State-to-State Investment Treaty Arbitration and the Interplay with Investor-State Arbitration Under the Same Treaty

This article is devoted to the overlooked (and potentially useful) prospect of bringing state-to-state arbitration claims under bilateral investment treaties (BITs), and the interaction between interstate arbitration and investor-state arbitration under the same treaty. The interplay between the two proceedings raises important questions that touch upon the architecture of the investment dispute settlement system: Is interstate arbitration under BITs available for purposes of interpretive disputes not directly connected with the application of substantive treaty standards? Is it available for purposes of implementing state responsibility (ie for purposes of diplomatic protection)? What is the legal effect of a 'binding' state-to-state award on treaty interpretation? How should interstate and investor-state proceedings be coordinated? To address these questions, Section 1 discusses the nature and scope of BIT interstate arbitration clauses, with attention to the meaning of 'dispute', and to the permissibility of bringing interpretive claims and diplomatic protection claims under the BIT's interstate arbitration clause. Section 2 discusses the coordination between interstate and investor-state proceedings, addressing the interplay between BIT diplomatic protection claims and interpretive claims vis-a-vis investor-state claims arising under the same treaty.