CYIL vol. 8 (2017)

KATARÍNA CHOVANCOVÁ CYIL 8 ȍ2017Ȏ home state. To the regret of supporters of the theory of investors’ direct rights, 40 it cannot be accepted that the very fact that the host state has taken these steps ought to be always condemned immediately as being absolutely impermissible. This has much to do with the current progressive understanding of every investment treaty as being a triangle (or a trichotomy) of mutual relationships of investors, 41 their home states and the host states, instead of its perception as a comfortable marriage of all investor’s rights and all home state’s and host state’s duties. As Roberts 42 explained, “ Ideal treaty parties protect foreign investors as a means to the end of promoting foreign investments, which is one element they must consider alongside others in seeking to maximize social welfare .” Actually, the investors’ direct substantive and procedural rights are not totally absolute or immune, unless they have been defined and listed as absolute and immune in the relevant investment treaty – otherwise the mistaken image would have grown on the investors’ aura of one hundred percent sterile untouchability. On the other hand, Paparinskis 43 hinted in the right direction: “ Even though the host state may in principle apply countermeasures to investment obligations, their effect and limits depend on the nature of investors’ rights.” Be that as it may, neither diplomatic protection, nor countermeasures have been excluded in general in international investment law, 44 but for the Washington Convention 45 (”the ICSIDConvention”), which in Article 27 (1) made the relevant customary international law effectively redundant during all pending ICSID arbitrations. 46 However, the ICSID arbitration with its hard and fast rules is perhaps too ideal (at least in theory) due to its autonomous character and avoidance of interference of any state in any manner, including also recourse to diplomatic protection or countermeasures, 47 which is the goal it has always relentlessly pursued. Nevertheless, there is a still harder case that arises beyond the ICSID Convention’s tentacles. Given that there is no customary law rule governing the investment disputes’ settlement, the feasibility application of countermeasures in international investment arbitrations may be tracked only by prudent interpretation of relevant investment treaties, while always taking into account also the customary law of countermeasures and all available jurisprudence. 48 Therefore, of significance in this respect are thus undoubtedly the three abovementioned disputes, decided separately in the NAFTA investment arbitrations, initiated on the grounds of violation of NAFTA Articles 1102 and 40 The theory of investors’ direct rights grants investors both substantive and procedural rights in international investment arbitrations. 41 ROBERTS, A., Triangular Treaties: The Extent and Limits of Investment Treaty Rights, op. cit., p. 354. 42 Ibid , p. 357. 43 PAPARINSKIS, M., Investment Treaty Arbitration and the (New) Law of State Responsibility, The European Journal of International Law, 2013, Vol. 24 no. 2, p. 632. 44 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 267. 45 The 1965 Convention on the Settlement of Investment Disputes between States and Nationals of other States. 46 According to art. 27 (1) of the ICSID Convention, the home state of an investor is unable to file an international claim or give its diplomatic protection with regard to the dispute, which is decided in ICSID arbitration between the investor and the host state – the other party to the investment treaty. 47 ORTIZ, A. J., REVILLA-UGALDE, P., Chapter 12: The Role of National Courts in ICSID Arbitration. In: BALTAG, C., ICSID Convention after 50 Years: Unsettled Issues , Kluwer Law International, The Hague, 2016, p. 329. Equally LOWENFELD, A., Countermeasures, Diplomatic Protection, and Investor-State Arbitration, op.cit., p. 752. 48 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 267.

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