Introduction
The recent surge in treaty renegotiations, unilateral denunciations and wholesale re-writes of investment treaties has made a once-academic timing question intensely practical: if an investor’s cause of action crystallised while a BIT was in force but the investor only initiated arbitration after the BIT was terminated, does the investor retain a viable right to arbitrate? On its face the issue appears procedural — did the investor “accept” the State’s standing offer before it was withdrawn? — but in fact it implicates deeper rules of treaty law, doctrines of acquired or vested rights, and the legitimacy of the international investment regime on which long-term cross-border investment depends.
This article examines how tribunals have answered that question by grouping awards into three recurring approaches, anchoring the debate in the Vienna Convention on the Law of Treaties (VCLT), and arguing for a textured, text-sensitive rule that protects legitimate investor expectations without rewriting parties’ bargains.[i]
The evolving interpretation in arbitral practice
To render doctrine useful for practitioners, it is convenient to classify tribunal responses into three approaches. The first gives priority to the formal act that perfects consent (the filing date). The second protects investors by treating the moment the dispute crystallised as decisive. The third uses a mixed, contextual methodology that asks: what does the treaty say (survival/sunset language); was Termination/amendment correctly effected; and did the investor take pre-Termination steps that amount to acceptance or show crystallisation? These three approaches recur across ICSID, UNCITRAL and PCA awards.
Approach I — The Formal / Timing Rule (file before the cut-off)
The most straightforward line treats BIT’s arbitration clause as a unilateral standing offer that the investor must accept before the offer is withdrawn by lawful Termination or denunciation. This logic is especially salient in the ICSID denunciation context: the Convention’s timing mechanics make the filing date decisive and, in many awards, a filing that pre-dates an effective denunciation perfects consent that cannot later be unilaterally revoked.[ii]
The tribunal in Transban Investments v. Venezuela emphasised that once the investor accepted the State’s offer the consent was perfected and could not be unilaterally withdrawn; the award focuses on the chronology and treats the filing as the operative cut-off (¶85, 93). This reasoning reflects the broader line of cases under Approach I, where tribunals treat the arbitration clause as a standing unilateral offer that lapses upon Termination or denunciation. Consent is perfected only by filing the request for arbitration, and once perfected, it cannot be revoked by the State. Accordingly, tribunals following this approach have consistently focused on procedural timing, holding that only those claims in which both the dispute and the formal request for arbitration were instituted before the treaty’s Termination remain admissible.
Tribunals adopt this approach mainly for practical reasons. If investors were allowed to accept a State’s offer even after the treaty had been terminated, the Termination itself would lose its meaning. States would never really be able to step away from their commitments. By making the filing of the arbitration request the key moment, tribunals ensure that Termination has real effect while also staying consistent with the timing rules under the ICSID Convention.
Approach II -The Acquired-Rights / Crystallisation Rule (dispute-arising moment matters)
A contrasting, investor-protective jurisprudential trend treats the crystallisation of the cause of action as the operative moment. Under this approach, once the investor’s legal position — a breach, a wrongful act, or a justiciable dispute — arises while the BIT is in force, the investor acquires an interest which later treaty Termination cannot retroactively extinguish. Tribunals adopting this approach rely on Article 70 VCLT (which preserves “rights created through the execution of the treaty prior to its Termination”), doctrines of legal certainty, and the fairness principle that States should not be able to pull the legal rug from under an investor mid-dispute.
The Eskosol v. Italy tribunal is striking for the clarity of its position. It held that it would be “inconsistent with general notions of acquired rights under international law” to allow States to “non-suit” an investor part-way through a pending case by issuing subsequent documents purporting to reinterpret longstanding treaty text so as to undermine jurisdiction (¶226).[iii]CMC Africa Austral LDA v. Mozambique took a similar protective view in the intra-EU/related context, stressing that an arbitration agreement made and accepted before later political acts remained binding (¶326).[iv]
The acquired-rights approach is compelling where the chronology is clear: contemporaneous protests, notices of dispute, Termination of contractual relations or other acts demonstrating crystallisation provide a firm evidentiary basis. In such circumstances tribunals have been reluctant to reward opportunistic terminations that are plainly designed to deprive investors of remedies.
