Arbitrator sharply critical of majority decision in Italian bondholder claim against Argentina Abaclat and Others (Case formerly known as Giovanna a Beccara and Others) v. Argentine Republic, ICSID Case No. […]
Resources Investment Treaties and Why They Matter to Sustainable Development: Questions and Answers International Institute for Sustainable Development, December 2011 This handbook provides an accessible introduction to investment treaties and […]
Philip Morris files for arbitration over intellectual property dispute with Australia The tobacco company Philip Morris filed for arbitration on 21 November 2011, claiming the government of Australia’s regulations on […]
Over the past two decades, stabilization provisions in investment contracts (and in the domestic law in some developing countries) became a popular demand of investors into developing countries. Rarely used […]
Principles for responsible contracts: Integrating the management of human rights risks into State-investor contract negotiations
The UN shines a spotlight on business and human rights In July 2005, the then United Nations Secretary-General Kofi Annan appointed John Ruggie as his Special Representative on Business and […]
The public began to hunger for information about investment in the agriculture sector when a massive wave of foreign investment in farmland and water was triggered, in 2008, by a […]
The oil and gas industry faces increasingly strict environmental standards in developed countries. However, the majority of the world’s proven oil reserves are in developing countries and economies in transition, […]
More legal woes for Canada’s Feed-in Tariff program for renewable energy Canada could soon be faced with arbitration for alleged breach of its obligations under the North American Free Trade […]
Mass claim in Argentine bond dispute is granted ICSID jurisdiction Abaclat and Others (Case formerly known as Giovanna A Beccara and Others) and The Argentine Republic, Decision on Jurisdiction and […]
Resources International Investment Arbitration and Public Policy website launched A website launched in late September, called International Investment Arbitration and Public Policy (IIAPP), offers a searchable database of materials in […]
One of the more politically controversial aspects of international investment protection treaties is the liability of a State when political sub-divisions are found to have breached that State’s treaty obligations […]
Swiss claimant fails jurisdictional stage for not qualifying as an ‘investor’ Alps Finance and Trade AG v. Slovak Republic Damon Vis-Dunbar A claim against the government of Slovakia has failed […]
Canada and Dow Chemical settle claim over pesticide ban A controversial NAFTA investment dispute between Dow AgroSciences and the government of Canada was settled this May. The settlement agreement involves […]
Recent Publications Foreign Direct Investment in LDCs: Lessons Learned from the Decade 2001-2010 and the Way Forward UNCTAD, April 2011 This report, prepared in preparation of the Fourth United Nations […]
Two international projects relating to foreign investment and sustainable development (SD) were completed in the past two months. These two projects individually and together show the emerging pathways to properly […]
Philip Morris v. Uruguay: Will investor-State arbitration send restrictions on tobacco marketing up in smoke?
For nearly two decades, the tobacco industry has used international investment rules to challenge governmentrestrictions on cigarette marketing. In 1994, R.J. Reynolds Tobacco Company threatened to bring a claim under […]
PDF – English (560 KB) – Français (550 KB) – Español (550 KB) Flip-Page – English – Français – Español In this issue: Philip Morris v. Uruguay: Will investor-state arbitration send restrictions on […]
Investment arbitration and the Canada-EU Comprehensive Economic and Trade Agreement: Time for a change?
With the seventh round of negotiations between Canada and the European Union over the Canada-EU Comprehensive Economic and Trade Agreement (CETA) completed this April, and the eighth round scheduled for […]
While the EU member states insist on the status quo, the European Parliament calls for a reformed European investment policy
The Lisbon Treaty, in force since 1 December 2009, added Foreign Direct Investment (FDI) to the exclusive common commercial policy of the European Union, without foreseeing any transition measures. Today […]
Working group moves slowly on agreement for transparency in UNCITRAL Arbitration Rules A working group of the United Nations Commission on International Trade Law (UNCITRAL) met from 7-11 February 2011 […]
UK firm victorious in dispute with Russia, but damages much less than claimed RosInvestCo UK Ltd. v. The Russian Federation, SCC Case No. Arb. V079/2005 Lise Johnson In an award […]
Publications Newly published UNCTAD Series on Issues in International Investment Agreements II “Scope and Definition”, UNCTAD, March 2011 A new UNCTAD study titled “Scope and Definition” reviews how the concepts […]
The problem of moral hazard and its implications for the protection of ‘legitimate expectations’ under the fair and equitable treatment standard
While the concepts of sovereignty, human rights, the environment and the rule of law are often invoked in public debate about international investment treaties (IITs), there is relatively little discussion of the economic effects of such treaties. One of the most powerful legal protections provided by IITs is the protection of foreign investor’s ‘legitimate expectations’ under fair and equitable treatment (FET) provisions, which are common to most IITs. This article draws on economic theory—specifically, the notion of moral hazard—to elucidate some of the problems with broader interpretations of the doctrine of legitimate expectations.
