Lex Petrolea and International Investment Law: Law and Practice in the Persian Gulf

Cover
Half Title
Title
Copyright
Dedication
TABLE OF CONTENTS
Foreword
Acknowledgements
Abbreviations and symbols
Cases and arbitral awards
International instruments
Municipal instruments
CHAPTER 1 INTRODUCTION
	1.1 Background
		Iran
		Saudi Arabia
		Iraq
		Cooperation and competition
			Riyadh–Tehran
			Baghdad–Tehran
			Riyadh–Baghdad
			Similar resource endowments and “club memberships”
				Organisation of the Petroleum Exporting Countries
				Gulf Cooperation Council
				Arab League
				Organisation of Islamic Cooperation
		Dealing with the faithful
		Legal risk
			National oil companies
			Admission of FDI
			Domestic litigation v alternative dispute resolution
		Political and social risk
		Attracting foreign investment
		International investment law and foreign direct investment in hydrocarbon resources
	1.2 Definitions
		On the term “international investment law”
			Investment dispute
			Investment treaty arbitration
				Arbitration without privity
		International investment law as a field of legal scholarship
			Investment treaty
			General rules of international law
				Customary international law
				General principles of law
				Judicial decisions, arbitral awards and doctrines
			Common law of investment protection
				The Darwinian common law paradigm
		On the term “lex petrolea”
	1.3 Scope of the book
	1.4 Outline and methodology of the book
		Historical development
		Legal pluralism
		Common law of investment protection
			The common law hypothesis
		International law
			The compliance hypothesis
			The paradox of compliance with double standards
		Major hydrocarbon producers as subjects of the study
		Working assumptions and goals
CHAPTER 2 INTERNATIONAL INVESTMENT LAW
	2.1 Background
		International investment law: A law made for FDI
		Early jurisprudence and state–state investment disputes
			The Great War and the first wave of nationalisation
				Permanent Court of Arbitration, ad hoc tribunals and mixed claims commissions
				Permanent Court of International Justice
			Decolonisation and the second nationalisation wave
				Iran–US Claims Tribunal
				International Court of Justice
	2.2 Development of the international investment law
		Foreign direct investment: Emergence and evolution
			FDI in ancient times
			FDI and colonial empires
			FDI in the modern era
			Early investment disputes and their resolution
		A law governing all nations for all times
			Jus gentium
			The Caliphate and the Ummah
			Lex mercatoria
			Conflict of laws
		Treatment of aliens
			Laws for foreign men and foreign lords
			Jizya
			Things which belong to men in common
				Injury to the state of nationality
		Diplomatic protection
			Definition and origin
				Espousal of diplomatic protection as assertion of the right of the injured state
			Diplomatic protection, gunboat diplomacy and capitulation
				Colonial stigma
				The imminent peril exception
			Diplomatic protection as a method of protecting FDI
		Evolution of the standard of treatment
			Common standard of civilised nations
			Calvo doctrine
				Calvo clause
			Neer standard
			Hull rule
		Codifying the treatment and protection standards
			Early attempts
				From protection of foreign property to promotion of international economic development
			Abs–Shawcross Draft
			Harvard Draft
			Treaties of friendship, commerce and navigation
			New international economic order
			Bilateral investment agreements
				Early BITs
				OECD Convention on Protection of Foreign Property
				The BIT revolution
			International Centre for Settlement of Investment Disputes
				The convention and the centre
				Dispute resolution under ICSID
				ICSID additional facility
				The future of ICSID
			Multilateral investment treaties
				OECD
				WTO
				Energy Charter Treaty
				Chapter 11 of the North American Free Trade Agreement
			World Bank guidelines on the treatment of FDI
