Investment Law Archives - international litigation blog
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Investment Law

The Peruvian State’s Response to International Investment Disputes

The dispute settlement system between foreign investors and host States of investment has seen an important development in recent years. This should not be a surprise if we consider that the trend of signing bilateral agreements for the promotion and protection of investments had a notable increase at the beginning of the nineties. These agreements establish a series of guarantees and minimum protections for foreign investment, as well as a mechanism for the resolution of disputes that may arise with respect to alleged breaches of said commitments. The vast majority of proceedings initiated at the International Centre for Settlement of Investment Disputes (ICSID) are based on an alleged breach of one of these instruments.

Peru has not been a stranger to the tendency of signing international agreements for the promotion and protection of investments and, unfortunately, it has also seen a sharp increase in new international investment controversies in recent years.

After facing a first case in 2003, Peru understood the importance of being able to efficiently and effectively organize its defence, establish coordination mechanisms within the State, centralize all relevant information and define the responsibilities of the entities involved in the controversies.READ MORE

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A Watershed Moment for ISDS Reform

Last week marked a watershed moment for the movement to reform investor-state dispute settlement (ISDS). Meeting in Vienna, Delegates to the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WGIII) agreed to work multilaterally to reform the resolution of investment disputes. Delegates agreed to focus on responding to key systemic concerns with ISDS, as identified in WGIII’s two previous sessions.[1]

WGIII began its work on ISDS in Vienna last year, at its 34th Session. From the start, Delegates divided the process into three broad phases: identifying concerns about ISDS (Phase I); deciding which concerns, if any, were ripe for multilateral reform in UNCITRAL (Phase II); and designing options for reforms responding to any such concerns (Phase III). Phases I and II would be of prime importance in setting the frame. Though additional concerns can always be raised, any agenda for reform would be largely grounded in the problems identified in these early meetings. WGIII began its work identifying concerns with ISDS in 2017 and essentially concluded Phase I at its 35th Session in New York last Spring. By the end of that meeting, WGIII had identified a range of procedural and structural concerns with ISDS, relating to: (i) fragmented arbitral outcomes; (ii) the arbitrators charged with adjudicating disputes; (iii) matters of duration and cost; and (iv) third-party funding.READ MORE

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Opinion 1/17 on CETA: Hearing Report

On 26 June 2018, the Court of Justice of the European Union (the CJEU) heard the legal arguments raised by the institutions of the European Union and by some EU Member States in Opinion 1/17 on the compatibility of the Investment Court System (ICS) provided for in the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

As we discussed before, the CJEU is requested to provide an opinion regarding the compatibility of the ICS contained in CETA with respect to: (i) the exclusive competence of the CJEU, pursuant to Article 267 of the Treaty on the Functioning of the European Union (TFEU), to give a binding interpretation of EU law; (ii) the general principle of equality and the practical effect (‘effet utile‘) of EU law; (iii) the right of access to courts; and (iv) the right to an independent and impartial judiciary.

I was unfortunately unable to attend this hearing. However, my friend José Rafael Mata Dona attended the hearing and has kindly provided us with a summary of the main points which were raised.READ MORE

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Netherlands to Modernize Model BIT

The Netherlands is currently modernizing its model bilateral investment treaty (model BIT) and has recently published the draft of the new model BIT that the government intends to use as a basis for (re-)negotiating their existing and future bilateral investment treaties with non-EU Member States.

Following numerous recent criticisms involving investment protection and investment arbitration, the new draft model BIT is clearly aimed at striking a better balance between the rights and duties of host States, on the one hand, and investors, on the other hand. To this end, the draft model BIT introduces some interesting developments. In particular, it introduces stricter requirements for investors seeking protection.

With respect to investment arbitration, the draft model BIT provides for the following key changes:READ MORE

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Council of the EU Adopts New Approach on Negotiating and Concluding EU Trade and Investment Agreements

Yesterday (22 May 2018), the Council of the European Union adopted its conclusions to the new approach on the negotiation of EU trade and investment agreements.

The adoption of this new approach is a direct consequence of Opinion 2/15 of the Court of Justice of the European Union (the CJEU) on the division of competences between the EU and its Member States.READ MORE

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Achmea: Potential Consequences for CETA, the Multilateral Investment Court, Brexit and other EU trade and investment agreements

This article has jointly been co-authored with Isabelle Van Damme

On 6 March 2018, the Court of Justice of the European Union (the CJEU) delivered its long-awaited judgment in Case C-284/16 Achmea. This case raised the issue of whether an arbitration clause in a bilateral investment treaty (BIT) concluded between two EU Member States (intra-EU BIT) is compatible with European Union (EU) law and, in particular, with the autonomy of the EU legal order.

As discussed in two previous posts (here and here), Advocate General Wathelet delivered, on 19 September 2017, an Opinion in strong support of international arbitration. He found that an arbitration clause such as that at issue in Achmea was not incompatible with EU law. The CJEU disagrees.

In this article, we summarise the key findings of the CJEU’s judgment and analyse its potential consequences for the EU-Canada Comprehensive Economic and Trade Agreement (CETA), for the proposed Multilateral Investment Court and for future EU trade and investment agreements (including the future agreement between the European Union and the United Kingdom).READ MORE

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Validity of Arbitration Clauses in Intra-EU BITs – Some Thoughts on AG Wathelet’s Opinion in Achmea (Part 2)

Without further delay, here is the second part of my analysis of Advocate General Wathelet (AG Wathelet*)’s opinion (the Opinion) in the Achmea case (check my previous post for a factual background on this case).

As previously discussed, the issue put before the Court of Justice of the European Union (the CJEU) in this case concerned the compatibility, with respect to EU law, of an arbitration clause contained in an intra-EU bilateral investment treaty (a BIT).

In the first part of my analysis, I have examined AG Wathelet’s answers to:

– the question regarding the alleged discriminatory character (contrary to Article 18 of the Treaty on the Functioning of the European Union (TFEU)) of an arbitration clause contained in an intra-EU BIT; and

– the possibility for arbitral tribunals established in accordance with an intra-EU BIT to refer questions to the CJEU for preliminary rulings.

As promised in my last post, this article now covers the issue of whether an arbitration clause contained in an intra-EU BIT infringes Article 344 TFEU which prohibits EU Member States from submitting a dispute concerning the interpretation or application of EU law to any other method than those provided for in the EU treaties.READ MORE

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