Book Chapter
Reference
The growth in investment litigation: perspectives and challenges
BOISSON DE CHAZOURNES, Laurence
BOISSON DE CHAZOURNES, Laurence. The growth in investment litigation: perspectives and
challenges. In: Roberto Echandi & Pierre Sauvé.
Prospects in International Investment
Law and Policy
. Cambridge : Cambridge University Press, 2013. p. 306-309
Available at:
http://archive-ouverte.unige.ch/unige:30046
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19
The growth in investment litigation: perspectives
and challenges
LAURENCE BOISSON DE CHAZOURNES
In their chapters, Margrete Stevens and Roberto Echandi have both
advanced some thought-provoking ideas on investor-state dispute settlement.
A few points raised by their contributions will be addressed below.
Let me first refer to the proposal for having rules of ethics for counsel
acting before Internatioual Centre for Settlement of Investment Disputes
(ICSID) tribunals and supposedly also before
other
investment tribunals.
Although I consider that it is important to have a set of international rules
of ethics governing counsel, as we]J as rules of ethics governing arbitrators
and experts, I would be cautious about making it a sort of
lex specialis
in the investment area. We should have a
lex professionalis
that is closely
modelled on similar rules that also apply to international courts and tribunals
and reinforce systemic integrity.
1
I would like to refer to the recently adoptl(d International Law
Association (ILA)
Hague Principles on Ethical Standards for Counsel
Appearing before International Courts and Tribunals,
which concern
counsel in ICSID and other dispute settlement proceedings to which a
state is party. These Principles constitute an attempt to establish minimal
common standards of conduct for counsel in international fora. They
were intended to stimulate discussion in the international community
of lawyers and practitioners and to encourage further developments.
2
Having been involved in the drafting process of these rules, I believe that
1
See, e.g., Chi!pler 4 of the Regulations of the lnternntionaJ Criminal Court ('Counsel
Issues and
Legal
Assistance'); the Code of Conduct for European Lawyer.!> (produced
by the Council of Bars and Law Societies of Europe); and the ongoing work of the IBA
Arbitration Committee's Task Force on Counsel Eth ics, www.ibaoet.org/Arliclc/Dctnll.
as px? Article Uid
= 610 bbf6e -cf02-4 5ne-8c3n • 70d fdb227 4
aS.
2
See P. Sands, 'Introduction to the I LA Hague Principles on Ethical Standards for
Counsel Appearing before lntcrnn tional Courts and Tribunals',
The Law and Practice of
International Courts and Tribunals
10(1) (2011),
1-5.
306
THE GROWTH IN INVESTMENT LITIGATION 307.
the Principles have greatly benefited from an exchange ofknowledge concerning
counsels' experiences and the practices of various courts and tribunals.
3
In this context I believe that, if it is necessary to have a
specific set
of rules in the investment field, investment arbitration should draw from
this experience in other international dispute settlement fora.
However, while we should not isolate ICSID, we should still take into
account its peculiarities. ICSID is one of the institutions of the World
Bank Group, and much of the desired change and restructuring would
have to rely on Wotld Bank decision-makers for its implementation.
There is thus a need to raise the profile of the Centre within the World
Bank Group. In this respect, it is interesting to note that in the reports
produced in the context of the last round ofBretton Woods reforms (catalysed
in large part by the initiative of the Group of Twenty {G20)), no mention
was made ofiCSID. This need to strengthen ICSID within the World
Bank Group is particularly timely,_as the World Bank- and not just the
International Finance Corporation (IFC) and Multilateral Investment
Guarantee Agency (MIGA) - is increasingly involved in activities linked
to the private sector. The World Bank and the ICSID clearly have a common
interest in strengthening the capabilities of the latter, particularly
the solidity and fairness of its procedures.
A second issue with a similar thrust concerns the enforcement of
awards. Stevens' chapter reminds us of Articles 53 and 54 of the ICSID
Convention. Obviously, these provisions do not have the legal persuasiveness
that they should. There is room for creativity so as to ensure better
compliance with ICSID awards, and ways to strengthen compliance
should be explored.
There, too, inspiration could be drawn from other fora for ensuring
compliance with awards.
It
is interesting in this context to note the initiatives
that the United Nations (UN) Secretary-General and other UN
bodies took to ensure compliance with the decisions of the International
Court of Justice (ICJ) through the establishment of mixed commissions
or the sending of observers. The President of the World Bank as well as
the Administrative Council of ICSID might be inspired to develqp similar
initiatives. These initiatives could, inter alia, allow for the monitoring
of compliance with awards. At present, there is no such monitoring
system. The practice of the World Trade Organization (WTO) could also
3
See Study Group on the Responsibility of International Organisations, 'Report of the
Seventy-Fourth Conference (Held in The Hague,
15-19 August 2010)',
International Law
Association Reports of Conferences
74 (2011), 956-60.
