Abstract
Access to justice has been solidified as a fundamental of both human rights law and customary law on the treatment of aliens as a result of the evolution of investment arbitration in contemporary international law. By giving them direct access to international dispute settlement systems, this development has also helped liberate people and private entities from the conventional institution of diplomatic protection. This development also raises the issue of whether the extensive reach of foreign investment guarantees into public interest regulatory obligations should not be matched by corresponding chances for access to justice and the availability of remedies for civil society in the host state. This article examines relevant current practices on the matter and argues that access to justice may be a unifying factor in guaranteeing safety to investors and people who are negatively impacted by the investment, both inside and outside the territory of the host state, on both the substantive and procedural levels.
Introduction
International investment law governs foreign direct investment and the resolution of disputes between foreign investors and sovereign nations. One of the key components establishing the range of applicability of rights and obligations under international investment agreements is the definition of investor and investment. Only investors and investments made by investors who are eligible for analysis under the applicable regulations are subject to an investment agreement. The protection applies only to these investments and investors, and they are the only ones who may file a claim for dispute resolution.
The fundamental goal of international law is to promote fairness in the following areas: foreign investors’ responsibilities and obligations; encouraging sustainable development in international investment law; the legitimacy of arbitration tribunals to resolve disputes between host States and foreign investors, and the consistency of arbitration procedures.
The establishment of international law governing the treatment of immigrants, foreign investors, and foreigners is fundamentally based on the denial of justice. This notion is, however, closely related to the larger aspect of access to justice, which is typically understood as the right of an individual for legal protection and the availability of legal antidote before a court or other comparable structure of judicial or quasi-judicial sanctuary from unfair treatment by the host countries.
However, after numerous legal challenges, immigrants continue to have trouble accessing justice. The necessity for at least some safeguarding of the lives, security, and possessions of aliens living in or visiting a foreign country evolved largely, long before the creation of the modern nation-state. The idea of access to justice only ensures access to remedial procedures within the borders and in accordance with the laws of the host state and is a fundamental component of customary international law concerning the treatment of aliens. An individual right to access justice before international tribunals is not provided for by customary international law. A legal principle known as res inter alios acta holds that a contract cannot negatively impact the rights of a third party who is not a party to it. Likewise, it does not offer a right of access to a third state’s courts, where the alleged mistreatment of an alien in another state might theoretically still be admissible.
Access to Justice and Fair Procedure as an Investor’s Right
The main advancement in the area of foreign investment law constitutes the association and recognition of a private investor’s undeniable right to access international justice, as well as the extension of this right to the courts of third countries to the extent that their cooperation is required in order to impose international investment awards for their protection. Access to justice has been strengthened as a tenet of both human rights law and customary law on the treatment of immigrants as a result of the evolution of investment arbitration in present international laws. By giving them direct access to international dispute settlement systems, this development has also helped liberate individuals and companies from the conventional institution of diplomatic protection. Recent investment disputes have demonstrated that access to justice may still be a problem even in the presence of investment safeguards under bilateral or international treaties.
Regarding a claim by a company from Canada against the United States under NAFTA Chapter 11 insinuating unequal treatment, expropriation, and a violation of efficient and reasonable guidelines as a result of litigation before the courts of Mississippi, it was stated in the pivotal case of Loewen Group v. the United States. A local competitor in the funeral business had filed a lawsuit against Loewen, alleging that the much broader Canadian company had engaged in predatory behaviour and constrained business operations. The plaintiff’s strategy throughout the jury trial was to draw attention to the local company’s benefits, commitment to supporting the neighbourhood, and struggle against the allegedly exploitative business practices of global corporate rivals.
It appears evident that these values are those that are expressly stated in NAFTA Chapter 11 i.e., non-discrimination, no unjustified expropriation, and a minimum standard of justice under international law. This requirement undoubtedly includes access to efficient corrective actions. However, the panel decided to apply the concept of “denial of justice,” which coincides with the absolute finality of legally accessible remedies, rather than concentrating on these principles and norms. Loewen sets a negative precedent for the investment community as well as for access to justice because it applies the norm of prior exhaustion of local remedies excessively strict and unrealistically in cases where there is a high risk of serious loss and an acknowledged miscarriage of justice. More so in a situation like this, where the immigrant is threatened with the execution of a hefty retaliation damages judgment and additional court safeguarding is revoked by an imprudent bond.
