Private Actors in International Investment Law
- 2021
- Book
- Editor
- Katia Fach Gómez
- Book Series
- European Yearbook of International Economic Law
- Publisher
- Springer International Publishing
About this book
This book presents the first critical review of the less frequently addressed stakeholders in international investment law. Focusing on private actors, including but not limited to lawyers, experts, funders, civil society, the media and scholars, the book highlights the variety of actors that help shape international investment law and demonstrates how best to manage their interactions in order to achieve synergies and enhance the legitimacy of this pluralistic field.
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Table of Contents
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Frontmatter
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Introduction
Katia Fach GómezThis chapter delves into the often overlooked roles of private actors in international investment law, such as lawyers, experts, funders, and NGOs. It argues that these actors significantly shape the development and practice of the field, going beyond the traditional focus on arbitrators, claimants, and respondents. The authors explore recent arbitral practices and scholarly contributions, emphasizing the increasing level of interaction between private and public law. They also highlight the potential for international investment law to serve as a testing ground for understanding these interactions. Additionally, the chapter discusses the impact of third-party funding and the role of the media in investment arbitration, providing a nuanced analysis of the complex dynamics at play in this highly specialized area of law.AI Generated
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AbstractThis edited volume published by Springer brings together a selection of peer-reviewed chapters that were presented and discussed at the International Colloquium on “Actors in International Investment Law: Beyond Claimants, Respondents and Arbitrators”. The Colloquium took place at the University Paris II Panthéon-Assas on the 26th and 27th of September 2019 and was hosted by Catharine Titi. The call for papers of this colloquium noted the fact that traditional studies of actors in international investment law have tended to focus principally on arbitrators, claimant investors and respondent states, leaving a number of other seminal actors outside the main scope of this field of law, a view that was duly reaffirmed as the event unfolded. -
Stakeholders of Investment Arbitration: Establishing a Dialogue Among Arbitrators, States, Investors, Academics and Other Actors in International Investment Law
Paolo VargiuThe chapter delves into the multifaceted role of investment arbitrators, arguing that their duties extend beyond the parties to a dispute to encompass a broader community of stakeholders. It challenges conventional views by suggesting that arbitrators act as leaders and guides within the investment arbitral regime, similar to teachers in a classroom. The author draws parallels between Barthes’ theory of teacher-student relationships and the dynamic between arbitrators and stakeholders, highlighting the social and legal connections that bind them. This analysis provides a fresh perspective on the development and interpretation of international investment law, emphasizing the need for arbitrators to consider the broader implications of their decisions. The chapter also discusses the significance of arbitral precedent and the de facto multilateral system that has emerged in investment law, underscoring the influential role of arbitrators in shaping the field. By framing arbitrators as leaders within a community, the chapter offers a compelling argument for the need to recognize and fulfill their broader responsibilities, even in the absence of explicit legal provisions.AI Generated
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AbstractIt is generally accepted that any arbitral award extends its effects solely on the parties to the dispute in which is rendered. In light of this, and the lack of either a system of precedent or a jurisprudence constante, investment arbitral awards should be considered as operating in a vacuum, outside of which the award and its substantive content are non-existent. However, the investment arbitral regime has over the years developed a de facto precedent system; moreover, the scholarship on investment arbitration addresses virtually all questions of investment law considering how such questions have been answered to by arbitral tribunals. Therefore, it is arguable that the duties of investment arbitral tribunals are not limited to merely addressing the questions posed to them by the parties, as they address matters for a much broader audience than the parties—an audience that includes other states, current and prospective investors, academics, NGOs and associations, and the taxpayers of each state acting as respondent before an arbitral tribunal. All these subjects are stakeholders of investment arbitration, as they all have a tangible interest in how investment treaties are interpreted and applied, and how international investment law is developed. There is, however, no international law instrument vesting investment tribunals with the responsibility to take all these concerns into account when deciding on a claim brought by an investor. This chapter is therefore aimed at framing the role and functions of investment arbitrators with regard to stakeholders beyond claimants and respondent. The analysis addresses how such roles and functions can be theorised in isolation from formalistic approaches to investment arbitration that would call for positive actions, and in light of existing multilateral approaches that have contributed to the development of the field of international investment law. -
