Transnational Dispute Management - TDM News Digest - The Network for International Arbitration, Mediation and ADR, International Investment Law and Transnational Dispute Management

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issue #28, week 44. 30 October 2008
Prepared by TDM and Aloysius Gng (CEPMLP/Dundee)

TDM

FDI Moot Award in Honor of Professor Thomas Waelde

http://www.fdimoot.org

In keeping with Professor Wälde's focus on advocacy, the founders of the Foreign Direct Investment International Moot Competition wish to announce that a special award will be named in honor of Professor Thomas Waelde, to be given to the Competition's top oral advocate each year:

"The Thomas Wälde Award for Advocacy - Best Advocate"

The FDI Moot organisers wish to express our sincere thanks to Professor Wälde's family for permitting us to honor Professor Wälde with this Award.

More information about the FDI Moot can be found at www.fdimoot.org.

IDN 47: Thomas Wälde on Advocacy in International Arbitration

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

In this episode, Thomas Wälde and IDN host Michael McIlwrath, discuss arbitration advocacy: what works, and what doesn't, for parties trying to convince an arbitral tribunal of their case.

NEWS

Frontera Resources Reports Favorable Decision in GAC Arbitration

October 29, http://www.fronteraresources.com/media.php?news_id=305&year=2008

Frontera Resources Corporation, an independent oil and gas exploration and production company, today announced that on October 24, 2008, it had received a favorable ruling in its arbitration with GAC Energy Company and GAC International Holdings Ltd (collectively "GAC"). The arbitrator awarded GAC no damages in its claim against Frontera and Frontera Resources Georgia Corporation, and directed GAC to pay Frontera's arbitration costs of approximately $85,000. The arbitration was conducted through the International Center for Dispute Resolution of the American Arbitration Association in Houston.

This matter involved a dispute over GAC's performance under a 2002 farmout agreement for an ownership interest in Frontera's Block 12 license area in Georgia. Frontera conditionally assigned GAC an interest in Block 12 under the farmout agreement, subject to completion of certain financial and work obligations. However, GAC ultimately defaulted on its obligations prompting a reassignment of its conditional interest in 2004. GAC initiated this arbitration in 2007 contending that it earned a portion of the defaulted interest.

The arbitrator found that GAC failed to complete its obligations under the farmout agreement and rejected GAC's claims for either an interest in Block 12 or $19 million in restitution. The arbitrator also denied GAC's claim for a partial ownership interest under the doctrine of "substantial performance." The arbitration, which is binding on the parties, resolves all claims and counterclaims between Frontera and GAC with respect to the farmout agreement.

Within sight of a legal El Dorado

October 28, http://www.reportonbusiness.com/servlet/story/RTGAM.20081028.wlawcolumn1028/BNStory/robLawPage/home

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Venezuela's storied Las Cristinas gold deposit represents another motherlode, this time a legal El Dorado that is beginning to strengthen the weak hand of Canadian companies against fickle foreign governments and state agencies.

Vannessa, which recently changed its name to Infinito Gold Ltd., has spent seven years and hundreds of thousands of dollars in legal fees on nearly a dozen legal proceedings before unsympathetic Venezuelan courts to claim more than $181-million it says it invested in the mining camp. Is it a doomed legal quest against the entrenched populist regime of Hugo Chavez? Until a few months ago, the answer would have been a decisive "yes."

...

Yves Fortier, a partner with Ogilvy Renault LLP and a respected author of many international arbitration decisions, said "scoundrel" governments are finding it much harder to ignore arbitration hearings and awards.

"Sooner or later, countries need to borrow money from international investors so they will only be able to refuse to honour arbitration decisions for so long."

Top Russian arbitration court says imposing back taxes on JT invalid

October 27, http://www.tradingmarkets.com/.site/news/Stock%20News/1973815/

Japan Tobacco Inc. said Monday that Russia's supreme arbitration court ruled on Oct. 6 that imposing back taxes on the Japanese cigarette maker was invalid, dismissing an appeal by Russian taxation authorities. In July 2004, the municipal taxation authorities in Moscow notified JTI Marketing and Sales, a local subsidiary of JT, of the imposition of back taxes of about 2.4 billion rubles, around 8 billion yen, as unpaid tax dues in 2000.

