What’s Human Rights Got To Do With It?
An Empirical Analysis of Human Rights References
in Investment Arbitration
Silvia Steininger
LLM Thesis in International and European Law: Public International Law
Supervisor: Prof. Dr. Stephan Schill, LLM (NYU) University of Amsterdam, Faculty of Law
Date of Submission: 22.07.2016 Table of Content:
I. INVESTMENT ARBITRATION, HUMAN RIGHTS, AND THE LEGITIMACY
CRISIS 1
II. AN EMPIRICAL ANALYSIS OF HUMAN RIGHTS REFERENCES 4
1. Research Design and Methodological Remarks 4
2. Actors and Their Strategic Use of Human Rights References 6 3. Type and Content of Human Rights References 9 III. THE STRATEGIC FUNCTIONS OF HUMAN RIGHTS REFERENCES IN
INVESTMENT ARBITRATION 12
1. Arbitral Decision Making: Guidance in the Interpretation and Determination 13 2. Argumentative Practice: Shaping, Framing and Reasoning 16
IV. THE QUEST FOR LEGITIMACY: HUMAN RIGHTS REFERENCES FROM
THE PERSPECTIVE OF THE COMPARATIVE APPROACH 19
1. The Comparative Approach to Investment Arbitration 19 2. Human Rights References from a Comparative Perspective: A Critical Evaluation 23 V. INVESTMENT ARBITRATION, HUMAN RIGHTS, AND THE WAY
FORWARD 27
VI. ANNEX 30
1. List of Cases 30
2. Abbreviations 32
I.
Investment Arbitration, Human Rights, and the Legitimacy
Crisis
In the last decade, international investment arbitration underwent a significant development. Once considered to be a rather secluded field of law, the growth in the number of awards coupled with the rise of regional investment treaties attracted practical and scholarly attention.1 The expansion from a handful of investment lawyers and arbitrators to international law scholars, non-governmental organizations, and civil society brought several crucial matters to the fore. Most prominently a mounting appeal for more transparency, participation, and the rule of law emerged,2 which is also termed the ‘legitimacy crisis’ of investment arbitration in recent years.3 Human rights considerations hold a central position in the debate on the future of investment arbitration. While investment lawyers traditionally assume that foreign investment causes sustainable development resulting ultimately in better living circumstances for the people concerned,4 human rights scholars and civil society argue that foreign investors and governments do not prioritize the obligation to respect and protect fundamental human rights, thereby systematically undermining human rights standards.5 The criticism voiced by the human rights community thus heavily contributes to the legitimacy crisis of investment arbitration.6
1 SW Schill, ‘International Investment Law and Comparative Public Law – An Introduction’
in SW Schill (ed), International Investment Law and Comparative Public Law (OUP 2010) 3.
2 A Kulick, ‘Investment Arbitration, Investment Treaty Interpretation, and Democracy’
(2015) 4 Cambridge Journal of International and Comparative Law; M Waibel, A Kaushal, KL Chung and C Balchin (eds), The Backlash Against Investment Arbitration: Perceptions
and Reality (Kluwer Law 2010).
3 CN Brower and SW Schill, ‘Is Arbitration a Threat or a Boon to the Legitimacy of
International Investment Law?’ (2009) 9 Chicago Journal of International Law 471-498; SD Franck, ‘The Legitimacy Crisis in Investment Treaty Arbitration. Privatizing Public International Law through Inconsistent Decisions (2005) 73 Fordham Law Review 1521-1625.
4 P Muchlinski, ‘Holistic Approaches to Development and International Investment Law: The
Role of International Investment Agreements’ in J Faundez and C Tan (eds.), International
Economic Law, Globalization and Developing Countries (Edward Elgar Publishing 2010);
SW Schill, ‘Investitionsschutzrecht als Entwicklungsvölkerrecht’ (2012) 72 Zeitschrift für
ausländisches öffentliches Recht und Völkerrecht 261-308. This is also a widespread doctrine
in the field of international political economy, see most prominently D Acemoglu and JA Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty (Crown Business 2012).
5 See Statement by Alfred-Maurice de Zayas, Independent Expert on the Promotion of a
Democratic and Equitable International Order at the Human Rights Council, 16 September 2015, < http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=16461& LangID=E> accessed 07 May 2016; see also J Alvarez, ‘Critical Theory and the North American Free Trade Agreement’s Chapter Eleven’ (1997) 28 Inter-American Law Review 303-312.
6 See D Schneidermann, Constitutionalizing Economic Globalization. Investment Rules and
The investment tribunals acknowledge the pressing need to address this criticism. For instance, the Tribunal in Phoenix v. Czech Republic stated prominently: “To take an extreme example, nobody would suggest that ICSID protection should be granted to investments made in violation of the most fundamental rules of protection of human rights, like investments made in pursuance of torture of genocide or in support of slavery or trafficking of human organs.”7 Yet, the definition of fundamental human rights in the Phoenix case encompasses only the most severe violations of jus cogens norms and remains silent about the majority of human rights applicable in international investment law.8
Despite this alleged inherent antagonism, human rights law and investment law also share several important characteristics.9 Their similarity becomes visible in the paramount status of the individual10 and their highly developed dispute settlement bodies.11 Those two elements are crucial for the extraordinary success and prominence of both fields of law in the last two decades. Human rights courts and investment tribunals also face similar challenges, such as an exponentially rising number of cases, growing contestation of member states, and an acute legitimacy crisis.
The most visible interaction between human rights and investment law can be observed in the trend of cross-referencing in investment arbitration.12 While investment tribunals traditionally lack jurisdiction ratione materiae for human rights issues, a rising number of awards features references to human rights treaties and case law. This trend is exacerbated by the development of amicus curiae submissions, Arbitration and the Human Rights Ordeal: The Missing Link’ in W Mattli and T Dietz (eds)
International Arbitration and Global Governance (OUP 2014).
7 Phoenix v. Czech Republic, ¶78.
8 For a general overview, see SL Karamanian, ‘Human Rights Dimensions of Investment
Law’ in E de Wet and J Vidmar (eds) Hierarchy in International Law: The Place of Human
Rights (OUP 2012) 236-271.
9 See E de Brabandere, ‘Human Rights Considerations in International Investment
Arbitration’ in M Fitzmaurice and P Merkouris (eds) The Interpretation and Application of
the European Convention on Human Rights (Martinus Nijhoff 2013) 183-215; C Reiner and
C Schreuer, ‘Human Rights and International Investment Arbitration’ in P-M Dupuy, E-U Petersmann, and F Francesconi, Human Rights in International Investment Law and
Arbitration (OUP 2009) 82-96.
10 See A Peters, Jenseits der Menschenrechte. Die Rechtsstellung des Individuums im
Völkerrecht (Mohr Siebeck 2014).
11 See A von Bogdandy and I Venzke, In Wessen Namen? Internationale Gerichte in Zeiten
Globalen Regierens? (Suhrkamp 2014).
