Investment Treaty Arbitration

The definition of investment in international investment law is of fundamental importance to the question of whether a tribunal has jurisdiction over the subject matter of the dispute. This note examines the meaning of investment under international treaties and the ICSID Convention, and discusses specific issues which can arise in relation to the definition of investment.

A practice note analysing the fair and equitable treatment standard in international investment law, including comparisons with other standards of treatment.

This note sets out the usual steps in ICSID arbitration, providing links to the relevant rules and practical guidance.

A tracker outlining anticipated key developments in international arbitration.

The aim of this practice note is to provide a practical guide to identifying, construing and relying upon umbrella clauses in bilateral investment treaties.

This checklist sets out the issues to bear in mind when a claimant is considering requesting, or has requested, a non-damages remedy or remedies.

A flowchart showing all the stages of an UNCITRAL arbitration, based on the UNCITRAL Arbitration Rules 2010. For more detailed guidance, see Practice note, Arbitrating under the UNCITRAL Rules 2010.

An article highlighting the key arbitration-related developments in China in 2012/2013. 

An article highlighting the key arbitration-related developments in India in 2012. 

An article highlighting the key arbitration-related developments in the European Union in 2012/2013. 

This article examines the impact on investment arbitration in India of the recent decisions in White Industries Australia Ltd v Republic of India (UNCITRAL) (Final Award) (30 November 2011) and Bharat Aluminium Co v Kaiser Aluminium Technical Services, Inc (Civil Appeal No 7019 of 2005, 6 September, 2012).

This article summarises the dispute resolution options open to investors when negotiating a contract for investment in the People's Republic of China (PRC).  Note: On 1 August 2012, CIETAC announced that it has suspended authorisation for the Shanghai and South China sub-commissions to accept and administer cases.

An article highlighting the key arbitration-related developments in the EU in 2011/2012. 

A number of arbitration-related developments are expected in 2012. This article highlights key areas to watch.

This article sets out the challenges faced when arbitrating in Africa.

An article highlighting the key investment treaty arbitration related developments in 2010/2011. 

A number of arbitration related developments are expected in 2011. The key areas to watch are highlighted in this article.

This note highlights the arbitration related developments expected in the second half of 2009.

This note considers the important decision in Eureko BV v Poland. Consideration is given to the significance of the tribunal's approach to the umbrella clause, and also to the concepts of state attribution and legitimate expectations

The current growth in the number of investment treaty disputes is unprecedented. This is a reflection of globalisation and increasing investment in emerging markets. Bilateral investment treaties can help to reduce the risks inherent in investing in developing economies.

The European Commission has published a list of all bilateral investment treaties (BITs) between member states and third countries.

On 10 April 2013, Montenegro ratified the ICSID Convention.

In Ambiente Ufficio SpA and others (formerly known as Giordano Alpi and others) v The Argentine Republic (ICSID Case No ARB/08/09), an ICSID tribunal considered whether it had jurisdiction over a claim with multiple claimants.

The UNCITRAL Working Group II (Arbitration and Conciliation) continued its discussions  in New York between 4-8 February 2013. At the 58th session, the working group finalised the draft rules on transparency in treaty-based investment arbitration.

In Ambiente Ufficio SpA and others (formerly known as Giordano Alpi and others) v The Argentine Republic (ICSID Case No ARB/08/09), an ICSID tribunal considered whether it had jurisdiction over a claim with multiple claimants.

In a French-language decision dated 11 December 2012, the Swiss Supreme Court confirmed that the capacity of a party to participate in arbitration relates to the jurisdiction of the arbitral tribunal. The Supreme Court also found that the requirement of legal capacity, which is required for the admissibility of the claim, must be met when a decision on the merits is rendered and not at the time of the interim award.

In Victor Pey Casado and Foundation "Presidente Allende" v Republic of Chile (ICSID Case No. ARB/98/2, Annulment decision of 18 December 2012), an ad hoc committee considered an application to annul an ICSID award because the tribunal had seriously departed from a fundamental rule of procedure by denying the parties an opportunity to be heard on the appropriate method for the calculation of damages and by giving contradictory reasoning for its own determination of what that method should be.

On 20 December 2012, Regulation (EU) 1219/2012 of the European Parliament and of the Council of 12 December 2012 establishing transitional arrangements for bilateral investment agreements between member states and third countries was published in the Official Journal.

In Tethyan Copper Company Pty Ltd v Pakistan (ICSID Case No ARB/12/1), an ICSID tribunal considered an application for provisional measures under Article 47 of the ICSID Convention.

This article examines the ongoing debate surrounding most favoured nation (MFN) clauses, with a particular focus on the four recent arbitral awards.

In Bureau Veritas, Inspection, Valuation, Assessment and Control BIVAC BV v The Republic of Paraguay (ICSID Case No ARB/07/9), an ICSID tribunal has stayed proceedings in order to give the claimant an opportunity to commence local court proceedings under the relevant contract.

An update on Quiborax SA, Non Metallic Minerals SA and Allan Fosk Kaplún v Plurinational State of Bolivia (ICSID Case No ARB/06/2) (Decision on Jurisdiction of 27 September 2012), which considered whether there was a relevant investment for the purposes of ICSID arbitration proceedings under the bilateral investment treaty between Chile and Bolivia.

The UNCITRAL Working Group II (Arbitration and Conciliation) continued its discussions on transparency in treaty-based investment arbitration in Vienna between 1 - 5 October 2012.

In Occidental Petroleum Corporation and another v Ecuador (ICSID Case No ARB/06/11), a split tribunal determined that Ecuador had breached the US-Ecuador bilateral investment treaty (BIT) and awarded damages of US$1.77 billion, thought to be the largest ever ICSID award.

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel) and Daniel J. Hickman (Associate), White & Case LLP The United States District Court for the District of Columbia has denied a request for remand of an ICSID arbitral award, holding that the terms of the award were unambiguous.

In Flughafen Zürich AG and Gestión e Ingenería IDC SA v Bolivarian Republic of Venezuela (ICSID Case No. ARB/10/19), an ICSID tribunal considered the claimants' application to disqualify an expert appointed by the respondent and to exclude his expert report.

In Swisslion DOO Skopje v Former Yugoslav Republic of Macedonia (ICSID Case No ARB/09/16), the tribunal considered whether court proceedings relating to a shareholder dispute amounted to a breach of the Macedonian/Swiss BIT.

