57 results
5 - Energy Investment Regulation and the Environment
- Sherzod Shadikhodjaev, KDI School of Public Policy and Management
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- Book:
- Energy and the Environment
- Published online:
- 30 April 2024
- Print publication:
- 02 May 2024, pp 186-221
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Summary
This chapter examines investment-related aspects of the energy–environment nexus. State actions against fossil fuel investments often have an environmental cause, raising the issue of policy space under the investment regime. The doctrine of ‘police powers’ provides grounds for qualifying some pro-environmental interventions as non-compensable non-expropriatory measures. In addition to seeking policy flexibilities, many States wish energy investors to voluntarily bear social responsibility on the environmental front. As a result, a number of IIAs provide for responsible business conduct, bringing some changes to the ‘investor vs. State’ asymmetry in the investment system. A surge in renewable energy ISDS cases in the last ten years is another noticeable trend. High upfront costs of renewable energy projects recoupable in a long run necessitate FIT or other long-term benefits to investors. But when the government suddenly cancels or cuts promised incentives, this frustrates investors’ legitimate expectations under IIAs but may also be welcomed under trade law as a way of getting rid of distortive subsidies. Thus, some discrepancy or tension between the trade and investment regimes can arise.
7 - A Communitarian Theory and International Investment Law
- Chios Carmody, University of Western Ontario
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- Book:
- A Communitarian Theory of WTO Law
- Published online:
- 14 December 2023
- Print publication:
- 21 December 2023, pp 370-427
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Summary
The communitarian theory of WTO law outlined in previous chapters works reasonably well as a description of key features of WTO law. Its “fit” with the existing law raises the possibility of the theory serving wider applications. That possibility is likely to be canvassed most insistently in relation to international investment law, the body of law pertaining to the protection and treatment of foreign investment by host states. A communitarian theory would forecast international investment law to be preoccupied with corrective justice and to be heavily contractual, retrospective and inductive. The chapter demonstrates how all of these features are confirmed in the shape of contemporary international investment law, and how in light of considerable dissatisfaction with the current investment regime, an impulse is detected toward something more egalitarian, and therefore more obligatory, constitutive, prospective and presumptive.
16 - International economic law
- Edited by Emily Crawford, University of Sydney, Alison Pert, University of Sydney, Ben Saul, University of Sydney
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- Book:
- Public International Law
- Published online:
- 09 May 2023
- Print publication:
- 23 May 2023, pp 430-455
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Summary
International economic law is an umbrella term with no fixed meaning. At its broadest, it covers all aspects of economic relations between states, including regulation of the conduct of individuals, corporations and international organisations. A narrower meaning is ‘the segment of public international law directly governing – rather than merely affecting – economic relations between States or international organizations’. The field also embraces governance arrangements, such as the World Bank, International Monetary Fund, and World Trade Organization, as well as the many UN and regional bodies that advance economic development. As space does not permit a discussion of all these aspects, this chapter focuses on two important areas: international trade law and international investment law. International trade law is the body of law, mainly treaty based, that governs the terms on which states permit the trade in goods and services across their borders.
45 - Control of the Courts by Arbitration
- from Part VIII - Role of State Courts in Arbitration
- Edited by Stefan Kröll, Andrea K. Bjorklund, McGill University, Montréal, Franco Ferrari, New York University
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- Book:
- Cambridge Compendium of International Commercial and Investment Arbitration
- Published online:
- 18 February 2023
- Print publication:
- 02 March 2023, pp 1381-1422
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Summary
This Chapter provides an overview of the two broad types of control that arbitral tribunals exercise over proceedings in state courts. First, in both international commercial arbitration and investment treaty arbitration, arbitral tribunals may exercise indirect control over state courts through their jurisdiction over the parties before them as part of their inherent power to protect the integrity of the arbitral proceedings. They do so through the issuance of provisional measures, typically in the form of anti-suit injunctions. In this context, investment treaty tribunals have the additional power to issue measures addressed directly to the host state courts. Second, and uniquely to tribunals established pursuant to investment treaties, the activities of the judiciary may come within the exercise of principal jurisdiction by the arbitral tribunal. Under investment treaties, the tribunal may be seized with a claim for international responsibility arising out of measures taken by a state’s courts which can be broadly organised into two categories: expropriatory and non-expropriatory claims as a result of the improper administration of justice.
5 - Fair and Equitable Treatment, Full Protection and Security, and Umbrella Clauses
- David Collins, City, University of London
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- Book:
- An Introduction to International Investment Law
- Published online:
- 14 March 2023
- Print publication:
- 09 February 2023, pp 132-164
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Summary
This chapter examines some of the major protections contained in investment treaties: Fair and Equitable Treatment, Full Protection and Security and associated difficulties in interpretation. It also considers the now unpopular Umbrella clauses and increasingly common transparency provisions.
8 - Checks and Balances at the Stage of Merits
- from Part II - Regulation through Treaty and Arbitration
- Kei Nakajima, University of Tokyo
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- Book:
- The International Law of Sovereign Debt Dispute Settlement
- Published online:
- 15 September 2022
- Print publication:
- 22 September 2022, pp 239-283
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Finally, the checks and balances of sovereign debt restructuring by investment tribunals are also implemented as a matter of the interpretation of the substantive provisions. Given that investment arbitral jurisprudence has incorporated the doctrine of margin of appreciation, the study has concluded that a deferential review of policy decision-making by debtor sovereigns is available and appropriate for arbitral tribunals. Concretely, the arbitral jurisprudence on the provisions providing standards of protection and defence on merits may afford a balancing exercise that enables safeguarding the legitimate policy of debt restructuring without sacrificing bondholder protection.
