Investor Presentaiton
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On its face, this type of provision gives greater prominence to
host State law. Usually, it goes together with a broad ISDS clause
that permits all disputes relating to/connected with the investment to
be submitted to arbitration. Host State law may be relevant, for
example, if an investor's claim alleges a violation of domestic law
or of an investment contract (which chooses the host State law as
the law governing the contract).
Post-2004 IIAs concluded by the United States present an
interesting example as they prescribe different applicable laws
depending on the claimant's cause of action: (1) where a claimant
alleges a violation of a treaty obligation, the applicable law consists
of the treaty and applicable international law; (2) where a claim is
based on the alleged violation of an investment authorization or an
investment contract, the applicable law is specified by the relevant
authorization or contract but if they do not specify the governing
law, then it is the law of the respondent State complemented by
applicable rules of international law (e.g., Article 30 of the
Uruguay-United States BIT (2005)). These provisions emphasize
the link between applicable law and the authority of the tribunal to
consider particular claims.
(iii) Law agreed by the disputing parties
Article 10(4) of the China-Netherlands BIT (2004) states:
"The ad hoc tribunal shall decide a dispute in accordance
with such rules of law as may be agreed by the parties. In
absence of such agreement the tribunal shall apply the law of
the Contracting Party to the dispute (including its rules on the
conflict of laws), the provisions of this Agreement and such
rules of international law as may be applicable." (Emphasis
added).
This provision's approach reflects the frequent practice in
international transactions between private parties in which they
UNCTAD Series on International Investment Agreements IIView entire presentation