INVESTMENT ARBITRATION AND HUMAN RIGHTS CASES IN LATIN AMERICA

Rodrigo Polanco Lazo

I. Introduction: The Relationship between Investment Law and Human Rights Law

Investment and human rights law share some features, notably, the fact that are asymmetrical

by nature, as both grant individuals rights and protection from State interference while

referring virtually all treaty obligations to the State.1 But they also have important differences.

Few human rights treaties provide access to international courts, and when they do, the

exhaustion of local remedies is a precondition to bring a claim. Instead, in the majority of

international investment agreements (IIAs),2 the investor often has immediate access to

investor-State Dispute Settlement (ISDS) usually under the form of arbitration,3 a truly

‘anomaly’ in the general context of international law.4 While some legal research

conceptualizes their relationship as opposing fields of law with colliding policy interests as

well as contradictory rules and regulations,5 other argues that a human rights dimension can

be recognized in international investment law.6

In any case, the relationship between international investment and human rights represents a

troublesome matter to the States, who must balance the compliance with their international

obligations under human rights instruments, with the protection of the interest of the investors

guaranteed by IIAs. In a fragmented international legal order, commitments to protect foreign

investment can potentially interfere with the duty of the States to fulfill their obligations under

human rights instruments. Moreover, it is claimed that international investment law may

trigger a ‘regulatory chill’ for national legislation,7 particularly with respect to human rights.8

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This scenario can become even more complex when States face parallel cases in both human

rights and investment jurisdictions, based on the same set of facts. The existence of such dual

litigation put States in the position of having to justify compliance of their international

commitments in both fields, and actually serve as a test to evidence if there is a tipping point

in favor of one of them, not only through the examination of the State’s position as a

respondent in each case, but most importantly, through the study of the interaction (or the lack

of thereof) among both fora.

This paper examines certain questions that arise when international tribunals have to decide

parallel investment and human rights cases brought against the same State. Is there any

interaction between both type of tribunals? Do the decisions of one tribunal influence the

other? Have the decisions a different interpretation of the law? Are there any consequences

derived from the different role of the respondent State in both types of disputes?

The experience of Latin America can be useful to exemplify this dilemma for States,

considering that is on the one hand, the region with more ISDS cases in the world, and on the

other hand, a region with a dedicated court sytem for the protection of human rights. For that

reason, this paper examines disputes that have been brought in parallel to both human rights

an investment arbitration tribunals against Peru and Ecuador, analysing if the outcomes in

both cases share certain legal principles, or are in contradiction by nature, and the consequent

impacts on the State’s autonomy to develop a regulatory framework that protects both human

rights and foreign investors. In order to provide a comparative perspective, parallel cases

brought against Russia both before the European Court of Human Rights (ECtHR) and several

investment arbitral tribunals will be briefly addressed.

The content of this paper is structured as follows: Section II illustrates the changing attitude of

some countries of the region towards foreign investment and human rights. Section III studies

the interaction between the investment and human rights cases against Peru, with a special

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emphasis into the impacts on the State’s position on both cases, while Section IV applies the

same focus to the cases against Ecuador. Section V deals with the comparative analysis with

the ECtHR, and finally, Section VI presents the conclusions on the relationship between

foreign investment and human rights dispute settlement in Latin America.

II. Foreign Investment and human rights in Latin America: a shifting sailboat

In 1971, the Uruguayan novelist Eduardo Galeano described Latin America as “the region of

open veins”, in the light of the historically controversial relationship between the Latin-

American countries and foreign powers, especially the United States of America (US) and

Europe. Galeano depicted a negative interpretation of the impact of free trade and foreign

investment on the region by stating that “everything, from the discovery until our times, has

always been transmuted into European— or later United States— capital, and as such has

accumulated in distant centers of power”.9

There is ample evidence of the stormy connection between Latin American countries and

foreign companies, since the arrival of the European colonialism in the late 15th century to

these days. Yet, the position of the Latin American governments has been wavering from a

complete support to the foreign investors to an intransigent opposition to its participation on

their economies, characterized by several events of discrepancy and contradiction.10

Indeed, this thorny relationship has a clear example on the attitude with respect to ISDS in the

region. While in 1964, 19 Latin American countries voted against the establishment of the

International Centre for Settlement of Investment Disputes (ICSID), in the 1990s, the majority

of those countries concluded bilateral investment treaties (BITs) in large numbers and ratified

the ICSID Convention (the most used forum for ISDS). At the same time, several countries of

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the region also include investment chapters in the negotiation of free trade agreements

(FTAs).11

Today Latin America is the region with the highest number of ISDS cases, Argentina being

the most frequent respondent State, followed by Venezuela, and with Ecuador also ranking

within the top ten respondent States.12 Claims against Latin American countries registered at

ICSID represent around 30% of the total number of cases until December 2016.13

The reactions of Latin American countries to this reality have been diverse. Some countries

like Bolivia, Ecuador and Venezuela, have taken a stronger stance against the system,

denouncing the ICSID Convention and terminating IIAs.14 However, the large majority of

Latin American countries are still an integral part of the ISDS system. That includes

Argentina, the main respondent State on ISDS, although that country did not signed new

investment treaties for the past fifteen years, a policy recently changed with the signature of a

BIT with Qatar in November 2016.15 Other countries have confirmed their adherence to the

system but promoted important improvements with respect to ISDS in the investment treaties

they have signed in recent times. This is the case in Chile, Colombia, Mexico and Peru, where

an investment chapter addressing these issues16 has been included in a regional trade bloc—

the Pacific Alliance.17

In contrast, Latin American countries have been early adopters of human rights instruments.

Eights months before the proclamation of Universal Declaration on Human Rights, the

American Declaration of the Rights and Duties of Man (1968) was already adopted, becoming

the first human rights instrument in the region. Later, the adoption of the American

Convention on Human Rights (1969), also known as “Pact of San José”, established a

regional system of human rights based on two institutions: the Inter-American Commission

on Human Rights (IACHR) and the Inter-American Court of Human Rights (IACtHR).

Collectively, these entities conform the Inter-American Human Rights System (IAHRS).

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Most Latin American countries have undertaken reforms to ensure human rights at a domestic

level, recognising not only the existence of civil and political rights (CPR) but also economic,

social, and cultural Rights (ESCR), and even guarantee collective rights. But the effective

exercise of ESCR is far from being reached, given the prevailing context of social inequalities

and exclusion in the region.There is also still a debate between the nature of these rights in

terms of states’ obligations, with CPR seen has negative obligations on the part of the state,

while ESCR should be implemented through positive actions that require public funds.18 At

the same time, some States of the region are questioning the external control on human rights

protection that is provided by the IAHRS. While some countries have formally left the

system, like Venezuela which denounced the Pact of San Jose,19 others have denied or limited

the binding character of its decisions, like Argentina, Dominican Republic and Guatemala.20

Human rights issues have been relatively slow to emerge in investment law. Indeed, no

explicit reference to human rights is found in most IIAs.21 In the region, the notable exception

are six Cooperation and Facilitation Investment Agreements (CFIAs), concluded by Brazil in

the past two years with Angola, Mozambique, Malawi, Chile, Colombia and Mexico, the

Brazil-Peru Economic and Trade Expansion Agreement (2016), the Pacific Alliance Protocol

(2014), and the Colombia-Costa Rica FTA (2013), which have expressly included the

protection of human rights as part of the provisions on corporate social responsibility

(CSR).22 On investor-state dispute settlement (ISDS) the reference to human rights has been

occasional and limited to provide guidance to the arbitrator in order to interpret substantive

protections established in favor of foreign investors.23

Similarly, there are few allusions to investment law in human right cases. One of the few that

explicitly refers to investment law is Claude Reyes and others v. Chile, where the IACtHR

decided on the international responsibility of the State for the refusal to provide information

on a foreign investment contract related to a forest industrialization, as well as the lack of an

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adequate and effective resource to challenge such a decision. It was also reported that in

October 2005, a Chilean businessman presented a claim against Peru before the IACHR,

derived from a contentious investment in that country (the ‘Lucchetti case’) that was

abandoned in 2006.24

In the next section we will examine some of the few cases that have been brought in parallel

against countries of the region (Peru and Ecuador), on both human rights and investment

international tribunals.

III. La Oroya and Renco cases against Peru

A. La Oroya complex

Mining industry has become one of the important drivers of economic growth in Peruvian

economy. However, the development of the mining in Peru has had many health and

environmental costs for the communities where this activity is taking place. In 2012, a series

of demonstrations in the cities of Cajamarca, Espinar, and La Oroya arouse national attention

due to the violent response of the local authorities against civil society organizations

protesting against harmful actions of the mining companies.25

La Oroya is a city of over 33,000 inhabitants, located in the central Andean region of Peru, in

the department of Junin, 176 km from Lima and 125 km from Huancayo (capital of the

department). The city was built around a metallurgical smelter of copper, lead and zinc

established in 1922 and operated by a US company (American Cerro de Pasco Corporation),

until its nationalization by the Peruvian State in 1974. Centromin, a state-owned company

operated the smelter from 1974 to 1997, which since then was run by the Doe Run Peru

(DRP), a subsidiary of the Renco Group Inc, a holding company of a family office, owned by

Ira Rennert, an American billionaire, which includes other subsidiaries in that countrz, like

Doer Run Resources.26

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In 1996, Centromin presented its “Programa de Adaptación y Manejo Ambiental” (PAMA or

“Adaptation and Environmental Management Program”), a ten-year plan designed to ensure

the compliance of the activities of the company with Peruvian environmental rules. A year

later, Centromin transferred the ownership of the metallurgic complex to DRP through a

contract in which the Peruvian State agreed to clean the polluted soils where the complex

operated from 1922 to 1997. According to that contract, DRP should execute most of the

remaining obligations under the PAMA, which included the implementation of nine projects

with a cost of 107,6 million dollars. In addition, DRP assumed the liability in case of any

possible modification to the PAMA according to the Peruvian law during a period of ten

years, which terminated in 2007.27

Specifically, DRP committed to build: three sulfuric acid plants in order to mitigate the

sulphur dioxide (SO2) emissions from the copper, zinc, and lead plants located in La Oroya; a

water treatment plant for the copper refinery, a wall for the zinc plant to prevent acid spills,

and new warehouses for arsenic, copper and lead residues to prevent any contamination to a

nearby river. DRP agreed to complete the construction of that infrastructure in a period of 10

years.28

DRP obtained the modification of the PAMA in several occasions, as well as an extension of

the period in which the projects should be completed. Thus, in 1999 the capacity of the

sulfuric acid plant was reduced, and in 2005 a decree authorized the Peruvian Ministry of

Energy and Mining (MEM) to grant extensions to DRP to comply with the requirements of

the PAMA. However, neither the State nor the company fulfilled the obligations imposed by

the PAMA. When the operation of the complex ceased in June 2009, DRP had only built one

of the infrastructure comprised on the original PAMA.29 The Peruvian authorities did not

fulfilled their obligation to clean up the soil, under the excuse that it would be a waste of

resources as the company continues its polluting activities in the area. As a result of the

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actions of the company and the permissive attitude of the State, La Oroya was ranked as one

of the ten most contaminated cities in the world in 2006.30

The contract signed by Centromin and DRP for the transfer of the ownership of La Oroya

complex in October 1997 stated that Centromin and the Peruvian State will assume “the

liability for any damages, loss and claim by third parties for the activities of Doe Run Peru,

Centromin or its predecessors”, while the new owners are working to improve the complex

through the development of environmental projects.31 In other words, DRP was virtually

immune from liability for the period of execution of PAMA, excluding only those claims that

were attributable exclusively to its actions outside the framework of the PAMA and its

extensions..

