issue #20, week 42. 19 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

Honduras and Fixes a Single Maritime Boundary between Nicaragua and Honduras

by Pieter Bekker & Ana Stanic, http://www.asil.org/insights/2007/10/insights071017.html

In a 94-page judgment issued October 8, 2007, the International Court of Justice (ICJ or Court) found unanimously that Honduras, not Nicaragua, has sovereignty over four disputed islands in the Caribbean Sea. In addition, the Court fixed (14-3) the course of the single maritime boundary line between the two countries in the Caribbean Sea.[1] The case, brought by Nicaragua in December 1999, took nearly eight years to be resolved, and followed decades of diplomatic wrangling and occasional maritime incidents souring the relations between these two Central American neighbors.

…

Venezuela: Exxon CEO sees likely settlement with Venezuela

October 16, http://english.eluniversal.com/2007/10/16/en_eco_art_exxon-ceo-sees-likel_16A1132959.shtml

Even though Exxon Mobil filed an arbitration claim against Venezuela in the International Center for Settlement of Investment Disputes (ICSID), the US oil giant continues to pursue settlement talks that could lead to a quicker resolution, Chief Executive Rex Tillerson said Monday. He said talks with Venezuela are under way and said he still hopes an amicable resolution will be possible, AP reported.

…

Ecuador Oil: More Trouble Ahead

October 16, http://www.latinbusinesschronicle.com/app/article.aspx?id=1702

President Correa's oil policies will result in more disputes with foreign companies and reduced oil production, experts predict.

…

Argentina: Bracing for Potential Energy Crisis in Argentina

OPED by L. Peterson, http://www.embassymag.ca/html/index.php?display=story&full_path=/2007/october/17/peterson/

If there is a prize for political uxoriousness, then Nestor Kirchner might have a lock on this year's award. With a presidential election looming at the end of the month, the outgoing Argentine president has been dogged by accusations that he has kept a firm lid on gas and electricity prices so as to aid the candidacy of his wife Cristina Fernandez Kirchner.

The New York Times recently reported that Mr. Kirchner's strategy "has satisfied voters and kept Argentina's economy humming, for now." But with foreign investors chafing at price-caps, and declining to make new investments in productive capacity, a Mrs. Kirchner presidency could coincide with a full-blown energy crisis.

…

Turkmenistan Passes New Foreign Investment Law

October 15, http://www.kommersant.com/p814971/economic_legislation/

Turkmenistan may begin liberalizing its tightly closed economy with a new edition of the law "On Foreign Investment" that will allow foreigners to acquire real estate and enterprises. Foreign investors will also have the right to form joint enterprises and to form their own enterprises. The national currency will be redenominated as well. The changes are cosmetic, however.

…

Russia: Foreigners fear Russia investment law may stall

October 15, http://www.reuters.com/article/governmentFilingsNews/idUSL154138620071015

Russia's parliament on Monday asked for clarification of a draft law that would set ground rules for foreign investors in strategic industries, raising concerns that adoption of the law could be postponed. "It is necessary to clarify the list of activities deemed 'strategic'. At the moment, such clarification is de-facto lacking," Martin Shakkum, head of the parliament's industry committee, said during a hearing.

The parliament has also asked the government to submit amendments to the existing subsoil law, which should define "strategic" natural resource deposits. The new investment law would then apply curbs to exploration of such deposits. The cabinet has promised the investment law would be passed by parliament this year but, with six weeks left before parliamentary elections, investors are increasingly worried the law could be shelved or changed. Foreign companies face uncertainty as an increasingly self-confident Russia, its economy boosted by high commodities and energy prices, has sought to regain control over strategic assets.

…

Russia: Rosy Outlook Prevails for Foreign Investment

OPED by Vedomosti

Prime Minister Viktor Zubkov delivered an upbeat speech Monday to the Federal Investment Advisory Council, a body that brings together state officials and international CEOs. Russia's total accumulated foreign investment has reached $178.5 billion as of July 1 of this year, $80.6 billion of which was direct investment. In comparison, the level of foreign investment for the first six months of 2007 was $60.3 billion -- almost three times more than the first six months of 2006.

