Unveiling Japan’s Modern BIT Policy: A Review of its Substantive Provisions

By Yosuke Iwasaki (Sidley Austin LLP) and Takashi Yokoyama (Tenzer Arrieta PLLC)[1]

While Japan has signed 36[2] bilateral investment treaties (“BITs”) with predominantly capital importing countries, historically the Japanese government’s investment treaty policy has been veiled in secrecy. While some countries, such as the United States and India, have officially published their own model BITs, Japan has never announced a model text as a template for negotiations. This may make it difficult for foreign government officials to anticipate the overall treaty structure that Japan will seek to adopt when entering investment treaty negotiations with other states. This post aims to highlight certain drafting hallmarks of Japan’s recently signed international investment agreements (“IIAs”) by examining the substantive and procedural provisions from the Japan-Argentina BIT (JAGT), Japan-Armenia BIT (JAMT), Japan-Jordan BIT (JJT) and Japan-UAE BIT (JUT), which were all signed in 2018, and the Japan-Cote d’Ivoire BIT (JCT) and Japan-Morocco BIT (JMT), which were both signed in 2020 (all six treaties collectively, “Treaties”). We will also explain Japan’s modern BIT policy based on two treaty-making approaches – traditional investment protection and modern investment liberalization.

Traditional Protection vs. Modern Liberalization

The JJT, JMT and JUT are generally classified as “Traditional Protection IIAs” as they only cover foreign investments that traditionally qualify as an “investment.” On the other hand, JAGT, JAMT and JCT are categorized as “Modern Liberalization IIAs” as they grant investors a right of admission or they establish the status of investments at the pre-investment stage. In this regard, a Japanese government official testified on 12 May 2020 that Japan’s default position in negotiating a BIT with potential contracting states is to adopt the Modern Liberalization IIAs approach, though it was open to consider the Traditional Protection IIAs approach.[3] Considering that not many countries presently adopt the approach reflected in the Modern Liberalization IIAs, this policy of Japan promoting market access is remarkable internationally. However, the authors consider the modern liberalization approach fits Japan’s global economic position as a capital exporting country to broadly protect Japanese investors in a host state.

Definition of Investment

The definition of investments is generally broad in the Treaties the authors surveyed. The Treaties define an “investment” on an “asset” basis as “every kind of asset owned or controlled, directly or indirectly, by an investor,” extending its application to “any tangible and intangible, movable and immovable property, and any related property rights,” with a non-exhaustive enumeration of “investment” forms that enables arbitral tribunals to interpret the investor’s activities or expenditures into the treaty’s definition of an “investment,” even if it is not listed.[4] In contrast, Article 1.4 of the India Model BIT 2015 constitutes an “investment” on an “enterprise” basis that is conceptually narrower than the “asset” approach embraced in the vast majority of Japanese IIAs.

Aside from this common definition of investments, the Treaties also feature four notable hallmarks.

First, JAGT, JMT and JUT each refer to the “characteristics of an investment” as part of their definition of “investment.” In using this term, they are likely inspired by the four characteristics for the definition of “investment” set out in the Salini test and other ICSID arbitral awards[5]: i) the commitment of capital or other characteristics; ii) a certain duration of performance; iii) assumption of risk; and iv) a contribution to the economic development of the host state. In addition to the inherent “characteristics of an investment” generally required in any investment disputes,[6] the enumerated characteristics will be scrutinized in particular for alignment with the purpose of each Treaty before an arbitral tribunal.

Second, JAGT, JJT and JMT each stipulate that an investment shall be “made in accordance with applicable laws and regulations” in the host state. The requirement of compliance with applicable laws and regulations is rooted in arbitral awards.[7] In this regard, the footnote of JAGT Article 1(a) provides that “[i]t is confirmed that nothing in this Agreement shall apply to investments made by investors of a Contracting Party in violation of the applicable laws and regulations of either or both of the Contracting Parties.” Notably, the “degree of violation” by an investor could be a contentious issue for a tribunal to consider. For example, if an investor does not submit the registration documents required under the Foreign Exchange Law at the time of incorporation and afterward conducted ordinary business activities without any particular violations of law in the host state, it would be disproportionate if the investment treaty regime were to consistently preclude the business activities or expenditures of the investor from investment protection regardless of whether such violation is material or minor.

Third, JAGT, JJT and JMT each explicitly preclude public debts from the definition of “investments.”[8] Unless a treaty unambiguously precludes public debts from the definition of “investments,” the issue of whether public debts legally have the appropriate characteristics to amount to an “investment” could be a contentious one. For the avoidance of disputes, JAGT, JJT and JMT each preclude public debts from the definition of investments.[9]

Fourth, JUT Article 1(a) precludes “natural resources” in the definition of investments because that constitutes “public property” under the UAE Constitution.[10] However, this does not mean that all kinds of assets or business activities relevant to natural resources are consequently precluded from investment protection. For example, a natural resource refinery funded by an investor could constitute an “investment” under the JUT, apart from the natural resources involved themselves.

Definition of Investor / Denial of Benefits

The Treaties commonly provide that an “investor” shall be either: i) “a natural person having the nationality of that Contracting Party in accordance with its applicable laws and regulations”; or ii) “an enterprise of that Contracting Party,” that “is making or has made an investment.[11] Among the Treaties, JMT Article 1(b) explains in relation to “dual nationality” that “a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality.” This may not cover a Japanese investor with dual nationality which may be because Japanese immigration law does not recognize dual nationality.

JMT Article 1(b) uniquely qualifies an “investor of a Contracting Party” that is an “enterprise” which is “carrying out substantial business activities” in that Contracting Party. There are some statutory distinctions or differences of legal consequences between JMT and the other Treaties despite the fact that the denial of benefits (“DOB”) clauses in the Treaties also bar an enterprise that does not operate substantial business activities in the home state from enjoying the Treaty’s investment protection.[12] Firstly, excluding such an enterprise from BIT protection through the definition of an investor or DOB clause may result in bifurcation, determining whether the burden of proof shall lie with an investor or a host state. Secondly, there is considerable debate about whether the assertion based on the DOB clause might not go to jurisdiction but rather admissibility or merits,[13] and whether that assertion can be made after the claim is filed or must be invoked at some earlier date in time.[14]

Finally, the Treaties enjoin an enterprise owned or controlled by an investor of a non-Contracting Party that has no diplomatic relations with the host state from enjoying the benefits of the protection.[15]

Most-Favored Nation Treatment

All of the Treaties explicitly preclude the applicability of their MFN provisions to any treatment granted by procedural provisions of any other international agreements. We note that the Modern Liberalization IIAs further proscribe their MFN provisions’ applicability to any treatment granted by substantive and procedural provisions of international agreements signed before the effective dates of the Modern Liberalization IIAs. In this regard, JAGT enjoins its MFN provision’s applicability to any treatment granted by substantive and procedural provisions of international agreements signed before the effective date of JAGT, under Article 3.5, while the other two stipulate the same in the Schedule of Reservation.

