Investment treaty protection in Kuwait: an evolving landscape

1 Leonardo Carpentieri

Law - Law - University Panthéon-Assas (Paris II)

Abstract

Abstract for Paper on Third Theme: Foreign investment, national laws and international agreements By Dr. Leonardo Carpentieri Kuwait has signed 90 bilateral investment treaties (BITs) with other countries for the reciprocal promotion and protection of investments. Some of these treaties have been terminated, some are not yet in force, but the majority of them are valid and binding. This network of treaties provides a wide array of protections for foreign investors wishing to enter the Kuwaiti market, invest in the country and contribute to the development of its economy and infrastructure projects. In addition to the substantive provisions contained in the treaties mentioned, Kuwait is also a party to the New York Convention and to the ICSID Convention. Membership of these Conventions offer further comfort to incoming international operators, especially as to the various dispute resolution and enforcement mechanisms available should investors wish to bring claims against the State. The investment protections available under BITs ratified by Kuwait must be viewed in conjunction with additional protections that are available under local legislation. In this respect, and in line with the modernization of legislation in Kuwait, in 2013 the KFIB and government officials sought to revise the Foreign Direct Investment Law of 2001 after addressing various concerns expressed by foreign investors. A New Foreign Direct Investment Law was passed in June 2013 (Law No. 116 of 2013). The objective of the new law was to encourage more direct investment in Kuwait and make it much easier for investors to obtain a license to operate in the country. My paper will provide a comparative overview of the principal procedural and substantive investment protections that can be found both in Kuwaiti BITs and under local legislation, with particular reference to the absence of a free-standing Kuwaiti arbitration law, and to how this may appear as an impediment to more substantial incoming investment. In Kuwait, arbitrations are indeed governed by the Procedures Law or Optional Arbitration in the Code of Civil and Commercial Procedure (Law No. 38 of 1980), which contains a chapter on arbitration (Chapter 12, articles 173 to 188) and Judicial Arbitration in Civil and Commercial Matters (Law No. 11 of 1995 as amended by Law No. 102 of 2013). Importantly, neither of these laws conforms to the UNCITRAL Model Law.

Keywords

BIT, investment treaty protection, expropriation, arbitration, investment disputes, dispute resolution, foreign direct investment, infrastructure