Posts in the category ‘Arbitration’

The Changing Landscape of International Law: Investor-State Arbitration and the Case of Pac Rim Cayman LLC v. El Salvador

Traditionally, the only actors in the realm of public international law were sovereign states. In the late 1940s, the group of actors was widened to include international organizations, which were also deemed to possess legal personality by the International Court of Justice’s (ICJ) ruling in the Reparations Case. [1] With the dawn of investor-state arbitration, the number of claimants able to assert rights based on language contained in international treaties has expanded exponentially.

Investor-state disputes present essentially a hybrid between public international law and traditional fields of private law, such as contract and property. Relationships between investors and sovereign states come into existence when two or more states agree to a bilateral (or multilateral) investment treaty (BIT), or the provisions which are normally included in a BIT form part of a free trade agreement (FTA). Chapter eleven of the North American Free Trade Agreement (NAFTA), for instance, contains the relevant provisions concerning investor-state disputes in the context of North American investors operating in another NAFTA state. [2] The provisions in NAFTA essentially allow an investor to sue a sovereign state through the International Centre for Settlement of Investment Disputes (ICSID), a branch of the World Bank based in Washington D.C., in the event that its property was expropriated. BITs are ostensibly beneficial to both investors and the signatory states. Investors gain from the legal certainty which the BIT provides in…

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Transparency, internet and the international investment law

A ‘small history’ was recently made in the field of international investment law when, for the first time ever, the proceedings of a certain investor-state dispute (Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12) – Public Hearing (“Pac Rim Cayman dispute”)) were webcasted live to the general public.[1] These webcasts are now available on the International Centre for Settlement of Investment Disputes’ (ICSID) website, where visitors can entertain themselves with over 12 hours of recorded legal proceedings (including recess).[2] It is asserted in this entry that by using the online webcast technology, the parties to the Pac Rim Cayman dispute introduced a new standard of transparency into the field of international investment law. Whether this standard will be taken up by future disputants remains to be seen.

The investor-state dispute resolution process has been a long standing target for critics. Many of these critics concentrate on the lack of transparency demonstrated in the system; Indeed investor-state dispute resolution proceedings are often held in a confidential manner, where not only the public cannot follow or participate in the proceedings, but also, at least on some occasions, viewing the awards granted in these disputes is not permitted. The importance of such a webcast therefore lies first and foremost in the enhanced transparency it provides. It is, after all, only fair that the public be allowed…

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March 11, 2010
BY admin

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Arbitration

Reading Public Interest into BITs: Continuing Avidan Kent’s Discussion

I read Avidan Kent’s post, and the commentary that followed, on this blog describing his view of the true nature of BITs with great interest. I wanted to continue the discussion of the place of public interest in BITs and to the extent that they are considered. I am in agreement with Kent’s assessment.  I offer here at least a narrow area in international investment law where arbitral tribunals have managed to read in public interest into BITs. In considering whether an investor’s legitimate expectation should be protected under the commonplace fair and equitable treatment clauses, there is some room for maneuverability and consideration of “public interests” in determining when the investor’s expectations are in fact “legitimate”.

I draw the readers’ attention to the 2007 ICSID award in Parkerings v. Lithuainia. Had the BIT contained a stabilization clause to the effect that the host State had assured and represented that the legal and regulatory conditions under which the agreement was entered into was to remain the same, then the outcome of the tribunal’s analysis would have been different. In the absence of such assurances, the tribunal extended its analysis beyond the mere wording of the BIT to the social and political framework of Lithuania at the time that it was entered into. The arbitrators found that 1998 Lithuania was in a transition from being a part of the Soviet…

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