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Domestic Investment Law

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The Protection of Foreign Investments in Mongolia

Part of the book series: European Yearbook of International Economic Law ((EYIELMONO,volume 2))

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Abstract

Besides international investment treaties, ‘domestic investment laws’ play an important role for the protection of foreign investments. In fact, every foreign investment is primarily governed by the domestic laws of the host country concerned, subject to their compatibility with relevant international (treaty) obligations. This not only applies in the domestic context of application of national laws if the host State’s domestic legal order acknowledges the supremacy of international (treaty) law over conflicting national rules. Arbitral tribunals constituted under international investment treaties also consider rules of domestic law. As pointed out in the investment treaty-based investor-State arbitration of Paushok v. Mongolia, the law governing the investor-State dispute “is public international law and the law of Mongolia as far as it is relevant.”

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Notes

  1. 1.

    See also Grisel, ‘The Sources of Investment Law’, in Douglas, Pauwelyn and Viñuales (eds.), The Foundations of International Investment Law: Bringing Theory into Practice (Oxford University Press, 2014) 213, 222.

  2. 2.

    See National Grid v. Argentina, Award, 3 November 2008, para. 84 (according to which the National Grid Tribunal “dealt with the law of the host State as a matter of law, dispelling the notion that Argentine law may be considered a mere matter of fact”).

  3. 3.

    Paushok v. Mongolia, Award on Jurisdiction and Liability, 28 April 2011, para. 30.

  4. 4.

    China-Mongolia BIT 1991, Art. 1 (emphasis added).

  5. 5.

    See Salini v. Morocco, Decision on Jurisdiction, 23 July 2003, para. 46. See already supra at 2.4.2.9 (“International Human Rights Obligations”).

  6. 6.

    See supra at 2.4.2.1.

  7. 7.

    See also Spiermann, ‘Investment Arbitration: Applicable Law’, in Bungenberg, et al. (eds.), International Investment Law: A Handbook (C.H. Beck, Hart Publishing, Nomos, 2015) 1373, 1387–8, para. 43.

  8. 8.

    Exemplarily on Germany, see Schill, ‘Der Schutz von Auslandsinvestitionen in Deutschland im Mehrebenensystem: Deutsches, Europäisches und Internationales Recht’ (2010) 4 AöR 498, 503–13.

  9. 9.

    Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428.

  10. 10.

    Mongolian Law on Investment 2013, published in the Official State Journal, Töriin Medeelel, 2013 No. 41 (‘MIL’). See Annex.

  11. 11.

    See Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011) para. 3. Published since 1973, ICSID’s multi-volume loose-leaf collection ‘Investment Laws of the World’ (Oceana Publications) features 10 volumes on domestic investment legislation in over 140 countries.

  12. 12.

    See Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011) para. 9. On friendship, commerce and navigation treaties, see already supra at 2.1.2.1.

  13. 13.

    Salacuse, The Three Laws of International Investment (Oxford University Press, 2013) 91.

  14. 14.

    See Shan, ‘Part One: General Report’, in Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 3, 10–2, table 1 (referring to Australia, Canada, Greece, and South Korea).

  15. 15.

    See Salacuse, The Three Laws of International Investment (Oxford University Press, 2013) 90 (noting that special domestic investment laws seem to exist in virtually all developing countries in the world).

  16. 16.

    See also Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428; Salacuse, The Three Laws of International Investment (Oxford University Press, 2013) 92.

  17. 17.

    See supra at 2.3.1.

  18. 18.

    In this study, the term ‘erga omnes’ is used to describe legal obligations assumed by host States in domestic laws towards all (foreign) investors within their jurisdiction (in contrast to a State’s international erga omnes obligations owed towards the community of States as a whole; see insofar, e.g., Frowein, ‘Obligations Erga Omnes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2008)). On the question of whether umbrella clauses in international investment treaties cover erga omnes guarantees assumed by host States vis-à-vis foreign investors in their domestic laws, see infra at 4.5.2.

  19. 19.

