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Chapter 7 discusses the law applicable to shareholder treaty claims. It argues in favour of an integrated approach to the applicable law, that is, one that gives proper weight not only to the applicable IIA provisions but also to general international law and national law. The reason for this is, first, that IIA provisions, including applicable law clauses, commonly require the application of the three sources of law. Second, overlaps between international and national law claims call for consideration and application of this latter legal system. And third, admissibility determinations are not focussed on the scope of treaty provisions containing consent to international jurisdiction but on the content of specific claims (thus often involving substantive aspects).
Chapter 5 discusses damages in relation to shareholder indirect claims and the contract claims/treaty claims distinction. The damages dimension is key for this book because the substance of the claims is determined here based on the damages claimed. Using valuation methodologies, the chapter sheds light on the type of damages involved in shareholder treaty claims and the extent to which they differ from damages that may be raised in non-international claims by shareholders and companies. It shows that the harm is often the same, no matter how many entities in a corporate chain have standing to sue, whether different causes of action are available, and irrespective of the valuation method employed. Considering the company’s and third-party interests and other equitable considerations, investment tribunals must take into account this identity of harm when exercising their discretion to assess damages in shareholder indirect claims.
This book focused on two foundational ideas of the modern international law of foreign investment, that is, shareholders’ standing to claim for harm to the company’s assets and the contract/treaty claims distinction. These two ideas advance interrelated notions of independence: (i) independence of shareholder treaty rights in respect of the local company’s contractual/national law rights, and (ii) independence of treaty claims in respect of contract/national law claims. Investment arbitration’s quest for independence, not least vis-à-vis national law and institutions, has come at a cost however.
Chapter 3 examines the historical origins of the standing, cause of action, and damages ideas that are at the heart of this study. The focus is on decisions of ad hoc arbitral tribunals and ‘mixed claims commissions’ of the nineteenth and first half of the twentieth centuries, in particular the Venezuelan and Mexican Commissions of 1903 and 1923–1934 respectively. The chapter aims to understand the context and function of the concepts from which the current position on shareholder standing and international causes of action evolved. It concludes that mixed claims commissions and ad hoc tribunals were already attentive to and dealt with the effects of overlaps between national and international claims. This chapter suggests that contemporary investment tribunals should adopt a similar approach.
Chapter 6 focusses on causes of action in investment arbitration, including the distinction between contract and treaty claims and the notion of ‘fundamental basis of the claim’. The chapter disputes the alleged independence between contract rights and obligations, on the one hand, and treaty rights and obligations, on the other. Tribunals need to recognize substantive overlaps between contract and treaty claims when addressing the substance of IIA claims. Thus, parallel local proceedings, all the provisions of the relevant contract (including forum selection clauses), and the conduct of both contractual parties are relevant factors in deciding the admissibility of treaty claims.
Chapter 2 discusses the concept and the main characteristics of admissibility in general international law and in international investment law. It offers a potential mechanism to address some of the consequences of substantive overlaps between treaty and contract claims. The chapter also advances criteria that investment tribunals could consider to assess the admissibility of shareholder indirect claims under IIAs.
Chapter 1 introduces the problem of substantive overlaps between treaty and contract claims. It also identifies the two main problems deriving from the parallelism between shareholder indirect claims under IIAs and non-IIA claims, namely risks of multiple recovery and prejudice to third parties. This chapter also shows that admissibility constitutes an adequate approach to these problems, notwithstanding other (often complementary) alternatives.
Chapter 4 analyses shareholder standing in international law, first under general international law and then in international investment law. From an admissibility perspective, it scrutinizes the difference between shareholder treaty rights, as described by investment tribunals, and the company’s contractual/national law rights. It shows that the two sets of rights overlap considerably. The chapter advocates a wider role for national and general international law on shareholder rights in admissibility/merits determinations, including principles connected to the company’s independent legal personality.
This book addresses a growing problem in international law: overlapping claims before national and international jurisdictions. Its contribution is, first, to revisit two pillars of investment arbitration, i.e., shareholders' standing to claim for harm to the company's assets and the contract/treaty claims distinction. These two ideas advance interrelated (and questionable) notions of independence: firstly, independence of shareholder treaty rights in respect of the local company's national law rights and, secondly, independence of treaty claims in respect of national law claims. By uncritically endorsing shareholder standing in indirect claims and the distinctiveness of treaty claims, investment tribunals have overlooked substantive overlaps between contract and treaty claims. The book also proposes specific admissibility criteria. As opposed to strictly jurisdictional approaches to claim overlap, the admissibility approach allows consideration of a broader range of legal reasons, such as risks of multiple recovery and prejudice to third parties.
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