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Human Rights in International Investment Law and Adjudication: Legal Methodology Questions

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Handbook of International Investment Law and Policy

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Abstract

This contribution begins with an overview of changing paradigms of international investment regulation, adjudication, and multilevel governance of public goods. It then discusses legal methodology challenges of applying human rights in investment adjudication and the “entry points” for invoking human rights in investment arbitration. The overview of case law on invocation of human rights by investors, home and host states, third parties, and adjudicators suggests that procedural and substantive human rights and related “systemic interpretations” play marginal roles in investment adjudication outside the European Union.

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Notes

  1. 1.

    The following discussion of theories of justice in international economic law (IEL) is based on Petersmann EU (2012) International economic law in the 21st century. Constitutional pluralism and multilevel governance of interdependent public goods. Hart, Oxford, chapters II to VI.

  2. 2.

    Cf. Hindelang S, Krajewski M (eds) (2016) Shifting Paradigms in International Investment Law, Oxford University Press, Oxford

  3. 3.

    Cf. Petersmann EU (2019) How should WTO members react to their WTO governance and WTO appellate body crises? World Trade Rev 18:503

  4. 4.

    Cf. Grosman N, Grant Cohen H, Follesdal A, Ulfstein G (eds) (2018) Legitimacy and international courts. Cambridge University Press, Cambridge

  5. 5.

    Cf. Scheinin M (2019) Human rights norms in ‘other’ international courts. Cambridge University Press, Cambridge

  6. 6.

    Cf. Petersmann EU (2017) Multilevel constitutionalism for multilevel governance of public goods. Methodology problems in international law. Bloomsbury, Oxford

  7. 7.

    Cf. the criticism by Moyn S (2018) Not enough. Human rights in an unequal world. Harvard University Press, Cambridge

  8. 8.

    Cf. Petersmann EU (2017) Methodology problems in international trade, Investment and Health Law and Adjudication. In: Cheng C-J (ed) Collected courses of the Xiamen Academy of international law, vol 11. Brill Nijhoff, Leiden, pp 228–326

  9. 9.

    Cf. Article 14 of the International Covenant on Civil and Political Rights (ICCPR): “all persons shall be equal before the courts and tribunals.” Under the ECHR, companies and other legal persons have successfully invoked the rights to a fair trial (Article 6), freedom of expression (Article 10), the right to property (Article 1 of Protocol No.1 to the ECHR), and some of the other guarantees of the ECHR; cf. Emberland M (2006) The human rights of companies: exploring the structure of ECHR protection. Oxford University Press, Oxford.

  10. 10.

    Cf. Merkouris P (2015) Article 31(3)(c) VCLT and the principle of systemic integration: normative shadows in Plato’s cave. Brill Nijhoff, Leiden

  11. 11.

    For a discussion of these five different “IEL perspectives,” see Petersmann EU (2012) International economic law in the 21st century. Constitutional pluralism and multilevel governance of interdependent public goods. Hart, Oxford, pp 43–112.

  12. 12.

    Cf. Brooks EA, Soave T (2014) Jurisdictional overlap in WTO dispute settlement and investment arbitration. ARB INT’L 30:1ff

  13. 13.

    Rawls J (1999) A theory of justice, rev. edn. Harvard University Press, Cambridge, MA, p 3

  14. 14.

    Cf. Petersmann EU (2012) International economic law in the 21st century. Constitutional pluralism and multilevel governance of interdependent public goods. Hart, Oxford, pp 43–112. On disagreements on how to constitute, limit, regulate, and justify economic markets through economic freedoms, property rights, social rights, and judicial remedies of citizens and institutional guarantees (e.g., of monetary stability, undistorted competition, sustainable development), see idem, chapters III, IV, VI, and VII.

  15. 15.

    For a detailed discussion of relevant ISDS case law, see Kube V, Petersmann EU (2018) Human rights law in international investment arbitration. In: Fontanelli F, Gattini A, Tanzi A (eds) General principles of law and international investment arbitration. Brill, The Hague, pp 221–268, 227ff.

  16. 16.

