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Abstract Philip Morris Asia initiated an investment arbitration against Australia with respect to Australia’s tobacco plain packaging measures only a few months after it made its investment in Australia. The initiation of the arbitration raised a concern that the scope of protection under investment agreements and investment arbitration may be manipulated by multinational corporations. The tribunal in this case dismissed all the claims of Philip Morris Asia as inadmissible because it considered that the initiation of the arbitration constituted an abuse of process. While the decision is a positive development of law, at least from the perspective of respondent States, the tribunal did not sufficiently analyze the source and content of the principle of abuse of process. Against this background, this article seeks to clarify what the principle of abuse of process means under general international law and how it should be applied in investment arbitration. For this purpose, this article first examines the application of the principle by international judicial and quasi-judicial bodies other than investment arbitration. It then discusses how the principle should be applied in investment arbitration in light of its particular nature. I. INTRODUCTION On 22 June 2011, Philip Morris Asia, incorporated in Hong Kong, initiated investment arbitration against Australia, claiming that Australia violated its obligations under the bilateral investment treaty (BIT) between Hong Kong and Australia2 by enacting and enforcing tobacco plain packaging measures with a view to reducing smoking.3 The initiation of the arbitration has intensified the already existing concern that measures pursuing legitimate public policy objectives such as public health could be subject to review by investment arbitration and found to violate international investment agreements. The case has also raised a concern that the scope of protection under international investment agreements and investment arbitration may be manipulated by multinational corporations, because Philip Morris Asia, the claimant in this case, obtained access to investment arbitration under the BIT by acquiring the shares of Philip Morris Australia and Philip Morris Limited (PML) in Australia only a few months before the initiation of the arbitration.4 In its decision on jurisdiction and admissibility, the Tribunal in Philip Morris Asia concluded that all the claimant’s claims were inadmissible because it considered that the initiation of the arbitration constituted an abuse of right (abuse of process).5 The Tribunal stated that its decision was supported by investment arbitration case law, according to which ‘the commencement of treaty-based investor-State arbitration constitutes an abuse of right (or abuse of process) when an investor has changed its corporate structure to gain the protection of an investment treaty at a point in time where a dispute was foreseeable.’6 The decision may be seen as a positive development of law, at least from the perspective of State parties to international investment agreements, which are concerned that the protection under the agreements may be extended to investors and investments that they did not intend to protect at the time of conclusion of the agreements.7 However, in deriving this principle of abuse of process, the Tribunal in Philip Morris Asia relied exclusively on past investment arbitration decisions and did not consider any other international legal instruments or cases. Moreover, a careful reading of the decisions cited by the Tribunal reveals that there is no settled case law in investment arbitration on the principle of abuse of process. Does this mean that the Tribunal in Philip Morris Asia created the principle ex nihilo? Or does the principle exist under international law? If it exists, what is its content, and is it applicable to investment arbitration? This article reviews the principle of abuse of process under international law as well as its application in international investment arbitration, and discusses whether and how the principle should be applied in investment arbitration. This article is structured as follows: First, it seeks to clarify the meaning of the principle of abuse of process under international law by discussing the concept and examining applications of the principle in the International Court of Justice (ICJ, or the Court). It also discusses the application of treaty provisions that explicitly incorporate the principle of abuse of process, such as those of the First Optional Protocol to the International Covenant on Civil and Political Rights (ICCPR) and the European Convention on Human Rights (ECHR). Second, it reviews how the principle of abuse of process has been applied in investment arbitration, including Philip Morris Asia, and discusses how the application in investment arbitration is different from that in other international judicial and quasi-judicial bodies, and why. Finally, it considers whether and how the principle of abuse of process should be applied in investment arbitration in the future. II. ABUSE OF PROCESS UNDER INTERNATIONAL LAW A. Abuse of Process as a General Principle of Law (i) Concept It is generally accepted that the principle of abuse of rights is a general principle of law, applicable to international courts and tribunals.8 The principle concerns not whether a certain right exists, but rather how the right should be used. In other words, it applies only where a certain right does exist. If there is no right, there is no abuse of rights. Moreover, the principle demands that rights not be used in an ‘abusive’ way, although what constitutes an ‘abusive’ use of rights is not explicitly articulated in any of the international law instruments. One author defines abuse of rights as an exercise of a State’s rights ‘either in a way which impedes the enjoyment by other States of their own rights or for an end different from that for which the right was created, to the injury of another State.’9 It is also pointed out that ‘as legal rights are conferred by the community, the latter cannot countenance their anti-social use by individuals.’10 The principle of abuse of rights is closely linked to the principle of good faith, which is considered a ‘fundamental principle of every legal system.’11 In particular, with respect to the performance of treaties, Article 26 of the Vienna Convention on the Law of Treaties (VCLT) provides that every treaty ‘must be performed by [the parties] in good faith.’12 According to the ICJ, the provision ‘obliges the Parties to apply [a treaty] in a reasonable way and in such a manner that its purpose can be realized.’13 In other words, the provision requires that treaty obligations ‘be carried out according to the common and real intention of the parties.’14 The principle of abuse of rights prescribes the same obligation as the principle of good faith in a negative way:15 the former principle prohibits the exercise of treaty rights that is contrary to the latter.16 The principle of abuse of process is a procedural aspect of the principle of abuse of rights. As such, it is accepted as a general principle of law, and incorporated in the constitutive instruments of some international judicial and quasi-judicial bodies. What is specifically prohibited under the principle of abuse of process is abusive use of the right to procedures, particularly judicial and quasi-judicial procedures. The right to judicial and quasi-judicial procedures is one of the fundamental rights of States under international law as a reflection of the obligation of States to settle international disputes by peaceful means17 and their freedom to choose means of dispute settlement.18 Moreover, States may obtain the right to a specific court by agreeing on a founding treaty or other relevant instruments of the court. For example, a State obtains the right to have recourse to the ICJ by ratifying the Charter of the United Nations.19 Similarly, a State obtains the right to submit disputes to the International Tribunal for the Law of the Sea (ITLOS) by ratifying or acceding to the United Nations Convention on the Law of the Sea (UNCLOS).20 Once a State obtains the right to a specific international court, it is entitled to initiate the proceedings of the court and present evidence and submissions before the court by using such right as long as the right falls within the scope of jurisdiction of the court, which is defined by an agreement between the disputing parties as well as by the founding treaty or other instruments of the court. When the State initiates the proceedings of the court, the court has the jurisdiction over the State’s claims and is obliged to exercise the jurisdiction as long as all the relevant requirements for jurisdiction are met.21 Failure to exercise the jurisdiction would restrain the right of the disputing parties to the court. However, according to the principle of abuse of process, if a State has the right of access to an international court yet uses it in an abusive way, the court shall refrain from exercising its jurisdiction over the State and its claims.22 In practice, abusive use of the right to an international court may occur at different stages of court proceedings. For example, a State may abuse its right to an international court when it files a case with the court. In such cases, the principle of abuse of process demands that the court refrain from commencing a review of the case. Alternatively, if a State presents evidence and submissions in an abusive way during court proceedings, the court would have to terminate the proceedings. For the purpose of this article, it is important to note that, if the filing of a case by a State is considered abusive, the court would be required to dismiss the case as inadmissible. In other words, the principle of abuse of rights needs to be considered as a question of admissibility rather than one of jurisdiction. Although the distinction between jurisdiction and admissibility is not totally clear,23 the former often implies the competence of a court to review a case while the latter is mostly concerned with the propriety of using the competence.24 The principle of abuse of rights involves questions of admissibility since the principle does not negate the court’s jurisdiction as such, but only prevents the exercise thereof.25 Despite the general acceptance of the principle of abuse of process, it is hardly clear under what circumstances the use of the right to judicial and quasi-judicial procedures constitutes an abuse. While the practice of judicial and quasi-judicial bodies, which will be examined in the remaining part of this section, sheds some light on the meaning of ‘abuse,’ the term by its nature encompasses ambiguity and flexibility, and its specific content can be determined only in connection with the facts of a particular case.26 Nevertheless, it could at least be said that the term ‘abuse of process’ connotes a sense of maliciousness, unreasonableness and arbitrariness.27 Maliciousness is concerned with the subjective intention of an actor. For example, having recourse to an international court with the sole purpose of harassing the defendant would be malicious.28 In the meantime, unreasonableness has a broader scope than maliciousness because it is assessed in light of the impact of an act regardless of the intention of an actor. More specifically, the use of the right to an international court would be considered unreasonable if it harms the interests of the other disputing party, or if it undermines the effectiveness or purpose of the court.29 Arbitrariness is also a broad concept that is often used interchangeably with unreasonableness.30 Thus, for example, having recourse to a specific international court, instead of other competent international courts and tribunals, may be considered unreasonable or arbitrary if the selected court does not serve the applicant’s legitimate interest while it causes significant hardship for the respondent.31 In addition, if a State files a case with an international court without reasonable grounds or in an untimely manner, thereby causing prejudice to the respondent and compromising the proper functioning of the court, the filing of the case would be considered unreasonable or arbitrary.32 (ii) Practice of the ICJ Although neither the ICJ Statute nor the ICJ Rules explicitly provides for the principle of abuse of process, its applicability to the ICJ proceedings is undeniable since it constitutes a ‘general principle[] of law recognized by civilized nations’ under Article 38(1)(c) of the ICJ Statute. Moreover, the Court has the inherent power, and the obligation under certain circumstances, to examine whether a disputing party engages in an abuse of process. In this regard, the Court held in Nuclear Tests that it has inherent power ‘to take such action as may be required … to ensure the observance of the “inherent limitations on the exercise of the judicial function” of the Court, and to “maintain its judicial character.”’33 The inherent power of the Court can be implied from Article 30 of the ICJ Statute, which provides that ‘The Court shall frame rules for carrying out its functions. In particular, it shall lay down rules of procedure.’34 Under certain circumstances, the Court has not only the inherent power but also the obligation to decide not to examine issues before it.35 For example, if reviewing a case were incompatible with its status and functions, it would be precluded from reviewing the case.36 Therefore, if an applicant State files a case in an abusive way, the Court should declare it inadmissible and should refrain from exercising its jurisdiction.37 In the past, the ICJ has examined the respondent’s objection to admissibility based on the principle of abuse of process, without questioning the applicability of the principle. Nevertheless, the Court sets a rather high standard for a claim of an abuse of process, and it has never sustained an objection to admissibility based on abuse of process.38 At least two reasons can explain the Court’s hesitance to declare an abuse of process and the