In 2006, the ICSID Arbitration Rules were amended to allow a party to make a preliminary objection to claims that are “manifestly without legal merit.” The procedure for this objection is embodied in Rule 41(5). An ICSID Tribunal composed of Dr. Briner (President), Professor Stern and Professor Böckstiegel, in Brandes Investment Partners, LP v. Venezuela…
In modern treaties, a fair and equitable treatment standard (hereinafter “FaETS”) is to be provided to foreign investors and investments by the host state. In the past, the FaETS had been viewed as merely a sub-category of the international minimum standard. However, recent practice and international case law has started taking the view that the…
The recent ICSID arbitration award in Europe Cement Investment & Trade S.A. v. Turkey raise interesting questions of how to regulate fraud in international arbitration. Here is the key holding of the tribunal with respect to fraud regarding an alleged ownership interest in the relevant companies.
For many years, no broad international consensus emerged on the existing protection for foreign investors as a result of differences of approaches between developed and developing States. As a result of this perceived lack of established customary principles, States concluded thousands of bilateral investment treaties in the 1990s for the promotion and the protection of…
One set of international arbitrations which don’t get enough attention are the series of claims mounted under NAFTA Chapter 11 by US investors in the Mexican sweetener industry. A group of agri-business heavyweights, including Cargill, Archer Daniels Midland, Tate & Lyle have all invoked NAFTA’s investment protections in order to challenge a Mexican tax levied…
One can observe two rather opposing trends. On the one hand there is a steady (and more recently significant) increase in the number of arbitration cases; one the other hand there is a rather systematic criticism expressed by certain voices, predominately in the corporate world.Most well established institutions have recorded a 10% increase in their…
In the latest twist in the ongoing war between foreign investors and the Republic of Argentina, a panel at the International centre for Settlement of Investment Disputes (ICSID) has lifted a stay on a $128 Million arbitral award. US energy company, Sempra, won its arbitration with Argentina in 2007, when arbitrators ruled that measures taken…
Article 25 of the ICSID Convention, which draws the outer limits for the exercise of ICSID jurisdiction, does not define the concepts of “nationality” and “investment.” Aaron Broches, the principal author of the Convention, explains that this reflects a deliberate decision by the drafters to leave the choice of what constitutes an investment and who…
As previously reported, in a decision rendered on 15 April 2009, an ICSID Tribunal declined jurisdiction to hear claims submitted by Phoenix Action Ltd (“Phoenix”) against the Czech Republic. Phoenix, an Israeli company, purchased two Czech companies, Benet Praha and Benet Group, in 2002 while these two companies were involved in ongoing legal disputes. The…
Following on from Patrick Dumberry’s post, I wanted to offer some information on another pending investor-state dispute where a version of the persistent objector argument has arisen. There is an ongoing discussion in the Grand River Enterprises v. USA NAFTA arbitration, as to whether there is an “emerging” customary international law norm which requires States…
The question of the existence of legal protection for foreign investors under customary international law has always been controversial. States have indeed entered into BITs precisely because of the lack of development of relevant custom rules in the field of international investment law. It is nonetheless largely agreed today that some rules of customary law…
After several months of increasingly angry political rhetoric, and a formal green-light from the country’s Legislature, Ecuadorian President Rafael Correa has made his country the second state to denounce the ICSID Convention in recent years. It’s no secret that ICSID has been singled out for particular opprobrium from some governments in Latin America, and it…
In a decision rendered on April 15, 2009, a three-member tribunal composed of Brigitte Stern as chairperson, Andreas Bucher and Juan Fernandez-Armesto rejected Phoenix Action Ltd’s (“Phoenix”) claims against the Czech Republic. By way of background, Phoenix is an Israeli company which purchased two Czech companies, Benet Praha (“BP”) and Benet Group (“BG”), in 2002…
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…
Over on the always-interesting International Economic Law and Policy Blog, Simon Lester has been musing about the recent controversy over internet-filtering software in China. As has been widely reported in the financial press, computer makers are facing demands to install internet-filtering software (ostensibly to combat the problem of Chinese internet users being exposed to online…
On May 4, 2009, the Obama administration proposed far-reaching measures designed to curb the tax benefits enjoyed by U.S.-based multinational corporations with offshore operations. Based on 2004 figures, those corporations are said to enjoy an effective tax rate of about 2.3% on their foreign revenue. The measures seek to end the practice of U.S. multinationals…
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…
At first glance, the Alien Torts Statute (ATS) doesn’t have a lot to do with arbitration – which may explain why Roger Alford wrote about it over on Opinio Juris, rather than here. (The ATS permits non US nationals to bring claims in the U.S. Federal Courts for alleged breach of the law of nations,…
How should tribunals apply investment treaties to measures adopted during times of crisis? Recognizing crisis as the point at which foreign investors become most vulnerable (and therefore require the most protection), should tribunals guard against any temptation to dilute the rigor of external discipline? Conversely, recognizing crisis as the point at which states can lay…
In recent months, there have been a steady barrage of media reports about so-called “land grabs”. Many believe that we are seeing a new “Scramble for Africa”, as food-scarce countries and private investors alike jostle to lease or purchase vast swathes of agricultural land abroad. There are multiple drivers for such deals: including the perennial…
“A systemic underestimation of the risks associated with bilateral investment treaties”. That’s how Alvaro Galindo put it. Dr. Galindo, is the Ecuadorian lawyer charged with coordinating that country’s defence of a bevy of international arbitration claims. Last week, speaking in his private capacity, he told a conference of the British Institute for International and Comparative…
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…
We at Kluwer Arbitration blog are most pleased to welcome Andrew Newcombe as our newest contributor. Andrew teaches commercial, international economic and arbitration law at the Faculty of Law, University of Victoria, Canada. His research and writing focuses primarily on investment treaty law and arbitration. In 2004, he established investment treaty arbitration, a resource website…
Germany has introduced an amendment to its Foreign Trade and Payments Act. It is a direct response to increased activities and acquisitions by sovereign wealth funds (SWFs), as they are often perceived to pursue economic as well as political aims. Despite this origin, the legislation does not only apply to SWFs. Instead, it allows the…
