Crow, K., and Lina Lorenzoni-Escobar, From Traction to Treaty Bound: Erga Omnes, Multinationals, and the Arbitral Use of Judge-Made Law, (forthcoming, 2020).

Kevin Crow | ASB Faculty | Research Paper


Discipline: International Law


While the debate on international human rights and environmental obligations for multinational corporations has raged on for decades, the decisions of extra-IIL courts regarding such obligations have been creeping into international investment arbitration at an accelerated rate since the Roussalis decision of 2011.

The question on whether investors are the subject of obligations under international law—not only rights—brings to bear a legal landscape that is not traditionally applied in investment arbitration: on the one hand, the few investment cases that have dealt with this issue, do so by virtue of counterclaims, which are rather scarce in investment arbitration; on the other hand, the issue of investor obligations builds on the limited subjectivity of investors under BITs and is enhanced through extra-IIL precedents.

Indeed, in defining the contours of how state-tailored obligations can be applied to investors, arbitral tribunals are increasingly drawing from (and in turn producing) a body of case law with the potential to dramatically influence not only the interpretation and application of international investment law in the years to come, but also the scope of the business and human rights debate. In this paper, we argue that the arbitral use of judge-made law on two fronts—jurisdiction and substantive questions—has produced a new ‘presumption of applicability’ with peculiar parameters for investors (II).

Substantively, we observe the arbitral use of two similar but distinct legal dotrines to apply general international law to corporate actors—jus cogens and erga omnes—and we analyze how and why these doctrines are deployed (III). We also question the extent to which politics and domestic understandings of law have influence this development (IV).