foreseen in Art. 8(1) of the IBA Rules.200 The parties may reach agreement on whether they will cross-examine each other’s witnesses, and how this affects the status of the witness statements. In Lao Holdings v

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ibid para 136. Quiborax v Bolivia, Award (16 September 2015) paras 93–94. ibid para 97. Burimi v Albania, Award (29 May 2013) para 71. ST-AD v Bulgaria (UNCITRAL), Award on Jurisdiction (18 July 2013) paras 67, 77. Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) para 2.4.3. ibid paras 2.7.6–2.7.8. 199 ibid paras 2.7.9–2.7.16. Metal-Tech v Uzbekistan, Award (4 October 2013) paras 96–99; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 41; Fraport v Philippines I, Award (16 August 2007) para 43.

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Laos, one of the Respondent’s witnesses was unable to attend the hearing due to his inability to obtain a visa (which was criticized by the Tribunal), and one of the Respondent’s key officials in the negotiations with the Claimant was not presented as a witness.201 Counsel for the parties agreed that: [C]ounsel for the Parties reached an agreement that the Claimant’s witness statements would be taken as read, some of the Laotian witness statements would be redacted, but as redacted would remain in evidence, that the two Laotian witness statements in respect of which the Claimant had waived cross-examination would be entered in full, and that no cross-examination would take place of anybody.202

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Counsel further agreed that neither side accepted ‘the truth of what’s in the witness statements, even the redacted witness statements,’ and counsel would make submissions on the witness statements.203 In Emmis v Hungary, counsel for the parties reached an agreement ‘not to crossexamine an Expert or Fact Witness on any point or points,’ and that this was ‘not to be taken by either Counsel or the Tribunal as an admission as to the accuracy or relevance of that point or points, and Counsel retain the right to make submissions to the Tribunal as to the accuracy, credibility, or probative value of any Expert or Fact Witness’ evidence.’204 In some cases, a party has chosen not to cross-examine a witness, on the basis that ‘it is not necessary to cross-examine a witness with whose testimony that party may disagree.’205 In AES v Hungary, the Tribunal noted that this meant the witness in question ‘was not confronted by Claimants on his evidence and his relevant testimony on process also stands uncontradicted by other testimony or contrary documentation.’206 In Fireman’s Fund v Mexico, Fireman’s Fund alleged that Mexico had exerted undue pressure on one of its witnesses not to testify at the hearing on the merits on its behalf and asked the Tribunal to issue an order calling for the witness to give testimony. Although the Tribunal did issue an order to this effect, the witness remained unavailable. In the circumstances, the Tribunal decided that the evidence that the witness had given in his first testimony ‘would not be declared inadmissible, without prejudice to its relevance, weight and materiality.’207 In Azinian v Mexico, an Additional Facility case, the question arose as to whether one party may approach the other party’s witnesses. The Claimants in that case complained that Mexico was violating Art. 43 of the Additional Facility Rules208 by contacting the Claimants’ witnesses and asked the Tribunal to establish an understanding to the effect that the witnesses produced by one side should not be contacted unilaterally by the other side. The Tribunal ruled that the issue is not covered by the Additional Facility Rules. The Tribunal added that it was not aware of any rule precluding communications

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Lao Holdings v Laos (AF), Decision on Jurisdiction (21 February 2014) paras 133–134. ibid para 151. 203 ibid para 152. Emmis v Hungary, Award (16 April 2014) para 18. See eg AES v Hungary, Award (23 September 2010) para 9.3.43. ibid. Fireman’s Fund v Mexico (AF), Award (17 July 2007) para 29. Art. 43 of the Arbitration (Additional Facility) Rules is largely identical with Arbitration Rule 36.

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between a party and a third-party witness. Thus, the Tribunal advised the parties that: (i) it declined ‘to restrict any party’s ability to interview witnesses who freely choose to meet with that party’s representative(s);’ (ii) the witness is free to answer or decline to answer any questions; (iii) any such witness must be informed in advance of his/her right to have his/her attorney present during the interview; (iv) statements made by a witness during such an interview shall not be received into evidence; (v) only signed written statements or testimony that are provided orally before the Tribunal have probative value; and (vi) the Tribunal did not require that a party that obtains the agreement of a witness to participate in an interview ask the other side to be present during the interview.209 A frequent issue before ICSID tribunals concerns the credibility of witnesses and the reliability of their testimony. This issue is discussed below in the section on ‘Probative Value’ (see paras. 146–155 infra).

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c) Experts Experts are mentioned specifically in Arbitration Rules 34, 35 and 36. Their testimony and examination are governed by the same rules as those for witnesses (see paras. 112–113 supra). In addition, Arbitration Rule 35(3) provides:

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(3) Each expert shall make the following declaration before making his statement: ‘I solemnly declare upon my honour and conscience that my statement will be in accordance with my sincere belief.’

Most investment treaties do not contain provisions on issues of evidence, but an exception can be found in the United States’ more recent treaty practice, as well as investment chapters in recent free trade agreements. The Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) of 2004 deals with investor–State dispute settlement in Chapter Ten, Section B. Art. 10.24 provides:

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Expert Reports Without prejudice to the appointment of other kinds of experts where authorized by the applicable arbitration rules, a tribunal, at the request of a disputing party or, unless the disputing parties disapprove, on its own initiative, may appoint one or more experts to report to it in writing on any factual issue concerning environmental, health, safety, or other scientific matters raised by a disputing party in a proceeding, subject to such terms and conditions as the disputing parties may agree.210

In ICSID proceedings, experts are often requested to give information on one of the parties’ initiative.211 At other times, experts are appointed directly by

209 Azinian v Mexico (AF), Award (1 November 1999) paras 53–56. 210 Dominican Republic–Central America Free Trade Agreement (DR–CAFTA) (signed 5 August 2004, in force). See also the United States–Mexico–Canada Agreement (USMCA) (signed 30 November 2018, entered into force 1 July 2020) Art. 14.D.11; US Model BIT (2012) Art. 32. 211 See eg Railroad Development Corp v Guatemala, Award (29 June 2012) para 24; PSEG v Turkey, Award (19 January 2007) para 320; World Duty Free v Kenya, Award (4 October 2006) para 163; Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) para 40; CMS v Argentina, Award (12 May 2005) para 418. See generally Nigel Blackaby and Alex Wilbraham, ‘Practical Issues Relating to the Use of Expert Evidence in Investment Treaty Arbitration’ (2016) 31 ICSID Rev 655.

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tribunals.212 Tribunals may also call upon parties to produce expert reports.213 In some cases, the tribunals retained independent experts to assess the various reports produced by the parties’ experts.214 A case in point is Perenco v Ecuador, in which the Tribunal decided that ‘there are certain issues of fact on which it is extremely difficult for it to make proper determinations,’ and it noted that ‘the expert evidence from both sides [did] not provide a sufficient degree of confidence as to the actual conditions in the Blocks.’215 The Tribunal held that there were ‘too many gaps and conflicts between IEMS’ and GSI’s evidence on these key issues.’216 The Tribunal observed that it did ‘not possess the requisite technical expertise to decide between experts’ disagreements over highly technical issues,’ and that it was ‘equally uncomfortable with simply picking one set of experts’ conclusions over the other.’217 It therefore concluded that ‘it must require an additional phase of fact-finding in order to arrive at a proper and just conclusion,’ and it appointed its own independent environmental expert who would be instructed ‘to apply the Tribunal’s findings set out above and work with the Tribunal and the Parties to enable the Tribunal to determine the extent of contamination in the Blocks for which compensation is owed.’218 The experts employed are usually financial experts or chartered accountants, but have also included environmental consultants (such as in Perenco). Their reports have been given in writing, and have been provided to the parties for their comments.219 In SOABI v Senegal, the Respondent was dissatisfied with the Claimant’s calculations concerning its operating expenses and capital expenditures. Therefore, the Respondent demanded that SOABI’s accounts be audited by an expert of the Tribunal’s choosing. The Government added that the expert’s expenses should be paid by SOABI, which had failed to explain any of its figures.220 The Tribunal appointed a professional accountant, who submitted a detailed report which was accepted by the Tribunal. The Tribunal also accepted the Government’s position that the fees and expenses of the expert should be borne by SOABI.221

212 See eg Perenco v Ecuador, Interim Decision on Environmental Counterclaim (11 August 2015) paras 587, 611; Abaclat and others v Argentina, Procedural Order No 15 (20 November 2012) para 12; Sempra v Argentina, Award (28 September 2007) paras 47–51; LG&E v Argentina, Decision on Liability (3 October 2006) para 32; CMS v Argentina, Award (12 May 2005) paras 50–51; AMT v Zaire, Award (21 February 1997) para 7.19. 213 See eg AES v Argentina, Decision on Jurisdiction (26 April 2005) para 83. 214 See eg CMS v Argentina, Award (12 May 2005) para 418; Enron v Argentina, Award (22 May 2007) paras 38, 364; Sempra v Argentina, Award (28 September 2007) para 47. 215 Perenco v Ecuador, Interim Decision on Environmental Counterclaim (11 August 2015) para 583. 216 ibid. 217 ibid para 585. 218 ibid paras 586–587. 219 See eg Perenco v Ecuador, Interim Decision on Environmental Counterclaim (11 August 2015) para 611(2); Abaclat and others v Argentina, Consent Award (29 December 2016) para I(x)–(y); Sempra v Argentina, Award (28 September 2007) paras 50, 51; LG&E v Argentina, Decision on Liability (3 October 2006) para 32; CMS v Argentina, Award (12 May 2005) para 418; AMT v Zaire, Award (21 February 1997) paras 7.19–7.20; SOABI v Senegal, Award (25 February 1988) paras 1.36–1.38; LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 348–349; Benvenuti & Bonfant v Congo, Award (15 August 1980) paras 1.24, 4.77–4.78. 220 SOABI v Senegal, Award (25 February 1988) paras 9.04–9.05. 221 ibid paras 9.05–9.25.

