The Rise of Domestic Courts in International Investment Law
About the Project
From the late 1960s onwards, provision was made in investment treaties for investors to take claims directly against states. Once this legal development was coupled with the conclusion of the New York Convention and ICSID Convention, which established systems for easy enforcement of arbitral awards, it looked like there was a self-contained system for resolving investor-state disputes. These disputes went to arbitration and ordinarily finished there. In the rare case that the state refused to pay on the arbitral award, courts could become involved via an enforcement action.
Most particularly over the past five years, this situation has changed. This is the core thesis of this research project, specifically that domestic courts are playing an increasingly prominent role in the settlement of investor-state disputes. What we are witnessing is the opening of a new chapter in the evolution of settlement of investor-state disputes.
And not only are domestic courts becoming more involved in enforcement or set-aside proceedings. Domestic courts are also exercising constitutional jurisdiction. Most particularly in the Americas and Europe, domestic courts are looking at the constitutional compatibility of investment treaties that their states have signed. Further, we are seeing more investor-state cases coming before domestic courts. These cases are not only concurrent cases, but there are also cases where domestic courts decide investor-state disputes using international investment law as the governing law. Finally, domestic courts are findings ways to help or hinder investor-state arbitrations. A key example of a helping-measure is the delivery of additional evidence into arbitration proceedings, while domestic courts (and domestic authorities) are also hindering start proceedings, particularly with anti-arbitration injunctions and retaliatory measures against investors for starting arbitrations.
Given these trends, this research project asks:
How is this increasing involvement of domestic courts in investor-state disputes changing international investment law?
This is the key research question.
Our preliminary research indicates that domestic courts are significantly changing international investment law. If this expected research finding is made, it would overturn the conventional wisdom that ISDS is a self-contained system, and thereby make it a field-changing scientific discovery. But more than that, it will fundamentally change how domestic courts are viewed in international investment law. Until now, they have been seen as objects of international investment law, particularly because their conduct can be subject of a claim under an investment treaty. This research project suggests that they are more than objects, but also subjects of international investment law with the power to shape it.
Collaborators
Chester Brown, University of Sydney
Stephan Schill, University of Amsterdam
Research Outputs
Workshop 1
‘The Rise of Domestic Courts in International Investment Law’, held at the University of Sydney on 26 – 28 October 2022.
Workshop 2
‘The Rise of Domestic Courts in International Investment Law’, to be held at the Max Planck Institute for Comparative Public Law and International Law on 5 – 7 July 2023.
Funding Sources
This project is being very generously funded by:
Fritz Thyssen Stiftung (EUR 15,000)
Max Planck Society (EUR 20,000)
Sydney Centre for International Law (EUR 1,000)