I. INTRODUCTION
The provision of reasons for administrative decisions is often said to be a constituent element of the principles of natural justice recognized in many jurisdictions. However, the question of whether administrators should be under a legal duty to provide reasons, and the rationales for imposing such a duty, have proved to be contentious in domestic systems of administrative law. Some jurisdictions (such as Australia and the EU) have addressed the issue legislatively, simply imposing the duty in administrative law statutes.Footnote 1 In other jurisdictions, the task has been left to the courts. In the UK, for instance, while continuing to deny the existence of any general duty ostensibly out of concern for administrative expedience, the courts have over time expanded the range of specific situations in which the duty will be imposed.Footnote 2
These domestic administrative law debates have increasing significance for international law. Although international law traditionally regulated disputes between sovereign states, it is commonplace now to recognize that elements of international law also regulate disputes between individuals and states, whether the individual's own state or a foreign one. As part of these developments, scholars in the newly-emerging field of Global Administrative Law (GAL) have placed emphasis on the way in which many areas of international law function somewhat analogously to domestic administrative law systems, providing rules and standards that control national administrative conduct.Footnote 3
GAL commentators have highlighted a wide range of doctrines familiar from domestic administrative law (including transparency requirements,Footnote 4 due process,Footnote 5 reasonableness and proportionality)Footnote 6 which are beginning to appear, in nascent forms, in areas of international law. This article seeks to contribute to these developments through an examination of another administrative law doctrine, the duty to give reasons, which has so far enjoyed only limited attention in the literature.Footnote 7 The article asks whether the same questions that characterize the debates at domestic level—uncertainties over the duty's existence, the role of adjudicators in imposing the duty in the absence of clear text, a mix of rationales used to support this imposition, tensions between natural justice and administrative expedience—have been replicated at the international level.
The article's focus is on international case-law from three main areas: WTO law, investment law, and (largely European) human rights law. These areas are chosen because they represent the major areas of international law where case law relating to the duty has arisen. This is perhaps not surprising, since—particularly with investment law and human rights law—the typical administrative law paradigm, of (international) adjudicators as regulators of (national) executive power at the behest of individual claimants, is strongest in these fields.Footnote 8
Furthermore, the focus here is on situations where international law controls national executive activity. The article does not examine situations where international law regulates international administrative or executive decisions. Thus, the work of bodies such as the UN Dispute Tribunal or the World Bank Administrative Tribunal, which hear disputes arising from (mostly employment-related) decisions made by international agencies, is left aside. In a similar vein, the article does not engage with the Kadi-triggered debate over the appropriate regulation of executive decisions made by UN organs such as the Security Council that affect individuals.Footnote 9 Because the focus is on case law and the role of international adjudicative bodies, the article also does not consider the application of the duty to give reasons via international non-judicial mechanisms, such as perhaps the WTO's Trade Policy Review Mechanism or its specialized committees.
Even within this scope, however, and as will be seen, it cannot by any means be said that a unified doctrine in international law on the duty to give reasons for national administrative decisions has now emerged. Indeed, those in the GAL project acknowledge that it is still in an early stage, and that international law does not yet provide perfect analogies for the existing doctrines of domestic administrative law common to many jurisdictions.Footnote 10 Given this, the present article does not aim to set out any roadmap for fashioning a coherent duty to give reasons in international law. Rather, alongside other efforts in the GAL literature,Footnote 11 its purpose is to conduct a first examination of the extent of the duty in international case-law, and to lay out the main rationales used by international adjudicators to support the duty's existence.
Section II of the article outlines the major rationales commonly given by domestic courts and in the literature that favour a duty to give reasons. Section III examines cases from the dispute settlement organs of the World Trade Organisation. Section IV turns to the arbitral awards of tribunals constituted under an international investment agreement such as the North American Free Trade Agreement (NAFTA). In Section V, the article discusses the case law of the European Court of Human Rights and (briefly) the International Court of Justice, interpreting international human rights law instruments. Section VI draws some comparisons between the three areas of international law, and Section VII concludes.
II. RATIONALES FOR A DUTY TO GIVE REASONS
At the outset, it is useful to describe briefly the two main groups of rationales typically put forward in the literature and by (domestic) courts for the imposition on administrators of a duty to give reasons.Footnote 12
The first group consists of instrumental rationales: giving reasons is important because it helps to achieve certain other valued goals. Thus, what might be termed the ‘accuracy rationale’ suggests that forcing administrators to give reasons for their decisions will lead them to make better, more accurate decisions. This rationale takes as its premise that decision makers make better decisions when they are required to think about, and set down reasons for, their decisions in a systematic manner.Footnote 13 Connected to this is the ‘review rationale’: courts and organs of review of these decisions often recognize that an unreasoned decision is very difficult to review. The provision of reasons facilitates review, in part by providing information to the reviewer on the relative expertise of the initial decision-maker,Footnote 14 and this extra scrutiny that the decision undergoes will in turn contribute to a more careful decision in the first instance.Footnote 15 A ‘public confidence’ rationale can also be identified. This rationale holds that the provision of reasons by public authorities is essential for demonstrating that laws are being applied consistently and carefully. In this way, reasons help to promote public confidence in the institutions of government.Footnote 16
The second main group of rationales for the duty stems from the intrinsic duty of fairness that decision makers are said to owe to the subjects of their decisions. Under this ‘respect rationale’, the focus of reasons is not on what their provision might help to achieve but rather on treating the subject of the decision with the appropriate respect for their personhood. Individuals need to understand why decisions have been made about them, particularly when those decisions have been made by the state sitting in a privileged position over the individual. The concern here is that affected individuals are ‘personally talked to about the decision rather than simply being dealt with.’Footnote 17
There are potentially overlaps and tensions between these groups. Galligan, for instance, has suggested that achieving accurate decisions is in fact one method of showing respect for persons, because accurately applying the law better allows people to realize the rights and normative expectations that they maintain.Footnote 18 Alternatively, it may be that the time and resources expended in ensuring accurate decisions in fact leads to less accurate decision-making overall, although it still fulfils the respect rationale. However, for present purposes, it is enough to acknowledge that these rationales are the major ones in play, and the article thus adopts them as reference points for understanding the international case-law, such as it presently exists, on the duty to give reasons.
