"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Friday, February 25, 2011

Dallah Real Estate, Best Xerox and Universal Metal

Some issues/ decisions on arbitration.

Lex Arbitri Blog had brought to our attention that the French Court of Appeal had decided in Dallah Real Estate v. Pakistan that the arbitral award was valid. This was in complete contradiction to the decision of the UK Supreme Court which refused to enforce the same arbitral award. The Conflict of Laws. Net Blog has a detailed post on the French Court of Appeal decision. Do check it out.

Best Xerox Centre v. Xerox Modi India Ltd.

Best Xerox Centre had filed a complaint under the Competition Act, 2002 against Xerox Modi India Ltd. alleging abuse of dominant position. The allegation is that the abuse of dominant position is for coercing Best Xerox Centre (BXC) to sign the Full Service Maintenance Agreement (FSMA) with an arbitration clause in which Xerox Modi (Xerox) had the exclusive right to appoint the arbitrators.

According to BXC, in order to lure customers for selling the products of Xerox, Xerox provided equitable terms of contract, including the arbitration clause wherein both BXC and Xerox had to contribute in appointing the arbitrators. However, once BXC purchased the machines of Xerox, in the service agreement (FSMA) entered for the purpose of servicing the machines of Xerox, the arbitration clause provided for the unilateral constitution of the tribunal by Xerox.

The Competition Commission of India held that there was no prima facie case of abuse of dominant position and also held:
The Commission is not the forum for challenging the terms of any arbitration clause, unless there is any anti competitive element involved.”
We had, in a previous post, discussed about the unilateral right of a party to appoint the arbitral tribunal under the arbitration agreement. 

Universal Metal Company Ltd. v. GAIL (India) Ltd.
As per the Gas Sales Agreement (GSA) between the petitioner, Universal Metal Company Ltd. (Universal) and GAIL (India) Ltd. (GAIL), GAIL had the right to levy certain charges on Universal. When GAIL levied such charges, Universal petitioned to the PNGRB alleging that levy of such charges by GAIL was arbitry and unjust. The Petroleum and Natural Gas Regulatory Board (PNGRB) heard the matter and held that in view of Article 13 of the GSA which provided for reference of disputes to arbitration and in view of Section 24(1) of the Petroleum and Natural Gas Regulatory Board Act, the PNGRB is under an obligation to dismiss the matter and refer the same to arbitration. Section 24(1) reads:
Save as otherwise provided for arbitration in the relevant agreements between entities or between an entity or any other person, as the case may be, if any dispute arises, in respect of matters referred to in sub-section(2) among entities or between an entity and any other person, such dispute shall be decided by a Bench consisting of the Member (Legal) and one or more members nominated by the Chairperson: Provided that if the members of the Bench differ on any point or points, they shall state the point or points on which they differ and refer the same to a member other than a member of the Bench for hearing on such point or points and such point or points shall be decided according to the opinion of that member.”(emphasis not in the original)

Tuesday, February 22, 2011

Some Very Interesting Reads on Contract Law and Arbitration

Recently, two interesting articles were published in SSRN on contract law

The first article titled “Contract Law, Party Sophistication and the New Formalism”, penned by Meredith Miller, criticizes the law as it exists on the impact of party sophistication in the interpretation of contracts. The author does not wholly discount the party sophistication concept. Rather, according to the author, the courts have not addressed the issue of party sophistication in a meaningful way. Do check this article out (44 pages).

In the case of Oceanbulk Shipping and Trading SA v TMT Asia Ltd [2010] UKSC 44, the UK Supreme Court dealt with the law pertaining to whether “without prejudice” communications during negotiations would form a part of factual matrix that is relevant extrinsic aid to contract interpretation.

This article titled “Without Prejudice Interpretation – With Prejudice Negotiations” by Adrian A. S. Zuckerman critically analyses the decision. Do check it out. Extremely interesting and short (10 pages).

Also do check out this case comment in the UK SC Blog on the said case.
A few interesting articles on arbitration. (ideally these must be a part of the monthly roundup of arbitration articles but then these are very hot reads.

David Schwartz hates using the term “mandatory arbitration” to the situation where the party that solely drafted the contract enforces the arbitration clause contained in it against the other party which has weaker bargaining power and had no positive role to play in the drafting of the contract. He wants to call such arbitration as “claim-suppressing arbitration” in this article titled “Claim-Suppressing Arbitration: the New Rules”. Do check it out. He is in favour of the passing of the Arbitration Fairness Act (USA). Interesting read.

Empirical Legal Studies Blog has come up with links to a couple of empirical studies on arbitration. I have not read the articles but the description in the ELS blog post projects the articles to be very interesting. The links to the said articles are provided below (subscription required):

An Empirical Study of Employment Arbitration: Case Outcomes and Processes, 8 Journal of Empirical Legal Studies 1 (2011) by Alexander Colvin

Punitive Damages in Securities Arbitration: An Empirical Study, 39 Journal of Legal Studies 497, 518 (tbl. 4) (2010) by Stephen J. Choi & et al.

Saturday, February 19, 2011

Bhoomi Pooja is a secular activity when done by the HC judges in official capacity

The HC of Gujarat has delivered a judgment on 10/2/11 on the secular character of the Bhoomi Pooja participated by the HC judges of Gujarat. The court found the act of Bhoomi Pooja as an acceptable proposition within secularism and found that offering prayers with the aid of brahmin priests chanting Sanskrit slokas well within the secular tenet of the constitution.

The discourse on secularism in India seems to point towards the Indian brand of secularism which is a fluid concept- vague as much as it could get. Secularism has been a point of debate in Indian judiciary specifically and bastions are cases like S.R Bommai, Ramesh Yaswant Probhoo, to cite a few.

In the present case, by setting another standard of secularism, the court have said that the Bhoomi Pooja is essentially for the betterment of the institution of the HC and therefore for the betterment of everyone directly or indirectly connected irrespective of their caste or religion.

