HILJ Online Symposium: Anthea Roberts Responds to Martins Paparinskis

[Anthea Roberts is an Associate Professor at the London School of Economics and Political Science and a Professor of Law at Columbia Law School.]

This post is part of the HILJ Online Symposium: Volumes 54(2) & 55(1). Other posts in this series can be found in the related posts below.

I want to thank Opinio Juris for hosting this symposium and Martins Paparinskis for taking the time to comment on this article. I highly respect Paparinskis’ work in the field, so I am grateful for his substantive engagement. I have two responses to his post.

1. Why is it important to develop hybrid theories?

As I have argued previously, investment treaty arbitration can be understood through many different paradigms, including traditional public international law, international commercial arbitration, public law, human rights law and trade law. A number of scholars, including Douglas and Paparinskis in two articles, have likewise sought to show that (1) the investment treaty system does not fit neatly into any one mold and (2) the application of different molds often leads to radically different solutions to concrete problems.

For instance, in Analogies and Other Regimes of International Law, Paparinskis recognizes that “investment law partly borrows and partly diverges from pre-existing regimes of international law” so that an interpreter is “required to determine the degree of similarity and difference so as to elaborate the ordinary meaning of both particular terms and broader structures.” Moreover, he continues, “the interpreter may plausibly rely on different approaches, with importantly different implications for the meaning and operation of particular elements of investment law.”

The reason we need to develop a hybrid theory of the investment treaty system is that we want to find a way to develop a coherent approach to resolving contentious problems. Many of the most vexing problems in the investment treaty system, including the permissibility of countermeasures, the effect of waivers, the scope of state-to-state arbitration, and the permissibility of joint termination with immediate effect, all implicate the same underlying structural issues about what rights have been given to investors and what rights have been retained by states.

Instead of trying to resolve each controversy on an issue-by-issue, case-by-case basis, as Paparinskis would propose, a hybrid theory tries to sketch out more broadly when interpreters should look to different paradigms as relevantly similar and when they should distinguish them as relevantly distinct. We need a theory that best matches the investment treaty system’s features and that will permit multiple issues to be resolved in a more consistent and principled way.

As academics, this is a job that we should take on. The first step in the process was to identify that the investment treaty system has distinct characteristics which make multiple paradigms available but which mean that none fit precisely. The second step is to try to find a hybrid theory that seeks to combine the most fitting elements of each paradigm into a structure that best suits the system at hand. People can disagree on the content of a hybrid theory, but everyone is groping to get there in practice.

One of the differences between being an academic and being a practitioner is that an academic can say “I can think of three ways of analyzing that problem and they lead to different results – isn’t that interesting.” A practitioner has no such luxury. They have to take a position so they have to work out which framework or combination of frameworks to argue for (if they are advocates) or apply (if they are arbitrators). The investment treaty system may not provide ready answers, but it does require immediate action.

The problem is that practitioners usually have to make these decisions in the context of dealing with a single issue in a single case. For advocates, this can result in the self-interested use of paradigms to achieve a particular result in that case. For arbitrators, having authority to decide a narrow issue only can cause tunnel vision about how the issue fits into or might affect the broader system. It is helpful if academics can step back and recognize that certain systemic issues are implicated by a host of problems in the investment treaty system and start sketching a hybrid theory that would provide a more systematic way of drawing on different theories that might then be applied in different concrete cases.

2. Swings, roundabouts and “interpretion catalysts”

Paparinskis makes a very interesting observation about how the United States might have won on the swing (in the Ecuador v US case) but come to lose on the roundabout (in the interpretation of the relevant clause) through its decision to stay silent and not protest Ecuador’s interpretation of the treaty. This raises a very important issue about states having multiple, and sometimes conflicting, interests and the role that interpretation catalysts play in determining how their interests are weighed and presented in a given scenario.

The United States is a model state for decision-making in the investment treaty system because: (1) it has to internalize the pros and cons of being a major capital importer and exporter; (2) it has engaged in repeated interactions with the system through treaty negotiations and cases, so it has developed considerable expertise in the area; and (3) it has established an interagency process through which different parts of the government (e.g., USTR, the State Department, and the Department of Justice) come together with their different perspectives to work out how to approach issues such as revising the US Model BIT or clearing pleadings in the Ecuador v United States case.

In an ideal world, all of these interests would balance themselves out so that the United States would come up with a position that best suited its interests across the range of existing and future possible scenarios. In reality, however, the way in which an issue presents itself, the U.S. stance in relation to the specifics of that case, and who ends up representing the United States in formulating its official position, all have a significant impact on the approach the United States ends up taking. Even if the United States’ interests remain constant, the way in which an issue arises is likely to affect whether it takes a position and what position it takes.

I draw here on an excellent article by Rebecca Ingber about Interpretation Catalysts and Executive Branch Legal Decisionmaking, which should be required reading for anyone thinking about the disaggregated state and how state practice and opinio juris are actually formed. Ingber provides a compelling explanation of how “interpretation catalysts” – which she defines as distinct triggering events compelling the U.S. government to consider, determine, and potentially assert interpretations of international law – play a critical role in influencing the executive’s ultimate substantive legal decisions.

Although Ingber applies her theory to laws of war and human rights issues, I see a similar phenomenon playing out with respect to the United States in its briefings in the Loewen v United States and Ecuador v United States cases and in its amicus submissions in the BG Group v Argentina case. Although the United States does more than any state that I know to internalize its interests through the interagency process, it makes a difference whether, the first time that the United States has to confront an issue publicly, it is in an offensive or defensive posture. It also matters whether the pen is held by USTR, the State Department, or the Department of Justice.

This means that we should expect to see the United States take positions at times where it wins on the swings even though it ultimately loses on the roundabout. In an ideal world, it would do this only if the ultimate loss is outweighed by the immediate win. In reality, the picture is often murkier, with some attempt being made to weigh present risks and future interests, but with the decision-making process still being skewed in predictable ways. This is important because legal interpretations given by a state count as state practice, so they have the potential to influence developments outside the specific case in which the interpretation arises.