Arbitration Regime Research Articles

A New Test Toward Consistency in International Investment Arbitration

Abstract The issue of inconsistency in international investment arbitration has become more evident with the proliferation of investment disputes. This article analyzes the value as well as the desired extent of consistency and coherence for investment arbitration, and further proposes a new test that would enhance consistency and foster the development of investment law. By matching the current status of investment arbitration with three identified conditions for the application of stare decisis or jurisprudence constante, this article concludes that strictly applying the doctrines to achieve consistency is neither feasible nor favorable for the investment arbitration regime. Further, while the public nature of this dispute-resolution mechanism requires consistency and coherence, existing attempts and approaches in this regard have significant limitations. As such, this article proposes a soft precedents test to reach a balance between consistency and flexibility. The test requires the tribunals to consider previous cases in good faith when facing the same or similar issues discussed therein, and the core consideration in whether to agree with previous cases is to develop international investment law. It is suggested that this proposed test would help to clarify, enrich and develop the content of the law within the investment arbitration community.

Commercial arbitration regime and sourcing decision

Introducing commercial arbitration into a two-country sourcing model, this paper examines how the quality of commercial arbitration regime affects sourcing decision when production involves a relationship-specific transaction. Arbitration may be invoked when a firm shaves the investment value of a customized intermediate input or does not pay in full for investment. Under the full verifiability of an ex-post investment value by an arbitrator, firm behavior is governed by the quality of arbitration regime, measuring how fully a national arbitration regime supports the enforcement of arbitral awards. I theoretically find that a firm’s likelihood of choosing global sourcing over domestic sourcing increases with the source and destination countries’ qualities of international arbitration regimes and the source country’s quality of general arbitration regime. These impacts are magnified as the production of an intermediate input involves a greater degree of relationship-specific transaction. Results also show that as the production of an intermediate input entails a greater degree of relationship-specific transaction, a firm’s likelihood of choosing global sourcing over domestic sourcing decreases when domestic arbitration offers the better enforcement of arbitral awards compared to international arbitration.

Article: A Case Note on the ICSID Tribunal’s Decision in Hydro and Others v. Albania: Indirect Expropriation and Proportionality

This case note delves into the complexities of balancing state regulatory authority and investor protections in the context of indirect expropriation, as exemplified in Hydro and Others v. Albania. The commentary scrutinizes the inherent structural bias of the Tribunal, which favoured the sole effects doctrine over the police powers doctrine, thereby slanting the scale towards investor interests. This focus often leaves states defending not just the merits of their regulations but also the extent to which these regulations impact the investor, shifting the tribunal’s attention from regulatory intent to merely quantifying investor detriment. Building on the notion of managerialism, the note argues that this bias makes it challenging for the Tribunal to shift away from its initial pro-investor stance. To restore balance, the commentary advocates for a framework guided by the police powers doctrine, enriched by the principle of proportionality. The note concludes by discussing the ramifications of continued bias, including the erosion of the regime’s legitimacy, evidenced by several countries, including Albania, reconsidering or severing their affiliations with the International Centre for Settlement of Investment Dispute (ICSID), thus signaling an urgent need for recalibration to preserve the legitimacy of the international arbitration regime. Indirect Expropriation, Legitimacy Crisis in Investment Arbitration, Sole Effects Doctrine, Police Powers Doctrine, Structural Bias, Principle of Proportionality, Host State Sovereignty, Investor Protection, Balkans in International Investment Arbitration, Managerialism

Arbitration System in Commercial Disputes in Pakistan and Enforcement of Foreign Awards

Arbitration, as a means of resolving commercial disputes, plays a pivotal role in Pakistan's legal landscape. This article provides an in-depth exploration of Pakistan's arbitration system concerning commercial disputes and the mechanism for the enforcement of foreign awards within the country. The introduction presents an overview of arbitration as a preferred method for resolving commercial conflicts and emphasizes its significance in Pakistan's legal framework. It outlines the specific focus of the article on Pakistan's arbitration system and the crucial aspect of enforcing foreign awards within the country's jurisdiction. The article delves into Pakistan's Arbitration Act of 1940 and subsequent amendments, elucidating the core provisions governing arbitration proceedings. It examines the statutory mechanisms guiding the recognition and enforcement of arbitral awards, emphasizing the legal foundation for arbitration in Pakistan. Detailing the arbitration process in commercial disputes, the article delineates the procedural aspects, practices, and challenges encountered within Pakistan's arbitration system. It provides insights into the advantages of arbitration over litigation and assesses its efficacy in addressing commercial disputes. Focusing on the enforcement of foreign arbitral awards, the article expounds upon Pakistan's legal framework for recognizing and enforcing awards rendered in foreign jurisdictions. It discusses the procedural intricacies involved in seeking enforcement within Pakistan's courts. Highlighting the challenges impeding the enforcement of foreign awards, the article addresses issues such as grounds for refusal and judicial interpretation. It proposes potential reforms and solutions aimed at enhancing the enforcement mechanism, aligning it with international standards. The article summarizes Pakistan's arbitration system in commercial disputes and the enforcement process for foreign awards. It underscores the implications of an efficient arbitration regime and offers suggestions for future reforms and research directions to fortify Pakistan's arbitration landscape.

