Protecting Social Rights Using the Amicus Curiae Procedure in Investment Arbitration: A smokescreen against third parties?

The participation of a third party in investment arbitration is a relatively recent practice.[1] It is based on the fact that investment arbitration involves a state party bound to protect the common interest and usually addresses general measures and questions of public interest. The amicus curiae (friend of the court) is an entity or person not party to the dispute who wishes to present legal arguments before a court or arbitral tribunal.[2] Although third parties are supposed to simply assist the arbitral tribunal, they often seem to defend causes similar to those defended by one of the parties to the dispute. These causes include internationally recognized social rights, which the facts of the case may threaten.

Amici curiae are admitted under strict conditions in order to protect the equal rights of all parties in the dispute. The admission of amici curiae also lends legitimacy to the investment arbitration process. This calls for an examination of the consideration arbitral tribunals give to the pleadings submitted by amici curiae—in this case, to the arguments relating to social rights. This piece will cover the already problematic question of admission (Section 1) and the issue of the place of social rights in amicus curiae briefs (Section 2) and examine the impact of the arguments (Section 3) for lessons to be drawn (Section 4).

1. Evolution of the approach to admitting an amicus curiae

The admission of amici curiae has evolved through the clarification in arbitration rules and investment treaties of the mandate of the arbitrator. Indeed, decisions to refuse amici curiae were based on the consensual nature of arbitration,[3] while decisions to admit them were based on the procedural nature of the amicus curiae,[4] the presence of a public interest[5] or the procedure’s legitimizing effect.[6]

Arbitration rules and investment treaties also established the jurisprudence relating to the conditions of admission.[7] They require that petitioners demonstrate their economic independence, the existence of an alternative argument and a general or significant interest, as well as to respect the material context of the dispute and the procedural equality of the parties. Some treaties implicitly reference jurisprudence by citing examples of conditions.[8]

However, despite being nonprohibitive,[9] these conditions remain restrictive (lack of a right to amicus curiae, limited rights of admitted amici).[10] Moreover, these texts rarely address what consideration should be given to amicus briefs. Some recent treaties specify at most that the tribunal is not required to respond to all arguments[11] or even to discuss any argument at all.[12]

2. Place of social rights in amicus curiae briefs

In defending the rights of populations,[13] amici curiae often rely on arguments related to social rights, in particular the right to water,[14] the right to health,[15] the right to food[16] and labour rights.[17] These rights are sometimes cited in connection with the rights to life, dignity,[18] a healthy environment, information and consultation,[19] as well as with public health and the environment.[20]

A variety of texts are cited as providing a legal foundation, including texts concerning human rights and the rights of Indigenous Peoples,[21] soft law instruments on CSR[22] and national constitutions.[23]

In general, the briefs rarely[24] spend time contesting the tribunal’s authority to rule on the matter. They are often sympathetic to the position of the state because the action under dispute has arisen either from an individual measure terminating an activity that poses a threat to social rights (mining[25] and water service[26] concessions) or from a general measure aimed at protecting the social rights (regulation of harmful products,[27] agrarian reforms).[28]

3. Difficulty of presenting effective arguments relating to social rights

The tribunals’ discretion in considering arguments makes it difficult to identify the criteria that determine an argument’s success or failure. However, even when no references can be found in the award, one can evaluate the effectiveness of an argument by distinguishing between those that support the application of international human rights law in order to assess states’ obligations relating to social rights and those that do not.

Arguments that support the application of international human rights law are never effective, because the tribunals do not accept that a reference to the principles of international law equates to an admission of the applicability of international law universe in the investment treaty.[29]

Likewise, any implication made in the agreement about the applicability of soft law or external standards or the citation of CSR standards[30] or national law in the investment agreement produces the same results.

In contrast, tribunals seem to accept arguments supporting a specific rule of investment law by way of determining the reasonableness of states’ actions.[31] Presenting this type of argument is tricky, because it establishes proximity between the arguments of the amici and the tactics of the state, such that the former could support or even make the state’s case.[32] This proximity can sometimes determine the consideration of amici arguments.[33]

Also included in this category are arguments that require the interpretation of certain standards (for example, FET) in a way that is advantageous to the state, even if their relevance is not explicitly analyzed in the tribunal reasoning.[34]

4. Desirability of demonstrating the existence of a constant protection of social rights

In the short term, amici should adopt arguments based on investment law. They could demonstrate that the state has acted normally by showing that social rights obligations have been upheld. The reports, recommendations and decisions of human rights bodies could be used to support the argument.

