Rule of Law and International Investment Law

Investment arbitration or investor-state arbitration (ISA), as the most frequently used form of investor-state dispute settlement (ISDS), has received much public attention and criticism recently, in particular in regard to its possible inclusion in investment agreements between OECD economies such as the EU and Canada (CETA) and the US (TTIP). The public debate focuses on the potential threat to sovereign decision-making in the form of a “regulatory chill” that may affect the regulatory freedom of host states. An objective assessment of the advantages and disadvantages of a system of direct dispute settlement between private parties and states in the field of investment relations will very much depend upon the degree to which the studied form of dispute settlement integrates and embodies rule of law-requirements, thus leaving the necessary regulatory space while at the same time providing a rule of law-corrective against any form of abuse of power by a host state.

The rule of law in international law, in general, and in international investment arbitration, in particular, can be studied from different perspectives. The notion of the rule of law itself is not sufficiently clear. In particular, the demands of equal enforcement and independent adjudication of legal rules and principles as well as fairness in the application of the law, legal certainty, the avoidance of arbitrariness and procedural and legal transparency seem to be particularly relevant for investment arbitration. Nevertheless, there is also a growing debate on the rule of law in international law, as evidenced by various attempts to integrate rule of law concerns in the work of the United Nations and other international organizations. 

This research project builds on the research conducted within the framework of two previous FWF projects (“International Investment Law in the Practice of Arbitration” and “International Investment Law in the Practice of International Arbitration II”) and will now focus on a critical evaluation of the role of the rule of law in modern investment arbitration.

The current – mainly descriptive – assessment of the content of investment law will be taken as point of departure from which the project will turn towards a primarily critical inquiry into investment arbitration’s ability to cope with rule of law demands.

This research project has been developed by the project leader in consultation with leading investment arbitration experts and practitioners in the context of the International Law Association’s work on investment law (see the work of the ILA Committee on “The Rule of Law and International Investment Law”) and other scholarly co-operations in the form of joint conference organizations or co-editorships of books and journals in the field. A number of prominent investment law experts have expressed their willingness to continue co-operating with the project leader and his assistant, Mag. Jose Magnaye; it should therefore lead to transparent research outcomes in the form of conferences and publications.

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International Investment Law in the Practice of International Arbitration

The research project “International Investment Law in the Practice of Arbitration"? aimed at analyzing the legal practice of international arbitral tribunals. This involved to a large extent the interpretation and application of identical or similar treaty provisions which can be found in a dense network of bilateral and even multilateral investment treaties. The main research topics were admission requirements, standards like fair and equitable treatment, full protection and security, MFN and national treatment, as well as expropriation and issues of compensation and damages.

In the past ten years investment dispute settlement by arbitration has increased considerably. Especially the International Centre for the Settlement of Investment Disputes (ICSID), as part of the World Bank Group, has, apart from and UNCITRAL arbitration, significantly shaped the substantive investment law. Within the framework of this project the decisions and awards rendered by these investment tribunals were systematically analyzed and commented on.

The project was funded by the Austrian Science Fund (FWF). It commenced in March 2005 and concluded in March 2011. Main outcomes are a number of conferences held at vienna and publications.

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International Law in Austrian Courts

The research project "International Law in Domestic Courts" aims at responding to the needs of domestic judges and lawyers, as well as other practitioners and scholars dealing with international law, who want to access a broad range of material on international law in a comprehensively processed format. Based on a bottom-up approach, the project seeks to provide a carefully annotated compilation of the decisions of domestic courts .

Two main categories of cases are included: (a) cases relating to the reception and application of international law in the national legal order, and (b) cases relevant to the identification and interpretation of rules of international law. The first category of cases will be included provided they are of sufficient relevance in the light of international law. A useful criterion measuring "relevance" is whether the case can be expected to be cited by international courts, in scholarly work, or as authority for a particular point of international law. The second category of cases will be included if they confirm well-established rules of international law or point to the development of new international legal principles. Materially, these cases concern, for instance, principles of jurisdiction, immunities, State succession, responsibility, general principles (such as good faith or estoppel), or the law of treaties. In terms of functional fields covered, these will, for instance, include international aspects of human rights law, humanitarian law, criminal law, environmental law, and investment law. The project will help intensify international cooperation and further deepen the links of the University of Vienna to other international universities, thus contributing to the overall significance of this research institution.

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