Pending Arbitration Research Articles

The Constitutional Dilemmas of Terminating Intra-EU BITs

The adoption of the agreement for the termination of intra-EU bilateral investment treaties in 2020 is a big step forward in the long saga of these investment treaties. This agreement aims to overcome every point of discord between the investment agreements and the EU legal order by terminating both intra-EU bilateral investment treaties and the pending dispute settlement procedures that arose from them. In light of the landmark 2018 Achmea judgement, the agreement asserts that the key role should be given to the Court of Justice of the European Union in this area. This is a great endeavour since almost one-fifth of the investment arbitrations worldwide came from disputes within the European Union. However, it does not seem that the agreement will have the final say since constitutional questions were raised concerning its application. In this spirit, this article briefly outlines the legal and constitutional dilemmas intra-EU bilateral investment treaties pose in the European Union. Then, it outlines the contours and major provisions of the termination agreement, especially with regard to the pending arbitration proceedings. In light of a concrete case brought before the Hungarian Constitutional Court, the article explores the constitutional dilemmas raised by the termination agreement. It highlights three major questions: the international legal aspects, the question pertaining to the European judicial dialogue, and the constitutional principle of non-retroactivity. The article takes into account the major theoretical aspects of each of these dilemmas.

The Termination Agreement of Intra-EU Bilateral Investment Treaties: A Spaghetti-Bowl with Fewer Ingredients and More Questions

This article deals with the issue of the implementation of the Achmea judgment of the Court of Justice of the European Union (CJEU) through the Termination Agreement of Bilateral Investment Treaties (‘Termination Agreement’, TA) between some Member States of the European Union (EU). The article focuses on the analysis of the TA provisions that terminate Bilateral Investment Treaties (‘intra-EU BITs’) and investor-State dispute settlement (ISDS) among EU Members. It also describes TA provisions regulating concluded, new, and pending arbitration proceedings having as a reference the date the CJEU issued the Achmea judgment. Also, it examines how the TA regulates pending arbitration proceedings and discusses how TA Members are allowed to resort to transitional measures to resolve their dispute, throughout an amicable resolution proceeding, if they fulfil some conditions. Further, the article analyses some systemic issues of the TA, some related to the EU investment protection regime, others regarding the legal implications for intra-EU BIT provisions for EU Member States which did not sign the TA. Further, the article examines some possible issues related to the legal nature of the TA under international law and EU law.

The (Underdeveloped) Use of Arbitration in International Insolvency Proceedings

The commencement of insolvency proceedings has mostly been perceived as a form of disturbance in the arbitration world because it could provide a cause to stay pending arbitration proceedings and hinder the enforcement of arbitral clauses and arbitral awards. Most of the academic discussion has focused on these issues. This article will discuss these issues only briefly. Instead, it aims at demonstrating that disputes which arise in the context of international insolvency proceedings could benefit from a more advanced use of arbitration. The article explains the arbitrability of disputes in insolvency proceedings and the limited scope of the public policy defense with the national insolvency laws functioning as a gatekeeper to arbitration. Consistent with existing insolvency case law in many jurisdictions, an arbitration-friendly approach is formulated. Following this approach, the article outlines disputes that could be resolved efficiently when addressed in arbitration. Insolvency, arbitration, arbitrability, bankruptcy, core bankruptcy issue, public policy, cross-border insolvency proceedings, related disputes

Stay of proceedings pending arbitartion: protecting the interests of third-parties to arbitartion in Nigeria

Courts have the power to stay proceedings pending arbitration. In Nigeria, the enabling statute regulating commercial arbitration is the Arbitration and Conciliation Act of 1988. Sections 4 and 5 of the Act contain two similar but conflicting provisions regulating the stay of proceedings. These sections of the law are a product of a common ground found in two different legislative texts. While section 4 leveraged on the provision of Uncitral Model Law on Arbitration, section 5 is influenced by Arbitration Act of 1914. This dichotomy between the histories of the two sections partly accounts for the controversies and difficulties in the interpretation and application by courts and scholars. This article examines the scope of sections 4 and 5 of the Act by identifying the real object of the law and the flaws in its current interpretation. The article considers the American experience, especially, the attitude of courts in granting a stay of proceedings and whether a stay can be granted in a suit against a non-party to the arbitration agreement. Unlike arbitration laws in the United States, one key gap in Nigerian arbitration law is its failure to contemplate stay of proceedings in a suit against a non-party to an arbitration agreement. In addition to identifying the need for urgent legal reforms that accommodate third-party stay pending arbitration, this article recommends that Nigerian courts, like their counterparts in developed jurisdictions, should adopt a more proactive approach by evolving innovative ways in deciding suits involving third parties to arbitration agreement and stay proceedings pending arbitration in appropriate cases to prevent parties from avoiding arbitration by suing a third-party, in line with the global best practices. Keywords : Arbitration, Stay of Proceedings, Third Party.

