issue #19, week 41. 12 October 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

Experts find flaws in Suriname-Guyana maritime boundary award

October 11, http://www.caribbeannetnews.com/news-3924--36-36--.html

Experts here say they have discovered irregularities in the calculations of the equidistance line by a UN Arbitration Tribunal which established the maritime boundary between Suriname and Guyana on September 17, after a long-standing dispute between the two countries.

The ad hoc 'Platform to study the ITLOS award' presented its findings Monday to President Ronald Venetiaan, offering the Suriname government tools to officially query the decision before the term of 30 days to do so expires.

Counting from Wednesday, Suriname and Guyana have only 6 days left to make reservations and seek clarification from the UN Tribunal on any uncertainty in the ruling. Paul Reichler of Guyana's legal team earlier noted that Guyana has no reason whatsoever to question the tribunal's award.

…

Ecuador Won't Allow World Bank Arbitration In Disputes

October 9, http://money.cnn.com/news/newsfeeds/articles/
djf500/200710091716DOWJONESDJONLINE000591_FORTUNE5.htm

Ecuador won't accept the World Bank's International Center for Settlement of Investment Disputes as a mediator in any future oil and mining disputes, people familiar with the matter said Tuesday. President Rafael Correa recently made that decision, and the Foreign Ministry is studying ways to notify the ICSID, a person at the ministry said.

The ICSID has been an alternative for oil companies seeking redress in disputes with the Ecuadorean government since the 1980s. The notification is likely to take some time as ministry lawyers are going over the existing agreement between the ICSID and Ecuador with a fine-tooth comb, said the person, who requested anonymity.

The president made the decision to exclude the ICSID because he believes that in many cases the companies have turned to the international arbitrator "without being right in their complaints, so we want to curtail that," a person on the president's staff said.

…

Chevron Calls for Dismissal of Ecuador Lawsuit

October 8, http://www.chevron.com/news/press/release/?id=2007-10-08

Chevron Corporation filed a petition in an Ecuador Superior Court seeking dismissal of an ongoing environmental lawsuit that has descended into a judicial farce, constituting a denial of Chevron's right to a fair and impartial trial based on evidence and the rule of law.

Chevron's petition to dismiss cites multiple examples of inappropriate interference in the civil proceeding by the executive branch of the government, judicial misconduct and misconduct by the plaintiffs' attorneys as well as their technical staff. The petition also argues that the court has failed to recognize the overwhelming volume of admissible evidence and irrefutable legal defenses that exonerate Chevron and cites the court's lack of jurisdiction, lack of due process and demonstrated bias (see Note to Editors).

…

ENI's Scaroni Says Agreement `Probable` Over Kashagan

October 8, http://www.bloomberg.com/apps/news?pid=20601072&refer=energy&sid=aFsLxIIaC16Y

Eni SpA will likely reach an agreement with Kazakhstan over the development of the Kashagan field, Chief Executive Officer Paolo Scaroni said. A solution to the current impasse is ``most probable,'' Scaroni today told reporters in Astana, the country's capital. One possibility is that Kazakhstan may seek a higher stake in the field, Scaroni said. He said negotiations officially started on Oct. 5.

…

Chile CGE Withdraws Rate Freeze Case Against Argentina Government

October 5, http://money.cnn.com/news/newsfeeds/articles/
djf500/200710051642DOWJONESDJONLINE000715_FORTUNE5.htm

Chilean energy company Compania General de Electricidad SA (CGE.SN), or CGE, has suspended its claims against Argentina in the World Bank's International Center for Settlement of Investment Disputes, or Icsid, Argentina's attorney of the Treasury told Dow Jones Newswires Friday.

The power company had sued Argentina for $125 million over claims that its Argentine unit, CGE Argentina, was hurt by a the Argentine government's decision to convert utility rates from dollars into devalued Argentine pesos and freeze them in January 2002 amid an economic crisis.

The company withdrew its complaints on Wednesday following successful rate renegotiations with the Argentine province of Tucuman.

…

Court of First Instance: Akzo Nobel Chemicals and Akcros Chemicals v Commission (T-125/03, Judgment 2007-09-17)

The judgment can be found here http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=EN&Submit=Rechercher$docrequire=alldocs&numaff=
T-253/03&datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100

PCA: Guyana/Suriname Award rendered on September 17th

http://www.pca-cpa.org/showpage.asp?pag_id=1147

An award was rendered on September 17, 2007 in the Guyana/Suriname arbitration concerning the delimitation of Guyana's maritime boundary with Suriname. Proceedings commenced on February 24, 2004, pursuant to Articles 286 and 287 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and in accordance with Annex VII to the Convention.

