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Home Archive for category "Mixed Arbitration"

Philip Morris v Uruguay: an affirmation of ‘Police Powers’ and ‘Regulatory Power in the Public Interest’ in International Investment Law

Published on July 28, 2016        Author: 

In recent years there has been criticism that international investment treaties and investor-State arbitration conducted under those treaties increasingly, and unacceptably, have encroached upon the legitimate uses of States’ regulatory power. These concerns have not only been expressed in scholarship, but have also been at the forefront of State negotiations in recent multilateral and bilateral trade and investment agreements (see, for example, the recent discussion by Anthea Roberts and Richard Braddock here on the China-Australia Free Trade Agreement). The concerns have led to policy proposals from States and international organisations for greater safeguards for States to be able to enact measures in the public interest without attracting liability under investment treaties.

Investor-State arbitration tribunals appear to be alive to these concerns. On 8 July 2016, a tribunal (constituted by Professor Piero Bernardini, Mr Gary Born and Judge James Crawford) convened pursuant to the Switzerland-Uruguay Bilateral Investment Treaty (‘BIT’) delivered an award which, by majority, upheld the legality of two tobacco-control measures enacted by the Uruguayan government for the purpose of protecting public health. The award contains an extensive analysis of the interaction between States’ regulatory powers to enact laws in the public interest and States’ obligations to protect and promote foreign investment within their territory. This post will focus on two aspects of the award that considered this interaction: the claim pursuant to Article 5 of the BIT (expropriation) and the claim pursuant to Article 3(2) (fair and equitable treatment or FET).

The challenged measures

The claim, brought by the Philip Morris group of tobacco companies against Uruguay, challenged two legislative measures. First, the claimants challenged a law that mandated a ‘single presentation requirement’ on cigarette packaging, such that different packaging or variants of cigarettes were prohibited.

Secondly, the claimants challenged a law that mandated an increase in the size of health warnings on cigarette packaging from 50 to 80% of the lower part of each of the main sides of a cigarette package (‘the 80/80 requirement’). As the the amicus brief submitted by the WHO and Framework Convention on Tobacco Control (‘FCTC’) Secretariat noted, large graphic and text health warnings are increasingly common on tobacco packaging globally and a number of States have enacted (or are considering enacting) laws with the aim of preventing misleading tobacco packaging, as is required of States parties to the FCTC (including Uruguay). Read the rest of this entry…

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International Arbitration: Heating Up or Under Pressure?

Published on March 11, 2014        Author: 

Dapo recently posted on this blog about the rise of inter-State cases before the PCA and predicted that “the current rise of inter-state arbitration will endure for some time“. Many readers will presumably be quite happy about the trend described: binding dispute resolution, if it happens, tends to make us international lawyers happy after all – so the more (cases) the merrier?

Interestingly, there is one branch of international law in which the debate currently seems take a different turn; in which the belief in binding dispute resolution is under attack – and in which many commentators, incl. many with an internationalist mindset and a keen desire for a rights-based global order, strongly feel that we have too much international arbitration. This is the field of investment law, in which the concept of investment arbitration has come under fire. Of course, this is an important debate for those interested in investment arbitration — academics, practitioners, companies, civil society, etc.  But, as importantly (if not more), it is also a debate that general international lawyers interested in dispute settlement should follow, and which I feel would benefit considerably if they did not leave it to the (pro- and anti-) investment communities. So this post is an attempt to introduce it to a wider audience and to encourage a wider debate. Within investment law, the debate has been going on for a while. However, over the past few months, it has suddenly heated up – and it has heated up in Europe, where the EU is formulating its investment policy. And this fresh start has opened up interesting spaces for debate. So what is it all about? Read the rest of this entry…

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Saar Papier v Poland: Comparative Public Law and the Second-Ever Investment Treaty Award

Published on February 3, 2014        Author: 

            Jarrod Hepburn is a Lecturer in Law at the University of Exeter, UK.

There has been much discussion in recent years – and in recent weeks on this blog – of the potential for investment treaty arbitration to benefit from a ‘comparative public law’ approach. In brief, the approach conceives of investment treaty arbitration as a form of public law, and calls for tribunals to draw on comparative domestic constitutional and administrative law, as well as other regimes of international public law such as WTO law and human rights law, to give content to the often vaguely-worded standards of typical investment treaties.

In the midst of contemporary enthusiasm for comparative public law, it is tempting to think that the approach is a new one that has been growing in prominence only over the last few years. However, this week brings news from Investment Arbitration Reporter that an UNCITRAL-rules investment treaty award dating from 1995, Saar Papier Vertriebs GmbH v Poland, has been unearthed. Amongst other aspects detailed by IAReporter, the case is particularly notable for its explicit use of domestic administrative law to interpret the provisions on indirect expropriation in the Germany-Poland BIT.

Indeed, this newly-uncovered investment treaty award – only the second ever (currently) known to be rendered, following AAPL v Sri Lanka in 1990 – contains intriguing indications that the comparative public law approach is a practically useful one for investment treaty arbitration. Furthermore, the age of this award raises the tempting view that, rather than being a new development in the field, comparative public law has been there all along.