In 2009, DRP filled a voluntary bankruptcy under Peruvian law and initiated a liquidation

process to comply with its financial obligations. The company argued that its negative balance

was a result of the rejection of Peruvian authorities to extend the PAMA in 2009, as well as

the effects of the financial crisis of the international markets in 2008-2010. After the judicial

investigation, the Peruvian agency in charge of the bankruptcies (‘Instituto Nacional de

Defensa de la Competencia y de la Protección de la Propiedad Intelectual’ – INDECOPI)

recognized the Peruvian State as the first creditor in the liquidation process, for a debt of the

company with the MEM of USD 163 million for breach of La Oroya complex’s PAMA.32

The second creditor in the liquidation process was the parent company of the Renco Group,

Doe Run Cayman Limited.33

B. The harmful effects of La Oroya complex

The effects of lead are well known and range from subtle learning and behavior impairment to

seizures, coma, and death. Lead can be carried from maternal to fetal circulation through the

placenta and enter the growing fetal brain. Exposure of the fetus to lead, even at minimum

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maternal blood levels, adversely affects brain development. Children are especially vulnerable

to lead’s adverse health effects. At very high blood concentrations, lead can cause

encephalopathy (brain damage), coma, or death. In adults, high levels of lead are related to

hypertension and cardiovascular disease.34

Between 1999 and 2005, several important studies were conducted to measure the lead levels

in the blood La Oroya’s population, conducted separately by a consortium of local NGOs

(Consorcio Unión para el Desarrollo Sostenible - UNES), the Peruvian Environmental Health

agency (DIGESA), DRP and a group of Peruvian medical scholars. With some variations, all

studies concluded that the levels exceeded the World Health Organization (WHO) standards,

especially for children. A technical study ordered by the Peruvian government concluded in

2004 that 99% of air pollution of SO2, lead, arsenic and cadmium resulted from the operation

of the metallurgical complex and the activities of DRP in the area.35

When the local population began to discuss the results of the studies with DRP, and to request

the adoption of protective measures, the response was not just a flat denial and disinformation

campaigns, but even more, stigmatization and attacks to those who dared to protest. DRP

helped to build an atmosphere of distortion among the residents of La Oroya, threatening to

fire any worker of the company that cooperated with the NGOs that lead the protests against

DRP. The Ministry of Health, the Ministry of Interior and the Municipality of La Oroya, also

initially denied the problem or attempted to discourage the protests against DRP and the

operation of the smelter.36

C. The case of La Oroya community against the Republic of Peru

The harmful effects of La Oroya complex triggered a series of legal suits against the Peruvian

State before domestic courts, that ended up with a 2006 decision of the Constitutional Court

of Peru ordered to implement a series of measures in order to identify and address the

environmental and health problems of La Oroya population in the short and long term.37

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In 2007 and 2008, the legal battle also moved to the US courts, when a group of American

and Peruvian lawyers filed a suit against Renco, Doe Run Resources and their affiliated

entities and several executives of those companies in the Missouri State Court, where the

headquarters of the parent company are located.38

In parallel to the legal actions before Peruvian and US courts, on 21 November 2005, a

consortium of local and international NGOs39 initiated legal actions against the Peruvian State

in the IAHRS requesting precautionary measures in favour of 65 victims of the emissions of

the smelter. A precautionary measure was granted on 31 August 2007, and the IACHR

ordered the Peruvian State to “adopt relevant measures to establish a specialized medical

diagnostic for the beneficiaries; provide specialized and adequate medical treatment for the

persons for which the diagnostic will evidence a risk of irreversible damage for their physical

integrity or their life; and coordinate with the complainants and the beneficiaries in the

implementation of such measures.”40

On 27 December 2006, the same group of NGOs filed a petition before the IACHR accusing

the Peruvian State for the violation of the right to life, human treatment, privacy, freedom of

thought and expression, right to a fair trial, and right to judicial protection of the ACHR. The

petition also includes allegations of violation of article 19 of the Convention on the Rights of

the Child, in consideration to the adverse effects on the child population of La Oroya.41

The Peruvian State addressed these allegations by describing all the relevant activities and

investments that Centromin conducted to enhance its environmental performance and to

mitigate any potential impact on the health of the citizens of La Oroya, claiming fully

compliance with the PAMA, and highlighting the State’s health service agencies

implementation of a comprehensive strategy to face the problems arising from the toxic

emissions. Moreover, the State declared that “after the verdict of the Constitutional Court,

DIGESA conducted a full diagnosis, which included an inventory of the complex’s emissions,

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the monitoring of the air quality close to the site, and epidemiologic studies that serves as the

foundations of the Plan to Improve the Air Quality for the Atmospheric Basin of La Oroya”.42

Despite the efforts of the Peruvian State to prove its diligence to act and protect the

environment and the health of the citizens of La Oroya, the IACHR ruled that “the facts

described by both parties could be declared as a violation of the ACHR [American

Convention on Human Rights]”,43 and on 5 August 2009, declared the complaint admissible.

Petitioners are now waiting for the final report on the merits from the Commission, a process

that has been severely delayed, due to the fact that the IACHR has been affected by years of

budget restrictions due to the lack of enough funding from the States.44

On 3 May 2016, the IACHR decided to extend the scope of the precautionary measure

granted in 2007 to an additional group of 10 women and 4 men of La Oroya. The IACHR

requested Peru to adopt the necessary measures to preserve the life and personal integrity of

those 14 persons, carrying out the necessary medical assessments to determine the levels of

lead, cadmium and arsenic in blood, in order to provide adequate medical attention, in

accordance with international standards; and to provide information on the actions adopted to

investigate the facts in order to avoid repetition.45

In this IACHR decision and in the one that declared the complaint admissible there is a no

mention of the existence of investment disputes between Doe Run and Peru, neither under

Peruvian and US Courts, nor under ISDS, as it will be explained in the following section.

D. The ISDS case against Peru

On April 2011, the Renco Group, Inc., on its own behalf and of its affiliate DRP, submitted a

complaint against Peru and its wholly-owned mining company Activos Mineros S.A.C. under

the Arbitration Rules of the United Nations Commission on International Trade Law

(UNCITRAL), for claims arising out of Renco’s investment in La Oroya complex, claiming

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full reparation for Peru’s alleged violations of the US-Peru Trade Promotion Agreement

(TPA),46and of the Stock Transfer Agreement (STA) signed in October 1997 between the

Peruvian State and DRP, which qualify as “investment agreement” under the provisions of the

TPA.47

According to the company, “Peru’s unfair refusal to timely grant reasonable PAMA

extensions and its disparaging public campaign against Renco and DRP have created a hostile

investment environment and have prevented DRP from securing new financing necessary to

resume operations of the Complex. [...] Peru and Activos Mineros refused to honor their

commitment to appear in and defend and assume responsibility and liability for the

lawsuits”,48 in a direct reference to the lawsuits filed against Renco and Doe Run in Missouri.

Renco Group claimed no less than 800 million USD in damages alleging that it has been

victim of unfair and inequitable treatment and that the government of Peru has failed to afford

them full protection and security and national treatment, and to observe any obligations into

which it entered. The company also asked for a declaration that Renco and DRP have no

responsibility or liability for any damages that the plaintiffs in the lawsuits filed against them

in the US, or any similar lawsuit, and that Peru is required to appear in and defend those

lawsuits and to assume responsibility and liability for any damages that may be recovered.49

On 15 July 2016, the ISDS arbitral tribunal dismissed Renco’s claims based on lack of

jurisdiction, declaring that Renco failed to comply with formals requirement of the US-Peru

TPA, and therefore the case was decided in favor of the Republic of Peru.50

Possibly because this decision is not about the merits of the dispute, the Renco award on

jurisdiction does not acknowledges La Oroya case before the IACHR. Interestingly, the

decision includes comments on human rights case law of the ECtHR while pondering on the

application of the principle of severability of an arbitration agreement from the main contract

in which such an agreement is contained. However, the arbitral tribunal finally did not rule on

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this issue, after concluding that no arbitration agreement ever came into existence as a result

of Renco’s non-compliance with the US-Peru TPA.51

As we can see, although a group of parallel cases against Peru have been initiated under the

same set of facts – the harmful effects of La Oroya complex – before a human rights regional

system (IACHR) and an ISDS arbitral tribunal, there is virtually no relationship between the

human rights and the investment cases pending at international fora. In contrast, the domestic

litigation against Doe Run in US Courts proved to be not only aware of the ISDS case, but its

mere existence affected substantially the applicable jurisdiction and the overall procedure, as

in 2011, Doe Run successfully removed the cases from the Missouri State Court to the federal

level, based the fact that were related to a pending arbitration between the company and the

Peruvian State.

IV. The Chevron/Texaco and the Kichwa Peoples of the Sarayaku Community cases against Ecuador

A. Texaco oil operations and Ecuadorian indigenous communities

In 1964 Ecuador signed a contract with Texaco Petroleum Company (TexPet), an affiliate of

the American company Texaco, to exploit oil fields in the Northeastern region of the country.

TexPet entered into a joint-venture with the Ecuadorian state-owned company, PetroEcuador,

which was the majority shareholder, while TexPet was the deemed the “operator” of the entity

and was authorized to design, procure, install, manage, and operate the infrastructure for the

operation.52

The company began full-scale production in 1973 in almost a nonexistent regulation of the

social and environmental effects of the oil extraction. However, the 1971 Ecuador’s Law of

Hydrocarbons did require field operators to “adopt necessary measures to protect flora, fauna

and other natural resources” and “prevent contamination of water, air, and soil”.53 This

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requirement was included in the contract signed with TexPet in August 1973 and in an

additional agreement signed in December 1977.54 Additionally, other generally applicable

laws on pollution control were in force around the same time, like the Law of Waters (1972),

the Law of Fisheries (1974) and the Law for the Prevention and Control of Environmental

Contamination (1976).

