Sanctions and international arbitration

Empirical Findings on International Arbitration: An Overview

The author of the book outlines US common law doctrines related to international commercial arbitration. He presents the developments in the US common law jurisprudence in international commercial for two reasons: First to inform the reader regarding doctrinal transformations, and second, with hope of achieving the perfect workings of international commercial arbitration as an aspirational goal. To this end, examining the American influence on international commercial arbitration is important. The author suggests that US common law may help to overcome challenges arising out of cultural differences in international commercial arbitration. While doing so, there are important contrasting and competing principles to consider, such as party-autonomy and arbitrator discretion, which stand out as saliently competing paradigms. The author indicates that giving equal weight to these competing principles in international commercial arbitration might be a useful strategy to harmonize seemingly polar opposite propositions. The book focuses, in part, on the US common law of discovery and how it might be adopted in international arbitration to develop efficiency in such proceedings. The International Bar Association (IBA) Rules on Evidence Gathering, the Prague Rules, and the role of 28 U.S.C. §1782 in international arbitration are closely analyzed, among others, to develop alternative approaches concerning evidence gathering in international commercial arbitration. Overall, the book contributes important discussions and suggestions to the literature. Also, the text presents analyses and suggested solutions with the help of leading principles developed by US common law, which facilitates understanding these principles from the author’s perspective. While the book provides those valuable inquiries and discussions, the book review took a critical approach towards them. The authors of the review critically analyze those suggestions. The book review compares to other books that pursue a similar approach to international commercial arbitration. How justified suggestions in the book are, as well as their strong and weak points, are displayed in the review. Are all those suggestions in the book correct? It must not be forgotten that the book looks into issues from an American perspective and those suggestions are coming from US common law. However, this approach can be problematic in international arbitration. If there is a dominant legal system in international commercial arbitration, how “international” can international arbitration be? The review criticizes those contradictions and presents a comprehensive analysis of the book. The authors of this review believe that an idea can be developed if there is criticism against it. Thus, authors here offer a critical eye towards the book with the purpose of development of the ideas within the book. Acknowledging the hard work of the author of the book, the authors of the review offer some thoughts to develop the ideas in the book and to make its next edition even better. Therefore, those who are interested in learning about Martinez Fraga’s book with a critical approach can find some interesting insights from the review.

This chapter discusses the role of civil society in international investment arbitration. Much of the civil society focus on international arbitration has been on the investor–state dispute settlement (ISDS) process included in many international investment agreements. However, the historical role of commercial arbitration as the progenitor of investment treaty arbitration and the procedural and structural links between ISDS and commercial arbitration are important for the discussions on civil society engagement. Civil society recognized early on the problems of using a commercial arbitration model for investment arbitration, which involves public law matters, and concluded that this created a misappropriation of a tool that up to that time had only been used for private commercial purposes or very well-defined state-to-state purposes. The crossing of these purposes and actors to create public law arbitration between investors and states is what created this sense of misappropriation and led to a spotlight being shone on the regime by civil society. The chapter then looks back at the beginnings of civil society engagement with international arbitration through the experience with investment treaties, including the advancement of transparency and the ability to submit amicus curiae briefs.

