Arbitral tribunals
have long emphasized that it is in principle legitimate for investors to
structure their investments with a view to maximizing protection under
international investment agreements (IIAs). At the same time, a jurisprudence
has developed denying investors the right to invoke the arbitration mechanism
in an IIA following a restructuring carried out when a specific dispute was
already foreseeable. In such circumstances arbitral tribunals tend to find that
the investor’s behaviour constitutes an abuse of process and that they either
lack jurisdiction or that the claims are inadmissible as a consequence.
The present contribution reviews the
historical development of this jurisprudence in search of a rationale for using
the foreseeability of a specific dispute as the criterion distinguishing
legitimate from abusive investor behaviour. It shows that such a rationale has
never been clearly articulated and that several arguments actually speak
against making this type of distinction. Under the circumstances, the submission
suggests that it will typically be appropriate for arbitral tribunals to
exercise restraint when applying the prohibition of abuse of process in the
context of corporate restructurings, in accordance with the purpose of the
relevant treaties and the subsidiary nature of the principle.