Application of MFN to Procedural Prerequisites to Arbitration

Sharmin, Tanjina

doi:10.1007/978-981-15-3730-1_5

Tanjina Sharmin³

Part of the book series: International Law and the Global South ((ILGS))

436 Accesses

Abstract

Many IIAs that have investor-state dispute settlement clauses contain various procedural prerequisites to arbitration. These procedural prerequisites raise legal issues. In particular, must claimants follow them before they can arbitrate, or can they bypass them? While some arbitral tribunals have used MFN clauses to bypass various procedural prerequisites, others have rejected the same. Consequently, there is a split within arbitral decisions on this issue. The present chapter aims to resolve whether MFN should be applied to bypass procedural prerequisites within IIAs. The chapter examines all 10 publicly available arbitral decisions that have allowed application of MFN to procedural prerequisites. Interestingly, except one, all of these decisions were against the developing host-states. This chapter also examines four publicly available arbitral decisions that have rejected this approach. Again, in all these four cases, the host-states involved were developing countries. The chapter compares, analyses and evaluates the reasoning given in the cases studied. This chapter argues that it would be more appropriate not to apply MFN to bypass procedural prerequisites unless this accords with the intention of the IIA parties.

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Notes

1.
For an example, see Agreement for the Promotion and Reciprocal Protection of Investments between the Kingdom of Spain and the Republic of Argentina (Argentina-Spain BIT), signed on 3 October 1991, (entry into force on 28 September 1992), Article X.
2.
Ibid.
3.
For example of the fork-in-the-road provision, see Treaty between the Argentine Republic and the Republic of Chile on Promotion and Reciprocal Protection of Investments (Argentina-Chile BIT), signed on 2 August 1991, (entry into force on 1 January 1995), Article X (3). The fork-in-the-road provisions generally allow a choice to be made between direct arbitration and litigation in the domestic forum. If a disputing party chooses direct arbitration, that still requires the party to meet a prerequisite before arbitration, the prerequisite being making of the choice. In that sense, the provisions can be categorised as procedural prerequisites.
4.
This author has identified the cases by an extensive research, and believes that they include all publicly available decided cases until 2018 in which MFN was applied to bypass procedural prerequisites to arbitration. This chapter does not review any pending case. It reviews cases in which the tribunals have rendered a decision. In most of the cases, Argentina was the respondent-host state which is a co-incidence, and may represent the fact that a large volume of investor-state arbitral proceedings were initiated against Argentina. For details on cases involving Argentina in general, see UNCTAD, Investment Policy Hub <http://investmentpolicyhub.unctad.org/>. The cases reviewed in Sect. 5.2 are as follows: Emilio Agustin Maffezini v the Kingdom of Spain (Maffezini v Spain), ICSID Case No. ARB/97/7, Decision of the Tribunal on Objections to Jurisdiction, dated 25 January; Siemens A.G. v The Argentine Republic (Siemens v Argentina), ICSID Case No. ARB/02/8, Decision on Jurisdiction, dated 3 August 2004; Hochtief AG v The Argentine Republic (Hochtief v Argentina), ICSID Case No. ARB/07/31, Decision on Jurisdiction, dated 24 October 2011; Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. v The Argentine Republic (Suez v Argentina), ICSID Case No. ARB/03/19, and AWG Group Ltd. v the Argentine Republic (AWG v Argentina), In the Arbitration under the Rules of UNCITRAL, Decisions on Jurisdiction dated 3 August 2006; National Grid PLC v The Argentine Republic (National Grid v Argentina), (UNCITRAL) Decision on Jurisdiction, 20 June 2006; Impergilo S.p.A v Argentina (Impergilo v Argentina), ICSID Case No ARB/09/1, Decision on Jurisdiction, dated 21 December, 2012; Camuzzi International S.A. v the Argentine Republic (Camuzzi v Argentina), ICSID Case No. ARB/3/2, Decision on Objections to Jurisdiction dated 11 May 2005; Gas Natural SDG, S.A. v. The Argentine Republic, ICSID Case No. ARB/03/10, Decision of the Tribunal on Preliminary Questions on Jurisdiction, dated 17 June 2005; Teinver S.A., Transportes de Cercanias S.A. and Autobuses Urbanos del Sur S.A. v The Argentine Republic (Teinver v Argentina), ICSID Case No. ARB/09/1, Decision on Jurisdiction, dated 21 December 2012; Telefonica S.A. v The Argentine Republic (Telefonica v Argentina), ICSID Case No. ARB/03/20, Decision of the Tribunal on Objection to Jurisdiction, dated 25 May 2006.
