Acknowledgements ................................................. v
Chapter 1 Foreign Investment Disputes ........................... 1
§1.01 Introduction ............................................... 1
§1.02 A Brief History of Foreign Investment ...................... 2
§1.03 The International Commitment to Encouraging and
Protecting Foreign Investment .............................. 8
§1.04 What is a Foreign Investment Dispute? ..................... 10
§1.05 Investment Treaties ....................................... 10
§1.06 International Forums for Resolving Investment Disputes .... 12
§1.07 Political Risk Insurance .................................. 13
§1.08 Applicable Law ............................................ 14
§1.09 International Claims ...................................... 14
§1.10 Procedure and Proof ....................................... 16
§1.11 Transparency and the Role of NGOs ......................... 16
§1.12 Sovereign Immunity and the Enforcement of State Awards .... 17
§1.13 Sources of Information about Foreign Investment Disputes .. 17
A Selected Websites and Other On-line Resources ............. 17
B Selected Sources for Locating Case Law .................... 18
C Selected Authoritative Treatises .......................... 18
D Selected Journals [in alphabetical order .................. 19
Chapter 2 Treaty Arrangements for Bilateral Investment
Disputes ........................................................ 21
§2.01 Introduction: Why Treaties Have Been Concluded With
Respect to International Investment ........................... 21
A Jeswald W. Salacuse, BIT by BIT: The Growth of Bilateral
Investment Treaties and Their Impact on Foreign
Investment in Developing Countries, 24 Int'l Law.655,
659-660 (1990) ............................................. 21
B Comments and Questions ..................................... 22
§2.02 Precursors of Modern Investment Treaties .................. 24
A Treaties of Friendship, Commerce and Navigation ............ 24
1 John F. Coyle, The Treaty of Friendship, Commerce and
Navigation in the Modern Era, 51 Colum. J. Transnat'l
L. 302,303-304,319-323 (2013) ........................... 24
2 Kenneth J. Vandevelde, The Bilateral Investment
Treaty Program of the United States, 21 Cornell
Int'l L.J. 201,203-208 (1988) ........................... 25
3 Comments and Questions .................................. 27
В Treaty of Friendship, Commerce and Navigation Between
the United States of America and Israel .................... 28
1 Treaty of Friendship, Commerce and Navigation Between
the United States of America and Israel (1951), 5
U.S.T. 550 (1954) ....................................... 28
2 Comments and Questions .................................. 39
§2.03 History of Attempts to Create Bilateral Investment
Treaties ...................................................... 40
A Jeswald W. Salacuse, BIT by BIT: The Growth of Bilateral
Investment Treaties and Their Impact on Foreign
Investment in Developing Countries, 24 Int'l Law. 655,
655-658 (1990) ............................................. 40
B Alice Hadley, Do China's BITs Matter? Assessing the
Effect of China's Investment Agreements on Foreign
Direct Investment Flows, Investors' Rights, and the
Rule of Law (unpublished paper, Yale Law School 2013) ...... 42
C Comments and Questions ..................................... 44
§2.04 Modern Investment Treaties ................................ 45
A Bilateral Treaties ......................................... 45
1 Rudolf Dolzer and Margrete Stevens, Bilateral
Investment Treaties, 10-11 (Martinus Nijhoff
Publishers 1995) ........................................ 45
2 Kenneth J. Vandevelde, United States Investment
Treaties: Policy and Practice, 19-20 (Kluwer Law
International 1992) ..................................... 46
3 US Model Bilateral Investment Treaty (2012) ............. 47
4 German Model Bilateral Investment Treaty (2008) ......... 77
5 United States-Singapore Free Trade Agreement (2004),
Chapter 15: Investment 83
6 United States-Chile Free Trade Agreement (2005),
Chapter 10 Investment (2005) ........................... 100
7 Comments and Questions ................................. 120
B Multilateral Treaties ..................................... 122
1 North American Free Trade Agreement (1992),
Chapter Eleven: Investment (1992) ...................... 122
2 Energy Charter Treaty (1994) ........................... 137
3 Dominican Republic-Central America Free Trade
Agreement (2004), Chapter Ten: Investment .............. 144
4 ASEAN Comprehensive Investment Agreement (2009) ........ 162
5 Agreement Among the Government of Japan, the
Government of the Republic of Korea and the
Government of the Peoples Republic of China for the
Promotion, Facilitation and Protection oflnvestment
(2012) ................................................. 184
§2.05 Structure of the Treaties and Obligations Undertaken
by States .................................................... 200
A Dispute Resolution ........................................ 200
1 Forums to Which Consent is Given ....................... 201
2 Compañía deAguas delAconquija, S.A. and Compagnie
Générale des Eaux v. Argentine Republic (ICSID Case
No.ARB/97/3), Award of 21 November 2000 [Francisco
Rezek (pres.), Thomas Buergenthal, Peter
D. Trooboff ............................................ 201
3 Compañía de Aguas del Aconquija, S.A. and Vivendi
Universal (formerly Compagnie Générale des Eaux)
v. Argentine Republic (ICSID Case No.ARB/97/3),
Decision on Annulment of 3 July 2002 [L. Yves
Fortier, C.C., Q.C. (pres.), James R. Crawford,
José Carlos Fernandez Rozas] ........................... 202
B Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States [ICSID or
Washington Convention] (1965), 575 U.N.T.S. 159 ........... 204
C Comments and Questions .................................... 209
§2.06 Interpretation of Treaties ............................... 210
A Vienna Convention on the Law of Treaties (1969) 1155
U.N.T.S. 331 .............................................. 210
B Comments and Questions .................................... 211
Chapter 3 Investment Contracts and Key Clauses ................ 213
§3.01 Introduction ............................................. 213
§3.02 Investment Agreements .................................... 215
A US Model Bilateral Investment Treaty (2012), Definition
of Investment Agreement ................................... 215
B Case Law .................................................. 216
l Chevron Corp (USA) and Texaco
Petroleum Co (USA) v. Republic of Ecuador (PCA Case
No.34877), Interim Award of 1 December 2008,59-60
[Karl-Heinz Böckstiegel (pres.), Charles N. Brower,
Albert Jan van den Berg] ............................... 216
2 Chevron Corp (USA) and Texaco Petroleum Co (USA)
v. Republic of Ecuador (PCA Case No.2009-23),
Third Interim Award on Jurisdiction and Admissibility
of 27 February 2012, 10-12 [W. Veeder (pres.),
Horacio Alberto Grigera Naón, Vaughan Lowe] ............ 217
§3.03 Key Investment Contract Clauses .......................... 219
A Arbitration Clauses ....................................... 219
l Arbitration Clauses .................................... 219
a Noah Rubins and N. Stephen Kinsella, International
Investment, Political Risk, and Dispute Resolution:
A Practitioner's Guide, 43-45,261 (Oceana
Publications 2005) .................................. 219
b R. Doak Bishop, A Practical Guide For Drafting
International Arbitration Clauses, 1 Int'l Energy
L. & Tax'n Rev. 16,16,20-23 (2000) .................. 220
c Gary B. Born, International Arbitration and Forum
Selection Agreements: Drafting and Enforcing, 38
(Kluwer Law International 2010) ..................... 221
2 Examples of Arbitration Clauses ........................ 223
a ICSID Model Clauses ................................. 223
b UNCITRAL Model Arbitration Clause ................... 224
c Angola Model Production Sharing Agreement for
Deep Water Blocks (February 1992), 141 Basic
Oil Laws & Concession Contracts: South & Central
Africa 1,84 (2004) .................................. 225
d UMC Production Sharing Contract Dated 29 June
1992 Between the Republic of Equatorial Guinea &
United Meridian International Corp., 135 Basic
Oil Laws & Concession Contracts: South & Central
Africa 1,55-57 (1998) 225 [3] Comments and
Questions ........................................... 226
B Choice-of-Law Clauses ..................................... 227
1 M. Sornarajah, The Settlement of Foreign Investment
Disputes, §3.1 at 47-49 (Kluwer Law International
2000) .................................................. 227
2 Noah Rubins and N. Stephen Kinsella, International
Investment, Political Risk, and Dispute Resolution:
A Practitioner's Guide, 47-49 (Oceana Publications
2005) .................................................. 228
3 Examples of Choice-of-Law Clauses ...................... 230
a Trinidadian & Tobagon Model Production Sharing
Contract for Deep Water Areas, HIS Energy,
Petroleum, Economics and Policy Solutions (PEPS)
Database ............................................ 230
b UMC Production Sharing Contract Dated 29 June
1992 Between the Republic of Equatorial Guinea
& United Meridian International Corp., 135 Basic
Oil Laws & Concession Contracts: South & Central
Africa 1,59 (1998) .................................. 230
c Oil Concession Agreement Dated 13 October 1980
Between the Government of Abu Dhabi & Amerada
Hess Petroleum Abu Dhabi Ltd., 75 Basic Oil Laws
& Concession Contracts: Middle East 5,17 (1982) ..... 230
d Pennzoil/Lukoil Group Agreement Dated 10 November
1995 on Production Sharing for the Karabakh and
Area Adjacent in the Azerbaijan Sector of the
Caspian Sea Between the State Oil Co. of the
Azerbaijan Republic (Socar) and Lukoil
International, et al., 23 Basic Oil Laws &
Concession Contracts Russia & NIS 1,105 (2003) ...... 231
e Texaco Exploration Pakistan Petroleum Concession
Agreement Dated 6 November 1990 Between the
Islamic Republic of Pakistan, Oil & Gas
Development Corp., & Texaco Exploration
Pakistan Inc., 116 Basic Oil & Concession
Contracts: Asia & Australia 2,97 (1993) ............. 231
4 Case Law on Choice-of-Law Clauses ...................... 231
5 Comments and Questions ................................. 231
C Force Majeure Clauses ..................................... 232
1 Karl-Heinz Böckstiegel, Arbitration and State
Enterprises: A Survey on the National and
International State of Law and Practice, 37-39,
42-48 (Kluwer Law International 1984) .................. 232
2 Examples of Force Majeure Clauses ...................... 237
a Angola Model Production Sharing Agreement For
Deep Water Blocks (February 1992), 141 Basic Oil
Laws & Concession Contracts: South & Central
Africa 1,85 (2004) .................................. 237
b Concession Contract of 31 May 2001 Between the
Republic of Cameroon & RSM Production Corp., 157
Basic Oil Laws & Concession Contracts: South &
Central Africa 1,34-35 (2004) ....................... 237
c UMC Production Sharing Contract Dated 29 June
1992 Between the Republic of Equatorial Guinea &
United Meridian International Corp., 135 Basic
Oil Laws & Concession Contracts: South &
Central Africa 1,59-60 (1998) ....................... 238
d Agip/BP/Etal Production Sharing Agreement Dated
18 November 1997 in respect of the North
Caspian Sea (Kashagan) Among Agip Caspian Sea
V.B., et al., 39 Basic Oil Laws & Concession
Contracts: Russia & NIS 1,102-104 (2003) ............ 239
3 Case Law on Force Majeure Clauses ...................... 240
a National Oil Corp. v. Libyan Sun Oil (ICC Case
No.4462/AS), First Award of 31 May 1985,
29 I.L.M. 565,568-570,584-600 (1990) [Schmelck
(pres.), Koetz, Muskie] ............................. 240
b Karaha Bodos Company L.L.C. v. Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
('Pertamina') and Pt. PLN (Persero) ('PLN')
(ad hoc arbitration under the 1976 UNCITRAL
Rules), Final Award of 18 December 2000, 16(3)
Mealey's Int'l Arb. Rep. C-2, C-7 to C-8 (2001)
[Yves Derains (pres.), Piero Bernardini, Ahmed
Sadek El Kosheri] ................................... 247
c Mobil Cerro Negro, Ltd. v. Petróleos
de Venezuela, S.A. and PDVSA Cerro Negro, S.A.
(ICC Case No.15416/JRF/CA), Final Award of 23
December 2011, 48-49,64-65,315-316,323-325
[Karl-Heinz Böckstiegel (pres.), Jacques Sáles,
Henri C. Alvarez .................................... 248
4 Comments and Questions ................................. 251
D Stabilization Clauses ..................................... 251
l Stabilization Clauses .................................. 251
a Thomas W. Walde and George Ndi, Stabilizing
International Investment Commitments:
International Law Versus Contract Interpretation,
31 Tex. Int'l L.J. 215,226-228,260-266 (1996) ....... 251
b M. Sornarajah, The Settlement of Foreign
Investment Disputes, §3.2 at 50-51 (Kluwer Law
International 2000) ................................. 255
c Noah Rubins and N. Stephen Kinsella,
International Investment, Political Risk,
and Dispute Resolution: A Practitioner's Guide,
53-57 (Oceana Publications 2005) .................... 256
2 Examples of Stabilization Clauses ....................... 258
a Offshore Agreement Dated 10 January 1978 between
Government of Ghana & Offshore Hydrocarbons
Corporation (Later Transferred to Agri-Petco),
58 Basic Oil Laws & Concession Contracts: South
& Central Africa 22,50-51 (1980) ..................... 258
b Amoco Group Agreement Dated 14 December 1996 on
the Exploration, Development & Production Sharing
for Prospective Structures Ashrafi, Dan Ulduzu &
Area Adjacent in the Azerbaijan Sector of the
Caspian Sea, 24 Basic Oil Laws & Concession
Contracts: Russia & NIS 1,91 (1997) .................. 259
c Oman Model Exploration & Production Sharing
Agreement of 2002, Basic Oil Laws & Concession
Contracts: Middle East, 45 (2003) .................... 259
d Concession Contract of 31 May 2001 Between the
Republic of Cameroon & RSM Production Corp., 157
Basic Oil Laws & Concession Contracts: South &
Central Africa 1,40 (2004) ........................... 259
3 Case Law on Stabilization Clauses ....................... 260
a Amoco International Finance Corp. v. Government
of the Islamic Republic of Iran (IUSCT Case
No.56), Partial Award No.310-56-3 of 14 July 1987
[Michel Virally (pres.), Charles N. Brower, Parviz
Ansari Moin] ......................................... 260
b Libyan American Oil Company (LIAMCO)
v. Government of the Libyan Arab Republic (ad hoc
arbitration under the 1958ILC Draft Convention
on Arbitral Procedure), Award of 12 April 1977,
201.L.M. 1,30-31,55-56 (1981) [Sobhi Mahmassani,
sole arbitrator] ..................................... 263
c Phillips Petroleum Company Venezuela Ltd.
and ConocoPhillips Petrozuata ВV. v. Petroleos
de Venezuela, S.A. (ICC Case N 16848/JRF/CA
(C-16849/JRF/CA), Final Award of 17 September
2012 [Pierre Tercier (pres.), Horacio Alberto
Grigera Naón, Ahmed Sadek El Kosheri] ................ 264
4 Comments and Questions ................................. 267
E Adaptation & Renegotiation Clauses ........................ 267
1 Thomas W. Walde and George Ndi, Stabilizing
International Investment Commitments: International
Law Versus Contract Interpretation, 31 Tex. Int'l L.J.
215,265-266 (1996) .................................... 267
2 M. Sornarajah, The Settlement of Foreign Investment
Disputes, §3.7 at 54-55 (Kluwer Law International
2000) ................................................. 268
3 Piero Bernardini, Stabilization and Adaptation in Oil
and Gas Investments, 1(1) J. World Energy Law & Bus.