inadmissibility of applications. First, the Court’s hesitance can partly be attributed to disputing parties’ reluctance to bring up an issue of abuse of process in the first place. It is relatively rare that a disputing party alleges an abuse by the other disputing party as a basis for its objection to admissibility. Even in cases where a party raised an issue of abuse, it did so only in passing. The Court does not examine the issue of abuse unless one of the disputing parties raises and argues it,39 perhaps in view of the serious nature of an allegation of abuse. Second, more importantly, the Court seems to consider that it may limit the right of States to access the Court only ‘under extreme circumstances.’40 It should be noted that the principle of abuse of process prevents the exercise of jurisdiction of the Court, which has been established by consensus between the disputing parties, in consideration of potential harms to one of the disputing parties or to the Court.41 It is understood that such consensual jurisdiction should be overridden by general considerations ‘only on account of exceptional circumstances’ where harms resulting from the exercise of jurisdiction is sufficiently clear and serious.42 To put it differently, the determination of abuse requires a careful review of relevant factual circumstances in light of the fact that it would restrain the exercise of the right to the Court that the disputing parties have under the Charter of the United Nations. The fact that the Court has never sustained an objection to admissibility based on an allegation of abuse of process suggests that the alleged abuses have never been so ‘extreme’ or ‘exceptional’ as to render the applications inadmissible. Under what circumstances would the ICJ find that an act of a disputing party constitutes an abuse of process and therefore renders its application inadmissible? In the past, the ICJ examined whether mere untimeliness of the filing of an application, either too-late filing or too-early filing, can constitute an abuse of process. For example, in the Ambatielos case, the respondent claimed that there were undue delay and abuse of the process of the Court in that, although reference of the dispute to the compulsory jurisdiction of the Court has been continuously possible since the 10th December 1926, no such reference took place until the 9th April 1951.43 The ICJ rejected the respondent’s claim, stating that it did not consider that the applicant ‘did anything improper in instituting proceedings against the United Kingdom on April 9th, 1951, in conformity with the relevant provisions of the Statute and Rules of Court.’44 In the case of Right of Passage, the respondent claimed that the application violated the reciprocal right of the respondent under Article 36(2) of the ICJ Statute and constituted an abuse of process because it was filed only a few days after the applicant’s declaration under the provision.45 The ICJ rejected the claim, stating that the ICJ ‘Statute does not prescribe any interval between the deposit’ of a declaration under Article 36(2) and the filing of an application, and that any delay in the receipt of the declaration did not deprive the respondent of any right of reciprocity under the provision so as to constitute an abuse of process.46 The findings in the above cases suggest that an untimely filing of an application does not normally constitute an abuse of process because there is no rule prescribing the timing of filing. In fact, the Court is generally reluctant to declare a certain conduct or the lack thereof as an abuse unless there is an explicit provision requiring or prohibiting such a conduct. For example, in Land and Maritime Boundary between Cameroon and Nigeria, the respondent raised an objection to the Court’s jurisdiction, claiming that the applicant infringed the principle of good faith and abused the system instituted by Article 36(1) of the ICJ Statute, by not informing the respondent of its intention to accept the Court’s jurisdiction and file an application.47 However, the Court rejected the objection, stating that ‘[t]here is no specific obligation in international law for States to inform other States parties to the Statute that they intend to subscribe or have subscribed to the Optional Clause.’48 According to the Court, although the principle of good faith is ‘one of the basic principles governing the creation and performance of legal obligations … , it is not in itself a source of obligation where none would otherwise exist.’49 It should be added that, while the Court has never found that the untimely filing of an application constituted an abuse of process, it has implied that such filing might constitute an abuse of process if it causes prejudice to the respondent under certain circumstances. For example, in Phosphate Lands in Nauru, the Court stated that it ‘recognizes that, even in the absence of any applicable treaty provision, delay on the part of a claimant State may render an application inadmissible’ in certain circumstances.50 It further noted that ‘it will be for the Court, in due time, to ensure that [the applicant’s] delay in seising it will in no way cause prejudice to [the respondent] with regard to both the establishment of the facts and the determination of the content of the applicable law.’51 While untimely filing is the only factor that the Court has examined so far as a potential source for an abuse of process, there may be other factors that render an act of a disputing party an abuse. For example, an application to the Court by a State contrary to its commitment to use another dispute settlement procedure may be considered an abusive use of the right to the Court.52 In this regard, in Border and Transborder Armed Actions, the respondent argued that the applicant was precluded by the principle of good faith from initiating the ICJ procedure because it had entered into a commitment to use another dispute settlement procedure. Although the ICJ did not directly examine the question of good faith because it rejected the respondent’s argument on a factual basis, it did not deny the possibility that that filing of an application with the ICJ in contradiction to a previous commitment would violate the principle of good faith and therefore be declared inadmissible.53 Judicial propriety is another factor that may be taken into account in determining whether an application constitutes an abuse of process. For example, in Northern Cameroons, the Court stated that it ‘is not compelled in every case to exercise [its] jurisdiction’ because ‘[t]here are inherent limitations on the exercise of the judicial function.’54 In its view, the Court ‘must be the guardian of the Court’s judicial integrity’55 and ‘must discharge the duty … to safeguard the judicial function.’56 The Court dismissed the application, considering that the circumstances of the case had ‘rendered any adjudication devoid of purpose’ so that ‘for the Court to proceed further in the case would not … be a proper discharge of its duties.’57 It could be drawn from this finding that an application asking the Court to make a judicially improper review constitutes an abuse of process. B. Abuse of Process under Treaty Provisions The constitutive instruments of some judicial and quasi-judicial bodies explicitly provide that a claim constituting an abuse of process shall be inadmissible. While these bodies rarely admit that claims constitute an abuse of process, their practice suggests, at least to some extent, under what circumstances a claim is regarded as an ‘abuse.’ First, Article 294(1) of UNCLOS provides that a court or tribunal ‘shall determine at the request of a party, or may determine proprio motu, whether the claim constitutes an abuse of legal process,’ and that ‘[i]f the court or tribunal determines that the claim constitutes an abuse of legal process … , it shall take no further action in the case.’58 The provision is considered a ‘procedural safeguard’ against abusive use of the dispute settlement procedures under UNCLOS.59 However, there have been no cases where claims were found to constitute an abuse of legal process under the provision. For example, in Barbados v Trinidad and Tobago, the Tribunal found that ‘the unilateral invocation of the arbitration procedure cannot by itself be regarded as … an abuse of right contrary to general international law’ because it is a ‘straightforward exercise of the right conferred by the [UNCLOS], in the manner there envisaged.’60 Moreover, in Philippines v China, the Tribunal noted the ‘serious consequences of a finding of abuse of process’ under Article 294, and stated that the procedure under the provision is triggered ‘in only the most blatant cases of abuse or harassment.’61 Second, a similar provision is incorporated in the Optional Protocol to the ICCPR, according to which the Human Rights Committee receives and considers communications from individuals claiming to be victims of violations of any of the rights set forth in the ICCPR. Having defined in Articles 1 and 2 the scope of and conditions for the competence of the Committee, the Optional Protocol provides in Article 3 that ‘[t]he Committee shall consider inadmissible any communication … which it considers to be an abuse of the right of submission of such communications ….’ Thus, the Committee is required to refrain from reviewing a communication constituting an ‘abuse’ even if the communication falls within the scope of its competence. While the provision does not explicitly mention under what circumstances a communication is considered an abuse of the right of submission, the drafting history suggests that it was incorporated in response to a view that the Committee should be allowed to treat an unreasonable delay in the submission of a communication as an abuse of the right of submission.62 The concern may have been that an excessive delay in submission makes it difficult for the Committee to conduct a proper review based on sufficient evidence. Moreover, it may have been considered that looking back and reviewing a State’s conduct after a long period of silence could jeopardize the stability of legal orders. Although there have been several cases where a State party alleged that the late filing of a communication constituted an abuse under Article 3, the Committee upheld such an allegation only in a few of them. For example, in Gobin v Mauritius, the Committee noted that ‘there are no fixed time limits for submission of communications under the Optional Protocol and that mere delay in submission does not of itself involve abuse of the rights of communication.’63 That said, the Committee concluded that the communication in this case should be regarded as an abuse under Article 3 because the alleged violation by the State party took place at periodic elections held five years before the submission of the communication and no convincing explanation in justification of the delay was provided.64 In Serna, the Committee followed the approach taken in Gobin v Mauritius, stating that ‘the period of time elapsing before [the] submission, other than in exceptional circumstances, does not in itself constitute an abuse of the right to submit a communication.’65 The Committee further stated that an abuse may be found ‘where an exceptionally long period of time has elapsed before the submission of the communication without sufficient justification,’ and that ‘[i]n determining what constitutes an excessive delay, each case must be decided on its own merits.’66 In accordance with this view, while the communication in this case was submitted 16 years after the alleged violation by the State party arose, the Committee concluded that the delay did not constitute an abuse because the violation still persisted at the time of the submission and the authors had filed numerous legal and administrative complaints during those 16 years without success.67 The late filing of a communication is not the only reason that has been invoked as an abuse of process. For example, in Serna, the State party claimed that the ‘communication amounted to an abuse of the right to submit communications, inasmuch as the authors had deliberately submitted unclear information to the Committee.’68 However, the Committee found that the submitted information did not contain misleading elements and therefore did not constitute an abuse.69 Third, a provision similar to Article 3 of the Optional Protocol is also incorporated in the ECHR. Article 35(3)(a) of the ECHR provides that the European Court of Human Rights (ECtHR) ‘shall declare inadmissible any individual application submitted under Article 34 if it considers that … the application is … an abuse of the right of individual application.’ According to a guide of the ECtHR, any conduct of an applicant that is manifestly contrary to the purpose of the right of individual application as provided for in the Convention and impedes the proper functioning of the Court or the proper conduct of the proceedings before it constitutes an abuse of the right of application.70 The guide enumerates ‘five typical categories’ of abuse: misleading information; use of offensive language; violation of the obligation to keep friendly-settlement proceedings confidential; application manifestly vexatious or devoid of any real purpose; and all other cases that cannot be listed exhaustively.71 It is interesting to note that the guide considers not only the existence of harm to the defendant, ie, a State party but also the existence of harm to the purpose and proper functioning of the ECtHR as criteria for abuse of process. In practice, the ECtHR rarely dismisses applications on the ground of abuse.72 For example, in Bestry v Poland, the ECtHR first suggested that ‘[i]ncomplete and therefore misleading information may also amount to abuse of the right of application, especially if the information concerns the very core of the case and no sufficient explanation is given for the failure to disclose that information.’73 That said, the ECtHR concluded that the application in the case did not amount to an abuse because it did not concern ‘the very core of the case.’74 In SL and JL v Croatia, the ECtHR stated that ‘[a]n application may exceptionally be rejected on that ground if, among other things, it is knowingly based on untrue facts … , the most egregious example being applications based on forged documents.’75 However, the ECtHR also insisted that ‘any deliberate attempt [of the applicant] to mislead the Court must be established with sufficient certainty.’76 It concluded that the application was not an abuse because the applicants did not ‘deliberately provide[] false information.’77 Finally, it is worthwhile briefly to mention the practice of the International Criminal Court (ICC), which takes a different approach from the Human Rights Committee and the ECtHR. The Rome Statute of the ICC does not explicitly or implicitly provide that a case may be dismissed as inadmissible based on abuse of process.78 Nevertheless, the Appeals Chamber has noted that [the] doctrine of abuse of process had ab initio a human rights dimension in that the causes for which the power of the Court to stay or discontinue proceedings were largely associated with breaches of the rights of the litigant, the accused in the criminal process, such as delay, illegal or deceitful conduct on the part of the prosecution and violations of the rights of the accused in the process of bringing him/her to justice.79 The Appeals Chamber also acknowledged that Article 21(3) of the Rome Statute ‘requires the exercise of the jurisdiction of the Court in accordance with internationally recognized human rights norms,’80 including, in particular, the right to a fair trial. Based on the above understanding, the Appeals Chamber concluded that where a fair trial becomes impossible and thereby the object of the judicial process is frustrated, the proceedings can be stayed.81 The finding suggests that human rights considerations, in particular a fair trial, could necessitate the application of the principle of abuse of process in international criminal procedures.82 The approach of the ICC is in contrast to that of the Human Rights Committee and the ECtHR, where human rights considerations make them cautious not to uphold lightly abuse of process allegations. It can also be implied that the principle of abuse of process should be applied differently in light of the nature of a judicial or quasi-judicial body and that of applicable substantive law. III. ABUSE OF PROCESS IN INVESTMENT ARBITRATION: PAST This section first discusses the applicability of the principle of abuse of process in investment arbitration, and points out that a particular aspect of the principle comes into play with respect to the initiation of investment arbitral proceedings. It then analyzes past investment arbitration decisions concerning the principle of abuse of process, including Philip Morris Asia. A. General Considerations First of all, investment arbitral tribunals have the obligation to decide cases in accordance with applicable law,83 and it is generally understood that applicable law in treaty-based investment arbitration includes rules of international law.84 In many cases, the parties explicitly agree or tribunals explicitly decide that relevant rules of international law, together with relevant investment agreements, are applicable to investment arbitration. Even if they do not explicitly do so, the parties and tribunals acknowledge, by implication, that at least some rules of international law apply to investment arbitration, by agreeing that arbitration is to be conducted under an investment agreement. For example, the rules of interpretation under the VCLT and customary international law inevitably apply to the interpretation of an applicable investment agreement even if the parties do not explicitly agree to the application of such rules. More importantly for the purpose of this article, rights under investment agreement are necessarily subject to limitations under rules of international law. Given that an investor’s right to have recourse to investment arbitration is conferred by international law, such right is inherently limited by international law including the principle of abuse of process.85 In this regard, the Tribunal in Abaclat v Argentina stated that ‘[t]he theory of abuse of rights is an expression of the more general principle of good faith’ and that ‘[t]he principle of good faith is a fundamental principle of international law, as well as investment law.’86 The Tribunal further stated that ‘the theory of abuse of rights is, in principle, applicable to ICSID proceedings and has, in fact, been previously applied by several ICSID and non-ICSID tribunals in investment cases.’87 Moreover, the Tribunal in Phoenix Action v Czech Republic noted that ‘[n]obody shall abuse the rights granted by treaties, and more generally, every rule of law includes an implied clause that it should not be abused.’88 The fact that the principle of abuse of process, as a general principle of law, is by nature a common principle of domestic law of civilized nations further confirms the applicability of the principle to investment arbitration. In addition, it is unquestionable that investment arbitral tribunals have inherent powers to decide procedural questions, including that of abuse of process.89 For example, Rule 19 of the International Centre for Settlement of Investment Disputes (ICSID) Rules of Procedure for Arbitration Proceedings (Arbitration Rules) provides that a ‘[t]ribunal shall make the orders required for the conduct of the proceeding.’ Similarly, Article 17(1) of the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules 2010 provides that an ‘arbitral tribunal may conduct the arbitration in such manner as it considers appropriate, provided that the parties are treated with equality and that at an appropriate stage of the proceedings each party is given a reasonable opportunity of presenting its case.’ In practice, although several tribunals have confirmed the applicability of the principle of abuse of process to investment arbitration, they are generally cautious not to lightly accept an objection based on the principle. For example, the Tribunal in Flemingo v Poland acknowledged that the principle of abuse of process could be a ‘mechanism[] to avoid parallel proceedings,’ but did not uphold the respondent’s objection to jurisdiction based on the principle because, according to the Tribunal, the mere fact that, as in this case, ‘both a controlling shareholder and a controlling shareholder of the former [gave] notice of separate claims under respective bilateral investment treaties against the same host State for the same subject-matter, when one of them does not pursue its claim’ ‘cannot by itself constitute an abuse of’ process.90 Similarly, the Tribunal in Lauder v Czech Republic found that ‘there [was] no abuse of process in the multiplicity of proceedings initiated by’ the claimant because ‘[t]he existence of numerous parallel proceedings [did] in no way affect the Arbitral Tribunal’s authority and effectiveness, and [did] not undermine the Parties’ rights’ while ‘the present proceedings [were] the only place where the Parties’ rights under the [applicable investment agreement] can be protected.’91 In the meantime, in Ampal-American v Egypt, the Tribunal noted that ‘while the same party in interest might reasonably seek to protect its claim in two fora where the jurisdiction of each tribunal is unclear, once jurisdiction is otherwise confirmed, it would crystallize in an abuse of process for in substance the same claim is to be pursued on the merits before two tribunals.’92 The Tribunal concluded that the ‘abuse of process constituted by the double pursuit’ in parallel proceedings had ‘crystalized’ in the case.93 The overall hesitance of investment arbitral tribunals to uphold objections based on the principle of abuse of process is understandable considering the similar hesitance of the ICJ and other judicial and quasi-judicial bodies, as discussed in the previous section. Nevertheless, it is important to highlight that, notwithstanding the general reluctance of investment arbitral tribunals, objections based on the principle of abuse of process have been upheld by several tribunals with respect to the initiation of investment arbitral proceedings. In fact, most of the allegations of abuse of process that have been made in investment arbitration concerned the initiation of arbitral proceedings. As will be discussed below, there are important differences between the application of the principle of abuse of process with respect to the initiation of investment arbitral proceedings and the application of the same principle by the ICJ and other international judicial and quasi-judicial bodies. B. Important Differences from Other International Judicial and Quasi-Judicial Bodies Before pointing out the differences, it should be recalled that, in investment arbitration, it is almost always investors that initiate arbitral proceedings, and their right to investment arbitration is almost always provided in investment agreements, apart from limited exceptions. In addition, these agreements do not identify specific investors that have the right to investment arbitration, but rather provide general criteria that determine which investors and investment can have the right to investment arbitration. As a result, an investor that did not have the right to investment arbitration under an investment agreement at the time of the ratification of the agreement could acquire such right after the ratification of the agreement if it subsequently meets the criteria. A closer look of past investment arbitral decisions reveals that an allegation of abuse of process with respect to the initiation of arbitral proceedings concerns the allegedly abusive acquisition of the right to investment arbitration by a claimant investor after the ratification of an investment agreement—and often immediately before the initiation of arbitral proceedings. Then, a question arises as to whether the abusive acquisition of the right to investment arbitration or, more accurately, an abusive attempt to acquire the right, can be properly regarded as abuse of process. As indicated in the beginning of Section II.A., the principle of abuse of process presupposes the existence of the right to judicial or quasi-judicial procedures. If there exists no such right, there is no abuse of process. Thus, if there is no right to investment arbitration, there can be no question of abuse of process. This might suggest that the investment arbitral tribunals, which examined the question of an abusive attempt to acquire the right to investment arbitration as that of abuse of process, were wrong because the question concerns whether such right exists and not how the existing right is used. In other words, an investor claimant attempting to acquire the right to investment arbitration in an abusive way cannot acquire such a right. Having said that, an investment arbitral tribunal may be justified in examining an abusive attempt to acquire the right to investment arbitration as a question of abuse of process, if it distinguishes the right to investment arbitral proceedings given to a specific investor and the general right to investment arbitration provided in an investment agreement. According to the distinction, abuse of process with respect to the initiation of investment arbitral proceedings concerns not the right to investment arbitration that is acquired by the specific claimant investor but rather the right to investment arbitration that is generally provided in an investment agreement. In other words, an investor’s abusive attempt to acquire its own right to investment arbitration is the abusive use of the general right to investment arbitration under an investment agreement. Thus, although an abusive attempt does not grant a specific investor the right to investment arbitration, it does not negate the existence of the general right to investment arbitration under the agreement, and therefore, there can be a question of abuse of process in the sense that a claimant investor may use such general right in an abusive way. The application of abuse of process in investment arbitration, as a question of an abusive use of the general right to investment arbitration, entails two important differences from the application of the principle in other international judicial and quasi-judicial bodies. First, this particular type of application of abuse of process should be examined not as a question of admissibility but rather as that of jurisdiction. In other international judicial and quasi-judicial bodies, the principle of abuse of process is examined as a question of admissibility because the principle presupposes the existence of the right to international judicial and quasi-judicial bodies of a specific applicant and, consequently, the existence of the jurisdiction of these bodies over the applicant and its claims, as discussed in the previous section.94 For the ICJ, for example, a question of abuse of process concerns whether the applicant uses its right to the ICJ in an abusive way and whether, as a consequence, the ICJ should refrain from exercising the jurisdiction that it has over the applicant and its claims. On the other hand, the abusive attempt to acquire the right to investment arbitration does not accord such right to a specific claimant investor, and therefore, a tribunal does not have jurisdiction over the investor and its claims. While the general right to investment arbitration does exist under an investment agreement, regardless of the abusive conduct of the claimant, that does not mean that the tribunal has jurisdiction over the claimant. Therefore, a question for the tribunal is whether the claimant abuses the general right to investment arbitration in an attempt to acquire its own right to investment arbitration over its specific claims, and whether, as a consequence, it fails to establish the jurisdiction of an investment arbitral tribunal over its claims.95 Although the distinction between jurisdiction and admissibility is not consistently applied by investment arbitral tribunals, the two are conceptually different and have different consequences.96 Thus, it is not appropriate to examine this particular type of abuse of process as a question of admissibility. In relation to the first point, it is interesting to note the unique distinction made by the Tribunal in Abaclat between ‘material good faith’ and ‘procedural good faith.’ According to the Tribunal, the first kind of good faith is concerned with ‘the context and the way in which the investment was made, and for which the investor seeks protection,’ while the second kind is concerned with ‘the context and the way in which a party, usually the investor, initiates its treaty claim seeking protection for its investment.’97 The issue of abusive attempt to acquire the right involves the first kind because, strictly speaking, such attempt does not concern how an investor initiates arbitral proceedings, but rather how the investor makes investment in order to obtain the right to initiate investment arbitral proceedings. The Tribunal in Abaclat rightly suggested that the first kind of good faith should be examined as a question of jurisdiction or the legality of investment.98 Second, considering the particular nature of the principle of abuse of process with respect to the initiation of investment arbitral proceedings, it may not be appropriate to apply in investment arbitration the same criteria for abuse that is used by other international judicial and quasi-judicial bodies. On the one hand, the ICJ and other international judicial and quasi-judicial bodies have been very cautious in determining an abuse of process in the light that a determination of such an abuse would restrain the exercise of the right that States have. Moreover, these bodies take into account factors such as the untimeliness of filing and the submission of misleading information in making such determinations. On the other hand, the question for investment arbitral tribunals being the existence of the right of a specific claimant investor rather than its use, the caution exercised by the ICJ and other international judicial and quasi-judicial bodies may not be needed for investment arbitral tribunals. It should be recalled in this regard that, unlike in the ICJ and other international judicial and quasi-judicial bodies, abuse of process in investment arbitration would not restrain the exercise of the existing right. Additionally, many of the factors considered by other judicial and quasi-judicial bodies in examining the issue of abuse of process may not be relevant to investment arbitral tribunals as these factors presuppose the existence of jurisdiction. For example, the untimeliness of filing or the submission of misleading information would not be relevant unless the jurisdiction of an international court properly exists. That said, a threshold of abuse should not be lowered from the one that is adopted by other international judicial and quasi-judicial bodies as long as an investment arbitral tribunal applies the principle of abuse of process. Although applications of an international law principle may vary depending on fields or forums, the core concept should remain consistent throughout every field of international law.99 Thus, the determination of an abuse of process in investment arbitration should require the examination of maliciousness, unreasonableness and arbitrariness on the side of the claimant. The following two subsections examine how past tribunals have applied the principle of abuse of process with respect to an allegedly abusive attempt to acquire the right to investment arbitration. C. Philip Morris Asia It is worthwhile to start with a review of the factual circumstances and legal findings of Philip Morris Asia. The case concerns Australia’s Plain Packaging measures, substantive issues of which have already been discussed elsewhere100 and, therefore, will not be addressed in this article. The focus of the Award (and of this article) is on the admissibility of the claims, which was contested by the respondent on the basis of the principle of abuse of process. The claimant, Philip Morris Asia is a limited liability company incorporated under the laws of Hong Kong and the regional headquarters for the Asia region of the Philip Morris International group of companies (PMI Group).101 The claimant controls and manages business decisions of Philip Morris Australia and its wholly owned subsidiary, PML, which operates the PMI Group’s sales of tobacco in Australia.102 Both Philip Morris Australia and PML had been owned by Philip Morris Brands Sàrl (‘Philip Morris Brands Sàrl’), a Swiss branch of the PMI Group,103 but were transferred to Philip Morris Asia, the claimant in the case, in February 2011, in the course of the global restructuring of the PMI Group, which began in early September 2010.104 According to the claimant, the objective of the restructuring was ‘to reduce costs and improve efficiencies by streamlining its legal entity structure, rationalizing business process, centralising activities, and developing shared services,’ and to address ‘the political risk that PMI was facing in several countries including Australia with the proliferation of new regulations on packaging and marketing of tobacco products.’105 Through the restructuring, Philip Morris Asia obtained access to investment arbitration under the Australia-Hong Kong BIT with respect to its investment in Philip Morris Australia and PML. It should be noted here that Philip Morris Brands Sàrl would not have access to investment arbitration with respect to Philip Morris Australia and PML even if they remained in its ownership because Australia does not have an investment agreement with Switzerland, and, therefore, Swiss investors have no legal basis to have recourse to investment arbitration against Australia. It can therefore be reasonably assumed that at least one of the motives of the transfer from Philip Morris Brands Sàrl to Philip Morris Asia was to obtain access to investment arbitration under the BIT. In the arbitral proceedings, Australia, the respondent, raised objections to the jurisdiction of the tribunal and the admissibility of the claimant’s claims. Regarding the admissibility, it argued that ‘the doctrine of abuse of rights forbids the Claimant from exercising the right’ to have recourse to investor-state arbitration under the investment agreement.106 In response, Philip Morris Asia, the claimant, contended that ‘the scope and content of the abuse of rights doctrine is uncertain and exceptionally applied’ (footnote omitted), but did not deny the applicability of the doctrine.107 The difference between the parties was the criteria for the application of the principle of abuse of rights. On one hand, the respondent asserted that a ‘foreseeability test’ should be applied. In its view, ‘the manipulation of corporate nationality at a time when the dispute is in existence or is foreseeable to a sufficient degree’ constitutes an abuse of rights.108 More specifically, the respondent argued that gaining protection under an investment agreement with the knowledge of the risk of a ‘specific future dispute’ was ‘unfair.’109 On the other hand, the claimant contested the appropriateness of the foreseeability test.110 In the claimant’s view, the respondent has to prove bad faith on the claimant’s part to demonstrate an abuse of rights, and the standard of ‘abusiveness’ is ‘met only in exceedingly rare circumstances involving egregious conduct akin to fraud,’ such as the use of forged and fraudulent documents as evidence of a claimant’s status as investor and the ‘internationalization’ of domestic disputes that had already accrued.111 Having rejected the respondent’s jurisdictional objections, the Tribunal examined whether the claimant’s initiation of the arbitral proceedings under the BIT constituted an abuse of right and therefore rendered the claims inadmissible. First, the Tribunal made a distinction between the situation where ‘an investor who is not protected by an investment treaty restructures its investment in such a fashion as to fall within the scope of protection of a treaty in view of a specific foreseeable dispute’ and the situation where an investor does the same, but ‘in respect of an existing dispute’.112 According to the Tribunal, a tribunal would lack jurisdiction ratione temporis in the latter case,113 while it would have jurisdiction in the former. Second, the Tribunal reviewed past investment arbitration decisions concerning the abuse of process (abuse of rights), and concluded that: the initiation of a treaty-based investor-State arbitration constitutes an abuse of rights (or an abuse of process, the rights abused being procedural in nature) when an investor has changed its corporate structure to gain the protection of an investment treaty at a point in time when a specific dispute was foreseeable.114 If a tribunal determines that an investor is abusing its right, it would have to declare the investor’s claims inadmissible and refrain from exercising the jurisdiction that the tribunal has over them. Third, with respect to a test to determine whether a specific dispute is foreseeable or not, the Tribunal suggested that ‘a dispute is foreseeable when there is a reasonable prospect … that a measure which may give rise to a treaty claim will materialize.’115 Finally, it found, in view of the facts of the case, that ‘it was reasonably foreseeable [at the time of the restructuring] that [the Plain Packaging measures] would eventually be enacted and, consequently, a dispute would arise.’116 The Tribunal added that the ‘main and determinative, if not sole, reason for the restructuring was the intention to bring a claim under’ the BIT, and that the claimant failed to prove other reasons for the restructuring.117 The Tribunal concluded that ‘the initiation of this arbitration constitute[d] an abuse of rights,’ and that it was ‘precluded from exercising jurisdiction over this dispute’ as the claims were inadmissible.118 Two remarks can be made about the findings in Philip Morris Asia. First, the Tribunal in the case examined the issue of abuse of process as a question of admissibility.119 The Tribunal might have sought to follow the approach of other international judicial and quasi-judicial bodies, which have examined the issue of abuse of process as a question of admissibility. However, the analogy is not totally accurate considering that the nature of abuse of process objections with respect to the initiation of investment arbitral proceedings is different from that of abuse of process objections in other international judicial and quasi-judicial procedures, as this article has already pointed out.120 On one hand, an international judicial or quasi-judicial body applies the principle of abuse of process in examining whether it should refrain from exercising the jurisdiction that it has over an applicant and its claims. On the other hand, the question for the Tribunal in Philip Morris Asia was whether the attempt of the claimant to acquire the right to investment arbitration under the BIT was abusive and therefore must fail. If an investor fails to acquire the right to investment arbitration, an investment arbitral tribunal cannot have jurisdiction over the investor and its investment. In short, the Tribunal in Philip Morris Asia should have examined the issue of abuse of process as a question of jurisdiction. Second, in determining whether the claimant did, in fact, act in an abusive manner, the Tribunal in Philip Morris Asia applied the foreseeability test, which is not used in any of the international judicial and quasi-judicial bodies discussed in this article. Although the mere lack of practice in other judicial and quasi-judicial bodies does not necessarily negate the value of the test in investment arbitration, especially considering the particular nature of abuse of process objections with respect to the initiation of investment arbitral proceedings, the appropriateness of the test is not without question. In particular, it should be recalled that the term abuse is understood to connote a sense of maliciousness, unreasonableness, and arbitrariness.121 Whether an investor’s attempt to acquire the right to investment arbitration with respect to a foreseeable dispute entails maliciousness, unreasonableness and arbitrariness would require a comprehensive analysis of the facts of a particular case. In other words, the mere fact that an investor attempts to acquire the right to investment arbitration with respect to a foreseeable dispute would not suffice to establish the maliciousness, unreasonableness, and arbitrariness of the investor. In drawing its conclusion that the foreseeability test should be applied, the Tribunal in Philip Morris Asia relied exclusively on past investment arbitration decisions. While the exclusive reliance on investment arbitral decisions is perhaps justifiable in light of the limited relevance of the practice of other international judicial and quasi-judicial bodies, the foreseeability test is far from an established criterion even in investment arbitration, as will be discussed in the following subsection. D. Other Investment Arbitration Decisions As acknowledged by the Tribunal in Philip Morris Asia,122 this is not the first investment arbitration case to address the abuse of process, and the Tribunal in Philip Morris Asia heavily and exclusively relied on past investment arbitration decisions on this issue. Although some of the decisions have already been discussed elsewhere,123 this section reviews them from a different perspective to highlight the following two points. First, many of the investment arbitration cases cited by the Tribunal and the parties in Philip Morris Asia addressed the issue of abuse not as a question of admissibility but as that of jurisdiction. More specifically, the question for the tribunals in these cases was whether the ‘investment’ or the ‘investor’ at issue was protected by the relevant investment agreements and arbitration rules and, therefore, fell within the jurisdiction of the tribunals. Second, while a few of the investment arbitral cases cited by the Tribunal and the parties in Philip Morris Asia applied the foreseeability test, they also took into account broader factual circumstances. In particular, the