5.
This section reviews all publicly available cases decided until 2018 in which MFN failed to bypass procedural prerequisites to arbitration. The cases are as follows: Wintershall Aktiengesellschaft v the Argentine Republic (Wintershall v Argentina), ICSID Case No. ARB/04/14, Award, dated 8 December 2008; Daimler Financial Services AG v the Argentina Republic (Daimler v Argentina), ICSID Case No. ARB/05/1, Award on Jurisdiction, 22 August 2012); ICS Inspection and Control Services Limited (United Kingdom) v the Argentine Republic (ICS Inspection v Argentina), PCA Case No. 2010–9, Award on Jurisdiction, 10 February 2012; Kilic Insaat Ithalat Ihracat Sanayi Ve Ticaret Anonim Sirketi v Turkmenistan (Kilic v Turkmenistan), ICSID Case No. ARB/10/1, Award, dated 2 July 2013.
6.
For example, see, Hochtief v Argentina, above n 4, para 96; also see, Teinver v Argentina, above n 4.
7.
For example, see, Daimler v Argentina, above n 5, para 192; ICS Inspection v Argentina, above n 5, paras 242–260.
8.
Hochtief v Argentina, above n 4.
9.
Ibid.
10.
Hochtief v Argentina, above n 4.
11.
Treaty between the Federal Republic of Germany and the Republic of Argentina on Promotion and Reciprocal Protection of Investments (Argentina-Germany BIT), signed on 9 April 1991, (entry into force on 8 November 1993).
12.
Ibid., Article 10(1).
13.
The 1991 Argentina-Germany BIT, above n 11, Article 10(2).
14.
Ibid., Article, 10(3).
15.
The 1991 Argentina-Germany BIT, above n 11, Article 10(3).
16.
Hochtief v Argentina, above n 4, para 13.
17.
Ibid., para 14.
18.
Hochtief v Argentina, above n 4, para 15.
19.
Ibid., paras 35–37.
20.
Hochtief v Argentina, above n 4, para 37.
21.
Ibid., para 36.
22.
Hochtief v Argentina, above n 4, paras 54–55.
23.
For details on ejusdem generis rule, see, Chap. 3.
24.
Hochtief v Argentina, above n 4, para 66.
25.
Ibid., para 74.
26.
Ibid., para 88.
27.
Hochtief v Argentina, above n 4, para 96.
28.
Ibid., para 96.
29.
Teinver v Argentina, above n 4.
30.
Ibid.
31.
Teinver v Argentina, above n 4.
32.
Ibid. Paras 1–2.
33.
The 1991 Argentina-Spain BIT, above n 1.
34.
Teinver v Argentina, above n 4, para 131.
35.
Ibid., para 135.
36.
Teinver v Argentina, above n 4, paras 137–186.
37.
Ibid., para 150.
38.
Teinver v Argentina, above n 4, para 140.
39.
The basic BIT was originally drafted in Spanish. For translation, see Ibid., para 159.
40.
Teinver v Argentina, above n 4, para 160.
41.
UNCTAD, ‘Most Favoured-Nation Treatment,’ II UNCTAD Series on International Investment Agreements, UNCTAD/DIAE/IA/2010/1, dated 24 January 2011, at 66–67.
42.
Maffezini v Spain, above n 4; Suez v Argentina and AWG v Argentina, above n 4; Gas Natural v Argentina, above n 4; Wintershall v Argentina, above n 5.
43.
Impergilo v Argentina, above n 4; Hochtief v Argentina, above n 4; Abaclat and Others v Argentine Republic (Abaclat v Argentina) (Decision on Jurisdiction) (ICSID Arbitral Tribunal, Case No ARB/07/5, 4 August 2011); ICS Inspection v Argentina, above n 5 pages 8–13; Daimler v Argentina, above n 5.
44.
Teinver v Argentina, above n 4, para 169.
45.
Ibid., para 170.
46.
Salini Costruttori S.P, A. and Italsrade S.p.A. v The Hashemite Kingdom of Jordan (Salini v Jordan), ICSID Case No. ARB/02/13, Decision on Jurisdiction, 9 November 2004; Plama Consortium Limited v Republic of Bulgaria (Plama v Bulgaria), ICSID Case No. ARB/03/24, Decision on Jurisdiction, dated 8 February 2008; Telenor Mobile Communications A.S. v The Republic of Hungary (Telenor v Hungary), ICSID Case No. ARB/04/15, Award, 13 September 2006; Vladimir Berschader and Moise Berschader v The Russian Federation (Berschader v Russia), Arbitration Institute of the Stockholm Chamber of Commerce, Case No. 080/2004, Award dated 21 April 2006; TZA Yap Shum v Republic of Peru (TZA v Peru), ICSID Case No. ARB/07/6, Decision on Jurisdiction and Competence, 19 June 2009.
