Mechanisms to enforce obligations under the BIT

Swiss BITs provide for two types of dispute settlement mechanisms: ‘investor-state‘ dispute settlement mechanism, which addresses specific conflicts arising between an investor and the recipient country on an investment that has been made and a ‘state-state ‘ dispute settlement mechanism, which addresses disputes relating to the interpretation and application of the BIT.Both mechanisms involve an initial mandatory phase whereby the parties to the dispute consult with one another for six to twelve months for the purpose of reaching an amicable agreement. Generally speaking, mutually amenable solutions to investment-related disputes are usually found - with or without support of the authorities of the country of origin – already during this consultation phase. For cases where no agreement can be reached, both mechanisms provide for the possibility of submitting the case to independent international arbitration. The introduction of an investor-state dispute settlement mechanism in Swiss BITs (systematically included since 1990) serves to de-politicise investment disputes. The state-state mechanism is therefore only applicable in a subsidiary manner. In international practice, the state-state dispute settlement mechanism is rarely used.


Specialist staff
Last modification 19.01.2023

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