The Fork in the Road Revisited: An Attempt to Overcome the Clash Between Formalistic and Pragmatic Approaches

This article revisits one of the most controversial issues of international investment law, namely the question of the effect of fork-in- the-road (FITR) clauses contained in investment treaties. It provides a comprehensive and detailed examination of the relevant arbitral case law, highlighting the co-existence of two formalistic approaches (based respectively on the distinction between treaty and contract claims and the lis pendens-related triple-identity test) with the more pragmatic fundamental-basis test established by the ICSID tribunal in Pantechniki v. Albanania and subsequently endorsed in H&H v. Egypt. This contribution critically examines these two strands of case law, emphasizing both the interpretive flaws of formalistic approaches and the inherent vagueness and ambiguity of the fundamental-basis test. In an attempt to overcome the deadlock resulting from the clash between formalistic and pragmatic decisions, this article offers a functional analysis of FITR clauses, providing new insights and guidance to treaty drafters and interpreters.