nach oben

Erschienen in:

2017 | OriginalPaper | Buchkapitel

8. Investment Arbitration Under Mega-Regional Free Trade Agreements: A 21st Century Model

verfasst von : Mark Feldman

Erschienen in: Paradigm Shift in International Economic Law Rule-Making

Verlag: Springer Singapore

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

Investment obligations and investor-State arbitration provisions normally have been negotiated under BITs; in recent years, however, and with increasing frequency, such provisions have been negotiated in the larger context of FTAs. For investment provisions, the movement from BITs to FTAs recently has taken an additional, significant step: the negotiation of such provisions in the even larger context of mega-regional FTAs. This shift in context—from BITs to FTAs, and now from FTAs to mega-regional FTAs—will significantly affect the content and operation of investment provisions. Indeed, investment arbitration under mega-regional FTAs likely will be distinctive in several important respects. This chapter addresses five distinctive characteristics of investment arbitration under mega-regional FTAs. With the conclusion of the TPP, and likely conclusion of an RCEP agreement, those five characteristics ultimately could be seen, more generally, as characteristics of 21st century investment arbitration.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel Friends with Benefits? Amicus Curiae in the TPP Investor-State Dispute Settlement Mechanism

Nächstes Kapitel Market Access for Goods in the TPP: The Good, the Bad, and the Ugly

Many recently-concluded FTAs include investment obligations and investor-State dispute settlement provisions. See, e.g., Filippo Fontanelli and Giuseppi Bianco, ‘Converging Towards NAFTA: An Analysis of FTA Investment Chapters in the European Union and the United States’, (2014) 50 Stan. J. Int’l L. 211, 214 (‘While U.S. FTAs usually include chapters on investment, EU ones have not featured them until very recently’); Roger P. Alford, ‘The Convergence of International Trade and Investment Arbitration’, (2013) 12 Santa Clara J. Int’l L. 35, 38 (‘the number of BITs is on the decline and the number of PTAs [preferential trade agreements] with investment chapters is on the rise’). For discussion of U.S. FTAs that include investment provisions, see Shayerah Ilias Akhtar and Martin A. Weiss, U.S. International Investment Agreements: Issues for Congress, Congressional Research Service (2013) 13–15, available at www.fas.org/sgp/crs/row/R43052.pdf.

The World Economic Forum has described ‘mega-regional RTAs [regional trade agreements]’ as ‘deep integration partnerships in the form of RTAs between countries or regions with a major share of world trade and FDI and in which two or more of the parties are in a paramount driver position, or serve as hubs, in global value chains (i.e. the US, EU, Japan, China).’ World Economic Forum, Global Agenda Council on Trade & Foreign Direct Investment, Mega-regional Trade Agreements: Game-Changers or Costly Distractions for the World Trading System? (2014) 3, available at www3.weforum.org/docs/GAC/2014/WEF_GAC_TradeFDI_MegaRegionalTradeAgreements_Report_2014.pdf [hereinafter Mega-regional Trade Agreements].

See Mark Feldman, Rodrigo Monardes Vignolo, and Cristián Rodríguez Chiffelle, The Role of Pacific Rim FTAs in the Harmonisation of International Investment Law: Towards of Free Trade Area of the Asia-Pacific, E15 Initiative (Geneva, International Centre for Trade and Sustainable Development and World Economic Forum) (2016) 1, available at www.e15initiative.org.

See TPP Article 9.29(2) (“For greater certainty, if an investor of a Party submits a claim to arbitration under Article 9.19.1(a) (Submission of a Claim to Arbitration), it may recover only for loss or damage that it has incurred in its capacity as an investor of a Party”).

Each mega-regional FTA, by definition, would cover a “major share of world trade and FDI”: the World Economic Forum has described ‘mega-regional RTAs [regional trade agreements]’ as ‘deep integration partnerships in the form of RTAs between countries or regions with a major share of world trade and FDI and in which two or more of the parties are in a paramount driver position, or serve as hubs, in global value chains (i.e. the US, EU, Japan, China).’ World Economic Forum, Global Agenda Council on Trade & Foreign Direct Investment, Mega-regional Trade Agreements: Game-Changers or Costly Distractions for the World Trading System? (2014) 13, available at www3.weforum.org/docs/GAC/2014/WEF_GAC_TradeFDI_MegaRegionalTradeAgreements_Report_2014.pdf.

