Investment & Trade Dispute Settlement (Lecture 2) Flashcards
Principal features of WTO DS system ? (6)
1/ single unified DS system
2/ principle of reverse consensus (=> compulsory jurisdiction of WTO panels)
3/ exclusive jurisdiction (Art 23 DSU)
4/ procedure for appellate review
5/ improved surveillance mechanisms for implementation of rulings + recommendations
6/ strict timeframes for each stage of DS
4 steps of WTO DS process ?
1/ consultation
2/ panel procedures
3/ appellate procedures
4/ implementation + enforcement
Characteristics of WTO DSB ? (3)
1/ political organ composed of all WTO Member gvts
2/ ‘reverse consensus’ for key decisions
3/ authority to :
i) establish panels
ii) adopt panel + AB reports
iii) supervise implementation of rulings + recommendations
iv) authorise suspension of concessions or other obligations under covered agreements (retaliation)
Who has access to WTO DSB ? (2)
1/ only WTO members
2/ amicus curiae briefs are allowed
Causes of action (& types of complaint) setting in motion WTO DS system ?
Types of causes of action :
1/ nullification and impairment of benefits
2/ impedance of attainment of objective of WTO agreement
Types of complaint :
1/ violation complaint
2/ non-violation complaint
3/ situation complaint
Applicable law in WTO DS system ? (3)
1/ no explicit provisions in DSU
2/ thus, generally application of relevant provisions of covered agreements
3/ but, question abt relationship btwn WTO rules/IL rules :
i) VCLT rules often cited as rules of CIL
ii) IL rules as supplementary means of interpretation of WTO agreements ?
iii) panels + AB cannot add or diminish rights & obligations provided in WTO agreements
Characteristics of consultation in WTO DS system ? (4)
1/ first step of DS system
2/ strict timeframe
3/ DSB plays a role
4/ can continue during panel proceedings
Composition WTO panels ? (3)
1/ 3 or 5 panellists
2/ Secretariat proposes nominations
3/ well qualified individuals + independence and impartiality
Scope of jurisdiction WTO panels ?
Only claims under WTO covered agreements
( ! ) but debate about broad interpretation of jurisdiction so as to allow decisions on all issues necessary to settle dispute
3 steps of the WTO panel procedure ?
1/ examination
2/ interim review
3/ issuance of final report
Legal effects of panel and AB reports ? (3)
1/ no provision in DSU
2/ parties must accept + implement rulings/recommendations
3/ no principle of binding effect (but nuance, becomes part of the acquis of WTO DS system and creates legitimate standards of expectation)
3 remedies for breach of WTO law ?
1/ withdrawal or modification of WTO-inconsistent measures
2/ compensation
3/ suspension of concessions/other obligations (i.e. retaliation)
Characteristics of compensation ? (3)
1/ voluntary
2/ offers a benefit
3/ measure extended to all members
Characteristics of retaliation ? (5)
1/ must be authorised by DSB upon request
2/ various requirements
3/ level of suspension must be equivalent to the level of nullification or impairment
4/ applies until removal of inconsistent measures or mutually satisfactory decision
5/ if objection to suspension, arbitration is mandatory
Difficulties with retaliation ? (3)
1/ countermeasures are of a bilateral nature (pertinent for weaker members ?)
2/ raise of trade barriers (threat to progress of trade liberalisation & free trade principles)
3/ determination equivalent level to level of nullification/impairment is difficult
Legal nature WTO panel procedure ?
Sui generis system with mixed character of judicial settlement and conciliation :
1/ ad hoc basis (arbitration)
2/ panel procedures + predetermination of applicable law by DSU + AB’s ultimate role to deal with cases (judicial settlement)
3/ regular consultation with parties + opportunities to dvp mutually satisfactory decisions (conciliation)
3 ways arbitration is integrated in the WTO system ?
1/ notification of agreement to resort to arbitration to all WTO members
2/ notification of arbitral award to DSB
3/ DSB involved in implementation of arbitral award
How does the DSU take the situation of dvping States into consideration ?
