Pasquale De Sena, Lorenzo Acconciamessa
- Judicial reasoning — Relationship between international and domestic law — Theory of international law
Published under the direction of Hélène Ruiz Fabri, with the support of the Department of International Law and Dispute Resolution, under the auspices of the Max Planck Institute Luxembourg for Procedural Law.
1 The balancing test is a judicial decision-making technique aimed at dealing with conflicts between two or more values, principles, legal interests, or policies. It is one of the so-called argumentative and ponderative judicial techniques aimed at reconciling competing principles and the values underlying them (Pino, 2014, 541). The adjudicator, in managing these conflicts, shall take into account all the relevant circumstances of the case and weigh the underlying competing interests and values. The outcome may be twofold: in some cases, one interest or value completely outweighs the other, thereby only the prevailing one will be satisfied; in other cases, striking a fair balance leads to both the competing interests being protected to the greatest extent possible. One could also observe that the balancing test provides a rational basis for highly value-based decisions, insofar as it requires legal justifications and therefore prevents judicial arbitrariness (Stone Sweet and Mathews, 2008, 87–88).
1. The Proportionality Principle as the ‘Rationale’ of the Balancing Test Seen as a Way for Interpreting and Applying Principles
2 The ultimate rationale underlying the balancing test, seen as a way of interpreting and applying principles, is the principle of proportionality in a wide sense (sec C.1 below), which in international law requires that ‘a State’s act must be a rational and reasonable exercise of means towards achieving a permissible goal, without unduly encroaching on protected rights of either the individual or another State’ (Proportionality). Other sub-principles covered by this broad definition, eg reasonableness, suitability, necessity, and proportionality in the strict sense, influence the intensity and scope of the scrutiny. However, although the whole proportionality analysis—as framed by Robert Alexy—can be understood as a ‘balancing framework’, the proper balancing test is the last phase of the proportionality analysis (Kleinlein, 2011, 1149). It is an empirical evaluation of the relative weights and a trade-off of the competing principles or the underlying values.
3 In general, the balancing test provides a suitable methodological framework for interpreting and applying broad and open-ended normative provisions having a principle-type structure (sec C.2 below); as a consequence, it has found application in fields where such provisions are common, such as constitutional law of many States, international human rights law, European Union (‘EU’) law, international economic law, and international investment law.
2. Overview of the Entry
4 This entry starts with some brief remarks on the historical development of the balancing test/s in domestic legal systems in section B. Section C deals with the legal and theoretical foundations of the balancing test, while section D examines the structure of the balancing test as included within the framework of the proportionality analysis. Section E provides an overview of the case-law of some selected international courts and tribunals. In particular, section E.1 assesses the common use of the balancing test as an intra-systemic judicial tool for applying limitation or derogation clauses, or rules implicitly provided with such clauses; section E.2 deals with the inter-systemic balancing approach aimed at resorting to external principles for interpretative purposes or solving non-hierarchical conflicts between different international sub-systems. This analysis leads to the conclusion that the balancing test might become a fundamental tool for assuring the coherence of international law by allowing a dialogue on a case-by-case basis between its different regimes.
B. Historical Development
5 It is quite common for some scholars to refer to ‘proportionality’ and ‘balancing’ as synonymous. However, they historically followed different paths of development. As a consequence, other scholars argue that the balancing test should be distinguished from the proportionality analysis since they share only superficial similarities (Bomhoff, 2008, 558), while others consider that they converged and nowadays they are almost identical from an analytical point of view (Cohen-Eliya and Porat, 2010, 270). The idea is developed here that a strict connection stands out between proportionality and balancing (sec A.2 above) under legal theory as well as in the light of the case-law of international courts and tribunals, despite proportionality being basically a European concept, whereas the balancing of interests is basically an American concept.
1. Proportionality in the German Experience
6 The ‘proportionality analysis’ was developed in Prussia as a tool for assessing the legitimacy of a State’s measure interfering with individual rights. The first normative basis was Article 10 (2) Prussian General Law Code of 1794 and it was applied in the fields of police and administrative law, by insisting that public authorities choose only means that were least harmful to individual rights. The concept of proportionality was developed in the late eighteenth century by natural law scholars (Natural Law and Justice), who believed that individual rights pre-existed the State and were only partially given up in order to fulfil public interests.
7 After the entry into force of the German Basic Law of 1949, which stipulated a catalogue of fundamental rights, the proportionality analysis was incorporated in German constitutional reasoning. It was Krauss’s dissertation of 1953 that for the first time used the expression ‘proportionality in the narrow sense’ and developed the balancing test by highlighting that ‘if the measure [of the legitimacy of the restriction of a right] is only necessity, then a quite negligible public interest could lead to a severe right infringement’ (Stone Sweet and Mathews, 2008, 105).
8 German judges, resorting to such a methodological assessment, always ‘regarded themselves as acting within the framework of the formalist tradition’ (Cohen-Eliya and Porat, 2010, 274). The proportionality analysis, indeed, was and is considered a formalistic tool aimed at applying express constitutional provisions. However, there is also an equivalent of the American balancing (sec B.2 below) in the German tradition known as ‘balancing of interests’, an anti-formalistic approach developed by the ‘Free Law’ School.
9 The proportionality analysis migrated from the German context through EU law to the constitutional law of the Member States of the EU. Proportionality then spread in Central and Western Europe, Asia, and South America (Barak, 2012, 198–99). Lastly, it is resorted to in common law systems such as Canada, New Zealand, South Africa, Israel, and the United Kingdom (Stone Sweet and Mathews, 2008, 148–52).
2. Balancing of Interests in the American Experience
10 The balancing test in the American legal tradition, by contrast, was developed originally as an anti-formalistic judicial approach in private law but that spread into constitutional reasoning (Aleinikoff, 1987). According to this kind of a reasoning, judges have to ‘eschew the application of formal rules’ and, instead, have to balance the competing interests, both of the parties and the society, and to give judgment for the side with weightier interests (McFadden, 1988, 586).
11 The rationale of the development of the American balancing in fundamental rights review is quite different: the law in the United States (‘US’) provided for a strong textual basis for the protection of rights but did not formally allow their limitation. Therefore, scholars considered that the comparison between social values was decisive for determining what rule the judge had to apply (Stone, 1936, 10). According to Pound, the task of the legal order, and of constitutional judges, was exactly identifying and weighing social interests (1943, at 39). The balancing of interests theory then appeared in the judicial argumentation of the US Supreme Court between the late 1930s and the early 1940s, particularly in cases concerning freedom of speech and association.
