The notion of a dispute in determining jurisdiction ratione temporis in international investment arbitration

Abstract

This article examines the inconsistent and often problematic role of the notion of a dispute in establishing jurisdiction ratione temporis in international investment arbitration. It argues that the principle of non-retroactivity in investment law applies to the timing of the state’s measures, not to the timing of the dispute. However, for treaties that do not explicitly exclude pre-existing disputes, tribunals often err by focusing on when the dispute arose to establish jurisdiction ratione temporis. This practice introduces a jurisdictional criterion not agreed upon by the contracting parties and misapplies the non-retroactivity principle. Conversely, for treaties that explicitly exclude pre-existing disputes from the scope of their application, the timing of the dispute is of critical importance. However, arbitral practice reveals a lack of a unified definition of a “dispute”. Analysis of key cases shows that tribunals apply inconsistent standards to determine when a dispute has arisen. Furthermore, in some cases, even after establishing jurisdiction over a post-treaty dispute, tribunals have applied the treaty retroactively to the pre-treaty measures. The article further analyses the complexities of alleged continuing breaches. For treaties that do not exclude the pre-existing disputes, the test is whether a post-treaty act constitutes an “independently actionable breach”. For treaties that explicitly exclude pre-existing disputes, the article critiques ambiguous tests like the “same subject matter” approach used in Lucchetti v. Peru, which allows states to avoid liability for post-treaty wrongful acts by linking them to older disputes. It concludes by advocating for a clearer analytical framework, proposing that tribunals should first identify an independently actionable breach and then determine when the dispute specific to that breach arose, thereby enhancing predictability and safeguarding investor rights.