issue #10, week 22. 01 June 2007
Prepared by TDM and Aloysius Gng (CEPMLP/Dundee)

TDM News Digest

provides a condensed overview of recent events of interest to the international arbitration community.

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Recent issues:

NEWS

China: Danone turns up the heat

June 1, http://english.people.com.cn/200706/01/eng20070601_380050.html

French food giant Groupe Danone SA, embroiled in a dispute with its Chinese partner Wahaha over their joint venture, has taken the matter to an arbitration body even as its negotiations with Zong Qinghou, Wahaha's founder, are ongoing. As part of its legal action, Danone and its subsidiaries have put forward eight arbitration applications to the Arbitration Institute of the Stockholm Chamber of Commerce, claiming its Chinese partner violated a joint venture contract by illegally using the Wahaha brand name, the 21st Century Business Herald reported yesterday.

Danone demanded its Chinese partner stop "violating" the agreement reached when the joint venture was set up and pay the corresponding compensation, Yuen Po Kwong, a lawyer of Feshfields Bruckhaus Deringer, hired by Danone, was quoted as saying.

Danone and Wahaha set up five joint ventures in 1996 under an agreement that bars the latter from making products that compete with those produced by the ventures. The company can't use the Wahaha brand without Danone's consent, according to the agreement.

…

Indonesia: Foreign Ownership Rules to Be Clarified

May 31, http://www.thebalitimes.com/2007/05/31/foreign-ownership-rules-to-be-clarified/

KUALA LUMPUR - Indonesia is reviewing policies on foreign equity ownership in some sectors to enhance transparency and legal clarity in its investment regulations, top officials told a Malaysian business forum this week. Indonesian Trade Minister Mari Pangestu said the review was being carried out following a new investment law which came into effect in April this year aiming to attract more foreign capital.

"The intention is part of implementing regulations of the new investment law … to make this new list (of sectors) more transparent and clear to investors," she told reporters on the sidelines of the business forum here.

…

Canada: Harper Says Canada Won't Change Investment Rules for Alcan

May 31, http://www.bloomberg.com/apps/news?pid=20601082&sid=aIgO17pZRgKE&refer=canada

Canadian Prime Minister Stephen Harper won't change investment rules ``in midstream'' to make it easier for Alcan Inc. to fight off a takeover bid by Alcoa Inc.

``I don't think players who are involved in takeovers or the subject of takeovers can expect the government to change rules in midstream,'' Harper said today in an interview.

Canada's Conservative Party government earlier this week rejected calls to expedite a review of the country's investment rules, amid a rash of foreign takeovers of Canadian firms like Alcan. Alcoa's May 7 hostile takeover bid for Montreal-based Alcan triggered a backlash from opposition parties, who say foreign acquisitions of Canadian companies may lead to job losses.

…

Vietnam eager to improve business environment

May 31, http://www.nhandan.com.vn/english/business/310507/business_v.htm

Vietnam has sent a clear message that it is determined to increase the attractiveness of the domestic investment environment in order to satiate the needs of foreign investors into the country.

Addressing the Vietnam Business Forum 2007, which opened in Hanoi on May 30, Minister of Planning and Investment Vo Hong Phuc said, "Vietnam has been hard at work in preparing conditions to welcome a new wave of foreign investment, including implementing its bilateral and multilateral commitments."

…

India: Mittal-HPCL JV hits a legal block

May 31, http://www.dnaindia.com/report.asp?NewsID=1100167

NEW DELHI: Mittal Steel and Hindustan Petroleum Corporation Ltd's (HPCL) joint venture agreement for the Bhatinda refinery in Punjab has run into problems with the union law ministry. The cabinet secretariat has directed the petroleum ministry to get the agreement vetted by the law ministry.

The petroleum ministry is piloting a Cabinet proposal to set up the joint venture. A major objection raised by the law ministry is with regard to Singapore being the seat of arbitration. Mittals are investing in the joint venture through Singapore-based subsidiary Mittal Energy Investment.

The objection is on the grounds that the agreement's governing law was the Indian law and that the project was based in India. The joint venture agreement and the parent guarantee, executed by Mittal Investment Sarl for its subsidiary Mittal Energy Investment on May 8, 2007, provide the seat of arbitration as Singapore and dispute resolution in accordance with arbitration rules of International Chamber of Commerce. This the law ministry feels can lead to problems.

