The Effect of "Fork in the Road" and on Jurisdiction of Investment Treaty Arbitral Tribunal in Foreign Investment Disputes

Abstract

Fork in the road clauses and waiver clauses in investment treaties are supposed to minimize the number of parallel proceedings in foreign investment disputes. While, Fork in the road clauses preclude investors from further litigation or arbitration once the first dispute settlement mechanism is triggered, in waiver clauses, domestic litigation can be followed by treaty arbitration regarding the same dispute. In waiver clause, the foreign investor may recourse to treaty arbitration only if they waive their rights to adjudicate their claim before national and international litigation and arbitration (contract based or treaty based claims). It can be seen that in the application of the waiver clauses in some of the leading cases, grounds for distinguishing between treaty violation from contract violation in the function of waiver clause is not predicted; this approach is desirable. When it comes to the application of the fork in the road clause, investment arbitration precedent shows that identical cause of action is prerequisite for its function. This interpretation severely curtails the function of the fork in the road clause and is criticized in present article

Keywords

• international investment arbitration
• jurisdiction of arbitral tribunal
• jurisdictional conflicts in arbitration
• investment treaty arbitration
• parallel proceedings