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International Courts and Dispute Resolution

Colombia’s Constitutional Court Says ICJ Rulings Are Not Self-Executing; Medellin v. Texas in Bogota?

by Julian Ku

In 2008, the U.S. Supreme Court held in Medellin v. Texas that rulings of the International Court of Justice are not “self-executing” under U.S. law.  For this reason, the Supreme Court refused to require Texas to stop executions that the ICJ had held in violation of U.S. treaty obligations.  It looks like Colombia’s Constitutional Court has followed that same approach with respect to Colombia’s Constitution:

Colombia’s constitutional court ruled on Friday that applying a decision by the International Court of Justice (ICJ) that granted Nicaragua a disputed area of Caribbean waters could not take effect without a treaty between the countries.

The court’s verdict upholds the position taken by Colombian President Juan Manuel Santos, who said the Hague-based ICJ’s decision was not applicable according to Colombia’s constitution without such a treaty, ratified by the Andean nation’s congress.

Colombia’s government has been pretty consistent in its public statements. It does not dispute the legal obligation represented by the ICJ’s ruling, but it does not believe the ruling can override domestic Colombian constitutional law either.  This court decision appears to endorse this dualist approach.   Of course, I have not read the ruling (anyone have a link?) and even if I had the ruling, I can’t read Spanish (anyone have a link and a translation?).  So I might be overstating things here. But it is worth looking into.

Alter Book Symposium: Reply by Karen Alter

by Karen J. Alter

[Karen J Alter is Professor of Political Science and Law at Northwestern University and co-direcor at iCourts Center of Excellence at the Copenhagen University Faculty of Law.]

Thanks so much to Tonya Putnam, Roger Alford, and Jacob Katz Cogan for their thoughtful commentaries.  I appreciate their kind words, and their comments reflect one of my hopes for this book; that it will be a springboard for researching new and important questions about international courts and international law.

I want to respond while echoing some of the questions they raise.

My starting point for The New Terrain of International Law was the following question:  If the ‘problem’ of international law is its lack of enforceability, then how does making the law enforceable affect the influence of international law?

I cut into this very big question by focusing on a new set of institutions that were designed to address the enforceability gap in international law.  The comments in this symposium push upon a number of choices I made as I then tried to make the project tractable.

My first choice was to focus on the universe of permanent international courts, co-opting the definition of an IC created by the Project on International Courts and Tribunals (PICT). Alford’s commentary openly worries that others will follow me in focusing on PICT courts.

I share this concern, which is why I discuss the limits of relying on PICT’s definition (p.70-77). For me, the most arbitrary part of the definition is its focus on permanent ICs. I decided to nonetheless catalogue permanent ICs because sticking to a plausible definition ensured that I was examining like institutions.

Another related question I sometimes get is why I include ICs that exist but have no cases. This is where the benefits of PICT’s definition arise.  We can see from my universe that permanence is neither necessary nor sufficient for IC effectiveness, and we can start to examine why like institutions have varied impact.  This is a topic that Laurence Helfer and I have pursued through our in depth research on the Andean Court and on Africa’s ICs.

I am already moving beyond PICT’s definition, as should we all. The New Terrain of International Law demonstrates the arbitrariness of focusing on permanent ICs by including as case-studies non-permanent bodies. The NAFTA case study, for example, discusses how the “permanent” WTO system proved no more able than the NAFTA system to address complaints about illegal US countervailing duties. The Chapter 5 discussion of the ICJ’s role in the Bahrain-Qatar dispute, and the same court’s ineffectiveness in resolving US-Iranian disputes, shows again that being a permanent IC, with preappointed judges and the jurisdiction to issue binding rulings, still does not necessarily improve IC effectiveness.

Another step in moving beyond PICT’s definition is that Chapter 1 of the new Oxford Handbook on International Adjudication, which I co-authored with the author of PICT’s definition, Cesare Romano, excludes permanence from the definition of “adjudicatory bodies.”

A second choice was to use structured case studies as the mode of investigating how the existence of an IC contributes (or not) to changes in state behavior in the direction indicated by the law.  Nico Krisch addresses indirectly my case-study choice in his reply on EJIL:Talk! (more…)

Marshall Islands Sues to Enforce Nuclear Non Proliferation Treaty; UK May Be Dragged Into ICJ

by Julian Ku

This lawsuit is mostly just grandstanding by a very small nation with the help of a savvy (but sloppy) US law firm.  But there is one possibly meaningful outcome.  It could result in an ICJ proceeding involving the United Kingdom.

