The Journal of

WORLD INVESTMENT

ABSTRACTS 

Martin Hunter and Gui Conde e Silva: Transnational Public Policy and its Application in Investment Arbitrations

The past decade has seen a changing environment for foreign investment in less developed (and some rather developed) countries. Most investment arbitrations arise under multilateral or bilateral investment treaties (Bits). The objectives of these treaties include a ban on the application of restrictive nationalistic concepts of public policy. In a number of published awards, arbitral tribunals have recognized the application of principles of transnational public policy that override local laws designed to regulate the affairs of foreign investors. This article examines the extent of “supra-national” control that international arbitral tribunals have at their disposal to encourage harmonization of the way in which foreign investors should be treated by host countries that have entered into treaties such as Bits and the North American Free Trade Agreement.

Martin Hunter is a barrister at the Essex Court Chambers in London and Professor of International Dispute Resolution at the Nottingham Law School, of the Nottingham Trent University.

Gui Conde e Silva holds an LL. M. from Kings College and is a Ph.D. candidate and Schmitthoff Teaching and Research Fellow at the School of International Arbitration, Ccls, Queen Mary, University of London.

Norbert Wühler: The Different Contexts in which International Arbitration is Being Used—International Claims Tribunals and Commissions

A new context in which arbitration is being used is that of international claims tribunals and commissions. This includes institutions set up to resolve claims arising from international conflicts or other conflicts settled by the international community. It also extends to systems for the resolution of mass claims of individuals, some of which were first litigated in domestic courts, often as class actions in the United States. While these tribunals and commissions are not using international commercial arbitration as such, they draw on features of arbitration and certain of the methods they have developed can be useful in arbitration. In this article, the author examines in detail four international claims facilities—the Iran–United States Claims Tribunal, the United Nations Compensation Commission, the German Forced Labour Compensation Programme of the International Organization for Migration and the Claims Resolution Tribunal for Dormant Accounts in Switzerland—to illustrate these points.

Norbert Wühler is Director of Claims Processing for the Compensation Programmes of the International Organization for Migration in Geneva, Switzerland.

Americo Beviglia Zampetti and Torbjörn Fredriksson: The Development Dimension of Investment Negotiations in the Wto—Challenges and Opportunities

Foreign direct investment has an important role to play in the sustainable development process. Quality Fdi flows can bring a bundle of benefits to developing and, especially, less developed countries. However, neither increased flows nor benefits from them can be taken for granted. International co-operation in this area could help facilitate the realization of such benefits, but it is far from assured that the creation of a multilateral investment regime would do that. Neither is there any consensus among Wto Members on the nature and scope of such a regime. If Wto Members do proceed with negotiations on a multilateral framework on investment, the challenge is to go beyond the traditional liberalization agenda as foreshadowed in the Doha Declaration. A key role in realizing the development dimension of any such framework should be played by “proactive” commitments undertaken by developed countries. This is important to balance the interests of developed and developing countries and to make development truly the overarching goal of the negotiations.

Americo Beviglia Zampetti and Torbjörn Fredricksson are both staff members at the United Nations Conference on Trade and Development in Geneva, Switzerland.

Wolfgang Kühn and Ulrike Wiegel: The Application of International Law and Treaty Provisions by Arbitrators

Treaties often form the legal basis of arbitration proceedings in international trade and cross-border investments. Especially recently, arbitration proceedings in international investment disputes have been increasingly based on bilateral investment treaties (Bits). When applying provisions of Bits, arbitrators have to respect international law also when interpreting the wording of the treaties. This article outlines the application of international law on treaty provisions by arbitrators, provides an outline of accepted methods for the interpretation of treaties, shows the impact of general principles of international law on Bit arbitration and analyses the implementation of those principles in recent awards concerning State–investor disputes by providing an outline of the actual jurisprudence.

Wolfgang Kühn is a Partner at Heuking Kühn Lüer Wojtek, Düsselfdorf, Germany.

