Transnational Actors in International Investment Law

Table of Contents

1. Frontmatter

2. UNCITRAL and the Governance of International Investments

   Bruno Sousa Rodrigues

   Abstract

   Has the performance of UNCITRAL’s mandate evolved over time in relation to the governance of international investments? The chapter argues that UNCITRAL’s activities concerning investment law may be divided in two discrete instants. A first period is marked by an attentive performance of UNCITRAL’s mandate to promote “the progressive harmonization and unification of the law of international trade”, focused only on the private dimensions of international investment transactions. A second period begins recently with UNCITRAL’s involvement in the governance of investment arbitration. In particular, the project of ISDS reform has been undertaken at UNCITRAL under a presumably expanded understanding of its mandate and mission. It is, however, unclear whether this reconstruction of UNCITRAL’s mandate merely reflects a stronger engagement with public international law or an attempt to pursue activities of institutional imagination seemingly geared towards the transnational constitutionalization of the international investment regime. In any event, the new set of tasks conducted by UNCITRAL will require changes to the methods and practices historically developed for the transnational harmonization of municipal commercial law. This chapter aims at contributing to a reflection on the obstacles that UNCITRAL may face in the years to come regarding its evolving role as one of the centres for the transnational governance of international investments.

3. EU as a Driver in the Judicialization Process of International Investment Disputes: ISDS Reform and EU Judicial System

   Rosario Ojinaga Ruiz, Maria Lina Leiva

   Abstract

   With judicialization of ISDS as a hallmark of the EU investment policy and its proposal for the multilateralization of the investment court system, ISDS reform is increasingly associated with challenges arising from the multiplication of international tribunals and judicial dialogue. This includes challenges concerning the relation between the investment court system and the EU judicial system. In particular, the main feature regarding the compatibility of the CETA ICS with the autonomy of the EU legal order is the ISDS disconnection from EU Law and its judicial system. As a result, in Opinion 1/17 the CJEU has considered that the safeguards embodied in CETA rules and procedures are sufficient guarantee to the autonomy of the EU legal order, but the need of judicial dialogue with CETA Tribunals has been dismissed. Nevertheless, taking into account the possible outcome of the ongoing process of ISDS reform at the UNCITRAL and the current trend towards judicialization of international adjudication, new legal approaches may become necessary for the promotion of judicial dialogue and cooperation between the CJEU and other international jurisdictional structures.

4. Compulsory Optionality: International Standardizing Bodies as Transnational Actors in International Investment Law

   Eleni-Amalia Giannakopoulou, Marios Tokas

   Abstract

   From a traditional public international law perspective, a standard is either binding or it is not: there is no in-between. The emergence of international standards as a key component of modern international public policy, however, has proven that normativity does not have such a binary notation. The voluntary instruments described as international standards have acquired growing influence in the field of World Trade Organization law. This chapter argues that international investment law has not escaped these developments. Accordingly, the purpose of the present chapter is to identify the role of international standardization bodies as transnational actors of international investment law, by determining their influence on the interpretation and application of rights and obligations under international investment agreements.

5. New Actors in Investment Arbitration: The Legitimate Government

   Krystle Baptista

   Abstract

   This chapter explores the penetration in investment arbitration of a new actor: the legitimate government of the Respondent-State, in competition with the de facto government, for the representation of the State before investment tribunals. The chapter addresses whether ICSID and ICSID Additional Facility arbitral tribunals have jurisdiction to determine who is the legitimate government of the respondent State, and thus, who is the proper representative of the State. It concludes that such decision escapes the tribunal’s jurisdiction and advocates, inter alia, that the decision should be taken at the political level by the State Members of the World Bank.

6. International Non-investment Courts and Tribunals as Transnational Actors in International Investment Law and Arbitration?

