Treaty Claims Research Articles

Tension without tikanga: the damaging face of the treaty claims settlement system

In Aotearoa New Zealand, the arrival of imperial ideologies in the 19th century led to devastating land-loss and cultural marginalisation for Māori at the hands of settlers and successive governments. This article examines the damaging effects of a Crown-imposed treaty claims settlement system designed to address injustices inflicted on Māori. Interview data from a Taranaki-based (a West Coast region, central North Island of Aotearoa New Zealand) hapū (sub-tribe) that engaged with this system foreground the adversarial nature of this system and its continuation of trauma. We argue that, while the process provides voice to Māori, it does so within a paradigm that pits kin-groups against each other, unjustly limits redress and fails to resolve tension. A tikanga framing provides insights into how tensions are set up and ways tikanga (underlying values and principles that guide practice) can be used outside the redress system to seek healing and resolution.

Jurisdictional Conflicts between Investment Treaty and Commercial Arbitration—The Role of Lis Pendens

Abstract The domain of international investment law is evolving. Today, an increasing number of treaty claims filed against states are based on allegations of a breach of contract. Investment treaty tribunals also tend to affirm jurisdiction over such claims, routinely ignoring that the underlying contract may contain an arbitration agreement in favour of commercial arbitration. This tendency creates a potential jurisdictional conflict between a commercial and investment treaty arbitration proceeding; ripe for investors to exploit. In this context, this article explores the different ways in which investment treaty tribunals have created this jurisdictional conflict. On such basis, it assesses the ameliorative potential of the principle of lis pendens in international arbitration, and whether this potential can be realized in a timely manner.

‘The Making of an Investment’ in the Context of the Temporal Scope of Investment Treaty Protection. Does the Indian Metals & Ferro Alloys Ltd v. Republic of Indonesia Award of 29 March 2019 Constitute a Breakthrough?

This contribution deals with the question of the legal character of investment treaty claims, brought to international investment arbitration, when alleged breaches of investment treaty obligations towards an investor occurred after the entry into force of an investment treaty but before the making of an investment by an investor. The analysis of the existing legal framework allows for the conclusion that the said acts of a host state are generally excluded from the scope of investment treaty protection. An arbitral tribunal neither has jurisdiction over these acts nor is it allowed to apply substantive treaty provisions thereto. This conclusion stems from the principle of intertemporal law and numerous provisions of investment treaties constituting the implementation or modification of this principle. Nevertheless, an arbitral tribunal is not fully deprived of the possibility of considering the acts of a host state preceding the making of an investmentand undertaken before any activity of the future investor took place. It can consider them as evidence of the intent of a host state, acts creating legitimate expectations of an investor or acts constituting elements of what is termed a continuing act.

The Investment Treaty Implications of COVID-19 Responses by States

By analysing COVID-19 measures taken by States in eleven jurisdictions – whilst considering a range of international investment agreements (IIAs) including ‘old-school’ European BITs, North American style treaties, and Asian investment treaties – the authors examine to what extent COVID-19 measures could potentially result in investment treaty claims. This study presents these implications through a balanced overview of treaty-based grounds and justifications, which are built upon classical investment protections and fundamental doctrines. When State measures are examined in terms of aim, effect, duration, and scope, a typology emerges that not only classifies, but also reveals similar patterns crystallising across varied jurisdictions – despite a decentralised and disparate approach taken by States. The comparative analysis of generational differences between IIAs determines the probability of successfully invoking claims, whilst simultaneously assessing the risks for States seeking to rely upon treaty-based justifications. Thus, when read by States, this legal analysis amounts to a risk assessment, and when read by foreign investors, serves as a guide on recourse. The authors conclude that States should include ‘pandemic-proof’ provisions in prospective IIA negotiations, and thus, potentially ushering a dawn of new ‘pandemic-proof IIAs’.

