Travelling the BIT Route

Of Waiting Periods, Umbrella Clauses and Forks in the Road

In: The Journal of World Investment & Trade
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  • 1 Professor of international Law, University of Vienna, Austria. The author may be contacted at: ‹christoph.schreuer@univie.ac.at›.

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  • 1 For a description of this process, sre J. Yaulsson, Arbitration Without Privity, 10 Icsm Rcv.-F.I.L.J. 232 (1995). This method for establishing jurisdiction was first accepted in AAPL v. Sri Lanka, Award, 27 June 1990, 4 lcsii) Reports 246, at 250-251. It has since been followed in numerous cases.

  • 2MilitaryandPararnilitaryActivitiesinandagainstNicaragua(Nicaraquav.UnitedStatesof America), Judgment (jurisdiction and Admissibility), 26 November 1984, []984)'tcj Reports 427-429. 3 Ibid., at pp. 427-428.

  • 4 Ibid., at pp. 428-429. s Ibid., at p. 429. 1 AAIT 11. zaire, Award, 21 February 1997, 36 LL.M. 1531, at 1545 (1997). 7 Ibid., at p. 1547. See also Tradex v. Albania, Decision on Jurisdiction, 24 December 1996, 14 IcSID Rcv.-F.LL.J. 161, at 174 (1999). In that case, consent to jurisdiction was not based on a Bit but on national legislation. The consent clause in the Albanian law was subject to the condition that the dispute "cannot be settled amicably". The Tribunal noted that Tradex had sent five letters over four months to the competent Albanian Ministry but that none of these was answered or resulted in any relevant action. The Tribunal found these letters to be a sufficient good faith effort to reach an amicable settlement; at pp. 182-184. H Salini Costnrttori SpA et Italstrade SpA r/Roytjxmf du Maroc, Decision on Jurisdiction, 23 July 2001, Journal de Droit International 196 (2002), 42 I.L.M. 609 (2003), at 612. '' Ibid.., at pp. 613-614. 111 Argentina-United States BIT, Article vn(2), (3); see the text of the BIT on the Website of the Organization of American States at: <www.sice.oas.org/bits/usaargc2.asp'.

  • " Azurix v. Argentina, Decision on Jurisdiction, 8 December 2003, para. 55; available at: <www.asil.org/ilib/ azutix.pd6. 12 CMS Gas Transmission Company v. The Republic of Argentina, Decision on Jurisdiction, 17 July 2003, 42 I.LM. 788 (2003). 13 Ibid., at pp. 806-807. See also Metaldad v. Mexico, Award, 30 August 2000, 5 IcsD Reports 223-225, applying Article 1120 of the North American Free Trade Agreement (NAFTA). 'a Ethyl Corp. v. Canada, Decision on Jurisdiction, 24 June 1998, 38 LL.M. 708 (1999). 'e Ibid., at para. 77.

  • �fi Ibid., para. 84; footnotes omitted. 17 Ibid., at para. 85. 11 Ibid., at paras. 87 and 88. For the decision of another NAFTA Tribunal dealing with a related matter under Articles 1119 and 1122(1) of the NAFTA, see also Anr Group Inc. v. United States of America, Award, 9 January 2003; available at: <www.state.gov/documents/organization/ ] 6586.pdf. ''� Rotiald S. Lauder ll. 711C Czech Republic, Final Award, 3 September 2001; available at: <www.infcr.cz/Arbitraz/ cn/FinalAward.doc>. 21, Ibid., para. 183. 21 Ibid., at para. 185. 22 Ibid., at paras. 181-191. 23 Ibid., para. 187. 24 Ibid., at paras. 188-189.

  • 25 Ibid., paras. 190-191. zb Wena Hotels v. Egypt, Decision on Jurisdiction, 25 May 1999, 41 LL.M. 881 (2002). 27 Ibid., at p. 891. z" Sgs ,S Pakistan, Decision on Jurisdiction, 6 August 2003, 18 ICSID Kev.-F.LL.J. 307 (2003). 29 Ibid., at para. 80. 311 Ibid., at paras. 79-81. 31 Ibid., at paras. 130 and 131. 32 Ibid., para. 184; footnote omitted. The Tribunal cited the Decision in Etlryl.

  • 33 AlltoilleCoetzand othersv.Burundi, Award, 10 Febnjary 1999, paras. 90-93, 15 ICSID Rev.-f.I.L.j. 454 (2000). 34 Ibid., at para. 90. 35 Ibid., at paras. 91 and 92. 3(1 Ibid., at para. 93. 37 The Tribunal did not discuss that distinction. Nor did it have the benefit of the other decisions quoted above, most of which were decided only after Goetz. 38 Enron Corp. and Ponderosa Assets, L.P. v. Argetititia, Decision on Jurisdiction, 14 January 2004; available at: <www.asil.org/ilib/Enron . pdf>.

