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Cutting-Edge Issues in International Dispute Resolution
Published online by Cambridge University Press: 24 March 2023
Extract
Esmé Shirlow presented the findings of a policy paper developed in collaboration with the International Institute for Sustainable Development (IISD), titled Approaches of International Courts and Tribunals to the Award of Compensation in International Private Property Cases and Implications for the Reform of Investor-State Arbitration. The policy paper follows previous IISD work on compensation in investor-state arbitration, which left open the question of whether approaches to issues of compensation in investor-state arbitration differ from the approaches of other international courts and tribunals (hereinafter, courts), and the extent to which this comparative practice might offer inspiration or ideas for ongoing investor-state dispute settlement reform. The research presented by Dr. Shirlow seeks to answer this question by analyzing how issues of compensation have been analyzed in cases concerning alleged state interferences with private property filed before the Permanent Court of International Justice (PCIJ), International Court of Justice (ICJ), International Tribunal for the Law of the Sea (ITLOS), United Nations Convention of the Law of the Sea Annex VII Tribunals, European Court of Human Rights (ECtHR), African Court on Human and Peoples’ Rights (ACtHPR), and the Inter-American Court of Human Rights (IACtHR).
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- Meet the Scholars: Cutting-Edge Issues in International Dispute Resolution
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- Copyright © The Author(s), 2023. Published by Cambridge University Press on behalf of The American Society of International Law
Footnotes
As part of the 2022 ASIL Annual Meeting, on Thursday, April 7, 2022 at 9:00 a.m., the ASIL Dispute Resolution Interest Group (DRIG) hosted a works-in-progress workshop titled “Meet the Scholars: Cutting-Edge Issues in International Dispute Resolution.” Two distinguished scholars presented their works-in-progress and recent publications on international dispute resolution, with commentary by two leading practitioners. The event featured Esmé Shirlow of Australian National University, Ben Love of Boies Schiller Flexner LLP, Mohamed Mahayni of Queen Mary University, and Luciana Ricart of Curtis, Mallet-Prevost, Colt & Mosle LLP. The session was moderated by DRIG co-chairs Simon Batifort of Curtis, Mallet-Prevost, Colt & Mosle LLP and Rémy Gerbay of Hughes Hubbard & Reed LLP. The summary below was prepared by all the participants as well as DRIG Secretary Belén Ibañez of Curtis, Mallet-Prevost, Colt & Mosle LLP.
References
1 The paper was published shortly after the ASIL Annual Meeting: Esmé Shirlow, Approaches of International Courts and Tribunals to the Award of Compensation in International Private Property Cases and Implications for the Reform of Investor-State Arbitration (2022), at https://www.iisd.org/publications/report/international-courts-private-property-cases-reform-investor-state-arbitration.
2 Jonathan Bonnitcha & Sarah Brewin, Compensation Under Investment Treaties (IISD Best Practices Series, 2020), at https://www.iisd.org/system/files/publications/compensation-treaties-best-practicies-en.pdf.
3 In this way, international courts and tribunals have referred frequently to the standard for reparation articulated by the PCIJ in: Factory at Chorzów (Ger. v. Pol.), Claim for Indemnity (The Merits), Judgment, 1928 PCIJ (ser. A) No. 17, at 47 (Sept. 13). See, e.g., Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicar.), Judgment on Compensation, 2018 ICJ Rep. 15, paras. 29–30 (Feb. 2); Armed Activities on the Territory of the Congo (Dem. Rep. Congo v. Uganda), Judgment on Reparations, paras. 69–70, 100–01 (Int'l Ct. Just. Feb. 9, 2022); The M/V “Virginia G” Case (Pan./Guinea-Bissau), Judgment, para. 430 (ITLOS Apr. 14, 2014); The M/V “Norstar” Case (Pan. v. It.), Judgment, para. 316 (ITLOS Apr. 10, 2019); The M/V “SAIGA” (No. 2) Case (St. Vincent v. Guinea), Judgment, para. 170 (ITLOS July 1, 1999); Georgia v. Russia (I), Judgment (Just Satisfaction) (ECtHR Jan. 31, 2019); Velásquez Rodríguez v. Honduras, Judgment (Reparations and Costs), para. 26 (IACtHR July 21, 1989).
