Arbitration and Settlement through Recognized Channels

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Peace Palace in The Hague 1913 1899 & 1907 Hague Conventions 112 member nations Originally only inter-state disputes Arbitration is the most effective method Conciliation is also part of the PCA Good offices and mediation are less popular
http://www.pca-cpa.org/

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Arbitration is similar to litigation process Language and place are agreed upon by the two parties, The Hague is the default Evidence in oral testimonies and documents are submitted, witnesses can be called, experts may be appointed Each party has the burden of proving its case Upon completion of submissions, the tribunal may close the proceedings

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Hearings may be reopened prior to award Awards are made upon agreement of majority Awards are in writing, signed by arbitrators with reasons for absence of any signature, and awards are final and binding

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750 or 1500 processing fee 250/hour for Secretary General and Deputy Secretary General 175/hour for Senior Legal Staff 125/hour for Junior Legal Staff 50/hour for Secretarial/Clerical Staff Hearing space 1000/day, suite 1750/day for guest tribunals bureau@pca-cpa.org Hearing and meeting rooms, no charge Ancillary equipment charged separately

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Parties recognize and enforce awards made in territories of other contracting states (art1, 3) To obtain recognition and enforcement, applying party must show (1) award document; (2) arbitral agreement (art4) Recognition/enforcement may be refused if there is: incapacity in the agreement, lack of notice for arbitration or ability to present case, award is not related to subject matter of hearing, arbitral authority was outside of agreement, award has not yet become binding, r/e would be contrary to public policy (art5)

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The authority may set aside or adjourn a decision by ordering security transferred (art6) Bilateral or multilateral agreements are not precluded by the convention (art7) States, provinces, and locales are bound through Federal government State parties Reciprocity is mandatory (art14) 146 parties
http://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf

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Art 26 Settlement of disputes between an investor and contracting party 1st amicably, 2nd courts or agreed means To ICSID if State 1 or both are members To ad-hoc tribunal under UNCITRAL To Arbitration Institute of Stockholm CC Written agreement to apply UNCITRAL & New York Convention

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Arbitration held in NY Convention party state Awards are final and binding Art 27 Settlement of disputes between contracting parties, 1st diplomatically Either party may initiate ad-hoc tribunal
http://www.encharter.org/fileadmin/user_upload/document/EN.pdf#page=21 1

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Initiating party appoints tribunal member & informs second party w/I 30 days, 2nd party appoints tribunal member w/I 60 days, or 2nd is appointed, 3rd tribunal member (foreign) is president, SecGen appoints otherwise 150 d 2/3rds vote affirms action Arbitral awards are final and binding Costs are borne equally unless tribunal says Copies of awards are given to Sec-Gen PCA

Art 29 Following WTO model when at least one party is not a member Art 7.7 conciliation mechanism for transit disputes, faster and less formal 29 investor initiated cases and 1 state-state cases have been brought for arbitration Some states withheld unconditional consent to intl arbitration, some states withheld unconditional consent when investors already submitted the dispute to a national court or agree-upon mechanism

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Arbitration Rules: http://www.pcacpa.org/upload/files/UNCITENG(1)(1).pdf

Upon prior written agreement (art1) Claimant notifies Respondent , proceedings commence on date of receipt of notice (art3) Parties represented by persons of their choice, names and addresses communicated (art4) 1 or 3 arbitrators, 3 if parties do not agree on 1 within 15 days of commencement (art5), parties may choose a sole arbitrator or have 1 appointed (art6), each party appoints 1 arbitrator when 3 are used & those 2 then appoint a 3rd who acts as president; Sec-Gen may appoint arbitrators otherwise (art 7)

Parties may challenge arbitrators (art9-12) or replaced (art13), which may result in rehearing of the arbitration (art14) Arbitrations are heard in the manner described on the PCA slides Awards may be made public only with the consent of both parties (art32) The tribunal applies laws designated by the parties, and decisions are based on the contracts (art33)

When conflicts exist the tribunal may follow a hierarchy and prioritization of law: International law takes the lead, then custom and good practices, then general principles, then stare decisis & prior decisions, scholarly opinion, and ex aequo et bono (in justice and fairness) when expressly authorized Within 30 days after award (order), either party may request interpretation, correction, or addition to the award (art35-37) Fees are assessed depending on the needs of the cases, for experts, time, travel, etc., and greater costs are assigned to the loser (art 38-40); equal deposits by both parties are required (art41)

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Ensures conservation and equitable usage of resources, protection and preservation of environment of the sea Regarding sovereignty, rights of usage in maritime zones, navigational rights 160 States ratified Disputes may be settled at the PCA, International Tribunal for the Law of the Sea (ITLOS) in Hamburg, Germany, ICJ in The Hague, with ad-hoc or special tribunals Annex VII leads to arbitration, 6 cases since 1994, 5 of which were arbitrated at PCA