“17. If such incident is further considered, one needs to excavate the earth to some extent for laying down any foundation. If the earth even if treated in its materialistic sense, the existence of the earth and well being of the earth touches to all mankind on the earth. At the time of excavation of such earth or at the time when a building is to be constructed by adding physical burden, offering of the prayer to the earth to pardon or to graciously bear the burden or the damage, if any, to make the construction successful, which is to be used for betterment of the institution of the High Court, such an action can be termed as for the betterment of all persons connected thereby directly or indirectly, irrespective of their caste or religion or community. Therefore, such offering of the prayer to the earth at the time of foundation laying ceremony cannot be termed as non-secular action if "manav dharma" is to be understood in its real sense in furtherance to the principles of secularism to be observed by our nation.
18. At the time when the prayers are to be offered to the earth by the dignitaries who had laid down the foundation for the building, simultaneously if sanskrit slokas are spoken by brahmins, it can be said as in furtherance to the prayer offered to the earth. Such slokas could also be termed as supplementing prayers offered by the person/s laying foundation for a noble desire to achieve successful construction of new building. If the ultimate aim for successful construction of the building is holy and with the larger interest of those persons who are to be directly or indirectly benefited by successful construction of the building, irrespective of their caste or community or religion, it would fall within the principles of "Vasudeva Kutumbakam", welfare to all and hurt to none. Such in no manner can be termed as non-secular activity.

After discussing this, the court enquired whether the person who has filed the PIL has locus as per the recent guidelines given in Uttranchal v. Balvantsinh and found him to be lacking locus.

“26. In our view, in view of the aforesaid consideration, it appears that the petition has been filed with extraneous considerations which are not disclosed by the petitioner since he has tried to expose the cause of the organization behind him or the other persons. Such would lead to serious doubt about the credentials of the petitioner. Further, the correctness of the statement made at para 3 is falsified by the above referred subsequent paragraphs and the annexures produced with the petition. Therefore, it can be said that the petition is either filed with some extraneous consideration or there is no genuineness or bonafide public interest as sought to be canvassed. The petition can be termed as by a busy body for extraneous consideration.”

Therefore the court rejected the petition and slated exemplary cost.

Issues to muse

1. If the court had to find that person had no locus and therefore the petition was to be dismissed why the verbose on secularism? Were they driven by the need of self justification!
2. Secularism unequivocally prohibits preference by state of one religion over the other. When the HC conducts Bhoomi Pooja with brahmin priests what else other than preferring one religion over the other was done, however the court may try to justify it as part of dharma and not part of religion. Court’s rationale if nothing is poor and unsubstantiated.
3. One could appreciate Bhoomi Pooja as a matter of culture and in India, like elsewhere, culture and religion are mostly interlinked. Even when culture is the driving force, its association with a particular religion should make the state wary in adopting it in public sphere of a secular nation.
4. The exemplary cost that has been levelled shows the courts tolerance in bad light, ‘here you go if you dare to raise fingers against us’ sorts.

Friday, February 18, 2011

Arbitration Judgements in India (Fortnight 1- February 2011)

S. Usha v. General Manager, Sourthen Railways (11.02.2011 – Madras HC)

Key Aspects:
Enforcement of Contractual Obligations Through Writs Despite Existence of Arbitration Clause, Nature of Contract with Statutory Bodies.

Mic Electronics Ltd. & Anr. v. Municipal Corporation Of Delhi & Anr (11.02.2011 – Delhi HC)

Key Aspects:
Application for Interim Relief, Stay of Letter Cancelling Contract, Public Law Principle that State Should Act Fairly- Whether Court in its Power to Judicial Review can Override the Express Provisions of Contract, Wrongful Contractual Termination and Right to Specific Relief.

Vishal Exports Overseas Ltd v. Hamburg Bulk Carriers (10.02.2011 – Delhi HC)

Key Aspects:
Condonation of Delay in Filing Objections to an Application under Section 34 of the Arbitration and Conciliation Act, 1996- Filing of Objections in Wrong Courts

Muthoot Leasing and Finance Ltd. v. N.P.Asiya (07.02.2011- Kerala HC)

Key Aspects:
Attachment Order under Section 9 of the Arbitration and Conciliation Act, 1996, Application by a Bona Fide Purchaser Before Attachment to Remove Attachment, Third Party and Section 9 of the Arbitration and Conciliation Act, 1996

Wednesday, February 16, 2011

Some Academic Discussions on the Indus Water Treaty

In this post, we bring to the notice of the readers two articles in the Economic and Political Weekly (EPW) on the Indus Water Treaty (IWT) and the present arbitration proceedings between India and Pakistan on the Kishaganga issue. In the December 11-17 edition of the EPW, John Briscoe (according to the author description in the article, he teaches Environmental Engineering at the Harvard University) writes in an article titled “Troubled Waters: Can a Bridge Be Built over the Indus?” writes that it requires “far-sighted political leadership” in Pakistan and (especially) in India to keep intact the troubled edifice of the IWT. Briscoe starts off with a lengthy disclaimer that he does not represent the interests of the World Bank or the US or any other institution but are the personal views of a “university professor”. In sum, Briscoe criticises the Indian position on the Indus basin.

A month later (January 15), in the same journal, Ramaswamy R. Iyer (affiliated to the Centre for Policy Research) refutes the contention of John Briscoe and defends the Indian position on the subject in an article titled "Briscoe on the Indus Treaty: A Response". Both the articles are worth checking out. They may be accessed (with subscription) from here and here.

Also, check out this news item in the Outlook which reports that the Kishanganga dispute may be settled “outside arbitration”.