Challenging Orthodoxy: State Immunity from Court Supervisory Jurisdiction in Investor-State Disputes?

This article considers the role of national courts in investment treaty arbitrations between an investor and a host-State. While the ICSID arbitration regime provides for an a-national approach, the choice of alternative arbitral institutions or rules in an investment treaty could bring into issue the role of the courts of the place of arbitration. It is suggested that the involvement of a sovereign State as a party to such arbitration proceedings raises issues of state immunity not encountered in international commercial arbitrations. While an agreement in an investment treaty to arbitrate an investor-state dispute confers jurisdiction on an arbitral tribunal to determine the dispute, there is presently no global consensus that such an agreement alone amounts to a waiver of immunity of the host-State from the jurisdiction of other national Courts. Absent such waiver of jurisdiction, the court of the place of arbitration would lack legitimacy to exercise any ‘supervisory’ jurisdiction over the host-State party to ensure compliance under its domestic legislation. The authors suggest that national legislatures should consider this when reviewing applicable domestic laws on international arbitration and state immunity. Treaty negotiators should be aware as well of such limitations. State immunity, waiver of immunity, investment arbitration agreement, investor-State dispute, international arbitration, immunity from jurisdiction, court of the seat, supervisory jurisdiction

Constitutional Acquisition and Regulation of Property, Investment Treaties and Expropriation in Africa

Abstract The reforms of investment treaties include the incorporation of flexibilities into standards of investment protection such as indirect expropriation to accommodate public interest regulatory autonomy. In this article, I assess the efficacy of these reforms by analysing the intersection of constitutional provisions on compulsory acquisition and regulation of property in selected African constitutions and expropriation provisions in investment treaties. I argue that indirect expropriation provisions in investment treaties are unconstitutional. I also argue that the new generation investment treaties which incorporate these exceptions do not preserve African States’ authority to acquire and regulate private property. The exceptions do not resolve the incompatibility between the constitutional authority to take and regulate property without paying compensation and African States’ investment treaty obligations on indirect expropriation. By providing for precatory and inefficacious exceptions to indirect expropriation while leaving intact substantive standards of investment protection, the reforms of investment treaties preserve an investment treaty law and arbitration regime that remains skewed towards investors and covered investments.

‘‘Two Tiers or Three Tier’ a Never-ending Saga of Dispute Settlement– A Delaying Mechanism Arbitration

Two Tier Arbitration or Appellate Arbitration is recognised by Court through its various judicial pronouncements. Even though Party Autonomy and fair mechanism are the stand points by which court gives importance or validity to Two Tier mechanism, it has unnecessarily opened the gates for delayed mechanism. The famous Centro trade Minerals and Metal Inc. v. Hindustan Copper Ltd. decision has further strengthened the principle that there is less chance of court intervention. All these shows the positive impact the particular mechanism will bring but the main question here is: Whether Arbitration mechanism is going far beyond speedy redressal of disputes? Or Whether the processes right now the Court’s rely on party autonomy is relatable to unnecessary court proceedings which we are tired off. In this Article the author’s try to analyse the repercussions that will create if Court starts supporting various appellate, revisions or review mechanisms in Arbitration proceedings. The Author’s surmises the Article by providing suggestions on appropriate implementation of Arbitration regime in India by comparing with other countries.