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In PSEG v Turkey, the Tribunal noted that the amounts claimed under one of the Claimant’s heads of claim had been the subject of a detailed audit by the Claimant’s experts who had also taken into account comments made by Turkey and had revised the figures accordingly. Thus, the Tribunal relied on these reports as offering ‘a solid basis on which to proceed.’222 In Middle East Cement v Egypt, the Tribunal used its discretion under Rule 34 and held that it would be too time-consuming and expensive to seek an independent expert opinion to assess the value of a ship. Instead, the Tribunal preferred to obtain an estimate of its value from the evidence available in the record of the case.223 In SPP v Egypt, the Respondent formally requested the Tribunal to order an expert opinion on certain expenses claimed by the Claimants. Instead, the Tribunal issued a procedural order requesting further information from the parties.224 In some cases, the parties submitted expert opinions not on questions of fact, but on questions of law.225 In Aguas del Tunari v Bolivia, the Respondent indicated that it intended to produce two expert witnesses and asked that all witnesses relied upon by the Claimant be made available for cross-examination. The Claimant stated that it did not intend to have any expert witnesses present at the hearing and argued that crossexamination of experts was expensive and unnecessary since they were testifying on points of law and not of fact. The Tribunal held that it is customary in international arbitration to make witnesses available for examination, if so requested, whether they are experts in law or witnesses of fact.226 In World Duty Free v Kenya, the Tribunal relied on the opinion of a legal expert submitted by the Respondent not as expert evidence by a party-appointed witness, but ‘as part of the materials submitted by Respondent.’ The Tribunal found the opinion useful not only because of the authority of the expert (Lord Mustill), who was referred to by the Tribunal as ‘one of the most eminent jurists in England,’ but also because counsel for the Claimant expressed general agreement with the expert opinion’s treatment of English legal principles. The Tribunal also stressed that the expert was not expressing views as to the facts of the case and noted that, had he done so, the Tribunal would have discounted his views since it was only concerned to ascertain the relevant legal principles.227

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2. Probative Value ICSID arbitration is not governed by formal rules nor by national laws on evidence. ICSID tribunals have full discretion in assessing the probative value of any piece of evidence introduced before them. This fact is stated specifically in Arbitration Rule 34(1) (see para. 17 supra).228 222 223 224 225

PSEG v Turkey, Award (19 January 2007) para 320. Middle East Cement v Egypt, Award (12 April 2002) para 150. SPP v Egypt, Award (20 May 1992) para 37. See eg Wena Hotels v Egypt, Award (8 December 2000) para 9; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) para 137; Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 48, 91, 119, 135; Siemens v Argentina, Award (6 February 2007) paras 202, 233, 390. 226 Aguas del Tunari v Bolivia, Decision on Jurisdiction (21 October 2005) paras 39–42. See also ibid paras 173–174. 227 World Duty Free v Kenya, Award (4 October 2006) para 163. 228 See also Note A to Arbitration Rule 33 of 1968, (1993) 1 ICSID Reports 95.

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Tribunals have followed these principles.229 The Tribunal in Ambiente Ufficio and others v Argentina observed that ‘ICSID arbitration is not governed by formal rules nor by national laws on evidence. ICSID tribunals have full discretion in assessing the probative value of any piece of evidence introduced before them.’230 Likewise, the Tribunal in Soufraki v UAE stated that, as an international tribunal, it was not bound by the rules of evidence of Italian civil procedure. It held that the weight to be assigned to the evidence in ICSID proceedings is only determined by Rule 34(1) of the ICSID Arbitration Rules. The Tribunal accepted Mr. Soufraki’s certificate of nationality as prima facie evidence and thus falling within the purview of Art. 43 of the Convention.231 In Middle East Cement v Egypt, the Claimant accused the Respondent of having submitted into the evidence ‘untrue documents.’ The Respondent requested the deletion of these accusations from the Claimant’s post-hearing brief. Pursuant to ICSID Rule 34, the Tribunal held that it is ‘the judge of the admissibility and probative value of the documents submitted by the Respondent and the Tribunal is not in any way bound by the evaluations given by the Claimant and the Respondent.’232 The Claimant in Generation Ukraine v Ukraine argued that it was hampered in discharging its burden of proof by the fact that the main documentary evidence showing its expenditures in Ukraine had been accidentally destroyed. The Claimant thus contended that it was obliged to rely on financial reports and other evidence to substantiate its alleged expenditures. The Tribunal expressed serious reservations as to the credibility and reliability of the evidence submitted by the Claimant and held that the latter had been unable to discharge its burden of proof in spite of the fact that several avenues were open to it to obtain such evidence.233 ICSID tribunals often proceed to a detailed examination of the evidence before them.234 In Vacuum Salt v Ghana, the Tribunal emphasized the superior value of evidence obtained at hearings and the importance of observing the witnesses.235 A frequent issue before ICSID tribunals concerns the credibility of witnesses and the reliability of their testimony. Tribunals have discarded witness testimony as untruthful or in error on a number of occasions.236 In Rompetrol v Romania, the Tribunal noted in relation to one of the Claimant’s witnesses that his evidence ‘should be treated with a substantial dose of scepticism, and should not in any event be regarded on its own, without more specific corroboration, as reaching the level of certainty necessary establish allegations of this level of

229 See also AAPL v Sri Lanka, Award (27 June 1990) para 56. 230 Ambiente Ufficio and others v Argentina, Award (8 February 2013) para 318. 231 Soufraki v UAE, Award (7 July 2004) paras 59–63 (citing the First Edition of this Commentary with approval). 232 Middle East Cement v Egypt, Award (12 April 2002) paras 74–75, 92–94. 233 Generation Ukraine v Ukraine, Award (16 September 2003) paras 19.2 ff, 19.15, 19.26. 234 See eg Amco v Indonesia, Award (20 November 1984) paras 94 ff; Generation Ukraine v Ukraine, Award (16 September 2003) paras 19.5 ff. 235 Vacuum Salt v Ghana, Award (16 February 1994) para 45. 236 See eg Vivendi v Argentina, Resubmitted Case: Award (20 August 2007) paras 4.13.7–4.13.10; PSEG v Turkey, Award (19 January 2007) paras 177, 178; Fraport v Philippines I, Award (16 August 2007) paras 328, 329; Generation Ukraine v Ukraine, Award (16 September 2003) para 19.7.

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seriousness.’237 The Tribunal was also critical of one of the Respondent’s witnesses, who was a representative of Romania’s Superior Council of Magistry, ultimately concluding that her oral evidence ‘as an oral witness . . . did no credit to the Respondent’s case,’238 because the witness approached the giving of evidence in a way that appeared to exclude any thought that her appearance as a witness in arbitral proceedings might bring with it a duty of some kind towards the Tribunal to assist it in its efforts to understand the material before it and the significance of that material in the context of the arbitration.239

In the jurisdictional phase of Plama v Bulgaria, the Respondent complained that Plama’s explanations as to its ownership and control by an individual who testified at the hearing on its behalf were ‘belated, incomplete, unreliable, incredible and even where technically correct, less than the whole truth.’ Bulgaria requested that the Tribunal reject the testimony. The Tribunal, while recording that the evidence in question was not only unsupported by the contemporary record but also appeared materially inconsistent with parts of the contemporary documentary evidence and with statements apparently attributable to the same witness, did not wish to reject the witness’s testimony as false at that stage of the proceedings. For the Tribunal, the issues involved were not relevant only for jurisdiction but also overlapped with the merits of the case.240 In Noble Ventures v Romania, the Respondent relied on the testimony of a Romanian official who recalled that he had a telephone conversation with a representative of Noble Ventures. Noble Ventures denied that such a conversation had ever taken place and pointed to the absence of any record or contemporary reference to such a telephone conference. The Tribunal declined to rely on the official’s ‘uncorroborated and disputed evidence’ regarding this telephone conversation.241 In ADC v Hungary, the Tribunal accepted the testimony of ADC’s witnesses as it gave ‘the Tribunal confidence that it could be relied upon’ and was consistent with their written statements. By contrast, the Tribunal found that testimony of one of the witnesses for Hungary cast serious doubts on the soundness of the testimony provided by two other of its witnesses. Thus, the Tribunal considered the testimony of Hungary’s witnesses, not only in the light of the evidence provided by the other side, but also in the light of the testimony of its own witnesses, and concluded that the evidence of ADC’s witnesses was to be preferred.242

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3. Burden of Proof ICSID tribunals have applied several rules regarding the burden of proof concerning facts upon which the parties rely. These rules are well established in international adjudication. The rules are as follows:

237 238 239 240 241 242

Rompetrol v Romania, Award (6 May 2013) paras 221–224. ibid para 244. ibid para 243. See also Tradex v Albania, Award (29 April 1999) paras 158, 164, 171, 175, 182–183. Plama v Bulgaria, Decision on Jurisdiction (8 February 2005) paras 177, 178. Noble Ventures v Romania, Award (12 October 2005) paras 96–98. ADC v Hungary, Award (2 October 2006) paras 250–257.