During more than two decades of drilling in Ecuador, TexPet ran a profitable business drilling

339 wells and built 18 central production stations in over a million-acre concession and

extracted approximately 1.4 billion barrels of crude oil.55 As counterpart of this, the oil

extraction had a disastrous outcome for the water and the biodiversity of the region.

The main sources of environmental damage from TexPet operations were the leakage or

discharge of contaminated water and drilling wastes held in unlined pits, the accidental

discharge from the trans-Ecuadorian pipeline and subsidiary pipelines operated by Texaco;

and, the deliberate dumping and spraying of oil and drilling wastes.56 Additionally, the

operations of the company intervened ecosystems and the ancestral land of several tribes and

indigenous population from the Amazonian region of Ecuador.57

B. Litigation before US and Ecuadorian courts

In November 1993, a group of claimants representing more than 30,000 people from eighty

communities in the Ecuadorian Amazon, including five indigenous nationalities: Siona,

Secoya, Cofán, Waorani, and Kichwa, inhabitants of the areas where TexPet conducted its

operations in Ecuador, filed a class action suit against Texaco before the federal courts of

New York, under the Alien Tort Claims Act58 (‘Aguinda v. Texaco’). The plaintiffs alleged

that they had suffered personal injuries and “are at a significantly increased risk of developing

cancer as a result of exposure”59 to the disposal of untreated hazardous wastes resulted from

the operation of the company.60 Texaco moved to dismiss the action, among other grounds,

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based on forum non conveniens – the idea that any suit related to its operation in Ecuador

should be filed in an Ecuadorian court, declaring that those courts were a fair and adequate

alternative forum.61

In 2002, the case was finally dismissed on the grounds of forum non conveniens. The Second

District Court of New York decided in favor of litigation in Ecuador, stating that the lawsuit

had “everything to do with Ecuador and nothing to do with the United States”.62 The Second

Circuit Court of Appeals affirmed, considering that Ecuadorian courts would be a more

appropriate jurisdiction for the trial.63 Finally, in 2003, the case was filed in Ecuador, where

the Court of Justice in Nueva Loja accepted it on 14 May 2003.64

In an attempt for prevent the consequences of the lawsuit that would be filed before the

Ecuadorian courts by the plaintiffs of the Aguinda case, Texaco made a settlement agreement

with the Ecuadorian government to remediate any environmental damage resulted from the

activities of the oil extraction in the areas close to the exploitation sites. Texaco also agreed to

implement remediation work on certain waste pits and make payments for socioeconomic

compensation projects. As counterpart, the Ecuadorian government agreed to release TexPet

and Texaco from any from all claims, obligations, and liability related to contamination from

its operations. In 1998, the government of Ecuador released TexPet from future clean up

obligations after it cleaned up more than 100 sites. 65

In May 2003, a small group of the original Aguinda plaintiffs filed a new lawsuit against

Chevron (which absorbed Texaco in 2002) before the Superior Court of Justice of Nueva Loja

in Lago Agrio, Ecuador. Following the arguments presented during the proceeding before the

US courts, the plaintiffs asked the court to determine the cost of full remediation to be borne

by Chevron, and additionally alleged fraud in the Texaco’s conduct of the voluntary

remediation and release for liability with the Ecuadorian government, according to the

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agreement signed by those parties referred before.66

The case stir up national attention in Ecuador as the plaintiffs found in the government of

President Rafael Correa a main supporter. He repeatedly sided with the plaintiffs, calling

Chevron “shameless scoundrels who knew they had contaminated, but with their millions

wanted to go unpunished”.67 Texaco alleged for the politicization of the case and the biased

behaviour at the Ecuadorian courts.68 After a seven-year trial, the Court of Nueva Loja found

Texaco-Chevron liable for pollution caused and issued a US$ 8.6 billion judgement against

the company, plus 10% compensation to the plaintiffs, which would be increased to US$19

billion if Texaco-Chevron did not promptly issue a public apology to the communities.69 The

decision was ratified by a court of appeals and later, in November 2013, the National Court of

Justice of Ecuador affirmed the judgement, but reversed awarding punitive damages and

reduced the total amount of the judgement against Texaco-Chevron to a total of US$9.5

billion.70

After the publication of the final decision of the Aguinda case in Ecuador, the focus of the

discussion between the plaintiffs and Chevron turned into the enforceability of the award

before the US courts. From early on, some analysts had concluded that the verdict of the

Ecuadorian Courts was probably unenforceable outside Ecuador given the lack of local assets

of the company.71 Moreover, already in 2011, Chevron initiated a strategy to delay any kind

of enforcement of the award and even filed a lawsuit against the lawyers that represented the

victims in the case before the Ecuadorian courts.72

In 2011, Chevron initiated an action under the Racketeer Influenced and Corrupt

Organizations (RICO) Act, against the Lago Agrio plaintiffs and their counsel Steven

Donzinger and his law firm, alleging that the plaintiffs procured the Lago Agrio Judgment by

a variety of unethical, corrupt, and illegal means. On 4 March 2014, the U.S. District Court

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for the Southern District of New York ruled that the $9.5 billion Ecuadorian judgment was

procured through, inter alia, defendants’ bribery, coercion, and fraud, finding it

unenforceable.73 On 8 August 2016, the US Court of Appeals for the Second Circuit

unanimously affirmed the lower court ruling and declared that the plaintiffs, Donziger and

other members of the legal team committed fraud and RICO violations.74

C. The Kichwa Peoples of the Sarayaku Community and its Members v. the Republic of Ecuador

On 19 December 2003, the Association of Kichwa Peoples of Sarayaku,75 the Center for

Justice and International Law (CEJIL), and the Center for Economic and Social Rights filed a

petition before the IACHR alleging the responsibility of Ecuador to the detriment of the

Kichwa people of the Sarayaku community and its members. The petitioners submitted that

Ecuador was responsible for a series of acts and omissions harming the Kichwa because it had

allowed an oil company to carry out activities on the ancestral lands of the Sarayaku

community without its consent, persecuted community leaders, and denied judicial protection

and legal due process. Moreover, the petitioners argued that the State allowed third parties to

systematically violate the rights of the Sarayaku community.76

On 26 July 1996, the State Oil Company of Ecuador PetroEcuador and the consortium formed

by two companies related to Chevron,77 signed a partnership contract for hydrocarbon

exploration and exploitation of crude oil in the Amazonian Region.78 The territory granted for

that purpose in the contract covered an area of 200,000 hectares, inhabited by several

indigenous associations, communities and peoples. Sarayaku is the largest of these indigenous

settlements in terms of population and land area, since its ancestral and legal territory

accounted for around 65% of the territory included in the contract.79

The petitioners alleged that by virtue of such contract, the State was responsible for violating

the fundamental individual and collective rights of the Sarayaku community and its members

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protected by the ACHR, specifically the right to life, property, judicial protection, due

process, freedom of movement, personal integrity, personal liberty and security, freedom of

association, political participation, freedom of expression, juridical personality, freedom of

conscience and religion, rights of the child, equality, health and culture. 80

After four years of proceeding, on 25 July 2012 the IACtHR declared that Ecuador was

responsible for the violation of the rights to consultation, to indigenous communal property,

and to cultural identity, and that it was responsible for severely jeopardizing the rights to life

and to personal integrity, in relation to the obligation to guarantee the right to communal

property. The decision also ruled that Ecuador was responsible for the violation of the right to

judicial guarantees and to judicial protection, to the detriment of the Kichwa Indigenous

People of Sarayaku. 81

The IACtHR also ordered Ecuador to adopt the necessary legislative, administrative or any

other type of measures to give full effect, within a reasonable time, to the right to prior

consultation of the indigenous and tribal peoples and communities and to amend those that

prevent its free and full exercise. For that purpose, the Ecuadorian government should consult

the Sarayaku People in a prior, adequate and effective manner, and in full compliance with the

relevant international standards applicable, in the event that it seeks to carry out any activity

or project for the extraction of natural resources on its territory, or any investment or

development plan of any other type that could involve a potential impact on their territory. At

the same time, the government should implement, within a reasonable time and with the

respective budgetary allocations, mandatory training programs or courses that include

modules on the national and international standards concerning the human rights of

indigenous peoples and communities, for military, police and judicial officials, as well as

other officials whose functions involve relations with indigenous peoples.82

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Neither in the IACHR application nor in the IACtHR decision there is a reference to the

investment treaties or the investment arbitration case that was being litigated in parallel

against Ecuador, as it will explained on the following section. Only Ecuador’s domestic

legislation on the promotion of investments and contractual investment agreements were

considered at this stage.83

D. ISDS against Ecuador

On 21 December 2006, Chevron and TexPet instituted arbitration claiming that Ecuador was

liable for the damage they suffered due to unacceptable delay in the decision of seven breach-

of-contract cases brought by TexPet against Ecuador before Ecuadorian courts. Under the

agreements signed in 1973 and 1977 between TexPet and Ecuador, the former had to provide

a percentage of its crude oil production to the Ecuadorian Government to help meet domestic

consumption needs. The plaintiff alleged that the Government overstated Ecuador’s true

domestic consumption needs, and later took additional barrels of oil that belonged to TexPet

and exported them. In neither case the Ecuadorian Government did pay the international price

that it was contractually and legally required to pay.84

In this arbitration, Ecuador was ordered to pay damages of US$77,739,696.94, plus interests,

based on the decision of the tribunal that Ecuador had breached the Ecuador-US BIT (1993)

for not providing effective means of asserting claims and enforcing rights.85 Ecuador sought

the setting aside the award, but on 2 May 2012, the District Court of The Hague denied this

petition,86 a decision that was later upheld by the Court of Appeal of The Hague on 18 June

2013, and by the Dutch Supreme Court by judgment of 26 September 2014.87

The decisions taken in this arbitration take note of some issues related to human rights but do

not base the award on them. An interim award on jurisdiction (2008) submit the arguments

put forward by the parties in favour and against the retroactive application of the Ecuador-US

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BIT and the exhaustion of local remedies, that include a comparison on the approach to

retroactivity in the human rights and investment context, and on the issue whether a lack of

judicial independence or unwarranted delay demonstrates the futility of pursuing local

remedies,88 citing the IACtHR case Las Palmeras v. Colombia.89 The partial (2010) and final

award (2011) on merits point out that a new mechanism to appoint judges to the Ecuadorian

