The Principle of Bifurcation in Investment Arbitration

Authors

  • Shokhrukh Khamidov Lecturer, Tashkent State University of Law

Keywords:

Bifurcation, Investment Arbitration, ICSID, UNCITRAL, Jurisdiction

Abstract

Bifurcation in investment arbitration refers to the separation of disputes into discrete phases, most commonly a preliminary phase for jurisdiction or admissibility and a subsequent phase for merits or damages. This paper examines the evolution of bifurcation through landmark cases, including Glamis Gold and Mesa Power, which have shaped the procedural framework by establishing criteria to determine whether separate phases enhance procedural efficiency. The comparative analysis contrasts ICSID and UNCITRAL arbitration rules, highlighting a historical presumption of preliminary jurisdictional rulings under the 1976 UNCITRAL Rules and the more discretionary approach that both systems have moved towards today. Empirical data suggests that bifurcation, while potentially cost-saving if a dispositive objection is upheld, can in fact prolong proceedings and raise expenses if the case proceeds to the merits. The paper further explores the strategic considerations behind bifurcation requests, identifying risks such as dilatory tactics and overlapping factual or legal issues. Ultimately, bifurcation emerges as a double-edged sword: indispensable in certain scenarios but not always advantageous. Evolving procedural rules, including the 2022 ICSID reforms, underscore a drive toward more structured, case-sensitive approaches to bifurcation, reflecting the continued quest for fairness and efficiency in investment arbitration. Practical implications are discussed and explored in detail.

References

Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) (adopted 18 March 1965, entered into force 14 October 1966) 575 UNTS 159.

ICSID Arbitration Rules (2006) https://icsid.worldbank.org/resources/rules-and-regulations/2006-icsid-rules-and-regulations accessed 1 February 2025.

ICSID Arbitration Rules (2022) https://icsid.worldbank.org/resources/rules-and-regulations/2022-icsid-rules-and-regulations accessed 1 February 2025.

UNCITRAL Arbitration Rules (1976) UN Doc A/31/17 (1976).

UNCITRAL Arbitration Rules (as revised in 2010) UN Doc A/RES/65/22 (2010).

Caratube International Oil Company LLP v Republic of Kazakhstan, ICSID Case No ARB/08/12, Award (5 June 2012).

Cairn Energy PLC and Cairn UK Holdings Limited (CUHL) v Republic of India, PCA Case No 2016-7, Decision on Respondent’s Application for Bifurcation (19 April 2017).

Churchill Mining PLC v Republic of Indonesia, ICSID Case No ARB/12/14, Procedural Order No 13 (12 December 2014).

Eco Oro Minerals Corp v Republic of Colombia, ICSID Case No ARB/16/41, Decision on Bifurcation (28 June 2018).

Gavrilović v Republic of Croatia, ICSID Case No ARB/12/39, Decision on Bifurcation (21 January 2015).

Glamis Gold Ltd v United States of America, UNCITRAL, Procedural Order (October 2005).

Glencore Finance (Bermuda) Ltd v Plurinational State of Bolivia, PCA Case No 2016-39 (UNCITRAL), Decision on Bifurcation (31 January 2018).

Mesa Power Group, LLC v Government of Canada, PCA Case No 2012-17 (UNCITRAL), Procedural Order (January 2013).

Philip Morris Asia Limited v Commonwealth of Australia, PCA Case No 2012-12, Award on Jurisdiction and Admissibility (17 December 2015).

Pey Casado (President Allende Foundation) v Republic of Chile, UNCITRAL (2017).

International Centre for Settlement of Investment Disputes (ICSID), ‘History of the ICSID Convention’ (ICSID Publication, 1970).

United Nations Conference on Trade and Development (UNCTAD), Investor–State Disputes Arising from Investment Treaties: A Review (UNCTAD Series on International Investment Policies for Development, 2005).

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Published

2025-02-13

How to Cite

Khamidov, S. (2025). The Principle of Bifurcation in Investment Arbitration. American Journal of Education and Evaluation Studies, 2(2), 82–90. Retrieved from https://semantjournals.org/index.php/AJEES/article/view/1093

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