As @jonathanweisman reports, Wikileaks has leaked the investment chapter of the Trans-Pacific Partnership. In response, critics and proponents of the Obama trade deal have trotted out their favored arguments against and for the deal’s investor state provision, which allows foreign investors to directly sue states. Some of the arguments on the pro side, such as the fact that the US has never lost a case, that 3,200 of these treaties already exist without the world imploding, and that the US is already sued a lot in domestic courts, are difficult to counter.
However, one argument raised in the piece seems less compelling. From the NYT,
[In 1999] California banned the chemical MTBE from the state’s gasoline, citing the damage it was doing to its water supply. The Canadian company Methanex Corporation sued for $970 million under Nafta, claiming damages on future profits. The case stretched to 2005, when the tribunal finally dismissed all claims. To supporters of the TPP, the Methanex case was proof that regulation for the “public good” would win out […] as long as a government treats foreign and domestic companies in the same way, defenders say, it should not run afoul of the trade provisions. “A government that conducts itself in an unbiased and nondiscriminatory fashion has nothing to worry about,” said Scott Miller, an international business expert at the Center for Strategic and International Studies, who has studied past cases. “That’s the record.”
This narrative about Methanex may pass muster in the court of the public opinion, but it has not fared as well in the courts of 
investment treaties.
The quirk about investment treaties is, there is no binding precedent. So it’s a fairly unpredictable legal system where different ad hoc tribunals come to different conclusions on similar matters and legal provisions. So the pro-regulatory reading of Methanex (which is not the only reading of the award, BTW, as I show below) has not been consistently followed in subsequent cases. Not even, as it turns out, by its creators (who are, as an additional quirk, also not bound by their previous decisions either). The rub? Citing any one case as support for a favored proposition is a pretty merit-less exercise.
To examine Methanex’s legacy, I pulled together the 32 finalized arbitration awards since that time that cite the decision. Although not binding, past cases do influence later ones, as evidenced through citation. Although not a random sample of the 137 cases in my dataset (which features all public and finalized merits cases from the first award in 1990 to the end of 2013), it is a nice cross-section of a good chunk of awards.
The Methanex decision was rendered by an ad hoc tribunal led by UK arbitrator VV Veeder, who was joined by Michael Reisman of Yale Law School (selected by the US) and Canadian lawyer J. William Rowley (selected by the investor). I will first highlight its conclusions on expropriation, which are the ostensible basis for some of the claims by Miller above. (Later on, I will address a few other aspects of the case.)
Todd N. Tucker, PhD 