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Arbitration Under International Investment Agreements - A Guide to the Key Issues, 2nd Edition edited by Yannaca-Small, Katia (19th July 2018)

Part VI The Post-Award Phase, 30 A Practical Guide: Research Tools in International Investment Law

Julien Fouret

From: Arbitration Under International Investment Agreements: A Guide to the Key Issues (2nd Edition)

Edited By: Katia Yannaca-Small

Subject(s):
Treaties, interpretation — General principles of international law

(p. 823) 30  A Practical Guide

Research Tools in International Investment Law

I.  Introduction

30.01  This chapter aims to help the new investment arbitration practitioner identify and find the main legal sources for dealing with international investment law issues.

30.02  International investment law has been referred to as a ménage à trois: the state, the foreign investor, and international law.1 As contrasted with ‘pure’ commercial arbitration, the law and the applicable norms are mostly grounded in rules deriving from public international law, sometimes supplemented by the domestic law of the host state.2

30.03  Three different topics need to be addressed in order to cover, as extensively as possible, the legal issues generally raised during an arbitration based on an international investment agreement (IIA), whether a BIT, a multilateral investment protection treaty, or the investment chapter of a broader international agreement such as a preferential trade agreement.

30.04  First, even though the stare decisis rule does not exist in international arbitration, including investment arbitration, previous rulings are often used and analysed by arbitrators.3 As put by one tribunal, it ‘is not bound by earlier decisions, but will certainly carefully consider such (p. 824) decisions whenever appropriate’.4 Hence, the first section will be devoted to listing the tools to retrieve arbitral and public international case law.

30.05  Secondly, when dealing with investment arbitration, it is likely that the claim will be treaty-based. For example, in the first semester of 2017, the ICSID Secretariat registered twenty-two new cases, all of them based on either a bilateral investment treaty, or other form of bilateral or multilateral treaty, often generically referred to in the literature as international investment agreements, or IIAs.5 Therefore, the second section will be devoted to the relevant aspects of the law of treaties, such as the principles of interpretation, as well as sources to identify relevant treaties.

30.06  Finally, but most importantly, in international investment disputes, arbitral tribunals rely on all the sources of public international law identified in Article 38(1) of the Statute of the International Court of Justice (ICJ), which provides for the rules of that Court to apply:

  1. a.  international conventions, whether general or particular, establishing rules expressly recognized by the contesting states;

  2. b.  international custom, as evidence of a general practice accepted as law;

  3. c.  the general principles of law recognized by civilized nations;

  4. d.  subject to the provisions of Article 59,6 judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.

30.07  Principally relying on the first source of international norms, as their jurisdiction is usually based on BITs or other IIAs, these tribunals also need to apply norms deriving from customary international law to define certain general principles, which are not usually mentioned in the treaty. The third section will thus be entirely devoted to this source of public international law.

II.  Arbitral Case Law and Public International Case Law

30.08  The present section lists the main sources for investment arbitration case law, as well as in public international law in general in Table 30.1. Then, in Table 30.2, it identifies the main law journal reviews for this arbitral case law.

A.  Case Law

30.09 

Table 30.1  Main sources for investment arbitration case law and public international law

Source and Content

Website Address

Investment Arbitration

ICSID:

http://icsid.worldbank.org

  • •  Historical data concerning all the cases since the creation of the Centre, including a list of all the pending and concluded cases with the composition of the tribunals.

  • •  Excerpts of ICSID awards

  • (p. 825) •  Text of the ICSID awards, when both parties have accepted their publication, as well as procedural ICSID Statistical Reports decisions.

  • •  ICSID Statistical Reports published bi-annually.

  • •  Background papers

  • •  Practice Notes for Respondents

Investment Arbitration Reporter:

http://www.iareporter.com

  • •  A reporting service provided via an investment newsletter, edited by a team under the supervision of Luke Peterson.

  • •  Provides factual elements related to past, pending, and future proceedings in international investment arbitration and international investment law in general.

  • •  Provides concise analysis of each of the reported cases and in-depth analysis of the most important ones.

Investment Claims:

http://www.invest-mentclaims.com

  • •  Text of all publicly available investment arbitration decisions and awards: ICSID, UNCITRAL, SCC, OPIC, and ICC.

