Source: https://oxia.ouplaw.com/view/10.1093/law/9780198753506.001.0001/law-9780198753506-chapter-1
Timestamp: 2019-10-24 02:28:39
Document Index: 49986244

Matched Legal Cases: ['art 42', 'art 35', 'art 27', 'art 48', 'art 52', 'art 9', 'art 9', 'art 42']

Investment Claims: Part I Introduction, 1 Situating Evidence in the Process of Investor
Evidence in International Investment Arbitration by Sourgens, Frédéric Gilles; Duggal, Kabir; Laird, Ian A
Evidence — Annulment
(p. 3) 1 Situating Evidence in the Process of Investor-State Arbitration
I. Why Evidence? 1.01
II. Inductive Methodology 1.10
III. The Basic Premise 1.15
IV. The Core Participants 1.16
A. Application to arbitral tribunals 1.17
B. Application to tribunal-appointed experts 1.21
C. Application to parties 1.22
D. Application to counsel 1.25
E. Application to witnesses and party-appointed experts 1.28
V. The Common Substantive Problem 1.30
A. Process of decision 1.33
B. Assembly of the record 1.34
VI. Definition of Non Liquet 1.39
A. Non liquet in general international law 1.41
B. Non liquet in the practice of investor-state arbitration 1.44
C. Consequence of prohibition of non liquet for the law of evidence 1.48
VII. Internal Value of Investor-State Arbitration and Evidence 1.49
I. Why Evidence?
1.01 Participants in investor-state arbitration typically submit that there is only one rule of evidence: the free appreciation of evidence by the arbitrator.1 Should the statement prove accurate, ours would be the shortest law book ever written. Given the ubiquity of the sentiment that there are no rules of evidence in investor state arbitration, the first question for this book must be—where did perceived wisdom go wrong?2
(p. 4) 1.02 Scepticism about a ‘law of evidence’ in investor-state arbitration must be placed in context. It is a contribution to an ongoing dialogue between the civil and common law members of the investor-state arbitration community.3 The insistence that there are no rules of evidence is intended to address the use of exclusionary rules of evidence in common law countries.4 United States (US) law in particular is replete with exclusionary rules of evidence.5 There, reliance upon such exclusionary rules could well be explained by the use of lay juries to find facts in many criminal and civil proceedings.6 Exclusionary rules of evidence protect the rational decision-making process in such a context: exclusionary rules eliminate evidence that is not sufficiently probative, exceedingly prejudicial, or privileged.7 As there is no lay jury to find facts in international proceedings, the common law institution of exclusionary rules of evidence appears functionally out of place in international arbitration.
1.03 Further, scepticism regarding rules of evidence can also draw a distinction between arbitration and judicial proceedings. One of the advantages of arbitration over litigation is the greater flexibility afforded by arbitration.8 The use of rules of evidence would tend to constrain the very flexibility arbitration promises to provide. Rules of evidence therefore seem doubly out of place—not only does arbitration fail to rely upon lay jurors necessitating exclusionary rules of evidence, it is a process defined by the absence of formalistic rules of decision-making.9 Consequently, an imposition of rules of evidence appears entirely inapposite to its enterprise.
1.04 These distinctions are convincing as far as they go. They provide an account of investor-state arbitration that draws out many of its functional features of decision-making. They also tend (p. 5) to provide a narrative constitutive of the identity of a great many of its participants—civilized lawyers from a world of civil litigation far away from that most dreaded form of dispute resolution—the American trial.10
1.05 The grounds of nullity of investor-state awards show that the scepticism is not entirely well-founded.11 The International Centre for Settlement of Investment Disputes (ICSID) annulment mechanism, for instance, deems awards null to the extent they have failed to grant the parties their right to be heard or treated them with anything but true equality.12 It even polices the use of burdens of proof and evidentiary presumptions used by arbitral tribunals.13 The right to be heard, the equality of the parties, the use of burdens and establishment of presumptions—all of these grounds for annulment make relevant principles a tribunal must follow with regard to its approach to factual evidence.14 And all of these query more than the honesty with which the tribunal engaged the evidence—the only question one might reasonably ask if the free appreciation of evidence served as the exclusive rule of evidence in the investor-state arbitration context.15
1.06 If the egregious mistreatment of evidence by a tribunal results in annulment of its ultimate award, this suggests that principles of how evidence should be treated must indeed exist. This conclusion is ultimately unsurprising. As early as Bin Cheng’s now classic treatise on General Principles of Law as Applied by International Courts and Tribunals, it was well known that ‘[w]hile international tribunals are thus “entirely free to estimate the value of statements made by the Parties”, their activity in this regard is nevertheless governed by a number of general principles of law recognized by States in foro domestico’.16
1.07 Dr Cheng began the effort to restate the international law of dispute resolution through the derivation of general principles of law.17 As Klaus-Peter Berger’s seminal work on the codification of the new lex mercatoria establishes, this remains one of the most significant early means to establish any transnational body of rules.18 As Klaus-Peter Berger further (p. 6) establishes, the restatement of any body of principles will further be driven by the practice of the main participants in the enterprise studied.19
1.08 Evidence in International Investment Arbitration looks to follow a similar approach. It studies the practice of participants in the investor-state arbitration system reflected in arbitral decisions. On this basis, it inductively seeks to clarify what principles of evidence are actually applied to the resolution of investment disputes. It then restates these principles in as faithfully and precisely as possible. The resulting principles of this endeavour have been reproduced in the Appendix.
1.09 It is just as important to understand what Evidence in International Investment Arbitration is not. It is not a normative project to correct or displace the existing practice of investment dispute settlement. The applicable law remains—applicable.20 The discretion of the tribunal remains discretely yet firmly in command of arbitral proceedings.21 Evidence in International Investment Arbitration does not seek to force a particular logic upon a practice, nor does it hope to impose dogma upon its jurisprudence. It merely seeks to achieve an archaeological task—to uncover with care the operational code of pursuant to which investment lawyers already go about their daily lives.
II. Inductive Methodology
1.10 Prevalent pronouncement that there are no rules of evidence in international arbitration—commercial, investor-state or otherwise, suggest that a deductive doctrinal engagement of investor-state arbitration will not yield convincing results. Rather, a study of investment arbitration practice will need to delve deeper. It will need to unpack what the participants in investor-state arbitration do and extrapolate inductively if their conduct has any logic or reason even if they do not necessarily perceive this logic consciously. This situation of the law of evidence in investor-state arbitration is hardly unique. Comparative legal scholarship has long observed that law operates much like language in this respect:
Man continually follows rules of which is not aware or which he would not be able to formulate well. Few would be able to formulate the linguistic rule we follow when we say ‘three dark suits’ and not ‘three suits dark’ whereas in special circumstances we might speak of ‘the meadows green’. … Linguistics are now defining this phenomenon. We are subject to specific rules without perceiving them. Our visible, superficial language is the result of identifiable transformations of latent linguistic patterns that are more permanent than the visible ones.22
1.11 In order to draw out those patterns, one must proceed inductively as opposed to deductively. A deductive method would seek to establish a system by extending a basic core axiom consistently to all possible areas of application through logical reason and analogy.23 The current state of jurisprudence would render any project seeking to impose deductive doctrinal order futile—there is no agreement within the practice as to what the axiom ought to be. Doctrine suggests (p. 7) the absence of any ‘axiom of evidence law’.24 Short of imposing an axiom by normative fiat, a deductive project is doomed to fail.
1.12 This does not however doom an inductive method. Such an inductive approach can be ‘develop[ed] when international legal actors resolve specific problems by coordinating their approach with prior solutions to facially similar problems’.25 The repeated overlap between problem and solution permits the inference that a common principle operates to bring about the consistent result.
1.13 The inductive approach further does not seek to harmonize the principles used within a practice with each other. It resists the pull towards axiomatic purity and the establishment of a deductive order. Rather, it leaves the conduct of the parties where it stands, inconsistencies and all.
1.14 The core to any such inductive method must be to ask—what problems do we face?26 And what are we trying to achieve with specific pronouncements about our proffered solutions?27 When we understand what goals we are trying to further, we can then look at our practice and distil reasonable rules by comparing decisional outputs and record inputs.28 In short, we can then derive principles of what we are doing when we resolve evidentiary issues in investor-state arbitration.
