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Cultural Heritage Challenges in Investment Arbitration: Review of Valentina Vadi's Cultural Heritage in International Investment Law and Arbitration
Published online by Cambridge University Press: 01 June 2017
Abstract
International investment law is usually oriented to protect investors while cultural heritage law focuses on the protection of unique items and activities of cultural value. These two subsystems coexist and increasingly intersect within the international legal system, mainly in the context of investment arbitration proceedings, where domestic cultural policies are balanced against the interests and rights of foreign investors. The interplay between these subsystems entails legal complexities and challenges and, as a result of the increasing number of cultural heritage disputes, demands new approaches in the fields of cultural governance, international relations and dispute settlement. These issues are thoroughly addressed by Valentina Vadi in her book Cultural Heritage in International Investment Law and Arbitration (Cambridge University Press 2014).
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References
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10 Considerations regarding cultural heritage in investment proceedings are included in Parts II and III of the book under analysis.
11 The term is used by Susan Franck to refer to the sudden increase in international investment proceedings involving investment treaties between 1995 and 2005: Franck, Susan, ‘The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law through Inconsistent Decisions’ (2005) 73 Fordham Law Review 1521, 1521Google Scholar. To date, there have been 510 proceedings registered pursuant to the International Centre for Settlement of Investment Disputes (ICSID) Convention (Convention on the Settlement of Investment Disputes between States and Nationals of Other States (entered into force 14 October 1966) 575 UNTS 159): ICSID Annual Report 2016, 39, https://icsid.worldbank.org/apps/ICSIDWEB/resources/Documents/ICSID_AR16_English_CRA_bl2_spreads.pdf.
12 Minor references to the other paradigms are also made.
13 UN Educational, Scientific and Cultural Organization (UNESCO), Convention concerning the Protection of the World Cultural and Natural Heritage (entered into force 17 December 1975) 1037 UNTS 151 (World Heritage Convention).
14 The author refers to the following decisions delivered by the Inter-American Court of Human Rights in which indigenous heritage was analysed under art 21 (right to property) of the American Convention on Human Rights (Pact of San Jose, Costa Rica (entered into force 18 July 1978) 1144 UNTS 123): Case of Mayagna (Sumo) Awas Tingni Community v Nicaragua (2001) Inter-Am Ct HR, Judgment of 31 January 2001, (Ser C) No 79, [149]; Case of the Yakye Axa Indigenous Community v Paraguay (2005) Inter-Am Ct HR, Judgment of 17 June 2005, (Ser C) No 125, para 124.
15 Emphasis in the original. A third position, based on the works of Professor B Stern, is also analysed briefly (68–69).
16 Penn Central Transportation Co v New York City 438 US 104 (1978).
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18 eg, United States v Gettysburg Electric Railway Co 160 US 668 (1896), cited at 70.
19 See, inter alia, Village of Euclid v Ambler Realty Co 272 US 365 (1928), cited at 70–71.
20 See, inter alia, City of New Orleans v Dukes 427 US 297 (1976), cited at 71.
21 On this issue, see Lucas v South Carolina Coastal Council 505 US 1003 (1992), cited at 72.
22 Philip Morris Brands Sàrl, Philip Morris Products SA and Abal Hermanos SA v Oriental Republic of Uruguay, ICSID Case No ARB/10/7 (formerly FTR Holding SA, Philip Morris Products SA and Abal Hermanos SA v Oriental Republic of Uruguay) Award (8 July 2016), paras 290–95.
23 ibid para 305.
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27 CME Czech Republic BV (The Netherlands) v The Czech Republic, UNCITRAL Tribunal, Final Award, 14 March 2003, separate opinion of Sir Ian Brownlie on the Issues at the Quantum Phase, para 74 (emphasis added).
