issue #25, week 48. 28 November 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

Kuwait: Wataniya wins arbitration case vs Orascom telecom - KIPCO to receive additional $325.7 mln from Qtel

November 24, http://www.arabtimesonline.com/kuwaitnews/pagesdetails.asp?nid=8506&ccid=12

KUWAIT: KIPCO - the Kuwait Projects Company - announced today that an International Chamber of Commerce (ICC) Tribunal has ruled in favour of Wataniya Telecom in an arbitration case brought by Orascom Telecom. The Arbitral Tribunal also awarded the ICC costs to Wataniya. As a result of the ICC's ruling, the consortium led by KIPCO is entitled to receive from Qatar Telecom (Qtel) a further KD 89.4 million ($ 325.7 million) as proceeds from the sale of Wataniya. KIPCO Group's share of these proceeds - amounting to KD 79.2 million ($ 288.6 million) — will create additional income in KIPCO's 2007 fourth quarter earnings. Qtel and the KIPCO consortium had agreed that part of the consideration for the KD 1.1 billion ($ 3.7 billion) sale of a controlling stake in Wataniya in March, 2007 would be held in escrow pending resolution of this dispute and some other issues. Most of these issues have now been resolved.

Commenting on the ICC ruling, Mr Faisal Al Ayyar, Managing Director and Chief Executive of KIPCO said: "We are absolutely delighted with the ICC's award which confirms Wataniya's continuing ownership interest in Tunisiana, one of the best performing telecom operators in North Africa. As the biggest sale of its kind so far in the Gulf region, the sale of Wataniya was an extremely complex deal that we managed to complete in just ten days. So, I'm delighted that from our perspective, the sale of Wataniya is now complete and we are able to take the full sale amount of over one billion Kuwaiti dinars as income before the end of this year." Shuaa Capital had lowered its 2007 and long-term financial forecasts for Wataniya this month partly due to uncertainty over the dispute. Tunisiana made revenues of $461 million in 2006, and has increased its customer base by 400,000 subscribers to 3.5 million in the last year.

…

Ecuador Eschews Chinese Protest on Oil Tax

November 23, http://online.wsj.com/article/SB119577959203101463.html?mod=googlenews_wsj

Ecuador President Rafael Correa shrugged off a potential arbitration suit from China's oil companies over his country's new windfall tax, and he criticized the international system for solving commercial disputes as serving Western interests.

He was speaking after a person at Andes Petroleum Ecuador Ltd., owned by China Petrochemical Corp. and China National Petroleum Corp., said the October levy had made their business in the South American ...

Court sides with U.S. oil firm over Ecuador tax row

November 21, http://www.reuters.com/article/domesticNews/idUSN2115831520071121?feedType=RSS&feedName=domesticNews

An international tribunal has ordered Ecuador to temporarily halt demands to charge U.S.-owned City Oriente a controversial windfall oil tax approved last year, according to court documents released by the company Wednesday.

The action by the World Bank International Center for Settlement of Investment Disputes could help other foreign oil companies make their case against the windfall tax that they say hurts their operations in South America's No. 5 oil producer, industry sources said.

…

China firms to seek arbitration in Ecuador oil row

November 21, http://economictimes.indiatimes.com/China_firms_to_seek_arbitration_in_Ecuador_oil_row/articleshow/2558684.cms

BEIJING: Chinese state oil firms will seek international arbitration to try to overturn a move by Ecuador to impose a surprise windfall tax, arguing it threatens millions of dollars of investment in the Andean country, industry executives said.

The comments came a day after Chinese President Hu Jintao hosted a state visit by Ecuador President Rafael Correa, who announced the hefty windfall royalty in October in an attempt to share more "extraordinary oil revenue" in his country.

…

United Arab Emirates: DIFC joins with London Court of International Arbitration

November 19, http://www.bi-me.com/main.php?id=15007&t=1&c=34&cg=4

Dubai International Financial Centre is set to announce a joint venture with the London Court of International Arbitration to launch a globally-recognised dispute resolution mechanism in a further bid to cement Dubai's reputation as the region's business hub.

The initiative, which could be unveiled as early as this month, aims to turn the DIFC into an international centre for the resolution of business disputes, officials say. Contractual disputes are a common source of difficulty for firms operating in the Gulf, with many companies choosing to write clauses into contracts calling for international arbitration in the event of a dispute.

