In her new book, The Public Order Exception in International Trade, Investment, Human Rights and Commercial Disputes, Zena Prodromou analyses the application of the ‘public order’ exception to various legal obligations in international dispute resolution. In this post, Zena outlines the origins of the research and the key findings. In the context of the global coronavirus pandemic and the imposition of unprecedented restrictions in the name of public health, the book is a timely examination of the meaning and application of the concept of ‘public order’ under international law.
International adjudicators assessing exceptions provisions based on abstract legal terms – the appropriate benchmark: wanted dead or alive!
Our legal systems, domestic and international, make frequent reliance on abstract legal terms, which allow adjudicators to shape and craft the corresponding notions’ content depending on the circumstances and needs that prevail in the society at a given point in time. Public morals, public health, public safety, and public order are just a few examples. What is the role of international courts and tribunals (including arbitral tribunals), though, when parties to international disputes rely on escape clauses and argue that otherwise unlawful conduct is justified for the protection of public interest objectives (usually framed under abstract legal terms in the relevant international law provisions)?
A decade ago, this question might have been confined to the realm of legal philosophy. Since the Global Financial Crisis, however, nation states have increasingly sought to defend their actions by reliance on the concept of the ‘public interest’. (See, for example, Argentina’s arguments in international arbitration proceedings such as CMS Gas, Continental Casualty Company, and El Paso Energy). Today, the role of courts in determining what constitutes the public interest has assumed a practical, rather than a philosophical, importance.
The term ‘public interest’ and similar expressions, such as public morals, safety or policy, suddenly ran the risk of becoming “buzz words” that could potentially legitimize any activity depending on how the different domestic and international courts and tribunals decided to approach and substantiate them. Exceptional times call for exceptional measures. But what is the appropriate benchmark to adjudicate the exceptional, especially on the international level, in the absence of concrete and clear-cut terms?
To explore this question, the book isolates and looks into one particular expression of a public interest objective — the maintenance of public order (or public policy) — and analyzes the way in which different international dispute resolution systems have adjudicated exceptions provisions for its protection.
This comparative exercise initially sought to shed light on the content attributed to the term public order by different international and national courts and tribunals resolving international disputes. It soon became evident, however, that the term’s meaning was not the only obscure element concerning the application of the public order exception. The legal requirements for the exception’s application were equally unclear or even controversial depending on the relevant dispute resolution system under review.
Based on the above, the scope of this exercise eventually expanded to essentially encompass three distinct goals. First, to collect and systematize the relevant jurisprudence under each of the dispute resolution systems under review and to identify any points of controversy regarding the exception’s application thereunder as well as spell out the factors and grounds that have been determinative in upholding the public order exception. Second, to compare the relevant findings under the select systems from both a procedural and substantive perspective, to highlight the underlying commonalities and discrepancies, and to justify and rationalize these to the extent possible. And third, to ascertain whether the results of this comparative exercise may serve as a benchmarking tool and provide, at the very least, some clarity to both adversaries and adjudicators prospectively involved in any relevant international disputes.
As explained above, the idea for this research project came to surface in response to various restrictive measures undertaken by sovereigns against the backdrop of the Global Financial Crisis. Interestingly, by the time this publication was released, the international legal community was already debating the legality of exceptions provisions invoked for the protection of public health in the face of the global coronavirus pandemic (see, for example, the Guidance issued by the UN Office of the High Commissioner for Human Rights). In an era where the exceptional runs the risk of becoming the norm (and indeed so for an indefinite period of time), the need for more guidance on the application of exceptions provisions becomes even more acute. This book’s ambition has been to contribute in this direction.
The methodology: looking for the appropriate research sample
The first step in any comparative exercise is to determine the appropriate research sample. When it comes to comparing different prongs of international law, this first step becomes more challenging. Which segments should be taken into consideration and which ones may be excluded and for what reason? How valid is a comparison between fields that are constitutionally set up to serve different objectives? And most importantly, what is the best way to ensure that the comparison yields truly universal conclusions?
Faced with these questions, the book reviews dispute resolution systems under the World Trade Organization (WTO), the International Centre for Settlement of Investment Disputes (ICSID), the Inter-American Court of Human Rights (IACtHR), the European Court of Human Rights (ECtHR), and national courts enforcing foreign arbitral awards pursuant to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). These systems hear disputes relating to different subject matters (ranging from commercial and investment law to human rights); concern parties of a different nature (from disputes between sovereigns and individuals to disputes solely between sovereigns or private parties); and rely on dispute resolution bodies of different identities (including regional courts, international arbitral tribunals, and national courts).
This diversity was intentional, in order to ensure that any conclusions following from the comparison were indeed representative and global and thus solidify any findings of common themes among those systems. While there are inherent limitations for any sample, and it was not possible to be truly comprehensive in this study, the wide range of dispute resolution systems considered here nonetheless provides a novel view of the global application of the ‘public order’ exception that was not previously available.