Approach III -Mixed / Contextual Solutions (text + context prevail)
A third and increasingly common approach refuses black-letter rules in favour of a close textual and contextual analysis. Tribunals following this method proceed in sequence: (i) does the treaty contain an express survival/sunset clause and what precisely does it say; (ii) were amendment/Termination formalities complied with; and (iii) did the investor take pre-Termination steps amounting to acceptance or otherwise show the cause of action crystallised? Where clear sunset language preserves protections for investments “made prior to the date of Termination” (commonly 10–20 years), tribunals will give effect to the tail; where no such clause exists, tribunals weigh perfected-consent and acquired-rights arguments against the treaty text and facts. The predictable result is that text + context usually decides complex cases.
Walter Bau v. Thailand is a paradigmatic example: the tribunal gave literal effect to a 10-year survival clause and held that state-state claims under the earlier treaty remained possible until the tail expired (¶9.5).[v] Jan de Nul v. Egypt demonstrates the converse: a successor treaty can, in certain circumstances, supersede an earlier BIT notwithstanding a survival clause, underscoring that words and context must govern (¶24).[vi] The tribunal examined the survival clause in Article 12(2) of the Belgium–Luxembourg–Egypt BIT that while such clauses generally extend protection, they cannot override the express terms of a later treaty that displaces the earlier one.(¶128) Bahgat v. Egypt illustrates how broadly drafted survival language (covering “any kind of Termination”) will be interpreted to preserve investor access during the tail (¶313).[vii]
Case signals what the awards teach in practice
From the case law the following practical signals are steady.
First, pending proceedings are ordinarily protected. Tribunals will generally not allow States to “non-suit” investors mid-case by later political acts or documents; jurisdiction is assessed at the time of institution and that assessment is given effect. Eskosol (¶226) and CMC (¶326) typify this instinct.[viii]
Second, perfected consent is decisive in the ICSID denunciation context. Because the ICSID Convention contains timing rules and because tribunals often treat denunciation as having specific temporal effects, a Request for Arbitration filed before denunciation’s effective date will usually preserve jurisdiction. Transban is the clearest modern exposition of that point (¶85, 93).[ix]
Third, survival (sunset) clauses are determinative where present. When parties have expressly preserved protection for investments existing at Termination, tribunals routinely apply the tail, unless the terminating parties validly and clearly alter that regime. Walter Bau, and Bahgat together demonstrate that outcome turns on textual detail and context.[x]
Fourth, acquired-rights reasoning helps but is not limitless. Tribunals show sympathy for protecting rights that accrued before Termination, but the VCLT and the ILC’s drafting history caution that Article 70 protects rights and legal situations created prior to Termination and does not automatically transform every private expectation into an indefeasible right. Thus, acquired-rights reasoning is persuasive when the chronology and evidence of reliance are strong, but it will not override valid, properly executed amendments or clear treaty language.
Treaty-based sunset clauses v. general international law
Article 70 VCLT authorises States to shape the legal consequences of Termination and preservation clauses thus constitute a valid exercises of party autonomy. Put differently: where the treaty speaks plainly, that language controls. Where the text is silent, and no filing predates Termination, tribunals resort to chronological and equitable considerations and to doctrine of acquired rights to determine whether an investor retains access.
A practical corollary merits emphasis. If States seek a clean slate, there is an available (if politically sensitive) two-step path: amend or remove any survival clause first, then effect Termination. Tribunals have recognised that this two-step approach is capable of stripping post-Termination access if properly executed under the treaty’s amendment modalities;[xi] absent such explicit change, survival wording and perfected consent will ordinarily protect investors.
A few difficult permutations
Three recurring fact patterns keep producing close decisions.