47.
Teinver v Argentina, above n 4, para 171.
48.
Ibid., para 172.
49.
Teinver v Argentina, above n 4, para 173.
50.
Ibid., para 174.
51.
Teinver v Argentina, above n 4, para 186.
52.
Ibid., Separate Opinion by Dr Kamal Hossain, dated 21 December 2012, paras 17–18, available at <https://www.italaw.com/sites/default/files/case-documents/italaw1092_0.pdf>.
53.
Telefonica v Argentina, above n 4.
54.
Ibid., para 11.
55.
Telefonica v Argentina, above n 4, para 13.
56.
Ibid., para 14; The 1991 Argentina-Spain BIT, above n 1.
57.
Telefonica v Argentina, above n 4, para 17.
58.
Ibid., para 40; The 1991 Argentina-Chile BIT, above n 3, Article X.
59.
Telefonica v Argentina, above n 4, para 40.
60.
Ibid.
61.
Telefonica v Argentina, above n 4, para 93.
62.
Ibid., para 93.
63.
Telefonica v Argentina, above n 4.
64.
Ibid., para 98.
65.
Telefonica v Argentina, above n 4, para 103.
66.
Ibid., page 61.
67.
Camuzzi v Argentina, above n 4.
68.
Ibid.
69.
Argentina-Belgium-Luxembourg Economic Union BIT, signed on 28 June 1990, (entry into force on 20 May 1994); Also see, Ibid., paras 1–4.
70.
Camuzzi v Argentina, above n 4, paras 1–4, Treaty between the United States of America and the Argentina Republic Concerning the Reciprocal Encouragement and Protection of Investments (Argentina-US BIT), signed on 14 November 1991, (entry into force on 20 October 1994).
71.
Ibid., Camuzzi v Argentina, above n 4, para 121.
72.
Wintershall v Argentina, above n 5.
73.
Ibid.
74.
Argentina-Germany BIT, above n 11.
75.
Wintershall v Argentina, above n 5, paras 108–109.
76.
Argentina-US BIT, above n 70.
77.
Wintershall v Argentina, above n 5, para 135.
78.
Ibid., para 67.
79.
The Vienna Convention on the Law of Treaties (VCLT), signed on 23 May 1969, United Nations Treaty Series, Vol. 1155–18232, <https://treaties.un.org>, Article 36(2).
80.
Wintershall v Argentina, above n 5, para 125.
81.
Ibid., para 116.
82.
Wintershall v Argentina, above n 5; International Centre for Settlement of Investment Dispute (ICSID) Convention, signed on 27 January 1966, (entry into force on 14 October 1966) icsid.worldbank.org.
83.
Ibid., 119.
84.
Wintershall v Argentina, above n 5, para 119.
85.
Ibid., para 125.
86.
Wintershall v Argentina, above n 5, para 126; The ILC, ‘Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries,’ 2001, II Yearbook of the International law Commission (part two), also available at <http://legal.un.org/ilc/texts/instruments/english/commentaries/9_6_2001.pdf>.
87.
Ibid., para 125.
88.
Wintershall v Argentina, above n 5, para 154.
89.
Ibid.
90.
Wintershall v Argentina, above n 5, para 169.
91.
Ibid.
92.
Wintershall v Argentina, above n 5, paras 173–175.
93.
Ibid.
94.
Daimler v Argentina, above n 5.
95.
Ibid.
96.
Daimler v Argentina, above n 5.
97.
The 1991 Argentina-Germany BIT, above n 11.
98.
Ibid.
99.
Daimler v Argentina, above n 5, para 1–2.
100.
Wintershall v Argentina, above n 5.
101.
The 1991 Argentina-Chile BIT, above n 3.
102.
Daimler v Argentina, above n 5, para 161.
103.
Ibid., paras 162–164.
104.
Daimler v Argentina, above n 5, para 168.
105.
Ibid.
106.
Daimler v Argentina, above n 5, para 168.
107.
Ibid., para 172.
108.
Daimler v Argentina, above n 5, para 192.
109.
Ibid.
110.
Daimler v Argentina, above n 5, paras 192–193.
111.
Ibid.
112.
Daimler v Argentina, above n 5, para 241.
113.
Kilic v Turkmenistan, above n 5.
114.
Ibid.; Agreement between the Republic of Turkey and Turkmenistan Concerning the Reciprocal Promotion and Protection of Investments (Turkey-Turkmenistan BIT), signed on 2 May 1992, (entry into force on 13 March 1997).
115.
Kilic v Turkmenistan, above n 5, paras 2.2.1–2.2.9.
116.
Ibid.
117.
Kilic v Turkmenistan, above n 5, para 2.2.9.
118.
Agreement between the Swiss Federal Council and the Government of Turkmenistan on the Promotion and Reciprocal Protection of Investments (Switzerland-Turkmenistan BIT), signed on 15 May 2008, (entry into force on 02 April 2009).
119.
