Right to Regulate in International Investment Law

Catharine Titi works on issues in international investment law and international arbitration.

All in all, the present thesis is a solid work with a clear design and a good conclusion.The relevant practice and case law is comprehensively reviewed, thus presenting a reliable legal insight into a politically highly sensitive topic.

• I. Introduction II. The right to regulate: general observations A. The right to regulate: what’s in a name… B. … and what’s not in the name 1. Limiting the scope of investment protection 2. Deference afforded at tribunal discretion 3. Clarifications and interpretative statements 4. Doing away with investor-state dispute settlement 5. Elimination of the umbrella clause 6. Exceptions versus reservations C. Concluding remarks III. The right to regulate in context A. The pre-modern-investment-world regime B.WTO law, EU law and the European Convention on HumanRightsC. Some developments at the bilateral level D.Developments at the plurilateral level: the Trans-Pacific Partnership AgreementE.Developments at the collective level: the right to regulate and European investment agreementsF. Concluding remarks IV. The rationale for inserting a right to regulate A. Arbitration as a perceived threat to state regulatory freedom B. Policy space as a remedy to a systemic imbalance C. Concluding remarks V. Types of regulatory interests A. General observations B. Essential security interests 1. General observations on essential security interests 2.Essential security interests, economic crises and economic security3.Essential security interests and access to strategicindustries4. Essential interests 5. International peace and security 6. Circumstances of extreme emergencyC. Public order (ordre public)D. Regulation in the public interestE. Concluding remarks VI. Positive language on regulatory interests A. Positive language B. ‘Declaratory’ right to regulateC. The right to regulate and the preamble D. Concluding remarks VII. The right to regulate in IIAs A. General observations B. The right to regulate in the respective standards of treatment 1. General remarks2.The right to regulate and the contingent standards of treatment: most-favoured-nation treatment and national treatmenti. General observations ii. The REIO exception in the contingent standards iii.Idiosyncratic exceptions to the non-discrimination standardsiv. Non-extension of the MFN treatment to ISDS v.The right to regulate and the ‘in like circumstances’formula3.The right to regulate and the fair and equitable treatment,the minimum standard of treatment and full protection and security4. The right to regulate and expropriation i. The right to regulate and expropriation in general ii.Exception to the expropriation standard modelled on the ECHR – A consideration de lege ferenda?5. The right to regulate and the free transfer of capital i.Exceptions relating to bankruptcy, securities’trading, criminal offences, compliance with adjudicatory proceedings and the soundness of financial institutionsii.Temporary derogations in case of balance-ofpayments crises and difficulties for monetary and exchange rate policiesiii.The REIO exception and capital transfers (EU/BIT Judgments-related exception)6. The right to regulate and performance requirements 7. The right to regulate and provisions on compensation for lossesC.The right to regulate as a general regulatory clause (orgeneral exceptions applicable to the entire treaty)1. General remarks 2. General regulatory clauses and the public interest (‘General exceptions’ modelled after Article XX GATT or the right to regulate by subject: the public interest)i. General exceptions clauses modelled after Article XX GATTii. Relevance of GATT/WTO jurisprudence iii. Relevance of general exceptions clauses modeled after Article XX GATT to specific standards of treatment and regulatory interestsa. Expropriation b. National and most-favoured-nation treatment c. Fair and equitable treatment, minimum standard of treatment and full protection and securityd. Transfers of capital e. Performance requirements f. The chapeau (or equivalent) and national security exceptionsD. Concluding remarks 11The nexus requirement, self-judging clauses and the standard of review of exceptionsVIII.A. The nexus requirement B. ‘The State considers’ – Self-Judging clauses 1. General 2. The standard of review of self-judging clauses C.The standard of review in the absence of a self-judging clauseD. Concluding remarks IX. The right to regulate by subject A. Essential security interests B. Taxation C. Cultural diversity 1. Introduction 2. The exception for cultural diversity 3. Considerations for cultural policy outside the stricto sensu investment context4. Cultural exception, exception for cultural policy and the investment law contexti. The Multilateral Agreement on Investment and the exception for cultureii.France and ‘the framework of measures designed to preserve and promote cultural and linguistic diversity’iii. The European Union and the promotion of cultural diversityiv. The Canadian approach: carving cultural industries out of the scope of the agreementD. Concluding remarks X. The right to regulate beyond IIAs in general international law A. The right to regulate under customary international law as reflected in the ILC Articles1. General 2. Necessity i. Necessity and the criteria for its successful invocationii. Practical availability of the necessity defence iii. Does customary international law provide a national security defence?3. Force majeure and distress 4. Legal nature and effects of upholding a defence under the ILC Articlesi. Legal nature and operation of the defence ii. Compensation 5. ILC defences and the right to regulate. Some further reflectionsB. Ius cogens C. The clausula rebus sic stantibus and bribery D. Concluding remarks XI. Arbitral jurisprudence on the right to regulate (beyond IIAs and general international law) and the question of an implicit right to regulateA. General observations B. Arbitral jurisprudence and the legitimate interests of the host state (examination by standard)1. The fair and equitable treatment 2. Expropriation 3. Concluding remarks C. The protection of essential security interests in the absence of an express treaty-based right to regulateD. Are explicit treaty exceptions necessary to reserve policy space?E. Is an explicit treaty-based right to regulate harmful toregulatory freedom?F. Concluding remarks VI. Conclusion