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Weil, P, ‘The State, the Foreign Investor, and International Law: The No Longer Stormy Relationship of a M?nage ? Trois’, 15 ICSID Rev-FILJ 401 (2000)

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Weiler, T, ‘Dodging Bullets: A First Look at the Final Award in Loewen & the Loewen Group v U.S.A.’, 4 JWI 659 (2003)

Wolfe, Robert, ‘Regulatory Transparency, Developing Countries, and the Fate of the WTO’, available at <http://www.cpsa-acsp.ca/paper-2003/wolfe.pdf>.

Zoller, E, La Bonne Foi en Droit International Public (Paris, Editions Pedone, 1977) Footnotes 1Methanex v U.S. , Partial Award, 7 August 2002 (UNCITRAL) para 139, available at <http://www.naftaclaims.com/Disputes/USA/Methanex/MethanexPreliminaryAwardJurisdiction.pdf>. 2 The NAFTA, however, appears to go further than a bilateral investment treaty in terms of the protection it offers for non-discrimination, not only offering protection for foreign investment, but also protection for investors operating in like circumstances throughout the North American Free Trade Area. 3 The most recent and best examples are R Dolzer, ‘Fair and Equitable Treatment: A Key Standard in Investment Treaties’, 39 Int'l Law 87 (2005); C Schreuer, ‘Fair and Equitable Treatment in Arbitral Practice’, 6 JWIT 357 (2005); S Fietta, ‘Expropriation and the “Fair and Equitable” Standard: The Developing Role of Investors' “Expectations” in International Investment Arbitration’, 23(5) J of Int'l Arb 375 (2006); S Schill, ‘Fair and Equitable Treatment under Investment Treaties as an Embodiment of the Rule of Law’, IILJ Working Paper 2006/6. 4 Cited at SD Myers Inc v Canada , First Partial Award, 13 November 2000 (UNCITRAL) 40 ILM 1408 (2001) at para 266. 5 Ibid at para 265, citing FA Mann, ‘British Treaties for the Promotion and Protection of Investments’, 52 Brit YB Int'l L 241 (1981). 6 For the latest figures on the number of BITs, see UNCTAD, ‘The Entry into Force of Bilateral Investment Treaties (BITs)’ IIA Monitor No. 3 (2006), available at <http://www.unctad.org/en/docs/webiteiia20069_en.pdf>. 7 As explained below, a tribunal will not apply its own, subjective view of whether treatment was ‘fair and equitable’. Rather, its appraisal must be informed by the treaty text and applicable rules of international law. The Saluka tribunal reiterates a point made by numerous other tribunals that the circumstances of the case are critical for an assessment under the standard: at para 285: ‘There is agreement between the parties that the determination of the legal meaning of the “fair and equitable treatment” standard is a matter of appreciation by the Tribunal in light of all relevant circumstances: Saluka BV v Czech Republic UNCITRAL Rules Partial Award Permanent Court of Arbitration 17 March 2006 available at <http://www.ita.law.uvic.ca/documents/Saluka-PartialawardFinal.pdf>. As the tribunal in Mondev has stated, “[a] judgment of what is fair and equitable cannot be reached in the abstract; it must depend on the facts of the particular case”.’ Mondev International Ltd v USA, Award, 11 October 2002 (ICSID Case No. ARB(AF)/99/2), 42 ILM 85 (2003) at para 304: '[The] expectations [of the investor], in order for them to be protected, must rise to the level of legitimacy and reasonableness in light of the circumstances '(emphasis in original). The same conclusion of the fact-dependent nature of fair and equitable treatment was made by the MTD tribunal. See MTD Equity Sdn Bhd & MTD Chile SA v Chile (Republic of), Award, 25 May 2004 (ICSID Case No. ARB/01/7) 44 ILM 91 (2005) at para 109, and see Waste Management, Inc v Mexico (No. 2) , Award, 30 April 2004 (ICSID Case No. ARB (AF)/00/3), 43 ILM 967 (2004) (‘Waste Management II’) at paras 99, 118. 8UNCTAD, Fair and Equitable Treatment, Series on issues in international investment agreements (New York and Geneva, United Nations, 1999). Also see UNCTAD, Investment Provisions in Economic Integration Agreements (New York and Geneva, United Nations, 2006) at 99–106; For further details about the national and MFN treatment standards in relation to investment, see UNCTAD, National Treatment, Series on issues in international investment agreements (New York and Geneva, United Nations, 1999) and UNCTAD, Most-Favoured-Nation Treatment (New York and Geneva, United Nations, 1999). 