Applicable law in investor-state arbitration : the interplay between national and international law

343 Pages·2013·2.33 MB·English

by  Hege Elisabeth Kjos

OXFORD MONOGRAPHS IN
INTERNATIONAL LAW
GeneralEditors
VAUGHAN LOWE QC
EssexCourtChambers,LondonandEmeritusFellow
ofAllSoulsCollege,Oxford
PROFESSOR DAN SAROOSHI
ProfessorofPublicInternationalLaw
attheUniversityofOxford
andSeniorResearchFellowofTheQueen’sCollege,Oxford
STEFAN TALMON
DirectoroftheInstituteofPublicInternationalLaw
attheUniversityofBonnandSupernumeraryFellowofStAnne’sCollege,Oxford
–
Applicable Law in Investor State Arbitration
OXFORD MONOGRAPHS IN INTERNATIONAL LAW
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international law. Topics that are given particular prominence are those which, while of
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Applicable Law in
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Investor State Arbitration
The Interplay Between National and
International Law
HEGE ELISABETH KJOS
1
3
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Acknowledgements
‘International investment law is one of the fastest-growing areas of international law
today. Only a decade ago, the current surge in investor–state arbitrations [...] was
beyondimagination.’1ItwasjustabitmorethanadecadeagothatIwasfortunateto
enter the field of international investment arbitration. The rise in the number of
arbitrations and the accompanying growth in scholarship partly explain the time it
hastakentopresentthisstudy.Relatedly,thefactthatIhavebeenexamininga‘moving
target’hasmadetheprocessmorestimulating.Ifeelprivilegedtobeabletocontinueto
workinthisareathatbringstogethersomanyfacetsofthelaw;the‘fieldtrip’2isnot
over.Inthisrespect,Iamespeciallygratefultobepartoftheproject‘InternationalLaw
throughtheNationalPrism:theImpactofJudicialDialogue’fundedbytheEuropean
Science Foundation as a European Collaborative Research Project in the Social Sci-
ences,asithas allowed me toexplore more deeply the larger theme of this book: the
interactionsbetweenthenationalandtheinternationallegalorders.
There are many to thank now that the book is published. In addition to the great
OUP team and then especially the Monograph Series Editors, Merel Alstein and
Anthony Hinton, I mention in particular André Nollkaemper for believing in the
project and for his sharp guidance; the late Thomas W. Wälde, for giving me confi-
denceandinspiration;andSabineSchlemmer-SchulteandRuthTeitelbaumfortheir
direction and friendship. I am also thankful to the distinguished Members of the
DoctoralCommittee3andAntonioParrafortheirvaluablecommentsandsuggestions
tothedoctoralthesiswhichformsthebasisofthisbook;aswellasNwamakaOkany,
YannickRadi,andAnthonyBattah,especially,forourdiscussions.Inadditiontothe
EuropeanScienceFoundation,Igratefullyacknowledgethe(financial)supportofthe
NetherlandsOrganizationforScientificResearch;theHagueAcademyofInternational
Law,CentreforStudiesandResearchinInternationalLawandInternationalRelations;
andtheSchoolofInternationalArbitration,QueenMary,UniversityofLondon.
WarmthanksarealsoduemyfriendsattheUniversityofAmsterdamformakingme
feel at home in the Netherlands and convincing me that I have the world’s best
colleagues.NexttoDanielleObradovic,ThomasVandamme,MartinevanTrigt,Jim
Mathis, Ronald van Ooik, Betty Kremer, Willem van Merle, Annemarieke Vermeer-
Künzli,IngoVenzke,MachikoKanetake,EstherKentinandHeatherKurzbauer;these
includemybrilliantfellowpionieren:GeranneLautenbach,WardFerdinandusse,Jann
Kleffner,NikosLavranos,JanneNijman,andFabiánRaimondo.
Tootherdearfriendsinvariouscornersoftheworld:thankyouforaddingsparkleto
mylife,eachinyourownway.
