Identifying Problems of International Investment Law (IIL) and Evaluating the Focus of Reform Initiatives
Copyright (c) 2024 Khalique Muhammad Abdul
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Abstract
The normative structure of international investment law is highly asymmetrical. Generally, current IIAs grant investors significant substantive and procedural rights, while States and affected communities often lack equivalent safeguard. In recent years, scholars have critcised and identified many problems including human rights concerns ingrained in the international investment law framework. The States and other stakeholders also raised many concerns regarding international investment agreements and investor-State dispute settlement. Moreover, there’s agreement on the need for comprehensive reform of IIL to make ISDS effective. Yet, issues with ISDS go beyond systemic flaws, also entrenched in substantive deficiencies in existing IIAs. Furthermore, the current legitimacy crisis provides a unique chance to amend the international IIAs comprehensively. However, the WGIII and ICSID reform initiative primarily focuses on procedural aspects of ISDS, avoiding substantive issues raised by various stakeholders. While procedural reforms are essential, resolving substantive issues is equally necessary.
Keywords:
How to Cite
References
ALVAREZ, José E. (2021): ISDS Reform: The Long View. ICSID Review-Foreign Investment Law Journal, 36(2), 253–277. Online: https://doi.org/10.1093/icsidreview/siab036
ARCURI, Alessandra – MONTANARO, Francesco (2018): Justice for All: Protecting the Public Interest in Investment Treaties. Boston College Law Review, 59(8), 2791–2824.
BONNITCHA, Jonathan (2014): Substantive Protection under Investment Treaties. Cambridge: Cambridge University Press. Online: https://doi.org/10.1017/CBO9781107326361
Business Line (2017): India’s Bilateral Investment Pacts under Cloud. The Hindu, 9 April, 2017. Online: http://www.thehindubusinessline.com/economy/indias-bilateral-investment-pacts-under-cloud/article9625580.ece
CAPLAN, Lee M. (2009): Making Investor-State Arbitration More Accessible to Small and Medium-Sized Enterprises. In ROGERS, Catherine A. – ALFORD, Roger P. (eds.): The Future of Investment Arbitration. Oxford: Oxford University Press, 297–311. Online: https://doi.org/10.1093/oso/9780195371802.003.0015
CHAISSE, Julien – CHOUKROUNE, Leïla – JUSOH, Sufian (2021): Contemporary Developments and New Trends in International Investment Rulemaking and Investor-State Dispute Settlement: An Introduction. In CHAISSE, Julien – CHOUKROUNE, Leïla – JUSOH, Sufian (eds.): Handbook of International Investment Law and Policy. Singapore: Springer, 2131–2142. Online: https://doi.org/10.1007/978-981-13-3615-7_43
GIORGETTI, Chiara – RATNER, Steven – DUNOFF, Jeffrey – HAMAMOTO, Shotaro – NOTTAGE, Luke – SCHILL, Stephan W. – WAIBEL, Michael (2020): Independence and Impartiality of Adjudicators in Investment Dispute Settlement: Assessing Challenges and Reform Options. The Journal of World Investment & Trade, 21(2–3), 441–474. Online: https://doi.org/10.1163/22119000-12340178
CHIDEDE, Talkmore (2017): Investment Policy Reforms in Africa: How Can They Be Synchronised? Tralac.org, 2017. Online: https://www.tralac.org/discussions/article/11779-investment-policy-reforms-in-africa-how-can-they-be-synchronised.html
CHOUDHURY, Barnali (2013): International Investment Law as a Global Public Good. Lewis & Clark Law Review, 17(2), 481–520. Online: https://doi.org/10.2139/ssrn.2181414
DANI, Mojtaba – AKHTAR-KHAVARI, Afshin (2018): Rethinking the Use of Deference in Investment Arbitration: New Solutions against the Perception of Bias. UCLA Journal of International Law and Foreign Affairs, 22(1), 37–69. Online: https://www.jstor.org/stable/45302398
DAVITTI, Daria (2012): On the Meanings of International Investment Law and International Human Rights Law: The Alternative Narrative of Due Diligence. Human Rights Law Review, 12(3), 421–453. Online: https://doi.org/10.1093/hrlr/ngs013