…

Singapore eyes Asia's booming int'l arbitration industry

October 14, http://news.xinhuanet.com/english/2007-10/14/content_6881206.htm

Singapore could play a major role in Asia's booming international arbitration industry, said Law Minister and Deputy Prime Minister S. Jayakumar on Sunday. Opening the biannual plenary meeting of the International Chamber of Commerce's (ICC's) Commission on Arbitration here on Sunday, Jayakumar said international commercial arbitration has become a big industry in Asia.

"With Asian economies booming and increasing in sophistication, there is an expected rise in international commercial disputes and a concomitant growing acceptance of arbitration as a form of dispute resolution."

"In Asia, with more parties entering into cross-border agreements, international arbitration cases have increased not only in numbers in recent years, but also in complexity and in the quantum of dispute settlements," he said. He added that Singapore could play a role in the booming international arbitration in Asia, because of factors such as its central geographic location and its reputation as a top venue for international meetings.

…

Zimbabwe: White Farmers Appeal to SADC

October 12, http://allafrica.com/stories/200710120784.html

THE last remaining white commercial farmers have appealed to the regional Southern African Development Community (Sadc) Tribunal in an effort to stop government from expropriating their properties.

Government, using Constitutional Amendment No 17, which effectively nationalised all land, and the Gazetted Land (Consequential Provisions) Act served all remaining white farmers with eviction notices. The majority of the notices, which have since expired, gave farmers a 90-day grace period to wrap up businesses and vacate the property from the day of receiving the notice. Failure to comply attracts a two-year jail term or fine or both if found guilty. The latest wave of evictions is set to derail Reserve Bank governor Gideon Gono's recovery plan since most of the affected farmers had benefited from the Agriculture Sector Production Enhancement Facility (Aspef).

…

This becomes the second appeal to an international body after more than 11 Dutch farmers evicted during the emotive land reform programme took Zimbabwe to the International Centre for Settlement of Investment Disputes (ICSID).

The Dutch farmers argue that their properties were protected under a bilateral investment treaty in which Harare promised to pay compensation to Dutch nationals in disputes arising out of any investments in Zimbabwe. The final hearing of the case has been set for October 29 to November 1 in Paris.

…

Bulgaria: EVN withdrawing litigation at the International Court of Arbitration in Paris for Bulgaria's failure to carry out duties under the Slanchev Briag EDC privatisation agreement

October 12, http://www.sofiaecho.com/article/
bulgaria-evn-agree-on-sale-of-slanchev-briag-electricity-distribution-company/id_25457/catid_67

Austrian energy utility EVN, the Privatisation Agency (PA) and the Agency for Post-Privatisation Control (APPC) signed late Thursday an out-of-court settlement on Slanchev Briag Electricity Distribution Company. For three years, the Bulgarian energy firm has been the apple of discord between the sales authority and the energy authority.

The agreement obliges the Austrians to pay 44.232 million leva only, in return for which they are withdrawing litigation at the International Court of Arbitration in Paris for Bulgaria's failure to carry out duties under the Slanchev Briag EDC privatisation agreement, the company said.

The said agreement signed in November 2004 and entailed the bundled sale of 67 per cent in each of the electricity distribution companies in Plovdiv and Stara Zagora.

…

INTERVIEW: Argentina Seeks Diplomatic Exit From ICSID Suits

October 12, http://news.morningstar.com/news/ViewNews.asp?article=/
DJ/200710121648DOWJONESDJONLINE000727_univ.xml&Cat=Utilities

Facing a flood of unfavorable arbitration rulings, Argentina is shifting from a legal strategy to a diplomatic one in a bid to dismiss billions of dollars in foreign investor claims arising from its 2002 financial crisis.