The tiny Pacific nation of the Marshall Islands is taking on the United States and the world’s eight other nuclear-armed nations with an unprecedented lawsuit demanding that they meet their obligations toward disarmament and accusing them of “flagrant violations” of international law.

The island group that was used for dozens of U.S. nuclear tests after World War II was filing suit Thursday against each of the nine countries in the International Court of Justice in The Hague, Netherlands. It also was filing a federal lawsuit against the United States in San Francisco, naming President Barack Obama, the departments and secretaries of defense and energy and the National Nuclear Security Administration.

Reviewing the complaint and the ICJ applications, I conclude these cases are (mostly) going nowhere.

As for the U.S. complaint, the Marshall Islands is suing both the United States itself, and its President, and various military and civilian departments.  As an initial matter, there should be grave doubts about whether the NPT is self-executing. It is hard to imagine that it is.  And there are some grave doubts as to whether the U.S. has waived its sovereign immunity for this kind of claim in its own courts. And there are a variety of other problems: standing? political question? justiciability? that will no doubt make themselves felt here.

With respect to the ICJ applications, none of the target countries have accepted ICJ compulsory jurisdiction except the UK.  Indeed, the ICJ application against China mistakenly refers to it as the “Republic of China”, which is the name of the government in Taiwan, not China. I think Taiwan would be thrilled to be sued here, since they are not even allowed to join the ICJ or the U.N.  The China they want is the “People’s Republic”.

Putting both Chinas aside, the key here is that the UK has accepted compulsory jurisdiction of the ICJ, so this might require the UK to litigate this.  This seems like the one aspect of this case that might come to a real judicial outcome.

So if we get to the merits, I am deeply dubious.   What exactly is the “obligation to negotiate in good faith”? How can you ever tell if it has been violated?  The affidavit by Prof. Weston of the University of Iowa gives some content to this idea, but I don’t find it very persuasive.  

My basic thought is that this case is going nowhere, but will get some attention of the UK is forced to show up at the Hague and argue the merits.  Only then will we get to see if Prof. Weston’s idea tested by the ICJ.

Alter Book Symposium: Comment by Jacob Katz Cogan

by Jacob Katz Cogan

[Jacob Katz Cogan is the Judge Joseph P. Kinneary Professor of Law at the University of Cincinatti College of Law]

At the beginning of the fourth chapter of her new book The New Terrain of International Law: Courts, Politics, Rights, Karen Alter asks: “why [are] there . . . more international courts today than at any point in history”? (112). It is an interesting and important question. Seeking to “provide[] a partial explanation for the trends” in the proliferation during the past twenty-five years of the “new-style international courts” (which she documents in the preceding chapter), Professor Alter reviews “World History and the Evolving International Judiciary” (112). She argues, in short, that “at the end of World War II governments were able to reject proposals for compulsory international judicial oversight of their behavior” (112). Even so, “[c]hanges in legal practice in the United States and Europe during and after the Cold War meant that foreign legal and quasi-legal bodies increasingly adjudicated allegations of economic and human rights violations abroad” (112). Thus, “[g]iven the choice of European and American judicial review or international judicial review, many governments preferred [the latter] especially because international initiatives . . . created added incentives for governments to show progress toward democracy and human rights protection by embracing binding rules and international legal oversight” (113).

To make this argument, Professor Alter begins by dividing up the past hundred-plus years into three “critical junctures”: the Hague Peace Conferences, the end of World War II, and the end of the Cold War. She focuses in particular on the last two periods, taking each in turn. Her review of those eras recalls global as well as regional initiatives – the latter divided into (Western) Europe, Latin America, Africa, and Asia and the Middle East – recounting the successful, if uneven and oftentimes halting, establishment of international courts. Her story does not only turn on critical junctures, though. She recognizes that “between international legislative moments [i.e., the establishment of courts], lawyers and judges are adjudicating cases within the legal frameworks they have, and international secretariats are working with judges, advocates, and governments to adjust existing systems so as to address known problems” (117).

