0.01  ‘General principles of law recognized by civilized nations’ are one of the ‘sources of international law’ mentioned in Article 38(1) of the Statute of the International Court of Justice (ICJ).¹ General principles of law (GPL) are a formal source of international law. Like treaties and custom, GPL are a means for the creation of law.² They are directly applicable by a judge or an arbitrator in the context of a dispute involving questions of international law.³ Thus, unlike judicial decisions and doctrine, they are not under Article 38 simply a ‘subsidiary means’ for the determination of rules of law.⁴ As further discussed below,⁵ GPL must not be confused with another source of international law: rules of customary international law. Customary rules are binding on all States and must be applied by tribunals. They gradually develop over time, based on the uniform and consistent practice of a large number of representative States, which have the conviction (or the belief) that such practice is required by law (opinio juris). The present author has recently written a book addressing the question of the formation and the (p. 2) identification of rules of customary international law in the field international investment law.⁶ The present book focuses on another source of law: GPL. Its purpose is to provide a comprehensive analysis of the phenomenon of GPL in the context of international investment law (also known as investor–State arbitration).⁷

0.02  As mentioned in the introduction of a recent comprehensive book on the topic, ‘the question of the sources of international law pertains to how international law is made or identified’.⁸ The authors also emphasize the point that the question in relation to the sources ‘touches upon the nature, legality, normativity, and legitimacy of international law, as well as the sites and tools of its contestation’, and that ‘it is no surprise that th[is] question ( . . . ) has been at the heart of perennial debates among international lawyers and scholars for centuries’.⁹ This is undoubtedly true with regard to public international law in general; many books and articles have indeed focused on the question of its sources. Yet, the situation is drastically different in the sub-field of international investment law. Only a limited number of books and articles discussing the fundamental question of the sources in international investment law have been published.¹⁰ As noted by d’Aspremont, ‘the scholarship on international investment law has remained bereft of theoretical reflection on the sources of investment law’.¹¹ He believes that ‘international investment law has now reached a stage of its development where the doctrine of sources can no longer be left in limbo and needs to be critically explored’ in order for this field of law to ‘rests on solid bases in terms of sources’.¹² He is right.¹³

(p. 3) 0.03  Until very recently, scholars had a limited interest with regard to the question of GPL in international investment law. Thus, it is quite telling that, in a recent chapter of an important book on investment arbitration dealing with the ‘Sources of Foreign Investment Law’, Grisel did not discuss GPL at all.¹⁴ GPL are also barely mentioned in two chapters published in The Oxford Handbook of the Sources of International Law on the same topic.¹⁵ Similarly, in his ground-breaking and very influential 200-page course at the Hague Academy on the specific question of the evolution of sources in the field of investment arbitration law, Juillard does not examine GPL.¹⁶ He also adopted a rather negative view of such principles: ‘chaque fois qu’apparaît un principe général, cela veut dire qu’il n’a pas été possible de formuler une règle précise - et cette impossibilité ne doit pas être camouflée en une victoire du droit’.¹⁷

0.04  Things have changed recently. Scholars have started giving much more consideration to the study of GPL. In the early 2000s, three full articles on GPL paved the way and laid solid foundations for subsequent studies on the issue.¹⁸ In 2017, Kotuby and Sobota published an important book on GPL in ‘transnational disputes’, focusing mainly on investment arbitration.¹⁹ In 2018, Gattini, Tanzi, and Fontanelli edited a book entitled General Principles of Law and International Investment Arbitration.²⁰ Finally, in 2019, another book was published, dealing with GPL under public international law; it contained four chapters focusing on investment arbitration.²¹

0.05  Yet, the question remains: why should one enquire about GPL in today’s international investment law if foreign investors obtain sufficient protection under the numerous investment treaties that have been entered into by States in recent decades? As noted by one author, ‘for all practical purposes, treaties have become the fundamental sources of international law in the area of foreign investment’.²² To put it bluntly, why should one (p. 4) bother to investigate the other sources of international law in this era of ‘treatification’ and proliferation of bilateral investment treaties (BITs)?

