Bilateral investment treaty (BIT) awards

The doctrine of justiciability

The number of bilateral investment treaty (BIT) arbitrations has increased dramatically over the past few years, which is unsurprising when there are over 2,000 current BITs, each with its own arbitration clause. Section 67 of the Arbitration Act 1996 permits the court to review any determination by arbitrators as to their substantive jurisdiction in any arbitration whose seat is in England and Wales or Northern Ireland. It is a mandatory section of the Act, such that the parties may not contract out of its provisions.The Court of Appeal decision (Lord Phillips MR, Clarke and Mance LJJ) in Republic of Ecuador v Occidental Exploration and Production Company [2005] EWCA Civ 1116, affirming the decision of Aikens J at first instance, is believed to be the first English reported case concerning an arbitration award made pursuant to a BIT. In the course of its judgment the Court of Appeal had to consider the extent to which the English courts may consider a challenge to the jurisdiction of an award made by arbitrators pursuant to the BIT arbitration provisions, and in particular the application of the English law doctrine of ‘non-justiciability’. The case is discussed by Louis Flannery of Howes Percival.