International Arbitral Tribunals Research Articles

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.

Tipping the balance – diversity and inclusion in international arbitration

Since publishing ‘Getting a Better Balance on International Arbitration Tribunals’ in Arbitration International Volume 28, Issue 4 in 2012 and ‘Is the Balance Getting Better? An Update on the Issue of Gender Diversity in International Arbitration’ in Arbitration International Volume 31, Issue 3 in 2015, the author has witnessed an increase both in women’s visibility in international arbitration and in general awareness of this issue. There has been a significant change in attitudes in a short period of time. However, translating the change in attitudes to a meaningful change in the number of appointments to tribunals of women and other diverse candidates, as well as more junior arbitrators, will only result from a change in the amount of information available to parties when they appoint arbitrators. The author attributes the lack of diversity in this field to the issue of information asymmetry and the problem of the ‘solicited feedback loop’ and believes that increased transparency and greater access to information is the only way to secure significant change.

Legalization Under the Premises of Globalization: Why and Where to Enforce Corporate Social Responsibility Codes

This contribution advances the argument that global self-regulation through corporate social responsibility codes can and should be enforced under domestic private laws. Corporate social responsibility codes are defined as unilateral corporate commitments that indicate a corporation's willingness to take on a global regulatory role in the absence of a global political government—a phenomenon that is difficult to grasp from the perspective of traditional private law categories. The contribution thus starts by discussing the aspects in which private corporate codes and private law categories seem not to fit, and points to recent developments in substantive private law that could change this situation, namely case law, statutory reform, and the novel contract designs used by private actors to effectuate their corporate social responsibility codes, which private law can rely upon. This contribution argues that these developments provide sufficient ground to assume a gradually evolving readiness within substantive private law to provide for the enforcement of these corporate social responsibility codes. Subsequently, the contribution focuses on the normative side of the argument. From a socio-legal perspective, the main reason in favor of enforcement is identified in the specific social potential and the risks created through these corporate codes for a globalized society that private law has to help mitigate. Based on this argument, the contribution continues by discussing the possible actors that could realize enforcement. First, it identifies domestic courts as important actors to enforce this type of global self-regulation, and, in this context, analyzes how, in order for domestic courts to pursue such an enforcement strategy on the basis of substantive private law, private international law equally requires a transformation. Second, the contribution considers international arbitral tribunals as additional institutions that could be entrusted with the enforcement if related changes in domestic arbitration laws can safeguard the function of domestic courts to monitor this enforcement role of arbitrators .

Вопросы компетенции (юрисдикции) международного инвестиционного арбитража и приемлемости иска: обзор наиболее примечательных дел за 2014–2015 годы

Вопросы компетенции (юрисдикции) международного инвестиционного арбитража и приемлемости иска: обзор наиболее примечательных дел за 2014–2015 годы

Решения международных инвестиционных арбитражей по существу споров: обзор наиболее примечательных дел за 2014–2015 годы

Решения международных инвестиционных арбитражей по существу споров: обзор наиболее примечательных дел за 2014–2015 годы

The Political Economy of Investor-State Disputes

Under what conditions are countries most (least) likely to become involved in international investment disputes? Building on the premise that this question cannot be addressed without reference to the incentives facing political leaders, this study develops a theory emphasizing the domestic factors that lead governments to opt for short-term political gains at the risk of being drawn into potentially costly processes of international dispute arbitration. The theory is assessed on the basis of an original database covering the full set of known treaty-based disputes registered at international arbitral tribunals over the 1987-2011 period. After controlling for variations in exposure to the risks of investment disputes, the results suggest that the willingness of leaders to discount the potential costs of investor-state dispute arbitration varies with leadership turnover, economic conditions, and domestic political institutions, with the relationship between political democracy and the probability of investment dispute involvement assuming a curvilinear form.

The Risk Management of Superior Award in International Investment Arbitration in the Method of Categorization

Due to the inconsistency of interpretive path and applicable methods, the award made by the international investment arbitral tribunal cannot naturally be recognized by both parties, which are always the risk of disqualification and annulment. To control the questioned risks of the award, the arbitral tribunals shall make “superior award” which could be recognized by both parties as far as possible. Explaining the superior award in the method of categorization is able to analyze a series of awards under the procedure or substantial issues of same type or the procedural or substantial contents of specific issue arguments on the individual cases. The application of the method could proceed from two angles: The micro categorization means the content of arbitral award should be divided into the “superior part” and “inferior part” in terms of the reasonableness of the individual award. The former has the value of being invoked while the latter should be excluded. The macro categorization studies the categorization of a series of awards in the range of the same legal relationship, and the separation of superior and inferior award makes its appearance. However, the analysis of award through the empirical method may further determine the inherent characteristics of superior award – the integrity of the logic clues and the hierarchy of the argument should be put more emphasis on the argument, and adequate and rigorous demonstration should be made combined with specific facts of the case. If the pro-portion of superior award in the investment arbitration award can be improved, the possibility that the parties finally accept the award will be increased, and the risk of disqualification and annulment could be controlled.

