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Clash of Paradigms: Actors and Analogies Shaping the Investment Treaty System

  • Anthea Roberts (a1)

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When the skin of an Australian platypus was first taken to England in the 1700s, scientists thought it was a fake. It looked like someone had sewn a duck’s bill onto a beaver’s body; one scientist even took a pair of scissors to the skin looking for stitches. The animal had fur and was warm-blooded like a mammal, yet laid eggs and had webbed feet like a bird or a reptile. Scientists struggled to categorize this unusual creature. Was it a bird, a mammal, or a reptile? Or was it some strange hybrid of all three?

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1 See Australian Platypus Conservancy, The Platypus: A Very Special Australian, at http://www.platypus.asn.au; Wikipedia Free Encyclopedia, Platypus, at http://en.wikipedia.org/wiki/Platypus.

2 Douglas, Zachary, The Hybrid Foundations of Investment Treaty Arbitration, 2003 Brit. Y.B. Int’l L. 151, 151–55 [hereinafter Douglas, Hybrid Foundations]; Zachary Douglas, The International Law of Investment Claims 6–10 (2009) [hereinafter Douglas, International Law]. On historical antecedents for investor-state arbitration, see Legum, Barton, The Innovation of Investor-State Arbitration Under NAFTA, 43 Harv. J. Int’l L. 531 (2002).

3 Van Harten, Gus & Loughlin, Martin, Investment Treaty Arbitration as a Species of Global Administrative Law, 17 Eur. J. Int’l L. 121 (2006); Gus Van Harten, Investment Treaty Arbitration and Public Law (2007); David Schneiderman, Constitutionalizing Economic Globalization: Investment Rules and Democracy’s Promise (2008); Benedict Kingsbury & Stephan Schill, Investor-State Arbitration as Governance: Fair and Equitable Treatment, Proportionality and the Emerging Global Administrative Law (N.Y.U. Pub. Law & Legal Theory, Working Paper No. 146, 2009), available at http://lsr.nellco.org/cgi/viewcontent.ci?article=1146&context=nyu_plltwp; Schill, Stephan W., International Investment Law and Comparative Public Law—An Introduction, in International Investment Law and Comparative Public Law 3 (Schill, Stephan W. ed., 2010); Santiago Montt, State Liability in Investment Treaty Arbitration: Global Constitutional and Administrative Law in the BIT Generation (2009).

4 Rudolf Dolzer & Christoph Schreuer, Principles of International Investment Law 2–5 (2008); Kurtz, Jürgen, The Use and Abuse of WTO Law in Investor-State Arbitration: Competition and Its Discontents, 20 Eur. J. Int’l Law 749 (2009) [hereinafter Kurtz, Use and Abuse]; Kurtz, Jürgen, Adjudging the Exceptional at International Investment Law: Security, Public Order and Financial Crisis, 59 Int’l & Comp. L.Q. 325, 337–41 (2010) [hereinafter Kurtz, Adjudging the Exceptional]; Hamida, Walid Ben, MFN clause and Procedural Rights: Seeking Solutions from WTO Experiences, 6(1) Transnat’l Disp. Mgmt. (2009); DiMascio, Nicholas & Pauwelyn, Joost, Nondiscrimination in Trade and Investment Treaties: Worlds Apart or Two Sides of the Same Coin?, 102 AJIL 48 (2008).

5 Douglas, Hybrid Foundations, supra note 2, at 153–54; Douglas, International Law, supra note 2, at 7–8; Bóckstiegel, Karl-Heinz, Enterprise v. State: The New David and Goliath?, 23 Arb. Int’l 93, 93, 104 (2007); Hirsch, Moshe, Investment Tribunals and Human Rights: Divergent Paths, in Human Rights in International Investment Law and Arbitration 97, 98, 107 (Pierre-Marie Dupuy, Francesco Francioni & Ernst-Ulrich Petersmann eds., 2009); Clara Reiner & Christoph Schreuer, Human Rights and International Investment Arbitration, in Human Rights in International Investment Law and Arbitration, supra, at 82, 94; Roberts, Anthea, Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States, 104 AJIL 179, 202–07 (2010); Simma, Bruno, Foreign Investment Arbitration: A Place for Human Rights?, 60 Int’l & Comp. L.Q. 573, 576 (2011); Pierre-Marie Dupuy & Jorge Viñuales, Human Rights and Investment Disciplines: Integration in Progress, in International Investment Law (Marc Bungenberg, Jórn Griebel, Stephan Hobe & August Reinisch eds., forthcoming 2013).

6 Analogies and paradigms may be—but are not necessarily—related. Drawing on “analogous” case law or principles from one field in another involves an (often implicit) assertion that the two fields are relevantly similar, at least in one respect, which makes drawing the comparison helpful. However, drawing an individual analogy may, but does not necessarily, entail an assertion that the fields are generally similar on a structural paradigmatic level, such that a range of other comparisons should also be drawn. By contrast, an assertion that two fields are relevantly similar on a general paradigmatic level is often used to justify the introduction of “analogous” case law and principles from one field into the other across a range of issues. However, particular paradigms may influence interpretive approaches without specific analogies to case law and principles from those related legal fields being drawn.

7 Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.-Arg., Nov. 14, 1991, as amended Aug.24 & Nov. 26, 1992, S. Treaty Doc. No. 103-2 (1993), available at http://2001-2009.state.gov/documents/organization/43475.pdf.

8 Enron Creditors Recovery Corp. & Ponderosa Assets, L.P. v. Argentine Republic, Icsid Case No. Arb/01/3, Award, paras. 322–45, esp. para. 334 (May 22, 2007); see also CMS Gas Transmission Co. v. Argentine Republic, ICSID Case No. Arb/01/8, Award, paras. 304–94 (May 12, 2005), 44 ILM 1205 (2005); Sempra Energy Int’l v. Argentine Republic, icsid Case No. Arb/02/16, Award, paras. 32–97 (Sept. 28, 2007); Enron Corp. v. Argentine Republic, Icsidcase No. Arb/01/3, Decision on the Application for Annulment of the Argentine Republic, paras. 347–405 (July 30, 2010).

9 Continental Casualty Co. v. Argentine Republic, Icsid Case No. Arb/03/9, Award, paras. 189–230, esp. para. 192 (Sept. 5, 2008) (looking to WTO case law interpreting GATT Article XX).

10 See Vadi, Valentina, Critical Comparisons: The Role of Comparative Law in Investment Treaty Arbitration, 39 Denv. J. Int’l L. & Pol’y 67, 85–86 (2010).

11 Int’l Thunderbird Gaming Corp. v. Mexico, Award, Sep. Op. Wälde, J., para. 141 (Nafta Ch. 11 Arb. Trib. Jan. 26, 2006).

12 ADC Affiliate Ltd. v. Republic of Hungary, icsid Case No. Arb/03/16, Award, para. 532 (Oct. 2, 2006).

13 Viñuales, Jorge E., Amicus Intervention in Investor-State Arbitration, 61 Disp. Resol. J., 72, 75 (2006); Ishikawa, Tomoko, Third Party Participation in Investment Treaty Arbitration, 59 Int’l & Comp. L.Q. 373, 375 (2010); Fortier, Yves, The Occasionally Unwarranted Assumption of Confidentiality, 15 Arb. Int’l 131 (1999).

14 See NAFTA Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions (July 31, 2001), available at http://www.NAFTAclaims.com/files/Nafta_Comm_1105_Transparency.pdf [hereinafter Notes of Interpretation].

15 Buckley, Ross P. & Blyschak, Paul, Guarding the Open Door: Non-party Participation Before the International Centre for Settlement of Investment Disputes, 22 Banking & Fin. L. Rev. 353, 355 (2007).

16 Vadi, supra note 10, at 77–78.

17 Icsid awards are subject to annulment, but annulment committees are also appointed on an ad hoc basis, and their mandate is more constrained than a typical appellate body. Non-icsid awards are subject to some level of review by national courts at the seat of arbitration and the place of enforcement, but this review is also decentralized and limited in scope. Debates about whether an appellate body should be introduced often draw on analogies with other legal fields, including international commercial arbitration (which has no appellate mechanism), trade law (which introduced the WTO Appellate Body), and public law (which typically include domestic appellate mech anisms).