However, as I discuss below, despite the treaty context of the claim, it is unclear whether the Saar Papier tribunal considered itself to be applying international law. Without this international law framework, it becomes more difficult to characterise the case as an instance of comparative public law at work. Read the rest of this entry…

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Kevin Heller’s Chevron Subpoena

Published on September 28, 2012        Author: 

Kevin tells the story here. Remarkably, the lawyers representing Chevron in its long-standing series of disputes with Ecuador issued a subpoena for information from Kevin’s Gmail account. Their only apparent reason for doing so was Kevin’s commentary on the case at Opinio Juris. Due to the ACLU’s intervention on Kevin’s behalf the subpoena request was dropped, but it is quite remarkable to see how the (overzealous?) lawyers for a party to a dispute used judicial process to such effect and did so without providing any justification, thus creating the impression that they did so in order to suppress academic commentary adverse to the interests of their client.

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Necessity in Investor-State Arbitration: The Sempra Annulment decision

Published on August 16, 2010        Author: 

Sahib Singh is a  member of the international litigation and arbitration group at Skadden and a visiting lecturer at the University of Vienna. This note was prepared before the Enron v. Argentina annulment decision became available at the beginning of August. A note on that case is forthcoming on EJIL: Talk!

On 29 June 2010, the ad hoc ICSID Annulment Committee annulled the initial award in Sempra Energy International v. Argentina, finding that the initial tribunal had exercised a manifest excess of powers. The decision is central to our understanding of necessity in international investment law, and particularly the relationship between necessity under Article XI of the Argentina-US BIT of 1991 and under customary international law. Unfortunately, the committee’s decision leaves much to be desired in terms of its interpretive methodology. The central critique of this post, is the degree of relevance the committee’s decision gives to necessity under customary international law when interpreting Article XI. It also questions the presumptive relevance of necessity under custom as an interpretive tool, when the latter can only apply if the investor does not hold substantive or procedural rights under the BIT.

Background

The investor-state arbitration awards concerning Argentina are, for the most part, centred on the Argentine financial crisis that hit the country in late 2001. As a consequence of the crisis, Argentina undertook specific regulatory measures which liquidated the value of foreign investments (the factual matrix is far more complex, but shall not be entered into here). In the spade of investment arbitrations brought by foreign investors, Argentina has argued that it is not liable under a range of BITs due to the defence of necessity. In regards to US investors, such arguments have fallen under both customary international law and Article XI of the Argentina-US BIT. The latter reads as follows:

‘This Treaty shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfilment of its obligations with respect to the maintenance or restoration of international peace and security, or the protection of its own essential security interests.’

Thus far six rulings have been made on the operation of necessity under Article XI and custom. Read the rest of this entry…

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The International Minimum Standard and Investment Law: The Proof is in the Pudding

Published on August 3, 2009        Author: 

A             Background

Fair and equitable treatment provisions are found in almost all bilateral and multilateral investment treaties and many international investment agreements. Throughout the course of the last decade, this treatment standard has been frequently invoked in investor-State arbitrations. Under its aegis, tribunals have developed a number of vaguely defined sub-categories, or what have been referred to as ‘facets’ or ‘components’ of the standard, such as the obligation of the State to refrain from acting in an arbitrary manner, to afford justice and due process to foreign investors, to act transparently, and to respect the legitimate expectations of the investor (see comment entitled ‘Fools Gold? Legitimate Expectations as Understood in Glamis Gold v USA). Despite such attention, the precise application of and relationship between these components remains vague and elusive.

The task of interpreting and applying fair and equitable treatment was made more complex by the following series of events.

In 1999, an American investor brought a claim under NAFTA‘s investor protection provisions. The investor alleged, inter alia, that Canada’s regulations with respect to the importation of softwood lumber violated Article 1105 of NAFTA. Article 1105(1) provides that ‘Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.’ At the time of the arbitration, trends in the decisions of arbitral tribunals favoured interpreting fair and equitable treatment provisions as either an autonomous treaty provision or a standalone principle found in customary international law. The tribunal favoured the former, finding for the investor, but leaving the question of damages to be assessed at later date by a new tribunal.

Following the decision, and in a dramatic twist, the NAFTA parties issued a joint interpretive note clarifying their view of both Article 1105, and fair and equitable treatment and full protection and security. The note read as follows:

Read the rest of this entry…

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Ecuador Denounces ICSID: Much Ado About Nothing?

Published on July 30, 2009        Author: 

Much has been made of Ecuador’s recent withdrawal from the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (‘ICSID’). The notice has the effect of terminating the jurisdiction of the Centre effective 7 January 2010. The most reported justification for this move is the perception in many Latin American countries that international investment arbitration is biased towards investors (see comment entitled ‘International Investment Arbitration: Poisoned at the Root?‘), and more specifically, outstanding international investment claims against Ecuador in the range of $10 to $12 billion US.

However, on review of Ecuador’s international legal position, and, more specifically, international legal obligations generated by her outstanding bilateral investment treaties, it seems that withdrawal from ICSID, whilst perhaps remaining a poignant political statement, offers less than might first be thought in terms of radical change with respect to the country’s exposure to investment claims.

Read the rest of this entry…

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