Tuesday, February 8, 2011

Arbitrators (Ex-Judges) Make Merry While the Parties Bleed

It is well known that arbitration has moved from being an exception to the rule as far as commercial dispute resolution is concerned. Nevertheless, in India, inexpensive arbitration is an extinct species. We have, in the past, analysed the case of Dolphin Drilling Co. v. ONGC, where the chief complaint of ONGC against reference of the dispute to arbitration was that arbitration was too costly. In that post, we had given an indication of how much costs the parties have to pay per day for the arbitration. Typically, retired Supreme Court judges charge somewhere between Rs. 1 lakh to 2 lakhs for a sitting(consisting of two arbitration hearings- with one hearing amounting to about two hours). Now a question could be raised as to whether they deserve* such fee. The answer is mostly no but sometimes yes. It is mostly no because it is extremely difficult to make these retired judges understand the technical aspects in technically complicated business disputes (most business disputes are technically complex). A senior associate of a reputed Indian law firm called an arbitration hearing as a paid holiday for the arbitrators. These retired judges needlessly insist on having arbitration hearings in top notch five star hotels instead of having these in simpler and inexpensive venues.

It is in this context that we wish to examine news reports on an arbitration between the Chandigarh Housing Board and Parsvnath Builders.

Source: http://www.parsvnathprideasia.com/about_prideasia.asp
CHB and Parsvnath had inked a development agreement in October 2006. As per the agreement, Parsvnath was supposed to deposit around 520 crores (different reports in the media suggest different amounts- some suggest it was 517 and some suggest it was 521) as the first installment. Parsvnath had deposited around Rs. 520 crores with the CHB. However, Parsvnath had allegedly refused to deposit the second installment of money amount to around Rs. 317 crores. The reason for non-remittance of the amount, as per reports, was that CHB did not provide unencumbered lands and approval of building plans. Since Parsvnath did not commence the project, CHB issued default notices for termination of the agreement. The matter was referred to arbitration.

In the arbitration proceedings, CHB had claimed a compensation of Rs. 2800 crores while Parsvnath has claimed Rs. 1300 crores against CHB. As per the agreement, three arbitrators were supposed to be appointed in relation to disputes between the parties. CHB had appointed Justice DP Wadhwa as its arbitrator and Parsvnath appointed Justice Amar Dutt. Both the arbitrators had appointed Justice SC Aggarwal as the presiding arbitrator.

Each of the arbitrators had allegedly charged Rs. one lakh per hearing, excluding costs towards cost of hotels, air tickets and other administrative expenses. A total of around Rs. One Crore was spent on the arbitrators for seventeen hearings in the matter.

According to this news report, several proceedings were held in a five star hotel in New Delhi. The said news report quotes some protagonists on the issue pertaining to exorbitant fee charged by the arbitrators. The said quotes are quoted below:
CHB chairman Mohanjit Singh: How can we match Parsvnath’s standards? The day is not far when CHB’s assets will have to be auctioned. Our employees will be on the streets. The investors’ fate is hanging in balance. CHB has incurred nearly Rs 1 crore on arbitration proceedings till date.
Justice (retd) Amardutt: I am just a member of the Tribunal. The fee was decided in the first sitting. If CHB has any grouse regarding the fee, they can approach the Tribunal.
Justice (retd) S C Aggarwal: Remedies are there. They can move Tribunal if they have any grouse. I am only one member of the Tribunal. If they want reconciliation, they should approach the Tribunal. Why should I be getting any calls from the media?
Justice (retd) D P Wadhwa: If any party is having any grouse, they can write to us. There is no need for them to go to the media
This news report suggests that the arbitrators charged the sitting fee equivalent to Rs. 1.5 lakhs (for each of the three arbitrators) for merely seeking adjournment to a future date. It may be noted that this vile practice of the arbitrators to charge the sitting fee for the hearing in case of adjournments is not something that was done in this case alone. This shylockian practice is followed by many of the retired judges of the High Courts and the Supreme Court. The moot question is whether they deserve this fee at all. With all due respect to the honest and hardworking judges of High Courts and the Supreme Court, this blawgger feels that many do not. Corporate India (generally) appoints ex-judges of the High Courts and the Supreme Court as arbitrators. This is prevalent despite there being several industry experts are better placed to decide, especially in respect of techno-commercial issues. This practice of corporate India is in existence only because the expectation that the Ex-judges of the High Courts and the Supreme Court would be honest. However, the truth is too far from reality. In many instances, the arbitrator appointed by one of the parties (in case of a three member tribunal) has overtly supported the party which appointed it.

Generally, parties are afraid to take measures to cut costs expended for arbitration hearings (such as asking the tribunal to conduct arbitration proceedings in less expensive venues rather than in five star hotels) for the fear that they would antagonise the arbitrators. Advocates/ Solicitors do not recommend parties to take such measures for the same reason. Pushed to desperation, CHB had no other go but to write to the arbitrators in October 2010 asking them to reduce their per sitting fee from Rs. 1 lakh to Rs. 25,000. The latest news report suggests that after the October 2010 letter, the arbitrators have not yet fixed further date of hearing in the matter. We do hope that the arbitrators do accede to the request of CHB.

* Edited After Posting

Monday, February 7, 2011

Islamic Banking Jugment

The High Court of Kerala recently delivered a judgment on Isalmic Banking. The judgment could be accessed here.

Thursday, February 3, 2011

Arbitration Judgements in India (Fortnight 2- January 2011)

Atmiya Chemicals v. Gas Authority Of India Ltd. (Delhi HC: 31.01.2011)
Key Aspects:
Reference by a Writ Court of a Dispute to Arbitration, of Discrimination in Gas Transmission Charges, Power of a Writ Court to Review PSU actions pertaining to Gas Transmission Agreement for Fairness

Birla Gtm-Enterpose Ltd. And Ors. v. Union Of India & Anr. (Delhi High Court: 31.01.2011)
Key Aspects:
Blacklisting Entities from Participating in Bidding Process, Tender by Joint Ventures, Rescission of Contract

Airports Authority Of India v. M/S Grover International Ltd. (Delhi High Court: 28.01.2011)
Key Aspects:
Arbitrability of Issues under Public Premises (Eviction of Unauthorized Occupants) Act, 1971

Solutions Advertising v. Thane Municipal Corporation (Bombay High Court: 28.01.2011)
Key Aspects:
Appointment of Arbitrator by Court, Unilateral Appointment of Arbitrator, Appoint of Employee/ Member of one of the Parties as Arbitrator, Independence and Impartiality of Arbitrators,

Modern Food Industries (India) v. M/S Nandlal & Co. (Patna HC: 28.01.2011)
Key Aspects:
Unregistered partnership Firm and the Right to Invoke Arbitration, Consequence of not Pleading Lack of Jurisdiction to Decide a Dispute Initiated by an Unregistered Partnership against a Third Party

Indian Renewable Energy Development Agency Ltd. v. The Official Liquidator, High Court, Madras, as the Provisional Liquidator of Arunachalam Sugar Mills Ltd & Ors.  (Madras HC: 19.01.2011)
Key Aspects
Application to Court for Interim Measures, Invoking Arbitration against a Company in Liquidation,
Role of a Provisional Liquidator, Right of Lien, Rights of an Unpaid Seller.

Ringspann Elecon (India) Limited v. Ringspann Gmbh (Gujarat HC: 18.01.2011)
Key Aspects
Application for Interim Measures of Protection, Existence of a Dispute as a Pre-requisite.

Wednesday, February 2, 2011

Somashekhara Commission Report

Find here (a link from the Hindu)the Report of Justice Somasekhara Commission on the attack on minority religious establishments in Karnataka.

Tuesday, February 1, 2011

Monthly Roundup of SSRN Articles on Arbitration (January 2011)

We used to do a fortnightly post giving links and the abstracts to the articles published in the Social Science Research Network that are related to arbitration and Alternative Dispute Resolution (ADR). Since we have started doing a fortnightly roundup of arbitration-related judgements in India, from now on we'll be doing a monthly roundup of the SSRN articles. In this post, we'll do a roundup of the articles on arbitration published in SSRN during the month of January 2011.

The Public-Private Dualities of International Investment Law and Arbitration
Dr Alex Mills
In recent years, the thousands of international investment treaties have given rise to hundreds of investor-state arbitrations. International investment law has thus become a topic of great practical importance, and one which has received significant attention in both arbitral awards and academic literature. International investment law, however, appears to possess inherent ‘dualities’ – analogous to an optical illusion, a single image or object which may appear strikingly different to different viewers or from different perspectives. The dualities of international investment law are presented in some of the most fundamental questions concerning its nature and purpose. This chapter explores the ideas or influences which lead analysis of the subject in conflicting directions and invite these seemingly contradictory viewpoints, by focusing on the ‘public-private’ distinctions or conceptions which lie at its contested foundations. These public-private dualities thus form a kind of conceptual lens through which international investment law may be viewed, and through which its different appearances or representations can be examined.

Beyond Fragmentation
Andrea K. Bjorklund and Sophie Nappert
The fragmentation of international law is in some ways an embarrassment of riches, with multiple tribunals creating jurisprudence in particularized areas. This richness leads also to complexity and to the phenomenon that Marti Koskiennemi has so accurately termed “fragmentation.” Our purpose in this essay is to look “beyond fragmentation” given that the status quo of multiple discrete nuclei developing in isolation from one another is unsatisfactory and, we argue, stands in the way of the continuing relevance of international law in modern times. The international investment arena, with its myriad ad hoc tribunals and legal doctrines enshrined in treaties that either codify or build on customary international law, offers an excellent laboratory in which to theorize about communication between the nuclei and when such communication is appropriate. We have suggested an inter-nuclei communication model for use when tribunals are obliged to give content to treaty norms that are inherently vague or to fill lacunae in treaties. This approach takes advantage of the positive aspect of fragmentation – the development of specialized jurisprudence in particular areas of the law. Yet this does not mean that all expertise is freely transferable. A specialized doctrine deeply embedded in a complex treaty might be a poor candidate for transfer to another regime in which the analogous doctrine operates in an altogether different context. For this reason we have suggested a cautious approach to inter-nuclei communication characterized by a willful awareness by tribunals in one sphere of international law of what goes on in other related spheres, and an exercise of canvassing the views expressed by other tribunals in these related spheres for guidance to inform, or test, one’s own analysis. We test our propositions by reference to two recurring issuing in international investment arbitration – the principle of denial of justice and the doctrine of necessity.

Exit and the American Illness
Erin A. O'Hara and Larry E. Ribstein
This essay, prepared for a book on the effect of regulatory, liability, and litigation inefficiencies on the global competitive position of the U.S., focuses on the role of the US federal system. We show that, although multiple US states offer significant potential for jurisdictional choice to address misguided or inappropriate law, this system is only a partial solution to these problems and can itself be a source of bad law and excessive litigiousness. Federal law and enforcement of contractual choice-of-law, choice-of-court, and arbitration clauses provide some, but only partial, relief. As a result, choice of law and jurisdiction rules potentially expose firms that do business nationally or internationally to oppressive law in any of the US states. Without reform of the rules regarding jurisdictional choice the US is losing an opportunity to exploit the edge in international competition it might get from its federal system.

Recent Developments to Promote Transparency and Public Participation in Investment Treaty Arbitration
James Harrison
In the past, concerns have been expressed about the secrecy of international treaty arbitration. This paper attempts to show how the investment treaty arbitration system has responded to these criticisms. It starts by reviewing the arguments in favour of transparency and what different forms transparency can take in the context of investment treaty arbitration. The paper then sketches out the main developments in relation to transparency and highlights key issues that still remain to be resolved. In conclusion it is noted that the extent of publicity and public participation in a particular arbitration will depend on the instrument under which the claim is being brought. Whilst a small number of states have sought to promote the transparency agenda in their investment treaties, much more could be done by the majority of states.