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s normally the burden of proof is with the claimant;243 s the burden of proof lies with the party asserting a fact, whether it is the claimant or the respondent;244 s if a party adduces evidence that proves prima facie the facts alleged, the burden of proof may shift to the other party, who needs to produce evidence to rebut the presumption.245 157

The Tribunal in Metal-Tech explained the applicable principles as follows: As a general matter, since the claims brought in this arbitration seek to establish the responsibility of a State for breach of the latter’s international obligations, it is appropriate to apply international law to the burden of proof. The principle that each party has the burden of proving the facts on which it relies is widely recognised and applied by international courts and tribunals. The International Court of Justice as well as arbitral tribunals constituted under the ICSID Convention and under the NAFTA have characterized this rule as a general principle of law. Consequently, as reflected in the maxim actori incumbat probatio, each party has the burden of proving the facts on which it relies.246

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ICSID tribunals have developed a particular approach to the burden of proof for purposes of jurisdiction, which has been adapted from that taken by Judge Rosalyn Higgins in her separate opinion in the Oil Platforms case.247 Under this approach the tribunal will examine whether the facts alleged, if proven, are capable of establishing jurisdiction. In other words, the tribunal will assess whether the claimant’s case is reasonably arguable on its face.248 Numerous tribunals have adopted this prima facie approach.249

243 SOABI v Senegal, Award (25 February 1988) para 9.23; AAPL v Sri Lanka, Award (27 June 1990) para 56; Tradex v Albania, Award (29 April 1999) paras 73–75; Middle East Cement v Egypt, Award (12 April 2002) paras 88–91; Generation Ukraine v Ukraine, Award (16 September 2003) paras 19.1, 19.4; CSOB v Slovakia, Award (29 December 2004) paras 225–226; Noble Ventures v Romania, Award (12 October 2005) para 100; Salini v Jordan, Award (31 January 2006) paras 70–75; Tokios Tokelés v Ukraine, Award (26 July 2007) paras 121, 122. See also Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP 1987) 327–331. 244 Feldman v Mexico (AF), Award (16 December 2002) para 177; Soufraki v UAE, Award (7 July 2004) paras 58, 81; Thunderbird v Mexico (UNCITRAL), Award (26 January 2006) para 95; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 83. See also Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States) (Jurisdiction and Admissibility) [1984] ICJ Rep 437, para 101; Avena and other Mexican Nationals (Mexico v United States) [2004] ICJ Rep 41, paras 55–57. See also Art. 27(1) of the 2013 UNCITRAL Arbitration Rules. 245 See eg ConocoPhillips v Venezuela, Award (8 March 2019) para 275; Karkey v Pakistan, Award (22 August 2017) para 497; Thunderbird v Mexico (UNCITRAL), Award (26 January 2006) paras 92–95; Zhinvali v Georgia, Award (24 January 2003) para 311; Feldman v Mexico (AF), Award (16 December 2002) para 177; Middle East Cement v Egypt, Award (12 April 2002) paras 94, 170; AAPL v Sri Lanka, Award (27 June 1990) para 56. But see Rompetrol v Romania, Award (6 May 2013) paras 178–180; Siag v Egypt, Award (1 June 2009) paras 317–318. 246 Metal-Tech v Uzbekistan, Award (4 October 2013) para 237. 247 Oil Platforms (Iran v United States), Separate Opinion [1996] ICJ Rep 856, paras 32–34. 248 For detailed treatment, see Audley Sheppard, ‘The Jurisdictional Threshold of a Prima Facie Case’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 932. 249 See eg Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) paras 201–213; Churchill Mining v Indonesia, Decision on Jurisdiction (24 February 2014) para 96; Khan Resources v Mongolia

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The Tribunal in Bayindir v Pakistan, following this approach, described the Tribunal’s task in this regard as follows:

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Accordingly, the Tribunal’s first task is to determine the meaning and scope of the provisions which Bayindir invokes as conferring jurisdiction and to assess whether the facts alleged by Bayindir fall within those provisions or are capable, if proved, of constituting breaches of the obligations they refer to. In performing this task, the Tribunal will apply a prima facie standard, both to the determination of the meaning and scope of the BIT provisions and to the assessment whether the facts alleged may constitute breaches. If the result is affirmative, jurisdiction will be established, but the existence of breaches will remain to be litigated on the merits.250

To similar effect, the Tribunal in Casinos Austria v Argentina explained that:

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The task of the Tribunal . . . is therefore to determine whether the facts pleaded by Claimants, if established to be true, could possibly result in a breach of the Argentina– Austria BIT. This test has implications both for the treatment of questions of fact as well as for questions of interpretation and application of the applicable law at the jurisdictional stage.251

F. ‘. . . and (b) visit the scene connected with the dispute, and conduct such inquiries there as it may deem appropriate.’ Arbitration Rule 34(2)(b) paraphrases this portion of Art. 43 by authorizing the tribunal to ‘visit any place connected with the dispute or conduct inquiries there.’ Arbitration Rule 37 is more specific:

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Visits and Inquiries; . . . (1) If the Tribunal considers it necessary to visit any place connected with the dispute or to conduct an inquiry there, it shall make an order to this effect. The order shall define the scope of the visit or the subject of the inquiry, the time limit, the procedure to be followed and other particulars. The parties may participate in any visit or inquiry.

Whereas documents, witness testimony and expert opinions may be obtained without a formal procedural step under the ICSID Arbitration Rules, visits and inquiries require

(UNCITRAL), Decision on Jurisdiction (25 July 2012) paras 321–324; Desert Line v Yemen, Award (6 February 2008) paras 129–31; MCI v Ecuador, Award (31 July 2007) paras 162, 163; Kardassopoulos v Georgia, Decision on Jurisdiction (6 July 2007) paras 103, 104; Siag v Egypt, Decision on Jurisdiction (11 April 2007) paras 139–141; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) paras 83–91, 129–134, 144–147, 149; Helnan v Egypt, Decision on Jurisdiction (17 October 2006) paras 73, 81, 91, 94; Telenor v Hungary, Award (13 September 2006) paras 34, 53, 68, 80; Total v Argentina, Decision on Jurisdiction (25 August 2006) paras 52–55; Pan American v Argentina, Decision on Preliminary Objections (27 July 2006) paras 43–51, 131; LESI & Astaldi v Algeria, Decision on Jurisdiction (12 July 2006) para 84(iv); Jan de Nul v Egypt, Decision on Jurisdiction (16 June 2006) paras 69–71; El Paso v Argentina, Decision on Jurisdiction (27 April 2006) paras 40–45, 109. 250 Bayindir v Pakistan, Decision on Jurisdiction (14 November 2005) para 197 (footnote omitted). 251 Casinos Austria v Argentina, Decision on Jurisdiction (29 June 2018) para 207.

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a separate procedural order by the tribunal (see paras. 76–77 supra). The parties must be given the option to participate. The use of the word ‘there’ would indicate that any inquiry must be connected to the location of a visit. But the broad concept of evidence used in para. (a) of Art. 43 would also include inquiries not linked to a particular locality. Under Arbitration Rule 37, the word ‘or’ indicates that visits by the tribunal and inquiries are alternatives. There is no good reason why a tribunal should not entrust an inquiry to a competent individual or to somebody or organization in analogy to witness testimony under Arbitration Rule 36.252 If a particular visit or inquiry is undertaken upon a party’s wish or insistence, the costs arising therefrom may be charged to that party (see paras. 42–43 supra). In SOABI v Senegal, there is a brief reference to a visit by the Tribunal’s President to Dakar where he held discussions with persons who might eventually be appointed as experts. There is no mention of a procedural order in relation to the visit.253 Tribunals have on several occasions decided to ‘visit the scene connected with the dispute.’254 In Unglaube v Costa Rica, the Tribunal and the parties undertook a site visit ‘to the Guanacaste region in Costa Rica,’ the site of a national marine park which was the natural habitat of an endangered species of turtle.255 The Tribunal appears to have been moved by the site visit, noting in its Award that surely, none of us will forget the spectacle of Playa Grande beach, lit by full moon at about 1.00am on December 22, when a large female leatherback (roughly 2 metres in length and 1 metre in width) finished digging her nest, deposited some 50 soft eggs somewhat larger than tennis balls, and began to cover them.256

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In Wintershall v Argentina, the Argentine Government extended an invitation to the Tribunal to visit the Argentine Republic ‘in order to conduct inquiries into the alleged lack of independence of Argentine courts and to make an order to this effect pursuant to Rule 37 of the Arbitration Rules.’257 The Tribunal did not consider it necessary to make such a visit.258 In Micula v Romania I, the Claimants made numerous proposals that the Tribunal conduct a site visit; this was opposed by the Respondent, on the grounds that this request was being used by the Claimants ‘to present an entirely new case on damages, which was impermissible at this stage of proceedings.’259 The Tribunal concluded that a site visit ‘would not enlighten [it] at that stage in the proceedings, as any information

252 See also the Note to Arbitration Rule 36 of 1968, (1993) 1 ICSID Reports 97. 253 SOABI v Senegal, Award (25 February 1988) para 135. 254 Antonio R Parra, ‘The Role of the ICSID Secretariat in the Administration of Arbitration Proceedings under the ICSID Convention’ (1998) 13 ICSID Rev 85, 95. 255 Unglaube v Costa Rica, Award (16 May 2012) paras 21–23, 37–39, 163–165. 256 ibid para 165. 257 Wintershall v Argentina, Award (8 December 2008) para 38(11). 258 ibid. 259 Micula v Romania I, Award (11 December 2013) paras 29, 31, 58, 113–114.