12 See SW Schill and K Tvede, ‘Mainstreaming Investment Treaty Jurisprudence. The
Contribution of Investment Treaty Tribunals to the Consolidation and Development of General International Law’ (2014) 14 The Law & Practice of International Courts and
Tribunals 94-129; V Vadi, Analogies in International Investment Law and Arbitration (CUP
which give human rights organizations a direct mode of participating and voicing their concerns in arbitration proceedings.13 Human rights concepts are used as benchmarks in the context of state responsibility, the constraint of governmental authority, and the protection of individual rights against the actions of public and private actors. Finally, human rights considerations are an important pillar in understanding investment arbitration as a form of public (international) law,14 which the investment tribunals have to take into account when exercising international public authority.15
Those observations reveal a more complex relationship between investment arbitration and human rights.16 References to human rights imply that at least some form of interaction is taking place and that this affects the system of investment arbitration. For instance, this could indicate that investment arbitration is becoming more human-rights friendly by harmonizing substantive or procedural rules. In particular the last point is decisive for the future of international investment arbitration as it could serve as a partial remedy for the legitimacy crisis. However, this could not be confirmed thus far, as empirical analyses on the substance of investment awards are scarce.17
This study provides a framework for systematically analyzing the practice, function, and consequences of human rights references in investment arbitration. The thesis argues that both the discussion on the inherent conflict of investment and human rights and the debate on the fragmentation and isolation of investment law from human rights law are not reflected in the practice of international investment arbitration. By applying both quantitative and qualitative approaches, I analyze how and why human rights references are employed in investor-state arbitration and,
13 See J Harrison, ‘Human Rights Arguments in Amicus Curiae Submissions: Promoting
Social Justice’ in Dupuy, Petersmann, and Francesconi (n. 9) 369-421; JE Vinuales, ‘Human Rights and Investment Arbitration’ (2006) 8 International Law: Revista Columbiana de
Derecho Internacional 231-273; S Schadendorf, ‘Human Rights Arguments in Amicus
Curiae Submissions: Analysis of ICSID and NAFTA Investor-State Arbitrations’ (2013) 10
Transnational Dispute Management.
14 For investment arbitration as public international law, see E de Brabandere, Investment
Treaty Arbitration as Public International Law (CUP 2014); JA Maupin, ‘Public and Private
in International Investment Law: An Integrated Systems Approach’ (2014) 54 Virginia
Journal of International Law 367-435; SW Schill (n. 1); SW Schill, ‘Enhancing International
Investment Law’s Legitimacy: Conceptual and Methodological Foundations of a New Public Law Approach’ (2011) 52 Virginia Journal of International Law 57-102; G Van Harten,
Investment Treaty Arbitration and Public Law (OUP 2007).
15 See A von Bogdandy and I Venzke, ‘Zur Herrschaft internationaler Gerichte: Eine
Untersuchung internationaler öffentlicher Gewalt und ihrer demokratischen Rechtfertigung’ (2010) 70 Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 1-49.
16 For an overview, see also M Hirsch, ‘Investment Tribunals and Human Rights: Divergent
Paths’ in Dupuy, Petersmann, and Francesconi (n. 9) 97-114.
ultimately, whether they are able to remedy the legitimacy crisis of investment arbitration.
The thesis is divided into three sections. Chapter II provides the methodology that allows to gather empirical evidence on the actor and nature of human rights references in order to track down the mode of interaction. Subsequently, the empirical data of 21 investor-state arbitration awards will be analyzed descriptively. Thereupon, Chapter III elaborates on the strategic functions of using human rights references for the process of arbitral decision-making and argumentative practice. Chapter IV examines human rights references from the perspective of the comparative approach in order to evaluate whether they can remedy the legitimacy. Chapter V concludes by proposing several recommendations to contribute to a more legitimate and human rights-considerate system of investment arbitration.
II.
An Empirical Analysis of Human Rights References
1. Research Design and Methodological Remarks
Empirical research in investment arbitration is still in its infancy.18 To date, empirical data regarding investment disputes19 is scarce. This is regrettable in the face of the exponential growth of awards since 2000, which cannot be analyzed systematically on a large scale without first extracting the relevant data. Yet, the number of investor-state dispute settlements is exponentially rising during the last years, ICSID alone accounts for around 50 new complaints in 2015.20 Even the actual number of all investor-state disputes is unknown. According to UNCTAD, until the end of 2014, 608 disputes were processed, of which 243 are still active.21 This lack of data gravely complicates tracking down the challenges faced by investment arbitration and identifying appropriate suggestions for improvement of the system of investment arbitration.22 Therefore, the sample of cases is not claiming to account for universal
18 There exist a limited number of empirical analyses of arbitration awards. A particular
remarkable study in the substantive elements of almost 100 ICSID cases was conducted by Ole Kristian Fauchald, see OK Fauchald, ‘The Legal Reasoning of ICSID Tribunals – An Empirical Analysis’ (2008) 19 European Journal of International Law 301-364. However, most of the empirical analyses focus on analyzing procedural issues such as the role of arbitrators and panel composition, see the bibliography by D Behn, ‘Empirical Studies on Legitimacy in International Investment Law’ (2014) 1 PluriCourts Investment Working Paper 1-5, <http://www.jus.uio.no/pluricourts/English/topics/investment/documents
/1-2014bibliography-isds-empirical.pdf> accessed 7 May 2016.
19 For instance ICSID only features the basic parameters of the case.
20 International Centre for Settlement of Investment Disputes, ‘Caseload-Statistics’ (2016) 7. 21 United Nations Conference on Trade and Development, ‘Recent Trends in IIAS and ISDS’
(2015) 8.
22 Pioneering work in this regard was undertook by Susan D. Franck, who analyzed 102
assumptions. Rather, the analysis should be seen as a modest first step in tracing the various modes how human rights references are used in investment arbitration. Hence, the study is primarily explorative.
An explorative research design possesses several advantages. In contrast to conclusive research focused on testing hypothesis,23 explorative research aims to provide more general insights into a research field.24 An explorative study does neither require prior theoretical or empirical studies nor a large sample. By analyzing original sources, it is more flexible to address several questions, e.g. the how, when, and why of human rights reasoning in investment arbitration, and is not aimed at proving a limited causal relationship. In other words, it intents to establish a theoretical framework inductively.
The study analyzes a corpus of 21 textual documents of investor-state arbitration. 19 of those are awards, while the documents in Total v. Argentina is the ‘Decision on Liability’ and the document in Fraport v. Philippines is the ‘Decision on the Application for Annulment of Fraport AG Frankfurt Airport Services Worldwide’. All selected cases feature the argumentation of both parties, as well as the Tribunals own legal reasoning. They all include specific, direct references to human rights in a broad sense. Due to the lack of a specific database on the substantive elements of investment awards, the cases were self-selected by a thorough screening of the relevant literature and scholarly discussion, thereby increasing the risk of bias.
