Chapter 6: SWFs and Bilateral Investment Treaties
1. AN UNDISCOVERED RELATIONSHIP We have seen in the previous chapters that sovereignty and purposes, that we believe are the SWFs main features, are critical elements for SWFs immunity protection too. Whether immunity can not apply, because of the reasons mentioned in Chapter 5, SWFs should protect their investments by means of international arbitration, if a bilateral investment treaty (BIT) between their home state and the state that challenged their investment is in force and so provides for. Hence, we should also investigate if sovereignty and purposes play a role in the relationship between SWFs and BITs. So far, the issue of SWF investment protection through BITs has been scarcely dealt with in literature.1 The reason for this lack of interest might lie in the fact that as for now no SWF investments have been arbitrated. However, this is not enough to conclude that the issue will not arise in the near future. In fact, the phenomenon of SWFs is relatively recent in the dynamics and dimensions described above; therefore we have reason to believe that BITs might have a significant impact on decision-making and on the management of state investments. In the absence of a multilateral agreement on investments, BITs could guarantee both an adequate continuum in the states’ relations and a reciprocity in investments guarantees. Our analysis of the relationships between BIT and SWF investments starts from a review of current BITs in order to assess their relevance for SWF investments (Chapter 6, section 2.1). The theoretical analysis...
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