1
The classic cases involve the de facto termination of the property rights
of an investor in its investment, examples of which are nationalizations
and direct and indirect expropriations. These measures have their history
in disputes concerning diplomatic protection under customary
international law, but now are the subject of specific provisions under
IIAs (UNCTAD, 2000b). 2
Governmental measures include all legislative, regulatory or
administrative acts (encompassing practices) or omissions. 3
Under current international law, no State can be compelled to engage in
any dispute settlement mechanism without its consent. Furthermore, no
dispute settlement structure exists that provides for the submission of all
types of disputes. Thus, unlike domestic systems of governance, DSAs in
international relations do not feature in the overall governance structure
of international relations. Notwithstanding the foregoing, the
organization of the International Court of Justice (ICJ) under the auspices
of the United Nations could be regarded as a move towards the
establishment of a compulsory and comprehensive DSA within the
governance structure of the international system. However, it is arguable
that regional dispute settlement systems, such as the European Court of
Justice, are examples of a system of mandatory dispute settlement as the
member States of the grouping accept that membership entails
submission to the authority of the tribunal in question. Another example
would be the WTO dispute settlement mechanism under the Dispute
Settlement Understanding (DSU) (WTO, 1994) to which all Members of
the WTO must adhere as part of their membership obligations. 4 In these circumstances, international law requires States to attempt to
settle the dispute using any means agreeable to both, so long as those
means exclude measures that might endanger international peace and
security. 5 However, it should also be noted that unilateralism is not always
detrimental to the relationships formed by IIAs. The legitimacy of such
practices depends on the purposes and objectives of the State that resorts
to unilateralism, and whether or not those purposes and objectives were
anticipated within the context of the IIA. For example, a State might wish
to be the sole arbiter of whether certain measures fall within the scope of
an exception clause negotiated in the IIA. Equally, recourse to unilateral
acts needs to be considered in terms of non-compliance of one party with
the final decision that settles a dispute. Regardless of which dispute
settlement mechanism renders the final decision concerning the dispute, compliance with the final decision – be it a negotiated agreement or a
tribunal award – is always an issue since the international system lacks
enforcement procedures and mechanisms. To the extent that an IIA has
covered these and similar issues, any attempt to act unilaterally would
make a travesty of the DSAs contained therein. If, however, DSAs do not
address such issues, then a State remains free to engage in unilateralism.