In EDF International SA and others v Argentine Republic (ICSID Case No ARB/03/23), an ICSID tribunal considered whether the claimants could rely on a Most Favoured Nation (MFN) clause in the bilateral investment treaty between France and Argentina to incorporate an umbrella clause from another treaty entered into by Argentina. 

In Fraport AG Frankfurt Airport Services Worldwide v Philippines (ICSID Case no ARB/11/12) (Procedural order no 1), an ICSID tribunal considered the effect of the annulment of an award in a previous arbitration between the parties. It also considered issues arising out of an ICC arbitration on the same subject matter but between related parties.

An ICSID tribunal has considered whether Guatemala's interference with railroad concessions granted to Railroad Development Corporation breached the minimum standard of treatment provision under the Dominican Republic - Central America Free Trade Agreement.

Lucy Reed (Partner) and Adam Silverman (Associate), Freshfields Bruckhaus Deringer China is an active participant in the modern system of investment and trade treaties, as a signatory to over 130 bilateral investment treaties (BITs) and free trade agreements (FTAs).  Such treaties typically grant foreign investors the right to conduct arbitration directly against the state hosting their investment, for violations of the substantive protections of the BIT or FTA. Three recent developments underscore China’s continuing interest in BITs and FTAs: The likely resumption of negotiations for a China-US BIT. A trilateral investment agreement with Japan and South Korea. An agreement with Japan and South Korea to commence free-trade area negotiations.  

On 21 June 2012, the European Commission adopted a proposal for a Regulation establishing a framework for managing financial responsibility linked to investor-state dispute settlement tribunals established by international agreements to which the EU is party.

In Kilic Insaat Ithalat Ihracat Sanayi ve Ticaret Anonim Sirketi v Turkmenistan (ICSID Case No. ARB/10/1), an ICSID tribunal considered inconsistencies in the authentic language texts of the Turkey-Turkmenistan bilateral investment treaty.

In Libananco Holdings Co Ltd v Republic of Turkey (ICSID Case No ARB/06/8, Annulment proceeding), an ICSID ad hoc committee considered whether to continue a stay of enforcement of part of an award on jurisdiction, pending the outcome of the investor's application for annulment of the award.

The US government has released the 2012 US Model Bilateral Investment Treaty (BIT).

UNCTAD has released its 2011 annual review of investment treaty arbitration cases.

The Council, on 16 March 2012, took stock of negotiations with the European Parliament on a draft Regulation establishing transitional arrangements for bilateral investment agreements between member states and third countries. The draft Regulation is awaiting the Council's first reading under the ordinary legislative procedure.

In White Industries Australia Ltd v Republic of India (UNCITRAL) (Final Award) (30 November 2011), an UNCITRAL tribunal held that extensive judicial delays in the enforcement of an International Chamber of Commerce arbitration award amounted to a breach of the Australia-India bilateral investment treaty.

In Chevron Corporation and another v Republic of Ecuador (PCA Case No 2009-23) (Second Interim Award on Interim Measures (16 February 2012), a UNCITRAL tribunal has issued interim awards requiring the Republic of Ecuador to take all necessary measures to suspend the enforcement of an Ecuadorian court judgment, and ruling that it has jurisdiction to determine the claims advanced by Chevron and its indirectly owned subsidiary.

The International Centre for Settlement of Investment Disputes (ICSID) Secretariat has published a new issue of the ICSID Caseload Statistics. (Free access.)

In Apotex Inc v United States, UNCITRAL (NAFTA) Procedural Order No 2, a decision dated 11 October 2011, but only recently published, the tribunal considered whether to permit a non-disputing party to make submissions.

Nicholas Peacock (Partner) and Chris Ross (Senior Associate), Herbert Smith LLP In a recent but unpublished decision, the Singapore High Court upheld an ICC award which dismissed the claims of an airport operator against the Philippines on grounds of illegality.

The UNCITRAL Working Group II (Arbitration and Conciliation) continued its discussions about transparency in treaty-based investment arbitration in Vienna between 3 and 7 October 2011.

In Abaclat and others v Argentina (ICSID Case No ARB/07/5), an ICSID tribunal confirmed that collective claims were within the jurisdiction of the tribunal and also admissible. (Free access).

The International Centre for Settlement of Investment Disputes (ICSID) Secretariat has published a new issue of the ICSID Caseload Statistics. (Free access).

In Impregilo SpA v Argentina Republic (ICSID Case No ARB/07/17), an ICSID tribunal considered whether the claimant could rely on the "most favoured nation" clause in the Argentina-Italy bilateral investment treaty to import a more favourable dispute resolution provision from the Argentina-US bilateral investment treaty.

In OPIC Karimum Corporation v Bolivarian Republic of Venezuela (ICSID Case No ARB/10/14), Professor Doug Jones (President of the Tribunal) and Professor Guido Santiagoe Tawil (the arbitrator nominated by the claimant) dismissed the claimant's application to disqualify Professor Philippe Sands (the arbitrator nominated by the respondent), which had been made on the basis that Sands had previously been appointed by the respondent and its counsel on a number of occasions.

PLC Arbitration has published a new flowchart on UNCITRAL arbitration, based on the UNCITRAL Arbitration Rules 2010. (Free access).

In RSM Production Corporation v Grenada (ICSID Case ARB/05/14) (Annulment Proceeding), an ICSID ad hoc committee considered the appropriate order for costs where annulment proceedings were discontinued without any objection.

Moldova has ratified the ICSID Convention.

In Alps Finance and Trade AG v Slovak Republic (Switzerland/Slovak BIT) Award (redacted version), 5 March 2011, an UNCITRAL tribunal has adopted a purposive approach to the interpretation of a clause deferring arbitration for six months to allow parties to attempt to settle the dispute. It has also considered the question of whether an assignment may qualify as an investment by reference both to the definition in the applicable bilateral investment treaty and general international law criteria.

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Leah Witters (Associate), White & Case LLP In Republic of Ecuador v. Chevron Corp., 2011 US App LEXIS 5351 (2d Cir Mar. 17, 2011), the US Court of Appeals for the Second Circuit considered applications to stay an investment treaty arbitration that had been commenced pursuant to the bilateral investment treaty between the US and the Republic of Ecuador concerning the Encouragement and Reciprocal Protection of Investments dated 27 August 1993 (the US-Ecuador BIT).

UNCITRAL has published its report on the Arbitration and Conciliation Working Group's 54th session between 7 and 11 February 2011, on the subject of transparency in treaty-based investor-state arbitration.

In Grand River Enterprises Six Nations Ltd v USA (award dated 12 January 2011 but only just published), a tribunal constituted under the UNCITRAL rules confirmed that only foreign investments fall within the dispute resolution provisions of NAFTA.