    Biloune and Marine Drive Complex Ltd v. Ghana Investments Centre and the Government of Ghana, Award Jurisdiction and Liability, 27 October 1989, 95 ILR 184

  17. 17.

    Chevron Corporation (USA) and Texaco Petroleum Corporation (USA) v Ecuador, UNCITRAL, Partial Awards on the Merits, 30 March 2010, § 166

  18. 18.

    For instance, in Fraport AG v. Philippines, the tribunal rejected jurisdiction as the investment was not made in accordance with the host state’s laws; Fraport AG Frankfurt Airport Services Worldwide v. Philippines ICSID Case No. ARB/03/25, Award, 16 August 2007, §§ 401 et seq. In Inceysa Vallisoletana S.L. v. Republic of El Salvador, the investment was made fraudulently and hence in violation of the principle of good faith. Therefore, it did not deserve the protection of the respective BIT; see Inceysa Vallisoletana S.L. v. Republic of El Salvador, Award, 2 August 2006, §§ 238–244.

  19. 19.

    “An investment will not be protected if it has been created in violation of national or international principles of good faith; by way of corruption, fraud, or deceitful conduct; or if its creation itself constitutes a misuse of the system of international investment protection under the ICSID Convention … These are general principles that exist independently of specific language to this effect in the Treaty”; Gustav F W Hamester GmbH & Co KG v. Republic of Ghana, ICSID Case No. ARB/07/24, Award, 18 June 2010, §§ 123, 124.

  20. 20.

    Pezold and others v. Republic of Zimbabwe, ICSID Case No. ARB/10/15, Procedural Order No. 2, 26 June 2012. § 57

  21. 21.

    Dupuy PM, Viñuales JE (2015) Human rights and investment disciplines: integration in Progress. In: Bungenberg M et al (eds) International investment law. Nomos, Baden-Baden, p 15ff, at 29; Stone Sweet A, della Cananea G (2014) Proportionality, general principles of law, and investor-state arbitration: a response to José Alvarez. NY Univ J Int Law Polit 46:911–954

  22. 22.

    Yukos Universal Limited (Isle of Man) v. The Russian Federation, PCA Case No. AA 227, Final Award, 18. June 2014, § 1633

  23. 23.

    Cf. Vermeer-Künzli A (2013) Diallo: between diplomatic protection and human rights. J Int’l Disp Settl 4(3):487

  24. 24.

    Cf. Kosta V, de Witte B (2019) Human rights norms in the court of justice of the European union In: Scheinin M, p 263ff

  25. 25.

    See note 16.

  26. 26.

    Id. at 30

  27. 27.

    Chevron Corporation (U.S.) & Texaco Petroleum Corporation (U.S.) v. Republic of Ecuador, PCA Case No. 34877, Interim Award, §§ 2, 3, 207 (Dec. 1, 2008)

  28. 28.

    Id. § 180

  29. 29.

    Toto Costruzioni Generali S.p.A. v. Republic of Lebanon, ICSID Case No. ARB/07/12, Decision on Jurisdiction, (Sept. 11, 2009) [hereinafter Toto v. Lebanon], § 144

  30. 30.

    Id. § 154

  31. 31.

    Toto v. Lebanon, §§ 157–60

  32. 32.

    Spyridon Roussalis v. Romania, ICSID Case No. ARB/06/1, Award, §§ 111–12. (Dec. 7, 2011)

  33. 33.

    Id. § 310

  34. 34.

    The following discussion of human rights references in investment arbitration is based on Kube V, Petersmann EU (2018) Human rights law in international investment arbitration. In: Fontanelli F, Gattini A, Tanzi A (eds) General principles of law and international investment arbitration. Brill, The Hague, pp 221–268; see also Steiniger S (2018) What’s human rights got to do with it? An empirical analysis of human rights references in investment arbitration. Leiden J Int Law 31:33–58; Baetens F (2019), Invoking human rights: a useful line of attack or a defence tool for states in investor-state dispute settlement? In: Scheinin, pp 227–262.

  35. 35.

    I. Micula et al. v. Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility (Sept. 24, 2008), § 88

  36. 36.

