Illegal Investments in Investment Treaty Arbitration

2012 ◽  
Vol 11 (2) ◽  
pp. 281-323 ◽  
Author(s):  
Stephan W. Schill
Keyword(s):  
International Investment ◽  
Foreign Investor ◽  
Considerable Potential ◽  
International Investment Law ◽  
Investment Treaty ◽  
Investment Law ◽  
The Impact ◽  
The Relationship ◽  
Domestic Law ◽  
Investment Treaty Arbitration

Abstract Investment treaty tribunals on numerous occasions have had to deal with the impact of breaches of domestic law by a foreign investor on the investment’s protection under an international investment treaty. In this context, tribunals had to interpret different “in accordance with host State law”-clauses contained in investment treaties, but also dealt with the effect of illegality in the absence of such clauses. The present article traces this increasingly complex jurisprudence and frames it as an issue of the relationship between domestic law and international investment law. Although different approaches exist, most importantly as to the effect of domestic illegality on the jurisdiction of investment treaty tribunals, the article suggests that there is considerable potential for convergence in arbitral jurisprudence, thus unveiling the contours of a doctrinal structure for dealing with illegal investments in international investment law and arbitration.

scholarly journals Control, Capacity, and Legitimacy in Investment Treaty Arbitration

AJIL Unbound ◽  
2018 ◽  
Vol 112 ◽  
pp. 261-265
Author(s):  
Jeremy K. Sharpe
Keyword(s):  
International Investment ◽  
Law Reform ◽  
Institutional Choice ◽  
International Investment Law ◽  
Investment Protection ◽  
Investment Treaty ◽  
Trade Offs ◽  
Investment Law ◽  
States Experience ◽  
Investment Treaty Arbitration

Arbitration has long been the default mechanism for resolving international investment disputes. The traditional consensus favoring arbitration, however, has now given way, and reform proposals abound. The articles by Sergio Puig and Gregory Shaffer, on institutional choice and investment law reform, and by Anthea Roberts, on incremental, systemic, and paradigmatic reform of investor-state arbitration, helpfully situate the current controversies, debates, and reform options for states. Both articles reveal just how far and fast the debate has shifted in recent years. They also confirm states’ desire to exercise greater control over the regime for resolving international investment disputes. Many states continue to struggle to fully comply with their investment treaty obligations, to efficiently defend against investor claims, and to properly keep abreast of and shape developments in international investment law. Puig and Shaffer provide a useful framework for comparatively assessing possible institutional alternatives in light of their relative trade-offs. But any reform recommendations should draw lessons from states’ experience with the existing regime, including states’ significant problems of capacity. The merits of any reform proposals, therefore, should be measured in part by their ability to improve states’ capacity to cope with the existing investment protection regime and rapidly changing developments.

scholarly journals Democracy and International Investment Law

2017 ◽  
Vol 30 (2) ◽  
pp. 351-382
Author(s):  
LORENZO COTULA
Keyword(s):  
Political Theory ◽  
Analytical Framework ◽  
International Investment ◽  
Democratic Governance ◽  
International Investment Law ◽  
Citizen Action ◽  
Investment Treaty ◽  
Common Thread ◽  
Investment Law ◽  
The Relationship

AbstractThe expanding reach of international investment law and the negotiation of major economic treaties between democratic polities have prompted new debates about the relationship between democracy and the international investment regime. This article develops an analytical framework for understanding that relationship. It first unpacks the concept of democracy, exploring the ‘rules-based’ and ‘action-based’ conceptions that emerge from political theory and their relevance to international investment law. It then examines three themes that frame the relationship between democracy and international investment law: the interface between the investment regime and national democratic space; the place of democratic processes in investment treaty making; and public participation in the settlement of investment disputes. The interplay between rules- and action-based dimensions provides a common thread across the three themes. The article concludes that there is a gap between formal rules and citizen action in promoting democratic oversight, and significant scope to develop more effective mechanisms to install democratic governance in the creation and implementation of international investment law.

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>

ADJUDGING THE EXCEPTIONAL AT INTERNATIONAL INVESTMENT LAW: SECURITY, PUBLIC ORDER AND FINANCIAL CRISIS

2010 ◽  
Vol 59 (2) ◽  
pp. 325-371 ◽  
Author(s):  
Jürgen Kurtz
Keyword(s):  
Financial Crisis ◽  
International Law ◽  
Historical Analysis ◽  
International Investment ◽  
Public Order ◽  
International Investment Law ◽  
Legal Standards ◽  
Investment Treaty ◽  
The Impact ◽  
The Relationship

AbstractThis article examines the impact of international law on the ability of States to mitigate the effects of financial crises. It focuses on the invocation of investment treaty disciplines in the aftermath of the 2001–2002 Argentine financial crisis, and the adjudication of Argentina's defence of a state of necessity under both subject treaties and at customary international law. The article uncovers three interpretative methods in the jurisprudence on the relationship between the treaty exception and customary plea of necessity: methodologies I (confluence), II (lex specialis) and III (primary-secondary applications). Method I is the dominant approach in the jurisprudence and the most restrictive of the three readings. The article argues that method I is mistaken both on a careful interpretation of the two legal standards and on a broader historical analysis of the emergence of investment treaty norms. Given these substantive flaws, the article isolates the motivations to account for the popularity of this method through a close reading of the awards. These reveal continuing tensions in the field, not least the problematic suggestion that a single value of protection should exclusively inform our understanding of the purpose of investment treaties. These sociological features of investor–State arbitration should, it is suggested, inform our choice on other interpretative methods. This comes down to an election between methods II (lex specialis) and III (primary–secondary applications). Method III is the most convincing and coherent reading of the relationship between the two legal standards. The article concludes by offering a framework to address the key interpretative questions implicated in that method: (a) the identification and scope of the notion of ‘public order’ and a State's ‘essential security interests’; and (b) the appropriate test of ‘necessity’ or means–end scrutiny.

