The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS

Sergey Ripinsky: Assessing Damages in Investment Disputes: Practice in Search of Perfect

The growing number of arbitral decisions awarding compensation to investors has contributed to the development of law in the area of damages but also posed questions, which have attracted relatively little attention to date. This article first addresses the important but elusive matter of measuring compensation in non-expropriatory cases and then analyses a number of more discreet issues: approximation of damages, the impact of investment risk, contributory fault and mitigation, the flow-through of damage and the recoverability of moral damages in investment disputes. It is hoped that this analysis will inform and stimulate further debate on these issues.

Dr Sergey Ripinsky, LL.M. ( Maastricht University ), Ph.D. ( St. Petersburg State University , Russia ), is a Research Fellow at the British Institute of International and Comparative Law in London ..

Dominique D’Allaire: The Nationality Rules under the Energy Charter Treaty: Practical Considerations

 This article reviews the rules on the nationality of investors under the Energy Charter Treaty (Ect) and their interpretation by arbitral tribunals.  Given the limited number of cases thus far under the Ect, parallels are drawn with decisions rendered in relation to other investment protection treaties to determine the appropriate approach to the interpretation of provisions on nationality.  The author concludes that there are no consistent international law criteria for the nationality of corporate entities, whether for diplomatic protection purposes or for investment treaties.  In the absence of generally accepted definitions, black-letter rules have been incorporated into investment treaties.  Tribunals give full effect to the wording of these provisions and do not appear to attempt to identify any ultimate investors for purposes of determining whether a claimant is an investor of another Contracting Party under the Ect or other investment treaties.  A review of Article 17 Ect on the denial of benefits of investment promotion and protection (Part iii) and arbitral decisions relating to the denial of benefits under investment treaties show inconsistent applications of these provisions.  The author proposes elements developed in other areas of public international law with a view to contributing towards a more predictable application of article 17 of the Ect. 

Dominique D'Allaire is an Associate in the International Arbitration Group of Freshfields Bruckhaus Deringer Llp in Frankfurt , Germany .  The views expressed in this article are the author's own.

Ugleša Grušic: The Evolving Jurisdiction of the International Centre for Settlement of Investment Disputes

This article deals with the examination of the jurisdictional requirements for Icsid arbitration set out in Article 25 of the Icsid Convention, as interpreted in the Icsid’s case law.  Emphasis is put on some of the most recent jurisdictional problems: competing jurisdictions, extension of Mfn clauses to dispute resolution matters, definition of investment, effect of umbrella clauses and widely drafted dispute resolution clauses, and extent to which investors from non-Contracting States can avail themselves of the Icsid arbitration.  The article concludes that Icsid tribunals have shown a tendency towards liberal interpretation that favours assumption of jurisdiction.  This attitude leads to the creation of a global investment protection system where a wide variety of investors, irrespective of their nationality, are able to go before Icsid in protecting their various economic activities, including purely contractual ones.

Ugleša Grušic, LL.B. ( University of Belgrade ), LL.M. ( University of Nottingham ), is an Assistant Lecturer at the Faculty of Law of the University of Belgrade, Serbia.

Tarcisio Gazzini: General Principles of Law in the Field of Foreign Investment

General principles of law in the sense of Article 38(1) of the Statute of the International Court of Justice play an important role in foreign investment law. The essay discusses the nature and functions of these principles, focussing on their contribution to the definition of fair and equitable treatment standard. It is submitted that the application of general principles of law, on the one hand, confirms the intense interaction between international and national law, and, on the other hand, renders unnecessary resorting to a third legal system.

 Tarcisio Gazzini is Assistant Professor in the Faculty of Law of VU University in Amsterdam , The Netherlands.

Dr M. Shabir Korotana: US–Gambling: Test of Limits of the Wto Dispute Settlement Process

The US introduced measures that prohibited cross-border internet gambling.  This affected the gambling services providers based abroad.  Antigua and Barbuda challenged these measures that they were inconsistent with the US obligations under the Gats.  On that basis the Wto panel and AB found these measures Wto inconsistent.  Eventually, the compliance panel determined 21$ million annual sanctions against the US and in favor of Antigua and Barbuda , and it also allowed cross-retaliations. At the same time the US withdrew its commitment in the schedule to the Gats under Article xxi.  This paper argues that because of the US withdrawal the compliance panel’s decision has become null and void and that the compensation should be assessed afresh according to the rule of ‘compensatory adjustment’ under Article xxi of the Gats.  It also argues that cross-retaliation is not permitted under Article xxi.  Finally, it also argues that at the earlier stages of the case the panel and AB should have interpreted the ‘mistake argument’, made by the US , in an imaginative way, because through this argument they could have provided the US with an option to withdraw under Article xxi.

Dr M. Shabir Korotana, PhD (Lse, London ), is a Lecturer in Law at The University of Middlesex in London , England .

Francisco Aguayo Ayala and Kevin P. Gallagher: Subsidizing Sustainable Development under the Wto

This paper addresses the need to preserve the ability of nations to use subsidies in order to correct distortions in the global economy and spur innovation for sustainable development. We show that the Agreement on Subsidies and Countervailing Measures (Scm) created significant policy space for nations to address technological, poverty, and environmental problems—all seminal issues for sustainable development.  Until its expiration in 2000, Article 8 of that agreement provided cover for “green light” subsidies toward research and development, regional inequality, and environmental protection.  While some nations took advantage of these provisions, especially in the developed world, their full potential was not realized before the Article expired.  The Doha Declaration now provides the opportunity to negotiate the reinstatement and expansion of these subsidies.  We show that preserving this policy space makes more economic sense now than ever, especially when subsidies are used to correct the many distortions in the global trading system.

Francisco Aguayo Ayala is a research associate at the Program for Science, Technology and Development at El Colegio de Mexico, Mexico .

Kevin P. Gallagher is assistant professor of international relations at Boston University , Boston , Massachusetts .

Jarrod Hepburn: The Australia New Zealand Closer Economic Relations Trade Agreement: First Among Equals

The Australia New Zealand Closer Economic Relations Trade Agreement (Anzcerta, or Cer) has been described by the Wto as “the world’s most comprehensive, effective and mutually compatible free trade agreement.” This article discusses the exceptional nature of Cer and highlights its many innovations, including universal coverage, abolition of anti-dumping duties and subsidies, the free movement of people and the extensive mutual recognition scheme. The impact of Cer on the trans-Tasman relationship going beyond trade is examined. The article ends with consideration of proposals for the future of Cer, such as legal harmonisation, a single economic market, a customs union, a currency union, and even political union. While Cer is a unique model amongst free trade agreements, its success provides some lessons for other attempts at bilateral or regional economic integration.

 Jarrod Hepburn, LLB (Hons), BE (Hons) (Melb), BCL (Oxon), is a Candidate for the MPhil in Law at the University of Oxford, United Kingdom.