issue #02, week 03. 16 January 2008
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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OGEMID's Award and Article of the Year 2007

After intense nomination and voting, the much-anticipated results of OGEMID's Award and Article of the Year 2007 are as follows:

Arbitration of the Year

Winner with 64% of the vote: CMS Gas Transmission Company v. Argentina, Decision of the Ad Hoc Committee, September 25, 2007. CMS was described during nomination and voting as: "Great jurists at work," "the most important award of the year," and "likely to influence and shape views on umbrella clauses."

Runner up with 17% of the vote: Compania de Aguas del Aconquija & Vivendi Universal v. Argentina, Award, August 20, 2007. Vivendi was described during nomination and voting as: "Magisterial."

Since the third place award, Eurotunnel v. France & UK, was only beaten into third by Vivendi by 2% of the vote, it is also given special honorable mention here. Eurotunnel was described during nomination and voting as "the first arbitration brought by an investor against two states and the first time that two states were found liable for the same award, with the five person arbitral tribunal probably the most impressive ever constituted."

Article of the Year

Winner with 50% of the vote: J. Paulsson, Enclaves of Justice, TDM Volume 4, Issue #05, September 2007. Enclaves was described during nomination and voting as follows: "Shows how an arbitration practitioner can be simultaneously both pragmatic and intellectual. Great drafting as well, clear and concise. Not to mention the powerful message, with which one can disagree but which one finds difficult to disregard," and "it is the article I most enjoyed reading last year, without hesitation or reservation."

Runner up with 22% of the vote: T. Waelde, New Aspects of International Investment Law, published by Hague Academy of International Law, Nijhoff Publishers, Leiden, 2007; pp. 63-154. * The article was described during nomination and voting as follows: "A veritable tour de force with a very interesting view of how investment tribunals ought to approach their task," and "one of the best analyses of our field I have ever read."

Congratulations to all winners, runners up and nominees.

Mike McIlwrath and Baiju Vasani

* Note: our TDM special "New Aspects of International Investment Law - 2004 Research Seminar by the Hague Academy of International Law"

Young-OGEMID virtual symposia

Young-OGEMID is a free listserv associated with our Transnational Dispute Management law journal for Students and (junior) Associates - you can apply for your free membership here: www.transnational-dispute-management.com/young-ogemid/

Call for contributions

Recent issues:

NEWS

South Africa: BHP Billiton has reached an impasse with the government over the conversion of its exploration leases to new order mining rights

January 16, http://www.miningmx.com/wts/793738.htm

BHP Billiton, which holds rights to two oil and gas exploration blocks off South Africa's West Coast, has reached an impasse with the government over the conversion of its exploration leases to new order mining rights, Business Report said. A key obstacle was understood to relate to the Department of Minerals and Energy's insistence that local courts arbitrate in disputes. Many oil-producing countries allow the International Court of Arbitration, a division of the International Chamber of Commerce, to resolve commercial disputes.

…

USA: Court Awards US Victims More Than $6 Billion For 1989 Libyan Terrorist Bombing Of French Airliner That Killed 170 People Over African Desert

January 15, http://www.crowell.com/NewsEvents/PressRelease.aspx?id=191

A federal judge has ordered the Government of Libya and six of its officials to pay a total of approximately $6 billion in damages arising from the mid-air suitcase bombing of a French-operated UTA Flight 772, DC-10 wide-body jet. The 1989 attack killed 170 people from Europe, Africa and the United States and was one of the deadliest terrorist events in commercial aviation history before September 11, 2001. It came only nine months after a similar suitcase bombing of Pan Am Flight 103 over Lockerbie, Scotland, which killed 270 people.

…

Greece offers investment opportunities: Karamanlis

January 11, http://www.hindu.com/2008/01/12/stories/2008011261131400.htm

Prime Minister of Greece Kostas Karamanlis on Friday said that liberal tax reforms, a new investment law, a law on public-private partnerships, liberalisation of the energy market, reduction in corporate tax rates and simplifications of procedures have opened new investment opportunities for businesses in India.

Addressing a meeting with Indian industries, organised jointly by the FICCI, the CII and the ASSOCHAM, Mr. Kostas Karamanlis said, to further strengthen the institutional framework between two countries priority should be given to the signing of the revised agreement on the avoidance of double taxation as well as to the conclusion of the agreement on air transport services.

…

Tanzania wins £3m damages from Biwater subsidiary

January 11, http://www.guardian.co.uk/business/2008/jan/11/worldbank.tanzania

The government of Tanzania has won more than £3m from a subsidiary of British company Biwater in a long-running dispute over a controversial contract to run the water system of Dar es Salaam.

