1. SORNARAJAH, M., The International Law on Foreign Investment, 2nd ed. (Cambridge: Cambridge University Press, 2004)CrossRefGoogle Scholar.

2. The post-colonial period extending from the end of World War II to the fall of the Soviet Union was characterized by the movement on the part of the newly independent states and the non-aligned nations to establish a New International Economic Order. It was part of that package of norms to recover sovereignty over issues of foreign investment. The Charter of Economic Rights and Duties of States, GA Res. 3281 (XXIX), UN Doc. A/9631 (1974), art. 2(2)(c) asserted that the domestic law of each state alone had competence over matters relating to foreign investment, denying the relevance of international law. In many senses, this was a restatement of the international law that had existed in the past, as most authoritative pronouncements in the field left such issues to domestic law. See e.g., Case Concerning the Payment of Various Serbian Loans Issued in France, [1929] P.C.I.J, Series A, No. 20. However, developed states had sought to build up notions of an international minimum standard and a theory of internationalized foreign investment contracts.

3. China leads with an estimated reserve of over 3 trillion US dollars. Smaller states like Singapore and Dubai hold large amounts of capital through such funds. Norway and Sweden are developed states operating surplus capital through SWFs. Smaller developing states, like Malaysia, also have SWFs.

4. LIPSON, Charles, Standing Guard: Protecting Foreign Capital in the Nineteenth and Twentieth Centuries (Berkeley: University of California Press, 1985)Google Scholar.

5. Lipson, ibid., contains a history of the manner in which US administrations formulated a doctrine justifying intervention to protect American investments in Latin America. Sometimes, there was forcible intervention.

6. This took the form of the Calvo Doctrine, which asserted that no external standards applied by foreign tribunals were relevant to the settlement of investment disputes. Instead, such disputes were subject to local laws applied by local tribunals. See e.g., LIPSON, Kurt, The Place of the Calvo Clause in International Law (Oxford: Oxford University Press, 1946)Google Scholar.

7. The first case by a Chinese national has been brought against Peru. See Tza Yap Shum v. Republic of Peru, Decision on Jurisdiction and Competence of the Arbitral Tribunal of 19 June 2009, ICSID Case No. ARB/07/6. The first case by an Indian national has been brought against the UK. See City of London v Sancheti [2008] EWCA Civ. 1283. There is a case against Germany brought by a Swedish claimant. See Vattenfall A.B., Vattenfall Europe A.G., Vattenfall Europe Generation A.G. v. Federal Republic of Germany, ICSID Case No. ARB/09/6 (status pending). The tables have indeed been turned, in that developed states are becoming respondents in investment arbitrations.

8. The phrase is taken from a book with that title. See STIGLITZ, Joseph, The Roaring Nineties: Why We’re Paying the Price for the Greediest Decade in History (London: Penguin Books, 2003)Google Scholar.

9. For the role of greed in fashioning international law principles, see SORNARAJAH, M., “The Law for Need or the Law for Greed? Restoring the Lost Law in the International Law of Foreign Investment” (2008) 6 International Environmental Agreements: Politics, Law and Economics 329Google Scholar.

10. My own views on this have been stated in “A Coming Crisis: Expansionary Trends in Investment Treaty Arbitration” in Karl SAUVANT, ed., Appeals Mechanism in International Investment Disputes (New York: Oxford University Press, 2008), 39; SORNARAJAH, M., “The Retreat of Neo-Liberalism in Investment Arbitration” in Catherine ROGERS and Robert ALFORD, eds., The Future of Investment Arbitration (New York: Oxford University Press, 2009), 273Google Scholar.

11. SORNARAJAH, M., “The Ravage and Retreat of Neo-Liberalism in Foreign Investment Arbitration” (2010) 2 Yearbook on International Investment Law & PolicyGoogle Scholar.

12. There is presently an economic debate taking place as to whether investment treaties help in the flow of foreign investment into developing countries.

13. These are Brazil, Russia, India, and China.

14. The recent Argentine cases largely arose out of privatization of shares in state companies. See infra note 19.

15. VERNON, Raymond, Sovereignty at Bay: The Multinational Spread of U.S. Enterprises (New York: Basic Books, 1971)Google Scholar.

16. “Temasek’s Revised Charter” Wall Street Journal (31 August 2009) (reporting that Singapore has instituted measures to divorce the fund from the government and states that this may be illusory as the President has residual control over these funds).

17. ASEAN Comprehensive Investment Agreement, 26 February 2009, online: ASEAN 〈http://www.aseansec.org/22244.htm〉, arts. 4(d) and (e) [ASEAN Investment Agreement].