8 - Fair and Equitable Treatment
- from Part III - Investment Protection Standards during Armed Conflict
- Tobias Ackermann, Ruhr-Universität, Bochum, Germany
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- Book:
- The Effects of Armed Conflict on Investment Treaties
- Published online:
- 11 August 2022
- Print publication:
- 25 August 2022, pp 199-214
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Chapter 8 concludes the analysis of the most important substantive investment treaty clauses by examining the fair and equitable treatment standard. It argues that armed conflict does not put into question certain guarantees of fair decision-making and adjudication, whereas it proposes a balanced relativisation of the protection of investor expectations in the context of armed conflict. The determination of whether treatment is fair and equitable can only be made in the light of the individual circumstances of conflict. When balancing the interests of investors in a stable regulatory framework against the state’s regulatory interests, the urgency and severity of these public interests in armed conflict should be accorded particular weight. Under the proposed reading, the fair and equitable treatment standard is flexible enough to consider the circumstances of an armed conflict in a balanced and nuanced way. Well aware of existing controversies and opposing lines of jurisprudence, the chapter suggests ways to embrace the standard’s flexible nature and counteract tendencies in arbitral practice that arguably overemphasise investor interests.
14 - International Economic Law
- from Part II - The Branches of Public International Law
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- By Cecily Rose
- Cecily Rose, Niels Blokker, Daniëlla Dam-de Jong, Simone van den Driest, Robert Heinsch, Erik Koppe, Nico Schrijver
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- Book:
- An Introduction to Public International Law
- Published online:
- 17 February 2022
- Print publication:
- 03 March 2022, pp 276-298
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Summary
International economic law is a field of public international law that regulates crossborder transactions in goods, services, and capital, as well as monetary relations between states. This chapter focuses on the branches of international economic law that govern international trade, international investment, and international monetary law. It sets out the historical background, fundamental rules, and dispute settlement systems in the areas of international trade law and international investment law, and it concludes by introducing international monetary law. International trade and international investment law share some fundamental principles, such as non-discrimination, although most favored nation treatment and national treatment take somewhat different forms in the two bodies of law. This chapter covers the Bretton Woods institutions, namely the World Bank and the International Monetary Fund (IMF), as well as the World Trade Organization (WTO).
14 - International Economic Law
- from Part II - The Branches of Public International Law
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- By Cecily Rose
- Cecily Rose, Niels Blokker, Daniëlla Dam-de Jong, Simone van den Driest, Robert Heinsch, Erik Koppe, Nico Schrijver
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- Book:
- An Introduction to Public International Law
- Published online:
- 17 February 2022
- Print publication:
- 03 March 2022, pp 276-298
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Summary
International economic law is a field of public international law that regulates crossborder transactions in goods, services, and capital, as well as monetary relations between states. This chapter focuses on the branches of international economic law that govern international trade, international investment, and international monetary law. It sets out the historical background, fundamental rules, and dispute settlement systems in the areas of international trade law and international investment law, and it concludes by introducing international monetary law. International trade and international investment law share some fundamental principles, such as non-discrimination, although most favored nation treatment and national treatment take somewhat different forms in the two bodies of law. This chapter covers the Bretton Woods institutions, namely the World Bank and the International Monetary Fund (IMF), as well as the World Trade Organization (WTO).
Gavrilović and Gavrilović d.o.o. v. Republic of Croatia
- ICSID (Arbitration Tribunal). 26 July 2018 21 January 2015 19 March 2015 30 April 2015 4 April 2018 30 April 2018
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 512-545
- Print publication:
- 2022
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Procedure – Bifurcation – Jurisdiction – Whether the State’s objections to jurisdiction could be assessed in an initial phase before the merits
Procedure – Provisional measures – Urgent application – ICSID Convention, Article 47 – ICSID Arbitration Rule 39 – Whether the State should be ordered to refrain from interrogating an investor pending the tribunal’s determination of an application for provisional measures
Procedure – Provisional measures – Criminal investigation – ICSID Convention, Article 47 – ICSID Arbitration Rule 39 – Evidence – Whether the tribunal had jurisdiction to grant provisional measures ordering the suspension of a criminal investigation – Whether there was evidence to support the assertion that a criminal investigation would infringe the investors’ rights
Procedure – Preliminary objections – ICSID Arbitration Rule 41(1) – Whether an additional objection to jurisdiction and admissibility was made as early as possible
Jurisdiction – Foreign investor – Investment – ICSID Convention, Article 25 – Whether the claimants were investors making an investment under the BIT and the ICSID Convention
Jurisdiction – Legality – Corruption – Burden of proof – Whether the State met its burden of proving illegality on the part of the investors
Admissibility – Contract – Umbrella clause – Whether the tribunal could hear claims related to contractual breach under the BIT’s umbrella clause
Applicable law – Property – Municipal law – Whether issues related to property rights would be decided solely under municipal law or under both municipal and international law
Jurisdiction – Investment – Property – Municipal law – Contract – Whether properties had been transferred by universal succession by contract under municipal law
State responsibility – Attribution – ILC Articles on State Responsibility – Internationally wrongful act – Whether the principles of attribution could be applied to conduct that was not an allegedly wrongful act
State responsibility – Attribution – ILC Articles on State Responsibility, Article 4 – State organ – Corruption – Whether the allegedly corrupt acts of officials transformed the attributable conduct of a State organ into purely private acts
State responsibility – Attribution – ILC Articles on State Responsibility, Article 5 – Governmental authority – Whether a privatisation fund was an entity empowered by municipal law to exercise elements of governmental authority
State responsibility – Attribution – ILC Articles on State Responsibility, Article 8 – Effective control – Evidence – Whether there was sufficient evidence to show that a holding company was under the effective control of the State
