Magnifier Search

Fraport v. Philippines

Type of decisionAward
Date of decision16 August 2007
Tribunal
Yves Fortier (President)
Michael Reisman
Bernardo M. Cremades (dissenting)
Legal instrumentBIT between Germany and Philippines (1997)
Related decision(s)Decision on the application for annulment of Fraport AG, 23 December 2010
Further information

Statements from this decision

You are currently viewing the statements in their context. To view them in a list, click here.
International Investment Treaties (IITs)
International Law Rules Applicable to IITs
Relationship of IITs to Other Sources of International Law
Relationship of an IIT to General Principles of International Law
Estoppel
A respondent might be estopped from raising violations of domestic law as a jurisdictional defence if the respondent knowingly overlooked the violations and endorsed the investment
Relationship of IITs to Domestic Law
Applicability of Domestic Law / Renvoi
If the IIT requires investments to be in accordance with domestic law, this constitutes a renvoi to national law; thus, a failure to comply with national law can have an international legal effect in this context
Supremacy of Public International Law
Holdings of municipal legal institutions cannot be binding with respect to matters within the jurisdiction of a tribunal
Law of Treaties
Rules of Interpretation
Object and Purpose as a Rule of Interpretation
An interpretation taking into account the object and purpose of an IIT cannot nullify explicit provisions in that IIT
Interpretation in the Context of the Treaty
A treaty's provisions have to be interpreted in their context
Further Problems
In the IIT between Germany and the Philippines, the fact that the authentic English version uses two different verbs for the acceptance of an investment by the host state - instead of one, like the authentic German version - does not carry any legal significance
Protection of Investors under IITs
Applicability of IITs
General Remarks
Even if a transaction qualifies factually and financially as an investment, it is only protected by the IIT if the legal requirements of the IIT are met
Ratione Materiae – Definition of Investment
Investment “In Accordance With the Legislation”
A respondent might be estopped from raising violations of domestic law as a jurisdictional defence if the respondent knowingly overlooked the violations and endorsed the investment
The cumulative actions of a host state may constitute an informal acceptance of an investment, even if the investment violates domestic law
If an IIT requires an investment to be 'accepted in accordance with domestic law', the requirement of the investment being legal under national law is relevant even if no special acceptance regime was established by the host state
If an IIT requires the investment to be in accordance with national law, it is upon the tribunal to judge on the legality; the tribunal is not bound by the holdings of municipal legal institutions
When considering whether an investment was in accordance with national law, a tribunal has to take the investor's legitimate expectations regarding the host state's legal order into account
If the IIT requires investments to be in accordance with domestic law, this constitutes a renvoi to national law; thus, a failure to comply with national law can have an international legal effect in this context
There are considerable arguments to construing the requirement of the investment being in accordance with national law in a way generous to the investor, especially when the law of the host state is not entirely clear and mistakes were made in good faith
While IITs impose obligations on the host state, they also impose reciprocal obligations on the investor; one of those is the obligation to make the investment in accordance with the host state's law
If an IIT requires an investment to be "in accordance with the law", it is sufficient that the investment is in compliance with domestic law at its initiation; a later departure from some local laws does not deprive the investment from the IIT's protection
In the IIT between Germany and the Philippines, the Article regarding the definition of "investment" and the Article on acceptance of investments cannot be construed as differentiating between investments accompanied by an investor-state-contract and investments without such a contract
Approval of the Investment
The cumulative actions of a host state may constitute an informal acceptance of an investment, even if the investment violates domestic law
If an IIT requires an investment to be 'accepted in accordance with domestic law', the requirement of the investment being legal under national law is relevant even if no special acceptance regime was established by the host state
In the IIT between Germany and the Philippines, the fact that the authentic English version uses two different verbs for the acceptance of an investment by the host state - instead of one, like the authentic German version - does not carry any legal significance
Investment Treaty Arbitration
Admissibility
Res Judicata / Ne Bis In Idem
Res judicata requires identical parties, the same subject matter and the same cause of action
Holdings of municipal legal institutions cannot be binding with respect to matters within the jurisdiction of a tribunal
Vienna Convention on the Law of Treaties
Article 31 - General rule of interpretation
Context
General Remarks
A treaty's provisions have to be interpreted in their context
Object and Purpose
An interpretation taking into account the object and purpose of an IIT cannot nullify explicit provisions in that IIT
Article 33 - Interpretation of treaties authenticated in two or more languages
In the IIT between Germany and the Philippines, the fact that the authentic English version uses two different verbs for the acceptance of an investment by the host state - instead of one, like the authentic German version - does not carry any legal significance
ICSID Convention
Jurisdiction of the Centre (Articles 25-27)
Article 25
Jurisdiction Ratione Materiae
Investment
The Parties’ Consent and “Investment” / Two-Part Test of Investment
The definition of investment within Article 25 ICSID Convention is generally left to the consent of the parties; the consent serves as a lex specialis with regard to Article 25 ICSID Convention

Feedback

Above you will find 17 statement(s) from this decision. Please note that when viewing the statements in their context, the same statement may appear multiple times if it is relevant for more than one topic. Did we miss something? Feel free to send us your suggestions!