The ICSID Secretariat has published a new issue of the ICSID Caseload Statistics.

The State of Qatar and Cape Verde have ratified the ICSID Convention.

In Global Trading Resource Corp and Globex International Inc v Ukraine (ICSID Case ARB/09/11), the tribunal dismissed claims pursuant to Rule 41(5) of the ICSID Arbitration Rules.

An ICSID tribunal considered whether to make a decision on costs in a procedural order for discontinuance of the proceedings in Quadrant Pacific Growth Fund LP and Canasco Holdings Inc v Republic of Costa Rica (ICSID Case No ARB (AF)/08/1).

Wojciech Sadowski (Of Counsel), K&L Gates, Warsaw On 26 October 2010, Warsaw hosted a major national conference on investment treaty arbitration. The event was co-organised by the Polish Court of Arbitration (Lewiatan) and the State Treasury Solicitors’ Office - the agency providing and coordinating legal representation for the Polish Government in international commercial and investment disputes, among other things.

Publication of the report of the UNCITRAL Arbitration and Conciliation Working Group's 53rd session on 4-8 October 2010, on the subject of transparency in investment treaty arbitration. (free access).

In AES Summit Generation Ltd and AES-Tisza Erömü Kft v Republic of Hungary (ICSID Case No ARB/07/22), the tribunal clarified the relationship between the Energy Charter Treaty and EU law.

The ICSID Secretariat has published a new issue of the ICSID Caseload Statistics.

An update on the award on jurisdiction in Saba Fakes v Republic of Turkey (ICSID Case No ARB/07/20), which considered the test for whether an investment has been made and the nationality requirement.

An update on Sempra Energy International v The Argentine Republic (ICSID Case No ARB/02/16) (Annulment proceeding), in which the tribunal granted Argentina's application for annulment.

An update on Alasdair Ross Anderson and others v Republic of Costa Rica (ICSID Case No ARB(AF)/07/3), in which the tribunal considered whether it had jurisdiction over the claims.

An update on Mobil Corporation and others v Bolivarian Republic of Venezuela (ICSID Case No ARB/07/27), in which an ICSID tribunal considered whether it had jurisdiction over certain claims and, in particular, whether the defendant had consented to ICSID arbitration.

An update on Austrian Airlines v Slovak Republic (UNCITRAL, 20 October 2009), which considered the tribunal's jurisdiction over a claim for expropriation and the scope of a Most Favoured Nation clause.

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Lauren Mandell (Associate), White & Case LLP On 31 March 2010, the US District Court for the District of Columbia ordered Argentina to post as security the full amount of two UNCITRAL awards issued against it if it wishes to pursue its application to set aside the awards.

An update on the decision on jurisdiction and liability in Joseph Charles Lemire v Ukraine (ICSID Case No ARB/06/18).

An update on Cemex Caracas Investments BV v Bolivarian Republic of Venezuela (ICSID Case No ARB/08/15), which concerned an application for provisional measures in an ICSID arbitration.

An update on ICSID's new publication, ICSID Caseload - Statistics.

An update on the publication of three interim awards relating to the proceedings in the Permanent Court of Arbitration between shareholders in the Yukos Oil Company and the Russian Federation, which considered whether Russia was bound by the provisions of the Energy Charter Treaty.

An update on RSM Production Corporation v Grenada (ICSID Case No ARB/05/14 (Annulment proceeding)), which concerned the scope of an ICSID ad hoc committee's jurisdiction. 

An update on the decision to challenge an arbitrator in Perenco Ecuador Limited v The Republic of Ecuador & Empresa Estatal Petroleos del Ecuador (PCA Case No IR-2009/1).

PLC Arbitration A report highlighting the most significant developments in investment treaty arbitration in 2009.

An update on proceedings in the Permanent Court of Arbitration between shareholders in the Yukos Oil Company and the Russian Federation, which considered whether Russia was bound by the provisions of the Energy Charter Treaty.

An update on annulment proceedings and an application for a stay of enforcement in Continental Casualty Company v The Argentine Republic (ICSID Case No ARB/03/9).

An update on Haiti ratifying the ICSID Convention.

An update on EDF (Services) Ltd v Romania (ICSID Case No ARB/05/13), which concerned attribution of state responsibility for bribes.

An update on Azurix Corp. v The Argentine Republic (ICSID Case No ARB/01/12) (Annulment proceeding), in which an ad hoc committee considered Argentina's application for annulment of the award.

Marinn F. Carlson (Partner) and Joshua M. Robbins (Associate), Sidley Austin LLP The recently-released jurisdictional decision in Tza Yap Shum v. Peru, ICSID Case No. ARB/07/6, constitutes the first published tribunal decision interpreting an investment treaty entered into by China. Notably, the decision adopts a relatively broad reading of a key dispute settlement provision in the treaty, suggesting that similar Chinese treaties may afford more extensive protection to foreign investments in China than many had previously assumed. Accordingly, the decision should be of interest to individuals and companies who have invested or are considering investing in China, as well as Chinese investors with actual or prospective investments abroad.

Marinn F. Carlson (Partner) and Joshua M. Robbins (Associate), Sidley Austin LLP On 6 August 2009, Russia publicly announced its intention to withdraw from the Energy Charter Treaty (ECT). The announcement followed Prime Minister Vladimir Putin's signing of a decree on 30 July 2009, completing the necessary domestic procedures for withdrawal to take place.

An update on Pantechniki v Albania (ICSID Case No ARB/07/21), which concerned a fork in the road provision in a bilateral investment treaty.

Marinn F. Carlson (Partner), Sidley Austin LLP The US Administration is undertaking a review of the US model bilateral investment treaty (BIT), last updated in 2004. The objective of the current review is to ensure that the model BIT is consistent with the public interest and the overall US economic agenda.

Joshua M. Robbins (Associate), Sidley Austin LLP On 6 July 2009, Ecuador submitted to the World Bank a written notice of its denunciation of the ICSID Convention. In accordance with Article 71 of the ICSID Convention, the denunciation will take effect six months after the receipt of Ecuador's notice, therefore on 7 January 2010.

An update on the ICSID award on jurisdiction in Mr Tza Yap Shum v The Republic of Peru (ICSID Case No ARB/07/6).

An update on Saipem SpA v The People's Republic of Bangladesh (ICSID Case No ARB/05/7), in which the tribunal considered whether the intervention of the Bangladeshi courts in an ICC arbitration amounted to expropriation.