    See also Besch, ‘Typical Questions Arising within Negotiations’, in Bungenberg, et al. (eds.), International Investment Law: A Handbook (C.H. Beck, Hart Publishing, Nomos, 2015) 93, 121, para. 87.

  20. 20.

    See Maniruzzaman, ‘National Laws Providing for Stability of International Investment Contracts: A Comparative Perspective’ (2007) 1 JWIT 1 (with examples of Peru, Panama, or Kazakhstan); Cameron, International Investment Energy Law: The Pursuit of Stability (Oxford University Press, 2010) 62, para. 2.07.

  21. 21.

    See insofar supra at 2.4.2.3 and infra at 4.3.1.2.

  22. 22.

    See Salacuse, The Three Laws of International Investment (Oxford University Press, 2013) 135. See also Diaz-Candia, ‘The Role of Municipal Laws in Investment Arbitrations’, in Bjorklund (ed.), Yearbook on International Investment Law & Policy 2012–2013 (Oxford University Press, 2014) 517, and the references infra at 4.3.1.2.

  23. 23.

    See infra at 4.3.1.3.

  24. 24.

    On the minimum standard of treatment owed by host States vis-à-vis foreigners under customary international law, see already supra at 2.1.5.1.

  25. 25.

    Mongolian Law on Investment 2013, published in the Official State Journal, Töriin Medeelel, 2013 No. 41 (‘MIL’). See Annex.

  26. 26.

    See Nelle, ‘Investieren in der Mongolei’ (2002) 9 WiRO 263, 264. See also Stelter and Günther, ‘Rechtliche Aspekte der marktwirtschaftlichen Transformation in der Mongolei’ (1992) 38 Osteuropa-Recht 307.

  27. 27.

    See OECD, Investment Guide for Mongolia (Paris, 2000) 50.

  28. 28.

    Constitution of Mongolia 1992, published in the Official State Journal, Töriin Medeelel, 1992 No. 1 (‘Constitution’).

  29. 29.

    Reportedly, the alignment of Mongolia’s domestic laws with the economic laws of European countries was criticised by Japanese and South Korean investors (see Barkmann, ‘Mongolei: Gesetz über Auslandsinvestitionen’ (1999) 6 WiRO 220).

  30. 30.

    Foreign Investment Law 1993, published in the Official State Journal, Töriin Medeelel, 1993 No. 4–5 (‘Foreign Investment Law 1993’).

  31. 31.

    Foreign Investment Law 1993, published in the Official State Journal, Töriin Medeelel, 1993 No. 4–5, as amended on 3 January 2002 (‘Foreign Investment Law 2002’).

  32. 32.

    Law on the Regulation of Foreign Investment in Entities Operating in Strategic Sectors 2012, published in the Official State Journal, Töriin Medeelel, 2012 No. 23 (‘Law on Foreign Investment in Strategic Sectors’).

  33. 33.

    Foreign Investment Law 1993, published in the Official State Journal, Töriin Medeelel, 1993 No. 4–5 (‘Foreign Investment Law 1993’). For an overview of the 1993 Foreign Investment Law of Mongolia and an unofficial German language translation, see Barkmann, ‘Mongolei: Gesetz über ausländische Investitionen’ (1999) 6 WiRO 220.

  34. 34.

    See Foreign Investment Law 1993, Art. 1.

  35. 35.

    Ibid., Art. 3.1.

  36. 36.

    See ibid., Art. 6.

  37. 37.

    See ibid., Art. 4.

  38. 38.

    See also OECD, Investment Guide for Mongolia (Paris, 2000) 48.

  39. 39.

    See Foreign Investment Law 1993, Art. 12.4.

  40. 40.

    See ibid., Art. 20.4.

  41. 41.

    See ibid., Art. 20.3.

  42. 42.

    See already supra at 2.4.4.4.

  43. 43.

    Foreign Investment Law 1993, Arts. 10.1.1–10.1.3.

  44. 44.

    See ibid., Art. 10.1.4.

  45. 45.

    Ibid., Art. 10.2.

  46. 46.

    See ibid., Art. 24.

  47. 47.

    See ibid., Art. 25.

  48. 48.

