ISDS

Modernizing the Energy Charter Treaty: What about termination?

Negotiations for modernizing the Energy Charter Treaty, a 1994 agreement covering trade, investment and other aspects of the energy sector among its contracting parties, are expected to begin before 2019 draws to a close. Yet given the need identified in myriad other forums to reform ISDS and to ensure trade and investment agreements can support ambitious climate action, why aren’t more officials and commentators discussing the possibility of terminating the ECT entirely, or of reconsidering its survival clause for those parties which choose to withdraw? Tania Voon explores the issue and outlines options going forward.

@taniavoon
@MelbLawSchool

UNCITRAL Working Group III: Promoting alternatives to investor–state arbitration as ISDS reform

From October 14 to 18, 2019, negotiators will gather in Vienna for the next session of the UNCITRAL Working Group III on ISDS reform, where they will move from considering concerns with the current system to assessing possible solutions. In this ITN Insight, Jane Kelsey discusses various examples of how some countries have tested out alternatives to ISDS, such as state–state arbitration, alternative dispute resolution, domestic legislation and enforcement, and the exhaustion of domestic remedies. For each ISDS alternative, she examines what benefits and challenges arose, and how the lessons learned can help inform the next phase of UNCITRAL deliberations.

@AucklandUni

ICSID Rule Amendment: An attempt to remedy some of the concerns regarding ISDS identified by UNCITRAL WG III

The process for updating ICSID’s rules has been taking place in parallel to the UNCITRAL Working Group III deliberations on ISDS reform, prompting an important conversation of how these efforts may complement each other. In this new Insight, Rafael Ramos Codeço and Henrique Martins Sachetim examine the ICSID rule amendment process, taking a close look at a few key amendments under consideration and examining the extent to which these might help address some of the ISDS-related concerns that have been identified at UNCITRAL.

Third-Party Funding and the Objectives of Investment Treaties: Friends or foes?

This piece examines recent trends in the use of third-party funding (TPF) in treaty-based ISDS and the implications of TPF for investor conduct, developments in investment law and host state conduct. TPF has been raised in two multilateral processes currently underway: the talks to amend ICSID arbitration rules and to consider multilateral reform of ISDS at UNCITRAL. Given the narrow nature of the TPF discussions in ICSID, the authors make the case for policy-makers to consider full or partial bans of TPF at UNCITRAL.

A Bit of Anti-Bribery: How a corruption prohibition in FIPAs can bring a minimum standard of conduct for Canadian investors abroad

Tackling corruption is a crucial step in meeting the objectives set out in SDG 16 on “Peace, Justice, and Strong Institutions” and for achieving the SDGs overall. Canada’s investment treaties could play a valuable role in addressing corruption. The piece draws from examples such as Canada’s Foreign Investment Promotion and Protection Agreement (FIPA) program and examines some of the asymmetries inherent in the current IIA regime. The author analyzes some of the language used in Canada’s more recent treaties, such as CETA and the FIPAs with Moldova and Kosovo, and what lessons can be drawn from these and other agreements.

Spain’s Renewable Energy Saga: Lessons for international investment law and sustainable development

Spain has faced approximately 40 arbitrations since it made the decision in 2010 to rescind or revise various regulatory measures aimed at drawing in greater investments into renewable energy projects. This article examines the awards issued in four of those cases, looking in particular at how the tribunals interpreted and applied the FET standard. The author looks at the potential problems that can emerge when states are unsure of how any given tribunal may interpret FET or other key standards and presents some potential solutions.

SCC tribunal finds Poland liable for expropriation over divestment order to Luxembourg investor

PL HOLDINGS S.À.R.L. V. REPUBLIC OF POLAND (SCC CASE NO. V2014/163)

Politically Motivated Conduct in Investment Treaty Arbitration

Investment treaty arbitration is often expected to focus on technical issues. In practice, however, domestic political discussions and processes can have a major impact on investment disputes. The authors map out the variety of state conduct characterized by tribunals as politically motivated or influenced. They also examine the different ways in which arbitral tribunals have responded to host state conduct resulting from domestic political considerations.

News  |  April 23, 2019

Australia and Indonesia sign economic partnership agreement, including ISDS mechanism

Australia and Indonesia have now signed their Comprehensive Economic Partnership Agreement (IA-CEPA), bringing to a close a negotiating process that began in November 2010. The two countries signed the agreement on March 4, 2019. The IA-CEPA also includes an investment chapter and four related annexes, which cover an arbitrators’ code of conduct; expropriation and compensation; foreign investment policy; and public debt.