Under the new strategy, outlined by Chief Counsel for the Argentine Treasury Osvaldo Guglielmino in an interview with Dow Jones Newswires, the government will request that the U.S. formally recognize Argentina's right to declare its 2001-2002 financial meltdown an emergency event that permitted it to break contracts otherwise protected by a U.S.-Argentine investment treaty. That treaty is the foundation for many of the outstanding complaints against Argentina at the World Bank-sponsored International Court for the Settlement of Investment Disputes, or ICSID.

…

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/

ICC: Arbitration from the client's perspective - 22 October

http://www.iccwbo.org/iccbghfi/index.html

When negotiating dispute resolution provisions in an international contract, it is important for a company to be aware of the choices and the central role it can play in arbitration to tailor the procedure to its needs.

On 22 October, ICC will offer a one-day training course for business professionals on how to get the most from international commercial arbitration.

Arbitration: a corporate viewpoint will provide a unique opportunity to share experiences and interact with distinguished international general counsel, legal directors and arbitrators in an informal and interactive forum.

…

The Enclave Economy: Foreign Investment and Sustainable Development in Mexico's Silicon Valley - October 26

http://www.cceia.org/calendar/data/6076.html

Carnegie Endowment for International Peace, 1779 Massachusetts Avenue NW, Washington, DC 20036

Foreign investment has been widely promoted as a way to create good jobs, reduce poverty, and kick-start sustainable modern industries in developing countries. The Enclave Economy calls into question whether such investment will fulfill this promise in the absence of complementary public policies. In Enclave Economy: Foreign Investment and Sustainable Development in Mexico's Silicon Valley, Kevin Gallagher and Lyuba Zarsky show that Mexico's post-NAFTA success in attracting foreign direct investment to its information technology sector, particularly in the Guadalajara region, did not translate into social, economic, and environmental benefits. Foreign investment created an "enclave economy" the benefits of which were confined to an international sector not connected to the wider Mexican economy. Charting the rise and fall of Mexico's "Silicon Valley," the authors explore issues that resonate through much of Latin America and the developing world.

ICC conference spotlights arbitration in Latin America - 4 November

http://www.iccwbo.org/iccbgiba/index.html

Participants from all over Latin America and beyond will gather in Miami next month to discuss elements of international arbitration that are of particular interest to Latin American cases.

Now in its fifth year, ICC's conference International Commercial Arbitration in Latin America: The ICC Perspective is a key forum for understanding arbitration in the region. This year's event, which will take place from 4-6 November, includes presentations by a distinguished line-up of arbitration professionals.

Fernando Mantilla-Serrano, Partner at Shearman and Sterling LLP, Paris and member of the ICC International Court of Arbitration, will speak at the conference. "I know of few other events during the course of the year that manage to bring together such a large group of professionals specializing in Latin American arbitration," he said. "In that sense, the annual ICC conference has established itself, in its relatively short history, as one of the year's de rigueur events for those wishing to stay abreast of Latin American arbitration developments."

Sessions offered at this year's two-day conference include:

With the number of attendees growing steadily since the first conference took place in 2003, this year's conference also boasts more than 35 sponsors and supporters.

In the interest of providing an opportunity for young arbitration professionals and as a complement to the conference, a meeting for young arbitrators entitled Effective Case Management in International Arbitration will take place on 4 November. It will offer sessions on the proper management of cases from the perspective of both counsel and arbitrator

Report: ICC Commission on Arbitration meets in Asia

October 15, http://www.iccwbo.org/court/arbitration/id16734/index.html

ICC's Commission on Arbitration, the rule-making and research body for ICC Dispute Resolution, met yesterday in Singapore. This meeting outside ICC's Paris headquarters marked an important step in the regional development of ICC's dispute resolution services.