  • •  Text of annulment and challenge decisions before National Courts.

  • •  Contributions of various others on various subjects of interest or ‘hot topics’.

ITA Law:

http://italaw.com

  • •  Text of all publicly available investment arbitration decisions and awards based on investment treaties only: ICSID, UNCITRAL, SCC, and ICC.

  • •  Text of annulment and challenge decisions before National Courts.

  • •  Database of publicly available expert legal opinions, statements, and affidavits.

Investor-State Law Guide:

https://www.investorstatelawguide.com/

  • •  A comprehensive database with all materials publicly available on ICSID, NAFTA, and ad hoc tribunals’ decisions.

  • •  A contextual and intuitive research tool in all available documentation on the website linking to specific passages of decisions/documents discussion a particular issue, prior decisions or specific legal instrument.

Iran–United States Claims tribunal:

http://www.iusct.com

  • •  Comprehensive database of the published decisions rendered by the tribunal, established on the basis of the Algiers Accord of 1981.

UNCTAD Investment Dispute Settlement Navigator:

http://investmentpolicyhub.unctad.org/ISDS

  • •  Database providing, among other things, updated information on pending and concluded cases, their main legal issues and links to the full text of decisions if published.

(p. 826) Public International Law

International Court of Justice:

http://www.icj-cij.org

  • •  Judgments and orders of the ICJ since its creation, as well as all the parties’ oral and written pleadings.

  • •  Judgments and orders of the Permanent Court of International Justice, the predecessor of the ICJ.

Permanent Court of Arbitration:

http://www.pca-cpa.org/law/riaa

  • •  Awards and other information (pleadings … ) in proceedings under PCA auspices where the parties have so agreed. These include investment arbitration awards as well as purely public international law cases. These awards date back to 1902.

U.N. Reports of International Arbitral Awards (UNRIAA):

http://legal.un.org/riaa/

  • •  Electronic version of the 25 volumes of the UNRIAA.

  • •  Includes awards rendered between states and between states and international organizations.

  • •  These decisions were rendered by ad hoc tribunals or by mixed and international compensation commissions.

B.  Journal Reviews of Investment Arbitration Case Law

30.10  The rapid growth of investment arbitration and its case law has led to a multiplicity of recurring journal reviews dealing with the subject matter. Each of these has different specificities, which are listed below. All of these reviews are useful to any practitioner wishing to have a global overview of the case law for a given period of time. We have only selected a few of them below.

Table 30.2  Main law journal reviews for arbitral case law cited in Table 30.1.

References

Content

Cahiers de l’Arbitrage

I. Fadlallah, C. Leben & E. Teynier eds., ‘Investissements internationaux et arbitrage’

Since 2003, a selected review of the year’s investment arbitral case law. It is organized by themes—notion of investment, of investor—in which each contributor analyses the relevant decisions.

German Yearbook of International Law

R. Happ & N. Rubins, ‘Awards and Decisions of ICSID Tribunals’

Since 2003, a descriptive review of ICSID case law with summaries of most of the cases rendered each year.a

Journal du Droit International

B. Rémy, ‘Centre international pour le règlement des différends relatifs aux investissements (C.I.R.D.I.): chronique des sentences arbitrales’

Since 1986, this review originally done by E. Gaillard, includes a selected number of awards translated into French and then commented upon. It is always preceded by a general introduction on the year’s developments in international investment law.b

(p. 827) Law and Practice of International Courts and Tribunals

J. Fouret & D. Khayat, ‘ICSID Case Law Review’

Since 2012, exhaustive ICSID case law review. Every published decision during a given period of time is analysed and commented as well as compared with previous case law and doctrinal statements. It is always preceded by a short introduction on the latest developments of ICSID.

Revue de Droit des Affaires Internationales–International Business Law Journal

W. Ben Hamida & F. Horchani, ‘Droit et pratique des investissements internationaux’

Since 2007, this descriptive review aims at giving a rapid overview, every four months, of the recent developments in international investment law. It deals both with case law and with other recent news in international investment law.

