Rethinking Investor-State Arbitration (Studies in European Economic Law and Regulation, 27)

✍ Scribed by Flavia Marisi

• Publisher: Springer
• Year: 2023
• Tongue: English
• Leaves: 413
• Category: Library

✦ Synopsis

A significant increase in investor-State arbitration cases has been observed since the 2000s. The trust placed by investors and States in this method of dispute resolution stems from several strengths. In addition to its neutrality, one of the primary reasons for its widespread use is its adaptability, enabling it to address specific challenges that have emerged in recent decades. The following elements highlight this adaptability: the arbitration procedure can be customised to meet the specific needs of the disputing parties and stakeholders involved. It effectively responds to evolving cultural norms and ethical considerations, such as diversity, gender representation, corporate social responsibility, environmental issues, and human rights. Moreover, it can adapt to global health crises by facilitating online hearings. Finally, during times of international armed conflict, economic exchanges, trade, investment, and investor-State dispute settlement foster economic integration and interdependence, contributing to maintaining commercial peace and supporting international peace and security.
However, investor-State arbitration has sparked vigorous debates, with many advocating for reform in three crucial aspects: transparency, legitimacy, and consistency. Multilateral negotiations are currently underway on various fronts, including the negotiation of more sustainable investment treaties, amendments to institutional arbitral rules, the design of a multilateral investment court, and the development of enhanced policy frameworks.
This book delves into the history of investor-State dispute resolution to provide readers with an understanding of how its main features have evolved over time. It examines the most intensely debated procedural issues, analyses their multifaceted characteristics, reviews the complex relationship between investor-State arbitration and the European Union, and explores potential options for addressing stakeholder concerns.

✦ Table of Contents

Foreword
Prelude
Preface
Acknowledgements
Contents
Abbreviations
Chapter 1: Charting the Route
1.1 Why: Research Background
1.2 Where to: Motivations and Research Objective
1.3 What: Relevance and Contribution to the Existing Literature
1.4 How: Structure
References
Chapter 2: History of Investor-State Dispute Settlement
2.1 Introduction
2.2 Definition of Investment
2.3 The Early Stages of International Investment Law
2.3.1 The Origins of International Investment Law
2.3.2 The Capitulation System
2.3.3 Treaties of Friendship, Commerce and Navigation
2.3.4 Ad hoc Commissions
2.3.5 Diplomatic Protection
2.3.6 The Hull Formula and the Calvo Doctrine
2.4 The Role of the IMF and the World Bank in Promoting Foreign Investment
2.5 Criticisms of International Investment Agreements
2.6 The Rise of Investor-State Arbitration
2.7 Analogies and Differences Between Investor-State Arbitration and Commercial Arbitration
2.8 Conclusions
References
Chapter 3: Adaptability of Investor-State Arbitration
3.1 Introduction
3.2 Adaptability to the Needs of the Disputing Parties
3.2.1 Parties’ Procedural Autonomy Under International Arbitration Conventions
3.2.2 Parties’ Procedural Autonomy Under National Arbitration Laws
3.2.3 Parties’ Procedural Autonomy to Choose the Arbitration Rules
3.2.4 Parties’ Procedural Autonomy Under Institutional Rules
3.2.5 The Arbitral Tribunal’s Discretion to Determine the Procedure
