Investor-state Dispute Research Articles

Medical decision support in the light of interactive granular computing: Lessons from the Ovufriend project

The main aim of the paper is to discuss the architecture for the future Intelligent Systems (IS's) and Decision Support Systems (DS's) dealing with complex phenomena such as supporting medical decisions (diagnosis and therapy) and to emphasize challenges in designing such systems. More precisely, the paper presents arguments for developing a specialized computing model based on the interactive granular computing paradigm which can help to design IS's and DS's more close to the prototypes of real life decision making. In this regard, the paper brings to the fore different experiences faced during designing other medical IS's or DS's.As a starting step, the paper considers the experience of developing the OvuFriend platform and outlines some possible extension of it in the framework of the proposed architecture on the basis of Interactive Granular Computing (IGrC) model. Specifically, our attempt is to analyze a scheme, which is being used in the platform of OvuFriend for determining health risks and possibilities of a woman to conceive a child, from the perspective of IGrC. The target of the paper is two fold. Firstly, to show how the underlying AI algorithm of this scheme can be related with the notion of computing in the context of IGrC. Secondly, to identify possible extensions of the existing scheme so that it becomes more dynamic, interactive, and close to personalized medicine.

ISDS 2.0: time for a doctrine of precedent?

Abstract The reform process for ISDS at UNCITRAL is reaching its climax. Within the next few years, a treaty for ‘ISDS 2.0’ should emerge from this process. A key feature of ISDS 2.0 will be a new international court for resolving investor–state disputes. This court should include an appellate tribunal. A core function of this appellate tribunal will be to produce consistent case law, noting a common complaint about ‘ISDS 1.0’ is that it has produced inconsistent case law. There is good reason to believe that the appellate tribunal of ISDS 2.0 can deliver consistent case law, but the promoters behind ISDS 2.0 need to be careful what they wish for. The WTO dispute settlement system produced consistent case law, yet that achievement turned out to be a reason for its subsequent breakdown. Consistent case law apparently sounds good in theory, but it is not welcome in practice. Is there a way out of this conundrum? This article proposes that a formal doctrine of precedent is the solution. This proposal might initially provoke some surprise—a softer system of precedent is apparently the best compromise. But a doctrine of precedent can be crafted to limit adjudicative law-making power, while emphasizing states’ control over their investment–treaty obligations. This article puts forward the broad outline of this conception of a doctrine of precedent, explains why it gives effect to states’ interests, and examines the methods by which a doctrine of precedent could be adopted.

Impartiality and the Construction of Trust in Investor-State Dispute Settlement

Abstract This article analyses impartiality in investor-State dispute settlement (ISDS) by identifying the way that the parties’ trust in arbitrators is constructed. Drawing on the findings of a large-scale empirical project, it questions the applicability of an orthodox judicial doctrine of impartiality to ISDS on the grounds that trust in arbitrators is constructed on a fundamentally different basis from that of trust in judges. The primary feature of a judicial doctrine of impartiality is that trust is founded on an absolutist approach to impartiality which is intended to ensure that judges have no predispositions to parties. In contrast, trust in ISDS is founded on the method of party appointment which is based on a very different assumption—that arbitrators’ predispositions can be valuable and appropriate in the decision-making process. The empirical findings show that the parties’ choice of a predisposed arbitrator is generally considered compatible with the understanding of impartiality in ISDS. Accordingly, this article calls for a new, and contextualised, approach which better corresponds to the fundamental value of trust in ISDS.

Armed Conflicts and Investor-State Disputes

Armed Conflicts and Investor-State Disputes

Another ‘Bleak House’—the decision of the German Federal Supreme Court on the inadmissibility of intra-EU ICSID arbitrations

Abstract The decision of the German Federal Supreme Court of 27 July 2023 has sparked intense discussions. Unexpectedly, the Court granted a declaration of inadmissibility of intra-EU ICSID proceedings under section 1032(2) of the German Code of Civil Procedure. The decision is of significant practical relevance and yet another push against intra-EU Investor–State Dispute Resolution. After a short introduction (i), we will describe the legal and factual background of the decision (ii) and summarize the Court’s reasoning (iii). Thereafter, we will comment on the decision (iv) and conclude by pointing out possible implications for future intra-EU ICSID proceedings (v).

