Law Applicable to Foreign Investment Contracts: A Comparative Study
Amin Dawwas
Private Law - kilaw - kilaw
Abstract
Abstract In order to boost their national economy, countries, particularly developing countries, seek to regulate and encourage foreign investment. In response to foreign investors' concerns about the legislative climate of host States, the State usually abandons the exercise of its sovereignty rights, by agreeing to include clauses in the foreign investment contract on arbitration and the applicable law. Foreign investment disputes are usually settled by arbitration in accordance with the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States or in accordance with the 2013 UNCITRAL Arbitration Rules. In accordance with Article 42/1 of the Washington Convention and Article 35/1 of the UNCITRAL Arbitration Rules, the host state and the foreign investor may choose the law or legal rules applicable to the subject matter of the dispute. If the absence of such agreement, the arbitral tribunal, in accordance with Article 42/1 of the Washington Convention, ‘shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable’. In accordance with Article 35/1 of the UNCITRAL Arbitration Rules, the arbitral tribunal shall in this case ‘apply the law which it determines to be appropriate.’ This research aims to analyze each of the two texts to illustrate the similarities and differences between them, and compare them with the relevant text in Kuwaiti law. It also shows the impact of these texts on the settlement of foreign investment disputes through arbitration, and eventually, the extent to which each of these texts contributes to the promotion of foreign investment in the host country.
Keywords
Foreign Investment Contracts; International Commercial Arbitration; Applicable Law; Washington Convention; UNCITRAL Arbitration Rules; Kuwait Law
