The emerging global regime for investment

Harvard International Law Journal

Volumn 51, Issue 2, 2010, Pages 427-473

  Salacuse, Jeswald W ^a  

^a TUFTS UNIVERSITY   (United States)

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EID: 77956134672     PISSN: 00178063     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (317)

1. See, e.g. Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.- Arm., Sept. 23, 1992, S. TREATY DOC. No. 11 (1993), available at http://www.unctad.org/sections/dite/iia/docs/bits/us-armenia.pdf;
2. Vertrag vom 10. November 1989 über die Föderung und den gegenseitigen Schutz von Kapitalanlagen [Treaty Concerning the Encouragement and Reciprocal Protection of Investments], F.R.G.-Pol., Nov. 10, 1989, BGB1. II at 606;
3. Agreement for the Promotion and Protection of Investments, Indon.-U.K., Apr. 27, 1976, U.K. Treaty Series #62, available at http://www.unctad.org/ sections/dite/iia/docs/bits/germany-poland.pdf. U.S. bilateral investment treaties (BITs) tend to refer to the "encouragement of investment," rather than to the "promotion of investment." Based on an analysis of BIT provisions, it appears that the two terms, encouragement and promotion, have the same meaning.
4. U.N. Conference on Trade and Development, World Investment Report 2008: Transnational Corporations and the Infrastructure Challenge, at 14, U.N. Doc. UNCTAD/WIR/2008 (Sept. 24, 2008) [hereinafter UNCTAD, World Investment Report 200S\. For background on the investment treaty movement
5. see, for example, U.N. Conference on Trade and Development, Bilateral Investment Treaties 1995-2006: Trends in Investment Rulemaking, U.N. Doc. UNCTAD/ITE/IIT/2006/5 (2007).
6. See also U.N. Conference on Trade and Development, Bilateral Investment Treaties in the Mid-1990s, U.N. Doc. UNCTAD/ITE/IIT/7 (1998) [hereinafter UNCTAD, BITs in the Mid-1990s];
7. RUDOLF DOLZER &. MARGRETE STEVENS, BILATERAL INVESTMENT TREATIES (1995);
8. Qingjiang Kong, Bilateral Investment Treaties: The Chinese Approach and Practice, 8 ASIAN Y.B. INT'L L. 105, 105-36 (1998/1999);
9. F.A. Mann, British Treaties for the Promotion and Protection of Investments, 52 BRIT. Y.B. INT'L L. 241 (1981);
10. Ronald K. Paterson, Canadian Investment Promotion and Protection Treaties, 29 CAN. Y.B. INT'L L. 373, 373-90 (1991);
11. Jeswald W. Salacuse & Nicholas P. Sullivan, Do BITs Really Work? An Evaluation of Bilateral Investment Treaties and Their Grand Bargain, 46 HARV. INT'L L.J. 67, 67-75 (2005);
12. Kenneth J. Vandevelde, The Bilateral Investment Treaty Program of the United States, 21 CORNELL INT'L L.J. 201, 210 (1988).
13. For an excellent online compendium of bilateral investment treaties, see U.N. Conference on Trade and Development, Investment Instruments Online: Bilateral Investment Treaties, http://www.unctadxi.org/templates/DocSearch.aspx? id=779 (last visited Mar. 9, 2010).
14. See, e.g. United States-Colombia Trade Promotion Agreement, U.S.-Colom., Nov. 22, 2006, http://www.ustr.gov/trade-agreements/free-trade-agreements/ colombia-fta/final-text;
15. Mohammad Nsour, Fundamental Facets of the United States-Jordan Free Trade Agreement: E-Commerce, Dispute Resolution, and Beyond, 27 FORDHAM INT'L L.J. 742, 742-84 (2004). One must also consider earlier bilateral commercial and trade agreements, such as the Treaties of Friendship, Commerce and Navigation negotiated by the United States with numerous countries, which often include provisions that affect foreign investments and can become the basis for international litigation to protect investor interests.
16. See, e.g., Elettronica Sicula S.P.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. 3 (July 20) (applying the Treaty With Italy on Friendship, Commerce, and Navigation, U.S.-Italy, Feb. 2, 1948, 63 Stat. 2255 (effective July 26, 1949));
17. see also Oil Platforms (Iran v. U.S.), 2003 I.C.J. 161 (Nov. 6) (applying the Treaty of Amity, Economic Relations, and Consular Rights, U.S.-Iran, Aug. 15, 1955, 8 U.S.T. 900).
18. Masaki Yasushi, Economic Partnership Agreements and Japanese Strategy, 6 GAIKO FORUM 53, 53 (2006);
19. see also Shuji Yanase, Bilateral Investment Treaties of Japan and Resolution of Disputes With Respect to Foreign Direct Investment, in INTERNATIONAL COMMERCIAL ARBITRATION 426 (A. J. van den Berg ed., 2003).
20. North American Free Trade Agreement U.S.-Can.-Mex., Dec. 17, 1992, 107 Stat. 2057, 32 I.L.M. 289 (1993) [hereinafter NAFTA].
21. See generally NAFTA AND INVESTMENT (Seymour J. Rubin & Dean C. Alexander eds., 1995);
22. NAFTA INVESTMENT LAW AND ARBITRATION: PAST ISSUES, CURRENT PRACTICE, FUTURE PROSPECTS (Todd Weiler ed., 2004);
23. Daniel M. Price, An Overview of the NAFTA Investment Chapter: Substantive Rules and Investor-State Dispute Settlement, 27 INT'L LAW. 727 (1993).
24. European Energy Charter Conference, Dec. 17,1994, 34 I.L.M. 360;
25. see also THE ENERGY CHARTER TREATY-GATEWAY TOWARDS EAST/WEST INVESTMENT AND TRADE (Thomas W. Wälde ed., 1996); Energy Charter Secretariat, http://www.enchaner.org/, (last visited Mar. 9, 2010).
26. See Unified Agreement for the Investment of Arab Capital in the Arab States, Nov. 26,1980, www.unctad.org/sections/dite/iia/docs/Compendium//en/ 36%20volume%202.pdf (last accessed Feb. 9, 2009). For another example of a multilateral regional investment treaty
27. see Walid Ben Hamida, The First Arab Investment Court Decision, 7 J. WORLD INV. & TRADE 699 (2006).
28. See also Protocol of Colonia for the Promotion and Reciprocal Protection of Investments in MERCOSUR, Jan. 17, 1994, MERCOSUR/ CMC/DEC No. 11/93, available at http://www.cvm.gov.br/ingl/Inter/mercosul/coloni-e.asp;
29. ASEAN Agreement for the Promotion and Protection of Investments, Dec. 15, 1987, 27 I.L.M. 612 (1988). For an analysis of the MERCOSUR as a legal framework for development
30. see Jorge M. Guira, MERCOSUR as an Instrument for Development, 3 L. & Bus. REV. AM. 53 (1997).
31. The word "treatification," while not recognized by a standard English dictionary, has been used on rare occasions.
32. See, e.g., JING-DONG YUAN, FOREIGN AFFAIRS AND INTERNATIONAL TRADE CANADA, THE MTCR AND MISSILE PROLIFERATION: MOVING TOWARD THE NEXT PHASE, at v, 29 (2000), available at http://vATO.international.gc.ca/arnM-armes/isrop-prisi/ research-recherche/missiles/yuan2000/index.asplang=eng. The origin of this derivation of the word "treatify" may perhaps be found in the 1908 Nobel lecture of the Peace Prize Laureate Frederik Bajer, who urged that a treaty be established to govern the canals between the North and Baltic Seas, stating "there is a need to 'treatify,' if I may coin this expression, the waterways-the French call them 'canaux interocéaniques'-which connect the two seas." Fredrik Bajer, The Organization of the Peace Movement, Nobel Lecture, Nobelprize.org, http://nobel- prize.org/peace/laureates/1908/bajer- lecture.html;
33. see also Jeswald W. Salacuse, The Treatification of International Investment Law, 13 L. & Bus. REV. AM. 155 (2007).
