HANOI LAW UNIVERSITY HOCLUAT.VN TEXTBOOK ON INTERNATIONAL INVESTMENT LAW Youth Publishing House, 2017 HANOI LAW UNIVERSITY TEXTBOOK ON INTERNATIONAL INVESTMENT LAW Co-editors: Professor, Dr. Claudio Dordi Bocconi University, Italy and Dr. Nguyen Thanh Tam Hanoi Law University HANOI - 2017 This Textbook has been prepared with financial assistance from the European Union. The views expressed herein are those of the authors, therefore in no way reflect the official opinion of the European Union nor the Ministry of Industry and Trade.
FOREWORD This Textbook is one of the key outputs reflecting the support provided by the European Trade Policy and Investment Support Project (EU-MUTRAP) funded by the European Union to the Vietnamese universities. Many national and international academics and investment law experts have contributed to this Textbook, and it was largely benefited from the scientific support and supervision of the Hanoi Law University, especially from the Faculty of International Trade and Business Law. The contributors prepared the Textbook mainly targeting law students and CONTRIBUTORS updated it with the recent development of the international investment law, including the new Investment Court System set up by the EU FTAs. Julien Chaisse Chapters One-Eight It is an excellent example of what are the main challenges in preparing Nguyen Thanh Tam Chapters Nine and Twelve legal regimes for the regulation of foreign investment.
Therefore, this Trinh Hai Yen Chapter Ten Textbook is a good instrument for students, government officials and Nguyen Quynh Trang Chapter Eleven lawyers daily confronted with the challenges of a dynamic international arena. The availability of both English and Vietnamese versions will also help lawmakers and Courts respectively in their legislative and adjudicative functions. Even if international investment law is dominated by the English language, institutions shall draft legal acts and decisions in Vietnamese languages. Bui Huy Son Prof.
Claudio Dordi Le Tien Chau Project Director EU-MUTRAP Team Leader Rector EU-MUTRAP Project Professor of International Law Hanoi Law University Bocconi University - Milan - Italy 4 TEXTBOOK ON INTERNATIONAL INVESTMENT LAW TEXTBOOK ON INTERNATIONAL INVESTMENT LAW 5 PREFACE and businessmen about the existing boundaries and conflicts between the needs of attracting investment and the exigency to promote The regulatory regime of foreign investments should normally sustainability. respond to two different objectives. On one side, the attraction of foreign investments is a key element to promote the economic and In particular, the concerns and discussions about the procedures social development of the host countries. On the other side, policy and (specific to the investment sector) to settle investment disputes (the so- lawmakers should ensure that the economic and social development called ISDS - Investor-State Dispute Settlement), normally confined to is sustainable, i.
not detrimental to some basic values such as academic and diplomatic circles, reached the attention of new categories the consumers’ health, the environment, the workers’ rights or any of persons. In some cases, even mass-media reported information about other domestic objective considered important for the community the debates on the opportunity to set up ISDS in the context of IIAs. established in the investment-host States. These objectives require a The mounting interests in international investment law was strong coordination between the investment and the development also prompted by the concerns within governments and part of policy of countries.
Countries, especially those in the developing stage the population following the initiation of ISDS proceedings by big of growth, should avoid competition to attract investment through multinationals attacking new legal acts of host States aiming to promote a regulatory race-to-the-bottom strategy, i. reducing the costs for the sustainability of investment, therefore causing an increase of costs foreign investors in adopting poor regulatory regimes protecting the and alleged losses for foreign investors. At policymaker level, debates mentioned value. Indeed, indicators show that investors are often more focused on the difficulties in establishing the boundaries of the scope of interested in predictable and fair investment regime in host countries government activities to protect investment sustainability (e.
through than in non-sustainable incentives. Indeed, investing in countries rules protecting the environment or the consumers’ health) versus the lacking compliance with the basic environmental or social standards rights guaranteed to foreign investors. harmed their reputation among consumers. However, predictability and fairness of domestic investment legal regimes highly depend A ‘new generation’ IIAs partially reflected these debates.