The article is dedicated to analyzing the issue of determining the boundary of the legitimacy of state measures in regulating and controlling foreign investments within national jurisdiction, in accordance with national laws and regulations, and in line with national objectives and priorities. Additionally, this article reviews key regulatory trends in the international legal sphere concerning the protection of foreign investments. Through the analysis, the content of the main issues in international investment law has been clarified, including the protection of foreign investments and the differentiation (legal classification) of state actions that constitute indirect expropriation, discrimination, unfair treatment, or other violations of international obligations under international investment agreements. Such actions create the right to challenge them through international arbitrations, potentially leading to compensation obligations. On the other hand, state measures taken within their right to regulate in the public interest are not subject to compensation. Moreover, previously published theoretical insights regarding the interaction between the legal regime of foreign investment (international investment treatment) and the state guarantees for the protection of foreign investments have been importantly refined. Relevant examples are provided concerning both these guarantees and the key approaches to forming a regulatory framework for the domestic regulation of foreign investments, including their admission and restrictions. The first approach assumes that special regulations apply to foreign investors, partially overlapping with those established for national investors. In developing countries in Africa, Latin America, and Asia, special foreign investment laws typically exist, which may include separate laws or investment codes. The second approach is more characteristic of countries with developed economies. Under this approach, legislators do not establish special laws governing foreign investments but introduce significant restrictions. Such restrictions usually apply to specific industries or sectors in which foreign participation may be entirely prohibited or limited. Additionally, investment activities may require obtaining special permits, and states may implement special screening mechanisms. But the key research finding is that national law establishes the legal framework for creating the general legal regime of foreign investment, which is realized, among other things, through the sub-institution of state guarantees for the protection of foreign investments. This sub-institution may and may not be even directly linked to the actual implementation of foreign investments, but always exists in national legislations. It is also worth noting that the prevailing trend is the continuous development of national foreign investment legislation to implement policies that contribute to global economic growth and the overall welfare of the population. An empirical legal indicator of this trend is the gradual disappearance of differences between legal regimes for national and foreign investors, facilitated by the introduction of legal mechanisms for foreign investor access. Key words: international investment law, international investments, investment treatment, bilateral/multilateral investment treaties, international investment arbitration, state guarantees for the protection of foreign investments.

Transparency in International Commercial Arbitration: Adopting a Balanced Approach

Investment arbitration, with its unique demands for transparency due to the public interest, is an especially promising arena for AI technologies. This transparency push and the judicialization of processes make investment arbitration increasingly amenable to technological innovations. However, the full potential of artificial intelligence (AI) in streamlining international investment arbitration case management remains largely untapped. The key to unlocking this potential lies in digitalization of data and procedures, and inter-institutional collaboration to share data. The literature regarding the use of technology in international arbitration mainly focuses on AI and its potential use in international arbitration in the future. While much of this literature speculates about the future, a holistic understanding of the present state of technology in international investment arbitration is crucial. This article spotlights the advancements achievable in case management in international investment arbitration using today’s available technologies. The current state of AI technology is primed for handling straightforward procedural tasks. Yet, these modest tasks occupy significant bandwidth in the agendas of arbitral institutions and tribunals. Once comprehensive digitalization is achieved, and AI technologies are integrated into international investment arbitration case management adeptly, that will be a significant step towards more expeditious and cost-effective arbitration procedures.

INTRODUCTION On 10 July 2017, the United Nations Commission on International Trade Law (UNCITRAL), agreed to initiate work on a possible multilateral reform of investment dispute settlement, including the probable establishment of a multilateral investment court. This follows a formal request from many countries, including the European Union and its Member States, to examine this issue. This is the latest development in a series of setbacks for investorstate dispute settlement (ISDS). Formerly, a number of other states have actively rejected the use of ISDS clauses or significantly limited their scope. Denunciation of the International Centre for Settlement of Investment Disputes (ICSID) Convention – Venezuela or Bolivia –, termination of its investment agreements – South Africa or Ecuador –, revision of its model Bilateral Investment Treaty – India –, non-renewal of its investment treaties – Indonesia –, are a few examples of the different approach to solving investorstate disputes and a clear manifestation to break with the current structure and form of international investment law. Simultaneously to all these movements and actions, the idea that emerges is that an ISDS reform is possible from’ within’. Without breaking the current structure, it is possible to evolve and modernise international investment law and arbitration. Despite what has been said before, there is no doubt that in the coming years international arbitration will remain the preferred option for resolving foreign investment disputes and all stakeholders need to ensure it counts among the most effective dispute resolution mechanisms. Only in 2016, 62 new cases were initiated pursuant to International Investment Agreements (IIAs), bringing the total number of known cases to 767. Changing the model would be slow, even if this change finally happens, and it should be borne in mind that the IIAs include sunset clauses with an average duration of 10 to 15 years. This study focuses precisely on analysing the changes that are occurring in this area to try to respond to the criticisms made, without abandoning the model. In this sense, two aspects are the focus of the study. Firstly, the adoption of rules designed specifically to resolve these types of disputes. Secondly, the changes made both in the substantive law of foreign investments and into the ISDS clauses of the IIAs.

