International Investment Disputes Research Articles

Reforming the Alternative Mechanisms of Dispute Resolution in Pakistan

Pakistan has an effective Alternate Dispute Resolution laws in place, which gives breathing space to resolve dispute outside the court room. Mainly, these kinds of proceedings are governed by The Arbitration Act 1940, within the country. There are some other statutes which deal with the arbitration processes in other fields of life such as The Family law 1961, The Small Claims and Minor Offence Ordinance 2002, Code of Civil Procedure (Amendment) 2002 etc. Before 2005, there were no formulated framework or procedures implemented to govern International Arbitration in Pakistan, except, The Arbitration (Protocol and Convention) Act, 1937, to execute foreign awards. To restore the interest and attract the foreign investors in Pakistan, Parliament of Pakistan has passed “The Arbitration (The International Investment Dispute) Act” in 2011.This statute steps forward to empower International Arbitration and enforcement of foreign awards. This paper focused on macro understanding of the alternate dispute resolution mechanism existing in Pakistan. Further, it highlights the setbacks which are facing by such kind of mechanisms in the country.

Settlement of Disputes between Foreign Investors and the State Receiving Investments: Following the Example of the Free Trade Agreement between South Korea and the United States of America

The article considers the problems of investor-State dispute settlement (ISDS) through investment arbitration The author specifically focuses on problems within the framework of bilateral investment treaties (BIT) and free trade agreements (FTA). International investment disputes, which this article refers to, arise between foreign investors and the State receiving investment. Investor-State dispute settlement (ISDS) is the process of the settlement of such disputes by arbitration. In other words, it is a third person acting as an intermediary between the parties in dispute, to hear and settle such dispute If such disputes were settled in a really reasonable and fair manner by means of this method, the developed countries such as the United States and Australia would not have refused it Thus, the system of investment arbitration has not proved its stability at the international level.

Concept and Types of International Legal Guarantees of the Foreign Investors Rights

The article analyses the international legal guarantees of the rights of foreign investors. International legal guarantees can be classified according to the volume of their rights as General and Special Warranty. General international legal guarantees are guarantees of human rights in the area of civil and political rights and economics, social and cultural rights. These guarantees are the universally recognized basic international legal guarantees to be followed by States. International guarantees of the rights of foreign investors can be called Special in respect of general international legal guarantees as they have a special subject of regulation - obligations of states receiving foreign investment to ensure protection of property rights of foreign investors. International legal guarantees of the rights of foreign investors, as the special guarantees, are contained in international multilateral and bilateral agreements and include guarantees of property rights of foreign investors, compensation, insurance, guarantees for the settlement of international investment disputes, but these guarantees are aimed at ensuring protection of property rights of foreign investors. It should be noted that international legal guarantees for foreign investors are the legal obligations of recipient states, enshrined in international multilateral and bilateral agreements, extending its action against foreign investors, through which foreign investors have an opportunity to exercise their rights and legitimate interests in the sphere of their ownership investments in recipient states.

AN OVERVIEW OF FOREIGN INVESTMENT LAWS ENFORCED IN PAKISTAN

This research paper examines the foreign investment laws and procedure of Pakistan and their role in protection of foreign investment in Pakistan. These laws are untapped area of research and one cannot find any specific research tracing the legal development in this highly specialized field. So far Pakistan has 48 BITs enforced with different countries and has also signed ICSID Convention, which is promulgated locally through Arbitration (International Investment Disputes) Act, 2011 incorporating the Convention in the schedule to ease the difficulty of foreign investors to enforce the awards rendered under auspices of ICSID in the territory of Pakistan. Under this research, an attempt has been made to study prevalent foreign investment laws and its trends in Pakistan. Though Pakistan has significantly improved its foreign investment regime by introducing new investor’s friendly laws like, Special Economic Zones Act, 2011 and Investment Policy, 2013 etc., apart from its previous legislation on the subject, yet this regime needs more improvement and updating. Extensive overview of all existing foreign investment laws were carried out in this research. Fair and Equitable Treatment, Expropriation and other factors affecting foreign investment laws are the areas, which need to be taken care of by policy maker in the existing foreign investment laws of Pakistan. With these aims, it is hoped that this research paper would be a humble contribution in the literature on the subject.

The Reform of Investment Protection Rules in CETA, TTIP and Other Recent EU-FTAs: Convincing?