III. The Basic Premise
1.15 The book proceeds from the basis of a premise; investor-state arbitrations face a common core of problems that tribunals hearing these claims must resolve. As discussed in the remainder of this chapter, this basic premise starts from a foundational coincidence of the who, what, how, and why of the decision-making process in investor-state arbitrations. The coincidence thus explains why principles could form in the first place, given the role of the process participants, the subject matter of the process, the operations of the process, as well as its constitutive values.
IV. The Core Participants
1.16 The core participants in the process of decision-making are the arbitral tribunal, other decision-makers in the investor-state arbitration process not subject to municipal evidentiary legal regimes, tribunal appointed experts, the parties, and their counsel. To a lesser extent, these core participants are aided by a supporting case of witnesses, party appointed experts, institutions, and tribunal secretaries. The principles of evidence developed in the remainder of this book reflect the self-regulatory processes, which constrain the behaviour of each of these (p. 8) participants and assigns consequences for the non-compliance by one of the participants with the duties imposed upon them by these principles of evidence.
A. Application to arbitral tribunals
1.17 Principles of evidence, should they exist at all, must apply in the first instance to arbitral tribunals. Tribunals are the principal finders of fact in investor-state arbitration.29 The ICSID Convention tasks arbitral tribunals with rendering an award.30 The ICSID Arbitration Rules empower the tribunal to make factual determinations as part of its mission in resolving the dispute.31 Other arbitral rules follow the same commonplace assignment of powers.32 As a principal matter, therefore, the following principles are intended for arbitral tribunals.
1.18 As will be developed throughout the book, the principles of evidence are not an external constraint on arbitral tribunals. Rather, they reflect the self-limitation or constraint, which arbitral tribunals impose upon their own decision-making. The endeavour of this book is to harden how arbitral tribunals conduct themselves into faithfully drawn, precise principles to guide the future engagement by tribunals, parties, and counsel with fact-finding processes in investor-state arbitration.
1.19 It should be noted that in the context of ICSID arbitration in particular, the scope of these principles must be slightly broader than application to the arbitral tribunal hearing the dispute. Rather, these principles of evidence must include any instance in which parties to an investor-state arbitration may call upon a body to make a finding of fact or determination of law that determines, vindicates, or impairs legal rights.33 ICSID arbitration is not subject to local court supervision.34 This means that there is a significant number of tasks which fall to other decision-makers other than arbitral tribunals who are unconstrained by any municipal law or principles of evidence. Most centrally, annulment committees take the place of court set aside review of the arbitral process.35 Annulment committees are called upon to make determinations of fact—facts about the arbitral process leading to the award as opposed to the contentious issues in the dispute leading to the award. Further, in the context of challenge decisions, truncated tribunals or an appointing authority may be asked to determine whether an arbitrator should be removed from the tribunal.36 Again, this determination will require the making of factual findings.
Source Id: law-9780198753506-chapter-1-div5-19ReferencesAES Corporation v Argentina, Decision on jurisdiction, ICSID Case No ARB/02/17, IIC 4 (2005), (2007) 12 ICSID Rep 308, 26th April 2005, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICLao Holdings NV v Lao People's Democratic Republic, Decision on jurisdiction, ICSID Case No ARB(AF)/12/6, IIC 633 (2014), despatched 21st February 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IIC
(p. 9) 1.20 As the evidentiary principles set out in the remainder of this book seek to protect the basic equality of the parties in investor-state arbitrations and the integrity of the process of investor-state dispute settlement, these core functions performed by decision-makers other than national courts or arbitral tribunals cannot stand unmoored from the basic evidentiary principles developed in this book. Rather, the functional logic must be that these principles—mutatis mutandis—apply in these other contexts as well.
B. Application to tribunal-appointed experts
1.21 Investor-state tribunals are empowered to appoint experts independently.37 The power of appointment of experts exists in order to facilitate the tribunal’s task to make relevant findings of fact or determinations of law.38 Given the weight that the pronouncements of experts are likely to have on the tribunal, the expert him or herself should follow a process consistent with the rules of evidence whenever a finding or determination by the tribunal would have been subject to them. The appointment of a tribunal expert or agent represents a limited delegation of authority by the tribunal to a non-party to act in the proceedings.39 When acting in the proceedings, the non-party therefore should be subject to the same rules that would have been applicable to his or her principal.40
1.22 The principles of evidence also must extend to the parties. International arbitral tribunals lack police and contempt powers available to municipal courts.41 Their resolution of disputes therefore critically depends upon the participation of all parties and their counsel and agents.42 The rules of evidence therefore must apply with equal force not just to arbitral decision-makers, but to all participants in the arbitral decision-making process.43
1.23 Again, it is important to note that the practice of investment arbitration reveals that parties, as well as their counsel and agents act with a significant amount of self-restraint. Parties do not habitually disobey tribunal orders or seek to undermine the spirit of arbitral rulings. Even when there is little threat of detection, parties, counsel, and their agents act with reasonable consistency towards the resolution of the dispute. That of course is not to say that each party does not seek to win and will do whatever is necessary and proper to secure (p. 10) victory. It is to say that ‘victory’ in the arbitration remains a, if not the, core mission of the parties, a mission that already exhibits the self-restraint to abide by the values of arbitration process that a win would vindicate.
1.24 It is uncontroversial that dispute resolution of any kind can only be successful if the parties consider that they have a duty to cooperate in the resolution of arbitral disputes.44 The principles spell out that this duty extends naturally to the arbitral tribunal or other decision-maker.45 The principles further make clear that the duty also extends to the opposing party.46 Notably, the obligations to the arbitral tribunal are more stringent than the obligations to the other participants. The parties have an obligation of candour with regard to the arbitral tribunal.47 They do not have a similar duty with regard to the opposing party. Rather, the rules require only good faith cooperation in that setting. The reason for the distinction is to permit the parties to engage in reasonable settlement discussions that permit the ordinary amount of puffing typical of such engagements. Such settlement discussions are therefore not subject to full candour. They nevertheless require good faith cooperation ensuring that parties not knowingly make false submissions to the other side.
D. Application to counsel
1.25 Recent discussion in international arbitration circles notes the dishonest conduct by counsel in the prosecution of arbitral proceedings.48 Such conduct is subject to bar discipline by the home jurisdiction in which counsel is licensed. It may at some point in time become subject to an international regulatory body.
1.26 Until such time, however, it is remarkable that counsel themselves perceive dishonest conduct by lawyers in international proceedings as a problem. The notion that dishonesty is a problem rather than an opportunity gone begging suggests a basic drive towards self-restraint in the international arbitration bar. This drive to self-restraint is certainly supported by the arbitral bench and academic discourse. Yet it appears that for the most part, the international bar understands that it must govern its own behaviour according to basic principles of how factual disputes should be resolved in an international arbitration.
1.27 The principles developed in this book confirm that counsel have a significant role to play in securing the orderly development of case of their respective clients. The failure by counsel to act in a manner consistent with their respective obligations is subject to the same consequences in the arbitral proceedings themselves as the failure by a party.
(p. 11) E. Application to witnesses and party-appointed experts
1.28 Witnesses and party-appointed experts are an almost indispensable component of investor-state arbitration. They provide much of the basis for the ultimate decision of arbitral tribunals. They are the leading men and women of the arbitral hearing and the near exclusive focus of its proceedings. Evidentiary principles are therefore of consequence to them, as well.
