International Investment Law

PUBLICATIONS

Law Review Articles

Investor-State Arbitrators' Duties to Non-Parties - Duke Journal of Comparative & International Law (2021)

Arbitrators in investor-state disputes plainly owe duties to the parties. They are appointed to do a job and they must do that job and do it well: competently, diligently, ethically, expeditiously, fairly, impartially and independently, and properly. They must act with sound judgment, due care, and an open mind.

But do investor-state arbitrators also owe duties to anyone else? If so, what duties do they owe and to whom? From where do such duties originate? Given that party autonomy is a hallmark of arbitration, may duties to non-parties ever prevail over the will of the parties? How are such duties enforced? And, what does the existence of duties to non-parties mean for the system of international investment arbitration?

Investment arbitration was born from a party-centric tradition. But it has become clear that tribunal rulings affect non-parties. Scrutiny is needed for the responsibilities the arbitrators owe those outside the room.

This article explores this less-trodden terrain. It begins by establishing a beachhead – a clear example of a duty to a non-party, as a proof of concept – before moving into rougher territory. Thus, it opens with an illustration of a duty created by the treaty establishing the International Centre for Settlement of Investment Disputes (“ICSID”): a tribunal must issue a written, reasoned award. After demonstrating that this first duty is owed to ICSID itself as an institution (as well as to the parties), the article adds other duties that investor-state arbitrators owe to arbitral institutions and to non-party participants in investment cases, including other states and non-government organizations. It then introduces the concept of systemic duties, which arbitrators owe not to particular persons, but to the creators of the investment arbitration system (states) and its ultimate beneficiaries (the global public). Finally, the article discusses how recognizing duties to non‑parties informs a proper understanding of the investment arbitration system and may help improve that system.

Salini's Nature: Arbitrators' Duty of Jurisdictional Policing - Journal of Law and Practice of International Courts and Tribunals (2018)

This article examines the duty of jurisdictional policing that Salini v. Morocco inferred from the ICSID Convention. According to Salini, ICSID arbitrators must determine whether a dispute arises from an “investment” that satisfies an objective definition of that term, regardless of the subjective definition used by the parties to a case. Salini thus suggests that this duty cannot be waived or varied by the parties. Its proponents claim that Salini’s duty serves ICSID’s vital institutional interests. Moreover, ICSID can enforce Salini’s duty. Taken together, these considerations signal that Salini’s duty is owed not only to the parties to the case but also to ICSID itself as an institution. As Salini migrates beyond ICSID to other investor-state tribunals, however, the nature of this duty may be revealed as not only institutional but systemic – a duty inherent in the investor-state arbitrators’ function that serves the interests of the investor-state dispute system.

Microinvestment Disputes - Vanderbilt Journal of Transnational Law (2012)

Salini v. Morocco sparked one of the liveliest controversies in the dynamic field of international investment disputes. Salini held that the word “investment” in the Convention establishing the International Centre for Settlement of Investment Disputes (ICSID), although undefined, has an objective meaning that limits the ability of member states to submit disputes to ICSID arbitration. The Salini debate is central to this field because it shapes the nature, purpose, and volume of ICSID arbitration—and also determines who gets to decide those matters. In particular, Salini’s decision to include “a contribution to development” as an element of its objective definition of investment transformed development promotion from a generalized goal of ICSID as an institution into a jurisdictional requirement for each case. This Article introduces the concept of a microinvestment dispute, which focuses attention on small investments giving rise to ICSID cases. The microinvestment lens reveals the failings of Salini’s contribution to the development prong. By conditioning ICSID jurisdiction on an individualized showing of such a contribution, this prong disproportionately burdens microinvestors, inhibiting their access to ICSID despite the fact that the drafters of the ICSID Convention specifically rejected a minimum size requirement. In so doing, the development prong also limits ICSID’s value to those who need it most. In the name of promoting development, Salini may well undercut it.

Short Articles

ICSID Jurisdiction: Consent, Nature of Investment, and Nationality - ICC Business Guide to Trade and Investment (2018)

This chapter explains the rules defining the kinds of cases that may be brought to investor-state arbitration under the ICSID Convention. It concludes by discussing how jurisdictional rules reflect the values of the investor-state system of dispute settlement, including the centrality of consent, promoting development, and making neutral and effective international adjudication open to private persons. It suggests that ICSID has been a “diagonal” institution, focused on disputes between states and nationals of other states, it could be adapted to add a “vertical” element for those states that may wish to make it available for disputes initiated by their own nationals.

