International Investment Treaties Research Articles

Domestic Investment Laws, International Economic Law, and Economic Development

Abstract‘Development’ is a legal concept which has been central to the practice of international economic law (IEL). This Article examines how ‘development’ continues to be at the heart of struggles between domestic investment laws (DILs) and international economic law. By examining over 3000 international investment agreements (IIAs) and DILs signed in the last seven decades, this Article identifies the ways in which the concept of development has evolved in tandem with the growth of international economic law by dividing the history of international investment law into six main phases. It traces the emergence of ‘development’ in DIL to the decolonization era arguing that post 1990, the proliferation of international investment treaties and growth of investment treaty arbitration have been used as tools of liberalization on the weak premise that this would lead to economic development. In this context, this Article examines closely the interpretation of ‘investment’ by ICSID tribunals, promotion of international arbitration for economic development, attempts to internationalize economic development contracts, continued relevance of the New International Economic Order, and shift to sustainable development in IEL discourse.

Survival Clause under the International Investment Treaty Reform: Challenge and Response

Survival Clause under the International Investment Treaty Reform: Challenge and Response

A Computational Approach and Dataset for Analysing International Investment Treaties

A Computational Approach and Dataset for Analysing International Investment Treaties

The Effect of Bilateral Labor Agreements on Trade

The period following the end of World War II is marked by increased international cooperation aimed, among other things, at promoting economic integration. As part of these efforts, national governments adopted policies to remove/reduce barriers to the exchange of goods and services as well as the movement of capital and labor. Although the impact of international trade and investment treaties on trade has been extensively documented, little to no attention has been paid to the potential impact of bilateral labor agreements (BLAs) on commerce flows. This study uses a novel dataset of BLAs within a gravity framework and finds that, over 5 years following signature, BLAs have a positive and significant effect on aggregate exports and exports of differentiated goods (i.e., chemicals and miscellaneous manufactured goods).

Skating on Thin Ice: The Human Right to Water in Investor-State Dispute Settlement

Abstract In a number of investor-State dispute settlement (ISDS) cases between the 2000s and the 2010s, a tension arose between the State’s duty to protect its inhabitants by means of policy measures aimed at safeguarding the environment and human health, ensuring that people can enjoy clean, available, and affordable water, and the State’s commitment to protect foreign direct investment under international investment treaties. This paper discusses the right to water as acknowledged by international agreements and United Nations Resolutions, retraces the evolution of foreign direct investment in water services management, examines the interests at stake in investment disputes, and suggests options for balancing the rights of investors and the right to water.

Investment Facilitation and Sustainable Development: Insufficiencies and Improvements of ASEAN Investment Treaties

ABSTRACT Investment facilitation has become a major topic in recent investment rule-making. Different approaches have been adopted to make international investment treaties (IITs) compatible with investment facilitation, including the laissez-faire approach, the patching-up approach, the orientation-shift approach, and the multilateralization approach. Investment facilitation and sustainable development are closely interrelated. Investment facilitation provisions (IFPs) in IITs are expected to contribute to both facilitating investment and promoting sustainable development. While the majority of ASEAN IITs, the RCEP in particular, contain a standalone investment facilitation clause that covers various IFPs, these IFPs are insufficiently effective in promoting sustainable development. It is advised that ASEAN states make further IIT-making and regulatory coordination efforts, especially at the regional level, to make ASEAN IITs more compatible with investment facilitation and sustainable development.

Investment Treaties & the Legal Imagination: How Foreign Investors Play by Their Own Rules

Once considered a highly specific domain, international investment law has come to the forefront of legal debates and is one of the most divisive areas of international law. Under international investment treaties, foreign investors enjoy rights, have limited obligations, and can rely on a highly efficient dispute settlement mechanism: investor–state arbitration.1 In Investment Treaties & the Legal Imagination, Nicolás M. Perrone investigates how this regime evolved from a historical perspective. The book highlights that international investment law as we know it is the outcome of the project of business leaders, bankers, and lawyers in the 1950s and 1960s. For Perrone, these figures successfully developed a legal imagination (i.e. a vision of international investment relations) that gradually shaped and still pervades international investment law. Far from celebrating this vision, Perrone successfully illuminates what this worldview has focused on (investors’ rights) and what it has silenced, marginalized, and made invisible (local communities and Indigenous peoples’ needs). He then calls for the emergence of a new, more inclusive legal vision that considers not only investors’ needs but also those of local communities to achieve inclusive, sustainable development and peaceful, just, and prosperous relations among nations.

Resource Nationalism in Emerging Markets: Protecting the Environment and Local Communities or Imposing Protectionist Measures that Impact Foreign Investment?

