Originally from: Czech and Central European Yearbook of Arbitration - 2013: Borders of Procedural and Substantive Law in Arbitral Proceedings

A set of new legal instruments has emerged in investment law since investment disputes arose. Arbitrators have focused on such instruments to the detriment of conservative procedural principles. The cause of action test is one principle that can be considered as unfairly forgotten or at least deprived of its bygone significance in solving jurisdictional issues. However, arbitral tribunals considering international investment disputes cannot merely ignore the cause of action test, particularly when they are facing a respondent’s arguments regarding the distinction between contractual claims and Bilateral Investment Treaty claims, or regarding the derivation of the putative identity of these claims from other alternative dispute-resolution mechanisms. There are plenty of awards where this test is mentioned in arbitral tribunals’ conclusions on jurisdiction, but they seem to betray the ambivalent character of the arbitrators’ incomplete comprehension at best, or a facile solution at worst. This article examines the various approaches to the cause of action test that are being applied by arbitral tribunals in investment disputes.