Formal Relevance of the Climate Change International Legal Framework in Investment Treaty Disputes: Defining the System as a Process of Multi(syncretic)lateralization

Restrepo Rodríguez, Tomás

doi:10.1007/978-3-031-18655-4_3

Tomás Restrepo Rodríguez²

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Abstract

Conceptualizing investment treaty law in functional terms as a system stemming from the process of multi(syncretic)lateralization embeds the promotion of the global climate interest within its realm. The point of departure of this assertion is Schill’s refined observations on the multilateralization of the investment treaty law, which reveals how tribunals’ decisions, along with bilateral investment treaty (BIT) drafting techniques, regulate foreign investment in a way that provides a “systemic solution to systemic problems.” As part of such systemic problems, the tension between the global public interest in tackling climate change and the interests of the parties in question in an investment treaty dispute urges a systemic solution that suits the legal framework for the functioning of the global economic system.

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Notes

1.
Schill (2015), p. 1835.
2.
Schill (2009), p 281.
3.
Ibid. p. 280.
4.
Ibid. 281.
5.
Schill (2015), pp. 1834–1835.
6.
Ibid. p. 1834.
7.
Ibid. pp. 1834, 1825.
8.
Ibid.
9.
Ibid. p. 1835.
10.
“Unlike genuinely bilateral treaties, BITs do not stand isolated in governing the relation between two States; instead they develop multiple overlaps and structural interconnections that create a relatively uniform and treaty-overarching legal framework for international investment relations based on uniform substantive and procedural principles with little room for deviation”: Ibid.; 1821.
11.
Ibid. pp. 1830–1834.
12.
Ibid. p. 1835.
13.
Ibid. pp. 1822–1826.
14.
Ibid. pp. 1826–1829.
15.
Ibid. pp. 1829–1834.
16.
Ibid. pp. 1822–1826.
17.
Ibid. p. 1823.
18.
Ibid. p. 1824.
19.
Ibid. pp. 1822–1824.
20.
Ibid. p. 1824.
21.
Ibid. pp. 1826–1829.
22.
Ibid. pp. 1826–1827.
23.
Ibid. p. 1828.
24.
Ibid.
25.
“Tribunals assume a norm creating function in adjudicating investor state disputes (…) employ rationales and argumentative structures that suggest the existence of an overarching body of international investment law that has merely found its expression in bilateral treaty relationships”: Schill (2009), p. 278.
26.
Schill (2015), p. 1829.
27.
Ibid. p. 1833.
28.
Ibid. pp. 1829–1830.
29.
Ibid. pp. 1830–1834.
30.
Ibid. p. 1831.
31.
Ibid. p. 1830.
32.
Ibid. p. 1831.
33.
Ibid. p. 1829.
34.
Ibid. p. 1833.
35.
Di Benedetto (2013), pp. 41–44.
36.
Schill (2009), p. 280.
37.
Ibid. p. 281.
38.
Di Benedetto (2013), p. 41.
39.
Ibid.
40.
Schill (2009), pp. 280–281.
41.
Di Benedetto (2013), p. 42.
42.
Ibid. p. 42.
43.
Ibid. p. 43.
44.
Ibid. p. 42.
45.
Ibid. p. 43.
46.
Schill (2009), p. 281.
47.
Ibid. pp. 280–281.
48.
Schill (2015), p. 1836.
49.
Di Benedetto (2013), p. 41.
50.
Schill (2015), p. 1835.
51.
Luhmann (2009), p. 180.
52.
Ibid. pp. 181–182.
53.
Ibid. p. 182.
54.
Ibid. p. 183.
55.
Ibid.
56.
“In each of its own operations it has to reproduce its own operational capacity”: Ibid. p. 184.
57.
Ibid. p. 185.
58.
Schill (2009), p. 280.
59.
Luhmann (2009), p. 184.
60.
Schill (2009), p. 280.
61.
Schill (2015), p. 1835.
62.
Schill (2009), p. 280.
63.
Schill (2015), p. 1825.
64.
Ibid.
65.
“(…)enables market to unfold” (…) “but have a broader function in creating institutions that back up an international market economy in which capital flow can in an increasingly liberal fashion between different national economies to wherever it is allocated most efficiently” (…) “stabilizes and structures the economic activities of foreign investors and requires host states to their behavior to the rule of law standards, thereby enabling market forces to unfold”: Ibid. p. 1835.
66.
Schill (2009), p. 280.
67.
Di Benedetto (2013), p. 43.
68.
Schill (2015), p. 1835.
69.
Ibid.
70.
See. Infra. Part III.
71.
Schill (2009), p. 281.
72.
Schill (2015), p. 1836.
73.
Ibid.
74.
Schill (2010a, b).
75.
Schill (2010a, b).
76.
Ibid. p. 14.
77.
Ibid.
78.
Ibid. p. 15.
79.
Ibid. p. 14.
80.
Ibid. p. 15.
81.
Ibid. p. 14.
82.
Ibid. pp. 15–16.
83.
Ibid. p. 14.
84.