An update on Burlington Resources Inc and others v Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador) (ICSID Case No ARB/08/5) which was concerned with provisional measures in ICSID arbitration.

An update on Ecuador's withdrawal from ICSID.

An update on Renta 4 SVSA v Russian Federation (Arbitration V 024/2007), which concerned the scope of an arbitration provision, and the interplay between the most favoured nation and fair and equitable treatment provisions in the Spain-Russia BIT.

An update on Malaysian Historical Salvors SDN BHD v Malaysia (ICSID Case No. ARB/05/10), Decision on the Application for Annulment), which considered the meaning of "investment" for the purposes of article 25 of the ICSID Convention.

An update on Corn Products International, Inc v The United Mexican States (ICSID Case no ARB (AF)/04/01) which considers the countermeasures defence in a NAFTA arbitration.

An update on the ECJ decision in Commission v Sweden (Case no C 249/06) and Commission v Austria (Case no C 205/06), which was concerned with the compatibility of BITs with the EC Treaty.

An update on the European Union's Economic and Financial Committee's (EFC) comments in respect of the European Commission's concerns regarding intra-EU bilateral investment treaties (BITs).

An update on Ashok Sancheti's investment treaty arbitration claim against the United Kingdom.

An update on Wintershall Aktiengesellschaft v Argentine Republic (ICSID Case No ARB/04/14), which considered the scope and effect of a "most favoured nation" clause.

An update on an interim award in UNCITRAL arbitration proceedings, Chevron Corporation and Texaco Petroleum Corporation v The Republic of Ecuador UNCITRAL (US/Ecuador BIT).

An update on Railroad Development Corp v Guatemala (ICSID Case No ARB/07/23), Decision on Objection to Jurisdiction CAFTA Article 10.20.5, which considers the scope of waiver of remedies pursuant to CAFTA Article 10.18. Note: On 13 January 2009, the tribunal refused an application for clarification of its award (see Decision on clarification request of the decision on jurisdiction. )

An ICSID tribunal has concluded that the measures taken by Argentina during the economic crisis of 2001-2002 did not have any adverse impact on the Chilean claimants' bus manufacturing and finance business. In Metalpar SA and Buen Aire SA v The Argentine Republic (ICSID Case No ARB/03/5), the claimants failed to establish any breach of the protections afforded to them under the Argentina-Chile BIT. The tribunal held that the claims should be dismissed in any event, because there was no evidence that the claimants' investments were adversely affected by the economic measures. The claimants were aware of the economic and political problems which Argentina had experienced in the past and, with a little diligence, could have discovered that a further crisis may ensue. After the economic crisis, the performance of the claimants' business had improved significantly. Whilst this may have been due to various factors, there was no doubt that steps taken by Argentina constituted a beneficial environment for the claimants' business to make a speedy recovery. The case is interesting in view of the distinction drawn by the tribunal regarding other ICSID claims against Argentina. In other claims, the contractual relationship between investor and host state engendered a higher degree of "legitimate expectation" that the political, legal and economic framework would be maintained. Here, the claimants' representatives were international business people, with knowledge and experienc

In Duke Energy Electroquil Partners & Electroquil SA v Republic of Ecuador (ICSID Case No. ARB/04/19), the claimant referred to ICSID arbitration claims for both breach of contract (pursuant to an express arbitration agreement) and for breach of the US-Ecuador BIT. The tribunal accepted that it had jurisdiction both under the arbitration agreement and under the BIT and determined those claims which fell within either the arbitration agreement or the BIT. The tribunal's award is an interesting example of a tribunal assuming "cumulative jurisdiction" pursuant to both an arbitration agreement and a BIT. The tribunal described the jurisdictional issue as complex, but ultimately accepted that there was no reason why a state party's consent to arbitration might not be expressed in both an arbitration agreement and a BIT. Fortunately, there was no conflict between the terms of the arbitration agreement and the BIT, and the tribunal did not therefore have to determine which took precedence.

ICSID arbitration rule 41(5) permits early objections to claims which are "manifestly without legal merit". In Trans-global Petroleum Inc v Jordan (ICSID Case no ARB/07/25), the tribunal has given the first ruling on the proper interpretation of this provision. The tribunal noted that objections under rule 41(5) involved a truncated procedure, but nevertheless had the potential (should the tribunal uphold the objection) for a legal award to be made against a claimant. It concluded that the provision was intended only for clear and obvious cases of "patently unmeritorious claims". The reference in rule 41(5) to "legal" merit indicated that the tribunal was not concerned to determine factual issues (and should not, therefore, exercise its powers to order document production on a section 41(5) application). Despite this, the tribunal was not required to accept at face value any factual allegation which was "manifestly incredible, frivolous, vexatious or inaccurate". Nor need it accept any legal submission which was "dressed up" as a factual allegation. Applying these principles, the tribunal rejected the challenge to two claims, but confirmed that a third claim was manifestly without legal merit. An award was made recording that the claim was to be treated as having been formally withdrawn by the Claimant with the consent of the Respondent.

In City Oriente Limited v The Republic of Ecuador and others, ICSID Case No ARB/06/21, the Tribunal had to consider whether provisional measures should only be ordered as a means of preventing irreparable harm. Article 47 of the ICSID Convention provides that "except as the parties otherwise agree, the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party". Rule 39 of the Arbitration Rules provides:"(1) At any time after the institution of the proceeding, a party may request that provisional measures for the preservation of its rights be recommended by the Tribunal. The request shall specify the rights to be preserved, the measures the recommendation of which is requested, and the circumstances that require such measures." In light of this wording, the Tribunal concluded that whilst provisional measures should only be ordered as a last resort, it was not "so essential that provisional measures be necessary to prevent irreparable harm". However, the harm the petitioner would be spared by the implementation of such measures must be significant, and exceed greatly the damage that would be caused to the respondent. Compare this with UNCITRAL Model Law position which provides (Article 17A 1(c)) that if the measure is not ordered, the harm likely to result must be harm not adequately reparable by damages, and that such harm must substantially outweigh the

The International Centre for Settlement of Investment Disputes (ICSID) is now publishing on its website extensive details on procedural developments in ongoing ICSID proceedings. The information published includes the names of the parties, the subject matter of the dispute, the composition of the tribunal and, for each concluded case, the date and method of termination. The tribunal's reports of conciliation commissions or awards are also published where the parties have given their consent. Where consent has not been given, ICSID publishes excerpts of the tribunal's legal reasoning.These details were previously published only in hard-copy format. This new feature is part of the Centre's continuous efforts to make its case management activities more transparent. Source: ICSID