1.29 Thus, the point of the hearing in many ways is to bring to bear external constraint upon the witness through cross-examination, impeachment, and correction or amendment of testimony. The evidentiary principles therefore will reflect this functional shift; witnesses and party-appointed experts suffer the consequences of evidentiary principles. Unlike the other main actors of the proceedings, witnesses and party-appointed experts do not participate in the making of the evidentiary principles any more than a now infamous Mr Miranda participated in the making of the right against self-incrimination in US criminal law proceedings.49
Source Id: law-9780198753506-chapter-1-div5-29ReferencesMiranda v Arizona, Docket No 759, 384 US 436 (1966), 86 S Ct 1602 (1966), 16 L Ed 2d 694 (1966), 13th June 1966, United States; Supreme Court [US]
V. The Common Substantive Problem
1.30 From a bird’s eye perspective, it is reasonably uncontroversial that investor-state arbitrations pose a common substantive problem. At core, almost all investor-state arbitrations query state responsibility for the asserted impairment or destruction of foreign-held property or contract rights.50 Further, through the limited counterclaim mechanisms available in investor-state arbitration, there is a possibility that these disputes further could review corporate responsibility vis-à-vis the host state.51
1.31 In the first instance, this common substantive problem sets up sensitive questions of proof that exceed questions of a material breach of commercial contracts in their broader import to the general population of the host state.52 Investor-state arbitrations place in issue questions that can have a significant effect on the host state’s political economy.53 And (p. 12) precisely when investor-state arbitration is needed the most, it is also at its most substantively sensitive: they frequently address allegations of serious, continuous, and discriminatory misconduct by a host state that politically targets an investment and its officers and backers.54
1.32 Relatedly, it is precisely in such situations that it is difficult for a tribunal in investor-state arbitrations (as opposed to commercial arbitration) to treat parties with equality: the investor and the state are legally and substantively unequal when the investor alleges that the state committed an internationally wrongful act.55 This allegation precisely puts in issue that one party is a state and has at its disposal the legal tools of statehood, including police powers.56 It is the asserted failure to use these tools in a lawful manner that gives rise to the dispute in the first place.57 The other party is a private entity that lacks these legal tools. When the state is asserted to abuse its police powers, the private entity not only lacks these legal tools—it is affirmatively victimized by these tools.58 The inequality then is not just a question of legal form but a matter of reality. At the same time, in many investor-state arbitrations, the private entity may have at its disposal far greater substantive means to prosecute its case and a far greater familiarity with the arbitral means of dispute resolution than the host state.59 On a functional level, this overlap in the underlying disputes is likely to yield an overlap in evidentiary problems to be resolved by arbitral tribunals. If arbitral tribunal should have a hope to resolve these disputes in a manner engendering trust in their decision-making, they should resolve these dispute with some form of consistency (parties would lose trust in arbitration if testimony in a red tie by a witness in one arbitration and in a blue tie in a related case was the difference between billion dollar state liability and a jurisdictional dismissal). It is thus reasonable to proceed on the assumption that a common set of decision-making processes could well be derived from jurisprudence.
Source Id: law-9780198753506-chapter-1-div5-32ReferencesAzurix Corporation v Argentina, Decision on application for annulment, ICSID Case No ARB/01/12, IIC 388 (2009), despatched 1st September 2009 IC IICBurlington Resources Oriente Limited v Ecuador and Empresa Estatal Petróleos del Ecuador (PetroEcuador), Procedural order no 1 (request for provisional measures), ICSID Case No ARB/08/5, IIC 379 (2009), 29th June 2009, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICCity Oriente Limited v Ecuador and Estatal de Petróleos del Ecuador, Decision on provisional measures, ICSID Case No ARB/06/21, IIC 309 (2007), 19th November 2007, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICFraport AG Frankfurt Airport Services Worldwide v Philippines, Decision on application for annulment, ICSID Case No ARB/03/25, IIC 478 (2010), 17th December 2010, despatched 23rd December 2010, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICLibananco Holdings Company Limited v Turkey, Decision on preliminary issues, ICSID Case No ARB/06/8, IIC 327 (2008), 23rd June 2008, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMalicorp Limited v Egypt, Decision on the application for annulment of Malicorp Limited, ICSID Case No ARB/08/18, IIC 596 (2013), despatched 3rd July 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMaritime International Nominees Establishment v Guinea, Decision on partial annulment of the award, ICSID Case No ARB/84/4, (1990) 5 ICSID Rev-FILJ 95, (1997) 4 ICSID Rep 79, (1990) 5(2) Intl Arb Rep Sec E, (1991) XVI YB Com Arb 40, (1991) 118 Clunet 166, 14th December 1989, despatched 22nd December 1989, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID]Pey Casado and President Allende Foundation v Chile, Decision on the Republic of Chile's request for supplementation of the annulment decision, ICSID Case No ARB/98/2, IIC 607 (2013), despatched 11th September 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICYukos Universal Limited v Russian Federation, Final award, PCA Case No 2005-04/AA227, IIC 652 (2014), ICGJ 481 (PCA 2014), 18th July 2014, Permanent Court of Arbitration [PCA] IC IIC ICGJ
(p. 13) A. Process of decision
1.33 The basic premise recurring through the remainder of the book is that this common set of decision-making processes hinges on a core feature of arbitration: the arbitral tribunal makes its findings of fact and determinations of law upon the basis of a record assembled in cooperation with, and made available to, the parties for the submission of argument in accordance with the rules of natural justice. The process of decision-making in investor-state arbitration is defined by the record.60 The record defines the scope of factual information upon which the award is based. A tribunal that makes a finding of fact premised upon non-record sources has abandoned the arbitral process of decision-making.61 As such, it has deprived the parties of the decision-making process for which they bargained. It further deprived the parties of the natural justice inherent in all arbitration. A failure by the tribunal to premise its factual decisions in the record is a basis for annulment.62 The record further defines the scope of the legal dispute submitted for resolution by the tribunal.63 A failure by the tribunal to stay within the terms of reference created by the record’s legal submissions is similarly a basis for annulment.64
Source Id: law-9780198753506-chapter-1-div5-33ReferencesAzurix Corporation v Argentina, Decision on application for annulment, ICSID Case No ARB/01/12, IIC 388 (2009), despatched 1st September 2009 IC IICCDC Group plc v Seychelles, Decision on application for annulment, ICSID Case No ARB/02/14, IIC 48 (2005), (2007) 11 ICSID Rep 237, 29th June 2005, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICCaratube International Oil Company LLP v Kazakhstan, Decision on the annulment application of Caratube International Oil Company LLP, ICSID Case No ARB/08/12, IIC 636 (2014), despatched 21st February 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICDuke Energy International Peru Investments No 1 Limited v Peru, Annulment proceeding; Decision of the Ad Hoc Committee, ICSID Case No ARB/03/28, IIC 483 (2011), 28th February 2011, despatched 1st March 2011, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICFraport AG Frankfurt Airport Services Worldwide v Philippines, Decision on application for annulment, ICSID Case No ARB/03/25, IIC 478 (2010), 17th December 2010, despatched 23rd December 2010, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICHelnan International Hotels AS v Egypt, Decision on application for annulment, ICSID Case No ARB/05/19, IIC 440 (2010), 29th May 2010, despatched 14th June 2010, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICImpregilo SpA v Argentina, Decision of the Ad Hoc Committee on the application for annulment, ICSID Case No ARB/07/17, IIC 627 (2014), despatched 24th January 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICIndústria Nacional de Alimentos SA and Indalsa Perú v Peru, Decision on annulment; dissenting opinion of Sir Franklin Berman, ICSID Case No ARB/03/4, IIC 300 (2007), (2007) 12 ICSID Rep 218, despatched 5th September 2007, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMTD Equity Sdn Bhd and MTD Chile SA v Chile, Decision on annulment, ICSID Case No ARB/01/7, IIC 177 (2007), (2008) 13 ICSID Rep 500, 16th February 2007, despatched 21st March 2007, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMalicorp Limited v Egypt, Decision on the application for annulment of Malicorp Limited, ICSID Case No ARB/08/18, IIC 596 (2013), despatched 3rd July 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMaritime International Nominees Establishment v Guinea, Decision on partial annulment of the award, ICSID Case No ARB/84/4, (1990) 5 ICSID Rev-FILJ 95, (1997) 4 ICSID Rep 79, (1990) 5(2) Intl Arb Rep Sec E, (1991) XVI YB Com Arb 40, (1991) 118 Clunet 166, 14th December 1989, despatched 22nd December 1989, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID]Pey Casado and President Allende Foundation v Chile, Decision on the Republic of Chile's request for supplementation of the annulment decision, ICSID Case No ARB/98/2, IIC 607 (2013), despatched 11th September 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICWena Hotels Limited v Egypt, Decision on annulment application, ICSID Case No ARB/98/4, IIC 274 (2002), (2004) 6 ICSID Rep 129, (2002) 41 ILM 933, (2003) 130 Clunet 167, 28th January 2002, despatched 5th February 2002, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IIC
(p. 14) B. Assembly of the record
1.34 The record is assembled through collaboration and cooperation between the parties and the tribunal.65 Neither the parties nor the tribunal have a monopoly on the assembly of the record.66 Rather, party submissions and tribunal decisions have an important role to play.
