OUTLINE FOR LECTURE ONE.
The history of international investment law.
1. The history of foreign investment. The colonial period. The imperial law. The absence of a need to have a foreign investment law.
2. The period after decolonization. A period of hostility. Nationalization of foreign property. The assertion of the right of control over resources. The doctrine of permanent sovereignty over natural resources. Constitutions asserting such control.
3. The period of pragmatism. China’s open door policy. Vietnam. India. The rise of neo-liberalism. The fall of competing ideologies. The 1990s as indicating the triumph of free-market ideas.
The economic views on foreign investment.
1. The classical theory. Foreign investment is universally beneficial to economic development. Formation of assets. Transfer of technology and management skills. Upgrading of infrastructure. Creation of employment.
2. The dependency school. Centre and periphery. The need to break the cycle if economic development is to be achieved.
3. The middle approach. The need to attract the appropriate investment. The Asian economic crisis. Rapid pull-out of investment. The view that internal strength is more important.
4. Neo-liberalism in the 1990s. The rise of market liberalisation. Globalisation and its discontents. The tilt towards the market. The Asian economic crisis. A tilt away??
5. Also, economics not the only determinant. Ethnic factors and social conditions are also material to the devising of an investment policy. (eg. Malaysia). Nationalism and appeasement of socialist and other political groups has a continuing role (e.g, India). The relevance of environmental concerns and human rights issues. The law has to balance several competing forces.
What is foreign investment?
A foreign investment transaction is different from other international commercial transactions as it is characterised by (i) long duration (ii) committment of substantial assets in host state from home state or raised on capital markets (iii) element of political risks associated with the state as opposed to ordinary commercial risks that attend all business transactions. (iv) regular profits made on long term basis (v) the assumption of economic development that is associated with the investment.
1. We begin by excluding (a) portfolio investments (b) transactions relating to international trade, such as export of goods and services.
2. We include tangible property such as assets, purchase of land for building factories, liens on them, equipment associate with the venture.
3. Intangible property, such as those associated with technology (patents, know-how, etc.)
4. Primary shares in corporations.
5. New property : licenses and permits; contractual rights.
The case we discussed, Malaysian Salvors Ltd v Malaysia is at
TYPES OF FOREIGN INVESTMENT.
1. Fields: Natural Resources: Joint Ventures. Production Sharing Contracts, concession
2. Manufacturing: Wholly owned subsidiaries; Joint ventures. Licensing agreement.
3. Construction: Turnkey agreements, management contracts,etc.
Energy and Other Projects; BOT Agreements.
The Risks to Foreign Investment.
Nature of risks to foreign investment.
Market failures and industry changes.
The Asian economic crisis and other crisis.
The rise of environmentalism and human rights concerns
OUTLINE FOR LECTURE TWO.
4th September 2007
1. Multinational corporations:
(i) Non-recognition in international law. Barcelona Traction Case. Existence as separate units in national law.
(ii) Soft law prescriptions addressed. Code on the Advertisement of Breast Milk Substitutes; OECD Code on Illicit Payments.
(iii) Efforts as Code of Conduct on TNCs. Failure. Several non-binding codes adopted on foreign investment protection.
(iv). But, unity recognised through extraterritoriality of national laws of home states. Taxation. export controls. antitrust. environmental harm. bribery.(Foreign Corrupt Practices Act).
(v). Private International Law : More meaninguful recognition. Bhopal, products liability litigation. Piper Aircraft, Biman Airlines, Dalkon Shield.
(vi) The social and legal responsibility of multinational corporations. Litigation under the Alien Torts Act in the United States.
(vii) The private power of multinational corporations in bringing about law. Eg. TRIPS and the pharmaceutical companies. The making of lex mercatoria.
(viii) Concern with abuses of large companies. Enron, Parmalat. The possible effect on economies of smaller states. Political and other involvements.
Sornarajah, International Law on Foreign Investment, (2nd Ed. Cambridge University Press, Chapter Four).
Sarei v Rio Tinto (US 9th Cir. Ct of Appeals, August, 2006).
2. State Corporations:
(i) Origins. Prevalence. Distinction between state enterprises and state owned enterprises.
(ii) The problem of ultra vires in making contracts.
(iii) Bribery and Corruption. Illegality. Formation of contract.Westinghouse Case. Piatco.
World Duty Free Company v Kenya.