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Aut us i stituti under nventi n n t e ettlement f Investment isputes et een t tes nd ti nals f t er tates ( ashingt n nventi n) ver member tates, ntracting states required t enf rce I I arbitral awards art f the rld ank system Facilitates conciliation and arbitration of disputes between governments and private investors, at least one of which is of a member nation

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Voluntary initiation, but unilateral withdrawal after consent is prohibited Domestic courts in member nations may not set aside arbitral awards Process works very much like PCA/UNCITRAL 1, 3, or 5 arbitrators; parties submit recommendations, may challenge; Sec-Gen may assist appointment; replacement, resignation, incapacity, disqualification is possible; vacancies shall be filled (rules 1-12) Tribunal begins sessions w/I 60 days (r13)

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Deliberations are private and secret (r15) Decisions are reached by majority (r16) Parties have legal counsel (r18) Language & procedures of choice (r20-22) Much like litigation, oral & written statements, documents, evidence, experts are presented (r29-37) Closed when parties have finished presentations, may be reopened w/ new evidence prior to award (r30)

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Formal objections on jurisdiction are heard, and proceedings may be suspended (r41) Failure to appear or present a case results in default; 60 days is given, continued default is considered acquiescence (r42) Awards are written and signed w/I 120-180 days of closure, dissenting opinions may accompany (r4648) Application for annulment w/I 120 days; tribunal not properly constituted; exceeded its powers; departed from rules; awarded not based on reasons stated; corruption (r50)
http://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf

ICSID Registration to: Registration content Sec-Gen, IR1 Parties, addresses, arb. clause, dispute, exhaustion of remedies statement, # arbitrators (opt) IR2-3 Uneven, AR2 10 d for # by p1, 20 d aft acc/den, return & 20 d again, 60 d total & SG decides #, appoint w/i 60 more days, AR2

UNCITRAL Arb. Rules Other party, art3 Demand, parties, addresses, arb. clause, claim summary, relief sought, # arbitrators, appointment proposal (opt), art3 1 or 3, art 5 15 d for #, 30 d after determining #, 30 more days SG is appointing authority, 15 d for objection, 30 d for 2 arb to choose 3rd, art6-8

# of arbitrators Time limit for appointment

ICSID Provision for replacement of arbitrators Language Time limits Evidence & hearings Oath for witnesses Camera recorded Default Award Rule 7

UNCITRAL Arb. Rules Article 13

Rule 22 Rule 26, not specified Chapter IV Yes, Rule 35 Not specified Rule 42, 60 days Rules 46-48, w/i 120 days (+60)

Article 17 Article 23, 45 days Articles 24-27 Not specified Yes, Article 25(4) Art 28, time not specified Art 32, time not specified

ICSID Interpretation of Rule 50, detail points needing the award clarification Revision of the award Rule 50, upon discovery of new fact/evidence, w/i 90 days of discovery & 3yrs of rendering

UNCITRAL Arb. Rules Art 35, apply w/i 30 days, reply w/i 45 d Art 36-37, apply w/i 30 days of rendering, replies made w/i 30 more days for correction, 60 for add Not specified, see Art V NY Convention or Art 34 of the UNCITRAL Model Law

Annulment

Rule 50, w/i 120 d of rendering if tribunal: was improperly constituted, exceeded its powers, was corrupt, departed from rule, did not state reason for award; was corrupted (120d of discovery, w/i 3 yr of award)

Limited Use ` Only 50 cases past and pending have been handled at the PCA ` 6 cases under Annex VII of UNCLOS since 94 ` 225 past, 130 pending @ ICSID ` 4644 awards rendered @ ICC 1999-2010 ` 621 total intl cases @ SCCAI 2003-2010
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http://www.pca-cpa.org/showpage.asp?pag_id=1029 http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=ListCases

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http://www.encharter.org/index.php?id=213 http://www.iccwbo.org/court/arbitration/id5531/index.html http://www.sccinstitute.com/statistik-2.aspx

Its assumed that with increased caseload and awards, contests will increase State parties may refuse to recognize awards rendered against Enforcement is still troublesome, M&A, insolvency, dissolution affect claims No real world government, no real institution for settlement of debts or enforcement Consistent jurisdictional immunities and restrictions

Securing receipt of awards ` Insurance fund ` Central Bank access, lines of credit ` Mandatory State party balances at a multinational holding institution/fund ` Cross-jurisdictional bank agreements to authorize extra-territorial pursuit upon award ` More comprehensive international cooperation, setting time frame for delivery ` Credit-rating effects, stigmatize delinquency

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International registration of claims & awards Case follow-up Record of receipt of awards Singular international case management database, which tribunals submit info to Larger-order, multijurisdictional, international operations and case statistics Agency involvement Domestic enforcement mechanisms