The ‘Object and Purpose’ and Incrementalism of EU Investment Treaties: Can International Investment Law Reinvent its Identity?

Abstract

This paper explains the shift in international policies on the treaty framework for foreign investment protection towards further clarity, specificity and inclusivity. It specifically looks at a series of new free trade agreements (FTAs) negotiated by the European Union (EU), an how the investor and investment protection-centrism in investment law is giving way a multi-faceted object and purpose that takes into account public interests and interests of third parties. It chiefly argues that in light of their provisions concerning environment, health, general public interest, sustainable development, labor rights as well as investor obligations and responsibilities, new generation IIAs are increasingly becoming informed political-legal declarations. The emerging tendencies and patterns in treaty and policy-making indicate that unqualified, ambiguous international protections extended to foreign investors by earlier generation IIAs will give way to more and more inclusive IIAs assertive in their objective of protecting public interest goals such as health and environmental protection.

To that end, the paper also refers to illustrative clarifications introduced to IIAs such as investor responsibilities, Fair and Equitable Treatment (FET) requirements and indirect expropriation provisions. The paper considers some examples of how incremental arbitral elaborations have shaped otherwise vague or general language, rallying its interpretative strands under the ‘object and purpose’ analysis. It demonstrates, through a series of cases, some key developments and adjudicatory elaborations on FET and indirect expropriation and how they have arguably begun shifting the raison d’etre of investment law by finding their way into newer IIAs.

Keywords: Legal Interpretation, International Investment Law, International Arbitration, EU Free Trade Agreements, Economic Law