9 NAFTA Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions (NAFTA Free Trade Commission, 31 July 2001), available at <http://www.naftaclaims.com/files/NAFTA_Comm_1105_Transparency.pdf>. 10Canada's 2003 Model Foreign Investment Promotion and Protection Agreement (FIPA), available at <http://www.naftaclaims.com/files/Canada_Model_BIT.pdf>. 11United States Model Bilateral Investment Treaty (BIT) (2004), available at <http://www.nafta claims.com/files/US_Model_BIT.pdf>. 12 In 1981, when he wrote his article, Dr Mann observed that the ‘fair and equitable treatment’ and ‘full protection and security’ standards, despite being frequently included in BITs, have ‘… hardly ever been judicially considered’. Mann, above n 5 at 243. Certainly that remained the case until late 2000 when the SD Myers NAFTA award (above n 4) led a wave of new decisions on the fair and equitable treatment standard. 13 The numerous awards listed at <http://www.investmentclaims.com> is a simple and graphic demonstration of this growth. See UNCTAD, ‘Latest Developments in Investor-State Dispute Settlement’, IIA Monitor No. 4 (2006), available at <http://www.unctad.org/sections/dite_pcbb/docs/webiteiia200611_en.pdf>. The total cumulative number of known treaty-based arbitrations increased to a new peak of 255 by the end of 2006, with the majority of those claims launched after 2000. 14 The question of apparently contradictory decisions by arbitral panels has generated a great deal of discussion concerning the need for more consistency in investment arbitration, for example by adopting some form of appellate mechanism. See the BIICL Investment Treaty Forum 2004 discussion on ‘Appeals and Challenges to Investment Treaty Awards: Is it Time for an International Appellate System?’ in Federico Ortino, Audley Sheppard, and Hugo Warner (eds), Investment Treaty Law (London, British Institute of International and Comparative Law, 2006), available at <http://www.biicl.org>; Also see: I Laird and R Askew, ‘Finality versus Consistency: Does Investor-State Arbitration Need An Appellate System?’, 7 J Appellate Practice and Process 101 (2006). 15 See Bala?, ch 27 below, for a more detailed discussion of this topic. 16 Jan Paulsson made a similar observation with respect to the development of the customary principle of denial of justice: see Jan Paulsson, Denial of Justice in International Law (Cambridge, Cambridge University Press, 2005) at 10–11. 17 See Pope & Talbot, Inc v Canada , Interim Award, 26 June 2000 (UNCITRAL) at paras 96–105. The requirement for a substantial deprivation has also been recognized by more recent tribunals, such as LG&E Energy Corp, LG&E Capital Corp, LG&E International Inc v Argentine Republic (LG&E), Decision on Liability, 3 October 2006 (ICSID Case No. ARB/02/1) at paras 190–1, 199 (citing Pope & Talbot at paras 100–2), Azurix Corp v Argentine Republic , Award, 14 July 2006 (ICSID Case No. ARB/01/12) at para 322, and EnCana v Republic of Ecuador (EnCana) , Award, 3 February 2006 (UNCITRAL) at para 174. 18 This has been the subject of great debate before NAFTA Chapter 11 tribunals, and more recently before BIT tribunals, concerning whether the minimum standard must meet a threshold of ‘egregiousness’ or bad faith. The recent awards of the tribunals in Saluka above n 7 at n 18, 34, 38, 41, Azurix , above n 17 at para 372, and LG&E , above n 17, at para 129, have effectively disposed of this question, holding that the customary international standard has evolved and that bad faith is not a requirement of the fair and equitable standard. 19 This has been seen in a very practical manner by the way that investors have made their claims under the headings of multiple treaty obligations. Moreover, given the considerable expense of launching and maintaining an arbitration against a state, and the reality of old-fashioned litigation risk, it is likely that few individual claimants would come forward unless the harm suffered crossed a threshold several times that of the expected costs of the dispute. 