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gleaned from such visit would be either irrelevant for the resolution of the dispute or unnecessary given that the record supplied sufficient evidence, at least at that juncture’; however, the Tribunal did not rule out the possibility of a site visit after the hearing on the merits.260 When the Claimants later renewed their request for a site visit, the Tribunal rejected it, finding it to be ‘neither necessary nor useful for the resolution of the dispute.’261 The Tribunal confirmed this finding in its Award, noting that: Due to the characteristics of a site visit, it could not have provided further useful, certainly not documentary, evidence of advance planning of these investments; rather, it would have allowed the Tribunal to see the size and characteristics of the Claimants’ integrated platform and their ability to easily implement the Incremental Investments, which is sufficiently confirmed by evidence in the record.262

In Burlington Resources v Ecuador, in deciding on the Respondent’s counterclaims, the Tribunal (along with the parties and their representatives) carried out a visit of a number of sites within ‘Blocks 7 and 21’ to assist in gathering evidence on issues of soil contamination and land use.263 In a separate ICSID claim concerning the same issues, Perenco v Ecuador, the Tribunal engaged an independent expert who (accompanied by the parties and their representatives) conducted a site visit of the same locations.264 The Perenco tribunal did not attend the site visit, and this was therefore not a site visit within the meaning of Art. 43(b) of the ICSID Convention. Following the independent expert’s site visit in Perenco, Ecuador applied to the Burlington tribunal for the audio and video recordings of the independent expert’s site visit to Blocks 7 and 21 in Perenco to be placed on the record. The Burlington tribunal denied this application, finding that ‘the submission of the audio and video recording of the site visit in Perenco v Ecuador would not assist the resolution of the counterclaims in these proceedings.’265 In Al Tamimi v Oman, the Claimant applied to the Tribunal for an order directing the Respondent to permit the Claimant’s counsel and experts to conduct a site visit.266 It was not envisaged that the Tribunal would participate in the proposed site visit. The Tribunal acceded to the Claimant’s request and made an order directing the parties to cooperate and agree a time and protocol for the site visit.267 The fact that site visits are mentioned in the Convention means that the tribunal’s authority to make them cannot be denied by a country. Any Contracting Party to the Convention must admit the tribunal and the parties’ representatives for this purpose. 260 ibid para 58. 261 Micula v Romania I, Procedural Order (20 January 2011) (cited in Micula v Romania I, Award (11 December 2013) paras 113–114). 262 Micula v Romania I, Award (11 December 2013) para 1116. See also Santa Elena v Costa Rica, Award (17 February 2000) para 14, in which a possible site visit was considered a number of times by the Tribunal in the course of the proceedings. Eventually, the Tribunal concluded that a site visit would not be necessary. 263 Burlington v Ecuador, Decision on Counterclaims (7 February 2017) paras 18–27. 264 Perenco v Ecuador, Interim Decision on Environmental Counterclaim (11 August 2015) para 611(8)–(21) and Decision on Counterclaims (18 August 2017) para 31. 265 Burlington v Ecuador, Decision on Counterclaims (7 February 2017) para 33. 266 Al Tamimi v Oman, Award (3 November 2015) paras 10–11. 267 ibid, Procedural Order No 2 (28 September 2012). See also ibid, Award (3 November 2015) paras 10–11, 476–477.

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The special immunities accorded by Art. 21 of the Convention to arbitrators also apply to site visits. Art. 22 extends these privileges and immunities to the parties and their representatives as well as to witnesses and experts.268

268 A site visit was contemplated by the Tribunal in Santa Elena v Costa Rica, Award (17 February 2000) para 14, but was ultimately not undertaken.

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Article 44 Any arbitration proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Arbitration Rules in effect on the date on which the parties consented to arbitration. If any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the question.

OUTLINE Paragraphs I. INTRODUCTION 1–8 II. INTERPRETATION 9–91 A. ‘Any arbitration proceeding . . .’ 9–12 B. ‘. . . shall be conducted in accordance with the provisions of this Section . . .’ 13 C. ‘. . . and, except as the parties otherwise agree, . . .’ 14–36 1. Freedom of Choice 15–22 2. Limits on Choice 23–27 3. Modalities of Choice 28–36 D. ‘. . . in accordance with the Arbitration Rules . . .’ 37–47 1. Relationship of the Arbitration Rules to the Convention 37–38 2. Adoption and Amendment 39–42 3. Features 43–44 4. Related Rules and Regulations 45–47 E. ‘. . . in effect on the date on which the parties consented to arbitration.’ 48–59 1. The Inter-Temporal Rule 48–52 2. Agreement to Use Updated Version 53–59 F. ‘If any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the question.’ 60–91 1. The Tribunal’s Residual or Inherent Powers over Questions of Procedure 60–61 2. The Tribunal’s Power to Issue Procedural Orders 62–64 3. Examples of the Exercise by Tribunals of Residual or Inherent Powers 65–91 III. SPECIFIC PROCEDURAL QUESTIONS 92–185 A. Procedural Languages 92–103 B. Representation of the Parties 104–123 C. Written and Oral Procedure 124–140

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141–185 141–174 175–185

BIBLIOGRAPHY Antonietti, Aurélia, ‘The 2006 Amendments of the ICSID Rules and Regulations and the Additional Facility Rules’ (2006) 21 ICSID Review 427 Boisson de Chazournes, Laurence, ‘Transparency and Amicus Curiae Briefs’ (2004) 5 The Journal of World Investment & Trade 333 Brown, Chester, ‘The Inherent Powers of International Courts and Tribunals’ (2005) 76 The British Yearbook of International Law 195 A Common Law of International Adjudication (OUP 2007) ‘Inherent Powers in International Adjudication’ in Cesare PR Romano, Karen J Alter and Yuval Shany (eds), The Oxford Handbook on International Adjudication (OUP 2014) 828 Commission, Jeffery and Moloo, Rahim, Procedural Issues in International Investment Arbitration (OUP 2018) 1–16 Euler, Dimitrij, Gehring, Markus and Scherer, Maxi (eds), Transparency in International Investment Arbitration: A Guide to the UNCITRAL Rules on Transparency in TreatyBased Investor–State Arbitration (CUP 2015) Ferrari, Franco and Rosenfeld, Friedrich (eds), Inherent Powers of Arbitrators (Juris 2019) Knahr, Christina, ‘Transparency, Third Party Participation and Access to Documents in International Investment Arbitration’ (2007) 23 Arbitration International 327 Knahr, Christina and Reinisch, August, ‘Transparency versus Confidentiality in International Investment Arbitration – the Biwater Gauff Compromise’ (2007) 6 The Law & Practice of International Courts and Tribunals 97 Landau, Toby and Weeramantry, Romesh, ‘A Case for Transparency in Investment Arbitration’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer 2014) 669 Malintoppi, Loretta and Haeri, Hussein, ‘The Non-Disputing State Party in Investment Arbitration: An Interested Player or the Third Man Out?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 565 Malintoppi, Loretta and Limbasan, Natalie, ‘Living in Glass Houses? The Debate on Transparency in International Investment Arbitration’ (2015) 2(1) Bahrain Chamber for Dispute Resolution (BCDR) International Arbitration Review 31 Paparinskis, Martins, ‘Inherent Powers of ICSID Tribunals: Broad and Rightly So’ in Ian A Laird and Todd J Weiler (eds), Investment Treaty Arbitration and International Law vol 5 (Juris 2012) 11 Parra, Antonio R, ‘Revised Regulations and Rules’ (1985) 2(1) News from ICSID 4 ‘New Amendments of the Regulations and Rules of the International Centre for Settlement of Investment Disputes’ (2002) 19 News from ICSID 1 ‘The New Amendments to the ICSID Regulations and Rules and Additional Facility Rules’ (2004) 3 The Law & Practice of International Courts and Tribunals 181 Schill, Stephan W, ‘Editorial: The Mauritius Convention on Transparency’ (2015) 16 The Journal of World Investment & Trade 201

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‘United Nations Convention on Transparency in Treaty-Based Investor–State Arbitration’ in Hélène Ruiz Fabri (ed), Max Planck Encyclopedia of International Procedural Law (online edn, OUP, January 2019) Sharpe, Jeremy K, ‘The Agent’s Indispensable Role in International Investment Arbitration’ (2018) 33 ICSID Review 1 Shirlow, Esmé, ‘Dawn of a New Era? The UNCITRAL Rules and UN Convention on Transparency in Treaty-Based Investor–State Arbitration’ (2016) 31 ICSID Review 622 Stern, Brigitte, ‘Un petit pas de plus: l’installation de la société civile dans l’arbitrage CIRDI entre Etat et investisseur’ [2007] Revue de l’arbitrage 3 Tams, Christian J and Zoellner, Carl-Sebastian, ‘Amici Curiae im internationalen Investitionsschutzrecht’ (2007) 45 Archiv des Völkerrechts 217 Wiik, Astrid, Amicus Curiae before International Courts and Tribunals (Nomos 2018) Zoellner, Carl-Sebastian, ‘Third-Party Participation (NGOs and Private Persons) and Transparency in ICSID Proceedings’ in Rainer Hofmann and Christian J Tams (eds), The International Convention on the Settlement of Investment Disputes (ICSID): Taking Stock after 40 Years (Nomos 2007) 179

