IntroductionThe invocation of the national security exception to override international economic obligations is an increasingly important issue. For example, in March 2018, the USA—citing current and potential future risks to national security—announced trade measures in the form of tariffs:2Because of…the risk that the domestic aluminum industry would become ‘unable to satisfy existing national security needs or respond to a national security emergency that requires a large increase in domestic production’, and taking into account the close relation of the economic welfare of the Nation to our national security…the Secretary concluded that the present quantities and circumstances of aluminum imports threaten to impair the national security.3In addition to the exception’s relevance in global trade,4 the national security exception is inextricably intertwined with the increasing scrutiny and blocking of foreign investments5 and acquisitions of domestic companies.6 The USA has thwarted takeovers pursuant to the Committee on Foreign Investment in the United States (CFIUS) screening regime based upon alleged risks to national security:7
There is credible evidence that leads me to believe that Broadcom…through exercising control of Qualcomm…a Delaware corporation, might take action that threatens to impair the national security of the United States.’8
The trend towards heightened national security review is not limited to the USA. Western nations are increasingly concerned over foreign investment and trade. From Australia,9 the United Kingdom (UK),10 and the European Union (EU),11 national security is increasingly cited as the legal basis to undertake action restricting trade and foreign investment:
Europe is pushing for more stringent vetting of foreign investments, with an eye on Beijing. Australia has been blocking bids by Chinese buyers for strategic assets. And in Canada, a Chinese takeover of a major contractor faces a national security test.’12
Western nations are concerned that foreign investment and trade policies, particularly from China, are unfair and need to be restricted or revised. These concerns are amplified because most Chinese companies are controlled or dominated by arms of the Chinese State injecting a strong element of potential non-financially motivated investment—that is, the transfer of sensitive information and technology:13Intelligence agencies in both Canada and the USA have warned that companies owned or partly owned by the Chinese government are not merely profit-seeking operations; they are also prone to passing on information or technology to Beijing and making business decisions that could conflict with Canadian interests but serve the agenda of the authoritarian Communist Party of China.14
However, invoking the national security exception is a complex issue. For example, in the global trade context, the national security exception of ‘Article XXI may also shelter some measures that, although ostensibly imposed for security reasons, may actually be protectionist-oriented’.17 Indeed, China perceives the imposition of restrictive measures as a violation of contractual commitments and as cover for protectionism and discriminatory conduct.18
Last year, when the EU first floated an investment-screening mechanism, China called on the bloc to observe World Trade Organization (WTO) rules and avoid discriminatory investment policies.19
Are the impairment of trade and restrictions on cross-border investment based upon national security a violation of international legal obligations? International law recognizes that States have the inherent right20 to override legal obligations to defend ‘national security’ or ‘essential security interests’.21 However, States can creatively allege simulated, artificial, or, at best, doubtful national security directives. What constitutes a national security interest crisis in a world that has undergone substantial transformations in recent decades and how should defensive conduct taken in reaction to the threat be evaluated? And what can Delaware corporate law inform us about national security in the international economic law context? There are several interrelated and emerging issues.
First, the long-term ramifications of improper conduct—that is, promoting improper objectives under the ruse of national security—are far more serious in an interconnected world dependent on free trade, supply chains, and foreign direct investment (FDI) as pillars of the global governance architecture.22 Indeed, in a globalized world with inter-dependent and integrated economies, conduct based upon the national security exception may impact regional and/or global order and stability, and a trade war is risky and could spiral out of control.23
Second, the classic understanding of military attack as constituting ‘the’ threat to national security is no longer valid. Cyber-threats, social stability, economic warfare, environmental threats, and terrorism impinge on national security as much as (or more than) open military conflict. Indeed, what may, at one time, have been an improper motive might currently be a valid national security threat. Furthermore, national security is not only military preparedness; national security encompasses a wide range of important bulwarks in defence of the good of the nation such as peace, prosperity, and stability. New technology inspired dual-use civilian/military product applications and the fact that important sources of defence components may be manufactured offshore rather than domestically may also increasingly cross into the realm of legitimate national security.
Third, the rivalry between the USA and China adds a dimension of double-edged complexity to the mix. The 2017 US National Security Strategy document demonstrates that China is increasingly viewed as a strategic and economic competitor and rival,24 which leads to anxieties over the true motivation for investment. Specifically, but not exclusively, Chinese State-owned enterprises (SOEs) are also perceived as inherently more threatening to national security due to their governmental links.25 But while Chinese takeovers and investment may potentially be motivated by mixed political-motives, national security based measures taken to thwart Chinese investment may also possibly contain such motives.
