Much has been written about what pro-arbitration means in the context of commercial arbitration. Much less in an investor-state one since, in the words of Professor Bermann, it is very difficult “to separate arbitration as a foreign investment dispute resolution vehicle, on the one hand, from foreign investment law and policy, on the other.” One aspect that may be worth discussing, however, is how flexible the current investor-state dispute settlement system (ISDS) is, how it accommodates the ever frequent transfers of investments between economic operators and, in particular, whether the original investor’s treaty rights and claims can pass along jointly with, or separately from, the underlying investment.
In practice, the assignment of investment-treaty claims seems desirable and aligned with the ISDS’ goal to promote foreign direct investment. Whether that assignment is legally valid under international law, however, is a more nuanced matter.
As a starting point, “[t]he law governing the arbitration agreement determines the assignability of the agreement, the conditions to which the assignment is subject, and the consequences of the assignment, at least as far as relations between the assignor and its initial co-contractor are concerned.” Consequently, the assignability of investment treaty rights must be determined according to international law in general, and the relevant treaty as lex specialis. The analysis may vary, however, depending on whether the claim is transferred to a third party together with the underlying investment or in isolation. A brief analysis of both scenarios follows.