308
LAURENCE BOISSON DE CHAZOURNES
provide some insights in this respect, if one considers its surveillance
mechanism.
4
Another avenue that could be explored is the establishment of a group
of'friends ofiCSID'. Many international organisations have established
such groups to help Lhem confront the future. With this, I mean a group
of state representatives or a group of people with a high profile on the
international scene- working or not with the World Bank- and possibly
with a connection to the ICSID dispute settlement practice. Such a group
could devise new ways of thinking about the importance of ensuring the
viability of ICSID in the long term and about ensuring compliance with
arbil.ration decisions in particular.
The third point I would like to raise concerns the 'finality' of an award.
Echandi alludes to this point in an
a contrario
manner when discussing
the sensltive poUUcal consequences of voluntary settlement through
diplomatic means. He rightly reminds us that, for political reasons, His
often easier eo permit an independent international tribunal to take decisions
in the last resort. This relieves slates of the responsibility to resolve
disputes through negotiations and to face the domestic political consequences
arising from lhe concessions inevitably made in the process. This
behaviour pattern is also familiar in other dispute settlement fora, such as
the WTO and the ICJ.
In this context, the investor-state dispute prevention concept that was
introduced has great virtue . Obviously, there is a need for better coordination
in the way governments internally manage and respond to investment
decisions and issues. This can be achieved through the development
of dispute prevention policies. In particular, the creation of 'focal points'
within host state governments - to which parties can turn when difficulties
arise - could prevent conflicts from evolving into legal disputes. Here
I would refer to the so-called Internal Market Problem Solving System
(SOLVIT) system introduced by the European Commission to take some
pressure off the normal infringement procedure against Member States.
In this system a Member State citizen or business that alleges a public
authority's misapplication of internal market law can submit its case to
its local SOL VIT centre, which generally proposes a resolution within ten
weeks.
5
4
See Article 21 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes, Annex 2 of the World Trade Organization (WTO) Agreement, available at:
www.wto.org/english/tratop_e/dispu_e/dsu_e.htm#21.
5
Internal Market Problem Solving System (SOLVIT) website, http:l/ec.europa.eu/solvit/
site/about/index_en.htm.
THE GROWTH IN INVESTMENT LITIGATION 309
.
Now turning to the internationally concerted mechanisms that Echandi
proposed, they raise a challenging paradox or an 'open dialectic:. In an
area where encouraging private sector foreign investment througli direct
access to remedies used to be an article of faith, more and more interstate
mechanisms are now proposed for consultation and conciliation purposes.
This emerging interstate trend has the colour of diplomatic protection
without the content. Owing to the risk of politicisation of investment
disputes that states' intervention carries, safeguards should be considered
to ensure that these mechanisms do not create hurdles to investor remedies.
Principles of global administrative law, such as the principles of
accountability and openness, might be able to play the role of procedural
safeguards.
6
Principles of comity may also play a role in this context.
My fourth point is that alternative dispute resolution (ADR) techniques
have positive features that should also be promoted in investment
disputes. They play both a preventive and a remedial role. As suggested
by both authors, there is room to persuade the stakeholders of the advantages
of ADR. In the first place, Echandi has rightly targeted the economic
costs, but he has also mentioned the political and social costs attached
to international litigation. In this context, ADR imposes lighter burdens.
However, there would be a need to work more on the social aspects of
ADR and their acceptance by groups of concerned citizens. There might
~e
a need for more transparency in order to involve all stakeholders in the
decisions. More access to information may encourage greater use of ADR,
as it would contribute to broadening the acceptance of ADR's legitimacy.
I would like to end by noting that neither Stevens nor Echandi has
referred to the need to establish an appeal mechanism or a
Cour de
Cassation
in the field of investment dispute resolution. Discussion of
'finality' might extend beyond the rendering of an award. I do not have a
settled view on this issue, but looking once more to other dispute settlement
fora, one can note a .trend towards embracing two-tiered judicial
mechanisms in judicial fora in which non-state parties have access. Can
the legitimacy of the investment dispute settlement system escape discussion
of this issue?
6
On these principles, see B. Kings bury, N. Krisch and R. B. Stewart, 'The emergence of global
administrative law',
Law and Contemporary Problems
68(3) (2005), 16-61.
