Investor Presentaiton
178
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
State's legal community. Contracting parties may
prescribe a certain minimum period of time to
give the domestic judiciary an opportunity to
consider the matter. Parties may also consider
including the obligation to exhaust local
remedies, or alternatively, to demonstrate
ineffectiveness/bias of local courts. This would
make ISDS an exceptional remedy of last resort.
To encourage recourse to domestic courts, a
treaty may wish to use a "no-U-turn" clause
instead of a "fork-in-the-road" clause. The former
permits investors to opt for international
arbitration even after commencing a claim for
relief in domestic courts or tribunals. States may
also wish to consider "tolling" any limitations
period while the investor seeks local redress in
order to give local remedies time to work and
remove the investor's incentive to shift forums
before the limitations period expires. However,
once the investor decides to submit the same
claim (i.e., a claim regarding the same State
action or measure) to international arbitration,
then the investor must waive its right to pursue
local remedies.
Domestic courts and tribunals are typically
presented with claims based on alleged violations
of the host State's domestic laws and/or of the
relevant contract. Depending on the legal system
of the State concerned, and subject to any
required domestic implementation of the IIA,
domestic courts may have jurisdiction to rule on
the alleged breaches of the IIA itself.
UNCTAD Series on International Investment Agreements IIView entire presentation