Highlights
- Four articles this week on the relation between religion and arbitration
- Article on enforcement of arbitral awards under International Trade Agreements in India
- Lots of Articles on Investment Arbitration. June 2011 seems to be the Investment Arbitration Month!
- Lee’s article on dissenting opinions in commercial arbitration is interesting (and thankfully short!).There’s an article this month discussing to what extent the use of stamps and seals will lead to satisfying the signature/ writing requirement of arbitration agreements.
- Two articles on the settlement in arbitration
Readers may also note this very lengthy post in Kluwer Arbitration Blog by Gary B Born & Claudio Salas on the US Supreme Court's decision AT & T v Concepcion (2011). Take note of this if you are a follower of international arbitration law!
Choice of Law and Islamic Finance
Texas International Law Journal, Vol. 46, No. 2, 2011
Julio C. Colon
Abstract:
The past decade has seen the rapid growth of Islamic finance on both international and domestic levels. Accompanying that growth is a rise in the number of disputes that implicate Islamic law. This remains true even when the primary law of the contract is that of a common law or civil law country. If judges and lawmakers do not understand the reasoning of Islamic finance professionals in incorporating Shariah law, the result could be precedents and codes that hamper the growth of a multi-trillion dollar industry. This note compares the reasoning of the English court in Shamil Bank v. Beximco Pharmaceuticals to the practice of forums specializing in Islamic finance dispute resolution. The note then addresses other perceived difficulties in applying Islamic law in common law and civil law courts. The practice of Islamic finance alternative dispute resolution (ADR) forums shows a consistent reliance on the use of national laws coupled with Shariah. Also, there are cases showing that U.S. courts and European arbitrators are willing to use Islamic law. Research indicates that the decision in Shamil Bank v. Beximco Pharmaceuticals was not consistent with the intentions of the parties or the commercial goals of Islamic finance. Finally, this note concludes that it is not unreasonable for a Western court to judge a case if the dispute arises out of an Islamic finance agreement.
The Rise and Possible Fall of Investor-State Arbitration in Asia: A Skeptic’s View of Australia’s ‘Gillard Government Trade Policy Statement’
Sydney Law School Research Paper No. 11/32
Luke R. Nottage
Abstract:
Treaty-based investor-state arbitration (ISA) has gradually become a more established part of the legal landscape in the Asian region. But this development is threatened by the “Gillard Government Trade Policy Statement” announced in April 2011. One interpretation is that the Australian government will no longer include ISA protections in future investment treaties or Free Trade Agreements (FTAs) even with developing countries – effectively eschewing treaty-based ISA altogether. Another interpretation is that the government may henceforth include ISA provisions on a case-by-case basis, but not if that would provide greater procedural or substantive rights against the government to foreign investors compared to local investors in Australia.
Part I of this paper outlines the complex and potentially far-reaching implications of even the latter policy stance. Part II revisits some of the economic theory and evidence underlying the related recommendation of Australia’s Productivity Commission, announced in 2010 as part of its review of FTA and investment treaty policy, including some more recent case studies involving investment both in and out of Australia. Part III outlines some less radical ways for Australia – and other countries in the Asia-Pacific region – to rebalance private and public interests in the ISA system. However, Part IV outlines how Australia’s recent experience suggests more generally that nowadays there may be surprisingly few constituencies prepared to come out strongly in favour of refining the present-based ISA system in those ways. Within many states, there are probably more public and private interest groups now wishing to see it more drastically curtailed – along the lines recently announced by the Australian government or, indeed, even more restrictively. Part V concludes that many other states in Asia already or potentially negotiating treaties with Australia – including Japan and China – are also unlikely to achieve a relaxation of the policy stance. The treaty-based ISA system may well therefore end up declining significantly in the region, especially over the medium- to longer term.
The Status of Religious Arbitration in the United States and Canada
Santa Clara Law Review, Forthcoming
Nicholas Walter
Abstract:
This paper discusses, and challenges, the status of religious arbitration in the United States and Canada. Religious arbitration - defined as the settling of disputes through the intermediation of religious authorities, rather than having recourse to the courts - has been written about considerably in recent years. All writers to date have considered ways in which rights guaranteed by secular courts can be maintained before religious tribunals. This paper is the first to consider the problem caused by religious tribunals for the rights of free exercise of religion for those using religious tribunals. It argues that the enforcement of awards made by religious tribunals, and agreements to arbitrate before religious tribunals, by secular courts is an unconstitutional infringement of parties’ rights of free exercise of religion in both the United States and Canada. This is true even though the United States Supreme Court and the Canadian Supreme Court have different jurisprudence on freedom of religion. Although the United States and Canada may still encourage parties to mediate their disputes through religious means, statutes should be enacted in both countries providing that no party may enter a contract to enter a binding arbitration process based on religious principles. Furthermore, the discussion in the paper has implications for debates about the status of religious tribunals in other countries, such as the United Kingdom.
Combating Climate Change through Investment Arbitration
Fordham International Law Journal, Vol. 35, 2011
Anatole Boute
Abstract:
In addition to the general non-commercial risks that may affect any foreign direct investment, low-carbon investments face specific risks related to the mechanisms of public support that states develop to enable the financial viability of such projects. In the absence of the full internalization of the carbon externality, a perception amongst investors that states might renege on promises of support once investments are made seriously affects the credibility and thus effectiveness of climate policies. By limiting this risk, investment arbitration, which has often been accused of constituting a threat to climate change mitigation efforts, could in fact reinforce climate policies.
Unconscionability Wars
Northwestern University Law Review Colloquy, Vol. 106, 2011, Loyola-LA Legal Studies Paper No. 2011-19
David Horton
Abstract:
It would be hard to exaggerate the importance of the unconscionability doctrine to federal arbitration law. In the last three decades, as the U.S. Supreme Court has expanded the scope of the Federal Arbitration Act (FAA), arbitration clauses have become a routine part of consumer, franchise, and employment contracts. Some companies have sought not just to funnel cases away from courts, but to tilt the scales of justice in their favor: stripping remedies, slashing discovery, selecting biased arbitrators, eliminating the right to bring a class action, and saddling adherents with prohibitive costs and fees. The unconscionability doctrine has emerged as the primary check on drafter overreaching. The Court has repeatedly acknowledged that lower courts can invoke unconscionability to invalidate one-sided arbitration provisions, and dozens (perhaps hundreds) of judges have done exactly that.
Striking a Balance between Investor Protections and National Sovereignty: The Relevance of Local Remedies in Investment Treaty Arbitration
Columbia Journal of Transnational Law, Vol. 49, No. 2, 2011
George K. Foster
Abstract:
Investment treaty arbitration is a relatively recent innovation designed to allow foreign investors to bring claims against host States without having to seek redress in the host State’s own courts. Yet a trend has emerged that some have characterized as inconsistent with this purpose: several tribunals have rejected treaty claims based on their impression that the claimants had not adequately pursued local remedies prior to initiating arbitration. Moreover, some of these tribunals have suggested that if an investor does pursue local remedies, it may be effectively prevented from later rearguing issues addressed by national courts. The combined effect of these holdings is to place investors in a Catch-22, encouraging them to pursue local remedies, while warning them that doing so may foreclose success at the international level. This Article highlights the tension between these distinct aspects of this line of authority and evaluates each by reference to treaty language, principles of international law, domestic analogs under U.S. constitutional law and policy considerations. This analysis reveals that there is a sound basis for treating local remedies as relevant to the merits of certain treaty claims, but that tribunals should give more limited deference to national court decisions. The modified approach outlined in this Article promises to strike a better balance between investor protections and national sovereignty, and thereby promote the long-term viability of investment treaty arbitration.
The Shifting Tide of ESI Discovery Cost Allocation
Securities Arbitration, Forthcoming
Edward Pekarek
Abstract:
Regardless of the means by which data travels, or the media on which it is stored, it is now, without question, “black letter law that computerized data is discoverable if relevant.” New York law, however, is anything but well settled with regard to ESIdiscoverycostallocation. Neither the New York Court of Appeals, nor the state’s Civil Practice Law and Rules (CPLR), have yet to address the issue of ESIdiscovery costs, while a fissure between the approaches employed by judges in the New York state court system continues to grow. Federal district courts routinely resolve ESIdiscoverycostallocation issues equitably, and while minor differences exist in a handful of judicial districts, the Federal Rules of Civil Procedure were amended in 2006 to adopt the essence of the analytical framework established by somewhat celebrated Southern District of New York jurists.
The recent trend in New York state courts reveals a decisive move away from the supposed “general rule,” conjured mainly from one deeply flawed trial court decision, toward harmonization with the vastly more elegant federal jurisprudence of permissive cost-shifting for inaccessible ESI. This trend has been ratified locally by amended rules within the Supreme Court Commercial Division, and by a comprehensive manual prepared and proposed by the New York City Bar Association. On a national level, there has been a wave of amendments, including key changes in 2006 to the Federal Rules of Civil Procedure; proposals offered by the Federal Judicial Center, a consortium of state court Chief Justices, and the American Bar Association. In addition, there has been development recently of uniform ESIdiscovery rules by the same organization that created the Uniform Commercial Code; as well as principles and best practices advanced by the Sedona Conference.
Recent guidance by the Financial Industry Regulatory Authority (FINRA) has also embraced the ESI discovery logic utilized in this federal judicial district, recognizing the leading case in this line of jurisprudence as “a standard of necessary steps that must be taken to preserve and produce electronic data.” While some states continue to employ the antiquated and inequitable “requester pays” approach, there can be little debate that the increasingly rapid pace of technological advancement demands regular refinement of e-discovery law. Permissive case-by-case cost-shifting of inaccessible ESI, through a multi-factor analysis, is the appropriate standard for resolving discovery production cost disputes. This is especially true in securities arbitration, where economic and informational disparities between disputants are often substantial, sometimes to the point of debilitating a genuine search for the truth, and at times, a disputant’s life savings may hang in the balance. As Judge Scheindlin rightly recognized in Zubulake I, “discovery that would be too expensive for one [party] to bear would be a drop in the bucket for another.”
Arbitration Case Law Update 2011
Jill Gross and Christopher Bloch
Abstract:
This paper summarizes and describes important arbitration law cases decided by the Supreme Court and lower courts during the past year, and analyzes their impact on securities arbitration practice.
The Power of ICSID Tribunals to Dismiss Proceedings Summarily: An Analysis of Rule 41(5) of the ICSID Arbitration Rules
Law and Practice of International Courts and Tribunals, Vol. 10, 2011, Sydney Law School Research Paper No. 11/33
Chester W . Brown and Sergio Puig
Abstract:
Rule 41(5) of the ICSID Arbitration Rules essentially provides that an ICSID tribunal may dismiss a proceeding summarily if the respondent files an objection within 30 days of the constitution of the tribunal that the claim is “manifestly without legal merit”. In the five years since the introduction of the Rule in April 2006, four ICSID tribunals have considered the provision, with two decisions being handed down in December 2010. In this article, the authors describe the cases decided by these tribunals, and examine the way in which they have interpreted and applied Rule 41(5). The authors’ analysis highlights the large measure of consistency in the way that ICSID tribunals are handling objections under this provision, and sets out a useful and timely guide to counsel and arbitrators on the use of this procedure.
NAFTA Chapter Eleven at Fifteen: Contributions to a Systemic Approach in Investment Arbitration
ICSID Review - Foreign Investment Law Journal, Vol. 25, No. 2, p. 225, 2010
Sergio Puig and Meg N. Kinnear
Abstract:
This article discusses the development and main contributions of NAFTA to international investment law in the last fifteen years. After analyzing the context of the negotiations, the article examines the contributions of NAFTA to the substantive law applicable to foreign investors. The paper follows with a discussion of the procedural aspects that make NAFTA Chapter Eleven unique, and that may have particularly contributed to a systemic approach to investment disputes. It is suggested that these procedural features have helped maintain a degree of substantive coherence in NAFTA and that the NAFTA experience has influenced other treaty systems by making legal reasoning publicly and widely available. The paper concludes with a brief discussion of what might be expected in the coming years in the NAFTA context and how these developments might permeate the law applicable to investment disputes.
Book Review: Mediation in England and Wales
Rhys Clift
Abstract:
By Sir Henry Brooke, Chairman of the Civil Mediation Council:
Rhys Clift qualified as a mediator in 1998, and he has now built up a formidable reputation in the mediation marketplace. His present book....is a ‘must read’ for anyone who has heard about mediation but has not yet taken the plunge – and for fairly advanced swimmers as well.
It is no longer open to the litigator to know nothing about mediation. His or her clients deserve a modern dispute resolution service, and such a service must include expert knowledge of the different methods of dispute resolution now available to parties in conflict. This book provides answers to the obvious questions: How is mediation different from litigation or arbitration? How should one prepare for a mediation? What happens at a mediation? What are the strengths and weaknesses of the process? What are the tell-tale signs that a mediation may be more productive than a bipartite settlement meeting?
Many mediators are puzzled that such an excellent way of bringing about an agreed closure has been so slow to catch on. Every experienced mediator has witnessed the relief and pleasure on parties’ faces when a hard day of facilitated negotiation ends in a signed agreement. The author explains how often good new ideas start by being ignored, may then be treated with hostility or derision, and finally form part of mainstream thinking.
April 2011 saw the implementation of the EU Mediation Directive. It saw the publication of a Ministry of Justice Consultation Paper containing a very marked emphasis on the importance of mediation. It is seeing other departments urging parties everywhere to seek consensual solutions, rather than go down the slow, expensive path towards an imposed solution. In such a context the publication of this excellent short book is very timely
Environmental Concerns in International Investment Agreements: A Survey
Kathryn Gordon and Joachim Pohl
Abstract:
International investment agreements define State commitments on investment protection, but also shed light on how these commitments are to be integrated with other public policy objectives. Investment protection in the context of environmental regulation has been a frequent source of controversy and investor-state disputes. In order to enhance the factual basis for debate in this policy area, the present survey establishes a statistical portrait of governments’ investment treaty writing practices in relation to environmental concerns in a sample of 1,623 IIAs, roughly half of the global investment treaty population. The survey provides a statistical portrait of the extent, kind and frequency of treaty language referring to environmental concerns and the evolution of the use of such language over time. It shows that: i) over time, more treaties contain such language; ii) only about 8% of the sample treaties include references to environmental concerns; and iii) there are wide variations in the content of such language, both across countries and across time.
Investment Arbitration as the ‘New Frontier'
The Arbitrator and Mediator, Vol. 28, No. 1, pp. 59-69, 2009, Sydney Law School Research Paper No. 11/34
Chester W . Brown
Abstract:
Since the Argentine financial crisis of 2001-2002, bilateral investment treaties (“BITs”) have increasingly come under the spotlight as a means by which foreign investors can enforce their rights against the host State of their investment. These rights come in the form of various substantive standards of protection, such as the protection against expropriation, the right to fair and equitable treatment, full protection and security, national treatment, most-favoured nation treatment, and importantly, the right to bring a claim in international arbitration against the host State in the event that the investor considers that the State has breached its international obligations. This article considers the case of Argentina (which has faced over 40 claims under BITs in the last decade), and provides a concise review of the substantive and procedural protections available to investors under these international instruments. The article then considers some challenges faced by the regime for investment treaty arbitration, such as the problem of inconsistent decisions, multiple proceedings, and the perceived lack of transparency.
Arbitration of Investment Disputes under Iranian Investment Treaties
Journal of Money Laundering Control (JMLC), Vol. 14, No. 2, pp. 130-157, 2011
ArdeshirAtai
Abstract:
In 2010, the international community including the United Nations, European Union and United States imposed a series of economic and financial sanctions on the Iranian government for its controversial nuclear programme by restricting investments by multinational companies in the Iranian oil and gas resources. In summer of 2010, major oil companies began pulling out of the South Pars block which is the world's second biggest gas field situated in the Persian Gulf. It is expected that more companies will abandon their investment projects for fear of sanctions by the US treasury which targets both US and non-US companies with investments and economic interests in the Iranian petroleum industry. The exiting firms may experience problems in transferring their capital and machinery out of the Iranian jurisdiction and may suffer damages as a result of unfair and discriminatory treatment by the authorities including customs officials, banks, oil ministry, OIETAI and other public bodies. The only remedy available to the foreign investor is to claim compensation for interference or expropriation of its property rights in investment by bringing an arbitration proceedings against the Iranian government and/or state agencies. Iran is party to more than 50 BITs with capital exporting and developing countries which guarantee access to international arbitration pursuant to arbitration rules of ICSID, ICC and UNCITRAL. This article exemplifies the dispute resolution provision contained in Iranian BITs including consent to arbitration, jurisdiction of arbitral tribunal, arbitration procedures, applicable substantive law, location of arbitration and enforcement of arbitral award. The purpose of this article is to provide investors involved in disputes over investments with the Iranian government with the remedy to pursue their compensation claims in a "neutral, impartial and third party forum" which is based outside of the Iranian jurisidiction.
Beyond Adjudication: Resolving International Resource Disputes in an Era of Climate Change
Stanford Environmental Law Journal, Vol. 30, No. 2, 2011
Anna Spain
Abstract:
This Article examines the role of international adjudication as a mechanism for resolving international disputes and promoting global peace and security in an era of climate change. The central claim is that adjudication has limitations that make it ineffective as a tool for resolving international resource disputes. The Article argues that adjudication is limited due to source and process challenges and it illustrates this claim by reviewing cases adjudicated by the International Court of Justice, the Permanent Court of Arbitration and other international courts and tribunals. Four categories of adjudication limitation emerge: a) cases where the parties refused to submit to adjudication, b) cases where the judicial decision did not address the merits of the dispute, c) cases of noncompliance and d) cases where there was a recurrence of the dispute or conflict. In response, the Article suggests that reliance on adjudication as the primary form of international dispute resolution in this context is misplaced. Instead, the Article argues that adjudication may be more effective when combined with non-judicial dispute resolution methods such as mediation and facilitation. Three case studies illustrate how the integration of dispute resolution approaches has successfully resolved international resource disputes and the conflicts they were a part of. By establishing a clear descriptive account of the limitations of adjudication in this context, this Article seeks to move international dispute resolution beyond its traditional paradigm in order to advance global capacity to resolve disputes and prevent conflict in an era of climate change.
Non-State Actors in International Investment Law: The Legal Personality of Corporations and NGOs in the Context of Investor-State Arbitration
PARTICIPANTS IN THE INTERNATIONAL LEGAL SYSTEM: MULTIPLE PERSPECTIVES ON NON-STATE ACTORS IN INTERNATIONAL LAW, Jean D'Aspremont, ed., pp. 360-371, Routledge-Cavendish, 2011
Patrick Dumberry and Erik Labelle-Eastaugh
Abstract:
This article examines the old controversial question of the legal status of corporations under international law in light of new developments in the field of international investment law. It argues that corporations may be considered as subjects of international law in the context of bilateral investment treaties (BITs) and State contracts. This is because they hold rights under these legal instruments and are given the possibility to commence a direct claim against a State before an international tribunal. This international legal personality is, however, limited, derivative and passive.
This article will also examine the even more recent trend of participation by public interest groups, such as non-governmental organizations (“NGOs”), in investor-State arbitration. Such groups are increasingly being granted amicus curiae status in these proceedings. While these groups are sometimes given a limited participative role in arbitral proceedings, we will argue that they are not subjects of international law.
Introducing International Commercial Arbitration and Its Lawlessness, by Way of the Dissenting Opinion
Contemporary Asia Arbitration Journal, Vol. 4, No. 1, pp. 19-35, May 2011
Ilhyung Lee
Abstract:
The arbitration method of dispute resolution is similar to, and also differs from, adjudication and judgment in the courts. Practitioners more acquainted with resolution of commercial disputes in the judiciary will find some aspects of arbitration to be troubling, or worse. In addition, some commentators have described arbitration, especially that involving international commercial disputes, to be (quite bluntly) lawless. This article discusses (i) the salient differences between the arbitration and court adjudication methods and (ii) those features of arbitration characterized as lawless-through the vehicle of the dissenting opinion. Seen most frequently in the decisions of appellate courts in common law jurisdictions, the dissenting opinion provides for an opportunity to highlight the differences between the two methods of dispute resolution. The separate dissenting opinion is seen less often in most civil law systems, and arbitrators from those jurisdictions as a group disapprove of such opinions in arbitral tribunal decisions. Such disapproval may be seen by others (usually from the common law setting) as one example of the lawlessness in international commercial arbitration.
Judicially Assisted Third Party Discovery in Aid of Foreign International Commercial Arbitrations Under the Evidence Act 2006
LLB (HONS) Research Paper, LAWS 525: International Commercial Contracts
James Gilbert
Abstract:
International arbitration continues to grow in popularity as an alternative to litigation as entities engaged in international commerce seek to take advantage of the flexibility, autonomy, efficiency and cost-effectiveness that it offers. However a significant gap exists in international arbitration law in that parties to international arbitrations cannot obtain discovery of documents from third parties located outside the judicial jurisdiction of the arbitral seat. This has created a divergence of opinion between District Courts in the United States, a slim majority of whom have considered themselves able to assist foreign international arbitrations with discovery under § 1782 of Title 29 of the United States Code, despite the fact that this provision is unsuited to the narrow limits of discovery as it is understood in international arbitration. This paper argues that New Zealand’s international judicial assistance legislation is much more in tune with international arbitration, and therefore that New Zealand’s courts are well placed to follow the example of the majority of United States courts by interpreting the legislation in a way which allows them to assist international arbitrations as well as international court proceedings.
Le Droit International Privé des Procédures Collectives en France (International Private Law and Corporate Insolvency in France)
InDret, Vol. 2, 2011
Jean-Marc Talau
Abstract:
Most of French international private law is not codified, except for private law regarding family matters, that is included in the French Civil Code. The French Corporate Insolvency Act (nowadays a part of the Code of Commerce: Art. L. 600-1ff), and the following law reform acts of 7/26/2005 and of 12/18/2008 (together with the decree of 2/12/2009) do not provide for any kind of international private law rules. Case law has managed to fill this gap and provide for the rules on this subject. This judge-made-law remains enforceable whenever parties involved in the litigation and the issues involved in the judgments don’t fall within the scope of the European Regulation No. 1346/2000 or the international bilateral treaties which often are applicable to winding up processes. French Courts have established a pragmatic corpus of rules, of a mixed nature between the universal theory and the territorial theory, similar to the pragmatism found in international arbitration. As a general rule, Courts extend the local territorial rules of jurisdiction into the international framework. French Tribunals of commerce have jurisdiction over companies ‘incorporated’ or established in France (including leasing) while recognition and enforcement of foreign sentences are subject to common rules. Since 5/31/2002, the European Regulation might be a challenge, within its scope, for the extensive French Courts’ jurisdiction over international corporate insolvency, and questions are arising, even before the Court of Justice of the European Union. In any case, French Justices keep enforcing the European Regulation in a pragmatic way.
Seals, Stamps, and Signatures in International Arbitration Agreements
Contemporary Asia Arbitration Journal, Vol. 4, No. 1, pp. 37-55, May 2011
Stephan Wilske and Christina Scheidle
Abstract:
This paper deals with a question which came up in a recent Korean Commercial Arbitration Board arbitration, namely whether and to what extent a Korean company seal and a German company stamp may fulfill the signature requirements under the parties’ contractual agreement and the applicable arbitration law. In this context the paper discusses the purpose of signatures from a Western and an Asian perspective and the writing and signature requirement as a prerequisite for formal validity of an arbitration agreement under international and national arbitration law. What the authors consider most remarkable about this case is the phenomenon of cultural preconceptions as a source of possible errors and misunderstandings. The article concludes that even in an era of increasing harmonization of international arbitration law and practice, arbitration users and practitioners should be vigilant and always prepared to question whether an issue that might be simple and obvious in their own mind might be viewed completely differently by someone with different cultural experiences.
The Changing Role of Evaluation in Commercial ADR
Dispute Resolution Magazine, Vol. 14, p. 16, Fall 2007
Dwight Golann
Abstract:
This piece describes how processes of non-binding dispute resolution in civil cases changed over the past twenty-five years from heavy reliance on court-like evaluative processes such as advisory arbitration and mini-trials, and toward much greater use of facilitative mediation. The article argues that commercial mediation has evolved into a mixed form of facilitation and evaluation, and that in current practice “evaluation” consists of a spectrum of mediator interventions, ranging from “reality testing” questions to hard, global opinions about case value. The content of evaluations has also changed; they are no longer limited to the legal merits and more often consist of the neutral’s assessment of party attitudes and the bargaining situation.
A Psychological Perspective on the Facilitation of Settlement in International Arbitration - Examining the CEDR Rules
Journal of International Dispute Settlement, Forthcoming
Sophie Nappert and Dieter Flader
This article explores the still-controversial role of arbitrators in settlement facilitation and whether the professional guidelines put forward supposedly to assist arbitrators in this role take into account the psychological factors at play. Do “best practice” guidelines address the “right” factors? Particular attention will be had for these explorations to the Rules of the Centre for Effective Dispute Resolution (CEDR) for the Facilitation of Settlement in International Arbitration.
We identify that the Rules and Recommendations, whilst they provide a number of discrete pointers, leave unaddressed significant areas of the process of settlement facilitation, on which they provide no guidance. We refer to these areas as ‘gaps’ in the Rules. We observe that these gaps pertain chiefly to the tribunal’s own readiness in approaching and taking control of the settlement facilitation process, both in terms of mindset and techniques.
We further observe that the gaps may be an inevitable consequence of (i) the current lack of meaningful insight into the psychological triggers applicable to arbitration; and (ii) the way in which the Rules and Recommendations were devised – namely by a group of arbitration practitioners.
Points on which the Rules are silent include:
(a) The timing and trigger of the settlement facilitation process;
(b) The consensus-building exercise carried out by the tribunal about the very decision to facilitate settlement;
(c) The authority of the arbitral tribunal;
(d) The allocation of roles between the arbitrators inter se in the settlement process.
Assessment of the New UNCITRAL Arbitration Rules of 2010
Law Comments by RimantasDaujotas
RimantasDaujotas
Abstract:
UNCITRAL Arbitration rules of 2010 made arbitration provisions up to date with the modern practice of international commercial arbitration. 2010 Rules have reflected new developments and change in the international commercial arbitration since the adoption of the UNCITRAL Arbitration Rules of 1967. However, in order to keep the rules short, efficient and attractive to the business community, it was impossible to deal with all the issues which could arise and cause problems in the arbitral proceedings. Furthermore, it can be argued that in order to retain popularity of the UNCITRAL arbitration rules, they should be revised more frequently. This article will focus on the main changes made in the rules of 2010 and compare it with it’s older edition of 1967.
[It is not UNCITRAL Arbitration Rules 1967. It is UNCITRAL Arbitration Rules 1976]
Negotiation in the Presence of the Arbitrator: How Anticipated Arbitration Can Facilitate Cooperation and Integrative Offers
IACM 24th Annual Conference Paper
Benjamin öhneand Roman Trötschel
Abstract:
The present study explores the impact of an anticipated arbitration through a third-party in an integrative negotiation task. It was predicted that the mere anticipation of third-party intervention by an arbitrator would suffice to facilitate cooperation between the parties and lead to more integrative offers. The findings of the present research revealed that being confronted with a looming arbitration at the end of the negotiation, parties acted more cooperative and substantially made more concessions compared to parties not anticipating arbitration. In line with our predictions, this beneficial effect of a looming arbitration emerged right from the start of the negotiation. The findings are discussed with respect to the role of the anticipated loss of decisional control of negotiators faced with an arbitrator.
Regularity Through Reason: A Foundation of Virtue for International Arbitration
Contemporary Asia Arbitration Journal, Vol. 4, No. 1, pp. 57-94, May 2011
James D. Fry
Abstract:
This Article has two purposes. First, this Article explores the ambiguity of the term “precedent” and its associated principle “stare decisis” in the context of international arbitration to better understand the potential source of confusion over precedent’s role in international arbitration, and continues on to a detailed analysis of the many international arbitral decisions that grapple with the role of precedent in reaching a conclusion. With a clear understanding of the magnitude of the confusion over the role of precedent in international arbitration, the stage is set for the next part of the Article to introduce consistency of reasoning and other underlying principles as an alternative paradigm to precedent, as well as some of the risks involved with a focus on consistency. Such a paradigm shift is similar to that proposed by Sir Edward Coke in the early 17th century, which added considerable unity to the common-law system by placing consistency of reasoning at the heart of the common-law system, as opposed to precedent, which often had led to fragmentation in the past. By focusing on consistency through reason, the international arbitration regime will be a healthier system in terms of rendering reliable decisions.
Interaction of Different Laws and Rules in International Commercial Arbitration
Law Comments by RimantasDaujotas
RimantasDaujotas
Abstract:
One of the main advantages of arbitration is that it can be a ground for dispute resolution which requires interaction of various different laws and rules. Parties can freely decide what laws or rules should govern their dispute settlement mechanism and what procedure to follow in the event of disagreement about their contractual obligations. In order to understand and take the most of international arbitration, main applicable laws and rules should be identified. However, there are also restrictions to party autonomy principle and the law of the seat of arbitration has a major influence to international arbitration procedure.
A Framework to Apply the Article III Case or Controversy Requirement to Motions to Confirm or Vacate Arbitral Awards Pursuant to the Federal Arbitration Act
University of Toledo Law Review, Vol. 42, No. 1, 2010
Aaron Edward Franklin
Abstract:
This paper identifies some uncertainty in how the Article III case or controversy requirement applies to motions to confirm or vacate an arbitral award under the Federal Arbitration Act. It argues that the case or controversy requirement applies to the dispute presented by the motion to confirm/vacate an award, rather than the dispute that necessitated the underlying arbitration. It further argues that existence of an unconfirmed or unvacated arbitral award itself never supports a determination that a case or controversy exists.
Class and Collective Relief in the Cross-Border Context: A Possible Role for the Permanent Court of Arbitration
Hague Yearbook of International Law, Vol. 23, 2010, University of Missouri School of Law Legal Studies Research Paper No. 2011-16
S.I. Strong
Abstract:
Collective redress of mass legal injuries is a topic of concern in numerous countries around the world, with cross-border disputes giving rise to particular problems due to actual and perceived clashes of law, policy and practice. This article considers whether arbitration might be preferable to litigation as a means of resolving large-scale international disputes. After considering how each procedure handles issues involving jurisdiction, conflict of laws, procedure and enforcement, the article concludes that class and collective arbitration may be in many ways superior to similar actions in court. The article ends with a discussion of the role that the Permanent Court of Arbitration might play in the development of this area of law.
Facilitating Settlement at the Arbitration Table: An Empirical Examination of Views on Settlement Practice Among Arbitration Practitioners in East Asia and the West
Shahla F. Ali
Abstract:
This paper presents an empirical examination of how international arbitrators in East Asian and Western countries view the goal of settlement in international arbitration. The result of a 115 person survey and 64 follow-up interviews shed light on the underlying cultural attitudes and approaches to settlement in international arbitration as practiced in diverse regions. To date, most research on international arbitration has focused exclusively on Western models of arbitration as practiced in Europe and North America. While such studies accurately reflected the geographic foci of international arbitration practice in the mid-20th century, in recent years, the number of international arbitrations conducted in East Asia has grown steadily and on par with growth in Western regions. The findings indicate that arbitration practitioner’s perceptions of the importance of information sharing in encouraging settlement as well as the simultaneous attention of both parties to the dispute demonstrate a high degree of convergence across regions. At the same time, regional and socio-economic distinctions are reflected in varying arbitrator perceptions regarding the arbitrators’ role in settlement, whether settlement is regarded as a goal in arbitration and the types of efforts made pre-arbitration to settle disputes. In particular, arbitrators working in the East Asian region regard the goal of facilitating voluntary settlement in the context of arbitration with greater importance and generally make greater efforts pre-arbitration to settle disputes as compared with counterparts in the West.
Factors to Consider Before Arbitrating in the Arab Middle East: Religious and Legislative Constraints
Journal of International Commercial Law, Vol. 3, p. 1, 2011
Radwa S. Elsaman
Abstract:
This article discusses two significant factors affecting arbitration in the Arab Middle East: the effect of religion on arbitration and the effect of legislative constraints on arbitration. By presenting foreign investors and practitioners with an overview of some of the unique social, legal and religious issues distinctive to arbitration in the Arab Middle East, this article will provide foreign investors and practitioners with examples of factors to consider that can affect arbitration decisions in the Middle East.
Settlement of Disputes Under the United Nations Convention on the Law of the Sea 1982, with Detailed Study of the Process of Arbitration
Radwa S. Elsaman
Abstract:
The law of the sea’s importance is reflected in the wealth of treaty law, customary international law, and judicial decisions in this area. The most important convention in this regard is the United Nations Convention on the Law of the Sea 1982 (UNCLOS 82). In response to the increase in law of the sea disputes and the greater need for an independent system to govern those disputes, a dedicated Chapter with complementing annexes was introduced in the UNCLOS 82 with special features setting up the compulsory procedures for settlement of disputes. The UNCLOS 82 stands as the most recent treaty incorporating compulsory procedures, not just optional rules to be applied subject to the will of the parties. This paper defines the different kinds of maritime disputes distinguishing them from conflicts. It then illustrates the rules governing the settlement of disputes under public international law, emphasizing that these mechanism are the most important development in the settlement of international disputes since the adoption of the United Nations Charter and the Statue of the International Court of Justice. It also presents in detail the disputes settlement mechanisms of the UNCLOS 82, with particular attention to the UNCLOS 82 arbitration system as a method of disputes resolutions.
The Enigma of Enforceability of Investment Treaty Arbitration Awards in India
Asian Journal of Comparative Law, Vol. 6, Issue 1, January 2011
Prabhash Ranjan
Abstract:
This paper critically discusses the issue of enforceability of investment treaty arbitration (ITA) awards against India under the Indian domestic law on arbitration. In this regard, the paper discusses the relevant provisions of the Indian arbitration law and its interpretations by the Indian judiciary to understand their ramifications for the enforcement of ITA awards against India. The paper also discusses the proposed amendments to the Indian arbitration law and its ramifications on ITA. The issue of enforcement of ITA awards in India has become important due to India’s gigantic international investment treaty program where each treaty allows for investor-state treaty arbitration to settle disputes between investors and India. This issue has also become important in light of the growing observation that enforcement of foreign commercial arbitral awards in India is extremely difficult especially after the Venture Global engineering case. Thus, India is endeavoring to change the arbitration law so as to alter this perception. This paper argues that in spite of these proposed changes; enforcement of ITA awards may still face problems. Thus, the paper suggests that India should address the issue of enforceability of ITA awards given its gigantic investment treaty program aimed at attracting foreign investment.
The Impact of Labor Unions on Worker Rights and on Other Social Movements
ABA Journal of Labor and Employment Law, Vol. 26, 2011
Charles B. Craver
Abstract:
Labor unions have been in existence for over two hundred years, initially as craft organizations, and more recently as industrial and service organizations. During their existence they have significantly enhanced the wages and fringe benefits of represented workers through the collective bargaining process, and indirectly affected the wages and benefits enjoyed by nonunion employees whose employers provided them with such benefits to preclude their unionization. Unions have also provided members with job security through just cause disciplinary limitations and grievance-arbitration procedures. Over the past sixty years, many social movements have employed union tactics to advance other critical issues such as the end of the Vietnam Conflict, the end of racial segregation, the enhancement of the environment, and the rights of tenants.
The Myth and Reality of 'Shari’A Courts' in Canada: A Delayed Opportunity for the Indigenization of Islamic Legal Rulings
Faisal Kutty
Abstract:
The Ontario government’s passage of the Family Statute Law Amendment Act, 2005 ostensibly precluding the enforcement of faith-based decisions issued by arbitration panels pursuant to the Arbitrations Act, 1991, in the area of family law, brought to the fore a debate that has been raging in liberal democracies for some time.
Those opposed to allowing the use of religious principles in resolving family disputes using the Arbitrations Act, 1991, raised some legitimate concerns about gender rights within religious communities. They also questioned the role of religion in secular society and opposed what they saw as privatization of the legal system. Opponents contended that religious groups should be able to govern their lives according to their conscience within the parameters of law if the constitutional right to freedom of religion and association is to have any real value. Consenting and informed adults, they argued, must be able to make religious choices even if others do not believe these are “correct” choices.
The issues, of course, transcend dispute resolution and tug at fundamental tensions surrounding multiculturalism and national identity, the limits of accommodation and legal pluralism within a liberal democracy and the separation of church and state. I argue that Ontario lost a timely opportunity to devise a way to balance these competing rights and interests in a manner that respects all parties and protects the vulnerable.
The controversy was a prime case to examine whether Islamic law and liberal democracy can co-exist within a liberal constitutional framework. Moreover, I also argue that Ontario also delayed an opportunity to indigenize or Canadianize Islamic law rulings in a manner that would help in the integration process of its Muslim citizens.
Texas International Law Journal, Vol. 46, No. 2, 2011
Julio C. Colon
Abstract:
The past decade has seen the rapid growth of Islamic finance on both international and domestic levels. Accompanying that growth is a rise in the number of disputes that implicate Islamic law. This remains true even when the primary law of the contract is that of a common law or civil law country. If judges and lawmakers do not understand the reasoning of Islamic finance professionals in incorporating Shariah law, the result could be precedents and codes that hamper the growth of a multi-trillion dollar industry. This note compares the reasoning of the English court in Shamil Bank v. Beximco Pharmaceuticals to the practice of forums specializing in Islamic finance dispute resolution. The note then addresses other perceived difficulties in applying Islamic law in common law and civil law courts. The practice of Islamic finance alternative dispute resolution (ADR) forums shows a consistent reliance on the use of national laws coupled with Shariah. Also, there are cases showing that U.S. courts and European arbitrators are willing to use Islamic law. Research indicates that the decision in Shamil Bank v. Beximco Pharmaceuticals was not consistent with the intentions of the parties or the commercial goals of Islamic finance. Finally, this note concludes that it is not unreasonable for a Western court to judge a case if the dispute arises out of an Islamic finance agreement.
The Rise and Possible Fall of Investor-State Arbitration in Asia: A Skeptic’s View of Australia’s ‘Gillard Government Trade Policy Statement’
Sydney Law School Research Paper No. 11/32
Luke R. Nottage
Abstract:
Treaty-based investor-state arbitration (ISA) has gradually become a more established part of the legal landscape in the Asian region. But this development is threatened by the “Gillard Government Trade Policy Statement” announced in April 2011. One interpretation is that the Australian government will no longer include ISA protections in future investment treaties or Free Trade Agreements (FTAs) even with developing countries – effectively eschewing treaty-based ISA altogether. Another interpretation is that the government may henceforth include ISA provisions on a case-by-case basis, but not if that would provide greater procedural or substantive rights against the government to foreign investors compared to local investors in Australia.
Part I of this paper outlines the complex and potentially far-reaching implications of even the latter policy stance. Part II revisits some of the economic theory and evidence underlying the related recommendation of Australia’s Productivity Commission, announced in 2010 as part of its review of FTA and investment treaty policy, including some more recent case studies involving investment both in and out of Australia. Part III outlines some less radical ways for Australia – and other countries in the Asia-Pacific region – to rebalance private and public interests in the ISA system. However, Part IV outlines how Australia’s recent experience suggests more generally that nowadays there may be surprisingly few constituencies prepared to come out strongly in favour of refining the present-based ISA system in those ways. Within many states, there are probably more public and private interest groups now wishing to see it more drastically curtailed – along the lines recently announced by the Australian government or, indeed, even more restrictively. Part V concludes that many other states in Asia already or potentially negotiating treaties with Australia – including Japan and China – are also unlikely to achieve a relaxation of the policy stance. The treaty-based ISA system may well therefore end up declining significantly in the region, especially over the medium- to longer term.
The Status of Religious Arbitration in the United States and Canada
Santa Clara Law Review, Forthcoming
Nicholas Walter
Abstract:
This paper discusses, and challenges, the status of religious arbitration in the United States and Canada. Religious arbitration - defined as the settling of disputes through the intermediation of religious authorities, rather than having recourse to the courts - has been written about considerably in recent years. All writers to date have considered ways in which rights guaranteed by secular courts can be maintained before religious tribunals. This paper is the first to consider the problem caused by religious tribunals for the rights of free exercise of religion for those using religious tribunals. It argues that the enforcement of awards made by religious tribunals, and agreements to arbitrate before religious tribunals, by secular courts is an unconstitutional infringement of parties’ rights of free exercise of religion in both the United States and Canada. This is true even though the United States Supreme Court and the Canadian Supreme Court have different jurisprudence on freedom of religion. Although the United States and Canada may still encourage parties to mediate their disputes through religious means, statutes should be enacted in both countries providing that no party may enter a contract to enter a binding arbitration process based on religious principles. Furthermore, the discussion in the paper has implications for debates about the status of religious tribunals in other countries, such as the United Kingdom.
Combating Climate Change through Investment Arbitration
Fordham International Law Journal, Vol. 35, 2011
Anatole Boute
Abstract:
In addition to the general non-commercial risks that may affect any foreign direct investment, low-carbon investments face specific risks related to the mechanisms of public support that states develop to enable the financial viability of such projects. In the absence of the full internalization of the carbon externality, a perception amongst investors that states might renege on promises of support once investments are made seriously affects the credibility and thus effectiveness of climate policies. By limiting this risk, investment arbitration, which has often been accused of constituting a threat to climate change mitigation efforts, could in fact reinforce climate policies.
Unconscionability Wars
Northwestern University Law Review Colloquy, Vol. 106, 2011, Loyola-LA Legal Studies Paper No. 2011-19
David Horton
Abstract:
It would be hard to exaggerate the importance of the unconscionability doctrine to federal arbitration law. In the last three decades, as the U.S. Supreme Court has expanded the scope of the Federal Arbitration Act (FAA), arbitration clauses have become a routine part of consumer, franchise, and employment contracts. Some companies have sought not just to funnel cases away from courts, but to tilt the scales of justice in their favor: stripping remedies, slashing discovery, selecting biased arbitrators, eliminating the right to bring a class action, and saddling adherents with prohibitive costs and fees. The unconscionability doctrine has emerged as the primary check on drafter overreaching. The Court has repeatedly acknowledged that lower courts can invoke unconscionability to invalidate one-sided arbitration provisions, and dozens (perhaps hundreds) of judges have done exactly that.
Striking a Balance between Investor Protections and National Sovereignty: The Relevance of Local Remedies in Investment Treaty Arbitration
Columbia Journal of Transnational Law, Vol. 49, No. 2, 2011
George K. Foster
Abstract:
Investment treaty arbitration is a relatively recent innovation designed to allow foreign investors to bring claims against host States without having to seek redress in the host State’s own courts. Yet a trend has emerged that some have characterized as inconsistent with this purpose: several tribunals have rejected treaty claims based on their impression that the claimants had not adequately pursued local remedies prior to initiating arbitration. Moreover, some of these tribunals have suggested that if an investor does pursue local remedies, it may be effectively prevented from later rearguing issues addressed by national courts. The combined effect of these holdings is to place investors in a Catch-22, encouraging them to pursue local remedies, while warning them that doing so may foreclose success at the international level. This Article highlights the tension between these distinct aspects of this line of authority and evaluates each by reference to treaty language, principles of international law, domestic analogs under U.S. constitutional law and policy considerations. This analysis reveals that there is a sound basis for treating local remedies as relevant to the merits of certain treaty claims, but that tribunals should give more limited deference to national court decisions. The modified approach outlined in this Article promises to strike a better balance between investor protections and national sovereignty, and thereby promote the long-term viability of investment treaty arbitration.
The Shifting Tide of ESI Discovery Cost Allocation
Securities Arbitration, Forthcoming
Edward Pekarek
Abstract:
Regardless of the means by which data travels, or the media on which it is stored, it is now, without question, “black letter law that computerized data is discoverable if relevant.” New York law, however, is anything but well settled with regard to ESIdiscoverycostallocation. Neither the New York Court of Appeals, nor the state’s Civil Practice Law and Rules (CPLR), have yet to address the issue of ESIdiscovery costs, while a fissure between the approaches employed by judges in the New York state court system continues to grow. Federal district courts routinely resolve ESIdiscoverycostallocation issues equitably, and while minor differences exist in a handful of judicial districts, the Federal Rules of Civil Procedure were amended in 2006 to adopt the essence of the analytical framework established by somewhat celebrated Southern District of New York jurists.
The recent trend in New York state courts reveals a decisive move away from the supposed “general rule,” conjured mainly from one deeply flawed trial court decision, toward harmonization with the vastly more elegant federal jurisprudence of permissive cost-shifting for inaccessible ESI. This trend has been ratified locally by amended rules within the Supreme Court Commercial Division, and by a comprehensive manual prepared and proposed by the New York City Bar Association. On a national level, there has been a wave of amendments, including key changes in 2006 to the Federal Rules of Civil Procedure; proposals offered by the Federal Judicial Center, a consortium of state court Chief Justices, and the American Bar Association. In addition, there has been development recently of uniform ESIdiscovery rules by the same organization that created the Uniform Commercial Code; as well as principles and best practices advanced by the Sedona Conference.
Recent guidance by the Financial Industry Regulatory Authority (FINRA) has also embraced the ESI discovery logic utilized in this federal judicial district, recognizing the leading case in this line of jurisprudence as “a standard of necessary steps that must be taken to preserve and produce electronic data.” While some states continue to employ the antiquated and inequitable “requester pays” approach, there can be little debate that the increasingly rapid pace of technological advancement demands regular refinement of e-discovery law. Permissive case-by-case cost-shifting of inaccessible ESI, through a multi-factor analysis, is the appropriate standard for resolving discovery production cost disputes. This is especially true in securities arbitration, where economic and informational disparities between disputants are often substantial, sometimes to the point of debilitating a genuine search for the truth, and at times, a disputant’s life savings may hang in the balance. As Judge Scheindlin rightly recognized in Zubulake I, “discovery that would be too expensive for one [party] to bear would be a drop in the bucket for another.”
Arbitration Case Law Update 2011
Jill Gross and Christopher Bloch
Abstract:
This paper summarizes and describes important arbitration law cases decided by the Supreme Court and lower courts during the past year, and analyzes their impact on securities arbitration practice.
The Power of ICSID Tribunals to Dismiss Proceedings Summarily: An Analysis of Rule 41(5) of the ICSID Arbitration Rules
Law and Practice of International Courts and Tribunals, Vol. 10, 2011, Sydney Law School Research Paper No. 11/33
Chester W . Brown and Sergio Puig
Abstract:
Rule 41(5) of the ICSID Arbitration Rules essentially provides that an ICSID tribunal may dismiss a proceeding summarily if the respondent files an objection within 30 days of the constitution of the tribunal that the claim is “manifestly without legal merit”. In the five years since the introduction of the Rule in April 2006, four ICSID tribunals have considered the provision, with two decisions being handed down in December 2010. In this article, the authors describe the cases decided by these tribunals, and examine the way in which they have interpreted and applied Rule 41(5). The authors’ analysis highlights the large measure of consistency in the way that ICSID tribunals are handling objections under this provision, and sets out a useful and timely guide to counsel and arbitrators on the use of this procedure.
NAFTA Chapter Eleven at Fifteen: Contributions to a Systemic Approach in Investment Arbitration
ICSID Review - Foreign Investment Law Journal, Vol. 25, No. 2, p. 225, 2010
Sergio Puig and Meg N. Kinnear
Abstract:
This article discusses the development and main contributions of NAFTA to international investment law in the last fifteen years. After analyzing the context of the negotiations, the article examines the contributions of NAFTA to the substantive law applicable to foreign investors. The paper follows with a discussion of the procedural aspects that make NAFTA Chapter Eleven unique, and that may have particularly contributed to a systemic approach to investment disputes. It is suggested that these procedural features have helped maintain a degree of substantive coherence in NAFTA and that the NAFTA experience has influenced other treaty systems by making legal reasoning publicly and widely available. The paper concludes with a brief discussion of what might be expected in the coming years in the NAFTA context and how these developments might permeate the law applicable to investment disputes.
Book Review: Mediation in England and Wales
Rhys Clift
Abstract:
By Sir Henry Brooke, Chairman of the Civil Mediation Council:
Rhys Clift qualified as a mediator in 1998, and he has now built up a formidable reputation in the mediation marketplace. His present book....is a ‘must read’ for anyone who has heard about mediation but has not yet taken the plunge – and for fairly advanced swimmers as well.
It is no longer open to the litigator to know nothing about mediation. His or her clients deserve a modern dispute resolution service, and such a service must include expert knowledge of the different methods of dispute resolution now available to parties in conflict. This book provides answers to the obvious questions: How is mediation different from litigation or arbitration? How should one prepare for a mediation? What happens at a mediation? What are the strengths and weaknesses of the process? What are the tell-tale signs that a mediation may be more productive than a bipartite settlement meeting?
Many mediators are puzzled that such an excellent way of bringing about an agreed closure has been so slow to catch on. Every experienced mediator has witnessed the relief and pleasure on parties’ faces when a hard day of facilitated negotiation ends in a signed agreement. The author explains how often good new ideas start by being ignored, may then be treated with hostility or derision, and finally form part of mainstream thinking.
April 2011 saw the implementation of the EU Mediation Directive. It saw the publication of a Ministry of Justice Consultation Paper containing a very marked emphasis on the importance of mediation. It is seeing other departments urging parties everywhere to seek consensual solutions, rather than go down the slow, expensive path towards an imposed solution. In such a context the publication of this excellent short book is very timely
Environmental Concerns in International Investment Agreements: A Survey
Kathryn Gordon and Joachim Pohl
Abstract:
International investment agreements define State commitments on investment protection, but also shed light on how these commitments are to be integrated with other public policy objectives. Investment protection in the context of environmental regulation has been a frequent source of controversy and investor-state disputes. In order to enhance the factual basis for debate in this policy area, the present survey establishes a statistical portrait of governments’ investment treaty writing practices in relation to environmental concerns in a sample of 1,623 IIAs, roughly half of the global investment treaty population. The survey provides a statistical portrait of the extent, kind and frequency of treaty language referring to environmental concerns and the evolution of the use of such language over time. It shows that: i) over time, more treaties contain such language; ii) only about 8% of the sample treaties include references to environmental concerns; and iii) there are wide variations in the content of such language, both across countries and across time.
Investment Arbitration as the ‘New Frontier'
The Arbitrator and Mediator, Vol. 28, No. 1, pp. 59-69, 2009, Sydney Law School Research Paper No. 11/34
Chester W . Brown
Abstract:
Since the Argentine financial crisis of 2001-2002, bilateral investment treaties (“BITs”) have increasingly come under the spotlight as a means by which foreign investors can enforce their rights against the host State of their investment. These rights come in the form of various substantive standards of protection, such as the protection against expropriation, the right to fair and equitable treatment, full protection and security, national treatment, most-favoured nation treatment, and importantly, the right to bring a claim in international arbitration against the host State in the event that the investor considers that the State has breached its international obligations. This article considers the case of Argentina (which has faced over 40 claims under BITs in the last decade), and provides a concise review of the substantive and procedural protections available to investors under these international instruments. The article then considers some challenges faced by the regime for investment treaty arbitration, such as the problem of inconsistent decisions, multiple proceedings, and the perceived lack of transparency.
Arbitration of Investment Disputes under Iranian Investment Treaties
Journal of Money Laundering Control (JMLC), Vol. 14, No. 2, pp. 130-157, 2011
ArdeshirAtai
Abstract:
In 2010, the international community including the United Nations, European Union and United States imposed a series of economic and financial sanctions on the Iranian government for its controversial nuclear programme by restricting investments by multinational companies in the Iranian oil and gas resources. In summer of 2010, major oil companies began pulling out of the South Pars block which is the world's second biggest gas field situated in the Persian Gulf. It is expected that more companies will abandon their investment projects for fear of sanctions by the US treasury which targets both US and non-US companies with investments and economic interests in the Iranian petroleum industry. The exiting firms may experience problems in transferring their capital and machinery out of the Iranian jurisdiction and may suffer damages as a result of unfair and discriminatory treatment by the authorities including customs officials, banks, oil ministry, OIETAI and other public bodies. The only remedy available to the foreign investor is to claim compensation for interference or expropriation of its property rights in investment by bringing an arbitration proceedings against the Iranian government and/or state agencies. Iran is party to more than 50 BITs with capital exporting and developing countries which guarantee access to international arbitration pursuant to arbitration rules of ICSID, ICC and UNCITRAL. This article exemplifies the dispute resolution provision contained in Iranian BITs including consent to arbitration, jurisdiction of arbitral tribunal, arbitration procedures, applicable substantive law, location of arbitration and enforcement of arbitral award. The purpose of this article is to provide investors involved in disputes over investments with the Iranian government with the remedy to pursue their compensation claims in a "neutral, impartial and third party forum" which is based outside of the Iranian jurisidiction.
Beyond Adjudication: Resolving International Resource Disputes in an Era of Climate Change
Stanford Environmental Law Journal, Vol. 30, No. 2, 2011
Anna Spain
Abstract:
This Article examines the role of international adjudication as a mechanism for resolving international disputes and promoting global peace and security in an era of climate change. The central claim is that adjudication has limitations that make it ineffective as a tool for resolving international resource disputes. The Article argues that adjudication is limited due to source and process challenges and it illustrates this claim by reviewing cases adjudicated by the International Court of Justice, the Permanent Court of Arbitration and other international courts and tribunals. Four categories of adjudication limitation emerge: a) cases where the parties refused to submit to adjudication, b) cases where the judicial decision did not address the merits of the dispute, c) cases of noncompliance and d) cases where there was a recurrence of the dispute or conflict. In response, the Article suggests that reliance on adjudication as the primary form of international dispute resolution in this context is misplaced. Instead, the Article argues that adjudication may be more effective when combined with non-judicial dispute resolution methods such as mediation and facilitation. Three case studies illustrate how the integration of dispute resolution approaches has successfully resolved international resource disputes and the conflicts they were a part of. By establishing a clear descriptive account of the limitations of adjudication in this context, this Article seeks to move international dispute resolution beyond its traditional paradigm in order to advance global capacity to resolve disputes and prevent conflict in an era of climate change.
Non-State Actors in International Investment Law: The Legal Personality of Corporations and NGOs in the Context of Investor-State Arbitration
PARTICIPANTS IN THE INTERNATIONAL LEGAL SYSTEM: MULTIPLE PERSPECTIVES ON NON-STATE ACTORS IN INTERNATIONAL LAW, Jean D'Aspremont, ed., pp. 360-371, Routledge-Cavendish, 2011
Patrick Dumberry and Erik Labelle-Eastaugh
Abstract:
This article examines the old controversial question of the legal status of corporations under international law in light of new developments in the field of international investment law. It argues that corporations may be considered as subjects of international law in the context of bilateral investment treaties (BITs) and State contracts. This is because they hold rights under these legal instruments and are given the possibility to commence a direct claim against a State before an international tribunal. This international legal personality is, however, limited, derivative and passive.
