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The Lauterpacht Centre for International Law, is organising its first residential Investment Law and Arbitration course from 17 to 21 September 2018 together with Cambridge Judge Business School. It will provide an advanced introduction to international investment law in the context of public international law and practice, focusing on recent developments. The relevant information may be found here.

 

By Joel Dahlquist (Uppsala University and  The Arbitration Station Podcast)

As the first arbitral awards involving Spain’s reforms of the renewable energy industry are coming in, we are also seeing the first challenges of such awards. Some of these awards are rendered under the ICSID Convention, which means that any annulment proceeding must be brought to an ad hoc annulment committee established in accordance with the ICSID Convention. Many other arbitrations, however, are heard outside of the ICISD system. In these cases, the challenge must be brought to the domestic courts at the place of arbitration.

One example of the latter is the case Novenergia v. Spain, which was heard under the SCC Rules, with the legal seat in Stockholm. The tribunal rendered its award in February this year, ordering Spain to pay compensation of € 53,3 million for a breach of the Energy Charter Treaty’s (“ECT”) fair and equitable treatment clause.

Spanish media last week reported that the Svea Court of Appeal had “annulled” the arbitral award. This is not correct. In fact, the challenge case has only begun. Instead, the decision that the reports referred to was a procedural one: the Svea Court decided, upon request from Spain, to stay any enforcement of the award. This means that the investors cannot enforce the award, at least not in Sweden, while the challenge is pending (or until the Court reverses its order).

In the main part of its submission to the Svea Court, the Spanish government advances several arguments to support its request that the Court set aside the arbitral award. Most notably, the state argues that the arbitral tribunal exceeded its jurisdiction in hearing the case. The primary grounds for this claim are based on the recent Achmea decision by the European Court of Justice (“ECJ”).

In Spain’s view – and this was advanced also immediately after the Achmea decision, when Spain unsuccessfully asked the arbitral tribunal to reconsider its award, which was rendered just before Achmea – the arbitral tribunal did not have jurisdiction, because the arbitration clause of the ECT is incompatible with EU law. Spain claims that Article 26 of the ECT is not valid in intra-EU relations, based on the ECJ’s Achmea reasoning. As a primary ground, Spain claims that it has not agreed to arbitrate under the ECT in arbitrations brought by investors from other EU member states (Novenergia is incorporated in Luxembourg). In the alternative – if the Court finds that Article 26 does contain an offer from Spain to arbitrate – Spain argues that this offer is invalid; otherwise the ECT would allow EU member states to develop a parallel procedural system to try cases that should be properly tried within the EU judicial system.

Another noteworthy aspect of the challenge is that Spain expressly encourages Svea Court of Appeal to refer the case to the ECJ by way of a preliminary reference under Article 267 of the Treaty on the Functioning of the European Union. Spain made this request in the alternative, i.e. if the Svea Court were to find that Article 26 of the ECT is applicable. If that is the case, Spain argues, the ECJ must be consulted. Although Swedish courts are relatively reluctant to ask for preliminary references, there is a case to be made that the ECJ did not sufficiently address the status of the Energy Charter Treaty in the Achmea decision, which only concerned intra-EU bilateral investment treaties, and not multilateral treaties, such as the ECT, to which the EU is also a party. A clarification on how the ECT fits into the post-Achmea regime would therefore be welcome.

Spain also advanced other grounds as to why the Novenergia award should be set aside, but for the wider audience of international lawyers it is clear that the EU law related aspects are the most interesting. With this development, we have now entered a new stage in the post-Achmea debate: the area of domestic courts. For example, Poland has also made a similar argument in its challenge against another arbitral award seated in Stockholm. Thus, a court in an EU member state will soon have to decide what implications the Achmea decision has for arbitrations that are legally seated within that EU member state. It is safe to say that we will hear more from these cases.

For more details on this and other investment arbitrations affected by the Achmea decision, see this recent report from Investment Arbitration Reporter.

Follow Joel at @joeldahlquist .

