Originally from: Annulment of ICSID Awards

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The dispute resolution provisions of Bilateral Investment Treaties (“BITs”) and multilateral agreements such as NAFTA have created a new and important form of protection for the rights of foreign investors.  However, the emergence of treaty-based claims by private investors against a State party has raised challenges to some fundamental assumptions of international commercial arbitration.  What changes does treaty-based arbitration require to established arbitral doctrine, so firmly based on the existence of a contract between the parties?  What does it mean for international law, which traditionally considers that only State parties are subjects of international law and have rights under treaties?  What does it mean for the relations between arbitral tribunals and domestic courts, particularly in Latin America where, under the influence of the Calvo Doctrine, there was a strong tradition that the proper forum to resolve foreign investment disputes was domestic courts?  How are the new treaty-based rights to be reconciled with rights and obligations defined by the State and the investor in a Concession Contract, if the treaty and contract rights conflict in any way?

Faced with such fundamental uncertainties, lawyers acting for parties in investor-State arbitrations, and the members of the arbitral tribunals themselves, have been pioneers in the development of an important new jurisprudence.