Abstract
Public procurement law inter alia provides a means to foster competition in the purchasing of goods and services by governments. For tenderers incurring significant expenditures during the procurement procedure, legal remedies are of vital importance. Since these are not equally guaranteed by all states, the issue occurs as to whether international investment law can serve as a gap-filling regime to protect foreign tenderers against harmful state conduct during procurement proceedings. The chapter therefore examines the applicability of international investment agreements (IIAs) to the procurement procedure and, hence, the qualification of a tender and the pre-award expenditure as protected investments. However, the question is neither regulated adequately in most IIAs, nor has a definite approach developed in arbitral practice so far. While successful bidders can claim compensation for damages arising from the pre-award phase, the protection of unsuccessful bidders must be answered in a differentiated manner. The chapter argues that a distinction has to be made between an open and a pre-elective award procedure. In the latter case, the host state invites the foreign tenderer to participate in the procurement proceeding and thus provides the consent to admit the investment in its territory. Moreover, foreign tenders increase competition within the award procedure, fostering competition in the host state’s procurement market. Assuming that the IIA is applicable, the chapter argues that the ordinary business risks of participating in a tender procedure can be sufficiently taken into account when assessing liability.
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Notes
- 1.
Kennedy-Loest et al. (2011), p. 78.
- 2.
Dreher et al. (2015), para. 6.
- 3.
Bovis (2015), para. 1.42.
- 4.
- 5.
OECD statistics 2017, https://stats.oecd.org/Index.aspx?QueryId=78413# (30.01.2019).
- 6.
Behrens (2017), para. 1713.
- 7.
- 8.
- 9.
CJEU, case C-458/03, Parking Brixen, ECLI:EU:C:2005:605, paras 49 et seq.
- 10.
As for the EU, see e.g. Article 2(1) lit. d of Council Directive 92/13/EEC of 25 February 1992, OJ L 76 of 23.3.1992, p. 14.
- 11.
See Burgi (2018), p. 248.
- 12.
- 13.
Yescombe (2007), pp. 11 et seq.
- 14.
Bovis (2015), paras 13.76 et seq.
- 15.
- 16.
On the procurement process and the different phases from an economic point of view see Yescombe (2007), pp. 74 et seq.
- 17.
Yescombe (2007), p. 107.
- 18.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2.
- 19.
Williams (2008), p. 881.
- 20.
- 21.
The Energy Charter Treaty, UNTS 2080, p. 95.
- 22.
See Wälde (1996), pp. 277 et seq.
- 23.
Wälde (1996), p. 280.
- 24.
Text available at http://ec.europa.eu/trade/policy/in-focus/ceta/ceta-chapter-by-chapter/.
- 25.
See also the additional exemptions with regard to the performance requirements according to Article 1106 of the NAFTA and Article 1108(8)(b) of the NAFTA.
- 26.
- 27.
- 28.
Text available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1833.
- 29.
Text available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437.
- 30.
- 31.
- 32.
- 33.
Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, Decision on Jurisdiction of 23 July 2001, ICSID Case No. ARB/00/4, para. 52. See also Consortium R.F.C.C. v. Kingdom of Morocco, Decision on Jurisdiction of 16 July 2001, ICSID Case No. ARB/00/6, Rn. 60.
- 34.
FEDAX N.V. v. The Republic of Venezuela, Decision on Jurisdiction of 11 July 1997, ICSID Case No. ARB/96/3, para. 43.
- 35.
- 36.
See Saba Fakes v. Republic of Turkey, Award of 14 July 2010, ICSID Case No. ARB/07/20, para. 110; Consortium Groupement L.E.S.I. - DIPENTA v. People’s Democratic Republic of Algeria, Award of 10 January 2005, ICSID Case No. ARB/03/8, para. II.13(iv).
- 37.
For instance, the tribunal in Phoenix Action Ltd v. Czech Republic, Award of 15 April 2009, ICSID Case No. ARB/06/5, para. 100, is limiting the notion to bona fide investments.
- 38.