Phase 2 of the UNCITRAL ISDS Review: Why “other matters” really matter

UNCITRAL conferred a broad mandate on Working Group III to consider possible reform of ISDS. In Phase 1 governments identified and considered concerns about ISDS. Phase 2, where they consider whether reform is desirable in light of those concerns, is well advanced. The next meeting in New York in April 2019 is expected to conclude this phase and decide how to pursue the final phase, in which governments will develop any relevant solutions to recommend to the Commission. This note addresses three issues at the heart of the legitimacy crisis confronting the international investment regime that should inform the remainder of Phase 2.

Corporate Social Responsibility Clauses in Investment Treaties

CSR refers to rules and practices companies follow voluntarily to limit the negative social, environmental and other externalities caused by their activities. There is a trend to incorporate CSR standards in investment treaties. Could CSR clauses be useful in consolidating enforceable investor obligations and serving as a basis for state counterclaims?

News  |  December 21, 2018

Judges of the International Court of Justice decide to no longer participate as arbitrators in ISDS cases

In a speech to the United Nations General Assembly on October 25, 2018, Judge Abdulqawi Yusuf, President of the International Court of Justice (ICJ), mentioned that the court has decided to restrict the practice of allowing members to serve in arbitral tribunals.

News  |  October 17, 2018

NAFTA 2.0 finalized, announced as USMCA: Mexico, United States agree to limit ISDS clause; Canada to pull out of ISDS after a three-year window

On September 30, 2018, U.S. Trade Representative (USTR) Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland announced that the two countries had reached an agreement, alongside Mexico, on a modernized trade deal.

The 2018 Draft Dutch Model BIT: A critical assessment

In May 2018, the Dutch Ministry of Foreign Affairs published its new draft model bilateral investment treaty (BIT), in hopes to foster rethinking of existing and future Dutch BITs. Will this revised model achieve this goal, or does it fall short of the promised policy reset?

The Case Against Third-Party Funding in Investment Arbitration

Third-party litigation funding (TPF) is a rapidly expanding industry composed of speculative investors who invest in a legal claim for control of the case and a contingency in the recovery. In the wake of the global financial crisis and the demand by speculative finance for new investment vehicles, TPF has discovered the regime of bilateral investment treaties (BITs) with investor–state dispute settlement (ISDS) mechanisms.

News  |  July 30, 2018

Update on EU trade and investment negotiations: Japan, Vietnam, Australia, New Zealand, Mexico

On July 17, 2018, EC President Jean-Claude Juncker and Japanese Prime Minister Shinzo Abe signed the Japan–European Union (EU) Economic Partnership Agreement (JEEPA).

News  |  July 30, 2018

UNCITRAL Working Group III continues debate on ISDS concerns and multilateral reform

Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) continued discussions on possible reform of investor–state dispute settlement (ISDS) at its 35th session, held April 23–27, 2018 in New York.

Withdrawal of Consent to Investor–State Arbitration and Termination of Investment Treaties

It will take time for dialogues on ISDS reform to produce results. In the interim, rather than continue to assume the unjustified risks associated with the flawed ISDS system, states could consider two near-term options. This piece looks at the advantages and disadvantages of each.

An Interview with Luis Guillermo Vélez – Director-General of Colombia’s National Agency for the Legal Defense of the State

On the heels of our 11th Annual Forum of Developing Country Investment Negotiators, we interviewed Luis Guillermo Vélez, Director-General of Colombia’s National Agency for the Legal Defense of the State (ANDJE), to capture his experiences on investment negotiations and disputes, his expectations for investment reform processes and views on the value of the Forum.

News  |  April 24, 2018

UNCITRAL Working Group III meets in New York to continue ISDS reform discussions

The 35th session of Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) takes place April 23–27, 2018

Government Regulatory Space in the Shadow of BITs: The Case of Tanzania’s Natural Resource Regulatory Reform

Tanzania passed three new laws in July 2017 that significantly change the regulatory landscape governing natural resources. The reforms are aimed at ensuring that foreign investment benefits Tanzanian citizens.From an African perspective, this article argues that it is time to rethink investment treaty regimes to ensure that they do not hinder much-needed reforms.

UNCTAD’s 2017 High-level IIA Conference: Moving Forward on Addressing Older-Generation International Investment Agreements

Over 300 experts gathered in Geneva to take stock of the sustainable development-oriented reform of the investment treaty regime and discuss policy options for modernizing the existing stock of older-generation treaties. Participants recognized that multilateral collaboration would be key to addressing the complex IIA regime.

