Investment Treaty Arbitration and International Law - Volume 3

Author: Ian A. Laird; Todd J. Weiler
Publisher: Juris Publishing
ISBN: 9781933833620
Published In: May 2010
Format: Paperback , 324 pages
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

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With this third volume of our series on formative issues in investment law and arbitration, our latest group of talented, young authors continues to meet the high standards set by their predecessors. In the Spring of 2009, our authors met with an experienced cast of discussants to delve deeply into four pressing topics which remain every bit as relevant today, as the 2010 conference date approaches.

Either of the first two topics, canvassed herein, could form the basis of a formidable manuscript. The first goes to the very nature of the international commercial arbitration model, as a means of dispute settlement for public international law issues involving State responsibility and the protection of foreign investment. The concept of consent is fundamental to international arbitration, but it can be elusive in practice. It is one thing to consent to the settlement of some future class of disputes in the abstract, upon signing the contract or implementing the treaty, but quite another when the day of disagreement arrives. The customary international law rules of treaty interpretation have evolved over many years so as to provide two or more States with a coherent and reliable means of construing the terms they chose when negotiating an agreement, despite the inherent contradiction that exists in giving binding, legal force to words of diplomacy, which are inherently vague by nature.

In the first section, below, our authors and panelists have added their respective contributions to better understanding the jurisdictional nexus between consent and treaty interpretation. In the second section, an issue is confronted that arguably lurks beneath all regulatory impairment claims: the question of whether – and if so, how – deference should be accorded to measures and the officials who supply and enforce them. Our authors tackle this topic using the lens of the European Community Law concept of margins of appreciation. As investment treaty tribunals proliferate, and the topics the address turn from ‘traditional expropriation’ claims to regulatory impairment claims, the question of whether a margin of appreciation should be observed will likely grow even more pressing.

The third section of this book contains contributions on a topic that is new to investment arbitration, albeit the concept is not uncommon within the municipal context: moral damages. While some treaty provisions expressly preclude tribunals from issuing an award on the grounds of moral damages, the very existence of cases in which moral damages have been awarded demonstrates the heterogeneity of the treaties under which investment treaty arbitrations take place.

The fourth section of this book arises from the that same fact of heterogeneity amongst treaty obligations, as well as the mechanisms for dispute settlement they contain. Arbitration is not ideally suited to serve as the basis for articulation and reinforcement of a set of binding norms. It is not intended for the production of rudiments for establishing some sort of common law of international investment. Rather, international arbitration is intended to provide an efficient, fair and binding means of resolving an isolated dispute between the parties to the arbitration, and only those parties. This final session of the 2009 conference was dedicated to better understanding expectations that have arisen for the conduct of investment treaty arbitration, on a systemic level.

Does it matter when two tribunals, seized of similar facts and authorised under similar treaty provisions, come to different conclusions? Do different conclusions have a deleterious impact upon the legitimacy of the system itself? The answer would appear to be that – just as beauty lies in the eyes of the beholder – legitimacy lies in whatever expectations are held for the successful operation of an investment treaty dispute settlement regime. One who seeks binding, individualised and internationalised settlement for his dispute with a Host state is not necessarily concerned with questions of law beyond those that apply directly to him or his affairs. For him, consistency and certainty could be obtained, for the individual investor, without having to go so far as to establish a grand, municipal tribunal to hear all treaty claims and appeals.

For those who prefer contemplating questions of systemic legitimacy and doctrine, however, the ad hoc method of investment treaty dispute settlement still leaves much to be desired. As alluded to in the discussion below, sometimes it is just as important to examine the expectations of such onlookers as it is to examine the doctrinal issues about which they complain.

The fifth, and final, section of this book contains a very considerate contribution from Prof. Jose Alzarez about the past, present and future of the investment treaty arbitration model. We remain grateful for Prof. Alvarez’s contribution, which provides a fitting end to another thought –provoking volume of essays written by rising stars in the field.