III. REASONS AND WTO LAW
The WTO Agreements impose a duty on national authorities in some cases to give reasons for certain kinds of trade-related administrative decisions. Article XVIII of the Agreement on Government Procurement, for example, requires WTO Members to provide reasons to unsuccessful foreign tenderers for government business as to why their tender was not selected. WTO Members must also indicate ‘the characteristics and relative advantages of the tender selected as well as the name of the winning tenderer’. Similarly, Article 62 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires that certain administrative decisions, such as decisions to grant, maintain or revoke intellectual property rights, ‘preferably be in writing and reasoned’.
No cases have yet come before the WTO dispute settlement organs interpreting these ‘legislated’ instances of the duty to give reasons. However, dispute settlement proceedings have offered thoughts on the existence of and rationale for the duty in cases involving certain other WTO Agreements. In the most well-known of these cases, the Shrimp/Turtle case, the Appellate Body ruled on claims that the process used by US authorities for environmental certification of foreign fishing vessels constituted ‘arbitrary discrimination’ under Article XX of the General Agreement on Tariffs and Trade (GATT). The Appellate Body considered that the general lack of due process accorded by the authorities, including a failure to give reasons for certification decisions, contributed to a finding of arbitrary discrimination.Footnote 19 Although seemingly obiter, the Appellate Body also connected the lack of reasons to a violation of ‘the spirit, if not the letter’ of GATT Article X:3, which requires the ‘uniform, impartial and reasonable’ administration of laws affecting trade.Footnote 20
The Shrimp/Turtle case indicates that the duty to give reasons is one element of the general due process considerations underlying certain provisions of the GATT. However, while demonstrating the existence of the duty, the case does not discuss the rationales supporting it. In this respect, the case law arising under two other WTO agreements, the Anti-Dumping (AD) Agreement and the Agreement on Safeguards, has provided greater insight into the reasoning of the WTO dispute settlement organs.
The AD Agreement and the Agreement on Safeguards set up limited and specific exceptions to the basic provisions of the GATT. Ordinarily, the GATT, as an instrument that seeks to limit barriers to international trade, removes WTO Members’ rights to impose trade-unfriendly measures such as import duties. However, these rights are ‘returned’ to Member States in the situations described in GATT Article XIX and the companion Agreement on Safeguards, and in GATT Article VI and its companion AD Agreement. Because of this, the two Agreements are geared largely towards facilitating international review, and this has influenced the interpretation of the reason-giving requirements that Panels and the Appellate Body have found in them. The instrumental rationale predominates, with a focus on the role of reasons in assisting international judicial review by the WTO itself.
In the case of US—Steel Safeguards, the European Communities challenged certain import duties placed on steel products by the US, following an administrative decision by the US International Trade Commission (USITC). The WTO's Appellate Body found that various provisions of the WTO Agreements (particularly Article XIX of the GATT and Articles 2–4 of the Agreement on Safeguards) imposed an obligation on the US to present a ‘reasoned and adequate explanation’ for the USITC's decision. It connected this obligation to the effectiveness of its own review process, holding that a WTO Panel could not fulfil its mandated role of objectively assessing national administrative decisions for compliance with WTO obligations without full reasons being given for why those decisions were made.Footnote 21 The Appellate Body rejected the US argument that the absence of reasons did not necessarily mean that the decision violated substantive WTO obligations. Instead, it considered that, without a sufficient explanation for the decision, the reviewing Panel would have no option but to find a violation.Footnote 22
This reasoning expresses instrumental rationales for giving reasons. It seeks to ensure that international review by WTO organs, should it occur, be effective. The judgment gives indications that the WTO's primary focus in this respect is less on assisting domestic administrations to make ‘good’ or ‘correct’ decisions (the accuracy rationale), and more on enabling its organs to determine whether decisions are in fact good or correct (the review rationale). As mentioned above, this reasoning makes sense within the logic of the WTO system, since it is that system which grants WTO members the right to make decisions such as that of the USITC at issue. The rationale for the reasons requirement as expressed by the WTO in this case, it appears, aims to preserve the WTO's primacy in that field of domestic decision-making.
The case of US—Lamb further elaborated on this requirement to give a reasoned and adequate explanation of a determination of serious injury to domestic industry under Article 4.2 of the Safeguards Agreement. The Appellate Body in this case noted that the requirement of a reasoned and adequate explanation was not directly contained in the text of the Safeguards Agreement. Rather, it arose from a combination of the obligations in Article 4 and the standard of review applied by a Panel in assessing whether WTO Members have complied with their obligations under Article 4.Footnote 23 The standard of review, as mandated by Article 11 of the WTO's Dispute Settlement Understanding, requires a Panel to give an ‘objective assessment of the matter before it’. This standard lies somewhere between de novo review and total deference to the decisions of national administrators. The Appellate Body described an objective assessment as having two elements.Footnote 24 The first, which the Appellate Body labelled the ‘formal’ element, is an examination of whether national authorities have evaluated all relevant factors. The second, the ‘substantive’ element, recognizes that an evaluation of relevant factors cannot be simply a matter of form, a mere checklist of factors to be ticked off. The evaluation undertaken by national authorities must instead include substantive consideration of how these factors ‘have a bearing on’ (to use the language of Article 4.2(a)) the situation of the domestic industry. For the Appellate Body, the way in which a reviewing Panel ensures compliance with the substantive element is by looking for a reasoned and adequate explanation for the authorities’ determination. The existence of this explanation then allows the Panel to determine whether the WTO Member's authorities have complied with their WTO obligations. Importantly, the reasons requirement that the Appellate Body places on reviewing Panels will naturally flow downwards to national authorities themselves. Authorities are required to give a reasoned and adequate explanation because the Panels are required to seek one in conducting their review, and Panels will find a breach of WTO obligations if such an explanation is not present. This again supports the view that the WTO's approach to reasons in the sub-regime of safeguards is an instrumental one, aimed most directly at facilitating review by international organs.
