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Journal of International Dispute Settlement
Editorial
Tom Grant
Editorial
International dispute settlement today contains a proliferation of forms. It is not (yet) the case that every type of economic relationship is potentially subject to an international jurisdiction, but the possibilities are now vast. From the most mundane commercial transactions between consumers and business, to foreign direct investment, to trade between States on the largest scale, a great diversity of subject matter may give rise to disputes subject to an international dispute settlement mechanism. This issue of the Journal of International Dispute Settlement-the first of volume II-contains articles which examine, inter alia, WTO panels, ICSID arbitration, international commercial arbitration and the role of European public law as a framework for arbitration under consumer contracts. The reader will find detailed analysis here of a number of contemporary problems, and also consideration of some long-standing issues confronting parties, advocates and arbitrators. The contributors to this issue address, among other themes, how international dispute settlement mechanisms can achieve that modicum of consistency and predictability expected under the rule of law. The proliferation of forms means a proliferation of decision-makers, of parties and of substantive rules. Yet it cannot be that every arbitration, every investment treaty, and, for example, every occurrence of an expression like 'most-favoured nation treatment' equates to a novel result, isolated from others and independent of any system. At the same time, arbitral jurisdiction exists by virtue of the consent of the parties; parties are justifiably dissatisfied, if the arbitrator forgets the limits of that consent.
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Articles
Gilbert Guillaume
The Use of Precedent by International Judges and Arbitrators
In national legal systems, precedent constitutes the starting-point of judges' reasoning. Most of the time, judges hew closely to precedent for purposes of legal certainty and for fear that their decisions might be challenged before higher instances. This practice translates into the stare decisis rule in Common Law, and into the concept of jurisprudence constante in Roman-German Law. In international law, the stare decisis rule has been excluded since 1922, but permanent jurisdictions constantly refer to their previous decisions. Nonetheless, the former are still led to reassess their jurisprudence by various methods in order to take into consideration the evolutions of the law and of international society. Regional jurisdictions are more inclined to do so than global ones. As for arbitral tribunals, they have recourse to legal precedents in a very variable manner according to the area: interstate relationships, international trade, investment or sport. Furthermore, the increase in the number of courts and arbitral institutions introduces the question whether precedents from one dispute settlement institution are relevant to others. The question arises when two courts or tribunals apply the same national law or treaty and when they apply general international law. The challenge is to navigate between two risks: that of jurisprudential incoherence and that of government by judges. Legal precedent in international dispute settlement is neither to be worshipped nor ignored.
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W. Michael Reisman
Soft Law and Law Jobs
In this article, the author discusses various consequences of the softness of soft law. He acknowledges that the concept of soft law is useful for certain endeavours in international law, such as understanding the international law-making process and the politics behind the adoption of legal instruments. But, for the activities of international judges and arbitrators, he contends that soft-law should be avoided. By appending the adjective 'soft' to the notion of law, we introduce the idea that legality obtains by degrees, a soft law rule being a rule 'slightly' legal in character. This, in turn, introduces uncertainty into a regulatory regime. And uncertainty is a disincentive for engaging in economic activities and it is a favoured technique of authoritarian governments. Hence, international judges and arbitrators should apply, and apply only, the law that comes without the adjective 'soft'.
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Anastasios Gourgourinis
The Distinction between Interpretation and Application of Norms in International Adjudication
This article addresses the distinction between interpretation and application of international legal norms and argues that it constitutes an issue central to the theory and practice of international adjudication. The distinction, though sometimes negated, surpassed or simply neglected, in fact exists and should be drawn by international lawyers, especially vis-à-vis the challenges set by the fragmentation of international law. Ergo, an illustrative operative sketch of juridical reasoning delimiting the two processes in the course of international dispute settlement is suggested by distinguishing between interpretation, interpretative application and application stricto sensu, as all taking place in the context of application lato sensu of international legal norms. The article concludes by turning to the secondary norms on state responsibility and the general principles of estoppel and acquiescence as noteworthy examples of lato sensu application of leges generales in international settlement of disputes.
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Thomas Schultz
The Concept of Law in Transnational Arbitral Legal Orders and some of its Consequences
If an arbitration system, hypothetically disconnected from states, were to seek to replicate the rule of law beyond the state, in its own transnational order, what would it look like? This question, which seems current given the proliferation of international dispute resolution mechanisms and the continuing rise of international arbitration, formed an implicit theme of the scholarship known as the School of Dijon. Some 30 years ago, the School of Dijon asserted the existence of non-national legal systems revolving around arbitration mechanisms, such as the lex mercatoria. Over the years, their claim developed into the argument that these systems' own legality forms a basis for claims of autonomy from the state, the presence of law dispensing from the need for control by another legal order. This article argues, first, that this line of arguments is an enthymeme, as the concept of law has been the object of a near wholesale eschewal of definitional attention by the School of Dijon and its kindred theories. The article then maintains that any concept of law used for the aforementioned rhetorical and political purposes ought to include the fundamental principles of the rule of law. It then examines the guise that the rule of law takes when applied to transnational adjudicative normative orders instead of national legal systems.
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Sébastien Manciaux
The Representation of States before ICSID Tribunals
This article discusses different facets of the representation of States in investment arbitration with a focus on ICSID arbitrations. It reviews rules governing the determination of the representatives of a State, practical issues that arise with respect to such determination and the particulars of the ICSID system in appointing representatives of States. It then examines how problems relating to the representation of a State can be dealt with by curing the lack of authority of the person purporting to act on behalf of the State, by ratification of the acts in question, by reliance on the principles of estoppel and good faith and by invocation of the responsibility of the respondent State.