Fourth, while the essential security exception is found in virtually all international economic agreements—as important as the exception is—the exception has a dearth of rulings,26 and several are conflicting.27 The objective of this article is to suggest examining Delaware law as a proxy for analysing national security. Prior rulings concerning ‘security’ relied primarily upon the understanding of ‘necessity’ in customary international law. However, as will be detailed below, conceptualizing the security exception as an exemplar of necessity will be much too limiting to States and will serve to render the exception impractical. The conceptualizations of national security benchmarks such as ‘necessity’ were appropriate for an age that dealt with a more limited and military-oriented perception of security. Today, legitimate threats may literally be virtual as opposed to physical. Moreover, necessity in international law requires an imminent threat and the nation enacting the measure must establish that the measure was ‘the only way’—that is, it was not possible to defend its interest in a less burdensome manner. As will be explained below, these (and other) requirements would eviscerate the ability of States to defend security if States were held to these requirements.
Determining the proper balance in a world in transition and risk is crucial inasmuch as the national security exception has a real potential of becoming weaponized. Given the above-referenced emerging issues, and the increasing invocation of the exception, finding the proper standard to utilize to ascertain whether the measure violates an international law obligation is vital. This article seeks to fill a void and promote discussion with respect to a standard that ‘has not been adequately addressed by scholarly attention’.28 Indeed, a ‘relatively under-explored issue is the extent to which BIT/FTA exceptions on “essential security,” “national security,” and “public order” may be successfully raised by host/recipient States in complaints raised by SWFs and SOEs’.29
Preliminarily, in discussing national security it should be noted that the exception comes in various contexts: WTO trade rules, domestic screening mechanisms, free trade agreements (FTAs), and bilateral investment treaties (BITs). The exception may also be found in agreements that provide for the invoking State to ‘self-judge’ whether circumstances satisfy utilizing the exception. While it is beyond the scope of this article to discuss the implications of any ‘self-judging’ terms in a particular setting, ‘self-judging’ is a grey area with no clear rulings,30 and, in fact, there is an argument that empowering States to ‘self-judge’ does not prevent a subsequent review of that determination.31 However, the purpose of this article is not to discuss whether the exception is reviewable in specific contexts but to proffer a potential standard when the exception is, indeed, being evaluated by a reviewing body.32
Various questions arise, such as, who should have the initial burden of proving their side? Should all national security decisions be presumed to be proper and thus the party claiming unfair conduct bears the burden of proving the exception is misplaced? Should the standard lean towards a lenient and/or subjective evaluation in deference to national sovereignty? Alternatively, should the initial burden be placed on the State invoking the defence to demonstrate that a credible threat existed on an objective basis? What are the contours of the defence? Are other nations ‘stakeholders’ to the extent that their interests need to be taken into account when declaring a national security exception?
This article proposes a standard by comparing the invocation of the exception with the stewardship of Delaware directors in a publicly traded US corporation when faced with a threat to corporate security and the board’s enactment of defensive measures to thwart the threat. Corporate directors—when faced with a threat to corporate control—will often engage in conduct that proactively seeks to stem threats to corporate control and/or attempts to thwart the takeover, and in doing so, conflicts of interest may potentially cloud the decision. This is a close parallel to governments creating barriers to foreign investment, trade tariffs, and/or boycotts and the blocking of foreign takeovers of domestic companies. While legitimate threats may exist, the possibility also exists that the threats are not reasonable and the exception merely serves as a rationale to engage in politically motivated protectionism or for some other improper motive.
In the comparative law context, is examining the issue through the lens of Delaware law a fit?:33The choice of legal systems for comparative law purposes stands at the core of any comparative law methodology and must consequently be aligned with the goals of the comparative law project. In fact, the choice of suitable legal systems is crucial for attaining those goals and thus for the success of a comparative law project.34Analysing the issues through the lens of how Delaware courts evaluate the decisions of directors when faced with a takeover is a novel means of examining the topic. The choice of comparison is crucially important since the foundation of comparative analysis will depend on comparing common problems.35 In salient ways, as discussed immediately below, a comparison of national security decisions in international economic law with Delaware director responsibilities makes sense.36
Directors are charged with doing their best to promote the welfare of the corporation and the shareholders in much the same way that governments are responsible for creating a stable and prosperous national economy benefiting the citizens. In this manner, shareholders are similar to constituents—the citizens. Delaware directors are elected by voters who are responsible for steering the enterprise for the voters’ (shareholders) benefit. This is similar to government officials elected to benefit the voters (citizens). Yet directors (as elected political representatives) are relatively independent and shareholders cannot directly compel the board to take any particular action or initiate major transactions or defensive conduct, and the directors cannot easily be removed until the next term.37 Essentially, directors are very similar to elected political officials; both are essentially intermediaries between the voters (shareholders or citizens) and third parties and both are charged with acting in the benefit of the ‘enterprise’ and its constituents.