Kilic v Turkmenistan, above n 5.
120.
Ibid., para 4.2.21.
121.
Kilic v Turkmenistan, above n 5, para 4.2.3.
122.
The ILC, Draft Articles, above n 86, Article 44.
123.
Kilic v Turkmenistan, above n 5, paras 4.3.3–4.3.4.
124.
Ibid., paras 4.3.5–4.3.7.
125.
Kilic v Turkmenistan, above n 5, paras 4.4.1–4.4.4.
126.
Ibid.
127.
Kilic v Turkmenistan, above n 5, para 6.1.3.
128.
Ibid., para 6.2.
129.
Kilic v Turkmenistan, above n 5, para 7.3.
130.
Ibid., para 7.3.9.
131.
Kilic v Turkmenistan, above n 5, para 7.4.3.
132.
The 1978 Rules of the ICJ Statute, (entry into force on 2005) Article 79, available at https://www.icj-cij.org/en/rules; I. Brownly, Principles of Public international laws (5th ed, 1998) 479–510; United Kingdom of Great Britain and Northern Ireland v Albania (Corfu Channel case), Preliminary Objections, ICJ Report 1948, 15.
133.
Ibid.
134.
The Corfu Channel Case, above n 132.
135.
Statute of the International Court of Justice, 33 UNTS 993, Article 38.
136.
Case Concerning Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v Russian Federation) Preliminary Objections, Judgment, 1 April 2011, available at: www.icj-cij.org.
137.
Ibid.
138.
Michael Waibel, ‘Investment Arbitration: Jurisdiction and Admissibility,’ in M Bungenberg, J, Griebel, S. Hobe and A Renisch (eds), International Investment Law, A Handbook (2015) 1212; Also see, Filippo Fontanelli, ‘Jurisdiction and Admissibility in Investment Arbitration. A View from the Bridge at the Practice,’ 16 (2017) The Law and Practice of International Courts and Tribunals, 3–20. Fontanelli argued that in investor-state arbitration, ‘jurisdiction and admissibility suffer from conceptual under-definition,’ (at p 6). Accordingly, in this area, the split between jurisdiction and admissibility is an elusive difference with unclear implications.
139.
For example, see, Pan American Energy LLC and BP Argentina Exploration Company v Argentine Republic, ICSID Case No. ARB/03/13, Decision on Preliminary Objections, 27 July 2006, para 54. The tribunal held that the jurisdiction-admissibility distinction is irrelevant. A contrary position was taken in Abaclat v Argentina, above n 43, para 248. The tribunal held that it was necessary to distinguish between jurisdiction and admissibility.
140.
August Reinisch, ‘Jurisdiction and Admissibility in International Investment Law,’ (2017) 16 The Law and Practice of International Courts and Tribunals, 21–43.
141.
Ibid.; Jan Paulsson, Jurisdiction and Admissibility in Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in Honour of Robert Briner (2005) 616 <www.iccbooks.com>.
142.
Waste Management Inc v Mexico, ICSID Case No. ARB (AF)/98/2, Dissenting Opinion of Keith Height, dated 2 June 2000, para 58.
143.
Micula v Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility, 24 September 2008, para 63; Also see, Reinisch, above n 140.
144.
Reneisch, Ibid., at 24.
145.
Erhas Dis Ticaret Ltd Sti, et al. v Republic of Turkmenistan, PCA Case No. 2013–27, Separate Declaration of Stanimir A. Alexandrov dated 19 May 2015, para 5.
146.
Georgia v Russia, above n 136.
147.
The 1965 International Convention on the Elimination of all Forms of Racial Discrimination, (entry into force on 4 January 1969), available at <https://www.ohchr.org/en/professionalinterest/pages/cerd.aspx>.
148.
Georgia v Russia, above n 136, para 131. The quotation was brought from the Congo v Rwanda (Armed Activities on the Territory of the Congo, New Application 2002, Jurisdiction and admissibility, Judgement) ICJ Reports 2006 p 39, para 88.
149.
Eda Cosar Demirkol, ‘Procedural Requirements in Dispute Settlement Provisions and Application of the MFN Clause in Recent Investment Disputes,’ (2015) 1 The Turkish Commercial Law Review Online, 1–8.
150.
Kilic v Turkmenistan, above n 5.
151.
Anatolie Stati, Gabriel Stati, Ascom Group SA and Terra Raf Trans Traiding Ltd v Kazakhstan, SCC Case No. V (116/2010), paras 814–830.
152.
Daimler v Argentina, above n 5.
153.
See, Reinisch, above n 140, at 32–33. Renisch has argued that in more recent decisions as opposed to the initial jurisprudence, arbitral tribunals are turning toward the view that domestic litigation requirement should be treated as jurisdictional conditions.
