Hunting the standard of compensation – intellectual property, Chorzów Factory and investments: a response

While the debate on intellectual property and international investment law is relatively young, the role of historical cases will be important in offering some interpretative analysis. Due to the niche nature of both areas of law, where, often times, the legal luminaries found in both areas often speak past each other, in an earlier issue of this journal I offered an interpretative history of Chorzów Factory as an example of early case law by an international court illustrating the origins of the ISDS involving intellectual property. As with any interpretation, there are bound to be opposing views or explicit endorsement, but whatever the merits, that interpretative history has initiated a debate in the pages of this journal. That debate is in part, a response to my original analysis, to which I offer a response. This response is to endorse the fact that additional information has come forward that will enrich the debate on Chorzów Factory and its connection to intellectual property. Moreover, this response argues that the reply misses the point regarding the formal connection of international law to intellectual property in ISDS, a connection that I attempted to demonstrate through the example of the Chorzów Factory case – where a legal fight in the 1920s over nitrate, other chemical production and ownership still continue to be of relevance to international law.

Investor Due Diligence and Legitimate Expectations

This article examines the significance of investor due diligence in the context of a claim that a host State has breached its obligation to provide fair and equitable treatment (FET). Despite increasing reliance on due diligence exercises, there are considerable differences in how tribunals understand and use such exercises. These differences are related to different visions of the function and future of international investment law. After exploring the different approaches that are taken, this article will argue that the most coherent approach is to treat investor due diligence as merely a technique for assessing investor reasonableness and prudence, rather than a strict requirement.

Harmonizing Commercial and Investment Arbitration: Conflict Dynamics

This article provides an independent analysis of the scope and extent of arbitration under investment agreements, and the implications of the possible convergence in the process of harmonization of international commercial arbitration law.The successful settlement of any dispute depends on the compatibility of the nature of the dispute with the technique to which it is submitted for resolution. In the last decade, there was a constant increase in the number of disputes that were subjected to arbitration and a major chunk of those disputes covered a comparatively new but known area called international investment law. With economic globalization allowing the free flow of foreign direct investment (FDI) in and out of a country, the existing regulatory framework in international law to standardize investment liberalization is often seen as ineffective, hence the consequent disputes. Here, arbitration offers a suitable framework for the amicable settlement of commercial disputes covering investment agreements with the assistance of bilateral or multilateral agreements between the states. Preferential trade agreements pertaining to investment often contain an arbitration clause for the settlement of future disputes between parties. At this juncture, one may find that there exists a fundamental dilemma in ascertaining the true nature of investment arbitration and how it is different from commercial arbitration. For example, the protection being offered to human rights under the purview of investment arbitration may generate doubts in the minds of investment arbitrators. In commercial arbitration, divergences in a pluralistic order become particularly relevant whereas the diverse legal cultures supported by individual constitutional frameworks have a direct impact on investment arbitration due to their practical application. The article also discusses the need for harmonized rules governing arbitration procedures while maintaining the functional dissimilarities between commercial and investment arbitration.

Holding Transnational Corporations Accountable for Environmental Harm Through Counterclaims in Investor-State Dispute Settlement: Myth or Reality?

Considering the imperative need to protect our environment, the present article begins by highlighting the absence of a comprehensive international framework under which transnational corporations may be held accountable for environmental harm. Drawing from the successful decisions on environmental counterclaims in Perenco v Ecuador and Burlington Resources v Ecuador, this article thus argues that this legal void could be filled by holding transnational corporations accountable for environmental harm under international investment law. However, the practice of environmental counterclaims as they have materialised in these recent decisions emphasises the existence of a gap between theory and reality and, thus, their limited chances of success. It is nevertheless suggested that, in the context of current debates surrounding an investor-State dispute settlement reform, States hold the cards to ensure that transnational corporations are held accountable for environmental harm under international investment law.