United Nations Convention on Corruption. (Browse through text).http://www.unodc.org/pdf/crime/convention_corruption/signing/Convention-e.pdf
(iv) Problem of jurisdiction and immunity. The state immunity act.
3. International Organisations.
ICSID (Provision of arbitration facilities, Issuance of Guidelines).
UNCTAD (Now home of the Division on Transnational Corporations)
OECD (Guidelines, Multilateral Agreement on Investments.).
IMF and the World Bank.
WTO (through TRIPS, TRIMS).
Human Rights Groups like Oxfam and Amnesty.
M. Sornarajah, International Law of Foreign Investment (Cambridge, 2004) Chapters One and Two
We shall also discuss World Duty Free Corporation v Republic of Kenya
and the Fraport v Philippines Case (2007).
OUTLINES FOR LECTURE THREE
11th September 2007
THE ROLE OF INTERNATIONAL LAW.
The rules on alien entry.
Diplomatic protection of aliens.
Protection of Property.
Multilateral and bilateral instruments.
Constraints on the host state through customary international law.
1. The Role of the Host State.
a. Admission of foreign investment. Total exclusion from certain sectors. (Exon-Florio) Administrative controls and screening mechanisms.
b. Exclusion of admission into low technology industrial sectors.
c. Specification of equity. Capitalisation measures. Amco v Indonesia. Performance requirements
d. Preference for joint ventures..
e. Laws inviting to foreign investment. Tax incentives. Intellectual property protection. Guarantees against exporpriation. Provision for external arbitration of foreign investment disputes.
g.Impact of the WTO instruments; GATS, TRIMS, TRIPS.
2. Control of Mergers and Acquisitions.
(a)Competition Law and Law Relating to Security.
Competition Law concerned with market dominance new merged company will acquire.
Proctor and Gamble Case. For the objects of China's new competition laws, see
(b) Security considerations. CNOC and UNOCAL.
Sornarajah, International Law on Foreign Investment, (2nd Ed. Cambridge University Press, Chapter Three).
Role of the Home State.
1. Is there a duty to prevent bad investment from going abroad?
2. Is there a duty to provide a forum for litigation for persons affected by harmful investments?
3. What is the extent of the duty of protection?
4. Is there a duty to exercise extraterritorial control?
5. Extent of the extraterritorial control. antitrust (US v Alcoa), export controls (Fruehoff v Massardy; Soviet Pipeline Incident), corruption (US Foreign Corrupt Practices Act).
Mudistan is a state which abuts the Blue Sea which is an internal sea that is rich in oil. Underwater exploration of such oil has to be funded by external capital as Mudistan lacks the technology or the financial resources to undertake undersea exploration. It makes a contract with Oilco which is willing to explore the area. Oilco finds oil but Mudistan which now has a new government refuses to permit Oilco to exploit the resources through which alone it could recover the initial capital and other resources it had spent on the exploration. The reason given for the breach of contract by Mudistan is that the exploitation in the area is risky because of the hydrochloride gases that further underwater drilling would cause to escape, posing a danger to the coastal area. It also states that a rare species of sturgeon will be destroyed if the drilling is carried out. Discuss the legal situation.
On the US Foreign Corrupt Practices Act, see website of the US Depatrment of State, http://www.usdoj.gov/criminal/fraud/fcpa/
On how the FCPA could be and has been avoided, see article by Theodore Moran in Workbin.
OUTLINE FOR LECTURE FOUR.
18 Septermber, 2007.
The Foreign Investment Contract.
1. What is a state contract? R v Amphitrite.
2. Its formation. Fraud, Bribery and Illegality (already covered in class)
Azinian v Mexico. http://www.worldbank.org/icsid/cases/cases.htm
Czarnikow Ltd. Rolimpex  AC 351.
3. Joint Venture as common form. Mandated by many foreign investment codes.
4. Preliminary factors in the formation of a joint venture. Negotiations. Fiduciary obligation arises to protect the information. Lac Minerals Ltd v International Cornona Resources Ltd. (1988) 61 DLR 14.
5. The letter of intent and memorandum of understanding. Feasibility studies, environmental impact assessments.
6. The joint venture contract. The nature of the clauses in the contract.
Letter of Intent or Memorandum of understanding.
Prefatory clause. Definition of Terms.
Management Provisions. Capitalisation provisions.
Choice of law Arbitration clause. Stabilisation Clause. Renegotiation.
THE INTERNATIONALIZATION OF FOREIGN INVESTMENT CONTRACT.