1.35 The parties have a role in the first instance in defining the factual and legal scope of the dispute in their submissions.67 This factual and legal scope sets the terms of reference of the dispute.68 The tribunal is authorized to function exclusively within these terms of reference.69
Source Id: law-9780198753506-chapter-1-div5-35ReferencesAzurix Corporation v Argentina, Decision on application for annulment, ICSID Case No ARB/01/12, IIC 388 (2009), despatched 1st September 2009 IC IICCDC Group plc v Seychelles, Decision on application for annulment, ICSID Case No ARB/02/14, IIC 48 (2005), (2007) 11 ICSID Rep 237, 29th June 2005, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICCaratube International Oil Company LLP v Kazakhstan, Decision on the annulment application of Caratube International Oil Company LLP, ICSID Case No ARB/08/12, IIC 636 (2014), despatched 21st February 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICDuke Energy International Peru Investments No 1 Limited v Peru, Annulment proceeding; Decision of the Ad Hoc Committee, ICSID Case No ARB/03/28, IIC 483 (2011), 28th February 2011, despatched 1st March 2011, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICFraport AG Frankfurt Airport Services Worldwide v Philippines, Decision on application for annulment, ICSID Case No ARB/03/25, IIC 478 (2010), 17th December 2010, despatched 23rd December 2010, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICImpregilo SpA v Argentina, Decision of the Ad Hoc Committee on the application for annulment, ICSID Case No ARB/07/17, IIC 627 (2014), despatched 24th January 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICIndústria Nacional de Alimentos SA and Indalsa Perú v Peru, Decision on annulment; dissenting opinion of Sir Franklin Berman, ICSID Case No ARB/03/4, IIC 300 (2007), (2007) 12 ICSID Rep 218, despatched 5th September 2007, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMTD Equity Sdn Bhd and MTD Chile SA v Chile, Decision on annulment, ICSID Case No ARB/01/7, IIC 177 (2007), (2008) 13 ICSID Rep 500, 16th February 2007, despatched 21st March 2007, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMalicorp Limited v Egypt, Decision on the application for annulment of Malicorp Limited, ICSID Case No ARB/08/18, IIC 596 (2013), despatched 3rd July 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMaritime International Nominees Establishment v Guinea, Decision on partial annulment of the award, ICSID Case No ARB/84/4, (1990) 5 ICSID Rev-FILJ 95, (1997) 4 ICSID Rep 79, (1990) 5(2) Intl Arb Rep Sec E, (1991) XVI YB Com Arb 40, (1991) 118 Clunet 166, 14th December 1989, despatched 22nd December 1989, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID]Pey Casado and President Allende Foundation v Chile, Decision on the Republic of Chile's request for supplementation of the annulment decision, ICSID Case No ARB/98/2, IIC 607 (2013), despatched 11th September 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICWena Hotels Limited v Egypt, Decision on annulment application, ICSID Case No ARB/98/4, IIC 274 (2002), (2004) 6 ICSID Rep 129, (2002) 41 ILM 933, (2003) 130 Clunet 167, 28th January 2002, despatched 5th February 2002, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IIC
1.36 The parties have a role in the second instance to develop sufficient factual material and legal submissions that permit the tribunal to resolve the dispute the parties referred to the tribunal.70 The parties must gather and submit evidence to the tribunal.71 The parties must further assist each other through evidence disclosures to put on a full evidentiary case where only one party has access to relevant and material information.72 The parties must comment on the evidence and contained in the record to assist the tribunal in making appropriate factual findings. The parties finally must enable the tribunal to understand the applicable law in sufficient detail meaningfully and faithfully to resolve the case.
Source Id: law-9780198753506-chapter-1-div5-36ReferencesOffshore Company and National Iranian Oil Company, Re, Case No 133, 26th June 1986, United Nations [UN]; United Nations General Assembly [UNGA]; United Nations Commission on International Trade Law [UNCITRAL]
1.37 The tribunal’s role in the first instance is faithfully to resolve the dispute submitted to it. This requires the tribunal to clarify the terms of reference as far as possible to determine the subject matter and scope of the dispute actually referred to arbitration.73 In this role, the tribunal is tasked with defining and drawing the bounds of its own competence.74
Source Id: law-9780198753506-chapter-1-div5-37ReferencesCaratube International Oil Company LLP v Kazakhstan, Decision on the annulment application of Caratube International Oil Company LLP, ICSID Case No ARB/08/12, IIC 636 (2014), despatched 21st February 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMaritime International Nominees Establishment v Guinea, Decision on partial annulment of the award, ICSID Case No ARB/84/4, (1990) 5 ICSID Rev-FILJ 95, (1997) 4 ICSID Rep 79, (1990) 5(2) Intl Arb Rep Sec E, (1991) XVI YB Com Arb 40, (1991) 118 Clunet 166, 14th December 1989, despatched 22nd December 1989, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID]
(p. 15) 1.38 The tribunal’s role in the second instance is that of a gatekeeper of the record.75 As discussed further in Chapter 11, the tribunal must determine which submissions are admitted to the record and which submissions are excluded from the record.76 The tribunal must resolve disputes concerning evidentiary disclosures.77 The tribunal is further empowered to order the parties to complete the record or otherwise empowered to augment the record such that the tribunal is able faithfully to fulfil the parties’ mandate spelled out in the terms of reference.78
VI. Definition of Non Liquet
1.39 The value of investor-state arbitration is significantly undermined if a tribunal can return a decision non liquet. Non liquet refers to a determination by a court or tribunal that the court or tribunal must refrain from giving judgment on the ground that the law is silent or obscure.79 Inversely, non liquet could also lie if the tribunal were to find that the facts are obscure (ie the existing law cannot neatly be applied to the facts as adduced by the parties and found by the tribunal.)80 A tribunal thus leaves the dispute unresolved between the parties and absolves itself of the duty to make any determination because, according to its determination, ‘no law applies’.81
1.40 The practical implication of a finding that ‘no law applies’ is apparent: no legal relief is available to the party seeking the aid or protection of an international tribunal.82 The distinction between an adjudication that the law does not recognize the respective right invoked—or that the claimant is not entitled to its protections—and a non liquet is that ruling non liquet a tribunal would not have adjudicated that the claiming party lacked the right it sought to invoke.83 It would have ruled that the law is too obscure to determine whether the right exists.84 When there is no avenue other than a formal international dispute resolution available for the vindication of the right in question, this formal logic draws a distinction without a difference. The claimant is denied redress and, owing to the non liquet ruling returned by the relevant court or tribunal, is left without any means ever to obtain it.
(p. 16) A. Non liquet in general international law
1.41 International courts and scholars alike have an ‘allergy … to non liquet’.85 Non liquet implies—contrary to a strongly held majority view of international law scholars today—that law has gaps that cannot be filled through a process of adjudication.86
1.42 Despite this allergy and strong scholarly consensus, the International Court of Justice in the somewhat distinguishable context of an advisory opinion on the legality of use of nuclear weapons returned a non liquet decision.87 The opinion in paragraph 2 of its dispositif states that: ‘in view of the current state of international law, and of the elements of fact at its disposal, the Court cannot conclude definitively whether the threat or use of nuclear weapons would be lawful or unlawful in an extreme circumstance of self-defence, in which the very survival of a State would be at stake’.88 Although the decision itself does not use the term ‘non liquet’, the individual declarations appended to the decision leave little doubt that the Court understood its decision to constitute a non liquet.89
Source Id: law-9780198753506-chapter-1-div5-42ReferencesLegality of the Threat or Use of Nuclear Weapons, Advisory opinion, ICJ GL No 95, [1996] ICJ Rep 226, ICGJ 205 (ICJ 1996), (1996) 35 ILM 1345, 8th July 1996, United Nations [UN]; International Court of Justice [ICJ] ICGJ
1.43 One limiting explanation for the non liquet is the procedural posture of the case. The Nuclear Weapons opinion was the result of the Court’s advisory procedure.90 Judge Vereshchetin noted that the non liquet in the Nuclear Weapons decision is thus not directly relevant to the ongoing non liquet debate in scholarship because ‘the debate has concerned predominantly, if not exclusively, the admissibility or otherwise of non liquet in contentious procedure in which the Court is called upon to pronounce a binding, definite decision settling the dispute between the parties’.91 He argued in particular that: ‘In advisory procedure, where the Court finds a lacuna in the law or finds the law to be imperfect, it ought merely to state this without trying to fill the lacuna or improve the law by way of judicial legislation’.92 This explanation has been endorsed in later scholarship about non liquet and the Nuclear Weapons opinion.93
Source Id: law-9780198753506-chapter-1-div5-43ReferencesLegality of the Threat or Use of Nuclear Weapons, Advisory opinion, ICJ GL No 95, [1996] ICJ Rep 226, ICGJ 205 (ICJ 1996), (1996) 35 ILM 1345, 8th July 1996, United Nations [UN]; International Court of Justice [ICJ] ICGJ
B. Non liquet in the practice of investor-state arbitration
1.44 The prohibition of non liquet in investor-state arbitration thus is potentially problematic if it is viewed in light of existing international legal doctrine. Some scholars have argued that investor-state arbitral tribunals should either declare non liquet or at the very least abstain (p. 17) from arbitral law-making when the state of the law is unclear.94 These rules firmly reject such suggestions.
