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ICSID Arbitral Decision

Published online by Cambridge University Press:  27 February 2017

Derek Asiedu-Akrofi
Derek Asiedu-Akrofi*
Affiliation:
The Fletcher School of Law and Diplomacy, Tufts University
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Type
International Decisions
Information
American Journal of International Law , Volume 86 , Issue 2 , April 1992 , pp. 371 - 376
Copyright
Copyright © American Society of International Law 1992

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References

1 See Agreement for the Promotion and Protection of Investments, Feb. 13, 1980, UK-Sri Lanka, reprinted in 19 ILM 886 (1980) [hereinafter Treaty].

2 See Delaume, ICSID and Bilateral Investment Treaties, NEWS FROM ICSID, Winter 1985, at 12; Denza & Brooks, Investment Protection Treaties—United Kingdom's Experience, 35 INT'L & COMP. L.Q. 908 (1987); Ziade, ICSID and Arab Countries,NEWS FROM ICSID, Summer 1988, at 5. Under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for signature Aug. 27, 1965, 17 UST 1270, TIAS No. 6090, 575 UNTS 159 [hereinafter Convention], arbitration facilities are available to “Contracting Parties,” who must consent in writing to use the arbitration facilities. The Convention is, however, silent on the nature of the instrument by which parties may record their consent.

3 No. ARB/87/3, 30 ILM at 587, para. 20. *

4 Article 42 provides that the tribunal shall decide a dispute in accordance with the rules of law as may be agreed upon by the parties. In the absence of such agreement, the tribunal shall apply the law of the contracting state party to the dispute (including its rules on conflicts of laws) and such rules of international law as may be applicable.

5 No. ARB/87/3, 30 ILM at 630 (Asante, arb., dissenting).

6 See Bowett, State Contracts with Aliens, 59 BRIT. Y.B. INT'L L. 49, 52 (1988).

7 No. ARB/87/3, 30 ILM at 587, para. 20.

8 This is by virtue of Article 157 of the Sri Lankan Constitution, which fully incorporates the provisions of the Treaty into Sri Lankan law as part of its domestic law and makes it binding, subject only to such law or executive or administrative action as may be enacted or taken in the interest of national security. The choice of the Treaty as the applicable law should only have been relevant if the contracting parties had been parties to the dispute or the United Kingdom had expressly conferred on the claimant the right to invoke benefits or rights under the Treaty. This approach prevented the claimant from being subjected to the domestic law of the respondent, as contemplated by Article 42 of the Convention. See No. ARB/87/3, 30 ILM at 599, para. 45.

9 See id. at 599-601, paras. 45-50; cf. id. at 637-40 (Asante, arb., dissenting).

10 No. ARB/87/3, 30 ILM at 599, para. 47.

11 Id. at 599-600, paras. 47-48.

12 10 R. Int'l Arb. Awards 499, 521.

13 “(U.S. v. Italy), 1989 ICJ REP. 15 (Judgment of July 20). In that case, the U.S. Government invoked Article V(l) of the bilateral treaty, which established an obligation to provide “the most constant protection and security,” but without claiming that this obligation constituted a “guarantee involving the emergence of a strict liability.” The U.S. Memorial, at 135, stated that “one well established aspect of the international standard of treatment ... is that states must use ‘due diligence’ to prevent wrongful injuries to the person or property of aliens within their territory.” See also A. FREEMAN, RESPONSIBILITY OF STATES FOR UNLAWFUL ACTS OF THEIR ARMED FORCES 14 (1957). For the present state of international law on investment standards as reflected in bilateral investment treaties, see Gudgeon, Valuation of Nationalized Property under United States and Other Bilateral Investment Treaties, in 4 VALUATION OF NATIONALIZED PROPERTY IN INTERNATIONAL LAW 120 (R. B. Lillich ed. 1987).

14 1989 ICJ REP. at 65, para. 108.

15 The claimant made an alternative submission as a supplementary argument based on Article 4(2) of the Treaty, which it intended to rely on only if the tribunal “unexpectedly” deemed the provision applicable.

16 See I. BROWNLIE, PRINCIPLES OF PUBLIC INTERNATIONAL LAW 452-53 (1979) (citing the five principles enunciated by Lord McNair on state responsibility of lawful governments for the conse quences of insurrection and rebellion).

17 ” No. ARB/87/3, 30 ILM at 607, para. 65.

18 Id. at 607-08, para. 66.

19 Id. at 615-16, para. 85(B).

20 Id. at 636 (Asante, arb., dissenting). Thus, it was not open to the tribunal to use Article 2(2) as a basis for determining the respondent's liability after its definite ruling to the effect that the respondent was not liable under Article 4(2).

21 No. ARB/87/3, 30 ILM at 636 (citation omitted). According to Grotius, “[a]mong agreements which are equal in respect to the qualities mentioned, that should be given preference which is most specific and approaches most nearly to the subject in hand; for special provisions are ordinarily more effective than those that are general.” See DE JURE BELLI AC PACIS, bk. II, ch. XXIX; see generally G. HARASZTI, SOME FUNDAMENTAL PROBLEMS OF THE LAW OF TREATIES(1973).

22 1929 PCIJ (ser. A) Nos. 20/21, at 30.

23 Admission of a State to Membership in the United Nations, 1948 ICJ REP. 57, 64 (Advisory Opinion of May 28). In this case, the ICJ, when faced with the issue of determining the provision applicable to new members of the UN, applied the more specific provision (Art. 4) over the more general provision of the Charter (Art. 24).

24 This view is strengthened by the fact that the claimant did not make any submission on the national and most-favored-nation clauses of Article 4(1); nor did it contend that the clauses provided a basis for the respondent's liability.

25 See No. ARB/87/3, 30 ILM at 620, para. 92.

26 See Countermemorial of Government of Sri Lanka at 49, reprinted in id. at 623, para. 101.

27 See id. at 624, paras. 105-07.

28 1REPERTORY OF INTERNATIONAL ARBITRAL JURISPRUDENCE: 1794-1918, at 343, §1382 (V. Coussirat-Coustere & P. Eisemann eds. 1989).

29 Cf. Lillich, Interest in the Law of International Claims, in ESSAYS IN HONOUR OF VOITTOSAARIO AND Toivo SAINIO 51, 55-56 (Finnish Branch of the International Law Association, 1983).