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KinsellaLaw Web Log
• BLOG ARCHIVES
Wednesday, August 08, 2007
Hoffman Review of Rubins-Kinsella International Law Book:
Latest review of my 2005 book International Investment, Political Risk, and Dispute Resolution: A Practitioner's Guide, by Anne Hoffman, an international commercial and investment arbitration attorney with Python & Peter:
Book review [by: Anne K. Hoffmann, Python & Peter; forthcoming in Arbitration International N° 3, 2007] International Investment, Political Risk and Dispute Resolution – A Practitioner’s Guide by Noah Rubins and N. Stephan Kinsella. Published by Oceana Publications, a Division of Oxford University Press (2005), 769 pp. Price £90 [$155], ISBN 0-379-21522-5 The proliferation of arbitration proceedings conducted on the basis of BITs, and in particular the auspices of ICSID, naturally led to an increase of publications addressing this issue and the changing landscape of arbitration over the last years. Books dealing with this issue are often commentaries, basic introductions to the procedure of investment arbitration or reviews of investment awards.
The present book is different. It integrates the important issue of dispute resolution into the broader scope of international investment, explains the risks, in particular the political risk, associated with international investment and the legal framework of investment protection at large. It thus broadens the perspective of the reader and allows him to see beyond the everyday issues of the interpretation of the effect of an umbrella clause or the meaning of fair and equitable treatment in a BIT by placing these specific issues into a broader context and showing their interaction with others.
The book commences by analysing the role and effect of foreign direct investment on the global economy of the modern world. Thereafter, it is composed of three parts. Part I deals with the assessment and pre-investment management of political risk. Part II addresses the international law framework of investment protection and political risk and part III covers the issue of dispute resolution and political risk. Each of these three parts is subdivided into chapters and sub-chapters. When reading the first part, the reader, inter alia, is introduced to the various types of political risk and their measurement, is shown features which will help minimising the political risk, such as stabilisation and arbitration clauses as well as clauses guiding tribunals with regard to damages and interest rates. Lastly, he is familiarised with the various types of investment insurances existing. In part II, the authors explain the international law framework of investment protection and political risk, i.e. issues of international law in general, of state sovereignty, state responsibility and state immunity. The authors address the remedies for both states and investors under international law and their prerequisites before shedding some light on history and development of the customary international law of expropriation and investment protection, and thus those today often-used terms like indirect and creeping expropriation or national treatment. Finally, they deal with the substantive law of contemporary international investment protection. The lawyer who deals with investment arbitration will be familiar with this chapter as here – after introducing the network of modern bilateral and multilateral treaties – investment standards such as prohibition of expropriation without compensation, fair and equitable treatment, full protection and security, the umbrella clause, compensation methods etc. and their application are discussed. Lastly, in part III, the reader will be introduced to the jurisdictional particularities of investment arbitration, such as nationality requirements, exhaustion of local remedies or “forks in the road”, to the various arbitration rules relevant in this context as well as some of their prominent features. In the final chapters, the authors address the rather seldomly discussed topic of conciliation of investment disputes as well as the intervention of states in investment disputes. At the back, the book contains a variety of useful appendices, e.g. bilateral investment treaties of selected countries, an OPIC insurance contract, the Washington Convention as well as a compilation of online resources.
Thus, the first part of the book focuses mainly upon “practical” issues, namely on identifying political risk and reducing the chance that these risks will materialise. The second part addresses first general legal issues relevant to investments before focusing upon dispute resolution. It therefore is both a useful practical guide and competent source for newcomers and experienced practitioners alike in relation to international law and investment treaty arbitration where it explains general principles as well as concrete case law which has developed over the past years. Naturally, the book addresses the main cases which had an impact upon a certain issue, but will not discuss all cases decided in the context of investment arbitration – it is not a case commentary. Nevertheless, it contains vast footnotes which permit the interested reader to follow up on certain problems easily. At the same time, it explains to the practitioner less familiar with the running of an international arbitration proceeding the necessary steps from the notification of a dispute up to oral argument, including the difficult situation of the defaulting party – all of this with a view to the specificities of an ICSID arbitration and easier to access as other writings on this topic.
