They just made it up.
(Counsel for the Claimant, Plama Consortium Limited v. Bulgaria)¹x Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 221.

• 1 Introduction

  When a foreign investor elects to enforce, against a host state, its investment treaty rights through international arbitration, it must be in a “dispute settlement relationship”²x Garanti Koza LLP v. Turkmenistan, ICSID, Dissenting Opinion of Laurence Boisson de Chazournes, Case No. ARB/11/20, 3 July 2013, para. 40. with that state. Whether such a relationship exists is generally determined by that state’s consent and by the conditions it attached thereto, which form its “standing offer”. The terms of such standing offer are laid down in the compromissory clauses that are part of the vast majority of investment treaties. In doing so, states establish varying and specific terms for their consent to international arbitration, tailoring their “standing offer” to their policy objectives. They can, for instance, opt for unbridled access by the investor to international dispute settlement, or they can provide for waiting periods and for domestic litigation as prerequisites for the foreign investor to bring a claim against a state.³x Dolzer and Schreuer 2008, p. 232. Thus, state practice on investment treaty dispute settlement provisions is extremely heterogeneous. For instance, the bilateral investment treaty (BIT) concluded between the Netherlands and Kazakhstan stipulates that:

  1. Any dispute between the Contracting Parties concerning the interpretation or application of the present Agreement, which cannot be settled within a reasonable lapse of time by means of diplomatic negotiations, shall, unless the Parties have otherwise agreed, be submitted, at the request of either Party, to an arbitral tribunal, composed of three members …⁴x Agreement on Encouragement and Reciprocal Protection of Investments between the Republic of Kazakhstan and the Kingdom of the Netherlands, Art. 12.

  Kazakhstan and the Netherlands have provided that, as soon as a dispute arises, the foreign investor may pursue international arbitration: this consent is founded on no further requirement. A different choice was made by the parties to the Kazakhstan-Italy BIT. According to that treaty’s ninth article:

  1. In the event that such dispute cannot be settled amicably within six months of the date of the written application for settlement, the investor in question may submit at his choice the dispute for settlement to: a) the Contracting Party’s Court having territorial jurisdiction; b) an ad hoc Arbitration Tribunal, in compliance with the arbitration regulation of the UN Commission on the International Trade Law (UNCITRAL); and the host Contracting Party undertakes hereby to accept the reference to said arbitration. c) the International Centre for Settlement of Investment Disputes, for the implementation of the arbitration procedures under the Washington Convention of 18 March, 1965, on the settlement of investment disputes between States and nationals of other States, if or as soon as both the Contracting Parties have acceded to it.⁵x Agreement between Italy and Kazakhstan for the Promotion and Protection of Investment (1996), Art. 9.

  According to that clause’s plain wording, the Italian investor’s possibility to bring a claim against Kazakhstan before an international judicial body is premised on that investor having first waited for six months, which he would have presumably used to seek an amicable solution. At first sight, Kazakhstan’s consent to international arbitration is premised on the investor having to negotiate with the host state for at least six months. There seems to be no possibility for the Italian investor to bypass such a requirement, even if it has no will to comply therewith. Or, perhaps, such a possibility actually exists. Indeed, the same Italy-Kazakhstan BIT contains a most favoured nation clause (MFN clause) providing that:

  In case, from the legislation of one of the Contracting Parties, or from the international obligations in force or that may come into force for the future for one of the Contracting Parties, should come out a legal framework according to which the investors of the other Contracting Party would be granted a more favourable treatment than the one foreseen in this Agreement, the treatment granted to the investors of such other parties will apply to investors of the relevant Contracting party also for the outstanding relationships.⁶x Ibid., Art. 3.

  Could the Italian investor rely on the foregoing MFN clause in order to avoid the waiting requirement in the same BIT and replace it with the “more favourable” dispute settlement regime contained in the Kazakhstan-Netherlands BIT? May our Italian investor rely on the MFN clause contained within the former treaty in order to overcome the terms of Kazakhstan’s consent to international arbitration? The issue, then, is to what extent, if at all, MFN clauses may be used to bypass conditions in the states’ “standing offer” when resorting to international arbitration. This question is not inconsequential within an international legal system where international adjudication is based on state consent and all tribunals are of limited jurisdiction.⁷x Abaclat and Others v. the Argentine Republic, ICSID, Dissenting Opinion of Georges Abi-Saab, Case No. ARB/07/5, para. 7. An excessively flexible interpretation of these MFN clauses could lead international tribunals to disregard the common will of states on which every treaty is founded, significantly undermining legal certainty in international law. This would have far-reaching consequences, as international law is founded on the premise that legal commitments binding on states may emanate only from their own free will.⁸x S.S. Lotus (France. v. Turkey.), PCIJ, Judgment of 7 September 1927, para. 44.,⁹x Pellet 1989, p. 22.

• 2 The Most Favoured Nation Clause

  MFN treatment foresees, on the one hand, a granting state and, on the other, a beneficiary state: between them, it establishes a link that allows the integration of elements from a third treaty into the relationship between that granting state and that beneficiary state. Hence, the normal effect of MFN clauses in BITs is to expand the rights of investors.¹⁰x Dolzer and Schreuer 2008, p. 86. This said, the MFN clause is a relative standard that depends, for its reach and scope, on the conduct of the particular state and may have no relevance if the state concerned fails to grant any relevant benefit to a third party. However, as soon as a state does confer a relevant benefit to a third party, that benefit is automatically extended to the beneficiary of the MFN clause. This said, the MFN clause operates according to the ejusdem generis principle, under which MFN treatment can be claimed only within the framework set by the clause and relates only to the subject matter for which the clause was stipulated in the first place.¹¹x Plama v. Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction of 8 February 2005, para. 36. Otherwise, that matter is, for what concerns the beneficiary of the MFN clause, res inter alios acta.¹²x Anglo-Iranian Oil Co. case (United Kingdom v. Iran) ICJ, Judgment of 22 July 1952, p. 20.
  Emilio Agustin Maffezini v. Spain was the first instance in which an investor relied on the MFN clause to avoid procedural requirements for dispute settlement. More specifically, the issue was whether an Argentinian investor could invoke the MFN clause in the 1991 Argentina-Spain BIT in order to ignore the provision giving to domestic courts the opportunity to deal with a dispute for a period of eighteen months before it may be submitted to arbitration.¹³x Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000, para. 39. In the end, the Maffezini tribunal reached a conclusion that was to prove controversial:

  if a third party treaty contains provisions for the settlement of disputes that are more favorable to the protection if investors’ rights and interests than those in the basic treaty, such provisions may be extended to the beneficiary of the MFN clause as they are fully compatible with the ejusdem generis principle. Of course, the third-party treaty has to relate to the same subject matter as the basic treaty…¹⁴x Ibid., para. 56.