Empirical research has to face several obstacles when applied to investment arbitration, most importantly selection-bias. The system of investment arbitration is complex and decentralized by nature, which results in varying standards of transparency25, public access, and information-policy. This significantly complicates empirical research by limiting the available case sample.26While it would have been interesting to also consider the parties’ original submissions, most tribunals do not publish those documents at first, making the available data highly inconsistent and unreliable in terms of comparability. Consequently, the results of this empirical analysis are preliminary in nature.
Franck, ‘Empirically Evaluating Claims About Investment Arbitration’ (2007) 86 North
Carolina Law Review 1-88.
23 Most empirical research in investment arbitration is using a hypothesis-testing
methodology, which can only account for a limited number and specifications of variables, see for example, G Van Harten, Sovereign Choices and Sovereign Constraints: Judicial Restraint in Investment Treaty Arbitration (OUP 2013). This lends itself to study specific problems of investment arbitration, but not to illustrate the complexities of legal reasoning and other substantive issues of investment awards.
24 See RA Stebbins, Exploratory Research in the Social Sciences (Sage Publications 2013). 25 For a more nuanced view on transparency in international investment law, see JA Maupin,
‘Transparency in International Investment Law: The Good, the Bad and the Murky’ in A Bianchi and A Peters, Transparency in International Law (CUP 2013).
Still, as there exists no study to date, which combines quantitative and qualitative approaches to human rights considerations in investment arbitration - and the public and scientific debate seems rather deadlocked due to a lack of substantive evidence - gaining at least some empirical insights outweighs the risks in this case.
2. Actors and Their Strategic Use of Human Rights References
This study finds that human rights references are employed intentionally by rational actors. The first indicator relates to the participant in the arbitration, which introduces the human rights reference. Human rights references can be made by the Tribunal, as well as the Claimant and the Respondent themselves. Doing so, one can identify the driving force for the decision to bring human rights, which are not traditionally included into the subject matter jurisdiction of an arbitration tribunal, into the realm of investment law. In other words, those actors are considered to be responsible for this confrontation between human rights and investment law norms.
Actor Respondent Tribunal Claimant
Number of Cases 10 8 3
Table 1: First introduction of reference by actor
In the 21 cases, all actors actively employed human rights references, yet, to varying degrees. The Respondent, usually the state party in investor-state arbitration, introduced human rights references in the most cases (ten). 27 In eight cases, the
Tribunal used human rights references for the first time,28 while references introduced by the Claimant only accounted for three cases.29 This significant gap might be explained by the nature of the Claimant. He is a foreign investor and traditionally not bound by human rights instruments.30 The three cases in which the investor submitted
human rights references first were Al-Warraq v. Indonesia, Channel Tunnel v. UK, and Fraport v. Philippines. The Claimants used the references with regard to questions of expropriation, as well as legal safeguards for the investor itself, such as the right to a fair trial or the right to be heard. The latter is embedded in the fair and equitable treatment of a foreign investor. This clearly shows that the use of human rights in investment arbitration is not only an instrument of states to account for human rights obligations, or more poignantly, to use human rights obligations as an excuse for violating investment treaties. In fact, the investors themselves are willing to use arguments based on human rights instruments when claiming their (fundamental) rights under the investment treaty in place.
27 Cases Nr. 4, 6, 7, 12, 13 15, 16, 17, 18, 19. 28 Cases Nr. 1, 3, 8, 10, 11, 14, 20, 21. 29 Cases Nr. 2, 5, 9.
30 Yet, this might be changing, see also United Nations, ‘Guiding Principles on Business and
Human Rights’, <http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusiness HR_EN.pdf> accessed 7 May 2016.
There are multiple ways in which an actor can respond to another actor using human rights references. As the proceedings follow an adversarial style, there is always one actor, who starts using human rights references in the first place. Yet, the other actors can choose to pick up the argumentation, thereby demonstrating their willingness to confront the use of human rights references in investment arbitration. Due to the final nature of the award, the disputing parties cannot pick up a reference first introduced by the Tribunal in its legal reasoning. Hence, the total number of cases with regard to the question of responsiveness by other actors only amounts to 13.31
In eight of 13 cases, another actor picked up the human rights reference during the proceedings. As more than one actor can pick up a reference, twelve interactions were identified in the eight cases. The Respondent only accounts for one instance, when he rebutted the Claimants reference in the case of Al-Warraq v. Indonesia. The Claimant responded three times to references introduced originally by the Respondent.32 The Tribunal replied in eight cases to references.33 Three of those are the cases, in which the Claimant used human rights references for the first time,34 while in another
three,35 the Claimant picked up the reference as well. Hence, in six of twelve cases, the Tribunal felt the need to respond to references first introduced or picked up by the Claimant. With regards to the ten cases, in which the Respondent introduced the reference, the Tribunal only responded to five, of which only two cases were not already referred to by the Claimant. In five cases, in which the Respondent introduced a human rights reference, neither the Claimant nor the Tribunal picked up the reference.36 It was not possible to infer from the empirical material whether the primary actor re-engaged in the discussion.
Respondent Tribunal Claimant
Introduction by Respondent
(in total: 10)
/ 5
(3 prior discussed by Claimant)
3
Introduction by Claimant
(in total= 3)
1 3 /
Table 2: Responding to references by actor
While the Respondent is most likely to use human rights references, he tends to be more reserved in engaging in a human rights dialogue when another actor introduced the reference. The empirical results show that there is a significant link between the references introduced or discussed by the Claimant and a response by the Tribunal.
31 In those cases, the reference was first introduced by the Respondent or the Claimant. 32 Cases Nr. 12, 15, 17.
33 Cases Nr. 2, 5, 7, 9, 12, 15, 17, 19. 34 Cases Nr. 2, 5, 9.
35 Cases Nr. 12, 15, 19. 36 Cases Nr. 4, 6, 13, 16, 19.
The stance towards the integration of human rights into the arbitration process can be categorized broadly in a ‘soft’ approach, in favor of including human rights, and a ‘hard’ approach, which rejects human rights-based arguments. Only in two cases, Al Warraq v. Indonesia and Continental v. Argentina, a ‘soft’ approach to the inclusion of human rights arguments is taken, while the other six cases predominantly feature ‘hard’, purist positions towards human rights references.37 The Claimant and the Tribunal refuse the references introduced by the Respondent usually on behalf of the limited subject matter of the investment arbitration. This shows that, even when the responding actors seem to engage voluntarily in the human rights discourse, they usually refuse the references on behalf of the limited subject matter of the investment arbitration. To understand this reluctant attitude, I want to flash out the reasoning of four cases in more detail.
