L T M/CL J C

LAW4038 INVESTMENT LAW 4 0 2 0 4

OBJECTIVE OF THE COURSE

The course aims at providing an understanding of the nature and function of the various legal
instruments, mechanisms and processes constituting international investment law. It further aims to
develop an in-depth understanding of key issues of the substantive law and policy of foreign investment
protection, as well as a critical perspective on the function of the law and its future development. It also
make a student understand the dynamics of dispute settlement in international investment law more
importantly in the area of investor- state investment disputes.

COURSE OUTCOME

The course will enable students to

1. develop a good understanding of international regulation of foreign investment, principles of

international investment law, regional and bilateral investment treaties, settlement of investment
disputes, and the ability to apply it to hypothetical cases;

2. appreciate the underlying policy issues at stake and how they interact with the existing legal
framework; and

3. familiar with the outstanding questions concerning the protection of foreign investments;

4. advice on the main mechanisms for the resolution of disputes relating to foreign investments.
COs: 1,2,3,4.
L
Modules Topics CO
Hrs
INTRODUCTION
1  Definition of Investment 5 1,2
 Classification of Investment
ACTORS IN FOREIGN INVESTMENT
 The Host State
 FDI-Host State Perspective
2  Home State 6 1,2
 International Institutions
 State Corporations, MNC’s, Sovereign Wealth
Funds
SOURCES OF INTERNATIONAL INVESTMENT LAW
 Identifying sources of International Investment Law
(How different is it from the sources of International
3 6 2,3
Law, Art. 38 of the ICJ Statute)
 Understanding treaty interpretation of international law.
 Distinguishing between treaty-based and customary
 international law-based obligations. Are there ways in
which treaty-based and customary international law-
based obligations complement and reinforce each other?
 Interplay between municipal laws and international law.
CONTROL BY HOST STATE
 Permanent Sovereignty Over Natural Resources – NIEO -
Charter of Economic Rights and Duties
 Distinguish between lawful and unlawful expropriations.
 Does partial take amount to expropriation?
 Consider appropriate role of the doctrine of ‘legitimate
4 6 2,3
expectations’ for determining expropriation
 Identify types of acts that should be considered ‘police
powers’ and therefore not compensable expropriations
 Consider the wisdom of a government’s embarking on a
program of privatization of key industries
 Regulation and expropriation
INSTRUMENTS IN INTERNATIONAL INVESTMENT
LAW
 Factors affecting investment climate and the role of
instruments in investment protection
 History of instruments dealing with international
5 investment protection 6 2,3
 Role of BIPA/BITs/ CEPA/ FTAs
 Role of World Bank and ICSID
 Consider what constitutes an “investor” and ‘investment’
under a treaty
 Consent and Jurisdiction
BILATERAL INVESTMENT TREATIES (BITS)
 Reasons for BITS
 Features of BITS
6  New concerns in BITS 5 3,4
 Double Taxation Treaties
 BITS and dispute settlement
 BITS and India
DISPUTE RESOLUTION MECHANISM IN FOREIGN
DISPUTES
 Consider why arbitration is often viewed as an attractive
alternative to litigation in domestic courts
 Identify the drawbacks to litigating in either home or host
state courts
 Identify the advantages investor-state disputes settlement
7 7 3,4
holds over state-state dispute settlement
 Identify the various sources for consent to an investment
arbitration
 Learn about ‘fork-in-the-road’ clauses
 Consider the potential overlap between domestic causes
of action and international investment law claims
 Examine the waiver of the exhaustion-of-local-remedies
 rule
 Review the identity of the most frequent defendants in
investment cases
 Discuss the qualities an arbitrator in an investor-state
dispute settlement case ought to have
 Consider the ethical dilemmas faced by arbitrators in
investor-state dispute settlement
 Amicus curie in International Investment Arbitration
 Amicus Curiae Participation in Investment Disputes: The
Recent Trends
 NGOs as Amicus Curiae
 Moving beyond NGOs in Amicus Curiae Participation
 The implications of recent trends in Amicus Curiae
participation
 The Negative Aspects of allowing Amicus Curiae
participation
 Developing formalized criteria for Amicus Curiae
participation in Investment Disputes.
DISPUTES/’UMBRELLA’ CLAUSES AND REMEDIES
 Distinguish between treaty-based claims and contract-
based claims
 Learn about ‘umbrella clauses’
 Consider the purpose or effect of an umbrella clause
 Consider how much deference a tribunal should give to
an earlier tribunal decision on the same legal issue
 Assess differences in treaty language in light of principles
of treaty interpretation
8 7 3,4
 Consider the effect of umbrella clauses on the law
applicable to the arbitration
 Discuss the availability of counterclaims in contract
claims and in treaty claims
 Consider the relationship between treaty claims and
contract claims; if an investor prevails on the latter,
should it also prevail on the former?
 Consider the role of remedies and the application of
various doctrines of compensation/ damages
INTERNATIONAL CENTRE FOR SETTLEMENT OF
DISPUTES (ICSID) AND ENFORCEMENT OF AWARDS
 Evaluate the annulment process under the ICSID
Convention
 Discuss the means for setting aside awards under the New
York Convention
9 7 3,4
 Understand the scheme for enforcement of arbitral
awards under the ICSID Convention
 Understand the scheme for enforcement of arbitral
awards under the New York Convention on the
Recognition and Enforcement of Arbitral Awards
 Assess the threat that sovereign immunity for execution
 of awards poses to the function of the investor-state
arbitration regime
 Understand the importance of the place of arbitration in a
non-ICSID case
IMPORTANCE OF INTERNATIONAL INVESTMENT
ARBITRATION IN INDIA & Other emerging issues.
 Here the focus would be on the advantages and
drawbacks of the present system through the lens of
India’s tryst with investment arbitration. We assess the
10 5 1,2,3,4
debate around the legitimacy of investment arbitration by
reviewing the academic discussion, the White Industries
v. India Award and the series of threats of investment
claims after the Supreme Court’s 2G decision and the
Vodafone/retrospective tax controversy.
Total Lecture
60
Hours

