Inter-State Arbitration

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Ecuador v. United States Inter-State Arbitration under a BIT: How to Interpret the Word “Interpretation”?

There is an inter-State arbitration pending between Ecuador and the United States under the Bilateral Investment Treaty (BIT) between those two countries (Treaty between United States of America and the Republic of Ecuador Concerning the Encouragement and Reciprocal Protection of Investment, 27 August 1993). The Ecuador v. US case , which was initiated in June 2011, is, as far as I am aware, a very very rare instance of inter-State arbitral proceedings under a BIT. As is well known, one of the main purposes of BITs is to give investors the right to bring claims against the host state of investment. This feature of BITs, and the vast number of such treaties, has meant that investor-State arbitrations under BITs have replaced diplomatic protection as the primary means of settling investment disputes. There have been hundreds of investor-State proceedings before arbitral tribunals.  However, BITs also contain compromissory clauses by which disputes concerning the interpretation or application of disputes under these treaties can be brought before arbitral tribunals established under the BIT. The only other inter-State BIT cases that I am aware of are the recent…

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