34. Salacuse, supra note 8 at 157;
35. see, e.g., Patrick Juillard, L'évolution des sources du droit des investissements, 250 RECUEH. DES COURS DE L'ACADEMIE DE DROIT INTERNATIONAL 9, 208-09 (1994) (stating that in the evolution of the sources of law that govern foreign investments, there have been two "losers" (vic- times), internal law and customary international law, and two "winners " (vainqueurs), BITS and general principles of international law.).
36. Mondev Int'l. Ltd. v. United States, ICSID Case No. ARB(AF)/99/2 (Oct. 11, 2002), reprinted in 42 I.L.M. 85, I 125 (2003).
37. M. SORNARAJAH, THE INTERNATIONAL LAW ON FOREIGN INVESTMENT 267 (2d ed. 2004).
38. See Andreas Lowenfeld, Investment Agreements and International Law, 42 COLUM. J. TRANSNAT'L L. 123 (2003);
39. Stephen M. Schwebel, The Influence of Bilateral Investment Treaties on Customary International haw, 98 AM. SOC'Y INT'L L. PROC. 27 (2004).
40. Mann, supra note 2, at 249.
41. Bernard Kishoiyian, The Utility of Bilateral Investment Treaties in the Formulation of Customary International Law, 14 Nw. J. INT'L L. & Bus. 327, 329 (1994);
42. see also SORNARAJAH, supra note 11, at 267.
43. See, e.g., Patrick Juillard, MAI: A European View, 31 CORNELL INT'L LJ. 477, 481 (1988);
44. Asha Kaushal, Revisiting History: How the Past Matters for the Present Backlash Against the Foreign Investment Regime, 50 HARV. INT'L L.J. 491, 492 (2009);
45. Kenneth J. Vandevelde, A Brief History of International Investment Agreements, 12 U.C. DAVIS J. INT'L L. & POL. 157, 172 (2005).
46. Webster's Third New International Dictionary defines "network" as "an interconnected or interrelated chain, group, or system." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 1520 (3d ed. 1981).
47. It is true that in applying the most-favored-nation clauses in a particular investment treaty, tribunals examine whether investors from other countries are given more favorable treatment under other treaties; however, that act of referring to another treaty does not create a structural or network connection between the two treaties concerned.
48. See, e.g., Maffezini v. Spain, 5 ICSID Case No. ARB/97/7 (Jan. 25, 2000), 387, 409-10 I 61.
49. Webster's Third New International Dictionary defines the word regime as "a method of ruling or management" and "a form of government." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 1911 (3d ed. 1981).
50. Stephen D. Krasner, Structural Causes and Regime Consequences: Regimes as Intervening Variables, in POWER, THB STATE, AND SOVEREIGNTY: ESSAYS ON INTERNATIONAL RELATIONS 113, 113 (Stephen D. Krasner ed., 2009).
51. Donald J. Puchala & Raymond F. Hopkins, International Regimes: Lessons for Inductive Analysis, 36 INT'L ORG. 245, 246 (1982).
52. See, e.g., ROBERT CRAWFORD, REGIME THEORY IN THE POST COLD-WAR WORLD: RETHINKING NEOUBERAL APPROACHES TO INTERNATIONAL RELATIONS (1996);
53. ANDREAS HASENCLEVER ET AL., THEORIES OF INTERNATIONAL REGIMES (1997);
54. INTERNATIONAL REGIMES (Stephen D. Krasner ed., 1983);
55. REGIME THEORY AND INTERNATIONAL RELATIONS (Volker Rittberger ed., 1993) [hereinafter REGIME THEORY].
56. See, e.g., Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.- Arm., Sept. 23, 1992, S. TREATY DOC. NO. 11 (1993), available at http://www.unctad.org/sections/dite/iia/docs/bits/us-armenia.pdf.
57. See, eg., MTD v. Chile, 12 ICSID Case No. ARB/01/7 (May 25, 2004) 3, 22, 110-11.
58. Professor Reuven S. Avi-Yonah has argued that the 2000 or more bilateral tax treaties also constitute an international tax regime because of their common principles, language, and similar policies. However, he does not define in depth the meaning of "regime," nor does he rely on international relations and regime theory in making his analysis.
59. See REUVEN S. AVI-YONAH, INTERNATIONAL TAX AS INTERNATIONAL LAW: AN ANALYSIS OF THE INTERNATIONAL TAX REGIME (2007).
60. See, e.g., ROBERT CRAWFORD, REGIME THEORY IN THE POST-COLD WAR WORLD: RETHINKING NEOLIBERAL APPROACHES TO INTERNATIONAL RELATIONS (1996).
61. ROBERT O. KEOHANE, AFTER HEGEMONY: COOPERATION AND DISCORD IN THE WORLD OF POLITICAL ECONOMY 32-39 (1984).
62. Id. at 34-35
63. (quoting ROBERT O. KEOHANE & JOSEPH S. NYE, POWER AND INTERDEPENDENCE: WORLD POLITICS IN TRANSITION 44 (1977)).
64. See KENNETH J. VANDEVELDE, UNITED STATES INVESTMENT TREATIES: POLICY AND PRACTICE 19 (1992). For a discussion of the history of U.S. bilateral treaties by the U.S. Supreme Court, see Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S. 176, 186-89 (1982).
65. See Todd S. Shenkin, Trade-Related Investment Measures in Bilateral Investment Treaties and the GATT: Moving toward a Multilateral Investment Treaty, 55 U. PITT. L REV. 541, 573 (1994).
66. See also Kathleen Kunzer, Developing a Model Bilateral Investment Treaty, 14 LAW & POL'Y INT'L BUS. 273, 276 (1983).
67. Id.
68. See UNCTAD, BITs in the Mid-1990s, supra note 2, at 8.
69. See Maarten Bos, The Protection of Foreign Investments in Dutch Court and Treaty Practice, 3 INT'L L. NETH. 221 (1980);
70. Patrick Juillard, Les conventions bilattrales tfinvestissement conclues par la France, 106 J. DROIT INT'L 274 (1979);
71. J. Karl, The Promotion and Protection of German Foreign Investment Abroad, 11 ICSID REV.-FLLJ 1 (1996);
72. F.A. Mann, British Treaties for the Promotion and Protection of Investments, 52 BRIT. Y.B. INT'L L. 241 (1981);
73. Willem Van de Voorde, Belgian Bilateral Investment Treaties as a Means for Promoting and Protecting Foreign Investment, 44 STUDIA DIPLOMATICA 87 (1991).
74. VANDEVELDE, supra note 25, at 29-45;
75. Pamela B. Gann, The U.S. Bilateral Investment Treaty Program, 21 STAN. J. INT'L L. 373, 373-76 (1985);
76. K. Scott Gudgeon, United States Bilateral Investment Treaties: Comments on their Origin, Purposes, and General Treatment Standards, 4 INT'L TAX & Bus. L. 105, 107-11 (1986);
77. Jeswald W. Salacuse, BIT by BIT: The Growth of Bilateral Investment Treaties and Their Impact on Investment in Developing Countries, 24 INT'L LAW. 655, 657 (1990).
78. Kong Qingjiang, Bilateral Investment Treaties: The Chinese Approach and Practice, 8 ASIAN Y.B. INT'L L. 105 (1998/1999).