Environmental Claims by States in Investment Treaty Arbitration

Recent years have witnessed a number of counterclaims by State parties in investment treaty arbitrations based on environmental concerns and the need to protect local resources and safeguard the associated human rights of local communities. This article charts the development of the case law in this context, starting with the Urbaser v. Argentina award of December 2016, before examining its impact on the cases that followed in its wake, notably including the respective 2017 and 2018 awards in Burlington v. Ecuador and Aven v. Costa Rica. It concludes by considering whether these recent cases mark the beginning of a new era of international law claims which finds a parallel in the broader paradigm shift in public discourse on the critical role of all stakeholders in the conservation of the environment, and which may one day result in investors facing standalone claims as the respondent in future investment treaty claims brought by States.

Dispute Resolution in the Energy Sector: Wither Thou Goest?

This article examines developments in international commercial arbitration and investment treaty arbitration relevant to the energy sector in Canada and the United States and discusses their advantages and disadvantages. Jurisdictions in Canada and the US have taken a wide variety of approaches to legislative schemes and their interpretation. This has created uncertainty respecting the involvement of the courts in cross-border disputes where the parties have agreed to an arbitration clause. Further, the Canada-United States-Mexico Agreement has eliminated investment treaty arbitration between Canada and the US which existed in the North American Free Trade Agreement, limiting the options of investors to pursue investment treaty claims. These developments may clarify how energy sector participants should strategically manage their contractual arrangements and arbitration clauses and approach disputes.

NCD Prevention and International Investment Law in Latin America: Chile’s Experience in Preventing Obesity and Unhealthy Diets

Abstract In 2016, Chile became the first country in Latin America to implement comprehensive regulations aimed at preventing obesity and diet-related non-communicable diseases. It introduced innovative measures including a mandatory front-of-pack nutrition labelling scheme for food products high in sodium, free sugars, fats, and calories, and strict advertising and marketing restrictions of unhealthy foods to children under 14 years of age. However, food-exporting countries have questioned the lawfulness of these measures in the context of the World Trade Organization’s Technical Barriers to Trade Committee, and multinational food companies have filed several complaints before Chilean courts challenging their implementation. This article provides an overview of specific legal issues discussed in domestic courts and examines Chile’s measures under the rules of international investment law. It assesses whether they would withstand a treaty claim based on indirect expropriation, breach of the national treatment standard, and breach of the fair and equitable treatment standard.

State Responsibility and Investment Protection in the Time of Pandemic

To contain the spread of the global pandemic and to prevent the overburdening of their health systems, States worldwide have taken a host of previously unimaginable measures. While these measures ostensibly serve to mitigate the effects of the global pandemic, they also have an immediate impact on the commercial interests not only of domestic actors but of foreign investors. Some of these investors may feel disproportionately, or too undifferentiatedly, impacted by these policies, and therefore be drawn to the possibility of claiming on the more than 3,000 bilateral investment treaties (BITs) and regional treaties in force around the world. Affected investors may argue, in this potential ‘new frontier’ of investment treaty claims, that there can be no reason in principle why they, through no fault of their own, should be required to bear the expense of such measures for the benefit of wider society. In answer to such claims, States may seek to rely on general doctrines of customary international law such as ‘police powers’ or ‘state of necessity’. However, a closer look at these doctrines might reveal that they are not entirely free from contradictions, and that the risk allocations on which they are premised may be in need of some refinement. While the police powers doctrine (also referred to as the ‘right to regulate’) empowers governments to implement measures for the protection of health, often in spite of the potential adverse consequences to certain parties, it is important to ask where the boundaries of the doctrine are to be set. Is the authorization that it offers unlimited? Or does it require—perhaps in order to more clearly differentiate (non-compensable) police powers from (compensable) indirect expropriation—a proportional relationship between the public purpose fostered by the measure and the interference with the investors’ property rights? How would this apply in a global health emergency? Regarding the customary international law defence of necessity, it is well known that its 'only way' condition is interpreted comparatively strictly as an ‘only one single means’ requirement. One might wonder whether, in view of contemporary necessity situations, this interpretation is still realistic, and whether a broader approach might not prove much more appropriate? For one thing is certain: the next great risk, such as a global pandemic of similar proportions, is already on the horizon.

