International Arbitral Tribunals Research Articles

La suspensión de procesos penales como medida cautelar en juicios arbitrales de inversión internacional ante el CIADI: ¿Vulneración de soberanía?

This paper seeks to analyze whether an international arbitration tribunal in international investment trial, ordering the provisional measure of suspending a domestic criminal process, harms the sovereignty of the defendant State. In our opinion, although they are exceptional measure, it does not. Pursuant the analyzed case-law, the tribunals are implicitly inclined to suspend these proceedings when they affect the claimant’s rights, or when the State abuses of those proceedings seeking other interests than those truth to the criminal process.

Обзор решений международных инвестиционных арбитражей за 2017–2018 годы: вопросы компетенции (юрисдикции) и приемлемости иска

Обзор решений международных инвестиционных арбитражей за 2017–2018 годы: вопросы компетенции (юрисдикции) и приемлемости иска

Mera Investment Fund Limited protiv Republike Srbije - da li je opravdana međunarodna zaštita domaćih stranih investitora?

The Decision on Jurisdiction of 30 November 2018 in the case of Mera Investment Fund Limited v. Republic of Serbia, an ICSID arbitration, addressed the question of international protection of formally foreign investors which involve domestic nationals and capital. The Tribunal found that the fact that a Serbian national stood behind a Cypriot company could not preclude the qualification of the latter as a foreign investor and its protection under the Cyprus-Serbia BIT. This comment will demonstrate that such a decision is justified from both practical and theoretical aspects. Despite the intuition that formally foreign investors cannot be treated as such if they involve domestic nationals and capital, international investment law does not protect foreign capital and foreign nationals exclusively, and the arguments to that effect have been constantly rejected in the long practice of international investment arbitral tribunals. Of course, this does not mean that investors are free to structure their investments according to the possibility to sue their own states in respect of the existing or foreseeable disputes, but that is a separate question pertaining to the abuse of rights and temporal jurisdiction. Therefore, the international protection of domestic foreign investors does not depend on the arbitral interpretation of the law, but primarily on the contracted provisions of BITs.

El abuso del derecho en el arbitraje internacional de inversiones: quien su derecho ejerce, ¿a nadie ofende?

Recientemente, diferentes tribunales arbitrales internacionales han desechado reclamos de inversiones fundándose en el principio del abuso del derecho. La práctica de tribunales de inversiones refleja varias situaciones que, en el futuro pueden considerarse como un abuso del derecho. Este artículo explica la importancia de aplicar este principio en el arbitraje internacional de inversiones como una forma de evitar reclamos infundados y abusivos.

La clause d’exception du tabac au sein de l’Accord de partenariat transpacifique : une victoire pour la santé publique ?

Notre recherche se divise en deux parties. Le premier axe est la compréhension des enjeux qui ont mené à l’adoption de l’exception pour le tabac au sein de l’Accord de partenariat transpacifique (PTP). Le second vise à déterminer si cette disposition marque une préséance de la santé publique sur les principes du commerce international et du droit des investissements. Les actions menées par les militants antitabac, lors des négociations du PTP et l’adoption de la clause 29.5 confirment que la santé publique gagne en importance. Les plaintes déposées par Philip Morris International auprès des tribunaux arbitraux internationaux pour contester des réglementations nationales antitabac ont fortement contribué à l’insertion de cet article dans le traité. Les arrêts démontrent la complexité des problèmes que pose le tabac. Néanmoins, la portée limitée de cette disposition prouve que les enjeux économiques qu’implique le commerce du tabac jouent un rôle prépondérant. Le carve-out du tabac ne traduit pas une volonté explicite de rendre la santé prioritaire, mais plutôt un compromis. Cependant, le caractère novateur de la mesure est indéniable.

