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Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic ICSID

  • David Attanasio (a1) and Tatiana Sainati (a1)
Extract

On December 8, 2016, an International Centre for Settlement of Investment Disputes (ICSID) tribunal (the Tribunal) held that international human rights condition the treatment that an investor is entitled to receive from a state and that human rights impose obligations on the investor itself. The Tribunal's explicit recognition of these dual consequences of international human rights law breaks new ground. International investment tribunals have not previously held that human rights obligations have any effect on protections due to investors, much less that international human rights law might establish separate obligations for investors.

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1 Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic, ICSID Case No. ARB/07/26, Award (Dec. 8, 2016). The International Centre for Settlement of Investment Disputes (ICSID) documents cited herein are available on the Centre's website at https://icsid.worldbank.org/en.

2 Id., paras. 1196–97 (specifically locating the right to water in the equal right to public services and the right to an adequate standard of living from the Universal Declaration of Human Rights (UDHR) and the right to an adequate standard of living and the right to continuous improvement of living conditions from the International Covenant on Economic, Social and Cultural Rights (ICESCR)).

3 Id. (citing UDHR, Art. 30; ICESCR, Article 5(1)). The Tribunal's reasoning here has received some criticism on the grounds that these provisions were intended to prevent “newly formed fascist groups from relying on human rights as a justification for their activities … .” Edward Guntrip, Urbaser v Argentina: The Origins of a Host State Human Rights Counterclaim in ICSID Arbitration?, EJIL: Talk! (Feb. 10, 2017), at https://www.ejiltalk.org/urbaser-v-argentina-the-origins-of-a-host-state-human-rights-counterclaim-in-icsid-arbitration.

4 See, e.g., Hesham T. M. Al Warraq v. Republic of Indonesia, Final Award, para. 575 (UNCITRAL Dec. 15, 2014); Yukos Universal Ltd. (Isle of Man) v. The Russian Federation, PCA Case No. AA 227, Final Award, para. 765 (UNCITRAL July 18, 2014). This use of human rights would not normally be in substantial tension with investment law because human rights law may simply support, fill in, or complement independent investment protections for the investor.

5 Glamis Gold, Ltd. v. The United States of America, Award, para. 8 (UNCITRAL June 8, 2009). Both South American Silver Limited v. Bolivia, PCA Case No. 2013–15 (UNCITRAL), and Bear Creek Mining Corp. v. Republic of Peru, ICSID Case No. ARB/14/2 involve similar defenses. See supra note 2 and accompanying text for the right to water.

6 Although the state raised the right to water in disputes like Azurix, Biwater Gauff, and Impregilo, the tribunals effectively ignored these arguments in their awards. Azurix Corp. v. The Argentine Republic, ICSID Case No. ARB/01/12, Award, paras. 254, 261 (July 14, 2006); Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award, para. 434 (July 24, 2008); Impregilo S.p.A. v. Argentine Republic, ICSID Case No. ARB/07/17, paras. 228, 230 (June 21, 2011). The Glamis Gold tribunal, confronted with an indigenous rights defense, dismissed the argument perfunctorily as irrelevant. Glamis Gold, supra note 5, para. 8. The Grand River award, where claimants raised indigenous rights, also gave short shrift to the arguments. See, e.g., Grand River Enterprises Six Nations, Ltd. v. United States of America, Award, paras. 181, 209 (UNCITRAL Jan. 12, 2011).

7 Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case No. ARB/03/19, Decision on Liability, para. 252 (July 30, 2010).

8 Id., para. 260. The EDF tribunal dismissed a similar argument on the related basis that Argentina could have complied with the investment protections after the crisis abated and so its actions were not necessary to guarantee human rights. EDF International S.A., SAUR International S.A. and León Participaciones Argentinas S. A. v. Argentine Republic, ICSID Case No. ARB/03/23, Award, paras. 912–14 (June 11, 2012).

9 SAUR International SA v. Republic of Argentina, ICSID Case No. ARB/04/4, Decision on Jurisdiction and Liability, para. 331 (June 6, 2012) (authors’ translation).

10 Vienna Convention on the Law of Treaties, Art. 31(3)(c), May 23, 1969, 1155 UNTS 331.

11 See supra notes 7–9.

12 The Human Rights Committee seems to have adopted a similar perspective on the status of human rights in its General Comment Number 26. See Human Rights Committee, General Comment No. 26, para. 4, UN Doc. No. CCPR/C/21/Rev.1/Add.8/Rev.1.

13 Notably, this mutual commitment could run both ways. It is possible that there are situations in which human rights might justify investor conduct that would otherwise be subject of a complaint by the state.

14 See Dumberry Patrick & Dumas-Aubin Gabrielle, When and How Allegations of Human Rights Violations Can Be Raised in Investor-State Arbitration , 13 J. World Inv. & Trade 349, 356, n. 33 (2012) (with extensive citations).

15 See, e.g., International Covenant on Civil and Political Rights, Art. 40, Dec. 6, 1966, 999 UNTS 171[hereinafter ICCPR]; ICCPR Optional Protocol, Art. 1; International Covenant on Economic, Social and Cultural Rights, Art. 16, Dec. 16, 1966, 993 UNTS 3 [hereinafter ICESCR]; ICESCR Optional Protocol, Art. 1; UN Economic and Social Council Res. 1985/17 (May 28, 1985).

16 For a summary of suits brought in Europe against European companies for human rights violations committed abroad, see European Center for Constitutional and Human Rights, Human Rights Violations Committed Overseas: European Companies Liable for Subsidiaries (Policy Paper, June 3, 2015), at https://www.ecchr.eu/en/our_work/business-and-human-rights.html. Some human rights cases against corporate defendants have been brought in the United States under the Alien Tort Statute (ATS). The United States Supreme Court has, however, limited the extraterritorial scope of the ATS in cases involving both corporate and individual defendants. Kiobel v. Royal Dutch Petroleum, 569 U.S. 108, 114 (2013). Some lower courts have held that ATS cases cannot be brought against corporations at all, an issue that is currently before the U.S. Supreme Court. See Jesner v. Arab Bank, 808 F.3d 144 (2d Cir. 2016), cert. granted (Apr. 3, 2017).

17 Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, Principle 11, UN Doc. A/HRC/17/31 (Mar. 21, 2011).

18 See, e.g., Simma Bruno, Foreign Investment Arbitration: A Place for Human Rights? 60 Int'l & Comp. L. Q. 573, 580 (2011); Karamanian Susan L., The Place of Human Rights in Investor-State Arbitration , 17 Lewis & Clark L. Rev. 423, 425 (2013).

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American Journal of International Law
  • ISSN: 0002-9300
  • EISSN: 2161-7953
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