Symposia

Book Symposium Investment Law: A Reply to van Aaken

[Dr Anastasios Gourgourinis is Lecturer in Public International Law at the National and Kapodistrian University of Athens Faculty of Law, and Research Fellow at the Academy of Athens] I am very grateful to Anne van Aaken for her challenging and insightful comments on my chapter “Reviewing the administration of domestic regulation in WTO and investment law: the international minimum standard as 'one standard to rule them all'?”, as well as for providing me the opportunity to further expand and explain my argument. She essentially poses two questions: whether the simultaneous qualification of traders as investors and vice versa, is feasible; and whether the arbitral interpretations of the fair and equitable treatment standard (FET) contained in international investment agreements (IIAs) reconfigure the content of the customary minimum standard of treatment of aliens (MST).  Based on the above, van Aaken questions my conclusion that, under the influence of MST  permeating the trade and investment disciplines, the same set of facts regarding the administration of domestic regulation may indeed give rise to successful challenges brought before either the WTO dispute settlement body or investment arbitration tribunals. I will hence attempt to address these concerns.

Traders qua investors and vice versa

From the outset, I must note that the chapter’s analysis was founded upon (rather than intending to scrutinize and put to the test) the working hypothesis that foreign traders may qualify as foreign investors under IIAs, and vice versa. In other words, this constituted a scenario which is plainly feasible, rather than omnipresent, in so far as the realities of international trade and investment are concerned. Anne van Aaken, on the one hand, suggests taking a functional view, based on economic and management theory, so as to further explain and expand on this proposition, and rightly so: I do agree that there is much more to be written in this respect, deserving special treatment in a separate study where multidisciplinary perspectives may indeed contribute significantly. On the other, van Aaken cautions about the normative aspects of my hypothesis, i.e. whether foreign traders may, in principle, qualify as investors under IIAs, especially in view of the very recent Apotex v. USA Award on Jurisdiction and Admissibility  under Chapter Eleven of the North American Free Trade Agreement (NAFTA). This is where we disagree, for a number of reasons.

Book Discussion Investment Law: Comments on Gourgourinis

[Prof. Dr. Anne van Aaken is Professor of Law and Economics, Legal Theory, Public International Law and European Law at the University of Sankt Gallen, Switzerland.] Freya Baetens has done a terrific job of collecting and editing papers by young as well as very versed scholars on a timely topic; namely the integration of international investment law in public international law. Lurking behind is the more general discussion on fragmentation of international law; an issue considered so seriously by the international community that the International Law Commission constituted a study group led by Martti Koskenniemi which issued its report in 2006 and still sets the basic frame for discussion. Surely, investment law was never meant to exist in clinical isolation, and detailed accounts on the relationship between investment law and other law are always helpful. Part IV of the book deals with international investment, international trade and developing countries. I comment on one article: "Reviewing the administration of domestic regulation in WTO and Investment Law: The International Minimum Standard as ‘one standard to rule them all’?” by Anastasios Gourgourinis. Gourgourinis aims to show that although trade and investment regimes are different on many accounts, they share a common core: the customary international law standard of minimum standard of treatment of aliens (MST). By juxtaposing equitable treatment provisions he submits that “the same set of facts regarding the administration of domestic regulation can give rise to successful challenges brought before either the WTO or investment arbitration tribunals.” He rightly points out that trade and investment cannot be viewed separately from each other in a globalized economy. His conclusion, drawing on case law especially in investment law, is that traders can also qualify as investors. I have two comments on that. First, I would suggest that this argument could be strengthened by - based on economic and management theory - taking a more functional view on why – with a view on domestic regulation – it is partially irrelevant for economic activity whether domestic regulation is targeting trade or investment. Both kinds of regulation are, depending on the sector and the type of investment/trade, partially substitutable from a business actor´s point of view. Second, I would caution about the normative conclusion of the simultaneous qualification of traders also as investors. Whether traders qualify as investors has been discussed for a long time (just as the other criteria for an investment), but the question is especially delicate in the light of the Apotex v United States tribunal (NAFTA, Decision from June 2013, that is after publication of the book). The tribunal stated that Apotex's "activities with respect to the contemplated sales of its . . . products in the United States are those of an exporter, not an investor," declining jurisdiction. Regardless of whether this decision is right or wrong, what is important is to discuss the consequences (economic and otherwise) of granting investor status to traders, conflating trade and investment regimes through the back-door. Economic as well as political economy reasons might exist why states don’t treat traders and investors alike, in spite of functional partial equivalence. What follows is an in-depth and thorough analysis of MST as custom as well as the norms and case-law of WTO law and investment treaties. Gourgourinis argues that the MST, since it applies to all aliens and since it is custom, applies to investors and traders alike. It constitutes a “floor” of treatment and permeates, in his view, the proper administration of justice of domestic regulation vis-à-vis aliens. He does a tremendous job in selecting the norms in the WTO agreements which have MST cores for transparency and procedural justice, e.g. Art. X: 3 GATT or Art. VI GATS, uncovering minimum due process guarantees inherent in those norms. He does the same for norms containing the prohibition of arbitrariness, e.g. Art. XX GATT and Art. XIV GATS. He then attempts to demonstrate that those “provisions of the WTO agreements as minimum standard of treatment of foreign traders are essentially identical to the (customary) international minimum standard of treatment of foreign investors,” thereby zooming up the MST. He then looks at the “fair and equitable treatment” standard (FET) and its interpretation in investment law, although he acknowledges that depending on the respective treaty FET is either referring to MST or it is viewed as s self-standing standard. I take issue with equating the MST with FET or rather the other way around: redefining the MST through certain interpretations of the FET or the WTO provisions.

