Investor Presentaiton
52
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
of investments (pre-establishment" IIAs). Agreements of the latter
type have wider breadth of coverage.
IIA substantive obligations. The potential for IIA claims
depends on the specific IIA obligations found in the treaty (for
example, whether or not it includes a prohibition of performance
requirements, an umbrella clause or the FET standard) as well as on
the specific content of these obligations (whether or not the free-
transfer provision is qualified by exceptions, whether the FET
standard is qualified by reference to the customary international law
minimum standard of treatment of aliens, etc.). The fewer and more
circumscribed the obligations are, the less scope there is for ISDS.
IIAs' substantive obligations can be delineated by general
exceptions. The latter allow States to derogate from the IIA
obligations when such derogation pursues a policy objective
included in the general-exceptions clause. Such policy may include
public health and safety, national security, environmental protection
and some others. A number of treaties now contain general
exceptions, but how they will work in practice is yet to be tested.
(ii) Range of persons benefitting from the treaty
ISDS involves a national or company of one State submitting a
claim against another State. The underlying issue is whether the
protections and rights contained in an IIA should be extended to a
specific claimant. Through its definition of "investor", an IIA
typically covers both natural and legal persons
but there are a
number of options to make the range of covered persons broader or
narrower.
Natural persons. IIAs typically apply to natural persons who
are recognized by the domestic law of the relevant contracting party
as a national or citizen. An IIA may, however, also extend beyond
nationals to cover permanent residents of the State and thereby
increase the scope of coverage.
UNCTAD Series on International Investment Agreements IIView entire presentation