12 The American balancing of interests has been described by Cohen-Eliya and Porat as an interpretative device being characterized for its ‘antiformalism and antiabsolutism’, given that it was hostile to the preference for rights over interests and to the idea that rights are immune from public interest consideration. Moreover, it was originally associated with judicial restraint: balancing, they thought, was a prerogative of the legislature (2010, at 283). However, judges started themselves to apply the balancing test, and nowadays it is a sign of judicial activism rather than judicial restraint and is structured as a ‘judicial opinion that analyses a constitutional question by identifying interests implicated and the case and reaches a decision or construct a rule of constitutional law by explicitly or implicitly assigning values to the identified interests’ (Aleinikoff, 1987, 945).
C. Legal and Theoretical Foundations
1. Underlying Principles
14 For international courts and tribunals, and also domestic courts, to resort to the balancing test, a legal foundation must be identified (Barak, 2012, 211). The principle of proportionality in the wide sense is exactly the rationale underlying the balancing test (sec A.1 above). However, the structure and the intensity of the review is different in the light of the guiding sub-principles the adjudicator resorts to (sec D below). In the practice of international courts and tribunals the distinction between proportionality, reasonableness, and other standards of review is not clear-cut. Sometimes, they merely use different terminologies for the same judicial reasoning aimed at weighing and balancing competing principles, interests, and values.
15 While proportionality ‘is applied nearly everywhere where constitutional review powers are exercised’ (Alexy, 2003b, 436), its qualification in the international legal order is still controversial. Proportionality is recognized in many primary rules of international law, such as in the law of the use of force, the law of maritime delimitations (see Maritime Delimitation Cases before International Courts and Tribunals) and international humanitarian law (Humanitarian Law, International). It has been argued that proportionality has already become a general principle of international law (Cannizzaro, 2000), a general principle of law (Peters, 2016), or a ‘meta-principle of public international law’ (van Aaken, 2009, 502). It can be considered, alternatively, as a general principle in foro domestico, identified from domestic legal orders and transposed into the international legal order (ILC, 2020, 6 ff), given its acceptance in the main legal systems worldwide (sec B.1 above), or as a general principle of international law, deducted from the abovementioned primary international rules (ILC, 2020, 36 ff). The principle of proportionality, however, is a secondary norm, in the Hartian sense, for it relates to norm interpretation and to the resolution of normative conflicts (Bonafé and Palchetti, 2016, 173). Moreover, it has been considered an instrumental principle for it guides the balancing process, not being itself subject to balancing (Sieckmann, 2018, 8). As the principle of proportionality is closely related to judicial argumentation relating to principles, it could not be evaded in the practice of international courts, making thus it possible to state that ‘the recourse to balancing and proportionality … is inevitable (at least in the majority of legal systems)’ (Silva Sampaio, 2018, 73).
(b) Reasonableness or Equity
16 Sometimes a looser standard of review is applied, and the balancing test is resorted to within the framework of reasonableness or equity. Similar to proportionality, reasonableness is a ‘conceptual tool that enables courts to balance values underlying competing teleological choices’ (Garrido-Muñoz, 2017, 460) which, however, imposes a looser and indeterminate standard. While proportionality ‘carries in-built limitations and is more determinate’ (Blusun SA v Italy, 2016, para 318), reasonableness is usually aimed at excluding arbitrariness and manifest inadequacy (Elettronica Sicula Case). Moreover, some scholars (eg Corten in Reasonableness in International Law) as well as some tribunals tend to merge the assessment under reasonableness and proportionality (Total SA v Argentina, 2010, para 123), or to consider that an assessment under the reasonableness standard is grounded in the principle of proportionality in combination with the principle of good faith (bona fide) (Garrido-Muñoz, 2017, 459). Others—with whom we agree—consider that what the International Court of Justice (ICJ), as well as other courts and tribunals, calls reasonability assessment, ‘in some ways, reflects “proportionality”’ (Crow, 2019, 302). Lastly, arbitral tribunals constituted under Annex VII of the United Nations (‘UN’) Convention on the Law of the Sea (‘UNCLOS’) consider that reasonableness encompasses a balancing assessment which includes the necessity and proportionality tests (eg Arctic Sunrise Arbitration, 2015, para 222).
2. The Norm-Type Distinction Between Rules and Principles
17 In legal theory and, we believe, in international law as well, the idea underlying the balancing test is the norm-type distinction between rules and principles. Norms, as normative statements aimed at orienting an action or a decision (Zagrebelsky, 2003), are the genus, while rules and principles are species.
(a) Legal Theory
18 The major advocates of such a distinction are Dworkin and Alexy. According to the former, while rules are applicable in an ‘all-or-nothing’ fashion and prescribe the legal consequence that follows when the conditions they provide are met, principles do not have a clear and pre-determined scope and only prescribe reasons pointing in one direction (Dworkin, 1977, 24–28 and 42). Principles, therefore, are abstract in nature, have no pre-determined scope of application (MacCormick, 2005, 180), and, usually, have an axiological content. If rules conflict, one necessarily invalidates the other; if principles conflict, the relative weight of each principle must be taken into account. According to Alexy, principles are ‘optimization requirements’ whose weight in concrete cases is determined by their background justification in the given context and which ‘require optimization relative both to what is factually possible and to what is legally possible’ (2014, at 52). Given that conflicts between principles are solved by assessing their weight, a principle can be trumped when the competing principle has greater weight (Alexy, 2002).
19 In domestic legal orders fundamental rights enshrined in constitutions are deemed principles and not rules (Alexy, 2003a, 135) and that is the reason why the balancing test in domestic legal systems has been developed mostly in the context of the judicial adjudication of fundamental rights (Kumm, 2004).
(b) International Law
20 In international law there is no clear distinction between ‘rules’ and ‘principles’, although the ICJ and the International Law Commission (ILC) ‘agree that the latter may be regarded as norms with a more general and a more fundamental character’ (ILC, 2019, para 151). The ILC considered that such a distinction ‘captures one set of typical relationships, namely those between norms of a lower and higher degree of abstraction’, although without further exploring its practical and methodological consequences (ILC, 2006, para 28). In the First Report on General Principles of Law, the ILC clarified that principles in international law are general ‘in the sense that their content has a certain degree of abstraction’ and fundamental ‘in the sense that they underlie specific rules or embody important values’ (2019, at para 153).
21 In any case, the norm-type distinction must not be conflated with the source-type distinction. Indeed, the distinction between customary international law and general principles of law pursuant to Article 38 (1) (c) Statute of the ICJ (1945) does not refer to different norm-types, but rather to different sources of international law. The distinctions at stake, however, might overlap.