The Commission's semi-annual meetings provide an opportunity for its various Task Forces to report on work in progress. On this occasion, recognizing Asia's growing presence in world trade, the meeting in addition included keynote presentations by local specialists on arbitration in the region. Singapore's Honourable Deputy Prime Minister and Minister for Law, Professor Jayakumar, spoke on his country's role in the development of arbitration in the region, while Mr Sumeet Kachwaha, from the Bar Association of the Indian Supreme Court, spoke on arbitration in India, and Mr Jingzhou Tao, member of the ICC International Court of Arbitration, gave a presentation on arbitration in China.

Introducing the meeting, Mr Peter Wolrich, Chair of the Commission said: "This is a significant occasion, since it is the first time in several decades that the Commission on Arbitration is holding a meeting outside of Paris. Doing so, however, reflects the nature of our Commission. We have over 490 members from more than 90 countries and are thus a truly international body. So it is entirely natural for Commission meetings to be held in various parts of the world."

Commission meetings attract delegates from ICC national committees all over the world. The Asia Pacific region was strongly represented at yesterday's meeting, with participants from Australia, China, India, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, Sri Lanka and Thailand. Ms Cheng Yee Khong, the ICC International Court of Arbitration's Regional Director for Asia, welcomed the decision to hold the meeting in Singapore. "The event has greatly enhanced ICC's visibility in the region and provided an opportunity for direct exchanges between ICC policy makers and dispute resolution specialists in the region."

…

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

Two White & Case Partners Take Leading Roles in New International Arbitration Advocacy Training Body

http://www.whitecase.com/News/Detail.aspx?news=1818

Two of White & Case's 130-strong international arbitration team have taken senior roles within a newly-launched organization, the Foundation for International Arbitration Advocacy ("FIAA"), which is the first organization dedicated to providing learning-by-doing advocacy training specifically designed for international arbitration. New York-based partner and co-head of White & Case's International Arbitration Practice Paul Friedland has been named to the FIAA's Board of Trustees; Paris-based partner Andrew McDougall has been named to its Executive Committee.

…

BOOKS

World Investment Report 2007

http://www.unctad.org/Templates/webflyer.asp?docid=9001&intItemID=4361&lang=1&mode=highlights

World Investment Report 2007 (WIR07) is the seventeenth in a series published by the United Nations Conference on Trade and Development (UNCTAD). The Report analyses the latest trends in foreign direct investment (FDI) and puts a special focus in 2007 on the role of transnational corporations (TNCs) in the extraction of oil, gas, and metal minerals.

Higher prices for many minerals have led to renewed investor interest in the extractive industries. TNCs ? including some of the world´s largest corporations ? play a key role in the mining of metals and in the extraction of oil and gas. Privately owned TNCs dominate the harvesting of metal minerals, while State-owned companies from developing and transition economies are key players in oil and gas. Many such State-owned firms are emerging as TNCs in their own right.

Drawing on unique data, the Report examines TNC involvement in the extraction of mineral resources and maps the key countries and companies. It also discusses how the forces driving investment change as raw materials progress up the "value chain" to become finished products, and as different types of companies participate. In view of recent discussion of the so-called "resource curse," the Report explores how the participation of TNCs may help or hinder long-term, broad-based economic development in developing countries -- the best approach for reducing poverty and raising living standards. It considers how energy and mineral extraction can help governments achieve such aims.

As in previous years, WIR07 presents the latest data on FDI and traces global and regional trends in FDI and in international production by TNCs. Global FDI inflows rose in 2006 for the third consecutive year. This growth was shared by all major country groups: developed countries, developing countries and the transition-economies of South-East Europe and the Commonwealth of Independent States . Rising demand for commodities was reflected in a steep increase in natural resource-related FDI, although the services sector continued to be the dominant recipient of FDI. Among the developing regions, FDI inflows to subregions such as North Africa, sub-Saharan Africa, West Asia, South Asia, East Asia, and South-East Asia were at record levels, as were foreign investment flows to transition economies.