DE BRABANDERE, Eric (2018): (Re) Calibration, Standard-Setting and the Shaping of Investment Law and Arbitration. Boston College Law Review, 59(8), 2607. Online: https://ssrn.com/abstract=3681449
DIAMOND, Nicholas J. – DUGGAL, Kabir AN (2021): Adding New Ingredients to an Old Recipe: Do ISDS Reforms and New Investment Treaties Support Human Rights? Case Western Reserve Journal of International Law, 53(1), 117–162. Online: https://scholarlycommons.law.case.edu/jil/vol53/iss1/7
GARCIA, Frank J. – CIKO, Lindita – GAURAV, Apurv – HOUGH, Kirrin (2015): Reforming the International Investment Regime: Lessons from International Trade Law. Journal of International Economic Law, 18(4), 861–892. Online: https://doi.org/10.1093/jiel/jgv042
GOLDHABER, Michael D. (2012): The Rise of Arbitral Power over Domestic Courts. Stanford Journal of Complex Litigation, 1(2), 373–416.
ICSID (1966): ICSID Convention. Icsid.org, 14 October, 1966. Online: https://icsid.worldbank.org/resources/rules-and-regulations/convention/overview#:~:text%C2%BCThe%20ICSID%20Convention%20is%20a,by%20the%20first%2020%20States.&text%C2%BCincludes%20final%20provisions%20such%20as,the%20Convention%20(Chapter%20X)
ICSID (2017): ICSID 2017 Annual Report (September, 2017). Online: https://icsid.worldbank.org/sites/default/files/publications/annual-report/en/2017_ICSID_AnnualReport_English_LowRes.pdf
ICSID (2018a): ICSID 2018 Annual Report (September, 2018). Online: https://icsid.worldbank.org/sites/default/files/publications/annual-report/en/ICSID_AR18_Interior_English_CRA_web.pdf
ICSID (2018b): Proposals for Amendment of the ICSID Rules – Consolidated Draft Rules (2 August, 2018). Online: https://icsid.worldbank.org/sites/default/files/publications/Amendments_Vol_Two.pdf
ICSID (2019): Proposals for Amendment of the ICSID Rules (August, 2019), Working Paper # 3 – Volume 1 – English.
ICSID (2021): Updated Backgrounder on Proposals for Amendment of the ICSID Rules (12 November, 2021). Online: https://icsid.worldbank.org/sites/default/files/publications/Backgrounder_WP.pdf
ICSID (2022): Proposed Amendments to the ICSID Regulations and Rules (1 July, 2022). Online: https://icsid.worldbank.org/resources/rules-amendments
JANDHYALA, Srividya (2021): The Politics of Investor-State Dispute Settlement: How Strategic Firms Evaluate Investment Arbitration. In CHAISSE, Julien – CHOUKROUNE, Leïla – JUSOH, Sufian (eds.): Handbook of International Investment Law and Policy. Singapore: Springer, 647–664. Online: https://doi.org/10.1007/978-981-13-3615-7_72
JOHNSON, Lise – SACHS, LISA – GUVEN, Brooke – COLEMAN, Jesse (2018): Costs and Benefits of Investment Treaties: Practical Considerations for States. Online: https://doi.org/10.2139/ssrn.3277965
KELLER, Moritz (2021): Introduction: An Overview of Institutional Efforts. In HOBE, Stephan – SCHEU, Julian (eds.): Evolution, Evaluation and Future Developments in International Investment Law. Baden-Baden: Nomos, 147–156. Online: https://doi.org/10.5771/9783748923756-147
KHALIQUE, Muhammad Abdul (2024): Analyses of the European Union and its member states’ proposals on reforming the ISDS system under the UNCITRAL working group III. In SÁVAI, Marianna (ed.): Green and Digital Transitions: Global Insights into Sustainable Solutions. Szeged: University of Szeged, Faculty of Economics and Business Administration, Doctoral School in Economics, 80–96. Online: https://doi.org/10.14232/gtk.gdtgiss.2024.5
KHALIQUE, Muhammad Abdul (2022): The Critique of Reform Proposals for ISDS: Solutions to Existing and Future Problems. In VIG, Zoltán (ed.): Challenges of International Trade and Investment in the 21st Century. Ankara–Chișinău–Szeged: Department of Private International Law and Department of Commercial Law, Faculty of Law, Ankara Yıldırım Beyazıt University – Department of Private International Law, Faculty of Law, University of Szeged – Doctoral School of Legal Sciences, State University of Moldova, 64–82.
