The Forum Selection Clause in Arbitration Under a Bilateral Investment Treaty* – Vol. 16 No. 2

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Author: Hans Smit**

Published: March 2007

Categories of Disputes
Investment Disputes

Description: The rapidly increasing volume of arbitration under bilateral investment treaties (“BITs”) is producing a commensurate number of new problems. Two of these were addressed in the January 29, 2004, decision of an ICSID panel in SGS Société Générale de Surveillance S.A. v. Republic of the Philippines. The first was whether an exclusive forum selection clause stood in the way of arbitration pursuant to the applicable BIT. The second was whether the ICSID panel should follow an earlier decision on the same issue rendered by another panel. The first problem, as the substance of the second indicates, was not novel. It had arisen in a number of earlier cases, and had received conflicting answers. However, all panels viewed it as a conflict between the forum selection clause and the BIT’s provision for arbitration that had to be resolved by determining whether the claims pursued were essentially contract claims or treaty claims.

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*Arbitral & Judicial Decisions
**Stanley H. Fuld Professor of Law, Columbia University.