Investor-State Dispute Settlement (ISDS)

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The International Council for Commercial Arbitration (ICCA) and the International Bar Association (IBA) have established a Joint Task Force on Data Protection in International Arbitration Proceedings. The task force will develop guidance for arbitration professionals with regard to data protection in arbitration proceedings. This guidance, which is expected to be published for comment later this year or in early 2020, aims provide practical guidance on the potential impact of data protection principles. In particular, it will recommend how information and evidence subject to the European Union’s General Data Protection Regulation (“GDPR”) is to be handled in international arbitration proceedings.
Continue Reading GDPR and International Arbitration at a Crossroad

In a long-awaited ruling of June 18, 2019, the General Court of the European Union (“GCEU”) annulled the European Commission’s 2015 State aid decision in the Micula case (joined cases T-624/15, T-694/15 and T-704/15). The ruling provides valuable clarifications regarding the relationship between intra-EU bilateral investment treaties (“BIT”) and EU State aid rules.

In sum, the GCEU confirmed that the European Commission lacked jurisdiction to apply EU law in a situation where all relevant events took place before accession to the EU. The validity of intra-EU BITs was not at issue because, during the relevant time period, the BIT in question (the 2002 Sweden-Romania BIT) was between a Member State (Sweden) and a third country (Romania).
Continue Reading International Arbitration, Investment Protection and EU State Aid Rules: the General Court of the EU Annuls the European Commission’s State Aid Decision in the Micula Case

For various reasons–including fairness, efficiency, and avoiding inconsistent results–courts and arbitration tribunals apply a range of procedural tools to discourage parties from pursuing multiple, separate dispute resolution proceedings between the same parties over related claims arising from a single dispute. In cases involving foreign investment within the coverage of an investment treaty, such as a bilateral investment treaty (BIT) or free trade agreement, however, the investing party may have compelling reasons to simultaneously pursue commercial arbitration pursuant to contract, and investment arbitration pursuant to treaty. And unlike other situations where courts and tribunals may look askance at parallel proceedings, the presence of an otherwise exclusive arbitration clause in a contract between a foreign investor and a host state may not, by itself, preclude an injured investor from pursuing both commercial arbitration as provided in the contract and investment arbitration as provided in a treaty. This has a sound basis in international law and provides potential advantages to parties with claims pending in private commercial arbitration proceedings.
Continue Reading Pursuing Parallel Arbitration Under an Investment Treaty

The International Centre for Settlement of Investment Disputes (ICSID) has released its 2018 caseload statistics.  In 2018 ICSID registered a record 56 new cases, as compared to 53 cases registered in 2017.  Since the first case in 1972 ICSID has registered 706 cases in total.

The new cases are concentrated in few sectors, with disputes in the oil, gas and mining sector accounting for 21% of cases registered in 2018, followed by electric power and other energy sources at 20% and construction at 14%.
Continue Reading ICSID 2018 Caseload Reflects Continued Uptick of Investor-State Arbitrations

Third party funding in international arbitration has garnered a great deal of attention in recent years. Many of those opposed to the practice, or seeking to limit or control it, have been outspoken and engaged in efforts to regulate or abolish the practice. Up until now, much of that effort has focused on prospective legislative or rulemaking “solutions.”  For example, regulation of third party funding looks to be included among the topics to be addressed by anticipated amendments to the ICSID rules. In a interview, Meg Kinnear, ICSID’s General Counsel, indicated that, while the institution does not propose to prohibit the practice in the amendments, ICSID does propose to add third party funding disclosure requirements to address and avoid possible conflicts issues. HKIAC rules likewise include disclosure requirements, but also expressly permit tribunals to take into account any funding arrangements when fixing and apportioning costs. Another proposal that has been argued for, especially by state entities, is making funders liable to post security for fees at the outset of the proceedings.
Continue Reading A New Front Against Third Party Funding?