2017 In Review – 2018 In Perspective
Now that 2018 is well underway, I wanted to mark the beginning of the new year by summarizing some key arbitration/international litigation highlights from 2017 and to discuss what 2018 is likely to offer.
2017 developments in the field of investment law
As you will recall, the last few months have seen some crucial developments in the field of investment arbitration.
Opinion 2/15 of the Court of Justice of the European Union (the CJEU) on the allocation of competences between the European Union and its Member States for the conclusion of the EU-Singapore Free Trade Agreement was a landmark development in which the CJEU held that the European Union was not entitled to include investor-State dispute resolution (ISDS) mechanisms provisions in its future trade agreements without requesting the involvement of its Member States.
Another highlight took place in July when UNCITRAL agreed to consider a possible reform of the existing ISDS mechanisms which could ultimately lead to the establishment of a multilateral investment court.
Finally, in October, the Mauritius Convention – which aims at extending the applicability of the UNCITRAL Rules on Transparency in Treaty-based investor-State Arbitration to investor-State arbitration proceedings – entered into force.
2017 developments in the United States
Meanwhile, in the United States, courts confirmed that annulled arbitral awards remained potentially enforceable when their annulment was “repugnant to fundamental notions of what is decent and just” (see D.C. Circuit in Getma), a topic that we will discuss in an upcoming post.
Additionally, the United States Court of Appeals for the Second Circuit rendered a decision in which it held that the Foreign Sovereign Immunities Act (FSIA) provided the sole basis for jurisdiction over a foreign State in actions to enforce ICSID awards in the United States. This ruling effectively prevents ex parte enforcement of ICSID awards against foreign States in the United States and obliges an award-creditor to provide notice to the foreign State in order to enforce an ICSID award against that State.
Finally, in Kindred, the U.S. Supreme Court ruled that the Federal Arbitration Act pre-empted a state-law rule requiring that a power of attorney expressly refer to arbitration in order to allow an attorney-in-fact to bind his or her principal to an arbitration agreement.
2017 developments in Asia and Africa
On the other side of the Pacific, the issue of third party funding gained greater attention after Hong Kong and Singapore both adopted provisions in this field. Meanwhile, in Africa, OHADA (Organization for the Harmonization of Business Law in Africa) adopted and updated its Uniforms Acts on arbitration and mediation and Angola became a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Turning to 2018, it can safely be predicted that investment arbitration will remain a hot topic in Europe (and potentially also in 2019) as important cases remain pending on the CJEU’s docket.
Among those decisions, international litigators and arbitration practitioners should in particular be alert for the CJEU’s decisions and opinions concerning:
– Achmea – a case regarding the validity of intra-EU BITs and for which Advocate General Wathelet delivered a surprising Opinion in September 2017 finding (among other things) that arbitral tribunals established in accordance with an intra-EU BIT must be regarded as courts or tribunals of one of the Member States and were therefore entitled to refer questions to the CJEU for preliminary rulings;
– Micula – a case on whether compensation paid to an investor by an EU Member State in order to comply with an arbitral award rendered in the investor’s favour amounted to an illegal State aid; and
– the opinion submitted by Belgium on the compatibility (with EU law) of the investment court system provided for in the EU-Canada Free Trade Agreement.
In the United States, arbitration practitioners will look carefully to the upcoming U.S. Supreme Court Opinion in Epic System, a case which will provide Justice Gorsuch’s first opportunity to express his views on arbitration since he joined the Court.
This post constitutes a longer version of a column which will be published at the end of this month in an arbitration newsletter published by Columbia Law School.