79. UNCTAD, World Investment Report 2008, supra note 2, at 14.
80. Id. at 15.
81. See, e.g., "Capitalism Needs to Go," Says Hugo Chavez, Apr. 3, 2009, http://ourlatinamerica.blogspot.corn/2009/04/capitalism-needs-to-go-says- hugo-chave2.html;
82. Guillermo Parra-Berna, Multilateral Banks Pose Problem for Latin America, Coma Says, BLOOMBERG, Dec. 20, 2006, http://www.bloomberg.com/apps/news?pid= 20601086&sid=aqxeFXqL9vpQ&refer=latin-america.
83. Robert O. Keohane, INTERNATIONAL INSTITUTIONS AND STATE POWER: ESSAYS IN INTERNATIONAL RELATIONS THEORY 132 (1989).
84. Investment treaty preambles, which state the contracting party's goals, often provide that the aim of the treaty is to promote "economic cooperation" between the concerned states. See, for example, the preamble to the bilateral investment treaty between France and Argentina, which begins: "Desiring to develop economic cooperation between the two States and to create favourable conditions for French investments in Argentina and Argentine investments in France.. " Accord entre le Gouvernement de la Republique francaise et le Gouvernement de la Republique Argentine sur 1'encouragement et la protection reciproques des investissements {Agreement between the Argentine Republic and the Republic of France for the Promotion and Reciprocal Protection of Investments], Arg.-Fr., July 3, 1991, 1728 U.N.T.S. 282, translated in 1728 U.N.T.S. 298.
85. Similarly, the preamble of the BIT between Argentina and Spain expresses that the states are "[d]esiring to intensify economic cooperation for the economic benefit of both countries. . ." Acuerdo para la promoci6n y protection recfprocas de inversiones entre el Reino de Espafia y la República Argentina [Agreement on the Promotion and Reciprocal Protection of Investments between the Kingdom of Spain and the Argentine Republic], Arg.-Spain, Oct. 3, 1991, 1699 U.N.T.S. 188, translated in 1699 U.N.T.S. 202.
86. See Andrew T. Guzman, Why LDCs Sign Treaties That Hurt Them: Explaining the Popularity of Bilateral Investment Treaties, 38 VA. J. INT'L L 639 (1998);
87. Salacuse, supra note 8.
88. See Guzman, supra note 40;
89. see also Salacuse, supra note 8, at 158-63.
90. Kenneth J. Vandevelde, A Brief History of International Investment Agreements, in THE EFFECT OF TREATIES ON FOREIGN DIRECT INVESTMENT: BILATERAL INVESTMENT TREATIES, DOUBLB TAXATION TREATIES, AND INVESTMENT FLOWS 3, 13 (Karl P. Sauvant and Lisa E. Sachs eds., 2009).
91. The average number of nationalizations of foreign investor property per year rose steadily from 1960, the year when many former colonies became independent, when such measures averaged slightly more than fifteen, until 1975, when they reached over fifty, resulting in significant losses to foreign investors. 1 U.N. Conference on Trade and Development, International Investment Agreements: Key Issues, at 7, U.N. Doc. UNCTAD/ITE/IIT/2004/10 (2004). It is no coincidence that the movement to negotiate bilateral investment treaties, discussed above, took root during this period as a means to avoid such costs in the future.
92. See generally U.N. Conference on Trade and Development, Investor-State Disputes Arising From Investment Treaties: A Review, UNCTAD/ITE/IIT/2005/4 (Feb. 1, 2005).
93. See, e.g., MTD v. Chile, 12 ICSID Case No. ARB/01/7 (May 25, 2004) 3, 22 I 110-11.
94. See Vandevelde, supra note 42, at 5, 13.
95. Salacuse & Sullivan, supr note 2, at 68.
96. Id.
97. Id. at 68. As recently as 2004, one scholar of international investment law stated that "[t]here are few customs in this sense in the field of foreign investment." SORNARAJAH, supra note 11, at 89.
98. Salacuse & Sullivan, supra note 2 at 68.
99. See, e.g., Salacuse & Sullivan, supra note 2;
100. Surya P. Subedi, The Challenge of Reconciling the Competing Principles Within the Law of Foreign Investment With Special Reference to the Recent Trend in the Interpretation of the Term "Expropriation," 40 INT'L LAW. 121, 123-31 (2006).
101. Salacuse & Sullivan, supra note 2 at 68-69;
102. Subedi, supra note 50.
103. Salacuse & Sullivan, supra note 2 at 69.
104. Id.
105. See SAMY FRIEDMAN, EXPROPRIATION IN INTERNATIONAL Law 17-23 (1953)
106. ("The Decree of October 26 (November 8), 1917, promulgated by the Second All-Russian Congress of Soviets, abolished private property in land without compensation .. [T]he Decree of December 14, 1917, completed by the Decree of January 26, 1918, 'in order to liberate the workers and peasants and the whole population from the exploitation of the capitalist banks [socialized the Russian banks and provided that the assets of the former private banks were to be confiscated. By June 1920, most industry had been socialized in the USSR].");
107. see also S. COMM. ON FOREIGN AFFAIRS, 88TH CONG., REPORT ON EXPROPRIATION OF AMERICAN-OWNED PROPERTY BY FOREIGN GOVERNMENTS IN THE TWENTIETH CENTURY 8-10 (1st Sess. 1963);
108. B.A. WORTLEY, EXPROPRIATION IN PUBUC INTERNATIONAL LAW 61-62 (1959).
109. See generally DONALD R. SHEA, THE CALVO CLAUSE (1955).
110. See, e.g., S. N. Guha Roy, Is the Law of Responsibility of States for Injuries to Aliens a Part of Universal International Law 55 AM. J. INT'L L. 863 (1961).
111. Inspired by the success of the oil-producing countries in raising petroleum prices in 1973-74, developing countries had hoped that by building a numerically strong coalition amongst themselves, they would be able to bring about desired changes in various international fora. As a result of the debt crisis in the early 1980s, the internal economic restructuring demanded by international financial institutions such as the International Monetary Fund ("IMF") and the World Bank, and the abandonment of command economy models by developing countries, the movement for a "New International Economic Order" lost steam and was virtually dead by 1990.
112. Thomas WSlde, Requiem for the "New International Economic Order," in FESTSCHRIFT FUR IGNAZ SEIDL-HOHENVELDERN 771 (G. Hafner et. al. eds., 1998).
113. See generally JEFFREY A. HART, THE NEW INTERNATIONAL ECONOMIC ORDER (1983);
114. THE NEW INTERNATIONAL ECONOMIC ORDER: THE NORTH-SOUTH DEBATE (Jagdish N. Bhagwati ed., 1977).
115. It provided in part that each state had the right:
116. (a) To regulate and exercise authority over foreign investment within its national jurisdiction in accordance with its laws and regulations and in conformity with its national objectives and priorities. No State shall be compelled to grant preferential treatment to foreign investment;
117. (c) To nationalize, expropriate or transfer ownership of foreign property, in which case appropriate compensation should be paid by the State adopting such measures, taking into account its relevant laws and regulations and all circumstances that the State considers pertinent. In any case where the question of compensation gives rise to a controversy, it shall be settled under the domestic law of the nationalizing State and by its tribunals, unless it is freely and mutually agreed by all States concerned that other peaceful means be sought on the basis of the sovereign equality of States and in accordance with the principle of free choice of means.
118. G.A. Res. 3281 (XXIX), U.N. Doc. A/3281 (Dec. 12, 1974).
119. See Vandevelde, supra note 42, at 5-6.
120. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, opened for signature Mar. 18, 1965, 17 U.S.T. 1270, 575 U.N.T.S. 159.
