80 Pages Posted: 27 May 2013 Last revised: 1 Jun 2013
Date Written: May 24, 2013
This article develops the process of jurisdictional proof in investor-state arbitrations. Investor-state arbitration is the only international forum in which capital exporters can pursue claims against host states for violations of the host state’s international legal obligations. Arbitral tribunals are not courts of general jurisdiction; they are limited by the specific arbitral consent given by the state. Jurisdiction therefore is the central battleground of investor-state arbitrations and the appropriate focus of scholarship. But as this article will demonstrate, existing scholarship fundamentally ignores the importance of the process of jurisdictional decision making, i.e., jurisdictional proof, focusing instead on the stated legal rationale on the face of the decisions examined. This failure to focus on jurisdictional proof has significant practical and theoretical consequences. As this article will show, tribunals must compare the force of jurisdictional arguments actually advanced in a dispute to each other. Appropriate jurisdictional analysis is premised upon an even-handed balancing test rather than by the development and application of formal rules. By focusing solely on the stated legal rationale supporting a jurisdictional decision, scholarship has incorrectly attempted to discover formal legal rules driving the decision rather than understanding the manner of balancing the relevant competing interests. This theoretical reconception not only offers important insights for the ongoing scholarly dialogue on jurisdiction, but can be applied to offer practical redress to a central failing in recent investor-state jurisdictional decisions denying jurisdiction over multi-billion dollar claims. These decisions denied jurisdiction because investors supposedly failed to carry a burden by clear and convincing evidence that formal legal rules had been satisfied. Such failure immediately implicates the set aside of these decisions in question either under applicable mechanism provided in a multilateral treaty such as the World Bank’s ICSID Convention or upon motion to the courts at the place of arbitration such as occurred recently in BG Group v. Republic of Argentina, 665 F.3d 1363 (D.C. Cir. 2012).
Keywords: international law, international arbitration, international investment law, set aside of arbitral awards, annulment
Suggested Citation: Suggested Citation
Sourgens, Frederic G., By Equal Contest of Arms, Jurisdictional Proof in Investor-State Arbitrations (May 24, 2013). North Carolina Journal of International Law and Commercial Regulation, Vol. 38, No. 4, 2013. Available at SSRN: https://ssrn.com/abstract=2269987