Book Review by Sapphire Ng
Columbia Global Reports
Copyright September 2016
Shadow Courts offers an abbreviated overview of a less known instrument of public international law—the investor-state dispute settlement, or the ISDS. The author primarily furnishes a case against ISDS and the ISDS tribunal system—a supposedly “apolitical dispute resolution system” which operates under a supra-national legal system—, rounding up the book by briefly challenging the purported benefits of incorporating the feature of ISDS in treaties.
The book most prominently and unmistakably serves as a medium for which the author expressed critical views toward the ISDS and the functioning of ISDS tribunals. The author very forthrightly noted that in signing a treaty comprising ISDS, “a sovereign nation is delegating power to private arbitrators to effectively annul the authoritative acts of its judiciary.” Edwards also censured the ISDS as a mechanism that undermines “democratic governance,” jeopardizes “the ability of legislatures to regulate in the public interest,” and which challenges “the sanctity” of a nation's sovereignty.
The author spotlighted the germinating hostility toward ISDS in the international community—Europe was home to an anti-ISDS revolution, whilst countries including Bolivia, Ecuador and Venezuela are in “revolt” against the ISDS, as they apoplectically “denounced” the International Centre for Settlement of Investment Disputes (ICSID). Judgments of ISDS awards that distinctly favor moneyed multinational corporations at the expense of struggling countries in “pandemonium” inevitably stoke public outcry and backlash. ISDS verdicts have also been the fuel for “intellectual civil war[s]” in the international environmental and human rights community.
The book highlights the multiple flaws and shortcomings of ISDS at regular junctures. The author called attention to disturbing instances of conflict-of-interest as pertaining to arbitrators appointed to the ISDS tribunal panel; the inherent inequity built into the ISDS mechanism—a corporation, as opposed to a nation's government, enjoys the prerogative of being unable to “lose” an ISDS claim; the lack of recourse for a country to appeal a tribunal's decision; the insubstantial effectiveness of redress options available upon deliverance of an ISDS judgement; and the immanent subjectivity in ISDS arbitrations.
The book contains a handful of interesting examples of ISDS claims, those filed for example by, U.S. energy corporations——CMS, Enron, Sempra, and LG&E—against Argentina, the global oil company Chevron against Ecuador, and the American landfill management firm Metalclad against the Mexican government.
At more than one occasion, the author clearly attempted to make the case against the ISDS awards by appealing to the reader's sense of righteousness, morality, and even sympathy. In the case where the ISDS tribunal dictated an award of $2.3 billion—“the largest ISDS award to date”—to which Ecuador would be obligated to pay Occidental Petroleum, a U.S.-based oil company, the author presented evidence and data that emphasized the absurdity of the judgment. Occidental's annual revenue was noted as “twice” that of Ecuador's GDP; the $2.3 billion award “the equivalent of 15 years of human development vouchers for Ecuador's poorest families,” in a country where 45% of the population lived below the poverty line.
The author remained focused on her agenda. In another instance, she displayed clear commiseration toward Argentina. In the rulings against Argentina, the author underscored a particular determination by a tribunal—despite the fact that Argentina's financial crisis could potentially qualify as “a crisis,” its circumstances however was not deemed to be “severe enough to count as a crisis.” The author sardonically noted that “apparently” the cycling through “five presidents in three weeks,” and deaths of some “three-dozen” people killed in street violence was inadequate in fulfilling the criteria.
Considering that this book was intended to be written as a novella-length book specifically targeting readers who lead “busy” lives, the author undoubtedly achieved the goal of catering to such readers. It is rather unavoidable however, for one to covet for a much more comprehensive and detailed coverage of this exceedingly interesting and intriguing subject matter.
Whilst the length and content of this book is ideal for those looking to satisfy general curiosities regarding an unfamiliar issue or acquaint themselves with a new realm of knowledge, other readers accustomed to nonfiction books magnificent in terms of painstaking research and incredible depth of coverage could feel somewhat unsatisfied, or even disappointed, upon finishing the book. The limited details included in this book is such that it manages to whet the reader's appetite and generate excitement, but yet falls short in subsequently fulfilling the greater potential of a reader's expectation and desire for more knowledge and information.
This book could serve as a reasonable precursor however, should the author consider penning a full length book on a similar subject matter. A book more exhaustively researched, with greater in depth exploration of the multitudinous issues, along with more incisive evaluations would have been much more enjoyable and intellectually-gratifying, not to mention it would have left a greater lasting impression on the reader, and made the overall reading and learning experience more robust.
Disclaimer: I received an advance review copy of this book from NetGalley for this review.