0.06  In a prior publication, I examined the basic reasons for the remaining importance of custom in today’s investment arbitration: these rules represent the applicable legal regime of protection in the absence of any BIT.²³ The three reasons traditionally invoked regarding why custom remains important in contemporary international law have been succinctly summarized by International Law Commission (ILC) Special Rapporteur Wood as follows:

Even in fields where there are widely accepted ‘codification’ conventions, the rules of customary international law continue to govern questions not regulated by the conventions and continue to apply in relations with and between non-parties. Rules of customary international law may also fill possible lacunae in treaties, and assist in their interpretation.²⁴

0.07  GPL also continue to play an important role in general international law. This is the first crucial reason why the study of GPL matters. An undeniable sign of the continuing importance of this topic is the fact that a Study Group of the International Law Association (ILA) issued a report in 2018 on the question of ‘The Use of Domestic Law Principles in the Development of International Law’, where GPL took an important place.²⁵ Similarly, the ILC recently decided to include the topic of ‘General Principles of Law’ to its programme of work and appointed Mr Marcelo Vázquez-Bermúdez as its Special Rapporteur.²⁶ In the recommendation of the working group on the long-term programme of work, Vázquez-Bermúdez explained that the study on GPL ‘can provide an authoritative clarification on its nature, scope and functions, as well as on the way in which they are to be identified’.²⁷ The very fact that the ILC decided to study these basic questions shows that the final word has not been said about GPL in general international law. At the time of writing this book, Vázquez-Bermúdez submitted his First Report.²⁸

(p. 5) 0.08  The aim of this book is to provide the different actors involved in investor–State arbitration (arbitral tribunals, investors, States) as well as other stakeholders (international organizations, NGOs, civil society, scholars) with sets of comprehensive guidelines to better understand the nature, the meaning and the function of GPL in the field of international investment law. The book is not based on the assumption that GPL are necessarily different in this specific area when compared to those applied in general public international law or any of its sub-fields. My goal is to assess whether or not investment tribunals have concretely used and applied GPL differently from other international courts and tribunals.

0.09  This book will first address the relevance of distinguishing between GPL grounded in States’ domestic laws and general principles of international law in terms of their different origin and how they can be identified. As further explained in this book, the concept of general principles of international law is particularly relevant and useful in the specific context of international investment law.

0.10  This book will then examine the two main functions of GPL, which have long been identified by international law scholars. Firstly, GPL have a ‘gap-filling’ role in international law. These principles are applied by courts and tribunals when no treaty provision or rule of customary international law exists regarding a particular issue. Secondly, general principles can also provide guidance for the interpretation and application of vague or uncertain treaty terms (such as, for instance, the fair and equitable treatment standard found in all modern BITs). One of the objectives of this book is to assess whether these two ‘traditional’ reasons apply to the field of investment arbitration. In other words, is this how investment tribunals have actually used GPL in the past and is this how they should use them in the future? This book will examine different situations where tribunals have filled gaps with GPL and the types of principles that have been used for that task. Another subject to be examined is the types of principles that have been used to interpret treaty terms.

0.11  I will also look at whether GPL have, in fact, played any other roles than those mentioned in the previous paragraph. Specifically, I will examine whether GPL can be used to further develop the law in this relatively new sub-field of international law. As noted by two authors, ‘judges develop general principles because they need them’, adding that ‘filling lacunae in the applicable law helps judges do their jobs better ( . . . )’.²⁹ The same authors also added that ‘when international judges develop general principles of law, they become architects of their own legal systems’.³⁰ It has been argued by Schill that GPL can ‘play an important role in the current process of recalibrating international investment law in reaction to what is called either a backlash in international investment law or investment law’s legitimacy crisis’.³¹ He explained his point as follows:

(p. 6)

The argument I pursue in this chapter is that recourse to general principles of public law is an important strategy for arbitral tribunals to react to the criticism they have faced in respect of some of their interpretations of substantive standards of international investment law. By making more use of general principles of public law, I submit, arbitral tribunals can improve the outcome of decision making in investor-State arbitration and their own reasoning and achieve a balance of investor rights and public interests that is acceptable to the different stakeholders in the process, namely States, investors, and civil society.³²