Argentina: Setback for Argentina in international energy dispute

October 3, http://www.mercopress.com/vernoticia.do?id=11515&formato=HTML

The International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C., has awarded Sempra Energy approximately 172 million US dollars, including interest, to settle a 2002 dispute involving the company's 43% ownership in two Argentine natural gas holding companies, Sodigas Pampeana and Sodigas Sur.

"We are pleased that, after several years, this arbitration case has been decided in our favor," said Javade Chaudhri, executive vice president and general counsel for Sempra Energy. "We hope that the government of Argentina will honor its legal obligations as we seek immediate enforcement of the award."

The dispute involved Sempra Energy's efforts to recover the utilities' diminution in value that occurred as a result of measures taken by the Argentine government in early 2002. The September 28, 2007 award involved arbitration proceedings under the 1994 Bilateral Investment Treaty between the United States and Argentina.

…

Argentina: Sempra gets $172M settlement

October 2, http://washington.bizjournals.com/losangeles/stories/2007/10/01/daily17.html

Sempra Energy has been given $172 million as a settlement in a dispute involving the company's 43-percent ownership in two Argentine natural gas holding companies, Sempra said Tuesday. The dispute, which started in 2002, involved Sempra Energy's efforts to recover the reduction in value of Sodigas Pampeana and Sodigas Sur after the Argentine government enacted certain measures in 2002.

The decision was made by the International Centre for Settlement of Investment Disputes in Washington, D.C. "We hope that the government of Argentina will honor its legal obligations as we seek immediate enforcement of the award," Javade Chaudhri, executive vice president and general counsel for Sempra Energy, said in a statement.

…

ICC: Vietnamese delegation is briefed on workings of ICC Arbitration

October 1, http://www.iccwbo.org/iccbgeje/index.html

A delegation of 12 Vietnamese judges and arbitrators visited ICC headquarters in Paris last month to meet with representatives of the ICC International Court of Arbitration for an in-depth briefing on the range of services it provides. Vietnam became the WTO's 150th member on 11 January 2007 and enactment of a new arbitration law is currently underway in the country.

…

USA: Supreme Court turns down Hynix appeal in Rambus suit

October 1, http://sanjose.bizjournals.com/sanjose/stories/2007/10/01/daily16.html

The U.S. Supreme Court won't intervene in an antitrust lawsuit brought by Rambus Inc. against Hynix Semiconductor Inc. and others over pricing issues, according to reports Monday. Los Altos-based Rambus (NASDAQ:RMBS) had sued South Korea-based Hynix in May 2004, as well as Samsung Electronics Co. and Boise, Idaho-based Micron Technology Inc. (NYSE:MU) alleging they conspired to fix prices for memory chips.

Both a trial court and California appellate court rejected attempts by Hynix and Samsung to move the dispute away from trial and into arbitration. Associated Press reported that since the high court rejected Hynix's appeal, the case will come back to California courts.

Threat to investors in Kazakhstan

September 27, http://news.bbc.co.uk/1/hi/business/7015361.stm

Kazakhstan's parliament has passed a law allowing the government to break contracts with foreign companies. The law still needs to be ratified by the president. But it comes at a time when foreign investors in the oil rich central Asian republic are already feeling uneasy. There is currently a dispute between the government and a consortium of Western oil companies over the massive Kashagan oilfield.

…

Philippines: 31 Fraport officials charged

September 24, http://www.manilatimes.net/national/2007/sept/24/yehey/top_stories/20070924top5.html

A FRAPORT stockholder has filed charges in Frankfurt against 31 executives of that company in connection with the mothballed Terminal 3 of the Ninoy Aquino International Airport (NAIA), a press release said Sunday.

"Charged before the Frankfurt Public Prosecutor's Office are members of the corporation's Management and Supervisory Boards in connection with the loss of the firm's US$425-million investment claim against the Philippines at the World Bank's International Center for Settlement of Investment Disputes last month," according to the press release from Georg Wengert, who provided a copy of the complaint to local media.

The press release said Wengert filed the charges on August 31. He also sent a copy of his complaint to the Philippine Solicitor General Agnes Devanadera with a cover letter also dated August 31.