1.45 These rules have significant doctrinal support for such rejection. Thus, the ICSID Convention states in relevant part that ‘the Tribunal may not bring in a finding of non liquet on the ground of silence or obscurity of the law’.95 This prohibition of non liquet follows upon the International Law Commission’s work on arbitral procedure in public international law.96
1.46 Importantly, the prohibition of non liquet does not imply any position on the material completeness of law. As will become clear in the context of the discussion in Chapter 7 addressing the principle of iura novit curia, this book does not take the position that the rules of law governing investor-state disputes are materially complete. In fact, when the record framework prevents the tribunal from engaging what the tribunal considers to be the true legal problem at bar, the tribunal is affirmatively prohibited from venturing beyond the parties’ framework and reach the legally ‘correct’ conclusion.97
Source Id: law-9780198753506-chapter-1-div5-46ReferencesCaratube International Oil Company LLP v Kazakhstan, Decision on the annulment application of Caratube International Oil Company LLP, ICSID Case No ARB/08/12, IIC 636 (2014), despatched 21st February 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMaritime International Nominees Establishment v Guinea, Decision on partial annulment of the award, ICSID Case No ARB/84/4, (1990) 5 ICSID Rev-FILJ 95, (1997) 4 ICSID Rep 79, (1990) 5(2) Intl Arb Rep Sec E, (1991) XVI YB Com Arb 40, (1991) 118 Clunet 166, 14th December 1989, despatched 22nd December 1989, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID]
1.47 Rather than speaking to the material completeness of the applicable law, the prohibition of non liquet is grounded in the specific mandate of investor-state tribunals to resolve a given legal dispute.98 The parties have empowered the tribunal to make a decision. A manifest failure by the tribunal to exercise a power granted it by the parties is a manifest excess of power for which annulment classically lies.99 The prohibition of non liquet thus is tied not to the completeness of law but to the empowerment of the tribunal by the parties to decide their dispute.100 This conclusion is consistent with the international (p. 18) law of judicial and arbitral jurisdiction and thus operates independently from any view of completeness of law.101
Source Id: law-9780198753506-chapter-1-div5-47ReferencesAES Summit Generation Limited and AES-Tisza Erőmű Kft v Hungary, Decision of the Ad Hoc Committee on the application for annulment, ICSID Case No ARB/07/22, IIC 592 (2012), despatched 29th June 2012, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICCaratube International Oil Company LLP v Kazakhstan, Decision on the annulment application of Caratube International Oil Company LLP, ICSID Case No ARB/08/12, IIC 636 (2014), despatched 21st February 2014, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICCompañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentina, Decision on annulment, ICSID Case No ARB/97/3, (2004) 19 ICSID Rev-FILJ 89, IIC 70 (2002), (2004) 6 ICSID Rep 340, (2002) 41 ILM 1135, (2004) 125 ILR 58, 3rd July 2002, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICFraport AG Frankfurt Airport Services Worldwide v Philippines, Decision on application for annulment, ICSID Case No ARB/03/25, IIC 478 (2010), 17th December 2010, despatched 23rd December 2010, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICIndústria Nacional de Alimentos SA and Indalsa Perú v Peru, Decision on annulment; dissenting opinion of Sir Franklin Berman, ICSID Case No ARB/03/4, IIC 300 (2007), (2007) 12 ICSID Rep 218, despatched 5th September 2007, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IICMalicorp Limited v Egypt, Decision on the application for annulment of Malicorp Limited, ICSID Case No ARB/08/18, IIC 596 (2013), despatched 3rd July 2013, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID] IC IIC
C. Consequence of prohibition of non liquet for the law of evidence
1.48 The prohibition of non liquet has important consequences for the law of evidence and the role of the tribunal in securing evidence. A tribunal is both empowered and required to resolve the dispute. To the extent that it finds itself unable to reach a decision on the submission of the parties, the tribunal therefore must use one of two tools to make a determination. First, the tribunal can expand upon the submissions with the collaboration of the parties to resolve the deadlock either by expanding upon the factual material available to it or by refining the legal framework pled by the parties. Second, the tribunal can rely upon burdens of proof and persuasion in order to determine the legal consequence for the disputing parties of the remaining obscurity. The rules of evidence will refine when and how tribunals have—and must—use one of those strategies in order to determine the appropriate outcome for the dispute.
VII. Internal Value of Investor-State Arbitration and Evidence
1.49 To be legitimate in the eyes of world society, investor-state arbitration must proceed with integrity. This integrity requires first and foremost two things: the parties must view themselves and be treated by the arbitral tribunal as equals. And the parties must engage each other and the tribunal in good faith.
1.50 The equality of the parties is a fundamental norm of fair dispute resolution. It does not denote the status of the individuals as a matter of substantive law. A state is not equal to a non-state actor as a matter of international law. Rather, it applies to the right and ability to participate in the dispute resolution process. It requires that no matter the difference between the parties as a matter of law or fortune, the arbitral tribunal will hear them equally. It will give them equal opportunities to advance their case, not prejudge factual questions ahead of time, and provide them with the means to enter into the arbitral process without fear of reprisals or calamity.
1.51 The equality of the parties also imposes an obligation on the parties and their counsel. They must cooperate with each other as equals. They cannot seek to deprive each other of a fair and equal opportunity to advance their case, cause prejudgment, or threaten reprisal or calamity. This obligation on the parties thus gives rise to an ancillary duty of good faith in the arbitral process.
1.52 This duty of good faith in the arbitral process is in the first instance an obligation of honesty. Parties must prosecute their respective cases and chose their means to do so for the honest (p. 19) purpose of resolving the dispute. They should not feign procedural requests in order to gain an advantage outside of the arbitral context such as by obtaining the presence of a party or witness in the jurisdiction only to arrest them. This honesty also requires that the parties conduct themselves in procedural matters in a trustworthy manner: a statement that a diligent search failed to turn up documents responsive to a request for documents implies that search efforts were in fact diligent and reasonably expeditious.
1.53 The duty of good faith further requires reciprocal regard. It requires that the parties cooperate towards their joint goal of an arbitral resolution of their dispute. This imposes obligations beyond honesty. It requires candour and honourable conduct by the parties and their counsel.
1.54 Although much has been written to cast doubt about whether participants in the arbitral process share these values, the fact that the remainder of this book can make out evidentiary principles tells a more hopeful story. By and large, tribunals are able to resolve disputes. By and large, that is the case because the parties and their counsel place the tribunal in a position to be able to do so. The decisions from which the remainder of the book will derive evidentiary principles of course reveal every tool of zealous advocacy. But they also reveal an equally zealous commitment to the orderly, honest, and impartial resolution of investor-state disputes.(p. 20)
* John Adams, ‘Argument in Defense of the Soldiers in the Boston Massacre Trials,’ Boston Massacre Historical Society (December 1770) US diplomat and politician (1735–1826) http://www.bostonmassacre.net/trial/acct-adams3.htm (last accessed 29 August 2017).
1 See Christoph Schreuer and others, The ICSID Convention: A Commentary (2nd edn, CUP 2009) 666 (‘ICSID Arbitration is not governed by formal rules nor by national laws on evidence. ICSID tribunals have full discretion in assessing the probative value of any piece of evidence before them’).
2 ibid 666; David D Caron and Lee M Caplan, The UNCITRAL Arbitration Rules (2nd edn, OUP 2013) 571–72 (‘Such freedom is expressed in the wording of Article 27(4), according to which it is up to the arbitral tribunal to ‘determine the admissibility, relevance, materiality and weight of the evidence offered’. Its wording and the interpretive history supplied by the negotiating history and the practice of international tribunals clearly show that it confers discretion on the tribunal with respect to all forms of evidence’); see also Ole Spiermann, ‘Applicable Law’ in Peter Muchlinski and others (eds), The Oxford Handbook of International Investment Law (OUP 2008) 89, 115 (‘the ICSID Arbitration Rules issued pursuant to Article 44 takes precedence over specific provisions in national law, one example being admissibility, relevance, and evaluation of evidence’).
