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June 01, 2013

Consistency in the interpretation of substantive investment rules: is it achievable?


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Partner Yas Banifatemi (Paris-International Arbitration) has published an article, “Consistency in the interpretation of substantive investment rules: is it achievable?,” in Prospects In International Investment Law And Policy, Proceedings of the World Trade Forum 2011, at 200 (R. Echandi & P. Sauvé eds., Cambridge University Press, 2013), June 1, 2013. The following is an excerpt.

“With the accelerating pace of the development of international investment law, tension seems to be growing between the requirement that each dispute be resolved on the basis of the relevant investment treaty, whose application and interpretation is the duty of the arbitral tribunal constituted to settle that dispute, and the desire to achieve consistency in the interpretation of the law. In the words of the International Court of Justice (ICJ), 'justice of which equity is a manifestation ... should display consistency and a degree of predictability.' At the same time, consistency can only be achieved within the ambit of the same or substantially the same substantive rules.

Indeed, there has been much ado about a perceived lack of consistency in the international investment law and arbitration regime. The phrase 'legitimacy crisis' is often heard. Yet, much of the criticism and commentary seems not to take into consideration the structural framework of the regime (section B). Often the actual reasons for divergence are overlooked. So too are the points of convergence. This is not to say that unhappy instances of inconsistent case law do not exist. They do and merit consideration, to the extent, in particular, that they may reflect policy issues. Consistency and inconsistency should thus be viewed in context (section C). Yet again, signs of maturity of the regime can be seen in the instances of emerging jurisprudence constante. Greater consistency may be achieved, provided the reality of what can be achieved is discerned from the myth (section D). Each of these propositions will be addressed in turn.”

View the full article, Consistency in the interpretation of substantive investment rules: is it achievable?