Clifford Chance

Silent Seats in Investment Treaties

2 December 2019

Investment treaties, including Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs), often provide a range of dispute resolution options, including ad hoc arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law 1976 (UNCITRAL Rules) and arbitration at the International Centre for Settlement of Investment Disputes (ICSID).

Unlike arbitration proceedings at ICSID, which take place on a supra-national plane beyond the control of any national court, arbitral proceedings under the UNCITRAL Rules have a legal place or "seat" that connects them to the law of a State and places them under the supervision of that State's courts. Because only the courts of the seat have the power to annul or set-aside the arbitral award, the choice of seat bears directly on the finality of the award and is therefore critical to efficacy of the arbitration process.

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