International Adjudication of Land Disputes: For Development and Transnationalism - Law and Development Review (2014)

This short article offers two observations about international adjudication of land disputes. First, the article shows that such adjudication is intended to further development, but that this goal is served better, if counter-intuitively, by rejecting the so-called Salini contribution-to-development test in favor of case-by-case adjudication on the merits. Second, the article locates such adjudication within the modern trend toward transnationalism, a trend that unites international investment law with human rights law. In light of these observations, the article concludes that international adjudication of land disputes may contribute to such human values as development, human rights, and the rule of law.

Introduction, Special Issue - Arbitration in Africa - Transnational Dispute Management (2016)

This is the introductory essay by the co-editors of a special issue of Transnational Dispute Management about international arbitration in Africa. The essay provides an overview of the subject matter and introduces the other 28 articles that make up the special issue. The special issue addresses Africa's impact on international arbitration, investment treaty arbitration, the Africa-Asia nexus, international arbitration in the energy and natural resources sector, and regional and national developments (notably in South Africa and the OHADA region).

The Ponderosa Claim: OPIC Concludes that Argentina Violated International Law - Transnational Dispute Management (2005)

In 2005, the U.S. Overseas Private Investment Corporation (“OPIC”) determined that the Government of Argentina (the “GOA”) violated international law in its response to the 2001 financial crisis, by abrogating key provisions of the license that it had granted to operate the major natural gas pipeline in southern Argentina. This case note situates the OPIC determination with the contemporaneous investor-state arbitral claims brought by private investors directly against the GOA pursuant to the terms of a number of Argentina’s Bilateral Investment Treaties (“BITs”), and then offers several observations about the relationship between BITs and OPIC’s political-risk-insurance (“PRI”) in the modern scheme of international investment law.

Presentations

CFIUS Introduction - Dacheng law firm (2023)

These are the slides for a webinar presentation that I gave to introduce the Committee on Foreign Investment in the US (CFIUS), with particular attention to issues concerning Chinese investment in the US. The presentation was graciously organized and translated into Chinese by Li Li of the Dacheng law firm.

CFIUS Overview, Trends & Recent Changes - Beijing Arbitration Commission / Beijing International Arbitration Center (2019)

These are the slides accompanying a lecture I gave in Beijing on March 4, 2019. The lecture introduces the Committee on Foreign Investment in the United States (CFIUS), which reviews inbound investment into the US for national security concerns. The lecture focuses on recent trends and developments, especially controversies about outbound investment from China and CFIUS's new pilot program, which went into effect in November 2018 to implement a new law (FIRRMA) enacted in August 2018. The full text of the lecture is not available, but questions may be directed to the author. A longer version of the lecture is available on this website with more details about CFIUS and China-related controversies, but it was delivered in July 2018, before the enactment of FIRRMA and the creation of the pilot program.

CFIUS Introduction and Trends - International Law Institute (2018)

These are the slides that accompanied a lecture I gave introducing the Committee on Foreign Investment in the United States (CFIUS), which reviews inbound investment into the US for national security concerns. The lecture introduces CFIUS: its purpose, membership, history, governing statutes, process, and results. The lecture also focuses on recent trends and developments, especially controversies about outbound investment from China and the passage of a law (FIRRMA) amending the CFIUS process and CFIUS's initial implementing regulations. The full text of the lecture is not available, but questions may be directed to the author.

A Question of Independence - University of Bedfordshire (2016)

These are the slides for a presentation I gave at the University of Bedfordshire Conference on “Rebalancing International Investment Agreements in Favour of Host States: The Case for an International Investment Court,” 29 June 2016.

The case for investment arbitration rests largely on a claim of independence – on the view, that is, that a dispute between a private party and a national government should be heard before an independent tribunal rather than the national courts. This view of independence lies at the heart, for example, of ICSID’s “anational” system.

Perhaps ironically, then, the case for replacing investment arbitration with an international investment court rests largely on the view that the present arbitral system is insufficiently independent. The question of independence is thus central to the debate over whether to establish an investment court.

This presentation analyzes the European proposal for an Investment Court from the perspective of independence and raises the possibility that the case against investment arbitration may lie in too much independence rather than too little.

Investor-State Arbitration in Sub-Saharan Africa - Penn State International Arbitration Day (2016)

The Dispute Resolution Interest Group and the Africa Interest Group of the American Society of International Law co-sponsored a daylong conference on March 11 on “The Future of International Arbitration in Africa.” The conference was also co-sponsored by Penn State and Greenberg Traurig, and it was hosted by the Washington office of Greenberg Traurig. Video of the conference is available at https://pennstatelaw.psu.edu/news/experts-around-world-discuss-international-arbitration-africa-penn-state-law-event.