This position differs from the view adopted by Gattini, Tanzi, and Fontanelli in the introduction chapter of their recent publication, in which they describe the role of GPL as follows:

General principles are hardly ever used as primary norms of conduct, and mostly operate to make formal rules viable (complementing the procedural set of arbitration, or steering the interpretation of treaty norms). Principles operate ad hoc, their application depending on specific instances of normative ambiguity or unusual factual patterns. They are more than gap-fillers, but they cannot attain the front stage; in a sense, systematic recourse to general principles would call into question the viability of the treaty régime that fuels and sustains investment arbitration.³³

0.12  In the same chapter, these authors later asked the question as to whether ‘general principles serve as foundations and lintels of legal argumentation, or as padding and cushioning?’.³⁴ They answered that ‘they serve both functions, but in a mature normative régime like investment arbitration they stand to operate in the background, affect law-making, and apply autonomously only on occasion’.³⁵ On a more practical level, they argue that ‘if a legal argument relies extensively on general principles, observers and adjudicators would instinctively assume its weakness under “formal” sources’.³⁶ One of the objectives of this book is to determine whether GPL operate in the background of other sources or rather, should they play a more vital and centre-staged role. In other words, are GPL being used (and should they be used) to positively reshape a number of currently deficient features of international investment law? In this book, I will demonstrate that this is indeed what some tribunals have already started doing. One example is the application of the principle of clean hands. Nevertheless, it seems difficult to deny that, other than in a few cases, GPL have so far only played a rather marginal role (a point further explained in the next paragraph).

(p. 7) 0.13  Another reason why the present study is, in my opinion, necessary is because no one seems to agree on the significance of the role actually played so far by GPL in the field of investment arbitration. In one article examining the different sources of international investment law, Hirsch stated that GPL ‘are largely neglected by contemporary arbitral tribunals³⁷ and have so far played a ‘relative insignificant role’ in contemporary investment jurisprudence.³⁸ Others have argued, on the contrary, that GPL have frequently been used by tribunals in the past. Thus, Schreuer et al. have mentioned that GPL ‘have played a prominent role in arbitrations between States and investors’³⁹ and are an ‘important source of international law also in ICSID cases’.⁴⁰ These authors often mention that GPL play a greater role in international investment law as opposed to their role in public international law.⁴¹ For Malgosia Fitzmaurice (discussing GPL in the broader international law context), their ‘status and content is rather vague, and they have been defined in doctrine and applied in practice in a rather loose, imprecise, and inconsistent manner’.⁴² Moreover, given the fact that ‘the line dividing general principles of law and customary international law is often blurred and that these two sources are at times almost impossible to distinguish’, she concludes that ‘the role of general principles of law as a source of general international law has lost some of its significance’.⁴³ Tams also speaks of GPL under public international law as being a ‘neglected’ source,⁴⁴ mere ‘wallflowers existing at the margins of international legal arguments’.⁴⁵ In contrast, he believes that GPL are ‘very much en vogue’ in the context of investment arbitration, adding that ‘it is difficult to think of another branch of international law in which general principles are heralded with the same excitement’.⁴⁶ GPL are therefore seen as a ‘fertile source of inspiration and guidance’.⁴⁷ This book will show that it would be an exaggeration to say that GPL have played an ‘insignificant’ role. In fact (and this may come as a surprise), a great number of awards have in the past identified concepts and notions as GPL. Yet, most of them have done so en passant without much (or any) analysis.