…

Russian Tax Authorities Decline to Join Suit against Bank of New York

May 30, http://www.kommersant.com/p769796/Bank_New_York_Suit/

Russian customs authorities are determined to uphold a $22.5 billion suit against Bank of New York, an official said Tuesday. The federal tax body, meanwhile, denied reports that it may join the motion. In the meantime, Moscow court of arbitration is likely to keep the case pending for about one month, according to unofficial reports.

Federal Customs Service Director Andrey Belyaninov said in an interview with Kommersant that his agency is determined to persevere with the suit against Bank of New York in the first confirmation that its lawyers stand behind the motion. Mr. Belyaninov estimated the damage the U.S. bank has caused at $ 5 billion in unpaid import duties and VAT. The official added that he would like to see the Federal Tax Service join the suit.

…

World Bank Withdrawal Latest Latin Headache For Big Oil

May 29, http://news.morningstar.com/news/ViewNews.asp?article=/DJ/200705291815DOWJONESDJONLINE000740_univ.xml&Cat=IndSect

HOUSTON -(Dow Jones)- An emerging Latin American rebellion against the World Bank further exposes the international oil industry's vulnerability to a surging tide of resource nationalism in the region. In late April, the left-leaning governments of Bolivia, Venezuela and Nicaragua vowed to withdraw from the International Center for Settlement of Investment Disputes (ICSID), a World Bank-sponsored court that handles conflicts between foreign investors and host governments.

…

The ICSID helps strengthen the companies' hand in the face of aggressive governments, said Houston attorney Michael Goldberg. When countries operate within the World Bank framework, they provide companies with "a measure of security for fair treatment," said Goldberg, head of the international arbitration practice at Baker Botts LLP. "Withdrawal from such arrangements would clearly be another risk factor for any potential investor."

…

Indonesia reviews foreign ownership

May 29, http://www.sundaytimes.co.za/Business/Article.aspx?id=476298

Indonesia is reviewing policies on foreign equity ownership in some sectors to enhance transparency and legal clarity in its investment regulations, top officials told a Malaysian business forum.

…

Yemen and Singapore discuss aspects of bilateral relations

May 27, http://yementimes.com/article.shtml?i=1054&p=local&a=6

In a series of meetings held over the period of May 23-26, Yemen and Singapore agreed to enhance their bilateral relations especially in aspects related to administrative and economic fields and to increase investments and trade exchange. The two countries also discussed mechanisms of cultural cooperation.

…

In his meeting with Yeo, Yemeni Prime Minister Ali Majawar presented the investment opportunities available before Singaporean businessmen especially in tourism sector, outlining the numerous facilities and benefits of Yemeni investment law.

Venezuela: Energy Ministry suggests joint ventures for petrochemical sector

May 25, http://english.eluniversal.com/2007/05/25/en_eco_art_energy-ministry-sugg_25A874279.shtml

Amidst the migration of the projects undertook under the so-called oil opening process to joint ventures where the Venezuelan State holds a majority stake, both the Legislature and the Executive Branch are preparing to replicate this business model in the petrochemical sector, where so far both the State and private firms can have a stake.

The current law to encourage investment in petrochemical, carbochemistry and related activities was reformed in 2005. However, Venezuelan President Hugo Chávez asked the Committee on Energy and Mines, National Assembly, to prepare a new bill to leverage the intended fast development of the sector.

…

Venezuela: PDVSA: Settlement with Eni Possible

May 25, http://www.rigzone.com/news/article.asp?a_id=45641

Venezuela's state oil firm PDVSA and Italian oil and gas major Eni (NYSE: E) could settle their oilfield dispute rather than rely on arbitration center Icsid to resolve the issue, newspaper El Universal reported. ENI filed the case with the World Bank's Icsid after refusing to sign a JV with PDVSA for the Dacion field because it disagreed with the terms. PDVSA in turn seized Dacion operations.

…

Venezuela confident about settlement with Eni

May 24, http://english.eluniversal.com/2007/05/24/en_eco_art_venezuela-confident_24A873839.shtml

Venezuelan Vice-Minister of Hydrocarbons Bernard Mommer on May 23 held a meeting behind closed doors with the Committee on Energy and Mines, National Assembly, to brief on the migration of the projects undertook under the so-called oil opening process to joint ventures where the Venezuelan State holds a majority stake.

…

Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15 (Italy/Egypt BIT)

The Decision on Jurisdiction (Williams, Pryles, Orrego Vicuna) in the above-referenced case has been published at http://www.investmen tclaims.com/decisions/Siag-Egypt-Jurisdiction.pdf or http://ita.law.uvic.ca/documents/Siagv.Egypt.pdf

Serbia signed ICSID Convention

http://www.worldbank.org/icsid/constate/c-states-en.htm

Serbia Signed the ICSID Convention on 9 May 2007. The convention will enter into force on 9 June 2007.

