Abstract
This chapter aims to determine the exact content of due process of law within the context of the law on foreign investment. In that respect, following an in-depth analysis of the existing literature, the opinion is put forward whereby due process is a general principle of international law with its own foundations in the international legal order itself and which may be understood, as an FET element, in terms of denial of justice and procedural fairness in administrative proceedings.
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Notes
- 1.
Waguih Elie George Siag and Clorinda Vecchi v. Egypt, ICSID Case No. ARB/05/15, Award of 1 June 2009, para 452. In the same vein, Article 5, para 2(a), of the 2012 US Model BIT should be considered: ‘fair and equitable treatment’ includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world.’
- 2.
Borchard 1940, pp. 445 et seq.: ‘Long before article 38 of the Permanent Court of International Justice made the ‘general principles of law recognized by civilized stated’ a source of international law, foreign offices and arbitral tribunals had relied on such general principles to work out a loose minimum which they applied constantly in interstate practice […] It is well known that aliens may be denied numerous privileges […] and may be restricted […] in municipal law. Yet the alien must enjoy police and judicial protection for such rights as the local law grants and its arbitrary refusal is a denial of justice. Bad faith, fraud, outrage resulting in injury, cannot be defended on the ground that it is custom of the country to which nationals must almost submit’. Della Cananea 2009, pp. 133 et seq., takes the same position. As to the practice, the US Model BIT cited supra note 1, and its reference to the principle of due process as ‘embodied in the principal legal systems of the world’ is equally of assistance.
- 3.
More in detail, the existence of a custom in the matter at issue would be suggested by the difficulty of referring to the concepts of denial of justice adopted at the national level. Indeed, on the one hand ‘[t]he malleability of the words denial of justice have led States to adopt narrower or broader definitions, as their interests dictate’; on the other hand, ‘some national laws contain their own long-established doctrines of denial of justice, defined in a manner different from that of international law, and sometimes inconsistent with it’ (Paulsson 2005, pp. 13 et seq.). In the same vein, see Diehl 2012, p. 455: ‘Denial of justice in international law cannot be equated with the notion developed in most national legal systems, where it has the limited meaning of a refusal to hear a grievance. Under national law, a litigant who has been given full access to the procedures provided within the system—including appeal mechanisms—cannot ask for more justice or different justice. In other words: The matter is res judicata, the system has given all it has to offer.’
- 4.
Supra Sect. 1.5, para 130 states as follows: ‘The violation of [due process] determines an international wrongful act of denial of justice. The denial of justice can be interpreted on the basis of customary international law […] This requirement is considered to be so fundamental that in the practice of US BIT and FTA is specifically indicated.’
- 5.
This Article, as already observed, clearly speaks of denial of justice under customary international law.
- 6.
Article 11, para 2(a), states that ‘fair and equitable treatment requires each Member State not to deny justice in any legal or administrative proceedings in accordance with the principle of due process.’
- 7.
In this regard, Paulsson 2005, p. 108, observes as follows: ‘Perhaps the strongest argument for this special treatment of claim of denial of justice is that it avoids interference with the fundamental principle that States should to the greatest extent possible be free to organize their national legal systems as they fit […] If aliens are allowed to bypass those mechanisms and bring international claims for denial of justice on the basis of alleged wrongdoing by the justice of the peace of any neighbourhood, international law would find itself intruding intolerably into internal affairs.’ For an in-depth analysis of this point, also for the references therein, see recently Savarese 2012, pp. 169 et seq. More in general, it is worth remembering that, at least in principle, the local remedies rule does not represent a procedural requirement for the admissibility of claims in investment treaty arbitration (Douglas 2009, para 59). This may be inferred, for example, from the wording of Article 26 of the 1965 Washington Convention. This provision on the one hand states that ‘Consent of the Parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy’; on the other hand, but by way of exception, it recognizes that ‘a Contracting State may require the exhaustion of local administrative or judicial remedies as a condition of its consent to arbitration under this Convention.’ Further, some investment treaties expressly provide for a local remedies rule. This is the case of the 1991 Argentina-Spain BIT. Its Article X, para 2, states that where a dispute cannot be settled amicably ‘it shall, at the request of either party, be submitted to the competent tribunals of the Party in whose territory the investment was made’. For the arbitral practice, for example, see infra Sect. 3.4.1
- 8.