I. INTRODUCTION The Convention itself contains a number of provisions on procedure. Art. 44 is a residual rule directing a tribunal and the parties to use ICSID’s Arbitration Rules in addition to the Convention. The parties are free to exclude or adapt these Rules subject to certain limitations (see paras. 15–27 infra). The tribunal is authorized to fill any remaining gaps. Similar provisions can be found in the constitutive instruments of other international courts and tribunals, as well as rules of arbitration.1 In the Convention’s drafting, the text of what eventually became Art. 44 underwent only a few changes and was largely uncontested (History, Vol. I, pp. 198–200) (see also paras. 15, 50, 51, 60 infra). The only major point of debate was to what extent procedural questions should be regulated in the Convention itself rather than in the Arbitration Rules (see para. 37 infra). Art. 44 is the procedural counterpart to the choice of law provision of Art. 42(1). Art. 42(1) only applies to substantive questions, but not to the procedure before an ICSID tribunal (see Art. 42, para. 4). Whereas Art. 42(1) contains reference to the law of the State party to the dispute, Art. 44 creates a comprehensive and self-contained system that is insulated from national rules of procedure. In particular, the place of proceedings has no influence on procedure before an ICSID tribunal (see para. 24 infra, see also Art. 62, paras. 3, 4).2 But points of contact with the procedure under national law arise

1 See eg Statute of the International Court of Justice (adopted 26 June 1945, entered into force 24 October 1945) USTS 993, Art. 48; Convention for the Pacific Settlement of International Disputes (adopted 18 October 1907, entered into force 26 January 1910) 205 CTS 233 (Hague Convention I) Arts. 51, 74; Understanding on Rules and Procedures Governing the Settlement of Disputes (signed 15 April 1994, entered into force 1 January 1995) 1869 UNTS 401 (WTO Dispute Settlement Understanding) Art. 12; ICC Arbitration Rules (2021) Art. 22; UNCITRAL Arbitration Rules (2013) Art. 17; LCIA Arbitration Rules (2020) Art. 14; SCC Arbitration Rules (2017) Art. 23. 2 See eg Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 228 (‘[U]nlike in other types of arbitration, the place of arbitration in ICSID proceedings carries no legal consequences as the ICSID system is self-contained. In particular, the choice of the place of arbitration does not trigger the

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in the context of provisional measures by domestic courts under Arbitration Rule 39(6) (see Art. 26, paras. 267–292) and in the context of recognition and enforcement under Art. 54 of the Convention (see Art. 54, paras. 150–155). A violation of the procedural provisions of the Convention and of the Arbitration Rules may expose an award to annulment. Art. 52(1)(d) of the Convention states that annulment may be requested on the ground that there has been a serious departure from a fundamental rule of procedure. But not every violation of a rule of procedure would automatically lead to annulment. The violation must be serious and the rule thus violated must be fundamental (see Art. 52, paras. 332–347). In the course of the Convention’s drafting, Mr. Broches pointed out that fundamental rules of procedure might have a wider connotation than the concrete rules adopted by ICSID’s Administrative Council. They could comprise principles of natural justice, e.g., that both parties must be heard and that there must be adequate opportunity for rebuttal (History, Vol. II, p. 480) (see also paras. 25–27 infra). The applicable procedure in ICSID arbitration proceedings is governed not only by the Convention, but also by the Rules of Procedure for Arbitration Proceedings (the ‘Arbitration Rules’), the Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (the ‘Institution Rules’), and the Centre’s Administrative and Financial Regulations. These different sets of provisions combine to create a complex framework of rules governing the procedure before ICSID tribunals. Of these various provisions, some of the provisions of the Convention, the Arbitration Rules, the Institution Rules, and the Administrative and Financial Regulations are mandatory, in the sense that they are not open to modification or exclusion by the parties. Whether or not a provision is mandatory can be determined by whether or not it permits the parties to the dispute to ‘agree otherwise.’ For instance, Art. 47 of the Convention provides that ‘[e]xcept as the parties otherwise agree,’ the Tribunal has the power to recommend provisional measures, which evidently means that the parties to the dispute can agree that the Tribunal does not have this power. In contrast, Art. 41(1) of the Convention provides that ‘[t]he Tribunal shall be the judge of its own competence’; this does not permit the parties to modify or exclude this provision, meaning that it is mandatory. As explained further below, Art. 44 of the Convention provides that the Arbitration Rules apply ‘except as the parties otherwise agree.’ The Arbitration Rules are therefore subject to modification or exclusion by the parties, unless they reflect mandatory provisions of the Convention (see also para. 23 infra). The position is different as regards the Institution Rules, which set out the requirements for the early stages of proceedings up to the notification of registration of the request for arbitration or conciliation (see paras. 45–46 infra), and the Centre’s Administrative and Financial Regulations, which address matters such as the functions of the Secretary-General, the convening of meetings of the World Bank’s Administrative Council, and the making of advance payments by parties (see para. 46 infra). Unlike the Arbitration Rules, the Institution Rules and the Administrative and Financial Regulations are not generally subject to modification or exclusion by the parties. The parties may only derogate from application of the local arbitration law nor create jurisdiction of the local courts in aid and control of arbitration. The place is a matter of convenience and the Tribunal notes in this respect that the representation of both parties includes lawyers from firms located in Washington, DC’ (footnote omitted)).

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the Institution Rules and from the Administrative and Financial Regulations to the extent permitted by a particular Rule or Regulation.3 Within this framework, it is possible to identify a hierarchy of norms. This hierarchy has several aspects to it. Rules at a lower level of the hierarchy either have to conform to, or are of subsidiary character in relation to, those superior to them. In either case, the rules of a higher level will be applied if they conflict with those at a lower level. This hierarchy may be described as follows:4 1. Mandatory provisions of the Convention, i.e., those that are not open to modification by the parties (see paras. 5, 14, 23, 38 infra). 2. The Administrative and Financial Regulations and the Institution Rules (except to the extent that they permit variation by the parties by their own terms) (see para. 5 supra). 3. Procedures agreed to by the parties (see para. 6 supra, paras. 17, 22 infra). 4. Provisions of the Convention that are open to modification by the parties (see para. 6 supra). 5. The Arbitration Rules (see paras. 37–38 infra). 6. Decisions by the tribunal on procedural matters (see paras. 60–61 infra). The first sentence of Art. 44 is important in that it confirms the general autonomy of the parties to modify or exclude the application of the Arbitration Rules to the arbitration proceeding. It also confirms the method of determining which version of the Arbitration Rules applies to an ICSID arbitration proceeding. The second sentence is a broad ‘catch-all’ provision confirming that the tribunal has the residual or inherent power to decide procedural issues which are not otherwise covered in the Convention or the Arbitration Rules. The various procedural issues decided by arbitral tribunals in reliance on the second sentence of Art. 44 include the making of orders on confidentiality, orders concerning the consolidation, stay, and discontinuance of proceedings, the regulation of counsel, and the granting of permission to intervene in proceedings as amicus curiae.5

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II. INTERPRETATION A. ‘Any arbitration proceeding . . .’ Arbitration proceedings under the Convention commence with a request to the Secretary-General of ICSID in accordance with Art. 36. As noted above, the requirements for the early stages of proceedings up to the notification of registration are

3 See Introductory Note D to the 1968 Arbitration Rules, (1993) 1 ICSID Reports 65. 4 This list is similar to the one by Paul C Szasz, ‘The Investment Disputes Convention – Opportunities and Pitfalls (How to Submit Disputes to ICSID)’ (1970) 5 J Law & Econ Dev 23, 39–40, and the one identified by the Tribunal in Magyar Farming v Hungary, Award (13 November 2019) para 21. For a somewhat less elaborate description of the interrelation of procedural rules, see Introductory Notes D and E to the 1968 Arbitration Rules, (1993) 1 ICSID Reports 65. 5 See Christopher Harris and Cameron Miles, ‘Article 44’ in Julien Fouret, Rémy Gerbay and Gloria M Alvarez (eds), The ICSID Convention, Regulation and Rules (Elgar 2019) 384, 393–394. See also Martins Paparinskis, ‘Inherent Powers of ICSID Tribunals: Broad and Rightly So’ in Ian A Laird and Todd J Weiler (eds), Investment Treaty Arbitration and International Law vol 5 (Juris 2012) 11.