3.3 Adaptability to Technological Progress and the Covid-19 Global Crisis
3.3.1 Computer-Mediated Communication in Arbitration
3.3.2 Storage of Information Related to Arbitration
3.3.3 Security Precautions in Arbitration
3.3.4 The Covid-19 Global Crisis
3.3.5 Online Dispute Resolution
3.3.5.1 Regulatory Framework of Remote Hearings
3.3.5.2 When the Disputing Parties Do Not Agree on Remote Hearings
3.3.5.3 Seoul Protocol on Video Conference in International Arbitration
3.3.5.4 Electronic Signatures
3.3.5.5 Cyber Fraud
3.4 Adaptability to Meet Cultural and Social Change
3.4.1 Diversity and Gender Representation
3.4.1.1 Deconstructing the Diversity Palette
3.4.1.2 The Way Forward
3.4.2 Human Rights Concerns
3.4.2.1 Investment Rights and Human Rights
3.4.3 Investors’ Corporate Social Responsibility
3.5 Adaptability in Response to Geopolitical Challenges
3.5.1 The Contribution of Trade and Investment to the Maintenance of International Peace and Security
3.5.2 The Instrument of Denial of Benefits
3.6 Conclusions
References
Chapter 4: Criticisms of Investor-State Arbitration
4.1 Introduction
4.2 In Search of Balance
4.3 ISDS Statistics
4.4 The Clash with EU Law
4.5 Transparency, Legitimacy, Consistency
4.6 Turning Away from ISDS
4.7 The Need of a Reform of Investor-State Arbitration
4.8 Conclusions
References
Chapter 5: Transparency in Investor-State Arbitration
5.1 The Concept of Transparency
5.2 Transparency v Confidentiality
5.2.1 Advantages of Confidentiality
5.2.2 Advantages of Transparency
5.2.2.1 Essentials of Transparency
5.2.2.2 Harmonising Different Regulatory Systems
5.2.2.3 Contributing to the Evolution of the Case-Law
5.2.2.4 Promoting Precision in International Law
5.2.2.5 Creating Confidence in Investment Arbitration
5.2.2.6 Legitimising Investor-State Arbitration
5.2.2.7 Increasing the Predictability of Outcomes
5.2.2.8 Encouraging Public Participation
5.3 Transparency Provisions
5.3.1 Registration of the Initiation of the Arbitral Proceedings
5.3.1.1 NAFTA Rules Governing Registration of the Initiation of Arbitral Proceedings
5.3.1.2 The CETA Rules Governing Registration of the Initiation of Arbitral Proceedings
5.3.1.3 The TTIP Draft Rules Governing Registration of the Initiation of Arbitral Proceeding
5.3.1.4 The COMESA Common Investment Area Rules Governing Registration of the Initiation of Arbitral Proceedings
5.3.1.5 The ASEAN Comprehensive Investment Agreement Rules Governing Registration of the Initiation of Arbitral Proceedings
5.3.1.6 IIAs Rules Governing Registration of the Initiation of Arbitral Proceedings
5.3.1.7 ICSID Rules Governing Registration of Information Concerning the Initiation of Arbitral Proceedings
5.3.1.8 UNCITRAL Rules on Transparency Governing Registration of Information Concerning the Initiation of Arbitral Proceedings
5.3.1.9 The Mauritius Convention on Transparency
5.3.1.10 Other Arbitration Institutions Rules
5.3.2 Availability of Procedural Documents and Publication of the Award
5.3.2.1 Availability of Procedural Documents
5.3.2.1.1 Availability of Procedural Documents Established by Treaties
5.3.2.1.2 Availability of Procedural Documents Established by Arbitral Institutions’ Rules
5.3.2.1.3 Availability of Procedural Documents Established by Tribunals’ Decisions
5.3.2.2 Case-Law
5.3.2.3 Publication of the Award
5.3.2.3.1 Publication of the Award Pursuant to Treaties’ Provisions
5.3.2.3.2 Publication of the Award Pursuant to Arbitration Institutions’ Rules
5.3.2.3.3 Observations on the Availability of Awards
5.3.3 Non-disputing Parties’ Participation
5.3.3.1 Essentials on the Intervention of Non-disputing Parties
5.3.3.2 Examples of Provisions on Non-disputing Parties’ Intervention