…

Barbados: Arbitration the new niche

September 23, http://www.nationnews.com/story/291089665643469.php

BARBADOS COULD BECOME a major player in the settling of international disputes. Deputy Prime Minister and Minister of Economic Affairs and Development Mia Mottley said recently that a letter of intent was signed last week with the London Court of International Arbitration (LCIA), one of the three most respected arbitral bodies in the world.

"They are looking to open up their first ever regional branch office globally in Barbados where we can, from this location, service arbitrations for Latin America and the Caribbean.

"They are hoping to be able to continue this kind of activity but it is of significance for us that Barbados was the country with whom they first have entered this kind of relationship," Mottley told reporters during a Press conference at her Warrens, St Michael office.

…

Asia: Resolving Business Disputes Via Arbitration Getting More Popular In Asia

September 20, http://www.bernama.com.my/bernama/v3/news_business.php?id=286053

Resolving business disputes by means of arbitration is getting more and more popular in Asia as it proves to be effective and meets the needs of the parties' underlying strategic business objectives.

Hong Kong Trade Development Council (HKTDC) director, Peter Phang, said Hong Kong was a particularly ideal platform for arbitrating Chinese-foreign business disputes due to its unique legal status.

"The number of cases handled by Hong Kong International Arbitration Centre (HKIAC) has been increasing over the past decade, from 197 in 1996 to 394 in 2006," he said at the seminar, themed "Arbitration in Asia -- The Hong Kong Advantage" here Thursday.

South Africa: Arbitration begins this week in Sallies-Honeywell dispute

September 19, http://www.miningweekly.co.za/article.php?a_id=117200

Battling fluorspar producer Sallies on Wednesday told shareholders that witness hearings in its case against US corporate Honeywell would begin on Thursday in Zurich, but that a tribunal decision could take "some time".

The JSE-listed company is claiming $1-million from Honeywell for payment of material it delivered to the US firm, which, in turn, is claiming $6,8-million from Sallies, in damages, as a result of breach of contract.

…

DIAC e-services delivery to start in January 2008

September 19, http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=
data/business/2007/September/business_September478.xml&section=business&col=

Starting January 2008, the Dubai International Arbitration Centre (DIAC) will be able to, among other things, conduct the meeting and voting system for its board of trustees as well as have its executive committee hold meetings and make decisions online.

Hussam Al Talhuni, DIAC director, yesterday said this is part of Phase 1 of the ongoing project being undertaken for his office by Singapore's CrimsonLogic, to develop electronic government services for the private sector. "We are in the process of upgrading our services to the level that matches international standards, and to keep up with the development of Dubai," he said. "This also means having the whole government develop all sorts of e-services..."

…

AAA Files Amicus Curiae Brief Opposing Expansion of Judicial Review of Arbitral Awards

September 17, http://www.adr.org/sp.asp?id=33066

The American Arbitration Association recently filed an amicus curiae brief urging the United States Supreme Court to affirm the decision of the Ninth Circuit Court of Appeals in Hall Street Associates LLC v. Mattel Inc. , which held that the Federal Arbitration Act (FAA) does not permit parties to agree to expansive judicial review of arbitral awards.

The case stemmed from a post-dispute arbitration agreement between Hall Street, a property owner, and Mattel, its lessee. The arbitration agreement provided that a reviewing court must vacate the arbitration award where the arbitrator's findings of facts were not supported by substantial evidence, or where the arbitrator's conclusions of law were erroneous.

…

Pdvsa ready to face arbitration with Exxon Mobil

September 14, http://www.eluniversal.com/2007/09/14/en_eco_art_pdvsa-ready-to-face_14A1023237.shtml

Venezuelan state oil holding Pdvsa was not surprised by the fact that US Exxon Mobil last week filed an action with the International Center for Settlement of Investment Disputes (ICSID) seeking arbitration, in connection with the forced migration of strategic partnership Cerro Negro to a joint venture where the Venezuelan State holds a majority stake.

"What (Exxon Mobil) asked for during the negotiations we held made no sense," said Minister of Energy and Petroleum and CEO of state oil holding Pdvsa Rafael Ramírez, after attending a meeting in Vienna with lawyers that are to advise the Venezuelan conglomerate to face the lawsuit at the ICSID, a body of the World Bank.

"We are ready to face this," he added, even though according to President Hugo Chávez Venezuela and other countries in the region are making steps to withdraw from ICSID based on sovereignty issues.

