2. Is Calvo Dead?

Shea (1955).

Manning-Cabrol (1995).

It is noted that the doctrine embraced two levels of equality, namely “equality of nation-states or the equal treatment of nationals and foreigners.” See Manning-Cabrol, supra note 2, at 1172.

For example, Manning-Cabrol considers national treatment in international investment treaties to be the same as the “equal/national treatment” principle enshrined in the Calvo Doctrine, and argues that Calvo found new life in such treaties (as well as in domestic legislation). See Manning-Cabrol, supra note 2, at 1195.

Zamora also noted such a distinction between the two principles and has pointed out that, “[U]nlike concepts of national treatment, however, the Calvo Doctrine was created to address the perceived favoritism granted to foreigners, rather than discrimination against them. In other words, the purpose of the Calvo Doctrine is to bring foreigners down to the level of nationals, while the purpose of national treatment is to raise them up to the level of nationals.” See Zamora (1997).

Vandevelde (1998).

Such factors are also the three key elements of the Calvo Clause; see Manning-Cabrol, supra note 2, at 1173. However, according to Lipstein, the Calvo Clause has five elements: “submission to local jurisdiction, free choice of law, sphere of application, waiver of protection by home state and surrender of rights under international law.” See Lipstein (1945). Wesley likewise observes that there are five common provisions in the clause: “(1) Submission to local jurisdiction; (2) application of local law; (3) assimilation of foreigners for purposes of local contractual arrangements; (4) waiver of diplomatic protection by the foreigner's home state; and (5) surrender of rights arising under international law.” Wesley (1975).

Constitution of 9 April 1933, in Constitutions of the Americas 670–71 (Russell H. Fitzgibbon ed., 1948), as cited in id. at 24.

Article 50, Decision 24. Andean Commission: Decision 24, Common Regime of Treatment of Foreign Capital and of Trademarks, Patents, Licenses, and Royalties, Article 50, Nov. 30, 1976, 16 I. L.M. 138, at 153 (1977) [hereinafter Decision 24).

Article 51, Decision 24.

See Article 126 of the Contract Law of the People’s Republic of China (stating that such contracts should be governed only by Chinese law) and Article 246 of the Civil Procedural Law of the People’s Republic of China (stating that any disputes arising out of such contracts should only be subject to the jurisdiction of Chinese courts).

Lillich noted that Latin American efforts on the Charter were “no more than a thinly-disguised attempt to endow the Calvo Doctrine.” See Lillich (1975). Schneiderman considers that the Calvo Doctrine was “a central plank of the new International Economic Order (UNGA 3171 of 1973) and the UN Charter of Economic Rights and Duties of States (1974)”; Schneiderman (2000a).

LDC here stands for Less Developed Countries.

See Claessens (1991).

Some economists considered that such a change marked a rejection of the import substitution model of the 1950s, 1960s, and 1970s, and the emergence of a development model. See generally, The Macroeconomics of Populism in Latin America (Rudiger Dornbusch & Sebastian Edwards eds., 1991), and Bulmer-Thomas (1994).

UNCTAD, Bilateral Investment Treaties 1959–1999, UNCTAD/ITE/IIA/2, at 15 (2000). According to UNCTAD, however, the total number of BITs concluded by Latin American and Caribbean States reached 451 by the end of 2004. See UNCTAD: Recent Developments in International Investment Agreements, IIA MONITOR No. 2 (Aug. 30, 2005) UNCTAD/WEB/ITE/IIT/2005/1, at 2.

Some countries have signed some BITs without ratifying any of them. For example, Brazil and Colombia have signed 14 and 6 BITs respectively, but neither of them has ratified any of them. UNCTAD, Country-specific Lists of BITs, available at http://www.unctad.orgfl’emplates/Page.asp?intltemlD=2344&lang=l (last visited June 14, 2006). For an analysis on the legal effects of such un-ratified BITs, see UNCTAD: Recent Developments in International Investment Agreements, supra note 32, at 8. For a more elaborate discussion on its implication on the consent to international arbitration, see Ceskoslovenska Obchodni Banka, A.S. v. The Slovak Republic (ICSID Case No. ARB/97/4), Decision on the Further and Partial Objection to Jurisdiction (Dec. 1, 2000), paras. 33–59. The text of this Decision is published online as it appears in Vol. 15, No. 2 issue of ICSID Review-Foreign Investment Law Journal (2000): http://​www.​worldbank.​org/​icsid/​cases/​csob.​pdf (last visited Feb. 5, 2007). In this case, the relevant BIT was signed but not ratified, and the Arbitration Tribunal held that state consent to submission to ICSID arbitration could not be established on the basis of the BIT. The Tribunal nevertheless found such consent was given by the Czech Government by way of the Consolidation Agreement entered into between the parties expressing that the Agreement should be governed by domestic laws and the BIT.

