Abstract
This chapter explores the driving role of case law in the shaping of FET. It is argued that the approach followed in investor-State arbitration is the ‘taking into account’ approach, which means that the arbitrator is obliged to consider previous decisions, but may disregard them where reasons of substantive justice, or the mere need to foster a proper development of the law, suggest doing so.
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Notes
- 1.
Taruffo 2007a, p. 13.
- 2.
Taruffo 2007b.
- 3.
Haynes 2014, p. 450.
- 4.
House of Lords, Practice Statement (Judicial Precedent) [1966] 1WLR 1234.
- 5.
Regarding the role of precedent in England, the existing body of literature is large. See, also for the literature cited therein, Whittaker 2007.
- 6.
Payne v. Tennessee, 501 U.S. 808, 827–8, 111 S.Ct. 2597, 2609.
- 7.
Idem.
- 8.
Idem. On the doctrine of precedent in the US, see Sellers 2007.
- 9.
Emphasis added.
- 10.
See García Cantero 2007.
- 11.
See Cipriani 2009.
- 12.
David and De Vries 1958, p. 113.
- 13.
- 14.
- 15.
Anglo-Iranian Oil Co. case (Jurisdiction), Judgment of 22 July 1952, p. 93.
- 16.
Cassese 2005, pp. 194–195.
- 17.
Cahier 1996.
- 18.
Shahabuddeen 1996.
- 19.
Idem, p. 239. (emphasis added) In the same vein one may consider Rosenne 2006, p. 1555: ‘Corresponding to this is the care evinced by the Court not formally to overrule earlier decisions, but rather, where necessary, to try to explain away, usually on the ground of some factual particularity, an earlier decision which it feels unable to follow. The attitudes adopted in later decisions towards the 1959 decision in the Aerial Incident of 27 July 1955 illustrate this process, and the relativity of the requirement of consistency of jurisprudence.’ Last, the remarks drawn by judge Tanaka in the separate opinion appended to Barcelona Traction Light and Power Limited (Preliminary Objections), Judgment of 24 July 1964, are of importance: ‘I am well aware that some consideration should be given to the existence of precedents in regard to a case which the Court is called upon to decide. Respect for precedents and maintenance of the continuity of jurisprudence are without the slightest doubt highly desirable from the viewpoint of the certainty of law which is equally required in international law and municipal law. The same kind of cases must be decided in the same way and possibly by the same reasoning. This limitation is inherent in the judicial activities as distinct from purely academic activities. On the other hand, the requirement of the consistency of jurisprudence is never absolute. It cannot be maintained at the sacrifice of the requirements of justice and reason. The Court should not hesitate to overrule the precedents and should not be too occupied with the authority of its past decisions. The formal authority of the Court’s decision must not be maintained to the detriment of its substantive authority. Therefore, it is quite inevitable that, from the point of view of the conclusion or reasoning, the minority in one case should become the majority in another case of the same kind within a comparatively short space of time.’
- 20.
One may mention the decision in Fisheries Jurisdiction (United Kingdom v. Iceland) (Merits), Judgment of 25 July 1974. Its para 53 states that the Court ‘as a court of law […] cannot render judgment sub specie legis ferendae or anticipate the law before the legislator has laid it down.’
- 21.
Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria) (Preliminary Objections), Judgment of 11 June 1998.
- 22.
Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Croatia v. Serbia), Judgment of 3 February 2015.
- 23.
Emphasis added.
- 24.
Prosecutor v. Aleksovski, IT-95-14/1-A, Appeals Chamber, Judgment of 24 March 2000.
- 25.
- 26.
WT/DS344/AB/R, Report of 30 April 2008
- 27.
Paragraph 160.
- 28.
Cossey v. United Kingdom, Decision of 27 September 1990, para 35. The same cogent reasons justifying a departure from previous case law are mentioned in Stafford v. United Kingdom, Judgment of 28 May 2002, paras 67–68: ‘[I]t is of crucial importance that the Convention is interpreted and applied in a manner which renders its rights practical and effective […] A failure by the Court to maintain a dynamic and evolutive approach would risk rendering it a bar to reform or improvement.’ In academic writing, see Wildhaber 2000, p. 1545: ‘[T]he existing case-law and the doctrine of precedent should be observed, except for compelling, serious and objective reasons.’
- 29.
Haynes 2014, p. 518.
- 30.
Merck et al v. Primecrown Ltd et al., Judgment of 5 December 1996.
- 31.
For some insightful remarks in this regard, see Zarra 2016, pp. 25 et seq.
- 32.
Diehl 2012, p. 183.
- 33.
Paulsson 2010, p. 710: ‘In other words, the interesting inquiry is not whether precedents are norms in and of themselves (in the international field the debate may be cut short by answering with one word: ‘no’) but how they may contribute to the development of norms–generation as well as refinement.’
- 34.
