Investor Presentaiton
81
1. Legal basis for a claim in domestic courts
One important preliminary question is the legal basis for the
claim, i.e. whether the relevant local-court claim would be based on
domestic law or international law. While a right to claim a violation
of the host State's domestic law is self-evident (aside from any
barrier posed by State immunity), an investor's ability to submit a
claim based on an alleged breach of an IIA will depend on the host
State's approach to international law. Many countries, especially
those with civil law systems, are "monist" and treat international
law, including treaties, as domestic law. Other countries, especially
those with common law systems, are generally "dualist" in their
approach to international law and often require a legislative act to
turn the international obligation into a national-law obligation.
73
Thus, in monist countries an investor will often be able to
submit a claim based on an alleged violation of an investment treaty
to domestic courts, and the court will be able to apply the treaty
directly, alongside domestic law. In a dualist country those rights
would be dependent on the existence of national legislation
implementing the treaty. Nonetheless, even monist countries may
not consider all treaties to be “self-executing" (i.e. forming part of
domestic law upon entry into force and providing a private right of
action under the treaty) just as all dualist countries do not treat all
treaties as non-self executing. The practice to date has been that
investors' claims in domestic courts, even in monist countries, have
been based solely on domestic law while the subsequent ISDS
73 For example, NAFTA implementing legislation in Canada and the
United States precludes individuals from submitting treaty-based claims in
domestic courts. (For Canada, see North American Free Trade Agreement
Implementation Act, SC 1993, c 44, sec 6(2); for the United States, see
North American Free Trade Agreement Implementation Act, Pub. L. 103-
82, sec 102(c).) By contrast, NAFTA Annex 1120.1(b), applicable only to
Mexico, makes it clear that such claims are possible in Mexican courts.
UNCTAD Series on International Investment Agreements IIView entire presentation