Investment Arbitration Counsel’s Role in the Progressive Development of International Law
Elie Kleiman, Charles T. Kotuby Jr., Iris SauvagnacThe chapter 'Investment Arbitration Counsel’s Role in the Progressive Development of International Law' examines how legal counsel representing private investors in investment arbitration significantly influence the evolution of international law. It discusses how counsel’s interpretations and submissions on points of law shape the jurisprudence and, consequently, the broader legal framework. The text highlights the crucial role of counsel in interpreting investment treaties, identifying customary international law, and establishing general principles of law. Through detailed case studies, it illustrates how effective counsel can enhance the legitimacy and reliability of international jurisprudence. The chapter underscores the importance of counsel’s work in ensuring a well-reasoned and well-researched decision-making process by arbitral tribunals, thereby contributing to the progressive development of international law.AI Generated
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AbstractStarting from the observation that international law remains largely perceived today as a state-centric product, this chapter argues that private actors and their respective counsel have a sizeable effect on the progressive development of international law. International jurisprudence—which is itself a subsidiary source of international law—is contingent on how counsel assist tribunals in reaching well-researched and well-reasoned decisions, which eventually contribute to the development of a more reliable jurisprudence constante. In the realm of investment treaty arbitration, counsel have a role to play in assisting tribunals when it comes to treaty interpretation or the identification of rules of customary international law and general principles of law. Counsel might do so in a variety of ways, including by providing arbitral tribunals with relevant evidence to interpret the specific meaning behind a treaty provision, scrutinizing relevant state practice to identify a rule of customary international law, or conducting the necessary comparative work of divining the existence of a general principle of law in a variety of legal traditions. This chapter reviews some investment treaty cases where counsel have distinguished themselves in this regard. -
Some Thoughts on the Independence of Party-Appointed Expert in International Arbitration
Sébastien ManciauxThe chapter delves into the role of experts in international arbitration, focusing on the evolving debate over the independence of party-appointed experts. It examines the provisions on expert status in key legal instruments, such as the ICSID Convention and UNCITRAL Arbitration Rules, and compares these with the more recent IBA Rules and proposed amendments to the ICSID Arbitration Rules. The text also explores the practical implications of requiring experts to be independent, drawing on case studies and scholarly insights. It argues for a nuanced understanding of expert independence, suggesting that the current push for greater transparency may not always align with the practical realities of arbitration.AI Generated
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AbstractParticipation of experts in both commercial arbitration proceedings and investment arbitration proceedings is a well-known phenomenon for decades. A trend asking for parties-appointed experts to be independent is under development since the end of the twentieth century. The aim of this chapter is, at first, to make the point on this issue by analysing some of the most important current rules dedicated to international arbitration. The observation to be made is that the evolution described is not that developed so far in international arbitration. In a second time the need and relevance of this new requirement are addressed. It appears then that the meaning of this demand is far from being clear and its usefulness far from being obvious. -
The Nationality of Natural and Juridical Persons in International Investment Law
Carlo de StefanoThe chapter delves into the intricate role of the home state in investor-state dispute settlement, focusing on the definition of 'national' in international investment agreements. It explores the nationality of natural persons, emphasizing the importance of the 'genuine connection' principle established by the ICJ in Nottebohm. For juridical persons, the chapter discusses the criteria of incorporation, real seat, and control, and critically examines the phenomenon of treaty shopping. It also highlights the divergent practices of arbitral tribunals in interpreting nationality requirements and the need for clearer treaty provisions to prevent abuses. The chapter concludes by emphasizing the importance of maintaining the legitimacy and predictability of international investment arbitration.AI Generated