The Complex and Evolving Legal Status of Ad Hoc Arbitration in China

The current People’s Republic of China (PRC) Arbitration Law rejects ad hoc arbitration by requiring the arbitration agreement to specify an arbitration institution. However, such rejection does not constitute a barrier to the enforcement of foreign ad hoc arbitration awards under the New York Convention. To determine the validity of a foreign ad hoc arbitration agreement, China adopts a conflict-of-laws approach in ascertaining its applicable law. Recent years have witnessed China’s initiative to experiment with ad hoc arbitration in its Free Trade Zones (FTZs). The draft revised PRC Arbitration Law published by the Chinese Ministry of Justice (MOJ) in 2021 proposes allowing foreign-related disputes to be resolved by ad hoc arbitration. This article argues that the legal status of ad hoc arbitration in China demonstrates a complex and evolving nature. It notes that while complete legalization of ad hoc arbitration in China is unlikely in the short term, its legal status will continue to evolve, reflecting the complicated relationship between China’s bureaucratized arbitration regime and its increasingly sophisticated arbitration market. Ad Hoc Arbitration, Legal Status, PRC Arbitration Law, Article 16, Article 18, Conflict-of-Laws Approach, Enforcement of Foreign Arbitration Awards, New York Convention, Free Trade Zones, China’s Bureaucratized Arbitration Regime

Submission on Trade Effects of the Indian Arbitration Regime to the Expert Committee Constituted by the Ministry of Law & Justice, India in Response To Notice Inviting Comments on the Working of Arbitration Law in India

Submission on Trade Effects of the Indian Arbitration Regime to the Expert Committee Constituted by the Ministry of Law & Justice, India in Response To Notice Inviting Comments on the Working of Arbitration Law in India

A Shift from State’s Exclusivity to Respecting Party Autonomy: Conceptualising IP Arbitration in India

The consumer-based and technology-driven economy has triggered competitiveness amongst companies. In the ever-evolving market space, the companies have recognised the significance of generating intangible assets such as trademarks, patents, and trade secrets to remain competitive. Due to globalisation, international business transactions with respect to these intangible assets have led to an increase in intellectual property disputes. Moreover, due to IP's complex nature, the risks involved in IP litigation can be burdensome in cross-border IP disputes coupled with the Court’s cumbersome procedure. Given that the stakeholders prefer out-of-court dispute resolution systems like arbitration to resolve their commercial disputes, arbitrating IP disputes is slowly gaining traction. Even though India’s courts have expressed their leaning towards arbitrating IP disputes, the same has become practically impossible due to various impediments in the existing mechanism. This article surveys the current IP arbitration regime and uncovers the existing impediments and loopholes in IP arbitration. Further, the article explores the possibility of liberalising the IP arbitration regime by taking cues from jurisdictions across the globe.

The Roots of Great Power Competition: An Analysis Based on the Increasing Returns Mechanism

Geopolitics, technology and international institutions are three major areas of great power competition. In the analysis of great power relations, both the balance of power theory and the hegemony theory rely on the assumption of diminishing returns and ignore the possibility of increasing returns. Increasing returns play an extensive role in geographical location, technological evolution and institutional change; accordingly, the increasing returns mechanism in great power relations is reflected in the geopolitical competition, technological competition and international institutional competition of great powers. The rational expectation that initial advantages will be transformed into long-term advantages through the mechanism of increasing returns drives great powers into competition whether they are rivals or allies. As specific mechanisms leading to increasing returns, coordination effects operate in geopolitical competition, technological competition and international institution competition; learning effects are found in technological competition and international institution competition; and adaptive expectations play a part in international institution competition. Various cases, ranging from the Anglo-Dutch rivalry over maritime hegemony in the 17th century to the current US-European competition over international investment arbitration regimes, show that great power competition derives from the logic of increasing returns.

Analysing Obstacles and Challenges in Fighting Corruption in Cases of Illegal Investments

Due to existing shortcomings in the system, the suitability and effectiveness of the international investment arbitration regime in addressing corrupt practices in international transactions and investment projects has been frequently questioned. The current legal and regulatory regime presumes that there is a level playing field, i.e., that the parties to an arbitration have equal access to information regarding corrupt actions. However, in practice, bringing claims of corruption in international investment fora meets various obstacles such as evidentiary hurdles and the lack of a specific arbitrators’ mandate. Hence, the focus of this article is on addressing gaps in the international investment arbitration regime dealing with corruption cases. There is increasing concern that the international legal and regulatory regime is inadequate and contains gaps that permit multinational firms to engage in illegal acts involving corruption. Against this backdrop, the main issue that arises is how the international community should respond. This article reviews the gaps in the international investment arbitration regime and then identifies two broad strategies to address the issue of accountability. The first strategy would be to build on and strengthen the existing international investment arbitration regime, which would imply its re-engineering. A second strategy would be to establish a regime providing a new forum and an avenue for dedicated international criminal investigators to be paired with dedicated anticorruption courts that would handle criminal complaints. The Anticorruption Protocol to the United Nations Convention against Corruption (APUNCAC) represents an example of the second strategy. The APUNCAC is a model convention that calls for the implementation of a system comprising dedicated international criminal investigators and dedicated anticorruption courts, in addition to a system where plaintiffs could pursue civil class actions and seek treble damages. The APUNCAC represents a more radical strategy for addressing corruption on the international level. In addition, the APUNCAC would also permit civil class actions seeking treble damages. Overall, the APUNCAC would offer claimants an opportunity to pursue their claims in a neutral forum.