tribunals in these cases examined the conduct of the claimant to determine whether it exceeded a threshold of maliciousness, unreasonableness and arbitrariness. (i) Jurisdiction ratione temporis The review starts with Venezuela Holdings v Venezuela and Tidewater v Venezuela, which were relied on by the Tribunal in Philip Morris Asia. The question in these cases was whether the initiation of the arbitral proceedings constituted an abuse because the claimants obtained access to investment arbitration with respect to pre-existing disputes. In other words, in light of the well-established jurisprudence that a tribunal’s jurisdiction ratione temporis is limited to a dispute that arises after the claimant obtains protection under a relevant investment agreement, the tribunals examined whether the disputes before them had existed before the claimants obtained such protection. For example, in Venezuela Holdings, the Tribunal observed that ‘in all systems of law, whether domestic or international, there are concepts framed in order to avoid misuse of the law’ or ‘abuse of right,’124 and examined whether the restructuring of the claimant investor was ‘deemed as an abuse of right and as a consequence whether or not it has jurisdiction under’ the investment agreement.125 More specifically, the main issue for the Tribunal was whether the dispute existed at the time the claimant obtained access to investment arbitration through restructuring. In the tribunal’s view, while restructuring aimed at gaining access to investment arbitration under an investment agreement was ‘perfectly legitimate’ with respect to future disputes, restructuring with the same objective with respect to pre-existing disputes ‘would constitute … an abusive manipulation of the system of international investment protection under the ICSID Convention and the BIT.’126 In this case, although the Tribunal did not dismiss the claimant’s claims in toto as an abuse of rights, it delimited its jurisdiction only to include any dispute arising after the date of restructuring.127 Similarly, the Tribunal in Tidewater insisted on the distinction between future disputes and pre-existing disputes. According to the Tribunal, ‘it is a perfectly legitimate goal, and no abuse of an investment protection treaty regime, for an investor to seek to protect itself from the general risk of future disputes with a host state [through restructuring]. But the same is not the case in relation to preexisting disputes between the specific investor and the state.’128 Moreover, there was an agreement between the parties in the case that the claimants ‘could not have expected to obtain protection for pre-existing disputes; they expected to obtain prospective protection only against any actions in breach of the treaty the Respondent might take after restructuring.’129 The Tribunal rejected the respondent’s objection to jurisdiction based on the fact that the dispute did not exist at the time of restructuring.130 Thus, according to these tribunals, jurisdiction ratione temporis of an investment arbitral tribunal is limited to future disputes, and an attempt to extend the jurisdiction to pre-existing disputes must fail. Moreover, the Tribunal in Venezuela Holdings specifically suggested that a claimant investor’s attempt to extend the right to investment arbitration over a pre-existing dispute would constitute an abuse of rights. Although the conclusion of the tribunals to exclude pre-existing disputes from the scope of jurisdiction ratione temporis is justifiable, the tribunals did not explicitly explain why the claimants’ initiation of investment arbitration with respect to pre-existing disputes was considered an abuse. If the tribunals were to apply the principle of abuse of process, they should have examined whether the claimants’ acts entailed maliciousness, unreasonableness and arbitrariness. Having said that, considering that the use of investment arbitration with respect to pre-existing disputes is not what is intended under investment agreements, the initiation of investment arbitration with respect to such disputes may well be regarded malicious, unreasonable and arbitrary. However, a final determination of maliciousness, unreasonableness, and arbitrariness needs to be based on a careful review of factual circumstances.131 In any event, the tribunals could have reached the same conclusion without applying the principle of abuse of process because the scope of jurisdiction ratione temporis is limited as a corollary of the principle of non-retroactivity of treaties.132 (ii) Jurisdiction ratione materiae Phoenix Action, Cementownia v Turkey, and ST-AD v Bulgaria were cited by the parties’ submissions in Philip Morris Asia, although they were not directly relied upon by the Tribunal in the case. As discussed below, unlike Philip Morris Asia, the tribunals in Phoenix Action, Cementownia, and ST-AD addressed the issue of an abuse of process in the context of examining whether the claimants’ investments were ‘protected investment’ under relevant investment agreements and arbitral rules and therefore fell within the scope of jurisdiction ratione materiae. The Tribunal in Phoenix Action first noted that the purpose of protection under the ICSID arbitration was to protect legal and bona fide investments.133 The tribunal then examined whether the claimant made bona fide investments that could fall within the jurisdiction ratione materiae. The Tribunal answered in the negative because the claimant was well aware of the difficult circumstances of the investment at the time of acquisition, and had no business plan or activity regarding its investment except to gain access to ICSID arbitration by transforming a pre-existing domestic dispute to an international dispute.134 The Tribunal found that the initiation of the proceedings was ‘an abuse of the system of international ICSID investment arbitration’ and that ‘to accept jurisdiction in this case would go against the basic objectives underlying the ICSID convention as well as those of bilateral investment treaties.’135 Based on these findings, the Tribunal concluded that the claimant’s investment did ‘not qualify as a protected investment’ under the ICSID Convention and the relevant investment agreement.136 The Tribunal in Cementownia took a similar approach to the Phoenix Action tribunal. The Tribunal first acknowledged the trend of other tribunals that an investment for the sole purpose of gaining access to international jurisdiction was not ‘a bona fide transaction’ and was not protected by investment arbitration.137 The Tribunal then found that the claimant ‘intentionally and in bad faith abused the arbitration’ in view of the facts that the claimant ‘fabricated’ a transaction to gain access to investment arbitration and that it was also ‘guilty of procedural misconduct’ during the arbitral proceedings which caused ‘excessive delays.’138 The Tribunal in ST-AD confirmed that the approach of Phoenix Action was applicable to arbitral proceedings under the UNCITRAL Arbitration Rules in examining the respondent’s ‘claim of bad faith in the initiation of the arbitration.’139 Having noted that the ‘essential purpose of the Claimant’s investment [ie, acquisition of shares of domestic companies in the respondent] was for it to gain access to international jurisdiction,’ the Tribunal found that the claimant’s initiation of the arbitral proceedings was ‘an abuse of the system of international investment arbitration,’ and that ‘to accept jurisdiction in this case would go against the basic objectives underlying bilateral investment treaties.’140 It concluded that the investment agreement mechanism ‘was not designed to protect’ the claimant’s investment, which was ‘domestic investments disguised as international investments or domestic disputes repackaged as international disputes for the sole purpose of gaining access to international arbitration.’141 The tribunals in the above three cases examined whether the claimants’ investments were ‘protected’ under relevant investment agreements and arbitration rules and, therefore, fell within the jurisdiction ratione materiae. According to these tribunals, what is protected under the agreements is bona fide or good faith investment, which do not include the fabrication of international investment from domestic investment in an attempt to acquire the right to investment arbitration.142 Their findings are consistent with the increasing trend in investment arbitration practice according to which investment agreements protect only good faith investment.143 It could be said that the limitation of protection to good faith investment has the same effect as the principle of abuse of process in that both exclude malicious, unreasonable or arbitrary investments from the scope of arbitration. In fact, if the scope of the good faith requirement and that of the principle of abuse of process are identical, investment arbitral tribunals would not need to apply the latter. For example, the issue of jurisdiction over a foreseeable dispute comes down to whether a claimant investor’s attempt to acquire the right to investment arbitration with respect to such dispute is malicious, unreasonable and arbitrary and therefore does not meet the good faith requirement. (iii) Jurisdiction ratione personae There are also a few cases where the respondent claimed that the claimant was not a ‘protected investor’ under a relevant investment agreement and arbitration rules, and was, therefore, not covered by a tribunal’s jurisdiction ratione personae, although such claims proved unsuccessful. For example, in Tokios Tokelės v Ukraine, the respondent claimed that the claimant, a Lithuanian entity, was not an ‘investor’ protected by Article 25 of the ICSID Convention because it was ‘owned and controlled predominantly by Ukrainian nationals’ and had ‘no substantial business activities in Lithuania and maintain[ed] its siège social … in Ukraine,’ and therefore that its corporate veil should be ‘pierced.’144 The respondent argued that the claimant was ‘in terms of economic substance, a Ukrainian investor in Lithuania, not a Lithuanian investor in Ukraine,’ and allowing it to pursue international arbitration against its own government ‘would be inconsistent with the object and purpose of the ICSID Convention.’145 Although the Tribunal did not uphold the respondent’s claim, it implied that the corporate veil should be pierced if the claimant’s conduct constituted an ‘abuse of legal personality’ such as concealing its national identity from the respondent and creating an entity for the purpose of gaining access to investment arbitration.146 Moreover, a strong dissent to the decision by the president of the Tribunal took a narrower view of the ‘investor’ under Article 25 of the ICSID Convention. In the president’s view, Article 25, interpreted in light of the object and purpose of the ICSID Convention to protect international investment, requires a review of the economic reality of the claimant-investor, particularly in cases like this one where it is crystal clear that no question of any foreign investment is involved.147 Similarly, in ConocoPhillips v Venezuela, the respondent claimed that a corporation of convenience with no business purpose but to have access to ICSID arbitration was an ‘abuse of corporate form and blatant treaty or forum shopping.’148 The Tribunal acknowledged that ‘[t]here is jurisdiction only if the parties to the dispute have each consented and throughout the process each is treated on an equal footing,’ and that the ‘equality of position in the present context is … a further factor supporting the growing body of decisions placing some limits on the investor’s choice of corporate form ….’149 Eventually, the Tribunal rejected the respondent’s objection to jurisdiction, stating that, while the only purpose of the claimant’s restructuring was to be able to have access to ICSID proceedings, no claim had been in prospect at the times of the restructurings, and the claimants continued to be involved in the investment.150 In general, it is totally reasonable for an investor to organize and reorganize its corporate structure to meet various business needs, including having access to investment arbitration. Accordingly, the corporate structure should not be a reason to deprive an investor of access to investment arbitration. That said, the arbitral decisions on jurisdiction ratione personae suggest, similar to the arbitral decisions involving jurisdiction ratione materiae, that only investors whose corporate structure is organized and reorganized in good faith is protected by investment agreements. Thus, this limitation has the same effect as the principle of abuse of process in that both exclude malicious, unreasonable or arbitrary investors from the scope of investment arbitration. As has already been indicated, as long as arbitral tribunals examine whether a claimant investor is organized in good faith, they would not need to apply the principle of abuse of process. For example, it could be argued that an investor that uses a corporation of convenience with no substantial business activities as a ‘fraudulent device’ to gain access to investment arbitration with respect to foreseeable disputes does not meet the good faith requirement, and therefore is not qualified as an investor ‘protected’ under investment agreements, regardless of the application of the principle of abuse of process.151 (iv) Admissibility/Exercise of jurisdiction The tribunals in Pac Rim v El Salvador, Gremcitel v Peru, and Transglobal Green v Panama took the same approach as the Tribunal in Philip Morris Asia in the sense that they considered that an abuse of process by the claimant would preclude a tribunal from exercising its jurisdiction over the claimant’s claims, although they did not explicitly distinguish between jurisdiction and admissibility.152 They also applied the foreseeability test in determining whether the claimant engaged in an abuse, although they did so more restrictively compared to the tribunal in Philip Morris Asia. For example, the Tribunal in Pac Rim first acknowledged that the approach regarding jurisdiction ratione