The last two decades have witnessed an exponential increase in arbitral disputes between investors and states under international investment treaties. UNCTAD reports 357 known registered cases by the end of 2009; of those, 202 cases—or 57 percent—were initiated after 2004. Independent investment tribunals now regularly render binding decisions as to whether states have violated investment protection standards guaranteed under various bilateral and multilateral investment treaties—a phenomenon that has turned international investment law into one of the most dynamic fields of public international law.
Reforming United States trade and investment treaties for financial stability: The case of capital controls
This short essay discusses new evidence in the economics profession showing that capital controls are important macro-prudential measures that nations should have in their toolkit to prevent and mitigate financial crises. More importantly for this publication, it will be shown that United States trade and investment treaties do not reflect the emerging consensus on capital controls. There is a unique opportunity to rectify this problem as the United States finalizes its new model bilateral investment treaty (BIT) and moves forward on negotiations for a Trans-Pacific Partnership Agreement (TPP) with numerous Pacific Rim nations. Moreover, an opportunity for reform lies in the pending Congressional votes on Bush-era trade deals such as those with South Korea, Colombia, and Panama.
To a significant extent the site of debate about the terms of globalization and its relationship to the regulatory state has shifted from the World Trade Organization to the world of investment treaties and arbitration. Investment treaties typically confer on a foreign investor a right to sue a host state that has allegedly failed to comply with a number of substantive obligations, typical among them the requirement to compensate for expropriation, fair and equitable treatment, and national treatment.
English (PDF – 400 KB) – Français (PDF – 400 KB) – Español (PDF – 400 KB) In this issue: 2010 midterm congressional elections on the United States; Fairness and […]
2010 midterm congressional elections in the United States: Implications for new U.S. International Investment Agreements
The Republican victories in U.S. congressional elections on 2 November 2010 are widely assumed to have increased the odds that the Obama administration will proceed with new bilateral investment treaties (BITs) and free trade agreements (FTAs) containing investment chapters. But this assumption bear closer examination. The post-election situation is complex.
UNCTAD’s 2010 World Investment Forum: High-level experts discuss investment policies for sustainable development
The 2010 World Investment Forum (WIF), held on 6-9 September 2010, in Xiamen, China, turned UNCTAD into the global gravity center for open, universal, inclusive and high-level international investment discourse and policy formation. Eight events and conferences were attended by more than 1,800 participants from 120 countries and 16 international organisations, among them nine heads of State, four heads of international organisations, 79 ministerial-level officials, and 116 senior business executives.
European Union institutions consider the EU’s future international investment policy Debate on the future of the European Union’s international investment policy is heating up as EU institutions weigh in with […]
Georgia loses dispute with Greek and Israeli oil investors Ioannis Kardassopoulos and Ron Fuchs v. The Republic of Georgia (ICSID Case Nos. ARB/05/18 and ARB/07/15) Martin D. Brauch Two oil […]
Fairness and independence in investment arbitration: A critique of «Development and Outcomes of Investment Treaty Arbitration»
There has been recent interest in the use of quantitative research tools to evaluate the fairness and independence of investment arbitration. In this article, Professor Gus Van Harten critiques one of the most prominent studies to examine this question. While the study in question, “Development and Outcomes of Investment Treaty Arbitration” (2009), has been used in some policy circles to support the argument that investment arbitration functions fairly, Van Harten argues it has limitations that prevent such conclusions.
It is no longer a secret that there is a new wave of foreign investment in farmland, predominantly in Africa. An explosion of media reports and a series of studies by the World Bank, Food and Agricultural Organisation (FAO), International Fund for Agricultural Development (IFAD), United Nations Conference on Trade and Development (UNCTAD) and International Institute for Environment and Development (IIED), have confirmed the scale and consequences of this new influx of foreign investment. The World Bank report, by far the most comprehensive, found that reported deals amounted to 45 million hectares in 2009 alone.
