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Where the title or the preamble of the relevant treaty indicates that the parties have agreed to “protect” and to “promote” investments they did so in order to create favourable conditions for investments of one of the two states in the territory of the other state
- Vienna Convention on the Law of Treaties > Article 31 - General rule of interpretation > Object and Purpose
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Law of Treaties > Rules of Interpretation > Object and Purpose as a Rule of Interpretation
States recognize that the promotion and protection of investments through IITs may stimulate private economic initiative and increase the well-being of the peoples of both countries
An MFN clause operates in two directions: it protects the investor against discrimination for being a foreigner and at the same time guarantees every benefit accorded to other foreign investors
The acceptance of a clause from a model text does not invest this clause with either more or less legal force than other clauses which may had been more difficult to negotiate; the end result of the negotiations is an agreed text and the legal significance of each clause is not affected by how arduous was the negotiating path to arrive there
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Law of Treaties > Rules of Interpretation > Interpretation in the Context of the Treaty
- Investment Treaty Arbitration > Jurisdiction > Interpreting Provisions Concerning Jurisdiction
IITs grant access to a distinctive dispute settlement mechanism normally not open to investors; it is part of the treatment of foreign investors and investments and of the advantages accessible through a MFN clause
An IIT as such does not restrict the investors’ and the host state’s access to the national judicial system, it just provides for additional remedies normally not open to investors
An MFN clause is only related to the advantages that the treaty of reference may grant, not to the disadvantages; this applies regardless of the fact that sometimes disadvantages may have been a trade-off for advantages
When relying on an MFN clause an investor may not override public policy considerations judged by the parties to a treaty essential to their agreement
An investment is any kind of asset considered to be such under the law of the Contracting Party where the investment has been made
If a matter is dealt within an IIT provision and not specifically mentioned under other provisions, it does not necessarily follow that the other provisions should be considered to exclude the matter especially covered
“Directly” relates to dispute and not to investment; accordingly, investments may also be of an indirect character
A dispute must exist at the time of the notice of arbitration; it must also exist at the time the dispute is filed with the ICSID Secretariat and at the time of registration
- ICSID Convention > Jurisdiction of the Centre (Articles 25-27) > Article 25 > Jurisdiction Ratione Temporis
- International Investment Treaties (IITs) > Protection of Investors under IITs > Applicability of IITs > Ratione Temporis – Application in Time
At the jurisdictional stage, a tribunal has a limited ability to scrutinize the claims as formulated by the claimant. If the facts asserted by the claimant are capable of being regarded as alleged breaches of the IIT, the claimant should be able to have them considered on their merits
Article 26 ICSID Convention presumes exclusivity of the remedies under the Convention unless the parties had agreed otherwise; it does not provide that what may be agreed otherwise excludes the remedies under the Convention, in which case the remedies under the Convention are additionally applicable to those otherwise agreed
International Law Rules Applicable to IITs
Law of Treaties
Rules of Interpretation
Object and Purpose as a Rule of Interpretation
Where the title or the preamble of the relevant treaty indicates that the parties have agreed to “protect” and to “promote” investments they did so in order to create favourable conditions for investments of one of the two states in the territory of the other state
Interpretation in the Context of the Treaty
The acceptance of a clause from a model text does not invest this clause with either more or less legal force than other clauses which may had been more difficult to negotiate; the end result of the negotiations is an agreed text and the legal significance of each clause is not affected by how arduous was the negotiating path to arrive there
Special Rules of Interpretation
If a matter is dealt within an IIT provision and not specifically mentioned under other provisions, it does not necessarily follow that the other provisions should be considered to exclude the matter especially covered
Protection of Investors under IITs
Character of IITs
States recognize that the promotion and protection of investments through IITs may stimulate private economic initiative and increase the well-being of the peoples of both countries
Applicability of IITs
Ratione Materiae – Definition of Investment
Investment “In Accordance With the Legislation”
An investment is any kind of asset considered to be such under the law of the Contracting Party where the investment has been made
Ratione Temporis – Application in Time
A dispute must exist at the time of the notice of arbitration; it must also exist at the time the dispute is filed with the ICSID Secretariat and at the time of registration
Expropriation and Standards of Protection
Most-Favoured-Nation Treatment (MFN)
General Remarks
An MFN clause operates in two directions: it protects the investor against discrimination for being a foreigner and at the same time guarantees every benefit accorded to other foreign investors
An MFN clause is only related to the advantages that the treaty of reference may grant, not to the disadvantages; this applies regardless of the fact that sometimes disadvantages may have been a trade-off for advantages
When relying on an MFN clause an investor may not override public policy considerations judged by the parties to a treaty essential to their agreement
Application to dispute settlement clauses
IITs grant access to a distinctive dispute settlement mechanism normally not open to investors; it is part of the treatment of foreign investors and investments and of the advantages accessible through a MFN clause
Dispute Settlement Clauses
The Problem of Parallel Proceedings in Cases Where There is no Explicit Clause Avoiding Such Situations
An IIT as such does not restrict the investors’ and the host state’s access to the national judicial system, it just provides for additional remedies normally not open to investors
Jurisdiction
Interpreting Provisions Concerning Jurisdiction
The acceptance of a clause from a model text does not invest this clause with either more or less legal force than other clauses which may had been more difficult to negotiate; the end result of the negotiations is an agreed text and the legal significance of each clause is not affected by how arduous was the negotiating path to arrive there
Admissibility
Prima Facie Case
At the jurisdictional stage, a tribunal has a limited ability to scrutinize the claims as formulated by the claimant. If the facts asserted by the claimant are capable of being regarded as alleged breaches of the IIT, the claimant should be able to have them considered on their merits
Article 31 - General rule of interpretation
Object and Purpose
Where the title or the preamble of the relevant treaty indicates that the parties have agreed to “protect” and to “promote” investments they did so in order to create favourable conditions for investments of one of the two states in the territory of the other state
Jurisdiction of the Centre (Articles 25-27)
Article 25
Jurisdiction Ratione Materiae
Arising Directly out of an Investment
“Directly” relates to dispute and not to investment; accordingly, investments may also be of an indirect character
Jurisdiction Ratione Temporis
A dispute must exist at the time of the notice of arbitration; it must also exist at the time the dispute is filed with the ICSID Secretariat and at the time of registration
Article 26
Article 26 ICSID Convention presumes exclusivity of the remedies under the Convention unless the parties had agreed otherwise; it does not provide that what may be agreed otherwise excludes the remedies under the Convention, in which case the remedies under the Convention are additionally applicable to those otherwise agreed