Symposia

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.

Book Symposium Investment Law: Observations on Hachez and Wouters’ Chapter

[Tullio Treves is a Professor of International Law at the University of Milano and a Public International Law Consultant at Curtis, Mallet-Prevost, Colt & Mosle LLP in Milan] This chapter is entitled “International investment dispute settlement in the twenty-first century: does the preservation of the public interest require an alternative to the arbitral model?” It is a detailed and well reasoned review of the criticisms raised against arbitration as the  mechanism dominating the settlement of international investment disputes, of the steps already taken or underway to attenuate the negative aspects addressed by such criticism, and of the more ambitious reforms that have been proposed. Among the criticisms addressed are the following: that the arbitral model “fails to live up to the basic precepts of democracy and the rule of law” and shows a lack of consideration of the public nature of the interests involved;  that there exists a real or perceived bias of arbitrators (and of the arbitrators’ appointing authorities) in favor of investors due inter alia to the fact that many arbitrators are at the same time practicing lawyers in law firms which may have to cater to the interests of other clients not involved in the specific dispute; that the process lacks transparency; that contradictory decisions  involve a risk of fragmentation. Notwithstanding these criticisms, the authors’ “interim conclusions” are that “arbitration works well most of the times” but that “in view of the requirements of the rule of law and in light of the public interest, ‘working well most of the time’ is not enough” (p. 434). The  “current reforms” examined by the authors and aimed at overcoming the criticisms concern transparency and the participation in proceedings by “non-parties” such as public interest non-governmental organizations as amici curiae. The assessment of the authors is summarized in the relevant chapter’s title: “too little, too late” and further elaborated  explaining that: “these reforms are unlikely to resolve the legitimacy crisis by themselves. … the transparency reforms remain subject to the consent of the parties and therefore do not institutionalise transparency per se” (p. 438). The more ambitious proposals for reforming the system are considered in a chapter entitled “Doing away with arbitration?”. As a matter of fact, only a short passage about alternative disputes resolution methods (as mentioned in the US Model BIT) concerns alternatives to arbitration. Most attention is given to the proposals, which are far from being accepted so far, for eliminating from investment agreements the exclusion of the exhaustion of local remedies rule and for introducing an appellate level, possibly through  an institutionalized permanent body. The newly acquired European Union competence in the field of investment is seen as a factor that  might change the present situation in which important reforms (including that concerning an appellate body) seem impossible. In a chapter on “Doing away with arbitration?”, one could have expected a discussion of the implication of recent denunciation, by various States, of the ICSID Convention and of BITs, which seems to me the most radical aspect of recent practice for “doing away with arbitration”.

Book Symposium Investment Law: Comments on Freya Baetens’ Introductory Chapter

[Laurence Boisson de Chazournes is Professor of international law at the Faculty of Law of the University of Geneva, Switzerland]. In her chapter, Freya Baetens notes that it is necessary to scrutinize "how concepts, principles and rules developed in the context of other sub-fields could (or should) inform the content of investment law." This scrutiny is well-deserved, as the interrelations of other bodies of norms with the corpus of norms related to investment law have gained traction but remains ambiguous. The notion of cross-fertilization and that of legal regimes informing one another are abundantly referred to. While I share this a-hierarchical vision (with the caveat of the possible application of jus cogens and erga omnes obligations) of the relationships among different bodies of law, one should be cautious so as not to transform a land of its own—i.e., international law—into an archipelago of islands more or less connected, which needs artificially created pathways.  There is no reason for international investment law, as a field of public international law à part entière, not to be incorporated in the universe of international law. In addition to stressing the need for decision-makers to adopt a systemic view of such interrelationships, Freya highlights the key role that rules of interpretation play in promoting a more unitary approach.  Much more attention should be paid to the set of rules as codified in Articles 31, 32 and 33 of the Vienna Convention on the Law of Treaties.  These rules should be observed as a set of objective rules (to be interpreted in conformity with the rules they provide for) and not as a menu left to the taste and desire of tribunals. I would like to draw attention to the concept of mutual supportiveness which has emerged as an interpretative tool. Freya's viewpoint evokes it. It constitutes a lens through which international law is increasingly observed. Mutual supportiveness implies that States and arbitrators should refrain, whenever possible, from construing conflicts between international investment obligations and other legal interests. Moreover, there should be mutual adjustments: on each side, there should be an attempt to prevent the eruption of a conflict. This can be done in an ex ante manner at the time of the negotiation. Freya's chapter provides some examples in this respect. States bear an important responsibility in this context. The prevention of the eruption of a conflict can also be done in an ex post manner when a dispute is to be settled.  This is where the rules of interpretation play a key role.  It undoubtedly focuses attention on the powers of tribunals.  The wording and content of investment treaties is of crucial importance in an interpretative context. The principle of mutual supportiveness has most prominently emerged in the relationships between international trade and the environment, but is not limited to this area.  For example, the OECD has incorporated mutual supportiveness as a primary principle in its Green Growth Strategy Report (2011), encouraging Member States to foster compatibility between their investment-related and environmental policy goals. I then would like to make two observations related to two so-called sub-fields. One of these deals with human rights considerations, while the other one concerns international humanitarian law. 

Book Symposium Investment Law: No Law is an Island, Entire of Itself – How International Investment Law Interacts with Other Fields of International Law

[Dr Freya Baetens is Associate Professor of Law at Leiden Law School, Director of Studies at Leiden University College (LUC) and Head of the LUC Research Centre at Leiden University.] The last two decades have witnessed an exponential increase in investor-State arbitrations. Investment tribunals now regularly render binding decisions as to whether States have violated protection standards guaranteed under various investment treaties. The pace by which these tribunals deliver their awards has turned investment law into one of the most dynamic fields of public international law. Developments in other sub-fields of international law influence the development of international investment law, but also vice versa, changes in investment law have an impact on the evolution of other fields of international law. As the majority of publications focuses on the application and interpretation of investment protection standards, the interaction of international investment law with other sub-fields of international law has not been so extensively explored yet. To fill this gap, academics and practitioners contributing to this collection examine specific links between investment law and such other rules of international law. In particular, this book scrutinizes how concepts, principles and rules developed in the context of other sub-fields of international law could (or should) inform the content of investment law. Solutions conceived for resolving problems in other settings may provide instructive examples for addressing current problems in the field of investment law, and vice versa. This serves as an aid for several contributors to determine whether various sub-fields of public international law, particularly international investment law, are open to cross-fertilisation, or, whether they are evolving ever further into self-contained regimes. This book contains a peer-reviewed selection of the most innovative and outstanding papers resulting from presentations at the international conference on ‘The Interaction of International Investment Law with Other Fields of Public International Law’ which took place on 8 and 9 April 2011 at Leiden University. This conference brought together experts from the field of international investment law with renowned scholars and practitioners from other sub-fields of international law. The five parts of this volume each address one particular interrelationship: the authors of each part have had the opportunity to examine each other’s ideas so as to guarantee a coherent approach to the matter, thereby avoiding a fragmented discussion. One important comment received in the course of preparing this book/volume was that a book such as this one could pursue two goals: (1) an overall - single volume - assessment of the literature ‘with some extra edge’; or (2) a selection of the most relevant issues. So, in which category does this work belong?