Supreme Court between 2005 and 2008 raised some criticisms about the impartiality of the

new judges, notably by the Organisation of American States (OAS) and the UN Special

Rapporteur on the independence of judges and lawyers.90 The ACHR is cited by the claimants

as guaranteeing the right to a hearing in a reasonable time, by a competent, independent, and

impartial tribunal for the determination of rights and obligations of a civil or any other

nature.91 In support of their position, the claimants quote several human rights cases on

excessive judicial delay and lack of judicial independence, citing case law from both the

IACtHR and the ECtHR, which was in turn contested by the respondent State.92

A second ISDS case against Ecuador sought declaratory relief that Chevron was released from

all environmental liability for Texaco’s operations in Ecuador, being that country responsible

for any remaining remediation work. The plaintiffs alleged that Ecuador breached investment

agreements signed between 1994 and 1998, and that Ecuador had also breached the Ecuador-

US BIT, including its obligation to afford national and most favored nation treatment, fair and

equitable treatment, full protection and security, non-arbitrary treatment, and generally non-

discriminatory treatment and the effective means of enforcing those rights. 93

Several interim awards issued by the arbitral tribunal between 2012 and 2013 provided

indications on the criteria that the arbitrators would use to decide this case. In a First Interim

Award on Interim Measures of 25 January 2012, the arbitral tribunal decided that Ecuador

should take “all measures at its disposal to suspend or cause to be suspended the enforcement

or recognition within and without Ecuador of any judgement against [Chevron] in the Lago

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Agrio Case”. Furthermore, in a Second Interim Award on Interim Measures of 16 February

2012, the Tribunal ordered to Ecuador to suspend the enforcement against Chevron in the

Ecuadorian legal proceedings known as “the Lago Agrio Case”. In a Third Interim Award on

Jurisdiction and Admissibility of 27 February 2012 the Tribunal rejected jurisdictional

defences submitted by Ecuador and in a final Fourth Interim Award on Interim Measures of 7

February 2013, the Tribunal declared that Ecuador has violated the First and Second Interim

Awards, pursuing the execution of the Lago Agrio Judgement within and outside Ecuador,

including Canada, Brazil and Argentina.94

On 17 September 2013, the arbitral tribunal decided that Chevron and TexPet were both

“releasees” in accordance to the agreements signed with Ecuador, and they can exercise those

rights both defensively and offensively in proceedings seeking relief under Ecuadorian law

for environmental liability.95 No mention to the Sarayaku case before the Inter-American

system is found in this decision. However, the influence of the Aguinda/Lago Agrio cases in

the award is pondered, with the arbitral tribunal declining to decide whether or not the claims

pleaded by the Lago Agrio plaintiffs rest upon individual rights, as distinct from “collective”

or “diffuse” rights (in whole or in part) and whether or not those claims are materially similar

to the claims made by the Aguinda Plaintiffs in New York. Yet, the tribunal decided that the

scope of the releases made by Ecuador does not extend to any environmental claim made by

an individual for personal harm in respect of separate individual’s rights, but it does have

legal effect under Ecuadorian law precluding any “diffuse” claim against the claimants under

the Ecuadorian Constitution made by the State or any individual not claiming personal harm

(actual or threatened).96

On a later decision that complements the 2013 award, in March 2015 the arbitral tribunal

decided that the Lago Agrio Complaint of 2003, included individual claims resting upon

individual rights under Ecuadorian law, not falling within the scope of the 1995 Settlement

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Agreement and therefore not wholly barred at its inception by res judicata, under Ecuadorian

law, as invoked by the Claimants. Finally, the arbitral tribunal also decided that the Lago

Agrio Complaint included individual claims materially similar, in substance, to the individual

claims made by the Aguinda plaintiffs in New York.97

In January 2014, Ecuador sought to set aside the interim and partial awards rendered by the

arbitral tribunal. Finally, in a decision dated 20 January 2016, the District Court of The Hague

upheld the arbitral tribunal’s awards, rejecting all of Ecuador’s grounds for setting them aside,

ordering Ecuador to pay the costs of the proceedings.98

As we can see, although a group of parallel cases against Ecuador have been initiated under

the same set of facts – the harmful effects of oil exploitation in that county – before a human

rights regional system and ISDS arbitral tribunals, there is limited relationship between them.

In contrast, in the domestic litigation against Chevron and Texaco in Ecuadorian and US

Courts, both aspects have been directly connected, with decisions from US judiciary on both

the most appropriate forum to decide the dispute – Ecuadorian courts – and a later rejection of

the enforcement of the decision issued by those courts, on the grounds of having been

obtained through corrupt, and illegal means. Both the human right court and the ISDS arbitral

tribunals, make explicit reference and even based some decisions on the Aguinda and Lago

Agrio cases before domestic courts.

V. The Yukos Cases

Parallel cases involving investment arbitral tribunals and human rights courts are also found

outside Latin America. One of the most recent and notorious examples are the Yukos cases,

which have involved protracted litigation both at arbitral tribunals constituted on the one

hand, under BITs and the Energy Charter Treaty (ECT), and on the other hand, at the ECtHR.

These cases can help to illustrate the interplay between human rights and investment

adjudication outside Latin America.

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Both groups of cases originated from the same set of facts. OAO Neftyanaya Kompaniya

Yukos (“Yukos”), was a holding company established by the Russian Government in 1993 to

own and control a number of entities specialised in oil production. Yukos remained fully

State-owned until 1995-1996 when, through a different tenders and auctions, it was privatised

mainly to companies controlled by Mikhail Khodorovsky, which included the Group Menatep

Limited (GML), and became a publicly-traded private open joint-stock company incorporated

under the laws of Russia. By 2002, Yukos was Russia’s largest oil and gas company, and it

was listed as one of the world’s top ten firms in that sector. According to the claimants in all

these cases, from 2002 to 2006, the Russian government took a series of illegal measures,

inter alia, retroactive tax assessment, imposition and calculation of penalties for

underpayment of taxes, seizure of shares and corporate property, and the trial and

imprisonment of Yukos and GML CEOs, Mr Khodorkovskiy and Platon Lebedev, that

resulted in Yukos being declared bankrupt in August 2006. In November 2007, Yukos was

dissolved and its assets nationalized or acquired by Russian state-owned companies (Gazprom

and Rosneft).

Russia contested the allegations of the claimants on the grounds that the measures taken

against Yukos and its owners were based on their involvement in tax frauds, tax evasion and

embezzlement, accusations which in turn were rejected by the claimants as being politically

motivated.99 The outcome of these cases provided the largest ever compensation in both ISDS

and ECtHR systems.

A. The investment cases

With a view to obtaining compensation from the allegedly illegal measures described before,

several cases were brought up by Yukos’s shareholders against Russia, in different investment

arbitral tribunals.100

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In 2005, a group of foreign-registered claimants initiated three parallel investor-state

arbitration cases against Russia under the ECT, filed according to the UNCITRAL Arbitration

Rules, requesting a total compensation amounting to around USD 114 billion.101 The same

arbitrators were appointed in the three cases and rendered three parallel Awards on Merits on

18 July 2014, upholding many of the claimants’ allegations and ordered Russia to pay

compensation of approximately USD 50 billion – the largest amount ever awarded in ISDS –

distributed between the claimants according to their participation in Yukos.102 On 20 April

2016, the Hague District Court set aside these awards and held that the arbitral tribunals did

not have jurisdiction over the dispute, after considering that the provisional application of the

ECT by Russia under article 45 of the ECT was contrary to Russian law.103 In July 2016, the

claimants have appealed that judgment seeking to reinstate the original award,104 and a new

decision by Dutch Courts is still pending.

In 2006, RosInvestCo UK Ltd., a former minority shareholder of Yukos initiated arbitration

based on the Russia – United Kingdom BIT (1989), claiming that Russia had expropriated

Yukos, for no reason of public interest, and did not provide compensation considered for the

loss of their investment and the damage suffered by the value of the shares of Yukos. On 12

September 2010, an arbitral tribunal constituted at the Stockholm Chamber of Commerce

(SCC) decided that the Russian state’s measures constituted an unlawful expropriation and

understood them as “steps in a common denominator in a pattern to destroy Yukos and gain

control over its assets”, awarding USD 3.5 million in damages in favour of the claimants.105

Russian efforts to set aside this award have been unsuccessful.

In 2007, Spanish minority investors in Yukos (“Quasar de Valores”) filed an arbitration

proceeding against Russia under the Russia-Spain BIT (1990).106 An arbitral tribunal ruled

that Yukos’ tax delinquency was “a pretext for seizing Yukos assets and transferring them to

Rosneft”, and awarded to the Spanish shareholders around USD 2 million plus interests.107

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Russia sought several ways of quashing this decision, and finally on 18 January 2016, a

Swedish appeals court issued a declaratory ruling finding that the arbitral tribunal wrongly

took jurisdiction over the claims. A separate procedure is still pending in the Swedish courts

to set aside the final award.108

B. The human rights cases

Before the ISDS cases by Yukos shareholders even started, it was the same company that on

23 April 2004, brought up a case against the Russian Federation before the ECtHR (“OAO

Neftyanaya Kompaniya Yukos v. Russia” – application no. 14902/04), alleging several

violations to the European Convention on Human Rights (ECHR), that had resulted in

considerable pecuniary losses and the dissolution of the company.

On 20 September 2011, the ECtHR issued a chamber judgment finding partially in favour of

the claimants. The decision found that Yukos’ rights to a fair trial and its property were

violated due to the “arbitrariness and speed of tax debt enforcement proceedings conducted by

Russian authorities, the unfairness of domestic proceedings challenging the tax assessments,

and the retrospective application of fines for non-payment of taxes”.109 At the same time, the

Court found that Russia did not misuse legal proceedings to destroy Yukos.