The ICS vs. the ICSID system: a possible compromise in the light of the sustainable development

The current inclination to direct investment efforts towards sustainable development, coupled with the 2030 Agenda for Sustainable Development, unveiled in 2015, which included the 16th goal of granting equal access to justice and reinforcing the rule of law on a universal level, has brought investor-state dispute settlement (ISDS) mechanisms to the forefront of global investment discussions. The ICSID has carried out a crucial role in overseeing the ISDS system, offering arbitration facilities for disputes between investors and states for over six decades. However, the ISDS system has faced criticism in recent years. In response, a new Investment Court System (ICS) implemented by the EU that aims to address these concerns by establishing a permanent court formed with judges who have been appointed by member states in advance and are distributed to disputes in a rotating and random manner. It also limits the parties’ freedom to opt the applicable law and considers that the substantive provisions in investment agreements are the applicable law to the raised disputes and inserts an appellate mechanism review for law and fact matters as well. The paper discusses the relationship between the ICS and the ICSID system in the light of sustainable development and examines a possible compromise between both systems by considering the ICS as inter se modification of the ICSID convention based on investigation of its compatibility with requirements of the VCLT. Ultimately, the paper finds that recognizing the ICS as an amendment between some parties to the ICSID convention does not conflict with the VCLT.

Facilitating Access to Investor-State Dispute Settlement for Small and Medium-Sized Enterprises: Tracing the Path Forward

The costs of accessing investor-state dispute settlement (ISDS) are notoriously high. International investment treaties and investment dispute settlement in particular have been primarily designed with large investors in mind – those with the means to access an international tribunal –, while small and medium-sized enterprises (SMEs) and individual or vulnerable investors can face significant barriers to accessing ISDS. This article is the first in legal scholarship to identify and evaluate the diverse opportunities that exist for the establishment and operation of mechanisms allowing SMEs better and easier access to ISDS. Drawing on the wealth of comparative experience from the functioning of existing dispute settlement assistance mechanisms in international courts and tribunals, the article argues that legal assistance is a more efficient and cost-effective tool than financial assistance and presents concrete proposals for the funding and operation of such a mechanism for SMEs. Finally, the article examines the political cost involved in facilitating SMEs’ access to ISDS, in light of the fact that some states have been increasingly wary of ISDS, but it weighs this challengeagainst the imperative of ensuring effective access to justice. Small and medium-sized enterprises (SMEs), investor-state dispute settlement (ISDS), United Nations Commission on International Trade Law (UNCITRAL), access to justice, international investment agreements (IIAs), advisory centre on international investment law, procedural costs, legal assistance funds, expedited proceedings, UNCItRAL Working Group III

The possibility of creating an ICSID protocol for the establishment of a multilateral investment tribunal: A flexible or complex process.

The 2030 Agenda for Sustainable Development was introduced in 2015 with its 16th goal which has targeted enhancing the concepts of the rule of law and universal access to justice. This goal, along with the current trend of directing investment projects towards sustainable development, has brought the mechanisms for investor-state dispute settlement (ISDS) into the spotlight in the realm of global investment.Recently, based on a different vision that was supported, especially by the European Union, a new approach to ISDS emerged that is characterized by fundamental differences from the well-known approach represented in the ICSID system. Whereas providing facilities to settle and arbitrate the investment disputes between a state member and investors belonging to another state member over several decades by the ICSID system made it a key player in the administration of the ISDS system. The fundamental differences adopted by the new EU’s model represent a serious challenge to the ICSID system. Especially if this new system proves to be effective and widely used and inserted in future international investment agreements (IIAs), the ICSID will be required to make adjustments that are compatible with this new system.Due to the complexity of the process of amendment to the ICSID convention, as it requires unanimous consent by all member states, the present paper, by analysing some historical stations of the functional and administrative context of the ICSID, examines the flexibility of the ICSID convention to establish a protocol that includes the features of the new system without resorting to amending the convention. The paper concludes that the ICSID enjoys the flexibility necessary to establish this protocol. Finally, the paper presents the motives and benefits envisioned for the establishment of this protocol.