    Grand River Enterprises Six Nations, Ltd. et al. v. United States of America, UNCITRAL, Award, §§ 66, 182 (Jan. 12, 2011) [hereinafter Grand v. U.S.]

  37. 37.

    Id. § 67

  38. 38.

    Id. § 220

  39. 39.

    United Parcel Services of America Inc. v. Government of Canada, UNCITRAL, Investor’s Memorial (Merits Phase), §§ 645–71 (Mar. 23, 2005)

  40. 40.

    Freedom of association and the effective recognition of the right to collective bargaining are part of the ILO fundamental conventions.

  41. 41.

    United Parcel Services of America Inc. v. Government of Canada, UNCITRAL, Application for Amicus Curiae Status by the Canadian Union of Postal Workers and the Council of Canadians, §§ 36, 58 (Oct. 20, 2005)

  42. 42.

    United Parcel Services of America Inc. v. Government of Canada, UNCITRAL, Awards on the Merits, §§ 185–87 (May 24, 2007)

  43. 43.

    Hulley Enterprises Ltd. (Cyprus) v. The Russian Federation, PCA Case No. AA 226, Final Award (July 18, 2014); Yukos Universal Ltd. (Isle of Man) v. Russian Federation, PCA Case No. AA 227, Final Award, ¶ 765 (July 18, 2014); Quasar de Valors SICAV S.A. et al. v. Russian Federation, SCC Case No. 24/2007, Award, ¶ 25 (July 20, 2012); Veteran Petroleum Ltd. (Cyprus) v. Russian Federation, PCA Case No. AA 228, Final Award, ¶ 765 (July 18, 2014)

  44. 44.

    Quasar v. Russia (note 43), §§ 21–25, 42–45

  45. 45.

    Id. §§ 22–23

  46. 46.

    Id. § 24

  47. 47.

    Veteran v. Russia (note 43) § 76

  48. 48.

    Id. §765

  49. 49.

    Hesham Talaat M. Al-Warraq v. Republic of Indonesia, UNCITRAL, Final Award, §§ 178–84 (Dec. 15, 2014)

  50. 50.

    The Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3, Award, § 47 (May 6, 2013)

  51. 51.

    Id. §§ 83, 89

  52. 52.

    Id. § 172

  53. 53.

    Urbaser v Argentina, Award (2016) ICSID Case No. ARB/07/26 §§ 1144, 1188–1192, 1200

  54. 54.

    See, e.g., Compañia del Desarrollo de Santa Elena S.A. v. Republic of Costa Rica, ICSID Case No. ARB/96/1, Final Award, § 72 (Feb. 17, 2000).

  55. 55.

    According to General Comment 15, the right to water is part of the right to an adequate standard of living (Art. 11), to adequate housing and adequate food (Art. 11), and of the highest attainable standard of health (Art. 12); Committee on Economic, Social and Cultural Rights (CESCR), General Comment 15, The right to water, § 3, U.N. Doc. E/C.12/2002/11 (Jan. 20, 2003).

  56. 56.

    On the different aspects of the human right to water as protected in HRL, see Thielbörger P (2014) The right(s) to water. The multilevel governance of a unique human right. Springer, Heidelberg.

  57. 57.

    Azurix v. Argentina Republic, ICSID Case No. ARB/01/12, Award, § 261 (July 14, 2006). For comprehensive analyses see Meshel T (2015) Human rights in investor-state arbitration: the human right to water and beyond. J Int’l Disp Settl 6(2):277.

  58. 58.

    Siemens v. Argentina, ICSID CASE No. ARB/02/8, Award, §§ 79, 121 (Feb. 6, 2007)

  59. 59.

    Suez et al. v. The Argentine Republic, ICSID Case No. ARB/03/19, Decision on Liability (July 30, 2010), §§ 252, 256

  60. 60.

    Id. ¶ 260

  61. 61.

    SAUR International S.A. v. The Argentine Republic, ICSID Case No. ARB/04/4, Decision on Jurisdiction and Liability, ¶ 328 (June 6, 2012)

  62. 62.