   Ioannis Prezas

   Abstract

   While international non-investment courts and tribunals do not usually interact with investment law and arbitration, they may potentially become limited actors in this transnational legal field. First, they can contribute indirectly to the shaping of investment law though cross-references to their case law made by investment tribunals. Second, the ICJ may exceptionally become a supporting actor in international arbitration for post-award enforcement purposes under Article 64 of the ICSID Convention. This provision confers limited jurisdiction to the Court in relation to interstate disputes over the interpretation or the application of the Convention as it does not empower the Court to review arbitral awards on the merits or jurisdiction. Third, interstate proceedings over sovereignty in a disputed area may affect the legal condition of investments, as well as influence investor-state proceedings and decisions regarding the protection of the investments in the same area. The legality of the authorisation of the investment and the territorial applicability of an investment treaty are merely two of the wide variety of issues that merit attention. In any event, given the absence of a centralised and hierarchical adjudication system in international law, investor-state arbitration evolves in a fairly autonomous manner vis-à-vis all other international courts and tribunals. Specifically, the almost generalised lack of formal coordination rules between different adjudicative components of the international legal order seems to support the conclusion that non-investment courts and tribunals become actors in international investment law and arbitration, only if, and to the extent that, investment tribunals deem this necessary for the exercise of their own functions in each particular case.

7. Apropos of the External Precedent: Judicial Cross-Pollination Between Investment Tribunals and International Courts

   Fulvio Maria Palombino, Gustavo Minervini

   Abstract

   In the horizontal and decentralized international legal system, an effective judicial dialogue is a basic requirement to guarantee the harmonious development of international law. In this respect, since the international competent judge is not pre-established by law, there is a risk of fragmentation of international law as a result of a different interpretation of the same rule of law provided by distinct international judicial bodies. From this perspective, the use of external authorities has often been considered as a potential remedy to fragmentation. Indeed, by carefully examining the precedents related to the specific issues, each judge may contribute to the harmonious interpretation and development of international law. Nevertheless, the use of external authorities is not something good in itself. This chapter analyses the role of external authorities in investment arbitration and vice-versa, on the assumption that the use or misuse of external precedents by one court may affect how other tribunals will use its jurisprudence. Through the examination of four selected cases where judges strategically relied or ignored external authorities, this chapter finally contends that a misuse of external jurisprudence produces a vicious circle in which international courts and tribunals are likely to ignore each other. Quite the opposite, a prerequisite for international courts and tribunals to effectively participate in the harmonious development of international law must be sought in the careful and justified use of the exogenous precedent.

8. Domestic Courts as Transnational Actors in International Investment Law: A Canadian Perspective

   Ksenia Polonskaya

   Abstract

   This chapter examines the role of domestic courts as transnational actors in international investment law. In particular, this chapter examines the approaches and perspectives of the Canadian courts in the process of setting aside arbitral awards. This chapter seeks to understand how the courts themselves perceive their roles in the context of international investment law, and how the courts interact with the arbitral tribunals by legitimizing and delegitimizing certain narratives on international investment law. It suggests that the framework of “exit, voice and loyalty” developed by Albert O. Hirschman is most helpful to understand the relationships between the national courts and arbitral tribunals in the context of international investment law.

9. A Middle Path of ISDS Reform: The Principle of Comity as a Means of Strengthening the Role of National Courts in the Enforcement of Investment Arbitral Awards

   Aikaterini Florou

   Abstract

   This chapter explores the changing dynamics of the relationship between domestic courts and investment-treaty tribunals at the stage of the enforcement of arbitral awards. The focus is on the increasing tension between EU law and international investment law in the context of intra-EU investor-state arbitration, as demonstrated in particular by the difficulties in enforcing the arbitral awards in the Micula and Achmea cases. The chapter reveals the divergent approaches that domestic courts, both within and outside the EU, have taken to the enforcement of intra-EU arbitral awards. It concludes with reflections on the role of comity as a means of coordination between courts and tribunals and a conflict-prevention mechanism and the potential institutionalization of the principle of comity in the context of the ongoing revision of the ICSID Arbitration Rules.