Protection of energy investments under the Russia-Ukraine bilateral investment treaty of 1998

Russian invasion into Ukraine, which resulted in annexation of the Autonomous Republic of Crimea and the City of Sevastopol in 2014, has created a wide range of complex legal issues, in particular those related to protection of investments in the energy sector. A new government established by the Russian Federation in Crimea seized certain assets owned by Ukrainian legal entities on the Crimean Peninsula and further nationalized them without payment of any compensation. The most valuable energy assets in Crimea were among the Russian Federation’s chief targets. In response, numerous arbitrations were initiated against the Russian Federation. The pending arbitration proceedings include claims of the leading Ukrainian energy companies. This publication provides information about an effective legal instrument used by Ukrainian companies in energy sector to protect their investments on the territory of the Crimean Peninsula and to arbitrate their claims for compensation of the damages caused due to the Russian Federation’s unlawful annexation of Crimea. The relevance of this instrument for the Ukrainian energy companies can be explained by reference to the judgement issued on 20 April 2016 by the Hague District Court which annulled an earlier Yukos award against the Russian Federation, holding that the Energy Charter Treaty, the only multilateral agreement dealing with the energy sector, had not been ratified by Russia and could not apply in relation to it. In light of the foregoing, claimants had to find an alternative way to make the Russian Federation liable for the unlawful expropriations.

Oh, Won't You Stay with Me?: Determining Whether 3 of the FAA Requires a Stay in Light of Katz

The Federal Arbitration Act (FAA) provides the legal framework to render international and interstate arbitration agreements judicially enforceable in the United States. In furtherance of that goal, it provides that if a party initiates litigation rather than arbitration of an arbitrable dispute, either party may request that the court stay the litigation pending arbitration. There is currently a split among the circuit courts in this country as to whether § 3 of the FAA requires a court under these circumstances to stay the suit or whether it has the discretion to dismiss the suit altogether.In Katz v. Cellco Partnership, the United States Court of Appeals for the Second Circuit, a leading U.S. court in creating and shaping domestic and international arbitration law, recently sided with the majority of sister circuits in holding that § 3 requires a court to stay the litigation pending arbitration. This Note argues that the proper interpretation of FAA § 3 does indeed require a stay and proposes that the Supreme Court adopt the Second Circuit’s reasoning. Further, it argues that the mandatory-stay approach is consistent with the plain meaning of the statute, as well as important policy objectives: (1) providing the pro-arbitration framework Congress intended when passing the FAA, as the Supreme Court has repeatedly underscored; (2) foreclosing interlocutory appeals of dismissals that stall arbitrations; (3) rejecting docket management as a grounds for dismissal; and (4) avoiding the general uncertainty and unpredictability of dismissals.

An Exaggerated Account Of The ICSID? - A Reply To Professor Robin Broad

Professor Robin Broad in her article “Corporate Bias in the World Bank Groups ICSID: A Case Study of a Global Mining Corporation Suing El Salvador” uses the example of the pending arbitration dispute of Pac Rim Cayman LLC v Republic of El Salvador to make an increasingly compelling case for the imbalances in the current regime of the International Centre for the Settlement of Investment Disputes (“ICSID”). The aforementioned case arose out of a Canadian-based transnational mining corporation called Pacific Rim suing El Salvador for failing to authorize an extraction permit after the company allegedly invested millions in the exploration of the El Dorado mine in the northeastern province of Cabanas. While I do share some of Professor Broad’s skepticism and believe that the ICSID system needs reforms, I find her claims lacking a significant degree of merit both as they pertain to (a) pro-corporate bias in the ICSID system; and (b) the lack of consideration for public interests by the ICSID tribunal. In this short comment, I will try to offer a critical narrative of Professor Broad’s claims and in this process highlighting some of the genuine concerns of the ICSID system and suggest reforms wherever needed.

The Effect of Insolvency on Pending International Arbitration: What Is and What Should Not Be

Situations in which the respondent in international arbitral proceedings is declared insolvent in its jurisdiction of incorporation while the arbitration is still pending are not uncommon. They raise a number of choice of law issues both in terms of substantive and procedural law. While the roots of arbitration lie in party autonomy, insolvency laws are often comprised of mandatory rules protecting the interests of different classes of stakeholders. This article attempts to devise an abstract model of the various choice of law and characterzation problems regarding the cross-border effect of the insolvency and provide reasoned options and solutions for the arbitral tribunal faced with the interaction between insolvency and pending arbitration proceedings. It is suggested that it is part of the arbitrators’ duty to render an enforceable award to consider cautiously the effects of insolvency, especially if there is a risk of a clash with the mandatory framework of insolvency either at the seat of the arbitration or the likely place of enforcement of the award. The arguments are tested against recent case law of various national courts having reviewed the conflicts between arbitration and insolvency.

