Appellate Mechanism in Investment Arbitration: Novis Inventis or Sophistication of Existing Mechanism?
Keywords:
Appellate, Mechanism, investment
Abstract
In the past two decades, investment treaty arbitration has faced multiple challenges and criticism, which caused critics toward its efficiency and actual workability. However, it is still the main and the preferable method of dispute resolution between States and investors. Arbitration under the International Centre for the Settlement of Investment Disputes (ICSID) or UNCITRAL (The United Nations Commission on International Trade Law) allows an investor to sue a host state before an ad hoc arbitral tribunal for violations of bilateral investment treaties (BITs) or trade and investment agreements (e.g., the North American Free Trade Agreement (NAFTA)). Investor-State Dispute Settlement (hereinafter the “ISDS”) has been criticized for the lack of an appellate mechanism and the inconsistency and unpredictability of specific arbitration awards that are rendered. These shortcomings have often been attributed to the lack of a unified approach to ISDS and the lack of exact involvement of non-disputing parties in the proceedings.
This Article aims to examine the necessity of an appellate mechanism in investment treaty arbitration in the framework of legitimacy and complexity of the existing procedure. Part II briefly identifies the existing post-award process, including the final and binding nature of the awards, and annulment award procedures. Part III then explores the implementation and discussion of the initial draft presented by UNCITRAL Working Group III. The Article is both descriptive and normative in outlook. Upon thorough scrutiny, I came to the conclusion that there should be an appellate mechanism for investment treaty disputes for the reasons identified below
References
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E.I. Nwogugu, The Legal Problems of Foreign Investment in Developing Countries, 119-22 (1965)
David R. Adair, Investors' Rights: The Evolutionary Process of Investment Treaties, 6 Tulsa J. Comp. & Int'l L. 195, 196-98 (1999)
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See Joshua Simmons, Valuation in Investor-State Arbitration: Toward A More Exact Science, 30 Berkeley Journal of International Law 196 (2012)
Binder, C., Kriebaum, U., Reinisch, A. and Wittich, S., International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, p. 970 (2009).
Blackaby, Nigel, Constantine Partasides, and A. Redfern. Redfern and Hunter on International Arbitration. Oxford: Oxford University Press, (2009).
G. Aksen, American Arbitration Accession Arrives in the Age of Aquarius: the United States Implements United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Southwestern University Law Review, p. 11. (1971).
Van den Berg, Some Recent Problems in the Practice of Enforcement under the New York and ICSID Conventions, 2 ICSID REV. 439 (1987), reprinted in BARRY E. CARTER & PHILLIP R. TRIMBLE, INTERNATIONAL LAW, 389-394 (1995).
George Delaume, ICSID Arbitration, in CONTEMPORARY PROBLEMS IN INTERNATIONAL ARBITRATION 23-4 (1. LEw, ed. 1987).
Smith, Jeanne M.Harisson, Currie, and Hancock LLP, United States: Is Arbitration Final and Binding?, Mondaq, Available at http://www.mondaq.com/ (2018)
Caron D.D., Reputation and Reality in the ICSID Annulment Process: Understanding the Distinction between Annulment and Appeal, 7 ICSID Review-FILJ 21 (1992).
E. Lauterpacht, Aspects of the Administration of International Justice” 1991. S. Schwebel “The Creation and Operation of an International Court of Arbitral Awards, in The Internationalisation of International Arbitration, Hunter, M., Mariott, A., Veeder, V.V. (eds.), 115 (1995).
B. Legum, The Introduction of an Appellate Mechanism: the US Trade Act of 2002, in ANNULMENT OF ICSID AWARDS
H.J. Abs, Proposals for Improving the Protection of Private Foreign Investments, in INSTITUTE INTERNATIONAL D’ÉTUDES BANCAIRES, Rotterdam, as cited by A. Sinclair op. cit., No. 108, (1958).
Yuval Shany, The Competing Jurisdictions of International Courts and Tribunals, Oxford University Press, International Court and Tribunal Series, (2003).
Hans Christiansen, Ayse Bertrand, International Investment Perspectives, OECD, ISBN 92-64-02689-4, (2006) Online Source: https://www.oecd.org/daf/inv/investmentstatisticsandanalysis/37010986.pdf (Accessed on December 12, 2022).