Recent global trends show that new waves of resource nationalism are often associated with governments’ attempts to live up to modern ESG standards and to protect the rights of indigenous local communities. While states of course have the sovereign right to regulate within their territory in the interest of their population, this power is not absolute. Disproportionate or pretextual resource nationalism measures will likely negatively impact the investment climate and give rise to violations of international law protections granted to foreign investors through a specialized body of legal rules and norms found in international investment treaties. Such treaties generally allow investors to vindicate their rights through international arbitration claims directly against the state. The clash between states’ sovereign powers and international law investment protections remains acute. Foreign investors should beware of national and regional political trends that could potentially affect their foreign investments and should consider their options for international law recourse.

Tracking the Environment in Investment Arbitration: The World and India

The ongoing global energy crisis and wave of climate-related disasters have prompted renewed attention to States’ powers of enacting regulations for environmental protection and sustainable development. The language used in international investment agreements and treaties informs and determines the extent to which States can introduce progressive environmental policies, while simultaneously ensuring the protection of investors’ rights and interests. The following article critically analyzes such treaty language by discussing the various approaches to and developments in incorporating environmental concerns, and studies how tribunals have interpreted such clauses. In so doing, the article traces a gradual but distinct shift in the approach of investment arbitration tribunals to environmental protection over the past few decades. The article also explores the recent global trend of States unilaterally terminating investment treaties, with a particular focus on India. India's response to its contentious relationship with investor-State disputes may prove instructive for States looking to attract investment while also balancing the protection of the environment.

Transparency in ISDS: A Study Based on Multi-party Agreements

The virtues of transparency and confidentiality in international judicial processes are often debated, including in relation to investor-State dispute settlement (ISDS). The extent of transparency in an ISDS proceeding may vary based on the applicable arbitration rules and the text of the international investment treaties under which the dispute arises. In this context, this article studies the practice of States reflected in select multiparty agreements. The sample of agreements considered, by virtue of the large number of participating countries, significance of trade and investment flows between participants, or both, may be considered representative of global trends or the lack thereof. The article also discusses how the transparency and confidentiality provisions in such agreements interact with the applicable arbitration rules and the net effect on transparency in ISDS. ISDS, transparency, UNCITRAL Arbitration Rules, public access to documents, open hearings, third parties, publication of orders, confidentiality.

Establishing an Appeal Mechanism for Investor-State Dispute Settlement: Challenges, Feasibility, and Options

There is a growing international consensus stating investor-state dispute settlement mechanism (ISDS), with international investment arbitration as the main means of dispute settlement, needs to be reformed, but the reform proposals have not yet been finalised. Among the many options, the option of establishing an appeal mechanism has generated extensive discussion. The permanent, independent and corrective nature of the appeals mechanism helps to address the lack of independence and impartiality of arbitrators under the ISDS mechanism, the inconsistency of arbitral awards, and the lack of control mechanisms. It also has benefit of improving the accuracy of awards. Under the current system of international investment treaties, establishing a multilateral appeal mechanism presents many challenges. However, the Mauritius Convention on Transparency, which uses multilateral instruments to amend bilateral treaties, provides evidence that establishing a multilateral appeal mechanism is feasible.

XALQARO INVESTITSIYA HUQUQIY REJIMIDA DAVLAT KORXONALARINING ROLI

In response to the COVID-19 crisis, governments have taken a wide range of measures to support the business sector. Despite the rise of international investment treaties and the adoption of liberalizing measures by national governments, many states are taking a more cautious and restrictive approach to regulate international investments. In some cases, rescue packages include the acquisition of equity stakes in companies in financial distress, potentially increasing the number and presence of State-owned enterprises in the economy. Especially, in post-socialist countries, state-owned enterprises still play an important role in the economy; however, their activities are concentrated in domestic markets. The discussion of whether the host country’s regulatory measures for foreign public investment are transparent in terms of the use of exceptions to the contract stems from the fact that the restrictive measures relating to the organization or post-establishment of foreign state investments. Such restrictive measures typically apply to the entry of foreign public investment into the market, especially in critical infrastructure and “strategic” industries. The aim of this article is to present the general nature of state-owned enterprises and analyze the regulatory measures taken by some countries.

