About the project
The project has studied the extent to which the significant growth of investment treaty arbitration (ITA) from the end of the 1980s until 2023 has led states to reassess their commitments under international investment agreements (IIAs). Arguably, the disputes have shifted state attitudes and strategies towards IIAs: some states have sought to restrict commitments to foreign investors in new IIAs or to terminate or renegotiate existing IIAs. This project also has aimed to understand the extent to which shifting state attitudes influence the decisions of tribunals. While courts are generally required to be impartial and independent, we expected arbitration tribunals to be responsive to shifts in state attitudes.
The project has focused on the relationship between IIAs and environmental protection, human rights and the sustainable development of countries facing poverty challenges. It has sought to improve the ability of public authorities to respond to disputes in such settings. It has also sought to improve investors' understanding of how IIAs and disputes can affect countries and help them avoid harmful practices. The output of the project provides negotiators of IIAs with better tools for assessing the consequences of signing, ratifying, revising or withdrawing from IIAs. The project is relevant for Norway and its foreign investment policy due to the high volume of Norwegian outbound and inbound foreign direct investment.
Given the exceptionally high number of IIAs and disputes as well as the secrecy surrounding dispute settlement, the project has been highly dependent on gathering data. The project has created a database, PluriCourts Investment Treaty Arbitration Database (PITAD), that is available to researchers, public authorities and others.
The project was organized into five work packages (WPs):
- Data generation and processing
- IIA and ITA design
- Environmental issues
- Human rights
- The potential of IIAs to contribute to sustainable development of Least Developed Countries
Background and goals
The background for LEGINVEST has been a coincidence of long-term research activity related to international investment law over a number of years at the Faculty of Law, University of Oslo, and the establishment of PluriCourts - Center for research on the legitimacy of international courts in the same place. The debate about the legitimacy of investment tribunals goes back a long way and has focused on the treaties' unilateral protection of investor rights, the arbitral tribunals' favoring of Western industrial interests, and the weak representation of women and non-Western people among judges and lawyers.
LEGINVEST has had two overall goals:
- Create a research-oriented database based on treaty-based cases on foreign investments (PITAD).
- Survey needs and propose measures to promote positive cooperation between international investment law and safeguarding the environment, human rights and sustainable development, particularly in the poorest countries.
Results compared to targets
Work on PITAD had been going on for some time before the start of the project. Half a year after the start of the project, a preliminary version of the database was launched. PITAD was continuously developed during the project, partly through data quality assurance, partly by adding new types of data as part of sub-projects throughout the project period, and partly by updating the database with new cases. For example, a large amount of openly available information was entered about the central players in the arbitration cases, including companies, arbitration institutions, arbitrators, law firms and lawyers. The database was also connected to other databases, in particular, a database with texts for investment treaties (Electronic Database of Investment Treaties - EDIT), and much of the updating was automated.
At the end of the project, the number of relevant ITA cases is approximately 1,300 and an extract from the database is available online. Work with the database has continued in a new project on compliance with international investment decisions, COPIID (project number 326269). Other research applications have also been submitted based on the database and its further development, particularly to cover commercial arbitration.
One of the two PhD fellows employed by the project has largely worked with the development of the database and contributed to innovative analytical methods which are subsequently being used in research projects in new areas. The most important contributions have been machine-based analyses of data (computational methods), including large amounts of text that cover all public documents related to arbitration awards. The dissertation has a strong focus on network analyses.
The other PhD fellow has delivered a thesis on international investment law and the environment. The thesis contains two particularly innovative elements. First, it undertakes a rewrite of a famous arbitral award based on a fictitious IIA containing a set of innovative environmental provisions. Secondly, it contains an analysis of the investment regime's adaptability in light of the environmental challenges of the Anthropocene.