Nature’s rights as Indigenous rights? Mis/recognition through personhood for Te Urewera

In Aotearoa New Zealand, person rights for nature have been added to the suite of resolution mechanisms for Treaty of Waitangi claims. New laws for two national parks personify landscapes and Maori relations with them to encourage greater appreciation and care, and similar arrangements will follow for other parks. However, it is uncertain whether recognizing Indigenous rights by tying them to the rights of nature will be enforceable and effective. In Te Urewera, Treaty claims emerged more from land loss than disrespect for biocultural values, but the granting of person rights was intended to avoid return of ancestral land to the local tribe, Ngai Tuhoe. Personhood will realize only some of Tuhoe’s interests because retention of preservationist conservation means that few will ever live or work on their homelands. Rather than resolving the false inclusion, repressive authenticity and delimited recognition observed in overseas processes for claims settlement, granting personhood to nature for the purported benefit of Maori is an act of mis/recognition. Disingenuously, it conflates Indigenous with environmental, development with preservation and human with natural values.

Banking on courts: financialization and the rise of third-party funding in investment arbitration

In this paper, we explore the drivers of the rise of third-party funding (TPF) in investor-state arbitration. TPF involves financiers shouldering the legal fees of an investment treaty claim against a sovereign state in exchange for a share of any eventual award. Existing research has highlighted how TPF may exacerbate the inequities inherent to a legal regime that is already weighted in favor of private interests by increasing investors’ access to funding of their legal claims, but the factors which gave rise to TPF are little understood. We argue that financialization helps to explain both the spread and the characteristics of TPF. In particular, the evidence presented in this paper suggests that the large supply of investable capital that is searching for profitable investment opportunities helps to account for the rise of TPF. The analysis provides the basis for broader propositions and a research agenda about the ways in which financialization alters the logics of an international legal regime and aligns the interests of different private agents, both of which may change the public-private balance in investor-state arbitration and affect its legitimacy.

RECALIBRATING THE INTERNATIONAL INVESTMENT REGIME THROUGH NARROWED JURISDICTION

AbstractThe legitimacy crisis confronting the international investment regime has called for reforms to eliminate the asymmetric and troubled nature of investment treaties. These instruments grant extensive investor protections without offering reciprocal safeguards for host States wishing to preserve regulatory space. This article argues that any reform designed to redress imbalances in the existing regime should first aim at narrowing the personal jurisdiction of investment tribunals. Problematically, access to most investment treaties depends on broad nationality requirements, which have enabled investors to use corporations or passports of convenience to obtain treaty protection. This practice exacerbates the unbalanced relationship between host States and investors. It increases host States’ exposure to investment treaty claims and allows investors to circumvent newer, more State-oriented investment treaties. Using as an example the novel anti-nationality planning approach embraced in the 2019 Dutch Model BIT, this article suggests effective treaty mechanisms that States can adopt to restrict the range of investors that are entitled to claim.

Environmental Claims by States in Investment Treaty Arbitration

Recent years have witnessed a number of counterclaims by State parties in investment treaty arbitrations based on environmental concerns and the need to protect local resources and safeguard the associated human rights of local communities. This article charts the development of the case law in this context, starting with the Urbaser v. Argentina award of December 2016, before examining its impact on the cases that followed in its wake, notably including the respective 2017 and 2018 awards in Burlington v. Ecuador and Aven v. Costa Rica. It concludes by considering whether these recent cases mark the beginning of a new era of international law claims which finds a parallel in the broader paradigm shift in public discourse on the critical role of all stakeholders in the conservation of the environment, and which may one day result in investors facing standalone claims as the respondent in future investment treaty claims brought by States.

