CYIL vol. 8 (2017)

KATARÍNA CHOVANCOVÁ CYIL 8 ȍ2017Ȏ requirements, an uncertainty of assessing the proportionality of countermeasures and a risk of escalation of existing disputes, which together make the whole use of countermeasures hazardous and unappealing to states, logically there is certainly no reason why the countermeasures should be suddenly promoted in international investment arbitration. Not surprisingly, recent attempts – if not to standardize – then at least to apply the countermeasures against foreign investors in investment arbitrations when the time is ripe for the host state have proved to be a very good source of debate in the current theory of international investment law. This article is an attempt to inform this debate. Except for briefly introducing countermeasures in public international law, it describes how the countermeasures have recently been applied in international investment arbitration. It also indicates why various responses in international legal writings to the occurrence of countermeasures among arguments of the host state in three interconnected arbitrated cases were – by metaphor – reactions against nothing short of an effect of a dum dum bullet when shot from a hunter’s rifle while not aiming at the deer, but the US investors, posing involuntarily as scapegoats on their way to be sacrificed in the interests of Mexico. This article makes two separate, but interrelated claims. Echoing the motto, first it argues that consistency was of particular value in the Corn Product and Cargill awards, as the arbitrators’ line of reasoning here was consistently right, though with minor different nuances. As the tribunal in Corn Products opined, “ under international law a countermeasure can only affect the rights of the State against which it is taken, that is the State responsible for the wrongdoing, and could not affect the rights of other parties .” 72 The tribunal then inferred that the investor – the Corn Product International company (“the CPI”) as a third party did not play any part pertaining to the NAFTA based treaty relationship between Mexico and the US, including the possibility of invoking the countermeasures. In contrast, the ADM tribunal had no suspicions about the lack of its jurisdiction to decide on the wrongdoing of the US (the home state) against Mexico (the host state) 73 when it came to a conclusion similar to that of two other tribunals, however, by using the wrong method with the wrong technique when simply declaring that the countermeasure was not valid just because the two criteria of their legitimacy, stipulated in the ILC Draft Articles, were not met. 74 Startling as it appears, this seems to be the main reason why with this “ problematic argument ” 75 the arbitrators in the ADM dispute proved to be inconsistently wrong and created a flux of international investment arbitration and diplomatic protection, resurrected in strange reverse order. 76 Second, this article also argues, that in spite of the nowadays omniscient convergence of international investment and public trade law, which has brought about a fashionable intra- regime shifting and inter-regime shifting among investment and trade regimes and their rules, as well as transportation or cross-fertilization of rules and concepts across both regimes, 77 well-remembered e.g. by recent partial use of the WTO concept of necessity in investment 72 VAN ZIMMEREN, E., MCRAE,D., Chapter 35: Countermeasures and Investment Arbitration, op. cit., p. 497. 73 However, the tribunal in the Corn Products case also evaluated an alleged wrongdoing of the US against Mexico. 74 KINNEAR, M.N., BJORKLUND, A. K. et al., Investment Disputes under NAFTA, op cit., p . 1128. 75 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 340. 76 LOWENFELD, A., Countermeasures, Diplomatic Protection, and Investor-State Arbitration, op.cit., p. 748. 77 PUIG, S., The Merging of International Trade and Investment Law, op. cit. , p. 19, p. 42.

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