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…
In this case, the Swiss Federal Supreme Court decided that the right to be heard (art. 182 para. 3 of the Swiss Federal Act on International Private Law, “PILA”) does not encompass a right of the parties to be specifically heard with regard to the legal qualification of the facts they had introduced into the…
A recent decision by the Eleventh Circuit Court of Appeals has attracted attention within the arbitration community as it puts into question the enforceability in the United States of international arbitration agreements where foreign (non-US) law is the governing substantive law. The Eleventh Circuit also mistakenly references Article V of the New York Convention in…
The English Court of Appeal recently upheld a first instance decision to refuse enforcement of a US$20m New York Convention award in Dallah Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755, on the basis that the arbitration agreement was ‘not valid’ for the purposes 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…
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…
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…
In the same arbitration proceedings, the Swiss Federal Supreme Court had to decide twice -albeit based on different grounds – whether facts discovered after the issue of an award (so called “nova”) may entail the amendment of the rendered award. In these decisions the Swiss Federal Supreme Court had the opportunity to restate its rigorous…
I have been reading with interest the ILA’s Final Report and Recommendation on Res Judicata and Arbitration adopted at the 2006 Toronto conference. Recommendation 2 provides that: The conclusive and preclusive effects of arbitral awards in further arbitral proceedings set forth below need not necessarily be governed by national law and may be governed by…
Given the fundamental nature of the exceptions to the recognition and enforcement under the New York Convention (the “Convention”) it should not be forgotten that their application is in fact discretionary: Article V.1 of the Convention states that “Recognition and enforcement of the award may be refused at the request of the party against whom…
As arbitration continues its upward trajectory in the world of dispute resolution, eyes have remained fixed on legal developments in China. With the significant growth of international transactions involving Chinese parties, there has been an equally staggering rise in the number of disputes. In China, arbitration has quickly become an accepted method of resolving international…
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…
One of the benefits of international commercial arbitration is the ability to resolve disputes between the parties in a single, neutral forum that gives neither party a “home court advantage.” After a dispute arises, however, litigious parties sometimes engage in tactical maneuvering aimed at circumventing the parties’ agreement to arbitrate. A recent US case gives…
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…
As international arbitration becomes ever more sophisticated and complex, one wonders whether it will continue to have the institutional capacity to address its protean tasks. Claims in the billions of dollars are now common. Thousands of individuals are affected by the outcome of a single arbitration decision. And the complexity of the cases is such…
Under the applicable Swiss law, fees and charges arising in connection with the exercise of functions of arbitration are exempted from VAT. Specifically, the respective section of Article 23(1) of the Swiss Federal Act of 2 Sept. 1999 on Value Added Tax (“VATL”) reads as follows: “[…] For services which they perform in sovereign right,…