Revue Québécoise de Droit International

J. Fouret & D. Khayat, ‘Centre international pour le règlement des différends relatifs aux investissements (CIRDI)’

From 2002–2009, exhaustive ICSID case law review. Every published decision during a given period of time is analysed and commented upon, as well as compared with previous case law and doctrinal statements. It is always preceded by a short introduction on the latest developments of ICSID.c

a  This review was gathered in a monograph in 2009, which includes the reviews from 2003 to 2007. See R. Happ & N. Rubins, Digest of ICSID Awards and Decisions, 2003–2007 (2009).

b  This review was gathered in a monograph in 2004, which includes the reviews from 1986 to 2003. as well as commentary on one award of 2004: see E. Gaillard, La Jurisprudence du CIRDI (2004).

c  This review was gathered in a monograph in 2009, which includes the reviews from 2002 to 2007. See J. Fouret & D. Khayat, Recueil des Commentaires des Décisions du CIRDI (2002–2007) (2009).

III.  International Treaties: Identification and Interpretation

30.11  When a practitioner is faced with a potential investment arbitration, it is likely that the basis of the tribunal’s jurisdiction will be a BIT concluded between the investor’s state and the host state of the investment. Some multilateral instruments also provide for investment arbitration, and most of them are identified in the next section, a table listing the sources for identifying and obtaining the text of the relevant treaties (Table 30.3). One also needs to remember that many countries keep their own treaty databases, either general or solely devoted to investment treaties.7 However, nothing replaces a thorough verification in the country involved, as the official authorities might be the only ones to possess the information about the entry into force of an instrument. Past arbitral experience has shown that databases are the necessary first step but not the last one that should be undertaken if one wants to verify the existence of the applicable treaty exhaustively. Following Table 30.3 is a (p. 828) section explaining and highlighting the relevant rules of treaty interpretation which need to be applied in investment arbitration proceedings.

A.  Resources to Identify Investment Treaties

30.12 

Table 30.3  Sources for identifying and obtaining the text of the relevant multilateral instruments that provide for investment arbitration

Source and Content

Address

ECT Secretariat:

www.encharter.org

  • •  Text of the Energy Charter Treaty.

  • •  Text of all the preceding agreements.

  • •  News about the disputes based on the ECT.

History of the ICSID Convention

History of the ICSID Convention

  • •  The entire negotiation and drafting history of the Washington Convention published by ICSID.

Volumes I & II published by the ICSID Secretariat in English, French, and Spanish. Published in 1970 and republished since.

ICSID:

http://icsid.worldbank.org

  • •  Text of the Washington Convention and of all the arbitration, mediation and administrative regulations and rules.

  • •  Report of the World Bank Executive Directors.

  • •  Text of the Additional Facility Rules.

  • •  List of BITs.

Investment Treaties:

  • •  This ICSID publication contains the texts of BITs concluded by more than 165 countries. It is continuously updated.

Investment Promotion and Protection Treaties (ten loose-leaf volumes) (Oxford University Press)

ITA Law:

http://italaw.com

  • •  Model BITs of a number of countries.

  • •  List of websites to find BITs, either institutional or national.

NAFTA Secretariat:

http://www.nafta-sec-alena.org

  • •  All the legal texts pertaining to NAFTA in French, English, and Spanish.

UNCTAD–Investment Policy Hub:

http://investmentpolicyhub.unctad.org/

  • •  Regularly updated list of the BITs concluded by countries as well as Investment Laws.

  • •  Full text database of more than 2000 BITs. The most comprehensive database on the subject.

(p. 829) B.  Fundamental Rules of Treaty Interpretation in Public International Law

30.13  As opposed to international commercial arbitration, where the usual contractual means of interpretation—mainly derived from domestic legal orders—are applicable, investment arbitration is usually based on treaties. The principles of interpretation are public international law principles, wholly disconnected from the national legal orders. The substance of these rules is also far from being the same as for contractual commercial arbitration. This sub-section presents the main elements and the framework of interpretation to understand the basis of most investment arbitration cases.