Contract – Privity – Whether the State was bound by a contract entered into by a State-appointed liquidator
Admissibility – Exhaustion of domestic remedies – Whether there was an obligation to exhaust domestic remedies in the absence of an alleged denial of justice
Expropriation – Direct expropriation – Whether registering State ownership of land without providing compensation constituted a direct expropriation
Expropriation – Indirect expropriation – Real estate – Whether failure to facilitate registration of land led to an indirect expropriation
Expropriation – Indirect expropriation – Contract – Whether contractual rights specific to certain properties were indirectly expropriated
Fair and equitable treatment – Legitimate expectation – Whether there could be a legitimate expectation with respect to properties in which the investors had no property or contractual right – Whether there was a legitimate expectation that the investor would be able to register certain properties – Whether the investors established that the State interfered with their attempt to register ownership contrary to a legitimate expectation
Umbrella clause – Contract – Privity – Whether an umbrella clause can be invoked in respect of contracts entered into with entities that were separate and distinct from the State
Remedies – Compensation – Quantum – Lost rental income – Indirect loss – Causation – Whether the award of compensation should include lost rental income – Whether there was a causal link between the expropriation and indirect loss suffered by the investors
Costs – Loser pays – ICSID Convention, Article 61(2) – Discretion – Whether the State’s share of costs should be reduced when the investors only recovered 2% of the compensation claimed
Bayindir Insaat Turizm Ticaret Ve Sanayi AŞ v. Islamic Republic of Pakistan
- ICSID (Arbitration Tribunal). 14 November 2005 27 August 2009
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 99-117
- Print publication:
- 2022
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Jurisdiction – Investment – Interpretation – Whether the requirement of conformity with local laws under the BIT referred to the definition or the validity of the investment – Whether know‑how, equipment, personnel and financing constituted assets within the meaning of the BIT
Jurisdiction – Investment – ICSID Convention, Article 25 – Whether the elements of the Salini test were satisfied
Jurisdiction – Contract – Relationship between treaty claims and contract claims – Whether the essential basis of the investor’s claims was purely contractual such that the tribunal did not have jurisdiction over such claims
Jurisdiction – Standard of review – Sufficiently substantiated claims – Whether the facts alleged by the investor, if proven true, would be capable of constituting a violation of the BIT such that the tribunal had jurisdiction over the claims
Procedure – Admissibility – Parallel arbitration proceedings – Whether exercising jurisdiction would raise a conflict between the New York Convention and the ICSID Convention
Procedure – Admissibility – Abuse of process – Whether the investor’s conduct in commencing ICSID proceedings when it had previously treated its claims as purely contractual constituted an abuse of process
Procedure – Admissibility – Prerequisites to arbitration – Notice requirements – Waiting period – Whether the investor was permitted to submit the dispute to arbitration in light of the prerequisites in the BIT
Procedure – Stay of proceedings – Whether the tribunal should stay the ICSID proceedings until resolution of the contractual dispute in separate arbitration proceedings
State responsibility – Attribution – State-owned entity – ILC Articles on State Responsibility, Article 4 – Whether a body corporate with separate legal status was an organ of the State
State responsibility – Attribution – State-owned entity – Contract – ILC Articles on State Responsibility, Article 5 – Whether a body corporate was exercising governmental authority in its contractual conduct
State responsibility – Attribution – State-owned entity – Contract – ILC Articles on State Responsibility, Article 8 – Whether actions exercised under a contract by a body corporate were on the instructions of or under the direction or control of the State
Evidence – Contract – Standard of review – Whether the tribunal needed to determine that there was a breach of the contract to decide claims under the BIT
Most-favoured-nation treatment – Interpretation – Fair and equitable treatment – Whether a standard of fair and equitable treatment could be imported through the BIT’s provision for most-favoured-nation treatment – Whether the preamble of the BIT supported that interpretation
Fair and equitable treatment – Legitimate expectation – Legal stability – Whether the investor’s legitimate expectations were frustrated as a result of political volatility
Fair and equitable treatment – Conspiracy – Evidence – Standard of proof – Whether a conspiracy would breach the standard of fair and equitable treatment – Whether the investor had adduced sufficient evidence to meet the high standard for establishing a conspiracy
Fair and equitable treatment – Coercion – Evidence – Whether the investor had adduced sufficient evidence that it had been subjected to coercion or threats by military personnel
Fair and equitable treatment – Due process – Procedural fairness – Transparency – Whether relevant procedural requirements applied to internal decision-making processes of a party to a contract
Fair and equitable treatment – Contract – Sovereign powers – Whether actions carried out by a contractual party were an exercise of sovereign powers in breach of fair and equitable treatment
National treatment – Discrimination – Intention – Whether intent to discriminate was required to find a breach of national treatment
National treatment – Contract – Comparators – Evidence – Whether the investments were in “similar situations” to other contractual arrangements
Most-favoured-nation treatment – Discrimination – Intention – Whether intent to discriminate was required to find a breach of most-favoured-nation treatment
Most-favoured-nation treatment – Contract – Comparators – Evidence – Whether the investments were in “similar situations” to other contractual arrangements
Most-favoured-nation treatment – Evidence – Burden of proof – Whether the investor’s burden could be shifted when its access to information and evidence was limited
Expropriation – Indirect expropriation – Assets capable of being expropriated – Whether interference with contractual rights could lead to expropriation under the BIT
Expropriation – Indirect expropriation – Substantial deprivation – Whether there could be substantial deprivation when the scope of the rights alleged to be expropriated was limited by the counterparty’s rights under the contract
Unión Fenosa Gas, S.A. v. Arab Republic of Egypt
- ICSID (Arbitration Tribunal). 31 August 2018
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 546-570
- Print publication:
- 2022
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Jurisdiction – Investment – Contract – Shares – ICSID Convention, Article 25(1) – Salini test – Whether contract, execution, amendment and performance were an investment under a BIT – Whether shares in a local company were an investment under a BIT – Whether the investments met the guidance provided by the Salini test