temporis was ‘materially different from’ the approach regarding abuse of process.153 According to the Tribunal, while it would have jurisdiction ratione temporis over a dispute that existed and continued after the date when the claimant obtained access to investment arbitration by its change of nationality, it would be precluded from exercising such jurisdiction by the principle of abuse of process if the claimant had changed its nationality knowing of an actual or specific future dispute.154 Moreover, it clarified that the claimant’s claims would constitute an abuse of process if the claimant could ‘see an actual dispute or [could] foresee a specific future dispute as a very high probability and not merely as a possible controversy’ at the time of restructuring.155 Despite the similarity of the foreseeability test in this case to the one adopted in Philip Morris Asia, its application in this case was rather restrained. The Tribunal in Pac Rim considered that, although the claimant had been aware of difficulties with the respondent’s measures, it had a reasonable expectation that these difficulties would be removed, and that the claimant was only claiming compensation for the period after its change of nationality.156 The Tribunal rejected the respondent’s objection to jurisdiction based on abuse of process. In Gremcitel, although the Tribunal left open the question of whether abuse of process is an issue of jurisdiction or an admissibility,157 it unequivocally stated that ‘an abuse of process objection must be distinguished from a ratione temporis objection.’158 It further acknowledged that, while ‘an organization or reorganization of a corporate structure designed to obtain investment treaty benefits is not illegitimate per se, including where this is done with a view to shielding the investment from possible future disputes with the host state,’159 ‘a restructuring carried out with the intention to invoke the treaty’s protections at a time when the dispute is foreseeable may constitute an abuse of process depending on the circumstances.’160 Based on this understanding, the Tribunal found that the present dispute was foreseeable at the time of the restructuring, and that the only discernible purpose of the restructuring was to obtain access to investment arbitration under the investment agreement.161 It should be emphasized here, though, that the foreseeability was not the only reason for the Tribunal to find an abuse of process in this case. The Tribunal concluded that the restructuring constituted an abuse of process, in consideration of other circumstances of the case, in particular, the claimants’ another attempt to ‘manufacture’ the Tribunal’s jurisdiction by ‘untrustworthy, if not utterly misleading’ documents.162 The Tribunal in Transglobal Green examined the issue of abuse of process under the heading of ‘jurisdictional objections,’ but the Tribunal stated that ‘the existence of abuse of process is a threshold issue that would bar the exercise of the Tribunal’s jurisdiction even if jurisdiction existed.’163 According to the Tribunal, a determination of whether an abuse of process has occurred had to be made in consideration of all the circumstances of the case, including, for instance, the timing of the purported investment, the timing of the claim, the substance of the transaction, the true nature of the operation, and the degree of foreseeability of the governmental action at the time of restructuring.164 The Tribunal concluded that the claimants abused the international investment treaty system because they started to involve in the investment when it was clear that there was a problem with it only for the purpose of creating ‘artificial international jurisdiction over a pre-existing domestic dispute.’165 Thus, the application of the principle of abuse of process in the above cases is similar to that in the Tribunal in Philip Morris Asia. However, their conclusions that they should refrain from exercising jurisdiction because the claimant engaged in an abuse of process were drawn not exclusively from the fact that the claimants made investment when the dispute was foreseeable but also from other factors. For example, according to the Tribunal in Pac Rim, it would not be an abuse for a claimant investor to have made investment while foreseeing a dispute if it has a reasonable expectation that the dispute would be resolved. In addition, what led the Tribunal in Gremcitel to determine the claimant’s abuse was not only the foreseeability of the dispute but also other circumstances, such as the fact that the claimant submitted untrustworthy documents to it. The consideration of broader factors ensures that only conduct involving maliciousness, unreasonableness and arbitrariness would be considered an ‘abuse.’ Finally, could the initiation of investment arbitration in Philip Morris Asia be considered as abuse in light of the above considerations? First, considering that the Plain Packaging measures had not yet been adopted by the Australian Parliament at the time of the restructuring, it would not have been unreasonable for the claimant, when it obtained access to investment arbitration under the BIT, to consider that the dispute regarding the measures would not crystalize.166 Second, even assuming that the Tribunal was right in that the dispute was foreseeable at the time of the restructuring, this should not end an analysis of the Tribunal. In particular, as the Tribunal itself implied, obtaining access to investment arbitration may not be the sole purpose for the restructuring of the claimant. Moreover, the Tribunal stopped short of analyzing whether the claimant’s attempt to acquire the right to investment arbitration harms the interest of the respondent or the objective of investment arbitration. Overall, it has to be said that the Tribunal's reasoning does not sufficiently establish that the claimant’s act was malicious, unreasonable or arbitrary. IV. ABUSE OF PROCESS IN INVESTMENT ARBITRATION: FUTURE This section discusses whether and how the principle of abuse of process should be applied in investment arbitration in the future. First, should the principle of abuse of process be applied in investment arbitration? The answer is yes. As previously discussed in this article,167 the principle constitutes a general principle of law and therefore applies to investment arbitration conducted under an investment agreement, regardless of an express agreement between the parties as to the applicable law. The right to investment arbitration given to an investor by an investment agreement is inherently subject to limitations under rules and principles of international law. Second, how should the principle be applied in investment arbitration? More specifically, should it be applied separately from the jurisdictional requirements under investment agreements and arbitration rules, or as a part thereof? One option is to include an explicit provision in an investment agreement that specifies that an investor cannot acquire the right to investment arbitration by abusive conduct. It is noteworthy in this regard that Article 8.18(3) of the Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA) provides that ‘an investor may not submit a claim under [the section of CETA on resolution of investment disputes between investors and States] if the investment has been made through … conduct amounting to an abuse of process.’ A similar provision could be inserted in future investment agreements.168 In the meantime, even in the absence of such an explicit provision, the principle of abuse of process could be considered as constituting a part of the jurisdiction requirements under investment agreements. In particular, considering that many investment arbitration tribunals have interpreted the term ‘investment’ under investment agreements as covering only the investment that is made in good faith,169 a malicious, unreasonable or arbitrary attempt to acquire the right to investment arbitration could not fall within the scope of investment that States parties to an investment agreement intend to protect.170 In fact, if the notion that only good faith investment can be protected by international investment agreements is sufficiently shared among tribunals, and the good faith requirement is consistently applied, there would be no need to apply the principle of abuse of process separately from the jurisdictional requirements under investment agreements. Finally, what should be the criteria for determining whether the claimant’s conduct amounts to an abuse? First of all, the approach for the determination should be generally consistent with the approach used in other international judicial and quasi-judicial bodies, given that investment agreements cannot and should not ‘be read and interpreted in isolation from public international law.’171 In particular, the threshold for the application of the principle of abuse of process should be as high as what is adopted in the jurisprudence of other international courts and tribunals, including the ICJ.172 This has been confirmed by several investment arbitral tribunals. For example, the Tribunal in Chevron pointed out that ‘in all legal systems, the doctrine[] of abuse of rights [is] subject to a high threshold’ and ‘[i]t is only in very exceptional circumstances that a holder of a right can nevertheless not raise and enforce the resulting claim.’173 It added that ‘[t]he high threshold also results from the seriousness of a charge of bad faith amounting to abuse of process.’174 The Tribunal in Rompetrol went further to state that the respondent’s objection based on abuse of process was ‘evidently a proposition of a very far-reaching character,’ and that ‘so far-reaching a proposition needs to be backed by some positive authority in the Convention itself, in its negotiating history, or in the case-law under it.’175 The Tribunal also insisted that a determination of abuse requires a close analysis of special circumstances of a particular case.176 Along the line of the above findings, the Tribunal in Philip Morris Asia also recognized that ‘the threshold for finding an abusive initiation of an investment claims is high.’177 That said, the same criteria in other international judicial and quasi-judicial bodies cannot simply be transposed to investment arbitration, considering that the principle of abuse of process is applied in a particular way in investment arbitration. That is, on the one hand, the criteria for the determination of abuse in other international judicial and quasi-judicial bodies concern how the right of an applicant to these bodies is used on the premise that the applicant has such a right and that, as a corollary, these bodies have jurisdiction over the applicant and its claims. Moreover, the determination that the right is used in an abusive way would prevent these bodies from exercising the jurisdiction. For example, the untimely filing of an application that could constitute a basis of abuse of process in the ICJ and the Human Rights Committee relates to how the applicant uses its right to the procedures of the ICJ or the Human Rights Committee on the premise that the applicant has such right. Similarly, the criteria used by the ECtHR, such as the submission of misleading information, use of offensive language, and violation of confidentiality, question the appropriateness of the use of the procedures by an applicant after proceedings have been duly commenced. On the other hand, while the criteria for the determination of abuse in investment arbitration also concern how the right to investment arbitration is used, it is not the right of a specific claimant investor but the right that is generally provided in an investment agreement. In other words, the question of abuse in investment arbitration involves whether a specific claimant investor abuses the general right to investment arbitration under an investment agreement in an attempt to acquire its own specific right to investment arbitration.178 The determination of abuse would negate the existence of the investor’s right as well as the jurisdiction of investment arbitration. Thus, most of the criteria used in other judicial and quasi-judicial bodies that presuppose the existence of jurisdiction cannot be transposed to investment arbitration. Given that the criteria used by other international judicial and quasi-judicial bodies cannot be transposed to investment arbitration, the practices of investment arbitral tribunals would be the only source that could provide guidance for determining whether an attempt to acquire the right to investment arbitration constitutes an abuse. In this regard, while there is yet no settled case law in investment arbitration, the Tribunal in Philip Morris Asia was right in pointing out that some investment arbitral tribunals have applied ‘legal tests … revolving around the concept of foreseeability.’179 However, the Tribunal disregarded the fact that these tribunals took into account not only the foreseeability of a dispute but also other factors such as the existence of the claimant’s substantial business interests in the investment and the claimant’s conduct at the initiation of the proceedings. In fact, considering that the concept of abuse entails maliciousness, unreasonableness and arbitrariness, the determination of abuse requires a careful examination of the circumstances of a particular dispute. V. CONCLUSION This article examined the principle of abuse of process under international law and its application in the ICJ and other judicial and quasi-judicial bodies. It also analyzed past investment arbitration decisions concerning the principle, and pointed out that the principle is applied differently in investment arbitration because the principle concerns a claimant investor’s use of the general right to investment arbitration under an investment agreement in an attempt to acquire its own right to investment arbitration, and therefore the application of the principle negates the existence of jurisdiction of an investment arbitral tribunal rather than prevents the exercise thereof. Accordingly, this article suggested that the principle should be applied as a part of the jurisdictional requirements and that the comprehensive circumstances of a dispute should be taken into account in the determination of abuse. Several State parties to investment agreements are concerned that the protection under the agreements may be extended to investors and investments which they did not intend to protect at the time of ratification. The principle of abuse of process could be used to address such legitimate concern. However, without a clear and shared understanding of the principle, it could end up increasing the inconsistency that already exists in the interpretation and application of international investment law.180 It is therefore essential to clarify the source of the principle and the criteria for its application. Footnotes 2 Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investments (signed 15 September 1993, entered into force 15 October 1993). 