Terra Incognita: What Happens When a Problem of State Succession Occurs during Arbitration Proceedings?

In: The Law & Practice of International Courts and Tribunals
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  • 1 Ph.D. (Graduate Institute of International Studies, Geneva, Switzerland), Full Professor, Faculty of Law (Civil Law Section), University of Ottawa, Canada

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Abstract

This article examines the question of State succession to bilateral investment treaties (BITs) in the unique context whereby the events leading to this change in sovereignty happen during an arbitration proceeding. I will assess the impact this will have on the respondent State in the proceedings which may cease to exist (dissolution, unification, and integration) or lose part of its territory (cession, secession). Succession may also affect the home State of the claimant investor and result in that person losing its nationality and acquiring a new one. An arbitral tribunal should continue to have jurisdiction over a dispute whenever a claimant involuntarily changes its nationality in such context. While the same conclusion should apply when changes affect the respondent State, major difficulties will arise if that State ceases to exist and no other State is willing to participate in the proceedings. I will examine the limits of tribunals’ powers in this respect.