Originally from the Boundaries of Investment Arbitration

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A. INTRODUCTION

As discussed in Chapter One, ECHR and WTO boundary crossings offer manifold promises. A reach into the abundant European human rights case law and the panel and appellate rulings produced by the WTO promises to fill some of the interpretative gaps in investment law, and to do so in ways that may help to correct the perceived “legitimate deficits” of the international investment regime.

The gaps in the contents of IIAs needing to be filled are well-known. Participants in investor-state disputes and academics have long struggled to give concrete meaning to the vague guarantees made to investors in IIAs (from rights to fair and equitable treatment (FET) to bans on “arbitrary” or “discriminatory” actions) and to the assurances made to host states that they can regulate in the public interest. The search for the precise content for IIA terms is made all the more imperative by the relatively rapid rise, since only the mid-1990s, in investment disputes. While terms of art such as FET, national and most-favored-nation treatment, and full protection and security have been around for centuries, it has only been relatively recently that lawyer-litigants and adjudicators have been compelled to give these terms more precise content as applied to particular facts, and to do so in an environment that increasingly demands transparency, public participation, adequate reason-giving, and some form of review. Under the circumstances, a reach to “precedents” produced by established international regimes that might be seen as covering comparable, if not identical, issues seems overly determined.

A reach into ECHR law or WTO law promises to ameliorate, albeit only partially and imperfectly, the many alleged “rule of law” deficiencies of ISDS. These include its alleged tendency to produce under-reasoned opinions inattentive to the wider “public interest”; the “ad hoc” inconsistent nature of its rulings which threaten to “fragment” the unity of international law and undermine the goal of providing stable, predictable rules for investors and their host states; allegations that its adjudicators are insufficiently independent of the parties that appoint them; and criticisms that the investment case law generated is not subject to correction. Resort to the law produced by the ECtHR of the WTO’s Dispute Settlement System permits ISDS arbitrators to “borrow” not only those institutions’ respective case law, but also their “more legitimate” adjudicators and their presumptively better reasoned judgments, along with the de facto correction systems in place in both of those regimes.