Presentation on theme: "OUP Investment Claims Webinar Series Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Moderator: Ian Laird Speakers: Andrea Bjorklund,"— Presentation transcript:
OUP Investment Claims Webinar Series Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Moderator: Ian Laird Speakers: Andrea Bjorklund, Todd Weiler, Frédéric G. Sourgens and Borzu Sabahi 20 October 2014, 4pm (GMT), 11am (EST)
OUP Investment Claims Webinar Series OUP Investment Claims Webinar Series, Ian A. Laird, 20 October 2014 2 Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Ian A. Laird Partner, Crowell & Moring LLP, Washington, DC Editor-in-Chief and Co-founder of OUP’s InvestmentClaims.com Adjunct Professor – Georgetown University Law Center, and Columbia Law School Co-Director, International Investment Law Center, International Law Institute, Washington, DC
www.investmentclaims.com OUP Investment Claims Webinar Series, A. Laird, 20 October 2014 3 A module of Oxford Reports on International Law (ORIL) Founded in 2008 Investment Claims (IC) is an acclaimed service for both practitioners and academic users. Regular updates mean that subscribers have access to a fully integrated suite of current and high quality content including: Arbitration awards and decisions with peer-reviewed case reports and analysis Bilateral investment treaty sets Multilateral treaties Investment treaty overviews from expert correspondents Key monographs Journal and yearbook articles Arbitral rules National legislation English translations of key portions of non-English decisions
OUP Investment Claims Webinar Series OUP Investment Claims Webinar Series, Ian A. Laird, 20 October 2014 4 Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? ‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean -- neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master -- that's all.’ Lewis Carroll, Through the Looking Glass (1872).
OUP Investment Claims Webinar Series OUP Investment Claims Webinar Series, Ian A. Laird, 20 October 2014 5 Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331. Article 31 - General rule of interpretation 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
A Nascent Common Law The Process of Decision making in International Investment Arbitration Freddy Sourgens October 20, 2014
Problem 1: VCLT Formally Inapplicable A Nascent Common Law; Sourgens, 20 October 2014 7 Between States No Corporates Allowed Sovereign Equality & Objective Meaning Textualism
Problem 2: Investors Are Third Parties A Nascent Common Law; Sourgens, 20 October 2014 8 Arbitration Without Privity Contract Law And Suicide Pacts VCLT And Allocative Mechanisms Need Reasonable Middle Ground
Formal Answer: IIAs Are Unilateral Acts A Nascent Common Law; Sourgens, 20 October 2014 9 Formal Dimension – Elevation of Investor Practical Implications – Vesting Mobil: No Restrictive Interpretation
Functional Answer: Reliance Redivivus A Nascent Common Law; Sourgens, 20 October 2014 10 Go Beyond Text Objective & Subjective State Context Objective & Subjective Investor Context Weigh Reciprocal Reliance Interests
Operational Coda: Common Law Rising A Nascent Common Law; Sourgens, 21 October 2014 11 Persuasive Precedent Facts Over Text –Interested in more? Frederic Gilles Sourgens, A Nascent Common Law (Brill/ Nijhoff: 2015)
The Place for Historical Analysis in Investment Treaty Interpretation Todd Weiler, SJD Barrister & Solicitor PhD Candidate, Western University Department of History, Canada 20 October 2014
The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014 How to Interpret Investment Treaties 13 Should [must] the VCLT serve as “Applicable Law”? Investment treaties form part of the corpus of public international law (whether any explicitly say so or not). Too many investment treaty tribunals have said, on too many occasions, that VCLT Articles 31 & 32 should be applied for one to seriously expect future tribunals to choose a different path. On the other hand, the VCLT approach is supposed to reflect the customary international law rules of interpretation. Since these rules have been applied in an incredibly uneven way, there may still be room for Freddy’s reclamation project!
The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014 Where Does Historical Analysis Fit? 14 How to Placate Your Inner Positivist… VCLT Article 31: 1.A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose … 3. There shall be taken into account, together with the context: … (c) any relevant rules of international law applicable in the relations between the parties. Believe it or not, this provision was actually intended to cover the interpretative principle of contemporaneity. Before construing any provision, one must consider the specific, historical, context within which the treaty was concluded.
The Raging Bugbear of Indeterminacy 15 A Necessary, but Regrettable, Element of Interpretation? Textual indeterminacy always provides an open door to ideological freelancing on the part of well-meaning arbitrators Ideology is best identified as using statist — liberal axis Ideological freelancing converts ostensible fidelity to the treaty text into fidelity to any given arbitrator’s ideological predilections. In other words, the devil really can hide in the details (where “details” means: Interpretative discretion caused by indeterminacy. The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014
The Methodological Antidote 16 Putting the First Principles of Public International Law to Work Introducing the Ying & Yang of Orthodox Public International Law: Sovereign Equality Good Faith And international investment law’s grundnorm: When expressed positively: Equality When expressed negatively: Non-discrimination Add a dash of the correct interpretative method, historical analysis, and you’re good to go! The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014
A Curative for the Worst Kind of Inconsistency Neutrality in Application Historical context involves time and place. Here are some possible examples: For Western countries: Older BITs more likely to have a liberal than statist context. For former Soviet and Eastern Bloc countries: Older BITs more likely to have a statist than liberal context. For the US and Canada: More recent treaties were concluded in a more statist context. To apply the methodology correctly, one needs the right evidence.
