Human Rights in International Commercial and Investment Arbitration

6
Human Rights in International Commercial

and Investment Arbitration
petra butler*
6.1 Introduction
Twenty years ago, discussing human rights together with international arbitration, or
investor-state arbitration, may have been seen as an eccentricity of a few academics.1
However, today, the lines between public and private international law are blurred,
and private players have become in some cases more powerful than public players.
Hence applying human rights law in the context of commercial and investment
arbitration is no longer the disconnected musings of those perched in ivory towers.2
Human rights derive from the inherent dignity of the human person and are
universal. They do not depend on the benevolence of the state for their existence.3
The International Bill of Rights and customary international human rights norms
*
The author would like to thank Marie-Therese Ziereis and Stefan Ackermann for the initial
research for this chapter, Professor Andrea Bjorklund for her insightful comments on the chapter
draft, and the responsible teams at Bucerius Law School and Cambridge University Press for the
careful editing. Views expressed and mistakes made are the author's alone. Readers should note
that the chapter discusses materials and literature published until April 2020.
1
Cf. A. Al Faruque, ‘Mapping the Relationship between Investment Protection and Human Rights’,
The Journal of World Investment & Trade, 11 (2010), 539: ‘[t]he traditional view is that the
difference in nature between human rights and investment protections means that they operate
on different planes’.
2
See T. Krũmiņš, Arbitration and Human Rights (Springer, 2020); J. Fahnder and M. Happold,
‘The Human Rights Defence In International Investment Arbitration: Exploring The Limits Of
Systemic Integration’, International & Comparative Law Quarterly, 68 (2019), 741;
U. Kriebaum, ‘Human Rights and International Investment Law’, in Y. Radi (ed.), Research
Handbook on Human Rights and Investment (Edward Elgar, 2018); F. Balcerzak, Investor-State
Arbitration and Human Rights (Brill, 2017); F. Adeleke, ‘Human Rights and International
Investment Arbitration’, South African Journal on Human Rights, 32 (2016), 48; and A. Jaksic,
‘Procedural Guarantees of Human Rights in Arbitration Proceedings’, Journal of International
Arbitration, 24 (2007), 159; H. Muir Watt, The Contested Legitimacy of Investment Arbitration
and the Human Rights Ordeal, available at https://core.ac.uk/download/pdf/35300621.pdf (last
accessed 18 September 2020).
3
Article 1 of the Universal Declaration of Human Rights, Paris, UN General Assembly Resolution
217 A (III) of 10 December 1948 (UN Doc. A/810); see A. McBeth, ‘Privatizing Human Rights:
What Happens to the State’s Human Rights Duties When Services Are Privatized?’, Melbourne
Journal of International Law, 5 (2004), 143; A. Reiter-Korkmaz, ‘Going Global: Individual Rights,
Universal Norms and the Existence of an Overarching Normative Hierarchy in International Law’,
139
https://doi.org/10.1017/9781108304467.007 Published online by Cambridge University Press

140 p et r a but l e r
(international human rights catalogue) form a constitutional framework that binds

not only parties to international human rights treaties but also all states.4 These
protections extend not only to individuals but also to legal persons. The inter-
national human rights catalogue applies as the overarching bracket to all inter-
national law. The catalogue should be thought of as the world’s constitution that sets
out the minimum standards of protection to which every human being in the world
is entitled.5 The rights afforded under this constitution are, however, not absolute. In
accordance with the principle of proportionality, the human rights of one party need
to be balanced against the human rights of other human rights holders, and the
inherent values of the parties’ respective society.6
International human rights support international arbitration: embedding inter-
national arbitration into the international human rights framework increases inter-
national arbitration’s legitimacy. Arbitral tribunals are ‘not acting in a legal vacuum’7 –
the international human rights catalogue provides the constitutional framework of
international law. International arbitration is part of the international realm and has to
be measured against, at a minimum, the international human rights catalogue.8 That
catalogue determines the minimum requirements concerning procedure and merits of
international arbitration. The international arbitration proceeding itself, as well as the
arbitral award, if final and enforceable, is protected by international human rights law.
This chapter will analyse the role that human rights play in international com-
mercial and international investment arbitration. It will first give a brief introduction
to the international human rights framework and methodology (section 6.2) before
examining how international human rights support international arbitration
European Journal of Legal Studies, 2 (2008), 89, 92; J. Donnelly, Universal Human Rights in Theory
& Practice (Cornell University Press, 1989).
4
Jaksic, ‘Procedural Guarantees of Human Rights in Arbitration Proceedings’ (2007), 167: ‘. . . there
can be no question that the ECHR prevails over other treaties the subject matter of which is related
to international commercial arbitration. Moreover, the same is . . . true [for] international human
rights’. See, for a more detailed discussion, below, at section 6.2.2.
5
See a critical discussion of the world order aspect: Muir Watt, The Contested Legitimacy of
Investment Arbitration, above note 2.
6
See below, at 6.2.4; regarding the proportionality in international human rights law: A. Legg, The
Margin of Appreciation in International Human Rights Law: Deference and Proportionality (Oxford
University Press, 2012); see also M. Kumm, ‘The Idea of Socratic Contestation and the Right to
Justification’, Law & Ethics of Human Rights, 4 (2010), 141, 142; M. Klatt and M. Meister,
‘Proportionality – a Benefit to Human Rights – Remarks on the I-CON Controversy’,
International Journal of Constitutional Law, 10 (2012), 687.
7
See, more generally, as a minimum the idea of communication between subsystems of inter-
national law, N. Luhmann, Law as a Social System (Oxford University Press, 2004), 110;
D. Schneiderman, ‘On Suffering and Societal Constitutionalism’, in T. Kahana and A. Scolnicov
(eds.), Boundaries of State, Boundaries of Rights: Human Rights, Private Actors, and Positive
Obligations (Cambridge University Press, 2016), 25 et seq.
8
See, already regarding the application of human rights to the ICSID Convention, A. Broches, ‘The
Convention on the Settlement of Investment Disputes between States and the Nationals of Other
States: Applicable Law and Default Procedure, in International Arbitration’, in P. Sanders (ed.),
Liber Amicorum for Martin Domke (Nijhoff, 1967), 16–7; W. M. Reisman, ‘The Regime for
Lacunae in the ICSID Choice of Law Provision and the Question of Its Threshold’, ICSID
Review, 15 (2000), 377; and below, at section 6.5.2.1.

human rig hts in international arbitration 141
(section 6.3) and analysing the relevant human rights norms (section 6.4). Finally,
this chapter will briefly outline some particular international arbitration and inter-
national human rights issues (section 6.5) before concluding (section 6.6).
6.2 International Human Rights Framework and Methodology

6.2.1 Universality of Human Rights
Human rights and fundamental freedoms are the birth-right of all human beings;
their protection and promotion is the first responsibility of all Governments.9
Human rights reflect timeless and absolute moral principles, regardless of when and
where those principles originate. Human rights are universally valid because they
derive from metaphysical truth.10 Autonomy, dignity, equality, human capabilities,
human needs, natural law, and self-ownership can be ascribed this status.11 The
human rights that are positively set out in the International Bill of Rights reflect the
global community’s acknowledgement that those rights are important to the world’s
citizens. Additional human rights can be found in customary international law.12
This international human rights catalogue forms the overarching principles accord-
ing to which other international law should be measured.13
6.2.2 Human Rights Framework

6.2.2.1 International Human Rights Law
6.2.2.1.1 International Human Rights Conventions Today’s system of inter-
national human rights law consists of a number of conventions and unwritten
principles. The most important source of human rights law is the so-called
International Bill of Human Rights (IBR). The IBR includes the Universal
Declaration of Human Rights (UDHR), the International Covenant on Civil and
9
Section 1 of the Vienna Declaration and Programme of Action, adopted by the World Conference
on Human Rights in Vienna, 25 June 1993.
10
R. Smith and C. van den Anker, The Essentials of Human Rights (Hodder Arnold, 2005), 353 et seq.
11
Smith and van den Anker, Essentials of Human Rights (2005), 354; Donnelly, Universal Human
Rights (1989), 1.
12
L. Henkin, ‘Human Rights and State “Sovereignty”’, Georgia Journal of International &
Comparative Law, 25 (1996), 31; A. D’Amato, Human Rights as Part of Customary
International Law: A Plea for Change of Paradigms (Northwestern University School of Law
Faculty Working Papers no. 88) (2010).
13
This view is not universally held but has gained acceptance in recent years; see S. Gardbaum,
‘Human Rights as International Constitutional Rights’, The European Journal of International
Law, 19 (2008), 749; see also E. de Wet, ‘The International Constitutional Order’, International &
Comparative Law Quarterly, 55 (2006), 51; M. Scheinin, ‘Impact on the Law of Treaties’, in
M. Scheinin and M. T. Kamminga (eds.), The Impact of Human Rights Law on General
International Law (Oxford University Press, 2009), 23, 27, 28; see also A. Paulus, ‘The
International Legal System as a Constitution’, in J. Dunoff and J. Trachtman (eds.), Ruling the
World? Constitutionalism, International Law, and Global Governance (Cambridge University
Press, 2009), 69 et seq.; cf. A. Jaksic, Arbitration and Human Rights (Peter Lang, 2002), 17, for
civil and political rights only.

142 p e tr a b utl e r
Political Rights (ICCPR)14 and the International Covenant on Economic, Social, and
Cultural Rights (ICESCR).15 These core human rights documents are accompanied by
many other international conventions and declarations.16 The IBR and other UN
Conventions specify how governments must treat people within their jurisdictions.
They enshrine and clarify the distinct normative basis for the protection of funda-
mental rights as rights of human beings rather than as rights of citizens. That means
international human rights do not differentiate between nationals and foreigners.
6.2.2.1.2 International Human Rights as Customary Law There are inter-

national human rights that are not explicitly enshrined in the IBR but have become
customary international law. It follows from their status as international customary
law that these rights bind not only UN members and those who have signed regional
treaties but all other states as well.
Article 38 of the Statute of the International Court of Justice (ICJ) lists customary
law as one of the sources of international law and describes it as ‘international
custom, as evidence of a general practice accepted as law’. The definition sets out the
two requirements of customary international law: state practice and opinio iuris.17
The relevant state practice can be seen, inter alia, in the implementation of human
rights in national bills of rights and constitutions, in the ratification of human right
conventions, in judicial decisions, and in the condemnation of other states’ human
rights violations.18 Where states follow this practice out of a sense of legal obligation,
the requirement of opinio iuris is fulfilled.
A broad consensus exists that almost all human rights enshrined in the UDHR
have achieved customary international law status.19 It is widely recognized that the
14
International Covenant on Civil and Political Rights, New York, UN General Assembly
Resolution 2200A (XXI) of 16 December 1966, entry into force 23 March 1976, 999 UNTS 171.
15
International Covenant on Economic, Social and Cultural Rights, New York, UN General Assembly
Resolution 2200A (XXI) of 16 December 1966, entry into force 3 January 1976, 993 UNTS 3.
16
For example, International Convention on the Elimination of All Forms of Racial Discrimination,
New York, UN General Assembly Resolution 2106 (XX) of 21 December 1965, entry into force
4 January 1969, 660 UNTS 195; Convention on the Elimination of All Forms of Discrimination
against Women, New York, UN General Assembly Resolution 34/180 of 18 December 1979, entry
into force 3 September 1981, 1249 UNTS 13; Convention against Torture and Other Cruel, Inhuman
or Degrading Treatment or Punishment, New York, UN General Assembly Resolution 39/46 of
10 December 1984, entry into force 26 June 1987, 1465 UNTS 85; Declaration on the Rights of
Indigenous Peoples, 13 December 2007 (UN Doc. A/61/295).
17
ICJ, Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, 8 July 1996, ICJ Reports
1996, 226, para. 64; ICJ, Continental Shelf (Libyan Arab Jamahiriya v. Malta), Judgment,
21 March 1984, ICJ Reports 1984, 29, para. 27.
18
Cf. K. Nadasdy Wuerffel, ‘Discriminating Among Rights?: A Nation’s Legislating a Hierarchy of
Human Rights in the Context of International Human Rights Customary Law’, Valparaiso
University Law Review, 3 (1998), 385 et seq.; H. Hannum, ‘The Status of the Universal
Declaration of Human Rights in National and International Law’, Georgia Journal of
International and Comparative Law, 25 (1996), 320 et seq.
19
Hannum, ‘The Status of the Universal Declaration of Human Rights’ (1996), 340; for a particularly
critical view, see A. Weisburd, ‘The Effect of Treaties and Other Formal International Acts on the
Customary Law of Human Rights’, Georgia Journal of International and Comparative Law, 25
(1995), 99.

human r ights in international arbitration 143
UDHR, though not a treaty,20 is today an important source of customary inter-

national law and that its essence is binding for all states.21
The case law of the ICJ supports the notion that most parts of the UDHR have
achieved customary law status and that those human rights obligations have erga
omnes effect.22 For example, the ICJ held in Barcelona Traction23 that obligations
erga omnes derive from the basic rights of the human person. In the Legal
Consequences for States of the Continued Presence of South Africa in Namibia
(South West Africa) case,24 Vice President Ammoun observed25
[that the UDHR, although] not binding qua international convention within the
meaning of Article 38, paragraph 1 (a), of the Statute of the Court, . . . can bind
States on the basis of custom within the meaning of paragraph 1 (b) of the same
Article, whether because they constituted a codification of customary law . . ., or
because they have acquired the force of custom through a general practice
accepted as law, in the words of Article 38, paragraph 1 (b), of the Statute.
A decade later, in the so-called Hostage case, the ICJ found that to ‘[w]rongfully . . .
deprive human beings of their freedom and to subject them to physical constraint in
conditions of hardship is in itself manifestly incompatible with the principles of the
Charter of the United Nations, as well as with the fundamental principles enunciated in
the Universal Declaration of Human Rights’.26 These pronouncements allow one to
conclude that the ICJ regards the rights laid down in the UDHR as essential principles of
international law – whether as customary law, general principles, or international law.
Equally, human rights obligations contained in the ICCPR and ICESCR have
been held to have erga omnes effect to the extent that they have acquired customary
20
With the words of Eleanor Roosevelt, Chairman of the UN Commission on Human Rights and
a US representative to the General Assembly during the drafting of the Declaration: ‘[i]n giving
our approval to the declaration today, it is of primary importance that we keep clearly in mind the
basic character of the document. It is not a treaty; it is not an international agreement. It is not and
does not purport to be a statement of law or of legal obligation. It is a declaration of basic
principles of human rights and freedoms, to be stamped with the approval of the General
Assembly by formal vote of its members, and to serve as a common standard of achievement
for all peoples of all nations.’ (See Hannum, ‘The Status of the Universal Declaration of Human
Rights’ (1996), 318.)
21
A. Lowe, ‘Customary International Law and International Human Rights Law: A Proposal for the
Expansion of the Alien Tort Statute’, Indiana International and Comparative Law Review, 23
(2013), 537; Hannum, ‘The Status of the Universal Declaration of Human Rights’ (1996), 323
(‘there can be no question that, under whatever list of criteria one adopts, the Universal
Declaration constitutes at least significant evidence of customary international law’).
22
Cf. Hannum, ‘The Status of the Universal Declaration of Human Rights’ (1996), 335 et seq.
23
ICJ, Barcelona Traction, Light and Power Company, Limited (Belgium v. Spain), Judgment,
5 February 1970, ICJ Reports 1970, 3.
24
ICJ, Legal Consequences for States of the Continued Presence of South Africa in Namibia (South
West Africa) notwithstanding Security Council Resolution 276 (1970), Advisory Opinion,
21 June 1971, ICJ Reports 1971, 16.
25
ICJ, Legal Consequences for States of the Continued Presence of South Africa in Namibia, Separate
Opinion of Vice-President Ammoun, 21 June 1971, ICJ Reports 1971, 67, 76.
26
ICJ, United States Diplomatic and Consular Staff in Tehran, Judgment, 24 May 1980, ICJ Reports
1980, 3, para. 91.

144 p e tr a b utle r
international law status.27 It should be noted that both conventions have been signed
by just about the entire community of states28 and the rights enshrined in the ICCPR
and ICESCR will be applicable in most states as part of the states’ treaty obligations.
It can be argued that all human rights norms contained in the two conventions have
at this point in time also acquired customary international law status. There is little
doubt that the rights enshrined in the ICCPR are accepted in general practice and
opinio iuris.29 Regarding the rights enshrined in the ICESCR, the Committee on
Economic, Social and Cultural Rights summarized its position in its powerful
General Comment no. 24. The Committee stated, referring to its 2011 statement
on the obligations of states parties regarding the corporate sector and economic,
social and cultural rights,30 that ‘[s]tates parties’ obligations under the Covenant did
not stop at their territorial borders.’31 This mandate compels 171 states to not only
protect ICESCR rights at home but also to safeguard ICESCR rights beyond its
borders. Many of the ICESCR rights have been held to be customary human rights
long before the convention was applicable in nearly all states and before General
27
J. Crawford, Brownlie’s Principles of Public International Law, 8th ed. (Oxford University Press,
2012), 642; P. M. Dupuy, ‘L’unité de l’ordre juridique international’, in Académie de Droit
International de La Haye (ed.), Recueil des Cours, vol. 297 (Brill Nijhoff, 2002), 382–5; de Wet,
‘The International Constitutional Order’ (2006), 61; for ICESCR, see UN Committee on
Economic, Social and Cultural Rights, Substantive Issues Arising in the Implementation of the
International Covenant on Economic, Social and Cultural Rights: Poverty and the International
Covenant on Economic, Social and Cultural Rights (2001), UN Doc. E/C.12/2001/10, para. 16.
E. U. Petersmann, Time for Integrating Human Rights into the Law of Worldwide Organizations –
Lessons from European Integration Law for Global Integration Law (Jean Monnet Working Paper,
Harvard Law School, no. 7) (2001), available at www.jeanmonnetprogram.org/archive/papers/01/
012301-05.html (last accessed 28 January 2020), states: ‘[h]uman rights have thus become part
also of the general principles of law recognized by civilized nations (Article 38 of the Statute of the
International Court of Justice).’
28
The ICCPR has 173, and ICESCR has 171 state parties as of 31 August 2020 (United Nations
Human Rights, Office of the High Commissioner, ‘Status of Ratification Interactive Dashboard’,
United Nations Human Rights, Office of the High Commissioner Website, available at https://
indicators.ohchr.org/ (last accessed 4 September 2020).
29
B. D. Lepard, ‘Why Customary International Law Matters in Protecting Human Rights’,
Völkerrechtsblog (25 February 2019), available at https://voelkerrechtsblog.org/articles/why-
customary-international-law-matters-in-protecting-human-rights/ (last accessed 25 November
2020); cf. C. de la Vega, ‘The Right to Equal Education: Merely a Guiding Principle or Customary
International Legal Right?’ Harvard Blackletter Law Journal, 11 (1994), 43; see also D’Amato,
Human Rights as Part of Customary International Law: A Plea for Change of Paradigms (2010). It
also should be noted that the general acceptance is not measured on compliance with the rights.
See, regarding generally customary international law arising from a normative treaty provision,
A. Costi, ‘The Creation of International Law’, in A. Costi (ed.), Public International Law; A New
Zealand Perspective (Lexis Nexis, 2020), para. 4.5.2.; ICJ, North Sea Continental Shelf (Federal
Republic of Germany v. Denmark; Federal Republic of Germany v. Netherlands), Judgment,
20 February 1969, ICJ Reports 1969, 3, 43.
30
UN Committee on Economic, Social and Cultural Rights, Statement on the Obligations of States
Parties Regarding the Corporate Sector and Economic, Social and Cultural Rights (UN, 2011), UN
Doc. E/C.12/2011/1.
31
UN Committee on Economic, Social and Cultural Rights, General Comment no. 24 (2017) on State
Obligations under the International Covenant on Economic, Social and Cultural Rights in the
Context of Business Activities (UN, 2017), UN Doc. E/C.12/GC/24, para. 26.