Dispelling Myths – The European Court of Human Rights as a Viable Alternative to Investor-State Dispute Settlement in the European Union (Winner of the Essay Competition 2023)

This contribution will focus on the question of whether the European Court of Human Rights (ECtHR, the Court) can serve as an alternative forum for investment treaty disputes arising under bilateral investment treaties concluded between two EU Member States (intra- EU bit s). Some authors have examined the question whether the European Convention on Human Rights (echr) can serve as an alternative to investor state dispute settlement (isds) in general. Their conclusion was that despite the similarities between the international investment arbitration system and the investment protection offered by the echr, the latter can merely complement the isds system but not replace it. However, following the annihilation of the intra- EU bit s regime, the landscape of isds in Europe has changed drastically. Consequently, the time is ripe to revisit the question. The paper posits that, contrary to common beliefs about the deficiencies of the proceedings before the Court, in recent years, due to certain developments in procedure and jurisprudence, the Court is now a viable alternative to isds.

When Haste Makes Waste: Fair And Equitable Treatment Violations In Canada’s Feed-In Tariff Program Implementation And Lessons For Vietnam

Abstract Efforts to promote renewable energy investment as a key strategy against environmental issues from fossil fuels have raised legal and financial challenges. Governments, adopting policies like feed-in tariffs (FiT), initially attracted foreign investment but later faced resource wastage issues. Canada’s experience with FiT programs has led to investor-State disputes, underscoring the risks of not meeting the Fair and Equitable Treatment (FET) standard under the North American Free Trade Agreement (NAFTA). This article aims to provide recommendations to mitigate the risks of government’s policies that may lead to substantial legal disputes and hinder sustainable energy development. It delves into analyzing FET standards from arbitral practices in enforcing FiT programs, drawing lessons from Canada’s experiences to offer implications for Vietnam.

Investor-State Dispute Settlement Mechanism in Vietnam’s New Generation Free Trade Agreements: Challenges and Recommendations

In the recent years, Vietnam's attraction to foreign investment capital has increased rapidly. As a result, the disputes in the field of foreign investment have emerged more frequently. The fact that a dispute occurs between the government of the host country and a foreign investors, regardless of its cause, will bring adverse consequences to both parties. Amicable settlement of such disputes is an important factor to improve the efficiency of foreign investment, maintaining the trust between the host country and foreign investors. Therefore, stipulating commitments on the dispute settlement mechanism for international investment in multilateral free trade agreements such as Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam - EU Investment Protection Agreement (EVIPA), and Regional Comprehensive Economic Partnership (RCEP) are indispensable. Therefore, in this context, the paper studies the investor-state dispute settlement (ISDS) mechanism in new-generation free trade agreements to which Vietnam is a member, namely EVIPA, CPTPP, RCEP; accordingly, the paper proposes some recommendations to Vietnam.

State of Necessity in Post Covid-19 Investor-State Arbitration: CMS and LG&E Revisited

Covid-19 has spread its wrath on every aspect of human affairs. Foreign investment is no exception to that. To combat the pandemic, different States have deployed various restrictive measures having a direct bearing on foreign investors. Such actions are likely to result in an influx of investor-State disputes. It can be reasonably assumed that the States will invoke the necessity plea, among other grounds, to negate their responsibilities in such situations. The cases of The CMS Gas Transmission Company v. The Argentine Republic (2005) and LG&E Energy Corporation v. The Argentine Republic (2006) previously sparked debate about the necessity defence’s applicability in investment arbitrations. This article examines the suitability of the defence in investor-State arbitrations in the post- Covid-19 era in light of the CMS and LG&E cases. After careful scrutinization, this article proposes that the unique nature of the crisis borne from the Covid-19 pandemic should be taken into consideration while applying the defence in any pandemic-induced arbitration. It concludes that unless the catalysts associated with the pandemic are taken into account while applying the defence, it will be invariably futile in investor-State arbitrations.
 Dhaka University Law Journal, Vol. 33(1), 2023 P.1-22

Fraud on the tribunal in investor–State arbitration

Abstract Fraud on investor–State arbitration tribunals is somewhat uncommon but hardly rare. This article summarises 17 publicly known investor–State arbitration awards addressing fraud on the tribunal, to contribute to this underdeveloped field of law. The article notes that investor–State tribunals have confronted this wrongdoing in various ways, ranging from avoiding findings of fraud to imposing arbitral sanctions. It notes, however, the apparent dearth of referral to criminal processes arising out of proven fraud. It concludes with a summary of the potential remedies available to the tribunal when confronted with fraud.