UNCTAD has published a report, "Investor-State Dispute Settlement and Impact on Investment Rulemaking", which considers the effect of developing investor-state jurisprudence on a "new generation" of international investment agreements. It concludes that the increase in investor-state arbitrations has influenced governments to avoid broad or imprecise provisions in favour of closely-defined terms. For example, concepts such as "investment", "fair and equitable treatment" or "indirect expropriation", the meaning of which has been considered by numerous arbitral tribunals, have been defined in more detail in more recent investment treaties, particularly those negotiated by countries in the Asia-Pacific region. Governments are also giving closer consideration to the interrelationship between the terms of the investment agreement and any applicable arbitration provisions. The report notes that the growing legal sophistication of investment dispute resolution points to a strengthening of the rule of law at the international level that should benefit developing countries. However, the report warns that where countries are party both to older and "new generation" investment agreements, the inconsistencies between these may present challenges to developing nations. A copy of the report is available on the UNCTAD website

ICSID fees are to increase with effect from 1 January 2008. The Centre's administrative charge will increase from US$10,000 to US$20,000. This charge becomes payable once the arbitral tribunal, conciliation commission or ad hoc committee has been constituted, and it is payable annually after that. The increase will apply to all cases begun after 1 January 2008, but for cases which have already been instituted the current charge of US$10,000 will continue to apply until 1 January 2009.The Centre is also reintroducing a fee for the Centre's legal staff to attend meetings away from ICSID's seat in Washington DC of US$1,500 per day. These fees and others are set out in a new Schedule of Fees.Similarly, the ICC is increasing some of its fees. The ICC has a sliding scale of fees depending on the amount in dispute. The minimum and maximum fees remain the same, but the rates in-between have changed. For disputes worth from US$50,000 to US$50 million, the rates have increased. They will now range from 4.3% of the dispute's value at the lower end of the scale to 0.01% at the higher end. The new fees will apply to all cases where a request for arbitration is received by the secretariat on or after 1 January 2008.Sources: ICSID website and ICC website

ICSID has announced receipt of notification, under article 25(4) of the ICSID Convention, that Ecuador will no longer refer to ICSID any disputes relating to investments in natural resources (including petroleum, gas and minerals). The notification, which has been widely flagged, takes place against the background of the nationalisation, earlier this year, of oil, gas and mining production contracts; and also the existence of several pending ICSID arbitrations against Ecuador. However, the legal effect of such notification is the subject of some uncertainty, some experts arguing that states would in any event be bound by arbitration provisions referring disputes to ICSID arbitration in BITs or contracts, regardless of any unilateral declarations made to ICSID. The notification can be viewed on the ICSID website

In Eastern Sugar BV (Netherlands) v The Czech Republic (UNCITRAL ad hoc arbitration SCC no 088/2004) an ad-hoc tribunal has rejected an argument that obligations undertaken by the Czech Republic pursuant to a bilateral investment treaty were superseded or affected by that country's accession to the EU. The tribunal's approach to the question of the compatibility of the two regimes was extremely robust. It appears that there are several other arbitrations involving the Czech Republic which may potentially raise similar issues.

An ICSID tribunal has refused the claimants' request for provisional measures in arbitration proceedings between Occidental Petroleum Corporation and Occidental Exploration and Production Company v The Republic of Ecuador (ICSID Case No ARB/06/11). The claimants alleged various breaches of domestic and international law, and under the US/Ecuador BIT, in respect of the oil concession granted to them by Ecuador in 1999. The claimants issued a request for provisional measures which was, in essence, intended to preserve their alleged right to specific performance of the underlying contract. The tribunal rejected the application, finding unanimously that the claimants had failed to demonstrate that an order for provisional measures was justified in the circumstances. The claimants had to establish a right to be protected, which in this case would be the right to specific performance of the underlying contract and the right to non-aggravation of the dispute. However, they failed to establish a "strongly arguable" case that a right to specific performance exists where a natural resources concession agreement has been terminated by a State. The tribunal proceeded on the basis that "full reparation", rather than restitution, is the appropriate remedy where a party is injured by an alleged illegal act. This can be achieved by restitution in kind (synonymous with specific performance) but where that is not possible, monetary compensation is the remedy. Specific performance is

In Industria Nacional de Alimentos SA v Peru, ICSID Case no ARB 03/4, an ad hoc committee has rejected an application for annulment of an award pursuant to which the tribunal had determined that it lacked jurisdiction to hear the claimants' claims. The claimants argued that the award should be annulled on the grounds of manifest excess of powers, serious departure from a fundamental rule of procedure, and failure to state the reasons on which the award was based. These arguments were rejected by the ad hoc committee. The decision is of interest largely because of the criticisms of the manner in which the tribunal stated its reasons: indeed, one member of the ad hoc committee published a dissenting opinion, containing trenchant criticisms of the tribunal's award. The decision contains some helpful guidance as to the standard of reasoning which parties to ICSID arbitrations are entitled to expect in relation to treaty interpretation, as well as interesting discussion of the meaning of "manifest" excess of power. Note: the award has been rectified to clarify the capacity in which one of the lawyers for the Republic of Peru conducted the arbitration: see Decision on Rectification of the Decision on Annulment of the Ad Hoc Committee (November 30, 2007)

As we reported last week (see Legal update, ICSID tribunal holds Argentina in breach of BIT), in Vivendi v Argentina (ICSID Case no ARB/97/3), an ICSID tribunal has awarded the claimants damages for breach of the Argentina/France BIT provisions relating to fair and equitable treatment and expropriation. This marks the end of the long-running proceedings between Vivendi and Argentina which were commenced over ten years ago. The main interest of the award lies in the treatment of the fair and equitable standard. The tribunal firmly rejected the respondents' contention that the treaty standard equated to the minimum standard of customary international law, holding instead that a provision requiring "fair and equitable" treatment imposed a more far-reaching standard. The award is also noteworthy for its discussion of the concept of expropriation, and for the approach to the assessment and proof of damages.

