Governing Networks
| Published date | 01 June 2015 |
| Date | 01 June 2015 |
| Author | Horatia Muir Watt |
| DOI | 10.1177/1023263X1502200303 |
| Subject Matter | Article |
352 22 MJ 3 (2015)
GOVERNING NETWORKS
A Global Challenge for Private International Law
H M W*
ABSTRACT
What would be the governance implication s if the introduction of the concept of network
were to be made a technical-legal category of private international law? e idea behind
the present contribution is an attempt to provide an alternative analysis, with technical
purchase, which might in turn open the path towards a new pat tern of jurisprudence
in line with a global legal paradigm in three concrete instances which point to obvious
inadequacies in the legal treatment of transnational private power (risk allocation
between a parent company and its foreign subsidiar y in respect of the conduct of the latter;
transnational supply or value chains; and international commercial and investment
arbitration). However technical the proposed change might appear, whether or not legal
innovation is worthwhile on this point is ultimately a political assessment of the need for
balance, responsibility and accountab ility in global governance.
Keywords: global governance ; networks; private international law; private power;
transd isciplina rity
§1. GOVERNANCE CHALLENGES AT THE INTERSECTION
OF EUROPEAN, COMPARATIVE AND PRIVATE
INTERNATIONAL LAW
What is the common denominator unit ing risk allocat ion between a parent company
and its foreign subsidiary in respect of the conduct of the latter, transnational supply
or value chains, and international commercial and investment arbitration? Such a
factor is probably di cult to nd in terms of legal technique: in the eyes of t he law,1
* Full Professor, Science s Po (Paris) Law School.
1 Here, ‘the law’ ca n be understood as Western pr ivate law, whose deep struct ure in this resp ect is shared
despite signi cant di erences on the cultur al surface.
Governing Networks
22 MJ 3 (2015) 353
such phenomena would usually be seen as belonging to three di erent categories –
these arguably bei ng tort, contract and dispute resolution – each w ith its speci c set of
principles and rules. However, all th ree issues share the fate or privilege of fall ing outside
of the reach of any one domestic regulat ion by reason of their transnational implications
or their multiple points of touchdown. To this extent, they a re emblematically global
problems, which as such belong to a new legal parad igm located ‘beyond the state’.2
Moreover, none of these categories are subject to the rules of public international law,
because they essentia lly involve private actors.
Yet they all lie in an identi able sequence3 at the very heart of the global economy,
as part of the fra mework within which tr ansnational economic power or authority is
asserted and exercised.4 Arguably, they all constitute sig ni cant blind spots in terms
of global governance. For example, by dint of not accept ing that corporate actors may
function as multi national groups, the law – and most par ticularly private internat ional
law, which is in the d river’s seat here – has allowed such g roups to accede to unregu lated
and accountable informa l authority equal to or even greater than t hat of states. e sa me
can be said of globa l value chains, which s tructure bot h production and the ows of
commodities and nance acros s the globe;5 or of internat ional arbitrat ion, which secrete s
a shadow legal order applicable to a large proportion of key cross-border tran sactions.
Of course, some would claim t hat lack of speci c regulation of these issues is also in
itself a matu re regulatory choice.6 A er all, party autonomy, corporate personality a nd
privatized adjudication – th ree categories which c urrently contai n the bul k of legal principle
on these is sues – might also be viewed as const ituting the sel f-su cient foundations of a
2 On the global pa radigm, see R. M ichaels, ‘Globalis ation and Law: Law Beyond t he State’, in R. Banak ar
and M. Travers (eds.), Law and Socia l eory (2nd ed iti on, Har t, 2 013), p.28 7 et seq . Co mpa re N . Wal ker,
Intimations of Glo bal Law, Global Law Serie s (Cambridge University Pres s, 2015).
3 Foreign investment is encouraged by serial bilateral investment treaties, which will lead more o en
than not to the cre ation of a corporate subsidiary i n charge of local production (extrac tive industry,
manufacture, agro-industry) in the host state. Advantages obtained in such a context will o en be
enforced through arbitration, against attempts on the part of the local government to impose the
protection of colle ctive interests (e.g. so cial or environme ntal interests). Successi ve contracts then
organize t he supply chain which inexorabl y leads back to the pro table consumer market i n the home
state. Whi le damage caused in the proc ess to people or to the environment in t he host state may give
rise to tort cla ims, these risk bei ng characterize d as a violation of the rights of t he investor, which will
then be given protec tion in the arbitrat ion process.
4 e phenomenon of power or author ity beyond the state has be come an important topic for bot h legal
theorists , legal sociologists and pr ivate international law yers. See the collection of d iverse approaches
assembled by Roger Cot terell and Maks del Mar, in R. C otterell and M. del Mar (ed.), Tra ns nat io na l
Private Authority (forthcoming). In t erms of systems t heory, G. Teubner and A. Fischer-Lesca no,
‘Regime-Col lisions: e Vain Se arch for Legal Unity in the Fra gmentation of Global Law’, 25 Mich J.
Int’l L. (2 004).
5 For instance, on t he way in which value cha ins in the agro-indus try structu re food production, see O.
de Schutter and K.Y. Cordes (eds.), Accounting for Hunger, e Right to Food in a n Era of Globalisation
(Hart, 2011).
6 For a critical d iscussion of economic approaches a nd speci cally the omission to re gulate as a form of
regulation, s ee H. Muir Watt, ‘Les asp ects économiques du droit i nternational pri vé’, 307 RCADI (20 04).
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