…

Algeria: Sonatrach and Repsol seeking compromise

http://www.elkhabar.com/FrEn/lire.php?ida=82706&idc=52

The Spanish oil and gas company Repsol CEO said there is still hope to reach a compromise with Sonatrach concerning Gassi Touil project before the United Nations Commission on International Trade Law (UNCITRAL) decides on the case.

Mr. Antoine Brufau told Spanish media that the two parties are attempting to reach compromise either through bilateral talks between governments of both Algeria and Spain or on the level of International Centre for Settlement of Investment Disputes ICSID. To recall Mines and Energy Minister Mr. Chakib Khelil has also announced that the two parties are likely to reach a compromise through negotiations.

…

PODCASTS

International Dispute Negotiation - Discussions on hot topics in cross-border commercial conflict resolution

http://www.cpradr.org/TrainingEvents/Podcasts/tabid/261/Default.aspx

International Dispute Negotiation (IDN) is presented by CPR as an example of the ways professionals from different countries and backgrounds approach dispute resolution. The podcast is intended to help listeners understand the risks of disputes and shed insight on optimal ways of accepting, mitigating, and managing those risks in the real world, whether through mediation, arbitration, or litigation that arises far from home. The host is Michael McIlwrath, Senior Counsel, Litigation for GE Infrastructure - Oil & Gas. Michael is based at his company's headquarters in Florence, Italy. He represents his division in disputes world-wide, including work in negotiations, mediation, and arbitration, and is a long-time member of the CPR Institute and its European Advisory Committee.

Available Podcasts:

These can be downloaded here: http://www.cpradr.org/TrainingEvents/Podcasts/tabid/261/Default.aspx

EVENTS

OGEMID reception, Columbia University - New York: October 31, 17.15

As part of Columbia University Law School's investment treaty conference and following a suggestion by Prof Jose Alvarez, of Columbia Law School and President of the American Society of International Law, Prof. Waelde would like to invite OGEMID members to get to know each other personally at a reception. We hope that there will be enough "electronic voices" converted into "real people".

Location: Columbia University, New York, Lerner Hall, Room 555.

About the conference http://www.cpii.columbia.edu/events/

ICDR to Hold International ADR Conferences in U.S., Canada

http://www.adr.org/sp.asp?id=33067

The International Centre for Dispute Resolution will be holding a series of conferences in the United States and Canada featuring a wide range of topics that center on the need for effective ways to manage disputes stemming from cross-border transactions in an increasingly global economy.

The series has two tracks: one focusing on the impact of the North American Free Trade Agreement (NAFTA) in the past 15 years and the other focusing on important updates from a number of the ICDR's areas of operation.

The ICDR, the international division of the American Arbitration Association, is responsible for the administration of all international cases filed with the AAA. The center's international expertise, multilingual staff, and numerous cooperative agreements with arbitral institutions around the world help ensure that disputes are administered in an efficient, cost-effective and culturally sensitive manner.

…

Symposium: "Is There a New Common Law of Investment Arbitration?" - October 16

http://www.law.gwu.edu/News/News+Stories/2007+International+Arbitration+Symposium.htm

Tuesday, October 16, 2007 at The George Washington University Law School

Is the application of treaty standards producing common principles of investment arbitration? Are arbitral decisions striking an equitable balance between the competing interests involved? This one-day symposium will provide a critical appraisal of arbitral tribunals' application of the substantive standards enshrined in investment treaties. The symposium will allow for the full engagement of all participants.

…

ICC Arbitration workshop for corporate users - 22 October

http://www.iccwbo.org/events/display12/index.html?CodeICMS=S0720

A day of discussions on how to make the most of arbitration will take place at ICC in Paris on 22 October. Designed specially for industry professionals, this informal and interactive training programme will offer practical guidance and debate on making the best choices in relation to arbitration.

ICC Arbitration in Latin America - 4 - 6 November

http://www.iccwbo.org/events/display12/index.html?CodeICMS=S0721

The International Court of Arbitration returns to Miami on 4 to 6 November for the ICC Annual Conference on International Commercial Arbitration in Latin America. Now in its fifth year, this event is a key forum for understanding arbitration in the region and includes presentations from a distinguished line-up of professionals.