The Tanzanian government privatised its water system and handed control to Biwater subsidiary City Water Services in 2003. But then problems with the water supply led the government to seize control back from CWS in 2005, since when both parties have been involved in complex legal disputes.

…

India Supreme Court: Intl arbitration awards can be challenged here

January 14, http://economictimes.indiatimes.com/News/News_By_Industry/
SC_Intl_arbitration_awards_can_be_challenged_here/articleshow/2697726.cms

NEW DELHI: The Supreme Court has ruled that international arbitration awards are not immune from challenge in the Indian courts of law. The provisions of Indian Arbitration and Conciliation Act will apply even for the international commercial arbitrations held outside the country, unless the parties, by agreement, exclude all or any of its provisions. The apex court's ruling came in a verdict which set aside an order of Andhra Pradesh High Court.

The High Court had ruled that the international award cannot be challenged even if it is against public policy and in contravention of statutory provisions.

…

Jordan seeks investments in free zones

January 14, http://www.menafn.com/qn_news_story_s.asp?StoryId=1093181272

Arab free zones will be looking for investments from individuals, public and private corporations as well as joint ventures, when a forum convenes here in May to highlight the potential of such areas.

The Free Zones Investment Forum, scheduled for May 28-29, 2008, aims at creating a practical business climate in the Arab free zones in order to attract different types of investments from all over the world, Mahmoud Qteishat, director general of the Free Zones Corporation (FZC), told a press conference on Sunday.

…

Iran: Government to promote foreign investment

January 13, http://www.presstv.ir/detail.aspx?id=38567&sectionid=351020102

Head of Iran's National Center for Research on Globalization has unveiled the Iranian government's investment promotion plans. Esfandiar Rahim-Mashaei noted that further boosting of support for the country's private sector is one of the measures being considered by the government to promote investment.

He further noted that it would not be possible to attract investments without providing the necessary support to the private sector.

…

Russian accounts frozen in France

January 14, http://news.bbc.co.uk/2/hi/europe/7187993.stm

Russian state bank accounts held in France have been frozen following pressure from a Swiss firm that is suing Russia for unpaid debts. Russia's VTB Bank said several accounts held at its French arm had been frozen in line with a court ruling in Paris.

The accounts reportedly belong to the Russian finance ministry, arms firm Rosoboronexport, the Russian Central Bank and the RIA Novosti news agency. The Swiss firm Noga has long been battling to seize Russian state assets.

Noga says a judgement at the Stockholm International Court of Arbitration 11 years ago gives it leave to have Russian state property impounded to recover debts related to an oil-for-food deal with Russia after the collapse of the Soviet Union in 1991.

…

Nigeria: Entering the Magic Circle… Dream Come True

http://www.thisdayonline.com/nview.php?id=100375

The last decade has witnessed a remarkable agitation for Corporate Social Responsibility (CSR) awareness on the part of business enterprises. The legal profession, particularly in more developed countries, is not isolated from this campaign. Emphasis is placed on the notion that a responsible CSR policy is good for business because it enhances reputation and constitutes a significant element in motivating customers to do business with an organisation. Consequently, lawyers can also do well in their practice by doing good.

One of the means by which lawyers may engage in CSR would be not only through the traditional 'pro bono' activities such as the provision of free legal services but by sharing their skills more broadly with less skilled lawyers. It is with this understanding, and the awareness that spreading legal know-how is one of the vital ingredients of international development that the International Lawyers for Africa (ILFA) was launched.

THE INTERNATIONAL LAWYERS FOR AFRICA (ILFA) INITIATIVE

ILFA (www.ilfa.org.uk) was initiated in March, 2006 by Tim Taylor, a Partner in SJ Berwin LLP London. ILFA recognises the need for African lawyers to adopt legal norms recognised internationally in order to succeed in a world driven by global economic forces and competition for global corporate markets. As such, ILFA (in partnership with leading international lawyers, major London City and international law firms and academics) seeks to provide lawyers from Africa with specialist legal commercial skills necessary for their nations to compete and excel. In this pursuit, ILFA provides African lawyers, selected on an in-country competitive basis, with high quality work experience and training in top international law firms where they are exposed to international business law issues and key legal practice skills.

…

Nigeria: U.S. Court Dismisses Case Against NNPC

January 9, http://allafrica.com/stories/200801090194.html

The United States (US) fifth Circuit Court of Appeal has dismissed the Gulf Petro Trading Co, et al v. Nigerian National Petroleum Corporation (NNPC) case before it for lack of subject matter jurisdiction. Gulf Petro had made allegations of bribery and corruption against the NNPC, when the case was before an international arbitration in Switzerland. Details of the alleged corruption were not made known.

