ABOUT TDM
|
Read and commented for TDM by Thomas Wälde
D. Steger, The rule of Law or the Rule of Lawyers, in: 3 J World Investment, 769 (2002) (information: http://www.wernerpubl.com/frame_inves.htm)
The article is about experiences with the new WTO Appeals Body. The author was formerly the director of its secretariat - it should be seen in conjunction with an article by a - now retired - prominent member of the Appeals Body: 1. Six Years on the Bench of the "World Trade Court"Some Personal Experiences as Member of the Appellate Body of the World Trade Organization Ehlermann C-D.
Journal of World Trade, 2002, vol. 36, no. 4, pp. 605-639(35)
The article deals with the development of practice and procedure. It argues that the Appeals Body had to develop on the basis of an incomplete legal basis by interpretation and filling of gaps its procedural rules and defends vigorously the controversial decision of the Appeals Body to admit "amicus curiae" briefs by non-state actors (NGOs - business associations). There is a long section on "legitimacy" of the WTO dispute process which the author bases mainly on basic rules of procedural fairness. She discusses the role of private counsel - the WTO process is, different from ECT, NAFTA and BIT-based investment arbitration an exclusively intergovernmental one; in particular developing countries now retain private counsel. There are issues of professional ethics to be developed (with an ABA working group) and in particular confidentiality. There have been cases of government parties and private counsel leaking information to in particular NGOs. Ms Steger argues, in my view perfectly correctly, that the confidentiality rules of the WTO/DSU are obsolete - attuned to an earlier time of diplomatic negotiations and not suitable for the requirements of transparency now increasingly imposed by public pressure and criticism on the WTO. On the other hand, and relying on a particular case where "business secrets" were at issue and not disclosed, she suggests special procedural rules to protect business secrets - and thereby enable their disclosure to the WTO procedures - are necessary.
S. Kozawa, Depoliticisation of International Dispute Settlement: A Comparison of the Dispute Settlement Provisions of the WTO and the Energy Charter Treaty, 3 J World Investment, 793 (2002)
The author - a senior executive of the Japan National Oil Company - compares the investor-state arbitration provisions of the ECT with the intergovernmental dispute provisions of the WTO. His brief analysis of - mainly - the provisions in both treaties concludes with the interesting observation that the direct right/standing of investors to sue governments under investment treaties is appropriate for post-investment situations, i.e. when investment has been made and exposed to risk, but that the intergovernmental dispute settlement of the WTO, with its "political filters" is more suitable for pre-investment situations, e.g. market access.
Claudia Wendrich, Ten Years after: the World Bank Guidelines on foreign direct investment - in need of revision? 3 J of World Investment 831 (2002)
This article is based on the author's doctoral thesis at University College London. It reviews the 1992 World Bank Guidelines - a set of non-binding recommendations on foreign investment law. The conclusion is that the guidelines are becoming obsolete. Comparable instruments - e.g. the 1976 OECD Guidelines for Multinational Companies - have been modernised in 2000, adding emphasis on environment, sustainable development, anti-corruption and human rights. Such modernisation is also necessary for the WB guidelines. In addition, extensive modern jurisprudence of investment arbitration tribunals - under Ch XI of the NAFTA, BITs and now the ECT - has been developing modern investment law not yet reflected in these World Bank Guidelines
V V Veeder, The 1921-23 North Sakhalin concession Agreement: The 1925 Court Decisions between the US Company Sinclair Exploration and the Soviet Government, in: 18 Arbitration International 185 (2002)
This is a series of articles by Mr Veeder, a QC and reputed arbitrator from London, on Soviet concessions, mainly concessions concluded in the New Economic Policy in the 1920s. Another article deals with the famous and pioneering Lena Goldfields case: V. Veeder, The Lena Goldfields Arbitration: The historical roots of three ideas, 47 ICLQ 747-792 (October 1998)
Mr Veeder's method is to trace the actual events through extensive archive research - very much in Russian archives now accessible. Many of these cases were not known, or not known generally and publicly. He narrates the involvement of business people, arbitrators, lawyers and Soviet functionaries, their background, interests and later (in the case of the Soviet participants usually fatal) career. Thus unfolds a generally fascinating story of business and individuals venturing into one of the most dangerous periods of the 20th century. In addition, he analyses the challenges and legal problems of the arbitral tribunals, the way they tried to apply professional skill to complex legal and political situations and the legal concepts of the concession, a hybrid between a contract and a special administrative act. Mr Veeder's analysis is very relevant today. Russia's subsoil and production-sharing legislation raise similar issues of the Russo-soviet legal tradition, i.e. the hybrid nature of the concession, its subjection to administrative and/or civil contract law. It is also far from a dry legal analysis, but a vivid historical account of foreign resource investors in a high-risk environment.
