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Diplomatic protection within the context of international investment law.

The exercise of diplomatic protection can be traced back to the Middle Ages, if not earlier. The theory underlying the principle of diplomatic protection is that an injury to a state’s national is an injury to the state itself, for which it may claim reparation from any responsible state.Through the exercise of diplomatic protection, the home state makes a claim against the host state for an injury to the home state’s national. First, the state must bring the claim in accordance with the rules relating to international claims, including the nationality of claims. These rules determine the eligibility of persons for whom a state may espouse a claim and address issues such as whether continuous nationality is required from the time of injury to adjudication of the claim. Second, state responsibility for injury to foreign nationals may not be invoked if ‘the rule of exhaustion of local remedies applies and any available and effective local remedy has not been exhausted.’Before a state may exercise diplomatic protection, the foreign national must have sought redress in the host state’s domestic legal system.

Finally, the right to exercise diplomatic protection is at the discretion of the espousing state. A state may decide not to exercise protection for reasons unrelated to the merits of the claim, particularly if the state has other diplomatic, military or geo-political objectives that might be compromised by making a claim. As a result of this discretionary power, absent international treaty rights of action, a foreign investor has no control over the international claim-making process.

As will be seen, IIAs provide a treaty-based right to bring claims through investor-state arbitration. The extent to which elements of the international law relating to diplomatic protection, such as the rules relating to continuous nationality, are relevant to IIA claims remains unsettled.

After World War II two developments had an impact on the law of diplomatic protection. First, the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 1965, and a myriad of bilateral investment treaties (BITs) facilitate the protection of foreign investment. These treaties, which relax the rules governing the nationality of claims and the exhaustion of local remedies, have substantially changed the legal environment of international investment and reduced appeals to diplomatic protection in respect of property claims.

Secondly, the advent of the human rights treaty has seen the conferral of rights on individuals which may be asserted not only against an individual’s own State but also against other States, without the intervention of the individual’s national State. Many have argued that this makes diplomatic protection redundant.

Diplomatic protection is therefore today not the only instrument of international law that may be used by an individual whose personal or property rights have been unlawfully violated abroad by a foreign government. BITs provide protection for the investments of foreigners and human rights treaties offer remedies for the violation of personal human rights. But diplomatic protection remains a mechanism of international law that is still employed by States to secure just treatment for their nationals abroad. Moreover it has largely lost its reputation as a procedure used by rich, developed nations to interfere in the domestic affairs of developing nations. This is evidenced by the manner in which developing nations have not hesitated to invoke international law’s oldest mechanism for the protection of aliens abroad.




Date: 2016-03-03; view: 1041


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