THISDAY gathered that Gulf Petro had tried and failed to have the award set aside by the Swiss Courts thus claiming that it had no avenue under Swiss law to pursue its alleged corruption claims, having been unable to initiate a criminal action against arbitrators in Switzerland, a prerequisite to such action.

Consequently, the company brought the case before the US Court of Appeal.

....

The full text of the opinion is available here http://www.ca5.uscourts.gov/opinions%5Cpub%5C06/06-40713-CV0.wpd.pdf
If the link above does not work, enter the docket number "06-40713" in the searchbox here http://www.ca5.uscourts.gov/Opinions.aspx

Pakistan plans to move Intl Court against WB decision on Baghliar

January 11, http://68.178.224.54/udayavani/showstory.asp?news=0&contentid=486854&lang=1

Pakistan plans to move the International Court of Arbitration to challenge a World Bank neutral expert's decision in favour of India in the dispute over the Baghliar hydropower project in Jammu and Kashmir. Raymond Lafitte, the neutral expert who arbitrated on the project, had in his final determination issued on February 12, 2007 subscribed to Pakistan's three points of difference but upheld India's stand on the design of the dam's spillway gates.

Pakistani authorities, however, believe Lafitte's ruling will allow India to regulate the waters of the Chenab river and inflict "huge damage" to the irrigation system in Punjab province, which meets 85 per cent of the food requirements of the country.

…

Azurix Corp. v. Argentine Republic (Case No ARB/01/12)

Decision on the Continued Stay of Enforcement of the Award (Dec 28, 2007)

TGS implements arbitration

January 6, http://www.tgsnopec.com/newsroom/newsroom_details.asp?id=391

TGS-NOPEC Geophysical Company ASA (TGS) and Wavefield Inseis ASA (Wavefield) has not reached an agreement regarding completion of the merger during the 30 days negotiation period. The approved merger plan calls for disagreements between the two companies to be referred to a Norwegian arbitration process. This arbitration process has now been implemented by TGS.

Wavefield and TGS have previously agreed to refer their disagreements regarding the merger to arbitration in Norway. These procedures were specifically discussed and approved by Wavefield and TGS during the contract negotiations. TGS has implemented the arbitration process in a letter of today to Wavefield .- Let a Norwegian arbitration panel look at the facts and settle the matter. We'll abide by the panel's decision, says Claus Kampmann, Chairman of TGS.

South Africa: All ahead slow on SA granite expropriation case

January 8, http://www.miningmx.com/mining_fin/771740.htm

THE R2.7bn expropriation claim being brought against the South African government by granite companies Marlin and RED Graniti is not likely to be heard until the end of this year. That's according to Peter Leon, partner at legal firm Webber Wentzel Bowens, who specialises in mining regulatory matters and is advising the two companies.

Marlin and RED Graniti are owned by Italian investors through a Luxembourg-based holding company called Finstone. The case is being brought in terms of bilateral investment treaties entered into by the South African government with the governments of Belgium, Italy and Luxembourg.

It was registered on 8 January 2007 and will be settled through arbitration at the International Centre for Settlement of Investment Disputes (ICSID) which is part of the World Bank.

…

WEBLOGS

Article: International ADR vs. International Litigation

http://arbitration-forum.blogspot.com/2008/01/international-adr-vs-international.html

In Foreign Feuds (InsideCounsel, Jan. 2008, http://www.insidecounsel.com/article.php?article=1582), author Mary Swanton concludes that arbitration is preferable to litigation for international contract disputes for two primary reasons:

1. Your dispute will be heard in a neutral forum, instead of in the other party's home court where you may start with an insurmountable disadvantage and face a corrupt judiciary or a backlog that stymies resolution of the matter for a decade.

2. With arbitration you have an excellent shot at getting an award enforced—not the case when a contract dispute goes to court in many countries around the world.

…

Some Comments the US-Antigua Gambling Arbitration

International Economic Law and Policy Blog, http://worldtradelaw.typepad.com/ielpblog/2008/01/some-comments-t.html

The recent arbitration of the SCOO available for Antigua to use against the United States in the Gambling case featured some important developments (WT/DS285/ARB, 12/21/07).

Perhaps the most interesting is the new standard employed by the arbitrator to determine the counterfactual that would be used to model the level of the SCOO. In this new test, the counterfactual selected has to be "reasonable" and "plausible" given the policy objectives of the government that has been found to violate WTO law (see paras. 3.45, 3.51, 3.56). I do not recall the arbitrator in the Hormones or FSC case taking into account policy objectives of the EC and the US respectively.

