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This chapter assesses whether BITs have achieved their objectives. The first part of the chapter examines the historical movement to form BITs. The second part explores the goals motivating BITs, namely foreign investment protection, market liberalization, and foreign investment promotion. The next three parts assess the success of BITs in achieving each of these goals. The chapter concludes by considering the implications of the BIT movement for the further development of international investment law.

This chapter has two main objectives. The first is to provide an overview of the evolution of Canada's approach to investment protection, with particular focus on dispute settlement. The second objective is to identify the essential elements that now underpin Canada's approach to investment protection. It argues that principles central to the Canadian legal system, such as procedural fairness and due process, are now incorporated as quasi sine qua nons in Canada's approach to investment protection. These principles are consonant with the ICSID Convention's objectives to settle investment disputes in an orderly manner and to protect, to the same extent and with the same vigour, the investor and the host State in the general interest of development.

Chapter 4 offers a legal assessment of the orientation of EU foreign investment law. It identifies and analyzes the principles and objectives that determine the exercise of EU competence in the field of foreign investment. Chapter 4 offers firstly an insight into the specific principles and objectives that EU action in the field of foreign investment adheres to and pursues, emphasizing their position within the broader framework of the general objectives of EU external action. Secondly, Chapter 4 considers the application of these principles and objectives in practice, looking at the objectives pursued by existing (and future) EU International investment Agreements and assessing whether the legal mechanisms that are established in EU IIAs are suitable and sufficient for achieving the envisaged objectives.

This chapter examines the alleged requirement to resort to local remedies before a violation of a substantive standard of international investment law can be diagnosed, despite a waiver of the requirement to exhaust local remedies as, for example, contained in Article 26 ICSID. It begins by briefly outlining the function of the local remedies rule in international law and the waiver contained in Article 26 of the ICSID Convention. It then considers the related practice of arbitral tribunals. Finally, it discusses considerations of principle which the cases canvass as well as a number of related questions will be discussed.

This chapter examines the increasing number of international investment disputes where issues relating to environmental rights, sustainable development and foreign investment protection were inextricably intertwined, in order to determine whether arbitrators have approached such interrelationships by taking environmental and sustainable development principles into consideration. It identifies the status and relevance accorded to environmental principles and obligations, either of a customary or treaty nature, in investor-state disputes. The chapter's purpose is to shed into light the extent to which arbitrators are prepared to take into account the obligation of host states to protect the environment and their citizens' right to a healthy environment. The final part of the chapter focuses on the relationship between investment law and the exercise of environmental participatory rights (information, public participation, and access to justice in environmental matters) at the national level.

Many bilateral as well as multilateral investment treaties contain in their provisions on the definition of investment a requirement that the investment has to be made in the territory of the host State, while other treaties do not contain language to that effect. This issue has been addressed briefly in some International Centre for Settlement of Investment Disputes (ICSID) cases but has not played a major role among the judicial requirements usually examined by tribunals. In two recent North American Free Trade Agreement (NAFTA) Chapter 11 cases, Bayview v Mexico and Canadian Cattlemen for Fair Trade v United States, the tribunals for the first time rejected jurisdiction because the claimants had not made an investment in the territory of the respondent State. This chapter analyzes the reasoning and the findings of the tribunals in these two cases and tries to determine the relevance of the territorial nexus in investment arbitration. While the focus will be on Bayview and the Canadian Cattlemen Claims, previous ICSID cases that have addressed the issue is also considered.

This chapter examines the issues of admission and establishment in the context of international investment protection. It explores the link between the admission and entry of investors and the protection they receive under bilateral investment treaties (BIT) and other international investment agreements. It identifies the different approaches in admission and establishment in BIT and regional trade agreements and analyses recent awards dealing with admission in accordance with the laws and regulations of the host state.

This chapter examines recent investment arbitration practice related to the standard of investment protection known as full protection and security. Full protection and security traditionally enjoyed an undisputed scope of application in the field of physical protection of the assets and individuals connected with an investment; however, this standard is less frequently applied than other standards. The analysis of arbitration practice in the obligation to provide full protection and security shows that the standard is interpreted substantially in the same way under the treaties and under general international law.