LANGFORD, Malcolm – BEHN, Daniel – LIE, Runar Hilleren (2017): The Revolving Door in International Investment Arbitration. Journal of International Economic Law, 20(2), 301–332. Online: https://doi.org/10.1093/jiel/jgx018
MARBOE, Irmgard (2018): Damages in Investor-State Arbitration: Current Issues and Challenges. Brill Research Perspectives in International Investment Law and Arbitration, 2(1), 1–86. Online: https://doi.org/10.1163/24055778-12340004
MARKERT, Lars – TITI, Catherine (2015): States Strike Back – Old and New Ways for Host States to Defend against Investment Arbitrations. In BJORKLUND, Andrea K. (ed.): Yearbook on International Investment Law & Policy 2013–2014. Oxford: Oxford University Press, 401–435. Online: https://doi.org/10.2139/ssrn.4133289
MAUPIN, Julie A (2013): Transparency in International Investment Law: The Good, the Bad, and the Murky. In BIANCHI, Andrea – PETERS, Anne (eds.): Transparency in International Law. Cambridge: Cambridge University Press, 142–171. Online: https://doi.org/10.1017/CBO9781139108843.009
MERCURIO, Bryan (2015): Safeguarding Public Welfare?—Intellectual Property Rights, Health and the Evolution of Treaty Drafting in International Investment Agreements. Journal of International Dispute Settlement, 6(2), 252–276. Online: https://doi.org/10.1093/jnlids/idv017
MILES, Kate (2015): The Origins of International Investment Law: Empire, Environment, and the Safeguarding of Capital. Cambridge: Cambridge University Press.
MONTINERI, Corinne (2021): UNCITRAL Reform Process on ISDS. In HOBE, Stephan – SCHEU, Julian (eds.): Evolution, Evaluation and Future Developments in International Investment Law. Baden-Baden: Nomos, 157–172. Online: https://doi.org/10.5771/9783748923756-157
NAGY, Csongor István (2016): Central European Perspectives on Investor-State Arbitration: Practical Experiences and Theoretical Concerns. Centre for International Governance Innovation, Investor-State Arbitration Series, 16. Online: https://ssrn.com/abstract=2869995
PAUWELYN, Joost (2014): At the Edge of Chaos? Foreign Investment Law as a Complex Adaptive System, How It Emerged and How It Can Be Reformed. ICSID Review, 29(2), 372–418. Online: https://doi.org/10.1093/icsidreview/siu001
ROBERTS, Anthea – ST JOHN, Taylor (2022c): UNCITRAL and ISDS Reform: What to Expect When You’re Expecting. Ejiltalk.org, 5 October, 2022. Online: https://www.ejiltalk.org/uncitral-and-isds-reform-what-to-expect-when-youre-expecting
ROBERTS, Anthea (2018): Incremental, Systemic, and Paradigmatic Reform of Investor-State Arbitration. American Journal of International Law, 112(3), 410–432. Online: https://doi.org/10.1017/ajil.2018.69
SACHETIM, Henrique – CODECO, Rafael (2019): The Investor-State Dispute Settlement System amidst Crisis, Collapse, and Reform. Arbitration Brief, 6(1), 20–59.
