Investment Agreement

Investment Policy Brief 20, January 2021

Countries’ Policy Space to Implement Tobacco Packaging Measures in the Light of Their International Investment Obligations: Revisiting the Philip Morris v. Uruguay Case

By Alebe Linhares Mesquita and Vivian Daniele Rocha Gabriel 

This Policy Brief aims to provide a concise analysis of the international investment dispute involving Philip Morris subsidiaries and the Republic of Uruguay. It depicts the main legal and political background that preceded the case, analyzes the decision reached by the arbitral tribunal, and assesses the award’s major regulatory and policy implications. It intends to contribute to the discussions on how and to what extent States can adopt tobacco control measures without violating their international obligations to protect the investment and intellectual property of tobacco companies. The main lesson that can be learned from the analysis of the Philip Morris v. Uruguay case is that investors rights are not absolute and can be relativized when there is a clash between private and public interests, such as in the case of public health. As a result, claims such as indirect expropriation and fair and equitable treatment can be dismissed. Finally, one of the main consequences is the progressive change in the design of international investment treaties, containing more provisions related to the right to regulate.

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SouthViews No. 212, 28 January 2021

The Right to Development and its Role in International Economic Law

By Olasupo Owoeye

This paper provides a brief discussion on the right to development and examines some of the criticisms often raised against its significance as a cognizable human right. The paper argues that the principles encapsulated in the right to development represent the foundational principles of the international legal order. The right to development is therefore both a human right and an economic right. Thus, the principles it embodies are not only incorporated into the International Bill of Human Rights, they are also well reflected in World Trade Organization agreements and the field of international economic law. The paper argues that the right to development can play an important role in the interpretation and enforcement of rights under international economic law.

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Panel discussion, 11 December 2020

Guaranteeing Access to Medicines: Reforming Trade and Investment Treaties in the COVID-19 Era

Eight months into COVID-19, what is the status of the international investment regime and access to essential medicines? The GDP Center’s Working Group on Trade and Access to Medicines will host a panel discussion on trade, the investment regime, and access to essential medicines. The event is co-sponsored by the South Centre, the intergovernmental organization of developing nations based in Switzerland.

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Statements, November 2020

South Centre Statement to the 2nd Session of the Expert Mechanism on the Right to Development

The 2030 Agenda for Sustainable Development recognizes the commitment of the international community to make the right to development (RtD) a reality for everyone, leaving no one behind, and building peaceful and inclusive societies on the basis of the respect of human rights.

The right to development becomes prominent during and in the aftermath of facing the COVID-19 pandemic. The creation of favorable conditions for international, economic, scientific and technological cooperation, including technology transfer and know-how, is part and parcel of the right to development through the promotion of the well-being of all peoples, the improvement of the economic conditions of the developing countries and bridging of the economic gap.

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Research Paper 116, August 2020

The TRIPS Agreement Article 73 Security Exceptions and the COVID-19 Pandemic

By Frederick Abbott

The COVID-19 pandemic has caused Governments to contemplate measures to override patents and other intellectual property rights (IPRs) in order to facilitate production and distribution of vaccines, treatments, diagnostics and medical devices. This paper discusses whether the COVID-19 pandemic may be considered an “emergency in international relations” and how WTO Member States may invoke Article 73 (“Security Exceptions”) of the TRIPS Agreement as the legal basis for overriding IPRs otherwise required to be made available or enforced. It concludes that the pandemic constitutes an emergency in international relations within the meaning of Article 73(b)(iii) and that this provision allows Governments to take actions necessary to protect their essential security interests.