The case of Rompetrol v. Romania is particularly insightful, as Rompetrol (on behalf of its directors) had already sued Romania at the ECtHR on similar charges of harassment including arrest, detention, criminal investigation, and wiretapping. The ECtHR found Romania in violation of Art. 6§1 of the Convention.38 Yet, Rompetrol
argued during the investment arbitration, “Romania’s reliance on human rights jurisprudence is misplaced.” 39 Rompetrol pursued an independent line of argumentation based on the investment treaty in place and not at all related to the findings of the ECtHR in favor of the investor. However, Rompetrol did not support a strict exclusionary position towards human rights references, but rather “argues that human rights standards set a ‘floor’, but not a ‘ceiling’ that would limit the level of protection that might be granted under the Treaty, so that ECHR case law can only be of assistance by analogy.”40 In the perspective of Rompetrol, the level of protection for private actors offered by investment law is actually higher than the one ensured by human rights instruments, which constitute only minimal standard of protection. The Tribunal confirmed the exclusionary position and found that it “is not competent to decide issues as to the application of the ECHR within Romania.”41
In a similar vein, the Tribunal in Fraport v. Philippines found that “[t]he principle in dubio pro reo has proper application as a right of the defence in criminal proceedings, because it counterbalances the coercive power of the state. It cannot, however, be transposed into the context of international arbitral proceedings because to do so would be inconsistent with the principle of equality of the parties.”42
37 Cases Nr. 5, 9, 12, 15, 17, 19.
38 Affaire Association des Personnes Victimes du Systeme S.C. Rompetrol et S.C. Geomin S.A.
et Autres v. Roumaine.
39 Rompetrol v. Romania, ¶60(d). 40 Ibid.
41 Ibid., ¶87(i).
Another important example is the statement of the Tribunal in Channel Tunnel v. UK. The dispute related to the interpretation of a Concession Agreement between the parties and it was unclear whether the broadly phrased subject matter in the Agreement covered “obligations arising from sources extraneous to the Concession Agreement – such as the European Convention of Human Rights or the principles of the international law of investment protection (…).”43 The Tribunal found that the bilateral treaty provided “for a form of parallelism” of national and international jurisdiction,44 however it refrained to extend the jurisdiction as “the Concession Agreement does not contain any contractual commitment by the State Parties that they will comply with their own or European law. Whether or not they did so would be matter for their own courts or for the European courts.”45
In Pezold v. Zimbabwe, the Claimant refrained from accepting the Respondent’s justification of a ‘margin of appreciation’ as the “principle has developed in the context of human rights adjudication under the European Convention for Human Rights, and is not apt for use in the context of BIT claims.”46 Similarly the Tribunal emphasized “that due caution should be exercised in importing concepts from other legal regimes (in this case European human rights law) without a solid basis for doing so. Balancing competing (and non-absolute) human rights and the need to grant States a margin of appreciation when making those balancing decisions is well established in human rights law, but the Tribunal is not aware that the concept has found much support in international investment law.”47
3. Type and Content of Human Rights References
The second set of indicators examines the type and content of the human rights reference used in the selected cases. In the 21 selected cases, 32 individual references to six different sources of human rights were identified.48
The highest number of external references was found in the case of Al-Warraq v.
Indonesia, which deserves a closer look. The number of references in the case of
Al-Warraq is due to the ambiguity of a specific concept in the basic treaty. By invoking several human rights references from important international, as well as the most prominent regional treaties, Al-Warraq intended to establish a universal consent of fundamental human rights to interpret the very indeterminate notion of ‘basic rights’. He claims that the Government’s bailout of a bank he had invested in previously and a subsequent criminal investigation for fraudulent actions had violated his rights under
43 Channel Tunnel v. UK, ¶149. 44 Ibid., ¶147.
45 Ibid., ¶148.
46 Pezold v. Zimbabwe, ¶459. 47 Ibid., ¶465.
48 Every reference to one category counts just once for the whole case, meaning that when the
ECHR was referred to multiple times in one case, this still counts as one reference to one category.
Art. 11 UDHR, Art. 14(2) and (3) ICCPR, Art. 6§2 and §3 ECHR, Art. 8§2 ACHR, and Art. 7§2(b) ACHPR. Al-Warraq relied on those provisions to account for the vagueness of the protection of the ‘basic rights’ of the investor in Art. 10.1 of the Organisation of Islamic Conference (OIC) investment agreement. He argued that the notion of “basic rights and guarantees (…) must be interpreted to include basic international law and norms.”49 While Al-Warraq succeeded in establishing arbitration, his broad interpretation of ‘basic rights’ was rejected. The Tribunal found that “properly interpreted in its context ‘basic rights’ refer to ‘basic property rights’ and is not a general reference to civil and political rights such as the right to a fair trial pursuant to Art. 14 ICCPR relied upon by the Claimant.”50 However, the Tribunal took the references into account, when interpreting fair and equitable treatment.51 Contrary to the case of Al-Warraq, 14 cases featured only one type of reference.52 With the exception of CMS v. Argentina, the references in those cases were all related to the ECHR, mostly referring to explicit case law of Strasbourg.
Two main substantive topics were identified in the references. While questions surrounding expropriation dominate, nine references relate to the right to a fair trial.53 This shows that human rights references are predominantly used in substantive issues of investment arbitration, such as expropriation and fair and equitable treatment, which can be appealing both to the Claimant as well as the Respondent. However, procedural issues might also arise, such as the exhaustion of domestic remedies in
Loewen v. US.54
Furthermore, six different sources of human rights references were analyzed in the case sample, which can be clustered into three categories: global, regional, and local.
Human Rights Instrument
Global Regional Local
Number of References 4 25 3
Table 3: Type of references by human rights instrument
Interestingly enough, global human rights instruments are only used sporadically; the UDHR and the ICCPR only amount to two references.55 This might be due to their specific nature. The UDHR and the recommendations by the UN Human Rights Committee are not legally binding. While the unquestionable majority of states ratified those instruments, they mainly lack enforcement capabilities.
49 Al-Warraq v. Indonesia, ¶177. 50 Ibid., ¶521. 51 Ibid., ¶522. 52 Cases Nr. 1, 3, 4, 5, 6, 7, 10, 11, 12, 13, 14, 16, 17, 21. 53 Cases Nr. 2, 6, 9, 12, 17. 54 Loewen v. US, ¶165f. 55 Cases Nr. 2 and 9.
The overwhelming number of references based on regional human rights instruments reaffirms this assumption. Regional instruments are legally binding and generally possess high compliance capabilities by means of their dispute settlement bodies. References to case law of those tribunals could indicate judicial dialogue or cross-fertilization of the judicial bodies of human rights and investment law.56In total, nearly 60 percent of all references relate to the ECHR and case law of the ECtHR. The high majority of those deal with questions of expropriation, namely they discuss the relevant case law on ‘direct’ or ‘indirect’ expropriation and argue in favor of a ‘margin of appreciation’.57 Thus, there seems to be a significant connection between investment arbitration tribunals and the ECtHR. Besides this Eurocentric dominance, the ACHR was referenced five times58 and the ACHPR once.59 References to specific case law can also be found in two ACHR references.60 Both relate to expropriation but also include certain issues such as moral damages in the case of Pezold v.
