Resistance and change in the international law on foreign investment / M. Sornarajah, CJ Koh Professor of Law, National University of Singapore.
2015
K3830 .S649 2015 (Map It)
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Details
Author
Title
Resistance and change in the international law on foreign investment / M. Sornarajah, CJ Koh Professor of Law, National University of Singapore.
Published
United Kingdom : Cambridge University Press, 2015.
Call Number
K3830 .S649 2015
ISBN
9781107096622 (hardback)
1107096626 (hardback)
1107096626 (hardback)
Description
xx, 452 pages ; 24 cm
System Control No.
(OCoLC)898273668
Summary
"Since the 1990s, conflicts within international law on foreign investment have arisen as a result of several competing interests. The neoliberal philosophy ensured inflexible investment protection given by a network of investment treaties interpreted in an expansive manner, which led to states creating regulatory space over foreign investment. However, NGOs committed to single causes such as human rights and the environment protested against inflexible investment protection. The rise to prominence of arguments against the fragmentation of international law also affected the development of investment law as an autonomous regime. These factors have resulted in some states renouncing the system of arbitration and other states creating new treaties which undermine inflexible investment protection. The treaty-based system of investment protection has therefore become tenuous, and change has become inevitable. Emphasising the changes resulting from resistance to a system based on neoliberal foundations, this study looks at recent developments in the area"-- Provided by publisher.
"This book brings together some of the views that I have stated over the years in different papers published in journals. An alternative interpretation of international investment law developed in those papers finds a more complete statement in this book"-- Provided by publisher.
"This book brings together some of the views that I have stated over the years in different papers published in journals. An alternative interpretation of international investment law developed in those papers finds a more complete statement in this book"-- Provided by publisher.
Bibliography, etc. Note
Includes bibliographical references (pages 421-437) and index.
Record Appears in
Table of Contents
Preface
xiii
Table of cases
xiv
1.
Introduction
1
1.1.
Neoliberalism as a driving factor
10
1.2.
Explaining change
16
1.3.
The phases of change
19
1.4.
Earlier phases of the international law on foreign investment
31
1.4.1.
The first and formative phase
32
1.4.2.
The second phase of universalization of the conflicts
35
1.4.3.
The third phase of neoliberal change
43
1.4.3.1.
Regime formation and dissolution
44
1.4.3.2.
Expansionist norms
45
1.4.4.
The fourth and current phase
45
1.4.5.
The competing forces in the fourth phase
47
1.4.6.
Conserving the neoliberal regime
48
1.4.6.1.
New theoretical rationalizations
49
1.4.6.2.
Constancy in jurisprudence
50
1.4.6.3.
Analogical reasoning
50
1.4.6.4.
Deflecting push-backs by states
52
1.4.6.5.
Arrogation of quasi-legislative powers
53
1.4.7.
Resisting neoliberalism
54
1.4.7.1.
Push-back by states
56
1.4.7.2.
Narrowing jurisdiction
57
1.4.7.3.
Ending fragmentation
58
1.4.7.4.
Expansionism versus strict construction
61
1.4.7.5.
Rise of corporate responsibility
63
1.4.7.6.
Other factors
64
1.4.8.
The retreat of neoliberalism?
66
1.5.
The course of the fourth phase
68
1.6.
The outline of the book
71
1.7.
The arrangement of the book
72
2.
The precursor of neoliberalism: internationalization of foreign investment contracts
78
2.1.
Future relevance
80
2.2.
A brief history
81
2.3.
The relationship with diplomatic protection and state responsibility
86
2.3.1.
Diplomatic protection and state responsibility
89
2.4.
The internationalization theory
94
2.4.1.
The six petroleum arbitrations
102
2.4.2.
The policy arguments for internationalization
107
2.4.3.
The Libyan arbitrations
111
2.4.4.
Aminoil signals change
116
2.5.
Contract disputes and ICSID tribunals
122
2.6.
Survival of internationalization in ICSID cases
128
2.7.
The interaction between contract- and treaty-based arbitration
130
2.7.1.
The umbrella clause
131
2.7.2.
Role of stabilization clauses under investment treaty arbitration
132
2.7.3.
Linking the law on legitimate expectations
133
2.8.
Conclusion
133
3.
Creating jurisdiction beyond consent
136
3.1.
The original sin: `arbitration without privity'
139
3.1.1.
The justification of treaty-based jurisdiction: was it faulty?
144
3.1.2.
Extreme adventurism
146
3.2.
Restricting arbitral adventurism
147
3.2.1.
The definition of investment and the criterion of economic development
151
3.2.2.