1. Need for foreign investment protection.
2. Its construction through oil arbitrations. Aramco Arbitration. View that sophisticated contracts must be subject to general principles of law.
3. McNair's role in identifying general principles with international law. Later construction of transnational law or supranational systems as the law applicable to foreign investment contracts.
4. Article 42 of the ICSID Convention and its reference to public international law.
5. Two views of internationalization. (i) Economic Development Agreements are by nature subject to a supranational system. (ii) Where appropriate clauses are used-choice of general principles as proper law, stabilization clause, foreign arbitration- parties agreed to internationalization.
6. Texaco Arbitration . The use of the theory of internationalization.
7. Hallmarks: foreign arbitration. full compensation.
Glance through the provisions of the US-Singapore FTA and the India-Singapore CECA, in particular, the investment provisions. The second half of the course will consider the provisions of investment treaties. The text of the treaties will be loaded onto the workbin. Alternatively, search for them in the websites of the USTR or the Ministry of Trade, Singapore. Browse through these websites.
OUTLINE FOR LECTURE FIVE
1. The notion of economic self-determination. The growth of the doctrine of permanent sovereignty over natural resources. New International Economic Order.
2. Constitutional significance given to the doctrine in many countries.
3. Local control over whole of the foreign investment process. New structure of contracts. Foreign investment codes providing for whole process of foreign investment.
4. Local incorporation. Local courts to settle. Calvo Clause.
5. Investment Codes 6. Regulatory controls.
7.Notion of administrative contracts.
8. Clear public law nature of the contracts.
Assumption that There are Principles of International Investment Contracts.
Is there an international law on foreign investment contracts?
1. Formation of the Contract.
Judge Cavin in the Sapphire Award: Objective existence of the contract. Irregularities in the law of the host state do not matter.
But nullity in domestic law. (eg. ultra vires contract.) What is void cannot have an objective existence.
Den Norske Credit Bank v.Sarawak Economic Development Corporation (1988)
2. Bribery: Not relevant as contract has an objective existence.
Westinghouse Case: Northrop Corporation v. Triad International (1987) 811 F2d 1265.
Also relevance of quantum meruit.
But: Argentine Bribery Case; Foreign Corrupt Practices Act. OECD and UN Bribery Conventions.
4. Is there a general law of remedies?
Yes: Specific Performance; Texaco Award. Declaration: BP Award.
5. Is there a law of damages?
Yes: full compensation.
No: It is a matter for domestic law and damages to be calculated on the basis of the equities involved in the situation.
6. The Compensation debate.
6. Taking of Foreign Property.
Human rights arguments relating to property rights.
The issue of compensation.
The new cases under NAFTA on regulatory takings.
Methanex v USA.
Metalclad v Mexico
SD Myers v Canada.
Philip and Talbot v Canada
These NAFTA decisions can be found at various web-sites including that of the USTR.
Please read the following:
1. Article by Jeswald Salacuse on investment Treaties.
2. THE US Model Investment Treaty, which is similar to the Investment Chapter of the US-Singapore Free Trade Agreement, but with more extensive provisions on arbitration.
3. The Investment Chapter of the India-Singapore Comprehensive Economic Cooperation Agreement (CECA).
These are in the workbin.
OCTOBER 2, 2007.
Note that the Lecture on 2nd October will be from 9-10.30 am only.
We will complete points made in Lecture Outlines for Lecture Five.
October 9, 2007.
Several students have asked me to explain the theory of internationalization of foreign investment contracts. I shall do so again at the next lecture. But, think of the theory along these lines. It is a theory that is created to look after the foreign investor’s interests.
- Foreign investor takes large funds into country X. He has to ensure its protection as the rules of the game can be easily changed through legislation or regulation by country X. [Say the project is to construct a housing estate on BOT terms].
- So, prior to entry, when his bargaining position is strong, he ensures that his contract is protected by appropriate clauses.
- A policy argument is that even in the absence of such clauses, the contract must be internationalized as it is obvious that a foreign investor would not engage in such investment in developing countries without the contract being externalized. The strategy is to insulate the contract and the operation of the foreign investment from the host state’s laws. Hence, the notion of internationalization.
- The policy argument is furthered by the idea that developing countries desperately need investment for a variety of reasons. Eg. In our situation housing for the people. Such investment will not flow unless there are laws based on such policy prescriptions.