Recent Publications The EU Approach to International Investment Policy after the Lisbon Treaty European Commission Directorate-General for Exernal Policies, Policy Department, 2010 This report provides analysis on the challenges and […]
*These are abridged versions of articles originally published by the independent news service Investment Arbitration Reporter (http://www.iareporter.com/). They are used with permission and may not be reproduced without the […]
Public Statement on the International Investment Regime Academics from 30 universities across 11 countries have lent their signature to a statement pronouncing concern that the international investment regime hampers the […]
Argentina on the hook for breach of Fair and Equitable Treatment Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal v. Argentine Republic (ICSID Case No. ARB/03/19) Lise […]
One fundamental principle of investor-State arbitration is the ability of parties to have their disputes resolved by independent and impartial arbitrators. In order to ensure adherence to this principle, laws and rules governing investor-State arbitrations grant parties the right to challenge arbitrators lacking these qualifications. Given the importance of ensuring arbitrator independence and impartiality, and as evidenced by the recent decision in and subsequent commentary on Vivendi v. Argentina, practitioners and stakeholders in investor-State arbitrations are devoting significant efforts to defining the substantive standards warranting arbitrator challenges, and to understanding what those standards require in practice.
With the often costly and far-reaching implications when investors use Bilateral Investment Treaties (BITs) to adjudicate claims against developing countries, governments in the developing world need powerful arguments to justify that these treaties are in their national interest. One notable contribution to this debate has recently been put forth by political scientists Jennifer Tobin and Mark Busch, who set out to investigate the link between BITs and preferential trade agreements (PTAs). Using statistical techniques, they analyse annual data on pairs of developing and developed countries between 1960 and 2004 and conclude that BITs «raise the prospects of getting a North-South PTA with all the deeper and reciprocal obligations that these entail.»
Arbitrator appointments in investment arbitration: Why expressed views on points of law should be challengeable
Tony Cole The aspect of international investment arbitration that is perhaps most consistently condemned by critics of the system is the role played in the resolution of investment disputes by […]
Ignacio Torterola In October, State delegations are expected to discuss the issue of transparency in the UNCITRAL Rules of Arbitration. Ignacio Torterola, ICSID Liaison at the Argentine Embassy in Washington, […]
IISD In October 2009, at its annual meeting in Madrid, the Mining Law Committee of the International Bar Association launched a project to develop a Model Mining Development Agreement (MMDA). […]
Ramon Torrent The Lisbon Treaty broadens European commercial policy in what marks the latest milestone in a long (and unfinished) journey in which the EC/EU has sought to extend its […]
Reclaiming the public interest in Europe’s international investment policy: Will the future EU BITs be any better than the 1200 existing BITs of EU member states?
The Lisbon Treaty has shifted the competence related to Foreign Direct Investments (FDI) from the European Union Member States to the Union and has added it to the Union’s exclusive common commercial policy. This transfer of competence not only requires the development of a common EU investment policy, but also legislative steps to clarify the status of the 1200 existing Bilateral Investment Treaties (BITs) of the EU Member States and their ongoing BIT negotiations. This offers a unique opportunity for an assessment of the existing BITs and for an open and broad discussion on the future European international investment policy.
Towards a comprehensive European international investment policy: An interview with Tomas Baert, European Commission, Directorate General for Trade, Services and Investment
With the EU’s Lisbon Treaty granting the European Union competence over Foreign Direct Investment, the European Commission released two documents in July that help chart the way forward: a draft […]
By Fernando Cabrera Diaz May 11, 2010 Tobacco giant Philip Morris International (PMI) has initiated an ICSID arbitration against Uruguay over new rules requiring that 80% of cigarette pack surfaces […]
By Fernando Cabrera Diaz May 11, 2010 An ad hoc tribunal under UNCTIRAL Rules has awarded German investor Walter Bau AG more than 30 million Euros in its claim against […]
By Elizabeth Whitsitt May 11, 2010 On March 19, 2010 two members of an ICSID arbitral tribunal – the Honourable Davis R. Robinson (President) and Dr. Stanimir A. Alexandrov – […]
By Fernando Cabrera Diaz May 11, 2010 Anglo-Argentinean energy firm Pan American Energy (PAE) has initiated arbitration against Bolivia over the nationalization of its subsidiary Chaco Petroleum by the Morales […]
American gas services firm Exterran files for arbitration against Venezuela over nationalized assets
By Fernando Cabrera Diaz May 11, 2010 (NOTE: A correction has been made to this article. An explanation is posted below) Houston-based Exterran Holdings has taken Venezuela to ICSID over […]