Beyond the review rationale at work in US—Lamb, the case might also furnish evidence of a secondary, accuracy rationale in the WTO's conception of the duty to give reasons for national safeguards decisions. In addition to the analysis just discussed, the Appellate Body made some observations on the quality of reasons required.Footnote 25 It considered that Panels must review whether the authorities' determination ‘fully addresses the nature, and, especially, the complexities, of the data, and responds to other plausible interpretations of that data’. In particular, an explanation is not reasoned or adequate if ‘some alternative explanation of the facts is plausible, and if the competent authorities' explanation does not seem adequate in the light of that alternative explanation’. These requirements might serve as a nod to improving the quality of domestic decision-making, since they force national authorities to consider issues more fully before deciding.
A concern for accuracy and good primary decision-making may also be evidenced by comments in US—Line Pipe. Here, the Appellate Body considered that reasons provided under Article 4.2(b) of the Safeguards Agreement must be ‘clear and unambiguous’. The reasons cannot ‘merely imply or suggest an explanation’ for the action, but must offer ‘a straightforward explanation in express terms’.Footnote 26 Although these statements related to the obligation under Article 4.2(b) rather than 4.2(a) as in US—Lamb, the Appellate Body noted the parallels between the provisions and considered that the same approach applied to each provision.
In Thailand—H-Beams, however, the review rationale came to the fore again. In the case, the WTO was called on to assess reason-giving requirements found in the AD Agreement. The first instance Panel in the case took an expansive approach to certain obligations in the Agreement. In particular, Article 3.1 of the AD Agreement requires national authorities to base certain determinations of injury to a domestic industry on ‘positive evidence’, and further requires them to conduct an ‘objective examination’ of various factors in making the determination. Faced with interpreting this obligation, the Panel consulted dictionary definitions of ‘positive’ and ‘objective’. In light of the definition of ‘positive’ as including ‘formally or explicitly stated’, and ‘objective’ as including ‘presenting facts uncoloured by feelings’, the Panel concluded that Article 3.1 embraced an obligation that the reasoning supporting a determination be ‘formally or explicitly stated’ in the documents to which interested parties have access from the time of making the determination.Footnote 27 The Panel connected this interpretation to the ability for interested parties to challenge national authorities' determinations. It noted that, ‘without access to the disclosed factual basis and reasoning supporting the determination at least from the time of the final determination, interested parties and WTO Members would be unable to assess whether bringing a WTO dispute settlement complaint relating to the determination would be fruitful.’Footnote 28 Given the costs typically associated with making and defending WTO claims, particularly for developing country Members, the Panel viewed it as particularly significant that reasons be given for final determinations. As in US—Steel Safeguards, the duty to provide reasons was also an ‘essential aspect of the requirements concerning dispute settlement and meaningful panel review under the DSU and the AD Agreement’.Footnote 29 The reasoning as disclosed by national authorities, in other words, was essential as forming the basis of review by a WTO Panel.
The Panel took further support for its argument on reading a reasons requirement into Article 3.1 from Article 12 of the AD Agreement. This provision more explicitly requires national authorities to distribute to interested parties a notice containing ‘all relevant information on the matters of fact and law and reasons which have led to the imposition of final measures’, as well as ‘the reasons for acceptance or rejection of relevant arguments or claims made by the exporters and importers’. For the Panel, Article 12 provided ‘important context’ for interpreting Article 3.1, indicating the significance attached by WTO Members to the provision of information about national administrative determinations.Footnote 30
On appeal, however, the Appellate Body took a different view of the significance of Article 12, and of the width of the obligations expressed by Article 3.1. It preferred to keep what it saw as substantive obligations separate from obligations that it viewed as procedural. Thus, it found that Article 3.1 only dealt with the substantive obligations of WTO Members seeking to impose anti-dumping duties, regulating the evidence that Members were permitted to draw on in making determinations.Footnote 31 By contrast, it said, Article 12 established ‘procedural and due process obligations’ that were certainly important, but could not be read into the substantive provisions of Article 3.1.Footnote 32 Since no specific claims of violation of Article 12 had been made in the case, the Appellate Body did not further comment on that provision and the rationales behind it. Therefore, while the Appellate Body in Thailand—H-Beams declined to confirm the Panel's analysis of the instrumental utility of reasons for rights of defence and for judicial review, it did not explicitly reject it either.
Overall, then, WTO law can be seen to contain several explicit instances of the duty to give reasons, such as those found in the Agreement on Government Procurement, the TRIPS Agreement, and the AD Agreement. The duty has also been found implied in other WTO Agreements, such as the Safeguards Agreement and the GATT itself. While WTO case-law has not commented on the rationale behind the explicit versions of the duty or its general manifestation in the GATT, the review rationale has predominated when the dispute settlement organs have implied the duty in the more specific contexts of safeguards and anti-dumping.
IV. REASONS AND INTERNATIONAL INVESTMENT LAW
In some arbitrations brought by foreign investors against states under the auspices of the International Centre for Settlement of Investment Disputes (ICSID) or the NAFTA, tribunals have considered the duty to give reasons. The investment treaties under which these claims are brought typically make no explicit reference to the duty. However, in several cases tribunals have expressed a range of views on whether the duty is part of the obligation commonly contained in these treaties to provide ‘fair and equitable treatment’ to foreign investors. Despite the paucity of cases, tribunals' positions have been relatively mixed, such that even in cases that appear to support the existence of the duty no single rationale has been offered to underlie it. Often, tribunals have in fact avoided any discussion of rationales.