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AbstractThis chapter addresses the role of the home state of the investor as negotiator and drafter of its international investment agreements (IIAs) with regard to the definition of “national”. Such a treaty definition comprises natural and juridical persons and is determinative of the jurisdiction ratione personae of international investment tribunals. As to individuals, the principle of effectiveness in single nationality determinations is critically investigated, whereas in dual nationality cases tribunals have usually applied the customary principle of dominant and effective nationality. However, Article 25(2)(a) of the International Centre for the Settlement of Investment Disputes (ICSID) Convention, which categorically prohibits claims by dual nationals of both the home and the host state, represents a relevant exception to the general rule under customary international law. As to corporations, the vast majority of international investment agreements (IIAs) adopts the incorporation test as sufficient and exclusive criteria for the definition of nationality. When confronted with such treaty provisions, arbitral tribunals have traditionally interpreted and applied them without requiring any thresholds of substantive bond between putatively covered investors and their alleged home state. Therefore, this chapter focuses on questionable phenomena of treaty shopping, including by shell companies and round tripping, which have been tolerated by arbitrators and nonetheless accepted in the legal scholarship. Finally, the author provides various types of treaty provisions that may be stipulated by states when negotiating or renegotiating their IIAs with a view to appropriately accommodate the policy concerns that are raised in this chapter. -
Risk Assessment and Third-Party Funding in Investment Arbitration
María Beatriz BurghettoThis chapter delves into the intricacies of third-party funding (TPF) in investment arbitration, offering insights into the typical process of obtaining funding, the risks involved, and the perspectives of both lawyers and funders. It highlights the importance of understanding the funder's viewpoint to enhance the chances of successful financing and effective case management. The chapter also discusses the increasing use of TPF in investment arbitration and the specific risks associated with such cases, providing a comprehensive overview that stands out for its practical approach and detailed analysis.AI Generated
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AbstractThird-party funding is a risky investment and, therefore, third-party funders strive to be very careful and thorough when assessing the risks of each claim that needs funding and the impact those risks may have on the cost, duration and quantum of the claim. In this chapter, we explore the main case-related and context-related risks that may be present in investment arbitration, which has certain specificities. We look at this from the practitioner’s standpoint, with the view to making practitioners aware of third-party funders’ motivation and priorities. This may be useful to counsel when they present their clients’ application for funding to third-party funders and also, generally, to gain a better understanding of third-party funders’ stance, so that they are better equipped to interact with them and represent their clients’ interest. -
Third-Party Funding and Access to Justice in Investment Arbitration: Security for Costs as a Provisional Measure or a Standalone Procedural Category in the Newest Developments in International Investment Law
José Ángel Rueda-GarcíaThe chapter delves into the impact of third-party funding (TPF) on investment arbitration, particularly its effect on requests for security for costs. It examines how TPF contributes to access to justice and the equality of parties, highlighting the evolving approaches by institutions such as the Institute of International Law (IIL), the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), and the International Centre for Settlement of Investment Disputes (ICSID). The analysis includes the shift from treating security for costs as a provisional measure to a standalone procedural category, emphasizing the need for arbitral tribunals to balance the interests of both parties while ensuring access to justice.AI Generated
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AbstractThird-party funding (TPF) may be regarded as a tool to allow the parties in an investment dispute to exercise their fundamental right to access to justice by having access to investment arbitration. This proposition should be taken into consideration by arbitral tribunals when dealing with requests for posting security for costs in investment arbitration and the request comes from the fact that a party is relying on TPF. Security for costs has been treated traditionally as one of the many types of provisional measures that an arbitral tribunal can grant. However, a new trend has emerged to treat security for costs as a standalone figure, independent from the procedural category of provisional measures. Special attention is paid to the newest approach by the Institute of International Law (IIL) as well as to those of the two leading administrative centres of investment arbitration proceedings: the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) and the Working Paper #3 of the International Centre for Settlement of Investment Disputes (ICSID) for the amendment of its Arbitration Rules. -
A Quantum Expert’s Perspective on Third-Party Funding