  A certain number of tribunals have followed the line traced in Maffezini v. Argentina. Among these there are the tribunals in Gas Natural v. Argentina, Siemens v. Argentina and, more recently, Impregilo v. Argentina and Hochtief v. Argentina. Nonetheless, while the Maffezini judgment does not stand on its own, it has been met with considerable disquiet and vigorous dissent.¹⁵x Douglas 2011, p. 98. Other tribunals, such as Plama v. Bulgaria and Telenor v. Hungary, have taken a stance contrary to the conclusions of the Maffezini tribunal. Before 2008, it could at least have been argued that the two sets of cases were distinguishable on factual grounds. Most of the cases in which tribunals had accepted the applicability of the MFN clauses to dispute settlement provisions concerned procedural obstacles.¹⁶x Dolzer and Schreuer, 2008, p. 86. On the other hand, most of the cases in which the effect of MFN clauses had been denied concerned attempts to extend the scope of jurisdiction substantively to issues not covered by the arbitration clauses in the basic treaty.¹⁷x Ibid. However, more recent tribunals have broken this pattern and have ruled that the MFN clause in the BITs at issue could not be used to bypass procedural requirements.¹⁸x Wintershall Aktiengesellschaft v. Argentine Republic, ICSID, Award, Case No. ARB/04/14, 8 December 2008, para. 159.2.^,19x ICS Inspection and Control Services Limited v the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 32.

• 3 More Favourable Treatment?

  The MFN clause is a relative standard: in order to successfully invoke the MFN clause in a third treaty, a foreign investor must establish that investors from a third state are actually being treated more favourably. Yet the wording of the relevant provisions never clarifies what is meant by “more favourable treatment”. On this subject, it is also unclear whether the MFN treatment is a subjective or an objective standard. Here, it will suffice to say that the existing jurisprudence is divided on this point. Tribunals in Impregilo v. Argentina and Garanti Koza LLP v. Turkmenistan have posited that the claimant is more favoured when it has a choice between forums.²⁰x Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011.^,21x Garanti Koza LLP v. Turkmenistan, ICSID, Decision on the Objections for Lack of Consent, Case No. ARB/11/20, 3 July 2013, para. 91. For these tribunals, a system that gives a choice is more favourable than a system that does not.²²x Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011, para. 101. However, in her dissenting opinion to the majority ruling in Impregilo v. Argentina, Professor Stern warns that “it could as well be contended that a system which gives the possibility to use cumulatively two different forums (although one being delayed by 18 months) is more favorable than a system that obliges to elect only one possibility to the detriment of the other”.²³x Impregilo S.p.A v. Argentine Republic, ICSID, Concurring and Dissenting Opinion of Brigitte Stern, Case No ARB/0717, 21 June 2011, para. 11. The tribunal in ICS v. Argentina came to a similar conclusion:

  [the BIT] effectively gives an investor two bites at the apple: once before the domestic courts of the host State, and again before an international arbitral tribunal. Although there are costs and delay involved in litigating before the Argentine courts if this fails to achieve a resolution, in many circumstances, this may be more favorable than direct access to international arbitration after only six months of amicable negotiations.²⁴x ICS Inspection and Control Services Limited v. the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 323.

  Maffezini v. Spain and its successors have been keen to expand the MFN clause’s reach but have done so without fully considering the appropriate benchmark under which to evaluate the “more favourable” nature of third-party treatment. Their assumption on that standard’s subjective nature has been challenged by more recent arbitral decisions. In any case, there are other more profound reasons for which the state’s standing offer may not fall within the ambit of the MFN clause.

• 4 State Consent: Dispute Settlement and the MFN Clause

  In Maffezini v. Spain, the Tribunal dealt with the following MFN clause:

  In all matters subject to this Agreement, this treatment shall not be less favorable than that extended by each Party to the investments made in its territory by investors of a third country²⁵x Acuerdo para la Promocion у la Proteccion Reciproca de Inversiones entre el Reyno de Espana у la Republica Argentina, Art. IV. 2.

  Since the MFN clause could attract only matters belonging to the same category of subjects as that to which the clause itself relates, the tribunal in Maffezini v. Spain had to determine whether dispute settlement was part of the category of subjects to which the MFN clause applied. The tribunal decided that there were good reasons to conclude that dispute settlement arrangements are inextricably related to the protection of foreign investors. In reaching this conclusion, it relied largely on an older arbitral decision, the Ambatielos claim. This dispute concerned the non-execution of a contract concluded between a Greek businessman and the British government for the construction of nine ships. The ensuing dispute between Mr. Ambatielos and the British government had been settled by British courts at the expense of the Greek investor, with the Court of Appeal refusing to hear two key witnesses that were arguably “necessary to enlighten it and to safeguard the rights of [Mr Ambatielos] in the interests of impartial justice”.²⁶x Ambatielos Case (Greece v. United Kingdom), I.C.J., Application Instituting Proceedings, p. 10. Consequently, as Mr. Ambatielos had recourse to his home state’s diplomatic intervention, Greece and the United Kingdom differed on whether the term “commerce and navigation” appearing in the MFN provision the Anglo-Greek of Commerce and Navigation encompassed the “administration of justice”.²⁷x Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 215. Faced with this issue, the ad hoc Commission of Arbitration held that:

  it cannot be said that the administration of justice, in so far as it is concerned with the protection of these rights, must necessarily be excluded from the field of application of the most-favored-nation clause, when the latter includes ‘all matters relating to commerce and navigation’. The question can only be determined in accordance with the intention of the Contracting Parties as deduced from a reasonable interpretation of the Treaty²⁸x Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000, para. 49.

