International Investment Law and Public Procurement: An Overview

  • Marc BungenbergEmail author
  • Fabian Blandfort
Part of the European Yearbook of International Economic Law book series (EUROYEAR)


Public procurement law inter alia provides a means to foster competition in the purchasing of goods and services by governments. For tenderers incurring significant expenditures during the procurement procedure, legal remedies are of vital importance. Since these are not equally guaranteed by all states, the issue occurs as to whether international investment law can serve as a gap-filling regime to protect foreign tenderers against harmful state conduct during procurement proceedings. The chapter therefore examines the applicability of international investment agreements (IIAs) to the procurement procedure and, hence, the qualification of a tender and the pre-award expenditure as protected investments. However, the question is neither regulated adequately in most IIAs, nor has a definite approach developed in arbitral practice so far. While successful bidders can claim compensation for damages arising from the pre-award phase, the protection of unsuccessful bidders must be answered in a differentiated manner. The chapter argues that a distinction has to be made between an open and a pre-elective award procedure. In the latter case, the host state invites the foreign tenderer to participate in the procurement proceeding and thus provides the consent to admit the investment in its territory. Moreover, foreign tenders increase competition within the award procedure, fostering competition in the host state’s procurement market. Assuming that the IIA is applicable, the chapter argues that the ordinary business risks of participating in a tender procedure can be sufficiently taken into account when assessing liability.


Public procurement Notion of investment Pre-award-phase (protection) Legal remedies 