State liability for ‘politically’ motivated conduct in the investment treaty regime

AbstractIn framing investment treaty claims against host states, foreign investors routinely assert that the state’s conduct was ‘politically’ motivated. Arbitral tribunals must then grapple with these allegations. Yet, tribunals lack both a coherent conception of what constitutes politically motivated conduct and a consistent understanding of the relevance, if any, of such motivations for the disposition of an investor’s legal claims. This uncertainty points to an underlying tension within the investment treaty regime between the protection of investors’ interests on the one hand, and the legitimate scope for democratic decision-making and responsive politics on the other.Using concepts drawn from political science, we develop a new framework to map the variety of conduct that tribunals characterize as ‘political’. Our framework draws attention to different types of influence over government decision-making, as well as differences between government actors responsible for the conduct. We use this framework to show that tribunals have adopted different conceptions of what constitutes illegitimate political influence over government decision-making in factually similar cases. We then evaluate tribunals’ competing approaches in light of normative theories spanning both public law and private law. Engaging with multiple normative theories allows us to examine whether tribunals’ different approaches to politically motivated conduct might reflect diverse underlying normative commitments. We argue, however, that many arbitral tribunals demonstrate a reflexive distrust of domestic political contestation that is difficult to justify within any of the theories that we consider.

Finland Introduces Changes to the Withholding Tax Treaty Claim Process for Non-Resident Portfolio Investors by Adopting the OECD’s Treaty Relief and Compliance Enhancement Package

This article discusses the forthcoming changes to the Finnish withholding tax treaty claim process for non-resident portfolio investors through the adoption of the OECD’s Treaty Relief and Compliance Enhancement (TRACE) Implementation Package. It is hoped that successful implementation of the TRACE Implementation Package in Finland will encourage other countries to adopt it as well.

The Treaty Claims Settlement Process in New Zealand and Its Impact on Māori

This article considers research conducted on the impact of the Crown’s treaty claims settlement policy on Māori in New Zealand. It provides a brief background to the Treaty of Waitangi and the subsequent British colonisation process that relied on the Doctrine of Discovery in breach of the treaty. It outlines how colonisation dispossessed Māori of 95 percent of their lands and resources, usurped Māori power and authority and left them in a state of poverty, deprivation and marginalisation while procuring considerable wealth, prosperity and privilege for British settlers. The work of the Waitangi Tribunal, the commission of inquiry set up to investigate those breaches, is considered, as is the Crown’s reaction to the 1987 Lands case in developing its treaty claims settlement policy. The Crown unilaterally imposed the policy despite vehement opposition from Māori. Since 1992, it has legislated more than seventy ‘settlements’. The research shows that overall, the process has traumatised claimants, divided their communities, and returned on average less than one percent of their stolen lands. Proposals for constitutional transformation have drawn widespread support from Māori as a solution to British colonisation. United Nations treaty-monitoring bodies have recommended that the government discuss this with Māori.

‘To honour the treaty, we must first settle colonisation’ (Moana Jackson 2015): the long road from colonial devastation to balance, peace and harmony

ABSTRACTMāori leaders in New Zealand continue the battle to end British colonisation. The aim is to restore the balance between Māori and the Crown guaranteed in the treaty that Māori and the British Crown agreed to in 1840 so that we can live in peace and harmony. Early European visitors subjected our ancestors to numerous atrocities. Relying on the Doctrine of Discovery, they illegitimately usurped our power and dispossessed us, leaving us in a state of poverty, deprivation and marginalisation. They fabricated myths to justify their criminal activities, set up an illegitimate parliament with unfettered powers, passed laws legalising their crimes and then covered it up with amnesia. They established the Waitangi Tribunal in 1975 to inquire into breaches of the treaty, not realising that it would dismantle the myths and look beneath the amnesia. Governments then instigated the ‘treaty claims settlement’ process to extinguish all Māori claims, remove Māori rights and entrench colonisation. Research undertaken has shown that Māori loathe this process and do not accept that settlements are full and final. Research on constitutional transformation has identified a possible solution. The first step towards that goal involves implementing the United Nations Declaration on the Rights of Indigenous Peoples.