  Therefore, according to the Maffeziniaward, there exists such a close relationship between substantive treatment and dispute settlement provisions contained in investment treaties that the terms of the state’s consent to international arbitration do not have a status separate from the treaty’s other clauses. Hence, it decided that the protection of the rights of persons engaged in investment by means of dispute settlement provisions was covered by the terms of the MFN clause.²⁹x Ibid., para. 54. Arguably, the tribunal’s use of precedent, which occupies a crucial place in its reasoning, was inaccurate. Indeed, the Ambatielos decision related to the denial of justice in domestic courts and not to access to international dispute settlement. In other words, it related to the substantive protection of foreign investors and not to “the import of dispute resolution provisions of another treaty into the basic treaty”.³⁰x Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 215.
  However, the reasoning of the Maffezini tribunal has another important flaw determined by the fact that the jurisdiction of international courts is based on consent of the parties and confined to the extent accepted by them.³¹x Armed Activities on the Territory of the Congo (New Application: 2002), (Democratic Republic of the Congo v. Rwanda), ICJ, Judgment of 3 February 2006, ICJ Reports 2006, para. 88. Within the framework of a BIT, the agreement to arbitrate is arrived at through the consent to arbitration given in advance by a state in respect of investment disputes falling under that BIT and the later acceptance thereof by an investor.³²x Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 198. Certain tribunals have failed to distinguish between the jurisdictional provisions that contain this consent and substantive provisions such as the MFN clause. For instance, the Tribunal in Hochtief v. Argentina opined that

  … the (procedural) right to enforce another (substantive) right is one component of the bundles of rights and duties that make up the legal concept of what property is.³³x Hochtief AG v. The Argentine Republic, ICSID, Decision on Jurisdiction, Case No. ARB/07/31, 25 October 2011, para. 62.

  However, in international law, jurisdictional treatment is never inherent in substantive treatment: it requires a further condition in order to be granted to the investor. That condition is state consent. At the international level, most rights cannot be enforced through the jurisdictional process, and it is only when a state has given its consent that a jurisdictional treatment complements the substantive treatment granted by international rules.³⁴x Impregilo S.p.A v. Argentine Republic, ICSID Case No ARB/0717, B.Stern, Concurring and Dissenting Opinion, para. 45. This distinction between jurisdictional treatment and substantive treatment was also retained in the Kiliç Ĭnşaat Ĭthalat Ĭhracat Sanayi Ve Ticaret Anonim Şirketi v. Turkmenistan award. In this case, the arbitral tribunal held that:

  The text of the [Turkey-Turkmenistan BIT] indicates that its drafters recognised a distinction between substantive rights in relation to investments, and remedial procedures in relation to those rights. The substantive rights in relation to investments are found in Articles II-VI of the Treaty, and the procedures for the resolution of disputes in relation to those rights are set out in Article VII. This distinction suggests strongly that the “treatment” of “investments” for which MFN rights were granted was intended to refer only to the scope of the substantive rights identified and adopted in Articles II-VI.³⁵x Kiliç Ĭnşaat Ĭthalat Ĭhracat Sanayi Ve Ticaret Anonim Şirketi v. Turkmenistan, ICSID, Award, Case No. ARB/10/1, 2 July 2013, para. 7.3.9.

  Consequently, the MFN clause must constitute more than a mere prohibition of discrimination between investors based on their provenance: it must be in itself a clear manifestation of consent to the arbitration of investment disputes according to the rules that the MFN provision might attract from other comparable treaties.³⁶x ICS Inspection and Control Services Limited v the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 278. Should the MFN provision not be found to operate in this way, it cannot be relied on by an investor to bypass the procedural requirements contained in compromissory clauses.
  The tribunals that have followed the reasoning in Maffezini v. Spain have not contested the necessity of state consent per se. Rather, they have argued that procedural requirements in dispute settlement provisions were not jurisdictional requirements and could be subjected to the operation of MFN clauses without calling into question state consent. For instance, the Maffezini tribunal distinguished between procedural requirements that could be modified by the MFN clause and “public policy considerations” that could not be overridden by the MFN clause.³⁷x Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000, para. 58. Also the tribunal in Hochtief v. Argentina insisted that procedural requirements could be modified by the MFN clause because they did not impact on the scope of that tribunal’s jurisdiction:

  the avoidance of the 18-month period in the Argentina-Germany BIT by reliance on the MFN clause would have no impact upon the scope of the jurisdiction of the Tribunal. It would not result in any case falling within its jurisdiction that could not eventually be brought before the Tribunal by the Claimant acting alone under Article 10 of the Argentina-Germany BIT³⁸x Hochtief AG v. The Argentine Republic, ICSID, Decision on Jurisdiction, Case No. ARB/07/31, 25 October 2011, para. 86.

  Such a notion has been roundly criticised by other tribunals.³⁹x ICS Inspection and Control Services Limited v. the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 262. In Wintershall v. Argentina the claimant contended that since both Argentina and Wintershall had already consented to International Centre for Settlement of Investment Disputes (ICSID) arbitration, the application of the MFN provisions did not involve issues of jurisdiction.⁴⁰x Wintershall Aktiengesellschaft v. Argentine Republic, ICSID, Award, Case No. ARB/04/14, 8 December 2008, para. 159.2. The tribunal rejected this argument, stating that:

  The eighteen months requirement of a proceeding before local courts is an essential preliminary step to the institution of ICSID arbitration: it constitutes an integral part of the standing offer, or consent, by the host state… [it] is fundamentally a jurisdictional clause, not a mere procedural provision. The requirement of such recourse can only be dispensed with by some legitimate extension of rights and benefits by means of the MFN clause. That is to say when the MFN clause itself permits the treaty interpreter to conclude that this was the clear intention of the parties⁴¹x Ibid., para. 160.2.