IwouldliketodedicatethisbooktomyfamilyinNorwayandtheNetherlands,and
thenespeciallytomyhusbandBertil—Icouldnothavewishedforabetterpartnerand
1 S.W.Schill,BookReview,PrinciplesofInternationalInvestmentLaw(2009)20(2)Eur.J.Int’lL.
471(reviewingR.DolzerandC.Schreuer,PrinciplesofInternationalInvestmentLaw[Oxford,Oxford
University Press, 2008]). Cf. A. Diehl, The Core Standards of International Investment Protection
(2012),1(‘Littlemorethanadecadeago,investmentarbitrationwasvirtuallyunknownbeyondthe
circlesofthosewhowereinvolvedinthenegotiationofinvestmenttreaties’).
2 SeeChapter8(concludingobservations).
3 CatharinaBrölmann,FilipDeLy,PieterJanKuijper,AndréNollkaemper,ChristophSchreuer,
NicoSchrijver,OleSpiermann,andErikadeWet.TheHonorableCharlesN.Browerservedinthe
roleofindependentexpert.
vi Acknowledgements
afatherforourdaughters;tomyMammaandrolemodelKari,foreverything,always;
and to my Pappa, Per-Arne, for giving me perspective and love. Last but not least,
IdedicateittoNoraSofieandKariHelenaformakingmesmileinsideandout,each
andeveryday.Iloveyou.
HegeElisabethKjos,Amstelveen,18September2012
Table of Contents
TableofCases ix
TableofLegislation xxi
ListofAbbreviations xxviii
1. GeneralIntroduction 1
1. MotivationsfortheStudy 1
2. TheScopeofandTerminologyUsedintheStudy 11
3. TheMethodandPlanoftheStudy 16
2. TerritorializedandInternationalizedArbitrationTribunals 19
1. Introduction 19
2. FeaturesoftheArbitralProcess 20
3. TerritorializedTribunals 23
4. InternationalizedTribunals 44
5. GeneralConclusions 59
3. Choice-of-LawRules 61
1. Introduction 61
2. TheLinkageBetweenLexArbitriandChoice-of-LawMethodology 62
3. Choice-of-LawRules 67
4. GeneralConclusions 103
4. TheScopeoftheArbitrationAgreement:ClaimsandCounterclaims
ofaNationaland/orInternationalNature 105
1. Introduction 105
2. Characterization:TheNationalorInternationalNatureofClaims 106
3. TheScopeoftheArbitrationAgreement:Nationaland/or
InternationalClaims 112
4. CounterclaimsbyHostStates 128
5. GeneralConclusions 154
5. ThePrimaryApplicabilityofNationalLawandtheRoleof
InternationalLaw 157
1. Introduction 157
2. ReasonsforthePrimaryApplicabilityofNationalLaw 158
3. TheRoleofInternationalLawwhenNationalLaw
PrimarilyApplies 181
4. GeneralConclusions 211
6. ThePrimaryApplicabilityofInternationalLawandtheRoleof
NationalLaw 213
1. Introduction 213
2. ReasonsforthePrimaryApplicabilityofInternationalLaw 213
3. TheRoleofNationalLawwhenInternationalLaw
PrimarilyApplies 240
4. GeneralConclusions 269
viii TableofContents
7. ConcurrentApplicationofandReferencetoNationaland
InternationalLawinCaseofConsistency 271
1. Introduction 271
2. ArbitralPractice 275
3. GeneralConclusions 293
8. ConcludingObservations 295
Index 303
Table of Cases
ARBITRAL AWARDS
AbaclatandOthers(CaseformerlyknownasGiovannaaBeccaraandOthers)vArgentine
Republic,ICSIDCaseNo.ARB/07/5,DissentingOpinionofProfessorGeorges
Abi-Saab,28October2011 ............................................ 55–6
AbyeiArbitration(GovernmentofSudanvTheSudanPeople’sLiberationMovement/Army),
Award,22July2009 ................................................... 78