The conference included a panel discussion about Foreign Investment and Investment Arbitration in Africa. I moderated the panel, made introductory remarks about "Investor-State Arbitration in Sub-Saharan Africa" (starting at 0:00:01), and spoke about "Transnational Governance: The Zimbabwe Farm Cases" (starting at 1:07:20). The panel also included remarks by Deborah Brautigam about Chinese investment in Africa, Uché Ewelukwa about arbitration of disputes concerning Chinese investment in Africa, and Alexandra Meise about political trends concerning investment arbitration in Africa. Video of the panel is available at: http://mediasite.dsl.psu.edu/Mediasite/Play/1214820d03fa45f786118e389248fb981d.

Transnational Governance: The Zimbabwe Farm Cases - Penn State International Arbitration Day (2016)

The conference included a panel discussion about Foreign Investment and Investment Arbitration in Africa. I moderated the panel and spoke about "Transnational Governance: The Zimbabwe Farm Cases." Video of the panel is available at: http://mediasite.dsl.psu.edu/Mediasite/Play/1214820d03fa45f786118e389248fb981d (starting at 1:07:20). Attached here are the Powerpoint slides for these remarks.

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Book Launch Panel re: Challenges and Recusals of Arbitrators and Judges in International Courts and Tribunals - ICSID Headquarters (2015)

The American Society of International Law (ASIL) has posted on its website the video of a book launch that the ASIL Dispute Resolution Interest Group co-sponsored with Young ICSID. The book launch celebrated the publication of Challenges and Recusals of Judges and Arbitrators in International Courts and Tribunals, edited by Chiara Giorgetti. Speakers included Chiara Giorgetti, John Crook, Janet Whittaker, Andrea Carlevaris, and Luke Sobota. I moderated the panel (remarks beginning at 0:01:52), and Marco Montañés-Rumayor of ICSID made some introductory remarks. The World Bank hosted the book launch at its headquarters in Washington, DC, in December 2015. The video is available here: https://www.asil.org/resources/asil-event-videos.

Justice and Investment Arbitration - International Law Association (British Branch) (2015)

Investment arbitration is rife with questions about justice. For example: Is it just to allow foreign investors to bring arbitral claims against states – especially when neither domestic investors nor persons other than investors aggrieved by state actions have any comparable access to arbitration? Do investment tribunals do justice between the parties? Do investment tribunals do justice to nonparties and, especially, the public interest? Are the particular forms and procedures of investment arbitration just?

This talk argues that investment arbitration affords a valuable mechanism for access to justice in a world of often imperfect national courts. Nevertheless, investment arbitration is open to criticism that it unjustly limits such access to justice. For example, in an influential op-ed condemning investment arbitration, Senator Elizabeth Warren repeatedly highlighted that the main users of such arbitration are “multinational corporations,” once going so far as to say that access to investment arbitration is limited to “only international investors, which are, by and large, big corporations.”

It is possible, however, to defeat the objection that investment arbitration unjustly exists only (or even largely) for the benefit of large, foreign corporations. In one recent article (Law and Development Review 2014, http://works.bepress.com/perry_bechky/5/), I argued that similarities between concerns central to investment and human rights cases warrant convergence between the two adjudicatory regimes, as suggested, for example, by the fact that the European Court of Human Rights hears property cases. In another recent article (Vanderbilt Journal of Transnational Law 2012, http://works.bepress.com/perry_bechky/1/), I criticized the so-called “Salini test” for jurisdiction on the ground that it unjustly limits access to investment arbitration by placing a special burden on smaller businesses.

This talk builds on my prior work by proposing a small claims facility for the International Centre for Settlement of Investment Disputes (ICSID). It describes how such a facility might work and why it furthers the cause of access to justice. Importantly, it also discusses how such a facility (like other small claims mechanisms) might create tensions with other justice-based concerns, such as due process for the parties and concern for the public impact of investment arbitration, and how to manage such concerns to find a healthy balance. This talk is timely because the Secretary-General of ICSID has said that she is working to propose a small claims mechanism.

I presented this talk on 30 May 2015 at the University of Essex at the annual meeting of the British Branch of the International Law Association. It is a work in progress and your comments are welcome. The Powerpoint slides accompanying the talk may be downloaded here.