INTERNATIONAL LEGAL PROTECTION OF INVESTMENT FLOWS
2018/2019, Semester 2
Modular Credits: LL4178V ( 5 ) / LL5178V ( 5 ) / LL6178V ( 5 )
This course will examine the treaties used by States to protect the interests of their investors when making investments abroad. It will pay particular attention to investor-State arbitration, which is increasingly becoming widespread in Asia and a growing part of international legal practice. It will examine not only the legal and theoretical underpinnings of these treaties and this form of dispute settlement, but also their practical application having regard to concrete cases.
International investment law addresses the relationship between sovereign states and foreign investors under both customary international law and treaty law. Originally the province of the substantive law of state responsibility, international investment law has become dominated by bilateral and multilateral investment treaties of which there are presently some 2,800 in force. Under these agreements, states have undertaken to accord foreign investors certain standards of treatment and levels of protection with respect to the foreign investor’s investments in the ‘host state.’ In addition, states have agreed to subject themselves to international arbitration in order to resolve claims by investors that the host state has failed to accord the foreign investor with the level treatment agreed under the treaty. The stakes in such disputes are often very high, with claims and awards reaching billions of dollars.
The resolution of investor-state disputes brings together difficult legal and policy questions both about the rights and obligations of international investors (
, whether they should have substantive and procedural rights which go beyond those afforded to domestic investors), about the rights and obligations of sovereign states (
, the extent to which treaty-based protection of foreign investors limits the scope of the state’s power to regulate and, perhaps, meet other international obligations), and about the appropriate mechanisms for resolving investment disputes (
, whether the public should have the right to see and participate in what have traditionally been confidential arbitral proceedings).
Contemporary treaty-based investment disputes are almost always resolved through arbitration, sometimes before arbitral tribunals established by the International Centre for Settlement of Investment Disputes (ICSID), which is part of the World Bank group, sometimes before arbitral tribunals established through other arbitral institutions (such as the International Chamber of Commerce or the Stockholm Chamber of Commerce), and sometimes through
arrangements under the UNCITRAL Rules of Arbitration. This module examines the law governing the protection of international flows of investment, explores how rights and obligations can be enforced in an investment dispute, and considers the proper role of investment law in the international legal system. It further considers prospects for reform of the existing investment treaty regime, both with respect to the substantive protections afforded to foreign investment and with respect to the mechanisms used for the resolution of disputes.
This module requires the use of materials derived from a variety of sources: arbitral decisions, treaty texts, journal articles, treatises, etc. Often these materials will be available on the module’s online space. Where, however, materials are not posted online, it is the responsibility of students to access the materials themselves through the library and/or through the University’s online subscription resources.
Students are expected
to bring with them to each seminar
copies of the following instruments:
Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (‘ICSID Convention’) (1965)
Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (2016) (
ASEAN Comprehensive Investment Agreement
Singapore-United States Free Trade Agreement (2003) (
North American Free Trade Agreement (1994) (
In addition, there will be frequent readings from the following texts, all of which are available electronically through the NUS Library:
D Bishop, J Crawford & M Reisman,
Foreign Investment Disputes
(Kluwer, 2d ed. 2014)
R Dolzer & C Schreuer,
Principles of International Investment Law
(OUP, 2d ed. 2012)
A Newcombe & L Paradell,
Law and Practice of Investment Treaties
This module will be taught through lecture and directed class discussion. Students are expected to have read the assigned materials in advance of class and be prepared to participate. Class participation will be an assessed component of the grade in this module.
Class participation (10%)
Written assignment (25%)
6-hr Take-home Exam (65%)
Outline of Sessions
17/01/19 -- Seminar 1:
Why Foreign Investment? Why Investment Treaties? Why Investor-State Arbitration?
: Attitudes towards foreign investment; interests of the host State and the investor; investment and economic development; factors influencing the flow of investment.
24/01/19 -- Seminar 2: Sources and Interpretation
Customary international law; investment treaties; multilateral dispute settlement conventions; guidelines and codes of conduct; national legislation; general international law; arbitral case law
31/01/19 -- Seminar 3:
“Investors” & “Investments”: Questions of Coverage and Consent to Arbitration
Covered investors; covered investments; nationality of claims; compliance with host state law; relationship between ICSID Convention and investment treaties
07/02/19 -- Seminar 4:
Minimum Standard of Treatment & ‘Fair and Equitable’ Treatment
Customary v. autonomous standard; relationship between interpretations of the standard and treaty text; an ‘absolute’ standard?
14/02/19 -- Seminar 5:
Fair and Equitable Treatment (continued); Full Protection and Security; Arbitrary Treatment
The meaning and role of ‘legitimate expectations’; extent of the obligation of full protection and security; interrelationship of standards of treatment
21/02/19 -- Seminar 6:
National Treatment/Most-Favoured-Nation Clauses
The relative scope of the protections; the meaning and role of ‘comparators’; treaty variations; limitations in the interpretation and application of most-favoured-nation clauses
24/02/19 – Recess Week
06/03/19 (change of schedule) -- Seminar 7: Prohibitions on Performance Requirements
Rationale for performance requirements and their prohibition; scope of prohibition under investment treaties and WTO Agreement on Trade-related Investment Measures (TRIMs)
14/03/19 -- Seminar 8:
Elements of lawful expropriation; distinction between expropriation and exercise of general regulatory powers
21/03/19 -- Seminar 9: ‘Umbrella Clauses’ and the Relationship between Contractual and Treaty Obligations
Scope and application of ‘umbrella’ clauses; interpretations with respect to substantive obligations; forum and jurisdictional issues; distinguishing between contractual obligations and investment treaty obligations
28/03/19 -- Seminar 10: TBD
04/04/19 -- Seminar 11: TBD
11/04/19 -- Seminar 12: TBD