Richard E. WalckThe chapter delves into the contentious debate over third-party funding (TPF) in international dispute settlement (ISDS), highlighting arguments from both supporters and opponents. Supporters contend that TPF enhances access to justice, particularly for under-resourced claimants, while opponents argue it primarily benefits well-resourced claimants and can exacerbate power imbalances. The author, a quantum expert, offers practical insights into structuring TPF arrangements to mitigate conflicts of interest and align the interests of claimants, funders, and counsel. The chapter also addresses the challenges of assessing potential recovery and the impact of TPF on costs and settlement outcomes, providing a nuanced perspective on the practical implications of TPF in ISDS.AI Generated
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AbstractThird-party funding (TPF) has expanded significantly in recent years, and in the process, it has generated considerable controversy, particularly as it has been used in the context of investor-state dispute settlement (ISDS). This chapter briefly outlines the policy debate. Those who support the use of TPF generally frame that debate as one of access to justice. Under this view, TPF enables claimants who have good claims, but little money, to finance the cost of bringing that claim to an arbitral venue. Detractors argue that TPF shifts the historic focus of the case from the client’s interest to the funder’s interest, making return on investment the key metric for bringing such claims. The ICCA—Queen Mary Task Force on Third-Party Funding has begun the process of identifying and assessing these competing interests, and it has suggested a number of best practices based on its work. Undoubtedly, the ground rules for TPF will be subject to change as the market gains more experience with it. In the meantime, this chapter offers some pragmatic suggestions that may be helpful to parties in implementing TPF in the resolution of disputes. -
Gatekeeping, Lawmaking, and Rulemaking: Lessons from Third-Party Funding in Investment Arbitration
Ina C. Popova, Katherine R. SeifertThe chapter examines the complex interplay of third-party funding (TPF) in investment arbitration, focusing on its gatekeeping, lawmaking, and rulemaking functions. It delves into the theoretical and practical aspects of TPF, highlighting how funders can filter out frivolous claims and promote meritorious ones. The chapter also explores how TPF has influenced the development of novel legal issues, such as security for costs and transparency, and how arbitral institutions and states have responded with regulatory frameworks. The empirical analysis of 20 concluded TPF cases reveals that funded claims are at least as successful as other investment arbitration cases, challenging the perception that TPF facilitates meritless claims. The chapter concludes by emphasizing the international arbitration community's growing acceptance of TPF, with a focus on maintaining fairness, efficiency, and transparency.AI Generated
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AbstractThe increased involvement of third-party funders in international investment arbitration has prompted academics and practitioners to consider how these actors fit within the traditional framework of investment disputes. While some argue that the availability of third-party funding will result in an increased number of frivolous claims, others view alternative forms of financing as a mechanism to facilitate access to justice. In practice, third-party funders appear to play a gatekeeping role for meritorious claims and a modest empirical analysis tends to support this conclusion. Tribunals have served a quasi-lawmaking function by addressing the existence of third-party funders in investment arbitration proceedings, resulting in guidance on the issues of security for costs, costs awards, and disclosure obligations. Instead of prohibiting the practice outright, arbitral institutions have demonstrated a tendency to integrate third-party funding into the regulation of investor-state disputes. These trends reveal an inclination among the international arbitration community to embrace, rather than prohibit, the involvement of third-party funders in investor-state proceedings. -
Towards a Republicanisation of International Investment Law?: Conceptualising the Legitimatory Value of Public Participation in the Negotiation and Enforcement of International Investment Agreements
Karsten Nowrot, Emily SipiorskiThis chapter delves into the historical exclusion of public participation in international investment law and the recent shifts towards greater inclusion. It discusses practical examples of public participation in treaty-making and enforcement, highlighting the growing importance of transparency and the need for a balanced approach between investor interests and public policy. The author argues that these developments indicate a republicanisation of international investment law, emphasising the common good and the need for robust public participation. The chapter concludes by presenting thoughts on the usefulness of a broader republicanisation of international investment law, suggesting that this conceptual shift could guide future developments in this area of international economic law.AI Generated