20Saluka , above n 7, at para 461, concluded that a breach of the non-impairment standard with respect to arbitrariness and non-discrimination ‘does not therefore differ substantially from a violation of the “fair and equitable treatment” standard’. Similarly, the tribunal held that a deprivation could also be considered an impairment, if it was also unreasonable and discriminatory. However, since the tribunal ruled that there was no deprivation under Art 5 of the Treaty, the expropriation provision, there could not be a deprivation on this ground as well. See Saluka at paras 468–70. 21‘… One of the corollaries of the “general rule of interpretation” in the Vienna Convention is that interpretation must give meaning and effect to all the terms of the treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.’ See United States—Standards for Reformulated and Conventional Gasoline, Report of the Appellate Body, 29 April 1996 (WT/DS2/AB/R). The principle of effectiveness (ut res magis valeat quam pereat), as a maxim of treaty interpretation, has been recognized by the Permanent Court of Justice and the International Court of Justice. See Case Concerning the Factory at Chorz?w (1927) PCIJ Series A, Vol 2, no. 8 22; South West Africa ( Ethiopia v South Africa; Liberia v South Africa ), Judgment of 21 December 1962 (Preliminary Objections), 1962 ICJ 319, 582 (Dissenting Opinion of Judge Van Wyk). 22 A notion rejected uniformly by NAFTA tribunals. As noted by the tribunal in Waste Management II : ‘Both the Mondev and ADF tribunals rejected any suggestion that the standard of treatment of a foreign investment set by NAFTA is confined to the kind of outrageous treatment referred to in the Neer case, i.e. to treatment amounting to an “outrage, to bad faith, to willful neglect of duty, or to an insufficiency of governmental action so far short of international standards that every reasonable and impartial man would readily recognize its insufficiency”.’ Waste Management II, above n 7 at para 93. 23 The cynic might observe that the level of deference envisaged by the one making the link between the treaty standard and custom is often just enough to ensure that the particular claim at issue fails without systematically hollowing out the obligation—should it be required for future offensive use by one's own investor. This exact scenario played out in the NAFTA context with the final result being the Free Trade Commission Note of Interpretation on 31 July 2001. For a historical recounting of this period and the related NAFTA awards, see I Laird, ‘Betrayal, Shock and Outrage—Recent Developments in NAFTA Article 1105’, in Todd Weiler (ed), NAFTA: Investment Law and Arbitration: Past Issues, Current Practice, Future Prospects (Ardsley NY, Transnational Publishers, 2004) at 49. 24 For a comprehensive collection of provisions, see UNCTAD, International Investment Instruments: A Compendium (New York and Geneva, United Nations 1996–2005) Vols I–XIV, available at <http://www.unctad.rog/iia>; UNCTAD, Fair and Equitable Treatment, above n 8. 25 For example, Judge Stephen Schwebel has noted the importance of the minimum standard as part of the fabric of laws, regulations, norms, and practices regulating state responsibility and foreign direct investment. See S Schwebel ‘The Influence of Bilateral Investment Treaties on Customary International Law’, 5(2) TDM 5–6 (2005) (‘when BITs prescribe treating the foreign investor in accordance with customary international law, they should be understood to mean the standard of international law embodied in the terms of some two thousand concordant BITs. The minimum standard of international law is the contemporary standard’); also see Mondev International Limited v USA , above n 7 at para 117; CME Czech Republic BV v Czech Republic , Award, 14 March 2003 (UNCITRAL) (CME) at paras 497–8. 26ADF Group, Inc v United States of America , Final Award, 9 January 2003 (ICSID Additional Facility), 18 ICSID Rev-FILJ 195 (2003) at paras 39, 89; Mondev , above n 7 at para 121. 