CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ COUNTERMEASURES AND THEIR ȍINȎCOMPARABLE CONGRUENCE … Most complicated turned out to be the ADM award, which differs from the arbitral awards rendered in the Corn Products and the Cargill case in at least two principal aspects, although it produced a similar verdict and also partially similar conclusions with regard to the arbitrators’ jurisdiction to decide on Mexico’s countermeasures. As Calamita 91 explained, when tribunals in the Corn Products and the ADM case realized that their jurisdiction in investment arbitrations was not universal, but covered only claims filed under NAFTA Chapter 11., “both tribunals concluded that they lacked jurisdiction to consider whether there had been violations of other chapters of the NAFTA and that this lack of jurisdiction was fatal to Mexico’s defense under Chapter XI.” Quite apart from these commonalities, the ADM tribunal opined it did hold jurisdiction, given by NAFTA Article 1131, to decide on the countermeasure defence of Mexico, 92 and in spite of finally confirming the invalidity of that countermeasure, the ADM tribunal did not exclude its invocation as an intentional strategic obstacle 93 used to bar the investor’s claim outright, but only because the countermeasure was disproportionate, 94 and as such fell short of meeting the ILC Draft Articles criteria. As Kinear and Bjorklund 95 summed up, “the tribunal found that Mexico had not substantiated its contention that the measure in question constituted a legitimate countermeasure under customary international law as it was neither directed at inducing US compliance nor proportionate.” Similarly, the ADM tribunal granted the investors only procedural rights, which were not direct but derivative only, thus in principle accepting an application of countermeasures. 96 In contrast, unlike his co-arbitrators in the ADM tribunal, arbitrator Rovine later deviated from this view in the dissenting part of the concurring opinion. He reminded the rest of the tribunal that when the holder of private interests has independent third party rights – which was the case of the US investors in all three arbitrations – their private interests cannot be negatively afflicted by countermeasures used as a comfortable ricochet against investors, because, as Rovine stoically explained, 97 “ States do not take countermeasures against investors. They take countermeasures against States .” 98 Outspoken as he was, he also accentuated the safeguards of due process and the right to bring the claim on its own behalf, which are granted to investors as beneficiaries under NAFTA Articles 1115 and 1116, and as such create a system, which “ expressly overrides for NAFTA the system of claims espousal by investors’ governments under the mechanism of diplomatic protection .” 99 91 CALAMITA, N. L., Countermeasures and Jurisdiction, op. cit ., p. 246. 92 KINNEAR, M.N., BJORKLUND, A. K. et al., Investment Disputes under NAFTA Investment Disputes under NAFTA, op. cit., p. 1126. 93 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 341. 94 Archer Daniels Midland Co and Tate & Lyle Americas, Inc v. Mexico, op. cit., para 158, p. 53. 95 KINNEAR, M.N., BJORKLUND, A. K. et al., Investment Disputes under NAFTA Investment Disputes under NAFTA, op cit., p. 1129. 96 PAPARINSKIS, M., Investment Arbitration and the Law of Countermeasures, op. cit ., p. 336. 97 See concurring opinion of arbitrator Arthur W. Rovine, submitted in Cargill, Incorporated v. United Mexican States , para. 59, p. 31. Available at https://www.italaw.com/sites/default/files/case-documents/ita0039.pdf. 98 Similarly LOWENFELD, A., Countermeasures, Diplomatic Protection, and Investor-State Arbitration, op.cit., p. 757. 99 Cargill, Incorporated v. United Mexican States, concurring opinion of Arthur W. Rovine, op. cit ., para. 76, p. 37.

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