The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS 

John P. Gaffney and James L. Loftis: The “Effective Ordinary Meaning” of BITs and the Jurisdiction of Treaty-Based Tribunals to Hear Contract Claims

This article discusses the jurisdiction of tribunals constituted in investment-treaty disputes over contract claims based on (i) so-called “umbrella clauses” and (ii) widely drafted dispute resolution clauses having regard to (a) Bit practice, (b) relevant case law (beginning with the decisions in Sgs v. Pakistan and Sgs v. Philippines) and (c) recent literature in the area. The article argues in favour of faithful application of the provisions of Articles 31 and 32 of the Vienna Convention on the Law of Treaties to the interpretation of Bits—which is described as the “effective ordinary meaning” approach—which excludes reliance on extrinsic doctrines of interpretation to impose restrictions on the jurisdiction of treaty-based tribunals over contract claims. The article also discusses a number of related issues, including contract claims as treaty claims and the effect of contractual jurisdiction clauses on contract claims in treaty-based arbitration.

John P. Gaffney is a partner of O’Flynn Exhams Solicitors in Cork, Ireland and a member of its litigation practice.

James L. Loftis is a partner of Vinson & Elkins Rllp in London, England and head of its International Dispute Resolution practice.

Ursula Kriebaum: Partial Expropriation 

This article examines whether and under which circumstances a deprivation of parts of an investment can amount to an expropriation. It  first considers  the degree of interference necessary for an expropriation in general. Next, the author outlines typical situations involving partial expropriation. Then the article analyses and contrasts the three approaches so far prevailing in the practice of investment tribunals with regard to partial expropriation: denial of partial expropriation; explicit acceptance of partial expropriation; and implicit acceptance of partial expropriation. In the conclusions, the author makes an attempt to present a solution to the problem of partial expropriation. She suggests that with regard to rights which are capable of independent economic exploitation, partial expropriation should be recognized.

Ursula Kriebaum is an Assistant Professor in the Department of European, International and Comparative Law at the University of Vienna, Austria.

 Rex J. Zedalis: Subcentral Governmental Investment Incentives—Assessing their Lawfulness under the Gatt and the Scm Agreement

This article examines the limits established by Article xvi of the Gatt, and various provisions of the 1994 Subsidies and Countervailing Measures Agreement, on the use of investment incentives by subcentral governmental units. In recent years, it has been reported that subcentral governmental incentives have been used or are available for use in the United States, Austria, Germany, India and other countries. In view of the rise of subcentral governmental investment incentives, the importance of international economic law’s limits on the use of incentives that could be considered “subsidies” take on real significance. An attempt is made here to provide explication regarding the basic matters of when a subcentral governmental incentive constitutes a “subsidy” and when such a subsidy is provided to a “specific” enough group of enterprises or industries to warrant characterization as an incentive of international concern. The hope is that subcentral governmental units, the legal advisors that assist them and the trading partners affected by the incentives such units have settled upon will be provided a modicum of illumination regarding a complex and highly nuanced area of the law.

Rex J. Zedalis, W.B. Cutting Fellow in International Law (1980–1981) and J.S.D. (1987), Columbia University, is Professor of Law and Director at the Comparative and International Law Center of the University of Tulsa, Oklahoma.

Kálmán Kalotay: The Rise of Russian Transnational Corporations

This article explores the main features of outward foreign direct investment and transnational corporations from Russia since 1991. The universe of Russian transnational corporations shows a great variety in its ownership structures, motivations and strategies to invest abroad. There are nevertheless to two common characteristics they share. The first one is their leapfrogging to the global scene, to mention Alrosa, Gazprom, Lukoil, Mechel, Norilsk Nickel, RusAl and Severstal as prime examples. The other common characteristic of the Russian transnational corporations is their strong link with the natural resources of their home country. Until recently, they were all based on oil and gas, metallurgy, mining or related activities. The article aims also at identifying issues for further analysis, such as the growing role of the State in controlling natural resources-based firms and its implications for the future of Russian transnational corporations.

Kálmán Kalotay is Economic Affairs Officer at the United Nations Conference on Trade and Development in Geneva, Switzerland. He is also the author of several articles which have appeared in The Journal of World Investment, the most recent of which was: The Central European Research and Development Platform for Investors, which appeared in Volume 6, Number 6 (December 2005).

Asoke Mukerji: Integrating the Cis Economies into the Wto—A Review

The article analyzes the integration of the Commonwealth of Independent States (Cis) economies into the Wto system. In December 1991, the Cis was created after the dissolution of the Soviet Union. The emergence of the Cis was widely seen as an opportunity for integrating these former Soviet economies into the new Wto multilateral trading system. However, more than ten years after the Wto came into being, there have been no significant results in achieving this objective. A review of the process of integrating the Cis economies into the Wto shows that the main reason for this failure has been the application of excessively high benchmarks for the accession of the Cis countries to the Wto. The consequence is that most economies of the Cis remain outside the Wto, while Cis countries that are Members of the Wto continue to express serious apprehensions about their socio-economic situation despite being part of the multilateral trading system. The article also proposes specific steps that the Wto should take to redress this situation.

Asoke Mukerji is a member of the Indian Foreign Service who was Delegate of India to the World Trade Organization during 1995–1998. He was Chairman of the Wto Gats Committee on Specific Commitments (1997), has represented India before Wto dispute settlement panels and the Appellate Body and is on the Wto’s Indicative List of Panelists.

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Yves G.L. Wolters: The Meaning of “Investment” in Treaty Disputes: Substantive or Jurisdictional?—Lessons from Nagel v. Czech Republic and S.D. Myers v. Canada

At the heart of an increasing number of investor–State disputes under investment treaties lies the question: when is an economic interest not a protected investment? This article examines whether decisions by arbitral tribunals on such issues are to be categorised as substantive, jurisdictional and/or procedural in nature. The author considers how the arbitral tribunals in Nagel v. Czech Republic and S.D. Myers v. Canada have tried to deal with these matters, highlighting potential consequences of these decisions.

Yves G.L. Wolters, LL.M., King’s College London and Foundation Scholarship Rotary International, is a Future Trainee of Simmons & Simmons, September 2007.