30.14  It should first be noted that treaties are the first source mentioned in Article 38 of the Statute of the ICJ,8 and for a reason: ‘[t]reaties are … the first place to look in order to determine a state’s rights and duties’.9 At least two-thirds of the cases are based on a BIT or other IIAs. As the ICJ has constantly affirmed, when faced with a treaty: ‘[i]t is the duty of the Court to interpret the Treaties, not to revise them’.10 The rules of interpretation have been codified by the 1969 Vienna Convention on the Law of Treaties (VCLT), Articles 31 and 32:11

Article 31

General Rule of Interpretation

  1. 1.  A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

  2. 2.  The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:

    1. (a)  any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;

    2. (b)  any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.

  3. 3.  There shall be taken into account, together with the context:

    1. (a)  any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;

    2. (b)  any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;

    3. (c)  any relevant rules of international law applicable in the relations between the parties.

  4. 4.  A special meaning shall be given to a term if it is established that the parties so intended.

Article 32

Supplementary Means of Interpretation

Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning (p. 830) resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:

  1. (a)  leaves the meaning ambiguous or obscure; or

  2. (b)  leads to a result which is manifestly absurd or unreasonable.

These two articles constitute a benchmark from which international judicial bodies cannot easily depart since they have been repeatedly recognized as reflecting customary international law and have been regularly applied by investment treaty tribunals.12

30.15  The treaty’s object and purpose, stated at Article 31(1), is central in this interpretation process. Preambles, in this sense, are usually the most useful tools to achieve such a teleological interpretation.13

30.16  While Article 32 refers to them as supplementary means, the drafts and other elements of the negotiating history, or travaux préparatoires, of BITs, other IIAs, and the ICSID Convention are constantly used by tribunals. These have therefore been diverted from their supplementary role and are being used as regular and normal elements on which every tribunal seems to rely. In fact, arbitrators will automatically resort to the travaux préparatoires if they are readily available.14 Consequently, the distinction between the general rule and the supplementary means of interpretation is almost non-existent in practice, as ‘most courts … do not draw fine distinctions as to the sequence and purpose for which interpretative aids are applied. Lawyers are even less restrained’.15

30.17  It should be borne in mind that the states party to an IIA may reach agreement on the meaning of a treaty provision well after the conclusion and entry into force of a treaty, and that such subsequent agreement of the parties is part of the general rule of interpretation set out in Article 31 of the VCLT. For example, NAFTA has its own interpretative body, the Free Trade Commission (FTC), composed of representatives of the state parties. Its most famous interpretation was given on 31 July 2001 concerning Article 1105 on the minimum standard of treatment. This Article had been at the centre of multiple problems of interpretation before arbitral tribunals, and the state parties decided to clarify the meaning of ‘fair and equitable treatment’ and ‘full protection and security’. Nevertheless, one major risk for such a procedure is that ‘States may strive to issue official interpretations to influence proceedings to which they are parties’.16

30.18  The other endogenous procedure in conventional agreements usually included in BITs is an inter-state dispute settlement clause designed to interpret a disputed provision in the particular treaty. Rarely used, to the best of our knowledge, this procedure has not even prevented an investment treaty tribunal from rendering an award interpreting the provision on the ratione temporis application of the BIT, even though that provision was being reviewed by an inter-state arbitral tribunal.17 Consequently, the binding force of such an interpretative procedure has yet to be proven.

(p. 831) 30.19  The final point one has to retain relates to the authority of precedents, which is dealt with in Chapter 4. For the purposes of this chapter, suffice it to note that while, in interpreting treaties, most tribunals have heavily relied on precedents and acknowledged the value of such precedents, they have, at the same time, repeatedly affirmed that they were not bound by such precedents. The best example concerns the multiple awards involving Argentina where the umbrella clause,18 included in the US–Argentina BIT, has been interpreted in a diametrically opposite manner by different tribunals. Nonetheless, precedents are a useful tool for counsel as they are still, most of the time, the most reliable source to exemplify how a particular provision should be interpreted. However, it should not be forgotten that these will only be elements, sometimes powerful, on which an arbitral tribunal might base its reasoning. No more, no less. The discrepancies observed in the Argentinean cases can be considered as an epiphenomenon, as most tribunals pay some deference and attention to previous decisions. In fact, the mindset of investment treaty tribunals might be summed up as follows:

The Tribunal considers that it is not bound by previous decisions. At the same time, it is of the opinion that it must pay due consideration to earlier decisions of international tribunals. It believes that, subject to compelling contrary grounds, it has a duty to adopt solutions established in a series of consistent cases. It also believes that, subject to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to the harmonious development of investment law and thereby to meet the legitimate expectations of the community of States and investors towards certainty of the rule of law.19

30.20  All these elements are necessarily combined, but the reliance first on the methodology set out in Articles 31 and 32 of the VCLT is almost automatic. Then all the necessary evidence can be used to interpret the applicable treaty ‘in good faith in accordance with the ordinary meaning to be given to the terms of th[at] treaty in their context and in the light of its object and purpose’.