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regulated by separate Institution Rules6 (see also paras. 45–46 infra). The Arbitration Rules proper (see paras. 39–42 infra) only start to operate with the first steps towards the tribunal’s constitution.7 The Arbitration Rules do not necessarily cease to operate with the rendering of the award. They cover certain post-award procedures, such as supplementary decisions, rectification, interpretation, revision, and annulment.8 Art. 52(4) of the Convention specifically states that Art. 44 shall also apply to proceedings before an ad hoc committee whose task is to deal with a request for annulment of the original award.9 Arts. 50 and 51 dealing with interpretation and revision do not contain corresponding clauses, arguably because interpretation and revision proceedings are held, if possible, before the original tribunal, and can thus be considered to be extensions of the original arbitration proceedings.10 Arbitration Rule 53 confirms that the Arbitration Rules shall apply, mutatis mutandis, to any procedure relating to the interpretation, revision or annulment of an award. In addition, Art. 44 also applies to proceedings before a tribunal to which the case is resubmitted after annulment in accordance with Art. 52(6).11 Art. 52(4) of the Convention does not list Art. 57, dealing with the disqualification of arbitrators, among the Convention’s Articles that are applicable in annulment proceedings. Nevertheless, in Vivendi v Argentina, the members of the ad hoc Committee found that Arbitration Rule 9, dealing with the disqualification of arbitrators, was applicable. This finding was based on Arbitration Rule 5312 (see Art. 57, para. 7). Art. 33, dealing with conciliation, parallels Art. 44 and refers to the Conciliation Rules. B. ‘. . . shall be conducted in accordance with the provisions of this Section . . .’

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Art. 44 refers to Section 3 of the Convention’s Chapter IV. This Section is headed ‘Powers and Functions of the Tribunal’ and contains Arts. 41–47. These Articles deal with the tribunal’s power to determine its own jurisdiction, applicable law, the taking of evidence, default proceedings, incidental or additional claims and counterclaims as well as provisional measures. But Section 3 of Chapter IV is by no means the only part of the Convention containing procedural provisions. Arts. 48, 49, 50, 51, 56, 57, 58, 60, 61, 62, and 63 deal with a variety of procedural issues that a tribunal must observe. In addition, there are a number of further procedural provisions in the Convention that must be observed either before the tribunal has commenced its work, such as those on the request for arbitration or on the constitution of the tribunal, or after the tribunal has completed its work, such as those on the award’s annulment, recognition and enforcement.

6 Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings. For the 1968 Institution Rules with notes see (1993) 1 ICSID Reports 51. 7 Arbitration Rule 39 was amended in 2006 to introduce an expedited procedure for dealing with preliminary measures prior to the constitution of a tribunal (see Art. 47, paras 7, 8). 8 Arbitration Rules 49–54. 9 See also Amco v Indonesia, Decision on Annulment (16 May 1986) para 18. 10 Arts. 50(2) and 51(3) of the ICSID Convention. 11 Arbitration Rule 55(4). 12 Vivendi v Argentina, Decision on Disqualification (3 October 2001) paras 3–13.

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C. ‘. . . and, except as the parties otherwise agree, . . .’ The grammatical context of the ‘except’ clause in Art. 44 makes it clear that it applies only to the Arbitration Rules and not to the relevant parts of the Convention. But some of the Convention’s procedural Articles contain their own ‘except’ clauses opening them to modification by the parties. These include Arts. 43, 46, and 47 in Section 3 of Chapter IV. Arts. 26, 37, 38, 60, 61, 62, and 63 also allow for certain modifications by the parties. Whereas the Arbitration Rules are generally open to variation or exclusion by the parties, some of the Convention’s procedural provisions are mandatory, while others are not.

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1. Freedom of Choice During the Convention’s drafting, the non-mandatory character of the Arbitration Rules was never cast into doubt. Mr. Broches emphasized repeatedly that the parties were free to exclude or vary some or all of these rules and to substitute their own (History, Vol. II, pp. 79, 107, 111, 249, 357, 383, 479, 481, 807). This principle was restated in the Executive Directors’ Report in the following terms:

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39. In keeping with the consensual character of proceedings under the Convention, the parties to conciliation or arbitration proceedings may agree on the rules of procedure which will apply in those proceedings. However, if or to the extent that they have not so agreed the Conciliation Rules and Arbitration Rules adopted by the Administrative Council will apply (Articles 33 and 44).13

Some Arbitration Rules contain their own ‘except as the parties otherwise agree’ clauses.14 This may appear illogical since all Arbitration Rules are open to modification or exclusion by the parties, unless they reflect mandatory provisions of the Convention (see paras. 5–6 supra, para. 23 infra). These ‘except’ clauses must be read as a reminder that even if the Arbitration Rules are accepted, in principle, variation is possible and as an indication of rules that appear particularly flexible. Several options are open to the parties when exercising their freedom to shape procedure:15 1. They may discard the Arbitration Rules to the extent that they do not reflect mandatory provisions of the Convention and substitute a system of procedural rules of their own design or taken from some national legal system or from some other international arbitration mechanism.16 2. They may discard the Arbitration Rules without substituting their own rules.

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(1993) 1 ICSID Reports 23, 31. See eg Arbitration Rules 14(2), 28(1), 29, 40(1). See also Introductory Note E to the 1968 Arbitration Rules, (1993) 1 ICSID Reports 65. In Suez and Vivendi v Argentina and AWG v Argentina, Argentina did not agree to extend ICSID’s jurisdiction to the claims of one of the Claimants, AWG Group Ltd, but agreed that the case initiated by that party be administered by the ICSID Secretariat, albeit subject to the UNCITRAL Arbitration Rules. See Suez and Vivendi v Argentina, Decision on Jurisdiction (3 August 2006) para 4; AWG v Argentina (UNCITRAL), Decision on Jurisdiction (3 August 2006) para 4. ICSID has also been appointed the administering authority in proceedings governed by the UNCITRAL Arbitration Rules; see eg Renco v Peru, Procedural Order No 1 (22 August 2013) paras 1, 5; Eli Lilly v Canada, Procedural Order No 1 (26 May 2014) paras 2, 4.1.

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3. They may retain the Arbitration Rules subject to certain modifications. 4. They may retain the Arbitration Rules either through express confirmation or by default in the absence of an agreement to the contrary. There is little reason for parties to choose Options 1 and 2. The Arbitration Rules are carefully drafted and are as fair as possible (see para. 44 infra). Moreover, they are specifically designed for proceedings under the Convention, and it is difficult to see how the procedure could be improved through the adoption of external rules. If no alternative set of rules is substituted, the tribunal will exercise its discretion in accordance with the last sentence of Art. 44 (see History, Vol. II, p. 807). It is likely that in doing so it will closely follow the Arbitration Rules in their current form. In selecting Option 3, the parties may wish to apply the Arbitration Rules in their most up-to-date form rather than as in force at the time of consent (see paras. 53–59 infra). Additionally, they may agree on specific time limits that may appear appropriate in view of the unusually complex nature of a dispute or they may agree on special rules of evidence, for instance, in view of difficulties in bringing witnesses directly before the tribunal17 (see Art. 43, paras. 109–134). In one example, the parties in BSG Resources v Guinea I agreed to the application of the UNCITRAL Transparency Rules in Treatybased Investor State Arbitration, with certain modifications.18 Absence of an agreement to depart from the Arbitration Rules (option 4) may indicate satisfaction with them or the inability to agree on alternatives. In either case, the Arbitration Rules are binding on the parties and on the tribunal. In the absence of agreement between the parties to vary the procedure, tribunals have referred to the direction contained in Art. 44 of the Convention to conduct the arbitral proceedings in accordance with the Arbitration Rules.19 The mandatory character of the Arbitration Rules in the absence of other arrangements by the parties is particularly important in the case of a non-cooperating party. This is part of the general policy of non-frustration under the Convention. Once consent has been given, a party may not prevent the progress of proceedings by withholding agreement on a point of procedure.20 In actual practice, the parties have frequently reached agreement on specific procedural points.21 But these agreements did not constitute major departures from the Arbitration Rules and were generally more in the nature of specifications rather than modifications of the Rules. In particular, agreements were reached on the following points of procedure:

17 Szasz (n 4) 40–41. 18 BSG Resources v Guinea I, Procedural Order No 2 (17 September 2015). 19 See eg Cambodia Power v Cambodia, Decision on Jurisdiction (22 March 2011) para 158; Noble Energy v Ecuador, Decision on Jurisdiction (5 March 2008) para 190; LG&E v Argentina, Decision on Jurisdiction (30 April 2004) para 8; SEMOS v Mali, Award (25 February 2003) (2006) 10 ICSID Reports 117; Genin v Estonia, Award (25 June 2001) para 8; Santa Elena v Costa Rica, Award (17 February 2000) para 6; LETCO v Liberia, Award (31 March 1986) (1994) 2 ICSID Reports 346, 357–358. 20 Paul C Szasz, ‘A Practical Guide to the Convention on Settlement of Investment Disputes’ (1968) 1 Cornell ILJ 1, 26. 21 See eg BSG Resources v Guinea I, Procedural Order No 2 (17 September 2015); Maffezini v Spain, Award (13 November 2000) para 15; Goetz v Burundi, Award (10 February 1999) para 34; Vacuum Salt v Ghana, Award (16 February 1994) paras 5–7; SPP v Egypt, Award (20 May 1992) para 8.