121. See International Centre for Settlement of Investment Disputes, List of Concluded Cases (Mar. 9, 2010), http://icsid.worldbank.org/ICSID/FrontServlet? requestType=GenCaseDtlsRH&actionVal=List Concluded.
122. See generally CUTHBERT JOSEPH, NATIONALITY AND DIPLOMATIC PROTECTION s(1969);
123. RICHARD B. LILUCH, THE HUMAN RIGHTS OF AUENS IN CONTEMPORARY INTERNATIONAL LAW (1984).
124. Robert Keohane, The Analysis of International Regimes, in REGIME THEORY, supra note 21, at 23.
125. For the texts of model BITs used by France, Germany, the United Kingdom, and the United States
126. see RUDOLF DOLZER & CHRISTOPH SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW 360-429 (2008).
127. See also Investment Treaty Arbitration, http://ita.law.uvic.ca/ investmenttreaties.htm (last visited Mar. 10, 2010).
128. For examples of such BIT models, see DOLZER & SCHREUER, supra note 64, at 352-417.
129. JESWALD W. SALACUSE, THE LAW OF INVESTMENT TREATIES 115-17 (2010).
130. On the distribution of treaties among the countries of the world, see generally UNCTAD, World Investment Report 2008, supra note 2, at 14-16.
131. See Guzman, supra note 40.
132. Salacuse & Sullivan, supra note 2 at 77;
133. see also Andrew T. Guzman, Explaining the Popularity of Bilateral Investment Treaties, in THE EFFECT OF TREATIES ON FOREIGN DIRECT INVESTMENT 73, supra note 42, at 85-86.
134. Salacuse Be Sullivan, supra note 2, at 77.
135. Id. at 77. Up to 1981, loans, primarily from foreign commercial banks, were the primary sources of foreign capital inflows to developing countries, accounting for approximately 83% of such flows, while foreign direct investment accounted for only approximately 8%. Immediately after the debt crisis of 1982, when many developing countries became unable to service those loans, total capital flows to developing countries dropped dramatically and loans only accounted for less than 38% of that amount.
136. Barry P. Bosworth et al., Capital Flows to Developing Economies: Implications for Saving and Investment, 1999 BROOKINGS PAPERS ON ECONOMIC ACTIVITY 143, 151 (1999).
137. After developing countries recovered from the debt crisis, direct foreign investment increased steadily both in absolute terms and as a percentage of total capital inflows. Thus in 2009, total direct foreign investment in developing countries exceeded US$400 billion, while other private flows were negacive, and official development assistance was slightly more than US$100 billion. U.N. Conference on Trade and Development, World Investment Report 2009: Transnational Corporations, Agricultural Production, and Development, at 5, U.N. Doc. UNCTAD/ WIR/2009 - E.09.II.D.15 (Sept. 17, 2009).
138. Salacuse & Sullivan, supra note 2, at 77;
139. see U.N. Conference on Trade and Development, supra note 71 at 34. The coincidence of increased foreign investment and increased numbers of BITs during this period does not establish the existence of a causal connection between the two, an issue that has been the subject of significant research and debate.
140. See, e.g., Salacuse & Sullivan, supra note 2, at 95-111.
141. See generally THE EFFECT OF TREATIES ON FOREIGN DIRECT INVESTMENT, supra note 42.
142. Salacuse &. Sullivan, supra note 2, at 77.
143. See, e.g., Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.- Arm., Sept. 23, 1992, S. TREATY DOC. NO. 11 (1993), available at http://www.unctad.org/sections/dite/iia/docs/bits/us-armenia.pdf.
144. Foreign aid to developing countries has been a function of numerous factors, including strategic, commercial, political, and humanitarian considerations. Peter Hjertholm & Howard White, Foreign Aid in Historical Perspective: Background and Trends, in FOREIGN AID AND DEVELOPMENT: LESSONS LEARNT AND DIRECTIONS FOR THE FUTURE 99-100 (Finn Tarp ed., 2000). As a result, it is difficult to know precisely the impact of a donor country's aid policies on its BIT negotiations with a specific aid recipient. From the point of view of a recipient country, one indicator of the quality of aid is the percentage that is "untied," i.e. not required to be spent on goods and services from the donor country. It is interesting to note that those European countries whose aid was the least "tied" were among the countries that had concluded the largest number of BITs in 1981. In that year, when the percentage of untied aid given by the United States, which had yet to launch a program to negotiate BITs, was only 33%, Germany, with untied aid of 74%, had signed 49 BITs; Switzerland (50% untied aid) had signed 33 BITs; the Netherlands (57% untied aid) had signed 16 BITs; and Sweden (84% untied aid) had signed 8 BITs.
145. Id at 96;
146. see also UNCTAD, BITs in the Mid-1990s, supra note 2, at 159-217.
147. See SICE, Trade Policy Developments: U.S.-Uruguay, http://www.sice.oas. org/TPD/URY-USA/URY-USA-e.ASP (last visited Feb. 11, 2010).
148. See Jeswald W. Salacuse, From Developing Countries to Emerging Markets: A Changing Role for Law in the Third World, 33 INT'L LAW. 875 (1999).
149. The Deputy U.S. Trade Representative stated the United States' goals in negotiating BITs as follows: The BIT program's basic aims are to: 1) protect U.S. investment abroad in countries where U.S. investors' rights are not protected through existing agreements; 2) encourage adoption in foreign countries of market-oriented domestic policies that treat private investment fairly; and 3) support the development of international law standards consistent with these objectives.
150. Jeffrey Lang, Keynote Address, 31 CORNELL INT'L L.J. 455, 457 (1998);
151. see also United States Trade Representative, USTR Focus on Investment, http://ustraderep.gov/Trade-Sectors/Investment/Section-Index.html (last visited Mar. 10, 2010).
152. One exception to this is the Agreement Between the Government of the Republic of Korea and the Government of Japan for the Liberalisation, Promotion, and Protection of Investment, S. Korea- Japan, Mar. 22, 2002, 1-4, available at http://www.unctad.org/sections/dite/iia/docs/bits/korea-japan.pdf, which in addition to including the word "liberalisation" in its title also states in its Preamble that the contracting parties recognize ". . . the growing importance of progressive liberalisation of investment for stimulating private initiative and for promoting prosperity in both countries.
153. For example, in the Message from the President of the United States Transmitting the Treaty Between the Government of the United States of America and the Government of the Republic of Albania Concerning the Encouragement and Reciprocal Protection of Investment, with Annex and Protocol, Signed at Washington on January 11, 1995, President Clinton stated that "[t]he bilateral investment Treaty with Albania will protect U.S. investment and assist the Republic of Albania in its efforts to develop its economy by creating conditions more favorable for U.S. private investment and thus strengthen the development of its private sector." TREATY DOC. 104-19, Sept. 6, 1995;
154. see also USTR Focus on Investment, supra note 78.
155. Tom Ginsburg, International Substitutes for Domestic Institutions: Bilateral Investment Treaties and Governance, 25 INT. REV. L. & ECON. 107 (2005);
156. see also Susan D. Franck, Foreign Direct Investment, Investment Treaty Arbitration, and the Rule of Law, 19 PAC. MCGEORGE GLOBAL BUS. & DEV. REV. 337 (2007).
157. Reported confidentially to the author.
158. See, e.g., Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.- Arm., Sept. 23, 1992, S. TREATY DOC. NO. 11 (1993), available at http://www.unctad.org/sections/dite/iia/docs/bits/us-armenia.pdf.
159. WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY (2002).
160. In the ICSID case of Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v. The Argentine Republic, the tribunal defined 'treatment' as follows: "The word 'treatment' is not defined in the treaty text. However, the ordinary meaning of that term within the context of investment includes the rights and privileges granted and the obligations and burdens imposed by a Contracting State on investments made by investors covered by the treaty." Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v. Argentine Republic, Decision on Jurisdiction, ICSID Case No. ARB/ 03/19, I 55 (2006).
