Author: Iliya Rachkov
Keywords: admissibility of claims; foreign investments; foreign investors; host states; international investment law; questions of local significance
The specificity of the international investment law (IIL) is that it is not based on a single source in which the norms which constitute its nucleus would be codified and progressively developed. This is true for both substantive and procedural parts of the IIL. There exists no international organiza- tion or body to settle investment disputes that would facilitate a uniform application and interpretation of IIL rules. Therefore, it is difficult (or even impossible) to predict how an arbitration tribunal would decide the one or the other dispute between a foreign investor and the host state. This en- tails a legal uncertainty which impedes the IIL to perform the main function of the law – to create certainty and predictability in the relations the law regulates. The analysis of the awards rendered by arbitration tribunals allows forecasting to some extent. Besides, it could reveal the systemic prob- lems of IIL and international investment arbitration with the view to cure them. The respondent States that host foreign investment use all available ways and means in order to prevent the arbitration tribunals from considering the disputes on the merits. For this purpose, the respondents primarily challenge the jurisdiction of those tribunals and the admissibility of claims. The result of this strategy is the following: according to UNCTAD’s statistics, as of January 2019, in 70 % of all known cases (456 out of 647) the respondent State cannot complain that the arbitration tribunals handed down awards against them. It is precisely at the first stage of the dispute resolution by arbitration (questions of jurisdiction and admissibility) when the prospects that the dispute will be decided in favor of the respondent State are higher. States are perfectly aware of that; that is why they raise objections against the jurisdiction of arbitration tribunals and/or admissibility of claims. In such cases, arbitration tribunals bifurcate the claim, i. e. they consider first those objections against jurisdiction and admissibility. Only in case these questions are answered in the affirmative, i. e. the arbi- tration tribunal accepted the jurisdiction and concluded that the claims are admissible, the tribunals proceed to consider the dispute on its merits. The author examines the specific examples of how States seek to shield themselves against the claims brought forward by foreign investors through challenging the jurisdiction of the arbitration tribunals and/or admissibility of claims through the notions of foreign investor and foreign investment; lawfulness of foreign investment as a precondition for admissibility; scope of the jurisdiction and other notions.
About the author: Ilia Rachkov – Candidate of Sciences (Ph.D.) in Law, Adjunct Professor, Moscow State Institute (University) of International Relations, Moscow, Russia.
Citation: Rachkov I. (2019) Obzor resheniy mezhdunarodnykh investitsionnykh arbitrazhey za 2017–2018 gody: voprosy kompetentsii (yurisdiktsii) i priemle- mosti iska [Overview of the awards rendered by international arbitration tribunals in 2017–2018: the questions of jurisdiction and admissibility of claims]. Mezhdunarodnoe pravosudie, vol. 9, no. 4, pp. 111–132. (In Russian).