The Unresolved Conundrum of Contract-based and Treaty-based Claims – An Extra Element of Contention: Privity of Contract and Forum Selection Clauses in Investment Contracts

Abstract

Investment contracts are of seminal importance in today’s economy and the case-law developed by investment treaty tribunals is increasingly called to find a solution to contentious issues. By reason of the way investment contracts, most remarkably concession contracts, are concluded, there is a particular legal notion that more and more often raises fundamental questions that touch upon state responsibility, attribution of conduct, consent to arbitration and competent fora, i.e. privity of contract. After an initial introduction to the topic, this contribution will particularly focus on the consequences the application of the doctrine bears in international investment arbitration where forum selection clauses are included in local contracts with the investor. This can in fact open the door to different scenarios, either broadening or reducing the scope of jurisdiction of international arbitral tribunals depending on the latter’s interpretation. Indeed, the undefined nature of the matter is material nowadays in discussions regarding this fundamental means of dispute resolution, that, despite the criticism it receives, remains an invaluable instrument to efficiently solve disputes and ultimately uphold the rule of law.