MJIEL Vol 16 Issue 1 2019 - Article 4

New Russian Model BIT and the Practice of Investment Arbitration
Aleksandr P. Alekseenko
 
ABSTRACT: Investment protection is an issue of increasing significance for Russia. Faced with a huge wave of claims related to expropriation of investments in recent decades, the government of the Russian Federation has amended national legislation to radically change its BIT (bilateral investment treaty) policy. This decision has caused concerns and made it necessary to analyse such a turn in the policy. In this connection, the article considers different reasons for such a decision by the government. It focusses on arbitral awards in which Russia has been the respondent, outlines the main features of such awards and examines expropriatory actions of its officials. Special emphasis is given to the issue of determining the jurisdiction of international arbitral tribunals and the applicability of different treaties signed but not ratified by Russia. The article argues that when the most-favoured-nation treatment is extended to treaty provisions concerning the dispute resolution procedure, doing so contradicts the very nature of a BIT. Therefore, it concludes that arbitral tribunals have favoured the interests of investors and have often interpreted BITs rather liberally. Nonetheless, investors very rarely enjoy international protection, because arbitral awards are repudiated by national courts due to a lack of jurisdiction of international arbitral tribunals.

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