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Notes on the Persistent Latin American Countries’ Attitude Towards Investment Arbitration and ICSID

Investment arbitration is a crucial and sensitive dispute-resolution method, notably because the treatment given to foreign investment matters may materially affect the economic and social realities of a country or region, particularly those in development. In the last decade, however, as already reported and addressed in this blog by, among many others, Vanessa Giraud and Carlos González-Bueno, countries in Latin America — a true hot-spot for foreign investment1 — have been either ignoring, denouncing or resisting the International Centre for Settlement of Investment Disputes (“ICSID”), the dispute-resolution framework for investment protection enacted under the Washington Convent [...]

Impact of Public Interest on Investor-State Arbitration in Turkey

Although Turkey has ratified the ICSID Convention as early as in 1988, it was not until the recent decade that its domestic law recognized the possibility to resort to arbitration against the State. Until 2000s, disputes arising between a public authority and a private party were to be resolved in an appeal to administrative courts established under Turkish law. Following a series of tense discussions on the traditional role and function of the State, this trend came to an end with the amendments made to Articles 47, 125 and 155 of the Constitution of the Turkish Republic. (Law No: 4446/2, O.G., 14.08.1999, No. 21786)

During the amendment process of the Constitution, questions were raised as [...]

Is Investment Arbitration in Latin America in Crisis?

Over the years Latin American countries have played an increasingly relevant role in the International Centre for Settlement of Investment Disputes (the “ICSID”), with the highest proportion – 27% – of all cases handled by the Centre. Despite the high percentage these same countries have been increasingly expressing their dislike about having to resolve their disputes through the ICSID, notwithstanding the fact that in certain Latin American countries this hostility has steadily diminished through the adoption of protective Arbitration Laws or the signing of Bilateral Investment Treaties (BITs).

The reason for this resentment is mainly because some of these governments associate the ICS [...]

The dissenting opinion in BG v Argentina before the US Supreme Court

As reported earlier, the US Supreme Court has recently adjudicated on the issue of the standard of review in relation to arbitration agreements in international investment arbitration.

It is a fact that the majority of the Court has decided that deference should be given to arbitral tribunals to examine questions of procedural conditions, as it characterized the issue of litigation before the domestic courts of Argentina for 18 months before initiating arbitral proceedings. It seemed to the majority of the Court that the issue pertains to whether a duty to arbitrate arises, and not whether such a duty exists at all.

In determining the issue at hand, the majority found that the United Kingdo [...]

BITs as Contracts, and Lurking Consent Issues: BG Group v. Republic of Argentina

In BG Group v. Republic Argentina, a divided U.S. Supreme Court (“the Court”) continued to hold that arbitrators are the proper decision makers in gateway questions of arbitrability, not courts. The issue here concerned whether or not the local litigation requirement in the U.K-Argentina BIT was a procedural prerequisite to investor-state arbitration, or a necessary substantive step needed prior to the formation of an agreement to arbitrate. The Court’s decision also left open the possibility that clear language evidencing consent by a State could lead to a different outcome. Justice Sotomayor joined the majority, and wrote a separate concurrence regarding conditions of co [...]

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 [...]

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