  The rejection by the Wintershall tribunal of the distinction between “public policy considerations” and mere procedural requirements finds further support in the ICJ’s jurisprudence on the interpretation of compromissory clauses in the context of interstate dispute settlement. Indeed, in the Armed Activities (DRC v. Rwanda) judgment the ICJ stated that “when consent is expressed in a compromissory clause in an international agreement, any conditions to which such consent is subject must be regarded as constituting the limits thereon”.⁴²x Armed Activities on the Territory of the Congo (New Application: 2002), (Democratic Republic of the Congo v. Rwanda), ICJ, Judgment of 3 February 2006, ICJ Reports 2006, at para. 88. This point is valid for what concerns the aforementioned BIT between Italy and Kazakhstan. In our case, the dispute settlement clause in the BIT at issue reads:

  1. In the event that such dispute cannot be settled amicably within six months of the date of the written application for settlement, the investor in question may submit at his choice the dispute for settlement to: a) the Contracting Party’s Court having territorial jurisdiction; b) an ad hoc Arbitration Tribunal, in compliance with the arbitration regulation of the UN Commission on the International Trade Law (UNCITRAL); and the host Contracting Party undertakes hereby to accept the reference to said arbitration. c) the International Centre for Settlement of Investment Disputes, for the implementation of the arbitration procedures under the Washington Convention of 18 March, 1965, on the settlement of investment disputes between States and nationals of other States, if or as soon as both the Contracting Parties have acceded to it.⁴³x Agreement between Italy and Kazakhstan for the Promotion and Protection of Investment (1996), Art. 9.

  The point is that nothing in the terms of this provision suggests that the procedural requirements contained therein (that is, the six months’ waiting period) should be given any less weight than the choice of forum for the settlement of disputes. On the contrary, giving a different weight to the terms contained in the same clause would run against the wording of that clause. Accordingly, such procedural requirements are an integral part of the consent given by contracting parties to international arbitration and confine the jurisdiction of an ICSID tribunal. This means that an MFN clause cannot remove the waiting periods unless it permits the treaty interpreter to conclude that such was the intention of the contracting parties.
  It is a clear postulate of international law that state consent to international arbitration cannot be lightly assumed: tribunals cannot create a system of compulsory jurisdiction that in the present stage of positive international law remains the exception.⁴⁴x Garanti Koza LLP v. Turkmenistan, ICSID, Dissenting Opinion of Laurence Boisson de Chazournes, Case No. ARB/11/20, 3 July 2013, para. 6, Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID, Decision on Annulment, Case No. ARB/97/3, 3 July 2002, para. 86. A fortiori, contracting states cannot be presumed to have agreed that the standing offer they negotiated be modified by incorporating dispute settlement provisions from other treaties negotiated in a different context.⁴⁵x Ibid. For instance, a clause reading “[the more favourable] treatment granted to the investors of such other parties will apply to investors of the relevant Contracting party also for the outstanding relationships” cannot be said to establish per se such a clear consent. The mere presence of the term “treatment” is arguably legally insufficient to conclude that the contracting parties to the Italy-Kazakhstan BIT intended the MFN provision to cover agreements to arbitrate in other treaties to which Kazakhstan is a contracting party.⁴⁶x Plama v. Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction of 8 February 2005, para. 193.
  Furthermore, the object and purpose alone of the BIT cannot justify an interpretation of the term “treatment” in MFN clauses that would change the dispute settlement mechanism negotiated by the parties of a BIT. Certainly, in Siemens v Argentina, the tribunal remarked that it was to be guided by the purpose of the Treaty as expressed in its title and preamble.⁴⁷x Siemens A.G. v. The Argentine Republic, ICSID, Decision on Jurisdiction, Case No. ARB/02/8, 3 August 2004, para. 81. That purpose was to “protect” and “promote” investments, and the tribunal gave considerable weightage to this fact when making a decision favourable to the investor.⁴⁸x Ibid. In this regard, the position expressed by the award in SGS v. Philippines is particularly telling. According to the majority:

  The object and purpose of the BIT supports an effective interpretation of Article X(2). The BIT is a treaty for the promotion and reciprocal protection of investments. According to the preamble it is intended “to create and maintain favourable conditions for investments by investors of one Contracting Party in the territory of the other”. It is legitimate to resolve uncertainties in its interpretation so as to favour the protection of covered investments.⁴⁹x SGS v. Philippines, ICSID, Decision on Objections to Jurisdiction, Case No. ARB/02/6, para. 116.

  Nevertheless, these tribunals have arguably placed undue emphasis on the treaty’s object and purpose in order to reach an outcome that ignored the treaty parties’ common intent. First of all, the object and purpose of investment treaties is not limited to the protection of investments alone: these treaties’ preamble contains references to environmental protection,⁵⁰x Energy Charter Treaty, Preamble. to economic cooperation between two countries,⁵¹x Agreement between the Government of the Italian Republic and the Government of the Republic of Kazakhstan on the Promotion and the Protection of Investment, Preamble. or even to human rights.⁵²x Agreement between the Government of the Republic of Finland and the Government of the People’s Democratic Republic of Algeria on the Reciprocal Promotion and Protection of Investments, Preamble. Given that these treaties establish no particular hierarchy between these different objectives, an interpretation that privileges one of such objectives while ignoring all the others would run counter to the requirement of taking into account the text of the whole treaty.
  This is confirmed by the various investment tribunals that have taken position against over-reliance on the treaty’s object and purpose to enlarge the scope of the protection guaranteed by an international investment treaty. Thus, the tribunal in Plama v. Bulgaria held that the object and purpose of the BIT at issue were legally insufficient to conclude that the contracting parties intended to cover by the MFN provision agreements to arbitrate in other treaties to which Bulgaria is a contracting party.⁵³x Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 193. More recently, the tribunal in Postova Banka v Greece took a similar stance concerning the definition of investment under the Greece-Slovakia BIT.⁵⁴x Postova Banka and Istrokapital S.E. v. the Hellenic Republic, ICSID, Award, Case No ARB/13/8, 9 April 2015, para. 310.