4 See especially International Law Commission, Responsibility of States for Internationally Wrongful Acts (2001), at https://legal.un.org/ilc/texts/instruments/english/draft_articles/9_6_2001.pdf. In addition to reparation, an internationally wrongful act will also generate additional obligations on the wrongdoing state, including a requirement that they cease the wrongful conduct. Such consequences are distinct from reparation, though may reinforce or support reparation (including, in particular, orders of restitutionary relief).
5 See, e.g., The M/V “Norstar Case” (Pan. v. It.) supra note 3, paras. 320–21; see also European Court of Human Rights, Practice Directions: Just Satisfaction Claims, para. 23 (2007), at https://www.echr.coe.int/documents/pd_satisfaction_claims_eng.pdf. On the different standards being applied to findings of an “impossibility” of restitution (including the difference between material and practical impossibility) see: Octavian Ichim, Just Satisfaction Under the European Convention on Human Rights 37, 39 (2015).
6 See further Shirlow, supra note 1, at 15–17.
7 Id. at 21–32.
8 Id. at 32–35.
9 See, e.g., Ahmadou Sadio Diallo (Guinea v. Dem. Rep. Congo), Judgment on Compensation, 2012 ICJ Rep. 324, para. 24 (June 19, 2012); Varnava and Others v. Turkey, Grand Chamber Judgment (Merits and Just Satisfaction), para. 224 (ECtHR Sept. 18, 2009).
10 Shirlow, supra note 1, at 29–32.
11 Id. at 35–39.
12 See further id. at 40–44.
13 Id. at 45–49.
14 This would be consistent with the residual nature of the general rules of state responsibility under international law. International Law Commission, supra note 4, Art. 55.
15 EU-Canada Comprehensive Economic and Trade Agreement, Art. 8.39(4).
16 Id. Art. 8.39(3).
17 See, on such techniques generally, Esmé Shirlow, Judging at the Interface: Deference to Domestic Decision-Making Authority in International Adjudication (2021).
18 See generally Shirlow, supra note 1, at 36–38.
19 See, e.g., ‘Five Pensioners’ v. Peru, Judgment (Merits, Reparations and Costs), para. 178 (IACtHR Feb. 28, 2003); Santo Domingo Massacre v. Colombia, Judgment (Preliminary Objections, Merits and Reparations), para. 337 (IACtHR Nov. 30, 2012).
20 See generally Shirlow, supra note 1, at 38–39; see, e.g., European Convention on Human Rights, Art. 39(1), Nov. 4, 1950, ETS 5; American Convention on Human Rights, Art. 48(1)(f), Nov. 22, 1969.
21 Shirlow, supra note 1, at 35–36.
22 See further David Caron & Esmé Shirlow, Dissecting Backlash: The Unarticulated Causes of Backlash and Its Unintended Consequences, in The Judicialization of International Law – A Mixed Blessing? (Geir Ulfstein & Andreas Føllesdal eds., 2018); Esmé Shirlow, Dawn of a New Era? The UNCITRAL Rules and UN Convention on Transparency in Treaty-Based Investor-State Arbitration, 31 ICSID Rev. – For. Inv. L.J. 622 (2016).
23 Shirlow, supra note 1, at 55–56.
24 See, e.g., United States-Mexico-Canada Agreement, Art. 14.D.13, July 2, 2020.
25 Factory at Chorzów (Ger. v. Pol.), supra note 3, at 47.
26 Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries Art. 34, UN Doc. A/56/10 (2001).
