Desierto, Diane (Former Faculty)

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    Rawlsian fairness and international arbitration
    (University of Pennsylvania Journal of International Law, 2014) Desierto, Diane A
    Critics of international arbitration predominantly invoke the concept of "fairness" in four ways. First,fairness is associated with procedural due process concerns, involving the expected trade-off between party demands for efficiency and confidentiality in dispute resolution and in court litigation where there are expectations of full presentation and disclosure of evidence and transparency in the conduct of arbitration proceedings. Second, fairness is also used as a criterion for assessing dispute resolution outcomes, in regard to how arbitral tribunals choose their interpretive methodologies or retain subjective discretion when applying substantive law or rules to the given facts of a dispute. Third, critics assert unfairness in pointing out the absence of full judicial review of arbitral awards with merely a limited recourse to appeal as the control mechanism in international arbitration. Fourth, recent empirical attempts by scholars argue fairness synonymously with the legitimacy of community decision-making and participation rights, where questions have arisen in regard to perceived inequalities in the appointment of arbitrators, the composition of arbitral tribunals, and the ability of arbitrators to resolve public interest dimensions attaching to international arbitration disputes...etc
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    Calibrating Human Rights and Investment in Economic Emergencies: Prospects of Treaty and Valuation Defenses
    ( 2012) Desierto, Diane A.
    This article explores potential treaty defenses and valuation defenses for host States to mitigate or temporarily excuse non-performance of obligations owed to investors during economic emergencies, arising from the host State's good faith performance of obligations under the International Covenant on Economic Social and Cultural Rights (ICESCR). Defenses under the Vienna Convention on the Law of Treaties (VCLT), such as the lex posterior rule of application of treaties in Article 30 or treaty interpretation in Article 31, are of limited utility for avoiding primary breaches of the investment treaty, since these defenses considerably depend upon the host State's a priori notification of ICESCR obligations to investors at the time of the establishment of the investment. Lacking these revisions to the due diligence process, it is submitted that a host State can advance a more pragmatic defense by proposing equitable adjustments in the valuation of compensation, taking into account the host State's good faith performance of ICESCR obligations. Adjustments are justifiable and appropriate, since tribunals tend to accept an unrealistic definition of the fair market value' standard, based on market assumptions of perfect competition, for pre-crisis valuations of investments. The bloating of the pre-crisis valuation of an investment thus tends to increase its ultimate differential with the post-crisis valuation of an investment, leading to damage assessments beyond what parties could ordinarily have foreseen from the investment contract. While tribunals have predominantly referred to 'compensation' within the general law of international responsibility, they have problematically neglected the counterpart practice of equitable adjustment within this legal regime.
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    Asean's Constitutionalization of International Law: Challenges to Evolution Under the New Asean Charter
    ( 2011) Desierto, Diane A.
    This Article discusses the normative trajectory of international obligations assumed by Southeast Asian countries (particularly the Organizational Purposes that mandate compliance with international treaties, human rights and democratic freedoms), and the inevitable emergence of a body of discrete "ASEAN Law" arising from the combined legislative functions of the ASEAN Summit and the ASEAN Political, Economic and Social Communities. I discuss several immediate and short-term challenges from the increased constitutionalization of international obligations, such as: 1) the problem of incorporation (or lack of direct effect) and the remaining dependence of some Southeast Asian states on their respective constitutional mechanisms to transform international obligations into binding constitutional or statutory obligations; 2) the problem of hybridity and normative transplantation, which I illustrate in the interpretive issues regarding the final text of the ASEAN Comprehensive Investment Agreement, which draws some provisions from GATT 1994 and contains language similar to the U.S. and German Model Bilateral Investment Treaties; and 3)the problem of diffuse or insufficient judicial oversight within ASEAN, seen through lingering dependence on national court implementation despite the regional effort at standardization of legal norms on specific areas of trade, security and human rights. I conclude that leaving these problems unaddressed could impede Southeast Asia's vast potential to contribute to the project of constitutionalizing international law.
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    Icescr Minimum Core Obligations and Investment: Recasting the Non-Expropriation Compensation Model During Financial Crises
    ( 2012) Desierto, Diane A.