Zimbabwe61, which are usually not raised when invoking an ECtHR case as reference. The third category, local, is not based on an international human rights instrument, but related to the issue of domestic regulatory space. It encompasses three cases in which the human rights references are originating from the constitutional order of the state parties in question and a monist approach to international law.62 They all relate to the economic crisis in Argentina in the early 2000s and the approval of the Economic-Financial Emergency Law, which made it possible for Argentina to change or renegotiate contracts with private investors, prompting the investors to file for expropriation.
In the case of CMS v. Argentina, Argentina argued that the obligation towards human rights treaties surpasses the obligation to fulfill an investment treaty: “while treaties override the law, they are not above the Constitution and must accord with constitutional public law. Only some basic treaties on human rights have been recognized by a 1994 constitutional amendment as having constitutional standing and, therefore, in the Respondent’s view, stand above ordinary treaties such as investment treaties.”63 Two years later in 2007, Argentina still mentioned the constitutional status of human rights treaties in Siemens v. Argentina and Sempra v. Argentina. However,
56 See AM Slaughter, ‘A Typology of Transjudicial Communication’ (1994) 29 University of
Richmond Law Review 99-138; AM Slaughter, ‘Judicial Globalization’ (1999) 40 Virginia Journal of International Law 1103-1124; A Wiener and P Liste, ‘Lost Without Translation?
Cross-Referencing and a New Global Community of Courts’ (2014) 21 Indiana Journal of
Global Legal Studies 263-296.
57 Cases Nr. 1, 3, 4, 5, 7, 10, 13, 14, 15, 16, 19, 20, 21. 58 Cases Nr. 2, 8, 15, 18, 20. 59 Case Nr. 2. 60 Cases Nr. 15 and 20. 61 Pezold v. Zimbabwe, fn. 95. 62 Cases Nr. 6, 18, 19. 63 CMS v. Argentina, ¶114.
the argumentation remained vague on the “institutional survival and preservation of the constitutional order” put forward by Argentina.64
Those cases are embedded in an ongoing debate in international investment law, namely whether foreign investment treaties unduly restrict the regulatory capacity of state. A heavily debated example in this regard is an alleged responsibility of the state to ensure sustainable development and the protection of the environment at the expense of the legal certainty of the foreign investor from the perspective of human rights.65 Due to the topicality of the cases it will be seen whether countries in a similar dire economic situation such as Greece will incorporate this argumentation.
Another open question is whether geographical factors such as membership in a regional human rights system condition the invocation of certain categories of human rights references. Geographically, the 21 cases show a great variance. Most cases are filed against states in the Americas, namely eight cases against Argentina, two against the United States, as well as one each against Mexico and Ecuador. The other half of the cases shows no regional pattern. Three cases are located in Africa, two cases in Asia, and four cases in Europe.
Only four of 21 cases feature states that are parties to the ECHR. This observation is seemingly contradictory to the overwhelming number of ECHR references throughout all cases. This suggests that the prominence of the ECHR and its case law extends far beyond the reach of its state parties and has a special status in the realm of investment arbitration. The references to the ACHR and the ACHPR show a similar effect. While the ACHR was invoked in relation to state parties Argentina and Mexico, it also featured in cases related to disputes involving Indonesia and Zimbabwe. Despite the prominence of the ECHR, the cases show no correlation between the state party involved and the human rights treaty invoked.
III.
The Strategic Functions of Human Rights References in
Investment Arbitration
The last chapter has identified several important patterns in the practice of human rights references in investment arbitration. In the following, I adopt a qualitative approach to examine whether the actors use human rights references strategically and to understand, which function the references serve. The perspective of arbitral decision-making examines the process in which a particular interpretation is found in investment arbitration, while the perspective of argumentative practice highlights the role of human rights references as a special instrument in legal reasoning.
64 Sempra v. Argentina, ¶331.
65 See also, L Wandahl Mouyal, International Investment Law and the Right to Regulate: A
1. Arbitral Decision Making: Guidance in Interpretation and Determination In a 2007 study, James Fry identified that “[i]nvestment arbitration awards refer to human rights and human rights jurisprudence in at least three different ways: (1) in determining substantive rules; (2) in determining procedural rules; and (3) in dealing with supposed conflicts between human rights and international investment law.”66 This study confirms Fry mostly: In particular the first and third function of human rights references abound, while the second mode has been mainly absent. Due to limitations of the case selection, there are no cases which feature argumentation related to the procedural issue of allowing amicus curiae submissions.
In particular in claims of expropriation, human rights references were used to determine substantive rules.67 The most prominent example in this regard is the case of Tecmed v. Mexico, which also serves as a precedent to several other cases in this study.68 In Tecmed the Tribunal had to decide on the concept of regulatory expropriation, which is generally undertheorized in most BITs. In order to do so, the Tribunal relied on two sources of external references, the case of Baruch Ivcher
Bronstein v. Peru at the IACtHR and four cases at the ECtHR including the frequently
cited case of James and Others v. UK.69 By relying on the Ivcher Bronstein case, the Tribunal emphasized that it “should not restrict itself to evaluating whether a formal dispossession or expropriation took place, but should look beyond mere appearances and establish the real situation behind the situation that was denounced”70 when analyzing whether an indirect expropriation took places. In contrast to the traditional model of direct expropriation, indirect expropriation is more difficult to detect, hence, a broader evaluation is in order. The ECtHR case law comes into place, when the Tribunal had to decide on the proportionality of the expropriatory measure of the Mexican National Ecology Institute in the name of the public interest. In this regard, the European case law serves to introduce a ‘reasonable relationship of proportionality’ between the means employed and the aims sought and the concept of ‘legitimate interest’ of the investor.71 Both references are a focal point for the Tribunal, they expand not only the mandate of the Tribunal to consider indirect expropriations, but also import concepts originating from human rights jurisdiction into the substantive issues of the investment arbitration.
66 See, J Fry, ‘International Human Rights Law in Investment Arbitration: Evidence of
International Law’s Unity’ (2007) 18 Duke Journal of Comparative & International Law 77-149, 82.
67 Cases Nr. 1, 3, 4, 5, 7, 10, 14, 15, 16, 19, 20. Another example is the case of Loewen v. US
when the Tribunal tried to concretize the obligation to pursue local remedies. By relying on ECtHR case law it stated “that the complainant is bound to exhaust any remedy which is adequate and effective (…) so long as the remedy is not ‘obviously futile’.” ¶165.
