Choice of law applicable to the merits of the disputes arising from the international natural gas contracts in settlement through arbitration

A natural gas project consists of various stages from exploration and production to sale, and there are different types of contracts for each stage. Investment contracts are contracts signed between the host state and the investor, and could be exposed to political risks of the host state. International investment treaties are signed between the states in order to eliminate these risks and to ensure the international responsibility of the host state for investments. The umbrella provisions and comprehensive dispute resolution mechanisms included in these treaties enable the investor to take the investment contract breach to investment arbitration. On the other hand, international commercial contracts for the sale of natural gas are signed between private persons. Disputes arising from these contracts are also generally taken to international arbitration as in investment contracts. Applicable law in both investment and commercial contracts meets the expectations and predictions of the parties and increases efficiency. When applicable law is not specified by the parties, it is is determined by arbitrators. The arbitration decisions reveal that arbitrators adopt different approaches in these two different types of contracts. Key Words: Applicable Law, International Arbitration, International Natural Gas Contracts, Investment Contracts, Investment Treaties