Investor Presentaiton
46
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
provision is that any such measure will be automatically excused,
will not be subject even to good-faith review, and will not give rise
to a claim for damages. This approach potentially allows a State to
justify any measure so long as it maintains that there is a connection
between the measure and the protection of security interests. 34 It is
as yet unclear how this approach will work in practice.
(iii) Exclusion of "pre-establishment" issues
Traditional investment treaties are of the "post-establishment" type;
they apply to investments after the latter are established in the host
State. Under such treaties, States retain full discretion in the matter
of admitting investments. By contrast, a growing number of IIAS
include in addition to post-establishment protections pre-
establishment obligations that guarantee non-discriminatory access
to the host country market to investors from the other contracting
party. However, some of these pre-establishment IIAS have
nevertheless excluded certain pre-establishment issues from the
scope of ISDS.
The Japan-Mexico FTA (2004) provides an
example:
"Article 95. Exceptions from Dispute Settlement Procedure
1. Without prejudice to the applicability or non- applicability
of the dispute settlement provisions of this Section or of
Chapter 15 to other actions taken by a Party pursuant to
Article 169, a decision by a Party to prohibit or restrict the
acquisition of an investment in its Area by an investor of the
other Party, or its investment, pursuant to that Article shall
not be subject to such provisions.
34 The security exception itself is drafted in a rather detailed manner and
does not leave much room for extensive interpretation. An additional
Annex 4, "Security Exceptions for Investment", further clarifies the scope
of the exception.
UNCTAD Series on International Investment Agreements IIView entire presentation