Admissibility – Parallel proceedings – Res judicata – Bad faith – Claim-splitting – Whether the claims were inadmissible because the investor’s subsidiary had pursued contractual claims in parallel arbitration proceedings
Procedure – Stay of proceedings – Parallel proceedings – Res judicata – Claim-splitting – Whether the tribunal had to stay the arbitration to await the result of parallel proceedings
Jurisdiction – Investment – Legality – Corruption – Lobbying – Evidence – Whether bribe by a subcontractor to officials affected the legality of the investment – Whether using personal connections for the benefit of the investor was corrupt – Whether paying generous fees to a local representative was evidence of corruption or legitimate lobbying
State responsibility – Attribution – ILC Articles on State Responsibility, Article 4 – State organ – State-owned entity – Whether a national oil company or its subsidiary were organs of the State
State responsibility – Attribution – ILC Articles on State Responsibility, Article 5 – Governmental authority – State-owned entity – Whether a national oil company or its subsidiary were empowered to exercise governmental authority
State responsibility – Attribution – ILC Articles on State Responsibility, Article 8 – Direction or control – State-owned entity – Contract – Whether a national oil company or its subsidiary were directed or controlled by the State – Whether the decision to reduce the supply of natural gas contrary to contractual agreement was made under the direction or control of the State
State responsibility – Attribution – ILC Articles on State Responsibility, Article 11 – Conduct adopted by the State – State-owned entity – Contract – Whether the breach of contract by a national oil company or its subsidiary had been adopted by the State as its own conduct
Fair and equitable treatment – Customary international law – Legitimate expectation – Contract – Taxation – Specific assurance – Whether the standard of fair and equitable treatment was equivalent to the customary minimum standard – Whether legitimate expectations were protected by the customary minimum standard – Whether a contract between the investor and the subsidiary of a national oil company created a legitimate expectation – Whether a letter from a State official created a legitimate expectation – Whether the expectation was relied upon – Whether the expectation was defeated – Whether non-payment under a contract defeated a legitimate expectation – Whether revocation of tax-free status defeated a legitimate expectation
State responsibility – State of necessity – ILC Articles on State Responsibility, Article 25 – Only way – Essential interest – Contribution – Civil unrest – Economic crisis – Contract – Whether non-supply of natural gas was the only way to safeguard an essential interest – Whether maintenance of public safety was the basis for non-supply of natural gas – Whether natural gas shortage was an essential interest – Whether the State contributed to the situation of necessity
Remedies – Compensation – Quantum – Contract – Reduction – Mitigation – Interest – Whether the investor could claim more compensation than available under a contract – Whether the investor suffered loss – Whether the claim for compensation was excessively speculative – Whether lost cash flows were recoverable – Whether the investor suffered lost dividends – Whether compensation should be reduced to reflect lesser need for working capital and taxes – Whether the investor could have mitigated losses – Whether pre-award interest should be awarded – Whether post-award interest should be awarded
Costs – Costs follow the event – Legal fees – Arbitration costs – Whether the unsuccessful party was to pay the legal fees of the successful party – Whether the unsuccessful party was to pay the arbitration costs of the successful party
EDF (Services) Limited v. Romania
- ICSID (Arbitration Tribunal). 8 October 2009 30 May 2008 29 August 2008 23 July 2009 2 October 2009
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 118-140
- Print publication:
- 2022
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Procedure – Provisional measures – Confidentiality – ICSID Convention, Article 47 – ICSID Arbitration Rule 39 – Whether the investor’s actions undermined the integrity of the arbitral process or aggravated the dispute between the parties – Whether the disclosure of witness statements by the State to its anti-corruption authorities violated a previous order on confidentiality of the proceedings – Whether disclosure of information regarding the case to the public aggravated the dispute between the parties
Procedure – Admissibility – Evidence – ICSID Arbitration Rule 34(7) – Authenticity – Delay – Whether the new evidence presented by the investor was admissible – Whether the new evidence was authentic – Whether admission of the new evidence violated the principles of good faith and fair dealing – Whether the request for the admission of new evidence was made without delay
State responsibility – Attribution – ILC Articles on State Responsibility, Article 4 – Whether a financial regulator was a State organ – Whether commercial entities were State organs
State responsibility – Attribution – ILC Articles on State Responsibility, Article 5 – State-owned entity – Governmental authority – Control – Whether the State-owned commercial entities were acting as agents of the State and exercising governmental authority
State responsibility – Attribution – ILC Articles on State Responsibility, Article 8 – Whether the State-owned commercial entities were acting under the instruction, direction or control of the State
Fair and equitable treatment – Legitimate expectation – Corruption – Evidence – Contract – Investigation – Whether there was sufficient proof of the solicitation of a bribe by the State’s officials – Whether the investor had a right to legitimately expect that the duration of the investments would be extended – Whether the State’s challenge of the registration of the share transfer in the joint venture to the investor was in bad faith – Whether the State’s refusal to conclude further lease agreements with the joint venture was justified – Whether the organisation and conduct of auctions for leasing commercial spaces at the airport was justified – Whether the investigation by the State’s financial regulator and confiscation of revenues was proportionate, transparent and in good faith – Whether the enactment of an ordinance reorganising the duty-free regime violated the State’s obligation to accord fair and equitable treatment
Arbitrary or discriminatory measures – Whether the State applied the measures without a legitimate purpose
Expropriation – Creeping expropriation – Whether the State’s measures, either individually or in aggregate, constituted creeping expropriation
Umbrella clause – Contract – State-owned entity – Whether the State had assumed the obligations of the State-owned commercial entities under their respective contracts with the investors – Whether there was a breach of the contracts under their governing law and international law
Costs – Loser pays – Good faith – Whether the loser-pays principle is accepted in investment arbitration – Whether the dispute had been brought by the investor in good faith
Kardassopoulos and Fuchs v. Republic of Georgia
- ICSID (Arbitration Tribunal). 6 July 2007 3 March 2010 21 March 2011
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 141-163