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s the constitution of the tribunal (Arbitration Rules 2–5); s place of proceedings (Convention Arts. 62 and 63; Administrative and Financial Regulation 26; Arbitration Rule 13(3)); s application of the Arbitration Rules in their most recent form (see paras. 53–59 infra); s procedural languages (Arbitration Rules 20(1)(b) and 22) (see paras. 92–103 infra); s conduct of oral hearings (Arbitration Rules 20(1)(g) and 32); s quorum requirements for the tribunal (Arbitration Rules 14(2) and 20(1)(a)); s delegation of the power to make orders for time limits to the tribunal’s president (Arbitration Rule 26(1)); s specific time limits (Arbitration Rule 31(1) and (2)); s written and oral procedures (Arbitration Rules 20(1)(e) and 29); s number and sequence of pleadings and time limits (Arbitration Rules 20(1)(c) and 31); s submission and production of evidence (Convention Art. 43; Administrative and Financial Regulation 30; Arbitration Rules 24 and 33–37); s sequence of issues to be addressed by the tribunal;22 s confidentiality;23 s application of (or guidance by) the International Bar Association (IBA) Rules on the Taking of Evidence in International Arbitration (2010);24 s application of the UNCITRAL Transparency Rules;25 s publication of decisions (Convention Art. 48(5); Administrative and Financial Regulation 22).

2. Limits on Choice The parties’ discretion to depart from the Arbitration Rules is not unlimited. To the extent that the Rules restate mandatory provisions of the Convention, they may not be modified by the parties. In particular, Arts. 37–40 and 56 of the Convention contain a number of mandatory rules concerning the composition of the tribunal which may not be departed from through a modification of the Arbitration Rules (see Art. 37, para. 3). Similarly, the parties may agree on the proportion of the costs to be borne by each of them. But they cannot reduce or remove their overall financial obligation towards the Centre under Arts. 59–61 of the Convention through an agreed modification of Arbitration Rule 28. In modifying the Arbitration Rules, the parties are not constrained by the rules of a particular national system of law. In particular, the national law governing arbitration at

22 Mobil Oil v New Zealand, Findings on Liability, Interpretation and Allied Issues (4 May 1989) (1997) 4 ICSID Reports 140, 145. 23 Gruslin v Malaysia II, Award (27 November 2000) para 6.7; TANESCO v IPTL, Award (12 July 2001) paras 36, 39, 40–44; Zhinvali v Georgia, Award (24 January 2003) paras 35–37. 24 See eg Bilcon v Canada (UNCITRAL), Procedural Order No 3 (3 June 2009) para 2.1; Apotex v United States (UNCITRAL), Procedural Order No 1 (16 December 2010) para 18; Philip Morris v Australia (UNCITRAL), Procedural Order No 6 (30 November 2012) para 2; Bridgestone v Panama, Procedural Order No 1 (11 July 2017) para 16.1; Global Telecom Holding v Canada, Procedural Order No 4 (3 November 2018) paras 34–35. 25 BSG Resources v Guinea I, Procedural Order No 2 (17 September 2015).

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the tribunal’s seat will not apply. Nor does the ordre public (public policy) of the legal system of the tribunal’s seat affect the choice of procedural rules by the parties26 (see also para. 3 supra). The same principle must apply to the law and public policy of the State party to the ICSID arbitration. However, certain international minimum standards of fair procedure must be observed by the parties when agreeing on procedural issues. These standards would include such principles as the tribunal’s obligation to hear both sides (audiatur et altera pars) and each party’s right to be informed of the other side’s arguments.27 The application by a tribunal of agreed rules that violate such fundamental principles could expose an award to annulment under Art. 52(1)(d) (see para. 4 supra). In MINE v Guinea, the ad hoc Committee gave the following comment on fundamental rules of procedure: The Committee considers that a clear example of such a fundamental rule is to be found in Article 18 of the UNCITRAL Model Law on International Commercial Arbitration which provides: The parties shall be treated with equality and each party shall be given full opportunity of presenting his case. The term ‘fundamental rule of procedure’ is not to be understood as necessarily including all of the Arbitration Rules adopted by the Centre.28

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The Convention does not state how and at what stage the Arbitration Rules may be modified, except that this has to be by agreement of the parties to the arbitration. An obvious opportunity for an agreement on procedure would be in a direct submission agreement by which the parties agree to submit the dispute to ICSID (see Art. 25, paras. 767–776). But there is nothing to preclude the parties from reaching agreement on procedure at a later stage (see History, Vol. II, p. 481). It may be wise to address important procedural questions as early as possible, since it is more difficult to reach agreement after a dispute has arisen. On the other hand, it is probably not realistic to expect parties to give detailed attention to ICSID procedure when including an ICSID arbitration clause in a larger contractual agreement concerning an investment project. The ICSID Model Clauses (see Art. 25, para. 772) offer a formula for the modification of the Arbitration Rules in the following terms:

26 Moshe Hirsch, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (Martinus Nijhoff 1993) 113–114. 27 MINE v Guinea, Decision on Annulment (22 December 1989) para 5.06. 28 ibid. 29 See eg von Pezold and others v Zimbabwe, Decision on Annulment (21 November 2018) para 243; Micula v Romania I, Decision on Annulment (26 February 2016) para 132; Alapli v Turkey, Decision on Annulment (10 July 2014) paras 131–132; Fraport v Philippines I, Decision on Annulment (23 December 2010) paras 186, 198; Azurix v Argentina, Decision on Annulment (1 September 2009) paras 50–52, 213; CDC v Seychelles, Decision on Annulment (29 June 2005) para 49.

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Clause 17 Any arbitration proceeding pursuant to this agreement shall be conducted in accordance with the Arbitration Rules of the Centre except that the following provisions shall be substituted for the Rules indicated below: . . .30

Parties rarely agree on modifications of the Arbitration Rules as part of their agreement to arbitrate.31 Another possible time for reaching agreement on procedure would be the institution of arbitration proceedings, especially if this is done in the form of a joint filing of a request for arbitration by both parties.32 But this rarely, if ever, happens. If the consent by the State party is expressed in general terms through legislation or treaty and is accepted by the investor through the institution of proceedings (see Art. 25, paras. 780–877), this is the earliest opportunity for an agreement on procedure. This possibility is foreseen in the Institution Rules:

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Rule 3 Optional Information in the Request The request may in addition set forth any provisions agreed by the parties regarding the number of conciliators or arbitrators and the method of their appointment, as well as any other provisions agreed concerning the settlement of the dispute.

A bilateral investment treaty (BIT) or other treaty offering consent to ICSID arbitration may contain provisions concerning the conduct of the arbitration.33 An investor who accepts the offer of consent in the treaty also accepts those provisions on arbitral procedure as contained in the BIT (or other treaty), thus turning them into an agreement on procedure between the parties to the arbitration. The most obvious opportunity to agree on matters of procedure presents itself at an early stage of the proceedings before the tribunal. The Arbitration Rules themselves provide for a preliminary procedural consultation for this purpose in the following terms: Rule 20 Preliminary Procedural Consultation (1) As early as possible after the constitution of a Tribunal, its President shall endeavour to ascertain the views of the parties regarding questions of procedure. For this purpose he may request the parties to meet him. He shall, in particular, seek their views on the following matters:

30 But see Arts. 7.6, 7.8 and 7.9 of the 1982 Participation Agreement between New Zealand and Mobil Oil in Attorney-General v Mobil Oil NZ Ltd, High Court Wellington, New Zealand (1 July 1987) (1997) 4 ICSID Reports 117, 123. See also TANESCO v IPTL, Award (12 July 2001) Appendix A, para 7. 31 On the possibility of a joint request, see Institution Rule 1(2). 32 Hirsch (n 26) 113–115. 33 See eg the detailed provisions in US Model BIT (2012) Arts. 28–29, 32–33. See also Korea–United States FTA (signed 30 June 2007, entered into force 15 March 2012) Arts. 11.20–11.21, 11.24–11.25; Canada– European Union Comprehensive Economic and Trade Agreement (CETA) (signed 30 October 2016, in parts provisionally applied since 21 September 2017) [2017] OJ L 11/23, Arts. 8.24, 8.26, 8.33–8.38; Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into force 30 December 2018) Arts. 9.22–9.24, 9.27–9.28.

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schreuer’s commentary on the icsid convention (a) the number of members of the Tribunal required to constitute a quorum at its sittings; (b) the language or languages to be used in the proceeding; (c) the number and sequence of the pleadings and the time limits within which they are to be filed; (d) the number of copies desired by each party of instruments filed by the other; (e) dispensing with the written or the oral procedure; (f ) the manner in which the cost of the proceeding is to be apportioned; and (g) the manner in which the record of the hearings shall be kept. (2) In the conduct of the proceeding the Tribunal shall apply any agreement between the parties on procedural matters, except as otherwise provided in the Convention or the Administrative and Financial Regulations.34

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Rule 20(1), by its own terms, is not exhaustive. Other matters may also be the subject of a determination in the framework of preliminary procedural consultations. These include channels of communication between the parties and the tribunal, decisions by the tribunal, the place of proceedings and the holding of a pre-hearing conference in accordance with Rule 21.35 The Secretariat has developed a standardized draft provisional agenda for this purpose. It lists the procedural issues that should be clarified between the parties.36 Preliminary consultations may be conducted through correspondence. But the more common method is to settle questions of procedure at the tribunal’s first session.37 The agreements are almost invariably recorded in the form of the Tribunal’s Procedural Order No. 1.38 Tribunals have recorded the resulting agreements of the parties on procedural questions in varying terms. The Tribunal took the measures ‘with the parties’ agreement,’39 rules were established ‘with the agreement of the parties,’40 or ‘discussed