Whether the principle of access to justice, which has been effectively created to be beneficial to the investors through the provision of binding arbitration, ought to be matched by a corresponding right to remedial proceedings for individuals and groups adversely affected by the investment in the host state has been raised by the growing influence of foreign investment on the communion of the host state. This concern is particularly relevant where there is a real or possible connection between foreign investment and the population’s sociocultural values, environment, or health. Under normal circumstances, the legislation and the justice system of the host state should guarantee the local population’s right to access a court. The peculiarity of contemporary investment law, however, is that the host state finally delegated the resolution of issues resulting from the investment within its boundaries to an international dispute settlement body, such as ICSID, NAFTA, etc. This delegation limits the ability of national courts to handle investment disputes and subjects any judicial safeguarding they may offer in opposition to the investor injury to a thorough examination by obligatory international arbitration. The foreign investor may challenge court rulings in the host state that uphold private party allegations against them before an arbitral tribunal on the grounds that they amount to improper encroaching with the investment.
In a manner like a repudiate model of diplomatic safeguarding, this would enable the arbitration to be opened to personal allegations that the host state supports. The territorial state would support the claim of its own citizens against the investor rather than the contrary. This perspective has its limitations. Firstly, it assumes that the state is prepared to consider the grievances brought out by individuals and social groups against the investor. This is a replication of the paternalistic model of government endorsement of private claims, which accomplishes little to improve the personal right to seek justice. Secondly, in particular, where the state has approved the investment against the interests of a specific population fragment, the host state may not be interested in bringing health, environmental, or social concerns to bear on the arbitration process. Thirdly, the arbitral tribunal’s terms of reference might not allow for much consideration of counterclaims made on behalf of and in the interests of the local populations. Another alternative is to use international techniques for the protection of human rights whenever they are available and accessible to individual recourse in order to defend the local population’s right to access justice.
In another landmark case Awas Tingni v. Nicaragua, the Nicaraguan government’s determination to grant a foreign corporation a concession for logging in a region that the indigenous community of Awas Tingni claimed as ancestral territory subject to traditional tenure gave rise to a conflict between the two parties. The topic was brought before the Inter-American Commission of Human Rights and then the Inter-American Court following a convoluted series of cases before Nicaraguan courts. As a result of these proceedings, the Nicaraguan government revoked the logging concession and the Inter-American Court acknowledged that, in accordance with the American Convention on Human Rights, the Awas Tingni community’s customary right over the disputed land and their right to the conservation of their cultural ethics had to be respected. The infringement of Article 25 of the Convention was attributed to Nicaragua.
The investor’s home nation could offer diplomatic protection or turn to arbitration as a potential remedy on a global level. Amici curiae’s involvement in investment arbitration can indirectly increase the population of the host state’s access to justice options. As is well known, the institution of amici curiae is a product of common law culture, and more specifically American practice, where the adjudicative function is open to participation by people or entities who, while not being parties to the lawsuit, are nevertheless effective in providing valuable factual information and legal insights in addition to those offered by the parties in dispute.
Technically, amici curiae are not interveners because they do not defend their personal rights. They simply serve a tangential role as access to justice tools. However, to the extent that amicus curiae briefs introduce into the arbitral proceedings factual and legal considerations pertaining to the protection of public goods, such as the preservation of local cultural heritage or the protection of human and environmental health, they can develop into a potent tool to broaden the scope of investment arbitration in order to take into account public policy concerns with regard to the negative repercussion of an investment.
The extent to which state immunity may be influenced by proceedings taken before domestic courts by extraterritorial investors is the third and last facet of the right to access justice’s role in the context of international investment law that needs to be considered. The classic example is when a country defaults on bonds it has issued on the international market and then experiences an economic and financial crisis, forcing it to reschedule and reorganize its public debt at the expense of foreign bondholders.
Conclusion
Access to justice has become a value that is shared by both human rights law and investment law owing to the remarkable evolution of investment arbitration in modern international law. By enabling the former to directly challenge a state in front of an international dispute resolution body, this breakthrough has advanced the process of emancipating people and private enterprises from the constraints of the state. Given the extensive penetration of foreign investment guarantees into national regulatory areas that were typically reserved for domestic jurisdiction, the great success of investment arbitration has also brought up the question of whether a corresponding possibility for access to justice and involvement in arbitral proceedings by members of the host state’s civil society is crucial. This article’s conclusion is that this concern can be acknowledged substantively by applying the law of the disputing state to arbitral proceedings to the extent that it furthers legitimate public policy objectives and by fully implementing the fair and equitable standard to the benefit of both the investor and the population that will be impacted by the investment. The growing acceptance of amicus curiae participation in arbitration procedures supports the present trend toward a more expansive construction of civil society’s access to justice at the procedural level.
Ms. Prakriti Patnaik is an Advocate at the High Court and an Off-Counsel at D. Nayak & Associates.