International Investment Law and Arbitration Commentary, Awards and other Materials

CHAPTER OUTLINE

This chapter discusses the evolution and basis of investment arbitration against the backdrop of other means of investment dispute settlement. The introduction revisits the varieties of investment dispute settlement, of which investment arbitration is only one. Section 1 goes on to explain the notion of ‘arbitration without privity’. It is that which makes non-contractually-based investment arbitration, such as treaty-based investment arbitration, distinctive. According to this idea, a claim may be brought by an investor even absent a contractual relationship between the investor and the host State. Section 2 continues this discussion by exploring the different ways in which consent to arbitration may be expressed, and the requirement that such consent should be expressed in writing. Section 3 deals with varieties of treaty clauses which provide for investment treaty arbitration, namely, fork-in-the-road clauses, as well as other procedural preconditions. We continue with Section 4, which discusses the complication of contractual forum selection clauses which may exist alongside a claimant's option to choose investment arbitration – for example, contractual clauses which may choose a different means from arbitration altogether, such as those which evince the selection of a domestic court system. Finally, for the sake of completeness, Section 5 discusses inter-State (as opposed to investor-State) investment dispute settlement. A hopefully useful summary appears at the end of Section 5. An additional section, Section 6, offers – as a practical matter – a brief discussion of some of the factors which may affect the choice between ICSID and non-ICSID arbitration. It does not seek to replace more detailed comparisons in other parts of this book, but is simply intended at this juncture to draw the issue to the reader's mind.

INTRODUCTION

Recall Chapter 1. The subject of investment dispute settlement is, and ought to be, broader than investment arbitration. For decades, from around the 1950s to the 1980s, there was not an effective means of adjudicating investment disputes, domestically or internationally. It was not investment arbitration which filled that gap, but the international negotiation of lump-sum settlements. Other international means of settling investment claims throughout the twentieth century included special claims commissions or tribunals, as well as State-to-State international adjudication and arbitration. Thus, the claims arising from the Mexican Revolution were addressed by a US–Mexican claims commission, while those arising from the Russian Revolution were principally addressed through diplomatic settlement.