SAUVANT, Karl P. (2016): The Evolving International Investment Law and Policy Regime: Ways Forward, 3–47. Online: https://doi.org/10.2139/ssrn.2721465
SHAN, Wenhua (2015): The Case for a Multilateral or Plurilateral Framework on Investment. Columbia Center on Sustainable Investment (CCSI), Columbia FDI Perspectives, No. 161. Online: https://www.econstor.eu/bitstream/10419/253995/1/fdi-perspectives-no161.pdf
SIMMONS, Beth A. (2014): Bargaining over BITs, Arbitrating Awards: The Regime for Protection and Promotion of International Investment. World Politics, 66(1), 12–46. Online: https://doi.org/10.1017/S0043887113000312
SINGLA, Tania (2020): A Multilateral Framework for Investment Protection: The Missing Piece in the Puzzle of ISDS Reform? NLUD Journal of Legal Studies, 2, 131–163.
SORNARAJAH, Muthucumaraswamy (2021a): Resistance to Dominance in International Investment Law. In CHAISSE, Julien – CHOUKROUNE, Leïla – JUSOH, Sufian: Handbook of International Investment Law and Policy. Singapore: Springer, 2145–2159. Online: https://doi.org/10.1007/978-981-13-3615-7_49
SORNARAJAH, Muthucumaraswamy (2021b): The International Law on Foreign Investment. Cambridge: Cambridge University Press.
SUBEDI, Surya P. (2016): International Investment Law: Reconciling Policy and Principle. Oxford and Portland: Hart Publishing.
SUPNIK, Kate M. (2009): Making Amends: Amending the ICSID Convention to Reconcile Competing Interests in International Investment Law. Duke Law Journal, 343–376. Online: https://www.jstor.org/stable/20684807
TOUZET, Justine – VIENOT DE VAUBLANC, Marine (2018): The Investor-State Dispute Settlement System: The Road to Overcoming Criticism. Kluwerarbitration.com, 6 August 2018. Online: https://arbitrationblog.kluwerarbitration.com/2018/08/06/the-investor-state-dispute-settlement-system-the-road-to-overcoming-criticism
UN (1966): Convention on the Settlement of Investment Disputes between States and Nationals of Other States. Un.org, 17 October, 1966. Online: https://treaties.un.org/pages/showDetails.aspx?objid=080000028012a925
UNCITRAL (2017a): Report of the United Nations Commission on International Trade Law (UNCITRAL) (50th Session) (3–21 July, 2017), General Assembly Official Records Seventy-second Session Supplement No. 17, UN Doc. A/71/17.
UNCITRAL (2017b): Possible Future Work in the Field of Dispute Settlement: Reforms of Investor-State Dispute Settlement (ISDS) (50th Session) (3–21 July, 2017), UN Doc. A/CN.9/917.
UNCITRAL (2017c): Possible Reform of Investor-State Dispute Settlement (ISDS) (34th Session) (27 November – 1 December, 2017), UN Doc. A/CN.9/WG.III/WP.142.
UNCITRAL (2017d): Report of Working Group III (Investor-State Dispute Settlement Reform) on the Work of Its Thirty-fourth Session (34th Session) (27 November – 1 December, 2017), UN Doc. A/CN.9/930/Rev.1.