Comment no. 24.32 Hence, the rights enshrined in the IBR apply whether or not
states are member states to the IBR or its parts.33 In a few words, the Vienna
Declaration gets to the heart of it: the universal nature of these rights and freedoms
is beyond question.34
6.2.2.1.3 The International Human Rights Catalogue as the Basis of the Global
Constitution In public international law, the orthodox view is to place human
rights treaties, i.e., the ICCPR and ICESCR, on the same footing as any other treaties
and interpret them according to the relevant provisions of the Vienna Convention
on the Law of Treaties 1969.
However, the emerging and better view is that international human rights law, as
laid down in the IBR and as accepted as customary international law,35 forms the
constitutional framework of the international order.36 In other words, those rights
enshrined in the IBR and acknowledged as customary international law are superior
to other branches of international law.37
The Preambles to the ICCPR and the ICESCR explicitly state that the rights laid
down in these Covenants are ‘inalienable’. This supports the understanding that
international human rights are not subject to negotiation. If human rights ‘derive
from the inherent dignity of the human person’,38 they cannot be evaded by simply
entering into a bilateral agreement or a multilateral treaty.39 Otherwise, the
32
See, for example, for the right to education, de la Vega, ‘The Right to Equal Education’ (1994), 44 et
seq.; the right to food, A. Kearns, ‘The Right to Food Exists via Customary International Law’,
Suffolk Transnational Law Review, 22 (1998), 223.
33
Based on the global recognition of those rights, the essence of which is that the natural right of
every human being belongs to them just by being born as one. Those rights cannot leave any single
individual, regardless of their nationality. See H. Dreier in H. Dreier (ed.), Grundgesetz-
Kommentar, 2nd ed., vol. I (Mohr Siebeck, 2004), Art. 1, para. 25; G. Herdegen in T. Maunz
and G. Dürig (eds.), Grundgesetz-Kommentar (C. H. Beck, September 2016), Art. 1(2), paras. 31,
32; H. Bethge in T. Maunz et al., Bundesverfassungsgerichtsgesetz (C. H. Beck, July 2016), s. 90,
para. 65.
34
Vienna Declaration and Programme of Action, adopted by the World Conference on Human
Rights in Vienna on 25 June 1993, I.1.
35
Nadasdy Wuerffel, ‘Discriminating Among Rights?’ (1998), 382 et seq.
36
For a more extensive discussion, see Gardbaum, ‘Human Rights as International Constitutional
Rights’ (2008), 749–68; A. Reiter-Korkmaz, ‘Going Global’ (2008), 89; cf. M. Lamour, ‘Are Human
Rights Law Rules “Special”? Study on Interactions between Human Rights Law Rules and other
International Law Rules’, in N. Weiss and J.-M. Thouvein (eds.), The Influence of Human Rights
on International Law (Springer, 2015), 27 et seq.
37
Cf. European Court of Human Rights (ECtHR), Loizidou v. Turkey, Judgment, 18 December 1996,
Application no. 15318/89, para. 75 (‘. . . would also diminish the effectiveness of the Convention
as a constitutional instrument of European public order’); Jaksic, Arbitration and Human Rights
(2002), 22; Dupuy, ‘L’unité de l’ordre juridique international’ (2002), 139 et seq., 382, note 763; see
also Shaw, who acknowledges that human rights cross the traditional categories of international
law subjects and protagonists (M. Shaw, International Law, 8th ed. (Cambridge University Press,
2008), 270–72.
38
See Preambles of the ICCPR and the ICESCR.
39
As E. U. Petersmann points out, ‘[d]ictatorial governments can no longer freely “contract out” of
their human rights obligations by withdrawing from UN human rights covenants or ILO
conventions . . . That must be true not only for dictatorial governments but generally in regard

international human rights catalogue would not even begin to secure and to safe-
guard the universal and effective recognition and observance of human rights. As the
preambles of the UDHR,40 the Vienna Declaration,41 the ICCPR,42 and the
ICESCR43 all unequivocally emphasize, it is the responsibility of all states to commit
to the international human rights canon. An equivocal commitment by the commu-
nity of states to the international human rights catalogue necessitates that the basic
rights of human beings must be protected as higher law and that they must be
superior to other types of international law.44
The status of the international human rights catalogue as an overarching principle
is also endorsed by Article 103 of the UN Charter, which states:
In the event of a conflict between the obligations of the Members of the United
Nations under the present Charter and their obligations under any other inter-
national agreement, their obligations under the present Charter shall prevail.
Articles 1(3) and 55 of the UN Charter stipulate ‘promoting and encouraging
respect for human rights and for fundamental freedoms for all’ as one of the
purposes and objectives of the United Nations. Article 56 imposes obligations on
the member states to contribute to the fulfilment of the objective of the Charter. For
the 193 member states of the United Nations to realize their obligations under the
to the inability of states to contract out of “human rights”.’ Cf. Petersmann, ‘Time for Integrating
Human Rights into the Law of Worldwide Organizations’ (2001).
40
The preamble of the UDHR states as follows: ‘[n]ow, Therefore, The General Assembly Proclaims
this Universal Declaration of Human Rights as a common standard of achievement for all peoples
and all nations, to the end that every individual and every organ of society, keeping this
Declaration constantly in mind, shall strive by teaching and education to promote respect for
these rights and freedoms and by progressive measures, national and international, to secure their
universal and effective recognition and observance, both among the peoples of Member States
themselves and among the peoples of territories under their jurisdiction’.
41
The preamble of the Vienna Declaration states as follows: ‘[r]eaffirming the commitment con-
tained in Article 56 of the Charter of the United Nations to take joint and separate action, placing
proper emphasis on developing effective international cooperation for the realization of the
purposes set out in Article 55, including universal respect for, and observance of, human rights
and fundamental freedoms for all’.
42
The preamble of the ICCPR states as follows: ‘[r]ecognizing that, in accordance with the Universal
Declaration of Human Rights, the ideal of free human beings enjoying civil and political freedom
and freedom from fear and want can only be achieved if conditions are created whereby everyone
may enjoy his civil and political rights, as well as his economic, social and cultural rights’.
43
The preamble of the ICESCR states as follows: ‘[r]ecognizing that, in accordance with the
Universal Declaration of Human Rights, the ideal of free human beings enjoying freedom from
fear and want can only be achieved if conditions are created whereby everyone may enjoy his
economic, social and cultural rights, as well as his civil and political rights’.
44
Cf. M. Koskenniemi, ‘Constitutionalism as Mindset: Reflections on Kantian Themes about
International Law and Globalization’, Theoretical Inquiries in Law, 8 (2006), 9, 34, 35; A. von
Bogdandy et al., ‘Developing the Publicness of Public International Law: Towards a Legal
Framework for Global Governance Activities’, in A. von Bogandy et al. (eds.), The Exercise of
Public Authority by International Institutions (Springer, 2010), 3, 13; see, contrary to the view
advanced here, G. Schwarzenberger, ‘An International Ius Cogens?’, Texas Law Review, 43 (1965),
460, where he states that ‘[i]n the absence of ius cogens, the freedom of contract of the subjects of
international law is unlimited’.

h u m a n r i g h t s in in t e r na t i o na l a r b i t r a t i o n 147
Charter and advance one of the purposes of the United Nations, they must have
accepted the IBR and customary international human rights as the international
constitutional human rights catalogue.
The view adopted also serves the quest ‘to combat’ the so-called ‘fragmentation of
international law’.45 Conceptualizing IBR and customary international human
rights norms, i.e., the international human rights catalogue, as the overarching
international constitutional norms to which all other international norms have to
adhere, will most importantly progressively ensure a universal and equal implemen-
tation of human rights, and, with that, the best possible comprehensive protection of
the world’s citizens. Secondly, it will allow for the benchmarking and unifying of
international law concepts.46 Article 31(3)(c) of the Vienna Convention on the Law
of Treaties (1969) also supports this view.47
6.2.2.2 Regional Instruments

Besides the conventions discussed above, which operate on a global level, there are
several regional human rights conventions: the European Convention on Human Rights
1950 (ECHR),48 the American Convention on Human Rights 1969 (ACHR),49 and the
African Charter on Human and Peoples’ Rights 1981 (ACHPR).50
45
See, for an in-depth analysis, International Law Commission (ILC), Fragmentation of
International Law: Difficulties Arising from the Diversification and Expansion of International
Law (UN, 2006), UN Doc. A/CN.4/L.682 (finalized by M. Koskenniemi); see also A. Peters, ‘The
Refinement of International Law: From Fragmentation to Regime Interaction and Politicization’,
International Journal of Constitutional Law, 15 (2017), 671, who analyses the ILC Report as part of
the political landscape in which it was conceptualized.
46
Cf. Gardbaum, ‘Human Rights as International Constitutional Rights’ (2008), 749–68; see also
P. M. Dupuy, ‘Unification Rather than Fragmentation of International Law? The Case of
International Investment Law and Human Rights Law’, in P. M. Dupuy et al. (eds.), Human
Rights in International Investment Law and Arbitration (Oxford University Press, 2009), 45; see,
for further discussion regarding fragmentation and other approaches how to overcome it, Peters,
‘The Refinement of International Law’ (2017), 671; M. Ajevski, ‘Fragmentation in International
Human Rights Law – Beyond Conflict of Laws’, Nordic Journal of Human Rights, 32 (2014), 87.
47
Article 31(3) of the Vienna Convention on the Law of Treaties (1969): ‘[t]here shall be taken into
account, together with the context: (c) Any relevant rules of international law applicable in the relations
between the parties’. Art. 31(3)(c) has been the subject of considerable scholarship in particular
regarding its application in investment treaty arbitration: see, for example, Balcerzak, Investor-State
Arbitration and Human Rights (2017), 156; B. Sousa Rodrigues, ‘Treaty Interpretation in Investor-State
Arbitration’, Revista Braileira de Arbitragem, 65 (2020), 91; C. McLachlan et al., International
Investment Arbitration: Substantive Principles, 2nd ed. (Oxford University Press, 2017), para 3.131;
in particular, regarding human rights, for example, Y. Radi, ‘Realizing Human Rights in Investment
Treaty Arbitration: A Perspective from within the International Investment Law Toolbox’, North
Carolina Journal of International Law and Commercial Regulation, 37 (2012), 1130 et seq.; discussion of
Art. 31(3)(c) in J. Fahner and M. Happold, ‘The Human Rights Defence in International Investment
Arbitration: Exploring the Limits of Systemic Integration’, International & Comparative Law
Quarterly, 68 (2019), 749 et seq.; see below, at 6.4, for a more detailed discussion.
48
European Convention for the Protection of Human Rights and Fundamental Freedoms, Rome,
4 November 1950, entry into force 3 September 1953, ETS No. 5.
49
San José (Costa Rica), 22 November 1969, entry into force 18 July 1978, 1114 UNTS 123.
50
Nairobi, 27 June 1981, entry into force 21 October 1986, OAU Doc. CAB/LEG/67/3 rev. 5,
International Legal Materials, 21 (1982), 58.

6.2.2.3 Domestic Instruments

At the third level, there are domestic human rights. They apply only to a single state
and form part of the national constitution.51 Regional and domestic human rights
are highly relevant in the analysis of the relationship between international arbitra-
tion and human rights since they can signal whether certain rights and principles,
which the IBR does not explicitly set down, have become customary international
law. In addition, they provide an extra layer of protection if the particular parties
have standing under a regional human rights instrument.
6.2.2.4 Hierarchy of Human Rights

The international human rights catalogue52 forming the constitutional framework of
the international order53 is the Grundnorm. The catalogue provides the basis for
other types of regional or domestic human rights instruments and other inter-
national human rights conventions. The catalogue reflects a broad consensus in all
parts of the world to recognize and promote a certain minimum standard of human
rights. Regional instruments all incorporate the minimum human rights standards
and often provide an extra layer of protection, such as ‘the right to a general
satisfactory environment favourable to [the people’s] development’,54 as do domes-
tic human rights, which in turn not only have incorporated the minimum inter-
national human rights standards but also particular regional standards. Regional and
domestic human rights protection will often reflect the particular social values
prevalent in the region or country by either incorporating specific rights or stipulat-
ing certain rights limitations.55 For example, the right to freedom of expression
under Article 10 ECHR includes freedom to hold opinions and to receive and impart
information and ideas without interference by public authority and regardless of
frontiers. Article 10(2) ECHR sets out a number of circumstances when the right can
be limited, such as public safety or the protection of health or morals and for the
protection of the reputation or rights of others. Article 5 of the German Basic Law
(Grundgesetz), also being drafted after the experience of suppression of the right
under the Nazi regime, explains in more detail what freely express entails: ‘in speech,
writing and pictures and to inform himself without hindrance from generally
51
For example, s. 1 et seq. of the German Basic Law (Grundgesetz), s. 1 of the Constitution of France,
Amendment 1–10 of the US Constitution, s. 19 et seq. of the Constitution of Chile, s. 7 et seq. of the
Constitution of South Africa, s. 7 et seq. of the Constitution of India, New Zealand Bill of Rights
Act 1990.
52
Nadasdy Wuerffel, ‘Discriminating Among Rights?’ (1998), 382 et seq.
53
For a more extensive discussion, see Gardbaum, ‘Human Rights as International Constitutional
Rights’ (2008), 749–68.
54
ACHPR, Art. 24.
55
For example, Art. 18(1) of the ACHPR, with an emphasis on family and the collective: ‘[t]he
family shall be the natural unit and basis of society. It shall be protected by the State which shall
take care of its physical health and moral’, or Art. 8(2) of the ECHR: ‘[t]here shall be no
interference by a public authority with the exercise of this right except such as is in accordance
with the law and is necessary in a democratic society in the interests of national security, public
safety or the economic well-being of the country, for the prevention of disorder or crime, for the
protection of health or morals, or for the protection of the rights and freedoms of others’.

human r igh ts in in t er n at ion al ar bit ra tio n 149
accessible sources’. Importantly, given the cultural importance of education, culture,

and academia and the experience during the Nazi regime, Article 5(3) specifically
protects the freedom of the arts, science, research and teaching.
6.2.3 Human Rights of Legal Persons

Human rights are generally conceptualized as a safeguard for the individual against
the state. In both international investment arbitration and international commercial
arbitration, parties are often not individuals but legal persons.56 As a result of the
wide scope of human rights, legal persons can be affected by human rights law, both
as beneficiaries of rights and as addressees of obligations.57
6.2.3.1 Protection of Legal Persons

Initially, it was argued that the IBR did not protect legal persons.58 However, the
exclusion of legal persons from the scope of the IBR does not necessarily follow from
the IBR’s purpose.59 Thus, there is now recognition that legal persons, in particular
transnational or multinational companies, should be the beneficiaries of international
human rights.60 With that recognition comes a growing consensus that the inter-
national human rights catalogue applies to legal persons.61 This is in line with the
application of regional human rights instruments to legal persons. The ECHR explicitly
applies to legal persons,62 and American63 and African64 human rights instruments
56
The term ‘legal person’ is used for the purposes of this chapter in a rather broad sense, as including
all legal entities.
57
M. V. Benedettelli, ‘Human Rights as a Litigation Tool in International Arbitration’, Arbitration
International, 31 (2015), 635; cf. M. Emberland, The Human Rights of Companies: Exploring the
Structure of ECHR Protection (Oxford University Press, 2006); J. de Meyer, ‘Human Rights in
a Commercial Context’, Human Rights Law Journal, 5 (1984), 139; ECtHR, Factsheet –
Companies: Victims or Culprits (March 2013).
58
UN Human Rights Committee, General Comment no. 31, The Nature of the General Legal
Obligation Imposed on States Parties to the Covenant (UN, 2004), UN Doc. CCPR/C/21/Rev.1/
Add. 13.
59
L. Henkin, ‘The Universal Declaration’ (1999), 24–5.
60
See J. Bishop, ‘The Limits of Corporate Human Rights Obligations and the Rights of For-Profit
Corporations’, in W. Cragg (ed.), Business and Human Rights (Edward Elgar, 2012), 99 et seq.;
P. Oliver, ‘Companies and Their Fundamental Rights: A Comparative Perspective’, International
& Comparative Law Quarterly, 64 (2015), 661; see also L. Henkin, ‘The Universal Declaration’
(1999), 17.
61
See Bishop, ‘The Limits of Corporate Human Rights Obligations’ (2012), 76 et seq.; J. Wetzel,
‘Corporations and Human Rights’, in J. Wetzel (ed.), Human Rights in Transnational Business
(Springer, 2016), para 4.2.2.; Oliver, ‘Companies and Their Fundamental Rights’ (2015), 661; see
also L. Henkin, ‘The Universal Declaration at 50 and the Challenge of Global Markets’, Brooklyn
Journal of International Law, 25 (1999), 17.
62
Article 34 of the ECHR.
63
Inter-American Court of Human Rights (IACtHR), Advisory Opinion, 26 February 2016, No.
OC-22/16.
64
African Commission on Human and People’s Rights, Article 19 v. The State of Eritrea, Decision on
the Merits, 30 May 2007, Comm. no. 275/2003; African Commission on Human and Peoples’
Rights, Civil Liberties Organization v. Nigeria, Decision on the Merits, 22 March 1995, Comm.
no. 101/93, para. 37.

have extended the application of human rights to legal persons through case law. Many
domestic constitutions also afford legal persons their protection.65
The corollary to the fact that existing regional instruments afford their protec-
tions to legal persons is whether they also impose obligations on them, and there is
a growing consensus that they do.66 Human rights duties of transnational corpor-
ations have developed through soft law mechanisms, such as the UN Guiding
Principles on Business and Human Rights67 and the OECD Guidelines for
Multinational Enterprises.68 These soft law instruments contain express provisions
on the human rights responsibilities of transnational corporations.69 The growing
responsibility of transnational companies regarding the implementation of human
rights must go hand in hand with their own right to be protected by human rights
law.70 For example, the commentary to Principle 9 of the UN Guiding Principles of
Human Rights and Business expressly acknowledges that bilateral investment treat-
ies ‘affect the domestic policy space of governments’. The Guiding Principles thus
recommend that states encourage multilateral institutions within their respective
mandates and capacities to promote business respect for human rights and ‘help
states meet their duty to protect against human rights abuse by business enterprises’.
It is nearly trite to state that legal persons are not the bearers of every
human right. The rights of the international human rights catalogue applicable
to legal persons are, for example, freedom of expression,71 freedom from
discrimination,72 the right to freedom of movement, access to justice,73 the
65
For example, Art. 19(3) of the German Basic Law (Grundgesetz); s. 29 of the 1990 New Zealand Bill
of Rights Act; s. 8 of the 1996 Constitution of South Africa 1996.
66
Article 34 of the ECHR; IACtHR, Advisory Opinion, No. OC-22/16; African Commission on
Human and People’s Rights, Article 19 v. Eritrea, Comm. no. 275/2003; African Commission on
Human and Peoples’ Rights, Civil Liberties Organization v. Nigeria, Comm. no. 101/93, para. 37.
67
UN Human Rights, Office of the High Commissioner, Guiding Principles on Business and Human
Rights (UN, 2011), available at www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessH
R_EN.pdf (last accessed 28 January 2020).
68
The Organisation for Economic Co-operation and Development (OECD), OECD Guidelines for
Multinational Enterprises (OECD, 2011), available at http://mneguidelines.oecd.org/text/ (last
accessed 28 January 2020).
69
Principle 17 of the Guiding Principles on Business and Human Rights; OECD, OECD Guidelines
for Multinational Enterprises (2011), pt. I – ‘Recommendations for Responsible Business Conduct
in a Global Context’, ch. IV, no. 5.
70
Cf. Bishop, ‘The Limits of Corporate Human Rights Obligations’ (2012), 99.
71
ECtHR, The Sunday Times v. United Kingdom, Decision, 26 April 1979, [1979] 2 EHRR 245;
ECtHR, Krone Verlag GmbH & Co. KG v. Austria (no. 3), Judgment, 11 December 2003, [2003] 42
EHRR 28; IACtHR, Matter of the ‘Globovision’ Television Station, Provisional Measures Regarding
Venezuela, Order, 21 November 2007.
72
ECtHR, Church of Scientology Moscow v. Russia, Decision, 5 April 2007, [2007] 46 EHRR 16;
ECtHR, Moscow Branch of the Salvation Army v. Russia, Decision, 24 June 2004, [2006] 44 EHRR
912; also cf. South African Constitutional Court, Alexkor Ltd. and Another v. The Richtersveld
Community and Others, Judgment, 14 October 2003, [2003] ZACC 18.
73
Access to justice encompasses the notion of denial of justice. Denial of justice has been recognized
as ius cogens independent from being a right contained, as an aspect of access to justice, in the IBR.
See Arbitral Tribunal established under Art. VI of the Treaty between the USA and Ecuador
Concerning the Encouragement and Reciprocal Protection of Investment/UNCITRAL Rules,

hu ma n ri gh t s i n i n t er n at i on al a rb i tr at i on 151
right to a fair trial,74 the right not to be searched unreasonably75 and the right
to property.76
6.2.3.2 Obligation of Legal Persons

