CYIL vol. 8 (2017)

KATARÍNA CHOVANCOVÁ CYIL 8 ȍ2017Ȏ version and comfortable replacement of sugar, their profits logically went down immediately due to the imposition of the new tax. After all three arbitral tribunals ruled in favor of the investors, holding Mexico responsible for violation of the national treatment standard, embedded in the NAFTA in Article 1102 in Chapter 11, Mexico in turn – vibrating with its defense at new frequencies – argued that the soft drink tax was a justified countermeasure, adopted against the US because of its multiple violations of the NAFTA. 56 Like in a digital gameplay with the imaginary title “ Unbind your Shackled Investor ,” the score in decisions in merit interestingly ended 2:1 in favour of the US investors in all three arbitral awards, but nonetheless with a diversification of contradicting opinions and a fragile tension among the arbitrators included. Briefly put, arbitral tribunals had to answer three questions regarding the invocation of countermeasures in relation to investment obligations, with the puzzling “ owing ” of primary obligations in international investment law to foreign investors being an issue of real theoretical contest. 57 The arbitrators in the Corn Products and the Cargill cases swiftly excluded any utility of countermeasures against investors whatsoever. The underlying philosophy here accentuated the fact that investors actually did possess both substantive and procedural “ direct ” rights 58 according to NAFTA, which should not serve as a handy bumper for countermeasures invoked by the host state in a grief that did not grow dim against the investors’ home state. 59 In contrast, the arbitral tribunal in the ADM arbitral award did not consider an application of countermeasures in relation to investment obligations owed to investors as unfair, let alone morally unhealthy. Unlike their colleagues in the Corn Products and the Cargill awards, arbitrators in the ADM dispute based their decision on stressing the nature of NAFTA Chapter 11, which according to the arbitrators’ opinion distributes primary obligations in investment law only among parties to the NAFTA, 60 which are three states, but not investors, who have acquired through the NAFTA only derivative, but under no condition direct rights. 61 It is notable that the current theory of international investment law foretells the critical approach 62 toward the view of the majority in the Corn Products and the Cargill cases on the use of countermeasures against the investors’ home state in order to bar the claim of investors, displaying an orderly application of countermeasures in the WTO law as an illustrative example of the success of the application of countermeasures within a broader setting of international economic law. Indeed, basically both the WTO Agreements and bilateral investment treaties bind the states – the contractual parties – to abstain from acting against the interests of foreign 56 Paradoxically, in a simplistic view of Mexico as transcending its own interests above interests of US entrepreneurs, holding a claim against the US was assimilated with holding a claim against any US national, including disillusioned investors. 57 PAPARINSKIS, M., Circumstances Precluding Wrongfulness in International Investment Law, ICSID Review , 2016, Vol. 31, No. 2, p. 496. 58 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 336. 59 KINNEAR, M.N., BJORKLUND, A. K. et al., Investment Disputes under NAFTA: An Annotated Guide to NAFTA Chapter 11, Kluwer Law International, The Hague, 2006, p. 1131. 60 See e.g. VAN ZIMMEREN, E., MCRAE, D., Chapter 35: Countermeasures and Investment Arbitration, op. cit., p. 498. 61 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 336. 62 PAPARINSKIS, M., Circumstances Precluding Wrongfulness in International Investment Law, op. cit ., p. 497.

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