28 Saluka Investments BV v The Czech Republic, UNCITRAL Tribunal, Partial Award (17 March 2006), para 255; Ronald S. Lauder v The Czech Republic, UNCITRAL Tribunal, Final Award (3 September 2001), para 242; Methanex Corporation v United States of America, UNCITRAL Tribunal, Final Award of the Tribunal on Jurisdiction and Merits (3 August 2005), Pt IV, Ch D, para 7, among others.
29 Tza Yap Shum v Republic of Peru, ICSID Case No ARB/07/6, Award (7 July 2011), para 95 (reviewer's translation from the original in Spanish: ‘Como ha indicado la Demandada, el ejercicio del poder regulatorio y administrativo del Estado lleva aparejada una presunción de legitimidad. Esta es particularmente evidente cuando se advierte que el Estado actúa en aras de un interés público de gran importancia como preservar el orden, la salud o la moral pública (los conocidos como “poderes de policía” del Estado)’).
30 Philip Morris (n 22) paras 429–30 (emphasis added).
31 High Court of Australia, The Commonwealth of Australia v State of Tasmania (1983) 158 CLR 1.
32 Marion Unglaube and Reinhard Unglaube v Republic of Costa Rica, ICSID Cases No ARB/08/1 and ARB/09/20, Award (16 May 2012); Southern Pacific Properties (Middle East) Ltd v Arab Republic of Egypt, ICSID Case No ARB/84/3, Award on the Merits (20 May 1992).
33 Glamis Gold Ltd v United States of America, ICSID Award (8 June 2009).
34 Sarfaty, Galit A, ‘Why Culture Matters in International Institutions: The Marginality of Human Rights at the World Bank’ (2009) 103 American Journal of International Law 647CrossRefGoogle Scholar, cited at 134.
35 While the World Heritage Convention covers heritage listed in the World Heritage List, art 12 establishes that ‘[t]he fact that a property belonging to the cultural or natural heritage has not been included in either of the two lists mentioned in paragraphs 2 [World Heritage List] and 4 [World Heritage in Danger List] of Article 11 shall in no way be construed to mean that it does not have an outstanding universal value for purposes other than those resulting from inclusion in these lists’.
36 Glamis Gold Ltd (n 33) fn 194. It is worth mentioning that although the site is not in the World Heritage List, the Quechan Indian Tribe ‘believe[s] that Kumastamxo, the God-son of their creator, Kukumat, led them down this sacred trail upon Kukumat's death’ (para 105) and that it has a religious significance similar to ‘Jerusalem or Mecca’ (para 111).
37 Parkerings-Compagniet AS v Republic of Lithuania, ICSID Case No ARB/05/8, Award (11 September 2007).
38 ibid para 284, cited at 128.
39 ibid para 396.
40 ibid para 332.
41 Simma, Bruno, ‘Universality of International Law from the Perspective of a Practitioner’ (2009) 20 European Journal of International Law 265, 290CrossRefGoogle Scholar, cited at 115.
42 Convention on the Protection of the Underwater Cultural Heritage (entered into force 2 January 2009) 2562 UNTS 3, art 1 defines underwater heritage as ‘all traces of human existence having a cultural, historical or archaeological character which have been partially or totally under water, periodically or continuously, for at least 100 years’.
43 MHS Sdn, Bhd v Malaysia, ICSID Case No ARB/05/10, Award on Jurisdiction (17 May 2007).
44 n 11.
45 MHS (n 43) paras 131–32, 146.
46 MHS (n 43) Decision on the Application for Annulment (16 April 2009), para 80.
47 ibid, dissenting opinion of Judge M. Shahabudeen (16 April 2009), para 4.
48 ibid para 28.
49 Patrick Mitchell v Democratic Republic of Congo, ICSID Case No ARB/99/7, Decision on the Application for Annulment of the Award (1 November 2006), para 31, cited at MHS (n 43) para 46.