Assessment of Damages and Compensation in the Context of ISDS Reform Proposals

This article discusses the possible reforms in the assessment of damages and compensation in international investment arbitration. The article highlights the challenges of the valuation leading to the need for reforms, such as the inflation of awards issued in investment arbitration cases, the major gap between the damages claimed and damages awarded, and the difficulties posed by the large damages awards for the developing states. Other reasons for reforms include arbitral tribunals’ inconsistency in the valuation, the incorrectness of awards and potential conflicts of interests between arbitrators and damages experts. The author further discusses whether the issues of damages and compensation in investor- state disputes fall within the mandate of the UNCITRAL Working Group III, which is argued to be limited to solely procedural issues. The author concludes that the reforms could and should be developed by the Working Group III. The assessment of damages and compensation in investor-state disputes requires a comprehensive reform process based on procedural solutions as well as substantive suggestions, which the Working Group III can devise. Based on the law and economics theories, the author analyzes the appropriate approach of tackling the quantum issues, concluding that the reforms should be implemented through soft law instruments. The article dwells on viable procedural reforms on the quantification of damages and compensation in investment arbitration. The analysis focuses on the reforms prospecting to address the damages experts’ possible conflict of interest, the divergence in the parties’ experts damages amounts and the anchoring effect of the claimants’ requested amounts on arbitrators, as well as on the option of conducting early damages conferences, drawing on the insights from behavioral economics. Lastly, the article discusses substantive reforms options for the valuation that help promote the consistency and correctness of awards. The author considers the options of clarifying the use of the discounted cash flow method and setting standards that require damages to reflect a balance between the competing interests, providing guidance on the investor’s contributory fault, capping compensation to the actually invested amount and the assessment of contextual factors relevant for the calculation of damages.

Arbitration Involving Dual Nationals Under Investment Treaties: A New Area of Conflicting Rulings in International Law

Objective: The paramount purpose of the study is to put forth conflicting decisions in International Law while arbitrating dual nationals under investment treaties.
 
 Method: The majority of investment treaties are predicated on clauses that are somewhat wide and define qualified standards.
 
 Result: According to the findings of a number of studies, the increased participation of dual nationals in investments in host countries will likely result in future issues for international investment law (IIL), particularly the ISA system. Because of this, it is essential to conduct an in-depth investigation on the level of protection that dual nationals receive from investment deals, especially from Investor-State Dispute Settlement’s point of view.
 
 Conclusion: In investor-state arbitration (ISA) context, one's nationality is an extremely vital factor. Most investment treaties provide that in order to be eligible for the protections afforded by the treaty, an investor needs to hold citizenship in the home state. However, determining a person's nationality for the reason of an investment treaty can be an especially challenging endeavour, as it brings up a number of unanswered problems that are of significant relevance in practical terms.

Challenging Orthodoxy: State Immunity from Court Supervisory Jurisdiction in Investor-State Disputes?

This article considers the role of national courts in investment treaty arbitrations between an investor and a host-State. While the ICSID arbitration regime provides for an a-national approach, the choice of alternative arbitral institutions or rules in an investment treaty could bring into issue the role of the courts of the place of arbitration. It is suggested that the involvement of a sovereign State as a party to such arbitration proceedings raises issues of state immunity not encountered in international commercial arbitrations. While an agreement in an investment treaty to arbitrate an investor-state dispute confers jurisdiction on an arbitral tribunal to determine the dispute, there is presently no global consensus that such an agreement alone amounts to a waiver of immunity of the host-State from the jurisdiction of other national Courts. Absent such waiver of jurisdiction, the court of the place of arbitration would lack legitimacy to exercise any ‘supervisory’ jurisdiction over the host-State party to ensure compliance under its domestic legislation. The authors suggest that national legislatures should consider this when reviewing applicable domestic laws on international arbitration and state immunity. Treaty negotiators should be aware as well of such limitations. State immunity, waiver of immunity, investment arbitration agreement, investor-State dispute, international arbitration, immunity from jurisdiction, court of the seat, supervisory jurisdiction

