Germany’s position on international investment law and investor-State arbitration is attracting increasing attention since the signing of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) in September 2014 has been deferred, inter alia, because of opposition from Sigmar Gabriel, Germany’s Federal Minister for Economic Affairs and Energy. Is Germany, the country that not only has concluded the first bilateral investment treaty (BIT) in 1959 but also has the densest network of BITs worldwide, as some fear, joining the coalition of critics in fundamentally reversing its international investment policy?
Mounting Criticism of International Investment Law in Germany in Context
The Inaugural Conference of the European Federation for Investment Law and Arbitration (EFILA) took place on Friday, 23 January 2015, in the Senate House of the Queen Mary University of London. 160 participants ranging from academics, arbitrators, arbitration institutions, companies, lawyers to NGOs reviewed a full day long the EU’s first 5 years of European investment policy.
The conference was kicked off by the first panel which immediately dived into the fundamentals, namely, the pros and cons of the existing investor-state dispute settlement system (ISDS). The range of the critique was broad spanning from essentially leaving it to arbitral tribunals to find the right balance, over possi [...]
In one of the very rare decisions issued by courts in the Arab world applying the provisions of the Unified Agreement for the Investment of Arab Capital in the Arab States (the “UAIAC”), the Cairo Court of Appeal has revived in its decision dated February 5, 2014, the principle of finality of arbitration awards, by which it rejected a claim for annulment of a UAIAC award, filed by the State of Libya (first claimant to annulment), the Libyan ministries of Economy and Finance (second and third claimants) and the General Authority for encouraging investments (fourth claimant), against a kuwaiti investor, Al-Kharafi & Sons Co. (case n° 39, judicial year 130/2014). The ratio decidendi of the cou [...]
Paraphrasing Churchill, investment arbitration is the worst form of foreign investment dispute resolution, except for all the others. Post-Suez, governments are more civilised than to employ gunboat diplomacy for their own investors, and local courts are inherently partial. Achieving neutrality is the objective, and the only means: investment arbitration. This is the conventional wisdom for rationalising the use of arbitration for foreign investment disputes.
Investment arbitration is imperfect. An oft-cited cause of this imperfection is doctrinal inconsistency, with an ICSID appellate body being trumpeted as the antidote. Partiality of arbitrators, propensity to annul decisions, and la [...]
One of the recurrent controversial issues in the investment arbitration practice relates to the application of the general rule of treaty interpretation of the Vienna Convention on the Law of Treaties in the interpretation of the provisions of the ICSID Convention and of investment treaties in general.
Thomas Wälde in one of his last writings pointed out that “[t]ribunals often do not practise what they preach; reference to the Vienna Rules is now mandatory, but such reference does not mean the Rules are taken and applied seriously” and “it is difficult to find a tribunal which formally and properly applied the Vienna Rules step by step” (Interpreting Investment Treaties: Experience [...]
Indonesia is not the only Asia-Pacific nation that is reassessing investment treaties containing provisions on Investor-State Dispute Settlement (ISDS, especially arbitration). India announced a review in 2013, partly in the wake of the successful claim from an Australian mining investor, although the impact in practice is hard to discern or predict – especially under the new Modi government. In both countries, the reviews may also have been linked to domestic politics during election years.
More surprisingly, public debate over ISDS has resurfaced in Australia. For the political left, it really began when Philip Morris Asia announced in 2010 that it would claim under a 1992 treaty with Ho [...]