Public Law Studies Quarterly

Parallel Contractual and Treaty Claims in Foreign Investment Disputes

Document Type : Article

Authors

Leila Razavi Toussi 1
Seyed Jamal Seyfi 2
Mohden Mohebi 3

1 PhD in International Law, Faculty of Law and Political Science, Islamic Azad University, Science and Research Branch, Tehran, Iran

2 Associate Professor, Department of Public International Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran

3 Associate Professor, Department of Law and Political Science, Islamic Azad University, Science and Research Branch, Tehran, Iran

https://doi.org/10.22059/jplsq.2020.292583.2239
Abstract
International investment treaties and contracts are two different legal instruments aimed at encouraging and supporting foreign investment.  The coexistence and simultaneous governance of the two is possible in the case of a single investment. However, under international investment law, coexistence between these two instruments has created major problems. Indeed, due to the broadness of investor treatment standards, especially the fair and equitable treatment standard, sometimes contractual breaches are seen as breach of the broader treaty standards. As such, due to the difference between dispute settlement clauses in investment contracts and inter-state investment treaties and the applicability of each clause, there will always be the possibility of conflict of jurisdiction between the authorities concerned. This article explores the circumstances under which investment treaty arbitration will be competent to adjudicate claims arising out of breach of an investment contract. In addition,  ICSID arbitral jurisprudence is analyzed on the basis of restrictive and/or extensive interpretation of dispute settlements clauses in both investment contracts and investment treaties.

Keywords

treaty claims
contract claims
fork in the road clause
umbrella clause
dispute settlement clause
ICSID
arbitral tribunals

  1.  English

    1. A) Books
    2. Cremades, Bernardo M. & Cairns, David J. A. )2004(, “Contract and Treaty Claims and Choice of Forum in Foreign Investment Disputes”, in: Horn, Norbert (ed.), “Arbitration Foreign Investment Disputes”,
    3. Douglas, Zachary (2009), The International Law of Investment Claims, Cambridge University Press.
    4. Sir Robert Jennings & Sir Arthur Watts (1996), Oppenheim’s International Law, Ninth Ed., Vol.1.
    5. Wehland, Hanno (2013), “The Coordination of Multiple Proceedings in Investment Treaty Arbitration”, Oxford University Press.

     

    1. B) Articles
    2. Arato, Julian )2016), “The Logic of Contract in the World of Investment Treaties", William & Mary Law Review, Vol. 58, No. 2, pp. 351-417.
    3. Cuniberti, Gilles )2006), "Parallel Litigation and Foreign Investment Dispute Settlement", ICSID Review Foreign Investment Law Journal, Vol. 21, pp.1-48.
    4. Crawford, James (2007(,"Treaty and Contract in Investment Arbitration", The 22nd Freshfields Lectures on International Arbitration, pp. 1-22.
    5. Demirkol, Berk (2018),”Non-treaty Claims in Investment Treaty Arbitration”,Leiden Journal of International Law, Vol.31, No.1, pp.59-91.
    6. Dias Simoes, Fernando (2017(, "UNCITRAL’s Work on Concurrent Proceedings in Investment Arbitration: Overcoming the ‘Treaty/Contract Claims’ Gap", in Muruga Ramaswamy and João Ribeiro (eds.)"Harmonising Trade Law to Enable Private Sector Regional Development, UNCITRAL Regional Centre for Asia and the Pacific", New Zealand Association for Comparative Law, pp. 59-80.
    7. Franck, Susan )2009(, “Development and Outcomes of Investment Treaty Arbitration”, Harvard International Law Journal, Vol. 50, Issue 2, pp. 435-489.
    8. Schreuer, Christoph (2005),, “Investment Treaty Arbitration and Jurisdiction over Contract Claims, The Vivendi I Case Considered, in International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law”, Todd Weiler (ed.), pp. 281-300.
    9. Shany, Yuval (2005(, “Contract Claims V. Treaty Claims: Mapping Conflicts between ICSID Decisions on Multi-Sourced Investment Claims”, American Journal of International Law, Vol. 99, No. 4, pp. 835-851.
    10. Stanimir A., Alexandrov )2010(, “Breach of Treaty Claims and Breach of Contract Claims: Is It Still Unknown Territory?” in Yannaca-Small Katia (ed.),” Arbitration under International Investment Agreements: A Guide to the Key Issues”, Oxford University Press, New York, pp. 323-350.
    11. Walde, Thomas )2005),“Umbrella Clause in Investment Arbitration”, The Journal of World Investment & Trade, Vol. 6, No. 183, pp. 183-236.

     

    1. C) Documents
    2. Convention on the Settlement of Investment Disputes between States and Nationals of Other States - International Centre for Settlement of Investment Disputes (1965).
    3. Vienna Convention on the Law of Treaties (1969).

     

    1. D) Cases
    2. CMS Gas Transmission Company v. The Republic of Argentina ICSID Case No. ARB/01/8, Decision of the Tribunal on objections to on jurisdiction (17 July 2003).
    3. Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic ICSID Case No. ARB/97/3, Award (21 November 2001).
    4. Compañía de Aguas del Aconquija S.A and Vivendi Universal v. the Argentine Republic ICSID Case No. ARB/97/3, Decision on Annulment (2002).
    5. Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Award (12 October 2005).
    6. Phillips Petroleum Company Iran v. Islamic Republic of Iran, Iran -United States Claims Tribunals Award No.425-39-2, The Hague (29 June 1989).
    7. SGS Société Générale de Surveillance S.A. v. Republic of Philippines ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction (29 January 2004).
    8. SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan ICSID Case No. ARB/01/13, Decision of the Tribunal on Objections to Jurisdiction (August 6, 2003).
    9. Salini Costruttori S.p.A and Italstrade S.p.A.v.Kingdom of Morocco ICSID Case No. ARB/00/4, Decision on Jurisdiction (23 July 2001).
    10. Sothern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt ICSID Case No. ARB/84.3), Award on the merits (May 20,1992),3 ICSID Reports189 (1995).

     

    References in Persian

    1. A) Books
    2. Piran, Hossein (2010), The Law of International Investment, Tehran: Ganje Danesh (In Persian).
    3. Zamani ,Seyed Ghasem & Hasibi , Behazin (2019), The Principles of Investment Law, The SD Institute of Law, Research and Study (In Persian).

     

    1. B) Articles
    2. Gholami, Afife & Habibzadeh,Tavakol (2016), “Foreign Investment Contracts and Scope of Host State Commitments Arising From Treaty”, Public Law Research, Vol. 18, Issue 51, pp. 81-109, DOI (10.22054/qjpl.2016.5424) (In Persian).
    3. Zamani ,Seyyed Ghasem  & Shiralizadeh Abolfazl (2019), “The Principles and Procedure of Interpretation of Investment Treaties by Arbitral Tribunals and Priority of International Law over Domestic Law”, The Judiciary Law Journal , Vol. 83, Issue 105, pp. 111-136, DOI (10.22106/JLJ.2019.35489) (In Persian).
Public Law Studies Quarterly
Volume 52, Issue 4
Winter 2023
Winter 2022
Pages 1651-1676

  • Receive Date 16 November 2019
  • Revise Date 17 February 2020
  • Accept Date 21 June 2020

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