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AbstractThe chapter takes a closer analytical look at one of the central manifestations of the currently changing character of international investment law as a politicised area of law, namely the increasing, and increasingly more formalised, opportunities for an active involvement of interested citizens and other private actors in the preparation, negotiation and subsequent enforcement of international investment agreements. We identify and illustrate practical examples of public participation in the investment treaty-making processes as well as the implementation mechanisms of investment agreements once entering into force. The chapter furthermore illustrates that the options for public participation as increasingly provided for in connection with these treaties are often, and in principle rightly, perceived as valuable means to foster the legitimacy of the regulatory features stipulated therein. Turning to the conceptualisation of this legitimatory value of public participation, it is argued that a closer look at its quasi-constitutional foundations reveals that this approach is most appropriately qualified as an alternative to, or surrogate for, democratic legitimacy that finds its overarching normative basis in the legal principle of republicanism and can thus be considered as a possible sign for a republicanisation of international investment law. Against this background, and adopting a more overarching perspective, we also present some thoughts on the usefulness and validity of a broader claim towards a republicanisation of international investment law as a normative ordering and guiding idea for conceptualising current trends in international investment law-making as well as for the future progressive evolution of this area of international economic law. -
Non-Disputing Parties’ Rights in Investor-State Dispute Settlement: The Application of the Monetary Gold Principle
Alvaro Galindo, Ahmed ElsisiThe chapter delves into the complex issue of non-disputing parties' (NDPs) rights in investor-state dispute settlement (ISDS), emphasizing the importance of transparency and representation in a system originally designed for private commercial disputes. It discusses the Monetary Gold Principle (MGP) as a potential solution to NDPs' exclusion, drawing parallels from international law and highlighting the need for clear guidelines to identify indispensable parties in ISDS proceedings. The text also examines recent developments and proposals for reforming the ISDS system to better accommodate NDPs' interests, underscoring the urgency of addressing these issues to enhance the legitimacy and transparency of ISDS.AI Generated
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AbstractCommercial arbitration is, by design, a private forum for the settlement of legal disputes between private parties. Confidentiality has been one of its overarching features and fundamental principles. Yet, the rise of the state as a commercial actor in the last century has led to an evolution in the arbitration process to accommodate and resolve disputes at the intersection between private and public law. Today, while investor-state dispute settlement (“ISDS”) is recognized as a system distinct from commercial arbitration, confidentiality still plays a role in the ISDS process. As a result, non-disputing parties (“NDPs”) affected by the outcome of ISDS are generally restricted from participating meaningfully in the process.This note examines the position of NDPs in ISDS. It surveys the rules of procedures and the jurisprudence of some of the major international courts and tribunals to shed light on the main differences between intervention as original disputing party and participation as amicus curiae, and the treatment they both receive under public international law and in ISDS. The note further explores the viability of applying the Monetary Gold Principle (“MGP”) in the ISDS context to enable NDPs to participate and represent their interests in the process. Finally, the note concludes with a brief reflection on the place of NDPs in the ongoing ISDS reform efforts. -
Media Wars: Transparency and Aggravation in International Investment Arbitration
Alina PapanastasiouThe chapter delves into the intricate dynamics between media coverage and transparency in international investment arbitration, a field where disputes often involve public-private contracts and sensitive public sectors. It examines how media reporting can both promote access to information and shape public opinion, influencing decision-making processes. The text explores the evolution of transparency in investment arbitration, marked by instruments like the Mauritius Convention, and the dual role of media as both a promoter of public participation and a potential aggravator of disputes. It discusses strategies employed by parties to manipulate media coverage, leading to 'media wars' that can damage the dispute settlement process. The chapter also analyzes legal tools, such as provisional measures and non-aggravation orders, used to manage media involvement and preserve the integrity of arbitration proceedings. It concludes by challenging the normative dilemma between transparency and procedural integrity, suggesting that transparency can actually enhance procedural integrity in arbitration.AI Generated
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AbstractAgainst the backdrop of an ongoing arbitration “war”, disputing parties often end up waging parallel media wars to further promote their interests and to mount pressure on their opponent. Media coverage of pending disputes can admittedly promote transparency and public participation in a field centered around state decisions that are often taken for the sake of the public interest—or allegedly so. On the flipside, however, media involvement can also prove to be an extra arrow in the quiver of either party, which by openly sharing or anonymously leaking information to the public domain aims at advancing its position in the dispute. This double-edged role of the press has engaged the attention of tribunals having to decide on requests for provisional measures or non-aggravation orders brought by respondents and claimants alike. This chapter focuses on the role of the media as an actor and tool in investment arbitration and discusses the different facets, modalities and possible limitations to their involvement. -
