Abstract
In the horizontal and decentralized international legal system, an effective judicial dialogue is a basic requirement to guarantee the harmonious development of international law. In this respect, since the international competent judge is not pre-established by law, there is a risk of fragmentation of international law as a result of a different interpretation of the same rule of law provided by distinct international judicial bodies. From this perspective, the use of external authorities has often been considered as a potential remedy to fragmentation. Indeed, by carefully examining the precedents related to the specific issues, each judge may contribute to the harmonious interpretation and development of international law. Nevertheless, the use of external authorities is not something good in itself. This chapter analyses the role of external authorities in investment arbitration and vice-versa, on the assumption that the use or misuse of external precedents by one court may affect how other tribunals will use its jurisprudence. Through the examination of four selected cases where judges strategically relied or ignored external authorities, this chapter finally contends that a misuse of external jurisprudence produces a vicious circle in which international courts and tribunals are likely to ignore each other. Quite the opposite, a prerequisite for international courts and tribunals to effectively participate in the harmonious development of international law must be sought in the careful and justified use of the exogenous precedent.
This chapter is the result of the joint work of the two Authors. However, in detail, Prof. Palombino wrote Sects. 1 and 4 while Mr Minervini wrote Sects. 2, 3 and 5. As far as Mr Minervini, this chapter is partly based on the Adv LLM Thesis the author submitted in fulfilment of the requirements of the Master of Laws: Advanced Studies Programme in Public International Law degree, Leiden Law School (Leiden University).
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Notes
- 1.
Article 25, para. 1 of the Constitution of the Italian Republic, https://www.senato.it/documenti/repository/istituzione/costituzione_inglese.pdf (last accessed 21 December 2019).
- 2.
Status of Eastern Carnelia (1923), Advisory Opinion, PCIJ (Series B) No. 5, p. 19.
- 3.
Mitchell (2009), p. 13. A clarification of this definition has been provided by Pauwelyn (2014), p. 383 who pointed out the features of a complex adaptive system: “(i) dispersed interaction between many heterogeneous agents, (ii) leading to emergent, self-organized collective behavior, (iii) having no global controller and (iv) continual adaptation with out-of-equilibrium dynamics.”
- 4.
The issue was firstly raised and discussed by ICJ Judges with regard to the role of the World Court in light of the creation of new international courts and tribunals. See Guillaume (1995), pp. 860–862; Abi-Saab (1999), pp. 926–930; Higgins (2001), p. 122. See also Koskenniemi and Leino (2002), pp. 553–556; Pauwelyn (2006), paras. 1–6.
- 5.
In this sense, see Dupuy (2007), p. 26; Webb (2013), pp. 5–7; Cohen HG (2016), Fragmentation, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2785719 (last accessed 1 June 2020), pp. 7–8.
- 6.
De Brabandere E (2018), Human Rights and international investment law, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3149387 (last accessed 1 June 2020), pp. 16–21.
- 7.
Droege (2008), pp. 501–502: “Traditionally, international human rights law (IHRL) and international humanitarian law (IHL) are two distinct bodies of law with different subject matters and different roots, and for a long time they evolved without much mutual influence. This has changed. […] [T]here is today no question that human rights law comes to complement humanitarian law in situations of armed conflict. […] In short, these regimes overlap, but as they were not necessarily meant to do so originally, one must ask how they can be reconciled and harmonized.”
- 8.
Fragmentation of International Law: difficulties arising from the Diversification and Expansion of International Law: Report of the Study Group of the International Law Commission—Finalized by Martti Koskenniemi. ILC, 13 April 2006, UN Doc A/CN.4/L.682, p. 19, https://legal.un.org/ilc/documentation/english/a_cn4_l682.pdf (last accessed 21 December 2019); Knox (2004), pp. 4–29.
- 9.
Cohen (2016), p. 11.
- 10.
In this sense, Webb (2013), p. 6; Cohen (2016), pp. 7–8.
- 11.
Greenwood (2015), p. 46.
- 12.
Webb (2013), p. 6.
- 13.
Lord Chief Justice Gordon Hewart in R v. Sussex Justices, Ex Parte McCarty [1924] 1KB 256. This maxim is strictly linked to the concept of social legitimacy in relation to which see Hurd (1999), p. 381: “[l]egitimacy, as I use it here, refers to the normative belief by an actor that a rule or institution ought to be obeyed. It is a subjective quality, relational between actor and institution, and defined by the actor’s perception of the institution.”