3 CISG Advisory Council Opinion No 3: ‘Parol Evidence Rule, Plain Meaning Rule, Contractual Merger Clause and the CISG’ (2005) 17 Pace Intl L Rev 61, 70 (discussing the contrast in the context of the Convention on the International Sale of Goods).
4 See Ugo A Mattei and others, Schlesinger’s Comparative Law, Cases, Text, Materials (7th edn, Foundation Press 2009) 827 (‘To continental lawyers it is a cause of pride that they have essentially freed their courts from the fetters of artificial restrictions on the admission of relevant evidence. In common law countries, on the other hand, many of these restrictions have survived to this day, although there is controversy concerning their basis in history, policy, and logic’).
5 For an introduction to the US law of evidence, see Michael Fontham, Trial Technique & Evidence (4th edn, NITA Publications 2013).
6 See Hubert W Smith, ‘Components of Proof in Legal Proceedings’ (1942) 51 Yale LJ 537, 575 (‘accent is placed on elaboration of exclusionary rules of evidence because of inexpertness of lay jurors’). It is contested whether the jury system is in fact the reason for the introduction of exclusionary rules of evidence. See Dale A Nance, ‘The Best Evidence Principle’ (1988) 73 Iowa L Rev 227, 281 (providing a justification for exclusionary rules in a non-jury setting); Mattei and others, Schlesinger’s Comparative Law, Cases, Text, Materials (n 4) 827–28 (discussing additional literature).
7 See Hubert W Smith, ‘Components of Proof in Legal Proceedings’ (n 6) 575.
8 Queen Mary University of London, 2015 International Arbitration Survey: Improvements and Innovations in International Arbitration 6 (‘The popularity of arbitration may better be understood by reference to the specific characteristics of international arbitration that respondents find most valuable. Unsurprisingly, “enforceability of awards” and “avoiding specific legal systems/national courts” were most frequently chosen, followed by “flexibility” and “selection of arbitrators” ’).
9 Caron and Caplan, The UNCITRAL Arbitration Rules (n 2) 571–72 (‘Article 27(4) is a cornerstone evidentiary rule, which appears in identical form in both the 1976 and 2010 UNCITRAL Rules. This provision makes clear that rigid rules of evidence are unsuitable for international arbitral proceedings. Instead, as emphasized in the travaux préparatoires of the 1976 UNCITRAL Rules, “[i]n making rulings on the evidence, arbitrators should enjoy the greatest possible freedom and they are therefore freed from having to observe the strict legal rules of evidence” ’).
10 See Elena V Helmer, ‘International Commercial Arbitration: Americanized, “Civilized,” or Harmonized?’ (2003) 19 Ohio St J Dispute Resolution 35, 35–36 (‘On the Continent, “Americanization” or an “American approach” … is often a code word for an unbridled and ungentlemanly aggressivity and excess in arbitration. It can involve a strategy of “total warfare”, the excesses of US-style discovery, and distended briefs and document submissions’).
11 See Todd Weiler, The Interpretation of International Investment Law (Martinus Nijhoff 2013) 13 (‘Myths carry normative value for those who believe in them, and such beliefs need be cast in a negative light’).
12 See R Doak Bishop and Silvia Machili, Annulment under the ICSID Convention (OUP 2012) 130–31 (discussing the pedigree of ICSID annulment for serious departure from a fundamental rule of procedure to apply to ‘only rules such as the “right to be heard, including due opportunity to present proofs and arguments”, as well as the “right of parties to equal and impartial treatment” qualified as “fundamental” for the purposes of that ground for annulment’).
13 ibid 150 (discussing jurisprudence supporting this interpretation of the annulment standard).
14 ibid 131, 140–41.
15 In such a case, it would be clear that discretion was not exercised in good faith. See Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP 1956) 133–34 (‘Whenever, therefore, the owner of a right enjoys a certain discretionary power, this must be exercised in good faith, which means that it must be exercised reasonably, honestly, in conformity with the spirit of the law and with due regard to the interests of others’).
18 Klaus-Peter Berger, The Creeping Codification of the New Lex Mercatoria (2nd edn, Wolters Kluwer 2010) 72 (‘A comparative method that has been used successfully for the development of general principles of public international law may also be used for the evolution of a transnational legal system like the NLM …’).
19 ibid 214.
20 ICSID Convention art 42(1); UNCITRAL Arbitration Rules (2010) art 35(1).
21 ICSID Arbitration Rules r 34; UNCITRAL Arbitration Rules (2010) art 27(4).
22 Rodolfo Sacco, ‘Legal Formants: A Dynamic Approach to Comparative Law II’ (1991) 39 Am J Comp L 343, 384–85.
23 For a discussion of deductive methods in law and their failings, see Frédéric Gilles Sourgens, ‘Reconstructing International Law as Common Law’ (2015) 47 George Washington Intl L Rev 1.
24 See Schreuer and others, The ICSID Convention: A Commentary (n 1) 666.
25 For a discussion of deductive methods in law and their failings, see Frédéric Gilles Sourgens, ‘Reconstructing International Law as Common Law’ (n 23) 6–7.
26 Harold D Lasswell and Myers McDougal, Jurisprudence for a Free Society (Kluwer Law International 1992) 226.
28 See Frédéric Gilles Sourgens, A Nascent Common Law, The Process of Decisionmaking in Disputes Between States and Foreign Investors (Brill Nijhoff 2015) 25–29.
29 See Schreuer and others, The ICSID Convention: A Commentary (n 1) 666.
30 ICSID Convention art 48.
31 ICSID Arbitration Rules r 34.
32 Nigel Blackaby and others, Redfern and Hunter on International Arbitration (6th edn, OUP 2015) 502–504 (discussing the scope and features of arbitral awards in the commercial setting).
33 See eg Lao Holdings NV v Lao People’s Democratic Republic, ICSID Case No ARB(AF)/12/6, Decision on Jurisdiction (21 February 2014) [120]–[121] (defining a ‘legal dispute’ by reference to the PCIJ Mavrommatis decision as ‘A dispute is a disagreement on a point of law or fact, a conflict of legal views or of interests between two persons’); AES Corp v Argentine Republic, ICSID Case No ARB/02/17, Decision on Jurisdiction (26 April 2005) [43] (defining a ‘legal dispute’ by reference to the ICJ East Timor decision as ‘a disagreement on a point of law or fact, a conflict of legal views or interests between parties’).
34 See Schreuer and others, The ICSID Convention: A Commentary (n 1) 899 (‘domestic courts have no power to review ICSID awards’).
35 ICSID Convention art 52. See also W Michael Reisman, The Breakdown of the Control Mechanism in ICSID Arbitration (1989) Duke LJ 739, 751.
36 ICSID Arbitration Rules r 9. See also Anne Peters, ‘International Dispute Settlement: A Network of Cooperational Duties’ (2003) 14 EJIL 1–34; see Caron and Caplan, The UNCITRAL Arbitration Rules: A Commentary (n 2) 283–86.
37 Caron and Caplan, The UNCITRAL Arbitration Rules: A Commentary (n 2) 634–68 (discussing the tribunal-appointed expert in the context of UNCITRAL Arbitrations); Nigel Blackaby and others, Redfern and Hunter on International Arbitration (n 32) 411 (reviewing arbitral practice under the IBA Rules on the Taking of Evidence).
38 See Caron and Caplan, The UNCITRAL Arbitration Rules: A Commentary (n 2) 638 (‘When seeking expert advice, the tribunal should always keep in mind that the tribunal-appointed expert is not an additional member of the tribunal, but merely an adviser. While he or she may assist the arbitrators in their fact-finding duties, a role which may often require drawing conclusions based on an analysis of the facts, “the expert cannot usurp the judicial function of the tribunal” ’).
40 Cf UNIDROIT Convention on Agency in the International Sale of Goods art 9(2) (17 February 1983) http://www.unidroit.org/ol-agency/ol-agency-en (last accessed 2 July 2017) (‘The agent has authority to perform all acts necessary in the circumstances to achieve the purposes for which the authorization was given’).
41 Nigel Blackaby and others, Redfern and Hunter on International Arbitration (n 32) 319 (noting the need of arbitral tribunals to rely upon the contempt and subpoena powers of the courts to compel witness testimony).
42 Peters, ‘International Dispute Settlement: A Network of Cooperational Duties’ (n 36) 9–10.
44 ibid; see also David W Rivkin and others, ‘IBA Rules on the Taking of Evidence in International Arbitration’ (2010) IC-AR 029, Preamble [3] (‘The taking of evidence shall be conducted on the principles that each Party shall act in good faith …’).
