State Succession and State Responsibility in the Context of Investor-State Dispute Settlement

Extract

I. INTRODUCTION

International investment arbitration is based on the consent of the parties (the foreign investor and the host State of the investment) to have their dispute settled by a tribunal established either under (i) a direct agreement between the investor and the host State, (ii) a provision of the domestic legislation of the host State or (iii) a provision of an investment treaty. The majority of investment cases have been decided under bilateral investment treaties (BITs) for the protection and promotion of investments.³ The present article will focus on BITs.⁴

It is now estimated that over 2946 BITs have been concluded worldwide.⁵ In addition, more than 376 international agreements (such as free trade agreements) also include provisions on investment.⁶ The substantive rules for the protection of foreign investments are mostly found in these treaties (collectively referred to as international investment agreements).⁷ Most of these treaties provide foreign investors with significant procedural rights. They typically allow an investor of one party to a treaty to bring a direct claim before an international tribunal alleging breach of an investment protection obligation in a BIT against the other party to the treaty (the host State). By the end of 2017, 855 claims had been initiated by investors against States and 542 final awards had been issued.⁸