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Dispute Resolution Mechanisms for Investment Disputes under an Agreement (Treaty)

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Overview

The dispute resolution mechanisms outlined in this document provide a framework for resolving investment disputes between two parties under an agreement, also known as a Treaty. The main provisions of the dispute resolution procedures are outlined below.

Article VII: Dispute Resolution Procedures

1. Consultation and Negotiation

  • Initial consultation and negotiation shall be undertaken by the parties to resolve any disputes arising from the interpretation or application of the Treaty.
  • This process is a pre-requisite for arbitration and is expected to be conducted in good faith.

2. Arbitration Options

  • Arbitration may be initiated at the request of either party, subject to the written consent of both parties.
  • The following arbitration options are available:
    • ICSID (International Centre for Settlement of Investment Disputes): ICSID is an international organization that provides a forum for resolving investment disputes between states and foreign investors.
    • Additional Facility of the Centre: This facility allows for the use of ICSID’s arbitration rules in non-ICSID cases.
    • UNCITRAL (United Nations Commission on International Trade Law) Rules: UNCITRAL is an international body that provides model laws and dispute resolution procedures for international trade and investment disputes.
    • Other Arbitration Institutions or Rules: The parties may agree to use other arbitration institutions or rules, subject to mutual consent.
  • A written consent from both parties is required before arbitration can proceed.

4. Arbitral Award

  • The arbitral award shall be final and binding on the parties.
  • The award must be carried out without delay in each party’s territory.

Article VIII: Dispute Resolution between Parties Concerning Treaty Interpretation or Application

  • In case of disputes concerning the interpretation or application of the Treaty, the parties may submit to an arbitral tribunal for a binding decision under international law.
  • The UNCITRAL arbitration rules shall govern unless otherwise agreed upon by the parties.

Summary

In summary, this document outlines the procedures for resolving investment disputes between two parties under an agreement (Treaty), including:

  1. Initial consultation and negotiation
  2. Arbitration options (ICSID, Additional Facility, UNCITRAL, or other institutions/agreements)
  3. Written consent required for arbitration
  4. Final and binding arbitral awards that must be carried out without delay in each party’s territory