…

PODCAST

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.

New episodes is available for download:

Welcome to IDN: A Three-Minute Guide to Our Archived Episodes.

"Great Mediators" --An Interview with JAMS's General Counsel, Jay Welsh

Join Mike as he discusses with JAMS' general counsel, Jay Welsh, how great mediators pull parties together in difficult business cases.

Download or subscribe here http://www.cpradr.org/TrainingEvents/Podcasts/tabid/261/Default.aspx

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

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

Jean Kalicki elected as partner Arnold & Porter LLP

Arnold & Porter LLP has elected former counsel Jean Engelmayer Kalicki as partner. Ms. Kalicki is a member of the litigation and international arbitration practice groups, is resident in the firm's Washington, D.C. office. She graduated magna cum laude from Harvard Law School, where she was editor for the Harvard Law Review. Ms. Kalicki has particular expertise in investment treaty arbitration and has represented both sovereigns and investors in disputes before the International Centre for Settlement of Investment Disputes (ICSID). She also frequently counsels clients on structuring international business transactions to obtain protection from applicable investment treaties and selecting arbitration clauses appropriate to particular transactions. Ms. Kalicki was elected by Global Arbitration Review as one of the top 30 women in arbitration worldwide (Sept. 2007), as well as being named a leader in her field by Chambers USA, Legal 500, and the International Who's Who of Business Lawyers.

White & Case Elects 31 New Partners

January 10, http://www.whitecase.com/News/Detail.aspx?news=1946

Global law firm White & Case LLP announced the election of 31 new partners, effective January 1, 2008.

"These new partners are the future of White & Case," said Chairman Hugh Verrier. "Their talent and commitment enhance our ability to serve our clients' needs around the world."

Among the new partners are:

Charles Nairac concentrates on international commercial and investor-state arbitration, with emphasis on the construction sector. He has been involved in international arbitrations conducted under the rules of the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), American Arbitration Association (AAA) and the United Nations Commission on International Trade Law (UNCITRAL), as well as in ad hoc arbitrations.

Ank Santens focuses on international arbitration, advising clients on the drafting of dispute resolution clauses in international contracts and assisting them in settlement negotiations involving a variety of countries and legal systems in multiple industries, including construction, power, oil and gas, telecommunications, steel, aluminum, banking and consumer goods.

Paul Cowan has extensive experience in national and international construction dispute resolution, including international and national arbitration, litigation and adjudication. He also has considerable experience negotiating and advising on a wide range of construction contracts, consultancy appointments, development agreements, collateral warranties, bonds and guarantees involving all forms of construction procurement.

BLG ramps up arbitration practice with Peter Flint

Barlow Lyde & Gilbert (BLG) has boosted its international arbitration capabilities with the hire of a former senior arbitration partner from Watson Farley & Williams. Peter Flint, who headed Watson Farley's Singapore office in 2001, is experienced in commercial dispute resolution with a focus on arbitration in the energy, oil and gas, trade and finance sectors. He left Watson Farley last year.

…

Justice Joseph P. Sullivan Becomes Of Counsel to Holland & Knight's New York Office

NEW YORK - Holland & Knight is pleased to announce that Justice Joseph P. Sullivan has become Of Counsel to the firm's New York office. A former Presiding Judge of the Appellate Division, First Judicial Department, in New York City, he stepped down as an Associate Judge from the Court on December 31, 2007.

"Holland & Knight is honored to have Justice Sullivan as Of Counsel to the firm," said Christopher Kelly, a partner in the firm's New York office and chair of the office's Litigation Practice Group. "His extensive judiciary and appellate experience and outstanding reputation throughout New York will allow him to make significant contributions to our clients' interests in appellate, mediation and arbitration services."

…

15 new partner appointments for Salans

http://www.salans.com/Default.aspx?sID=893&cID=213&ctID=43&lID=0

Salans announces 15 new partners to the firm, with its widest geographical and practice group spread yet - reflecting the international core of the firm. Salans Chairman Stephen Finch commented, "It is particularly pleasing to see this year's round of partner appointments encompassing the true breadth of our international offering - the financial centres of London, Paris and New York combined with the significant hubs of Warsaw and Kyiv all featuring prominently. And our practices - from corporate to tax, alongside the Salans specialist areas of competition, dispute resolution, employment, intellectual property, insolvency, IT and real estate - are all continuing to grow."

Salans now has 174 partners globally operating from 18 offices across 17 jurisdictions. This news follows last week's announcement of the Istanbul presence of Salans almost doubling in size, in order to keep up with the domestic and international demands of clients' rapidly increasing activity in Turkey.

