System Of Investment Arbitration Research Articles

Intelligent Matching System of Clauses in International Investment Arbitration Cases Based on Big Data Statistical Model

Abstract The international investment arbitration system between investors and host countries originated from the international commercial arbitration system. International investment disputes are usually disputes caused by the host country’s policies to protect public interests and the dissatisfaction of private investors caused by regulations. There are few methods for intelligently recommending judgment documents based on factual texts in international investment arbitration cases. Because of this, this paper proposes a recommendation algorithm for international investment arbitration adjudication documents based on multimodal feature fusion. This paper teaches the structural information of paragraph tags and the relationship between paragraph contexts and incomplete judgment documents. The algorithm achieves a good structuring effect of international investment arbitration documents.

Is There Life After Death?: The Persuasive Value of Annulled Investment Awards

Abstract In investment arbitral jurisprudence, previous decisions of arbitral tribunals are held in high regard. But what happens to an award’s persuasive value when it is annulled? The article seeks to examine the legal status, legitimacy, and, through these factors, the persuasiveness of annulled investment awards. The article finds that since the quasi-precedential system of investment arbitration is largely governed by meta-legal considerations, the status of annulled awards is also governed by these considerations, that is, considerations of legitimacy. The author compares the persuasive value of annulled investment awards with that of dissenting opinions of arbitrators and with overturned World Trade Organization (WTO)Panel Reports with the aim of shedding some additional light on questions of legitimacy and persuasiveness. Finally, the article offers a typology of investment arbitral tribunals’ possible reasons for referring to annulled awards and illustrates the relevant categories with some of the more influential annulled investment awards of recent years.

The Influencers of International Investment Law: A Computational Study of ISDS Actors’ Changing Behavior

AbstractThis Article studies the change in behavior over time for the professional actors in the international investment arbitration system. Using the results from a large-scale computational analysis, I find indications that the actors have increased their use of citations and their use of terms that originate outside of the litigated treaties. In light of these findings, I argue that the actors are increasingly challenging the insulated structural outset of international investment law with a more systemic approach to legal reasoning. Subsequently, I explore if theories from the realm of cognitive science may provide explanations for why the actors are changing their behavior and what consequences such cognitive mechanisms may have on the systems development.

The 2019 Morocco Model BIT: Moving Forwards, Backwards or Roundabout in Circles?

Abstract The Moroccan Model Bilateral Investment Treaty (BIT) (2019) adds to a growing body of ‘new-generation’ model BITs that have fuelled the conversation on reforming the investment arbitration system. Broadly speaking, such agreements have attempted to rethink means of dispute resolution and traditional investment protection standards while adding detailed investor obligations and standards of conduct. In that context, this article discusses the provisions of the Moroccan Model BIT (2019), highlighting not only progressive developments but also areas of concern. Upon comparing the provisions of the BIT with those of other ‘new-generation’ investment agreements, as well as existing treaty practice, the authors offer the following findings.

Litigating Terror in The Sinai After The Egyptian Spring Revolution: Should States Be Liable to Foreign Investors for Failure to Prevent Terrorist Attacks?

The ambiguity of the due diligence standard of the Full Protection and Security obligation in investment treaties persists to this day. A recent ICSID tribunal found a developing state liable for breaching the Full Protection and Security obligation due to its inability to protect a foreign investment against terrorist attacks in a remote deserted area. In this article, we analytically criticize the Ampal v. Egypt arbitral award against the comprehensive factual matrix behind the case. Based on our criticism of Ampal, we argue that developing states should not be liable for failing to prevent or stop terrorist attacks under the Full Protection and Security obligation when they exert efforts relevant to their limited capacity to offer such protection. Further, we argue that investors should also optimize political risk insurance offered by the Multilateral Investment Guarantee Agency when they choose to invest in a host state that might be vulnerable to terrorist attacks, might face potential insurgencies, or suffer from political turmoil. Finally, we highlight the importance of integrating other subfields of international law – such as international human rights law – to the international investment arbitration system, especially in defining what acts or omissions are required of a host state to fulfill the due diligence standard of the Full Protection and Security Obligation.

Arbitrator teams and dispute resolution performance: an empirical analysis

In the context of international investment disputes, this paper investigates how arbitrator team characteristics affect team performance in solving disputes between a host country and a foreign investor. Our data include 277 judgments issued by arbitrator teams at the International Centre for Settlement of Investment Disputes at the World Bank from 1972 to 2018. The time to resolution and the quality of the final judgment, as measured by the requirement of a follow-on proceeding to rectify mistakes, are used to measure the team performance. We consider both biographical and professional characteristics of the arbitrators as determinants of the team performance. We find that mixed gender teams and previous team member’s collaborations increase the time to resolution contrary to team members’ experience and diversity in the professional background that decrease it. None of the team characteristics considered has an impact on the quality of the final judgment. Our findings talk to the current policy debate on the reform of the international investment arbitration system aiming to increase its effectiveness and transparency.