    Id. § 330–31

  63. 63.

    For example, CMS Gas Transmission Company v. The Argentine Republic, ICSID Case No. ARB/01/8, Award, §§ 315–17 (May 12, 2005)

  64. 64.

    Continental Casualty v. Argentine Republic, ICSID Case No. ARB/03/9, Award, §§ 192–95 (Sept. 5, 2008)

  65. 65.

    Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/01, Decision on Liability, 308–14 (Dec. 27, 2010)

  66. 66.

    Cf. Stone Sweet/della Cananea (2014)

  67. 67.

    Philip Morris Brands Sàrl, Philip Morris Products SA and Abal Hermanos SA v Republic of Uruguay, Award (2016) ICSID Case No. ARB/10/7

  68. 68.

    Philip Morris v. Uruguay, Award (note 68) § 305. The application of the ECtHR’s “margin of appreciation doctrine” was sharply criticized in the Concurring and Dissenting Opinion of Co-Arbitrator Gary Born (2016) ICSID Case No. ARB/10/7, §§ 87, 138.

  69. 69.

    Methanex Corp. v. United States of America, UNCITRAL, Decision of the Tribunal on Petitions from Third Persons to intervene as “Amici Curiae” (Jan. 15, 2001)

  70. 70.

    Id. § 49

  71. 71.

    Suez et al. v. The Argentine Republic, ICSID Case No. ARB/03/19, Order in Response to a Petition for Transparency and Participation as Amicus Curiae (May 19, 2005)

  72. 72.

    Id. § 20

  73. 73.

    Id. § 19

  74. 74.

    See note 59, § 262

  75. 75.

    UPS v. Canada, supra note 42

  76. 76.

    Cf. Harrison J (2009) Human rights arguments in amicus curiae submissions: promoting social justice? In: Dupuy P, Francioni F, Petersmann EU (eds) Human rights in international investment law and arbitration. Oxford University Press, Oxford, pp 396–406

  77. 77.

    Philip Morris v. Uruguay, note 67, § 30

  78. 78.

    Suez/Vivendi v. Argentina Order, ICSID Case No. ARB/03/17, Order in Response to a Petition for Participation as Amicus Curiae, § 24 (Mar. 17, 2006)

  79. 79.

    See note 57.

  80. 80.

    Tecmed S.A. v. The United Mexican States, ICSID Case No ARB (AF)/00/2, Award, §§ 116, 122 (May 29, 2003)

  81. 81.

    Saipem S.p.A. v. The People’s Republic of Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures, ¶¶ 130, 132 (Mar. 21, 2007)

  82. 82.

    See, e.g., Técnicas v. Mexico, supra note 58 ¶ 122, with reference to ECtHR case law.

  83. 83.

    Mondev International Ltd. v. United States of America, ICSID Case No ARB(AF)/99/2 (NAFTA), Award, § 144 (Oct. 11, 2002)

  84. 84.

    Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award, § 78 (Apr. 15, 2009)

  85. 85.

    Suez (note 60), § 262

  86. 86.

    Case C-284/16, The Slovak Republic v. Achmea BV, ECLI:EU:C:2018:158, 6 March 2018

  87. 87.

    Cf. Protection of Intra-EU Investment, Communication from the Commission to the European Parliament and the Council, COM (2018) 547 (19/7/2018), at p. 26

  88. 88.

    Cf. Petersmann EU (2019) Human rights, Constitutional justice and international economic adjudication. In: Scheinin, pp 312–352

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  1. European University Institute, Florence, Italy

    Ernst-Ulrich Petersmann

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  1. Faculty of Law, The Chinese University of Hong Kong, Shatin, Hong Kong

    Julien Chaisse

  2. Professor of International Law; and Director of the Research and Innovation Theme in Democratic Citizenship, University of Portsmouth, Portsmouth, UK

    Leïla Choukroune

  3. Institute of Malaysia and International Studies, National University of Malaysia, Bangi, Selangor, Malaysia

    Sufian Jusoh

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Petersmann, EU. (2019). Human Rights in International Investment Law and Adjudication: Legal Methodology Questions. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_27-1

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