The DIFC, which has its own courts for financial matters that are separate to the Dubai legal system, will join up with the London Court of International Arbitration. Any firm in the world will be able to write in clauses calling for arbitration at the DIFC.

"No-one wants to call in the lawyers," said one official. "It's much better to go to arbitration."

…

Private justice system can only survive if parties consider it just

http://www.ft.com/cms/s/0/cd0862c8-963f-11dc-b7ec-0000779fd2ac.html

From Prof Louis T. Wells: Sir, In "The renationalisation of US justice" (November 14), Patti Waldmeir points to "the complaint . . . that Americans are being denied their day in court when they sign contracts that force them to arbitrate disputes with companies that provide everything from their mobile phones to their jobs". A number of developing countries have similar complaints about the private justice system that governs disputes between foreign investors and host governments. A few - witness Bolivia, Ecuador and Venezuela - are attempting to withdraw from commitments made in bilateral investment treaties and regional trade agreements.

…

ICSID Launches New Website

http://icsid.worldbank.org/

The International Centre for Settlement of Investment Disputes (ICSID) launched its new website on November 20th.

The new ICSID website is dynamic in nature. This feature marks a major transformation of the website into an information system on ICSID and its activities. The new website is interactive and allows users to search through its content and find information faster and in a more user-friendly manner. The new dynamic format is meant to address the constant increase in size and complexity of the online information provided by ICSID. The content of the new website has also been enlarged. Navigation has been improved by adding a ?Quick Locators? feature, a ?Site Map,? and by making content browsable under a number of criteria. A ?Search? feature has been added to ICSID Panels, cases, online decisions and awards and ICSID bibliography. Along with these individual searches, there is also a facility for global search of the entire website.

Access to the old site will be discontinued on December 4, 2007. Visit the new website at http://icsid.worldbank.org/

Zimbabwe Admits Breach of Law Against Dutch Farmers

November 16, http://allafrica.com/stories/200711160580.html

THE Zimbabwe government has admitted that it wronged white commercial farmers when it violently evicted them from their farms at the height of Zanu PF-instigated land invasions in 2000.

During an International Centre for Settlement of the Investment Disputes arbitration hearing in Paris, France, a fortnight ago between government and Dutch farmers, the state did not raise objections to farmers' claims that it breached the Netherlands-Zimbabwe bilateral investment treaty and therefore was liable to all the losses and damage incurred.

"In a rather unusual turn of events, Zimbabwe did not raise objections to the tribunal's jurisdiction, thus ensuring that written and oral arguments on the merits would proceed forthwith," said the International Institute for Sustainable Development newsletter, Investment Treaty News (ITN), dated October 30.

…

USA: New issues raised in Hall Street (Can parties agree to expand the scope of US court review arbitration awards beyond the areas set out in the Federal Arbitration Act?)

http://www.scotusblog.com/wp/uncategorized/supplemental-briefing-ordered-in-hall-street/

The US Supreme Court in the Hall Street v. Mattel case (Can parties agree to expand the scope of US court review arbitration awards beyond the areas set out in the Federal Arbitration Act?) has just taken today the unusual step of asking for supplemental briefs on the relevance of contract law or common law on that issue. ScotusBlog has details - http://www.scotusblog.com/wp/uncategorized/supplemental-briefing-ordered-in-hall-street/

…

South Africa: Country Stands Outside Global Agreement On Fairness

November 15, http://allafrica.com/stories/200711150403.html

SA, which prides itself on its enlightened constitution, has a concealed trap for foreign investors who invest here as well as for local investors who invest in other countries, specifically in the rest of Africa.

…

The key to this lack of follow-through on the investment front can be found in the fact that SA is not a signatory to the International Convention for the Settlement of Investment Disputes between States and Nationals of Other States (ICSID). This convention dates from 1966. It established a tribunal that is the final resort for a foreign investor to obtain fair and just treatment should the investment suffer loss of value due to direct or indirect action by the state.

Direct action against the investment could be expropriation of the assets of the investor, while indirect action includes the introduction of measures that inhibit or preclude the normal operation and functioning of the investment.