Curiously, in barring the MFN provisions’ applicability to substantive and procedural provisions of international agreements signed before the effective dates, the scope of the MFN provisions’ applicability under the Modern Liberalization IIAs is considerably narrower than that provided by the Traditional Protection IIAs despite the investment liberalization policy that Japan wishes to facilitate.

Fair and Equitable Treatment

Each of the Treaties equates FET with the customary international law standard. While India’s Model BIT 2015 Article 3.1 and the Canada-EU Economic and Trade Agreement Article 8.10.2 exhaustively enumerate the elements of FET, Japan is not currently adopting such an approach. Rather, the extremely straightforward wordings of JAMT and JJT’s FET provisions invite interpretation as per their plain and broad meaning by arbitral tribunals. In contrast, the detailed FET provisions in JAGT and JMT may demonstrate that Japan is attempting this type of statutory clarification of the FET standard in some of its IIAs, as endorsed by the Comprehensive and Progressive Trans-Pacific Partnership.[16]

This difference is a result of negotiations between Japan and the other contracting countries. However, we humbly consider this extremely straightforward wordings’ definition could benefit an investor because the FET provision may apply to government action broadly, while the detailed definition could benefit a host state, because an investor shall satisfy the enumerated elements of the FET to prove that the government action breaches it. For broader investment protection, the former approach would be in harmony with Japan’s broader investment protection policy.

Umbrella Clause/Investment Agreement

Among the Traditional Protection IIAs, JUT Article 5.3 adopts an Umbrella Clause providing that: “Each Contracting Party shall observe any obligation it may have entered into with regard to investments … of investors of the other Contracting Party.” In this regard, arbitral tribunals historically diverge on whether and to what extent an Umbrella Clause could apply to a case where an investor alleges a host state’s breach of contract. In SGS v. Pakistan, the tribunal denied the Umbrella Clause’s applicability to a breach of contract between the disputing parties because there was no clear and persuasive evidence that this was the actual intention of the contracting countries.[17] Other tribunals have also underscored that the Umbrella Clause shall solely embrace disputes regarding investment agreements or contracts to which (i) the host state itself is privy as a sovereign (as opposed to separate entities whose actions may be attributable to the state under international law),[18] or which (ii) involve sovereign rather than commercial acts.[19] There are of course, as with many issues arising in investment treaty arbitration, decisions that go the other way. The interpretation of such clauses by a given arbitral tribunal has a potential to limit the scope of obligations arising from an Umbrella Clause of IIAs, such as limiting their application to when a host state acts in a sovereign capacity or when the state itself is a party to the contract. Thus, arbitral tribunals could also restrain the applicability of JUT Article 5.3 depending on their own interpretation of the host state’s actual intention with respect to contractual disputes.

On the other hand, Japan’s Modern Liberalization IIAs cover a breach of contract by the host state by the “investment agreement” provision instead of the Umbrella Clause, as the CPTPP Article 9.19 similarly employed this approach. In this regard, JAMT Article 1 defines an “investment agreement” as a written agreement between an investor (or its investment that is an enterprise in the territory) and a host state’s central or local government or authority. JAMT Article 24.6 entitles an investor to submit a claim for the host state’s breaches of investment agreements through Article 24.2 (a)(i)(B) and (b)(i)(B) to arbitration by the state’s “consent” set out in the Treaty. The latter provision further provides that any dispute settlement clauses in an investment agreement between an investor and a host state shall not supersede this “consent.” Japan’s “investment agreement” provisions may clarify the scope and any limitations on the text of the host state’s obligations and issues of privity under an Umbrella Clause. The authors underline that this “investment agreement” provision’s approach is one of Japan’s remarkable features in the Modern Liberalization IIAs that may replace the traditional function of an Umbrella Clause in IIAs.

Expropriation

Each Treaty establishes the four conditions of lawful expropriation: i) a public purpose; ii) in a non-discriminatory manner; iii) upon payment of prompt, adequate and effective compensation; and iv) in accordance with due process of law. “Compensation” is defined as “the fair market value of the expropriated investments” in the Treaties. “Interest” is calculated as “commercially reasonable rate” in the same manner, while the duration of the interest could be interpreted differently in each Treaty. For example, JAGT, JAMT, JGT and JJT compute “Interest” from the date of expropriation until the date of payment, while JMT and JUT do so by “taking into account the length of time until the time of payment.”[20] These two Treaties might evaluate less amount of the interest than the others in the quantum award accordingly.

We note that JAGT Article 11.2 and 11.3 and JMT Annex referred to in its Article 9 enumerate the three conceivable factors in determining whether a government measure constitutes “indirect expropriation,” which are likely influenced by the investment treaty practice of the U.S. and Latin American countries, comprising[21]: i) economic impact of the government action; ii) interferences with distinct and reasonable expectations arising out of investment; and iii) character of the government action. Both Treaties also delineate that government action for legitimate public welfare objectives, such as public health, safety and the environment, would not constitute “indirect expropriation” except in “rare circumstances.” On balance, the phrase “rare circumstances” is likely provided to benefit an investor.

Conclusion

While substantive provisions in each Treaty vary respectively, the authors conclude that the scope of the investment protection under Japan’s Treaties is comparatively broad. This can be seen from the comprehensive definition of an “investment” or “investor” and the FET provisions, interpretation and application of which are much left to arbitral tribunals. We assume that this is not only because Japan is a capital exporting country, but also because of the fact Japan had never previously been a respondent state in investment arbitrations initiated under its IIAs at least before the signing of the Treaties. Japan’s initiatives on the Modern Liberalization IIAs may explain the recent BIT policy.[22] Finally, preservation of State rights to regulate may also be further area of interest for examining how Japan develops the scope of its IIAs in the near future.

  1. The authors received helpful comments from Shimpei Ishido of Nishimura & Asahi in Japan and Charles Tay of Zhong Lun Law Firm in China. The Japan’s modern BIT policy on procedural provisions will be unveiled at the next piece.