One may mention, for example, SGC v. Philippines, ICSID Case No. ARB/02/6, Decision on Jurisdiction of 24 January 2004, para 97: ‘The ICSID Convention provides only that awards rendered under it are ‘binding on the parties’ (Article 53(1)), a provision which might be regarded as directed to the res judicata effect of awards rather than their impact as precedents in later cases. In the tribunal’s view, although different tribunals constituted under the ICSID system should in general seek to act consistently with each other, in the end it must be for each tribunal to exercise its competence in accordance with the applicable law, which will by definition be different for each BIT and each Respondent State. Moreover there is no doctrine of precedent in international law, if by precedent is meant a rule of the binding effect of a single decision. There is no hierarchy of international tribunals, and even if there were, there is no good reason for allowing the first tribunal in time to resolve issues for all later tribunals.’ Likewise, the decision in Joy Mining Machinery Limited v. Arab Republic of Egypt (ICSID Case No. ARB/03/11, Award of 6 August 2004, para 80) is of interest: ‘this tribunal is not called upon to sit in judgment on the views of other tribunals. It is only called to decide this dispute in light of its specific facts and the law.’ Most recently, the same position has been taken in Garanti Koza LLP v. Turkmenistan, ICSID Case No. ARB/11/20, Award of 19 December 2016, para 149 (‘The tribunal cites to the decisions of other tribunals in other investment treaty cases where such decisions help to explain a point, to clarify a concept of international law, or to illustrate how similar issues have been resolved in other cases, but the tribunal is not in any way bound by such decisions.’), but, as will be clarified hereinafter, in current judicial practice this rests an isolated position.
- 35.
See, for example, Schreuer 2008, p. 1190: ‘[Article 53 (1) of the ICSID Convention] may be read as excluding the applicability of the principle of binding precedent to successive ICSID cases. Nothing in the Convention’s travaux préparatoires suggests the doctrine of stare decisis should be applied to ICSID arbitration’.
- 36.
SGS v. Philippines, ICSID Case No ARB/02/6, Decision on Jurisdiction of 29 January 2004, para 97: ‘The ICSID Convention provides only that awards rendered under it are ‘binding on the parties’ (Article 53(1)), a provision which might be regarded as directed to the res judicata effect of awards rather than their impact as precedents in later cases. In the tribunal’s view, although different tribunals constituted under the ICSID system should in general seek to act consistently with each other, in the end it must be for each tribunal to exercise its competence in accordance with the applicable law, which will by definition be different for each BIT and each respondent State. Moreover there is no doctrine of precedent in international law, if by precedent is meant a rule of the binding effect of a single decision. There is no hierarchy of international tribunals, and even if there were, there is no good reason for allowing the first tribunal in time to resolve issues for all later tribunals. It must be initially for the control mechanisms provided for under the BIT and the ICSID Convention, and in the longer term for the development of a common legal opinion or jurisprudence constante, to resolve the difficult legal questions discussed by the SGS v. Pakistan tribunal and also in the present decision.’
- 37.
AES v. Argentina, ICSID Case No ARB/02/17, Decision on Jurisdiction of 17 June 2005, para 33: ‘From a more general point of view, one can hardly deny that the institutional dimension of the control mechanisms provided for under the ICSID Convention might well be a factor, in the longer term, for contributing to the development of a common legal opinion or jurisprudence constante, to resolve some difficult legal issues discussed in many cases, inasmuch as these issues share the same substantial features.’
- 38.
Kaufmann-Kohler 2006, p. 377: ‘This would actually be a stare decisis doctrine applied not to a single decision, but to a line of cases, or a jurisprudence constante.’ A similar argument was advanced by Thomas Wälde in the separate opinion appended to International Thunderbird Gaming Corporation v. Mexico, UNCITRAL (NAFTA) Arbitration Proceedings, Award, 26 January 2006: ‘While individual arbitral awards by themselves do not as yet constitute a binding precedent, a consistent line of reasoning developing a principle and a particular interpretation of specific treaty obligations should be respected; if an authoritative jurisprudence evolves, it will acquire the character of customary international law and must be respected. A deviation from well and firmly established jurisprudence requires an extensively reasoned justification. This approach will help to avoid the wide divergences that characterises some investment arbitral awards—not subject to a common and unifying appeals’ authority. Otherwise, there is the risk of discrediting the health of the system of international investment arbitration which has been set up as one of the major new tools in improving good governance in the global economy.’
- 39.
El Paso Energy International Co. v. Argentina, ICSID Case No. ARB/03/15, Decision on Jurisdiction of 27 April 2006, para 39.
- 40.
Suez et al. and AWG Group v. Argentina, ICSID Case No. ARB/03/19, Decision on Liability of 30 July 2010, para 189 (emphasis added). In the same vein, see Saipem S.p.a. v. Bangladesh, ICSID Case No. ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measure of 21 March 2007, para 67, and most recently Renée Rose Levy and Gremcitel S.A. v. Republic of Peru, ICSID Case No. ARB/11/17, Award of 9 January 2015, para 76, and Churchill Mining PLC and Planet Mining Pty Ltd v. Indonesia, ICSID Case No. ARB/12/14 and 12/40, Award of 6 December 2016, para 253.
- 41.
Supra note 40, para 189.
- 42.
