Non-Investment Obligations in Investment Treaty Arbitration – Towards a Greater Role for States?

Abstract

This paper discusses different techniques that could be applied by investment arbitral tribunals for the purpose of considering the obligations of the host State other than those arising under international investment agreements. It argues that current practice has shown that there is more than one avenue for tribunals to take account of such obligations in deciding investor-State disputes. In the last resort, this can be done through the process of treaty interpretation, which provides tribunals with a sufficient degree of flexibility, without necessary exceeding their jurisdictional limits. However, law cannot resolve in an abstract way normative conflicts that may arise between different sub-fields of international law. The regulation of the interaction between investment law and other subfields of international law requires primarily a policy response. States should therefore take a more active role and provide, primarily through amendments of their investment agreements, better guidance to tribunals on how to balance between the acts that may reasonably be found to constitute interference with investor’s rights, and acts that are falling within the State’s legitimate right to regulate.

Keywords: investment treaty arbitration, non-investment obligations, investment treaty interpretation, regime interactions

JEL Classification: K33