The Vienna Convention and Investment Arbitration Borzu Sabahi October 20, 2014 Dr. Borzu Sabahi practices international arbitration in the law firm of Curtis Mallet-Prevost Colt & Mosle LLP. He is also: an Adjunct Professor at Georgetown and Columbia Law Schools, Co-Director of the International Investment Law Center of the ILI, and Editor of Oxford’s Investment Claims. Email: firstname.lastname@example.org@curtis.com Disclaimer: views expressed are only those of Mr. Sabahi and cannot be attributed to Curtis Mallet or its clients.
The VCLT: A Flexible Tool VCLT and Investment Arbitration Borzu Sabahi October 20, 2014 19 Flexibility –VCLT Articles 31 & 32 have it all: textualism (ordinary meaning), purpose (objective and purpose), context, intentions, travaux preparatoire, and of course good faith –VCLT is used in all international law disciplines Growth of international courts? Fragmentation? Role of interpreters? Precedent?
VCLT State-to-State Paradigm VCLT and Investment Arbitration Borzu Sabahi October 20, 2014 20 Using VCLT in practice? –Systematic approach? –When to move from ordinary meaning to secondary sources, e.g., travaux? –Ambiguity? Any threshold? –Role of intentions of drafters? VCLT Art. 31(4) VCLT’s State-to-State paradigm –Who’s intentions?
VCLT- Examples of Possible Shortcomings VCLT and Investment Arbitration Borzu Sabahi October 20, 2014 21 (1) Joint Statements regarding meaning of treaty provisions? –VCLT 31(2): agreement or instrument in connection with conclusion of a treaty ? –In a pending case? E.g., the 2001 FTC Notes of Interpretation –Did VCLT drafters contemplate this? –Solution: caution. See Sir Franklin Berman’s Dissenting Opinion in Industria Nacional de Alimentos, S.A. et al v. Peru, ICSID Case No. ARB/03/4, Annulment Proceedings, September 5, 2007
VCLT-- Examples … (cont.) VCLT and Investment Arbitration Borzu Sabahi October 20, 2014 22 (2) What about unilateral statements to shed light on the meaning of BITs? (3) What about the positions taken by States in investment disputes? subsequent practice? (4) What about a decision by Competent Authorities under NAFTA Art. 2103(6) that a measure is not an expropriation? Conclusion VCLT despite the deficiencies remains a great tool Some effort however must be made to find out how VCLT would or should apply in investor State arbitration
Treaty as Contract? What difference does the VCLT Make? Andrea K. Bjorklund, McGill University Faculty of Law 20 October 2014
Applicable Law in Investment Arbitration Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 24 “A Tribunal established under this Section shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.” (NAFTA Article 1131(1))
Applicable Law in Investment Arbitration Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 25 The Vienna Convention on the Law of Treaties is the applicable law for the interpretation of the treaty itself –Conventional Law –Customary International Law
Applicable Law in Investment Arbitration Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 26 The claimant has an arbitral contract with the respondent –Does the VCLT apply to that contract as well? Yes, insofar as the terms of that contract are dictated by the language of the treaty
The Vienna Convention in Practice Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 27 Aims of treaty interpretation To ascertain the intention of the parties? To ascertain the meaning of the text? To ascertain the object and purpose of a treaty and then to interpret it in that light? All of the above?
The Vienna Convention in Practice Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 28 The stated general rule of interpretation can be summarized as follows: the text must always be taken as the starting point. As such, no doctrine of restrictive or extensive interpretation of the text of the treaty should prevail. Interpretation of the text should be based on an “ex ante neutral approach”. Laurence Boisson de Chazournes (dissenting), Garanti Koza LLP v. Turkmenistan, ICSID Case No. ARB/11/20 (3 July 2013) (internal citations omitted)
Treaty as Contract Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 29 “In answering this question [who, court or arbitrator, bears primary responsibility for interpreting and applying Article 8’s local court litigation provision], we shall initially treat the document before us as if it were an ordinary contract between private parties. Were that so, we conclude, the matter would be for the arbitrators. We then ask whether the fact that the document in question is a treaty makes a critical difference. We conclude that it does not.” U.S. Supreme Court BG Group Plc. v. Republic of Argentina 572 US ____ (2014)
Treaty as Contract Presentation name Presenter Name and Date 30 “The Court begins by deciding a different case, “initially treat[ing] the document before us as if it were an ordinary contract between private parties.” Ante, at 6. The “document before us,” of course, is nothing of the sort. It is instead a treaty between two sovereign nations: the United Kingdom and Argentina. No investor is a party to the agreement.” “The law of international arbitration and domestic contract law lead to the same conclusion” BG Group Plc. v. Argentina, C.J. Roberts, dissenting 572 US ____ (2014)
Treaty as Contract Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014 31 “for our goal here – when faced with an agreement’s inevitable silence – is to find the appropriate default rule with respect to the probable ex ante understanding of contracting parties.” (discussing meaning of the local-litigation requirement in the Argentina-UK BIT) Alan S. Rau, “Crossing the Threshold: Arbitral Jurisdiction After BG Group” (Melanges en l’honneur de Pierre Mayer (forthcoming 2015))
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