Salacuse (1990).

In a recent article, Scheurer called this one of “Calvo’s grandchildren.” Scheurer (2005).

Cremades (2004).

Article 7, Argentina-U.S. BIT.

Golsong (1991).

See Article 9, Bolivia-U.S. BIT; Article 6, Ecuador-U.S. BIT; Article 9, El Salvador-U.S. BIT; Article 6, Grenada-U.S. BIT; Article 7, Haiti-U.S. BIT; Article 9, Honduras-U.S. BIT; Article 6, Jamaica-U.S. BIT; Article 7, Nicaragua-U.S. BIT; Article 1, 2000 Amending Protocol to Paraguay-U.S. BIT; Article 9, Trinidad and Tobago-U.S. BIT; and Article 24, Uruguay-U.S. BIT.

See, e.g., Article 10, Argentina-U.S. BIT.

Article 30, Uruguay-US BIT.

Blackaby et al. (2002).

The recent wave of regional integration within that region, however, demonstrated a marked difference from the original Andean Pact movement, in that it no longer sticks to the nationalistic approach and import substitution policies but places the emphasis on market forces. Edwards (1993).

Article 33 of Decision 220 provided that “member countries could not grant foreign investors more favorable treatment than that granted to national investors.” It is noted that although Article 33’s text differed slightly from that of Article 50, the effects were identical: foreign investors were not to be granted rights greater than those granted to nationals. See Wiesner (1993).

One commentator argued that, while Decision 220 did not completely denounce the Calvo principle, it nevertheless denied “an ANCOM passport to roam the Andes at will.” However, another commentator argued that, “[l]f, as this article argues, national laws only permit the settlement of disputes before local courts and under local laws, then Calvo’s other principle that there is no right to diplomatic protection must also survive.” See Murphy Jr (1990); and Wiesner, supra note 46, at 448–49.

Article 2, Decision 291.

For the basic treaty of Mercosur, see Treaty Establishing a Common Market between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay, and the Eastern Republic of Uruguay, available at http://​www.​sice.​oas.​org/​trade/​mrcsr/​mrcsrtoc.​aspercosur&​hl=​zh-CN&​ct=​clnk&​cd=​7 (last visited June 16, 2006).

Protocol on Promotion and Protection of Investment Proceeding from Non­Member Countries of the MERCOSUL, available at http://​www.​cvm.​gov.​br/​ingl/​inter/​mercosul/​buenos-e.​asp (last visited June 15, 2006).

Subsection C.2.b, Chapter XVII Investment, of the Free Trade Area of the Americas (Draft Agreement) (Derestricted, FTAA.TNC/w/133/Rev.3, Nov. 21, 2003), particularly Articles 29 & 41.

The Convention is available at http://​www.​worldbank.​org/​icsid/​basicdodbasicdoc​.​htm (last visited June 15, 2006).

The Convention is available at http://​www.​miga.​org/​sitelevel2/​level2.​cfm?​id=​1107 (last visited June 15, 2006).

The full text of the Convention is available at http://​www.​jus.​uio.​no/​lm/​un.​arbitration.​recognition.​and.​enforcement.​convention.​new.​york.​1958/​doc (last visited June 16, 2006).

Biggs (2004).

Latin American states had long been hostile to the New York Convention, and were, in general, among the last countries to accept it. For example, Brazil did not accept it until 2002. See Gonzalo Biggs, id. at 63.

According to the MIGA website, MIGA members from Latin America and the Caribbean include Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Paraguay, Panama, Peru, St. Kitts & Nevis, St. Lucia, St. Vincent, Suriname, Trinidad & Tobago, Uruguay, and Venezuela. See MIGA: MIGA Member Countries (Last updated: Oct. 27, 2005), available at http://​www.​miga.​org/​sitelevel2/​level2.​cfm?​id=​ll52 (last visited May 28, 2006).

UNCTAD Press Release, UNCTAD Doc. UNCTAD/PRESS/EB/2004/007 (Mar. 5, 2004).

Inter-American Development Bank (IADB), Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study—Brazil (2006), http://​alca-ftaa.​iadb.​org/​eng/​invest/​BRA-1.​HTM (May 16, 2006).

UNCTAD, Country-specific Lists of BITs, supra note 35.

