Not a Third Party: Home State Participation As a Matter of Right in Investment Treaty Arbitration

Rebecca E Khan

doi:10.1007/978-3-030-58916-5_6

Abstract

AbstractHost states are not the only sovereign parties that an investment dispute can impact. The sovereign interests of an investor’s home state are also potentially affected by an investment claim initiated by a national against an investment treaty partner, and more mechanisms should be put in place to ensure that the home state has access to the arbitration proceedings. This chapter argues for non-disputing state party participation as a matter of right in investment treaty arbitration cases. Whether or not the home state of the investor is informed of and allowed to participate in an investment dispute has largely been left to the discretion of arbitral tribunals; arbitration rules and jurisprudence have regarded the home state no differently than non-governmental third parties seeking to participate in the arbitration as amici curiae. From the perspective of increased transparency in the investor-state dispute settlement system, this chapter posits that non-disputing state parties must be accorded an elevated status in investor-state arbitration, with the following rights: first, to be formally notified at the outset about an investment treaty dispute; second, to have access to the documents of the arbitration case; and, third, to make written submissions with respect to the interpretation of the international investment agreement invoked in the claim. The analysis begins by identifying the sovereign interests of the home state that come into play in an investment treaty arbitration. The perils of diplomatic protection are examined in this chapter, to provide the perspective from which to delimit the parameters for non-disputing state party participation. A survey of arbitration rules and jurisprudence outlines the level of participation thus far accorded to home states in investment treaty arbitration.

Highlights

State parties in investment disputes have transparency concerns that differ from those of investors
The transparency concerns of the home state mirror those of the disputing state party rather than those of non-governmental non-parties that seek to participate as amici curiae in investment disputes
The participation of non-disputing state parties in the investor-state dispute resolution process is relevant for the following reasons: first, the proposals and observations of the investor’s home state during the treaty negotiation process are reflected in the travaux preparatoires of the relevant investment agreement; second, submissions in the form of amicus curiae briefs may be allowed by the investment arbitration tribunal with respect to issues of treaty interpretation; and, third, involvement of the home state would facilitate the enforcement of arbitral awards rendered in favour of its investors

Summary

Introduction

State parties in investment disputes have transparency concerns that differ from those of investors. The home state of the investor is involved in an investment dispute not as a party to the arbitration proceedings but rather as the investment treaty partner of the host state, which is the sovereign respondent. The transparency concerns of the home state mirror those of the disputing state party rather than those of non-governmental non-parties that seek to participate as amici curiae in investment disputes. 5 argues that non-disputing state party participation should be granted as a matter of right, rather than be subject to a tribunal’s discretion, with respect to issues of interpretation of the relevant investment treaty

Diplomatic Protection

NAFTA and Non-disputing State Party Participation

ICSID and Non-disputing State Party Participation

UNCITRAL Transparency Rules and Non-disputing State Party Participation

Survey of Investment Treaty Arbitration Cases with Non-disputing State Party Participation

Findings

A Matter of Right