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M. Armand Terrien

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Jurisdiction Ratione Temporis

I. Definition

1.

Jurisdiction ratione temporis refers to the effect of time on a tribunal’s powers pursuant to a treaty. Such effects are usually directly dictated by express language contained in the applicable treaty. In the absence of express provisions in such treaty, tribunals will decide the issue by reference to customary international law.1

II. Distinguishing jurisdiction ratione temporis from other temporal issues

2.

Jurisdiction ratione temporis is distinct from procedural (or admissibility) issues that present a temporal aspect (e.g. whether claimant has exhausted local remedies, attempted to resolve the dispute amicably, or properly notified respondent in accordance with the applicable treaty). Moreover, in cases involving corporate structuring or restructuring issues, tribunals have distinguished jurisdiction ratione temporis objections from abuse of process/rights objections.2 See further Abuse of process, Section III.

3.

Tribunals have also distinguished jurisdiction ratione temporis from the applicability ratione temporis of the substantive rights granted by a treaty.3 Other tribunals have decided on their jurisdiction without considering this distinction,4 or have stated that it is unnecessary when it comes to treaty breaches.5

4.

Finally, temporal issues relating to a State’s withdrawal from ICSID are sometimes referred to as falling under the jurisdiction ratione voluntatis of a tribunal. See further Denunciation of ICSID Convention; Denunciation of BIT.

III. Applicability ratione temporis of substantive rights: timing of the investment

5.

Investment agreements commonly state that investments made prior to their entry into force are covered by the investors’ substantive protection of the agreement.6 Where a treaty is silent on this issue, it is commonly understood that investments made before the treaty’s entry into force are covered investments as well,7 especially when the investment continued to exist past the date of entry into force.8 Some tribunals have however refused to follow this approach, positing that in the absence of explicit wording in the applicable treaty, investments acquired or made prior to the entry into force of the treaty are not protected.9

IV. Jurisdiction ratione temporis: timing of the dispute

A. Principle: non-retroactivity of treaties

6.

In the absence of express language to the contrary, and consistent with Article 28 of the Vienna Convention on the Law of Treaties and Article 13 of the Responsibility of States for Internationally Wrongful Acts, a treaty cannot apply to acts or facts that occurred prior to its entry into force.10

7.

By application of the principle of non-retroactivity and unless otherwise provided for in the relevant investment agreement:

  1. Tribunals have jurisdiction ratione temporis for disputes that arose after the treaty’s entry into force. The date on which the dispute arose must be determined objectively.11 See further Section IV.D below and Dispute existence, Section III.B.
  2. Tribunals’ jurisdiction does not extend ratione temporis to alleged breaches that took place prior to the making of an investment.12 This is also true for the continued effects of a violation that occurred prior to the making of the investment.13 However, previous litigation on the same issues and the fact that the dispute was foreseeable do not necessarily bar the tribunal’s jurisdiction,14 in the absence of bad faith.15

B. First qualification: continuous and composite acts

1. Continuous acts

8.

According to the ILC Draft Articles on the Responsibility of States for Internationally Wrongful Acts, a continuous wrongful act is an act of a State having a continuing character and breaching an international obligation.16

9.

Because continuous acts are legally materialized as a breach with the treaty’s entry into force, tribunals have jurisdiction ratione temporis for the acts continuing after this date.17 Events occurring before this date can be nevertheless considered for “purposes of understanding the background, the causes, or the scope of the violations of the BIT that occurred after the entry into force.”18

2. Composite acts

10.

Wrongful composite acts are in turn defined as a series of actions or omissions which in aggregate are wrongful.19 A composite breach extends over a period of time starting with the first act or omission and lasting for as long as these events are repeated and remain in non-conformity with the international obligation.20

11.

Composite acts are materialized as a breach when the last of the acts or omissions necessary to constitute a wrongful act under the treaty occurs. In this case, tribunals consider that events pre-dating the entry into force of the applicable treaty can be observed to determine:

  1. whether a breach has occurred post-entry into force,21
  2. the time when the State’s actions and omissions consummated the breach,22 or
  3. to offer factual background as to a breach.23 

At least one tribunal has gone further, holding that pre-entry into force acts converging towards the same wrongful breach, under certain specific circumstances, could fall within the tribunal’s jurisdiction.24

12.

Continuous and composite acts can trigger liability under a treaty even if the said acts started, or the first aggregated act occurred, prior to the entry into force of the treaty under which the tribunal can claim jurisdiction.25 However, the acts must continue or must be consummated after the entry into force of the treaty.26

3. Relationship between continuous and composite acts and time bars

13.

Where a treaty provides a time bar for bringing a claim, tribunals will be reluctant to entertain claims made on such a basis where it appears that the purpose for making such a claim is to circumvent the time bar of the treaty.27 Certain tribunals have upheld jurisdiction in a more generous manner.28 However, national courts place heightened scrutiny on such claims.29

C. Second qualification: provisional application of a treaty

14.

According to Article 25 of the Vienna Convention, contracting parties may agree to provisionally apply a treaty before it enters into force. This agreement can take many forms30 but tribunals have held that the intention to give provisional application is key.31 This has led Tribunals to retain jurisdiction where a party has signed, but not yet ratified a Treaty.32

15.

Additionally, tribunals have discussed whether legal security and transparency as enshrined in Article 18 of the Vienna Convention on the Law of Treaties commanded the provisional application of a treaty, adopting differing approaches, either in favour of taking the fact into account,33 or holding that the principle of good faith could not result to the retroactive application of a treaty.34 See further Provisional application of treaty.

D. Third qualification: disputes arising before the entry into force of a treaty

16.