(p. 8) 0.14  Thus, as ‘en vogue’ as GPL may be, it remains that, to this day, the concept has been poorly understood by arbitral tribunals. Indeed, as noted by McLachlan, GPL are ‘perhaps the least well-understood in the catalogue of sources’.⁴⁸ This is another reason why the present book may be helpful to better comprehend GPL. Interestingly, one of the reasons given by ILC Special Rapporteur Vázquez-Bermúdez for studying GPL in general international law is the ‘unresolved doctrinal controversies surrounding this concept’ and the fact that ‘a commonly agreed understanding of general principles of law, as well as its relationship with other related concepts like “general principles of international law” and “fundamental principles”, is lacking’.⁴⁹ These uncertainties surrounding GPL and the lack of comprehension about what they actually do are very much present in the awards of investment tribunals. Thus, I will demonstrate that most tribunals that have made reference to the concept of GPL seem to have a poor understanding of both its meaning and its function under international law. For a start, tribunals have used a variety of expressions to designate GPL. It is often unclear whether what they have in mind is GPL foro domestico or general principles of international law. They also often do not explain where the principles they mention are emerging from (i.e., from which legal order: domestic or international). Another striking feature of case law is that tribunals rarely explain why they are referring to a given principle. They almost never explain the actual function played by a given principle in their awards. The reader is left simply assuming (based on the general reasoning contained in the award) that in one case a GPL was (probably) meant to play a gap-filling role while in another instance it (most likely) served an interpretation role.

0.15  Another area of great uncertainty concerns the methodology used for the identification of GPL and their transposition on the international plane. In the last decades, public international law scholars have explained in great detail the proper methodology that should be used by courts and tribunals to identify principles existing under domestic legal orders which can be recognized as GPL. As further explained in more detail, they have also put forward a three-step method for the transposition of GPL on the international plane. Yet, none of the awards I have examined for the purpose of the present book have actually come close to following any of these criterions, which have long been identified by authors. The most detailed analysis is found in a few awards (including Total⁵⁰), in which tribunals simply mentioned that one given principle existed under different legal orders (relying on the work of scholars), without having conducted any comparative analysis. As noted by Schill in his truly ground-breaking article, tribunals ‘have to adhere to a more rigorous methodology in developing [GPL] in order to minimise the influence of subjective preferences’.⁵¹

(p. 9) 0.16  In the same article, Schill also stated that scholars of international investment law were ‘called on to contribute to a better knowledge about general principles governing the relations between States and investors’.⁵² I have taken up his proposal and I hope that my modest contribution will be helpful in this respect. At the end of the day, I want to achieve the same goals (but in the specific field of investment arbitration) as those identified by the ILA in its recent study on ‘The Use of Domestic Law Principles in the Development of International Law’:

Therefore, the objective of the Study Group was (i) to survey and understand how general principles derived from domestic principles are currently identified and applied, as well as (ii) to consider whether it could be possible to provide some general guidelines to serve as a practical reference for those involved in the adjudication or other decision-making process, as well as for those concerned with the development of international law. Those guidelines could ideally facilitate a more uniform, predictable and reviewable recourse to the general principles of law, reducing the high degree of subjectivity and potential misuse in applying this source of law.⁵³

0.17  It is important to note that, while these theoretical questions are necessary to explain what GPL are all about and how they can be used by tribunals, the main focus of this book lies elsewhere. Thus, I do intend to develop my own global theory of GPL. This book focusses on more practical matters. I will identify a list of concepts and notions which should be, in my opinion, recognized as GPL in the field of investment arbitration. It should be recalled here the following interesting point highlighted by McNair more than fifty years ago in relation to GPL in the (then) completely new field of arbitration cases involving State contracts:

It may be asked: What are these ‘general principles of law recognized by civilized nations’? Where are they to be found? It is not possible to point to any code or book containing them. Much of the content of public international law proper has been developed by tribunals and by writers out of these general principles, and my view is that the same source will prove equally fruitful in the application and interpretation of those contracts which, though not interstate contracts and therefore not governed by public international law strict sensu, can more effectively be regulated by general principles of law than by special rules of any single territorial system. They will be developed both by contracting parties who realize the suitability of general principles of law and by tribunals which are called upon to adjudicate upon contracts of this type. I do not propose to prepare a list of the rules of law likely to be recognized as ‘general principles’. ‘Unjust enrichment’ has been referred to above in the Lena Goldfields Award, and I shall mention only one other likely candidate, among many, for recognition [He then referred to the ‘Respect for Acquired Rights’ as one such principle].⁵⁴

