Register now for your free, tailored, daily legal newsfeed service.

Find out more about Lexology or get in touch by visiting our About page. Register

Admissibility
Arbitration Chambers

Global, USA June 15 2022

I Introduction
Tribunals seized to resolve disputes pursuant to bilateral investment treaties (BITs) under either the
International Centre for Settlement of Investment Disputes (ICSID) Convention or the Arbitration Rules of
the United Nations Commission on International Trade Law (UNCITRAL) draw distinctions between the
concepts of 'jurisdiction' and 'admissibility'. The term 'admissibility' is not addressed in the ICSID
Convention, the UNCITRAL Arbitration Rules or BITs generally. It has been observed that the concept of
admissibility 'partakes of its generic meaning in the general theory of law'.2 This chapter explores the
genesis of the concept of admissibility and the various contexts in which the concept has been applied by
ICSID tribunals.
Even though the concept of admissibility is discussed and has served as a basis for dismissal of BIT
claims, at least one tribunal has questioned its power to dismiss a claim based on admissibility. In
Methanex v. United States, the respondent argued that the claims were inadmissible on two grounds: (1)
that creditors' claims are inadmissible under customary international law if they stem solely from a
measure's effect on the debtor: rather, there must be an action that directly affects the creditor's right;3
and (2) that the claimants failed to identify an international legal obligation owed to it that was violated. In
this regard, the respondent relied on Barcelona Traction4 holding that:

[i]n order to bring a claim in respect of the breach of such an obligation, a State must first establish its right to do so, for the rules on the subject rest on two
suppositions: The first is that the defendant State has broken an obligation towards the national State in respect of its nationals. The second is that only the
party to whom an international obligation is due can bring a claim in respect of its breach.5

The Methanex tribunal found that it had no power to dismiss a claim based on admissibility, noting the
following:

There is here no express power to dismiss a claim on the grounds of “inadmissibility”, as invoked by the USA; and where the UNCITRAL Arbitration Rules are
silent, it would be still more inappropriate to imply any such power from Chapter 11 . . . It is unnecessary to develop these materials further.6
The Methanex tribunal specifically referred to Article 79(1) of the Rules of Court of the International Court
of Justice (ICJ) concerning preliminary objections and referring to 'admissibility of the application' before
the court,7 and concluded that it had 'no express or implied power to reject claims based on
inadmissibility'.8
Nonetheless, the concept of admissibility has been applied by a number of tribunals in the context of
procedural irregularities, which have been held either to prevent the hearing of the case or to be a basis
for dismissing claims because of conduct on the part of the claimant. Indeed, it has been observed that
the concept of admissibility has become so important that many awards focus more on admissibility than
on jurisdiction.9
II The term 'admissibility' in the practice of international adjudicatory bodies
The term 'admissibility' appears in the rules or procedures of several courts of international law. For
example, Article 79 of the Rules of Court of the ICJ10 defines admissibility as follows:

Any objection by the respondent to the jurisdiction of the Court or to the admissibility of the application, or other objection the decision upon which is
requested before any further proceedings on the merits, shall be made in writing as soon as possible, and not later than three months after the delivery of the
Memorial. Any such objection made by a party other than the respondent shall be filed within the time limit fixed for the delivery of that party's first pleading.