South Africa's jurisdictional challenge with the under-development of cross-border commercial litigation: Litigation v Arbitration

Private international law is a globally established field of law however, its pre-eminence in Africa is insignificant and this has been as a result of its relevance, which according to many scholars is arguable. It follows logically therefore, that it is underdeveloped in Africa, and as this article posits, specifically in South Africa. This article advocates for the development of South African private international law by endorsing South Africa as a viable neutral jurisdiction venue for cross-border commercial disputes, in future. According to this article, this is to be achieved by the recognition of neutral jurisdiction clauses in South African courts. This can only be done by developing an effective and just system of cross-border/trans-national litigation. The proposed sound cross-border jurisdictional rules will supplement the newly established transnational arbitration regime. In order to achieve this, this research reflects an integrated comparative approach by establishing comparative perspectives mainly from the UK, USA, Brazil, Kosovo and South Africa.1 Based on its constitutional values of inalienable human rights and access to courts (justice), South Africa stands to gain immensely from incoming commercial arbitration and commercial litigation as forms of dispute resolution. This will establish the country as the preferred venue for arbitration and litigation on the African continent and beyond.

The New Arbitration Law in Tanzania: An Appraisal of Its Salient Features and Implications for Investment Disputes Settlement

Preference for arbitration as an option for dispute settlement is steadily on the rise, partly because of its perceived efficacious proceedings and enforceability. In 2020, Tanzania enacted a new legislation on arbitration with a detailed and defined framework, cascading through the entire qualifying process of arbitrators, initiating the arbitration proceedings, enforcement and recognition of foreign arbitral awards. This article analyses the corpus of the new legislation, its pertinent structural features, the gaps, and future prospects. The analysis is predicated on the ramifications of the new arbitration law for investment dispute settlements, particularly, state versus investors disputes, as envisaged under the national investment legislation. It concludes by highlighting several aspects which need to be revisited, such as the independence of arbitrators, duty to refer disputes to arbitration, and determination of arbitration costs. Further, a case is made for amendment of the existing national investment legislation in respect of dispute settlement provisions in order to create a harmonious arbitration regime in Tanzania. Tanzania arbitration law, implications to investment disputes, enforcement of foreign arbitral awards

The Ratification of the New York Convention in Ethiopia: Towards Efficacy and Avoidance of Divergent Paths

Ethiopia’s ratification of the New York Convention for the recognition and enforcement of foreign arbitral awards and arbitration agreements is a welcome development. The Convention has been greatly facilitating cross-border mobility of arbitral awards and arbitration agreements in international commercial transactions. The entry into force of the New York Convention (as of 13 March 2020) and the enactment of the Arbitration and Conciliation Proclamation No.1237/2021 have ushered a relatively new era of modern arbitral regime in Ethiopia. In this regard, the necessary legal and formal infrastructure should be laid down for the proper implementation of the New York Convention. This article examines the ramifications of the three reservations registered by Ethiopia under the Convention; namely, the reciprocity, commercial and the non-retroactive application of the Convention. Furthermore, the multiplicity of enforcement regimes in the Ethiopian arbitral system related to these reservations are expounded. The formality requirements enunciated under the New York Convention are elaborated and the need for setting out the legal and institutional framework for contextualization thereof are dealt with. The possibility for award-creditors to resort to the more favourable local law or treaty other than the New York Convention and the recent trend of recognizing and enforcing arbitral awards, which are set aside or annulled in the place of arbitration are highlighted.

