Investor Presentaiton
168
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
"Article 7(2)
Each Contracting State shall observe any other obligation it
has assumed with regard to investments in its territory by
investors of the other Contracting State, with disputes arising
from such obligations being redressed under the terms of the
contracts underlying the obligations in accordance with
Article 10 (5). (Emphasis added)
[...]
Article 10(5)
If a contract between an investor and a Contracting State
provides a dispute resolution mechanism, the investor can
invoke only that dispute resolution mechanism concerning
the issues arising under that contract. However, in case of
issues arising under this Agreement including Article 7(2), he
is entitled to utilize the dispute settlement procedures
provided under this Article." (Emphasis added).
These provisions attempt to allocate jurisdiction between
tribunals established under the IIA and other courts and tribunals.
They draw a distinction between the disputes involving a violation
of the contract (which are to be settled in accordance with the
contractual dispute settlement procedures, whatever they may be),
and disputes involving an alleged violation of the BIT obligations
(such as FET, expropriation, etc.) that may arise from a contract
breach. This latter category of disputes can be settled pursuant to the
BIT's provisions on ISDS.
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207
The language of Article 10(5) is somewhat confusing because the words
"issues arising under this Agreement including Article 7(2)" may be read
to suggest that Article 7(2) disputes themselves (about a State's non-
compliance with obligations assumed with regard to investments) can be
UNCTAD Series on International Investment Agreements IIView entire presentation