18. There are statements in awards that even portfolio investments are protected. However, this would be incorrect unless there are express words to that effect in the treaty.

19. CMS Gas Transmission Company v. Argentine Republic, Award of 12 May 2005, ICSID Case No. ARB/01/8, [2005] 44 I.L.M. 1205 [CMS v Argentina]; Sempra Energy International v. Argentine Republic, Award of 28 September 2007, ICSID Case No. ARB/02/16; Siemens A.G. v. Argentine Republic, Award of 6 February 2007, ICSID Case No. ARB/02/8.

20. The customary law is contained in Case Concerning the Barcelona Traction, Light and Power Company, Limited, [1970] I.C.J. Rep. 1 and confirmed in Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Decision on the preliminary objections raised, 27 May 2007, [2007] I.C.J. Rep. 87.

21. In the context of ASEAN, a possible test case would be the interference by the Monopolies Commission of Indonesia with shareholdings by Temasek in the Indonesian mobile phone services market. The Indonesian Supreme Court upheld the order of the Monopolies Commission on 24 May 2010. See “Indonesian Court Rejects Temasek's Final Appeal on Telecoms” Reuters (24 May 2010).

22. For instance, the recourse to customary international law by the US and its NAFTA partners to interpret fair and equitable treatment narrowly. See Methanex case, infra note 56.

23. There is evidence that many of them are made because the International Monetary Fund or the World Bank makes them conditions for loans and other facilities.

24. The efforts are traced in SORNARAJAH, M., The International Law on Foreign Investment, 3rd ed. (Cambridge: Cambridge University Press, 2010)CrossRefGoogle Scholar.

25. There has been a great reluctance to bring investment-related cases before the International Court of Justice. This may be due to the fear that the Court may divide so deeply as to disclose divisions which exist and break the carefully maintained illusion that there is in fact a customary law on foreign investment protection.

26. It was reported that Temasek Holdings contemplated such action in relation to shares in Telekom Indonesia. The Monopolies Commission’s findings that the shareholdings of the Singapore sovereign fund violated the monopolies laws of Indonesia were upheld by the Indonesian Supreme Court. See supra note 21. There is speculation as to whether the matter could give rise to an investment dispute. If the dispute comes before an investment tribunal on the basis of the violation of an investment treaty, such as the Agreement Among the Government of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore, and the Kingdom of Thailand for the Promotion and Protection of Investments, 15 December 1987, online: ASEAN 〈http://www.aseansec.org/12812.htm〉, it would be the first time a SWF would have brought proceedings against the host state. The new ASEAN Investment Agreement, supra note 17, specifically provides that SWFs would have to be treated as investors under the Treaty.

27. Directorate for Financial, Fiscal, and Enterprise Affairs, Committee on International Investment and Multinational Investments, OECD Guidelines on Multinational Enterprises, online: OECD 〈http://www.olis.oecd.org/olis/2000doc.nsf/LinkTo/NT00002F06/$FILE/JT00115758.PDF〉.

28. APEC Committee on Trade and Investment, Guide to the Investment Regimes of the APEC Member Economies (Singapore: APEC Secretariat, 2003) at 673–4, Annex IIA.

29. This is an inference that has to be drawn from the requirement that host state laws must be complied with as to entry. See Inceysa Vallisoletana S.L. v. Republic of El Salvador, Award of 2 August 2006, ICSID Case No. ARB/03/26 [Inceysa v. El Salvador]. This duty to comply exists throughout the course of the investment.

30. The involvement of multinational companies in supporting the Suharto regime is well recorded. Marcos in the Philippines was similarly linked. Likewise, many dictatorships were maintained by the support of MNCs in various parts of the world.

31. The overthrow of Thaksin Shinawatra and the later troubles that resulted in Thailand commenced with the purchase of large shares of telecommunication-related industries by Singapore funds. The political reasons for concern that were given related to the control that would be acquired by such funds, in sensitive areas that involve possible national security concerns. See “Thailand Weighs Thaksin Damage as Temasek Stocks Drop” Bloomberg (2 March 2010). The acquisition of shares by SWFs in several industrial sectors, as will be seen, causes such concerns.

32. International Working Group of Sovereign Wealth Funds (IWG-SWF), Sovereign Wealth Funds: Generally Accepted Principles and Practices—“Santiago Principles” (October 2008), online: 〈http://www.iwg-swf.org/pubs/eng/santiagoprinciples.pdf〉 [Santiago Principles].

