M c G ill J ournal
of D ispute r esolution
r evue De rèGleMent Des DifférenDs De M c G
ill
This article first discuss the law governing a tribunal’s jurisdiction. Jurisdiction is governed primarily by the instrument(s) bestowing jurisdiction. In the ca of treaty arbitration, this will be the treaty offering connt to arbitration. On certain points, like the legality of the investment and the investor’s nationality, that treaty will refer to domestic law. A cond part deals with the varying scope of jurisdiction exercid by investment treaty tribunals. It ranges from a wide jurisdiction over all disputes arising from investments to jurisdiction only over certain narrowly defined disputes. There is no clear co
rrelation between the jurisdictional claus and provisions on applicable law in the relevant treaties. A third part looks at situations in which the tribunal’s jurisdiction and the applicable law derive from different sources. This is the ca, in particular, where the tribunal applies substantive standards that existed before the entry into force of the treaty providing for jurisdiction.Cet article traite du droit applicable à la compétence des arbitres. La compétence étant déterminée principalement par le biais d’un instrument attributif, dans le cas de l’arbitrage d’investisment, cela aura lieu à travers le traité offrant la possibilité de conntir à l’arbitrage. Sur certains points, tels que la légalité de l’investisment et la nationalité de l’investisur, le traité réfèrera au droit national. La deuxième partie de l’article aborde la compétence variable des tribunaux en matière d’investisment. Elle peut s’appliquer à tous les différends concernant l’investisment ou ulement à certaines questions bien définies. Toutefois, il n’y a pas de corrélation évidente entre ces claus attributives de compétence et les dispositions sur le droit applicable aux traités concernés. En dernier, la troisième partie penche sur les cas où la compétence du tribunal et le droit applicable ont des sources distinctes. Cela peut produire, notamment, lorsque le tribunal applique des standards préexistants à l’entrée en vigueur du traité attribuant la compétence.
Jurisdiction and Applicable Law in Investment Treaty Arbitration
南京财经大学自考Christoph Schreuer
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I. Introduction
In investment treaty arbitration jurisdiction is generally bad on an offer of connt to arbitration made by the states parties to a treaty. Most often the treaty is a bilateral investment treaty (“BIT”). That offer may be accepted by nationals of another state party to the treaty, often simply by starting arbitration proceedings. At the same time, the claimants typically rely on the substantive standards guaranteed by the treaty. Therefore, at first sight, the two aspects, jurisdiction and applicable substantive law, appear intimately linked. A clor look reveals that jurisdiction and applicable law, while clearly correlated in a number of ways, are by no means always coextensive.
In particular, it would be mistaken to assume that becau a tribunal derives its jurisdiction from a particular treaty the law to be applied is necessarily made up of that treaty’s substantive standards of
g开头的英文名protection. In other words, a tribunal’s basis of jurisdiction does not determine the law to be applied by it.
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The scope of a tribunal’s jurisdiction varies considerably from one treaty to another.
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Sometimes jurisdiction goes beyond the substantive standards provided by the respective treaty.
Sometimes jurisdiction coincides with them. Sometimes jurisdiction does not even extend to all of the treaty’s standards of protection. In some situations the substantive law to be applied by a tribunal is to be found entirely outside the treaty that constitutes the basis for its jurisdiction.
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Just as the basis of a tribunal’s jurisdiction does not determine the law it has to apply, the law applicable in a ca does not determine the tribunal’s jurisdiction. The law governing jurisdictional issues is independent of the law applicable to the merits of a ca.
This article first discuss the law governing issues of a tribunal’s jurisdiction. Jurisdiction is governed primarily by the instrument(s) bestowing jurisdiction. In the ca of treaty arbitration, this will be the treaty offering connt to arbitration. On certain points, like the legality of the investment and the investor’s nationality, that treaty will refer to domestic law.
A cond part deals with the varying scope of jurisdiction exercid by investment
treaty tribunals. It ranges from a wide jurisdiction over all disputes arising from investments to jurisdiction only over certain narrowly defined disputes. There is no clear correlation between the jurisdictional claus and provisions on applicable law in the relevant treaties.
A third part looks at situations in which the tribunal’s jurisdiction and the applicable law
derive from different sources. This is the ca, in particular, where the tribunal applies substantive standards that existed before the entry into force of the treaty providing for jurisdiction.