Treaties may exclude, explicitly35 or implicitly,36 disputes that arise prior to their entry into force. Conversely, the intention of the contracting parties may be interpreted to allow the arbitration of these disputes.37

17.

Where tribunals could not find such an exclusion in the language of the treaty, they have generally applied general principles of international law and adopted a presumption of non-retroactivity of the treaty,38 even where whether a presumption that they could retain jurisdiction over the claims was discussed.39 This requires tribunals to differentiate the dispute(s) that arose prior to the entry into force of the treaty from those that arose afterwards.40 See further Dispute existence, Section III, B.

18.

Facts occurring before the entry into force of the treaty may, however, provide circumstantial evidence of a potential breach of the treaty.41

V. Extinctive prescription / time bar

19.

Extinctive prescription provides that a right can be lost, or a claim barred, when not exercised in a timely manner. This is usually expressly provided by a specific provision in the applicable treaty. See also Admissibility.

A. Explicit language on limitation periods in the applicable treaty

20.

Some treaties, such as the NAFTA and the USMCA for instance,42 subject claims to a certain time from the date on which the investor has or should have acquired knowledge a) of the alleged breach and b) that it had incurred loss or damage.43 Tribunals constituted pursuant to these agreements have held that the limitation period is clear and rigid44 but a few tribunals have suggested that it may be suspended in the presence of “unavoidable events”45 or renewed when there is a “continuing course of conduct."46 See Section IV.B above for more on continuing and composite acts.

21.

In the context of multiple claims, tribunals have taken care to distinguish between those that are time barred and those that are not,47 holding that the latter must be actionable “in [their] own right.”48 Similarly, investors’ claims against the continued enforcement of a measure already found to be in breach of treaty protection has been considered to be separate and distinct from the original claim against the said measure, resetting the date from which the time limitation runs.49

22.

Tribunals have generally50 held that claimants bear the burden of proving that their claims fall within the limitations period.51 However at least one tribunal has considered that the time bar objection is an affirmative defence, putting the onus of proof on the respondent instead.52

B. In the absence of explicit language on limitation periods in the applicable treaty

23.

Treaties can also be silent on that issue.53 When this is the case, a tribunal may use customary international law to settle the question.54 Tribunals will generally allow such claims, relying on evidence that they were not abandoned by the claimant.55

24.

In the context of investment arbitrations governed by international law, tribunals have held that international law applies even in the existence of a limitation period in domestic law.56

VI. Termination of treaty and withdrawal from ICSID

A. Termination of treaty

25.

Treaties usually include a so-called “sunset clauses" which governs the effects of the termination of a treaty by a contracting State.57 Such clauses extend the protections of the treaty to investments made before the termination or expiry of the treaty for an additional period of time, typically ranging from 5 years58 to 20 years.59

26.

Similarly, following the enactment of USMCA in replacement of NAFTA,60 prosecution of existing claims under NAFTA will continue unhindered, and claims arising from investments predating the termination of NAFTA will be available for settlement under NAFTA Chapter 11 for 3 years following termination of NAFTA, i.e. 1 July 2023.

27.

Finally, the mutual termination of intra-EU BITs raises specific issues. See further Termination of investment treaties. and Intra-EU claims as an objection to jurisdiction.

B. Withdrawal from ICSID

28.

Denunciation of the ICSID Convention presents a different, yet related issue. Tribunals have discussed whether withdrawal from ICSID voided a State’s consent to ICSID jurisdiction contained in a treaty (also known as jurisdiction ratione voluntatis). Discussing the effects of Articles 71 and 72 of the ICSID Convention, some tribunals have determined that they could still retain jurisdiction over claims brought after denunciation but before effective withdrawal,61 while others have declined jurisdiction on the basis that consent could not be perfected after a State had notified its withdrawal.62

29.

Finally, the issue of whether consent to ICSID jurisdiction could still be retained even after effective withdrawal from ICSID remains unsettled.63

Bibliography

Alexandrov, S.A., The ‘Baby Boom’ of Treaty-Based Arbitrations and the Jurisdiction of ICSID Tribunals: Shareholders as ‘Investors’ and Jurisdiction Ratione Temporis, The Law & Practice of International Courts and Tribunals, Vol. 4, Issue 1, 2005, pp. 19-59.

Blanchard, S., State Consent, Temporal Jurisdiction, and the Importation of Continuing Circumstances Analysis into International Investment Arbitration, Washington University Global Studies Review, Vol. 10, Issue 3, 2011, pp. 419-476.

Dalton, R.E., Provisional Application of Treaties, in Hollis, D.B. (ed.), The Oxford Guide to Treaties, Oxford University Press, 2012, pp. 220-247.

Douglas, Z, The International Law of Investment Claims, Cambridge University Press, 2009.

Gallus, N., The Temporal Scope of Investment Protection Treaties, British Institute of International and Comparative Law, 2009.

Heiskanen, V., Entretemps: Is There a Distinction Between Jurisdiction Ratione Temporis and Subtantive Protection Ratione Temporis, in Banifatemi, Y. (ed.), Jurisdiction in Investment Treaty Arbitration, IAI Series on International Arbitration No. 8, Juris Publishing, 2018, pp. 297- 320.

Rubins, N. and Love, B., The Scope of Application of International Investments Agreements: Ratione Temporis, in Bungenberg, M., Griebel, J., Hobe, S. and Reinisch, A. (eds.), International Investment Law: A Handbook, Nomos, 2015, pp. 481-494.

Vandevelde, K. J., Bilateral Investment Treaties: History, Policy, and Interpretation, Oxford University Press, 2010.

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