Investor Presentaiton
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(ii) Exclusion of disputes in a particular regulatory area or
relating to specific obligations
States will exclude from the scope of their IIAs those areas
where countries wish to preserve full regulatory autonomy, subject
to the control of national courts. For example, Annex IV
"Exclusions from Dispute Settlement” of the Canada-Jordan BIT
(2009) excludes from arbitral review: decisions taken under the
Investment Canada Act relating to acquisitions that are subject to
review; decisions relating to the administration or enforcement of
Canada's Competition Act; and decisions under certain Jordanian
regulations regarding participation in large development projects.
Some treaties exclude certain obligations from the scope of
ISDS. Thus, the Malaysia-Pakistan Closer Economic Partnership
Agreement (2007) excludes all disputes concerning national
treatment and performance requirements:
"This Article [on ISDS] shall not apply to any dispute
arising between a Party and an investor of the other Party on
any right or privileges conferred or created by Article 89
[National Treatment] and 92 [Performance Requirements]."
(Article 98(13), emphasis added)
This means that a foreign investor may not use ISDS to seek
redress for an alleged violation of the named obligations by the host
State. These obligations are thus subject to State-State dispute
settlement only, or to resolution by local courts in Malaysia and
Pakistan, assuming they are able to consider claims based on
international law.
The Belgium/Luxembourg-Colombia BIT (2009) provides in
Article VII(5) that the dispute settlement measures of the agreement
"shall not apply to any obligation undertaken in accordance with
[Article VII, which deals with environmental protection]". In
particular, Article VII(4) provides:
UNCTAD Series on International Investment Agreements IIView entire presentation