Review of The Political Economy of the Investment Treaty Regime

In their new book, Jonathan Bonnitcha, LaugePoulsen and Michael Waibel develop a coherent structure for policy analysis of investment treaties that should attract interest as governments review their treaty policies. It argues that investment treaties as currently applied often appear poorly tailored to address identifiable economic concerns.

News  |  December 21, 2017

UNCITRAL Working Group III holds first meeting on possible reform of ISDS

During the week of November 27–December 1, 2017, Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) held its first meeting on possible reform of investor–state dispute settlement (ISDS).

News  |  December 21, 2017

NAFTA 2.0: Canada, Mexico and U.S. negotiation rounds move into the first quarter of 2018

The three parties to the North American Free Trade Agreement (NAFTA) held the third, fourth and fifth rounds of renegotiation (Ottawa, September 23–27; Arlington, October 11–17; and Mexico City, November 17–21). The next round of NAFTA renegotiations is scheduled for January 23–28, 2018 in Montreal.

News  |  December 21, 2017

TPP-11 ministers agree on core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

On November 11, 2017, in Da Nang, Vietnam, ministers of Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam “agreed on the core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).”

Awards  |  December 21, 2017

ICSID tribunal affirms jurisdiction over dispute between Chinese construction firm and Yemen

Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen, ICSID Case No. ARB/14/30

Awards  |  December 21, 2017

Claims brought by a company controlled by an Egyptian billionaire against Algeria are held inadmissible

Orascom TMT Investments S.à r.l. v. People’s Democratic Republic of Algeria, ICSID Case No. ARB/12/35

Awards  |  December 21, 2017

UNCITRAL tribunal dismisses allegations of Hungarian investor’s bribery and refuses to set aside contract with Croatia

The Republic of Croatia v. MOL Hungarian Oil and Gas Plc, PCA Case No 2014-15

Adjudicator Compensation Systems and Investor–State Dispute Settlement

This paper examines compensation systems for adjudicators and dispute settlement administrators in investor–state dispute settlement (ISDS).

Investor–State Arbitration and Human Rights

This book examines the interrelations between human rights and international investment law and discusses whether and how human rights arguments may be presented in the course of arbitral proceedings based on investment treaties.

A Look into China’s Slowly Increasing Appearance in ISDS Cases

China has sustained robust inbound and outbound flows of foreign direct investment and expanded its web of investment treaties. This note sheds light on the country’s appearance in investment treaty cases in the past decade, either as home or host state.

Investment Treaties and the Internal Vetting of Regulatory Proposals: A Case Study from Canada

Does the prospect of foreign investor claims against countries in investor–state arbitration lead to regulatory chill? The authors asked officials whether ISDS contributed to changes in the internal vetting of government decisions on environmental protection.

News  |  September 26, 2017

Report on third-party funding in international arbitration opened for public comment

The International Council for Commercial Arbitration (ICCA)–Queen Mary Task Force on Third-Party Funding in International Arbitration opened its draft report for public comment.

Awards  |  September 26, 2017

Argentina ordered to pay over USD320 million for unlawful expropriation in airlines case

Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. The Argentine Republic, ICSID Case No. ARB/09/1

Awards  |  September 26, 2017

WNC v. Czechia: tribunal dismisses expropriation claim and determines that it has no jurisdiction over all other claims

WNC Factoring Limited v. The Czech Republic, PCA Case No. 2014-34

News  |  March 13, 2017

SIAC Investment Arbitration Rules come into effect; new SCC rules include appendix on investment treaty disputes

On January 1, 2017, the Investment Arbitration Rules of the Singapore Investment Arbitration Centre (SIAC) came into effect. Among the highlights are provisions on early dismissal of claims and defences, submissions by non-disputing parties and mandatory disclosure of third-party funding arrangements. The tribunal may consider such arrangements when apportioning costs. The 2017 Arbitration Rules of the Stockholm Chamber […]

News  |  March 13, 2017

European Union and Canada co-host discussions on a multilateral investment court

On December 13 and 14, 2016, the European Commission and the Canadian Government co-hosted exploratory discussions on establishing a multilateral investment court. Government representatives from several countries attended the closed-door meeting in Geneva. Upon concluding CETA, the two hosts had vowed to “work expeditiously” to create a permanent investment court, building on the ICS mechanism included in the agreement. The goal of […]