- But, where there are clauses in the contract, such as the stabilization clause, the choice of law clause indicating the application of general principles of law and an arbitration clause indicating arbitration overseas, it is argued that the contract is an international contract and is rendered immune to changes effected by local law.
- Think of whether the theory is sound. Obviously, Country X may accept it initially, but there would be conflict later as when the rents charged by the foreign company which is to operate the housing estate are high and there are political agitations. It will interfere to fix rents and there will be problems. The foreign investor will go to arbitration against Country X.
- Much of the issues in the area arise from such problems. One other way of protecting the foreign investor is for Country A, the home state of the foreign investor entering into a treaty with Country X as to the protection of the assets of the foreign investor who is its national and ensure that he is treated according to the standards in the treaty.
We will look at these principles again in the next class before we go on to deal with investment treaties. But, what is crucial to internationalization is that the foreign investor is given the ability to create his own contractual protection. It works through the system of arbitration.
The alternate system of protection is through the treaty device which also operates on the basis of arbitration.
So, one must think in terms of three ways in which the foreign investment process is subject to an external system.
- Under customary international law, the claim is that any alien (and foreign investor) should be treated according to an international minimum standard.
- Under contract, the idea is that the contract (particularly one containing appropriate clauses) is subject to an international set of norms.
- Under treaty, there are (i) treatment standards (ii) safeguards of compensation for expropriation (iii) the right to repatriation is protected.
The theory of internationalisation is dealt with in my book at pp.416-429.
Let us take a look at the problem below.
Sing Water Company makes a contract to create a water processing plant to supply water to the city of Meking in Rinah. The investment in the plant was to be paid for through a BOT mechanism. The chlorination process of the water resulted in the water tasting bitter and many of the people in Meking who drank it vomited. Since dehydration resulted in many, the city of Meking decided to find alternative sources of water. It began trucking water for distribution to its citizens from the neighboring city of Bangor. As a result, the revenue raised through sales of water by Sing Water diminished and there was no prospect of even meeting the capital it had invested in building the plant. There was an ICC arbitration clause in the contract. There was also an investment treaty between Sing and Rinah. Discuss the possible remedies that Sing Water could resort to.
After this, we will look at the provisions of investment treaties. Please remember to read the Indian and US treaties with Singapore.
THE NEED FOR INVESTMENT TREATIES.
BILATERAL INVESTMENT TREATIES.
1. The Technique of protection in international law. Contractual protection unsatisfactory because of conlict between internationalization and internalization.
The rules of state responsibility. Such responsibility could result where there is a non-satisfaction of a duty of protection by the state or where the state's agents themselves are responsible for the damage. Intermediacy of the state needed for system to work.
2. Unsatisfactory nature of such protection. It is left to the discretion of the state whether or not to espouse the cause of the investor. Also international rules unclear as to what the standards of protection are. Rules made unclear particularly after clash between developed and developing states as to standard of protection.
3. Hence, the need to iron out standards of protection and to give direct protection to the foreign investor and the foreign investment contract. The foreign investor should be able to invoke remedies directly without intermediacy of the state.
4. Bilateral investment treaties are one way of addressing the solution. The ICSID Convention is another in that it provides for invocation of an international remedy by the foreign investor without the intermediacy of the state. First, Bilateral investment treaties will be considered.
5. Treaties lift a matter out of domestic jurisdiction and subject the matter to the regime stated in the treaty. Bilateral investment treaties remove the foreign investment contract from the domestic sphere of the host state to the extent specified in the treaty. These treaties settle the law as between the two states given the fact that the international law rules are unclear.
OUTLINE OF LECTURE EIGHT
OCTOBER 16, 2007
The Lecture will end at 11am.
1. The investment treaties guarantee (i) treatment standards (ii) against expropriation (iii) the right of repatriation.
2. They provide for unilateral invocation of arbitration in the event of an alleged violation.
3. For recourse to arbitration under the treaty, three initial factors have to be satisfied :
- (i). That the investment was made during the time period the treaty covers.
- (ii) That the investment is an investment covered by the treaty. This would require that the investment falls within thedefinition of the investment but may include other factors developed by case law.
(a) the investment must be an approved investment (Grueslin v Malaysia, Yaung Chi Oo Ltd v Myanmar http://ita.law.uvic.ca/documents/YounghiOocase.pdf
(b) that pre-investment expenses are not investment ( Mihaly v Sri Lanka)
(c) that services are not investment (Malaysian Historiacal Salvors v Malaysia)
(d) that it must promote economic development (Patrick Mitchell v The Congo).