The requirement of an investment made in accordance with the law of the host state
164
3.3.
The acme of aberrations: Abaclat and financial instruments
168
3.4.
Corporate nationality as a vehicle for expansion
173
3.4.1.
`Round-tripping' of investments
177
3.4.2.
Migration of companies
179
3.5.
The MFN clause saga
183
3.5.1.
Conclusion on expansive trends
185
3.5.2.
Trends favouring the state
186
3.6.
Conclusion
188
4.
The emasculation of expropriation
191
4.1.
The course of expropriation law
193
4.2.
The basis of expansion of expropriation
207
4.3.
The revival of regulatory expropriation
212
4.4.
Stemming the regulatory takings tide
220
4.5.
The changing concept of property in the international law of expropriation
223
4.6.
Conserving regulatory expropriation and the distinguishing criteria
237
4.7.
The bridge to fair and equitable treatment
242
4.8.
Conclusion
244
5.
Fair and equitable treatment: conserving relevance
246
5.1.
Diversity in the standard
250
5.2.
Giving content to the fair and equitable standard
252
5.3.
The discovery of legitimate expectations
257
5.4.
The turn to administrative law
268
5.5.
The contraction of legitimate expectations
272
5.6.
Restrictions on legitimate expectations
273
5.6.1.
There is a duty on the foreign investor to make due diligence efforts to determine whether his expectations are legitimate, reasonable and well-founded
278
5.6.2.
There is a duty to have regard to the circumstances of the host state
280
5.6.3.
Contractual commitments are not protected
282
5.6.4.
Expectations and the stabilization commitment
284
5.6.5.
Balancing of the regulatory power of the state with the legitimate expectations of the foreign investor
288
5.7.
Legitimate expectations and the legitimacy crisis
291
5.7.1.
Theoretical justifications for recognizing legitimate expectations
293
5.7.2.
The rule of law argument
295
5.7.3.
The global administrative law argument
298
5.8.
Conclusion
298
6.
Backlash through defences
300
6.1.
The defences in the treaties and customary law
307
6.1.1.
National security
308
6.1.2.
Necessity
308
6.2.
The expansion of defences
314
6.2.1.
Human rights obligations and investor rights
318
6.2.1.1.
The doctrine of permanent sovereignty over natural resources
324
6.2.2.
The right to development
327
6.3.
International environmental law considerations
331
6.4.
Other obligations in conflict with investment protection
339
6.4.1.
Cultural rights
340
6.4.2.
Indigenous rights
341
6.5.
Defences: evolution or erosion of investment protection?
342
6.6.
Conclusion
343
7.
The search for balance
347
7.1.
Intermediate solutions
347
7.2.
Balanced treaties as the solution
348
7.2.1.
The ASEAN Investment Agreement
352
7.2.2.
The SADC Model Investment Treaty
356
7.2.3.
The Commonwealth Report and Model Treaty
362
7.2.3.1.
Change and balanced treaties
363
7.3.
The proportionality rule in investment arbitration
365
7.3.1.
The public law basis of investment arbitration
369
7.3.2.
The proportionality rule
371
7.3.3.
What is the proportionality test?
373
7.3.4.
References to the proportionality test in arbitral awards
376
7.3.5.
The future of proportionality
380
7.4.
Possible changes
382
8.
Resistance and change in international investment law
389
8.1.
Interpreting change
393
8.2.
The three periods of change
394
8.2.1.
The period of explosion
395
8.2.2.
The period of conflict
399
8.2.3.
The period of uncertainties
404
8.3.
The possible reforms
407
8.3.1.
The recognition that the system of investment treaties is a failure so that it should be terminated
407
8.3.2.
Establishing a screening mechanism prior to arbitration
408
8.3.3.
The responsibility of arbitral institutions
408
8.3.4.
A return to contractual methods of protection
409
8.3.5.
Controlling legal representation in investment arbitration
409
8.4.
Theory of resistance and change
410
8.4.1.
There is relative certainty in the law when it is driven by an uncontested hegemonic power on the basis of an unchallenged ideology it seeks to promote
410
8.4.2.
In the economic sphere, private power acts in tandem with public to maintain international norms favourable to it
414
8.4.3.
Resistance to the hegemonic order sets in when its inadequacies and injustices become apparent
415
8.4.4.
The role of justice in resisting power ensures change
417
8.4.5.
When resistance mounts, accommodation will be sought that may or may not ease the pressure for change. But the search for accommodation itself is change
418
8.5.
Does the notion of resistance and change apply to other areas of international law?
420
Bibliography
421
Index
438