98,101-105 (2008) ..................................... 269
4 Examples of Adaptation and Renegotiation Clauses ...... 271
a Restated LNG Development & Production Sharing
Agreement for the North Field Gas Dated
31 January 1993 Between the Government of the
State of Qatar and (as Contractor) Qatar General
Petroleum Corporation, et al., 58 World LNG
Contracts: Qatar 1 (2003) .......................... 271
b Agip/BP/Etal Production Sharing Agreement Dated
18 November 1997 in respect of the North Caspian
Sea(Kashagan) Among Agip Caspian Sea VB., et
al., 39 Basic Oil Laws & Concession Contracts:
Russia & NIS 1,114 (2003) .......................... 271
5 Case Law on Adaptation Clauses ........................ 272
a Burlington Resources Inc. v. Republic of Ecuador
(ICSID Case No.ARB/08/5), Decision on Liability
of 14 December 2012, 111-113 [Gabrielle Kaufmann-
Kohler (pres.), Brigitte Stern, Francisco Orrego
Vicuña] ............................................ 272
b Mobil Cerro Negro, Ltd. v. Petróleos de Venezuela,
S.A. and PDVSA Cerro Negro, S.A. (ICC Case
No.15416/JRF/CA), Final Award of 23 December
2011,48-49,269-271,347-351 [Karl-Heinz
Böckstiegel (pres.), Jacques Sales, Henri
C. Alvarez] ........................................ 273
6 Comments and Questions ................................ 277
F Waiver of Sovereign Immunity Clauses ...................... 277
1 Noah Rubins and N. Stephen Kinsella, International
Investment, Political Risk, and Dispute Resolution:
A Practitioner's Guide, 63-65 (Oceana Publications
2005) ................................................. 277
2 Examples of Sovereign Immunity Waiver Clauses ......... 278
a Agip/BP/Etal Production Sharing Agreement Dated
18 November 1997 in respect of the North Caspian
Sea (Kashagan) Among Agip Caspian Sea V.B., et
al., 39 Basic Oil Laws & Concession Contracts:
Russia & NIS 1,109 (2003) .......................... 278
b Oman Model Exploration & Production Sharing
Agreement of 2002, Basic Oil Laws & Concession
Contracts: Middle East, 45 (2003) .................. 279
3 Comments and Questions ................................ 279
Chapter 4 Forums for Resolving Foreign Investment Disputes .... 281
§4.01 Foreign Investment Arbitration Regimes .................. 281
A International Centre for Settlement of Investment
Disputes (ICSID) .......................................... 281
1 Background - W. Michael Reisman, Systems of Control
in International Adjudication and Arbitration:
Breakdown and Repair, 46-47 (Duke University Press
1992) .................................................. 282
2 Advantages of ICSID Arbitration - Lucy Reed, Jan
Paulsson and Nigel Blackaby, Freshfields Guide to
ICSID Arbitration, 14-17 (2nd ed., Kluwer Law
International 2011) .................................... 283
3 Jurisdiction: ICSID Convention Art. 25 ................. 285
a The Presence of a Legal Dispute ..................... 285
i Christoph H. Schreuer, Loretta Malintoppi,
August Reinisch and Anthony Sinclair, The
ICSID Convention: A Commentary, 93-95,98-101
(2nd ed., Cambridge University Press 2009) ...... 285
ii UNCTAD, Scope and Definition: A Sequel,
Series on Issues on International Investment
Agreements II, 46 (United Nations
Publications 2011) .............................. 288
iii Georgios Petrochilos, Sylvia Noury and Daniel
Kalderimis, ICSID Convention, Chapter II,
Article 25 [Jurisdiction of the Centre], in
Concise International Arbitration, 66,67-69
(Loukas A. Mistelis (ed.), Kluwer Law
International 2010) and Questions ............... 288
b The Presence of a Legal Dispute Arising Directly
Out of an Investment ................................ 290
i Commentary on the Directness Requirement ........ 290
aa Christoph H. Schreuer, Loretta Malintoppi,
August Reinisch and Anthony Sinclair,
The ICSID Convention: A Commentary, 106
2nd ed., Cambridge University Press 2009) .... 290
bb Georgios Petrochilos, Sylvia Noury
and Daniel Kalderimis, ICSID Convention,
Chapter II, Article 25 [Jurisdiction of
the Centre], in Concise International
Arbitration, 66,69 (Loukas A. Misteiis
(ed.), Kluwer Law International 2010) ......... 291
ii Commentary on the Investment Requirement ........ 291
aa Christoph H. Schreuer, Loretta Malintoppi,
August Reinisch and Anthony Sinclair, The
ICSID Convention: A Commentary, 114-117,
125-128 (2nd ed., Cambridge University
Press 2009) .................................. 291
bb Campbell McLachlan, Laurence Shore
and Matthew Weiniger, International
Investment Arbitration: Substantive
Principles, 164 (Oxford University Press
2007) ........................................ 293
cc Georgios Petrochilos, Sylvia Noury
and Daniel Kalderimis, ICSID Convention,
Chapter II, Article 25 [Jurisdiction of
the Centre], in Concise International
Arbitration, 66,69-70 (Loukas A. Misteiis
(ed.), Kluwer Law International 2010) ........ 294
iii Definitions in International Investment
Agreements ...................................... 295
aa US Model Bilateral Investment Treaty (2012) .. 295
bb UNCTAD, Scope and Definition: A Sequel,
Series on Issues on International
Investment Agreements II, 21-48 (United
Nations Publications 2011) ................... 295
iv Definitions in Local Foreign Investment Law ..... 302
aa Tradex Hellas S.A. v. Republic of Albania
(ICSID Case No.ARB/94/2), Decision on
Jurisdiction of 24 December 1996 [Karl-
Heinz Böckstiegel (pres.), Fred Fielding,
Andrea Giardina] ............................. 302
bb Zhinvali Development Ltd. v. Republic of
Georgia (ICSID Case No.ARB/00/1),
unreported, as commented on in Walid Ben
Hamida, The Mihaly v. Sri Lanka Case: Some
Thoughts Relating to the Status of Pre-
Investment Expenditures, in International
Investment Law and Arbitration: Leading
Cases from the ICSID, NAFTA, Bilateral
Treaties and Customary International Law,
47,67-70 (Todd Weiler ed., Cameron May
2005) ........................................ 302
Cases ........................................ 304
aa Malaysian Historical Salvors, SDN, BHD
v. The Government of Malaysia (ICSID Case
No.ARB/05/10), Award on Jurisdiction of
17 May 2007 [Michael Hwang, S.C. (sole
arbitrator)] and Decision on the Application
for Annulment of 16 April 2009 [Stephen
M. Schwebel (pres.), Mohamed Shahabuddeen,
Peter Tomka] ................................. 304
bb Abaclat and Others v. Argentine Republic
(formerly Giovanna A. Beccara and Others
v. The Argentine Republic) (ICSID Case
No.ARB/07/5), Decision on Jurisdiction
and Admissibility of 4 August 2011
[Pierre Tercier (pres.), Georges Abi-Saab,
Albert Jan van den Berg] ..................... 312
cc Biwater Gauff (Tanzania) Ltd., v. United
Republic of Tanzania (ICSID Case
No.ARB/05/22), Award of 24 Jury 2008
[Bernard Hanotiau (pres.), Gary B. Born,
Toby Landau] and Concurring and Dissenting
Opinion of 18 July 2008 [Gary B. Born] ....... 317
dd Comments and Questions ....................... 319
c Parties ............................................. 320
i Contracting State or Constituent Subdivision
or Agency ....................................... 320
aa Georgios Petrochilos, Sylvia Noury and
Daniel Kalderirnis, ICSID Convention,
Chapter II, Article 25 [Jurisdiction of
the Centre], in Concise International
Arbitration, 66,70-71 (Loukas A.... Mistelis
(ed), Kluwer Law International 2010) ......... 320
bb Cable Television of Nevis, Ltd.
and Cable Television of Nevis Holdings,
Ltd. v. Federation of St. Kitts and Nevis
(ICSID Case No.ARB/95/2), Decision on
Jurisdiction of 13 January 1997 [Woodbine
A. Davis (pres.), Arthur A. Maynard, Rex
McKay] ....................................... 321
ii National of Another Contracting State ........... 324
aa Campbell McLachlan, Laurence Shore and
Matthew Weiniger, International Investment
Arbitration: Substantive Principles,
131-133 (Oxford University Press 2007) ....... 324
bb Jeswald W. Salacuse, The Law of Investment
Treaties, 186-189 (Oxford University Press
2010) ........................................ 325
cc Hussein Nuaman Soufraki v. The United Arab
Emirates (ICSID Case No.ARB/02/7), Award
of 7 July 2004 [L. Yves Fortier (pres.),
Stephen M. Schwebel,Aktham El Kholy] ......... 327
dd Tokios Tokelés v. Ukraine (ICSID Case No.
ARB/02/18), Decision on Jurisdiction of
29 April 2004 [Prosper Weil (pres.), Piero
Bernardini, Daniel M. Price] ................. 331
ее TSA Spectrum de Argentina S.A. v.
Argentine Republic (ICSID Case
No.ARB/05/5), Award of 19 December 2008
[Hans Danelius (pres.), Georges Abi-Saab,
Grant D. Aldonas] ............................ 337
ff Comments and Questions ....................... 340
d Consent ............................................. 341
i Georgios Petrochilos, Sylvia Noury and Daniel
Kalderimis, ICSID Convention, Chapter II,
Article 25 [Jurisdiction of the Centre], in
Concise International Arbitration, 66,74-77
(Loukas A. Mistelis (ed.), Kluwer Law
International 2010) ............................. 341
ii Standard Chartered Bank v. United Republic of
Tanzania (ICSID Case No.ARB/10/12), Award
of 2 November 2012 [William W. Park (pres.),
Barton Legum, Michael C.Pryles] ................. 343
iii Daimler Financial Services AG v. Argentine
Republic (ICSID Case No.ARB/05/01), Award of
22 August 2012 [Pierre-Marie Dupuy (pres.),
Charles N. Brower, Domingo Bello Janeiro] and
Dissenting Opinion of 15 August 2012 [Charles
N. Brower] ...................................... 345
and Questions ................................... 347
4 Annulment Proceedings .................................. 348
a W. Michael Reisman, Systems of Control in
International Adjudication and Arbitration:
Breakdown and Repair, 48,50 (Duke University
Press 1992) ......................................... 348
b Lucy Reed, Jan Paulsson and Nigel Blackaby,
Freshfields Guide to ICSID Arbitration, 162-174
(2nd ed., Kluwer Law International 2011) ............ 349
c Comments and Questions .............................. 355
B International Centre for Settlement of Investment
Disputes (ICSID) Additional Facility ...................... 355
1 Andrew Newcombe and Lluís Paradell, Law and Practice
of Investment Treaties: Standards of Treatment, 29
(Kluwer Law International 2009) ........................ 355
2 Lucy Reed, Jan Paulsson and Nigel Blackaby,
Freshfields Guide to ICSID Arbitration, 17-19
(2nd ed., Kluwer Law International 2011) ............... 355
C Iran U.S. Claims Tribunal (Algiers Accords) ............... 357
1 David D. Caron, Lee M. Caplan and Matti Pellonpää,
The UNCITRAL Arbitration Rules: A Commentary, 3-8
(Oxford University Press 2006) ......................... 357
2 David D. Caron, The Iran-U.S. Claims Tribunal
and Investment Arbitration: Understanding the Claims
Settlement Declaration as a Retrospective BIT, in
The Iran-U.S. Claims Tribunal at 25: The Cases
Everyone Needs to Know for Investor-State and
International Arbitration, 378-383 (Christopher
R. Drahozal and Christopher S. Gibson (eds),
Oxford University Press 2007) .......................... 360
§4.02 Other Arbitral Regimes .................................. 363
A Permanent Court of Arbitration (PCA) ...................... 363
1 PCA, 111th Annual Report: 2011,2,3,6,8 (2012) .......... 363
2 UNCTAD, Dispute Settlement: Permanent Court of
Arbitration, 32-33 (United Nations Publications 2003) .. 365
B International Court of Arbitration of the
International Chamber of Commerce (ICC) ................... 366
1 ICC, ICC Dispute Resolution: A World of Experience -
A Wealth of Expertise, 2-5 (2012) ...................... 366
2 Jacob Grierson and Annet van Hooft, Arbitrating
Under the 2012 ICC Rules: An Introductory User's
Guide, 30 (Kluwer Law International 2012) .............. 368
3 ICC, ICC Commission Report: States, State Entities
and ICC Arbitration, 2 (2012) .......................... 369
C London Court of International Arbitration (LCIA) .......... 370
1 Simon Nesbitt, LCIA Rules [Introductory Remarks],
in Concise International Arbitration, 401
(Loukas A. Misteiis ed., Kluwer Law International
2010) .................................................. 370
2 Peter Turner and Reza Mohtashami, A Guide to the LCIA
Arbitration Rules, 2-3 (Oxford University Press 2009) .. 371
D Arbitration Institute of the Stockholm Chamber of
Commerce (SCC) ............................................ 372
l Gary B. Born, International Arbitration and Forum
Selection Agreements: Drafting and Enforcing, 56
(3rd ed., Kluwer Law International 2010) ............... 372
2 The SCC Experience of Investment Arbitration under
UNCITRAL Rules, Paper presented by Annette
Magnusson, SCC Secretary General, in October 2012 ...... 372
E United Nations Commission on International Trade Law
(UNCITRAL) Arbitration Rules .............................. 374
l UNCITRAL, Recommendations to Assist Arbitral
Institutions and Other Interested Bodies With Regard
to Arbitration Under the UNCITRAL Arbitration Rules
(as Revised in 2010) (2012) ............................ 374
2 David D. Caron,Lee M. Caplan, The UNCTTRAL Arbitration
Rules: A Commentary, 7-8 (2nd ed., Oxford University
Press 2013) ............................................ 375
§4.03 International Courts .................................... 375
A Permanent Court of International Justice (PCIJ) ........... 375
1 UNCTAD, Dispute Settlement: International Court of
Justice, 5 (United Nations Publications 2003) .......... 375
2 Stephan W. Schill, Private Enforcement of
International Investment Law: Why We Need Investor
Standing in BIT Dispute Settlement, in The Backlash
Against Investment Arbitration: Perceptions and
Reality, 29,37-39 (Michael Waibel, Asha Kaushal,
Kyo-Hwa Liz Chung and Claire Balchin (eds), Kluwer
Law International 2010) ................................ 376
B International Court of Justice (ICJ) ...................... 377
1 UNCTAD, Dispute Settlement: International Court of
Justice, 5 (United Nations Publications 2003) .......... 377
2 Andrew Newcombe and Lluis Paradell, Law and Practice
of Investment Treaties: Standards of Treatment, 35-39
(Kluwer Law International 2009) ........................ 378
C Other International Courts ................................ 380
§4.04 National Forums .......................................... 380
A General Considerations .................................... 380
B Comments and Questions .................................... 380
Chapter 5 Political Risk Insurance ............................ 381
§5.01 Introduction ............................................. 381
§5.02 Multilateral Investment Guarantee Agency (MIGA) .......... 382
A Convention Establishing the Multilateral Investment
Guarantee Agency (1985), 1508 U.N.T.S. 99 (1985) ......... 382
B Commentary on the Convention Establishing the
Multilateral Investment Guarantee Agency, 1 ICSID Rev. -
Foreign Inv. L.J. 193,195-202 (1986) ..................... 384
C Comments and Questions .................................... 386
§5.03 National Programs - U.S. Overseas Private Investment
Corporation (OPIC) ........................................... 386
A OPIC Program Handbook, 1-21 (OPIC 2007) ................... 386
B OPIC Enabling Statute, 22 U.S.C. §2191-2200 (1969) ........ 389
C OPIC Agreements with Foreign Governments .................. 391
1 Model OPIC Investment Incentive Agreement,
1 B.D.I.E.L. 669 (1994) ............................... 391
2 Robert C. O'Sullivan, Model OPIC Investment
Incentive Agreement, 1 B.D.I.E.L. 665 (1994) .......... 393
D Comments and Questions ................................... 394
§5.04 OPIC Claims ............................................. 394
A Expropriation Claims ..................................... 394
l Governmental Nexus .................................... 394
a Otis Elevator Co. (Iran: 1982), OPIC Memorandum
of Determinations: Expropriation Claim of Otis
Elevator Company - Contract of Insurance
No.8982R - of 8 November 1982 ...................... 394
2 Repudiation of Contract ............................... 398
a Ponderosa Assets, L.P. (Argentina: 2005), OPIC
Memorandum of Determinations: Expropriation Claim
of Ponderosa Assets, L.P. - Contract of Insurance
No.733 - of 2 August 2005, 1,5,7-14,19 ............. 398
3 Creeping Expropriation ................................ 402
a Revere Copper & Brass, Inc. v. OPIC (AAA Case
No.16 10 0137 76), Award of 24 August 1978, 17
I.L.M. 1321,1329-1332,1338,1340,1342-1343,
1347-1351, 1353 (1978) ............................. 402
b MidAmerican Energy Holdings Company (formerly
CalEnergy Company, Inc.) (Indonesia: 1999), OPIC
Memorandum of Determinations: Expropriation Claim
of MidAmerican Energy Holdings Company (formerly
CalEnergy Company, Inc.) - Contracts of
Insurance Nos. E374, E453, E527, and E759 - of
November 1999, 1-4,5-6 ............................. 407
4 Defenses .............................................. 413
a Central Soya Company, Inc. (Venezuela: 1967),
OPIC Action Memorandum: Denial of Expropriation
Claim - Contracts Nos. 5128 and 5129 - of 21
September 1967, 2-3 ................................ 413
b The Anaconda Company & Chile Copper Company
v. Overseas Private Investment Corporation (AAA
Case No 16 10 0071 72), Award of 17 July 1975, 14
I.L.M. 1210,1211,1235-1246 (1975) .................. 414
5 Comments and Questions ................................ 418
B Currency Inconvertibility Claims ......................... 420
l Reasonable Steps to Convert Local Currency ............ 420
a Philippine Geothermal, Inc. (The Philippines:
1984), OPIC Memorandum of Determinations:
Inconvertibility Claim of Philippine Geothermal,
Inc. - Contract of Insurance No.8577 - of
10 August 1984 ..................................... 420
2 Lack of Pre-existing Law or Regulation ................ 422
a Active Inconvertibility ............................ 422
i Kimberly Clark Corp. (Honduras: 1990), OPIC
Memorandum of Determinations: Inconvertibility
Claim of Kimberly Clark Corporation - Contract
of Insurance No.A663 - of 22 May l990,l-3,4,9 .. 422
b Passive Inconvertibility ........................... 424
i Phelps Dodge Corp. (Honduras: 1999), OPIC
Memorandum of Determinations: Inconvertibility
Claim of Phelps Dodge Corporation and Phelps
Dodge International Corporation - Contracts
of Insurance Nos. A021, A022, and A023 - of
28 December 1999 ............................... 424
3 Comments and Questions ................................ 426
C Political Violence Claims ................................ 427
l Direct Causation ...................................... 427
a Nord Resources Corporation (Sierra Leone: 1998),
OPIC Memorandum of Determinations: Political
Violence Claim of Nord Resources Corporation -
Contract of Insurance No.A628 (as amended the
'Contract') - of 14 May 1998,1-2,4 ................. 427
b Haitian Tropical Management, S.A. (Haiti: 1992),
OPIC Executive Summary: Political Violence Claim
of Haitian Tropical Management, S.A. - Contract
of Insurance No.C042 - of 23 November 1992,1 ....... 430
2 Political Motivation .................................. 431
a Freeport Minerals Corp. (Indonesia: 1986), OPIC
Memorandum of Determinations: War, Revolution,
Insurrection and Civil Strife Claim of Freeport
Minerals - Contract of Guaranty No. 7034 and
Contract of Insurance No.9704 - of 30 September
1986 ............................................... 431
b Beckman Instruments, Inc. (El Salvador: 1982),
OPIC Memorandum of Determinations: War,
Revolution, Insurrection and Civil Strife Claim
of Beckman Instruments, Inc. - Contracts of
Insurance Nos. 9652 and 9653 - of 27 August 1982 ... 434
3 Comments and Questions ................................ 436
Chapter 6 Applicable Substantive Law .......................... 437
§6.01 Introduction ............................................ 437
A Rudolf Dolzer and Christoph H. Schreuer, Principles of
International Investment Law, 211,288-289 (2nd ed.,
Oxford University Press 2012), Chapter X: Settling
Investment Disputes ...................................... 437
B Comments and Questions ................................... 438
C Convention on the Recognition and Enforcement of
Foreign Arbitral Awards [New York Convention] (1958),
330 U.N.T.S. 38 (1959), Article V ........................ 439
D Comments and Questions ................................... 440
§6.02 The Choice of Law Process in International Commercial
Arbitration ................................................. 440
A Rules of Arbitration of the International Chamber of
Commerce (2012), Article 21 .............................. 440
B Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States [ICSID or
Washington Convention] (1965), 575 U.N.T.S. 159 (1965),
Article 42 ............................................... 440
C UNCITRAL Model Law on International Commercial
Arbitration (1985, amended 2006), Article 28 ............. 441
D UNCITRAL Arbitration Rules (l976, revised 2010),
Article 35 ............................................... 441
E Regulation (EC) No.593/2008 of the European Parliament
and of the Council of 17 June 2008 on the Law Applicable
to Contractual Obligations (Rome I), OJL 177,4.7.2008,
6, Articles 3 and 4 ...................................... 441
F Comments and Questions ................................... 443
§6.03 Options for the Applicable Law .......................... 443
A National Law ............................................. 443
l Responsibility ofthe State for Injuries Caused
in Its Territory to the Person or Property of
Aliens - Measures Affecting Acquired Rights:
Fourth Report by F.V. Garcia Amador, [1959] 2 Y.B.
