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“Investment Arbitration Is Now On Broadway, And The Critics Are Not Being Kind”

That was the assessment of Constantine Partasides QC, founding partner of Three Crowns, during his keynote address to the joint ITA-IEL conference. According to Mr. Partasides, there is a developing consensus among states that it is acceptable, and even virtuous, to challenge investor-state arbitration as an infringement on the rights of the public to pass laws through their democratically-elected representatives. Thus it has become de rigueur for a sovereign to challenge and obstruct the arbitral process, through challenges to the appointed arbitrators, jurisdictional objections, and post-award challenges to awards and their enforcement. Resistance to investor-state arbitration is increa [...]

A blast from the past… the ‘unified Arab investment treaty’ and finality of arbitration awards

In one of the very rare decisions issued by courts in the Arab world applying the provisions of the Unified Agreement for the Investment of Arab Capital in the Arab States (the “UAIAC”), the Cairo Court of Appeal has revived in its decision dated February 5, 2014, the principle of finality of arbitration awards, by which it rejected a claim for annulment of a UAIAC award, filed by the State of Libya (first claimant to annulment), the Libyan ministries of Economy and Finance (second and third claimants) and the General Authority for encouraging investments (fourth claimant), against a kuwaiti investor, Al-Kharafi & Sons Co. (case n° 39, judicial year 130/2014). The ratio decidendi of the cou [...]

Juries for Foreign Investment Disputes

Paraphrasing Churchill, investment arbitration is the worst form of foreign investment dispute resolution, except for all the others. Post-Suez, governments are more civilised than to employ gunboat diplomacy for their own investors, and local courts are inherently partial. Achieving neutrality is the objective, and the only means: investment arbitration. This is the conventional wisdom for rationalising the use of arbitration for foreign investment disputes.

Investment arbitration is imperfect. An oft-cited cause of this imperfection is doctrinal inconsistency, with an ICSID appellate body being trumpeted as the antidote. Partiality of arbitrators, propensity to annul decisions, and la [...]

Interpreting Investment Treaties

One of the recurrent controversial issues in the investment arbitration practice relates to the application of the general rule of treaty interpretation of the Vienna Convention on the Law of Treaties in the interpretation of the provisions of the ICSID Convention and of investment treaties in general.

Thomas Wälde in one of his last writings pointed out that “[t]ribunals often do not practise what they preach; reference to the Vienna Rules is now mandatory, but such reference does not mean the Rules are taken and applied seriously” and “it is difficult to find a tribunal which formally and properly applied the Vienna Rules step by step” (Interpreting Investment Treaties: Experience [...]

Making a Muddle of Moral Damages

Let’s get this straight: When awarded to persons, including foreign investors, moral damages are compensatory in nature. They are not discretionary. They are not symbolic. They are not exemplary. They are not punitive. Rather, as the commentary to the ILC Draft Articles 36 and 37 on State Responsibility notes, “[c]ompensable personal injury encompasses not only associated material losses . . . but also non-material damage . . . (sometimes, although not universally referred to as ‘moral damage’).” Put differently, “[m]aterial and moral damage resulting from an internationally wrongful act will normally be financially assessable and hence covered by the remedy of compensation.” A [...]

ISDS: which way will the scales TTIP?

On 29 September 2014, the European Commission (EC) and the US initiated the seventh round of negotiations for the conclusion of the Transatlantic Trade and Investment Partnership (the TTIP).1 The negotiations began in July 2013 after the EC received its mandate from the EU Member States. According to the EC, the TTIP aims to remove the existent trade barriers between the EU and the US in a wide range of economic sectors as well as to look at possibilities of converging regulations, opening market for services, public procurement and investment.2

One of the most controversial questions in relation to the TTIP has been whether to include an Investor-State Dispute Settlement (ISDS) provision. [...]

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