Sources of International Investment Law
International Law Association Study Group on the Role of Soft Law Instruments in International Investment Law, July 17, 2011
29 Pages Posted: 25 Jul 2011
Date Written: July 21, 2011
This paper discusses the sources of international investment Law and highlighted the distinctive features of this branch of international law vis-à-vis general international law. Bilateral investment treaties have a predominate role in investment relations and this fact raises several questions regarding the relationships between investment and non-investment treaties. Though investment tribunals have seriously examined arguments regarding the interactions between such treaties, thus far no investment tribunal has absolved a party to investment disputes from its investment obligations (nor significantly reduced the amount of compensation to be paid to the injured party) in such cases. Despite the major role of treaties, customary rules of international law play a significant role in investment disputes, prominently to fill gaps in existing treaty law (lacuna) and interpret the particular treaty provisions in light of customary law.
General principles of law played a significant role in the formative period of international investment law, prominently in the oil concession arbitrations and in the pre-BIT era (such as in the Iran-US Claims Tribunal) but recent empirical studies indicate that they are largely neglected by contemporary arbitral tribunals. The relative insignificant role of general principles of law in contemporary investment jurisprudence may be explained by the interrelationships between the various sources of international investment law (the growing numbers of treaties and tribunals' pronouncements regarding customary rules) as well as inherent vague character of this source of law. Though 'judicial decisions' are considered as a 'subsidiary' source of public international law, almost all investment awards include numerous references to prior decisions of investment tribunals. Writers' publications are also considered as a 'subsidiary' source of international law but they are often cited by investment tribunals. In stark contrast to the practice of the ICJ, the WTO Appellate Body and the European Court of Human Rights (which rarely refer to writers' opinions), investment arbitrators refer to scholarly writings in almost all instances.
Different rules deriving from various sources of investment law may contradict each other, and investment tribunals have resorted to some rules of public international law regarding such inconsistencies (prominently the principle of 'lex specialis'); but they have effectively not applied the hierarchical rules embodied in Article 53 of the Vienna Convention regarding jus cogens, and Article 103 of the UN Charter regarding the superiority of the Charters' obligations vis-à-vis investment treaties.
Keywords: international investment Law, sources, treaties, Bilateral investment treaties, international customary law, General principles, judicial decisions, ICJ, WTO, European Court of Human Rights
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