18 Stern, Brigitte, The Future of International Investment Law: A Balance Between the Protection of Investors and the States’ Capacity to Regulate, in The Evolving International Investment Regime 174, 175 (Alvarez, Jose E. & Sauvant, Karl P. eds., 2011 ) (describing international investment law’s “teenager’s crisis”).

19 Dworkin, Ronald, In Praise of Theory, 29 Ariz. St. L.J. 353, 371 (1997).

20 Id. Sunstein, Cass R., On Analogical Reasoning, 106 Harv. L. Rev. 741, 745 (1993) (“For analogical reasoning to operate properly, we have to know that A and B are ‘relevantly’ similar, and that there are not ‘relevant’ differences between them.”); see also Brewer, Scott, Exemplary Reasoning: Semantics, Pragmatics, and the Rational Force of Legal Argument by Analogy, 109 Harv. L. Rev. 923, 933 (1996).

21 On the use of analogies in international law, see generally Vóneky, Silja, Analogy in International Law, in The Max Planck Encyclopedia of Public International Law (Wolfrum, Rüdiger ed., 2008 ), available at http://www.mpil.de/shared/data/pdf/pdf_epil_analogy_voeneky.pdf.

22 As Thomas Wälde has observed, investment treaty arbitration is a “novel ‘hybrid/mixed’ form” of dispute settlement in which frequent recourse to other “cognate, but external, sources of law” might lessen over time as it develops its own body of jurisprudence. Wälde, Thomas W., The Specific Nature of Investment Arbitration, in New Aspects of international investment Law 43, 118 (Kahn, Philippe & Wälde, Thomas W. eds., 2007) .But see Legum, supra note 2, at 531 (arguing that the novelty of NAFTA investor-state arbitration has been overstated).

23 For example, the law of non-international armed conflict was given content largely based on the assumption that the laws applicable in international armed conflict applied by way of analogy. See Sivakumaran, Sandesh, Re-envisaging the International Law of Internal Armed Conflict, 22 Eur. J. Int’l L. 219 (2011). Attempts to give content to economic and social rights often involve drawing analogies to more established rights, such as property rights and civil and political rights. See Katharine G. Young, Constituting Economic and Social Rights (2012).

24 See Roy Schondorf, A Theory of Supra-national Criminal Law (unpublished J.S.D. dissertation, New York University School of Law) (on file with author).

25 Investment treaties are not alone in this regard; a similar point could be made about human rights treaties and environmental treaties. However, when taken together with the field’s youth, hybridity, and decentralization, the vagueness of its treaty terms plays a crucial role in explaining the field’s openness to a wide range of competing analogies.

26 Vienna Convention on the Law of Treaties, Arts. 1, 2(1)(a), 31, 32, opened for signature May 23, 1969, 1155 UNTS 331 [hereinafter Vienna Convention].

27 Compare SGS Société Générale de Surveillance S.A. v. Republic of the Philippines, Icsid Case No. Arb/02/6, Jurisdiction, para. 116 (Jan. 29, 2004) [hereinafter SGS société Générale v. Philippines], with SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan, Icsid Case No. Arb/01/13, Jurisdiction, para. 171 (Aug. 6, 2003), and Saluka Investments BV v. Czech Republic, Partial Award, para. 300 (Uncitral Mar. 17, 2006) [hereinafter Saluka Investments].

28 Interpreters may also, in certain circumstances, look to the treaty’s travaux préparatoires, but these documents are rarely available or helpful in the investment context given that most negotiations work off model Bits. Vienna Convention, supra note 26, Art. 32.

29 Martti Koskenniemi, Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law: Report of the Study Group of the International Law Commission, paras. 17–19, Un Doc. A/CN.4/L.682 (Apr. 13, 2006) [hereinafter ILC Study]; McLachlan, Campbell, The Principle of Systemic Integration and Article 31(3)(c) of the Vienna Convention, 54 Int’l & Comp. L.Q. 279 (2005).

30 Articles on Responsibility of States for Internationally Wrongful Acts, Art. 55, in Report of the International Law Commission on the Work of Its Fifty-Third Session, UN GAOR, 56th Sess., Supp. No. 10, at 328, UN Doc. A/56/10 (2001) [hereinafter Articles on Responsibility of States], reprinted in James Crawford, The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries (2002) [hereinafter ILC Report].

31 Compare S.D. Myers, Inc. v. Canada, First Partial Award, paras. 243–51 (Nafta Ch. 11 Arb. Trib. Nov. 13, 2000) (drawing on GATT and WTO jurisprudence in conceptualizing “likeness”), with Methanex Corp. v. United States, Final Award on Jurisdiction and Merits, pt. IV, ch. B, paras. 29–35 (Nafta Ch. 11/uncitral Arb. Trib. Aug. 3, 2005) (rejecting the relevance of trade law jurisprudence) [hereinafter Methanex Final Award].

32 Mondev Int’l Ltd. v. United States, Icsid Case No. Arb(Af)/99/2, Award, para. 144 (Nafta Ch. 11 Arb. Trib. Oct. 11, 2002), 42 Ilm 85 (2003).

33 Total S.A. v. Argentine Republic, Icsid Case No. Arb/04/1, Decision on Liability, paras. 128–34 (Dec. 27, 2010).

34 Corn Products Int’l Inc. v. Mexico, Icsid Case No. ARB(Af)/04/01, Decision on Responsibility, paras. 161–79 (NAFTA Ch. 11 Arb. Trib. Jan. 15, 2008) [hereinafter Corn Products].

35 Methanex Corp. v. United States, Decision on Petitions from Third Person to Intervene as “Amici Curiae,” paras. 29–34 (Nafta Ch. 11 Arb. Trib. Jan. 15, 2001) [hereinafter Methanex Decision on Amici Curiae].

36 See Stephan W. Schill, The Multilateralization of International Investment Law (2009).

37 See, e.g., Saipem S.p.A. v. People’s Republic of Bangladesh, Icsid Case No. Arb/05/7, Award, para. 90 (June 30, 2009). See generally Bjorklund, Andrea K., Investment Treaty Arbitral Decisions as Jurisprudence Constante, in International Economic Law: The State and Future of the Discipline 265 (Picker, Colin B., Bunn, Isabella D. & Arner, Douglas W. eds., 2008); Kaufmann-Kohler, Gabrielle, Arbitral Precedent: Dream, Necessity or Excuse?, 23 Arb. Int’l 357 (2007). For empirical work on the use of precedent, see Commission, Jeffery P., Precedent in Investment Treaty Arbitration: A Citation Analysis of a Developing Jurisprudence, 24 J. Int’l Arb. 129 (2007); Fauchald, Ole Kristian, The Legal Reasoning of Icsid Tribunals: An Empirical Analysis, 19 Eur. J. Int’l L. 301, 333–43 (2008).

38 Schill, supra note 36 (also citing other factors, such as the ability to structure corporate investments in order to take advantage of favorable Bits); Salacuse, Jeswald W., The Emerging Global Regime for Investment, 51 Harv. Int’l L.J. 427 (2010).

39 See Haas, Peter M., Introduction: Epistemic Communities and International Policy Coordination, 46 Int’l Org. 1, 3 (1992); Salacuse, supra note 38, at 465–66. On the influential role of experts in international law, see generally Kennedy, David, The Politics of the Invisible College: International Governance and the Politics of Expertise, 5 Eur. Hum. Rts. L. Rev. 463 (2001) [hereinafter Kennedy, Politics of the Invisible College]; Kennedy, David, Challenging Expert Rule: The Politics of Global Governance, 27 Sydney J. Int’l L. 1 (2005) [hereinafter Kennedy, Challenging Expert Rule].

40 Although the background, training, and interests of advocates likely play some role in their choice of analogies, these choices are also significantly influenced by the interests of their clients. As it is difficult to disaggregate these phenomena, I do not address this issue here. Considerable overlap also exists between those acting as arbitrators, advocates, and academics within the field, making these roles difficult to separate in practice.