5.3.3.3 Case Law on Non-disputing Parties’ Intervention
5.3.3.3.1 Glamis Gold v United States
5.3.3.3.2 Merrill & Ring Forestry v Canada
5.3.4 Amicus curiae Intervention
5.3.4.1 Definition
5.3.4.2 Amicus Curiae’s Features
5.3.4.3 Amicus Curiae’s Spectrum of Action
5.3.4.4 Benefits Deriving from Accepting Amicus Curiae Participation
5.3.4.4.1 Public Interest Protection
5.3.4.4.2 Improvement of the Quality of the Award
5.3.4.4.3 Provision of Expertise and Promotion of Accountability
5.3.4.5 Admissibility of Amicus Curiae Briefs
5.3.4.5.1 Disregard for the Consensual Nature of Arbitration and Risks for Confidentiality
5.3.4.5.2 Unilateral Positioning
5.3.4.5.3 Costs and Delays
5.3.4.5.4 Repoliticisation
5.3.4.5.5 Impact on the Parties’ Strategy
5.3.4.6 Provisions About Amicus Curiae Briefs in Investment Treaties
5.3.4.7 Analysis of Decisions Concerning Amicus Curiae
5.3.4.7.1 Aguas del Tunari v Bolivia
5.3.4.7.1.1 Overview on Aguas del Tunari v Bolivia
5.3.4.7.1.2 Requests of the Petitioners
5.3.4.7.1.3 The Tribunal’s Response
5.3.4.7.2 Biwater Gauff v Tanzania
5.3.4.7.2.1 Overview on Biwater Gauff v Tanzania
5.3.4.7.2.2 The Claimant’s Request for Confidentiality
5.3.4.7.2.3 The Petition for Amicus Curiae Status and the Subsequent Procedure
5.3.4.7.2.4 The Tribunal’s Procedural Orders
5.3.4.7.2.5 The Tribunal’s Substantive Decisions
5.3.4.7.3 Pacific Rim Cayman LLC v Republic of El Salvador
5.3.4.7.3.1 Overview
5.3.4.7.3.2 The Tribunal’s Order Concerning Amicus Curiae Submissions
5.3.4.8 Non-disputing Party Intervention, Amicus Curiae Submission, Diplomatic Protection: Analogies and Differences
5.3.5 Public Access to Hearings
5.3.5.1 Essentials of Public Access to Hearings
5.3.5.2 Public Access to Hearings in Multilateral Agreements
5.3.5.3 Public Access to Hearings in Bilateral Agreements
5.3.5.4 Public Access to Hearings Under Arbitration Rules
5.3.5.5 Case-Law
5.3.5.5.1 Methanex v United States
5.3.5.5.2 UPS v Canada
5.3.6 Conclusions
References
Chapter 6: Legitimacy in Investor-State Arbitration
6.1 Introduction
6.2 The Concept of Legitimacy
6.3 Public Interest
6.3.1 Overview
6.3.2 A Matter of Sovereignty
6.3.3 The Review of Legislative, Administrative, and Judicial Acts
6.3.4 Balancing Conflicting Rights of Investors and States
6.3.5 Case Law
6.3.5.1 Tecmed v Mexico
6.3.5.2 Marion Unglaube and Reinhard Unglaube v Republic of Costa Rica
6.3.5.3 Rusoro Mining v Venezuela
6.4 Due Process in International Arbitration
6.5 Arbitrators and Ethics
6.5.1 The Appointment of Arbitrators
6.5.2 Rules, Guidelines, and Codes of Conduct Governing the Ethics of Arbitrators
6.5.2.1 Code of Conduct of Adjudicators in International Investment Disputes
6.5.2.2 The IBA Guidelines on Conflicts of Interest in International Arbitration
6.5.2.3 The Burgh House Principles on the Independence of the International Judiciary
6.5.2.4 Institutional Arbitration Rules
6.5.3 Situations of Issue of Conflict
6.5.3.1 Multiple Hats
6.5.3.1.1 Prior Professional Experience
6.5.4 Challenging Arbitrators in Cases of Issue of Conflict
6.5.4.1 Scholarly Writing
6.5.4.2 Exposure to Similar Facts by Means of Earlier Awards
6.5.5 Modus operandi of Arbitrators
6.5.5.1 The Panel Composition and the Interpanel Dynamics
6.5.5.2 The Presiding Arbitrator
6.5.5.3 Consensus and Dissenting Opinions
6.5.6 Case Law
6.5.6.1 Azurix v Argentina
6.5.6.2 Perenco v Ecuador
6.5.6.2.1 The Challenge to Judge Brower
6.6 Counterclaims
6.6.1 Jurisdiction
6.6.1.1 Provisions in IIAs
6.6.1.2 Provisions in Arbitration Rules
6.6.1.3 Assessment by the Investment Tribunal and Parties’ Consent
6.6.2 Admissibility
6.6.3 Investor’s Obligations
