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The Role of International Human Rights Law in Re-Shaping Investor-State Arbitration

Published online by Cambridge University Press:  05 May 2017

Susan L. Karamanian
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Over the past few decades, a new process has dominated how States treat foreign investment and the consequences to States for breaching international standards. The system's key feature, the means for settling a foreign investor's dispute with a State that hosts the investment, lacks traditional elements of State judicial systems. Instead, it is a creature of State consent as reflected in international investment agreements (IIAs). In IIAs, States promise to treat foreign investment and the investors in a certain, fundamentally fair, way. Many IIAs authorize foreign investors and States to select private arbitrators to resolve claims that host States breached their promises under the IIA. The arbitrators, in turn, are empowered to issue arbitral awards.

Type
Articles
Information
International Journal of Legal Information , Volume 45 , Issue 1 , March 2017 , pp. 34 - 41
Copyright
Copyright © The Author(s) 2017 

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References

1 Weiler, Todd, “NAFTA Investment Arbitration and the Growth of International Economic Law,” 36 Can. Bus. L. J. 405, 406 (2002)Google Scholar (investor-state arbitration “provide[s] investors with a secure and predictable atmosphere for their foreign investments”).

2 European Commission, “Fact Sheet, Investment Protection and Investor-to-State Dispute Settlement in EU Agreements” 5 (Nov. 2013), http://trade.ec.europa.eu/doclib/docs/2013/november/tradoc_151916.pdf.

3 UNCTAD, Investment Policy Hub, http://investmentpolicyhub.unctad.org/ISDS/FilterByYear.

4 UNCTAD, Investment Policy Hub, http://investmentpolicyhub.unctad.org/ISDS (noting that in 36.4% of all reported cases from the time the process started, the State has prevailed; given settlements and discontinuation of cases, the State has won more than investors), last visited Mar. 26, 2017.

5 UNCTAD, Investment Policy Hub, http://investmentpolicyhub.unctad.org/ISDS/FilterByAmounts (indicating that 145 cases since investor-state arbitration started have resulted in awards exceeding $1 million; yet, this number does not take into account awards that may have been vacated).

6 See Section III below.

7 Mégret, Frédéric, “Nature of Obligations” in International Human Rights Law 124, 124–25 (Moeckli, Daniel, et al. eds.) (Oxford University Press 2010)Google Scholar [hereinafter, Mégret].

8 Douglas, Zachary, The International Law of Investment Claims 6 (Cambridge University Press, 2009)CrossRefGoogle Scholar (recognizing that IIAs “are international instruments between states governed by the public international law of treaties”).  Douglas notes, however, that the arbitral award is akin to a “‘civil or commercial’” award, and thus has elements of private transnational dispute resolution. Id. 6–7.

9 UN Charter art. 1(1).

10 Id. art. 1(3).

11 Universal Declaration of Human Rights (Preamble), Dec. 10, 1948, G.A. Res. 217A (III), U.N. Doc. A/RES/217/III (1948) [hereinafter, UDHR].

12 International Covenant on Civil and Political Rights, Dec. 19, 1966, 999 U.N.T.S. 171, 6 I.L.M. 368 [hereinafter, ICCPR].

13 International Covenant on Economic, Social and Cultural Rights, Dec. 16, 1966, 993 U.N.T.S. 3, 6 I.L.M. 360 [hereinafter, ICESCR].

14 See United Nations Treaty Collection, Multilateral Treaties Deposited with the Secretary-General, Human Rights https://treaties.un.org/pages/Treaties.aspx?id=4&subid=A&lang=en.

15 Jo Pasqualucci, “The Americas,” Steven Greer, “Europe,” and Heyns, Christof & Killander, Magnus, “Africa” in See International Human Rights Law 433–97 (Moeckli, Daniel, et al. eds.) (Oxford University Press 2010)Google Scholar.