50 Because of contradictory decisions between ad hoc tribunals, the legitimacy of IIL and ad hoc arbitration has been increasingly challenged. As Professor Pellet has stated, ‘there exists “some” jurisprudences constantes on a limited number of points and an unfortunate jurisprudential mess on many others’: Pellet, Allain, ‘The Case Law of the ICJ in Investment Arbitration’ (2013) 28(2) ICSID Law Review 223, 223–25CrossRefGoogle Scholar (brackets omitted). See also Franck (n 11).
51 Abaclat and Others v Argentina, Decision on Jurisdiction, ICSID Case No ARB/07/5, dissenting opinion of Professor G Abi-Saab (28 October 2011), para 50.
52 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (entered into force 18 March 2007) 2440 UNTS, art 4(1).
53 Preliminarily, the author provides very interesting hypothetical scenarios to approach the subject matter of the chapter: see 177–83.
54 Joseph Charles Lemire v Ukraine, ICSID Case No ARB/06/18.
55 ibid, Decision on Jurisdiction and Liability (14 January 2010), para 356, cited at 185.
56 ibid para 407.
57 ibid para 506 (internal citation omitted).
58 Treaty between the United States of America and Ukraine Concerning the Encouragement and Reciprocal Protection of Investment, with Annex, and Related Exchange of Letters (entered into force 16 November 1996), art II.6, Senate Excutive Report 104–13.
59 Lemire (n 54) para 505.
60 Lemire (n 54) Award (28 March 2011), paras 254, 339.
61 The author refers to the UN Declaration on the Rights of Indigenous Peoples (13 September 2007), UN Doc. A/RES/61/295; human rights instruments; labour instruments; UNESCO instruments; and certain World Bank policies: see in extenso 210–18.
62 Grand River Enterprises Six Nations Ltd v United States of America, ICSID Award (12 January 2011), para 210.
63 ie ‘OECD Guidelines for Multinational Enterprises: 2011 Edition’, http://www.oecd.org/daf/inv/mne/48004323.pdf; UN Human Rights Council, ‘Protect, Respect and Remedy: A Framework for Business and Human Rights’, Report of the Special Representative of the Secretary General on the Issue on Human Rights and Transnational Corporations and Other Business Enterprises, John Ruggie (7 April 2008), UN Doc A/HRC/8/5.
64 Kryvoi, Yaraslau, ‘Counterclaims in Investor-State Arbitration’ (2012) 21 Minnesota Journal of International Law 216, 219Google Scholar, cited at 254.
65 Armed Activities on the Territory of the Congo (Congo v Rwanda), Judgment [2006] ICJ Rep 8, [64], cited at 256.
66 Convention on the Prevention and Punishment of the Crime of Genocide (entered into force 12 January 1951) 78 UNTS 277.
67 Bundesgericht (Federal Supreme Court), 1 April 1997, Arrets du Tribunal Federal Suisse (ATF) 123 II 134 (Switz), cited at 259.
68 Vienna Convention on the Law of Treaties (entered into force 27 January 1980) 1155 UNTS 331.
69 Sands, Philippe, ‘Treaty, Custom and the Cross-Fertilization of International Law’ (1998) 1 Yale Human Rights & Development Law Journal 85, 102Google Scholar, cited at 265–66.
70 Philip Morris (n 22) para 399.
71 China–New Zealand Free Trade Agreement (entered into force 1 October 2008), art 200(3), cited at 279.
72 Trans-Pacific Strategic Economic Partnership Agreement (entered into force 28 May 2006), art 19(1)(3) of which establishes that ‘the Parties understand that the measures referred to in Article XX(f) of GATT 1994 include measures necessary to protect specific sites of historical or archaeological value, or to support creative arts of national value’.
73 Minority Schools in Albania Advisory Opinion (1935) PCIJ Rep (Ser A/B, No 64); Settlers of German Origin in Poland Advisory Opinion (1923) PCIJ Rep (Ser B, No 6) 6, cited at 284.