It is recognized that legal persons, in particular transnational or multinational
companies, have obligations regarding the protection of international human
rights.77 In 2014, the Human Rights Council with Resolution 26/9 unequivocally
affirmed the responsibility of transnational corporations and businesses to respect
human rights.78
The European Union has directed that its member states implement the UN
Guiding Principles through national action plans, and it has incorporated the
principles into its external policy.79
Businesses’ obligation towards safeguarding human rights has found its way into
(model) BITs. An example is Article 18 of the Morocco-Nigeria BIT,80 which
provides that investors ‘shall uphold human rights in the host state’, ‘shall act in
accordance with core labour standards as required by the ILO Declaration on
Fundamental Principles and Rights of Work’ and that investors and investments
‘shall not manage or operate the investments in a manner that circumvents inter-
national environmental, labour and human rights obligations to which the host state
and/or home state are Parties’.
Chevron Corporation (USA) and Texaco Petroleum Corporation (USA) v. Ecuador, Interim Award,
1 December 2008, PCA Case no. 34877, 2–3.
74
ECtHR, British-American Tobacco Company v. the Netherlands, Judgment, 20 November 1995,
[1995] 21 EHRR 409; ECtHR, Central Mediterranean Development Corporation Ltd. v. Malta
(no. 2), Judgment, 22 November 2011; Inter-American Commission on Human Rights, Mevopal
SA v. Argentina, Decision, 11 March 1999, Report no. 39/99.
75
See, for an in-depth comparative discussion, Oliver, ‘Companies and Their Fundamental Rights’
(2015), 661–96.
76
See below, at section 6.4.2.1.
77
See Oliver, ‘Companies and Their Fundamental Rights’ (2015), 661; see also Henkin, ‘The
Universal Declaration’ (1999), 50; Benedettelli, ‘Human Rights as a Litigation Tool’ (2015), 635.
78
Human Rights Council Resolution 26/9, 14 July 2014, UN Doc. A/HRC/RES/26/9, available at
www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Pages/IGWGOnTNC.aspx (last accessed
28 January 2020).
79
European Commission, Commission Staff Working Document on Implementing the UN Guiding
Principles on Business and Human Rights – State of Play, 14 July 2015, SWD(2015) 144 final. The
United Kingdom, the Netherlands, Germany, Denmark, Finland, Lithuania, Sweden, and Italy
have implemented the Principles through domestic law.
80
Reciprocal Investment Promotion and Protection Agreement between the Government of the
Kingdom of Morocco and the Government of the Federal Republic of Nigeria, 3 December 2016
(Morocco-Nigeria BIT). See, for a discussion of the Morocco-Nigeria BIT, N. Zugliani, ‘Human
Rights in International Investment Law: The 2016 Morocco-Nigeria Bilateral Investment Treaty’,
International & Comparative Law Quarterly, 68 (2019), 761. Other noteworthy developments are
Art.6(5) of the Dutch Model BIT, which reaffirms, inter alia, the parties’ obligation to protect
human rights (see, regarding a discussion of the Dutch Model BIT, K. Duggal, ‘The 2019
Netherlands Model BIT: Riding the New Investment Treaty Waves’, Arbitration International,
35 (2019), 347).

152 pe t ra b ut ler
If businesses are given a growing responsibility of transnational companies

towards the implementation of human rights, as evidenced by the Human
Rights Council Resolution, the European Union’s action plan, and their obli-
gations set out in some BITs, then they also must be afforded human rights
protection.
6.2.4 Methodology
There is a generally accepted basic methodology on how to approach a human rights
analysis.81 To gain a methodological insight is important to allow for a nuanced
application of human rights in relation to arbitration. This Part will set out the
generally accepted basic human rights methodology, the burden and standard to
proof in human rights cases, and the use of precedent.
6.2.4.1 Human Rights Methodology

6.2.4.1.1 Three-Step Process The application of human rights to any situation
requires a three-step process. The first step is to define the ambit of the right
that is potentially involved, to determine whether the act or omission is pro-
tected by the right. The second step is an assessment of whether there is an
interference with that right, i.e., whether the act or omission in question is
protected by the ambit of the right.
The third step ascertains whether the interference with the right may be justified
subject to certain requirements. The basis for this third step is the universally
accepted principle that human rights are not absolute. They are usually subject to
certain limitations and need to be counterbalanced with the rights of other holders of
human rights as well as the social values of the respective communities. Article 29(2)
of the UDHR generally acknowledges that
[i]n the exercise of rights and freedoms, everyone shall be subject only to such
limitations as are determined by law solely for the purpose of securing due
recognition and respect for the rights and freedoms of others and of meeting
the just requirements of morality, public order and the general welfare in
a democratic society.
The commonly used analytical framework regarding the third step, i.e., to
balance the rights of human rights holders to allow for the fullest human rights
fulfilment, is that of proportionality. Proportionality is a generally accepted
81
Cf. UN Human Rights Committee, Griffiths v. Australia, Views of the Human Rights Committee,
26 January 2015, Communication no. 1973/2010, UN Doc. CCPR/C/112/D/1973/2010; ECtHR,
Handyside v. the United Kingdom, Judgment, 7 December 1976, [1976] 1 EHRR 737; African
Court on Human and People’s Rights, Konaté v. Burkina Faso, Judgment, 5 December 2014,
Application no. 004/2013; IACtHR, Ivcher-Bronstein v. Peru, Judgment, 6 February 2001;
P. Butler, ‘Red Riding Hood – Is Investor-State Arbitration the Big Bad Wolf?’, Penn State
Journal of Law and International Affairs, 5 (2017), 353 et seq.; Ontario Human Rights
Commission, ‘Analysis for Addressing Competing Human Rights Situations’, Ontario Human
Rights Commission Website, available at www.ohrc.on.ca/en/policy-competing-human-rights
/6-analysis-addressing-competing-human-rights-situations (last accessed 28 January 2020).

h uman rig ht s in in t e rn at ion al a rb itr at ion 153
principle.82 It has been received, inter alia, into the constitutional doctrine of
courts in continental Europe,83 the United Kingdom,84 Canada,85 New
Zealand,86 Israel,87 South Africa,88 and the USA,89 as well as the jurisprudence
of treaty-based legal systems, such as the ECHR,90 the ACHR,91 the European
Court of Justice,92 the ICCPR,93 and the WTO.94 The core proportionality
analysis requires the following inquiries to be made:
a) Is there a legitimate aim with regard to the measure in question?
b) Is the measure suitable to achieve the aim?
c) Is the measure necessary to achieve the aim?
d) Is the measure the least rights infringing means to achieve the aim?
e) Considering the competing interests of the different bearers of rights, is the
measure proportional?
82
T. Cottier et al., ‘The Principle of Proportionality in International Law: Foundations and
Variations’, Journal of World Investment and Trade, 17 (2017), 628; E. Crawford,
‘Proportionality’, in R. Wolfrum (ed.), Max Planck Encyclopedia of Public International Law
(Oxford University Press, 2011); see also ICSID Tribunal, Azurix v. Argentina, Award,
14 July 2006, ICSID Case no. ARB/01/12, paras. 311, 312: ‘[t]he Tribunal finds that [proportion-
ality] provide[s] useful guidance for purposes of determining whether regulatory actions would be
expropriatory and give rise to compensation’; see also ICSID Tribunal, Philip Morris Brands et al.
v. Uruguay, Award, 8 July 2016, ICSID Case no. ARB/10/7, para 305.
83
For example, German Federal Constitutional Court (Bundesverfassungsgericht), Judgment,
3 March 2004, Case no. 1 BvR 2378/98 (police surveillance powers in regard to living space).
84
UK House of Lords, R (Daly) v. Secretary of State for the Home Department, Judgment,
23 May 2001, [2001] UKHL 26; UK House of Lords, Huang (FC) v. Secretary of State for the
Home Department and Kashmiri (FC) v. Secretary of State for the Home Department (Conjoined
Appeals), Judgment, 21 March 2007, [2007] UKHL 11.
85
Canada Supreme Court, R v. Oakes, Judgment, 28 February 1986, [1986] 1 SCR 103.
86
New Zealand Supreme Court, R v. Hansen, Judgment, 20 February 2007, [2007] NZSC 7,
para. 102.
87
Israel Supreme Court, United Mizrahi Bank Ltd. v. Migdal Cooperative Village, Judgment,
9 November 1995, Case no. CA 6821/93.
88
South Africa Constitutional Court, S v. Makwanyane and Another, Judgment, 6 June 1995, [1995]
ZACC 3.
89
With regard to the USA, see I. Porat, ‘Mapping the American Debate over Balancing’, in
G. Huscroft et al. (eds.), Proportionality and the Rule of Law (Cambridge University Press,
2016), 397.
90
ECtHR, Handyside v. UK, [1976] 1 EHRR 737; ECtHR, Soering v. United Kingdom, Decision,
7 July 1989, [1989] 11 EHRR 439; H. Ruiz Fabri, ‘Approach Taken by the European Court of
Human Rights to the Assessment of Compensation for Regulatory Expropriations of the Property
of Foreign Investors’, NYU Environmental Law Journal, 11 (2002), 163.
91
Compare Art. 27(1) of the ACHR and discussion in Y. Araitakashi, The Margin of Appreciation
Doctrine and the Principle of Proportionality in the Jurisprudence of the ECHR (Intersentia,
2001), 186.
92
For example, Court of Justice of the European Union (CJEU), Sky Österreich GmbH
v. Österreichischer Rundfunk, Judgment, 22 January 2013, Case no. C-283/11, para. 50 et seq.
93
UN Human Rights Committee, General Comment no. 31 (2004), para. 6; for an in-depth discus-
sion on the framework of proportionality in different jurisdictions, see Huscroft et al. (eds.),
Proportionality and the Rule of Law (2016).
94
A. Mitchell, ‘Proportionality and Remedies in WTO Disputes’, The European Journal of
International Law, 17 (2006), 985.

The human rights framework demands a balancing of the victim of the prima
facie rights violation with the rights of other rights bearers and the respective
society’s values. The proportionality paradigm gives the balancing a tested
structure.95
6.2.4.1.2 Margin of Appreciation The principle embodied in the doctrine of

margin of appreciation is also part of international and domestic human rights
methodology96 and colours the application of the proportionality analysis.97 Even
though it was developed explicitly by the ECtHR, the notion that the state has to be
given some discretion to regulate its own affairs is accepted by courts and tribunals
95
As an example of how this balancing structure operates in practice, imagine the following:
Country A restricts entry to its country to citizens and permanent residents due to a pandemic.
Arbitrator B has been living in Country A for the last fifteen years. However, B is neither a citizen
nor a permanent resident. B has been appointed as an arbitrator. Due to the peculiarities
surrounding the arbitral dispute, only an in-person hearing can guarantee a fair hearing. The
hearing is to take place in Country C. B could leave Country A to conduct the hearing; however,
B could not come back to Country A to live. The human rights catalogue of Country A guarantees
everyone the right to freedom of movement, including the right to enter the country. The human
rights catalogue also stipulates that the right can be limited if justified in a free and democratic
society. The courts of Country A use the set-out proportionality analysis to determine whether the
limitation, here the restriction of entry, is justified in a free and democratic society. The test would
be applied as follows:
a) Is there a legitimate aim with regard to the measure in question? Given the potentially devastating
impact of the pandemic on the population of Country A and the fact that Country A has only
limited capacity to enforce isolation measures and provide health care, the aim is legitimate.
b) Is the measure suitable to achieve the aim? The measure will lower the number of people coming
into the country, i.e., people who potentially can carry the virus, such that the necessary facilities
will not be stretched.
c) Is the measure necessary to achieve the aim? Since Country A has no resources to increase its
quarantine monitoring capacity or to improve its health care system, the measure is necessary to
achieve the aim to safeguard its population from the pandemic.
d) Is the measure the least rights-infringing means to achieve the aim? Whether restricting access to
Country A is the least infringing measure will depend on whether other measures are available.
Generally, this limb is the crux of the proportionality analysis and governments are required to
provide evidence regarding the available measures. In particular, the measure might not be the least
infringing if the scheme does not allow for exemptions.
e) Considering the competing interests of the different bearers of rights, is the measure proportional?
Should restricting the entry access for people such as Arbitrator B be the least infringing measure, it
can be argued that the measure is, however, not proportional. Arbitrator B lives in Country A. It is
B’s home. B’s work contributes to the GDP of Country A. It is disproportionate that an exemption
for B has not been made. That exemption could include B paying the additional costs that the re-
entry into Country A might incur.
96
Y. Shany, ‘Toward a General Margin of Appreciation Doctrine in International Law?’, European
Journal of International Law, 16 (2005), 907; D. McGoldrick, ‘A Defence of the Margin of
Appreciation and an Argument for Its Application by the Human Rights Committee’,
International & Comparative Law Quarterly, 65 (2016), 21; A. Follesdal, ‘Exporting the Margin
of Appreciation: Lessons for the Inter-American Court of Human Rights’, International Journal of
Constitutional Law, 15 (2017), 359.
97
Clarke, ‘The Charter of Rights and a Margin of Appreciation for Federalism’ (2006); Legg, The
Margin of Appreciation in International Human Rights Law (2012); McGoldrick, ‘A Defence of the
Margin of Appreciation and an Argument for Its Application’ (2016).

h u man ri g ht s i n i n t e rn at i on al a rb i tr at i on 155
globally.98 It could even be argued that the principle embodied in the margin of
appreciation doctrine has achieved customary international law status.99
The baseline of the doctrine was first explained by the ECtHR in Handyside v. the
United Kingdom:100
By reason of their direct and continuous contact with the vital forces of their
countries, State authorities are in principle in a better position than the inter-
national judge to give an opinion on the exact content of these requirements [of
morals] as well as on the ‘necessity’ of a ‘restriction’ or ‘penalty’ intended to meet
them.
The function of the margin of appreciation doctrine lies in its application to the
proportionality analysis.101 The doctrine circumscribes the limits of protection
under human rights law.102 It allows each state certain freedoms to regulate its
own affairs. The doctrine circumscribes the discretion a court or tribunal grants to
domestic authorities, especially when questioning whether there is a legitimate aim
regarding the measure in question or whether the state has to choose the least
infringing measure available.
The principle embodied in the margin of appreciation doctrine is of particular
relevance in investor-state arbitration. The question that the tribunal must answer
is whether to allow the state a margin of appreciation in regulating its own affairs in
the specific case and, if so, how wide that margin should be. Allowing a ‘margin of
appreciation’ does not mean that the state can violate the investor’s rights under
the relevant BIT or as enshrined in the international human rights catalogue. It
98
For example, New Zealand Supreme Court, R v. Hansen, [2007] NZSC 7, Tipping J, para.
105; German Federal Constitutional Court (Bundesverfassungsgericht), Judgment,
17 April 1991, Case nos. 1 BvR 419/81, 1 BvR 213/83, BVerfGE 84, 34; Follesdal,
‘Exporting the Margin of Appreciation’ (2017), 359; J. A. Clarke, ‘The Charter of Rights
and a Margin of Appreciation for Federalism: Lessons from Europe’ (for presentation at the
Canadian Political Science Association, 1 June 2006), available at www.cpsa-acsp.ca/papers-
2006/Clarke.pdf (last accessed 28 January 2020); Legg, The Margin of Appreciation in
International Human Rights Law (2012); McGoldrick, ‘A Defence of the Margin of
Appreciation and an Argument for Its Application’ (2016); T. Ginsburg, ‘Margin of
Appreciation at the African Court’, Blog of the International Journal of Constitutional Law
(22 August 2013), available at www.iconnectblog.com/2013/08/margin-of-appreciation-at-
the-african-court/ (last accessed 28 January 2020).
99
Clarke, ‘The Charter of Rights and a Margin of Appreciation for Federalism’ (2006); Legg, The
Margin of Appreciation in International Human Rights Law (2012); McGoldrick, ‘A Defence of
the Margin of Appreciation and an Argument for Its Application’ (2016). See, however, G. Born’s
concurring and dissenting opinion in ICSID Tribunal, Philip Morris v. Uruguay, ICSID Case no.
ARB/10/7, para. 87: ‘[t]he “margin of appreciation” is a specific legal rule, developed and applied
in a particular context, that cannot properly be transplanted to the BIT (or to questions of fair and
equitable treatment more generally). There are well-considered legal rules, already applicable to
questions of fair and equitable treatment, which serve similar purposes to those of the “margin of
appreciation”, but in a more nuanced and balanced manner’.
100
See ECtHR, Handyside v. UK, [1976] 1 EHRR 737, para. 48.
101
See above, at section 6.2.4.1.1.
102
See C. Ovey and R. White, The European Convention on Human Rights, 4th ed. (Oxford
University Press, 2006), 53 et seq.

means that the state might not have to choose the least infringing measure
available.103
6.2.4.1.3 The Burden of Proof A brief basic overview of the burden of proof104
in human rights cases complements the discussion on methodology.105 The general
distribution of the burden of proof in relation to a human rights analysis reflects that,
generally, human rights are a safeguard against the state. The victim who alleges
a human rights violation has to prove that the violation falls within the ambit of
a human right (actori incumbit probatio). Once the victim has proven the violation
of the right, the burden of proof ‘shifts’.106 The government has to prove that the
violation of the right constitutes a justified limitation, i.e., it has to prove all limbs of
the proportionality test.107
The UN Human Rights Committee108 and the Inter-American Court109 have
determined an exception to the above distribution of the burden of proof. If the
information necessary to prove the rights violation is exclusively in the hands of the
state party, and unless the state party presents satisfactory evidence and explanation
103
Cf. IACtHR, Sawhoyamaxa Indigenous Community v. Paraguay, Judgment, 29 March 2006,
Series C No. 146, para. 140; ICSID Tribunal, Bernhard von Pezold and others v. Republic of
Zimbabwe and Border Timbers Limited and others v. Republic of Zimbabwe, Petition of ECCHR
and Indigenous Chiefs, May 2012, ICSID Case nos. ARB/10/15 and ARB/10/25 (conjoined).
A detailed margin of appreciation analysis is not possible here; see Legg, The Margin of
Appreciation in International Human Rights Law (2012) for further reading; see also below, at
section 6.5.2.2.
104
Burden of proof refers to the persuasive or legal burden, which refers to the party having to prove
the factual contentions of its case to an appropriate standard. This concept is a general principle
of law (B. Cheng, General Principles of Law as Applied by International Courts and Tribunals
(Cambridge University Press, 1953), 326 et seq.; T. Thienel, ‘The Burden and Standard of Proof in
the European Court of Human Rights’, German Yearbook of International Law, 50 (2007), 548).
105
For a more in-depth discussion, see, for example, J. Kokott, The Burden of Proof in Comparative
and International Human Rights Law: Civil and Common Law Approaches with Special Reference
to the American and German Legal Systems (Kluwer, 1998); Thienel, ‘The Burden and Standard of
Proof’ (2007), 543.
106
Implicit in s. 4(2) of the Optional Protocol to the International Covenant on Civil and Political
Rights; ECtHR: M. Ambrus, ‘The European Court of Human Rights and Standards of Proof – an
Evidentiary Approach towards the Margin of Appreciation’, in L. Gruszczynski and W. Werner,
Deference in International Courts and Tribunals: Standard of Review and Margin of Appreciation
(Oxford University Press, 2014); but Thienel, ‘The Burden and Standard of Proof’ (2007), 546,
547, who states that the ECtHR will, once the claimant has established a prima facie case, obtain
material proprio motu (citing IACtHR, Velásquez-Rodríguez v. Honduras, Judgment,
29 July 1988, (Ser. C) No. 4 (1988); O. Claude, ‘A Comparative Approach to Enforced
Disappearances in the Inter-American Court of Human Rights and the European Court of
Human Rights Jurisprudence’, Intercultural Human Rights Law Review, 5 (2010), 415.
107
See, for example, A. Bovino, ‘Evidential Issues before the Inter-American Court of Human
Rights’, International Journal on Human Rights, 3 (2005), 63; Thienel, ‘The Burden and
Standard of Proof’ (2007), 551.
108
Implicit in s. 4(2) of the Optional Protocol to the International Covenant on Civil and Political
Rights.
109
IACtHR, Velásquez-Rodríguez v. Honduras, (Ser. C) No. 4 (1988); Claude, ‘A Comparative
Approach to Enforced Disappearances’ (2010), 415 et seq.