154.
Daimler v Argentina, above n 5; Wintershall v Argentina, above n 5.
155.
Tamara Larre, ‘Misguided Interferences—The Use of Expressio Unius to Interpret Tax Law,’ (2014) 51 Alberta Law Review 497.
156.
Ibid.; Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed (Markham, Ont: LexisNexis Canada,
2008) at 243; John Bell & George Engle, Cross: Statutory Interpretation, 3d ed (London: Butterworths, 1995) at 140; James J Brudney & Corey Ditslear, ‘Canons of Construction and the Elusive Quest for Neutral Reasoning,’ (2005) 58:1 Vanderbilt Law Review I at 1241; Lisa Spagnolo, ‘Iura Novit Curia and the CISG: Resolution of the Faux Procedural Black Hole,’ in I. Schwenzer & L. Spagnolo (eds), Towards Uniformity: the 2nd Annual MAA Schlechtriem CISG Conference (2011, Eleven International Publishing, The Hague)181–221, at 206.
1241.
157.
Suez and AWG v Argentina, above n 4; National Grid v Argentina, above n 4.
158.
Suez v Argentina, and AWG v Argentina, above n 4 (these cases were heard together).
159.
Ibid.
160.
Suez v Argentina, and AWG v Argentina, above n 4, para 21.
161.
Agreement between the Government of the Republic of France and the Government of the Republic of Argentina for the Encouragement and Protection of Mutual Investments (Argentina-France BIT), signed on 3 July 1991, (entry into force on 3 March 1993).
162.
The 1991 Argentina-Spain BIT, above n 1.
163.
Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Argentina for the Promotion and Protection of Investments (Argentina-UK BIT), signed on 11 December 1990, (entry into force on 19 February 1993).
164.
Suez v Argentina, and AWG v Argentina, above n 4, para 52.
165.
Ibid., para 54.
166.
Suez v Argentina, and AWG v Argentina, above n 4, para 55.
167.
Ibid., para 56.
168.
Suez v Argentina, and AWG v Argentina, above n 4, para 57.
169.
National Grid v Argentina, above n 4 (UNCITRAL) Decision on Jurisdiction, 20 June 2006.
170.
Ibid., paras 1–47.
171.
National Grid v Argentina, above n 4, paras 40–42.
172.
The 1990 Argentina-UK BIT, above n 90.
173.
National Grid v Argentina, above n 4, para 44; Treaty between the United States of America and the Argentina Republic Concerning the Reciprocal Encouragement and Protection of Investments (Argentina-US BIT), signed on 14 November 1991, (entry into force on 20 October 1994).
174.
Ibid., para 48.
175.
National Grid v Argentina, above n 4, para 52.
176.
Ibid., para 53.
177.
National Grid v Argentina, above n 4, para 54.
178.
Ibid., para 56.
179.
National Grid v Argentina, above n 4, para 55.
180.
Ibid., para 60.
181.
National Grid v Argentina, above n 4.
182.
Ibid., para 68.
183.
National Grid v Argentina, above n 4, para 80.
184.
Ibid., para 82.
185.
ICS Inspection v Argentina, above n 5.
186.
ICS Inspection v Argentina, above n 5.
187.
Ibid., pages 8–13.
188.
ICS Inspection v Argentina, above n 5.
189.
Ibid.
190.
The 1990 Argentina-UK BIT, above n 163.
191.
ICS Inspection v Argentina, above n 5.
192.
National Grid v Argentina, above n 4; Suez and AWG v Argentina, above n 4.
193.
ICS Inspection v Argentina, above n 5, para 68.
194.
Ibid., para 70.
195.
ICS Inspection v Argentina, above n 5, para 96.
196.
Ibid.
197.
ICS Inspection v Argentina, above n 5, para 96.
198.
Ibid., para 109.
199.
Jurgen Kurtz, ‘The MFN Standard and Foreign Investment: An Uneasy Fit?’ (2004) 5 Journal of World Investment and Trade 861.
200.
ICS Inspection v Argentina, above n 5, paras 246–247.
201.
Ibid., para 248.
202.
Georgia v Russian Federation, above n 136.
203.
ICS Inspection v Argentina, above n 5, para 250.
204.
United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration 1985, adopted by the UNCITRAL, United Nations www.uncitral.org, Article 15(1) of the UNCITRAL Arbitration Rules; Also see, Ibid., para 253.
205.
ICS Inspection v Argentina, above n 5, para 255.
206.
Ibid., para 256.
207.
ICS Inspection v Argentina, above n 5.
208.
Ibid., para 260; Paulsson, above n 141.
209.
ICS Inspection v Argentina, above n 5, para 273.
210.
Renta 4 S.V.S.A, Ahorro Corporación Emergentes F.I., Ahorro Corporación Eurofondo F.I., Rovime Inversiones SICAV S.A., Quasar de Valors SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. v The Russian Federation (Renta4 v Russia), SCC Case No. 24/2007, Award, dated 20 July 2012.