- 14.
Ten Cate (2013), p. 455.
- 15.
Bertrea (2005), p. 371.
- 16.
Cambridge Online Dictionary, ‘Coherence’, https://dictionary.cambridge.org/it/dizionario/inglese/coherence (last accessed 21 December 2019).
- 17.
Schreuer (2013), p. 391 (italics added).
- 18.
Bertrea (2005), p. 373 (italics added).
- 19.
In this sense, see Kurtz (2014), p. 274 who recognized that rather than consistency “it is even more important that there is greater coherence and integrity in reasoning employed by arbitral tribunals.”
- 20.
Soriano (2003), p. 302.
- 21.
Palombino (2018), p. 156: who defines the issue of external precedent as the situation in which “a court relies on the decisions of tribunals operating under a different legal order or regime with a view to determining the scope of a certain rule of law.”
- 22.
- 23.
Charlotin (2017), p. 284.
- 24.
Guillaume (2011), pp. 18–23; Cohen (2015), p. 270: “The precedents from one regional body are argued to others, precedents from human rights courts are argued to investment tribunals, and precedents from ad hoc criminal tribunals are applied to domestic civil judgments. […] So why does an ICTY decision carry weight in internal US Executive Branch discussions? Or in broader terms, when and why do particular decisions become precedents? This chapter begins to answer that question. Its goal is to develop a framework for a broader account of international precedent’s emergence. To use this book’s metaphor, in the game of international interpretation, what are the spoken and unspoken strategies of precedent? Why will certain prior interpretations be invoked in certain contexts and with certain audiences? When will those strategies be effective, forcing other actors to respond to a prior interpretation, echoing it, building upon it, or distinguishing it?”; De Brabandere (2016), pp. 42–52.
- 25.
Continental Casualty Company v. Argentina, ICSID Case No. ARB/03/09, Award, 5 September 2008.
- 26.
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016.
- 27.
Article XI of the US-Argentina BIT reads as follows: “This Treaty shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfilment of its obligations with respect to the maintenance or restoration of international peace or security, or the Protection of its own essential security interests.”
- 28.
Article 25 of ARSIWA reads as follows: “1. Necessity may not be invoked by a State as a ground for precluding the wrongfulness of an act not in conformity with an international obligation of that State unless the act: (a) is the only way for the State to safeguard an essential interest against a grave and imminent peril; and (b) does not seriously impair an essential interest of the State or States towards which the obligation exists, or of the international community as a whole. 2. In any case, necessity may not be invoked by a State as a ground for precluding wrongfulness if: (a) the international obligation in question excludes the possibility of invoking necessity; or (b) the State has contributed to the situation of necessity.”
- 29.
In this sense, see Tanzi A (2013), State of Necessity, https://opil.ouplaw.com/ (last accessed 1 June 2020), para. 3.
- 30.
Zarra (2017a), p. 659.
- 31.
CMS Gas Transmission Company v. Argentina, ICSID Case No. ARB/01/08, Award, 12 May 2005.
- 32.
Martinez (2012), pp. 164–165; Enron Creditors Recovery Corp. v. Argentina, ICSID Case No. ARB/01/3, Award, 22 May 2007; Sempra Energy Int’l v. Argentina, ICSID Case No. ARB/02/16, Award, 28 September 2007.
- 33.
Alvarez and Brink (2012), p. 320.
- 34.
Continental Casualty Company v. Argentina, ICSID Case No. ARB/03/09, Award, 5 September 2008, para. 167.
- 35.
Reinisch (2010), p. 152.
- 36.
Continental Casualty Company v. Argentina, ICSID Case No. ARB/03/09, Award, 5 September 2008, para. 192.
- 37.
Alvarez and Brink (2012), p. 335.
- 38.
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016, paras 9–14.
- 39.
Article 5(1) of the Switzerland-Uruguay BIT reads as follows: “Neither of the Contracting Parties shall take, either directly or indirectly, measures of expropriation, nationalization or any other measure having the same nature or the same effect against investments belonging to investors of the other Contracting Party, unless the measures are taken for the public benefit as established by law, on a non-discriminatory basis, and under due process of law, and provided that provisions be made for effective and adequate compensation. The amount of compensation, interest included, shall be settled in the currency of the country of origin of the investment and paid without delay to the person entitled thereto.”
- 40.
The relevant part of Article 3(2) of the Switzerland-Uruguay BIT reads as follows: “Each Contracting Party shall ensure fair and equitable treatment within its territory of the investments of the investors of the other Contracting Party”.