The Myth and Reality of 'Shari'a' Courts in Canada: A Delayed Opportunity for the Indigenization of Islamic Legal Rulings
Faisal Kutty
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.

Fairness and Independence in Investment Arbitration: A Critique of Susan Franck's 'Development and Outcomes of Investment Treaty Arbitration'
Gus Van Harten
This short article provides a critique of a prominent study, Franck (2009), that used quantitative research tools in order to evaluate potential bias in investment treaty arbitration. The study has been referenced in policy and academic discussions in order to allay concerns about an apparent lack of fairness and independence in investment treaty arbitration. This critique does not suggest that there is evidence of actual bias in investment treaty arbitration. Rather, it is argued that (1) the study by Franck contained findings and conclusions that were unsupported by the results of the study, (2) there is far too little available information upon which to base reliable conclusions about possible bias using quantitative research methods, and (3) the more pressing concern is perceived bias arising from institutional factors.

The Backlash Against Investment Arbitration: Perceptions and Reality
Michael Waibel , Asha Kaushal , Kwo-Hwa Chung and Claire Balchin
Commentators increasingly question whether a backlash against the foreign investment regime is underway. This book, the outgrowth of a conference organized by the editors at Harvard Law School on April 19, 2008, aims to uncover the drivers behind the backlash against the current international investment regime. A diverse set of contributors reflect on the current state and the future direction of the international investment regime, and offer some tentative solutions for improvement: academics, practitioners, government officials and civil society.

Contributors assess whether the current regime of investment arbitration is in crisis. They take a step back to look at the long-term prospects of investment arbitration, including reforms that could bring substantial improvements to the investment arbitration process. These questions can no longer be ignored or be dismissed as esoteric criticisms by fringe groups or outsiders with no stake in the system. Without appropriate remedial action, the rising discontent over the perceived and actual problems of the international investment regime risks undermining the tremendous gains in the rule of law on cross-border investment flows achieved over the last decades. Unless acknowledged and addressed, these concerns could throw the baby out with the bathwater.

Freedom of Association in a Free Enterprise System: Wal-Mart in Jonquière
Michael MacNeil
After a union was certified to represent employees at a Wal-Mart store in Jonquiere, Quebec, in 2004, the union and Wal-Mart bargained to impasse. When the union obtained an order requiring that the dispute be submitted to arbitration, Wal-Mart announced that it would close the store and subsequently did so. The union and the dismissed employees initiated a range of unfair labour practice complaints challenging the closing and the dismissals. Two of these complaints were eventually reviewed by the Supreme Court of Canada in 2009, and in the leading decision in Plourde v. Wal-Mart, the Court concluded that no remedy was available to the dismissed employees under certain sections of the Quebec Labour Code which provided for reinstatement where workers have been dismissed for exercising rights under the Code. This paper first examines Wal-Mart’s well-documented pattern of resistance to unionization. It then considers whether the majority’s position is defensible in the light of the wording of the Quebec statute, the Court’s previous commitment to the purposive interpretation of statutory unfair labour practice provisions, and its recent commitment to protecting collective bargaining as an important derivative of the guarantee of freedom of association in the Canadian Charter of Rights and Freedoms. Particular attention is paid to the origins of the idea, especially in the United States, that an employer has the right to close a business even in order to avoid a union, and to how that idea has been addressed by labour boards across Canada.

International Arbitration's Public Realm
Catherine A. Rogers
Domestic arbitration is under attack as permitting repeat players to evade mandatory statutory law, retarding legal developments, undermining democratic lawmaking, and ultimately imposing substantively biased outcomes on less sophisticated parties through contracts of adhesion. Collectively, these critiques of domestic arbitration could be interpreted as suggesting that domestic arbitration seeks to obviate or even subvert public interests and the public realm. The thesis of this chapter is that, in contrast to criticisms of domestic arbitration, international arbitration has a vibrant public realm. International arbitration has the potential to produce public goods and to go beyond simply resolving disputes, but to also promote international cooperation, transnational governance and the development of the international rule of law.

Consent of the Holder of the Bill of Lading to the Arbitration Clause by Reference
Nader M. Ibrahim
According to the author, the coming into force of the 1978 Hamburg Rules (November 1, 1992) in its contracting countries (the same will apply to the 2008 Rotterdam Rules) requires from the courts of these countries to revisit its case-law on the matter of incorporation of arbitration clauses into bills of lading, this particularly applies to Egypt. Two aspects should be changed; first, courts will no longer need to use conflict of laws to determine applicable law to the issue of the consent of the holder of the bill of lading with regard incorporation, since the Rules establishes an international rule directly applicable (i.e., international material rule); and second, the courts should check consent of the holder of the bill of lading, and not that of the consignor who made the original contractual relationship (usually a charterparty). Though there is no unified interpretation of the 1978 Hamburg Rules (and 2008 Rotterdam Rules) with regard the criterion of consent for the incorporation of arbitration into the bill of lading (Article 22(2) of the HgR; Article 76(2)(b) of the RR), the author interprets the Rules in favour of arbitration. According to him, it suffices that the holder of the bill of lading accepts the incorporation expressly or tacitly; however the author does not extend support to arbitration by denying jurisdiction to the courts to examine the consent in application of the ‘compétence de la compétence’ principle (opposite to the French Pella Lindos case-law, 2005-2006). Substantively, he supports the application of the English case-law and which distinguishes between specific and general references in determining such const (to the contrary to French case-law, namely the 1994 Osprey Stolt case). For the author, his lenient interpretation is supported by the procedural and substantive constrains invented by the 1978 Hamburg Rules (and later adopted by the 2008 Rotterdam Rules) and which protect the cargo interests’ shifting the arbitration clause from their risky foe to their best friend.