211.
Ibid., Award on Preliminary Objections, dated 20 March 2009, para 93.
212.
ICS Inspection v Argentina, above n 5, para 313.
213.
The 1969 VCLT, above n 79, Article 31.
214.
Hamilton Willcox, ‘Exclusio Alterius as a Refuge,’ (1886) 2(44) The Columbia Jurist, 523–524; Clifton Williams, ‘Expressio Unius Est Exclusio Alterius,’ (1931) XV Marquette Law Review No. 4, 191–196.
215.
Spagnolo, above n 156, at 206; Spagnolo referred to the observation in, Ste Ceramique Culinaire de France v Ste Musgrave Ltd, Court de Cassation, France, 17 December 1996, available at <http://cisg3.law.pace.edu/cases/950926f1.html>.
216.
Ibid.
217.
Implications of extending MFN to procedural and jurisdictional issues are discussed in the next chapter.
218.
For example, Maffezini v Spain, above n 4.
219.
Ibid.
220.
Maffezini v Spain, above n 4.
221.
Ibid.
222.
Maffezini v Spain, above n 4, para 1.
223.
The 1991 Argentina-Spain BIT, above n 1.
224.
Agreement between the Republic of Chile and the Kingdom of Spain for Promotion and Reciprocal Protection of Investments (Chile-Spain BIT).
225.
Maffezini v Spain, above n 4, para 38.
226.
The 1991 Argentina-Spain BIT, above n 1, Article X(1).
227.
Ibid., Article X(2).
228.
The 1991 Argentina-Spain BIT, above n 1, Article X(2).
229.
Ibid.
230.
Maffezini v Spain, above n 4, para 20.
231.
Ibid., para 20.
232.
Maffezini v Spain, above n 4, para 20.
233.
Ibid., para 21; ICSID Convention, above n 82.
234.
ICSID Convention, Ibid.
235.
Maffezini v Spain, above n 4, para 28.
236.
Ibid.
237.
Maffezini v Spain, above n 4, 35.
238.
Ibid., para 36.
239.
Maffezini v Spain, above n 4, paras 41–42.
240.
Ibid., 53.
241.
Maffezini v Spain, above n 4, para 54.
242.
Ibid., para 63.
243.
Maffezini v Spain, above n 4, para 63.
244.
Ibid.
245.
Maffezini v Spain, above n 4, para 63.
246.
Ibid.
247.
Maffezini v Spain, above n 4.
248.
Ibid., para 63.
249.
The tribunal in ICS Inspection v Argentina, above n 5, took a different view on this as disused earlier.
250.
Siemens v Argentina, above n 4.
251.
Ibid.
252.
Siemens v Argentina, above n 4, paras 23–27.
253.
Argentina-Germany BIT, above n 11.
254.
Argentina-Chile BIT, above n 3.
255.
Siemens v Argentina, above n 4, para 32.
256.
Ibid.
257.
The 1991 Argentina-Germany BIT, above n 11.
258.
Ibid, Article 3(1).
259.
The 1991 Argentina-Germany BIT, above n 11, Article 3(2).
260.
Siemens v Argentina, above n 4, para 83.
261.
Ibid., para 88.
262.
Siemens v Argentina, above n 4.
263.
Ibid., para 36.
264.
Siemens v Argentina, above n 4, paras 37–38.
265.
VCLT, above n 79.
266.
Siemens v Argentina, above n 4, para 44.
267.
Ibid., para 46.
268.
Siemens v Argentina, above n 4.
269.
Ibid., para 47.
270.
Anglo-Iranian Oil Co. (United Kingdom v Iran) (Preliminary Objection) [1952] ICJ Rep 93 at 109; Case Concerning Rights of Nationals of the United States of America in Morocco (France v United States) (Judgment of 27 August 1952) ICJ Rep [1952], 176. For the overview of these cases, see, Chap. 1, Section II.
271.
The Ambatielos Claim (Greece, United Kingdom of Great Britain and Northern Ireland) [1955] XII Reports of International Arbitral Awards 83–153.
272.
Ibid.
273.
Siemens v Argentina, above n 4.
274.
Ibid., para 51.
275.
Siemens v Argentina, above n 4, para 51.
276.
Ibid.
277.
Siemens v Argentina, above n 4, para 58.
278.
Ibid., para 81.
279.
Siemens v Argentina, above n 4, para 85.
280.
Ibid., para 104.
281.
Maffezini v Spain, above n 4.
282.
Interhandel (Switzerland v the US), (Preliminary Objections, 1959 ICJ Report 6 at 27 (21 March) <http://www.icj-cjj.org/docket/files>; Martin Dietrich Brauch, Exhaustion of Local Remedies in International Investment Law (IISD Best Practices Series-January 2017) (International Institute for Sustainable Development, January 2017) 2.
283.
Ibid.
284.
Ambiente Uffcio S.P.A. v The Argentine Republic, ICSID Case No. Arb/08/9, Decision on Jurisdiction and Admissibility, dated 8 February 2013, para 602.
285.
Ibid., para 604.
286.
Maffezni v Spain, above n 4; Siemens v Argentina, above n 4.
287.
ILC, Draft Articles on Responsibility of States, above n 86, Article 44 provides as follows:

Admissibility of claims

The responsibility of a State may not be invoked if:

(a) the claim is not brought in accordance with any applicable rule relating to the nationality of claims;

(b) the claim is one to which the rule of exhaustion of local remedies applies and any available and effective local remedy has not been exhausted (emphasis added).
288.
ILC, Draft Articles on Diplomatic Protection (2006), Vol. II, Part 2, Yearbook of the International law, Articles 14, and 15.
289.
Ibid.
290.
Brauch, above n 282, at 3.
291.
Christoph Schreuer, ‘Calvos Grand Children: The Return of Local Remedies in Investment Arbitration,’ (2005) 4 Law and Practice of International Courts and Tribunals 1 at 3. Schreuer has commented as follows:

The old rule of exhaustion of local remedies has been largely dispensed with in the context of investment arbitration but it keeps haunting us in other legal disguises…The first such phenomenon is the requirement, contained in some BITs that domestic remedies must be utilized for a certain period of time before international arbitration. Of course, this is not a requirement to exhaust local remedies. The claimant is free to turn to international arbitration once the time has elapsed.
292.
Anastasios Gourgourinis, ‘Lex Specialis in WTO and Investment Protection Law,’ (2010) 53 German Yearbook of International law, 579.
293.
Ibid.
294.
Statute of the International Court of Justice, above n 135, Article 38; Also see, Bing Bing Jia, ‘The Relations between Treaties and Custom,’ (2010) 9 Chinese Journal of International law 81. Bing Jia has argued that the separateness of treaties and custom at times may seem blurred ‘but shall always be maintained.’
295.
Bojan Milisavljevic, Bojana Chuckovic, ‘Identification of Custom in International law,’ (2014) Annals of the Faculty of Law in Belgrade—International Edition, 31–51.
296.
See, the 1969 VCLT, above n 79, preamble where it is recognised that sovereign states by free consent may execute treaties, and may agree on the treaty provisions. The VCLT preamble has recognised the consensual nature of the treaties and their ever-increasing importance as a source of international law.
297.
Both cases were decided by ICSID tribunals.
298.
ICSID Convention, above n 82.
299.
See, Chaps. 2 and 3 for more details.
300.
Impergilo v Argentina, above n 4.
301.
Ibid.
302.
Agreement between the Italian Republic and the Argentina Republic on Promotion and Protection of Investments (Argentina-Italy BIT), signed on 22 May 1990, (entry into force on 14 October 1993).
303.
Impergilo v Argentina, above n 4, paras 1–48.
304.
Ibid.
305.
Impergilo v Argentina, above n 4, para 12.
306.
Ibid.
307.
Impergilo v Argentina, above n 4, para 57.
308.
Ibid.
309.
Impergilo v Argentina, above n 4, para 59.
310.
Ibid.
311.
Impergilo v Argentina, above n 4, para 99. The majority decision was accompanied by a dissenting opinion which will be discussed shortly.
312.
Ibid, para 100.
313.
Impergilo v Argentina, above n 4, the Dissenting Opinion by Arbitrator Brigitte Stern, available at <https://www.italaw.com/sites/default/files/case-documents/ita0420.pdf>.
314.
Ibid, para 47.
315.
The Dissenting Opinion by Stern, above n 313, para 5.
316.
Ibid.
317.
Impergilo v Argetnina, above n 4, Decision of the Annulment Committee, 24 January 2014, available at <https://www.italaw.com/sites/default/files/case-documents/italaw3044.pdf>, para 191.
318.
In the Maffezini v Spain, Suez and AWG v Argentina, Impergilo v Argentina, Camuzzi v Argentina, and in Gas Natural v Argentina, above n 4.
319.
For details, see Chap. 2.
320.
See Chap. 3.
321.
Ibid.
322.
See, Maffezini v Spain, above n 4, as an illustration of the application of this type of MFN clause to procedural prerequisites.
323.
For example, see the basic BIT MFN in Siemens v Argentina, above n 4; for more details on the differences between different types of MFN clauses, see, Chap. 3.