See TPP Annex I Explanatory Note 1 (providing that non-conforming measures set out in each Party’s Schedule to the Annex are not subject to “some or all of the obligations imposed by” certain provisions of TPP Chap. 9 (Investment) and Chap. 10 (Cross-Border Trade in Services)); TPP Annex II Explanatory Note 1 (providing that “specific sectors, subsectors or activities” set out in each Party’s Schedule to the Annex may not conform with obligations imposed by certain provisions of TPP Chap. 9 (Investment) and Chap. 10 (Cross-Border Trade in Services)).

The TPP includes a joint interpretation mechanism in Chap. 27 of the agreement. See TPP Articles 27.1 and 27.2(2)(f) (the Trans-Pacific Partnership Commission, “composed of government representatives of each Party,” may “issue interpretations of the provisions of this Agreement”).

See Statement of the Free Trade Commission on Non-Disputing Party Participation, available at www.state.gov/documents/organization/38791.pdf.

See Statement of the Free Trade Commission on Notices of Intent to Submit a Claim to Arbitration, available at www.state.gov/documents/organization/38792.pdf.

See, e.g., Australian Government, Department of Foreign Affairs and Trade, How Businesses use FTAs, available at http://dfat.gov.au/trade/agreements/Pages/how-to-use-ftas.aspx (‘Global value chains are increasingly a feature of international trade, and FTAs help open up these opportunities through preferential tariffs and services market access. Regional FTAs in particular may encourage production to be shared across countries, including through rules allowing the ‘accumulation’ of origin for the purposes of meeting the FTA’s rules of origin’); WTO and OECD, ‘Aid for Trade at a Glance 2013: Connecting to Value Chains’, Chap. 4, Boosting Value Chains Via Regional Aid for Trade, available at www.wto.org/english/res_e/booksp_e/aid4trade13_chap4_e.pdf (‘One of the main motivations of the trend towards regional integration, which has become a key component of the international commercial policy landscape, is the need to reduce barriers in regional production networks’).

Sherry Stephenson, Trade Governance Frameworks in a World of Global Value Chains: Policy Options, E15 Expert Group on Global Value Chains: Development Challenges and Policy Options—Policy Options Paper. E15 Initiative, Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum (2016) 9.

Karl P. Sauvant, The International Law and Policy Regime: Challenges and Options, E15Initiative, Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum (2015), www.e15Initiative.org/, at 4.

For discussion of several NAFTA Chap. 11 cases addressing the distinction between trade and investment activities, see Mark Feldman, ‘Distinguishing Investors from Exporters under Investment Treaties’, in J. Kalicki and A. Joubin-Bret (eds), Reshaping The Investor-State Dispute Settlement System (2015) 1 (BRILL).

See TPP Article 9.29(2).

Cargill, Inc. v. Mexico, ICSID Case No. ARB(AF)/05/02, Award (18 Sept. 2009), 523.

Cargill Award 1.

Cargill Award 523.

Cargill Award 525.

See The United Mexican States and Cargill, Incorporated, Court of Appeal for Ontario, 2011 ONCA 622 (4 October 2011), 65.

Cargill Court of Appeal Decision 78.

Cargill Court of Appeal Decision 83 (emphasis added).

TPP Article 27.1 establishes a Trans-Pacific Partnership Commission; the TPP Commission is authorized to ‘issue interpretations of the provisions’ of the TPP (Article 27.2(2)(f)), and such interpretations are binding on TPP investment chapter tribunals (Article 9.25(3)).

The TPP includes the following language addressing the potential development of an appellate mechanism: “In the event that an appellate mechanism for reviewing awards rendered by investor-State dispute settlement tribunals is developed in the future under other institutional arrangements, the Parties shall consider whether awards rendered under Article 9.29 (Awards) should be subject to that appellate mechanism.”.

See, e.g., Karl Sauvant, The International Law and Policy Regime: Challenges and Options, E15 Initiative, Geneva, International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum (2015) 11, available at www.e15initiative.org/ (‘a topical and urgent question is whether appeals mechanisms for the current ad hoc tribunals, a world investment court as a standing first-instance tribunal making the decision in any dispute settlement case, or a combination of both should be established. Institutionalizing dispute settlement in this manner would be a major step towards improving the investment regime’).