EVENTS

Talk on Bolivia's Exit from ICSID

Legal and Practical Consequences of Denouncing the ICSID Convention on Wednesday 20 June 2007, 9-12.30 at the British Institute of International and Comparative Law hosted by (and will take place at) Latham & Watkins.

Investment Protection in India

Investment Protection in India on Monday 25 June 2007, 17.30-19.30, at the British Institute of International and Comparative Law hosted by Clifford Chance LLP and will take place at the British Institute.

Short overview of upcoming events

The above information is reproduced from the International Arbitration Planner by kind permission of Lovells (www.lovells.com and www.lovells.com/arbitration). More details on these and many other events can be found at www.arbitrationevents.com

MOVES / JOBS

Daniel Price appointed as US Deputy National Security Adviser for International Economic Affairs

May 31, http://www.whitehouse.gov/news/releases/2007/05/20070531.html

President George W. Bush today announced that he has named one individual to serve in his Administration.

The President has named Daniel M. Price , of Maryland, to be Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs. Prior to this, Mr. Price chaired the International Trade and Dispute Resolution practice at Sidley Austin LLP and was appointed by the President in 2002 to the Panel of Arbitrators of the International Centre for Settlement of Investment Disputes. Earlier in his career, he served in the Office of the United States Trade Representative from 1989 to 1992, in The Hague as Deputy Agent of the United States to the Iran-U.S. Claims Tribunal from 1984 to 1986, and in the Office of the Legal Adviser at the Department of State from 1982 to 1984. Mr. Price received his bachelor's degree from Haverford College, a diploma in Legal Studies from Cambridge University, and his JD from Harvard Law School.

Andy Shoyer will take over leadership of the International Trade and Dispute Resolution Group at Sidley.

Ronald E.M. Goodman Joins Foley Hoag

May 30, http://www.foleyhoag.com/news.asp?nID=000327704101

Foley Hoag Bolsters Washington Office with Addition of International Arbitration Team. Foley Hoag LLP announced that leading international arbitration lawyer Ronald E.M. Goodman, formerly of Winston & Strawn, has joined its Washington office as a partner in the firm's International Litigation and Arbitration practice, accompanied by associate Geraldine R. Fischer, also formerly of Winston & Strawn.

Michael Bennett has become the national head of Linklaters' UK litigation and arbitration practice

May 29, http://business.timesonline.co.uk/tol/business/law/article1856033.ece

Bennett joined the "Magic Circle" firm as a trainee in 1989 and has had spells in its Tokyo, New York and Hong Kong offices and has been on secondment to British Airways' legal department. He became a partner in 2000 and specialises in general commercial litigation as well as corporate and regulatory investigations. Bennett has taken over from John Turnbull as head of the London litigation team on Turnbull's appointment as head of the firm's commercial division.

The Lauterpacht Centre Centre Director James Crawford receives Honorary Doctorate from Paris I

James Crawford has been awarded an honorary doctorate from the University of Paris I. The award was presented by the Chancellor of the University of Paris at a ceremony at the Sorbonne in May.

BOOKS

Practical Aspects of Arbitrating EC Competition Law (Schulthess, 2007)

Zuberbühler Tobias (Hrsg.), Oetiker Christian (Hrsg.)

Verlag: Schulthess
Erscheinungsjahr: 2007
Sprache: ENGL
ISBN/ISSN: 978-3-7255-5356-3
Sachgebiet: Internationale Schiedsgerichtsbarkeit / Arbitrage international
http://www.schulthess.com/de/suche/detail.cfm?AR_ID=45079

Abstract:

It is nowadays widely accepted that arbitral tribunals are in a position to decide upon EC competition law questions. Very recently, the EC Commission has started an initiative to encourage private enforcement of EC competition law. It is clear that this will increase the importance of arbitration as alternative dispute resolution mechanism for such enforcement. In addition, the EC Commission increasingly uses arbitration as means of private monitoring and enforcement of commitments given by parties in the framework of public antitrust or merger control proceedings. This book is aimed at putting its spotlight on a number of issues of arbitrating EC competition law which are, in the authors' view, of most relevance in practice. Twenty young lawyers from all over Europe express their views on these issues, making a precious contribution to properly understand them and to develop appropriate solutions.