The Use of Investment Treaty Standards to Enforce Other International Legal Regimes and Domestic Law

Abstract

Abstract This chapter discusses the use of substantive standards under investment treaties to enforce other (not investment protection–related) international obligations and domestic law, seen through the prism of the rule of law. In interpreting and applying substantive standards of investment protection, diverse factual scenarios can implicate different international and national legal regimes. The legal framework governing the applicable law and rules of interpretation allow for a considerable arbitral discretion in deciding if and how these regimes impact the reasoning process and/or case outcome. Investment arbitration case law shows an uneven approach when it comes to the scope and depth of engagement with these regimes in decision-making. In terms of the commonly recognized rule-of-law requirements, there is thus a tension between legality and predictability. But the awards discussed in this chapter also show that arbitrators can and do persuasively engage with different legal regimes when applying treaty standards, often exhibiting a deep and detailed understanding of these regimes. Bearing this in mind, the normative path out of the tension between legality and predictability can be sought in the ideals of the rule of law at both international and national levels. Investment arbitrators should, to the extent possible, enforce other legal regimes or at least offer clear explanations as to why such enforcement cannot take place. Such an approach can bolster international and national rule of law through enhancing coherence and effectiveness of international obligations and highlighting areas of conflict where legal or governance reforms might be necessary.