27 R. Baxter, Forward, in The Valuation of Nationalized Property, Vol. II, at vii (R. Lillich ed., 1973).
28 See, e.g., Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Final Award (Feb. 25, 2016) (arbitration initially registered with ICSID nearly twelve years before the issuance of the final award); Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A v. Argentine Republic, ICSID Case No. ARB/03/19, Final Award (May 25, 2016) (arbitration initially registered with ICSID nearly thirteen years before the issuance of the final award); Total S.A. v. The Argentine Republic, ICSID Case No. ARB/04/01, Final Award (Nov. 27, 2013) (arbitration initially registered with ICSID over nine years earlier).
29 Doctoral thesis titled The [Anti]-ideology of Investment Treaty Arbitrators, University of Paris 1 Panthéon Sorbonne. Mohamed Mahayni noted that he is indebted to Prof. Sylvain Bollée for prompting and probing his thinking on this thesis.
30 Malcolm B. Hamilton, The Elements of the Concept of Ideology, 35 Pol. Stud. 18, 20–21 (1987).
31 Michael Waibel & Yanhui Wu, Are Arbitrators Political?, 12 (July 5, 2012), at https://ssrn.com/abstract=2101186; Richard A. Posner, How Judges Think 43 (2010) (criticizing studies of American judicial voting behavior that define law too narrowly).
32 Julius H. Grey, The Ideology of Administrative Law, 13 Manitoba L.J. 35, 35 (1983) (“Every area of law has, at all times, an ideology.”).
33 Roger Griffin, Ideology and Culture, 11 J. Pol. Ideologies 77, 81 (2006).
34 Id. at 80.
35 Jack M. Balkin, Ideology as Constraint, 43 Stanford L. Rev. 1133, 1153 (1991) (arguing that ideological decision making should be seen as the norm rather than the exception, because “[w]hat we call ‘non-ideological’ decisions are ideological decisions whose ideology is simply not noticed”; submitting that it is not normally a source of legal indeterminacy unless judges’ ideologies differ greatly).
36 Griffin, supra note 33, at 80–82.
37 Duncan Kennedy, Freedom and Constraint in Adjudication: A Critical Phenomenology, 4 J. Legal Ed. 518, 522 (1986) (describing the law as a “trip” because of its malleability through legal work).
38 International Thunderbird Gaming Corporation v. The United Mexican States, Award, para. 5 (UNCITRAL Jan. 26, 2006) (diss. op., Wälde, J.) (describing the source of his disagreement with the majority against whom he was dissenting: “They rather see the glass of the investor half empty; I rather see it half full”).
39 Wintershall Aktiengesellschaft v. Republic of Argentina, ICSID Case No. ARB/04/14, Award, para. 89 (Dec. 8, 2008) (characterizing the SGS v. Pakistan and SGS v. Philippines tribunals’ respective interpretations of umbrella clauses as “avowedly” pro-state and pro-investor respectively).
40 Enron Corporation and Ponderosa Assets, L.P. v. Republic of Argentina, ICSID Case No. ARB/01/3, Annulment Committee Decision (July 30, 2010).
41 BG Group PLC v. Republic of Argentina, Judgment of the United States Supreme Court (Mar. 5, 2014) (see antagonistic amici briefs filed before the Court).
42 Jan Paulsson, The Idea of Arbitration 1 (2013); William W. Park, Rectitude in International Arbitration, 27 Arbitration Int'l 473, 525 (2011) (cautioning against “transplant[ing] judicial standards into the world of arbitration,” in the sense that arbitrators owe their duties to the parties only and not to the “citizenry as a whole”).
43 Miro Cerar, The Ideology of the Rule of Law, 97 Archiv Für Rechts- Und Sozialphilosophie [Archives for Philosophy of Law and Social Philosophy] 393, 404 (2011) (positing that all members of the legal class—law professors, judges, prosecutors, lawyers, notaries—instrumentalize the social importance of the law—whether intentionally or not; stating that they develop an “ideology of the rule of law,” which is exacerbated by the exclusionary nature of the law).