human ri ghts in international arbitration 157
to the contrary, the committee and the court may consider relieving the victim from
the burden of proving the rights violation.110
6.2.4.1.4 Standard of Proof The standard of proof applied in human rights cases
needs a brief mention since the ECtHR especially has developed a distinctive
approach. The ECtHR has a nuanced jurisprudence regarding the standard of
proof. The court defines the standard of proof for the party who bears the burden
of persuasion with regard to a certain factual or mixed factual and legal question. The
jurisprudence of the ECtHR reveals that the state’s standard of proof can fall into
three categories, namely strict, intermediate, or lenient scrutiny, depending on
whether the state has a wide or narrow margin of appreciation.111 The nature of
the violation and the importance of the right are the most critical factors with regard
to whether the court requires a high standard of proof, i.e., whether it will scrutinize
the evidence strictly.112 It should be noted that the court requires a high standard of
proof in cases concerning the right to life and freedom from torture.113
The standard of proof to be applied is particularly important in cases where there
is conflicting scientific evidence, such as climate change and environmental degrad-
ation and their consequences, or where economic predictions are crucial to the case.
6.2.4.2 The Use of Comparative Jurisprudence and Literature

Since human rights are the birthright of all human beings, they have – despite the
above-mentioned hierarchy – to be seen in a global, not in a historical and social
context.114 Therefore, unlike in other areas of the law, any regional or domestic
human rights court or tribunal decision can have precedent-like value qua deciding
on a human rights issue.115 In this context, recourse to the above-mentioned
hierarchy is not, per se, strictly applied by courts and tribunals. For example, the
principle embodied in the doctrine of margin of appreciation has evolved into
a general principle of human rights law; therefore, it also applies outside the
European Convention countries.116
110
Claude, ‘A Comparative Approach to Enforced Disappearances’ (2010), 415 et seq.
111
Ambrus, ‘The European Court of Human Rights and Standards of Proof’ (2014), 235.
112
See, for example, ECtHR, Giuliani and Gaggio v. Italy, Judgment, 24 March 2011, App. no. 23458/
02, para. 56; ECtHR, Nachova and others v. Bulgaria, Judgment (Chamber), 26 February 2004,
App. nos. 43577/98, 43579/98; ECtHR, Nachova and others v. Bulgaria, Judgment (Grand
Chamber), 6 July 2005, App. nos. 43577/98, 43579/98; ECtHR, Obukhova v. Russia, Judgment,
8 January 2009, App. no. 34736/03.
113
ECtHR, Giuliani and Gaggio v. Italy, App. no. 23458/02; from its jurisprudence in regard to Arts.
2 and 3 ECHR, it becomes apparent that strict scrutiny is akin to ‘beyond reasonable doubt’.
114
Cf. Donnelly, Universal Human Rights (1989), in particular ch. 6, which explains universality in
relation to cultural relativism. K. C. Tan, What Is This Thing Called Global Justice (Routledge,
2017), ch. 6.
115
As a way of example: a decision of the ECtHR on what constitutes the ambit of freedom of
expression can be part of the analysis of what constitutes the ambit of freedom of expression in
New Zealand as well as under the American Convention on Human Rights.
116
For example, Legg, The Margin of Appreciation in International Human Rights Law (2012); for
a different view, see G. Born’s concurring and dissenting opinion in ICSID Tribunal, Philip
Morris v. Uruguay, ICSID Case no. ARB/10/7.

158 p e t ra b ut ler
6.3 International Human Rights as a Means of Justification

for the ‘Existence’ of International Arbitration
6.3.1 Justification
Human rights not only protect individuals from abuses (Abwehrrechte), but they
also give rights of freedom (Freiheitsrechte). In the context of arbitration, rights that
safeguard freedom of action (Handlungsfreiheit) (section 6.3.1.1), as well as judicial
rights, for example, ‘access to justice’ (section 6.3.1.2) and ‘effective justice’ (section
6.3.1.3) are important.
6.3.1.1 Handlungsfreiheit
117
Handlungsfreiheit can be described as the human right to act in one’s own interest,
for example, the freedom to conclude contracts. Handlungsfreiheit is embodied in
the international human rights catalogue, inter alia, through Article 17 of the ICCPR
(the right to privacy)118 and Article 18 of the ICCPR (freedom of expression). The
right to privacy is a core right underpinning dignity and emphasizing the ideal of
autonomy,119 i.e., the ability of the individual to conduct one’s own affairs without
the intrusion of society.120 The notion of autonomy also encompasses how a person
shapes their own legal relationships, including the right to conclude an arbitration
agreement instead of using state courts.
6.3.1.2 Access to Justice

Access to justice is a basic principle of the rule of law.121 Access to justice not only
guarantees an individual’s access to courts or legal representation122 but also ensures
that judicial outcomes are just and equitable. Importantly access to justice does
include the effectiveness of the adjudicative system.123 These two guarantees, access
117
Article 2(1) of the German Basic Law (Grundgesetz): ‘[e]very person shall have the right to free
development of his personality insofar as he/she does not violate the rights of others or offend
against the constitutional order or the moral law.’
118
For example, s. 12 of the UDHR; s. 8(1) of the ECHR; s. 5 of the American Declaration of the
Rights and Duties of Man; s. 14(d) of the Constitution of South Africa.
119
H. J. Snijders, ‘Privacy of Contract’, in K. S. Ziegler (ed.), Human Rights and Private Law: Privacy
as Autonomy (Hart, 2007), 108.
120
R. Smith and C. van den Anker, The Essentials of Human Rights (Routledge, 2005), 289.
121
Access to justice is guaranteed, inter alia, by Art. 8 of the UDHR, Art. 2(3) of the ICCPR, Art. 6 of
the ECHR, Art. 7 of the ACHPR, and Arts. 24 and 25 of the ACHR.
122
United Nations Development Programme, Access to Justice Practice Note (9 March 2004),
available at www.undp.org/content/dam/aplaws/publication/en/publications/democratic-
governance/dg-publications-for-website/access-to-justice-practice-note/Justice_PN_En.pdf
(last accessed 29 January 2020).
123
United Nations Development Programme, Access to Justice Practice Note (9 March 2004) (see
note 122); European Union Agency for Fundamental Rights and Council of Europe, Handbook
on European Law Relating to Access to Justice, January 2016, 2.4; cf. M. Scheinin, ‘Access to Justice
before International Human Rights Bodies: Reflections on the Practice of the UN Human Rights
Committee and the European Court of Human Rights’, in F. Francioni (ed.), Access to Justice as
a Human Right (Oxford Scholarship Online, 2007), ch. 4.

to the courts and to effective justice, embodied in the right to access to justice, are
particularly relevant in the context of international arbitration.124
6.3.1.3 Effective Justice

The right to access to justice entails the right to effective justice, i.e., the right to an
independent, impartial, timely, affordable, and expert tribunal.125
The right to effective justice affects international arbitration in two ways. First, it
defines the minimum standards in conducting an arbitration. These standards can
be abrogated due to the parties’ right to Handlungsfreiheit, i.e., their autonomy to
determine how to resolve their dispute. However, parties will not be able to derogate
from the effective justice principles entirely since the parties are part of the inter-
national community, and so are the arbitrators. It is in the interest of the inter-
national community that the core rights of effective justice are adhered to, to avoid
an erosion of the right to effective justice.126
Second, in circumstances where the state fails to provide effective access to justice,
international arbitration can be legitimized not only through the right to
Handlungsfreiheit but also by the parties’ right to effective justice.127
6.3.1.4 Limits Posed by Access to the Courts

The right to access to the court protects the ability of any person, regardless of income,
to use the national legal system to advocate for themselves and their interests.
International arbitration does not contravene the right to access to the courts. On
the contrary, it supplements the right. When balancing the right to effective justice
with the right to access to the courts, it must be considered that, in cross border trade,
parties are often prevented from effectively gaining access to courts because, for
example, of unfamiliar and uncertain judicial procedure in a foreign court, difficulties
with enforcement of judgments against foreign trading partners, or the costs associ-
ated with resolving disputes in the international space.128 International arbitration
enables parties to resolve disputes quickly, flexibly and expertly. As long as arbitral
proceedings ensure compliance with human rights and with due regard to
124
For example, F. Francioni, ‘The Rights of Access to Justice under Customary International Law’,
in F. Francioni (ed.), Access to Justice as a Human Right (Oxford Scholarship Online, 2007);
D. L. Rhode, Access to Justice (Oxford University Press, 2004).
125
A. Byrnes et al., Access to Justice: A Discussion Paper for the 11th Session of the United Nations
General Assembly Open-Ended Working Group of Ageing (6 to 9 April 2020) (2020), 2.1.1., United
Nations Development Programme, Access to Justice Practice Note (9 March 2004) (see note 122);
European Union Agency for Fundamental Rights and Council of Europe, Handbook on
European Law Relating to Access to Justice, January 2016, 2.4; cf. Scheinin, ‘Access to Justice
before International Human Rights Bodies’ (2007), ch. 4.
126
A discussion of how far a total abrogation of one’s right is possible is outside the scope of this chapter.
The author holds the view that the core of every right cannot be derogated from. For a more in-depth
discussion, see Benedettelli, ‘Human Rights as a Litigation Tool’ (2015), 646 et seq.
127
See, for further discussion on this point, P. Butler and C. Herbert, ‘Access to Justice vs Access to
Justice for Small and Medium-Sized Enterprises: The Case for A Bilateral Arbitration Treaty’,
New Zealand Universities Law Review, 26 (2014), 195 et seq.
128
Butler and Herbert, ‘Access to Justice vs Access to Justice for Small and Medium-Sized
Enterprises’ (2014), 188.

160 p et ra but l e r
Handlungsfreiheit, which protects the right to choose between state courts and arbi-
tration, international arbitration extends access to justice, especially because of the
advantages of arbitration, such as speed, costs, and expertise.129
Due to their right to Handlungsfreiheit, parties are entitled to waive certain rights
to the extent that the waiver is freely made, licit and unequivocal. If those criteria are
fulfilled, they may exclude the jurisdiction of state courts and submit their disputes
to arbitration.130 Importantly, parties have access to courts at the enforcement stage
and are able to challenge the competence of an arbitral tribunal in a national court.
6.3.2 International Arbitration Theories and Human Rights

The following section briefly examines whether the generally held arbitration
theories131 are compatible with the constitutional international human rights frame-
work advanced in this chapter.
The freedom to conclude contracts is protected by international human rights
represented by Handlungsfreiheit.132 Therefore, the contractual theory of
arbitration133 is rooted directly within human rights.
The jurisdictional theory134 is based on the supervisory powers of the state. Since
the state is, as a member of the international community, bound by the international
human rights catalogue, international arbitration is protected by the right to
Handlungsfreiheit enshrined in the international human rights catalogue.
According to the hybrid theory,135 the contractual element is ensured by
Handlungsfreiheit and the jurisdictional element guarantees the binding effect of the
international human rights catalogue in arbitration. Since international human rights
are universal and form an overarching constitutional framework providing for
129
For example, the ECtHR confirms, regarding Art. 6 of the ECHR, that persons may waive their
right to court: ECtHR, Noureddine Tabbane v. Switzerland, Judgment, 1 March 2016, App
no. 41069/12, para. 26 et seq.; ECtHR, Suda v. Czech Republic, Judgment, 28 October 2010,
App no. 1643/06, para. 48 et seq.
130
ECtHR, Tabbane v. Switzerland, App no. 41069/12, para. 26 et seq.; ECtHR, Suda v. Czech
Republic, App no. 1643/06, para. 48 et seq.
131
See G. Born, International Commercial Arbitration, 2nd ed. (Kluwer, 2014), vol. I, para. 1.05; see,
in this Compendium, E. Gaillard, Chapter 2 – ‘Theories of International Arbitration’.
132
See above, at section 6.3.1.1.
133
See Born, International Commercial Arbitration (2014), vol. I, para. 1.05; G. Balladore-Pallieri,
‘L’arbitrage privé dans les rapports internationaux’, Recueil des Cours, vol. 51 (Brill Nijhoff,
1935), 316; J. J. Foelix, Traité du droit international privé, 2nd ed. (Joubert, 1847), 461;
P. A. Merlin, Recueil alphabétique des questions de droit (Tarlier, 1829), vol. IX, 143–9.
134
Balladore-Pallieri, ‘L’arbitrage privé dans les rapports internationaux’ (1935), 187; J. P. Niboyet,
Traité de droit international privé francais (Sirey, 1947), vol. VI, 135; A. Laine, De l’exécution en
France des sentences international privé (Sirey, 1924), 537.
135
K. S. Carlston, ‘Theory of the Arbitration Process’, Law and Contemporary Problems, 17 (1952), 635;
A. S. Rau, ‘The Culture of American Arbitration and the Lessons of ADR’, Texas International Law
Journal, 40 (2005), 451; G. Sauser-Hall, ‘L’arbitrage de droit international privé’, in Institut de Droit
International (ed.), Annuaire de l’institut de droit international, vol. 44(1) (Bâle, 1952), 471;
P. Schlosser, Das Recht der internationalen privaten Schiedsgerichtsbarkeit (Mohr Siebeck, 1989),
40; M. F. Surville, ‘Jurisprudence francaise en matière de droit international’, Revue critique de
législation et de jurisprudence, 29 (1900), 129.

human ri ghts in i nternational arbitration 161
a minimum protection of the basic rights of human beings and legal persons, arbitra-
tion laws and international instruments can be – and indeed have to be – interpreted
and applied in accordance with the international human rights framework.136
In summary, if one accepts the constitutional framework of international human
rights, then arbitration works within it. Also, it is not contrary to human rights but
can be compatible and even human rights-furthering.
6.4 Relevant Human Rights Norms in International Arbitration

6.4.1 Commercial Arbitration
The most important human rights in international commercial arbitration are fair
hearing rights.137 Fair trial rights are guaranteed in Article 14 of the ICCPR, Article 6
of the ECHR, Article 8 of the ACHR, and Article 7 of the ACHPR. It is generally
accepted that procedural rights are customary international law or general principles
of international law.138 Article 10 of the UDHR reads as follows:
Everyone is entitled in full equality to a fair and public hearing by an independ-
ent and impartial tribunal, in the determination of his rights and obligations . . .
Fair trial rights intend to guarantee both access to justice and fairness during the
proceedings.139 Fair trial rights touch upon a variety of issues in the process of arbitra-
tion. Some of the most important guarantees are the right to be heard, the right to an
impartial tribunal, and equality of treatment.140 In the course of arbitral proceedings,
interference with fair trial rights may, inter alia, occur where the tribunal sets too short
deadlines, refuses to admit evidence, runs the proceedings in a language unknown to
one of the parties or its lawyers, or where the arbitral award does not provide reasons.141
International arbitral proceedings are, in many respects, different from national
judicial proceedings. The parties’ exercise of their right to Handlungsfreiheit, i.e., to be
free to determine the arbitral process, has to be balanced against the right to a fair trial.142
As the US Supreme Court put it in Mitsubishi. v. Soler Chrysler-Plymouth, a party ‘trades
the procedures and opportunity for review of the courtroom for the simplicity,
136
Benedettelli, ‘Human Rights as a Litigation Tool in International Arbitration’ (2015), 642.
137
N. McDonald, ‘More Harm than Good? Human Rights Considerations in International
Commercial Arbitration’, Journal of International Arbitration, 20 (2003), 523.
138
See M. Emberland, ‘The Usefulness of Applying Human Rights Arguments in International
Commercial Arbitration’, Journal of International Arbitration, 20 (2003), 357 et seq.
139
Emberland, ‘Usefulness of Applying Human Rights Arguments in Arbitration’ (2003), 356.
140
Articles 14, 26 of the ICCPR; Benedettelli, ‘Human Rights as a Litigation Tool in International
Arbitration’ (2015), 646.
141
For further examples, see Benedettelli, ‘Human Rights as a Litigation Tool in International
Arbitration’ (2015), 647 et seq.; but see also, for example, A. Bjorklund and B. Jarvis, ‘Country
Report: Canada’, in F. Ferrari et al. (eds.) Due Process as a Limit to Discretion in International
Commercial Arbitration (Kluwer, 2020), 91, who observed that Canadian court decisions finding
a breach of due process are rare in recognition and enforcement proceedings related to foreign
awards (at 99).
142
Cf. Benedettelli, ‘Human Rights as a Litigation Tool in International Arbitration’ (2015), 646
et seq.

informality, and expedition of arbitration’.143 By agreeing to arbitration as a dispute

settlement mechanism, the parties principally waive their right to have their case heard
by a state court.144 In Tabbane v. Switzerland, the ECtHR held that parties could waive
their rights to challenge an arbitral award if such an agreement is freely consented to, if it
is unequivocal, and if the waiver is otherwise lawful.145 Furthermore, by entering into an
arbitration agreement, the parties waive their right to a public hearing in the course of the
arbitration.146 However, in Suovaniemi v. Finland, the ECtHR clarified that a waiver of
all fair trial rights in Article 6 of the ECHR is not permissible:147
There is no doubt that a voluntary waiver of court proceedings in favour of
arbitration is in principle acceptable from the point of view of Article 6 . . . Even
so, such a waiver should not necessarily be considered to amount to a waiver of
all the rights under Article 6 . . . [A]n unequivocal waiver of Convention rights is
valid only insofar as such waiver is ‘permissible’. Waiver may be permissible with
regard to certain rights but not with regard to certain others. A distinction may
have to be made even between different rights guaranteed by Article 6.
There are essential aspects of the right to a fair trial, such as impartiality of the
tribunal and fair proceedings where a waiver is inadmissible.148 Furthermore, the
described principles are largely based on the fact that the parties agreed to resolve their
dispute before an arbitral tribunal. In cases of compulsory arbitration, the arbitral
tribunal is bound to observe all guarantees laid down in Article 6 of the ECHR.149
Besides fair trial rights, there are also a number of other human rights that may
play a role in international commercial arbitration. Marius Emberland points out
that ‘freedom of expression, the basic concept of legality, privacy rights and property
rights’ can become relevant.150 These rights might become important regarding the
merits of the arbitration where human rights norms cannot only be directly applic-
able to the legal relations between private parties151 but are also regularly applied
143
US Supreme Court, Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., Decision,
2 July 1985, 473 US 614.
144
ECtHR, Tabbane v. Switzerland, App no. 41069/12, para. 25.
145
ECtHR, Tabbane v. Switzerland, App no. 41069/12; ECtHR, Suda v. Czech Republic, App
no. 1643/06, para. 48.
146
ECtHR, Suovaniemi and others v. Finland, Decision as to Admissibility, 23 February 1999, App
no. 31737/96; see also European Commission of Human Rights (EComHR), Lars Bramelid and
Anne-Marie Malmstrom v. Sweden, Report, 12 December 1983, (1982) 29 DR 64.
147
Cf. ECtHR, Suovaniemi v. Finland, App no. 31737/96.
148
Cf. J. Münch, ‘Schiedsverfahren mit Verzicht auf Staatskontrolle – zum Residualschutz der Fair-
Trial-Maxime’, Zeitschrift für Schiedsverfahren (German Arbitration Journal), 15 (2017), 116.
Compare ECtHR, Tabbane v. Switzerland, App no. 41069/12.
149
ECtHR, Tabbane v. Switzerland, App no. 41069/12, para. 26; see also ECtHR, Lithgow and Others
v. The United Kingdom, Judgment, 8 July 1986, (1986) 8 EHRR 329; EComHR, R. v. Switzerland,
Report, (1987) 51 DR 93; ECtHR, Suda v. Czech Republic, App no. 1643/06.
150
Emberland, ‘Usefulness of Applying Human Rights Arguments in Arbitration’ (2003), 356.
151
For many, see, for example, CJEU, Association de Médiation Sociale v. Union Locale des
Syndicates et al., Judgment, 15 January 2014, Case no. C-176/12, para 42: ‘it is settled case-law
that the fundamental rights guaranteed in the legal order of the European Union are applicable in
all situations governed by European Union law’. General discussion: V. Trstenjak and
P. Weingerl, The Influence of Human Rights and Basic Rights in Private Law (Springer, 2014).