  2. This counting of Japan’s BITs does not include multilateral investment treaties and investment chapters of EPAs except for the Japan-Korea-China Investment Treaty signed in 2012. This piece does not analyze the Japan-Georgia BIT signed on 29 January 2021 after our submission to the editorial committee.

  3. Katsuhiko Takahashi’s response at Foreign Affairs and Defense Committee of the House of Councilors, Japan’s Diet on 12 May 2020

  4. See, e.g., JUT Article 1(a), JMT Article 1(a)

  5. Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco [I], ICSID Case No. ARB/00/4, Decision on Jurisdiction of 31 July 2001. Joy Mining Machinery Limited v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction of 6 August 2004

  6. See, e.g., Romak S.A. v. The Republic of Uzbekistan, Award, 26 November 2009

  7. See, e.g., Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award on 15 April 2009

  8. See JAGT Article 1(a)(iii) “a sovereign debt of a Contracting Party or a debt of a state enterprise,” JJT Article 1(a) Note (i) “public debt,” JMT Article 1(a) Note (i) “debt securities issued by a Contracting Party or loan to a Contracting Party or to a public enterprise.”

  9. See, e.g., Abaclat and Others v. Argentine Republic, ICSID Case No. ARB/07/5, Poštová banka, a.s. and ISTROKAPITAL SE v. Hellenic Republic, ICSID Case No. ARB/13/8

  10. Katsuhiko Takahashi’s response at Foreign Affairs Committee of the House of Representatives, Japan’s Diet on 10 April 2020

  11. See, e.g., JJT Article 1(b), JMT Article 1(b)

  12. See, e.g., JAGT Article 23.2

  13. See, e.g., Plama v. Bulgaria Decision on Jurisdiction, 8 February 2005; Empresa Eléctrica del Ecuador, Inc. v. Republic of Ecuador, Award, 2 June 2009, para. 71; Isolux Infrastructure Netherlands, BV v. Kingdom of Spain, SCC Case No. V2013/153, Award, 12 July 2016

  14. See, e.g., Ampal v. Egypt, Decision on Jurisdiction, 1 February 2016, paras. 160-170

  15. See, e.g., JMT Article 20

  16. See Article 9.6.2 of Comprehensive and Progressive Trans-Pacific Partnership

  17. See SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan, Decision on Jurisdiction, ICSID Case No. ARB/01/13

  18. See, e.g., Impregilo SpA v The Islamic Republic of Pakistan, ICSID Case No.ARB/03/3, Decision on Jurisdiction, 22 April 2005, para. 223, Gustav F W Hamester GmbH & Co KG v Republic of Ghana, ICSID Case No ARB/07/24, Award, 18 June 2010, para. 347(i)

  19. See, e.g., El Paso Energy International Company v. Argentine Republic, Decision on Jurisdiction, ICSID Case No. ARB/03/15, Pan American Energy LLC and BP Argentina Exploration Company v. Argentine Republic, Decision on Preliminary Objections, ICSID Case No. ARB/03/13, CMS Gas Transmission Company v. Argentine Republic, Award, ICSID Case No. ARB/01/8, Sempra Energy International v. Argentine Republic, Award, ICSID Case No. ARB/02/16

  20. See, e.g., JAGT Article 11.5 and JUT Article 12.3

  21. See, e.g., Middle East Cement v. Egypt, ICSID Case No. ARB/99/6, Award of 12 April 2002. Metalclad v. Mexico, ICSID Case No. ARB(AF)/97/1, Award of 30 August 2000

  22. See Japan’s Action Plan for Promotion of Investment Environment Preservation by International Investment Treaties declared on 11 May 2016

Call for Contributions – EFILA Blog

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Given the present debate – on both sides of the Atlantic (and beyond) – surrounding the future of ISDS and bilateral investment treaties, the EFILA Blog editorial board believes that a veritable dialogue must take place, allowing all arguments to be heard and all diverging positions to be defended. Discussing the status of an international regime should take place at the very center of the legal community itself and not be left as a mere political bargaining chip.

For these reasons, EFILA offers its Blog as a space for open dialogue, welcoming any contribution that pertains to the field of of international (investment) law and arbitration, EU law and public policy, as well as the dynamics of these multiple legal, political and economic spheres. Moreover, the new impetus of signing regional free trade agreements in Asia-Pacific is of utmost interest for the existing dialogue, showing how other parts of the world advance their investment cooperation despite this troubled global background.

If you are interested in submitting any material to the EFILA Blog, please contact our Managing Editor, Horia Ciurtin, at the following e-mail address: h.ciurtin@efila.org

Arbitration in Iran: With Focus on International Commercial Arbitration (Part III)

Nasim Gheidi & Parham ZahediGheidi & Associates

(See Part 1 and Part 2 of this post here and here)

Iran’s Bilateral Investment Treaties (BITs)

Iran has signed more than 100 BITs (More than 50 of which are in force) with capital-exporting and neighboring countries for the reciprocal promotion and protection of foreign investment in Iran. The purpose behind these BITs are to guarantee foreign investments’ all necessary permits for the realization of an investment, monetary transfer, full legal protection, compensation for expropriation, observation of commitments (umbrella clause), access to international arbitration and a fair and equitable treatment standard (FET).

The obligations granted by the FET are predictability, transparency, certainty and stability of the legal system of the host state and most important of all principle of due process. An investor must have access to the courts, fair hearings and the right of appeal. Furthermore, it shall be noted that only investors who have been approved and registered by the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI) can enjoy abovementioned substantive investment protection standards. Therefore, foreign investors must obtain an investment license to benefit from those protections.

With regards to dispute settlement, methods of dispute resolution in most of the Iran’s BITs are similar to each other. Iran’s model BIT contains 15 articles and a preamble. Article 12 and 13 are dealing with methods of settlement of potential disputes between the contracting parties or investor of one of the contracting parties. Under Iran’s model BIT, these methods can be categorized into two groups. One is when the contracting parties disagree on the interpretation or application of the BIT and the other is in cases in which a dispute between a contracting party and an investor of the other contracting party arises.

According to the BITs, if any dispute arises between a contracting party and an investor of the other contracting party with respect to an investment, in this case, each party has to wait six months “from the date of notification of the claim by one party to the other.” This intervening period allows parties to negotiate their legal claims and possibly reach an amicable settlement. If a dispute refers to the tribunal prior to the six months, then the dispute is rejected based on admissibility ground and not on jurisdiction. In case they fail to resolve their dispute amicably through negotiation and consultation, they shall either refer their dispute to the competent national court of the host country or arbitration.

