Bifurcation in Investment Treaty Arbitration

Bifurcation refers to splitting an arbitration into two separate phases, and most often involves splitting jurisdictional issues from the merits. A tribunal’s decision on whether to bifurcate is one of the most critical procedural inflection points in an investment treaty arbitration. If a tribunal bifurcates and dismisses the claims on jurisdiction, the parties avoid briefing the merits, which can save many months (if not years) of time and millions of dollars in legal fees. But, if the tribunal bifurcates and finds jurisdiction, the parties must then embark on a new, separate merits procedure, extending the overall arbitral calendar and increasing costs substantially. It follows that a tribunal’s bifurcation decision is a pivotal moment in an investment treaty arbitration.

This chapter focuses on the legal framework that tribunals apply when considering whether to bifurcate jurisdictional objections from the merits (Section II), and the strategic issues parties consider when deciding to seek or to resist jurisdictional bifurcation (Section III). Lastly, we briefly explore the less common practice of bifurcating proceedings to separate the analysis of damages from the merits phase (Section IV).

Reproduced with permission from Law Business Research Ltd
This article was first published in June 2019