This paper explores the systemic problems that plague provision-dependent investment protection reforms in CETA, TTIP, and other recent EU-FTAs. The authors suggest that the current international investment system’s asymmetrical structure precludes effective reforms because reforms that “level the playing field” between state and investor run counter to the logic of a system designed with the purpose of protecting investors and investments, not states. The authors suggest that a new symmetrical international investment dispute settlement structure may provide a more convincing answer to calls for reform. After beginning with a background on the necessity of and problems with “vagueness” in law (both generally and in the international investment system), the chapter analyzes the most prominent reforms and reform proposals in the current international investment landscape. The chapter elucidates several of the structural problems that plague these current reform proposals and demonstrates that a symmetrical approach could alleviate these problems.

Petroleum Arbitration Agreement in Iraq: A Tortoise and Hare Race

Trustworthy and effective arbitration is a vital guarantee for foreign investors in the petroleum sector, especially those seeking to invest in post-conflict countries such as Iraq. This article is an evaluation of petroleum arbitration agreements in Iraq, which has not yet promulgated a basic arbitration law, let alone for international investment disputes, nor is it is a party to the New York Convention of 1958 or a member of International Centre for the Settlement of Investment Disputes. It examines the use of legislation concerning arbitration agreements, and argues that the relevant provisions are satisfactory for everyday domestic arbitration, but are inadequate in dealing with international commercial disputes, such as over petroleum. Therefore, it is critical, if Iraq is to be able properly to manage the exploitation of her petroleum resources, and her investor relations, that the legal framework is improved. The author makes recommendations on what is needed.

The European Union’s Proposed Investment Court System: Addressing Criticisms of Investor-State Arbitration While Raising New Challenges

Many would agree that reforms to the existing investor-State arbitration system are necessary, but opinions diverge on precisely what these should be. The European Commission’s proposal is to include an Investment Court System (ICS) in the investment chapters of the European Union (EU) Free Trade Agreements. This article scrutinizes, first, difficulties in setting up an ICS: the International Centre for the Settlement of Investment Disputes (ICSID) Convention’s applicability, the rules regarding conflicts of interest, ethics and ancillary professional affiliations of adjudicators, and requirements in terms of nationality, expertise and diversity of the bench. Secondly, problems are examined which may emerge in running an ICS: ensuring transparency, allowing for third party participation, and avoiding major increases in length and costs of the proceedings. Thirdly, issues concerning the review and enforcement of ICS decisions are analysed. Although the Commission has made a meritorious attempt at countering the main criticisms of investor-State arbitration, several new challenges have emerged which need to be addressed in order for an ICS to be fit for purpose. Although the incorporation of investment rules into the World Trade Organization (WTO) would seem unlikely to become politically feasible in the foreseeable future, multiple bilateral ICS mechanisms could serve as stepping stones towards a multilateral adjudicatory system for international investment disputes.

APPLICATION OF THE CONCEPT OF PIERCING THE CORPORATE VEIL IN MECHANISMS OF HUMAN RIGHTS PROTECTION

The article is dedicated to the application of the concept of piercing the corporate veil in mechanisms of human rights protection. Author points out that convergence of public and private aspects of international law influence the level of implementation of concepts, which previously has been applied only to international private law, international commercial law and on national legal levels. The level of convergence has led to the application of the concept of piercing the corporate veil (which originally applied only to international investment disputes) in practice of international courts and quasi-courts of human rights. However, the application of the concept within the framework of the mechanisms for the protection of human rights is very limited and complicated due to the lack of implementation of the concept at international level and absence in every national legal system.

Challenges to Transparency and Ethics in Alternatives to Arbitration in the Realm of International Investments

Arbitration has traditionally been considered the best way of resolving disputes on international investment. Yet, some parties involved in investment disputes, notably developing countries, have raised concerns about the effectiveness of arbitration. Alternatives to arbitration have been developed with a view to providing the international investment dispute system with more credibility. These alternatives are characterized by informality and tend to be less time-consuming than arbitration. Nonetheless, they also face challenges, especially a lack of transparency and legitimacy. This paper analyzes why arbitration has been criticized and investigates the main challenges to transparency and ethics in alternatives to arbitration in the field of international investment disputes.