The award shall be final and binding on both parties to the dispute. In any circumstances no party can use both methods simultaneously. For instance, if the dispute is referred to national courts, then in that case, only by the consent of both parties, the dispute can be referred to arbitration. In return, national courts shall not have jurisdiction over any dispute referred to arbitration. However, these provisions do not bar the winning party to seek for the enforcement of the arbitral award before national courts.

Under BITs the investor at his choice, may choose to submit its dispute to an ad hoc Arbitral Tribunal in compliance with UNCITRAL rules or refer the dispute to an arbitration institution. Interestingly, in some of the concluded BIT’s, with Austria, Greece, Sweden, Cyprus, France, Venezuela, Malaysia and Spain parties have different choice of institutions to refer their arbitration to. For example, in some of them Parties can either refer their disputes to International Chambers of Commerce (ICC) or International Center for Settlement of Investment Dispute (ICSID) and in some to Stockholm Chambers of Commerce (SCC). However, in some other BITs parties’ choices are limited to only an ad hoc Arbitral Tribunal other than national courts, like China, South Africa, and Switzerland.

With respect to disputes between contracting parties concerning the interpretation or application of the BITs, they shall, in the first place, try to settle their dispute amicably. The period of negotiations defer between two to six months. If no settlement can be reached then the contracting parties are allowed to initiate arbitration proceeding.  The negotiation period is mandatory and in case of non-compliance, the dispute might be rejected by tribunal. The arbitral tribunal shall consist of three arbitrators. Each party has the right to choose one and the chosen arbitrators shall choose the third who will be the chairman.

In case one of the contracting parties fail to choose an arbitrator or the chosen arbitrators fail to choose the third, then either contracting party may invite the president of the International Court of Justice to make any necessary appointment. According to the provisions of BITs, the arbitral tribunal shall reach its decision by a majority of votes. The decision of the tribunal shall be final and binding on both contracting parties.

As previously discussed in the last article[1], requirements of Article 139 of Iranian constitutional Law is a major obstacle to recourse to arbitration in Iran.  Due to this requirement in some Iranian BITs, in the arbitration clause there is a phrase, which might be inserted due to this Constitution obstacle. Paragraph 2 of Article 12 of Iranian Model BIT states:

“…either of them may refer the dispute to the competent courts of the host Contracting Party or with due regard to their own laws and regulations to an arbitral tribunal of three members referred to paragraph 5 below.

As it can be seen a systematic reservation has been directly or indirectly made to Iran BITs regarding referring the dispute to arbitration. The Iranian Government may invoke the constitutional prohibition as an objection to the jurisdiction of the arbitration tribunal in the case of investment disputes.

In a dispute between Iran Ministry of Health and a British Company before Swiss Court of Appeal, Cementation International Ltd v. Republique Islamique d’Iran, the court held that parties could not invoke their constitutional provision in order to set aside the arbitration clause. This is because parties to the contract have implicitly waived their right to invoke all internal conflicting provisions by referring their dispute to arbitration. Moreover, it can be argued that whenever a State with knowledge and intent, consents to arbitration and later tries to nullify it with invocation of its internal law and raise the jurisdictional objection, its objection shall be denied, because it is in contrary with international public order.

However, one shall bear in mind that enforcement of such award cannot be guaranteed in national courts of Iran due to their tendency to comply with public order of the nation.


[1] Gheidi, N. and Zahedi, P. 2017. Arbitration in Iran: With Focus on International Commercial Arbitration (Part II). EFILA Blog

 

What’s the value of investment treaties?

by Dr. Dominic Beckers-Schwarz, Lawyer, Paris

 

On 7 March 2017, one day after the OECD Global Forum on International Investment, over one hundred stakeholders from businesses, trade unions, academics and OECD member states gathered for the one-day “3rd OECD Annual Conference on Investment Treaties”. The conference addressed issues concerning “evaluating and enhancing outcomes of investment treaties”.

How to measure the societal costs and benefits of investment treaties?

Following the previous day’s call for a new globalization narrative, the OECD opened the first conference panel by addressing the need to measure the societal costs and benefits of investment treaties.

Academics first explained the challenges of measuring the effects of investment treaties. While it may be easy to measure the economic exchange between two states, such a quantification is limited to bilateral interactions and does not necessarily address the global cross-fertilization of today’s investment treaties. The panel expressed doubt regarding the possibility of measuring in figures the societal costs and benefits of, for example, investor-state dispute settlements (ISDS) and the political benefits of depoliticizing international investment disputes.

The panel turned to the, sometimes unwritten, fundamental goal of international investment treaties—depoliticizing investment disputes and enhancing international investment flows through clear, stable and enforceable investor rights—a sort of rule of law codification.

But international investments occur frequently, even where no international investment treaties exist. International investment agreements often are not part of national investment promotion programs. However, smaller states especially see the need to conclude investment treaties to enhance cross-border investment.

When an NGO representative asked whether ISDS could cause populist resistance, due to misuse of the system, panelists denied the possibility of potential abuse of ISDS through cherry-picking. Costs of investment arbitration procedures and anti-treaty-shopping clauses in international investment treaties would prevent misuse of the system.

In sum, academics and government officials from OECD and non-OECD countries agreed that the connection between international investment treaties and economic dynamics needs continuing assessment. Further work includes defining more standardized approaches to measuring the effects of investment treaties. The OECD could be an optimal organization to conduct a cost-benefit analysis.

In my view, that governments are seeking out careful analysis of the costs and benefits of the investment treaty approach together is a positive sign to continue and enhance global cooperation in responsible investment policy.

Joint government interpretation of investment treaties—achievements and obstacles

The second panel addressed the topic of governments jointly interpreting international investment treaties in situations where no treaty clause permits the governments to do so (unlike NAFTA).

In general, the panel viewed earlier interpretations as better and more authoritative, since the later an interpretation, the more it may look like a hidden amendment.

Some state representatives explained that joint interpretations are a good way to avoid costly, lasting and complicated renegotiations. Participants mentioned fair and equitable treatment (FET) as a good joint interpretation example. Joint interpretations within the boundaries of the Vienna Convention of the Law of the Treaties might, for example, clarify or adjust an international investment treaty’s broad standards. Evolving views on what international investment treaties should address and how they should function lead to the need for such interpretations.

Another approach to enhancing the certainty and predictability of international investment treaties is a joint interpretation of certain investment treaty standards at the time of the treaty’s conclusion. For example, several provisions of CETA are subject to a joint interpretative instrument in CETA’s annex, which the parties agreed on at the time of signature. Such an expression of the parties’ intent might ensure greater clarity. However, conference participants cautioned that such joint interpretations must be clearly worded, because bad drafting could inspire further confusion rather than clarifying treaty standards.