Based on this “whirlwind historical account” (159), Professor Alter “extracts . . . five general political factors that make governments more willing to consent to international judicial oversight” (154). First, she posits that “a distrust in government is the key impetus behind the political support of international judicial oversight” (154). In this regard, “[g]overnments only sign on [to courts] . . . once their legitimating suggestions of other options ring too hollow [to their populations] to be convincing” (154). Resort to courts, thus, is a function of “disenchantment with domestic checks and balances” (154-55). Second, “global initiatives have aided the implantation of international law in domestic legal systems, and thus facilitated the spread of embedded approach to international law enforcement” (155). Those initiatives – including the Washington Consensus, Convention Against Torture, the Rome Statute of the International Criminal Court, and the UN’s Millennium Development Goals – have pushed states to reform their domestic systems. Third, “the overlapping nature of national, regional, and international jurisdiction propels advancements at each level” (155). Thus, failures or successes in one part of the international system have repercussions elsewhere. Fourth, the “legal and political dynamics interact to produce institutional change between conjunctural moments” (156). Fifth, “the United States (and Europe) facilitate the spread of international law and international adjudication when leaders articulate, accept, and respond to legalist arguments” (157). Though Professor Alter seeks to draw out these factors and establish connections between “political forces” / “global forces” and the establishment of regional and global tribunals, she recognizes at the very conclusion of her discussion that “international judicial systems evolve slowly over time, propelled by conjunctural events and shifting legal practice” (160).

Like many social scientists, Professor Alter’s “history” is a search for principles or factors that explain why and when certain phenomena occur. (more…)

Alter Book Symposium: Welcome to the New World of Comparative International Courts

by Roger Alford

Let me join others in heaping praise on Karen Alter’s new book. It marks a growing trend of studying international law from an institutional rather than substantive perspective. My favorite aspect of the book is the lateral thinking that occurs when one examines international tribunals across disciplines. International law scholars typically labor in their own vineyards, missing opportunities for grafting new vines onto old roots. Alter steps back and examines world history from the perspective of new international courts and tribunals. It is a welcome addition.

Her book is a voice for the younger generation, who did not grow up studying international law “during the Cold War when power politics mattered more than law, and when most international legal institutions were virtual entities that barely met and rarely said anything of political or legal consequence.” (p. xix). A younger generation of scholars embraces the cornucopia of international tribunals in all their variety, and will soon treat international dispute resolution as a separate and distinct transubstantive body of international law. We are moving in that direction with the development of the emerging field of global administrative law. But future decades will witness a greater emphasis on procedural rather than substantive international law, and comparative international courts will be a new specialty. Today it is rare to take a course entitled “International Courts and Tribunals.” Today we do not compare across international courts questions such as jurisdiction, standing, evidence, judicial selection, remedies, and enforcement of judgments. Future generations will. The New Terrain of International Law is a major contribution in that direction.

Of course, there are problems with Alter’s book. Her choice of tribunals borrows from the Project on International Courts and Tribunals’ typology, which excludes international tribunals that are not permanent. She concedes that excluding temporary international tribunals is rather arbitrary, (p. 76), but nonetheless limits her typology to only twenty-four permanent international tribunals. Given the magnitude of the task set before her, this is understandable. But I fear that her work will continue an ill-advised trend of excluding tribunals that are not permanent. Rather than including permanency as a threshold requirement, it is far preferable to address it as a variable, similar to geographic reach or private initiation of disputes. Many temporary international courts are simply too important to ignore. Just as any historical analysis would never exclude the temporary tribunals such as the Jay Commission, the Alabama Commission, the PCIJ, or the Nuremberg or Tokyo Tribunals, one should never claim that a comprehensive study of modern courts and tribunals is complete without including tribunals such as the Iran-United States Claims Tribunal, the United Nations Compensation Commission, the Eritrea-Ethiopia Claims Commission, or the Special Court for Sierra Leone. Excluding such tribunals, but then including other temporary tribunals (the ICTY and the ICTR) as well as relatively insignificant permanent tribunals such as ECCIS, EFTAC, and WAEMU only underscores the arbitrary nature of PICT’s and Alter’s typology. Even her case studies belie the problem, for she studies several of the temporary tribunals in her case studies, but then she does not include those same tribunals in her typology.