Int'l L. Comm'n 1,26, UN. Doc. A/CN.4/119 ............. 443
2 Comments and Questions ................................ 445
B National Law with International Guarantees ............... 445
1 AGIP S.p.A. v. People's Republic of the Congo (ICSID
Case No.ARB/77/1), Award of 30 November 1979,1 ICSID
Rep. 306,67 LL.R. 318 (1979) [Jørgen Trolle (pres.),
René-Jean Dupuy, Fuad Rouhani] ........................ 445
2 Klöckner Industrie-Anlagen GmbH and others v. United
Republic of Cameroon and Société Camerounaise
des Engrais (ICSID Case No.ARB/81/2), Decision on
Annulment of 3 May 1985,2 ICSID Rep. 95 (1994)
[Pierre Lalive (pres.), Ahmed Sadek El-Kosheri,
Ignaz Seidl-Hohenveldern] ............................. 447
3 Amco Asia Corporation and others v. Republic of
Indonesia (ICSID Case No.ARB/81/1), Decision on the
Application for Annulment of 16 May 1986,1 ICSID
Rep. 509 (1993) [Ignaz Seidl-Hohenveldern (pres.),
Florentino P. Feliciano, Andrea Giardina] ............. 448
4 W. Michael Reisman, The Regime for Lacunae in the
ICSID Choice of Law Provision and the Question of
Its Threshold, 15 ICSID Rev. - Foreign Inv. L.J.
362,366-380 (2000) .................................... 451
5 Wena Hotels Limited v. Arab Republic of Egypt (ICSID
Case No.ARB/98/4), Decision on Annulment of
5 February 2002, [Konstantinos D. Kerameus (pres.),
Andreas Bucher, Francisco Orrego Vicuna] .............. 454
6 Azurix Corp. v. Argentine Republic (ICSID Case No.
ARB/01/12), Decision on the Application for Annulment
of 1 September 2009 [Gavan Griffith QC (pres.), Bola
Ajibola, Michael Hwang] ............................... 456
7 Comments and Questions ................................ 459
C Internationalization ..................................... 459
1 Petroleum Development (Trucial Coast) Ltd. v. Sheikh
of Abu Dhabi, Award of September 1951,18 I.L.R. 144,
148-150 (1951) [Lord Asquith (sole arbitrator)] ....... 459
2 Comments and Questions ................................ 461
3 Texaco Overseas Petroleum Company and Californian
Asiatic Oil Company v. The Government of the Libyan
Arab Republic, Award on the Merits of 19 January
1977,53 I.L.R. 420,457-462 (1977) René-Jean Dupuy
(sole arbitrator) ..................................... 461
4 Comments and Questions ................................ 464
5 Italian Enterprise v. Syrian Enterprise (ICC Case
No.3380), Award of 29 November 1980,108 Journal
du Droit International (Clunet, No. 4) 928,928-930
(1981) ................................................. 464
6 Comments and Questions ................................ 466
7 Government of Kuwait v. American Independent Oil Co.
(AMINOIL), Award of 24 March 1982,66 Int'l L.
Rep. 518, 559-562 (1982) [Paul Reuter (pres.), Hamed
Sultan, Gerald Fitzmaurice] ........................... 466
8 Comments and Questions ................................ 468
9 United States v. Iran (IUSCT Case No.B36), Award of
23 March 1997 [Krzysztof Skubiszewski (pres.),
George H. Aldrich, Koorosh H. Ameli] .................. 468
10 James R. Crawford, Treaty and Contract in Investment
Arbitration, 24 Arb. Int'l 351,352-353,360-361,
367-370,373-374 (2008) 469
11 Wintershall A.G., et al. v. Government of Qatar,
Partial Award on Liability of 5 February 1988,
281.L.M. 795,802 (1989) [John R. Stevenson (pres.),
Ian Brownlie, Bernardo M. Cremades] ................... 473
12 Comments and Questions ................................ 474
D Direct Claims under Treaties ............................. 474
1 Jan Paulsson, Arbitration Without Privity, 10(2)
ICSID Rev. - Foreign Inv. L.J. 232,232-234,254-257
(1995) ................................................ 475
2 Comments and Questions ................................ 477
3 Asian Agricultural Products Limited v. Republic of
Sri Lanka (ICSID Case No.ARB/87/3), Award of
27 June 1990,4 ICSID Rep. 250, 256-257 (1997) [Ahmed
Sadek El-Kosheri (pres.), Samuel K.B. Asante,
Berthold Goldman] ..................................... 478
4 Comments and Questions ................................ 480
5 Compañía de Aguas del Aconquija S.A. and Vivendi
Universal v. Argentine Republic (ICSID Case
No.ARB/97/3), Decision on Annulment of 3 July 2002,
19(l) ICSID Rev. - Foreign Inv. LJ. 89,117,127-131
(2004) [L. Yves Fortier (pres.), James R. Crawford,
José Carlos Fernández Rozas] .......................... 480
6 Comments and Questions ................................ 483
7 ADC Affiliate Limited and ADC & ADMC Management
Limited v. The Republic of Hungary (ICSID Case
No.ARB/03/16), Award of 2 October 2006 [Charles
N. Brower (pres.), Albert Jan van den Berg, Neil
Kaplan] 484 §6.04 Applicable International Law ........ 485
A The Sources of International Law ......................... 485
1 Statute of the International Court of Justice (1945),
Article 38 ............................................ 485
2 Comments and Questions ................................ 486
B Applicable Treaty Standards .............................. 486
1 North American Free Trade Agreement (1994), 32 I.L.M
289 (1993), Chapter 11: Investment .................... 486
2 France - Argentina, Treaty Concerning the Treatment
and Protection of Investments (1991), 1728 U.N.T.S.
298 ................................................... 489
C Other Sources of International Law ....................... 493
1 Texaco Overseas Petroleum Company and Califomian
Asiatic Oil Company v. The Government of the Libyan
Arab Republic, Award on the Merits of 19 January
1977,53 I.L.R. 420,484-485,490-495 (1979) [Rene-Jean
Dupuy (sole arbitrator)] .............................. 493
2 Comments and Questions ................................ 496
3 Libyan American Oil Company (LIAMCO) v. Government
of the Libyan Arab Republic, Award of 12 April 1977,
62 I.L.R. 140,187-189 (1982) [Sobhi Mahmassani (sole
arbitrator)] .......................................... 496
4 SEDCO Inc v. National Iranian Oil Company
and Islamic Republic of Iran (IUSCT Case No.129),
Interlocutory Award of 27 March 1986 [Nik Mangard
(pres.), Charles N. Brower, Parviz Ansari Moin] ....... 498
5 Comments and Questions ................................ 500
§6.05 Sources of "Non-National" Law: the Lex Mercatoria ........ 500
A Michael J. Mustill, The New Lex Mercatoria: The First
Twenty-five Years, in Maarten Bos and Ian Brownlie,
Liber Amicorum for the Rt. Hon. Lord Wilberforce, 149,
162-166 (Clarendon Press, 1987) .......................... 501
B State party (State X) v. Private contractor (United
Kingdom) (ICC Case No.7110), First Partial Award of
June 1995,10(2) ICC Bulletin 39, 39-40(1999) ............. 503
C Watkins-Johnson Company and Watkins-Johnson Limited
v. Islamic Republic of Iran and Bank Saderat Iran
(IUSCT Case No.370), Award of 28 July 1989 [Karl-
Heinz Bockstiegel (pres.), Assadollah Noori] ............. 504
D Seller v. Buyer (ICC Case No.5713), Final Award of 1989,
15 YB. Comm'l Arb. 70,70-73 (1990) ....................... 505
E Comments and Questions ................................... 506
F James Crawford and Anthony Sinclair, The UNIDROIT
Principles of International Commercial Contracts
and their Application to State Contracts, ICC
Bulletin - Special Supplement 57, 57-75 (2002) ........... 507
G Joseph C. Lemire v. Ukraine (ICSID Case No.ARB/06/18),
Decision on Jurisdiction and Liability of 21 January
2010 [Juan Fernández-Armesto (pres.), Jan Paulsson,
Jürgen Voss] ............................................. 509
H Comments and Questions ................................... 510
Chapter 7 International Responsibility: General Principles
§7.01 Development of the Law of State Responsibility .......... 511
A The Concept of Diplomatic Protection ..................... 511
1 Mavrommatis Palestine Concessions (Greece v. United
Kingdom), Decision on Jurisdiction of 30 August 1924,
[1924] P.C.I.J. Series A - No.2,5,12 (1924) ........... 511
2 Panevezys-Saldutiskis Railway (Estonia v. Lithuania),
Judgment of 28 February 1939, [1939] P.C.I.J.
Series A/B - No.76,5,6,16 (1939) ...................... 512
3 Nottebohm (Liechtenstein v. Guatemala), Second
Phase, Judgment of 6 April 1955, [1955] I.C.J. Rep.
4,16-17,20-24,26 (1955) ............................... 512
4 Comments and Questions ................................ 516
5 Barcelona Traction, Light and Power Company, Limited
(Belgium v. Spain) (New Application: 1962), Second
Phase, Judgment of 5 February 1970, [1970] I.C.J.
Rep. 3,41-51 (1970) ................................... 516
6 Elettronica Sicula S.p.A. (ELSI) (United States of
A merica v. Italy), Judgment of 20 July 1989, [1989]
I.C.J. Rep. 15,89-93 (1989) ........................... 521
7 LaGrand (Germany v. United States of America),
Judgment of 27 June 2001, [2001] I.C.J. Rep. 466,
480-483,492-494 (2001) ................................ 523
8 Comments and Questions ................................ 527
9 The Loewen Group Inc. and Raymond L. Loewen v.
United States of America (ICSID Case No.
ARB(AF)/98/3), Award of 26 June 2003,7 ICSID Rep.
442,484-490 (2005) [Anthony Mason (pres.), Abner
J. Mikva, Michael Mustill] ............................ 527
10 Comments and Questions ................................ 531
11 International Law Commission, Articles on Diplomatic
Protection, Official Records of the General Assembly,
Sixty-first Session, Supplement No.10 (UN Doc.
A/61/10) .............................................. 532
12 Ahmadou Sadio Diallo (Republic of Guinea v.
Democratic Republic of the Congo), Preliminary
Objections, Judgment of 24 May 2007, [2007]
I.C.J. Rep. 582,601-602,605-606,610,614-616 (2001) .... 533
B The General Character of State Responsibility
Principles ............................................... 536
1 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, General Commentary, [2001] 2(2) Y.B. Int'l L.
Comm'n 30,31-32 (2001) ................................ 537
2 Mohammad Ammar Al-Bahloul v. Tajikistan (SCC Case
No.V 064/2008), Partial Award on Jurisdiction
and Liability of 2 September 2009 [Jeffrey
M. Hertzfeld (pres.), Richard Happ, Ivan S. Zykin] .... 538
C Delictual and Treaty Responsibility ...................... 539
l Rainbow Warrior (New Zealand v. France), Award of
30 April 1990, 20 R.I.A.A. 215,251 (1990) [Eduardo
Jimenez de Arechaga (pres.), Kenneth Keith, Eduardo
Jimenez de Arechaga] .................................. 539
2 Comments and Questions ................................ 540
3 International Law Commission, Articles on
Responsibility of States for Internationally
Wrongful Acts, Article 12 and Commentary, [2001]
2(2) Y.B. Int'l L. Comm'n 30,54-55 (2001) ............. 540
D Responsibility under International and Internal Law ...... 541
1 Elettronica Sicula S.p.A. (ELSI) (United States of
America v. Italy), Judgment of 20 July 1989, [1989]
I.C.J. Rep. 15,51, 74 (1989) ......................... 541
2 International Law Commission, Articles on
Responsibility of States for Internationally
Wrongful Acts, Article 3 and Commentary, [2001] 2(2)
Y.B. Int'l L. Comm'n 30,36-38 (2001) ................. 542
E The Lex Specialis Issue .................................. 545
1 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 55 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,54-55 (2001) ....................... 545
2 International Law Commission, Conclusions of the
work of the Study Group on the Fragmentation of
International Law: Difficulties arising from the
Diversification and Expansion of International Law,
[2006] 2(2) Y.B. Int'l L. Comm'n 175,178-179 (2006) ... 547
§7.02 Attribution of Conduct to the State ...................... 548
A Organs of the State or of Political Subdivisions ......... 548
1 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 4 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,40-42 (2001) ....................... 548
2 Restatement (Third) Foreign Relations Law of the
United States, 8 207,96-98 (American Law Institute
1987) ................................................. 552
3 Compañia de Aguas del Aconquija, S.A. and Compagnie
Générale des Eaux v. Argentine Republic (ICSID Case
No.ARB/97/3), Award of 21 November 2000,16 ICSID
Rev. - Foreign Inv. L.J. 641 (2001) [Francisco Rezek
(pres.), Thomas Buergenthal, Peter D. Trooboff] ....... 553
4 Application of the Convention on the Prevention
and Punishment of the Crime of Genocide (Bosnia
and Herzegovina v. Serbia and Montenegro), Judgment
of 26 February 2007, [2007] I.C.J. Rep. 43,203,205-
206(2007) ............................................. 555
5 Jan de Nul NV and Dredging International NV v. Egypt
(ICSID Case No.ARB/04/13), Award of 6 November 2008
[Gabrielle Kaufmann-Kohler (pres.), Pierre Mayer,
Brigitte Stern] ....................................... 557
6 Comments and Questions ................................ 558
B State Enterprises ........................................ 558
l Wintershall A.G., et al. v. Government of Qatar,
Partial Award on Liability of 5 February 1988,281.L.M.
795,811-812 (1989) John R. Stevenson (pres.), Ian
Brownlie, Bernardo M Cremades] ........................ 558
2 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 5 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,42-43 (2001) ....................... 559
3 Jan de Nul NV and Dredging International NV v. Egypt
(ICSID Case No.ARB/04/13), Award of 6 November 2008
[Gabrielle Kaufmann-Kohler (pres.), Pierre Mayer,
Brigitte Stern] ....................................... 562
4 Toto Construzioni Generali S.p.A. v. Lebanon (ICSID
Case No.ARB/07/12), Decision on Jurisdiction of
11 September 2009 [Hans van Houtte (pres.), Alberto
Feliciani, Alberto Feliciani] ......................... 563
C Conduct of Private Parties ............................... 565
1 Tradex Hellas S.A. (Greece) v. Republic of Albania
(ICSID Case No.ARB 94/2), Award of 29 April 1999,14
ICSID Rev. - Foreign Inv. L.J. 197,233,235-240,
244-245 (1999) [Karl-Heinz Bockstiegel (pres.),
Fred F. Fielding, Andrea Giardina] .................... 565
2 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 9 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,49 (2001) .......................... 567
3 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 10 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,50 (2001) .......................... 568
4 Comments and Questions ................................ 569
D Succession to Responsibility ............................. 570
1 Tinoco Case (Great Britain v. Costa Rica), Award
of 18 October 1923,1 R.I.A.A. 375,381-384 (1923)
[William H. Taft (sole arbitrator)] ................... 570
2 Arbitration of Lighthouses (France v. Greece), Claims
No.11 and 4 (PCA), Award of 24 July 1956,23 I.L.R. 81,
88-93 (1956) [Jan Hendrik Willem Verzijl (pres.),
Achille Mestre, Georges Charbouris] ................... 572
3 Comments and Questions 576 §7.03 Breach of
an International Obligation ........................... 576
A The Concept of Due Diligence and the Role of Fault ....... 577
1 Alabama Arbitration, Award of 14 September 1872, in
J.B. Moore, History and Digest of the International
Arbitrations to which the United States has been
a Party, Vol. 1,495,550,572-573 (US Government
Printing Office 1898) [Charles Francis Adams,
Alexander James Edmund Cockburn, Frederick Sclopis,
James Stämpfli, Marcos Antonio d'Araujó] .............. 577
2 James R. Crawford, The International Law Commission's
Articles on State Responsibility: Introduction, Text
and Commentaries, 13-14 (Cambridge University Press
2002) ................................................. 578
B Obligations of Conduct and Result ........................ 578
1 International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Commentary to Article 12, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,56 (2001) .......................... 579
2 James R. Crawford, State Responsibility: The General
Part, 220-223 (Cambridge University Press 2013) ....... 579
C Irrelevance of Sovereign/Commercial Act Distinction ...... 581
1 Swedish Engine Drivers' Union v. Sweden (Application
No.5614/72), 6 February 1976, [1976] ECHR Rep.,
Series A - No.20(1976) ................................ 581
2 Comments and Questions ................................ 582
Chapter 8 Violations of Investor Rights Under Customary
International Law .............................................. 583
§8.01 Relationship Between Customary International Law and
the International Investment Law Regime ..................... 583
A José E. Alvarez, The Public International Law Regime
Governing International Investment, 94,105-108,114-117
(Hague Academy of International Law 2011) ................ 583
B Stephen М. Schwebel, Investor-State Disputes and the
Development of International Law: The Influence of
Bilateral Investment Treaties on Customary
International Law, 98 Am. Soc'y Int'l L. Proc.
27,27-30 (2004) .......................................... 585
C Patrick Dumberry, Are BITs Representing the "New"
Customary International Law in International Investment
Law?, 28 Penn St. Int'l L. Rev. 675,701 (2010) ........... 588
Expropriation ............................................ 589
A Introduction ............................................. 589
1 Responsibility of the State for Injuries Caused in
Its Territory to the Person or Property of Aliens -
Measures Affecting Acquired Rights: Fourth Report by
F.V. Garcia Amador, [1959] 2 Y.B. Int'l L. Comm'n 1,
11-12,14-16, U.N.Doc. A/CN.4/119 ...................... 589
B General Distinction ...................................... 593
1 Direct- De Jure ....................................... 593
a Compañía del Desarrollo de Santa Elena, S.A.
v. The Republic of Costa Rica (ICSID Case
No.ARB/96/1), Final Award of 17 February 2000
[L. Yves Fortier (pres.), Elihu Lauterpacht,
Prosper Weil] ...................................... 593
b Martin Domke, Foreign Nationalizations: Some
Aspects of Contemporary International Law, 55 Am.