Before deciding the case on its merits, the court must rule on objections raised as to both its jurisdiction
and the admissibility of the case. Jurisdictional issues in ICJ practice 'are those that ultimately derive
from whether the Court has the right and power to consider the case brought by a state', while issues of
admissibility determine whether the case itself is one proper for determination when brought before the
court.11 In ICJ practice, the respondent's objections to admissibility may be grounded in one or more of
the following: (1) lack of locus standi by the applicant; (2) the necessity to join a third party; (3) the
mootness of the dispute; or (4) the existence of local remedies that have not been exhausted.12
The Articles on Responsibility of States for Internationally Wrongful Acts similarly provide that a claim is
inadmissible if (1) it is not brought in accordance with any applicable rule relating to the nationality of
claims or (2) it is one to which the rule of exhaustion of local remedies applies and any available and
effective local remedy has not been exhausted.13 Another definition of the concept of admissibility is
contained in Article 35(2) of the European Convention on Human Rights. Under that provision, a court can
reject an application as inadmissible if (1) domestic remedies have not been exhausted, (2) the
application is anonymous or substantially the same as a matter already examined by the court, (3) the
application is incompatible with the provisions of the Convention, manifestly ill-founded or constitutes an
abuse of right, or (4) the applicant has not suffered significant disadvantage.14 The obligation to exhaust
domestic remedies is based on customary international law and is intended to allow national courts to
remedy the violation. The concept of 'abuse of right' is understood according to general legal theory,
namely the improper exercise of a right for purposes other than those for which it is designed.15 The
European Court of Human Rights has issued a detailed Practical Guide on Admissibility Criteria, with
explanations and examples of each ground for rejection of an application based on admissibility.16 In the
context of an improper exercise of procedural rights, the concept of abuse of right is reported to have
recently 'gained prominence . . . as an applicable defence to the admissibility of a claim in the field of
investment arbitration'.17
The concept of 'admissibility' was also used in the context of concurrency of proceedings among different
UN entities. In the matters of Qatar v. the United Arab Emirates and Qatar v. Saudi Arabia, the ICJ had been
seized of a contentious dispute for an alleged violation by Saudi Arabia and the United Arab Emirates of
the Convention on the Elimination of Racial Discrimination caused by their 'blockade' of Qatar, while at the
same time the UN Committee supervising implementation of the same Convention was requested to
declare the blockade unlawful. In this instance, however, the Committee declined to dismiss Qatar's
request on admissibility grounds, holding that, because it is a monitoring body, it was 'not convinced that
a principle of lis pendens and electa una via is applicable which should rule out proceedings concerning
the same matter by a judicial body entitled to adopt a legally binding judgment'.18
III The delineation of admissibility from jurisdiction in the practice of ICSID tribunals
Admissibility has been distinguished from jurisdiction by investment tribunals. It has been accepted by a
number of tribunals that, although jurisdictional objections are aimed at the tribunal authority to decide
the case, challenges of admissibility are rooted in a defect of the claim.
In Waste Management Inc v. United Mexican States, the dissent summarised the practice as follows:

International decisions are replete with fine distinctions between jurisdiction and admissibility. For the purpose of the present proceedings it will suffice to
observe that lack of jurisdiction refers to the jurisdiction of the Tribunal and inadmissibility refers to the admissibility of the case. Jurisdiction is the power of
the tribunal to hear the case; admissibility is whether the case itself is defective – whether it is appropriate for the tribunal to hear it. If there is no title of
jurisdiction, then the tribunal cannot act.19

This definition is reminiscent of Professor Brownlie's distinction between the two concepts. Professor
Brownlie observed that '[a]n objection to the admissibility of a claim invites the tribunal to dismiss (or
perhaps postpone) the claim on ground which, while it does not exclude its authority in principle, affects
the possibility or propriety of its deciding the particular case at the particular time'.20 Under this approach,
the tribunal should first determine whether it has jurisdiction over the dispute and, once that jurisdiction
has been confirmed, address the admissibility of the claims. However, some tribunals have been less
willing to draw a clear distinction between jurisdiction and admissibility. In Consorzio Groupement LESI-
DIPENTA v. Algeria, the tribunal acknowledged at the outset that objections of jurisdiction and
admissibility 'must be dealt with separately and successively, because they deal with different
questions'.21 Nonetheless, because the claimant was not the holder of the rights under the contract, the
tribunal found both that its claims were inadmissible and that the tribunal did not have jurisdiction over
the claims.22 In Pan American Energy LLC and BP Argentina Exploration Company v. Argentine Republic, the
tribunal held that 'there is no need to go into the possible – and somewhat controversial – distinction
between jurisdiction and admissibility. Whatever the labelling, the parties have presented their case on the
basis of the six objections raised by the Respondent'.23
The decision in Abaclat v. Argentina demonstrates the challenges associated with determining the nature
of the objection. In this case – the first investment dispute dealing with mass claims – the tribunal
decided that it had jurisdiction to hear the claims of more than 60,000 Italian investors against Argentina
under the ICSID Convention and the Argentina–Italy BIT.
Noting that the differences between jurisdiction and admissibility are 'not always clear', the majority
(Professor Tercier and Professor van den Berg) applied the following criteria in distinguishing the two
kinds of objections:

If there was only one Claimant, what would be the requirements for ICSID's jurisdiction over its claim? . . . If the issue raised relates to another aspect of the
proceedings, which would not apply if there was just one Claimant, then it must be considered a matter of admissibility and not of jurisdiction.24

In a dissent, Professor Abi-Saab disagreed with the majority conclusion that the number of the claimants
was an issue of admissibility and not of jurisdiction. Professor Abi-Saab criticised the majority for
adopting an 'extremely narrow, in fact partial, concept of jurisdiction'.25 Professor Abi-Saab viewed the
number of claimants as bearing on the 'consent to arbitrate', thus being an issue of jurisdiction. The
dissent quoted from the US Supreme Court decision in Stolt-Nielsen SA v. Animal Feeds International Corp,
holding that 'class action arbitration changes the nature of arbitration to such degree that it cannot be
presumed the parties consented to it by simply agreeing to submit their disputes to an arbitrator' and that
'changes brought about by the shift from bilateral arbitration to class action arbitration [are]
fundamental'.26
Whether the objection is based on jurisdiction or admissibility has significant practical implications. In
bifurcated cases where issues of jurisdiction are separate from issues of liability, tribunals will deal with
admissibility issues at the merits rather than the jurisdictional phase. In some cases, issues of jurisdiction
are decided at the same time as issues of admissibility as tribunals have broad discretion when to decide
on admissibility.27
IV Dismissal of claims for inadmissibility
i Objections on the basis that the claims are 'premature'
In SGS Société Générale de Surveillance SA v. Philippines, the dispute arose out of a service contract
stipulating that disputes should be referred for resolution to the courts of the Philippines. When the
investor sought protection under Switzerland–Philippines BIT, the Philippines thus objected on the basis
that the investor's claim was for breach of contract and as such should be brought before a Philippines
court. The tribunal determined that it had jurisdiction over the dispute because the treaty extended to
contractual claims and the investor had expressly asserted breaches of the treaty. Nevertheless, the
tribunal found that it was impeded from hearing the dispute, and the claims were inadmissible. Indeed,
the tribunal found:

The question is whether a party should be allowed to rely on a contract as the basis of its claim when the contract itself refers that claim exclusively to another
forum. In the Tribunal's view the answer is that it should not be allowed to do so, unless there are good reasons, such as force majeure, preventing the claimant
from complying with its contract. This impediment, based as it is on the principle that a party to a contract cannot claim on that contract without itself
complying with it, is more naturally considered as a matter of admissibility than jurisdiction.28