ВОПРОС О СИСТЕМЕ РАЗРЕШЕНИЯ СПОРОВ В НОВЫХ ИНВЕСТИЦИОННЫХ СОГЛАШЕНИЯХ ЕВРОПЕЙСКОГО СОЮЗА

The system of resolving international investment disputes has been subjected to intense criticism from the professional and lay public in recent decades. The lack of transparency, predictability, coherence of arbitration awards and legitimacy of the investment arbitration system has led to an increase in efforts to reform the existing system. The European Union is not only one of the most vocal critics of the current system, but also one of its most active reformers. Since the entry into force of the Lisbon Treaty in 2009, the European Union has acquired exclusive competence in the realm of foreign direct investment as part of the common commercial policy. From that moment on, the European Commission began negotiating free trade agreements, many of which also include investment chapters. The most important ones are the Comprehensive Economic and Trade Agreement concluded between the European Union and Canada (2016), Agreement on Investment between the European Union and Singapore (2018), Agreement on Investment between the European Union and Vietnam (2019), as well as the Comprehensive Agreement on Investment between the European Union and People’s Republic of China, which has been agreed in principle at the end of 2020, even though the agreement has not yet been formally signed. In these treaties the European Union seeks to push for reform steps leading to the adjustment of the system for resolving international investment disputes in that they introduce a new system of investment courts that will gradually lead to the establishment of the multilateral investment court with the option of appeal at an appellate instance. This would undoubtedly increase the credibility, legitimacy and transparency of the entire system of internatnional investment dispute settlement. This paper aims to summarize, on the basis of an analysis of the relevant provisions of the trade and investment agreements concluded by the European Union over the last decade, the practical progress made by the European Union in reforming the international investment dispute settlement system. Since none of these treaties has become fully effective yet due to the lacking ratification of all EU member states, it will take several more years before we see full practical implementation of the discussed provisions.

Social movements, reframing investment relations, and enhancing the application of human rights norms in international investment law

AbstractThe recent moderate trend to increasingly apply human rights law in investment awards is accompanied by certain new investment treaties which include expressed human rights provisions. An analysis of recent investment awards indicates that though there are some ‘winds of change’ in this field, it is equally noticeable that human rights law is far from being mainstreamed in international investment law. Investment arbitration procedural law is also undergoing a process of change, and the new procedural rules tend to enhance public elements in the investment arbitral system. This study is aimed at explaining these recent legal changes, highlighting the role of social movements in reframing investment relations as well as increasing public pressure to apply human rights law. These framing changes concern broadening the frame of investment arbitration (beyond the foreign investor–host state dyad), reversing the perceived balance of power between investors and host states, and zooming-in on local individuals and communities residing in host states. The discussion on factors impeding legal change in this field emphasizes the role of the private legal culture prevalent in the investment arbitration system, which is reflected and reinforced by certain resilient socio-legal frames. Informed by this analysis, the study suggests some legal mechanisms which can mitigate the inter-partes frame, and increase the application of human rights law in investment arbitration; inter alia, rigorous transparency rules that are likely to facilitate increased public pressure on tribunals and increase the participation of social movements representing local actors in arbitral processes.

Problems of Investor-State Dispute Settlement (ISDS)

The research deals with Problems of Investor-State Dispute Settlement (ISDS) focused on Investment Arbitration. The author especially focuses on the problems under BIT (Bilateral Investment Treaties) and FTA (Free Trade Agreements. Mentioned in this article, International investment disputes are generated due to host countries and foreign investors. ISDS is Dispute settlements between investors and countries. This is not suit proceedings but arbitration proceedings. That is, ‘activities of the third party to arbitrate and settle disputes by intervening between parties in dispute. ’However, Dispute Settlement through this way, is it really reasonable and fair system? If it is indeed fair and reasonable system, advanced countries like the United States and Australia would not have abandoned it. Therefore, the investment arbitration system is never a dispute settlement proceeding that has been verified and stabilized internationally.

