Investor Presentaiton
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they will often be governed by the applicable arbitral rules, such as
the ICSID Convention and its associated arbitration rules 21 and
United Nations Commission on International Trade Law
(UNCITRAL) rules, which are the two mechanisms used most
frequently in ISDS. The remainder of this section takes up
individual ISDS issues, both primary and secondary.
A. Consent to arbitration
International arbitration is a voluntary and consent-based
method of settling disputes. This means that both disputing parties
must give their prior consent to arbitration to enable an arbitral
tribunal to hear and decide their dispute.
The host State's consent to arbitration is usually expressed in
one of three places. The first is in a contract between the foreign
investor and the host State. The second is in national legislation
regarding foreign investment. The third is in an IIA between the
host State and the home State of a foreign investor. Of late, IIAS
have been the main source of States' consent, with the majority of
investor-State disputes brought pursuant to ISDS provisions in IIAs.
The rest of this section will thus focus on IIAS.
1. Approaches to consent in IIAS
Given that IIAs are agreements concluded between States, only
States (not investors) can give their consent to arbitration in an IIA
itself. According to the leading school of thought, the relevant
clauses in IIAs represent a unilateral offer of consent to arbitration
by the contracting States, which can be accepted by the other party
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Both of the States party to the IIA must be party to the ICSID
Convention in order for its mechanism to be available to resolve a dispute
under the IIA.
UNCTAD Series on International Investment Agreements IIView entire presentation