The ICSID case Joseph Lemire v Ukraine presents the clearest assessment of the duty. The claimant challenged the refusal by Ukrainian broadcasting authorities to grant him an operating licence following a tender. Domestic law set out various criteria on which licences were to be issued, but required no statement of reasons as to why particular applicants met the criteria better than others. The tribunal considered this to be a significant weakness of the Ukrainian licensing procedures.Footnote 33 It found that, while not determinative in itself, the lack of reasons contributed to facilitating arbitrary decision-making—a concern which, according to the tribunal, was at the heart of the ‘fair and equitable treatment’ clause in the US-Ukraine investment treaty at issue.Footnote 34
The Lemire tribunal's award provides evidence of a range of rationales justifying the connections drawn between the fair and equitable treatment obligation and Ukraine's failure to provide reasons for its licensing decisions. As in US—Steel Safeguards, the Lemire arbitrators held that, in the absence of reasons for rejection of the claimant's licence application, they would be strongly tempted to assume that the decision was made arbitrarily and thus in violation of the investment treaty.Footnote 35 On this view, reasons are a basic but essential prerequisite to meaningful review. Similarly, as in Thailand—H-Beams, the arbitrators connected the presence of reasons to the feasibility of review. However, the award evinces more concern for domestic review processes than the WTO Appellate Body. In this respect the tribunal stated that a lack of reasons ‘jeopardizes the possibilities of public scrutiny and of judicial review’, since a ‘Court cannot judge the reasonableness of [the broadcasting authorities’] decision to award the tender to one participant or the other, if there is no formal explanation of the reasons which prompted the decision.’Footnote 36 The lack of reasons would further have the effect of preventing review of anything but procedural irregularities during the tender.Footnote 37 Also, the tribunal's concern to limit arbitrary decision-making suggests a ‘public confidence’ rationale in play: namely, giving reasons demonstrates to the polity that laws are being applied consistently, in like manner to like situations. The tribunal thus appears to base the rationale for administrative reason-giving more on substantive improvements in the quality of domestic decision-making and governance.
Together with these instrumental rationales, though, the Lemire tribunal expresses individualistic, intrinsic rationales for reasons, connected to respect for the claimant as a person. In condemning the absence of reasons, the award explains that an unsuccessful bidder such as the claimant was unable to ‘ascertain why his application was rejected, how he was ranked with regard to other participants, and what he could do to improve his chances to be successful in the next bidding’.Footnote 38 Giving reasons on this respect rationale does nothing to facilitate review or improve decision making, but caters to individuals' need to understand the treatment accorded to them by a decision maker. The tribunal did not privilege this rationale over others, though; instead, it appeared to discuss all the rationales mentioned as equally justifying the importance of the duty to give reasons.
Rumeli Telekom v Kazakhstan is another case in which a lack of reasons contributed to a finding of breach of the fair and equitable treatment standard, commonly found in investment treaties. Two aspects of the case are arguably relevant here. The first aspect of Rumeli relates to the termination of the state contract governing the claimant's operations in Kazakhstan. The termination by the state was done without following the contractual requirements of first suspending the contract and giving reasons for the suspension. The tribunal found that this constituted a breach of contract; but, interestingly, it went further to find that the contractual breach also amounted to a breach of the Turkey-Kazakhstan bilateral investment treaty.Footnote 39 Ordinarily, a simple breach of contract will not amount to a violation of an investment treaty.Footnote 40 The tribunal here appeared to place special emphasis on the procedural failings by Kazakhstan's state entities in terminating the contract, namely the failure first to suspend the contract and to give reasons. In the tribunal's view, the termination was ‘arbitrary, unfair, unjust and lacked in due process’.Footnote 41 This finding may well have assisted the tribunal in pushing the state's failures over the line from an ordinary contract violation to a treaty violation. Ultimately, though, Kazakhstan's procedural duties were sourced in the state contract itself, and it was perhaps the presence of this contractual duty to give reasons that made it easier for the tribunal to find that the investor had not been treated fairly and equitably. From this aspect of Rumeli, then, it is difficult to conclude that the tribunal viewed investment law as containing a general duty to give reasons as part of the fair and equitable treatment standard.
However, the second aspect of the case is clearer in this respect. Following the termination, a committee was established by Kazakhstan's Ministry of Industry and Trade to review the termination and attempt to settle the dispute prior to the arbitration. The committee released a three-page decision, described by the tribunal as ‘summarily reasoned’,Footnote 42 which concluded that the contract had been lawfully terminated. The arbitral tribunal also took issue with this finding, noting that the minimal grounds given by the committee justifying the termination were not even the same grounds as those on which the state had attempted to justify the actual termination. Combined with the committee's failure to afford a hearing to the claimant before deciding that the contract had been validly terminated, the tribunal held that the process had ‘lacked transparency and due process and was unfair, in contradiction with the requirements of the fair and equitable treatment principle’.Footnote 43 This aspect of Rumeli better demonstrates that a failure to give reasons for decisions of state administrative entities will contribute to a breach of fair and equitable treatment, and moreover that any reasons that are given must be both sufficient (something more than ‘summarily reasoned’) and accurate, in the sense of representing the actual reasons for the decision. The case does not, however, offer any particular discussion of the rationales underlying the duty, focussing instead on whether such a duty exists at all.
Investment tribunal case-law also provides several examples of situations where the reasons provided by administrative authorities were challenged by claimants but ultimately found sufficient by the arbitral tribunal. In International Thunderbird Gaming Corporation v Mexico, the claimant had argued that a domestic administrative process, used to determine whether certain gaming equipment was prohibited under Mexican law, was arbitrary and unfair contrary to the claimant's rights under Article 1105 of the North American Free Trade Agreement (NAFTA). In response, Mexico pointed to the reasoned decision that set out the basis for the domestic agency's conclusions. The tribunal noted that the 31-page decision reviewed the evidence presented by the claimant at the administrative hearing, and discussed relevant legal grounds for prohibiting the equipment under Mexican law. It concluded that the decision was adequately detailed and reasoned, and so it found no evidence that the administrative process had been unfair or arbitrary.Footnote 44 In making this finding, the tribunal again did not offer any thoughts on the rationale for the reason-giving requirement. Nevertheless, the decision at least confirms that the provision of reasons can prevent breaches of investment treaties.