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Zachary Douglas
The MFN Clause in Investment Arbitration: Treaty Interpretation Off the Rails
In this article the author revisits the vexed question of whether the jurisdiction of an international tribunal, established in accordance with the terms of the basic treaty, can be expanded by reference to the terms of a third treaty through the investor's reliance upon the MFN clause in the basic treaty. The recent line of cases suggesting that no general answer to that question can be provided in view of the nuanced differences in the wording of MFN clauses is considered and criticized as failing to pay adequate attention to the principles of general international law as mandated by Article 31(3)(c) of the Vienna Convention on the Law of Treaties. The application of those principles leads to a negative answer to the question. A claim for MFN treatment secures the treatment represented by the third treaty, it does not effect the automatic incorporation of the terms of the third treaty into the basic treaty before the investor files its claim. Moreover, for the investor to assert a claim for MFN treatment it must first accept the standing offer of international arbitration in accordance with the terms of the basic treaty and at that point an arbitration agreement comes into existence. The terms of that agreement cannot be amended retroactively at the suit of one of the parties. There is a fundamental distinction in general international law between the substantive obligations in a treaty, which are addressed to the state parties, and the provisions that create a jurisdictional mandate for an international tribunal, which are addressed to the tribunal and to the disputing parties, who enter into a relationship of procedural equality once arbitration proceedings have been commenced. This distinction must be respected by investment treaty tribunals in confronting the question of the scope of MFN clauses.
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August Reinisch
How Narrow are Narrow Dispute Settlement Clauses in Investment Treaties?
The scope of jurisdiction of investment tribunals is a crucial question which often leads to protracted arguments in the course of regularly bifurcated arbitration proceedings. In recent years an increasing number of cases involved narrow dispute settlement clause in BITs which relate to the amount and mode of compensation only in cases of expropriation. Tribunals have differed on the appropriate reading of such clauses, in particular, on whether they should be regarded as excluding the issue whether an expropriation has occurred in the first place or not. In addition, some investment tribunals have relied on the post-Maffezini interpretation of MFN clauses in order to extend their jurisdiction beyond the narrow issue of the amount and mode of compensation. In its first part, this article intends to provide a comprehensive overview of the existing jurisprudence on this matter. Secondly, it analyses the different interpretation techniques resorted to by investment tribunals ultimately demonstrating that neither of them cogently leads to a certain outcome.
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Leonila Guglya
The Interplay of International Dispute Resolution Mechanisms: the Softwood Lumber Controversy
The Article discusses the interrelation of 'competing' international mechanisms for the settlement of disputes originating from the same factual background. The problem is assessed with reference to the of the fourth and fifth phases of the Softwood Lumber controversy between the United States and Canada-an immense dispute featuring the interplay between domestic litigation, investment arbitration and dispute settlement conducted under the rules of different chapters of the regional trade agreement (North American Free Trade Agreement), WTO dispute settlement, as well as interstate arbitration proceedings conducted within the London Court of International Arbitration under specially 'customized' rules of the latter.
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Maud Piers
Consumer Arbitration in the EU: A Forced Marriage with Incompatible Expectations
This article explores the way in which the European Union (EU) legal order interacts-or maybe rather 'collides'-with the world of arbitration. The EU invariably refuses to consider arbitration as a full-fledged alternative to court proceedings. Arbitrators, in turn, take great liberty in defining the legal rules to which they will adhere. This article offers no prescriptions on how both worlds should ideally coexist but rather examines how and why they continue to operate as two distinct and almost antagonistic legal orders. It also points to the potential consequences of this stand-off for both legal orders. The article focuses on consumer regulation/arbitration. The case-law ensuing from the Directive 93/13 on unfair terms in consumer contracts offers a particularly useful starting point for this inquiry.
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Isabelle Van Damme
On 'Good Faith Use of Dictionary in the Search of Ordinary Meaning under the WTO Dispute Settlement Understanding'-A Reply to Professor Chang-Fa Lo
This short article comments on the merits of Professor Chang-Fa Lo's proposed eight rules for the good faith use of dictionaries in interpreting the World Trade Organization (WTO) covered agreements, which are formulated in reaction to the heavy and steady reliance on dictionaries in WTO dispute settlement. This reply questions the underlying premise for the need of such rules, and cautions against making conclusory statements about the value of using dictionaries and the need to rely on dictionaries in treaty interpretation in isolation from an appreciation of the function of other interpretive elements recognized under customary principles of treaty interpretation.
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Cesare P.R. Romano
A Taxonomy of International Rule of Law Institutions
This article revises and updates a seminal article written by the author in 1998, which was the first attempt to tally how many and what kind of international courts and tribunals existed at that point in time. It contained a chart that placed international courts and tribunals in a larger context, listing them alongside quasi-judicial bodies, implementation-control and other dispute settlement bodies. The present article has three aims. The first is to provide an update, since several new bodies have been created or have become active in the last decade. The second aim is a bit more ambitious. It is time to revise some of the categories and criteria of classification used back in 1998. More than a decade of scholarship in the field by legal scholars and political scientists has made it possible to gain a better understanding of the phenomenon. The abundance of data over a sufficiently long time-span is making it possible to start moving away from a mere 'folk taxonomy' towards a more rigorous scientific classification. The hallmark of truly scientific classifications is that classifying is only the final step of a process, and a classification only the means to communicate the end results. Besides making it possible to discover and describe, scientific classifications crucially enable prediction of new entities and categories. Thus, the third aim of this article is to attempt to discern some trends and make some predictions about future developments in this increasingly relevant field of international law and relations.
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