• 5 The Territoriality of the MFN Clause

  The majority of investment treaties articulate a territoriality requirement in their MFN clauses. For instance, the UK-Russia BIT reads in Article 3:

  Neither Contracting Party shall in its territory subject investments or returns of investors of the other Contracting Party to treatment less favourable than that which it accords to investments or returns of investors of any third State.⁵⁵x Agreement between the United Kingdom of Great Britain and Northern Ireland and the Government of the Union of Soviet Socialist Republics for the Promotion and Reciprocal Protection of Investments, Art. 3.

  According to the tribunal in Daimler v. Argentine Republic, such a formulation in MFN clauses is quite standard.⁵⁶x Daimler v. Argentina, ICSID, Award, Case, No. ARB/05/1, 22 August 2012, para. 226. That tribunal noted that, with the unique exception of Vladimir Berschader and Moise Bershcader v. The Russian Federation,⁵⁷x Ibid., in footnote 395. every MFN clause addressed in each of the publicly available investor-state awards that the Tribunal has been able to examine has contained a territorial reference.⁵⁸x Ibid., para. 225. There are, however, some notable exceptions: the Energy Charter Treaty and the Kazakhstan-Russia BIT contain MFN clauses that do not make any reference to “treatment” being accorded in a state’s “territory”.⁵⁹x Energy Charter Treaty, Art. 10(1); Agreement between the Government of the Russian Federation and the Government of the Republic of Kazakhstan on the Promotion and Mutual Protection of Investment, Art. 3. It is unclear whether such territoriality requirement would also apply when such a language is lacking. Referring to the Bershader case, the Daimler tribunal implied that an MFN clause remains territorial even without such specific language. According to it,

  … given that the words “in its territory” have been consistently included in nearly all other BITs’ MFN clauses, it seems at least likely that the BelgoLux-Soviet BIT’s reference to “the MFN clause” also implicitly incorporates this phrase.⁶⁰x Daimler v. Argentina, ICSID, Award, Case, No. ARB/05/1, 22 August 2012, footnote 395.

  However, this argument per se is insufficient. This is because state practice is actually not as uniform as the Daimler v. Argentina majority implies: as stated previously, there is an important minority of investment agreements, such as the Energy Charter Treaty or the Italy-Kazakhstan BIT, that do not contain any reference to territory.
  Arguably, a stronger argument for the territorial nature of MFN clauses can be grounded on the clause’s context as defined by Article 31(2) and (3) of the Vienna Convention on the Law of Treaties (VCLT). Indeed, the requirement of territoriality runs through these investment treaties: this may be illustrated by Kazakhstan’s treaty practice. For instance, Article 1(2) of the Austria-Kazakhstan investment treaty defines an investment as “every kind of assets in the territory of one Party”.⁶¹x Agreement for the Promotion and Reciprocal Protection of Investment between the Government of the Republic of Austria and the Government of the Republic of Kazakhstan, Art. 1(2). Article 2 of the same treaty, on the promotion and admission of investment, contains a requirement of observance of the law of the party “in whose territory the investments were made”.⁶²x Idem, Art. 2. Similarly, in the investment treaty between Kazakhstan and France, each party accords fair and equitable treatment to investments made “sur son territoire et dans sa zone maritime”.⁶³x Accord entre le Gouvernement de la République Française et le Gouvernement de la République du Kazakhstan sur l’Encouragement et la Promotion Réciproque des Investissements, Art. 3. Articles 1(2) and 2(3) of the Italy-Kazakhstan BIT, respectively, on the definition of investment and on fair and equitable treatment, are also premised on the notion of “territory”.⁶⁴x Agreement between Italy and Kazakhstan for the Promotion and Protection of Investment (1996), Arts. 1,2. This context is bound to inform the interpretation of a clause located in the same treaty: provisions on issues such as the definition and access of investment, which underlie the protection afforded by the MFN clause, link the BIT’s scope to territory. Equally, a fair and equitable treatment clause grounded on territory is relevant in interpreting an MFN clause in the same treaty because its object may overlap with the MFN treatment; issues such as access to courts and denial of justice are covered by both provisions.
  Besides, Article 31(3)(c) of the VCLT states that, together with the context, treaty interpretation should take into account “any relevant rules of international law applicable in the relations between the parties”.⁶⁵x Vienna Convention on the Lew of Treaties, Art. 31(3)(c). This includes norms of customary international law.⁶⁶x Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID, Award, Case No. ARB/10/7, 8 July 2016, para. 290. Usually, the extent of a state’s obligation is related to the notion of jurisdiction: that is, a state is bound to respect its international legal obligations where it exercises jurisdiction or control. This is implicitly admitted by the Impregilo v. Argentina tribunal, which held that access to international dispute settlement was a matter over which Argentina “had the power to decide”.⁶⁷x Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011, para. 100. Under customary international law, this control is essentially territorial.⁶⁸x Investment jurisprudence has frequently referred to the ECHR’s case law. See, for example, Tecmed, S.A. v. United Mexican States, ICSID, Award, Case No. ARB(AF)/00/2, 29 May 2003, para. 122; Azurix Corp. v. The Argentine Republic, ICSID, Award, Case No. ARB/01/2, 14 July 2006, para. 311; Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID, Award, Case No. ARB/10/7, 8 July 2016, para. 295. For example, according to the European Court of Human Rights,⁶⁹x See, for example, Al Skeini and Others v. UK, Council of Europe, European Court of Human Rights, Application no. 55721/07, Judgment of 7 July 2011, Issa and Others v. Turkey, Council of Europe, European Court of Human Rights Application no. 31821/96, Judgment of 16 November 2994, Bankovic and Others v. Belgium and Others, Council of Europe, European Court of Human Rights, Application no. 52207/99, Judgment of the Grand Chamber, 12 December 2001. the bases of state jurisdiction are generally defined and limited by the sovereign territorial rights of the other relevant states.⁷⁰x Bankovic and Others v. Belgium and Others, Council of Europe, European Court of Human Rights, Application no. 52207/99, Judgment of the Grand Chamber, 12 December 2001, para. 59. The Strasbourg court argued that this is proved by the fact that a state’s competence to exercise jurisdiction over its own nationals abroad is subordinate to the territorial competence of that state and other states (that is, it ends where another state’s competence begins).⁷¹x Ibid., para. 60. The primarily territorial nature of jurisdiction under customary international law has not been questioned by successive decisions,⁷²x See, for example, Hirsi Jamaa and Others v. Italy, Council of Europe, European Court of Human Rights, Application no. 27765/09, Judgment of the Grand Chamber, 23 February 2012, para. 70. which have at most expanded this notion so as to include “full and exclusive control” over a person.⁷³x Al Skeini v. UK, Council of Europe, European Court of Human Rights, Application no. 55721/07, Judgment of 7 July 2011, para. 136.
  Thus, the MFN clause is premised on treatment being accorded within a state’s territory. Arguably, this is the case even when the clause’s wording does not explicitly mention “territory”. The question remains as to which effect should be given to the provision’s territorial nature: would it exclude the applicability of the MFN clause to dispute settlement provisions? Where an MFN clause applies only to treatment in the territory of the host state, the logical corollary is that treatment outside the territory of the host state does not fall within the scope of the clause.⁷⁴x Daimler Financial Services AG v. Argentine Republic, ICSID, Award, Case No. ARB/05/1, 22 August 2012, para. 226. Investment awards have been discordant on the question of whether dispute settlement clauses constitute treatment within the respondent state’s territory.
  Certain tribunals have simply ignored this issue: the question of territoriality was not addressed either in Maffezini v. Spain or in RosInvest v. Russia, in spite of the inclusion of the term “territory” in the relevant MFN clauses.⁷⁵x Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000.^,76x RosInvest v. Russian Federation, SCC, Award on Jurisdiction, Case no V 079/2005, October 2007. Also, the tribunal in Impregilo v. Argentina did not give any weight to the presence of the term “in its territory” in the BIT at issue, stating that “the question as to what legal protection Argentina shall give to foreign investors is in no way an issue over which Argentina has no power to decide, nor is it tied to any particular territory”.⁷⁷x Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011, para. 100. However, such reasoning overlooks the plain wording of the treaty. In this regard, the tribunal in ICS v. Argentina stated:

