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5 J. World Investment & Trade 231 (2004)
Travelling the BIT Route: Of Waiting Periods, Umbrella Clauses and Forks in the Road

handle is hein.journals/jworldit5 and id is 231 raw text is: Travelling the BIT Route

Of Waiting Periods, Umbrella Clauses and Forks in the Road
Christoph SCHREUER*
I.   INTRODUCTION
In recent years, the majority of cases in investment arbitration have been based on
bilateral investment treaties (BITs). These treaties typically provide for investor-State
arbitration by making an offer of consent to arbitration to eligible investors. Consent is
perfected upon the acceptance of that offer by the investor, often simply through the
institution of proceedings.'
The provisions in BITs for investor-State arbitration are by no means uniform. Most
of them refer to the International Centre for Settlement of Investment Disputes (ICSID).
Often, the ICSID Additional Facility, the United Nations Commission on International
Trade Law (UNCITRAL) or other forms of arbitration are offered in the alternative.
The BITs also define the parameters for the activities of tribunals in investor-State
arbitration. Jurisdiction may be subject to certain procedural requirements. For instance,
a claimant may be required to attempt to reach an amicable settlement for a certain
period of time. The competence of arbitral tribunals may depend on proceedings in the
host State's domestic courts. For instance, the BIT may require the exhaustion of local
remedies; or it may require the investor to choose between domestic courts and
international arbitration.
The subject-matter jurisdiction of tribunals also varies. It may be described
narrowly or more widely. For instance, jurisdiction may be limited to claims alleging a
violation of the BIT itself or it may extend to investment disputes in general.
Three typical BIT clauses relating to the activities of arbitral tribunals in
investor-State arbitration will be examined in this article. The first relates to waiting
periods that investors must observe before instituting proceedings. The second requires
investors to choose between litigation in domestic courts and international arbitration
with the effect that once that choice has been made it becomes final. The third relates
to clauses in BITS that put undertakings made by host States vis-a-vis investors under the
BITS' protective umbrella.
* Professor of International Law, University of Vienna, Austria.
The author may be contacted at: <christoph.schreuer@univie.ac.at>.
I For a description ofthis process, seeJ. Paulsson, Arbitration Without Privity, 10 Icsir Rev.-F.I.L.J. 232 (1995).
This method for establishing jurisdiction was first accepted in AAPL v. Sri Lanka, Award, 27 June 1990, 4 ICSID
Reports 246, at 250-251. It has since been followed in numerous cases.

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