See, for instance, Franck Charles Arif v. Moldova, ICSID Case No. ARB/11/23, Award of 8 April 2013, paras 423 et seq. In the same vein, one may mention Flughafen Zürich A.G. and Gestión e Ingeniería IDC S.A. v. Venezuela, ICSID Case No. ARB/10/19, Award of 18 November 2014, para 378: ‘Y aunque la denegación de justicia no estuviera contenida en el estándar de TJE [fair and equitable treatment], adicionalmente, la denegación de justicia representa en todo caso un ilícito sancionado por el Derecho internacional consuetudinario.’
- 9.
The existence of a notion of international due process has been advanced, for example, by Kotuby 2013.
- 10.
See, for example, Article 14 of the UN Covenant on Civil and Political Rights. Its para 1 states as follows: ‘All persons shall be equal before the courts and tribunals. In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. The press and the public may be excluded from all or part of a trial for reasons of morals, public order (ordre public) or national security in a democratic society, or when the interest of the private lives of the parties so requires, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice; but any judgement rendered in a criminal case or in a suit at law shall be made public except where the interest of juvenile persons otherwise requires or the proceedings concern matrimonial disputes or the guardianship of children’.
- 11.
See, e.g., Article 6 of the European Convention on Human Rights: ‘In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.’
- 12.
See Dorigo and Pustorino 2009. For a confirmation of this opinion in case law, see Al-Warraq v. Indonesia, UNCITRAL, Final Award of 15 December 2014, paras 556 et seq.
- 13.
Equality of parties, in turn, may be translated in three further principles: ‘recognizing the litigants’ sovereign sensibilities, securing active involvement by the litigants in the communicative process, and assuring that neither party derives any special procedural advantage over the other’ (Gaffney 1999, p. 1184).
- 14.
- 15.
Rose-Ackerman et al. 2014, pp. 216 et seq.
- 16.
Gaffney 1999.
- 17.
On the whole matter, see Focarelli 2009.
- 18.
See Fitzmaurice 1932, pp. 108–9: ‘[E]very injury involving the responsibility of the State committed by a court or judge acting officially, or alternatively every such injury committed by any organ of the government in its official capacity in connection with the administration of justice, constitutes and can properly be styled a denial of justice, whether it consists in a failure to redress a prior wrong, or in an original wrong committed by the court or other organ itself.’
- 19.
Historically speaking, there have been several attempts at codifying denial of justice so conceived. First of all, one may mention the resolution adopted by the Institut de droit international on the Responsabilité international des États à raison des dommages causes sur leur territoire à la personne et aux biens des étrangers (1927). Articles 5 and 6 of that resolution state as follows: ‘L’Etat est responsable du chef de déni de justice: 1° Lorsque les tribunaux nécessaires pour assurer la protection des étrangers n’existent ou ne fonctionnent pas; 2° Lorsque les tribunaux ne sont pas accessibles aux étrangers; 3° Lorsque les tribunaux n’offrent pas les garanties indispensables pour assurer une bonne justice […] L’Etat est également responsable si la procédure ou le jugement constituent un manquement manifeste à la justice, notamment s’ils ont été́ inspirés par la malveillance à l’égard des étrangers, comme tels, ou comme ressortissants d’un Etat déterminé.’ Article 9 of the Draft Convention on the international responsibility of States for injuries to aliens, prepared by the Harvard Law School is equally revealing: ‘Denial of justice exists where there is a denial, unwarranted delay or obstruction of access to courts, gross deficiency in the administration of judicial or remedial process, failure to provide those guarantees which are generally considered indispensable to the proper administration of justice, or a manifestly unjust judgment. An error of a national court which does not produce manifest injustice is not a denial of justice’ (in American Journal of International Law, Supplement: Codification of International Law, 1929, pp. 131 et seq., spec. p. 134). Finally, Article 3.i of the 1967 OECD Draft Convention on the protection of foreign property should be mentioned: ‘[Denial of justice] implies that whenever a State seizes property, the measures taken must be free from arbitrariness. Safeguards existing in its Constitution or other laws or established by judicial precedent must be fully observed; administrative or judicial machinery used or available must correspond at least to the minimum standard required by international law.’
- 20.
See Cotesworth and Powell, Great Britain v. Colombia (1875), in Moore 1898, pp. 2050 et seq., as well as the practice cited in paras 3.5–3.7; Robert E. Brown (U.S.) v. Great Britain, Award of 23 November 1923, in Reports of International Arbitral Awards, vol. VI, p. 120.
