Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-23T03:35:51.505Z Has data issue: false hasContentIssue false
  • English
  • Français

Assessing the Rules of Appointing Arbitrators under the EU’s Investment Court System

Published online by Cambridge University Press:  22 March 2019

Chi-Chung Kao
Chi-Chung Kao*
Affiliation:
Department of Ocean and Border Governance, National Quemoy University, 1 University Road, Jinning Township, Kinmen County 892, Taiwan, Republic of China. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

In recent years investor–state arbitration has faced a number of criticisms, such as the pro-investor allegation, the lack of transparency and the regulatory chilling effect. In 2015, the EU proposed an Investment Court System (ICS) in the investment chapter of the Transatlantic Trade and Investment Partnership negotiated between the EU and the US. This new mechanism is designed to improve the investor–state dispute settlement mechanisms, in particular the investor–state arbitration. A unique feature of the ICS is that it deprives the right of the disputing parties to appoint arbitrators. This is an apparent departure from the common practice of conventional investor–state arbitration, such as that conducted under the rules of the International Centre for Settlement of Investment Disputes. This new approach seems to formulate itself on the pro-investor hypothesis that asserts that the appointment of an arbitrator by an investor will lead to the appointee’s bias in favour of the investor. This paper assesses whether such methodology is justifiable and necessary by discussing the pro-investor allegation and rebutting it with empirical evidence. This paper considers the challenge procedure as the more appropriate and practical safeguard against an arbitrator’s bias.

Type
Articles
Information
European Review , Volume 27 , Issue 2 , May 2019 , pp. 210 - 219
Copyright
© Academia Europaea 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

