Exploring the prospects of host-state counterclaims in corruption disputes

2020 ◽  
Vol 36 (4) ◽  
pp. 583-600
Author(s):  
Chitransh Vijayvergia ◽  
Pavan Belmannu
Keyword(s):  
Bilateral Investment Treaties ◽  
International Arbitration ◽  
Public Officials ◽  
Foreign Investors ◽  
The Public ◽  
Host State ◽  
Investment Treaty ◽  
Investment Treaties ◽  
Investment Treaty Arbitration

Abstract While the regime of investment treaty arbitration has evolved manifold over the decades, has the position of the host-states as a Respondent improved? The authors argue that it has not. Bilateral Investment Treaties (hereinafter BIT(s)) are still asymmetrical in nature where the states are obliged to protect the rights of the foreign investors but are not provided with any remedy against the corrupt activities of the investors. While tribunals have denied jurisdiction over the investors’ claims tainted with corruption, they have provided states with no consequent remedy against such investors. Consequently, the states have to first bear the loss of a failed investment in its territory and then pay for the exorbitant costs of international arbitration as well. Where scholars are arguing for attribution of liability of corrupt activities of the public officials to the states, the authors here raise an important question of what if the liability cannot be attributed to the states due to lack of apparent authority? Should the states be then allowed to move forward from the jurisdictional stage to raise counterclaims to seek damages for the loss caused by the investors? In this article, the authors explore these questions and present arguments in favour of the inclusion of corruption-based counterclaims.

Bilateral Investment Treaties and the Increase in Egyptian Appearances before International Arbitration Tribunals

2021 ◽  
Vol 29 (1) ◽  
pp. 40-61
Author(s):  
Ashraf M. A. Elfakharani ◽  
Rohana Abdul Rahman ◽  
Hamza E. Albaheth ◽  
Nor Anita Abdullah
Keyword(s):  
International Investment ◽  
Vital Role ◽  
Legal Issues ◽  
Bilateral Investment Treaties ◽  
International Arbitration ◽  
Foreign Investors ◽  
Investment Treaties ◽  
Very High

Bilateral investment treaties (BITs), as the name indicates, are meant to govern investment relations between two signatory states. In this context, Egypt holds a significant place among all respondent states, having to face a very high number of legal issues from foreign investors. These cases are pending before several international investment tribunals and Egypt is facing claims of over USD 20 billion annually from its foreign investors. In spite of such a grim situation, there are legal arbitrations that have increased the appearance of Egypt in international arbitration forums. There are several reasons for such a situation to arise, mainly because of the governmental measures towards foreign investors and interests. This article argues that in spite of the unspecified criteria shown towards foreign investors, the Bilateral Investment Treaty's items have played a vital role in increasing Egyptian appearances.

3 Fair And Equitable Treatment

2009 ◽  
Author(s):  
Gallagher Norah ◽  
Shan Wenhua
Keyword(s):  
Bilateral Investment Treaties ◽  
National Treatment ◽  
Standard Format ◽  
Foreign Investors ◽  
Host State ◽  
Fair And Equitable Treatment ◽  
Investment Treaties ◽  
Equitable Treatment ◽  
Full Protection

Like other bilateral investment treaties (BITs), Chinese BITs establish a set of general standards of treatment accorded to foreign investors by the host state. The most commonly found general standards of treatment include fair and equitable treatment (FET), (full) protection and security (PNS), most favoured nation treatment (MFN), and national treatment (NT). The first two belong to the group of non-contingent standards (or so-called “absolute standard of treatment”), whilst the latter two are forms of contingent standards (or “relative standards of treatment”). Absolute standards do not depend on treatment granted to other investors. In contrast, the relative standards are contingent on treatment given to other categories of investors, nationals of the host state in the case of NT and investors from third states for the MFN. This chapter begins with an examination of the FET standard, focusing on the different approaches of interpretations that have been developed in theory and in arbitration practice. It then analyzes the standard under Chinese BITs and assesses the implications of its standard format and any variations.

