Tag Archives: UN

The Public Law Potential of International Arbitration

detail of historic scales with globe on it and metallic weights in dark backIn a recent lecture delivered at the University College London, Yves Fortier spoke about the potential of international arbitration to reach beyond private justice and play a greater role in public international law and the regulation of state conduct. Fortier, an international arbitrator and former diplomat, has previously been ambassador and permanent representative of Canada to the United Nations in New York and served as president of the UN Security Council in 1989.

Fortier acknowledged “the contemporary success of international arbitration and the ability it has had to influence and bend states to a system of international general principles.” He also spoke of “re-conceptualizing” international arbitration as “a tool of international governance”. Arbitration, in Fortier’s mind, has great potential to contribute positively to international law and the public good.

“There is no denying that the success of international arbitration has been limited in some measure to international economic law, where it is actively championed,” said Fortier. But “this should not, in any way, prevent experiments with the practice in other areas of international law.”

Fortier contrasted the effectiveness of international arbitration with the generally limited success of several international courts. Therefore, he urged lawyers to explore more innovative ways of adjudicating international disputes rather than seeing courts as the perfect form of dispute settlement. Fortier recognized that international arbitration sometimes falls short of the ideals of an international court. “But why”, he asked, “should this prevent us from acknowledging its effectiveness?”

A video of the lecture can be accessed here.

ISDS AT COP21: ENFORCEMENT OF CLIMATE COMMITMENTS

Globe between two pairs of clasped handsIn a speech in Paris during the COP21 summit, the president of the International Bar Association David Rivkin expressed hope that ISDS could bridge the current enforcement gap in international environmental law.

Specifically, Rivkin highlighted the role of neutral and accessible dispute resolution mechanisms in enforcing commitments and underlying pledges made by state parties to the UNFCCC negotiations. He also noted that the existence of mechanisms for resolving disputes between investors and states is crucial to incentivizing foreign investment in renewable energy.

Noting that the fiercest critics of ISDS tend to focus on the system’s purported chilling effect on a state’s regulatory ambitions, Rivkin explained that this “regulatory chill” relates to the substantive terms of the treaties rather than to ISDS procedure.

Rivkin remarked that in the “new wave” of investment treaties and agreements, “environmental issues are being considered increasingly by states at the outset of drafting investment chapters”. Today, most BITs include some environmental language, and many contain a general reservation of policy space for environmental regulation. Rivkin emphasized that a number of recent BITs have included specific obligations to promote sustainable development, to encourage trade in environmental products, or to facilitate FDI in environmental technologies or eco-labeled goods.

Commenting on these developments, Rivkin noted:

It is clear that we are entering a new era of BITs/FTAs, in which states are delineating more specific obligations in the negotiation of these agreements, both as to standards of investor protection and regulatory autonomy. As we are seeing in the context of TTIP, CETA and TPP, ‘self-calibration’ of the ISDS system is already evident. In the future we may also see more movement in the areas of state counterclaims, which would be particularly relevant for environmental claims.

Rivkin also discussed the recent report by the IBA Task Force on Climate Change Justice and Human Rights, which provides a comprehensive coverage of pro-environment clauses included in investment chapters.

Read the full speech here.

UNCITRAL at the forefront of ISDS development

UNCITRAL_BloggThe international community is constantly working in a collaborative spirit to address areas for the continued development of the international legal order. An important UN-body for this purpose is the United Nations Commission on International Trade Law (UNCITRAL). And a recent and illustrative example of how states have constructively addressed new developments through the work of UNCITRAL is the Rules for Transparency in Treaty-based investor state arbitration.

The Transparency Rules were drafted in response to the calls for ISDS transparency, but it deserves pointing out that the UNCITRAL work on transparency took its beginning long before ISDS became a hot political issue in Europe. The UNCITRAL perspective is constructive and long-term.

At its most recent session in Vienna, the UNCITRAL Commission touched upon another topical issue for investor-state dispute resolution, when it discussed the matter of concurrent proceedings. This is an area the UNCITRAL has focused on over the past year, and in which the Commission expressed a continued interest for future work.

The recent UNCITRAL report on concurrent proceedings and possible future work is available here. It illustrates the joint responsibility felt by the international community, as represented by UNCITRAL, to safeguard common values under-pinning international arbitration, while addressing the future in view of recent development.

 

UNCTAD 2014 ISDS Trends

UNCTAD have released an infographic with statistics about ISDS trends in 2014.

It presents the number of concluded, on-going and new cases cases during 2014. It also answers the following questions:

What was the outcome of the concluded cases? Which are the most frequent home-countries of claimant investors? How many claims were made against developing countries?

UNCTAD is the United Nations body responsible for dealing with development issues, particularly international trade and is governed by its 194 member States.

ISDS trends 2014_2_red2

Click image to enlarge and to download 

UNCTAD’s Review of ISDS Developments in 2014

Row of european flags against blue sky backgroundThe United Nations Conference on Trade and Development (UNCTAD) recently released a report on ISDS developments in 2014.

Below are some interesting points:

  • In 2014, 60% of the ISDS cases were brought against developing and transition economies.  A quarter of the cases are intra-EU cases.
  • The two types of State conduct most commonly challenged by investors in 2014 were cancellations or alleged violations of contracts and revocations or denials of licenses.
  • The most frequent home States of investors in 2014 were the Netherlands (seven cases), followed by the United States and the United Kingdom (five cases each).
  • As of the end of 2014, the total number of concluded cases become 356, with 37% decided in favour of the State, 25% in favour of investor and 28% of cases settled.
  • Five decisions were rendered in 2014 on applications for annulment of ISDS cases under the ICSID Convention, all of them unanimously rejected the applications.
  • The U.S Supreme Court overturned a ruling by the U.S Court of Appeals for the District of Columbia that has set aside an ISDS award in favour of BG Group Plc. against Argentina. This means that the original award stands.