  1. Behrens P (2017) Europäisches Marktöffnungs- und Wettbewerbsrecht: Eine systematische Darstellung der Wirtschafts- und Wettbewerbsverfassung der EU. C.F. Müller, HeidelbergGoogle Scholar
  2. Bischoff J, Happ R (2015) The notion of investment. In: Bungenberg M, Griebel J, Hobe S, Reinisch A (eds) International investment law: a handbook. C.H. Beck, Hart, Nomos, Baden-Baden, pp 495–544Google Scholar
  3. Bjorklund A (2013) NAFTA chapter 11. In: Brown C (ed) Commentaries on selected model investment treaties. Oxford University Press, Oxford, pp 465–533Google Scholar
  4. Bovis C (2015) The law of EU public procurement, 2nd edn. Oxford University Press, OxfordGoogle Scholar
  5. Bungenberg M (2007) Vergaberecht im Wettbewerb der Systeme: Eine rechtsebenenübergreifende Analyse des Vergaberechts. Mohr Siebeck, TübingenCrossRefGoogle Scholar
  6. Bungenberg M (2015) Evolution of investment law protection as part of a general system of national resources sovereignty (and management)? In: Bungenberg M, Hobe S (eds) Permanent sovereignty over natural resources. Springer, HeidelbergCrossRefGoogle Scholar
  7. Bungenberg M, Titi C (2015) Precedents in international investment law. In: Bungenberg M, Griebel J, Hobe S, Reinisch A (eds) International investment law: a handbook. C.H. Beck, Hart, Nomos, Baden-Baden, pp 1505–1516CrossRefGoogle Scholar
  8. Burgi M (2018) Vergaberecht: Systematische Darstellung für Praxis und Ausbildung, 2nd edn. C.H. Beck, MunichGoogle Scholar
  9. Dolzer R (2013) Fair and equitable treatment: today’s contours. Santa Clara J Int Law 12:7–33Google Scholar
  10. Dolzer R, Schreuer C (2012) Principles of international investment law, 2nd edn. Oxford University Press, OxfordCrossRefGoogle Scholar
  11. Dreher M, Hoffmann J, Kling M (2015) Das sekundäre Binnenmarktrecht der öffentlichen Auftragsvergabe. In: Hatje A, Müller-Graff P-C (eds) Enzyklopädie Europarecht. Band 4: Europäisches Wirtschaftsordnungsrecht. Nomos, Baden-Baden, pp 1015–1088Google Scholar
  12. Fischer S (2018) Vergabeverfahren im Investitionsschutzrecht: Gemeinsamkeiten und Unterschiede der Standards des Investitions- und Vergaberechts. Nomos, Baden-BadenCrossRefGoogle Scholar
  13. Hamida W (2005) The Mihaly v. Sri Lanka case: some thoughts relating to the status of pre-investment expenditures. In: Weiler T (ed) International investment law and arbitration: leading cases from the ICSID, NAFTA, bilateral treaties and customary international law. Cameron May, London, pp 47–76Google Scholar
  14. Happ R, Rubins N (2009) Digest of ICSID awards and decisions 2003–2007. Oxford University Press, OxfordGoogle Scholar
  15. Hornick R (2003) The Mihaly arbitration: pre-investment expenditure as a basis for ICSID jurisdiction. J Int Arbitr 20:189–197Google Scholar
  16. Jacob M, Schill S (2015) Fair and equitable treatment: content, practice, method. In: Bungenberg M, Griebel J, Hobe S, Reinisch A (eds) International investment law: a handbook. C.H. Beck, Hart, Nomos, Baden-Baden, pp 700–763Google Scholar
  17. Johannsen S (2009) Der Investitionsbegriff nach Art. 25 Abs. 1 der ICSID-Konvention. In: Tietje C, Kraft G (eds) Beiträge zum Transnationalen Wirtschaftsrecht Heft 87Google Scholar
  18. Kennedy-Loest C, Thomas C, Farley M (2011) EU public procurement and competition law: the yin and yang of the legal world? Compet Law Int 7:77–82Google Scholar
  19. Kläger R (2011) ‘Fair and equitable treatment’ in international investment law. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  20. Matsushita M, Schoenbaum T, Mavroidis P, Hahn M (2015) The World Trade Organization: law, practice, and policy, 3rd edn. Oxford University Press, OxfordGoogle Scholar
  21. Metje T (2008) Der Investitionsschutz im internationalen Anlagenbau: Eine Untersuchung unter besonderer Berücksichtigung internationaler BOT-Projekte. Mohr Siebeck, TübingenCrossRefGoogle Scholar
  22. Reich A (1999) International public procurement law: the evolution of international regimes on public purchasing. Kluwer Law International, The HagueGoogle Scholar
  23. Robinson J (2004) ICSID cases on its jurisdiction: a serious problem for public/private partnerships for infrastructure in developing countries. Int Bus Lawyer 32:263–265Google Scholar
  24. Rubins N (2004) The notion of ‘investment’ in international investment arbitration. In: Horn N (ed) Arbitrating foreign investment disputes: procedural and substantive legal aspects. Kluwer Law International, The Hague, pp 283–324Google Scholar
  25. Sánchez Graells A (2011) Public procurement and the EU competition rules. Hart Publishing, OxfordGoogle Scholar
  26. Schill S (2006) Fair and equitable treatment under investment treaties as an embodiment of the rule of law. IILJ Working Paper 2006/6Google Scholar
  27. Schill S (2017) The impact of international investment law on public contracts. ACIL Research Paper 2017-07Google Scholar
  28. Schlemmer E (2008) Investment, investor, nationality, and shareholders. In: Muchlinski P, Ortino F, Schreuer C (eds) The Oxford handbook of international investment law. Oxford University Press, Oxford, pp 49–88Google Scholar
  29. Schreuer C (2005) Fair and equitable treatment in arbitral practice. Journal of World Investment and Trade 6:357–386Google Scholar
  30. Schreuer C (2007) Fair and equitable treatment (FET): interactions with other standards. TDM 4(5)Google Scholar
  31. Schreuer C, Malintoppi L, Reinisch A, Sinclair A (2009) The ICSID convention: a commentary, 2nd edn. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  32. Schütz M (1996) UN-Kaufrecht und Culpa in Contrahendo. Peter Lang, Frankfurt am MainGoogle Scholar
  33. Shirvani F (2016) Optimierung des Rechtsschutzes im Vergaberecht. Nomos, Baden-BadenCrossRefGoogle Scholar
  34. Snider Smith J (2008) Competition and transparency: what works for public procurement reform. Public Contract Law J 38:85–129Google Scholar
  35. Vandevelde K (2010) Bilateral investment treaties: history, policy, and interpretation. Oxford University Press, OxfordGoogle Scholar
  36. Wälde T (1996) International investment under the 1994 Energy Charter Treaty. In: Wälde T (ed) The Energy Charter Treaty: an East-West gateway for investment & trade. Kluwer Law International, The Hague, pp 251–320Google Scholar
  37. Williams D (2008) Jurisdiction and admissibility. In: Muchlinski P, Ortino F, Schreuer C (eds) The Oxford handbook of international investment law. Oxford University Press, Oxford, pp 868–931Google Scholar
  38. Yala F (2005) The notion of “investment” in ICSID case law: a drifting jurisdictional requirement? Some “un-conventional” thoughts on Salini, SGS and Mihaly. J Int Arbitr 22:105–126Google Scholar
  39. Yescombe E (2002) Principles of project finance. Academic Press, Boston and AmsterdamGoogle Scholar
  40. Yescombe E (2007) Public-private partnerships: principles of policy and finance. Elsevier, Burlington and OxfordCrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Saarland UniversitySaarbrückenGermany

Personalised recommendations