41 As an empirical matter, it is difficult to prove what impact, if any, arbitrators’ backgrounds will have on their approaches to investor-state disputes. Whether and to what extent arbitrators’ backgrounds or personal views play a role in their decision-making may vary between hard and easy cases, and different aspects of arbitrators’ back grounds may pull them in different directions. For some early empirical work on the influence of arbitrators’ back grounds on their decisions, see Franck, Susan D., Development and Outcomes of Investment Treaty Arbitration, 50 Harv. Int’l L.J. 435 (2009); Michael Waibel & Yanhui Wu, Are Arbitrators Political? (unpublished manuscript) (on file with author). But for criticism that we lack sufficient data from which to draw reliable statistical conclusions, see Gus Van Harten, Fairness and Independence in Investment Arbitration: A Critique of “Development and Outcomes of Investment Treaty Arbitration,” Investment Treaty News (Dec. 16, 2010), available at http://www.iisd.org/itn.

42 Schill, Stephan W., W(h)ither Fragmentation? On the Literature and Sociology of International Investment Law, 22 Eur. J. Int’l L. 875, 888 (2011); see also Brower, Charles N., W(h)ither International Commercial Arbitration?, 24 Arb. Int’l 181, 190 (2008).

43 Schill, supra note 42, at 888.

44 Wälde, Thomas W., Procedural Challenges in Investment Arbitration Under the Shadow of the Dual Role of the State—Asymmetries and Tribunals’ Duty to Ensure, Pro-actively, the Equality of Arms, 26 Arb. Int’l 3, 4–5 (2010).

45 Id. at 38.

46 Legum, Barton, Investment Treaty Arbitration’s Contribution to International Commercial Arbitration, 60 Disp. Resol. J. 71, 73 (2005); see also Brower, supra note 42, at 192–93.

47 Corn Products, supra note 34 (Christopher Greenwood, president).

48 Continental Casualty, supra note 9 (Giorgio Sacerdoti, president); see also Alvarez, José E. & Brink, Tegan, Revisiting the Necessity Defense: Continental Casualty v. Argentina, 2010–2011 Y.B. Int’l Inv. L. & Pol’Y 315 (Sauvant, Karl P. ed., 2012 ).

49 Schneiderman, supra note 3; Kingsbury & Schill, supra note 3; Kurtz, Use and Abuse, supra note 4; Simma, supra note 5.

50 See, e.g., Steffen Hindelang, The Free Movement of Capital and Foreign Direct Investment: The Scope of Protection in EU Law (2009); International Investment Law and Eu Law, 2011 Eur. Y.B. Int’l Econ. L. (Special Issue) (Hermann, Christoph & Terhechte, Jórg Philipp eds., 2012).

51 Thibodeau, Paul H. & Boroditsky, Lera, Metaphors We Think With: The Role of Metaphor in Reasoning, 6(2) Plos One (Feb. 2011), at http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0016782.

52 Gentner, Dedre & Gentner, Donald R., Flowing Waters or Teeming Crowds: Mental Models of Electricity, in Mental Models 99 (Gentner, Dedre & Stevens, Albert L. eds., 1983 ).

53 Thibodeau & Boroditsky, supra note 51.

54 See, e.g., Klaas, Brian S., Mahony, Douglas & Wheeler, Hoyt N., Decision-Making About Workplace Disputes: A Policy-Capturing Study of Employment Arbitrators, Labor Arbitrators, and Jurors, 45 Indus. Rel. 68 (2006); Bingham, Lisa B. & Mesch, Debra J., Decision Making in Employment and Labor Arbitration, 39 Indus. Rel. 671 (2000); Crow, Stephen M. & Logan, James W., Arbitrators’ Characteristics and Decision-Making Records, Gender of Arbitrators and Grievants, and the Presence of Legal Counsel as Predictors of Arbitral Outcomes, 7 Emp. Resp. & Rts. J. 169, 183 (1994); Oswald, Sharon L., Students as Arbitrators: An Empirical Investigation, 30 Indus. Rel. 286 (1991); Nelson, Nels E. & Curry, Earl M. Jr., Arbitrator Characteristics and Arbitral Decisions, 20 Indus. Rel. 312 (1981).

55 On the effect of different types of expertise, see Kennedy, Politics of the Invisible College, supra note 39 at 478 – 80; Kennedy, Challenging Expert Rule, supra note 39, at 13–14, 18–19.

56 This merger of legal disciplines and professional groups resulted in conceptual collisions given that public international law is consensual, created by states, and deferential to the idea of state sovereignty, whereas domestic criminal law is coercive, focused on the individual, and often suspicious of state action due to its focus on abuses of power. See Louise Arbour, Emerging Systems of International Justice (June 26, 2000) (unpublished lecture) (on file with author).

57 Terdiman, Richard, Translator’s Introduction to Pierre Bourdieu, The Force of Law: Toward a Sociology of the Juridical Field, 38 Hastings L.J. 805, 812 (1987); Yvesdezalay & Bryantg. Garth, Dealing Invirtue: International Commercial Arbitration and the Construction of a Transnational Legal Order 10, 18–29, 34–42 (1996).

58 Koskenniemi, Martti, The Politics of International Law—20 Years Later, 20 Eur. J. Int’l L. 7, 11 (2009) (emphasis added).

59 ILC Study, supra note 29, para. 8.

60 Schill, supra note 42, at 875; see also International Investment Law and General International Law: From Clinical Isolation to Systemic Integration? (Rainer Hofmann & Christian J. Tams eds., 2011).

61 Koskenniemi, Martti, Human Rights Mainstreaming as a Strategy for Institutional Power, 1 Humanity 47, 51 (2010).

62 On the relationship between analogies and paradigms, see supra note 6 and accompanying text.

63 Notes of Interpretation, supra note 14.

64 Pope & Talbot Inc. v. Canada, Damages, para. 47 (Nafta Ch. 11 Arb. Trib. May 31, 2002), 41 ILM 1347 (2002) (obiter dictum); see also IIBrower, Charles H., Why the FTC Notes of Interpretation Constitutea Partial Amendment of Nafta Article 1105, 46 Va. J. Int’l L. 347 (2006).

65 In addition to Article 31(3) of the Vienna Convention, Nafta provides that the FTC has responsibility for resolving “disputes that may arise regarding [the treaty’s] interpretation or application” and that its interpretations are binding on Nafta tribunals. North American Free Trade Agreement, Can.-Mex.-U.S., Arts. 1131(2), 2001(1), 2001(2)(c), Dec. 17, 1992, 107 Stat. 2006, 32 ILM 289 & 605 (1993) [hereinafter Nafta].

66 ADF Group Inc. v. United States, Icsid Case No. ARB(AF)/00/1, Award, para. 177 (Nafta Ch. 11 Arb. Trib. Jan. 9, 2003); see also Loewen Group, Inc. v. United States, Icsid Case No. ARB(AF)/98/3, paras. 125–28, (Nafta Ch. 11 Arb. Trib. June 26, 2003).

67 See, e.g., Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) Notwithstanding Security Council Resolution 276 (1970), Advisory Opinion, 1971 ICJ Rep. 16, 22, para. 22 (June 21); Navigational and Related Rights (Costa Rica v. Nicar.), 2009 ICJ Rep. 213, para. 64 (July 13); Air Transport Services Agreement of 27 March 1946 (U.S. v. Fr.), 16 Rep. Int’l Arb. Awards [Riaa] 5, 60–68 (1963); Air Transport Services Agreement of 6 February 1948 (U.S. v. It.), 16 Riaa 75, 99–101 (1965); Location of Boundary Markers in Taba (Egypt v. Isr.), 20 RIAA 3 (1988).

68 See Roberts, supra note 5, at 184–85; Douglas, Hybrid Foundations, supra note 2, at 162–64.

69 See Roberts, supra note 5, at 202, 214 –15; see also Arsanjani, Mahnoush H. & Reisman, W. Michael, Interpreting Treaties for the Benefit of Third Parties: ‘The Salvors’ Doctrine’ and the Use of Legislative History in Investment Treaties, 104 AJIL 597, 603–04 (2010).

