Arbitrajes y adjudicaciones inter-estatales de inversion estranjeras en la reciente experiencia latinoamericana

The present chapter explores the reality of inter-state adjudication arising out of investment disputes in Latin America. The region has witnessed for many years conflicts involving disputes between investors and states that have often escalated into conflicts with the state of origin of the investor, hence affecting the bilateral relations as a whole. In this vein, the region has experienced the development of various methods of dispute settlement, among them “gunboat” diplomacy, later diplomatic protection, and including the current international regime of investment. This regime consists of a number of investment treaties - bilateral and regional - that have introduced investor-state arbitration as a suitable mechanism for resolving investment disputes. However, alongside this development, various investment treaties typically contain a clause with a view to resolving disputes between state parties – clauses that have hardly been used. This chapter examines the latter mechanism in the context of the region and of its history of adjudication of investment disputes. The first section deals with the practice in drafting such clauses by Latin American states, dividing the analysis into two generations of clauses. The first generation resorts to a non-concrete language that opens the door to many interpretations on the scope of the mechanism. This open formula leads to conclude that such clauses are designed for both abstract interpretation, and the exercise of diplomatic protection of the state of nationality of the investor, to claim the violation of rights on particular cases. The second generation of clauses has emerged in recent years in the late treaties of Colombia, Mexico, Panama and Peru, and it provides for a number of additional conditions that are commented here. The second section of the chapter analyses the three cases that the region has witnessed: Peru v. Chile, and the first use of the mechanism; Italy v. Cuba and the exercise of diplomatic protection; Ecuador v. USA, and debate about abstract interpretation conflicts and the scope of the mechanism. The last section contains some perspectives with regard to this mechanism in Latin America. It further argues that the abstract interpretation in the investment adjudication system has a potential as an alternative procedure for regional states that have been critical of the regime, because it can be a tool to pursue legal certainty of concepts and provisions of investment treaties.