'Good Faith', 'Abuse of Process' and the Initiation of Investment Treaty Claims

Abstract

The principle of ‘good faith’ in assessing the initiation of investment treaty claims has manifestly become an important rule of international investment arbitration. From a procedural perspective, ‘good faith’ plays a significant role at the jurisdictional stage of international arbitral proceedings; for questions relating to whether the investment was acquired in ‘good faith’ or whether investor’s initiation of a claim is made in ‘good faith’, in order to avoid an abuse of the arbitral process. Such assessments, procedurally speaking, can be characterized either as a question that goes to the jurisdiction of the arbitral tribunal and thus to the consent to arbitration, or as a question of the admissibility of the claim. This article will examine the position of the principles of ‘good faith’ and ‘abuse of process’ in the assessment by investment tribunals of their jurisdiction and the admissibility of the claim. In doing so, this article will show that the application of these principles in international investment arbitration may play an important role in shielding tribunals from abusive submissions, and thus avoiding abuses of the arbitral procedure and the direct access of foreign investors to international arbitration.