Cooling-off periods in investment treaty arbitration: an opportunity to negociate or a mere formality? Views from a Negotiation perspective

Description: This paper is a study of the cooling-off or waiting period clauses embedded in the majority of Bilateral Investment Treaties. Based on an analysis of applicable legislation,investment arbitration case law and doctrine, this paper evidences the existence of three conflicting trends with respect to the existence and nature of any obligations arising out of the cooling-off period clauses. Interpreting article 31 of the Vienna Convention of the Law of Treaties convention this paper concludes that cooling-off period clauses involve a best efforts obligation by the parties to engage in good faith negotiations. To determine the nature of the said obligation and based on negotiation theory, this paper draws on the substantive and formal issues involved in investor-State conflicts. Finally, and contrary to the prevailing trend, this paper concludes that arbitral tribunals should resort to negotiation theory-focused-approaches when determining parties? compliance with cooling-off period obligations, analyzing each case in a separate and flexible manner.

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