3 Philip Morris Asia Limited v The Commonwealth of Australia, UNCITRAL, PCA Case No 2012-12, Award on Jurisdiction and Admissibility (17 December 2015) paras 5–8. 4 ibid paras 6, 96–97. The claimant alleged in the proceedings that it had controlled Philip Morris Australia and PML even before the acquisition of their shares in February 2011, but the Tribunal concluded that the claimant failed to substantiate the allegation. ibid paras 496–509. 5 ibid paras 535–88. 6 ibid para 585. 7 Eric de Brabandere, ‘“Good Faith”, “Abuse of Process” and the Initiation of Investment Treaty Claims’ (2012) 3 J Intl Disp Settlement 609, 610–12. 8 Robert Kolb, La bonne foi en droit international public: contribution à l’étude des principes généraux de droit (Presses Universitaires de France 2001) 442–61. See also Yearbook of the International Law Commission 1960, vol 2, A/CN.4/SER.A/1960/ADD. 1 (1961) 41 paras 70–73; L. Oppenheim, International Law: A Treatise (8th edn, H. Lauterpacht ed, Longman, Green & Co. 1955) 346–47. 9 Alexandre Kiss, ‘Abuse of Rights’ in Max Planck Encyclopedia of Public International Law, para 1. See also Michael Byers, ‘Abuse of Rights: An Old Principle, A New Age’ (2002) 47 McGill LJ 389. 10 Sir H Lauterpacht, The Function of Law in the International Community (OUP 1933) 286. 11 Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP 1953, 2006), 105. See also Nuclear Tests (Australia v France), Judgent (20 December 1974) [1974] ICJ Rep 253, para 46; Nuclear Tests (New Zealand v France), Judgment (20 December 1974) [1974] ICJ Rep 457, para 49. 12 See Nuclear Tests (Australia v France), Judgment (n 10) para 46; Nuclear Tests (New Zealand v France), Judgment (n 10) para 49. 13 Gabčíkovo-Nagymaros Project (Hungary/Slovakia), Judgment (25 September 1997) [1997] ICJ Rep 7, para 142. 14 Cheng (n 11) 114, 118. See also ibid. 15 Kolb (n 8) 440–41. 16 Sir Gerald Fitzmaurice, The Law and Procedure of the International Court of Justice, vol 1 (Grotius Publications Limited 1986) 12. It is worth noting that Article 300 of the United Nations Convention on the Law of the Sea (UNCLOS), titled ‘Good faith and abuse of rights,’ provides that ‘States Parties shall fulfil in good faith the obligations assumed under this Convention and shall exercise the rights, jurisdiction and freedoms recognized in this Convention in a manner which would not constitute an abuse of right.’ 17 See Charter of the United Nations, art 2(3). 18 See Charter of the United Nations, art 33(1). 19 Charter of the United Nations, art 93(1); Statute of the International Court of Justice (opened for signature 26 June 1945, entered into force 24 October 1945), art 35(1). 20 United Nations Convention on the Law of the Sea, 1833 UNTS 3 (opened for signature 10 December 1982, entered into force 16 November 1994) (UNCLOS), annex VI. Statute of the International Tribunal for the Law of the Sea, art 20(1). 21 See Arbitral Award of 31 July 1989, Judgment (12 November 1991) [1991] ICJ Rep 53, para 120. 22 Even if the Court has jurisdiction, it is not ‘necessarily be bound to … exercise’ it. Sir Gerald Fitzmaurice, The Law and Procedure of the International Court of Justice, vol 2 (Grotius Publications Limited 1986) 447. 23 Hugh Thirlway, The Law and Procedure of the International Court of Justice (OUP 2013) 1708–11. 24 Yuval Shany, Questions of Jurisdiction and Admissibility before International Courts (CUP 2015) 129–33. See also Fitzmaurice (n 22) 438–40. 25 Oil Platforms (Islamic Republic of Iran v United States of America), Judgment (6 November 2003) [2003] ICJ Rep 161, para 29. 26 Cheng (n 11) 134. 27 Kolb (n 8) 468–69. According to Cheng (n 11) 134, ‘[w]hen either an unlawful intention or design can be established, or the act is clearly unreasonable, there is an abuse prohibited by law.’ Schachter notes that the principle of abuse of rights is ‘associated with fairness and reasonableness.’ Oscar Schachter, International Law in Theory and Practice (Martinus Nijhoff Publishers 1991) 56. 28 Vaughan Lowe, ‘Overlapping Jurisdiction in International Tribunals’ (1999) 20 Austria YB of Intl L 191, 202–03. 29 Kolb writes that abuse includes the use of judicial procedures for purposes ‘that are alien to those for which the procedural rights were established,’ that are ‘procrastinatory or frivolous,’ that are ‘propagand[istic],’ or that are ‘malevolent’ or in ‘bad faith,’ as well as for the purpose ‘of causing harm or obtaining an illegitimate advantage,’ or ‘of reducing or removing the effectiveness of some other available process.’ Robert Kolb, ‘General Principles of Procedural Law’ in Andreas Zimmermann and others (eds), The Statute of the International Court of Justice: A Commentary (OUP 2012) 871, para 49. 30 Olivier Corten, ‘Reasonableness in International Law’ in Max Planck Encyclopedia of Public International Law, para 17. 31 Yuval Shany, The Competing Jurisdictions of International Courts and Tribunals (OUP 2003) 258–59. See also Michael Akehurst, ‘Jurisdiction in International Law’ (1974) 46 Brit YB Intl L 145, 189–90. 32 Chester Brown, A Common Law of International Adjudication (OUP 2007) 248–49. 33 Nuclear Tests (Australia v France), Judgment (n 11) para 23; Nuclear Tests (New Zealand v France), Judgment (n 10) para 23, quoting Case concerning the Northern Cameroons (Cameroon v United Kingdom), Preliminary Objections, Judgment (2 December 1963) [1963] ICJ Rep 15, 29. For example, with its inherent power, the Court may exercise judicial economy and decide not to examine some of the issues raised by disputing parties in order to ensure the efficiency of its operation. Luiz Eduardo Salles, Forum Shopping in International Adjudication: The Role of Preliminary Objections (CUP 2014) 190–205. See also Chester Brown, ‘The Inherent Powers of International Courts and Tribunals’ (2006) 76 BYIL 195, 215–22, 228–29. 34 Elihu Lauterpacht, ‘“Partial” Judgments and the Inherent Jurisdiction of the International Court of Justice’ in Vaughan Lowe and Malgosia Fitzmaurice (eds), Fifty Years of the International Court of Justice: Essays in Honour of Sir Robert Jennings (CUP 1996) 456, 477–78. A similar provision is included in the constitutive instruments of other international courts and tribunals. See eg The Statute of the International Tribunal for the Law of the Sea, art 16. 35 It may be argued that the Court has such power but not the obligation, see Shany (n 24) 148–63. 36 Shabtai Rosenne, The Law and Practice of the International Court 1920–2000 (4th edn, Martinus Nijhoff Publishers 2006) 532–39. 37 Hugh Thirlway, ‘The Law and Procedure of the International Court of Justice 1960–1989, Supplement 2005: Parts One and Two’ (2006) 76 BYIL 1, 12–14. As has already been pointed out above in this subsection, an abuse does not negate the existence of the Court’s jurisdiction as such, but only prevents the exercise thereof. 38 See eg Kolb (n 7) 640–46. Other than the cases discussed below in the text of this Section, see eg Aerial Incident of 10 August 1999 (Pakistan v India), Jurisdiction, Judgment (21 June 2000) [2000] ICJ Rep 12, para 40; Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v Yugoslavia), Preliminary Objections, Judgment (11 July 1996) [1996] ICJ Rep 595, para 46. 39 Chittharanjan Félix Amerasinghe, Jurisdiction of International Tribunals (Martinus Nijhoff 2002) 243. 40 Arbitral Award, Judgment (n 21) para 120. 41 Christian Tomuschat, ‘Article 36’ in Zimmermann and others (n 29) 633, para 119. 42 ibid para 119. 43 Ambatielos Case (Merits: Obligation to Arbitrate), Judgment (19 May 1953) [1953] ICJ Rep, 10, 13–14, 23. 44 ibid 23. 45 Case concerning Right of Passage over Indian Territory (Portugal v India) Preliminary Objections, Judgment (26 November 1957) [1957] ICJ Rep, 125, 132. 46 ibid 147–48. 47 Land and Maritime Boundary between Cameroon and Nigeria, Preliminary Objections, Judgment (11 June 1998) [1998] ICJ Rep 275, paras 22, 36. 48 ibid para 39. 49 ibid, quoting Border and Transborder Armed Actions (Nicaragua v Honduras), Jurisdiction and Admissibility, Judgment (20 December 1988) [1988] ICJ Rep 69, para 94. 50 Certain Phosphate Lands in Nauru (Nauru v Australia), Preliminary Objections, Judgment (26 June 1992) [2004] ICJ Rep 12, para 32. 51 ibid para 36. The Court concluded that the application in this case had not been rendered inadmissible by passage of time. ibid. Undue delay of the filing of an application may also be considered an ‘implied waiver of rights.’ See Avena and Other Mexican Nationals (Mexico v United States of America), Judgment (31 March 2004), [2004] ICJ Rep 12, para 44. The existence of prejudice suffered by the respondent is also a factor to be taken into account when the Court decides the question of admissibility in other contexts. In Barcelona Traction, the respondent argued that it had agreed to the discontinuance of the original proceedings because the applicant misled it, and that it suffered prejudice because of the new application filed after the discontinuance of the original proceeding. The respondent contended that the applicant was now ‘estopped or precluded from denying that by, or in consequence of, the discontinuance, it renounced all further right of action.’ Barcelona Traction, Light and Power Company, Limited, Preliminary Objections, Judgment (24 July 1964), [1964] ICJ Rep 6, at 24. The ICJ declined the respondent’s plea because it concluded that the respondent did not suffer prejudice, based on the comparison between the respondent’s position in the new proceedings and what it would have been in the original ones. ibid 24–25. 52 See Phosphate Lands in Nauru, Judgment (n 50) paras 37–38. 53 See Border and Transborder Armed Actions, Judgment (n 49) 105–06. 54 Northern Cameroons, Judgment (n 33), 29. 55 ibid. 56 ibid 38. 57 ibid. 58 See also International Tribunal for the Law of the Sea: Rules of the Tribunal (adopted 28 October 1997), art 96.1. 59 Chagos Marine Protected Area Arbitration (Republic of Mauritius v United Kingdom of Great Britain and Northern Ireland), PCA Case No 2011-03, Award (18 March 2015) paras 311–12, 315. 60 Barbados v Republic of Trinidad and Tobago, PCA Case No 2004-02, Decision (11 April 2006) para 208. 61 The South China Sea Arbitration (Republic of the Philippines v People’s Republic of China), PCA Case No 2013-19, Award on Jurisdiction and Admissibility (29 October 2015) para 128. 62 Dominic McGoldrick, The Human Rights Committee: Its Role in the Development of the International Covenant on Civil and Political Rights (Clarendon Press 1994) 129. 63 Mr Vishwadeo Gobin v Mauritius, CCPR/C/72/D/787/1997, Decision (16 July 2001) para 6.3. 64 ibid. 65 Rosa María Serna and others v Colombia, CCPR/C/114/D/2134/2012, Decision (9 July 2015) para 8.6. 66 ibid. 67 ibid. 68 Serna (n 65) para 4.4. 69 ibid para 8.5. 70 ECtHR, Practical Guide on Admissibility Criteria (2014), http://www.echr.coe.int/Documents/Admissibility_guide_ENG.pdf, para 148. 71 ibid. 72 See eg David Harris, Michael O’Boyle, Edward Bates, and Carla Buckley, Harris, O’Boyle, and Warbrick, Law of the European Convention on Human Rights (3rd edn, OUP 2014) 79–81. For the practice of the European Commission of Human Rights under the equivalent provision. See Amerasinghe (n 39) 758–60. 73 Bestry v Poland, App no 57675/10, ECHR, Judgment (3 November 2015) para 44. 74 ibid. 75 SL and JL v Croatia, App no 13712/11, ECHR, Judgment (Merits) (7 May 2015) para 48. 76 ibid. 77 ibid para 49. See also Gross v Switzerland, App no 67810/10, ECHR, Judgment (30 September 2014), Joint Dissenting Opinion of Judges Spielmann, Ziemele, Berro-Lefèvre, Zupančič, Hajiyev, Tsotsoria, Sicilianos, and Keller. 78 Article 17(1) of the Rome Statute of the ICC, which enumerates impediments that render a case inadmissible, does not identify abuse of process as one of such impediments. Moreover, while art 4(1) of the Rome Statute provides that the ICC shall ‘have such legal capacity as may be necessary for the exercise of its functions and the fulfilment of its purposes,’ according to the Appeals Chamber, the provision cannot ‘be construed as providing power to stay proceedings for abuse of process’ because such power ‘is not generally recognised as an indispensable power of a court of law, an inseverable attribute of the judicial power.’ Prosecutor v Thomas Lubanga Dyilo, Decision on the Defence Challenge to the Jurisdiction of the Court pursuant to Article 19 (2)(a) of the Statute of 3 October 2006 (14 December 2006) ICC-01/04-01/06 (OA4), Appeals Chamber, para 35. The Appeals Chamber stated that it was ‘driven’ to the conclusion that the Rome Statute ‘does not provide for stay of proceedings for abuse of process as such.’ ibid. 79 ibid para 36. 80 ibid. 81 ibid paras 37–39. See also Situation in the Democratic Republic of the Congo in the Case of the Prosecutor v Thomas Lubanga Dyilo, ICC-01/04-01/06, Trial Chamber I, Redacted Decision on the Defence Application Seeking a Permanent Stay of the Proceedings (7 March 2011) para 195; Situation in the Central African Republic in the Case of the Prosecutor v Jean-Pierre Bemba Gombo, ICC-01/05-01/08, Trial Chamber III, Decision on the Admissibility and Abuse of Process Challenges (24 June 2010) paras 252–53; Situation in the Central African Republic in the Case of the Prosecutor v Jean-Pierre Bemba Gombo, ICC-01/05-01/08, Trial Chamber III, Decision on Defence Request for Relief for Abuse of Process (17 June 2015) paras 8–11, 18. 