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The Role of Non-Disputing Party Submissions in U.S. Investor-State Dispute Settlement Practice
The Role of Non-Disputing Party Submissions in U.S. Investor-State Dispute Settlement Practice
Introduction:
Non-disputing party submissions (NDPs) have become a central feature of U.S. investor-state dispute settlement (ISDS) practice over the past 25 years. With almost a hundred written NDPs filed to date, excluding the increasing practice of oral submissions, NDPs play a pivotal role in shaping interpretations of international investment treaties. These submissions have not only affirmed the U.S. position on a variety of key legal topics but have also contributed significantly to establishing customary international law.
Recent NDP Practice in the USA:
In the last two years, the United States has submitted 23 NDPs in various investment treaty arbitrations. These submissions have spanned treaties such as the USMCA, NAFTA, CAFTA-DR, and bilateral investment treaties (BITs) with Colombia, Peru, and the Kyrgyz Republic. The key issues addressed in recent U.S. submissions range from jurisdictional matters, such as the definition of "investment" and limitations periods, to substantive treaty protections, including the minimum standard of treatment (MST), expropriation, national treatment (NT), and most-favoured-nation treatment (MFN).
Several submissions also addressed new and evolving issues. For instance, in the Foster Wheeler case, the U.S. highlighted preliminary objections based on the arbitration's conduct, while in Sargeant Petroleum, the U.S. elaborated on the denial of benefits provisions under CAFTA-DR, noting that shell companies could be denied treaty protections. In B-Mex, the United States clarified that MST does not guarantee the same due process rights in administrative decision-making as in judicial proceedings.
On damages, the United States reinforced its position on proximate causation in Riverside Coffee and confirmed the application of contributory fault in Koch Industries and Legacy Vulcan, referencing Article 39 of the International Law Commission’s Articles on State Responsibility.
NDPs and Customary International Law:
NDPs are instrumental in contributing to the development of customary international law. They reflect State practice, one of the two essential elements (alongside opinio juris) required to establish customary law. Through these submissions, States can articulate their positions on evolving legal obligations and express persistent objections to specific norms.
In addition, under Article 31(3) of the Vienna Convention on the Law of Treaties (VCLT), tribunals must take into account subsequent agreements and practices of the treaty parties. As such, NDPs contribute to a common understanding of treaty provisions, which must be considered by arbitrators. This is evident from several cases where tribunals have treated NDPs as reflecting a unified State practice under Article 31, such as Mobil v. Canada and Canadian Cattlemen for Fair Trade.
Conclusion:
NDPs serve a critical function in shaping the interpretation and application of investment treaties in ISDS arbitrations. By clarifying State positions on jurisdiction, substantive treaty protections, and damages, these submissions help reinforce consistency and predictability in international investment law. Moreover, NDPs contribute to the establishment of customary international law by reflecting a State's practice and opinions, ensuring that treaty provisions are interpreted in a manner consistent with the parties' common understanding.
- In the last two years, the United States has submitted 23 NDPs in various investment treaty arbitrations.
- They reflect State practice, one of the two essential elements (alongside opinio juris) required to establish customary law.
- As such, NDPs contribute to a common understanding of treaty provisions, which must be considered by arbitrators.