- 21.
- 22.
Such a circumstance may be clearly inferred from the Third Restatement of the Foreign Relations Law of the United States (The American Law Institute, Restatement of the Law, the Foreign Relations Law of the United States, 3rd edn, 1987, vol. 2, para 711, comm a), insofar as it pinpoints that the term ‘denial of justice’ is commonly used in a narrow sense ‘to refer only to injury consisting of, or resulting from, denial of access to courts, or denial of procedural fairness and due process in relation to judicial proceedings, whether criminal or civil.’
- 23.
Such an opinion has been expressed, for example, by Guerrero in his 1926 Report to the League of Nations Committee for the Progressive Codification of International Law. Articles 6 and 7 of the Report state as follows: ‘6. The duty of the State as regards legal protection must be held to have been fulfilled if it has allowed foreigners access to the national courts and freedom to institute the necessary proceedings whenever they need to defend their rights. It therefore follows: (a) That a State has fulfilled its international duty as soon as the judicial authorities have given their decisions, even if those authorities merely state that the petition, suit or appeal lodged by the foreigner is not admissible; (b) That a judicial decision, whatever it may be, and even if vitiated by error or injustice, does not involve the international responsibility of the State. 7. On the other hand, however, a State is responsible for damage caused to foreigners when it is guilty of a denial of justice. Denial of justice consists in refusing to allow easy access to the courts to defend those rights, which the national law accords them. A refusal of the competent judge to exercise jurisdiction also constitutes a denial of justice.’ The same opinion can be found in the 1961 Report of the Inter-American Juridical Committee: ‘The obligation of the State regarding judicial protection shall be considered as having been fulfilled when it places at the disposal of foreigners the national courts and the legal remedies essential to implement their rights. A State cannot initiate diplomatic claims for the protection of its nationals nor bring an action before an international tribunal for this purpose when the means of resorting to the competent courts of the respective State have been made available to the aforementioned nationals’ (Whiteman 1963–1973, p. 727).
- 24.
Anzilotti 1964, p. 396.
- 25.
See Hatshek 1923, p. 397; Strupp 1925. In the past, this distinction had been drawn, with the view to claiming that denial of justice always entails State responsibility, whereas denial of law does so under exceptional circumstances only. For a critique of this distinction, see Quadri 1936, pp. 220 et seq., in the footnotes.
- 26.
- 27.
Robert Azinian v. Mexico, ICSID Case No. ARB(AF)/97/2, Award of 1 November 1999.
- 28.
The Azinian award has been the first one to be rendered under the Additional Facilities Rules. As already said supra Chap. 1, Sect. 1.4, they apply to disputes where either the State party to the dispute or the State whose national is party to the dispute, but not both, is not a contracting State to the ICSID Convention. In this case, the Claimants are nationals of an ICSID Contracting State (the United States of America), whereas the Respondent (the United Mexican States) is not an ICSID Contracting State.
- 29.
Paragraph 101.
- 30.
Emphasis added.
- 31.
Mondev International Ltd. v. United States, ICSID Case No. ARB (AF)/99/2, Award of 11 October 2002. On the whole affair, see Krueger 2003.
- 32.
See supra note 27.
- 33.
International Court of Justice, Elettronica Sicula S.p.a. (ELSI) (United States v. Italy), Judgment of 20 July 1989, para 128: ‘Arbitrariness […] is a wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of judicial property’.
- 34.
Para 127 of the judgment.
- 35.
Para 133 of the judgment.
- 36.
‘The tribunal is not persuaded that the doctrine of foreign State immunity presents any useful analogy to the present situation. That immunity is concerned not with the position of State agencies before their own courts, but before the courts of third States, where considerations of interstate relations and the proper allocation of jurisdictional competence are raised’ (para 142 of the judgment).
- 37.
Para 143 of the judgment.
- 38.
Idem.
- 39.