An example of indirect action against a foreign investor is a case brought to ICSID that is summed up in an article on Opinio Juris, an international law and politics internet blog, as: "European-based investors in SA's mining industry have mounted an international arbitration against the South African government alleging that that country's new Black Economic Empowerment mining regime violates ... investment protection treaties concluded by SA with Italy and Luxembourg."

As the article concludes, it is interesting that "the foreign investors' calculus is that international arbitration is a better forum to protect their property rights than the South African domestic courts".

…

Beijing tightens foreign investment rules

November 16, http://www.atimes.com/atimes/China_Business/IK16Cb01.html

HONG KONG - The Chinese government has announced it will no longer encourage foreign investment in certain export-oriented manufacturing industries from December 1, in a move analysts say is aimed at easing the ire of other World Trade Organization (WTO) members.

On the other hand, China will give foreign investors greater access to the financial sector by allowing them to take part in the futures market, an area where foreign funds are currently kept out.

The new regulations were announced recently in the Catalog of Industries for Guiding Foreign Investment (2007), jointly issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC), which has updated the list of industries in which foreign investment is encouraged, restricted or prohibited.

…

DLA Piper establishes disputes practice in the Middle East

http://www.ameinfo.com/138887.html

DLA Piper has continued its impressive push in the Middle East by establishing a specialist disputes team in its Dubai Office.

PODCASTS

Ninth Snyder Lecture Recording Online "National Jurisdiction over Global Business Networks"

http://www.lcil.cam.ac.uk/news/article.php?section=25&article=601

An audio recording of the Ninth Snyder Lecture given by Professor Buxbaum of the Indiana University School of Law, Bloomington on 1 November 2007 is now available online. Professor Hannah Buxbaum is Associate Dean for Research and Professor of Law and Louis F. Neizer Faculty Fellow, Indiana University School of Law, Bloomington.

The recording is only available for a limited period.

EVENTS

Frankfurt Investment Arbitration Moot Court
The Frankfurt Investment Arbitration Moot Court is the first international student competition focussing on investment protection. The students will present their arguments orally on 15 February 2008 before tribunals of arbitration and investment treaty specialists.
February 15 – 16 2008. Frankfurt am Main Chamber of Commerce and Industry, Germany
More information is available at www.investmentarbitrationmoot.com

Resolving Commercial Disputes with Chinese Parties: Trends in International Arbitration and WTO Disputes Resolution - December 4

http://www.dcbar.org/for_lawyers/events/details.cfm?sessionAltCD=120790

Two panels will offer, respectively, their critical views on the latest trends in resolving commercial, investment and trade disputes with Chinese government parties and private enterprises through international arbitration and WTO mechanisms. The luncheon keynote speaker will be Mr. Yu Jianlong, Secretary-General of the China International Economic and Trade Arbitration Commission (CIETAC), addressing international commercial arbitration in China. The panelists include practitioners from the United States and China, representatives of the Chinese and international arbitration and mediation centers, and trade experts from government and private practice. Our speakers will address the dramatic growth in commercial arbitration involving Chinese parties and review the various alternative forums available to resolve disputes inside or outside China. In addition, they will examine the latest cases involving Chinese parties filed before the WTO and discuss general trends in Sino-U.S. commercial dispute resolution.

Arbitration-friendly commercial environment critical to continued economic growth

http://www.ameinfo.com/139396.html

Panels of eminent and experienced international arbitration practitioners are set to gather in Dubai for The London Court of International Arbitration's (LCIA) annual conference to take place in the Dubai International Financial Center (DIFC) on 24th and 25th of November 2007.

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

Pierre Bienvenu New Co-Chair of International Bar Association's Arbitration Committee

http://www.ogilvyrenault.com/en/Media/HeadLinesDetail.aspx?id=361

Ogilvy Renault's Pierre Bienvenu has been appointed co-chair of the International Bar Association's (IBA) Arbitration Committee for a two-year term beginning January 1, 2008. Mr. Bienvenu's appointment was announced at the recent IBA annual conference in Singapore.

Bienvenu says, "I am honoured to be given the opportunity to serve as co-chair of the Committee in what will be an important year in the world of international arbitration." Next year marks the 50th anniversary of the New York Convention, and the IBA's International Arbitration Day, to be held in New York on February 1, 2008, will be devoted to the Convention.