Challenges to Transparency and Ethics in Alternatives to Arbitration in the Realm of International Investments

Arbitration has traditionally been considered the best way of resolving disputes on international investment. Yet, some parties involved in investment disputes, notably developing countries, have raised concerns about the effectiveness of arbitration. Alternatives to arbitration have been developed with a view to providing the international investment dispute system with more credibility. These alternatives are characterized by informality and tend to be less time-consuming than arbitration. Nonetheless, they also face challenges, especially a lack of transparency and legitimacy. This paper analyzes why arbitration has been criticized and investigates the main challenges to transparency and ethics in alternatives to arbitration in the field of international investment disputes.

국제투자분쟁에서 비례성원칙의 적용에 관한 연구

국제투자분쟁에서 비례성원칙의 적용에 관한 연구

New Thinking on Transnational Corporations and Human Rights

Although Transnational Corporations (TNCs) enjoy rights alongside sovereign States, such as the right to arbitrate in international investment disputes, the idea of holding them to account for alleged human violations has been elusive. While there are renewed efforts at the UN Human Rights Council towards an international legally binding instrument aimed at holding TNCs accountable for violations of international human rights standards, this article explores and analyses the usefulness of a Multi-Stakeholder Initiative (MSI) approach in this process. Accordingly, it seeks to reformulate the debate on the accountability of TNCs by affirming a MSI engagement as a workable complementary process, which – although it is being downgraded in most literature on TNCs and human rights accountability – might nevertheless provide best possible outcomes for such a heated subject. Drawing on examples from the Kimberley Process and the global fight against conflict diamonds, it will be argued that despite that fact that MSIs are not an entire replacement of hard-law solutions to global regulatory challenges, they do in principle offer a legitimate and useful approach to the human rights accountability of TNCs.

The Investment Arbitration Practitioner: Chiara Giorgetti (ed.), Litigating International Investment Disputes: A Practitioner’s Guide.

Among practical guides to international investment arbitration, Litigating International Investment Disputes stands out due to both its practitioner-friendly selection of topics and in its approach to discussing the myriad milestones of investment dispute proceedings. The contributing authors underline the strategic importance of making procedural decisions in the early stages of the dispute settlement process and offer concrete suggestions on how to use the special nature of investment arbitration to a client’s advantage. Despite omitting a number of helpful topics, and overburdening some chapters with excessive descriptive detail, Litigating International Investment Disputes should serve as a useful companion tool and reference guide, particularly for the less-seasoned investment arbitration practitioner.

The Use of Economics in International Trade and Investment Disputes: A Coherent Way Forward

In this paper we assess the quality and coherence of the use of economics in dispute settlement in two fields of international economic law: international trade and international investment law. We argue that four economic concepts are frequently used and/or of critical importance for both international trade and investment law. Those concepts are the concepts of “likeness”/”like circumstances”, causality, “necessity” and damage calculation. We highlight differences in the way in which economics has been applied to assess these concepts and argue that coherence in the use of economics can be increased by reassessing the way in which economics is brought into submissions by parties and the processes that are relevant for adjudicators when interpreting economic evidence. We argue that a common set of guidelines for submitting quantitative evidence in WTO or investor-state dispute settlement proceedings can contribute greatly to setting quality standards and to creating trust as to the reliability and acceptability of economic evidence submitted to adjudicators. In an appendix to this paper we make suggestions as to what such guidelines could look like. 1 This paper was partly authored with support from the project ‘Dispute Settlement in Trade: Training in Law and Economics’ ( www.dissettle.org ), a Marie Curie Initial Training Network funded under the EU Seventh Framework Programme (Grant Agreement No FP7-PEOPLE-2010-ITN_264633). The paper draws heavily on the contributions to the forthcoming volume Jansen, Pauwelyn and Carpenter (Eds.): “The Use of Economics in International Trade and Investment Disputes”, Cambridge University press, and all the contributors to that volume are herewith thanked. The authors would also like to thank Manuel Sanchez Miranda for editorial assistance. All errors and omissions remain the authors’ and views expressed are personal and do not reflect the views of the institutions they are affiliated to. 2

Rules of Interpretation (Article 32 of the Vienna Convention on the Law of Treaties)

Discusses the role played by the Vienna Convention on the Law of Treaties 1969 art.32, which permits recourse to a treaty's travaux preparatoires and the circumstances of its conclusion as a supplementary means of interpretation, in the Convention's overall interpretative scheme. Considers the potential application of art.32 in international investment disputes.