16 Mégret, supra note 7, at 125.

17 Id. at 127–30.

18 Shelton, Dinah, “The Boundaries of Human Rights Jurisdiction in Europe,” 13 Duke J. Comp. & Int'l L. 95, 123–25 (2003)Google Scholar.

19 Pasqualucci, Jo, “The Americas” in International Human Rights Law 432, 47–440 (Moeckli, Daniel, et al. eds.) (Oxford University Press 2010)Google Scholar [hereinafter, Pasqualucci].

20 Heyns, Christof & Killander, Magnus, “Africa” in International Human Rights Law 478, 487–89 (Moeckli, Daniel, et al. eds.) (Oxford University Press 2010)Google Scholar [hereinafter, Heyns & Killander].

21 Pasqualucci, supra note 19, at 442–47; Heyns & Killander, supra note 20, at 493.  In certain situations, an aggrieved party in the African system may pursue a direct claim to the African Court.  Id. at 493.

22 Penny L. Parker, “Complaint Mechanisms under the UN Human Rights Treaties” (Jan. 7, 2014), http://hrlibrary.umn.edu/Treaty%20Body%20mechanisms%20Jan%202014.pdf.

23 Constitution of South Africa art. 39 (1)(b).

24 Constitution of Argentina art. 75(22).

25 John Ruggie, Special Representative of the U.N. Sec'y-General, Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, U.N. Doc. A/HRC/17/31 (Mar. 21, 2011).

26 Id. at II.A.11.

27 UNCTAD Investment Policy Hub, http://investmentpolicyhub.unctad.org/IIA.

28 Agreement Between the Government of the Russian Federation and the Government of the People's Republic of China on the Promotion and Reciprocal Protection of Investments art. 1(a)–(e) (Nov. 9, 2006), http://investmentpolicyhub.unctad.org/Download/TreatyFile/774.

29 Id. art. 2(a)–(b).

30 The Energy Charter Treaty, art. 10(1), Dec. 17, 1994, 2080 U.N.T.S., 34 I.L.M. 360. The summary of investment protections under the ECT is taken from Susan L. Karamanian, “International Energy Trade and Investor-State Arbitration: What Place for Sustainable Development?” in Emerging Issues in Sustainable Development 355, 358–59 (Mitsuo Matsushita & Thomas J. Schoenbaum eds.) (Springer 2016).

31 Id.

32 Id. art. 10(3).

33 Id. art. 10.

34 UDHR, supra note 11, art. 17(1)(2).

35 European Convention for the Protection of Human Rights and Fundamental Freedoms, Protocol, art. 1, Mar. 20, 1952, 213 U.N.T.S. 221.

36 Id.

37 See, e.g., American Convention on Human Rights, art. 21, Nov. 22, 1969, 1144 U.N.T.S. 143.

38 ICCPR, supra note 12, art. 26; ICESCR, supra note 13, art. 3

39 ICCPR, supra note 12, arts. 14–16.

40 2012 U.S. Model BIT:  Treaty Between The Government of the United States of America and the Government of [Country] Concerning the Encouragement and Reciprocal Protection of Investment, Annex A https://ustr.gov/sites/default/files/BIT%20text%20for%20ACIEP%20Meeting.pdf [hereinafter U.S. Model BIT].

41 See supra notes 18–21 and accompanying text.

42 See, e.g., 2012 US Model BIT, supra note 40, arts. 24–36.

43 See, e.g., id. art.  30(1).

44 Netherlands–Czech/Slovak Bilateral Investment Treaty art. 8(6), http://investmentpolicyhub.unctad.org/Download/TreatyFile/968.

45 Convention on the Settlement of Investment Disputes between States and Nationals of Other States, art. 42, Mar. 18, 1965, 17 U.S.T. 1270, 575 U.N.T.S. 159.

46 See, e.g., Van Harten, Gus, Investment Treaty Arbitration and Public Law 9–11 (2007)Google Scholar.

47 See, e.g., Irish Environment, “The Trojan Horse:  Investor-State Dispute Settlements in the EU-US Proposed Trade Agreement (TTIP),” http://www.irishenvironment.com/reports/trojan-horse-investor-state-dispute-settlements-eu-us-proposed-trade-agreement-ttip/.

