{"id":3701,"date":"2016-05-16T05:00:26","date_gmt":"2016-05-16T10:00:26","guid":{"rendered":"http:\/\/itn.mattrock.ca\/?p=3701"},"modified":"2024-08-09T18:26:59","modified_gmt":"2024-08-09T16:26:59","slug":"news-in-brief-23","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2016\/05\/16\/news-in-brief-23\/","title":{"rendered":"News in Brief"},"content":{"rendered":"

US$50 billion awards against Russia in Yukos cases are set aside by Dutch court<\/strong><\/h2>\n

In a judgment dated April 20, 2016, the District Court of The Hague, in the Netherlands, set aside awards that had ordered Russia to pay US$50 billion to the shareholders of Yukos, a bankrupt oil company. An English translation of the judgment is available online<\/a>, and a summary of the awards, issued in July 2014 by a tribunal at the Permanent Court of Arbitration (PCA<\/span>), is available at the ITN<\/span> website<\/a>.<\/p>\n

The Dutch court found that the PCA tribunal lacked jurisdiction under the Energy Charter Treaty (ECT<\/span>) to arbitrate the cases against Russia. In particular, it noted that Russia had signed but never ratified the ECT, and that the Russian parliament had rejected its ratification. According to the court, \u201cbased only on the signature of the ECT, the Russian Federation was not bound by the provisional application of the arbitration regulations of Article 26 ECT.\u201d<\/p>\n

The court also found that Russian law prohibits bringing disputes of a public law nature to international arbitration without legislative approval. As the court understood that the Yukos case centred on a challenge to tax measures imposed by Russia, and as the ECT was not ratified, the court concluded that the dispute could not have been brought to arbitration.<\/p>\n

The decision could make it more difficult to enforce the awards in many countries. However, counsel for the Yukos shareholders, Yas Banifatemi of Shearman & Sterling, stressed<\/a> that \u201cenforcement courts will be at liberty to assess the award for themselves, irrespective of what the Dutch courts have to say on the matter.\u201d There are pending enforcement proceedings in Belgium, France, Germany, the United Kingdom, and the United States.<\/p>\n

TTIP draft to be prepared by July; ISDS<\/span><\/span> being built based on both the EU<\/span> and U.S. proposals<\/strong><\/h2>\n

Officials from the European Union and the United States gathered in Brussels for the 12th<\/sup> round of negotiations over the Transatlantic Trade and Investment Partnership (TTIP) from February 22 to 26.<\/p>\n

Among the topics discussed in February was the investor\u2013state dispute settlement (ISDS) mechanism. Bercero highlighted that the EU is proposing an Investment Court System<\/a> (ICS<\/span>) composed by a standing tribunal and an appeals mechanism. But the United States is not ready to abandon its long-standing ISDS model<\/a> recently reproduced in the TPP<\/a>. Bercero said<\/a> the partners are \u201cworking on the basis of textual proposals from both sides\u201d and trying to find convergence.<\/p>\n

TTIP faces wide opposition, particularly in Europe. Over 100,000 Dutch citizens have signed a petition demanding a referendum<\/a> on the agreement. The German Advisory Council on the Environment (SRU), which advises the federal government, indicated<\/a> that the agreement could endanger the environment and democracy. In Spain, the deputy president of the General Council of Attorneys, Oriol Rusca, declared<\/a> that TTIP is a threat to all citizens.<\/p>\n

China\u2013United States BIT<\/span>: ISDS to be included; ongoing negotiations on negative lists1<\/sup><\/strong><\/h2>\n

Since 2008, China and the United States have undergone 24 negotiation rounds for a bilateral investment treaty (BIT). On March 3, 2016, U.S. Trade Representative Michael Froman noted that the \u201chigh standard\u201d BIT being negotiated is \u201cin many respects similar to the investment chapter of TPP.\u201d<\/p>\n

Echoing Froman\u2019s statement, on March 23, Chen Deming\u2014China\u2019s former Minister of Commerce\u2014announced that the two countries have resolved some key roadblocks in the negotiations and agreed to rely on international arbitration to resolve investor\u2013state disputes. However, Chen also acknowledged that some major conflicts remain, mainly over the negative list on market access.<\/p>\n

Both parties hope to conclude negotiations before the end of President Obama\u2019s term, and preferably in August or September, before the U.S. presidential election enters into a critical stage.<\/p>\n

Three mining disputes: the first investment disputes against Colombia come to light2<\/sup><\/strong><\/h2>\n

On February 19, 2016, Cosigo Resources (Canada) and Tobie Mining and Energy (United States) submitted an arbitration request against Colombia under the Free Trade Agreements (FTAs) concluded by Colombia with the United States and Canada. The claimants argue that their investment in the mining concession of Taraira South was expropriated fraudulently and without compensation. The concession is located in the Amazon region, within the Yaigoj\u00e9 Apaporis Natural Park, created by the Colombian government by means of a resolution. The claimant seeks US$16.5 billion for expropriation and US$11 million for the costs incurred to acquire the concession.<\/p>\n