70 For the suggestion that this relationship should instead be understood through a principal-trustee model, see Sweet, Alec Stone & Brunell, Thomas L., Trustee Courts and the Judicialization of International Regimes: The Politics of Majoritarian Activism in the European Convention on Human Rights, the European Union, and the World Trade Organization, 1 J. L. & Cts. (forthcoming 2013); Alter, Karen J., Agents or Trustees? International Courts in Their Political Context, 14 Eur. J. Int’l Rel. 33, 38–40 (2008). This idea is developed below under the human rights paradigm.

71 On the various political constraints that operate on international courts and tribunals, see Cogan, Jacob Katz, Competition and Control in International Adjudication, 48 Va. J. Int’l L. 411 (2008); Ginsburg, Tom, Bounded Discretion in International Judicial Lawmaking, 45 Va. J. Int’l L. 631 (2005); Posner, Eric A. & Yoo, John C., Judicial Independence in International Tribunals, 93 Cal. L. Rev. 1 (2005); Helfer, Laurence R. & Slaughter, Anne-Marie, Why States Create International Tribunals: A Response to Professors Posner and Yoo, 93 Cal. L. Rev. 899 (2005); Posner, Eric A. & Yoo, John C., Reply to Helfer and Slaughter, 93 Cal. L. Rev. 957 (2005); Steinberg, Richard H., Judicial Lawmaking at the WTO: Discursive, Constitutional, and Political Constraints, 98 AJIL 247 (2004).

72 See Brower, Charles N. & Schill, Stephan W., Is Arbitration a Threat or a Boon to the Legitimacy of International Investment Law?, 9 Chi. J. Int’l L. 471, 492–93 (2009); Van Harten, supra note 3, at 126.

73 See International Judicial Lawmaking: On Public Authority and Democratic Legitimation in global governance (Armin von Bogdandy & Ingo Venzke eds., 2012); Alanboyle & Christine Chinkin, The Making of International Law 268 (2007); José E. Alvarez, International Orga Nizations As Law-Makers 545–68 (2005).

74 See Statute of the International Court of Justice, Arts. 38(1)(d), 59 [hereinafter ICJ Statute].

75 See generally Norton, Patrick M., A Law of the Future ora Law of the Past? Modern Tribunals and the International Law of Expropriation, 85 AJIL 474 (1991).

76 See Sands, Philippe, Conflict and Conflicts in Investment Treaty Arbitration: Ethical Standards for Counsel, in Evolution in Investment Treaty Law and Arbitration 19 (Brown, Chester & Miles, Kate eds., 2011).

77 See Roberts, supra note 5, at 185–95; Paulsson, Jan, Avoiding Unintended Consequences, in Appeals Mech Anism in International Investment Disputes 241, 244 (Sauvant, Karl P. ed., 2008).

78 Even in 2009, Alvarez noted resistance in the Hague Academy of International Law to characterizing the system through a public rather than private international law framework. See Alvarez, José Enrique, The Public Inter national Law Regime Governing International Investment (2009), in 344 Collected Courses of The Hague Academy of International Law 193 (2011).

79 See, e.g., Van Harten, supra note 3; Schneiderman, supra note 3; Montt, supra note 3; International Investment Law and Comparative Public Law, supra note 3.

80 See Michaels, Ralf & Jansen, Nils, Private Law Beyond the State? Europeanization, Globalization, Privatization, 54 Am. J. Comp. L. 843, 849 (2006) (“[P]rivate law is characterized by horizontal relations of equality; public law is characterized by a vertical relation of subordination and dominance.”).

81 Hersch Lauterpacht, Private Law Sources and Analogies of International Law (1927).

82 But see Paulsson, Jan, Arbitration Without Privity, 10 Icsid Rev. 232 (1995).

83 See, e.g., Van Harten, supra note 3, at 45–71; Van Harten & Loughlin, supra note 3, at 145–50; Kingsbury & Schill, supra note 3, at 1.

84 Certain investment treaties contain umbrella clauses through which states promise, as a matter of public treaty law, to abide by their obligations, potentially including those entered into under private contract law. Here, the proximate cause of action is a treaty breach (public liability), but it is based on an underlying breach of contract (private action). Meanwhile, certain investment contracts contain stabilization clauses through which states promise, as a matter of private contract law, not to make certain changes to their laws or policies or to compensate the private party if they do, both of which may implicate the states’ public powers. Here the proximate cause of action is a contractual breach (private liability), but it is based on an underlying regulatory act (public action). See Crawford, James, Treaty and Contract in Investment Arbitration, 6(1) Transnat’l Disp. Mgmt. (2009).

85 See, e.g., Alvarez, José E., Book Review, 102 AJIL 909, 911–12 (2008) (reviewing Van Harten, supra note 3); Schill, supra note 3, at 10–17; Burke-White, William W. & von Staden, Andreas, Private Litigation in a Public Law Sphere: The Standard of Review in Investor-State Arbitrations, 35 Yale J. Int’l L. 283, 287–95 (2010); Nathalie Bernasconi-Osterwalder & Lise Johnson, International Institute for Sustainable Development, Comments on Draft Rules on Transparency in Investor-State Arbitration 3 (2011), available at http://www.iisd.org/publications/pub.aspx?id=1495; Fiona Marshall & Howard Mann, International Institute for Sustainable Development, Revision of the Uncitral Arbitration Rules—Good Governance and the Rule of Law: Express Rules for Investor-State Arbitrations Required 2–3 (2006), available at http://www.iisd.org/pdf/2006/investment_uncitral_rules_rrevision.pdf

86 Van Harten, supra note 3, at 159–64; Hirsch, supra note 5, at 110–11.

87 Montt, supra note 3, at 7–8 (citations omitted).

88 Estoppel also applies between states under public international law, which makes sense because the system is premised on the horizontal equality of states and thus many of its analogies are based on private, rather than public, law concepts. See supra note 81 and accompanying text.

89 Disputes exist over whether the doctrine of legitimate expectations protects procedural expectations only (given the general sovereign right of states to change their laws and policies), or whether it can also protect substantive expectations in narrow circumstances (such as when a specific representation is made to a narrow class). See, e.g., Paul Craig, EU Administrative Law 635–37 (2006); Søren Schønberg, Legitimate Expectations in Administrative Law (2001).

90 Técnicas Medioambientales Tecmed, S.A. v. United Mexican States, Icsid Case No. ARB(AF)/00/2, Award, para. 154 (May 29, 2003); Saluka Investments, supra note 27, para. 305.

91 Roberts, Anthea, The Next Battleground: Standards of Review in Investment Treaty Arbitration, in ICCA Congress Series No. 16, at 170 (van den Berg, Albert Jan ed., 2012).

92 Schill, Stephan W., Deference in Investment Treaty Arbitration: Reconceptualizing the Standard of Review, 3 J. Int’l Disp. Settlement 1, 10 (2012).

93 See Wälde, Thomas W., “Equality of Arms” in Investment Arbitration: Procedural Challenges, in Arbitration Under International Investment Agreements: A Guide to the Key Issues 161 (Yannaca-Small, Katia ed., 2010); Lalive, Pierre A., Some Threats to International Investment Arbitration, 1 Icsid Rev. 26, 37 (1986).

94 Schill, supra note 92, at n.43.

95 See generally id.

96 Montt, supra note 3, at 15.

97 See Roberts, supra note 91, at 178; Schill, supra note 92.

98 See Ratner, Steven R., Regulatory Takings in Institutional Context: Beyond the Fear of Fragmented International Law, 102 AJIL 475, 483 (2008); Roberts, supra note 91, at 178–79.

99 Van Harten, supra note 3, at 129, 180–84.

100 This approach is consistent with that taken by Schill, who argues that investment tribunals should adopt a comparative law approach encompassing both domestic and international public law, with the latter being defined to include human rights, trade law, and European Union law. See International Investment Law and Comparative Public Law, supra note 3.

101 Continental Casualty, supra note 9, paras. 193–95 (relying on WTO case).

102 Tecmed, supra note 90, para. 122 (relying on ECtHR case law); Sweet, Alec Stone, Investor-State Arbitration: Proportionality’s New Frontier, 4 Law & Ethicshum. Rts. 47 (2010), available at http://www.bepress.com/lehr/vol4/iss1/art4 (by subscription).