48 See, e.g., Public Citizen, “Case Studies:  Investor-State Attacks on Public Interest Policies,” http://www.citizen.org/documents/egregious-investor-state-attacks-case-studies.pdf [hereinafter Public Citizen].

49 Id.

50 Id.

51 ICCPR, supra note 12, arts. 14–16.

52 ICSID Arbitration Rules art. 37(2).

53 See, e.g., Methanex Corp. v. United States, UNCITRAL Arb., Decision of the Tribunal on Petitions from Third Persons to Intervene as ‘Amici Curiae’ (Jan. 15, 2001); Glamis Gold, Ltd. v United States, UNCITRAL Arb., Submission of the Quechan Indian Nation, http://www.state.gov/documents/organization/75016.pdf.

54 UNCTAD, Transparency: UNCTAD Series on Issues in International Investment Agreements II (2012) 41–42 [hereinafter, “UNCTAD Transparency”] (citing the Model BITs of Canada and the United States and specifically referencing the Canada–Peru Free Trade Agreement (2006) and the US–Uruguay BIT (2005)).  Chapter Nine of the proposed Trans–Pacific Partnership Agreement authorizes a tribunal to “accept and consider written amicus curiae submissions regarding a matter of fact or law within the scope of the dispute.”  Trans–Pacific Partnership Agreement art. 9.23(3), https://ustr.gov/sites/default/files/TPP-Final-Text-Investment.pdf [hereinafter, “TPP”]. Since this essay was written the United States has indicated it would not sign the TPP.

55 UNCTAD Transparency, supra note 54, at 37.

56 Center for International Environmental Law, “International Centre for Settlement of Investment Disputes Hearing Webcast for the First Time” (June 21, 2010), http://www.ciel.org/news/international-centre-for-settlement-of-investment-disputes-hearing-webcast-for-first-time/.

57 TPP, supra note 54, art. 9.24; Canada-Peru Free Trade Agreement, Chapter 8, art. 835 (1), (3), http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/peru-perou/chapter-chapitre-8.aspx?lang=eng [hereinafter, “Canada-Peru FTA”].  Exceptions are made for certain confidential information.

58 Canada-Peru FTA, supra note 57, art. 826.

59 TPP, supra note 54, art. 9.22(6).

60 See, e.g., Norton, Patrick M., “The Use of Precedents in Investment Treaty Arbitration Awards,” 25 Am. Rev. Int'l Arb. 167 (2014)Google Scholar.

61 Vienna Convention on the Law of Treaties art. 31(1)–(2), May 23, 1969, 1155 U.N.T.S. 331 [hereinafter, VCLT].

62 Comprehensive Economic and Trade Agreement and Strategic Partnership Agreement between Canada and the European Union (Preamble), http://trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154329.pdf.  CETA is awaiting formal ratification.

63 OECD Guidelines for Multinational Enterprises (2011 ed.) Part IV(1), http://www.oecd.org/daf/inv/mne/48004323.pdf.  The referenced language is identical to text from the Guiding Principles.  See supra note 25 and accompanying text.

64 Canada-Peru FTA, supra note 57, art. 810.

65 Id.

66 TPP, supra note 54, art. 9.17.

67 See infra notes 68–77 and accompanying text.

68 Susan L. Karamanian, “The Place of Human Rights in Investor-State Arbitration,” 17 Lewis & Clark L. Rev. 423 (2013).

69 Philip Morris Brands Sárl v. Uruguay, ICSID Case No. ARB/10/7, Award (July 8, 2016), http://www.italaw.com/sites/default/files/case-documents/italaw7417.pdf.

70 Id. para. 9.

71 Id. para. 12.

72 Id. para. 13.

73 Id. paras. 290.

74 Id.

75 Id. paras. 292–301.

76 Id. para. 291.

77 Id. para. 399.