European Commission, Press Release, Commission Proposes new Investment Court System for TTIP and other EU Trade and Investment Negotiations (2015) 1, available at http://europa.eu/rapid/press-release_IP-15-5651_en.htm. For treaty text on the EU’s proposed Investment Court System, see European Commission Draft Text TTIP—Investment, Article 9 and Article 10, available at http://trade.ec.europa.eu/doclib/docs/2015/september/tradoc_153807.pdf; Canada-European Union Comprehensive Economic and Trade Agreement, agreed text as of February 2016, Article 8.27 and Article 8.28, available at http://ec.europa.eu/trade/policy/in-focus/ceta/; European Union-Vietnam Free Trade Agreement, agreed text as of January 2016, Chap. 8 Article 12 and Article 13, available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437.

See, e.g., Jaemin Lee, ‘Introduction of an Appellate Review Mechanism for International Investment Disputes—Expected Benefits and Remaining Tasks’, in J. Kalicki and A. Joubin-Bret (eds), Reshaping the Investor-State Dispute Settlement System (Brill) (2015) 477 (‘an appellate mechanism will be able to facilitate and foster ‘rule of law’ in international investment arbitration by accumulating and spreading consistent jurisprudence in the international community’).

See, e.g., Anna Joubin-Bret, ‘Why We Need a Global Appellate Mechanism for International Investment Law’, Columbia FDI Perspectives (2015) 1 (appellate mechanism discussion should not focus on individual treaties, but rather ‘needs to address the impact an appellate mechanism can have on the body of international investment law as it applies to thousands of treaties’).

The World Economic Forum has described ‘mega-regional RTAs [regional trade agreements]’ as ‘deep integration partnerships in the form of RTAs between countries or regions with a major share of world trade and FDI and in which two or more of the parties are in a paramount driver position, or serve as hubs, in global value chains (i.e. the US, EU, Japan, China).’ World Economic Forum, Global Agenda Council on Trade & Foreign Direct Investment, Mega-regional Trade Agreements: Game-Changers or Costly Distractions for the World Trading System? (2014) 13, available at www3.weforum.org/docs/GAC/2014/WEF_GAC_TradeFDI_MegaRegionalTradeAgreements_Report_2014.pdf.

See, e.g., Christopher Wilson, ‘The Impact of TPP on Latin America and U.S. Relations with the Region’, (Wilson Center, 2015) (‘Colombia, the only Pacific Alliance country not participating in the TPP negotiations, seems a strong candidate for future inclusion in the agreement, which would be an important tool for it to deepen its integration into regional and global value chains and continue to modernize its economy’); The World Bank, Global Economic Prospects, Potential Macroeconomic Implications of the Trans-Pacific Partnership (2016) 224 (‘the TPP seeks to facilitate the development of supply chains among its members’); Government of Australia, Trans-Pacific Partnership Agreement, Background Document: Global Value Chains and the Trans-Pacific Partnership Agreement, available at http://dfat.gov.au/trade/agreements/tpp/Documents/background-papers-gvc-tpp.pdf. [hereinafter Global Value Chains and TPP] (‘the combined effect of new market access opportunities and common rules [under the TPP] will make it easier for Australian businesses, exporters and consumers to participate in and benefit from GVCs’).

Government of Australia, Trans-Pacific Partnership Agreement, Background Document: Global Value Chains and the Trans-Pacific Partnership Agreement, available at http://dfat.gov.au/trade/agreements/tpp/Documents/background-papers-gvc-tpp.pdf, at 1.

Richard Baldwin, Foreward, in Daria Taglioni and Deborah Winkler, Making Global Value Chains Work for Development, Trade and Development Series, Washington, DC: World Bank (2016) 1, available at https://openknowledge.worldbank.org/handle/10986/24426.

Richard Baldwin, Foreward, in Daria Taglioni and Deborah Winkler, Making Global Value Chains Work for Development, Trade and Development Series, Washington, DC: World Bank (2016) 17, available at https://openknowledge.worldbank.org/handle/10986/24426.

For discussion of a negative list approach to reservations and limitations, see European Commission, Services and Investment in EU Trade Deals, Using ‘Positive’ and ‘Negative’ Lists (2016) 3, available at http://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154427.pdf (‘When using a positive list, a Party has to explicitly (‘positively’) list those sectors and subsectors in which it undertakes Market Access and National Treatment commitments. As a second step, the Party lists all exceptions or conditions to these commitments, stating the Market Access and/or National Treatment limitations it wants to apply… When using a negative list, the Parties only need to go through the second step’) (emphasis in original).