45 Catherine A Rogers, ‘Fit and Function in Legal Ethics: Developing a Code of Conduct for International Arbitration’ (2002) 23 MJIL 341.
46 Rivkin and others, ‘IBA Rules on the Taking of Evidence in International Arbitration’ (n 44).
47 Gisele Stephens-Chu and Julie Spinelli, ‘The Gathering and Taking of Evidence under the IBA Guidelines on Party Representation in International Arbitration’ (2014) 8(1) DRI 37, 41 (discussing candour under the IBA Guidelines).
48 Edna Sussman and Solomon Ebere, ‘All’s Fair in Love and War: Or Is It? Reflections on Ethical Standards for Counsel in International Arbitrations’ (2012) 22 ARIArb 611 (conducting a rigorous survey of the use of guerrilla tactics in international arbitration).
49 Miranda v Arizona, 384 US 436 (1966) (overturning the criminal conviction of Ernesto Miranda holding that he should have been apprised of his right to counsel prior to an interrogation leading to a typed and signed confession). The case led to the ‘Miranda warning’ made famous by US television shows such as Law & Order. See Ronald Steiner and others, ‘The Rise and Fall of Miranda Warnings in Popular Culture’ (2011) 59 Cleveland St L Rev 219, 222–24 (discussing the link between the decision, the now-famous warning and its integration into popular culture through television shows).
50 See Campbell McLachlan and others, International Investment Arbitration: Substantive Principles (OUP 2008) 5–8 (introducing common principles of investment protection); Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn, OUP 2012) 1–12 (providing a brief historical introduction of these principles); Todd Weiler, The Interpretation of International Investment Law, Equality, Discrimination and Minimum Standards of Treatment in Historical Context (Brill Nijhoff 2013) 1–2 (introducing the Grundnorm of equality/non-discrimination).
51 See Dolzer and Schreuer, Principles of International Investment Law (n 50) 25–27 (discussing recent developments regarding investor-obligations in investor-state arbitration pursuant to proposed newer model investment treaties).
52 See Santiago Montt, State Liability in Investment Treaty Arbitration, Global Constitutional and Administrative Law in the BIT Generation (Hart Publishing 2009) 21 (noting the various policy implications of investor-state arbitration).
53 See ibid 77–78; Kenneth J Vandevelde, ‘The Political Economy of a Bilateral Investment Treaty’ (1998) 92 Am J Intl L 621, 635 (‘BITs affirm liberal economic theory and are liberalizing to some extent in their impact. The agreements, however, are driven principally by economic nationalism. Both parties proceed for largely nationalist reasons but find in a limited embrace of liberalism a way to advance their greater interest in acquiring or protecting wealth’).
54 For a historical introduction to the legal regime addressing such sensitive cases, see Weiler, The Interpretation of International Investment Law, Equality, Discrimination and Minimum Standards of Treatment in Historical Context (n 50) 59–286.
55 Compare Maritime International Nominees Establishment v Republic of Guinea, ICSID Case No ARB/84/4, Decision on Annulment (14 December 1989) [5.05]–[5.06] (noting the importance of equality of the parties to the fundamental rules of procedure from which no serious departure is permitted); Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on Annulment (1 September 2009) [52]; Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on Annulment (23 December 2010) [193] (noting the importance of the equality of the parties); Malicorp Ltd v Arab Republic of Egypt, ICSID Case No ARB/08/18, Decision on Annulment (3 July 2013) [36] (noting the importance of the equality of the parties to the right to be heard); Pey Casado v Republic of Chile, ICSID Case No ARB/98/2, Decision on Annulment (11 September 2013) [56] (noting that equality of the parties is a requirement of natural justice in both annulment and arbitral proceedings); with City Oriente Ltd v Republic of Ecuador, ICSID Case No ARB/06/21, Decision on Provisional Measures (19 November 2007) [62] (ordering Ecuador to cease using criminal processes to ‘aggravate or extend the dispute or take justice into their own hands’); Burlington Resources Oriente Ltd v Republic of Ecuador, ICSID Case No ARB/08/5, Procedural Order No 1 (29 June 2009) [65] (ruling that seizures of oil production impermissibly aggravate the dispute).
56 City Oriente Ltd v Republic of Ecuador, ICSID Case No ARB/06/21, Decision on Provisional Measures (19 November 2007) [62] (ordering Ecuador to cease using criminal processes to ‘aggravate or extend the dispute or take justice into their own hands’); Burlington Resources Oriente Ltd v Republic of Ecuador, ICSID Case No ARB/08/5, Order (29 June 2009) [65] (ruling that seizures of oil production impermissibly aggravate the dispute); Libananco Holdings Co Ltd v Republic of Turkey, ICSID Case No. ARB/06/8, Decision on Preliminary Issues (23 June 2008) [79] (noting the use by Turkey of surveillance techniques to eavesdrop on conversations between client and counsel).
57 See Yukos Universal Limited (Isle of Man) v The Russian Federation, UNCITRAL, PCA Case No AA 227, Final Award (18 July 2014).
59 See M Sornarajah, The International Law on Foreign Investment (CUP 2010) 305.
60 See ICSID Arbitration Rules r 34.
61 See Pey Casado v Republic of Chile, ICSID Case No ARB/98/2, Decision on Annulment (18 December 2012) [74] (‘the test requires that the Committee examine the full record, including the Transcripts and the Award to determine whether or not the Tribunal violated the rule in question’); Malicorp Ltd v Arab Republic of Egypt, ICSID Case No ARB/08/18, Decision on Annulment (3 July 2013) [36] (‘The Committee thus concludes that the principe du contradictoire is a fundamental rule of procedure’); Wena Hotels Ltd v Arab Republic of Egypt, ICSID Case No ARB/98/4, Decision on Annulment (5 February 2002) [57]; Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on Annulment (23 December 2010) [185]; Impregilo SpA v Argentine Republic, ICSID Case No ARB/07/17, Decision on Annulment (24 January 2014) [165]; CDC Group Public Ltd Co v Republic of Seychelles, ICSID Case No ARB/02/14, Decision on Annulment (29 June 2005) [49]; MTD Equity Sdn Bhd v Republic of Chile, ICSID Case No ARB/01/7, Decision on Annulment (21 March 2007) [49]; Lucchetti v Republic of Peru, ICSID Case No ARB/03/4, Decision on Annulment (13 August 2007) [71]; Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on Annulment (1 September 2009) [212]; Duke Energy International Peru Investments No 1 Ltd v Republic of Peru, ICSID Case No ARB/03/28, Decision on Annulment (1 March 2011) [168].
62 See Wena Hotels Ltd v Arab Republic of Egypt, ICSID Case No ARB/98/4, Decision on Annulment (5 February 2002) [57]; CDC Group Public Ltd Co v Republic of Seychelles, ICSID Case No ARB/02/14, Decision on Annulment (29 June 2005) [49]; MTD Equity Sdn Bhd v Republic of Chile, ICSID Case No ARB/01/7, Decision on Annulment (21 March 2007) [49]; Lucchetti v Republic of Peru, ICSID Case No ARB/03/4, Decision on Annulment (13 August 2007) [71]; Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on Annulment (1 September 2009) [212]; Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on Annulment (23 December 2010) [185]; Duke Energy International Peru Investments No 1, Ltd v Republic of Peru, ICSID Case No ARB/03/28, Decision on Annulment (1 March 2011) [168]; Pey Casado v Republic of Chile, ICSID Case No ARB/98/2, Decision on Annulment (18 December 2012) [74]; Malicorp Ltd v Arab Republic of Egypt, ICSID Case No ARB/08/18, Decision on Annulment (3 July 2013) [36]; Impregilo SpA v Argentine Republic, ICSID Case No ARB/07/17, Decision on Annulment (24 January 2014) [165].
63 Maritime International Nominees Establishment v Republic of Guinea, ICSID Case No ARB/84/4, Decision on Annulment (22 December 1989) [5.03].
64 Caratube International Oil Co LLP v Republic of Kazakhstan, ICSID Case No ARB/08/12, Decision on Annulment (21 February 2014) [94] (‘Consequently, tribunals do not violate the parties’ right to be heard if they ground their decision on legal reasoning not specifically advanced by the parties, provided that the tribunal’s arguments can be fitted within the legal framework argued during the procedure and therefore concern aspects on which the parties could reasonably be expected to comment, if they wished their views to be taken into account by the tribunal’); Helnan International Hotels AS v Arab Republic of Egypt, ICSID Case No ARB/05/19, Decision on Annulment (14 June 2010) [38].
