This article provides an overview on how international investment arbitration tribunals have dealt with allegations of a foreign investor's non-compliance with local laws. It provides answers to questions such as: Why does the issue of compliance with domestic laws play such an important role in international investment arbitration? Are considerations of compliance with local laws questions of jurisdiction or merits? Which forms of non-compliance are relevant? How may an investor counter allegations of non-compliance? In addition, the article will address a number of other related aspects, such as tribunals' approaches towards determinations by domestic authorities and burden of proof issues. The primary focus rests on the application of so-called in accordance with the laws of the host state clauses which are commonly found in international investment agreements, in particular in bilateral investment treaties.
Journal of International Arbitration