Sovereign Wealth Fund Liability - Private Investors Left Out in the Cold
Daniel E. Etlinger
Sovereign wealth funds have exploded in numbers, assets and clout in recent years. This accession has sparked a debate as to the political and economic status of these funds. However, this attention has not focused on sovereign wealth funds' liabilities. Specifically, there exist a myriad of issues surrounding recovery.

In the United States hedge funds, corporations, and other major players have contractually agreed on liability issues. Individuals, however, do not have the same protections and face hurdles damaging recovery chances. Both public and international safeguards seem adequate and point towards arbitration.

This paper argues, therefore, that the United States should adopt an approach to protect investors' rights and confidence in the market. Specifically, the United States should amend the Foreign Sovereign Immunities Act to address recovery problems.

Report to the Ministry of Labour and the Ministry for the Attorney General on Workplace Dispute Resolution
British Columbia Law Institute
In 2010, at the request of the provincial Ministry of Labour, the British Columbia Law Institute (BCLI) undertook a brief study of the merits of establishing a Workplace Tribunal for British Columbia. The Ministry provided the BCLI with a specific model for consideration. This proposed model left elements of the existing BC framework, such as the grievance arbitration system, unchanged, and required the creation of a new Workplace Services Branch with responsibilities including investigation, alternative dispute resolution and first line decision-making powers over employment standards complaints and human rights complaints originating in non-unionized workplaces. The model was centered around a new tribunal with jurisdiction over all employment-related disputes now adjudicated by the Labour Relations Board and the Employment Standards Tribunal, appeals from determinations by the Workplace Services Branch with respect to employment standards and human rights matters, as well as limited power to reconsider its own decisions on specified grounds. In effect, the new model would eliminate the Human Rights Tribunal’s jurisdiction over workplace-related complaints – about 60% of its current caseload.

The BCLI research project involved international comparative research into existing workplace dispute resolution systems, and a targeted consultation of BC stakeholders selected jointly by the Ministry and the BCLI. The 59-page final report of the BCLI contains: (1) an outline of the proposed model; (2) a brief overview of the existing workplace dispute resolution framework in BC; (3) a summary of comparative research (UK, Australia, New Zealand); (4) a summary of the consultation session feedback; and (5) a discussion of findings and conclusions including an assessment of the strengths and weaknesses of the proposed model.

Egyptian Court of Cassation, No. 595/63, February 28, 2006: Annulment of Arbitration Clause in a Bill of Lading Carrier-Consignee Relationship in application of the Constrains adopted by the Egyptian Maritime Trade Act 8 of 1990 after the 1978 Hamburg Rules: A Commentary (Arabic)
Nader M. Ibrahim
The Egyptian court of cassation is known for its pro-arbitration and elaborate case-law in matters of sea carriage of goods arbitration developed since the middle of last century, however the commentator criticizes its first application of the new constrains under the Egyptian Maritime Trade Act 8 of 1990 (Articles 246 and 247) adopted after the 1978 Hamburg Rules (Article 22) with regard validity of choice of place of arbitration. According to the commentator, the court should have directly applied the constrains of the 1978 Hamburg Rules with no need to refer to the Egyptian Maritime Act in application of the Egyptian Constitution (Article 151), and it should have validated the clause, giving the claimant the option to resort to arbitration in Alexandria, in addition to the option of London, mentioned in the clause. Annulment of the arbitration clause altogether is at least an adoption of a hard-line interpretation of the constrains that can be found to the contrary of other Hamburg Rules jurisdictions, a recent Jordanian case-law was used in comparison. The original commentary is in Arabic, an English translation is reproduced in the International Journal of Arab Arbitration.

The 2006 Procedural and Transparency-Related Amendments to the ICSID Arbitration Rules: Model Intentions, Moderate Proposals, and Modest Returns
Jason W. Yackee and Jarrod Wong
Investment Disputes (ICSID) amended a number of the ICSID’s Regulations and Rules. Because amendment of the ICSID Convention itself requires unanimous ratification by the state parties to the Convention, formal changes in the ICSID regime have historically taken place through amendments to the ICSID’s Regulations and Rules. This is because changes to the Regulations and Rules require only a vote either of a simple majority or two-thirds of the Council. Such Council action is thus the primary – and indeed, historically speaking, the exclusive – mechanism through which ICSID practice, as reflected in its Regulations and Rules, might be occasionally updated and modernized to reflect new realties on the ground (such as ICSID’s exploding caseload) and the changing sensibilities of ICSID’s end users – the state Parties to the Convention and the foreign investors who jointly elect to consent to ICSID arbitration rather than to arbitration before other institutions, such as the International Chamber of Commerce (ICC), or under other rules, such as the UNCITRAL Arbitration Rules.

In this chapter we review and critically evaluate those 2006 amendments to the ICSID Arbitration Rules that most directly impact the parties as opposed to the arbitrators (2006 Amendments). In Section A we analyze two procedural amendments. In particular, we look at changes to rule 41, which now allows for a "preliminary objection" to claims that "are manifestly without legal merit," and at changes to rule 39 that deal with "provisional measures." In Section B we analyze three amendments aimed at increasing the transparency of ICSID proceedings and at providing non-parties opportunities to influence tribunal decisions. We focus there on rule 32, governing the opening of hearings to the public; rule 37, which now provides for the possibility of submissions by "non-disputing parties" – for example, by "friends of the court," or "amici"; and rule 48, which governs publication of awards.