This article will also examine the even more recent trend of participation by public interest groups, such as non-governmental organizations (“NGOs”), in investor-State arbitration. Such groups are increasingly being granted amicus curiae status in these proceedings. While these groups are sometimes given a limited participative role in arbitral proceedings, we will argue that they are not subjects of international law.
Introducing International Commercial Arbitration and Its Lawlessness, by Way of the Dissenting Opinion
Contemporary Asia Arbitration Journal, Vol. 4, No. 1, pp. 19-35, May 2011
Ilhyung Lee
Abstract:
The arbitration method of dispute resolution is similar to, and also differs from, adjudication and judgment in the courts. Practitioners more acquainted with resolution of commercial disputes in the judiciary will find some aspects of arbitration to be troubling, or worse. In addition, some commentators have described arbitration, especially that involving international commercial disputes, to be (quite bluntly) lawless. This article discusses (i) the salient differences between the arbitration and court adjudication methods and (ii) those features of arbitration characterized as lawless-through the vehicle of the dissenting opinion. Seen most frequently in the decisions of appellate courts in common law jurisdictions, the dissenting opinion provides for an opportunity to highlight the differences between the two methods of dispute resolution. The separate dissenting opinion is seen less often in most civil law systems, and arbitrators from those jurisdictions as a group disapprove of such opinions in arbitral tribunal decisions. Such disapproval may be seen by others (usually from the common law setting) as one example of the lawlessness in international commercial arbitration.
Judicially Assisted Third Party Discovery in Aid of Foreign International Commercial Arbitrations Under the Evidence Act 2006
LLB (HONS) Research Paper, LAWS 525: International Commercial Contracts
James Gilbert
Abstract:
International arbitration continues to grow in popularity as an alternative to litigation as entities engaged in international commerce seek to take advantage of the flexibility, autonomy, efficiency and cost-effectiveness that it offers. However a significant gap exists in international arbitration law in that parties to international arbitrations cannot obtain discovery of documents from third parties located outside the judicial jurisdiction of the arbitral seat. This has created a divergence of opinion between District Courts in the United States, a slim majority of whom have considered themselves able to assist foreign international arbitrations with discovery under § 1782 of Title 29 of the United States Code, despite the fact that this provision is unsuited to the narrow limits of discovery as it is understood in international arbitration. This paper argues that New Zealand’s international judicial assistance legislation is much more in tune with international arbitration, and therefore that New Zealand’s courts are well placed to follow the example of the majority of United States courts by interpreting the legislation in a way which allows them to assist international arbitrations as well as international court proceedings.
Le Droit International Privé des Procédures Collectives en France (International Private Law and Corporate Insolvency in France)
InDret, Vol. 2, 2011
Jean-Marc Talau
Abstract:
Most of French international private law is not codified, except for private law regarding family matters, that is included in the French Civil Code. The French Corporate Insolvency Act (nowadays a part of the Code of Commerce: Art. L. 600-1ff), and the following law reform acts of 7/26/2005 and of 12/18/2008 (together with the decree of 2/12/2009) do not provide for any kind of international private law rules. Case law has managed to fill this gap and provide for the rules on this subject. This judge-made-law remains enforceable whenever parties involved in the litigation and the issues involved in the judgments don’t fall within the scope of the European Regulation No. 1346/2000 or the international bilateral treaties which often are applicable to winding up processes. French Courts have established a pragmatic corpus of rules, of a mixed nature between the universal theory and the territorial theory, similar to the pragmatism found in international arbitration. As a general rule, Courts extend the local territorial rules of jurisdiction into the international framework. French Tribunals of commerce have jurisdiction over companies ‘incorporated’ or established in France (including leasing) while recognition and enforcement of foreign sentences are subject to common rules. Since 5/31/2002, the European Regulation might be a challenge, within its scope, for the extensive French Courts’ jurisdiction over international corporate insolvency, and questions are arising, even before the Court of Justice of the European Union. In any case, French Justices keep enforcing the European Regulation in a pragmatic way.
Seals, Stamps, and Signatures in International Arbitration Agreements
Contemporary Asia Arbitration Journal, Vol. 4, No. 1, pp. 37-55, May 2011
Stephan Wilske and Christina Scheidle
Abstract:
This paper deals with a question which came up in a recent Korean Commercial Arbitration Board arbitration, namely whether and to what extent a Korean company seal and a German company stamp may fulfill the signature requirements under the parties’ contractual agreement and the applicable arbitration law. In this context the paper discusses the purpose of signatures from a Western and an Asian perspective and the writing and signature requirement as a prerequisite for formal validity of an arbitration agreement under international and national arbitration law. What the authors consider most remarkable about this case is the phenomenon of cultural preconceptions as a source of possible errors and misunderstandings. The article concludes that even in an era of increasing harmonization of international arbitration law and practice, arbitration users and practitioners should be vigilant and always prepared to question whether an issue that might be simple and obvious in their own mind might be viewed completely differently by someone with different cultural experiences.
The Changing Role of Evaluation in Commercial ADR
Dispute Resolution Magazine, Vol. 14, p. 16, Fall 2007
Dwight Golann
Abstract:
This piece describes how processes of non-binding dispute resolution in civil cases changed over the past twenty-five years from heavy reliance on court-like evaluative processes such as advisory arbitration and mini-trials, and toward much greater use of facilitative mediation. The article argues that commercial mediation has evolved into a mixed form of facilitation and evaluation, and that in current practice “evaluation” consists of a spectrum of mediator interventions, ranging from “reality testing” questions to hard, global opinions about case value. The content of evaluations has also changed; they are no longer limited to the legal merits and more often consist of the neutral’s assessment of party attitudes and the bargaining situation.
A Psychological Perspective on the Facilitation of Settlement in International Arbitration - Examining the CEDR Rules
Journal of International Dispute Settlement, Forthcoming
Sophie Nappert and Dieter Flader
This article explores the still-controversial role of arbitrators in settlement facilitation and whether the professional guidelines put forward supposedly to assist arbitrators in this role take into account the psychological factors at play. Do “best practice” guidelines address the “right” factors? Particular attention will be had for these explorations to the Rules of the Centre for Effective Dispute Resolution (CEDR) for the Facilitation of Settlement in International Arbitration.
We identify that the Rules and Recommendations, whilst they provide a number of discrete pointers, leave unaddressed significant areas of the process of settlement facilitation, on which they provide no guidance. We refer to these areas as ‘gaps’ in the Rules. We observe that these gaps pertain chiefly to the tribunal’s own readiness in approaching and taking control of the settlement facilitation process, both in terms of mindset and techniques.
We further observe that the gaps may be an inevitable consequence of (i) the current lack of meaningful insight into the psychological triggers applicable to arbitration; and (ii) the way in which the Rules and Recommendations were devised – namely by a group of arbitration practitioners.
Points on which the Rules are silent include:
(a) The timing and trigger of the settlement facilitation process;
(b) The consensus-building exercise carried out by the tribunal about the very decision to facilitate settlement;
(c) The authority of the arbitral tribunal;
(d) The allocation of roles between the arbitrators inter se in the settlement process.
Assessment of the New UNCITRAL Arbitration Rules of 2010
Law Comments by RimantasDaujotas
RimantasDaujotas
Abstract:
UNCITRAL Arbitration rules of 2010 made arbitration provisions up to date with the modern practice of international commercial arbitration. 2010 Rules have reflected new developments and change in the international commercial arbitration since the adoption of the UNCITRAL Arbitration Rules of 1967. However, in order to keep the rules short, efficient and attractive to the business community, it was impossible to deal with all the issues which could arise and cause problems in the arbitral proceedings. Furthermore, it can be argued that in order to retain popularity of the UNCITRAL arbitration rules, they should be revised more frequently. This article will focus on the main changes made in the rules of 2010 and compare it with it’s older edition of 1967.
[It is not UNCITRAL Arbitration Rules 1967. It is UNCITRAL Arbitration Rules 1976]
Negotiation in the Presence of the Arbitrator: How Anticipated Arbitration Can Facilitate Cooperation and Integrative Offers
IACM 24th Annual Conference Paper
Benjamin öhneand Roman Trötschel
Abstract:
The present study explores the impact of an anticipated arbitration through a third-party in an integrative negotiation task. It was predicted that the mere anticipation of third-party intervention by an arbitrator would suffice to facilitate cooperation between the parties and lead to more integrative offers. The findings of the present research revealed that being confronted with a looming arbitration at the end of the negotiation, parties acted more cooperative and substantially made more concessions compared to parties not anticipating arbitration. In line with our predictions, this beneficial effect of a looming arbitration emerged right from the start of the negotiation. The findings are discussed with respect to the role of the anticipated loss of decisional control of negotiators faced with an arbitrator.