A study on denial of benefits clause in international investment arbitration

오늘날 일부 국제투자협정은 적용대상 투자 및 투자자의 범위를 포괄적으로 규정하면서, 특정 범주의 투자자를 그 적용범위에서 배제하는 소위 혜택부인조항을 두고 있다. 이는 협정의 체약국과 일정한 관련이 없는 투자자에 대하여 협정의 보호를 배제하는 취지의 규정이다. 즉, 혜택부인조항은 투자자가 실질적인 투자 활동 없이, 오직 투자중재의 관할권을 획득할 목적으로 지배구조를 개편하여 유리한 협정의 보호를 원용하려는 소위 협정쇼핑과 같은 절차남용적 행위를 차단하는 역할을 할 수 있다. 본고는 중재판정사례를 통하여 혜택부인조항의 적용요건과 방식 및 효과를 분석하였다. 이를 통해 투자중재에서 노출된 문제, 예컨대 투자협정의 불분명한 조문을 명확히 하여 중재판정부의 자의적인 해석이 개입되지 않도록 하는 한편, 이것이 투자협정의 보편적인 규정으로 정립하는데 따른 정책적 시사점을 제시한다.Denial of benefits clause in international investment treaties is generally designed to exclude from treaty protection nationals of third States who seek to benefit from provisions that the State parties to the treaty did not intend to grant them. This clause allows a State party to deny the benefits of the treaty to investors that lack a sufficient connection to the treaty party in which they are incorporated. Thus, it prevents the third country nationals who own or control the investor from gaining access to treaty protection when they would otherwise not benefit from such protection due to their nationality. With respect to the procedural requirements of the denial of benefits clause, arbitral tribunals have consistently required that a State must affirmatively exercise its right to deny benefits to an investor. Once a State exercises its right to deny the treaty protection, it remains to be answered whether it affects the tribunal’s jurisdiction to hear the claim, or only the substantive provision under a treaty. This turns on the wording and scope of the provision in question. Denial of benefits clause is an important too by which State parties can achieve a policy of excluding certain investors from the benefits of investment treaties. However, efforts should be made to treaty drafting in order to ensure that investors falling within the scope of a denial of benefits clause and the procedural requirement for invoking the clause are clearly defined in order for this policy to be achieved.

Data Localization and the National Treatment Obligation in International Investment Treaties

AbstractData localization hurts foreign investment and brings potential economic advantages to domestic corporations relative to foreign corporations. This leads to the argument that data localization violates the national treatment principle in international investment treaties. By applying the ‘three-step’ approach to assess the legality of data localization with respect to the national treatment principle, this article finds that the legality of data localization depends on certain circumstances, including the domestic catalogues of foreign investment, the definition of data localization in domestic legislation, and whether international investment treaties explicitly or implicitly incorporate data protection through exceptions for the protection of the state's essential security interests, public order, or public morals. China's acceleration of its legislation processes to regulate cross-border data transfer has significant implications for the negotiations and modifications of Chinese international investment treaties.

Public-Private Arbitration in Romanian Law

The article endeavors to introduce the constitutional and statutory framework for arbitration in Romania, whilst discussing the dilemmatic legislative provisions allowing for public entities to become parties in an arbitration dispute. It includes a discussion of the concept of administrative contracts in Romania and a chronological analysis of the evolution of public-private arbitration under administrative contracts. Some of the landmark Romanian public-private arbitrations under international investment treaties have held the public agenda in recent years and they shape the public debate on arbitration as fit for purpose when it comes to public contracts.

Extending International Legal Aid from Trade to Investment: An Advisory Centre on International Investment Law

Several mechanisms at the international level provide legal aid to lower-income States to strengthen ‘access to justice’ and ‘equality among States’, whether through direct financial support or institutional legal assistance. After reviewing the concept of international legal aid, this article makes the case for the creation of an Advisory Centre on International Investment Law (ACIIL) to provide support to respondent States involved in disputes brought by private investors based on international investment treaties and other instruments, as part of investor-State dispute settlement (ISDS). The increasing costs, complexity and number of investor-State arbitrations has strengthened the need for an international legal aid mechanism in this area, to put under-resourced developing countries in a better position to have affordable access to justice and defend themselves adequately in international investment disputes. This would level the playing field, strengthen the confidence of governments in a reformed investment regime and thereby enhance its legitimacy. Drawing on the experience of the Advisory Centre on WTO Law (ACWL), the article discusses the rationale, key features and current policy challenges of an Advisory Centre on International Investment Law. Advisory Centre on WTO Law, Advisory Centre on International Investment Law, international legal aid, access to justice, investor-state disputes, international investment law, multinational enterprises

Do international trade and investment agreements generate regulatory chill in public health policymaking? A case study of nutrition and alcohol policy in South Africa

