Over at Investment Arbitration Reporter, Damien Charlotin has a piece about a draft text developed by Germany and the European Commission to clarify the interpretation of the obligations on fair and equitable treatment and indirect expropriation in CETA.
The draft text document is characterized as a "Draft Decision of the CETA Joint Committee." For now, I don't see this draft decision anywhere other than behind IAReporter's paywall, so I don't feel like I should post the whole document here. But here's one example of language that would be added through the draft decision:
c) For greater certainty, a measure or series of measures constitute “manifest arbitrariness” in the meaning of the Article 8.10.2(c) if:
- it does not contain the reasons on which it is based;
- it is patently not founded on reason or fact;
- it is based on unreasonable discretion, prejudice or personal preference; or
- it is taken in wilful disregard of due process and proper procedure.
This latest effort to clarify these obligations gives me a feeling of déjà vu. Back in 2014, I did a post about a leaked CETA text in which I said: "With each attempt to clarify the 'minimum standard of treatment' in investment obligations, the scope becomes less clear to me." I have the same feeling this time. For instance, what exactly do they have in mind with "personal preference"? Doesn't personal preference play a pretty big role in the formulation of government measures, at least on the legislative side?
The primary response to complaints about the broad scope of FET and indirect expropriation has been to add words that are intended to clarify the scope. But as noted above, these added words often raise new questions about the scope. What I think might be more helpful is if drafters provided examples of government measures and actions that they believe should be covered by the provision. What's a real world example of the problem they are trying to address here? When I've raised this question in the past, investment law experts have pointed to specific ISDS cases, but my question is directed at the drafters. What specifically are they concerned about here?
Law prof Ben Heath has his usual good Twitter thread on these issues here.