As an expert on international investment arbitration, let me also address another fundamental mistake in the book. Alter identifies ICSID arbitral bodies as administrative tribunals. She justifies this because the “investor dispute system can give rise to costly litigation and awards, to the point that litigation threats by investors can have a chilling effect on the local regulatory politics.” (p. 202). She suggests that ICSID tribunals function in a “morphed and perhaps unintended administrative review role.” (p. 211). All of this is correct, but it is purely incidental. At their core investment tribunals are focused on the economic consequences of state action. In reality, ICSID tribunals function as international economic courts akin to the WTO. Like other international economic courts, the subject matter of investment arbitration is limited to economic issues such as trade, foreign investment regulation, contract disputes, intellectual property rights, and business law (p. 85). The basic template of an ICSID tribunal is distinct from both the WTO and ECJ models discussed in the book (p. 90), allowing private initiation of disputes before supranational courts without a preliminary ruling mechanism. But an ICSID tribunal is no more of an administrative review court than the ECJ or the WTO, which as she notes, also function as systems of administrative and constitutional review challenging community acts in front of supranational courts (p. 90). In my view it is better to categorize international tribunals based on their core objectives rather than their incidental effects.

Karen Alter deserves hearty congratulations for her excellent work. If you read the book, you will be introduced to an increasingly important field of international law. You will be ushered into the new world of comparative international courts.

Alter Book Symposium: Comment by Tonya L. Putnam

by Tonya L. Putnam

[Tonya L. Putnam is an Assistant Professor at the Department of Political Science at Columbia University]

I’m very pleased to have been asked to contribute my thoughts on Karen Alter’s The New Terrain of International Law. Alter’s cogently argued new book exemplifies what well-executed interdisciplinary scholarship can achieve. It puts into productive dialogue several core preoccupations of political scientists, international lawyers, and practitioners as they relate to the growing universe of international courts (ICs). Not only does the resulting analysis map the outputs of, and relationships between intensively studied ICs like the ECJ, the ECtHR, and the WTO panel system, and more recently created, and less well-known, ICs and court-like bodies, it simultaneously theorizes the political interactions that create, sustain, confound, and (at times) transform their activities. From it we gain a compelling picture of how new-style ICs are using international law to reshape political interactions spanning the interstate to the local level around issues from property rights to human rights.

The contributions of The New Terrain of International Law are too many to enumerate in detail. In the space I have here, therefore, I focus on two areas where future scholars can benefit from the foundation Alter lays in this volume. I then propose a set of questions about whether further proliferation of ICs may begin to complicate international affairs.


Alter Book Symposium: The New Terrain of International Law

by Karen J. Alter

[Karen J Alter is Professor of Political Science and Law at Northwestern University and co-direcor at iCourts Center of Excellence at the Copenhagen University Faculty of Law.]

The New Terrain of International law: Courts, Politics, Rights uses the universe of operational permanent international courts (ICs), those with appointed judges that stand ready to receive cases, as a laboratory to explore the changing reach and influence of international courts in contemporary politics. In 1989 when the Cold War ended, there were six operational ICs. Today there are more than two-dozen that have collectively issued over thirty-seven thousand binding legal rulings. The New Terrain of International Law shows how today’s international courts differ fundamentally from their Cold War predecessors. Most ICs today have ‘new-style’ features, compulsory jurisdiction and access for non-state actors to initiate litigation, which scholars associate with greater independence and political influence. Most ICs today have a mandate that extends beyond inter-state dispute resolution. Chapters in the book chart the uneven jurisdictional landscape of ICs today, and offer an account of the proliferation of new-style ICs.

The book is first and foremost a social science treatment of the growing role of ICs in politics today. I argue that the trend of creating and using new-style ICs signals a transformation from international law being a breakable contract between governments towards a rule of law mentality. ICs are not, I argue, the vanguard of this political change.  Rather, the trend towards creating new-style ICs reflects the reality that international law increasingly speaks to how governments regulate national markets, treat their citizens and conduct war, and both citizens and governments want these increasingly intrusive international legal agreements to be respected. For the most part, ICs are doing exactly what governments tasked them to do. International judges are resolving questions about the law, and holding governments and international organizations to international legal obligations.