This book is not a lightweight and does not make for good bedtime-reading. Not being a classic law book, it is a guide which should find its place on the shelf of the person dealing with foreign investment who is interested to explore the various aspects of foreign investment and political risk in their broader context and with a particular emphasis on the legal aspects of this field. This will include, but not be limited to, the issue of dispute resolution. It is thereby well-suited for beginners in the area of investment arbitration attempting to find their way around a relatively new area of law as it covers the relevant issues comprehensively without getting lost in a degree of detail which will be the next step on the ladder of investment protection.
The authors described their goal as to write a guide which would “enable the investor to appreciate the risks associated with government interference in property rights, to minimize those risks and deal effectively with their consequences. But we also hope to promote understanding within host governments about investors’ expectations and concerns, to allow them to avoid conflict and maximize the benefits of foreign direct investment for their countries and constituencies.” The authors succeeded and thereby made a valuable contribution to exploring this topic. 
Lakatos-Legal Information Alert Review of Rubins-Kinsella International Law Book:
Yet another recent review/comment of my 2005 book International Investment, Political Risk, and Dispute Resolution: A Practitioner's Guide, by Holly A. Lakatos, Director of Public Services, Chicago-Kent College of Law Library, from the March 1, 2006 Legal Information Alert. The blurb used by the publisher is:
An important resource for anyone who is trying to understand the uncertain balance between the needs of sovereign governments, the interests of investors, and international law constraints... This book is an excellent reference work and should be included in any library that claims to have a 'good' international business collection. The full review is appended below (PDF version):
International Investment, Political Risk, and Dispute Resolution: A Practitioner's Guide. (Book review)
Publication: Legal Information Alert
Publication Date: 03/01/2006
Author: Lakatos, Holly A.
International Investment, Political Risk, and Dispute Resolution: A Practitioner's Guide. Noah Rubins & N. Stephan Kinsella. 2005. Oceana Publications, Inc. Hardcover. 769p. ISBN: 0-379-21522-5. $150.
[Note: This is an updated and expanded version of Protecting Foreign Investment Under International Law: Legal Aspects of Political Risk, Paul Comeaux & N. Stephan Kinsella (Dobbs Ferry, New York: Oceana Publications, 1997), ISBN: 0-379-21371-0448.]
Today's business lawyers need to have an awareness of political risk along with a firm foundation in international law in order to advise clients engaged in direct investments within developing nations. There is an uncertain balance among the needs of sovereign governments, the interests of investors, and international law constraints and anyone participating in such ventures must take this into consideration. International Investment, Political Risk, and Dispute Resolution is an important resource for anyone who is trying to understand that uncertain balance.
Divided into three parts, the authors of this guide provide methods by which attorneys may proactively minimize the exposure and effects of political risk at every step of the investment life cycle. They cover the issues from pre-investment management to the conciliation of investment disputes.
In part 1, the authors broadly divide political risk into seven different categories (expropriation, nationalization, and confiscation; regulatory interference; currency risk; civil disturbance; breach of state contracts; corruption; and trade restrictions) and discusses strategies for the "Assessment and Pre-investment Management of Political Risk." Part 2 is intended to establish. "The International Framework of Investment Protection and Political Risk," and here the authors trace the history and development of the customary international law of expropriation and investment protection. In part 3, they concentrate on "Dispute Resolution and Political Risk" and outline the arbitration procedure including how to establish arbitral jurisdiction.
The appendixes are substantial and include sample agreements, treaties, country risk reports, and a list of online resources. A Table of Authorities contains a valuable supplemental reading list of books and articles on the topic. Both the table of contents and the index are well thought-out and provide helpful access points to the information to be found in this book.
In the introduction, the authors claim that the book was written for a wide audience and that it will appeal to lawyers and non-lawyers alike. I cannot imagine any non-lawyer finding this book useful, especially since it does not contain a glossary. In addition, it is formatted as if it were a really, really long law review article with substantial footnotes on every page. Practicing attorneys, however, should find this guide accessible and easy to use. Law students will also find this guide useful as a supplement to any international business course.
The differences between the previous version and this one are substantial enough to warrant purchasing this new work. Though most of the same topics are covered, the new version covers them in much more depth. As an introduction to the topic, this book is an excellent reference work and should be included in any library that claims to have a "good" international business collection.
Holly A. Lakatos, Director of Public Services,
Illinois Institute of Technololgy,
Chicago-Kent College of Law Library
COPYRIGHT 2006 Alert Publications, Inc.
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