In the long term, states could increase the chance of successfully presenting this type of argument by including investor obligations in the provisions of investment treaties, which would encourage the admission of states’ counterclaims supported by the amici curiae and abet the success of arguments based on applicable law.

Finally, if the identity of the entity presenting the argument is truly significant,[35] international organizations with an explicit mandate to protect human rights can follow the example of European Commission initiatives[36] by requiring an amicus curiae brief in any arbitration to which a member state is a party.

Author

Maxime Somda Faasseome is a doctoral candidate at the Université Grenoble Alpes. He holds a Master’s Degree in human rights from the Université Catholique de Lyon and the Université Grenoble Alpes and a university diploma in domestic and international arbitration law from the Université de Montpellier. He is currently writing his doctoral thesis on the protection of social rights in international investment law, under the supervision of Sabine Lavorel.

Notes

[1] Methanex Corporation v. United States of America, UNCITRAL, Decision of the Tribunal on Petitions from Third Persons to intervene as “Amici Curiae,” January 15, 2001. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0517_0.pdf

[2] Grisel F., & Vinuales E.-J., (2007). Amicus curiae in investment arbitration. ICSID Review, 22(2). 380–432.

[3] Aguas del Tunari S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Respondent’s Objections to Jurisdiction, October 21, 2005, para.13. Retrieved from https://www.italaw.com/cases/57

[4] Aguas Provinciales de Santa Fe S.A.and Others. v. The Argentine Republic, ICSID Case No. ARB/03/17, Order in Response to a Petition for Participation as Amicus Curiae, March 17, 2006, paras. 11–13. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0803.pdf

[5] United Parcel Service of America, Inc. v. Canada, Decision of the Tribunal on Petitions for Intervention and Participation as Amici Curiae, October 17, 2001, para. 70. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0883.pdf

[6] Aguas Argentinas S.A and others v. The Argentine Republic, ICSID Case No. ARB/03/19, Order in Response to a Petition for Transparency and Participation as Amicus Curiae, May 19, 2005, paras. 20–22. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0815.pdf

[7] See ICSID Arbitration Rules (2006), Art. 37(2). Retrieved from https://icsid.worldbank.org/en/Documents/resources/2006%20CRR_English-final.pdf; UNCITRAL Arbitration Rules (2013), Article 1(4). Retrieved from http://www.uncitral.org/pdf/english/texts/arbitration/arb-rules-2013/UNCITRAL-Arbitration-Rules-2013-e.pdf

[8] See Free Trade Agreement between New Zealand and the Republic of Korea, March 23, 2015, Art. 10.26. Retrieved from https://investmentpolicyhub.UNCTAD.org/IIA/mappedContent/treaty/3629

[9] See ICSID decisions on participation in arbitration: https://icsid.worldbank.org/en/Pages/process/Decisions-on-Non-Disputing-Party-Participation.aspx

[10] Dias Simões, F. (2016). Myopic Amici? The participation of non-disputing parties in ICSID arbitration. North Carolina Journal of International Law, 42(3), 791–822. Retrieved from https://icsid.worldbank.org/en/amendments/Documents/5.%20Fernando%20Dias%20Sim%C3%B5es.pdf

[11] See Canada–Burkina Faso BIT, April 20, 2015, Appendix IV.8. Retrieved from https://investmentpolicyhub.unctad.org/IIA/mappedContent/treaty/3557

[12] See Canada–Peru BIT, November 14, 2006, Art. 39.6. Retrieved from https://investmentpolicyhub.unctad.org/IIA/mappedContent/treaty/793