# Mode: Flipped Class Room, Case Discussions and Lectures

TEXT BOOKS

 M. Sornarajah, The International Law on Foreign Investment, Cambridge University Press

(2010).
 Muchlinski, Peter and et al, The Oxford Handbook of International Investment Law, Oxford
University Press, 2008.
 Andreas F. Lowenfeld, International Economic Law, Oxford University Press, pp.471-486
 Dolzer, Rudolf & Schreuer, Christoph, Principles of International Investment Law, Oxford
University Press, 2008
 Peter Muchlinski, Federico Ortino, & Christoph Schreuer, eds., The Oxford Handbook of
International Investment Law (Oxford: Oxford University Press, 2008)
 Campbell McLachlan, Laurence Shore, & Matthew Weiniger, International Investment
Arbitration (New York: Oxford University Press, 2007).
 August Reinish, ed., Standards of Investment Protection (New York: Oxford University Press,
2008).
 Andrew Newcombe & Lluís Paradell, Law and Practice of Investment Treaties – Standards of
Treatment (Wolters Kluwer, 2009).
 Gus Van Harten, Investment Treaty Arbitration and Public Law (New York, Oxford University
Press, 2007).
 Jose E.Alvarez, American Classics in International Law: International Investment Law, Brill
Publication, 2010