	2.3 International investment dispute-resolution regime
		In pursuit of peaceful dispute resolution
		Investor–state arbitration under investment treaties
			Consent to arbitration
				Arbitration without privity
				Methods of consent
				Fork-in-the-road clause
				Cooling-off period
			Applicable law in investment treaty arbitration
				Lex arbitri
				Law applicable to the arbitration agreement
				Lex causae
					International law
					Domestic law
					Decisions of domestic courts
			Treaty interpretation
				The Vienna Convention of the Law of Treaties
		Recognition and enforceability
			New York Convention
			ICSID
	2.4 Ambit of protection in international investment law
		Foreign investor
			Nationality of natural persons
				Genuine connection test
				Nationality of natural persons in investment treaty arbitration
			Nationality of legal persons
				Formalistic test
				Control test
					Ownership
					De jure control versus de facto control
					Direct and indirect control
				Piercing the corporate veil
				Shell corporations
					Nationality of convenience
					Round-tripping and migration of companies
				Denial of benefits
				Rights of shareholders
		Investment
			Interpretation of the term “investment”
			Umbrella clause
		ICSID jurisdiction
			Consent
			Jurisdiction ratione personae
			Jurisdiction ratione materiae
				The “duck” test
				The double-barrel test
	2.5 Substantive protections in international investment law
		National treatment
			The test: Appropriate comparator
		Most favoured nation treatment
			The test: Appropriate corresponding treatment obligation
		Expropriation
			Partial expropriation
			Indirect expropriation
				The sole effect doctrine
			The test: Substantial deprivation
			Creeping expropriation
			Non-compensable state measures
			Lawful expropriation
		Fair and equitable treatment
			Legitimate expectations
			Denial of justice
			Transparency
			Arbitrary and discriminatory actions
		Full protection and security
			Scope of application
				Legal protection
		Moral damages
CHAPTER 3 LEX PETROLEA
	3.1 Background
		Ubi societas, ibi ius
			Unique identity
			Unique challenges
		Inherent risks
			Risks inherent in E&P projects
			Risks inherent in E&P agreements
		Risks associated with sovereignty and applicable law
		Upstream hydrocarbon agreements
			Production sharing contracts
			Risk service contracts
			Concessions
				Tax royalty contracts
		Energy Charter Treaty
		Two faces of Janus
			Internationalisation
				International and quasi-international character
				Party autonomy
			Permanent sovereignty
				Stabilisation clause
				Renegotiation and adaptation
			Force majeure clause
			Hardship clauses
			Renegotiation clause
	3.2 Ambit of protection in lex petrolea
		Upstream enterprise as investment
		Attribution of the conduct of the national hydrocarbon company to the host state
	3.3 Substantive protections in lex petrolea
		National treatment and most favoured nation treatment
		Expropriation
		Fair and equitable treatment
CHAPTER 4 IRAN
	4.1 Background
	4.2 Iranian oil; a historical perspective
		Age of concessions
			Reuter concession
			Hotz and the Persian Bank Mining Corporation
			Tobacco uprising
			D’Arcy concession
				Burmah Oil Company and the concessions syndicate
				Anglo-Persian Oil Company
			Constitutional revolution
				Russo-Japanese war
				Constitutional monarchy
				Civil war
			1919 Anglo-Iranian agreement
			Armitage–Smith agreement
			Fall of the Qajar
			1933 agreement
				Anglo-Iranian Oil Company
				Oil and free speech
			The Shah is exiled, long live the Shah
				The calm before the storm
		Nationalisation
			The old man’s dream
			The old man’s nightmare
				Anglo-American coup d’état
			The consortium
			Joint ventures
			Risk service contracts
			St Moritz purchase and sale agreement
		Islamic revolution
			The imposed war
		National Iranian Oil Company
		Economic and financial sanctions
			Security Council resolutions
			US sanctions
			EU regulations
