The Assignment of Investment Treaty Claims: Doctrinal and Policy Perspectives

Abstract

The breach of an investment treaty vests the covered investor with a treaty claim, i.e. the right to claim reparation vis-à-vis the host State. Typically, the investor itself will bring this treaty claim before an arbitral tribunal. Yet, it might be the case that the investor is unwilling to commence arbitral proceedings against the host State. In this scenario, is the investor permitted to assign its treaty claim to another entity which will then initiate arbitration? In the affirmative, which are the jurisdictional hurdles that an assigned claim might face? And, bottom line, does such an assignment constitute a legitimate practice? It is these questions, that this study attempts to answer. It submits that the assignment of treaty claims is not only doctrinal-wise tenable but also policy-wise desirable, in view of the extensive and – to some extent – opaque third-party funding arrangements, to which the assignment provides an alternative.