Dissatisfied with the order, the JT unit filed a suit with the Moscow Arbitration Court, requesting the court confirm the invalidity of the taxation. Although the JT subsidiary lost in the initial ruling, Russia's Supreme Arbitration Court ditched the local ruling imposing the back taxes and sent the case back to the local arbitration court.

...

Paul Weiss leads Hexion and Huntsman dispute

October 28, http://www.thelawyer.com/cgi-bin/item.cgi?id=135402&d=415&h=417&f=416

Paul Weiss Rifkind Wharton & Garrison has won a leading role on the high-profile dispute between chemicals companies Hexion and Huntsman. The New York firm's chairman elect Brad Karp is advising Hexion alongside Wachtell Lipton Rosen & Katz on the damages litigation between the two companies.

...

Czech Republic to pay Croat in lost arbitration

October 17, http://www.cbw.cz/en/cr-to-pay-croat-in-lost-arbitration-/9285.html

The Czech Republic has lost an international arbitration with Croat businessman Pren Nreka and will have to pay him about Kc 30 million for having breached the Czech-Croat agreement on investment protection, law firm Wolf Theiss, which represented Nreka in the proceedings, said. In the early 1990s Nreka signed a contract with the Czech Paedagogical Center to reconstruct a dilapidated building in Prague's center, in consideration for which he received the right to enter into a lease contract for a part of the reconstructed building for 15 years. In 2002 the Czech Republic challenged the lease contract in court and won. Nreka turned to the International Court of Arbitration in Paris.

See also Czech Republic - ZIPimex

NewspaperDirect Prevails in Arbitration

October 29, http://www.editorandpublisher.com/eandp/departments/technology/article_display.jsp?vnu_content_id=1003883009

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NewspaperDirect announced that the International Center for Dispute Resolution of the American Arbitration Association ruled in NewspaperDirect's case against ToDaily (Victory Interactive Media SA). The AAA found ToDaily liable for damages and issued a final award in favor of NewspaperDirect.

In March 2007, NewspaperDirect suspended its content feed to and ended its license agreement with ToDaily, prompted by concerns, it says, that its content was being misused by ToDaily, and that royalties due NewspaperDirect and its publisher partners were not being paid. Since then, NewspaperDirect sought damages in U.S. courts. The action is now concluded.

NewspaperDirect said the three-member panel's binding and final decision found ToDaily had breached its agreement by, among other things, failing to pay royalties when due and wrongfully competing with NewspaperDirect.

NewspaperDirect said it is taking steps to enforce the AAA's decision.

...

UAE Stance On Islands Issue Is Very Smart

October 28, http://web7.bernama.com/bernama/v3/news_world.php?id=367590

Spanish Senate President, Francisco Javier Rojo Garcia, has said that UAE's efforts to regain control of its three islands, occupied by Iran, through direct negotiations or international arbitration was a wise decision and the best means of resolving international dispute, Emirates news agency, WAM, reported Tuesday.

...

Amkor receives unfavorable interim ruling in Tessera arbitration, reports favorable results in Alcatel, Motorola proceedings

October 29, http://www.rttnews.com/Content/BreakingNews.aspx?Node=B1&Id=756845

Amkor Technology Inc. said Tuesday evening that the arbitration panel from the International Court of Arbitration of the International Chamber of Commerce issued an interim order in the arbitration proceedings related to Amkor's license agreement with Tessera Technologies Inc. (TSRA: News ). Under the interim order, Tessera was awarded monetary damages for Amkor's use of Tessera's patents.

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ICC YAF Regional Coordination Committee members

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

ICC International Court of Arbitration announces ICC YAF Regional Coordination Committee members.

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Australia: BHP and Rio under pressure to open their lines

October 27, http://www.busrep.co.za/index.php?fArticleId=4682265&fSectionId=552&fSetId=662

Railways owned by mining giants BHP Billiton and Rio Tinto in iron ore-rich remote western Australia should be opened to other parties, the government ruled Monday.

Treasurer Wayne Swan said Rio's Hamersley and Robe railways and BHP's Goldsworthy line should be available to third party access for 20 years from November 19, 2008.

...

"But it provides a third party with recourse to binding arbitration before the Australian Competition and Consumer Commission (ACCC), if it is unable to agree with the service provider on access terms and conditions," he said.

The ACCC has the power to impose access terms and conditions, or to refuse access if it finds that the service providers cannot be appropriately compensated, he added.

