Analyzing the Bilateral Investment Treaties of Ethiopia in light of Treaty-Shopping

Abstract

Bilateral Investment Treaties (BITs) are agreements between two sates for reciprocal protection of investors and /or investments of one in the territory of the other. They are not thus generally meant to protect the investors of a non-contracting third sate as well as domestic investors of the parties. However, there are situations that a BIT benefits totally uncontemplated subjects i.e., the aforementioned exclusions. This is through the instrumentality of treaty-shopping. Treatyshopping is a scenario whereby investors of a non-contracting third state or domestic investors of one of the BIT parties distract BIT benefits. Investors use such technique to exploit investment opportunities in a target host state, including its BITs. Most importantly, the Most Favored Nation (MFN) clause and the right for access to international investment arbitrations are the core protections hunted by such investors in BITs. Nationality of investors in general and that of companies in particular is the central shelter of . There is no consensus among scholars as to the legitimacy and desirability of . There is also no consensus in international investment arbitrations about the acceptability of practice. Yet, there are practically felt difficulties posed to host states that emanate from the scenario. Among other things, results in the multiplicity of claims by investors in international arbitrations, parallel legal proceedings and internationalization of domestic investments. It also curtails government regulatory power and jeopardizes sustainable development in host states. The aim of this study is to analyze Ethiopia‟s BITs vis-à-vis treaty-shopping. The researcher has used doctrinal research methodology. Primarily twenty seven BITs sighed by Ethiopia are examined in this research. Besides relevant decisions of international arbitrations, and additional secondary sources were consulted. Based on the investigation, the researcher found that, given many of the country‟s BITs share stark similarity BITs of other states which accommodated the problem, they are exposed to the problem, in varying degrees yet. As a proactive remedy to alleviate the situation from the very beginning, the researcher recommends for renegotiating those BITs affected by the problem.