Investment Arbitration as Constitutional Law

2020 ◽  
pp. 420-447
Author(s):  
David Schneiderman
Keyword(s):  
Judicial Review ◽  
Constitutional Law ◽  
Dispute Settlement ◽  
Foreign Investors ◽  
State Action ◽  
High Courts ◽  
Investment Arbitration ◽  
Legitimacy Crisis ◽  
Legal Processes

This chapter argues that investment arbitration serves functions analogous to high courts when interpreting constitutional text. As in the case of high courts issuing authoritative interpretations of constitutional texts, arbitrators are tasked with determining the propriety of state action with reference to open-ended obligations that states owe to foreign investors and their investments. Viewed from this angle, investment arbitration can be likened to the performance of judicial review under national constitutions. This is a proposition that will be resisted by many investment lawyers and arbitrators. Analogizing to constitutional rules and institutions will be seen as contributing to a ‘legitimacy crisis’ presently confronting investor-State dispute settlement (ISDS). Legitimation problems have arisen because legitimacy requires more than merely following correct legal processes. There is expected to be some value beyond mere legality served by the power of coercive law. Indeed, investment arbitration will continue to be of doubtful legitimacy so long as investment arbitration is characterized as performing constitution-like functions.

scholarly journals ISDS Regimes and Democratic Practice: Creating Conflict of Interests between Governments, Investors and Local Populations

2019 ◽  
Vol 25 (84) ◽  
pp. 36-52
Author(s):  
Martin Karas
Keyword(s):  
Decision Making ◽  
Dispute Settlement ◽  
Good Governance ◽  
Scholarly Work ◽  
Foreign Investors ◽  
Local Populations ◽  
Investment Arbitration ◽  
Democratic Practice ◽  
Recent Debate ◽  
The Relationship

Abstract The recent debate over the Investor-State Dispute Settlement (ISDS) regimes of international arbitration has resulted in concerted efforts aimed mainly at protecting the rights of states to regulate, improving transparency of proceedings and eliminating inconsistency in decision making of the tribunals. While the existing scholarly work frequently addresses issues of the relationship between the existing investment regimes and good governance in general, increased attention is rarely paid to the effects that investment arbitration has on democratic practice. The article applies an “action-based” approach to democracy, in order to analyse the role that the ISDS regimes play in exacerbating conflicts between the local populations, foreign investors and governments. The analysis leads to a conclusion that the ISDS regimes create incentives for the governments and foreign investors to disregard sound democratic practice. The article represents an attempt to move the discussion about the ISDS regimes away from the question of legitimacy of the regimes to the question of the impacts that the regimes have in practice.

scholarly journals What Roles Can Constitutional Law Play in Investment Arbitration?

2014 ◽  
Vol 15 (5-6) ◽  
pp. 862-888
Author(s):  
Laurence Boisson de Chazournes ◽  
Brian McGarry
Keyword(s):  
Constitutional Law ◽  
Dispute Settlement ◽  
Case Law ◽  
Recent Case ◽  
Treaty Ratification ◽  
Investment Arbitration ◽  
Fair And Equitable Treatment ◽  
Per Se ◽  
Equitable Treatment ◽  
Domestic Law

Interplays between international and domestic legal spheres have attracted increased attention in investor-State dispute settlement. From the treaty ratification process to award execution, constitutional norms play recurring roles before, during and after investment arbitrations. This contribution deals with the manner in which parties to such disputes can rely upon constitutional law or, more broadly speaking, domestic law. Notably, major hurdles to the application of domestic law in transnational fora have not necessarily constrained the arbitral profile of constitutional principles. This is because they may gain prominence through informal paths. Rather than directly applying constitutional law per se, tribunals may utilize other paths such as deferring to domestic interpretations of constitutional principles, or to constitutional procedures that appear, for example, to protect fair and equitable treatment. Reexamining recent case law through this lens of informal application, we can then envision other synergies that intermingle these regimes.