My primary objective is to understand how and when delegating authority to ICs transforms domestic and international relations. (more…)

Joint Opinio Juris-EJIL:Talk! Book Symposium this week

by An Hertogen

This week we are working with EJIL:Talk! to bring you a symposium on Karen Alter‘s (Northwestern) book The New Terrain of International Law: Courts, Politics, Rights (Princeton University Press). Here is the abstract:

In 1989, when the Cold War ended, there were six permanent international courts. Today there are more than two dozen that have collectively issued over thirty-seven thousand binding legal rulings. The New Terrain of International Law charts the developments and trends in the creation and role of international courts, and explains how the delegation of authority to international judicial institutions influences global and domestic politics.

The New Terrain of International Law presents an in-depth look at the scope and powers of international courts operating around the world. Focusing on dispute resolution, enforcement, administrative review, and constitutional review, Karen Alter argues that international courts alter politics by providing legal, symbolic, and leverage resources that shift the political balance in favor of domestic and international actors who prefer policies more consistent with international law objectives. International courts name violations of the law and perhaps specify remedies. Alter explains how this limited power–the power to speak the law–translates into political influence, and she considers eighteen case studies, showing how international courts change state behavior. The case studies, spanning issue areas and regions of the world, collectively elucidate the political factors that often intervene to limit whether or not international courts are invoked and whether international judges dare to demand significant changes in state practices.

From our side, Tonya Lee Putnam (Columbia – Political Science) and Jacob Katz Cogan (Cincinatti – Law) will provide comments, followed by Karen’s response.

Across the Atlantic, comments will be provided by Antonios Tzanakopoulos (Oxford) and Nico Krisch (IBEI).

As always, we welcome readers’ comments!

Thoughts on the Ukraine Ad Hoc Self-Referral

by Kevin Jon Heller

As readers no doubt know, Ukraine has accepted the ICC’s jurisdiction on an ad hoc basis for acts committed between 21 November 2013 and 22 February 2014. The self-referral has already led to a good deal of intelligent commentary — see, for example, Mark Leon Goldberg’s discussion of the politics of an ICC investigation here and Mark Kersten’s convincing argument that Russia may not be particularly opposed to an ICC investigation here. I just want to add a few additional thoughts.

To begin with, I remain troubled by the insistence of Ukraine’s Constitutional Court that Ukraine cannot delegate its adjudicative jurisdiction to an international court. As it said in 2001:

Article 124 of the Ukrainian Constitution states that the administration of justice is the exclusive competence of the courts and that judicial functions cannot be delegated to other bodies or officials. The Constitutional Court noted that the jurisdiction of the ICC under the Rome Statute is complementary to national judicial systems. However, under Article 4(2) of the Rome Statute, the ICC may exercise its functions and powers on the territory of any State party, and under Article 17, the ICC may find a case to be admissible if the State is unwilling or unable genuinely to carry out the investigation or prosecution. The Court concluded that jurisdiction supplementary to the national system was not contemplated by the Ukrainian Constitution. Hence, the amendment of the Constitution is required before the Statute can be ratified.

Parliament’s acceptance of the ICC’s jurisdiction, even on an ad hoc basis, seems specifically foreclosed by the Constitutional Court’s judgment. Ukraine’s President and Parliament clearly don’t care about that inconvenient fact; will the ICC? Martin Holtermann may be right — the ICC may simply defer to Ukraine’s President and Parliament. But I can help but think it would be unseemly for an international court like the ICC to simply ignore a clear judgment issued by the highest court in a state purporting to accept its jurisdiction. At the very least, Fatou Bensouda should take the Ukraine’s internal conflict into account when she decides whether to open a formal investigation — you can bet that any suspect wanted by the ICC would challenge the legality of the self-referral in Ukraine’s domestic courts, litigation that could make it very difficult for ICC proceedings to go forward.

