The Observatory is an intergovernmental initiative to provide information and exchange of knowledge and experiences on investment arbitration. It also aims at creating equal conditions between investors and states so as to promote sustainable investment that respects state sovereignty.
The popularity of BITs in large parts of the developing world was due to a failure to appreciate their bite. Why would so many governments sign up to some of the most potent instruments in international economic law without even caring to check what the treaties meant?
Legality of investor–state dispute settlement (including in the form of an Investment Court System) in EU trade agreements under EU law is a contentious issue. This article details four legal objections raised by academics and legal experts, and discusses the potential for a legal challenge of ISDS under EU law.
Argentina and Ecuador are now well experienced in ISDS and have had some success in defending domestic interests from investor claims. Lessons from these prior experiences could benefit other countries, particularly in the developing world, as they devise their legal defence strategies.
This week’s climate change negotiations should inform many spheres of global governance—including international trade and investment policy. One of the most important trade and investment agreements is the Trans-Atlantic Trade and Investment Partnership (TTIP)—currently under negotiation between the European Union and United States—given the role it will likely play in establishing rules for the global economy in the 21st century.
Those that propose that the environment needs “more investment protection” are recommending a very long-term solution (of questionable efficacy) to what is essentially a short-term problem.
Bolivia enacts Law No. 708, or the Conciliation and Arbitration Law (LCyA). LCyA was enacted (i) to preserve the public interest and the free will of the parties, (ii) to provide legal security (predictability) to both the state and the investor (iii) in a framework of equality and equity for both.
Safeguarding Sustainable Development: Financing for Development and the International Investment Regime
Heads of state of the United Nations came together in late September 2015 to formally adopt the 2030 Agenda for Sustainable Development, including a set of 17 Sustainable Development Goals (SDGs). These goals, which comprehensively address the economic, environmental, and social dimensions of sustainable development, set out a new vision for the world. To achieve that vision, international financial systems will have to play their part.
The inaugural session of the Open-ended Intergovernmental Working Group for the Elaboration of an International Legally Binding Instrument on Transnational Corporations and Other Business Enterprises (TNCOBEs) with respect to Human Rights (the Working Group) marks the beginning of a process to negotiate a binding treaty on business and human rights.
The Brazilian Agreement on Cooperation and Facilitation of Investments (ACFI): A New Formula for International Investment Agreements?
Since the signing of the first Agreement on Cooperation and Facilitation of Investments (ACFI) by Brazil, in March 2015, English translations of the document and analyses of its innovative aspects have been published. The hidden question is: to what extent do Brazil’s ACFIs innovate in the regulation of foreign investments?
Access to water is the driving force behind the surge in foreign investment in farmland. Yet, with all the focus on “land grabbing” and food security, water issues have received little attention. It is vital to understand all applicable legal regimes and the rights of all stakeholders.
This paper provides an overview of how the European Union and the United States promote labour rights in trade and investment agreements. It then warns that language in the investment and regulatory coherence chapters may contradict the language in the labour rights chapters. Finally, the paper suggests ways that TTIP can be redesigned to benefit workers and promote employment, based on interviews with 23 eminent scholars as well as original ideas from the author.
The international investment agreement (IIA) regime is experiencing an unprecedented surge in public attention. Prime examples are the debates surrounding the conclusion of the Canada–European Union Comprehensive Trade and Investment Agreement (CETA) and the ongoing negotiations of the Transatlantic Trade and Investment Partnership Agreement between the United States and the European Union (TTIP). In Germany, […]
Investor–state dispute settlement (ISDS), a concept much unknown to the broader public and even top policy-makers only a year ago, is making headlines, especially as the European Union and the United States contemplate including the mechanism in the deal they are currently negotiating, the Transatlantic Trade and Investment Partnership (TTIP). Public awareness is growing of […]
More than 300 experts and delegates from member states, international organizations, NGOs, the private sector and academia attended the United Nations Conference on Trade and Development (UNCTAD) Meeting on the Transformation of the International Investment Agreement (IIA) Regime from February 25 to 27, 2015 in Geneva. Working in breakout and plenary sessions, the experts explored […]
The increasing concentration of wealth—often referred to as “the 1% issue”—raises serious concerns. The World Economic Forum, in its top ten trends of 2015, states: At the top of this year’s list is worsening income inequality. As the world’s rich continue to accumulate wealth at record rates, the middle class is struggling. Today, the top […]
The Brazil–Mozambique and Brazil–Angola Cooperation and Investment Facilitation Agreements (CIFAs): A Descriptive Overview
Brazil and Mozambique signed on March 30, 2015 the first Cooperation and Investment Facilitation Agreement (CIFA) based on Brazil’s new model bilateral investment treaty (BIT). The second was signed on April 1, 2015 between Brazil and Angola. Unlike traditional BITs, which are geared towards investor protection, the CIFAs focus primarily on cooperation and investment facilitation. They promote amicable ways to settle disputes and propose state–state dispute settlement as a backup; notably, they do not include provisions on investor–state arbitration.
