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Investment Arbitration: Legal Implications of the Threat to Expropriate

and Oleg Temnikov

I. Foreword
At the end of 2013, the Financial Times reported that a referendum will be held in Berlin on the question whether the State shall take over power supply from the hands of Vattenfall. We use this as an occasion to examine the legal implications in the field of investment arbitration of the threat to expropriate.

II. The views “against” the unlawfulness of a threatened expropriation
In the first place, it must be noted that the existing BITs do not, in general, sanction threats to expropriation, but only the completed act. There are, for example, BITs which provide that “compensation shall be equivalent to the value of the expropriated investment immediate [...]

“Between Iraq and a Hard Place”: The problem of non-ratification of the New York Convention in Baghdad

Setting the scene

Iraq currently ranks with Libya and Yemen amongst those recalcitrant Arab states that have thus far failed to ratify the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention or Convention). This state of affairs and the inadequacy of the country’s domestic and international arbitration legal regime have been addressed numerous times by academics, politicians and lawyers over the last thirty years.

However, the subject of Iraq’s non-ratification of the Convention has recently achieved a heightened significance, for two reasons:

(1) This month, it is understood that on-site workshops to train senior members o [...]

The invocation of “denial of benefits clauses”: when and how?

By Carmen Núñez-Lagos and Javier García Olmedo

In an award rendered on 31 January 2014, an arbitral tribunal constituted under the UNCITRAL Rules declined jurisdiction over the claims brought by one of two claimants against the Plurinational State of Bolivia on the basis of the application of a denial of benefits clause in the US-Bolivia BIT.1

The two claimants were Rurelec Plc, a company constituted under the laws of England & Wales, and its affiliate Guaracachi América Inc. (GAI), a company incorporated in the United States. The dispute concerned the alleged violation by Bolivia of certain provisions of the US-Bolivia BIT and the UK-Bolivia BIT (the BIT).

Among the various jurisdictio [...]

Potential Investor-State Dispute Settlement Provisions in Trans-Pacific Partnership Agreement – A Change in Policy for Australia?

By Beth Cubitt and Tom French

The proposed Trans-Pacific Partnership Agreement (TPPA) – a multi-lateral agreement proposed between a number of countries, currently including Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States and Vietnam (although it is hoped to be an open platform welcoming other countries to participate) – is currently the subject of much debate. TPPA countries will potentially account for approximately 39% of the world’s GDP, with Australia’s portion of trade representing AUD215 million. By 2025, the TPPA is expected to account for USD233 billion in trade per year, and is said to set the “economic architecture” for the region.
But will the TPPA contain i [...]

Proving Corruption in Arbitration: Lessons to be Learned from Metal-Tech v. Republic of Uzbekistan

Factual background

On 4 October 2013 the Tribunal constituted under Metal-Tech Ltd.’s claim against Republic of Uzbekistan (G. Kauffman-Kohler, C. von Wobeser, J. Townsend) issued the award on jurisdiction in the ICSID case ARB/10/03. The peculiar factual background of the case has been previously discussed here.

The approach taken by the Tribunal in this case deserves closer attention as this is one of the few where allegations of corruption managed to have decisive influence on the outcome of the case, unlike most of the cases where bribery considerations are usually ruled out as inconclusive and unproven, although discussed in the award.

Establishing corruption

A number of tribunals ha [...]

Energy & Mining Disputes in Latin America: Trends in Arbitration

The numbers of energy and mining related disputes in Latin America constitute 67 out of 162 or 41% of the total ICSID cases within the region. In most of these disputes the respondents are Argentina, Bolivia, Ecuador or Venezuela, which represent 52 out of 67 or 78% of the total energy and mining ICSID cases in Latin America. With the exception of Argentina, the rest of the above-mentioned countries have withdrawn from the ICSID Convention in 2007, 2010, and 2012, respectively, while of 105 ICSID total related cases submitted against them 52 or 50% are energy and mining related.

The majority of investment treaties offer claimants the option to have different arbitration fora. For Bolivia, Ec [...]

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