J. Intt'I L. 585,587-590(1961) ..................... 594
c The Oxford Handbook of International Investment
Law, 408-409 (Peter Muchlinski, Federico Ortino
and Christoph Schleuer (eds), Oxford University
Press 2008) ........................................ 595
2 Indirect - de facto - Creeping ....................... 595
a Enrol P. Mendes, The Canadian National Energy
Program: An Example of Assertion of Economic
Sovereignty or Creeping Expropriation in
International Law, 14 Vand J. Trans. L. 475,
498-501 (1981) ..................................... 595
b Waste Management, Inc. v. United Mexican States
(ICSID Case No.ARB(AF)/98/2), Arbitral Award of
2 June 2000 - Dissenting Opinion of Keith Highet of
8 May 2000 [Bernardo M. Cremades (pres.), Keith
Highet, Eduardo Siqueiros Т.] ...................... 598
c Rumeli Telekom A.S. and Telsim Mobil
Telekomunikasyon HizmetleriAS. v. Republic of
Kazakhstan (ICSID Case No.ARB/05/16), Award of
29 July 2008 [Bernard Hanotiau (pres.), Marc
Lalonde, Stewart Boyd] ............................. 598
d Walter Bau AG v. Thailand (ad hoc arbitration
under the 1976 UNCITRAL Rules), Award of 1 July
2009, IIC 429 (2009) Ian Barker (pres.), Marc
Lalonde, Jayavadh Bunnag] .......................... 600
e UNCTAD, Bilateral Investments Treaties in the
Mid-1990s, 65-66 (United Nations 1998) ............. 602
f Comments and Questions ............................. 603
C Initial Precepts - Government is not a Guarantor or
Insurer of the Investment ................................ 603
a United Kingdom v. Belgium (The Oscar Chinn
case), Judgment of 12 December 1934,3 World Court
Reports 416,436,439 (1932-1935) (Manley O. Hudson
(ed.) with the collaboration of Ruth E. Bacon,
By the Carnegie Endowment for International Peace,
Rumford Press, 1938) ............................... 603
b Wena Hotels Limited v. Arab Republic of Egypt
(ICSID Case No.ARB/98/4), Award of 8 December
2000 [Monroe Leigh (pres.), Ibrahim Fadlallah,
Don. Wallace, Jr.] ................................. 604
D Property Expropriated .................................... 60S
l Tangible Property ..................................... 605
a Sedco, Inc. v. National Iranian Oil Company
and The Islamic Republic of Iran (IUSCT Case
No.129), Award No.309-129-3 of 2 July 1987
[Nils Mangård (chairman), Charles N. Brower,
Parviz Ansari Moin] ................................ 605
b Oil Field of Texas, Inc. v. The Government of
the Islamic Republic of Iran, National Iranian
Oil Company (Iran-United States Claims Tribunal
Case No.43), Award No.258-43-1 of 8 October
1986 [Karl-Heinz Böckstiegel (chairman), Richard
M. Mosk, Mohsen Mostafavi] ......................... 605
2 Real Property ......................................... 606
a Metalclad Corporation v. The United Mexican
States (ICSID Case No.ARB/(AF)/97/1), Award of
30 August 2000 [Elihu Lauterpacht (pres.),
Benjamin R. Civiletti, José Luis Siqueiros] ........ 606
b Compañía del Desarrollo de Santa Elena, S.A. v.
The Republic of Costa Rica (ICSID Case No.
ARB/96/1), Final Award of 17 February 2000
[L. Yves Fortier (pres.), Elihu Lauterpacht,
Prosper Weil] ...................................... 608
c Burlington Resources Inc. v. Republic of Ecuador
(ICSID Case No.ARB/08/5), Decision on Liability
of 14 December 2012 111-113 [Gabrielle Kaufmann-
Kohler (pres.), Brigitte Stern, Francisco Orrego
Vicuna] ........................................... 609
3 Stocks and Shares ..................................... 610
a Dr. Horst Reineccius, First Eagle SoGen Funds,
Inc., Mr. Pierre Mathieu and la Société de
Concerns Hippique de la Châtre v. Bank of
International Settlements, Arbitral Tribunal of
the Bank of International Settlements (Permanent
Court of Arbitration), Partial Award of
22 November 2002 on the Lawfulness of the Recall
of the Privately Held Shares on 8 January 2001
and the Applicable Standards for Valuation of
Those Shares, 74-75,77-81 [W. Michael Reisman
(pres.), Jochen A. Frowein, Mathias Krafft, Paul
Lagarde, Albert Jan van den Berg] .................. 610
4 Bank Accounts ......................................... 612
a American Bell International, Inc. v. The Islamic
Republic of Iran, The Ministry of Defense of the
blamic Republic of Iran, the Ministry of Post,
Telegraph and Telephone of the Islamic Republic
of Iran, and The Telecommunications Company of
Iran (IUSCT Case No.48), Award No.255-48-3 of 19
September 1986 Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 612
5 Dividends ............................................. 613
a Foremost Tehran, Inc., et al v. The Government
of the Islamic Republic of Iran, et al (IUSCT
Case Nos. 37 and 231), Award No.220-37/231-1 of
11 April 1986 [Gunnar Lagergren (pres.), Koorosh-
Hossein Ameli, Howard M Holtzmann] ................. 613
6 Bonds ................................................. 616
a Edwin Borchard, State Insolvency and Foreign
Bondholders, Vol. I, General Principles, 193,
200-202 (Yale University Press 1951) ............... 616
b Abaclat and Others v. Argentine Republic
(formerly Giovanna A. Beccara and Others v. The
Argentine Republic) (ICSID Case No.ARB/07/5),
Decision on Jurisdiction and Admissibility of
4 August 2011 [Pierre Tercier (pres.), Georges
Abi-Saab, Albert Jan van den Berg] ................. 617
7 Management of Business ................................ 619
a Sedco, Inc. for itself and on behalf of Sedco
International, S.A., and Sediran Drilling Company
v. National Iranian Oil Company and The Islamic
Republic of Iran (IUSCT Case No.129), Award
No.ITL 55-129-3 of 28 October 1985 [Nik Mangård
(pres.), Charles N. Brower, Parviz Ansari Moin] .... 619
b Starrett Housing Corporation, Starrett Systems,
Inc., Starrett Housing International Inc.,
v. The Government of the Islamic Republic of
Iran, Bank Omran, Bank Meudt, Bank Markazi (IUSCT
Case No.24), Interlocutory Award No.ITL
32-24-1 of 19 December 1983 [Gunnar Lagergren
(pres.), Mahmoud M. Kashani, Howard M.
Holtzmann] ......................................... 619
8 Contractual Rights .................................... 621
a Phillips Petroleum Company Iran v. The Islamic
Republic of Iran and The National Iranian Oil
Company (IUSCT Case No.39), Award No.425-39-2
of 29 June 1989 [Robert Briner (pres.), Seyed
K. Khalilian, George H. Aldrich .................... 621
b Amoco International Finance Corporation, v. The
Government of the Islamic Republic of Iran, et
al. (IUSCT Case No.56), Award No.310-56-3 of
14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 622
c Mobil Oil Iran Inc., et al v. Government of the
blamic Republic of Iran and National Iranian Oil
Company (IUSCT Case Nos. 74,76,81,150), Award
No.311-74/76/81/150-3 of 14 July 1987 [Michel
Virally (pres.), Charles N. Brower, Parviz
Ansari Moin] ....................................... 624
d Waste Management, Inc. v. United Mexican States
(ICSID Case No.ARB(AF)/00/3), Award of 30 April
2004 [James Crawford (pres.), Benjamin
R. Civiletti, Eduardo Magallón Gómez] .............. 626
e Saipem S.p.A. v. The People's Republic of
Bangladesh (ICSID Case No.ARB/05/7), Award of
30 June 2009 [Gabrielle Kaufmann-Kohler (pres.),
Christoph H. Schreuer, Philip Otton] ............... 628
f Comments and Questions ............................. 630
9 Intangible Property (e.g, Intellectual Property,
Goodwill) ............................................. 631
a Case Concerning the Factory at Chorzów (Claim for
Indemnity) (The Merits), P.C.I.J. Judgment No.13
of 13 September 1928, P.C.I.J. Series A - Nos.
10-17 Recueil Des Arrêts (Chorzow Series A-No. 17
at p. 51) .......................................... 631
b Amoco International Finance Corporation v. The
Government of the Islamic Republic of Iran, et
al. (IUSCT Case No.56), Award No.310-56-3 of
14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 631
c Comments and Questions ............................. 632
10 Use of Property ....................................... 632
a Thomas Waelde and Abba Kolo, Environmental
Regulation, Investment Protection and 'Regulatory
Taking' in International Law, 50 IntT & Comp.
L.Q. 811,839-840,846-847 (2001) .................... 632
i Protocol to the Convention for the Protection
of Human Rights and Fundamental Freedoms, as
amended by Protocol No.11, Paris, 20 March
1952. Article 1-Protection of Property
(Council of Europe, European Treaty Series-No.
009, page 3) ................................... 634
aa Legitimate Aims ............................. 634
bb Control is Proportionate to the Aims ........ 634
b Katte Klitsche de la Grange v. Italy (Development
ban on private land), before the European Court
of Human Rights, Series A, No.293-B, Application
No.12539/86, Judgment of 27 October 1994,19
Eur. H.R. Rep. 368 (1995) .......................... 634
c Trustees of the Late Duke of Westminster's Estate
v. United Kingdom (The Leasehold Reform Acts case),
before the European Commission of Human Rights,
Application No.8793/79, Decision as to
Admissibility of 28 January 1983,5 Eur. H.R. Rep.
440,441,463-464 (1983) 635 [E] Expropriatory
Intent ............................................. 636
1 Question of the Necessity of Expropriatory Intent ..... 636
a Tippetts, Abbett, McCarthy, Stratton v. TAMS-AFFA
Consulting Engineers of Iran, et al. (IUSCT Case
No.7), Award No.141-7-2 of 29 June 1984 [Willem
Riphagen (pres.), Shane Shafeiei, George
H. Aldrich] ........................................ 636
b Phillips Petroleum Company Iran v. The blamic
Republic of Iran, The National Iranian Oil
Company (IUSCT Case No.39), Award No.42S-39-2
of 29 June 1989 [Robert Briner (pres.), Seyed
K. Khalilian, George H.Aldrich] .................... 637
c Comments and Questions ............................. 637
2 Effect of Act on Interests ............................ 638
a Tippetts, Abbett, McCarthy, Stratton v. TAMS-AFFA
Consulting Engineers of Iran, et al. (IUSCT Case
No.7), Award No.141-7-2 of 29 June 1984 [Willem
Riphagen (pres.), Shafie Shafeiei, George
H. Aldrich] ........................................ 638
F Standards ................................................ 638
1 Direct Expropriation: the Government Acquires
Title and Benefits from It ............................ 638
a Eudoro Armando Olguin v. Republic of Paraguay
(ICSID Case No.ARB/98/5), Decision on Objections
to Jursdiction of 8 August 2000 [Rodrigo Oreamuno
(pres.), Eduardo Mayora Alvarado, Francisco
Rezek] ............................................. 638
b CME Czech Republic BV. (The Netherlands) v. The
Czech Republic, UNCITRAL Arbitration Proceedings,
Partial Award of 13 September 2001 (UNCITRAL Ad
Hoc Trib. 2001) [Wolfgang Kühn (pres.), Stephen
M. Schwebel, Jaroslav Hándl] ....................... 638
2 Indirect Expropriation ................................ 640
a G.C. Christie, What Constitutes a Taking of
Property Under International Law?, 38 Brit. Y.B.
IntTL. 307,322-324,330-333,336-338(1962) ........... 640
b Antoine Biloune and Marine Drive complex Ltd v.
Ghana Investments Centre and the Government of
Ghana, Award on Jurisdiction and Liability of
27 October 1989,95 Int'l L. Rep. 183,209-210
(1994) [Stephen M. Schwebel (pres.), Don Wallace,
Jr., Monroe Leigh] ................................. 644
c Wena Hotels Limited v. Arab Republic of Egypt
(ICSID Case No.ARB/98/4), Award of 8 December
2000 [Monroe Leigh (pres.), Ibrahim Fadlallah,
Don. Wallace, Jr.] ................................. 645
d Generation Ukraine, Inc v. Ukraine (ICSID Case
No.ARB/00/9), Award of 16 September 2003 [Jan
Paulsson (pres.), Eugen Salpius, Jürgen Voss] ...... 647
e Comments and Questions ............................. 650
3 Legitimate Expectations of Investor ................... 651
a Opel Austria GmbH v. Council of the European
Union (Case T-l 15/94), Judgment the Court of
First Instance (Fourth Chamber) of 22 January 1997,
European Court Reports (1997), 11-00039
[K. Lenaerts (pres.), P. Lindh, J. D. Cooke] ....... 651
b Comments and Questions ............................. 652
G Governmental Acts ........................................ 653
l Laws and Decrees Explicitly Expropriating ............. 653
a Anglo-Iranian Oil Co. Case, 1952 I.C.J. 103,103-
114 (July 22) (jurisdiction denied) ................ 653
b Bolivia: Supreme Decree No.28701,1 May 2006,45
ILM 1020,1021 (2006) ............................... 653
2 Appointment of Managers ............................... 653
a Anglo-Iranian Oil Co. Case, 1952 I.C.J. 103,103-
114 (July 22) (jurisdiction denied) ................ 653
3 Seizure of Premises and Impoundment of Property ....... 653
4 Announcement of Intended Expropriation without
Further Acts .......................................... 654
a Sola Tiles, Inc. v. The Government of the Islamic
Republic of Iran (IUSCT Case No.317), Award
No.298-317-1 of 22 April 1987 [Karl-Heinz
Böckstiegel (pres.), Mohsen Mostafavi, Howard
M. Holtzmann] ...................................... 654
b Comments and Questions ............................. 655
c Agrotexim and Others v. Greece (Town planning
measures taken by a municipality with a view to
expropriating company property), before the
European Court of Human Rights, Series A, No.
330, Application No.14807/89, Judgment of
24 October 1995,21 Eur. H.R. Rep. 250 (1995) ....... 655
d Compañía del Desarrollo de Santa Elena, S.A.
v. The Republic of Costa Rica (ICSID Case
No.ARB/96/1), Final Award of 17 February 2000
[L. Yves Fortier (pres.), Elihu Lauterpacht,
Prosper Weil] ...................................... 655
5 Unilateral Reduction of Concession Area ............... 655
a Liberian Eastern Timber Corporation ("LETCO")
v. The Government of the Republic of Liberia
(ICSID Case No.ARB/83/2), Award of 31 March
1986,2 ICSID Rep. 346 (1994) [Bernardo M.
Cremades (pres.), Jorge Gonçalves Pereira, Alan
Redfern] ........................................... 655
6 Use Restrictions ...................................... 657
7 Forced Sales .......................................... 658
a G.C. Christie, What Constitutes a Taking of
Property Under International Law?, 38 Brit. Y.B.
Int'l L. 307,324-326,328-329 (1962) ................ 658
b Comments and Questions ............................. 660
8 Cessation of Project Work Due to Governmental
Interference .......................................... 661
a Antoine Biloune and Marine Drive complex Ltd
v. Ghana Investments Centre and the Government of
Ghana, Award on Jurisdiction and Liability of 27
October 1989,95 Int'l L. Rep. 183,209-210 (1994)
[Stephen M. Schwebel (pres.), Don Wallace, Jr.,
Monroe Leigh ....................................... 661
9 Setting Product Price at Loss by Governmental
Decree ................................................ 661
a S.A.R.L. Benvenuti and Bonfant v. Peoples Republic
of the Congo (ICSID Case No.ARB/77/2), Award of
8 August 1980, 1 ICSID Rep. 330 (1993) [Jorgen
Trolle (pres.), Rudolf Bystricky, Edilbert
Razafindralambo .................................... 661
b Pope & Talbott Inc. v. The Government of Canada
(ad hoc arbitration under the 1976 UNCITRAL
Rules), Award on the Merits of Phase 2 by
Arbitral Tribunal of 10 April 2001 [Lord Dervaird
(pres.), Benjamin J. Greenberg, Murray J.
Belman] ............................................ 661
H Legality ................................................. 662
1 Form of Expropriation (eg., Due Process) .............. 662
a Responsibility of the State for Injuries Caused
in Its Territory to the Person or Property of
Aliens - Measures Affecting Acquired Rights:
Fourth Report by F.V. García Amador, [1959] 2 Y.B.
