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On examining an alleged breach of an "effective means of asserting claims" standard, a tribunal has to consider whether a claimant has done his or her part by properly using the means at his or her disposal; it follows that there is a qualified requirement of exhaustion of local remedies
To determine the damages resulting from a breach of "effective means of asserting claims", a tribunal has to evaluate the merits of the domestic cases and decide upon them from the perspective of a honest, independent, and impartial domestic judge
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Effective means of asserting claims
- Investment Treaty Arbitration > Damages and Interest > Further Problems
"Effective means of asserting claims" provisions set a lower threshold than the prohibition of denial of justice
A requirement of exhaustion of local remedies applies to claims for denial of justice in customary international law
A presumption in favour of a claimant's right to bring IIT claims exists; "abuse of process" requires a high standard of proof
According to the principle derived from the Chorzów Factory case, reparation should eliminate the consequences of the illegal act and re-establish the situation which would have existed if that act had not been committed
To calculate the claimant's loss, a tribunal has to consider whether the amounts would have been subject to taxation; this does not constitute a de facto taxation of the award
A tribunal may award compound interest
International and domestic law offer numerous mechanisms for preventing a possible double recovery of damages
While different tribunals should seek to act consistently with one another, there is no doctrine of precedent
General remarks regarding the underlying principles of Article 31(1) VCLT
- International Investment Treaties (IITs) > International Law Rules Applicable to IITs > Law of Treaties > Rules of Interpretation > Interpretation Rules of the Vienna Convention on the Law of Treaties (VCLT) as Reflecting Customary International Law
- Vienna Convention on the Law of Treaties > Article 31 - General rule of interpretation > General Remarks
"Effective means of asserting claims" provisions are relatively rare
While "effective means of asserting claims" provisions overlap with the prohibition of denial of justice, they are independent treaty obligations and constitute a lex specialis
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Fair and Equitable Treatment > Case Groups > Denial of Justice
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Effective means of asserting claims
Regarding the availability of "effective means of asserting claims", the respondent must prove that local remedies are available, while the claimant bears the burden of proof that such remedies are ineffective and futile
- International Investment Treaties (IITs) > Protection of Investors under IITs > Expropriation and Standards of Protection > Effective means of asserting claims
- Investment Treaty Arbitration > Procedural Questions > Burden of Proof
Definition of estoppel
Court congestion may excuse a host state from a breach of the obligation to provide "effective means of asserting claims" only if it the congestion was temporary as well as promptly and effectively addressed
Once a court proceeding's undue delay has amounted to a breach of the obligation to provide "effective means of asserting claims", a court decision issued later on cannot affect the state's liability for the breach
After a tribunal has found an IIT's breach, any additional breach is not relevant unless it leads to further damages
Costs incurred in any event and regardless of the IIT's breach do not constitute a casual damage
Even if there was no active interference by the state, an "effective means of asserting claims" provision can be breached, e.g. by undue delay and manifestly unjust decisions in court proceedings
Individual failures of the domestic legal order to provide "effective means of asserting claims" can constitute a breach of that standard; the standard is not limited to systemic failures
An "effective means of asserting claims" obligation requires the host state to provide investors with means of enforcing legitimate rights within a reasonable amount of time; the limit of reasonableness depends on the case
A requirement of exhaustion of local remedies applies to claims for denial of justice in customary international law
International Law Rules Applicable to IITs
Relationship of IITs to Other Sources of International Law
System of Precedents
While different tribunals should seek to act consistently with one another, there is no doctrine of precedent
Relationship of an IIT to General Principles of International Law
Estoppel
Definition of estoppel
Abuse of Process
A presumption in favour of a claimant's right to bring IIT claims exists; "abuse of process" requires a high standard of proof
Law of Treaties
Rules of Interpretation
Interpretation Rules of the Vienna Convention on the Law of Treaties (VCLT) as Reflecting Customary International Law
General remarks regarding the underlying principles of Article 31(1) VCLT
Protection of Investors under IITs
Expropriation and Standards of Protection
Fair and Equitable Treatment
Case Groups
Denial of Justice
While "effective means of asserting claims" provisions overlap with the prohibition of denial of justice, they are independent treaty obligations and constitute a lex specialis
Effective means of asserting claims
On examining an alleged breach of an "effective means of asserting claims" standard, a tribunal has to consider whether a claimant has done his or her part by properly using the means at his or her disposal; it follows that there is a qualified requirement of exhaustion of local remedies
To determine the damages resulting from a breach of "effective means of asserting claims", a tribunal has to evaluate the merits of the domestic cases and decide upon them from the perspective of a honest, independent, and impartial domestic judge
"Effective means of asserting claims" provisions set a lower threshold than the prohibition of denial of justice
"Effective means of asserting claims" provisions are relatively rare
While "effective means of asserting claims" provisions overlap with the prohibition of denial of justice, they are independent treaty obligations and constitute a lex specialis
Regarding the availability of "effective means of asserting claims", the respondent must prove that local remedies are available, while the claimant bears the burden of proof that such remedies are ineffective and futile
Court congestion may excuse a host state from a breach of the obligation to provide "effective means of asserting claims" only if it the congestion was temporary as well as promptly and effectively addressed
Once a court proceeding's undue delay has amounted to a breach of the obligation to provide "effective means of asserting claims", a court decision issued later on cannot affect the state's liability for the breach
Even if there was no active interference by the state, an "effective means of asserting claims" provision can be breached, e.g. by undue delay and manifestly unjust decisions in court proceedings
Individual failures of the domestic legal order to provide "effective means of asserting claims" can constitute a breach of that standard; the standard is not limited to systemic failures
An "effective means of asserting claims" obligation requires the host state to provide investors with means of enforcing legitimate rights within a reasonable amount of time; the limit of reasonableness depends on the case
Relationship of Standards of Protection Within a Single IIT
After a tribunal has found an IIT's breach, any additional breach is not relevant unless it leads to further damages
Procedural Questions
Burden of Proof
Regarding the availability of "effective means of asserting claims", the respondent must prove that local remedies are available, while the claimant bears the burden of proof that such remedies are ineffective and futile
Damages and Interest
Forms of Damages
According to the principle derived from the Chorzów Factory case, reparation should eliminate the consequences of the illegal act and re-establish the situation which would have existed if that act had not been committed
Causation
Costs incurred in any event and regardless of the IIT's breach do not constitute a casual damage
Basis for Calculating Damages
To calculate the claimant's loss, a tribunal has to consider whether the amounts would have been subject to taxation; this does not constitute a de facto taxation of the award
Interest
Interest Absent Explicit Rules
A tribunal may award compound interest
Further Problems
To determine the damages resulting from a breach of "effective means of asserting claims", a tribunal has to evaluate the merits of the domestic cases and decide upon them from the perspective of a honest, independent, and impartial domestic judge
International and domestic law offer numerous mechanisms for preventing a possible double recovery of damages
Article 31 - General rule of interpretation
General Remarks
General remarks regarding the underlying principles of Article 31(1) VCLT