Investment Arbitration

Mixed arbitration

Arbitration involving both a state and a non-state actor, where only one party is a state (e.g. Iran-US Claims Tribunal, investment arbitration).

Diplomatic protection

A mechanism where a foreign investor's home state acts on the investor's behalf against the host state

Host state

The state in which a foreign investment was made

Investment treaty arbitration

Arbitration based on a treaty signed between states that grants foreign investors the right to arbitrate directly against a host state, creating disconnected consent.

Disconnected consent

A feature of investment treaty arbitration where the state's consent is embedded in the treaty, and the investor provides consent later when filing a claim.

Cooling off period

A mandatory pre-arbitration phase requiring parties to attempt settlement through negotiations before proceeding to formal arbitration.

ICSID

International Centre for Settlement of Investment Disputes. Created in 1965 by the Washington Convention as part of the World Bank Group to facilitate foreign investment via neutral arbitration.

Washington Convention

The 1965 treaty that created ICSID, aimed at facilitating economic development through promotion and protection of foreign investment.

ICSID Administrative Council

ICSID's governing body composed of one representative from each contracting party, chaired by the chairman who may appoint arbitrators if parties fail to do so.

Double barrel test

Requirement in ICSID arbitration that a claimant must meet the definitions of both "investor" and "investment" as defined in the relevant treaty.

Salini criteria

A set of criteria used to determine what qualifies as an "investment" under ICSID jurisdiction.

ICSID annulment (Art. 52)

A mechanism allowing any party to request annulment of an ICSID award, decided by an ad hoc committee of arbitrators appointed by the ICSID chairman.

New York Convention (1958)

Convention governing enforcement of arbitral awards in non-ICSID arbitrations

Fair and equitable treatment (FET)

A core investor right under investment treaties requiring the host state to treat foreign investors fairly and without arbitrary or discriminatory measures.

Expropriation

A taking of investor property by a host state. Direct expropriation is less common today

Indirect expropriation

Host state measures that do not formally seize property but have an equivalent economic effect

Contract claims vs. treaty claims

Contract claims arise from a breach of the investment contract and go to the forum specified by the contract

Concession contract arbitration

Early form of investment arbitration embedded in contracts between investors and host states, aimed at depoliticizing dispute settlement.

UNCITRAL

UN Commission on International Trade Law

Mauritius Convention

A 2014 convention allowing the UNCITRAL Transparency Rules to apply retroactively to treaties signed before 2014 if both parties consent.

UNCITRAL Transparency Rules

Rules adopted in 2014 requiring publication of documents, public hearings, and acceptance of amicus curiae briefs in treaty-based investment arbitrations.

Amicus curiae brief

A submission by a "friend of the court" (e.g. NGOs) providing relevant arguments in a case

PCA

Permanent Court of Arbitration

Ad hoc arbitration

Arbitration not administered by an institution, often conducted under UNCITRAL rules

National legislation-based arbitration

Arbitration consent derived from a host state's domestic law granting foreign investors access to arbitration (accounts for ~9% of ICSID cases).

Legal basis of consent

Investment arbitration consent can be based on an investment contract, an investment treaty, or national legislation providing access to arbitration.

ICSID jurisdiction conditions

Dispute must arise directly out of an investment, be between nationals of different contracting states, and both parties must have submitted written consent to ICSID.

Investor (natural person)

Defined by nationality in investment treaties

Investor (legal person)

A company of a contracting state party or a company controlled by nationals of a contracting state

Ex aequo et bono

Latin for "according to what is fair and good"

Expropriation conditions (Argentina-Netherlands BIT)

Expropriation is permissible only if: in the public interest, non-discriminatory, not contrary to any other agreement, and accompanied by compensation.

Argentina-Netherlands BIT dispute resolution

If no peaceful settlement within 3 months, domestic courts are tried

ICSID vs. UNCITRAL transparency

UNCITRAL defaults to full publication and public hearings

ICSID enforcement of awards

ICSID awards are recognized and enforceable in all member states automatically

ICSID secretariat

Administrative body headed by the Secretary-General

ICSID panel of arbitrators

Each member state may designate up to 4 individuals to the ICSID panel

ICSID reservations

ICSID does not permit reservations to the convention

Exhaustion of local remedies

A precondition sometimes required before international arbitration, where the investor must first pursue remedies through the host state's domestic legal system.

74/17/9 rule (ICSID caseload)

Approximately 74% of ICSID arbitrations are treaty-based, 17% contract-based, and 9% based on national legislation.

Protection against arbitrary treatment

An investor right under investment treaties prohibiting the host state from taking arbitrary, unreasonable, or discriminatory measures against the investment.