Domestic courts in the mosaic of states: Transformative constitutionalism and fair and equitable treatment

Chapter 6 moves the focus away from governments and towards domestic courts to explain how the transformative constitutionalism – as developed by constitutional courts in the region and by the Inter-American Court of Human Rights – may act as a mechanism for resisting and shaping international investment law. In a carefully articulated case study, the authors show how transformative constitutionalism create substantive limits on the fair and equitable standard of treatment – and they explain the procedural venues (both domestic and international) through which such limits can be imposed. Chapter 6 describes the public/private divide in investment arbitration and its interaction with fair and equitable treatment as a platform for transforming the investment arbitration regime in a decentralized mechanism of international public power. The authors turn to the interaction between the Colombian constitutional jurisdiction and the investment regime, before suggesting that the discussion on the public–private divide of international investment arbitration is today more relevant than ever, as it is instrumental in defining the appropriate standard of domestic constitutional review to be applied vis-à-vis the international investment regime. A private law mindset of the international investment regime requires accommodation of the domestic legal system, while a public law mindset opens a door for resistance through a broader interaction between the national and the transnational spheres. In this last scenario, constitutional courts need to give precise orders to the executive branch regarding the standards or wording that needs to be modified in the investment treaties. By not doing so, the authors conclude, domestic Courts fail to create a dialogue between constitutional law and the investment regime which may foster a more democratic investment regime.