Complementing the previous decision, on 31 July 2014, in a chamber judgment, the ECtHR

issued a decision on just satisfaction,110 awarding its largest compensation to date, ordering

Russia to pay around €1.9 billion to the shareholders of Yukos at the time of its liquidation,

and to pay costs for €300,000.111 On 15 December 2014, an ECtHR Grand Chamber panel of

five judges decided to reject the referral request submitted by Russia, and now the decision is

final.112 This award is significantly lower than the ISDS arbitrations referred before, and only

pecuniary damage was awarded, as the Court considered that, the findings of a violation of the

ECHR, constituted sufficient just satisfaction for the company of non-pecuniary damage.113

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Russia had to submit a plan for distribution of the award of just satisfaction within six months

from the date on which the judgment became final. However, at the time of this writing, such

compensation has not been paid, pending a decision by the Russian Constitutional Court

(RCC), which since 14 December 2015 has express jurisdiction to deny enforcement of

international human rights judgments that deem incompatible with the Russian

Constitution.114

Claims relating the trial and imprisonment of Mr Khodorkovskiy and Mr Lebedev were dealt

on a separate ECtHR case. In July 2013, the Court decided that there was no lack of

impartiality of Russian trial judges, that criminal proceedings against the applicants were not

politically motivated, and that the study of large volumes of evidence in difficult prison

conditions by the applicants was no violation of the ECHR, as they were supported by highly

qualified legal team. Yet, the same Court considered there was a violation of that ECHR on

the systematic perusal by prison authorities and trial judge of communications between

accused and their lawyers, the refusal to allow defence to cross-examine expert witnesses

called by the prosecution or to call their own expert evidence, and in the imprisonment in

penal colonies thousands of kilometres from prisoners’ homes. Just with respect to Mr

Lebedev, the Court also found a violations of the ECHR because he was at his trial in a metal

cage, faced a lengthy pre-trial detention and delays in the review of his detention. However,

the Court granted EUR 10,000 to Mr Khodorkovskiy in respect of non-pecuniary damage, and

rejected Mr Lebedev pecuniary claims in full. 115 Mr Khodorkovskiy was released from prison

on 20 December 2013 and Mr Lebedev on 24 January 2014, after serving more than ten years

in prison.116

C. Relationship between these investment and human rights cases

The Yukos cases are relevant for the analysis of the interplay between investment and human

rights tribunals, not only because they both provide compensations under the same set of

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facts, but also because of the reasoning behind those decisions. Although ISDS arbitral

tribunals and the ECtHR have divergent assessment of some claims, there is a dialogue

between some of their decisions, as they expressly refer to each other.

The arbitral tribunal in the Quasar de Valores case, explicitly addressed the ruling in the

Yukos case before the ECtHR, largely dissenting from that Court’s views and aligning with

the RosInvest arbitral tribunal, although it also states that it is not bound by either of these

decisions.117 For the Quasar de Valores tribunal there is a “fundamental difference” between

both cases, as the ECtHR resolved claims about Russia’s compliance with specific provisions

of the ECHR, without deciding whether or not Russian’s measures amounted to an

uncompensated expropriation of foreign investments as forbidden by the applicable BIT in

that case. The difference is also explained by the “wide margin of appreciation” a State enjoys

under Protocol No. l to the ECHR. 118

In fact, the Quasar de Valores award is explicitly critical of the approach taken by the ECtHR

in the interpretation on a number of issues, notably by the rejection by the ECtHR of the

argument that the Russian Tax Ministry knew of Yukos’ tax “optimisation” arrangement.119

Both tribunals have also a different take on the provisions regarding domestic tax haven,

having the ECtHR the position that there was no fault with Russia’s actions (finding the

domestic law “vague”), while the ISDS arbitral tribunal found a violation of the applicable

investment treaty.120 Another point of disagreement was in the auction process of some of

Yukos’ assets, where the ECtHR had not been persuaded that Russia acted with an ulterior

motive and the ISDS arbitral tribunal saw it as rigged to deliberately destroy Yukos. Finally,

both tribunals had different evaluations of Russia’s tax delinquency measures, as the ECtHR

did not find “incontrovertible and direct proof” of an intended expropriation and the ISDS

arbitral tribunal concluded that those measures went beyond its legitimate power of taxation,

and amounted to expropriation. 121

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The different take of both systems is also explained by the Quasar de Valores tribunal by the

fact that foreign investors are not part of the community that benefits from a bona fide

regulation in the public interest. Thus, investment protection treaties “might not allow a host

state to place such a high individual burden on a foreign investor to contribute, without the

payment of compensation, to the accomplishment of regulatory objectives for the benefit of a

national community of which the investor is not a member”.122

The findings of the three ISDS arbitral panels established under the ECT also have several

differences with the ECtHR, especially on the question of expropriation. These awards

considered that the treatment that Russian subjected to Yukos and its key company officials

amounted to an indirect appropriation, breaching Russia’s obligations under Article 13 of the

ECT.123 In contrast to the findings of the ECtHR, the investment arbitral tribunals of the ECT

cases specifically concluded that “the primary objective of the Russian Federation was not to

collect taxes but rather to bankrupt Yukos and appropriate its valuable assets”.124

Substantial differences are also in the quantum of the compensation finally awarded,

something that can be explained by the different bases for liability before the ECtHR and the

arbitral tribunals and the Yukos ECT arbitral tribunals. Where the ECtHR decision was issued

as a compensation for particular acts that caused interference with property rights, the arbitral

tribunals awarded compensation for the expropriation of Yukos, in respect of the value of the

company.125

It is not necessarily surprising that the ECtHR and the ECT Tribunals reached different

conclusions. Besides the different standards of proof and margin of appreciation that we have

referred before, the process of adjudication was very different. While the Yukos ECT arbitral

tribunals functioned much more like a full civil trial, including written evidence and cross-

examined witnesses, the ECtHR proceedings were mostly based on written pleadings and

little procedural testing of evidence.126

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It is interesting to note that although the ECtHR is mindful of various parallel proceedings

brought by some of the applicant company’s shareholders against Russia in other international

fora under BITs, both with final and pending awards, the ECtHR does not engage in a express

discussion of their different approaches or merits, as the investment arbitral tribunals did.127

The basis of this attitude is explained in the 2011 judgment of the ECtHR as a way “to avoid

the situation where several international bodies would be simultaneously dealing with

applications which are substantially the same”. However, following a formalistic criterion, the

same Court finally decided that the parties in the both proceedings are different and therefore

the two matters are not “substantially the same”.128

VI. Conclusion

The interaction between investor state dispute settlement (ISDS) and human rights courts has

been under-researched. In a seminal work, Petersmann concluded that both ISDS and human

rights regime share one fundamental communality: the development of legal rules and

institutions to compensate the asymmetric legal relationship between individuals and

sovereign states, enhancing the legal protection at international level of investors and

individuals to compensate their inferior position vis-à-vis the State.129 But, this commonality

does not seem to be acknowledged by investment and human rights tribunals in Latin

America.

While it is true that ISDS tribunals are generally reluctant to examine human rights

arguments, either submitted directly by the parties or by non-parties via amicus curiae,130

something similar happens at the IAHRS, which has not acknowledged the influence that

parallel claims under the same set of facts could have or not in their decisions, as the cases

examined in this paper clearly show. It seems that in Latin America human rights and

investment disputes are seen has separate tracks. Decisions of one tribunal do not seem to

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influence the other, and neither an acknowledgement of such decisions is deemed to have an

authoritative effect.

This situation contrasts with the extensive interplay that investment tribunals and the ECtHR

have had in similar situations, as it has been explained over the analysis of the Yukos cases. In

the European system, even if the outcomes of the proceedings have a different interpretation

of the same set of facts – largely based on the different law that is applied to the dispute –

there is a clear acknowledgement of the parallel dispute (both at the investment tribunal and

the human rights court) and we can perceive the ‘need’ of justifying different interpretations

in each case, what it might be considered as the recognition of their authoritative effect.

Certain lessons could be learned from this interplay, especially in Latin America. Lixinski has

analysed the issue of treaty interpretation by the IACtHR, and has found that the IAHRS has a

more limited standing than most ISDS tribunals, as only investors who are natural persons

affected are able to bring claims, mostly when it comes to the right to property, while

companies are perceived as beyond human’s right protection.131 This is in stark contrast with

the ECtHR, as it can be derived from the Yukos cases, where the same company was

considered as the applicant.

The cautious approach of IACHR and the IACtHR in this regard may be explained because

the IAHRS is not seen as the forum to protect business activities against arbitrary acts of the

State. Although the IACtHR case law consider that property damage arises more from facts

than from forms – which would tacitly imply the acceptance of the notions of “indirect” or

“creeping” expropriation found in ISDS jurisprudence, the IACtHR has resisted mixing

economic interests with human rights protection, even if property is in the centre of the

dispute.132

However, this does not mean that the ECtHR is a complete alternative to ISDS. As Kriebaum

points out, the European Human Rights system has some “disadvantages” for the investors, as

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in principle, the ECtHR has the compulsory requirement to exhaust local remedies, and does

not offer the same type of protection in case of expropriation, not granting indirect damages to

shareholders, with the possibility of awarding less than full compensation in case of violation

of the ECHR.133 The same “shortcomings” are also valid for the Inter-American system.

Furthermore, human rights violations, cannot be excluded per se from the jurisdiction of ISDS

tribunals, “if and to the extent that the human rights violation affects the investment, it

becomes a dispute ‘in respect of’ the investment and is hence arbitrable”.134 However, the

existing case law seems to limit the scope of the jurisdiction of ISDS tribunals to the subject-

matters explicitly included in the investment treaties. A claim brought on January 2016 by Al

Jazeera against Egypt arose out of the alleged destruction of the claimant’s media business in

Egypt, by means of arrest and detention of employees, attacks on facilities, interference with

transmissions and broadcasts, closure of offices, cancellation of claimant’s broadcasting

licence and compulsory liquidation of its local branch.135 In a case brought against Yemen by

a construction company, the arbitral tribunal awarded USD 1,000,000 as moral damages, after

concluding that physical duress exerted on the executives of the claimant was malicious and

constitutive of a fault-based liability.136 In Biloune v. Ghana, a Syrian investor who managed

the remodelling of a restaurant situated in Accra, was arrested and held in custody for 13

days, and eventually deported from Ghana to Togo, later claiming damages for expropriation,

denial of justice and violation of human rights. The award held the Government of Ghana

expropriated Mr. Biloune’s interests and was under an obligation to compensate him, but

decided that it had no jurisdiction over claims for denial of justice or violation of human

rights, as an independent cause of action.137

On the other hand, compliance with the obligations derived from human rights instruments

may serve as a context for the interpretation of the obligations of States with respect to

foreign investors contained in IIAs. In a recent award in Urbaser v. Argentina, the arbitral

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tribunal developed an exhaustive analysis of the relationship between the human right to

water and the protection of foreign investment, as a result of a counterclaim brought by

Argentina against the investor. Although the counterclaim was ultimately rejected, the

tribunal ruled that the BIT “has to be construed in harmony with other international law of

which it forms part, including those relating to human rights.”138

Finally, there are several conclusions we can draw with respect of the “dual” role of the

respondent State, in fulfilling its obligations under human rights and investment law regimes.

