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Revisiting History

Abstract

Foreign direct investment and bilateral investment treaties have become key building blocks of the international legal and economic architecture. There are over 2,600 bilateral investment treaties (“BITs”) and a growing number of investor-state disputes. These disputes have revealed a number of tensions in the BIT architecture, including the discord between preserving sovereignty and attracting investment and concern over the scope of treaty obligations. Such tensions point to a growing backlash against the regime of investment treaty arbitration characterized by critiques of substantive bias, procedural shortcomings, and political consequences.

This Article explores the historical and jurisdictional factors that underpin the mounting critique. The Article places the international investment regime, which hinges on the BIT, in historical context. It asserts that the regime is characterized by a unique bargain in which developing countries traded part of their regulatory sovereignty for the promise of foreign investment. However, several recent studies suggest that BITs may not affect the flow of investment to signatory countries, calling into question the basis of the bargain. After laying the historical groundwork, the Article argues that the real bargain underlying the BIT regime is one in which countries bargained away sovereignty for the enhanced protection of the property and contract rights of foreigners. The nature of this bargain, together with the historical features of the BIT regime, resulted in the collapsing of two key binaries that formerly structured the field: the international/national and the public/private. The collapsed binaries highlight some of the regime’s internal contradictions and current challenges.

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Breaking the Genuine Link

Abstract

The concept of nationality traditionally mediated the relationship between the individual and the state in a bygone era in which international law regarded only the latter as a genuine subject of the law; today, its international legal functions have expanded. Yet, as in the past, it remains unclear whether and how international law limits the otherwise almost plenary competence of states to confer their nationality by their internal laws in a way entitled to international recognition. After the International Court of Justice’s (“ICJ”) 1955 judgment in Nottebohm, however, lawyers began to express this limit with a kind of doctrinal mantra: a state’s national, to be a bona fide national entitled to recognition as such at the international level, must have a “genuine link” to that state. This Article critiques the genuine link theory and proposes a functional account of nationality, which, it argues, is descriptively more accurate and normatively more appealing. Nottebohm is properly read as a narrow decision in which the ICJ tacitly invoked a general principle of law, viz., abuse of rights, to prevent what it saw as a manipulative effort by the claimant to evade a critical part of the law of war. But whatever the merit of this revisionist reading of Nottebohm, the genuine link theory proves anachronistic today in view of profound changes in the manifold functions that nationality serves in contemporary international law. To illustrate, the Article suggests that the abuse-of-rights principle would also be more appropriate and effective than the genuine link theory to regulate nationality in one contemporary context that has provoked debate recently: investor-state arbitration. But the abuse-of-rights principle is no panacea. An atomized conception of nationality, which has been liberated from the genuine link theory and regulated by its functions, would best serve the policies of contemporary international law in diverse subfields.

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Other Peoples’ Children

Abstract

The 1948 Genocide Convention, Article 2(e) declares that the forcible transfer of children from a protected group to another group is an act that amounts to genocide when it is conducted “with intent to destroy” the group, “as such,” at least “in part.” Although listed co-equally with mass killing and forced sterilizations, and despite what appear to be repeated violations, this provision has received little attention. This Article lays out the prima facie elements that must be satisfied to bring a claim of genocidal forcible child transfer. It asserts that a perpetrator’s mixed intents or benevolent motivations toward the individual children involved will not absolve the perpetrator when forcible child transfers amount to genocide. This Article also places Article 2(e) in historical context by considering the factors that led to its inclusion in the Genocide Convention, and contextualizes 2(e) within the emerging international case law on genocide. In addition, by fully developing the arguments around Article 2(e), this Article broadens current conceptions of genocide. In particular, it challenges current doctrine, which limits culpability to purely physical and biological destruction, by exploring the manner in which forcible child transfer has cultural effects that destroy protected groups. Finally, this Article highlights several programs, including the American Indian boarding school program and Australia’s Aboriginal removal programs, and argues that these could be considered genocide.

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The Dark Side of Shareholder Influence

Abstract

This article proposes a new, functional explanation of the different roles of non-shareholder groups (particularly labor) in different corporate governance systems. The argument depends on the analysis of a factor that has so far received relatively little attention in corporate governance research: the level of shareholder influence on managerial decision making. Pro-employee laws mitigate holdup problems—opportunism from which shareholders benefit ex post, but which will deter firm-specific investment in human capital ex ante. Since holdup takes place within what is considered legitimate managerial business judgment and all shareholders (both majority and minority) are its financial beneficiaries, the degree of managerial autonomy from shareholders is an important factor. In the United States, proponents of a stakeholder view of corporate law have argued that the insulation that U.S. boards of directors have from shareholders mitigates the risk of holdup of nonshareholder constituencies by shareholders, thus encouraging firm-specific investment such as investment in human capital. However, the large degree of autonomy of U.S. boards is unusual. This autonomy is eliminated, for example, by concentrated ownership, which prevails in Continental Europe. This article therefore suggests that, given their costs, laws aiming at the protection of stakeholders—such as codetermination and restrictive employment laws—may be normatively more desirable in the presence of stronger shareholder influence, particularly under concentrated ownership. The theory is corroborated by the observation that such laws tend to be more strongly developed in corporate governance systems with stronger shareholder influence. The United Kingdom, which has both stronger shareholder influence and stronger employment law than the United States, is classified as an intermediate case.

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Federal Common Law and Alien Tort Statute Litigation

Abstract

After Sosa v. Alvarez-Machain, lawsuits against corporations under the Alien Tort Statute (ATS) have become the focus of human rights litigation. One of the most important legal issues in this area is how corporate aiding and abetting liability operates in lawsuits alleging violations of customary international law. Federal courts and legal commentators are split over whether federal common law can and should define the relevant standard for aiding and abetting liability. When recently confronted with the issue, the Supreme Court failed to muster a quorum. In the academic debate, Professor Steinhardt argues for the Modern position that federal common law is the appropriate source for secondary liability standards under the ATS. On the other side, Professors Bradley, Goldsmith, and Moore argue for the Revisionist position that established federal common law principles bar the creation of a corporate aiding and abetting liability. This Article evaluates the Revisionists’ principles of federal common law. The Article argues that instead of barring the creation of corporate aiding and abetting liability, the Revisionists’ limitations
actually enable and encourage the creation and application of federal common law for ancillary issues, such as secondary liability, under the ATS.

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Of Prophets and Proselytes

Abstract

The case of proselytism presents a tangle of competing claims: on the one hand, the rights of proselytizers to free exercise of religion and freedom of speech; on the other hand, the rights of targets of proselytism to change their religion, peacefully to have or to maintain a particular religious tradition, and to be free from injury to religious feelings. Clashes between these claims of right are today generating acute tensions in relations between states and peoples, a state of affairs starkly illustrated by the recent Danish cartoons controversy. Irrespective of their resolution in any particular domestic legal system, how should such conflicts be addressed as a matter of international law? In noticing that surpisingly little attention has been paid to this question in the literature, this Article argues that the key to unlocking the puzzle is to recognize that the right to freedom of religion and belief generates competing claims not only with other fundamental rights such as free speech, but within the right to religious liberty itself. This insight suggests at least three challenges to theories of rights in the Lockean and Kantian traditions: first, the problem of the incommensurability of values, which the liberal algebra of rights is unable to reconcile; second, the complex conceptual problems associated with rights foundationalism; and third, the intrinsic value of communal goods and their relationship to personal autonomy. Once these limitations and blindspots in rights discourse are acknowledged, a value pluralist approach is argued to offer a preferable path by allowing us to reimagine liberal theory in intersubjective and hermeneutic terms.

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