
Available in Russian
Author: Sofia Pimenova
DOI: 10.21128/2226-2059-2024-1-98-109
Keywords: investor-state arbitration; state-to-state arbitration; international investment agreements; reform of investment arbitration; jurisdiction
In this article the author examines the possibilities that have been opened up by the rise of state-to-state arbitration for the resolution of investment disputes. The author argues that state-to-state arbitration has been unjustifiably rarely used for the resolution of these disputes. This option for dispute resolution is provided by the majority of international investment agreements. An analysis of the usefulness of state-to-state arbitration rather than investor-state arbitration is especially relevant in view of the ongoing discussions within the UNCITRAL Working Group III: Investor-State Dispute Settlement Reform. More active use of state-to-state arbitration for the resolution of investment disputes would entail going “back to basics”, since the first bilateral investment agreements did not provide for investor-state arbitration. The latter mechanism of dispute resolution appeared later as an alternative to state-to-state arbitration. The specific reason for this was that it was up to the States to initiate proceedings by state-to-state arbitration. Such a situation did not favor the investor, who had to rely on the willingness of the State to conduct the proceedings on his behalf. In addition, the author notes that settlement of disputes by way of state-to-state arbitration prevents application of the rules of international treaties on the enforcement of arbitral awards (such as the New York Convention of 1958 and the Washington Convention of 1965). Nevertheless, even with such shortcomings, it seems that the States will begin to resort more actively to this mechanism of dispute resolution. As confirmation of this, the author refers to the arbitration proceedings initiated by Azerbaijan against Armenia in 2023 under the Energy Charter Treaty. Among the risks of the “revival” of state-to-state arbitration, however, is the likelihood of a conflict between the two mentioned dispute resolution mechanisms when they are used simultaneously within the framework of the same international treaty. Some scholars are inclined to believe that, in such situations, state-to-state arbitration is destructive and should not be applied at all. Others insist that the presence of two ways to resolve disputes provides opportunities for dialogue and gives States equal rights to foreign investors and greater control over the interpretation of investment treaties.
About the author: Sofia Pimenova – Candidate of Sciences (Ph.D.) in Law, International Law Department, Faculty of Law, Lomonosov Moscow State University, Moscow, Russia.
Citation: Pimenova S. (2024) Mezhgosudarstvennyy investitsionnyy arbitrazh: perspektivy i riski neochevidnogo sposoba razresheniya sporov [State-to-state investment treaty arbitration: potential and risks of an uncommon mechanism of dispute resolution]. Mezhdunarodnoe pravosudie, vol. 14, no. 1, pp. 98–109. (In Russian).
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