Relatedly, I think it’s important to remind ourselves that Ukraine’s self-referral does not mean the OTP will open a formal investigation into the situation. Diane Amann writes today that the self-referral shows “Europe is on [the] ICC docket.” That’s true — but only in the formal sense. As Mark Kersten noted in February, Europe has been on the ICC docket for a long time in terms of preliminary investigations. After all, the OTP announced the Georgia investigation in August 2008 — nearly six years ago. (Its Afghanistan investigation has been plodding along even longer, since 2007.) That hasn’t quelled the voices that have been complaining — with justification — that the ICC has been overly obsessed with Africa. So unless and until the OTP decides to open a formal investigation into the situation in Ukraine, the country’s self-referral is unlikely to have any positive effect whatsoever on the Court’s African reputation.

Finally, a brief thought on the temporal limits of the self-referral. I don’t think the ICC will reject the referral on the ground that it is too carefully tailored to ensure only one side of the conflict. (A major problem with Comoros’s Mavi Marmara state referral.) The temporal limits, however narrow, make some sense — the referral begins when Yanukovych announced Ukraine was abandoning the agreement with the European Union and ends when Yanukovych fled the country. Should Ukraine have accepted the ICC’s jurisdiction for a longer period — most notably, to include Russia’s invasion of Crimea? I had an interesting twitter debate earlier today on that issue with a bunch of smart Court-watchers, including Ryan Goodman, Eugene Kontorovich, Mark Kersten, Martin Holtermann, and David Kaye. I pointed out that it’s difficult to see what international crimes Russia committed during the invasion, other than the non-prosecutable crime of aggression. Ryan replied that a longer self-referral could give the ICC an opportunity to address important issues in the law of occupation. (See also his post here.) That’s absolutely true — but only if Russia actually violates the law of occupation, which seems unlikely given the popularity (certainly not uniform) of the invasion and annexation within Crimea itself. The wildcard is the crime that Eugene mentioned during our discussion — the transfer of civilians into occupied territory. I have no idea whether Russia intends to directly or indirectly transfer Russians into Crimea; Eugene seems to think it does, and I will defer to his greater knowledge of the situation. But my position with regard to that possibility is the same as my position on Israel’s transfer of civilians into the West Bank: whatever the merits of the allegations, the war crime is legally uncertain and factually difficult to prove, especially when the transfer is indirect instead of direct — which it is in the West Bank and would almost certainly be in Crimea. In the absence of other violations of the law of occupation, therefore, I am not sure the OTP would get involved.

I imagine we will have much more to discuss concerning the ICC and Ukraine in the weeks to come!

Guest Post: Law Of The Sea Tribunal Implies A Principle Of Reasonableness In UNCLOS Article 73

by Craig H. Allen

[Craig H. Allen is the Judson Falknor Professor of Law and of Marine and Environmental Affairs at the University of Washington.]

On April 14, 2014, the International Tribunal for the Law of the Sea (ITLOS) issued its ruling in the M/V Virginia G case (Panama/Guinea-Bissau), Case No. 19.  The dispute arose out of  Guinea-Bissau’s 2009 arrest of the Panama-flag coastal tanker M/V Virginia G after it was detected bunkering (i.e., delivering fuel to) several Mauritanian-flag vessels fishing in the Guinea-Bissau exclusive economic zone (EEZ) without having obtained a bunkering permit.  The case presented a number of issues, including whether the 1982 UN Convention on the Law of the Sea (UNCLOS), to which both states are party, grants a coastal state competency to control bunkering activities by foreign vessels in its EEZ.

After disposing of objections raised over jurisdiction and admissibility (notwithstanding the parties’ special agreement transferring the case to ITLOS), the decision adds a substantial gloss to several articles of the UNCLOS, particularly with respect to Article 73 on enforcement of coastal state laws regarding the conservation and management of living resources in the EEZ. Among other things, Panama alleged that Guinea-Bissau violated each of the four operative paragraphs of Article 73 in its boarding, arrest and confiscation of the Virginia G and by seizing and withholding the passports of its crew for more than 4 months. The tribunal’s holding can be summarized as follows:  (more…)

Using Investment Arbitration to Enforce WTO Commitments

by Roger Alford

plainpackagingI would like to continue the theme of the emerging convergence of investment arbitration and international trade. In my previous posts (discussed here and here) I discussed the prospect of using trade remedies to enforce investment arbitration awards. Another key example of convergence addresses the emerging trend of relying on investment arbitration to enforce international trade rights. As discussed in my recent article, despite the assumption that international trade disputes must be resolved before the WTO DSB, the existence of broad umbrella clauses in BITs present a promising vehicle for enforcing investment commitments in trade agreements.