  … the very concept of extra-territorial dispute resolution and a host State’s consent thereto are both ill-fitted to the clear and ordinary meaning of the words “treatment in its territory” as used in the Treaty’s MFN clause. It is difficult to see how an MFN clause containing this phrase could be applied to international arbitration proceedings without discounting the explicit territorial limitation upon the scope of the clause⁷⁸x ICS Inspection and Control Services Limited v. the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 309.

  In addition, the tribunal in Daimler v. Argentina considered decisive the fact that international arbitration usually takes place outside the territory of the host state and proceeds independently of any state control and determined that the host state’s obligation extended no further than providing MFN treatment in respect of domestic proceedings.⁷⁹x Ibid.
  The nature of international investment arbitration provides an additional argument in favour of such an interpretation. The elaboration of BITs was a defensive reaction to a trend of expropriations carried out by various developing states without the payment of fair market value compensation.⁸⁰x Sornarajah 2010, p. 22. The raison d’être of investment treaty arbitration is to provide foreign investors with an assurance that investment contracts and arrangements made with host country governments would not be subject to unilateral change at some later time,⁸¹x Vandevelde 2005, p. 170. thus protecting them from the risk that host states would abuse their sovereign powers. It does so by placing foreign investment firmly within the field of international law, outside of the host state’s exclusive control and subject to third-party dispute settlement. It is precisely for that purpose that the investor is generally not required any more to exhaust domestic remedies before invoking international legal protection.⁸²x Brauch 2012, p. 7. This hypothesis is supported by the wording of the Preamble to the ICSID Convention, which presents international methods of dispute settlement as an alternative to national legal processes.⁸³x ICSID Convention, Preamble: “Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases.” Also, the Report of the Executive Directors, which accompanies the ICSID Convention and has been used several times by arbitral tribunals to interpret that treaty, describes investment arbitration as a substitute for national judicial procedures. According to its tenth paragraph:

  The Executive Directors recognize that investment disputes areas a rule settled through administrative, judicial or arbitral procedures available under the laws of the country in which the investment concerned is made. However, experience shows that disputes may arise which the parties wish to settle by other methods; and investment agreements entered into in recent years show that both States and investors frequently consider that it is in their mutual interest to agree to resort to international methods of settlement.⁸⁴x Société Ouest Africaine des Bétons Industriels v. Senegal, ICSID, Dissenting Opinion of Kéba Mbaye, Case No. ARB/82/1, 25 February 1988, para. 4.

  These elements indicate that the investment treaty dispute settlement regime was conceived as a substitute for national courts in order to shield the foreign investor from abuse by a host state of its regulatory powers. The extension of the MFN clause to investment treaty arbitration would be inconsistent with this essential characteristic.