33. Alien Tort Claims Act, United States Code, Title 28, Part IV, Chap. 85, Sec. 1350, reads: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”

34. The Canadian Oil Company, Talisman, faced Alien Tort Claims Act litigation in respect of its activities in the Sudan. It pulled out of the Sudan due to public pressure. It is unlikely that the SWFs of certain states, which are motivated entirely by profit concerns, would be amenable to such pressures. Another development relates to the view that investments involved in violating ius cogens norms will not be protected. See Phoenix Action Ltd. v. Czech Republic, Award of 15 April 2009, ICSID Case No. ARB/06/5.

35. “Statement by H.E. Hamad Al Hurr Al-Suwaidi, Co-Chair, International Working Group of Sovereign Wealth Funds, Meeting of the International Monetary and Financial Committee” (11 October 2008), online: International Working Group of Sovereign Wealth Funds 〈http://www.iwg-swf.org/pubs/eng/imfciwg.pdf〉.

36. For example, the acquisition of UNOCAL shares by Chinese interests and the acquisition of telecommunication shares by Singapore funds. See supra notes 21 and 31.

37. Santiago Principles, supra note 32.

38. A series of investment treaty awards have held that these regulatory rules must be conformed to before treaty protection can be sought. Fraport A.G. Frankfurt Airport Services Worldwide v. Republic of the Philippines, Award of 16 August 2007, ICSID Case No. ARB/03/25; Inceysa v. El Salvador, supra note 29.

39. Non-disclosure could clearly raise issues of fraud. On the operation of fraud in investment transactions, see Marvin Roy Feldman Karpa v. United Mexican States, Award of 16 December 2002, ICSID Case No. ARB(AF)/99/1, [2005] 7 ICSID Rep. 341.

40. ASEAN Investment Agreement, supra note 17.

41. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, (entered into force 14 October 1966), online: ICSID 〈http://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf〉, art. 25 [ICSID Convention].

42. SCHREUER, Christoph, The ICSID Convention: A Commentary (Cambridge: Cambridge University Press, 2001) at 121Google Scholar.

43. Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, [2001] 6 ICSID Rep. 398 [Salini].

44. Ibid., at para. 52.

45. Malaysian Historical Salvors Sdn. Bhd. v. Malaysia, Decision on the Application for the Annulment of the Award of 16 April 2009, ICSID Case No. ARB/05/10; commentary by Jean HO in (2010) 26 Arbitration International. Another annulment committee was adamant that economic development was an important criterion. See Patrick Mitchell v Democratic Republic of the Congo, Decision on the Application for the Annulment of the Award of 1 November 2006, ICSID Case No. ARB/99/7. See further DOLZER, Rudolf and SCHREUER, Christoph, Principles of International Investment Law (Oxford: Oxford University Press, 2008) at 69–70CrossRefGoogle Scholar.

46. On promissory notes as protected investments under treaties, see Fedax N.V. v. Republic of Venezuela, ICSID Case No. ARB/96/3 (Award, 9 March 1998), [1997] 5 ICSID Rep. 183. On portfolio investments, further see SORNARAJAH, M., “Portfolio Investments and Definition of Investments” (Paper presented at the 50 Years Of Bilateral Investment Treaties Conference 2009 in Frankfurt, Germany, 1–3 December 2009)Google Scholar.

47. MCLACHLAN, Campbell, SHORE, Laurence, and WEINIGER, Matthew, International Investment Arbitration: Substantive Principles (New York: Oxford University Press, 2008) at 164–171CrossRefGoogle Scholar.

48. See the more favourable award in Pantechniki S.A. Contractors & Engineers v. Republic of Albania, Award of 30 July 2009, ICSID Case No. ARB/07/21. However, it would be difficult to downplay the significance of the requirement of economic development.

49. Sectors could be excluded from these standards. For example, the US has a relatively long list of excluded sectors. There could be limitations requiring special formalities such as residence. See North American Free Trade Agreement, December 1992 (entered into force 1 January 1994), online: NAFTA Secretariat 〈http://www.nafta-sec-alena.org/en/view.aspx?conID=590&mtpiID=ALL〉, art. 1111(1) [NAFTA]). Or that investments be constituted according to the laws and regulations. Residence and control are certainly factors that would impact SWFs.

50. For the scope of the limitation, see Fraport A.G. Frankfurt Airport Services Worldwide v. Republic of the Philippines, Award of 16 August 2007, ICSID Case No. ARB/03/25; Desert Line Projects LLC v. Republic of Yemen, Award of 6 February 2008, ICSID Case No. ARB/05/17.

