Introduction

An investment tribunal's determination of the jurisdiction granted to it by an investment treaty has often given rise to considerable controversy. The meaning of words such as ‘investments’ or ‘investors’ for purposes of establishing jurisdiction or the ability of most-favoured nation provisions to import external dispute-resolution procedures have generated much debate. These issues are now well traversed (but still not fully resolved) in numerous awards and in scholarly literature. This chapter concerns a jurisdictional issue of a more recent vintage and about which comparatively little has yet been written. The issue in question relates to whether investment treaty dispute-resolution clauses that provide arbitral jurisdiction over disputes as to the ‘amount of compensation’ or ‘compensation due’ (i) permit a tribunal to determine an investor's entitlement to compensation (i.e. determining whether the host State breached the treaty's substantive provisions, thus triggering compensation obligations) and also to quantify such compensation (i.e. calculating the amount of compensation to be paid to the investor as a result of a treaty breach); or (ii) limit a tribunal solely to quantifying the amount of compensation.

For the purposes of this present chapter, ‘amount of compensation’ clauses can be said, for example, to take the form (with variations) of Article 13(3) of the 1988 China–New Zealand bilateral investment treaty (BIT):