IV.  Customary International Law

30.21  Customary international law, as set out in the ICJ Statute, is a source placed on the same level as treaties. Hence, in principle, the obligations deriving from it weigh the same as sources of public international law. The difficulty of this source is to understand where to find it: what are the resources identifying the norms deriving from it? Once this is done, the issue is also the applicability and the relevance of such norms for international investment law. Nevertheless, and as a preliminary understanding, one needs to comprehend what custom is in international law, and how a customary norm is developed.

A.  What Is International Custom and How Is a Customary Norm Created?

30.22  International custom is one of the threes sources of public international law, along with treaties and general principles of law. Nevertheless, it is the most difficult source of international (p. 832) law to identify as the terms of its definition always seem very broad and vague, and this uncertainty can lead to serious controversies.20 Article 38 of the ICJ Statute states that it is ‘evidence of general practice accepted as law’, and authors have generally stated that ‘what is sought for is a general recognition among States of a certain practice as obligatory’.21 One also needs to differentiate it from usages as these are not legal obligations but rather practices accepted on the basis of courtesy.22 Custom is usually defined as being composed of two elements: practice and opinio juris sive necessitatis. The ICJ has repeatedly accepted that the customary process will only be perfected through the combined existence of these two elements:

The Court will now turn to an examination of customary international law to determine whether a prohibition of the threat or use of nuclear weapons as such flows from that source of law. As the Court has stated, the substance of ‘customary law must be looked for primarily in the actual practice and opinio juris of States’.23

30.23  The first element is the material element or consuetudo, which is a uniform and consistent practice—in other words, precedents. It can, at the beginning of the creation of the norm, be a simple usage between states. That practice needs to be uniform and constant, as well as accepted by the other state as binding.24

30.24  That practice need not be legal acts in essence, but all acts and omissions as long as they are taken by subjects of international law or attributable to them. These comprise, among others, positions taken by diplomatic agents25 but also domestic legislation26 or decisions taken at an inter-state level,27 or by an international organization.28

30.25  The second element, the psychological element, is opinio juris sive necessitatis. This element is vague and difficult to prove, but it is the sense, the impression by the state that it is bound by a rule, as illustrated by the constant and recurrent practice of states generally in respecting, although not necessarily complying on all occasions with, that principle. As otherwise stated, ‘[t]he sense of legal obligation, as opposed to motives of courtesy, fairness, or morality is real enough, and the practice of states recognizes a distinction between obligation and usage’.29 The ICJ stated that element as early as in the North Sea Continental Shelf Case:

The need for such a belief, i.e. the existence of a subjective element, is implicit in the very notion of the opinio juris sive necessitatis. The States concerned must therefore feel that they are conforming to what amounts to a legal obligation. The frequency, or even habitua1 character of the acts is not in itself enough. There are many international acts, e.g., in the field of ceremonial and protocol, which are performed almost invariably, but which are motivated only by considerations of courtesy, convenience or tradition, and not by any sense of legal duty.30

(p. 833) Even if, traditionally, opinio juris derives from constant practice, it is usually the repetitive nature and consistency of such elements that creates the impression of being legally bound by such a norm.31

30.26  Having addressed, in a concise manner, the process leading to the creation of a customary norm, it is important to understand the means to identify customary norms before understanding which of them may have an impact in investment arbitration.

B.  Means to Identify Customary Norms in Public International Law

30.27  The identification of norms of customary international law is a difficult exercise: ‘the search of the rule of customary international law is not as simple as might at first appear’.32 As for any argument, factual or legal, the burden of proof will be on the party requesting the application of such a norm.33 But how to prove such norms? And how to identify their precise contours?

