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international litigation blog

Brexit (1): Can Arbitration be Used to Fix Unresolved U.K.-EU Matters?

Brexit is definitely a source of political, legal, financial and diplomatic uncertainties. It is also a source of discussions in arbitration and international litigation circles. Indeed, Brexit will certainly have an impact of London has a hub for arbitration (something that we discussed earlier with Professor Bermann), but it will also have a strong impact on the litigation practice in the United Kingdom (the U.K.).

In this context, I have decided to devote a series of blog posts on those issues. The first of those blog posts has kindly been drafted and prepared by my colleague, Benedict Blunnie (intern at Van Bael & Bellis) on the possibility, for the European Union (the EU) and the U.K., to have recourse to arbitration as a means to solve their unfinished business.READ MORE

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Case to Watch: Dutch Supreme Court Expected to Rule on Applicable Law in Air-Cargo Competition Damage Claims

On 2 August 2017, the Amsterdam District Court handed down a ruling in which it announced its intention to refer to the Dutch Supreme Court the issue of which laws apply in mass damage claims brought against airlines carriers accused of having operated a cartel in the air-cargo sector.

In 2010*, the European Commission adopted a decision in which eleven air carriers (including British Airways, Air France/KLM, Air Canada and Lufthansa) were fined a total of almost EUR 800 million for fixing prices for fuel and security surcharges on airfreight services.

In the aftermath of this decision, many allegedly injured customers brought follow-on damage claims in multiple jurisdictions against the air-carriers, seeking compensation for their losses. The case at hand is one of those follow-on damage claims and was initiated before the Dutch courts by Stichting Cartel Competition, a litigation vehicle consolidating the claims and representing the interests of 266 freight customers.

Among the many complex issues which arise in the context of this dispute, the question of which law actually applies to such follow-on damage claims is particularly interesting.READ MORE

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Exclusive Interview with George A. Bermann (Columbia Law School)

Dear Reader,

As this blog aims at providing fruitful and inspiring thoughts in the field of international litigation and arbitration, I thought that an innovative way to deliver those objectives would be to seek insights and reflection from prominent international litigators and arbitration practitioners.

The first person to have kindly agreed to answer my questions is Professor George A. Bermann.READ MORE

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Mauritius Convention Soon to Enter into Force

On 18 October 2017, the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (the Mauritius Convention or the Convention) will enter into force. This follows Switzerland’s ratification of the Convention on 18 April 2017*.

The Mauritius Convention (which was drafted under the auspices of the United Nations Commission on International Trade Law – UNCITRAL) extends the applicability of the UNCITRAL Rules on Transparency in Treaty-based investor-State Arbitration (the UNCITRAL Transparency Rules), to investor-State arbitration proceedings conducted under an investment treaty concluded before 1 April 2014.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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Validity of Arbitration Clauses in Intra-EU BITs – Some Thoughts on AG Wathelet’s Opinion in Achmea (Part 1)

On 19 September 2017, Advocate General Wathelet (AG Wathelet)* handed down a long-awaited, surprising and potentially far-reaching opinion (the Opinion) on the compatibility, with respect to EU law, of an arbitration clause contained in an intra-EU bilateral investment treaty.

The dispute at hand concerned a Dutch insurance company, Achmea (Achmea), which had established a subsidiary in Slovakia in order to market private sickness insurance products in this country. In 2008, following a change of legislation in the insurance sector in Slovakia, Achmea initiated investor-State arbitral proceedings against that State on the basis of a bilateral investment treaty (a BIT) entered into in 1991 between the former Czechoslovakia and the Netherlands (the Czechoslovakia-Netherlands BIT). Essentially, Achmea alleged that Slovakia’s legislative amendments violated certain provisions of the BIT.

In 2012, the arbitral tribunal sided with Achmea and issued an award ordering Slovakia to pay Achmea damages of approximately EUR 22 million.