22 Some customary and conventional norms can be principle-type norms as well, because of their general and abstract character and/or fundamental and axiological content (Draft Conclusion of the Identification of Customary Rule, para 3 of the Commentary to Conclusion 1). Therefore, they can be applied through a balancing approach (Dworkin, 1977, 82). Human rights, in particular, are generally considered as principle-type norms even when stipulated in treaty provisions (Kleinlein, 2017, 147) and, of course, when crystallized as unwritten international law in the form of general principles of law (Simma and Alston, 1988). Other treaty provisions, even outside the human rights framework, have a principle-type structure, eg many clauses in bilateral investment treaties (‘BITs’) (Investments, Bilateral Treaties). Moreover, when rules are, implicitly or explicitly, provided with clauses such as reasonableness, necessity, equity, proportionality, they are translated into principles (Dworkin, 1977), at least as far their application in relation to some competing relevant principles is concerned (sec E.2 below). Such assumptions allow us to set aside the much more controversial assumption that proportionality is, in the last instance, the ‘ultimate rule of law’ (Beatty, 2004) and that balancing is the ultimate judicial method for applying law in general and not only principles.
D. The Proportionality Analysis in General Legal Theory
23 Although the approaches of international courts and tribunals to balancing tests may vary, all of them have their roots, at least in part, in the proportionality analysis as framed by Alexy. A brief analysis of such a structure is then needed. The proportionality analysis requires, for a measure infringing a principle to be considered as legitimate, three separated tests (Alexy, 2014, 52).
1. Suitability/Adequacy Test
24 The first step consists in determining whether the measure at stake serves a legitimate purpose and is generally suitable for achieving that purpose. It is an assessment of the rational relationship between the means—which requires and produces an interference with a right or interest or value—and the aim. The principle of suitability therefore ‘precludes the adoption of a means that obstruct the realization of at least one principle without promoting any principle or goal’ (Alexy, 2014, at 52).
25 It will be shown that in international law intra-systemic balancing, a measure not fulfilling one of the legitimate purposes enumerated in the relevant limitation or derogation clause will fail the test (sec E.1 below). In inter-systemic balancing, legitimate purposes may derive from other fields of international law, binding the parties to a certain dispute, and the adjudicator might be required to consider, for example, human rights and environmental principles (sec E.2 below).
2. Necessity Test
26 The second part of the analysis is usually designed as a ‘least restrictive means’ test. The principle of necessity ‘requires that of two means promoting P1 [one of the conflicting principles] that are, broadly speaking, equally suitable, that one that interferes less intensively with P2 [the other principle] has to be chosen’ (Alexy, 2014, 53). As a consequence, if other less intrusive means that are equally suitable and effective do exist, the measure shall not pass the test, for the impaired interest shall not be sacrificed more than necessary.
3. Proportionality Stricto Sensu Test: The ‘Law of Balancing’
27 If the measure is deemed to pursue a legitimate aim, and be suitable and necessary to that end, the adjudicator weighs the benefit of the limitation of one interest or value and the other, ‘in order to determine which … value shall prevail, in light of the respective importance of the values in tension, given the facts’ (Stone Sweet and Mathews, 2008, 76). The assessment must be guided by Alexy’s ‘law of balancing’ according to which the benefit obtained by the adopted measure should consistently exceed the prejudice caused to the losing interest or value: ‘the greater the degree of non-satisfaction, or detriment, to one principle, the greater must be the importance of satisfying the other’ (2002, at 102). In other words, a reasonable and proportional relationship between the interference and the importance of reasons underlying the interference itself (Clérico, 2018, 33) must be kept. The assessment, divided into three stages, will be rational as long as the reasoning is justified by legal argumentations.
(a) Degree of Interference
28 Alexy places interference with principles on a scale going from ‘light’ to ‘moderate’ to ‘serious’, according to what he calls ‘principle of interference’ (2003b, at 440). The judge should bring forward the possible decisions and determine the intensity of the prejudice caused to the principles at stake. The degree of interference corresponds to the degree of fulfilment which the impaired principle would reach if the impairing measure would not be implemented.
(b) Abstract and Concrete Weights
29 The second phase aims at determining the intensity of the reasons justifying the limitation of the principles at stake. However, many constitutional principles do not have a higher weight compared to the others in general. The balancing test will therefore only consider their importance in relation to the concrete circumstances of the case.
30 Commensurability, moreover, is the main objection to the balancing approach: rights, principles, and values, it is argued, are incommensurable and, therefore, the whole theory of balancing would be grounded on a misleading assumption (Tzakyrakis, 2009, 471). According to Alexy, however, rights and interests are compared by reference to ‘their importance for the constitution’ (2003b, at 442), while Barak maintains that a ‘common denominator’ exists ‘in the form of the marginal social importance in fulfilling the public purpose and the marginal social importance in preventing the harm to the constitutional right’ (2012, at 484). However, the idea of the Constitution as a common denominator raises the question of which would be the common point of reference in international judicial adjudication (sec E.2(c) below).
(c) Comparing and Weighting the Colliding Principles: The ‘Weight Formula’
31 The concrete weight of one principle with respect to the other, which expresses the relative ‘weight of a principle under the circumstances of the case to be decided’ (Alexy, 2003b, 444) is then established by comparing, on the one hand, the seriousness of the prejudice caused to one principle and the other and, on the other hand, the concrete relative importance of one principle and the other. This is what Alexy calls the ‘weight formula’. The last phase of the balancing test consists in setting relationships between the previously established circumstances and evaluating them.
32 The result of the balancing test will be the establishment of a relationship of priority between the competing principles in the specific case (Sieckmann, 2018, 5). However, it should not be underestimated that ‘through the balancing exercises undertaken by judicial institutions, over time a network of relatively concrete rules derived from different principles develops’ (Kleinlein, 2011, 1163). However, the role precedents might play in the balancing test depends upon the circumstances of each specific case and on whether they are comparable to precedent cases, not on arbitrary ‘customary standards and hierarchies’ (Habermas, 1996, 259).
E. The Balancing Test in International Judicial Adjudication
33 International courts and tribunals resort to some forms of balancing for at least two different purposes (sec A.2 above): (1) when balancing principles and interests internal to the same regime, ie intra-systemic balancing; (2) in accommodating through interpretation competing principles and in solving normative and policy conflicts between different sub-systems of the international legal order, ie inter-systemic balancing.
1. Intra-Systemic Balancing
34 In a vast majority of cases, the intra-balancing test is resorted to in relation to treaty limitation or derogation clauses, which expressly refer to rights and interests whose protection might require, and justify, infringement of the treaty (Treaties). In these cases, courts or tribunals balance the interests protected by the treaty and those mentioned in the clause—which are therefore incorporated within the treaty and, therefore, are internal to the same system. In some cases, however, rules might be provided with clauses such as reasonableness, necessity, or proportionality, and they are therefore applicable through a balancing test as well (see para 22 above; para 38 below). Intra-systemic balancing is international law’s version of the German proportionality analysis, namely a formalistic approach based on the assumption that upholding the norm is the rule, while the infringement or limitation of such a norm must be justified in the light of competing interests and values which are expressly or implicitly mentioned in the relevant norm or in a separate treaty provision, the limitation or derogation clause.