Our essential theme is that the 2006 Amendments are, at their core, modest, incremental and conservative. Our formal analysis and our examination of how the amended rules have been applied in practice suggest that the amendments are unlikely to greatly change ICSID practice. This is not necessarily a bad thing. An underlying current in ICSID commentary is the supposed need to make ICSID proceedings more like domestic litigation, with a correspondingly greater emphasis on using procedure to arrive at the better (or perhaps a more "correct") law-based resolution of competing claims from an adversarial perspective rather than on the mutually acceptable settlement of disputes. While any individual amendment, or at least its intended consequence, may be attractive in theory, the reflexive modeling of ICSID procedure after domestic litigation may yet impair the institution. As we note in the concluding section of the chapter, ICSID is not the only mechanism by which investor-state disputes might be settled or resolved, and if its process becomes too much like domestic litigation – overburdened by undesirable procedural hoops and hurdles, or perhaps even procedurally tilted in favor of state-respondents – there is a risk that investors will exercise more frequently their various outside options, electing to sue host countries not before ICSID, but before alternative institutions, like the ICC, or through ad hoc proceedings.

Foreign Investment Contracts: Unexplored Mechanisms of Environmental Governance
Kyla Tienhaara
What constitutes a rational decision? Much of our thinking about rational decision-making depends on traditional economic theories of maximized expected value. While these theories have demonstrated normative and even prescriptive value in general microeconomic contexts, they have spectacularly failed descriptively; they do a poor job of explaining how we make everyday decisions. Relatively new multidisciplinary efforts at the intersection of biology, behavioral economics, and evolutionary psychology have suggested predictable deviations from the standards of rational expectations based on decision rules that may have been adaptive, in the sense of conferring fitness advantages, in the environmental context in which our cognitive capacities evolved. While this predictability may offer hope of a descriptively accurate and prescriptively useful framework for examining human decision making, we argue that the human brain, rather than being a single decision making device, is a collection of such devices, each with different operating characteristics, and each highly domain specific, in the sense that their influence depends on adaptively relevant features of the current environment. Specifically, as regards decision making about agreements to arbitration, it is easy to imagine many such domain specific devices that may influence expected value and related preferences. Here, we concentrate on loss aversion and risk aversion, providing evidence that these mechanisms have separate biological substrates, and demonstrating that in plausible contexts of arbitration agreement decision-making, they may operate counter to one another. Divergent influence, along with domain specificity, produces an arbitration agreement decision-making system so complex as to challenge the prescriptive utility of behavioral theories, at least at current levels of scientific rigor.

Foreign Investment Contracts: Unexplored Mechanisms of Environmental Governance
Kyla Tienhaara
Scholars have observed that non-state actors are increasingly taking on new and significant roles in the development, implementation, and enforcement of international rules. New forms of private and hybrid (public-private) governance are emerging in a multitude of issue areas. However, one important governance mechanism significantly predates novel developments such as reporting and certification schemes and yet remains relatively unexplored in the global governance literature. Foreign investment contracts (FICs), also referred to as host government agreements or state contracts, are agreements made between a foreign investor (often a multinational corporation) and a government or state-owned entity acting on behalf of its government. FICs govern the relationship

between a private actor and a state, imposing rights and obligations on both parties. In many cases they supplant national regulation. They also have complicated legal interactions with certain intergovernmental agreements (e.g. bilateral investment treaties) and may affect the implementation of others (e.g. human rights treaties, multilateral environmental agreements). Disputes that arise under FICs are often delegated to international arbitration. These issues are discussed with reference to several FICs governing large-scale investments in developing and transition economies. A particular focus is given to the implications of these agreements for environmental governance in these states.

Third-Party Participation in Investment-Environment Disputes: Recent Developments
Kyla Tienhaara
This article outlines recent developments in investor – State dispute settlement related to the participation of third parties in arbitration. A particular focus is given to third party participation in disputes with a clear public interest based on the relevance of the cases to the protection of the environment, or sustainable development more generally. The benefits and drawbacks of third party participation and the relationship of participation to broader issues of transparency are also briefly discussed.

What You Don't Know Can Hurt You: Investor-State Disputes and the Protection of the Environment in Developing Countries
Kyla Tienhaara
Foreign direct investment (FDI) is the most important source of external finance in developing countries because it is more stable than portfolio investments and bank lending, and far more available than Official Development Assistance. In order to attract FDI, countries have increasingly offered certain forms of legal protection to foreign investors, including recourse to international arbitration mechanisms in the event of a dispute. These protections can be found in national laws and bilateral investment treaties (BITs) (now numbered at over 2300), as well as in numerous regional treaties and many state contracts. Recent years have witnessed an explosion of investor-state arbitration. Concerns have been raised, particularly in the wake of several controversial investor-state disputes, that in some instances the protection offered to investors may limit the ability of governments to regulate investment for the protection of the environment, natural resources and other social goods, and to ensure that foreign investment contributes to overall national development goals. Some authors have also suggested that the threat of an investor-state dispute could have a chilling effect on government policy, though they note that there is little evidence to substantiate such a claim.

This article is structured in the following manner: first, the particular difficulties that developing countries face as respondents in investor-state disputes will be discussed; second, the relationship between investment protection and environmental protection will be explained, with a focus on the issues of expropriation, stabilization, and compensation; third, the potential chilling effect of investor-state disputes will be assessed; and finally a case study from Indonesia will be presented. The main argument is that the lack of transparency in arbitration, and the lack of consistency of tribunal decisions, creates uncertainty for regulators. This uncertainty, when combined with the financial risk involved in proceeding to arbitration, may create situations in which the threat of an investment dispute is sufficient to convince a developing country government to reverse, amend or fail to enforce an environmental regulation. The article concludes that in the absence of a complete overhaul of the investment arbitration system, efforts should be focused on procedural reform as well as targeted capacity building and financial assistance for developing countries.

Alexandria Center for International Arbitration 2009 Arbitral Decisions: A Commentary (Arabic)
Nader M. Ibrahim
Alexandria Center for International Arbitration (ACIA) is a branch of the Cairo Regional Center for International Commercial Arbitration (CRCICA). ACIA was established in 1991 and now it is well set to the best service of international business related to Alexandria in Egypt. The commentator tries through the analysis of the 2009 ACIA Arbitral Decisions to build up leading arbitral case-law, to help develop good practice of international commercial arbitration in Egypt and the Arab World. The arbitral decisions relate to ACIA cases numbers 23/2008; 25/2009 and 26/2009. The decisions include: final and interim awards; properly speaking awards and procedural arbitral decisions; awards made by the full authority of the arbitral tribunal and an award by consent of the parties. The commentary is written in Arabic.