Subsequently, and since the place of arbitration was in Germany, Slovakia brought an action before the German Courts seeking the annulment of the award rendered against it. In those proceedings, Slovakia argued that:

– The arbitration clause contained in the Czechoslovakia-Netherlands BIT infringed the prohibition of discrimination on grounds of nationality contained in Article 18 of the Treaty on the Functioning of the European Union (TFEU). More particularly, Slovakia argued that the arbitration clause contained in the Czechoslovakia-Netherlands BIT was discriminatory since it only offered Dutch investors the possibility to recourse to arbitration to solve their dispute with Slovakia whereas investors of the Member States which had not concluded any BIT with Slovakia were precluded from benefiting from a similar treatment.

– The award rendered against Slovakia was contrary to public policy since the arbitral tribunal established in accordance with the Czechoslovakia-Netherlands BIT – being unable to request the Court of Justice of the European Union (CJEU) to give a preliminary rulings on the interpretation of EU law – failed to take account of fundamental principles of EU law (such as rules on the free movement of capital or the rights of defence). This argument was based on the fact that, pursuant to Article 267 of the TFEU, only courts and tribunals of Member States are entitled to request the CJEU to give a preliminary ruling on a matter pending before them. However, the arbitral tribunal established pursuant to the Czechoslovakia-Netherlands BIT was not a “court or tribunal of a Member State” and it was therefore not entitled to request preliminary rulings from the CJEU.

– The arbitration clause contained in the BIT infringed Article 344 TFEU which prohibits EU Member States from submitting a dispute concerning the interpretation or application of EU law to any other method that those provided for in the EU treaties.

Uncertain as to the answers to those issues, the German court stayed the proceedings and referred the matter to the CJEU for a preliminary ruling. Prior to the judgment of the CJEU (which will be delivered in the coming weeks/months), AG Wathelet handed down his independent Opinion.READ MORE

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Multilateral Investment Court – Belgium Seeks Opinion to CJEU while EU Commission Requests Authorisation to Open Multilateral Negotiations

As we already discussed in several posts before (here, here, here and here), the European Commission (the Commission) has been pushing forward the establishment of a multilateral investment court (Multilateral Investment Court) in order to address the numerous criticisms concerning the existing investor-State dispute resolution (ISDS) mechanisms.

In essence, the Commission’s proposal aims at dealing with procedural issues arising in the context of ISDS. In this vein the Commission proposes:

(i) The creation of a permanent investment court which would have exclusive jurisdiction to rule on investment claims and would therefore render forum-shopping and multiple parallel proceedings impossible;

(ii) That this permanent court would be composed of a First Instance Tribunal and an Appellate Tribunal;

(iii) That judgments would be made by publicly appointed judges; and

(iv) That proceedings would be transparent and a right to intervene for all interested countries would be provided.

The original idea of the Commission was to institutionalise the system for the resolution of investment disputes within each bilateral investment treaty concluded by the European Union (the EU). Such a system (called the Investment Court System (ICS)) was the method followed during the negotiations for the EU-Canada Comprehensive Economic and Trade Agreement (CETA). The Commission, however, has since realised that, in the long run, this approach would lead to a duplication of the system (since there would be one ICS for each of the different investment treaties entered into by the EU) as well as further administrative and budgetary complexities. In order to address this issue, the EU decided to push its proposal one step further and suggested that, instead of negotiating bilateral ICS, it would seek the establishment of an international court which would have jurisdiction to hear investment disputes.

The idea has received a positive echo from the United Nations Commission on International Trade Law (UNCITRAL) in July 2017. Indeed, UNCITRAL has agreed to consider a possible reform of the existing ISDS mechanisms and to act as a forum for negotiations in order to consider a reform of the existing systems.

In anticipation of those negotiations (which are scheduled to begin shortly), the Commission published, on 13 September 2017, a Recommendation (the Recommendation) for a Council Decision authorising the opening of negotiations for a Convention establishing a Multilateral Investment Court.

This Recommendation (adopted pursuant to Article 218 of the Treaty on the Functioning of the EU) aims (i) at allowing the Council of the EU to authorise the opening of negotiations for the establishment of a Multilateral Investment Court; and (ii) at appointing the Commission as EU representative during those negotiations.READ MORE

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