Pre-Dispute Waivers of Investment Treaty Arbitration: A Practical Approach - Chapter 15 - Between East and West: Essays in Honour of Ulf Franke
Jeffrey Hertzfeld is a retired founding Partner and former Chairman of the Salans international law firm. An American long based in Paris, he serves frequently as an independent arbitrator in international commercial and investment arbitrations across Europe.
Barton Legum is a Partner in Salans’ Paris office and head of the firm’s Investment Treaty Arbitration Practice. From 2000 to 2004, he served as Chief of the NAFTA Arbitration Division in the United States Department of State.
Originally from Between East and West: Essays in Honour of Ulf Franke
A decade or so has now elapsed since the “big bang” in investment treaty arbitration began. As a sign of the growing maturity of the field, and perhaps also increasing awareness among some governments of the implications of investment arbitration, pre-dispute waivers of recourse to investment arbitration are now appearing in certain government contracts with foreign investors.1 Such waivers have been the subject of two thoughtful articles, one authored by Jacomijn van Haersolte-van Hof and Anne K. Hoffmann, the other by Ole Spiermann.2 The present article supplements the scholarship of these authors by considering pre-dispute waivers from a practitioner’s perspective.
For purposes of the discussion that follows, we assume that the waiver explicitly and irrevocably forsakes any and all rights to resort to arbitration under a bilateral investment treaty. We therefore do not consider whether prior agreement to an alternative dispute resolution implicitly waives the right to resort to investment treaty arbitration—an issue thoroughly explored by these other authors.
In the pages that follow, we first consider—briefly—the question of whether an investor can waive the right to investment treaty arbitration. Here we largely follow the conclusion of prior authors that an investor can waive that right. We then consider the legal limitations on the effectiveness of the waiver under international law. We conclude by examining certain practical limitations on the effectiveness of such a waiver resulting from the inherent nature of investment treaty protections.