Terms of Reference of The Iraqi Commercial Court

In light of the Iraqi Supreme Judicial Council No. (74) for the year 2000 and its influence on the economic and commercial side, this study attempts to illustrate the viability of founding the Iraqi Commercial Court. It is the whole seed. The goal is to make commercial conflicts more swiftly and efficiently resolved through establishing an expert commercial judiciary. Specialized judges with high expertise and knowledge help ensure that court judgments are successful in both processes and causes. In light of the statement published by the Supreme Judicial Council No. (74) for the year 2020, the research focuses on the efficacy of the Iraqi commercial Court in addressing commercial disputes. This article reveals that the Iraqi legislative attempts to attract international investment and the Iraqi executive branch's continued efforts to resolve investor concerns by modifying the Investment Law. The Iraqi court has successfully developed a stable legal environment for multinational firms. Commercial courts, acknowledged as fair by international businesses, were established to accomplish this. As a result of Iraq's communist past, foreign investment was viewed as a source of skepticism and mistrust for many years. These courts will undoubtedly play a significant role in advancing Iraq's progress. However, courts alone will not provide the long-term guarantees needed to transform Iraq's legal framework for domestic and foreign businesses to operate inside. Civil law countries like Iraq necessitate significant reforms to the country's intellectual property, investment, and arbitration regimes.

Quantum and Reasons in Investment Treaty Arbitration: The Next Reasoning Frontier?

Reasons are fundamental to the development of the investment treaty arbitration regime. Transparent and public awards, which set out how and why decisions are made, have provided a basis for the rapid development of international investment law. Reasoning of certain awards, notably those stemming from the Argentine financial crisis, has provided the basis for significant debate relating to consistency and predictability of arbitral awards and the obligations contained in investment treaties. This has informed and extended to critiques relating to the legitimacy of the entirety of the investment treaty regime. However, the discussion and critique on reasons have almost exclusively focused on procedural and substantive investment law aspects.1 Quantum is often given short shrift in investment treaty arbitration awards and scholarship.2 Despite its being the principal remedy sought in investment treaty awards, substantial numbers of awards provide scant insight into or analysis of quantum. At times, this...

The Evolution of Brazilian CFIAs from 2015 to 2020: Like Wine, Does It Get Better with Time?

This article undertakes an in-depth analysis of the evolution of Brazil’s Cooperation and Facilitation Investment Agreements (CFIAs) since the publication of the Brazilian Model CFIA in 2015. It studies the tumultuous history of investment treaties in Brazil and how it may have shaped Brazil’s response to the investor-State arbitration regime through the current model CFIA. It assesses how the reception of Brazil’s Model CFIA among Brazilian stakeholders and commentators may have influenced the trends and evolutions of the fourteen CFIAs signed by Brazil from 2015 to 2020. It argues that the Brazilian CFIAs have improved with time through the progressive narrowing and strengthening of their jurisdictional, substantial, public policy and dispute resolution clauses. At the same time, they may not have fully implemented the criticisms and comments of academia and Brazilian civil society, and some provisions remain to be clarified in the future. Bilateral Investment Agreement, Brazil, Model BIT, Cooperation and Facilitation Investment Agreements, Investment arbitration reform

Proposed Regulation of Third-Party Funding in Investor-State Dispute Settlement

Third-party litigation funding is increasingly used to finance legal claims in investor-state dispute settlement, with financiers funding investor claims against sovereign states in exchange for a share of potentially substantial compensation rendered in eventual arbitral awards. A chiefly unregulated phenomenon, third-party funding has been perceived especially controversial in the context of the investment arbitration regime, a system some allege is already ingrained with inequities. Third-party funding raises numerous policy questions, such as conflicts of interests, disclosure, costs of the proceedings, and even the entire permissibility of the practice in investor-state dispute settlement. This review raises various issues and concerns related to third-party funding in investor-state dispute settlement and presents the regulatory efforts and criticism thereof with regards to the reform of rules of both the International Centre for Settlement of Investment Disputes and the United Nations Commission on International Trade Law.

Unveiling the contemporary arbitration regime in Tanzania: Anecdotes worth sharing, prospects and challenges

This article critically discusses the new changes brought about by Tanzania’s new Arbitration Act of 2020 of Tanzania and its regulations and their implications for domestic and international arbitration and other related laws. The article finds that the establishment of the Tanzania Arbitration Centre; the requirement for accreditation of arbitrators; the introduction of a code of conduct for arbitrators; the ability of international arbitral tribunals to arbitrate investor–state disputes; the introduction of qualified immunity; and clarification of other grey areas are a long-awaiting milestone. The article also argues that the changes will have enormous and far-reaching implications on the arbitration framework in Tanzania, including propelling crossborder commerce and investments. It is further argued that despite its prospect, some areas in the novel arbitration regime need to be revisited to create a more credible framework for both international and domestic arbitration.