Investor Presentaiton
86
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
3. If such dispute cannot be settled amicably through
negotiations, any legal dispute between an investor of one
Contracting Party and the other Contracting Party in
connection with an investment in the territory of the other
Contracting Party shall have exhausted the domestic
administrative review procedure specified by the laws and
regulations of that Contracting Party, before submission of
the dispute the aforementioned arbitration procedure [...]."
(Emphasis added).
When an investor fails to meet mandatory domestic-review
requirements, the international arbitral tribunal may dismiss the IIA
claim as inadmissible.
If the relevant administrative review procedures do not exist in
the respective State or are not functional, the investor might be able
to avoid this stage by arguing that the local remedies are not
effective.
3. Preventing duplicative claims: "Fork-in-the-Road" and "No-
U-turn" clauses
One concern evinced by treaty drafters has been the possibility
that investors can seek relief in multiple forums for the same
violation. In particular, investors may submit disputes to the
domestic courts of the host State and simultaneously, or
subsequently, submit the same dispute to international arbitration.
Duplicative claims could require the host country to respond to the
same claims more than once, result in contradictory decisions, and
in some circumstances even permit double recovery by claimants.
Most IIAS address this potential problem in one of two ways.
The first is by requiring an investor to decide, at the very beginning,
whether the dispute will be adjudicated in domestic courts or
through international arbitration ("fork-in-the-road" provision). The
investor has no recourse to the other forum after it has selected one
UNCTAD Series on International Investment Agreements IIView entire presentation