Provisional Measures in Investor-State Arbitration: States Playing Games in Local Courts by Invoking the Trump Card (Police Powers)

Ylli Dautaj, Bruno Gustafsson


This paper outlines arbitral tribunals’ power to order provisional measures undertheauspicesofI.C.S.I.D.Arbitration;that is,investor-state arbitration. The scope of a tribunal’s power is cumbersome to discern, especially when there are possible interferences with state sovereignty. More recently, tribunals have ordered provisional measures to suspend a domestic criminal investigation or proceeding. Is this an infringement on a states sovereign prerogatives or a response to, for example, dilatory tactics by a rogue state? The crux of the issue is this: a state will always be in a position to utilize its prosecutorial powers in order to frustrate the arbitration by putting immense pressure on the investor, its employees, or its witnesses, in other words: “playing games” in local courts. In order to guarantee procedural integrity of the arbitration and, as a corollary, the legitimacy of investor-state arbitration in its entirety, the provisional measure is a practical tool that can be used effectively. On a similar vein, “sovereignty” should not force tribunals to tie their hands when serious interference with the arbitral procedure is making the procedure unfair at best,or a nullity at worst. However, legal text both empowers and constrains the tribunal. The I.C.S.I.D. Convention only allows a tribunal to “recommend” provisional measures. As seen in light of investor-state case law, in an informal (perhaps de facto) stare decisis context, a number of tribunals seem to have justified the ordering of provisional measures. In the shadow of this construction lurks the de-legitimizing of the entire investor-state arbitration system. At the same time, rogue sovereigns playing games in local courts have the same de-legitimizing effect.


Investment Treaty Arbitration; Interim Measures; Sovereign Immunity; Suspension of Criminal Procedures; Treaty Interpretation

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DOI: 10.6092/issn.2531-6133/9359


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