5 The Microeconomics of Investment Treaties

2017 ◽  
Author(s):  
Bonnitcha Jonathan ◽  
Skovgaard Poulsen Lauge N ◽  
Waibel Michael
Keyword(s):  
Decision Making ◽  
Foreign Investment ◽  
Fiscal Illusion ◽  
Foreign Investors ◽  
Host State ◽  
Investment Protection ◽  
The Third ◽  
Investment Treaty ◽  
Investment Treaties ◽  
The Impact

This chapter surveys the impact of investment treaties on decision-making at the firm and government levels. The focus is on whether investment treaties’ influence on the decisions of firms and states leads to improvements in efficiency. The first section examines the ‘hold-up’ problem, which provides the most influential and coherent microeconomic justification for the inclusion of investment protection provisions in investment treaties. The second section explores the problem of ‘fiscal illusion’ in host state decision-making, which could result in ‘over-regulation’ of foreign investment in the absence of an investment treaty. The third section considers whether investment treaties solve problems of discrimination against foreign investors, as well as the possibility that investment treaties lead to discrimination in favour of foreign investors.

Protecting the Value of Investments

2019 ◽  
pp. 49-100
Author(s):  
Federico Ortino
Keyword(s):  
Public Policy ◽  
Foreign Investors ◽  
Origin And Evolution ◽  
The Public ◽  
Cautious Approach ◽  
Police Powers ◽  
Investment Treaty ◽  
Investment Treaties ◽  
Broad Understanding

The aim of the chapter is to trace the origin and evolution of the expropriation provision in modern investment treaties. Two main findings stem from the present analysis. First, the original aim of the expropriation provision in modern investment treaties was to afford foreign investors a wide level of protection vis-à-vis a host State’s conduct that deprived the investor of the value of its investments. Second, while many investment treaty tribunals have initially adhered to this broad understanding in line with the ‘sole-effect’ doctrine, an increasing number of investment tribunals have recently adopted a more cautious approach, both restricting the notion of expropriatory effect and increasing the relevance of the public policy of the allegedly expropriatory measure (pursuant to the ‘police powers’ doctrine).

Part IV Guide to Key Substantive Issues, 21 The National Treatment Obligation

2018 ◽  
Author(s):  
Bjorklund Andrea K
Keyword(s):  
Historical Development ◽  
National Treatment ◽  
Foreign Investors ◽  
Host State ◽  
Investment Treaty ◽  
Investment Treaties ◽  
National Treatment Obligation ◽  
Investment Agreements

Most investment agreements contain a national treatment obligation, which requires that a host State treat foreign-owned investments at least as well as similarly situated national investments, or foreign investors as well as domestic investors. This chapter first explores the historical development of the national treatment obligation. It then addresses national treatment in practice, with particular reference to the investment treaty practice of the last decade and a half. As part of that examination, it sets forth the difficult and unresolved issues in the national treatment jurisprudence, including the hurdles that claimants face in establishing a national treatment claim. Finally, it addresses some of the reservations to national treatment that States have included in their investment treaties.

The Politics of Investment Treaty Arbitration

2020 ◽  
pp. 739-766
Author(s):  
Lauge N. Skovgaard Poulsen
Keyword(s):  
State Politics ◽  
Unintended Consequences ◽  
State Governments ◽  
Foreign Investors ◽  
Host State ◽  
Home State ◽  
Investment Treaty ◽  
Investment Treaty Arbitration

This chapter describes the politics of investment treaty arbitration. It first looks at two core political justifications for investment treaty arbitration. The first relates to home state politics and diplomacy: the ability of investment treaty arbitration to depoliticize investor–state disputes. The second justification relates to host state politics and institutions: the ability of investment treaty arbitration to convince certain types of foreign investors to commit capital into certain types of jurisdictions due to its effects on host state governments. On this basis, the chapter then discusses the politics of investment treaty arbitration in recent years, particularly surrounding the unintended consequences of the investment treaty regime as well as the controversy about investment arbitrators themselves.