30.28  There are three basic sources to identify whether a principle is a customary norm or a mere theoretical concept. The first is case law and it is usually the most relevant and trustworthy. As in any legal system, ‘a court is presumed to know the law and may apply a custom even if it has not been expressly pleaded’.34 Thus, the party attempting to prove such a norm before a court will have to demonstrate the existence of the material and psychological elements. The ICJ has always affirmed that its role is to discern which rules were customary and which ones were not.35 Hence, when trying to rely on a norm believed to be customary, any counsel would be wise to analyse the jurisprudence of the world court in order to ascertain whether or not that rule had already been recognized. Investment treaty tribunals usually do not decide by themselves if a norm is customary. Rather, they rely on previous findings, either by the ICJ or the Permanent Court of International Justice (PCIJ), or deriving from a constant trend in past arbitral awards from the Permanent Court of Arbitration (PCA), for example. The analysis of these cases is, therefore, one of the main means to identify such norms.

30.29  The second source is also the identification, or rather, the codification of these norms in multilateral treaties. As acknowledged, a ‘treaty does not “make” customary law, but … it may both codify existing law and contribute to the process by which new customary law is created and develops’.36 Where a treaty is considered to codify customary law, the arbitral tribunal does not take into account whether or not the host state in an investment arbitration is a party to that particular treaty. If France were to be a respondent in such an arbitration, it would not matter that it is not a party to the VCLT, as this instrument is now recognized by all international courts, and virtually all states, whether not party to it, as an instrument which, for the most part, including with respect to interpretation, codifies the international customary law of treaties. Hence, some codification agreements could be invoked by counsel in an investment arbitration procedure to identify and frame customary obligations, even if the host country is not a party.

30.30  Finally, the last source to identify customary norms is the writings of qualified authors. Relying on public international law textbooks is probably the easiest secondary source to (p. 834) identify these norms. The references to case law and to codifying treaties might be easier to find in such textbooks.

30.31  As a word of conclusion, it is important to mention that customary norms are evolving. Not being written in instruments containing specific revision procedures, they evolve as the relations between states do and as the need for change at the international level appear. As Vaughan Lowe affirms: ‘it is a mistake to think of international law as a monolithic body of law’.37 All of these rules evolve through changes in the practice of states. Some norms might even disappear or be replaced by more protective norms. Investment arbitral tribunals have recognized the evolving nature of customs and have advised caution when resorting to customary norms identified in old awards, as these norms might have evolved:

Put in slightly different terms, what customary international law projects is not a static photograph of the minimum standard of treatment of aliens as it stood in 1927 when the Award in the Neer case was rendered. For both customary international law and the minimum standard of treatment of aliens it incorporates, are constantly in a process of development.38

30.32  Consequently, relying on the most recent international case law or writings might be the safest means of identifying customary law norms as they ‘come into existence, evolve and die through a dynamic and incremental process of claims and reactions by States’.39

C.  Applicability and Relevance of Customary Norms in International Investment Law

30.33  Customary norms exist, and actually coexist, with the norms included in the applicable BITs in a given dispute. It is an accepted principle that the BIT or other IIA is a lex specialis if applicable in a dispute and that the lex specialis derogates from the legi generali.40 However, the relevant treaty might not cover all the issues in a given dispute. Hence, customary international law will be a complementary source of obligations for the state.41

30.34  Concerning the importance of such a source in international investment law, its influence and weight are real. As mentioned, the customary rules of treaty interpretation are always used by investment arbitral tribunals to interpret BITs. It is mostly procedural principles, part of customary international law, that are used as such by investment tribunals; for example, res judicata, estoppel, lis pendens, or the issue of denial of justice.42 More substantial principles or norms are usually dealt with in a conventional instrument,43 either solely in the BIT or in conjunction with the Washington Convention during an ICSID arbitration. Tribunals have repeatedly reaffirmed that they will not resort to customary norms for the substantial elements already covered in the applicable conventional instruments; this is generally the case (p. 835) regarding the nationality of the investor: ‘As the matter of nationality is settled unambiguously by the Convention and the BIT, there is no scope for consideration of customary law principles of nationality, as reflected in Barcelona Traction’.44

30.35  Hence, customary international law will play a secondary, or procedural, role when the basis of a claim is an investment treaty but will be more important either when the treaty is incomplete or when the basis of the tribunal’s jurisdiction is an investment contract or domestic legislation. In the latter cases, all of the above-mentioned means to identify such norms are fundamental for the investor fully to obtain the protection provided by international law and for the host state to ensure that all its sovereign customary prerogatives are respected.