Are National Courts and International Arbitral Tribunals in Two Worlds or One?

Are National Courts and International Arbitral Tribunals in Two Worlds or One?

Foreign Investors and the Colombian Peace Process

The International Investment Regime (iir) materialises in international arbitral tribunals that protect the rights of foreign investors. Could these tribunals hamper the implementation of exceptional measures agreed to end armed conflicts? The principle of proportionality, usually employed to balance competing demands such as the interests of international investors and the right of states to self-determination, could fall short when it comes to the concept of a nation and a society’s right to peace. Focusing on the Colombian peace process, this article argues that the agreement on land redistribution, a cornerstone of the peace agreements, benefits the whole society, including foreign investors. However, the colonialist nature of the iir could lead foreign investors, who see their investments and expected profits affected, to demand compensation for governmental land acquisition. The Colombian case suggests powerful lessons for the willingness of transitional states to defend their people’s right to peace in international tribunals.

The Role of the Swiss Federal Tribunal and Its Impact on the Court of Arbitration for Sport (CAS)

The Court of Arbitration for Sport (CAS) is an arbitral institution with its seat in Lausanne, Switzerland. As such, it is subject to the more general legal framework of international arbitration in Switzerland regulated through the Swiss Private International Law Act (Swiss PILA). The Swiss PILA emphasizes the parties’ autonomy in the conduct of the arbitration proceedings and limits the intervention of state courts to the strict minimum. Within this context, arbitral awards are final upon their notification and can only be challenged before the Swiss Federal Tribunal (SFT) on a very limited number of grounds, exhaustively enumerated in Art. 190(2) PILA. Notwithstanding the “limited” role that the Swiss legislator reserves to the SFT, Switzerland’s Supreme Court has so far rendered numerous judgments in motions to set aside CAS awards. In this respect, the SFT plays a major role in the structure and development of CAS: first, the SFT controls both the legality of CAS as an arbitral institution and the legality of CAS awards as such; second, the SFT may confirm, reject or more generally interpret some of the procedural provisions of the CAS Rules and the law applicable to the merits. This working paper provides an overview of how the SFT judgments have two-fold impact on the functioning and development of CAS as an international arbitral tribunal.

STAB IN THE BACK - THAT’S OUR WAY

STAB IN THE BACK - THAT’S OUR WAY

Senkaku/Diaoyu: Are They Islands?

The suspected presence of vast hydrocarbon deposits in the adjacent waters of the Senkaku/Diaoyu island group renders these features intrinsically valued for the maritime boundary to be drawn between Japan and China in the East China Sea. Given that offshore geographical features qualifying as islands in a legal sense may potentially generate extensive areas of seabed jurisdiction in the same manner as continents, the connection between the features’ maritime generating capacity and the associated sovereign rights over surrounding seabed energy resources becomes self-evident. This paper considers the legal status of the disputed Senkaku/Diaoyu islands in the East China Sea and the potential legal implications for the future maritime delimitation between China and Japan. In doing so, it reviews the relevant provisions of the UN Convention on the Law of the Sea (UNCLOS) on the regime of islands and applies this analysis to the case of the Senkaku/Diaoyu features in the East China Sea. It also considers the most recent South China Sea Arbitration Award on the interpretation and application of Article 121 of UNCLOS to the disputed South China Sea insular features. The paper concludes that whilst there has been no certain rule or consensus on how the said provisions of UNCLOS are to be interpreted and applied, it is highly doubtful that an international court or arbitral tribunal would find any of the Senkaku/Diaoyu islands being an island in a legal sense.

The EU–China Bilateral Investment Treaty: a challenging first test of the EU’s evolving BIT model

The EU–China Bilateral Investment Treaty (BIT) is a genuine landmark in bilateral trade and investment relations and the evolution of the EU’s Common Commercial Policy. However, negotiating a BIT with China presents distinct challenges, primarily due to the radical differences that exist between the EU and China’s legal frameworks, their differing values and levels of development, and the structural features of their economic models. The EU’s evolving BIT model is still in the very early stages of its development, and China remains generally cautious on consent to international arbitration tribunals. This paper makes a novel contribution to the literature on EU–China investment law in several respects. Firstly, it provides an up-to-date account of how the negotiations for an EU–China BIT have been shaped by competitive externalities, i.e. current developments in the negotiation of Free Trade Agreements or BITs between the EU or China and third parties, or equally those among third-parties excluding both the EU and People’s Republic of China. It thus provides a broader context for understanding the pursuit of an EU–China BIT, framing the initiative in terms of mutual regard for external competitive pressures which threaten both parties with the prospect of disadvantage vis-a-vis key competitors in the others’ market for investment. Secondly, it traces the motivations for a BIT between the EU and China by examining recent bilateral investment and trade disputes, illustrating the potential that a BIT might hold to mitigate future tensions. Thirdly, it frames the proposed BIT in terms of the EU broader trade policy and trade diplomacy goals on China.