BackgroundTrade and health scholars have raised concern that international trade and particularly investment disputes may be used by transnational health harmful commodity corporations (THCCs) to effectively generate public health regulatory chill. The purpose of this study was to contribute to the limited evidence base of trade or investment dispute-related regulatory chill using a case study of nutrition and alcohol policy in South Africa.MethodsWe conducted 35 semi-structured interviews with 36 key stakeholders involved in nutrition, alcohol and/or trade/investment policymaking in South Africa. Interview transcripts were analyzed using thematic analysis. We used Schram et al’s theory on three forms of regulatory chill (anticipatory, response and precedential) to guide the analysis. We report evidence on each form of regulatory chill as well as specific contextual factors that may influence the risk of regulatory chill.ResultsTrade obligations were found to generate a significantly greater anticipatory-type chilling effect on nutrition and alcohol regulation than South Africa’s investment treaty obligations. Response chill was reported to have occurred in relation to South Africa’s proposed tobacco plain packaging regulation while awaiting the outcome of both Australia’s investor-state and WTO state-state disputes. No cases were reported of THCCs threatening an investor-state dispute over nutrition or food regulations, but there were reported cases of THCCs using arguments related to South Africa’s trade obligations to oppose policy action in these areas. No evidence of nutrition or alcohol policy precedential chill were identified. Factors affecting the risk of policy chill include legitimacy and perceived bias of the dispute system, costs involved in pursuing a regulation/defending a dispute and capacity to pay, social acceptability of the industry, a product’s perceived risk to health and confidence in a successful dispute outcome e.g. through cross-border policy learning.ConclusionsOur findings indicate that currently, South Africa’s trade obligations have a more prominent role in inhibiting nutrition and alcohol action than investment treaty-related concerns. However, given the potential for wider use of the ISDS mechanism by THCCs in the future, strategies to protect public health policy space in the context of both international trade and investment treaty and dispute settlement contexts remain important.

Institutionalising Reflection of National Elements in the International Investment Treaties, from the Public Law Perspective

한국은 그동안 자유무역협정과 양자간 투자조약 등을 통해 다양한 형태의 투자보장협정을 체결하였다. 하지만, 일각에서는 이러한 조약들이 국내법이나 국가 이익과 충돌한다고 보기도 한다. 더 나아가 이러한 조약들이 결국에는 이러한 제도를 통해 국내 법질서에 소위 글로벌 기준이 이식되는 통로라는 견해도 있다. 하지만, 이 논문은 국내 법리나 국가 이익에 기초한 국내 영향력이 투자협정에 반영되는 것이 전혀 불가능하지 않다는 점을 밝히고자 한다. 물론 통상 주무 부처는 일반적으로 투자보호 제도와 관련하여 국제 표준을 준수하려는 경향이 강하다. 하지만 통상 정책의 논의 과정에서 조약 체결까지 행정부와 의회에서 다양한 관점이 투입되는 통로가 제도화되어 있다. 물론 그렇다고 하더라도 이러한 국내 영향력이 국제조약에 내재한 근본적 흐름을 자체를 바꿀 수는 없다. 그러나 다양한 절차와 제도를 통해 제한적인 범위 안에서 국내적 영향이 국제투자법의 흐름에 영향을 미칠 가능성이 존재한다. 이 영향력은 비록 미세하지만 장기적으로 국제투자법 체계의 발전에 있어서 무시할 수 없는 파급효를 불러일으킬 수 있으며, 궁극적으로 국제투자규범의 다양성을 증가시키는 계기가 될 수 있다.

Arrested ambition? Foreign investor protections, stabilization clauses and fossil‐fuelled power generation in developing countries

AbstractStates introducing measures to transition away from fossil‐fuelled power generation might be obliged, under international investment treaty provisions, to compensate affected foreign investors in that sector. Treaty‐based investor protections may be augmented by broad entitlements in ‘stabilization clauses’ in project contracts between host States and foreign investors in the sector. This article explores the extent and scope of such clauses with regard to host developing countries, as well as the capacity of the clauses to hold back the transition by these countries. Much literature has focused on the exposure of fossil fuel‐rich developing countries to investor claims for compensation. This article concentrates on the arresting effect of investor protections on the ambition of fossil fuel import‐dependent developing countries to make a robust transition. Information is required urgently about the exposure of these countries to compensation claims, particularly under stabilization clauses, by foreign investors in the fossil‐fuelled power generation sector.

Main aspects of guaranteeing the stability of Kazakhstan’s investment legislation

The article discusses the peculiarities of ensuring the stability of investment legislation in Kazakhstan, the EAEU countries and other foreign countries by analysing the relevant legislation. A brief analysis of the world trends in the conclusion of international investment treaties is carried out, and a similar assessment of the state in Kazakhstan is given. On the basis of foreign experience, proposals have been developed to improve the stability of investment legislation in Kazakhstan.