“Comparative Public Law analysis serves several purposes: It helps (1) to concretize and clarify the interpretation of the often vague standards of investment protection and determine the extent of state liability in specific context; (2) to balance investment protection and non-investment concerns; (3) to ensure consistency in the interpretation and application of investment treaties (…) (4) to ensure cross-regime consistency and mitigate the negative effects of fragmentation (…) (5) to legitimize existing arbitral jurisprudence; and (6) to suggest legal reform of investment treaty making or changing to arbitral practice (…): Ibid. p. 25.
85.
“Comparative public law and the national and international regimes one may draw on do not control the interpretation and the application of international investment treaties (…) To the extent that investment treaty obligations leave no room for doubt, the ambit of comparative public law will be limited to a lege ferenda perspective”: Ibid. p. 27.
86.
Infra. Chap. 10.
87.
Infra.
88.
Van Harten (2007), p. 126.
89.
The author “show[s] that private arbitrators have a new-found power to review and discipline states, and to convey an impression of how this power interacts with the lives of ordinary people and the way they are governed”: Ibid. p. 3.
90.
“…systems unique use of private arbitration in the regulatory sphere conflicts with cherished principles of judicial accountability and independence in democratic societies…” (…) “disputes…presenting the major challenge to public principles of judicial accountability, openness, and independence”: Ibid. pp. 4–6.
91.
Ibid. pp. 143–151.
92.
“the view that the appropriate approach is to accept the regulatory context for investment disputes, and thus the relevance of public law, within the boundaries set by inter-state bargain of an investment treaty”: Ibid. p. 6.
93.
Ibid.
94.
Ibid.
95.
Ibid. p. 143.
96.
“(…) the individualization of claims, especially in as far-reaching a form as under investment treaties, transforms international adjudication by expanding the degree into which engages the regulatory sphere, thus superposing the analytical framework of public law. This means that the international principles which originate in adjudication of disputes must be modified or jettisoned”: Ibid. p. 135.
97.
Ibid. p. 150.
98.
“regulatory concerns (..) including the countervailing interests that are represented in public opposition to particular business activity; the implications of a particular investment for the host economy; the impact on the host’s states ability to prioritize social stability, public health and morals, and environmental concerns over objectives of economic efficiency and investor’s confidence”: Ibid. p. 144.
99.
Ibid.
100.
In this regard, the author posits “there is no excess of jurisdiction” (Ibid.) in taking into account public interests in investment treaty arbitration, given that these concerns are an “integral part” (Ibid.) of any system of public law adjudication.
101.
“Unfortunately some arbitrators and many commentators seem to act aggressively when protecting investors while downplaying the implications for the respondent state. This convert investment treaty arbitration into a regime that governs the public sphere by private law rules or rights-based norms and, as such (…)”: Ibid. p. 150 “(…) [T]his analogy of commercial arbitration is open to the criticism that over-emphasizes principles of private law…at the expense of principles that typically apply in public law adjudication (…) The problem arises when this analysis is transferred into the realm of treaty arbitration, as in numerous awards (…)”: Ibid. p. 125.
102.
Several fragments of Van Harten’s book denote the intrinsic value that public law infuses in arbitration: “part of the public character of investment treaty arbitration is the recognition that the aims of investment treaties also depend on how values other than property rights and the sanctity of contracts are advanced within the adjudicative process”: Ibid. p. 150. “(…) [T]he appropriate way to implement the adjudicative function under an investment treaty is to adapt a public law framework to the novel context of regulatory adjudication under international law”: Ibid. p. 144.
103.
Ibid. p. 144.
104.
Ibid. p. 143.
105.
Ibid. p. 144.
106.