The pressure on international arbitral tribunals to decide on requests for interim measures in high stakes international arbitration is likely to grow rapidly as the global economy continues to weaken and the number of investment disputes, both before the International Centre for Settlement of Investment Disputes (ICSID) tribunals and ad hoc tribunal proceedings under United Nations Commission on International Trade Law (UNCITRAL) Rules, increases. Although the individual decisions of the tribunals are not binding on one another, it is generally accepted that from these decisions there is the development of a special jurisprudence in investment arbitration. The danger inherent in this situation is that all decisions of all tribunals ‘have in principle equal status as concerns the potential for normative influence’. This influence will only increase as more awards are available for review. Recently, in Sergei Paushok, CJSC Golden East Company and CJSC Vostokneftegaz Company, Claimants v. Government of Mongolia (‘Paushok v. Mongolia’), a 2008 ad hoc investment arbitration conducted under UNCITRAL Rules, the tribunal entered an interim award without reference to any specific authority but nonetheless applied a list of criteria taken from international investment arbitration jurisprudence as a guide to its decision-making. Using Paushok v. Mongolia as a framework, the authors have critically evaluated tribunals’ reliance on what they deem ‘leading authority’ and the reasoning process used. From this analysis, the authors propose standards for tribunals to consider in the application for issuance of interim measures in international investment arbitration under both ICSID and UNCITRAL Rules and discuss how each factor should be analysed, as well as the quantum of proof required for each. At a minimum, the authors hope that their proposed standards provoke discussion on whether there is in actuality a set of internationally recognised standards to be met before a tribunal will issue an order in support of interim measures, and if so what should provide the basis for that standard.

The Role of Domestic Courts in International Commercial Arbitration

Over the past few decades, arbitration has become the number one mechanism to settle international investment and commercial disputes. As a parallel development, the international legal framework to combat economic crime became much stronger within the fields of foreign public bribery, private bribery, fraud and money laundering. With frequent allegations of criminal conduct arising in international arbitration proceedings, it is crucially important to consider how such claims can be proven. This book analyses relevant case law involving alleged criminal conduct within international arbitration and addresses the most pressing issues regarding applicable criminal law and evidence. It is an essential resource for practising lawyers and academics active in the field of international investment and commercial arbitration.

This paper analyses Colombia’s experiences with international arbitration in disputes with foreign investors. Three periods of roughly 30 years were chosen: a) diplomatic protection of great powers’ expatriates in Latin America (Colombia) in the era of Imperialist rivalry: the last decades of the nineteenth century and the early years of the twentieth. This protection (sometimes with naval interventions) was meant to uphold a minimum standard of treatment for foreigners and gave rise to the Calvo doctrine as its counter-current protecting Latin American economic sovereignty; b) interregnum between the 1960s and 1980s: Calvo (prevalent in Latin America) reincarnated in an economic emancipation drive by postcolonial countries at the United Nations. Yet, the doctrine suffered a setback in the World Bank where the Icsid Convention was adopted despite a collective No vote by Latin American members on an earlier draft in Tokyo; c) investor-state arbitration under international investment agreements: expansion and retreat, from 1990 to present. Expansion of such agreements and emergence of a kind of arbitral case-law occurred between the early 1990s (when the Latin American mainstream abandoned Calvo) and the late 2000s. Counter-currents appeared since the early 2000, including treaty clarifications, public policy carve-outs, and withdrawals of Latin American, North American and European states. This periodization allows for comparing Colombia’s international investment arbitration consents, relevant awards, treaties, legislation and constitutional case-law over time.

