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A waiting period is not a procedural rule, but a jurisdictional provision
Even if the term "treatment" could be understood as applying to dispute settlement clauses, an additional territorial limitation may still be capable of excluding international dispute settlement clauses from the scope of the MFN clause
A jurisdictional issue can be distinguished from an admissibility issue by asking whether the requirement affects the consent to arbitrate
Limitations on the excessively strict application of a treaty provision can be implicit and need not be stated expressly; for example, futility is a recognized exception to jurisdictional prerequisites in international law; however, judically-crafted exceptions must find support in more than a tribunal's policy considerations
- International Investment Treaties (IITs) > Protection of Investors under IITs > Dispute Settlement Clauses > Waiting Clauses / Duty to Attempt Settlement Before Arbitration > Consequences of Failure to Observe the Waiting Period
- Vienna Convention on the Law of Treaties > Article 31 - General rule of interpretation > General Remarks
- Vienna Convention on the Law of Treaties > Article 32 - Supplementary means of interpretation
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Law of Treaties > Rules of Interpretation > Further Problems
There is a trend in public international law favouring the strict application of procedural prerequisites; thus, there is no reason to deem a waiting clause non-mandatory
- International Investment Treaties (IITs) > Protection of Investors under IITs > Dispute Settlement Clauses > Waiting Clauses / Duty to Attempt Settlement Before Arbitration > Consequences of Failure to Observe the Waiting Period
- Investment Treaty Arbitration > Admissibility > Further Problems
While a tribunal holds an inherent power over procedure, its only inherent jurisdiction is its kompetenz-kompetenz to determine its own jurisdiction; admissibility falls between these extremes
When exercising a right provided for in a treaty, a third party like the investor must comply with the conditions for the exercise of that right provided for in the treaty; he or she cannot vary its terms
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Law of Treaties > Further Problems
- Vienna Convention on the Law of Treaties > Article 34 - General rule regarding third States
In principle states are capable of drafting MFN clauses applicable to dispute settlement matters; if, however, the clause is not explicit in this regard, a tribunal must not use policy considerations (such as a tendency for treaty shopping) but an analysis of the IIT text to elaborate its meaning
A state's consent to arbitration must not be presumed in the face of ambiguity
The fact that an IIT lists certain exceptions to MFN treatment, and there is no exception for dispute settlement clauses, is no indication that the parties intended dispute settlement clauses to be covered by the MFN clause
Interpreting an MFN clause in the context of the dispute settlement clauses of the same IIT, a tribunal may draw the conclusion that taking into account the principle of effectiveness the stipulation of the dispute settlement clause must not be rendered meaningless ab initio by an extensive interpretation of the MFN clause
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Law of Treaties > Rules of Interpretation > Special Rules of Interpretation
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Most-Favoured-Nation Treatment (MFN) > Application to dispute settlement clauses
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Relationship of Standards of Protection Within a Single IIT
Differential treatment does not automatically constitute "less favourable" treatment; dispute settlement clauses in two IITs have to be compared as a whole, not part-by-part; a fork-in-the-road requirement in one IIT is not necessarily better treatment than a requirement to pursue local remedies for a certain amount of time
While the ordinary meaning of the term "treatment" is broad, an examination of sources contemporary to an IIT can reveal that the term was most likely not meant to cover dispute settlement provisions
International Law Rules Applicable to IITs
Law of Treaties
Rules of Interpretation
Special Rules of Interpretation
Interpreting an MFN clause in the context of the dispute settlement clauses of the same IIT, a tribunal may draw the conclusion that taking into account the principle of effectiveness the stipulation of the dispute settlement clause must not be rendered meaningless ab initio by an extensive interpretation of the MFN clause
Further Problems
Limitations on the excessively strict application of a treaty provision can be implicit and need not be stated expressly; for example, futility is a recognized exception to jurisdictional prerequisites in international law; however, judically-crafted exceptions must find support in more than a tribunal's policy considerations