1/ particular attention has to be paid to interests of dvping States at the stages of consultation, panel proceedings, implementation
2/ WTO Secretariat is required to provide additional legal advice + assistance in respect to DS
3 general considerations about ICSID ?
1/ created by 1965 ICSID Convention, established in 1966
2/ facilities for conciliation + arbitration of investment disputes btwn contracting States and nationals of other contracting States
3/ Administrative Council + Secretariat
Characteristics of ICSID’s jurisdiction ? (5)
1/ ratione personae : only for disputes btwn contracting State/national other contracting State
2/ ratione materiae : any legal dispute arising directly out of investment (but separate written consent of parties is necessary)
3/ ratione temporis : no time requirement, left to parties’ consent
4/ possibility to decide binding provisional measures (upon request or on its own initiative)
5/ no advisory jurisdiction
Applicable law before ICSID ? (3)
1/ rules of law agreed by parties
2/ if no ^, then law of the contracting State + applicable rules of IL
3/ possible to rule ex aequo et bono if parties so agree
4 characteristics of the ICSID’s awards ?
1/ binding
2/ no appeal/remedies allowed, except for the ones provided for by ICSID Convention
3/ execution of awards has to be accomplished according to domestic law of State party to the dispute (which creates a risk of non-execution in cases of immunity from execution)
4/ parties can request interpretation, revision, or annulment of award (but only under specific conditions)
2 types of mixed arbitration (MA) ?
1/ MA for settlement of investment disputes btwn States/investors
2/ MA as part of peace process btwn hostile States
Characteristics of mixed arbitration ?
1/ combines features of public and private international arbitration
2/ for settlement of disputes btwn States and juridical/natural persons
General considerations about Iran-US Claims Tribunal ? (3)
1/ created by Claims Settlement Declaration (which is part of the 1981 Algiers Accords)
2/ binding third-party arbitration
3/ mixed character :
i) disputes btwn 2 gvts as well as disputes btwn private party and a gvt
ii) interpretation + application of IL, municipal law, and general principles of law
Scope of jurisdiction of Iran-US Claims Tribunal ? (3)
1/ ratione personae : nationals of Iran/US + gvts of these two States
2/ ratione temporis : claims prior to/outstanding/filed 1 year from 19 January 1981
3/ ratione materiae : various situations (see Art. II)
Applicable law in front of Iran-US Claims Tribunal ? (3)
1/ rules of PIL and private law
2/ wide discretion of choice of applicable rules
3/ Tribunal can rule ex aequo et bono if parties so agree
Differences btwn Iran-US Claims Tribunal and ICSID ? (3)
1/ limited locus standi (Iran/US)
2/ temporal role of Iran-US Claims Tribunal
3/ part of peace process to normalise Iran/US relationship
Purpose of ICSID ? (2)
1/ promote flows of foreign investment
2/ present stable legal framework to impulse economic development
Background ICSID ? (2)
1/ expropriation (direct & indirect) harmed foreign investors and their investments
2/ remedies prior to ICSID had weaknesses (litigation in national courts ; diplomatic protection)
Conditions for legal expropriation ? (4)
1/ public purposes
2/ non-discriminatory
3/ due process
4/ adequate compensation
Conditions diplomatic protection ? (2)
1/ investor has nationality of claiming State
2/ exhaustion of local remedies
Reasons why States may not engage procedure of diplomatic protection ? (4)
premise : State discretion
1/ negotiations are complex + need evidence
2/ may not want to disrupt relations with host State
3/ cooperation may be impossible if hostile relations btwn both States
4/ risk of onslaught of similar claims if negotiations made public
Inconveniences related to litigation in national courts ? (3)
1/ judges of host State might side with their State against investor
2/ conduct of host State might not violate domestic laws
3/ sovereign immunity and impossibility of third States jurisdiction for DS
Positive aspects of investor-State arbitration ? (4)
1/ more efficient approach to DS bc reduces host State’s role
2/ claimant has control over initiation of litigation
3/ avoid delays and litigation in national courts
4/ confidentiality of proceedings if desired
Characteristics of mixed proceedings before ICSID ? (2)
1/ private actor and State
2/ negative nationality requirement (investor cannot be national of host State)
What does it mean that ICSID is a self-contained system ? (6)
1/ no resort to other remedies for DS (litigation in national courts, diplomatic protection) (Art 26 and 27 ICSID Conv)
2/ no reliance on diplomatic protection
3/ no appeal or other remedy than the ones set out in ICSID Convention (Arts 53 ICSID Conv)
4/ awards cannot be challenged in national courts
5/ award is binding on parties
6/ States parties commit themselves legally to enforcing ICSID awards (Art 54 ICSID Conv)
Annulment proceedings under ICSID ? (5)
1/ ad hoc committee
2/ only procedural legitimacy of decision-making process
3/ do not concern substantive proceedings of arbitral tribunal
4/ if annulment procedure upheld, initial award is annulled and procedure has to be started again
5/ Art 52 ICSID Conv
2 gaps left out by ICSID Convention ?