Pursuit of Climate Change Mitigation under International Investment Law: Republic of Korea as a Global Test Bed

Republic of Korea is taking a leading role in mitigating climate change and the Paris Agreement will definitely boost its efforts as it enters into force sooner or later. This Agreement obliges its Parties to pursue domestic mitigation measures with the aim of achieving the objectives of their Nationally Determined Contributions (NDCs) setting forth greenhouse gas (GHG) emissions reduction goals, and such measures may involve highly regulatory measures affecting investments owned by foreign investors as a consequence. Unfortunately, however, most of the existing international investment agreements (IIAs) between national governments protecting such investments and investors have been evolved without taking climate change concerns into account seriously. Accordingly, Korea’s major climate change policies may trigger foreign investors to initiate or at least threaten to initiate investor-State dispute settlement (ISDS) procedures and bring investor-State disputes against the Korean government in response. In this context, this thesis reviews the legal framework of Korea’s major climate change policies and analyzes the previous jurisprudence of international arbitration tribunals concerning environmental measures of host States. This thesis also proposes the Korean government and other host States to incorporate climate change-savvy preamble and operative clauses as well as general exception clauses in the future IIAs. By doing so, host States will be able to integrate their climate change policies with the international investment regime and minimize a risk of triggering investor-State disputes against them under a new climate change regime.

Trans-frontier Environmental Damage in International Jurisprudence

The enhancement of environmental awareness in both domestic and international level has been accompanied by the growing number of internal authorities and international bodies within which environmentally related disputes can be addressed. Over the years, environmental issues have been discussed by different international judicial courts and arbitration tribunals. Their contribution to enhance the legitimacy of international concerns to the protection of environment is a significant one. They have acted to clarify the international environmental rules within the international legal order and have augmented the ability of domestic legal systems to deal with associated problems more effectively. The international judicial bodies as well as arbitration tribunals have been faced with a rather vague set of rules and principles that made it an enormous task to apply the law to the particular facts of a case in question. Issues relating to the existence, contents and meaning of the certain related concepts took considerable spaces in the contributions of international courts and tribunals in<em> </em>the course of developing international environmental law, particularly the concepts of environmental damage and the liable party to make reparation.<em> </em>International judicial bodies mostly relied on procedural obligations of states and arbitration tribunals on damage itself and the necessity to compensate them. While the damage is mostly confined to significant damage of value-use aspects of the environment, and liable party is focused on the damage causing activities of the operator, the reparation modes are unsteady between only financial compensation and, if possible,<em> </em>near to<em> </em>restitution.

Foreign Corruption: Differentiating Illegal Acts from Legal Acts

While it is seemingly straightforward to determine whether an action is corrupt or not, under the common definitions of corruption, determining its illegality is a very complex analysis. Because companies are generally not given full disclosure of what constitutes illegal corruption, they fear that all corruption illegal, and therefore do not want to jeopardize themselves or the company by disclosing to anyone, including their lawyers, any which may be seen as illegally corrupt.In this paper we will look at what is considered illegal under the laws of Canada and the USA, including defences available to charges of corruption, as well as the relationship between corruption and lobbying, and make some comparison with the developments in the transnational law arena, particularly related to decision of international arbitration tribunals.

States Sued: Democracy, the Rule of Law, and Investor-State Dispute Settlement (ISDS)

ABSTRACTInvestor-state dispute settlement (ISDS) cases have increased dramatically in recent decades, and the institutions of investment arbitration to resolve investor-state disputes constitute the core of the modern investment regime. In this article, we seek to explain the variation in the host governments’ risk of being challenged by foreign investors before international arbitration tribunals. We argue that such risk is greatest at the intermediate level of democracy where some democratic elements such as elections are strong, but the system of rule of law remains weak. In those regimes, “regulatory risk” runs higher than in autocratic regimes as the host governments are under greater pressure for regulating matters of broad public concern. At the same time, more traditional political risk of arbitrary, discriminate, and abusive acts remains considerable at that level of democracy due to weak rule of law, exacerbating the former risk. Empirical analysis provides a good deal of support for the argument.

Enforcing IPRs Through Investor-State Dispute Settlement: A Paradigm Shift in Global IP Practice

Globally, we are moving towards stronger Intellectual Property Rights. Intellectual Property Rights (IPRs) have become an integral part of the regulatory system and they are included in investment, regulations and trade policies. It is now important to understand the linkage between them. Recent practices of International Investment Agreements (IIAs) include intellectual property as a definition of investment, giving the investor an alternate forum to enforce their IP under International arbitration tribunal. International investment laws focus mostly on the rights of the investor and diverse opinions of generally accepted international principles such as fair and equitable treatment that encourage investors to litigate intellectual property through Investor State Dispute Settlement (ISDS). This article will focus on the relationship between intellectual property and investment agreement in three aspects. The first part of the article will focus on how intellectual property is treated as an investment. The second part emphasizes how an investor uses an investment agreement as a tool to enforce intellectual property. The last part of the article highlights the possible impacts of litigating intellectual property under ISDS, particularly focusing on TRIPS flexibility.