Aktualisasi Mekanisme Investor State Dispute Settlement (ISDS) Dalam Sengketa Joint Venture Investor Asing Dengan Pemerintah Di Indonesia

Foreign investment and business cooperation through joint ventures have emerged as key drivers of Indonesia's economic growth. The increasing influx of foreign investment into Indonesia has, in turn, given rise to disputes between foreign investors and the Indonesian government. Consequently, Indonesia has sought to introduce legal instruments for the resolution of foreign investment disputes. Based on this premise, the author aims to delve deeper into the actualization of the Investor-State Dispute Settlement (ISDS) mechanism in disputes involving foreign investors and the Indonesian government within joint ventures. The examination of the role of the ISDS mechanism in this context is crucial to ensure the protection of investor rights and the provision of legal certainty. The research methodology employed is normative-juridical, utilizing literature review as an approach. The results of this study reveal that investment disputes persist between foreign investors and the Indonesian government due to diverging interests, violations of joint venture agreements, particularly changes in legislation that tend to restrict or disadvantage foreign investors. Consequently, foreign investors often find themselves adversely affected by government policies.

The Negotiation, Diffusion, and Legacy of NAFTA Chapter 11: An Empirical Eulogy

AbstractFollowing a three-year post-termination transition period to bring investor-state arbitration disputes, the investment protections afforded by Chapter 11 of the North American Free Trade Agreement (NAFTA) finally expired in June 2023. Chapter 11 was one of the most litigated, cited, commented, and copied investment treaties. An important, but largely ignored, part of its legacy is how the making of NAFTA Chapter 11 shaped its subsequent successful diffusion. Combining traditional legal assessment with computational text-as-data analysis, this article shows how the give and take during the negotiations generated buy-in on the part of Mexico and Canada and emulation by Latin American countries who helped to spread NAFTA Chapter 11 language globally. The link between the making and diffusion of NAFTA Chapter 11 highlights the power of negotiated compromise: sharing the pen with others may sometimes be the most effective way to write the rules that come to shape the world.

Investor state dispute settlement (ISDS) and the social licence to operate of international business: An analysis of controversial cases

This paper analyses how the challenging of regulation by multinational enterprises through the investor state dispute settlement (ISDS) process impacts the social licence to operate (SLO) of international business (IB). Drawing on the analyses of controversial ISDS cases, it makes four key contributions. First, it proposes a framework for better understanding SLO and presents strong evidence that the use of ISDS has undermined SLO, not only of the involved companies, but also of IB more widely. Second, it extends the literature on corporate political activity (CPA) by drawing attention to the importance of litigation strategies, largely ignored in prior research. Third, it contributes to the literature on the externalities of CPA by exploring how certain tactics can undermine public trust and SLO. Last, it expands our understanding of the ‘dark side’ of CPA beyond illegal activities and government capture, to ethically questionable strategies.

Problematika Investor State Dispute Settlement dalam Bilateral Investment Treaty Indonesia-Singapura 2018

The signing of the 2018 Indonesia-Singapore BIT is a new chapter for Indonesia in establishing international relations in the field of investment after in 2013 Indonesia stopped the 2005 Indonesia-Singapore BIT because it was more in favor of foreign investors. This alignment is contained in the Investor State Dispute Settlement (ISDS) mechanism where the dispute resolution mechanism is also regulated in the 2018 Indonesia-Singapore BIT even though it is known that the ISDS mechanism has many shortcomings and provides protection for foreign investors. Therefore, there is a need for a new alternative to perfect the ISDS mechanism. Normative juridical methods are used in this writing by qualitatively analyzing the data. The results of the study concluded that the ISDS mechanism in the Indonesia-Singapore BIT 2018 has not been able to protect Indonesia's interests in international investment cooperation and requires an Investment Court System (ICS) mechanism to perfect the ISDS mechanism.