Foreign Investment Contracts and Scope of Host State Commitments Arising From Treaty

Foreign investment are made by means of concluding a contract between the foreign investor and a public institute or entity of the host state.On the other side, the host state is often a part of a bilateral or multilateral investment treaty with the national state of the investor.Each of these documents forecast their special mechanism for settlement of investor-state disputes.In numerous cases,these contracts are sources of investment disputes and a lot of claims arise out of breaches of international legal obligations arising from or relating to underlying contracts, which is a new question in the international arbitration domain.Since the two SGS v.Pakistan and SGS v.Philippines decisions by arbitral tribunals, the question of how treaty-based tribunals should deal with claims arising out of the contractual relationships,was recently asked and considered. Both of the aforementioned tribunals dealt with assessing jurisdiction over claims of breach of contract.Although, these arbitrations finally resulted in two different awards, they has provided useful guidance toward determination of the scope of jurisdiction of the arbitral tribunals over disputes arising out of the investment contracts.The subsequent tribunals taking into account arbitral practices, tried to present an analytical approaches concerning assessment of jurisdiction in settlement of disputes arisingfrom contractual relationships