- Print publication:
- 2022
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Jurisdiction – Investment – ICSID Convention, Article 25(1) – Salini test – Whether economic activities in connection with a joint venture constituted an investment
Jurisdiction – Investment – Evidence – Whether there was sufficient documentary evidence that an investor had an interest in a protected investment
Jurisdiction – Investment – Legality – Contract – Municipal law – Whether the concession and agreement through which the investment was made were void ab initio under municipal law – Whether the investment was entitled to protection under the BIT and the ECT even if the concession and agreement were void ab initio under municipal law
Admissibility – Estoppel – Legality – Contract – Municipal law – Whether the State was estopped from objecting to the tribunal’s jurisdiction ratione materiae under the BIT and the ECT on the basis that the concession and agreement could be void ab initio under municipal law
Jurisdiction – Investment – Legality – Legitimate expectation – Governmental authority – Whether the State created a legitimate expectation that the investment was made in accordance with municipal law and would be entitled to treaty protection – Whether agreements were cloaked with the mantle of governmental authority
Jurisdiction – Investment – Legality – Legitimate expectation – Attribution – State-owned entity – Whether representations by State-owned enterprises could be attributed to the State – Whether ultra vires conduct by State-owned enterprises could be attributed to the State – Whether attribution was contingent on the timing of the State’s adherence to the BIT or the ECT
Jurisdiction – Investment – Provisional application – Interpretation – ECT, Article 1(6) – Meaning of “Effective Date” – Whether provisional application of the ECT was equivalent to its entry into force – Whether the ECT was provisionally applicable on the date of the Contracting Parties’ signature of the ECT
Procedure – Burden of proof – Whether the investors were subject to a special or heavy burden of proof in establishing their claims
Admissibility – Equitable prescription – Whether the claims should be time-barred due to the 10-year delay in filing the claims
State responsibility – Attribution – State-owned entity – ILC Articles on State Responsibility, Article 4 – ILC Articles on State Responsibility, Article 5 – ILC Articles on State Responsibility, Article 11 – Structural test – Functional test – Contract – Governmental authority – Whether the contractual commitments, acts and omissions of State-owned entities could be attributed to the State – Whether State-owned entities exercised or purported to exercise governmental authority
Contract – Defence – Municipal law – Scope of rights – Unconscionability – Misrepresentation – Whether the concession and agreement through which the investment was made conferred rights to future pipelines – Whether the investors’ rights were vitiated by virtue of contractual defences raised by the State – Whether the contractual defences of unconscionability, misrepresentation and lack of performance were supported by the evidence
Expropriation – Direct expropriation – Whether the State expropriated the investor’s investment through a governmental decree that deprived its joint venture vehicle of rights in an oil pipeline
Expropriation – Unlawful expropriation – ECT, Article 13(1) – Public interest – Discrimination – Due process – Compensation – Whether the expropriation was in the public interest – Whether the expropriation was carried out in a discriminatory manner – Whether the expropriation was carried out in accordance with due process – Whether the investor was paid prompt, adequate and effective compensation
Fair and equitable treatment – Legitimate expectation – Transparency – Discrimination – Whether the standard required the investor’s expectations to be based on conditions offered by or prevailing in the State at the time the investment was made – Whether the State’s compensation process violated basic requirements of consistency, transparency, even-handedness and non-discrimination
Remedies – Compensation – Quantum – Contract – Stabilisation clause – Whether contractual stabilisation clauses limited damages for expropriation – Whether it was appropriate to compensate for the increase in the value of expropriated rights between the date of the expropriation and the date of the award
Remedies – Compensation – Fair and equitable treatment – ILC Articles on State Responsibility, Article 36 – Valuation methodology – What was the standard of compensation applicable to a breach of the fair and equitable treatment standard
Costs – Third-party funding – Whether third-party funding should be taken into account in the award of costs
Annulment – Procedure – Whether annulment proceedings should be suspended pending resolution of the application for revision of an award
Flemingo DutyFree Shop Private Limited v. Republic of Poland
- Permanent Court of Arbitration. 12 August 2016
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 326-359
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- 2022
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Jurisdiction – Investment – Indirect investment – Shares – Contract – Concession – Whether an indirect investment in shares constituted a protected investment – Whether lease agreements entered into by a local subsidiary qualified as protected contractual rights or concessions
Jurisdiction – Foreign investor – Indirect investment – Made in the territory – Remoteness – Whether the investor made an investment in the State’s territory by acquiring shares in an investment that had previously been made – Whether the investor was not protected because it was not the ultimate beneficiary of the investment – Whether the investor was too remote from the original investment
Admissibility – Forum shopping – Parallel proceeding – Municipal law – Whether the claims were inadmissible because the investor had engaged in forum shopping – Whether the claims were inadmissible because the impugned acts were still being litigated in the domestic courts
State responsibility – Attribution – State-owned entity – ILC Articles on State Responsibility, Article 4 – De facto State organ – Whether an airport operator was a State organ under customary international law
State responsibility – Attribution – State-owned entity – ILC Articles on State Responsibility, Article 5 – Governmental authority – Whether an airport operator exercised governmental authority regarding the impugned termination of lease agreements
Evidence – Adverse inferences – Document production – Attribution – Whether adverse inferences on the attribution of conduct should be drawn from the State’s refusal to comply with the tribunal’s document production orders
Fair and equitable treatment – Contract – Bad faith – Evidence – Municipal law – Whether lease agreements were terminated in bad faith – Whether judicial findings of abuse of right under municipal law were relevant to the standard of fair and equitable treatment
Expropriation – Contract – Whether the termination of lease agreements expropriated the investment without compensation