Commercial and Investment Arbitration in Latin America: New Challenges for Governments, Corporations and Practitioners, November 29 - 30

The conference is hosted by Cameron May; Pérez, Bustamante & Ponce and King & Spalding; and will take place in Quito, Ecuador, on November 29 and 30, 2007. This conference brings together over thirty high profile panelists from law firms, universities, corporations and government representations to discuss the latest developments in commercial and investment arbitration in different Latin American jurisdictions.

The complete program and registration information is online at http://www.cameronmay.com/documents/Arbitration%20in%20Latin%20America%20ENG.pdf

Report: Brazil Conference Turns Spotlight on Arbitration Under ICDR Rules

http://www.adr.org/sp.asp?id=33096

A recent international arbitration conference in São Paulo, Brazil, turned the spotlight on arbitration under the rules and administration of the International Centre for Dispute Resolution (ICDR). The conference, attended by more than 120 arbitration experts and lawyers from Brazil and the United States, also tackled the complexities of arbitrating energy industry disputes.

A mock international arbitration featuring civil law attorneys on one side and common law attorneys on the other was among the highlights of the conference held on July 27. The hypothetical case involved the alleged breach of an exclusive distribution agreement between an American computer company and its Brazilian supplier.

…

MOVES/JOBS

Fulbright Partner Kevin O'Gorman takes leadership position in Young Arbitrators Forum

http://www.fulbright.com/index.cfm?fuseaction=news.detail&article_id=6695&site_id=286

Kevin O'Gorman has been named to the Steering Committee of the Young Arbitrators Forum. YAF is organized by the United States Council for International Business, the U.S. national committee to the International Court of Arbitration of the International Chamber of Commerce. It provides young professionals in international arbitration a forum to enhance their knowledge of international arbitration, exchange ideas, and develop relationships in the arbitration community.

BOOKS

ICC: Guidance on enhancing efficiency in arbitration

http://www.iccwbo.org/court/arbitration/id16320/index.html

ICC has published a report from its Commission on Arbitration containing suggestions on how to reduce time and cost in arbitration. The report will be of valuable assistance to arbitrators, parties and their counsel when seeking ways of achieving greater efficiency in case management.

Proskauer & Rose LLP Offers International Arbitration Guide

http://www.proskauerguide.com/welcome

The law firm Proskauer & Rose LLP has published online a useful and complimentary Guide to International Litigation and Arbitration, written by members of Proskauer's Litigation and Dispute Resolution Department and International Practice Group.

ACICA: Managing Cross-Border Disputes [pdf]

http://www.virgilcameron.com/acica/ACICA-IABooklet.pdf

ACICA has recently published a booklet entitled Managing Cross-Border Disputes: International Arbitration Explained. The booklet was prepared with the support of the Australian Government and seeks to assist Australian corporations by explaining the significance and advantages of international arbitration for managing disputes in cross-border transactions.

A press release from the Attorney-General of Australia about the booklet can be found here.

Global survey sheds light on perceptions of international arbitration [pdf]

http://www.acica.org.au/downloads/International arbitration FINAL sept 25 07.pdf

A comprehensive global study commissioned by PricewaterhouseCoopers unveils the perceptions of international arbitration held by in-house counsel of leading companies.

Managing Business Disputes in Today's China - Duelling with Dragons

Edited by
Michael J. Moser
Kluwer 2007, ISBN 90-411-2462-4

As more and more transnational businesses invest in China, the spectre of commercial disputes looms larger and larger. This book, a deeply knowledgeable introduction to the law and practice of commercial dispute settlement in today's China, is especially valuable because such disputes raise a plethora of issues that challenge the expertise of non-Chinese lawyers.

Written by senior lawyers with rich practical experience in China, Duelling with Dragons uses a hypothetical scenario to highlight the kinds of disputes that can arise in the course of initiating and operating a Chinese joint venture. After introductory chapters setting out the background and the disputes facing "Ricepower" and its investors, subsequent chapters deal with an overview and evaluation of the various options available to the parties to resolve their conflicts. These include such mechanisms as the following:

Specialized themes include intellectual property disputes, employment and labour disputes, criminal law aspects of business disputes, and enforcement of dispute outcomes both inside China and abroad. The book also features a detailed table of legislation and cases, and statistics on arbitration and litigation in China.

With its practical, problem-solving approach, Duelling with Dragons provides corporate counsel, international lawyers, and business people, as well as students of dispute resolution, with a realistic picture of dispute settlement practices in business transactions in China today.