Filip Balcerzak, Amicus Curiae Submissions in Investor - State Arbitrations, 12 Common L. Rev. 66 (2012). The Implications of an Increase in Third-Party Participation, 29 Berkeley J. Int'l Law. 200 (2011); A. Saravanan & S.R. Subramanian, The Participation of Amicus Curiae in Investment Treaty Arbitration, 5 J. Civil Legal Sci 21 (2016).
C. Tietje et al., The Impact of Investor-State-Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership, (Reference MINBUZA-2014.78850) 112, p. 242 (2014).
Kluwer Arbitration London Event, The Gary Born lecture International Arbitration: Recent Developments, YOUTUBE (Oct. 14, 2015), https://www.youtube.com/watch?v= MLa9KZEF92o&list=PLTkvRnnV6E6qDlzpM97q7n76xHlzwS7Kc&index=3&t=2s in Ylli Dautaj, Between Backlash and the Re- Emerging “Calvo Doctrine”: Investor State Dispute Settlement in an Era of Socialism, Protectionism, and Nationalism, Vol. 41, No. 3 Northwestern Journal of International Law & Business 276 (2021).
See K. Scott Gudgeon, United States Bilateral Investment Treaties: Comments on Their Origin, Purposes, and General Treatment Standards,4 Int'l Tax & Bus. L. 105, 111 (1986).
Bernard Kishoiyian, The Utility of Bilateral Investment Treaties in the Formulation of Customary International Law, 14 Nw. J. Int'l L. & Bus. 327, 329-33 (1994) (discussing the evolution of bilateral investment treaties)
Kenneth J. Vandevelde, United States Investment Treaties: Policy and Practice, 7-22 (1992)
Jeswald Salacuse, BIT by BIT: The Growth of Bilateral Investment Treaties and Their Impact on Foreign Investment in Developing Countries, 24 Int'l Law. 655, 656-58 (1990)
Susan D. Franck, The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law Through Inconsistent Decisions, 73 Fordham L. Rev. 1525 (2005).
E.I. Nwogugu, The Legal Problems of Foreign Investment in Developing Countries, 119-22 (1965)
David R. Adair, Investors' Rights: The Evolutionary Process of Investment Treaties, 6 Tulsa J. Comp. & Int'l L. 195, 196-98 (1999)
David A. Gantz, Potential Conflicts Between Investor Rights and Environmental Regulation Under NAFTA's Chapter II, 33 Geo. Wash. Int'l L. Rev. 651, 719-20 (2001)
Todd S. Shenkin, Trade-Related Investment Measures in Bilateral Investment Treaties and the GA TT: Moving Toward a Multilateral Investment Treaty, 55 U. Pitt. L. Rev. 541, 570-76 (1994)
John Collier & Vaughn Lowe, The Settlement of Disputes, in International Law, 132-69 (1999)
Ian Brownlie, Principles of Public International Law, 677-90 (6th ed. 2003). Moreover, the statistics of successful claims is quite limited.
Susan D. Franck, The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law Through Inconsistent Decisions, 73 Fordham L. Rev. 1525 (2005).
Daniel M. Price, Some Observations on Chapter Eleven of NAFTA, 23 Hastings Int'l & Comp. L. Rev 421, 427 (2000)
Charles H. Brower, II, Structure, Legitimacy, and NAFTA's Investment Chapter, 36 VAND. J. TRANSNAT'L L. 37, 51 (2003))
Thomas M. Franck, The power of legitimacy among nations, 52 (1990) ;
Johanna Kalb, Creating an ICSID Appellate Body, 10 UCLAJ. INT'L L. & FOREIGN AFF. 179, 196-200 (2005)
Ylli Dautaj, Between Backlash and the Re-Emerging “Calvo Doctrine”: Investor State Dispute Settlement in an Era of Socialism, Protectionism, and Nationalism, Vol. 41, No. 3 Northwestern Journal of International Law & Business 276 (2021).
Thomas E. Carbonneau, Commercial Peace and Political Competition in the Crosshairs of International Arbitration, 18 DUKE J. COMP. & INT’L L. 311 (2008)
Caron, D., Schill, S., Cohen Smutny, A., & Triantafilou, E. (Eds.), Practising Virtue: Inside International Arbitration.: Oxford University Press. (2015).