    See Nelle, ‘Investieren in der Mongolei’ (2002) 9 WiRO 263, 265.

  49. 49.

    See U.S. Department of State, FY 2001 Country Commercial Guide: Mongolia (Washington, D.C., 2000) 18 et seq.: “These export incentives constitute ‘red light’ subsidies … Mongolia undertook to eliminate these subsidies in a progressive manner by December 31, 2002 …. The [tax] holiday provisions are not likely to be lifted by the set deadline. However, this will not contravene GATT/WTO laws ipso facto because Mongolia, as a developing country member, has reserved its right to request an extension from the committee on subsidies and countervailing measures.”

  50. 50.

    See Nelle, ‘Investieren in der Mongolei’ (2002) 9 WiRO 263, 265. The U.S. Department of State classified the legal practice already as “transparent and less complicated than in other Asian countries” (U.S. Department of State, FY 2001 Country Commercial Guide: Mongolia (Washington, D.C., 2000) 5).

  51. 51.

    Foreign Investment Law 1993, published in the Official State Journal, Töriin Medeelel, 1993 No. 4–5, as amended on 3 January 2002 (‘Foreign Investment Law 2002’). An unofficial English language translation is available at: <http://www.wipo.int/wipolex/en/details.jsp?id=3045> last accessed 11 May 2017.

  52. 52.

    See immediately below (“Legal Preferences and Incentives for Investors”).

  53. 53.

    See Foreign Investment Law 2002, Arts. 6.5 and 6.6.

  54. 54.

    See OECD, Investment Guide for Mongolia (Paris, 2000) 55.

  55. 55.

    See Foreign Investment Law 2002, Art. 18.

  56. 56.

    For an overview, see Nelle, ‘Investieren in der Mongolei’ (2002) 9 WiRO 263, 266. See also Nelle, ‘Mongolisches Steuerrecht’ (2001) 8 WiRO 229.

  57. 57.

    Paushok v. Mongolia, Award on Jurisdiction and Liability, 28 April 2011, para. 97.

  58. 58.

    Law on Imposition of Price Increase (Windfall) Taxes on some Commodities 2006, published in the Official State Journal, Töriin Medeelel, 2006 No. 20. See already supra at 2.4.4.2. See also infra at 4.3.1.2 and 4.5.4.1.

  59. 59.

    See Foreign Investment Law 2002, Art. 10(2): “Foreign investors shall have the following obligations: 1) to observe the laws of Mongolia; 2) follow commitments stated in the Agreement and Statute of the business entity with foreign investment, branch of a foreign legal entity and in Investment agreement; 3) to implement measures to ensure the protection and restoration of the natural environment; 4) to respect the customs and traditions of the people of Mongolia.”

  60. 60.

    See ibid., Art. 2(2): “If an international treaty to which Mongolia is a party is inconsistent with this law, then the provisions of the international treaty shall prevail.”

  61. 61.

    Law on the Regulation of Foreign Investment in Entities Operating in Strategic Sectors 2012, published in the Official State Journal, Töriin Medeelel, 2012 No. 23 (‘Law on Foreign Investment in Strategic Sectors’). An unofficial English language translation is available at: <http://en.mongolianminingjournal.com/content/33226.shtml> last accessed 11 May 2017.

  62. 62.

    See also Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions- und Rohstoffrecht’ (2015) 6 WiRO 165, 166.

  63. 63.

    See World Bank, ‘Mongolia Quarterly Economic Update (June 2012)’ (World Bank Working Paper No. 70210, World Bank, 1 June 2012) 7.

  64. 64.

    See also Sumiya, ‘Law and Development, FDI, and the Rule of Law in post-Soviet Central Asia: The Case of Mongolia’, in McAlinn and Pejovic (eds.), Law and Development in Asia (Routledge, 2012) 137, 141.

  65. 65.

    UNCTAD, Investment Policy Review: Mongolia (UN, 2013) 36.

  66. 66.

    See ibid., 26–7.

  67. 67.