- 41.
As for different conceptualisations of this phenomenon, see Tienhaara (2011), p. 607: “Some authors appear to consider regulatory chill to be a broad phenomenon whereby regulatory progress is dampened across all areas that impact on foreign investors because government officials are aware of, and seriously concerned about, the risk of an investor–State dispute arising. In other words, policy-makers take into account potential disputes with foreign investors before they even begin to draft a policy and prioritise avoiding such disputes over the development of efficient regulation in the public interest. […] A second conceptualisation of regulatory chill commonly employed by authors and commentators focuses on the chilling of specific regulatory measures that have been proposed or adopted by governments. This form of regulatory chill would emerge only when a government has been made aware of the risk of an investor–State dispute by an investor or group of investors that oppose the adoption or enforcement of a regulatory measure.”
- 42.
Zarra (2017b), p. 96.
- 43.
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016, para 398.
- 44.
Zarra (2017b), p. 100.
- 45.
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016, Concurring and Dissenting Opinion by Gary Born, paras 87, 180–191.
- 46.
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016, Concurring and Dissenting Opinion by Gary Born, para. 143.
- 47.
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016, Concurring and Dissenting Opinion by Gary Born, para. 145.
- 48.
Megret (2018), p. 102: “Margin of appreciation reasoning has featured prominently in cases involving sexual minorities and the place of religion in society, to mention only some examples.” In this sense, consider the jurisprudence of the ECtHR concerning the Islamic veil and its ban by several European states.
- 49.
Megret (2018), p. 103.
- 50.
Arato (2014), p. 550.
- 51.
Siemens v. Argentina, ICSID Case No. ARB/02/8, Award, 6 February 2007, para. 354; Quasar de Valors SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. v. Russia, SCC No. 24/2007, Award, 20 July 2012, para. 22; Bernhard von Pezold and Others v. Zimbabwe, ICSID Case No. ARB/10/15, Award, 28 July 2015, paras 465–466.
- 52.
- 53.
Arato (2014), p. 565: “At least in the context of ad hoc investment arbitration, the problem is that the doctrine appears to be doing work, but in reality amounts to a mere pseudostandard — a substitute for real reasoning. In other words, the invocation of the margin of appreciation as a rubric creates a false impression of consistency across cases like Continental Casualty, Frontier Petroleum, Electrabel, Saluka, and Micula, while obscuring significant differences in the type and degree of deference afforded therein.”
- 54.
Charlotin (2017), p. 294.
- 55.
Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Preliminary Objections Judgment, ICJ Reports 2007.
- 56.
Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Preliminary Objections Judgment, ICJ Reports 2007, para. 90.
- 57.
McLachlan (2008), p. 364.
- 58.
Obligation to Negotiate Access to the Pacific Ocean (Bolivia v. Chile), https://www.icj-cij.org/files/case-related/153/153-20181001-JUD-01-00-EN.pdf (last accessed 21 December 2019).
- 59.
Obligation to Negotiate Access to the Pacific Ocean (Bolivia v. Chile), https://www.icj-cij.org/files/case-related/153/153-20181001-JUD-01-00-EN.pdf (last accessed 21 December 2019), para. 162.
- 60.
Total S.A. v. Argentina, ICSID Case No. ARB/04/1, Award, 27 November 2013.
- 61.
Byers (1999), p. 107; Snodgrass (2006), p. 2; Brown (2009), p. 10: “A preliminary conclusion might be made that there is a general principle of law pursuant to which an individual’s legitimate expectations are to be protected from harm caused by a public authority resiling from a previous publicly stated position.”
- 62.
In this sense, consider the ‘taking into account approach’ as explained by Palombino (2018), p. 143: “The approach [which should be] followed in investor-State arbitration [… is] the so-called ‘taking into account’ approach, which means that the arbitrator is obliged to consider previous decisions, but may disregard them where reasons of substantive justice, or the mere need to foster a proper development of the law, suggest doing so.”
- 63.
As for the role of the jurisprudence of other international courts and tribunals in international investment arbitration see Schill (2010), p. 3.
- 64.
Herbert (2004), p. 203.
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Palombino, F.M., Minervini, G. (2021). Apropos of the External Precedent: Judicial Cross-Pollination Between Investment Tribunals and International Courts. In: Gourgourinis, A. (eds) Transnational Actors in International Investment Law. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-60679-4_6
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