35 International courts apply different balancing tests. Although the general structure is the same, the tests display different operational modalities concerning their aim and structure, the intensity of review and the level of deference paid to States. This subsection provides a simple overview of some selected courts and tribunals’ balancing case-law.
(a) The International Court of Justice
36 The ICJ resorts to a balancing test (Balancing Test: International Court of Justice (ICJ)) when a limitation clause is provided for in the relevant customary rule or treaty provision, whether implicitly or explicitly. The intensity of the review depends on the principle invoked by the Court, whether equity, reasonableness, or proportionality in the narrow sense.
37 In some cases, a balancing test is required by a general need for equity (Russo, 2015, 2), for example in assessing the existence of the right of a State to regulate navigation of rivers in its territory, which has to be balanced with the principle of free navigation (Dispute regarding Navigational and Related Rights Case (Costa Rica v Nicaragua); Navigation, Freedom of).
38 In other cases, a balancing approach is required since proportionality is an internal and express requirement of the relevant primary rules: eg of the customary rule on States’ power to resort to countermeasures (Gabčíkovo-Nagymaros Case (Hungary/Slovakia)), or of the customary rule on self-defence (Military and Paramilitary Activities in and against Nicaragua Case (Nicaragua v United States of America)). Proportionality then requires an act of balancing, similar to Alexy’s weight formula, between quantitative elements such as the injury suffered, and qualitative elements such as the importance of the protected interests and the seriousness of the injury.
39 Lastly, intra-systemic balancing is resorted to when reviewing the compatibility of States’ measures with a treaty, in the light of an express derogation clause. In the Oil Platforms Case (Iran v United States of America) the ICJ had to interpret Article XX (1) (d) 1955 US–Iran Treaty of Amity, Economic Relations and Consular Rights, according to which the States are allowed to adopt measures in breach of the treaty provided that they are ‘necessary’ to maintain international or national security. Judge Higgins argued that the term ‘necessary’ should have been interpreted, as a matter of general international law, in the light of the general principle of proportionality (Oil Platforms, Iran v United States, Separate Opinion of Judge Higgins, 2003, para 48). The need to apply derogation clauses through a balancing assessment, using the reasonableness and necessity tests, has been recently confirmed (Alleged Violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights, Iran v United States, 2021, para 112).
40 This begs the question of the relationship between proportionality, reasonableness, and the balancing test (sec C.1 above). The Whaling in the Antarctic (Australia v Japan: New Zealand Intervening) case is a clear example (Russo, 2015, 10). The Court had to review the exercise of the derogation power to the prohibition on whaling accorded by the UNCLOS ‘for the purposes of collecting scientific data’. The ICJ stated that the act had to be ‘reasonable in relation to achieving’ the objective and interpreted the term ‘reasonable’ as synonymous with ‘suitable’ (Garrido-Muñoz, 2017, 470). Then it assessed whether the measure was ‘necessary’ in the light of the circumstances of the case (para 67), under a least restrictive alternative test according to Alexy’s theory (Crow, 2019, 302). The case shows that reasonableness is nothing more than a less intrusive and less structured form of proportionality analysis, an ‘umbrella’ concept which covers suitability and necessity (Garrido-Muñoz, 2017, 472), but not proportionality in the narrow sense.
(b) The European Court of Human Rights
41 Balancing is a characteristic feature of the European Court of Human Rights (ECtHR) case-law (Balancing Test: European Court of Human Rights (ECtHR); see also European Convention for the Protection of Human Rights and Fundamental Freedoms (1950)). However, other international human rights judicial or quasi-judicial bodies resort to the balancing test (see Balancing Test: Inter-American Court of Human Rights (IACtHR); Balancing Test: United Nations Human Rights Bodies; Balancing Test: African Court on Human and Peoples’ Rights (ACtHPR)). Although the quest for a fair balance between general interests and human rights is ‘inherent in the whole [ECHR]’ (Soering v United Kingdom, 1989, para 89), the Court resorts to the proper intra-systemic balancing test in solving vertical and horizontal conflicts.
42 The balancing test for the purpose of solving vertical conflicts between individual and public interests is relevant in two classes of cases. First, when applying the limitation clauses provided for in, for example, Articles 8–11 ECHR, Article 1 Protocol No 1, and Article 2 Protocol No 4 to the ECHR (Handyside v United Kingdom, 1976), given that even a legal measure which pursues a legitimate interest has to be justified by a ‘pressing social need’ which outweighs its detrimental effects on the effective enjoyment of human rights (Sporrong and Lönnroth v Sweden, 1982, paras 69–64). Second, when States invoke the derogation clause pursuant to Article 15 ECHR, given that derogatory measures must remain within what is ‘strictly required by the exigencies of the situation’ (Aksoy v Turkey, 1996, paras 71–84).
43 Moreover, the balancing test is also resorted to if horizontal conflicts between individual rights exist, when the relevant limitation clause provides that individual rights might be limited to protect the rights of others (eg Art 10 (2) ECHR), or when in the circumstances of the case the exercise of individual rights might affect other individual rights (Wingrove v United Kingdom, 1996, para 57) or the same right (Evans v United Kingdom, 2007) of third individuals.
44 The intensity of the review of the balancing test is influenced by the margin of appreciation doctrine (Arai-Takahashi, 2002, 14), which represents the degree of deference the Court pays to Member States. The ECtHR usually avoids engaging in a balancing test itself ‘when [it] has been undertaken by the national authorities in conformity with the criteria laid down in the Court case law’ (Von Hannover v Germany (No 2), 2012, para 107), provided that individual’s rights have not suffered an excessive burden and domestic procedures accorded a possibility for weighing the public interest against that of the individual.
45 At least in theory, the margin of appreciation might trump Alexy’s idea of principles as optimization requirements, for it determines whether State authorities should have achieved the optimization of both interests or a mere ‘fair [not irrational] balance’ (James and ors v United Kingdom, 1986, para 51). However, the margin of appreciation is in itself an act of balancing, to the extent that it takes into account the weight of a given principle in relation to the circumstances of the case (Arai-Takahashi, 2002, 215).
46 As for the structure, the ECtHR does not always engage in the three-pronged proportionality analysis or, at least, does not expressly distinguish different phases (Šušnjar, 2010, 91). Sometimes the proper act of balancing is not resorted to. The Court, indeed, resorts to the balancing test rather hazily and in different ways in different cases, but Alexy’s theory—although mostly ‘collapsing into a single balancing question’—generally applies in its case-law (Greer, 2004, 433).
47 The Court has also developed a reasoning aimed at avoiding that balancing ‘results in rendering void the [relevant] rights when facing public interests’ (De Sena, 2016, 1010). The idea of noyau dur of rights, which is not subject to the balancing test, is based on the ‘justification blocking theory’ according to which human rights have a particular type of inviolability due to their non-derivative and fundamental nature (Rawls, 1971). However, the determination of the essence of the right that would be exempt from the balancing act is, in itself, an act of balancing (Alexy, 1986, 325–26).