Kurt Markert, Criteria for the Determination of an Abuse of Dominant Network Distribution of Gas and Electricity, in: International Energy Law and Taxation Review 2001, 21
Professor Market, a German competition law expert, examines the use of competition law - both EU (Art. 81 and 82) and German competition law - to control abusive price fixing by the owners of natural energy transport monopolies (gas pipelines; electricity transmission grids) in Germany. Germany has not set up - as virtually all other EU countries - an independent energy regulator; transmission tariffs are negotiated, though there are agreements elaborated by the industry associations to provide a model and standard terms. Markert considers the reliance on ex-post competition law control of abusive pricing (too high prices charged for third-party access; too low prices offered by the natural monopolies competing with new entrant competitors) not workable: The natural monopoly has all interests to obstruct access to maintain its market share against new entrants; it will use protracted negotiation and litigation and excessive TPA charges to impede competition and use predatory pricing to undercut new entrants. Competition law is per se not sufficient to keep such defensive strategies of the former monopolies "within reasonable limits".
Markert examines in particular three strategies to defend existing energy monopolies: Exclusive buying operations - where EU law and emerging German jurisprudence seem to favour a 2-year maximum length in principle (subject to other issues such as the degree of exclusivity - Thyssen gas and Hoffman-Law Roche judgements); predatory pricing - with the older Akzo and the newer Deutsche Post case (2001) suggesting that the dominant company must charge full cost (not only average variable cost) and excessive prices. With respect to excessive prices, Market finds that the courts and the Commission will require an objective justification if the price exceeds 5% over and above comparative EU-wide benchmarks (Tournier and Lacazeau ECJ judgement).
Donald Regan, regulatory purpose and like products in Art. III: 4 of the GATT, 36 JWT 443
This article focuses on an issue that is currently very relevant in both GATT and NAFTA investment arbitration (in particular the Methanex case - dealing with an investor's complaint against arguably discriminatory, protectionist regulation issued by the governor of California following a large political campaign contribution by Archer Daniels, the main producer of ethanol, against Methanex, a large Canadian producer and importer into California of methanol).
Under the GATT (which influences the "national treatment" discipline under chapter XI of the NAFTA), national and foreign products must be treated equally if they are "like" and if no particular justification (Art. XX) exists. Regan discusses the important Canada-Asbestos and related cases. The question is if "likeness" is exclusively to be determined on the basis of physical characteristics, of on the basis of competition between the two types of products, with regard also to consumer preferences. Regan argues that "likeness" needs to be determined on the basis also of "regulatory intention" of the incriminated measure. He suggests that measures with a protectionist intent would create "likeness" between two types of competing products and suggests that the WTO Appeals Body has in substance, if not explicitly, already accepted this interpretation.
Protectionist intent is something to be inferred from the particular architecture of a measure, from the disregard of less restrictive alternatives, but also from an identification of protectionist political pressures that can be ascertained. This is a very detailed, sometimes repetitive and not always convincing article - in particular when trying to reinforce the argument with economic analysis. Possibly, it makes no great difference if "likeness" is, at a first level of analysis, already discarded in case no "protectionist intent" exists or if (different from Regan) if an Art. III analysis leads to the finding of "discriminatory or differentiated treatment" for otherwise similar, competing and "like" products and if then the justification is operated through analysis of the Art. XX GATT exceptions (e.g. health, safety, environment). Regan himself suggests that it makes no great difference in terms of the burden of proof of prima facie evidence where the "environmental" justification is dealt with - injected into the "likeness" analysis of Art. III or the "justification" under Art. XX.
The article is most relevant with respect to its analysis of the relevance and evidence for "protectionist intent " ("so as to afford protection to domestic producers"). In the Myers-Canada NAFTA case, there were explicit protectionist statements made by the competent Canadian Minister; in the on-going Methanex case, the link between a campaign contribution by Archer Daniels (in my view pure political corruption) and the protectionist measure by the Californian governor in favour of ethanol and against methanol is equally manifest. Such indications of subjective intent will probably provide a prima-facie evidence for protectionist intent, but they are not necessary - the architecture of a measure (and its breach of least-restrictiveness standards), the political background of it can equally help to establish intent - intent is to be "inferred" from the context, target, scope, design of a measure. In terms of litigation economy, its is evidently best for a complainant to have both firm evidence of protectionist "subjective" intent by key policy-makers and being able to prove an "objective intent" from the architecture of a measure.