Designing Arbitration: Biological Substrates and Asymmetry in Risk and Reward
Gregory Todd Jones and Doug Yarn
What constitutes a rational decision? Much of our thinking about rational decision-making depends on traditional economic theories of maximized expected value. While these theories have demonstrated normative and even prescriptive value in general microeconomic contexts, they have spectacularly failed descriptively; they do a poor job of explaining how we make everyday decisions. Relatively new multidisciplinary efforts at the intersection of biology, behavioral economics, and evolutionary psychology have suggested predictable deviations from the standards of rational expectations based on decision rules that may have been adaptive, in the sense of conferring fitness advantages, in the environmental context in which our cognitive capacities evolved. While this predictability may offer hope of a descriptively accurate and prescriptively useful framework for examining human decision making, we argue that the human brain, rather than being a single decision making device, is a collection of such devices, each with different operating characteristics, and each highly domain specific, in the sense that their influence depends on adaptively relevant features of the current environment. Specifically, as regards decision making about agreements to arbitration, it is easy to imagine many such domain specific devices that may influence expected value and related preferences. Here, we concentrate on loss aversion and risk aversion, providing evidence that these mechanisms have separate biological substrates, and demonstrating that in plausible contexts of arbitration agreement decision-making, they may operate counter to one another. Divergent influence, along with domain specificity, produces an arbitration agreement decision-making system so complex as to challenge the prescriptive utility of behavioral theories, at least at current levels of scientific rigor.

Restating the U.S. Law of International Commercial Arbitration
George Bermann , Jack J. Coe Jr. , Christopher R. Drahozal and Catherine A. Rogers
In December 2007, the American Law Institute ("ALI") approved the development of a new Restatement, Third, of the U.S. Law of International Commercial Arbitration (the "Restatement"). On February 23, 2009, the Restaters and authors of this Essay presented a Preliminary Draft of a chapter of the Restatement (the "Draft") at an invitational meeting in New York. The Draft addresses Recognition and Enforcement of Arbitral Awards. This brief Essay provides some reflections of the Reporters from the process of producing and presenting the Draft. Subsequent Drafts have been produced and approved by the ALI.

Mineral Investment and the Regulation of the Environment in Developing Countries: Lessons from Ghana
Kyla Tienhaara
This article examines the relationship between foreign direct investment in the mineral sector and environmental regulation in developing countries. It argues that two major trends in global mineral investment have emerged in recent years: increased competition amongst developing countries to attract mineral investment, and the development and proliferation of a standard set of legal protections for mineral investors including access to international arbitration, prohibitions of expropriation without compensation, and commitments to stability of the regulatory regime. Both of these trends may have implications for environmental policy, which are examined in the paper both in general terms and in the context of a detailed case study concerning mineral exploitation in Ghana’s forest reserves.

East Asia’s Engagement with Cosmopolitan Ideals Under its Trade Treaty Dispute Provisions
C. L. Lim
An East Asian view about how trade dispute settlement systems should be designed is slowly emerging. This paper argues that democratically-inspired trade law scholarship and cultural explanations of the international law behaviour of the Southeast and Northeast Asian trading nations have failed to capture or prescribe the actual treaty behaviour of these nations. Instead, such behaviour has resulted in the emergence of two different treaty models for the peaceful settlement of trade disputes. This article traces the practices of the Association of Southeast Asian Nations (ASEAN), together with that of China, Korea, Japan, Australia, and New Zealand. We find two models of trade dispute settlement emerging. The first, which seems firmly established, may be found in ASEAN’s 2004 dispute settlement protocol and the regimes established under the China-ASEAN, Korea-ASEAN, Japan-ASEAN, and ASEAN-Australia-New Zealand FTAs. They all adopt a closed, sovereign-centric view of trade dispute settlement with no public access to the dispute proceedings, little or no disclosure of party submissions, and no consultation or access given to non-governmental organization (NGO) briefs. It is a model which may be criticized for its lack of transparency. However, a second model, based on the Trans-Pacific Strategic Economic Partnership Agreement, could in time become an alternative model for an Asia-Pacific-wide FTA (i.e. including the East Asian nations within it). It adopts a more open approach; one which better accommodates greater transparency in dispute proceedings. At least for now, the two models co-exist, obviating the need for East Asia’s legal policy-makers to choose a clear, dominant design for treaty-based trade dispute settlement in the region. But it also means that East Asia’s trading partners can influence East Asian nations, at least in those trade agreements which – like the Trans-Pacific Strategic Economic Partnership Agreement – involve negotiations with trans-continental partners.

Sovereign Defaults Before International Courts and Tribunals
Michael Waibel
As public debt soars, a new wave of sovereign defaults looms. International law on sovereign defaults is underdeveloped because States have largely refrained from adjudicating disputes arising out of public debt. The looming new wave of sovereign defaults is likely to shift dispute resolution away from national courts to international tribunals and transform the current regime for restructuring sovereign debt.

The history of adjudicating sovereign defaults internationally over the last 150 years shows how international tribunals balance creditor claims and sovereign capacity to pay across time. It offers a rich repository of experience for future cases: US state defaults, quasi-receiverships in the Dominican Republic and Ottoman Empire, the Venezuela Preferential Case, the Soviet repudiation in 1917, the League of Nations, the World War Foreign Debt Commission, Germany's 30-year restructuring after 1918 and ICSID arbitration on Argentina's default in 2001. The remarkable continuity in international practice and jurisprudence suggests avenues for building durable institutions capable of resolving future sovereign defaults.