In this regard, the remarks made by de Visscher 1935, pp. 395–396, are of assistance: ‘[O]n ne saurait assimiler à un déni de justice l’absence de recours judiciaire ou administratif contre les mesures prises par les autorités supérieures de l’Etat, la législature ou le gouvernement, en tant que cette absence résulte de la législation générale de l’Etat et non d’une mesure de discrimination contre les étrangers. L’absence de recours contre ces mesures n’exclut pas évidemment pas la responsabilité internationale du chef de dommages qui résultent de ces mesures elles-mêmes; mais dans l’état actuel de l’organisation constitutionnelle des pays, même les mieux organisés, elle ne peut, en règle générale, être envisagée comme un manquement au devoir de protection judiciaire équivalant à un déni de justice.’
- 40.
Para 154 of the judgment.
- 41.
- 42.
As is well known, punitive damages are intended to deter the defendant from engaging in conducts similar to those underpinning the lawsuit.
- 43.
See para 54 of the judgment.
- 44.
‘It would be strange indeed if sub silentio the international rule were to be swept away. And it would be very strange if a State were to be confronted with liability for a breach of international law committed by its magistrate or low-ranking judicial officer when domestic avenues of appeal are not pursued, let alone exhausted. If Article 1121 were to have that effect, it would encourage resort to NAFTA tribunals rather than resort to the appellate courts and review processes of the host State, an outcome which would seem surprising, having regard to the sophisticated legal systems of the NAFTA Parties. Such an outcome would have the effect of making a State potentially liable for NAFTA violations when domestic appeal or review, if pursued, might have avoided any liability on the part of the State. Further, it is unlikely that the Parties to NAFTA would have wished to encourage recourse to NAFTA arbitration at the expense of domestic appeal or review when, in the general run of cases, domestic appeal or review would offer more wide-ranging review as they are not confined to breaches of international law.’
- 45.
By writ of certiorari any party to a civil or criminal case can file a petition for review of the case by the Supreme Court.
- 46.
Francioni 2009, p. 735, observes as follows: ‘Loewen is not only a bad precedent for access to justice: it is also a bad precedent for the investment community, which can hardly benefit from the extreme and unrealistic application of the rule of prior exhaustion of local remedies when the risk of grave loss is imminent and a miscarriage of justice has been acknowledged. All the more so in a case such as this where the alien is facing the threat of the execution of an exorbitant verdict of punitive damages—which remain highly contested in international law—and when further judicial protection is barred by an excessive bond.’
- 47.
The provision of a cautio iudicatum solvi, on the other hand, was regarded as lawful by the majority of writers. Anzilotti 1906, pp. 5 et seq., in particular p. 26, note 2, was of this view: ‘Nous laissons ici de côté la question de savoir si l’état peut, sans violer le droit international, imposer à l’étranger, qui veut avoir recours à la justice, des obligations qui ne regardent pas les nationaux. Au point de vue du droit positif actuel, nous ne croyons pas qu’il sont possible de nier cette possibilité d’une manière absolue (qu’on se rappelle la caution judicatum solvi). Mais ce qu’il faut affirmer, c’est que les restrictions à la faculté des étrangers de s’adresser aux tribunaux ne doivent jamais être de nature à rendre le recours impossible: cela constituerait sans aucun doute le déni de justice.’ Support for this proposition may also be found in Verdross 1931, pp. 383–384: ‘il est généralement admis que l’Etat de séjour puisse exiger des étranger, à défaut de conventions spéciales, la caution des frais du procès (cautio iudicatum solvi).’
- 48.
Kiestra 2014, p. 122.
- 49.
This can be inferred both from Article II-47 of the 2007 Charter of Fundamental Rights of the European Union (‘Right to an effective remedy and to a fair trial—Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented’) and the case law of the CJUE relying on the non-discrimination principle. One may mention ECJ, David Charles Hayes and Jeannette Karen Hayes v. Kronenberger GmbH., Judgment of 20 March 1997, para 25 (‘Article 6 of the [EC] Treaty must be interpreted as precluding a Member State from requiring security for costs to be furnished by a national of another Member State who has brought an action in one of its civil courts against one of its nationals where that requirement may not be imposed on its own nationals who have neither assets nor a residence in that country, in a situation where the action is connected with the exercise of fundamental freedoms guaranteed by Community law.’)
- 50.
Reference is made, inter alia, to Article 14 of the UN Covenant on Civil and Political Rights, according to which ‘All persons shall be equal before the courts and tribunals’.
- 51.
Article 16, para 2, of the 1951 Convention relating to the status of refugees states as follows: ‘A refugee shall enjoy in the Contracting State in which he has his habitual residence the same treatment as a national in matters pertaining to access to the Courts, including legal assistance and exemption from cautio judicatum solvi.’