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IPCO (Nigeria) Ltd v Nigerian National Petroleum Corpn [2008] EWCA Civ 1157; [2008] WLR (D) 324

http://www.lawreports.co.uk/WLRD/2008/CACiv/oct0.9.htm

Part of a New York Convention arbitration award could be enforced pursuant to the Arbitration Act 1996.

The Court of Appeal so held in a reserved judgment in dismissing an appeal brought by the defendant, Nigerian National Petroleum Corporation ("NNPC"), against the decision of Tomlinson J [2008] Bus LR D105, when he gave judgment for the claimant, IPCO (Nigeria) Ltd, for over US $85m.

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Malaysia important venue for International dispute resolution

http://www.dailyexpress.com.my/news.cfm?NewsID=60542

Kota Kinabalu: A two-day 8th Board of Trustees meeting of the Chartered Institute of Arbitrators (CIArb) began at Shangri-La's Tanjung Aru Resort and Spa on Thursday. At the event, the organisation will also be conducting a congress for its branch chairpersons to deliberate on issues affecting the operation of the organisation's branches from all over the world.

In a press conference, Thursday, Teresa Cheng, President of CIArb said KK was picked by the institution's branch in Malaysia to conduct the meeting-cum-congress.

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Arbitration hits chance of full B&B Power sell-off

October 24, http://www.theaustralian.news.com.au/story/0,25197,24542980-643,00.html

THE full sale of Babcock & Brown Power has been labelled "very difficult". The moves comes after revelations this week that its West Australian subsidiary has been drawn into legal proceedings with the North West Shelf venture participants over gas supply contract prices.

BBP announced to the market on Wednesday that a dispute with the North West Shelf venture had been escalated to arbitration after the collapse of private negotiations over the terms of the contract, which was first entered into in 1998.

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Babcock's power problem

October 23, http://www.businessspectator.com.au/bs.nsf/Article/Babcocks-power-problem-KNSWH?OpenDocument&src=sph

Babcock & Brown's decision this year to "rescue" Babcock & Brown Power (BBP) with a $410 million emergency loan facility to tide the company over until it could sell assets is in danger of backfiring badly.

BBP's revelation yesterday that it is in arbitration over one of the Alinta gas supply contracts with oil and gas heavies from the North West Shelf is a major blow to the possible sale by Babcock of BBP.

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Baghliar Dam - The clock is clicking

http://dailymailnews.com/200810/24/dmcolumnpage.html

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The Treaty gave three Eastern Rivers, Ravi, Sutlej and Beas to India and three Western Rivers, Sindh, Jhelum and Chenab to Pakistan. As an upper Riparian State, India is allowed specific uses in the Pakistan-dedicated rivers as well but the rider clause dictates that such projects would remain run-of-the-river ventures; not curtailing the downstream flow in any manner. Generation of hydel electricity is one such usage but it is a circumscribed privilege; no reduction of water flow to Pakistan. Unfortunately, in case of the Baghliar Dam that is exactly what is happening but there is a way out; the Treaty outlines a comprehensive mechanism for conflict resolution. There is a permanent Indus Water Commission comprising a Commissioner each from the two countries to resolve differences between the parties. The Treaty also caters for the settlement of unresolved disputes through the International Court of Arbitration.

Enforcement of any Treaty however thoughtfully conceived, requires a fair dose of fair play and accommodation on part of the parties concerned. Baghliar's design has been objected to by Pakistan and amended in the light of the 'determination' given by the World Bank appointed Neutral Expert (NE), Raymond Lafitte , Professor at the federal institute of technology of Lausanne, Switzerland on February 12, 2007. The 'Determination' by the NE is based upon interpretation of the treaty in the light of 'new technical norms' but doesn't, apparently, factor in the Indian malice in interpreting the same on ground. Or how does one reconcile the shortage of water caused by the Dam when Pakistan has an exclusive right over its use and a NE has approved its technical design?

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WEBLOGS

India: Supreme Court Rules on the Meaning of “International Commercial Arbitration”, With Consequences for Forum Shopping

The case of TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd., decided by a single judge bench of the Supreme Court in May 2008, is an important judgment dealing with the issue of forum shopping with respect to seats of arbitration, and arbitration laws. In TDM Infrastructure, the facts were these: the two parties to the dispute were companies registered under the Companies Act of 1956. However, the directors and the shareholders of the petitioner company were residents of Malaysia and the Board of Directors of the petitioner also sat in Malaysia. The respondent entered into a contract with the petitioner, which also contained an arbitration clause. This arbitration clause mandated that the law applicable in case of a dispute would be the Indian Arbitration Act of 1940 and amendments thereafter.

