State immunity and international investment law
Description
International conventions do not set down rules on state immunity and leave it to national courts to decide the nature and scope of state immunity. The inevitable result of this state-centrist approach is the evolution of divergent views among states on the reach of state immunity. In the early years of international relations, the accepted view was that states enjoyed absolute sovereign immunity and that as a result no state, without its consent, was subject to the national jurisdiction of another state. Gradually many states, mainly through judicial decisions, moved towards a qualified doctrine of immunity enabling a degree of submission by one state to the jurisdiction of another. This restricted view of sovereign immunity was prompted by the changing nature of socio-economic and political circumstances, with states taking an increasingly felt presence in trading and commercial activities. It is generally the developed countries that were eager to embrace the restrictive view of state immunity, which enabled their nationals to press claims against errant foreign states. Naturally, the developing countries tended to favor the absolute doctrine of state immunity, in order to resist claims, however well founded, made against them. Today, most developing countries still insist on absolute state immunity. While not yet codified in an international convention, the doctrine of state immunity has found its way into customary international law. In identifying and interpreting international customary law of state immunity, national courts frequently refer to and follow judicial decisions of foreign jurisdictions. This practice enables states to learn from different legal techniques and criteria that are used in other jurisdictions to demarcate the scope of the doctrine of state immunity. An area where states have reached some common understanding is the enforcement of arbitral awards—imposing measures of constraint against state assets. While judicial enforcement of arbitral awards is the much preferred and most prevalent means of subjecting state assets to seizure or attachment, there are some notable non-judicial remedial measures which may aid the aggrieved investors in satisfying their claims against state parties to a dispute. These non-judicial means of relief rely on the willingness of the investors’ parent state to pursue their cause with the recalcitrant state. The parent state’s willingness is dictated by political considerations in contrast to non political nature of judicial proceedings. It is commonly agreed that an independent judicial process is much preferable to politically motivated non-judicial avenues of relief. As such, attention of judges, scholars and lawmakers must focus on refining judicial processes and building effective enforcement mechanisms. This calls for widely agreed principles of state immunity and a commonly shared enforcement mechanism. Having identified problems arising from a lack of universal agreement on state immunity and the diversity and, more dishearteningly, the inadequacy of forms of enforcement available to an aggrieved claimant, this thesis proposes that the international community must work towards the setting up of a central enforcement agency, a functional model of enforcement. This thesis suggests that the central mechanism of enforcement could be set up through reaching an international treaty or convention or modifying the existing mechanisms.