- 52.
Article 16, para 2, of the 1951 Convention relating to the status of the stateless persons states as follows: ‘A stateless person shall enjoy in the Contracting State in which he has his habitual residence the same treatment as a national in matters pertaining to access to the Courts, including legal assistance and exemption from cautio judicatum solvi.’
- 53.
Iberdrola v. Guatemala, ICSID Case No. ARB/09/15, Award of 17 August 2012.
- 54.
Idem, para 444.
- 55.
Victor Pey Casado et al. v. Chile, ICSID Case No. ARB/98/2, Award of 8 May 2008. On the subsequent development of the case, see Schreurer 2014.
- 56.
Para 659 of the judgment states as follows: ‘[L]a ausencia de resolución por parte de los tribunales civiles chilenos en cuanto a las pretensiones del Sr. Pey Casado se considera una denegación de justicia. En efecto, la ausencia de una decisión de primera instancia en cuanto al fondo de las demandas de las partes demandantes durante siete años […] debe calificarse come una denegación de justicia por parte de los tribunales chilenos. De hecho, los plazos procesales extraordinariamente largos constituyen una de las formas clásicas de denegación de justicia.’ For an additional case of judicial misapplication of national law, see Dan Cake (Portugal) S.A. v. Hungary, ICSID Case No. ARB/12/9, Decision on Jurisdiction and Liability of 24 August 2015, paras 142 et seq.
- 57.
Jan de Nul v. Egypt, ICSID Case No. ARB/04/13, Award of 6 November 2008.
- 58.
Para 204.
- 59.
Philip Morris et al. v. Uruguay, ICSID Case No. ARB/10/7, Award of 8 July 2016, para 529. For a critical assessment of this conclusion, see the concurring and dissenting opinion appended by the co-arbitrator Gary Born, paras 6 et seq.
- 60.
Meldrum 2000, p. 33. According to the same author, six types of country risk may be identified: (1) Economic Risk. A significant change in the economic structure or growth rate that produces a major change in the expected return of an investment; (2) Transfer Risk. The risk arising from a decision by a foreign government to restrict capital movements; (3) Exchange Risk. An unexpected adverse movement in the exchange rate; (4) Location or Neighbourhood Risk. Spillover effects caused by problems in a region, in a country’s trading partner, or in countries with similar perceived characteristics; (5) Sovereign Risk. A government becomes unwilling or unable to meet its loan obligations, or reneges on loans it guarantees; (6) Political Risk. Risk of a change in political institutions stemming from a change in government control, social fabric, or other non-economic factor. On this point, see also Hirsch 2011.
- 61.
Electrabel S.A. v. Hungary, ICSID No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability of 30 November 2012, para 7.78.
- 62.
Reference has first to be made to the case Oscar Chinn (United Kingdom v. Belgium), Judgment of 12 December 1934, p. 84: ‘Mr. Chinn, a British subject, when, in 1929, he entered the river transport business, could not have been ignorant of the existence of the competition which he would encounter on the part of Unatra, which had been established since 1925, of the magnitude of the capital invested in that Company, of the connection it had with the Colonial and Belgian Governments, and of the predominant role reserved to the latter with regard to the fixing and application for transport rates.’ The same rationale underpins most of the decisions rendered in matter of FET. One may mention Generation Ukraine, Inc v. Ukraine, ICSID Case No. ARB/00/9, Award of 16 September 2003, para 20.37: ‘[I]t is relevant to consider the vicissitudes of the economy of the state that is host to the investment in determining the investor’s legitimate expectations, the protection of which is a major concern of the minimum standards of treatment contained in bilateral investment treaties. The Claimant was attracted to the Ukraine because of the possibility of earning a rate of return on its capital in significant excess to the other investment opportunities in more developed economies. The Claimant thus invested in the Ukraine on notice of both the prospects and the potential pitfalls. Its investment was speculative. Perhaps for this very reason, the Claimant was cautious about contributing substantial sums of its own money to the enterprise, preferring to seek capital from third parties to finance the construction of the building. By 31 October 1997, the Claimant had undoubtedly experienced frustration and delay caused by bureaucratic incompetence and recalcitrance in various forms. But equally, the Claimant had managed to secure a 49-year leasehold over prime commercial property in the centre of Kyiv without having participated in a competitive tender and without having made any substantial payment to the Ukrainian authorities.’ Finally, similar remarks may be found in the recent volume published by the UNCTAD on FET, 2012. Its pp. 71–72, in particular, state as follows: ‘Investors should also be aware and take into account the level of the country’s development and administrative practices […] It is normal that the prospects of greater profits are accompanied by greater risks, including in the regulatory sphere.’