UNCITRAL (2018a): Possible Reform of Investor-State Dispute Settlement (ISDS): Consistency and Related Matters (36th Session) (29 October–2 November, 2018), UN Doc. A/CN.9/WG.III/WP.150
UNCITRAL (2018b): Possible Reform of Investor-State Dispute Settlement (ISDS) — Cost and Duration (36th Session) (29 October – 2 November, 2018), UN Doc. A/CN.9/WG.III/WP.153
UNCITRAL (2018c): Possible Reform of Investor-State Dispute Settlement (ISDS) — Ensuring Independence and Impartiality on the Part of Arbitrators and Decision Makers in ISDS (36th Session) (29 October – 2 November, 2018), UN Doc. A/CN.9/WG.III/WP.151
UNCITRAL (2019a): Possible Reform of Investor-State Dispute Settlement (ISDS) — Submission from the Government of South Africa (38th Session) (14–18 October, 2019), UN Doc. A/CN.9/WG.III/WP.176
UNCITRAL (2019b): Possible Reform of Investor-State Dispute Settlement (ISDS) — Comments by the Government of Indonesia (37th Session) (1–5 April, 2019), UN Doc. A/CN.9/WG.III/WP.156
UNCITRAL (2022a): Possible Reform of Investor-State Dispute Settlement (ISDS) — Standing Multilateral Mechanism: Selection and Appointment of ISDS Tribunal Members and Related Matters (42nd Session) (14–18 February, 2022), UN Doc. A/CN.9/WG.III/WP.213
UNCITRAL (2023a): Possible Reform of Investor-State Dispute Settlement (ISDS) — Draft Provisions on Procedural and Cross-Cutting Issues (46th Session) (9–13 October 2023), UN Doc. A/CN.9/WG.III/WP.231
UNCITRAL (2023b): Draft code of conduct for arbitrators in international investment dispute resolution and commentary (46th Session) (3–21 July 2023), UN Doc. A/CN.9/1148
UNCITRAL (2023c): Draft Code of Conduct for Judges in International Investment Dispute Resolution and Commentary (46th Session) (3–21 July, 2023), UN Doc. A/CN.9/1149
UNCITRAL (2023d): Possible Reform of Investor-State Dispute Settlement (ISDS) — Draft Provisions on Mediation (45th Session) (27–31 March, 2023), UN Doc. A/CN.9/WG.III/WP.226
UNCITRAL (2023e): Possible Reform of Investor-State Dispute Settlement (ISDS) — Appellate Mechanism (44th Session) (23–27 January, 2023), UN Doc. A/CN.9/WG.III/WP.224
UNCITRAL (2024a): Possible Reform of Investor-State Dispute Settlement (ISDS) — Draft Guidelines on Prevention and Mitigation of International Investment Disputes (47th Session) (22–26 January 2024), UN Doc. A/CN.9/WG.III/WP.235
UNCITRAL (2024b): Possible Reform of Investor-State Dispute Settlement (ISDS) — Draft Statute of an Advisory Centre (47th Session) (22–26 January, 2024), UN Doc. A/CN.9/WG.III/WP.236
UNCITRAL (2024c): Working Group III: Investor-State Dispute Settlement Reform (48th session) (1–5 April, 2024). Online: https://uncitral.un.org/en/working_groups/3/investor-state
UNCTAD (2015): Investment Policy Framework for Sustainable Development (2015 Edition). UNCTAD Doc. UNCTAD/DIAE/PCB/2015/5. Online: https://unctad.org/system/files/official-document/diaepcb2015d5_en.pdf
UNCTAD (2016): Germany – Pakistan BIT (1959). Online: https://investmentpolicy.unctad.org/international-investment-agreements/treaties/bit/1732/germany---pakistan-bit-1959-
UNCTAD (2017a): Phase 2 of IIA reform: Modernizing the Existing Stock of Old-Generation Treaties (June, 2017). Online: https://unctad.org/system/files/official-document/diaepcb2017d3_en.pdf
UNCTAD (2017b): World Investment Report 2017 — Investment and the Digital Economy (2017). Online: https://unctad.org/system/files/official-document/wir2017_en.pdf
