The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS 

Stephen Jagusch and Nicole Duclos: Compensation for the Breach of Relative Standards of Treaty Protection

The debate about the standard of compensation for a State's breach of its investment treaty obligations has mainly focused on the standard of compensation for wrongful expropriation.  The discussion has not been nearly as intense with respect to breaches of other treaty obligations, and it becomes even more sparse when concerning breaches of relative standards of investment protection (non-discrimination, national treatment and most-favoured nation treatment). This is due to the fact that investment treaties and national investment laws commonly address the standard of compensation following a finding of wrongful expropriation, but they are silent on the issue of compensation arising from the breach of other obligations.  Arbitral tribunals have exercised their discretion and decided the applicable standard of compensation for non-expropriatory breaches on a case-by-case basis. This article examines the guiding principles and arbitral decisions on the issue of compensation for a State's breach of relative standards of treaty protection.

Stephen Jagusch is a partner in the London office of Allen & Overy LLP.

Nicole Duclos is an associate in the New York office of Allen & Overy LLP. 

Both authors specialise in international commercial and investment treaty arbitration.

Jacques Werner: Revisiting the Necessity Concept

In this article, the author honours the legacy of Thomas Wälde by discussing whether the Necessity Concept should be revisited in view in particular of the passage in several countries from a system of free market to a system of managed economy—managed by the State and international institutions. 

Jacques Werner is an International Commercial Arbitrator in Geneva , Switzerland and the Chairman of the Geneva Global Arbitration Forum.

John Y. Gotanda: The Unpredictability Paradox: Punitive Damages and Interest in International Arbitration

This article examines the subjects of punitive damages and interest in international arbitration.  It finds that while the two do not have much in common, as one is given primarily to punish the wrongdoer while the other’s goal to compensate a party for the loss of the use of money from the wrongful act, they share one important characteristic: neither is very predictable.  This article offers two very different approaches on how to bring more predictability to each.  Specifically, with respect to punitive damages, the author argues that we should stay the course with the traditional approach; that is, tribunals should continue to be hesitant to award punitive damages because they interject significant unpredictability into the dispute resolution process. By contrast, the author argues that the practice of awarding interest should continue to evolve. While punitive damages are inherently unpredictable, interest can be made predictable. To make these awards predictable, however, the author argues that interest should more regularly be awarded as damages.

John Y. Gotanda is Associate Dean for Faculty Research, Professor of Law and Director of the J.D./M.B.A. Program of Villanova University School of Law in Villanova , Pennsylvania .

Valentina Sara Vadi: Fragmentation or Cohesion? Investment versus Cultural Protection Rules

The relationship between international law and international investment law has taken on a greater significance with the extraordinary flourishing of investment treaties in recent years. Although in a formal sense investment treaties differ little from other international treaties, the legal regimes they create are often at variance with the assumptions underlying the traditional sovereign state model. Is international investment law a self-contained regime? To say that there is continuity between international law and international investment law does not imply a sort of pre-established harmony between the system and its sub-system. Rather, an appropriate equilibrium needs to be found by the adjudicators who should act as cartographers of international law according to customary rules of treaty interpretation. A survey of recent cases involving elements of cultural heritage shows that investment treaty arbitration has increasingly become permeable to non-investment values. This trend seems to confirm the unity of public international law.

Valentina Sara Vadi, PhD candidate, researcher (EUI), M Res (EUI), M Jur (Oxon), M Pol Sc and JD (Siena).

Eduardo Savarese: Bit Clauses Bearing on the Ratione Temporis Jurisdiction of Icsid Tribunals. A Survey on the Constituent Elements of Investor-State Legal Disputes under Bits

Issues of ratione temporis jurisdiction have been recently examined by Icsid Tribunals through the interpretation of Bit clauses which use the notion of “legal dispute” in order to border on the international jurisdiction of arbitral tribunals as far as investment disputes are concerned. The most recent Icsid case-law shows that two different approaches are followed. The first is a rather traditional approach, which makes the notion of investor–State dispute very close to that of State-to-State dispute. In this perspective, two opposing courses of conduct have to be found in order to assert the existence of a dispute. For the second and more innovative approach, investment disputes may evolve over the time and change their nature, so that different legal disputes may occur in different legal contexts. This second approach is to be welcome to the extent that it highlights the fragmentation of international investment law and the innovative impact of the large network of Bits on the ratione temporis jurisdiction of international tribunals.

Eduardo Savarese is a Judge at the Tribunal of Nola in   Naples , Italy and holds a Phd. in International Law from the University “Federico II”in Naples .

Mathias Audit: Is the Erecting of Barriers against Sovereign Wealth Funds Compatible with International Investment Law?

Impact of overseas investments by Sovereign Wealth Funds (Swfs) is increasingly causing alarm in destination countries. Many Western governments show high concern with Swfs investing in some of their strategic economic sectors, such as energy or high technologies. Consequently, several of these governments have issued new domestic rules to control and even cancel investments operated by Swfs. The aim of this work is to assess the compatibility of these new legislations with international investment law.

Dr. Mathias Audit, PhD (Paris I Panthéon-Sorbonne), is a Law Professor, University of Paris Ouest Nanterre La Défense , France .

Joseph M. Senona: Global Economic Recession and Protectionism: Legitimacy of the Proudly South African and Buy Local Campaigns

The current global economic recession has resuscitated the old age debate about protectionism. Increased vigilance against this malady has gained momentum particularly as the global economic reform agenda takes shape and countries seek to reposition themselves. Fear of increased protectionism have been sparked by, among others, measures such as the buy local campaigns that seek to promote the consumption of local goods and services in order to support local industries, spur economic growth and employment. This article explores the legitimacy of these buy local campaigns in particular using the Proudly South African Campaign as a bench mark to assess the economic imperatives immanent in these practices, but more importantly the legality of these measures against the Wto rules. It does this by analyzing the Wto principle on non-discrimination in particular the National Treatment principle by reviewing relevant Wto case law. Based on the legal analysis and interpretation of relevant Wto provision, the article concludes in general terms that this measures are not per se illegal protectionist measure, and should be encouraged when circumstances allow it.

Joseph M. Senona holds a Master’s Degree in International Economic Trade Law and Investment Law in Africa from the University of Western Cape . He is an official of the Department of Trade and Industry of South Africa working with trade and development issues.