- 63.
One example is Article 11 of the 2009 ASEAN Comprehensive Investment Agreement, supra footnote 6.
- 64.
A similar conclusion may be inferred, inter alia, from Rumeli Telekom A.S. et al. v. Kazakhstan, ICSID Case No. ARB/05/16, Award of 29 July 2008, para 623: ‘Courts are not the only State organs the conduct of which can amount to a denial of justice. Administrative organs can also engage the State’s international responsibility by denying justice.’ And indeed: the award speaks of denial of justice, but it implicitly refers to the different principle of fair administrative proceeding; not by chance, with a view to exemplifying the case at issue, the tribunal mention the two well-known decisions in Amco, that is to say, two decisions where the violation of such a principle has been ascertained. On this point, see infra.
- 65.
Buffoni 2008, p. 38.
- 66.
397 U.S. 254 (1970). In this case, in particular, the Supreme Court held that the Fourteenth Amendment due process clause required a State agency to provide an evidentiary hearing before terminating a person welfare’s benefits after the agency determined that the individual was no longer eligible for such benefits.
- 67.
Ridge v. Boldwin [1964] AC 40.
- 68.
See Law No. 241, 7 August 1990 and subsequent amendments. A number of national decisions further support such a conclusion. One may mention Italian Court of Cassation, first civil section, 20 May 2002, No. 7341.
- 69.
Judgment of 23 October 1974, para 15.
- 70.
Judgment of 6 December 1994, para 42.
- 71.
Bifulco 2001.
- 72.
Della Cananea 2010, p. 71.
- 73.
Della Cananea 2011, p. 100.
- 74.
One example in this regard lies in Articles 6 et seq. of the Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters. These Articles actually state that the public concerned shall be adequately informed in an environmental decision-making procedure and benefits from a number of guarantees, such as that guaranteeing the participation in the procedure and the submission of comments and questions. The Agreement on Implementation of Article VI of 1994 GATT is equally revealing. Article 6, para 1, of this agreement (‘Evidence’) states as follows: ‘All interested parties in an anti-dumping investigation shall be given notice of the information which the authorities require and ample opportunity to present in writing all evidence which they consider relevant in respect of the investigation in question.’
- 75.
Reference can be made to the judgment passed by the International Tribunal for the Law of the Sea in Juno Trader (San Vincent and the Grenadines v. Guinea-Bissau), Judgment of 18 December 2004. Its para 77 states as follows: ‘The obligation of prompt release of vessels and crews includes elementary considerations of humanity and due process of law. The requirement that the bond or other financial security must be reasonable indicates that a concern for fairness is one of the purposes of this provision.’ (emphasis added) The separate opinion of judge Treves confirms the impression that due process, in this case, was understood in terms of fairness in administrative proceedings: ‘In the present case, the essential fact seems to me to be that between the time of the arrest of the ship and the time of the application to the tribunal (and also up to the hearing before the tribunal) all domestic procedures held in the case (whatever other possibilities might have been open under the local law) have been inaudita altera parte (namely, without giving the accused party the possibility of being heard).’ In this regard, see Cassese 2006, pp. 120 et seq.
- 76.
This practice has been commented in Sect. 3.4.1 et seq.
- 77.
Genin et al. v. Estonia, ICSID Case No. ARB/99/2, Award of 25 June 2001.
- 78.
Idem, para 358. The same para states as follows: ‘When the Council of the Bank of Estonia was convened on 9 September 1997 to discuss the revocation of EIB’s licence, no representative of EIB was invited to respond to the submission made by P. Negri, head of Banking Supervision, and A. Schmidt, head of the Legal Department, as to why revocation of EIB’s license was necessary or appropriate in the circumstance.’
- 79.
