‘This Business Will Never Hold Water’ International Investment Arbitration on Public-Private Water Service Provision - A Comment on Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania

Abstract

As a legal framework, international investment arbitration uncomfortably straddles the roles of public and private law. However, international investment arbitration jurisprudence often confuses or does not acknowledge the necessary difference between the legal principles and norms developed in the private law and public law fields. With an increase in the privatization of formerly public services, where government agencies work in partnership with international investors, and the subsequent increase in legal proceedings when public-private agreements go sour, the very types of legal disputes international investment arbitration aims to resolve mirror in many ways the amorphous public law/private law nature of the international investment arbitration regime itself. Through a discussion of Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania, a recent case on international investment arbitration on a public-private water service provision contract, I examine the capacity and legitimacy problems of the international investment arbitration system. I argue that the arbitrators in this case confused or selectively applied a mix of public and private law principles in favour of investor interests that fall profoundly out of synch with domestic legal regimes. This suggests that there are similar implications for other investment disputes where the lines between human rights, investor’s rights, and sovereign rights are less clear. This also brings into question the investment arbitration system’s capacity to navigate and prioritise competing claims, and to connect technical legal arguments with the substance of what is at stake in a decision.

Keywords: Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania, international investment arbitration, privatization, drinking water, public-private partnerships