Martins Paparinskis

The current (once) international law of State responsibility is shaped by the International Law Commission's articles on responsibility of States for internationally wrongful acts, generally endorsed in State and judicial practice as consonant with custom. This article makes the case that the global pandemic and associated practice may affect foundational elements of the (future) law of State responsibility. It outlines the contours of systemic grain of possible developments by reference to the tension between bilateralism and community interests in international law.

The obligation of States to provide full reparation for internationally wrongful acts, including by full compensation, is one of the bedrock principles of international law. The article challenges this principle for cases where compensation is crippling for the responsible State or its peoples, which can occur when State responsibility is implemented before international courts and tribunals. The International Law Commission's decision not to qualify full reparation for instances of crippling compensation in its influential Articles on State responsibility was an unpersuasive legal position to adopt in 2001, and its rationale has aged badly. However, the failure by States and other actors to challenge it in the following two decades signified its endorsement by the international legal process. Nevertheless, the case against the permissibility of crippling compensation in modern international law can still be made, both on a case‐by‐case basis and at the level of customary secondary rules of State responsibility.

The starting point for my reflection on general principles and the other sources of international law is the proposition that ‘general principles’ is the most peculiar source of international law. The sense of peculiarity and associated normative unease has been a theme in the discussion of general principles throughout the last century. In an intervention in the 2017 meeting of the Sixth Committee of the UN General Assembly, the Austrian representative noted that ‘[t]he source of international law known as “general principles of law” was subject to the most divergent interpretations and needed urgent clarification’.  That is not a new concern. The members of the Advisory Committee of Jurists tasked with drafting the Statute of the Permanent Court of International Justice held and articulated significantly different views about the nature and function of what was eventually expressed as ‘the general principles of law recognized by civilised nations’. 

I will discuss the five contributions to Part I against this rather daunting background, and do so in four steps, moving from the general to particular and considering in turn the relationship between general principles and the international legal order (Section 2), customary law (Section 3), treaties (Section 4), and judgments (Section 5). The key question, it seems to me, is this: is the (relative) messiness of general principles A Bad Thing, reflecting the immaturity of this aspect of the international legal architecture, or A Good Thing, providing flexibility to the international legal argument so as to better address challenges of (a particular field of) international law (at a particular stage of development)?

Casablanca opens with a shot of a revolving globe.  The intention, as the producer of the movie explained, was ‘to have a spinning globe – an unusual, interesting shot, sketchily lighted’, ‘immediately preceding the montage of the refugees’.  Before the camera zooms in to the refugee trail starting in Paris, it shows the political map of Europe, which – as a careful eye might spot -- also includes the boundaries of Estonia, Latvia, and Lithuania. Baltic States do not play a major (or indeed any) role in the movie, but a watcher familiar with the history of international relations might pause and wonder about the cartographic solution. The demarcated presence of the three Baltic States on the world map of December 1941 – when the story of Casablanca unfolds – is not an obvious choice. These States had been effectively annexed by the Soviet Union in 1940,  and in 1941 were under the effective control of the German Reich. Why, then, are they still on the map?

The legal orders of international investment law and European Union law plainly provide remedies for investors. This article does not consider whether these remedies are available to the same actors in relation to the same conduct. But it does engage in comparison of remedies under investment law, almost exclusively compensatory remedies implemented through investor-State arbitration, and remedies under EU law, particularly State liability claims in domestic courts. The comparison at the level of legal principle is not nonsensical – concepts of attribution, breach, rights, and causality do evoke somewhat similar considerations – but ultimately the extent of systemic differences as well as lack of information about crucial aspects of remedies make these matters incommensurable. Similarly, it is not obvious that comparison of practice of States that have been addressees of both kinds of remedies gets the argument much further than the comparison of principle.

The systemic role of circumstances precluding wrongfulness, both in international investment law and in international law more generally, is neither central nor, at least in the form in which they are currently expressed, likely to be of great practical importance in most cases. But circumstances precluding wrongfulness have played an important role in some international investment disputes, and provide an excellent illustration for how blackletter international law works, particularly in relation to countermeasures and necessity. If these decisions are anything to go by, future
developments will be of great interest to both practitioners and academic commentators, and directly touch upon the systemic pulse of international investment law and law of State responsibility.

International investment law is public international law.  There is nothing conceptually different, innovatory, or sui generis about it. All of its constituent elements flow from entirely unremarkable and well known law-making techniques of international law. Neither the particular elements nor the broader systemic structures present any conceptual or sui generis challenges to traditional canons of international legal reasoning.  That legal questions posed regarding international investment law pose no conceptual challenges to traditional legal reasoning is a proposition that fully applies to inquiry in relation to reassertion. Assertion of control – whether met by acceptance, acquiescence, indifference, or objection – is the usual process by which international law is made. But it does not mean that all questions will have easy and straightforward answers, or that all challenges will easily fit within familiar patterns for resolution. Reassertion of control by Contracting Parties in relation to a regime of international law (perceived as) dominated by bodies of international dispute settlement is certainly not unique, and one might point to similar developments in other areas of international law. But it does appear to be in some ways a relatively recent phenomenon, born out of reflections upon the merits of increased resort to, and creation of various judicial and arbitral institutions since the early 1990s.

Fair and equitable treatment is one of the most important rules of international investment law, yet the vagueness of its textual expression causes considerable problems in interpretation and application. In the absence of clear textual guidance, tribunals and legal writers have sometimes turned to more general concepts such as good faith and abuse of rights. Good faith plays various roles in legal reasoning about fair and equitable treatment. Sometimes it informs structures of reasoning and interpretation (as with any other rule of international law); sometimes it provides the broader background and hints at the systemic logic of a particular part of the rule; sometimes it is useful in oiling a particular bit of machinery of fair and equitable treatment; and sometimes it would be distinctly unhelpful, pulling the interpreter away from its own particularisations or even rules built on different premises. Overall, there is nothing more to this than the colloquial point about square pegs and round holes, and the sensible precaution that the systemic importance of a peg does not mean that it should be pushed down every hole.

