Cooling Off Period (Investment Arbitration)

by Aravind Ganesh

MPILux Working Paper 7 (2017)

Introduction: ‘Cooling off periods’, also known as ‘waiting periods’, are a feature of Bilateral Investment Treaty (‘BIT’) or state-investor arbitration, whereby parties seeking to initiate arbitrationproceedings are required to hold off for a specified period, during which an amicablesettlement should be attempted. A recent study estimates that some 90% of all BITs containclauses imposing such requirements (Pohl, Mashigo, and Nohen, 2012, 17). Similar practicesare found in other fields such as commercial arbitration, trade law, and the peacefulsettlement of international disputes (see Guyana-Venezuela Border Dispute Bryan Treaties 1913-14).