*Karl P. Sauvant, PhD*
*Resident Senior Fellow*
*Columbia Center on Sustainable Investment*
Columbia Law School - The Earth Institute, Columbia University
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"China Moves the G20 toward an International Investment Framework and
Investment Facilitation", "China Moves the G20 on Investment", "The Rise of
Self-judging Essential Security Interest Clauses in IIAs", "Can Host
Countries have Legitimate Expectations?", "The Next Step in Governance: The
Need for Global Micro-regulatory Frameworks", "How International Investment
Agreements can Protect Free Media", "The Evolving International Investment
Law and Policy Regime: Ways Forward", "China's Outward FDI and
International Investment Law", and  "Policy Options for Promoting FDI in
the LDCs" *are* available at and

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*Columbia FDI Perspectives*

Perspectives on topical foreign direct investment issues
No. 192  January 30, 2017
Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Matthew Schroth ([log in to unmask])

*Influencing investment disputes from the outside*
Joseph (Yusuf) Saei * <#m_-6417036209960863706__edn1>

Non-disputing third parties (NDTPs) often try to shape investor-state
arbitrations by asking to submit “friends of the court” (or “*amicus curiae*”)
briefs. This *Perspective *identifies three areas of activism in addition
to the formal process of submitting a “brief” in the primary dispute:
pursuing parallel strategies, engaging with consent-based processes and
embracing external assistance.

*First*, consider the parallel strategy pursued by non-governmental
organizations (NGOs) in the case of *Aguas del Tunari v. Bolivia*.[1]
<#m_-6417036209960863706__edn2> In addition to organizing a “Cochabamba
water revolt” against water services privatization, they arranged an
“International Citizens’ Petition” to the World Bank, gathering signatures
from more than 300 civil society organizations and public leaders. This
petition requested that the arbitral tribunal visit Cochabamba to receive
public testimony. Although it declined the request, the Tribunal did affirm
its power to interview third parties on its own motion.

NGOs also employed a media strategy to arouse public scrutiny and, in this
manner, increased public relations costs for the claimant. They discovered
that Bechtel (the owner of Aguas del Tunari) was in negotiations for a
water contract with San Francisco’s City Council. As a result of civil
society mobilization, the Council passed a resolution commending efforts in
Bolivia to oppose privatization.[2] <#m_-6417036209960863706__edn3> Bechtel
ultimately dropped its claim.

The European Commission (EC) exemplifies another creative approach toward
activism adjacent to primary disputes. EC strategy extends to the
post-award annulment stage and proceedings in national courts. Other NDTPs
should also consider whether they can intervene in national courts that
have more progressive *amicus* or permissive joinder rules.

*Second*, NDTP practitioners can engage with consent-based processes to
influence rule formation. For example, starting in 2007, two NGOs that
repeatedly petition tribunals to submit third-party briefs—the
International Institute for Sustainable Development (IISD) and the Center
for International Environmental Law (CIEL)—lobbied the UNCITRAL Working
Group II on Arbitration and Conciliation to develop provisions on
transparency and third-party participation. The Working Group was in the
process of updating the 1976 arbitration rules, which did not provide for
liberal NDTP participation. Certain countries and NGOs representing the
status quo (more than eighteen arbitration interest groups in total)
forcefully resisted the NGOs’ efforts, twice resulting in a denial of their
observer status. However, IISD and CIEL eventually garnered support from
the EC (another NDTP practitioner active at UNCITRAL), as well as certain
country delegations (notably Argentina, Australia, Canada, Mexico, Norway,
South Africa, and the United States). Their efforts culminated in the
UNCITRAL Rules on Transparency[3] <#m_-6417036209960863706__edn4> and the
Mauritius Convention on Transparency in Treaty-Based Investor-State
Arbitration.[4] <#m_-6417036209960863706__edn5>

NDTPs should continue to engage with consent-based processes open to NGO
input and should also seek to influence the incorporation of liberal NDTP
procedures in international investment agreements (IIAs). The latter can be
accomplished in the case of countries revising their model treaties and
negotiating new IIAs, and by persuading governments to sign the Mauritius
Convention, thereby ensuring the retroactive application of the
transparency and participation rules to existing treaties.

