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The Use of Investor–State Arbitration under Bilateral Investment Treaties to Seek Relief for Breaches of WTO Law
1 Debevoise & Plimpton, New York. Email: gverhoosel{at}debevoise.com
This contribution advances the proposition that the development of a global network of Bilateral Investment Treaties (BITs) may increasingly offer foreign investors an opportunity directly to challenge breaches of WTO law and to seek relief in the form of cessation of the WTO-inconsistent measure and, when the measure can be shown to have proximately caused them injury, damages. Measures affecting intra-firm trade, the investments of foreign service suppliers, or the rights of intellectual property rights holders may, in certain circumstances, constitute breaches of a host State's obligations under both the WTO Agreement and the applicable BIT. When a foreign investor initiates investor – State arbitration under the applicable BIT to seek withdrawal of and/or damages for such measures, WTO law may arguably come into play in two – formally – distinct manners. First, WTO law may be applicable to the investment dispute. Second, WTO law may in any event provide important interpretative context for the regulatory treatment obligations of the BIT. In either case, the strongly held precept that private entities cannot directly invoke WTO law in the state courts of WTO Members and claim monetary damages for breaches of WTO law, cannot be replicated to BIT arbitrations without further qualification.