Investment arbitration has brought enormous changes to the field of international arbitration. It has expanded the dispute resolution choices available to investors, but it has also enabled investors to commence parallel investment arbitration proceedings relating to the same subject matter. Such parallel proceedings could give rise to awards with inconsistent conclusions, or even scandalously contradictory awards. The question is: Will this problem tarnish the high regard in which international arbitration is held? This chapter highlights the importance of flexibility in order to maintain international arbitration’s well-deserved reputation in the brave new world of investment arbitration.
II. Enforceability of Treaty Obligations
It is now widely accepted in arbitral jurisprudence that an offer, made by a sovereign State party to a multilateral or bilateral investment treaty (BIT), to submit disputes to arbitration, if accepted by a foreign investor, establishes an enforceable arbitration agreement. The undertakings made by Host States (i.e., states where foreign investments are made) under these treaties, such as an agreement to provide “just and equal treatment,” “non-discriminatory treatment,” or “most-favored-nation treatment,” are binding and enforceable.