ITN  |  March 13, 2017

Awards and Decisions

ICSID tribunal dismisses claims brought against Indonesia based on forged mining licences Churchill Mining PLC and Planet Mining Pty Ltd v. Republic of Indonesia, ICSID Case No. ARB/12/14 and ICSID Case No. ARB/12/40 Inaê Siqueira de Oliveira [*] After rendering separate decisions on jurisdiction¾one for the case brought by British company Churchill Mining PLC under the United […]

India’s Joint Interpretive Statement for BITs: An Attempt to Slay the Ghosts of the Past

The Government of India has proposed a Joint Interpretative Statement to its bilateral investment treaty (BIT) partners. The statement clarifies key substantive and procedural provisions, bringing them more in line with India’s new foreign investment policy.

UNCTAD’s International Investment Agreements Conference 2016: Taking IIA Reform to the Next Level

As part of the World Investment Forum (WIF) 2016,[1] negotiators of international investment agreements (IIAs) and various stakeholders convened at the High-Level IIA Conference on July 19, 2016 in Nairobi, Kenya. Some 50 country delegates, parliamentarians, officials of international organizations and civil society representatives discussed the first phase of IIA reform and how to move […]

ITN  |  December 12, 2016

News in Brief

Trump election affects mega-regional negotiations including TTIP, TPP and RCEP

Brazil and India initial Bilateral Investment Treaty (BIT); text yet to be published

CETA signed; Canada and European Union to “work expeditiously” on creating a Multilateral Investment Court

News  |  December 12, 2016

Brazil and India initial bilateral investment treaty (BIT); text yet to be published 

During the 10th Annual Forum of Developing Country Investment Negotiators, held in Colombo, Sri Lanka, from November 7 to 10, representatives from Brazil and India announced that they had recently initialled a bilateral investment agreement (BIT).

News  |  December 12, 2016

CETA signed; Canada and European Union to “work expeditiously” on creating a Multilateral Investment Court

On October 30, during the 16th European Union–Canada Summit held in Brussels, the two negotiating partners signed the Comprehensive Economic and Trade Agreement (CETA), after seven years of negotiations.

ITN  |  December 12, 2016

Awards and Decisions

Venezuela to Pay Us$1 Billion For Expropriating Canadian Mining Company’s Investment

ICSID Tribunal dismisses MFN Clause in WTO GATS as a means of importing Senegal’s consent to arbitration from third party BIT

PCA tribunal deemed acts of Polish Agricultural Property Agency not attributable to Poland

Claimant not considered Investor due to interpretation of “Seat” under Cyprus–Montenegro BIT

Ecuador’s Levy on extraordinary oil profits at a 99% rate has breached Murphy’s legitimate expectations, decides PCA tribunal

Ecuador ordered by PCA tribunal to pay $24 million to Canadian Mining Company

Awards  |  December 12, 2016

ICSID tribunal dismisses MFN clause in WTO GATS as a means of importing Senegal’s consent to arbitration from third party BIT

Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v.
 Republic of Senegal, ICSID Case No. ARB/15/21- Suzy H. Nikièma

An interview with Lauge Poulsen, author of Bounded Rationality and Economic Diplomacy

The popularity of BITs in large parts of the developing world was due to a failure to appreciate their bite. Why would so many governments sign up to some of the most potent instruments in international economic law without even caring to check what the treaties meant?

ITN  |  May 16, 2016

News in Brief

US$50 billion awards against Russia in Yukos Cases are set aside by Dutch Court

TTIP draft to be prepared by July; ISDS being built based on both EU and US proposals

China – US BIT: ISDS to be included; ongoing negotiations on negative lists

Three mining disputes: The first investment disputes against Colombia come to light

Canada-European Union CETA re-concluded in February to incorporate the EU ICS proposal

Second ICSID claim filed against Uruguay; Philip Morris decision still pending

Singapore International Arbitration centre releases investment arbitration rules

News  |  May 16, 2016

TTIP draft to be prepared by July; ISDS being built based on both EU and U.S. proposals

Officials from the European Union and the United States gathered in Brussels for the 12th round of negotiations over the Transatlantic Trade and Investment Partnership (TTIP) from February 22 to 26.

News  |  May 16, 2016

China–United States BIT: ISDS to be included; ongoing negotiations on negative lists

Since 2008, China and the United States have undergone 24 negotiation rounds for a bilateral investment treaty (BIT).