China’s Antitrust Crackdown Hits Qualcomm with US$975 Million Fine: What Can Other Host States Learn from the Story?
In February 2015, Qualcomm Inc. (Qualcomm), the world’s leading cellular chip maker, headquartered in California, was ordered by the Chinese anti-monopoly authority to pay a fine of RMB 6.088 billion (approximately US$975 million) for antitrust offenses against Chinese consumers, following a 14-month-long investigation of the company’s anti-competitive practices. Seen by many as one of the […]
For policymakers charged with investment portfolios, the challenge is not simply about attracting greater flows of foreign direct investment (FDI). At least as important is trying to maximize the domestic economic and social benefits that result from those investments. This can be achieved with tax policies or targeted recruitment of specific investments with promising potential […]
The International Investment Regime at a Crossroad: Should We be Rethinking Foreign Investment Governance?
The international investment regime (IIR) has been in crisis since it attracted the attention of the international community in the early 2000s. This crisis began with awards like Metalclad v. Mexico and TECMED v. Mexico, where tribunals promoted the stability of the legal and business framework while seriously constraining the policy space of host states. […]
Tobacco companies are frequently turning to international trade and investment agreements as a tool to challenge domestic tobacco control measures. Cases to date include: Indonesia’s successful challenge before the World Trade Organization (WTO) of the U.S. exemption of menthol from its ban on flavoured cigarettes; the pending WTO claims by Cuba, the Dominican Republic, Honduras, Indonesia […]
Political Change vs. Legal Stability: Problems Arising from the Application of Investment Treaties in Transitions from Authoritarian Rule
Investment treaties protect foreign investors from a range of host state conduct that affects their investments. One influential view is that the purpose of these treaties is to provide legal stability for foreign investors. While this view is shared by arbitral tribunals, academic commentators, and lawyers acting for foreign investors, it finds relatively little support […]
Until recently, businesses in China seeking to make investments abroad had to go through a rigorous approval process separately conducted by two ministry-level agencies or their provincial counterparts. However, for many Chinese investors, especially those in the private sector, this unpopular approval process is becoming history as China’s outward investment regime has undergone a drastic […]
In Accordance with Which Host State Laws? Restoring the ‘Defence’ of Investor Illegality in Investment Arbitration
Investment treaties are often criticised for being too ‘investor-friendly.’ With this in mind, it becomes important to clarify the mechanisms available to host states to defend against investment treaty claims. One such mechanism is found in the provisions included in many investment treaties, to the effect that investors must comply with host state law in order for their investment to enjoy treaty protection.
Litigating Intellectual Property Rights in Investor-State Arbitration: From Plain Packaging to Patent Revocation
Enforcing intellectual property (IP) rights abroad is a difficult enterprise. International IP treaties have generally not created global, directly enforceable IP rights. Usually, the protection they confer cannot even be directly invoked in front of national courts. Rather, because of the territorial nature of IP protection, right holders must enforce their rights in local courts based on local laws. Litigating one’s IP rights abroad hence faces significant hurdles.
However, international investment law may offer some options to overcome these hurdles.
Who is Afraid of Investor-State Arbitration? Unpacking the Riddle of ‘No Greater Rights’ in the TTIP
The Trans-Atlantic Trade and Investment Partnership (TTIP) has been creating expectations and stirring fears ever since it was announced by EU Commission President José Manuel Barroso and US President Barack Obama in mid-2013. The promise to boost trans-Atlantic economic exchange in the world’s largest free-trade area came along with the aim to “include investment … […]
While there is a fair amount of scholarly work on the determinants of expropriation, we know less about the political and economic conditions under which the broader category of investor-state disputes take place. This article provides a statistical analysis of political and economic factors that contribute to the likelihood of an investor-state dispute; and a qualitative coding of measures which have resulted in arbitration cases.
On April 4, 2014, Bolivian President Evo Morales promulgated a law establishing the general legal and institutional framework to promote domestic and foreign investment in Bolivia, while contributing to socio-economic development. This note provides an overview and analysis of the main features of Bolivia’s new law, within the context of the country’s investment law and policy, and international trends.
Several States have terminated bilateral investment treaties as they came up for renewal. The effectiveness of BIT termination, however, is limited by the “survival clauses” that are frequently included in IIAs. These provisions state that even after the treaty is terminated it will continue to apply to investments that were made while the treaty was in force for an additional 10 or 15 years.
This brief article provides a critical examination of the tribunal’s decision in Garanti Koza LLP v. Turkmenistan, where the majority took a particularly expansive reading of the MFN clause in the United Kingdom-Turkmenistan BIT.
On January 24, 2014, an ICSID ad-hoc annulment committee dismissed a request by the Argentine Republic to annul a June 2011 arbitral award for harm suffered to an investment in a Buenos Aires water services concession. While this was one of the smaller awards rendered against Argentina, it is nonetheless of utmost significance for Argentina and all countries facing claims under investment treaties.
The recent Australian elections were decided mostly by domestic policy issues, but their outcome had an impact beyond the border as the new government decided to rethink Australia’s somewhat unique view on the international investment regime. In changing course, has the Australian government simply joined the rest of the world?