27 P Weil, ‘The State, the Foreign Investor, and International Law: The No Longer Stormy Relationship of a M?nage ? Trois’, 15 ICSID Rev-FILJ 401 (2000) at 415. 28ADF , above n 26 at para 184. See also at para 119. 29Waste Management II , above n 7 at para 98. 30 Ibid at 99. 31 As noted by Schreuer, above n 3 at 384: ‘Arbitral Tribunals have confirmed that good faith is inherent in fair and equitable treatment’; Dolzer, above n 3 at 91: ‘Indeed, the substance of the standard of fair and equitable treatment will in large part overlap with the meaning of a good faith clause in its broader setting, with one significant aspect embracing the related notions of venire contra factum proprium and estoppel’. A number of recent awards have recognized the good faith element of fair and equitable treatment, including: Tecnicas Medioambientales Tecmed, SA v Mexico , Award, 29 May 2003 (ICSID Case No. ARB (AF)/00/2), 43 ILM 133 (2004), (Tecmed) at paras 153–4, Waste Management II , above n 7 at para 138, MTD , above n 7 at para 109, Saluka , above n 7 at para 303. 32 Commentary (e) to s 711 confirms that ‘a juridical person of foreign nationality also enjoys some protection, for instance, against denials of procedural justice’ and that ‘for a juridical person, such violations would normally result in economic injury and fall within clause (c)’, Note that clause (c) provides that responsibility attaches for acts that unreasonably interfere with ‘a right to property of other economic interest that, under international law, a state is obligated to respect for persons, natural or judicial, of foreign nationality, as provided in section 712’. 33Anglo-Norwegian Fisheries Case (1951) ICJ Reports 116 at 142. 34AMCO Asia v Indonesia , 1 ICSID Reports, 377 at 490 and 493. See also the SapphireAward (1963) 35 ILR 136 at 181. 35 C Schreuer, ‘Article 42 of the ICSID Convention’, 60 AJIL 892 (1996); Art 42 of the ICSID Convention, 4 ILM 532 (1965), sets out the governing law for a tribunal constituted under the ICSID Convention Rules, which is necessary given that the choice of law may not always be set out in the contract or compromis. 36E Lauterpacht, ‘The World Bank Convention on the Settlement of International Investment Disputes’, Recueil d'etudes de Droit International en Hommage a Paul Guggenheim Ignaz (Geneva, Facult? de Droit l'Universit? de Gen?ve, Institut Universitaire des Hautes Etudes Internationales, 1968) 642 at 658–62. A similar conclusion was reached by Seidl-Hohenveldern, citing: ‘General Principles of Law as Applied by the Conciliation Commission Established under the Peace Treaty with Italy of 1947’, 53 Am J Int'l L 853 (1959) at 872. 37 See eg O Chukwumerije, ‘International Law and Article 42 of the ICSID Convention’, 14 J Int'l Arb 79 (1997) at 95–101; or IFI Shihata and A Parra, ‘Applicable Substantive Law in Disputes between States and Private Parties: The Case of Arbitration under the ICSID Convention’, 9 ICSID Rev-FILJ 183 (1994) at 191–5. 38Compa?ia del Desarrollo de Santa Elena, SA v Republic of Costa Rica (Santa Elena) , Final Award, 15 (2000) ICSID Rev-FILJ 169 at 191; Rectification 15 (2000) ICSID Rev-FILJ 205. 39 C Schreuer, The ICSID Convention: A Commentary (Cambridge, Cambridge University Press, 2001) at 609–10. 40 Ibid at 609 and 615–16; Schreuer notes the interesting case of Kl?ckner v Cameroon , Decision on Annulment, 2 (1985) ICSID Rep 121, in which a tribunal was castigated by the annulment panel for having essentially applied a principle of French contract law to the dispute, as if it were a fundamental principle of international law, without having parsed the evidence which would have been necessary to make such a finding of law. 41 C Schreuer, above n 39 at 610–11. 