Article from: TDM 1 (2016), in Editorial
Preface - Canada
In matters of trade and diplomacy, Canada has often had occasion to demonstrate its ability to compete in a class 'above its weight'. Of this, the draft Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada is a fine example. Viewed from the European perspective, the negotiation of the agreement was a perfect opportunity to lay down the groundwork for a pan-European approach made possible by the newly established EU competence with respect to foreign direct investment.
The range of topics covered by CETA is sweeping. It spans from classical trade law matters, which are also governed, as between the parties, by WTO law, to matters of investment and investment protection. CETA also provides for public as well as mixed dispute settlement procedures. An agreement of such scope is bound to comprise areas of uncertainty and to raise a host of difficult questions. Many such questions are echoed in this collection. To give but a few examples, CETA raises issues-and attempts to resolve some of them-regarding overlap, parallel proceedings, and the risk of incompatible findings. It also raises many issues concerning the scope of substantive protections and the regulatory space afforded by CETA, and how this relates to the system of dispute settlement and the interpretation that system may give to the agreement's provisions.
The inclusion of an investor-state dispute settlement system within CETA is certainly the issue that has been the most controversial, and this finds reflection in the collection. The resistance that has come from Europe in this respect has been surprising to many Canadians not only because of its fierceness but also because of its conceptual grounding. I shall focus here on the latter. Resistance to the investor-state dispute settlement system embedded in CETA has essentially been pulling in two, opposite directions: toward a partial renationalization of available recourses, on one hand, and toward what is viewed as a 'greater' internationalization of dispute resolution, namely the institutionalization of dispute resolution based on a court model, on the other.
The first vector of resistance is reflected in the European Court of Justice's (ECJ's) Opinion 2/13 in the matter of the EU's accession to the European Convention's human rights system. The position taken by the court is that whenever an international court gets to rule on an alleged breach by the EU of its international obligations, the ECJ must have had a prior opportunity to rule on the issue. In due course, this position may well be narrowed down to apply only to matters of human rights protection. If not, no matter how insistent the argument may be that the ECJ is not a domestic court but, rather, an international court, to the external observer, the position is equivalent to turning back the clock and reinstating the exhaustion-of-local-remedies principle.
In this collection and elsewhere, this is essentially what some commentators have suggested should be done. Focusing on the idea that sophisticated judicial systems afford better protections in terms of integrity and independence than any arbitral system could offer, one version of the argument goes so far as to deny any need for international recourse between Canada and Europe. Yet, the experience of commercial arbitration would seem empirically to deny any basis for this view. Commercial operators, including those doing business between Canada and Europe-in jurisdictions boasting some of the world's most respected judicial systems-demonstrably prefer international tribunals. They tend to vote with their feet, and in international cases where the court would share the nationality of one of the parties, they find that even the very best judiciaries do not offer the same assurances of impartiality and independence as can be secured in the international setting of arbitration.
Going in the opposite direction, the other vector of resistance bets on the superiority of international 'courts' over ad hoc tribunals and looks, at first glance, like a vote of confidence for internationalization. If widely accepted constitutional protections of judicial independence (such as independent appointments, security of tenure, financial security, and administrative independence) can be replicated in the institutional design of specialized international courts, what could possibly go wrong? One answer to this may lie in questioning whether the detailed protections evolved in the domestic context are apposite here. Another answer points to the considerable difficulties involved in fully working out the nuts and bolts of constituting a new international court, particularly if one takes a hard look at the pool of possible candidates and the incentives they may respond to. Yet another answer, which is related, would be to remind ourselves that, unlike domestic courts, the international courts we have succeeded in establishing actually tend to retain essential features of arbitration: their jurisdiction normally depends on the parties giving their consent, and the parties have a say in constituting the panel entrusted with deciding their case. Upon further scrutiny, therefore, what looks like a vote of confidence for internationalization may be closer to a vote for a certain kind of institutionalization, a kind modelled on domestic courts.
It is this vector of resistance that ultimately carried the day when, as part of a process designated as legal scrubbing, an investment tribunal and an appeal mechanism were established. The scrubbing, as with Aladdin's lamp, brought out something of which there had been no trace. This is not the place for a detailed analysis of the new investor-state dispute settlement provisions in CETA. One can legitimately wonder, however, whether the imperfections of the arbitration system, some of which had already been addressed in the CETA draft text, could possibly justify its being replaced by an untested mechanism drawn up in relative haste and whose details largely remain to be worked out. The contemporary success of international arbitration, its demonstrated ability to establish and to shape a system of international legal principles and to hold states to those principles cannot be denied. Though admittedly imperfect, the arbitration system is now embedded in sophisticated international practices that contribute significantly to international governance. To build upon those practices with a view to improving them would have seemed more reasonable than to throw them out altogether, in favour of an uncertain model apparently based on domestic judicial analogies whose relevance remains questionable.
Justice and the rule of law have never been brought about by fiat alone. For them to take root anywhere, the development of shared cultural, social, and legal practices is required. This can only happen with time. The modest hope I wish to share here is that the required practices will swiftly and smoothly follow political will so as to ensure that CETA achieves its very considerable potential.
L. Yves Fortier
 Dispute resolution policies of international corporations
generally recommend arbitration over litigation irrespective of
the judicial options. See 2010 Queen Mary University of London
and White & Case, '2010 International Arbitration Survey: Choices
in International Arbitration' 5
 For a recent and thorough survey of these protections, see Anja Seibert-Fohr (ed), Judicial Independence in Transition: Strengthening the Rule of Law in the OSCE Region (Springer 2012).
 See Ruth Mackenzie and Philippe Sands, 'International Courts and Tribunals and the Independence of the International Judge' (2003) 44 Harv Intl LJ 272; Fabien Gélinas, 'The Dual Rationale of Judicial Independence' in Alain Marciano (ed), Constitutional Mythologies: New Perspectives on Controlling the State (Springer 2012).
 See Fabien Gélinas, 'The Independence of International Arbitrators and Judges: Tampered With or Well-Tempered?' (2011) 24 NY Intl L Rev 1.