Private

International Law
and Investment
Arbitration
José Antonio Moreno
Rodríguez
Resquebrajamiento

Private International Law and Investment Arbitration 2

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 Assigned reading: Diego Fernández Arroyo, “Public and Private
International Law in International Courts and Tribunals: Evidence of
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an Inescapable Interaction)”, pp. 799-815; 824-853
 “International
lawyers do have a
somewhat
expansionist
tendency to view
anything in a treaty
as automatically
‘subject’ of
international law.”
– Alex Mills
“ In the globalized society as ours today where
”
public and private actors intermingle in common
actions in commercial and political activities, how
can Public and Private International Law ignore
themselves? Publicists may get inspired if they go
deeper into private international law solutions to
find answers to part of their problems.
Yves Daudet

Private International Law and Investment Arbitration 5

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What is
public law?

What is
private law?
Summer in The Hague
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Summer in The Hague
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Public-private law divide
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The grey area in
International Law
Rotterdam, The Netherlands
Where Private Law and Public
International Law meet
Private International Law and Investment Arbitration
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 International
adjudication
• Alabama arbitration (1871)
• Serbian Loans Case (1929)

Cour de Cassation, Paris, France

“Any contract which is not a contract
between States in their capacity as
subjects of international law is based on
the municipal law of some country. The
question as to which this law is forms the
subject of that branch of law which is at
the present day usually described as
Private International Law or the doctrine
of the conflict of laws. The rules thereof
may be common to several States
and may even be established by
international conventions or
customs, and in the latter case may
possess the character or true
international law governing the
relations between States. But apart
from this, it has to be considered that
these rules form part of municipal law.”
(PCIJ)
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Case law blur
• Amco v. Indonesia
• SPP(ME) v. Egypt
• Fedax N.V. v. Rep. of
Venezuela
• Antoine Goetz v. Republic of
Burund
• Maffezini v. Kingdom of Spain
• Wena Hotels case

Hall of the Hague Academy, 1stNAME

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A sui generis
system?
Leiden, The Netherlands
A complex
web of legal
relations
Intersection
State contracts is an area in
which private law and public
law notoriously intersect.
Contrats
administratifs
Imply unilateral powers of the State in
the public interest
Conseil d’Etat: damnum emergens decision
Swiss Federal Tribunal: Alsing case
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International economic transactions

Private International Law and Investment Arbitration

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Termination of
foreign investment
contracts
Public policy-based control and
discretion vs. rules to protect investors

Domestic law vs. Public International

Law doctrine of acquired rights

“public international law contract”,

“quasi-international agreements”,
“partly international agreements” =
international law of contracts
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International
investment law as
a field of
transnational
contract law

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Building blocks?
Amsterdam
From “treaties are
like contracts, only
between States” to
“contracts are like
treaties, only
between individuals
and the State”
Amsterdam famous canals
Examples
Compañia de Aguas del Aconquija,
S.A. v. Argentina: “[w]hether there
has been a breach of the BIT and
whether there has been a breach of
the contract are different
questions. Each of these claims will
be determined by reference to its
own proper or applicable law – in
the case of the BIT, by international
law, in the case of the Concession
Contract, by the proper law of the
contract…”.

Haarlem, one of hidden gems of Holland

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Vivendi case
1) Breach of an investment
contract => proper contract
law
2) Breach of an investment treaty
=> international law
Vivendi v. Argentina, ICSID No
ARB/97/3, 3 July 2002

The Hague
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Vivendi case

Impregilo v Pakistan: “[e]ven if

the two perfectly coincide, they
remain analytically distinct, and
necessarily require different
enquiries.”
- ICSID No ARB/97/3, 3 July 2002

The Hague
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What's
the
hardest
part of
learning
to ride a
bike?

The road
The Hague
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Law applicable to
contract claims
Ambatielos case (ICJ):
concessionary contract between
a government and a foreign
corporation
Breach of contract
Contractual remedies cannot be
awarded under Public
International Law.
1. Foreign investors are not considered
full subjects within international law
2. State contracts do not create Public
International Law obligations for
either of the contracting parties
3. Foreign investors do not carry the
duties or obligations of a State
 Domestic law as the
applicable law
1. Société Ouest Africaine des Bétons
Industriels (SOABI) v. Senegal
(1988)
2. Autopista Concesionada de
Venezuela, C.A. (Aucoven) v.
Bolivarian Republic of Venezuela
(2003)
3. Noble Ventures, Inc. v. Romania
(2005)
 • Bayindir v. Pakistan
• Impregilo v. Pakistan

Exercise of
power iure
imperii
iure gestionis (for commercial or private
matters) vs. State actions performed
iure imperii (in the exercise of sovereign
authority or puissance publique).
Other elements
beyond acts
iure imperii
• Cumulative acts and omissions
• Coerced renegotiations
• Bad faith
• Arbitrariness
(a) denial of justice, in criminal, civil or administrative proceedings;
(b) fundamental breach of due process, including a fundamental
breach of transparency, in judicial and administrative proceedings;
(c) manifest arbitrariness;
(d) targeted discrimination on manifestly wrongful grounds such
as gender race or religious belief;
(e) abusive treatment of investors, such as coercion, duress and
harassment…”.

Article 8.10 CETA

Comprehensive Economic and Trade
Agreement between Canada and the
European Union
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Investment treaties contain provisions
that, if violated, constitute breaches of
Chance
State duties. These provisions constitute
the core of generic treaty rights that are
vs. risk
usually drafted in similar terms, which has
contributed to the development of a
growing arbitral jurisprudence in relation
to treaty rights, many times contradictory.
Absence of clear guidelines =
contradicting interpretations
What is included in the “international minimum
standard” of treatment?
What constitutes “fair and equitable treatment”?
Who is entitled to get this?
How private law matters interact with treaty law?
 Contracts as
investments
Examples
○ Investment treaties have
successfully assimilated contracts to
investments
○ Contracts have been included in the
definition of “investment” in several
investment treaties
○ The breach of contractual rights is
considered as an act of
expropriation or deprivation of
property rights

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 Contracts as
investments
Examples
○ Clear property law provisions allow
investors to properly plan and
execute a land development project.
○ Numerus clausus is one of the
fundamental principles of property
law, and makes reference to the idea
that both the number and content of
property rights is limited.
○ Party autonomy is the dominant
principle within contract law. As
such, contract law can be understood
to follow the logic of choice.

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The logic of
private law

and the interaction between

treaty and contract law
COVID
WORLD
There is no one-size-
fits-all approach
Putting all the pieces
together
Uniform law instruments such as the UNIDROIT Principles may be of
great assistance in investment arbitration-related matters
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Muchas
gracias
@Jmorenoro

Jose Antonio Moreno Rodriguez

https://jmoreno.info