UNCITRAL investment arbitration under the Agreement between the Republic of Poland and the Slovak Republic on the Reciprocal Promotion and Protection of Investments
1. One of the basic duties of an arbitrator is to sign the decisions and awards of the case in which she or he sits. That act of signing does not necessarily signify that the arbitrator agrees with all, most or even any of the contents of the decision or award. It does signify that the arbitrator confirms that the decision or award being signed is the official decision or award of the tribunal.
2. It does not matter whether the decision or award is reached by unanimity or majority or a mix of both. Each arbitrator on the tribunal has an obligation to all the parties to sign it. In the present case, the three arbitrators on the Tribunal have worked together integrally, actively, congenially and fully on all aspects of the work of the Tribunal, including in the drafting of the Award.
3. There is usually no obligation on an arbitrator who does not agree with all or part of a decision or award to append to it a separate or dissenting opinion. Indeed, the point has been made that the arbitral process would be best served if arbitrators generally did not append separate or dissenting opinions. Despite noting this, in the present case, I have decided to append a partially dissenting opinion to the Award (the "Partially Dissenting Opinion"). I am pleased to do so in the spirit of collegiality that has been a pleasant hallmark of the work of the arbitrators in this case.
4. The duty of a tribunal established under an investment treaty is to apply the terms of that treaty. Except to the degree that the text of an investment treaty directs otherwise, a dispute arising under it must be resolved by reference to public international law. The decisions and awards in an investment treaty arbitration must thus look for direction to and be coherent with public international law.
5. Public international law is a generally coherent and self-contained legal system. Like most legal systems, its principles apply throughout its corpus. The sources of public international law are set out clearly in Article 38 the Statute of the International Court of Justice. Decisions and awards of investment treaty arbitration tribunals do not fall within Article 38 and are not a source of public international law.
6. There is no doctrine of "precedence" or stare decisis in public international law. The persuasive nature in public international law of decisions of prior tribunals stems from their coherence with the corpus of public international law. Even the decisions of the International Court of Justice are only binding as between the parties to a case and in respect of that particular case.
7. These things being so, there is no legal basis for an investment treaty arbitration tribunal to adopt legal principles because they were adopted by other investment treaty tribunals. It matters not how many investment treaty arbitration tribunals have previously reached the same decision on a point of public international law. They cannot and have not thereby established or reinforced any principle of public international law. The term "investment treaty arbitration case law" is an oxymoron.
8. At paragraph 166, the Award sets out a view of the role of prior awards from other investment treaty arbitrations. The text states:
"More specifically, [the Tribunal] is of the view that, subject to compelling contrary grounds, it should follow legal principles applied in a consistent line of cases, provided of course it gives due regard to the applicable BIT and to the specifics of the particular case."
This statement is not consistent with principles about the sources of public international law. It is not consistent with the principle that there is no system of precedence in public international law. This statement does not reflect or apply public international law.
9. The rational offered in the Award for deviating from public international law principles and applying an implicit de facto rule of precedence is provided at the end of paragraph 166:
"The Tribunal adopts this approach with a view to promoting legal certainty and the rule of law."
However, misapplying fundamental principles of public international law like this achieves the opposite result. It undermines legal certainty and the rule of law. This is amplified by the irreconcilable contradiction between the Award's statement that there is no doctrine of "precedence" or stare decisis in public international law and its statement that a tribunal applying public international law "should follow legal principles applied in a consistent line of cases".
10. There are no legitimate grounds, compelling or otherwise, for an investment treaty arbitration tribunal to adopt principles that were adopted by prior investment treaty arbitration tribunals in order to ensure "coherence" to "investment treaty law" or to the "system of investment treaty arbitration". Such an approach would reflect a misunderstanding of both the sources of public international law and the way in which public international law functions, as well as the placement of investment treaties within the corpus of public international law. Public international law and investment treaty arbitration are not comparable to the so-called lex mercatoria, resuscitated by commercial arbitration lawyers in modern times and developed through careful repetition in commercial arbitration awards by commercial arbitration lawyers.
11. In public international law, there is no sub-system called "investment treaty law" or "investment law". Public international law regulates the treatment by States within their territory of foreign nationals (traditionally termed "aliens", in public international law) and their property according to the rules of State Responsibility.