161. U.N. CONFERENCE ON TRADE AND DEVELOPMENT, BILATERAL INVESTMENT TREATIES 1995-2006: TRENDS IN INVESTMENT RULEMAKING at 28, U.N. Sales No. E.06.II.D.16 (2007).
162. Matthew Weiniger, The Standard of Compensation for Violation of the Fair and Equitable Standard, in 2 INVESTMENT TREATY LAW: CURRENT ISSUES 197 (Federico Ortino et al. eds., 2007).
163. Factory at Chorzów, Merits, 1928 P.C.I.J. (ser. A) No. 17, at 27-28 (Sept. 13).
164. MTD Equity Sdn. Bhd. & MTD Chile S.A. v. Chile, Award, ICSID Case No. ARB/01/7, 12 ICSID 3, \ 238 (2004).
165. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, opened for signature Mar. 18, 1965, 17 U.S.T. 1270, 575 U.N.T.S. 159.
166. List of Concluded Cases, International Centre for Settlement of Investment Disputes, http://icsid.worldbank.org/ICSID/FrontServlet?requestType= GenCaseDtlsRH&actionVal=ListConcluded (last visited Feb. 5, 2009) (listing concluded cases in chronological order). Depending on the treaty in question and the nature of the agreement between the parties, other arbitral mechanisms that apply treaty provisions to resolve disputes between host states and foreign investors include the Stockholm Chamber of Commerce, the London Court of Arbitration, the International Chamber of Commerce, and ad hoc arbitration under the arbitration rules of the U.N. Commission on International Trade Law ("UNCITRAL").
167. UNCTAD, World Investment Report 2008, supra note 2, at 16.
168. One notable example is the case of CME Czech Republic B.V. v. Czech Republic, an UNCITRAL arbitration under the Netherlands-Czech Republic BIT, which resulted in an award and payment of U.S. $355 million to an injured investor in 2003, one of the largest awards ever made in an arbitration proceeding up to that time. CME Czech Republic B.V. v. Czech Republic, Final Award, UNCITRAL Arbitration (March 14, 2003);
169. Peter S. Green, Czech Republic Pays $ 355 Million to Media Concern, N.Y. TIMES, May 16, 2003, at Wl;
170. see also ADC Affiliated Limited and ADC & ADMC Management Ltd v. Republic of Hungary, Award of October 2, 2006, ICSID Case No. ARB/03/16 (2006) (awarding ADC Affiliated U.S. $55,426,973 and ADC & ADMC $20,773,027);
171. CMS Gas Transmission Company v. Republic of Argentina, Award of May 12, 2005, ICSID Case No. ARB/01/8, 14 ICSID 158, 237 (2005) (awarding CMS U.S. $133.2 million, upheld by ICSID Annulment Committee Decision of Sept. 25, 2007).
172. Note, for example, that even ICSID, an international organization, is bound by its governing Convention and Rules, to hold certain aspects of the arbitral process confidential. Under Rule 32 of the ICSID Arbitration Rules, the proceedings of the arbitration are closed to the public, and under Article 48 of the Convention, ICSID may not publish an award rendered by a tribunal in a case without the consent of the parties.
173. See CHRISTOPHE SCHREUER, THE ICSID CONVENTION: A COMMENTARY 823-28 (2001). With regard to the problem of determining with precision the exact number and nature of investor-state claims.
174. see generally Susan D. Franck, Empirically Evaluating Claims About Investment Treaty Arbitration, 86 N.C. L. REV. 1 (2007).
175. For an excellent unofficial compendium of decisions by arbitral tribunals in investor-state cases, see http://ita.law.uvic.ca/.
176. HASENCLEVER ET AL., supra note 21, 9-10.
177. Krasner, supra note 19, at 113.
178. Harald Mülller, The Internationalization of Principles, Norms, and Rules by Governments: The Case of Security Regimes, in REGIME THEORY, supra note 21, at 361-68;
179. see also HASENCLEVER ET AL., supra note 21, at 9.
180. See, e.g. Preamble to the Agreement Between the Government of Mongolia and the Government of the Republic of Singapore on the Promotion and Protection of Investments, Mong.-Sing., July 24, 1995, reprinted in ICSID, INVESTMENT PROMOTION AND PROTECTION TREATIES (1996), available at http://www.unctad.org/ sections/dite/iia/docs/bits/mongolia-singapore.pdf ("RECOGNISING that the encouragement and reciprocal protection of such investments will be conducive to stimulating business initiative and increasing prosperity in both States.").
181. Richard Swedberg, Max Weber's Contribution to the Economic Sociology of Law, 2 ANN. REV. LAW SOC. Sci. 61, 69 (2006);
182. see also David M. Trubek, Max Weber and the Rise of Capitalism, 1972 Wis. L. REV. 720, 740 (1972).
183. Swedberg, supra note 99, at 69.
184. See, e.g. Agreement for the Promotion and Protection of Investments, Indon.-U.K., Apr. 27, 1976, U.K. Treaty Series #62, available at http://www.unctad.org/sections/dite/iia/docs/bits/uk-indonesia.pdf;
185. Treaty for the Promotion and Protection of Investments, F.R.G.-Pak., Nov. 25 1959, 1963 U.N.T.S. 6575, available at http://www.unctad.org/sections/dite/ iia/docs/bits/germany-pakistan.pdf.
186. UNCTAD, BITs in the Mid1990s, supra note 2.
187. But see Article 2(3) of the Convention between the Belgo-Luxembourg Economic Union and the United Republic of Cameroon Concerning the Reciprocal Promotion and Protection of Investments, March 27, 1980, 1284 U.N.T.S. 21115. This article states: "Aware of the importance of investments for the promotion of its development and cooperation, the Belgo-Luxembourg Economic Union shall adopt measures to encourage its economic agents to participate in the development of the United Republic of Cameroon, in accordance with its priority objectives." While one interpretation of this provision might lead to the conclusion that the Belgo-Luxembourg Economic Union is encouraging its own companies and nationals to invest in Cameroon, an equally plausible interpretation is that the Union is only obligated to encourage governmental agencies to participate in Cameroon development.
188. See generally ICSID, INVESTMENT LAWS OF THE WORLD (1972-2009);
189. Jeswald W. Salacuse, Host Country Regulation and Promotion of Joint Ventures and Foreign Investment, in INTERNATIONAL JOINT VENTURES: A PRACTICAL APPROACH TO WORKING WITH FOREIGN INVESTORS IN THE U.S. AND ABROAD 107-36 (D.N. Goldsweig & R.H. Cummings eds., 1990).
190. See, e.g., U.N. Conference on Trade and Development, Investment Promotion Provisions in International Investment Agreements, U.N. Doc. UNCTAD/ITE/HT/2007/7 (June 2008).
191. Id.
192. See generally CAN PRIVATIZATION DELIVER? INFRASTRUCTURE FOR LATIN AMERICA (Frederico Bansanes et al. eds., 1999);
193. Louis T. WELLS, THB EVOLUTION OF CONCESSION AGREEMENTS (1968).
194. Aguaytia Energy, LLC v. Republic of Peru, ICSID Case No. ARB/06/13(2008);
195. see also White & Case, Stability Guarantees in Aguaytia, LLC v. Republic of Peru, INT'L DISPUTE Q. (Summer 2009), available at http://www.whitecase.com/idq/summer-2009-5/.
196. For example, in the case of Dabhol Power Project, the largest foreign investment in India as of 1995, a government newly elected in the Indian state of Maharashtra cancelled a power purchase agree- ment on which the viability of the Project depended.
