The role of international law in Article 42(1) of the Washington Convention on the Settlement of Investment Disputes

Table of Contents

I. Introduction

A. What is the ICSID Convention?

B. What regulates Article 42(1)?

C. Overview of the problem

II. Literature Survey

A. Role of international law in Article 42(1), first sentence

1. International law as the chosen law by the parties

2. International law in the absence of its choice

a) Implicit negative choice to exclude the application of international law

b) Application of international law to a certain extent

3. Conclusion and open questions concerning the role of international law under Article 42(1), first sentence

B. Role of international law under Article 42(1), second sentence

1. Supplemental and corrective role

a) Arguments

b) Criticism

2. Limited supplemental and corrective role (ius cogens)

3. Applicability at all times

a) Precedence of international law at all times

b) Autonomous application of international law

4. Conclusion and open questions concerning the role of international law under Article 42(1), second sentence

III. Research

A. Research methodology

B. Analysis

1. Textualist interpretation

a) Literal interpretation: wording

aa) Different languages

bb) “and”

b) Systematic interpretation

aa) Position of international law within Article 42(1)

bb) Other articles and provisions of the ICSID Convention

c) Conclusion from the textualist interpretation

2. Historical interpretation of the wording: preparatory work

a) Original aims

b) Preliminary and first draft

c) Discussion

d) Final vote

e) Conclusion from the historical interpretation

3. Casuistic interpretation: development of ICSID case-law

a) Article 42(1), first sentence

b) Article 42(1), second sentence

aa) Earlier decisions

bb) Supplemental and corrective role

cc) Change to a broader formulation

c) Conclusion from the casuistic interpretation

4. Comparative interpretation: analysis of external sources

a) Former practice

b) Arbitration rules

c) Multilateral treaties

d) Bilateral treaties: BITs

e) Conclusion from the comparative analysis

5. Teleological interpretation: parties’ interests

a) Claimed interests

b) Underlying interests

c) Conclusion from the teleological interpretation

IV. Conclusion and Future outlook

A. Conclusions on Article 42(1), first sentence

B. Conclusions on Article 42(1), second sentence

C. Future Outlook

Research Objectives and Themes

The research project aims to clarify the role and scope of international law within the context of Article 42(1) of the ICSID Convention, particularly regarding the interaction between national host-state laws and international legal rules in the settlement of investment disputes.

• The interpretation of Article 42(1) in both the presence and absence of a choice-of-law clause.
• The analysis of historical preparatory work and ICSID case law regarding the application of international law.
• The evaluation of the "supplemental and corrective" role of international law versus autonomous application.
• A comparative analysis of other international arbitration mechanisms and bilateral investment treaties (BITs).
• The reconciliation of host-state sovereignty interests with investor protections under international law.

Excerpt from the Book

Summary of Chapters

I. Introduction: Outlines the increasing prevalence of international investment disputes and the foundational problem of determining the applicable law under the ICSID Convention.

II. Literature Survey: Examines scholarly debates regarding the role of international law under Article 42(1), differentiating between scenarios with and without a choice-of-law agreement.

III. Research: Provides a methodological analysis using textualist, historical, casuistic, comparative, and teleological interpretation methods to clarify the application of international law.

IV. Conclusion and Future outlook: Summarizes the findings on Article 42(1) and explores future steps, such as multilateral harmonization, to resolve lingering uncertainties in applicable law.

Keywords

ICSID, Applicable Law, Article 42(1) of the ICSID Convention, International Law, Host State Law, Choice-of-Law, Investment Arbitration, Foreign Direct Investment, Supplemental and Corrective Role, Ius Cogens, ICSID Jurisprudence, Investor-State Dispute Settlement, International Public Order, BITs, Legal Interpretation.

Frequently Asked Questions

What is the fundamental purpose of this research project?

This work aims to clarify the ambiguous role of international law within Article 42(1) of the ICSID Convention, specifically regarding how international legal rules interact with the national law of the host state during the settlement of investment disputes.

What are the primary thematic areas covered in this paper?

The core themes include the interpretation of choice-of-law clauses, the "supplemental and corrective" functions of international law, the influence of preparatory drafting documents, and the evolving trends in ICSID case law.

What is the central research question addressed by the author?

The paper asks how Article 42(1) should be interpreted to determine the applicable law in investment disputes, particularly to resolve the uncertainty surrounding the role of international law when national law is either chosen by the parties or applied by default.

Which scientific methods are employed in this study?

The author utilizes a multi-methodological approach, incorporating textual analysis of the treaty, historical review of the preparatory works, casuistic analysis of past ICSID decisions, comparative legal analysis of other international agreements, and a teleological evaluation of the interests of the involved parties.

What topics are discussed in the main analysis section?

The main part of the paper investigates the textual meaning of "and" in Article 42(1), evaluates the historical evolution of the provision's drafting, examines landmark ICSID cases, and discusses the shift toward more pragmatic, fact-specific approaches in recent arbitration awards.

Which keywords best characterize this research?

The work is best defined by terms such as ICSID, Applicable Law, Article 42(1), Investment Arbitration, and the balance between international legal norms and host-state national laws.

How does the author characterize the role of international law in Article 42(1)?

The author concludes that international law plays an increasingly important role that goes beyond a mere supplemental function, though its specific application often remains a matter of the tribunal's case-by-case interpretation.

What is the significance of the "supplemental and corrective" theory mentioned in the text?

It is the traditionally dominant theory suggesting that international law only applies to fill gaps (lacunae) in host-state law or to correct laws that violate international standards, a view that the author notes has faced significant recent criticism in favor of broader application.

What conclusion does the author reach regarding the future of this legal uncertainty?

The author suggests that true clarity may only be achieved through the establishment of substantive international investment rules or increased harmonization of national laws, as the current reliance on tribunal discretion at the interpretation stage often leads to unpredictable results.