Remedies – Compensation – ILC Articles on State Responsibility, Article 31(1) – Full reparation – Lost profits – One-time expenses – Valuation date – Discounted cash flow – Whether full reparation included loss of profits – Whether there was any material difference between operating costs and lost profits – Whether the investor was entitled to recover one-time expenses arising from termination of the lease agreements – Whether the investor had established a realistic scenario of lost profits but for the termination of the lease agreements – Whether discounted cash flow was the best method to determine the lost profits of an income-producing investment – Whether subsequent reduction of shareholding was relevant to the assessment of compensation
Costs – UNCITRAL Rules, Article 40(1) – Costs follow the event – Circumstances of the case – Whether the circumstances allowed the tribunal to depart from the principle that costs should follow the event
Tulip Real Estate Investment and Development Netherlands BV v. Republic of Turkey
- ICSID (Arbitration Tribunal). 10 March 2014 7 March 2014 30 December 2015
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 220-266
- Print publication:
- 2022
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Jurisdiction – Investment – ICSID Convention, Article 25 – Whether an investment can be composed of interrelated transactions
Admissibility – Representative claims – Whether claims may be asserted on behalf of a non-party to the proceeding
State responsibility – Attribution – ILC Articles on State Responsibility, Article 4 – State organ – Whether a State-owned real estate developer was an organ of the State – Whether a majority shareholding by the State triggered a presumption that the entity was an emanation of the State
State responsibility – Attribution – ILC Articles on State Responsibility, Article 5 – Governmental authority – Contract – Whether a State-owned real estate developer was empowered by municipal law to exercise governmental authority – Whether an entity’s affiliation with a State organ and the enjoyment of preferential rights under municipal law implied an exercise of public authority – Whether the entity exercised puissance publique in its contractual negotiation, performance or termination
State responsibility – Attribution – ILC Articles on State Responsibility, Article 8 – Effective control – Contract – Whether shared management of a real estate developer by State organs and parastatal entities could be relevant for attribution – Whether the commercial soundness of a decision was relevant to attribution – Whether contractual termination was an expression of sovereign power
Jurisdiction – Contract – Whether claims arising out of a contractual termination may constitute treaty claims
Fair and equitable treatment – Interpretation – Legitimate expectation – Legal stability – Contract – Whether standard required proactive protection of legal stability and predictability – Whether any precontractual representations provided the basis for legitimate expectations regarding zoning – Whether the decisions of a State-owned real estate developer not to grant further extensions and ultimately to terminate a contract were a breach of fair and equitable treatment
Expropriation – Contract – Whether a recommendation by a State organ entity to terminate a contract meant that the termination was an improper exercise of sovereign power
Full protection and security – Interpretation – Contract – Police – Whether the standard of full protection and security imposed an obligation of strict liability – Whether the involvement of police forces in the termination of a contract implied a breach of full protection and security
Umbrella clause – Domestic legislation – Whether a claim under the domestic investment legislation of the host State could be elevated to a breach of international law
Investment promotion – Interpretation – Whether a failure to promote and protect investments constituted a discrete breach of the BIT
Costs – Costs follow the event – Whether the unsuccessful party should bear the arbitration costs
Annulment – Serious departure from a fundamental rule of procedure – ICSID Convention, Article 52(1)(d) – Interpretation – Right to a fair trial – VCLT, Article 31(3)(c) – Human rights – Whether human rights instruments were relevant to the interpretation of the concept of a fundamental rule of procedure
Annulment – Serious departure from a fundamental rule of procedure – ICSID Convention, Article 52(1)(d) – Attribution – Evidence – Whether a tribunal disregarded critical evidence relevant to attribution
Annulment – Manifest excess of powers – ICSID Convention, Article 52(1)(b) – Jurisdiction – Attribution – Whether a tribunal’s determination on the merits despite lack of jurisdiction for want of attribution was a manifest excess of powers
Annulment – Failure to state reasons – ICSID Convention, Article 52(1)(e) – Attribution – ILC Articles on State Responsibility, Article 8 – Whether a tribunal failed to state reasons for concluding that a State-owned real estate developer was acting under the instruction or control of the State
Gustav F W Hamester GmbH & Co KG v. Republic of Ghana
- ICSID (Arbitration Tribunal). 18 June 2010
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 164-219
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- 2022
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Jurisdiction – Investment – Legality – Fraud – Whether the investment had been procured on the basis of the investor’s fraudulent activity
Jurisdiction – State responsibility – Attribution – Whether an objection to jurisdiction for want of attribution should be addressed on the merits
State responsibility – Internationally wrongful act – ILC Articles on State Responsibility, Article 2 – Whether the State was responsible for any act that interfered with an investor’s rights regardless of who committed the impugned act
State responsibility – Attribution – ILC Articles on State Responsibility, Article 4 – De facto organ – Whether the impugned acts were performed by an organ of the State – Whether a corporate body was a de facto organ of the State
State responsibility – Attribution – ILC Articles on State Responsibility, Article 5 – Puissance publique – Joint venture – Contract – Shareholder dispute – Whether a corporate body was empowered with governmental authority – Whether impugned acts of a corporate body were performed through the exercise of governmental authority – Whether contractual negotiations evidenced the exercise of governmental authority – Whether a contractual dispute over the failure to supply goods evidenced the exercise of governmental authority – Whether a dispute between shareholders of a joint venture vehicle evidenced the exercise of governmental authority
State responsibility – Attribution – ILC Articles on State Responsibility, Article 8 – Effective control – Whether the State exercised general control over a corporate body – Whether the State exercised specific control over impugned acts of a corporate body
Expropriation – Harassment – Criminal investigation – Evidence – Whether there was sufficient evidence of alleged harassment by police officers – Whether a criminal investigation into an employee of the investor contributed to an alleged expropriation
Expropriation – Management rights – Joint venture – Government interference – Evidence – Whether there was evidence of instructions from the State to the investor’s joint venture partner that resulted in the expropriation of the investor’s management rights