In Fraport AG Frankfurt Airport Services Worldwide v Republic of Philippines, ICSID Case No. ARB/03/25, an ICSID tribunal has decided that transactions which were illegal under the domestic laws of the Philippines did not qualify as "investments" under the Philippines/Germany BIT, which applies to investments "accepted in accordance with the respective laws and regulations of either Contracting State". It followed that the tribunal had no jurisdiction to determine Fraport's claims. The tribunal held that Fraport had knowingly attempted to structure its investment in a manner which breached the Philippine Anti-Dummy Law, by means of secret shareholder agreements. Referring to the provisions of the BIT and the Instrument of Ratification, the tribunal decided that the transaction therefore did not qualify as an "investment". The relevant point at which to assess the nature of the transaction was the moment when the investment was concluded, and it was not necessary to consider the further argument that, even if lawful at the time it was concluded, any transaction would also have to be performed lawfully in order to qualify as an "investment". The tribunal indicated, however, that on the wording of this BIT such an argument would be unlikely to succeed. Note, further, the tribunal's view that, even though the Anti-Dummy Law was a criminal statute, the standard of proof on this issue was the civil "preponderance of evidence" test and not the criminal "beyond reasonable

Nassib Ziadé, a Lebanese and Chilean national, has been appointed chief counsel of the International Centre for Settlement of Investment Disputes (ICSID). Ziadé, who has extensive experience in the administration of international legal proceedings, and in the management and development of international tribunals was due to take up his new position on 1 July 2007. He has been executive secretary of the World Bank Administrative Tribunal for the past ten years. In 1998 Ziadé was a member of the Grievance Process Review Committee, which reviewed and reformed the World Bank's Internal Conflict Resolution System, and has since been involved in all subsequent reviews of the system. He is also a former counsel at ICSID. He has commented that the chief counsel role has three elements - to develop policies and strategies for the performance of ICSID's mandate, to provide advice and leadership in alternative dispute resolution, and to lead and manage the ICSID Secretariat. Source: ICSID website For further information, see Global Arbitration Review

The tribunal in the long running North American Free Trade Agreement (NAFTA) arbitration between United Parcel Service of America (UPS) and the Government of Canada (Canada) issued its majority award on 11 June 2007, dismissing all of UPS' claims. The tribunal comprised Judge Kenneth Keith (President), Yves Fortier QC, and Dean Ronald A Cass. UPS had alleged various breaches of NAFTA Chapter 11 obligations by Canada relating to the activities of its agent, Canada Post Corporation which it alleged were in breach of Canada's NAFTA treatment obligations owed to foreign investors. UPS' claims against Canada had included its failure to provide UPS with the best treatment available to domestic investors (article 1102), failure to accord UPS most favoured nation treatment (article 1103), failure to accord UPS the better of national or most favoured nation treatment (article 1104) and failure to accord UPS treatment in accordance with international law, including security and protection (article 1105). UPS had also claimed a breach of the competition provisions of Chapter 15 of NAFTA (articles 1502(3)(a) and 1503(2)), in that Canada had allowed its agent, Canada Post, to engage in unfair competition. A lengthy dissenting opinion, however, was issued by Dean Ronald Cass, who found that Canada had violated its obligations under article 1102, and under articles 1502(3)(a) and 1503(2). A detailed report is now available, see Legal update, UPS investment claims against Canad

An ICSID tribunal has decided that Argentina breached the US-Argentina bilateral investment treaty as a result of various emergency regulatory measures put in place during the economic crisis in Argentina. The principal points of interest of the award lie in its treatment of the defence of necessity (which the tribunal rejected) and also in its findings with regard to fair and equitable treatment and the umbrella clause contained in the treaty.

The governments of Austria, Finland and Sweden have refused to revise or annul some of their bilateral investment treaties (BITs) which are the subject of infringement proceedings by the European Commission (EC). In 2004, the EC notified Austria, Finland, Sweden and Denmark that some of their pre-accession BITs with non-EU countries may be in conflict with certain powers reserved to the EU Council of Ministers. The EC Treaty permits wide-ranging freedom for movement of capital and payments but allows the Council of Ministers, in exceptional circumstances, to take certain restrictive measures in relation to movements of capital to or from non-EU countries. The EC considered that the BITs in question may hinder the application of these restrictive measures. Although, by virtue of article 307 of the EC Treaty, community law does not automatically prevail over international agreements concluded by member states prior to their accession, member states are obliged to take all appropriate steps to eliminate possible incompatibilities contained in such prior international agreements. The EC case against Denmark was closed following Denmark's notification that it would terminate the BIT in question. However, the infringement proceedings against the other three governments are continuing. Austria and Sweden have recently filed written responses with the Court of Justice and await a hearing date, while Finland has until 16 April to file its written response. Source: Invest

The UNCITRAL Working Group tasked with considering proposed revisions to the UNCITRAL Arbitration Rules met in New York from 5 to 9 February 2007. One of the areas under discussion relates to the possibility of special provisions to govern investor-state arbitrations. Although UNCITRAL arbitrations often involve private commercial parties, the UNCITRAL Rules are also commonly used to resolve investor-state disputes arising under international investment treaties. Proposals had been made as to how certain aspects of the UNCITRAL Rules could be modified to address the need for greater transparency in investor-state arbitrations, for example by the introduction of amicus curiae briefs and access to certain documents. However, the Working Group decided that these issues were best dealt with at a later stage in the revision process. The Working Group did, however, consider the proposal for a general provision on confidentiality in the UNCITRAL Rules, which currently address the confidentiality of hearings and awards, but not the existence of the proceedings themselves. A more far-reaching confidentiality provision was rejected by the Working Group on the basis that it would be complicated to draft and unsustainable for certain types of arbitrations. The Working Group is understood to have debated 20 of the 41 revised draft articles. The remaining proposed amendments are due to be discussed at the next session in Vienna in September 2007. Thereafter, the UNCITRAL secr

The government of Pakistan has promulgated an ordinance implementing the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States. The Arbitration (International Investment Disputes) Ordinance 2006 was issued in Pakistan on 8 November and takes effect immediately. The ICSID Convention, to which around 155 countries are signatories, provides an international framework for resolving disputes arising out of foreign investments in contracting states.

In St Mary’s VCNA v the Government of Canada (NAFTA/UNCITRAL), an arbitral tribunal referred to a third party the issue of whether arbitral procedure could be adapted to provide a flexible and effective method of determining issues relating to legal privilege.

In Emmis International Holding, BV and others v Hungary (ICSID Case No ARB/12/2), an ICSID tribunal considered a preliminary objection that the claim was manifestly without legal merit, under Rule 41(5) of the ICSID Arbitration Rules.

In Tulip Real Estate Investment and Development Netherlands BV v Republic of Turkey (ICSID Case No ARB/11/28), an ICSID tribunal considered whether a requirement to seek to resolve disputes through negotiation was mandatory and a pre-condition to arbitration.