LL.M. THESIS: The Role of Constitutional Courts in International Investment Law and Investment Treaty Arbitration: A Latin American Perspective

2014 ◽  
Vol 18 (1) ◽  
pp. 667-745
Author(s):  
Juan Camilo Fandiño-Bravo
Keyword(s):  
Latin American ◽  
Essential Element ◽  
International Investment ◽  
Public Law ◽  
Constitutional Courts ◽  
Economic Relations ◽  
International Investment Law ◽  
Investment Treaty ◽  
Investment Law ◽  
Investment Treaty Arbitration

Protection and promotion of foreign investment, one essential element of international economic relations and a cornerstone of the macroeconomic policy of developing States, like Latin-American States, is deemed to be undergoing a ‘legitimacy crisis’ that manifests itself in a generalized discontent by the system’s major stakeholders and some sectors of public society. One of the sources of such crisis can be found in the lack of a proper understanding of the nature of the system itself. After identifying the reasons why the problematiques of International Investment Law and Investment Treaty Arbitration are better understood as matters of public law, this work adopts a comparative public law approach to study the different ways in which Latin-American constitutional courts intervene in International Investment Law and Investment Treaty Arbitration, and outlines the major features of a proposed dialectic relation between constitutional courts and arbitral tribunals, in which constitutional courts can benefit from the study of the findings of arbitral tribunals regarding the nature and scope of substantive standards of protection, among others, in the process of reviewing the constitutionality of International Investment Agreements, and arbitral tribunals can use national constitutional doctrine as one among other public law sources in which to inform their task. The adoption of such an approach will assist in the reduction of the legitimacy gap of International Investment Law and Investment Treaty Arbitration, thus helping to overcome the crisis of the system.

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>

Investment Treaty Arbitration

2020 ◽  
pp. 616-640
Author(s):  
Anil Yilmaz Vastardis
Keyword(s):  
International Investment ◽  
Special Treatment ◽  
Access To Justice ◽  
Reform Initiatives ◽  
Foreign Investors ◽  
International Investment Law ◽  
Investment Treaty ◽  
Local Access ◽  
Investment Law ◽  
Investment Treaty Arbitration

This chapter challenges investment treaty arbitration at its core by questioning the validity of insistence on special routes for access to justice reserved to remediate the grievances of a class of privileged investors, which can be referred to as ‘justice bubbles’. Despite the potential of the ongoing reform initiatives to genuinely improve the existing investment treaty arbitration model, salvaging and strengthening these justice bubbles that serve the needs of the privileged few sustains and even makes permanent the prioritization of institutions of justice for foreign investors over the improvement of local institutions that could provide justice for members across society, including foreign investors. However, no institutional process used or proposed for settling international investment law disputes is perfect, and each process is ‘imperfect in different ways given the dynamics of participation within them’. Thus, the challenge in this chapter is directed towards the singling out of high-value investment disputes as deserving special treatment above and beyond any institutional options available to any other private party aggrieved by governmental abuse. The chapter then argues that the establishment of a permanent investment court is a short-sighted solution to deficiencies in local access to justice, which is likely to undermine domestic legal developments.

scholarly journals Sources of International Investment Law

2018 ◽  
Author(s):  
Stephan W. Schill
Keyword(s):  
International Law ◽  
Dispute Settlement ◽  
Free Trade Agreements ◽  
International Investment ◽  
International Investment Law ◽  
Investment Treaty ◽  
Investment Law ◽  
Settlement Of Disputes ◽  
Bilateral Treaties ◽  
Investment Treaty Arbitration

This chapter discusses the use of sources of international law in the settlement of disputes arising under bilateral, regional, multilateral investment treaties and investment chapters in free trade agreements, focusing specifically on particularities this field of international law displays in comparison to general international law. It first addresses the importance of bilateral treaties in international investment law and shows that their bilateral form is not opposed to the emergence of a genuinely multilateral regime that behaves as if it was based on multilateral sources. The chapter then considers the pre-eminent importance arbitral decisions assume in determining and developing the content of rights and obligations in the field. Next, the chapter looks at the increasing influence of comparative law and the influence of soft law instruments. It argues that the specific sources mix in international investment law is chiefly connected to the existence of compulsory dispute settlement through investment treaty arbitration and the sociological composition of those active in the field.

What Should We Know About the Origins of International Investment Law?

2020 ◽  
Vol 48 (3) ◽  
pp. 122-131
Author(s):  
Sarah M. Alshahrani
Keyword(s):  
Ottoman Empire ◽  
Historical Context ◽  
Developed Countries ◽  
International Investment ◽  
Arab Countries ◽  
International Investment Law ◽  
The Usa ◽  
Investment Law ◽  
Investment Treaties ◽  
The Impact

AbstractInternational investment law, particularly the global backlash against investment treaties, has evolved recently. This article aims to clarify how international investment law evolved over history, from the early Arab traders in the 7th century to the Ottoman Empire, to understand its hidden aims. It investigates the practice of signing investment treaties, which appear first during the Fatimid Caliphate2 and Mamluk Sultanate3 periods. It then explains when control over foreign investment started to diminish during the Ottoman Empire period.4 Further, it explains the links between the USA Friendship, Commerce and Navigation treaties (FCNs), and current investment treaties, explaining the impact of colonization and imperialism on drafting treaty provisions. Within this historical context, this article illustrates the need to understand the roots of international investment law in order to urge Arab countries to terminate or renegotiate current bilateral investment treaties (BITs) as a number of developing and developed countries have done.

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