1/ consent : even if party to Convention, States do not consent to the jurisdiction of an arbitral tribunal (they have to give their consent separately)
2/ applicable law : substantive int investment law not addressed in Convention, so application of CIL and BITs
Advantages of ICSID Convention ? (4)
1/ provides set of standard procedural rules
2/ designed to ensure proceedings are not frustrated by disagreement btwn disputing parties
3/ tribunal can proceed even if one party does not appear
4/ facilitates recognition and enforcement of arbitral award (States have to give effect to these)
Backlashes of investor-State arbitration ? (2)
1/ challenge to regulatory authority of States
2/ procedural issues (excessive costs, duration of arbitration, independence and impartiality of decision-makers, etc.)
History before advent of WTO ? (7)
1/ 19-20th centuries : debate about how to remove trade & protectionist barriers
2/ after WW1, end of relative liberal era of int trade
3/ during WW2, desire to make sure the protectionist legacy would be unmade
4/ 1944 : meeting at Bretton Woods and creation of Bretton Woods system (World Bank, IMF, ITO which never came into existence)
5/ 1947 Havana Charter, which was not ratified by US and thus became a dead body
6/ 1947 : conclusion of GATT (treaty and provisional organization). Main goal was to reduce tariffs and host trade negotiations
7/ 1986-1994 : Uruguay Trade Rounds which lead to creation of WTO
Basic principles of GATT ? (3)
1/ trade liberalization (reduce tariffs and non-tariff barriers)
2/ no favouritism (most favoured nation treatment)
3/ non-discrimination (national treatment)
( ! ) Exceptions : public welfare, environment, security matters
Positive outcome of GATT ?
Successful at reducing tariffs to low levels => spread of world trade
Downsides / problems of GATT system ? (2)
1/ need for new regulations (expansion of services ; increase of gvts taking innovative protectionist actions)
2/ problems with DS system : no fixed timetables, positive consensus which allowed unhappy litigant to block adoption of ruling
General characteristics of WTO DS system ? (3)
1/ framework for settling disputes arising under WTO Agreement, multilateral agreements, and plurilateral treaties
2/ 164 members (States and non-State actors)
3/ members are obliged to use DS methods provided for by WTO system
Timeframe surrounding WTO panels ? (3)
1/ 45 days for assembly of panel
2/ 6 months from appointment to write report and get parties’ feedback
3/ from conclusion of report, DSB has 60 days to adopt it
What mechanism has been adopted to fill in the absence of AB activity ?
Multi-party interim appeal arbitration arrangement (Art 25 DSU)
What are the 2 different terms used to designate the person initiating litigation in front of ICJ/ITLOS on the one side and ICSID tribunals on the other side ?
1/ ICJ, ITLOS, etc. : applicant
2/ ICSID arbitral tribunals : claimant