Int'l L. Comm'n 1, U.N. Doc. A/CN.4/119 ............ 662
b Sedco, Inc. v. National Iranian Oil Company
and The Islamic Republic of Iran (IUSCT Case
No.129), Award No.ITL 59-129-3 of 27 March 1986
[Nils Mangård (pres.), Charles N. Brower, Parviz
Ansari Moin] ....................................... 662
2 Purpose ............................................... 663
a Not for a Public Purpose ........................... 663
i Amoco International Finance Corporation, v. The
Government of the Islamic Republic of Iran, et
al. (IUSCT Case No.56), Award No.310-56-3 of
14 Jury 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] .................. 663
b Discrimination ..................................... 664
i Sociedad Minera el Teniente S.A. v. The
Aktiengesellschaft Norddeutsche Attinerie
(Chilean Copper case), Superior Court of
Hamburg Docket No.8004/73, Decision of
22 January 1973,12 I.L.M. 251,276-278 (1973) ... 664
ii Liberian Eastern Timber Corporation ("LETCO")
v. The Government of the Republic of Liberia
(ICSID Case No.ARB/83/2), Award of 31 March
1986,2 ICSID Rep. 346 (1994) [Bernardo
M. Cremades (pres.), Jorge Gonçalves Pereira,
Alan Redfern] .................................. 665
c Violation of stabilization clause .................. 665
i AGIP Spa v. The Government of the Popular
Republic of the Congo (ICSID Case
No.ARB/77/1), Award of 30 November 1979,67
Int'l L. Rep. 318 (1984) [Jørgen Trolle
(pres.), René-Jean Dupuy, Fuad Rouhani] ........ 665
ii Government of Kuwait v. American Independent
Oil Company (AMINOIL), Award of 24 March 1982,
66 Int'l L. Rep. 518,585-591 (1982) [Paul
Reuter (pres.), Hamed Sultan, Gerald
Fitzmaurice] ................................... 665
iii Mobil Oil Iran Inc., et al. v. Government of
the Islamic Republic of Iran and National
Iranian Oil Company (IUSCT Case Nos. 74,76,
81,150), Award No.311-74/76/81/150-3 of
14 Jury 1987 [Michel Virally (pres.),
Charles N. Brower, Parviz Ansari Moin] ......... 669
d Comments and Questions ............................. 670
I Date of Expropriation .................................... 670
1 Vance R. Koven, Expropriation and the "Jurisprudence"
of OPIC, 22 Harv.J. Int'l L. 269,277,311-314 (1981) ... 670
2 W. Michael Reisman and Robert D. Sloane, Indirect
Expropriation and Its Valuation in the BIT
Generation, 74 Brit. Y.B. Int'l L. 115, 148,150
(2004) ................................................ 672
3 Cases ................................................. 674
a Amoco International Finance Corporation, v. The
Government of the Islamic Republic of Iran, et
al. (IUSCT Case No.56), Award No.310-56-3 of
14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 674
b Phillips Petroleum Company Iran v. The Islamic
Republic of Iran and The National Iranian Oil
Company (IUSCT Case No.39), Award No.425-39-2
of 29 June 1989 [Robert Briner (pres.), Seyed
K. Khalilian, George H. Aldrich] ................... 676
c Compañía del Desarrollo de Santa Elena, S.A.
v. The Republic of Costa Rica (ICSID Case
No.ARB/96/l), Final Award of 17 February 2000
[L. Yves Fortier (pres.), Elihu Lauterpacht,
Prosper Weil] ...................................... 676
d Comments and Questions ............................. 677
J Defenses Argued by Governments ........................... 677
1 U.N. Resolutions ...................................... 677
a Permanent Sovereignty over Natural Resources,
General Assembly Resolution 1803 (XVII) of 14
December 1962 ...................................... 677
b Declaration on the Establishment of a New
International Economic Order (1 May 1974),
A/RES/3201 (S-Vl) .................................. 678
c Charter of Economic Rights and Duties of States
(12 December 1974), A/RES/3281 (XXLX) .............. 678
2 Cases ................................................. 679
a Texaco Overseas Petroleum Company/California
Asiatic Oil Company (TOPCO) v. The Government of
the Libyan Arab Republic, Award on the Merits of
19 January 1977,17 I.L.M. 3, 27-31 (1978) [Rene-
Jean Dupuy (sole arbitrator)] ...................... 679
b Comments and Questions ............................. 685
c Government of Kuwait v. American Independent Oil
Company (AMINOIL), Award of 24 March 1982,66
Int'l L. Rep. 518 (1982) [Paul Reuter (pres.),
Hamed Sultan, Gerald Fitzmaurice] .................. 686
3 Administrative Contracts .............................. 686
a The Government of the State of Kuwait v. The
American Independent Oil Company (AMINOIL), Award
of 24 March 1982,66 Int'l L. Rep. 518,588-589
(para. 90(3),9l(i)(ii)) (1982) [Paul Reuter
(pres.), Hamed Sultan, Gerald Fitzmaurice] ......... 686
4 Force Ma/eure/Impossibility/Frustration .............. 687
a Mobil Oil Iran Inc., et al. v. Government of the
blamic Republic of Iran, et al. (IUSCT Case Nos.
74,76,81,150), Award No.311-74/76/81/150-3 of
14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 687
b CMS Gas Transmission Company v. The Argentine
Republic (ICSID Case Na ARB/01/8), Award of
12 May 2005 [Francisco Orrego Vicuna (pres.),
Marc Lalonde, Francisco Rezek] ..................... 689
c Sempra Energy International v. Argentine Republic
(ICSID Case No.ARB/02/16), Award of 28 September
2007,102-105 [Francisco Orrego Vicuña (pres.),
Marc Lalonde, Sandra Morelli Rico] ................. 694
d LG&E Energy Corp., LG & E Capital Corp. and LG&E
International Inc. v. Argentine Republic (ICSID
Case No.ARB/02/l), Decision on Liability of
3 October 2006,61-62,64,67-68,70-80 [Tatiana B.
de Maekelt (pres.), Francisco Rezek, Albert
Jan van den Berg] .................................. 696
5 Implied Termination or Waiver ......................... 703
a Mobil Oil Iran Inc., et al v. Government of the
Islamic Republic of Iran, et al. (IUSCT Case
Nos.74,76,81, ISO), Award No.311-74/76/81/150-3
of 14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 703
6 Changed Circumstances ................................. 703
a Mobil Oil Iran Inc., et al v. Government of the
Islamic Republic of Iran, et al. (IUSCT Case Nos.
74,76,81,150), Award No.311-74/76/81/150-3 of
14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ..................... 703
b Phillips Petroleum Company Iran v. The Islamic
Republic of Iran and The National Iranian Oil
Company (IUSCT Case No.39), Award No.425-39-2
of 29 June 1989 [Robert Briner (pres.), Seyed
K. Khalilian, George H. Aldrich] ................... 704
§8.03 Discriminatory Conduct: What is the Customary
International Law Standard? ................................. 704
A BP Exploration Company (Libya) Limited v. The
Government of the Libyan Arab Republic, Award of
10 October 1973 and 1 August 1974, 53 Int'l L. Rep.
297,329,346-348,353-354 (1979) [Gunnar Lagergren
(sole arbitrator)] ....................................... 704
B A.F.M. Maniruzzaman, Expropriation of Alien Property
and the Principle of Non-Discrimination in
International Law of Foreign Investment: An Overview,
8 J. Transnat'l L. & Pol'y 57-59,67-70 (1998) ............ 707
C Comments and Questions ................................... 709
§8.04 Arbitrary Conduct ........................................ 709
A Responsibility of the State for Injuries Caused in
Its Territory to the Person or Property of Aliens -
Measures Affecting Acquired Rights: Fourth Report by
F.V. Garcia Amador, [1959] 2 Y.B. Int'l L. Comm'n 1,7-9,
UN. Doc. A/CN.4/119 ...................................... 709
B Glamis Gold, Ltd. v. United States of America (ad hoc
arbitration under the 1976 UNCITRAL Rules), Award of
8 June 2009 [Michael K. Young, (pres.), David
D. Caron, Kenneth D. Hubbard] ............................ 712
C Comments and Questions ................................... 714
§8.05 Denial of Justice ....................................... 714
A The Loewen Group, Inc. and Raymond L. Laewen v. United
States of America (ICSID Case No.ARB/(AF)/98/3), Award
of 26 June 2003 [Anthony Mason (pres.), Abner
J. Mikva, Michael Mustill] ............................... 714
B Mondev International Ltd. v. United States of America
(ICSID Case No.ARB(AF)/99/2), Award of 11 October 2002
[Ninian Stephen (pres.), James Crawford, Stephen
M. Schwebel] ............................................. 718
C Amco Asia Corporation and others v. Republic of
Indonesia (ICSID Case No.ARB/81/1), Award of 5June
1990,1 ICSID Rep. 569,602-605 (1993) [Rosalyn Higgins
(pres.), Marc Lalonde, Per Magid] ........................ 722
D Athanassoglou and Others v. Switzerland, Judgment of
European Court of Human Rights of 6 April 2000,
Application No.27644/95, ECHR 2000-IV .................... 725
E Robert Azinian, Kenneth Davitian and Ellen Baca v.