[13] See Methanex Corporation v. United States of America, Submission of Non-Disputing Parties (Bluewater Network and Others), March 9, 2004. Retrieved from https://www.italaw.com/sites/default/files/case-documents/italaw9151.pdf; Biwater Gauff LTD. v. Republic of Tanzania, ICSID Case No. ARB/05/22, Award, July 24, 2008, para. 379. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0095.pdf; Philip Morris Brands Sarl and Others v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Written Submission by the World Health Organization and the WHO Framework Convention on Tobacco Control Secretariat, January 28, 2015. Retrieved from https://www.italaw.com/sites/default/files/case-documents/italaw7422.pdf; UPS v. Canada, Amicus curiae Submissions by the Canadian Union of Postal Workers and the Council of Canadians, 20 October 2005. Retrieved from https://www.italaw.com/sites/default/files/case-documents/italaw8442.pdf; Bear Creek Mining Corporation v. Republic of Peru, ICSID Case No. ARB/14/21, Amicus curiae brief submitted by the Association of Human Rights and the Environment–PUINO and Mr. Carlos Lopez, Ph.D. (non-disputing parties), May 9, 2016. Retrieved from https://www.italaw.com/sites/default/files/case-documents/italaw7517.pdf; Pac Rim Cayman LLC v. Republic of El Salvador, ICSID Case No. ARB/09/12, Submission of Amicus Curiae on the Merits of the Dispute, July 25, 2014. Retrieved from https://www.italaw.com/sites/default/files/case-documents/italaw4195.pdf

[14] See Biwater Gauff v. Tanzania, supra note 13.

[15] See Methanex v. United States, supra note 13.

[16] Pac Rim v. El Salvador, supra note 13.

[17] UPS v. Canada, supra note 13.

[18] Pac Rim v. El Salvador, supra note 13.

[19] Bear Creek v. Peru, supra note 13.

[20] Methanex v. United States, supra note 12, para. 16 et seq.

[21] See Bear Creek v. Peru, supra note 13, citing ILO Convention no. 169.

[22] See the reports on the right to water cited in the brief submitted in the Methanex case, supra note 13, para. 16.

[23] Piero Foresti and Others v. Republic of South Africa, ICSID Case No. ARB(AF)/07/01, Petition for Limited Participation as Non-disputing Parties, July 17, 2009. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0333.pdf

[24] See Pac Rim v. El Salvador, Application for Permission to proceed as Amici Curiae, March 2, 2011. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0609.pdf

[25] See Bear Creek case. Retrieved from https://www.italaw.com/cases/2848

[26] See Biwater Gauff case. Retrieved from https://www.italaw.com/cases/157

[27] See Philip Morris case. Retrieved from https://www.italaw.com/cases/460

[28] See Piero Foresti case. Retrieved from https://www.italaw.com/cases/446

[29] See Borders Timbers and Others v. Republic of Zimbabwe, ICSID Case No. ARB/10/25, Procedural Order No.2, para. 57. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita1043.pdf. That order states that petitioners must demonstrate that inapplicability of international human rights law would render the judgement “legally incomplete” (para. 58).

[30] See the brief in the Bear Creek cases (argument on social licence only accepted in the dissenting opinion of September 12, 2017, para. 36). Retrieved from https://www.italaw.com/cases/2848

[31] The Methanex tribunal notes that “(t)he International Institute for Sustainable Development (IISD), in its carefully reasoned Amicus submission, also disagrees with Methanex’s contention that ‘trade law approaches can simply be transferred to investment law.’” Methanex v. United States, Award, August 3, 2005, Part IV, Chapter B, p. 13, para. 27. Retrieved from https://www.italaw.com/sites/default/files/case-documents/ita0529.pdf. The tribunal in Biwater Gauff finds the amici arguments “useful” and “relevant,” adding that “specific points arising from the amici’s submissions are returned to in that context” (Biwater Gauff v. Tanzania. supra note 13, paras. 392, 359).

[32] See Methanex v. United States, supra note 13, para. 2.

[33] Refusal of an argument not raised by the state (Borders Timbers, supra note 29, paras. 60–61).

[34] See Bear Breek v. Peru, supra note 13, para. 16.

[35] Cross C., & Schliemann-Radbruch, C. (2013). When investment arbitration curbs domestic regulatory space: consistent solutions through amicus curiae submissions by regional organisations. De Gruyter, 6(2),  pp. 99–102.

[36] See AS Norvik Banka and Others v. Republic of Latvia, ICSID Case No. ARB/17/47, Procedural Order No.3, October 30, 2018. Retrieved from https://www.italaw.com/sites/default/files/case-documents/italaw10169.pdf