Circumstances Precluding Wrongfulness in International Investment Law

The systemic role of circumstances precluding wrongfulness, both in international investment law and in international law more generally, is neither central nor, at least in the form in which they are currently expressed, likely to be of great practical importance in most cases. But circumstances precluding wrongfulness have played an important role in some international investment disputes, and provide an excellent illustration for how blackletter international law works, particularly in relation to countermeasures and necessity. If these decisions are anything to go by, future developments will be of great interest to both practitioners and academic commentators, and directly touch upon the systemic pulse of international investment law and law of State responsibility.

Human Rights Law in International Investment Arbitration

Parts I-III of this paper give an overview of references to human rights – mainly at the initiative of host states and non-governmental third parties, but increasingly also by complainants and judges on their own initiative – in international investment disputes and investor-state arbitral awards and the responses by investment tribunals to such human rights arguments. They discuss the problems of ‘legal fragmentation’ of international investment law and human rights law, the need for judicial balancing of state-centered ‘principles of justice’ (like state responsibility) and person-oriented principles of justice (such as human rights and ‘proportionality balancing’) in trade and investment disputes, and related problems of legal methodology. Part IV concludes with a brief discussion of the increasing impact of the human rights obligations of all UN member states on investment disputes in other international courts and in private commercial arbitration, for instance due to the UN Guiding Principles on Business and Human Rights and their approval and increasing incorporation by thousands of transnational corporations and non-governmental organizations (like the International Federation of Football Associations) into their commercial contract practices.

Investment Arbitration Appellate Mechanism Options: Consistency, Accuracy, and Balance of Power

For policymakers exploring appellate mechanism options for the international investment law regime, the competing interests of efficiency and finality will receive due consideration. But two additional — and possibly overlooked — risks also merit close analysis.First, gains in the consistency of treaty interpretation by a standing, permanent appellate body would not guarantee corresponding gains in the accuracy of treaty interpretation. As illustrated by two lines of case law applying denial of benefits provisions under a number of investment treaties, consistent treaty interpretation does not ensure accurate treaty interpretation. Second, a shift from an ad hoc to a more institutionalized international investment dispute settlement regime would significantly impact the balance of power between States and adjudicators. In general terms, standing, permanent tribunals are associated with greater levels of independence than ad hoc tribunals. The experience of the WTO Appellate Body illustrates how standing, permanent tribunals can develop as institutions through bold acts of independence. Greater levels of tribunal independence give rise to a greater need for control mechanisms to address the risk of tribunals exceeding their mandate. That risk is heightened in the context of the international investment arbitration, where, even under the current ad hoc regime, the level of tribunal independence is significant. Legitimate policy arguments — based on goals of achieving greater consistency, coherence, and predictability — can be made in favor of the development of one or more appellate mechanisms within the international investment law regime. But policymakers exploring appellate mechanism options should give careful consideration to all competing policy interests, which are not limited to the goals of efficiency and finality. The two additional risks analyzed in this article — the gap between consistent and accurate treaty interpretation, and the balance of power consequences of greater institutionalization — should be part of the policy discussion. That policy discussion also should include consideration of control mechanism options to address such risks.

Investor-State Mediation in International Investment Dispute Settlement a Critical, Integral Multi- and Transdisciplinary Analysis: Analysis & Development of Policy Implications and Practical Guidelines, with a Particular Focus on De-Biasing the Mediation Process

Investor-State Mediation in International Investment Dispute Settlement a Critical, Integral Multi- and Transdisciplinary Analysis: Analysis & Development of Policy Implications and Practical Guidelines, with a Particular Focus on De-Biasing the Mediation Process

Advancing Doctrine through Devil’s Advocacy: A Response to Alan O. Sykes

Alan Sykes’ editorial comment, Economic “Necessity” in International Law, provides a multi-layered analysis of the defense of “necessity” in international investment disputes. Sykes’ main proposition is that the obligation to compensate investors for government measures prejudicing their investments during economic emergencies mitigates the risk of moral hazard and incentivizes States to “select the least expensive way to protect their interests (the optimal policy instrument).” Otherwise, he contends, “actors will take risks that imperil them to an excessive degree if they can save themselves by imposing costs on others.” Sykes nonetheless argues that payment of the compensation could be deferred in light of the emergency, and not be subject to market interest rates.