  • 31 Ibid., at para. 82. 411 Ibid., at para. 84. 41 Ibid., para. 87. 42 Ibid., para. 88; footnote omitted. The Tribunal cited Lauder and F.thyl. '3 See especially the Finnish Shipowllers case, Finland v. Great Britain, Award, 9 May 1934, RIAA, Vol. 1lI, p. 1479; C. F. Arnerasinghe, Whither the Local Remedies Rule? 5 ICSID Rev.-F.I.LJ. 292, at 303 et seg. (1990).

  • 11 For references to practice, see C. Schreuer, The IcsiD Convention: A Commentary, Cambridge University Press, Cambridge, U.K., 2001, p. 811. as See, for example, the Ghana-Romania BIT of 1989, Article 4(3). 4(, See, for example, the Argcntina-Spain Bit, Article x(3)(a). On this provision, see Ernilio Augustin Maffezini v. The Kingdom of Spain, Decision on Jurisdiction, 25 January 2000, 16 ICSID Rev.-F.I.L.J. 203 (2001). 47 See, for example, the Austria-Macedonia BIT, Article 13(3). 41 See the comments on this fact with regard to the Pakistan-Switzerland BIT in Scs v. Pakistan, supra, footnote 28, at paras. 121, 151 and 176.

  • 49Supra, footnote 46. 511 Ibid., at para. 63.

  • ,I ICSID tribunals have dealt with a similar issue in the context of an invocation of a lispetideiis before domestic courts; see Beiwenuti & Botifaitt v. Congo, Award, 15 August 1980, 1 ICSID Reports 330, at 340; Anuo Asia Corporation and others v. Republic of Indonesia, Decision on Jurisdiction, 25 September 1983, 1 ICSID Reports 389, at 409 (1993). See also the Award of 20 November 1984 in this case, 1 IcsiD Reports 413, at 453 (1993). 52 Eudo", A. Olguin v. Rcyu6lic ofParneuay, Decision on Jurisdiction, 8 August 2000, 18 ICSID Rev.-F.LLJ, 133 (2003). 53 Ibid., para. 30; translation prepared for IcsiD Reports, Vol. 6. ,4 Compania de Aguas del Aconguija S.A. t7 Cornpagnie Generale des Eaux (Vivetrdi) v. Argentine Repnblic, Award, 21 November 2000, 40 I.L.M. 426 (2001), 5 IcSl1) Reports 296.

  • 55 Paragraph 3 provides for arbitration by the ICSID or ad hoc arbitration under the UNCrrun� Rules at the investor's choice. 56 Ibid., at pp. 435-436, paras. 40 and 42.

  • 5� Ibid., at pp. 438-439. See also at p. 444, para. 81. 58 Compaiiia de Agiias del Aronq ya S.A. & Compaqnie Generale des Eaux (Vivendi) v. Argentine Republic, Decision on Annulment, 3 July 2002, 41 LL.M. 1135 (2002). 19 Ibid., at pp. 1144 and 1145. "" Ibid., at pp. 1147-11148, para. 55.

  • 61 Alex Gellill,EastemCreditLimited,Inc.mId A.S.Baltoilv.T7ieRepitblic()fF.�toriia, Award, 25 June 2001, 17 ICSID Rev.-F.LL.J. 395 (2002). 62 Article vi of the l3rr. 63 Genin v. Estonia, supra, footnote 61, at paras. 47 and 58. 64 Ibid., at para. 321.

  • fis Ibid., paras. 331-333. fifi Supra, footnote 19. 61 Ibid., paras. 162-163. 6g Middle East Cement Shippinq and Handling Co. S.A. v. Arab Republic of Egypt, Award, 12 April 2002; available at: <www.worldbank.org/icsid/cases/me_cement-award.pd6.

  • 69 Ibid., para. 71. 7n Supra, footnote 12. 71 Ibid., at para. 77. 72 Ibid., at paras. 78-82. 7i Ibid., para. 80; footnote omitted. The Tribunal cited Vivendi, CC1liu and ()Z�1/íll. 74 Supra, footnote I 1. "5 Ibid., at paras. 37-41 and 86.

  • 7h Ibid., at para. 88. 77 Ibid., para. 90. �" Ibid., at paras. 91 and 92. 79 Supra, footnote 39. 80 Ibid., paras. 97-98.

  • 11 See also Article iv(2) of the same BIT, guaranteeing "a right to prompt review by the appropriate judicial or administrative authorities" in case of expropriation.

  • 82 See, for example, Article 9(1) of the Netherlands-Venezuela BIT. s; See also Article x(i) of the Costa ltica-Paraguay BIT which contains an investor-State dispute settlement clause covering only disputes "respect a cuestiolles regllladas por elpresciite Actierdo" ("in respect of questions regulated by the present Agreement"). 84 See, for example, Article 8(1) of the Argcntina-France BIT. R5 See, for example, Salini v. Morocco, supra, footnote 8, at paras. 59-62; Viverrdi, Decision on Annulment, supra, footnote 58, at p. 1147, para. 55; Scs Societe Cenerale de Surveillance S.A. v. Tlre Republic ojthe Philippines, Decision on Jurisdiction, 29 January 2004, paras. z135; available at: <www.worldbank.orglicsid/cases/SGSvPhiI-final.pd6, with a declaration by arbitrator Crivellaro at: <www.worldbank.org/icsid/cases/SGSvPhil-declaration.pdf. But see Scs v. Pakistan, supra, footnote 28, at pp. 360-361, para. 161.