The Canadian company Eco Oro Minerals also announced a dispute with Colombia on its web page<\/a> in March, alleging a delay in the delimitation of the P\u00e1ramo de Santurb\u00e1n environmental protected area, where mining activities had been prohibited, and claiming that its investments suffered from adverse effects as a result. The company warned that, if no agreement were reached during the next six months, it would submit the dispute to international arbitration under the Colombia\u2013Canada FTAs.<\/p>\n

Finally, on March 16, the Swiss giant Glencore submitted a third claim<\/a> against Colombia at the International Center for Settlement of Investment Disputes (ICSID<\/span>), under the 2006 Colombia\u2013Switzerland bilateral investment treaty. The mining company claims that the Colombian government has cancelled its concession agreement that enabled the expansion of activities in the Calenturitas and La Jagua mines.<\/p>\n

Canada\u2013European Union CETA<\/span> re-concluded in February to incorporate the EU ICS proposal<\/strong><\/h2>\n

Responding to EU requests<\/a>, Canadian and EU officials reopened negotiations of the Comprehensive Economic and Trade Agreement (CETA) concluded in 2014 to reformulate the agreement\u2019s investor\u2013state dispute settlement (ISDS) clause. Re-concluded on February 29<\/a>, the CETA now includes a standing tribunal and an appeals mechanism, in line with the EU ICS proposal, also included in the recent EU\u2013Vietnam free trade agreement<\/a> (FTA<\/span>). The CETA parties also state the shared objective of establishing a permanent multilateral investment court.<\/p>\n

Second ICSID claim filed against Uruguay; Philip Morris decision still pending <\/strong><\/h2>\n

On March 24, the International Centre for Settlement of Investment Disputes (ICSID) registered<\/a> (Case No. ARB\/16\/9) a request for arbitration filed by U.S. telecom company Italba against Uruguay. The company alleges that Uruguay terminated a wireless spectrum licence in violation of the fair and equitable treatment standard under the Uruguay\u00ad\u2013United States bilateral investment treaty (BIT). This is the second ICSID case against Uruguay. The first was initiated by Philip Morris<\/a> in 2010 (Case No. ARB\/10\/7); a hearing on the merits was held in late October 2015.<\/p>\n

Singapore International Arbitration Centre releases investment arbitration rules3<\/sup><\/strong><\/h2>\n

On February 1, 2016, the Singapore International Arbitration Centre (SIAC) released draft rules tailored to investment arbitration (Draft SIAC Rules), to be finalized in May following public consultation<\/a>.<\/p>\n

Similarly to the Rules on Transparency in Treaty-based Investor\u2013State Arbitration\u00a0adopted by the United Nations Commission on International Trade Law in 2013 (UNCITRAL<\/span> Transparency Rules<\/a>), Rule 28 of the Draft SIAC Rules contains specific provisions on the participation of non-disputing parties. A non-disputing party that is a party to the contract or treaty has a prima facie<\/em> right to make certain written submissions. However, submissions by a non-disputing party that is not a party to the contract or treaty are subject to the tribunal\u2019s approval, depending on the confidentiality of proceedings, the extent that such submissions will bring a different perspective to relevant legal or factual matters, and whether the non-disputing party has a \u201csufficient interest\u201d in the proceedings.<\/p>\n

The Draft IA Rules do not directly address the issue of transparency, however. Unlike the UNCITRAL Transparency Rules, the Draft IA Rules do not contemplate either publication of information upon commencement of arbitral proceedings or publication of arbitration-related documents. They also do not provide that arbitration proceedings be made public.<\/p>\n

The Draft SIAC Rules mirror SIAC\u2019s commercial arbitration procedure in certain respects, for instance: upon receipt of a notice of arbitration, the SIAC\u2019s Court of Arbitration must appoint an arbitrator within 28 days (Rules 6 and 7); and, there are strict timelines for arbitral challenges to be made and ruled on (Rule 12). Also, upon express agreement of the parties, the Draft SIAC Rules provide for SIAC to appoint an \u201cemergency arbitrator\u201d to determine interim relief prior to the constitution of the main tribunal.<\/p>\n

Finally, the Draft SIAC Rules address third-party funding: a tribunal may order disclosure of a third-party funding arrangement (Rule 23), and may consider any such arrangements in apportioning arbitration costs (Rule 32).<\/p>\n

The Draft SIAC Rules are available at http:\/\/www.siac.org.sg\/images\/stories\/articles\/rules\/IA Rules (rev 20160115).pdf<\/a>.<\/p>\n

\n

Notes<\/em>:\u00a0The editorial team acknowledges, with many thanks, the contributions by Joe Zhang (1), Carolina Mu\u00f1oz Bernal (2), and Matthew Levine (3).<\/p>\n

At the end of the meeting, chief EU negotiator Ignacio Bercero and chief U.S. negotiator Dan Mullaney announced<\/a> that a consolidated draft would be prepared by July 2016, with brackets only for the \u201cmost sensitive issues.\u201d According to Mullaney, finalizing TTIP in 2016 would allow the partners to be \u201cthe standard setters rather than the standard takers\u201d in international trade. Two other negotiating rounds are planned before the summer break. The 13th<\/sup> round took place in New York, from April 25 to 29.<\/p>\n