Moreover, the central issue is very similar in nature. Corporate security focuses on protecting the business as national security is invoked to protect the nation. When corporate directors act to defend ‘corporate security’ this involves rights and duties of the directors. Directors are obligated to protect the ‘corporate bastion’—corporate security—from threats either immediate or forthcoming. However, in protecting corporate security, Delaware directors are charged with demonstrating that the board’s measures to protect corporate security are reasonable and are not disproportionate in addressing those threats. Directors are charged with balancing the need to address evolving threats to corporate security while ensuring that such measures are not abusive to their duties of care to the corporation—as well as corporate stakeholders—imposing reasonable limits on corporate directors.38
For the reasons discussed above, the analogy to Delaware is comparatively significant to the vital question of finding an appropriate standard. While this article recognizes that director conduct in protecting corporate security is not perfectly identical with government officials engaged in conduct to protect national security, demanding an exact alignment of systems would render comparative law ‘little more than socio-legal tourism’.39 At a minimum, examining the national security standard via ‘comparison [with Delaware law] can open up our eyes to alternative solutions’.40 The reasons in favour of using Delaware law are more extensively detailed later in this article.
While standards for the exception (or similar exceptions) exist, they have rarely been the subject of decisions. See Julien Chaisse, ’Demystifying Public Security Exception and Limitations on Capital Movement’ (2015) 37 U Penn J Intl L 583, 601 (dearth of rulings on the exception). Moreover, for reasons outlined below, this article argues that looking at Delaware law offers a more advantageous benchmark than for example the concept of ‘necessity’ used in arbitral decisions and the International Court of Justice (ICJ).
National security based conduct is understood as encompassing proactive measures, since waiting for the threat to actualize and endanger the nation may prove too late for an effective response. See Raj Bhala, ’National Security and International Trade Law: What the GATT Says, and what the United States Does Symposium on Linkage as Phenomenon: An Interdisciplinary Approach’ (1998) 19 U Penn J Intl L 263, 275 (‘[i]f a sanctioning member had to wait until a hostile power acquires nuclear weapons, a destabilizing number or type of non-nuclear arms, or a physical invasion, then it would be too late for trade sanctions to have any protective effect’).
See Presidential Proclamation on Adjusting Imports of Aluminum into the United States (8 March 2018) (emphasis added) <https://www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-aluminum-united-states/> accessed 31 August 2018; see also Ted Kemp, ‘US Launches Investigation into Automobile Imports on a “National Security” Basis’ (23 May 2108) <https://www.cnbc.com/2018/05/23/president-trump-asks-for-national-security-investigation-of-automobile-imports.html> accessed 31 August 2018 (‘The U.S. Department of Commerce started an investigation into automobile imports to determine whether they “threaten to impair the national security” of the United States’).
See Thomas Biesheuvel and others, ‘Trade as National Security Issue? Here’s What the U.S. Law Says’ Bloomberg (24 May 2018) <https://www.bloomberg.com/news/articles/2018-05-24/trade-as-national-security-issue-here-s-the-u-s-law-quicktake> accessed 31 August 2018 (discussing the imposition of tariffs based on national security).
See ‘Australia’s New Foreign Minister Marise Payne Supports Blocking Chinese Telcos from 5G Network, Citing National Security’ (27 August 2018) <https://www.scmp.com/news/asia/australasia/article/2161522/australias-new-foreign-minister-marise-payne-supports-blocking>
(discussing the blocking of Chinese companies from Australian 5G network based upon national security concerns).
See Locknie Hsu, ‘The Role and Future of Sovereign Wealth Funds: A Trade and Investment Perspective’ (2017) 52 Wake Forest L Rev 837, 843–4.