UNCTAD (2018): UNCTAD’s Reform Package for the International Investment Regime (2018 Edition): Online: https://investmentpolicy.unctad.org/uploaded-files/document/UNCTAD_Reform_Package_2018.pdf
UNCTAD (2023a): International Investment Agreements Navigator. 10 February, 2023. Online: https://investmentpolicy.unctad.org/international-investment-agreements
UNCTAD (2023b): Total number of known investment treaty cases rises to 1257. Investmentpolicy.unctad.org, 19 April, 2023. Online: https://investmentpolicy.unctad.org/news/hub/1717/20230419-total-number-of-known-investment-treaty-cases-rises-to-1-
VANDEVELDE, Kenneth J. (2005): A Brief History of International Investment Agreements. UC Davis Journal of International Law & Policy, 12(1), 157–194. Online: http://ssrn.com/abstract=1478757
VAN HARTEN, Gus (2017): Is It Time to Redesign or Terminate Investor-State Arbitration? Cigionline.org, 11 April, 2017. Online: https://www.cigionline.org/articles/it-time-redesign-or-terminate-investor-state-arbitration
VÍG, Zoltán – HAJDU, Gábor (2018): CETA and Regulatory Chill. In NAGY, Csongor István (ed.): Investment Arbitration and National Interest. Indianapolis: Council on International Law and Policy, 44–54. Online: https://publicatio.bibl.u-szeged.hu/22493/6/3341769.pdf
WOUTERS, Jan – DUQUET, Sanderijn – HACHEZ, Nicolas (2013): International Investment Law: The Perpetual Search for Consensus. In DE SCHUTTER, Olivier – SWINNEN, Johan – WOUTERS, Jan (eds.): Foreign Direct Investment and Human Development. London and New York: Routledge, 25–69. Online: https://doi.org/10.4324/9780203076880-8
WOUTERS, Jan – DE MAN, Philip – CHANET, Leen (2009): The Long and Winding Road of International Investment Agreements: Toward a Coherent Framework for Reconciling the Interests of Developed and Developing Countries. Human Rights & International Legal Discourse, 3(2), 263–300.
ZAMIR, Noam (2021): The Issue of Costs: How Much Does ISDS Cost and Who Bears the Cost? In CHAISSE, Julien – CHOUKROUNE, Leïla – JUSOH, Sufian: Handbook of International Investment Law and Policy. Singapore: Springer, 1455–1474. Online: https://doi.org/10.1007/978-981-13-5744-2_69-1
ZÁRATE, José Manuel Álvarez – BALTAG, Crina – BEHN, Daniel – BONNITCHA, Jonathan – DE LUCA, Anna – HESTERMEYER, Holger – LANGFORD, Malcolm – MISTELIS, Loukas – RODRÍGUEZ, Clara López – SHAFFER, Gregory – WEBER, Simon (2020): Duration of Investor-State Dispute Settlement Proceedings. The Journal of World Investment & Trade, 21(2–3), 300–335. Online: https://doi.org/10.1163/22119000-12340174
ZHU, Ying (2018): Fair and Equitable Treatment of Foreign Investors in an Era of Sustainable Development. Natural Resources Journal, 58(2), 319–364. Online: https://www.jstor.org/stable/26509981
Cases
CMS Gas Transmission Company v. The Republic of Argentina (2001), ICSID Case No. ARB/01/8
Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic (2001), ICSID Case No. ARB/01/3
Lone Pine Resources Inc. v. The Government of Canada (2013), ICSID Case No. UNCT/15/2
LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc .v. Argentine Republic (2002), ICSID Case No. ARB/02/1
Philip Morris Asia Limited v. The Commonwealth of Australia (2011), UNCITRAL, PCA Case No. 2012-12
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay (2010), ICSID Case No. ARB/10/7
Sempra Energy International v. The Argentine Republic (2002), ICSID Case No. ARB/02/16.
Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic (2007), ICSID Case No. ARB/07/26
Vattenfall AB, Vattenfall Europe AG, Vattenfall Europe Generation AG v. Federal Republic of Germany (2009), ICSID Case No. ARB/09/6