CETA's Investment Chapter: A Rule of Law Perspective (European Yearbook of International Economic Law, 13)

This book provides a comprehensive account of the CETA Investment Chapter’s ability to overcome the legitimacy crisis facing investment arbitration. To do so, it first examines the root causes behind the legitimacy crisis, ultimately arguing that it reflects a fundamental rule of law crisis within investment arbitration. In particular, it asserts that the normative standpoints of the legitimacy crisis form part of the rule of law, the uniting legal principle from which the legitimacy concerns stem. The book contends that the rule of law is not only the principal normative and causal assumption on which the legitimacy concerns are based, but that it could also be utilized as a platform to evaluate the investment arbitration mechanism in CETA's Investment Chapter. Based on this, the book evaluates CETA's Investment Chapter through the rule of law framework in order to provide a convincing account of the latter's ability to overcome the legitimacy crisis facing investment arbitration. It concludes that CETA's Investment Chapter is unlikely to completely solve the legitimacy crisis simply because it is just a patchwork of reforms rather than a comprehensive reinvention of the substantive and procedural law of investment arbitration. Lastly, the book offers meaningful insights into the way the challenges presented by investment arbitration should be addressed. The book is intended for academics researching international investment law and arbitration as well as for policy-makers focusing on reforming investor-state dispute settlement. Preface 7 List of Treaties, Conventions, Guidelines, and Resolutions 9 Contents 11 Abbreviations 14 Table of Cases 16 Chapter 1: Introduction 20 References 25 Chapter 2: The Backlash Against Investment Treaty Arbitration: Treat the Cause and Not the Symptom 27 2.1 Introduction 27 2.2 Brief Historical Account of Investment Treaty Arbitration 28 2.2.1 Colonial Era 28 2.2.2 Late Nineteenth and Early Twentieth-Century 29 2.2.3 Post-World War II Developments 31 2.2.4 Modern Regime of Investment Treaty Arbitration 32 2.3 Normative Foundations of Investment Treaty Arbitration 36 2.3.1 Preliminary Observations 36 2.3.2 Investment Arbitration as a Private Dispute Settlement Mechanism 39 2.4 The Backlash Against Investment Treaty Arbitration 42 2.4.1 Preliminary Observations 42 2.4.2 Multiple Proceedings and Conflicting Awards 43 2.4.3 Public Interest Concerns 45 2.4.4 Perceived Bias 47 2.4.5 Confidentiality and High Costs 48 2.5 Responses to the Backlash Against Investment Treaty Arbitration 50 2.5.1 The Way Forward 50 2.5.2 Investment Arbitration as a Public Law System 51 2.6 Conclusion 55 References 56 Chapter 3: Investment Treaty Arbitration and the Rule of Law: Tensions and Solutions 63 3.1 Introduction 63 3.2 Historical Origins of the Rule of Law 63 3.2.1 Classical Origins 63 3.2.2 Medieval Period 65 3.2.3 Modern Period 66 3.3 Scope and Content 67 3.3.1 Procedural Aspect of the Rule of Law 67 3.3.2 Substantive Aspect of the Rule of Law 71 3.4 The Rule of Law in the Context of Investment Treaty Arbitration 73 3.4.1 Preliminary Observations 73 3.4.2 Substantive Rule of Law 74 3.4.2.1 Human Rights Principles 74 3.4.3 Procedural Rule of Law 77 3.4.3.1 Transparency and Access to Justice 77 3.4.3.2 Procedural Fairness 80 3.4.3.3 Legal Certainty 83 3.5 Conclusion 88 References 89 Chapter 4: Legal Certainty and CETA: The Fallacy of a Single Treaty As a Solution 94 4.1 Introduction 94 4.2 Investment Protection Provisions 94 4.2.1 Fair and Equitable Treatment 94 4.2.2 Expropriation 99 4.2.3 Most-Favored-Nation Clause 103 4.3 Interpretation of Investment Protection Provisions 105 4.3.1 Vienna Convention on the Law of Treaties 105 4.3.2 Joint Interpretative Declarations 108 4.4 Multiple Proceedings and Conflicting Awards 113 4.4.1 Conflicting Awards 113 4.4.2 Multiple Proceedings 115 4.4.2.1 Consolidation Mechanism 116 4.4.2.2 Other Related Mechanisms 117 4.5 Conclusion 120 References 122 Chapter 5: Human Rights Protection in CETA: More Artificial Than Substantial 126 5.1 Introduction 126 5.2 Jurisdictional Stage 126 5.3 Applicable Law 129 5.3.1 General Observations 129 5.3.2 CETA 132 5.4 Amicus Curiae Briefs 138 5.5 Appellate Mechanism 141 5.6 Conclusion 144 References 146 Chapter 6: Procedural Fairness and CETA: Ghosts of Decades Past 150 6.1 Introduction 150 6.2 Code of Conduct and Enforcement Mechanism 151 6.2.1 IBA Guidelines and Ethics Provisions 151 6.2.2 Enforcement Mechanism 157 6.3 Investment Court System 159 6.3.1 Appointing Mechanism 159 6.3.2 Compensation Scheme 164 6.3.3 Qualification Requirements 166 6.4 Conclusion 167 References 169 Chapter 7: Transparency and Access to Justice in CETA: Issues and Shortcomings 172 7.1 Introduction 172 7.2 Transparency 172 7.2.1 Preliminary Observations 172 7.2.2 UNCITRAL Transparency Rules and Other Related Provisions 174 7.2.3 Amicus Curiae Briefs 178 7.3 Access to Justice 182 7.3.1 Costs and Fees 182 7.3.2 Third-Party Funding 185 7.4 Conclusion 188 References 189 Chapter 8: Conclusion 192