Succession / successor treaties. When a newer treaty supplants an earlier BIT, tribunals must decide whether the successor intentionally displaced survivors. Jan de Nul held that, in some circumstances, a successor treaty can immediately apply despite an earlier survival clause. Text and the parties’ intent are decisive.[xii]
Mutual Termination versus unilateral denunciation. Some sunset clauses are phrased in terms of “denunciation” and therefore may be read to protect only against unilateral acts; others are neutral and catch mutual Termination too. Tribunals have not uniformly resolved this distinction, so close attention to drafting is essential.
Institutional-law wrinkles (e.g., Achmea / intra-EU dynamics). The Achmea jurisprudence and related EU instruments generated difficult cross-pressures. Many tribunals maintained that an arbitration agreement formed and accepted before subsequent political acts remains binding and governed by international law, not domestic or supranational developments; CMC and related awards applied that protective logic.[xiii]
Conclusion
The jurisprudence resists a single bright-line rule but supports a practicable canon: text + timing wins. If the BIT expressly preserves protections post-Termination (a clear sunset clause), or if the investor perfected consent before Termination (filing or equivalent pre-Termination acceptance), post-Termination arbitration will ordinarily be admissible. Where neither safety-valve exists, an investor’s best route is to produce contemporaneous evidence proving the cause of action crystallised while the BIT was in force; tribunals sympathetic to legal certainty will sometimes find jurisdiction on that basis, but they will not rewrite clear treaty language.
The investment regime can protect investor expectations while respecting State sovereignty — but this balance requires consistent, text-sensitive tribunal reasoning that gives effect to the bargains the parties actually struck. Until tribunals coalesce around uniform criteria, the safest path for investors is early action and meticulous record-keeping; the safest path for States is careful drafting and, if necessary, a deliberate two-step process of first amending the treaty and then terminating it.
[i]Vienna Convention on the Law of Treaties, arts 28, 54, 70.
[ii] Convention on the Settlement of Investment Disputes Between States and Nationals of Other States arts. 70–71, Mar. 18, 1965, 575 U.N.T.S. 159.
[iii]EskosolSpA (in liquidazione) v Italian Republic, ICSID ARB/15/50, Decision (7 May 2019) ¶ 226.
[iv]CMC Africa v Republic of Mozambique, ICSID Case No ARB/17/23, Award (24 October 2019) ¶ 326 (‘[a]n offer to arbitrate the present dispute had thus been made and accepted before the decision in Achmea was issued or the member states issued their declaration. A valid and binding agreement to arbitrate has thus been formed. That agreement is subject to international law, not to EU law. The ICSID Convention provides that, “[w]hen the parties have given their consent, no party may withdraw its consent unilaterally.”’)
[v] Walter Bau AG (in liquidation) v Thailand, UNCITRAL, Award (1 Jul 2009) ¶ 9.5.
[vi]Jan de Nul NV and Dredging International NV v Egypt, ICSID ARB/04/13, Decision on Jurisdiction (16 Jun 2006) ¶24.
[vii] Mohamed Abdel Raouf Bahgat v Arab Republic of Egypt, PCA Case No. 2012-07, Decision on Jurisdiction (30 Nov 2017) ¶313.
[viii]EskosolSpA (in liquidazione) v Italian Republic, ICSID ARB/15/50, Decision (7 May 2019) ¶226., CMC Africa v Republic of Mozambique, ICSID Case No ARB/17/23, Award (24 October 2019) ¶ 326.
[ix]Transban Investments, supra note 2, ¶120.
[x]Walter Bau AG, supra note 5, ¶ 9.5., Mohamed Abdel Raouf Bahgat, supra note 7, ¶ 313.
[xi] Venoklim Holding B.V. v. Bolivarian Republic of Venez., ICSID Case No. ARB/12/22, Award, ¶¶ 65–67 (Apr. 3, 2015).
[xii]Jan de Nul, supra note 6, ¶ 24.
[xiii]CMC Africa, supra note 4, ¶ 326.
Author(s)
Om Narendra Singh
Student at LLYOD School of Law
Astha Singh
Student at LLYOD School of Law