V.  Conclusion

30.36  These research tools do not aim to be exhaustive but, rather, to give a first brush or an introductory overview of the most important elements to take into account when faced with a dispute in investment arbitration.

30.37  ‘[F]or a lawyer without books would be like a workman without tools’;45 one can hope that the present chapter will be a double tool: practical and theoretical. This twofold approach is necessary to grasp the ever-evolving subject of international investment law.(p. 836)

Footnotes:

1  The expression is borrowed from Prosper Weil, L’Etat, l’investisseur étranger et le droit international: la relation désormais apaisée d’un ménage à trois, in Prosper Weil, Ecrits de droit international 411 (2000).

2  See Y. Banifatemi, The Law Applicable in Investment Treaty Arbitration, in Arbitration under International Investment Agreements: A Guide to the Key Issues ch. 19 (K. Yannaca-Small ed., 2018).

3  See J. Paulsson, The Role of Precedent in Investment Treaty Arbitration, in Arbitration under International Investment Agreements: A Guide to the Key Issues ch. 4 (K. Yannaca-Small ed., 2018). See also Precedent in International Arbitration (E. Gaillard & Y. Banifatemi eds., 2008).

4  Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Decision on Jurisdiction (Nov. 14, 2005), ¶ 76.

5  News from ICSID, 26(1) (Summer 2009), at 3.

6  Article 59 provides: ‘The decision of the Court has no binding force except between the parties and in respect of that particular case’.

7  For example, see the French database with all the bilateral and multilateral treaties that France has concluded: http://www.doc.diplomatie.fr/pacte/ (last visited Nov. 12, 2017); the U.S. database on BITs and Free Trade Agreements concluded or being negotiated: https://ustr.gov/trade-agreements/trade-investment-framework-agreements (last visited Nov. 12, 2017); or even, from a developing country’s perspective, the Lebanese database with all the BITs concluded by Lebanon: http://www.finance.gov.lb/en-us/Finance/IA/IPA/Pages/default.aspx (last visited Nov. 12, 2017).

8  Quoted supra30.06.

9  V. Lowe, International Law 64 (2007).

10  Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (Second Phase), Advisory Opinion (July 18, 1950) [1950] I.C.J. Rep. 221, 229 and Case Concerning the Rights of Nationals of the United States of America in Morocco (France v. U.S.), Judgment of Aug. 27, 1952 [1952] I.C.J. Rep. 176, 196.

11  Vienna Convention on the Law of Treaties (May 22, 1969) 1155 U.N.T.S. 33 (Entry into force: January 27, 1980) [hereinafter VCLT].

12  See, e.g., Aguas del Tunari S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Jurisdiction (Oct. 21, 2005), ¶¶ 88–93 & 226–39; Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Award (Oct. 12, 2005), ¶ 50 ff.; Saluka Investments BV v. Czech Republic, Ad hoc BIT tribunal, Partial Award (Mar. 17, 2006), ¶¶ 296–99.

13  See, e.g., Continental Casualty Company v. Argentine Republic, ICSID Case No. ARB/03/9, Decision on Jurisdiction (Feb. 22, 2006), ¶ 80.

14  See, e.g., A. de Nanteuil, Droit international de l’Investissement 118 ff. (2d ed. 2017). See also C. Schreuer & R. Dolzer, Principles of International Investment Law 28 ff. (2d ed. 2012).

15  See Lowe, supra note 9, at 74.

16  See Schreuer & Dolzer, supra note 14, at 35.

17  See the dissenting opinion of F. Berman, mainly focusing on this pending decision, where he argues that the refusal of the tribunal to suspend its proceedings in order to wait for the decision of the inter-state arbitration should have led the Committee to annul the award: see Indústria Nacional de Alimentos S.A. and Indalsa Perú, S.A. v. Republic of Peru, ICSID Case No. ARB/03/4, Decision of the Ad hoc Committee (Sept. 5, 2007).

