Consent to arbitration by a State and an investor may be given in three ways.3 The first is via direct agreement between the parties.4 The second is via the legislation of a host State.5 The third is through a treaty between the host State and the investor's State of nationality (the treaty may be either bilateral or multilateral).
II. Common components of an arbitration clause
An arbitration clause, regardless of the instrument in which it exists, will usually contain the following:7
III. Direct agreement between the parties
The compromissory clause must contain a clear reference of disputes (or category of disputes) to arbitration and clauses usually refer to "any dispute" under the agreement.9 Clauses might, however, provide that only certain disputes are referred to arbitration and other particular disputes might be referred to State courts or other forms of dispute resolution such as expert determination.
Issues can arise if investments are agreed over a number of different contracts and only some of those contracts contain compromissory clauses. The question then becomes whether only disputes in relation to those contracts containing the compromissory clause can be referred to arbitration, or whether all disputes concerning the particular investment can be referred to arbitration.10 In such cases, a tribunal might employ the "Unity of Investment" doctrine and consider the investment as a whole rather than as separate contracts.11 A party might also seek to establish that a compromissory clause is included by reference, for example through a most favoured nation clause (see Most Favoured Nation Treatment).12
It must also be noted that consent to arbitrate might arise under an umbrella clause.
IV. Legislation of the host State
Some States provide for recourse to arbitration in their national legislation.16 Whether references in national legislation amount to an offer to consent to arbitrate depends upon the wording of such legislation. Consent must be clear and, therefore, ambiguous wording might be interpreted not to have intended to provide consent.17
For the most part, consent provided by a host State in its national legislation amounts to an offer to arbitrate. The investor must accept that offer, either via an express route provided for in the relevant legislation or by initiating arbitration, for the agreement to arbitrate to be binding.18
V. Bilateral or multilateral investment treaties
Absent wording to the contrary, it is a firm rule of investment arbitration that an investor accepts a State's offer to arbitrate under the ICSID rules by filing their request for arbitration with ICSID (see also Trigger Letter).23 With respect to multilateral treaties, much will depend upon the wording of the particular clause. The Energy Charter Treaty ("ECT"), for example, provides that an investor may submit the dispute to arbitration under the ICSID Convention,24 the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules, or the Arbitration Rules of the Arbitration Institution of the Stockholm Chamber of Commerce (ECT Art 26(4)).25 The ICSID Convention however requires separate consent by the host State and by the foreign investor.26
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