Legal Regime on Stabilization Clauses in The Extractive Sector in Tanzania

This article analyses stabilization regime in the extractives sector in Tanzania from the perspective of the State’s sovereign legislative and regulatory rights. Inherently, stabilization clauses are mitigation tools that seek to limit host States’ legislative and administrative actions to the respective agreements in enhancing investors’ legitimate expectations and protections. This paper advances the argument that a government of a sovereign State cannot, as a matter of principle, fetter its duty to act for the public good and interest by binding itself through stabilization clauses. However, the government must do so while also honouring its international contractual commitments. It must therefore act fairly, reasonably and equitably under the power of eminent domain and public powers against the illgotten unbalanced terms including investment agreements. This article also discusses the concept of unconscionability including the practical limitations for the States to use it as a defense, especially, in investment treaty claims. The principle of pacta sunt servanda as it relates to the stabilization clauses in the extractive sectors arrangements is also discussed. In this context, this paper argues that stabilization clauses cannot blindly be enforced against a State under the auspices of the pacta sunt servanda principle. Key words: stabilization clauses, legitimate expectations, unconscionable terms, regulatory autonomy, pacta sunt servanda.

Judicial Conduct and Investment Treaty Claims: Lessons from the Israeli Gas Cases and the Eli Lilly Award

As the debate on the future of ISDS is ongoing and given the rise in investment treaty claims based on domestic judicial measures, this article focuses on the relationship between domestic judicial measures, arbitral tribunals and potential state liability in investment arbitration. This article examines the circumstances under which domestic judicial measures might amount to a violation of a state’s international obligations towards a foreign investor. Specifically, the article discusses the controversial and increasingly poignant question of whether a state’s liability for its courts’ measures should be restricted to the Denial of Justice (DoJ) concept. The fact that the Eli Lilly tribunal recently recognized that in certain circumstances judicial conduct, characterized other than as a DoJ, may engage a state’s liability, can suggest a new path for investors’ claims, even more so in non-NAFTA cases. This new legal path may be useful in light of the growing judicial involvement in balancing investor-state rights, and in particular in legal systems where traditional DoJ claims may be less relevant. To illustrate, this article explores in depth recent judgements by Israeli courts on the regulation of the newly discovered gas market, which set an example of domestic courts determining the balance between the protection of a foreign investor’s rights and a state’s freedom to regulate its natural resources. Following these cases, foreign investors may need to cope with new substantial risks because it is not evident whether investment agreements, in their current form, can protect investments against the growing involvement of domestic courts. This article provides an overview of the relationship between foreign investors and states under public international law and international investment law followed by a review of the complex relationship between investment tribunals and the state's legal order, in particular its courts. The article then analyzes the proper legal meaning of the term Fair and Equitable Treatment, with particular attention to its relationship with the DoJ concept, because broadening the spectrum for arbitral tribunals’ review of domestic courts’ decisions, representing an important dimension of a state’s sovereignty, raises delicate issues. The article concludes with observations on how these issues may come into play in future investment treaty claims arising from judicial measures.

Unfolding tensions within post-settlement governance and tribal economies in Aotearoa New Zealand

PurposeThis paper aims to examine indigenous governance and economies of iwi Maori (Maori tribes) in Aotearoa New Zealand. Research into persisting inequities amongst iwi that have settled treaty claims and the potential for intervention through new governance models and indigenous entrepreneurship contextualise the paper.Design/methodology/approachKaupapa Maori (Maori philosophy) is used as an indigenous methodology to facilitate and empower transformative change, underpinned by Maori knowledge, language and culture. A multi-level approach is used to collect data from international, national and local tribal organisations. Validity is established through stakeholder engagement.FindingsA central challenge in the post-treaty settlement context is exponentialising tribal capabilities because of the multiple purposes ascribed to post-settled iwi. Four themes, characterised as “unfolding tensions”, offer a critique and basis for solving tribal development challenges: how do tribes create culturally grounded global citizens; how do tribes rebalance wealth creation and wealth distribution; how do tribes recalibrate tribal institutions; and how do tribes embed entrepreneurship and innovation within their economies?Research limitations/implicationsAs data collection is still underway, the paper is conceptual.Practical implicationsFive strategies to address unfolding tensions are identified for tribes to consider.Social implicationsTribal governors and tribal members are implicated in the analysis, as well as the architects of post-treaty settlement governance models.Originality/valueThe paper contributes to theorising about tribal governance, economies and entrepreneurship.