Competitive Neutrality of Soes in International Investment Law

This paper aims to investigate whether the principle of competitive neutrality of state-owned enterprises (SOEs) may be resorted to by international arbitral tribunals in investor-state dispute settlement (ISDS). This principle posits that the ownership (either public or private) of a given business should not affect its competitive opportunities in the market arena. Although being legally separated from their establishing State, usually independent and autonomous in their self organization, SOEs retain an undeniable vicinity and contact with the public sphere and can and do participate in the exercise of governmental authority at given conditions. This is reflected inter alia by given benefits of SOEs under domestic legal systems such as regulatory immunity from antitrust regulation, fiscal advantages or the exemption from bankruptcy legislation. In ISDS, the mechanism of attribution of conduct of SOEs is generally governed by customary international law, especially as codified by Article 5 of the Draft Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA), which relies on the divide between governmental and commercial activities, similar to the nature test applied in relation to the defence of jurisdictional immunity of foreign States before domestic courts. In the international arbitral practice, this dichotomy is traditionally based on the “private contractor” test, which defines as “sovereign” such activities in which a private party may not engage, and, conversely, as “commercial” such activities that a private party may perform. Upon resort to competitive neutrality considerations, the “private contractor” test may be further extended so that the acts that a private competitor in the market arena could have not executed be considered as falling under the exercise of elements of the governmental authority. The principle of competitive neutrality has been elaborated under the aegis of the Organisation for Economic Co-operation and Development (OECD) through adoption of soft law instruments, such as its ‘Guidelines on Corporate Governance of State-Owned Enterprises’. In addition,the practice of the World Trade Organization (WTO) dispute settlement system (DSS) may also be instructive with regard to the definition of ‘public body’ under Article 1.1(a)(1) of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). The Author supports reliance by arbitrators to the principle of competitive neutrality of SOEs in order to strengthen the scope of the rules of attribution codified by ARSIWA, especially under Article 5, so as to foster the accountability of States and SOEs, also in the eyes of their constituencies, and to level the playing field in markets where SOEs and private undertakings compete.

An Investment Court that Judges the Judges: A Case of Natural Selection?

Courts and arbitral tribunals have a dynamic and symbiotic relationship. In the field of commercial arbitration, we often perceive the court system to be the institution supporting the arbitral award and process. In the context of investment treaties enforced by investor-state dispute settlement (ISDS), courts have an added dimension. The courts (consisting of a judgment and the judicial process) can form the subject of review by an arbitral tribunal. So, if the international arbitral tribunal judges the fairness of the domestic courts of a state, and a domestic court in turn judges the appropriateness of the findings and process of an international arbitral tribunal, where does that leave the predictability and accountability of the ISDS system? The Chevron v Ecuador dispute provides an appropriate case study of this phenomenon, which has permeated from the local Ecuadorian courts to various international tribunals and courts of the United States, Canada, Brazil and Europe. Similarly, other ISDS claims have encroached (or come close to encroaching) on the task of judging courts of developed nations, such as the recent Eli Lilly v Canada case. Australia recently survived judgment of its legislature by an investment tribunal in the Philip Morris case, but are the judgments of Australia’s High Court now grounds for attack? The ISDS system has been the subject of criticism, with a particular focus on the inconsistency of tribunal determinations. The question thus arises, as to whether this ostensibly circular system of judging the judges promotes the rule of law. With case examples to offer context, this article evaluates whether a permanent international investment ‘court’, such as that proposed under the EU-Canada Comprehensive Economic and Trade Agreement (CETA), the EU-Vietnam Free Trade Agreement (FTA), and by the EU under the Transatlantic Trade and Investment Partnership (TTIP), contributes to consistency and the rule of law. In particular, this article identifies certain adequacies and inadequacies of that system in the context of an evolutionary institutional shift from the existing model based on private contract-based arbitration to that of a public ‘court’. Will this model result in an elevated standard of jurisprudence of international investment law, or just similar circular outcomes? The standard of review of this ‘court’ could just as equally promote a divergence, rather than a convergence, of international investment norms. Ultimately, any convergence between domestic and international legal norms is regulated by the reciprocal standard of deference and the willingness of states to consent to a particular investment treaty standard.

Dispute Settlement in Investment-Related Matters: South Africa and the BRICS

Many states use investment treaties to spur economic development by granting legal protections to foreign investors and providing for direct enforcement before international arbitral tribunals. Yet South Africa has taken a different course. As explained below, South Africa originally signed onto a number of investment treaties despite barely considering how the resulting obligations would affect its constitutional commitments and the authority of its domestic courts. After the shock of losing its first two treaty-based investment disputes, the country shifted from avidly entering into bilateral investment treaties (BITs) to opposing BITs absent compelling economic and political reasons to conclude them. Today South Africa seeks to replace investment treaties and investor-state arbitration with protections under domestic legislation, along with mediation and dispute resolution before domestic courts. In this essay, I describe this shift and explore three difficult and yet-to-be-resolved questions that it presents: (1) Will foreign investors still be able to rely on protections under international law when bringing domestic cases? (2) If so, will the South African Constitution, as a matter of domestic law, displace any relevant commitments under international law? And (3) is the new South African approach consistent with international law?