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See also "No foreign arbitration for Indian cos in dispute: SC", May 20 2008, http://timesofindia.indiatimes.com/Business/India_Business/No_foreign_arbitration_for_Indian_cos_in_dispute_SC/articleshow/3054666.cms

EVENTS

FDI Moot Competition & Inaugural Conference (Friday October 31st - Sunday, November 2, 2008)

FDI Moot Competition: Saturday and Sunday, Nov. 1-2, 2008 the inaugural Foreign Direct Investment International Moot Competition (FDI Moot) will take place, hosted by Suffolk University Law School in Boston. More than 20 law schools from around the world will send teams of students to Suffolk to compete in the inaugural FDI Moot. Teams will represent both investors and host countries in a hypothetical dispute concerning a large foreign investment. The first FDI Moot has attracted teams from Australia, Argentina, Chile, Costa Rica, Ecuador, Ethiopia, Georgia, Hong Kong, India, Poland, Romania, Russia, Serbia and the United States (there are eight teams from U.S. law schools). The FDI Moot is also grateful to the more than 40 arbitrators who have signed-up and will be travelling to Boston to judge the competition rounds. The FDI Moot Competition intends to facilitate a mission of education and international exchange for students and professionals.

The co-founders of the FDI Moot Competition include the Center for International Legal Studies in Salzburg, Austria; Pepperdine University Law School in California; the University of Dundee's Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) in Scotland; and the German Institution of Arbitration, Cologne, Germany, and Suffolk University Law School. The international law firm of Skadden, Arps, Slate, Meagher & Flom LLP is sponsoring the FDI Moot, supporting the Skadden, Arps Trophy for the winning team. Oxford University Press will sponsor the Oxford University Press Awards for Best Written Claimant and Respondent Memorials. The FDI Moot will also name a special award in honor of Thomas Wälde: "The Thomas Wälde Award for Advocacy - Best Advocate". Transnational Dispute Management acts as the FDI Moot’s media partner.

For more information www.fdimoot.org

International Arbitration Seminars in Ecuador and Bolivia

http://www.iccwbo.org/court/arbitration/index.html?id=25126

ICC Arbitration was in spotlight in Ecuador and Bolivia on 7 and 10 October 2008, where Jason Fry, Secretary General of ICC International Court of Arbitration, participated at seminars on International Arbitration. Lawyers, business and government representatives were present.

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Hersch Lauterpacht Memorial Lectures 2008-9 Part Two & Three - 12 & 13 November 2008

Date : Wednesday 12th November 2008, 18:00
Speaker : Dr Andres Rigo Sureda, former Deputy Legal Counsel, World Bank; International Arbitrator
Time : 6pm-7pm
Venue : Finley Library, Lauterpacht Centre, 5 Cranmer Road, Cambridge

Date : Thursday 13th November 2008, 18:00
Speaker : Dr Andres Rigo Sureda, former Deputy Legal Counsel, World Bank; International Arbitrator
Time : 6pm-7pm
Venue : Finley Library, Lauterpacht Centre, 5 Cranmer Road, Cambridge

The Hersch Lauterpacht Lectures are given annually in Cambridge to commemorate the unique contribution to the development of international law of Sir Hersch Lauterpacht. The lectures are presented as a three-part series by a person of eminence in the field of international law. A revised and expanded version of the lectures is usually published in the Hersch Lauterpacht Lecture Series by Cambridge University Press.

The Centre's Lectures are recognised by both the Law Society and the Bar Council as Continuing Professional Development (CPD) accredited courses.

Documentary evidence in arbitration to be highlighted - 24 November

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

The practice of documentary evidence in international arbitration is rapidly changing. The ICC Institute of World Business Law has chosen this topic as the theme for its annual meeting, which will take place on 24 November in Paris.

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ICC: 4th International Commercial Mediation Competition

ICC has announced dates for another round of its International Commercial Mediation Competition. The fourth edition of the competition will take place in Paris on 7-12 February 2009. With a view towards training lawyers to better meet the dispute resolution needs of today’s cross-cultural market, the competition gives students an opportunity to test their problem-solving skills in a moot international mediation.

More information is available at ICC website.

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