Newsletter-21

215 ARBITRATION LAW Consent to Arbitrate in Investment Arbitration* Att. Fatih Isik Introduction Arbitration is an alternative dispute resolution method based on consent of the parties, regardless of whether it is a commercial or investment arbitration. A dispute may be brought to arbitration only where the parties have consented to arbitration. In commercial arbitration, the parties consent to arbitration through the execution of an arbitration agreement as a separate agreement, or as an arbitration clause within the underlying contract. In an investment arbitration where the parties are always a state (or a state entity) on the one side, and a foreign investor on the other, the parties must have consented to arbitration through an arbitration agreement, or through other meth- ods, which will be explained, below. The Methods for Consenting to Arbitrate In an investment arbitration, the parties may consent to arbitration through (i) arbitration agreements between the state and the investor, (ii) bilateral investment treaties (BITs) between the host state and the state of the investor, (iii) multilateral investment treaties to which the host state and the state of the investor are parties and (iv) national legis- lation of the host state. Except for the first method, the host states offer their consent to arbitrate to the investors, and the arbitration agreement is perfected through the acceptance of that offer by the investor. Consent through Arbitration Agreements As is the same for commercial arbitrations, the parties in in- vestment arbitrations, namely the host state and the investor, may conclude arbitration agreements through a separate arbitration agree- * Article of June 2016