Judicial decisions and arbitration awards in the system of international investment law sources.

JUDICIAL DECISIONS

Article 38(1)(d) of the ICJ Statute provides that judicial decisions (along scholarly writings) constitute "subsidiary means for the determination of rules of law". Though this provision indicates that judicial decisions play only a secondary role, international courts (and remarkably the ICJ) take part in the law-making process and significantly influence the development of international law. As Pellet stated:

".. [T]here is no doubt that, in reality, the international jurisprudence and, primarily, the case law of the Court has been a powerful tool of consolidation and of evolution of international law."81

Decisions of international tribunals also play a significant role in the reality of international investment jurisprudence.82 Thus, almost all investment awards in the recent two decades include numerous references to prior decisions of investment tribunals.83 As discussed above,84 investment tribunals often cite decisions of the ICJ as an authoritative statement of existing international legal rules, prominently ICJ decisions regarding reparations,85 state responsibility86 and the law of treaties.87 The role of judicial decisions in investment law brings to the fore the sensitive question regarding the precedential value of previous decisions of investment tribunals.

Article 59 of the ICJ Statute88 (mentioned also in Article 38(1)(d)), as well as Article 1136 of the NAFTA, 89 clearly reject the doctrine of precedent in international law90 and investment tribunals have emphasized that they are not bound by awards rendered by other tribunals. Thus, for instance, the AES tribunal (Jurisdiction) stated in that regard:

…. The provisions of Article 25 of the ICSID Convention together with fundamental principles of public international law dictate, among others, that the Tribunal respects: … d) the rule according to which each decision or award delivered by an ICSID Tribunal is only binding on the parties to the dispute settled by this decision or award. There is so far no rule of precedent in general international law; nor is there any within the specific ICSID system for the settlement of disputes between one State party to the Convention and the National of another State Party.

Notwithstanding such statements regarding the absence of the doctrine of precedent in international investment law, investment tribunals are likely to follow accretion of rulings on the same subject matter (in similar circumstances) and develop jurisprudence constante to enhance stability and predictability in this sphere. Thus, it is clear that "a de facto practice of precedent certainly" exists in international investment law, and most tribunals carefully examine earlier decisions and accept these as authority most of the time.

Summarizing the existing state of affairs in investment jurisprudence, the Suez tribunal stated as follows:

In interpreting this vague, flexible, basic, and widely used treaty term, this Tribunal has the benefit of decisions by prior tribunals that have struggled strenuously, knowledgeably, and sometimes painfully, to interpret the words “fair and equitable” in a wide variety of factual situations and investment relationships. Many of these cases arose out of Argentina‟s economic crisis of 2001-2003. Although this tribunal is not bound by such prior decisions, they do constitute “a subsidiary means for the determination of the rules of [international] law.” Moreover, considerations of basic justice would lead tribunals to be guided by the basic judicial principle that „like cases should be decided alike,‟ unless a strong reason exists to distinguish the current case from previous ones. In addition, a recognized goal of international investment law is to establish a predictable, stable legal framework for investments, a factor that justifies tribunals in giving due regard to previous decisions on similar issues. Thus, absent compelling reasons to the contrary, a tribunal should always consider heavily solutions established in a series of consistent cases.

The extensive reliance of investment tribunals on previous decisions of other investment tribunals led Fauchald, after an empirical study of the case-law97 of the ICSID tribunals, to the observation that "it was quite common for tribunals to use case law as a means to establish a presumption in favor of one result, and thus for placing a burden of proof on one of the parties".

Still, it is important to emphasize that the above pattern of jurisprudence constante in most spheres of investment law does not imply that investment tribunals always adopt the same position adopted by former tribunals. This is particularly true with regards to inconsistent interpretations of similar treaty provisions regarding umbrella clauses,99 the defense of "necessity" (under the ILC rules on state responsibility),100 and the applicability of BITs' MFN clauses to dispute settlement provisions.

Date: 2016-03-03; view: 703