Book Symposium Investment Law: The International Minimum Standard of Treatment of Aliens and Administration of Domestic Regulation under WTO and Investment Protection Law

[Dr Anastasios Gourgourinis is Lecturer in Public International Law at the National and Kapodistrian University of Athens Faculty of Law, and Research Fellow at the Academy of Athens] Let me start by extending a warm thanks to Freya Baetens for her overall care, diligence and patience as the editor of Investment Law within International Law: Integrationist Perspectives, the publication of which is very timely and indeed. I am also grateful to Opinio Juris for hosting this Book Symposium, as well as to Anne van Aaken, who I am privileged to have as commentator of my chapter entitled “Reviewing the administration of domestic regulation in WTO and investment law: the international minimum standard as 'one standard to rule them all'?”. In this post, I briefly summarize the chapter’s key points. The interaction between the legal standards established under the World Trade Organization (WTO) agreements and international investment agreements (IIAs) has steadily and increasingly become important in international judicial practice. Perhaps the most recent and controversial illustration of this interaction can be found in the plain packaging disputes against Australia, currently ongoing in parallel before the WTO dispute settlement panels (see here, here, here and here), as well as arbitral tribunals established under bilateral investment treaties (see here). For, what all these disputes share in common is the set of the underlying facts complained of, i.e. Australia’s Tobacco Plain Packaging Act 2011, and related laws and regulations, allegedly in violation of Australia’s obligations both under the WTO covered agreements and the Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments of 1993. Hence, in the greater context of the debate regarding the relationship between WTO and investment protection law, Nicholas DiMascio and Joost Pauwelyn have undertaken a thorough study on non-discrimination standards in the WTO covered agreement and IIAs. They persuasively concluded that ‘investors cannot assume that they will prevail on a national treatment claim before an investment tribunal even if their country has earlier prevailed on the same claim at the WTO, and vice versa’ (p. 88). But does the same apply also with respect to equitable standards of treatment also found both in WTO agreements and IIAs?

Book Symposium Investment Law: International Criminal Responsibility of Transnational Corporate Actors Doing Business in Zones of Armed Conflict

[Dr. Philipp Ambach is the Special Assistant to the President of the International Criminal Court. The views expressed are those of the author alone and cannot be attributed the International Criminal Court.] The vast majority of armed conflicts of our times is, if not based on, at least closely tied with the economic interests of the belligerent parties or stakeholders behind the scenes. Business corporations which maintain trade relations with partner groups or entities that are, at the same time, engaged in an internal or international armed conflict may become directly or indirectly involved in the commission of serious crimes. Many international corporate actors provide financial resources to regional armed groups through the trade of goods that are the product of exploitation of natural resources in conflict zones, such as gold, diamonds, oil, uranium and other precious or strategic resources (so-called ‘resource wars’). These economic transactions often destabilize the region affected by armed conflict and even put oil on the fire of a looming conflict if the economic transactions serve to strengthen one or the other or both warring parties in the conflict. Those economic actors involved may incur criminal liability if they are aware that their goods or funds serve to provide these armed groups with weapons or other means of warfare subsequently used against civilians. The crimes committed may amount to international crimes such as war crimes, crimes against humanity or genocide. In such cases, corporate actors may even come under scrutiny by the International Criminal Court (‘ICC’) for their participatory role in such crimes, if the individual criminal liability of the person(s) in control of such financial transactions on behalf of a corporate actor can be established. International courts and tribunals have devoted little to no attention to the issue since the post-World War II criminal proceedings held against German businessmen who had been economically involved in the war (See the discussion by Nerlich). Also the UN ad hoc-Tribunals for the former Yugoslavia and for Rwanda, set up in the mid-nineties, and the ICC (which became operational in July 2002) have been set up to try individuals for international crimes; their statutes do not provide for criminal liability for corporate actors, as they are based on the principle of individual guilt for criminal conduct (nulla poena sine culpa). In contrast, companies have a corporate (not: individual) identity and are legally best described as ‘legal persons’ - to which the concept of individual guilt cannot easily be ascribed. However, even in larger corporations decisions on specific transactions are being taken by a rather small panel of senior stakeholders who are heading the corporation. Despite their remoteness from the crimes committed on the ground, individual criminal liability may attach to them if each individual only knew that the immediate effect of their business transaction would be the (continued) commission of crimes. Individual criminal liability of representatives of corporations for international crimes can be ascribed broadly in two forms: either the company representative acts in close cooperation with his or her business partners as a co-author of crimes commonly envisaged; or the individual corporate actor’s contribution to the crime is of an auxiliary nature while the design and control over the crime is left to the business partner.

