Leïla Choukroune (Ed.) - Judging the State in International Trade and Investment Law : Sovereignty Modern, the Law and the Economics

Centre for Social Sciences and Humanities (CSH), New Delhi, India

Lela Choukroune

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The question of justiciability has always been at the centre of international law and the rule of law in international society. The world has dramatically evolved since the 1930s post-Weimar Constitution debates: actors have multiplied and States successively lost and regained presence in economic affairs through the adoption of liberal economic policies and, later, the emergence of new State capitalists in the former socialist countries converted to market economy, but performing Lauterpacht test of justiciability still enables the State, as well as the individual, to address the proper role of law in the international community and, eventually, the relationships between law and politics as expressed in the concept of State sovereignty. Is it then that some disputes are not justiciable as a consequence of this doctrine of sovereignty? For Lauterpacht, the response was negative as long as the rule of law was respected and the applicable rules enforced so that there were no issues of a greater importance than others and the judges and arbitrators did not lack means to apply the law in innovative ways, and to set aside rules that appear to be obsolete or unjust. The resonance with todays trade and investments dilemma is once again striking: are Bilateral Investment Treaties (BITs) negotiated in the liberal 1990s well suited to todays societal need and expectations? Is the WTO compulsory jurisdiction really providing security and predictability to the multilateral trading system as stated in the Dispute Settlement Understanding (DSU) Article 3.2 while preserving the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law without diminishing the rights and obligations provided in the covered agreements? Are trade and investment adjudicatory body decisions coherent and consistent hence participating to global legal certainty and economic security? To what extent are trade and investment disputes settled in accordance with general international law norms and principles beyond the now traditional yet rhetorical invocation of the Article 32 of the Vienna Convention on the Law of Treaties (VCLT)?

All these questions inform the reasoning of the books contributors to understand Why States are sued in international trade and investment law and why the existing systems have not always been understood as offering a greater range of flexibilities. In their chapter dedicated to claims and counterclaims under Asian multilateral investment treaties, Trisha Mitra and Rahul Donde not only consider who can bring claims and counterclaims, but also what the subject matter of these claims must be. In doing so, they tackle a number of preconceptions and show that nothing virtually restricts States from raising claims and/or counterclaims in investment arbitration while certain treaties such as the Article 17(1)(2)(a) of the Organization of the Islamic Conference (OIC) Agreement provide an equal right to a Member State to make a claim. Julien Chaisse and Dini Sejko equally stress unexpected flexibilities in the current dispute systems in analysing how State capitalism is reshaping international economic law through the precise case of States claimants in international investment disputes. Hence, they unveil a great paradox, that of regime designed to serve the interests of the private sector and which is now protecting the State as a new versatile global economic actor.

How could such a transformationand many other more controversialtake place? What are the methods and actors at the core of the trade and investment dispute resolution systems? Who judges? Quis judicabit ? as Lauterparcht could have put it, then becomes the key question. Is the lawyeras judge and arbitratorthe foundation of the rule of law? What are international judges for and what sort of function do they perform in the international trade and investment arena?

On the methods first, Prabhash Ranjan and Pushkar Anand, in their chapter on the determination of indirect expropriation and doctrine of police power in international investment law, critically examine the role of the police power doctrine in judging a claim of indirect expropriation against the host State. This is certainly an important question as it helps to understand whether this doctrine could serve as a benchmark to judge a host States regulatory measures, but also what are the influences either comparative (American) or international (customary law) under which States are judged. On the actors then, James J. Nedumpara examines the background and the key WTO disputes which triggered a policy shift in India towards the State playing a more proactive role in encouraging the building of a unique hybrid trade-related legal capacity. In doing so, he shows how the building of a national capacity upheld a particular development paradigm, of which objectives were to ensure not only market access for products that can affect the livelihood of the maximum number of people, but also safeguard the benefits of the most vulnerable and so protect States and peoples interests. The same objective seems to transpire in the Indian judiciary effort to implement international commitments. India appears as a good student of international trade for A.K. Ganguli whose chapter on the role of Indian judiciary in the realm of international trade and investment law stresses that the judiciary has not only shown deference to Indias international commitments but has gone a step further in giving effect to several international treaties and covenants through its pronouncements, even though in respect of many international treaties India has not been a signatory and, in some cases, the treaties had not been backed by legislations. However, judges are not often that internationally minded or daring and, as demonstrated by Arthur E. Appleton, in an era of court proliferation the processes of appointment of the WTO Appellate Body Members (AB) can go through many pathways and pitfalls. In view of the current WTO AB crisis, the need to critically examine an eminently political process is nothing but evident if indeed the WTO wants to fulfil its mission to provide security and predictability for the multilateral trading system.