Salini Construttori S.p.A. and Italstrade S.p.A. v. the Hashemite Kingdom of Jordan (Case No. ARB/02/13), Decision of the Tribunal on Jurisdiction, Nov. 29, 2004. This case and the following case, Plama v. Bulgaria, basically decided that MFN clauses in BITs do not generally extend privileges under procedural provisions, which marks a reversal of the view as held in earlier cases, notably the Emilio Agustin Maffezini v. Kingdom of Spain (Case No. ARB/9717), Decision on Objections to Jurisdiction, Jan. 25, 2000 (Maffezini v. Spain), and Siemens A.G. v. Argentine Republic (Case No. ARB/02/8), Decision on Jurisdiction of Aug. 3, 2004 (Siemens v. Argentina), para. 103.

Plama Consortium Limited v. Republic of Bulgaria (Case No. ARB/03/24), Decision on Jurisdiction of Feb. 8, 2005.

See, e.g., Dolzer (1981), Schachter (1984), Guzman (1997).

One Argentine website highlights the main aspects of investment liberalization as follows: (1) Foreign investments are warmly welcomed and virtually unrestricted, with no sector restrictions—investments are allowed even in sensitive areas such as oil, mass media (broadcasting, cable, newspapers, and magazines), nuclear power generation, and nuclear mineral mining; (2) No approvals or paperwork of any kind are required to materialize foreign investments—there is absolutely no red tape; (3) No registration of investments is ever required: complete confidentiality assured; (4) Foreign investors are entitled, without approvals or formalities, to repatriate capital and remit profits abroad at any time—no waiting periods whatsoever; (5) Unrestricted access to foreign exchange markets—absolutely no approvals or formalities for making transfers abroad; (6) No discrimination against foreign investors: foreign and domestic companies are treated equally under the law, including access to domestic or foreign currency financing in the local market and full eligibility for economic development incentive programs; (7) No performance requirements to be met by foreign investors; and (8) International law protection: most capital-exporting countries covered by a valid bilateral investment treaty. See Hacienda Virtual Realty Argentina—HVRA, Legal Reforms and the Foreign Investor, available at http://​www.​hvra.​com.​ar/​enforinv.​htm (May 20, 2006).

IADB: Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study-Argentina (2006), http://​alca-ftaa.​iadb.​org/​eng/​invest/​ARG-1.​htm (May 16, 2006) [hereinafter IADB: Argentina], Section 2.1.

Article 20, Argentine Constitution.

Alessandro Spinillo & Emilio Vogelius, Argentina, in International Arbitration in Latin America, supra note 44, at 19.

Alfaro and Lorenti (2005).

Alfaro (2004a).

Alfaro (2004b).

Laurence Norman, Government Reopens 7-Year-Old Case Vs Oil Group, Dow JoNEs Newswires, Oct. 28, 2003, 15–16.

The proposed bill prohibits access to international arbitration in such cases unless (a) an appeal of their decision before Argentine federal courts is provided, or (b) the State’s counterparty in the dispute is a foreign State (State-State disputes); or (c) the Congress has provided for an exception in the case through a specific statute. The bill also requests the Executive to inform the appropriate authorities of Argentina’s repeal of any treaty by means of which Argentina has accepted such jurisdiction; and, meanwhile, demands the Executive, its agencies, and enterprises to issue necessary orders or decisions in order to annul prior agreements or decisions contrary to such provisions. Since the bill generally requires all state-investor arbitration cases to be subject to the ultimate control of national courts, it would effectively abolish the finality, and hence the autonomy, of arbitration. In this sense, it can be said that it will mean that the Calvo Doctrine finally returns to its birthplace. It remains to be seen, however, whether this is mere rhetoric or will lead to concrete steps toward its adoption. For details of the proposed bill, see Tawil (2005).

Similar recent events in other Latin American States include Brazil’s 2004 Private Public Partnership Act prohibiting international arbitration, and Venezuela’s constitutionality challenge against international arbitration, which will be discussed below. Indeed, a seminar was organized in order to look into the issue of the resurgence of Calvo and its implications on international arbitration. See D.C. Bar Lunch eon Program: The Resurgence of the Calvo Doctrine? available at http://www.bg­consulting.com/docs/calvo_program.jpg (last visited July 11, 2006). See also Cremades, supra note 38, esp. 81–82. For further details of such events in and beyond Latin America and their implications in international investment law, see Shan (2007).