324.
For example, see, the basic BIT MFN clause in the Hochtief v Argentina case, above n 4.
325.
For example, see, the basic BIT MFN clause in Maffezini v Spain, above n 4.
326.
For example, Ickale Insaat Limited Sirketi v Turkmenistan (Ickale v Turkmenistan), ICSID Case No. ARB/10/24, Award, dated 8 March 2016.
327.
Ejusdem generis requires that MFN clauses would extend to matters similar to those explicitly referred in the clause between investors in the same situation. For more on the application of ejusdem generis for interpreting MFN, see, The ILC, ‘Draft Articles on Most Favoured Nation Clause 1978’, II Yearbook of the International law Commission (1978), 24 at Articles 8–10.
328.
See, Chap. 4.
329.
For example, see the basic BIT dispute settlement clause that was involved in Maffezini v Spain, above n 4. In the Maffezini, the procedural prerequisite was drafted with ‘shall’; also see, the basic BIT dispute settlement clause involved in Hochtief v Argentina, above n 4; also see, Wintershall v Argentina, above n 5.
330.
For example, see the basic BIT dispute settlement clause involved in Impergilo v Argentina, above n 4, the procedural prerequisite was drafted with ‘may.’
331.
Ibid.
332.
For example, see, Hochtief v Argentina, above n 4. The tribunal observed that the domestic litigation requirement was perfunctory and insubstantial.
333.
For example, in Maffezini v Spain, above n 4, Argentina argued that given the potential overriding effect of IIA MFN clauses, they should be interpreted by the ejusdem generis principle which purports to limit the application of the clause to matters similar to those specifically contemplated by the clause. The 1978 Draft Articles on MFN by ILC, above n 327 also provides for the application of ejusdem generis given the special nature of MFN clauses.
334.
For example, see, National Grid v Argentina, above n 4, para 80.
335.
Teinver v Argentina, above n 4.
336.
See, Siemens v Argentina, above n 4, para 69; Suez and AWG v Argentina, above n 4, para 58–59.
337.
Ibid.
338.
The 1969 VCLT, above n 79, Arts 31 and 32 requires treaties to be interpreted in good faith.
339.
Hochtief v Argentina, above n 4, paras 35–37.
340.
Gas Natural v Argentina, above n 4.
341.
Ibid, para 1; the 1991 Argentina-Spain BIT, above n 1.
342.
Treaty between United States of America and the Argentine Republic Concerning the Reciprocal Encouragement and Protection of Investments (US-Argentina BIT), signed on 14 November 1991, (entry into force on 20 October 1994).
343.
Gas Natural v Argentina, above n 4, para 31.
344.
Ibid, para 31.
345.
The 1969 VCLT, above n 79, Article 31.
346.
Wintershall v Argentina, above n 5, para 154.
347.
Ibid.
348.
Ickale v Turkmenistan, above n 326, paras 328–329.
349.
Ibid, paras 321–329.
350.
This issue was discussed in Chap. 4; and in Chap. 2 (evolution). For the definition of multi-lateralisation by MFN, see, Chap. 4.
351.
Daimler v Argentina, above n 5, paras 162–168.
352.
See, Chap. 2; and Chap. 7 (conclusion). Chapter 7 demonstrates that there is evidence to suggest a number of countries appeared to have been surprised by arbitral decisions taking this approach and have since undertaken reforms to curb this.
353.
For example, see, Suez v Argentina, above n 4; National Grid v Argentina, above n 4.
354.
Camuzzi v Argentina, above n 4.

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Tanjina Sharmin

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Sharmin, T. (2020). Application of MFN to Procedural Prerequisites to Arbitration. In: Application of Most-Favoured-Nation Clauses by Investor-State Arbitral Tribunals. International Law and the Global South. Springer, Singapore. https://doi.org/10.1007/978-981-15-3730-1_5

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