42GAMI Investments, Inc v Mexico , NAFTA/UNCITRAL Tribunal, Final Award, 15 November 2004, 44 ILM 545 (2005) at para 94. The tribunal was cautious, however, to add four comments clarifying its understanding of what does, and does not, constitute a breach of the minimum standard of treatment: (1) the failure to fulfil the objectives of administrative regulations without more does not necessarily rise to a breach of international law; (2) a failure to satisfy requirements of national law does not necessarily violate international law; (3) proof of a good faith effort by the government to achieve the objectives of its laws and regulations may counter balance instances of disregard of legal or regulatory requirements; and (4) the record as a whole—not isolated events—determines whether there has been a breach of international law. 43 One such interesting award is the MTD award (above n 7), which contains a long recitation of the facts (at paras 116–78) of what was essentially an overlapping contract and negligent misrepresentation claim. As has become increasingly more common in European and North American jurisdictions, businesses have used the tort of negligent misrepresentation to overcome, or complement, a contractual claim. The MTD award is just an extension of that practice in the BIT context, and thus the tribunal's ultimate decision—to discount considerably the successful detrimental reliance claim based upon its evaluation of the sophistication and the claimant and the quality of its due diligence work made before entering the relevant concession agreement—should not operate in the same manner as a regulatory detrimental reliance claim, where no contract with the state or a state entity is involved. See also Metalclad Corp v Mexico , Award, 30 August 2000 (ICSID Case ARB(AF)/97/1) 40 ILM 36 (2001) at paras 88–9. 44International Thunderbird Gaming v. The United Mexican States , Award, 26 January 2006 (UNCITRAL) at para 147, available at <http://www.naftaclaims.com/Disputes/Mexico/Thunderbird/Thunderbird_Award.pdf>. At n 7, the tribunal cited Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (Cambridge, Cambridge University Press, Grotius Classic Reprint Series, 2007) at 123 ff; J?rg M?ller, Vertrauenssschutz im V?lkerrecht (Heidelberg, Max Planck Institut, 1971); E Zoller, La Bonne Foi en Droit International Public (Paris, Editions Pedone, 1977); F Orrego Vicu?a, ‘Regulatory Authority and Legitimate Expectations’, 5 Intl Law Forum, 188 at 193 (2003); Nuclear Test Case (1974) ICJ Reports 253 at 268. 45LG& E , above n 17 at paras 127–30. The tribunal specifically relied upon Tecmed , above n 31 at para 154, MTD , above n 7 at para 114; Occidental Exploration and Production Company v Ecuador , Final Award, 1 July 2004 (LCIA Case No. UN3467) at para 185, available at <http://www.ita.law.uvic.ca/documents/Oxy-EcuadorFinalAward_001.pdf>; CMS Gas Transmission Co v Argentina (ICSID Case No. ARB/01/8, Award, 12 May 2005) 44 ILM 12305 (2005) at para 279; Waste Management II , above n 7 at para 98. 46Saluka , above n 7 at paras 302–3. After taking into account the ordinary meaning, context, and object and purpose of the treaty, the Saluka tribunal concluded that the standard of fair and equitable treatment was closely tied to the notion of legitimate expectations ‘… which is the dominant element of the standard’. The tribunal relied upon the holdings in: Tecmed , above n 31 at para 154, Waste Management II , above n 7 at para 98, Occidental , above n 45 at para 183, and CME , above n 25 at para 155. 47 JF O'Connor, Good Faith in International Law (Aldershot, Dartmouth, 1991) at 92–3. 48 Cheng, above n 44 at 137. 49ADF , above n 26 at para 189. 50Wena Hotels Ltd v Egypt , ICSID Case No. ARB/98/4, Final Award, 8 December 2000, 41 ILM 896 (2002) at paras 85–7. 51 Mann, above n 5 at 59–60. 52LG&E , above n 17 at para 130. 53United States—Section 301-310 of the Trade Act of 1974, Panel Report WT/DS152/R (22 December 1999) at para 7.67. 54 See eg OECD, Report on Regulatory Reform: Synthesis Report (Paris, OECD, 1997) at <http://www.oecd.org/dataoecd/17/25/2391768.pdf>; Robert Wolfe, ‘Regulatory Transparency, Developing Countries, and the Fate of the WTO’, <http://www.cpsa-acsp.ca/paper-2003/wolfe.pdf>; and OECD Financial, Fiscal and Enterprise Affairs Directorate (DAF), Transparency for FDI (January 2003), available at <http://www.oecdobserver.org/news/fullstory.php/aid/821/Transparency_for_FDI.html>. 