II. The Law Applicable to Jurisdiction
A. The Law Governing Jurisdiction
In most investment treaty arbitrations respondents rai jurisdictional objections that must be dealt with before the tribunal can proceed to the merits. Not infrequently, this leads to the question of the law applicable to issues of jurisdiction. At times respondents have argued that this would be the same as the law applicable to the merits.
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M c G ill J ournal of D ispute r esolution r evue De rèGleMent Des DifférenDs De M c G ill Tribunals have held consistently that questions of jurisdiction are not subject to the law applicable to the merits of the ca. Questions of jurisdiction are governed by their own system which is defined by the instruments containing the parties’ connt to jurisdiction.1
In CMS v Argentina , the Respondent sought to rely on its national company law to contest the standing of shareholders in a company. The Tribunal rejected this attempt and said:
[T]he applicable jurisdictional provisions are only tho of the [ICSID] Convention and the BIT, not tho which might ari from national legislation.2
More generally, with respect to the law governing jurisdiction the CMS Tribunal said:
Article 42 [of the ICSID Convention] is mainly designed for the resolution of disputes on the merits and, as such, it is in principle independent from
1 Ceskoslovenska Obchodni Banka AS v Slovakia , Decision on Jurisdiction (24 May 1999) at para 35, International Centre for Settlement of Investment Disputes (ICSID), 14 ICSID Rev 251; Enron Corp v Argentina , Decision on Jurisdiction (14 January 2004) at para 38, ICSID, ORIL IIC 93; Noble
Energy Inc v Ecuador , Decision on Jurisdiction (5 March 2008) at paras 56-57, ICSID, ORIL IIC 320; CMS Gas Transmission Company v Argentina , Decision on Jurisdiction (17 July 2003) at paras 42, 88, ICSID, ILM 788 [CMS ]; Siemens AG v Argentina , Decision on Jurisdiction (3 August 2004) at paras 29-31, ICSID, 44 ILM 138 [Siemens ]; Azurix Corp v Argentina , Decision on Jurisdiction (8 December 2003) at paras 48-50, ICSID, 43 ILM 262; Camuzzi International SA v Argentina , Decision on Jurisdiction (11 May 2005) at paras 15-17, 25-27, 57, ICSID, ORIL IIC 283; AES Corp v Argentina , Decision on Jurisdiction (26 April 2005) at paras 34-39, ICSID, 1
2 ICSID Rep 308; Berschader v Russian Federation , Award (21 April 2006) at paras 93-97, Arbitration Institute of the Stockholm Chamber of Commerce, ORIL IIC 314 [Berschader ]; Jan de Nul NV v Egypt , Decision on Jurisdiction (16 June 2006) at paras 65-68, ICSID, ORIL IIC 144; Saipem SPA v Bangladesh , Decision on Jurisdiction (21 March 2007) at paras 68-70, 78-82, ICSID, 22 ICSID Rev 100 [Saipem SPA ]; Inmaris Perestroika Sailing Maritime Services GMBH v Ukraine , Decision on Jurisdiction (8 March 2010) at para 54, ICSID, ORIL IIC 431 [Inmaris Perest -roika ]; Burlington Resources Inc v Ecuador , Decision on Jurisdiction (2 June 2010) at paras 101-103, ICSID, ORIL IIC 436; Railroad Development Corp v Guatemala , Second Decision on Jurisdiction (18 May 2010) at para 111, ICSID, ORIL IIC 432; Mobil Corporation Venezuela Holdings BV v Venez
uela , Decision on Jurisdiction (10 June 2010) at paras 71-85, ICSID, ORIL IIC 435; Alpha Projektholding GMBH v Ukraine , Award (8 November 2010) at paras 225-227, ICSID, ORIL IIC 464; Cemex Caracas Investments BV v Venezuela (30 December 2010) at paras 67-139, ICSID, ORIL IIC 470; Duke Energy International Peru Investments No 1 v Peru , Decision on Annulment (1 March 2011) at paras 125-144, ICSID, ORIL IIC 483; Alps Finance and Trade AG v Slovakia , Award (5 March 2011) at paras 193-199, Ad Hoc Tribunal-United Nations Commission on International Trade Law (Ad Hoc UNCITRAL), ORIL IIC 489; M Meerapfel Söhne AG v Central African Republic , Award (12 May 2011) at paras 139-147, ICSID, Ca No ARB/07/10; Abaclat v Argentina , Decision on Jurisdiction and Admissibility (4 August 2011) at para 430, ICSID, ORIL IIC 504 [Abaclat ]; Quiborax SA v Bolivia , Decision on Jurisdiction (27 September 2012) at paras 47-52, ICSID, ORIL IIC 56
3 [Quiborax ]; Electrabel SA v Hungary , Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) at para 4.17, ICSID, ORIL IIC 567; Teinver SA v Argentina , Decision on Jurisdiction (21 December 2012) at paras 227-228, ICSID, ORIL IIC 570 [Teinver ]; Ambiente Ufficio SPA v Argentina , Decision on Jurisdiction and Admissibility (8 February 2013) at paras 134, 153, 233-246, 257, 514-515, ICSID, ORIL IIC 576; Burimi SRL v Albania , Award (29 May 2013) at paras
