Tribunal Invitations to Comment on Legal Authority, Argument and Draft Awards Alejandro A. Escobar Fifteenth Public Conference, Investment Treaty Forum/BIICL, London 9 September 2010 © 2010
Overview I Finality in Investment Arbitration and the Lex Novit Curia maxim § Debate over finality and appeal in investment treaty arbitration § Debate over lex novit curia in international arbitration II Developments in ICSID Ad Hoc Committee Decisions § Annullable errors of law § Departure from a fundamental rule of procedure III Treaty Developments § The 2004 USA Model BIT § DR-CAFTA and other FTAs IV Possible Implications for Future Investment Treaty Proceedings § Dissenting Opinions § Tacit waiver of annulment grounds § Other implications for counsel and the parties
I Finality and Lex Novit Curia A. The debate over finality and appeal in investment treaty arbitration B. The debate over lex novit curia in international arbitration
A. Finality and Appeal § Supreme Court of British Columbia Proceedings in Metalclad v Mexico § 2001 NAFTA Free Trade Commission Interpretation § 2004 US Model BIT and related FTAs § 2005 ICSID Initiative § Consistency – Quality / Legitimacy – Normativity § Legitimacy of the arbitration process based on basic legal tenets § Norm-creating character of the arbitration process
B. Lex novit curia ? § Is this a reasonable rule for arbitration? § Prof. Kaufmann-Kohler’s 2004 proposal § Consent as the cornerstone of arbitration process § The right to be heard § Investment Treaties/PIL as Law and as Fact § Article 38(1) ICJ Statute / Article 42(1) ICSID Convention § The 2008 Report of the International Law Association § A reasonable opportunity to be heard on legal issues § Tribunals may raise new issues with the parties in disputes implicating public policy or other mandatory rules
II ICSID Ad Hoc Committee Decisions A. Annullable errors of law B. Departure from a fundamental rule of procedure
A. § § § Annullable Errors of Law Kloeckner v Cameroon Malaysian Historical Salvors v Malaysia Helnan v Egypt Sempra v Argentina Enron v Argentina
B. Departure from a Fundamental Rule of Procedure § Amco Asia v Indonesia (resubmitted case) § The right to be heard § Related to a specific submission by the other side, leading to a rectified Award (with higher quantum against applicant) § Full knowledge of the applicant § Issue was clerical § But applicant was not given the procedural opportunity to comment § The rectified Award was annulled in part
III Treaty Developments § NAFTA, Article 1128 (non-disputing Party submission) § 2004 USA Model BIT, Article 28(9) (“proposed award”) § US/ Uruguay BIT, Article 28(9) § US/Rwanda BIT , Article 28(9) § DR-CAFTA, Article 10. 20(9) (“proposed award”) § Chile/US FTA, Article 10. 19(9) § ASEAN / Australia / New Zealand, Article 27(2) (request for joint interpretation of provisions)
USA 2004 Model BIT, Article 28(9) … at the request of a disputing party, a tribunal shall, before issuing a decision or award on liability, transmit its proposed decision or award to the disputing parties and to the non-disputing Party. Within 60 days after the tribunal transmits proposed decision or award, the disputing parties may submit written comments to the tribunal concerning any aspect of its proposed decision or award. The tribunal shall … issue its decision or award not later than 45 days after the expiration of the 60 -day comment period. Does not apply if an appeal mechanism has been established
ASEAN / Australia / New Zealand FTA, Art. 27(2) The tribunal shall, on its own account or at the request of a disputing party, request a joint interpretation of any provision of this Agreement that is in issue in a dispute. The Parties shall submit in writing any joint decision … to the tribunal within 60 days of the delivery of the request. …, if the Parties fail to issue such a decision within 60 days, any interpretation submitted by a Party shall be forwarded to the disputing parties and the tribunal, which shall decide the issue on its own account. (Emphasis added. )
IV Possible Implications A. Dissenting Opinions B. Tacit waiver of annulment grounds C. Other implications for counsel and the parties
Concluding Remarks § In the course of proceedings, the opportunity to comment on legal authority is commonplace and vital § At the decision-making stage, same rationale applies: concern for fairness in ascertaining the law § Investment treaty disputes raise, in addition: § concern for correctness § the perceived value of decisions as eventual precedents § Balancing factors would include § Need for finality § Need for cost-effectiveness (in particular avoiding the risk of an invalid award that may unnecessarily prolong a dispute)
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