Introduction
    Ian Laird and Todd Weiler

CHAPTER 1
The Evolving BIT
    José E. Alvarez

PART I
CONSENT TO ARBITRATION

CHAPTER 2
"Consent" and the Jurisdiction of Investment Arbitrations: Are the Traditional Rules of Interpretation Still Relevant Today?
    Alexandre Vagenheim

CHAPTER 3
Consent to Arbitration as a Unilateral Act of State: In Search for a Non-Conventional Approach Towards Treaty Interpretation
    Yulia Andreeva

CHAPTER 4
"Consent" and the Jurisdiction of Investment Arbitrations, Are the Traditional Rules of Interpretation Still Relevant Today?
    Alexandre Vagenheim
    Yulia Andreeva
    Jean Kalicki
    Don Wallace
    Louis B. Kimmelman
    Oscar Garibaldi
    Tai-Heng Cheng
    Ian Laird
    Todd Weiler
PANEL DISCUSSION

PART II
THE MARGIN OF APPRECIATION DOCTRINE

CHAPTER 5
The Tractor in the Jungle: Why Investment Arbitration Tribunals Should Reject a Margin of Appreciation Doctrine
    Kassi D. Tallent

CHAPTER 6
Bowing to the Queen: Rejecting the Margin of Appreciation Doctrine in International Investment Arbitration
    Sarah Vasani

CHAPTER 7
Public Policy and the Interpretation of Substantive Standards and Protections: Is There a Place for Margins of Appreciation and Standards of Review in Applying International Investment Standards?
    Sarah Vasani
    Kassi Tallent
    Stephen L. Drymer
    Andrea Menaker
    Felix Weinacht
    Jonathan Sutcliffe
PANEL DISCUSSION

PART III
MORAL DAMAGES

CHAPTER 8
Moral Damages in Investment Arbitration and Public International Law
    Jennifer Cabrera

CHAPTER 9
Unexceptional Circumstances: Moral Damages in International Investment Law
    Wade M. Coriell and Silvia M. Marchili

CHAPTER 10
Should Moral Damages Be Compensable in Investment Arbitration?
    Jennifer A. Cabrera
    Wade M. Coriell
    Alex Wilbraham
    Hamid Gharavi
    Borzu Sabahi
    Mark Kantor
    Timothy G. Nelson
PANEL DISCUSSION

PART IV
LEGITIMACY AND CONSISTENCEY

CHAPTER 11
Legitimacy and Inconsistency: Is Investment Treaty Arbitration Broken and Can It be "Fixed"? Is the ICSID Annulment Mechanism Broken and Could It Be Improved?
    Christina Cathey Schuetz

CHAPTER 12
Legitimacy And Inconsistency: Is Investment Arbitration Broken And If So, Can Or Should It Be Fixed?
    Monica C. Fernandez-Fonseca
    Christina Cathey Schuetz
    Alexandre De Gramont
    Stanimir A. Alexandrov
    Charles H. Brower
    Joseph R. Profaizer
    Claudia Frutos-Peterson
PANEL DISCUSSION

About the Editors:

Ian A. Laird is a Special Legal Consultant in the International Dispute Resolution Group of Crowell & Moring LLP in Washington, DC. His practice is focused in the field of international investment law and arbitration. He is the co-founder and Editor-in-Chief of OUP Investmentclaims.com.

Todd J. Weiler is an independent arbitrator, counsel and expert on the NAFTA and investment treaty arbitration, and an adjunct professor at the University of Western Ontario Faculty of Law. In 1998, Mr. Weiler founded naftaclaims.com; in 2007 he co-founded investmentclaims.com; and in 2009 he was named to a special editorial committee responsible for the OGEMID forum and the Transnational Dispute Settlement web site.

Nina P. Mocheva is an investment policy and promotion specialist at the Investment Climate Department of the World Bank Group. She is also a consultant for IFC’s Alternative Dispute Resolution product development. Before joining the World Bank, she practiced with the International Arbitration and Litigation Groups of White & Case LLP in Washington, DC.