    See SouthGobi, ‘Mineral Resources Authority of Mongolia announces suspension of exploration and mining activities on certain licenses’, News Release (online), 16 April 2012. See also SouthGobi, ‘SouthGobi Resources announces Notice of Investment Dispute filed against Mongolian Government’, News Release (online), 11 July 2012 (according to which the subsidiary SGQ Coal Investment Pte. Ltd., which owned the Mongolian operating subsidiary SouthGobi Sands LLC, filed a notice of an investor-State dispute because of Mongolia’s alleged failure to execute pre-mining agreements in relation to certain exploration licenses).

  68. 68.

    See SouthGobi, ‘SouthGobi Resources receives three pre-mining agreements in Mongolia’, News Release (online), 22 August 2013.

  69. 69.

    See already supra at 2.4.4.4.

  70. 70.

    For an overview of the question of perceived concerns about foreign State-owned investors and investments (with examples of Chinese State-owned investment (attempts) in strategic sectors worldwide, including in the U.S. oil industry) and related political and legal controversies, see Gallagher, ‘Role of China in Investment: BITs, SOEs, Private Enterprises, and Evolution of Policy’ (2016) 1 ICSID Rev. – For. Inv. L. J. 88, 91–3 (with further references).

  71. 71.

    See Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions- und Rohstoffrecht’ (2015) 6 WiRO 165, 166.

  72. 72.

    See Foreign Acquisitions and Takeovers Act 1975 (Australia), s. 18 (referring to national security, competition, revenues, impact on the economy or community, and character of the investor (adherence to the law and State independence)).

  73. 73.

    See Foreign Trade and Payments Act 2013 (Germany), s. 4 and Foreign Trade and Payments Ordinance 2013 (Germany), ss. 55–56, 58.

  74. 74.

    Law on Foreign Investment in Strategic Sectors 2012, Art.1 (emphasis added).

  75. 75.

    Ibid., Art. 5.

  76. 76.

    See ibid., Art. 9.

  77. 77.

    See ibid., Art. 8.1 (the same applied for past acquisitions before the Law entered into force (see ibid., Art. 8.2).

  78. 78.

    See ibid., Art. 6. Permits were also required if transactions conferred “rights to enforce the directions of the management …, determine its decisions and exercise the economic activities”, or were “likely to ascertain the buyer’s and the seller’s monopoly in the commercialization of raw minerals and their products at the international and Mongolian markets” or “to impact directly or indirectly the market or the price of Mongolian mining products for export.”

  79. 79.

    See ibid., Art. 4.7.

  80. 80.

    See also UNCTAD, Investment Policy Review: Mongolia (UN, 2013) 40.

  81. 81.

    Ibid., 27.

  82. 82.

    In UNCTAD’s view, a domestic legal system “revision … [was] necessary to restore adequate legal certainty and provide a coherent message regarding the country’s openness to investors, while ensuring that the public concerns regarding competition, environment and health are adequately protected by strengthening the ministries and agencies with the relevant expertise” (UNCTAD, Investment Policy Review: Mongolia (UN, 2013) 40–1).

  83. 83.

    For an overview, see Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions- und Rohstoffrecht’ (2015) 6 WiRO 165. See also Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 2: Umwelt-, Finanz- und Handelsrecht’ (2015) 7 WiRO 198.

  84. 84.

    See insofar Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions- und Rohstoffrecht’ (2015) 6 WiRO 165, 166.

  85. 85.

    An unofficial English language translation of the 2013 Mongolian Investment Law is available at: <http://investmongolia.gov.mn/en/?page_id=637> last accessed 11 May 2017.

  86. 86.

    MIL 2013, Art. 1.

  87. 87.

    Emphasis added.

  88. 88.

    MIL 2013, Art. 3.1.1.

  89. 89.

    Ibid., Art. 3.1.3.

  90. 90.

    Ibid., Art. 3.1.5.

  91. 91.

    Ibid., Art. 4.1 (emphasis added).

  92. 92.

    Ibid., Art. 5.

  93. 93.

    The investment agency provides legal support and services, promotes the legal environment of investments, renders support for investors when planning investments, provides consulting and online services, renders support when investors intend to stabilise their legal environment, collects investment-related data, issues semi-annual and annual investment statistics, and also prepares investment policy proposals (see MIL 2013, Arts. 8 and 9).