Māori Issues

Māori Issues Margaret Mutu The 2017 general election delivered twenty-nine members of Parliament of Māori descent, twenty of whom are in government, with eight of those becoming ministers. Māori also featured in sporting successes, especially women's rugby and men's softball. At the same time, racism against Māori became more blatant as decisions to allow Māori to have their own representation in local government were all successfully overturned. Māori continue to be disproportionately impacted by the effects of poverty in stark contrast to the Pākehā (European) population, which enjoys relative affluence. That drew criticism [End Page 202] yet again from two United Nations treaty bodies as Māori continue to be denied our rights under both Te Tiriti o Waitangi and the United Nations Declaration on the Rights of Indigenous Peoples. Since coming to power in late 2017, the new government has appeared to be more caring than the last, but little has changed for the large number of Māori struggling to survive in increasingly harsh socioeconomic conditions while still trying to protect our natural resources from overexploitation. Before reviewing these issues, we will pause to remember a number of leaders we lost during this period, all of whom spent their lives fighting to achieve justice for Māori. Ngāi Tahu of Te Waipounamu (the South Island) lost some well-loved and widely respected elders and leaders. Trevor Howse passed away in May 2017. He helped organize and drive Ngāi Tahu's treaty claim behind the scenes, collating a vast amount of the information that was presented to the Waitangi Tribunal. He was also part of the Ngāi Tahu team that spearheaded the negotiation process and resulted in one of the biggest treaty claims settlements to date (Te Rūnanga o Ngāi Tahu 2014). So too was Kuao Langsbury, who passed away in October. He first took a leadership role in Ngāi Tahu in 1961 when he was elected the chair of Ōtākou Rūnanga at the age of twenty-five (Waatea News 2017a). Then in January 2018 it was the gentle elder, leader, and Māori language, culture, and history teacher Kukupa Tirikātene. He provided advice and support for Ngāi Tahu's leadership and contributed to the recovery of their dialect of the Māori language. Tirikātene came from a family of long-serving members of Parliament. His father, Sir Eruera, his sister, Whetū (Tirikātene-Sullivan), and his nephew, Te Rino, have all served as members of Parliament for the Southern Māori or Te Tai Tonga electorate (Waatea News 2018b). Artist, teacher, master carver, and heritage advocate Dr Cliff Whiting of Te Whānau a Apanui passed away in July 2017. He worked on a number of modern-day meetinghouses including the spectacular Te Hono ki Hawaiki on Rongomaraeroa Marae at the Museum of New Zealand Te Papa Tongarewa, Te Kupenga o Te Mātauranga at Palmerston North Teachers' College, Maru Kaitatea on Takahanga Marae in Kaikoura, and Tahu Pōtiki on Te Rau Aroha Marae in Bluff. He also undertook large-scale murals for a number of government buildings including the New Zealand MetService, the National Library of New Zealand, and the Christchurch High Court (Hunt 2017). Strong, outspoken, yet gentle Māori rights advocate Nuki Aldridge of Ngāpuhi passed away in November 2017. His expertise and knowledge of northern history was legend, particularly that relating to the formation of the collective of leaders, Te Whakaminenga o Ngā Hapū o Nu Tireni, who were responsible for the country's first constitutional document, the 1835 He Whakaputanga o te Rangatiratanga o Nu Tireni, or the declaration of hapū (grouping of extended families) sovereignty often referred to in English as the Declaration of Independence. Nuki was a key witness in the hearings of the Waitangi Tribunal on the mid-northern claims. The tribunal went on to issue in 2014 its [End Page 203] groundbreaking findings that Ngāpuhi did not cede sovereignty to the British when they signed Te Tiriti o Waitangi in 1840. New Zealand's constitutional arrangements and parliamentary institutions have all been built on the...