197. JESWALD W. SALACUSE, THE GLOBAL NEGOTIATOR: MAKING, MANAGING, AND MENDING DEALS AROUND THE WORLD IN THE TWENTY-FIRST CENTURY 236-55 (2003).
198. RAYMOND VERNON, SOVEREIGNTY AT BAY: THE MULTINATIONAL SPREAD OF U.S. ENTERPRISES 46 (1971).
199. Id.
200. See AVNISH DIXIT & BARRY J. NALEBUFF, THINKING STRATEGICALLY 21 (1991) ("Once you make a commitment your bargaining power is weakened.").
201. Krasner, supra note 19.
202. Todd J. Grierson-Weiler & Ian A. Laird, Standards of Treatment, in THE OXFORD HANDBOOK OF INTERNATIONAL INVESTMENT LAW 259-304 (Peter Muchlinslki et al. eds., 2008).
203. Id.
204. E.g., Agreement Between the Swiss Confederation and the Kingdom of Thailand on the Promotion and Reciprocal Protection of Investments, Switz.-Thail., art. 4(1), Nov. 11, 1997, Ministry of Foreign Affairs of the Kingdom of Thailand, http://www.unctad.org/sections/dite/iia/docs/bits/thailand- switzerland.pdf: "Investments and Returns of investors of each Contracting Party shall at all times be accorded fair and equitable treatment . . . .
205. E.g., ASEAN Agreement for the Promotion and Protection of Investments of 1987 art. 4(1), Dec. 15, 1987, 27 I.L.M. 612 (1988): "Each Contracting Party shall, within its territory, ensure full protection and security of the investments made in accordance with its legislation by investors of the other Contracting Parties . . . .
206. E., North American Free Trade Agreement art.l 103, U.S.-Can.-Mex., Dec. 17, 1992, 107 Stat. 2057 (1993):
207. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to investors of any other Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
208. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of investors of any other Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
209. European Energy Charter Conference art. 10(7), Dec. 17, 1994, 34 I.L.M. 360 ("Each Contracting Party shall accord to Investments in its Area of Investors of other Contracting Parties, and their related activities including management, maintenance, use, enjoyment or disposal, treatment no less favourable than that which it accords to Investments of its own Investors ..").
210. For example, in the case under the Spain-Mexico BIT, Tecnicas Medioambientales Teemed, S.A. v. United Mexican States, ICSID Case No. ARB
211. See Saluka Investment BV (Netherlands) v. Czech Republic, Partial Award, Mar. 17, 2006, http://ita.law.uvic.ca/documents/Saluka-PartialawardFinal.pdf. This case illustrates the struggles of tribunals in interpreting vague treaty standards.
212. For example, it stated at I 297: The "ordinary meaning" of the "fair and equitable treatment" standard can only be defined by terms of almost equal vagueness. In MTD, the tribunal stated that: "In their ordinary meaning, the terms 'fair' and 'equitable' [. . .] mean 'just,' 'even handed,' 'unbiased,' 'legitimate.'" On the basis of such and similar definitions, one cannot say more than the tribunal did in S.D. Meyers by stating that an infringement of the standard requires "treatment in such an unjust or arbitrary manner that the treatment rises to a level that is unacceptable from an international perspective.
213. Rudolph Dolzer, Fair and Equitable Treatment: A Key Standard in Investment Treaties, 39 INT'L LAW. 87, 87 (2005).
214. HANS KELSEN, PURE THEORY OF LAW 8 (1978).
215. Krasner, supra note 19.
216. See, e.g., European Energy Charter Treaty art. 10(7), Dec. 17, 1994, 34 I.L.M. 360 (1995);
217. North American Free Trade Agreement art. 1110, U.S.-Can.-Mex., Dec. 17, 1992, 107 Stat. 2057(1993).
218. See, e.g., Agreement Between the Government of Republic of Korea and the Government of Japan for the Liberalization, Promotion, and Protection of Investment, Korea-Japan, an. 12, March 22, 2002, http://www.unctad.org/sections/ dite/iia/docs/bits/korea-japan.pdf.;
219. Agreement Between the Government of the Kingdom of Saudi Arabia and the Government of Malaysia Concerning the Promotion and Reciprocal Protection of Investments, Saudi Arabia-Malay., arts. 6-7, Oct. 25, 2000, http://www.unctad. org/sections/dite/iia/docs/bits/saudi-malaysia.pdf.
220. See, e.g., North American Free Trade Agreement arts. 1115-39, U.S.-Can.-Mex., Dec. 17, 1992, 107 Stat. 2057 (1993).
221. See RUDOLF DOLZER & CHRISTOPH H. SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW 119-49 (2008).
222. Krasner, supra note 19.
223. UNCTAD, BITs in the Mid-1990s, supra note 2, at 99.
224. See, e.g., Article 10(1), Les Différends entre Parties Contractantes [Disputes Between the Contracting Parties] of the 1987 Switzerland-Bolivia BIT, Accord Entre la Conféderation Suisse et la Répub-lique de Bolivie Concernant la Promotion et la Protection Réciproques des Investissements [Agreement Between the Swiss Confederation and the Republic of Bolivia Concerning the Promotion and Protection of Reciprocal Investments], Switz.-Bol., Nov. 6, 1987, http://unctad.org/sections/dite/iia/docs/bits/suisse -bolivie.pdf ("Les différends entre Parties Contractantes au sujet de l'interpré tation ou de l'application des dispositions du présent Accord seront régiés par la voie diplomatique." [The disputes between contracting parties regarding the interpretation or the application of the provisions of the present Agreement will be resolved by diplomatic means.]).
225. Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ghana for the Promotion and Protection of Investment, U.K.-Ghana, art. 11, March 22, 1989, http://untreaty.un.Org/unts/120001-144071/2/3/0000104l.pdf.
226. U.N. Charter art. 33, para. 1 ("The parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.").
227. Id at II 87-89.
228. UNCTAD, BITs in the Mid-1990s, supra note 2, at 98.
229. See, e.g., The Treaty of Friendship, Commerce and Navigation Between the United States of America and the Italian Republic, U.S.-Italy, art. 26, Feb. 2, 1948, 63 Stat. 2255 (effective July 26, 1949) ("Any dispute between the High Contracting Parties as to the interpretation or the application of this Treaty, which the High Contracting Parties shall not satisfactorily adjust by diplomacy, shall be submitted to the International Court of Justice, unless the High Contracting Parties shall agree to settlement by some other pacific means.").
230. Under this treaty, a dispute between the United States and Italy concerning an alleged expropriation gave rise to Elettronica Sicula S.p.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. 3 (July 20).
231. Id.
232. Id at 100.
233. Id at 100-101.
234. Id. at 100.
235. Id at 101-102.
236. Id. at 102.
237. Empresas Lucchetti, S.A. & Lucchetti Peru, S.A. v. Republic of Peru, Award, 1CSID Case No. ARB/03/4, I 7, reprinted in 19 FOREIGN INV. LJ. 357 (2004). The case is also known as Industria National de Alimentos, SA and Indalsa Pent, SA v. Peru.
238. Id., Empresas Lucchetti, S.A. & Lucchetti Peru, S.A. v. Republic of Peru, Award, 1CSID Case No. ARB/03/4, I 7, reprinted in 19 FOREIGN INV. LJ. 357 (2004).
239. Jeswald W. Salacuse, Is There a Better Way? Alternative Methods of Treaty-Based, Investor-State Dispute Resolution, 31 FORDHAM INT'L. LJ. 138, 165-66 (2007). For example, the Agreement Between the Government of the Republic of Chile and the Government of the Republic of Finland on the Promotion and Reciprocal Protection of Investments, Chile-Fin., art. 8, May 27, 1993, http://untreaty.un.org/unts/120001-144071/25/8/00021045.pdf, provides:
240. With a view to an amicable solution of disputes between a Contracting Party and an investor of the other Contracting Party consultations will take place between the parties concerned.