Delocalization theory provides an approach to international arbitration laws, which enhances the parties’ autonomy and contractual freedom in the arbitration process. The core of this theory is supporting the recognition and enforcement of foreign arbitral awards even though these are regarded null and voided in the original country. Based on doctrinal analysis of the delocalization theory in international arbitration as well as the opinions of some national courts in recognizing and enforcing the international arbitration awards, this research identifies that the disadvantages of the delocalization theory overwhelm its advantage and consequently, this theory is deemed unrealistic in the course of practice. It does not enable resolving commercial disputes via international arbitration to be more attractive, domestic laws should rather be flexible and selective in recognizing and enforcing the foreign arbitral awards. Against the background of this result, some comments toward the approach of Vietnam law and suggestions for law reform have thus been built to increase the efficiency in the process of recognizing and enforcing foreign arbitral awards.

Arbitration is a well-known and increasingly popular alternative dispute resolution method. It is a safe, cost-effective, and time-efficient alternative dispute resolution method. The arbitration system saves both parties time and money by avoiding lengthy legal proceedings. In the Indian subcontinent, arbitration has been practised for many years under the name "Panchayat." Even in the absence of a legal system, the Panchayat served to settle conflicts. In these panchayats, decisions were made in accordance with ethical standards, cultural norms, and religious principles, and the decisions made by the panchayat were respected and held in high regard. (Kumar, 2017) During the British Raj (1858–1947), the Panchayat system underwent a period of decline. The British legalized local arbitration and replaced it with a codified system of law. (Hussain & Arafat, 2022) They enacted numerous regulations, leading to the enactment of the Arbitration Act of 1940, which governs arbitration in Pakistan. Following Pakistan's independence in 1947, the Panchayat system was reinstated and is still widely used in rural areas, where it is carried out in accordance with cultural norms and usages. There are no provisions in the 1940 Act regarding the Panchayat system, and its amendment has the potential to harmonise the country's arbitration system. (Mukhtar. 2016) Pakistan introduced international arbitration by signing and later implementing the New York Convention in 1958 by enacting the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act and the Arbitration (International Investment Dispute) Act in 2011. Although Pakistan has signed the UNCITRAL Model Law on International Commercial Arbitration, it has not yet been incorporated into domestic law. A stable and comprehensive system of international arbitration has become a necessity at the current time to attract foreign investors and other stakeholders to the country. However, Pakistan needs to improve in many areas of international arbitration, particularly in the enforcement and recognition of foreign awards and lex arbitri. (Rizwan Hussain, 2012) These challenges are explained in this essay using case laws.

The article provides a theoretical and legal analysis of the genesis, regulatory basis of the International Commercial Arbitration at the Chamber of Commerce and Industry of Ukraine in the direction of settling commercial disputes between businesses from different countries. Based on international agreements, which are part of the national legislation of Ukraine, the theoretical and legal author's investigation of the essence and significance of interstate instruments in the field of pre-trial settlement of trade disputes. Using the norms of current international trade law, as well as in view of numerous scientific studies in this field, the author presents different conclusions that may form the basis for improving existing regulations of Ukraine, especially the Laws of Ukraine "On Foreign Economic Activity" and "International Commercial arbitration". Due to a thorough economic and legal analysis of key concepts, such as "arbitration", "arbitration agreement", "international arbitration", "commercial arbitration", etc., the author's approach to the application of current legislation in the field of legal protection of rights and legally protected interests management. Particular attention is paid to those international legal instruments for settling economic disputes that best meet the interests of the domestic economy. The essence of autonomous, mixed contractual and procedural scientific theories on the legal essence of international commercial arbitration is analyzed, and their imperative filling with those legitimate instruments of coercion which are applied to violators of international commercial law and other normative legal acts which regulate legal relations is investigated. Particular attention is paid to the coverage of scientific and practical framing of issues related to the implementation of positive international and European experience in the legislation of Ukraine, primarily on the pre-trial settlement of commercial disputes.

Between Cultural Boundaries and Legal Traditions: Ethics in International Commercial Arbitration