			Impact: To evade, or to avoid, that is the question
	4.3 The legal regime governing Iranian oil and gas
		Islamic Republic of Iran Constitution 1979 (as amended in 1989)
			Islamic republic’s political and legal regime
				Guardianship of the jurist
			State structure
				Leader
				Majles and the Guardian Council
				Expediency Council
				President and the cabinet
				Judiciary
			Economic model and ownership of natural resources
		Petroleum Act of 1987
		Five-year development plans
		Foreign Investment Promotion and Protection Act 2002
			Foreign Investment Board
			Overview of FDI protection under FIPPA
		Iranian foreign investment framework and the model bilateral investment treaty
			Investment
			Investor
			Standard of treatment
			Expropriation and nationalisation
				Compensation
			Dispute resolution
		Iranian buy-back contract
			Remuneration and cost recovery
			Risks
			Supervision
			Environment, employment law, training, health and safety
			Dispute resolution and applicable law
	4.4 Iran: Conclusion
		Iranian FDI protection regime
		Iranian upstream FDI protection regime
CHAPTER 5 IRAQ
	5.1 Background
	5.2 Iraqi oil; a historical perspective
		The Ottoman years
			Turkish Petroleum Company
			Young Turks
		Drawing lines in the sand
		Faisal of Syria to Faisal of Iraq
		The Iraq Petroleum Company
			The 1925 concession
			Basra Petroleum Company
			Mosul Petroleum Company
		Of kings and officers
			The Al-Ahali coup
			The infant king
			The second British invasion
				Watbah
				1948 Arab–Israeli war
				First oil boom
				The Baghdad Pact
			The republic of Iraq
		The dictator
			Rise of the Baathists
				Nasserist revival
				Saddam and the Tikritis
				Second oil boom
			Persian bête noire
			Gulf wars
				How to deal with creditors
				Known unknowns and the invisible WMDs
		Nationalisation of Iraqi oil
			Getting the upper hand
			In pursuit of control
			Iraq National Oil Company
				Early risk service contracts
				Soviet aid
			The final step
				Complete state control
	5.3 The legal regime governing Iraqi oil and gas
		State structure
			Executive
			Legislature
			Federalism
			Judiciary
		Ownership and management of resources
			Revenue distribution
		Iraqi foreign investment framework
			Investment Law 13
				Investment and investor
				Standard of treatment
			Hydrocarbon Law drafts
				INOC and Federal Oil and Gas Council
				Contracts
				Review
				The first and second bidding rounds
				The third and fourth bidding rounds
			Dispute resolution
	5.4 Kurdish oil
		The Kurdish question
		Kurdistan regional government and ownership of Kurdish oil
			Management
			Revenues
		Kurdish foreign investment framework
			Kurdistan Investment Law 4 (2006)
			Kurdistan Oil and Gas Law 22 (2007) and Model PSC
	5.5 Iraq: Conclusion
		Iraqi FDI protection regime
			Kurdistan and FDI protection
		Iraqi upstream FDI protection regime
			Kurdistan and upstream FDI protection
CHAPTER 6 SAUDI ARABIA
	6.1 Background
	6.2 Saudi oil; a historical perspective
		Puritans of Najd
			Aal-Sheikh and Aal-Saud
			The brothers
		Birth of the petro-state
			1933 concession
			ARAMCO
			The billionaire
			Renegotiation
			Tale of two concessions
			Saudi Aramco
			Age of reform
	6.3 The legal regime governing Saudi oil and gas
		State structure
			King and constitution
				Basic law
			Council of Ministers
			Consultative Council
			Judiciary
				Diwan Al-Mazalim
		Saudi foreign investment framework
			WTO
			Investment law
				Investor and investment
				Admission
				Treatment
			BITs
				Investment and investor
				Treatment
		Dispute resolution
			Alternative dispute resolution
			ICSID
	6.4 Saudi Arabia: Conclusion
		Saudi FDI protection regime
CHAPTER 7 CONCLUSION
	7.1 Common law of FDI protection
	7.2 Lex petrolea
	7.3 Conclusion
Appendix A: Model Iranian buy-back contract
Bibliography
	I Arabic resources
	II English resources
	III French and Latin resources
	IV Persian resources
	V Online databases and websites
Index