68 See for instance the case of Azurix v. Argentina. 69 Tecmed v. Mexico, ¶¶116, 122.
70 Ibid., ¶116 71 Ibid., ¶122.
Expropriation disputes are a case in point. In many of the cases dealing with expropriation, the state party as well as the Tribunal explicitly applied the concept of ‘margin of appreciation’ to decide whether regulatory measures are justified.72The dominance of references dealing with expropriation issues can be explained by the structural similarity of both concepts in human rights and investment law. However, other scholars highlight that the concept of property in Article 1 of the First Additional Protocol and the jurisprudence of the ECtHR is actually quite different from expropriation clauses in most BITs,73 hence, “reference to the jurisprudence of the ECtHR is insufficient reason to apply proportionality in investor-state arbitration.”74 It seems that the comparability of both concepts is actually very superficial; yet, this clearly does not affect the overwhelming use of human rights analogies related to expropriation. During the proportionality analysis of regulatory measures in expropriation claims, human rights references are used for dealing with supposed conflicts between human rights and international investment law.
While issues related to third generation rights were not found in the case study, in particular Argentina is prone to use human rights of its population as an antipode to the unconditional protection of foreign investment.75Argentina argues in many cases that “the [economic and financial] crisis produced serious and continuing effects, the standard of living has been reduced drastically, inflation is rising again”76, thereby “implying that property rights claimed in this arbitration, if upheld, would constitute a breach of international human rights law.”77 Argentina seeks support in dealing with this conflict by relying on external jurisprudence, 78 for instance when invoking a ‘state of public emergency’ among others in El Paso v. Argentina, Sempra v. Argentina, and Siemens v. Argentina.
Two traditional legal sources prevail to integrate human rights arguments. The first option to include human rights references to determine substantive rules is reliance on Art. 31(3)(c) VCLT,79 which allows taking into account “any relevant rules of
72 Biwater Gauff v. Tanzania, fn. 170; Continental v. Argentina, fn. 270, National Grid v.
Argentina, ¶247; Pezold v. Zimbabwe, ¶453.
73 See, U Kriechbaum and C Schreuer, ‘The Concept of Property in Human Rights Law and
International Investment Law’ in S Breitenmoser et al (eds), Human Rights, Democracy and
the Rule of Law: Liber Amicorum Lucius Wildhaber (Nomos 2007) 743-762.
74 G Bücheler, Proportionality in Investor-State Arbitration (OUP 2015) 151. For a critical
discussion of Tecmed, see ibid., 141-151.
75 See National Grid v. Argentina, ¶136. 76 Ibid., ¶248.
77 Siemens v. Argentina, ¶79. 78 National Grid v. Argentina, ¶247.
79 According to Bianchi, this provision serve as a “multi-functional card” in ‘the game of
interpretation’, which “allows disparate objectives to be reached in divergent contexts”, see A Bianchi, ‘The Game of Interpretation in International Law. The Players, the Cards and Why the Game is Worth the Candle’ in A Bianchi, D Peat and M Windsor, Interpretation in
international law applicable in the relations between the parties” in the interpretation of a BIT.80 This provision could extent the scope to a human rights treaty applicable between the two signatory parties to the BIT. The second, more widespread possibility is offered by “relevant principles of international law” as prescribed by several BIT’s and Art. 38(1) ICJ Statute.81 In this scenario, the human rights references serve the function of systemic integration, which “requires the Tribunal to take (…) governing norms of international law into account when interpreting and applying [the respective BIT].”82 As such, human rights references provide “useful guidance [e.g.] for purposes of determining whether regulatory actions would be expropriatory and give rise to compensation.”83
This form of legal guidance can at most only amount to ‘guidance by analogy’ in the words of the Tribunal in Mondev v. US, as the human rights instruments in question “emanate from a different region, and are not concerned (…) specifically with investment protection.”84 The Tribunal in Pezold v. Zimbabwe raised the same argument in order to reject the margin of appreciation invoked by the Respondent,85 but accepted to “take some heed from Castillo-Paez v. Peru (IACHR)” for assessing moral damages.86 Here, the Tribunal makes a fine, yet crucial distinction between importing ‘external’ concepts on the one hand, and being guided or inspired by ‘external’ legal sources on the other. While the former is usually faced with a ‘hard’ stance and prompt rejection, the latter leaves some argumentative space to consider the reference as a form of interpretation tool, albeit in a different context as originally intended. In other words, the Tribunal rejects doctrines, which did not derive from the investment arbitration system, but is open to take into account non-investment related sources of international law in arbitral decision-making.
The unique influence of the European human rights system remains decisive. In Occidental v. Ecuador, the Tribunal explained its analogy to a legal rule originated in a different region by stating that “the most developed body of jurisprudence is in Europe. It is very well established that there is a principle of proportionality (…). The principle has been adopted and applied countless times by the European Court of Justice in Luxembourg, and by the European Court of Human Rights. Against that background, the Tribunal observes that there is a growing body of arbitral law, particularly in the context of ICSID arbitrations, which holds that the principle of proportionality is applicable to potential breaches of bilateral investment treaty
80 See for example, Al-Warraq v. Indonesia, ¶177.
81 Channel Tunnel v. UK, ¶109f.; El Paso v. Argentina, ¶238 (also referring to the eponymous
textbook by Ian Brownlie).
82 Al-Warraq v. Indonesia, ¶203.
83 Azurix v. Argentina. ¶312. The function of ‘relevant guidance’ is also mentioned by
Rompetrol v. Romania in order to assess standards of due process, ¶89(c).
84 Mondev v. US, ¶144. 85 Pezold v. Zimbabwe, ¶459. 86 Ibid., fn. 95.
obligations.”87 Hence, the Tribunal in Occidental identified the existence of a norm, which originated from a different contest, but has since been established in the framework of investment arbitration through persistent practice. The indicator of persistent application in investment arbitration might help to distinguish whether an external legal norm is gradually more accepted in international investment law.88 In sum, human rights references are primarily used in determining substantive rules, which are in need of interpretative guidance. However, besides those functional purposes, the decision to introduce human rights in investment arbitration is also influenced by other factors such as strategic motives by the relevant actors. This will be analyzed in the following.
2. Argumentative Practice: Shaping, Framing and Reasoning
By invoking a reference or an analogy from an external source, the rational actors also intentionally shape the judicial discourse as they attempt to shift the balance of power in the arbitration process in their favor. This is in line with a prominent stream of legal thought that characterizes international law as an argumentative practice, which “is about persuading target audiences such as courts, colleagues, politicians, and readers of legal texts about the legal correctness – lawfulness, legitimacy, justice, permissibility, validity, etc – of the position one defends.”89 Human rights references are especially conducive to achieve this objective based on two structural reasons. First, they are embedded in a similar institutional framework. As Thomas Wälde explained in Thunderbird v. Mexico: “while public international law still provides the main principles (in particular Art. 31 of the Vienna Convention, which moreover is an expression of an international consensus on interpretative principles) (…) Analogies from such inter-state international law have therefore to be treated with caution; more appropriate for investor-state arbitration are analogies with judicial review relating to governmental conduct – be it international judicial review (as carried out by the WTO dispute panels and Appellate Body, by the European- or Inter-American Human Rights Courts or the European Court of Justice) (…).”90 According to Wälde, the similar structure of human rights and investment law results in a higher persuasiveness for analogies by human rights courts in arbitral tribunal. He referred to the ECtHR as “[t]he judicial practice most comparable to treaty-based investor-state arbitration (…).”91 A similar institutional design between human rights and investment tribunals certainly facilitates the transfer of norms and legal standards
87 Occidental v. Ecuador, ¶403f.
88 This development is in line with a rational actor model, see T Risse and K Sikkink, ‘The
Socialization of International Human Rights Norms into Domestic Practices’ in T Risse, SC Ropp, and K Sikkink, The Power of Human Rights. International Norms and Domestic
Change (CUP 1999) 1-38.