ADCAffiliateLimited,ADC&ADMCManagementLimitedvRepublicofHungary,
ICSIDCaseNo.ARB/03/16,Award,2October2006.............166,223,260,265–6
ADFGroupInc.vUnitedStates,ICSIDCaseNo.ARB(AF)/00/1,ProceduralOrderNo.2,
Award,9January2003............................................... 24,31
AdrianoGardellaS.p.A.vRepublicoftheIvoryCoast,ICSIDCaseNo.ARB/74/1,Award,
29August1977...................................................129,288
AESCorporationvTheArgentineRepublic,ICSIDCaseNo.ARB/02/17,Decisionon
Jurisdiction,26April2005...........................................121,241
AESSummitGenerationLimitedandAES-TiszaErömüKft.vHungary,ICSID
CaseNo.ARB/07/22,Award,23September2010............................205–6
AGIPS.p.A.vPeople’sRepublicoftheCongo,ICSIDCaseNo.ARB/77/1,Award,
20November1979 ...........................................71,193,280–1
AguaytiaEnergyLLCvRepublicofPeru,ICSIDCaseNo.ARB/06/13,Award,
11December2008.................................................... 290
AIGCapitalPartners,Inc.andCJSCTemaRealEstateCompanyvRepublicofKazakhstan,
ICSIDCaseNo.ARB/01/6,Award,7October2003........................... 210
AlphaProjektholdingGmbHvUkraine,ICSIDCaseNo.ARB/07/16,Award,
8November2010 .............................................231,239,254
AlsingTradingCo.&SvenskaTändsticksAktiebolagetvGreece,Award,22December1954
(Python,solearb.),23I.L.R.633(1956).................................... 159
AmcoAsiaCorporationandothersvRepublicofIndonesia,ICSIDCaseNo.ARB/81/1,
Award,20November1984;DecisiononAnnulment,16May1986;(resubmittedcase),
DecisiononJurisdiction;Award,5June1990 ............58,84,92,129,152,169,191,
196,209,273,277–8
AmericanBellInternational,Inc.vTheGovernmentoftheIslamicRepublicofIran,
etal.,InterlocutoryAwardNo.ITL41-48-3,11June1984,
6Iran-U.S.C.T.R.74 .....................................69,151,272,291–2
AmericanInternationalGroup,Inc.andAmericanLifeInsuranceCompanyvIslamicRepublic
ofIranandCentralInsuranceofIran,Award,19December1983...............187,234
Amman&WhitneyandMinistryofHousingandUrbanDevelopment(Khuzestan
DepartmentofHousingandUrbanDevelopment),CaseNo.198,ChamberOne,
Order,30January1984................................................. 51
AmocoInternationalFinanceCorporationvIranetal.,PartialAwardNo.310-56-3
(14July1987)....................................................161,234
Anaconda-Iran,Inc.vGovernmentoftheIslamicRepublicofIranandNationalIranian
CopperIndustriesCompany,CaseNo.167,AwardNo.ITL65-167-3,Interlocutory
Award,10December1986,13Iran-U.S.C.T.R.199................. 48,51–2,69,94,
147,167,175–6,263–4
Andersonetal.vRepublicofCostaRica,ICSIDCaseNo.ARB(AF)/07/3,Award,
19May2010........................................................ 268
AryehvIran,Award,25September1997 ....................................... 235
AsianAgriculturalProductsLimited(AAPL)vDemocraticSocialistRepublicofSriLanka,
ICSIDCaseNo.ARB/87/3,Award,27June1990,4ICSIDRep.246(1997).... 78–9,186,
223–4,227,259,263
AtlanticTritonCompanyLimitedvPeople’sRevolutionaryRepublicofGuinea,ICSID
CaseNo.ARB/84/1,Award,21April1986...............................129,180