Sungjoon Cho, Jürgen Kurtz, Convergence and Divergence in International Economic Law and Politics, in EUROPEAN JOURNAL OF INTERNATIONAL LAW, Volume 29, Issue 1, 169 (2018).
Schultz, Against Consistency in Investment Arbitration, in Z. Douglas, J. Pauwelyn and J.E. Viñuales (eds), The Foundations of International Investment Law: Bringing Theory into Practice 297 (2014).
Ylli Dautaj & Crina Baltag, Investors, States, and Arbitrators in the Crosshairs of International Investment Law and Environmental Protection, in BRILL RESEARCH PERSPECTIVES (2020).
Glamis Gold, Ltd. v. United States of America. International Centre for Settlement of Investment Disputes [ICSID], June 8, 2009, at paras. 612, 616, 828-829, https://www.italaw.com/sites/default/files/case-docu- ments/ita0378.pdf
Pia Acconci, Most-Favoured-Nation Treatment, in THE OXFORD HANDBOOK OF INTERNATIONAL INVESTMENT LAW (Christoph Schreuer et al. eds., 2008)
Nassib Ziadé, Challenges and Prospects Facing the International Centre for Settlement of Investment Disputes, in THE EVOLVING INTERNATIONAL INVESTMENT REGIME: EXPECTATIONS, REALITIES, OPTIONS (José Alvarez et al. eds., 2011)
See Joshua Simmons, Valuation in Investor-State Arbitration: Toward A More Exact Science, 30 Berkeley Journal of International Law 196 (2012)
Binder, C., Kriebaum, U., Reinisch, A. and Wittich, S., International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, p. 970 (2009).
Blackaby, Nigel, Constantine Partasides, and A. Redfern. Redfern and Hunter on International Arbitration. Oxford: Oxford University Press, (2009).
G. Aksen, American Arbitration Accession Arrives in the Age of Aquarius: the United States Implements United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Southwestern University Law Review, p. 11. (1971).
Van den Berg, Some Recent Problems in the Practice of Enforcement under the New York and ICSID Conventions, 2 ICSID REV. 439 (1987), reprinted in BARRY E. CARTER & PHILLIP R. TRIMBLE, INTERNATIONAL LAW, 389-394 (1995).
George Delaume, ICSID Arbitration, in CONTEMPORARY PROBLEMS IN INTERNATIONAL ARBITRATION 23-4 (1. LEw, ed. 1987).
Smith, Jeanne M.Harisson, Currie, and Hancock LLP, United States: Is Arbitration Final and Binding?, Mondaq, Available at http://www.mondaq.com/ (2018)
Caron D.D., Reputation and Reality in the ICSID Annulment Process: Understanding the Distinction between Annulment and Appeal, 7 ICSID Review-FILJ 21 (1992).
E. Lauterpacht, Aspects of the Administration of International Justice” 1991. S. Schwebel “The Creation and Operation of an International Court of Arbitral Awards, in The Internationalisation of International Arbitration, Hunter, M., Mariott, A., Veeder, V.V. (eds.), 115 (1995).
B. Legum, The Introduction of an Appellate Mechanism: the US Trade Act of 2002, in ANNULMENT OF ICSID AWARDS
H.J. Abs, Proposals for Improving the Protection of Private Foreign Investments, in INSTITUTE INTERNATIONAL D’ÉTUDES BANCAIRES, Rotterdam, as cited by A. Sinclair op. cit., No. 108, (1958).
Yuval Shany, The Competing Jurisdictions of International Courts and Tribunals, Oxford University Press, International Court and Tribunal Series, (2003).
Hans Christiansen, Ayse Bertrand, International Investment Perspectives, OECD, ISBN 92-64-02689-4, (2006) Online Source: https://www.oecd.org/daf/inv/investmentstatisticsandanalysis/37010986.pdf (Accessed on December 12, 2022).
Published
2022-05-12
How to Cite
Tuychieva, S. (2022). Appellate Mechanism in Investment Arbitration: Novis Inventis or Sophistication of Existing Mechanism?. Central Asian Journal of Social Sciences and History, 3(5), 35-49. https://doi.org/10.17605/OSF.IO/SF6NJ
Section
Articles