When Some Are More Equal than Others: Unconscionability Doctrine in the Treaty Context
In recent years, many countries have begun to pull out of bilateral investment treaties signed in previous decades, dismayed by the extent to which the provisions of the treaties serve to protect the interests of investors even as they frustrate the prerogatives of government. The countries seeking to exit these agreements were often less politically sophisticated than their treaty partners at the time of signing. Often, these countries relied on external guidance from IGOs or even indirect
... r even indirect advice from the very countries they were negotiating with in deciding whether to sign these treaties. While unconscionability doctrine in contract law allows courts to deem contracts between unequal parties partially or totally unenforceable, international law treats sovereigns as equal parties and offers no such protection to weaker states. Historical discussions show, however, that less powerful states have long been concerned about the ability of more powerful states to coerce or otherwise pressure them into unfavorable treaties, and have sought unsuccessfully to introduce protections against the enforcement of unequal treaties in international law. This Article proposes a method for incorporating the kinds of equitable remedies pursued by courts in contract unconscionability cases into the decision-making framework of arbitral tribunals faced with interpreting bilateral treaties in the context of investment disputes. Even after you give a squirrel a certificate which says he is quite as big as any elephant, he is still going to be smaller, and all the squirrels will know it and all the elephants will know it. --Samuel Grafton 1 All animals are equal, but some animals are more equal than others.