Deconstructing Turkcell V Iran: The First Investment Treaty Claim against Iran

Abstract

Once an arbitral tribunal is constituted, the preliminary issue to be decided is the question of jurisdiction and admissibility of the claim. At the pre-merit stage, the tribunal determines whether it has jurisdiction over the disputes to proceed with the substantive issues. In investment arbitration, the jurisdictional requirements are contained in bilateral investment treaties (BITs) and the 1966 Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID Convention) and municipal laws. This article critically analyses the first BIT claim against Iran by reconstructing the Turkcell arbitration case. The Turkcell case concerned complex questions of Iranian and international law concerning the jurisdiction of an arbitral tribunal over investment activities. The Turkcell case highlights the important issue of interpretation of treaty provisions concerning the definition of investment (ratione materiae) and investors (ratione personae).