(c) The Court of Justice of the European Union
48 The Court of Justice of the European Union (‘CJEU’) (European Union, Court of Justice and General Court), at least since the Internationale Handelsgesellschaft Case, resorts to the whole proportionality analysis (Balancing Test: Court of Justice of the European Union (CJEU)) in its three-pronged test (as framed by Alexy; Šušnjar, 2010, 163), although sometimes it is almost impossible to distinguish between the necessity and balancing assessments (Tridimas, 2006, 139). Before the CJEU the balancing test is applied both in its vertical and horizontal dimensions.
49 In its vertical dimension, the balancing test aims at assessing the legitimacy of national regulations in the light of EU law. In such cases, the CJEU has moved from a mere necessity test aimed at assessing whether a State’s measure trumped some Community/EU fundamental trade freedoms (Cassis de Dijon, 1979, para 8), to a proper balancing test (Council of the City of Stoke-on-Trent and Norwich City Council v B&Q plc, 1992, para 15). The balancing test within the wider framework of the proportionality analysis is resorted to also as a mechanism for the allocation of competence and coordination between the EU and Member States (Pfizer Animal Health SA v Council of the European Union, 2002, para 411).
50 In its horizontal dimension, the balancing test aims at assessing the legitimacy of EU regulations impairing States’ or individuals’ rights and interests and, therefore, operates as a proper conflict resolution technique (Kingsbury and Schill, 2010, 82). When the compatibility of EU institutions’ actions with the founding treaties is at stake, the Court recognizes a wide margin of appreciation and the measure will usually be quashed only when manifestly inappropriate or disproportionately affecting conflicting interests (United Kingdom v Council of the European Union, 1996, paras 57–67). Lastly, in assessing the legitimacy of limitations of individual freedoms as a consequence of States’ or EU institutions’ actions, Article 52 (1) Charter of Fundamental Rights of the European Union (Charter of Fundamental Rights of the European Union (2000)), which provides for a general limitation clause, applies. The protection of fundamental rights is a legitimate interest that justifies restrictions of other EU interests, in the light of a careful balancing (Omega, 2004).
51 Different intensities of the standard of review in the balancing assessment before the CJEU can be explained by reference to the different areas in which such a judicial technique is applied. In particular, the intensity is determined by institutional and substantive considerations, the former concerning the authority which has adopted the measure under review, the latter concerning the nature of the infringed right and the subject matter. In general, the intensity is lower when dealing with an EU measure, through manifest disproportionality, and stricter for State measures (Tridimas, 1999, 66).
(d) World Trade Organization Dispute Settlement Bodies
52 The balancing test has been progressively adopted in the context of international trade disputes (see also World Trade Organization (WTO); World Trade Organization, Dispute Settlement) in order to assess the relationship between trade and non-trade interests (Balancing Test: Dispute Settlement System of the World Trade Organization (WTO)). WTO treaties are, indeed, characterized by the presence of the so-called necessity clauses, such as Article XX General Agreement on Tariffs and Trade (‘GATT’) and Article XIV General Agreement on Trade in Services (‘GATS’), which allow trade-restrictive measures for the purpose of protecting legitimate aims. WTO panels and the Appellate Body (Appellate Body: Dispute Settlement System of the World Trade Organization (WTO)) have recently developed their balancing test (Andenas and Zlepting, 2008, 167; contra, Kleinlein, 2011, 1153). A balancing test is resorted to in each of the three phases concerning the application of such clauses.
53 In the first phase, the adjudicator assesses whether the measure falls within the scope of one of the legitimate aims. Given that these clauses incorporate in the treaty external principles concerning human rights, collective and individual health, and the environment (Hestermeyer, 2019, 218), the panel or the Appellate Body resort to systematic interpretation in order to determine the scope of these principles (Petersmann, 2019, 345; US – Shrimp, Appellate Body Report, 1996, para 134; US – Shrimp Case) through a balancing assessment pursuant to Article 31 (3) (c) Vienna Convention on the Law of Treaties (‘VCLT’; Vienna Convention on the Law of Treaties (1969)), see sec E.1(a) above).
54 The second phase involves the necessity test or the relating to test, depending on the text of the relevant clause. While they share the same structure and consist of an assessment of the relationship between the aim and the measure, they differ as to the intensity of the review and the level of deference that adjudicators pay to national authorities The level of deference will be higher in the relating to test for it ‘requires a looser degree of connection between the measure and the [pursued] aim’ (Andenas and Zlepting, 2008, 157), in the form of a substantial end-means relationship (US – Gasoline, 1996, para 19).
55 The balancing assessment has been introduced in the WTO necessity, or relating to, test under Article XX GATT in the Korea – Beef case; namely, in a dispute concerning the imposition of labelling beef origin for public health reasons. The Appellate Body stated that the meaning of the term ‘necessary’—which requires the assessment of the ‘extent to which the measure contributes to the realization of the end pursued’—includes a wider ‘range of degrees’ from ‘indispensable’ to ‘making a contribution to’. In the latter hypothesis, the necessity test involves a process of weighing and balancing a series of factors which include the contribution made by the measure to the achievement of the aim; the importance of the interests or values protected by the measure and the degree of interference with trade interests (Korea – Beef, Appellate Body Report, 2001, para 164). In the Brazil – Tyres case, the Appellate Body implicitly followed a three-pronged test, similar to Alexy’s theory (Brazil – Tyres, Appellate Body Report, 2007, para 178).
56 In the last phase, according to the chapeau clause of the exception, whether the measure has been applied in an arbitrary or discriminatory manner or constitutes a disguised restriction of international trade is assessed. Such analysis aims at ‘maintaining a balance … between the right of a Member to invoke one or another of the exceptions of Article XX, on the one hand, and the substantive rights of the other Members under the GATT 1994, on the other hand’ (US – Shrimp, para 156). If the three tests are satisfied, the trade-restrictive measure will be justified under the relevant WTO treaty.
(e) Convention on the Settlement of Investment Disputes between States and Nationals of Other States Tribunals
57 Investment arbitral tribunals, such as those established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (‘ICSID Convention’), may also resort to the intra-systemic balancing test in adjudicating investment disputes (Balancing Test: Investment Arbitration). Limitation or derogation clauses in the past were uncommon in BITs, but newer BITs often contain clauses similar to Article XX GATT, called ‘non-precluded measures’ (‘NPM’) clauses. They aim at precluding State responsibility for measures in breach of the treaty when they are adopted for public policy reasons, thereby incorporating external interests and values in the treaty.
58 While some of these clauses are self-judging, others are subjected to scrutiny of a third-party adjudicator, such as Article XI US–Argentina BIT (concerning the Reciprocal Encouragement and Protection of Investment, 1993), which allows measures necessary for the protection of peace and security, public order, and essential security interests.