The Committee on Foreign Investment in the United States (CFIUS) is ostensibly empowered with unfettered discretion to decide national security based reviews. However, even here, there may be options for review. See Anne W Salladin and Amelia J Schmidt, ‘CFIUS Post-Ralls: Ramifications for Sovereign Wealth Funds’ (2015) 4 Intl Rev L 1, <https://doi.org/10.5339/irl.2015.swf.4> accessed 30 August 2018 (discussing Ralls litigation in US courts wherein a Chinese buyer filed a claim over a lack of due process in the CFIUS mechanism). Moreover, blocking transactions may potentially implicate internal investment agreements (IIAs) and may give rise to claims either at the ICJ State–State venue or International Centre for Settlement of Investment Disputes (ICSID) investor–State arbitration. See Hsu (n 6) 847.
Presidential Order Regarding the Proposed Takeover of Qualcomm Incorporated by Broadcom Limited (12 March 2018)<https://www.whitehouse.gov/presidential-actions/presidential-order-regarding-proposed-takeover-qualcomm-incorporated-broadcom-limited/> accessed 31 August 2018 (emphasis added).
See ‘National Security Risk? Australia Bans Multibillion-dollar Chinese Investment in Power Grid’ Australasia (11 August 2016) <http://www.scmp.com/news/asia/australasia/article/2002313/deal-australia-ban-chinese-investment-power-grid> accessed 31 August 2018 (blocking Chinese bidders).
See Enterprise Act 2002: Guidance on Changes to the Turnover and Share of Supply Tests for Mergers (11 June 2018) <https://www.gov.uk/government/publications/enterprise-act-2002-guidance-on-changes-to-the-turnover-and-share-of-supply-tests-for-mergers> accessed 31 August 2018 (additional national security scrutiny on national security; new rules apply to businesses developing military and dual-use technology, computing hardware and quantum technology).
See Birgit Jennen and Rainer Buergin, ‘For Merkel, Some China Investments Are More Welcome Than Others’ Bloomberg (27 February 2018) <https://www.bloomberg.com/news/articles/2018-02-27/merkel-fixes-sights-on-china-as-chinese-investors-target-germany> accessed 31 August 2018 (‘Chinese investment is increasing in very strategic sectors. … The problem is going to be if there is only interest to have technology flow from Germany to China, and of course if there are security questions’); Lyubov Pronina, John Follain and Slav Okov, ‘EU Is Ready to Fight Back against China’s Growing Trade Dominance’ Bloomberg (3 May 2018) <https://www.bloomberg.com/news/articles/2018-05-03/europe-embarks-on-a-china-strategy-with-a-majority-for-screening> accessed 31 August 2018 (‘Europe is set to tighten controls over foreign investment, a sign of growing wariness of China’s efforts to use its $11 trillion economy to become a dominant global power’).
See Liz Alderman, ‘Wary of China, Europe and Others Push Back on Foreign Takeovers’ New York Times (15 March 2018) <https://www.nytimes.com/2018/03/15/business/china-europe-canada-australia-deals.html> accessed 31 August 2018; see also Josh Wingrove, ‘Canada Blocks Chinese Takeover of Aecon on Security Concerns’ Bloomberg (24 May 2018) <https://www.bloomberg.com/news/articles/2018-05-23/trudeau-blocks-chinese-takeover-of-aecon-on-security-grounds> accessed 31 August 2018 (‘The Canadian government blocked a proposed takeover of construction firm Aecon Group Inc. by a unit of China Communications Construction Co. in the latest move by Western nations weighing national security concerns associated with Chinese investment’).
See ‘Why the US Fears a Chinese Bid for Westinghouse Electric’ New York Times (7 April 2017) <https://www.nytimes.com/2017/04/07/business/us-china-toshiba-westinghouse.html?_r=0> accessed 31 August 2018 (describing claims that Westinghouse technology is the target of Chinese espionage causing national security concerns within the USA).
See Robert Fife and Steven Chase, ‘Trudeau Cabinet Blocks Chinese Takeover of Aecon over National Security Concerns’ (23 May 2018) <https://www.theglobeandmail.com/politics/article-ottawa-blocks-chinese-takeover-of-aecon-over-national-security/> accessed 31 August 2018 (emphasis added).
See Adam S Chilton, Helen Milner and Dustin Tingley, ‘Reciprocity and Public Opposition to Foreign Direct Investment’ (30 May 2017) <http://scholar.harvard.edu/files/dtingley/files/cmt-mergers.pdf?m=1465167375> accessed 31 August 2018 (discussing how perceptions of unfairness is building resentment and protectionism).