See e.g. Autopista Concesionada de Venezuela, C.A. v. Bolivarian Republic of Venezuela, Decision on Jurisdiction of 27 September 2001, ICSID Case No. ARB/00/5, para. 97.
- 39.
As for German procurement law see Burgi (2018), p. 220.
- 40.
See for Article 25 ICSID Convention Schreuer et al. (2009), Art. 25, para. 180. Regarding contract awarded after a procurement proceeding see Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, Decision on Jurisdiction of 23 July 2001, ICSID Case No. ARB/00/4, para. 58.
- 41.
On the concerns see also Robinson (2004), p. 265.
- 42.
Footnote added by the authors; it is referred to Schreuer, ICSID-Commentary, Article 25.
- 43.
Malicorp Limited v. Arab Republic of Egypt, Award of 7 February 2011, ICSID Case No. ARB/08/18, para. 113.
- 44.
PSEG Global Inc. and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, Decision on Jurisdiction of 4 June 2004, ICSID Case No. ARB/02/5, para. 104.
- 45.
PSEG Global Inc. and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, Award of 19 January 2007, ICSID Case No. ARB/02/5, para. 304.
- 46.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13.
- 47.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Decision on Jurisdiction of 16 June 2006, ICSID Case No. ARB/04/13, para. 14.
- 48.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Decision on Jurisdiction of 16 June 2006, ICSID Case No. ARB/04/13, paras 94 et seq.
- 49.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Decision on Jurisdiction of 16 June 2006, ICSID Case No. ARB/04/13, para. 95.
- 50.
- 51.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Decision on Jurisdiction of 16 June 2006, ICSID Case No. ARB/04/13, paras 94 et seq.
- 52.
PSEG Global Inc. and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, Award of 19 January 2007, ICSID Case No. ARB/02/5, para. 304.
- 53.
PSEG Global Inc. and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, Award of 19 January 2007, ICSID Case No. ARB/02/5, para. 304.
- 54.
Malicorp Limited v. Arab Republic of Egypt, Award of 7 February 2011, ICSID Case No. ARB/08/18, para. 113.
- 55.
Joseph Charles Lemire v. Ukraine, Decision on Jurisdiction and Liability of 14 January 2010, ICSID Case No. ARB/06/18, para. 89.
- 56.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Award of 15 March 2002, ICSID Case No. ARB/00/2, paras 60 et seq.
- 57.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Concurring Opinion by Mr. David Suratgar of 7 March 2002, ICSID Case No. ARB/00/2. See Hornick (2003), pp. 192 et seq.
- 58.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Concurring Opinion by Mr. David Suratgar of 7 March 2002, ICSID Case No. ARB/00/2, para. 10.
- 59.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Concurring Opinion by Mr. David Suratgar of 7 March 2002, ICSID Case No. ARB/00/2, para. 6.
- 60.
Submission and evaluation of proposals for private power generation projects in developing countries, World Bank Discussion Papers No. 250 of September 1994, p. 14, http://documents.worldbank.org/curated/en/353541468782149070/pdf/multi-page.pdf (1.2.2019).
- 61.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Concurring Opinion by Mr. David Suratgar of 7 March 2002, ICSID Case No. ARB/00/2, para. 6.
- 62.
- 63.
Happ and Rubins (2009), p. 9.
- 64.
Hamida (2005), p. 68.
- 65.
See Johannsen (2009), p. 32.
- 66.
Schreuer et al. (2009), Article 25, para. 153.
- 67.
Consortium R.F.C.C. v. Kingdom of Morocco, Decision on Jurisdiction of 16 July 2001, ICSID Case No. ARB/00/6, para. 65; Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, Decision on Jurisdiction of 23 July 2001, ICSID Case No. ARB/00/4, para. 52. On the debate see inter alia Bischoff and Happ (2015), para. 39.
- 68.
On the access of investments in the natural resources exploitation field see Bungenberg (2015), pp. 129 et seq.
- 69.
See because of this the Proposal for a Regulation of the European Parliament and of the Council on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries, COM(2016) 34 final.
- 70.
