CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ COUNTERMEASURES AND THEIR ȍINȎCOMPARABLE CONGRUENCE … 1106, in which Mexico as a defendant used the countermeasure argument against breach of its treaty based obligations toward the US investors. It is apparent that while the arbitrators’ awards are divergent in the Corn Products case, 49 ADM and Cargill all together offer at least a little guidance 50 to future disputing parties and definitely leave some footprint in the theory of international investment law, the additional gift the Corn Products’ award clearly does show, is its profound and undeniable originality, that has been achieved because of the attached separate exquisite opinion 51 of prof. A. Lowenfeld. Virtually, his opinion speaks invaluable volumes 52 about the nature of the rights of foreign investors in investment arbitration and deserves status as essential reading for every diligent student of international investment law. Therefore, the arbitral award, rendered in the Corn Products case has been chosen as the main case for this study to illustrate the thin line the arbitrators in all three cases were walking along between tenuous surety and a singular uncertainty, while ruling on the lawfulness of countermeasures, invoked a bit wantonly by Mexico against the US investors. Simultaneously, it must be added that none of the three intertwined decisions have definitely solved the enigma of the plausibility of countermeasure application in investment arbitrations, except for producing three identical outcomes with divergent solutions proposed, and two concurring opinions with persuasive dissenting parts attached. As Paparinskins 53 concluded, “ Indeed, the complexity of the broader legal argument between the general and particular in international law suggests that the debate in investment protection law is not likely to lead to straightforward and clear answers .” At the crux of this debate in all three cases has been an excessive tax, imposed by the Mexican Congress in 2001 on one category of soft drinks, which significantly decreased the revenues of the US suppliers of sweeteners to soft drink producers in Mexico. 54 Generally, the tax did not target the soft drinks as such, but aimed practically at all soft drinks sweetened by other sweeteners than cane sugar (including a high fructose corn syrup, or “HFCS”), which was a radical legislative move that caused a massive reduction in use of all other sweeteners by soft drink producers in Mexico, abiding by the new national legislation. 55 As the US manufacturers produced “HFCS” through their subsidiaries in Mexico as a cheaper 49 For instance see a short commment in BRABANDERE, E., Investment Treaty Arbitration as Public International Law. Procedural Aspects and Implications, Cambridge Studies in International and Comparative Law, Cambridge, 2016, p. 66. 50 Similarly VAN ZIMMEREN, E., MCRAE, D., Chapter 35: Countermeasures and Investment Arbitration, op. cit., p. 496. 51 Available at https://www.italaw.com/sites/default/files/case-documents/ita0246.pdf. 52 See e.g. LOEWENFELD, A., Countermeasures, Diplomatic Protection, and Investor-State Arbitration. In: BALLESTEROS, F. A., ARIAS, D. (eds), Liber Amicorum Bernardo Cremades , La Ley, Wolters Kluwer España, 2010, pp. 747-758. 53 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 275. 54 See a short summary of the facts of the case e.g in PUIG, S.: The Merging of International Trade and Investment Law, Berkeley Journal of International Law , 2015, Vol. 33, No. 1, p. 23-27. 55 In addition, the Mexican parliament also introduced an anti-dumping duty that applied to all imports of HSFC, but the US prevailed on this issue over Mexico in the WTO panel procedure, in which it claimed a violation of GATT and GATS’s national treatment standard. However, the WTO panel (and later also the Appellate Body) held they had no jurisdiction to decide on the violation of NAFTA investment obligations. See a short comment on both WTO procedures in ALFORD, R., The Convergence of International Trade and Investment Arbitration, Santa Clara Journal of International Law , 2013-2014, Vol. 12, pp. 47-48.

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