For environmental policy, LEGINVEST has shown that long-term initiatives to amend IIAs to ensure better safeguarding of environmental concerns have had limited impact and geographical spread, both when drafting treaties and particularly in arbitration decisions. Statistically, investors have won with their claims against states to a greater extent in environmental matters than in other matters. This suggests that environmental policy, which is often characterized by considerable discretion and case-by-case assessments, is particularly vulnerable in the face of a rights-based arbitration.
Seen from a human rights perspective, the IIAs mean that investors receive human rights-like protection of economic rights. Some of the most controversial ITA cases concern situations where such rights come into conflict with the economic, social and cultural rights of vulnerable groups. Such human rights are increasingly mentioned in ITA awards. Despite this, LEGINVEST has pointed out that a main challenge for the effective safeguarding of such human rights is that those who are recruited as judges and lawyers are mainly men educated and living in Western countries. The project has also demonstrated how the arbitration community is dominated by a limited number of persons and companies who alternate between having different roles, sometimes at the same time. LEGINVEST has contributed to new codes of conduct for arbitrators and judges proposed by UNCITRAL.
LEGINVEST has pointed out that treaty protection of foreign investments to a small extent covers investments in the poorest and least developed countries and that treaty-based arbitration is exceptionally used against such countries. The project has also pointed out that such treaties are in competition with protection based on legislation and contracts, and that knowledge about and empirically based research on the latter is very limited. Against this background, the project has concluded that there is untapped potential for using IIA-based investment protection to promote sustainable development. In particular, the treaty system will be able to contribute to better protection of third-party interests and greater predictability than legislation and contract-based arbitration.
In light of this, LEGINVEST has largely contributed to establishing a solid empirical basis for the discussion of the legitimacy of treaty-based investment arbitration. The project has also identified new solutions to the challenges in the interface of international investment law and, respectively, environmental policy, human rights and sustainable development. The project has made a particularly large contribution to the UNCITRAL negotiations on reforms of treaty-based investment arbitration.
Research networks and publications
LEGINVEST has been central to the establishment of research networks on international investment law internationally through its participation in and role in hosting the Academic Forum on Investor-State Dispute Settlement. LEINVEST participants Daniel Behn and Malcolm Langford were elected to chair the Academic forum during its initial period of existence. This forum has been unique in its role of providing legal academic and empirical input to a specific negotiation process. According to its research policy platform, it “seeks to play an important role in bringing together scholars to research a theme, connecting them to the reform process, and supporting the development of their analysis. Substantively, the AF seeks to continue to play an internal, external and empirical role in the reform process – particularly given its strong connections to the work of UNCITRAL WGIII.”
The most important scientific contributions based on international cooperation and networking consist of two anthologies (CUP) published respectively in 2020 on the relationship between international investment and trade law and in 2022 on the crisis of legitimacy in international investment law. In addition, there were initiatives for and collaboration on three specially edited issues of journals published in 2020 (Journal of World Investment and Trade vol. 21 no. 2-3, Brill) and 2023 (Journal of International Dispute Settlement, vol. 12 no. 2), OUP) on the UNCITRAL negotiations, and in 2021 on human rights (Leiden Journal of International Law vol. 34 no. 1, CUP).
LEGINVEST has had cooperation agreements with iCourts at the University of Copenhagen and with the German Institute of Development and Sustainability. The collaboration has resulted in several articles with a political science angle on the significance of investment arbitration for environmental regulation, as well as collaboration on an edited book on the interface between international investment and trade law, Axel Berger and Manjiao Chi (eds.) The Making of an International Investment Facilitation Framework: Legal, Political and Economics Perspectives, (forthcoming, CUP).
Two of the articles published in the project have won prestigious awards. Malcolm Langford's article on role mixing among arbitrators (Journal of International Economic Law, OUP) won the John H. Jackson Prize in 2020. Runar Hilleren Lie's article showing the limited impact of IIA reform was awarded the European Society of International Law's Early-Career Scholar Prize in 2023.
The project was funded by the Norwegian Research Council under FRIPRO, project no. 276009.