Discussion participants further agreed that the non-disputing party of a treaty should always be informed about interpretations made by the disputing parties. Some provisions, namely Art. 5 of the UNCITRAL Rules on Transparency in Treaty-based Investor State Arbitration, even enable the non-disputing party to intervene in interpretations, such as by attending the hearings.

Panel members also expressed their interest in working on a plurilateral basis when interpreting standard investment treaty clauses. They saw this as the only way to maintain a common understanding of what an investment treaty covers.

Two participant questions especially showed the need for further work on the topic: (1) How far can a joint interpretation go, and when does it turn into an amendment? (2) As of when is a joint interpretation valid: the moment of the conclusion of the treaty or the moment of the formation of the joint interpretation?

In my view, joint interpretation can be a useful method of clarifying the contracting parties’ intent. However, retrospective joint interpretations might lead to back-door amendments, exceeding the reasonable bounds of the treaty. Further work in this area might seek to establish a clearer understanding of the barrier between legitimate interpretation and unwanted amendment and the impact of such a delineation in the field of international investment law.

Enhancing investment treaty outcomes and addressing globalization concerns

Though shorter in time, the closing panel drew on the Global Forum’s emphasis on “better” globalization from the day before and linked it to the discussions of this conference. Among international organizations—represented in this panel by UNCTAD and OECD—government representatives and NGOs, there is broad consensus on the necessity of further international cooperation and the global exchange of goods and investments. But ideas of whether the system is sufficiently inclusive, or how to make it more inclusive, still differ. The question, how to access the exact societal costs and benefits of these treaties showed the need for further work.

The panel showed, that OECD and UNCTAD both do substantive work on the topic and continue to do so by especially by reviews, reports, analysis and statistics. Governments endorse that work, since it is an important basis for their politics. NGOs use it to point out what may be improved in their view. This OECD conference gave governments as well as NGOs an opportunity to exchange their views on what the problems are and how to tackle them.

In my view, the OECD’s work—especially on topics like inclusive growth and responsible investment—can help promoting a form of broadly beneficial globalization in the investment context and in general. Let’s not ask whether globalization is crumbling away; let’s work on a globalization which fits everyone’s needs.

The continued lack of adequate investment protection in Europe

Nikos Lavranos, Secretary General, EFILA

Recently, the UNCTAD Investment Division announced that it had “completed its regular semi-annual update of the Investment Dispute Settlement Navigator, which is now up-to-date as of 1 January 2017”.

The Navigator is a useful web-based search tool containing information regarding pending and closed investor-State disputes based on the thousands of investment treaties.

According to UNCTAD, the key findings of this update are as follows:

“In 2016, investors initiated 62 known ISDS cases pursuant to international investment agreements (IIAs). This number is lower than in the preceding year (74 cases in 2015), but higher than the 10-year average of 49 cases (2006-2015).

The new ISDS cases were brought against a total of 41 countries. With four cases each, Colombia, India and Spain were the most frequent respondents in 2016.

Developed-country investors brought most of the 62 known cases. Dutch and United States investors initiated the highest number of cases with 10 cases each, followed by investors from the United Kingdom with 7 cases.

About two thirds of investment arbitrations in 2016 were brought under bilateral investment treaties (BITs), most of them dating back to the 1980s and 1990s. The remaining cases were based on treaties with investment provisions (TIPs).

The most frequently invoked IIAs in 2016 were the Energy Charter Treaty (with 10 cases), NAFTA and the Russian Federation-Ukraine BIT (three cases each).

The total number of publicly known arbitrations against host countries has reached 767.”

Some of these above key findings are of particular interest and should be put into a broader perspective.

First, it is interesting to note that the number of new ISDS cases has fallen. This is a trend that can also be seen for example in the ICSID statistics, which show that the number of ICSID cases has been falling as well (in 2015 52 new cases were registered, while in 2016 48 new cases were registered).

UNCTAD does not give any explanation as to the possible reasons for the fall in cases. One could of course think of several reasons: the States have improved their behaviour vis-à-vis foreign investors or investors consider the use of investment treaty arbitration as a less attractive option for dispute resolution and instead prefer to use other options. In this context, it is interesting to note that according to the same UNCTAD Navigator, States continue to win more cases (36.4%) than investors (26.7%), while 24.4% of the cases are settled. Investors/Claimants could perceive this as not such an attractive option to resolve a dispute with a State, in particular in conjunction with the high costs associated with the proceedings.

Second, it is noticeable that the Energy Charter Treaty (ECT) is the most frequently invoked investment treaty in 2016. This has been a trend of the past years with the explosion of disputes in the renewable energy sector, mainly against Spain but also against several other European States. Moreover, in the past 3 months it has been reported that investment arbitration proceedings – not only based on the ECT – have been initiated against Italy, Croatia, Bosnia-Herzegovina, Latvia, Greece and Serbia.

This suggests that European States have a poor track record when it comes to the protection of foreign investors and their investments. Again, one wonders what the reasons are for the fact that the ECT is so popular and why European States face some many disputes. Whatever the reasons may be, the fact that the ECT and BITs are used so frequently against European States underlines the continued lack of adequate investment protection in Europe, which in turn confirms the necessity of investment treaties.

In fact, the World Rule of Law index 2016 indicates very clearly the stark differences among European States regarding their Rule of Law track record. This index ranks Denmark (1), Norway (2), Finland (3), Sweden (4), Netherlands (5), Austria (6), Czech Republic (17), France (21), Spain (24), Romania (32), Italy (35) and Bulgaria (53) out of 113 countries.

The Corruption Transparency index 2016 of Transparency International ranks Denmark (1), Finland (3), Sweden (4), Switzerland (5), Norway (6), Netherlands (8), Germany (10), Poland (29), Lithuania (38) Czech Republic (47), Croatia (55), Romania (57), Italy (60), Greece (69) out of 176 countries.

The Doing Business Report 2017 ranks Denmark (3), Norway (6), UK (7), Sweden (9), Finland (13), Germany (17), Lithuania (21), Bulgaria (39) and Malta (76) out of 190 countries.

Obviously, these rankings have their limitations and must be treated with caution but the emerging general picture is nonetheless very clear. The “Nordic” European countries simply have a better track record than the “Southern” and “Eastern” European countries. In other words, they not only treat foreign investors better but they also have less perceived corruption and less red tape for doing business.