74 Canada has consistently included such clauses in its investment agreements (see 282). Japan has recently started to include such clauses in its BITs: see, among others, Agreement between Japan and Colombia for the Liberalization, Promotion and Protection of Investment (not in force), art 15(1)(d).
75 Agreement between France and Mexico on the Reciprocal Promotion and Protection of Investments (entered into force 12 October 2000), art 2(3); Agreement between Ethiopia and France for the Reciprocal Promotion and Protection of Investments (entered into force 7 August 2004); Agreement between France and Uganda for the Reciprocal Promotion and Protection of Investments (entered into force 20 December 2004), art 1(6); Agreement between Japan and Vietnam for the Liberalization, Promotion and Protection of Investment (entered into force 19 December 2004), Annex I; Agreement between Japan and Colombia for the Liberalization, Promotion and Protection of Investment (not in force), art 15(1)(d); Agreement between Guatemala and Trinidad and Tobago on the Reciprocal Promotion and Protection of Investments (not in force), art 2(2).
76 eg, Agreement between Japan and Peru for the Promotion, Protection and Liberalisation of Investment (entered into force 10 December 2009), Annex II, sector 5; Acuerdo entre Peru y Colombia sobre Promocion y Proteccion Reciproca de Inversiones (entered into force 30 December 2010), Annex II; Agreement between Japan and Cambodia for the Liberalization, Promotion and Protection of Investment (entered into force 31 July 2008), Schedule of Cambodia, sector 3; Agreement between Japan and Lao People's Democratic Republic for the Liberalisation, Promotion and Protection of Investment (3 August 2008), Annex II, Pt 2.
77 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (entered into force 18 March 2007) (author's translation). Accord entre le Gouvernement de la République française et le Gouvernement de la République du Sénégal (entered into force 30 May 2010), art 1(5): ‘Aucune disposition du présent Accord ne sera interprétée comme empêchant l'une des Parties contractantes de prendre toute disposition visant à régir les investissements réalisés par des investisseurs étrangers et les conditions d'activités desdits investisseurs, dans le cadre de mesures destinées à préserver et à encourager la diversité culturelle et linguistique, conformément à la Convention pour la protection et la promotion de la diversité des expressions culturelles de l'UNESCO’.
78 Dominican Republic–Central America–US Free Trade Agreement (DR-CAFTA) (entered into force 1 January 2009).
79 David R Aven and Others v Republic of Costa Rica, ICSID Case No UNCT/15/3, Notice of Arbitration (24 January 2014), paras 21–29.
80 ibid paras 30–36.
81 ibid Counter-Memorial (8 April 2016), para 10.
82 DR-CAFTA (n 78) art 10(11).
83 Convention on Biological Diversity (entered into force 29 December 1993) 1760 UNTS 79.
84 Aven (n 79) paras 57, 470.
85 Emilio Augustín Maffezini v Kingdom of Spain, ICSID Case No ARB/97/7, Award of the Tribunal (13 November 2000).
86 William Ralph Clayton, William Richard Clayton, Douglas Clayton, Daniel Clayton and Bilcon of Delaware Inc v Government of Canada, PCA Case No 2009-04, Awards on Jurisdiction and Liability (17 March 2015).
87 ibid para 595.
88 ibid paras 597–98.
89 ibid paras 602–04.
90 ibid Memorial of the Investors (25 June 2011), para 19; ibid Decision on Jurisdiction and Liability (17 March 2015), para 600.
91 As pointed out by Professor Vadi, ‘cultural heritage impact assessments may be deemed to be a component of environmental impact assessments’.
92 See, eg, Law on Protection of Immovable Cultural Heritage of the Republic of Lithuania, art 18(3): ‘[w]hen assessing the environmental impact of planned economic activity in accordance with the procedure laid down by laws, the organiser (client) thereof shall request that the Department conducts applied scientific research of immovable cultural heritage required for the impact assessment. It shall be financed by the organiser of the planned economic activity’.