Article

The Fork in the Road Revisited: An Attempt to Overcome the Clash Between Formalistic and Pragmatic Approaches

Author: Markus A. Petsche (Department of Legal Studies of Central European University)

  • The Fork in the Road Revisited: An Attempt to Overcome the Clash Between Formalistic and Pragmatic Approaches

    Article

    The Fork in the Road Revisited: An Attempt to Overcome the Clash Between Formalistic and Pragmatic Approaches

    Author:

Abstract

This article revisits one of the most controversial issues of international investment law, namely the question of the effect of fork-in- the-road (FITR) clauses contained in investment treaties. It provides a comprehensive and detailed examination of the relevant arbitral case law, highlighting the co-existence of two formalistic approaches (based respectively on the distinction between treaty and contract claims and the lis pendens-related triple-identity test) with the more pragmatic fundamental-basis test established by the ICSID tribunal in Pantechniki v. Albanania and subsequently endorsed in H&H v. Egypt. This contribution critically examines these two strands of case law, emphasizing both the interpretive flaws of formalistic approaches and the inherent vagueness and ambiguity of the fundamental-basis test. In an attempt to overcome the deadlock resulting from the clash between formalistic and pragmatic decisions, this article offers a functional analysis of FITR clauses, providing new insights and guidance to treaty drafters and interpreters.

Keywords: treaty, investment treaties, arbitration, international law, international investment law, fork-in- the-road (FITR) clauses, the ICSID tribunal

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Published on
01 Jan 2019