• 6 Conclusion

  By taking an unprecedented decision, the Maffezini award paved the way for increasingly audacious interpretations of MFN clauses. Consequently, dispute settlement in investment treaties runs the risk of becoming à la carte, with investors being granted a sui generis dispute settlement mechanism contemplated by neither the basic treaty nor the third-party treaty.⁸⁵x Impregilo S.p.A v. Argentine Republic, ICSID, Concurring and Dissenting Opinion of Brigitte Stern, Case No ARB/0717, 21 June 2011, para. 12. While not explicitly contesting the necessity for state consent in international dispute settlement, the Maffezini tribunal and its successors have broken it down into a variety of components, some of which could be overcome by invoking the MFN clause and others which could not. In this way, they have established a de facto hierarchy between different provisions within dispute settlement clauses.
  Yet the wording of compromissory clauses in investment treaties does not establish any particular hierarchy between the various conditions attached to state consent. Thus, no intent to change the terms of state consent can be derived from a mere reference to “treatment” and “all matters” by an MFN clause. Accordingly, an investor cannot rely on the MFN clause contained in the relevant BIT in order to avoid the conditions attached by a state to its standing offer of international arbitration. In addition, as MFN clauses encompass treatment accorded within a contracting party’s territory, international arbitration lies outside of the “treatment” covered by those provisions.

References

• Brauch M (2017) Exhaustion of Local Remedies in International Investment Law IISD Best Practices Series – January 2017. http://www.iisd.org/sites/default/files/publications/best-practices-exhaustion-local-remedies-law-investment-en.pdf. Accessed 8 March 2012.

• Dolzer C and Schreuer C (2008) Principles of International Investment Law. Oxford University Press, Oxford.

• Douglas Z (2011) The MFN Clause in Investment Arbitration: Treaty Interpretation Off the Rails. Journal of International Dispute Settlement, 2(1):97-113.

• Pellet A (1989) The Normative Dilemma: Will and Consent in International Law-Making. The Australian Year Book of International Law, 12:22-53.

• Sornarajah M (2010) The International Law on Foreign Investment. Cambridge University Press, Cambridge.

• Vandevelde K (2005) A Brief History of International Investment Agreements. U.C. Davis Journal of International Law & Policy, 12(1):157-194.

Noten

• 1 Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 221.

• 2 Garanti Koza LLP v. Turkmenistan, ICSID, Dissenting Opinion of Laurence Boisson de Chazournes, Case No. ARB/11/20, 3 July 2013, para. 40.

• 3 Dolzer and Schreuer 2008, p. 232.

• 4 Agreement on Encouragement and Reciprocal Protection of Investments between the Republic of Kazakhstan and the Kingdom of the Netherlands, Art. 12.

• 5 Agreement between Italy and Kazakhstan for the Promotion and Protection of Investment (1996), Art. 9.

• 6 Ibid., Art. 3.

• 7 Abaclat and Others v. the Argentine Republic, ICSID, Dissenting Opinion of Georges Abi-Saab, Case No. ARB/07/5, para. 7.

• 8 S.S. Lotus (France. v. Turkey.), PCIJ, Judgment of 7 September 1927, para. 44.

• 9 Pellet 1989, p. 22.

• 10 Dolzer and Schreuer 2008, p. 86.

• 11 Plama v. Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction of 8 February 2005, para. 36.

• 12 Anglo-Iranian Oil Co. case (United Kingdom v. Iran) ICJ, Judgment of 22 July 1952, p. 20.

• 13 Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000, para. 39.

• 14 Ibid., para. 56.

• 15 Douglas 2011, p. 98.

• 16 Dolzer and Schreuer, 2008, p. 86.

• 17 Ibid.

• 18 Wintershall Aktiengesellschaft v. Argentine Republic, ICSID, Award, Case No. ARB/04/14, 8 December 2008, para. 159.2.

• 19 ICS Inspection and Control Services Limited v the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 32.

• 20 Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011.

• 21 Garanti Koza LLP v. Turkmenistan, ICSID, Decision on the Objections for Lack of Consent, Case No. ARB/11/20, 3 July 2013, para. 91.

• 22 Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011, para. 101.

• 23 Impregilo S.p.A v. Argentine Republic, ICSID, Concurring and Dissenting Opinion of Brigitte Stern, Case No ARB/0717, 21 June 2011, para. 11.

• 24 ICS Inspection and Control Services Limited v. the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 323.

• 25 Acuerdo para la Promocion у la Proteccion Reciproca de Inversiones entre el Reyno de Espana у la Republica Argentina, Art. IV. 2.

• 26 Ambatielos Case (Greece v. United Kingdom), I.C.J., Application Instituting Proceedings, p. 10.

• 27 Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 215.

• 28 Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000, para. 49.

• 29 Ibid., para. 54.

• 30 Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 215.

• 31 Armed Activities on the Territory of the Congo (New Application: 2002), (Democratic Republic of the Congo v. Rwanda), ICJ, Judgment of 3 February 2006, ICJ Reports 2006, para. 88.

• 32 Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 198.

• 33 Hochtief AG v. The Argentine Republic, ICSID, Decision on Jurisdiction, Case No. ARB/07/31, 25 October 2011, para. 62.

• 34 Impregilo S.p.A v. Argentine Republic, ICSID Case No ARB/0717, B.Stern, Concurring and Dissenting Opinion, para. 45.

• 35 Kiliç Ĭnşaat Ĭthalat Ĭhracat Sanayi Ve Ticaret Anonim Şirketi v. Turkmenistan, ICSID, Award, Case No. ARB/10/1, 2 July 2013, para. 7.3.9.

• 36 ICS Inspection and Control Services Limited v the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 278.

• 37 Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000, para. 58.

• 38 Hochtief AG v. The Argentine Republic, ICSID, Decision on Jurisdiction, Case No. ARB/07/31, 25 October 2011, para. 86.

• 39 ICS Inspection and Control Services Limited v. the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 262.

• 40 Wintershall Aktiengesellschaft v. Argentine Republic, ICSID, Award, Case No. ARB/04/14, 8 December 2008, para. 159.2.

• 41 Ibid., para. 160.2.

