I. Jurisdiction in general
The jurisdiction of arbitral tribunals may be based on investor-State consent,2 contained in an arbitration clause,3 in an investor-State contract, in investment codes of a host State, or in the provisions of investment treaties.4 In arbitration without privity, consent is one layer removed from particular investment transactions.5
Whereas jurisdiction considerations typically look at the dispute as a whole, admissibility is concerned with particular claims.6
Jurisdiction pertains to the competence of a tribunal to adjudicate a particular case, whereas questions as to applicable law are concerned with the rules the tribunal should apply.7
Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/20, Award, 26 April 2017, para. 73; A11Y LTD. v. Czech Republic, ICSID Case No. UNCT/15/1, Decision on Bifurcation, 5 October 2015, para. 55; Convention on the settlement of investment disputes between states and nationals of other states, 18 March 1965, Art. 25 (1).
Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft v. Argentine Republic, ICSID Case No. ARB/14/32, 29 June 2018, Decision on Jurisdiction, Dissenting Opinion on Respondent’s Second Preliminary Objection and Declaration of Dissent concerning its First and Third Preliminary Objections of Arbitrator Santiago Torres Bernárdez, para. 39; Philip Morris Brand Sàrl (Switzerland), Philip Morris Products S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Decision on Jurisdiction, 2 July 2013, para. 35; A11Y LTD. v. Czech Republic, ICSID Case No. UNCT/15/1, Decision on Jurisdiction, 9 February 2017, para. 104; Churchill Mining and Planet Mining Pty Ltd v. Republic of Indonesia, ICSID Case No. ARB/12/40 and 12/14, Decision on Jurisdiction (Planet Mining Pty Ltd), 24 February 2014, para. 171.
American Manufacturing & Trading, Inc. v. Republic of Zaire, ICSID Case No. ARB/93/1, Award, 21 February 1997, paras. 5.17–5.23; Lanco International Inc. v. Argentine Republic, ICSID Case No. ARB/97/6, Jurisdiction of the Arbitral Tribunal, 8 December 1998, paras. 8; Antoine Goetz and others v. Republic of Burundi (I), ICSID Case No. ARB/95/3, Award (Embodying the Parties' Settlement Agreement), 10 February 1999, paras. 67, 81.
Waste Management, Inc. v. United Mexican States (I), ICSID Case No. ARB(AF)/98/2, 2 June 2000, Award, Dissenting Opinion of Keith Highet (Arbitral Award), 8 May 2000, para. 58; Convention on the settlement of investment disputes between states and nationals of other states, 18 March 1965, Art. 41(2); CMS Gas Transmission Company v. The Argentine Republic, ICSID Case No. ARB/01/8, Decision on Jurisdiction, 17 July 2003, para. 41; Paulsson, J., Jurisdiction and admissibility, in Aksen, G., Böckstiegel, K.H., Patocchi, P.M and Whitesell, A.M. (eds.), Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in honour of Robert Briner (ICC Publishing, 2005) pp. 601–617.
II. Competence of arbitral tribunals
The arbitral tribunal’s power to determine its own jurisdiction is called competence-competence.8
Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft v. Argentine Republic, ICSID Case No. ARB/14/32, Decision on Jurisdiction, 29 June 2018, para. 169; Convention on the settlement of investment disputes between states and nationals of other states, 18 March 1965, Art. 41(1); Interpretation of the Greco-Turkish Agreement of 1 December 1926 (Final Protocol‚ Article IV), PCIJ Series B. No 16, Advisory Opinion, 28 August 1928, p. 20; Statute of the International Court of Justice, 26 June 1945, Art. 36(6).
The Mavrommatis Palestine Concessions, PCIJ Series A. No 2, Judgment (Objection to the Jurisdiction of the Court), 30 August 1924, p. 11; Convention on the settlement of investment disputes between states and nationals of other states, 18 March 1965, Art. 25 (1); Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objections to Jurisdiction, 25 January 2000, para. 94; AES Corporation v. Argentine Republic, ICSID Case No. ARB/02/17, Decision on Jurisdiction, 26 April 2005, para. 43.
III. Scope of jurisdiction
The jurisdiction of arbitral tribunals can be divided into four subjects: personal jurisdiction (ratione personae); territorial jurisdiction (ratione loci); temporal jurisdiction (ratione temporis); and subject-matter jurisdiction (ratione materiae).
Practitioners should also consider the impact on jurisdiction of overlapping agreements and resulting obligations. For example, no jurisprudence constante exists on whether investors can use MFN clauses to import more favourable dispute resolution provisions from third-party Bilateral Investment Treaties (BITs).21
Venezuela US, S.R.L. v. Bolivarian Republic of Venezuela, PCA Case No. 2013-34, Interim Award on Jurisdiction, 26 July 2016, para. 75; Convention on the settlement of investment disputes between states and nationals of other states, 18 March 1965, Art. 25(1); Generation Ukraine Inc. v. Ukraine, ICSID Case No. ARB/00/9, Award, 16 September 2003, paras. 10.5-10.6; Noble Energy Inc. and Machala Power Cía. Ltd. v. Republic of Ecuador and Consejo Nacional de Electricidad, ICSID Case No. ARB/05/12, Decision on Jurisdiction, 5 March 2008, paras. 179-182; Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2, Award, 15 March 2002, para. 24.
Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/09/2, 31 October 2012, Award, Dissenting Opinion of Makhdoom Ali Khan (Award), 23 October 2012, para. 37; Consortium Groupement L.E.S.I. - DIPENTA v. People's Democratic Republic of Algeria, ICSID Case No. ARB/03/8, Award, 10 January 2005, para. II. 14.