241. If these consultations do not result in a solution within six months from the date of request for settlement, the investor may submit the disputes: either to the competent tribunal of the Contracting Party in whose territory the investment was made; or to international arbitration of the International Centre for the Settlement of Investment Disputes (ICSID).
242. Id. at 166.
243. Western NIS Enterprise Fund v. Ukraine, ICSID Case No. ARB/04/2 (Mar. 16, 2006).
244. Salacuse, supra note 153, at 166; Luke Eric Peterson, Ukraine Reaches Settlement in BIT Claim by US-Govt Venture Capital Fund, INVESTMENT TREATY NEWS, July 4, 2006, http://www.iisd.org/pdf/2006/itn-july4-2006.pdf.
245. Jack J. Coe, Jr., Toward a Complementary Use of Conciliation in Investor-State Disputes-A Preliminary Sketch, 12 U.C. DAVIS J. INT'L. L. & POLV. 7, 35 (2005).
246. Salacuse, supra note 153, at 166; Eric A. Schwartz, International Conciliation and the ICC, 10 I.C.S.I.D. REV. FOREIGN INV. L.J. 98, 99 (1995).
247. RUDOLPH DOLZER & CHRISTOPH SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW 242 (2008).
248. The first BIT to take this approach was the 1968 Agreement between the Government of the Kingdom of the Netherlands and the Government of the Republic of Indonesia on Promotion and Protection of Investment, which provided: Each Contracting Party hereby consents to submit any legal dispute arising between that Contracting Party and a national of the other Contracting Party concerning an investment of that national in the territory of the former Contracting Party to the International Centre for the Settlement of Investment Disputes for settlement by conciliation or arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of other States opened for signature at Washington on 18 March 1965.
249. Agreement between the Government of the Kingdom of the Netherlands and the Government of the Republic of Indonesia on Promotion and Protection of Investment, Neth-Indon., art. 9(4), April 6, 1994, http://www.unctad.org/ sections/dite/iia/docs/bits/netherlands-indonesia.pdf
250. Set Joel P. Trachtman & Philip M. Moremen, Costs and Benefits of Private Participation in WTO Dispute Settlement: Whose Right Is It Anyway?, 44 HARV. INT. LJ. 221 (2003).
251. Jeswald W. Salacuse, Explanations for the Increased Recourse to Treaty-Based Investment Dispute Resolution: Resolving the Struggle of Lift Against Form, in APPEALS MECHANISMS IN INTERNATIONAL INVESTMENT DISPUTES 105, 125 (Karl P. Sauvant ed., 2008).
252. Gabrielle Kaufmann-Kohler, Arbitral Precedent: Dream, Necessity or Excuse? 23 ARB. INT'L. 357, 362-65 (2007).
253. Statute of the International Court of Justice art. 59, June 26, 1945, 59 Stat. 1055, T.S. 993, 3 Bevans 1179.
254. Set North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992, 107 Stat. 2057 (1993).
255. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States art. 53(1), opened for signature Mar. 18, 1965, 17 U.S.T. 1270
256. - 575 U.N.T.S. 159 (stating that an "award shall be binding on the parties."). Schreuer and Weiniger suggest that this provision may be interpreted as "excluding the applicability of the principle of binding precedent to successive ICSID cases." They also note that there is nothing in the preparatory work of the Convention suggesting that the doctrine of precedent should be applied to ICSID arbitration.
257. Christophe Schreuer & Matthew Weiniger, A Doctrine of Precedent?, in THE OXFORD HANDBOOK OF INTERNATIONAL INVESTMENT LAW 1188, 1190 (Peter Muchlinksi et al. eds., 2008).
258. Statute of the International Court of Justice art. 38(lXd), June 26, 1945, 59 Stat. 1055, T.S. 993, 3 Bevans 1179.
259. See, e.g., Saluka Investment B.V. (Netherlands) v. Czech Republic, Partial Award, n.20 (Perm. Ct. Arb. Mar. 17, 2006) (acknowledging cases cited by the Claimant in support of its case).
260. Schreuer & Weiniger, supra note 166, at 1191-95. For example, in Saluka Investment, supra, the tribunal considered arbitral decisions from seventeen other investor-state arbitrations in arriving at its Partial Award; in the NAFTA case of Int'l Tbunderbird Gaming Corp. v. United Mexican States, Award (Arb. Trib. Jan. 26, 2006), the tribunal considered fourteen previous arbitral decisions; and in the Energy Charter Treaty case of Petrobart Ltd v. Kyrgyz Republic, Arbitral Award, Arb. No. 126/2003 (Arb. Inst, of the Stockholm Chamber of Commerce), the tribunal relied on three previous arbitral awards, none of which involved the Energy Charter.
261. See, e.g., Saipem v. Bangladesh, Decision on Jurisdiction and Recommendation on Provisional Measures, ICSID Case No. ARB/05/07, I 67 (Mar. 21, 2007). It provided in part that: tThe Tribunal} also believes that, subject to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to the harmonious development of investment law and thereby to meet the legitimate expectations of the community of States and investors towards certainty of the rule of law.
262. Set also RUDOLPH DOLZER & CHRISTOPH SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW 35-38 (2008).
263. Peter M. Haas, Epistemic Communities and the Dynamics of International Environmental Cooperation, in REGIME THEORY, supra note 21, 168, 169.
264. World Trade Organization Dispute Settlement, http://www.wto.org/english/ tratop-E/dispu-e/dispu-e.htm (last visited March 27, 2009).
265. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States art. 48(5), opened for signature Mar. 18, 1965, 17 U.S.T. 1270
266. - 575 U.N.T.S. 159 ("The Centre shall not publish the award without the consent of the parties.").
267. JOSEPH CUTHBERT, NATIONALITY AND DIPLOMATIC PROTECTION 1 (1969).
268. It provided in part that: In precise language, diplomatic protection can be defined as a procedure for giving effect to State responsibility involving breaches of international law arising out of legal injuries to the person or property of the citizen of a State. With the expansion of economic and commercial intercourse between nations, diplomatic protection evolved into a rule of customary international law.
269. Elettronica Simla S.P.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. 3 (July 20).
270. General Agreement on Tariffs and Trade, opened for signature Oct. 30, 1947, 61 Stat. All
271. - 55 U.N.T.S. 194 thereinafter GATT.
272. Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154;
273. see also World Trade Organization, http://www.wto.org
274. Multilateral Agreement on Investment, http://wwwoecd.org/document/22/0, 3343,en-2649-33783766-1894819-l-l-l-l,00.html
275. see also Glen Kelley, Multilateral Investment Treaties: A Balanced Approach to Multinational Corporations, 39 COLUM. J. TRANSNAT'L L. 483 (2001).
276. Havana Charter for an International Trade Organization, Mar. 24, 1948, 62 U.N.T.S. 26.
277. For a discussion of the differences between bilateral and multilateral negotiations, see FEN O. HAMPSON, MULTILATERAL NEGOTIATIONS: LESSONS FROM ARMS CONTROL, TRADE, AND THE ENVIRONMENT 1-51, 345-60 (1995).
278. See also I. William Zartman, Introduction: Two's Company and More's a Crowd: The Complexities of Multilateral Negotiation, in INTERNATIONAL MULTILATERAL NEGOTIATION: APPROACHES TO THE MANAGEMENT OF COMPLEXITY, 1-10 (I. William Zartman ed., 1995)
279. I. William Zartman, The Elephant and the Holograph: Toward a Theoretical Synthesis and a Paradigm, in INTERNATIONAL MULTILATERAL NEGOTIATION: APPROACHES TO THE MANAGEMENT OF COMPLEXITY, 213-22 (I. William Zartman ed., 1995).