59 In the Continental Casualty award, for example, the clause was applied through a balancing test. The Tribunal first assessed that the measure adopted in order to face the Argentinian financial crisis fell under the scope of application of the clause, for they aimed at protecting essential security interests. Then the Tribunal considered that, whenever a measure is not indispensable for pursuing a legitimate interest, its necessity should be determined by a process of weighing and balancing and by taking into account every reasonable alternative. In its view, Argentina’s emergency measures had ‘contributed materially to the realization of their legitimate aims’ (Continental Casualty Company v Argentina, 2008 (‘Continental’), para 196). Finally, it assessed whether alternative measures were available and concluded that those adopted by Argentina were the least restrictive ones in order to face the emergency and were necessary to maintain public order. According to the Tribunal, the measures were suitable and necessary within the meaning of the BIT, for no reasonable alternatives existed. It therefore concluded that Argentina had ‘struck an appropriate balance’ between the competing interests (paras 227) and that its measures were ‘applied in a reasonable and proportionate way’ (para 232).
60 The Continental tribunal added that some deference should be, in any case, accorded to the State (para 101). In this regard, some authors argued that NPMs clauses should be interpreted in the light of the ECtHR’s margin of appreciation doctrine (Burke-White and von Staden, 2010, 715–19), while others disagree (Bücheler, 2015, 237). One may however consider that, as the ECtHR often does, the whole proportionality analysis or the balancing assessment are influenced by some degree of deference towards States (Kingsbury and Schill, 2010, 101).
61 Nevertheless, one should also note that some scholars have expressly argued that arbitrators are not in a suitable position to engage in a weighing and balancing analysis when applying NPMs clauses (Kurtz, 2010, 367).
2. Inter-Systemic Balancing
62 It has been argued that the balancing test might also provide a useful ‘tool that can harmonize the relationship between … bodies of general or special international law’ (Schill, 2012, 108). In its inter-systemic version, indeed, the balancing assessment is realized between principles pertaining to the court or tribunal’s regime and external principles. It is thus the international law version of the American ‘balancing of interests’, a non-formalistic approach which weighs interests against each other even absent an express provision.
(a) The Relevance of External Principles
63 Indeed, whenever a right or interest is apparently guaranteed unconditionally or whenever a conflict arises between rights, interests or values protected in different sub-systems of international law (see also Treaties, Conflicts between), the balancing test might be relevant.
64 In some cases, it is resorted to through the principle of systemic integration pursuant to Article 31 (3) (c) VCLT: external rules and principles are taken into consideration as a source for interpretation of treaty provisions and the balancing test is useful for determining the ‘normative weight to be given to particular rights and obligations’ (ILC, 2006, para 474). However, systemic integration might not be sufficient in order to apply external principles within an international sub-system, for a line exists ‘between interpretation with reference to other norms and application of other norms’ (Pauwelyn, 2003, 217).
65 Therefore, in the context of inter-systemic balancing, the applicability of external principles—as factors relevant to the act of balancing—must be assessed in the light of the rules concerning the applicable law before an international court and tribunal (for example, Art 293 UNCLOS; Art 1131 North American Free Trade Agreement; Art 42 ICSID). However, as the ILC recently recognized, general principles of law ‘may not need to be expressly referred to in a statute or compromise for a court or tribunal to apply them’ (ILC, 2019, 10, note 27). As a consequence, the express applicability of external principles is not necessarily required when the balancing test is resorted to in order to balance values or interests that are relevant in the light of the circumstances of the case.
(b) Purpose of Inter-Systemic Balancing
66 Due to the fact that each sub-system of the international legal order has its own rules and values, so-called ‘harmonization techniques’ have been developed to deal with inter-systemic conflicts (Vranes, 2006). However, they are only capable of dealing with apparent conflicts, ie those that may be solved by interpretation. By contrast, no specific method is provided by international law to deal with effective inter-systemic conflicts. In such cases, the no rule of antinomy solution is applicable (Pulkowski, 2014, 20), with the consequence that ‘concrete solutions must necessarily be found on a case-by-case basis’ (Matz-Luck, 2007, 47). In the absence of specific rules, or when the relevant rules contradict each other, balancing the underlying principles could provide the suitable methodological framework for the solution of the case (Andenas and Chiussi, 2019, 16).
67 Resorting to the balancing test as an inter-systemic conflict resolution technique is completely appropriate in the framework of a pluralist legal system such as contemporary international law. The act of balancing is by definition not based on the prevailing force of one norm and underlying value over the other, but rather on its prevalence in a certain, specific case. Then, it starts from the assumption that the international legal order is an ‘heterarchy of goal-specific regimes’ (Pulkowski, 2014, 22). And indeed, with the exception of ius cogens principles, in international law there are no pre-established hierarchies. In the balancing assessment all principles share therefore the same abstract weight.
(c) Critiques and Main Issues regarding Balancing as an Inter-Systemic Conflict Resolution Technique
68 However, the balancing test as an inter-systemic conflict resolution technique has been criticized. Some scholars have pointed out that conflicts solved through balancing are those which require value-based and political choices that judges are not in the best position to deal with (Kleinlein, 2011, 1146). When facing an unsolvable conflict, they argue, the judge should issue a non liquet, which ‘may provide an incentive for States to fill the gap by normal law-making processes’ (Pauwelyn, 2003, 419). But one might observe that even a decision reached by balancing abstract legal principles might contribute to develop international law in the light of its changing needs (Jenks, 1953, 449).
69 Some authors have questioned the possibility of balancing non-hierarchical (Michaels and Pauwelyn, 2012, 359) and incommensurable (Pulkowski 2014, 77) values. Others have stressed that the ‘contextual criterion’ underpinning the balancing assessment is a threat to the international rule of law (Koskenniemi, 1990, 20). However, one can observe that even in the absence of a constitution of the international legal order, a ‘common point of view’ justifying the balancing approach can be identified in a basic coherent system of international ‘values’ (Bücheler, 2015, 101–3) or ‘principles’ (Kadelbach and Kleinlein, 2007, 342). By means of an extreme simplification, some authors consider that each sub-system represents one ‘constitutional’ value of the international legal order (Van Aaken, 2009, 484) and that the constitutive treaty of each international court could be considered as a partial or ‘functional constitution’ (De Wet, 2006). This theory would allow what Michaels and Pauwelyn have called the ‘functional approach to inter-systemic conflicts’, focusing on balancing the regulatory interests of each sub-system. However, theories concerning the existence of an implicit or functional international constitution are not widely shared by scholars.