  94. 94.

    See also Cremer, ‘§ 235: Allgemeine Regeln des Völkerrechts’, in Isensee and Kirchhof (eds.), Handbuch des Staatsrechts (C.F. Müller, 3rd ed., 2013) vol. XI, 369, 397, para. 38.

  95. 95.

    See already supra at 2.3.1.2. On international investment treaties of Mongolia that extend national treatment obligations and most-favoured-nation obligations to the investment pre-establishment stage, see already supra at 2.4.2.1 (“Evaluation of International Investment Treaties”) and 2.4.2.2 (“Evaluation of International Investment Treaties”).

  96. 96.

    See also Joubin-Bret, ‘Admission and Establishment in the Context of Investment Protection’, in Reinisch (ed.), Standards of Investment Protection (Oxford University Press, 2008) 9, 10.

  97. 97.

    See supra at 3.2.1.3.

  98. 98.

    See also Blyschak, ‘State-Owned Enterprises and International Investment Treaties: When are State-Owned Entities and their Investments Protected?’ (2011) 2 JILIR 1, 2.

  99. 99.

    The 2009 Nuclear Energy Law of Mongolia provides special rules for investments in the nuclear energy sector. If the Mongolian State participates in the exploration of radioactive minerals, it owns not less than 51% of the investment operation (see Nuclear Energy Law 2009, published in the Official State Journal, Töriin Medeelel, 2009 No. 29, Art. 5.2). In all other cases, the Mongolian State acquires 34% of the investment project. For an overview of the Mongolian Nuclear Energy Law, see Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions– und Rohstoffrecht’ (2015) 6 WiRO 165, 169.

  100. 100.

    On the authorisation of foreign investments in China, see Congyan, ‘Part Two: Jurisdictional Reports – China’, in Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 243, 259.

  101. 101.

    See MIL 2013, Arts. 7.1.1 and 7.1.2.

  102. 102.

    See UNCTAD, World Investment Report 2011 (UN, 2011) 32. On State-owned entities and investment treaty arbitration, see Konrad, ‘Protection of Investments Owned by States’, in Bungenberg, et al. (eds.), International Investment Law: A Handbook (C.H. Beck, Hart Publishing, Nomos, 2015) 545, 547–52.

  103. 103.

    See also Blyschak, ‘State-Owned Enterprises in International Investment’ (2016) 1 ICSID Rev. – For. Inv. L. J. 5; Shima, ‘The Policy Landscape for International Investment by Government-controlled Investors: A Fact Finding Survey’ (OECD Working Papers on International Investment No. 2015/01, OECD, 14 January 2015) 3.

  104. 104.

    With regard to necessary documents, see MIL 2013, Art. 22.1.

  105. 105.

    See ibid., Art. 22.4.

  106. 106.

    Paushok v. Mongolia, Award on Jurisdiction and Liability, 28 April 2011, para. 302.

  107. 107.

    See also Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011) para. 30; Shan, ‘Part One: General Report’, in Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 3, 43–4.

  108. 108.

    See also Salacuse, The Three Laws of International Investment (Oxford University Press, 2013) 103.

  109. 109.

    See MIL 2013, Art. 11.

  110. 110.

    See ibid., Art. 13.6.

  111. 111.

    On the legal effect of tax-rate-stabilisation certificates at the international law level, see infra at 4.3.1.2 on legal stability under FET clauses and 4.5.2 on umbrella clauses and unilateral promises by host States.

  112. 112.

    See MIL 2013, Art. 3.1.9.

  113. 113.

    See ibid., Art. 18.1.

  114. 114.

    See ibid., Art. 16.3.

  115. 115.

    Emphasis added.

  116. 116.

    Emphasis added.

  117. 117.

    See MIL 2013, Art. 19.1.6 in combination with Art. 15.3.

  118. 118.

    See ibid., Art. 19.1.9. See Chap. 4 of this study on the conclusion, execution, and effect of Article-20-MIL-investment contracts in Mongolia.