Mark Feldman, Rodrigo Monardes Vignolo, and Cristián Rodríguez Chiffelle, The Role of Pacific Rim FTAs in the Harmonisation of International Investment Law: Towards of Free Trade Area of the Asia-Pacific, E15 Initiative (Geneva, International Centre for Trade and Sustainable Development and World Economic Forum) (2016) 7, available at www.e15initiative.org.

See TPP Article 9.10.

Kenneth J. Vandevelde, ‘A Brief History of International Investment Agreements’, (2005) 12 U.C. Davis Journal of Int’l Law and Pol. 157, 181.

Mark Wu, ‘The Scope and Limits of Trade’s Influence in Shaping the Evolving International Investment Regime’, in Z. Douglas and others (eds), The Foundations of International Investment Law (Oxford University Press 2014) 1.

TPP investment liberalization commitments could become even more widely available if the agreement were to be expanded to include other States; a number of States, including the Philippines, Thailand, South Korea, and Taiwan, reportedly have expressed interest in joining the agreement. See, e.g., Joshua Kurlantzick, Who Else Will Join the TPP?, (Council on Foreign Relations, Asia Unbound, 2015) 1.

The Mobil v. Canada case under the NAFTA investment chapter provides one high-profile example of a challenge to performance requirements. See Mobil Investments Canada Inc. & Murphy Oil Corporation v. Canada, ICSID Case No. ARB(AF)/07/4, Award (20 February 2015), 1 (finding guidelines requiring certain expenditures in the areas of research and development as well as education and training violated NAFTA Article 1106). The Bosca v. Lithuania case provides one example of a pre-establishment investment claim, in which the claimant alleged that Lithuania’s “screen[ing]” of the claimant’s attempted acquisition of a Lithuanian company on the basis of the claimant’s nationality violated investment treaty obligations. See Luigiterzo Bosca v. Republic of Lithuania, PCA Case No. 2011-05, Award (17 May 2013), 257.

See, e.g., Joost Pauwelyn, ‘The Transformation of World Trade’, (2005) 104 Mich. L. Rev. 1, 46 (referring to the WTO’s “crucially important mandate of welfare-enhancing trade liberalization”); Kenneth J. Vandevelde, ‘A Brief History of International Investment Agreements’, (2005) 12 U.C. Davis Journal of Int’l Law and Pol. 162 (observing that the General Agreement on Tariffs and Trade “set in motion successive rounds of negotiations aimed at worldwide trade liberalization”).

See, e.g., Federico Ortino, Substantive Provisions in IIAs and Future Treaty Making: Addressing Three Challenges, E15 Initiative, Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum (2015) 1, available at www.e15initiative.org/ (“the core object of IIAs focuses on affording protection to foreign investments, principally once they have been admitted to the host State”); Kenneth J. Vandevelde, ‘A Brief History of International Investment Agreements’, (2005) 12 U.C. Davis Journal of Int’l Law and Pol. 161–179 (discussing the history of international investment agreements in the context of the “Post-Colonial Era” (which “began with the end of the Second World War and continued until the collapse of the Soviet Union”) and the “Global Era” (which “begins at the end of the 1980s”) and observing that BITs during both eras “principally addressed the traditional problem of investment protection”).

Kenneth J. Vandevelde, ‘A Brief History of International Investment Agreements’, (2005) 12 U.C. Davis Journal of Int’l Law and Pol. 182–183.

Kenneth J. Vandevelde, ‘A Brief History of International Investment Agreements’, (2005) 12 U.C. Davis Journal of Int’l Law and Pol. 183. See also Vasyl Charnyi and others, A Survey of Investment Provisions in Regional Trade Agreements, WTO Working Paper ERSD-2016-07 (2016) 5, available at www.wto.org/english/res_e/reser_e/ersd201607_e.htm (“not many BITs except those concluded by the US and Canada after 2004… contain investment liberalization disciplines, while investment chapters of RTAs tend to provide such disciplines”); Sergio Puig, ‘The Merging of International Trade and Investment Law’, (2015) 33 Berkeley J. Int’l L. 1, 13 (“[i]n many [regional trade agreements]… the protection of FDI has shifted in focus from solely postentry protection to trade style liberalization, or pre-establishment obligations”).

