Conclusion

2019 ◽  
pp. 175-176
Author(s):  
Federico Ortino
Keyword(s):  
Foreign Investment ◽  
Regulatory Change ◽  
Foreign Investments ◽  
Host State ◽  
Investment Treaty ◽  
Investment Treaties

This section highlights the present study’s key findings. First, from the very beginning, protections afforded to foreign investments by modern investment treaties have been exceptionally broad, including guarantees vis-à-vis the host State’s (a) breach of investment contracts and regulatory change; (b) substantial deprivation of the value of the foreign investment; and (c) unreasonable conduct. Second, while a growing number of investment tribunals as well as new investment treaties have started to rein in such broad protections, the evolution of key investment treaty provisions has been (and in many ways still is) marred by inconsistency and uncertainty. Lastly, while there appears to be a growing preference in arbitral practice (as well as treaty practice) for reasonableness-based guarantees, there is still no clarity with regard to the specific reasonableness test that should be employed in order to review the lawfulness of the host State conduct under an investment treaty.

5 The Microeconomics of Investment Treaties

2017 ◽  
Author(s):  
Bonnitcha Jonathan ◽  
Skovgaard Poulsen Lauge N ◽  
Waibel Michael
Keyword(s):  
Decision Making ◽  
Foreign Investment ◽  
Fiscal Illusion ◽  
Foreign Investors ◽  
Host State ◽  
Investment Protection ◽  
The Third ◽  
Investment Treaty ◽  
Investment Treaties ◽  
The Impact

This chapter surveys the impact of investment treaties on decision-making at the firm and government levels. The focus is on whether investment treaties’ influence on the decisions of firms and states leads to improvements in efficiency. The first section examines the ‘hold-up’ problem, which provides the most influential and coherent microeconomic justification for the inclusion of investment protection provisions in investment treaties. The second section explores the problem of ‘fiscal illusion’ in host state decision-making, which could result in ‘over-regulation’ of foreign investment in the absence of an investment treaty. The third section considers whether investment treaties solve problems of discrimination against foreign investors, as well as the possibility that investment treaties lead to discrimination in favour of foreign investors.

Ensuring Reasonableness in the Conduct of Host States

2019 ◽  
pp. 101-174
Author(s):  
Federico Ortino
Keyword(s):  
Foreign Investments ◽  
Host State ◽  
Police Powers ◽  
Investment Treaty ◽  
Fair And Equitable Treatment ◽  
Investment Treaties ◽  
Equitable Treatment ◽  
Full Protection

The aim of the chapter is twofold. First, it investigates the extent to which investment treaties include a guarantee of ‘substantive reasonableness’ as one of the key protections granted to foreign investments. Second, it attempts to identify the standard of review that have been employed by investment tribunals in assessing the lawfulness of host States’ conduct. The analysis focuses on the following treaty provisions: (a) full protection and security; (b) non-impairment through arbitrary or unjustifiable measures; and (iii) fair and equitable treatment. This chapter also examines the application by investment tribunals of the ‘police powers’ doctrine in defining an indirect expropriation. One key finding stems from the present analysis. While investment treaty tribunals have (at least for the most part) applied these open-ended standards as reasonableness-based provisions, tribunals have crucially differed with regard to the specific reasonableness test employed in order to review the lawfulness of the host State conduct.

scholarly journals Screening of Foreign Investments and the Bilateral Investment Treaties of Bangladesh

2021 ◽  
Vol 3 (2) ◽  
pp. 37-53
Author(s):  
Mohammad Belayet Hossain ◽  
Asmah Laili Bt Yeon ◽  
Ahmad Shamsul Bin Abdul Aziz
Keyword(s):  
Significant Role ◽  
Foreign Investment ◽  
Research Method ◽  
Bilateral Investment Treaties ◽  
Host Countries ◽  
Foreign Investments ◽  
Foreign Investors ◽  
Host State ◽  
Investment Treaties ◽  
The Government

Since 1960, about 2852 bilateral investment treaties (BITs) have been signed. Of them, 2298 BITs are in force at present. In the last 61 years, the WTO members failed to conclude a global treaty to regulate FDI in host countries, consequently, the BITs have played a significant role to regulate FDI. As a member of the WTO, Bangladesh has signed 31 BITs so far with various states to allow and increase the inflow of FDI into the country. Bangladeshi foreign investment laws and BITs mainly protect foreign investors. However, neither of them has any specific provision regarding the screening of foreign investments in Bangladesh. Two questions have been addressed in this paper: (a) Do the BITs of Bangladesh allow the host state for screening of foreign investments at the entry stage? (b) Should the screening of FDI be required during the pre-entry stage in Bangladesh? In this paper, a doctrinal research method has been used to critically analyze 15 BITs to explore whether there is any reference for screening of foreign investments in Bangladesh. We find that the existing Bangladesh BITs have provisions to promote and protect foreign investments but have no reference in relation to the screening of foreign investments. Therefore, the author has recommended that the Government of Bangladesh can consider specific provisions for screening of FDI in future BITs.

