Table Of ContentInternational Investment Law and Soft Law
International
International
Investment Law
Investment Law
and Soft Law
and Soft Law
Edited by
Edited by
Andrea K. Bjorklund
Andrea K. Bjorklund
University of California, Davis, USA
University of California, Davis, USA
August Reinisch
August Reinisch
University of Vienna, Austria
University of Vienna, Austria
Edward Elgar
Edward Elgar
Cheltenham, UK (cid:79)Northampton, MA, USA
Cheltenham, UK (cid:79)Northampton, MA, USA
Untitled-1.indd 1 29/05/2012 16:38
#TheEditorsandContributorsSeverally2012
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Contents
Acknowledgements vi
List of contributors vii
1 Introduction: the ILA Study Group on the role of
soft law instruments in international investment law 1
AndreaK. Bjorklundand AugustReinisch
2 Sourcesof international investment law 9
Moshe Hirsch
3 Soft lawin internationallaw: an overview 39
MelakuGeboye Desta
4 Assessing theeffectivenessof soft law instruments in
internationalinvestmentlaw 51
AndreaK. Bjorklund
5 Soft lawinstrumentsin environmental law:models
forinternationalinvestment law? 82
Kate Miles
6 Soft lawcodificationsin theareaof commercial law 109
GiudittaCordero-Moss
7 GATT/WTO law and internationalstandards: an
example ofsoft law instrumentshardening up? 148
MelakuGeboye Desta
8 The evolution of investment protection based on public
internationallaw treaties:lessons tobe learned 192
ChristianTietjeand EmilySipiorski
9 Isthe MFN principle ininternationalinvestment law
ripe for multilateralization or codification? 238
AndreasR. Ziegler
10 Isexpropriation ripe forcodification? The example ofthe
non-discrimination requirement for lawful expropriations 271
AugustReinisch
11 Soft codificationof internationalinvestmentlaw 305
AugustReinisch andAndrea K. Bjorklund
Index 319
v
Acknowledgements
Wearemostgratefultotheindividualauthorsofthechaptersofthisbook
who have made our jobs easy by producing outstanding work and with
whomithasbeenapleasuretomeettodiscusstheintersectionofsoftlaw
and the law of international investment. Books like this do not come
togetherwithoutagreatdealofassistance.JaminHornattheUniversity
ofCalifornia,Davis,providedexcellentassistancewithcitations.Florian
Dunkel at the University of Vienna was indispensable – he provided
outstanding help at all stages of the project and we could not have
completed thework without hisdiligence.
Asalwaysweacknowledgeourfamiliesfortheirassistanceandtheir
forbearance.
Andrea K. Bjorklund
Davis, California
August Reinisch
Vienna, Austria
vi
Contributors
Andrea K. Bjorklund is Professor of Law at the University of California,
Davis, USA; Visiting Professor (Guest of the L. Yves Fortier Chair in
International Arbitration and International Commercial Law) at McGill
University Schoolof Law, Montreal, Canada.
Giuditta Cordero-Moss is Professor at the Department of Private Law at
theUniversityofOslo,Norway;honorarylecturerandprincipalresearch
fellow at the Centre for Energy, Petroleum and Mineral Law & Policy,
University ofDundee,UK.
Melaku Geboye Desta is Reader in International Economic Law at the
Centre for Energy, Petroleum and Mineral Law & Policy, University of
Dundee,UK.
Moshe Hirsch holdsthe Maria von Hofmannsthal Chairin International
Law,FacultyofLawandDepartmentofInternationalRelations,Hebrew
University ofJerusalem, Israel.
KateMilesisSeniorLecturerinInternationalLawattheFacultyofLaw,
University ofSydney,Australia.
August Reinisch is Professor of International and European Law at the
University of Vienna, Austria and Professorial Lecturer at the Bologna
Centerof SAIS/Johns Hopkins University in Bologna,Italy.
Emily Sipiorski is senior researcher and lecturer at the Institute of
Economic Law and the Transnational Economic Law Research Center
(TELC) at the Law School of Martin-Luther-University Halle
Wittenberg, Germany.
Christian Tietje is Professor of Public, European and International
EconomicLaw,DirectoroftheInstituteofEconomicLawandDirectorof
the Transnational Economic Law Research Center (TELC) at the Law
Schoolof Martin-Luther-UniversityHalle Wittenberg, Germany.
vii
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summarize the main rules relating to investment law in a ‘codification’-
type instrument. Their initial proposal made it very clear that the Study
Group’s mandate should not extend to an attempt to partially or
exhaustively codify rules of investment law. Rather, the focus of the
Group’s work should be on the assessment of the ripeness of such an
undertaking. Thus, the Study Group’s mandate concentrates on the
elaboration ofa ‘feasibility study’.
After the untimely death of Professor Wa¨lde in late summer 2008,
Professor Bjorklund agreed to serve as Co-Rapporteur of the Study
Group. The Group was formally established in November 2008. It had
workingmeetingsinJune2009inVienna,inNovember2009inLondon,
in August 2010 inThe Hague and inMarch 2011in Vienna.
At these meetings crucial decisions concerning the work and working
methodsoftheGroupweretaken.Inadditiontotheperiodicreportsdue
forILAConferences, the Group decided that it would work towardsthe
publication of a book containing the contributions of the Group’s
members.TheGroupfocusedonidentifyingthemainissuessurroundinga
potential‘codification’ofinvestmentlawandinvestigatingwhetherandin
what form investment law may be ‘codified’. The contributions in this
book,whichcontainsthemajoroutputoftheStudyGroup’swork,could
lead to a recommendation that the ILA pursue the elaboration of an
internationalsoft law instrument on internationalinvestment.