55 The concepts of regulatory fairness and transparency (or perhaps ‘regulatory certainty’ or ‘regulatory due process’) may obviously be grounded in a concept such as ‘fair and equitable treatment’. If ‘fair and equitable treatment’ is now accepted as a requirement of customary international law, as increasingly appears to be the case, then regulatory transparency is required of all states—with the only question in a given case being whether a state which has failed to provide such treatment can be held to account by an individual through recourse to an applicable BIT. 56United States—Restrictions on Imports of Cotton and Man-made Fibre Underwear, WT/DS24/AB/R, 10 February 1997, at 21. 57 See eg OECD, Recommendation of the Council of the OECD on Improving the Quality of Government Regulation, OCDE/GD(95)95, 15 September 1995, available at <http://www.olis.oecd.org/olis/1995doc.nsf/LinkTo/OCDE-GD(95)95>; and APEC, Leaders' Statement to Implement APEC Transparency Standards, 27 October 2002 and 21 October 2003, available at <http://www.apec.org/content/apec/leaders__declarations/2003_leadersstmtimplapectranspstd.html>. 58Occidental , above n 45 at paras 183–6. See also MTD , above n 7 at paras 109–15. 59Tecmed , above n 31 at paras 154–6. 60Occidental , above n 45 at paras 190–1. 61NAFTA Art 102(1). 62 This was the primary ground for Mexico's successful review of a portion of the tribunal's award. With the support of an intervention from the government of Canada, counsel for Mexico was fortunate enough to find a local review judge who apparently misunderstood the customary international law approach to treaty interpretation adopted by the tribunal, and thus failed to understand the meaning of a minimum standard of treatment provision contained within an international economic treaty. See Todd Weiler, ‘Metalclad and the Government of Mexico: A Play in Three Parts’, 2 JWI 685 (2001). 63Metalclad , above n 43 at para 76. 64Metalclad , Award, ibid at para 88. 65Saluka , above n 7 at paras 301–6. 66LG&E , above n 17 at para 125, citing in support CMS , above n 45 at para 274; Occidental , above n 45 at para 183; Metalclad , above n 43 at para 99 (‘Mexico failed to ensure a transparent and predictable framework for Metalclad's business planning and investment’). 67Saluka , n 7 above at para 294. 68Saluka , ibid at para 291: ‘Whatever the merits of this controversy between the parties may be, it appears that the difference between the Treaty standard laid down in Article 3.1 and the customary minimum standard, when applied to the specific facts of a case, may well be more apparent than real. To the extent that the case law reveals different formulations of the relevant thresholds, an in-depth analysis may well demonstrate that they could be explained by the contextual and factual differences of the cases to which the standards have been applied’. 69 See also Occidental , n 45 above at para 190. 70CME , n 25 above at 290. 71Azurix , n 17 above at para 361. Reliance was placed on Tecmed , above n 31 at para 155, on this point. 72 Cheng, above n 44 at 132–4 and 122. 73 Georg Schwarzenberger, International Law and Order (London, Stevens, 1971) at 89–90 and 99–100. 74Saluka , above n 7 at para 307. 75Occidental , above n 45 at paras 162–3. 76Occidental , ibid at paras 172 and 177. 77The Loewen Group, Inc and Raymond L Loewen v United States of America (ICSID Case No. ARB(AF)/93/3, 26 June 2003) 42 ILM 811 (2003) at para 132. 78Waste Management II at para 98, cited above at n 7. 79 In fact, it is very difficult to find an investment claims tribunal award explicitly founded upon the theory. This is because most underlying treaty language includes additional terms such as a guarantee of ‘fair and equitable treatment’ or a prohibition against arbitrary, unreasonable or discriminatory conduct. However, if the minimum standard, as memorialized in the various treaty provisions available, only promises ‘treatment in accordance with international law’ it may be necessary to rely upon general principles and customary international law norms to attribute some meaning to these provisions. 80Pope & Talbot v Canada , NAFTA/UNICTRAL Tribunal, Award on Damages, 31 May 2002, at para 68. 81Metalclad , above n 43 at paras 90–7. 