103 Understanding on Rules and Procedures Governing the Settlement of Disputes [hereinafter DSU], Art. 11, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization [hereinafter WTO agreement], Annex 2, 1869 UNTS 401, in World Trade Organization, The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts 354 (2000) [hereinafter The Legal Texts].

104 Appellate Body Report, European Communities—Measures Concerning Meat and Meat Products (Hormones), para. 115, WT/DS26/AB/R (Jan. 16, 1998).

105 See, e.g., Stefan Zleptnig, The Standard of Review in WTO Law: An Analysis of Law, Legitimacy and the Distribution of Legal and Political Authority (6 Eur. Integration Online Papers, No. 17, 2002), http://eiop.or.at/eiop/pdf/2002-017.pdf; Matthias Oesch, Standards of Review in Wto Dispute Resolution (2003); Durling, James P., Deference, But Only When Due: WTO Review of Anti-Dumping Measures, 6 J. Int’l Econ. L. 125 (2003); Croley, Steven P. & Jackson, John H., WTO Dispute Procedures, Standard of Review, and Deference to National Governments, 90 AJIL 193 (1996); Ehlermann, Claus-Dieter & Lockhart, Nicolas, Standard of Review in WTO Law, 7 J. Int’l Econ. L. 491 (2004); Du, Michael M., Standard of Review Under the SPS Agreement After EC-Hormones II, 59 Int’l & Comp. L.Q. 441 (2010).

106 Shany, Yuval, Toward a General Margin of Appreciation Doctrine in International Law, 16 Eur. J. Int’ll. 907, 909–10 (2005).

107 Burke-White & von Staden, supra note 85, at 337–38.

108 See Roberts, supra note 5, at 184; Douglas, Hybrid Foundations, supra note 2, at 162–64.

109 See Hirsch, supra note 5, at 109; Roberts, supra note 5, at 205.

110 See Van Harten, supra note 3, at 136–43; M. Sornarajah, A Coming Crisis: Expansionary Trends in Investment Treaty Arbitration, in Appeals Mechanism in International Investment Disputes, supra note 77, at 39, 48–49.

111 Brilmayer, Lea, From ‘Contract’ to ‘Pledge’: The Structure of International Human Rights Agreements, 2006 Brit. Y.B. Int’l L. 163.

112 Roberts, supra note 5, at 202–06.

113 For the distinction between agents and trustees, see supra note 70.

114 Articles on Responsibility of States, supra note 30, Art. 49(1).

115 Articles on Responsibility of States for Internationally Wrongful Acts, Commentary to Art. 49, para. 4, in ILC Report, supra note 30.

116 Id., para. 5.

117 Id.

118 Archer Daniels Midland Co. v. Mexico, Icsid Case No. ARB(AF)/04/05, Award, paras. 178–79 (Nov. 21, 2007).

119 Corn Products, supra note 34, paras. 165, 167, 169; cf. Cargill, Inc. v. Mexico, Icsid Case No. ARB(AF)/05/2, Award, paras. 420–28 (Sept. 18, 2009).

120 Articles on State Responsibility, supra note 30, Art. 50(1)(b).

121 Articles on Responsibility of States for Internationally Wrongful Acts, Commentary to Countermeasures, para. 5, in ILC Report, supra note 30.

122 Articles on State Responsibility, supra note 30, Arts. 50(1)(b)&(c) (emphasis added); cf. Vienna Convention, supra note 26, Art. 60(5).

123 Wälde, supra note 44, at 9; Waelde, Thomas & Kolo, Abba, Environmental Regulation, Investment Protection and ‘Regulatory Taking’ in International Law, 50 Int’l & Comp. L.Q. 811, 814, 822 (2001).

124 Luke Eric Peterson, Human Rights and Bilateral Investment Treaties: Mapping the Role of Human Rights Law Within Investor-State Arbitration 23–26 (2009), available at http://publications.gc.ca/collections/collection_2012/dd-rd/E84-36-2009-eng.pdf.

125 Andrew Newcombe & Lluis Paradell, Law and Practice of Investment Treaties: Standards of Treatment 108 (2009) (noting that although human rights law has been invoked by claimant investors, “[m]ore often, however, human rights law may be invoked by respondent states to justify the measures complained of, and thus as defences against liability”); Submission of Nondisputing Party Quechan Indian Nation, Glamis Gold, Ltd. v. United States (Nafta Ch. 11 Arb. Trib. Oct. 16, 2006), available at http://www.Naftaclaims.com/Disputes/USA/Glamis/Glamis-USA-Amicus-Quechan-01—19-08-05.pdf (drawing on a wide range of human rights materials in support of the interests of the indigenous peoples affected by the case).

126 This section treats states as unitary actors, which is clearly a fiction. However, interests and power bases within states are dis aggregated differently in different states, making generalizations across states problematic. For this rea son, I have chosen not to lift that veil in this article.

127 See, e.g., Paulsson, supra note 82, at 256 n.48; Bóckstiegel, supra note 5, at 93, 104; Douglas, Hybrid Foundations, supra note 2, at 153–54; Douglas, International Law, supra note 2, at 7–8.

128 SGS Société Générale v. Philippines, supra note 27, para. 116 (quoting BIT preamble); see also Ecuador v. Occidental Exploration & Prod. Co. (No. 2), [2007] EWCA (Civ) 656, para. 28. For criticism of this approach as “cavalier,” see Michael Waibel, International Investment Law and Treaty Interpretation, in International Investment Law and General International Law, supra note 60, at 29, 39–40.

129 According to the concept of legalization, international commitments can be defined by reference to three characteristics: obligation (whether or not a commitment is binding), precision (how precise the legal commitment is on the rules-to-standards spectrum), and delegation (whether a third party, like a court or tribunal, has been granted authority to interpret and apply the law). Abbott, Kenneth W., Keohane, Robert O., Moravcsik, Andrew, Slaughter, Anne-Marie & Snidal, Duncan, The Concept of Legalization, 54 Int’l Org. 401, 401–02 (2000).

130 See id. at 415; Keohane, Robert O., Moravcsik, Andrew & Slaughter, Anne-Marie, Legalized Dispute Resolution: Interstate and Transnational, 54 Int’l Org. 457, 461–62 (2000); Trachtman, Joel P., The Domain of WTO Dispute Resolution, 40 Harv. Int’l L.J. 333, 335 (1999); van Aaken, Anne, International Investment Law Between Commitment and Flexibility: A Contract Theory Analysis, 12 J. Int’l Econ. L. 507, 519 (2009).

131 Waibel & Wu, supra note 41 (noting that more than 60% of the arbitrators in Icsid cases are in full-time private practice and fewer than 30% are specialists in public international law); Schill, supra note 42, at 880; Stern, supra note 18, at 186 (noting that the current roster of investment treaty arbitrators is “rooted in international commercial arbitration”).

132 Schneiderman, David, Judicial Politics and International Investment Arbitration: Seeking an Explanation for Conflicting Outcomes, 30 NW. J. Int’l L. & Bus. 383 (2010) (noting that the significant commercial arbitration experience of many top investment arbitrators has deeply ingrained commercial paradigms into their mindsets).

133 Legum, supra note 46, at 73.

134 See Hirsch, supra note 5, at 108–09.

135 Burke-White & von Staden, supra note 85, at 330.

136 Simma, supra note 5, at 576; see also James Harrison, Human Rights Arguments in Amicus Curiae Submissions: Promoting Social Justice?, in Human Rights in International Investment Law and Arbitration, supra note 5, at 396, 416 (“Investment arbitrators inevitably have limited expertise in human rights law.”).

137 Alvarez, Guillermo Aguilar & Park, William W., The New Face of Investment Arbitration: Nafta Chapter 11, 28 Yale J. Int’l L. 365, 393–400 (2003); Sornarajah, supra note 110, at 40–41.