The ILA has a long-standing tradition of formulating ‘Rules’,
‘Recommended Practices’, ‘Draft Articles’ and the like in an attempt to
contribute to the codification and development of various fields of
internationallaw.
Inthefieldofinvestmentlaw,suchasoftlawinstrumentcouldprovide
a contemporary view of the state of the emerging and in several areas
already settled jurisprudence of international investment law. Indeed, a
significantcontributionwouldbetoidentifythoseareasinwhichonecan
identifyajurisprudenceconstante.Itcouldtherebyservetribunals,parties
andcounsel inhelping toidentifythecurrentstateofinvestment arbitral
jurisprudence and scholarship (in the sense of Article 38 of the ICJ
Statute). By objectively describing the current state of international
investment law it could facilitate the identification of customary
int ernationallaw.Suchaninstrumentcouldalsoassistgovernmentsinthe
negotiation and renegotiation of existing bilateral investment treaties
Untitled-1.indd 2 30/05/2012 08:48
1. Introduction: the ILA Study Group
on the role of soft law instruments in
1
international investment law
Andrea K. Bjorklund and August Reinisch
The Study Group was established by the International Law Association
(ILA) Executive Council in November 2008 for a three-year period with
theexpressmandate‘tostudythedevelopmentofsoftlawinstrumentsin
internationalinvestmentlawandthefeasibilityofa‘‘codification’’ofthe
present state ofthis fieldof international economic law’.
The Executive Council appointed Sir Franklin Berman (UK ILA
Branch) as Chairman, as well as Andrea K Bjorklund (US ILA Branch)
and August Reinisch (Austrian ILA Branch) as Co-Rapporteurs of the
StudyGroup.AsofSpring2010,furthermembersoftheGroupwereYas
Banifatemi (French ILA Branch), Giuditta Cordero-Moss (Norwegian
ILA Branch), Melaku Desta (UK ILA Branch), Moshe Hirsch (Israeli
ILA Branch), Daniel Magraw (US ILA Branch), Kate Miles (Australian
ILA Branch), Audley Sheppard (UK ILA Branch), Christian Tietje
(German ILA Branch), Matthew Weiniger (UK ILA Branch), Catherine
Yannaca-Small (Greek ILA Branch), Andreas Ziegler (Swiss ILA
Branch).
The establishment of the Study Group was initiated by a proposal
elaborated jointly by Thomas Wa¨lde (deceased, formerly UK ILA
Branch) and August Reinisch after the ILA Committee on the
InternationalLawonForeignInvestmenthadcometoanendattheRio
Conferencein2008.Ithadconcludeditsworkwiththepublicationofthe
Oxford Handbook on International Investment Law,2 which addressed
major issues of both substantive and procedural investment law. In the
1 ThebulkofthisintroductionwaspresentedastheStudyGroup’sinterim
reportattheILABiennialConferenceinTheHaguein2010.
2 P Muchlinski, F Ortino and C Schreuer (eds), Oxford Handbook of
Intern ationalInvestmentLaw(OxfordUniversityPress2008).
1
2 International investment law and soft law
course ofthatCommittee’swork ithadbecomeevidentthat thegrowing
arbitral case law was contributing to an increasingly elaborate body of
international investment law. The proponents of the Study Group thus
considered it timely to suggest the establishment of a study group to
investigate whether the time was ripe for an attempt to formulate and
summarize the main rules relating to investment law in a ‘codification’-
type instrument. Their initial proposal made it very clear that the Study
Group’s mandate should not extend to an attempt to partially or
exhaustively codify rules of investment law. Rather, the focus of the
Group’s work should be on the assessment of the ripeness of such an
undertaking. Thus, the Study Group’s mandate concentrates on the
elaboration ofa ‘feasibility study’.
After the untimely death of Professor Wa¨lde in late summer 2008,
Professor Bjorklund agreed to serve as Co-Rapporteur of the Study
Group. The Group was formally established in November 2008. It had
workingmeetingsinJune2009inVienna,inNovember2009inLondon,
in August 2010 inThe Hague and inMarch 2011in Vienna.
At these meetings crucial decisions concerning the work and working
methodsoftheGroupweretaken.Inadditiontotheperiodicreportsdue
forILAConferences, the Group decided that it would work towardsthe
publication of a book containing the contributions of the Group’s
members.TheGroupfocusedonidentifyingthemainissuessurroundinga
potential‘codification’ofinvestmentlawandinvestigatingwhetherandin
what form investment law may be ‘codified’. The contributions in this
book,whichcontainsthemajoroutputoftheStudyGroup’swork,could
lead to a recommendation that the ILA pursue the elaboration of an
internationalsoft law instrument on internationalinvestment.
The ILA has a long-standing tradition of formulating ‘Rules’,
‘Recommended Practices’, ‘Draft Articles’ and the like in an attempt to
contribute to the codification and development of various fields of
internationallaw.
Inthefieldofinvestmentlaw,suchasoftlawinstrumentcouldprovide
a contemporary view of the state of the emerging and in several areas
already settled jurisprudence of international investment law. Indeed, a
significantcontributionwouldbetoidentifythoseareasinwhichonecan
identifyajurisprudenceconstante.Itcouldtherebyservetribunals,parties
andcounsel inhelping toidentifythecurrentstateofinvestment arbitral
jurisprudence and scholarship (in the sense of Article 38 of the ICJ
Statute). By objectively describing the current state of international
investment law it could facilitate the identification of customary
int ernationallaw.Suchaninstrumentcouldalsoassistgovernmentsinthe
negotiation and renegotiation of existing bilateral investment treaties
