Runaway Tribunal? An Assessment of the Eco Oro Tribunal's Opinion on the General Exceptions

Contemporary Asia Arbitration Journal, Vol. 15, No. 1, pp. 143-170, May 2022

28 Pages Posted:

See all articles by Hou-chih Kuo

Hou-chih Kuo

affiliation not provided to SSRN

Jeffrey (Chieh) Lo

affiliation not provided to SSRN

Date Written: May 30, 2022

Abstract

After an explosive growth of both the numbers of international investment agreements (hereinafter “IIAs”) and investment treaty arbitration cases in the 90s and early 2000s, a new trend emerged to rebalance the investment protection and other objectives. This trend has led to the insertion of various new provisions or clarifications in the IIAs, aiming at reconciling the sometimes-conflicting objectives of investment protection and to regulate for environmental protection or for sustainable development. One important mechanism introduced is the general policy exception. Canadian IIAs, for instance, are the frequent tenant of this type of provisions.

While the general exception clauses in the IIAs are potentially influential, it had been largely “missing in action,” until recently. In the Eco Oro arbitral decision, the interpretation and application of the general exception clause in the Canada–Colombia free tarde agreement (FTA) was the subject of heated debate. This case provides a great opportunity to assess the utility and the policy implications general exception clauses might have.

This article provides an introduction to the Eco Oro case, focusing on the parties and the tribunal’s construction of the relevant general exception clause. The article then critically assesses the tribunal’s analysis. The authors are of the opinion that the tribunal made a mistake in considering the general exception as merely permissive. However, such an erroneous decision might still have profound implications for the future of IIA drafting and policy making.

Keywords: investor-state arbitration, bilateral investment treaty, international investment agreements, general exceptions

Suggested Citation

Kuo, Hou-chih and Lo, Jeffrey (Chieh), Runaway Tribunal? An Assessment of the Eco Oro Tribunal's Opinion on the General Exceptions (May 30, 2022). Contemporary Asia Arbitration Journal, Vol. 15, No. 1, pp. 143-170, May 2022, Available at SSRN: https://ssrn.com/abstract=

Hou-chih Kuo (Contact Author)

affiliation not provided to SSRN

Jeffrey (Chieh) Lo

affiliation not provided to SSRN

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