horizontally to interpret private law rules, in particular by way of general clauses

such as ‘good faith’ or ‘good morals’.152
6.4.2 Investment Arbitration

In investment arbitration, a key distinction is necessary between the rights of the
investor on the one hand (1) and the rights of the state’s citizens on the other hand (2)
and their relationship to each other in accordance with international human rights
standards, in particular the need to balance the rights of the different rights bearers (3).
Fair trial rights, as set out above, protect the parties to an investment arbitration as
much as they do the parties to an international commercial arbitration. An example of
the protection fair trial guarantees offer in investment arbitration is Article 52(1)(d) of
the Convention on the Settlement of Investment Disputes between States and Nationals
of Other States (ICSID Convention). Under Article 52(1)(d) of the ICSID Convention,
a violation of fair trial rights, for example, the right to be heard or the right to equal
treatment during proceedings, will give rise to the annulment of an award.153
6.4.2.1 The Rights of the Investor

6.4.2.1.1 The Right to Property Perhaps the most important right for investors is
the right to property.154 Until recently, it was the general opinion that a right to
property could only arise under national law.155 National constitutions and national
laws overwhelmingly protect the right to property.156 However, sweeping economic
152
Emberland also points out that the Property Claims Commission in Bosnia-Herzegovina and the
US-Iran Claims Tribunal that considered property rights cases have relied on human rights
(Emberland, ‘Usefulness of Applying Human Rights Arguments in Arbitration’ (2003), 356, 360,
361); see also G. Huscroft and P. Rishworth, Litigating Rights, Perspectives from Domestic and
International Law (Hart, 2002).
153
Cf. Ad Hoc Committee, Libananco Holdings Co. v. Republic of Turkey, Decision on the Application for
Annulment, 22 May 2013, ICSID Case no. ARB/06/8, para. 85; Ad Hoc Committee, Amco v. The
Republic of Indonesia, Decision on the Application for Annulment, 17 December 1992, ICSID Case
no. ARB/81/1, paras. 9.05–9.10 (right to be heard); Ad Hoc Committee, Wena Hotels Limited v. The
Arab Republic of Egypt, Decision on Annulment, 5 February 2002, ICSID Case no. ARB/98/4, para. 57;
N. Popov, The Effectiveness of the Grounds for the Annulment of ICSID Awards (Master’s Thesis,
University of Uppsala, 2020), ch. 5.3.; H.-T. Shin, ‘Annulment’, in M. Kinnear et al. (eds.), Building
International Investment Law: The First Fifty Years of ICSID (Kluwer, 2015), 699, 704.
154
‘And while one could argue that human rights treaties are fundamentally different from investment
treaties with regard to their purpose of the protection of individuals compared to the promotion of
friendly economic relations between two states, it should not be forgotten that a fundamental investor
right under investment treaties is the right to property, which is itself a human right, recognized in
most international human rights conventions.’ (H. E. Zeitler, ‘Cain and Abel: Congruence and
Conflict in the Application of the Denial of Justice Principle’, in S. W. Schill (ed.), International
Investment Law and Comparative Public Law (Oxford University Press, 2010), 199 et seq.).
155
J. Sparkling, ‘The Global Right to Property’, Columbia Journal of Transnational Law, 52 (2014), 464;
see also L. Valencia Rodríquez, The Right of Everyone to Own Property Alone as Well as in Association
with Others (UN Commission on Human Rights Final Report) (UN, 1993), UN Doc. E/CN.4/1994/19.
156
With regard to extensive discussions on the protection of the right to property under
national constitutions, see T. Van Banning, The Human Right to Property (Intersentia,
2002), 139–46. See also T. Allan, The Right to Property in Commonwealth Constitutions

and political changes in recent decades have laid the foundation for recognizing a global
right to property. The ideological opposition against property rights has disappeared,
with China, Russia, and other socialist states having transitioned to market economies,
which are premised on private property. In addition, the globalization of trade has
enhanced international support for protecting property rights. Furthermore, the three
regional human rights treaties (the ECHR, the ACHPR, and the ACHR) all protect
property;157 and the increasing recognition of property rights of indigenous people has
also aided a change in finding that property is a customary human right.158
Formally, the right to property is only protected in the UDHR.159 Importantly,
even though the right to property was not included in the ICCPR or the ICESCR,160
the omission did not equate to the states’ denial of the right to property. As the
Annotation to the Draft International Covenant on Human Rights clearly declares,
‘no one questioned the right of the individual to own property’.161 A close reading of
the travaux préparatoires aids the conclusion that, since the ideological obstacles
with regard to property ownership had been ‘overcome’, an International Bill of
Rights to date would include the right to property. As such, it would not only exist as
a principle in the UDHR.162 Therefore, as Golay and Cismas conclude:163
The review of provisions of international instruments, regional treaties and national
constitutions reveal the universal recognition of the human right to property. It
(Cambridge University Press, 2000), 36–82; Valencia Rodríquez, The Right of Everyone to
Own Property (1993), 64 et seq.; C. Golay and I. Cismas, Legal Opinion: The Right to
Property from a Human Rights Perspective (International Centre for Human Rights and
Democratic Development, 2010), available at http://hlrn.org/img/documents/Golay%
20Cismas%20R2Prop.pdf (last accessed 30 January 2020).
157
Section 1 of the ECHR Optional Protocol no. 1; s. 21 of the ACHPR; s. 21 of the ACHR. That
means that two-thirds of all nations are parties to regional human rights treaties that contain the
right to property.
158
With regard to countries in the European Union, see CJEU, Yassin Abdullah Kadi & Al Barakaat
International Foundation v. European Commission, Judgment, 3 September 2008, Case nos.
C-402/05 P and C-415/05 P, [2008] ECR I-06351, 355.
159
Article 17 of the UDHR: ‘(1) [e]veryone has the right to own property alone as well as in
association with others’ and ‘(2) no one shall be arbitrarily deprived of his property’.
160
E. Riedel, Theorie der Menschenrechtsstandards (Duncker & Humblot, 1986), 39, concludes
that the travaux préparatoires indicate that the non-inclusion of property rights in both
covenants originated in the antagonistic ideological views of the Western and Eastern blocs,
as well as those of the North and South. See also Sparkling, ‘Global Right to Property’ (2014),
469; J. Mchangama, ‘The Right to Property in Global Human Rights Law’, Cato Policy
Report, 33(3), 2011.
161
See UN Docs. E/CN.4/SR.230-32; E/CN.4/SR.302, 303; E/CN.4/SR.413-8, para. 197; see also the
concern expressed in UN Doc. E/CN.4/SR.413-8, para. 198 (‘To omit [the right to property]
might create the impression that it was not a fundamental human right.’).
162
UN Docs. E/CN.4/SR.230-32; E/CN.4/SR.302, 303; E/CN.4/SR.413-8, paras. 197–212.
163
Golay and Cismas, ‘The Right to Property from a Human Rights Perspective’ (2010); see also
Sparkling, ‘Global Right to Property’ (2014), who extensively and in detail discusses the right to
property as a right recognized as international law. Denying the ius cogens quality of the right to
property, see J. A. Kämmerer, ‘Der Schutz des Eigentums im Völkerrecht’, in O. Depenheuer
(ed.), Eigentum – Ordnungsidee, Zustand, Entwicklungen (Springer, 2005), vol. II, 131, available
at www.unitrier.de/fileadmin/fb5/inst/IRP/Bitburger_Gespraeche_Einzeldokumente/
BitburgerGespr_2004_I_Kaemmerer_151_175_geschuetzt.pdf (last accessed 30 January 2020).

appears that generalized and consistent State practice and opinio juris reflect the
customary nature of the first paragraph of Article 17 of the UDHR ‘everyone has the
right to own property alone as well as in association with others’.
As a customary international human right, the right to property protects the eco-
nomic interests of individuals and legal persons with regard to direct, and importantly,
also de facto, expropriation. The right to property also protects against the curtailment of
the use and enjoyment of property,164 as well as the physical assets of investors and their
intangible assets. Importantly, the right to property also protects business operations,
including legitimate expectations regarding the business operation.165
6.4.2.1.2 The Ambit of the Right to Property An important question is what the
right to property entails. Any attempt to discuss the ambit of the right to property in
a comprehensive manner would go well beyond the scope of this chapter.166 The
following section sets out the basic features of the ambit of the right to property. The
UN General Assembly has stated that the right to property extends to both
‘[p]ersonal property, including the residence of one’s self and family’167 and ‘[e]
conomically productive property, including property associated with agriculture,
commerce and industry’.168 In the absence of the right to property being stipulated
by the ICCPR, the Human Rights Committee has not dealt with the right directly.169
The IACtHR and the ECtHR, on the other hand, have filled the relative void under
164
See ECtHR, Factsheet – Companies: Victims or Culprits (March 2013); U. Kriebaum and C. Schreuer,
‘The Concept of Property in Human Rights Law and International Investment Law’, in
S. Breitenmoser et al. (eds.), Human Rights, Democracy, and the Rule of Law: Liber Amicorum
Luzius Wildhaber (DIKE, 2007), available at www.univie.ac.at/intlaw/wordpress/pdf/88_concept_
property.pdf (last accessed 31 January 2020) (discussing the differences between investment law and
human rights law in regard to the issues arising in the limitation of the investor’s economic interest.
However, the different treatment does not necessitate a different outcome with regard to protection).
165
See ECtHR, Pine Valley Developments Ltd v. Ireland, Judgment, 29 November 1991, A 222 (1991);
J. Sparkling, The Global Right to Property (Oxford University Press, 2014), ch. 11.
166
See, for example, M. Sasson, ‘From Property to Investment’, in M. Sasson (ed.), Substantive Law
in Investment Treaty Arbitration: The Unsettled Relationship between International Law and
Municipal Law, 2nd ed. (Kluwer, 2017), 101; U. Kriebaum, Eigentumsschutz im Völkerrecht
(Duncker & Humblot, 2008); T. Van Banning, The Human Right to Property (Intersentia, 2002);
R. Dolzer, Eigentum, Enteignung und Entschädigung im geltenden Völkerrecht (Springer, 1985);
A. A. Berle, ‘Property, Production and Revolution’, Columbia Law Review, 6 (1965), 1; generally,
F. C. von Savigny, Das Recht des Besitzes (Heyer, 1803).
167
UN General Assembly, Resolution on Respect for the Right of Everyone to Own Property
Alone as Well as in Association with Others and Its Contribution to the Economic and
Social Development of Member States, 14 December 1990, UN Doc. A/RES/45/98, para. 3.
168
UN General Assembly, Resolution on Respect for the Right of Everyone to Own Property,
14 December 1990, UN Doc. A/RES/45/98, para. 3.
169
The Human Rights Committee dealt with the right to property in the negative. For example, UN
Human Rights Committee, Kéténguéré Ackla v. Togo, Views of the Human Rights Committee,
25 March 1996, Comm no. 505/1992, UN Doc. CCPR/C/51/D/505/1992, para. 6.3 (‘[T]he
Committee noted that, irrespective of the fact that the confiscation took place prior to the date
of entry into force of the Optional Protocol for Togo, the right to property was not protected by
the Covenant. Accordingly, the Committee decided that this claim was inadmissible ratione
materiae, under article 3 of the Optional Protocol.’).

166 p et r a b ut le r
their respective covenants.170 According to their jurisprudence, the right to property

encompasses a wide range of economic interests, such as movable and immovable
property; tangible and intangible interests, such as shares, an arbitration award, and
intellectual property;171 pension rights;172 a business operation;173 a customer
base;174 vested, asset like, rights;175 a licence or concession176 and the right to
exercise a profession.177 Importantly, the ECtHR has extended the concept of
protected property to rights arising from contracts and other types of claims,178
including, for example, claims to restitution under national law.179 Furthermore, the
court has held that a legitimate expectation of a property right is protected under
Article 1(1) Optional Protocol to the ECHR. What is not protected is the right or
guarantee to acquire property in the future.180 It is undisputed that the right to
property protects the rights bearer from the direct expropriation of their property.181
Rights bearers are also protected from a de facto deprivation of property.182
170
With regard to an overview of the jurisprudence of the ECtHR, see Ruiz Fabri, ‘Approach Taken
by the European Court of Human Rights to the Assessment of Compensation’ (2012), 148; with
regard to the jurisprudence of the IACtHR, see L. Burgorgue-Larsen and A. U. De Torres, The
Inter-American Court of Human Rights (Oxford University Press, 2011).
171
ECtHR, Lithgow v. United Kingdom, (1986) 8 EHRR 329; IACtHR, Ivcher Bronstein Case,
Judgment, 6 February 2001, Series C No. 74, available at www.umn.edu/humanrts/iachr/C/74-
ing.html (last accessed 31 January 2020); IACtHR, Palamara-Iribarne v. Chile, Merits,
Reparations, and Costs, 22 November 2005, Series C No. 135, para. 96; IACtHR, Salvador
Chiriboga v. Ecuador, Preliminary Objections and Merits, 6 May 2008, Series C No. 179.
172
ECtHR, Azinas v. Cyprus, Decision on Admissibility and Merits, 28 April 2004, App no. 56679/
00; IACtHR, Torres Benvenuto et al. v. Peru (Five Pensioners Case), Judgment, 28 February 2003,
Series C No. 98; IACtHR, Acevedo Buendía et al. (Discharged and Retired Employees of the Office
of the Comptroller) v. Peru, Preliminary Objection, Merits, Reparations, and Costs, 1 July 2009,
Series C No. 198, para. 80–91.
173
ECtHR, Van Marle and others v. Netherlands, Judgment, 26 June 1986, (1986) 8 EHRR 483.
174
ECtHR, Latridis v. Greece, Judgment, 25 March 1999, App no. 31107/96.
175
ECtHR, Holy Monasteries v. Greece, Judgment, 21 November 1994, (1995) 20 EHHR 1.
176
ECtHR, Tre Traktörer AB Garamond v. Sweden, Judgment, 7 July 1989, (1989) 13 EHRR 309,
para. 53; ECtHR, Fredin v. Sweden, Judgment, 18 February 1991, (1991) 13 EHRR 784.
177
EComHR, Gospodinova v. Bulgaria, Decision on Admissibility, 16 April 1998, App no. 37912/97;
ECtHR, Jantner v. Slovakia, Judgment, 4 March 2003, App no. 39050/97, para. 34; ECtHR, Kopecký
v. Slovakia, Judgment, 28 September 2004, (2004) 41 EHRR 43, para. 35; ECtHR, von Maltzan et al.
v. Germany, Decision on Admissibility, 2 March 2005, App nos. 71916/01, 71917/01, 10260/02,
para. 74.
178
Compare, for example, ECtHR, Pressos Compania Naviera SA v. Belgium, Judgment, 28 October
1995, (1995) 21 EHHR 301 (tort claim); M. Carss-Frisk, The Right to Property: A Guide to the
Implementation of Article 1 of the Protocol No. 1 to the European Convention on Human Rights
(Council of Europe, 2001), para. 29 et seq.
179
Compare, for example, ECtHR, Kirilova and Others v. Bulgaria, Judgments, 9 June 2005,
14 June 2007, 14 September 2007, App nos. 42908/98, 44038/98, 44816/98 and 7319/02.
180
ECtHR, Marckx v. Belgium, Judgment, 13 June 1979, (1979) 2 EHRR 330; EComHR, X v. the
Federal Republic of Germany, Decision, 13 December 1979, (1979) 18 DR 216.
181
Kriebaum and Schreuer, ‘The Concept of Property in Human Rights Law and International
Investment Law’ (2007), 5.
182
ECtHR, Sporrong and Lönnroth v. Sweden, Judgment, 23 September 1982, (1982) 5 EHRR 35;
Carss-Frisk, The Right to Property (2001), para. 67 et seq.

6.4.2.1.3 Other Rights of the Investor Besides the right to property, other human
rights may play a role, such as access to justice and non-discrimination. Also, rights
normally stated in BITs/FTAs, such as denial of justice, fair and equitable treatment,
and the defence of necessity, play an important role. These rights, which can be
conceptualized as specially developed ‘investor rights’, are human rights. They are
not superior to the international human rights catalogue.183 If those rights compete
with the rights of other human rights bearers, such as the people of the respective state,
then those competing rights have to be balanced.
The existence of those specially developed investor rights can be partly explained by
the history of investment protection: the lack of an overarching human rights frame-
work that also encompassed legal persons. Today a special investment protection
regime, at least in theory, is not necessary. The core rights of the investor, whether
a natural or legal person, are protected by the international human rights catalogue.
6.4.2.2 The Rights of the ‘People’184

The following citizens’ rights have been in particular claimed as being limited by
investor-state relationships, and in many cases, influence the outcome of disputes:
the right to health,185 the right to water,186 the right to a sustainable or healthy
183
There is no hierarchy regarding rights themselves: Proclamation of Teheran, Final Act of the
International Conference on Human Rights, Teheran (22 April to 13 May 1968), UN Doc. A/
CONF. 32/41, p. 3, nos. 2, 3. See K. Teraya, ‘Emerging Hierarchy in International Human Rights
and Beyond: From the Perspective of Non-Derogable Rights’, European Journal of International
Law, 12 (2001), 918; T. Meron, ‘On a Hierarchy of International Human Rights’, American
Journal of International Law, 80 (1986), 1.
184
‘People’ refers to natural and legal persons as far as the rights discussed are applicable to legal
persons.
185
The ICESCR Committee has interpreted the ‘right to health, as defined in article 12.1, as an
inclusive right extending not only to timely and appropriate health care but also to the underlying
determinants of health, such as access to safe and potable water and adequate sanitation, an
adequate supply of safe food, nutrition and housing, healthy occupational and environmental
conditions, and access to health-related education and information, including on sexual and
reproductive health. A further important aspect is the participation of the population in all
health-related decision-making at the community, national and international levels’. The right to
health encompasses the control over one’s health and body, including sexual and reproductive
freedom, and the right to be free from interference, such as the right to be free from torture, non-
consensual medical treatment and experimentation; the right to a system of health protection
which provides equality of opportunity for people to enjoy the highest attainable level of health,
including, for example, access (non-discriminatory, economic, physical, information) to func-
tioning public health and health-care facilities. Cf. UN Committee on Economic, Social and
Cultural Rights, General Comment No. 14: The Right to the Highest Attainable Standard of Health
(Article 12 of the International Covenant on Economic, Social and Cultural Rights) (UN, 2000),
UN Doc. E/C.12/2000/4, paras. 1, 8, 11. With regard to a comprehensive treatment of the right to
health, see J. Tobin, The Right to Health in International Law (Oxford University Press, 2012) and
V. Vadi, Public Health in International Investment Law and Arbitration (Routledge, 2013).
186
The right to water encompasses, inter alia, sufficient, safe, acceptable, physically accessible, and
affordable water for personal and domestic uses. States need to take steps on a non-discriminatory
basis to prevent threats to health from unsafe and toxic water conditions. See UN Committee on
Economic, Social and Cultural Rights, General Comment No. 15: The Right to Water (Articles 11 and
12 of the International Covenant on Economic, Social and Cultural Rights) (UN, 2003), UN Doc. E/

environment,187 the right of indigenous peoples to their ancestral lands,188 and the
right to development189 of citizens in the particular country.190
The right to health and the right to water are enshrined in the IBR.191 Thus,
human beings have a right to health and water notwithstanding the country in which
they live. The right to a sustainable or healthy environment and the right to
development have not found their way explicitly into the IBR. Today, both rights
are afforded at least close to customary international law status.192 The right of
C.12/2002/11, paras. 2, 8. With regard to a comprehensive treatment of the right to health, see
E. Riedel and P. Rothen (eds.), The Human Right to Water (Berliner Wissenschafts-Verlag, 2006).
187
The right encompasses the right to a non-polluted environment, which does not endanger health,
life, and development. The right also comprises the obligation of the state and the community of
states to repair any damage done by pollution. G. Durac, ‘Granting the Right to a Quality
Environment – a Premise of Sustainable Development’, Present Environment and Sustainable
Development, 9 (2015), 154; J. Lee, ‘Underlying Legal Theory to Support a Well-Defined Human
Right to a Healthy Environment as a Principle of Customary International Law’, Columbia
Journal of Environmental Law, 25 (2000), 283. For an overview of the protection of the environ-
ment in regional and domestic human rights instruments, see A. Boyle, ‘Human Rights and the
Environment: A Reassessment’, Fordham Environmental Law Review, 18 (2006), 471.
188
Article 1(1) of the UN Indigenous Peoples Declaration: ‘[i]ndigenous peoples have the right to
the lands, territories and resources which they have traditionally owned, occupied or otherwise
used or acquired’. The central right is the right to the enjoyment of ancestral lands.
M. Krephchev, ‘The Problem of Accommodating Indigenous Land Rights in International
Investment Law’, Journal of International Dispute Settlement, 6 (2015), 42; see, generally,
J. Anaya, Indigenous Peoples in International Law (Oxford University Press, 1996); IACtHR,
Sawhoyamaxa Indigenous Community v. Paraguay, Series C No. 146, para. 140.
189
Article 1(1) of the Declaration on the Right to Development (1986): ‘[t]he right to development is
an inalienable human right by virtue of which every human person and all peoples are entitled to
participate in, contribute to, and enjoy economic, social, cultural and political development, in
which all human rights and fundamental freedoms can be fully realized’. The Declaration in its
ten articles requires states to guarantee rights in a manner applicable to globalization, i.e., it
compels states to cooperate with each other to the best of their abilities and resources to achieve
development throughout the world. See, for a general discussion, D. Aguirre, The Human Right
to Development in a Globalized World (Ashgate, 2008); S. Marks et al., ‘The Role of International
Law’, in UN Human Rights, Office of the High Commissioner (ed.) Realizing the Right to
Development: Essays in Commemoration of 25 Years of the United Nations Declaration on the
Right to Development (UN, 2013), 454.
190
With regard to general criticism, see ‘Investor State Dispute Settlement – The Arbitration Game’, The
Economist (11 October 2014), available at www.economist.com/news/finance-and-economics
/21623756-governments-are-souring-treaties-protect-foreign-investors-arbitration (last accessed
30 January 2020); C. Provost and M. Kennard, ‘The Obscure Legal System that Allows
Corporations to Sue Countries’, The Guardian (10 June 2015), available at www.theguardian.com
/business/2015/jun/10/obscure-legal-system-lets-corportations-sue-states-ttip-icsid (last accessed
30 January 2020); ‘Still Not Loving ISDS: 10 Reasons to Oppose Investors’ Super-Rights in EU
Trade Deals’, Corporate Europe Observatory (14 July 2014), available at www.corporateeurope.org/
international-trade/2014/04/still-not-loving-isds-10-reasons-oppose-investors-super-rights-eu-
trade (last accessed 30 January 2020).
191
Articles 11(1), 12 of the ICESCR; in addition, the UN General Assembly recognized the right to water
and sanitation as a human right specifically in UN General Assembly, Resolution 64/292 – The
Human Right to Water and Sanitation, 64th Session, 28 July 2010 (UN GA Res no. A/RES/64/292).
192
For the right to a sustainable environment, see Lee, ‘Underlying Legal Theory to Support a Well-
Defined Human Right to a Healthy Environment’ (2000), 338; J. S. Glazebrook, ‘Human Rights
and the Environment’, Victoria University of Wellington Law Review, 40 (2009), 293; P. Taylor,

human rights in inter national arbitration 169
indigenous peoples to their ancestral lands is protected by the UN Declaration on the