The United Mexican States (ICSID Case No.ARB
(AF)/97/2), Award of 1 November 1999 Jan Paulsson
(pres.), Benjamin R. Civiletti, Claus von Wobeser] ....... 727
F Comments and Questions ................................... 731
§8.06 Abuse of Rights .......................................... 732
A Responsibility of the State for Injuries Caused in Its
Territory to the Person or Property of Aliens -
Measures Affecting Acquired Rights: Fourth Report by
FV. García Amador, [1959] 2 Y.B. Int'l L. Comm'n 1,
U.N. Doc. А/CN.4/119 ..................................... 732
B Karl-Heinz Böckstiegel, Arbitration and State
Enterprises: A Survey on the National and Internatioanl
State of Law and Practice, 45-46 (Kluwer Law
International 1984) ...................................... 732
C International Law Commission (ILC) Articles on State
Responsibility (2001) .................................... 733
§8.07 Unjust Enrichment ....................................... 733
A Christoph H. Schreuer, Unjustified Enrichment in
International Law, 22 Am. J. Comp. L. 281,281,284-285,
289,300-301(1974) ........................................ 733
B International Law Commission (ILC) Articles on State
Responsibility (2001) .................................... 734
C Factory at Chorzow (Germany v. Poland), Claim No.13
(PCA), Judgment on the Merits of 13 September 1928,
[1928] P.C.I.J. Series A-No.17,47(1928) .................. 735
D Arthur Nussbaum, The Arbitration Between the Lena
Goldfields, Ltd. and the Soviet Government, 36 Cornell
L. Q.31,50-51 (1950-1951) ................................ 735
E Sea-Land Service, Inc. v. The Islamic Republic of Iran
and Ports and Shipping Organization of Iran (IUSCT Case
No.33), Award No.135-33-1 of 22 June 1984 [Gunnar
Lagergren (pres.), Mahmoud M. Kashani, Howard
M. Holtzmann] ............................................ 736
F Flexi-Van Leasing, Inc. v. The Government of the
Islamic Republic of Iran (IUSCT Case No.36), Award
No.259-36-1 of 13 October 1986 [Gunnar Lagergren
(pres.), Koorosh-Hossein Ameli, Howard M. Holtzmann] ..... 738
G Schlegel Corporation on behalf of SchlegalLinign
Technology GmbH v. National Iranian Copper Industries
Company (IUSCT Case No.834), Award No.295-834-2 of
27 March 1987 [Robert Briner (pres.), George
H. Aldrich, Hamid Bahrami-Ahmadi ......................... 741
H Lockheed Corporation v. The Government of Iran,
The Ministry of War & The Iranian Air Force (IUSCT
Case No.829), Award No.367-829-2 of 9 June 1988
[Robert Briner (pres.), George H. Aldrich, Seyed
K. Khalilian] ............................................ 744
I Beyeler v. Italy, Judgment of the European Court of
Human Rights of 5 January 2000, Application
No.33202/96, ECHR 2000-157 .............................. 745
J Mobil Oil Iran Inc., et al. v. Government of the
Islamic Republic of Iran & National Iranian Oil Company
(IUSCT Case Nos. 74,76,81,150), Award No.311-74/76/81/
150-3 of 14 July 1987 [Michel Virally (pres.), Charles
N. Brower, Parviz Ansari Moin] ........................... 746
K Amco Asia Corporation and others v. Republic of
Indonesia (ICSID Case No.ARB/81/1), Award of 5 June
1990,1 ICSID Rep. 569,607-608 (1993) [Rosab/n Higgins
(pres.), Marc Lalonde, Per Magid] ........................ 746
L Charles N. Brower and Jason D. Brueschke, The Iran-
United States Claims Tribunal 427-430 (Martinus Nijhoff
Publishers 1998) ......................................... 747
M Comments and Questions ................................... 748
§8.08 Unlawful Interference .................................... 748
A Eastman Kodak Company and others v. The Government of
Iran and others (IUSCT Case No.227) and Eastman Kodak
International Capital Company, Incorporated, a claim of
less than U.S. $250,000 presented by the Government of
the United States of America v. The Islamic Republic
of Iran (IUSCT Case No.12384), Award
No.329-227/12384-3 of 11 November 1987 [Michel Virally
(pres.), Charles N. Brower, Parviz Ansari Moin] .......... 749
B Comments and Questions ................................... 752
Chapter 9 Violation of Investor Rights under Investment
Treaties ....................................................... 753
§9.01 Introduction ............................................. 753
§9.02 Absolute Standards ....................................... 756
A Fair & Equitable Treatment ............................... 756
1 US Model Bilateral Investment Treaty (2012), Article
2(2)(a) ............................................... 756
2 North American Free Trade Agreement (1993), Article
1105(l) ............................................... 756
3 EnergyCharterTreaty(1994), Article 10(1) .............. 757
4 Rudolf Dolzer and Christoph H. Schreuer, Principles
of International Investment Law,  132,134,136-17,
139-140 (2nd ed., Oxford University Press 2012) ....... 757
5 BIT Cases ............................................. 759
a Técnicas Medioambientales Teemed, S.A. v. The
United Mexican States (ICSID Case No.ARB
(AF)/00/2), Award of 29 May 2003, 153-157,
165-167,172-174 [Horacio A. Grigera Naon (pres.),
Jose Carlos Fernandez Rozas, Carlos Bernal Verea] .. 759
b Saluka Investments B.V. v. The Czech Republic
(ad hoc arbitration under the 1976 UNCITRAL
Rules), Partial Award of 17 March 2006,
297-309 [Arthur Watts (pres.), L. Yves Fortier,
Peter Behrens] ..................................... 763
c El Paso Energy International Company v. The
Argentine Republic (ICSID Case No.ARB/03/15),
Award of 31 October 2011, 355,364-377,512-519
[Lucius Caflisch (pres.), Brigitte Stern, Piero
Bernardini] ........................................ 766
d Parkerings-Compagniet AS v. Republic of Lithuania
(ICSID Case No.ARB/05/8), Award of 11 September
2007, 330-338 [Laurent Levy (pres.), Julian
Lew, Marc Lalonde] ................................. 770
6 NAFTA Cases ........................................... 771
a NAFTA Free Trade Commission, Notes of
Interpretation of Certain Chapter 11 Provisions,
2 (2001) ........................................... 771
b Waste Management, Inc. v. United Mexican States
('Number 2') (ICSID Case No.ARB(AF)/00/3), Award
of 25 June 2003, 91-93,98-99 [James R. Crawford
(pres.), Benjamin R. Civilette, Eduardo Magallón
Gómez] ............................................. 772
c Glamis Gold, Ltd. v. United States of America
(ICSID Administered Case), Award of 8 June 2009,
99 598-609,611-615,617-621,625-627 [Michael
K. Young, David D. Caron, Kenneth D. Hubbard] ...... 774
d Merrill & Ring Forestry L.P. v. Canada (ICSID
Administered Case), Award of 31 March 2010,
190-197,201,204-207, 209-213 [Francisco Orrego
Vicuña (pres.), Kenneth W. Dam, J. William
Rowley] ............................................ 778
7 Comments and Questions ................................ 782
B Full Protection & Security ............................... 785
1 Rudolf Dolzer and Christoph H. Schreuer,
Principles of International Investment Law,
160-162 (2nd ed., Oxford University Press 2012) ....... 785
2 Elettronica Sicula S.p.A. (ELSI) (United States
of America v. Italy), Judgment of 20 July 1989,
[1989] I.C.J. Rep. 15,89-93 (1989), 104-105,
107-108 ............................................... 786
3 Asian Agricultural Products Ltd. v. Republic of Sri
Lanka (ICSID Case No.ARB/87/3), Final Award of
27 June 1990,4 ICSID Rep. 246 (1997), 45-49,53,
72-73,75-77,85-86 [Ahmed Sadek El-Kosheri (pres.),
Berthold Goldman, Samuel K.B. Asante] ................. 788
4 Azurix Corp. v.Argentine Republic (ICSID Case No.
ARB/01/12), Award of 14 July 2006, 406-408 [Andrés
Rigo Sureda (pres.), Marc Lalonde, Daniel Hugo
Martins] .............................................. 793
5 Comments and Questions ................................ 794
C Treatment No Less Favorable than that Required by
International Law ........................................ 795
1 Kenneth J. Vandevelde, United States Investment
Treaties: Policy and Practice, 77-78 (Kluwer Law
International 1992) ................................... 795
2 L.F.H. Neer and Pauline E. Neer v. Mexico (General
Claims Commission - United States and Mexico),
Opinion Rendered 15 October 1926,21 Am. J. Int'l
L. 555,556,559-560 (1927) [General Claims
Commission; Concurring Opinion by Fred K. Nielsen] .... 795
3 Mondev International Ltd. v. United States of
America (ICSID Case No.ARB (AF)/99/2), Award of
11 October 2002, 110-117, 119-125 [Ninian Stephen
(pres.), James R. Crawford, Stephen M. Schwebel] ...... 796
4 Comments and Questions ................................ 800
D Arbitrary Treatment ...................................... 800
1 US Model Bilateral Investment Treaty (2012),
Article 2(2)(b) ....................................... 800
2 Elettronica Sicula S.p.A. (ELSI) (United States of
America v. Italy), Judgment of 20 July 1989, [1989]
I.C.J. Rep. 15,89-93 (1989), 120-121,123-124,127-
130 ................................................... 801
3 Ronald S. Lauder v. The Czech Republic (ad hoc
arbitration under the 1976 UNCITRAL Rules), Final
Award of 3 September 2001, 214,219,221-222,225-
228,229-230,232 [Robert Briner (pres.), Lloyd
Cutler, Bohuslav Klein] ............................... 803
4 Azurix Corp. v.Argentine Republic (ICSID Case
No.ARB/01/12), Award of 14 July 2006, 390-393
[Andres Rigo Sureda (pres.), Marc Lalonde, Daniel
Hugo Martins] ......................................... 805
5 Comments and Questions ................................ 806
E Discrimination ........................................... 807
1 North American Free Trade Agreement (1993), Article
1104 .................................................. 807
2 A.F.M. Maniruzzaman, Expropriation of Alien Property
and the Principle of Non-Discrimination in
International Law of Foreign Investment: An
Overview, 8 J. Transnat'l L. 8: Pol'y 57,58-59,61-
6S, 67-70,72,77 (1998) ................................ 807
3 Amoco International Finance Corporation v. The
Government of the Islamic Republic of Iran (IUSCT
Case No.56), Partial Award of 14 July 1987 [Michel
Virally (pres.), Charles N. Brower, Parviz
AnsariMoin] ........................................... 811
4 Nykomb Synergetics Technology Holding AB v. The
Republic of Latvia (SCC Case No.118/2001), Award
of 16 December 2003, [2003] IIC 182, §4.3.2(1)
at 34 (2003) .......................................... 812
5 Comments and Questions ................................ 813
F Umbrella Clause .......................................... 814
1 US Model Bilateral Investment Treaty (2012),
Article 2(2)(c) ....................................... 814
2 Anthony C. Sinclair, The Origins of the Umbrella
Clause in the International Law of Investment
Protection, 20(4) Arb. Int'l 411, 411-434(2004) ....... 814
3 OECD, Working Paper No.2006/3: Interpretation of
the Umbrella Clause in Investment Agreements, 7-9
(OECD, 2006) .......................................... 816
4 James R. Crawford, Treaty and Contract in Investment
Arbitration: The 22nd Freshfields Lecture on
International Arbitration, London (29 November
2007), 6(1) Transnational Dispute Management 18-21
(2009) ................................................ 817
5 Eureko B.V. v. Republic of Poland (ad hoc arbitration
under the 1976 UNCITRAL Rules), Partial Award of
19 August 2005, 246 [L. Yves Fortier (pres.),
Stephen M. Schwebel, Jerzy Rajski] .................... 819
6 SGS Société Générale de Surveillance v. Republic of
the Philippines (ICSID Case No.ARB/02/6), Decision
of the Tribunal on Objections to Jurisdiction of
29 January 2004, 113,115-128, 130-131,134-135,
137-138,141,143,154 [Ahmed S. El-Kosheri (pres.),
James R. Crawford, Antonio Crivellaro] ................ 819
7 LG&E Energy Corp., LG&E Capital Corp. and LG&E
International Inc. v. Argentine Republic (ICSID Case
No.ARB/02/1), Decision on Liability of 3 October
2006, 171-172,174-175 [Tatiana B. de Maekelt
(pres.), Francisco Rezek, Albert Jan van den Berg] .... 825
8 El Paso Energy International Company v. Argentine
Republic (ICSID Case No.ARB/03/15), Decision on
Jurisdiction of 27 April 2006, 70,79,81-82,84
[Lucius Caflisch (pres.), Brigitte Stern, Piero
Bernardini] ........................................... 826
9 Burlington Resources Inc. v. Republic of Ecuador,
ICSID Case No.ARB/08/S (formerly Burlington
Resources Inc. and others v. Republic of Ecuador
and Empresa Estatal Petróleos del Ecuador
(PetroEcuador)) (ICSID Case No.ARB/08/5), Decision
on Liability of 14 December 2012, 211,214-218,220
[Gabrielle Kaufmann-Kohler (pres.), Brigitte Stern,
Francisco Orrego Vicuna] .............................. 828
10 Comments and Questions ................................ 829
G Expropriation ............................................ 831
1 US Model Bilateral Investment Treaty (2012),
Article 3 ............................................. 831
2 North American Free Trade Agreement (1993), Article
1110 .................................................. 832
3 Energy Charter Treaty (1994), Article 13 .............. 833
4 OECD, Working Paper No.2004/4: 'Indirect
Expropriation and the 'Right to Regulate' in
International Investment Law, 3-5,22 (OECD 2004) ...... 834
5 Ursula Kriebaum, Partial Expropriation, 8 (1) J.
of World Inv. and Trade 69,83-84 (2007) ............... 835
6 Phillips Petroleum Company Iran v. The Islamic
Republic of Iran & The National Iranian Oil Company
(IUSCT Case No.39), Award of 29 June 1989 [Robert
Briner (pres.), Seyed K. Khalilian, George
H. Aldrich] ........................................... 837
7 Pope & Talbot Inc. v. The Government of Canada (ad
hoc arbitration under the 1976 UNCITRAL Rules),
Interim Award of 26 June 2000, 96-105 [Lord
Dervaird (pres.), Benjamin J. Greenberg, Murray
J. Belman] ............................................ 842
8 Waste Management, Inc. v. United Mexican States
('Number 2') (ICSID Case No.ARB(AF)/00/3), Award
of 25 June 2003, 143-145,159-162,177 [James R.
Crawford (pres.), Benjamin R.Civilette, Eduardo
Magallón Gómez] ....................................... 844
9 GAMI Investments, Inc. v. The Government of
the United Mexican States (ad hoc arbitration under
the 1976 UNCITRAL Rules), Final Award of 12 November
2004, 116,123,126-133 [W. Michael Reisman, Julio
Lacarte Muró, Jan Paulsson] .......................... 846
10 Compañía de Aguas del Aconquija S.A. and Vivendi
Universal (formerly Compagnie Générale Des Eaux)
v. Argentine Republic (ICSID Case No.ARB/97/3),
Award of 20 August 2007, 7.5.3-7.5.4,7.5.8,
7.5.10-7.5.11,7.5.17-7.5.21,7.5.24-7.5.30, 7.5.31,
7.5.33-7.5.34 [J. William Rowley (pres.),
Gabrielle Kaufmann-Kohler, Carlos Bernal Verea] ....... 848
11 Burlington Resources Inc. v. Republic of Ecuador,
ICSID Case No.ARB/08/'S (formerly Burlington
Resources Inc. and others v. Republic of Ecuador
and Empresa Estatal Petróleos del Ecuador
(PetroEcuador)) (ICSID Case No.ARB/08/5),
Decision on Liability of 14 December 2012,
344-345,391-404,429-430,448-449,454-456,537-540
[Gabrielle Kaufmann-Kohler (pres.), Brigitte
Stern, Francisco Orrego Vicuña] ....................... 852
12 Comments and Questions ................................ 856
H Effective Means of Enforcing Rights ...................... 858
1 Chevron Corporation (USA) and Texaco Petroleum
Company (USA) v. The Republic of Ecuador (PCA Case
No.34877), Partial Award on the Merits of 30 March
2010, 241-248,250-257, 262-264,268-270 [Karl-
Heinz Böckstiegel (pres.), Charles N. Brower, Albert
Jan van den Berg] ..................................... 858
2 Questions and Comments ................................ 862
Relative Standards .................................... 863
A National Treatment ....................................... 863
1 US Model Bilateral Investment Treaty (2012),
Article 3 ............................................. 863
2 North American Free Trade Agreement (1993), Article
1102 .................................................. 864
3 Energy Charter Treaty (1994), Articles 10(2), 10(3),
10(7) and 10(10) ...................................... 864
4 UNCTAD, National Treatment, UNCTAD Series on Issues
in International Investment Agreements, 1-2,12,25-
26,33 (United Nations Publications 1999) .............. 865
5 S.D. Myers, Inc. v. Government of Canada (ad hoc
arbitration under the 1976 UNCITRAL Rules), Partial
Award of 13 November 2000, 238,240-256 [Bryan
P. Schwartz, Edward C. Chiasson, J. Martin Hunter] .... 867
6 Archer Daniels Midland Company and Tate & Lyle
Ingredients Americas, Inc. v. The United Mexican
States (ICSID Case No.ARB(AF)/04/05), Award of
21 November 2007, 197-213 [Bernardo M. Cremades
(pres.), Arthur W. Rovine, Eduardo Siqueiros Т.] ...... 870
7 Merrill & Ring Forestry L.P. v. Canada (ICSID
Administered Case), Award of 31 March 2010, 86-94
[Francisco Orrego Vicuna (pres.), Kenneth W. Dam,
J. William Rowley] .................................... 874
8 Comments and Questions ................................ 876
B Most-Favored-Nation Treatment ............................ 877
1 US Model Bilateral Investment Treaty (2012),
Article 4 ............................................. 877
2 North American Free Trade Agreement (1993), Article
1103 .................................................. 877
3 UNCTAD, Bilateral Investment Treaties in the Mid-
1990s, 58,61-62 (United Nations Publications 1998) 877
4 Rudolf Dolzer and Margrete Stevens, Bilateral
Investment Treaties, (Kluwer Law International
1995) ................................................. 879
5 Emilie Agustín Maffezini v. The Kingdom of Spain
(ICSID Case No.ARB/97/7), Decision on Jurisdiction
of 25 January 2000, 16 ICSID Rev. - Foreign Int'l
L.J. 212,225-236 (2001) [Francisco Orrego Vicuna
(pres.), Thomas Buergenthal, Maurice Wolf] ............ 879
6 Plama Consortium Limited v. Republic of Bulgaria
(ICSID Case No.ARB/03/24), Decision on Jurisdiction
of 8 February 2005, 184,186-187,189-192,198-200,
203-210,212,218-219,222-224,227 [Carl F. Salans
(pres.), Albert Jan van den Berg, W.Veeder] ........... 885
7 Impregilo S.p.A. v. Argentine Republic (ICSID Case
No.ARB/07/17), Final Award of 21 June 2011 - Prof.
Bridgette Stern's Concurring and Dissenting
Opinion, 16-17,45,47-53,57-58,61,67,70,78-80
[Hans Danelius (pres.), Charles N. Brower, Brigette
Stern] ................................................ 889
8 UNCTAD, Most-Favoured-Nation Treatment, UNCTAD
Series on Issues in International Investment
Agreements II, 66-67,82-85 (United Nations
Publications 2010) 893 Table 1. Summary of MFN
claims ................................................ 894
9 Comments and Questions ................................ 895
Chapter 10 Defenses ............................................ 897
§10.01 Introduction ............................................ 897
A National Oil Corporation (Libya) v. Libyan Sun Oil
Company (USA)(ICC Case No.4462/A5), First Award of
31 May 1985,291.L.M. 565, 584-588 (1990) [Edmund
Muskie, Hein Kotz, Robert Schmelck] ...................... 898
B Comments and Questions ................................... 900
C Gould Marketing, Inc. v. Ministry of National Defense
of Iran (IUSCT Case No.49), Interlocutory Award of
27 July 1983 [Pierre Bellet (pres.), George
H. Aldrich, Shane Shafeiei ............................... 901
D Amoco International Finance Corporation v. The
Government of the Islamic Republic of Iran (IUSCT Case
No.56), Partial Award of 14 July 1987 [Michel Vitally
(pres.), Charles N. Brower, Parviz Ansari Moin] .......... 902
E Comments and Questions ................................... 904
F Phillips Petroleum Company Iran v. The Islamic
Republic of Iran & The National Iranian Oil Company
(IUSCT Case No.39), Award of 29 June 1989 [Robert
Briner (pres.), Seyed K. Khalilian, George H. Aldrich] ... 904
G Comments and Questions ................................... 906
H International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, November 2001, Article 23 and Commentary, [2001]
2(2) Y.B. Int'l L. Comm'n 30,76-78 ....................... 907
I Comments and Questions ................................... 910
J UNIDROIT Principles of International Commercial
Contracts (2010), Article 7.1.7 .......................... 910
K James R. Crawford and Anthony Sinclair, The UNIDROIT
Principles of International Commercial Contracts
and their Application to State Contracts, ICC
Bulletin - Special Supplement 57,57-75 (2002) ............ 910
L] Comments and Questions ................................ 915
§10.03 Coercion and Duress ..................................... 916
A Detlev F. Vagts, Coercion and Foreign Investment
Rearrangements, 72 Am. J. Int'l. L. 17,17-19,33-36
(1978) ................................................... 916
B Comments and Questions ................................... 919
C International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 18 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,69-70 (2001) .......................... 919
D Comments and Questions ................................... 921
E UNIDROIT Principles of International Commercial
Contracts (2004), Article 3.9 ............................ 921
F Government of Kuwait v. American Independent Oil
Company (AMINOIL), Award of 24 March 1982,66 Int'l L.
Rep. 518,569-571, 615-616 (1982) [Paul Reuter (pres.),
Hamed Sultan, Gerald Fitzmaurice] ........................ 922
G Comments and Questions ................................... 924
§10.04 Necessity ............................................... 924
A Case Concerning the Gabčíkovo-Nagymaros Project
(Hungary v. Slovakia), Judgment of 25 September 1997,
[1997] ICJ Rep. 7,39-46, 58,63(1997) ..................... 924
B International Law Commission, Articles on
Responsibility of States for Internationally Wrongful
Acts, Article 25 and Commentary, [2001] 2(2) Y.B.
Int'l L. Comm'n 30,80-84 (2001) .......................... 929
C Comments and Questions ................................... 932
D LG&E Energy Corp., LG&E Capital Corp. & LG&E
International, Inc. v. Argentine Republic (ICSID Case
No.ARB/02/1), Decision on Liability of 3 October
2006,21 ICSID Rev. - Foreign Int'l LJ. 269 (2006)
Tatiana B. de Maekelt (pres.), Francisco Rezek, Albert
Jan van den Berg] ........................................ 933
E CMS Gas Transmission Company v. Argentine Republic
(ICSID Case No.ARB/01/8), Decision on Annulment of
25 September 2007,14 ICSID Rep. 251,270-271,274-277
(2009) [Gilbert Guillaume (pres.), Nabil Elaraby,
James R. Crawford] ....................................... 935
F National Grid PLC v. Argentine Republic, Award of
3 November 2008 [Alejandro Miguel Garro (pres.), Judd
L. Kessler, Andres Rigo Sureda] .......................... 938
§ 10.05 Corruption ............................................. 939
A OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions
(1997), 371.L.M. 1 (1998) ................................ 940
B Argentine Engineer v. British Company (ICC Case
No.1110), Award of 1963,21 Y.B.Comm'lArb.47,50-51
(1996) [GunnarLagergren(sole arbitrator)] ................ 943
C J. Gillis Wetter, Issues of Corruption before
International Arbitral Tribunals: The Authentic Text
and True Meaning of Judge Gunnar Lagergren's 1963
Award in ICC Case No.1110, 10 Arb. IntT 277,277-281
(1994) ................................................... 945
D Comments and Questions ................................... 948
E Establishment of Middle East Country X v. South
Asian Construction Company (ICC Case No.4145),
Award of 1984,12 Y.B. CommT Arb 97,102-103 (1987) ........ 948
F Comments and Questions ................................... 950
G Broker v. Contractor (ICC Case No5622), Final Award
of 1988,19 Y.B. CommT Arb. 105,110-115 (1994) ............ 950
H Comments and Questions ................................... 953
I Partner v. 4 Partners (ICC Case No.6286), Partial
Award of 28 August 1991,19 Y.B. Comm'lArb. 141,149-150
(1994) ................................................... 953
J Comments and Questions ................................... 954
K Tanzania Electric Supply Company Limited
v. Independent Power Tanzania Limited (ICSID Case
No.ARB/98/8), Decision on Tariff and Other Remaining
Issues of 9 February 2001,8 ICSID Rep. 272, 282-283
(2005) [Kenneth Rokison (pres.), Charles Brower,
Andrew Rogers] ........................................... 954
L Comments and Questions ................................... 955
M World Duty Free Company Limited v. Kenya (ICSID Case
No.ARB/00/7), Award of 4 October 2006,46 ILM.
339,366-368,369-370,370-371 (2007) ....................... 956
N Comments and Questions ................................... 960
§10.06 Fundamental Change of Circumstances (Rebus Sic
Stantibus/Imprévision) ...................................... 960
A UNIDROIT Principles of International Commercial
Contracts (2004), Articles 6.2.1., 6.2.2. and 6.2.3 ...... 961
B CMS Gas Transmission Company v. Argentine Republic
(ICSID Case No.ARB/01/8), Award of 12 May 2005, 14
ICSID Rep. 152,194-195 (2009) [Francisco Orrego
Vicuña (pres.), Marc Lalonde, Francisco Rezek] ........... 961
C Comments and Questions ................................... 963
Chapter 11 Reparations Recoverable by Foreign Investors in
International Law .............................................. 965
§11.01 Introduction ............................................ 965
§11.02 Reparations Generally ................................... 966
A General Types of Reparations ............................. 966
l UN International Law Commission (ILC) Articles on
State Responsibility (2001), Articles 31 and 34 ....... 966
2 Harvard Draft Convention on State Responsibility,
55 Am. J. Int'l L. 545,581 (1961) ..................... 966
B General Principle of Reparations ......................... 967
l Factory at Chorzow (Germany v. Poland), Claim
No.13 (PCA), Judgment on the Merits of
13 September 1928, [1928] P.C.I.J. Series A -
No.17,47 (1928) ....................................... 967
C Limits on Reparations .................................... 967
1 UN International Law Commission (ILC) Articles on
State Responsibility (2001), Article 39 ............... 967
2 Harvard Draft Convention on State Responsibility,
55 Am. J. Int'l L. 545,581 (1961) ..................... 968
3 James R. Crawford, State Responsibility: Third
Report by the Special Rapporteur in International
Responsibility, UN Doc. A/CN.4/507, 161-163 ........ 968
4 F.V. García Amador, The Changing Law of
International Claims, Vol. II, 599-601 (Oceana
Publications 1984) .................................... 968
5 Bridas S.A.P.I.C., Bridas Energy International,
Ltd., Intercontinental Oil & Gas Ventures, Ltd.
and Bridas Corporation v. Government of
Turkmenistan, Concern Balkannebitgazsenagat and
State Concern Turkmenneft (ICC Case No.9058/FMS/
KGA), Third Partial Award of 2 September 2000,
12-13 [Edward C. Chiasson, (pres.), Griffin
B.Bell, Hans Smit] .................................... 970
6 Occidental Petroleum Corporation
and Occidental Exploration and Production Company
v. The Republic of Ecuador (ICSID Case
No.ARB/06/11), Award of 5 October 2012, 662-666,
669,678-680,683-685,687 [L. Yves Forcier (pres.),
David A.R. Williams, Brigitte Stern ................... 971
7 Comments and Questions 974
§11-03 Declaratory, Injunctive and Interim Relief .............. 975
A UN International Law Commission (ILC) Articles on
State Responsibility (2001), Articles 29 and 30 .......... 975
B US Model Bilateral Investment Treaty (2012),
Articles 26 and 28 ....................................... 975
C James R. Crawford, State Responsibility: Third Report
by the Special Rapporteur in International
Responsibility, UN Doc. A/CN.4/507,184 ................... 975
D F.V. Garcia Amador, The Changing Law of International
Claims, Vol. II, 576-578,581-583 (Oceana Publications
1984) .................................................... 976
E Christoph H. Schreuer, Loretta Malintoppi, August
Reinisch and Anthony Sinclair, The ICSID Convention:
A Commentary, 1136-1139 (2nd ed., Cambridge University
Press 2009) .............................................. 977
F Enron Corporation and Ponderosa Assets, L.P.