In a brief analysis in Glamis Gold v USA, the tribunal considered that a ‘manifest lack of reasons’ for a decision would violate the customary international law minimum standard of treatment of aliens, viewed by the tribunal as equivalent to the fair and equitable treatment standard in NAFTA Article 1105.Footnote 45 It discussed a legal opinion issued by a domestic agency to the claimant in the case, which according to the claimant demonstrated a manifest lack of reasons. The tribunal disagreed, finding that the opinion's 19 pages of legal and factual analysis constituted sufficient reasoning, particularly given the high threshold required to breach the ‘manifest lack of reasons’ standard.Footnote 46 The tribunal thus held that reasons had been given to the claimant, and no breach of NAFTA was found on that ground. Although this conclusion also relates to the substantive ground of sufficiency of reasoning for an administrative decision, it may in fact best illustrate a duty to give reasons as part of the fair and equitable treatment standard in NAFTA Article 1105. Once again, though, the tribunal offers no comments on the rationale for the duty.
Genin v Estonia takes a less encouraging approach, suggesting that the duty to give reasons has little relevance at all to an assessment of fair and equitable treatment. The case related to the decision by an administrative arm of the Estonian state to revoke the claimant's banking licence. As with Rumeli, an issue for the tribunal was whether the reasons given for the revocation were substantive reasons, or simply pretexts allowing Estonia to avoid its liability to the claimant arising from other events. However, the tribunal ultimately side-stepped the issue. It considered that, ‘having regard to the totality of the evidence’, there were in fact substantive, good reasons for revoking the claimant's licence, and that Estonia did so in the ordinary course of exercising its statutory obligations to regulate the banking sector.Footnote 47 Interestingly, the tribunal then held that any procedural irregularities that were present (such as, it could be inferred, a failure to give sufficient reasons to the claimant for the administrative action) must be subordinated to the ultimate conclusion that the action was, at its heart, justified. To touch on Estonia's obligations under international law, the tribunal held, any procedural violations must meet a high threshold of ‘bad faith, a wilful disregard of due process of law or an extreme insufficiency of action’.Footnote 48 Although, as Glamis Gold demonstrates, the threshold for violations of fair and equitable treatment is ordinarily high, the tribunal in Genin notes on several occasions that Estonia had good reason for acting as it did in relation to the claimant, and this finding is key to the tribunal's overall finding of no violation in the case.
The substantive justification for Estonia's administrative action thus colours the tribunal's view of what level of accompanying procedure is acceptable. This approach demonstrates that the Genin tribunal privileges substance over procedure, treating procedural violations as less important than substantive ones. The predominating concern for the tribunal, then, is one of accuracy in decision making; as long as a decision is accurate in the sense of being substantively justifiable, the procedure of making it or delivering it to the affected party is not important. But the tribunal could be considered as rejecting the view of accuracy via process—that is, the view that accurate decisions in fact can only come from decisions attended by a high-quality process.Footnote 49 Rather, the tribunal is seeking accuracy regardless of process; on this view, it does not matter whether reasons are given to claimants or not, as long as good reasons for a decision do exist. This subordination of process is far from—or even antithetical to—the individualistic, fairness-based rationales for reasons at play in Lemire, where consideration of the psychological effect of a flawed process on a claimant was more evident in the award. The best effort that the Genin tribunal made in that respect was constituted by several paragraphs of admonishment of Estonia's banking regulations (which were ‘contrary to generally accepted banking and regulatory practice’, and ought to be administered ‘with greater caution regarding procedure in the future’).Footnote 50
The Genin tribunal somewhat tempered its lack of attention to procedure and respect for the claimant, however, in its costs order. Noting the ‘awkward manner’ of the licence revocation, as well as Estonia's failings in giving prior notice of its intentions and in providing for internal review of the decision, the tribunal ordered Estonia to bear its own costs in the matter, rather than ordering the claimant as losing party to pay the state's costs.Footnote 51
Lastly, Tecmed v Mexico has been cited as providing support for the duty to give reasons in international investment law.Footnote 52 In its award, the Tecmed tribunal referred to a principle of Mexican law that ‘administrative decisions must be duly grounded in order to have, among other things, the transparency required so that persons that disagree with such decisions may challenge them through all the available legal remedies.’Footnote 53 Despite this reference, the tribunal does not specifically confirm the principle as part of the fair and equitable treatment standard, the breach of which it is assessing. Rather, the preoccupation of the tribunal is to determine whether the Mexican state entity's stated reasons for its decision to deny an operating permit to the claimant were in fact the true reasons. The tribunal apparently cites the domestic duty to give reasons simply to assist in establishing the ostensible reasons given by the state entity. The domestic law principle allowed the tribunal to conclude that the reasons stated in the decision were therefore the reasons adopted and officially put forward by the state entity as underlying its decision. (The tribunal then proceeded to contrast this with other evidence indicating that the real reasons for the refusal to renew the permit were ‘reasons related to the social or political circumstances and the pressure exerted on municipal and state authorities’.)Footnote 54 The case might certainly be taken as evidence that, to avoid breaching the fair and equitable treatment standard, states must indeed have good reasons for their decisions; and that, if reasons are given, they must be the true reasons. If Tecmed is taken to support this latter point, it might be thought to support the instrumental rationales for reasons, since giving false reasons may well satisfy a fairness-based rationale, but is unlikely to facilitate review or improve public confidence or domestic decision-making. However, it may be difficult to rely on Tecmed as contributing to the existence of a duty to give reasons at all.
