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).

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.

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.

The Life and Death of BITs: Legal Issues Concerning Survival Clauses and the Termination of Investment Treaties

2012 ◽  
pp. 928-950 ◽  
Author(s):  
James Harrison
Keyword(s):  
International Law ◽  
Legal Issues ◽  
Third Party ◽  
Legal Certainty ◽  
Foreign Investors ◽  
Life And Death ◽  
Investment Treaty ◽  
Unilateral Termination ◽  
State Practice ◽  
Investment Treaties

This article considers a number of legal issues that arise when states decide to terminate treaties providing protection to foreign investors. This is an area that is governed both by specific provisions in investment treaties, as well as by principles of general international law. The article considers two particular mechanisms that seek to promote legal certainty for investors by limiting the ability of states to peremptorily revoke the protection offered by investment treaties. Firstly, it considers minimum periods of application. Secondly, it analyzes so-called survival clauses, which serve to extend the application of a treaty to established investors for a particular period of time after its unilateral termination. The article compares the scope of these provisions under a variety of investment treaties in order to identify differences in state practice. It also discusses the limits of these mechanisms against the backdrop of general international law. Finally, the article considers whether protection is also available for established investors when both parties to an investment treaty mutually agree to terminate the treaty. In this context, the article looks at the theory of third party rights and its application in the context of investment treaties.

scholarly journals The Security of International Investments: a Synthesis of Impacts on Public Policies and Domestic Law of Host States

2021 ◽  
Author(s):  
◽  
Livia Costanza
Keyword(s):  
Public Policies ◽  
Legal Framework ◽  
International Investment ◽  
Public And Private ◽  
Foreign Investors ◽  
International Investment Law ◽  
Investment Treaty ◽  
Investment Law ◽  
Investment Treaties ◽  
Domestic Law

<p>The subject of this dissertation is the relationship between the protection of foreign investors' investments under international investment law and the domestic law of host states. Two questions arise in this connection. First, is the promotion and protection of investments comprised in investment agreements compatible with states' domestic law? Second, public policies of host states may appear to be in contradiction with an increased international security of investments. When such a conflict is challenged by foreign investors, what are the consequences for both parties? In general, investments are transactions that are private in nature, whose aim is to generate a positive rate of return. Investments can have pervasive consequences on countries' welfare, including, for example, the consequences on sustainable development; the use and protection of natural resources; and employment, to name a few. It is the role of the governments to balance these sometimes conflicting public and private interests. As of today, it seems that the regime established according to investment treaties does not strike an appropriate balance between the various interests concerned. After a brief look at the legal framework protecting foreign investments, the conflict areas between investment treaty provisions and domestic public policies of host states are explored through an empirical analysis of some case studies and recent arbitrations. Finally, this dissertation holds that, at a substantive level, investment law is a part of international law. Thus it must be consistent with its norms and it has to be interpreted in accordance with customary rules of treaty interpretation. The dissertation concludes by suggesting the creation of a state-investor relationship and advocates, in part, the establishment of development objectives in investment treaties as well as the inclusion of rights and obligations for all parties involved.</p>

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.

Article: Investment Treaties and Transition from Authoritarian Rule

2014 ◽  
Vol 15 (5-6) ◽  
pp. 965-1011 ◽  
Author(s):  
Jonathan Bonnitcha
Keyword(s):  
International Law ◽  
Political Science ◽  
Political Change ◽  
Market Value ◽  
Authoritarian Rule ◽  
Foreign Investments ◽  
Foreign Investors ◽  
Investment Treaty ◽  
Democratic Regimes ◽  
Investment Treaties