Comparing, contrasting, condensing: 3 + 1 key findings on the nature and use of the ‘public order’ exception in international dispute resolution
#1: The term ‘public order’ boils down to four core pillars
The comparative analysis undertaken in the book indicates that, notwithstanding the admittedly different elements, which condition the application of the public order exception within the select systems, there is nonetheless a striking similarity or commonality in the content attributed to public order. This concerns the definitions offered by the competent dispute resolution bodies and/or the way in which the exception has actually been de facto applied. The term public order, therefore, appears to be predicated at least upon four key pillars, namely: (i) crime prevention; (ii) respect of law and justice; (iii) avoidance of disorder, unrest and social disruption; and (iv) preservation of national security.
#2: There are additional manifestations of public order jointly recognized by different combinations of dispute resolution systems
Certain of the select dispute resolution systems concur on potentially additional expressions of public order. These include morality, fairness, economic and social interests, as well as democratic and constitutional principles. The slight fluctuations in the actual manifestations of the term is arguably more a question of perspective than of actual substance. This is so to the extent that each different system has approached the public order exception from a different angle, depending on the nature of the disputes it is competent for; the factual circumstances it has been presented with; the overall aims and objectives it seeks to pursue; as well as its relationship and positioning vis-à-vis international law.
By way of example, national enforcing courts under the New York Convention frequently rely on international law obligations, such as anti-corruption and fraud treaties, to substantiate the content of public policy, compared to the IACtHR and ECtHR, which mainly rely on domestic legislation. Nonetheless, both systems agree that the term public order encompasses crime prevention and law compliance.
#3: Public order is a fluid term that shares certain common ground with other neighbouring public policy objectives
The respective provisions under the dispute resolution systems in question provide for an exception for the protection of the public order alongside various other objectives. Interestingly, there is a commonality between these objectives, too. For example, public morality is invoked in the context of all four systems under review here. The protection of national interests is common under international investment law, human rights law, and the enforcement of arbitral awards under the New York Convention, while the protection of peace and security is present under international investment law and human rights law.
The relevant jurisprudence under the respective dispute resolution systems shows that public order is in practice associated, at least to some extent, with various of the other objectives. The competent tribunals have either explicitly upheld the overlap between public order and such objectives or have implicitly adhered thereto by refraining from classifying the exact and precise ground on which the relevant arguments and factual situations under review are premised.
This confirms that ‘public order’ is a neighboring term to such other objectives, the level of proximity depending upon the content and meaning of each such goal. Moreover, an argument can be made that the overlaps between public order and other objectives indicate that public order is an elastic term, the outer limits of which are not precisely defined but may be flexibly extended to also capture factual situations that could potentially equally fall within the ambit of other public interest objectives.
#The +1: Defining the term ‘public order’ is not an end in itself, but a tool for assessing the application of exceptions
Interestingly, the tribunals under the relevant dispute resolution systems under review usually refrain from any attempt to precisely demark the lines between public order and related objectives under the respective exceptions provisions. This arguably indicates that classification or definition of the term is not, for the tribunals, an end in itself. To the contrary, the term ‘public order’ is a tool that assists in analysing factual situations that may justify an exception to the standard rules.
This is why, when presented with multiple grounds in support of a single exception provision, the competent tribunals have typically taken a holistic approach without trying to distinguish between the different public policy objectives. Consequently, the public order exception is being applied by the relevant tribunals in a non-formalistic fashion, placing emphasis on whether the factual circumstances under review qualify for an exception rather than on whether this should be classified as falling under one or another objective grounds. This approach has been common and universal across the different dispute resolution systems under review.
From the international to the transnational: commonality in globality
The common elements attributed to the term ‘public order’ identified in the book (some of which have been discussed here) indicate that, at the very least, there are certain fundamental values of behavior and practice that are accepted and shared by the global community as a whole. The fact that this conclusion has been the outcome of a comparison between diverse dispute resolution systems substantially strengthens this conclusion. This outcome advances the ongoing academic debate on the existence, meaning, content and, ultimately, practical importance of ‘transnational public policy’.
In its final chapter, the book revisits the original question and suggests that adjudicating bodies may rely on or, at the very least, draw from the content of transnational public policy (as this derives for instance from the sort of conclusions reached following the comparative exercise undertaken in this project) as a relevant benchmark in applying the public order exception. In times of constant and even unpredictable crisis, where exceptional provisions are increasingly invoked to justify restrictive decisions, domestic and international adjudicators alike join the frontline in safeguarding legality, the state of law, and democracy itself. This is why, when faced with abstract legal terms at the international level, it is important to take a step back and seek to draw inspiration from the common elements that bring us together as a global society. Hopefully, this book provides a concrete example of how this can be done in practice.
Zena Prodromou is a Senior Associate in the Brussels office of Quinn Emanuel Urquhart & Sullivan LLP specializing in EU and international law. She is also an external member of the Institute of European Law at the Katholieke Universiteit Leuven.