Expropriation – Export ban – Joint venture – Government interference – Evidence – Whether there was evidence that the imposition of an export ban was controlled by the State – Whether the imposition of an export ban was motivated by the legitimate commercial fears of a joint venture partner
Umbrella clause – Contract – Joint venture – Whether the State was responsible under international law for a corporate body’s alleged breach of contract – Whether the impugned acts were the exercise of sovereign powers or purely contractual – Whether elevating contract claims to treaty claims would undermine the purpose of the investment treaty regime
Fair and equitable treatment – Legitimate expectation – Contract – Joint venture – Whether contractual rights were sufficient to ground a legitimate expectation under international law
Saint-Gobain Performance Plastics Europe v. Bolivarian Republic of Venezuela
- ICSID (Arbitration Tribunal). 3 November 2017 27 February 2013 30 December 2016 21 December 2016 24 October 2018
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 360-405
- Print publication:
- 2022
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Procedure – Challenge to arbitrator – ICSID Convention, Article 57 – ICSID Convention, Article 14 – Independence – Impartiality – Issue conflict – Whether previous administrative or political appointments in government led to manifest lack of qualifications to exercise independent judgment – Whether an arbitrator’s previous advocacy on behalf of a State created the risk of an issue conflict
Admissibility – Attribution – Contract – Whether alleged breaches of a contract entered into by an investor’s subsidiary and a State-owned entity were attributable to the State – Whether the alleged breaches of contract should be determined on the merits of the alleged breach of the standard of fair and equitable treatment
Admissibility – Procedure – Incidental or additional claim – Whether a claim was untimely if raised for the first time in the hearing on jurisdiction and merits – Whether there was sufficient opportunity for both parties to respond to the claim
Expropriation – Interpretation – Measures – Particular undertaking – Whether the term “measures” required an expropriation to consist of a formal exercise of government powers – Whether notion of a particular undertaking included other provisions of a BIT or was limited to external agreements entered into by the State
Expropriation – Prompt compensation – Interpretation – Good faith – VCLT, Article 31(1) – Manifestly absurd or unreasonable – VCLT, Article 32(b) – Municipal law – Whether the payment of prompt compensation required the State to specify a certain figure constituting the amount of compensation on the date of expropriation – Whether that interpretation contravened the principle of good faith interpretation – Whether that interpretation led to a manifestly absurd or unreasonable result – Whether a tribunal had to examine whether municipal law implemented an expropriation procedure in accordance with the BIT
Expropriation – De facto expropriation – Whether acquiring de facto control of an investment with the aim of ultimately carrying out an expropriation could amount to an expropriation
Expropriation – Attribution – Non-State actors – ILC Articles on State Responsibility, Article 8 – ILC Articles on State Responsibility, Article 11 – Whether the physical takeover of a plant by former workers, union officials and sympathetic politicians was under the instructions of, or under the direction or control of, the State – Whether causality between a presidential announcement and the physical takeover was sufficient to attribute the conduct of non-State actors – Whether the subsequent adoption of the conduct of non-State actors by a State-owned entity vested with governmental authority was attributable to the State
Expropriation – Attribution – State-owned entity – ILC Articles on State Responsibility, Article 5 – Whether the presence of a State-owned entity in the investor’s abandoned plant was merely in a caretaker capacity for reasons of public safety – Whether the State-owned entity was vested with governmental authority to nationalise the plant
Procedure – Judicial economy – Remedies – Whether a tribunal had to make a finding on an alleged breach of the standard of fair and equitable treatment when it would not have altered the amount of compensation to which the investor was entitled
Fair and equitable treatment – Legitimate expectation – Legal stability – Contract – Attribution – State-owned entity – Whether a legitimate expectation of the contractual performance of a State-owned entity at a certain price can be formed in the absence of a specific commitment from the State guaranteeing such performance or price – Whether any breach of contract had been established – Whether it was necessary to address the issue of attribution in the absence of contractual breach
Full protection and security – Legal stability – Contract – State-owned entity – Whether the State had an obligation to protect an investor from alleged contractual breaches by a State-owned entity
Remedies – Compensation – Expropriation – Quantum – Fair market value – Discounted cash flow – Country risk premium – Evidence – Whether a finding of unlawfulness was relevant to the standard of compensation for expropriation – Whether the value of the investment was higher on the date of expropriation or the date of award – Whether fair market value could be determined using the method of discounted cash flow – Whether the discount rate applied to future cash flows should include the risk of expropriation as part of the country risk premium – Whether the evidence presented by the parties’ experts determined the correct variables of future cash flows – Whether a reduction in future profits should be made to account for the investment’s dependence on the investor’s marketing and distribution networks – Whether the investor was entitled to compensation for historical losses arising from increases in the price of inputs
Remedies – Compensation – Interest – Compound interest – Whether interest should be calculated on a simple basis because compound interest was prohibited under municipal law – Whether compound interest would ensure full reparation under international law for the time value of the investor’s losses
Annulment – Procedure – Seat – ICSID Convention, Article 62 – Whether annulment proceedings may be conducted in a place different from the seat of ICSID absent agreement of parties
Annulment – Procedure – Stay of enforcement – Whether a stay of enforcement of the award should be lifted because the applicant for annulment failed to pay an advance on costs
Annulment – Procedure – Suspension of proceedings – Whether annulment proceedings should be suspended because the applicant for annulment failed to pay an advance on costs
Ortiz Construcciones y Proyectos SA v. People’s Democratic Republic of Algeria
- ICSID (Arbitration Tribunal). 29 April 2020
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 571-610
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- 2022
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State responsibility – Attribution – ILC Articles on State Responsibility, Article 4 – State organ – De jure State organ – De facto State organ – Whether complete dependence on the State could be established by the performance of core State functions, daily subordination to central government, or the absence of any operational autonomy – Whether the execution of a mission of public interest sufficed to qualify an entity as a State organ – Whether State supervision amounted to daily subordination or lack of operational autonomy
