sharing in governance of extractive industries
We are pleased to announce a forthcoming Transnational Dispute Management (TDM, ISSN 1875-4120) special issue on "Judicial Measures and Investment Treaty Law"
Investment treaty claims arising out of judicial conduct-whether based on annulment of a contract for corruption or other irregularity or a fundamental jurisprudential shift-have been on the rise. For example, in 2009, the Supreme Administrative Court of Egypt invalidated a decision by the Petroleum Minister and the Nazif Cabinet to sell natural gas to the East Mediterranean Company because the contract was fixed at below market prices. Likewise, in 2012, based on a public interest litigation, the Indian Supreme Court cancelled 122 spectrum licenses due to irregularities in the way the government granted those licenses. The cancellation of these telecommunication licenses affected the investments of foreign companies and a few of them, including Khaitan Holdings Mauritius Limited, Sistema, and Telenor served notices of arbitration to India alleging that cancellation of its licenses by the Indian Supreme Court violated investment treaty obligations. Again, in 2010 and 2011, the Canadian courts invalidated two of Eli Lilly's patents on the ground that they did not meet the requirement under Canadian patent law that an invention be "useful." In turn, Eli Lilly brought an international arbitration against Canada under Chapter 11 of the NAFTA in 2012 because in "the mid-2000s, after the patents had been examined and granted, but prior to their invalidation by the courts, Canada's patent utility law underwent a dramatic transformation," which arguably was inconsistent with Canada's obligations to protect patents under NAFTA.
Furthermore, the recent decisions by the Indian and Pakistan supreme courts might be a cause of concern to foreign investors: In March 2017, the Supreme Court of Pakistan declared that Sindh Coal Authority and Special Initiative Department were working illegally and do not have powers to execute different projects and schemes worth over Rs. 105 billion, and the Indian Supreme Court ruled that new vehicles sold anywhere in the country must comply with more stringent emissions standards from April 1, 2017, a move that leaves carmakers saddled with more than 800,000 older and more highly polluting vehicles they are unable to sell.
To a foreign investor affected by such judicial measures, it is not always clear, however, what judicial measures (especially in countries like India with one of the most activist Supreme Courts in the world) can be subject to a claim under investment treaty law; which theory of liability is appropriate for a state's liability arising out of judiciary's conduct (or omissions); and which policy issues these different theories of liability raise. Recently, the tribunal in Eli Lilly & Co. v. Canada issued its much-awaited award rejecting Eli Lilly's claims against Canada. The Eli Lilly tribunal declined to answer the question "whether conduct that does not constitute a denial of justice may nonetheless be capable of qualifying as a violation of NAFTA Articles 1105 or 1110." The tribunal, however: (1) observed that judicial measures can result in expropriation if "a judicial decision crystallizes a taking alleged to be contrary to NAFTA Article 1110"; and (2) was "unwilling to shut the door of the possibility that judicial conduct characterized other than as a denial of justice may engage a respondent's obligations under NAFTA Article 1105, within the standard articulated in the award in Glamis Gold v. U.S." The Eli Lilly award draws attention to the international investment treaty standards available to foreign investors from host state's judicial measures, in particular because the award seems to recognize that dramatic, radical, or fundamental jurisprudential shifts in the approach of a country's highest courts might result in expropriation.
This TDM special, thus, will be a unique, timely, and significant contribution to the current debate on investment treaty claims arising out of judicial measures. The special will explore the legal dimensions of judicial measures and potential theories for a state's liability under investment treaty law. Additionally, the special will explore the appropriate remedy for judicial measures - should it be something different than compensation? See e.g., Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 560 U.S. 702 (2010). Based on an exhaustive review of domestic and international law jurisprudence (including ECHR and Inter-American Court of Human Rights), the special will discuss (among others) the following topics:
We invite all those with an interest in the subject to contribute articles or notes on one of the topics above or any other related issue.
More information about the timeline and contact information is available here TDM Call for Papers: Special Issue on Judicial Measures and Investm...
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