An analysis of how Arbitration Tribunals deal with the Phenomenon of Treaty Shopping in International Investment Arbitrations under the ICSID Arbitration Convention

ABDOLLAHI, MOHAMMAD JAVAD; Mirlohi, Nages Sadat

doi:10.48300/jlr.2025.501619.2861

An analysis of how Arbitration Tribunals deal with the Phenomenon of Treaty Shopping in International Investment Arbitrations under the ICSID Arbitration Convention

Articles in Press

Document Type : Original Article

Authors

MOHAMMAD JAVAD ABDOLLAHI ¹

Nages sadat Mirlohi ²

¹ Department of Law, Khomenishahr Branch, Islamic Azad University, Khomeinishahr, Iran.

² M.A in Law, Department of Law, Khomeinishahr Branch, Islamic Azad University, Isfahan, Iran.

10.48300/jlr.2025.501619.2861

Abstract

Under the ICSID Convention, the abstract treaty shopping or the option treaty has become one of the most controversial issues in the field of international investment arbitration. By shopping the treaty in some cases, the petitioners may be trying to use a bilateral treaty that is not covered by its privileges under normal conditions. In response to the key question of whether the act of shopping a treaty is an illegal act in nature and how the arbitration procedure has dealt with examples of shopping a treaty, the authors, using the library method and note-taking tools, have analyzed numerous cases in the territory International arbitration under the ICSID Convention. In this regard, the authors, while explaining the concept of treaty shopping and analyzing its inherent legitimacy, have examined the element of as an important requirement in cases related to treaty shopping, and have analyzed the different positions of arbitral tribunals in dealing with the phenomenon of treaty shopping from different aspects. The material presented in this research shows that, in all cases, the act of buying a contract by the arbitration courts, especially in situations where "the text of the bilateral contract", the action of the petitioner is considered permissible, is not considered as an illegal phenomenon and For this reason, the phenomenon of treaty selection should be analyzed and evaluated in accordance with the conditions of each case.

Keywords

Treaty shopping

International Investment Arbitration

Investor

Host state

Good faith