International investment law thus presents something of a mixed picture. In the first place, investment law appears to have had difficulty in recognizing the existence of a strict duty to give reasons. The cases examined here recognize, at the most, that a failure to give reasons for an administrative decision will contribute to a finding of breach of the fair and equitable treatment standard. While Glamis Gold indicates that a ‘manifest lack of reasons’ would violate the standard, it also demonstrates the very high threshold required for such a violation. Furthermore, in cases where the duty has been relevant to the finding, investment law calls on a wide range of rationales, both instrumental and individualistic, to support the duty. Often, though, tribunals have connected the duty to give reasons and the fair and equitable treatment standard without reference to any particular rationale at all.
V. REASONS AND INTERNATIONAL HUMAN RIGHTS LAW
This section focuses largely on the law of the European Convention on Human Rights (ECHR), as the most developed subset of international human rights law in general. The European Court of Human Rights (ECtHR) has interpreted certain rights in the Convention to include a duty to give reasons for executive interferences with those rights. The accuracy and public confidence rationales have been drawn on to justify this, with only a passing reference to the respect rationale—perhaps surprisingly, for a human rights court. The ECHR also makes explicit provision for reasons to be given in one area, to persons arrested, and the Court has noted the review rationale to underpin this. Looking beyond European human rights law, a decision of the International Court of Justice has confirmed the same approach to reasons upon arrest.
The existence of a duty to give reasons was raised in Meltex Ltd v Armenia, in which a factual scenario similar to Lemire v Ukraine was brought before the ECtHR. In Meltex, the corporate claimant alleged that the authorities' refusal of its broadcasting licence application amounted to a breach of its rights to free speech under Article 10 of the ECHR. The Court found an interference with free speech rights, but noted that the Convention permitted interferences that were ‘prescribed by law’.Footnote 55 According to the Court's jurisprudence, this phrase required more than merely formal compliance with domestic laws. It also contained substantive elements, including a requirement that domestic authorities apply criteria for accepting licence applications in a manner that avoids arbitrariness. This, the Court held, implied the provision of ‘proper reasoning’ for a refusal.Footnote 56 In so finding, the Court drew on a Recommendation of the Council of Europe adopted in 2000, which sets out guidelines for the approval of broadcasting licence applications. The guidelines call on licensing procedures to be ‘open, transparent and impartial’, with decisions on licensing being ‘duly reasoned’, as well as open to review and publicly available.Footnote 57
The context of fundamental rights is prominent in the Court's reasoning. The Court considered that, when rights such as free speech are at stake, Member States could not be permitted to exercise unfettered executive power.Footnote 58 In a nod perhaps to the accuracy rationale, the provision of reasons was seen as instrumental to limiting the scope for arbitrary administrative decision-making and thus arbitrary interferences with individual rights. The judgment is highly individualistic in this sense, seeking primarily to protect individuals from the excesses of state power. There are suggestions, too, of the ‘public confidence’ rationale in play, through which the Court seeks to improve the quality of domestic decision-making and to strengthen public confidence in government institutions. In this respect, the Court noted that ‘the applicant company and the public were thus not made aware on what basis the [broadcasting authority] had exercised its discretion to deny broadcasting licences.’Footnote 59 However, the judgment shows no signs of being individualistic in the sense of expressing concern for the claimant's own sentiments in the process, as the Lemire tribunal did. This may have been influenced by the corporate nature of the Meltex claimant, compared to Mr Lemire's case. The Court's expression of the role of reasons as protector from state power is perhaps not surprising given its rights-based mandate, but it contrasts with the approaches of the WTO and investment tribunals in the cases examined above.
Glas Nadezhda EOOD and Elenkov v Bulgaria involved similar circumstances to Meltex, and the Court's reasoning in finding a violation of the applicant company's Article 10 free speech rights was much the same as in Meltex. However, the Court added the comment that the domestic broadcasting authority's lack of reasons ‘was not made good in the ensuing judicial review proceedings’.Footnote 60 This implies that, if reasons had been provided at a later stage of the domestic legal proceedings, the Court may have been less willing to find a violation. The comment may demonstrate a hint of fairness-based reasoning by the Court in its suggestion that, even when provided too late to affect a decision to appeal, there still remains a purpose to give reasons to the affected party—presumably, to show respect for the party's own sentiments as to the decision.
Compared to Article 10's protections of free speech, Article 6(1) of the ECHR might appear to be a more directly relevant provision in a discussion of the duty to give reasons. Article 6(1) provides that ‘everyone is entitled to a fair and public hearing’ in cases that determine ‘civil rights and obligations’. Although this is primarily a guarantee of fairness in judicial decision-making, the ECtHR has held that it also applies to administrative decision-making in many circumstances.Footnote 61 However, the Court has clarified that this does not necessarily mean that administrative bodies must provide full guarantees of due process. Rather, the major stricture of Article 6(1) is that a decision must be reviewable by a judicial body which does provide full procedural safeguards.Footnote 62 In itself, then, this does not necessarily impose any reason-giving requirement on administrative decision-makers.