Ley de Sept. 17, 1990, Inversiones No. 1182, Gaceta Oficial de Bolivia, Sept. 26, 1990. See also IADB (2006): Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study-Bolivia, http://​alca-ftaa.​iadb.​org/​eng/​invest/​BOL-1.​HTM (05/16/06) [hereinafter IADB: Bolivia], Section 1.2.

The Constitution of Brazil (including amendments until Constitutional Amendment 52, enacted on Mar. 8, 2006), available at http://​www.​v-brazil.​com/​governmentllaws/​constitution.​html (last visited June 16, 2006).

Veiga (2004).

Law No. 4131, Sept. 3, 1962, which regulates the investment of foreign capital and remittance of funds abroad, in ICSID: Investment Laws of the World, [loose­ leaf] [hereinafter Investment Laws of the World]; see also IADB: Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study-Brazil, http://​alca-ftaa.​iadb.​org/​eng/​invest/​BRA-1.​HTM (May 16, 2006) [hereinafter IADB: Brazil], Section 3.1.b.

For details of the case, see Joao Bosco Lee, Brazil, in International Arbitration in Latin America, supra note 44, at 63–66; Tawil (2006).

The law is posted at the Brazilian Ministry of Planning, Budget and Management website, https://​www.​planalto.​gov.​br/​ccivil_​03/​_​Ato2004-2006/​2004/​Lei/​Ll1079.​htm (last visited June 22, 2006). An English version is also available at http://​www.​planejamento.​gov.​br/​arquivos_​down/​ppp/​legislacao/​lei_​11079_​301204_​eng.​pdf (last visited June 22, 2006).

As noted by Rubins, the only path toward international arbitration recognized in Brazil is the carefully drafted arbitration clause in contracts between a foreign investor and the Brazilian Government, as “Brazil lacks the legal infrastructure that [exists] in many other countries in Latin America give[ing] foreign investors explicit guarantees of equitable treatment and access to international arbitration.” See Rubins (2003).

Namely, BITs with Belgium, Chile, Cuba, Denmark, Finland, France, Germany, Italy, the Republic of Korea, the Netherlands, Portugal, Switzerland, the United Kingdom and Venezuela. See UNCTAD, Country-specific Lists of BITs, supra note 35. See also Rubins, supra note 108, at 1979, 1088–90.

IADB: Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study-Chile, http://​alca-ftaa.​iadb.​org/​eng/​invesUCHI-l.​HTM (May 16, 2006) [hereinafter IADB: Chile], Section 4.1.

Article 9, Foreign Investment Statute, in Investment Laws of the World, supra note 100. See also IADB: Chile, supra note 112, Section 4.1.

Article 10, Foreign Investment Statute, in Investment Laws of the World, supra note 100. See also IADB: Chile, supra note 112, Section 5.1.

Carlos E. Jorquiera et al., Chile, in International Arbitration in Latin America, supra note 44, at 91–92.

Chile has effective BITs with Argentina, Australia, Austria, Belgium, Bolivia, China, Costa Rica, Croatia, Cuba, the Czech Republic, Denmark, Ecuador, El Salvador, Finland, France, Germany, Greece, Guatemala, Honduras, Italy, Indonesia, Lebanon, Malaysia, Nicaragua, Norway, Panama, Paraguay, Peru, the Philippines, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, the United Kingdom, Uruguay and Venezuela. Further bilateral investment agreements have been, or are being, negotiated with Brazil, Colombia, the Dominican Republic, Egypt, Greece, Hungary, the Netherlands, New Zealand, South Africa, Tunisia, Turkey, and Viet Nam; those were not yet in force in May 2003. WTO, Trade Policy Review-Chile: Secretariat’s Report 18, WT/TPR/S/124 (2003). For more updated information, see UNCTAD, Country-specific Lists of BITs, supra note 35.

Article 100 of the Colombian Constitution stipulates that, “[F]oreigners in Colombia enjoy the same civil rights that are granted to the Colombians. Nevertheless, for reasons of public order, the law may subject foreigners to special conditions or deny their exercise of certain civil rights. Also, foreigners enjoy, in the territory of the Republic, the guarantees granted to the nationals, save the limitations established by the Constitution or the law.” See Constituci6n de 1991 con reformas hasta 2005 [Political Constitution of 1991 through 2005 reforms], available at http://​pdba.​georgetown.​edu/​Constitutions/​Colombia/​col91.​html (June 16, 2006).

IADB: Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study-Colombia, http://​alca-ftaa.​iadb.​org/​eng/​invest/​COL-1.​HTM (May 16, 2006) [hereinafter IADB: Colombia], Sections 3.1 and 4.1.

