Abstract

MARTINEZ, Félix Antolín. Re-thinking the requirement of making an investment in accordance with domestic laws as a substantive right and a cause of action for host states under the BITs. Iuris Dictio [online]. 2018, n.22, pp.101-114. ISSN 2528-7834.  https://doi.org/10.18272/iu.v22i22.1188.

This paper challenges one of the most traditional notions in International Investment Arbitration, which is that host States do not possess any substantive rights under the BIT’s framework. This work’s thesis is that the current BIT framework actually grants the host State a substantive right, and as a result, a cause of action in the investment arbitration system. This right emanates from the requirement articulated in the BIT that the investment be in accordance with the host State’s law. The paper explains that there is a line of both BIT and ICSID cases holding that the requirement of compliance with the host State’s laws is autonomous, and that this autonomy imports a substantive right for the host States grounded solely in the BITs. This idea is also supported by the spirit and objectives of both the ICSID Convention and the BITs.

Keywords : Investment; Host State Law; Substantive Right; Investment Arbitration; ICSID; BIT.

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