Victorino J. Tejera Pérez is an Attorney in the Caracas office of Macleod Dixon LLP. He concentrates his practice in commercial law, conflict law and corporate matters. He focuses his practice in national and international litigation and arbitration and in Alternative Dispute Resolution in general.
Do municipal investment laws always constitute a unilateral offer to arbitrate? The answer to this question seems obvious to us: no, investment laws do not always constitute unilateral offers to arbitrate. In our view, whether they constitute unilateral offers to arbitrate or not will ultimately depend on the specific wording of each municipal investment law.
Indeed, there are investment laws that do not even contain provisions regarding arbitration as a means of dispute resolution. Such is the case of the Syrian Investment Law,1 the South Korean Foreign Investment Promotion Act, the Foreign Investment Law of Myanmar, the Mexican Foreign Investment Law as amended on June 4, 2001 and the Honduran Decree No. 80-92 of June 1992 on investments. None of these mention dispute resolution, which would seemingly indicate that disputes have to be settled through local courts. Other investment laws, such as the 1955 Iranian Foreign Investment Law in its Article 3, expressly contemplate recourse to domestic courts for foreign investors, as opposed to those that do not mention mechanisms of dispute resolution.2
As Mr. Antonio Parra pointed out several years ago, many investment laws emphasize the desirability of the negotiated settlement of disputes between foreign investors and the host State. The 1994 investment law of Ghana, for example, provides that “[w]here a dispute arises between an investor and Government in respect of an enterprise, all efforts shall be made through mutual discussion to reach an amicable settlement." Similar provisions may be found in the investment laws of Tanzania and Uganda.3