  • afi See American Law Institute, Restatement of the l.aw, Foreign Relations Law of the United States, 1986, §712, Comment h, Vol. 2, p. 201: "... not every repudiation or breach by a state of a contract with a foreign national constitutes a violation of international law." " "� See S.M. Schwebel, On Whether the Breach by a State of a Contract with an Aliell is a Breach of International Law, in International Law at the T'ime of its Codiftcation, Essays in Honour of Roberto Ago, III, Giuffrè, Milan, 1987, p. 401. "n Robert Jennings and Arthur Watts, Oppenheim's International Law, 9th edition, Vol. 1, Longman, London, 1992, p. 927; footnotes omitted. �9 See also F. Rigaux, Les sitnations juridi9ues illdividuelles darts un systeme de rclativitè géllérale, 213 Rccueil dcs Courts i, 1989, pp. 229-230; I.F.I. Shihata, Applicable Law in International Arbitration: Speciftc Aspects in the Case of the Involvement of State Parties, in LF.I. Shihata (ed.), The World Bank in a Changing World, Vol. II, Kluwer Law, 1995, p. 601.

  • "I Garcia Amador, 4th report [on State responsibility], para. 98. [Footnote original]. "' P. Weil, Problems relat fs aux contrats passes entre 1m Etat et un particiilicr, 128 Recueil des Cours IT], 1969, at p. 130; author's translation from the French original. '12 The example chosen by Mann concerned Article 111(3) of the Philippines-United Kingdom BIT. i. '13 F. A. Mann, British Treaties for the Promotion and Protection of Investments, 52 British Yearbook of International Law 241, at p. 246 (1981). 94 R. Dolzer and M. Stevens, Bilateral Investment Treaties, Kluwer Law, 1995, pp. 81-82; footnote omitted. 95 See K. J. Vandevelde, United States Investment Treaties: Policy and Practice, Boston, 1992, at p. 78; J. Karl, The Promotion and Protection of German Foreign Investment Abroad, 11 I 1(-:sll) Rev.-F.I.Lj. 1, at 23 (1996). 96 Fedax N. V. v. The Republic of Venezuela, Award, 9 March 1998, 37 I.L.M. 1391 (1998).

  • 9� Scs v. Pakistan, supra, footnote 28, at pp. 361-367, paras. 163-173. 98 Ibid., at para. 165. 91 Ibid., para. 166. 1IHI Ibid., at paras. 167 and 173. 1111 Ibid., at para. 168.

  • 102 ]d 111.1 Ibid., para. 170. '°r Ibid., para. 171. The Tribunal's statement is accompanied by a footnote containing an extensive quotation from the TIlt' Loeweti Group Inc. and Raymond Loewen v. United States of Amerua, Award, 4 J.W.I. 4, August 2003, pp. 675-731. The relevance of that quotation to the question at issue is unclear. "" See also S.A. Alexandrov, Introductory Note, 42 LL.M. 1284 (2003). 111" See, for example, Article 3(4) of the Nethcrlands-Venezucla BIT; Article 2(2) of the Egypt-United Kingdom BIT; Article 2(4) of the Italy Jordan BIT.

  • '��Amcov.Indonesia,supra, footnote S1, at pp. 394, 397, 398, 400 and 402; Cable 'I'V v. St. Kitts and Nevis, Award, 13 January 1997, 13 ICSID Rev.-F.t.LJ. 328, at 386 (1998); CSOB v. Slovakia, Decision on Jurisdiction, 24 May 1999, 14 1(:sii) Rev.-F.LLJ. 251, at 263 (1999); So.4Bi v. Seneqal, Award, 25 February 1988, 2 ICSID Reports 205, at 205 and 206; Spp v. EAypt, Decision on Jurisdiction, 14 April 1988, 3 1(:six3 Reports 143, at 143-144; I'radex v. Albania, snpra, footnote 7, at p. 194. For an analysis of some of these cases, see Schreuer, sura, footnote 44, pp. 249-252. lli8 Sura, footnote 85. 11i4 Ibid., at para. 115. ""Ibid., at para. 116. 111 Ibid., para. 117. "= Ibid., at para. 118. 1 L1 Ibid., at para. 125. 114 Ibid., at paras. 119 and 120. s Ibid., at paras. 119-126. �'6 Ibid., at para. 125.

  • 117 Ibid., para. 126. 118 Ibid., para. 128. 11" In another part of the Decision, the Tribunal found that the claim was inadmissible due to an exclusive jurisdiction clause in the underlying contract pointing to the domestic courts of the Philippines. Rather than dismissing the claim, the Tribunal stayed the proceedings (ibid., at paras. 136-155 and 17(>-176).

  • �=° For a discussion of the coherence of case-law under the 1(:sii) Convention, see Scs v. Philippines, supra, footnote 85, at para. 97.

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