The Journal of

WORLD INVESTMENT

ABSTRACTS 

Amazu A. Asouzu: A Review and Critique of Arbitral Awards on Article 25(2)(b) of the Icsid Convention

Article 25(1) of the Icsid Convention confers basic and general jurisdiction on the International Centre for Settlement of Investment Disputes which, under the Convention, facilitates the arbitration and conciliation of investment disputes between Contracting States and nationals of other Contracting States. Article 25(1)'s jurisdictional requirement for "national of another Contracting State"' is further elaborated in Article 25(2)(b), thereby establishing and extending the Centre's jurisdiction to the special case of a locally incorporated company that would otherwise be a national of a Contracting (host) State party to a dispute and, thus, falling outside the Convention. "Consent in writing" needed under Article 25(1) is distinct from the "agreement" under Article 25(2)(b) to treat, for the purposes of the Convention, a locally incorporated juridical person as a national of another Contracting State, due to foreign control. Both provisions serve complementary purposes. This critical review of published awards on Article 25(2)(b) leads to the conclusion that a too liberal interpretation of the provision would discourage a wider acceptance by (Contracting) States of Icsid arbitration with serious implications for the protection of foreign investment.

Amazu A. Asouzu holds a Ph.D. in International Arbitration from the London School of Economics (Lse) and lectures in Public International Law and the Peaceful Settlement of International Disputes at King's College London, University of London. He was a holder of an Lse Scholarship in Law and the 1997 Gillis Wetter prizewinner.

Mehmet Ögütçü: New Horizons for International Investment and Sustainable Development

In light of the commitments at the Wto Doha Ministerial, the UN Monterrey Financing for Development Conference and the soon-to-come Johannesburg Summit on Sustainable Development, the "sustainable development dimension" of international investment will increasingly be a recurring theme and concern in the years ahead. In this context, Oecd countries bear a special responsibility for leadership on global sustainable development issues, both historically and because of the weight they continue to have in the world economy and environment. They provide more than 80 percent of the world's foreign direct investment and have developed "rules of the game" in investment matters. This article examines crucial Oecd efforts to work toward goals for investment with sustainable development in co-operation with developing countries, the business community and other multilateral/civil society partners.

Mehmet Ögütçü is Head of the Cmis Non-Members Liaison Group and the Oecd Forum on International Investment, Paris, France.

Francisco González de Cossio: The Mexican Experience with Investment Arbitration—A Comment

In this article, the author presents a summary of the recent investment arbitrations in which Mexico has been involved and discusses several issues that have surfaced from the Mexican experience. The nineteenth and twentieth centuries offered Mexico bitter experiences that pushed it into a legal cocoon. Recently, protectionism has been replaced by some of the most open and laissez-faire policies of the hemisphere, seeking to encourage foreign trade and investment through, inter alia, arbitration of investment disputes. It is against this backdrop that the first cases (and their impact on this fledgling change of legal course) must be analysed.

Francisco González de Cossio is an attorney with Barrera, Siqueiros y Torres Landa, S.C. in Mexico City. He is admitted to practice law in Mexico (1995) and New York (2000). He is also Professor of Law at Universidad Iberoamericana in Mexico City.

Susan Ariel Aaronson: Global Corporate Social Responsibility Pressures and the Failure to Develop Universal Rules to Govern Investors and States

This article briefly traces the failed history of international investment agreements. Although policymakers in the developed and developing countries have not been able to find common ground on the rights and responsibilities of investors, they recognize that such rules could yield global economic efficiencies and cheaper, more plentiful capital.  They also understand, however, that global rules could limit the power of governments to shape investment flows. A wide range of ad hoc attempts to regulate the cross-border behaviour of corporations includes codes of conduct, voluntary corporate reporting of environmental and social performance, and corporate philanthropic partnerships with governments and international institutions. The sheer number of such strategies, however, is leading business executives and civil society activists alike to call for public policies at the multinational level to promote corporate social responsibility.

Susan Ariel Aaronson is a Senior Fellow at the National Policy Association in Washington, D.C. and Adjunct Professor at George Washington University in Washington, D.C.  She is also the author of several books, including Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization, published by the University of Michigan Press in 2001.

Thomas Andrew O'Keefe: Dispute Resolution in Mercosur

This article provides a timely discussion of Mercosur's present dispute resolution mechanisms and the role they have played in furthering the goals of economic integration in South America's Southern Cone. There are two basic forms of dispute resolution within the formal Mercosur framework. The first, based on two still unratified Protocols, deals with the resolution of disputes between private investors and a State Party. The second deal with disputes that between State Parties or between individual investors and a State Party as the result of the application or interpretation of norms and obligations arising under the Mercosur integration process. The article concludes with an examination of the recently adopted Protocol of Olivos which, once it is ratified by all four Member States, will significantly modify the current system for resolving disputes involving the application or interpretation of Mercosur norms and obligations.

Thomas Andrew O'Keefe is President of the Mercosur Consulting Group, Ltd. in Washington, D.C., which assists companies in developing strategies for doing business in South America.

Ruwantissa Abeyratne: Investing in Insurance of Air Transport—Some Perspectives

On 17 September 2001, following the events of September 11, the aviation insurance market gave notice to airlines that, commencing 24 September 2001, airlines throughout the world would no longer be covered for liability with regard to third party war risk. This sudden withdrawal of coverage resulted in many airlines grounding their fleets until some solution could be found to cover them against this type of risk. The International Civil Aviation Organization reacted immediately, urging in two State Letters and Resolution A33-20, passed at the 33rd Session of the Icao Assembly, that States step in and provide some sort of indemnity for their airlines that would ensure continuity of global air services. States responded positively to these initiatives. This article examines both the Icao initiatives and the various aspects of and justification for investment by States in aviation insurance.

Ruwantissa Abeyratne is a senior officer of the International Civil Aviation Organization in Montreal, Quebec, Canada. He has written this article in his personal capacity.

Derek K.Y. Loh: The Japan–Singapore Economic Partnership Agreement—Underpinning of an East Asia Trade Bloc?

Since 1990 there have been various calls for the formation of an East Asia Bloc to counter the growing influence of U.S. and European economic might. First voiced by Malaysian Prime Minister Dr Mahathir bin Mohamad, the vision appears one step closer to reality with the signing of an economic partnership agreement between Japan and Singapore. The bilateral agreement is Japan's first and Asia's most comprehensive arrangement to date. This article looks at the Agreement in the wider context of developments in the region and suggests that the process of developing an East Asia Bloc has still not taken root. The author also suggests that imprints of the Japan–Singapore Agreement may be found in an eventual regional economic grouping.

Derek K.Y. Loh is a former Singapore trade official who is currently an Associate in the International Trade/Wto Practice Group of Baker & McKenzie. Wong & Leow, Singapore.