Following recent events in Egypt, Libya, Myanmar (Burma) and Tunisia, foreign investors have lodged international claims under investment treaties. Several of these cases follow a common fact pattern. They concern foreign investments acquired from authoritarian governments substantially below market value through transactions that were not arms’ length. Subsequently, new governments sought to renegotiate these contracts and concessions, or to change the regulatory arrangements that govern them. The investors then invoked the protections of an investment treaty. This article draws on political science scholarship on transition. It argues that investment treaties risk constraining the ability of incoming democratic regimes to consolidate their position, and questions the normative justifications for applying the principle of full market value compensation to situations in which investments were not acquired on a full market value basis. These conclusions are relevant to wider debates about the tension between legal stability and political change in international law.

scholarly journals Public Policy Pragmatism on Special Economic Zone in Tanjung Lesung, Pandeglang Regency

2019 ◽  
Vol 35 (1) ◽  
pp. 146-155
Author(s):  
Dede Sri Kartini ◽  
Rahman Mulyawan ◽  
Muradi Muradi
Keyword(s):  
Public Policy ◽  
Public Interest ◽  
Special Economic Zone ◽  
Foreign Investors ◽  
The Public ◽  
Fair Competition ◽  
Tourism Education ◽  
Ideal Policy ◽  
Economic Zone ◽  
The Government

The policy of Special Economic Zone (SEZ) in Tanjung Lesung has provided various special facilities to investors, such as tax breaks, business use rights, and building rights for 80 years. This research is discussing whether this is an ideal policy or only pragmatism. It is an attempt to discover and analyze whether the Special Economic Zone policy in Tanjung Lesung is an ideal policy that has met the public interest. Using qualitative methods, researchers conducted an interview with the government, Regional House of People's Representatives, and society. The results of this study indicate that Special Economic Zone policy is divided into three conditions: conditions that describe policy pragmatism such as ensuring fair competition among hotel and lodging business actors, respecting people who do not want to sell their land, both domestic and foreign investors have the same rights and obligations; conditions that do not describe policy pragmatism such as rules that cannot be applied; and conditions that describe half pragmatism such as formal tourism education aimed for vocational schools only.

Ensuring Reasonableness in the Conduct of Host States

2019 ◽  
pp. 101-174
Author(s):  
Federico Ortino
Keyword(s):  
Foreign Investments ◽  
Host State ◽  
Police Powers ◽  
Investment Treaty ◽  
Fair And Equitable Treatment ◽  
Investment Treaties ◽  
Equitable Treatment ◽  
Full Protection

The aim of the chapter is twofold. First, it investigates the extent to which investment treaties include a guarantee of ‘substantive reasonableness’ as one of the key protections granted to foreign investments. Second, it attempts to identify the standard of review that have been employed by investment tribunals in assessing the lawfulness of host States’ conduct. The analysis focuses on the following treaty provisions: (a) full protection and security; (b) non-impairment through arbitrary or unjustifiable measures; and (iii) fair and equitable treatment. This chapter also examines the application by investment tribunals of the ‘police powers’ doctrine in defining an indirect expropriation. One key finding stems from the present analysis. While investment treaty tribunals have (at least for the most part) applied these open-ended standards as reasonableness-based provisions, tribunals have crucially differed with regard to the specific reasonableness test employed in order to review the lawfulness of the host State conduct.

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.

2 Foreign Investment: Economic and Legal Foundations

2017 ◽  
Author(s):  
Bonnitcha Jonathan ◽  
Skovgaard Poulsen Lauge N ◽  
Waibel Michael
Keyword(s):  
Foreign Investment ◽  
Foreign Investors ◽  
Investment Treaty ◽  
Different Types ◽  
Legal Foundations ◽  
Investment Treaties

This chapter examines two foundational questions relating to foreign investment: why firms engage in foreign investment, and how inward foreign investment affects host states. It then examines the scope of the investment treaty regime’s coverage of different types of ‘investors’ and ‘investments’. The chapter makes a simple yet often overlooked point: whereas different types of foreign investment have different drivers and effects, investment treaties cover practically all forms of investment and all types of foreign investors. This has important implications when considering the effects of the investment treaty regime.

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