It is about time that this reality is generally accepted also in the European institutions living in the “Schuman bubble”.

These obvious conclusion from this is that – contrary to UNCTAD’s and European Commission’s repeated call for “reforming” the current system by inter alia also terminating investment treaties – all efforts should be focused on improving the Rule of Law track record in those European countries which clearly show deficiencies.

However, in the past decades little progress has been made and there is no reason to believe that things will improve very soon. Consequently, in these circumstance investment treaties are still very much needed – in particular in Europe.

 

The Lack of Any Legal Conflict Between EU Law and Intra-EU BITs/ECT Disputes

 by Dr. Nikos Lavranos LLM, Secretary General of EFILA*

A couple of weeks ago the first award in the series of more than 25 other solar energy cases against Spain was issued.

The case was brought by two companies based in Luxembourg and the Netherlands against Spain on the basis of the Energy Charter Treaty (ECT) arguing that Spain violated its ECT obligations when it adopted measures which retroactively reduced the agreed feed-in tariff and other commitments for solar energy installations.

The majority of the arbitral tribunal concluded that there was no violation of the FET-standard, neither was there a sufficiently serious destruction of the investments of the investors. In other words, the claim was rejected.

In this blogpost I do not want to discuss the outcome of the case, but rather want to highlight one important issue, which is underlying all disputes in which European investors bring a claim against an EU Member States, namely, the relationship between EU law and the hundreds of intra-EU BITs/ECT.

The argument, which has been repeatedly and consistently advanced in all intra-EU disputes by the European Commission and various EU Member States (in particular by Spain, Czech Republic, Slovak Republic) is that there is a legal conflict between EU law and the intra-EU BITs/ECT, which would somehow render the intra-EU BITs/ECT in-applicable or would prevent European investors from using them against EU Member States.

Several arguments have been put forward in this context, which can be summarized as follows.

The first argument, which was advanced in the earlier intra-EU BITs cases, such as in the Eureko v. Slovak Rep. case, by the European Commission (but not in this one anymore), was that due to the accession of the former Central and Eastern European countries to the EU in 2004 and 2007, the existing intra-EU BITs were superseded by EU law.

The second argument, which was also used in this case, is that Art. 344 TFEU would prohibit arbitration proceedings between a private party and a Member State. However, as the arbitral tribunal in this case correctly pointed out, Art. 344 TFEU “literally refers to inter-State disputes, rather than to disputes between EU Member States and private persons”. The numerous domestic court disputes that concern the interpretation of EU legislation belie Spain’s thesis that only EU institutions should have jurisdiction over disputes concerning EU law. For the tribunal, EU Member States could agree to arbitrate disputes that “may involve” EU law issues. Moreover, relying on the EcoSwiss case, the tribunal considered it “universally accepted” that arbitral tribunals have both the ability and the duty to apply EU law. Citing the Electrabel v. Hungary award, the tribunal construed Art. 344 TFEU as a guarantee that the CJEU has the final say on EU law in order to ensure its uniform interpretation. Also, citing Electrabel again, the tribunal underscored that the EU accepted the possibility of investor-State arbitration under Art. 26 ECT when it became a party to that treaty, which does not admit reservations (Art. 46 ECT).

The third argument, which was advanced by Spain, was that the ECT would contain a so-called “implied disconnection clause” for intra-EU disputes. Some international treaties to which all EU Member States are parties indeed contain “explicit disconnection clauses”, which provide that EU Member States will apply relevant provisions of EU law in their mutual relations instead of the international treaty that contains them. However, the ECT does not contain an “explicit disconnection clause”, and neither did the arbitral award accept the artificial construction put forward by Spain and the European Commission of an “implied disconnection clause”.

The fourth argument, again advanced by Spain in this case, was that investors of an EU Member State were simultaneously investors of the EU. Since the EU is a party to the ECT Spain claimed that EU Member State investors could not be considered as “an investor of another Contracting Party”. It was also argued that the definition of “territory” encompassed the territory of all Member States and thus the investors originated in the same “area” or “territory” as they made the investment. The tribunal correctly dismissed this artificial argument. It held that EU Member States did not lose their status as ECT parties when the EU ratified the ECT. Likewise, Spanish territory constituted the relevant “area” or “territory” for jurisdictional purposes and not the EU territory as a whole.

In line with all arbitral tribunals dealing with intra-EU disputes so far, also this tribunal fully rejected all the above mentioned arguments. From a legal point of view, of course, no other solution would be acceptable, since only the explicit termination of the BITs/ECT according to the applicable rules would cease the application of those investment treaties – and only after the sunset clause has expired. A recent example is the termination of the ECT by Italy as of 1 January 2016. But neither the accession of states to the EU nor any provision of EU law stands in the way of investor-State arbitration initiated on the basis of valid investment treaties.

However, more important than the legal conclusions are the political implications. Ever since the first intra-EU disputes popped up – probably the Eastern Sugar case decided in 2007 – the attempts of the European Commission to thwart the invocation of intra-EU BITs/ECT have failed across the board. Moreover, despite the rising number of intra-EU disputes, most Member States consider them still highly necessary and thus have not terminated them yet.

Frustrated by the fact that intra-EU disputes continue to pop up, the European Commission has decided to apply a triple “bazooka approach” to wipe out the use of intra-EU BITs/ECT once and for all.

First, the European Commission launched infringement procedures against 5 Member States because their intra-EU BITs supposedly violate EU law.

Second, in an unprecedented act, the European Commission prohibited Romania to fulfil its international obligations of paying out the Micula award because that would supposedly constitute new, illegal state-aid. The Micula brothers have brought an action against the European Commission, which is currently pending before the General Court of Justice of the EU. Recently, the European Commission went as far as trying to vacate the ICSID award by appealing before US courts.

Third, the European Commission continues to actively intervene in all intra-EU BITs/ECT cases by trying to convince the arbitral tribunals that they lack jurisdiction for the above-mentioned arguments.

While the third approach has so far failed with arbitral tribunals, it is going to be extremely interesting to see whether the first two approaches before the Court of Justice of the EU (CJEU) will eventually succeed.

If this “big bazooka approach” succeeds, it will obviously mean the end of intra-EU investment arbitration proceedings. The question then arises whether the remaining option of using national courts will be of any help for investors/claimants, in particular in light of the shortcomings of the judicial system in many EU Member States.

Thus, it can be concluded that there is no legal conflict between EU law and intra-EU BITs/ECT, but that does not – necessarily – mean that one cannot create a political conflict, which would result into a significant reduction of the level of investment/investor protection within the EU.