138 Canada and the United States both make the top ten list for the highest number of known investment treaty claims to be brought against particular states. See UNCTAD, Latest Developments in Investor-State Dispute Settlement, IIA Issues Note, No. 1, 2012, Annex 2, available at http://unctad.org/en/PublicationsLibrary/webdiaeia 2012d10_en.pdf.

139 See, e.g., Metalclad Corp. v. Mexico, Icsid Case No. ARB(AF)/97/1, Award (Nafta Ch.11 Arb. Trib. Aug. 30, 2000); Methanex Final Award, supra note 31; CMS Gas Transmission Co. v. Argentine Republic, Icsid Case No. ARB/01/8, Award (May 12, 2005).

140 Abbott et al., supra note 129, at 413; see also Van Harten, supra note 3, at 122–23; Trachtman, supra note 130, at 335, 350–55. On the distinction between rules and standards, see generally Kaplow, Louis, Rules Versus Standards: An Economic Analysis, 42 Duke L.J. 557 (1992); Kennedy, Duncan, Form and Substance in Private Law Adjudication, 89 Harv. L. Rev. 1685 (1976).

141 See Unctad, Investor-State Dispute Settlement and Impact on Investment Rulemaking 92, UN Sales No. E.07.II.D.10 (2007).

142 For example, Bolivia, Ecuador, and Venezuela have withdrawn from the Icsid Convention, and other states (such as Nicaragua) have considered doing likewise. See Icsid, List of Contracting States and Other Signatories of the Convention (July 25, 2012) at https://Icsid.worldbank.org/Icsid/Index.jsp. Some countries, including Ecuador and Venezuela, have reportedly withdrawn from or sought to renegotiate a number of their investment treaties. See Unctad, Recent Developments in International Investment Agreements (2007–June 2008), Iia Monitor No. 2, 2008, at 6. Others have suspended further negotiations of investment treaties pending reviews of their policy frameworks and withdrawn from some early-style treaties. See, e.g., Republic of South Africa, Bilateral Investment Treaty Policy Framework Review: Government Position Paper 12 (June 2009), available at http://www.pmg.org.za/node/17313; Peterson, Luke Eric, South Africa Pushes Phase-out of Early Bilateral Investment Treaties After at Least Two Separate Brushes with Investor-State Arbitration, Inv. Arb. Rep., Sept. 23, 2012.

143 For example, the 2005 United States-Australia FTA does not include investor-state arbitration, and in 2011, Australia announced that it would no longer include investor-state dispute settlement provisions in its future trade agreements. See United States-Australia Free Trade Agreement, May 18, 2004, 118 Stat. 919, available at http://www.ustr.gov/trade-agreements/free-trade-agreements/australian-fta/final-text [hereinafter U.S.-Australia FTA]; Australian Dep’T of Foreign Affairs & Trade, Gillard Government Trade Policy Statement: Trading Our Way To More Jobs and Prosperity 14 (Apr. 2011), at http://www.dfat.gov.au/publications/trade/trading-our-way-to-more-jobs-and-prosperity.html. India has resisted the inclusion of an investor-state arbitration provision in its negotiations over an FTA with the European Union, and recent reports suggest that it plans to resist the inclusion of such provisions in its future investment treaties. See As it Ranjan Mishra, India Rejects Clause on Litigation, LiveMint, July 4, 2011; Asit Ranjan Mishra, India May Exclude Clause on Lawsuits from Trade Pacts, Livemint, Jan. 29, 2012.

144 Notes of Interpretation, supra note 14.

145 Treaty Between the Government of the United States of America and the Government of [Country] Concerning the Encouragement and Reciprocal Protection of Investment (2004), available at http://www.state.gov/documents/organization/117601.pdf [hereinafter 2004 U.S. Model BIT]. See generally Gagné, Gilbert & Morin, Jean-Frédéric, The Evolving American Policy on Investment Protection: Evidence from Recent FTAs and the 2004 Model BIT, 9 J. Int’l Econ. L. 357, 363 (2006); Schwebel, Stephen, The United States 2004 Model Bilateral Investment Treaty: An Exercise in the Regressive Development of International Law, 3(2) Transnat’l Disp. Mgmt. (2006), available at http://www.transnational-dispute-management.com/article.asp?key=780 (by subscription); Kantor, Mark, The New Draft Model U.S. Bit: Noteworthy Developments, 21 J. Int’l Arb. 383, 385 (2004); Alvarez, José E., The Evolving BIT, in 3 Investment treaty arbitration and International Law 1, 22, Annex A (chart comparing the 1984 and 2004 US Model BITs) (Laird, Ian A. & Weiler, Todd J. eds., 2010).

146 For example, the newer versions provide, among other things, that “‘fair and equitable treatment’ includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world.” 2004 U.S. Model Bit, supra note 145, Art. 5(2)(a); Treaty Between the Government of the United States of America and the Government of [Country] Concerning the Encouragement and Reciprocal Protection of Investment, Art. 5(2)(a) (2012), available at http://www.ustr.gov/sites/default/files/BIT%20text%20for%20ACIEP%20Meeting.pdf [hereinafter 2012 U.S. Model BIT].

147 For example, the preamble of the 2002 BIT between the Republic of Korea and Trinidad & Tobago sets out the assumption that the objectives of investment protection and promotion “can be achieved without relaxing health, safety and environmental measures of general application,” while the preamble of the 2005 Bit between the United States and Uruguay sets out the desire of the treaty parties to “achieve these objectives in a manner consistent with the protection of health, safety, and the environment, and the promotion of consumer protection and internationally recognized labor rights. Unctad, Bilateral Investment Treaties 1995–2006: Trends in Investment Rulemaking 3–5 (2007) (citing and discussing the quoted texts).

148 See, e.g., 2012 U.S. Model BIT, supra note 146, Annex B, Arts. 12, 13; Agreement Between Canada and [_____] for the Promotion and Protection of Investments, Art. 10 (2004), available at http://italaw.com/documents/Canadian2004-FIPA-model-en.pdf [hereinafter 2004 Canada Model BIT]; Treaty Between the United States of America and the Oriental Republic of Uruguay Concerning the Encouragement and Reciprocal Protection of Investment, Annex B (Nov. 2005), available at http://www.ustr.gov/sites/default/files/uploads/agreements/bit/asset_upload_file748_9005.pdf [hereinafter U.S.-Uruguay BIT]; U.S.-Australia FTA, supra note 143, Annex 11-B.

149 9 See, e.g., 2004 Canada Model Bit, supra note 148, Annex B.13(1); Agreement Between Japan and the Republic of Singapore for a New-Age Economic Partnership, Art. 83, Jan. 13, 2002, available at www.mofa.go.jp/region/asia-paci/singapore/jsepa.html; Comprehensive Economic Cooperation Agreement Between the Republic of India and the Republic of Singapore, Arts. 6.10–6.12 (2005), available at http://www.commerce.nic.in/ceca/toc.htm; Korea-Singapore Free Trade Agreement, Arts. 10.7(4), 10.12, 10.18, Aug. 4, 2005, available at http://www.fta.gov.sg/fta_ksfta.asp?hl=22. Certain other FTAs incorporate Article XX of GATT or Article XIV of GATS by reference. See, e.g., Agreement Between the Government of Japan and the Government of Malaysia for an Economic Partnership, Art. 10, Dec. 13, 2005, available at http://www.mofa.go.jp/policy/economy/fta/malaysia.html; Panama-Taiwan Free Trade Agreement, Art. 20.02, Aug. 21, 2003, available at http://www.sice.oas.org/trade/panrc/panrc_e.asp; Free Trade Agreement Between the Government of New Zealand and the Government of the People’s Republic of China, Art. 200(1), Apr. 7, 2008, available at http://www.chinafta.govt.nz. See generally Newcombe & Paradell, supra note 125, at 500–03.

150 Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments, Art. 33, Sept. 9, 2012, available at http://www.inter national.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/china-text-chine.aspx?lang=eng&view=d [hereinafter 2012 Canada-China BIT].

