Transcript Diapositiva 1

International Investment
Agreements: Recent Trends in
Investor-State Case Law and Treaty
Negotiation
Investor-State Dispute Settlement
(ISDS)
Roberto Echandi
Taipei, March, 2011
Types of Dispute Settlement
• State-to-State: applies only between State parties
to the Agreement.
(like the DSU in the WTO, the ASEAN DSB)
• Investor-to-State: allows private investors to
submit claims against a host State to international
arbitration
(eg. NAFTA and BITs)
• Most IIAs contain both types of mechanisms
Differences between dispute settlement
procedures
• DSU under WTO
• No access of private
parties to DSU
• No award of damages
• Bring the measure into
conformity with WTO
• Affected Member can
resort only to the
remedies available under
DSU
•Investor-to-State
• Direct access to
international arbitration
•Monetary compensation
•No requirement to change
policies
•If non-compliance: home
State can resort to interState procedures or to
international law remedies
State-to-State mechanism
• Consultations and negotiations (time-period)
• Ad-hoc arbitration
• Constitution of tribunal (standard)
• Applicable law (not always specified): provisions of the IIA and rules
and principles of international law
• Decision: final and binding
• Most IIAs are silent on the nature of remedies to be awarded by
tribunals and on the implementation of arbitral awards
• Special provisions for financial services disputes in some recent IIAs
Investor-to-State mechanism
•
Different Scope of Application
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All disputes related to an investment?
Only to violations leading to damage?
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Consultations and negotiations (time-period)
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Most IIAs do not require exhaustion of local remedies
•
In some, resort to local courts precludes subsequent submission to international
arbitration
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Direct resort to international arbitration (institutional or ad hoc):
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ICSID Convention
ICC, KLC or the Stockholm Chamber of Commerce
UNCITRAL Arbitration Rules
Arbitral awards: final and binding, but require exequatur (except in the case of
ICSID awards)
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ICSID Members shall recognize and enforce the awards in their territory as if they were final
judgements of a State court
ISDS: Seven sequential phases
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Preparation of the case
Start of the arbitration process
The written submissions
The hearing
Post-hearing activity
Awards
Execution of awards
ISDS: Preparation of the case
• Beginning
– Investor: dispute arises
– State: communication of potential dispute
• Initial case assessment
– Each party conducts a legal and factual assessment of the case
– Documents collected, translated, witnesses selected and
interviewed, chronology of events prepared and facts analyzed in
terms of the substantive and jurisdictional standards of the IIA
– Decision as to propose multiple phases for jurisdiction, liability and
damages and determination of specific procedures to negotiate with
other party and to propose to the tribunal
ISDS: Start of the Arbitration Process
• Request for arbitration
• See Treaty requirements
– Substantive
• Violation of the IIA and damages in some agreements
– Procedural
• Consultations, cool-off periods and notice of intent
• UNCITRAL
– notice of arbitration (not definitive and complete statement of claims,
that is made in the statement of claim)
– UNCITRAL arbitrations begin as Notice of Arbitration is received by
the respondent
ISDS: Start of the Arbitration Process
• Selection of arbitrators
– IIAs tend to contain specific procedures for this
– Claimant names first arbitrator, respondent names the second, and
then either the parties or the two arbitrators agree on a third and
presiding arbitrator. (UNCITRAL Art.7)
– If tribunal is not constituted within a given period, designated
authority may appoint remaining arbitrator or arbitrators.