ПРАКТИКА МІЖНАРОДНИХ ІНВЕСТИЦІЙНИХ АРБІТРАЖІВ ЩОДО РЕАЛІЗАЦІЇ ОКРЕМИХ ПОЛОЖЕНЬ ДОГОВОРУ ДО ЕНЕРГЕТИЧНОЇ ХАРТІЇ

Practice of international arbitrations on implementation of investment provisions of Energy Charter Treaty («ECT») is considered in the article. Certain investment disputes which appeared on the earliest period of operation of this international agreement are considered. Respectively they are interesting when one would like to forecast application of ECT's provisions. Conclusions of arbitration tribunals in cases Ioannis Kardossopoulos (Greece) v. Georgia, Petrobart Ltd. (Gibraltar) v. Kirgizia, Plama Consortium Ltd. (Cyprus) v. Bulgaria and Nykomb Synergetics Technology Holding AB (Sweden) v. Republic of Latvia are analyzed in the article. Among other things author investigates such problematic issues of implementation of ECT investment provisions as: responsibility of state for the violations performed by state enterprises; interrelation of jurisdiction of national courts and international arbitration tribunals on settlement of international disputes under the ECT; provisional application of ECT and possibility to consider violation of investment provisions on the jurisdictional stage. An author shows that ECT investment arbitrations act on the general trend of investment dispute settlement. On the other hand and taking into account peculiarities and importance of ECT respective decisions may become significant for the general practice of investment dispute settlement.

The Social Cost of International Investment Agreements: The Case of Cigarette Packaging

AbstractNational governments have signed and ratified over three thousand International Investment Agreements (IIAs), which for the first time give multinational firms standing to sue host governments in international arbitration tribunals. IIAs have led to a host of high-profile and controversial legal disputes that have led to claims that investor state arbitration may be impeding governments in their ability to regulate and to protect their citizens’ well-being, a phenomenon known as “regulatory chill.” To understand the normative implications of regulatory chill, I analyze investor state arbitration over tobacco in Australia and Latin America. I examine legislative discussions over possible regulatory changes in Australia and Uruguay, the two cases that have faced disputes over tobacco laws, as well as in Latin American countries that provide access to the legislative debates and had legislative initiatives that sought to strengthen tobacco legislation. These cases demonstrate that tobacco packaging laws in a number of countries have been delayed or reduced as a result of fears of potential arbitration among the government and legislators. This regulatory chill is normatively problematic as it suggests that states may be giving up more of their regulatory authority than they initially believed they would have to under IIAs.

Решения международных инвестиционных арбитражей о компетенции (юрисдикции) и приемлемости исков: обзор наиболее примечательных дел за 2016 год

Решения международных инвестиционных арбитражей о компетенции (юрисдикции) и приемлемости исков: обзор наиболее примечательных дел за 2016 год

Mandatory Private Treaty Application? On the Alleged Duty of Arbitrators to Apply International Conventions

International arbitration aims at the peaceful settlement of disputes by practical, foreseeable and reasonably fast decisions, thereby eventually serving the development of international trade. The creation of uniform law by way of international conventions is driven by a very similar aim, namely the removal of legal barriers in international trade through the adoption of uniform rules for various types of international transactions. While both phenomena generally act in a complementary manner, their interaction occasionally gives rise to more intricate questions. One of them is: Do arbitrators have a duty to apply international conventions? A significant number of authors indeed assume that such a legal obligation exists; an approach referred to in the present contribution’s title as ‘mandatory private treaty application’. The contribution investigates possible sources for such an arbitrators’ duty. It commences by scrutinizing a number of international conventions that have created uniform substantive law for contracts of sale or contracts of carriage, uniform conflict-of-laws provisions or uniform rules for matters of arbitration. The conventions’ wording and purpose demonstrate that no obligations for arbitral tribunals flow from the respective conventions themselves, because these are addressed merely to State courts as organs of a convention’s state parties. International conventions, being treaties under public international law, implicitly tolerate and respect arbitral tribunals and their nature as private institutions. However, an arbitrator’s duty to apply conventions may well exist as a duty created and designed by the parties through their arbitration agreement, either directly (by choosing a convention as the applicable law) or indirectly (by vesting the arbitral tribunal with determining the rules of law applicable to the merits). In conclusion, the present contribution accordingly argues that treaty application is only mandatory for arbitrators if the legal arbitration framework says so, resulting in a peaceful coexistence of treaty law and arbitration practice.

Eli Lilly v Canada: the uncomfortable liaison between intellectual property and international investment law

In 2012, Eli Lilly, a US pharmaceutical corporation, initiated an investor-state arbitral claim against the Canadian government after the Canadian courts invalidated two of Eli Lilly's Canadian patents, claiming that the application of the so-called ‘promise doctrine’ violates international patent law agreements. Even though this is not the first investment arbitration case in which intellectual property rights have played such a substantial role, Eli Lilly's claim against Canada illustrates an innovative attempt to employ an international investment agreement to protect IPRs, with a private actor seeking to claim compensation for the invalidation of its patents. Furthermore, it has created significant controversy over the inclusion and recognition of intellectual property rights as ‘investments’ within the scope of international investment agreements. Therefore, in this article, we examine the initial granting and revocation of Eli Lilly's patents in more detail, and discuss the critical problems arising from the possibility of private investors directly challenging domestic patent laws’ compliance with international patent agreements before international arbitral tribunals.