References and Notes

1. European Commission (2015) Press release, Commission proposes new Investment Court System for TTIP and other EU trade and investment negotiations, http://europa.eu/rapid/press-release_IP-15-5651_en.htm (accessed 30 May 2016). The EU’s negotiating text of the TTIP, referred hereinafter, is as of November 2015, http://trade.ec.europa.eu/doclib/docs/2015/november/tradoc_153955.pdf (accessed 10 July 2016).Google Scholar
2. Negotiation for CETA was completed in August 2014. A legal review of the text has also been finished. The CETA is currently pending signatures of the Contracting Parties before its entry into force. See EU, In Focus: CETA, http://ec.europa.eu/trade/policy/in-focus/ceta/ (accessed 30 May 2016). The text of the CETA referred hereinafter is the official version provided by the EU, as of July 2016, http://trade.ec.europa.eu/doclib/docs/2014/september/tradoc_152806.pdf (accessed 10 July 2016).Google Scholar
3. Negotiation for the EU–Vietnam FTA has been finished and the treaty is pending legal revision and ratification as of January 2016. See EU, News Archive: EU–Vietnam FTA: Agreed Text as of January 2016, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437 (accessed 30 May 2016). The text of the EU–Vietnam FTA referred hereinafter is the official version provided by the EU, as of July 2016, http://trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154210.pdf (accessed 10 July 2016).Google Scholar
4. The term ‘ICS’ appears formally for the first time in the EU’s negotiating text of the TTIP. In the EU–Vietnam FTA, it is called the ‘Investment Tribunal System’. For the convenience of discussion, this paper uses the term ‘ICS’ uniformly.Google Scholar
5. CETA, art. 8.28.1; EU–Vietnam FTA, Chapter 8: Trade in Services, Investment and E-Commerce, Chapter II: Investment (Investment Chapter of EU–Vietnam FTA), Section 3, art. 13.1; TTIP, Trade in Services, Investment and E-Commerce, Chapter II – Investment (Investment Chapter of TTIP), Section 3, art. 10.1.Google Scholar
6. CETA, art. 8.28.2; Investment Chapter of EU–Vietnam FTA, Section 3, art. 28.1; Investment Chapter of TTIP, Section 3, art. 29.1.Google Scholar
7. CETA, art. 8.27.2-5; Investment Chapter of EU–Vietnam FTA, Section 3, art. 12.2-5, art. 13.2-5; Investment Chapter of TTIP, Section 3, art. 9.3-5. art. 10.2-5.Google Scholar
8. CETA, art. 8.27.6-7; Investment Chapter of EU–Vietnam FTA, Section 3, art. 12.6-7, art. 13.8-9; Investment Chapter of TTIP, Section 3, art. 9.6-7. art. 10.8-9. Although the text of the Agreements does not use the term ‘arbitrator’ (under the ECTA and the EU–Vietnam FTA the term ‘Members of the Tribunal’ is used, whilst the term ‘Judges’ is used in the TTIP), the wording of certain provisions indicates the ICS’s resemblance to arbitration. For example, under the CETA, dispute may be submitted under specific arbitration rules (CETA, art. 8.23.2); the respondent consents in writing to the settlement of dispute by the ICS, as required by Article 25 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and Article II of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) (CETA, art. 8.25); the UNCITRAL Rules on Transparency in Treaty-based Investor–State Arbitration (UNCITRAL Transparency Rules) is applicable to the ICS proceedings (CETA, art. 8.36.1); final award issued by the tribunals of the ICS is deemed to fall with the scope of the New York Convention (CETA, art. 8.41.5). Accordingly, this article considers the ICS proceedings as arbitral proceedings in essence, and uses the term ‘arbitrator’ when referring to the adjudicators under the ICS.Google Scholar
9. CETA, art. 8.36.1; Investment Chapter of EU–Vietnam FTA, Section 3, art. 20.1; Investment Chapter of TTIP, Section 3, art. 18.1.Google Scholar
10. CETA, art. 8.9.1.Google Scholar
11. CETA, art. 8.9.2.Google Scholar
12. CETA, art. 8.32, 8.33, 8.39.5.Google Scholar
13. Investment Chapter of TTIP, Section 3, art. 2.1.Google Scholar
14. ICSID Convention, art. 13.Google Scholar
15. ICSID Rules of Procedure for Arbitration Proceedings, Rule 2.Google Scholar
16. See generally, P. Eberhardt and C. Olivet (2012) Profiting from Injustice: How Law Firms, Arbitrators and Financiers Are Fuelling an Investment Arbitration Boom, published by Corporate Europe Observatory (CEO) and Transnational Institute (TNI), http://corporateeurope.org/sites/default/files/publications/profiting-from-injustice.pdf (accessed 10 July 2016).Google Scholar
17. Van Harten, G. (2012) Pro-Investor or Pro-State Bias in Investment Treaty Arbitration? Forthcoming Study Gives Cause for Concern, http://www.iisd.org/itn/2012/04/13/pro-investor-or-pro-state-bias-in-investment-treaty-arbitration-forthcoming-study-gives-cause-for-concern/#_ftn2 (accessed 10 July 2016).Google Scholar
18. European Commission (2015) Concept Paper, Investment in TTIP and Beyond – The Path to Reform: Enhancing the Right to Regulate and Moving from Current Ad Hoc Arbitration towards An Investment Court, pp. 6–7, http://trade.ec.europa.eu/doclib/docs/2015/may/tradoc_153408.PDF (accessed 10 July 2016). See also European Commission (2015) Reading guide. Draft Text on Investment Protection and Investment Court System in the Transatlantic Trade and Investment Partnership (TTIP) (stating that the new rules proposed for the ICS are an effective way to insulate judges from any real or perceived risk of bias), http://europa.eu/rapid/press-release_MEMO-15-5652_en.htm (accessed 10 July 2016).Google Scholar
19. European Federation for Investment Law and Arbitration (EFILA) (2015) A Response to the Criticism against ISDS, p. 6, http://efila.org/wp-content/uploads/2015/05/EFILA_in_response_to_the-criticism_of_ISDS_final_draft.pdf (accessed 10 July 2016).Google Scholar
20. ICSID (2018) The ICSID Caseload – Statistics (Issue 2018-1), p. 7, https://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202018-1(English).pdf (accessed 23 October 2018).Google Scholar
21. N. Blackaby and C. Partasides, with A. Redfern and M. Hunter (2015) Redfern and Hunter on International Arbitration (student version, 6th edn). (Oxford: Oxford University Press), p. 378.Google Scholar
22. UNCITRAL Arbitration Rules (2013), art. 27.1.Google Scholar
23. IBA Guidelines (2014), Introduction, http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx (accessed 10 July 2016).Google Scholar
24. Caratube v. Kazakhstan, ICSID Case No. ARB/13/13, Decision on the Proposal for Disqualification of Mr. Bruno Boesch (20 March 2014), http://www.italaw.com/sites/default/files/case-documents/italaw3133.pdf (accessed 10 July 2016).Google Scholar
25. Blue Bank v. Venezuela, ICSID Case No. ARB/12/20, Decision on the Parties’ Proposal to Disqualify a Majority of the Tribunal (12 November 2013), http://www.italaw.com/sites/default/files/case-documents/italaw3009.pdf (accessed 10 July 2016).Google Scholar
26. Burlington Resources, Inc. v. Ecuador, ICSID Case No. ARB/08/5, Decision on the Proposal for Disqualification of Professor Francisco Orrego Vicuña (13 December 2013), http://www.italaw.com/sites/default/files/case-documents/italaw3028.pdf (accessed 10 July 2016).Google Scholar