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A Question of Democracy: The German Debate on International Investment Law.

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

A [...]

Should Investment Treaties Have Their Own Rules of Interpretation?

and Mitchell Moranis, WilmerHale

As discussed recently in this forum, the Vienna Convention on the Law of Treaties is the prevailing mechanism for the interpretation of investment treaties (Interpreting Investment Treaties, Roberto Castro de Figueiredo, 21 Oct. 2014). The Vienna Convention, however, was adopted in May 1969. According to the ICSID Database of Bilateral Investment Treaties, there existed 77 BITs at that time. Today there are roughly three thousand investment agreements.

This number – three thousand – makes the investment treaty regime unique. Most treaties are singular within their respective field: there is one Convention on the Law of the Sea, one Rome Statute. In t [...]

The Compensation Standard for FET Breaches: The Far Limits of Legal Analogy

One of the fundamental issues of investment cases – apparently more frivolous than the strictly legal battles – takes the form of debates over the applicable compensation standard. Historically speaking, the problem was mainly put forth for breaches of Bilateral Investment Treaties that referred to expropriatory behaviors of signatory states. Therefore, if this specific type of breach initially attracted a customary international law approach (as the Treaty remained silent on such issues), it gradually evolved in a ‘positivist’ manner, strictly reflected and comprised in the invoked Treaty.

This only became possible in the aftermath of the 20th century legal dilemma regarding the amp [...]

EU Law and Investment Law: Two Worlds Apart?

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 [...]

Are a Bilateral Investment Treaty Arbitration and a Proceeding Before the European Court of Human Rights Compatible?

Although a bilateral investment treaty (“BIT”) arbitration and an application made before the European Court of Human Rights (“the Court”) could, at first glance, present opposite objectives, investors alleging a violation of their rights by a State may be inclined to make use of both remedies. As it will be elaborated below, the case law shows that a strict application of the triple identity test (i.e. same parties, same facts, same cause of action) by the arbitral tribunals and the Court generally entails the rejection of lis pendens or admissibility objections based on BITs’ “fork in the road” provisions or Article 35, §2, b) of the Convention, which provides that the Court [...]

“Investment Arbitration Is Now On Broadway, And The Critics Are Not Being Kind”

That was the assessment of Constantine Partasides QC, founding partner of Three Crowns, during his keynote address to the joint ITA-IEL conference. According to Mr. Partasides, there is a developing consensus among states that it is acceptable, and even virtuous, to challenge investor-state arbitration as an infringement on the rights of the public to pass laws through their democratically-elected representatives. Thus it has become de rigueur for a sovereign to challenge and obstruct the arbitral process, through challenges to the appointed arbitrators, jurisdictional objections, and post-award challenges to awards and their enforcement. Resistance to investor-state arbitration is increa [...]

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