15 Investment Treaty Dispute Settlement

2021 ◽  
Author(s):  
Salacuse Jeswald W
Keyword(s):  
Dispute Settlement ◽  
International Investment ◽  
State Governments ◽  
Rule Based ◽  
Host State ◽  
Rule Based System ◽  
Investment Treaty ◽  
Diplomatic Protection ◽  
Domestic Courts ◽  
Investment Treaties

This chapter focuses on investment treaty dispute settlement, examining the nature of conflicts between investors and states and the various means provided by treaties to resolve them. In general, investor–state disputes governed by treaties occur because a host state has taken a ‘measure’ that allegedly violates that state's treaty commitments on the treatment it has promised to accord to investments protected by that treaty. Before the advent of investment treaties, investors basically had three methods to seek resolution of their disputes with host states: (a) direct negotiation with host state governments; (b) domestic courts in the host country; and (c) diplomatic protection by their home states. In order to establish a stable, rule-based system for international investment, treaties provide means to resolve disputes about the interpretation and application of treaty provisions. Most investment treaties provide four separate dispute settlement methods: (1) consultations and negotiations between contracting states; (2) arbitration between contracting states; (3) consultations and negotiations between covered investors and host governments; and (4) investor–state arbitration.

A Pareto-Improving Compensation Rule for Investment Treaties

2021 ◽  
Vol 24 (1) ◽  
pp. 181-202
Author(s):  
Emma Aisbett ◽  
Jonathan Bonnitcha
Keyword(s):  
Law And Economics ◽  
Time Inconsistency ◽  
Legal Rights ◽  
Legal Regime ◽  
Host State ◽  
Investment Treaty ◽  
Specific Proposal ◽  
Investment Treaties ◽  
Pareto Improving ◽  
Compensation Rule

ABSTRACT Investment treaties grant foreign investors legal rights to compensation for losses caused by certain host state conduct. Many states are reconsidering their involvement in these treaties because they perceive the risks to outweigh the benefits. We start from the normative premise that participation in investment treaties should benefit both ‘host’ and ‘home’ states. Using a law and economics approach, we model a variety of common fact scenarios that arise in investment treaty arbitration. Our modelling demonstrates that being party to an investment treaty does not necessarily benefit a host state. The objective of mutual benefits would be achieved if investment treaties were modified to provide only the minimum protection necessary to solve time inconsistency problems for the host state and, thereby, deter opportunistic conduct. The treaties should not place wider constraints on legal and policy change. Our specific proposal is that a state should only have to compensate the investor if it breaches or modifies the domestic legal regime governing the investment and that compensation should be the lesser of the investor’s loss and the host state’s gain from the host state not having had the new legal regime in place when the investment was made.

Striking the Right Balance Between the Interests of the Foreign Investors and the Host State – A Case Study of the Tanzania-Germany BIT 50 Years After Its Conclusion

2017 ◽  
Vol 25 (1) ◽  
pp. 1-19
Author(s):  
Tomasz P. Milej
Keyword(s):  
Foreign Investments ◽  
Foreign Investors ◽  
Host State ◽  
Investment Treaty ◽  
General Feeling ◽  
Policy Objectives ◽  
The Right ◽  
Development Objectives ◽  
The Relationship

Fifty years ago, Tanzania and Germany concluded a bilateral investment treaty (BIT). The main features of this BIT differ from what is common today. The article examines the adequacy of the Treaty's stipulations against the backdrop of the controversies which the conclusion of the BITs has recently sparked in developing states and in Tanzania in particular. It discusses the nexus between the conclusion of the BITs and the inflow of foreign investments. As there is a general feeling among Tanzanian scholars that the BITs are too favourable to investors at the expense of local firms and legitimate policy objectives of the host state, various claims have been made with respect to the content of the investment treaties. Taking the Tanzania-Germany BIT as a case study, the article analyses these claims in the context of a global debate on the relationship between the need for the protection of foreign investors and sustainable development objectives. Finally, the future of the Tanzania-Germany BIT is discussed in the light of the post-Lisbon EU approach to the investment policy.