Article 3 of Statute of Foreign Investment (Resolution 51 as amended), in The Investment Laws of the World, supra note 100. See also IADB: Colombia, supra note 121, Section 3.1b.

Article 23 of Statute of Foreign Investment (Resolution 51 as amended), in Investment Laws of the World, supra note 100. See also IADB: Colombia, supra note 121, Section 5.1.

Schneiderman (2000b).

Article 241, Colombian Constitution of 1994.

Colombian Constitutional Court Decision No. C-358/96, as cited in Schneiderman, supra note 125, at 107 and n. 176.

Article 58, Colombian Constitution as of 1994.

Colombian Constitutional Court Decision No. C-379/96, as cited in Schneiderman, supra note 125, at 107 and n. 178.

It was Article 14 in the 1979 Constitution. In the current Constitution, the Constitution of 1998, it is retained but renumbered as Article 13.

WTO: Trade Policy Review-Ecuador: Secretariat’s Report 18, WTtrPR/S/rev.1 (2005).

Article 15, The Political Constitution of the Republic of Ecuador 1998.

Article 16, The Political Constitution of the Republic of Ecuador 1979.

Article 14, The Political Constitution of the Republic of Ecuador 1998.

Article 32, The Law on Investment Promotion and Guarantees, in Investment Laws of the World, supra note 100.

Ramiro S. Cordero, Ecuador, in International Arbitration in Latin America, supra note 44, at 135.

Article 27, Mexican Constitution.

1973 Law to Promote Mexican Investment and to Regulate Foreign Investment, Official Gazetie, Mar. 9, 1973. Article 3 of this law provided:

Foreigners who acquire properties of any kind in the Mexican Republic agree, because of such action, to consider themselves as Mexican nationals with regard to these properties and not to invoke the protection of their governments with respect to such properties, under penalty, in case of violations, of forfeiting to the Mexican Government the properties thus acquired.

Regulations of the Law to Promote Mexican Investment and to Regulate Foreign Investment (as amendments), Diario Oficial de la Federaci6n (Mexico), May 16, 1989. It stipulated in Article 31:

When the “foreigners exclusion clause” is not in the company by-laws, the express agreement or covenant, which is an integral part of the company by­laws, whereby the present or future foreign partners of the companies in question shall be obligated to formally agree with the Secretary of Foreign Relations to be considered as nationals with respect to shares of said companies which they acquire or of which they are holders, as well as of the assets, rights, concessions, participation or interest which they hold in such companies, or else of the rights and obligations which they derive from the contracts in which the same companies are party to with the Mexican authorities, and to not invoke, for that purpose, the protection of their Governments, under the penalty, otherwise, of losing their equity interests in favor of the Nation.

IADB: Legislation for Foreign Investment Statutes in Countries in the Americas, Comparative Study-Mexico, http://​alca-ftaa.​iadb.​org/​eng/​invest/​MEX-1.​HTM (May 16, 2006) [hereinafter IADB: Mexico], Section 5.1.

Claus von Wobeser, Mexico, in International Arbitration in Latin America, supra note 44, at 160–62.

Canovas (1992).

See id. at 391. See also Daly (1994); Schneiderman, supra note 23.

Article 63, paras. 1–2, The Political Constitution of the Republic of Peru 1993 (as amended to 2005), in World Constitutions, supra note 92.

Preamble and Article 2 respectively, Legislative Decree No. 662 of 29 Aug. 1991, as in Investment Laws of the World, supra note 100.

Article 63, The Political Constitution of the Republic of Peru 1993 (as amended to 2005), in World Constitutions, supra note 92.

Pelipe 0. Parodi, Peru and Annex 1: Table of Adherence to the New York Convention, Panama Convention and Washington Convention, in International Arbitration in Latin America, supra note 44, at 194 and 439.

Article 301, The Constitution of the Bolivarian Republic of Venezuela (adopted at the referendum of Dec. 15, 1999), as in World Constitutions, supra note 92.

Article 151, The Constitution of the Bolivarian Republic of Venezuela (adopted at the referendum of Dec. 15, 1999), as in World Constitutions, supra note 92.

Bernardo Weininger & David M. Lindsey, Venezuela and Annex 1: Table of Adherence to the New York Convention, Panama Convention and the Washington Convention, supra note 44, in International Arbitration in Latin America, at 227 and 439.

Elisabeth E. Elijuri, Oil Opening: A Constitutional Challenge, available at http://​www.​natlaw.​com/​pubs/​spveenl.​htm (last visited Feb. 12, 2006).

Decision No. 0083 of the Political Administrative Chamber of the Supreme Court of July 15, 2004.