An International Common Law of Investor Rights?

Abstract:     
Customary international law (CIL) is sometimes referred to as "international common law." In theory, however, CIL is not created like common law through the incremental decision making of tribunals, but rather results from the "general and consistent practice of states followed by them from a sense of legal obligation."

Nonetheless, there is at least one area of CIL that is being developed through a process that closely resembles the development of common law by domestic courts: the "minimum standard of treatment" which governments must accord to foreign investors. Although the minimum standard of treatment can claim a long pedigree in international law through its roots in the ancient doctrine of denial of justice, its content has always been highly indeterminate, and discussions of what types of measures it prohibits have largely focused on how egregiously a government's conduct must offend the sense(s) of justice of the members of a tribunal in order to violate the standard.

Because the minimum standard of treatment lacks a clearly defined content, it can not constitute a legitimate norm of international law. This defect can not be cured, as has been suggested by proponents of the minimum standard, by conferring the authority to define the standard's content either on the existing system of ad hoc arbitral tribunals or on a new appellate body. Such an approach would violate nondelegation principles by giving international decision makers the authority to create a continuously evolving international common law of investor rights.

Accepted Paper Series