151 See, e.g., id., Art. 33(e); 2012 U.S. Model Bit, supra note 146, Art. 20.

152 Some states are including investment protections within bilateral and multilateral FTAs. See, e.g., Nafta, supra note 65; Association of Southeast Asian Nations (Asean) Comprehensive Investment Agreement, Feb. 26, 2009, available at http://www.Asean.org/images/2012/Economic/AIA/Agreement/Asean%20Comprehensive%20Investment%20Agreement%20(Acia)%202012.pdf [hereinafter ACIA]. Unctad reports that of the 3,164 international investment agreements in existence at the end of 2011, 2,833 were Bits, while the other 331 were principally made up of FTAs with investment provisions. See Unctad, World Investment Report 2012: Towards a New Generation of Investment Policies, at XX (2012), available at http://www.unctad-docs.org/files/Unctad-Wir2012-Full-en.pdf. Some multilateral trade agreements also incorporate provisions on investment. See, e.g., Agreement on Trade-Related Investment Measures, Apr. 15, 1994, WTO Agreement, supra note 103, Annex 1A, in The Legal Texts, supra note 103, at 143; General Agreement on Trade in Services, Apr. 15, WTO Agreement, supra note 103, Annex 1B, in The Legal Texts, supra note 103, at 295.

153 Several academics have also argued that tribunals should undertake a comparative assessment of domestic law principles in providing content to vague investment treaty norms. See, e.g., Waelde & Kolo, supra note 123, at 821; Montt,supra note 3, at 22, 76; Stephan W. Schill, Fair and Equitable Treatment, the Rule of Law, and Comparative Public Law, in International Investment Law and Comparative Public Law, supra note 3, at 151, 175–76.

154 2012 U.S. Model BIT, supra note 146, Annex B; 2004 U.S. Model Bit, supra note 145, Annex B.

155 Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978). See generally Parvan P. Parvanov & Mark Kantor, Comparing U.S. Law and Recent U.S. Investment Agreements: Much More Similar Than You Might Expect, in 2010–2011 Y.B. Int’l Inv. L. & Pol’y, supra note 48, at 741. One explanation for this approach comes from the 2002 Trade Promotion Act in which the U.S. Congress set out as a negotiating principle that future U.S. investment treaties should include no “greater substantive rights” for foreign investors than U.S. investors are entitled to under domestic law. Bipartisan Trade Promotion Authority Act of 2002, 19 U.S.C. §3802(b)(3) (Supp. 2002).

156 For instance, the United States relied extensively on U.S. and Canadian cases in giving content to the meaning of international investment treaty law protections in Glamis Gold. E.g., Counter-Memorial of Respondent at 195–96, 201–04, 210–11, 213–14, 234, 246, Glamis Gold, Ltd. v. United States (Nafta Ch. 11 Arb. Trib. Sept. 19, 2006); Rejoinder of Respondent at 189–92, 200, 203– 04, 208–12, 225, Glamis Gold, Ltd. v. United States, (Nafta Ch. 11 Arb. Trib. Mar. 15, 2007).

157 See, e.g., 2004 Canada Model BIT, supra note 148, Art. 10; Acia, supra note 152, Annex 2.

158 See generally Schneiderman, David, Nafta’s Takings Rule: American Constitutionalism Comes to Canada, 46 U. Toronto L.J. 499 (1996); Jürgen Kurtz, Univ. of Melbourne, Presentation at the Second Singapore Conference on International Investment Arbitration: State Recalibration of Investment Treaties: Causes, Embodiments and Implications (May 31, 2011). For a recent example of such divergence, see JT Int’l SA v. Commonwealth [2012] HCA 43 (Austl.).

159 See, e.g., 2012 U.S. Model BIT, supra note 146, Art. 18; 2004 Canada Model BIT, supra note 148, Art. 10(4); ACIA, supra note 152, Art. 18; United States-Peru Trade Promotion Agreement, Art. 22.2 n.2, Apr. 12, 2006, available at http://www.ustr.gov/trade-agreements/free-trade-agreements/peru-tpa/final-text.

160 See 2012 U.S. Model BIT, supra note 146, Art. 20.

161 See 2012 Canada-China BIT, supra note 150, Arts. 20(2), 33(3).

162 See, e.g., 2012 U.S. Model BIT, supra note 146, Arts. 28(2), 30(3); 2004 Canada Model BIT, supra note 148, Arts. 35(1), 40(2), 41, 51(2)(a); Acia, supra note 152, Art. 40(3); 2012 Canada-China BIT, supra note 150, Arts. 18(2), 27(2), 30.

163 Unctad, Interpretation of IIAs: What States Can Do, IIA Issues Note, No. 3, 2011, available at http://unctad.org/en/docs/webdiaeia2011d10_en.pdf.

164 Waibel & Wu, supra note 41 (more than 60% of the arbitrators in Icsid cases are in full-time private practice); The Icsid Caseload—Statistics 16 (Issue 2011–2), https://ICSID.worldbank.org/Icsid/Index.jsp (noting that as of June 30, 2011, 70% of arbitrators, conciliators, and ad hoc committee members appointed in Icsid cases were from North America or Western Europe); Van Harten, Gus, The (Lack of) Women Arbitrators in Investment Treaty Arbitration, Colum. FDI Persp., No. 59 (Vale Columbia Center on Sustainable International Investment), Feb. 6, 2012 , at http://www.vcc.columbia.edu/content/publications (stating that of the 249 known investment treaty cases as of May 2010, only 4% of those who served as arbitrators were women).

165 See, e.g., Sornarajah, M., The International Law on Foreign Investment (3d ed. 2010); Guzman, Andrew T., Why LDCs Sign Treaties That Hurt Them: Explaining the Popularity of Bilateral Investment Treaties, 38 Va. J. Int’l L. 639 (1998).

166 Alvarez, supra note 78; Kurtz, Use and Abuse, supra note 4; Simma, supra note 5; see also Sloane, Robert D., On the Use and Abuse of Necessity in the Law of State Responsibility, 106 AJIL 447 (2012).

167 For instance, Alvarez and Brink have taken a critical look at the use of trade law analogies in interpreting the necessity test in investment treaty law, while Kurtz and Waibel have examined the difficulties in relying on a public international law analogy in the same context. Compare Alvarez & Brink, supra note 48, with Kurtz, Adjudging the Exceptional, supra note 4, at 337–38, 341–47, and Waibel, Michael, Two Worlds of Necessity in Icsid Arbitration: CMS and LG&E, 20 Leiden J. Int’l L. 637, 640–41 (2007).

168 See, e.g., DePalma, Anthony, Nafta’s Powerful Little Secret; Obscure Tribunals Settle Disputes, But Go Too Far, Critics Say, N.Y. Times, Mar. 11, 2001, at C1; Van Harten, supra note 3, at 152–75; Sara Anderson & Sara Grusky, Challenging Corporate Investor Rule: How the World Bank’s Investment Court, Free Trade Agreements, and Bilateral Investment Treaties Have Unleashed a New ERA of Corporate Power and What to Do About It (2007), available at http://www.ips-dc.org/reports/070430-challengingcorporateinvestorrule.pdf; Atik, Jeffery, Legitimacy, Transparency and NGO Participation in the Nafta Chapter 11 Process, in Nafta Investment Law and Arbitration: Past Issues, Current Practice, Future Prospects 135 (Weiler, Todd ed., 2004); Mistelis, Loukas A., Confidentiality and Third Party Participation: Ups v. Canada and Methanex Corp. v. United States, in International Investment Law and Arbitration: Leading Cases from the Icsid, Nafta, Bilateral Treaties and Customary International Law 169 (Weiler, Todd ed., 2005).

169 See, e.g., Rubins, Noah, Opening the Investment Arbitration Process: At What Cost, for What Benefit?, 2009 Austrian Arb. Y.B. 483, 483 (describing how the author first became aware of the issue of “transparency” in investment arbitration in 2002 following a television documentary entitled “Trading Democracy”); Legum, supra note 46, at 73 (describing his 2001 remark that “for traditionally open and democratic governments like the United States, litigating issues of public concern in secret before an arbitral tribunal was simply unacceptable” as being “received as a radical manifesto” within the arbitration community).