This chapter focuses on the role of the most-favoured-nation (MFN) clause in the BIT. It considers the RosInvest decision, which is believed to be the first case where an arbitral tribunal has allowed a claimant to use an MFN clause in one treaty to incorporate the dispute settlement clause in another treaty. It argues that although the decision breaks new ground, it is unlikely that we have reached the end of the road as regards the debate about the effects of MFN clauses in BITs because most MFN clauses are different from each other and must be interpreted against the background of the facts and circumstances of each individual case.

This chapter addresses the post-Second World War development of the international minimum standard that took place in a markedly different substantive and procedural context from the earlier law-making efforts. Three legal avenues in particular were pursued. The first approach almost exclusively focused on compensation for expropriation, leaving the traditional international standard at the level of an insignificant criterion of lawfulness. The second approach proposed a synthesis of the international standard and human rights, and, while being clearly rejected, suggested some potential for a subtler engagement with human rights reasoning. Finally, the third approach bound the international standard into the investment protection treaties and constitutes the focus of this book.

This chapter shows that tribunals overwhelmingly accept the application of umbrella clauses to obligations assumed unilaterally by host States. It follows that, where a treaty for the protection of investments containing an umbrella clause is applicable, the violation of a unilateral undertaking, made through legislation or otherwise, would amount to a violation of the treaty.

Investment has traditionally been regulated at the international level through bilateral investment treaties (BITs). Therefore, individual EU Member States have concluded their own BITs with third states, including Korea. As a result, the standards that currently apply to European and Korean investors will often vary depending on which BIT, if any, applies to them. Yet, recent amendments to the scope of the common commercial policy under the Treaty on the Functioning of the European Union mean that the EU is now competent to enter into treaties on this subject matter by itself. This development offers the opportunity to negotiate a uniform legal framework that applies equally to all European and Korean investors. This chapter starts by explaining the key areas of divergence in existing BIT practice. It then goes on to explain the extent to which investment is addressed under the EU-Korea FTA in the provisions on establishment and payments and capital movements. Having found that the FTA falls short of establishing a uniform regime for the protection of investors, the chapter explores the legal issues that may arise in the negotiation of a comprehensive EU-Korea investment agreement.

This chapter argues that the discussion on trade and investment will not take off unless we first put together all the pieces of the jigsaw puzzle. Both the discussion in the Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) suffer in this respect. Although the two negotiations were substantially different, neither of them adequately examined the incentive structure of the capital-importing countries. To do that, the first step should be a thorough inquiry not only into their motives for signing investment agreements, but for accepting a harmonized international regulatory framework. Instead of taking an affirmative response for granted, there are reasons to believe that the issue should be rather framed as a question: Do developing (capital-importing) countries benefit from a harmonized regime? The first section of the chapter provides a brief description of the attempts to multilateralize existing bilateral agreements on protection of investment. The second section moves to discuss what has not happened while attempting to multilateralize investment protection, and why it is crucial, assuming that there is willingness by stakeholders to enact such a framework. The last section concludes.

The objective of this chapter is to describe and assess the EU’s attempts to negotiate investment protection and ISDS provisions EU free trade agreements within the context of the wider debate concerning the future direction of international investment law. It outlines the historical evolution of international investment law, the main debates surrounding this area, the EU’s current policy with regard to investment protection and the content of investment protection and ISDS clauses included in EU free trade agreements.

This chapter explains the importance of the issues addressed in the book and outlines the structure of the argument. The relationship between international minimum standard and fair and equitable treatment is of considerable theoretical and practical importance for contemporary international law in general and investment protection law in particular. The book will address the issue in three steps, exploring the historical law-making process in Part I, setting out the sources framework in Part II, and identifying the content of the modern international standard in Part III.

Having undertaken a review of its bilateral investment treaties (BITs) and their impact on domestic policy space, the South African Government has begun terminating these treaties and has indicated that it will refrain from entering into BITs in the future, except where there are compelling economic reasons to do so. In their place the Government is developing legislation that will offer certain BIT-type protections to foreign and local investors, but will also ensure that the Government’s capacity to regulate in the public interest is adequately safeguarded. As this chapter shows, however, the standard of investment protection likely to be found in this legislation falls some way short of that found in customary international law and in those BITs that the Government is currently in the process of terminating.

This introductory chapter explains the coverage of this book, which is about the standards for protection of international investment. This book examines the interrelationships among different investment protection standards and the protection of investors from arbitrary and unreasonable measures. It discusses the most-favoured-nation (MFN) clauses in bilateral investment treaties, the legality of expropriation and the guarantees of money transfers in and out of the host state.