The tribunal thus found that until the question of the scope of the respondent's obligation was clarified by
agreement between the parties or by Philippine courts, a decision by an ICSID tribunal would be
'premature'.29 Citing to Brownlie, the tribunal also observed that 'the analogous rule of exhaustion of local
remedies is normally a matter concerning admissibility rather than jurisdiction in the strict sense'.30
ii Objections on the basis of alleged wrongdoing by the investor
Perhaps uniquely in the investment treaty context, tribunals have applied the concept of admissibility to
dismiss claims on the basis of the alleged wrongdoing by the investor. For example, the tribunal in Plama
v. Bulgaria31 found that the effect of the claimant's fraud and illegal conduct was to 'preclude the
application of the protections of the ECT [Energy Charter Treaty]'.32 The respondent had argued that the
claimant had obtained the investment through unlawful means, rendering the claim inadmissible.33 The
tribunal bifurcated the proceeding in the jurisdiction and merits phases. In the decision on jurisdiction, the
tribunal concluded that the respondent's allegations on misrepresentation did not deprive it of jurisdiction
in this case and decided to examine these allegations during the merits phase.34 The analysis section of
the Plama award on the merits did not use the term 'admissibility'. In substance, however, the tribunal
adopted the respondent's arguments, finding that 'the substantive protections of the ECT cannot apply to
investments that are made contrary to law'.35 The tribunal reasoned that granting the protection of the
ECT would be contrary to the principle of nemo auditur propriam turpitudinem allegans (no one is heard
when alleging one's own wrong).36 The tribunal referred to the decisions in Inceysa v. El Salvador and
World Duty Free v. Kenya, invoking the principle of good faith, respect for the law and international public
policy. The tribunal thus dismissed the claims because of the conduct on the part of the investor, not
because of lack of jurisdiction.
Brownlie lists five grounds for inadmissibility of interstate claims:
1. the existence of legal interest on part of the claimant;
2. necessary third parties;
3. mootness of the dispute as a result of events arising after the complaint was filed;
4. extinctive prescription (i.e., an unreasonable lapse of time in the presentation of an international
claim); and
5. waiver.37
Under separate 'other grounds', Brownlie observes: 'There may be a residue of instances in which
questions of inadmissibility and “substantive” issues are difficult to distinguish. This is the case of the
“clean hands” doctrine, according to which a claimant's involvement in activity unlawful either under
municipal law or international law may bar the claim.'38 Interestingly, Brownlie observed that the ICJ has
never applied the doctrine even when it could have done so.39 Crawford's 'Second report on State
responsibility'40 notes in Chapter V that the doctrine of unclean hands has hardly been referred to in the
International Law Commission's previous work on state responsibility.41 Citing the works of Jean Salmon,
the report notes that the doctrine has been applied in a series of decisions of the United States–Great
Britain Mixed Commission set up under a Convention of 8 February 1853 for the settlement of
shipowners' compensation claims. These cases were 'all characterized by the fact that the breach of
international law by the victim was the sole cause of the damage claimed, [and] that the cause-and-effect
relationship between the damage and the victim's conduct was pure, involving no wrongful act by the
respondent State'.42 Considering that Chapter V was not concerned with procedural issues or
admissibility of claims, however, the report explained the Special Rapporteur's view that there was no
basis to include the clean hands doctrine as a 'new circumstance precluding wrongfulness'.43 The Special
Rapporteur concluded that 'it is not possible to consider the “clean hands” theory as an institution of
general customary law'.44
The doctrine of nemo auditur has been discussed not only by investment tribunals but also by national
courts. By way of comparison, in French tort law, for example, illegality has traditionally had a major role in
discarding the protection of interests held to be illegitimate. A typical instance where the doctrine would
be invoked was in the context of claims brought by concubines who suffered material and non-material
damage as a result of their partners' death in fatal accidents. The interest of such 'secondary victims' (as
arising out of wedlock) was long regarded as being illegitimate. Since the 1970s, however, there has been
a strong push against the availability of the nemo auditur doctrine to dismiss an action in tort.45 The
participation of the victim in the wrongful act, in particular, is now generally treated as an instance of
contributory negligence that could lead to partial, or even total, exoneration of the defendant.46
Whether the doctrine of unclean hands should be considered as a basis for disregarding the wrongfulness
of a state's conduct, or the extent to which the wrongfulness of an investor's conduct has contributed to
the alleged injury, are not issues that have so far received much attention in the known decisions of
investment tribunals.47
V Admissibility of evidence
In the US federal legal system, the term 'admissibility' is used in the context of evidence. For evidence to
be presented in legal proceedings, in addition to being relevant to factual proposition in the case, it also
