Abstract
The article aims at discussing whether State-State arbitration in foreign investments is an available strategy to host States. It revises the language of investment treaty provisions and inter-state arbitral awards and then analyses cases and treaty-making practice. This article concludes that the possibility of State-State arbitration is not a backlash. It constitutes an additional opportunity for host States to advance their understanding of the treaties and to provide balance to investment treaty commitments. While State-State arbitration may be a viable strategy, there are some challenges that need to be overcome. The definition of the term dispute, the obligation to consult on the meaning of provisions and the establishment of a clear hierarchy between State-State awards in relation to investor-State awards are some of the ways forward.
Highlights
O artigo pretende discutir se a arbitragem Estado-Estado em matéria de investimentos internacionais é uma estratégia para os Estados anfitriões
Considering an express delegation of interpretive powers by the parties to the State-State tribunals,34 few would deny that a previous State-State arbitration decision, which interprets a specific provision in a treaty, should be, at least, highly persuasive to future investor-State tribunals dealing with the same subject matter
The article concludes that the possibility of State-State3 arbitration in foreign investments (SSIA) is neither a backlash nor a more effective strategy compared to investor-state arbitration (ISA)
Summary
In this connection the two Contracting Parties hereby agree to enter into direct objective negotiations to reach such settlement. It is widely recognised that the introduction of ISA has substituted to a large extent the recourse to diplomatic protection.8 This means that host States have been directly challenged by investors and home States have seen their role in arbitration progressively diminished. In the terms of the provision, both treaty parties can submit the request for arbitration when an issue related to the interpretation or application of their treaty arises This may arguably take place even if there is a pending arbitration brought by an investor against a host State. The focus of this article is on how host States could effectively resort to SSIA as a defensive strategy and on what challenges they would face
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