Applying the “fundamental basis” test in analysis of the disputes’ identity for the purpose of the Fork-in-the-road provision : Main advantages and disadvantages

Bilateral and multilateral investment treaties usually include investor-state dispute resolution clauses which provide investors with the choice of alternate dispute resolution fora. However, to limit the scope of those recourses the states frequently add the fork-in-the-road (hereinafter “FITR”) provisions to those dispute resolution clauses. These provisions are intended to prevent the host state from the risk of being ordered to pay damages in multiple proceedings for the same conduct or measure, and to forestall diverging decisions on essentially the same dispute. For the effect of FITR provisions, the key question to be answered is “are the disputes referred to the different fora the same”. The most recent fact is that this phenomenon has not been given effect by investment arbitration tribunals in any public case until the Pantechniki v. Albania (hereinafter “Pantechiniki case”) award. The Pantechniki case can be considered as a game-changer in favor of the FITR provisions by giving effect to this phenomenon through applying the “fundamental basis” test (hereinafter “FBT”).This memorandum will analyze the main potential pros and cons of applying the FBT test in the assessment of disputes’ sameness