v. Argentine Republic (ICSID Case No.ARB/01/3),
Decision on Jurisdiction of 14 January 2004, 76-81
[Francisco Orrego Vicuña (pres.), Héctor Gros
Espiel, Pierre-Yves Tschanz] ............................. 978
G Sergei Paushok, CJSC Golden East Company and
CJSC Vostokneftegaz Company v. The Government of
Mongolia (ad hoc arbitration under the 1976 UNCITRAL
Rules), Order on Interim Measures of 2 September 2008,
36-37,39,45-46,55,68-71,79-85 [Marc Lalonde
(pres.), Brigitte Stern, Horacio A. Grigera Naón] ........ 980
H Quiborax S.A., Non Metallic Minerals S.A. and Allan
Fosk Kaplún v. Plurinational State of Bolivia (ICSID
Case No.ARB/06/2), Decision on Provisional Measures
of 26 February 2010, 113-114,116-124, §V [Gabrielle
Kaufmann-Kohler (pres.), Marc Lalonde, Brigitte Stern] ... 983
Comments and Questions ................................... 985
§11.04 Compensation for Breach of Contract ..................... 989
A Harvard Draft Convention on State Responsibility,
55 Am. J. Int'l L. 545,581 (1961) ........................ 989
B UNIDROIT Principles of International Commercial
Contracts (2010), Articles 7.4.2-7.7.4.4,7.4.7-7.4.8,
7.4.11,7.4.13 ............................................ 989
C Bridas S.A.P.I.C., Bridas Energy International, Ltd.,
Intercontinental Oil & Gas Ventures, Ltd. and Bridas
Corporation v. Government of Turkmenistan, Concern
Balkannebitgazsenagat and State Concern Turkmenneft
(ICC Case No.9058/FMS/KGA), Partial Award of 25
June 1999,23-29 [Edward C. Chaisson (pres.), Hans
Smit, Griffin B. Bell] ................................... 991
D Karaha Bodos Company L.L.C. v. Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara ('Pertamina') and Pt. PLN
(Persero) ('PLN') (ad hoc arbitration under the 1976
UNCITRAL Rules), Final Award of 18 December 2000),
16(3) Mealey's Int'l Arb. Rep. C-2, C-15 to C-16,
121-122,124-127,134-136 (2001) [Yves Derains (pres.),
Piero Bernardini, Ahmed Sadek El Kosheri]
E Comments and Questions ................................... 993
§11.05 Restitution and Compensation for Treaty Violations
and Unlawful Conduct
A UN International Law Commission (ILC) Articles
on State Responsibility (2001), Articles 35 and 36 ....... 995
B Harvard Draft Convention on State Responsibility, 55
Am. J. Int'l L. 545,581 (1961) ........................... 996
C R. Doak Bishop, Theories of State Responsibility in
International Law: Expropriation and Fair and
Equitable Treatment, 58 Proceedings of the Annual
Institute on Oil and Gas Law, 203,286-287 (2007) ......... 997
D Factory at Chorzow (Germany v. Poland), Claim No.13
(PCA), Judgment on the Merits of 13 September 1928,
[1928] P.C.I.J. Series A - No.17,27-29,31,46-54
(1928) ................................................... 998
E BG Group Pic v. The Republic of Argentina (ad hoc
arbitration under the 1976 UNCITRAL Rules), Final
Award of 24 December 2007, 419,422,426-429,444
[Guillermo Aguilar Alvarez (pres.), Alejandro M.
Garro, Albert Jan van den Berg .......................... 1003
F Azurix Corp. v. The Argentine Republic (ICSID Case
No.ARB/01/12), Decision on the Application for
Annulment of 1 September 2009, 316-328 [Gavan
Griffith (pres.), Bola Ajbola, Michael Hwang] ........... 1005
G Occidental Petroleum Corporation and Occidental
Exploration and Production Company v. The Republic
of Ecuador (ICSID Case No.ARB/06/11), Award of
5 October 2012, 707-709,790-797,824-825 [L. Yves
Fortier (pres.), David A.R. Wilhams, Brigitte
Stern] .................................................. 1007
H Comments and Questions .................................. 1009
§11.06 Restitution and Compensation for Expropriation ......... 1010
A Introduction ............................................ 1010
B Restitutio in Integrum and Specific Performance ......... 1011
l J. Gillis Wetter and Stephen M. Schwebel, Some
Little-Known Cases on Concessions, [1964] Brit.
Y.B. Int'l L. 183,220-22 (1966) ...................... 1011
2 Texaco Overseas Petroleum Company
and California Asiatic Oil Company v. The
Government of the Libyan Arab Republic, Award of
19 January 1977,17 I.L.M. 3,31-37 (1978) [René-
Jean Dupuy, sole arbitrator] ......................... 1012
3 Occidental Petroleum Corporation and Occidental
Exploration and Production Company v. The
Republic of Ecuador (ICSID Case No.ARB/06/11),
Decision on Provisional Measures of 17 August
2007, 67-69,72-76,79,82,84-86 [L.Yves Fortier
(pres.), David A.R. Wilhams, Brigitte Stern] ......... 1015
4 Comments and Questions ............................... 1018
C What is the Standard of Compensation for an
Expropriation? .......................................... 1018
l US Model Bilateral Investment Treaty (2012),
Article 6 ............................................ 1018
2 Brice M. Clagett, Just Compensation in
International Law: The Issues Before the Iran-
United States Claims Tribunal, in The Valuation
of Nationalized Property in International Law,
Vol.IV, 31-33,96-97 (Richard B. Lillich (ed.),
University Press of Virginia 1987) ................... 1019
3 World Bank Guidelines on the Treatment of Foreign
Direct Investment, 31 I.L.M. 1363,1379,1382-84
(1992) ............................................... 1020
4 Government of Kuwait v. American Independent Oil
Co. (AMINOIL), Final Award of 24 March 1982,66
Int'l L. Rep. 518 (1982) [Paul Reuter (pres.),
Hamed Sultan, Gerald Fitzmaurice] .................... 1022
5 Phillips Petroleum Company Iran v. The blamic
Republic of Iran & The National Iranian Oil
Company (IUSCT Case No.39), Award of 29 June
1989 [Robert Briner (pres.), Seyed K. Khalilian,
George H.Aldrich] .................................... 1026
6 CME Czech Republic ВУ. v. The Czech Republic (ad
hoc arbitration under the 1976 UNCITRAL Rules),
Final Award of 14 March 2003, 496-498,500-502
[Wolfgang Kühn (pres.), Stephen M. Schwebel, Ian
Brownlie] ............................................ 1029
7 Comments and Questions ............................... 1030
D Restitution and Compensation for Unlawful
Expropriations .......................................... 1031
1 Amoco International Finance Corp. v. Government
of the Islamic Republic of Iran (IUSCT Case No. 56),
Partial Award No.310-56-3 of 14 July 1987 [Michel
Virally (pres.), Charles N. Brower, Parviz Ansari
Moin] ................................................ 1031
2 ADC Affiliate Limited and ADC & ADMC Management
Ltd. v. The Republic of Hungary (ICSID Case No.
ARB/03/16), Award of 2 October 2006, 480-486,
494-497,499 [Charles N. Brower (pres.), Albert
Jan van den Berg, Neil Kaplan QC] .................... 1035
3 Questions and Comments ............................... 1038
E Date of Valuation for Expropriation ..................... 1039
1 W. Michael Reisman and Robert D. Sloane, Indirect
Expropriation and Its Valuation in the BIT
Generation, 74 Brit. Y.B. Int'l L., 36-37,38-39,
41,46-47,50-51 (2003) ................................ 1039
2 Phillips Petroleum Company Iran v. The blamic
Republic of Iran if The National Iranian Oil
Company (IUSCT Case No.39), Award of 29 June
1989 [Robert Briner (pres.), Seyed K. Khalilian,
George H.Aldrich] .................................... 1041
3 Compañía del Desarrollo de Santa Elena S.A.
v. Costa Rica (ICSID Case No.ARB/96/1), Final
Award of 17 February 2000,391.L.M 1317,1329-1332
(2000), 73-74,76-78,80-81,83-84,90,93-95 [L. Yves
Fortier (pres.), Elihu Lauterpacht, Prosper Weil] .... 1043
4 Comments and Questions ............................... 1045
§11.07 ompensation for Denial of Justice ...................... 1046
A Chevron Corp (USA) and Texaco Petroleum Co (USA)
v. Republic of Ecuador (PCA Case No.34877), Partial
Award on the Merits of 30 March 2010, 374-379,
381-382,384,546 [Karl-Heinz Böckstiegel (pres.),
Charles N. Brower, Albert Jan van den Berg] ............. 1046
B Comments and Questions .................................. 1049
§11.08 Methodologies for Valuing Losses ....................... 1049
A Generally ............................................... 1049
1 Paul D. Friedland and Eleanor Wong, Measuring
Damages for the Deprivation of Income-Producing
Assets: ICSID Case Studies, 6 ICSID Rev. -
Foreign Inv. L.J. 400,405-407 (1991) ................. 1049
2 Brice M. Clagett, Just Compensation in
International Law: The Issues Before the Iran-
United States Claims Tribunal, in The Valuation
of Nationalized Property in International Law,
Vol. IV, 48-51 (Richard B. Lillich (ed.),
University Press of Virginia 1987) ................... 1051
B Valuation Methods ....................................... 1053
1 Discounted Cash Flow (DCF) Method .................... 1053
a Mark Kantor, Valuation for Arbitration:
Compensation Standards, Valuation Methods
and Expert Evidence, 131 -134, 139 (Kluwer Law
International 2008) ............................... 1053
b Phillips Petroleum Company Iran v. The Islamic
Republic of Iran & The National Iranian Oil
Company (IUSCT Case No.39), Award of 29 June
1989 [Robert Briner (pres.), Seyed
K. Khalilian, George H. Aldrich] .................. 1055
c CMS Gas Transmission Company v. Argentina
Republic (ICSID Case No.ARB/01/8), Award of
12 May 2005, 411-417 [Francisco Orrego
Vicuna (pres.), Marc Lalonde, Francisco Rezek] .... 1056
d Rumeli Telekom A.S. and Telsim Mobil
Telekomunikasyon Hizmetleri A.S. v. Republic of
Kazakhstan (ICSID Case No.ARB/05/16), Award
of 29 July 2008, 793,801,804,810-811,813-814
[Bernard Hanotiau (pres.), Steward Boyd, Marc
Lalonde] .......................................... 1057
e Comments and Questions ............................ 1059
2 Comparable Sales or Transactions ..................... 1060
a Ioannis Kardassopoulos and Ron Fuchs
v. Republic of Georgia (ICSID Case Nos.
ARB/05/18 and ARB/07/15), Award of 3 March
2010, 594-595,598-600,603 [L. Yves
Fortier (pres.), Francisco Orrego Vicuña,
Vaughan Lowe] ..................................... 1060
3 Comments and Questions ............................... 1061
C Using Alternative Valuation Methods ..................... 1062
1 Charles N. Brower and Jason D. Brueschke, The
Iran-United States Claims Tribunal, 588-589
(Kluwer Law International 1998) ...................... 1062
2 Compañía de Aguas del Aconquija S.A. and
Vivendi Universal (formerly Compagnie Générale
Des Eaux) v. Argentine Republic (ICSID Case No.
ARB/97/3), Award of 20 August 2007, 8.1.3-8.1.5,
8.3.3-8.3.5,8.3.12-8.3.13 [J. William Rowley
(pres.), Gabrielle Kaufmann-Kohler, Carlos
Bernal Verea ......................................... 1063
3 Comments and Questions ............................... 1064
§11.09 Compensation of Shareholders' Interests ................ 1065
A Sergey Ripinsky with Kevin Williams, Damages in
International Investment Law, 161 (BIICL 2008) .......... 1065
B Asian Agricultural Products Ltd. v. Republic of Sri
Lanka (ICSID Case No.ARB/87/3), Final Award of 27
June 1990, 87-88,95-101,103-104,106-108 [Ahmed
Sadek El-Kosheri (pres.), Berthold Goldman, R. Samuel
K.B. Asante] ............................................ 1065
C Comments and Questions .................................. 1068
§11.10 Moral or Punitive Damages .............................. 1069
A Desert Line Projects LLC v. The Republic of
Yemen (ICSID Case No.ARB/05/17), Award of
2 February 2008, 289,291 [Pierre Tercier
(pres.), Jan Paulsson, Ahmed S. El-Kosheri] ............. 1069
В Waguih Ehe George Siag and Clorinda Vecchi v. Egypt
(ICSID Case No.ARB/05/15),Awardof 1 June 2009,
544-545 [David A.R. Williams (pres.), Michael
Pryles, Francisco Orrego Vicuña] ........................ 1070
§11.11 Currency and Exchange Rate ............................. 1071
A US Model Bilateral Investment Treaty (2012), Article
6 ....................................................... 1071
B Arbitration of Lighthouses (France v. Greece),
Claims No.11 and 4 (PCA), Award of 24July 1956,
23 I.L.R. 81,299 (1956) [Jan Hendrik Willem Verzijl
(pres.), Achille Mestre, Georges Charbouris] ............ 1072
C Siemens A.G. v. The Argentine Republic (ICSID
Case No.ARB/02/8), Award of 6 February 2007,5 361
[Andres Rigo Sureda (pres.), Charles N. Brower,
Domingo Bello Janeiro] .................................. 1073
§11.12 Compound Interest ...................................... 1073
A James R. Crawford, State Responsibility: Third
Report by the Special Rapporteur in International
Responsibility, UN Doc. А/CN.4/507, 207-208,211 ...... 1073
B Frederick Alexander Mann, Compound Interest as
an Item of Damage in International Law, in Further
Studies in International Law, 377-378,383-385
(Frederick Alexander Mann (ed.), Clarendon Press
1990) ................................................... 1074
C Compañía del Desarrollo de Santa Elena S.A. v.
Costa Rica (ICSID Case No.ARB/96/1), Final Award
of 17 February 2000,391.L.M 1317, 1332-1334 (2000),
96-107 [L.Yves Fortier (pres.), Elihu Lauterpacht,
Prosper Weil] ........................................... 1075
D Compañía de Aguas delAconquija S.A. and Vivendi
Universal (formerly Compagnie Générale Des Eaux)
v. Argentine Republic (ICSID Case No.ARB/97/3),
Award of 20 August 2007, 9.2.1,9.2.3-9.2.6,
9.2.8 [J. William Rowley (pres.), Gabrielle
Kaufmann-Kohler, Carlos Bernal Verea] ................... 1077
E Comments and Questions .................................. 1078
§11.13 Costs .................................................. 1079
A Susan D. Franck, Rationalizing Costs in Investment
Treaty Arbitration, 88 Wash. U.L. Rev. 769 (2011) ....... 1079
B Libananco Holdings Co. Limited v. Republic of
Turkey (ICSID Case No.ARB/06/08), Award of
2 September 2011, 560,562-568 [Michael Hwang
(pres.), Henri C. Alvarez, Franklin Berman] ............. 1080
C Comments and Questions .................................. 1083
Chapter 12 Procedure and Proof: Developing the Case ........... 1085
§12.01 Introduction ........................................... 1085
§12.02 The Duty to Arbitrate in Good Faith and the
Equality of Arms ....................................... 1087
A Thomas W. Wälde, Procedural Challenges in
Investment Arbitration Under the Shadow of the Dual
Role of the State: Asymmetries and Tribunals' Duty
to Ensure, Pro-actively, the Equality of Arms, 26(1)
Arb. Int'l 3,11-12,38-42 (2010) ......................... 1087
B Methanex Corporation v. United States (ad hoc
arbitration under the 1976 UNCITRAL Rules), Final
Award of 3 August 2005, 4,6,8, 53-55,57-58
[V.V. Veeder (pres.), William F. Rowley,
W. Michael Reisman] ..................................... 1088
C Libananco Holdings Co. Limited v. Republic of
Turkey (ICSID Case No.ARB/06/8), Decision on
Preliminary Issues of 23 June 2008,72,74-80,82
[Michael Hwang (pres.), Henri C. Alvarez, Franklin
Berman] ................................................. 1090
D Comments and Questions .................................. 1094
§12.03 Arbitral Procedure ..................................... 1095
A ICSID Arbitration Rules (2006), Rules 29-36 ............. 1095
B UNCITRAL Arbitration Rules(2010), Articles 17,27 and
28 ...................................................... 1097
C IBA Rules on the Taking of Evidence in
International Arbitration (2010), Articles 4
and 8 ................................................... 1098
D The Preliminary Hearing - Howard M. Holtzmann,
Streamlining Arbitral Proceedings: Some Techniques
of the Iran-United States Claim Tribunal, ll(l)
Arb. Int'l 39,40-46 (1995) .............................. 1101
Ј Witness Statements and Testimony - Michael Bühler
and Carroll Dorgan, Witness Testimony Pursuant to
the 1999 IBA Rules of Evidence in International
Commercial Arbitration: Novel or Tested Standards?,
17 (1) J. Int'l Arb. 3,13-16,20-21,24-25,28-29
(2000) .................................................. 1104
F Fundamental Rules of Procedure and ICSID Annulment ...... 1108
1 R. Doak Bishop and Silvia M. Marchiii, Annulment
Under the ICSID Convention, 129,134-135 (Oxford
University Press 2012) ............................... 1108
2 Fraport AG Frankfurt Airport Services Worldwide
v. Republic of the Philippines (ICSID Case No.
ARB/03/25), Decision on the Application for
Annulment of 23 December 2010, 180,185-
187,197,200,202-203,218-228,230-231 [Peter Tomb
(pres.), Dominique Hascher, Campbell McLachlan ....... 1109
G Challenges to Arbitrators - Suez, Sociedad General
de Aguas de Barcelona, S.A. and Vivendi Universal,
S.A. v. Argentine Republic (formerly Aguas
Argentinas, S.A., Suez, Sociedad General de Aguas
de Barcelona, S.A.and Vivendi Universal, S.A.
v. Argentine Republic) (ICSID Case No.ARB/03/19)
and Suez, Sociedad General de Aguas de Barcelona S.A.,
and InterAguas Servicios Integrales del Agua S.A.
v. The Argentine Republic (formerly Aguas
Provinciales de Santa Fe S.A, Suez, Sociedad General
de Aguas de Barcelona, S.A., and Inter Aguas Servicios
Integrales del Agua, S.A.) (ICSID Case No.ARB/03/17)
and AWG Group Limited v. Argentine Republic (ad hoc
arbitration under the 1976 UNCITRAL Rules), Decision on
a Second Proposal for the Disqualification of
a Member of the Arbitral Tribunal of 12 May 2008,
9-12,21-22,24-33,35,39-40,45-48 [Jeswald W.