Empirically Mapping Investment Arbitration Scholarship: Networks, Authorities, and the Research Front
Niccolò Ridi, Thomas SchultzThis chapter explores the dynamic field of investment arbitration scholarship, which has seen a surge in publications despite its relative newness. The authors argue that studying this scholarship can deepen our understanding of investment arbitration itself. The chapter uses scientometrics to analyze citation patterns, authorities, and the research front, revealing latent patterns and the influence of scholarship on tribunals. It highlights the hybrid nature of investment arbitration and the significance of its scholarship, drawing parallels with public international law and commercial arbitration. The analysis also includes a detailed examination of the most cited authors and works in investment arbitration decisions, providing a comprehensive overview of the field.AI Generated
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AbstractScholarship on international investment arbitration is plentiful. Despite it being a relatively young field, it would be difficult to name one in which more books and articles have been published in recent years. The field is a dynamic one, attracting a diverse range of authors; the stakes are high, the knowledge is limited: scholarly work is necessary and to be welcome. The amount of available literature, however, also provides us for an opportunity to study its relationship with the field it purports to describe: in a nutshell, we do not study investment arbitration scholarship because we are naively surprised that it exists, or that there is so much of it. We know that there must be good reasons for it to do so, and to do so to this extent. It is precisely for these very good reasons that we can resolutely argue that investment arbitration scholarship is worth studying, and that studying investment arbitration scholarship can bring us a step closer to a better understanding of investment arbitration. Accordingly, this chapter seeks to provide a large-scale analysis of investment arbitration scholarship. By combining theoretical insights and big data empirical analysis, we seek to map the field, its actors, and, its dynamics, with a view to revealing latent patterns through citations, topics, and publication dynamics, but also through tribunals’ use of literature. -
Private Counsel and the Proposed Reforms of Investor-State Dispute Settlement (ISDS)
Rimdolmsom J. Kabre, Andreas R. ZieglerThe chapter discusses the ongoing reforms in Investor-State Dispute Settlement (ISDS) at both multilateral and bilateral levels, highlighting the mandate of UNCITRAL and ICSID to address concerns and propose solutions. It focuses on two key reforms: the establishment of an Advisory Centre on Investment Law (ACIL) to support developing countries and SMEs, and the ethics provisions in the CETA aimed at ensuring the independence and impartiality of decision-makers. The chapter explores the potential impact of these reforms on the role of private counsel, arguing for complementarity between the ACIL and counsel, and suggesting that the ethics provisions in CETA could indirectly regulate counsel's conduct.AI Generated
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AbstractThis chapter examines the impact that ISDS reforms will have on counsel’s activities. More specifically, it discusses two specific amendments namely the establishment of an Advisory Centre on Investment Law (ACIL) and the elaboration of a code of conduct -using the example of the CETA. On one hand, this chapter tries to demonstrate that counsel may benefit from the establishment of the ACIL notably because it will help them to refocus on assisting litigant states and not representing them. Admittedly, this Advisory Centre may provide legal services to litigant parties in the same fashion counsel do. But, and given the number and the length of investment disputes, such a centre cannot be entrusted with the exclusive management of all those disputes. Rather, we advocate in favour of complementary between them as it has occurred for the World Trade Organization (WTO) with the Advisory Centre of WTO Law (ACWL) and the roster of counsel.On the other hand, most recent investment agreements have tackled the issue of ethics with the inclusion of provisions regulating the double-hatting and the adoption of a code of ethics for arbitrators. Even if these amendments are primarily directed towards arbitrators, they may be indirectly applicable to counsel in some cases as it will be discussed. We will conclude with some recommendations regarding the negotiations currently going on at UNCITRAL. -
Correction to: Private Actors in International Investment Law
Katia Fach Gómez
- Title
- Private Actors in International Investment Law
- Editor
-
Katia Fach Gómez
- Copyright Year
- 2021
- Publisher
- Springer International Publishing
- Electronic ISBN
- 978-3-030-48393-7
- Print ISBN
- 978-3-030-48392-0
- DOI
- https://doi.org/10.1007/978-3-030-48393-7
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