But, ultimately, it is for the arbitral tribunals and the CJEU to decide on the basis of the Rule of Law and to deliver justice.


* Nikos Lavranos, Head of Legal Affairs at Global Investment Protection AG; Secretary-General of EFILA.

ISDS Novelty Overlooked Or Novelty Outdated?

by Emma Spiteri-Gonzi*

Investor-State Dispute Settlement (ISDS) is a procedural mechanism provided for in international investment agreements such as bilateral investment treaties (BITs) or multi-lateral investment treaties (MITs). ISDS allows an investor from one country to institute proceedings against the country where their investments where made- the Host State. So, has this novelty been overlooked or has it simply been outdated?

Disputes between investors and foreign countries have required adjudication for as long as there has been cross-border investment.  Under international law the taking of foreign property was protected under the minimum standard of treatment of aliens premised on the idea that a State is bound to respect and protect the property of nationals of other States. The problem however, lay in the individual being able to channel that right. Prior to the evolution of the modern rules-based system, foreign investors investing abroad relied heavily on the mercy of their own State. The injured citizen’s remedy lay in seeking diplomatic protection through his or her own government. If so inclined, the State would espouse the claim of its citizens against the offending Host State.

One will remember cases like Barcelona Traction, Light and Power Company Ltd (Belgium v Spain), in which the International Court of Justice (ICJ) detailed the shortcomings of diplomatic espousal remarking how the State is a ‘sole judge’ in deciding whether ‘its protection will be granted’ to a national, to what ‘extent it is granted’, and ‘when it will cease’.

The precarious procedural rights of the injured investor relying on Inter-State adjudication is further detailed in Elettronica Sicula S.P.A. (United States of America v Italy) where the court rejected the applicant’s claim for reparation and Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo) where notwithstanding a claim was successful in terms of securing the protection of Mr. Diallo’s human rights, the judgment fell short of protecting his investments.

One of the first investment treaties to provide for ISDS was the Belgium-Indonesia BIT of 1970. The clause was simple:

any dispute concerning an investment between an investor of one Contracting Party and the other Contracting Party shall, if possible, be settled amicably… Where the dispute is referred to international arbitration, parties in the dispute may agree to refer the dispute either to…’.

This clause paved the way for the multitude of ISDS clauses found in international investment agreements today.

Opponents of ISDS have pointed out that investment agreements concluded by developed countries no longer require ISDS and that this mechanism has become obsolete. The truth is that relying on the national courts of the Host State to enforce obligations in an investment agreement is not always easy, no matter how developed.

An investor in a Host State court is automatically an alien, advancing a claim in a foreign court automatically places the investor at a disadvantage of itself.

Lack of access to the court is another consideration. International investors have found that there would be no suitable forum, in certain Host States, to bring a claim unless an ISDS provision in the investment agreement had made adequate provision.

Host States are not always forthcoming with ratifying the rules entered into in an international investment agreement into their national laws. When this occurs, even if investors have access to local courts, they may not be able to rely on the obligations the government has entered into in the international investment agreement.

Today, opponents of ISDS choose to remember the procedure for providing corporations and investors with the locus standi to ‘drag’ Sovereign governments to dispute settlement.  More often it’s remarked that investment treaties are being concluded between countries with equally developed legal systems and it follows that any dispute would take place in the courts of either developed State, therefore the process has become outdated.

The past struggles of private parties to challenge the actions of governments seem all but forgotten. But perhaps we should not be so quick to forget, and not look a gift horse in the mouth.


* Emma Spiteri Gonzi, Legal Counsel- Nemea Bank Plc.

Redefining the ‘Centre’: International Economic Law and Grand Strategy in a Multipolar World

by Horia Ciurtin LL.M., Managing Editor of the EFILA Blog*

(Legal) Multipolarity Revisited: What Lies Beyond Westphalia?

This brief introduction to such an ambitious thematic must undoubtedly commence by positing its adherence to the (non-legal) core concept of ‘grand strategy’ and its realist avatars in international economic law. More precisely, it shall be argued that – at a certain level – the normative sphere is instrumentalised by competing nomothetic actors in order to enhance their power position and joint economic security, in a troubled multipolar world.

Thus, following John Mearsheimer’s influential paradigm and his (in)famous 1994 article regarding the false promise of international institutions, it can be affirmed that the “[international] institutions are basically a reflection of distribution of power in the world” and that the most powerful actors in the system “create and shape institutions so that they can maintain their share of world power, or even increase it”. For these reasons, international law and its main agents – international institutions – represent a formalised, but temporary consensus in the clash of competing interests.

However, this side of the story is entirely accurate only for an international arena dominated solely by sovereign state actors. Presently, as the Westphalian international system of autarchic legalities disintegrates, paving the way for a post-sovereign order, a different relation between legal macro-spaces (or, as Carl Schmitt famously called them, Grossräume) seems to emerge. New power blocs are forged from the global economic bellum omnium contra omnes, allowing them to surpass the notion of sovereignty and building stranger ‘empires’ bound together by the cold letter of international treaties which – eventually – develops into a more stable quasi-constitutional internal order.

The European Union, the NAFTA space and the Eurasian Union are just a few examples of this trend. Each of these blocs implies a loss or – at least – a limitation of state sovereignty in several fields, in the quest for attaining the upper hand in a larger global confrontation with other blocs or singular actors. In a certain way, some sovereignty is individually lost so that the sovereigns might increase its projected power in a joint manner, following their grand strategy for hegemony.

In such circumstances, the classical balance of power cannot any longer occur between single states and their shifting alliances, but rather among macro-spaces united in formal legal agreements (later turned into quasi-constitutional orders). Even though, as posited by Mearsheimer and other realists, self-interest and the desire for hegemony might drive sovereigns into such legal constructs, their origin does not account for their further development.

Thus, once roaming the international arena, macro-spaces appear as a new breed of economic ‘predators’, more powerful and more fit for survival than the sovereigns taken separately, factor which convinces such states that a (post)sovereign structural alignment might take them further in the quest for power and hegemony, despite having to share some part of the spoils with the co-victors.

Normative Mimesis: Imperial Weapon or Remedy for Lingering Divisions?

In such a context, can we still refer to a truly international system or just a series of regional sub-orders that economically interact in an episodic manner? Is the international order now also territorially fragmented, in addition to the already decried functional fragmentation?

If once upon an idealist time, ‘autonomous’ normative systems – such as FTAs, BITs, multilateral trade agreements – and the institutions that administrate them were thought to act as gap-filling mechanisms, offering a cohesive and coherent paradigm to an otherwise centrifugal setting, the new global paradigm reveals the original realist tenet.