280. Such a problem arose during the negotiation of the failed OECD Multilateral Agreement on Investment, conducted between 1995 and 1998. See Kelley, supra note 178, at 494-98.
281. Peter Haas, Introduction: Epistemic Communities and International Policy, in INTERNATIONAL ORGANIZATION 3 (Peter Haas ed., 1992).
282. Id. at 27.
283. The Draft was prepared under the leadership of Herman Abs (Director-General of the Deutsche Bank) and Lord Shawcross (the U.K. Attorney General). Herman Abs & Lord Shawcross, The Proposed Convention to Protect Foreign Investment: A Round Table Comment on the Draft Convention by its Authors, 9 J-PUB. L. 119 (1960).
284. Jason Webb Yackee, Conceptual Difficulties in the Study of Bilateral Investment Treaties 33 BROOK- LYN J. INT'L L. 405, 415-16 (2008)
285. Rudolf Adlung & Martin Molinuevo, Bilateralism in Services: Is There Fire Behind the (BIT-)Smoke? 11 J. INT'L ECON. L. 365, 371 (2008)
286. Stephan W. Schill, Enabling Private Ordering: Function, Scope and Effect of Umbrella Clauses in International Investment Treaties, 18 MINN. J. INT'L L. 1, 56-57 (2009).
287. Anthony C. Sinclair, The Origins of the Umbrella Clause in the International Law of Investment Protection, 20 ARB. INT'L 411 (2004).
288. See generally MARY FOOTER, AN INSTITUTIONAL AND NORMATIVE ANALYSIS OP THE WORLD TRADE ORGANIZATION (2006).
289. The ICSID Convention states the qualities that ICSID arbitrators must possess as follows: "Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment.'' Convention on the Settlement of Investment Disputes Between States and Nationals of Other States art. 14(1), opened for signature Mar. 18
290. - 1965, 17 U.S.T. 1270
291. - 575 U.N.T.S. 159 (emphasis added). The Convention further provides that a person may be disqualified as an arbitrator "on account of any tact indicating a manifest lack of the qualities required in paragraph (1) of Article 14.
292. Id. art. 57. Similarly, the UNCITRAL Arbitration Rules state: "1. Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence." UNCITRAL Arbitration Rules, G.A. Res. 31/98, art. 12(1), U.N. Doc. A/RES/31/98, art. 10 (Dec. 15, 1976).
293. Schreuer & Weiniger, supra note 166, at 1189.
294. Id.
295. http://icsid.worldbank.org/ICSID/FrontServlet?requestType= ICSIDDocRH&actionVal=ShowDocument&CaseLoadStatistics=true&lan-guage= english.
296. As of December 31, 2009, a total of 1004 appointments of arbitrators and conciliators had been made in the 305 cases registered with ICS1D since its inception. (It should be noted that several individuals were appointed in more than one ICSID case.) Although they represented 72 different nationalities, 43% (435) of the arbitrators and conciliators were nationals of only five countries: America (120), France (106), Britain (94), Canada (75) and Switzerland (70). Ten nationalities accounted for 607 appointments (60.45% of the total), of which only Mexicans (32 appointments) were from a developing country. ICSID, The ICSID Caseload-Statistics (Issue 2010-11) 7, 8, 17 (2010)
297. Keohane, supra note 63, at 34.
298. About the WTO-a Statement by the Director-General, http://www.wto.org/ english/thewto-e/ whacis-e/wto-dg-stat-e.htm.
299. Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154 (1944).
300. HASENCLEVER ET AL, supra note 21, at 2.
301. Id.
302. Id.
303. See, e.g., Mary Hallward-Driemeier, Do Bilateral Investment Treaties Attract FDl? Only a Bit and Tbey Could Bite (World Bank, Policy Research Working Paper No. 3121, 2003), http://www-wds.worldbank.org/external/defeult/ WDSContentServer/IW3P/IB/2003/09/23/000094946-030911040600 47/Rendered/PDF/ multiOpage.pdf; Salacuse & Sullivan, supra note 2.
304. UNCTAD, Recent Developments in International Investment Agreements (2007-June 2008), 2 IIA MONITOR 6 (2008), http://www.unctad.org/en/docs/ webdiaeia20081-en.pdf.
305. Id., 2 IIA MONITOR 6 (2008)
306. U.S. DEP'T OF STATE, 2009 INVESTMENT CLIMATE STATEMENT-BOLIVIA, www.state.gov/e/eeb/rls/othr/ics/2009/117852.htm.
307. Government of the Russian Federation, Decree No. 1005-r: On Russia's Intention Not to Become a Member of the Energy Charter Treaty (July 30, 2009) (approving a note verbale notifying the Portuguese Republic, the depository of the Energy Charter Treaty, that it does not intend to become a party to the Treaty and that "it did not apply provisionally any provision of the Treaty to the extent that such a provision was inconsistent with the Constitution, laws or regulations of the Russian Federation").
308. The term "Washington Consensus" is said to have been coined by economist John Williamson in 1989. It consisted of ten broad reforms: (1) fiscal discipline; (2) reordering public spending priorities away from politically powerful groups, such as the military, and toward basic services and infrastructure; (3) tax reform; (4) financial liberalization; (5) competitive, stable exchange rates; (6) trade liberalization; (7) reduction in barriers to foreign investment; (8) privatization of state enterprises; (9) deregulation; and (10) property rights reform.
309. See Salacuse, supra note 77; Stephanie Flanders, Recipe for Reform Has Been Refined, FIN. TIMES, Mar. 14, 1997, at 2.
310. See, e.g., Michael Hudson & Jeffry Sommers, The End of the Washington Consensus, COUNTER- PUNCH, Dec. 12-14, 2008, http://www.counterpunch.org/ hudsonl2122008.html
311. For a listing of the ICSID cases against Argentina, see List of ICSID Cases, http://icsid.world bank.org/ICSID/FrontServlet?requestType= CasesRH&actionVal=ListCases.
312. See, e.g., Agreement on Encouragement and Reciprocal Protection of Investments between the State of Eritrea and the Kingdom of the Netherlands, Eri.-Neth., art. 13, April 14, 2004, http://www.unctad.org/sections/dite/iia/ docs/bits/Netherlands-eritrea.pdf (fifteen years)
313. Agreement Between the Government of the Republic of Botswana and the Government of the People's Republic of China on the Promotion and Protection of Investments, Bots.-P.R.C, art. 14, June 12, 2000, http://www.unctad.org/ sections/dite/iia/docs/bits/china-botswana.pdf (ten years).
314. See, e.g., Agreement Between the Government of the Republic of Indonesia and the Government of the People's Democratic Republic of Algeria Concerning the Promotion and Protection of Investments, Indon-Alg., art. 13, March 21, 2000
315. See, e.g., Agreement between the Government of the Hashemite Kingdom of Jordan and the Government of the Republic of Yemen on the Mutual Promotion and Protection of Investments, Jordan- Yemen, art. 10, May 8, 1996, http://www.unctad.org/sections/dite/iia/docs/bits/jordan-yemen.pdf
316. See, e.g., Agreement between Japan and the People's Republic of Bangladesh Concerning the Promotion and Protection of Investment, Japan-Bangl., art. 14, Nov. 10, 1998, http://www.unctad.org/ sections/dite/iia/docs/bits/ bangladesh-japan.pdf
317. Lovells, Tribunal Allows Claims by Yukos Shareholders Against Russia (Feb. 9, 2010), http//elovells.com/ve/ZZ9191307269L9680604.