State responsibility – Attribution – ILC Articles on State Responsibility, Article 5 – Governmental authority – Whether an entity was authorised by law to exercise elements of public authority – Whether the impugned acts were performed in the context of such governmental authority – Whether acts performed in the public interest pertained to governmental authority
State responsibility – Attribution – ILC Articles on State Responsibility, Article 8 – Instructions, direction or control – Whether control referred to overall or effective control – Whether control can be evidenced by the overall context of the relationship with the State – Whether such control should extend to the act that was being challenged – Whether ultra vires acts and conduct were attributable – Whether the alignment of interests with the State was sufficient for attribution
Fair and equitable treatment – Legitimate expectation – Specific promise – Material advantage – Whether an investment should have been made on the basis of the alleged expectation – Whether an expectation can be based on vague promises to grant work
Fair and equitable treatment – Good faith – Evidence – Whether a breach of good faith required a proof of bad faith conduct – Whether an uncorroborated witness statement can evidence threats by the State
Fair and equitable treatment – Unjustified, incoherent or arbitrary conduct – Whether the terms “unjustified” and “arbitrary” were equivalent – Whether a failure to succeed in contractual negotiations can evidence an unjustified or incoherent conduct
Non-impairment – Fair and equitable treatment – Judicial economy – Whether the non-impairment standard overlapped with fair and equitable treatment
Umbrella clause – Interpretation – VCLT, Article 33 – Reconciliation of equally authentic texts – Whether the clause covered non-contractual obligations
Costs – Good faith – Whether the unsuccessful party should not be ordered to pay the successful party’s costs because the former brought the proceeding in good faith
Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan
- ICSID (Arbitration Tribunal). 10 November 2017
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- Journal:
- ICSID Reports / Volume 20 / 2022
- Published online by Cambridge University Press:
- 06 July 2022, pp. 453-511
- Print publication:
- 2022
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Procedure – Preliminary objections – Time limits – Special circumstances – ICSID Arbitration Rules, Rule 41 – ICSID Arbitration Rules, Rule 26(3) – Whether there were special circumstances for the State’s new evidence of alleged corruption to be considered as preliminary objections after the hearing
Procedure – Corruption – Waiver – Laches – Acquiescence – Whether the doctrine of laches barred the State’s new evidence of corruption – Whether the State had waived or acquiesced to the alleged instances of corruption
Evidence – Corruption – Standard of proof – Indirect evidence – Circumstantial evidence – Whether the standard of proof for alleged corruption allowed for a tribunal to consider indirect or circumstantial evidence
Evidence – Corruption – Burden of proof – Whether the burden of proof shifted once prima facie evidence of corruption had been established
Evidence – Corruption – Causation – Whether a party alleging corruption had to show that a benefit would not have been obtained but for the corrupt act – Whether an alleged act of corruption must concern foundational rights to impact upon a tribunal’s jurisdiction
Evidence – Authenticity – Adverse inference – Whether a party’s refusal to allow the testing of a document’s authenticity invited an adverse inference of fabrication
Jurisdiction – Investment – Corruption – Attribution – Whether allegedly corrupt acts prior to the establishment of the investment were proved – Whether proven acts of corruption were attributable to the investor
Jurisdiction – Investment – Legality – Interpretation – Whether the BIT imposed a strict legality or formal admission requirement – Whether the retroactive invalidation of a contract was relevant to the legality of the investment
Admissibility – Corruption – Causation – Whether improper conduct in the performance of the investment was proved – Whether proven acts of corruption were causally linked to any right or benefit obtained by the investor – Whether proven acts of corruption were attributable to the investor
Admissibility – Contract – Whether the existence of a contract under municipal law was a matter of admissibility or merits
State responsibility – Attribution – Territorial unit – Government officials – ILC Articles on State Responsibility, Article 4 – ILC Articles on State Responsibility, Article 7 – Whether the conduct of provincial authorities and their officials was attributable to the State
State responsibility – Attribution – Autonomous institution – Governmental authority – ILC Articles on State Responsibility, Article 5 – ILC Articles on State Responsibility, Article 8 – Whether the conduct of an autonomous development agency was an exercise of governmental authority – Whether an autonomous entity was directed or controlled by the State
Fair and equitable treatment – Interpretation – Autonomous standard – Legitimate expectation – Whether the BIT referenced the minimum standard under customary international law or created an autonomous standard of treatment – Whether the standard protected the legitimate expectation of an investor
Fair and equitable treatment – Legitimate expectation – Contract – Regulatory framework – Specific assurance – Whether a contract gave rise to a legitimate expectation – Whether the regulatory framework gave rise to a legitimate expectation – Whether specific assurances of government officials gave rise to a legitimate expectation – Whether the investor’s legitimate expectation was breached by denying its application for a mining lease – Whether the State had executed a plan to take over the investment – Whether there were nevertheless legitimate reasons for the State to deny the application for a mining lease – Whether the application for a mining lease was denied on the basis of routine regulatory requirements
Expropriation – Indirect expropriation – Substantial deprivation – Regulatory power – Whether the measure resulted in substantial deprivation of value or rendered useless an investor’s rights – Whether the measure was a legitimate exercise of regulatory power – Whether the State complied with the criteria for lawful expropriation
Non-impairment – Interpretation – Whether the State’s obligation not to impair investments was qualified by the words “subject to its laws” – Whether the absence of usual qualifications meant that any impairing measures were in breach of the standard – Whether the State’s measures were arbitrary, discriminatory or unreasonable
Counterclaim – Jurisdiction – Consent – Municipal law – Standing – Whether the tribunal had jurisdiction to hear counterclaims – Whether consent to counterclaims was limited to treaty law or extended to contract and public law – Whether the State had standing to arbitrate the rights and obligations entered into by a territorial unit and its agencies under municipal law
Counterclaim – Legality – Interpretation – Whether a legality requirement in a treaty definition gave rise to any obligation of the investor with corresponding liability