16 The Consequences of Treaty Violations

2015 ◽  
Author(s):  
Salacuse Jeswald W
Keyword(s):  
International Law ◽  
State Responsibility ◽  
Vienna Convention ◽  
Customary International Law ◽  
Host State ◽  
Investment Treaty ◽  
The Law ◽  
Investment Treaties

This chapter examines the consequences of treaty violations for states and the remedies available to an investment when a host state fails to provide the treatment it has promised. It first considers the fact that most investment treaties do not specifically state the consequences of a state’s breach of treaty provisions. However, on issues not specifically covered by treaty, all investment treaties authorize tribunals to apply customary international law in making decisions, including determining compensation for investments affected by the breach of treaty provisions. The chapter then discusses the application of customary international law on state responsibility and investment treaty remedies in general, citing the Draft Articles on Responsibility of States for Internationally Wrongful Acts and the Vienna Convention on the Law of Treaties in particular. Finally there is a discussion of valuation techniques used to determine the amount of damages.due to injured investors.

Part IV Guide to Key Substantive Issues, 21 The National Treatment Obligation

2018 ◽  
Author(s):  
Bjorklund Andrea K
Keyword(s):  
Historical Development ◽  
National Treatment ◽  
Foreign Investors ◽  
Host State ◽  
Investment Treaty ◽  
Investment Treaties ◽  
National Treatment Obligation ◽  
Investment Agreements

Most investment agreements contain a national treatment obligation, which requires that a host State treat foreign-owned investments at least as well as similarly situated national investments, or foreign investors as well as domestic investors. This chapter first explores the historical development of the national treatment obligation. It then addresses national treatment in practice, with particular reference to the investment treaty practice of the last decade and a half. As part of that examination, it sets forth the difficult and unresolved issues in the national treatment jurisprudence, including the hurdles that claimants face in establishing a national treatment claim. Finally, it addresses some of the reservations to national treatment that States have included in their investment treaties.

Article: Investment Treaties and Transition from Authoritarian Rule

2014 ◽  
Vol 15 (5-6) ◽  
pp. 965-1011 ◽  
Author(s):  
Jonathan Bonnitcha
Keyword(s):  
International Law ◽  
Political Science ◽  
Political Change ◽  
Market Value ◽  
Authoritarian Rule ◽  
Foreign Investments ◽  
Foreign Investors ◽  
Investment Treaty ◽  
Democratic Regimes ◽  
Investment Treaties

Following recent events in Egypt, Libya, Myanmar (Burma) and Tunisia, foreign investors have lodged international claims under investment treaties. Several of these cases follow a common fact pattern. They concern foreign investments acquired from authoritarian governments substantially below market value through transactions that were not arms’ length. Subsequently, new governments sought to renegotiate these contracts and concessions, or to change the regulatory arrangements that govern them. The investors then invoked the protections of an investment treaty. This article draws on political science scholarship on transition. It argues that investment treaties risk constraining the ability of incoming democratic regimes to consolidate their position, and questions the normative justifications for applying the principle of full market value compensation to situations in which investments were not acquired on a full market value basis. These conclusions are relevant to wider debates about the tension between legal stability and political change in international law.

scholarly journals ‘The Making of an Investment’ in the Context of the Temporal Scope of Investment Treaty Protection. Does the Indian Metals & Ferro Alloys Ltd v. Republic of Indonesia Award of 29 March 2019 Constitute a Breakthrough?

2021 ◽  
Vol 10 (1) ◽  
pp. 9-42
Author(s):  
Michał Pyka
Keyword(s):  
Legal Framework ◽  
International Investment ◽  
Arbitral Tribunal ◽  
Host State ◽  
Investment Treaty ◽  
Investment Arbitration ◽  
The Future ◽  
Legitimate Expectations ◽  
Investment Treaties ◽  
Legal Character

This contribution deals with the question of the legal character of investment treaty claims, brought to international investment arbitration, when alleged breaches of investment treaty obligations towards an investor occurred after the entry into force of an investment treaty but before the making of an investment by an investor. The analysis of the existing legal framework allows for the conclusion that the said acts of a host state are generally excluded from the scope of investment treaty protection. An arbitral tribunal neither has jurisdiction over these acts nor is it allowed to apply substantive treaty provisions thereto. This conclusion stems from the principle of intertemporal law and numerous provisions of investment treaties constituting the implementation or modification of this principle. Nevertheless, an arbitral tribunal is not fully deprived of the possibility of considering the acts of a host state preceding the making of an investmentand undertaken before any activity of the future investor took place. It can consider them as evidence of the intent of a host state, acts creating legitimate expectations of an investor or acts constituting elements of what is termed a continuing act.

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