Does International Law Need a Conscience? Evaluating the India–South Africa Proposal to Suspend TRIPS Obligations and the COVID-19 Vaccines

There is undoubtedly a consensus within the international community that ‘vaccine nationalism’ is an undesirable state of affairs. However, states are self-interested actors and in the absence of constraints imposed by international economic law this pursuit of rational self-interest is likely to result in an outcome that is unjust on a global scale. The recent proposal by India and South Africa to suspend TRIPS obligations for the duration of the COVID-19 pandemic has been rejected within the WTO. This proposal constitutes a recognition of the inadequacies surrounding the TRIPS compulsory licensing scheme. Yet, the immersion of intellectual property law within international investment law together with the proliferation of free trade agreements containing TRIPS-plus obligations would likely have made such a proposal unworkable. We argue that the fundamental problem is that the TRIPS Agreement lacks a defined concept of conscience that governs both its operation and interpretation. Such a principle exists in the common law within the field of private law. The principle, in its various doctrinal iterations, navigates the tensions between different parties while serving an underlying purpose of justice within the common law. It has much to offer international intellectual property law.

Investor-State dispute settlement (ISDS) cases and India: affronting regulatory autonomy or indicting capricious state behaviour?

Purpose The dominant narrative in the investor-State dispute settlement (ISDS) system is that it enables powerful corporations to encroach upon the regulatory power of developing countries aimed at pursuing compelling public interest objectives. The example of Phillip Morris, the tobacco giant, suing Uruguay’s public health measures is cited as the most significant example to prove this thesis. The other side of the story that States abuse their public power to undermine the protected rights of foreign investors does not get much attention. Design/methodology/approach This paper reviews all the ISDS cases that India has lost to ascertain the reason why these claims were brought against India in the first place. The approach of the paper is to study these ISDS cases to find out whether these cases arose due to abuse of the State’s public power or affronted India’s regulatory autonomy. Findings Against this global context, this paper studies the ISDS claims brought against India, one of the highest respondent-State in ISDS, to show that they arose due to India’s capricious behaviour. Analysis of these cases reveals that India acted in bad faith and abused its public power by either amending laws retroactively or by scrapping licences without following due process or going back on specific and written assurances that induced investors to invest. In none of these cases, the foreign investors challenged India’s regulatory measures aimed at advancing the genuine public interest. The absence of a “Phillip Morris moment” in India’s ISDS story is a stark reminder that one should give due weight to the equally compelling narrative that ISDS claims are also a result of abuse of public power by States. Originality/value The originality value of this paper arises from the fact that this is the first comprehensive study of ISDS cases brought against India and provides full documentation within the larger global context of rising ISDS cases. The paper contributes to the debate on international investment law by showing that in the case of India most of the ISDS cases brought were due to India abusing its public power and was not an affront on India’s regulatory autonomy.

Protecting concessionary rights: General principles and the making of international investment law

This article engages with the history of international investment law in the first half of the twentieth century. It traces how international lawyers inscribed their vision of an international legal order protecting private property of Western companies against attempts at nationalization in the wake of socialist revolutions and the decolonization of large parts of the world. The article focuses on the role of ‘general principles of law as recognized by civilized nations’ as building blocks for an international legal order today called international investment law. Rather than describing a direct line between contemporary standards of protection and the invocation of general principles, the article develops conditions of possibility for the emergent field of international investment law. These conditions are located both in arbitral practice, as well as in international legal scholarship of the early twentieth century. Based on the analysis of such arbitrations over disputes resulting from concession agreements and scholarly writings in the interwar period, the contribution draws out the modes of authorization upon which the legal claims advanced by international lawyers rested. At the heart of the vision were ideas of ‘modernity’, ‘civilization’, ‘equity’, and ‘justice’ that enabled a hierarchization of difference, locating Western claims to legality above rivalling claims of socialist and ‘newly independent’ states. These ideas ultimately constituted the paradox of a ‘modern law of nature’ that claimed timeless universality while authorizing the ordering of foreign property in line with Western conceptions of modernity.