Alternatively, if states wish to limit judicial oversight and preserve executive discretion in certain areas, under Article 6(1) they must ensure that first-instance decision-makers do accord a sufficient degree of due process.Footnote 63 Whether this includes a duty to give reasons, though, is somewhat unclear. Under its Article 6(1) jurisprudence, the ECtHR has not yet explicitly encountered cases involving administrative reason-giving. However, it has dealt in many Article 6(1) cases with the requirement for judicial bodies to give reasons for their decisions. The Court often recites several justifications for the duty. For instance, in Suominen v Finland, the Court noted that a duty on domestic courts to give reasons firstly reflected ‘a principle linked to the proper administration of justice’ in providing for public scrutiny, secondly served the purpose of demonstrating to parties that they had been heard, and thirdly facilitated the possibility of appeal.Footnote 64 In Hirvisaari v Finland, the Court noted both that lower courts must give reasons so as to ‘enable the parties to make effective use of any existing right of appeal’, and that the apparently contradictory reasoning at issue in the case ‘must have left the applicant with a certain sensation of confusion’.Footnote 65
It does not seem clear, though, whether the Article 6(1) jurisprudence on reason-giving by judicial bodies can be transferred wholesale to the administrative context. Some commentators suggest or imply that the Article 6(1) duty imposed on courts to give reasons will apply by analogy to administrative bodies, in situations where Article 6(1) applies to decisions of those bodies.Footnote 66 Domestic courts, at least in the UK, appear to agree.Footnote 67 However, there is no indication in the Strasbourg jurisprudence itself as to whether the duty might be weaker in relation to administrative bodies than to judicial bodies. Some cases appear to assume, without clarifying, that the applicable standards are the same. For instance, in Fischer v Austria, it was common ground that a particular administrative decision-maker would not meet the requirements of Article 6(1), without any discussion of whether those requirements might call for adaptation when applied to an administrative body.Footnote 68
But given that one of the main points of contention in domestic law debates over the duty to give reasons has historically been the burden that it may impose on the administration (a burden which few would have any qualms about applying to judicial bodies), it does not seem to go without saying that the applicable standards would be the same. The tribunal in the Thunderbird v Mexico case, discussed above, recognized this issue. It held that the domestic administrative proceedings at the heart of that case ‘should be tested against the standards of due process and procedural fairness applicable to administrative officials’. Importantly, the tribunal said, ‘[t]he administrative due process requirement is lower than that of a judicial process.’Footnote 69 This conclusion may well be debatable. In UK administrative law, for example, any strict distinction in standards has generally become less significant since the seminal case of Ridge v Baldwin Footnote 70 (although other cases note the inherent flexibility of the standards in different types of proceedings).Footnote 71 The conclusion may well also be confined to its context in the Thunderbird case of a claim under Article 1105 of NAFTA. But in the absence of clearer guidance from the ECtHR as to the approach that it will take in ECHR cases, it seems prudent to consider that the issue remains open. Ultimately, it may well be that Article 6(1)'s ‘conception of judicial decision-making is simply too inflexible to be applied without modification to the exercise of administrative powers generally’.Footnote 72
There is one case that may have a bearing on Article 6(1)'s approach to administrative reason-giving. In AGOSI v UK, the Court commented obiter that the Convention might be violated where a lack of reasons given for a decision by an administrative authority leads to an inability to challenge the decision.Footnote 73 The comments were made in the context of the Court's assessment of whether the United Kingdom provided a judicial review procedure, for parties seeking to challenge decisions on confiscation of property, that was sufficiently effective to meet the requirements of Article 1, Protocol 1 to the Convention. However, it appears that the Court was not so much frowning on the administrators' lack of reasons for the decision, but rather criticizing the failure of the English judicial system at the time to permit applications for judicial review where the initial decision did not state any reasons. (The relevant English law had been amended by the time the administrative decision was made, which rendered the comments obiter.) Nevertheless, AGOSI could be taken at least as encouragement, or perhaps as warning, to administrators to provide reasoned decisions, lest they breach Convention doctrines on access to effective remedies. This warning is enhanced by the fact that the requirements of Article 1, Protocol 1 in this respect appear to be the same as the requirements of Article 6(1).Footnote 74 Since Article 6(1) now applies to a wide range of administrative decisions, this might suggest a generalized encouragement to provide reasons, based on an instrumental rationale of effective review.
Even still, as noted, there appear to be no ECHR judgments as yet where Article 6(1) has been found applicable to an administrative decision and where a failure to give reasons has been in issue. In Meltex, alongside the primary claim of an Article 10 breach, the applicant also claimed that Article 6(1) had been violated due to a failure by domestic courts to give reasons for their rejection of his challenges to the licensing decisions. Interestingly, the applicant did not seek to apply Article 6(1) to the administrative authority's licensing decision itself. There was no suggestion by the Court that the cases and principles cited under its analysis of the applicant's Article 6(1) claim could have also applied to the facts of the Article 10 claim. Granted, this may have been because the Court's Article 6(1) jurisprudence is relatively tolerant of administrative process transgressions as long as there is scope to correct these upon judicial review.Footnote 75 However, particularly if the review rationale is accepted, it might be thought essential to impose the reasons requirement at the initial stage and not only upon later review. If Article 6(1) does itself impose a duty on administrative bodies—of the same strength as the duty imposed on judicial bodies—to provide reasons for their decisions, it is somewhat strange that this was not discussed in Meltex.
Lastly, reason-giving requirements are also to be found in the text of Article 5(2) of the ECHR, which provides in part: ‘Everyone who is arrested shall be informed promptly … of the reasons for his arrest’. Compared to the civil context of the cases previously discussed on Articles 6(1) and 10, it might seem that the more criminal context of Article 5(2) would call for heightened concern in the Court over its application and justification.Footnote 76 However, the case law on this provision is not extensive, with the key elements being laid down in two main judgments. Since the duty to give reasons in this context is clearly specified in the Convention, the Court has not been called on to read the duty in to the text at hand, as argued in the Articles 6(1) and 10 cases. Instead, the Court has offered brief explanations of the existence of the duty, relying on the review rationale. Thus, Fox, Campbell and Hartley v UK noted that an arrested person must be given reasons for his arrest ‘so as to be able, if he sees fit, to apply to a court to challenge its lawfulness’.Footnote 77 Similarly, Van der Leer v Netherlands commented that ‘[a]ny person who is entitled to take proceedings to have the lawfulness of his detention decided speedily cannot make effective use of that right unless he is promptly and adequately informed of the reasons why he has been deprived of his liberty.’Footnote 78
The predominance of the review rationale for the reasons requirement in human rights law in relation to arrests has also recently been confirmed by the International Court of Justice in the Diallo case.Footnote 79 The ICJ was there called to rule on an alleged violation of Article 9(2) of the International Covenant on Civil and Political Rights (ICCPR), which is worded in very similar terms to Article 5(2) of the ECHR. Article 9(2) was found to have been violated because there was no evidence that Mr Diallo had been notified upon his arrest of a decree ordering his expulsion from the Democratic Republic of the Congo. Had he been notified of this decree, ‘it would have indicated to Mr Diallo that he had been arrested for the purpose of an expulsion procedure and would have allowed him, if necessary, to take the appropriate steps to challenge the lawfulness of the decree.’Footnote 80 Like the ECHR, the ICJ thus connected the presence of reasons to the feasibility of judicial review of the impugned decision.