4. The investor must qualify for protection. He must be a national of the state party to the treaty. Problems of dual nationality.
5. Corporate nationality. The Barcelona Traction Case. Incorporation v the Siege Sociale theory. The difficulties created by incorporation. (a) round tripping (Tokio Tokeles v Ukraine; Yaung Chi Oo Ltd v Myanmar) (b) platform or gateway notion. (c) can companies migrate to a state with favourable treaties? yes, according to Aguas del Tunari v Bolivia.
The requirements discussed are alternately stated in the following formula: There must be jusridiction ratione temporis, ratione materiae and ratione personae.
6 There must be written consent for arbitration. This rule is satisfied by the existence of a treaty provision providing for unilateral recourse to arbitration AAPL v Sri Lanka (1991) or where there was a provision in the domestic investment code promising foreign investors settlement of disputes by arbitration. "Arbitration without Privity"
7. Jurisdiction must be satisfied before proceeding to the merits of the case.
8. As regards, merits, the treaties provide for three main types of causes of action which relate to the violation of the three types of rights protected by the treaties (1) treatment standards (2) right against expropriation without compensation (3) the right to repatriation. A fourth cause of action may exist if the treaty contains what is known as an umbrella clause.
9. TREATMENT STANDARDS. The treatment standards refered to in the treaties are (i) national treatment (ii) international minimum standard of treatment (iii) fair and equitable standard of treatment (iv) full protection and security (v) most favoured nationa treatment. We will look at each of these standards in turn.
October 23, 2007.
1. National standard of treatment. Treatment on par with nationals. SD Myers v Canada. They must be in "like circumstances".
2. International Minimum standard treatment. Comes from customary international law. The Neer Claim (1926). Must be so inordinate a breach as to shock conscience. Usually, there should be a "denial of justice", meaning that justice should have been atrociously denied by the local courts. But, local courts need not be approached if remedy they provide would be illusory.
3. Fair and Equitable Standard Treatment Originally anamalous standard. But in the last six years effort to read meaning into it. (a) It requires transparency as to laws. Metalclad v Mexico. (b) Good faith must be shown in dealings. Techmed v Mexico. (2) It requires legitimate expectations of the foreign investor to be satisfied.
4. For these developments see OECD report on the standard: http://www.oecd.org/dataoecd/22/53/33776498.pdf
5. What are legitimate expectations? How do they become law under the treaties? The term is a term of English administrative law. The law has been developed in a series of cases to give procedural relief to those whose expectations are affected by use of discretionary power by states or state officials. Except in Coughlan, it has not been used to give substantive protection.
6. MTD Sdn Berhard v Chile; Argentine Cases. El Paso Ltd. v Govt. of Argentina; Can the cases be distinguished?
7. Full Protection and Security. Duty to protect. AAPL v Sri Lanka, AMT v Zaire, Wena Hotels v Egypt. But, an argument that the standard requires stability to be maintained has become current in the Argentine cases.
of NAFTA and the US. Interpretation Note statiing that fair and equitable standard is not different from international minimum standard. US Model BIT also.
9 Most Favoured Nation Standard. Procedural use. Maffezini v Spain; Substantive extension.
10. The umbrella clause. SGS v Pakistan; SGS v Philippines.
30 OCTOBER 2007
1. Nationalization and Expropriation. The history: confiscation, nationalization and expropriation. The viewpoints: communist, Third World and capitalist.
2. Expropriation in the investment treaties: Conditions for expropriation. (i) must be for a public purpose (ii) there must be no discrimination. (iii) due process should be provided (iv) there must be full compensation.
3. The shift of focus on what amount to a taking. Direct, indirect and tantamount (or equivalent) to a taking.
4. Broad definition that anything that affects an ownership right or depreciates the value of property is an expropriation.
5. Ethyl Case; Cigarette Labelling Incident; Santa Helena Ltd v Costa Rica. Neo-liberal notion of maintaining standards of governance.
6. Need to curb expansion. Metalclad Case. The Zellick-Yeo side letter in the Singapore-US treaty.
7. The regulatory exception.
8. Calculation of damages. Principle of restitution. Chorzow Factory Case.
Defences to Liability: The Response of the Host States to Expansionary Trends.
1. Defences based on types and restrictions of investment. (that it must be approved; that entry be made in accordance with host state laws; Piatco.)