REFERENCES

 CHRISTOPHER F. DUGAN, DON WALLACE JR., NOAH D. RUBINS & BORZU SABAHI,
INVESTOR-STATE ARBITRATION 1-75 (Oxford 2008).
 Andrea K. Bjorklund, Reconciling State Sovereignty and Investor Protection in Denial of Justice
Claims, 45 VA. J. INT’L L. 809, 818-833 (2005).
 MARIEL DIMSEY, THE RESOLUTION OF INTERNATIONAL INVESTMENT DISPUTES
 5- 33 (Eleven 2008).
 Peter Muchlinski, Policy Issues, in OXFORD HANDBOOK OF INTERNATIONAL
INVESTMENT LAW 3- (Peter Muchlinski, Federico Ortino & Christoph Schreuer eds., 2008).
 Kenneth W. Hansen, PRI and the Rise (and Fall?) of Private Investment in Public Infrastructure,
in PRIVATISING DEVELOPMENT: TRANSNATIONAL LAW, INFRASTRUCTURE AND
HUMAN RIGHTS 75 (Michael B. Likosky ed., Martinus Nijhoff 2005)
 Andrew Seck, investing in the Former Soviet Union’s Oil Industry: The Energy Charter Treaty
& Its Implications for Mitigating Political Risk, 110 in THE ENERGY CHARTER TREATY:
AN EAST-WEST GATEWAY FOR INVESTMENT & TRADE (THOMAS W. WÄLDE, ed.
1996).
 THEODORE MORAN, HARNESSING FOREIGN DIRECT INVESTMENT FOR
DEVELOPMENT 113-141 (Center for Global Development 2006).
 Jeswald Salacuse, From Developing Countries to Emerging Markets: A Changing Role for Law
in the Third World, 33 INT’L LAW. 875, 885-890 (1999).
 Andrea K. Bjorklund, Improving the International Investment Law and Policy Regime: Report
of the Rapporteur, in THE EVOLVING INTERNATIONAL INVESTMENT REGIME:
EXPECTATIONS, REALITIES, OPTIONS [excerpts re distinctions between types of industries
and the protections they should engender] (José E. Alvarez, Karl P. Sauvant & Kamil G. Ahmed
eds., Oxford, forthcoming 2010).
 Peter Muchlinski, Policy Issues, in OXFORD HANDBOOK OF INTERNATIONAL
INVESTMENT LAW 3, 31-37 (Peter Muchlinski, Federico Ortino & Christoph Schreuer eds.,
2008).
 Doh, Jonathan, Peter Rodriguez, Klaus Uhlenbruck, Jamie Collins, Lorraine Eden. Coping with
Corruption in Foreign Markets. 17:3 ACADEMY OF MANAGEMENT EXECUTIVE 114, 119-
125 (2003).
 Metalclad Corp. v. Mexico, ICSID Case No. ARB(AF)/97/1 (Award) (Aug. 30, 2000) 28-63; 70-
101 (transparency).
 United Mexican States v. Metalclad, 2001 BCSC 664 (May 2, 2001), 66-76 (transparency).
 Inceysa Vallisoletana, S.L. v. El Salvador, ICSID Case ARB/03/26 (Award) (2 August 2006),
184-188; 205-107
 Campbell McLachlan, “Investment Treaties and General International Law”, International and
Comparative Law Quarterly / Volume 57 / Issue 02 / April 2008, pp 361-401.
 G Hornsey, “Foreign Investment and International Law”, ICLQ Vol.3 No.4 (Oct 1950) pp. 552-
561.
 Jonathan Crystal, “Sovereignty, Bargaining, and the International Regulation of Foreign Direct
Investment”, Global Society, Volume 23, Issue 3, 2009, pp. 225-243.
 Georfe Joffe, “Foreign Investment and the rule of law”, Mediterranean Politics, 5:1, pp. 33-49.
 Stephen M. SCHWEBEL, “The Influence of Bilateral Investment Treaties on Customary
International Law”, 98th Annual Meeting of the American Society of International Law (2004).
 Vibha Kapuria Foreman, “Economic Freedom and Foreign Direct Investment in Developing
Countries”, The Journal of Developing Areas Volume 41, Number 1, Fall 2007 pp. 143-154.
 Jeswald W. Salacuse, “BIT by BIT: The Growth of Bilateral Investment Treaties and Their
Impact on Foreign Investment in Developing Countries”, The International Lawyer, Vol. 24, No.
3, Fall 1990, pp. 655-675.
 Jürgen Kurtz, “Access to Justice, Denial of Justice and International Investment Law: A Reply to
Francesco Francioni”, EJIL (2009), Vol. 20 No. 4, 1077–1085.
 Steven R. Ratner, “Regulatory Takings in Institutional Context: Beyond the Fear of Fragmented
International Law”, American Journal of International Law, volume 102
Mode of Evaluation :
Theory : Midterm, Quizzes/challenging Assignments/Term Paper and FAT
Board of Studies : 30 May 2017
Academic council : 15 June 2017