“(…) the individualization of claims, especially in as far-reaching a form as under investment treaties, transforms international adjudication by expanding the de degree into which engages the regulatory sphere, thus superposing the analytical framework of public law. This means that the international principles which originate in adjudication of disputes must be modified or jettisoned”: Ibid. p. 135.
107.
Ibid. p. 144.
108.
Ibid. p. 150.
109.
Infra. Chap. 10.
110.
Infra. Chap. 7, Sect. 7.2.1.
111.
Kulick (2012), p. 6.
112.
Ibid.
113.
Ibid. p. 5.
114.
Ibid. p. 2.
115.
Ibid.
116.
Ibid.
117.
Ibid. p. 6.
118.
Ibid.
119.
Ibid. p. 7.
120.
“Once we accept this notion of supremacy of international law within the integrated system of the law applicable in an investment dispute, and once we acknowledge that such applicable international law mostly consists of the law enshrined in BITs, we face a simple fact: BITs deal mainly and often exclusively with investor rights”: Ibid. p. 51.
121.
“Thus, any public interest measure undertaken by the host State that conflicts with the – often very broad – BIT provisions guaranteeing investor rights, will be trumped in an investment dispute. In other words, if the host State applies the public interest measure in conflict with a BIT provision, the investor has a claim under the realm of international investment law – irrespective of the urgency and the importance of applying the said measure. I shall call this problematic the public interest challenge”: Ibid. p. 51.
122.
Ibid. pp. 77–85.
123.
Ibid. pp. 94–98, 127–154.
124.
Ibid. pp. 154–167.
125.
Ibid. pp. 57–65.
126.
Ibid. pp. 99–117.
127.
Ibid. pp. 127–153.
128.
Ibid. pp. 168–224.
129.
Ibid. p. 5.
130.
Ibid.
131.
Ibid.
132.
Ibid.
133.
Ibid. p. 163.
134.
De Brabandere (2014), p. 5.
135.
“International law’s prominence has now arrived at a stage where Tribunals not only acknowledge its supremacy over domestic law within the realm of international investment law, but also grant the former the role as the primary source in an investment dispute. I call this development the “internationalization” of international investment law”: Kulick (2012), p. 4.
136.
Ibid. p. 163.
137.
Ibid. p. 165.
138.
Ibid.
139.
Ibid. pp. 169–171.
140.
Supra.
141.
Kulick (2012), pp. 4–5.
142.
Ibid.
143.
Ibid.
144.
Ibid.
145.
“International law’s prominence has now arrived at a stage where Tribunals not only acknowledge its supremacy over domestic law within the realm of international investment law, but also grant the former the role as the primary source in an investment dispute. I call this development the ‘internationalization’ of international investment law.” Ibid. p. 4. See also Ibid. pp. 46–52.
146.
Ibid. pp. 153–154.
147.
Ibid.
148.
Ibid. p. 4.
149.
Ibid. p. 2.
150.
Ibid.
151.
Ibid.
152.
Ibid.
153.
See. Infra.
154.
Kulick (2012), p. 2.
155.
Ibid.
156.
De Brabandere (2014), pp. 122–147.
157.
De Branbandere admits that “Jurisdiction, however, is very different from the question of the law applicable to the dispute, but they are without doubt connected, especially when one deals with specific regime-related dispute settlement mechanisms.” Ibid. p. 134.
158.
Ibid. pp. 129–147.
159.
Ibid. p. 11.
160.
Ibid. p. 4.
161.
Ibid. p. 12.
162.
For example, Liman Caspian Oil BV and NCL Dutch Investment BV v. Republic of Kazakhstan (2010), para. 172.
163.
De Brabandere (2014), p. 13.
164.
Ibid.
165.
Ibid.
166.
Ibid. p. 9.
167.
Ibid. p. 129.
168.
Ibid. p. 134.
169.
Ibid. p. 135.
170.
Ibid. pp. 135–136.
171.
Schill (2009), p. 281.
172.
Infra. Chap. 6 text to notes 22; Chap. 7, text to notes 14, 194, 200; Chap. 9 text to notes 246–247.
173.
Infra. Chap. 6 text to notes 16–18, Chap. 7 text to notes 172, 198.

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Universidad Externado de Colombia, Bogota, Colombia
Tomás Restrepo Rodríguez

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Restrepo Rodríguez, T. (2022). Formal Relevance of the Climate Change International Legal Framework in Investment Treaty Disputes: Defining the System as a Process of Multi(syncretic)lateralization. In: Investment Treaty Law and Climate Change. Springer, Cham. https://doi.org/10.1007/978-3-031-18655-4_3

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DOI: https://doi.org/10.1007/978-3-031-18655-4_3
Published: 01 January 2023
Publisher Name: Springer, Cham
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