170 Methanex Decision on Amici Curiae, supra note 35, paras. 29–34.

171 Notes of Interpretation, supra note 14; Nafta Free Trade Commission, Statement of the Free Trade Commission on Non-disputing Party Participation (Oct. 7, 2003), available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/Nondisputing-en.pdf.

172 Rules of Procedure for Arbitration Proceedings, rs. 32(2), 37(2), 48(4), in International Centre for Settlement of Investment Disputes, Convention, Regulations, and Rules, Doc. Icsid/15 (Apr. 10, 2006), available at http://Icsid.worldbank.org (follow “Convention” hyperlink). Negotiations are also under way about whether the uncitral Rules should be modified when applied to investor-state disputes. See Un Secretariat, Note: Settlement of Commercial Disputes: Preparation of a Legal Standard on Transparency in Treaty-Based Investor-State Arbitration, UN Doc. A/CN.9/WG.II/WP.169 (Dec. 13, 2011), available at http://daccess-dds-ny.un.org/doc/UNDOC/LTD/V11/880/46/PDF/V1188046.pdf?OpenElement.

173 Public Statement on the International Investment Regime (Aug. 31, 2010),at http://www.osgoode.yorku.ca/public_statement; see also An Open Letter from Lawyers to the Negotiators of the Trans-Pacific Partnership Urging the Rejection of Investor-State Dispute Settlement (May 8, 2012), available at tpplegal.wordpress.com/open-letter.

174 Tom Toulson, Investment Treaty Arbitration Is ‘Unfair,’ Say Academics, Global Arb. Rev., Sept. 10, 2010 (noting statement of Todd Grierson Weiler), at http://www.globalarbitrationreview.com/news/article/28724/investment-treaty-arbitration-unfair-say-academics.

175 Gus Van Harten, Academic Experts Call for Reform of Investment Treaties, TripleCrisis Blog (Oct. 1, 2010), http://triplecrisis.com/reform-of-investment-treaties.

176 Id.

177 Koskenniemi, supra note 58; Bourdieu, supra note 57.

178 See Dezalay & Garth, supra note 57, at 10, 18–62.

179 See, e.g., Alec Stone Sweet & Florian Grisel, Transnational Investment Arbitration: From Delegation to Constitutionalization?, in Human Rights in International Investment Law, and Arbitration, supra note 5, at 118; Stone Sweet, supra note 102.

180 Stern, supra note 18, at 186.

181 For instance, academics currently creating such databases include Julie Maupin (Empirical Trends in Contemporary Investor-State Jurisprudence) (database profile on file with author); Sergio Puig (description at http://www.stanford.edu/group/codex/cgi-bin/codex/projects); and Michael Waibel and Yanhui Wu (supra note 41).

182 See Costa, José Augusto Fontoura, Comparing WTO Panelists and Icsid Arbitrators: The Creation of Inter national Legal Fields, 1 Oñati Socio-Legal Series (2011) , available at http://papers.ssrn.com//.cfm?abstract _id= 1832382.

183 On the impact of different models for the selection of arbitrators, see Benson, Bruce L., Arbitration, in Ency Clopedia of Law & Economics 159, 184–86 (2000).

184 The European Commission has reportedly suggested the use of a roster or list for future EU investment treaties but stopped short of requiring party appointments to be made from the list. See Luke Eric Peterson, EU and Member-States Find Common Ground on Roster-System for Arbitrators, Heightened Ethics Rules, and Broader Transparency, Inv. Arb. Rep., Oct. 22, 2012, available at http://www.iareporter.com/downloads/20121121.

185 For instance, the 2012 U.S. Model BIT contemplates the possibility of a future appellate body, and the European Commission previously suggested using quasi-permanent arbitrators or establishing an appellate mechanism. See 2012 U.S. Model BIT, supra note 146, Art. 28(10); Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Towards a Comprehensive European International Investment Policy, Com (2010) 343 final, at 10 (July 7, 2010), available at http://trade.ec.europa.eu/doclib/docs/2011/may/tradoc_147884.pdf.

186 For instance, recent Asean investment agreements require that any person appointed as an arbitrator “shall have expertise or experience in public international law, international trade or international investment rules.” Acia, supra note 152, Art. 35(2); Agreement Establishing the Asean-Australia-New Zealand Free Trade Area, Art. 23(2), Feb. 27, 2009, available at http://www.asean.fta.govt.nz. Cf. DSU, supra note 103, Art. 17(3) (“The Appel late Body shall comprise persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally.”).

187 On the meaning of strategic action within judicial politics, see generally Epstein, Lee & Knight, Jack, Toward a Strategic Revolution in Judicial Politics: A Look Back, a Look Ahead, 53 Pol. Res. Q. 625, 626 (2000) (noting that according to the strategic account: (1) judges make choices to achieve certain goals; (2) judges act strategically in the sense that their choices depend on their expectations about the choices of other actors; and (3) these choices are structured by the institutional setting in which they are made). On the application of this approach to investment arbitration, see Schneiderman, supra note 132, at 403–07.

188 Van Harten, supra note 3, at 172.

189 See Kapeliuk, Daphna, The Repeat Appointment Factor: Exploring Decision Patterns of Elite Investment Arbitrators, 96 Cornell L. Rev. 47 (2010).

190 See Roberts, supra note 5, at 197–98.

191 Salacuse, Jeswald W. & Sullivan, Nicholas P., Do BIT’s Really Work? An Evaluation of Bilateral Investment Treaties and Their Grand Bargain, 46 Harv. Int’l L.J. 67, 77–78 (2005).

192 See Yackee, Jason Webb, Do Bilateral Investment Treaties Promote Foreign Direct Investment? Some Hints from Alternative Evidence, 51 Va. J. Int’l L. 397 (2010).

193 Poulsen, Lauge N. Skovgaard, Sacrificing Sovereignty by Chance: Investment Treaties, Developing Countries, and Bounded Rationality 216–56 (June 2011) (unpublished Ph.D. thesis, London School of Economics and Political Science), available at http://etheses.lse.ac.uk/141.

194 In 2010, foreign direct investment inflows and outflows for developed states stood at $601 billion and $935 billion, while inflows and outflows for developing states were $574 billion and $328 billion. Unctad, World Investment report 2011: Non-Equity modes of international production and development, Annex table I.1 (2011).

195 Alvarez, supra note 145, at 12, 21.

196 The effect of the most-favored-nation clause can be expressly narrowed to apply, for instance, to substantive provisions only or to more favorable treatment in subsequently adopted treaties only. See, e.g., 2012 U.S. Model BIT, supra note 146, Art. 4; 2004 Canada Model BIT, supra note 148, Art. 4, Annex III.

197 Vienna Convention, supra note 26, Arts. 34–38; Avena and Other Mexican Nationals (Mex. v. U.S.), 2004 ICJ Rep. 12, para. 40 (Mar. 31).

198 Paulsson, supra note 82, at 256.

199 The platypus came to be identified as a monotreme, a rare type of mammal that lays eggs. See Wikipedia Free Encyclopedia, Monotreme, at http://en.wikipedia.org/wiki/Monotreme.

* I would like to thank Emilie Gonin and Daniel Purisch for research assistance, and I owe thanks for comments on earlier drafts to José Alvarez, Ken Anderson, George Bermann, Sadeq Bigdeli, David Bigge, Jonathan Bonnitcha, Hanoch Dagan, Jack Goldsmith, Gavan Griffith, Robert Keohane, Jürgen Kurtz, Viren Mascarenhas, Henry Monaghan, Gerald Neuman, Patrick Pearsall, Lauge Poulsen, Karl Sauvant, Stephan Schill, Alec Stone Sweet, Valentina Vadi, Gus Van Harten, Jorge Viñuales, Michael Waibel, Joseph Weiler, and Ingrid Wuerth, as well as the organizers of and commentators at workshops at American University, the Australian National University, Columbia, Harvard, the London School of Economics, Melbourne, New York University, Princeton, Temple, Vanderbilt, Yale, the U.S. Department of State, and the participants in the Transnational Cyber-colloquium.

Clash of Paradigms: Actors and Analogies Shaping the Investment Treaty System

  • Anthea Roberts (a1)

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