Remarks by Ralph G. Steinhardt

A good poker player probably understands the Chevron-Ecuador dispute better than a lawyer, but--undeterred--let me summarize five nested legal issues that lurk in this case. My essential observation is that the proliferation of forums in the case, while reflecting the adversaries' procedural and strategic choices, has profound substantive consequences and reflects the institutional and doctrinal fragmentation of contemporary international law. That kind of incoherence is acceptable only if the proposed cures turn out to be worse than the underlying disease. BIT ARBITRATION The pending arbitration under the U.S.-Ecuador Bilateral Investment Treaty (the BIT) (1) illustrates multiple layers in the paradigm of complexity: (1) The tension between investor protection and other obligations of states. I am skeptical about transforming BIT panels into collateral, conceivably final appeals tribunals from court systems around the world. Under the banner of investor protection, that potentially undermines other substantive obligations of states, including those being litigated in domestic courts under international standards governing, e.g., human rights, environmental protection, corporate governance, and corrupt payments. There are also independence-of-the-judiciary concerns if the executive branch of a state appearing in the arbitration is obliged by the panel to derail the local proceedings and judgments of the judiciary. (2) The tension between simultaneous arbitral proceedings and judicial The Ecuadorians' efforts to have a U.S. court stay the BIT arbitration failed in March 2011. (2) Given the strong policy in favor of arbitration and the absence of express authorization for domestic courts to stay arbitrations under the New York Convention, there is no authoritative answer to the question of whether, prior to any judgments or awards in a case, courts may stay arbitrations and arbitral panels may stay the enforcement of judgments or by extension any judicial proceeding. This is potentially the stuff of chaos. (3) The merits of the jurisdictional holding on third-party rights. The principle of the ICJ's Monetary Gold decision is that although a tribunal may have jurisdiction over a dispute it must not or should not exercise that jurisdiction if the very subject matter of the decision would determine the rights and obligations of a State which is not a party to the proceedings. (3) Perhaps this rule does not protect private parties. Perhaps the dispute between Chevron and Ecuador on the meaning and scope of their settlement agreement does not implicate the interests of the Ecuadorian plaintiffs. But arbitrations cannot protect the interests of non-investor litigants who are not parties to the arbitration. That is problematic at a minimum because the due process rationales behind Monetary Gold are compelling. The limited review of arbitral judgments at the enforcement stage means that such holdings are difficult to correct even if they're erroneous. ENFORCING THE ECUADORIAN JUDGMENT IN DOMESTIC COURTS The Ecuadorian plaintiffs have not sought to enforce their judgment anywhere. Chevron attempted to block such action, and the district court in New York globally enjoined the enforcement of the judgment. On January 26, 2012, the Second Circuit reversed, (4) concluding that challenges to the validity of foreign judgments under New York's Uniform Foreign Country Money-Judgments Recognition Act (5) can occur only defensively. If and when enforcement is sought in a U.S. court, we will confront the reality that there are no federal standards governing recognition and enforcement of foreign judgments. In addition, because there is no rule of non-inquiry in transnational enforcement proceedings, a U.S. court may decline to enforce a judgment obtained by fraud or tainted by prejudice in the court that rendered the judgment. But developing the record for such a determination is notoriously difficult, especially if the fraud claims were already advanced in the country from which the judgment originates. …

Non-signatories’ Right to Appeal the Denial of a Stay of Litigation: Arthur Andersen L.L.P. v. Carlisle

In Arthur Andersen L.L.P. v. Carlisle, the U.S. Supreme Court held that any litigant—even a party who has not signed an underlying arbitration agreement—who seeks a stay of litigation pending arbitration under the U.S. Federal Arbitration Act (FAA) is entitled to an immediate appeal from a denial of that motion. This highly disturbing decision fails to engage with important principles of arbitration law and creates a clear, but ultimately problematic, rule for future litigants.

Resolving Unresolved Relationship Problems the Case of Cross Border Insolvency and Pending Arbitrations

The relationship between arbitration and insolvency in a cross border context is fraught with difficulties which can blight transnational insolvency practice. This article is concerned with the judicial constructs applied (in the EU, civil law and common law traditions) to resolve the conflict between a pending arbitration in one country and forthcoming insolvency proceedings in another. Should the arbitration be allowed to continue and what law should be used to determine the issue? In the EU, it might be said that the question is largely determined by the EU Insolvency Regulation. A comparative law and teleological discussion would highlight the different imperatives adopted in the different judicial approaches to the problem.