34 See the Notes to Arbitration Rule 20 of 1968, (1993) 1 ICSID Reports 85; Art. 28 of the Arbitration (Additional Facility) Rules. See also Conciliation Rule 20 and Lester Nurick and Stephen J Schnably, ‘The First ICSID Conciliation: Tesoro Petroleum Corporation v Trinidad and Tobago’ (1986) 1 ICSID Rev 340, 346–347. 35 On Procedural Rule 20, see Matthew Weiniger, ‘Rule 20’ in Fouret, Gerbay and Alvarez (n 5) 1062. See also Antonio R Parra, ‘The Role of the ICSID Secretariat in the Administration of Arbitration Proceedings under the ICSID Convention’ (1998) 13 ICSID Rev 85, 93–95; Georges R Delaume, ‘Le Centre International pour le Règlement des Différends relatifs aux Investissements (CIRDI)’ (1982) 109 JDI 775, 821–823; Bertrand Marchais, ‘Setting up the Initial Procedural Framework in ICSID Arbitration’ (1988) 5(1) News from ICSID 5. 36 A version of the draft provisional agenda is reproduced at (1998) 13 ICSID Rev 100. See also ICSID, ‘First Session – ICSID Convention’ accessed 10 January 2021. 37 See eg Eiser v Spain, Award (4 May 2017) paras 11–12; Micula v Romania I, Award (11 December 2013) para 16; Churchill Mining v Indonesia, Procedural Order No 1 (6 December 2012); Fraport v Philippines I, Award (16 August 2007) para 13; PSEG v Turkey, Decision on Jurisdiction (4 June 2004) paras 9–10; CMS v Argentina, Decision on Jurisdiction (17 July 2003) para 10; Olguín v Paraguay, Award (26 July 2001) para 18; Maffezini v Spain, Award (13 November 2000) para 15; Goetz v Burundi, Award (10 February 1999) para 34. 38 See eg Lighthouse Corp v Timor-Leste, Procedural Order No 1 (13 October 2015); Churchill Mining v Indonesia, Procedural Order No 1 (6 December 2012); Noble Ventures v Romania, Award (12 October 2005) para 18. 39 AGIP v Congo, Award (30 November 1979) para 6. 40 Klöckner v Cameroon, Award (21 October 1983) (1994) 2 ICSID Reports 3, 11–12.

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and agreed upon,’41 the Tribunal made ‘decisions with the consent of the parties,’42 ‘in accordance with Arbitration Rule 20 it was decided,43 ‘the Committee and the Parties agreed,’44 it was found to be ‘common ground between the parties’45 and ‘the Parties and the Tribunal established the framework.’46 The record shows that the resulting arrangements are essentially trilateral accords between the tribunal and the parties. An agreement on procedure under Arbitration Rule 20 is not possible if one party fails to participate in the proceedings. The tribunal may still hold preliminary consultations on procedural matters with the cooperating party. But the outcome of these consultations can only be measures taken by the tribunal within the framework of the Arbitration Rules.47

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D. ‘. . . in accordance with the Arbitration Rules . . .’

1. Relationship of the Arbitration Rules to the Convention Rules of procedure to supplement the Convention were planned throughout the Convention’s drafting (History, Vol. II, pp. 109, 110, 382, 383, 479, 572). The exact relationship of such rules to the Convention was the object of some debate. The Working Paper, the Preliminary Draft and the First Draft, which are otherwise very similar to the final version of Art. 44, contained a reference to the Arbitration Rules but not to the Convention itself (History, Vol. I, pp. 198, 200). It was explained that regulating the mechanics of arbitration procedure in the rules of procedure rather than in the Convention would be convenient and in the interest of flexibility (History, Vol. II, p. 79). These rules could not be inconsistent with the Convention but would only implement or supplement it in matters of detail (ibid., pp. 249, 331, 357, 382). Nevertheless, a number of delegates had misgivings about this arrangement and demanded that some or all of the rules of procedure be included in the Convention proper or attached to it in the form of an annex (ibid., pp. 382, 383, 479, 480, 572). In the Revised Draft, the reference to arbitration rules was retained, but the Article was amended to reflect the fact that arbitration proceedings would be governed by the Convention as well as by the Rules (History, Vol. I, p. 200; Vol. II, p. 807). The Convention does, in fact, contain a large number of procedural rules, some of which go into considerable detail (see para. 13 supra). The Arbitration Rules provide even more depth and detail. In the unlikely case that a provision of the Arbitration Rules conflicts with the Convention, the latter prevails. The Convention’s provisions are mandatory unless otherwise stated. The Arbitration Rules are generally subject to modification by the parties (see paras. 14, 23, 25 supra).

41 Micula v Romania I, Award (11 December 2013) para 16; Saipem v Bangladesh, Decision on Jurisdiction and Provisional Measures (21 March 2007) para 48. 42 SOABI v Senegal, Decision on Jurisdiction (1 August 1984) para 9 and ibid, Award (25 February 1988) para 1.09. 43 SPP v Egypt, Decision on Jurisdiction I (27 November 1985) para 9. 44 MINE v Guinea, Decision on Annulment (22 December 1989) para 3.07; Tradex v Albania, Award (29 April 1999) para 10. 45 Mobil Oil v New Zealand, Findings on Liability, Interpretation and Allied Issues (4 May 1989) (1997) 4 ICSID Reports 140, 145. 46 AAPL v Sri Lanka, Award (27 June 1990) para 6. 47 See Benvenuti & Bonfant v Congo, Award (15 August 1980) para 1.5.

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2. Adoption and Amendment 39

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The Arbitration Rules are adopted by the Centre’s Administrative Council in accordance with Art. 6(1)(c). The original Arbitration Rules were adopted on 25 September 1967 with effect from 1 January 1968.48 On 26 September 1984, the Administrative Council adopted revisions to the Rules, which took effect immediately.49 The most important changes made in 1984 concerned the records of hearings,50 the introduction of a pre-hearing conference to establish uncontested facts or to facilitate an amicable settlement,51 and the clarification that provisional measures may be requested from national courts and authorities if express provision to this effect has been made in the consent agreement52 (see Art. 26, paras. 284, 285). There were also a few minor additions and clarifications of language.53 Another set of amendments to the Arbitration Rules was made on 29 September 2002, with effect from 1 January 2003.54 The first amendment concerned Rule 1(3) on the nationality of arbitrators, and was introduced in order to clarify that, if a panel of three arbitrators is to be appointed, a party can nominate its national or co-national only subject to the agreement of the other party. The time limits imposed by Rules 4 and 9 for the Chairman of the Administrative Council to appoint an arbitrator and to decide on a request for disqualification of arbitrators, respectively, were relaxed. The time limit imposed by Rule 46 for the preparation of the arbitral award was doubled and the period after which the Chairman of the Administrative Council might be called upon under Arbitration Rule 11 to appoint arbitrators to fill vacant positions in the tribunal was increased from 30 to 45 days.55 More recent amendments to the ICSID Rules adopted by the Administrative Council of the Centre came into effect on 10 April 2006.56 In view of the inter-temporal rule of Art. 44 (see paras. 48–52 infra), the old version of the Arbitration Rules continues to apply to consent given before that date (see para. 48 infra). The most significant changes introduced in 2006 concern an expansion of the scope of the mandatory declaration of independence of a prospective arbitrator (see Art. 40, paras. 19–21),57 the possibility for tribunals to authorize the attendance at hearings of third-party observers unless either party objects,58 the possibility for tribunals, after consulting both parties, to authorize amicus submissions by third parties,59 the possibility for a party to request provisional measures after the institution of proceedings even before the constitution of the tribunal,60 the possibility for a 48 Rules of Procedure for Arbitration Proceedings (Arbitration Rules) of 1968, (1993) 1 ICSID Reports 63. These Rules superseded Provisional Arbitration Rules adopted on 2 February 1967, (1967) 6 ILM 225, 260, (1968) 7 ILM 351, 376. 49 Rules of Procedure for Arbitration Proceedings (Arbitration Rules) of 1984, (1993) 1 ICSID Reports 157. 50 Arbitration Rule 37 of 1968 and Arbitration Rule 20(1)(g) of 1984. 51 Arbitration Rule 21 of 1984. 52 Arbitration Rule 39(5) of 1984. 53 For a full review of the 1984 revision of the Arbitration Rules, see Antonio R Parra, ‘Revised Regulations and Rules’ (1985) 2(1) News from ICSID 4; ICSID, ‘1985 Annual Report’ (1985) 14–15. 54 The Additional Facility Rules were also amended correspondingly on 29 September 2002. 55 See Antonio R Parra, ‘The New Amendments to the ICSID Regulations and Rules and Additional Facility Rules’ (2004) 3 LPICT 181, 185. 56 See ICSID, ‘A Brief History of Amendment to the ICSID Rules and Regulations’ (10 March 2020) accessed 10 January 2021. For an overview of the 2006 amendments, see Aurélia Antonietti, ‘The 2006 Amendments to the ICSID Rules and Regulations and the Additional Facility Rules’ (2006) 21 ICSID Rev 427. 57 Arbitration Rule 6. 58 Arbitration Rule 32(2). 59 Arbitration Rule 37(2). 60 Arbitration Rule 39(1).

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party to file an objection within 30 days of the tribunal’s constitution that a claim is ‘manifestly without merit,’61 and the Centre’s obligation to include in its publications excerpts of the legal reasoning of the tribunal.62 The corresponding Additional Facility Rules have been amended in the same manner as the ICSID Arbitration Rules. In October 2016, ICSID launched a process of carrying out consultations for a further revision to