For on political considerations. The existence of a domestic regulatory example, the investment chapter of the recent EU FTAs particularly investment regime particularly favourable to foreign investment might emphasized the needs of ensuring the sustainability of investment, therefore be challenged by changes in the political leadership of the widening the discretion of investment-host States in adopting host States. regulations protecting values considered fundamental by the national community. Even the new Investment Court System included in the ‘new International investment law raises the confidence of foreign generation’ EU FTAs responds to the needs of ensuring the compliance investors about the stability of a regulatory regime even in presence of the investment disputes settlement procedures with ethics rules of changes of countries’ leadership, therefore promotes the inflows developed by professional associations.
Viet Nam, as a party to several of foreign investments. In international law, international investment ‘new generation’ FTAs, is one of the emerging key stakeholders of the agreements (IIAs) gradually replaced customary international law international investment law. in providing the principles to be followed by host countries in the regulatory activities towards foreign investment. A bilingual Textbook on International Investment Law responds therefore to these new needs.
The first and second Parts including International investment law is not a new discipline for Viet Nam, chapters 1-8, contributed by Prof. Julien Chaisse, focused on the evolution which is member of several bilateral investment treaties (BITs). Since the of general principles of international investment law. In providing a 18th May 1990, the day of the signature of its first Bilateral Investment comprehensive analysis of all the relevant international investment law Treaty (with Italy), Viet Nam has participated in 65 BITs.
However, BITs principles, the Textbook adopted modern learning methodologies at the represent the ‘old generation’ of IIAs, as a ‘new generation’ of investment beginning of each chapter, the contributor clarified the main learning policies and rules emerged since the beginning of the XXI century, also objectives, while at the end, there are several questions to stimulate stimulated by the debates among academics, policymakers, lawyers debates among all the relevant stakeholders, i. students, lawyers, 6 TEXTBOOK ON INTERNATIONAL INVESTMENT LAW TEXTBOOK ON INTERNATIONAL INVESTMENT LAW 7 government officials, judges and researchers. The third and fourth Parts TABLE OF ABBREVIATIONS including chapters 9-12, contributed by Dr. Nguyen Thanh Tam, Dr.
Trinh Hai Yen, and LLM. Nguyen Quynh Trang, after introducing investor- AA Accord Acts AANZFTA ASEAN-Australia-New Zealand Free Trade Area State contracts (in Chapter 9), addressed the international investment ACIA ASEAN Comprehensive Investment Agreement law from the Vietnamese perspective. These chapters of the Textbook ADR Alternative dispute resolution include a thorough picture of the investment agreements participated AFTA ASEAN Free Trade Area in by Viet Nam (in Chapter 10) and the analysis of the Vietnamese AFAS ASEAN Framework Agreement on Services legislation applicable to foreign investment (in Chapter 11). The last AIA ASEAN Investment Area chapter, Chapter 12, focuses on the legal framework of the investor- ASEAN Association of South-east Asian Nations State dispute settlement in Viet Nam.
Besides the relevant legal acts, BCC Business cooperation contract the fourth Part provides an overview of the relevant institutions and BIS Bank for International Settlements BIT Bilateral Investment Treaty government agencies in charge of the different aspects of Vietnamese BOO Build–Own–Operate Contract law on foreign investment. BLT Build-Lease-Transfer Contract I am sure that this Textbook will be a valuable academic material BTL Build- Transfer-Lease Contract and source of reference for those interested in international investment BTAs Bilateral Trade Agreements CAFTA Canada–United States Free Trade Agreement law. It is my hope that this Textbook will be as successful as the other CEPEA Comprehensive Economic Partnership in the East Asia books produced with the financial and expertise supports of the EU- CIL Customary International Law MUTRAP Project in cooperation and under expertise supervision of the DCs Developed Countries International Trade and Business Law Faculty, Hanoi Law University, i. DSB WTO’s Dispute Settlement Body the bilingual Textbook on International Trade and Business Law, largely DSU WTO’s Dispute Settlement Understanding adopted by several universities over the years in Viet Nam.