Investor-State Arbitrators' Duties to Non-Parties

Arbitrators in investor-state disputes plainly owe duties to the parties. They are appointed to do a job and they must do that job and do it well: competently, diligently, ethically, expeditiously, fairly, impartially and independently, and properly. They must act with sound judgment, due care, and an open mind. But do investor-state arbitrators also owe duties to anyone else? If so, what duties do they owe and to whom? From where do such duties originate? Given that party autonomy is a hallmark of arbitration, may duties to non-parties ever prevail over the will of the parties? How are such duties enforced? And, what does the existence of duties to non-parties mean for the system of international investment arbitration? Investment arbitration was born from a party-centric tradition. But it has become clear that tribunal rulings affect non-parties. Scrutiny is needed of the responsibilities the arbitrators owe those outside the room. This article explores this less-trodden terrain. It begins by establishing a beachhead – a clear example of a duty to a non-party, as a proof of concept – before moving into rougher territory. Thus, it opens with an illustration of a duty created by the treaty establishing the International Centre for Settlement of Investment Disputes (“ICSID”): a tribunal must issue a written, reasoned award. After demonstrating that this first duty is owed to ICSID itself as an institution (as well as to the parties), the article adds other duties that investor-state arbitrators owe to arbitral institutions and to non-party participants in investment cases, including other states and non-government organizations. It then introduces the concept of systemic duties, which arbitrators owe not to particular persons, but to the creators of the investment arbitration system (states) and its ultimate beneficiaries (the global public). Finally, the article discusses how recognizing duties to non parties both informs a proper understanding of the investment arbitration system and may help improve that system.

Human Rights and IP in Investor to State Dispute Settlement

As the few existing intellectual property (IP) related investment arbitration awards demonstrate, human rights issues such as protection of public health might appear in such contexts, making IP-related investment disputes prone to human rights argumentation. The chapter focuses on the overlap of human rights, IP and IIAs. It evaluates the impact human rights have had on the relevant ISDS practices. The main emphasis is on the reasons for the increasing overlaps and the ways in which investment tribunals should approach them. The chapter rejects human rights proportionality as the proposed solution to increase the legitimacy of investment treaty arbitration. Through proportionality, courts seek to define an appropriate relationship between different conflicting interests at hand, each entitled to legal protection. Instead of suggesting a broad integration of human rights law under the investment tribunals’ operational sources of law, the chapter posits that a more legitimate way forward – pending more profound reform of the whole investment arbitration system – would be to decrease the overlaps through IIA design and to develop deference as an approach in ISDS, especially through the doctrine of margin of appreciation. The problem is not too little human rights in ISDS but too extensively applied and interpreted investment treaty standards, encroaching on host states’ regulatory powers and ability to protect and fulfil human rights obligations.

Re-thinking the requirement of making an investment in accordance with domestic laws as a substantive right and a cause of action for host states under the BITs

This paper challenges one of the most traditional notions in international investment arbitration, which is that host states don’t have any substantive rights under the BIT’s framework. This work’s thesis is that the current BIT framework actually grants the host state a substantive right, and therefore a cause of action in the investment arbitration system. This right emanates from the requirement that the investment must be in accordance with the host state’s law. The paper explains that there’s a line of both BITs and ICSID cases that hold the requirement of compliance with the host state’s laws as autonomous, and that this autonomy imports a substantive right for the host states grounded solely in the BITs. This idea is also supported by the spirit and objectives of both the ICSID Convention and the BITs.

Hold on to Your Hat! Issue Conflicts in the Investment Court System

Abstract Since 2015, the European Commission (EC) has been advocating the establishment of an investment court system (ICS). A key aspect of the proposal is the creation of the strictest ethical standards ever seen in the field of investor-state arbitration. The exercise of functions as an arbitrator does not traditionally require exclusivity, and many lawyers offer their services in the market in other capacities. This situation is described as the “double hat” phenomenon and is seen as one of the most frequent moral hazards in investment arbitration. Both the Comprehensive Economic Trade Agreement (CETA) and the Commission’s investment chapter proposal for the Transatlantic Trade and Investment Partnership (TTIP) prohibit adjudicators from acting as legal counsel in other investment dispute cases. This article discusses the potential advantages and drawbacks of the EC’s approach to the “multiple hat” problem and their potential impact on the investment arbitration system as a whole.