specified92-165, ICSID, ORIL IIC 593; Philip Morris Brands Sàrl v Uruguay , Decision on Jurisdiction (2 July 2013) at para 30, ICSID, ORIL IIC 597; KT Asia Investment Group BV v Kazakhstan , Award (17 October 2013) at para 85, ICSID, ORIL IIC 615; Churchill Mining PLC v Indonesia , Decision on Jurisdiction (2
4 February 2014) at para 86, ICSID, ORIL IIC 634; Planet Mining Pty Ltd v Indonesia , Decision on Jurisdiction (24 February 2014) at para 86, ICSID, ORIL IIC 635.2
不存在的女儿CMS , supra note 1 at para 42.
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the decision on jurisdiction, governed solely by Article 25 of the [ICSID]
Convention and tho other provisions of the connt instrument which might
be applicable, in the instant ca the Treaty provisions.3
Article 25(2)(b) of the ICSID Convention employs the concept of foreign control as a jurisdictional element. The Tribunal in Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon found that the concept of control under Article 25(2)(b) was not to be interpreted just by looking at the law of the host State:
La notion de contrôle ne réfère pas au droit interne de l’Etat d’accueil. Il faut
lui conrver son autonomie, car elle rt à la détermination de la compétence
du CIRDI. Le droit interne peut ulement rvir d’indication.4
The Tribunal in Daimler v Argentina aptly summarized the issue of the law applicable to jurisdiction in the following terms:
For purpos of the Tribunal’s jurisdiction […] the proper law to be applied
is the German-Argentine BIT itlf, in concert with the ICSID Convention, as
interpreted in the light of general principles of international law.5
Therefore, it is clear that, independent of any law chon by the parties
with respect to the merits of their claims, jurisdictional issues, including the
existence of an investment, the prence of an eligible investor and the parties’
connt to arbitration, must be determined by reference to the legal instruments
establishing jurisdiction and by general international law.
B. Domestic Law and Jurisdiction
Some questions that are relevant to a tribunal’s jurisdiction are governed by domestic law.
In investment treaty arbitration this is usually the conquence of a reference to domestic law in the treaty providing for jurisdiction.
For instance, many treaties require that in order to qualify as an investment, the operation must be in accordance with the host State’s law. BITs frequently include the formula “in accordance with host State law” or a similar phra in their definitions of the term ‘investment’.6 The conquence of such a definition is that an investment that is not in compliance with host State law is not covered by the definition of ‛investment’ and will not benefit from protection under the treaty. Claus in the treatie
s providing for arbitration between the host State and the investor typically refer to investments as defined in the treaty. Therefore, failure to comply with host State law has the conquence that there is no valid connt to arbitration under the treaty.7
3 CMS, supra note 1 at para 88.
4 Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabon, Decision on Jurisdiction (19 De-
cember 2005) at para 35, ICSID, 26 ICSID Rev 173.
5 Daimler Financial Services v Argentina, Award(22 August 2012) at para 50, ICSID, ORIL IIC.
6 For detailed discussion e Christina Knahr, “Investments ‘In Accordance with Hosts State Law’” (2007)
4:5 TDM; Ursula Kriebaum, “Chapter V: Investment Arbitration – Illegal Investments” (2010) Austrian
Arbitration Yearbook 307.
responsible
7 Salini Costruttori SpA v Morocco, Decision on Jurisdiction (23 July 2001), ICSID, 42 ILM 606; Consor-
beckon
realizio Groupement LESI-DIPENTA v Algeria, Award (10 January 2005) at para II. 24 (iii), ICSID, ORIL IIC
149; Gas Natural SDG SA v Argentina, Decision on Jurisdiction(17 June 2005) at paras 33-34, ICSID,
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M c G ill J ournal of D ispute r esolution r evue De rèGleMent Des DifférenDs De M c G ill The treaty conferring jurisdiction directs the tribunal to apply host state law to the question of the investment’s legality. In turn, the investment’s legality determines its protection under the treaty, including access to arbitration. Therefore, the treaty’s criterion of legality rves as a gateway for the application of host state law.