Of course, the scope of umbrella clauses is dependent on the language in particular BITs, which varies widely from one treaty to the next. Accordingly, there is no uniform understanding as to the meaning of umbrella clauses. Narrow umbrella clauses are unlikely vehicles for vindicating international trade rights. A treaty commitment such as that addressed in SGS v. Philippines to observe any obligation a Contracting State “has assumed with regard to specific investments” is unlikely to encompass legislative measures or treaty commitments. By contrast, broad umbrella clauses are better candidates for vindicating trade rights, such as the BIT clause at issue in Noble Ventures, Inc. v. Romania, which committed Romania to “observe any obligation it may have entered into with regard to investments.”

ICSID tribunals have interpreted broad umbrella clauses to give investors treaty rights with respect to unilateral undertakings of the State embodied in municipal law. In CMS Gas Transmission Co. v. Argentina, the tribunal concluded that utility tariffs designed to attract foreign investment were “legal … obligations pertinent to the investment.” In LGE v. Argentina, the tribunal concluded that abrogation of guarantees made to investors in a statutory framework gave rise to liability under the umbrella clause. In Enron v. Argentina, another tribunal concluded that the umbrella clause referred to “any obligations regardless of their nature.” This included not only contractual obligations, but also “obligations assumed through law or regulation” that are “with regard to investments.” In Sempra Energy International v. Argentina, a tribunal found that major legal and regulatory changes introduced by the State as part of its public function constituted treaty violations under the umbrella clause. Finally, in SGS v. Paraguay, a tribunal interpreted a broad umbrella clause as creating “an obligation for the State to constantly guarantee observance of its commitments entered into with respect to investments of investors of the other party. The obligation has no limitations on its face—it apparently applies to all such commitments, whether established by contract or by law, unilaterally or bilaterally.”

Note that these sweeping pronouncements do not require that a State’s commitment reference a specific investment or contract. As long as legislative or executive measures relate to the promotion or regulation of investments, they constitute unilateral undertakings covered by a broad umbrella clause. Such ICSID jurisprudence has led María Cristina Gritón Salias to conclude in this book that “tribunals overwhelmingly accept the application of umbrella clauses to obligations assumed unilaterally by host States,” whether those undertakings are “made through legislation or otherwise.” Likewise, Darius Chan has opined here that “the current tide of jurisprudence concerning umbrella clauses is in favor of such clauses encompassing host State commitments of all kinds.”

Assuming such interpretations are correct—which is by no means clear—this has significant implications for the WTO. If trade obligations are subject to investment arbitration, it would authorize private parties to initiate trade cases. Private rights of action through investment arbitration would supplement the diplomatic espousal of claims before the WTO.

This is precisely what one foreign investor has argued with respect to alleged WTO violations as a result of Australia’s plain-packaging laws. On November 21, 2011, Philip Morris Asia Ltd. filed an investment arbitration claim against Australia pursuant to the Hong Kong-Australia Bilateral Investment Treaty. The central contention of Philip Morris is that Australia’s plain packaging legislation violated various international obligations. Among the claims it filed is one under the broad “umbrella clause” in the BIT, which provides that “[e]ach Contracting Party shall observe any obligation it may have entered into with regard to investments of investors of the other Contracting Party.” According to the Notice of Arbitration:

This [umbrella clause] obligation is broader than specific obligations … made by the host State to investors…. It also encompasses other international obligations binding on the host State that affect the way in which property is treated in Australia…. [T]he relevant obligations are those enshrined in TRIPS, the Paris Convention, and TBT. [Claimant] as an owner of the investments is entitled to expect Australia to comply with its obligations pursuant to those treaties. By adopting and implementing plain packaging legislation, Australia has failed to observe and abide by those obligations.”

In response, Australia argued that:

The meaning and scope of such provisions is a matter of great controversy. However it is clear in the instant case that … the “umbrella clause” in Article 2(2) cannot be understood as encompassing general obligations in multilateral treaties…. Rather … the “umbrella clause” … only covers commitments that a host State has entered into with respect to specific investments…. [T]he obligations under the multilateral treaties … are not “obligations” which have been entered into with regard to investments of investors” of Hong Kong, but are rather obligations that operate on the inter-State level, with their own particular inter-State dispute resolution procedures.

