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Even if an institution is not an organ of a state, its actions are attributable to the state if they are de jure imperii
Even if an act by a state entity is impermissible under local law, it can be attributed to the state
A state's ban on foreign workers is not discriminatory, even if it is limited to a specific industry
Even if a dispute settlement clause appears to apply to all disputes arising out of an investment, the jurisdiction of a tribunal is still limited to disputes either concerning actions occurring after the treaty's entry into force or continuing or composite acts
An MFN clause relating to a single standard of protection only cannot justify the introduction of new and different standards of protection
In case the local company controlled by the claimant does not exhaust its contractual remedies, this does not influence the standing of the claimant regarding his or her treaty rights
Counterclaims based on the respondent's national public law lack a reasonable nexus to the claimant's treaty claims; otherwise, the respondent could achieve an extraterritorial effect of its public law
- Investment Treaty Arbitration > Counterclaims
- UNCITRAL Arbitration Rules 1976 > Article 19
Although Article 19(3) UNCITRAL Arbitration Rules relates to contractual relationships, a state can invoke a counterclaim under an IIT if there is a close connection to the primary claim
- Investment Treaty Arbitration > Counterclaims
- UNCITRAL Arbitration Rules 1976 > Article 19
An investor has to be aware that modifications of taxation levels represent a risk for his or her investment; without a stabilization agreement, he or she cannot establish a legitimate expectation that a state will refrain from increasing taxes
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Fair and Equitable Treatment > Case Groups > Legitimate Expectations
- Investment Contracts
A state's legislation being ill-conceived does not necessarily amount to a treaty breach
Actions by a state's legislative assembly can constitute a treaty violation, unless provided otherwise in the treaty
Even if a legislature passes a law in short time and without consultation of the industry, this does not constitute a lack of transparency
A state is not prohibited from imposing different tax regimes on different industries and on different products
The full protection and security standard is not a strict liability standard
An IIT is not necessarily applicable to disputes arising prior to its entry into force
- Vienna Convention on the Law of Treaties > Article 28 - Non-retroactivity of treaties
- International Investment Treaties (IITs) > Protection of Investors under IITs > Applicability of IITs > Ratione Temporis – Application in Time
Minority shareholdings can constitute investments
Definition of stability agreement
A company the shares of which are owned 100% by the claimant constitutes an investment; as a shareholder, he or she can exercise his or her own treaty rights regarding this investment
Even if the investor fails to abide by a negotiation period, the jurisdiction of a tribunal is not concerned as long as the delay has expired at the time of the decision
Failure to apply for a stability agreement does not render a treaty based claim inadmissible
- Investment Contracts
- Investment Treaty Arbitration > Admissibility > Further Problems
Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Relationship of IITs to Other Sources of International Law > Relationship of an IIT to General Principles of International Law > Abuse of Process
- Investment Treaty Arbitration > Jurisdiction > Further Problems
- Investment Treaty Arbitration > Admissibility > Further Problems
If a FET clause explicitly prohibits discriminatory measures by a state, this does not mean that the protection by the clause is restricted to discriminatory measures only
International Law Rules Applicable to IITs
Relationship of IITs to Other Sources of International Law
Relationship of an IIT to General Principles of International Law
Abuse of Process
Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
Law of State Responsibility
Attribution of Acts
General Remarks
Even if an act by a state entity is impermissible under local law, it can be attributed to the state
Attribution of Acts by Organs / Provinces / Municipalities
Actions by a state's legislative assembly can constitute a treaty violation, unless provided otherwise in the treaty
Attribution of Acts by State Entities
Even if an institution is not an organ of a state, its actions are attributable to the state if they are de jure imperii
Protection of Investors under IITs
Applicability of IITs
Ratione Materiae – Definition of Investment
The Concept of "Investment"
Shares
Minority shareholdings can constitute investments
A company the shares of which are owned 100% by the claimant constitutes an investment; as a shareholder, he or she can exercise his or her own treaty rights regarding this investment
Ratione Temporis – Application in Time
An IIT is not necessarily applicable to disputes arising prior to its entry into force
Expropriation and Standards of Protection
Fair and Equitable Treatment
Character and Scope
If a FET clause explicitly prohibits discriminatory measures by a state, this does not mean that the protection by the clause is restricted to discriminatory measures only
Discretion of the State
A state's legislation being ill-conceived does not necessarily amount to a treaty breach
Case Groups
Transparency
Even if a legislature passes a law in short time and without consultation of the industry, this does not constitute a lack of transparency
Legitimate Expectations
An investor has to be aware that modifications of taxation levels represent a risk for his or her investment; without a stabilization agreement, he or she cannot establish a legitimate expectation that a state will refrain from increasing taxes
Arbitrary and Discriminatory Measures
A state's ban on foreign workers is not discriminatory, even if it is limited to a specific industry
A state is not prohibited from imposing different tax regimes on different industries and on different products
Full Protection and Security
Character and Scope
The full protection and security standard is not a strict liability standard
Most-Favoured-Nation Treatment (MFN)
General Remarks
An MFN clause relating to a single standard of protection only cannot justify the introduction of new and different standards of protection
Dispute Settlement Clauses
Waiting Clauses / Duty to Attempt Settlement Before Arbitration
Consequences of Failure to Observe the Waiting Period
Even if the investor fails to abide by a negotiation period, the jurisdiction of a tribunal is not concerned as long as the delay has expired at the time of the decision
Wide Dispute Settlement Clauses
Even if a dispute settlement clause appears to apply to all disputes arising out of an investment, the jurisdiction of a tribunal is still limited to disputes either concerning actions occurring after the treaty's entry into force or continuing or composite acts
An investor has to be aware that modifications of taxation levels represent a risk for his or her investment; without a stabilization agreement, he or she cannot establish a legitimate expectation that a state will refrain from increasing taxes
Definition of stability agreement
Failure to apply for a stability agreement does not render a treaty based claim inadmissible
Jurisdiction
Further Problems
Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
Admissibility
Further Problems
Failure to apply for a stability agreement does not render a treaty based claim inadmissible
Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
Correct Claimant
In case the local company controlled by the claimant does not exhaust its contractual remedies, this does not influence the standing of the claimant regarding his or her treaty rights
Counterclaims
Counterclaims based on the respondent's national public law lack a reasonable nexus to the claimant's treaty claims; otherwise, the respondent could achieve an extraterritorial effect of its public law
Although Article 19(3) UNCITRAL Arbitration Rules relates to contractual relationships, a state can invoke a counterclaim under an IIT if there is a close connection to the primary claim
Article 28 - Non-retroactivity of treaties
An IIT is not necessarily applicable to disputes arising prior to its entry into force
Article 19
Counterclaims based on the respondent's national public law lack a reasonable nexus to the claimant's treaty claims; otherwise, the respondent could achieve an extraterritorial effect of its public law
Although Article 19(3) UNCITRAL Arbitration Rules relates to contractual relationships, a state can invoke a counterclaim under an IIT if there is a close connection to the primary claim