44 Duncan Kennedy, A Critique of Adjudication (Fin de Siecle) 14 (1997) (on the one hand, theorizing that judges pursue “conscious, half-conscious or unconscious ideological projects with respect to [issues of social hierarchy],” which projects “of course vary in their intensity or degree”; on the other hand, noting that this reality is oftentimes “denie[d], (suppresse[d], mystifie[d], distorte[d], conceale[d], evade[d])” in legal and political discourse).
45 Joost Pauwelyn, The Rule of Law without the Rule of Lawyers? Why Investment Arbitrators Are from Mars, Trade Adjudicators from Venus, 109 AJIL 761, 773 n. 45 (2015) (noting that 99.6% of arbitrators are legally educated; arguing that ISDS legitimacy would benefit from having more arbitrators with experience in government service; calling for “the rule of law without the rule of lawyers”).
46 Cerar, supra note 43, at 403.
47 Eco Oro Minerals Corp. v. Republic of Colombia, ICSID Case No. ARB/16/41, Decision on Jurisdiction, Liability and Directions on Quantum (Sept. 9, 2021).
48 Eco Oro v. Colombia, Request for Arbitration, paras. 4–12.
49 Eco Oro v. Colombia, Decision, supra note 47, paras. 212, 826–37.
50 Id., para. 834 (“The Tribunal's analysis is supported by the decision of the tribunal in Bear Creek which considered an identical provision.”) (emphasis in original); see also id., para. 365 (“Colombia posits that the second sentence in Article 2201(4) of the FTA does not appear in either of the treaties giving rise to the disputes in Bear Creek (the Canada-Peru FTA) and Infinito (the Canada-Costa Rica BIT), cited by Eco Oro in support of its interpretation of Article 2201(3)[.]”).
51 Canada-Colombia FTA, Art. 805(1) (“Each Party shall accord to covered investments treatment in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security. The concepts of ‘fair and equitable treatment’ and ‘full protection and security’ do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.”).
52 Eco Oro v. Colombia, Decision, supra note 47, paras. 743–821.
53 Id., paras. 5–37, esp. para. 36 (diss. op., Sands, J.) (“The effect of its approach is to significantly lower the bar, and in effect rewrite the FTA and the content and effect of MST.”).
54 See, e.g., Foresight Luxembourg Solar 1 S.A.R.L., et al. v. Kingdom of Spain, SCC Case No. 2015/150, Final Award, paras. 218–19, 381 (Nov. 14, 2018); Cube Infrastructure Fund SICAV and Others v. Kingdom of Spain, ICSID Case No. ARB/15/20, Decision on Jurisdiction, Liability and a Partial Decision on Quantum, paras. 156–60 (Feb. 19, 2019).
55 Green Power K/S and SCE Solar Don Benito APS v. Kingdom of Spain, SCC Case No. V2016/135, Award (June 16, 2022).
56 Id., paras. 468–78.
57 Theodoros Adamakopoulos and Others v. Republic of Cyprus, ICSID Case No. ARB/15/49, Decision on Jurisdiction (Feb. 7, 2020).
58 Id., para. 3 (diss. op., Kohen, M.) (noting that EU law applies as part of: (1) the BLEU-Cyprus BIT's Article 10(5), which explicitly provides for the application of the host state's law, the BIT, any specific agreements regarding the investment, and international law; and (2) the Greece-Cyprus BIT's applicable law which is deemed to be the host state's law and international law by application of Article 42 of the ICSID Convention).
59 Id. (emphasis in original).
60 Id., paras. 76–82 (diss. op., Kohen, M.) (emphasizing the importance of not overstepping jurisdiction; noting at paragraph 80 that: “It is not in the interest of investment arbitration to extend jurisdiction where there is none and where there is not even any political or moral reason to do so. This policy only serves to discredit the system of international investment arbitration. The current practice at different levels, including treaties, looking for alternative ISDS systems should provoke a reflection in this regard.”).