In Saint-Gobain Performance Plastics Europe v The Bolivarian Republic of Venezuela (ICSID Case No ARB/12/13), an ICSID tribunal considered an application to disqualify an arbitrator based on his previous role as an employee of the Argentinian government.

In Burlington Resources Inc v Republic of Ecuador (ICSID Case No ARB 08/5), an ICSID tribunal considered whether privity between the investor and the host state is required to establish jurisdiction over an umbrella clause claim based on contract.

In Daimler Financial Services AG v Argentine Republic (ICSID Case No. ARB/05/1) (Award on Jurisdiction) (22 August 2012), an ICSID tribunal considered whether the claimant could rely on the "most favoured nation" clause in the Argentina-Germany bilateral investment treaty to import a more favourable dispute resolution provision from the Argentina-Chile bilateral investment treaty.

In Hochtief AG v Argentine Republic (ICSID Case No. ARB/07/31), an ICSID tribunal considered whether the claimant could rely on the "most favoured nation" clause in the Argentina-Germany bilateral investment treaty to import a more favourable dispute resolution provision from the Argentina-Chile bilateral investment treaty.

In GEA Group Aktiengesellschaft v Ukraine (ICSID Case No ARB/08/16), an ICSID tribunal considered whether an ICC award was an investment for the purposes of an ICSID arbitration.

In European Commission v Republic of Slovakia [2011] EUECJ (Case C-264/09), Advocate General Jääskinen considered the relationship between Slovakia's EU law obligations to ensure non-discriminatory access to the electricity transmission network and its obligations to protect investments under an investment protection agreement concluded before Slovakia's accession to the EU. The Advocate General concluded that obligations entered into before Slovakia ratified the EC Treaty cannot be affected by that Treaty and, as such, Slovakia cannot be held to be in breach of its obligations under Directive 2003/54/EC concerning common rules for the internal market in electricity. (Free access).

In Malicorp Ltd v The Arab Republic of Egypt (ICSID Case No ARB/08/18), an ICSID tribunal considered whether the claimant had made an "investment" for the purposes of ICSID jurisdiction, and whether allegations of bad faith should be considered at the jurisdiction or the merits phase.

In Government of the Province of East Kalimantan v PT Kaltim Prima Coal, Rio Tinto PLC, BP PLC, Pacific Resources Investments Ltd, BP International Ltd, Sangatta Holdings Ltd and Kalimantan Coal Ltd (ICSID Case No ARB/07/3), the tribunal considered whether it had jurisdiction over a dispute arising out of a contract between the government of Indonesia and one of the respondents.

In Cemex Caracas Investments BV and Cemex Caracas II Investments BV v Bolivarian Republic of Venezuela (ICSID Case No ARB/08/15), an ICSID tribunal considered whether it had jurisdiction to hear a claim under either the Netherlands/Venezuela BIT or under Venezuelan investment law.

In RSM Production Corporation and others v Grenada (ICSID Case No ARB/10/6), the tribunal dismissed claims which had already been determined in prior arbitral proceedings.

In Eureko BV v the Slovak Republic (PCA Case No 2008-13, UNCITRAL Arbitration Rules) Award on Jurisdiction, Arbitrability and Suspension, an UNCITRAL tribunal considered Slovakia's jurisdictional objection based on its accession to the EU. Free access.

In Cia de Aguas del Aconquija SA and Vivendi Universal SA v Argentina (ICSID Case No ARB/97/3) (Annulment Proceeding), an ad hoc committee has issued guidance on the duties of ICSID arbitrators in respect of potential conflicts of interest.

An ad hoc committee has partially annulled the ICSID award in Enron Creditors Recovery Corp, Ponderosa Assets, LP v Argentina (ICSID Case No ARB/01/3).

In Suez and others v Argentina (ICSID Case No ARB/03/19) and AWG Group v Argentina (UNCITRAL),  and Suez and others v Argentina (ICSID Case No ARB/03/17), two parallel tribunals considered whether Argentina could rely on the defence of necessity in connection with its treatment of investors during and in the aftermath of its financial crisis.

An update on Walter Bau AG (in Liquidation) v The Kingdom of Thailand (UNCITRAL, 1 July 2009), in which the tribunal considered claims of expropriation and breach of the fair and equitable treatment standard, some of which arose before the relevant BIT came into force.

An update on the decision on the challenge to an arbitrator in Alpha Projektholding GmbH v Ukraine (ICSID Case No ARB/07/16).

An update on Republic of Kazakhstan v Rumeli Telekom AS and Telsim Mobil Telekomunikasyon Hizmetleri AS (ICSID Case No ARB/05/16), decision of the ad hoc committee of 25 March 2010, which concerned annulment of an ICSID award.

An update on Hulley Enterprises Limited (Cyprus) v The Russian Federation (PCA Case No AA 226), Yukos Universal Limited (Isle of Man) v The Russian Federation (PCA Case No AA 227) and Veteran Petroleum Limited (Cyprus) v The Russian Federation (PCA Case No AA 228), in which three parallel arbitral tribunals considered whether they had jurisdiction to hear each case on the merits under the Energy Charter Treaty.

An update on Romak SA v Uzbekistan (PCA Case No AA280) which concerned the meaning of "investment" for the purposes of establishing the tribunal's jurisdiction in a non-ICSID case.

An update on a procedural order by an ICSID Tribunal in Piero Foresti, Laura de Carli and others v Republic of South Africa (ICSID Case No ARB (AF)/07/1) regarding limited participation by non-disputing parties.

An update on Europe Cement Investment & Trade S.A. v Republic of Turkey (ICSID Case No ARB(AF)/07/2), in which a tribunal dismissed a Polish company's claim that Turkey had breached the investment protection provisions of the Energy Charter Treaty (ECT).

An update on Glamis Gold Ltd v USA which concerned expropriation and fair and equitable treatment under Articles 1110 and 1105 of NAFTA.

An update on Perenco Ecuador Ltd v The Republic of Ecuador and Empresa Estatal Petroleos Del Ecuador (Petroecuador) (ICSID Case No ARB/08/6), in which an ICSID tribunal considered whether to grant an application for provisional measures.

An update on National Grid plc v Argentine Republic (Final Award, 3 November 2008), in which an UNCITRAL tribunal considered the necessity defence in respect of alleged breaches of the UK-Argentina BIT.

An update on TSA Spectrum de Argentina SA v Argentine Republic (ICSID Case No ARB/05/5), which considered the jurisdiction of an ICSID Tribunal under Article 25 of the ICSID Convention.