In Metal-Tech v Uzbekistan the Tribunal described the link between the host state’s law and jurisdiction in the following terms:
[T]he Tribunal comes to the conclusion that corruption is established to an extent sufficient to violate Uzbekistan law in connection with the establishment of the Claimant’s investment in Uzbekistan. As a conquence, the investment has not been “implemented in accordance with the laws and regulations of the Contracting Party in who territory the investment is made” as required by Article 1(1) of the BIT.
373. Uzbekistan’s connt to ICSID arbitration, as expresd in Article 8(1) of the BIT, is restricted to disputes “concerning an investment.” Article 1(1) of the BIT defines investments to mean only investments implemented in compliance with local law. Accordingly, the prent dispute does not come within the reach of Article 8(1) and is not covered by Uzbekistan’s connt. This means that this dispute does not meet the connt requirement t in Article 25(1) of the ICSID Convention. Accordingly, failing connt by the host state under the BIT and the ICSID Convention, this Tribunal lacks jurisdiction over this dispute.8
Practice shows that tribunals have developed veral criteria to contain the potentially far-reaching conquences of importing host state law into the law applicable to jurisdiction by way of the legality requirement. The criteria include the verity of the violation,9 the question whether the domestic rules involved were part of the host state’s investment regime 10 and whether the illegality related to
the making of the investment or merely to its conduct. 11
ORIL IIC 115; Bayindir Insaat Turizm Ticaret ve Sanayai AŞ v Pakistan , Decision on Jurisdiction (14 November 2005) at paras 105-110, ICSID, ORIL IIC 27; Mytilineos Holdings SA v Serbia , Decision on Jurisdiction (8 September 2006) at paras 137-157, ICSID, ORIL IIC 345 [Mytilineos ]; Saipem SPA , supra note 1 at paras 79-82, 120-124; Aguas del Tunari SA v Bolivia , Decision on Jurisdiction (21 Octo -ber 2005) at paras 139-155, ICSID, ORIL IIC 8; Dert Line Projects LLC v Yemen , Award (6 February 2008) at para 104, ICSID, ORIL IIC 319 [Dert Line ]; Nordzucker AG v Poland , First Partial Award (10 December 2008) at para 167, Ad Hoc UNCITRAL [Nordzucker ]; SGS Société Générale de Surveillance SA v Paraguay , Decision on Jurisdiction (12 February 2010) at paras 118-123, ICSID, ORIL IIC 525 [SGS ]; Railroad Development , supra note 1 at para 140; Alasdair Ross Anderson v Costa Rica , Award (19 May 2010) at paras 50-59, ICSID, ORIL IIC 437; Fakes v Turkey , Award (14 July 2010) at para 115, ICSID, ORIL IIC 439 [Fakes ]; Quiborax , supra note 1 at para 255.8 Metal-Tech v Uzbekistan , Award (4 October 2013) at paras 372-373, ICSID, ORIL IIC 619 [Metal-Tech ].9 Rumeli Telekom AS v Kazakhstan , Award (29 July 2008) at para 168, ICSID, ORIL IIC 344; Dert Line , supra note 7 at para 104; Metalpar SA v Argentina , Decision on Jurisdiction (27 April 2006) at para 84, ICSID, ORIL IIC 164; Mytilineos , supra note 7 at paras 151-1
57; Inmaris Perestroika , supra note 1 at paras 144-145; Vanessa Ventures Ltd v Venezuela , Award (16 January 1913) at para 167 [Vanessa ]; Tokios Tokelės v Ukraine , Decision on Jurisdiction (29 April 2004) at para 86, ICSID, 20 ICSID Rev 205 [Tokios Tokelės ]. See also Alpha Projektholding , supra note 1 at paras 292-297.10 Fakes , supra note 7 at para 119; 11 Jan Oostergetel and Theodora Laurentius v The Slovak Republic , Decision on Jurisdiction (30 April 2010) at paras 173-183, Ad Hoc UNCITRAL; Gustav F W Hamester GmbH & Co KG v Ghana , Award