82 However, in practice, the ICC has been reluctant to dismiss cases as abuse of process. Helen McDermott, ‘Seeking a Stay of Proceedings for Irregular Apprehension before International Courts: Fighting a Losing Battle against the Pursuit of International Criminal Justice’ (2016) 14 J Intl Crim Just 145, 161–64. See also Jean-Bosco Barayagwiza v The Prosecutor, International Criminal Tribunal for Rwanda, Appeals Chamber (3 November 1999) paras 73–101. 83 ICSID Rules of Procedure for Arbitration Proceedings (ICSID Arbitration Rules) (April 2006) r 42(1). Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL Arbitration Rules) (2010) art 35(1). 84 Eric De Brabandere, Investment Treaty Arbitration as Public International Law: Procedural Aspects and Implications (CUP 2016) 125–26. 85 Sir Hersch Lauterpacht, The Development of International Law by the International Court (CUP 1982) 162 (‘It is only at a rudimentary stage of legal development that society permits the unchecked use of rights without regard to its social consequences.’). 86 Abaclat and others v Argentine Republic, ICSID Case No ARB/07/5, Decision on Jurisdiction and Admissibility (4 August 2011) para 646. 87 ibid. 88 Phoenix Action, Ltd v Czech Republic, ICSID Case No ARB/06/5, Award (15 April 2009) para 107. 89 John Gaffney, ‘“Abuse of Process” in Investment Treaty Arbitration’ (2010) 11 JWIT 515, 521–23. 90 Flemingo Duty Free Shop Private Limited v The Republic of Poland, Award (Redacted) (12 August 2016) para 347. 91 Ronald S. Lauder v The Czech Republic, UNCITRAL, Final Award (3 September 2001) para 174. See also ibid paras 176–80. 92 Ampal-American Israel Corporation and others v Arab Republic of Egypt, ICSID Case No ARB/12/11, Decision on Jurisdiction (1 February 2016) para 331. 93 ibid para 333. For more about the applicability of the principle of abuse of process to the issue of parallel proceedings, see Hanno Wehland, The Coordination of Multiple Proceedings in Investment Treaty Arbitration (OUP 2013) 218–26. For another possible scenario of abuse of process, see The Renco Group, Inc v Republic of Peru, ICSID Case No UNCT/13/1, Partial Award on Jurisdiction (15 July 2016) paras 174–88. See also Hervé Ascensio, ‘Abuse of Process in International Investment Arbitration’ (2014) 13 Chinese J Intl L 763, 767–77; Gaffney (n 89) 529–30; de Brabandere (n 7) 626–35; Emmanuel Gaillard, ‘Abuse of Process in International Arbitration’ (2017) 32 ICSID Rev-FILJ 17, 19–27. 94 See Section II.A.(i) of this article. 95 For the concepts of jurisdiction and admissibility in investment arbitration, see eg David Williams QC, ‘Chapter 22: Jurisdiction and Admissibility’ in Peter Muchlinski, Federico Ortino, and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 868, 919–20. 96 Jan Paulsson, ‘Jurisdiction and Admissibility’ in Gerald Aksen and Robert Briner (eds), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC Publishing 2005) 601 (‘Mistakenly classifying issues of admissibility as jurisdictional may therefore result in an unjustified extension of the scope for challenging awards …’). In Paulsson’s words, ‘It may be difficult to establish the dividing line between the two. There is a twilight zone. But only a fool would argue that the existence of a twilight zone is proof that day and night do not exit.’ ibid 603. 97 Abaclat, Decision on Jurisdiction and Admissibility (n 86) para 647. 98 ibid para 658. The question of the legality of investment ultimately determines that of jurisdiction. 99 See Phoenix Action, Award (n 88) paras 77–78. 100 See eg Tania Voon and Andrew Mitchell, ‘Time to Quit? Assessing International Investment Claims Against Plain Tobacco Packaging in Australia’ (2011) 14 J Intl Econ L 515, 530–41. See also Eva Nanopoulos and Rumiana Yotova, ‘“Repackaging” Plain Packaging in Europe: Strategic Litigation and Public Interest Considerations’ (2016) 19 J Intl Econ L 175. 101 Philip Morris Asia, Award (n 3) paras 1, 6. 102 ibid paras 6, 96–97. The claimant alleged in the proceedings that it had controlled Philip Morris Asia and PML even before the acquisition, but the Tribunal concluded that the claimant failed to show it had control over the Australian investments before it acquired them in February 2011. ibid paras 496–509. 103 ibid para 97. 104 ibid paras 97–98, 143. 105 ibid para 98. 106 Philip Morris Asia, Award (n 3) para 400. 107 ibid para 411. 108 ibid paras 420–25 (emphasis added). 109 ibid paras 422, 441, 443. 110 ibid paras 431–40. 111 ibid paras 414, 417–18. 112 ibid para 539 (emphasis added). 113 ibid. 114 ibid para 554 (emphasis added). 115 ibid. 116 ibid paras 555–69. 117 ibid paras 570–84. 118 ibid para 588. 119 While the Tribunal might have followed the line of arguments of the respondent, the respondent did not necessarily regard the issue of abuse of process as a question of admissibility, at least judging from the publicly available documents. The respondent argued, in its response to the notice of arbitration, that ‘there could be no ‘investment’ for the purposes of Article 10 of the BIT and any reliance on Article 10 of the BIT would constitute an abuse of right. It follows that the arbitral tribunal lacks jurisdiction or that the claims that PM Asia now seeks to bring under the BIT are inadmissible.’ Philip Morris Asia, Australia’s Response to the Notice of Arbitration (21 December 2011) para 31 (emphasis added). 120 See Section III.B. of this article. 121 See Section II.A.(i) of this article. 122 Philip Morris Asia, Award (n 3) para 538. 123 See eg Utku Topcan, ‘Abuse of the Right to Access ICSID Arbitration’ (2014) 29 ICSID Rev-FILJ 627, 634–44; de Brabandere (n 7) 621–26. 124 Venezuela Holdings and others v Bolivarian Republic of Venezuela, ICSID Case No ARB/07/27, Decision on Jurisdiction (10 June 2010) para 169. 125 ibid para 185. 126 ibid paras 204–05. 127 ibid paras 205–06. 128 Tidewater Investment SRL and Tidewater Caribe, CA v Bolivarian Republic of Venezuela, ICSID Case No ARB/10/5, Decision on Jurisdiction (8 February 2013) para 184 (emphasis added). 129 ibid para 143 (emphasis added). 130 ibid paras 183–92. 131 The question of jurisdiction ratione temporis does not arise with respect to a foreseeable dispute, because a claimant investor initiates arbitral proceedings when such dispute crystalizes into an actual dispute after the protection under an investment agreement and investment protection became applicable to its investment. See Philip Morris Asia, Award (n 3) paras 527–34. 132 Article 28 of the VCLT provides that the provisions of a treaty ‘do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party.’ See also Renée Rose Levy and Gremcitel SA v Republic of Peru, ICSID ARB/11/17, Award (9 January 2015) para 147. 133 Phoenix Action, Award (n 87) para 100. 134 ibid paras 136, 138, 142. 135 ibid para 144. It should be noted that this case concerned the respondent’s treatment of two Czech companies, owned by the claimant, an Israeli company. What was unique is that the owner of the claimant was originally a Czech national, but fled to Israel, obtained an Israeli nationality, established the company, and obtained the share of the two Czech companies from his wife and daughter, who had been the legal owners at that time. ibid paras 22, 41, 137, 139. 136 ibid para 145. 137 Cementownia ‘Nowa Huta’ SA v Republic of Turkey, ICSID Case No ARB(AF)/06/2, Award (17 September 2009) para 154. 138 ibid paras 136, 156–59. 139 ST-AD GmbH v Republic of Bulgaria, UNCITRAL, PCA Case No 2011-06, Award on Jurisdiction (18 July 2013) para 405. 140 ibid paras 421, 423. 141 ibid para 423. 142 The tribunals could have found that they did not have jurisdiction ratione temporis over the dispute because it pre-existed at least as a domestic dispute. 143 For example, the Tribunal in Inceysa stated that investment in violation of good faith cannot benefit from the protection of an investment agreement. Inceysa Vallisoletana SL v Republic of El Salvador, ICSID Case No ARB/03/26, Award (2 August 2006) para 239. 144 Tokios Tokelės v Ukraine, ICSID Case No ARB/02/18, Decision on Jurisdiction (29 April 2004) paras 21–23. 145 ibid paras 21–22. 146 ibid para 56. See also ibid para 54, quoting Barcelona Traction, Light and Power Company, Limited, Judgment (5 February 1970), [1970] ICJ Rep 3, at 3, para 56 (‘… the veil is lifted, for instance, to prevent the misuse of the privileges of legal personality, as in certain cases of fraud or malfeasance, to protect third persons such as a creditor or purchaser, or to prevent the evasion of legal requirements or of obligations’). 147 Tokios Tokelės v Ukraine, ICSID Case No ARB/02/18, Dissenting Opinion to Decision on Jurisdiction (29 April 2004) paras 23–30. 148 ConocoPhillips Petrozuata BV, ConocoPhillips Hamaca BV, and ConocoPhillips Gulf of Paria B v Bolivarian Republic of Venezuela, ICSID Case No ARB/07/30, Decision on Jurisdiction and Merits (3 September 2013) para 268. 149 ibid para 274. 150 ibid paras 279–80. 151 See Autopista Concesionada de Venezuela, CA v Bolivarian Republic of Venezuela, ICSID Case No ARB/00/5, Decision on Jurisdiction (27 September 2001) paras 123–26; Aguas del Tunari, SA v Republic of Bolivia, ICSID Case No ARB/02/3, Decision on Respondent’s Objections to Jurisdiction (21 October 2005) para 330. 152 In addition to the cases in the text, see also Lao Holdings NV v Lao People’s Democratic Republic, ICSID Case No ARB(AF)/12/6, Decision on Jurisdiction (21 February 2014). In Lao Holdings, the Tribunal considered, in obiter dicta, that ‘it is clearly an abuse for an investor to manipulate the nationality of a company subsidiary to gain jurisdiction under an international treaty at a time when the investor is aware that events have occurred that negatively affect its investment and may lead to arbitration. In particular, abuse of process must preclude unacceptable manipulations by a claimant acting in bad faith who is fully aware prior to the change in nationality of the “legal dispute.”’ ibid paras 69–70, 76. 153 Pac Rim Cayman LLC v Republic of El Salvador, ICSID Case No ARB/09/12, Decision on the Respondent’s Jurisdictional Objections (1 June 2012) para 2.101. 154 ibid paras 2.104, 2.107. 155 ibid para 2.99. 156 ibid paras 2.83–2.86. 157 Gremcitel, Award (n 132) para 181. 158 ibid para 182. 159 ibid para 184. 160 ibid para 185. 161 ibid paras 187–91. 162 ibid paras 193–94. The documents were backdated to make it appear that one of the claimants acquired indirect ownership of the investment well before the initiation of the arbitral proceedings. ibid paras 152–55. 163 Transglobal Green Energy, LLC and Transglobal Green Panama, SA v Republic of Panama, ICSID Case No ARB/13/28, Award (2 June 2016) para 100 (emphasis added). 164 ibid para 103 (footnotes omitted). 165 ibid paras 100, 116. 166 Philip Morris Asia, Award (n 3) paras 397, 457. 167 See Sections II.A.(i) and III.A. of this article. 168 To some extent, investment that is made through an abusive conduct could also be excluded from the scope of protection by a denial of benefits clause. For example, Article 10.12(2) of the Dominican Republic-Central America Free Trade Agreement (CAFTA) provides that ‘a Party may deny the benefits of this Chapter [on investment] to an investor of another Party that is an enterprise of such other Party and to investments of that investor if the enterprise has no substantial business activities in the territory of any Party, other than the denying Party, and persons of a non-Party, or of the denying Party, own or control the enterprise’ (emphasis added). Although this provision does not explicitly mention an abuse, it could be said that an investor and its investment that fit the description of this provision are not in good faith and that they are, therefore, not protected. For example, in Pac Rim, having rejected the respondent’s objection to jurisdiction based on the abuse of process, the Tribunal found that the claimant nevertheless could not receive any benefits under the CAFTA, in accordance with Article 10.12(2) of the CAFTA because the claimant, a national of the United States, had ‘no substantial business activities’ in the United States, and was owned by Canada, a non-CAFTA party. Pac Rim, Decision on Jurisdiction (n 153) paras 4.63–4.82, 4.92. 169 See Section III.C.(ii) of this article. 170 United Nations Conference on Trade and Development (UNCTAD), Investment Policy Framework for Sustainable Development (2015) at 85, 94. 171 Phoenix Action, Award (n 88) paras 77–78. 172 See Tulip Real Estate and Development Netherlands BV v Republic of Turkey, ICSID Case No ARB/11/28, Decision on Annulment (30 December 2015) paras 91–92. See also Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Compensation, Judgment (19 June 2012) [2012] ICJ Rep 324, Declaration (Judge Greenwood) para 8 (‘International law is not a series of fragmented specialist and self-contained bodies of law, each of which functions in isolation from the others; it is a single, unified system of law and each international court can, and should, draw on the jurisprudence of other international courts and tribunals, even though it is not bound necessarily to come to the same conclusions.’). 173 Chevron Corporation & Texaco Petroleum Corporation v The Republic of Ecuador, UNCITRAL/PCA, Interim Award (1 December 2008) para 143. 174 ibid. 175 The Rompetrol Group NV v Romania, ICSID Case No ARB/06/3, Decision on Jurisdiction and Admissibility (18 April 2008) para 115. 176 ibid. 177 Philip Morris Asia, Award (n 3) para 539. 178 See Section III.A. of this article. 179 Philip Morris Asia, Award (n 3) para 554. See Section III.C.(iv) of this article. 180 Lauterpacht (n 85) 162–64. See also Corfu Channel Case (UK v Albania), Judgment (9 April 1949) [1949] ICJ Rep 4, Separate Opinion (Alejandro Alvarez) 48. © The Author(s) 2018. Published by Oxford University Press on behalf of ICSID. All rights reserved. For Permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)
ICSID Review: Foreign Investment Law Journal – Oxford University Press
Published: Apr 10, 2018
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