Idem, para 226. On the role played by case law in the shaping of FET, see McLachlan 2008, p. 375.
- 43.
This is the opinion of Orakhelashvili 2008, 104: ‘The use of previous decisions, which on their part fall short of identifying the intrinsic content of ‘fair and equitable treatment’, to deal with the ‘fair and equitable treatment’ standard with no defined content, as if it had is in fact an attempt to compensate for the absence of evidence of such defined content.’
- 44.
- 45.
Supra note 41, para 189.
- 46.
This Article states as follows: ‘1. Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds: (a) that the tribunal was not properly constituted; (b) that the tribunal has manifestly exceeded its powers; (c) that there was corruption on the part of a member of the tribunal; (d) that there has been a serious departure from a fundamental rule of procedure; or (e) that the award has failed to state the reasons on which it is based.’
- 47.
Paragraph 3 of Article 52 establishes: ‘On receipt of the request the Chairman shall forthwith appoint from the Panel of Arbitrators an ad hoc committee of three persons. None of the members of the committee shall have been a member of the tribunal which rendered the award, shall be of the same nationality as any such member, shall be a national of the State party to the dispute or of the State whose national is a party to the dispute, shall have been designated to the Panel of Arbitrators by either of those States, or shall have acted as a conciliator in the same dispute. The committee shall have the authority to annul the award or any part thereof on any of the grounds set forth in para (1).’
- 48.
De Brabandere 2012, p. 278.
- 49.
MCI Power Group L.C. and New Turbine Inc. v. Ecuador, ICSID Case No. ARB/03/6, Decision on Annulment of 19 October 2009, para 24.
- 50.
Idem, para 25.
- 51.
Enron Creditors Recovery Corp. Ponderosa Assets L.P. v. Argentina, ICSID Case No. ARB/01/3, Decision on the Application for Annulment of the Argentine Republic of 30 July 2010, para 66: ‘[I]n relation to matters which fall within the competence of an ad hoc committee to decide, it is in the committee’s view to be expected that the ad hoc committee will have regard to relevant previous ICSID awards and decisions, including other annulment decisions, as well as to other relevant persuasive authorities.’
- 52.
Impregilo S.P.A. v. Argentina, ICSID Case No. ARB/07/17, Decision of the Ad Hoc committee on the Application for Annulment of 24 January 2014, para 2: ‘The committee […] may take into account the reasoning and findings of other committees on annulment’ (emphasis added).
- 53.
Kiliç Ĭnşaat Ĭthalat Ĭhracat Sanayi Ve Ticaret Anonim Şirketi v. Turkmenistan, ICSID Case No. ARB/10/1, Decision on Annulment of 14 July 2015, para 49: ‘While the present committee is not bound to use the same criteria as previous committees, it will consider and take into account for its own decisions reasoning used by previous committees regarding the relevant issues’ (emphasis added).
- 54.
Sacerdoti (2011, pp. 18–19), for example, points out that these committees ‘have no formal authority for setting precedent for different future disputes, their authority being limited to annul the ward submitted to them for the specific ground listed in Article 52. However, in respect of the interpretation of [the] grounds for annulment, an issue which is always raised before them and which only these committees are competent to decide upon, consistent jurisprudence should be expected.’
- 55.
As observed by Guillaume 2011, p. 19 ‘[n]umerous examples could be given of cases in which various judges and arbitrators have to apply the same law in a specific sector. In such cases, they of course have no obligation to follow decisions adopted by other judges or arbitrators.’
- 56.
In this regard, see Palombino 2008, pp. 10 et seq., footnotes.
- 57.
See Chap. 1, footnote 54.
- 58.
From this perspective, the remarks drawn by Hirsch 2014, pp. 161 et seq., appear somewhat curious: ‘On the vertical level, investment tribunals are formally not subject to the authority of the ICJ […] In reality, however, investment tribunals behave quite similarly to tribunals operating in hierarchical systems and mostly subject to the de facto authority of the ICJ. Investment tribunals frequently cite decisions of the ICJ as authoritative statements of existing international legal rules […] The exceptionally influential role of the ICJ is also noticeable in empirical studies revealing that investments tribunals often cite decisions of the ICJ as a proof of the existence of international customary law.’ Yet, also from a de facto perspective, the relationship between ICJ and investment tribunals has nothing to do with the rule of vertical precedent, a rule which necessarily presupposes a hierarchical structure between tribunals; accordingly, reliance on the Taruffo’s category of ‘example’ proves much more suitable to explain the phenomenon under consideration. With regard to the relevance of ICJ case law in investment arbitration, see Pellet 2013.
- 59.
- 60.
Mondev International Ltd. v. United States, ICSID Case No. ARB (AF)/99/2, Award of 11 October 2002, paras 141 et seq.
- 61.
Técnicas Medioambiente Tecmed S.A. c. Mexico, ICSID Case No. ARB (AF)/00/2, Award of 29 May 2003, paras 122 et seq.
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Palombino, F.M. (2018). FET and the Driving Role of Case Law. In: Fair and Equitable Treatment and the Fabric of General Principles. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-210-1_6
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