70 Inter-systemic balancing also raises institutional concerns relating to the role of each court or tribunal, and its ability to weigh and balance the interests protected by its own constitutive instrument against external ones (Kleinlein, 2011, 1164). It has been pointed out, indeed, that international courts’ reluctance in engaging with inter-systemic balancing is related to their limited jurisdiction. Nevertheless, although most international courts are established for the purpose of interpreting and applying their constitutive instruments, nothing precludes them from applying a broader scope of international norms (Lamour, 2015, 36; sec E.2(a) above). In some cases, however, even if external principles are expressly applicable to the dispute, their application is subject to the condition of being compatible with the relevant constitutive instrument (Art 293 UNCLOS), or cannot add or diminish rights and obligations arising from the relevant treaties (Art 3 (2) and Art 19 (2) WTO Dispute Settlement Understanding). The adjudicator might not therefore feel authorized to prioritize external principles, by means of a balancing test.
(d) Examples of Inter-Systemic Balancing
(i) Balancing General International Law and International Human Rights Law
72 Although human rights do not carry more weight than other rules of international law, the balancing test can be resorted to solve conflicts ‘with other legal rules, traditionally intended to protect the ‘raison d’État’ (De Sena, 2016, 1016). In the past, the ICJ resorted to the balancing test for the purpose of identifying rules of unwritten international law, for example in the absence of State practice (Corfu Channel, United Kingdom v Albania, Merits, 1949; Corfu Channel Case), or with a view to adapting existing unwritten rules to changing needs (Genocide Convention, Reservations (Advisory Opinion)). Such a balancing assessment has been realized, in particular, in the light of the principle of the basic considerations of humanity. The balancing approach could have solved some recent disputes potentially involving conflicts between human rights principles and immunities.
73 For example, in the Arrest Warrant Case (Democratic Republic of the Congo v Belgium), the ICJ did not solve the dispute in the light of a conflict between principles. It concluded, instead, that no exception to the customary rule on absolute immunity from criminal jurisdiction and personal inviolability of an incumbent Minister of Foreign Affairs could be inferred from the existing States’ practice. By contrast, Judges Higgins, Kooijmans, and Buergenthal considered that the interest underlying the immunity rule, ie the promotion of good inter-State relations, and that underlying the principle of universal criminal jurisdiction for crimes against humanity, ie the battle against impunity for serious international crimes, should have been balanced against each other (Arrest Warrant Case, (Joint Separate Opinion), 2002, para 71, 75).
74 In the Jurisdictional Immunities of the State (Germany v Italy: Greece Intervening) case, the ICJ concluded that Italy had failed to respect Germany’s immunity from foreign jurisdiction and that the protection of victims of serious international crimes could not constitute an exception to the immunity rule, once again according to the existing practice. The ICJ excluded the existence itself of a normative conflict between the rule granting immunity to foreign States and the relevant rules of the law of armed conflict, having ius cogens status, given that the former is procedural in character, while the latter are substantive in character (para 93).
75 However, Judge Yusuf argued that the dispute should have been solved in Italy’s favour. He saw a conflict between the rule on State immunity and the general principles on the protection of basic human rights and respect for humanitarian law that have achieved a ‘growing normative weight’ (Jurisdictional Immunities of the State, Judgment (Dissenting Opinion of Judge Yusuf), 2012, para 30, 60). As a consequence, in Yusuf’s opinion, ‘recourse should be had to those principles, and to an assessment of the proportionality and legitimacy of purpose of granting immunity, when the rules on State immunity or the exceptions to it are either fragmentary or unsettled’.
76 The ECtHR has effectively applied, in contrast, the inter-systemic balancing test when dealing with inconsistencies between rights provided for in the ECtHR and general international law, namely, immunities. However, quite contradictorily, it adopted different approaches.
77 In a first group of cases, the ECtHR genuinely dealt with the conflict by considering the conflicting principles as optimization requirements, in line with Alexy’s theory. This happened when dealing with conflicts between the right of access to justice, as enshrined in Article 6 ECHR, and the rule on the immunity of international organizations (International Organizations or Institutions, Privileges and Immunities)—different from the UN—from State jurisdiction. Indeed, in two well-known cases, the Court considered that the recognition of the immunity granted to the European Space Agency did not violate Article 6 ECHR as long as access to justice was guaranteed within that international organization through alternative ‘means of legal process’ (Waite and Kennedy v Germany, 1999, para 74; Beer and Regan v Germany, 1999, para 63). The Court considered that the necessity of taking into account general international law could justify an interference with the applicants’ rights, as long as it was proportional and the essence of the right at stake was not impaired (see also Chapman v Belgium, 2013).
78 In a second group of cases, the Court held that one principle prevailed over the other, without engaging in a proper balancing assessment, despite the appearances of such. That group includes cases concerning the immunity of the UN (Stichting Mothers of Srebrenica v Netherlands, 2012), State immunity from jurisdiction (Kalogeropoulou v Greece and Germany, 2002), and immunity of State officials from jurisdiction. In the Al-Adsani Case, for example, the Court concluded that the limitation or nullification of the right to access to justice is admissible as far as it derives from the necessity to recognize immunity. In its view, a State measure which reflects generally recognized rules of public international law cannot be regarded as imposing a disproportionate restriction on access to the courts. The Court followed the same approach in Jones v United Kingdom (2014, paras 166 and 172). Although the principle of proportionality was expressly mentioned in these judgments, the ECtHR did not try to establish a rational relationship between human rights and immunities, which prevailed by definition (see also Hussein and ors v Belgium, 2021).
(ii) Balancing International Peace and Security and the Protection of Fundamental Rights
79 The balancing approach has been resorted to also in dealing with coordination problems between the UN legal system and other international law systems, such as ECHR and EU law.
80 In this regard the initial tendency has been that of stating the primacy of UN Security Council (‘UNSC’) Resolutions over human rights principles. The said approach was adopted both by the ECtHR (Behrami and Behrami, 2007) and the Court of First Instance (‘CFI’, nowadays General Court) of the then European Communities (Kadi, 2005), which did not attempt to balance human rights against international peace and security (De Sena and Vitucci, 2009, 214).
81 The CFI’s approach was finally overturned by the CJEU in 2008, by ruling in the appeal judgment in the Kadi Case that EU measures implementing sanctions established in UNSC Resolutions violated EU principles concerning the applicant’s fundamental rights. In spite of an apparent formal reasoning, the Court seems to have adopted a ‘value-oriented approach’ which led to a balancing of values between, on one hand, the UN interest in maintaining international peace and security, and, on the other hand, the EU interest in protecting individual’s fundamental rights, thereby integrating and coordinating the UN and the EU legal orders (De Sena and Vitucci, 2009, 227). In order to reach such a conclusion, the CJEU considered whether in the UN legal system there were alternative quasi-judicial procedures which could have secured the very essence of the considered individual rights, which were missing (para 332).