18  Regarding the umbrella clause and its interpretation, see K. Yannaca-Small, The Umbrella Clause: Is the Umbrella Closing?, in Arbitration under International Investment Agreements: A Guide to the Key Issues ch. 16 (K. Yannaca-Small ed., 2018).

19  Saipem S.p.A. v. People’s Republic of Bangladesh, ICSID Case No. ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures (Mar. 21, 2007), ¶ 67. See also Pey Casado v. Chile, ICSID Case No. ARB/98/01, Award (May 8, 2008), ¶ 119.

20  See P. Daillier & A. Pellet, Droit International Public 322 (6th ed. 1999): ‘il s’agit d’une source d’une nature particulière et même controversée’. For an exhaustive and theoretical discussion of custom in international law see id. at 322–45.

21  J.L. Brierly, The Law of Nations: An Introduction to the International Law of Peace 61 (6th ed. 1978).

22  I. Brownlie, Principles of Public International Law 4–5 (5th ed. 1999).

23  Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion (July 8, 1996) [1996] I.C.J. Rep. 226.

24  Asylum Case (Columbia v. Peru), Judgment (Nov. 27, 1950) [1950] I.C.J. Rep. 276–77.

25  Interhandel (Switzerland v. U.S.), Judgment (Mar. 21, 1959) [1959] I.C.J. Rep. 6.

26  P.C.I.J., Lotus Case (Serie A–N 10), Judgment (Sept. 7, 1927).

27  North Sea Continental Shelf (Ger. v. Neth.), Judgment (Feb. 20,1969) [1969] I.C.J. Rep. 3.

28  Judgments of the Administrative Tribunal of the ILO upon Complaints Made against UNESCO, Advisory Opinion (Oct. 23, 1956) [1956] I.C.J. Rep. 77.

29  See Brownlie, supra note 22, at 7.

30  North Sea Continental Shelf, supra note 30.

31  Some authors have argued that, in a few cases, the process has been inverted: when a norm is necessary, it is announced as a norm and then the practice follows. See, e.g., Daillier & Pellet, supra note 20, at 332.

32  See Lowe, supra note 9, at 48.

33  P.C.I.J., Lotus Case (Serie A–N 10), Judgment, supra note 26, at 18.

34  See Brownlie, supra note 22, at 11.

35  Military and Paramilitary Activities in and against Nicaragua (Nicar. v. U.S.), Judgment (June 27, 1986) at 183 ff.: ‘[T]he Court has next to consider what are the rules of customary international law applicable to the present dispute’.

36  A. Boyle & C. Chinkin, The Making of International Law 234 (2007).

37  See Lowe, supra note 9, at 61.

38  ADF Group Inc. v. United States, ICSID Case No. ARB (AF)/00/1, Award (Jan. 9, 2003), ¶ 179.

39  T. Gazzini, The Role of Customary International Law in the Field of Foreign Investment, 8 JWIT 5, 691, 694 (2007).

40  Amoco Int’l Fin. Corp. v. Iran, 15 Iran–U.S. CTR (1987) 189, ¶ 112. The Iran–U.S. Claims tribunal stated that: ‘As a lex specialis in the relations between the two countries, the Treaty supersedes the lex generalis, namely customary international law’.

41  For a general discussion of the hierarchy or interrelation of sources of international law, including jus cogens, or peremptory norms, from which no derogation is permitted, see M.N. Shaw, International Law 87–91 (7th ed. 2014).

42  Even though this principle is sometimes subsumed under the fair and equitable treatment heading. See, e.g., Consortium R.F.C.C. v. Kingdom of Morocco, ICSID Case No. ARB/00/6, Award (Dec. 22, 2003).

43  For example, general principles of treatment or conditions for an expropriation are generally set out in these treaties. In the absence of such norms, then customary international law might come into play to fill the normative gaps.

44  ADC Affiliate Limited & ADC & ADMC Management Ltd. v. Republic of Hungary, ICSID Case No. ARB/03/16, Award (Oct. 2, 2006), ¶ 357.

45  Letter of Thomas Jefferson to Thomas Turpin Shadwell (February 1769).