By Martins Paparinskis
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168 The distinction should be drawn between the wrongful conduct of the host State regarding the substantive treatment of the investor and the non-compliance with the investor-State dispute settlement obligations. 169 Since the obligation to comply with the award follows from the international treaty itself, it would seem that the requirement of exhaustion is not applicable. 170 De lege ferenda, it could be argued that the recognition of the right of individuals to invoke the responsibility of the host State before international courts and tribunals should extend the requirement of ‘exhausting local remedies’ to ‘exhausting remedies’, before the home State can engage in diplomatic protection.
152 Crawford ‘Retrospect’, above n 119, 887–888. 153 Simma and Pulkowski, above n 50, 525. org by guest on February 16, 2011 It was argued above that the right to diplomatic protection is not excluded in non-ICSID treaty arbitrations: the suspension of diplomatic protection is a treaty rule particular to the ICSID Convention and does not reflect customary law; while it is correct that the investor is entitled to directly invoke the host State’s responsibility, it does not exclude its home State’s right to do so; and investment arbitration does not replace diplomatic protection because, despite the factual resemblance, in legal terms they do not cover the same subject matter and States have not treated them in such a manner.
173 The rule of exhaustion of local remedies reflects the competing interests of a number 302 I N V E S T M E N T A R B I T R AT I O N A N D G. Countermeasures and procedural conditions of application Taking into account the presence of the State-State dispute settlement clauses both in ICSID Convention and in most investment protection treaties,175 it is appealing to imagine a kind of procedural framework that would permit resource to countermeasures only after the failure of all formalized methods of dispute settlement.