89 M Koskenniemi, ‘Methodology of International Law’, (2007) MPEPIL. 90 Thunderbird v. Mexico, Separate Opinion by Thomas Wälde, ¶13. 91 Ibid., ¶141.
enshrined in case law. This is also a incentive to practice judicial dialogue, which results in the mainstreaming of common concepts and ideas across different legal spheres.92
Second, human rights inherently possess a certain normative authority, which makes them attractive to rational actors. By using analogies from human rights instruments, the actor engages in the ‘rhetoric of rights’. He thereby taps on a higher source of authority embodied in the normative superiority of global, inalienable human rights. In other words, human rights in this sense are an instrument in legal reasoning to claim authority and the moral high ground in a dispute. As Jonathan Gorman elaborates, “there is a widespread respect for rights as if they were absolute standards of morality or law. (…) Thus, the increasing use of the concept of rights is often not out of a proper respect for the rights held by others, but rather a demand that the rights held by oneself should be respected.”93 Indeed, this could explain the empirical observation that human rights references are not only used by state parties, but also by the investors.
For the parties to the dispute, introducing an external reference serves to limit the reasoning of the adversary. This can be achieved by shifting the focus from a relatively narrow question of investment treaty interpretation to broader and more indeterminate issues such as the regulatory capacity of the state.94 Those issues require a broader and more intricate reasoning and the investment treaty in place is only of limited value in responding to those arguments.
This is also a question of framing a problem in a specific vocabulary. The shift in the focus of arbitration manifests itself in using existing human rights jurisdiction as the relevant point of reference. Martti Koskenniemi identified that “the choice of the relevant language (‘frame of reference’) – whether the normative field is seen in terms of ‘human rights’, or, for example ‘economic development’ or ‘national security’ – reflects upon a prior political decision (…), often having to do with which authority should have the competence to deal with that matter.”95 By framing the dispute in the hierarchical language of rights and invoking a reference to human rights case law, the actor suggests that a more authoritative body already solved the decisive question. As a result, those two underlying structural elements pose a strong appeal to use human rights references and analogies strategically for all actors involved.
92 Schill and Tvede (n. 12), see also more generally, P-M Dupuy, ‘Unification Rather Than
Fragmentation of International Law? The Case of International Investment Law and Human Rights Law’ in Dupuy, Petersmann, and Francesconi (n. 9) 45-62.
93 J Gorman, Rights and Reason (Routledge, 2nd ed. 2014) 1f.
94 This technique was extensively analyzed by political scientist Elmer Erich Schattschneider
with regards to political organizations and their strategies in conflictive situations, see EE Schattschneider, The Semisovereign People: A Realist’s View of Democracy (Holt, Rinehardt and Winston 1960).
Analyzing the reasoning in the arbitration process unravels that the actors follow different logics when referring to human rights.
For the Claimant, referring to human rights is an opportunity to expand his standing vis-à-vis the state party, as “most of the rights provided by a BIT, that means fair and equitable treatment, most favored clause, minimum standard of treatment, prohibition of discrimination and access to judicial proceedings (…) are designed to protect investors but are vaguely worded and are themselves indeterminate.”96 Those indeterminate rights of the investor mirror the likewise indeterminate fundamental human rights guarantees of the right of equality and justice, which facilitates the inclusion.
For the Respondent, referencing human rights allows him to challenge “the protectionist nature of the BITs (…) by the protection to the fundamental interests protected by states, such as the rights of minorities.”97 Similar to the investor, state parties also perceive an asymmetry in investment law, because the state parties are the only ones legally bound to provide and protect certain guarantees included in the respective BITs. To make matter worse, they are also obligated to other, possibly conflicting norms such as human rights treaties. Furthermore, it is generally acknowledged that a sovereign authority has to be responsible for and should act in the interest of its population. Yadira Castillo identified three ways in which the “the indirect remission” to human rights can be beneficial to the state parties. First, it can become “a tool to its favor in a scenario where they are seen as constant losers”, second, it can be seen as “route to vindicate the rights of groups that normally are annulled by the system”, and third, it can develop into “a scenario to superpose the identity character of a community over the interest’s investors.”98 Moreover, she observed that the state parties tend to support the arguments put forward by amici
curiae in favor of protecting human rights, which signals that “the investment
arbitrations do not exclude the consequences of the potential victims of a project, and as a result, it is possible to change course of an investment project.”99
The Tribunal uses human rights references to guide, support, and explain its legal reasoning, in other words, to give legitimacy to its decision. Investor-state arbitration is based upon the voluntary participation of all actors involved and the resulting awards are supposed to be final without appeal, hence, there is a higher need for the Tribunal to expand and elaborate its underlying reasoning to the parties submitting to its arbitration. As evidenced in the last subchapter, the Tribunal elaborated on the guidance function and the idea of systemic integration. For instance, the Tribunal may be more inclined to respond to human rights references discussed by the Claimant,
96 Y Castillo, ‘The Appeal to Human Rights in Arbitration and International Agreements’
(2012) 12 Anuario Mexicano de Derecho Internactional 47-84, 73.
97 Ibid., 50. 98
Ibid., 80.
because the investor has more leverage in a procedural sense in deciding which form of investment arbitration to choose or how to enforce the award. This could explain the significant empirical link between the discussion of a reference by the Claimant and a response by the Tribunal. The introduction of an appeal mechanism, whose institutionalization is debated in investment arbitration for quite some time,100 would increase this need for justification by giving more importance to the Tribunal’s reasoning and how it came to a particular decision.
In sum, the Tribunal only uses references to external sources when the case law amounts to “consistent jurisprudence”,101 emphasizing an integrationist perspective. In this sense, the assumption of Fry holds true that “many of the human rights cases cited by arbitral tribunals are some of the most important human rights cases. Moreover, arbitral tribunals seem to rely on these cases in their decisions, not merely in their obiter dicta. These points suggest that arbitral tribunals are not throwing in references to human rights cases merely for the sake of appearances.”102
IV. The Quest for Legitimacy: Human Rights References from
the Perspective of the Comparative Approach
While the preceding chapters illuminated the merits of human rights references for the process of arbitration and the actors involved, human rights references also have the potential to generate legitimacy for the system of investment arbitration. This can be achieved by analyzing references as part of the comparative method of legal reasoning in investment arbitration. In the following, I will first introduce the comparative method in investor-state arbitration and delineate how this can contribute to the generation of legitimacy for the system of investment arbitration. In a second step, I will evaluate whether the findings from the empirical material can confirm the ability of human rights references to solve the alleged problems of indetermination, structural pro-investment bias, and fragmentation of investment arbitration, thereby contributing to more legitimacy.
