Legitimacy and Reflexivity in International Investment Arbitration: A New Self-Restraint?

There are at least two views within investment arbitration about how to respond to legitimation problems associated with inconsistent rulings, latitudinal interpretations, and arbitral bias and conflicts of interest. Some prefer to keep the regime on course and not respond to these outside perturbations. Others prefer to take into account external influences, such as human rights and environmental commitments, in the course of investment treaty interpretation. Both understand that, whatever the response, these questions will be determined by lawyers, scholars, and arbitrators operating within the system of international investment law and not by actors operating outside of it. Both views, in other words, are congenial to systems-theoretic accounts. As articulated by Teubner, there is a proliferation of functional legal sub-systems, developing autonomously of states, each of which, in the course of maximizing internal rationality, potentially is on a collision course with other operative sub-systems. These can only be forestalled if sub-systems act reflexively by devising strategies of self-limitation that selectively internalize objections emanating from external spheres. As this maps on to self-understandings of actors operating within investment arbitration, this paper takes up systems theory as a heuristic for assessing the regime’s responsiveness to outside influences. In order to take stock of the degree of reflexivity, the paper examines the direction investment law is taking in a few key areas: first, in the shift in emphasis away from expropriations (the ‘takings rule’) to the fair and equitable treatment standard, which is performing similar functions; second, in the attempt to merge global standards by embracing World Trade Organization Appellate Body decision making; and third, the hesitant embrace of proportionality doctrine as a means of weighing public interests into the equation. These moments of reflexivity turn out to be modest in reach and so unlikely to calm objections emanating from states and social movements. What likely will be necessary is intervention into and steering by states of the regime, an intervention that is anathematic to Teubner’s system-theoretic account

Exchanging Constitutions: Constitutional Bricolage in Canada

Judicial recourse to constitutional law sources from abroad has been likened to the process of bricolage--coined by anthropologist Claude Lévi- Strauss, this refers to the borrowing from materials readily at hand. Building on the idea of constitutional borrowing, this paper aims to take account of the role dominant political culture plays in constitutional interpretation, in particular, the values associated with economic globalization. If resort to comparative constitutional sources is on the rise, dominant political culture will likely have the effect of limiting the stock of tools available to judges. The author argues that, in an age of economic globalization, the buyer-seller model of constitutional interpretation will be one of the principal interpretive sources readily at hand. This is a model which valorizes market relations of free and mutual exchange, ideas familiar to U.S. constitutional law particularly in the Lochner era. It is argued that this market model has emerged as an important mode of interpretation in Canadian constitutional law since 1982. This is suggested by an examination of recent decisions in the realms of federalism, Charter rights, and Aboriginal rights, though not all cases can be explained in this way. Nor is this a phenomenon isolated to Canada; rather, it is to be expected that the buyer-seller model will have universal appeal, for it appears to be the best available method of securing economic success in an era of intense competition between national states for foreign capital

Exchanging Constitutions: Constitutional Bricolage in Canada

Judicial recourse to constitutional law sources from abroad has been likened to the process of bricolage--coined by anthropologist Claude Lévi- Strauss, this refers to the borrowing from materials readily at hand. Building on the idea of constitutional borrowing, this paper aims to take account of the role dominant political culture plays in constitutional interpretation, in particular, the values associated with economic globalization. If resort to comparative constitutional sources is on the rise, dominant political culture will likely have the effect of limiting the stock of tools available to judges. The author argues that, in an age of economic globalization, the buyer-seller model of constitutional interpretation will be one of the principal interpretive sources readily at hand. This is a model which valorizes market relations of free and mutual exchange, ideas familiar to U.S. constitutional law particularly in the Lochner era. It is argued that this market model has emerged as an important mode of interpretation in Canadian constitutional law since 1982. This is suggested by an examination of recent decisions in the realms of federalism, Charter rights, and Aboriginal rights, though not all cases can be explained in this way. Nor is this a phenomenon isolated to Canada; rather, it is to be expected that the buyer-seller model will have universal appeal, for it appears to be the best available method of securing economic success in an era of intense competition between national states for foreign capital

Judicial Politics and International Investment Arbitration: Seeking an Explanation for Conflicting Outcomes

In taking on the controversial debate over the role of state attorneys general in antitrust enforcement, the article draws upon recent legal and historical scholarship on federalism to argue that globalization requires a paradigm change in concepts of U.S. federalism. While many assume that increasing international economic integration makes state participation in economic regulation with international implications inherently problematic, the article demonstrates that, to the contrary, states have an important role to play in the regulation of international business. States have a long history of challenging the federal government in a way that has promoted a robust national dialogue on matters of public policy. In addition, states have historically played and should continue to play a vital role in safeguarding the health, safety, and welfare of the American public. Historical research reveals that the view of state governments as protectors of the public interest formed an important part of the Founders\u27 vision. Globalization may suggest that states are not capable of carrying out this function independently of the federal government. But the fact that today\u27s local threats to state residents now often spring from international sources does not suggest that states should renounce their traditional role as guardians of the public welfare. Indeed, it makes that role all the more important

Judicial Politics and International Investment Arbitration: Seeking an Explanation for Conflicting Outcomes

In taking on the controversial debate over the role of state attorneys general in antitrust enforcement, the article draws upon recent legal and historical scholarship on federalism to argue that globalization requires a paradigm change in concepts of U.S. federalism. While many assume that increasing international economic integration makes state participation in economic regulation with international implications inherently problematic, the article demonstrates that, to the contrary, states have an important role to play in the regulation of international business. States have a long history of challenging the federal government in a way that has promoted a robust national dialogue on matters of public policy. In addition, states have historically played and should continue to play a vital role in safeguarding the health, safety, and welfare of the American public. Historical research reveals that the view of state governments as protectors of the public interest formed an important part of the Founders\u27 vision. Globalization may suggest that states are not capable of carrying out this function independently of the federal government. But the fact that today\u27s local threats to state residents now often spring from international sources does not suggest that states should renounce their traditional role as guardians of the public welfare. Indeed, it makes that role all the more important

Against Constitutional Excess: Tocquevillian Reflections on International Investment Law

Contributing to democratic malaise in operative democracies are transnational constitution-like commitments, such as those found in international investment law. Among its constraints, citizens are legally discouraged from initiating policy innovations that will upset investment expectations. Yet, one of the great virtues of democratic society, according to Alexis de Tocqueville, is the capacity of people to change their minds: an ability to repair mistakes. Though the threat of continual legislative innovation resulted in costly instability, it served as a catalyst for an energetic public and private life. So as to tame the threat of intemperate change, Tocqueville looked to the guiding hand of lawyers and judges—the functional equivalent of an aristocracy—to moderate majoritarian excess. International investment lawyers have lost sight of the equilibrium that Tocqueville envisaged, privileging legal disciplines over the ability of democratic polities to experiment and innovate. For Tocqueville, democratic life would be intolerable and citizens reduced to a “herd of timid and industrious animals” if too many constraints were placed upon legislative energy. This Essay brings Tocqueville’s lessons to bear on the field of international investment law. It pleads for a reduction in the influence of lawyers and their legal strictures, beyond those constraints contained in national constitutional systems, on democratic practice