First, the relationship between foreign investment and protection of human rights entails a

complex scenario for States that have to be respondent in two different forums defending

interests that in most of the cases could be described as irreconcilable. For example, the

Chevron v. Ecuador case shows us the evident change in the position of the Ecuadorian State

on oil drilling throughout time, from pro-investor to pro-communities stance. While in Renco

v. Peru, the Peruvian State has lacked a response to its responsibility to extend the PAMA

multiple times to the company Doe Run.

Second, there is also a potential use of litigation in foreign investment as a tool for defence in

cases of human rights139 or social and environmental damage, as it is especially evident in

cases like Chevron and Renco. In both cases, the use of international investment arbitration by

the companies has allowed them to avoid accountability for their operations in Latin America.

Consequently, compensation or remediation to the environment or communities affected by

their operations in Ecuador and Peru is still pending.

Third, the existence of parallel claims both under human rights courts and investment

tribunals, urges coordination for the respondent States both ex ante and ex post in both

different fora.

1 On investment treaties, see: Tarcisio Gazzini, ‘Bilateral Investment Treaties’ in Tarcisio Gazzini and Eric De Brabandere (eds), International Investment Law. The Sources of Rights and Obligations (Martinus Nijhoff Publishers 2012) 107; and on

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human rights treaties see: Kate Parlett, The Individual in the International Legal System: Continuity and Change in International Law (Cambridge University Press 2011) 278–339. 2 European Convention of Human Rights, Arts. 34 and 35; American Convention on Human Rights, Art. 46; and Rules Of Procedure Of The African Commission On Human And Peoples’ Rights, Rule 93. 3 Anne Van Aaken, ‘The Interaction of Remedies between National Judicial Systems and ICSID : An Optimization Problem’ in N. Jansen Calamita, David Earnest and Markus Burgstaller (eds), The Future of ICSID and the Place of Investment Treaties in International Law, vol 4 (British Institute of International and Comparative Law 2013) 291. 4 Clara Reiner and Christoph Schreuer, ‘Human Rights and International Arbitration’ in Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human rights in international investment law and arbitration (Oxford University Press 2009) 37. 5 Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human Rights in International Investment Law and Arbitration (Oxford University Press 2009). 6 Yannick Radi, ‘The “Human Nature” of International Investment Law’ (Leiden University 2013) Grotius Centre Working Paper 2013/006-IEL <https://papers.ssrn.com/abstract=2278857> accessed 8 November 2016. 7 Kyla Tienhaara, ‘Regulatory Chill and the Threat of Arbitration: A View from Political Science’ in Chester Brown and Kate Miles (eds), Evolution in Investment Treaty Law and Arbitration (Cambridge University Press 2011) <http://dx.doi.org/10.1017/CBO9781139043809.034>. 8 Nicolas Klein, ‘Human Rights and International Investment Law: Investment Protection as Human Right’ (2012) 4 Goettingen J. Int’l L. 199. 9 Eduardo Galeano, Open Veins of Latin America: Five Centuries of the Pillage of a Continent (25 Anv edition, Monthly Review Press 1997) 2. 10 Rodrigo Polanco Lazo, ‘The No of Tokyo Revisited: Or How Developed Countries Learned to Start Worrying and Love the Calvo Doctrine’ (2015) 30 ICSID Review 172. 11 International Centre for Settlement of Investment Disputes (ICSID), History of the ICSID Convention, vol 2 (International Centre for Settlement of Investment Disputes 1968) 606. 12 UNCTAD, ‘Investor-State Dispute Settlement: Review of Developments in 2014’ (2015) IIA Issues Note 26. 13 International Centre for Settlement of Investment Disputes (ICSID), ‘The ICSID Caseload - Statistic (Issue 2017-1)’ (31 January 2017) 11 <https://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202017-1%20(English)%20Final.pdf> accessed 9 March 2017. 14 For a detailed account of this, see Rodrigo Polanco Lazo, ‘Is There a Life for Latin American Countries After Denouncing the ICSID Convention?’ (2014) 11 Transnational Dispute Management (TDM) <http://www.transnational-dispute-management.com/article.asp?key=2037> accessed 17 October 2016. 15 Attila Tanzi and others (eds), ‘Two Worlds Apart: The Changing Features of International Investment Agreements in Latin America’, International Investment Law in Latin America / Derecho Internacional de las Inversiones en América Latina, vol 5 (Brill /Martinus Nijhoff 2016) 79 <http://www.brill.com/products/book/international-investment-law-latin-america-derecho-internacional-de-las-inversiones-en-america> accessed 7 December 2015 16 Pacific Alliance Additional Protocol (signed 10 February 2014, entered into force 01 May 2016) ch 10. 17 The Pacific Alliance was established in April 2011, and formalized by a Framework Agreement signed in Paranal, Chile on 6 June 2012. An additional protocol including an investment chapter was signed on 10 February 2014 and entered into force on 01 May 2016. Current members are Chile, Colombia, Peru, and Mexico.Organization of American States (OAS), Foreign Trade Information System, ‘Pacific Alliance’ (Trade Policy Developments, 20 June 2014) <http://www.sice.oas.org/TPD/Pacific_Alliance/Pacific_Alliance_e.asp> accessed 10 October 2016.. 18 Cecilia Toledo, ‘Human Rights in Latin America’ (ELLA, 29 January 2013) 1–2 <http://ella.practicalaction.org/wp-content/uploads/files/130128_GOV_ProHumRig_GUIDE.pdf> accessed 9 March 2017. 19 Organization of American States (OAS), ‘IACHR Deeply Concerned over Result of Venezuela’s Denunciation of the American Convention’ (10 September 2013) <http://www.oas.org/es/cidh/prensa/comunicados/2013/064.asp> accessed 10 March 2017. 20 Claudio Nash, ‘Corte Suprema Argentina Y Corte Interamericana. ¿Un Nuevo Integrante Del Club de La Neo-Soberanía?’ (6 March 2017) <http://www.diarioconstitucional.cl/articulos/corte-suprema-argentina-y-corte-interamericana-un-nuevo-integrante-del-club-de-la-neosoberania/> accessed 9 March 2017. 21 United Nations Conference on Trade and Development (UNCTAD), ‘Mapping of IIA Content’ (Investment Policy Hub, March 2017) <http://investmentpolicyhub.unctad.org/IIA/mappedContent#iiaInnerMenu> accessed 26 April 2017. 22 These are the Canadian BITs with Benin (2013), Cameroon (2014), Nigeria (2014), Serbia (2014), Senegal (2014), Mali (2014), Côte d'Ivoire (2014), Burkina Fasso (2015), and in the investment chapters of the Canadian Free Trade Agreements (FTAs) with Peru (2008), Colombia (2008), Panama (2010), Honduras (2013) and South Korea (2014). 23 Luke Eric Peterson, ‘Selected Developments in IIA Arbitration and Human Rights’ (2009) 2 IIA Monitor 4 <http://unctad.org/en/Docs/webdiaeia20097_en.pdf> accessed 10 November 2016. 24 ‘Luksic No Levantaría Demanda Contra El Perú Ante La CIDH’ (Noticias del Perú, 11 February 2006) <http://perunoticias.net/11-02-2006/luksic-no-levantaria-demanda-contra-peru-ante-la-cidh> accessed 10 March 2017. 25 Federación Internacional de Derechos Humanos (FIDH), ‘Peru: Metallurgical Complex of La Oroya. When Investor Protection Threatens Human Rights’ (December 2012) 5–6 <https://www.fidh.org/IMG/pdf/final-ukversion.pdf> accessed 2 August 2016. 26 The Renco Group, ‘Environmental Responsibility’ (2016) <http://www.rencogroup.net/enviromentalresponsibility.php> accessed 17 August 2016. 27 Federación Internacional de Derechos Humanos (FIDH) (n 26) 8. 28 ibid 7.

