The Concept of Good Faith in International Investment Disputes – The Arbitrator’s Dilemma
The concept of good faith has been a subject of perennial controversy since it was derived from the Roman legal equivalent ‘bonas fides’. Juristic views on and the legal conceptualization of the idea of good faith may often vary across the cultural divides and legal traditions. At a higher level of abstraction there may be a semblance of understanding that it is a moral principle and is reflective of all good senses such as honesty, good conscience, fairness, equity, reasonableness, equitable dealing or fair dealing, etc., but its application may cause the divergence of opinions. This has caused some uncertainty about the nature of the concept itself and the consequent unpredictability o [...]
The high-water mark of an umbrella clause: SGS v Paraguay
In a recent award that arguably represents a high-water mark for the operation of an umbrella clause in ICSID jurisprudence thus far, a tribunal comprising Stanimir A. Alexandrov (as President), Donald Francis Donovan and Pablo Garcia Mexia held Paraguay liable to SGS Société Générale de Surveillance S.A. (“SGS”) for failing to pay for services rendered. This case is noteworthy for practitioners because it demonstrates how an investor can, in effect, have its claims arising out of an investment contract readily resolved before a treaty forum through the use of an umbrella clause in a bilateral investment treaty (“BIT”).
I. Background
The facts of the case are similar to previous [...]
Keeping Up with the Notion of Investment: the Case of the Energy Charter Treaty
- By Crina Baltag
The notion of ‘investment’ has been one of the most controversial issues in arbitral proceedings instituted under the ICSID Convention. The award rendered by the UNCITRAL arbitral tribunal in Romak v. Uzbekistan has brought the issue outside of the ICSID context and concluded that, despite the broad definitions of ‘investment’ in Bilateral Investment Treaties (BITs), the term ‘investment’ has an inherent meaning that cannot be ignored. Although not as disputed as the notion of ‘investment’ within the ICSID Convention, the meaning of ‘Investment’ under the Energy Charter Treaty (ECT) is still open to debate.
In Petrobart v. Kyrgyzstan (the ECT-based claim), the tribunal de [...]
Arbitration in Times of Crisis
International arbitration has long played an important role in resolving disputes that arise out of political and economic crises. “Arbitration in Times of Crisis” is the theme of the 9th Annual ITA-ASIL Conference on 28 March 2012 in Washington, D.C. (see program). The conference will focus on lessons from the past use of arbitral mechanisms in times of crisis and an evaluation of 10 years of investor-state arbitration arising from the Argentine economic crisis.
From the Jay Treaty (1794) to the current investor-state arbitration regime under investment treaties, states have used international arbitral mechanisms to resolve complex disputes involving key areas of nati [...]
Constitutionalising Investor Rights
During the course of a chat with Prof. Roger Alford over lunch in Notre Dame I realized the “uniqueness” of Article 157 of the Sri Lankan constitution. It defines the status of Bilateral Investment Protection Treaties (BITS) within the Sri Lankan constitutional order. Article 157 of the Sri Lankan constitution states as follows:
“Where Parliament by resolution passed by not less than two-thirds of the whole number of Members of Parliament (including those not present) voting in its favour approves as being essential for the development of the national economy, any Treaty or Agreement between the Government of Sri Lanka and the Government of any foreign State for the promotion and prote [...]
Chevron Ecuador Dispute Heats Up
Last week was a blockbuster one in the ongoing battle between Chevron and Ecuador. On Wednesday, the arbitral tribunal adjudicating Chevron’s BIT claim issued an Interim Award ordering Ecuador “to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within or without Ecuador of any judgment against [Chevron] in the Lago Agrio Case.”
The tribunal was at pains to emphasize the interim award was final and binding under Article 32 of the UNCITRAL Rules, which means that Chevron could pursue recognition and enforcement of the award in jurisdictions around the world. It could do so offensively by seeking declaratory relief in Ecuador (or elsewher [...]