Rights of Indigenous Peoples.193 The Declaration is not binding law. The formula-
tion of the rights therein, however, reflects emergent customary international law.194
It is the nature of human rights law to create obligations on the part of the state
towards those under its jurisdiction. The IBR clearly stipulates states’ obligations.
For example, Article 2(1) of the ICESCR reads as follows:
[T]o take steps, individually and through international assistance and co-
operation, especially economic and technical, to the maximum of its available
resources, with a view to achieving progressively the full realization of the rights
recognized in the present Covenant by all appropriate means, including particu-
larly the adoption of legislative measures.
Article 2(1) of the ICESCR compels the community of states to work towards
attaining the best standard of health possible for its citizens. It also requires every
state to make every effort to provide sufficient clean water. Of particular interest are
the states’ obligations with regard to the right to development. The right to develop-
ment encapsulates a resonance of the core principles of all human rights, including,
primarily, equity, non-discrimination, active and meaningful participation, account-
ability, and transparency.195 For the right to be effective, another core part of the
right to development is that states have a duty by themselves, and in conjunction
with the community of states, to accomplish the utmost possible within their
available resources to attain the highest level of development not only in their
‘From Environmental to Ecological Human Rights: A New Dynamic in International Law?’,

Georgia International Environmental Law Review, 10 (1997), 309. For the right to development,
see I. Bunn, ‘The Right to Development: Implications for International Economic Law’, American
University International Law Review, 15 (2000), 1436. It also should be noted that, due to the fact
that human rights law establishes a responsibility on the part of the state towards those under its
jurisdiction, and not solely an obligation between states, the restatement has drawn a subtle
distinction between the manner in which customary human rights law is established and that
which creates customary international law in general. Restatement (Third) of Foreign Relations
Law § 701 (1987), Reporter’s Note 2, allowing for a generous interpretation regarding the finding
of customary human rights norms.
193
UN General Assembly, UN Declaration on the Rights of Indigenous Peoples, 13 September 2007,
UN Doc. A/61/L.67/Add.1.
194
Krephchev, ‘The Problem of Accommodating Indigenous Land Rights’ (2015), 52 et seq.; see also
J. Anaya and S. Wiessner, ‘The UN Declaration on the Rights of Indigenous Peoples: Towards
Re-Empowerment’, Jurist (3 October 2007), available at www.jurist.org/forum/2007/10/un-
declaration-on-rights-of-indigenous.php (last accessed 30 January 2020). With regard to the
general application under the American Convention on Human Rights, see Inter-American
Commission on Human Rights, Indigenous And Tribal Peoples’ Rights over Their Ancestral
Lands and Natural Resources – Norms and Jurisprudence of the Inter-American Human Rights
System (Organization of American States, 2010), OEA/Ser.L/V/II. Doc. 56/09, available at www
.oas.org/en/iachr/indigenous/docs/pdf/AncestralLands.pdf (last accessed 30 January 2020).
195
See UN Commission on Human Rights, Report of the Working Group on the Right to
Development on Its Fifth Session (UN, 2004), UN Doc. E/CN.4/2004/23, para. 43(a); UN
Commission on Human Rights, Report of the Working Group on the Right to Development on
Its Sixth Session (UN, 2005), UN Doc. E/CN.4/2005/25, para. 42; UN Commission on Human
Rights, Report of the Working Group on the Right to Development on Its Seventh Session (UN,
2006), UN Doc. E/CN.4/2006/26, paras. 31, 40, 46, 67(g).

respective states but also globally.196 The same is true for the right to a sustainable
and healthy environment.197
Even though there is no unified global understanding of whether and how an
individual can assert the rights to health, water, a healthy environment and devel-
opment, there is no doubt that, with regard to those rights, it is the state’s and the
community of states’ obligation to constantly work towards the highest fulfilment
and execution of those rights for their citizens and the global citizenry.
The right of indigenous peoples to their ancestral land is different from the other
rights discussed, as it is first and foremost a negative right. It obligates the states,
which are the home of indigenous peoples, to provide them with the protection not
to be deprived of their land.198 It does not compel the particular state to progres-
sively attain their ancestral land, nor does the right require states to work as the
community of states to attain those rights.
In summary, the human rights at play on the side of the state’s people are the
rights to health, water, a healthy environment, and development. It is generally
recognized that, with regard to those rights, states have an obligation to safeguard
their citizens against human rights abuses,199 including those of (transnational)
corporations.200 In particular, they are commissioned to work as part of the com-
munity of states towards the highest possible attainment of the fulfilment of those
rights. The right of indigenous peoples to their ancestral lands has been
196
I. Salama, ‘The Right to Development at 25: Renewal and Achievement of its Potential’, in UN
Human Rights, Office of the High Commissioner, Realizing the Right to Development (2013), 486.
197
Lee, ‘Underlying Legal Theory to Support a Well-Defined Human Right to a Healthy
Environment’ (2000), 338; see also Art. 22 of the UN Draft Declaration on Human Rights and
the Environment, Annex I (6 July 1994), UN Doc. E/CN.4/Sub.2/1994/9: ‘[a]ll States shall respect
and ensure the right to a secure, healthy and ecologically sound environment. Accordingly, they
shall adopt the administrative, legislative and other measures necessary to effectively implement
the rights in this Declaration’.
198
Compare IACtHR, Kaliña y Lokono v. Suriname, Judgment, 25 November 2015, available at www
.corteidh.or.cr/docs/casos/articulos/seriec_309_esp.pdf (last accessed 30 January 2020). The
IACtHR found that Suriname had violated Article 3 of the ACHR by failing to recognize the
collective legal personality asserted by the indigenous and tribal people in this case. It further
noted that the lack of demarcation, delimitation, and failure to award the legal title of the territory
of Kaliña and Lokono violated the villagers’ collective right to property recognized under Article
21 ACHR, see IACtHR, The Ituango Massacres v. Colombia, Judgment on Preliminary
Objections, Merits, Reparations, and Costs, 1 July 2006, Series C No. 148, paras. 169–200 (The
court concluded that the state violated Art. 21 (right to property) to the detriment of the fifty-
nine victims because its agents had collaborated with the paramilitary group to destroy the
victims’ homes and steal their livestock, unlawfully depriving them of their property).
199
For more details on how to balance foreign investment with the state’s commitments under the
ICCPR and especially ICECR (for example, right to water), see H. Chen, ‘The Human Right to
Water and Foreign Investment: Friends or Foes?’, Water International, 40 (2015), available at
www.tandfonline.com/doi/abs/10.1080/02508060.2015.1012784 (last accessed 30 January 2020).
200
UN Human Rights Council, Business and Human Rights: Mapping International Standards of
Responsibility and Accountability for Corporate Acts (UN, 2007), UN Doc. A/HRC/4/035, para.
19 (prepared by J. Ruggie): ‘the state duty to protect against non-state abuses is part of the
international human rights regime’s very foundation. The duty requires states to play a key role
in regulating and adjudicating abuse by business enterprises or risk breaching their international
obligations’.

huma n rig ht s in int e rnat ional a rb itr at ion 171
conceptualized as a negative right, thought of as rooted in the right to property. Its

justiciability is unquestioned.201
6.4.2.3 Balancing the Rights

Balancing the rights of the state’s people and the rights of the investor must
accord with accepted human rights standards. Human rights jurisprudence
should be used to inform the interpretation of the typical investment treaty
guarantees, such as fair and equitable treatment and denial of justice. These
concepts have to be in line with the minimum guarantees of accepted human
rights jurisprudence, i.e., with the UN Human Rights Committee’s interpret-
ation of Article 14(1), 26 ICCPR. Of course, tribunals are free to develop more
extensive ambits.
It is not sufficient if tribunals simply state that international human rights law
is binding on the state. In addition to internally accepted limitations on a right,
the commonly used analytical framework to balance the rights of human rights
holders is proportionality.202 The human rights framework demands a balancing
of the investor’s human rights with the human rights of the state’s people,203 i.e.,
the state’s right to make public policy decisions to safeguard its people’s ’ human
rights.204 As stated above, under section 6.2.4.1.2, the proportionality analysis is
circumscribed by the principle embodied in the margin of appreciation doctrine.
Considering that contracting states are sovereign entities that decide how to
implement their obligations under human rights law, the outcome of a case
most often depends on the extent of the ‘margin of appreciation’ or deference
afforded to the state.205 An important aspect of the margin of appreciation
doctrine is the understanding that the legislative, executive, and judicial organs
of a state operate in conformity with the rule of law and human rights, and that
their assessment and presentation of the national situation in cases that go to
arbitration can be relied upon.206 This should mean that the arbitral tribunal
cannot second-guess the motivation of the state.
201
For example, IACtHR, Kaliña y Lokono v. Suriname; IACtHR, Sawhoyamaxa Indigenous
Community v. Paraguay, Series C No. 146, para. 113(a); IACtHR, Yakye Axa Indigenous
Community v. Paraguay, Judgment on Merits, Reparations and Costs, 17 June 2005, Series
C No. 125, para. 157(c).
202
203
For example, this was done in Arbitral Tribunal established under Art. XI of the
Agreement on the Reciprocal Promotion and Protection of Investments between Spain
and the United Mexican States/ICSID Additional Facility Rules, Técnicas Medioambientales
Tecmed, S.A. v. The United Mexican States, Award, 29 May 2003, ICSID Case no.
ARB(AF)/00/2; ICSID Tribunal, LG&E v. Argentina, Award, 3 October 2006, ICSID Case
no. ARB/02/1; ICSID Tribunal, Continental Casualty Co. v. Argentina, Award,
5 September 2008, ICSID Case no. ARB/03/9.
204
See Butler, ‘Is Investor-State Arbitration the Big Bad Wolf?’ (2017), 354.
205
See ECtHR, Lithgow v. United Kingdom, (1986) 8 EHRR 329, para. 194; Benedettelli, ‘Human
Rights as a Litigation Tool in International Arbitration’ (2015), 648.
206
See D. Harris et al., Law of the European Convention on Human Rights, 2nd ed. (Oxford
University Press, 2009), 14.

6.5 Applying International Human Rights Law in Arbitration

Since international arbitration is part of the international law realm, the following
examines how the international human rights catalogue impacts international arbi-
tration in practice.

By including an arbitration clause in their contracts, commercial parties do not
waive their fair trial rights.207 They just decide to resolve their disputes by different
means of dispute resolution.
Traditionally, human rights are perceived as safeguards of individuals against state
authorities.208 In international commercial arbitration, private parties are bringing their
dispute before a non-state tribunal. Why then, should human rights be taken into
account? First of all, arbitral tribunals are ‘not acting in a legal vacuum’.209 It would be
a misconception to think that state authorities are not involved. On the recognition and
enforcement level, it is ultimately up to state courts and agencies to give effect to arbitral
awards. These state parties are bound by international human rights law, and they are
prohibited to enforce awards that violate human rights.210 The arbitral tribunal, on the
other hand, would infringe its obligation towards the parties if it rendered an unenforce-
able award.211 Within the framework of the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (1958) (New York Convention),212 recog-
nition and enforcement of an arbitral award may be refused, inter alia, if the competent
authority in the country where recognition and enforcement is sought finds that: ‘[t]he
party against whom the award is invoked was not given proper notice of the appoint-
ment of the arbitrator or of the arbitration proceedings or was otherwise unable to
present his case’ (Article V(1)(b)) or ‘[t]he recognition or enforcement of the award
would be contrary to the public policy of that country’.213 What exactly constitutes public
policy is discussed in Chapter 49 of this Compendium.214 For the purposes of this
207
They do, however, waive some aspects of the right to a fair trial, such as the right to a public
hearing. See Benedettelli, ‘Human Rights as a Litigation Tool in International Arbitration’ (2015),
646 et seq.
208
Benedettelli, ‘Human Rights as a Litigation Tool in International Arbitration’ (2015), 638.
209
P. Lalive, ‘Transnational (or Truly International) Public Policy and International Arbitration’, in
P. Sanders (ed.), Comparative Arbitration Practice and Public Policy in Arbitration (ICCA
Congress Series No. 3) (Kluwer, 1986), 302.
210
EComHR, Jakob Boss Söhne KG v. Germany (1991) 51 DR 83: ‘The courts thereby exercised
a certain control and guarantee as to the fairness and correctness of the arbitration proceedings
which they considered to have been carried out in conformity with fundamental rights and in
particular with the right of the applicant company to be heard’; see also Benedettelli, ‘Human
Rights as a Litigation Tool in International Arbitration’ (2015), 642.
211
Cf. Benedettelli, ‘Human Rights as a Litigation Tool in International Arbitration’ (2015), 657.
212
For an in-depth discussion of the New York Convention, see, in this Compendium, F. Gélinas,
Chapter 4 – ‘The Legal Sources of Arbitration: Toward a Unified International Framework?’
213
Article V(2) of the New York Convention.
214
L. J. Silberman and R. U. Hess, Chapter 49 – ‘Enforcement of Arbitral Awards Set Aside or
Annulled at the Seat of Arbitration’.

Chapter, it is suffice to note that even the proponents of the most narrow view on
what constitutes public policy hold that fundamental principles, pertaining to
justice or morality, define public policy under Article V(2)(b) of the New York
Convention.215 Examples of fundamental principles given by the ILA Committee
are the prohibition of the abuse of rights, such as expropriation without compen-
sation, and the fundamental procedural principle of the impartiality of the tribu-
nal, i.e., a core fair trial right.216
Article V(1)(b) of the New York Convention protects procedural fairness,217
which is also protected by the fair trial rights in the IBR.218 The fundamental
principles identified by the ILA Recommendations and the treatment of public
policy in awards and the literature,219 even though not specifically referring to the
international human rights catalogue, broadly correspond to the core of rights set
out in the catalogue, such as a minimum standard of the parties’ rights in regard to
due process.
Since, as set out earlier in this Chapter, the international human rights catalogue
is the globally accepted minimum protection of the rights of natural and legal
persons, courts can and should have regard to human rights jurisprudence and
literature when determining, for example, public policy under Article V(2)(b) of the
New York Convention. Given that the jurisprudence under Article V(2)(b) already
takes account of those minimum standards in practice, the international human
rights catalogue will be particularly useful when the fundamental principle is estab-
lished, but its exact content needs to be determined. It also means that courts in
countries that have not ratified the New York Convention can and should apply
those minimum standards of protection, albeit based on the enforcement of cus-
tomary human rights protection.
However, using the international human rights catalogue to help to shape public
policy or the meaning of ‘unable to present his case’ under Article V(1)(b) will not
automatically achieve a unified standard. As set out earlier, states have a ‘margin of
appreciation’ when applying human rights.220
215
P. Mayer and A. Sheppard, ‘Final ILA Report on Public Policy as a Bar to Enforcement of
International Arbitration Awards’, Arbitration International, 19 (2003), 249, 253, recommenda-
tion 1(c); the Committee endorses Judge Joseph Smith’s definition of public policy under the
New York Convention in US Court of Appeals, Second Circuit, Parsons & Whittemore Overseas
Co. v. Societe Generale de L’Industrie du Papier, Decision, 23 December 1974, 508 F. 2d 969, in
which he stated that enforcement of a foreign award should be denied ‘only where enforcement
would violate the forum State’s most basic notions of morality and justice’; see also R. Wolff in
R. Wolff (ed.), New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards: A Commentary (Beck, 2012), para. 493 et seq.
216
Mayer and Sheppard, ‘Final ILA Report on Public Policy as a Bar to Enforcement’ (2003), 249,
255, 256, recommendation 1(e).
217
Born, International Commercial Arbitration (2014), vol. III, 3494.
218
UN Human Rights Committee, General Comment no. 32, Article 14: Right to Equality before
Courts and Tribunals and to a Fair Trial (UN, 2007), UN Doc. CCPR/C/GC/32.
219
Born, International Commercial Arbitration (2014), vol. III, 3655 et seq., for an in-depth discussion
and with an overview of literature and jurisprudence.
220