Book Symposium Investment Law: Comments on Gleider I. Hernandez

[William W. Burke-White is Deputy Dean and Professor of Law at University of Pennsylvania Law School.] I am delighted to have this opportunity to engage with the excellent chapter by Gleider Hernandez on the interaction between investment law and the law of armed conflict. The chapter makes an important contribution to an under-studied area of law, namely the interplay of international investment law and other specialized subfields, particularly international humanitarian law. I am hopeful that this chapter will open a broader discussion in this space, which is of both significant jurisprudential and practical consequence. Let me say at the start that I agree with Gleider’s overall approach. Both international investment law and international humanitarian law are specialized sub-fields of public international law, both fields frequently reference public international law generally, and both should be treated as part of the broader system of public international law. Perhaps as a consequence of the growing depth of particular subfields of international law or the nature of issue-specific scholarly inquiry today, all too often fields such as these are studied in isolation. As a result, their interactions are often overlooked and possibilities for mutual synergy (or conflict) are neglected. I credit Gleider (and the editors and contributors of the volume as a whole) for taking on these interactions directly and examining closely the way these fields overlap and interact. Turning to the substantive question, however, I would take a somewhat different approach.

Book Symposium Investment Law: The Interaction Between Investment Law And The Law Of Armed Conflict In The Interpretation Of Full Protection And Security Clauses

[Dr Gleider I. Hernandez is a Lecturer at Durham Law School] I am grateful to the organisers of this symposium on the collection, edited by Dr Baetens, on the interaction of international investment law (‘IIL’) with other areas of public international law (‘PIL’). Broadly speaking, I identify as a ‘generalist’ international lawyer, one who is interested in the system as a whole and how its organs and agents grapple with emerging problems of global governance. As such, when I was approached in 2011 to consider and address the interaction between two specialised regimes within international law, I leapt at the opportunity to consider how the law of armed conflict, and specifically, international humanitarian law (jus in bello or ‘IHL’), a distinct legal regime that, in its modern form, has been developing through multilateral treaty practice for well over a century, would be considered within the sphere of international investment law, a relatively new area of international law that has blossomed in the last two decades, yet primarily through bilateral treaty practice and through a rich body of case law. The results were very interesting. With abundant treaty practice in which bilateral investment treaties (BITs) embedded variously-termed clauses providing for protection and security in various forms, the interaction and possible conflict of norms between these two specialised regimes was inevitable. Indeed, factually speaking, a substantial portion of modern investment disputes have arisen precisely through the continued scourge of armed conflicts between and within States. As such, two questions needed to be considered: first, the manner through which public international law has addressed and considered the effects of armed conflicts on rights and obligations, and whether generalised, abstract rules and principles can be distilled; and secondly, whether practice in the area of investment law—specifically treaty practice in BITs and the interpretation of such treaties by specialised investment tribunals—could be said to be in harmony with the general international law framework.