Hoy se ha publicado la sentencia del Tribunal Arbitral constituido sobre la base del Anexo VII de la Convención de Naciones Unidas sobre el Derecho del Mar en el caso de la República de Filipinas contra la República Popular de China (PCA Case Nº 2013-19). El Tribunal Arbitral afirma su jurisdicción negando que la ausencia de China en los procedimientos prive al Tribunal de competencia, dice que no ha habido abuso de procedimiento por parte de Filipinas y niega la existencia de un ‘tercero indispensable’ (cf. sentencia de la CIJ en el caso Timor oriental, 1995). El párrafo dispositivo completo se puede leer a continuación:

IX. DECISION

413. For the above reasons, the Tribunal unanimously:

A. FINDS that the Tribunal was properly constituted in accordance with Annex VII to the Convention.

B. FINDS that China’s non-appearance in these proceedings does not deprive the Tribunal of jurisdiction.

C. FINDS that the Philippines’ act of initiating this arbitration did not constitute an abuse of process.

D. FINDS that there is no indispensable third party whose absence deprives the Tribunal of jurisdiction.

E. FINDS that the 2002 China–ASEAN Declaration on Conduct of the Parties in the South China Sea, the joint statements of the Parties referred to in paragraphs 231 to 232 of this Award, the Treaty of Amity and Cooperation in Southeast Asia, and the Convention on Biological Diversity, do not preclude, under Articles 281 or 282 of the Convention, recourse to the compulsory dispute settlement procedures available under Section 2 of Part XV of the Convention.

F. FINDS that the Parties have exchanged views as required by Article 283 of the Convention.

G. FINDS that the Tribunal has jurisdiction to consider the Philippines’ Submissions No. 3, 4, 6, 7, 10, 11, and 13, subject to the conditions noted in paragraphs 400, 401, 403, 404, 407, 408, and 410 of this Award.

H. FINDS that a determination of whether the Tribunal has jurisdiction to consider the Philippines’ Submissions No. 1, 2, 5, 8, 9, 12, and 14 would involve consideration of issues that do not possess an exclusively preliminary character, and accordingly RESERVES consideration of its jurisdiction to rule on Submissions No. 1, 2, 5, 8, 9, 12, and 14 to the merits phase.

I. DIRECTS the Philippines to clarify the content and narrow the scope of its Submission 15 and RESERVES consideration of its jurisdiction over Submission No. 15 to the merits phase.

J. RESERVES for further consideration and directions all issues not decided in this Award.

Arbitration and Private International Law Conference
Friday, 27 February 2015

This conference is one of the events of the British Academy funded project “Private International Law and the Development of Integrated Markets – An inter-regional collaboration” led by Dr. Verónica Ruiz Abou-Nigm (University of Edinburgh) and María Blanca Noodt Taquela (University of Buenos Aires and Belgrano).

The conference brings together world renowned academics in the field, practitioners and research students from the UK, Europe and South America. It covers a number of contemporary and dynamic issues in international commercial arbitration and private international law.

Keynote speakers: Diego P. Fernández Arroyo (Sciences Po, Paris) and Guiditta Cordero Moss (University of Oslo)

Speakers include: Simone Lamont-Black (Univ. of Edinburgh), Verónica Ruiz Abou-Nigm (University of Edinburgh), María Blanca Noodt Taquela (Univ. of Buenos Aires and Belgrano), Sophia Tang (Univ. of Newcastle), Christian Berger (Univ. of Leipzig), Rt Hon Lord Hamilton (Former Lord President of the Court of Session and Lord Justice General of Scotland), Ivonne Baatz (Univ. of Southampton), David Holloway (Univ. of East Anglia), Reyadh Seyadi (Univ. of Sheffield), Sebastián Paredes (Univ. of Buenos Aires), Cecilia Fresnedo de Aguirre (Univ. de la Republica and Catholic University of Uruguay), Laura Capalbo (Univ. de la Republica, Uruguay)

Edinburgh Law School, University of Edinburgh

Friday, 27 February 2015 from 8:30 to 18:00 (GMT)


ECCI, High School Yards, Infirmary Street,
Edinburgh EH1 1LZ, United Kingdom

For registration: http://www.eventbrite.co.uk/e/arbitration-and-private-international-law-conference-tickets-14894480793

La séptima conferencia GREIT (Group for Research on European and International Taxation) se celebra los próximos 13 y 14 de septiembre en Madrid, en IE Law School, con el título Litigating EU Tax Law in International, National and Non-EU National Courts. El programa es excelente, con temas muy interesantes, como el alcance extraterritorial del derecho tributario europeo o su conexión con el arbitraje,  y nombres muy conocidos para los que nos dedicamos al derecho internacional, como el del profesor Giorgio Sacerdoti, antiguo miembro del Organo de Apelaciones de la OMC. Felicitaciones a Daniel Sarmiento y Marie-José Garot por la organización de la conferencia. Aquí pueden inscribirse y, si tienen dudas o preguntas, pueden dirigirse a mi colega Domingo Jiménez-Valladolid [domingo.jimenezvalladolid@uam.es].