See ‘Chinese State-Owned and State-Controlled Enterprises: Policy Options for Addressing Chinese State-Owned Enterprises’ (2012) <https://www.uscc.gov/sites/default/files/2.15.12drake_testimony.pdf> accessed 31 August 2018 (‘China’s aggressive support policies create an unfair advantage for Chinese SOEs in the Chinese home market, in the U.S. market, and in third country markets. The scope of the problem requires a comprehensive U.S. response, one that combines elements of trade policy, investment policy, and domestic competition policy’).
Wesley A Cann, Jr, ‘Creating Standards and Accountability for the Use of the WTO Security Exception: Reducing the Role of Power-Based Relations and Establishing a New Balance between Sovereignty and Multilateralism’ (2001) 26 Yale J Intl L 414, n 3 <http://digitalcommons.law.yale.edu/yjil/vol26/iss2/7> accessed 31 August 2018.
China may also perceive that these measures are brought in the context of the USA–China rivalry. See Larry Catá Backer, ‘Encircling China or Embedding It?’ Law at the End of the Day (8 November 2010) <http://lcbackerblog.blogspot.com/2010/11/encircling-china.html> accessed 31 August 2018 (‘For a considerable period of time, Chinese officials have been focusing on the possibility that the United States intends to surround it to prevent it from more forcefully asserting its own interests in the region…[T]he Chinese suggest that American policy has been to engage China economically while creating an effective military encirclement that would enhance the American position in the event of conflict’).
Lyubov Pronina, John Follain and Slav Okov, ‘EU is Ready to Fight Back against China’s Growing Trade Dominance’ Bloomberg (3 May 2018) <https://www.bloomberg.com/news/articles/2018-05-03/europe-embarks-on-a-china-strategy-with-a-majority-for-screening> accessed 31 August 2018.
See Chaisse (n 1) 599 (GATT advances opening markets liberalization by imposing obligations while allowing sovereigns to make exceptions when there is a legitimate need).
In some contexts, the exception is ‘self-judging’, thereby permitting each state to decide for itself whether circumstances require the invocation of ‘national interest’, although this aspect has not been definitively decided and remains a grey area.
See Ji Yeong Yoo and Dukgeun Ahn, ‘Security Exceptions in the WTO System: Bridge or Bottle-Neck for Trade and Security?’ (2016) 19 J Intl Economic L 417, 428 (‘security objectives no longer absolutely overrule trade policies. In contrast to what could be called security and trade relations under which security concerns prevail over trade interests, matters have evolved to trade and security relations which further require more rational and balanced considerations of trade interests’).
See Payman Yazdani, ‘US–China Trade War? Not Likely’ Modern Diplomacy (9 April 2018) <https://moderndiplomacy.eu/2018/04/09/us-china-trade-war-not-likely> accessed 31 August 2018 (‘[t]rade wars are particularly dangerous in contemporary politics.’ Backer notes that trade wars would adversely affect developing nations and states with economic challenges by increasing unemployment, political instability and widespread migration into wealthier states. Moreover, trade wars would negatively affect ‘the political orders in the United States and China [which] depend in large part on the fulfillment of a promise of a baseline economic prosperity. Where that disappears then both states might well be subject to the vagaries of populism which, though it might not overthrow either’s system in a formal sense, would substantially corrupt them’).
See Josh Rogin, ‘Trump’s National Security Strategy Marks a Hawkish Turn on China’ Washington Post (18 December 2017) <https://www.washingtonpost.com/news/josh-rogin/wp/2017/12/18/trumps-national-security-strategy-marks-a-hawkish-turn-on-china/?noredirect=on&utm_term=.62bf3e4ca2e0> accessed 31 August 2018 (discussing the US view that China is a strategic rival ‘across the political, economic, military and informational domains in ways probably not duplicated by our other competitors’).
Joel Slawotsky, ‘Sovereign Wealth Funds as Emerging Financial Superstars: How U.S. Regulators Should Respond’ (2009) 40 Geo J Intl L 1239 (Western nations are concerned that sovereign wealth funds (SWFs) and State-owned enterprises (SOEs) may attempt to invest for strategic reasons).
See Chaisse (n 1) 601 (‘the WTO has not clarified the scope of the national security exception. [And], there is inadequate case law to illustrate the correct use of the exception, to what extent, and to which service sectors the exception is applicable’).