(UNCITRAL Art.7)
• Non-legal considerations for selection
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Experience
Attitudes
Specialized knowledge
Persuasion to other members of the tribunal
ISDS: Start of the Arbitration Process
• First session with the Tribunal
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Often 6-12 weeks after tribunal is constituted
Session where procedure for arbitration is organized
Arbitration: flexible procedure, take into account strategic considerations
Single or Multiple phase cases
• Jurisdiction and admissibility of the claim
• Liability
• Damages
• Issues often discussed at the first session
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Language of proceedings
Place of arbitration
Confidentiality of information related to the arbitration
Scheduling of written submissions
Collection and disclosure of documentary evidence (in some cases period of
disclosure before first written submissions)
– Organization of testimonial evidence: both before and after evidentiary hearing
• After first session, tribunals enters a procedural order
ISDS: Written Submissions
• Often four substantial pleadings:
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Memorial
Counter-memorial
Reply
Rejoinder
• Memorial and counter-memorial
– In practice present the entirety of the arguments and evidence
offered by each party to support of its case
• Reply and Rejoinder
– Responsive pleadings, limited in content to responding to the points
and evidence offered in the immediately preceding pleading
ISDS: The Hearing
• Purpose
– Engage the tribunal with respect to the essential issues in the
case and for witnesses to be cross-examined in a manner that
tests the accuracy of their testimony
– Multiday affairs: average 3-5 days
• Testimonies
– Examination tends to focus on cross-examination, no repetition of
written testimony
• Interaction between Tribunal and parties
– Questions about fact and arguments
ISDS: Post Hearing Activity
• Deliberations and prepare decision or award
• Often tribunal requests additional submissions from the
parties on a issues raised at the hearing, or additional
evidence on a particular point.
• Arbitration rules provide that tribunals have the authority
after the hearing to close proceedings to further
submissions (UNCITRAL Art.29)
• Time: often an award on jurisdiction may take 6 months and
one year for the merits.
Awards
• Awards are final, binding and not subject to appeal.
(UNCITRAL Art.32)
• Awards including monetary relief may be enforced against
available assests through national court systems.
• Loosing party:
– Can ask the same tribunal to correct the decision on limited
grounds
– Ask a national court to «set aside» the award
• Winning party:
– Seek enforcement of the award
Enforcement of Awards
• In ISDS practice, in the overwhelming majority of cases
parties voluntarily comply with arbitration awards
• Very few cases where succesful claimants have had to
resort to national courts for judicial enforcement of their
awards.
• Enforcement possibilities
– ICSID Convention
– Non-ICSID ad-hoc arbitrations, UNCITRAL, ICC, Stockholm
Chamber of Commerce or other arbitration centres
• Under customary international law, no country is obliged to
recognize foreign arbitral awards
• Key role of the 1958 Convention on the Recognition and
Enforcement of Foreign Arbitratl Awards (New York
Convention)
New York Convention
• Requirement of existence of an «agreement in writing»
expressing consent to arbitration between the parties
• Express of consent disassociated in time
– Compulsory juridiction clauses in IIAs
– Mutual consent deemed to exist when investor submits the claim to
arbitration
• Core obligation of the New York Convention
– Obligation to recognize and enforce arbitral awards which do not
suffer from some grave defects as outlined in the Convention itself.
New York Convention: Grounds for
not recognizing a foreign award
• Invalidity of arbitration agreement
• Lack of notice or violation of due process
• Excess of power by arbitral tribunal
• Irregular composition of arbitral tribunal
• Award has not yet become binding
• If subject matter of the dispute is considered «not capable
of settlement by arbitration», or if it would be contrary to the
public policy of the country of enforcement.
Execution of Awards and Rules on State
immunity
• New York Convention regulates recognition and enforcement in general.
• It does not exclude obstacles to enforcement measures as a result of
general international law, such as rules on State immunity.
• Rules on enforcement immunity applicable in the forum State where an
award is sought to be enforced will ultimately decide whether enforcement
through execution of assets of the State will be possible or not
– National rules on enforcement immunity are often contained in specific
immunity legislation (U.S., UK, Canada & Australia)
– International Agreements, i.e. European Convention on State Immunity
• Assests immune from enforcement
– Property serving governmental purposes, as opposed to property serving
commercial purposes.
– Sedelmayer vs. Russia
• Other enforcement possibility: diplomatic protection under applicable IIA
Execution of Awards
• Other execution mechanisms
• Diplomatic protection
– State-to-State arbitration under IIA
– Case under ICJ
– Other political measures
• GSP
• World Bank
• Warnings
Thank you for your attention
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