October 11, 2017

Middle Eastern investors as claimants in investment treaty arbitrations

Investment arbitration is not unknown in the Middle East. For more than a decade, investors from this region have been acting as claimants in investment arbitration cases. Middle Eastern states do not share the weariness with bilateral investment treaties (BITs) and investor-state arbitration that is found in other parts of the world, and continue to conclude new investment treaties. This article will discuss key cases involving investors from the Middle East against the background of investment treaty trends in the region.

Investment treaty arbitrations frequently take place as a result of events that lead to changes in the geopolitical landscape. For example, the political changes in Eastern Europe and their aftermath gave rise to treaty disputes for many years, and the proceedings commenced against South American states over recent years are testament to the political situation in that region. The MENA region—perhaps surprisingly given the recent political developments, and not including Egypt—is generally not a focal point of investment treaty disputes. And while academic studies regularly assess which Middle Eastern states have been respondents in these proceedings, it has not often been analysed how Middle Eastern investors feature as claimants in investment treaty arbitrations.

As will be seen, it would be incorrect, however, to assume that Middle Eastern investors do not act as claimants in investment treaty arbitrations. To date, they are known to have done so in approximately twenty cases, relying on investment treaties concluded by states in the region. Those cases came from various sectors and were directed against various states. Interestingly, many of the respondents were MENA states, but only rarely did the cases relate to events in the Arab Spring.

This article will discuss key cases involving investors from the Middle East against the background of investment treaty trends in the region. For the sake of completeness, it should be pointed out that in addition to the large number of bilateral investment agreements (BITs), two multilateral investment agreements have been concluded by the states in the region: the Unified Agreement for the Investment of Arab Capital in the Arab States, signed in 1980, and the Agreement for Promotion, Protection and Guarantee of Investments among the Member States of the Organisation of the Islamic Conference, signed in 1981.

Please contact Anne K. Hoffmann for the full article. 

This article has been published in the fifth issue of the BCDR International Arbitration Review: BCDR International Arbitration Review 3, no. 2 (2016).