The Compatibility of Investment Arbitration in eu Trade Agreements with the eu Judicial System

2016 ◽  
Vol 13 (1) ◽  
pp. 46-63 ◽  
Author(s):  
Dr. Laurens Ankersmit
Keyword(s):  
Dispute Settlement ◽  
Trade Agreements ◽  
Legal Order ◽  
European Court Of Justice ◽  
Court System ◽  
Foreign Investors ◽  
Investment Arbitration ◽  
Court Of Justice ◽  
European Court ◽  
The Eu

This article explores the legality of investment arbitration in eu trade agreements under eu law. Investor-state dispute settlement (isds), including the Investment Court System, allows foreign investors to challenge eu acts and decisions before investment tribunals and these tribunals may be faced with questions of eu law. Since this system of dispute resolution operates entirely outside the eu judicial framework and rivals with it, the powers of the courts of the Member States and that of the European Court of Justice may be adversely affected. This in turn could affect the uniform interpretation and effectiveness of eu law and the autonomy of the eu legal order.

Investment Arbitration in the Energy Sector

2020 ◽  
pp. 814-842
Author(s):  
Elena Cima
Keyword(s):  
Dispute Settlement ◽  
Energy Sector ◽  
Foreign Company ◽  
Foreign Investor ◽  
Energy Investment ◽  
Foreign Investors ◽  
Significant Percentage ◽  
Investment Arbitration ◽  
The World

This chapter studies the role of investment arbitration in the energy sector, which has received increasing attention over the last decade. International energy investment accounts for a significant percentage of all global investments and makes up the largest portfolio of international arbitrations in the world today. Energy-related disputes can take many forms. They may occur between two states, two private parties, or a private party and a state—in which case they may relate either to an investment by a foreign company in a state or to a commercial contract between a foreign company and a state. The chapter considers only one type of energy-related dispute, namely investment disputes between a foreign investor and a state. It particularly focuses on arbitration, which represents ‘the most widely used form of dispute settlement between foreign investors and host States’.

scholarly journals The Urgency of Non-Precluded Measures Clause in Indonesian Bilateral Investment Treaty

2019 ◽  
Vol 06 (02) ◽  
pp. 233-253
Author(s):  
Sefriani Sefriani
Keyword(s):  
Public Health ◽  
Dispute Settlement ◽  
Investment Policy ◽  
Labor Rights ◽  
Foreign Investors ◽  
Bilateral Investment Treaty ◽  
Host State ◽  
Investment Treaty ◽  
International Financial Crisis ◽  
Legitimacy Crisis

The legitimacy crisis of the Bilateral Investment Treaty (BIT) within the international community was caused by the increasing regulatory disputes before the Investor-State Dispute Settlement (ISDS) forum. It encourages Indonesia to discontinue several BITs, to review and to make new BIT models for Indonesia. This article aims to analyze the urgency of the non-precluding measures (NPM) clause in the new BIT Model of Indonesia to balance the interests of investors and the interests of Indonesia as the host state, considering that to date the existing BIT content is not balanced. The BIT provides so much protection to investors and, vice versa, weighty obligations to the host country. This study employed descriptive analytical method. The study concludes that the NPM Clause is very important in the new Indonesian BIT Model. At least, can be based on five arguments. First, the NPM clause will transfer risk from the country to foreign investors in situations of extraordinary threats. Second, the NPM clause will limit investor protection in certain situations. Third, the NPM clause will provide greater flexibility to Indonesia as the host to regulate its investment policy to achieve sustainable development to realize the people’s welfare, labor rights, public health, safety environment, public morals, and order. Fourth, the NPM clause is important for self-recovery during international financial crisis. Fifth, lastly, the NPM clause will balance the protection of both investors and Indonesia as the host state.

