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Economic Disputes between States and Private Parties: Some Legal Thoughts on the Institutionalization of their Settlement
Published online by Cambridge University Press: 21 May 2009
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The international economic order of the late fifties and early sixties was still fascinated by the so-called salt-water colonialism. This appears from international legal attempts at that time to offer more protection to foreign investors than was available to their host countries. The mid-sixties inaugurated a new era by reversing this trend. Legal aspects of the settlement of investment disputes between States and nationals of other States, such as stabilization clauses and the choice of both forum and applicable law, thus in the seventies became subordinate to the discretionary powers of host States, whether or not a party to a contract. A possible consensus regarding the 1974 Charter of Economic Rights and Duties of States (CERDS) was even abandoned because of this prevailing view. The real challenge in this period formed the establishment of a New International Economic Order (NIEO) moulded in a predominantly political blue-print for the development of States as the sole or main actors in international economic relations.
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References
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60. GA Res. 31/98 of 15 December 1976, adopted without a vote.
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79. David, , op.cit. n.29, p. 262Google Scholar writes: ‘II serait vain de chercher à rèaliser un accord international pour définir les matières dans lesquelles on peut, ou on ne peut pas, recourir à l'arbitrage. La sagesse demande qu'on laisse chaque Etat décider souverainement pour quelles catégories de contestation il admet ou non ce recours; toute perspective de voir ratifier les Conventions internationales disparaîtrait s'il en était autrement’. However, in our opinion, this has nothing to do with the ‘false doctrine’, which identifies the State and the law and against which Rigaux rightly makes a stand. See Rigaux, F., ‘Souveraineté des états et arbitrage transnational’, Le Droit des Relations Economiques Internationales, Etudes offertes à Berthold Goldman (1982) p. 274Google Scholar. From a waiver of that competence by a host State in the context of a contract with the national of another State international law may draw the conclusion that the State's own concept of its power to do so will be decisive.
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82. World Bank Convention Establishing the Multilateral Investment Guarantee Agency (MIGA), Art. 24 with Annex I and Art. 57 with Annex II, in 24 ILM (1985) pp. 1616, 1626, 1629–1634 and the Introductory Note, p. 1603; see also Shihata, , loc.cit. n.15, pp. 17–19Google Scholar.
83. Ibid.
84. According to David, (op.cit. n.29, p. 263)Google Scholar a State party to the ICSID or COMECON Conventions is not allowed to oppose an arbitration on the mere ground that such an arbitration violates the public order as that State sees fit: ‘une telle assertion serait contraire à toute bonne fois dans le cas de la Convention de la BIRD, à un engagement pris sur le plan du droit international public dans le cas de la Convention entre Etats du CAEM. Nulle question de conformité ou contrariété à l'ordre public ne saurait se poser, en conséquence, dans le cas des conventions ou litiges auxquels sont applicables ces Conventions’.
85. The distinction in internal law between the rights of the shareholders (for example, the right to vote and the right to dividend) and the rights of the company was transposed to the international level by the International Court of Justice in the Barcelona Inaction case. If the rights of the company are violated this may entail an infringement upon the ‘interests’ of the shareholders. Concerning this distinction see Kokkini-Iatridou and Waart, De, loc.cit. n.42, pp. 124–128Google Scholar, with references to the relevant literature.
86. See Annex, para. 14.
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