65 See ICSID Arbitration Rules r 34.
66 See Christopher Dugan and others, Investor-State Arbitration (OUP 2008) 158 (‘The marshalling of evidence in investment arbitration is generally similar to the process in commercial arbitrations’); Nigel Blackaby and others, Redfern and Hunter on International Arbitration (n 32) 385; Caron and Caplan, The UNCITRAL Arbitration Rules: A Commentary (n 2) 565–66.
67 See Wena Hotels Ltd v Arab Republic of Egypt, ICSID Case No ARB/98/4, Decision on Annulment (5 February 2002) [57]; CDC Group Public Ltd Co v Republic of Seychelles, ICSID Case No ARB/02/14, Decision on Annulment (29 June 2005) [49]; MTD Equity Sdn Bhd v Republic of Chile, ICSID Case No ARB/01/7, Decision on Annulment (21 March 2007) [49]; Lucchetti v Republic of Peru, ICSID Case No ARB/03/4, Decision on Annulment (13 August 2007) [71]; Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on Annulment (1 September 2009) [212]; Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on Annulment (23 December 2010) [185]; Duke Energy International Peru Investments No 1, Ltd v Republic of Peru, ICSID Case No ARB/03/28, Decision on Annulment (1 March 2011) [168]; Pey Casado v Republic of Chile, ICSID Case No ARB/98/2, Decision on Annulment (18 December 2012) [74]; Malicorp Ltd v Arab Republic of Egypt, ICSID Case No ARB/08/18, Decision on Annulment (3 July 2013) [36]; Impregilo SpA v Argentine Republic, ICSID Case No ARB/07/17, Decision on Annulment (24 January 2014) [165].
68 Maritime International Nominees Establishment v Republic of Guinea, ICSID Case No ARB/84/4, Decision on Annulment (22 December 1989) [5.03].
69 ibid; Caratube International Oil Co LLP v Republic of Kazakhstan, ICSID Case No ARB/08/12, Decision on Annulment (21 February 2014) [94].
70 Offshore Co and National Iranian Oil Co, Case No 133, Chamber Two, Order (26 June 1986) in Caron and Caplan, The UNCITRAL Arbitration Rules: A Commentary (n 2) 589.
71 See ICSID Arbitration Rules r 33.
72 See ibid r 34.
73 Caratube International Oil Co LLP v Republic of Kazakhstan, ICSID Case No ARB/08/12, Decision on Annulment (21 February 2014) [94].
74 Maritime International Nominees Establishment v Republic of Guinea, ICSID Case No ARB/84/4, Decision on Annulment (22 December 1989) [5.03].
75 See ICSID Arbitration r 34; see also Rivkin and others, ‘IBA Rules on the Taking of Evidence in International Arbitration’ (n 44) art 9(1) (‘The arbitral tribunal shall determine the admissibility, relevance, materiality and weight of evidence’).
76 See ICSID Arbitration Rules r 34.
79 Elihu Lauterpacht (ed), Hersch Lauterpacht, International Law Collected Papers: 2 The Law of Peace Part I (CUP 1975) 213–14; Kati Kulovesi, ‘Legality or Otherwise? Nuclear Weapons and the Strategy of Non Liquet’ (1999) 10 Finn YBIL 55, 63 (‘A non liquet thus results from a court’s finding that the existing body of law contains no rules or principles that could be applied to a given question’).
80 Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion of 8 July) [1996] ICJ 226, 266 (explaining its conclusion of non liquet in part by reference to ‘the elements of fact at [the Court’s] disposal’).
81 Anna Spain, ‘Deciding to Intervene’ (2014) Houston L Rev 847, 883–84.
84 See Lauterpacht (ed), Hersch Lauterpacht, International Law Collected Papers (n 79) 213–14.
85 Prosper Weil, ‘The Court Cannot Conclude Definitely … Non Liquet Revisited’ (1997) 36 CJTL 109, 110; Mojtaba Kazazi, Burden of Proof and Related Issues, A Study on Evidence Before International Tribunals (Kluwer Law International 1996) 28 (‘Like municipal courts, international tribunals are neither expected nor allowed to refrain from adjudicating a case before them by resorting to non liquet’); Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP 1956) 18; Durward V Sandifer, Evidence Before International Tribunals (University of Virginia Press 1975) 126, 150.
86 See Weil, ‘The Court Cannot Conclude Definitely’ (n 85) 110; Cheng, General Principles of Law as Applied by International Courts and Tribunals (n 85) 16–18.
87 Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion of 8 July) [1996] ICJ 226.
88 ibid 266.
89 See Legality of the Threat or Use of Nuclear Weapons (Declaration of Judge Vereshchetin) [1996] ICJ 226, 279.
90 Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion of 8 July) [1996] ICJ 226.
91 Legality of the Threat or Use of Nuclear Weapons (Declaration of Judge Vereshchetin) [1996] ICJ 226, 279.
92 ibid 280.
93 See Weil, ‘The Court Cannot Conclude Definitely’ (n 85) 117; Richard Falk, ‘Nuclear Weapons, International Law and the World Court: A Historic Encounter’ (1997) 91 AJIL 64, 71.
94 See Harlan Grant Cohen, ‘International Law’s Eerie Moment’ (2013) 34 MJIL 249, 254–55 (‘judicialized custom seems to be running in different directions from negotiated custom, threatening the legitimacy, coherence, and effectiveness of international law. In many areas, it appears that two parallel international laws have been created: one, gap free, in which courts, tribunals, or expert bodies progressively develop the meaning of international law’s unwritten rules, and one, gap filled, in which a great deal of international law remains to be worked out in consultations among states’).
95 ICSID Convention art 42(2).
96 See Schreuer, The ICSID Convention: A Commentary (n 1) 632.
97 Maritime International Nominees Establishment v Republic of Guinea, ICSID Case No ARB/84/4, Decision on Annulment (22 December 1989) [5.03]; Caratube International Oil Co LLP v Republic of Kazakhstan, ICSID Case No ARB/08/12, Decision on Annulment (21 February 2014) [94].
98 But see Schreuer, The ICSID Convention: A Commentary (n 1) 632 (‘The combination of the host State’s law and international law offers such a broad range of authority that a genuine non liquet is almost unthinkable’).
99 Companiá de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on Annulment (3 July 2002) [86] (‘It is settled, and neither party disputes, that an ICSID tribunal commits an excess of powers not only if it exercises a jurisdiction which it does not have under the relevant agreement or treaty and the ICSID Convention, read together, but also if it fails to exercise a jurisdiction which it possesses under those instruments’); Lucchetti v Republic of Peru, ICSID Case No ARB/03/4, Decision on Annulment (13 August 2007) [99]; Fraport AG Frankfurt Airport Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on Annulment (23 December 2010) [36]; AES Summit Generation Ltd v Hungary, ICSID Case No ARB/07/22, Decision on Annulment (29 June 2012) [30] (‘The Committee shares the view put forward by Applicants in these proceedings, and noted by Professor Schreuer, that a tribunal may exceed its power by failing to exercise the jurisdiction which it possesses’); Malicorp Ltd v Arab Republic of Egypt, ICSID Case No ARB/08/18, Decision on Annulment (3 July 2013) [47]; Caratube International Oil Co LLP v Republic of Kazakhstan, ICSID Case No ARB/08/12, Decision on Annulment (21 February 2014) [75]; Bishop and Marchili, Annulment under the ICSID Convention (n 12) 74–78.
100 For further discussion, see Frédéric Gilles Sourgens, ‘Law’s Laboratory: Developing International Law on Investment Protection as Common Law’ (2014) 34 NWJILB 181; see also Myres S McDougal and W Michael Reisman, ‘ “The Changing Structure of International Law,” Unchanging Theory for Inquiry’ (1965) 65 Columbia L Rev 810, 818 (‘The concept of lacuna or a non liquet judgment is a logical corollary of a rule-oriented jurisprudence; it cannot obtain in a jurisprudence based on a process of decision’).
101 Cf Weil, ‘The Court Cannot Conclude Definitely’ (n 85) 114–15 (‘That is the true reason why non liquet has become absent from international adjudication. It is not primarily because it points to the incompleteness of international law or disregards the social function of dispute settlement. Rather, it is because non liquet frustrates the will of the parties to have their disputes settled judicially rather than by some other means available in the system. In international adjudication, avoidance of non liquet is an aspect of jurisdiction’).