Part III Guide to Key Jurisdictional Issues, 15 Breach of Treaty Claims and Breach of Contract Claims: When Can an International Tribunal Exercise Jurisdiction?
Stanimir A Alexandrov
From: Arbitration Under International Investment Agreements: A Guide to the Key Issues (2nd Edition)
Edited By: Katia Yannaca-Small
- Investment ‘in accordance with host state law’ — Investor — Contract claims
Foreign investors invest in a host state via a contract between the foreign investor and an entity or instrumentality of the host state. Disputes between investors and host states under investment treaties often arise out of breaches of these contracts. In such cases, international tribunals must assess whether the asserted claims rise to the level of a breach of a state’s international obligations. More than a decade ago, the decisions on jurisdiction in SGS v Pakistan and SGS v Philippines brought this issue into the spotlight. These decisions, often perceived as contradictory, deal with the jurisdiction of treaty-based tribunals over claims for a breach of contract. This chapter reviews the seeming confusion regarding the interplay between treaty claims and contract claims and discusses how to dispel any confusion.