6.6.4 Counterclaims Against Companies of the Same Group
6.6.5 Benefits of Counterclaims
6.6.6 Case Law
6.6.6.1 Burlington v Ecuador
6.6.6.2 Perenco v Ecuador
6.7 The Link Between Legitimacy and Consistency
6.8 Conclusions
References
Chapter 7: Consistency in Investor-State Arbitration
7.1 Introduction
7.2 A Fragmented System
7.3 Driving Towards Consistency
7.3.1 The Principle of Legal Certainty
7.3.2 Judicial Economy
7.3.3 Due Process and Procedural Fairness
7.4 Parallel Proceedings
7.5 Treaty Shopping
7.5.1 Essentials of Treaty Shopping
7.5.2 Implications of Treaty Shopping
7.6 Forum Shopping
7.7 Precedent
7.7.1 Introduction
7.7.2 Notion of Precedent
7.7.3 Value of Precedents
7.7.4 The Single Case and Its Wider Impact
7.7.5 Concluding Remarks
7.8 Review and Annulment
7.8.1 Annulment of an ICSID Award
7.8.2 Annulment of a Non-ICSID Award
7.8.2.1 Annulment of an ICSID Additional Facility Award
7.8.2.2 Annulment of an UNCITRAL Award
7.8.3 Challenges to Recognition and Enforcement Under the New York Convention
7.8.4 Challenges Before National Courts
7.8.5 Correction of Awards Under the ICC, LCIA, and SCC Rules
7.8.6 Concluding Remarks
7.9 Appellate Mechanism
7.9.1 Academic Opinions
7.9.1.1 The Importance of Consistency Vis-à-Vis Finality
7.9.1.2 Correction of Errors
7.9.1.3 Collateral Effects: Additional Delays, Costs, and Caseload
7.9.2 The Position of Institutions
7.9.2.1 The 2004 ICSID Appeals Proposal
7.9.2.2 The OECD Study on Improving ISDS
7.9.3 Provisions in IIAs
7.10 Permanent Bodies: Multilateral Investment Court and Investment Court System
7.11 Conclusions
References
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Untitled
Chapter 8: Investor-State Arbitration and European Union Law
8.1 Intra-EU Investor-State Arbitration
8.1.1 The European Commission as Amicus Curiae in Intra-EU Investor-State Arbitration
8.1.2 Slovak Republic v Achmea BV, Case C-284/16
8.1.3 The Member States’ Declarations of 15 and 16 January 2019
8.1.3.1 The 15 January 2019 Declaration by 22 Member States
8.1.3.2 The 16 January 2019 Declaration by Five Member States
8.1.3.3 The 16 January 2019 Declaration by Hungary
8.1.4 The Termination Agreement
8.1.5 République de Moldavie v Komstroy LLC, Case C-741/19
8.1.5.1 The Facts of the Case
8.1.5.2 The Procedure
8.1.5.3 The Judgment of the Court
8.1.6 Republic of Poland v PL Holdings S.à.r.l., Case C 109/20
8.1.6.1 The Facts of the Case
8.1.6.2 The Procedure
8.1.6.3 The Judgment of the Court
8.1.7 European Commission v European Food SA and Others, Case C-638/19 P
8.1.8 Impact on Investments
8.2 Landmark Opinions of the Court of Justice of the European Union on ISDS
8.2.1 Opinion 2/15
8.2.2 Opinion 1/17
8.3 The Multilateral Investment Court Project
8.3.1 The Contribution of the EU to the UNCITRAL Working Group III on ISDS Reform
8.3.1.1 The Features of the MIC Proposal
8.3.1.1.1 Transparency
8.3.1.1.2 Consistency and Correctness
8.3.1.1.3 Decision Makers
8.3.2 The Goals of the MIC Proposal
8.4 Conclusions
References
Chapter 9: Conclusions
9.1 Retracing the Research Path
9.2 History of ISDS
9.3 Adaptability
9.4 Criticisms
9.5 Transparency
9.6 Legitimacy
9.7 Consistency
9.8 Investor-State Arbitration and EU Law
9.9 Projects for ISDS Reform
9.9.1 Amending Arbitration Rules
9.9.2 Renegotiating Investment Treaties
9.9.3 Designing a Permanent Investment Court
9.10 Reflections on Selected Issues
9.11 Conclusive Remarks
References
Tables of Cases
ICSID
NAFTA
Permanent Court of Arbitration and Other Cases
Stockholm Chamber of Commerce
International Court of Justice
WTO
Court of Justice of the European Union
National Courts
Table of Treaties and Other Documents
Index