    This Article proposes a reassessment of current methods for valuing compensation owed by host States for breaches of non-expropriation standards of investment treaties, when the host State breaches such standards in order to fulfill obligations to its citizens under the International Covenant on Economic Social and Cultural Rights (ICESCR). The ICESCR minimum core obligations continue to have binding force during financial crises, despite the latter's impairment of host States 'fiscal resources and social protection capabilities. Current investment arbitral jurisprudence involving financial crises show that tribunals have not adjudged host States implementing interventionist social protection measures to be responsible for direct or indirect expropriation, but rather for violating other treaty standards such as the 'fair and equitable treatment" clause. Arbitral tribunals have generally determined compensation for such breaches by referring to a 'fair market value" standard, more synchronous with assumptions of perfectly competitive markets. However, the process of determining compensation for breaches of non-expropriation standards is governed by the general law of international responsibility, of which compensation is only one of the forms of reparations. Under the law of international responsibility, compensation is not intended to be punitive or expressive, but is evaluated according to the objective conduct of both the injuring State and the injured State, in order to reach the most equitable outcome that redresses damage to the injured State. Investment arbitral tribunals determining compensation for a host State's non-expropriation breaches should, thus, be similarly obliged to reach for equitable outcomes, rather than automatically resorting to the flawed definition of the 'fair market value" standard.
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    A Modern Integrated Paradigm for International Responsibility Arising from Violations of Economic, Social, and Cultural Rights
    ( 2014) Desierto, Diane A. ; Gillespiet, Colin E.
    From its entry into force in 1976 up to its present membership of 160 States Parties, the interpretation of the International Covenant on Economic, Social and Cultural Rights (hereafter, the Covenant) has always involved confronting normative and institutional complexities. Unlike the specific prohibitions contained in the International Covenant on Civil and Political Rights (ICCPR), Covenant norms purposely contemplate dynamic implementation over time, with the quality of treaty compliance expected to accommodate and adjust to States' governance capabilities, resource endowments, and fiscal contexts. Such interpretive variability, however, did not necessarily doom the Covenant to normative indeterminacy. Rather, as we show in Part I (A Normative Lattice: The Determinacy of Economic, Social, and Cultural Rights), the lattice-like normative system of the Covenant still enables a reasoned assessment of international responsibility and compliance by State and non-State actors with Covenant obligations. Covenant interpreters must first identify the legal social protection baseline applicable to the State (e.g. the 'minimum core content of Covenant obligations' that are jointly determined at the outset by each State Party with the Committee on Economic, Social, and Cultural Rights upon the State's accession to the Covenant), in conjunction with two overarching obligations flowing parallel with this baseline - the 'principle of nondiscrimination, which requires a State Party to guarantee non-discrimination in their implementation of Covenant rights; and the 'principle of non-retrogression, which commits a State Party to social protection conduct that will, at the very least, not fall below its pre-committed legal baseline of the 'minimum core' of covenant rights. These two principles and the 'minimum core' baseline comprise the starting point for the periodic assessment of compliance with the Covenant. Beyond this point, Covenant interpreters have to assess the State's continuing obligation to 'progressively realize' Covenant rights as the State's fiscal, economic, and governance contexts and capabilities accordingly adapt and develop over time. We further note that the programmatic, evolutive, and transactional nature of economic, social and cultural rights inimitably involves a spectrum of actors - States as well as non-State actors (such as international organizations). As we show in Part II (Expanding Universes: Covenant Interpreters and Violations by State and non-State Actors), international responsibility for Covenant violations could attach, not just for conduct of States and non-State actors that breach individual substantive obligations in Articles 6 to 15 of the Covenant, but also from breach of the overriding 'duty to cooperate' that was built into the telos and design of Covenant obligations. The duty to cooperate, as recognized throughout the General Comments issued by the Committee, is an obligation that has particular salience especially in times of economic emergencies or resource scarcities impairing States Parties' abilities to 'respect, protect, and fulfill' economic, social and cultural rights. As is axiomatic with the law of international responsibility, Covenant violations give rise to a corollary duty to make reparations. However, the ultimate form of relief granted would depend on the actual jurisdictional remit of the forum chosen to adjudicate the Covenant violation. In this respect, the proliferation of authoritative institutions that now interpret the Covenant (e.g. the Committee on Economic, Social and Cultural Rights; States Parties; international, regional, and national courts and tribunals; other specialized agencies of the United Nations) explains the diversity of forms of relief recognized as sufficient reparations for Covenant violations. In the Conclusion (Reframing International Responsibility for Covenant Violations), we point out the convergence of various dialectical achievements throughout nearly five decades since the entry into force of the Covenant: 1) the sustained quasi-legislative work of the Committee throughout its General Comments; 2) the continuing interpretive practices of national, regional, and international courts and tribunals in regard to economic, social, and cultural rights; 3) the broad participation and interpretive praxis of States, international organizations, and other non-State actors in the settled reportage procedures before the Committee; and 4) the recent adoption of empirical methodologies for assessing human rights compliance. These developments helped ripen a modern interpretive paradigm for the authoritative determination of international responsibility for Covenant violations.
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