51. See e.g., NAFTA, supra note 49, art. 1405.

52. Dominance could still be achieved by a minority shareholder through manipulation of other shareholders. This would be particularly tempting for a shareholder with unlimited capital resources.

53. United Parcel Service of America, Inc. v. Government of Canada, NAFTA Award of 24 May 2007, online: Foreign Affairs and International Trade Canada 〈http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/MeritsAward24May2007.pdf〉.

54. Among other things, it permitted the subsidiary’s customers to drop off parcels at its post offices.

55. An OECD study on national treatment states this requirement. OECD, National Treatment for Foreign-Controlled Enterprises (Paris: Organization for Economic Co-operation and Development, 1993)Google Scholar. See also Pope & Talbot Inc. v. Government of Canada, [2002] 7 ICSID Rep. 43.

56. Methanex Corporation v. The United States of America, NAFTA Award of 3 August 2005, online: US Department of State 〈http://www.state.gov/documents/organization/51052.pdf〉, at Part IV, Chapter B, Para. 14, which stated, “In ideal circumstances, the foreign investor … should be compared to a domestic investor … that is like it in all relevant respects, but for the nationality of ownership” [Methanex].

57. Professor Schreuer has traced the developments that have taken place, which he identified as having commenced in 2000. Since then, several awards, particularly those involving Argentina, have expanded the scope of fair and equitable treatment. See Dolzer and Schreuer, supra note 45 at 175–8.

58. CMS v. Argentina, supra note 19; Tecnicas Medioambientales Tecmed S.A. v. The United Mexican States, Award of 29 May 2003, ICSID Case No. ARB(AF)/00/2, [2004] 43 I.L.M. 133; MTD Equity Sdn. Bhd. and MTD Chile S.A. v. Republic of Chile, Award of 25 May 2004, ICSID Case No. ARB/01/7, [2005] 44 I.L.M. 91.

59. Ethyl Corp. v. The Government of Canada, [1999] 38 I.L.M. 708.

60. Office of the United States Trade Representative, US-Singapore Exchange of Letters on Expropriation (26 May 2003), online: USTR 〈http://www.ustr.gov/sites/default/files/uploads/agreements/fta/singapore/asset_upload_file58_4058.pdf〉 .

61. Methanex, supra note 56.

62. This followed the failure of Icebank to honour withdrawals by customers. On 8 October 2008, the British government announced a freeze of all assets of Iceland in Britain. Landsbanki was similarly affected by orders in other European countries. See WAIBEL, Michael, “Iceland’s Crisis—Quo Vadis International Law”, 14 ASIL Insight (1 March 2010), online: ASIL 〈http://www.asil.org/files/insight100301pdf.pdf〉Google Scholar.

63. Iceland threatened litigation before European courts against the freezing, but did not go through with it. The freezing orders were later lifted and the British government gave a loan to Iceland on condition that British customers’ transactions were honoured. Nevertheless, the original threat of Iceland to sue was not carried out because the suit may have failed.

64. A point that forms the focus of CALAMITA, N. Jansen, “The British Bank Nationalizations: An International Law Perspective” (2009) 58 International and Comparative Law Quarterly 119CrossRefGoogle Scholar.

65. SORNARAJAH, M., “The Ravage and Retreat of Neo-Liberalism in International Investment Law” (2010) 2 Yearbook on International Investment Law & PolicyGoogle Scholar.

66. VANDEVELDE, Kenneth, “A Comparison of the 2004 and1994 U.S. Model BITs: Rebalancing Investor and Host Country Interests” in Karl SAUVANT, ed., Yearbook on International Investment Law & Policy 2008–2009 (New York: Oxford University Press, 2009)Google Scholar.

67. See CMS v. Argentina, supra note 19 (Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 1 September 2006); LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Argentine Republic, Award of 3 November 2008, ICSID Case No. ARB/02/1 (annulment proceeding pending); National Grid P.L.C. v. Argentine Republic, online: Investment Treaty Arbitration 〈http://ita.law.uvic.ca/documents/NGvArgentina.pdf〉.

68. See for instance, BURKE-WHITE, William W. and VON STADEN, Andreas, “Investment Protection in Extraordinary Times: The Interpretation and Application of Non-Precluded Measures Provisions in Bilateral Investment Treaties” (2008) 48 Virginia Journal of International Law 307Google Scholar.

69. The present writer was an expert witness for Argentina in El Paso Energy International Company v. Argentine Republic, ICSID Case No. ARB/03/15 (status pending). The views here are admittedly coloured by that experience.