Malicorp Limited v. Arab Republic of Egypt, Award of 7 February 2011, ICSID Case No. ARB/08/18, para. 113.
- 71.
Burgi (2018), p. 220.
- 72.
See with regard to the United Nations Convention on Contracts for the International Sale of Goods (CISG), 1489 UNTS 3, Schütz (1996), pp. 173 et seq.
- 73.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Award of 15 March 2002, ICSID Case No. ARB/00/2, para. 39.
- 74.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Award of 15 March 2002, ICSID Case No. ARB/00/2, para. 51.
- 75.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Award of 15 March 2002, ICSID Case No. ARB/00/2, para. 60.
- 76.
See also Hamida (2005), p. 63.
- 77.
On this Bungenberg and Titi (2015), paras 2 et seq.
- 78.
- 79.
- 80.
- 81.
Hornick (2003), pp. 192 et seq.
- 82.
Joseph Charles Lemire v. Ukraine, Decision on Jurisdiction and Liability of 14 January 2010, ICSID Case No. ARB/06/18, para. 55.
- 83.
Emmis International Holding, B.V., Emmis Radio Operating, B.V., MEM Magyar Electronic Media Kereskedelmi és Szolgáltató Kft. v. Hungary, Award of 16 April 2014, ICSID Case No. ARB/12/2, para. 155.
- 84.
See on the criticism Fischer (2018), p. 121.
- 85.
Joseph Charles Lemire v. Ukraine, Dissenting Opinion of Arbitrator Voss of 1 March 2011, ICSID Case No. ARB/06/18, paras 121 et seq.
- 86.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Concurring Opinion by Mr. David Suratgar of 7 March 2002, ICSID Case No. ARB/00/2, para. 10.
- 87.
Metalclad Corporation v. The United Mexican States, Award of 30 August 2000, ICSID Case No. ARB(AF)/97/1, paras 76 et seq.
- 88.
Merrill & Ring Forestry L.P. v. The Government of Canada, Award of 31 March 2010, ICSID Case No. UNCT/07/1, para. 231; Siemens A.G. v. The Argentine Republic, Award of 6 February 2007, ICSID Case No. ARB/02/8, para. 308. The importance of transparency is emphasized by Schreuer (2005), p. 374.
- 89.
Metalclad v. Mexico, Award of 25 August 2000, ICSID Case No. ARB(AF)/97/1, para. 91: “Moreover, the permit was denied at a meeting of the Municipal Town Council of which [the claimant] received no notice, to which it received no invitation, and at which it was given no opportunity to appear.” See also Middle East Cement v. Egypt, Award of 12 March 2002, ICSID Case No. ARB/99/6, para. 143.
- 90.
- 91.
Waste Management v. United Mexican States (II), Award of 30 April 2004, ICSID Case No. ARB(AF)/00/3, para. 98.
- 92.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Award of 6 November 2008, ICSID Case No. ARB/04/13, para. 187.
- 93.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Award of 6 November 2008, ICSID Case No. ARB/04/13, para. 210.
- 94.
Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, Award of 6 November 2008, ICSID Case No. ARB/04/13, para. 207.
- 95.
See e.g. Kläger (2011), p. 227.
- 96.
- 97.
See with regard to legitimate expectations Dolzer (2013), pp. 26 et seq.
- 98.
Joseph Charles Lemire v. Ukraine, Decision on Jurisdiction and Liability of 14 January 2010, ICSID Case No. ARB/06/18, paras 419 et seq.
- 99.
See supra Sec. 3.2.
- 100.
On the interaction of FET with the standard against unreasonable or discriminatory measures, see also Schreuer (2007), pp. 4 et seq.
- 101.
Joseph Charles Lemire v. Ukraine, Dissenting Opinion of Arbitrator Voss of 1 March 2011, ICSID Case No. ARB/06/18, para. 128.
- 102.
- 103.
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Bungenberg, M., Blandfort, F. (2020). International Investment Law and Public Procurement: An Overview. In: Fach Gómez, K., Gourgourinis, A., Titi, C. (eds) International Investment Law and Competition Law. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-33916-6_2
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