State-State Dispute Settlement Clause in Investment Treaties

The document analyzes the role of state-state dispute settlement (SSDS) in investment treaties, contrasting it with the surge in investor-state arbitration. It explores judicial, quasi-judicial, and arbitration procedures, as well as types of claims such as diplomatic protection and interpretive requests. The paper offers recommendations for states to better define the relationship between SSDS and investor-state mechanisms, including the use of local remedies and the binding nature of decisions.

• Investor-state arbitration has seen significant growth, with recorded cases increasing from 51 in 2000 to 568 by the end of 2013, while state-state arbitration has remained rare with only four cases occurring under investment treaties.
• State-state dispute settlement is receiving renewed interest due to concerns regarding investor-state arbitration, specifically its high costs, lack of predictability, and challenges to public welfare, financial, and environmental policy measures.
• Typical state-state clauses allow for specific types of claims, including requests for declaratory relief, interpretive claims, and diplomatic protection claims.
• The paper recommends that states evaluate whether state-state dispute settlement should be the sole mechanism or an addition to investor-state arbitration, and suggests clarifying requirements such as the exhaustion of local remedies and the coordination of parallel cases.

APA

Bernasconi-Osterwalder,, N. (2014). State-State Dispute Settlement Clause in Investment Treaties. International Institute for Sustainable Development. https://www.iisd.org/publications/guide/iisd-best-practices-series-state-state-dispute-settlement-clause-investment

Chicago

Bernasconi-Osterwalder,, Nathalie. State-State Dispute Settlement Clause in Investment Treaties. International Institute for Sustainable Development, 2014. https://www.iisd.org/publications/guide/iisd-best-practices-series-state-state-dispute-settlement-clause-investment.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder, |first1=Nathalie |title=State-State Dispute Settlement Clause in Investment Treaties |publisher=International Institute for Sustainable Development |date=31 October 2014 |url=https://www.iisd.org/publications/guide/iisd-best-practices-series-state-state-dispute-settlement-clause-investment |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2014statestate, author = {Bernasconi-Osterwalder,, Nathalie}, title = {{State-State Dispute Settlement Clause in Investment Treaties}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = oct, url = {https://www.iisd.org/publications/guide/iisd-best-practices-series-state-state-dispute-settlement-clause-investment}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }