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The difficult coexistence of municipal law and international law is nowhere
more evident than in the context of investment treaty disputes. Investment
treaty arbitral tribunals commonly address, as a matter of international law,
an alleged breach of a contract (or other legal obligation concerning an
investment) that is often regulated by municipal law. However, there is no
selfcontained legal system that provides substantive rules of direct
applicability for these tribunals. In practice, approaches range from complete
exclusion of municipal law to complete reliance on municipal law. While the
former has no defensible foundation in international law, an absolute renvoi
to municipal law runs afoul of the principle that international law governs
the characterization of an internationally wrongful act.
Arguing that international investment law requires a more nuanced
consideration of the role of municipal law than many arbitral tribunals have
implemented to date, this book provides a detailed, systematic approach to the
interplay of municipal law and international law in investment disputes. The
treatment focuses on the role of municipal law in providing the substance for
concepts such as contracts, property rights, and shareholders’ rights, which
are relevant in the international investment treaty context but are not
regulated under international law. Among the questions addressed are the
following:
• If the application of international law requires a renvoi to municipal law,
how should that renvoi be conducted?
• In investment disputes, what role, if any, should municipal law have in
assessing State attribution under international law?
• Should shareholders receive compensation for damages suffered by their
company due to a violation of an international obligation vis-à-vis the
company?
• May foreign investors rely on ‘expectations’ as an autonomous source of
rights in investment treaty disputes?
• Does an alleged breach of an umbrella clause transform a breach of contract
claim covered by municipal law into an international law claim?
The book’s chapters answer these and other investment law questions in depth,
drawing on analyses of the issues and implications in arbitral decisions. This
work will be welcomed by arbitrators, arbitration counsel, corporate counsel,
and scholars of international arbitration.
Preface
Acknowledgements
List of Abbreviations
Introduction The Unsettled Relationship between International Law and
Municipal Law
Chapter 1 Attribution under the Law of State Responsibility
Chapter 2 The Notion of ‘Investment’
Chapter 3 The Nationality of an Investor
Chapter 4 The Concept of Property
Chapter 5 Shareholders' Rights
Chapter 6 Contract versus Treaty Claims
Chapter 7 Umbrella Clauses: When a Breach of Contract May Become a
Breach of Treaty
Conclusion The Unsettled Relationship between International and
Municipal Law
Appendix 1 Hermann Abs and Lord Shawcross, Draft Convention on
Investments Abroad (1959)
Appendix 2 Treaty between the Federal Republic of Germany and Pakistan
for the Promotion and Protection of Investments (1959)
Appendix 3 Harvard Draft Convention on the International Responsibility
of States for Injuries to Aliens (1961)
Appendix 4 Organisation for Economic Co-operation and Development Draft
Convention on the Protection of Foreign Property (1967)
Index