9 Legitimacy and Governance Challenges

2017 ◽  
Author(s):  
Bonnitcha Jonathan ◽  
Skovgaard Poulsen Lauge N ◽  
Waibel Michael
Keyword(s):  
Decision Making ◽  
Public Interest ◽  
Public Attention ◽  
The Public ◽  
Investment Treaty ◽  
Regime Complex ◽  
Governance Challenges ◽  
Investment Treaties ◽  
The Impact ◽  
Investment Treaty Arbitration

The rapid growth of investment treaty arbitrations in often sensitive policy areas has focused public attention on the investment treaty regime. This chapter draws together several strands of the book to focus on two central debates about legitimacy and governance challenges facing the investment treaty regime. The first section considers the impact of investment treaties on national governance. It assesses criticisms that investment treaties unduly fetter democratic decision-making and discourage states from regulating in the public interest. The second section examines the legitimacy of investment treaty arbitration—the regime feature that has come under the closest scrutiny over the last decade. It assesses debates about transparency and consistency in investment treaty arbitration, its impact on the broader investment regime complex, the selection, identity, and alleged biases of arbitrators, as well as the lack of investor obligations.

Part III Guide to Key Jurisdictional Issues, 11 The Meaning of ‘Investment’ in Investment Treaty Arbitration

2018 ◽  
Author(s):  
Yannaca-Small Katia ◽  
Katsikis Dimitrios
Keyword(s):  
International Investment ◽  
Bilateral Investment Treaties ◽  
Host State ◽  
Subjective Approach ◽  
Investment Treaty ◽  
International Investment Agreements ◽  
Investment Agreements ◽  
Made In ◽  
Investment Treaty Arbitration ◽  
The Way

Despite the growing number of investor-state arbitrations and resulting jurisprudence, there is still no consensus on the criteria of investment. This chapter first examines the way ‘investment’ is ‘defined’ in bilateral investment treaties and other international investment agreements, as well as the meaning of investment in the International Centre for Settlement of Investment Dispute (ICSID) Convention. It then considers aspects of the arbitral jurisprudence on certain types of assets constituting an investment; the ‘objective’ and ‘subjective’ approach to interpreting definitions of ‘investment’; the characteristics that have been considered to be criteria of an investment; and the requirements that, to be protected, an ‘investment’ must be (i) made in accordance with the host State’s law and (ii) in the territory of the host State.

8 Settlement Of Investor–State Disputes

2009 ◽  
Author(s):  
Gallagher Norah ◽  
Shan Wenhua
Keyword(s):  
Dispute Resolution ◽  
Dispute Settlement ◽  
Ad Hoc ◽  
Bilateral Investment Treaties ◽  
International Arbitration ◽  
Applicable Law ◽  
Host State ◽  
Different Types ◽  
Investment Treaties ◽  
Made In

The dispute-resolution provisions in bilateral investment treaties (BITs) have become the “ultimate” investor protection in modern investment treaties. This chapter reviews the different types of dispute-resolution provisions of the Chinese BITs. It first looks at the choice of arbitrations made in its treaties, ICSID, ad hoc, or other arbitration rules. It then continues to review the two main types of investor-state dispute-resolution clauses in China's BITs: restrictive—where the BIT permits international arbitration of disputes on the amount of compensation for expropriation only; and more liberal or expansive—which allows access to international arbitration for all disputes between the investor and host state. It then considers a topic of particular interest right now for investors and potential investors in China: the application of the MFN clause to dispute resolution. Finally, it looks at the applicable law to dispute settlement and the requirement to exhaust domestic remedies.

Fair and Equitable Treatment in Saudi Bilateral Investment Treaties

2019 ◽  
Vol 34 (2) ◽  
pp. 191-204
Author(s):  
Sarah Alshahrani
Keyword(s):  
Public Interest ◽  
Bilateral Investment Treaties ◽  
Police Power ◽  
The Public ◽  
Host State ◽  
Fair And Equitable Treatment ◽  
Investment Treaties ◽  
Equitable Treatment

Abstract Fair and equitable treatment (FET) is one of the general principles included in bilateral investment treaties (BITs) and it is as important as the expropriation clause. Recent investment tribunal practice has shown that FET is one of the most frequently invoked provisions. All Saudi BITs include an old version of the FET clause. However, the vagueness and ambiguity of FET can hold the country liable when it enacts measures in the public interest, and, therefore, a thorough analysis of the best formulation of FET is necessary in order to achieve predictability and certainty for both the investor and the host state, in addition to the need to widen the police power of host states.

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