82Elettronica Sicula SpA (ELSI) ( US v Italy ), (1989) ICJ Reports 14 at para 74. 83Nykomb Synergistics Technology Holding AB v Latvia , Award, 16 December 2003 (Energy Charter Treaty/ SCC) at 37–8. 84Saluka , above n 7 at para 313. 85Saluka , ibid at para 498. 86LG&E , above n 17 at para 146. 87LG&E , ibid at para 148. 88 A difference the Saluka tribunal itself acknowledged ‘may be more apparent than real’: Saluka, above n 7 at para 291. See also both Azurix , above n 17 at para 361 and LG&E , above n 17 at paras 125–7 in support of this point that the treaty and customary law standards are effectively the same. 89Saluka , ibid at paras 303, 499. 90 The traditional customary international test was described by the LG&E tribunal (n 17 above), although it did not apply it, at para 146: ‘As stated in the ELSI Elettronica Sicula SpA case (United States of America v Italy), ICJ Report 1989 RLA 56 at 61–2 (20 July 1989), in order to establish when a measure is discriminatory, there must be (i) an intentional treatment (ii) in favor of a national (iii) against a foreign investor, and (iv) that is not taken under similar circumstances against another national’. 91 See eg Argentina—Safeguard Measures on Imports of Footwear (2000), WTO Doc WT/DS121/AB/R at para 81 (Appellate Body Report). See also: Korea—Definitive Safeguard Measure on Imports of Certain Dairy Products (2000), WTO Doc WT/DS98/AB/R at para 81 (Appellate Body Report). It may also be added that this may blur the distinction between the ‘absolute’ standard of fair and equitable treatment and the ‘relative’ standards of MFN and national treatment, which may involve different standards of protection; on which see further: UNCTAD, Fair and Equitable Treatment, above n 8 at 46–8. 92 In addition to the recent Champion case (Champion Trading Company, Ameritrade International, Inc, James T Wahba, John B Wahba, Timothy T Wahba v Egypt, ICSID Case No. ARB/02/9, Award, 27 October 2006, available at <http://www.ita.law.uvic.ca/documents/Championaward_000.pdf>) one rare example is the lesser known RFCC v Morocco case (ICSID Case No ARB/00/6, Award of 22 December 2003, 20 ICSID Rev-FILJ 391 (2005) ), which resulted in a French-language award, where the tribunal appeared to state that proof of discriminatory intent was required to satisfy that treaty's seemingly comparative national treatment test, but subsequently concluded that such intent could be found in the substance of the treatment received, even if not explicitly stated as being intended to harm the foreign participant in the local market. 93Pope & Talbot v Canada , Award on the Merits of Phase 2, 10 April 2001, at 9–37. 94 Ibid at 35. 95 See eg Emilio Agustin Maffezini v The Kingdom of Spain , Case No. ARB/97/7, 25 January 2000, 16 ICSID Rev-FILJ 212 (2001) Decision of the Tribunal on Objections to Jurisdiction, at para 56. See also Pope & Talbot, Inc v Canada , Damages Award, above n 80 at para 62, n 54. 96Marvin Feldman v United Mexican States , Final Award, 16 December 2002 (ICSID Case No. ARB(AF)/99/1) 18 ICSID Rev-FILJ 488 (2003) at para 70. 97 It did so for both the NAFTA's investment and trade-in-services provisions. The Panel could engage in such speculation because, similar to the practice established in the GATT/WTO, a claim can be made under Chapter 20 without any allegation of loss (which is required of investors under Arts 1116(1) and 1117(2) ). See United States—In the Matter of Cross-Border Trucking Services, Panel Report, USA-MEX-98-2008-01, 6 February 2001, at para 247. 98ADF , above n 26 at para 72. 99SD Myers , above n 4 at para 251. 100Loewen , above n 77 at para 119 (re: denial of justice) and para 140 (re: national treatment comparators). 101 In most cases, a denial of justice claim is more properly brought under Art 1105. See T Weiler, ‘Dodging Bullets: A First Look at the Final Award in Loewen & the Loewen Group v. U.S.A.’, 4 JWI 659 (2003). 