How to Kill a BIT and Not Die Trying: Legal and Political Challenges of Denouncing or Renegotiating Bilateral Investment Treaties

26 Pages Posted: 10 Jul 2012

See all articles by Federico Lavopa

Federico Lavopa

University of San Andres (UMSA)

Lucas E. Barreiros

University of Buenos Aires (UBA) - Faculty of Law

María Bruno

University of Buenos Aires (UBA) - Faculty of Law

Date Written: July 9, 2012

Abstract

The backlash against the expansive interpretation of key disciplines of international investment law by arbitral tribunals has prompted a host of strategies, implemented mostly by developing countries, aimed at walking away from the system. These range from denouncing the ICSID Convention and withdrawing consent to the exercise of jurisdiction by other arbitral bodies to denouncing the Bilateral Investment Treaties (BITs) to which they are parties. The purported objective of these initiatives is to reduce the legal exposure of these countries to international claims before arbitral tribunals, either by depriving foreign investors of a forum in which to pursue their claims or by completely extinguishing their rights under the treaties. The present paper focuses on these strategies and argues that none of them produce the desired results, at least in the short term. It notes that BITs include self-defense mechanisms – particularly, most favored nation (MFN) obligations, tacit renewal and “survival clauses” – that either delay or turn impossible the realization of these exit strategies. Against this backdrop, the paper proposes that developing States may be better off by implementing a strategy of renegotiation of their BITs.

Keywords: Bilateral Investment Treaties, BITs, Arbitration, ICSID convention, Foreign investment, Self-defense mechanisms, MFN, Tacit renewal, Survival clauses, renegotiation

JEL Classification: F02, F10, F20, F30, F40

Suggested Citation

Lavopa, Federico and Barreiros, Lucas E. and Bruno, María, How to Kill a BIT and Not Die Trying: Legal and Political Challenges of Denouncing or Renegotiating Bilateral Investment Treaties (July 9, 2012). Society of International Economic Law (SIEL), 3rd Biennial Global Conference. Available at SSRN: https://ssrn.com/abstract=2102683 or http://dx.doi.org/10.2139/ssrn.2102683

Federico Lavopa (Contact Author)

University of San Andres (UMSA) ( email )

Vita Dumas 284
(1644) Victoria, Pcia
Buenos Aires, Buenos Aires 1644
Argentina

Lucas E. Barreiros

University of Buenos Aires (UBA) - Faculty of Law ( email )

Av. Figueroa Alcorta 2263
C1425CKB
Argentina
+5411 48095698 (Phone)

María Bruno

University of Buenos Aires (UBA) - Faculty of Law ( email )

Av. Figueroa Alcorta 2263
C1425CKB
Argentina

Register to save articles to
your library

Register

Paper statistics

Downloads
748
Abstract Views
3,276
rank
32,626
PlumX Metrics