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29 ibid. 30 Blacksmith Institute, ‘La Oroya Lead Pollution’ (Blacksmith Institute, 2007) <http://www.blacksmithinstitute.org/projects/display/36> accessed 2 August 2016. 31 Federación Internacional de Derechos Humanos (FIDH) (n 26) 7. 32‘Minera Doe Run Se Declara En Quiebra Y Pasa a Manos de Indecopi’ La Republica (Lima, Peru, 3 August 2009) <http://larepublica.pe/03-08-2009/minera-doe-run-se-declara-en-quiebra-y-pasa-manos-de-indecopi> accessed 10 November 2016. 33 ‘Estado Estará Al Frente de La Liquidación de Los Activos de Doe Run’ La Republica (Lima, Peru, 19 September 2015) <http://larepublica.pe/impresa/economia/704512-estado-estara-al-frente-de-la-liquidacion-de-los-activos-de-doe-run> accessed 11 November 2016. 34 U.S. Department of Health and Human Services and others, ‘Development of an Integrated Intervention Plan to Reduce Exposure to Lead and Other Contaminants in the Mining Center of’ (United States Agency for International Development, Peru Mission 2005) 26 <http://pdf.usaid.gov/pdf_docs/Pnadd579.pdf> accessed 11 November 2016. 35 Federación Internacional de Derechos Humanos (FIDH) (n 26) 11. 36 ibid 15. 37 Constitutional Court of Peru, ‘Doe Run Y Otros c /Ministerio de Salud Y Dirección General de Salud Ambiental (Digesa), S/Contaminación de Plomo de La Oroya [2006] Tribunal Constitucional Del Peru 2002-2006, EXP. N.o 2002-2006-PC/TC’ (12 May 2006) <http://tc.gob.pe/jurisprudencia/2006/02002-2006-AC.html> accessed 11 November 2016. 38 This legal action was initially filed on 4 October 2007 by Sisters Kate Reid and Megan Heeney as next friends of 137 Peruvian children inhabitants of La Oroya, for personal injuries and damages as a result of alleged lead exposure and environmental contamination. The original suit was voluntarily dismissed without prejudice and the children re-filed in 2008. Additional victims joined the case later on, and currently a total of 1760 children, are now represented in this procedure, with a total of twenty-four cases pending in a consolidated action (the ‘Reid Cases’). Other four cases brought by Fr. Chris Collins on behalf of over 300 minor plaintiffs are currently pending before three other judges of the same district (the ‘Collins Cases’), and consolidation of the both group of cases was denied in March 2016. ‘A.O.A. et Al. v. Doe Run Resources, Case No. 4:11 CV 44 CDP (E.D. Mo. Mar. 28, 2016)’ (28 March 2016) <https://casetext.com/case/aoa-v-doe> accessed 11 November 2016. 39 The Asociación Interamericana para la Defensa del Ambiente (AIDA), Centro de Derechos Humanos y Ambiente (CEDHA), Sociedad Peruana de Derecho Ambiental (SPDA) and Earthjustice. 40 Inter-American Commission on Human Rights, ‘Precautionary Measures 2007’ (2007) <http://www.cidh.org/medidas/2007.eng.htm> accessed 11 November 2016. 41 Paula Spieler, ‘The La Oroya Case: The Relationship between Environmental Degradation and Human Rights Violations’ (2010) 18 Human Rights Brief 19, 21. 42 Inter-American Commission on Human Rights, ‘Peru, P 1473-06 Community of La Oroya - Admissibility Report’ (5 August 2009) paras 36–51 <https://www.cidh.oas.org/annualrep/2009eng/Peru1473.06eng.htm> accessed 11 November 2016. 43 Inter-American Commission on Human Rights (n 50). 44 In May, 2016, the Commission announced that it was going through a severe financial crisis that will have serious consequences on its ability to fulfil its mandate and carry out its basic functions. Organization of American States (OAS), ‘Severe Financial Crisis of the IACHR Leads to Suspension of Hearings and Imminent Layoff of Nearly Half Its Staff’ (Press Release, 23 May 2016) <http://www.oas.org/en/iachr/media_center/PReleases/2016/069.asp> accessed 11 November 2016. 45 Inter-American Commission on Human Rights, ‘PM 271/05 – Community La Oroya, Peru. Extension’ (3 May 2016) <http://www.oas.org/es/cidh/decisiones/pdf/2016/MC271-5-Es.pdf> accessed 11 November 2016. 46 The Peru-US TPA was signed on 12 April 2006 and entered into force on 1 February 2009, 47 ‘The Renco Group, Inc. v. The Republic of Peru, ICSID Case No. UNCT/13/1. Claimants’ Notice of Arbitration and Statement of Claim’ (Investment Treaty Arbitration (ITA), 4 April 2011) para 1 <http://www.italaw.com/sites/default/files/case-documents/italaw3264.pdf> accessed 11 November 2016. 48 ibid 53–54. 49 ibid 84. 50 ‘The Renco Group, Inc. v. The Republic of Peru, ICSID Case No. UNCT/13/1. Partial Award on Jurisdiction (English)’ (Investment Treaty Arbitration (ITA), 15 July 2016) para 193 <http://www.italaw.com/sites/default/files/case-documents/italaw7434.pdf> accessed 11 November 2016. 51 ibid 164, 166, 171–172. 52 Suraj Patel, ‘Delayed Justice: A Case Study of Texaco Arnd the Republic of Ecuador’s Operations, Harms, and Possible Redress in the Ecuadorian Amazon’ (20 March 2012) 7 <https://works.bepress.com/suraj_patel/1/download/> accessed 11 November 2016. 53 Republic of Ecuador, Ley de Hidrocarburos [Decreto Supremo Nº 2.967 of 1971], Arts. 31(s) and 31(t). Cited by Judith Kimberling, ‘Indigenous Peoples and the Oil Frontier in Amazonia: The Case of Ecuador, ChevronTexaco, and Aguinda v. Texaco’ (2005) 38 NYUJ Int’l. L. & Pol. 413, 433. 54 María Augusta León Moreta, The Human Rights Fundaments of Conservation in the Context of the Extraction of Energy Resources (Bonn University Press (V&R unipress GmbH) 2015) 305. 55 Judith Kimberling (n 70) 449–450. 56 Suraj Patel (n 69) 10. 57During 1960s and 1970s, the company supported Ecuador’s national integration policy which sought evangelization of the indigenous population (such as the Huaorani or Aucas) by the relocation of homes and families into “Christian towns”. As

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the company expanded its operations and advanced into Huaorani territory, their warriors tried to drive off the workers of the company. In response, “Ecuador, Texaco, and Christian missionaries collaborated to pacify the Huaorani and end their way of life. Using aircraft supplied by Texaco, the missionaries intensified and expanded its program to contact, settle, and convert the Huaorani. Missionaries cruised the skies searching for Huaorani homes, dropping ‘gifts’ and calling out to people through radio transmitters hidden in baskets lowered from the air.” The conjunction of the little awareness and public concerns for environmental and social issues, the irresponsible behaviour of the company, a nonexistent regulation, and the lack of State’s action, converged in an irreversible damage on the environment of the Oriente region of Ecuador and a historic disruption to the social peace among the local communities. Judith Kimerling, ‘Oil, Contact, and Conservation in the Amazon: Indigenous Huaorani, Chevron, and Yasuni’ (2013) 24 Colorado Journal of International Environmental Law and Policy 49-51 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2332782> accessed 14 November 2016. 58 The ATCA (28 U.S.C. §1350) was originally part of the Judiciary Act of 1789. It was usually used for crimes such as piracy, the law now acts as a tool for holding human rights violators liable to victims seeking redress when options in their own countries are limited. 59 Suraj Patel (n 69) 15. 60 Ursula Biemann and Paulo Tavares, Forest Law - Selva Jurídica (Eli and Edythe Broad Art Museum, Michigan State University 2014) 57 <https://creativeecologies.ucsc.edu/wp-content/uploads/sites/196/2015/10/Biemann-Tavares-Forest-Law.compressed.pdf> accessed 14 November 2016. The Kichwa Peoples of the Sarayaku Community will be later plaintiffs in a human rights case. 61 Suraj Patel (n 69) 15. 62 Aguinda v. Texaco, Inc., 142 F. Supp. 2d 534 (S.D.N.Y. 2001) 63 Aguinda v. Texaco, Inc., 303 F.3d 470, 478-79 (2d Cir. 2002). It is important to clarify that the District Court dismissed the case twice under the rule of forum non conveniens (1996 and 1997), but in 1998, the Second Circuit Court of Appeals reversed the decision and remanded the case to the lower court for reconsideration conditioning the dismissal on Texaco’s agreement to submit to jurisdiction of Ecuador’s courts and waive defences based on statutes of limitations. Elizabeth C. Black, ‘Litigation as a Tool for Development: The Environment, Human Rights, and the Case of Texaco in Ecuador’ (2004) 15 Journal of Public and International Affairs 142, 149. 64 ibid 149–150. 65 Judith Kimerling, ‘Lessons from the Chevron Ecuador Litigation: The Proposed Intervenors’ Perspective’ (2013) 1 Stanford Journal of Complex Litigation 241, 255–256. 66 Suraj Patel (n 69) 24. 67 Belen Marty, ‘Rafael Correa Accuses Chevron of Cheating Ecuadorian Justice’ <https://panampost.com/belen-marty/2014/05/22/rafael-correa-accuses-chevron-of-cheating-ecuadorian-justice/> accessed 14 November 2016. 68 Suraj Patel (n 69) 29–33. 69 Antoni Pigrau, ‘The Texaco-Chevron Case in Ecuador: Law and Justice in the Age of Globalization’ (2014) 5 Revista Catalana de Dret Ambiental 14 <http://www.raco.cat/index.php/rcda/article/view/280972> accessed 14 November 2016. 70 ‘Corte Nacional de Justicia del Ecuador, Maria Aguinda Salazar y Otros v. Chevron Corporation, (2013), Case No. 174-2012’ (12 November 2013) <https://pabloarturo10.files.wordpress.com/2013/11/sentencia-casacic3b3n-chevron.pdf> accessed 14 November 2016. 71 Joe Carroll and Karen Gullo, ‘Chevron’s Ecuador Award “Unenforceable,” Analysts Say’ Bloomberg (18 February 2011) <http://www.bloomberg.com/news/articles/2011-02-14/chevron-to-appeal-adverse-judgment-in-ecuador-pollution-case> accessed 14 November 2016. 72 Chevron, ‘Background | Ecuador Lawsuit’ (2011) <https://www.chevron.com/ecuador/background/> accessed 14 November 2016. 73 Chevron Corp. v. Donziger, 2013 U.S. Dist. LEXIS 36353 (S.D.N.Y. Mar. 15, 2013). 74 Chevron Corp. v. Donziger, 2016 U.S. App. LEXIS 14552 (2d Cir. N.Y. 2016). 75 The Kichwa nationality of the Ecuadorian Amazon Basin consists of two Peoples who share the same linguistic and cultural tradition: the Napo-Kichwa People and the Kichwa People of Pastaza. Inter-American Court of Human Rights, ‘Pueblo Indígena Kichwa de Sarayaku v Republic of Ecuador. Case No. 12.465. Judgment on Merits and Reparations, 27 June 2012’ paras 51–52 <http://corteidh.or.cr/docs/casos/articulos/seriec_245_esp.pdf> accessed 14 November 2016. 76Inter-American Commission on Human Rights, ‘Application to the Inter-American Court of Human Rights in the Case of Kichwa People of Sarayaku and Its Members against Ecuador (Case No. 12.465)’ (26 April 2010) para 1 <https://www.cidh.oas.org/demandas/12.465%20Sarayaku%20Ecuador%2026abr2010%20ENG.pdf> accessed 14 November 2016. 77 Companıa General de Combustibles S.A. (CGC) and Petrolera Argentina San Jorge S.A. (later “Chevron-Burlington“). 78 ibid 106. 79 ibid 63. 80 ibid 2. 81 Inter-American Court of Human Rights (n 94) 99. 82 ibid 100. 83 Inter-American Commission on Human Rights, ‘Application to the Inter-American Court of Human Rights in the Case of Kichwa People of Sarayaku and Its Members against Ecuador (Case No. 12.465)’ (n 95) paras 115, 131. Inter-American Court of Human Rights (n 94) paras 76, 82. 84 Chevron Corporation (USA) and Texaco Petroleum Company (USA) v The Republic of Ecuador, UNCITRAL, PCA Case No 34877 Interim Award, 1 December 2008 [2008] Invest Treaty Arbitr (UNCITRAL, PCA) 1–2.