An update on Jan de Nul NV Dredging International NV v Arab Republic of Egypt ICSID Case No ARB/04/13, which considered the principles applicable to the attribution of liability under a bilateral investment treaty.

An update on Railroad Development Corporation v Republic of Guatemala (ICSID Case No ARB/07/23), which considered the scope of an ICSID tribunal's jurisdiction to order the preservation of evidence.

An update on Enron Corporation Ponderosa Assets LP v Argentine Republic (ICSID Case no ARB/01/3) in which an ICSID annulment committee considered the issues of a stay of enforcement and security.

In Archer Daniels Midland Company and Tate & Lyle Ingredients Americas Inc v Mexico (ICSID Case No ARB (AF)/04/05), a tribunal has rejected a defence based upon the customary international law doctrine of countermeasures. The award was made in November 2007 but only recently published (in redacted form) on the ICSID website. The tribunal concluded that the defendant had failed to establish the customary international law defence of "countermeasures", and awarded damages to the claimants for breach of the NAFTA provisions relating to national treatment and performance standards. The main interest of the award lies in the fact that the tribunal disagreed as to the availability, in principle, of the countermeasures defence. The majority appear to have accepted that, in principle, such a defence was available, but that it failed on the facts of the case. The third member, Mr Arthur Rovine, issued a separate "concurring opinion" on this issue, making clear that in his view, the defence was not even available in principle. The award is an interesting contribution to the ongoing debate about the nature of investors' rights under NAFTA, and the interrelationship between NAFTA and customary international law.

In ETI Euro Telecom International NV v Republic of Bolivia and anor [2008] EWCA Civ 880, the Court of Appeal upheld the decision of Smith J that the English court does not have jurisdiction under the Civil Jurisdiction and Judgments Act 1982 (CJJA) and the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997 (the 1997 Order), to grant a freezing injunction in support of an attachment order obtained from the New York courts, which itself had been granted in support of an ICSID arbitration. Moreover, the ICSID arbitration proceedings themselves were not "proceedings" for the purpose of section 25 of the CJJA and the 1997 Order.Collins LJ made detailed reference to the legislative purpose behind section 25 of the CJJA and the 1997 Order, which he considered are directed to foreign proceedings on the substance of the matter. Moreover, arbitral proceedings were not "proceedings" with section 25(3) of the CJJA. The power of the legislature to extend section 44 of the Arbitration Act 1996 to ICSID arbitration (thereby enabling national courts to grant interim measures in support of ICSID arbitration) has not been exercised because there is no need for such a power, in view of the provisions in the ICSID Convention and Arbitration Rules enabling parties to seek interim measures from the tribunal.This decision provides robust confirmation that the legislative provisions for the grant of interim relief in support of arbitration do not extend to ICSID arbitra

In Helnan International Hotels A/S v The Arab Republic of Egypt (ICSID Case No ARB/05/19) an ICSID tribunal considered whether a claim before it, pursuant to the Denmark - Egypt BIT, should be considered res judicata, on the basis that an award had already been rendered by a Cairo arbitration tribunal appointed under the terms of an underlying contract between the parties. Whilst upholding the admissibility of the claim before it, the tribunal did, however, acknowledge that the Cairo award was final and binding in respect of the contractual dispute between the parties.The ICSID tribunal would only deal with matters of a truly international nature and, therefore, in terms of the contractual dispute, the Cairo arbitration award would have res judicata effect in respect of the "Egyptian legal order", that is, in so far as the award related to the interpretation of the contract. In terms of international law, it found that Egypt was not in breach of the BIT.

In a case before the Arbitration Institute of the Stockholm Chamber of Commerce, RosInvestCo Uk Ltd v The Russian Federation Case No:Arbitration V 079/ 2005, the Tribunal considered whether it had jurisdiction under the UK-Soviet Bilateral Investment Treaty (BIT) to determine a dispute between the parties relating to the alleged unlawful expropriation of assets. The Tribunal held that it did have jurisdiction in light of the Most Favoured Nation (MFN) clause in the BIT, by reference to the BIT between Denmark and Russia. The case demonstrates a difference in approach to the view of commentators who have suggested that MFN clauses will not apply to dispute resolution clauses in investment treaties, save where expressly provided for by States in the relevant BIT. Indeed, in this case the Tribunal concluded that an arbitration clause in the context of an expropriation claim was of the same protective value as any substantive protection given under the BIT.

In Suez v Argentina (Case no ARB/03/17), a challenge to an ICSID arbitrator based upon her participation in an earlier award which was unfavourable to the challenger has been rejected. The decision, which has been widely reported, contains a helpful exposition of the standard of proof which applies in relation to challenges to the impartiality or independence of arbitrators. It also demonstrates a strict approach to the timeliness of such challenges: in this case, a delay of less than two months was found to be sufficient to bar the challenge. The arbitrators who ruled on the point made clear that a challenging party should raise any objection as soon as he becomes aware of it. Even if the objection is made in summary form, it can (if raised in good time) be amplified at a later date.

In CMS Gas Transmission Company v Argentina (ICSID Case No ARB/01/8), an ad hoc committee has annulled those parts of the tribunal's award in which it held that there had been a breach of the umbrella clause in the US-Argentina BIT, but has upheld the remainder of the award. The decision of the ad hoc committee provides a clear illustration of the distinction between appeals on points of law, and annulment on the basis of manifest excess of power. In this case, the committee took the view that the tribunal's award was wrong in law, but that this was insufficient to justify annulment.

The Court of Appeal has upheld an arbitral award against Ecuador, confirming that the tribunal had jurisdiction to deal with certain taxation matters under the relevant bilateral investment treaty (BIT) between the USA and Ecuador. This is understood to be the first case in which a challenge to an award made pursuant to a BIT has been considered by the English Courts. In The Republic of Ecuador v Occidental Exploration & Production Co [2007] EWCA Civ 656, Ecuador applied to set aside an award under section 67 of the Arbitration Act 1996 on the basis that the tribunal lacked substantive jurisdiction. The Court of Appeal undertook a detailed review of the first instance decision, and has upheld that decision and the findings of the tribunal that the particular taxation issues fell within the ambit of the relevant BIT. The effect of this decision is that certain taxation matters may well fall within the ambit of the protections afforded by a BIT (rather than falling within the scope of any separate bilateral taxation treaty), assuming they relate to the performance of an obligation in the relevant contract. Other BITs may vary in their precise wording on taxation issues and each case will, inevitably, turn on its own facts as to the question of whether a taxation matter does, in fact, relate to the performance of a contractual obligation.