Investment Treaty Arbitration - An Australian Perspective
![handle is hein.kluwer/jia0024 and id is 109 raw text is: Journal of International Arbitration 24(2): 103-128, 2007.
) 2007 Kluwer Law International. Printed in The Netherlands.
Investment Treaty Arbitration
An Australian Perspective
Peter J. TURNER,* Mark MANGAN** and Alex BAYKITCH***
Broadly speaking, investment treaties establish clear rules on the scope of investment protection and the
treatment that states must provide to foreign investment in their territories. In addition, they establish a frame-
work for the resolution of investment disputes through arbitration between the foreign investor and the state.
This article explores the scope of investment treaties, and disputes relating thereto, with particular reference to
Australia's investment treaty programme. This article is based on a series of presentations delivered by Freshfields
Bruckhaus Deringer and Blake Dawson Waldron in Perth, Melbourne, Sydney, and Brisbane over the period
November 17-22, 2006.
I. OVERVIEW OF INVESTMENT TREATY ARBITRATION
A bilateral investment treaty (BIT) is a treaty between two states in which each
assumes obligations in respect of investments made in their territory by the other's investors,
directly enforceable by an investor through international arbitration. The first BIT was
agreed in 1959 between Pakistan and Germany. The proliferation of BITs as a means of
promoting and protecting investments became increasingly accepted with the establish-
ment of the International Centre for the Settlement of Investment Disputes (ICSID),
which is connected to, but independent of, the World Bank under the 1965 Convention
on the Settlement of Investment Disputes between States and Nationals of other States
(the ICSID Convention).' Today, there are more than 2,500 investment treaties in
force, involving some 180 countries.2
In addition to BITs, a number of multilateral investment agreements also give
an investor a direct right of arbitration against the host state. These include the North
American Free Trade Agreement (NAFTA),3 the Association of South-East Asian Nations
* Partner, Freshfields Bruckhaus Deringer, Paris.
** Senior Associate, Freshfields Bruckhaus Deringer, Paris. Mark is admitted as a solicitor of the Supreme Court
of New South Wales and the Federal and High Courts ofAustralia.
*** Partner, Blake Dawson Waldron, Sydney. The authors gratefilly acknowledge the considerable help received
from Joanne Howie, Fiona Candy, and Jamsheed Peeroo of Freshfields Bruckhaus Deringer, Paris.
I Convention on the Settlement of Investment Disputes between States and Nationals of Other States,
Washington, March 18, 1965, T.I.A.S. 6090, 575 U.N.T.S.159 [hereinafter ICSID Convention]. The Convention
entered into force on October 14, 1966 when it had been ratified by 20 countries. 143 countries had ratified the
Convention as of April 10, 2006, including Australia, pursuant to the International Commercial Arbitration Act, 1974
<www.worldbank.org/icsid/basicdoc/intro.htm>.
2 United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2006, avail-
able at <wwwunctad.org/Templates/WebFlyer.asp?intItemlD=3968&lang=1>.
North American Free Trade Agreement, December 20, 1993, 32 I.L.M. 605 (1994).
Copyright 2007 by Kluwer Law International. All rights reserved
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