Enfoques de la estrategia antes, durante y después

The Greek company Pantechniki S.A. Contractors and Engineers entered a contract with Albania’s General Road Directorate to carry out a project of construction of bridges and roads in Albania in 1994.491 _{Political unrest in the country in 1997 violent}

riots ensued in many parts of the country (also known as the Pyramid crisis or Albanian Anarchy),492 _{affecting the project. At one point Pantechniki was forced to abandon its}

work site and repatriate its officials and workers. The equipment and facilities of the company were looted and destroyed. In Pantechniki SA Contractors and Engineers vs.

Congo’ (2002) World Affairs 25; Thomas Turner, The Congo Wars: Conflict, Myth and Reality (Zed Books

2007).

489 _{See e.g. Ndikumana and Emizet (n 488); Theodore Trefon Saskia, Saskia Van Hoyweghen and Stefaan}

Smis, ‘State Failure in the Congo: Perceptions and Realities’ (2002) 29 Review of the African Political

Economy 379; Jean-Claude Willame, Patrimonialism and Political Change in the Congo (Stanford University

Press 1972); David Eaton, ‘Diagnosing the Crisis in the Republic of Congo’ (2006) 76 Africa 44.

490 _{For an account of political instability and crisis in developing countries and their relevance to foreign}

investments see e.g. Elizabeth Asiedu, ‘On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different? (2002) 30 World Development 107; Elizabeth Asiedu, ‘Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy,

Institutions and Political Instability’ (2006) 29 The World Economy 63; Bade Onimode, A Political

Economy of the African Crisis (Zed Books 1988); Mahmood Mamdani, ‘African States, Citizenship and War:

a Case-Study’ (2002) 78 International Affairs 493; Merilee Serrill Grindle, Challenging the State: Crisis and

Innovation in Latin America and Africa (Cambridge University Press 1996); Mahmood Mamdani, ‘Making Sense of Political Violence in Postcolonial Africa’ (2009) 39 Socialist Register 132; Ali Al’Amin Mazrui,

The African Condition: a Political Diagnosis (Cambridge University Press 1980); Larry Diamond, Juan Linz

and Seymour Martin Lipset, Politics in Developing Countries (Reinner 1990).

491_{See e.g., Pantechniki SA Contractors and Engineers vs. Albania, ICSID Case No. ARB/07/21, Award,}

30 July 2009.

492 _{For further detail on the issue see e.g. MA Smith, Albania 1997-98 (Conflict Studies Research Centre}

1999); Miranda Vickers and James Pettifer, Albania: From Anarchy to a Balkan Identify (New York

University Press 2000); Marcella Favretto and Tasos Kokkinides, ‘Anarchy in Albania: Collapse of European Collective Security?’ (1997) 21 British American Security Information Council Occasional Papers on International Security Policy <http://archive.today/GnHr0> accessed 29 April 2014; Also see Sands (n18) Chapter 6.

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Albania493 _{the claimants alleged that the state had violated various protections provided}

under the Greece–Albania BIT,494 _{including breach of the FET standard.}495

In favour of considering a country’s circumstances, the sole arbitrator of the tribunal acknowledged that,

‘The Claimant cannot say today that it felt entitled to rely on a high standard of police protection. (Indeed an absence of such expectations may well explain the logic and value to the contractor of Clause 11 of the Contracts by which the Employer accepted the risk of loss caused by civil disturbance). My view may have been different if police were present and turned their back.…[E]vidence was to the contrary. [Claimants] testified that the police said they were unable to intervene. That is crucially different from a refusal to intervene given the scale of the looting. I conclude that the Albanian authorities were powerless in the face of social unrest of this magnitude.’496 _{[Emphasis original]}

By distinguishing between outright negligence or refusal on the part of law enforcing agencies to protect the foreign investor and its property the state from inability to take appropriate action, without any mala fide, as in the present case, this dictum exempts the host country from liability. By stressing the fact that in the present case the claimant cannot claim that it was entitled to rely on a ‘high standard of police protection’, the tribunal is clearly emphasising that the foreign investors should not expect that level of protection from a country like Albania.