*Finally*, NDTPs—when they do wish to submit briefs—can be resourceful in
seeking to fund their participation. In at least two cases, law school
clinics (in the United States, France and Canada) have helped to research
and prepare briefs in consultation with local groups. Since the earliest
NDTP efforts, law professors have lent their expertise to third-party
petitions and briefs. Finally, private philanthropic
organizations—including the Charles Stewart Mott Foundation, the Ford
Foundation and the Lannan Foundation—have supported NDTP participation in
investor-state disputes.

At the same time, NDTPs must understand that arbitral tribunals are
becoming sensitive to third parties with deep pockets or external funding,
and may ask them to fund portions of arbitral proceedings beyond their own
submissions. In a recent decision permitting NDTP participation, the
arbitral tribunal in *Philip Morris v. Uruguay*[5]
<#m_-6417036209960863706__edn6> reserved the right to order that certain
costs (incurred by disputing parties in responding to NDTP briefs) be paid
by the NDTP petitioners. It was unclear on what basis the tribunal would be
able to do this, but imposing costs on NDTPs would force them to
re-evaluate the benefits of intervention. On the other hand, cost orders
against NDTPs would blur the distinction between disputing parties and
third parties, justifying the latter’s demands for increased procedural
rights alongside more substantive participation.

In sum, potential NDTPs should consider multiple avenues for voicing
concerns and should choose the type of participation that is best suited to
their needs. The more knowledge third parties have about the creative
activism that is often connected to formal brief requests, the more they
are likely to succeed in expressing the dynamic and diverse interests of
global society.


* <#m_-6417036209960863706__ednref1> Joseph (Yusuf) Saei (
[log in to unmask]) is a J.D. (2018) candidate at Yale Law School and was
a Yale Fox International Fellow for 2015-2016. The author is grateful to
Jan Kleinheisterkamp, Robert Howse and Howard Mann for their helpful peer
reviews. *The views expressed by the author of this **Perspective** do not
necessarily reflect the opinions of Columbia University or its partners and
supporters or those of any other entity. **Columbia FDI Perspectives**
(ISSN 2158-3579) is a peer-reviewed series.*

[1] <#m_-6417036209960863706__ednref2> *Aguas del Tunari v. Bolivia*, ICSID
Case No. ARB/02/3.

[2] <#m_-6417036209960863706__ednref3> City of San Francisco, “Resolution
commending Oscar Olivera and La Coordinadora for their successful efforts
to combat water privatization in Bolivia,” Resolution No. 355-01 (approved
May 11, 2001).

[3] <#m_-6417036209960863706__ednref4> Available at

[4] <#m_-6417036209960863706__ednref5> Available at

[5] <#m_-6417036209960863706__ednref6> *Philip Morris Brands Sàrl v.
Uruguay*, ICSID Case No. ARB/10/7, Procedural Order No. 3, para. 31 (Feb.
17, 2015).

*The material in this Perspective may be reprinted if accompanied by the
following acknowledgment: “Joseph (Yusuf) Saei, ‘Influencing investment
disputes from the outside,’ Columbia FDI Perspectives, No. 192, January 30,
2017. Reprinted with permission from the Columbia Center on Sustainable
Investment (** <>**).” A
copy should kindly be sent to the Columbia Center on Sustainable Investment
at **[log in to unmask]* <[log in to unmask]>*. *

For further information, including information regarding submission to the
*Perspectives*, please contact: Columbia Center on Sustainable Investment,
Matthew Schroth, [log in to unmask]

   - No. 191, Tarcisio Gazzini, “Beware of freezing clauses in
   international investment agreements,” January 16, 2017.
   - No. 190, Karl P. Sauvant, “China moves the G20 on international
   investment,” January 2, 2017.
   - No. 189, Robbie Schwieder, “Broadening the Global Compact agenda,”
   December 19, 2016.

*All previous **FDI Perspectives** are available at
<>**. *


Karl P. Sauvant, Ph.D.
Resident Senior Fellow
Columbia Center on Sustainable Investment
Columbia Law School - Earth Institute
Ph: (212) 854-0689
Fax: (212) 854-7946

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