…

Anna Maria Pukszto leads the insolvency and restructuring practice in the Warsaw office. She is also part of the firm's dispute resolution team, and has represented clients in headline-making disputes. Anna is also on the Board of the Polish Competition Law Society and is a member of INSOL Europe.

…

Salans launches London arbitration practice

http://www.thelawyer.com/cgi-bin/item.cgi?id=130762&d=415&h=417&f=416

Salans is set to launch an arbitration practice in London on Thursday 17 January. The new department will be headed up by counsel George Burn, who joined the US firm last year from Denton Wilde Sapte.

In addition to Burn, the practice will be made up of three partners, a consultant and four assistants.

…

BOOKS

Investor-State Dispute Settlement and Impact on Investment Rulemaking

http://unctad.org/Templates/webflyer.asp?docid=9438&intItemID=2068&lang=1

Series on International Investment Policies for Development

Highlights

Investment treaty provisions on investor-State dispute settlement have frequently been used in recent years, and as a result there has been in an increase in arbitral tribunal awards touching upon key procedural and substantive aspects of investment law. This has contributed to the development of a jurisprudence that, although it is still taking shape, has impacted on the evolution of investment rulemaking, as witnessed in recent bilateral investment treaties and economic integration agreements with investment provisions.

Indeed, as demonstrated by this paper, the experience with the investor-State dispute settlement of a number of countries (mostly in the Asia-Pacific region) appears to have influenced the development of new international investment agreements (IIAs) by those countries. Observing how previous IIAs were interpreted and applied by arbitral tribunals, their Governments have come up with new provisions and new language, which address most of the problems that arose in the context of investment disputes. Thus, the definition of "investment" has been made more precise, several provisions dealing with standards of protection have been redrafted and clarified, the concept of transparency in the context of investment agreements has been improved and redefined, and it has been made clear that investment protection and liberalization must not be pursued at the expense of other key public policy objectives. Furthermore, investor-State dispute settlement procedures have been updated and modernized through, inter alia, fostering the provision of more information for civil society and its increased participation in those procedures.

Although inferring trends in jurisprudence arising from investor-State dispute settlement cases has to be handled with caution, this study suggests that two important lessons can be derived from practice over the last decade. First, the increase in investment disputes has tested the wisdom of negotiating IIAs with extremely broad and imprecise provisions delegating to arbitral tribunals the task of identifying the meaning that the disputed provision should have. Second, when negotiating IIAs countries should pay attention not only to the wording of the agreement, but also to the interaction between the IIA and the arbitration convention(s) referred to in the IIA.

From a systemic perspective, it is noteworthy that most countries that are parties to the emerging new generation of IIAs that reflect investor-State dispute settlement experience are also still parties to numerous "old" IIAs containing provisions using the same broad and imprecise language that has triggered investment disputes elsewhere. The resultant risk of incoherence is especially high for developing countries that lack expertise and bargaining power in investment rule-making, and that may have to conduct negotiations on the basis of divergent model agreements of their negotiating partners. However, the growing legal sophistication of investment dispute resolution also points to a further strengthening of the rule of law at the international level that should benefit developing countries that lack the political and economic power of developed nations. Furthermore, the increased number of arbitrations may also motivate developing host countries to improve domestic administrative practices and laws in order to avoid future disputes; this would further strengthen the predictability and stability of the legal framework that the conclusion of IIAs was supposed to produce in the first place.

International Investment Law in Context

edited by August Reinisch and Christina Knahr
University of Vienna, School of Law
ISBN: 90-977596-48-7
Hardbound, vii+208
Publication date: December 2007
Price: €55 /US$ 80

Areas: dispute settlement, international investment law, international economic law

In the last decade international investment law has developed into one of the core areas of international law. The reason for this development is twofold. The number of cases has increased rapidly. ICSID has over a hundred pending cases and there are more before ad hoc tribunals, mostly operating under the UNCITRAL Rules. In addition, investment law has addressed a number of novel issues and has come up with some innovative solutions.

This book brings together the papers delivered at the Young Scholars Conference in International Economic Law, which took place at the University of Vienna/Law School in June 2007. Under the general topic of "Current Issues and Developments in International Investment Law" the speakers addressed core issues like the definition of investment, legitimate expectations of investors or the meaning and importance of references to domestic law included in many BITs. Additionally, topics like the role of investment law in the context of the European Union and its relation to cultural matters, human rights, and other non-investment issues were also raised.

As international investment law is becoming more and more significant, a book dedicated to the latest developments in the field will be of utmost importance to anyone interested in this area of law.

Table of Contents