Originally From World Arbitration and Mediation Review (WAMR)

I. INTRODUCTION

Determining the applicable substantive law in foreign investment disputes raises a number of complicated issues. Consulting the usual legal sources of treaty texts, available cases, and scholarly literature yields helpful but incomplete guidance. The text of investment treaties is useful, but often raises more questions than it answers. Case law also contributes to our understanding, but the number of cases on point is limited.1 The academic literature – to which this Article seeks to contribute – is relatively scarce.2

The dominant approach to the applicable law question distinguishes between two situations, depending on whether or not there is an investment agreement (traditionally called a concession agreement in the extraction industry and infrastructure projects) or at least an arbitration agreement, submission agreement, or some other dispute resolution clause (which we will simply refer to as the investment agreement). For the purposes of this article, we will call situations in which this sort of agreement exists the “ICSID approach.” When there is no agreement, we will refer to the “NAFTA approach.”