Regularity Through Reason: A Foundation of Virtue for International Arbitration
Contemporary Asia Arbitration Journal, Vol. 4, No. 1, pp. 57-94, May 2011
James D. Fry
Abstract:
This Article has two purposes. First, this Article explores the ambiguity of the term “precedent” and its associated principle “stare decisis” in the context of international arbitration to better understand the potential source of confusion over precedent’s role in international arbitration, and continues on to a detailed analysis of the many international arbitral decisions that grapple with the role of precedent in reaching a conclusion. With a clear understanding of the magnitude of the confusion over the role of precedent in international arbitration, the stage is set for the next part of the Article to introduce consistency of reasoning and other underlying principles as an alternative paradigm to precedent, as well as some of the risks involved with a focus on consistency. Such a paradigm shift is similar to that proposed by Sir Edward Coke in the early 17th century, which added considerable unity to the common-law system by placing consistency of reasoning at the heart of the common-law system, as opposed to precedent, which often had led to fragmentation in the past. By focusing on consistency through reason, the international arbitration regime will be a healthier system in terms of rendering reliable decisions.
Interaction of Different Laws and Rules in International Commercial Arbitration
Law Comments by RimantasDaujotas
RimantasDaujotas
Abstract:
One of the main advantages of arbitration is that it can be a ground for dispute resolution which requires interaction of various different laws and rules. Parties can freely decide what laws or rules should govern their dispute settlement mechanism and what procedure to follow in the event of disagreement about their contractual obligations. In order to understand and take the most of international arbitration, main applicable laws and rules should be identified. However, there are also restrictions to party autonomy principle and the law of the seat of arbitration has a major influence to international arbitration procedure.
A Framework to Apply the Article III Case or Controversy Requirement to Motions to Confirm or Vacate Arbitral Awards Pursuant to the Federal Arbitration Act
University of Toledo Law Review, Vol. 42, No. 1, 2010
Aaron Edward Franklin
Abstract:
This paper identifies some uncertainty in how the Article III case or controversy requirement applies to motions to confirm or vacate an arbitral award under the Federal Arbitration Act. It argues that the case or controversy requirement applies to the dispute presented by the motion to confirm/vacate an award, rather than the dispute that necessitated the underlying arbitration. It further argues that existence of an unconfirmed or unvacated arbitral award itself never supports a determination that a case or controversy exists.
Class and Collective Relief in the Cross-Border Context: A Possible Role for the Permanent Court of Arbitration
Hague Yearbook of International Law, Vol. 23, 2010, University of Missouri School of Law Legal Studies Research Paper No. 2011-16
S.I. Strong
Abstract:
Collective redress of mass legal injuries is a topic of concern in numerous countries around the world, with cross-border disputes giving rise to particular problems due to actual and perceived clashes of law, policy and practice. This article considers whether arbitration might be preferable to litigation as a means of resolving large-scale international disputes. After considering how each procedure handles issues involving jurisdiction, conflict of laws, procedure and enforcement, the article concludes that class and collective arbitration may be in many ways superior to similar actions in court. The article ends with a discussion of the role that the Permanent Court of Arbitration might play in the development of this area of law.
Facilitating Settlement at the Arbitration Table: An Empirical Examination of Views on Settlement Practice Among Arbitration Practitioners in East Asia and the West
Shahla F. Ali
Abstract:
This paper presents an empirical examination of how international arbitrators in East Asian and Western countries view the goal of settlement in international arbitration. The result of a 115 person survey and 64 follow-up interviews shed light on the underlying cultural attitudes and approaches to settlement in international arbitration as practiced in diverse regions. To date, most research on international arbitration has focused exclusively on Western models of arbitration as practiced in Europe and North America. While such studies accurately reflected the geographic foci of international arbitration practice in the mid-20th century, in recent years, the number of international arbitrations conducted in East Asia has grown steadily and on par with growth in Western regions. The findings indicate that arbitration practitioner’s perceptions of the importance of information sharing in encouraging settlement as well as the simultaneous attention of both parties to the dispute demonstrate a high degree of convergence across regions. At the same time, regional and socio-economic distinctions are reflected in varying arbitrator perceptions regarding the arbitrators’ role in settlement, whether settlement is regarded as a goal in arbitration and the types of efforts made pre-arbitration to settle disputes. In particular, arbitrators working in the East Asian region regard the goal of facilitating voluntary settlement in the context of arbitration with greater importance and generally make greater efforts pre-arbitration to settle disputes as compared with counterparts in the West.
Factors to Consider Before Arbitrating in the Arab Middle East: Religious and Legislative Constraints
Journal of International Commercial Law, Vol. 3, p. 1, 2011
Radwa S. Elsaman
Abstract:
This article discusses two significant factors affecting arbitration in the Arab Middle East: the effect of religion on arbitration and the effect of legislative constraints on arbitration. By presenting foreign investors and practitioners with an overview of some of the unique social, legal and religious issues distinctive to arbitration in the Arab Middle East, this article will provide foreign investors and practitioners with examples of factors to consider that can affect arbitration decisions in the Middle East.
Settlement of Disputes Under the United Nations Convention on the Law of the Sea 1982, with Detailed Study of the Process of Arbitration
Radwa S. Elsaman
Abstract:
The law of the sea’s importance is reflected in the wealth of treaty law, customary international law, and judicial decisions in this area. The most important convention in this regard is the United Nations Convention on the Law of the Sea 1982 (UNCLOS 82). In response to the increase in law of the sea disputes and the greater need for an independent system to govern those disputes, a dedicated Chapter with complementing annexes was introduced in the UNCLOS 82 with special features setting up the compulsory procedures for settlement of disputes. The UNCLOS 82 stands as the most recent treaty incorporating compulsory procedures, not just optional rules to be applied subject to the will of the parties. This paper defines the different kinds of maritime disputes distinguishing them from conflicts. It then illustrates the rules governing the settlement of disputes under public international law, emphasizing that these mechanism are the most important development in the settlement of international disputes since the adoption of the United Nations Charter and the Statue of the International Court of Justice. It also presents in detail the disputes settlement mechanisms of the UNCLOS 82, with particular attention to the UNCLOS 82 arbitration system as a method of disputes resolutions.
The Enigma of Enforceability of Investment Treaty Arbitration Awards in India
Asian Journal of Comparative Law, Vol. 6, Issue 1, January 2011
Prabhash Ranjan
Abstract:
This paper critically discusses the issue of enforceability of investment treaty arbitration (ITA) awards against India under the Indian domestic law on arbitration. In this regard, the paper discusses the relevant provisions of the Indian arbitration law and its interpretations by the Indian judiciary to understand their ramifications for the enforcement of ITA awards against India. The paper also discusses the proposed amendments to the Indian arbitration law and its ramifications on ITA. The issue of enforcement of ITA awards in India has become important due to India’s gigantic international investment treaty program where each treaty allows for investor-state treaty arbitration to settle disputes between investors and India. This issue has also become important in light of the growing observation that enforcement of foreign commercial arbitral awards in India is extremely difficult especially after the Venture Global engineering case. Thus, India is endeavoring to change the arbitration law so as to alter this perception. This paper argues that in spite of these proposed changes; enforcement of ITA awards may still face problems. Thus, the paper suggests that India should address the issue of enforceability of ITA awards given its gigantic investment treaty program aimed at attracting foreign investment.
The Impact of Labor Unions on Worker Rights and on Other Social Movements
ABA Journal of Labor and Employment Law, Vol. 26, 2011
Charles B. Craver
Abstract:
Labor unions have been in existence for over two hundred years, initially as craft organizations, and more recently as industrial and service organizations. During their existence they have significantly enhanced the wages and fringe benefits of represented workers through the collective bargaining process, and indirectly affected the wages and benefits enjoyed by nonunion employees whose employers provided them with such benefits to preclude their unionization. Unions have also provided members with job security through just cause disciplinary limitations and grievance-arbitration procedures. Over the past sixty years, many social movements have employed union tactics to advance other critical issues such as the end of the Vietnam Conflict, the end of racial segregation, the enhancement of the environment, and the rights of tenants.
The Myth and Reality of 'Shari’A Courts' in Canada: A Delayed Opportunity for the Indigenization of Islamic Legal Rulings
Faisal Kutty
Abstract:
The Ontario government’s passage of the Family Statute Law Amendment Act, 2005 ostensibly precluding the enforcement of faith-based decisions issued by arbitration panels pursuant to the Arbitrations Act, 1991, in the area of family law, brought to the fore a debate that has been raging in liberal democracies for some time.
Those opposed to allowing the use of religious principles in resolving family disputes using the Arbitrations Act, 1991, raised some legitimate concerns about gender rights within religious communities. They also questioned the role of religion in secular society and opposed what they saw as privatization of the legal system. Opponents contended that religious groups should be able to govern their lives according to their conscience within the parameters of law if the constitutional right to freedom of religion and association is to have any real value. Consenting and informed adults, they argued, must be able to make religious choices even if others do not believe these are “correct” choices.
The issues, of course, transcend dispute resolution and tug at fundamental tensions surrounding multiculturalism and national identity, the limits of accommodation and legal pluralism within a liberal democracy and the separation of church and state. I argue that Ontario lost a timely opportunity to devise a way to balance these competing rights and interests in a manner that respects all parties and protects the vulnerable.
The controversy was a prime case to examine whether Islamic law and liberal democracy can co-exist within a liberal constitutional framework. Moreover, I also argue that Ontario also delayed an opportunity to indigenize or Canadianize Islamic law rulings in a manner that would help in the integration process of its Muslim citizens.
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