‘The tribunal considers […] that certain procedures followed by the Estonian authorities in the present instance, while they do conform to Estonian law and do not amount to a denial of due process, can be characterized as being contrary to generally accepted banking and regulatory practice. They include the following: (1) No formal notice was given to EIB that its licence would be revoked unless it complied with the Bank of Estonia’s demands within a reasonable time; (2) no representative of EIB was invited to the session of the Bank of Estonia’s Council that dealt with the revocation to respond to the charges brought by the Governor; (3) the revocation of the license was made immediately effective, giving EIB no opportunity to challenge it in court before it was publicly announced’: para 364 of the Award.
- 80.
Urbaser S.A. et al. v. Argentina, ICSID Case No. ARB/07/26, Award of 8 December 2016, paras 842 et seq.
- 81.
Amco I v. Indonesia, Award of 20 November 1984 (in International Legal Materials 24, 1985, pp. 1022 et seq.) and Amco II v. Indonesia, ICSID Case No. ARB/81/1, Award in the Resubmitted Case of 5 June 1990 (in ICSID Reports 1, 1993, pp. 569 et seq.)
- 82.
Thus, in Amco I, it was argued that ‘the warning (or warnings) are an element of due process, rightly in the opinion of the tribunal, established by Indonesia law to protect the investor, in particular where a sanction as heavy—and indeed irremediable—as a revocation is envisaged against him. In the instant case, this protection was not made available to the Claimants, who were thus deprived of due process, contrary to Indonesian law as well as contrary to general principles of law. Moreover, infringement of the due process principles is met again when examining the manner in which the revocation was prepared, quite apart from the issue of the absence of any warning’, paras 198–199; emphasis added. In this passage, the tribunal seems to regard the fair administrative proceeding rule as a general principle of law. Nonetheless, insofar as there existed a national rule providing for this rule, any reference to the category of principles was ad adiunvandum only.
- 83.
According to the respondent State, in particular, ‘warning or warnings would have been useless in the circumstances of this case and consequently, that even if admitted, the lack of warning would be irrelevant—since no remedy could have been brought by the Claimants to their alleged failures, which led to the revocation’: para 202(i). Nonetheless, the tribunal was of the view that ‘[w]hether this is so in fact, and whether or to what extent such remedy was needed will be seen when examining hereunder the alleged failures on which the revocation was based. Suffice it to recall here that the purpose of the warning, or warnings, is not only to allow such remedies, but also to offer to the investor the opportunity to discuss the alleged failures, in order to demonstrate either that they do not exist, or that they do not justify revocation. It could not be argued, in this respect, that discussion and defence would not have changed the administration’s mind; because such argument would mean that the administration had decided in advance not to take into account any argument of the investor whatsoever, which would itself amount to a refusal of due process’: idem.
- 84.
Metalclad Corporation v. Mexico, ICSID Case No. ARB(AF)/97/11, Award of 30 August 2000.
- 85.
Para 76 of the decision states as follows: ‘Prominent in the statement of principles and rules that introduces the Agreement is the reference to “transparency” (NAFTA Article 102(1)). The tribunal understands this to include the idea that all relevant legal requirements for the purpose of initiating, completing and successfully operating investments made, or intended to be made, under the Agreement should be capable of being readily known to all affected investors of another Party. There should be no room for doubt or uncertainty on such matters. Once the authorities of the central government of any Party (whose international responsibility in such matters has been identified in the preceding section) become aware of any scope for misunderstanding or confusion in this connection, it is their duty to ensure that the correct position is promptly determined and clearly stated so that investors can proceed with all appropriate expedition in the confident belief that they are acting in accordance with all relevant laws’.
- 86.
‘[T]he permit was denied at a meeting of the Municipal Town Council of which Metalclad received no notice, to which it received no invitation, and at which it was given no opportunity to appear’: idem, para 91
- 87.
Middle East Cement Shipping and Handling Co.S.A. v. Egypt, ICSID Case No. ARB/99/6, Award of 12 April 2002, para 143.
- 88.
‘The tribunal has found […] the auction procedure applied here to have not been ‘under due process of law’ (Article 4a) of the BIT) and specifically the notification procedure to have not been sufficient’: idem, para 147.
- 89.
Técnicas Medioambiente Tecmed S.A. v. Mexico, ICSID Case No. ARB (AF)/00/2, Award of 29 May 2003.
- 90.
Idem, para 122.
- 91.
Howell 2016, p. 2.
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Palombino, F.M. (2018). FET and Due Process of Law. In: Fair and Equitable Treatment and the Fabric of General Principles. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-210-1_3
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