Christoph H. Schreuer

Calvo's Grandchildren: The Return of Local Remedies in Investment Arbitration

One of the purposes of investor/State arbitration is to avoid the use of local courts. Litigation in the host State’s domestic courts is often seen as lacking the objectivity that the investor desires. In addition, domestic courts are often bound to apply domestic law even if that law falls short of the standards provided by international law. The traditional international remedy in investor/State disputes is diplomatic protection. But diplomatic protection is contingent upon the exhaustion of local remedies. It does not free the investor from going to the host State’s courts. First going to the local courts of the host State meant delay and additional expense to the investor. But it also carried disadvantages for the host State. Public proceedings in the domestic courts are likely to exacerbate the dispute and may affect the host State’s investment climate. Once the host State’s highest court has made a decision, it may be more difficult for the government to accept compromise or a contrary international judicial decision. The Preamble to the ICSID Convention states that “while such [investment] disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases.” It is for these and other related reasons that international investment arbitration dispenses with the requirement to exhaust local remedies, at least in principle. Article 26 of the ICSID Convention specifically does away with this traditional requirement “unless otherwise stated”.

From ICSID Annulment to Appeal Half Way Down the Slippery Slope

Annulment under the ICSID Convention offers a limited remedy on the basis of a few carefully circumscribed grounds. Recently, losing parties have attacked awards for a wide array of reasons. Some ad hoc committees deciding these requests for annulment have taken a broad view of their powers. They have given some grounds for annulment an extremely wide interpretation thereby blurring the line between annulment and appeal. For instance, a perceived mistake in the interpretation of a rule of law has been regarded as an excess of powers for failure to apply the proper law. One ad hoc committee went beyond the reasons for annulment put forward by the applicant. It actively searched for additional grounds and eventually annulled the award for a reason not relied upon by the applicant. Some ad hoc committees have gone beyond the task given to them by the ICSID Convention, offering general criticism and advice to tribunals. The risk that an ICSID award will be annulled is now higher than that a non-ICSID award will be set aside by a competent domestic court.

The ICSID Convention : a commentary : a commentary on the convention on the settlement of investment disputes between states and nationals of other states

1. International centre for settlement of investment disputes 2. Jurisdiction of the centre 3. Conciliation 4. Arbitration 5. Replacement and disqualification of conciliators and arbitrators 6. Cost of proceedings 7. Place of proceedings 8. Disputes between contracting states 9. Amendments 10. Final provisions.

The Protection of Investments in Armed Conflicts

Recent events in Libya have turned the spotlight on an aspect of international investment law that has, so far, attracted little attention. Investments, almost by definition, require stability and cannot thrive in situations of violence and political volatility. Libya is host to a number of important foreign investments, notably in the energy sector. The current armed struggle has seriously affected these investments and is likely to lead to a series of disputes with foreign investors. At the same time Libya is party to bilateral investment treaties (BITs) with several countries including Austria, Belarus, Belgium-Luxemburg, Croatia, France, Italy, Malta, Portugal and Switzerland.

Fees and Expenses

Victory Capital Management Inc., (the “Adviser”) has agreed that no performance adjustment (positive or negative) will be made to the amount payable to Victory Capital from July 1, 2019, through June 30, 2020. Thereafter, the management fee may fluctuate based on the Fund’s performance relative to a securities market index. See Fund Management section for a description of the performance adjustment fee.

The ICSID Convention: A Commentary: Immunities and Privileges of Centre

In the First Draft, the text of what later became Art. 19 was still attached to the general statement that the Centre shall have international legal personality (History, Vol. II, p. 619) and was evidently meant as an explanation and elaboration of the general statement on legal personality. Later, a list of specific legal capacities, previously contained in a separate Article, was attached to the general statement on legal personality and capacity (see Art. 18, para. 2) to form what subsequently became Art. 18. As a consequence, the text of what became Art. 19 was put into a separate Article (History, Vol. I, p. 92). The legal relevance of this Article was not clarified in the discussions which barely touched upon it (History, Vol. II, pp. 739, 740, 743). As it stands, Art. 19 is no more than a general introduction to the subsequent Articles. The Section referred to covers Arts. 18–24. The statement “to enable the Centre to fulfil its functions” may help to establish the exact extent of the immunities and privileges set out in the Convention. But the travaux preparatoires contain no indication that immunities and privileges that do not serve the Centres functions should be denied or interpreted restrictively.

Panels of Conciliators and Arbitrators

Art. 3 of the Convention states that the Centre shall maintain a Panel of Conciliators and a Panel of Arbitrators. Section 4 of the Conventions Chapter I is headed “The Panels”. It consists of Arts. 12–16 and deals with the designation of Panel members, their qualities, their periods of service, the relationship of the two Panels to each other and notification requirements. The drafts leading to the Convention all contained provisions substantively similar to what eventually became Art. 12 (History, Vol. I, pp. 66, 68). The idea was based on Art. 44 of the Hague Convention for the Pacific Settlement of International Disputes of 1907 establishing the Permanent Court of Arbitration (History, Vol. II, p. 145). Arts. 12–16 of the Convention bear some resemblance to that provision. During the Conventions drafting, the creation of Panels of Conciliators and Arbitrators was never cast into doubt (History, Vol. II, pp. 107, 110, 143, 145, 486/7, 753). But there were extensive debates on the Chairmans right to designate members of Panels (see Art. 13, para 4), the number of persons to be designated (see Art. 13, paras. 1, 4), the qualifications of Panel members (see Art. 14, paras. 2, 3, 5, 9–11), the periods of service on the Panels (see Art. 15, paras. 2, 3, 5, 6) and some modalities of appointment (see Art. 16, paras. 2, 3, 5).

The ICSID Convention: A Commentary: Contents

1. International centre for settlement of investment disputes 2. Jurisdiction of the centre 3. Conciliation 4. Arbitration 5. Replacement and disqualification of conciliators and arbitrators 6. Cost of proceedings 7. Place of proceedings 8. Disputes between contracting states 9. Amendments 10. Final provisions.

The ICSID Convention: A Commentary: Table of cases

1. International centre for settlement of investment disputes 2. Jurisdiction of the centre 3. Conciliation 4. Arbitration 5. Replacement and disqualification of conciliators and arbitrators 6. Cost of proceedings 7. Place of proceedings 8. Disputes between contracting states 9. Amendments 10. Final provisions.

The ICSID Convention: A Commentary: Index by article

1. International centre for settlement of investment disputes 2. Jurisdiction of the centre 3. Conciliation 4. Arbitration 5. Replacement and disqualification of conciliators and arbitrators 6. Cost of proceedings 7. Place of proceedings 8. Disputes between contracting states 9. Amendments 10. Final provisions.