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United States brandishes threat of renewed state-to-state arbitration unless Guatemala ramps up labour rights improvements

The Office of the United States Trade Representative has issued another update on its long-running dispute with Guatemala over lax protection of worker rights in the latter country.

Readers of this blog may recall that the United States initiated a state-to-state arbitration against Guatemala in 2011, invoking for the first time a fast-track arbitration mechanism contained in the U.S.-Central America Free Trade Agreement (CAFTA).

While requesting arbitration, the United States seemed not to have pushed for the constitution of a tribunal, preferring instead to use the arbitration to pressure Guatemala to agree to a series of labour rights improvements.

Indeed, in April of this year, the USTR [...]

El Salvador, Towards An Arbitration Friendly Jurisdiction

and Humberto Sáenz-Marinero, Sáenz & Asociados

A few weeks ago, we read a post on Kluwer Arbitration Blog about El Salvador by Ricardo Cevallos. The title was “El Salvador becomes an anti-arbitration jurisdiction?” According to the post, El Salvador is becoming an anti-arbitration jurisdiction. We respectfully disagree with the author’s conclusion. It is true that, since 2009, the Arbitration Law of El Salvador was amended and now the arbitral awards can be subject to Appeal before the courts. However, there are still many arbitration proceedings (national and international) taking place in El Salvador, and the country is making great efforts to become a more arbitration friendly jur [...]

El Salvador becomes an anti-arbitration jurisdiction?

A brief history
Arbitration has been a part of the laws of El Salvador for more than a hundred years. The Constitution of 1983 clearly states in Article 23 that every citizen of the country has the right to terminate his or her civil or commercial matters through arbitration.

July 2002 marked a dramatic change in the arbitration landscape, when the Salvadoran Congress passed the Mediation, Conciliation and Arbitration Law (Ley de Mediacion, Conciliacion y Arbitraje or LMCA). Until then, arbitration was used more commonly among international companies doing business in the country or most commonly between companies doing business with the central government. The law was greatly modeled afte [...]

Resolution of U.S.-Guatemala Dispute May Obviate CAFTA Labor Arbitration

It looks like the first state-to-state arbitration under the U.S.-Central America Free Trade Agreement (CAFTA) may have fizzled out.

In August of 2011, I reported in this space that the United States of America was initiating arbitration against the Republic of Guatemala.

The U.S.A. turned to arbitration after determining that Guatemala was failing to enforce its own labor laws, thus running afoul of pledges made in the CAFTA itself.

In principle, the U.S.A. v. Guatemala arbitration should have played out rapidly, with Chapter 20 of the CAFTA providing for a fast-track arbitration process that is geared to take a mere 8 months to determine whether a government is not complying with its CAFTA [...]

Brewing Storm over ISDR Clouds: Trans-Pacific Partnership Talks – Part II

As described in Part 1 of this post, the mounting debate about investor-state dispute resolution (ISDR) has crescendoed in the current Trans-Pacific Partnership (TPP) negotiations. There are at least two “schools” of concern with ISDR, both of them voiced inside and outside the TPP context.

Threats to Public Interest Policy

For a growing array of domestic policymakers, civil society organizations and people impacted by ISDR decisions, ISDR is viewed as a threat to vast swaths of public interest policy achieved through decades of struggle, and to the prospect of further advances. Either by winning an investor-state attack and collecting millions in compensation, or by preemptively chillin [...]

Fast-track arbitrations can be slow to get rolling

It looks like The Amazing Kreskin can rest easy.

Last August, I tried my hand at forecasting the future, and I’m not sure I brought credit to the field of prognostication.

In my earlier blog post, I’d commented on a novel state-to-state arbitration initiated by the United States against the Republic of Guatemala.

(The U.S. accuses Guatemala of failing to enforce its own labour laws, thus placing the latter country in possible violation of its obligations under the labour chapter of the U.S.-Central American Free Trade Agreement (CAFTA).)

After looking at the fast-track arbitration sketched out in CAFTA Chapter 20, I predicted that the arbitral proceeding might be wrapped up in as little [...]

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