AUTHORS
José Alvarez, Hamilton Fish Professor of Law & Diplomacy, Columbia Law School
Yulia Andreeva, Associate, Debevoise & Plimpton LLP, New York
Jennifer Cabrera, Associate, Skadden, Arps, Slate, Meagher & Flom, New York
Wade M. Coriell, Partner, King & Spalding, Houston
Silvia M. Marchili, Foreign Legal Consultant, King & Spalding, Houston
Christina Cathey Schuetz, Associate, Clifford Chance, London
Kassi D. Tallent, Associate, Crowell & Moring LLP, Washington, D.C.
Alexandre Vagenheim, Associate, Castaldi Mourre & Partners, Paris, Lecturer, University Paris I Panthéon-Sorbonne
Sarah Vasani, Associate, King & Spalding LLP, Washington, D.C.

PANELISTS
Stanimir A. Alexandrov, Sidley & Austin LLP
Charles H. Brower, University of Mississippi School of Law
Tai-Heng Cheng, New York Law School and Houguet Newman Regal & Kenney LLP
Alexandre De Gramont, Crowell & Moring LLP
Stephen L. Drymer, Ogilvy Renault LLP
Monica C. Fernandez-Fonesca, Ministry of Foreing Trade of Costa Rica
Claudia Frutos-Peterson, Curtis, Mallet-Prevost, Colt & Mosle LLP
Oscar Garibaldi, Covington & Burling LLP
Hamid Gharavi, Derains Gharavi & Lazareff
Jean Kalicki, Arnold & Porter LLP
Mark Kantor, Independent Arbitrator
Louis B. Kimmelman, Allen & Overy LLP
Andrea Menaker, White & Case LLP
Timothy G. Nelson, Skadden, Arps, Slate, Meagher & Flom LLP
Joseph R. Profaizer, Paul, Hastings, Janofsky & Walker LLP
Borzu Sabahi, Fulbright & Jaworski LLP
Jonathan Sutcliffe, Fulbright & Jaworski LLP
Don Wallace, International Law Institute
Felix Weinacht, Milbank, Tweed, Hadley & McCloy LLP
Alex Wilbraham, Freshfields Bruckhaus Deringer LLP

Praise for the Investment Treaty Arbitration and International Law - Series:

"This volume is not for the beginner, nor was it meant to be. It does not provide answers to the many open and difficult questions in the area of investment treaty arbitration, for the simple reason that there are none. The publication is invaluable, however, for anyone who wishes to follow and understand the developments and the debates in this field. We look forward to the Third Annual Investment Treaty Arbitration Conference and the book that will come in its wake."

- Kaj Hóber, Partner, Mannheimer Swartling, Stockholm; Professor of International Law, Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP), University of Dundee.

"Todd Grierson Weiler, the guiding hand and organizer of the conference in Washington DC in 2007 which led to this book, has taken the traditional conference materials book and adopted the formula most brilliantly for the distinctive discipline that is investment treaty arbitration and international law. ...The papers are reproduced in full in the book and are products of much scholarship and hard work. These are not conference papers which one occasionally sees -- namely shorter presentation pieces designed for ready consumption by an audience -- rather they are highly thoughtful and challenging works which command careful reading. ...While the papers throughout do not always reflect the personal views of the authors -- they were assigned a thesis to advance/defend, much in the same way that one argues for a client's case regardless of personally-held views – the approach is a particularly important one and marks out the book's contribution to international law. ...This book represents and contains an important and contemporary contest of ideas and thoughts given by those who are in practice in this field.

This is not a book for the novitiate, nor is it a ready guide-book to investment treaty arbitration; this is a thought-provoking and substantial presentation of ideas in five particular topics and rightly deserves its place in the library of all who practice in this area. It is not a book for one to settle down and digest in one easy bite -- this book requires and commands time to properly consider. It is all the better for that attribute. Further volumes are awaited with much anticipation."

- Klaus Reichert, Brick Court Chambers is a Barrister and Chartered Arbitrator. He is Co-Chair of the IBA Litigation Committee, is a member of the LCIA European Users' Council, the ICC Commission on Arbitration, IBA delegate to the Hague Conference on Private International Law

"This is a very wide-ranging work that brings together several generations of legal specialists from very different cultures of law; it includes highly original, even brilliant contributions."

- Droit Et Pratique Des Investissements Internationaux - (International Investments Law And Practice)