82 In subsequent cases, the CJEU equally adopted a balancing approach (E and F, 2010, para 57). Moreover, in the Kadi II judgment in 2013 the adoption of an inter-systemic balancing approach, through a comparative assessment of the conflicting legal values in accordance with Alexy’s theory, finally became patent. The CJEU concluded that the judicial review of EU measures implementing SC Resolution that interfere with individuals’ rights ‘is indispensable to ensure a fair balance between the maintenance of international peace and security and the protection of fundamental rights and freedoms of the person concerned … those being shared values of the UN and the European Union’ [emphasis added] (Kadi II, 2013, para 131).
83 It is worth to mention that the ECtHR’s Grand Chamber adopted a similar balancing approach when it stated that:
by limiting [judicial scrutiny of UNSC resolutions] to arbitrariness, the Court takes into account the nature and purpose of the measures provided by the Resolution in question, in order to strike a fair balance between the necessity of ensuring respect for human rights and the imperatives of the protection of international peace and security (Al-Dulimi and Montana Management Inc v Switzerland, 2016, para 146).
(iii) Balancing International Investment Law and International Human Rights Law
84 Reference to external principles through an inter-systemic balancing assessment, and despite the lack of express textual provisions indicating the priority of one right or interest over the other, can lastly be drawn from international investment law (Kingsbury and Schill, 2010, 78). And indeed, arbitrators have integrated human rights and environmental principles within international investment law (Schill and Djanic, 2018, 33).
85 First of all, arbitrators can try to reach harmonization through systemic interpretation, according to Article 31 (3) (c) VLCT, for ‘[p]romotion and protection of human rights are relevant considerations in any objective assessment of fairness and equity under international law’ (Simma and Kill, 2009, 704). For example, human rights principles have been resorted to in order to interpret fair and equitable treatment (‘FET’) clauses (Al Warraq v Indonesia, 2014, paras 540 ff) or expropriation clauses (Philip Morris v Uruguay, 2016, paras 290 ff).
86 However, in the absence of specific conflict provisions and when systemic interpretation was not sufficient, arbitrators have also resorted to balancing investors rights against human rights and environmental principles. The distinction between resorting to external principles as interpretative tools and applying them as a way of limiting investors’ rights and legitimate expectations tends to be subtle. Balancing has been resorted to in the application of FET clauses (Schill, 2010, 159), for that standard has been considered as encompassing various sub-principles, eg good faith, access to justice, due process, regulatory transparency, non-arbitrariness, non-discrimination, and reasonableness, and requires the protection of human rights and environmental principles both of investors in the face of the State and the population protected by the State itself. Consequently, arbitrators will balance investors’ interests against human rights and collective interests—such as health and the environment —of a certain population (Stone Sweet, 2010, 14). In the Saluka case, the arbitral tribunal argued for the first time that FET clauses do require a balancing of foreign investors’ expectations against State regulatory interests (Saluka v Czech Republic, 2006, paras 305 ff).
87 Arbitral tribunals have resorted to the balancing test also in cases of indirect expropriations (Expropriation, Indirect). According to the ‘policy power doctrine’, arbitrators consider that States have the power to restrict, without compensation, investors’ rights for pursuing public interests, albeit only in a proportionate measure. In the Tecmed v Mexico case, the tribunal considered that the investors’ right to property had to be balanced against public policies of public health, ecological balance, and the environment. In that case, it concluded that the interference with property rights was disproportionate in relation to the pursued aim (2004, para 112). The tribunal considered various elements, such as the importance of the public policy, the intensity of the interference with the investor’s rights, the investor’s conduct and its legitimate expectations; furthermore, it considered whether other less restrictive measures would have been equally appropriate. It seems that the tribunal has resorted to external principles for interpreting the expropriation clause of the treaty, instead of applying those external principles.
88 By contrast, in the abovementioned Philip Morris v Uruguay case (see Philip Morris Arbitration Cases (Philip Morris v Uruguay; Philip Morris v Australia)) the arbitral tribunal invoked Article 31 (3) (c) VCLT but then it instead applied external human rights principles in the context of the balancing assessment, with the purpose of justifying the State’s measures infringing the investor’s right (paras 290 ff). Indeed, it held that Uruguay, by obliging the adoption of graphic and textual anti-smoking warnings on packages and prohibiting brand variants, was complying with its international, and national, obligations concerning health protection.
89 An extreme hypothesis to be addressed—where external State’s human rights obligations could be balanced against investors’ rights—relates to situations in which a State adopts a measure which is aimed at remedying previous human rights violations, but the affected investors took no part at all in the violation. As Baetens highlighted with regard to the Foresti and ors v South Africa case (2010), a similar situation arose in South Africa when some measures were adopted in order to redress historical inequalities following the apartheid regime. This case was settled by an agreement, but the author has pointed out that ‘[i]f forced to decide [a similar issue], tribunals will be required to resort to a balancing act’ (2019, at 255).
90 Summing up, there are different cases in which investment arbitral tribunals have resorted to external human rights and environmental principles through a balancing assessment. Apart from some cases in which these principles are used for interpreting treaty clauses, this is precisely what has occurred when human rights principles have been referred to as external defences justifying States’ actions. Some scholars have nevertheless expressed their concerns in relation to the arbitrators’ approach of balancing investors’ rights against public or non-economic values and interests, in the absence of specific provisions conferring on them such a power (Alvarez, 2016, 171).
91 As shown above, the balancing test has been mostly developed in the context of judicial adjudication of conflicts between individual rights and public interests, or individual rights against themselves. However, it has be also used to deal with conflicts between two or more public or States’ interests or between States’ interests and interests of the international community as a whole. In any case, one should consider that ‘[i]nterests may be conceived in both public and private terms’ (Aleinikoff, 1987, 981). And indeed, the balancing test has proved suitable as a conflict-resolution technique in international law ‘if two competing public purposes or state interests are at stake’ (van Aaken, 2009, 503).
92 When faced with a legal vacuum or with the absence of an explicit or implicit criterion for solving a conflict, it is arguable that international judges have a duty to fill that vacuum through the balancing assessment. In the absence of a clear rule, they have indeed to resort to principles (Dworkin, 1977, 81 ff). Such a ruling, ‘even if not imposed by existing law, would be consistent with existing law and a sound development of existing law’ (Gardner, 2007, 66). And indeed, given that human rights, the protection of the environment, and other collective interests of the international community might not have crystalized yet into clear and specific rules, the resort to principles and balancing them against already established rules, namely, against the principles underlying these rules, might be the only way to enhance the development of those values in the international legal order (De Sena, 2016). International courts and tribunals, as we have shown, do sometimes resort to such a technique. Otherwise, they would be giving up to their duty to give due relevance to principles protecting human rights and other values of the international community. Moreover, if properly applied, resorting to the balancing test could lead to establishing rational relationships between conflicting norms and interests of international law, thereby leading the international legal order to a more coherent stage.
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