Ulrike Wiegel is an Associate at Heuking Kühn Lüer Wojtek, Düsseldorf, Germany.

L. Yves Fortier and Stephen L. Drymer: Third-Party Intervention and Document Discovery

Investor–State arbitration, whether arising under bilateral investment treaties or multilateral instruments, invariably raises fundamental issues of public interest of a type typically foreign to international commercial arbitration. Two of these issues—third-party intervention in the arbitral process and discovery of State documents—are briefly examined in this article. In the context of a review of arbitration under the North American Free Trade Agreement, the authors identify instances in which the traditional arbitral process, basically private by nature, has been “adapted” so as to become more amenable to the resolution of public issues arising in investment treaty arbitration.

L. Yves Fortier is a Senior Partner and Chairman, Ogilvy Renault, Montréal, Quebec, Canada.

Stephen L. Drymer is a Partner at Ogilvy Renault, Montréal, Quebec, Canada.

Noah Rubins: Must the Victorious Investor-Claimant Relinquish Title to Expropriated Property?

In connection with recent arbitration cases initiated against Argentina under bilateral investment treaties, some claimants and potential claimants have expressed concern that, should they prevail, the arbitrators will require them to turn over to the Argentine government all formal title (usually in the form of shares) to expropriated companies. In general, foreign investors wish to retain formal ownership of this property, even if it has been left with little or no present economic value. Legal authority treating the question of mandatory transfer of title in expropriation cases is extremely scarce; this is just one of the many issues of international law that investment arbitration tribunals are tackling largely on a “first impression” basis. This article examines the jurisprudence on both sides of the problem, including the Metalclad and Cdse cases, which suggest an obligatory transfer of residual title, and the recent Cme Czech Republic Damages Award, which provides authority for a contrary outcome. Also examined are general principles of international law and an approach based on concerns of economic efficiency which point to a conclusion that investor-claimants should be provided the choice of retaining title in exchange for reduced compensation. Finally, the article analyses the strategic considerations raised by the issue of title transfer in such cases.

Noah Rubins is an Associate in the international litigation and arbitration practice at Jones Day, Washington, D.C. and an Adjunct Professor at Georgetown Law Center.

Mehmet Ögütçü: Foreign Direct Investment and Regional Development—How to Enhance the Competitiveness of Regions in Brazil, China, Russia and Turkey

Rapid technological change, extended markets and a greater demand for knowledge are offering new opportunities for regional development. Some regions that have limited access to capital accumulation and national/regional markets are disadvantaged. Those lagging behind in infrastructure investment are finding it difficult to keep up with the general trends. All countries find it more difficult to stay competitive without foreign direct investment (Fdi), which sustains growth and brings at least four things of value—financial capital, management skills, technology and access to export markets—and therefore enhances a country’s and its regions’ competitiveness in the global marketplace. This article analyses the role of Fdi in promoting regional development in Brazil, China, Russia and Turkey.

Mehmet Ögütçü is Head of the Non-Members Liaison Group and the Organisation for Economic Co-operation and Development Global Forum on International Investment, Paris, France. He is also the author of New Horizons for International Investment and Sustainable Development, which appeared in The Journal of World Investment, Vol. 3, No. 3, June 2002.

Bart Kerremans: Coping with a Nettlesome Dilemma—The Long Road to the U.S. Trade Act of 2002

The President of the United States began seeking renewal of “fast track” trade negotiating authority from the U.S. Congress in 1994. In 2002, it was finally granted after Congressional majorities in favor of it were slowly but steadily built in both Houses through calibrated decisions on numerous sensitive issues related to trade. This article analyses in detail the eight years of inter-party (and intra-party) jockeying, compromise and deal-making that enabled these majorities to be constructed. It also considers some of the implications the process has for the way in which U.S. trade policy is carried out and for the future conduct of the U.S. Administration in international trade negotiations.

Bart Kerremans is Associate Professor of International Relations and American Politics at the Department of Political Science of the Katholieke Universiteit Leuven, Belgium.