1. The Comparative Approach to Investment Arbitration
Investment treaty tribunals are heavily engaged in using external references as part of their comparative method.103 While comparative methods in legal reasoning are widely accepted in most constitutional or administrative domestic courts, treaty
100 See among others, CJ Tams, ‘An Appealing Option? The Debate about an ICSID
Appellate Structure’ (2006) 57 Beiträge zum transnationalen Wirtschaftsrecht 5-50.
101 Continental v. Argentina, fn. 407; see also Mondev v. US, ¶141 („in a series of decisions’). 102 Fry (n. 66) fn 15.
103 See Schill (n. 1); Schill and Tvede (n. 12); V Vadi, ‘Critical Comparisons: The Use of
Comparative Law in Investment Treaty Arbitration’ (2010) 39 Denver Journal of
interpretation in international law tended to be more reserved on the matter.104 This originates in the crucial role of consent in international law:105first, an international treaty is not binding without explicit state consent,106 and, second, the consent of national sovereign also ensures legitimacy to the exercise of international authority.107 In recent times a comparative approach began to thrive in several fields of international law, the most prominent being international human rights law.108 The same trend can be observed in international investment arbitration. In recent years, several scholars spoke out in favor of applying a comparative public law approach to study also the process of investment arbitration and the use of comparative law in the reasoning of arbitration tribunals.109
The practice of international investment arbitration features an exceptional number of references and analogies to external sources of jurisprudence. This observation dates back to Hersch Lauterpacht, who already highlighted in 1927 that “[f]or after all has been said on the dangers of analogy, and on the differences protected by the two spheres of law, the fact remains that, with regard to some of the most essential and most urgent questions of international law, it is in the approximation to the analogous general rules of private law that we see embodied the principles of legal justice and of international progress.”110 This phenomenon is not restricted to private law analogies, but became increasingly relevant for public law as well. In hindsight, Wolfgang Friedmann can be deemed prophetic: “With the growing importance of international
104 For domestic law, see R Hirschl, Comparative Matters. The Renaissance of Comparative
Constitutional Law (OUP 2014). For international law, see M Bothe, ‘Die Bedeutung der
Rechtsvergleichung in der Praxis internationaler Gerichte (1976) Zeitschrift für ausländisches
öffentliches Recht und Völkerrecht 280-299; M Adenas and D Fairgrieve, Courts and Comparative Law (OUP 2015).
105 However, see critically, A Guzman, ‘Against Consent’ (2012) 52 Virginia Journal of
International Law 747-790; N Krisch, ‘The Decay of Consent: International Law in an Age of
Global Public Goods’ (2014) 108 American Journal of International Law 1-40.
106 See Art. 34 VCLT. Traditionally see, H Grotius, De Jure Bellis ad Pacis (1625) and E de
Vattel, The Law of Nations (1758).
107 This can be perceived in line of a constitutionalist argument, see M Kumm, ‘The
Legitimacy of International Law: A Constitutionalist Framework of Analysis’ (2004) 15
European Journal of International Law 907-931; M Lister, ‘The Legitimating Role of State
Consent in International Law’ (2011) 11 Chicago Journal of International Law 663-691, or more critically, A von Bogdandy, R Wolfrum, J von Bernstorff, P Dann, and M Goldmann,
The Exercise of Public Authority by International Institutions (Springer 2010).
108 See K Dzehtsiarou and V Lukashevich, ‘Informed Decision-Making: The Comparative
Endeavours of the Strasbourg Court’ (2012) 30 Netherlands Quarterly of Human Rights 272-298; C McCrudden, ‘Using Comparative Reasoning in Human Rights Adjudication: The Court of Justice of the European Union and the European Court of Human Rights Compared’ (2012-2013) 15 Cambridge Yearbook of European Legal Studies 383-416.
109 See Schill (n. 1); Schill (n. 14); Vadi (n. 12).
110 H Lauterpacht, Private Law Sources and Analogies of International Law: With Special
legal relations between public authorities and private legal subjects, public law will be an increasingly fertile source of international law.”111 The extraordinary rise of human rights analogies is proof of his observation in 1963.
To grasp the increasing relevance of analogies, one has to first understand the nature of analogies. Analogies can be drawn to several legal sources; this includes precedents to ‘internal’ judicial decision, as well as to ‘external’ cases by other domestic or international courts and tribunals. The judicial sources in question have to show some degree of comparability, , “[t]he typical use of analogical argument in law is to argue that, because A and B are analogs, a rule which we all agree is applicable to A is also applicable to B.”112 Complete identity is not necessary however, or as Cass Sunstein stated, “[a]nalogical reasoning thus works when an incompletely theorized judgment about case X is invoked to come to terms with case Y, which bears much (but not all) in common with case X, and in which there is as yet no judgment at all.”113 This discussion was already visible in the empirical analysis. In particular the actors inhibiting a ‘hard’ stance to human rights references argued that the two cases lack comparability as they arose out of two different legal regimes. One can generally distinguish two types of analogies: analogia legis and analogia juris. Both types of analogies are regularly applied in investment arbitration as indeterminate provisions abound.114 Analogia legis comes into place, when interpretatively expanding a particular provision to include other obligations, for instance in the case of Maffezini v. Spain when the Tribunal found the MFN provision to include procedural safeguards.115 Analogia juris is generally employed when
‘filling the lacunae’ in some provisions by applying general principles of international law in the interpretation, for example in the application of the FET clause.116
The classic modes of treaty interpretation in Art. 31 and 32 do not explicitly accommodate for comparative perspectives.117 Art. 31(3)(c) provides for the use of case law and principles as subsidiary means for interpretation. In a similar vein, Art. 38(1)(c) ICJ Statute gives the opportunity to apply a comparative method when identifying general principles of international. By using a comparative technique for
111 W Friedmann, ‘The Use of ‘General Principles’ in the Development of International Law’
(1963) 57 American Journal of International Law 279-299.
112 LC Becker, ‘Analogy in Legal Reasoning’ (1973) 83 Ethics 248-255, 249.
113 C Sunstein, ‘Commentary on Analogical Reasoning’ (1993) 106 Harvard Law Review,
741-791, 748.
114 Ibid.
115 Maffezini v. Spain (Decision on Jurisdiction), ¶54-56.
116 SW Schill, ‘Fair and Equitable Treatment, the Rule of Law and Comparative Public Law’
in Schill (n. 1) 151-182.
117 For the classic modes of interpretation, see R Dolzer and C Schreuer, Principles of
International Investment Law (OUP 2012) 28-35. See also C Schreuer, ‘Diversity and
Harmonization of Treaty Interpretation in Investment Arbitration’ (2006) 3 Transnational