The International Institute for Sustainable Development studied seventy contracts between states and foreign investors involving long-term leases of farmland. We have come up with our own model contract that we believe answers many of these concerns.
The recent and ongoing trend towards corporate, especially foreign, investment in developing countries’ agricultural sectors has evoked sharply contrasting attitudes. For some, this “rediscovery” of agriculture as a focus of investment provides opportunities to again promote the sector within the larger agenda of economic development. For others, it has raised serious concerns about whether such investments, especially those involving large scale land acquisitions, are conducted in a manner which respects people’s rights, livelihoods and resources.
Investment treaty arbitrators have adopted a de facto policy of favouring parallel claims by declining to yield to contractually-agreed dispute settlement provisions. The policy is widespread among tribunals but appears out of step with judicial restraint based on principles of party autonomy, sanctity of contract, or the avoidance of parallel proceedings.
The system of international investment arbitration suffers from serious flaws. In South America, more than other regions, these failings are apparent from direct experience. Perhaps because so many countries in the region have faced multiple international investment arbitrations based on multi-million dollar claims for compensations, a number of alternatives to the current system of investment dispute resolution have been proposed by governments, multilateral institutions and academics.
State Liability for Regulatory Change: How International Investment Rules are Overriding Domestic Law
With governments around the world pushing efforts to negotiate and approve mega-investment treaties, it is important to be clear on just what these investment treaties do and do not mean. This article compares U.S. domestic law and international treaty rules on state liability for regulatory changes. It shows that arbitral tribunals have interpreted investment treaty rules in a manner far more favorable to the interests of investors than the approaches adopted in U.S. courts.
National investment boards or agencies operate in several countries with a view to attract foreign investment. Towards this objective, they often maintain websites highlighting the advantages of investing in their country. This article surveys some common categories of representations and promises made on the websites of national investment boards and discusses their potential legal implications.
Arbitrations by ConocoPhillips and ExxonMobil against Venezuela feature some of the largest claims ever to have been brought against a state by international investors. However, a careful reading of dispute’s factual background suggests that these claims bear little connection with the deals that these oil firms actually agreed to in Venezuela.
Threat of Pharmaceutical-Related IP Investment Rights in the Trans-Pacific Partnership Agreement: An Eli Lilly v. Canada Case Study
There are many reasons to strike the draft TPP Investment Chapter, a chapter that restricts government sovereignty to regulate business activities while simultaneously ceding de facto regulatory power to foreign investors and private arbitrators. The Eli Lilly claim against clarifies the risks of including IP rights in investment chapters and the boundary-pushing claims that can be brought on behalf of foreign pharmaceutical companies.
In July 2013, the United Nations Commission on International Trade Law (UNCITRAL) adopted a package of rules aiming to ensure transparency in investor-State arbitration, ratifying the work done by delegations to UNCITRAL—comprised of 55 Member States, additional observer States and observer organizations—over the course of nearly three years of negotiations. With the adoption of the new rules, there is now a carefully negotiated and widely approved template that can serve as a model for how to conduct investor-State arbitrations transparently.
The Draft Investment Chapter of the Canada-EU Comprehensive Economic and Trade Agreement: A Step Backwards for the EU and Canada?
This brief article describes some important aspects of the draft investment chapter of the Canada-EU CETA, as well as commentary on the potential implications should Canada and EU sign on to these provisions.
While the revision that gave birth to the United States’ Model bilateral investment treaty in April 2012 has been closely observed and commented upon, much less attention has been paid to changes made to the Canadian Model BIT.
The inclusion of market access commitments in investment agreements has proven divisive. This article looks at where China stannds on this issue.
China is often singled out as one of the big ‘land grabbers’, although it strongly refutes these claims. We set out to verify whether reports about Chinese investments were accurate or not.
A major challenge for investment treaty designers and adjudicators is to separate opportunistic behavior by host states that should be sanctioned under international law from bona fide public policy measures that should not. This article suggests that International Investment Agreements need to be both ‘smarter’ and more ‘flexible’ to better make that distinction. It draws on economic contract theory as a basic framework, and political economy theory for fine-tuning.
Enabling Risky Business: Human Rights and the Role of Officially Supported Trade Finance and Investment Guarantees
The expanded role played by Export Credit Agencies (ECAs) since the global financial crisis has not been matched with stronger rules that address the human rights-related impacts of ECA financed projects. Given narrow set of regulations that currently apply to ECAs, this brief article argues that more needs to be done to ensure that ECA financed projects do not cause harm to home states.
Very few BITs refer directly to human rights issues. However, when they do, they clearly do not impose any binding obligations on foreign corporations. The following paragraphs will provide a concrete analysis of how BITs could be drafted (or redrafted) to incorporate non-investment obligations.
While an extensive body of literature maps the tensions between regulatory sovereignty and investor protection in international investment law and analyses the balancing of private and public interests in arbitral practice, only a small sub-set of this literature makes reference to public interest considerations at the remedies stage of the investor-state arbitration process.