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85 Chevron Corporation (USA) and Texaco Petroleum Company (USA) v The Republic of Ecuador, UNCITRAL, PCA Case No 34877 Final Award, 31 August 2011 [2011] Invest Treaty Arbitr (UNCITRAL, PCA) 141–142. 86 The Republic of Ecuador v Chevron Corporation (USA) and Texaco Petroleum Company Case Numbers 386934 / HA ZA 11-402 and 408948 / HA ZA 11-2813 Judgement of 2 May 2012 [2012] Invest Treaty Arbitr (District Court of The Hague). 87 The Republic of Ecuador v Chevron Corporation (USA) and Texaco Petroleum Company Case Number C/09/477457 / HA ZA 14 - 1291 Judgement of 20 January 2016 (2016) Investment Treaty Arbitration (District Court of The Hague) [2.14]. 88 Chevron Corporation (USA) and Texaco Petroleum Company (USA) v. The Republic of Ecuador, UNCITRAL, PCA Case No. 34877. Interim Award, 1 December 2008 (n 102) [176, 225, 246]. 89 Las Palmeras v. Colombia, Inter-Am. Ct. H.R. (Ser. C) No. 90 (2001) 90 Chevron Corporation (USA) and Texaco Petroleum Company (USA) v The Republic of Ecuador, UNCITRAL, PCA Case No 34877 Partial Award on the Merits, 30 March 2010 [2010] Invest Treaty Arbitr (UNCITRAL, PCA) [146–148]. Chevron Corporation (USA) and Texaco Petroleum Company (USA) v. The Republic of Ecuador, UNCITRAL, PCA Case No. 34877. Final Award, 31 August 2011 (n 103) [226–231]. 91 Chevron Corporation (USA) and Texaco Petroleum Company (USA) v. The Republic of Ecuador, UNCITRAL, PCA Case No. 34877. Final Award, 31 August 2011 (n 103) [35]. 92 Chevron Corporation (USA) and Texaco Petroleum Company (USA) v. The Republic of Ecuador, UNCITRAL, PCA Case No. 34877. Partial Award on the Merits, 30 March 2010 (n 108) [170, 174, 182, 287, 312]. 93 Chevron Corporation and Texaco Petroleum Corporation v The Republic of Ecuador, UNCITRAL, PCA Case No 2009-23 Claimants’ Notice of Arbitration, 23 September 2009 Invest Treaty Arbitr (UNCITRAL, PCA). 94 The Republic of Ecuador v. Chevron Corporation (USA) and Texaco Petroleum Company. Case Number C/09/477457 / HA ZA 14 - 1291. Judgement of 20 January 2016 (n 105) [2.9-2.12]. 95 Chevron Corporation and Texaco Petroleum Corporation v The Republic of Ecuador, UNCITRAL, PCA Case No 2009-23 First Partial Award on Track I, 17 September 2013 [2013] Invest Treaty Arbitr (UNCITRAL, PCA) [91, 112]. 96 ibid 93, 95, 112. 97 Chevron Corporation and Texaco Petroleum Corporation v The Republic of Ecuador, UNCITRAL, PCA Case No 2009-23 Decision on Track 1B, 12 March 2015 Invest Treaty Arbitr (UNCITRAL, PCA) [186]. 98 The Republic of Ecuador v. Chevron Corporation (USA) and Texaco Petroleum Company. Case Number C/09/477457 / HA ZA 14 - 1291. Judgement of 20 January 2016 (n 105) [4.41-4.42]. 99 Martin Dietrich Brauch, ‘Yukos v. Russia: Issues and Legal Reasoning behind US$50 Billion Awards’ (Investment Treaty News, September 2014) 1–2 <http://www.iisd.org/itn/wp-content/uploads/2014/09/iisd_itn_yukos_sept_2014_1.pdf> accessed 23 October 2016. 100 Several other cases were brought up in domestic jurisdictions (including domestic courts) and private arbitration (including the International Chamber of Commerce), but the cases described here are only those base don IIAs. 101 Hulley Enterprises Limited (Cyprus) v. The Russian Federation (PCA Case No. AA 226); Yukos Universal Limited (Isle of Man) v. The Russian Federation (PCA Case No. AA 227); and Veteran Petroleum Limited (Cyprus) v. The Russian Federation (PCA Case No. AA 228), from now on ‘the Yukos ECT cases’. 102 Martin Dietrich Brauch (n 117) 6. 103 The Russian Federation v Veteran Petroleum Limited (C/09/477160 / HA ZA 15-1); the Russian Federation v Yukos Universal Limited (C/09/477162 / HA ZA 15-2); and the Russian Federation v Hulley Enterprises Limited (C/09/481619 / HA ZA 15-112) [2016] http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2016:4230 (The Hague District Court). The Hague District Court was the competent forum for Russia’s quashing applications, as it was the place of the ECT’s arbitrations. 104 Alison Ross, ‘Yukos Shareholders Seek to Reinstate Award - News - Arbitration News, Features and Reviews’ (Global Arbitration Review, 19 July 2016) <http://globalarbitrationreview.com/news/article/35507/yukos-shareholders-seek-reinstate-award/> accessed 1 August 2016. 105 RosInvestCo UK Ltd. v. The Russian Federation, SCC Case No. V079/2005, Final Award (12 September 2010),§ 621. http://www.italaw.com/sites/default/files/case-documents/ita0720.pdf 106 The case was initially known as the Renta 4 S.V.S.A, Ahorro Corporación Emergentes F.I., Ahorro Corporación Eurofondo F.I., Rovime Inversiones SICAV S.A., Quasar de Valores SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. v. The Russian Federation, SCC No. 24/2007. It is now known as the Quasar de Valores SICA V S.A and others v. Russia case. 107 Quasar de Valores SICA V S.A and other v. Russia, Award, 20 July 2012, § 177, 218, http://www.italaw.com/sites/default/files/case-documents/ita1075.pdf 108 Luke Eric Peterson, ‘More Uncertainty Looms as to Scope of Some Russian and Chinese BITs, as Swedish Appeals Court Contradicts Tribunal with Respect to Narrowly-Worded Arbitration Clause | Investment Arbitration Reporter’ <http://www.iareporter.com/articles/swedish-appeals-court-contradicts-tribunal-with-respect-to-narrowly-worded-arbitration-clause-sowing-more-uncertainty-as-to-scope-of-some-russian-and-chinese-treaties/> accessed 27 July 2016. 109 Jarrod Hepburn, ‘Human Rights Court Find Some Breaches by Russia in Yukos Case, but Diverges from Earlier BIT Arbitration Ruling on Other Points’ <http://www.iareporter.com/articles/human-rights-court-find-some-breaches-by-russia-in-yukos-case-but-diverges-from-earlier-bit-arbitration-ruling-on-other-points/> accessed 1 August 2016. 110 Oao Neftyanaya Kompaniya Yukos v. Russia (application no. 14902/04), adopted on 24 June 2014 and delivered 31 July 2014 111 Conor McCarthy, ‘The ECtHR’s Largest Ever Award for Just Satisfaction Rendered in the Yukos Case’ (EJIL: Talk!, 15 August 2014) <http://www.ejiltalk.org/the-ecthrs-largest-ever-award-for-just-satisfaction-rendered-in-the-yukos-case/> accessed 27 July 2016. 112 European Convention of Human Rights, Art. 43 and 44. 113 Oao Neftyanaya Kompaniya Yukos v. Russia §47.

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114 Anastasia Rogozina, ‘Constitutional Court to Decide on Enforceability of ECtHR Judgments in Russia’ <http://www.cisarbitration.com/2015/12/16/constitutional-court-to-decide-on-enforceability-of-ecthr-judgments-in-russia/> accessed 27 July 2016. 115 Khodorkovskiy and Lebedev v. Russia - 11082/06 and 13772/05, Judgment 25.7.2013. 116 Irina Reznik, ‘Russian Ruling Keeps Khodorkovsky in Exile as Lebedev Freed’ Bloomberg.com (23 January 2014) <http://www.bloomberg.com/news/articles/2014-01-23/russia-shuts-door-on-khodorkovsky-return-as-lebedev-to-be-freed> accessed 16 November 2016. 117 Jarrod Hepburn, ‘ANALYSIS: Tribunal Confirms Russia’s Deliberate Destruction of Spanish Investors’ Yukos Holdings; Findings Distinguished from Human Rights Court | Investment Arbitration Reporter’ <http://www.iareporter.com/articles/analysis-tribunal-confirms-russias-deliberate-destruction-of-spanish-investors-yukos-holdings-findings-distinguished-from-human-rights-court/> accessed 27 July 2016. 118 Quasar de Valores, Award, § 42, 125 and 158. 119 Id, paragraph 51 120 Id, paragraph 55. 121 Jarrod Hepburn (n 135). 122 Quasar de Valores, Award, paragraph 23. 123 Conor McCarthy, ‘The Problems of Fragmentation and Diversification in the Resolution of Complex International Claims: OAO Neftyanaya Kompaniya Yukos v Russia, European Court of Human Rights, Application No. 14902/04, Judgment (Just Satisfaction), 31 July 2014’ (2016) 17 The Journal of World Investment & Trade 140, 143. 124 Yukos ECT cases, Award, paragraph 756. 125 Conor McCarthy (n 141) 145. 126 ibid 144. 127 See Oao Neftyanaya Kompaniya Yukos v. Russia, Judgment of 31 July 2014, paragraph 43. 128 Oao Neftyanaya Kompaniya Yukos v. Russia, Judgment of 20 September 2011, paragraphs 520 and 526. 129 Ernst-Ulrich Petersmann, ‘Introduction and Summary: “Administration of Justice” in International Investment Law and Adjudication?’ in Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human rights in international investment law and arbitration (Oxford University Press 2009) 16. 130 Moshe Hirsch, ‘Investment Tribunals and Human Rights: Divergent Paths’ in Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human rights in international investment law and arbitration (Oxford University Press 2009) 113. 131 Lucas Lixinski, ‘Treaty Interpretation by the Inter-American Court of Human Rights: Expansionism at the Service of the Unity of International Law’ (2010) 21 European Journal of International Law 585, 598–599. 132 Pedro Nikken, ‘Balancing of Human Rights and Investment Law’ in Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human rights in international investment law and arbitration (Oxford University Press 2009) 270. 133 Ursula Kriebaum, ‘Is the European Court of Human Rights an Alternative to Investor-State Arbitration?’ in Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human rights in international investment law and arbitration (Oxford University Press 2009) 245. 134 Clara Reiner and Christoph Schreuer, ‘Human Rights and International Arbitration’ in Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann (eds), Human rights in international investment law and arbitration (Oxford University Press 2009) 84. 135 Al Jazeera Media Network v. Arab Republic of Egypt (ICSID Case No. ARB/16/1). 136 Desert Line Projects LLC v The Republic of Yemen ICSID Case No ARB/05/17, Award, 6 February 2008 (International Centre for Settlement of Investment Disputes (ICSID)) [290–291]. Antoine Biloune (Syria) and Marine Drive Complex Ltd. (Ghana) v. Ghana Investment Centre and the Government of Ghana, Award on Jurisdiction and Liability, 27 October 1989, 95 ILR 188. 138 Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic, ICSID Case No. ARB/07/26, Award, 8 December 2016, §1200. 139 Clara Reiner and Christoph Schreuer (n 156).