The Application of the Principle of Proportionality in Certain Issues of International Investment Arbitration
Date Issued
2015
Date
2015
Author(s)
Chen, Kailin
Abstract
International investment arbitration is a burgeoning field of International law, with more than three thousand Bilateral Investment Treaties signed, the provisions of which include not only dispute settlement clauses, but also allowing foreign investors to claim against host countries without exhausting domestic remedies, which makes the issues related to investor-state dispute settlements more and more variant and complex. However, at the same time, there are several significantly controversial cases, more than the traditional issues of international investment law such as expropriation, which aimed at the protection of investors, while criticized for inappropriately intrusive for the general exercising of host countries’ regulatory rights. As to the tension between foreign invstors and host countries, some called “legitimacy crisis.” The Argentina cases relating to the emergency measures it took in reaction to the 2001/2002 economic crises exemplified the tension between the two actors in international investments law. Faced with the challenges as above, the investment tribunals tried to mediate the tension between the protection of investors and the discretionary powers of host countries, and one of instruments employed by tribunals was proportionality analysis. It could play a key role in the balance of competing interests of investors and host countries. As to the principle of proportionality, it has been considered a constitutional principle in many countries, yet the methodology and substantive content of it is still somewhat ambiguous. Consequently, this article tries to argue that the principle of proportionality is an “emerging” general principle of law at least. On this basis, as to the application of principle of proportionality, this article tries to focus on four key issues of international investment law, including indirect expropriation, non-precluded measures clauses, fair and equitable treatment and the amount of indemnity, discussing the practical application and the pros and cons as well. Furthermore, base on the discoveries discussed, to preserve adequate regulatory space for host countries, this articles tries to argue that the key element in applying principle of proportionality in international investment law is to choose the appropriate standard of review.
Subjects
international investment arbitration
principle of proportionality
investor-state dispute settlement (ISDS)
bilateral investment treatie (BITs)
international investment treaties (IIAs)
indirect expropriation
fair and equitable treatment (FET)
non-precluded measures clauses
indemnity
damages
compensation
standard of review
Type
thesis
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