  119. 119.

    See also MIL 2013, Art. 20.5: “If the legal entity holding the stabilization certificate with investment of more than MNT 500 billion made a request, an investment contract may be concluded with the relevant investor.”

  120. 120.

    See especially infra at 4.3.1.2 and 4.5.2.

  121. 121.

    See Nelle, ‘Privatisierung in der Mongolei erhält neuen Auftrieb’ (2001) 11 WiRO 325, 331.

  122. 122.

    Emphasis added.

  123. 123.

    See Law on Allocation of Land to Mongolian Citizens for Ownership 2002, published in the Official State Journal, Töriin Medeelel, 2002 No. 27, Art. 4 (emphasis added). An unofficial English language translation of the Law is available at: <http://landwise.resourceequity.org/record/1715> last accessed 11 May 2017. See also Nelle, ‘Immobilienrecht der Mongolei – Teil 1: Privatisierung, Sachenrecht, Wohneigentum’ (2004) 10 WiRO 293, 294.

  124. 124.

    Emphasis added.

  125. 125.

    Emphasis added.

  126. 126.

    Land Law 2002, published in the Official State Journal, Töriin Medeelel, 2002 No. 27.

  127. 127.

    Emphasis added.

  128. 128.

    This investment-treaty-arbitration exception is likely to follow from Article 10.2 of the Mongolian Constitution (according to which Mongolia shall fulfil its obligations resulting from international treaties) and from the prevalence of Mongolia’s international treaties over (conflicting) domestic legislation (see supra at 2.1.5.3).

  129. 129.

    Article 12.2 of the 2013 Mongolian Investment Law refers to the legislation applicable to all these promotional measures.

  130. 130.

    See also Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions- und Rohstoffrecht’ (2015) 6 WiRO 165, 167.

  131. 131.

    Emphasis added. See also Dierkes, ‘The Legislative Process in Mongolia’ on Mongolia Focus (27 September 2011). The Parliament only consists of 76 Members (see Constitution 1992, Art. 21.1).

  132. 132.

    See Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428 (comparing a total of 54 jurisdictions); Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) (comparing 21 jurisdictions). Generally, see, e.g., Salacuse, The Three Laws of International Investment: National, Contractual, and International Frameworks for Foreign Capital (Oxford University Press, 2013); Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011).

  133. 133.

    See the multi-volume loose-leaf collection with domestic investment legislation from all around the world (published since 1973) of ICSID: ICSID, Investment Laws of the World (New York: Oceana Publications, 2014).

  134. 134.

    See also Shan, ‘Part One: General Report’, in Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 3, 25.

  135. 135.

    See also Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011) para. 29.

  136. 136.

    See already supra at 3.2.1.1 (“Legal Preferences and Incentives for Foreign Investors”).

  137. 137.

    See already supra at 3.2.1.3 (“Legal Content and Restricting Measures”).

  138. 138.

    See Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428, 436–7.

  139. 139.

    See UNCTAD, ‘Investment Policy Monitor’ (UNCTAD Investment Policy Monitor No. 15, March 2016) 4.

  140. 140.

    Protection of Investment Act 2015 (South Africa), s. 8.

  141. 141.

    See also Nelle, ‘Rohstoffpolitik der Mongolei im Spannungsfeld der Interessen – Teil 1: Investitions- und Rohstoffrecht’ (2015) 6 WiRO 165, 167.

  142. 142.

    Emphasis added.

  143. 143.

    Emphasis added.

  144. 144.

    See also Nelle, ‘Privatisierung in der Mongolei erhält neuen Auftrieb’ (2001) 11 WiRO 325, 330.

  145. 145.

    Emphasis added.

  146. 146.

    See Shan, ‘Part One: General Report’, in Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 3, 48 (Table 5); Salacuse, The Three Laws of International Investment (Oxford University Press, 2013) 100–1.

  147. 147.

    See Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428, 440, table 4.

  148. 148.

    Ibid., 428, 442.

  149. 149.

    See ibid., 428, 440.

  150. 150.

