"There exists no legal nor conventional provision that obliges the Minister of Economy and Finance to submit himself to a procedure other than the one expressly agreed upon by means of contracts between the parties, i.e. the Ministry of Finance and Economy and IBM Ecuador, and that there is no legal support to reason the requested arbitral process, without therefore this communication implying the acknowledgement of the origin of the arbitration and only with the purpose of avoiding that the Ministry of Finance and Economy would be exposed to a defenselessness, with the purpose of complying with the formality set forth in the Regulations for Arbitration for the integration of the Tribunal... "
Precisely an Agreement like the BIT is meant to ensure that the Contracting States fulfill the obligations that come forth from the investments made by foreigners on their territories. With these the intention is to agree upon mechanisms to solve controversies, which are to be compulsorily imposed towards the future, whichever may be the national or investor of another State who considers himself, real or presumably, affected by acts or facts that, in his opinion, affect the rights over his investments.
"(iii) if the party is a juridical person which on the date of consent had the nationality of the Contracting State party to the dispute, the agreement of the parties that it should be treated as a national of another Contracting State for the purposes of the Convention;"
"For the purposes of this Treaty:
a) "Investment" means every kind of investment in the territory of one Party owned or controlled directly or indirectly by nationals or companies of the other Party, such as equity, debt, and service and investment contracts; and includes:
i) Tangible and intangible property, including rights, such as mortgages, liens and pledges;
ii) a company or shares of stock or other interests in a company or interests in the assets thereof;
iii) a claim to money or a claim to performance having economic value, and associated with an investment;
iv) intellectual property which includes, inter alia, rights relating to:
literary and artistic works, including sound recordings; Inventions in all fields of human endeavor; Industrial designs; semiconductors mask works; trade secrets, know-how, and confidential business information; and trademarks, service marks and trade names; and
v) Any right conferred by law or by contract, and any licenses and permits pursuant to Law."
See Salini Costruttori SpA and Italstrade SpA vs..Kingdom of Morocco, Decision on competence as of July 16, 2003, paragraphs 43 and following, Journal du droit international, 129, Année 2002, January-February-March, No. 1, p.196 to 206. and Fedax N.V. vs. Republic of Venezuela, Decision on competence as of July 11, 1997, paragraphs 21 and following, ICSID Reports, vol. 5, 2002.
The existence of the contract as a source of obligations generates a link by virtue of which IBM Ecuador can request from the Republic of Ecuador, represented by its government and the pertinent authorities, the compliance of obligations arising from the contract. Moreover, by the BIT definition, contracts do also constitute or represent investments. In that context, a contract is not only regarded as a source of obligations, but also as a mechanism through which a capital flows from one country towards another one. If the BIT conceives the contract as in investment, it is necessary to analyze and discover why the high contracting parties, the Republic of Ecuador and the United States of America, deemed that contracts had to be considered as investments.
« La décision par laquelle le tribunal arbitral constitué dans l'affaire Salini Costruttori SpA et Italstrade SpA c/ Royaume du Maroc retient sa compétence pour connaître des demandes formées par les deux sociétés italiennes adjudicataires du marché de la construction d'une autoroute au Maroc est importante a un double titre. La premier (sic) tient au fait qu'elle admet pour la première fois dans la jurisprudence due Centre qu'un contrat de construction puisse être qualifié d'investissement au sens de l'article 25 de la Convention de Washington ; le second au fait qu'elle illustre la situation relativement fréquente dans laquelle la compétence du Centre pour connaître des litiges opposant l'investisseur à l'Etat sur le fondement d'un traité vient en concours avec celle des juridictions ou des tribunaux arbitraux désignés par les parties à l'opération pour connaître des différends de nature contractuelle susceptibles d'en découler (II). »
Société Générale de Surveillance S.A. vs. Islamic Republic of Pakistan, Decision on competence dated August 6, 2003, Mealey's International Arbitration Report, Vol. 18, No. 9, September 2003, pages 3 to 66
"Consent of the parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy. A Contracting State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under this Convention."
"In the event of an investment dispute, the parties to the dispute should initially seek a resolution through consultation and negotiation. If the dispute cannot be settled amicably, the national or company concerned may chooseto submit the dispute, under one of the following alternatives,(emphasis added by the Tribunal) for resolution:
a) to the courts or administrative tribunals of the Party that is a party to the dispute; or
b) in accordance with any applicable, previously agreed dispute-settlement procedures; or
c) in accordance with the terms of paragraph 3."
"a) Provided that the national or company concerned has not submitted the dispute for resolution under paragraph 2 (a) or (b) and that six months have elapsed from the data on which the dispute arose, the national or company concerned may choose to consent in writing to the submission of the dispute for settlement by binding arbitration."