6 - The Contract-Treaty Distinction

Summary

Chapter 6 focusses on causes of action in investment arbitration, including the distinction between contract and treaty claims and the notion of ‘fundamental basis of the claim’. The chapter disputes the alleged independence between contract rights and obligations, on the one hand, and treaty rights and obligations, on the other. Tribunals need to recognize substantive overlaps between contract and treaty claims when addressing the substance of IIA claims. Thus, parallel local proceedings, all the provisions of the relevant contract (including forum selection clauses), and the conduct of both contractual parties are relevant factors in deciding the admissibility of treaty claims.