Further Problems
When exercising a right provided for in a treaty, a third party like the investor must comply with the conditions for the exercise of that right provided for in the treaty; he or she cannot vary its terms
Protection of Investors under IITs
Expropriation and Standards of Protection
Most-Favoured-Nation Treatment (MFN)
Application to dispute settlement clauses
Even if the term "treatment" could be understood as applying to dispute settlement clauses, an additional territorial limitation may still be capable of excluding international dispute settlement clauses from the scope of the MFN clause
In principle states are capable of drafting MFN clauses applicable to dispute settlement matters; if, however, the clause is not explicit in this regard, a tribunal must not use policy considerations (such as a tendency for treaty shopping) but an analysis of the IIT text to elaborate its meaning
The fact that an IIT lists certain exceptions to MFN treatment, and there is no exception for dispute settlement clauses, is no indication that the parties intended dispute settlement clauses to be covered by the MFN clause
Interpreting an MFN clause in the context of the dispute settlement clauses of the same IIT, a tribunal may draw the conclusion that taking into account the principle of effectiveness the stipulation of the dispute settlement clause must not be rendered meaningless ab initio by an extensive interpretation of the MFN clause
Differential treatment does not automatically constitute "less favourable" treatment; dispute settlement clauses in two IITs have to be compared as a whole, not part-by-part; a fork-in-the-road requirement in one IIT is not necessarily better treatment than a requirement to pursue local remedies for a certain amount of time
While the ordinary meaning of the term "treatment" is broad, an examination of sources contemporary to an IIT can reveal that the term was most likely not meant to cover dispute settlement provisions
Relationship of Standards of Protection Within a Single IIT
Interpreting an MFN clause in the context of the dispute settlement clauses of the same IIT, a tribunal may draw the conclusion that taking into account the principle of effectiveness the stipulation of the dispute settlement clause must not be rendered meaningless ab initio by an extensive interpretation of the MFN clause
Dispute Settlement Clauses
Waiting Clauses / Duty to Attempt Settlement Before Arbitration
Character of Waiting Clauses
A waiting period is not a procedural rule, but a jurisdictional provision
Consequences of Failure to Observe the Waiting Period
Limitations on the excessively strict application of a treaty provision can be implicit and need not be stated expressly; for example, futility is a recognized exception to jurisdictional prerequisites in international law; however, judically-crafted exceptions must find support in more than a tribunal's policy considerations
There is a trend in public international law favouring the strict application of procedural prerequisites; thus, there is no reason to deem a waiting clause non-mandatory
Distinction Between Jurisdiction and Admissibility
A jurisdictional issue can be distinguished from an admissibility issue by asking whether the requirement affects the consent to arbitrate
While a tribunal holds an inherent power over procedure, its only inherent jurisdiction is its kompetenz-kompetenz to determine its own jurisdiction; admissibility falls between these extremes
Jurisdiction
Consent by the Parties
A state's consent to arbitration must not be presumed in the face of ambiguity
Admissibility
Further Problems
There is a trend in public international law favouring the strict application of procedural prerequisites; thus, there is no reason to deem a waiting clause non-mandatory
Article 31 - General rule of interpretation
General Remarks
Limitations on the excessively strict application of a treaty provision can be implicit and need not be stated expressly; for example, futility is a recognized exception to jurisdictional prerequisites in international law; however, judically-crafted exceptions must find support in more than a tribunal's policy considerations
Article 32 - Supplementary means of interpretation
Limitations on the excessively strict application of a treaty provision can be implicit and need not be stated expressly; for example, futility is a recognized exception to jurisdictional prerequisites in international law; however, judically-crafted exceptions must find support in more than a tribunal's policy considerations
Article 34 - General rule regarding third States
When exercising a right provided for in a treaty, a third party like the investor must comply with the conditions for the exercise of that right provided for in the treaty; he or she cannot vary its terms