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SouthViews No. 204, 11 August 2020

The Covid-19 Pandemic and Liability under Investment Treaties

By Muthucumaraswamy Sornarajah

COVID-19 can increase liability for countries under international investment treaties. Professor M. Sornarajah, Emeritus Professor at the National University of Singapore, discusses in this SouthViews the imminent challenges faced under such treaties by developing countries. The text is based on his presentation at the South Centre webinar on “Responsible Investment for Development and Human Rights: Assessing Different Mechanisms to Face Possible Investor-State Disputes from COVID-19 Related Measures” held on 30th July 2020. The recording of the webinar is available here: https://www.youtube.com/watch?v=yXPswKuywvA

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SC Webinar Series on Development and COVID-19

Responsible Investment for Development and Human Rights: Assessing Different Mechanisms to face Possible Investor-State Disputes from COVID-19 Related Measures

Developing and least developed countries (LDCs), particularly in Africa, are especially vulnerable to the unfolding effects of the COVID-19 pandemic. According to UNCTAD, foreign direct investment flows will drop drastically up to 40% during 2020-2021. A number of developed and developing countries, including LDCs, have introduced a number of measures aimed at limiting the effects of the pandemic, protecting domestic industries for strategic sectors (e.g. health industry, energy sector, telecommunication, food production, etc.), and safeguarding the real economy, particularly by offering bonds or bailouts for companies and the public in general.

Law firms and risk managers are already advising foreign investors about the possibility of initiating investor-State dispute settlement (ISDS) claims against host States on the grounds of the alleged breach of their investors’ rights, based on provisions such as : (i) full protection and security; (ii) fair and equitable treatment; (iii) national treatment and most-favoured nation treatment; and (iv) unlawful expropriation.

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Investment Policy Brief 19, March 2020

The ISDS Reform Process: The missing development agenda

By Nicolás M. Perrone

The foreign direct investment (FDI) governance agenda is centred on the reform of international investment agreements (IIAs) and investor-state dispute settlement (ISDS). The proliferation of IIAs and ISDS has contributed to narrowing the FDI agenda. A key policy question is whether this fragmented approach remains consistent with the 2030 Sustainable Development Goals (SDGs). Current FDI discussions point at the need for a holistic approach in this policy area, quite the opposite of a regime primarily aimed to protect foreign investors through treaty standards and international arbitration. The realisation of the SDGs depends on multi-stakeholder partnerships to combat poverty and provide clean water and energy to the world population. Crucially, these partnerships will require more cooperation and coordination than IIAs and ISDS can promote and nurture.

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SouthViews No. 190, 26 February 2020

Appeal in ISDS: Appealing for the Host State?

By Grace L. Estrada

Reforms to Investor-State Dispute Settlement (ISDS) are being discussed in the United Nations Commission on International Trade Law (UNCITRAL) Working Group III.  One possible reform is the development of an appellate mechanism, either as part of the proposed two-tier standing investment court, or as a stand-alone appellate mechanism.  From the perspective of developing countries as host states that face possible claims from investors, how appealing is an appellate mechanism in ISDS?

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South Centre Quarterly Report, October-December 2019

South Centre Quarterly Report, 1 October to 31 December 2019

This Quarterly Report summarizes the activities undertaken by the South Centre during the period 1st October to 31 December 2019. It is intended to provide information, organized by themes, about recent developments in the areas covered by the Centre’s Work Program, meetings organized or co-organized by the Centre to examine particular issues or provide analytical support for negotiations taking place in various international fora, and conferences and other meetings where the Centre has participated. It also informs about publications made and publication/websites/social media metrics.

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Research Paper 97, August 2019

Intellectual Property under the Scrutiny of Investor-State Tribunals

Legitimacy and New Challenges

By Clara Ducimetière

In 2009, C.S. Gibson was suggesting that: “With this early coverage of intellectual property in BITs, it is perhaps surprising that there has yet to be a publicly reported decision concerning an IPR-centered investment dispute. Given the trajectory of the modern economy, however, in which foreign investments reflect an increasing concentration of intellectual capital invested in knowledge goods protected by IPRs, this could soon change”. A couple of years later, the first investment cases dealing with IP issues were made public.

In this context, this paper first addresses the conditions that have to be fulfilled in order to bring intellectual property claims in investment arbitration, by touching upon the question of the definition of an investment in theory and in practice. It also tries to shed light on some of the implications of recent arbitral awards touching upon this interaction between intellectual property and investment protection, from a legal and regulatory perspective.

On the other hand, the specific situation of the European Union is scrutinized, and in particular the project put forward by the European Commission to adapt the dispute settlement system for the protection of investments.

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