The ECOWAS Court of Justice as an Investment Tribunal

Abstract This article considers the extent to which foreign investors in Member States of the Economic Community of West African States (ECOWAS) might be able to use the ECOWAS Court of Justice to protect their investments against actions of their host States. It does so taking into account the ECOWAS Supplementary Act on Investments and the jurisprudence of the Court of Justice on, in particular, the extent of its substantive jurisdiction. Although it is not suggested that the Court of Justice would be better forum than an international arbitral tribunal, it is argued that it has considerable advantages over national courts.

Зміна традиційних позицій українського експорту

Зміна традиційних позицій українського експорту

Liquidated Damages for Delay in the Middle East: Not Etched in Stone

Liquidated damages in construction contracts represent a fixed-rate mechanism to compensate employers for delays by contractors.Traditionally, common law courts do not interfere with the amount of liquidated damages due. By contrast, the local courts of certain civil law jurisdictions in the Middle East are empowered to adjust those liquidated damages, which raises important questions about how and when those courts will exercise that power and whether international arbitral tribunals will do the same.

Jurisdiction ratione temporis in International Investment Arbitration

Issues concerning the temporal scope of jurisdiction of international investment arbitration tribunals are attracting increased attention due to recent events, such as the denunciation of the icsid Convention by some states, the denunciation of bilateral investment treaties from which the tribunals draw their jurisdiction, or the provisional application of other treaties concerning investment protection. The solutions offered by most arbitral tribunals are in line with international customary rules on the law of treaties, a point which deserves attention as further proof of the cohesiveness of international investment law with public international law.

The applicability of the Monetary Gold principle in international arbitration

According to the Monetary Gold principle, the the International Court of Justice (ICJ) will not exercise its jurisdiction where the legal interests of a third state ‘would form the very subject-matter of the decision’. This principle has been interpreted narrowly by the ICJ and therefore only in two cases (The Monetary Gold case and East Timor case) the ICJ held that it could not exercise its jurisdiction due to this principle. Although the Monetary Gold principle was applied by the ICJ in cases that involved the legal interests of third states, it has been suggested that the principle should be applicable also in international arbitration and also with regard to third non-State Parties. One international arbitral tribunal already applied the Monetary Gold principle due to the interests of a third state and a few other international arbitral tribunals seemed receptive to the idea that the principle could apply to third non-State Parties. Although, at first blush, there are good reasons to argue that the Monetary Gold principle could apply in international arbitration and with regard to non-State Parties, this article explains why it is best to keep the Monetary Gold principle confined to the ICJ.

The Expedited Procedure in Maritime Arbitration: An Overview

One of the duties of an arbitral tribunal is to conduct the proceedings in a speedy and cost effective way; for instance, Art. 17(1) UNCITRAL Arbitration Rules says that: “The arbitral tribunal, in exercising its discretion, shall conduct the proceedings so as to avoid unnecessary delay and expense and to provide a fair and efficient process for resolving the parties’ dispute”. The LMAA has issued its own guidelines “with a view to making the decision-making process as cost-effective and efficient as possible”. In this period, the problem of costs in arbitration is an hot issue and “parties frequently complain that arbitration often costs significantly more than they wish to cost” and now “the cost of bringing or defending a claim before an international arbitral tribunal is likely to be considerably higher than that of bringing or defending the same claim before a national court”. The problem of costs is more significant if the amount in dispute is small or if the issues at stake are relatively simple. Arbitral institutions have to face up to this issue; often they have provided for simplified procedures. Aim of this article is to analyse how some maritime arbitration associations have faced up to this need.

May International Arbitral Tribunals Declare Laws Unconstitutional? An International and a Polish Perspective on the Issue of Dealing with Unlawful Laws

This article focuses on the issue of the international arbitral tribunals’ authority to disregard supposedly applicable statutory provisions of a given national law, which it deems to be non-compliant with relevant constitutional norms from the perspective of the Polish constitutional and arbitration law. Due to the fact that, in recent years, the present issue attracted a significant attention from the international academia, the analysis of the article begins with the report of various positions adopted by some of the leading international scholars on the matter in question. This initial study provides a firm basis for further exploration of this issue in light of the Polish law, which is preceded by a brief summary of the fundamental constitutional principles and notions underpinning the contemporary Polish legal order. Such critical analysis drives the author to a conclusion that there are no sufficiently persuasive arguments which would justify barring international arbitrators from applying the Polish substantive law in its entirety, including denying application of provisions violating the Constitution, which will supersede other normative acts. Conversely, the exercise of such arbitral review amounts to a basic duty of arbitrators (integral part of their mandate to resolve a dispute in accordance with the Polish law as the applicable substantive law of a dispute) rather than their discretionary authority.