(p. 10) 0.18  In a sense, this book goes further than what McNair carried out back then. It provides readers with a ‘list’ of applicable principles in the field of investment arbitration. A similar exercise has recently been conducted by Kotuby and Sobota in their important book.⁵⁵ The ‘list’ put forward in the present book is based on my own analysis of investment case law and decisions of other international tribunals (including the ICJ, and the WTO), as well as on the work of scholars (in different fields, including comparative law and international law) and other relevant material. An important point to mention in this respect is that GPL can be identified not only based on their systematic presence in the domestic legal orders of States, but they can also be found in the public international law legal order itself and in other sub-fields of international law (such as, for instance, international human rights and WTO).⁵⁶ It has been noted that this phenomenon of ‘cross-pollination’ is indeed ‘necessary to the proper functioning of the international system of justice’.⁵⁷ As rightly noted by Kolb, the ‘general principles are the bees of law’:

The application of the same principles across the legal order, in its most different branches, has the obvious effect of increasing its unity by a web of interrelationships and of interdependencies. This movement exists both on the plane of international law, within its branches, and on the level of the relation of international law to internal law: general principles of law permit to reach a great fluidity of the main legal ideas, which can be transported by way of analogy from one branch to the other, from one legal system to the other. If an image be ventured, the general principles are the bees of law.⁵⁸

0.19  The list contained in Chapter 4 of this book will be useful to practitioners by helping them easily identify which principles may (or may not) be considered as GPL. Most importantly, this book will examine in detail the specific reasons as to why these principles should be characterized as such.

0.20  The first chapter (Chapter 1) of this book examines the questions relating to the nature, meaning, and function of GPL in international law. Section 1 will address the nature of GPL, including a discussion about why GPL is an autonomous and formal source of law (distinct from custom), but has nonetheless been used in practice by international courts as having a subsidiary character. Another question examined in this section is the evolution of the relative importance of the different sources of law in the field of investment arbitration. Section 2 deals with the two main meanings which have been given to GPL: General principles existing under the domestic laws of States and (p. 11) those existing under international law. One of the questions examined in this section is whether investment arbitral tribunals have referred to one or the other (or both) meanings in their awards. Section 3 examines the functions and roles played by GPL in international law. As mentioned above, the two principal functions of GPL are its gap-filling and interpretative roles. I will assess how investment tribunals have actually used these functions in practice. Another point investigated will be whether GPL can be used to correct existing unsatisfactory law and further develop international law.

0.21  The second chapter (Chapter 2) of this book examines the legal grounds based on which a tribunal can apply GPL, depending on what applicable law is used to settle a dispute. I will look at the issue in the context of arbitration proceedings started under a State contract, under the host State’s law, as well as under an investment treaty. The goal of this chapter is to determine if there are any possible situations where a tribunal would not be allowed to apply GPL.

0.22  The third chapter (Chapter 3) of this book analyses how tribunals should identify GPL grounded in States’ domestic laws and transpose them onto the international plane. This process involves three steps. The first step concerns the identification of a principle that is common to domestic legal orders. It will be shown that a comparative analysis of domestic laws is the proper method of investigation and that this method does not require examining all laws, but rather to focus on the most representative legal systems. The second step (distillation) requires the investigator to find common features of a given principle under domestic laws while leaving aside national particularities and specificities existing under some of them. Finally, I will examine a number of questions surrounding the third step of the analysis which involves the adaptation and transposition of a principle into the international legal order.

0.23  The last chapter (Chapter 4) examines whether a number of concepts which have been identified in the past by scholars, courts, and tribunals should be recognized as GPL (or general principles of international law). I will reach my conclusion as to the GPL status of each of these concepts, taking into account a variety of sources (including investment case law, decisions of other international tribunals, and the works of scholars). I will examine the following principles:

• •  Good faith and pacta sunt servanda;

• •  Due process;

• •  Burden of proof: actori incumbit onus probanti;

• •  Estoppel;

• •  Res judicata;

• •  Lis pendens;

• •  Clean hands doctrine;

• •  Unjust enrichment;

• •  Force Majeure;

• •  Rebus sic stantibus;

• •  Abuse of rights;

• (p. 12) •  Proportionality;

• •  Acquired rights;

• •  Mitigation of damages;

• •  Denial of justice;

• •  Fair and equitable treatment standard; and

• •  Legitimate expectations.