International human rights law thus draws on the review rationale to justify the existence of the duty to give reasons in the specific context of arrest. When the duty is not explicitly provided for in other contexts, the Court has proved willing to imply it, such as via the ECHR's requirement that interferences with fundamental rights be ‘prescribed by law’ (in Article 10, and equivalent phrases in other parts of the Convention). The accuracy and public confidence rationales have been used to support this. Whether a duty to give reasons for administrative decisions can be inferred from ECHR jurisprudence on the right to a fair hearing in Article 6(1), and the duty to give reasons for judicial decisions contained therein, remains less clear.
VI. COMPARISONS
The case studies of WTO law, investment law and human rights law presented above demonstrate a range of approaches to the primary question of the existence of a duty to give reasons. The duty is made explicit in the text of particular WTO agreements and, in cases of arrest, in the ECHR and ICCPR. Naturally, in these instances there is little room for doubt that the duty is to be imposed. Elsewhere, though, it has required judicial intervention to ground its existence. WTO Panels and the Appellate Body have found the duty to be implied by the provisions of certain other WTO agreements. The Strasbourg Court has also imposed the duty judicially in cases where fundamental rights are at stake. Investment tribunals have been more equivocal, although some have recognized a weaker version of the duty by holding that a lack of reasons will at least contribute to, if not entail, a finding of breach of the more general obligation of fair and equitable treatment. A duty flowing from the general right to a fair hearing in human rights law is, on the better view, still unsettled.
Even where international courts and tribunals have agreed on the existence of some form of the duty whether express or implied, the underpinning rationales that they have called on have differed. However, instrumental rationales have been most visible in the reasoning of international adjudicators. Human rights law is clearest in adopting the review rationale in relation to giving reasons upon arrest. The review rationale also strongly underlies WTO law's approach to the duty, although some cases have suggested that the accuracy rationale plays a secondary role. In other corners of human rights law, the accuracy rationale has appeared together with the public confidence rationale. Individualistic rationales have had limited impact. Although human rights cases have given some indications of the respect rationale, only cases from the investment law regime have clearly drawn on it in supporting a finding that the duty is implied by the provisions of investment treaties. Investment law is inconsistent, though, in that other cases have drawn on instrumental rationales or, indeed, no rationale at all.
Interestingly, and unlike the analogous debates at domestic level, it appears that international law, as interpreted by adjudicators in international courts and tribunals, does agree on the desirability of a duty to give reasons for administrative decisions. While the reasons for imposing the duty may vary, and while its existence may indeed be limited or unclear in certain areas of international law, the fact that the duty should be imposed, when it is imposed, is essentially taken for granted. The relevant judgments do not engage in particularly lengthy discussions of, for instance, the potential burden that might be placed on administrators by a duty to give reasons. The benefits of the duty are simply acknowledged, without a corresponding nod to the concerns that have commonly kept it from being imposed without complaint across domestic administrative law systems.
This agreement on the desirability of the duty is thus the only clear element of what is otherwise a relatively incoherent picture of the duty in international law, with questions of its existence and rationale being varied across regimes. Adjudicators have even differed on these questions within regimes, as investment law shows, further complicating any comparisons of approach.
VII. CONCLUSIONS
The case law on the duty to give reasons for administrative decisions is not yet extensive in any of the three regimes examined here. This suggests that any conclusions that can be drawn will only represent an emerging view. In addition, two of the regimes—investment law and WTO law—are limited in their scope in various ways. Investment law deals only with those natural or legal persons that qualify as investors under the terms of the applicable treaty. Although there is an extremely wide range of administrative decisions that can affect investment, the international rules that regulate these decisions apply only to a relatively limited class of persons. Moreover, the provisions of the WTO Agreements apply only to specific trade-related decisions made by national authorities, such as decisions to impose anti-dumping duties or safeguard measures on imports of particular goods. To the extent that these two regimes apply a duty to give reasons, then, it is not a universal or generalized duty applying throughout international law but only a restricted, sector-specific duty. European human rights law suffers from its own uncertainties, in the scope of Article 6(1)'s application to administrative decisions and the transferability of reasoning from the judicial context to the administrative context. The ECHR cases that less ambiguously apply a duty to give reasons are limited to measures under Articles 8–11 that interfere with the specific rights of private life, assembly, speech and religion. Similarly, the explicit provision for reasons upon arrest in Article 5 ECHR (and in Article 9 of the ICCPR) clearly remains confined to that context.
The fact that administrative decisions vary so widely in their nature and importance (ranging, for instance, from a parking fine to an operating licence for a nuclear power station) also suggests the difficulty in constructing any generalized and overarching duty to give reasons applicable in all fields. It is perhaps easier for the WTO to enforce a duty for two very specific kinds of administrative decisions relating to trade (the imposition of safeguards and anti-dumping measures) than it is for investment treaty tribunals or human rights courts to find a duty in the wide variety of factual situations that have been presented to them.
In addition to these limitations, the range of rationales expressed in the cases for recognizing the duty complicates efforts to formulate a consistent approach. It is true that domestic courts have also recognized different rationales for the duty, with certain rationales coming to prominence in certain cases. But the emphasis given to one or another will affect the scope of the duty imposed, and the experience so far suggests that this has not yet been appreciated by international adjudicators. As those working on the Global Administrative Law project would surely recognize,Footnote 81 further development of international law will be required before the duty to give reasons for administrative decisions escapes application at the international level in a purely piecemeal approach. Whether or not coherence is achievable, however, may depend on whether Global Administrative Law can progress in the context of a fragmented international ‘judiciary’, attempting to control discretion exercised in a wide range of environments by a wide range of national executive agencies.