More precisely, major power brokers – be it soft or traditional – use such instruments for their own strategic goals. While alignment with like-actors is carefully negotiated in a quest for convergence of paradigms and tactics, the relationship with non-aligned or competing actors is defined in different terms, seeking to advocate for rules that would attract the other in one’s own normative realm.

Setting an example, triggers normative mimesis. A ‘centre’ dominates the periphery solely by creating a model. With a model consistent enough, advocated by an actor strong enough (often adversarial), there commences a process of legal emulation and ‘bandwagoning’. The ones left on the margins will try to imitate the centre’s model in order to gain recognition and reflect its power. Once the peripheries and non-aligned actors had been attracted in the ‘gravitational’ area of a hegemonic actor, other hegemons might succumb to the newly created rules. Imitation is the beginning of legal dominion.

However, such a strategic ‘great game’ in the field of international economic law might not have results as cynical as its origins appear to be. The ailing divisions and fragmentation of this system might benefit from mimetic normativism, forcing reluctant actors in one direction or another and opening the path to an ‘imposed’ con vergence, but nonetheless convergence.

Between TPP and TTIP: Where is the ‘Centre’ of the World?

Such realities and tactics is what determined the BIT ‘European gold standard’ to be quasi-universal in the 20th century. It attracted in its sphere of legal influence both the north-American actors, the ‘Third World’, the Communist and post-Communist states. With few exceptions, such a model became the undisputed norm in international investment law. The trend set by EU (EC) member states in their bilateral relations reverberated across the globe, enveloping former colonies and present allies, benefactors and adversaries, richer and poorer states, without limits or tactical setbacks.

However, the first actor to start diverging from the model was undoubtedly the United States. Near the turn of the century, its FTAs and ‘model BITs’ were developed in an innovative way, reflecting a change of options and a new geopolitical framework. Part of another grand strategy, the US new FTAs and model BITs offered an alternative to the classical ‘neat’ European-inspired BIT, advocating a more expansive view upon international trade and investment.

Following this pattern, the US began the negotiation of two ample FTAs (including consistent investment chapters) along its new comprehensive trade and investment policy. Concentrating in ‘crossing’ both oceans, the US crafted a strategy of gaining an intermediary position between its Asian alterity and European kinship, acting both as a bridge and unavoidable toll-house. With this goal in mind, the US acted so as to transform itself into the epicentre of a globalised world that seems to be increasingly multipolar. Thus, in its design, even though the international arena is unavoidable moving towards plurality, the actors need not be of equal rank. Asymmetry reigns even better in a multipolar setting, allowing north America to be the utmost centre among several centres.

TPP. The first of these two agreements – TPP – involved the strategic lines of concentrating on the Asian ‘pivot’ and attracted twelve states from all around the Pacific Rim (both from North/South America, Asia and Australia), in a multilateral effort to create an open economic space. However, everybody seemed (and still seems) to diplomatically ignore the geopolitical elephant in the room: the total absence of China from the negotiations. If this was merely a legal-economic instrument, such a choice and development would have proved incomprehensible.

If, on the other hand, one analysed the situation (geo)politically, it might lead to different conclusions: (a) either this is one initial step of a ‘containment’ strategy directed against China, (b) or the relationship with China is a privileged one, deserving a bilateral approach between two sovereigns of equal calibre.

Nonetheless, even though China is the great absentee in the TPP game, the conclusion of this agreement – with its myriad of typically American exceptions and derogations – sets the scene for any further development of this legal sphere. The TPP example has been set and – with some effort – it will be ratified and come into full force before the US finishes the negotiations with other high-profile ‘centres’ such, representing a ‘living’ precedent that might compel other actors to follow this model or – at least – to make substantial concessions from their previous practice in the FTA/IIA area.

TTIP. As regards the negotiation of the comprehensive agreement with the European Union, the situation proved to be different from the outset. The 28 member states had a single voice in the negotiation (unlike the 11 Pacific states) with the US and their joint economies accounted for a higher power. One EU tactic for reaching an initial negotiation equilibrium was not to approach the US as part of a larger NAFTA space, but rather to take on individually each of the NAFTA states. Therefore, in the TTIP process, asymmetry was less evident and no decisive ‘upper hands’ appeared during the game.

Moreover, the EU itself also managed to have its ‘model’ tested and set out, in the FTA with Singapore and in the finalised agreement with Canada. At the same time, it also began a more ample FTA programme, envisioning a deal with Vietnam, India, South Korea and – eventually – China. Thus, the EU also strives to be the trend-setter in the FTA/IIA area, introducing its own innovations and idiosyncrasies, concentrating upon Asia and the Pacific Rim itself.

In these circumstances, TPP, EUFSTA, CETA proved to be a ‘prologue’ to the much anticipated clash of EU and US during TTIP negotiations, leaving both actors bound to their own models and with less room for manoeuvre. However, what keeps them wired to the endless rounds of negotiations (so far, eleven) is the idea that – once such an agreement reached – it will transform these two ‘centres’ in a formally allied mega-centre that irremediably sets the example for the entire world.

This is the reason for which each actor wishes to see its own model enshrined in TTIP. Once there, it will be the model. And the normative mimesis triggered thereafter will emulate the rules of the hegemon that managed to formalise its legal strategy in such an influential agreement.


 * Horia Ciurtin, Managing Editor, EFILA Blog; Legal Adviser – International Arbitration, Scandic Distilleries S.A; Editor, VERSO Journal [Romania]; Freelance researcher [see SSRN author page].

 

AIA and EFILA Event: Seminar on Arbitration and EU Law

Seminar on Arbitration and EU Law – 7th April 2016, Brussels, Belgium

 

 

Over the years, there has been increasing EU activity in private international law. The interaction and relationship of EU law and international commercial arbitration has had growing interest over the years. In this course, we will consider the key changes in the Brussels Regulation (recast) for commercial parties, the consequences and interpretation of the arbitration exceptions and the relationship between EU state aid and investment protection under bilateral investment treaties.  We will also discuss the procedure, minimum standards, application of Article 6 of the European Convention on Human Rights and compare BITs and EU law in investment arbitration.

 

Confirmed speakers for this event are Mr. K. Adamantopoulos, Mr. Jean-François Bellis, Mr. George A. Bermann, Mr. Damien Geradin, Mr. A. Komninos, Mr. N. Lavranos and mrs. Z. Prodromou.

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