International Investment Arbitration in Thailand: Limiting Contract-Based Claims While Maintaining Treaty-Based ISDS

2017 ◽  
Vol 18 (5-6) ◽  
pp. 793-835
Author(s):  
Luke Nottage ◽  
Sakda Thanitcul
Keyword(s):  
Foreign Direct Investment ◽  
Bounded Rationality ◽  
Direct Investment ◽  
Dispute Settlement ◽  
Ad Hoc ◽  
International Investment ◽  
Bilateral Investment Treaties ◽  
Foreign Investors ◽  
Host State ◽  
Investment Arbitration

Abstract Thailand was initially cautious with its bilateral investment treaties (BITs), consistently eschewing investor-state dispute settlement (ISDS). From 1989 it began agreeing to ISDS, but only if both states were party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, which Thailand signed in 1965 but never ratified. From 1993, BITs increasingly provided for ad hoc arbitration. Major disputes emerged from the 1990s instead under contracts with foreign investors containing arbitration clauses. From 2004 concession contracts required Cabinet pre-approval. This limitation was extended to all public contracts from 2009, after the first treaty-based ISDS award against Thailand, although two further claims have been filed recently. A 2002 Model bit was revised in 2013 to incorporate more pro-host-state provisions, but Thailand had net foreign direct investment (FDI) outflows in 2011 and still concludes treaties with ISDS. These patterns suggest ‘more than bounded’ rationality.

James Bryce and the Australian Constitution

2015 ◽  
Vol 43 (2) ◽  
pp. 177-200
Author(s):  
Stephen Gageler
Keyword(s):  
United States ◽  
Judicial Review ◽  
Constitutional Law ◽  
The United States ◽  
United States Constitution ◽  
Constitutional Development ◽  
Practical Operation ◽  
Responsible Government ◽  
Shed Light

James Bryce was a contemporary of Albert Venn Dicey. Bryce published in 1888 The American Commonwealth. Its detailed description of the practical operation of the United States Constitution was influential in the framing of the Australian Constitution in the 1890s. The project of this article is to shed light on that influence. The article compares and contrasts the views of Bryce and of Dicey; Bryce's views, unlike those of Dicey, having been largely unexplored in contemporary analyses of our constitutional development. It examines the importance of Bryce's views on two particular constitutional mechanisms – responsible government and judicial review – to the development of our constitutional structure. The ongoing theoretical implications of The American Commonwealth for Australian constitutional law remain to be pondered.

The Trouble with Foreign Investor Protection

2020 ◽  
Author(s):  
Gus Van Harten
Keyword(s):  
International Law ◽  
Dispute Settlement ◽  
Foreign Investor ◽  
Foreign Investors ◽  
Global Context ◽  
Cross Border ◽  
Massive Growth ◽  
Main Effect ◽  
History Of ◽  
Legal Foundations

Governments are rightly discussing reform of investment treaties, and of the powerful system of ‘investor–state dispute settlement’ (ISDS) upon which they rest. It is therefore important to be clear about the crux of the problem. ISDS treaties are flawed fundamentally because they firmly institute wealth-based inequality under international law. That is, they use cross-border ownership of assets, mostly by multinationals and billionaires, as the gateway to extraordinary protections, while denying equivalent safeguards to those who lack the wealth required to qualify as foreign investors. The treaties thus have the main effect of safeguarding an awe-inspiring set of rights and privileges for the ultra-wealthy at the expense of countries and their populations. This book shows how ISDS came to explode in a global context of extreme concentration of wealth and of widespread poverty. The history of early ISDS treaties is highlighted to show their ties to decolonization and, sometimes, extreme violence and authoritarianism. Focusing on early ISDS lawsuits and rulings reveals how a small group of lawyers and arbitrators worked to create the legal foundations for massive growth of ISDS since 2000. ISDS-based protections are examined in detail to demonstrate how they give exceptional advantages to the wealthy. Examples are offered of how the protections have been used to reconfigure state decision making and shift sovereign minds in favour of foreign investors. Finally, the ongoing efforts of governments to reform ISDS are surveyed, with a call to go further or, even better, to withdraw from the treaties.

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