6.5.2.1 Traditional Approaches
Broadly speaking, to date, three approaches have been proposed in the literature of
how tribunals can be compelled to take human rights into account.221 All
approaches are centred on the investment treaty. They have as their underlying
premise that human rights can only be taken into account if, and as far as, an
investment tribunal is allowed to consider rules of international law. They allow any
kind of human rights analysis; insofar as human rights can be placed in a particular
relationship with the investment treaty concerned.222
The first approach advanced is to draft (in the future) investment treaties that
clearly bind the parties to observe the international human rights catalogue as
a minimum standard and unmistakably state that a tribunal has to take the state’s
human rights commitments into account.223
The second and third approaches focus on the question of how human rights can
be taken into account in the interpretation of existing treaties. The second approach
promulgates a dynamic interpretation as set out by the ICJ in Kasiliki, Sedudu Island
(Botswana v. Namibia).224 Where treaties use known legal terms whose content the
221
See, for a discussion on the different approaches, D. Schneiderman, ‘On Suffering and Societal
Constitutionalism’, in T. Kahana and A. Scolnicov (eds.), Boundaries of State, Boundaries of
Rights: Human Rights, Private Actors, and Positive Obligations (Cambridge University Press,
2016), 36; also in general on the relationship between investment arbitration law and inter-
national human rights law, M. Feria-Tinta, ‘Like Oil and Water? Human Rights in Investment
Arbitration in the Wake of Philip Morris v. Uruguay’, Journal of International Arbitration, 34
(2017), 601.
222
See B. Simma, ‘Foreign Investment Arbitration: A Place for Human Rights’, International &
Comparative Law Quarterly, 60 (2011), 581 et seq.
223
Cf. Morocco-Nigeria BIT, Art. 18, discussed in Zugliani, ‘Human Rights in International
Investment Law’ (2019), 761; South African Development Community Model BIT Template
(July 2012), Art. 15, available at www.iisd.org/itn/wp-content/uploads/2012/10/sadc-model-
bit-template-final.pdf (last accessed 18 September 2020); Agreement between Canada and
the Federal Republic of Nigeria for the Promotion and Protection of Investments
(6 May 2014), which does not contain a generic reference to human rights standards but
specific clauses relating to expropriation, health and corporate social responsibility, available
at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files
/3151/download (last accessed 31 January 2020); some BITs contain references to human
rights, in particular the UDHR, in their Preamble, for example, European Union-Singapore
Free Trade Agreement (18 April 2018), Canada-Colombia Free Trade Agreement (21
Nov 2008), Norway Model BIT (2007); see also Declaration of Intent of the European
Union in Council Regulation (EC) No. 1236/2005 (27 June 2005), which states: ‘respect
for human rights and fundamental freedoms constitutes one of the principles common to
the Member States. In view of this, the Community resolved in 1995 to make respect for
human rights and fundamental freedoms an essential element of its relations with third
countries. It was decided to insert a clause to that end in any new trade, cooperation and
association agreement of a general nature that it concludes with third countries’; Simma,
‘Foreign Investment Arbitration’ (2011), 579.
224
ICJ, Kasiliki, Sedudu Island (Botswana v. Namibia), Judgment, 13 December 1999, [1999] ICJ
Rep 1045, see, for a fuller synthesis of the approach, Butler, ‘Is Investor-State Arbitration the Big
Bad Wolf?’ (2017), 357.

parties expected would change through time,225 the meaning of these terms will be
determined by reference to international law as it has evolved and stands at present,
rather than by reference to the state of the law at the time of the conclusion of the
treaty.226 The third approach is an emerging de-fragmentation technique of systemic
interpretation, which emphasizes the interpretative presumption that treaties are
intended to produce effects which accord with existing rules of international law.
The approach would see all investment treaties always interpreted in light of
international law,227 including international human rights law and its
methodology.228 On the basis of this approach, a ‘human rights friendly’ interpret-
ative approach is in the process of development.
The importance of the international human rights catalogue in the investment
arbitration space is also evidenced when examining its treatment under the ICSID
Convention, North American Free Trade Agreement (NAFTA) and the Energy
Charter Treaty.
As commentators have pointed out, under Article 42 of the ICSID Convention,
the arbitral tribunal has the mandate to apply international law, including inter-
national human rights law, not only where the parties have failed to prescribe the
applicable law but also ‘where the national law or the action taken thereunder
225
ICJ, Kasiliki, Sedudu Island, [1999] ICJ Rep 1045, 2 (Declaration of Judge Rosalyn Higgins).
226
The same technique was utilized in Arbitral Tribunal established under Art. VI of the Treaty
between the USA and the Czech and Slovak Federal Republic Concerning the Reciprocal
Encouragement and Protection of Investment/UNCITRAL Rules, Ronald Lauder v. Czech
Republic, Final Award, 3 September 2001, para. 200, available at www.italaw.com/sites/default/
files/case-documents/ita0451.pdf (last accessed 31 January 2020).
227
C. McLachlan, ‘Investment Treaty Arbitration: The Legal Framework’, in A. J. van den Berg (ed.),
50 Years of the New York Convention (Kluwer, 2009), 95, 121; Kriebaum, ‘Human Rights and
International Investment Law’ (2018), 13, 21; C. McLachlan, ‘Investment Treaties and General
International Law’, International & Comparative Law Quarterly, 57 (2008), 361; C. McLachlan,
‘The Principle of Systemic Integration in International Law’, UN Audiovisual Library of
International Law Lecture Series (UN, 2020), available at http://legal.un.org/avl/ls/
McLachlan_IL_video_1.html (last accessed 31 January 2020); A. van Aaken, ‘Fragmentation of
International Law: The Case of International Investment Law’, in T. Tiittala (ed.), Finnish
Yearbook of International Law, vol. XVII (Bloomsbury, 2006), 91; A. van Aaken,
‘Defragmentation of Public International Law Through Interpretation: A Methodological
Proposal’, Indiana Journal of Global Legal Studies, 16 (2009), 497; see also A. Bjorklund, ‘The
Necessity of Sustainable Development?’, in M.-C. Cordonier Segger et al. (eds.), Sustainable
Development in World Investment Law (Kluwer, 2011), 371, examining the use of the necessity
doctrine to allow states to abrogate their obligation(s) under an investment treaty.
228
ICJ, Case Concerning Right of Passage over Indian Territory (Portugal v. India), Judgment on
Preliminary Objections, 26 November 1957, [1957] ICJ Rep 142; ICJ, Corfu Channel case (UK
v. Albania), Judgment, 9 April 1949, [1949] ICJ Rep 104; see also Butler, ‘Is Investor-State
Arbitration the Big Bad Wolf?’ (2017), 357. See, for a critique of this approach regarding the
effective safeguarding of human rights, Schneiderman, ‘On Suffering and Societal
Constitutionalism’ (2016), 25, 37, 38. That a systemic interpretation approach did not help the
tribunal in ICSID Tribunal, Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia
Ur Partzuergoa v. The Argentine Republic, Award, 8 December 2016, ICSID Case no. ARB/07/26,
to come to a human rights consistent approach despite one of the main protagonists sitting on
the tribunal indicates that the criticism is justified.

violates international law’.229 Reisman states the consequence of Article 42(1) of the
ICSID Convention as:230
An ICSID Tribunal, operating under an international treaty, is an organ of
international law and it cannot be imagined that it would give effect to arrange-
ments or procedures that violate fundamental international law norms or shock
the conscience of the world.
Reisman identified Articles 6 (right to life), 7 (freedom from torture and cruel,
inhuman or degrading treatment or punishment), 8(1) (freedom from slavery), 8(2)
(freedom from servitude), 11 (no imprisonment for failing contractual obligations),
15 (nulla poena sine lege), 16 (recognition as a person), and 18 (freedom of thought,
conscience, and religion) of the ICCPR as human rights norms to which a tribunal
had to give effect. Reisman’s identification of those particular ICCPR rights over fifty
years ago translates today, as set out under section 6.2.2.3 in this chapter, as
a tribunal having to give effect to the accepted international human rights catalogue.
Equally, tribunals established under NAFTA and the Energy Charter Treaty are
organs of international law. They, too, have to give effect to fundamental inter-
national law norms, including the international human rights catalogue. Article
1131 of NAFTA231 and Article 26(6) of the Energy Charter Treaty even mandate
the application of international law, in addition to the parties’ law of choice in the
contract.232 Under all three approaches, the investment arbitration tribunal has to
take account of human rights in its decision-making process. The difference between
them is how direct the mandate for the application of human rights is in the process.
In the following, the Chapter proposes an approach which gives human rights
a principled, generic, and explicit role in investment arbitration and which, in the
author’s view, deals best with the ‘widespread sentiment that the integration of the
law of human rights into international investment law is an important concern’.233
229
Broches, ‘The Convention on the Settlement of Investment Disputes Between States and the
Nationals of Other States’ (1967), 12, 16–7; Gaillard and Banifatemi take a more expansive view
on the role of international law under Art. 42: E. Gaillard and Y. Banifatemi, ‘The Meaning of
“and” in Article 42(1), Second Sentence, of the Washington Convention: The Role of
International Law in the ICSID Choice of Law Process’, ICSID Review, 18 (2003), 397; see also
Dupuy, ‘Unification Rather than Fragmentation of International Law?’ (2009), 56, 57. See, for an
in-depth discussion in this Compendium, A. Bjorklund and L. Vanhonnaeker, Chapter 19 –
Applicable Law in International Investment Arbitration.
230
Reisman, ‘The Regime for Lacunae in the ICSID Choice of Law Provision’ (2000), 377.
231
In accordance with Annex 14-C of the USA-Mexico-Canada Agreement, Art. 1131 of NAFTA
will still be relevant for legacy investments.
232
See Dupuy, ‘Unification Rather than Fragmentation of International Law?’ (2009), 56.
233
Ad Hoc Committee, Tulip Real Estate and Development Netherlands v. Turkey, Decision on
Annulment, 30 December 2015, ICSID Case no. ARB/11/28, para. 86; see also ICSID Tribunal,
EDF International, SAUR International and León Participaciones Argentina v. Argentina, Award,
11 June 2012, ICSID Case no. ARB/03/23, which did not ‘call into question the potential
significance or relevance of human rights in connection with international investment law’
(para. 912). The tribunal found, however, that human rights were not relevant to the facts of
the case.

6.5.2.2 Human Rights Centric Approach

In domestic law, the respective constitution (generally containing a human rights
catalogue) is allowed comfortably to be the overarching umbrella that gives the law
legitimacy, and it provides a framework that guides the state and its citizens in terms
of what kinds of engagements they may enter and what they are allowed to do. On
the international plane, this chapter argues that the international human rights
catalogue provides this overarching umbrella. The international human rights
catalogue umbrella sets out the paradigm in which states, arbitrators and even
investors have to operate. If states do not have to adhere to the international
human rights catalogue, then human rights protection would be illusory. The
international human rights catalogue should, therefore, be treated as fundamental
international law norms by an investment treaty tribunal to which the tribunal has to
give effect.
Article 53 of the Vienna Convention on the Law of Treaties (1969) provides that ‘a
treaty is void if, at the time of its conclusion, it conflicts with a peremptory norm of
general international law’. The general principle that is extrapolated is that domestic,
as well as international law, follows a hierarchy whereby treaty obligations are of no
effect in the event that they conflict with a fundamental ius cogens.234 The inter-
national human rights catalogue as a whole might not have achieved ius cogens
status;235 however, it contains the globally recognized human rights. Those rights are
the foundation of the global order and are therefore also the basis for investment
treaties. International investment law itself cannot be blind to human rights.236 By
signing an investment treaty, a state cannot relieve itself from any human rights
obligation towards its citizens. It should not matter whether the state includes
human rights protection in those treaties or not.237 It cannot lie in the hands of
the states or the investors whether and to what extent human rights apply. The
paramountcy of human rights has also been affirmed by the IACtHR in
Sawhoyamaxa Indigenous Community v. Paraguay, particularly in the investment
treaty context.238 Paraguay argued that it was precluded from giving effect to the
234
L. E. Peterson and K. R. Gray, International Human Rights in Bilateral Investment Treaties and in
Investment Treaty Arbitration (International Institute for Sustainable Development Research
Paper no. 18) (International Institute for Sustainable Development, 2004), available at www
.iisd.org/pdf/2003/investment_int_human_rights_bits.pdf (last accessed 31 January 2020).
235
See the discussion regarding the ius cogens of human rights norms and its significance for the
interpretation of BITs in Balcerzak, Investor-State Arbitration and Human Rights (2017),
156, 157.
236
F. Balcerzak, ‘Jurisdiction of Tribunals in Investor-State Arbitration and the Issue of Human
Rights’, ICSID Review, 29 (2014), 216, VI, available at https://academic.oup.com/icsidreview/
article/29/1/216/2356645/Jurisdictionof-Tribunals-in-Investor-State (last accessed 31 January
2020); see Broches, ‘The Convention on the Settlement of Investment Disputes Between States
and the Nationals of Other States’ (1967), 12, 16–17; Reisman, ‘The Regime for Lacunae in the
ICSID Choice of Law Provision’ (2000), 377.
237
The state’s duty to ensure that treaties the state signs do not conflict was already expressed by the
European Commission of Human Rights in 1958 (EComHR, Decision no. 235/56, 10 June 1958,
Council of Europe (ed.), Yearbook of the European Convention on Human Rights, vol. 2
(Martinus Nijhoff, 1960), 300).
238
IACtHR, Sawhoyamaxa Indigenous Community v. Paraguay, Series C No. 146.

indigenous community’s right to property over their ancestral lands because, inter
alia, these lands belonged to a German investor protected by a BIT. The court held
that the enforcement of BITs ‘should always be compatible with the American
Convention [on Human Rights], which is a multilateral treaty on human rights
that stands in a class of its own’.239
As set out above under section 6.4.2.2, the international human rights catalogue
provides not only protection for citizens but also for the investor. Also, the arbitrator
is part of the paradigm, as Lalive so clearly pointed out:240
While he is clearly not an organ of the State, the international arbitrator is not
acting in a legal vacuum and is not called upon to decide, so to speak, as if he did
not belong to this world! The question may be raised here, in passing . . . whether
the arbitrator is not, perhaps, the organ of the international community, be it the
community of States or the ‘international community of businessmen’ (in which
more and more States and State organs appear to be active) or both international
communities.
To accept the proposed paradigm would mean that human rights, as enshrined in
the international human rights catalogue, have to be taken into account by the
arbitral tribunal whether or not there is an interpretative ‘hole’ or ‘hook’ in
the respective investment treaty. Human rights comprise the structure in which
the investment treaty is fixed and which ultimately limits it. Currently, the paradigm
suggests that human rights require a hook on which to fasten them. This new
proposed paradigm instead suggests that human rights are fastened to all treaties,
including investment treaties. Therefore, while balancing the interests of the investor
against the interests of the citizens, arbitrators not only harmonize two potentially
conflicting regimes of international law (investment law and human rights law) but,
in substance, also highlight the human dimension of investment law.241
239
IACtHR, Sawhoyamaxa Indigenous Community v. Paraguay, Series C No. 146, para. 140. But see
a number of cases concerning Argentina, where Argentina repeatedly had argued, albeit unsuc-
cessfully, that the provisions of the investment treaty in question had to adhere to the human
rights treaties it ratified. Generally, the tribunal did not even entertain the argument. See, for
example, ICSID Tribunal, CMS Gas v. Argentina, Award, 12 May 2005, ICSID Case no. ARB/01/
08, para. 114; ICSID Tribunal, Azurix v. Argentina, Final Award, 14 July 2006, ICSID Case no.
ARB/01/12, para. 254; ICSID Tribunal, Siemens v. Argentina, Award, 6 February 2007, ICSID
Case no. ARB/02/08, paras. 95, 97. Most explicitly denying the supremacy of international
human rights norms, ICSID Tribunal, Vivendi v. Argentina, Final Award, 30 July 2010, ICSID
Case no. ARB/03/19, para. 262.
240
Lalive, ‘Transnational (or Truly International) Public Policy and International Arbitration’
(1986), 302.
241
Y. Radi, ‘Realizing Human Rights in Investment Treaty Arbitration: A Perspective from Within
the International Investment Law Toolbox’, North Carolina Journal of International Law and
Commercial Regulation, 37 (2011), 1114. The human rights centric approach, even though
different since it proposes an unequivocal hierarchy of international norms, is similar to
boundary crossing: B. Kingsbury and S. Schill, ‘Investor-State Arbitration as Governance: Fair
and Equitable Treatment, Proportionality, and the Emerging Global Administrative Law’, in
B. Kingsbury et al. (eds.), El Nuevo Derecho Administrativo Global en América Latina: Desafĭos
para las Inversiones Extranjeras, La Regulaciŏn Nacional y el Financiamiento para ed Desarrollo
(Res Publica Argentina, 2009), 221.

For the avoidance of doubt, the scope of the arbitral tribunal’s jurisdiction is
determined by the investment treaty. However, under the proposed human rights
centric approach, the arbitral tribunal refers to the international human rights
catalogue and its interpretation through international committees and tribunals,
regional and domestic courts, and tribunals on its own accord as a part of the human
rights paradigm. This will allow the tribunal to give the appropriate weight to the
international human rights catalogue in its decision-making process and therewith
play its part in the protection of the foundation of global citizenship (recognizing
that this citizenship includes both natural and legal persons). This is the very basis on
which investment treaties are built. Due and accurate consideration of human rights
will enhance the legitimacy of the award. The following summarizes the application
of a human rights centric approach:
1. The international human rights catalogue should be used to interpret the invest-
or’s rights set out in the investment treaty,242 such as fair and equitable
treatment,243 denial of justice,244 or the right not to be expropriated,245 but also
affording the investor the additional rights applicable to the investor under the
international human rights catalogue.
242
See, for example, Art. 9.3 et seq. of the recent Free Trade Agreement between the Republic of
Korea and the Republics of Central America (21 February 2018); Art. 3 et seq. of the Free Trade
Agreement between the Government of the Hong Kong Special Administrative Region of the
People’s Republic of China and Member States of the Association of Southeast Asian Nations
(12 November 2017) (‘Hong Kong & ASEAN FTA’) – note that Art. 9 contains limits that allow
an explicit balancing between the right of the citizens in the respective states and the rights of the
investors set out in the free trade agreement.
243
See, regarding the relationship and the interpretative help the reference to international human
rights might bring, Dupuy, ‘Unification Rather than Fragmentation of International Law?’
(2009), 52; Arbitral Tribunal established under Article XI of the Agreement on the Reciprocal
Promotion and Protection of Investments between Spain and the United Mexican States/ICSID
Additional Facility Rules, Tecmed v. Mexico, ICSID Case no. ARB(AF)/00/2, para. 154; Balcerzak,
Investor-State Arbitration and Human Rights (2017), 151, 160 et seq.
244
Arbitral Tribunal established under Art. 17 of the Agreement on Promotion, Protection and
Guarantee of Investments among Member States of the Organization of the Islamic Conference/
UNCITRAL Rules, Hersham Talaat m. Al-Warraq v. Indonesia, Final Award, 15 December 2014,
para. 621: ‘[t]he Tribunal concludes . . . that the Claimant did not receive fair and equitable
treatment as enshrined in the ICCPR . . . Accordingly, the Claimant’s fair and equitable treat-
ment claim is upheld’. Arbitral Tribunal established under NAFTA Chapter Eleven/ICSID
Additional Facility Rules, Loewen Group Inc and Raymond Loewen v. United States of America,
Final Award, 26 June 2003, ICSID Case no. ARB(AF)/98/3, para. 132, where the tribunal noted
that the host state had a positive obligation to afford a foreigner a fair trial as part of its denial of
justice analysis; Arbitral Tribunal established under NAFTA Chapter Eleven/ICSID Additional
Facility Rules, Mondev International Ltd v. United States of America, Final Award,
11 October 2002, ICSID Case no. ARB(AF)/99/2, paras. 138, 141, where the tribunal referred
to Arts. 6, 7 of the ECHR.
245
See Dupuy, ‘Unification Rather than Fragmentation of International Law?’ (2009), 52, who
stresses the usefulness of drawing on human rights law and jurisprudence to reduce uncertainties
regarding the legitimacy of expropriation and what constitutes equitable compensation. See also
ICSID Tribunal, Saipem SpA v. The Republic of Bangladesh, Decision on Jurisdiction and
Recommendation on Provisional Measures, 21 March 2007, ICSID Case no. ARB/05/07,
para. 132.