Book Symposium Investment Law: Comments on Vid Prislan’s Chapter

[Kathleen Claussen is a Legal Counsel at the Permanent Court of Arbitration. The views expressed in this post are those of the author only and do not reflect any view of the Permanent Court of Arbitration or its staff.] Vid Prislan’s chapter on non-investment-treaty obligations in investment treaty arbitration tackles a common issue in tribunal decisionmaking that has not been fully theorized or understood. His work advances that effort by examining ways in which tribunals take account of non-investment-treaty obligations and by acknowledging that these methods may be viewed as insufficient for responsible administrative governance on the part of state actors. Thus, he concludes that states should undertake efforts to amend treaty language so as to accommodate all their obligations and interests and to “ensure greater predictability and coherence in the interpretation of treaty terms.” Prislan’s chapter touches on two important themes. On one hand, the chapter is a commentary on state obligations. It speaks to how states can better manage their international obligations, as well as their domestic obligations, with an eye toward avoiding conflicts between them. From a second angle, Prislan makes a contribution to the debate on the future of the international investment law “system” or “regime.” On either reading, the chapter provides some useful takeaways; this short post makes some brief comments on each. Prislan focuses on the conflicts he perceives between and among treaties and domestic law. He outlines ways through which these perceived conflicts might be resolved using interpretative tools. Certainly, others would argue that investment treaties in particular are designed with that in mind to allow states to maintain many of their obligations through exception provisions or through clauses permitting a state to accept liability by compensating an investor in full, and thus, what Prislan views as “conflicts” are in fact provided for in the instruments themselves, even if only implicitly. Prislan nevertheless sets out to sketch a means of harmonizing state obligations in an effort to avoid asking arbitral tribunals to reconcile or resolve seemingly incompatible obligations. In so doing, Prislan emphasizes the limited flexibility of arbitral tribunals – limited by the scope of interpretative methods. An equally interesting discussion could be raised as to who should decide how perceived conflicts among instruments will be resolved. Interpretative tools are not limited to the use of arbitral tribunals; rather, reconciliations among competing obligations are made by a wide range of actors. At least for purposes of his chapter, Prislan accepts that arbitral tribunals are the default interpreters without questioning the larger design that sets up tribunals as the front line of decisionmaking. Have states made a mistake in electing to have these matters resolved by a panel of three non-governmental decisionmakers rather than an apparatus among the government’s own administrative machinery? Perhaps what underlies Prislan’s analysis is a recommendation that states take themselves out of such now common dispute resolution mechanisms where such competing obligations are managed in these ways. This consideration brings us to think about another reading of Prislan’s chapter: as a commentary on the future of the investment system.

Book Symposium Investment Law: Non-Investment Obligations in Investment Treaty Arbitration – Towards a Greater Role for States?

[Vid Prislan is a Research Fellow PhD-candidate at the Grotius Centre for International Legal Studies of Leiden University] First of all, I would like to thank the editors of Opinio Juris for providing me with the opportunity to briefly present the arguments which I raise in my chapter in Investment Law within International Law: Integrationist Perspectives. My chapter deals very broadly with the issue of non-investment obligations in investment treaty arbitration. It does so by exploring how investment tribunals can consider (and take into account) arguments based on sources of obligations other than those under investment treaties. The possibility of considering non-investment obligations has occasionally been questioned by reference to the limited jurisdictional competence of investment tribunals. Indeed, the jurisdiction of these tribunals is not unqualified, but limited by the extent to which the States assented to it in the underlying investment treaty – that is, potentially confined only to pronouncing upon alleged violations of the substantive rights under the treaty. Yet, I argue, first of all, that jurisdictional limitations do not necessarily restrict the scope of the law applicable to the dispute. In most cases, in fact, investment tribunals will enjoy broad latitude with regard to the scope of the legal rules that they are entitled to apply, which makes it possible for them to consider, and indeed apply, obligations other than those under the treaty. Second, I contend that investment agreements were not conceived as self-contained regimes, and therefore, cannot be applied in isolation of other rules and principles of international law. In particular, I argue that, at the very least, rules of customary international law, as well as general principles of law remain applicable, to the extent that their application has not been excluded by the investment treaty as lex specialis. Even if one accepts that jurisdictional limitations potentially prevent investment tribunals from directly adjudicating upon claims based on non-investment obligations, there is no impediment for investment tribunals to consider these rules when constructing the meaning of the substantive protections laid down in an investment treaty. I suggest that some of the jurisdictional limitations may be overcome by taking account of non-investment obligations in the process of interpreting the provisions of the investment treaty. I focus specifically on three interpretative techniques that can be applied by investment tribunals for this purpose.

Book Symposium Investment Law: A reply to Prof. Tullio Treves’ comments

[Nicolas Hachez is a PhD student at the institute for International Law and Leuven Centre for Global Governance Studies and Jan Wouters is Professor of International Law and International Organizations, Jean Monnet Chair Ad Personam EU and Global Governance, and Director of the Leuven Centre for Global Governance Studies and Institute for International Law at the University of Leuven (KU Leuven).] First of all, we would like to thank Prof. Treves for his kind words on our chapter, and for his very interesting ‘think outside the box’ comments. Prof. Treves’ observations contain three main points:

• Alternative dispute resolution mechanisms as an alternative to arbitration
• The recent denunciation of the ICSID convention by a number of state parties
• The possibility to mirror the ‘prompt release’ procedure set out in art. 292 of the UN Law of the Sea Convention in international investment law.

We will address Prof. Treves’ points in that order.