II. Formal requirements
A. Written consent
In ICSID arbitration, written consent is to be given by a State party to the ICSID Convention and a national of a State party to the Convention.5 There are however no technical requirements as to the way such consent is to be given.6
Written consent under Article 25(1) of the ICSID Convention can be expressed by the State through its treaties, legislation or contracts and by the investor via its request for arbitration.7 See further Section V below.
B. Requirements as to the parties' expression of consent
III. Burden and standard of proof
IV. Applicable law
The determination of consent under Article 25(1) of the ICSID Convention in particular is governed by the said Convention and international law,21 but domestic law may play a useful role notably when the State’s consent is expressed through acts other than treaties.22
V. Basis of consent
A. Expression of the host State's consent to arbitration
Consent to arbitration may result from a direct agreement to bring before an arbitral tribunal either future disputes arising from the investment operation (compromissory clause)23 or an existing dispute (compromis), although the latter option is rare in investor-State arbitration.24
Most investment claims have been submitted on the basis of a host State’s offer to arbitrate which may occur in the following ways:26
B. Expression of the host State’s subdivisions and agencies’ consent to arbitration
Articles 25(1) and 25(3) of the ICSID Convention extend jurisdiction to disputes between the “constituent subdivisions” and “agencies” of a contracting State and a national of another contracting State. “[M]unicipalities, local government bodies in unitary states, semi-autonomous dependencies, provinces or federated States in non-unitary States and the local government bodies […]” may be considered as subdivisions and agencies of the State.39
The State’s subdivisions and agencies’ consent, and thus the ICSID tribunal’s jurisdiction over the dispute, is subject to designation by the State to the Centre40 and the State’s approval (or notification that such approval is not required).41 At least one tribunal has however held that the good faith conduct of the parties may override this requirement of designation.42
C. Expression of the investor's consent to arbitration
Consent by the investor can be expressed in various ways.43 For instance:
VI. Timing of consent
ICSID tribunals have generally held that consent must exist when the request for arbitration is filed.50 One tribunal has however controversially held that consent could be expressed anytime and even in the pleadings of the parties (forum prorogatum),51 to which one arbitrator and the subsequent ad hoc annulment Committee disagreed.52
The timing of the investor’s consent plays an essential role in determining the tribunal’s jurisdiction in cases where the host State has denounced the ICSID Convention. See further Denunciation of ICSID Convention, Section III.
VII. Scope of consent
A. Consent limited to certain disputes
The host State’s offer to arbitrate may be limited to certain types of disputes.58
Within the ICSID framework, Article 25(4) of the ICSID Convention allows a contracting State to notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. Few tribunals have considered that this notification may affect consent68 while others have disagreed.69
B. Consent limited to certain parties
The joinder of third parties to the proceedings and admission of third parties to hearings require the consent of the parties.70 However, tribunals may exercise discretion on certain procedural matters such as the admission of amicus curiae briefs depending on the applicable treaty and/or rules of arbitration.71 See further Joinder, Amicus curiae.
C. Consent limited to certain arbitral fora
Dispute resolution clauses generally indicate the available fora before which investment claims may be brought (i.e. before national courts or an arbitration tribunal).72
VIII. Procedural requirements prior to the State's consent
Arbitration clauses may subject the possibility for the investor to institute arbitration proceedings upon satisfaction of several preliminary procedural requirements,75 which are usually as follows: waiting periods for amicable settlement (cooling-off periods) or submission of the dispute to local courts in the host State within a certain period of time, often between six to eighteen months. See further Exhaustion of local remedies, Cooling-off periods, Section IV.
IX. Investor's consent to counterclaims
X. Consequences of the non-respect of the parties' consent
Similarly, in non-ICSID arbitrations, a national court may set aside an award that goes beyond the scope of the submissions (see further Setting-aside of awards by domestic courts) or refuse to recognise or enforce the award on the basis that the arbitral tribunal exceeded the scope of consent to arbitration under Article V(1)(c) of the New York Convention (see further Matters not falling within the terms of the submission to arbitration).
Amerasinghe, C.F., Jurisdiction ratione personae under the Convention on the Settlement of Investment Disputes between States and Nationals of other States, British Yearbook of International Law, 1975, pp. 227-267.
Amerasinghe, C.F., Jurisdiction of International Tribunals, 2002.
Blanchard, S., State Consent, Temporal Jurisdiction, and the Importation of Continuing Circumstances Analysis into International Investment Arbitration, Washington University Global Studies Law Review, 2011, pp. 419-476.
Broches, A., The Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, Recueil des Cours de l’Académie de droit international (RCADI), 1972, pp. 331-410.
Fitzmaurice, Sir G., The Law and Procedure of the International Court of Justice, 1986.
Kahn, P., Les investissements internationaux, nouvelles donnes : un droit transnational de l’investissement, in Kahn, P., and Wälde, T. (eds.), New Aspects of International Investment Law/Les aspects nouveaux du droit des investissements internationaux 2004, 2007, pp. 3-41.
Kaufmann-Kohler, G., Interpretation of Treaties: How do Arbitral Tribunals Interpret Dispute Settlement Provisions Embodied in Investment Treaties?, in Mistelis, L.A., and Lew, J.D.M. (eds.), Pervasive Problems in International Arbitration, 2006, pp. 257-275.
Lamm, C.B., Jurisdiction of the International Centre for Settlement of Investment Disputes, ICSID Review - Foreign Investment Law Journal, 1991, pp. 462-483.
Lalive, P., Some Objections to Jurisdiction in Investor-State Arbitration, in van den Berg, A.J. (ed.), International Commercial Arbitration: Important Contemporary Questions, 2003, pp. 376-391.
Paulsson, J., Arbitration Without Privity, ICSID Review - Foreign Investment Law Journal, 1995, pp. 232-257.
Paulsson, J., Jurisdiction and Admissibility, in Aksen, G., and Briner, R.(eds.), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in honour of Robert Briner, 2005, pp. 601- 617.
Reuter, P., Réflexion sur la compétence du Centre créé par la Convention pour le règlement des différends relatifs aux investissements entre États et ressortissants d’autres États, in Investissements étrangers et arbitrage entre États et personnes privées, 1965, pp. 9-24.
Schreuer, C., Consent to Arbitration, in Muchlinski, P., and Others (eds.), The Oxford Handbook of International Investment Law, 2009, pp. 830-867.
Schreuer, C., and Others, The ICSID Convention: a Commentary, 2nd ed., 2009.
Stern, B., Le consentement à l’arbitrage CIRDI en matière d’investissement international : que disent les travaux préparatoires ?, in Mélanges, P.K, Souveraineté étatique et marchés internationaux à la fin du 20ème siècle, 2000, pp. 223-244.
Zeiler, G., Jurisdiction, competence, and admissibility of claims in ICSID arbitration proceedings, in Binder, C., and Others. (eds.), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, 2009, pp. 76-91.
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