EC European Communities; or European Commission ECOSOC United Nations Economic and Social Council Academics well know that for each subject taught at university, E&T Education and Trainning there is a publication representing the pillar for building the specific EVFTA EU-Vietnam Free Trade Agreement relevant knowledge. I hope that, in some years, former students will still EU Europrean Union remember the ‘EU-MUTRAP - HLU Textbook on International Investment FET Fair and Equitable Treatment Law’ as an important instrument in their learning path. FDI Foreign Direct Investment FPI Foreign Portfolio Investment P. I am writing this Preface in the last days of the EU-MUTRAP FPS Full Protection and Security activities, i.
my last working days in Viet Nam. After twelve years of FTAs Free Trade Agreements intense activities (since May 19, 2005), I wish to thank all the Vietnamese GATS WTO General Agreement on Trade in Services GATT WTO General Agreement on Tariffs and Trade persons I worked with, especially my colleagues in the EU-MUTRAP Office, GPA Government Procurement Agreement more than 1,000 experts, the colleagues in the different universities, the HKIAC Hong Kong International Arbitration Centre students who attended my classes, all the friends of the Government ICSID World Bank’s International Centre for the Settlement of Investment and all other institutions. I learned a lot from all of you. Disputes ICC International Chamber of Commerce Co-editor: ICDR International Centre for Dispute Resolution Prof.
Claudio Dordi ICJ International Centre for Dispute Resolution EU-MUTRAP Team Leader IEG Investment Experts Group Professor of International Law Bocconi University - Milan - Italy 8 TEXTBOOK ON INTERNATIONAL INVESTMENT LAW TEXTBOOK ON INTERNATIONAL INVESTMENT LAW 9 CONTENTS IIA Internatioanal Investment Agreement List of Contributors 04 IGA ASEAN Investment Guarantee Agreement Foreword 05 IMF International Monetary Fund Preface 06 IPAP Investment Promotion Action Plan Table of Abbreviations 09 IOSCO International Organization of Securities Commissions ISDS Investor-state dispute settlement LCIA London Court of International Arbitration PART ONE: INTRODUCTION 15 LDCs Least-developed Countries Chapter One. OVERVIEW OF INTERNATIONAL INVESTMENT 17 MAI Multilateral Agreement on Investment AND INTERNATIONAL INVESTMENT LAW MERCOSUR Mercado Común del Sur (Southern Common Market) Section One. The Concept of ‘Investment’ in the International 19 MFN Most Favoured Nation Treaties MUTRAP EU-Viet Nam Multilateral Trade Assistance Project funded by the EU Section Two. Globalization and International Investment 22 NAFTA North American Free Trade Area NGOs Nongovernmental Organizations Section Three.
Historical Development of International 28 NT National Treatment Investment Law OECD Organisation for Economic Co-operation and Development Section Four. Defining the Scope of Investment Treaties 38 PCIJ Permanent Court of International Justice Section Five. Sources of International Investment Law 55 PPP Public–private partnership Summary of the Chapter One 72 PTAs Preferential Trade Arrangements Questions/Exercises 74 RCEP Regional Comprehensive Economic Partnership Required/Suggested/Further Readings 75 RTAs Regional Trade Agreements R&T Research and Development SWFs Sovereign Wealth Funds PART TWO: FUNDAMENTAL PRINCIPLES OF INTERNATIONAL 79 SCM WTO Agreement on Subsidies and Countervailing Measures INVESTMENT LAW SIAC Singapore International Arbitration Centre Chapter Two. MOST FAVOURED NATION (MFN) 80 TIFA Trade and Investment Framework Agreement Section One.
The Concept and Scope of the Most Favoured 83 TPP Transpacific Economic Strategic Partnership Agreement Nation TRIMs WTO Agreement on Trade-related Investment Measures Section Two. The MFN Obligation and Pre-establishment 87 TRIPS WTO Agreement on Trade-related Intellectual Property Rights UAE United Arab Emirates Rights UN United Nation Section Three. Standard of Comparison between Investors 89 UNCITRAL United Nations Commission for International Trade Law Section Four.