‘Come Together’ may be pressed to explain systemic integration in two slightly distinct ways. One might emphasise coming together in the process of making, interpretation, and application of international law. And one might also emphasise the normative element in the systemic preference for the direction of coming together, providing nudges, pushes, and presumptions that guide the development of the system. I cannot do justice to the subtlety of pluralism/universality debate here, but I will state my preference for the first emphasis over the second one, expressed in caricatured form as they both are. The modest thesis of this paper, paralleling in structure the title of the panel, is twofold: first, there is no systemic preference for coming together; secondly, there may be a danger in an excessive focus on Article 31(3)(c) of the Vienna Convention on the Law of Treaties (‘VCLT’), if that leads to an overshadowing of other techniques for introducing rules of international law into the interpretative argument. The thesis will be examined in relation to two case studies: the techniques of treaty interpretation and other rules of customary law, and the presumption against conflict with other rules of international law.

The obligation of States to provide full reparation for internationally wrongful acts, including by full compensation, is one of the bedrock principles of international law. The article challenges this principle for cases where compensation is crippling for the responsible State or its peoples, which can occur when State responsibility is implemented before international courts and tribunals. The International Law Commission's decision not to qualify full reparation for instances of crippling compensation in its influential Articles on State responsibility was an unpersuasive legal position to adopt in 2001, and its rationale has aged badly. However, the failure by States and other actors to challenge it in the following two decades signified its endorsement by the international legal process. Nevertheless, the case against the permissibility of crippling compensation in modern international law can still be made, both on a case‐by‐case basis and at the level of customary secondary rules of State responsibility.

On the big questions, Simon Batifort and J. Benton Heath are plainly right.  Dogmatic presumptions about the necessary effect of particular clauses and woolly notions of systemic teleology may distract the interpreter from the task of finding the meaning that represents the intentions of the parties, best articulated in the specific terms chosen. Customary rules on treaty interpretation, reflected in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (VCLT), are meant to be flexibly adapted to the case in hand. But in applying their insight to the small print of the interpretative question, Batifort and Heath are less persuasive. Can most favored nation (MFN) clauses be generally relied upon to, as they put it, " import " substantive standards of treatment of investment protection law? The authors are critical of the apparent consensus in favor of an affirmative answer—they call it " conventional wisdom " —and in this regard seem to me to be significantly overstating their case.

My comment takes the perspective of the mainstream public international law of treaties. I will suggest that Batifort and Heath have understated the breadth of state practice in support of the " conventional wisdom. " The modest broader point is this: to approach the international legal argument with, as it were, ICSID Reports in hand and " ordinary meaning " rather loose in the holster may well be a helpful technique for drafting a pleading. However, it reflects a restrictive conception of the international legal order, where " conventional wisdom " is not a pejorative but rather a shorthand description of the process by which the shared judgement on rules of international law is formed.

The role and function of appointing authorities is an important issue in international dispute settlement, both in general and in investor-State dispute settlement in particular. The OECD Secretariat is to be commended for addressing the topic in this very fine Research Paper. I will divide my observations into three parts, addressing in turn the following questions:
(1) How does the practice of appointing authorities in investor-State dispute settlement compare with international dispute settlement more generally?
(2) What is the function of appointing authorities in international dispute settlement?
(3) Is the current practice of appointing authorities desirable, in light of their function? In particular, is the limited extent of disclosure and explicit guidance regarding relevant criteria for selection of arbitrators desirable?
The key point of my submission is that States and other stakeholders should reflect upon whether current practice of appointing authorities in investor-State dispute settlement fits within modern international dispute settlement at all; or fits only for some (particularly constituted) appointing authorities; or, finally, perhaps the limited disclosure and the delegation of hard policy calls to appointing authorities is the best possible solution, accurately reflecting the lack of underlying political consensus among the stakeholders.

The consultation paper and compilation of all comments are available at the OECD website, http://www.oecd.org/fr/investissement/consultation-isds-appointing-authorities-arbitration.htm (my comments at http://www.oecd.org/investment/investment-policy/ISDs-Appointing-Authorities-Arbitration-Compilation-March-2018.pdf 40).

Reasonable people might disagree whether the European Union (EU) is likely to make a significant and commendable contribution to international investment law. This article addresses two issues of relevance for this discussion. First, it considers the appropriateness of evaluating developments in international investment law in terms of balance between investor protection and the right to regulate. Second, the contribution of the recent EU practice is briefly examined, finding it less interesting and innovative than one might have expected.

The case study of investment treaty arbitration provides an opportunity to examine whether and how the invocation of responsibility by a non-state actor has affected secondary rules of state responsibility. This article takes the analytical perspective of investors, capable of being perceived as right-holders (by reference to human and con- sular rights), beneficiaries (by reference to the law of treaties rules on third states), or agents (by reference to diplomatic protection). The shift from the state to the investor as the entity invoking responsibility for the breach of investment treaties seems to have influenced the law of state responsibility in a number of distinct ways. The apparent disagreement about the law of state responsibility may sometimes properly relate to questions of treaty interpretation, while in other cases rules from an inter-state context are applied verbatim. In other cases, the different perspectives lead to importantly dif- ferent conclusions regarding circumstances precluding wrongfulness, elements of rem- edies, waiver of rights, and, possibly, interpretative relevance of diplomatic protection rules. The overall thesis is that conceptual challenges faced by investment arbitration may be illuminated by the solutions formed by the regimes that provided the background for its creation.