It is too early to assess the likely success of such claims, but if the recent “umbrella clause” jurisprudence is accurate the claims are at least colorable.

This potential convergence of trade and arbitration has profound implications for the resolution of WTO violations. An arbitration panel liberally construing a broad umbrella clause could transform how WTO obligations are adjudicated. Exactly how would the adjudication of WTO obligations through investment arbitration alter the landscape? Here are a few thoughts.

First, umbrella clauses in BITs could create a private right of action for resolving WTO disputes. Investment arbitration circumvents the traditional barriers to initiating a WTO dispute. Diplomatic espousal is no longer a reliable check on the pursuit of unmeritorious claims. Through umbrella clauses foreign investors could seek recourse for violations of investment obligations that form part of WTO disciplines.

Second, with WTO dispute settlement the Member States control all decisions with respect to adjudication and resolution of the dispute. Investors may prefer an alternative dispute settlement process that places such decisions within their control. The incentives to settle an investment dispute depend on satisfying investors concerns rather than satisfying the disputing Member States’ concerns.

Third, with limited exceptions, the WTO prohibits unilateral trade remedies. Article 23 of the DSU provides that Member States “shall not make a determination to the effect that a violation has occurred … except through recourse to dispute settlement in accordance with the rules and procedures of this Understanding.” Investment arbitration is not a unilateral remedy imposed in response to a WTO violation, but neither is it WTO dispute settlement. Investment arbitration may provide a vehicle for compensating or attenuating the harm caused to investors without offending the WTO restrictions on unilateral trade remedies.

Fourth, WTO remedies are prospective, while investment arbitration remedies may be retroactive. The goal of the WTO adjudication is to bring Member States into conformity with their trade obligations. The goal of investment arbitration is, consistent with traditional understandings of state responsibility, to “wipe-out all the consequences of the illegal act and reestablish the situation which would, in all probability, have existed if that act had not been committed.”

Fifth, under the WTO dispute settlement process, any losses an investor suffers as a result of a Member State’s WTO violation are not compensable. WTO remedies contemplate compensation directly to a Member State or, failing that, the suspension of concessions paid directly to the Member State in the form of increased duties. With investment arbitration, international law violations result in monetary compensation due directly to the investor.

Thus, liberal interpretations of broad umbrella clauses that encompass investment commitments in WTO undertakings may prove to be an attractive avenue for future investment arbitration.

Engaging the Writings of Martti Koskenniemi

by Duncan Hollis

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Last Spring, Temple Law School was pleased to host a two day workshop on the scholarship of one of international law’s true giants — Martti Koskenniemi (simply put, I’m a big fan). Organized by my colleague, Jeff Dunoff, it was a great event with a wide-ranging conversation launching off Martti’s works in international legal theory, international legal history, fragmentation, interdisciplinary scholarship, ethics and the future of international law.  

Given how great the workshop was, I could not be more pleased to note that the accompanying papers have now been compiled and published in a single volume of the Temple International and Comparative Law Journal (vol. 27, no. 2). The full table of contents for the Symposium Issue can be found here

The papers include Jeff Dunoff’s framing introduction, a fascinating paper by Martti on the historiography of international law, and a slew of papers by renowned scholars, including Kim Scheppele, Tomer Broude, Sean Murphy, Mark Pollack, Rob Howse and Ruti Teitel, Samuel Moyn, Jan Klabbers, Andrew Lang and Susan Marks, Frédéric Mégret, and Ralf Michaels.  These papers address a number of themes that run through Koskenniemi’s work, including international law and empire; the fragmentation of international law; interdisciplinary approaches to international law; reading – and misreading – the tradition; and the international lawyer as ethical agent.  Both individually and collectively, the papers represent a significant effort to engage, explore, and extend the ideas found in Koskenniemi’s writings.

The special symposium issue is the first of what will be a tradition of yearly Symposia that will be organized by Temple faculty and published in the Journal.  As such, the Symposia marks a new form of collaboration between Temple faculty and students, and represent an experiment in academic publishing designed to provide students the experience of editing papers on cutting-edge research, and at the same time injecting faculty expertise into the selection and substantive editing of papers.