Salacuse (pres.), Pedro Nikken] ......................... 1113
H Control of Dilatory Tactics - L. Yves Fortier, The
Minimum Requirements of Due Process in Taking Measures
Against Dilatory Tactics: Arbitral Discretion in
International Commercial Arbitration: A Few Plain
Rules and a Few Strong Instincts', in Improving the
Efficiency of Arbitration Agreements and Awards:
40 Years of Application of the New York Convention,
ICCA Congress Series No.9,396,403,405-407 (Albert
Jan van den Berg (ed.), Kluwer Law International
1999) ................................................... 1120
I Comments and Questions .................................. 1121
§12.04 Confidentiality ........................................ 1123
A Metalclad Corp. v. United Mexican States (ICSID Case
No.ARB(AF)/97/l), Award of 30 August 2000, 13 [Elihu
Lauterpacht (pres.), Benjamin R. Civiletti, Jose Luis
Siqueiros ............................................... 1123
B Biwater Gauff (Tanzania) Ltd. v. United Republic of
Tanzania (ICSID Case No.ARB/05/22), Procedural Order
No.3 of 29 September 2006, 112,114-116,121,125,133-
136,145-147,163 [Bernard Hanotiau (pres.), Gary B.
Born, Toby Landau ....................................... 1124
C Comments and Questions .................................. 1127
§12.05 The Role of Amicus Curiae in Investment Disputes ....... 1127
A ICSID Arbitration Rules (2006), Rule 37(2) .............. 1127
B NAFTA Free Trade Commission, Statement on Non-Disputing
Party Participation (2003) .............................. 1128
C Methanex Corporation v. United States (ad hoc
arbitration under the 1976 UNCITRAL Rules), Decision
of the Tribunal on Petitions from Third Persons to
Intervene as Amici Curiae' of 15 January 2001,
24-31,35-37,40-42,47-51,53 [W. Veeder (pres.),
William F. Rowley, Warren Christopher ................... 1129
D Comments and Questions .................................. 1134
§12.06 Document Exchanges and Sanctions ....................... 1135
A IBA Rules on the Taking of Evidence in International
Commercial Arbitration (2010), Article 3 ................ 1135
B Use ofthe IBA Rules - CME Czech Republic B.V.
(The Netherlands) v. The Czech Republic (ad hoc
arbitration under the 1976 UNCITRAL Rules), Partial
Award of 13 September 2001, 46-47,52-53 Wolfgang
Kühn (pres.), Stephen M. Schwebel, Jaroslav Hándl] ...... 1137
C Requests for Production of Electronic Documents -
Richard Hill, The New Reality of Electronic Document
Production in International Arbitration: A Catalyst
for Convergence?, 25(l) Arb. Int'l 87,91-92 (2009) ...... 1138
D The Use of 28 U.S.C. § 1782 for Obtaining Evidence in
the United States ....................................... 1139
l Methanex Corporation v. United States (ad hoc
arbitration under the 1976 UNCITRAL Rules), Final
Award of 3 August 2005,99 1-3,5,26 [V.V. Veeder
(pres.), William F. Rowley, W. Michael Reisman] ...... 1139
2 In re Application of Chevron Corp. for an Order
Pursuant to 28 U.S.C. Section 1782 to Conduct
Discovery for Use in Foreign Proceedings, 633 F.3d
153,158-159,161-162,163 (3d Cir. 2011) ............... 1140
E Legal Privileges to Resist Document Production .......... 1143
1 Biwater Gauff (Tanzania) Ltd. v. United Republic of
Tanzania (ICSID Case No.ARB/05/22), Procedural
Order No.2 of 24 May 2006 [Bernard Hanotiau
(pres.), Gary B. Born, Toby Landau] .................. 1143
2 Glamis Gold, Ltd. v. United States (ad hoc
arbitration under the 1976 UNCITRAL Rules),
Decision on Parties' Requests for f. Production of
Documents Withheld on Grounds of Privilege of
17 November 2005,31-32,34-37 [Michael K. Young
(pres.), David D. Caron, Donald L. Morgan ............ 1145
3 William Ralph Clayton, William Richard Clayton,
Douglas Clayton, Daniel Clayton and Bilcon of
Delaware Inc. v. Government of Canada (PCA Case
No.2009-04), Procedural Order No.12 of 2 May
2012, 17-19,21,25-26,29, and Procedural Order
No.13 of 11 July 2012, 22,24-30,34-35 [Bruno
Simma (pres.), Donald McRae, Bryan Schwartz] ......... 1146
F Adverse Inferences ...................................... 1151
1 Durward V. Sandifer, Evidence Before
International Tribunals, 150,153 (2nd ed.,
University of Virginia Press 1975) ................... 1151
2 Charles N. Brower, Evidence Before International
Tribunals: The Needfor Some Standard Rules, 28 Int'l
Law. 47,57 (1994) .................................... 1151
3 Howard M. Holtzmann, Fact-Finding by the Iran-
United States Claims Tribunal, in Fact-Finding
Before International Tribunals eleventh Sokol
Colloquium], 101,127-128 (Richard B. Lillich (ed.),
Transnational Publishers 1992) ....................... 1152
4 Vera Van Houtte, Adverse Inferences in
International Arbitration, Chapter 5 in Written
Evidence and Discovery in International Arbitration,
201-205,214 (Teresa Giovannini and Alexis Mourre
(eds), International Chamber of Commerce 2009) ....... 1153
5 IBA Rules on the Taking of Evidence in International
Commercial Arbitration (2010), Article 9(5) and
9(6) ................................................. 1154
G Comments and Questions .................................. 1154
§12.07 Evidence ............................................... 1155
A IBA Rules on the Taking of Evidence in International
Commercial Arbitration (2010), Article 9 ................ 1155
B Charles N. Brower, Evidence Before International
Tribunals: The Needfor Some Standard Rules, 28
Int'l Law. 47,47-48,51-52,54-55 (1994) .................. 1156
C Burden of Proof ......................................... 1159
1 Durward V. Sandifer, Evidence Before
International Tribunals, 123-124,127,129-131
(2nd ed., University of Virginia Press 1975) ......... 1159
2 Charles N. Brower, Evidence Before International
Tribunals: The Needfor Some Standard Rules, 28
Int'l Law. 47,49 (1994) .............................. 1161
3 Karl-Heinz Böckstiegel, Presenting Evidence in
International Arbitration, 16(1) Foreign Int'l
L.J. 1,2-3 (2001) .................................... 1162
4 Marion Unglaube and Reinhard Unglaube v.
Republic of Costa Rica (ICSID Case Nos. ARB/08/1
and ARB/09/20), Award of 16 May 2012, 33-36
[judd Kessler (pres.), Franklin Berman,
Bernardo M. Cremades ................................. 1162
5 Marvin Roy Feldman Karpa v. United Mexican
States (also known as Marvin Feldman v. Mexico)
(ICSID Case No.ARB(AF)/99/1), Award of
16 December 2002, 177-178 [Konstantinos D.
Kerameus (pres.), Jorge Covarrubias Bravo,
David A. Gantz ....................................... 1163
6 Waguih Elie George Siag and Clorinda Vecchi
v. The Arab Republic of Egypt (ICSID Case No.
ARB/05/15), Award of 1 June 2009, 325-326
[David A.R. Williams (pres.), Michael Pryles,
Francisco Orrego Vicuna .............................. 1164
7 EDF (Services) Limited v. Romania (ICSID Case No.
ARB/OS/13), Award of 8 October 2009, 221 [Piero
Bernardini (pres.), Arthur W. Rovine, Yves Derains ... 1165
D Presumptions and Inferences ............................. 1166
l Durward V. Sandifer, dence Before International
Tribunals, 141-142,144-146 (2nd ed., University of
Virginia Press 1975) ................................. 1166
2 Charles N. Brower, Evidence Before International
Tribunals: The Need for Some Standard Rules, 28
IntT Law. 47,56 (1994) ............................... 1167
3 Howard M. Holtzmann, Fact-Finding by the Iran-
United States Claims Tribunal, in Fact-Finding
Before International Tribunals eleventh Sobl
Colloquium], 101,126-27 (Richard B. Lillich (ed.),
Transnational Publishers 1992) ....................... 1168
4 George C. Christie, What Constitutes a Taking of
Property Under International Law?, 38 Brit. Y.B.
Int'l L. 307,324-326 (1962) .......................... 1168
E Interested Witnesses - Michael Straus, The Practice
of the Iran-US. Claims Tribunal in Receiving Evidence
from Parties and from Experts, 3(3) J. Int'l Arb.
57,58-60,61-63 (1986) ................................... 1169
F Asian Agricultural Products Ltd. v. Republic of Sri
Lanka (ICSID Case No.ARB/87/3), Final Award of 27 June
1990, 9 56 [Ahmed S. El-Kosheri (pres.), Berthold
Goldman, Samuel K.B. Asante ............................. 1171
G Tradex Hellas S.A. v. Republic of Albania (ICSID
Case No.ARB/94/2), Award of 29 April 1999, 77-83
[Karl-Heinz Böckstiegel (pres.), Fred F. Fielding,
Andrea Giardian ......................................... 1172
H William A. Parker v. United Mexican States (General
Claims Commission - United States and Mexico), 31
March 1926,4 R.I.A.A. 35,9 5-7(1926) [General Claims
Commission .............................................. 1174
I Comments and Questions .................................. 1175
Chapter 13 Recognition and Enforcement of International
Arbitral Proceedings and Awards ............................... 1177
§13.01 Introduction ........................................... 1177
§13.02 Recognition and Enforcement Mechanisms ................. 1177
A The Special Regime of the ICSID Convention .............. 1177
1 Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States [ICSID
or Washington Convention] (1965), 575 U.N.T.S. 160,
Articles 53,54 and 55 ................................ 1177
2 Christoph H. Schreuer, LorettaMalintoppi, August
Reinisch and SiO Anthony Sinclair, The ICSID
Convention: A Commentary, Article 54,1117-1120,
1128-1130 (2nd ed., Cambridge University Press
2009) ................................................ 1178
3 Benvenuti et Bonfant S.R.L. v. People's Republic
of the Congo (ICSID, Case No.ARB/77/2), Judgment
of the Cour dAppel de Paris of 26 June 1981,1 ICSID
Rep. 368,369-372 (1993) .............................. 1181
4 Enron Corporation and Ponderosa Assets, L.P.
v. Argentine Republic (ICSID Case No.ARB/01/3),
Decision on the Argentine Republic s Request for
a Continued Stay of Enforcement of the Award of
7 October 2008 [Gavan Griffith (pres.), Patrick
L. Robinson, Per Tresselt] ........................... 1184
B Enforcement of Arbitral Awards (Other than ICSID) ....... 1187
1 The New York Convention .............................. 1187
a In General - Convention on the Recognition
and Enforcement of Foreign Arbitral Awards [New
York Convention] (1959), 330 U.N.T.S. 38,
Articles I through VII ............................ 1187
b Direct Effect of International Arbitral Awards
Made under Treaties - Dallal v. Bank Mellat,
Judgment of the Queens Bench Division of the
High Court of England and Wales of 26 July
1985,75 I.L.R. 151,165-168(1987) .................. 1189
c Grounds for Refusal of Recognition and
Enforcement - Southern Pacific Properties
(Middle East) Limited v. Arab Republic of
Egypt, Judgment of the District Court of
Amsterdam of 12 July 1984,86 I.L.R. 492,493-495
(1991) ............................................ 1192
2 Regional Conventions ................................. 1194
a Inter-American Convention on International
Commercial Arbitration [Panama Convention]
(1975), 1438 U.N.T.S. 248 ......................... 1194
b European Convention on International Commercial
Arbitration (1961), 484 U.N.T.S. 349 .............. 1197
§13.03 Challenge to Arbitral Awards ........................... 1201
A Challenge to Awards under the ICSID Convention .......... 1201
l Interpretation, Revision and Annulment of
an ICSID Award ....................................... 1201
a Convention on the Settlement of Investment
Disputes Between States and Nationals of Other
States [ICSID or Washington Convention] (1965),
575 U.N.T.S. 160, Articles 50,51 and 52 ........... 1201
b Compañía de Aguas del Aconquija S.A. and Vivendi
Universal (formerly Compagnie Générale Des Eaux)
v. Argentine Republic, Decision on Annulment of
3 July 2002,6 ICSID Rep. 340,358-360,362-371
(2004) [L. Yves Fortier (pres.), James R.
Crawford, José Carlos Fernández Rozas ............. 1203
c Comments and Questions ............................ 1209
d AES Summit Generation Limited and AES-Tisza
Erömü Kft. v. Hungary (ICSID Case No.
ARB/07/22), Decision on Annulment of 29 June
2012 [Bernard Hanotiau (pres.), Rolf Knieper,
Abdulqawi Ahmed Yusuf ............................. 1209
2 Supplementation and Rectification of an ICSID
Award ................................................ 1212
a Convention on the Settlement of Investment
Disputes Between States and Nationals of Other
States [ICSID or Washington Convention] (1965),
575 U.N.T.S. 160, Article 49 ...................... 1213
b Compañía de Aguas del Aconquija S.A. and Vivendi
Universal (formerly Compagnie Générale Des Eaux)
v. Argentine Republic (ICSID Case No.
ARB/97/3), Decision on Supplementation and
Rectification of 28 May 2003,8 ICSID Rep.
489,492-495 (2005) [L. Yves Fortier (pres.),
James R. Crawford, José Carlos Fernández
Rozas] ............................................ 1213
B Challenge of Awards of Non-ICSID Tribunals .............. 1214
1 UNCITRAL Model Law on International Commercial
Arbitration (1985, amended 2006), Article 34 ......... 1214
2 Explanatory Note by the UNCITRAL Secretariat on
the 1985 Model Law on International Commercial
Arbitration as amended in 2006, Section 7 ............ 1215
3 Czech Republic v. CME Czech Republic B.V., Judicial
Review by the Svea Court of Appeal of 15 May 2003,
9 ICSID Rep. 439,493-494,497-499,502-507 (2006) ...... 1216
4 Comments and Questions ............................... 1222
5 Arbitration Act 1999, S.F.S. 1999:116 (Sweden),
Sections 43 and 44 ................................... 1222
6 Arbitration Act 1996, c. 23 (UK), Sections 67
through 71 ........................................... 1223
7 Republic of Ecuador v. Occidental Exploration &
Production Company, Judgment of the Court of
Appeal (Civil Division) of England and Wales of
4 July 2007, [2007] E.W.C.A. Civ. 656 ................ 1227
C Interpretation and Supplementary Decisions of Awards
under the ICSID Additional Facility ...................... 1231
1 Rules Governing the Additional Facility for the
Administration of Proceedings by the Secretariat
of the International Centre for Settlement of
Investment Disputes [Additional Facility Rules]
(2006), Articles 55,56 and 57 ......................... 1231
2 United Mexican States v. Metalclad Corporation,
Judgment of the Supreme Court of British Columbia
of 2 May 2001,119 I.L.R. 646,659-661,664-666,668-681
(2002) ................................................ 1231
3 Raymond L. Loewen v. United States of America,
Judgment of the District Court of the District of
Columbia of 31 October 2005,10 ICSID Rep. 448,450-
452 (2006) ............................................ 1241
§13.04 Issues of State or Sovereign Immunity .................. 1244
A Basic Distinctions ...................................... 1244
1 'Sovereign' and 'Commercial' Activity ................ 1244
a United Nations Convention on Jurisdictional
Immunities of States and Their Property (2004),
UN Doc. A/RES/59/38, Articles 1,2,5 and 10 ........ 1244
b Jurisdictional Immunities of the State (Germany
v. Italy; Greece intervening), ICJ, Judgment of
3 February 2012, paragraphs 59-61 ................ 1245
2 Immunity from Jurisdiction and Immunity from
Enforcement .......................................... 1246
a Restatement (Third) Foreign Relations Law of the
United States, §451,396-398 (American Law
Institute 1987) ................................... 1246
b Restatement (Third) Foreign Relations Law of the
United States, §460,434-436 (American Law
Institute 1987) ................................... 1247
c United Nations Convention on Jurisdictional
Immunities of States and Their Property (2004),
UN Doc. A/RES/59/38, Articles 18,19,20 and 21 ..... 1249
d United Nations Convention on Jurisdictional
Immunities of States and Their Property (2004),
UN Doc. A/RES/59/38, Article 17 ................... 1251
B Differing National Approaches ......................... 1251
1 The US Approach .................................... 1251
a Foreign Sovereign Immunities Act 1976,28
U.S.C. Chapter 97 (US), Sections 1604 through
1611 ............................................ 1251
b Frontera Res. Azer. Corp. v. State Oil Co.
of the Azerbaijan Republic, Judgment of the
Court of Appeals for the Second Circuit of 28
September 2009,582 F.3d 393,395-402 (2d Cir.
2009) ........................................... 1257
c Restatement (Third) Foreign Relations Law of
the United States, § 456,415-419 (American Law
Institute 1987) ................................. 1261
2 The UK Approach .................................... 1264
a State Immunity Act 1978, c. 33 (UK), Sections 18
and 19 .......................................... 1264
b AIG Capital Partners v. Kazakhstan,
Judgment of the Queen's Bench Division of the
High Court of England and Wales of 20 October
2005, [2005] E.W.H.C. Comm. 2239,129 I.L.R.
589,605-607,610,612-616,623-626,628 (2007) ...... 1265
C Assets Subject to Attachment and Execution .............. 1272
1 Helms Amendment to the Foreign Assistance Act 1973,
22 U.S.C. §2151b(f)(1), Section 2370a ................ 1272
2 Foreign States Immunities Act 1985 as amended
(Australia), Sections 30 through 35 ................. 1274
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