The Great Asymmetry and the Rule of Law in International Investment Arbitration

International investment arbitration can be said to be built on a great asymmetry: on the one hand, foreign investors are endowed with a set of significant rights, most notably the right to initiate disputes before arbitration tribunals; on the other hand, States and citizens of the host State affected by the investment do not enjoy comparable rights. This article assesses whether the in-built asymmetry of investor-state arbitration runs counter to the rule of law. Clarifying the relationship between the rule of law and the system of investment arbitration is of crucial importance, given that one of the rationales to have investor-state arbitration in international treaties is the enhancement of the rule of law; at least, many jurists so profess. While there is a rich literature (empirically) studying the effects of investment treaties on the rule of law, few studies have addressed whether the investment arbitration itself has the qualities of the rule of law. This article bridges this gap by showing how the in-built asymmetry of the system runs counter to the rule of law. Drawing on the rule of law research field, two conceptions of the rule of law - a teleological and a reflexive one – are presented and employed as basis for the the main analysis of this article. In light of the examination of the great asymmetry and of its clash with the rule of law, the article’s concluding remarks hint at possible reforms that would rebalance the asymmetry of current investment arbitration law.

An Assessment on the Enforcement of the ICSID Arbitral Award in China

This article examines the enforcement of the ICSID Awards in China. China is one of the most enthusiastic signatories of Bilateral Investment Treaty that grants mandatory jurisdiction to the ICSID investment arbitration system. It notes that China has failed to enact any specific legislation to comply with the ICSID Convention enforcement obligations, making its compliance with these obligations uncertain. It concludes that the only way that the China could claim to have fulfilled its treaty obligations is to declare that the ICSID Convention and related agreements have a direct effect on its domestic law. The status of treaties within China law, however, remains uncertain and unsettled. For this reason, it is likely that a judicial interpretation from the Supreme People’s Court is necessary to guarantee enforcement of such an award within China. Without such an interpretation, it is highly doubtful that a China court would enforce an ICSID award, despite the ICSID Convention plain requirement that it do so.

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.

The International Rule of Law in Latin American Investment Arbitration: UNASUR’s Advances in Arbitrator Appointment and Disqualification

In 2008, Ecuador raised the need for the creation of an alternative dispute resolution mechanism within the Union of South American Nations (UNASUR). Any system of investment arbitration should comply with democratic principles and the international rule of law which provide predictability, transparency and legitimacy for arbitral decisions and thus should avoid political and economic bias. This article shows Latin America’s historical inclination towards arbitration and focuses on the 2014 UNASUR Project’s proposed method of appointment and disqualification of arbitrators, and its approach to the execution of awards. By way of comparison with International Centre for Settlement of Investment Disputes (ICSID) tribunals, the article goes on to suggest how an application of the international rule of law could help guide and structure arbitrators’ behaviours in the proposed UNASUR Project as well as under the current ICSID framework to avoid arbitrators’ deviation from the law and prevent their creative, independent interpretations.

The Pragmatism and Justice of International Investment Arbitration

International investment arbitration has become a contentiously discussed issue in Europe. Opposing voices, however, too often disregard the merits of this method of dispute settlement. This often leads to categorical opposition within the public rather than concrete proposals. This paper aims at formulating a constructive critique, viewing the controversy as a conflict between pragmatism and justice. Drawing on Jurgen Habermas and Rainer Forst, it is argued that the system lacks legitimacy because it is not sufficiently subordinated to common societal norms. To gain control over the international investment arbitration system and with it basic legitimacy, the paper builds up to suggest an international investment appeals facility.

Australia's embrace of investor state dispute settlement: a challenge to the social contract ideal?

This paper explores the origins of investor-state dispute settlement (ISDS) treaties and their implications for the Australian social contract. This analysis includes how and why ISDS emerged in NAFTA, was rebuffed with the failure of the Multilateral Agreement on Investment (MAI), and became incorporated into most subsequent bilateral US trade and investment agreements. The paper considers Australia's exposure to ISDS—first through using it in bilateral investment agreements in nations with inadequate governance mechanisms to support the rule of law, then turning against it when a multinational tobacco company tried to use the mechanism to overturn scientifically endorsed, democratically approved and constitutionally validated tobacco plain packaging measures. The paper concludes by exploring the hypothesis that an alternative governance vision can be achieved in which the system of investment arbitration and trade law is made coherent with presumptively more democratically legitimate normative systems such as constitutional and international law.

Abuse of Process in International Investment Arbitration

Abuse of process has been regularly invoked before international arbitral tribunals to dismiss investment claims. Because of its multifaceted character, the concept deserves a careful analysis in the light of international and comparative law. In investment arbitration, it ismentioned sometimes as amere preoccupation justifying the teleological interpretation of a treaty, sometimes as the motive for the adoption of a newarbitration rule, and sometimes as a legal principle limiting access to arbitration. This article studies the different situations deemed to be abusive in the practice of investment tribunals, ranging from frivolous claims to conduct undermining the integrityof the arbitral procedure.An overall analysis reveals the main features of abuse of process as a legal principle, and its potentialities for the emergence of a system of investment arbitration.