102 See eg United States Section 337 of the Tariff Act of 1930, 7 November 1989, 36 GATT BISD 345 (1990); World Trade Organization Appellate Body, Japan Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R at 6 (4 October 1996); World Trade Organization Appellate Body, Korea Taxes on Alcoholic Beverages, WT/DS75/AB/R, WT/DS84/AB/R at 43 (18 January 1999); World Trade Organization Panel, Canada-Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R at 10.78 (31 January 2000). 103 See eg Pope & Talbot above n 93 at para 63. 104Myers , above n 4 at paras 252–4. 105US—Trucking, above n 96 at para 254. 106Pope & Talbot , above n 93 at para 85. 107ADF , above n 26 at para 74. 108 The similarity is likely due, in part, to the fact that the ADF tribunal was chaired by a former WTO Appellate Body judge. 109Feldman , above n 96 at para 75. 110 Ibid. 111 Ibid. 112NAFTA Chapter 11 is a hybrid because it appears to provide national treatment and MFN treatment for investors, under Arts 1102(1) and 1103(1), without any limitation on where the investment is made in the Free Trade Area established under NAFTA Art 101. 113Feldman , above n 96 at paras 75–6. 114 See Pope & Talbot , above n 93 at paras 35–6. 115 See eg Pope & Talbot , ibid at paras 35–6; and US—Trucking, above n 96 at paras 68–9. 116United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, 12 October 1998, at para 158. 117Pope & Talbot Inc v Canada , above n 93 at paras 78–9: ‘Differences in treatment will presumptively violate Article 1102(2), unless they have a reasonable nexus to rational government policies that (1) do not distinguish , on their face or de facto, between foreign owned and domestic companies, and (2) do not otherwise unduly undermine the investment liberalizing objectives of the NAFTA’. 118Myers , above n 4 at para 162. 119Feldman , above n 96 at para 73. 120 Ibid , quoting the WTO Appellate Body in United States—Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, 23 May 1997, at 14 (emphasis added). 121 Ibid , ‘In case a party adduces some evidence which prima facie supports his allegation, the burden of proof shifts to his opponent’. Id at para 73 n 38; quoting Asian Agricultural Products Limited v Republic of Sri Lanka , 5 ICSID Rep 245, 272 (1990). 122 Ibid at 78. Such a finding is welcome, given that the alternative would have been to reward Mexico for failing fully to participate in the evidence-gathering process. Since it is practically impossible for an ad hoc international tribunal to compel a sovereign country to comply with a discovery request, the drawing of adverse inferences is one of the few ways where a tribunal can preserve the equality of the parties to arbitration, as required under NAFTA Art 1115. 123Thunderbird , above n 44 at 177. 124 Ibid at paras 178–83. 125 Note that the focus of the NAFTA expropriation provision, Art 1110(1), is on an investment made in the territory of another party, which is also a narrower form of protection than the breadth of protection offered under Arts 1102 and 1103, which presumably includes investors acting in their own right, arguably anywhere in the Free Trade Area established under NAFTA Art 101. Unlike many BIT provisions, NAFTA Art 1101(1) does not limit the ambit of the chapter's protection to ‘investors with investments in the territory of another NAFTA Party’. Early drafts of the Chapter contained such language (see <http://www.naftaclaims.com>), but the territoriality requirement appears to have been excised from the final draft. 126Waste Management II , above n 7 at para 98. 127 In reliance on statements of the tribunal in SD Myers v Canada , the Saluka tribunal underscored that the determination of a breach of the fair and equitable treatment requires a balanced approach to the interests of the disputing parties by ‘… a weighing of the Claimant's legitimate and reasonable expectations on the one hand and the Respondent's legitimate regulatory interests on the other’. See Saluka, above n 7 at paras 305–6. As noted by the SD Myers tribunal, above n 4 at para 263: ‘The Tribunal considers that a breach of Article 1105 occurs only when it is shown that an investor has been treated in such an unjust or arbitrary manner that the treatment rises to the level that is unacceptable from the international perspective. 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