Investor Presentaiton
35
2. Conditions upon which State consent is granted
An IIA may make a State's consent subject to certain
conditions. Some treaties require that an investor (i) seek relief in
one forum only (usually via a "fork-in-the-road" provision);23 (ii)
seek relief in only one forum at a time (i.e., it must waive the right
to pursue domestic litigation once it has started an international
arbitration); 24 or (iii) pursue local remedies before arbitration.
Failure to comply with these conditions may foreclose the investor's
ability to obtain relief in international arbitral proceedings.
25
The 2012 United States Model BIT, for example, provides:
"Each Party consents to the submission of a claim to arbitration
under this Section in accordance with this Treaty." (Article 25(1),
emphasis added.) This language is found in many BITS and FTAs
concluded by the United States and has been the basis for
arguments, sometimes successful, that the treaty's procedural
requirements must be satisfied in order for a tribunal to have
jurisdiction. For example, in Railroad Development Corporation v.
Guatemala, brought under the DR-CAFTA, the claimant's waivers
of its right to initiate or continue arbitration in other forums were
deficient, and the tribunal held that these deficiencies precluded the
perfection of the consent to arbitration. In other cases, however,
particularly when deficiencies could be easily remedied, tribunals
have been less strict about requiring precise compliance with the
conditions States have imposed on their consent to arbitration. In
many early NAFTA cases, for example, the respondent States
argued to no avail that the claimants had failed to seek an amicable
settlement, that the time periods governing the submission of the
26
23
See section II.E.3.ii.
24
See ibid.
25
See section II.E.3.i.
26
RDC v. Guatemala, ICSID Case No. ARB/07/23, Decision on Objection
to Jurisdiction: CAFTA Article 10.20.5, 17 November 2008, para. 56.
UNCTAD Series on International Investment Agreements IIView entire presentation