Investment arbitration (“Investor-State Dispute Settlement or ISDS) occurs when a foreign investor brings a claim against a host State. This gives an opportunity for foreign investors to have a fair proceeding and have access to independent experienced arbitrators who will resolve the dispute and render a judgement called an arbitral award. This award will be enforceable either in the government host State or in foreign State where the government maintain some interest or assets.
This proceeding helps the foreign investor to avoid national jurisdictions that perceived to be biased and to resolve the dispute under different protections afforded under international treaties.
For a foreign investor to bring an action against a host state under an investment arbitration, a host State must have given consent either through a written contractual agreement, Bilateral Investment Treaties (BIT’s) Free Trade Agreements (FTA’s) and multilateral agreements.
In order for a foreign investor to find out whether a country has consented to an investment arbitration jurisdiction, the United Nations’ UNCTAD which maintains a list of the vast majority of instruments providing for a host State’s consent to investment arbitration is a great resource in finding out the proper instrument in finding out the consent of the host state.
The most common protections that are provided under most investment treaties are:
- Protection against expropriation/misappropriation.
- Fair and equitable treatment of investors (FET);
- National treatment.
- Most-favored-nation treatment (MFN);
- Freedom to transfer funds; and
- Full protection and security
At Cueto Law Group, our attorneys recognize the complexity of Arbitral Jurisdiction. Our Attorneys have experience in finding the proper Jurisdiction to initiate an arbitral proceeding and get the best result for our clients.