Clayton/Bilcon, Investor-State Arbitration and International Approaches to Trade and Investment
ABSTRACT: The recent North American Free Trade Agreement (NAFTA) Chapter 11 award in the Clayton/Bilcon v. Government of Canada arbitration is at the centre of debates regarding substantive investment law and enforcement mechanisms, and investment law’s relationship to other international economic law regimes. Much of the debate centres around the convergence between trade and investment law, as they become more and more intertwined within recent multilateral economic treaties and arbitral practice. This Note takes Clayton/Bilcon as an opportunity to compare investment and trade law approaches to fundamental substantive issues, and to examine the ways in which their similarities and differences illuminate their distinct yet related goals and values. After reviewing the facts and procedural history of the Clayton/Bilcon award, this Note will analyse the Tribunal’s approach in examining the ‘fair and equitable treatment’ standard under Article 1105, as evidence of the increasing influence of investment law over host states’ domestic policy and the right to regulate. The Tribunal’s interpretation of Article 1102 and the ‘like circumstances’ standard also broadens the possibilities for investors to successfully claim breach of national treatment obligations, and offers insight into investment law’s evolution from post-entry investment protection to trade law-style investment liberalization. Through a comparative analysis of trade and investment approaches, this Note charts the evolution of investment law through decisions such as Clayton/Bilcon towards a degree of treaty-based transnational governance, and highlights the need for a reliable interpretive body with which to improve and effectuate this governance.