Almost all substantive provisions in almost all investment treaties are codifications of the customary international law of State Responsibility, as it relates to the treatment of aliens and their property.
12. There is also no such thing as a "system of investment treaty arbitration". The international community of sovereign States has not enacted any "system" for the resolution of investment treaty disputes. Investor-State dispute settlement includes negotiation, mediation, conciliation, municipal court litigation and much else than just investment treaty arbitration. Almost without exception, investment treaties that contain international arbitration as a dispute resolution option provide for one-off arbitrations to be decided by one-time tribunals. With very few exceptions, investment treaty tribunals are thus ad hoc bodies established by the consent of the States party to the treaty with the express and only purpose of resolving a dispute that has arisen under the specific terms of that treaty. There is thus no "system of investment treaty arbitration" to which "coherence" can be given.
13. Thus, if a decision or award of a tribunal established under an investment treaty is intended to contribute to the furtherance of legal certainty and the rule of law, it must be harmonious with the corpus of public international law and, most particularly, the law of State Responsibility. A decision or award of an investment treaty arbitration tribunal cannot be a source of public international law. It is of relevance to subsequent investment treaty arbitration tribunals only to the extent that it is harmonious with that corpus of public international law. If it is, then it might provide a useful guide or a confirmation for a tribunal. If it is not, then it cannot properly be a useful reference point. A series of investment treaty awards that are harmonious amongst themselves, but not harmonious with principles of public international law, does not transform public international law by sheer weight of numbers. Nor does the quantity of such erroneous cases somehow increase the persuasiveness of their common errors of law. To the extent that investment treaty tribunals have a responsibility beyond the immediate task of resolving the dispute at hand, it is to ensure the coherence of their work with the corpus of public international law, not to seek conformity with each other's decisions and awards.
14. The Award notes that my colleagues on the Tribunal have had the opportunity to read this Partial Dissenting Opinion. In turn, I have had the opportunity to participate fully in the drafting of the Award, including in relation to the issues raised in this Opinion.
The Tribunal's discussion of all the issues, including those identified in this Opinion, have been collegial and pleasant. Nonetheless, as will be discussed below and as the reader will understand from reading the Award and this Opinion, the observations in this Opinion remain unchanged.
15. It is for these reasons that I have concluded that I have a responsibility to write a partially dissenting opinion in this case. It focuses exclusively on the issue of the Respondent's obligations under the BIT vis-à-vis the Claimant's investment that relate to the Respondent's promulgation of the Constitutional Amendment. In my view, the Award's treatment of this issue is not consistent with principles of public international law. I consider that I have a duty to both Parties (to each of which I owe equal obligations, as an arbitrator) to set out my understanding of the correct interpretation of the relevant public international law principles at issue, insofar as the Constitutional Amendment relates to the Claimant's investment. My sense of responsibility to do this for the Parties is underscored by the fact that the Claimant is still the owner of an investment in the Respondent. Public international law will therefore remain applicable to aspects of their ongoing relationship (and, indeed, to the relationship between the parties to the BIT) even after the issuance of the Award.
16. This Partially Dissenting Opinion is a skeletal roadmap designed to enable the Parties to follow my analysis efficiently. It is therefore deliberately concise. It does not reference every relevant source of customary and conventional international law. It does not address every aspect of the Award's analysis of the provisions of the BIT that apply to the promulgation of the Constitutional Amendment. It does not address questions of fact, except insofar as errors of law have led to relevant evidence on the record not being taken into account or analysed in the Award on this issue.
94. Insofar as the conduct of the Respondent, by its promulgation of the Constitutional Amendment, is evaluated against all of the relevant evidence on the record by reference to the intention of the Respondent (as asserted in this arbitration) of preventing the export of its water, the exemption being provided only for bottled mineral water is discriminatory, arbitrary and unreasonable, disproportionate and inconsistent. Insofar as the conduct of the Respondent is evaluated against all of the relevant evidence on the record by reference to its intention to pursue simultaneously the distinct policy of promoting jobs, value-added and tax for itself, it also violates the BIT on the same grounds. Either way, the conduct of the Respondent in promulgating the Constitutional Amendment (in the aspect of promoting its domestic industrial policy but not in the aspect of protecting the environment and ensuring its water supply) violated its obligations under the BIT vis-à-vis the Claimant and its investment.
Robert G. Volterra
7 October 2020