See Sarah F. Hill, ‘The “Necessity Defense” and the Emerging Arbitral Conflict in Its Application to the U.S.-Argentina Bilateral Investment Treaty’ (2007) 13 Law & Bus Rev Ams 547, 551.
Tsai-fang Chen, ‘To Judge the “Self-Judging” Security Exception under the Gatt 1994: A Systematic Approach’ (2017) 12 Asian J WTO & Intl Health L & Policy 311, 315.
Locknie Hsu (n 6) 837.
See Chen (n 28) 311, 317 (arguing ‘the term “self-judging” is a misleading one’); see also William W Burke-White and Andreas von Staden, ’Investment Protection in Extraordinary Times: The Interpretation and Application of Non-Precluded Measures Provisions in Bilateral Investment Treaties’ (2008) 48 Va J Intl L 307, 376–86 (regardless of whether self-judging—a reviewing body should employ a good-faith benchmark to determine whether invoking the exception was proper).
See World Trade Organization, Report by the Panel, United States: Trade Measures Affecting Nicaragua (13 October 1986) para 5.17 L/6053 (‘[i]f it were accepted that the interpretation of Article XXI was reserved entirely to the contracting party invoking it, how could the Contracting Parties ensure that this general exception to all obligations under the General Agreement is not invoked excessively or for purposes other than those set out in this provision? If the Contracting Parties give a panel the task of examining a case involving an Article XXI invocation without authorizing it to examine the justification of that invocation, will they limit the adversely affected contracting party’s right to have its complaint investigated in accordance with Article XXIII:2?); see also Bhala (n 2) 278–9 (‘regardless of the self-judging aspect, it does not prevent an affected state from pursuing a damages claim although from a practical matter bodies may be reluctant to decide and parties may not wish to file claims’).
The problem with self-judging is that States can define their national security interests wholly in their own image, and thereby limit external restraints on those interests.
The choice of a specific legal regime for comparative purposes ‘stands at the core of any comparative law methodology and is therefore critical for the methodological viability of any comparative study.’ See Christopher Bruner, ‘Power and Purpose in the “Anglo-American” Corporation’ (2010) 50 Virginia J Intl L 579, 589–92 (discussing the debate between ‘contextulaists’ and ‘functionislists’ in the context of comparative corporate governance. It is acknowledged that differences in jurisdictions limit the comparison to various degrees but this is correct in every comparative study).
See Lutz-Christian Wolff, ‘Comparing Chinese Law…But with Which Legal Systems?’ (2018) 6(2) CJCL 151–73.
See also Bruner (n 33) 589 (‘[t]he validity and utility of conclusions drawn from such comparative studies, then, will depend critically on accurate identification of a true common problem, and this determination is where functionalism encounters a substantial challenge’).
See Wolff (n 34) (noting that the vertical comparative approach is ‘often a useful to benchmark national systems against international systems which represent cross-jurisdictional state-of-the-art legislation and can thus serve as role models’).
Bruner (n 33) 594–5.
As detailed below, the standard suggested does involve concepts such as ‘reasonableness’ and as such this could raise legitimate concerns over the concept of negligence. See eg the landmark ruling in Van Gorkom (n 158), which specifically used the ‘gross negligence’ standard in finding the director conduct failing to meet the care requited to invoke the business judgment rule. However, more recent cases such as Kahn (n 158) rely more on the ‘no rational basis’ standard. While the ‘no rational basis’ standard is somewhat tort-like, it can also be applicable in other contexts such as contractual interpretation. Moreover, while applying a tort-like duty of care as a standard of reasonableness in evaluating national security might be subject to criticism courts use reasonableness as a standard in most contexts and is a concept that goes beyond tort. Reliance on the reasonable corporate director/board standard and its duty of care is unavoidable. Moreover, the concept is embedded in international economic law and tribunals reviewing investment agreements will often rely upon reasonableness.
See Russell A Miller, ‘Comparative Law and Germany’s Militant Democracy’ in Russell A Miller (ed), US National Security, Intelligence and Democracy: From the Church Committee to the War on Terror (Routledge Russell A. Miller ed., 2008) 243.
See R Michaels, ‘The Functional Method of Comparative Law’ in M Reimann and R Zimmermann (eds), The Oxford Handbook of Comparative Law (OUP 2006) 342, 379–80.