2. The role of amicus curiae should be strengthened, and tribunals should make use
of tribunal appointed human rights experts. Toby Landau QC delivering the 2011
Freshfields Lecture, mused whether every investment arbitral tribunal should
have a human rights expert at its disposal.246 Assigning a human rights expert to
every tribunal is for a number of reasons, many of them practical, illusory.
However, the core of the suggestion goes to the heart of what is needed – some
wider picture subject matter expertise.247
3. As a matter of course, a proportionality analysis should be performed to find
optimal rights respecting balance between the investor’s rights and the rights of
the people living in the respective state and/or those state’s societal values248 (if
the state is pleading, for example, that an infringement of the investor’s right(s)
was necessary to safeguard its people or fulfil its commitment under Article 2 of
the ICESCR).249 For the avoidance of doubt, the international human rights
246
T. Landau, 2011 Freshfields Lecture, Queen Mary University of London (author was present).
247
See the important contributions of the amici curiae in ICSID Tribunal, Philip Morris v. Uruguay,
ICSID Case no. ARB/10/7. The tribunal accepted the submission of two amicus briefs. The first was
an independent brief prepared by the World Health Organization (WHO) and the WHO
Framework Convention on Tobacco Control Secretariat. The second was a separate brief prepared
by the Pan-American Health Organization, which, while serving as WHO’s regional office for the
Americas, also has a separate legal status. But see ICSID Tribunal, von Pezold v. Zimbabwe and
Border Timbers v. Zimbabwe, Procedural Order no. 2, 26 June 2012, ICSID Case nos. ARB/10/15 and
ARB/10/25 (joined), paras. 57–61; see, for discussion, J. Harrison, ‘Human Rights Arguments in
Amicus Curiae Submissions: Promoting Social Justice?’, in P. M. Dupuy et al. (eds.), Human Rights in
International Investment Law and Arbitration (Oxford University Press, 2009); E. Levine, ‘Amicus
Curiae in International Investment Arbitration: The Implications of an Increase in Third-Party
Participation’, Berkeley Journal of International Law, 29 (2011), 207 et seq.; L. Bastin, ‘Amici Curiae in
Investor-State Arbitrations: Two Recent Decisions’, Australian International Law Journal, 20 (2013),
95; L. Bastin, ‘Amici Curiae in Investor-State Arbitration: Eight Recent Trends’, Arbitration
International, 30 (2017), 125; A. Saravanan and S. Subramanian, ‘The Participation of Amicus
Curiae in Investment Treaty Arbitration’, Journal of Civil and Legal Sciences, 5 (2016), 201.
248
Tribunals that have embarked on a proportionality analysis include Arbitral Tribunal established
under Article XI of the Agreement on the Reciprocal Promotion and Protection of Investments
between Spain and the United Mexican States/ICSID Additional Facility Rules, Tecmed v. Mexico,
ICSID Case no. ARB(AF)/00/2; ICSID Tribunal, LG&E v. Argentina, ICSID Case no. ARB/02/1,
paras. 195, 234. Particularly noteworthy is ICSID Tribunal, Continental Casualty v. Argentina, ICSID
Case no. ARB/03/9, paras. 180, 227, 228, where the tribunal held: ‘we consider that the Government’s
efforts struck an appropriate balance between that aim and the responsibility of any government
towards the country’s population: it is self-evident that not every sacrifice can properly be imposed
on a country’s people in order to safeguard a certain policy that would ensure full respect towards
international obligations in the financial sphere, before a breach of those obligations can be
considered justified as being necessary under this BIT. The standard of reasonableness and propor-
tionality do not require as much’. It might be helpful, especially in the investor-state context, to
understand the proportionality analysis as an optimization process, see H. Herschkoff, ‘Privatizing
Public Rights: Common Law and State Action in the United States’, in T. Kahana and A. Scolnicov
(eds.), Boundaries of State, Boundaries of Rights: Human Rights, Private Actors, and Positive
Obligations (Cambridge University Press, 2016), 129, 133.
249
See H. M. Haugen, ‘Trade and Investment Agreements – What Role for Economic, Social, and
Cultural Rights in International Economic Law?’, in E. Riedel et al. (eds.), Economic, Social, and
Cultural Rights in International Law: Contemporary Issues and Challenges (Oxford University
Press, 2014); Special Rapporteur on the Right to Food, Appendix: Guiding Principles on Human

h u man ri g ht s i n i n t e rn at i on al a rb i tr at i on 181
catalogue is not, per se, superseded by rights specifically included in an invest-

ment treaty.250 Since there is not, as such, a human rights hierarchy,251 those
rights protecting the investor set out in a BIT or FTA are not prima facie more
important, nor do they have more weight than the human rights set out in the
international human rights catalogue.
4. The principle embodied in the ‘margin of appreciation doctrine’ should be
utilized. As stated above, in section 6.2.4.1.2, the concept behind the margin of
appreciation doctrine is that a state has to have some scope to decide how to fulfil
its function. The margin of appreciation is part of the proportionality analysis
and speaks to whether the measure has a legitimate aim and whether or not the
state has to choose the least infringing measure available to the state if that means
that other legitimate goals can thereby be facilitated. The margin of appreciation
has to be assessed in light of the investment treaty. When the state enters into an
investment treaty, it restricts its policy choices. It can mean that the state will be
able only in the most severe circumstances to restrict the right of the investor.
Article 9 of the Hong Kong & ASEAN FTA, for example, sets out explicitly when
the state can adopt measures necessary to maintain public morals or the protec-
tion of privacy of individuals.252
5. Claims of the state regarding the investors’ disruptive behaviour that amounts
prima facie to a human rights violation will have to be addressed (i.e., as a counter
claim – as far as and in addition to the case when an investor’s conduct has not
been assessed in the proportionality analysis). That includes having regard to the
UN Guiding Principles on Business and Human Rights, which help to clarify the
investor’s obligation regarding the upholding and observance of human rights.253
6. The investor-state relationship will often illustrate the private-public divide on the
international plane, which is one of the most contested in every jurisdiction.254 One
of the fundamental questions arising out of the public-private dichotomy is whether
the state can use private law vehicles to fulfil its function, for example, either by
Rights Impact Assessments of Trade and Investment Agreements (UN, 2011), UN Doc. A/HRC/
19/59/Add.5.
250
The inclusion of rights protecting the investor can be understood in the historical context that the
rights of the IBR traditionally have not extended to legal persons. See above, at section 6.2.3.1.
251
Proclamation of Teheran, Final Act of the International Conference on Human Rights, Teheran
(22 April to 13 May 1968), UN Doc. A/CONF.32/41, 3, nos. 2, 3. See Teraya, ‘Emerging Hierarchy
in International Human Rights and Beyond’ (2001), 918; Meron, ‘On a Hierarchy of
International Human Rights’ (1986), 1.
252
Article 9 of the Hong Kong & ASEAN FTA.
253
UN Guiding Principles on Business and Human Rights (cf. note 68). While not endorsing the
Guiding Principles as such, the Human Rights Council, in Resolution 19/7, The Right to
Food (2012), para. 42 took note: ‘with appreciation of the report of the Special Rapporteur on
the Right to Food, Appendix: Guiding Principles on Human Rights Impact Assessments of Trade
and Investment Agreements, UN Doc. A/HRC/19/59/Add.5, (2011)’.
254
See, for a good summary (albeit regarding a related but different doctrine), J. van der Walt, The
Horizontal Effect Revolution and the Question of Sovereignty (De Gruyter, 2014), ch. 3. For an
overview of the German discussion, see U. Stelkens, ‘The Public-Private Divide: Annual Report –
2010 – Germany’, Ius Publicum Network Review (2011), available at www.ius-publicum.com
/repository/uploads/23_11_2011_10_39_Stelkens.pdf (last accessed 31 January 2020).

creating state-owned enterprises or contracting out its operations to a private

company, such as an investor, and thereby ridding itself of any human rights
obligations. Neither states nor investors can ‘flee into private law’255 when it
comes to a violation of basic general law principles.256 Because a subject matter is
organized privately does not, per se, mean that human rights are not applicable to
them.257 As the German Constitutional Court has convincingly and regularly
affirmed, a state cannot resort to a private measure to circumvent its human rights
commitments, since otherwise human rights protection would be illusory.258 This is,
in particular, the case for the provision of essential services which the state has to
provide in adherence with the rights enshrined in the ICESCR, such as the right to
water, and where the private company subsequently has a monopoly providing such
essential service.259 Importantly the justiciability of many social, economic, and
cultural rights has been recognized and practised globally,260 leaving no doubt that
the state can be held to account regarding the implementation of ICESCR rights.
Therefore, if the state contracts out that function to a monopoly investor, the
investor has to ensure the minimum fulfilment of the right.261
The human rights centric approach recognizes that human rights ‘go beyond the
reciprocal binary relationship of rights and obligations between contracting states, as
255
Preamble of the UDHR: ‘every organ of society . . . secure[s] their universal and effective
recognition and observance’; compare to the principle in German public law ‘keine Flucht ins
Privatrecht’, see F. Kirchhof in Maunz and Dürig (eds.), Grundgesetz-Kommentar (2016), Art. 83,
para. 103; T. Kingreen in C. Calliess and M. Ruffert (eds.), EUV/AEUV Kommentar, 5th ed. (C.H.
Beck, 2016), s. 36, para. 111.
256
Compare W. Friedmann, ‘The Use of “General Principles” in the Development of International Law’,
American Journal of International Law, 57 (1963), 295 (‘The science of international law can no
longer be content with the analogous application of private law categories. It must search the entire
body of the “general principles of law recognized by civilized nations” for proper analogies. With the
growing importance of international legal relations between public authorities and private legal
subjects, public law will be an increasingly fertile source of international law.’).
257
A. McBeth, ‘Privatizing Human Rights: What Happens to the State’s Human Rights Duties when
Services are Privatized?’, Melbourne Journal of International Law, 5 (2004), 144 et seq.
258
See German Federal Constitutional Court (Bundesverfassungsgericht), Judgment,
16 January 1963, Case no. 1 BvR 316/60, BVerfGE 15, 256, 262; German Federal
Constitutional Court (Bundesverfassungsgericht), Judgment, 2 May 1967, Case no. 1 BvR 578/
63, BVerfGE 21, 362, 369, 370; German Federal Constitutional Court (Bundesverfassungsgericht),
Judgment, 14 March 2006, Case nos. 1 BvR 2087/03, 1 BvR 2111/03, BVerfGE 115, 205, 237.
259
ICSID Tribunal, Urbaser v. Argentina, ICSID Case no. ARB/07/26, where the tribunal does not
seem to give any weight to the monopoly position of Urbaser and, in the author’s view,
incorrectly held that there was no obligation on a private company to implement the right to
water. The justiciability of the right to water is without question, see C. Macchi, ‘Right to Water
and the Threat of Business: Corporate Accountability and the State’s Duty to Protect’, Nordic
Journal of Human Rights, 35 (2017), 186; J. L. Cernic, ‘Corporate Obligations under the Human
Right to Water’, Denver Journal of International Law and Policy, 39 (2011), 320–1.
260
UN General Assembly, Optional Protocol to the International Covenant on Economic, Social
and Cultural Rights (10 December 2008), Res no. A/RES/63/117. M. Langford, ‘Judicial Review in
National Courts’, in E. Riedel et al., Economic, Social, and Cultural Rights in International Law:
Contemporary Issues and Challenges (Oxford University Press, 2014).
261
See ICSID Tribunal, Urbaser v. Argentina, ICSID Case no. ARB/07/26.

they have third party beneficiaries, a high number of parties, autonomous monitor-
ing mechanisms, and an aspiration to establish objectively binding normative
international standards’.262
6.5.3 Conclusion
The application of international human rights law in international arbitration,
in particular investment treaty arbitration, might sensitize arbitral tribunals and
parties to critical human rights issues, especially in situations where decisions
might affect those not party to the dispute. This perspective would enrich the
legal debate and, most importantly, would have the potential to improve the
legitimacy of international arbitration at a time when international arbitration
in general, and especially investment arbitration, is the object of rising suspi-
cion and criticism.263 Party autonomy as the basis for the legitimacy of
international arbitration is of limited use where there are repercussions beyond
the disputing parties.264
6.6 Concluding Remarks

It is sometimes argued that there is no need to apply international human rights in
international commercial arbitration, and that there are other principles and
262
Scheinin, ‘Impact on the Law of Treaties’ (2009), 27, 28.
263
L. Trakman, ‘Investment Dispute Resolution under the Transpacific Partnership Agreement:
Prelude to a Slippery Slope?’, ExpressO (2013); L. Trakman, ‘Investor-State Arbitration:
Evaluating Australia’s Evolving Position’, Journal of World Investment and Trade, 15 (2014),
152; J. Hill, ‘TPP Clauses that Let Australia Be Sued Are Weapons of Legal Destruction, Says
Lawyer’, The Guardian (9 November 2015), available at www.theguardian.com/business/2015/
nov/10/tpps-clauses-that-let-australia-be-sued-are-weapons-of-legal-destruction-says-lawyer
(last accessed 31 January 2020); G. Monbiot, ‘This Transatlantic Trade Deal Is a Full-Frontal
Assault on Democracy’, The Guardian (4 November 2013), available at www.theguardian.com
/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy (last accessed
31 January 2020); ‘Investor-State Dispute Settlement – The Arbitration Game’, The Economist
(11 October 2014), available at www.economist.com/finance-and-economics/2014/10/11/the-
arbitration-game (last accessed 31 January 2020); M. Khor, ‘The Trans-Pacific Partnership
Agreement (TPPA): When Foreign Investors Sue the State’, Global Research (1 September
2013), available at www.globalresearch.ca/the-trans-pacific-partnership-agreement-tppa-
whenforeign-investors-sue-the-state/5357500 (last accessed 31 January 2020); D. Kalderimis,
‘Investor/State Arbitration, the TPP and New Zealand’, Chapman Tripp (28 July 2015), available
at www.leanz.org.nz/media/resources/Kalderimis_LEANZ_Presentation_280715.pdf (last accessed
31 January 2020); B. Mueller, ‘The Devil in the TPPA – Investor State Dispute Settlement’, Scoop
(22 March 2015), available at www.scoop.co.nz/stories/HL1503/S00196/thedevil-in-the-tppa-
investor-state-dispute-settlement.htm (last accessed 31 January 2020); for a more extensive discus-
sion, see S. Franck, ‘The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public
International Law Through Inconsistent Decisions’, Fordham Law Review, 73 (2005), 1521.
264
S. Schill, ‘Conceptions of Legitimacy of International Arbitration’, in D. Caron et al. (eds.),
Practising Virtue: Inside International Arbitration (Oxford University Press, 2015).

mechanisms that provide sufficient protection for the parties.265 Neil McDonald, for
example, argues that ‘to introduce human rights into the equation of commercial
arbitration risks muddying the waters by providing another avenue to pursue ex post
facto for the aggrieved losing party to an arbitration’.266
It is true that arbitral tribunals usually pay great attention to procedural
fairness,267 and that arbitration rules and laws usually include mandatory procedural
rules to ensure the fairness of the proceedings.268 For example, Article 18 of the
UNCITRAL Model Law reads as follows: ‘[t]he parties shall be treated with equality
and each party shall be given a full opportunity of presenting his case’.269
What then, can be won from applying the fair trial rights of the international
human rights framework? First of all, applying these fair trial rights and referring to
the guarantees laid down in the international human rights catalogue gives arbitra-
tion a more profound basis of legitimacy. Second, arbitral tribunals can make use of
the volume of cases in human rights courts and the commentaries on international
fair trial rights for guidance in dealing with critical issues of procedural fairness.
Arbitral tribunals can rely on and benefit from the methodological approaches of
human rights law, first and foremost, the principle of proportionality.

Investment arbitration is currently subject to strong and intense criticism. The
application of human rights law will not radically reform investment arbitration.
Yet the international human rights framework not only gives a clearer structure to
the balancing of interests but also improves the basis of legitimacy and has the
potential to soothe spirits and build up public trust in this means of dispute
resolution.
This chapter sets out six instances where recourse to human rights will enhance
the tribunals’ decision-making process. Effective incorporation of human rights in
the decision-making process will not only improve the basis of legitimacy of an
investment arbitration award but will also help to augment the foundation that
allows for global political and economic structures to operate to their fullest capacity
and capability, thereby protecting and supporting the very basis that allows invest-
ment to occur.
One example of how international arbitration can serve as an important proced-
ural tool for promoting human rights is the Bangladesh Accord. The Bangladesh
Accord provides a binding agreement for over 200 global brands and leading
265
McDonald, ‘Human Rights Considerations in International Commercial Arbitration’ (2003),
523–38.
266
McDonald, ‘Human Rights Considerations in International Commercial Arbitration’
(2003), 537.
267
Born, International Commercial Arbitration (2014), vol. II, 2129 et seq.
268
See, for example, Arts. II, V(1)(b), V(1)(d), V(2)(b) of the New York Convention, Art. 18 of the
UNCITRAL Model Law, s. 33 of the English Arbitration Act, Art. 182 of the Swiss Arbitration
Act, s. 1042 of the German Code of Civil Procedure.
269
Article 18 of the UNCITRAL Model Law.

retailers on the one hand and labour rights groups on the other hand, to improve
working conditions in Bangladesh factories. What is special about the Accord is an
intermediate standing committee, composed of representatives from trade union
signatories and company signatories, and a neutral and independent advisory
member.270 Arbitration under the Bangladesh Accord serves as an appellate function
only, which may mean that the arbitral tribunal is limited to reviewing legal or
factual errors of the committee.271 By widening the scope of the Bangladesh Accord
to state and non-state stakeholders as obligated parties, the Bangladesh Accord
recognizes both the private and the public functions of international arbitration
and provides an alternative model to the current investor-state-arbitration
system.272 By creating an intermediate expert committee and binding investors as
well as states to one agreement, which implements human rights by detailed obliga-
tions, international arbitration could serve as an important procedural tool for
promoting human rights.273
Another step forward has been taken by the Working Group on International
Arbitration of Business and Human Rights launched by The Hague Institute for
Global Justice. It has concluded that international arbitration has the potential to
handle human rights abuses in many regions where courts and other mechanisms
have failed. In following the lead of the Bangladesh Accord, arbitration could be used
to handle human rights violations by establishing a special roster of arbitrators for
human rights matters and ensure the participation of victims in human rights
proceedings.274
270
D. A. Desierto, ‘A Model for Business and Human Rights through International Arbitration
under the Bangladesh Accord: The 2017 Decision on Admissibility Objection in Industrial
Global Union and Uni Global Union’, Kluwer Arbitration Blog (28 November 2017), available
at http://arbitrationblog.kluwerarbitration.com/2017/11/28/model-business-human-rights-
international-arbitration-bangladesh-accord-2017-decision-admissibility-objection-industrial-
global-union-uni-global-union/ (last accessed 31 January 2020); see, for an overview of dispute
resolution under the Bangladesh Accord, G. Dunning, ‘The Bangladesh Accord – a Model for
Environmental Dispute Resolution’, in P. Butler and C. Iorns (eds.), Environment and Small
States (Springer, forthcoming 2021).
271
R. Alford, ‘Arbitrating Bangladesh Labor Rights (Part II)’, Kluwer Arbitration Blog
(15 May 2013), available at http://arbitrationblog.kluwerarbitration.com/2013/05/15/arbitrat
ing-bangladesh-labor-rights-part-ii/ (last accessed 31 January 2020).
272
Desierto, ‘A Model for Business and Human Rights through International Arbitration under the
Bangladesh Accord’ (2017).
273
A first step could be the Urbaser v. Argentina decision: the tribunal accepted that a corporation
could be bound by human rights standards and jurisdiction over a human rights counterclaim,
see C. Richard, ‘Human Rights in International Investment Law: Where to After Urbaser?’,
Lexology (22 December 2017), available at www.lexology.com/library/detail.aspx?g=24fa4309-
4ce9-4b97-8615-a125d59ce1a6 (last accessed 31 January 2020).
274
Cronstedt and Thompson, ‘Proposal for an International Arbitration Tribunal on Business and
Human Rights’ (2016), 66 et seq.

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6

Human Rights in International Commercial

https://doi.org/10.1017/9781108304467.007 Published online by Cambridge University Press

(international human rights catalogue) form a constitutional framework that binds

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6.2 International Human Rights Framework and Methodology

6.2.2 Human Rights Framework

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6.2.2.1.2 International Human Rights as Customary Law There are inter-

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UDHR, though not a treaty,20 is today an important source of customary inter-

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6.2.2.2 Regional Instruments

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6.2.2.3 Domestic Instruments

6.2.2.4 Hierarchy of Human Rights

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accessible sources’. Importantly, given the cultural importance of education, culture,

6.2.3 Human Rights of Legal Persons

6.2.3.1 Protection of Legal Persons

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6.2.3.2 Obligation of Legal Persons

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If businesses are given a growing responsibility of transnational companies

6.2.4.1 Human Rights Methodology

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6.2.4.1.2 Margin of Appreciation The principle embodied in the doctrine of

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6.2.4.2 The Use of Comparative Jurisprudence and Literature

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6.3 International Human Rights as a Means of Justiﬁcation

6.3.1.2 Access to Justice

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6.3.1.3 Effective Justice

6.3.1.4 Limits Posed by Access to the Courts

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6.3.2 International Arbitration Theories and Human Rights

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6.4 Relevant Human Rights Norms in International Arbitration

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informality, and expedition of arbitration’.143 By agreeing to arbitration as a dispute

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horizontally to interpret private law rules, in particular by way of general clauses

6.4.2 Investment Arbitration

6.4.2.1 The Rights of the Investor

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their respective covenants.170 According to their jurisprudence, the right to property

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6.4.2.2 The Rights of the ‘People’184

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indigenous peoples to their ancestral lands is protected by the UN Declaration on the

‘From Environmental to Ecological Human Rights: A New Dynamic in International Law?’,

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