Federal Circuit rejects proposition that arbitration agreement 'runs with the patent'

The US Court of Appeals for the Federal Circuit rejected the proposition that an arbitration clause ‘runs with the patent’ when it affirmed the district court's order denying the defendant/licensees' motion to dismiss or stay litigation pending arbitration where the assignee plaintiff was not a signatory to the patent license agreement containing the arbitration clause.

Integrating Mediation into Arbitration:Why It Works in China

Despite the divergent views on the acceptability of arbitrators facilitating settlement in a pending arbitration, a merged system seems to work well in Asia, especially in China due to its legal culture that emphasizes mediation. This article examines the reasons why mediation has been successfully integrated into arbitration in China from its specific historical, cultural and political perspectives, and analyzes how it could impact the contemporary practice of integrating mediation into arbitration in the world.

Praktische Aspekte des Vergleichs in Schiedsgerichtsverfahren

In order to terminate a pending arbitration proceeding by way of a settlement agreement, the parties can basically opt either for a ‘consent award’ (‘award on agreed terms’), or an ‘order for termination’. Under the ICC Rules of Arbitration or the LCIA Arbitration Rules, the parties have the additional possibility to simply inform the respective court that a settlement has been reached, whereupon the arbitral tribunal is discharged and the arbitration proceedings are concluded without any termination order issued. It is up to the parties to decide what best serves their interests. Provided that confidentiality is not a major concern, and enforceability is given priority, which will be the case where the settlement agreement provides for claims that fall due in the future, a consent award will answer these purposes best. While in national (Swiss) arbitration proceedings enforceability of a consent award can be fairly well secured by complying with Art. 33 of the Intercantonal Arbitration Convention, the situation is far more complex in international arbitration proceedings, not least so because the New York Convention of 1958 neither defines the term ‘arbitral award’ nor refers to ‘consent awards’. Gabrielle Nater-Bass, the author of the present article, has compiled the most important requirements to be observed for enhancing the chances that the settlement agreement can be enforced internationally. They are, among others, that the parties opt for a consent award; that the consent award is referred to as ‘award’; that the parties agree on unambiguous and transparent performance obligations; that the parties’ prayers for relief are repeated in the consent award; that a dispute still exists when the arbitral proceedings are initiated; and that the arbitral tribunal has jurisdiction over the subject matter of the settlement.

Stay-of-Court Proceedings Pending Arbitration in Nigerian Law

Stay-of-Court Proceedings Pending Arbitration in Nigerian Law

Netherlands: New Statute on Arbitration

On July 2, 1986, the Dutch Parliament adopted a statute modernizing Dutch law on arbitration. Although it does not technically distinguish between domestic and international arbitration, this statute, following the trend initiated by the United Kingdom [1979 Arbitration Act, 18 I.L.M. 1249 (1979)], France [Decree of May 12, 1981, 20 I.L.M. 917 (1981)], and Belgium [March 27, 1985 Statute, 25 I.L.M. 725 (1986)], clearly purports to liberalize Dutch law on international arbitration. The travaux preparatoires states that it does not substantially depart from the UNCITRAL Model Law on International Commercial Arbitration [24 I.L.M. 1302 (1985)]. The statute came into force on December 1, 1986, and applies to pending arbitration cases.

The choice for respondents after The Leonidas D: should a turkey let a sleeping dog lie or look forward to Christmas?

Long delay and inactivity by a claimant can cause serious prejudice to a respondent. A stale and substantial claim can affect adversely the accounts and credit-rating of even a large corporation; and a pending arbitration can hang for many years like the Sword of Damocles over a respondent, his witnesses and legal advisors. It is rarely an effective remedy for the respondent to seek a peremptory order from the arbitral tribunal or the court, or to prod the claimant into prosecuting his claim more rapidly. It is usually better to let a sleeping dog lie. No respondent looks forward to the trouble, expense and risk of an arbitration prosecuted to an award. Since 1979, the English Courts have tried unsuccessfully to evolve several remedies to protect a respondent prejudiced by delay. Each attempt has been struck down by the House of Lords or the Court of Appeal. The recent decision...

Enjoining Employers Pending Arbitration - From M-K-T to Greyhound and Beyond

Enjoining Employers Pending Arbitration - From M-K-T to Greyhound and Beyond

Federal Procedure. District Court Order Refusing to Stay Equity Proceeding Pending Arbitration Held Not Appealable

Federal Procedure. District Court Order Refusing to Stay Equity Proceeding Pending Arbitration Held Not Appealable