Island of Palmas (or Miangas) (The Netherlands / The United States of America), PCA Case No. 1925-01, Award, 4 May 1928, p. 845; Minquiers and Ecrehos (France v. United Kingdom), Judgment - (including the text of the declaration of Judge Alvarez), 17 November 1953, p. 56; Tradex Hellas S.A. v. Republic of Albania, ICSID Case No. ARB/94/2, Decision on Jurisdiction, 24 December 1996, paras. 43, 68; Mondev International Ltd. v. United States of America, ICSID Case No. ARB(AF)/99/2, Award, 11 October 2002, para. 70; ATA Construction, Industrial and Trading Company v. Hashemite Kingdom of Jordan, ICSID Case No. ARB/08/2, Award, 18 May 2010, para. 115.
Mera Investment Fund Limited v. Republic of Serbia, ICSID Case No. ARB/17/2, Decision on Jurisdiction, 30 November 2018, para. 135; Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft v. Argentine Republic, ICSID Case No. ARB/14/32, Decision on Jurisdiction, 29 June 2018, para. 195.
IV. Jurisdiction and admissibility: A 'twilight zone'
Jurisdiction and admissibility are terms that are sometimes used interchangeably.22 Classifying a matter as relating to jurisdiction, or alternatively as relating to admissibility, may have serious consequences for the parties and their dispute.23 Examples of issues arising from such classification include:
Chevron Corporation and Texaco Petroleum Company v. The Republic of Ecuador (II), PCA Case No. 2009-23, Third Interim Award on Jurisdiction and Admissibility, 27 February 2012, para. 4.91; Waste Management, Inc. v. United Mexican States (I), ICSID Case No. ARB(AF)/98/2, 2 June 2000, Award, Dissenting Opinion of Keith Highet (Arbitral Award), 8 May 2000, para. 58; Border and Transborder Armed Actions (Nicaragua v. Honduras), Judgment - Jurisdiction of the Court and Admissibility of the Application, 20 December 1988, para. 75-76; SGS Société Générale de Surveillance S.A. v. Republic of the Philippines, ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction, 29 January 2004, para. 154; Abaclat and others (formerly Giovanna A. Beccara and others) v. Argentine Republic, ICSID Case No. ARB/07/5, Decision on Jurisdiction and Admissibility, 4 August 2011, para. 496; Western NIS Enterprise Fund v. Ukraine, ICSID Case No. ARB/04/2, Order taking note of the discontinuance issued by the Tribunal, pursuant to Arbitration Rule 43(1), 16 March 2006, paras. 4-7.
V. Concluding remarks
This note examines some important issues concerning jurisdiction of arbitral tribunals in international investment disputes including investor-State consent, competence of tribunals, personal, territorial, temporal, subject-matter jurisdiction, investment, MFN clauses, distinction between jurisdiction and admissibility, procedural requisites, and fork in the road clauses. In ICSID cases, the tribunal’s jurisdiction is determined under Article 25 of the ICSID Convention and the instrument of consent. Any determination of jurisdiction and admissibility will have important consequences for the parties.
Pérez-Aznar, F., The Use of Most-Favoured-Nation Clauses to Import Substantive Treaty Provisions in International Investment Agreements, Journal of International Economic Law, Vol. 20(4), 2017, pp. 777-805.
Rosenfeld, F., Arbitral Praeliminaria- Reflections on the Distinction between Admissibility and Jurisdiction after BG V. Argentina, Leiden Journal of International Law, Vol. 29(1), 2016, pp.137-153.
Hassan Sadeghi Moghadam, M. and Jafari Nedoushan, S., The Effect of “Fork in the Road” and on the Jurisdiction of Investment Treaty Arbitral Tribunal in Foreign Investment Disputes, Journal of Public Law Research, Vol. 17(49), 2016, pp. 37-56.
Habibzadeh, T . and Gholami, A., Foreign Investment Contract and Scope of Host State Commitments Arising from Treaty, Journal of Public Law Research, Vol. 18(51), 2016, pp. 81-109.
Fontanelli, F., Deference in International Courts and Tribunals-Standard of Review and Margin of Appreciation, European Journal of Risk Regulation, European Journal of Risk Regulation, 2016, Vol.7(1), pp. 230-233
Lee, J., Resolving Concerns of Treaty Shopping in International Investment Arbitration, Journal of International Dispute Settlement, 2015, Vol. 6(2), pp. 355-379.
Rigo Sureda, A., Investment Treaty Arbitration: Judging under Uncertainty, Cambridge University Press, 2012.
Đundić, P., Provisions on Waiting Periods in International Investment Protection Treaties and their Impact on the Jurisdcition of Arbitral Tribunals, Zbornik Radova: Pravni Fakultet u Novom Sadu, Vol. 46(2), 2012, pp. 355-374.
Blanchard, S., State Consent, Temporal Jurisdiction, and the Importance of Continuing Circumstances Analysis into International Investment Arbitration, Washington University Global Studies Law Review, Vol. 10, 2011, pp. 419-837.
Smith, S., Foster, D. et al., International Arbitration, The International Lawyer, Vol. 45(1), 2011, pp. 95-110.
Crawford J., Treaty and Contract in Investment Arbitration, Arbitration International, Vol. 24, 2008, pp. 351-374.
Friedland, P.D., Martínez, L. and Caron, D.D., The UNICTRAL Arbitration Rules: A Commentary, A.J.I.L., Vol. 101, 2007, pp. 519-941.