• 42 Armed Activities on the Territory of the Congo (New Application: 2002), (Democratic Republic of the Congo v. Rwanda), ICJ, Judgment of 3 February 2006, ICJ Reports 2006, at para. 88.

• 43 Agreement between Italy and Kazakhstan for the Promotion and Protection of Investment (1996), Art. 9.

• 44 Garanti Koza LLP v. Turkmenistan, ICSID, Dissenting Opinion of Laurence Boisson de Chazournes, Case No. ARB/11/20, 3 July 2013, para. 6, Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID, Decision on Annulment, Case No. ARB/97/3, 3 July 2002, para. 86.

• 45 Ibid.

• 46 Plama v. Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction of 8 February 2005, para. 193.

• 47 Siemens A.G. v. The Argentine Republic, ICSID, Decision on Jurisdiction, Case No. ARB/02/8, 3 August 2004, para. 81.

• 48 Ibid.

• 49 SGS v. Philippines, ICSID, Decision on Objections to Jurisdiction, Case No. ARB/02/6, para. 116.

• 50 Energy Charter Treaty, Preamble.

• 51 Agreement between the Government of the Italian Republic and the Government of the Republic of Kazakhstan on the Promotion and the Protection of Investment, Preamble.

• 52 Agreement between the Government of the Republic of Finland and the Government of the People’s Democratic Republic of Algeria on the Reciprocal Promotion and Protection of Investments, Preamble.

• 53 Plama v. Bulgaria, ICSID, Decision on Jurisdiction, Case No. ARB/03/24, 8 February 2005, para. 193.

• 54 Postova Banka and Istrokapital S.E. v. the Hellenic Republic, ICSID, Award, Case No ARB/13/8, 9 April 2015, para. 310.

• 55 Agreement between the United Kingdom of Great Britain and Northern Ireland and the Government of the Union of Soviet Socialist Republics for the Promotion and Reciprocal Protection of Investments, Art. 3.

• 56 Daimler v. Argentina, ICSID, Award, Case, No. ARB/05/1, 22 August 2012, para. 226.

• 57 Ibid., in footnote 395.

• 58 Ibid., para. 225.

• 59 Energy Charter Treaty, Art. 10(1); Agreement between the Government of the Russian Federation and the Government of the Republic of Kazakhstan on the Promotion and Mutual Protection of Investment, Art. 3.

• 60 Daimler v. Argentina, ICSID, Award, Case, No. ARB/05/1, 22 August 2012, footnote 395.

• 61 Agreement for the Promotion and Reciprocal Protection of Investment between the Government of the Republic of Austria and the Government of the Republic of Kazakhstan, Art. 1(2).

• 62 Idem, Art. 2.

• 63 Accord entre le Gouvernement de la République Française et le Gouvernement de la République du Kazakhstan sur l’Encouragement et la Promotion Réciproque des Investissements, Art. 3.

• 64 Agreement between Italy and Kazakhstan for the Promotion and Protection of Investment (1996), Arts. 1,2.

• 65 Vienna Convention on the Lew of Treaties, Art. 31(3)(c).

• 66 Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID, Award, Case No. ARB/10/7, 8 July 2016, para. 290.

• 67 Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011, para. 100.

• 68 Investment jurisprudence has frequently referred to the ECHR’s case law. See, for example, Tecmed, S.A. v. United Mexican States, ICSID, Award, Case No. ARB(AF)/00/2, 29 May 2003, para. 122; Azurix Corp. v. The Argentine Republic, ICSID, Award, Case No. ARB/01/2, 14 July 2006, para. 311; Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID, Award, Case No. ARB/10/7, 8 July 2016, para. 295.

• 69 See, for example, Al Skeini and Others v. UK, Council of Europe, European Court of Human Rights, Application no. 55721/07, Judgment of 7 July 2011, Issa and Others v. Turkey, Council of Europe, European Court of Human Rights Application no. 31821/96, Judgment of 16 November 2994, Bankovic and Others v. Belgium and Others, Council of Europe, European Court of Human Rights, Application no. 52207/99, Judgment of the Grand Chamber, 12 December 2001.

• 70 Bankovic and Others v. Belgium and Others, Council of Europe, European Court of Human Rights, Application no. 52207/99, Judgment of the Grand Chamber, 12 December 2001, para. 59.

• 71 Ibid., para. 60.

• 72 See, for example, Hirsi Jamaa and Others v. Italy, Council of Europe, European Court of Human Rights, Application no. 27765/09, Judgment of the Grand Chamber, 23 February 2012, para. 70.

• 73 Al Skeini v. UK, Council of Europe, European Court of Human Rights, Application no. 55721/07, Judgment of 7 July 2011, para. 136.

• 74 Daimler Financial Services AG v. Argentine Republic, ICSID, Award, Case No. ARB/05/1, 22 August 2012, para. 226.

• 75 Maffezini v. Spain, ICSID, Decision on Jurisdiction, Case No. ARB/97/7, January 2000.

• 76 RosInvest v. Russian Federation, SCC, Award on Jurisdiction, Case no V 079/2005, October 2007.

• 77 Impregilo v. Argentina, ICSID, Award, Case No. ARB/07/17, 21 June 2011, para. 100.

• 78 ICS Inspection and Control Services Limited v. the Argentine Republic, PCA, Award on Jurisdiction, Case No 2010-9, 10 February 2012, para. 309.

• 79 Ibid.

• 80 Sornarajah 2010, p. 22.

• 81 Vandevelde 2005, p. 170.

• 82 Brauch 2012, p. 7.

• 83 ICSID Convention, Preamble: “Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases.”

• 84 Société Ouest Africaine des Bétons Industriels v. Senegal, ICSID, Dissenting Opinion of Kéba Mbaye, Case No. ARB/82/1, 25 February 1988, para. 4.

• 85 Impregilo S.p.A v. Argentine Republic, ICSID, Concurring and Dissenting Opinion of Brigitte Stern, Case No ARB/0717, 21 June 2011, para. 12.