Protection of Investor's Contractual Rights Under Bilateral and Multilateral Investment Treaties

Abstract

This article evaluates the scope of protection provided under the provisions of investment treaties, in particular the rights of bondholders resulting from agreements concluded with organizational units or entities for which the State bears responsibility under international law. The article analyzes the rules of investment treaties, from which the investor could potentially derive a claim for compensation against the host country for non-performance of a contract. Firstly, these are the rules concerning the honoring of commitments under which the state ensures that it will perform all obligations (including contractual) to investors from another Contracting State. Secondly, the basis for the bringing of an action before the court might lie in the provisions concerning the jurisdiction of the court, providing that all disputes between the host country, and the investor of another Contracting State shall be settled before the arbitral tribunal, having regard to the provisions of the international law. Thirdly, it must be considered whether it is possible to rely on the MFN clause, which offers special treatment to the investor. Finally, special attention must be paid to the peculiar confluence of the grounds of responsibility, which involve the infringement of the material provision of the treaty in the case of non-performance of the contract by a state.

Keywords: PZU, arbitration, investment, Eureko, expropriation, BIT, investment treaty, MFN

JEL Classification: K33