2. Dropping of some clauses such as fair and equitable treaty. Withdrawal from arbitration. (Bolivia).
3. Introducing limitations eg. the notion of regulatory expropriation.
4. Resorting to customary international law defences eg. economic necessity.
5. Precedent obligations. eg. in Santa Helena, the environmental obligations.
A Note on Enforcement.
1. Non-ICSID awards are enforceable under the New York Convention on the Enforcement of Foreign Arbitral Awards, subject to the important defence of public policy and other defences mentioned in the Convention.
2. ICSID awards become as enforceable as the judgements of the domestic courts of each participating state subject to the plea of sovereign immunity.
3 November 2007. ( SATURDAY).
The following hypotheticals in a mock examination paper will be discussed.
LL6032/LL4032/LL4032/LL5032/LLD5032 - INTERNATIONAL INVESTMENT LAW
ANSWER TWO QUESTIONS ONLY.
1. The Skitish Petroleum and Natural Gas Company (SPNGC) had entered into a concession agreement to exploit the oil resources of the northern province of Myland when Myland was still a protectorate of Skitain. The concession agreement was to last for 60 years and had been entered into in 1966. The concession agreement provided for arbitration by an ad hoc arbitration tribunal and identified the law applicable as general principles of law. It also contained a stabilisation clause excluding the application of future legislation to it.
Myland, after a protracted independence struggle, became independent in 1968. In 1990, there was a coup by radical military officers committed to a leftist philosophy who took over the government. They set up a Oil and Natural Gas Commission (ONGC) which required all existing oil concessions to be operated as joint ventures with the ONGC having 51% of the shares. All future oil agreements were to be production sharing agreements. SPNGC bribed General Muttonhead, the leader of the coup to make an order that the new legislation will not apply to existing concessions, particularly those with stabilization clauses in them.
Muttonhead's profligate life soon angered the younger officers who assasinated him in 2001 and set themselves up as the government of Myland. They immediately made the new legislation cancelling Muttonhead's order and taking over the concession given to BPNGC.
SPNGC immediately invoked the arbitration clause and claimed compensation. Myland refused to participate in any arbitration. The arbitration tribunal was constituted in accordance with the provisions of the arbitration clause.
Indicate the points in favour of BPNGC. Discuss how you would decide if you were the arbitrator.
2. Tillip Island was an island about 50 miles off the coast of Lostralia. The island had a population of around 500. The people of the island earned their income from selling handicrafts and providing services to the tourists to the island. The island attracted a large number of tourists as penguins turned up at dusk every-day to rest at night along its beaches. The sight of the penguins emerging from the sea was an eagerly awaited spectacle. The natural beauty of the island’s beaches and it’s suitability for sea sports was another attraction.
The Board of Investments of Lostralia called for tenders for the development of a tourist resort in Tillip Island. Fentosa Corporation of Fingapore, which had experience in developing a similar resor on the island of Fentosa, was the successful tenderer. Fentosa was to build and operate the resort, recouping its investments and profits in twenty years. The resort was to be handed over to the Lostralian Tourist Board at the end of 20 years. But, Fentosa was to have an option to operate it for a further five years. The option was renewable every 5 years at the discretion of the Lostralian Tourist Board.
The resort was completed at the end of 1999 and commenced operation in 2000. It was a roaring success, making huge profits from the outset. A large number of Lostralians as well as foreign tourists flocked to the island. As a result of the raucous beer parties the Lostralians held on the island, the penguins stopped coming there in large numbers. Concerned that the main attraction of the island may disappear, the Municipality of Tillip Island sought to control the traffic of tourists to Tillip Island. It cut down the number of ferries plying from Lostralia to Tillip Island by reducing the number of licenses for ferries in 2003 to 60 % of the licenses available in 2002. The ferries were largely operated by Happy Ferries Ltd, a Lostralian owned company. As a result, the number of tourists to the island declined markedly in 2003. The profits of Fentosa fell.
The Municipality of Tillip Island announced that the reduction in the ferry licenses will continue until the penguins returned to the island in the same large numbers as in the past.
There is an investment treaty between Lostralia and Fingapore. It is exactly the same as the investment provisions of Singapore- United States Free Trade Agreement.
Advise Fentosa as to its remedies.
1. 3. “Foreign investment leads to economic development. But, for this result to ensue, there must exist a sound legal framework which seeks to harness the foreign investment to the economic objectives of development”. Discuss this statement identifiying the policy objectives in economic development and indicating how the law secures these objectives.