    For an overview of legal standards of compensation in case of expropriation in international investment treaties, see, e.g., Newcombe and Paradell, Law and Practice of Investment Treaties (Kluwer Law International, 2009) 383 et seq.

  151. 151.

    See Shan, ‘Part One: General Report’, in Shan (ed.), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 3, 53.

  152. 152.

    Khan Resources v. Mongolia, Award, 2 March 2015, para. 314. See already supra at 2.4.4.4.

  153. 153.

    See supra at 2.4.2.6.

  154. 154.

    See Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428, 437–8.

  155. 155.

    See Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011) para. 29; Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428, 438.

  156. 156.

    See Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428, 435 (referring to Angola, Bangladesh, and Vietnam). On the notion of fair-and-equitable-treatment clauses in international investment treaties, see already supra at 2.4.2.3.

  157. 157.

    Protection of Investment Act 2015 (South Africa), s. 6.

  158. 158.

    Investment Law 2016 (Myanmar), Art. 48.

  159. 159.

    On the different forms of consent by host States to investor-State arbitration in displacement of dispute settlement in domestic courts, see already supra at 2.4.3.1. With special regard to mutual (contractual) arbitration agreements directly entered into by and between foreign investors and the host State, see infra at 4.3.3.

  160. 160.

    See Parra, ‘Principles Governing Foreign Investment, as Reflected in National Investment Codes’ (1992) 2 ICSID Rev. – For. Inv. L. J. 428, 444. On the ICSID Convention, see supra at 2.5.2.

  161. 161.

    See also Dolzer and Schreuer, Principles of International Investment Law (Oxford University Press, 2nd ed., 2013) 257; Burgstaller and Waibel, ‘Investment Codes’, in Wolfrum (ed.), EPIL (Oxford University Press, 2011) para. 33. For an overview of investor-State arbitration based on domestic investment laws, see also Mbengue, ‘Consent to Arbitration through National Investment Legislation’ on IISD Investment Treaty News (19 July 2012).

  162. 162.

    See already supra at 2.4.3.1 (“Consent Through Dispute Settlement Provisions in Domestic Investment Laws”).

  163. 163.

    For an overview of general advantages of investor-State arbitration, see already supra at 2.4.3.2.

  164. 164.

    On contractual arbitration agreements between investors and host State, see infra at 4.3.3 and 4.4.3.

  165. 165.

    See Khan Resources v. Mongolia, Decision on Jurisdiction, 25 July 2012, para. 3: The “Claimants commenced these proceedings against the Respondents pursuant to Article 12 of the Founding Agreement …, Article 26 of the [Energy Charter Treaty], Article 25 of the Foreign Investment Law of Mongolia … and [the UNCITRAL Arbitration Rules].”

  166. 166.

    See Schreuer, et al., The ICSID Convention: A Commentary (Cambridge University Press, 2nd ed., 2009) Art. 25, para. 426. For example, in the case of SPP v. Egypt the claimant had sent a letter of acceptance of the arbitration offer about one year before the initiation of proceedings (see SPP v. Egypt, Decision on Jurisdiction I, 27 November 1985, para. 48).

  167. 167.

    See Schreuer, et al., The ICSID Convention: A Commentary (Cambridge University Press, 2nd ed., 2009) Art. 25, paras. 419 and 618.

  168. 168.

    See supra at 2.4.3.3 (“(Pre-) Conditions of Investment Treaty-Based Investor-State Arbitration”).

  169. 169.

    See, e.g., Investment Act 1997 (Tanzania), s. 23(2): “A dispute between a foreign investor and the … Government in respect of a business enterprise which is not settled through negotiations may be submitted to arbitration in accordance with any of the following methods.” (emphasis added).

  170. 170.

    Emphasis added.

  171. 171.

    Emphasis added.

  172. 172.

    See supra at 3.2.1.4.

  173. 173.

    Emphasis added.

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    Bajar Scharaw

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Scharaw, B. (2018). Domestic Investment Law. In: The Protection of Foreign Investments in Mongolia. European Yearbook of International Economic Law(), vol 2. Springer, Cham. https://doi.org/10.1007/978-3-319-66089-9_3

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