In Safety National Casualty Corp. v. Certain Underwriters at Lloyd’s, London, 587 F.3d 714 (5th Cir. 2009), the Fifth Circuit addressed the following question: does the McCarran-Ferguson Act authorize state law prohibiting arbitration agreements in insurance contracts to reverse-preempt the New York Convention or the New York Convention’s implementing legislation (the Federal Arbitration Act, or…

Given that the arbitration clause is often relegated to the status of boiler-plate during contractual negotiations, it will come as no surprise that arbitration clauses may be inadequately drafted. While not every clause will be so deficient as to be ‘pathological’, many readers of this blog will have first-hand experience of dealing with the fall-out…

I am grateful to Professor Hess for his comments on my 3 March 2010 blog. It greatly contributes to advancing the debate. However, it also perfectly illustrates the difficulties of a proposition – the total or partial deletion of the arbitration exception in Regulation 44/2001 – that has not been sufficiently thought through. 1. Professor…

As I have noted earlier, there is a pitched battle between victims of Pan Am 73 terrorist hijacking over the distribution of treaty funds secured by the United States for American victims in a 2008 diplomatic settlement with Libya. The treaty and Executive Order stipulate that the money shall be distributed solely for the benefit…

Professor Hess is the author of the chapter of the Heidelberg Report on the interplay between arbitration and the Regulation 44/2001 (“the Regulation”). As such, and quite understandably, he actively promotes the suggestion that the arbitration exception should be deleted from the Regulation. The Heidelberg proposal has been followed by a Green Paper of the…

The Swiss Parliament is currently contemplating a reinforcement of the negative effect of the “competence-competence” principle in the Swiss legislation. According to a parliamentary initiative, a Swiss court that is seized on the merits and faced with a plea of lack of jurisdiction based on the existence of a valid arbitration agreement should review such…

In my last post I questioned whether investor misconduct (such as fraud, illegality and corruption) is invariably a jurisdictional issue.  This post focuses on the use of admissibility as a filtering mechanism to screen investor claims.  Although it has been suggested by at least one investment treaty tribunal that the concept of admissibility does not…

On 8 July 2009, the French Supreme Court rendered a decision confirming its position that the existence and the validity of an arbitration agreement should be determined primarily in light of the common intent of the parties (Société d’études et représentations navales et industrielles (SOERNI) et autres vs. Société Air Sea Broker limited (ASB), July…

The treatment of investor misconduct in investment treaty arbitration raises a series of complex issues.  Allegations of investor misconduct (such as fraud, illegality and corruption) can arise in the context of the making of an investment, during its operation, or in the investment treaty claim making process.   How should a tribunal address investor misconduct if…

In a recent decision dated 6 November 2009 (4A_358/2009), the Swiss Federal Supreme Court set aside an award by the Court of Arbitration for Sport (CAS) in Lausanne. The Supreme Court held that although its practice regarding the validity of arbitration agreements was generally liberal, in the present case the mere fact that the appellant…

When mapping the present trajectory of investment treaties, common themes include the “rebalancing” or “recalibration” of substantive disciplines, concepts that signal a retreat from the high-water mark of investor protection and a reorientation towards the preservation of regulatory space for host states. Generally, this phenomenon takes two forms: preparation of new model treaties (the prospective…

When I last visited South Africa in 2006, there was much talk of a potential bilateral investment treaty between SA and Zimbabwe. Three years later, as I make another visit to the region, the long-promised deal has just been sewn up. But, despite much clamouring for a protective pact – particularly from South Africans with…

The seat of an arbitration is a crucial factor. It determines the lex arbitri and the courts with supervisory jurisdiction over the arbitration. The important consequences of the seat require parties to choose the seat carefully. Cases where no seat is chosen by the parties are not uncommon. The English High Court in Shashoua v…

The Fifth Circuit earlier this month issued a highly unusual decision addressing whether state law could “reverse preempt” the New York Convention. As any student of international arbitration knows, state law occasionally attempts to limit the enforceability of arbitration agreements. Such a policy is preempted by the New York Convention as implemented by the Federal…

The Decision on Jurisdiction and Competence (19 June 2009) in Tza Yap Shum v. The Republic of Peru (ICSID Case No. ARB/07/6) is noteworthy as the first publicly available decision involving a claim by a Chinese investor under a Chinese investment treaty. The claim is a tangible reminder of the fact that Chinese investors are…

It is always satisfying for an academic when research interests contribute to teaching. So, as I began teaching first year contracts this year, I read the 8 September 2009 award in Azpetrol International Holdings B.V., Azpetrol Group B.V. and Azpetrol Oil Services Group B.V. v. The Republic of Azerbaijan, ICSID Case No. ARB/06/15 (Azpetrol) with…

Introduction If a party during arbitral proceedings withdraws its claim and the other party does not exercise its right to request an award in respect of the withdrawn claim, it has been suggested in Swedish legal doctrine that the parties, under certain circumstances, may have implicitly agreed that the arbitration agreement shall cease to be…

It is well accepted that state responsibility arises under international law for denial of justice. This might occur, for example, where a state court abuses its supervisory function over an international arbitration. In the investment treaty context, a denial of justice by host state courts would normally lead to a fairly straight forward breach of…

Conference: Fifty Years of Bilateral Investment Treaties December 1-3, 2009, Frankfurt Fifty years ago, Germany and the Islamic Republic of Pakistan concluded the first ever bilateral investment treaty. To mark (and celebrate) this important milestone in the development of investment protection, the German Society for the Promotion of Foreign Investments (GFA) and the German Federal…

In a judgment dated June 2, 2009, the Singapore Court of Appeal has upheld a “hybrid” arbitration clause which provided that all disputes should be resolved “by arbitration before the Singapore International Arbitration Centre in accordance with the Rules of Arbitration of the International Chamber of Commerce”. In the case of Insigma Technology Co Ltd…

In the recent decision in Youell v La Reunion Aerienne [2009] EWCA Civ 175 the English Court of Appeal applied the ECJ decision in West Tankers and upheld a Commercial Court decision holding that the mere fact that a contract contains an arbitration clause does not deprive the court of jurisdiction under the Brussels Regulation….

In submitting his instructions to the American delegation attending the 1907 Second Hague Conference, Secretary of State Elihu Root argued that the Permanent Court of Arbitration system needed radical improvement. In his instructions he wrote: There can be no doubt that the principal objection to arbitration rests, not upon the unwillingness of nations to submit…

When does a most-favoured-nation (MFN) treatment clause in an investment treaty confer jurisdiction on an investor-state arbitration tribunal? Most readers will be aware that in a series of decisions investment treaty tribunals have given very different responses to this question. On the one hand, a line of decisions suggests that, unless there is a express…

Under Swiss arbitration law, the validity of an arbitration agreement is in general subject to formal and substantive requirements (Article 178 of the PILA). With regard to the formal validity, Article 178(1) of the PILA requires the arbitration agreement to be in writing and allows the parties to use any means of communication which permits…