493 _{Pantechniki (n 491).}

494 _{Greece–Albania BIT, 1 August 1991}

<http://unctad.org/sections/dite/iia/docs/bits/greece_albania.pdf> accessed 29 April 2014.

495 _{Pantechniki (n 491) Paras 28 and 85.}

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The tribunal rejected all claims on merit. However the Tribunal did not give enough weight to the political unrest issue in this particular dispute, which was a vital factor for alleged breach of investment protection standards. Nonetheless the tribunal emphasised that such a lack of resources and incapacity in the situation is not a factor in determining state liability under international law.497 _{It stated that an assessment of ‘the}

human factor of obedience to the rule of law’ would guide the award,498 _asking,

‘Should a state’s international responsibility bear some proportion on its resources? Should a poor country be held accountable to a minimum standard which it could attain only at great sacrifice while a rich country would have little difficulty in doing so? No such proportionality factor has been generally accepted with respect to denial of justice. Two reasons appear salient. The first is that international responsibility does not relate to physical infrastructure; states are not liable for denial of justice because they cannot afford to put at the public’s disposal spacious buildings or computerized information banks. What matters is rather the human factor of obedience to the rule of law. Foreigners who enter a poor country are not entitled to assume that they will be given things like verbatim transcripts of all judicial proceedings – but they are entitled to decision-making which is neither xenophobic nor arbitrary. The second is that a relativistic standard would be none at all. International courts or tribunals would have to make ad hoc assessments based on their evaluation of the capacity of each state at a given moment of its development. International law would thus provide no incentive for a state to improve. It would in fact operate to the opposite effect: a state which devoted more resources to its judiciary would run the risk of graduating into a more exacting category.’499 _{[Emphasis added]}

497 _{Ibid Para 76.}

498 _Ibid. 499 _Ibid.

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Here the tribunal suggests that a host country’s resources should not be a factor in determining its liability under international law, suggesting that proportionality of resources of the host country is not empirically measurable. Thereby it denies any obligation to assess a host country’s resources and struggles in satisfying the expectations and demands of the foreign investors, or the reasonable expectation of investors based on observable facts at the time of investment. This confined approach differs from those that prevailed in Bayindir and Toto and even AMT, although Bayindir

occurred roughly concurrently with Pantechniki.

Developing countries often have a lack of resources,500 _{which invariably affects their}

ability to protect the resources of foreign investors.501 _{Decisions like Pantechniki render}

developing countries in an uncertain and weak position before investment tribunals on the issue of their political situation and lack of resources.

The crisis that prevailed in Albania at that time was so severe that the state had no control.502 _{The tribunal acknowledged that there was no mala fide on the part of the}

police authority but it did not make any attempt to discuss the scale of the political crisis and how such unrest impacted upon the foreign investor. This outcome puts a chill on

500 _{See e.g., Lack of resources threatens water and sanitation supplies in developing countries – UN}

<http://www.un.org/apps/news/story.asp?NewsID=41763#.U33Q7b5wYdU> accessed 29 April 2014;

Arye L Hillman and Eva Jenkner, Educating Children in Poor Countries (IMF 2004);

<http://yougov.co.uk/news/2012/09/10/what-causes-extreme-poverty-developing-countries/> accessed 29 April 2014; Lack Of Natural Resources <http://economics-exposed.com/lack-of-natural- resources/> accessed 29 April 2014; Potential benefits for developing countries – Design options for a

UNEO, Institute for International and European Environmental Policy

<http://www.ecologic.eu/download/projekte/200-249/221-01/221-01-report.pdf> accessed 29 April

2014; Clive Crook, Third World Economic Development

<http://www.econlib.org/library/Enc1/ThirdWorldEconomicDevelopment.html> accessed 29 April 2014.

501 _{Muchlinski, ‘Caveat Investor?’ (n 47) 538.}

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the position of developing countries, which often face political instability like that of the Albanian crisis in 1997, in the future.