must be admissible. The concept of admissibility allows the court to exclude evidence that may otherwise
be relevant or material. Two prominent examples of these rules of admissibility or rules of exclusion are
the rule against hearsay evidence and the rule against character evidence. In the United States, under the
Federal Rules of Evidence, Rule 404(a)(1) of bars the use of evidence of a person's character 'to prove that
on a particular occasion the person acted in accordance with the character' and Rule 404(b)(1) provides
that evidence of a crime or wrong is not admissible 'to prove a person's character in order to show that on
a particular occasion the person acted in accordance with the character'.48
In the context of ICSID proceedings, parties also have objected to the use of documents in evidentiary
hearings on the basis of their admissibility; although it is not always clear whether the parties refer to
inadmissible documents as documents that are otherwise relevant or have used the term 'admissibility' as
synonymous with 'relevancy'. In Methanex Corporation v. United States, the tribunal held certain
documents illegally obtained by Methanex to be inadmissible. The documents were found to have been
obtained by Methanex 'by deliberately trespassing onto private property and rummaging through
dumpsters inside the office building for other persons' documentation'.49
In Abaclat v. Argentina, the tribunal was seized to decide on the admissibility of documents for witness
and expert examination at the hearing. The claimants had objected to the respondent's proposed use of
documents during the hearing, because the documents were not 'within the scope of admissible
examination, i.e. to documents relevant to the direct testimony by Claimants' experts and witnesses'. The
claimants had also objected on the asserted basis that the documents violated the tribunal's
confidentiality order and the respondent acted in bad faith in not disclosing those documents earlier.50
The tribunal issued a detailed procedural order addressing whether certain categories of documents were
admissible or not, but did not set forth in that order a standard or definition of admissible evidence. The
tribunal ruled that 'the use of these documents may not serve to unduly extend the scope of admissible
examination for the jurisdictional hearing'.51 The claimants – who were Italian nationals – had also
objected to the use of a DVD and its transcript of an Italian television broadcast discussing Italian court
decisions concerning proceedings initiated by the claimants. Argentina intended to use these documents
for cross-examination of the claimants' expert. The claimants argued that the documents were
inadmissible because (1) the statements made in the television show were not witness testimony, (2) the
source of the documents was allegedly unreliable and (3) the material was filed late.52 After expressing
concern about the time the respondent intended to use with the particular witness, the tribunal allowed
the use of the material requested by the respondent, subject to 'the Tribunal reserv[ing] the right to
interrupt the examination of [the claimants' expert] in case it deems that Respondent's examination is
beyond the scope of what is necessary and appropriate'.53 Thus, in response to the claimants' objections
of inadmissibility (most notably because of concerns about the quality of the evidence), the tribunal
obviated the issue by admitting the evidence subject to its discretion to exclude as a matter of judicial
economy. In so doing, the tribunal implicitly agreed that the material was admissible (even though it did
not formulate what it viewed as admissible evidence).
In the decision of the ad hoc committee in Ioan Micula, Viorel Micula, SC European Food SA, SC Starmill
SRL and SC Multipack SRL v. Romania,54 the respondent sought to introduce into the record eight factual
exhibits concerning various enforcement proceedings. Following the claimants' objection on admissibility
grounds, the committee denied the request on the basis that 'the new evidence was not directly relevant
to the grounds for annulment'.55 In Churchill Mining Plc and Planet Mining Pty Ltd v. Republic of Indonesia,56
another ICSID ad hoc committee denied the claimant's application for annulment, which was premised on
the fact that it had been deprived of the opportunity to submit new evidence concerning a matter about
which the parties were specifically asked to present their views. When the tribunal found that the evidence
the claimant had submitted in the arbitration had been forged, it had sought the parties' views regarding
the Minnotte case (dealing with claims tainted by fraud), following which the claimant attempted to offer
evidence of its good faith. The committee determined that, given the seriousness of the tribunal's finding
of forgery, the claimant was rightfully precluded from invoking the right to be heard and submit evidence
of its good faith.
VI Conclusion
The concept of admissibility has had an increasingly important role in investment treaty arbitration. It
should be expected that respondent states will continue to rely on admissibility as a basis for dismissal of
investor claims, especially given the general reluctance of investment tribunals to deal with questions of
state officials' misconduct in the context of the unclean hands defence. Future investment tribunals will
have the opportunity to develop the concept in a way that fits the unique nature of the claims they are
called on to adjudicate.

Arbitration Chambers - Michael Nolan, Kamel Aitelaj and Elitza Popova-Talty