See TPP Annex I, Cross-Border Trade in Services and Investment Non-Conforming Measures, and Annex II, Cross-Border Trade in Services and Investment Non-Conforming Measures.

See, e.g., Peterson Institute for International Economics, ‘Assessing the Trans-Pacific Partnership’, (2016) 1: Market Access and Sectoral Issues 107, available at https://piie.com/system/files/documents/piieb16-1.pdf (observing that “the reduction of trade barriers between [TPP] member countries will also increase FDI because multinational firms rely heavily on imports of intermediate goods and services for their global supply chains”).

Regarding control mechanisms generally, see, e.g., Alec Stone Sweet and Thomas L Brunell, Trustee ‘Courts and Judicialization of International Regimes’, (2013) 1 J. Law and Courts 61, 64 (characterizing control mechanisms as “procedures that allow for oversight and override”); Jacob Katz Cogan, ‘Competition and Control in International Adjudication’, (2007) 48 Va. J. Int’l L. 411, 413 (characterizing control mechanisms as “checks on the powers of an organization that ensure that the organization acts within its assigned mandate”).

See NAFTA Article 2001(2).

See NAFTA Article 1131(2).

See Interpretation of the NAFTA Free Trade Commission of Certain Chapter 11 Provisions (2001), available at http://www.state.gov/documents/organization/38790.pdf.

See Mark Feldman, ‘Joint Interpretations under a Divided TPP Investment Chapter’, in Wenhua Shan and Jinyuan Su (eds), China and International Investment Law (2014) 417.

See, e.g., Commerce Group Corp. and San Sebastian Gold Mines, Inc. v. El Salvador, ICSID Case No. ARB/09/17, Award (14 March 2011), 81–82 (quoting non-disputing Party submissions by Costa Rica and Nicaragua); Pac Rim Cayman LLC v. El Salvador, ICSID Case No. ARB/09/12, Decision on the Respondent’s Jurisdictional Objections (1 June 2012), 1.31–32 (referring to non-disputing Party submissions by Costa Rica and the United States).

See CAFTA-DR Article 19.1(3)(c).

Jacob Katz Cogan, ‘Competition and Control in International Adjudication’, (2007) 48 Va. J. Int’l L. 427 (characterizing control mechanisms as “checks on the powers of an organization that ensure that the organization acts within its assigned mandate”).

See Mark Feldman, ‘Investment Arbitration Appellate Mechanism Options: Consistency, Accuracy, and Balance of Power’, (Peking University School of Transnational Law Research Paper No. 16-2, 2016 draft) 16, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2713168.

See Statement of the Free Trade Commission on Non-Disputing Party Participation, available at www.state.gov/documents/organization/38791.pdf.

See, e.g., Eli Lilly v. Canada, ICSID Case No. UNCT/14/2, Procedural Order No. 4 (23 February 2016) (applying FTC Statement on non-disputing party participation); Lone Pine Resources v. Canada, UNCITRAL, Procedural Order No. 1 (11 March 2015), 58 (applying FTC Statement on non-disputing party participation); Apotex Holdings, Inc. and Apotex, Inc. v. United States, ICSID Case No. ARB/AF/12/1, Procedural Order on the Participation of the Applicant, Mr. Barry Appleton, as a Non-Disputing Party (4 March 2013), 4 (applying FTC Statement on non-disputing party participation).

See UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (2014), Article 1(1) (providing that the rules apply only to investor-State arbitration claims submitted under treaties concluded on or after 1 April 2014, unless the Parties to the treaty have agreed otherwise) and Article 1(2) (permitting disputing parties to agree to the application of the rules even for claims submitted under treaties concluded before 1 April 2014).

See UNCITRAL Transparency Rules applied for the first time in investor-State arbitration, Herbert Smith Freehills PIL Notes (2015) 1, available at http://hsfnotes.com/publicinternationallaw/2015/10/26/uncitral-transparency-rules-applied-for-the-first-time-in-investor-state-arbitration/.

Titel: Investment Arbitration Under Mega-Regional Free Trade Agreements: A 21st Century Model
verfasst von: Mark Feldman
Verlag: Springer Singapore
Buch: Paradigm Shift in International Economic Law Rule-Making
Print ISBN: 978-981-10-6730-3

Electronic ISBN: 978-981-10-6731-0

Copyright-Jahr: 2017
DOI: https://doi.org/10.1007/978-981-10-6731-0_8