When asked why they choose to resolve their disputes through international arbitration, parties often identify confidentiality as an important factor. While the parties may think their arbitration is confidential, in many cases, the proceeding is merely private. In the context of arbitration, privacy and confidentiality are not necessarily the same. Privacy means that arbitration proceedings are not open to the public, but privacy does not preclude the parties from disclosing the proceedings to third parties. Confidentiality, by contrast, means the parties (and the arbitrators) may not disclose the proceedings to third parties or the public, including evidence, written submissions, arbitral awards, and even the existence of the proceedings and the identities of the parties. Most arbitrations are private, but many arbitrations are not confidential. As the Australian High Court has held, privacy is an essential component of arbitration, but “absolute confidentiality” is not. Whether an arbitration is confidential can depend on the agreement of the parties, the applicable arbitration rules, and law of the forum country. Continue Reading
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
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
As discussed in a previous blog post, an interested party in a foreign or international proceeding may apply to a United States District Court for discovery from an individual or corporation who resides or is found in the district. This blog describes the procedural steps for pursuing or responding to discovery requests under 28 U.S.C. § 1782. The operative language of section 1782(a) provides:
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. Continue Reading
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
The International Organizations Immunities Act of 1945 (“IOIA”) grants international organizations such as the World Bank and the World Health Organization the “same immunity from suit and every form or judicial process as is enjoyed by foreign governments.” However, at the time the IOIA was enacted, foreign governments enjoyed virtually absolute immunity from suit, while that immunity is more limited today. So, what is the meaning of “is” in the IOIA? Does IOIA grant international organizations the virtually absolute immunity that foreign governments enjoyed when the IOIA was enacted, or the more restricted immunity they enjoy today? Continue Reading
In the United States, parties may agree in their contract not only to submit future disputes to arbitration but to also submit “arbitrability” questions to an arbitrator. In practice, such delegation (if properly made) means that the tribunal, instead of the court, would decide not only the merits of the parties’ dispute but also the threshold arbitrability questions that may arise, such as whether the parties have agreed to arbitrate or whether their arbitration agreement applies to and covers the particular dispute between the parties. Continue Reading
On December 20, 2018, the United Nations General Assembly adopted the United Nations Convention on International Settlement Agreements Resulting from Mediation. This Convention will open for signature on August 7, 2019 in Singapore and will become known as the “Singapore Convention on Mediation”: It provides a framework for the recognition of international settlement agreements similar to that provided by the New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). Specifically, the Singapore Convention applies to settlement agreements reached outside of court and arbitral proceedings, which without the Convention are not directly enforceable in a domestic legal system.
Fearing the burdens of U.S. court litigation, many foreign companies doing business with American counter-parties insist on forum selection clauses that call for resolution of disputes outside of U.S. courts, either in foreign courts or international arbitration. High on the list of objectives may be avoiding U.S.-style discovery, which can justifiably strike fear into the hearts of non-U.S. companies. However, before congratulating themselves too heartily, such companies should consider the often overlooked provisions of a U.S. statute that authorizes U.S. courts to order discovery for use in certain foreign legal proceedings. Continue Reading
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