Investor Presentaiton
130
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
choose a law to govern their relations. The same principle of party
autonomy manifests itself in contracts concluded between investors
and host States. Such contracts may designate the law of the host
State, of the investor's home State, or of a third State, as the
governing law. The provision also contains a default choice-of-law
regime that applies in the absence of a special agreement between
the parties (domestic law of the host State, the treaty and applicable
rules of international law), which is helpful in situations where there
is no underlying contract between the investor and the host State.
(iv) No provision on applicable law
Some IIAs are silent regarding the applicable law in ISDS cases.
In this situation, the applicable arbitration rules will provide a
default solution. For instance, Article 42(1) of the ICSID
Convention provides that:
"The tribunal shall decide a dispute in accordance with such
rules of law as may be agreed by the parties. In the absence of
such agreement, the Tribunal shall apply the law of the
Contracting State party to the dispute (including its rules on
the conflict of laws) and such rules of international law as
may be applicable."
The ICSID Convention thus gives primacy to the domestic law
of the host State unless the parties otherwise agree. This is typically
the case in investment arbitration, where the investment treaty
(including its applicable-law clause, if any) represents the law
agreed to by the parties.
The UNCITRAL Rules provide that in the absence of agreement
between the parties, the tribunal shall apply the law "which it
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